QuidelOrtho (US:QDEL)2025-11-05 23:02Revenue Performance - Total revenues for the nine months ended September 28, 2025, decreased by 3% to $2,006.6 million compared to $2,075.1 million for the same period in the prior year [110]. - Revenue from respiratory products accounted for 14% of total revenues for the nine months ended September 28, 2025, down from 17% in the prior year [110]. - Labs revenue increased by 5% for the nine months ended September 28, 2025, primarily due to growth in reagents, consumables, and services [125]. - Donor Screening revenue decreased by 57% for the nine months ended September 28, 2025, primarily due to the wind-down of the U.S. donor screening business [125]. - Point of Care revenue decreased by 23% for the nine months ended September 28, 2025, driven by a decline in sales of QuickVue and Sofia SARS Antigen assays [125]. - Total revenues for North America were $1,098.8 million for the nine months ended September 28, 2025, down 10% from $1,220.2 million for the same period in 2024 [148]. - Total revenues for EMEA increased by 9% to $91.8 million for the three months ended September 28, 2025, compared to $84.0 million for the same period in 2024 [151]. - Total revenues for the nine months ended September 28, 2025, were $268.0 million, a 7.4% increase from $249.9 million for the same period in 2024, driven by growth in Immunohematology and Point of Care revenues [152]. - In China, total revenues for the three months ended September 28, 2025, were $84.6 million, a 5.2% increase from $80.4 million in the same period of 2024, driven by a 7% increase in Labs revenues [154]. - Total revenues for the nine months ended September 28, 2025, in China were $243.0 million, a 2% increase from $238.1 million in 2024, supported by a 6% increase in Labs revenues [156]. - Total revenues for Other segments for the three months ended September 28, 2025, were $142.1 million, a 12.3% increase from $126.5 million in the same period of 2024 [157]. Cost and Expenses - Cost of sales, excluding amortization of intangible assets, decreased to $364.3 million, or 52.1% of total revenues, for the three months ended September 28, 2025 [126]. - Cost of sales decreased to $1,052.8 million, or 52.5% of total revenues, for the nine months ended September 28, 2025, down from $1,114.7 million, or 53.7% of total revenues, for the same period in 2024 [127]. - Selling, marketing, and administrative expenses for the nine months ended September 28, 2025, decreased by $27.4 million, or 4.7%, to $551.9 million from $579.3 million for the same period in 2024 [130]. - Research and development expenses for the nine months ended September 28, 2025, decreased by $31.0 million, or 18.1%, to $140.4 million from $171.4 million for the same period in 2024 [132]. Impairment and Charges - Goodwill impairment charge recognized was $700.7 million for the three months ended September 28, 2025, compared to $1.7 billion for the nine months ended September 29, 2024 [135]. - In Q3 2025, the company recorded a non-cash goodwill impairment charge of $614.8 million for the EMEA unit, $68.1 million for China, and $17.8 million for Latin America, representing a full impairment of goodwill allocated to these units [182]. - The quantitative goodwill impairment assessment utilized a discounted cash flow method and market approach, incorporating significant assumptions such as future revenue growth rates and EBITDA margins [183]. - The projected future revenue growth rates and EBITDA margins are based on historical experience and internal annual operating plans, extrapolated over the forecast period [183]. - Discount rates for the impairment assessment were determined using a weighted average cost of capital adjusted for specific risk factors related to the reporting units [183]. - Market multiples were derived from comparable publicly traded companies using the guideline public company method [183]. - The company believes the assumptions used in the goodwill impairment assessment are reasonable and consistent with those used by other market participants [184]. Financial Position and Outlook - The Optimization Plan is expected to incur approximately $100 million in pre-tax charges through 2027, aiming for net cost savings of about $50 million [112]. - The planned wind-down of the U.S. donor screening portfolio is expected to be substantially complete by the first half of 2026 [111]. - The company expects overall demand for non-respiratory and respiratory products to continue to fluctuate due to various market factors [118]. - The company plans to continue evaluating strategic opportunities to expand product lines and improve operational efficiencies [119]. - Interest expense, net was $126.6 million for the nine months ended September 28, 2025, compared to $122.9 million for the same period in 2024, reflecting a 3% increase [139]. - Income tax benefit for the three months ended September 28, 2025, was $23.9 million, with an effective tax rate of 3.2%, compared to an income tax benefit of $8.9 million and an effective tax rate of 30.9% for the same period in 2024 [142]. - Adjusted EBITDA for North America was $604.8 million for the nine months ended September 28, 2025, a decrease of 10% from $670.2 million for the same period in 2024 [150]. - Adjusted EBITDA for EMEA increased by 89% to $24.4 million for the three months ended September 28, 2025, compared to $12.9 million for the same period in 2024 [151]. - Adjusted EBITDA for the nine months ended September 28, 2025, was $59.2 million, up 61.5% from $36.6 million in the prior year, primarily due to increased revenues and lower operating expenses [153]. - Adjusted EBITDA for China remained stable at $36.8 million for the three months ended September 28, 2025, compared to the same period in 2024 [155]. - Adjusted EBITDA for Other segments for the nine months ended September 28, 2025, was $111.7 million, a 14% increase from $97.9 million in the prior year [159]. - As of September 28, 2025, the company had $98.1 million in cash and cash equivalents, a slight decrease from $98.3 million as of December 29, 2024 [160]. - The company entered into a Credit Agreement on August 21, 2025, securing a total of $3.45 billion in loans, including a $1.15 billion Term Loan A and a $1.45 billion Term Loan B [161]. - Capital expenditures for the nine months ended September 28, 2025, were $136.4 million, focused on expanding manufacturing capabilities [166]. - There has been no material change in the company's exposure to market risk as described in the Annual Report [185].