NEW YORK, May 29, 2024 /PRNewswire/ -- The Gross Law Firm issues the following notice to shareholders of QuidelOrtho Corporation f/k/a Quidel Corporation (NASDAQ: QDEL). Shareholders who purchased shares of QDEL during the class period listed are encouraged to contact the firm regarding possible lead plaintiff appointment. Appointment as lead plaintiff is not required to partake in any recovery. CONTACT US HERE: https://securitiesclasslaw.com/securities/quidelortho-loss-submission-form/?id=81721&from=4 CLAS ...

BENSALEM, Pa., May 23, 2024 /PRNewswire/ -- Law Offices of Howard G. Smith announces that investors with substantial losses have opportunity to lead the securities fraud class action lawsuit against QuidelOrtho Corporation ("QuidelOrtho" or the "Company") (NASDAQ: QDEL). Class Period: February 18, 2022 – April 1, 2024 Lead Plaintiff Deadline: June 11, 2024 To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absen ...

NEW YORK, May 23, 2024 /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors in QuidelOrtho Corporation f/k/a Quidel Corporation ("QuidelOrtho" or the "Company") (NASDAQ: QDEL) of a class action securities lawsuit. CLASS DEFINITION: The lawsuit seeks to recover losses on behalf of QuidelOrtho investors who were adversely affected by alleged securities fraud between February 18, 2022 and April 1, 2024. Follow the link below to get more information and be contacted by a member of our team: https://zlk.com/ ...

CONTACT US HERE: NEW YORK, May 21, 2024 /PRNewswire/ -- The Gross Law Firm issues the following notice to shareholders of QuidelOrtho Corporation f/k/a Quidel Corporation (NASDAQ: QDEL). Shareholders who purchased shares of QDEL during the class period listed are encouraged to contact the firm regarding possible lead plaintiff appointment. Appointment as lead plaintiff is not required to partake in any recovery. NEXT STEPS FOR SHAREHOLDERS: Once you register as a shareholder who purchased shares of QDEL dur ...

NEW YORK, May 20, 2024 /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors in QuidelOrtho Corporation f/k/a Quidel Corporation ("QuidelOrtho" or the "Company") (NASDAQ: QDEL) of a class action securities lawsuit. CLASS DEFINITION: The lawsuit seeks to recover losses on behalf of QuidelOrtho investors who were adversely affected by alleged securities fraud between February 18, 2022 and April 1, 2024. Follow the link below to get more information and be contacted by a member of our team: https://zlk.com/ ...

NEW YORK, May 17, 2024 /PRNewswire/ -- Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/. WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources or any meaningful peer recognition. Many of these firms do not actually litigate securities cl ...

NEW YORK, May 17, 2024 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP notifies investors in QuidelOrtho Corporation f/k/a Quidel Corporation ("QuidelOrtho" or the "Company") (NASDAQ:QDEL) of a class action securities lawsuit. WHY LEVI & KORSINSKY: Over the past 20 years, the team at Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. Our firm has extensive expertise representing investors in complex securities litigation a ...

NEW YORK, May 17, 2024 /PRNewswire/ -- The Gross Law Firm issues the following notice to shareholders of QuidelOrtho Corporation f/k/a Quidel Corporation (NASDAQ: QDEL). Shareholders who purchased shares of QDEL during the class period listed are encouraged to contact the firm regarding possible lead plaintiff appointment. Appointment as lead plaintiff is not required to partake in any recovery. CONTACT US HERE: ALLEGATIONS: The complaint alleges that during the class period, Defendants issued materially fa ...

Financial Data and Key Metrics Changes - First quarter 2024 revenue was $711 million, down from $846 million in the prior year, primarily due to COVID-19 related declines [117] - Excluding COVID-19 revenue, total revenue grew by 6% in constant currency, with a 10% growth when excluding a one-time $21 million third-party collaboration settlement from the previous year [117] - Adjusted EBITDA was $132 million compared to $245 million in the prior year, with an adjusted EBITDA margin of 19% versus 29% [51] - The company recorded a noncash goodwill impairment charge of $1.7 billion for the North America reporting unit due to a decrease in estimated fair value [19] Business Line Data and Key Metrics Changes - First quarter 2024 respiratory revenue was $137 million, including approximately $50 million in COVID-19 revenue, with a 48% year-over-year decrease primarily due to lower COVID-19 revenue [18][106] - Non-respiratory revenue was flat at $574 million, but grew 4% when excluding the one-time collaboration settlement [18] - Point-of-Care business grew approximately 38% year-over-year, driven by strong sales of Sofia tests [31] - Molecular Diagnostics revenue grew approximately 15%, albeit from a low base [31] Market Data and Key Metrics Changes - Revenue growth in North America was 5%, EMEA grew 6%, China grew 12%, and the Rest of the World grew 6% in constant currency, excluding COVID-19 revenue [50] - The company expects COVID-19 revenue for the full year 2024 to be approximately $150 million, down from a prior expectation of $225 million [52] Company Strategy and Development Direction - The company is focused on improving profitability and cash flow while reducing debt levels, with a target of $100 million in annualized savings from headcount reductions [112][117] - The new CEO emphasized the importance of customer satisfaction and patient care, as well as the need for a competitive product offering in the market [116][34] - The company is working on producing a competitive respiratory panel for the U.S. market and expanding its test menu [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in forecasting respiratory and flu sales, implementing a new methodology to improve accuracy [2][43] - The company plans to resume guidance later in 2024 after assessing the business under new leadership [108][56] - Management expects Q2 to be seasonally low for revenue and margins, with improvements anticipated in the second half of 2024 [10][65] Other Important Information - The company amended its credit agreement to increase the maximum consolidated leverage ratio, providing a cushion for financial flexibility [37][119] - The effective tax rate for Q1 2024 was 23.5%, consistent with the prior year [19] Q&A Session All Questions and Answers Question: How involved were you in the forecasting of respiratory and flu sales? - Management acknowledged that they overcalled COVID and flu revenue in Q4 2023 and have implemented a new forecasting methodology [2] Question: What is the trajectory on the leverage piece as we work through the year? - The leverage ratio is expected to creep up slightly in Q2 but will start to come down in Q3 and Q4, with an expected year-end ratio of around 3.5 times [10] Question: What are your views on the competitive landscape for Savanna? - The new CEO expressed confidence in the competitive product offering and emphasized the need to get the menu of tests to market quickly [34][81] Question: Can you discuss customer conversations around Sofia ahead of the next respiratory season? - Management indicated that they are actively engaging with customers regarding contract renewals and leveraging the installed base of Sofia tests [95] Question: What are the expectations for gross margins throughout the year? - Management expects Q2 to be the lowest quarter for gross margins, with improvements anticipated in Q3 and Q4 due to seasonally higher revenues [65][69]

PART I—FINANCIAL INFORMATION [ITEM 1. Financial Statements (unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited consolidated financial statements of QuidelOrtho Corporation, including balance sheets, statements of (loss) income, comprehensive (loss) income, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific account details for the three months ended March 31, 2024, and comparative periods [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202024%20and%20December%2031%2C%202023) This section presents the company's financial position, showing a significant decrease in total assets primarily due to a goodwill impairment charge Consolidated Balance Sheet Highlights (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Total assets | $6,703.3 | $8,563.1 | | Total liabilities | $3,395.6 | $3,557.2 | | Total stockholders' equity | $3,307.7 | $5,005.9 | - Total assets decreased by **$1,859.8 million**, primarily due to a significant goodwill impairment charge[11](index=11&type=chunk)[57](index=57&type=chunk)[60](index=60&type=chunk) [Consolidated Statements of (Loss) Income](index=5&type=section&id=Consolidated%20Statements%20of%20%28Loss%29%20Income%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%20April%202%2C%202023) This section details the company's financial performance, reporting a substantial net loss driven by a goodwill impairment charge Consolidated Statements of (Loss) Income Highlights (In millions, except per share data) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Total revenues | $711.0 | $846.1 | | Operating (loss) income | $(1,758.0) | $99.6 | | Net (loss) income | $(1,706.0) | $48.8 | | Basic (loss) earnings per share | $(25.50) | $0.73 | | Diluted (loss) earnings per share | $(25.50) | $0.73 | - The company reported a significant net loss of **$1,706.0 million** for Q1 2024, primarily driven by a **$1,743.9 million** goodwill impairment charge[14](index=14&type=chunk)[60](index=60&type=chunk) [Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%20April%202%2C%202023) This section outlines the company's comprehensive loss, including net loss and other comprehensive income adjustments Consolidated Statements of Comprehensive (Loss) Income Highlights (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Net (loss) income | $(1,706.0) | $48.8 | | Total change in unrealized gains (losses) from cash flow hedges, net of tax | $24.6 | $(22.6) | | Comprehensive (loss) income | $(1,702.2) | $57.1 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%20April%202%2C%202023) This section details changes in stockholders' equity, reflecting the impact of the net loss on retained earnings Consolidated Statements of Stockholders' Equity Highlights (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Total stockholders' equity | $3,307.7 | $5,005.9 | | Retained earnings | $481.8 | $2,187.8 | | Net loss impact on retained earnings | $(1,706.0) | N/A | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%20April%202%2C%202023) This section summarizes cash inflows and outflows, showing a shift from cash generation to cash usage in operating activities Consolidated Statements of Cash Flows Highlights (In millions) | Activity | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Net cash (used for) provided by operating activities | $(0.7) | $188.9 | | Net cash used for investing activities | $(20.2) | $(68.9) | | Net cash used for financing activities | $(18.5) | $(59.6) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(40.5) | $61.0 | | Cash, cash equivalents and restricted cash at end of period | $79.0 | $354.9 | - Operating activities shifted from providing **$188.9 million** in cash in Q1 2023 to using **$0.7 million** in Q1 2024, despite a large non-cash goodwill impairment charge[23](index=23&type=chunk)[134](index=134&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited financial statements [Note 1. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the preparation basis for interim financial statements and key accounting policies - The unaudited Consolidated Financial Statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[26](index=26&type=chunk) - Operating results for any quarter are historically seasonal and not necessarily indicative of full-year results[27](index=27&type=chunk) - No accounting pronouncements issued or adopted during Q1 2024 are expected to have a material impact[30](index=30&type=chunk) [Note 2. Computation of Earnings Per Share](index=9&type=section&id=Note%202.%20Computation%20of%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share, including the treatment of potential dilutive shares Weighted-Average Shares Outstanding (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Basic weighted-average shares | 66.9 | 66.6 | | Dilutive potential shares | — | 0.5 | | Diluted weighted-average shares | 66.9 | 67.1 | - All potential shares from stock options and RSUs were excluded from dilutive EPS calculations for Q1 2024 because their effect would have been anti-dilutive[32](index=32&type=chunk) [Note 3. Revenue](index=10&type=section&id=Note%203.%20Revenue) This note provides a breakdown of contract balances and total revenues by business unit, highlighting changes in respiratory product sales Contract Balances (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Contract assets | $41.9 | $46.2 | | Current deferred revenue | $33.9 | $36.8 | | Long-term deferred revenue | $14.2 | $13.9 | Total Revenues by Business Unit (In millions) | Business Unit | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Labs | $356.9 | $370.7 | | Transfusion Medicine | $160.3 | $155.9 | | Point of Care | $186.6 | $308.1 | | Molecular Diagnostics | $7.2 | $11.4 | | **Total revenues** | **$711.0** | **$846.1** | - Revenue from respiratory products accounted for **19% of total revenues** in Q1 2024, down from **31%** in Q1 2023[39](index=39&type=chunk) [Note 4. Segment and Geographic Information](index=11&type=section&id=Note%204.%20Segment%20and%20Geographic%20Information) This note presents financial data segmented by geographic region and business unit, including Adjusted EBITDA - The company operates in three reportable segments: North America, EMEA, and China, with Latin America and JPAC included in 'Other'[40](index=40&type=chunk)[41](index=41&type=chunk) Total Revenues by Reportable Segment (In millions) | Segment | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | North America | $433.9 | $582.8 | | EMEA | $84.8 | $81.3 | | China | $76.1 | $70.6 | | Other | $116.2 | $111.4 | | **Total revenues** | **$711.0** | **$846.1** | Adjusted EBITDA by Segment (In millions) | Segment | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | North America | $218.8 | $278.4 | | EMEA | $12.8 | $7.2 | | China | $24.7 | $28.5 | | Other | $32.0 | $21.8 | | **Total segment Adjusted EBITDA** | **$288.3** | **$335.9** | [Note 5. Income Taxes](index=12&type=section&id=Note%205.%20Income%20Taxes) This note details income tax information, including the effective tax rate and the impact of non-deductible goodwill impairment charges Income Tax Information (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | (Loss) income before income taxes | $(1,798.9) | $60.0 | | (Benefit from) provision for income taxes | $(92.9) | $11.2 | | Effective tax rate | 5.2% | 18.7% | - The effective tax rate for Q1 2024 was **5.2% (a benefit)**, primarily due to goodwill impairment charges that are nondeductible for tax purposes[46](index=46&type=chunk) - Unrecognized tax benefits (excluding interest/penalties) were **$28.8 million** as of March 31, 2024, with **$21.6 million** potentially affecting future effective tax rates[47](index=47&type=chunk) [Note 6. Balance Sheet Account Details](index=13&type=section&id=Note%206.%20Balance%20Sheet%20Account%20Details) This note provides specific details for selected balance sheet accounts, including cash, marketable securities, and inventories Selected Balance Sheet Account Details (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $78.5 | $118.9 | | Marketable securities | $— | $55.8 | | Accounts receivable, net | $271.7 | $303.3 | | Total inventories | $618.3 | $623.1 | | Total prepaid expenses and other current assets | $279.1 | $262.1 | | Total other current liabilities | $250.7 | $303.3 | - The company had no marketable securities outstanding as of March 31, 2024, compared to **$55.8 million** at December 31, 2023[51](index=51&type=chunk) [Note 7. Goodwill and Intangible Assets, Net](index=14&type=section&id=Note%207.%20Goodwill%20and%20Intangible%20Assets%2C%20Net) This note explains the goodwill balance and the significant impairment charge recorded for the North America reporting unit Goodwill Balance (In millions) | Segment | December 31, 2023 | Impairment Charge | March 31, 2024 | | :-------------------------------- | :---------------- | :---------------- | :------------- | | North America | $1,743.9 | $(1,743.9) | $— | | EMEA | $582.4 | — | $574.3 | | China | $85.7 | — | $84.7 | | Other | $80.0 | — | $75.8 | | **Total** | **$2,492.0** | **$(1,743.9)** | **$734.8** | - A non-cash goodwill impairment charge of **$1.7 billion** was recorded for the North America reporting unit in Q1 2024, representing a full impairment[57](index=57&type=chunk)[60](index=60&type=chunk) - Triggering events for the impairment assessment included a sustained decline in stock price and market capitalization, a faster-than-expected decline in COVID-19 and flu markets, and a delay in Savanna commercialization[59](index=59&type=chunk) [Note 8. Borrowings](index=16&type=section&id=Note%208.%20Borrowings) This note details the company's debt structure, including term loans and revolving credit facilities, and related interest expenses Components of Borrowings (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Term Loan | $2,368.6 | $2,420.2 | | Revolving Credit Facility | $40.0 | $— | | Total borrowings | $2,402.1 | $2,414.6 | | Long-term borrowings | $2,241.0 | $2,274.8 | - The company was in compliance with financial covenants under its Credit Agreement as of March 31, 2024[68](index=68&type=chunk) Interest Expense, Net (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Term Loan | $44.5 | $40.9 | | Revolving Credit Facility | $1.8 | $0.5 | | Derivative instruments and other | $(7.2) | $(4.5) | | **Interest expense, net** | **$39.0** | **$36.7** | [Note 9. Stock-based Compensation](index=17&type=section&id=Note%209.%20Stock-based%20Compensation) This note outlines the stock-based compensation expense allocated across various operating categories Stock-based Compensation Expense (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Cost of sales | $1.2 | $1.0 | | Selling, marketing and administrative | $5.1 | $7.2 | | Research and development | $1.0 | $1.3 | | Acquisition and integration costs | $1.8 | $4.5 | | **Total stock-based compensation expense** | **$9.1** | **$14.0** | [Note 10. Commitments and Contingencies](index=17&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) This note discusses legal proceedings, including class action lawsuits, and the company's assessment of potential losses - Two putative class action lawsuits (Bristol County Complaint and Whitfield Complaint) were filed in April 2024 against the company and executives[72](index=72&type=chunk)[73](index=73&type=chunk) - The lawsuits assert claims related to statements regarding sales of COVID-19 diagnostic tests and the 510(k) submission for the Savanna RVP4 assay[72](index=72&type=chunk)[73](index=73&type=chunk) - The company believes the claims are without merit and cannot estimate a possible loss or range of loss at this time[74](index=74&type=chunk) [Note 11. Fair Value Measurements](index=18&type=section&id=Note%2011.%20Fair%20Value%20Measurements) This note provides fair value measurements for assets and liabilities, including marketable securities and derivative instruments Fair Value of Assets and Liabilities (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Marketable securities | $— | $55.8 | | Derivative assets | $29.5 | $6.9 | | Derivative liabilities | $9.5 | $27.5 | | Contingent consideration | $0.1 | $0.1 | - The estimated fair value of the Term Loan was **$2,356.8 million** at March 31, 2024, compared to its carrying amount of **$2,368.6 million**[79](index=79&type=chunk) [Note 12. Derivative Instruments and Hedging Activities](index=18&type=section&id=Note%2012.%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes the company's use of derivative instruments for interest rate and foreign currency risk management - The company uses interest rate swaps to hedge variable rate debt and foreign currency forward contracts to manage currency risk exposures[82](index=82&type=chunk)[85](index=85&type=chunk) Notional Amounts of Derivative Instruments (In millions) | Instrument | Notional Amount (March 31, 2024) | | :-------------------------------- | :------------------------------- | | Interest rate swaps (total) | $1,800.0 | | Foreign currency forward contracts (Cash Flow Hedge) | $331.4 | | Foreign currency forward contracts (Non-designated) | $726.6 | - Pre-tax unrealized gains of **$20.5 million** from interest rate derivatives are expected to be reclassified from OCI to earnings in the next 12 months[83](index=83&type=chunk) [Note 13. Accumulated Other Comprehensive Loss](index=21&type=section&id=Note%2013.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the changes in accumulated other comprehensive loss, including cash flow hedges and foreign currency translation adjustments Changes in Accumulated Other Comprehensive Loss (AOCI) (In millions) | Component | Balance at Dec 31, 2023 | Net Change (Q1 2024) | Balance at Mar 31, 2024 | | :-------------------------------- | :---------------------- | :------------------- | :-------------------- | | Pension and Other Post Employment Benefits | $(1.3) | $— | $(1.3) | | Cash Flow Hedges | $(9.8) | $24.6 | $14.8 | | Unrealized Foreign Currency Translation Adjustments | $(18.9) | $(20.8) | $(39.7) | | **Total AOCI** | **$(30.0)** | **$3.8** | **$(26.2)** | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2024. It covers revenue performance by business unit and segment, operating expenses, liquidity, capital resources, and critical accounting estimates, highlighting the impact of a significant goodwill impairment charge and changes in respiratory product demand [Future Uncertainties and Forward-Looking Statements](index=22&type=section&id=Future%20Uncertainties%20and%20Forward-Looking%20Statements) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements subject to significant known and unknown risks and uncertainties, including supply chain disruptions, integration challenges, and macroeconomic factors[96](index=96&type=chunk) - Investors should not rely on forward-looking statements as predictions of future events due to inherent assumptions and speculative nature[96](index=96&type=chunk) [Information Available on Our Website](index=22&type=section&id=Information%20Available%20on%20Our%20Website) This section informs readers about the availability of company reports on its official website - Periodic and current reports, including amendments, are available free of charge on the company's website (www.quidelortho.com) and investor relations site (https://ir.quidelortho.com/)[97](index=97&type=chunk) [Overview](index=22&type=section&id=Overview) This section provides a high-level summary of QuidelOrtho's business vision and key financial performance for the quarter - QuidelOrtho's vision is to advance diagnostics for a healthier future, leveraging expertise in immunoassay, molecular testing, clinical chemistry, and transfusion medicine across over 130 countries[98](index=98&type=chunk) - Total revenues decreased by **16% to $711.0 million** for Q1 2024, primarily due to variability in U.S. respiratory products, with currency exchange rates having an unfavorable 100 basis points impact[100](index=100&type=chunk) - Revenues from respiratory products accounted for approximately **19% of total revenues** in Q1 2024, down from **31%** in Q1 2023[100](index=100&type=chunk) [Planned Wind-Down of U.S. Donor Screening Portfolio](index=22&type=section&id=Planned%20Wind-Down%20of%20U.S.%20Donor%20Screening%20Portfolio) This section details the company's strategic decision to discontinue its U.S. donor screening portfolio due to its lower profitability - In February 2024, the company initiated a plan to wind down its U.S. donor screening portfolio (VIP platform and microplate assays) due to their lower growth and margin profile[101](index=101&type=chunk) - This wind-down will not affect donor screening portfolios outside of the U.S., and the company will continue to support existing customers and honor contractual commitments[102](index=102&type=chunk) [Outlook](index=23&type=section&id=Outlook) This section discusses the company's future financial performance expectations, emphasizing R&D investments and strategic opportunities - Financial performance is highly uncertain, dependent on future developments of respiratory diseases (flu, strep, RSV, COVID-19), supply chain, and pricing pressures[103](index=103&type=chunk)[104](index=104&type=chunk) - The company plans to maintain emphasis on R&D investments for long-term growth, including next-generation platforms and assays, and evaluate strategic opportunities[105](index=105&type=chunk) [Seasonality](index=23&type=section&id=Seasonality) This section explains how seasonal demands for respiratory products impact the company's revenues - Revenues from respiratory products are significantly affected by the seasonal demands of cold, flu, and RSV seasons, typically more prevalent during the fall and winter[107](index=107&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial results, including revenues, cost of sales, and operating expenses [Revenues](index=23&type=section&id=Revenues) This subsection provides a detailed breakdown of total revenues by business unit and the factors influencing changes Total Revenues by Business Unit (In millions) | Business Unit | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | % Change | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------- | | Labs | $356.9 | $370.7 | (4)% | | Transfusion Medicine | $160.3 | $155.9 | 3 % | | Point of Care | $186.6 | $308.1 | (39)% | | Molecular Diagnostics | $7.2 | $11.4 | (37)% | | **Total revenues** | **$711.0** | **$846.1** | **(16)%** | - Point of Care revenue declined by **$121.5 million**, primarily due to a **$156.4 million** decrease in QuickVue SARS Antigen sales (impacted by a prior year government award), partially offset by a **$35.2 million** increase in Sofia SARS Antigen sales[108](index=108&type=chunk) - Labs revenue decreased by **$13.8 million**, mainly due to a **$20.7 million** settlement award from a third party in the prior year period[108](index=108&type=chunk) [Cost of Sales, Excluding Amortization of Intangible Assets](index=24&type=section&id=Cost%20of%20Sales%2C%20Excluding%20Amortization%20of%20Intangible%20Assets) This subsection analyzes the cost of sales and its percentage of total revenues Cost of Sales (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Cost of sales, excluding amortization of intangibles | $378.9 | $397.5 | | As % of Total revenues | 53.3% | 47.0% | - The decrease in cost of sales was driven by a prior year COVID-19 government award and corresponding inventory release of **$39 million**, partially offset by increased Sofia SARS Antigen sales[109](index=109&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) This subsection details the various operating expenses, including the significant goodwill impairment charge Operating Expenses (In millions) | Expense Category | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Selling, marketing and administrative | $204.7 | $202.4 | | Research and development | $59.2 | $62.3 | | Amortization of intangible assets | $51.7 | $50.8 | | Acquisition and integration costs | $22.6 | $29.7 | | Goodwill impairment charge | $1,743.9 | $— | | Other operating expenses | $8.0 | $3.8 | - A non-cash goodwill impairment charge of **$1.7 billion** was recognized for the North America reporting unit in Q1 2024[115](index=115&type=chunk) - Acquisition and integration costs decreased by **$7.1 million**, primarily due to lower consulting costs and compensation-related charges[114](index=114&type=chunk) [Non-operating Expenses](index=25&type=section&id=Non-operating%20Expenses) This subsection covers interest expense and other non-operating expenses Non-operating Expenses (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Interest expense, net | $39.0 | $36.7 | | Other expense, net | $1.9 | $2.9 | [Income Taxes](index=25&type=section&id=Income%20Taxes) This subsection explains the company's income tax provision and effective tax rate Income Tax Information (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | (Loss) income before income taxes | $(1,798.9) | $60.0 | | (Benefit from) provision for income taxes | $(92.9) | $11.2 | | Effective tax rate | 5.2% | 18.7% | - The Q1 2024 effective tax rate of **5.2% (benefit)** differed from the U.S. federal statutory rate primarily due to non-deductible goodwill impairment charges[119](index=119&type=chunk) [Segment Results](index=25&type=section&id=Segment%20Results) This section provides a detailed analysis of financial performance across the company's geographic segments [North America](index=25&type=section&id=North%20America) This subsection details the revenue and Adjusted EBITDA performance for the North America segment North America Segment Performance (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | % Change | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------- | | Total revenues | $433.9 | $582.8 | (26)% | | Adjusted EBITDA | $218.8 | $278.4 | (21)% | - Revenue and Adjusted EBITDA decreased primarily due to a COVID-19 government award in the prior year period, partially offset by increased Sofia SARS Antigen assay revenues[120](index=120&type=chunk)[121](index=121&type=chunk) [EMEA](index=26&type=section&id=EMEA) This subsection details the revenue and Adjusted EBITDA performance for the EMEA segment EMEA Segment Performance (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | % Change | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------- | | Total revenues | $84.8 | $81.3 | 4 % | | Adjusted EBITDA | $12.8 | $7.2 | 78 % | - Revenue and Adjusted EBITDA increased, driven by growth in Labs and Transfusion Medicine revenues[122](index=122&type=chunk)[123](index=123&type=chunk) [China](index=26&type=section&id=China) This subsection details the revenue and Adjusted EBITDA performance for the China segment China Segment Performance (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | % Change | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------- | | Total revenues | $76.1 | $70.6 | 8 % | | Adjusted EBITDA | $24.7 | $28.5 | (13)% | - Revenue increased due to Labs, but Adjusted EBITDA decreased primarily due to the impact from changes in product mix[124](index=124&type=chunk)[125](index=125&type=chunk) [Other](index=26&type=section&id=Other) This subsection details the revenue and Adjusted EBITDA performance for the "Other" geographic segment Other Segment Performance (In millions) | Item | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | % Change | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------- | | Total revenues | $116.2 | $111.4 | 4 % | | Adjusted EBITDA | $32.0 | $21.8 | 47 % | - Revenue and Adjusted EBITDA increased, primarily driven by Labs revenues and product mix[126](index=126&type=chunk)[127](index=127&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations and fund operations Liquidity Sources (In millions) | Item | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $78.5 | $118.9 | | Marketable securities, current | $— | $48.4 | | Marketable securities, non-current | $— | $7.4 | | Total cash, cash equivalents and marketable securities | $78.5 | $174.7 | | Amount available to borrow under the Revolving Credit Facility | $747.0 | $787.1 | | Working capital | $432.6 | $476.7 | [Debt Capitalization](index=27&type=section&id=Debt%20Capitalization) This subsection details the company's debt structure and compliance with financial covenants - The Credit Agreement includes a **$2,750.0 million** Term Loan and an **$800.0 million** Revolving Credit Facility, with **$747.0 million** available under the Revolving Credit Facility as of March 31, 2024[130](index=130&type=chunk) - An amendment to the Credit Agreement on April 25, 2024, adjusted the maximum Consolidated Leverage Ratio for future fiscal quarters[131](index=131&type=chunk) - The company was in compliance with all financial covenants as of March 31, 2024[131](index=131&type=chunk) [Capital Expenditures](index=27&type=section&id=Capital%20Expenditures) This subsection outlines the company's investments in property, plant, and equipment - Capital expenditures, including investments, totaled **$66.1 million** for Q1 2024, primarily for manufacturing capacity expansion and facility improvements[132](index=132&type=chunk)[141](index=141&type=chunk) - The company is increasing investment in a reagent rental model, transferring **$37.8 million** of instrument inventories to property, plant, and equipment in Q1 2024, to grow its installed base and recurring revenue[142](index=142&type=chunk) [Cash Flow Summary](index=27&type=section&id=Cash%20Flow%20Summary) This subsection summarizes the company's cash flows from operating, investing, and financing activities Cash Flow Summary (In millions) | Activity | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Net cash (used for) provided by operating activities | $(0.7) | $188.9 | | Net cash used for investing activities | $(20.2) | $(68.9) | | Net cash used for financing activities | $(18.5) | $(59.6) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(40.5) | $61.0 | - Cash used for operating activities in Q1 2024 was **$0.7 million**, reflecting a net loss of **$1,706.0 million** offset by **$1,791.6 million** in non-cash adjustments (primarily goodwill impairment)[134](index=134&type=chunk) - Cash used for investing activities decreased to **$20.2 million** in Q1 2024 from **$68.9 million** in Q1 2023, mainly due to marketable securities sales[135](index=135&type=chunk)[137](index=137&type=chunk) [Liquidity Outlook](index=28&type=section&id=Liquidity%20Outlook) This subsection provides management's perspective on the company's future liquidity and capital needs - The company anticipates that current cash, operating cash flows, and the Revolving Credit Facility will be sufficient to fund near-term capital and operating needs for at least the next 12 months[139](index=139&type=chunk) - Long-term capital requirements depend on factors such as Ortho business integration, revenue growth from new technologies, outstanding debt, and strategic collaborations or acquisitions[143](index=143&type=chunk)[144](index=144&type=chunk) [Recent Accounting Pronouncements](index=29&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of new accounting standards on the company's financial statements - No accounting pronouncements issued or adopted during Q1 2024 are expected to have a material impact on the company's financial statements[146](index=146&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates, particularly the goodwill impairment assessment - A key critical accounting estimate is goodwill impairment, which led to a **$1.7 billion** non-cash charge for the North America reporting unit in Q1 2024[148](index=148&type=chunk)[150](index=150&type=chunk) - Triggering events for the impairment included a sustained decline in stock price, faster-than-expected decline in COVID-19 and flu markets, and a delay in Savanna commercialization[149](index=149&type=chunk) - The goodwill impairment assessment used income (discounted cash flow) and market (guideline public company) approaches, relying on assumptions for revenue growth, EBITDA margins, discount rates, and market multiples[152](index=152&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there has been no material change in the company's exposure to market risk compared to what was previously disclosed in its Annual Report - No material change in market risk exposure from that described in the Annual Report[154](index=154&type=chunk) [ITEM 4. Controls and Procedures](index=30&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms that the company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of March 31, 2024. It also states there were no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of March 31, 2024[155](index=155&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2024[156](index=156&type=chunk) PART II—OTHER INFORMATION [ITEM 1. Legal Proceedings](index=31&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 10 of the financial statements for detailed information regarding legal proceedings and commitments - Information on legal proceedings is incorporated by reference from Note 10. Commitments and Contingencies in Part I—Financial Information[158](index=158&type=chunk) [ITEM 1A. Risk Factors](index=31&type=section&id=ITEM%201A.%20Risk%20Factors) This section states that there have been no material changes to the company's risk factors since its last Annual Report - No material change in risk factors as previously disclosed in the Annual Report[159](index=159&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase program, noting that no shares were repurchased during the first quarter of 2024, with a significant amount remaining authorized - The company has a Stock Repurchase Program authorized for up to **$300.0 million** through August 17, 2024[160](index=160&type=chunk) - As of March 31, 2024, approximately **$218.4 million** remained available under the program[160](index=160&type=chunk) - No shares of common stock were repurchased during the fiscal quarter ended March 31, 2024[160](index=160&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=31&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred[161](index=161&type=chunk) [ITEM 4. Mine Safety Disclosures](index=31&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[162](index=162&type=chunk) [ITEM 5. Other Information](index=31&type=section&id=ITEM%205.%20Other%20Information) This section confirms that there were no changes in Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements by directors or officers during the last fiscal quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[164](index=164&type=chunk) [ITEM 6. Exhibits](index=32&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, amendments to credit agreements, employment letters, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Amendment No. 2 to Credit Agreement, Employment Offer Letter, and certifications by Principal Executive and Financial Officers[165](index=165&type=chunk) [Summary of Abbreviated Terms](index=33&type=section&id=Summary%20of%20Abbreviated%20Terms) This section provides a comprehensive glossary of key financial and operational terms used throughout the report - Provides a glossary of abbreviated terms used throughout the Quarterly Report, including definitions for key financial and operational terms[169](index=169&type=chunk) [Signatures](index=34&type=section&id=Signatures) This section formally certifies the report through the signatures of the company's principal executive and financial officers - The report is duly signed by Brian J. Blaser, President and Chief Executive Officer, and Joseph M. Busky, Chief Financial Officer, on May 8, 2024[172](index=172&type=chunk)