Highlights
- First quarter revenue increased 24.2% to
$506.8 million , or 21.8% in constant currency - Core revenue grew 23.5% to
$499.3 million for the quarter, or 21.1% in constant currency basis - Operating Income increased 382% to
$57.4 million from$11.9 million last year - Net loss was
$39.1 million , or ($0.19 ) per diluted share, while Adjusted net income was$54.9 million , or$0.26 per diluted share in the first quarter of 2021 - First quarter Adjusted EBITDA rose 49% to
$152.4 million and Adjusted free cash flow rose 54% to($13.1) million year over year - Company raised 2021 guidance to 9% to 11% Core revenue growth in constant currency and Adjusted EBITDA growth to 14.0% to 16.5%
First Quarter 2021 Financial Highlights
“We started off the year strong with continued momentum in our base business that was supplemented by our COVID-19 testing solutions,” said
$ in millions, other than per share amounts | Quarter Ended | Change | ||
as reported | constant currency | |||
Revenue | 24.2% | 21.8% | ||
Core Revenue | 23.5% | 21.1% | ||
Gross Profit Margin | 51.0% | 47.7% | 330 bps | - |
Income from Operations | 382.4% | - | ||
EPS (GAAP) | ( | ( | 72.5% | - |
Adjusted Diluted EPS | ( | n/a | - | |
Adjusted Free Cash Flow | ( | ( | 53.9% | - |
Adjusted EBITDA | 49.4% | - |
- Core revenue, which excludes contract manufacturing and other licensing revenue, increased to
$499.3 million dollars in the first quarter of 2021, compared with$404.3 million in the similar period last year, or a 21.1% increase on constant currency terms - Net loss for the first quarter was
($39.1) million , or ($0.19 ) per share, compared with net loss of($101.2) million , or ($0.69 ) per share, in the first quarter of 2020 - Adjusted EBITDA for the first quarter was
$152.4 million , an increase of 49.4% as compared to$102.0 million in the prior year period - Adjusted free cash flow for the first quarter was
($13.1) million , compared with($28.4) million in the prior year period
Results by Segment
“During the quarter, we experienced top-line growth across each of our geographies and saw particular strength in our largest segment,
Revenues by segment were as follows:
$ millions | Quarter Ended | Change | ||||
as reported | constant currency | |||||
28.3% | 28.8% | |||||
EMEA | 16.8% | 8.2% | ||||
18.7% | 10.6% | |||||
Other | 18.2% | 15.1% | ||||
Total Revenue | $506.8 | $407.9 | 24.2% | 21.8% |
Balance Sheet and Liquidity
As of
During the first quarter:
- The Company completed its IPO in early
February 2021 , including full exercise of the over-allotment option by the underwriters, and raised approximately$1.4 billion in net proceeds that were used primarily for debt reduction. - Ortho created additional financial flexibility by amending its revolving credit facility in
February 2021 to upsize from$350 million to$500 million and extend the maturity date to 2026. - The Company received credit ratings upgrades by both Moody’s and S&P Global after reducing debt with the IPO proceeds.
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 | 9% – 11% | 7% – 9% |
Adjusted EBITDA | ||
Adjusted EBITDA Growth | 14% -16.5% | 10% - 13% |
Adjusted Diluted EPS |
“We closed the first quarter very strong, and we are pleased to raise our outlook for all of our key performance indicators in 2021,” 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 (833) 362-0203 (domestic) or (914) 987-7672 (international) and entering Conference ID number 1883187.
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 LifeTM, 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
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; 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
Consolidated Statements of Loss | |||||||
(Unaudited) | |||||||
(In millions, except per share data) | |||||||
Fiscal First Quarter Ended | |||||||
Net revenue | $ | 506.8 | $ | 407.9 | |||
Cost of revenue, excluding amortization of intangible assets | 248.2 | 213.2 | |||||
Gross profit | 258.6 | 194.7 | |||||
Selling, marketing and administrative expenses | 131.5 | 117.4 | |||||
Research and development expense | 28.9 | 23.6 | |||||
Amortization of intangible assets | 33.4 | 33.0 | |||||
Other operating expense, net | 7.4 | 8.8 | |||||
Income from operations | 57.4 | 11.9 | |||||
Interest expense, net | 43.4 | 52.2 | |||||
Tax indemnification income, net | (0.2 | ) | (2.5 | ) | |||
Other expense, net | 50.0 | 59.3 | |||||
Loss before provision for income taxes | (35.8 | ) | (97.1 | ) | |||
Provision for income taxes | 3.3 | 4.1 | |||||
Net loss | $ | (39.1 | ) | $ | (101.2 | ) | |
Basic and diluted net loss per common share | $ | (0.19 | ) | $ | (0.69 | ) | |
Basic and diluted weighted-average common shares outstanding | 206.2 | 146.3 |
Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(In millions) | ||||||||
Cash and cash equivalents | $ | 153.8 | $ | 132.8 | ||||
Accounts receivable | 324.1 | 318.7 | ||||||
Inventories | 291.1 | 278.7 | ||||||
Other current assets | 150.8 | 127.0 | ||||||
Property, plant and equipment, net | 805.6 | 832.0 | ||||||
576.1 | 580.1 | |||||||
Intangible assets, net | 983.4 | 1,016.7 | ||||||
Deferred income taxes | 7.8 | 8.0 | ||||||
Other assets | 99.8 | 107.5 | ||||||
Total assets | $ | 3,392.5 | $ | 3,401.5 | ||||
Accounts payable | $ | 130.3 | $ | 146.2 | ||||
Accrued liabilities | 260.9 | 284.7 | ||||||
Deferred revenue | 34.3 | 35.5 | ||||||
Current portion of borrowings | 139.4 | 160.0 | ||||||
Long-term borrowings | 2,240.3 | 3,558.5 | ||||||
Employee-related obligations | 38.9 | 39.3 | ||||||
Other liabilities | 103.8 | 120.8 | ||||||
Deferred income taxes | 68.0 | 67.3 | ||||||
Total liabilities | 3,015.9 | 4,412.3 | ||||||
Total stockholders’ equity (deficit) | 376.6 | (1,010.8 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 3,392.5 | $ | 3,401.5 |
Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
(In millions) | ||||||||
Fiscal First Quarter Ended | ||||||||
Cash used in operating activities | $ | (9.9 | ) | $ | (17.5 | ) | ||
Cash used in investing activities | (10.7 | ) | (18.3 | ) | ||||
Cash provided by financing activities | 41.1 | 316.2 | ||||||
Effect of exchange rate changes on cash | (0.2 | ) | (2.5 | ) | ||||
Increase in cash | 20.3 | 277.9 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 144.2 | 84.0 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 164.5 | $ | 361.9 | ||||
Reconciliation to amounts within the consolidated balance sheets: | ||||||||
Cash and cash equivalents | $ | 153.8 | $ | 349.8 | ||||
Restricted cash included in Other assets | 10.7 | 12.1 | ||||||
Cash, cash equivalents and restricted cash | $ | 164.5 | $ | 361.9 |
Reconciliation of GAAP to non-GAAP results | ||||||||
(Unaudited) | ||||||||
Fiscal First Quarter Ended | ||||||||
(Dollars in millions) | ||||||||
Net loss | $ | (39.1 | ) | $ | (101.2 | ) | ||
Interest expense, net | 43.4 | 52.2 | ||||||
Provision for income taxes | 3.3 | 4.1 | ||||||
Depreciation and amortization | 82.7 | 79.8 | ||||||
Loss on extinguishment of debt | 50.5 | 10.0 | ||||||
Stock-based compensation | 3.5 | 1.6 | ||||||
Restructuring and severance related costs (a) | 1.3 | 2.4 | ||||||
Tax indemnification income, net | (0.2 | ) | (2.5 | ) | ||||
Foreign currency exchange losses (b) | - | 49.3 | ||||||
Other adjustments (c) | 6.9 | 6.3 | ||||||
Adjusted EBITDA | $ | 152.4 | $ | 102.0 | ||||
Fiscal First Quarter Ended | ||||||||
(Dollars in millions) | ||||||||
Net loss | $ | (39.1 | ) | $ | (101.2 | ) | ||
Intangible amortization | 33.4 | 33.0 | ||||||
Loss on extinguishment of debt | 50.5 | 10.0 | ||||||
Stock-based compensation | 3.5 | 1.6 | ||||||
Restructuring and severance related costs (a) | 1.3 | 2.4 | ||||||
Foreign currency exchange losses (b) | - | 49.3 | ||||||
Other adjustments (c) | 6.9 | 6.3 | ||||||
Total adjustments | 95.6 | 102.6 | ||||||
Tax effect of reconciling items (d) | (2.0 | ) | (3.3 | ) | ||||
Discrete tax items (e) | 0.3 | - | ||||||
Adjusted net income (loss) | $ | 54.9 | $ | (1.9 | ) | |||
Adjusted basic EPS | $ | 0.27 | $ | (0.01 | ) | |||
Adjusted diluted EPS | $ | 0.26 | $ | (0.01 | ) |
(a) Represents restructuring and severance costs related to several discrete initiatives intended to strengthen operational performance and to support building our commercial capabilities including a project announced in fiscal year ended
(b) For fiscal quarter 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 (gain) loss and certain asset write-downs. See information below:
Fiscal First Quarter Ended | ||||||||
($ in millions) | ||||||||
EU medical device regulation transition costs | $ | 0.9 | $ | 1.1 | ||||
Principal shareholder management fee | 0.8 | 0.8 | ||||||
Derivative mark-to-market loss | 0.6 | 1.0 | ||||||
Other | 4.6 | 3.4 | ||||||
Total other adjustments | $ | 6.9 | $ | 6.3 |
(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 First Quarter Ended | ||||||||
($ in millions) | ||||||||
Net cash used in operating activities - GAAP | $ | (9.9 | ) | $ | (17.5 | ) | ||
Adjustments: | ||||||||
Net cash used in investing activities - GAAP | (10.7 | ) | (18.3 | ) | ||||
Unusual or non-recurring payments | 7.5 | 7.4 | ||||||
Adjusted free cash flow (f) | $ | (13.1 | ) | $ | (28.4 | ) |
(f) The Company defines free cash flow as net cash flow from operations accounted for under GAAP less net cash used in 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 first quarter ended | ||||||||||||||||||||
2021 | 2020 | Percent Change | Currency Impact | Constant Currency Growth Rate (a) | ||||||||||||||||
Core Revenue | $ | 499.3 | $ | 404.3 | 23.5 | % | $ | 9.2 | 21.1 | % | ||||||||||
Non-Core Revenue | 7.5 | 3.6 | 106.4 | % | - | 106.4 | % | |||||||||||||
Net Revenue | $ | 506.8 | $ | 407.9 | 24.2 | % | $ | 9.2 | 21.8 | % | ||||||||||
Segment net revenue | ||||||||||||||||||||
$ | 321.4 | $ | 250.5 | 28.3 | % | $ | (0.7 | ) | 28.8 | % | ||||||||||
EMEA | 68.5 | 58.7 | 16.8 | % | 4.8 | 8.2 | % | |||||||||||||
55.0 | 46.3 | 18.7 | % | 3.7 | 10.6 | % | ||||||||||||||
Other | 61.9 | 52.4 | 18.2 | % | 1.6 | 15.1 | % | |||||||||||||
Net revenue | $ | 506.8 | $ | 407.9 | 24.2 | % | $ | 9.2 | 21.8 | % |
(a) The term “constant currency” means we have translated local currency revenues for all reporting periods into
Source:
2021 GlobeNewswire, Inc., source