Ortho Medical Diagnostics studies on the primary quarter of 2021

RARITAN, N.J., May 3 / PRNewswire / – Ortho Clinical Diagnostics Holdings plc (Nasdaq: OCDX), one of the world's largest in vitro diagnostic (IVD) companies, today announced financial results for the first quarter ended Jan. April 2021.

Highlights

  • Revenue for the first quarter increased 24.2% to $ 506.8 million, or 21.8% in constant currency
  • Core revenue increased 23.5% to $ 499.3 million for the quarter, or 21.1% in constant currency
  • Operating income increased 382% from $ 11.9 million a year ago to $ 57.4 million
  • Net loss was $ 39.1 million, or ($ 0.19) per diluted share, while adjusted net income for the first quarter of 2021 was $ 54.9 million, or $ 0.26 per diluted share
  • Adjusted EBITDA increased 49% to $ 152.4 million and adjusted free cash flow increased 54% to $ (13.1) million for the first quarter last year
  • The company raised its forecast for 2021 to 9% to 11%. Core revenue growth in constant currencies and Adjusted EBITDA growth to 14.0% to 16.5%.

Financial highlights of the first quarter of 2021

"We started the year with continued momentum in our core business, complemented by our COVID-19 testing solutions," said Chris Smith, chairman and CEO of Ortho Clinical Diagnostics. “Our core sales excluding our COVID assay products increased 14% as our commercial excellence programs continue to generate strong returns and many of our regions experience accelerated recovery from the effects of the global pandemic. We are confident that we can continue this momentum for the rest of the year and beyond as we adhere to our strategic priorities. As a result, we've improved our 2021 outlook for both profit and profit margins. "

Million US dollars, excluding amounts per share Quarter ended change
April 4, 2021 March 29, 2020 as reported constant currency
revenue $ 506.8 $ 407.9 24.2% 21.8%
Core sales $ 499.3 $ 404.3 23.5% 21.1%
Gross profit margin 51.0% 47.7% 330 bps – –
Income from operations $ 57.4 $ 11.9 382.4% – –
EPS (GAAP) ($ 0.19) ($ 0.69) 72.5% – –
Adjusted Diluted EPS $ 0.26 ($ 0.01) n / A – –
Adjusted free cash flow ($ 13.1) ($ 28.4) 53.9% – –
Adjusted EBITDA $ 152.4 $ 102.0 49.4% – –
  • Core salesExcluding contract manufacturing and other royalty income, revenue increased to $ 499.3 million for the first quarter of 2021 compared to $ 404.3 million for the same period last year, or 21.1% in constant currencies
  • network loss for the first quarter was $ (39.1) million, or ($ 0.19) per share, compared to a net loss of $ (101.2) million, or ($ 0.69) per share, for the first quarter of 2020
  • Adjusted EBITDA The first quarter was $ 152.4 million, up 49.4% from $ 102.0 million for the same period last year
  • Adjusted free cash flow for the first quarter was $ (13.1) million compared to $ (28.4) million for the same period last year

Results by segment

"During the quarter, we saw revenue growth in each of our regions and we saw particular strength in our largest segment, America, which grew nearly 29% over the period," said Smith. “This was due to the strong growth in both clinical laboratories and transfusion medicine. Growth in our other three segments gained momentum throughout the quarter and China rebounded particularly strongly, with sales growing 11% in constant currencies. "

The revenues by segment were as follows:

Million dollars Quarter ended change
April 4, 2021 March 29, 2020 as reported constant currency
America $ 321.4 $ 250.5 28.3% 28.8%
EMEA $ 68.5 $ 58.7 16.8% 8.2%
Greater China $ 55.0 $ 46.3 18.7% 10.6%
Other $ 61.9 $ 52.4 18.2% 15.1%
Total sales $506.8 $407.9 24.2%. 21.8%.

Balance sheet and liquidity

As of April 4, 2021, the Company had cash and cash equivalents of $ 153.8 million compared to $ 132.8 million in cash on January 3, 2021. Total debt on April 4, 2021 was 2, $ 4 billion, down 36% year over year, $ 3.7 billion on January 3, 2021.

In the first quarter:

  • The company completed its IPO in early February 2021, including the full exercise of the over-allotment option by subscribers, and grossed approximately $ 1.4 billion in net proceeds, mainly used for deleveraging.
  • Ortho created additional financial flexibility by changing its revolving credit facility in February 2021 to increase it from $ 350 million to $ 500 million and extending the due date to 2026.
  • The company received credit enhancements from both Moody & # 39; s and S&P Global after it reduced debt with the IPO proceeds.

Outlook for the 2021 financial year

The company today raised its financial guidance for fiscal year 2021 as follows:

Fiscal year 2021 Previous guide
FY 2021
Core sales $ 1.93 to $ 1.96 billion $ 1.86 to $ 1.9 billion
Core sales growth at constant currency 9% – 11% 7% – 9%
Adjusted EBITDA $ 520-532 million $ 504 to $ 517 million
Adjusted EBITDA growth 14% -16.5% 10% – 13%
Adjusted Diluted EPS $ 0.64 – $ 0.69 $ 0.57 – $ 0.63

"We finished the first quarter very well and we're excited to improve our outlook for all of our key performance indicators in 2021," said Joseph Busky, Chief Financial Officer of Ortho Clinical Diagnostics. “Our successful IPO and ongoing annual cash flow generation allow us to strengthen our balance sheet and explore opportunities for expansion in our current markets as well as entry into other high-growth markets that would complement our current business. We have the right strategy and team to drive long-term shareholder value and we continue to focus on driving further product innovation, economic excellence and operational efficiency in our company. We look forward to continuing to work at a high level throughout the 2021 financial year. "

Conference call information

Ortho Clinical Diagnostics will host a conference call at 5:00 p.m. today to discuss the results for the first quarter of 2021.

Interested parties can access the invitation and the accompanying presentation in the “Investors” section of the company's website at https://ir.orthoclinicaldiagnostics.com. Presentation materials will also be posted in the Investors section of the website at the time of the call. Those who cannot access the webcast can join the call by telephone by dialing (833) 362-0203 (Domestic) or (914) 987-7672 (International) and entering the conference ID number 1883187.

A replay of the conference call will be available in the Investor Relations section of the Company’s website in the Events section a few hours after the event.

About Ortho Clinical Diagnostics

Ortho Clinical Diagnostics (Nasdaq: OCDX) is one of the world's largest companies for pure in vitro diagnostics (IVD).

Orthos tests affect more than 800,000 patients worldwide every 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 quick, accurate and reliable. Ortho's bespoke solutions improve clinical outcomes, improve efficiency, overcome laboratory staff challenges and reduce costs.

From the introduction of the first product to determine the Rh + or Rh blood group to the development of the world's first tests for the detection of antibodies against HIV and hepatitis C to the introduction of the patented dry slide technology and the commercialization of the first of the US Food and Drug Administration Approved Large Volume Ortho has been a pioneer in IVD for over 80 years.

The company is backed by Ortho CareTM, an award-winning, end-to-end service and support program that delivers world-class technical, field and remote service to laboratories in more than 130 countries and territories around the world.

For more information, please visit the Ortho website or social media: 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 expected results of operations, which are subject to all known and unknown risks, uncertainties and other factors that could affect our actual results, performance or success, market trends, or industry results differ materially from those set forth in Such forward-looking statements may be expressed or implied. Therefore, all statements contained herein that are not historical facts may and should be interpreted as forward-looking statements. Without limiting the foregoing, the words "anticipate", "expect", "suggest", "plan", "believe", "intend", "project", "forecast", "estimate", "aim", "project." "," Should, "" could, "" would, "" may, "" could, "" will "and the negative thereof and similar words and expressions are used to identify forward-looking statements. Factors that could materially affect such forward-looking statements include: the ongoing global coronavirus pandemic (COVID-19); increased competition; Manufacturing problems or delays, or failure to develop and commercialize new or improved products or services; adverse developments on the world market as well as economic and political conditions; Our ability to obtain additional capital on economically reasonable terms may be limited or nonexistent. our inability to implement our growth-enhancing strategies or to realize the anticipated benefits of acquisitions and divestments, including due to difficulties in integrating acquired businesses into our current operations or in disposing of divested businesses; The need to record impairment losses related to goodwill, identified intangible assets and property, plant and equipment; our ability to operate in accordance with our business strategy in the event that our collaborators fail to meet their obligations; Risk that the insurance we maintain may not fully cover all potential risks; Product recalls or negative advertising can affect our reputation or the market acceptance of our products. Decrease in the number of surgical interventions performed and the resulting decrease in the need for blood; Fluctuations in our cash flows due to our reagent rental model; Acts of terrorism, conflicts, wars and natural disasters that can have a significant impact on our business, financial and earnings position; the outcome of legal proceedings against us and / or others; Risks associated with our activities outside the United States, including currency conversion risks, the effects of potential new tariffs and compliance with applicable trade embargoes; the impact of the UK's withdrawal from the European Union; our inability to deliver products and services that meet customers' needs and expectations; lack of trust in our products; significant changes in the healthcare and related industries in which we operate to reduce costs; Reduction of government funding and reimbursement to our customers; Price increases or interruptions in the supply of raw materials, components for our products, and products and services made available to us by certain major suppliers and manufacturers; our ability to recruit and retain the experienced and skilled staff we need to compete; Work stoppages, union negotiations, industrial disputes and other matters relating to our workforce; Consolidation of our customer base and formation of group purchasing organizations; unexpected payments to retirement plans for our employees; our inability to obtain the necessary permits or approvals for our products; Failure to comply with applicable regulations that could result in significant costs or the suspension or withdrawal of previously obtained permits or permits; the inability of government agencies to recruit, retain, deploy, or otherwise prevent new or modified products from being timely developed, approved or approved, or commercialized; Disruptions resulting from former President Trump's appeal to the Defense Production Act; our inability to maintain our data management and information technology systems; Data corruption, cyber-based attacks, security breaches and data breaches; our inability to protect and enforce our intellectual property rights or to defend ourselves against intellectual property violations by third parties; Risks associated with changes in income tax laws and regulations; Risks related to our substantial debt; our ability to generate cash flow to service our significant debt obligations; and risks associated with owning our common stock, including being a “controlled company” within the meaning of Nasdaq's corporate governance standards. Except as required by law, we undertake no obligation to update such forward-looking information to reflect actual results or changes in factors that will affect such forward-looking information.

Non-GAAP Financial Measures

This press release contains financial measures such as currency-neutral growth rate, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Free Cash Flow, which are non-GAAP financial measures under applicable rules and regulations of the United States Securities and Exchange Commission. These non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial information prepared in accordance with generally accepted United States accounting standards (GAAP). Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Free Cash Flow eliminate the impact of certain non-cash, unusual, or other items that we do not consider to be an indicator of our ongoing operating performance. Company definitions of these non-GAAP measures may differ from measures with similar titles used by others. The company generally uses these non-GAAP financial measures to facilitate management's financial and operational decisions, including assessing the company's historical operating results, comparing it to competitive operating results, and determining compensation for management incentives. These non-GAAP financial measures reflect an additional view of aspects of the company's business that, when viewed in conjunction with GAAP results and reconciled with corresponding GAAP financial measures, can provide a fuller understanding of the factors and trends that affect the company's business impact. Because non-GAAP financial measures exclude the effect of items that increase or decrease the company's reported results of operations, management strongly recommends that investors review the company's consolidated financial statements and publicly filed reports in full. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the tables accompanying this press release. These reconciliations include, for example, the impact of unrealized exchange rate gains or losses, unusual or non-recurring gains or losses, and discrete chargeable events. We cannot estimate or project these items and they can have a material and unpredictable impact on our results, which are presented in accordance with GAAP. Some columns and rows in tables may not be added due to rounding. The percentages were calculated using actual, non-rounded numbers.

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ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC
Consolidated statement of income
(Unchecked)
(In millions, excluding data per share)
Fiscal first quarter ended
April 4, 2021 March 29, 2020
Net sales $ 506.8 $ 407.9
Cost of sales excluding amortization of intangible assets 248.2 213.2
Gross income 258.6 194.7
Selling, marketing and administration costs 131.5 117.4
Research and development costs 28.9 23.6
Amortization of intangible assets 33.4 33.0
Other operating expenses, net 7.4 8.8
Income from operations 57.4 11.9
Net interest expense 43.4 52.2
Tax exemption income, net (0.2 ) (2.5 )
Other expenses, net 50.0 59.3
Loss before provision for income taxes (35.8 ) (97.1 )
Provision for income taxes 3.3 4.1
Annual deficit $ (39.1 ) $ (101.2 )
Basic and diluted net loss per common share $ (0.19 ) $ (0.69 )
Fundamental and diluted weighted average common stocks outstanding 206.2 146.3
ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC
Consolidated balance sheets
(Unchecked)
(In millions)
April 4, 2021 January 3, 2021
Cash and cash equivalents $ 153.8 $ 132.8
requirements 324.1 318.7
Stocks 291.1 278.7
Other current assets 150.8 127.0
Property, plant and equipment, net 805.6 832.0
Goodwill 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
Settlement liabilities $ 130.3 $ 146.2
accruals 260.9 284.7
Prepaid expenses 34.3 35.5
Current part of the loans 139.4 160.0
Long term loans 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
Equity (deficit) 376.6 (1,010.8 )
Total liabilities and equity (deficit) $ 3,392.5 $ 3,401.5
ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC
Consolidated cash flow statement
(Unchecked)
(In millions)
Fiscal first quarter ended
April 4, 2021 March 29, 2020
Cash generated from operations $ (9.9 ) $ (17.5 )
Cash flow from investing activities (10.7 ) (18.3 )
Cash flow from financing activities 41.1 316.2
Effect of Changes in Exchange Rates on Cash (0.2 ) (2.5 )
Increase in cash 20.3 277.9
Cash, cash equivalents and restricted cash at the beginning of the period 144.2 84.0
Cash, cash equivalents and restricted cash at the end of the reporting period $ 164.5 $ 361.9
April 4, 2021 March 29, 2020
Reconciliation to amounts within the consolidated balance sheet:
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
ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC
Reconciliation from GAAP to non-GAAP results
(Unchecked)
Fiscal first quarter ended
(Dollars to millions) April 4, 2021 March 29, 2020
Annual deficit $ (39.1 ) $ (101.2 )
Net interest expense 43.4 52.2
Provision for income taxes 3.3 4.1
Depreciation 82.7 79.8
Loss in extinguishing debt 50.5 10.0
Share-based payment 3.5 1.6
Restructuring and severance costs (a) 1.3 2.4
Tax exemption income, net (0.2 ) (2.5 )
Exchange rate losses (b) – – 49.3
Other adjustments (c) 6.9 6.3
Adjusted EBITDA $ 152.4 $ 102.0
Fiscal first quarter ended
(Dollars to millions) April 4, 2021 March 29, 2020
Annual deficit $ (39.1 ) $ (101.2 )
Intangible amortization 33.4 33.0
Loss in extinguishing debt 50.5 10.0
Share-based payment 3.5 1.6
Restructuring and severance costs (a) 1.3 2.4
Exchange rate losses (b) – – 49.3
Other adjustments (c) 6.9 6.3
Overall adjustments 95.6 102.6
Tax effect of reconciliation of item (d) (2.0 ) (3.3 )
Discrete tax item (s) 0.3 – –
Adjusted net income (loss) $ 54.9 $ (1.9 )
Adapted basic EPS $ 0.27 $ (0.01 )
Adjusted Diluted EPS $ 0.26 $ (0.01 )

(a) Represents restructuring and severance charges related to several discrete initiatives to bolster operational performance and help build our commercial capabilities, including a plant manufacturing outsourcing project in Rochester, New York, and announced in fiscal year ended January 3, 2016 of a project in the fiscal year ended December 30, 2018 announced that certain production lines would be relocated between the plants.
(b) For the fiscal quarter ended March 29, 2020, this represents non-cash unrealized gains and losses resulting from the revaluation of foreign currency transactions primarily related to intercompany loans. In fiscal 2021, the company initiated programs to mitigate the impact of foreign currency related intercompany loans on our results. As a result, these net non-cash unrealized losses for the fiscal quarter ended April 4, 2021 were approximately $ 22 million. Because we anticipate that these programs will further mitigate the impact in future periods, we will not adjust our Adjusted EBITDA and Adjusted Net Income for non-cash unrealized gains and losses from revaluing foreign currency transactions from the first quarter of the fiscal year 2021.
(c) Represents various other adjustments related to unusual items that affect our results, including the elimination of management fees, non-cash market value (profit) losses on derivatives and certain asset impairments. See information below:

Fiscal first quarter ended
(in million US dollars) April 4, 2021 March 29, 2020
Transitional costs for the EU Medical Device Regulation $ 0.9 $ 1.1
Principal Shareholder Administration Fee 0.8 0.8
Derivative market value losses 0.6 1.0
Other 4.6 3.4
Overall other adjustments $ 6.9 $ 6.3

(d) Non-GAAP adjustments were made for tax purposes due to the nature of the expense and the jurisdiction involved. Many of these are affected by write-downs that have little or no tax implications.

(e) We exclude deferred taxes resulting from changes in tax law and the flow of laws, adjustments for uncertain tax positions and other unusual items unrelated to current operating results.

Fiscal first quarter ended
(in million US dollars) April 4, 2021 March 29, 2020
Cash flow from operating activities – GAAP $ (9.9 ) $ (17.5 )
Adjustments:
Cash flow from investing activities – GAAP (10.7 ) (18.3 )
Unusual or one-time payments 7.5 7.4
Adjusted free cash flow $ (13.1 ) $ (28.4 )

(f) The Company defines free cash flow as the net cash flow from operating activities accounted for under GAAP less the net cash flow used in GAAP accounted investing activities, plus or minus unusual or one-time payments.

ORTHO CLINICAL DIAGNOSTICS HOLDINGS PLC
Reconciliation from GAAP to non-GAAP results
Core and non-core sales and sales by segment
(Unchecked)
The first quarter of the fiscal year ended
4. April,
2021
March 29th,
2020
Percent change Impact on the currency Constant currency growth rate (a)
Core sales $ 499.3 $ 404.3 23.5 %. $ 9.2 21.1 %.
Income that is not part of the core business 7.5 3.6 106.4 %. – – 106.4 %.
Net sales $ 506.8 $ 407.9 24.2 %. $ 9.2 21.8 %.
Segment sales
America $ 321.4 $ 250.5 28.3 %. $ (0.7 ) 28.8 %.
EMEA 68.5 58.7 16.8 %. 4.8 8.2 %.
Greater China 55.0 46.3 18.7 %. 3.7 10.6 %.
Other 61.9 52.4 18.2 %. 1.6 15.1 %.
Net sales $ 506.8 $ 407.9 24.2 %. $ 9.2 21.8 %.

(a) The term “constant currency” means that we have converted our local currency revenue to US dollars for all reporting periods using the same comparable exchange rates. This additional non-GAAP financial information is not to be considered in isolation from or as a substitute for GAAP financial information.