|New Threads Only:|
|New Threads & Replies:|
Forum List » Business News and Headlines|
SEC Filings, Earing Reports, Press Releases
Quidel Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 29, 2011 06:20PM
Quidel Corp. (QDEL) filed Quarterly Report for the period ended 2011-03-31.
Highlight of Business Operations:
In January 2011, we completed a public offering of 4.6 million shares of our common stock at $13.15 per share. We received proceeds, net of underwriting discounts and commissions, of $57.9 million ($12.43 per share) and incurred approximately $0.7 million in related offering expenses. We expect to use the net proceeds of this offering for working capital and other general corporate purposes, which may potentially include the acquisition or development of new technology, the acquisition of diagnostic or related companies, products or businesses or the repayment of existing indebtedness.
Cost of sales increased 50% to $20.0 million, or 34% of total revenues for the three months ended March 31, 2011, compared to $13.4 million, or 47% of total revenues for the three months ended March 31, 2010. The absolute dollar increase in cost of sales is primarily related to the variable nature of direct costs (material and labor) associated with the 110% increase in total revenues. Partially offsetting this are acquisition related synergies including certain decreased material costs and freight rates associated with leveraging our combined volume, and reduced overhead costs and scrap at DHI. The decrease in cost of sales as a percentage of total revenue was primarily related to a more favorable product mix, as well as the improved cost structure noted above.
For the three months ended March 31, 2011 and March 31, 2010, our expected annual effective tax rate was 34.0% and 37.8%, respectively. We recognized tax expense (benefit) of $5.9 million and ($1.5) million for the three months ended March 31, 2011 and 2010, respectively. The difference in the effective tax rate between March 31, 2011 and March 31, 2010 is primarily due to the exclusion of the federal research and development tax credit and certain acquisition related non-deductible transaction during the first quarter of 2010.
As of March 31, 2011, our principal sources of liquidity consisted of $58.9 million in cash and cash equivalents, as well as $32.0 million available to us under our Senior Credit Facility. Our working capital as of March 31, 2011 was $87.8 million.
Cash provided by operating activities was $25.6 million during the three months ended March 31, 2011. We had net earnings of $11.4 million, including non-cash charges of $5.2 million of depreciation and amortization of intangible assets and property and equipment, and stock-based compensation. As a result of increased revenues during the three months ended March 31, 2011, we had an increase in accounts receivable of $2.7 million, a decrease in our inventories of $2.9 million, and an increase in accrued royalties of $2.2 million. Accrued payroll and related expenses increased by $1.7 million due to the timing of payroll disbursements and accrual for incentive compensation.
Our $120.0 million Senior Credit Facility matures on October 8, 2013. The Senior Credit Facility bears interest for base rate loans at a rate equal to (i) the higher of (a) the lenders prime rate and (b) the Federal funds rate plus one-half of one percent, plus (ii) the applicable rate, or for Eurodollar rate loans the interest rate is equal to (i) the Eurodollar rate, plus (ii) the applicable rate. The applicable rate is generally determined in accordance with a performance pricing grid based on our leverage ratio and ranges from 0.50% to 1.75% for base rate loans and from 1.50% to 2.75% for Eurodollar rate loans. 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 annual capital expenditures. The terms of the Senior Credit Facility require us to comply with certain financial covenants which include a funded debt to EBITDA ratio (as defined in the Senior Credit Facility, with adjusted EBITDA generally calculated as earnings before, among other adjustments, interest, taxes, depreciation and amortization) not to exceed 3:00 to 1:00 as of the end of each fiscal quarter, and an interest coverage ratio of not less than 3:50 to 1:00 as of the end of each fiscal quarter. The Senior Credit Facility is secured by substantially all present and future assets and properties of the Company. As of March 31, 2011, we had $32.0 million available under the Senior Credit Facility. Our ability to borrow under the Senior Credit Facility fluctuates from time to time due to, among other factors, our borrowings under the facility and our funded debt to adjusted EBITDA ratio. At March 31, 2011, we had $42.0 million outstanding under the Senior Credit Facility which was borrowed in connection with the acquisition of DHI. At March 31, 2011, we were in compliance with all covenants.