QuidelOrtho Corporation

QuidelOrtho Corporation (Nasdaq: QDEL) supplies diagnostic instruments, tests and related services to laboratories, hospitals and other healthcare providers. Its current business-unit reporting includes Labs, Immunohematology, Point of Care, Donor Screening and Molecular Diagnostics. Instrument placements support recurring sales of testing materials.

November's new operating model will organize the company around Core Diagnostics and Point of Care Diagnostics. The latest results still use the earlier business-unit figures.

Demand and profit in the latest quarter

Labs sales fell to $353.2 million from $373.8 million, with China a major source of weakness. Labs sales outside China grew to $316.3 million from $306.1 million. Immunohematology revenue was unchanged at $142 million. Point of Care sales fell to $119.6 million from $164.6 million as respiratory demand weakened.

Adjusted EBITDA removes interest, taxes, depreciation, amortization and selected charges or gains. The quarter's adjustments included restructuring, asset impairment, employee compensation and amortization of cloud-computing implementation costs. Adjusted EPS has a separate tax reconciliation and diluted share count.

The smaller GAAP loss mainly reflects the comparison with a $700.7 million goodwill impairment in 2025. Adjusted net income declined to $21.2 million from $54.7 million.

Cash generation and borrowing

The company defines free cash flow as operating cash flow less payments for property, plant, equipment, investments and intangibles, plus proceeds from property and equipment sales. Capital purchases fell to $20.4 million in the quarter from $49.2 million. Nine-month free cash flow remained negative $202.8 million, versus negative $169.6 million.

At September 27, cash was $166.4 million. Current and long-term borrowings had a combined carrying value of $2.937 billion, up from $2.650 billion at year-end.

Management reported net debt at 5.2 times trailing-12-month adjusted EBITDA. Its separately defined pro forma debt-leverage ratio under the credit agreement was 4.5 times. A September 23 amendment had already reset covenant limits, including maximum leverage of 5.5 times for measurement quarters through July 2, 2028. It also imposed additional restrictions on transactions and uses of borrowing.

Acquisitions and the next cash test

QuidelOrtho completed its LEX Diagnostics acquisition on April 17. It accounted for the transaction as an asset acquisition, with $174.6 million of total consideration including cash, the carrying basis of its previous investment and contingent consideration. The first-half cash statement records $96.8 million paid, net of acquired cash. An April $100 million delayed-draw borrowing funded the purchase and general corporate purposes.

The annual free-cash-flow forecast was withdrawn in August. November's revenue forecast is $2.52 billion to $2.54 billion. Adjusted EPS narrowed to $0.65–$0.70 from August's $0.65–$0.90. The adjusted EBITDA forecast is $540 million to $545 million, and the new restructuring program targets more than $80 million in annual savings in 2027. The next results will show whether the quarterly cash recovery continues as the company incurs its planned restructuring charges.