QuidelOrtho (US:QDEL)2023-02-16 02:55Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $866.5 million, a 36% increase year-over-year, with supplemental combined revenue for the full year at $4.1 billion [137] - Adjusted EBITDA for the quarter was $245.1 million, with an adjusted EBITDA margin of 28.3%, which contracted year-over-year [177] - Adjusted earnings per fully diluted share for Q4 was $1.76, compared to $5.12 in the same quarter of 2021 [178] Business Line Data and Key Metrics Changes - Labs unit revenue declined 10% year-over-year, primarily due to lockdowns in China, but would have been up mid-single digits if normalized for those impacts [138] - Transfusion Medicine revenue was flat at 1%, while Point-of-Care revenue surged by 138% and Molecular Diagnostics revenue increased by 45% [138] - Revenue excluding COVID-related revenue for Q4 was $734 million, up 18.6% in constant currency [105] Market Data and Key Metrics Changes - North America revenue grew 38%, while EMEA declined 3%, and China saw a significant decline of 27% [12] - The company expects strong double-digit growth in China, excluding COVID-related revenue, driven by increased demand and new product launches [19][55] - The overall market for Point-of-Care is healthy and expected to deliver strong revenue growth in 2023 [180] Company Strategy and Development Direction - The company is focusing on three key growth drivers: Sofia, Savanna, and VITROS systems, with over 85,000 Sofia instruments installed worldwide [141] - A joint venture with Shanghai Runda Medical aims to develop and manufacture VITROS assays in China, enhancing market responsiveness [122] - The company plans to bucket COVID-19 revenue with other respiratory revenues moving forward, reflecting a transition to an endemic state [152] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a strong 2023, with expectations of a normal respiratory season and a rebound in Labs business [184] - The company anticipates a two-year CAGR for revenue, excluding COVID, in line with a long-term outlook of 6% to 9% [184] - Management noted that the headwinds previously anticipated may not be as significant as originally thought, setting a positive tone for future growth [128] Other Important Information - The company ended the quarter with cash, cash equivalents, and marketable securities of $366 million, and total debt of $2.6 billion [179] - The integration of Quidel and Ortho is ahead of schedule, with over 70% of interim state milestones completed [125] - The company realized approximately $15 million in cost synergies last year and expects to exceed the 2023 target of $30 million [126] Q&A Session Summary Question: What are the expectations for the respiratory business in 2023? - Management expects a reasonable first quarter driven by COVID, with a more typical respiratory season anticipated in Q4 [94][95] Question: Can you provide granularity on the molecular diagnostics forecast for 2023? - Management indicated that Savanna sales in Europe are expected to drive strong growth within the Molecular Diagnostics business [181] Question: How does the company view the impact of government contracts on future revenue? - The company has secured significant government contracts for COVID tests, which are expected to contribute to revenue in the upcoming quarters [174][175]