x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-2573850 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | |
Non-accelerated filer | (Do not check if a smaller reporting company) ¨ | Smaller reporting company | ¨ |
June 30, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,075 | $ | 8,388 | |||
Accounts receivable, net | 17,233 | 29,928 | |||||
Inventories | 23,525 | 27,639 | |||||
Deferred tax asset—current | 8,234 | 8,362 | |||||
Prepaid expenses and other current assets | 4,949 | 4,302 | |||||
Total current assets | 72,016 | 78,619 | |||||
Property, plant and equipment, net | 50,302 | 48,057 | |||||
Goodwill | 80,763 | 80,763 | |||||
Intangible assets, net | 53,838 | 62,262 | |||||
Other non-current assets | 1,595 | 1,784 | |||||
Total assets | $ | 258,514 | $ | 271,485 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,890 | $ | 6,950 | |||
Accrued payroll and related expenses | 6,070 | 7,485 | |||||
Current portion of lease obligation | 474 | 441 | |||||
Current portion of contingent consideration (see Note 9) | 1,616 | 1,493 | |||||
Other current liabilities | 5,557 | 7,640 | |||||
Total current liabilities | 19,607 | 24,009 | |||||
Lease obligation, net of current portion | 4,880 | 5,126 | |||||
Contingent consideration—non-current (see Note 9) | 6,119 | 7,315 | |||||
Deferred tax liability—non-current | 2,759 | 6,318 | |||||
Income taxes payable | 2,076 | 2,118 | |||||
Deferred rent | 2,061 | 1,746 | |||||
Other non-current liabilities | 1,166 | 1,074 | |||||
Commitments and contingencies (see Note 9) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.001 par value per share; 5,000 shares authorized; none issued or outstanding at June 30, 2014 and December 31, 2013 | — | — | |||||
Common stock, $.001 par value per share; 50,000 shares authorized; 34,274 and 34,073 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 34 | 34 | |||||
Additional paid-in capital | 205,523 | 201,021 | |||||
Accumulated other comprehensive income | 3 | 18 | |||||
Retained earnings | 14,286 | 22,706 | |||||
Total stockholders’ equity | 219,846 | 223,779 | |||||
Total liabilities and stockholders’ equity | $ | 258,514 | $ | 271,485 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Total revenues | $ | 31,488 | $ | 29,706 | $ | 78,161 | $ | 91,701 | |||||||
Costs and expenses | |||||||||||||||
Cost of sales (excludes amortization of intangible assets of $1,571, $1,511, $3,142 and $2,949, respectively) | 15,902 | 13,671 | 36,149 | 33,218 | |||||||||||
Research and development | 8,127 | 7,945 | 17,208 | 15,469 | |||||||||||
Sales and marketing | 9,393 | 7,120 | 19,320 | 15,562 | |||||||||||
General and administrative | 5,843 | 5,901 | 13,070 | 13,264 | |||||||||||
Amortization of intangible assets from acquired businesses and technology | 2,208 | 2,022 | 4,416 | 3,786 | |||||||||||
Total costs and expenses | 41,473 | 36,659 | 90,163 | 81,299 | |||||||||||
Operating (loss) income | (9,985 | ) | (6,953 | ) | (12,002 | ) | 10,402 | ||||||||
Interest expense, net | (372 | ) | (359 | ) | (731 | ) | (723 | ) | |||||||
(Loss) income before taxes | (10,357 | ) | (7,312 | ) | (12,733 | ) | 9,679 | ||||||||
Benefit for income taxes | (3,449 | ) | (5,557 | ) | (4,313 | ) | (933 | ) | |||||||
Net (loss) income | $ | (6,908 | ) | $ | (1,755 | ) | $ | (8,420 | ) | $ | 10,612 | ||||
Basic (loss) earnings per share | $ | (0.20 | ) | $ | (0.05 | ) | $ | (0.25 | ) | $ | 0.31 | ||||
Diluted (loss) earnings per share | $ | (0.20 | ) | $ | (0.05 | ) | $ | (0.25 | ) | $ | 0.30 | ||||
Shares used in basic per share calculation | 34,347 | 33,802 | 34,271 | 33,658 | |||||||||||
Shares used in diluted per share calculation | 34,347 | 33,802 | 34,271 | 34,716 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net (loss) income | $ | (6,908 | ) | $ | (1,755 | ) | $ | (8,420 | ) | $ | 10,612 | ||||
Other comprehensive (loss) income, net of tax | |||||||||||||||
Changes in cumulative translation adjustment | (4 | ) | — | (15 | ) | — | |||||||||
Comprehensive (loss) income | $ | (6,912 | ) | $ | (1,755 | ) | $ | (8,435 | ) | $ | 10,612 |
Six months ended June 30, | |||||||
2014 | 2013 | ||||||
OPERATING ACTIVITIES: | |||||||
Net (loss) income | $ | (8,420 | ) | $ | 10,612 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation, amortization and other | 13,693 | 12,123 | |||||
Stock-based compensation expense | 3,479 | 4,028 | |||||
Change in deferred tax assets and liabilities | (3,559 | ) | 3,363 | ||||
Excess tax benefit from share-based compensation | — | (937 | ) | ||||
Change in fair value of acquisition contingencies | 42 | — | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 12,688 | 19,213 | |||||
Inventories | 4,114 | (9,128 | ) | ||||
Income taxes receivable | (1,154 | ) | (2,266 | ) | |||
Prepaid expenses and other current and non-current assets | 656 | 1,491 | |||||
Accounts payable | (1,365 | ) | (1,959 | ) | |||
Accrued payroll and related expenses | (813 | ) | (985 | ) | |||
Income taxes payable | 182 | (3,803 | ) | ||||
Other current and non-current liabilities | (2,251 | ) | (2,436 | ) | |||
Net cash provided by operating activities | 17,292 | 29,316 | |||||
INVESTING ACTIVITIES: | |||||||
Acquisitions of property and equipment | (6,619 | ) | (11,748 | ) | |||
Acquisition of BioHelix, net of cash acquired | — | (9,150 | ) | ||||
Acquisition of intangibles | (92 | ) | (1,142 | ) | |||
Net cash used for investing activities | (6,711 | ) | (22,040 | ) | |||
FINANCING ACTIVITIES: | |||||||
Payments on lease obligation | (213 | ) | (184 | ) | |||
Repurchases of common stock | (1,951 | ) | (858 | ) | |||
Proceeds from issuance of common stock | 2,376 | 4,922 | |||||
Excess tax benefit from share-based compensation | — | 937 | |||||
Payment on line of credit | — | (5,000 | ) | ||||
Payments on acquisition contingencies | (1,109 | ) | — | ||||
Net cash used for financing activities | (897 | ) | (183 | ) | |||
Effect of exchange rates on cash | 3 | — | |||||
Net increase in cash and cash equivalents | 9,687 | 7,093 | |||||
Cash and cash equivalents, beginning of period | 8,388 | 14,856 | |||||
Cash and cash equivalents, end of period | $ | 18,075 | $ | 21,949 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | 467 | $ | 571 | |||
Cash paid for income taxes | $ | 443 | $ | 1,900 | |||
NON-CASH INVESTING ACTIVITIES: | |||||||
Purchase of capital equipment by incurring current liabilities | $ | 452 | $ | 1,007 | |||
NON-CASH FINANCING ACTIVITIES: | |||||||
Reduction of other current liabilities upon issuance of restricted share units | $ | 663 | $ | 456 |
2013 | |||
Basic net income per share: | |||
Net income | $ | 10,612 | |
Less: income allocated to participating securities | (32 | ) | |
Net income allocated to common stockholders | $ | 10,580 | |
Weighted average common shares outstanding — basic | 33,658 | ||
Net income per share — basic | $ | 0.31 | |
Diluted net income per share: | |||
Net income | $ | 10,612 | |
Less: income allocated to participating securities | (31 | ) | |
Net income allocated to common stockholders | $ | 10,581 | |
Weighted average common shares outstanding — basic | 33,658 | ||
Dilutive securities | 1,058 | ||
Weighted average common shares outstanding — diluted | 34,716 | ||
Net income per share — diluted | $ | 0.30 |
June 30, 2014 | December 31, 2013 | ||||||
Raw materials | $ | 10,585 | $ | 11,938 | |||
Work-in-process (materials, labor and overhead) | 8,249 | 9,831 | |||||
Finished goods (materials, labor and overhead) | 4,691 | 5,870 | |||||
Total inventories | $ | 23,525 | $ | 27,639 |
June 30, 2014 | December 31, 2013 | ||||||
Customer incentives | $ | 2,792 | $ | 3,068 | |||
Unearned grant revenue | 723 | 2,029 | |||||
Accrued research and development costs | 287 | 240 | |||||
Other | 1,755 | 2,303 | |||||
Total other current liabilities | $ | 5,557 | $ | 7,640 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of sales | $ | 0.1 | $ | 0.2 | $ | 0.3 | $ | 0.4 | ||||||||
Research and development | 0.2 | 0.3 | 0.6 | 0.7 | ||||||||||||
Sales and marketing | 0.2 | 0.2 | 0.5 | 0.3 | ||||||||||||
General and administrative | 0.8 | 1.2 | 2.1 | 2.6 | ||||||||||||
Total stock-based compensation expense | $ | 1.3 | $ | 1.9 | $ | 3.5 | $ | 4.0 |
Six months ended June 30, | ||||||
2014 | 2013 | |||||
Risk-free interest rate | 1.58 | % | 0.86 | % | ||
Expected option life (in years) | 5.77 | 5.53 | ||||
Volatility rate | 42 | % | 44 | % | ||
Dividend rate | — | % | — | % |
Six months ended June 30, | ||||||
2014 | 2013 | |||||
Customer: | ||||||
A | 14 | % | 15 | % | ||
B | 8 | % | 11 | % | ||
22 | % | 26 | % |
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents | $ | 3,055 | $ | — | $ | — | $ | 3,055 | $ | 3,056 | $ | — | $ | — | $ | 3,056 | |||||||||||||||
Total assets measured at fair value | $ | 3,055 | $ | — | $ | — | $ | 3,055 | $ | 3,056 | $ | — | $ | — | $ | 3,056 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Senior Credit Facility | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Contingent consideration | — | — | 7,735 | 7,735 | — | — | 8,808 | 8,808 | |||||||||||||||||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 7,735 | $ | 7,735 | $ | — | $ | — | $ | 8,808 | $ | 8,808 |
Contingent consideration liabilities (Level 3 measurement) | |||
Balance at December 31, 2013 | $ | 8,808 | |
Cash payments | (1,116 | ) | |
Losses recorded for fair value adjustments | 42 | ||
Unrealized loss on foreign currency translation | 1 | ||
Balance at June 30, 2014 | $ | 7,735 |
For the three months ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2014 | 2013 | $ | % | |||||||||||
Infectious disease net product sales | $ | 18,260 | $ | 17,322 | $ | 938 | 5 | % | ||||||
Women’s health net product sales | 8,704 | 8,381 | 323 | 4 | % | |||||||||
Gastrointestinal disease net product sales | 1,939 | 1,829 | 110 | 6 | % | |||||||||
Other net product sales | 1,634 | 1,166 | 468 | 40 | % | |||||||||
Royalty, license fees and grant revenue | 951 | 1,008 | (57 | ) | (6 | )% | ||||||||
Total revenues | $ | 31,488 | $ | 29,706 | $ | 1,782 | 6 | % |
Three months ended June 30, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Operating expenses | As a % of total revenues | Operating expenses | As a % of total revenues | Increase (Decrease) | ||||||||||||||||
$ | % | |||||||||||||||||||
Research and development | $ | 8,127 | 26 | % | $ | 7,945 | 27 | % | $ | 182 | 2 | % | ||||||||
Sales and marketing | $ | 9,393 | 30 | % | $ | 7,120 | 24 | % | $ | 2,273 | 32 | % | ||||||||
General and administrative | $ | 5,843 | 19 | % | $ | 5,901 | 20 | % | $ | (58 | ) | (1 | )% | |||||||
Amortization of intangible assets from acquired businesses and technology | $ | 2,208 | 7 | % | $ | 2,022 | 7 | % | $ | 186 | 9 | % |
For the six months ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2014 | 2013 | $ | % | |||||||||||
Infectious disease net product sales | $ | 54,099 | $ | 66,731 | $ | (12,632 | ) | (19 | )% | |||||
Women’s health net product sales | 16,821 | 16,994 | (173 | ) | (1 | )% | ||||||||
Gastrointestinal disease net product sales | 3,563 | 3,355 | 208 | 6 | % | |||||||||
Other net product sales | 1,685 | 2,638 | (953 | ) | (36 | )% | ||||||||
Royalty, license fees and grant revenue | 1,993 | 1,983 | 10 | 1 | % | |||||||||
Total revenues | $ | 78,161 | $ | 91,701 | $ | (13,540 | ) | (15 | )% |
Six months ended June 30, | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Operating expenses | As a % of total revenues | Operating expenses | As a % of total revenues | Increase (Decrease) | ||||||||||||||
$ | % | |||||||||||||||||
Research and development | 17,208 | 22 | % | 15,469 | 17 | % | $ | 1,739 | 11 | % | ||||||||
Sales and marketing | 19,320 | 25 | % | 15,562 | 17 | % | $ | 3,758 | 24 | % | ||||||||
General and administrative | 13,070 | 17 | % | 13,264 | 14 | % | $ | (194 | ) | (1 | )% | |||||||
Amortization of intangible assets from acquired businesses and technology | 4,416 | 6 | % | 3,786 | 4 | % | $ | 630 | 17 | % |
June 30, 2014 | December 31, 2013 | ||||||
Cash and cash equivalents | $ | 18,075 | $ | 8,388 | |||
Restricted cash included in prepaid expenses and other current assets | — | 969 | |||||
Cash, cash equivalents, and restricted cash | $ | 18,075 | $ | 9,357 | |||
Working capital including cash, cash equivalents, and restricted cash | $ | 52,409 | $ | 54,610 | |||
Amount available to borrow under the Senior Credit Facility | $ | 37,400 | $ | 140,000 |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (1) | ||||||||||
April 1 - 30 | — | $ | — | — | $ | 50,000,000 | ||||||||
May 1 - 31 | — | — | — | 50,000,000 | ||||||||||
June 1 - 30 | — | — | — | 50,000,000 | ||||||||||
Total | — | $ | — | — | $ | 50,000,000 |
Exhibit Number | ||
3.1 | Restated Certificate of Incorporation of Quidel Corporation. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010.) | |
3.2 | Amended and Restated Bylaws of Quidel Corporation. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on May 21, 2012.) | |
4.1 | Certificate of Designations of Series C Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010.) | |
10.1*(1) | Werner Kroll Employment Offer Letter, dated as of April 24, 2014. | |
10.2*(1) | Agreement Re: Change in Control, dated as of May 8, 2014, between Quidel Corporation and Werner Kroll. | |
10.3 | Quidel Corporation Amended and Restated 2010 Equity Incentive Plan. (Incorporated by reference to Appendix A to the Registrant's Proxy Statement filed on April 1, 2014.) | |
31.1* | Certification by Principal Executive Officer of Registrant pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification by Principal Financial Officer of Registrant pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certifications by Principal Executive Officer and Principal Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | XBRL Instance Document | |
101* | XBRL Taxonomy Extension Schema Document | |
101* | XBRL Taxonomy Calculation Linkbase Document | |
101* | XBRL Taxonomy Extension Definition Linkbase Document | |
101* | XBRL Taxonomy Label Linkbase Document | |
101* | XBRL Taxonomy Presentation Linkbase Document |
Date: July 24, 2014 | QUIDEL CORPORATION |
/s/ DOUGLAS C. BRYANT | |
Douglas C. Bryant | |
President and Chief Executive Officer (Principal Executive Officer) | |
/s/ RANDALL J. STEWARD | |
Randall J. Steward | |
Chief Financial Officer (Principal Financial Officer) |
Exhibit Number | ||
3.1 | Restated Certificate of Incorporation of Quidel Corporation. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010.) | |
3.2 | Amended and Restated Bylaws of Quidel Corporation. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on May 21, 2012.) | |
4.1 | Certificate of Designations of Series C Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010.) | |
10.1*(1) | Werner Kroll Employment Offer Letter, dated as of April 24, 2014. | |
10.2*(1) | Agreement Re: Change in Control, dated as of May 8, 2014, between Quidel Corporation and Werner Kroll. | |
10.3 | Quidel Corporation Amended and Restated 2010 Equity Incentive Plan. (Incorporated by reference to Appendix A to the Registrant's Proxy Statement filed on April 1, 2014.) | |
31.1* | Certification by Principal Executive Officer of Registrant pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification by Principal Financial Officer of Registrant pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certifications by Principal Executive Officer and Principal Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | XBRL Instance Document | |
101* | XBRL Taxonomy Extension Schema Document | |
101* | XBRL Taxonomy Calculation Linkbase Document | |
101* | XBRL Taxonomy Extension Definition Linkbase Document | |
101* | XBRL Taxonomy Label Linkbase Document | |
101* | XBRL Taxonomy Presentation Linkbase Document |
(1) | Indicates a management plan or compensatory plan or arrangement. |
April 21, 2014 | REVISED |
Title: | Senior Vice President, Research & Development |
Reporting to: | Doug Bryant, President & CEO |
Compensation: | $12,692.30 bi-weekly ($330,000 annualized) |
Annual Bonus: | You will participate in the bonus plan with a target bonus of 50% at achievement of plan. The 2014 Leadership Incentive Compensation Plan (ICP) allows for payment ranging from zero to 150% of target, based on achievement of financial and corporate impact goals. Participation in 2014 will be prorated based on your start date. |
New Hire Equity: | You will receive a new hire grant equal to $500,000 in total value with half of such value awarded in the form of non-qualified stock options (vesting over four years with 50% vesting on the second anniversary of the grant date and annually thereafter) and half of such value in the form of time-based restricted stock (cliff vesting at the end of four years). The purchase price will be the closing NASDAQ market price of Quidel’s stock on your actual start date. From time-to-time, and at the Board's sole discretion, additional equity awards may be granted that are commensurate with an executive’s contributions. It is anticipated that this practice will continue. |
Retention Equity: | You will receive an additional grant equal to $400,000 in total value in the form of time-based restricted stock. Unlike your new hire grant, this retention equity will vest over 8 years with the first 25% vesting on the fifth anniversary of the grant date, and 25% per year vesting annually thereafter. Should you be involuntarily terminated by Quidel, not because of a Change in Control nor for cause, this grant will continue to vest as agreed. The grant date for the retention equity will be your |
Relocation: | You will receive $100,000 (net), payable as a lump sum in your first paycheck. In addition, Quidel will pay for up to 90 days of temporary housing. |
Vacation: | Vacation for employees at the director level and above is untracked. That means there is no accrual account but instead you take vacation in consultation with your supervisor as your work allows. Members of the leadership team take an average of four weeks of vacation per year. |
Agreement: | You will be provided with change of control protection as outlined for other officers. Details of this protection are contained in the attached Agreement re: Change in Control. |
Start Date: | TBD |
/s/ Werner Kroll | 4/24/14 |
Signature | Date |
Quidel Corporation | Werner Kroll | |
12544 High Bluff Drive, Suite 200 | 233 Rice Road | |
San Diego, CA 92130 | Wayland, MA 01778 | |
Attn: President & CEO |
By: | /s/ Douglas C. Bryant |
Douglas C. Bryant | |
President & CEO | |
Quidel Corporation |
By: | /s/ Werner Kroll |
Werner Kroll |
1. | I have reviewed this quarterly report on Form 10-Q of Quidel Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ DOUGLAS C. BRYANT | |
Douglas C. Bryant | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Quidel Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ RANDALL J. STEWARD | |
Randall J. Steward | |
Chief Financial Officer | |
(Principal Financial Officer) |
• | the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
• | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ DOUGLAS C. BRYANT |
Douglas C. Bryant |
President and Chief Executive Officer |
(Principal Executive Officer) |
/s/ RANDALL J. STEWARD |
Randall J. Steward |
Chief Financial Officer |
(Principal Financial Officer) |
Commitments and Contingencies - Additional Information (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
|
Jun. 30, 2013
|
Jun. 30, 2014
|
Jun. 30, 2013
|
Dec. 31, 2013
|
Jun. 30, 2014
Research and development milestones [Member]
|
Aug. 31, 2013
Maximum [Member]
|
Dec. 31, 2013
BioHelix [Member]
|
Jun. 30, 2014
BioHelix [Member]
|
May 31, 2013
BioHelix [Member]
Minimum [Member]
|
May 31, 2013
BioHelix [Member]
Maximum [Member]
|
Jun. 30, 2014
Claims and litigation [Member]
|
Dec. 31, 2013
Claims and litigation [Member]
|
Jun. 30, 2014
Research and Development Agreements [Member]
|
Dec. 31, 2013
Research and Development Agreements [Member]
|
|
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Accrued in other current liabilities | $ 5,557,000 | $ 5,557,000 | $ 7,640,000 | $ 300,000 | $ 300,000 | ||||||||||
Company had royalty and license expenses relating to those agreements | 200,000 | 300,000 | 500,000 | 700,000 | |||||||||||
Current commitments | 4,600,000 | 2,300,000 | |||||||||||||
Contingent consideration | 300,000 | 300,000 | 4,000,000 | 700,000 | 5,000,000 | 13,000,000 | |||||||||
Payment of contingent consideration | 1,109,000 | 900,000 | 1,100,000 | ||||||||||||
Current portion of contingent consideration | 1,616,000 | 1,616,000 | 1,493,000 | 1,600,000 | |||||||||||
Contingent consideration non-current portion | 6,119,000 | 6,119,000 | 7,315,000 | 5,800,000 | |||||||||||
Milestone payments paid | $ 300,000 |
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Line of Credit - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
|
Jun. 30, 2014
Other non-current assets [Member]
|
Dec. 31, 2013
Other non-current assets [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
|
Aug. 10, 2012
Senior Credit Facility [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
Scenario, previously reported [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
Federal funds rate [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
LIBOR [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
LIBOR [Member]
Maximum [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
LIBOR [Member]
Minimum [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
Base rate loans [Member]
Maximum [Member]
|
Jun. 30, 2014
Senior Credit Facility [Member]
Base rate loans [Member]
Minimum [Member]
|
|
Line of Credit Facility [Line Items] | |||||||||||||
Senior Credit Facility | $ 140.0 | ||||||||||||
Senior Credit Facility, maturity date | Aug. 10, 2017 | ||||||||||||
Deferred financing costs | 1.0 | 1.2 | 1.0 | 1.0 | 0.6 | ||||||||
Base rate | 0.50% | 1.00% | |||||||||||
Senior Credit Facility, applicable margin | 2.50% | 1.25% | 1.50% | 0.25% | |||||||||
Line of credit facility restrictive covenants | The agreement governing the Senior Credit Facility is subject to certain customary limitations, including among others: limitation on liens; limitation on mergers, consolidations and sales of assets; limitation on debt; limitation on dividends, stock redemptions and the redemption and/or prepayment of other debt; limitation on investments (including loans and advances) and acquisitions; limitation on transactions with affiliates; and limitation on disposition of assets. | ||||||||||||
Senior Credit Facility, adjusted EBITDA ratio | 3 | ||||||||||||
Senior Credit Facility, interest coverage ratio | 3 | ||||||||||||
Amount available under the Senior Credit Facility | $ 37.4 | ||||||||||||
Line of credit facility covenant compliance | the Company was in compliance with all financial covenants. |
Fair Value Measurements (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Estimated Fair Value of Contingent Consideration Liabilities | Changes in estimated fair value of contingent consideration liabilities from December 31, 2013 through June 30, 2014 are as follows (in thousands):
|
Fair Value Measurements - Additional Information (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2014
|
Jun. 30, 2014
|
Jun. 30, 2013
|
Dec. 31, 2013
|
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Transfer of assets and liabilities between levels | $ 0 | $ 0 | $ 0 | $ 0 |
Amount outstanding under the Senior Credit Facility | 0 | 0 | 0 | |
Loss recorded in research and development due to change in fair value of contingent consideration liabilities | 42,000 | 42,000 | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
|
||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash Equivalents, at Carrying Value | $ 3,100,000 | $ 3,100,000 | $ 5,100,000 |
Industry and Geographic Information - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
Segment
|
Jun. 30, 2014
Sales [Member]
|
Jun. 30, 2014
Customer Concentration Risk [Member]
Non-U.S. Customers [Member]
|
Jun. 30, 2013
Customer Concentration Risk [Member]
Non-U.S. Customers [Member]
|
Dec. 31, 2013
Customer Concentration Risk [Member]
Non-U.S. Customers [Member]
|
Jun. 30, 2014
Customer Concentration Risk [Member]
Sales [Member]
|
Jun. 30, 2013
Customer Concentration Risk [Member]
Sales [Member]
|
Jun. 30, 2013
Customer Concentration Risk [Member]
Sales [Member]
Non-U.S. Customers [Member]
|
Jun. 30, 2014
Customer Concentration Risk [Member]
Sales [Member]
Non-U.S. Customers [Member]
|
Jun. 30, 2014
Credit Concentration Risk [Member]
|
Dec. 31, 2013
Credit Concentration Risk [Member]
|
Jun. 30, 2014
Credit Concentration Risk [Member]
Accounts receivable [Member]
Minimum [Member]
|
Dec. 31, 2013
Credit Concentration Risk [Member]
Accounts receivable [Member]
Minimum [Member]
|
|
Revenue, Major Customer [Line Items] | |||||||||||||
Number of reportable segments | 1 | ||||||||||||
Percentage of risk concentration by major customer | 10.00% | 22.00% | 26.00% | 14.00% | 17.00% | 10.00% | 10.00% | ||||||
Sales to customers outside the U.S. | $ 13.0 | $ 12.7 | |||||||||||
Accounts receivable | $ 3.9 | $ 3.2 | $ 1.7 | $ 19.6 |
Computation of (Loss) Earnings Per Share
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of (Loss) Earnings Per Share | Computation of (Loss) Earnings Per Share For the three and six months ended June 30, 2014 , basic (loss) earnings per share were computed by dividing net (loss) earnings by the weighted-average number of common shares outstanding, including vested restricted stock awards, during the period. Diluted earnings per share reflects the potential dilution that could occur if the earnings were divided by the weighted-average number of common shares and potentially dilutive common shares from outstanding stock options as well as unvested restricted stock awards. Potential dilutive common shares were calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company’s outstanding stock options and unvested restricted stock awards. For periods in which the Company incurs losses, potentially dilutive shares are not considered in the calculation of net loss per share as their effect would be anti-dilutive. For periods in which the Company has earnings, stock options are excluded from the calculation of diluted net income per share when the combined exercise price, unrecognized stock-based compensation and assumed tax benefits upon exercise are greater than the average market price for the Company’s common stock because their effect is anti-dilutive. For the three and six months ended June 30, 2014, there were no differences between the number of common shares used for the basic and diluted earnings per share (“EPS”) computation as the Company incurred a net loss. For the three and six months ended June 30, 2014, 1.0 million and 1.1 million, respectively, stock options and shares of restricted stock were excluded from diluted loss per share that would have been included if the Company had been in a net income position. Additionally, stock options totaling 1.4 million and 1.0 million for the three and six months ended June 30, 2014, respectively, were not included in the computation of diluted EPS because the exercise of such options would be anti-dilutive. For the three and six months ended June 30, 2014, there were no participating securities. As such, the treasury stock method was applied in calculating EPS rather than the more dilutive of the treasury stock or the two-class method, as performed in previous periods. For the three and six months ended June 30, 2013, diluted net income per share was reported based on the more dilutive of the treasury stock or the two-class method. Under the two-class method, net income is allocated to common stock and participating securities. For the six months ended June 30, 2013, the Company’s unvested restricted stock awards and certain unvested restricted stock units met the definition of participating securities. Basic net income per share under the two-class method was computed by dividing net income adjusted for earnings allocated to unvested stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share under the two-class method was computed by dividing net income adjusted for earnings allocated to unvested stockholders for the period by the weighted average number of common and common equivalent shares outstanding during the period. The Company excludes stock options from the calculation of diluted net income per share when the combined exercise price, unrecognized stock-based compensation and assumed tax benefits upon exercise are greater than the average market price for the Company’s common stock because their effect is anti-dilutive. Stock options totaling 0.6 million and 0.4 million for the three and six months ended June 30, 2013 were not included in the computation of diluted EPS because the exercise of such options would be anti-dilutive. For the three months ended June 30, 2013, there were no differences between the number of common shares used for the basic and diluted EPS computation as the Company incurred a net loss. Additionally, for the three months ended June 30, 2013, 1.1 million stock options and shares of restricted stock were excluded from diluted loss per share that would have been included if the Company had been in a net income position. The following table sets forth the computation of basic and diluted EPS for the six months ended June 30, 2013 (in thousands, except per share amounts):
|