Strong Revenue Growth Drives Financial Results
Company Raises Fiscal 2021 Guidance Across all Key Metrics
Highlights
- Second quarter revenue increased 26.1% to
$492.5 million , or 22.4% in constant currency - Core revenue grew 26.2% to
$487.5 million for the quarter, or 22.5% in constant currency - Operating Income increased 104.7% to
$31.3 million from$15.3 million last year - GAAP Net Loss was
($20.0) million , or ($0.09 ) per diluted share, while Adjusted Net Income was$39.1 million , or$0.16 per diluted share in the second quarter of 2021 - Second quarter Adjusted EBITDA rose 27.0% year-over-year to
$128.1 million and adjusted free cash flow increased$190.8 million year-over year to$144.1 million , including the benefit of$75.0 million of accounts receivable securitization - Company raised 2021 guidance to 10% to 12% Core revenue growth in constant currency and Adjusted EBITDA growth to 15% to 17%
Second Quarter 2021 Financial Highlights
“We are pleased with the continued momentum across all of our businesses and solid execution by our team that drove another consecutive quarter of double-digit revenue growth, both with and without sales of CoV-2 assays,” said
$ in millions, other than per share amounts | Quarter Ended | Change | ||
As Reported | Constant Currency | |||
Net Revenue | 26.1% | 22.4% | ||
Core Revenue | 26.2% | 22.5% | ||
Gross Profit Margin | 49.6% | 48.0% | 160 bps | - |
Income from Operations | 104.7% | - | ||
EPS (GAAP) | ( | ( | - | |
Adjusted Diluted EPS | - | |||
Adjusted Free Cash Flow | ( | - | ||
Adjusted EBITDA | 27.0% | - |
Changes presented in the table above have been calculated using actual, non-rounded amounts and may not recalculate.
- Core revenue, which excludes contract manufacturing and other licensing revenue, increased to
$487.5 million in the second quarter of 2021, compared with$386.2 million in the similar period last year, or a 22.5% increase in constant currency terms - Net loss for the second quarter was
($20.0) million , or ($0.09 ) per share, compared with net loss of($41.3) million , or ($0.28 ) per share, in the second quarter of 2020 - Adjusted free cash flow for the second quarter was
$144.1 million , compared with($46.7) million in the prior year period - Adjusted EBITDA for the second quarter was
$128.1 million , an increase of 27.0% as compared to$100.9 million in the prior year period
Results by Segment
“We are pleased with our favorable performance across all of our geographies during the quarter, most notably with the recovery in
Revenues by segment were as follows:
$ millions | Quarter Ended | Change | ||||
As Reported | Constant Currency | |||||
22.9% | 21.3% | |||||
EMEA | 33.0% | 24.3% | ||||
35.0% | 23.2% | |||||
Other | 26.7% | 24.7% | ||||
Total Revenue | $492.5 | $390.5 | 26.1% | 22.4% |
Changes presented in the table above have been calculated using actual, non-rounded amounts and may not recalculate.
Balance Sheet and Liquidity
As of
During the second quarter:
- The Company completed a securitization of its
$75.0 million accounts receivable facility - We reduced our leverage ratio, as defined by net debt to trailing-twelve-month EBITDA, to 4.0x
Fiscal Year 2021 Outlook
The Company today raised financial guidance for the fiscal year 2021 as follows:
Fiscal Year 2021 | Prior Guidance FY 2021 | |
Core Revenue | ||
Constant Currency Core Revenue Growth | 10% – 12% | 9% – 11% |
Adjusted EBITDA | ||
Adjusted EBITDA Growth | 15% - 17% | 14% - 16.5% |
Adjusted Diluted EPS |
“The strong momentum and recovery seen across our core business, paired with the ongoing optimization of our operations, allows us to raise our guidance across all metrics included in our fiscal 2021 outlook, said
Conference Call Information
Interested parties can access the call and accompanying presentation on the “Investors” portion of the Company’s website at https://ir.orthoclinicaldiagnostics.com. Presentation materials will also be posted to the “Investors” portion of the website at the time of the call. Those unable to access the webcast may join the call via phone by dialing (888) 895-5271 (domestic) or (847) 619-6547 (international) and entering Conference ID number 50202649.
A replay of the conference call will be available a few hours after the event on the investor relations section of the Company’s website, under the events section.
About
More than 800,000 patients across the world are impacted by Ortho’s tests each day. Because Every Test Is A Life™, Ortho provides hospitals, hospital networks, clinical laboratories and blood banks around the world with innovative technology and tools to ensure test results are fast, accurate, and reliable. Ortho's customized solutions enhance clinical outcomes, improve efficiency, overcome lab staffing challenges and reduce costs.
From launching the first product to determine Rh+ or Rh- blood type, developing the world’s first tests for the detection of antibodies against HIV and hepatitis C, introducing patented dry-slide technology and marketing the first
The Company is powered by Ortho Care™, an award-winning, holistic service and support program that ensures best-in-class technical, field and remote service to laboratories in more than 130 countries and territories around the globe.
For more information, visit Ortho’s website or social media channels: LinkedIn, Twitter, Facebook and YouTube.
Forward Looking Statements
This Press Release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements reflect, among other things, our current expectations and anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will,” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Factors that might materially affect such forward looking statements include: the ongoing global coronavirus (COVID-19) pandemic; increased competition; manufacturing problems or delays or failure to develop and market new or enhanced products or services; adverse developments in global market, economic and political conditions; our ability to obtain additional capital on commercially reasonable terms may be limited or non-existent; our inability to implement our strategies for improving growth or to realize the anticipated benefits of any acquisitions and divestitures, including as a result of difficulties integrating acquired businesses with, or disposing of divested businesses from, our current operations; a need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets; inability to achieve some or all of the operational cost improvements and other benefits that we expect to realize; our ability to operate according to our business strategy should our collaboration partners fail to fulfill their obligations; risk that the insurance we will maintain may not fully cover all potential exposures; product recalls or negative publicity may harm our reputation or market acceptance of our products; decreases in the number of surgical procedures performed, and the resulting decrease in blood demand; fluctuations in our cash flows as a result of our reagent rental model; terrorist acts, conflicts, wars and natural disasters that may materially adversely affect our business, financial condition and results of operations; the outcome of legal proceedings instituted against us and/or others; risks associated with our non-
Non-GAAP Financial Measures
This press release contains financial measures, such as constant-currency growth rate, adjusted EBITDA, adjusted net income, adjusted diluted EPS and adjusted free cash flow, which are considered non-GAAP financial measures under applicable
Investors:
IR@orthoclinicaldiagnostics.com
Media:
media@orthoclinicaldiagnostics.com
Condensed Consolidated Statements of Loss | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per share data) | |||||||||||||||
Fiscal Quarter Ended | Fiscal Six Months Ended | ||||||||||||||
Net revenue | $ | 492.5 | $ | 390.5 | $ | 999.3 | $ | 798.5 | |||||||
Cost of revenue, excluding amortization of intangible assets | 248.1 | 202.9 | 496.3 | 416.1 | |||||||||||
Gross profit | 244.4 | 187.6 | 503.0 | 382.4 | |||||||||||
Selling, marketing and administrative expenses | 138.7 | 109.5 | 270.2 | 226.9 | |||||||||||
Research and development expense | 30.4 | 25.8 | 59.3 | 49.4 | |||||||||||
Amortization of intangible assets | 33.5 | 32.6 | 66.9 | 65.6 | |||||||||||
Other operating expense, net | 10.5 | 4.4 | 17.9 | 13.3 | |||||||||||
Income from operations | 31.3 | 15.3 | 88.8 | 27.2 | |||||||||||
Interest expense, net | 33.0 | 47.5 | 76.4 | 99.7 | |||||||||||
Tax indemnification income, net | (0.2 | ) | (2.4 | ) | (0.4 | ) | (4.9 | ) | |||||||
Other expense, net | 3.4 | 7.7 | 53.4 | 67.0 | |||||||||||
Loss before provision for income taxes | (4.9 | ) | (37.5 | ) | (40.7 | ) | (134.6 | ) | |||||||
Provision for income taxes | 15.1 | 3.8 | 18.4 | 7.9 | |||||||||||
Net loss | $ | (20.0 | ) | $ | (41.3 | ) | $ | (59.1 | ) | $ | (142.5 | ) | |||
Basic and diluted net loss per ordinary share | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.27 | ) | $ | (0.97 | ) | |||
Basic and diluted weighted-average ordinary shares outstanding | 234.6 | 146.4 | 220.4 | 146.3 |
Condensed Consolidated Balance Sheets | |||||||
(Unaudited) | |||||||
(In millions) | |||||||
Cash and cash equivalents | $ | 200.9 | $ | 132.8 | |||
Accounts receivable | 226.4 | 318.7 | |||||
Inventories | 305.0 | 278.7 | |||||
Other current assets | 136.6 | 127.0 | |||||
Property, plant and equipment, net | 799.5 | 832.0 | |||||
578.4 | 580.1 | ||||||
Intangible assets, net | 950.7 | 1,016.7 | |||||
Deferred income taxes | 7.3 | 8.0 | |||||
Other assets | 99.5 | 107.5 | |||||
Total assets | $ | 3,304.2 | $ | 3,401.5 | |||
Accounts payable | $ | 146.4 | $ | 146.2 | |||
Accrued liabilities | 230.6 | 284.7 | |||||
Deferred revenue | 36.6 | 35.5 | |||||
Current portion of borrowings | 65.6 | 160.0 | |||||
Long-term borrowings | 2,229.4 | 3,558.5 | |||||
Employee-related obligations | 39.6 | 39.3 | |||||
Other liabilities | 99.0 | 120.8 | |||||
Deferred income taxes | 81.5 | 67.3 | |||||
Total liabilities | 2,928.7 | 4,412.3 | |||||
Total shareholders’ equity (deficit) | 375.6 | (1,010.8 | ) | ||||
Total liabilities and shareholders’ equity (deficit) | $ | 3,304.2 | $ | 3,401.5 |
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions) | |||||||||||||||
Fiscal Quarter Ended | Fiscal Six Months Ended | ||||||||||||||
Cash provided by (used in) operating activities | $ | 132.7 | $ | (46.0 | ) | $ | 122.8 | $ | (63.5 | ) | |||||
Cash provided by (used in) investing activities | 6.4 | (7.2 | ) | (4.3 | ) | (25.5 | ) | ||||||||
Cash (used in) provided by financing activities | (91.3 | ) | (228.2 | ) | (50.2 | ) | 88.0 | ||||||||
Effect of exchange rate changes on cash | (0.8 | ) | (0.2 | ) | (1.0 | ) | (2.7 | ) | |||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 47.0 | (281.6 | ) | 67.3 | (3.7 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 164.5 | 361.9 | 144.2 | 84.0 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 211.5 | $ | 80.3 | $ | 211.5 | $ | 80.3 | |||||||
Reconciliation to amounts within the consolidated balance sheets: | |||||||||||||||
Cash and cash equivalents | $ | 200.9 | $ | 68.7 | $ | 200.9 | $ | 68.7 | |||||||
Restricted cash included in Other assets | 10.6 | 11.6 | 10.6 | 11.6 | |||||||||||
Cash, cash equivalents and restricted cash | $ | 211.5 | $ | 80.3 | $ | 211.5 | $ | 80.3 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(Unaudited) | |||||||||||||||
Fiscal Quarter Ended | Fiscal Six Months Ended | ||||||||||||||
(Dollars in millions) | |||||||||||||||
Net loss | $ | (20.0 | ) | $ | (41.3 | ) | $ | (59.1 | ) | $ | (142.5 | ) | |||
Interest expense, net | 33.0 | 47.5 | 76.4 | 99.7 | |||||||||||
Provision for income taxes | 15.1 | 3.8 | 18.4 | 7.9 | |||||||||||
Depreciation and amortization | 83.1 | 79.9 | 165.8 | 159.7 | |||||||||||
Stock-based compensation | 11.0 | 2.2 | 14.5 | 3.8 | |||||||||||
Restructuring and severance-related costs (a) | 1.7 | 2.2 | 3.0 | 4.6 | |||||||||||
Tax indemnification income, net | (0.2 | ) | (2.4 | ) | (0.4 | ) | (4.9 | ) | |||||||
Loss on extinguishment of debt | — | 2.6 | 50.3 | 12.6 | |||||||||||
Unrealized foreign currency exchange losses, net (b) | — | 3.0 | — | 52.3 | |||||||||||
Other adjustments (c) | 4.5 | 3.4 | 11.6 | 9.7 | |||||||||||
Adjusted EBITDA | $ | 128.1 | $ | 100.9 | $ | 280.6 | $ | 202.9 | |||||||
Fiscal Quarter Ended | Fiscal Six Months Ended | ||||||||||||||
(Dollars in millions, except per share data) | |||||||||||||||
Net loss | $ | (20.0 | ) | $ | (41.3 | ) | $ | (59.1 | ) | $ | (142.5 | ) | |||
Amortization of intangible assets | 33.5 | 32.6 | 66.9 | 65.6 | |||||||||||
Stock-based compensation | 11.0 | 2.2 | 14.5 | 3.8 | |||||||||||
Restructuring and severance-related costs (a) | 1.7 | 2.2 | 3.0 | 4.6 | |||||||||||
Loss on extinguishment of debt | — | 2.6 | 50.3 | 12.6 | |||||||||||
Unrealized foreign currency exchange losses, net (b) | — | 3.0 | — | 52.3 | |||||||||||
Other adjustments (c) | 4.5 | 3.4 | 11.6 | 9.7 | |||||||||||
Total adjustments | 50.7 | 46.0 | 146.3 | 148.6 | |||||||||||
Tax effect of reconciling items (d) | (1.9 | ) | (1.7 | ) | (3.9 | ) | (5.0 | ) | |||||||
Discrete tax items (e) | 10.3 | — | 10.6 | — | |||||||||||
Adjusted net income | $ | 39.1 | $ | 3.0 | $ | 94.0 | $ | 1.1 | |||||||
Adjusted basic EPS | $ | 0.17 | $ | 0.02 | $ | 0.43 | $ | 0.01 | |||||||
Adjusted diluted EPS | $ | 0.16 | $ | 0.02 | $ | 0.41 | $ | 0.01 | |||||||
Diluted weighted-average ordinary shares outstanding | 243.5 | 147.3 | 228.9 | 147.3 |
(a) Represents restructuring and severance costs related to several discrete initiatives intended to strengthen operational performance and to support building our commercial capabilities.
(b) For fiscal quarter and six months ended
(c) Represents miscellaneous other adjustments related to unusual items impacting our results including the elimination of management fees, non-cash derivative mark-to-market loss (gain) and certain asset write-downs. See information below:
Fiscal Quarter Ended | Fiscal Six Months Ended | |||||||||||||||
($ in millions) | ||||||||||||||||
EU medical device regulation transition costs | $ | 0.9 | $ | 1.2 | $ | 1.8 | $ | 2.3 | ||||||||
Principal shareholder management fee | 0.8 | 0.7 | 1.5 | 1.5 | ||||||||||||
Derivative mark-to-market loss (gain) | 1.0 | (1.2 | ) | 1.6 | (0.2 | ) | ||||||||||
Other | 1.8 | 2.7 | 6.7 | 6.1 | ||||||||||||
Total other adjustments | $ | 4.5 | $ | 3.4 | $ | 11.6 | $ | 9.7 |
(d) Non-GAAP adjustments were tax effected based on the nature of the expense and related jurisdiction, many of which are impacted by valuation allowances resulting in little to no tax impact.
(e) We exclude deferred tax resulting from changes in tax law and expiration of statutes, adjustments for uncertain tax positions, and other unusual items not related to current operating results.
Fiscal Quarter Ended | Fiscal Six Months Ended | |||||||||||||||
($ in millions) | ||||||||||||||||
Net cash provided by (used in) operating activities - GAAP | $ | 132.7 | $ | (46.0 | ) | $ | 122.8 | $ | (63.5 | ) | ||||||
Adjustments: | ||||||||||||||||
Net cash provided by (used in) investing activities - GAAP | 6.4 | (7.2 | ) | (4.3 | ) | (25.5 | ) | |||||||||
Unusual or non-recurring payments | 5.0 | 6.5 | 12.5 | 13.9 | ||||||||||||
Adjusted free cash flow (f) | $ | 144.1 | $ | (46.7 | ) | $ | 131.0 | $ | (75.1 | ) |
(f) The Company defines free cash flow as net cash flows from operating activities accounted for under GAAP less net cash flows from investing activities accounted for under GAAP plus or minus any unusual or non-recurring payments.
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||||||
Core and Non-Core Revenue and Revenue by Segment | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Fiscal Quarter Ended | |||||||||||||||||||
2021 | 2020 | Percent Change | Currency Impact | Constant Currency Growth Rate (a) | |||||||||||||||
Core Revenue | $ | 487.5 | $ | 386.2 | 26.2 | % | 3.7 | % | 22.5 | % | |||||||||
Non-Core Revenue | 4.9 | 4.3 | 14.0 | % | 0.0 | % | 14.0 | % | |||||||||||
Net Revenue | $ | 492.5 | $ | 390.5 | 26.1 | % | 3.7 | % | 22.4 | % | |||||||||
Segment net revenue | |||||||||||||||||||
$ | 296.3 | $ | 241.1 | 22.9 | % | 1.6 | % | 21.3 | % | ||||||||||
EMEA | 67.8 | 51.0 | 33.0 | % | 8.7 | % | 24.3 | % | |||||||||||
58.5 | 43.3 | 35.0 | % | 11.7 | % | 23.2 | % | ||||||||||||
Other | 69.9 | 55.2 | 26.7 | % | 2.0 | % | 24.7 | % | |||||||||||
Net revenue | $ | 492.5 | $ | 390.5 | 26.1 | % | 3.7 | % | 22.4 | % | |||||||||
Fiscal Six Months ended | |||||||||||||||||||
2021 | 2020 | Percent Change | Currency Impact | Constant Currency Growth Rate (a) | |||||||||||||||
Core Revenue | $ | 986.9 | $ | 790.5 | 24.8 | % | 3.1 | % | 21.8 | % | |||||||||
Non-Core Revenue | 12.4 | 8.0 | 56.1 | % | 0.0 | % | 56.1 | % | |||||||||||
Net Revenue | $ | 999.3 | $ | 798.5 | 25.2 | % | 3.0 | % | 22.1 | % | |||||||||
Segment net revenue | |||||||||||||||||||
$ | 617.7 | $ | 491.7 | 25.6 | % | 0.5 | % | 25.1 | % | ||||||||||
EMEA | 136.3 | 109.6 | 24.3 | % | 8.7 | % | 15.6 | % | |||||||||||
113.5 | 89.6 | 26.6 | % | 9.9 | % | 16.7 | % | ||||||||||||
Other | 131.8 | 107.6 | 22.6 | % | 2.5 | % | 20.1 | % | |||||||||||
Net revenue | $ | 999.3 | $ | 798.5 | 25.2 | % | 3.0 | % | 22.1 | % | |||||||||
(a) The term “constant currency” means we have translated local currency revenues for all reporting periods to
Source:
2021 GlobeNewswire, Inc., source