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What changed in QuidelOrtho Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of QuidelOrtho Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+440 added−450 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in QuidelOrtho Corp's 2025 10-K

440 paragraphs added · 450 removed · 346 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

122 edited+21 added−33 removed98 unchanged
Biggest changeThese directives require that personal data is processed and managed with the utmost care, respecting the rights and dignity of individuals, and promote data security measures to protect against data breaches, cyber-attacks and unauthorized access to personal information; • self-regulatory standards that privacy advocacy groups, the technology industry and other industries have established or may establish and various new, additional or different self-regulatory standards that may place additional burdens on us.
Biggest changeThese directives require that personal data is processed and managed with the utmost care, respecting the rights and dignity of individuals, and promote data security measures to protect against data breaches, cyber-attacks and unauthorized access to personal information; • enacted or considered legislation similar to the above in other countries around the world, in which we do business, including Brazil’s General Data Protection Law ( Lei Geral de Proteção de Dados Pessoais ), Chile’s Personal Data Protection Law, Mexico’s Federal Law on Protection of Personal Data Held by Private Parties ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ) and Panama’s Personal Data Protection Law ( Ley sobre Protección de Datos Personales ), which impose requirements for processing personal data about persons in those jurisdictions; and • self-regulatory standards that privacy advocacy groups, the technology industry and other industries have established or may establish and various new, additional or different self-regulatory standards that may place additional burdens on us.
In the Asia Pacific region, which includes China, Japan and India, our employees support sales and marketing activities, primarily for the Point of Care, Labs and Transfusion Medicine business units. In addition, we have created shared service centers in Shanghai, China and Hyderabad, India to support general and administrative, technical support and customer service functions.
In China and the Asia Pacific region, which includes Japan and India, our employees support sales and marketing activities, primarily for the Point of Care, Labs and Transfusion Medicine business units. In addition, we have created shared service centers in Shanghai, China and Hyderabad, India to support general and administrative, technical support and customer service functions.
Specific health-care laws and regulations that we may be subject to include: • the federal Physician Self-Referral Law, which prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, and prohibits the entity from presenting or causing to be presented claims to Medicare for those referred services; • the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, where one purpose is to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as Medicare and Medicaid.
Specific health-care laws and regulations that we may be subject to include: • the federal Physician Self-Referral Law, which prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, and prohibits the entity from presenting or causing to be presented claims to Medicare for those referred services; • the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, where one purpose is to induce either the referral of an 18 individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as Medicare and Medicaid.
In light of these changing requirements, we could suffer additional costs, complaints, regulatory investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the 20 manner in which we provide our services and the geographic location or segregation of our relevant systems and operations, which could adversely affect our financial results, including because we rely on third parties in other countries; • evolving privacy laws on cookies and e-marketing.
In light of these changing requirements, we could suffer additional costs, complaints, regulatory investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services and the geographic location or segregation of our relevant systems and operations, which could adversely affect our financial results, including because we rely on third parties in other countries; • evolving privacy laws on cookies and e-marketing.
Our principal trademarks and the products they cover are discussed above in the section entitled “Business Units and Products.” Under many of our contractual agreements that involve the sale of our products, we have agreed to indemnify the counterparty against costs and liabilities arising out of any patent infringement claims and other intellectual property claims asserted by a third party attributable to our products sold under those agreements.
Our principal trademarks and the products they cover are discussed above in the section entitled “Business Units and Products.” 22 Under many of our contractual agreements that involve the sale of our products, we have agreed to indemnify the counterparty against costs and liabilities arising out of any patent infringement claims and other intellectual property claims asserted by a third party attributable to our products sold under those agreements.
This service offering provides actionable insights into demand for new products, services and workflow. • Global Technical Solution Center−Seven technical solution centers delivering first-line support in over 15 languages, meaning we can resolve service issues remotely without an on-site visit approximately two-thirds of the time. • Smart Service Mobile App−First-in-class technology enabled on iPhone and Android devices that allows our service teams to receive up-to-date analyzer health checks, proactive alerts and performance monitoring to help achieve the highest levels of reliability. • Training and Education−Flexible educational resources for the lifetime of the customer relationship, including virtual technical training, continuing education and professional development. • Smart Start−Concierge implementation program led by certified project managers.
This service offering provides actionable insights into demand for new products, services and workflow. • Global Technical Solution Center−Five technical solution centers delivering first-line support in over 15 languages, meaning we can resolve service issues remotely without an on-site visit approximately two-thirds of the time. • Smart Service Mobile App−First-in-class technology enabled on iPhone and Android devices that allows our service teams to receive up-to-date analyzer health checks, proactive alerts and performance monitoring to help achieve the highest levels of reliability. • Training and Education−Flexible educational resources for the lifetime of the customer relationship, including virtual technical training, continuing education and professional development. • Smart Start−Concierge implementation program led by certified project managers.
We also utilize specialized equipment for the lyophilization of reagents, cell culture growth, protein purification and a variety of automation for dispensing of antibodies, reagents and solutions. This facility is certified to ISO 13485:2016 and MDSAP medical device standards. Packaging, warehousing and shipping logistics with cold chain storage capability are handled at this facility.
We also utilize specialized equipment for the lyophilization of reagents, cell culture growth, protein purification and a variety of automation methods for dispensing of antibodies, reagents and solutions. This facility is certified to ISO 13485:2016 and MDSAP medical device standards. Packaging, warehousing and shipping logistics with cold chain storage capability are handled at this facility.
Our manufacturing facilities have passed routine regulatory inspections 14 confirming compliance with the QMS regulatory requirements. Our facilities are registered with various regulatory bodies, including the FDA and other international and local public health and regulatory agencies. Suppliers and Raw Materials We obtain raw materials from reputable outside suppliers and believe our business relationships with them are good.
Our manufacturing facilities have passed routine regulatory inspections confirming compliance with the QMS regulatory requirements. Our facilities are registered with various regulatory bodies, including the FDA and other international and local public health and regulatory agencies. Suppliers and Raw Materials We obtain raw materials from reputable outside suppliers and believe our business relationships with them are good.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Regulations Outside of the U.S.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. 17 Regulations Outside of the U.S.
In addition, modifications or enhancements for existing products that could significantly affect their safety or effectiveness or constitute a major change in the intended use of the device, will require new submissions to the FDA. Class III devices require approval of a PMA application evidencing safety and effectiveness of the device.
In addition, modifications or enhancements for existing products that could significantly affect their safety or effectiveness or constitute a 15 major change in the intended use of the device, will require new submissions to the FDA. Class III devices require approval of a PMA application evidencing safety and effectiveness of the device.
This facility supports the manufacturing of our molecular nucleic acid amplification products, our living tissue cell culture and antibody-based products, as well as our enzyme linked immunosorbent assays (“ELISA”). We use a wide variety of biological and chemical supplies in our manufacturing processes.
This facility supports the manufacturing of our molecular nucleic acid amplification products, our living tissue cell culture and antibody-based products, as well as our enzyme linked immunosorbent assays (“ELISA”). We use a wide variety of biological and chemical supplies in 13 our manufacturing processes.
The PIPL provides the legality of personal information processing and the basic requirements of notice and consent, sets out data localization requirements for CIIOs and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities, and provides a list of rules for transferring personal information outside of China.
The PIPL provides the legality of personal information processing and the basic requirements of notice and consent, sets out data localization requirements for CIIOs and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities, and provides a list of rules for transferring personal information 20 outside of China.
These arrangements are often entered into in order to share risks and rewards related to a specific program or product. Our collaborative arrangements include a number of ongoing relationships for test development, instrument development and automation track design and distribution.
These arrangements are often entered 14 into in order to share risks and rewards related to a specific program or product. Our collaborative arrangements include a number of ongoing relationships for test development, instrument development and automation track design and distribution.
Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which imposes certain procedural and 17 documentation requirements upon us and our third-party manufacturers.
Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which imposes certain procedural and documentation requirements upon us and our third-party manufacturers.
Regulations of Medical Devices The testing, manufacture and commercialization of the majority of our diagnostics products and analyzers in the U.S. are subject to regulation by numerous governmental authorities, principally the FDA as medical devices and corresponding state regulatory agencies. Pursuant to the U.S.
Regulations of Medical Devices The testing, manufacture and commercialization of the majority of our diagnostics products and analyzers in the U.S. are subject to regulation by numerous governmental authorities, principally the FDA as medical devices and corresponding state regulatory agencies.
We sell products globally and market and distribute products worldwide in a variety of ways, including through a mix of direct, indirect and hybrid distribution strategies. Across our global footprint, we operate a region-specific sales model.
We sell products globally and market and distribute products worldwide in a variety of ways, including through a mix of direct, indirect and hybrid distribution strategies. 12 Across our global footprint, we operate a region-specific sales model.
Our highly valued suite of solutions include: • Guarantee 98% up-time to our e-connected U.S. customers−High instrument reliability and a proactive maintenance program. • E-CONNECTIVITY Remote Monitoring Software−More than 80% of our installed base of Vitros 5600, XT 7600 and ORTHO VISION platforms are e-connected, enabling remote monitoring and improved analyzer availability. • ValuMetrix−A highly valued consulting service proven to increase laboratory workflow, productivity and laboratory service levels utilizing lean principles and process excellence.
Our highly valued suite of solutions include: • Guarantee 98% up-time to our e-connected U.S. customers−High instrument reliability and a proactive maintenance program. • E-CONNECTIVITY Remote Monitoring Software−More than 75% of our installed base of VITROS 5600, XT 7600 and ORTHO VISION platforms are e-connected, enabling remote monitoring and improved analyzer availability. • ValuMetrix−A highly valued consulting service proven to increase laboratory workflow, productivity and laboratory service levels utilizing lean principles and process excellence.
Information concerning revenues attributable to our reportable segments and business units is set forth in Part II, Item 8, “Financial Statements and Supplementary Data—Note 4. Revenue” and “Financial Statements and Supplementary Data—Note 5.
Information concerning revenues attributable to our reportable segments and business units is set forth in Part II, Item 8, “Financial Statements and Supplementary Data—Note 4. Revenue” and “—Note 5.
Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA; • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; • the federal Physician Payments Sunshine Act which requires certain applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under certain federal healthcare programs, to monitor and report to CMS, certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers, including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices, and regulates device marketing; • U.S. federal consumer protection and unfair competition laws, which broadly regulate marketplace activities that potentially harm customers; and • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to item or services reimbursed by any third-party payor, including commercial insurers; state laws requiring device companies to comply with specific compliance standards, restrict payments made to healthcare providers and other potential referral sources, and report information related to payments and other transfers of value to healthcare 19 providers or marketing expenditures and state laws related to insurance fraud in the case of claims involving private insurers.
Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA; • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; • the federal Physician Payments Sunshine Act which requires certain applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under certain federal healthcare programs, to monitor and report to CMS, certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers, including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices, and regulates device marketing; • U.S. federal consumer protection and unfair competition laws, which broadly regulate marketplace activities that potentially harm customers; and • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to item or services reimbursed by any third-party payor, including commercial insurers; state laws requiring device companies to comply with specific compliance standards, restrict payments made to healthcare providers and other potential referral sources, and report information related to payments and other transfers of value to healthcare providers or marketing expenditures and state laws related to insurance fraud in the case of claims involving private insurers.
We believe we are well positioned to drive sustained and profitable growth through an ethos of customer-centric decision making and behavior, which informs everything we do from product development to commercial execution. This disciplined focus on serving customers has resulted in, and we believe will continue to create, a business model that can deliver profitable growth and shareholder returns.
We believe we are well positioned to drive sustained and profitable growth through an ethos of customer-centric decision making and behavior, which informs everything we do from product development to commercial execution. This disciplined focus on serving customers has resulted in, and we believe will continue to create, a business model that can deliver profitable growth and stockholder returns.
Segment and Geographic Information.” Business Units and Products We provide diagnostic testing solutions under various brand names, including, among others, the following: AdenoPlus ™ , BIOVUE ® , FreshCells ™ , InflammaDry ® , Lyra ® , MeterPro ® , MicroVue ™ , Ortho ® , Ortho Clinical Diagnostics ® , Ortho Connect ™ , Ortho Plus ® , Ortho Vision ® , QuickVue, Quidel ® , QuidelOrtho ™ , QVue ™ , Savanna ® , Sofia ® , Solana ® , Thyretain ® , Triage ® , Virena ® and Vitros ® .
Segment and Geographic Information.” Business Units and Products We provide diagnostic testing solutions under various brand names, including, among others, the following: AdenoPlus ™ , BIOVUE ® , FreshCells ™ , InflammaDry ® , Lyra ® , MeterPro ® , MicroVue ™ , Ortho ® , Ortho Clinical Diagnostics ® , Ortho Connect ® , Ortho Optix ™ , Ortho Plus ® , ORTHO VISION ® , QuickVue ® , Quidel ® , QuidelOrtho ™ , QVue ™ , Savanna ® , Sofia ® , Solana ® , Thyretain ® , Triage ® , ValuMetrix ® , Virena ® and VITROS ® .
Approximately 15% of our associates globally are covered by a union, collective bargaining agreement or works council, including associates in Austria, Belgium, Brazil, France, Germany, Italy, Spain, Sweden and the U.K. To date, we have experienced no work stoppages and believe that our employee relations are good.
Approximately 16% of our associates globally are covered by a union, collective bargaining agreement or works council, including associates in Austria, Belgium, Brazil, France, Germany, Italy, Spain, Sweden and the U.K. To date, we have experienced no work stoppages and believe that our employee relations are good.
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications and intended uses.
Some of our principal competitors include, among others, Abbott Laboratories, Roche, Thermo Fisher Scientific, Danaher, Siemens Healthineers, Diasorin, Bio-Rad, Hologic, Qiagen, bioMérieux and Revitty. Some of these competitors have substantially greater financial, marketing and other resources than we have.
Some of our principal competitors include, among others, Abbott Laboratories, Roche, Thermo Fisher Scientific, Danaher, Siemens Healthineers, Diasorin, Bio-Rad, Hologic, Qiagen, Becton-Dickinson, bioMérieux and Revitty. Some of these competitors have substantially greater financial, marketing and other resources than we have.
Where no supplementary measure is suitable, the data exporter shall avoid, suspend or terminate the transfer. With regard to the transfer of data from the EEA to the U.S., on July 10, 2023, the European Commission adopted its adequacy decision for the E.U.-U.S. Data Privacy Framework.
Where no supplementary measure is suitable, the data exporter shall avoid, suspend or terminate the transfer. With regard to the transfer of data from the EEA to the U.S., on July 10, 2023, the European Commission adopted its adequacy decision for the EU-U.S. Data Privacy Framework.
An IND is a request for authorization from the FDA to administer an investigational new drug product to humans; • approval by an Institutional Review Board or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a Biologics License Application (“BLA”) after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is to be produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the U.S.
An IND is a request for authorization from the FDA to administer an investigational new drug or biologic IVD product to humans and human specimens; • approval by an Institutional Review Board or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic IVD product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is to be produced to assess compliance with cGMPs and to assure that the facilities, methods and 16 controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the U.S.
It is focused on automating a number of repetitive manual tasks such as sample auto-validation, quality control management, moving averages, STAT sample management, sample archiving, and the development and deployment of advanced rules to help laboratories easily manage their patient populations Vitros Automation Solutions A flexible and scalable track-based system that combines Vitros analyzers with a number of robotic modules to help laboratories enhance their operations by reducing or eliminating repetitive and redundant laboratory tasks and the total number of human interventions required to complete typical laboratory testing Testing Menu Anemia, Bone Disease, Cardiac, Diabetes, Drugs of Abuse, General Chemistry, Hepatic, Immunosuppressant Drugs, Infectious Diseases, Inflammatory, Lipids, Nutritional Assessment, Oncology, Pancreatic, Prenatal, Renal, Reproductive Endocrinology, Respiratory, Sepsis, Spinal, Therapeutic Drug Monitoring, Thyroid/Metabolic, Toxicology, Urine 7 MOLECULAR DIAGNOSTICS Product Primary Application Lyra Open platform, real-time PCR assays for high throughput, high quality molecular testing to detect and identify infectious diseases, offering room-temperature storage, reduced processing time, and ready-to-use reagent configurations Solana Simplified molecular testing platform using our proprietary isothermal helicase-dependent amplification technology that is easy to run and can process 12 patient samples at the same time Savanna CE-marked, 510(k) approved, multiplex, real-time PCR platform, with customizable flexible syndromic panels that run up to 12 unique analytes from a single patient sample in less than 25 minutes Savanna RVP4 assay offers simultaneous qualitative detection and differentiation of influenza A, influenza B, respiratory syncytial virus (“RSV”), and SARS-CoV-2 RNA isolated from human nasal or nasopharyngeal swabs Testing Menu Respiratory Adenovirus, Bordetella Pertussis, Influenza A+B, Parainfluenza Virus, RSV, Respiratory Viral Panel (Flu A+B, RSV, hMPV), Respiratory Viral Panel 4 (Flu A+B), SARS-CoV-2, Strep A, Strep Complete Non-respiratory Clostridium Difficile (organism), HSV 1+2/VZV, Group Strep B, Trichomonas 8 POINT OF CARE Product Primary Application Rapid Immunoassay Sofia and Sofia 2 Easy-to-use, rapid testing using lateral-flow technology and advanced fluorescent immunoassay (“FIA”) chemistry Combines unique software and Sofia FIA tests to yield automatic, objective results that are readily available on the instrument’s screen, in a hard-copy printout and in a transmissible electronic form that can network via a lab information system to hospital and medical center databases Different operational modes to accommodate both small and large laboratories, as well as other features designed to facilitate use in a variety of healthcare settings, including hospitals, medical centers and small clinics Sofia 2 systems include additional benefits and features, such as enhanced optics for improved performance and speed, at a cost point that better addresses the lower-volume segment of the diagnostic testing market QuickVue Broad portfolio of rapid, visually read, lateral flow immunoassay products to diagnose a wide variety of infectious diseases and medical conditions, including the QuickVue At-Home OTC COVID-19 test, a leading at-home COVID-19 product available through many retail and online outlets InflammaDry and AdenoPlus Rapid, lateral-flow-based POC products for the detection of infectious and inflammatory diseases and conditions of the eye Cardiometabolic Immunoassay Triage and Triage MeterPro Portable, rapid testing platform offering a comprehensive menu of tests for diagnosis of critical diseases and health conditions, as well as the detection of certain drugs of abuse Aids in the diagnosis, assessment and risk stratification of patients having critical care issues, including congestive heart failure, acute coronary syndromes and acute myocardial infarction, which may reduce hospital admissions and potentially improve clinical and economic outcomes Triage B-type Natriuretic Peptide (“BNP”) test for use on Beckman Coulter (“Beckman”) lab analyzers (“BNP Business”) in connection with the transition of the BNP Business to Beckman Testing Menu Cardiac BNP, NT-proBNP, Creatine Kinase-MB, D-Dimer, hsTroponin, Myoglobin, Troponin I ES Drugs of Abuse Amphetamines, Barbiturates, Benzodiazepines, Cocaine, Methadone Metabolite (EDDP), Methamphetamines, Opiates, PCP, THC/Cannabinoids, Tricyclic Antidepressants Eye Health Acute Conjunctivitis, MMP-9 (a key inflammatory marker for dry eye) Respiratory Infectious Diseases Anti-SARS-CoV-2 IgG, Influenza A+B, Influenza A+B & SARS-CoV-2 Ag, RSV, Strep A Non-respiratory Infectious Diseases Adenoviral Conjunctivitis, Campylobacter, Chlamydia, Clostridium Difficile (organism), H. pylori Ab, H. pylori Ab (stool), Legionella, Lyme Disease, S. pneumoniae Inflammatory Lactoferrin Oncology Colorectal Cancer Reproductive Endocrinology Human Chorionic Gonadotrophin, Placental Growth Factor 9 TRANSFUSION MEDICINE Product Primary Application Immunohematology ORTHO VISION Platform Flagship immunohematology analyzers that automate blood typing, antibody identification and crossmatching for patient and donor blood banks Models include ORTHO VISION, ORTHO VISION Max, and next-generation ORTHO VISION Swift and ORTHO VISION Swift Max, which are designed to be faster, quieter and even more cyber-secure than previous generations Ortho Workstation Semi-automated immunohematology benchtop analyzer for lower-volume blood centers or centers that need semi-automated testing Ortho Optix Semi-automated testing platform used to read manual test results, designed with improved software and ability to integrate with laboratory information systems and offers improved workflow and 99% concordance with ORTHO VISION test results ID-Micro Typing System (ID-MTS) Gel Cards Test consumables that utilize column agglutination technology (“CAT”) for our immunohematology instruments sold in the U.S., designed to provide reliable test results and simplify test workflow BIOVUE Cassettes Test consumables that utilize CAT for our immunohematology instruments sold outside of the U.S., designed to provide reliable test results and simplify test workflow Ortho Sera Reagents Comprehensive immunohematology test menu that we believe covers more than 99% of most tested blood antigens regularly required for transfusion screening globally Donor Screening ORTHO VERSEIA Integrated Processor (“VIP”) Automated pipetting and processing system that combines the ORTHO VERSEIA pipettor and ORTHO Summit Processor to enable end-to-end pipetting and processing for tests used for blood and plasma screening for infectious diseases Donor Testing Serology Comprehensive set of infectious disease screens, including important tests for tropical diseases like Chagas that are critical for care in emerging markets Global Services In addition to the products we provide, our services are a critical element of how we deliver value to our customers.
It is focused on automating a number of repetitive manual tasks such as sample auto-validation, quality control management, moving averages, STAT sample management, sample archiving, and the development and deployment of advanced rules to help laboratories easily manage their patient populations VITROS Automation Solutions A flexible and scalable track-based system that combines VITROS analyzers with a number of robotic modules to help laboratories enhance their operations by reducing or eliminating repetitive and redundant laboratory tasks and the total number of human interventions required to complete typical laboratory testing Testing Menu Anemia, Bone Disease, Cardiac, Diabetes, Drugs of Abuse, General Chemistry, Hepatic, Immunosuppressant Drugs, Infectious Diseases, Inflammatory, Lipids, Nutritional Assessment, Oncology, Pancreatic, Prenatal, Renal, Reproductive Endocrinology, Respiratory, Sepsis, Spinal, Therapeutic Drug Monitoring, Thyroid/Metabolic, Toxicology, Urine 7 MOLECULAR DIAGNOSTICS Product Primary Application Lyra Open platform, real-time PCR assays for high throughput, high quality molecular testing to detect and identify infectious diseases, offering room-temperature storage, reduced processing time, and ready-to-use reagent configurations Solana Simplified molecular testing platform using our proprietary isothermal helicase-dependent amplification technology that is easy to run and can process 12 patient samples at the same time Savanna CE-marked, 510(k) approved, multiplex, real-time PCR platform, with customizable flexible syndromic panels that run up to 12 unique analytes from a single patient sample in less than 25 minutes Savanna RVP4 assay offers simultaneous qualitative detection and differentiation of influenza A, influenza B, RSV, and SARS-CoV-2 RNA isolated from human nasal or nasopharyngeal swabs Testing Menu Respiratory Adenovirus, Bordetella Pertussis, Influenza A+B, Parainfluenza Virus, RSV/hMPV, Respiratory Viral Panel 4 (SARS-CoV-2, RSV, Flu A+B), SARS-CoV-2, Strep A, Strep Complete Non-respiratory Clostridium Difficile (organism), HSV 1+2/VZV, Group Strep B, Trichomonas 8 POINT OF CARE Product Primary Application Rapid Immunoassay Sofia and Sofia 2 Easy-to-use, rapid testing using lateral-flow technology and advanced fluorescent immunoassay (“FIA”) chemistry Combines unique software and Sofia FIA tests to yield automatic, objective results that are readily available on the instrument’s screen, in a hard-copy printout and in a transmissible electronic form that can network via a lab information system to hospital and medical center databases Different operational modes to accommodate both small and large laboratories, as well as other features designed to facilitate use in a variety of healthcare settings, including hospitals, medical centers and small clinics Sofia 2 systems include additional benefits and features, such as enhanced optics for improved performance and speed, at a cost point that better addresses the lower-volume segment of the diagnostic testing market QuickVue Broad portfolio of rapid, visually read, lateral flow immunoassay products to diagnose a wide variety of infectious diseases and medical conditions, including the QuickVue At-Home OTC COVID-19 test, a leading at-home COVID-19 product available through many retail and online outlets InflammaDry and AdenoPlus Rapid, lateral-flow-based POC products for the detection of infectious and inflammatory diseases and conditions of the eye Cardiometabolic Immunoassay Triage and Triage MeterPro Portable, rapid testing platform offering a comprehensive menu of tests for diagnosis of critical diseases and health conditions, as well as the detection of certain drugs of abuse Aids in the diagnosis, assessment and risk stratification of patients having critical care issues, including congestive heart failure, acute coronary syndromes and acute myocardial infarction, which may reduce hospital admissions and potentially improve clinical and economic outcomes Testing Menu Cardiac BNP, NT-proBNP, Creatine Kinase-MB, D-Dimer, hsTroponin, Myoglobin, Troponin I ES Drugs of Abuse Amphetamines, Barbiturates, Benzodiazepines, Cocaine, Methadone Metabolite (EDDP), Methamphetamines, Opiates, PCP, THC/Cannabinoids, Tricyclic Antidepressants Eye Health Acute Conjunctivitis, MMP-9 (a key inflammatory marker for dry eye) Respiratory Infectious Diseases Influenza A+B, Influenza A+B & SARS-CoV-2 Ag, RSV, Strep A, SARS-CoV-2 Ag Non-respiratory Infectious Diseases Adenoviral Conjunctivitis, Chlamydia, Clostridium Difficile (organism), Legionella, Lyme Disease, S. pneumoniae Oncology Colorectal Cancer Reproductive Endocrinology Human Chorionic Gonadotrophin, Placental Growth Factor 9 TRANSFUSION MEDICINE Product Primary Application Immunohematology ORTHO VISION Platform Flagship immunohematology analyzers that automate blood typing, antibody identification and crossmatching for patient and donor blood banks Models include ORTHO VISION, ORTHO VISION Max, and next-generation ORTHO VISION Swift and ORTHO VISION Swift Max, which are designed to be faster, quieter and even more cyber-secure than previous generations Ortho Workstation Semi-automated immunohematology benchtop analyzer for lower-volume blood centers or centers that need semi-automated testing Ortho Optix Semi-automated testing platform used to read manual test results, designed with improved software and ability to integrate with laboratory information systems and offers improved workflow and 99% concordance with ORTHO VISION test results ID-Micro Typing System (ID-MTS) Gel Cards Test consumables that utilize CAT for our immunohematology instruments sold in the U.S., designed to provide reliable test results and simplify test workflow BIOVUE Cassettes Test consumables that utilize CAT for our immunohematology instruments sold outside of the U.S., designed to provide reliable test results and simplify test workflow Ortho Sera Reagents Comprehensive immunohematology test menu that we believe covers more than 99% of most tested blood antigens regularly required for transfusion screening globally Donor Screening VIP Automated pipetting and processing system that combines the ORTHO VERSEIA pipettor and ORTHO Summit Processor to enable end-to-end pipetting and processing for tests used for blood and plasma screening for infectious diseases Donor Testing Serology Comprehensive set of infectious disease screens, including important tests for tropical diseases like Chagas that are critical for care in emerging markets Global Services In addition to the products we provide, our services are a critical element of how we deliver value to our customers.
The U.S. government has interpreted this law broadly to apply to the marketing and sales activities of medical device manufacturers; • the federal civil and criminal false claims laws, including the False Claims Act (“FCA”), which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent.
The U.S. government has interpreted this law broadly to apply to the marketing and sales activities of medical device manufacturers; • the federal civil and criminal false claims laws, including the FCA, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent.
Specific privacy, data security and data protection laws that we and our customers may be subject to include: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, which imposes, among other things, privacy, data security and security breach reporting obligations with respect to protected health information (“PHI”) on covered entities and business associates.
Specific privacy, data security and data protection laws that we and our customers may be subject to include: • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, which imposes, among other things, privacy, data security and security breach reporting obligations with respect to PHI on covered entities and business associates.
The information contained on or connected to our website is not deemed to be incorporated by reference into this Annual Report or filed with or furnished to the SEC and should not be considered part of this Annual Report. 25
The information contained on or connected to our website is not deemed to be incorporated by reference into this Annual Report or filed with or furnished to the SEC and should not be considered part of this Annual Report. 24
Many of the immunoassay products manufactured at these facilities are packaged and shipped by a local third party. Our Summers Ridge, San Diego, California facility consists of laboratories that are involved in mammalian cell culture, bacterial fermentation, protein purification and modification, as well as other techniques involved in immunoassay reagent manufacturing.
Many of the immunoassay products manufactured at this facility are packaged and shipped by a local third party. Our Summers Ridge, San Diego, California facility consists of laboratories that are involved in mammalian cell culture, bacterial fermentation, protein purification and modification, as well as other techniques involved in immunoassay reagent manufacturing.
These include: ◦ China’s Cybersecurity Law, including data localization requirements that require operators of critical information infrastructure (“CIIOs”) to store personal information and important data collected and generated from the critical information infrastructure within China.
These include: ◦ China’s Cybersecurity Law, including data localization requirements that require operators of CIIOs to store personal information and important data collected and generated from the critical information infrastructure within China.
The U.K.-U.S. Data Bridge recognizes the U.S. as offering an adequate level of data protection where the transfer is to a U.S. company participating in the E.U.-U.S. Data Privacy Framework and the U.K. Extension.
The U.K.-U.S. Data Bridge recognizes the U.S. as offering an adequate level of data protection where the transfer is to a U.S. company participating in the EU-U.S. Data Privacy Framework and the U.K. Extension.
Our marketing strategy is focused on ensuring that our key product portfolios are supported by clinical validation and health economic and outcomes research that show that our tests deliver fast, high-quality results, are cost-effective to use with lower total cost of ownership, and improve patient outcomes.
Our marketing strategy is focused on efforts to demonstrate that our key product portfolios are supported by clinical validation and health economic and outcomes research that show that our tests deliver fast, high-quality results, are cost-effective to use with lower total cost of ownership, and improve patient outcomes.
Failure to do so can result in fines of up to RMB 100,000 for the relevant entity as well as for the personnel directly responsible; ◦ China’s Data Security Law (“Data Security Law”), which became effective on September 1, 2021, and applies extraterritorially and to a broad range of activities that involve “data” (not only personal or sensitive data).
Failure to do so can result in, among other penalties, fines of up to RMB 500,000 for the relevant entity as well as RMB 100,000 for the personnel directly responsible; ◦ China’s Data Security Law (“Data Security Law”), which became effective on September 1, 2021, and applies extraterritorially and to a broad range of activities that involve “data” (not only personal or sensitive data).
We balance our R&D efforts against our R&D team’s capacity, development timelines and overall cost. Our R&D team is comprised of a balanced mix of experienced professionals with years of experience in the diagnostics industry and recently trained technologists, and together, they have know-how and technical capabilities in key areas, such as biomedical science, information technology (“IT”) and engineering.
We balance our R&D efforts against our R&D team’s capacity, development timelines and overall cost. Our R&D team is comprised of a balanced mix of experienced professionals with years of experience in the diagnostics industry and recently trained technologists, and together, they have know-how and technical capabilities in key areas, such as biomedical science, IT and engineering.
Any biologics manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Any biologic IVDs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Over our more than 80 years supporting the IVD testing needs of our customers, we have developed deep and enduring relationships with our customers. Our service program allows us to retain and grow our customer base by providing an industry-leading customer experience driven by quality of service, innovation and access to a diverse product portfolio. 2.
Over our more than 80 years supporting the IVD testing needs of our customers, we have developed deep and enduring relationships with our customers. Our service program allows us to retain and grow our customer base by providing an industry-leading customer experience driven by quality of service, innovation and access to a diverse product portfolio. • Strong commercial footprint.
Failure to comply with PIPL can result in fines of up to RMB 50 million or 5% of the prior year’s total annual revenue for the personal information processor and/or a suspension of services or data processing activities, among other fines and criminal liabilities, including ones that can be placed on responsible personnel; and ◦ several regulations and draft regulations for public comments, promulgated by the People’s Republic of China, which are designed to provide further supplemental guidance in accordance with the laws mentioned above; • Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”), which governs data protection in the private sector with specific requirements around health privacy and consumer protection.
Failure to comply with PIPL can result in fines of up to RMB 50 million or 5% of the prior year’s total annual revenue for the personal information processor and/or a suspension of services or data processing activities, among other fines and criminal liabilities, including ones that can be placed on responsible personnel; and ◦ several regulations and draft regulations for public comments, promulgated by China, which are designed to provide further supplemental guidance in accordance with the laws mentioned above; • Canada’s PIPEDA, which governs data protection in the private sector with specific requirements around health privacy and consumer protection.
The competitive strengths that serve as our foundation of success today and can drive future growth include four key aspects, all of which benefit from our talented people and loyal customers: 1. Superior customer experience and brand loyalty.
The competitive strengths that serve as our foundation of success today and can drive future growth include three key aspects, all of which benefit from our talented people and loyal customers: • Superior customer experience and brand loyalty.
Diversity, Equity and Inclusion Our employees are one of our most important assets and set the foundation for our ability to achieve our strategic objectives, drive operational execution, deliver strong financial performance, advance innovation, and maintain our quality and compliance programs.
Inclusion and Belonging Our employees are one of our most important assets and set the foundation for our ability to achieve our strategic objectives, drive operational execution, deliver strong financial performance, advance innovation, and maintain our quality and compliance programs.
The amount of time required to obtain necessary approvals varies from that required for FDA clearance or approval. In many foreign countries, pricing and reimbursement approvals are also required. Our initial focus for obtaining marketing approval outside the U.S. is typically in the European Union (“EU”), Australia, Brazil, Canada, China, Japan and the U.K.
The amount of time required to obtain necessary approvals varies from that required for FDA clearance or approval. In many foreign countries, pricing and reimbursement approvals are also required. Our initial focus for obtaining marketing approval outside the U.S. is typically in the EU, Australia, Brazil, Canada, China, Japan and the U.K.
It generally takes from three months to one year to obtain clearance, but may take longer. A premarket approval (“PMA”) application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically including the results of clinical investigations, bench tests and reference laboratory studies.
It generally takes from three months to one year to obtain clearance, but may take longer. A PMA application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically including the results of clinical investigations, bench tests and reference laboratory studies.
Our Strategic Capabilities and Competitive Strengths There is significant competition in the development and marketing of in vitro diagnostic (“IVD”) products, and innovation, product development, regulatory clearance to market and commercial introduction of new IVD technologies can occur rapidly.
Our Strategic Capabilities and Competitive Strengths There is significant competition in the development and marketing of IVD products, and innovation, product development, regulatory clearance to market and commercial introduction of new IVD technologies can occur rapidly.
In the E.U., regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive will be replaced by an E.U. regulation known as the ePrivacy Regulation.
In the EU, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive will be replaced by an EU regulation known as the ePrivacy Regulation.
We plan to expand upon the foundation of diversity and inclusion by incorporating other inclusive behaviors into these core behaviors and providing training to support all of our employees in being authentic in their self-expression and open to the self-expression of others.
We plan to expand upon the foundation of these core behaviors by incorporating other inclusive behaviors and providing training to support all of our employees in being authentic in their self-expression and open to the self-expression of others.
Data Protection Act 2018, which govern the processing of personal data in those jurisdictions, and could result in significant fines (up to the greater of €20 million / £17.5 million or 4% of total worldwide annual turnover of the preceding financial year), regulatory investigations, reputational damage, orders to cease or change our processing of our data, enforcement notices or assessment notices (for a compulsory audit), civil claims including representative actions and other class action type litigation; • E.U. and U.K. rules with respect to cross-border transfers of personal data out of the European Economic Area (the “EEA”) and the U.K., respectively, which are in flux, including in light of a decision by the Court of Justice of the E.U. invalidating the E.U.-U.S.
Data Protection Act 2018, which govern the processing of personal data of persons in those jurisdictions, and could result in significant fines (up to the greater of €20 million / £17.5 million or 4% of total worldwide annual turnover of the preceding financial year), regulatory investigations, reputational damage, orders to cease or change our processing of personal data, enforcement notices or assessment notices (for a compulsory audit), civil claims including representative actions and other class action type litigation; • EU and U.K. rules with respect to cross-border transfers of personal data out of the EEA and the U.K., respectively, which are in flux, including in light of a decision by the Court of Justice of the EU invalidating the EU-U.S.
Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of cGMPs for medical devices known as the Quality System Regulation (“QSR”) facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising and promotional materials.
Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of cGMPs for medical devices known as the QSR facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising and promotional materials.
The compliance deadlines for the EU MDR and EU IVDR were May 2021 and May 2022, respectively. The transition period provided for in the EU MDR for existing certifications issued under the previous Medical Devices Directive will end on May 26, 2024.
The compliance deadlines for the EU MDR and EU IVDR were May 2021 and May 2022, respectively, and the transition period provided for in the EU MDR for existing certifications issued under the previous Medical Devices Directive ended on May 26, 2024.
Under the Data Security Law, entities and individuals carrying out data activities must abide by various data security obligations, including implementing the appropriate level of protective measures for each respective class of data and storing data locally in China (or in compliance with certain data transfer restrictions); ◦ China’s Personal Information Protection Law (“PIPL”), which is similar to the GDPR and also applies extraterritorially.
Under the Data Security Law, entities and individuals carrying out data activities must abide by various data security obligations, including implementing the appropriate level of protective measures for each respective class of data and storing data locally in China (or in compliance with certain data transfer restrictions); ◦ China’s PIPL, which is similar to the GDPR and also applies extraterritorially.
Solely for convenience, in some cases, the trademarks, service marks and trade names referred to in this Annual Report are listed without the applicable ® and ™ symbols, but we intend to enforce our rights to these trademarks, service marks and trade names. 5 We generate product revenue in the following business units: Business Unit Focus Labs Clinical chemistry laboratory instruments and tests, which measure target chemicals in bodily fluids for the evaluation of health and the clinical management of patients Immunoassay laboratory instruments and tests, which measure proteins as they act as antigens in the spread of disease, antibodies in the immune response spurred by disease, or markers of proper organ function and health Testing to detect and monitor disease progression across a broad spectrum of therapeutic areas Other product revenues primarily from contract manufacturing Specialized diagnostic solutions Collaboration and license agreements pursuant to which we derive collaboration and royalty revenues Molecular Diagnostics Tests for Polymerase Chain Reaction (“PCR”) thermocyclers with reduced process time and ready-to-use reagent configurations Molecular amplification systems with the ability to run multiple assays at the same time and tests for infectious disease diagnostics Sample-to-result molecular instruments and tests for syndromic infectious disease diagnostics Point of Care Instruments and tests to provide rapid results across a broad continuum of POC settings, including tests for professional healthcare providers and tests that can be performed at home Tests that are run on a range of portable, POC analyzers Tests that are visually read Transfusion Medicine Immunohematology instruments and tests used for blood typing and antibody identification to help confirm patient-donor compatibility in blood transfusions Donor screening instruments and tests used for blood and plasma screening for infectious diseases for global customers The products and platforms under each business unit are described below.
Solely for convenience, in some cases, the trademarks, service marks and trade names referred to in this Annual Report are listed without the applicable ® and ™ symbols, but we intend to enforce our rights to these trademarks, service marks and trade names. 5 We generate product revenue in the following business units: Business Unit Focus Labs Clinical chemistry laboratory instruments and tests, which measure target chemicals in bodily fluids for the evaluation of health and the clinical management of patients Immunoassay laboratory instruments and tests, which measure proteins as they act as antigens in the spread of disease, antibodies in the immune response spurred by disease, or markers of proper organ function and health Testing to detect and monitor disease progression across a broad spectrum of therapeutic areas Specialized diagnostic solutions Other product revenues primarily from contract manufacturing (1) Collaboration and license agreements pursuant to which we derive collaboration and royalty revenues (1) Molecular Diagnostics Tests for PCR thermocyclers with reduced process time and ready-to-use reagent configurations Molecular amplification systems with the ability to run multiple assays at the same time and tests for infectious disease diagnostics Sample-to-result molecular instruments and tests for syndromic infectious disease diagnostics Point of Care Instruments and tests to provide rapid results across a broad continuum of POC settings, including tests for professional healthcare providers and tests that can be performed at home Tests that are run on a range of portable, POC analyzers Tests that are visually read Transfusion Medicine Transfusion Medicine business unit includes two product categories: Immunohematology instruments and tests used for blood typing and antibody identification to help confirm patient-donor compatibility in blood transfusions Donor Screening instruments and tests used for blood and plasma screening for infectious diseases for global customers (1) Represents our non-core revenue.
These core behaviors include “bring your best,” which reflects each individual contributing to their highest potential, “embrace inclusion,” which reinforces the role each team member plays in creating a diverse, equitable and inclusive work environment, and “commit to service,” which reflects our value of serving our customers and communities in the core of everything we do.
These core behaviors include “bring your best,” which reflects each individual contributing to their highest potential, “embrace inclusion,” which reinforces the role each team member plays in creating an inclusive and positive work environment, and “commit to service,” which reflects our value of serving our customers and communities in the core of everything we do.
During the fiscal year ended December 31, 2023, the revenue associated with the use of this patented intellectual property was less than 1% of our total revenues and the expense associated with the antigens supplied to us by Grifols was less than 2% of our cost of goods sold.
During fiscal year ended 2024, the revenue associated with the use of this patented intellectual property was less than 1% of our total revenues and the expense associated with the antigens supplied to us by Grifols was 2% of our cost of goods sold.
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced and of select clinical trial sites, the FDA may issue an approval letter or a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced and of select clinical trial sites, the FDA may issue an approval letter or a CRL. An approval letter authorizes commercial marketing of the product with specific prescribing information for use for specific indications.
Information Available on Our Website This Annual Report and each of our other periodic and current reports, including any amendments thereto, are available, free of charge, on our website, www.quidelortho.com, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”).
Information Available on Our Website This Annual Report and each of our other periodic and current reports, including any amendments thereto, are available, free of charge, on our website, www.quidelortho.com, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
For more information related to our supply chain, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supply Chains” and Part I, Item 1A, “Risk Factors—Risks Relating to Our Business, Strategy and Operations—Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results.” Collaboration Arrangements We have various collaboration arrangements, which provide us with the rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners.
For more information related to our supply chain, refer to Part I, Item 1A, “Risk Factors—Risks Relating to Our Business, Strategy and Operations—Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results.” Collaboration Arrangements We have various collaboration arrangements, which provide us with the rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners.
Additionally, we are subject to laws and regulations and certain environmental, social and governance (“ESG”) requirements applicable to our government contracts, and failure to address these laws and regulations, ESG requirements, or to comply with government contracts could result in fines, debarment or exclusion from federal healthcare or global tender programs, or harm our business by a reduction in revenue associated with these customers.
Additionally, we are subject to laws and regulations and certain sustainability requirements applicable to our government contracts, and failure to address these laws and regulations, sustainability requirements, or to comply with government contracts could result in fines, debarment or exclusion from federal healthcare or global tender programs, or harm our business by a reduction in revenue associated with these customers.
When relying on SCCs, the data exporters are also required to conduct a transfer risk assessment to verify if anything in the law and/or practices of the third country may impinge on the effectiveness of the SCCs in the context of the transfer at stake and, if so, to identify and adopt supplementary measures.
IDTA and Addendum, the data exporters are also required to conduct a transfer risk assessment to verify if anything in the law and/or practices of the third country may impinge on the effectiveness of the SCCs or U.K. IDTA and Addendum in the context of the transfer at stake and, if so, to identify and adopt supplementary measures.
We currently sell our products directly to end users through a direct sales force and through a network of distributors, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies, wellness screening centers, other point-of-care (“POC”) settings, blood banks and donor centers, as well as for individual, non-professional, over-the-counter (“OTC”) use.
We currently sell our products directly to end users through a direct sales force and through a network of distributors, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies, wellness screening centers, other POC settings, blood banks and donor centers, as well as for individual, non-professional, OTC use.
Labeling 16 and promotional activities are also subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission (“FTC”). Current FDA enforcement policy prohibits the marketing of approved medical devices for unapproved uses. U.S. Regulation of Biological Products Certain of our blood screening products are regulated by the FDA as biological products, also called biologics.
Labeling and promotional activities are also subject to scrutiny by the FDA and, in certain circumstances, by the FTC. Current FDA enforcement policy prohibits the marketing of approved medical devices for unapproved uses. U.S. Regulation of Biological Products Certain of our blood screening products are regulated by the FDA as biological IVD products, also called biologics.
For example, in the U.S.: • the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “PPACA”) implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models; • the Budget Control Act of 2011 reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional Congressional action is taken; • the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), enacted in 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations; and • certain provisions of the Protecting Access to Medicare Act of 2014 (“PAMA”) were implemented by CMS in 2018, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.
For example, in the U.S.: • the PPACA implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models; • the Budget Control Act of 2011 reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken; • the MACRA, enacted in 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations; and 21 • certain provisions of the PAMA were implemented by CMS in 2018, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.
Other Laws and Regulations Governing Our Sales, Marketing and Shipping We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act of 2010 (the “Bribery Act”), the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act) and various other similar anti-corruption and anti-bribery laws.
Other Laws and Regulations Governing Our Sales, Marketing and Shipping We are subject to the FCPA, the U.K. Bribery Act of 2010 (the “Bribery Act”), the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act) and various other similar anti-corruption and anti-bribery laws.
Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue primarily in the following business units: Labs, Transfusion Medicine, Point of Care and Molecular Diagnostics.
Latin America and JPAC (Japan and Asia Pacific) are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics.
Our key strengths include new assay format development, new instrument systems development and the complex integration of the two. In addition, to create new opportunities, manage costs and adapt to a rapidly changing industry, we may also enter into strategic partnerships as part of our R&D process. 3.
Key strengths of our team include new assay format development, new instrument systems development and the complex integration of the two. In addition, in order to create new opportunities, manage costs and adapt to a rapidly changing industry, we are also exploring strategic partnerships as part of our R&D process.
Our marketing strategy also focuses on effectively marketing to customers a differentiated value proposition and maintaining our brand strength as further discussed above in the section entitled “Our Strategic Capabilities and Competitive Strengths.” We derive a significant portion of our total revenues from a few customers and distributors.
Our marketing strategy also focuses on effectively marketing to customers a differentiated value proposition and maintaining our brand strength as further discussed above in the section entitled “Our Strategic Capabilities and Competitive Strengths.” We derive a significant portion of our total revenues from a few customers and distributors. For fiscal year ended 2024, one customer represented 11% of Total revenues.
The process required by the FDA before biologics may be marketed in the U.S. generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements; • submission to the FDA of an Investigational New Drug application (“IND”) which must become effective before human clinical trials may begin.
The process required by the FDA before biologic IVDs may be marketed in the U.S. generally involves the following: • completion of preclinical laboratory tests, and when appropriate, animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements; • submission to the FDA of an IND which must become effective before human clinical trials may begin.
The California Consumer Privacy Act of 2018 (“CCPA”) creates individual privacy rights for California consumers and imposes privacy and data security obligations on certain entities that do business in California, including to provide specific disclosures in privacy notices and to provide rights to California residents in relation to their personal information.
The California Consumer Privacy Act of 2018, as amended by the CCPA, creates individual privacy rights for California consumers and imposes privacy and data security obligations on certain entities that do business in California, including to provide specific disclosures in privacy notices, to provide rights to California residents in relation to their personal information, and to conduct audits for certain higher risk data processing.
It also created a new data protection agency, the California Privacy Protection Agency, which is granted full administrative power, authority, and jurisdiction to implement and enforce the CCPA and CPRA.
It also created a new data protection agency, the California Privacy Protection Agency, which is granted full administrative power, authority, and jurisdiction to implement and enforce the CCPA, in addition to the California Attorney General’s existing enforcement authority.
As of December 31, 2023, we had approximately 1,000 service teammates globally. We employ highly trained service professionals, including laboratory specialists with advanced qualifications.
As of December 29, 2024, we had approximately 1,100 service teammates globally. We employ highly trained service professionals, including laboratory specialists with advanced qualifications.
This facility has production areas dedicated to creating and processing plastic components that are subsequently transformed into finished devices (cardiac and drugs of abuse products) using customized manufacturing equipment, including specialized automation. This facility is certified to ISO 13485:2016 and MDSAP medical device standards. Most of the products are packaged and subsequently distributed by our San Diego distribution center.
This facility has production areas dedicated to creating and processing plastic components that are subsequently transformed into finished devices (cardiac, drugs of abuse and molecular diagnostic products) using customized manufacturing equipment, including specialized automation. This facility is certified to ISO 13485:2016 and MDSAP medical device standards.
Food and Drug Administration (“FDA”)-cleared bioassay, Thyretain, which is used for the differential diagnosis of an autoimmune disease called Graves’ Disease Specialty Products Variety of biomarkers for bone health Clinical and research products for the assessment of osteoporosis and the evaluation of bone resorption/formation, which, including our metabolic bone markers, are used to monitor the effectiveness of therapy in pharmaceutical and related research Enzyme-linked immunosorbent assays and reagents for the detection of activation products from the three main complement pathways in autoimmune disease Assays developed on a microwell platform and marketed to clinicians and researchers under the Quidel and MicroVue brands 6 Clinical Chemistry Unique, postage-stamp-sized, dry slide technology that combines the spreading, masking, scavenger and reagent layers into one slide, which provides: • high-quality results quickly, efficiently and economically; • improved storage, with longer shelf life and less shelf space required; • an eco-friendly design that eliminates water usage and reduces chemical waste and biohazards; and • a comprehensive menu covering 24 therapeutic areas and approximately 90% of a typical laboratory’s testing needs Immunodiagnostics Enhanced chemiluminescent technology provides precision and accuracy along with a wide, dynamic testing range across over 60 immunoassay tests.
LABS Product Primary Application Virology & Bioassays Wide variety of traditional cell lines, specimen collection devices, media and controls for use in laboratories that culture and test for human viruses, including, among others, respiratory and herpes family viruses Cell-based products under the FreshCells brand in multiple formats, including tubes, shell vials and multi-well plates FDA-cleared bioassay, Thyretain, which is used for the differential diagnosis of an autoimmune disease called Graves’ Disease Specialty Products Variety of biomarkers for bone health Clinical and research products for the assessment of osteoporosis and the evaluation of bone resorption/formation, which, including our metabolic bone markers, are used to monitor the effectiveness of therapy in pharmaceutical and related research Enzyme-linked immunosorbent assays and reagents for the detection of activation products from the three main complement pathways in autoimmune disease Assays developed on a microwell platform and marketed to clinicians and researchers under the Quidel and MicroVue brands 6 Clinical Chemistry Unique, postage-stamp-sized, dry slide technology that combines the spreading, masking, scavenger and reagent layers into one slide, which provides: • high-quality results quickly, efficiently and economically; • improved storage, with longer shelf life and less shelf space required; • an eco-friendly design that eliminates water usage and reduces chemical waste and biohazards; and • a comprehensive menu covering 24 therapeutic areas and approximately 90% of a typical laboratory’s testing needs Immunodiagnostics Enhanced chemiluminescent technology provides precision and accuracy along with a wide, dynamic testing range across over 60 immunoassay tests.
The arrangement is governed by an agreement (as amended, the “Grifols Agreement”) originally entered into in 1989 with a 50-year term, which, among other things, provides for a profit sharing arrangement whereby, the profits we generate from our production and sale of Hepatitis and HIV diagnostics products are shared with Grifols, and the profits generated by Grifols from its sale of certain antigens and licensing of certain intellectual property rights are shared with us.
The arrangement is governed by the Grifols Agreement, which, among other things, provides for a profit sharing arrangement whereby, the profits we generate from our production and sale of Hepatitis and HIV diagnostics products are shared with Grifols, and the profits generated by Grifols from its sale of certain antigens and licensing of certain intellectual property rights are shared with us.
Our primary distribution centers are located in North America and Europe. In North America, we use a generalized sales force for each of our business units other than for donor screening within Transfusion Medicine, which utilizes a separate specialist sales force. Our North America distribution strategy takes into account the highly fragmented POC market, with many small or medium-sized customers.
Our primary distribution centers are located in North America and Europe. In North America, we use a sales force for each of our business units. Our North America distribution strategy takes into account the highly fragmented POC market, with many small or medium-sized customers.
We anticipate significant investment of our financial resources to product and technology R&D in the foreseeable future. Sales, Marketing and Distribution Our current business strategy is designed to serve the continuum of healthcare delivery needs globally, from POC clinicians located in doctor’s office practices, to moderately complex POLs, and to highly complex hospitals, laboratories and blood and plasma centers.
Sales, Marketing and Distribution Our current business strategy is designed to serve the continuum of healthcare delivery needs globally, from POC clinicians located in doctor’s office practices, to moderately complex POLs, and to highly complex hospitals, laboratories and blood and plasma centers.
Within the inherent operational diversity of these various segments, we focus on differentiating ourselves and enhancing our market leadership by specializing in the diagnosis and monitoring of select disease states, conditions and wellness categories. Certain of our revenue is driven by a “razor/razor blade” business model.
Within the inherent operational diversity of these various segments, we focus on differentiating ourselves and enhancing our market leadership by specializing in the diagnosis and monitoring of select disease states, conditions and wellness categories.
The resolution of issues such as these and their effect on our long-term success are also indeterminable. 22 It has been our policy to file for patent protection in the U.S. and other countries with significant markets for our products, such as Western European countries and Japan, if the economics are deemed to justify such filing and our patent counsel advises that relevant patent protection may be obtained.
It has been our policy to file for patent protection in the U.S. and other countries with significant markets for our products, such as Western European countries and Japan, if the economics are deemed to justify such filing and our patent counsel advises that relevant patent protection may be obtained.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing annual program fees for any marketed products.
In addition, a summary of every manufactured lot of product must be submitted to the FDA for review and approval prior to distribution. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing annual program fees for any marketed products.
We are also actively developing other products designed to help personalize and elevate individual test results, such as the QVue companion mobile application for our COVID-19 at-home tests, potentially resulting in specific clinical insights or actions.
Our portfolio of workflow automation solutions, such as Ortho Connect, Ortho Plus and myVirena, help simplify the testing and instrument management process. We are also actively developing other products designed to help personalize and elevate individual test results, such as the QVue companion mobile application for our COVID-19 at-home tests, potentially resulting in specific clinical insights or actions.
To help mitigate these supply chain challenges, we are (i) partnering with suppliers to invest in additional capacity and raw material inventory, (ii) diversifying our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components and (iii) creating redundancy in our global supply chain.
To help mitigate these supply chain challenges, we (i) partner with suppliers to invest in additional capacity and raw material inventory, (ii) diversify our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components, (iii) create redundancy in our global supply chain and (iv) insource activity where it makes strategic and financial sense.
Our charitable giving programs and activities in the U.S. consist of the following: 24 • Matching gifts−We match charitable contributions made by active employees to qualifying non-profit organizations of up to $200 per employee annually. • Volunteer incentive program−When an employee volunteers at a qualifying organization for a minimum of 20 hours in a calendar year, we donate $100 to that organization. • General grant fund−We may donate up to $2,000 to a qualifying organization proposed by an employee. • Community partnerships−As part of our commitment to expanding equitable access to healthcare, we have partnered with several major organizations to donate COVID-19 testing products to various communities across the nation to promote increased testing within communities to help prevent the spread of COVID-19. • Community initiatives and philanthropic programs−We contribute to a variety of community initiatives and philanthropic programs, including research partnerships, blood drive sponsorships, COVID-19 testing drives, medical supply donations, scholarship and internship programs, as well as STEM programs with educational institutions.
Our charitable giving programs and activities in the U.S. consist of the following: • Matching gifts−We match charitable contributions made by active employees to qualifying non-profit organizations of up to $200 per employee annually. • Volunteer incentive program−When an employee volunteers at a qualifying organization for a minimum of 20 hours in a calendar year, we donate $100 to that organization. • General grant fund−We may donate up to $2,000 to a qualifying organization proposed by an employee. • Community initiatives and philanthropic programs−We contribute to a variety of community initiatives and philanthropic programs, including research partnerships, blood drive sponsorships, scholarship and internship programs, as well as STEM and STEAM programs with educational institutions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Summary The following is a summary of the principal risks that could adversely affect our business, results of operations and financial condition: • the highly competitive nature of our industry and market segment; • failure to research and successfully develop new technologies, products and services and develop new markets; • adverse developments in global market, macroeconomic and geopolitical conditions; • fluctuations or a decline in sales of our respiratory products; • the loss of any key distributor or the failure to retain or expand our customer relationships; • interruptions and delays in the supply of raw materials, components, equipment and other products and services provided to us, and manufacturing or warehousing problems or delays; • the failure of our collaboration partners to fulfill their obligations to us; • 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; • our inability to achieve market acceptance of our products; • significant changes in the healthcare industry and related industries that we serve, in an effort to reduce costs; • consolidation of our customer base and the formation of group purchasing organizations; • inability to realize the anticipated benefits of acquisitions, divestitures or discontinuances of certain business operations; • risks associated with our non-U.S. operations and international sales, including currency translation risks, the impact of possible new tariffs, trade embargoes or trade wars and compliance with applicable trade measures; • failure to integrate successfully the businesses of Quidel and Ortho in the expected timeframe; • continued incurrence of significant transaction and merger-related costs; • our inability to protect our information systems and personal and confidential information from data corruption, cyber-attacks and security breaches; • interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems; • our inability to develop, obtain and protect our proprietary technology rights or defend against intellectual property infringement suits against us by third parties; • the loss of EUAs on our respiratory products; • our inability to obtain or maintain required clearances or approvals for our products, including approval requirements of the foreign countries in which we sell our products; • our ability to adequately manage our clinical studies; • failure to comply with applicable regulations, which may result in significant costs or the suspension or withdrawal of previously obtained clearances or approvals; • disruptions at government agencies that prevent them from performing normal business functions or prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner, or at all; • inability to procure government contracts, including due to government-sponsored tendering requirements, lack of funding and compliance and possible sanctions risks associated with our contracts with government entities; • liability claims and harm to our reputation resulting from claims that our products are defective; • failure to comply with laws and regulations, including healthcare regulations, laws and regulations associated with our use of hazardous materials, anti-corruption laws and regulations, and federal, state and foreign privacy, data security and data protection laws and regulations; • risks related to changes in U.S. and foreign income tax laws and regulations; 26 • need to raise additional funds to finance our future capital or operating needs or other business purposes; • risks related to our indebtedness; • our ability to generate cash flow to service our debt obligations; • restrictions imposed under the agreements governing our indebtedness from time to time, which may limit our operating flexibility; • difficulty attracting, motivating and retaining executives and other key employees; • unexpected payments to any defined benefit plans or other post-employment benefit plans applicable to our employees; • work stoppages, union negotiations, labor disputes and other matters associated with our labor force; • the outcomes of legal proceedings instituted against us; • additional costs and new risks associated with ESG matters, including evolving legal standards and regulations concerning such matters; • risks that the insurance we maintain may not fully cover any or all potential exposures; • certain provisions of our amended and restated certificate of incorporation (our “Charter”), our amended and restated bylaws (our “Bylaws”) and Delaware law that may make takeover attempts difficult, which could depress the price of our common stock, or limit our stockholders’ ability to obtain a favorable judicial forum for disputes; • the volatility of the market price of our common stock; • risks associated with future sales of our common stock by us or our stockholders in the public market; and • failure to develop or maintain an effective system of internal controls.
Biggest changeRisk Factors Summary The following is a summary of the principal risks that could adversely affect our business, results of operations and financial condition: • the highly competitive nature of our industry and market segments; • failure to research and successfully develop new technologies, products and services and develop new markets; • adverse developments in global market, macroeconomic and geopolitical conditions; • fluctuations or a decline in sales of our respiratory products; • the loss of any key distributor or the failure to retain or expand our customer relationships; • interruptions and delays in the supply of raw materials, components, equipment and other products and services provided to us, and manufacturing or warehousing problems or delays; • the failure of our collaboration partners to fulfill their obligations to us; • 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; • our inability to achieve market acceptance of our products; • significant changes in the healthcare industry and related industries that we serve, including an effort to reduce costs; • consolidation of our customer base and the formation of group purchasing organizations; • inability to realize the anticipated benefits of acquisitions, divestitures or discontinuances of certain business operations; • legal and regulatory risks, reputational harm or other adverse business consequences as a result of implementing artificial intelligence (“AI”) and machine learning technologies; • risks associated with our non-U.S. operations and international sales, including currency translation risks, the impact of possible new sanctions or tariffs, trade embargoes or trade wars and compliance with applicable trade measures; • failure to integrate successfully the businesses of Quidel and Ortho in the expected timeframe; • continued incurrence of significant integration-related costs; • our inability to protect our information systems and personal and confidential information, including from data corruption, cyber-attacks, security breaches or IT errors; • interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems; • our inability to develop, obtain and protect our proprietary technology rights or defend against intellectual property infringement suits against us by third parties; • the loss of EUAs on our respiratory products; • our inability to obtain or maintain required clearances or approvals for our products, including approval requirements of the foreign countries in which we sell our products; • our inability to adequately manage our clinical studies; • failure to comply with applicable regulations by the FDA and other federal, state and foreign regulatory agencies, which may result in significant costs, the suspension or withdrawal of previously obtained regulatory approvals, product recalls, seizure of products or injunctions against the distribution of our products, operating restrictions and criminal prosecution; • disruptions at government agencies that prevent them from performing normal business functions or prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner, or at all; 25 • inability to procure government contracts, including due to government-sponsored tendering requirements, lack of funding and compliance and possible sanctions risks associated with contracts with government entities; • liability claims and harm to our reputation resulting from claims that our products are defective or do not comply with applicable regulations; • failure to comply with applicable healthcare laws and regulations, laws and regulations associated with our use of hazardous materials, anti-bribery and anti-corruption laws and regulations, and federal, state and foreign privacy, data security and data protection laws and regulations; • risks related to changes in U.S. and foreign income tax laws and regulations; • our need to raise additional funds to finance our future capital or operating needs or other business purposes; • risks related to our indebtedness; • our inability to generate cash flow to service our debt obligations; • restrictions imposed under the agreements governing our indebtedness from time to time, which may limit our operating flexibility; • difficulty attracting, motivating and retaining executives and other key employees; • unexpected payments to any defined benefit plans or other post-employment benefit plans applicable to our employees; • work stoppages, union negotiations, labor disputes and other matters associated with our labor force; • identified material weaknesses in our internal controls; • the outcomes of legal proceedings instituted against us; • additional costs and new risks associated with sustainability matters, including evolving legal standards and regulations concerning such matters; • risks that the insurance we maintain may not fully cover any or all potential exposures; • certain provisions of our amended and restated certificate of incorporation (our “Charter”), our amended and restated bylaws (our “Bylaws”) and Delaware law that may make takeover attempts difficult, which could depress the price of our common stock, or limit our stockholders’ ability to obtain a favorable judicial forum for disputes; • the volatility of the market price of our common stock; and • risks associated with future sales of our common stock by us or our stockholders in the public market.
Specifically, our higher level of debt could have important consequences to us and our stockholders, including: • making it more difficult for us to satisfy our obligations with respect to our debt, and if we fail to comply with these obligations, an event of default could result and our credit worthiness may be impacted; • limiting our ability to refinance or obtain additional financing to fund future working capital, capital expenditures, investments or other general corporate requirements; • limiting us from making strategic acquisitions or causing us to make non-strategic divestitures; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments and other general corporate purposes; • exposing us to the risk of increased interest rates as our borrowings under the credit facilities are at variable rates of interest; • the Credit Agreement contains, and any agreements to refinance our debt likely will contain, financial and other restrictive covenants, and our failure to comply with them may result in an event of default, which, if not cured or waived, could have a material adverse effect on us; 43 • increasing our vulnerability to, and reducing our flexibility to respond to, changes in our business and industry, general economic downturns and adverse industry and business conditions; • to the extent the debt we incur requires collateral to secure such indebtedness, exposing our assets to risks and limiting our flexibility related to such assets; • any default under our Credit Agreement may result in proceedings against collateral we have used to secure the credit facilities, including substantially all of our and our guarantor subsidiaries’ assets; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete and to changing business and economic conditions; • placing us at a disadvantage compared to less leveraged competitors and affecting our ability to compete; and • increasing our cost of borrowing.
Specifically, our higher level of debt could have important consequences to us and our stockholders, including: • making it more difficult for us to satisfy our obligations with respect to our debt, and if we fail to comply with these obligations, an event of default could result and our credit worthiness may be impacted; • limiting our ability to refinance or obtain additional financing to fund future working capital, capital expenditures, investments or other general corporate requirements; • limiting us from making strategic acquisitions or causing us to make non-strategic divestitures; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments and other general corporate purposes; • exposing us to the risk of increased interest rates as our borrowings under the credit facilities are at variable rates of interest; • the Credit Agreement contains, and any agreements to refinance our debt likely will contain, financial and other restrictive covenants, and our failure to comply with them may result in an event of default, which, if not cured or waived, could have a material adverse effect on us; • increasing our vulnerability to, and reducing our flexibility to respond to, changes in our business and industry, general economic downturns and adverse industry and business conditions; • to the extent the debt we incur requires collateral to secure such indebtedness, exposing our assets to risks and limiting our flexibility related to such assets; • any default under our Credit Agreement may result in proceedings against collateral we have used to secure the credit facilities, including substantially all of our and our guarantor subsidiaries’ assets; 43 • limiting our flexibility in planning for and reacting to changes in the industry in which we compete and to changing business and economic conditions; • placing us at a disadvantage compared to less leveraged competitors and affecting our ability to compete; and • increasing our cost of borrowing.
The market price of our common stock may be volatile. The market price of our common stock may be volatile. Broad general economic, political, market and industry factors may adversely affect the market price of our common stock, regardless of our actual operating performance and the success of the integration of Quidel and Ortho.
The market price of our common stock may be volatile. Broad general economic, political, market and industry factors may adversely affect the market price of our common stock, regardless of our actual operating performance and the success of the integration of Quidel and Ortho.
The difficulties of combining the operations of Quidel and Ortho, some of which we have already experienced, include, among others: • managing a significantly larger company and expanded business operations and the associated increased costs and complexity; • aligning and executing our strategy; • inconsistencies in standards, controls, systems, procedures and policies; • the possibility of faulty assumptions underlying expectations regarding the integration process and results; • coordinating sales, distribution and marketing efforts; • integrating IT, enterprise resource planning (“ERP”), customer relationship management and other systems, including the implementation of a new ERP system to integrate certain existing business, operational and financial processes, which requires significant investment of capital and human resources and the reengineering of many business processes; • managing tax costs or inefficiencies associated with integrating the operations of Quidel and Ortho; and • taking actions that may be required in connection with obtaining regulatory approvals.
The difficulties of combining the operations of Quidel and Ortho, some of which we have already experienced, include, among others: • managing a significantly larger company and expanded business operations and the associated increased costs and complexity; • aligning and executing our strategy; • inconsistencies in standards, controls, systems, procedures and policies; • the possibility of faulty assumptions underlying expectations regarding the integration process and results; • coordinating sales, distribution and marketing efforts; • integrating IT, enterprise resource planning (“ERP”), customer relationship management and other systems, including the implementation of a new ERP system to integrate certain existing business, operational and financial processes, 33 which requires significant investment of capital and human resources and the reengineering of many business processes; • managing tax costs or inefficiencies associated with integrating the operations of Quidel and Ortho; and • taking actions that may be required in connection with obtaining regulatory approvals.
The Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability, and the ability of our subsidiaries, to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; • prepay, redeem or repurchase certain indebtedness; • make business acquisitions; • make loans and investments; • sell, transfer or otherwise dispose of assets; • incur liens; • enter into transactions with affiliates; • enter into new lines of business or alter the businesses we conduct; • designate any of our subsidiaries as unrestricted subsidiaries; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge, transfer or sell all or substantially all of our assets or the assets of our subsidiaries.
The Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability, and the ability of our subsidiaries, to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; 44 • prepay, redeem or repurchase certain indebtedness; • make business acquisitions; • make loans and investments; • sell, transfer or otherwise dispose of assets; • incur liens; • enter into transactions with affiliates; • enter into new lines of business or alter the businesses we conduct; • designate any of our subsidiaries as unrestricted subsidiaries; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge, transfer or sell all or substantially all of our assets or the assets of our subsidiaries.
Disruptions at the FDA and other government agencies, including disruptions caused by funding shortages or statutory, regulatory or policy changes, could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent them from performing normal business functions on which the operation of our business may rely, or otherwise prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies, including disruptions caused by funding shortages or statutory, regulatory or policy changes, could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent them from performing normal business functions on which the operation of our business may rely, or otherwise prevent new 38 or modified products from being developed, cleared, approved or commercialized in a timely manner or at all, which could negatively impact our business.
It is impossible to eliminate all cybersecurity risk and thus our information systems, products and services, as well as those of our service providers, remain potentially vulnerable to known or unknown threats. Additionally, our information systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages and system failures.
It is impossible to eliminate all cybersecurity risk and thus our information systems, products 34 and services, as well as those of our service providers, remain potentially vulnerable to known or unknown threats. Additionally, our information systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages and system failures.
If the FDA disagrees with our determinations and requires us to submit a new 510(k), PMA or PMA supplement, or BLA or BLA supplement for any product modification, we may be required to cease marketing such product or to recall the modified product until we obtain clearance or approval, and we may be subject to civil, criminal, monetary and non-monetary penalties and damage to our reputation.
If the FDA disagrees with our determinations and requires us to submit a new 510(k), PMA or supplement, or BLA or supplement for any product modification, we may be required to cease marketing such product or to recall the modified product until we obtain 37 clearance or approval, and we may be subject to civil, criminal, monetary and non-monetary penalties and damage to our reputation.
Our operations and facilities are subject to various foreign, federal, state and local environmental, health and safety laws, rules, regulations and other requirements, including those governing the generation, use, manufacture, handling, transport, storage, treatment and disposal of, or exposure to, regulated materials, discharges and emissions to air and water, the cleanup of contamination and occupational health and safety matters.
Our operations and facilities are subject to various foreign, federal, state and local environmental, health and safety laws, rules, regulations and other requirements, including those governing the generation, use, manufacture, handling, transport, storage, treatment and disposal of, or exposure to, regulated materials, discharges and emissions to air and water, the cleanup of 40 contamination and occupational health and safety matters.
The risk of a product liability claim is also heightened for at-home tests that may be purchased and administered by the end-user customer and not a medical professional and our communication of risk information, benefits or claims, which is highly regulated by the FTC and the FDA, could be alleged to be misleading or erroneous.
The risk of a product liability claim is also heightened for at-home tests that may be purchased and administered by the end-user customer and not a medical professional and our communication of risk 39 information, benefits or claims, which is highly regulated by the FTC and the FDA, could be alleged to be misleading or erroneous.
Similarly, any disruption or other operational challenges to one of our primary warehouse facilities could result in decreased revenue or increased costs given the challenge in finding suitable alternative facilities. Our collaboration arrangements may not operate according to our business strategy if our collaboration arrangement partners fail to fulfill their obligations.
Similarly, any disruption or other operational challenges to one of our primary warehouse facilities could result in decreased revenue or increased costs given the challenge in finding suitable alternative facilities. 29 Our collaboration arrangements may not operate according to our business strategy if our collaboration arrangement partners fail to fulfill their obligations.
These activities may subject us and our partners to federal, state and foreign privacy, data security and data protection laws, regulations, guidance, self-governing rules, industry standards, contractual requirements and other obligations as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.
These activities subject us and our partners to federal, state and foreign privacy, data security and data protection laws, regulations, guidance, self-governing rules, industry standards, contractual requirements and other obligations as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.
Additionally, our reliance on a small number of contract manufacturers and a large number of single and sole source suppliers makes us vulnerable to possible production capacity or other constraints of such suppliers or in their supply chain and reduced control over manufacturing, product availability, delivery schedules and costs.
Additionally, our reliance on 28 a small number of contract manufacturers and a large number of single and sole source suppliers makes us vulnerable to possible production capacity or other constraints of such suppliers or in their supply chain and reduced control over manufacturing, product availability, delivery schedules and costs.
Demand for 28 our respiratory products has and may continue to fluctuate or decline as a result of a number of factors, including but not limited to the severity of the respiratory season, the emergence and impact of new variants or resurgences, the effectiveness of vaccination efforts, and the increased market supply of respiratory products by our competitors.
Demand for our respiratory products has and may continue to fluctuate or decline as a result of a number of factors, including but not limited to the severity of the respiratory season, the emergence and impact of new variants or resurgences, the effectiveness of vaccination efforts, and the increased market supply of respiratory products by our competitors.
Our immunohematology business in particular is subject to the risk of product liability claims, as even the slightest inaccuracies in a specimen’s analysis 39 can lead to critical outcomes in the life of a patient, thereby leaving little to no room for error in the precision and accuracy of such testing.
Our immunohematology business in particular is subject to the risk of product liability claims, as even the slightest inaccuracies in a specimen’s analysis can lead to critical outcomes in the life of a patient, thereby leaving little to no room for error in the precision and accuracy of such testing.
Complying with these various laws, regulations, standards and contractual obligations could cause us to incur substantial costs, require us to change our business practices in a manner that does not align with our business objectives (including limiting our ability to collect, control, process, share, disclose and otherwise use personal information (including health and medical information that are subject to strict requirements)), reduce demand for certain of our digital solutions, restrict our ability to offer certain digital solutions in certain jurisdictions or subject us to inquiries by U.S., federal, state and foreign data protection regulatory agencies, all of which could result in sanctions, investigations, fines, penalties or otherwise negatively impact our business or reputation.
Complying with these various laws, regulations, standards and contractual obligations could cause us to incur substantial costs, require us to change our business practices in a manner that does not align with our business objectives (including limiting our ability to collect, control, process, share, disclose and otherwise use personal information (including health and medical information that are subject to strict requirements)), reduce demand for certain of our digital solutions, restrict our ability to offer certain digital solutions in certain jurisdictions or subject us to inquiries by federal, state and foreign data protection regulatory agencies, all of which could result in sanctions, investigations, fines, penalties or otherwise negatively impact our business or reputation.
Any of the foregoing consequences will negatively affect our business, financial condition and results of operations. 40 Certain Other Regulations Relating to Our Business We use hazardous materials in our business that may result in substantial compliance costs or claims against us relating to handling, storage or disposal.
Any of the foregoing consequences will negatively affect our business, financial condition and results of operations. Certain Other Regulations Relating to Our Business We use hazardous materials in our business that may result in substantial compliance costs or claims against us relating to handling, storage or disposal.
If regulators disagree with the manner in which we have sought to comply with applicable laws and regulations, we could be subject to substantial civil and criminal penalties, as well as corrective actions, product recalls, seizures or injunctions with respect to the sale of our products.
If regulators disagree with the manner in which we have sought to comply with applicable 46 laws and regulations, we could be subject to substantial civil and criminal penalties, as well as corrective actions, product recalls, seizures or injunctions with respect to the sale of our products.
Similarly, a tightening of credit may adversely affect our supplier base, increase the potential for one or more of our suppliers to experience financial distress or bankruptcy, and could also impact our operations more directly, including any outstanding or contemplated credit facility or other borrowings.
Similarly, a tightening of credit may adversely affect our supplier base, increase 27 the potential for one or more of our suppliers to experience financial distress or bankruptcy, and could also impact our operations more directly, including any outstanding or contemplated credit facility or other borrowings.
We are subject to healthcare regulations that could result in liability, require us to change our business practices and restrict our operations in the future. We are subject to healthcare fraud and abuse regulation and enforcement by both the federal government and the governments of states and foreign countries in which we conduct our business.
We are subject to healthcare laws and regulations that could result in liability, require us to change our business practices and restrict our operations in the future. We are subject to healthcare fraud and abuse regulation and enforcement by both the federal government and the governments of states and foreign countries in which we conduct our business.
As a result, we have encountered, and may in the future encounter, significant customer backlogs of orders and inventory shipments. Further significant customer backlogs and 29 our inability to meet customer demand for our products and services may adversely impact customer relationships, impair our reputation and affect our financial performance.
As a result, we have encountered, and may in the future encounter, significant customer backlogs of orders and inventory shipments. Further significant customer backlogs and our inability to meet customer demand for our products and services may adversely impact customer relationships, impair our reputation and affect our financial performance.
Additionally, 30 differences in views among collaboration arrangement partners may result in delayed decisions or failures to agree on major issues. If these differences cause our collaboration arrangements to deviate from our business strategy, our results of operations could be materially adversely affected.
Additionally, differences in views among collaboration arrangement partners may result in delayed decisions or failures to agree on major issues. If these differences cause our collaboration arrangements to deviate from our business strategy, our results of operations could be materially adversely affected.
Due to the potential for changes to tax laws (or changes to the interpretation thereof) and the ambiguity and complexity of tax laws, the subjectivity of factual interpretations, the complexity of our foreign operations and intercompany arrangements and other factors, our estimates of income tax assets or liabilities may differ from actual payments, assessments or receipts.
Due to the potential for changes to tax laws (or changes to the interpretation thereof) and the ambiguity and complexity of tax laws, the subjectivity of factual interpretations, the complexity of our foreign operations and intercompany arrangements and other factors, our estimates of income tax assets or liabilities may differ from actual payments, 42 assessments or receipts.
Furthermore, many of our local businesses generate revenues and incur costs in a currency other than their functional currency, 33 which can impact the operating results for these operations if we are unable to mitigate the impact of foreign currency fluctuations.
Furthermore, many of our local businesses generate revenues and incur costs in a currency other than their functional currency, which can impact the operating results for these operations if we are unable to mitigate the impact of foreign currency fluctuations.
Such changes in the U.S., healthcare austerity measures in Europe and other potential global healthcare reform changes and government austerity measures may reduce the amount of government funding or reimbursement available to customers or end-customers of our products and services and/or the volume of medical procedures using our products and services.
Such changes in the U.S., healthcare austerity measures in Europe and other potential global healthcare reform changes and government austerity measures may reduce the amount of government funding or reimbursement available 30 to customers or end-customers of our products and services and/or the volume of medical procedures using our products and services.
The healthcare industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our business, financial condition and results of operations.
The healthcare industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes, including an effort to reduce costs, which could adversely affect our business, financial condition and results of operations.
Our operating results could be materially and adversely affected if: • customers and potential customers believe our competitors’ products and services better address their needs and expectations through product performance, product offerings, cost, automation or work-flow efficiencies, and even if we can demonstrate that our products and services meet their needs and expectations, they may resist changing to our products; • our competitors take market share from our products, or we may not win opportunities because our competitors have or are perceived to have more effective servicing or marketing or greater or more timely product availability; • our competitors are able to obtain regulatory approvals for products or services or otherwise bring competing products to market earlier than us; or • our competitors offer more competitive pricing or we fail to manufacture, in a cost-effective way, or at all, sufficient quantities of our products to meet customer demand.
Our operating results could be materially and adversely affected if: • customers and potential customers believe our competitors’ products and services better address their needs and expectations through product performance, product offerings, cost, automation or work-flow efficiencies, and even if we can demonstrate that our products and services meet their needs and expectations, they may resist changing to our products; • our competitors take market share from our products, or we may not win opportunities because our competitors have or are perceived to have more effective servicing or marketing or greater or more timely product availability; • our competitors are able to obtain regulatory approvals for products or services or otherwise deliver competing products to market earlier than us; or 26 • our competitors offer more competitive pricing or we fail to manufacture, in a cost-effective way, or at all, sufficient quantities of our products to meet customer demand.
Additionally, our interpretation and application of these laws and regulations could be challenged by the relevant governmental authorities, which could result in material administrative or judicial procedures, actions or sanctions. If we determine to repatriate earnings from foreign jurisdictions that have been considered permanently re-invested under existing accounting standards, it could also increase our effective tax rate.
Additionally, our interpretation and application of these laws and regulations could be challenged by the relevant governmental authorities, which could result in material administrative or judicial procedures, actions or sanctions. If we repatriate earnings from foreign jurisdictions that have been considered permanently re-invested under existing accounting standards, it could also increase our effective tax rate.
Like any large corporation, from time to time the information systems on which we rely, including those controlled and managed by third parties, may be subject to computer viruses, malicious software, attacks by hackers and other forms of cyber intrusions or unauthorized access, any of which can create system disruptions, shutdowns or unauthorized disclosure of personal or confidential information, all of which can be timely and costly to remediate.
Like any large corporation, from time to time the information systems on which we rely, including those controlled and managed by third parties, are subject to computer viruses, malicious software, attacks by hackers and other forms of cyber intrusions or unauthorized access, any of which can create system disruptions, shutdowns or unauthorized disclosure of personal or confidential information, all of which can be timely and costly to remediate.
Third-party providers of corporate responsibility ratings and reports have also increased in number to meet growing stakeholder demand for measurement of ESG performance. The criteria by which our corporate responsibility practices are assessed must be routinely monitored and may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
Third-party providers of corporate responsibility ratings and reports have also increased in number to meet growing stakeholder demand for measurement of sustainability performance. The criteria by which our corporate responsibility practices are assessed must be routinely monitored and may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
If our operations are found to be in violation of any of the federal, state or foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to significant penalties, including significant criminal, civil and administrative penalties, damages, fines, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, contractual damages, reputational harm, oversight if we become subject to a consent decree, corporate integrity agreement or other government resolution, and disgorgement, and we could be required to curtail, restructure or cease our operations.
If our operations are found to be in violation of any of the laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to significant penalties, including significant criminal, civil and administrative penalties, damages, fines, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, contractual damages, reputational harm, oversight if we become subject to a consent decree, corporate integrity agreement or other government resolution, and disgorgement, and we could be required to curtail, restructure or cease our operations.
For more information on our cybersecurity risk management, strategy and governance, see Part I, Item 1C, “Cybersecurity.” Interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems could impair the delivery of our cloud-based solutions and negatively impact our business.
For more information on our cybersecurity risk management, strategy and governance, refer to Part I, Item 1C, “Cybersecurity.” Interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems could impair the delivery of our cloud-based solutions and negatively impact our business.
As of such date, approximately 15% of our employees globally were covered by a union, collective bargaining agreement or works council. Historically, we have not experienced work stoppages; however, in the future, we may be subject to potential union campaigns, work stoppages, union negotiations and other potential labor disputes.
As of such date, approximately 16% of our employees globally were covered by a union, collective bargaining agreement or works council. Historically, we have not experienced work stoppages; however, in the future, we may be subject to potential union campaigns, work stoppages, union negotiations and other potential labor disputes.
Moreover, a number of customers who are payors or distributors have adopted, or may adopt, procurement policies that include ESG provisions that their suppliers or manufacturers must comply with, or they may seek to include such provisions in their terms and conditions. Standards for tracking and reporting ESG matters continue to evolve.
Moreover, a number of customers who are payors or distributors have adopted, or may adopt, procurement policies that include sustainability provisions that their suppliers or manufacturers must comply with, or they may seek to include such provisions in their terms and conditions. Standards for tracking and reporting sustainability matters continue to evolve.
The following is a more complete discussion of the risks facing our business that we have determined are currently material. Risks Relating to Our Business, Strategy and Operations The industry and market segment in which we operate are highly competitive, and our failure to compete effectively could adversely affect our sales and results of operations.
The following is a more complete discussion of the risks facing our business that we have determined are currently material. Risks Relating to Our Business, Strategy and Operations The industry and market segments in which we operate are highly competitive, and our failure to compete effectively could adversely affect our sales and results of operations.
If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products or injunctions 38 against our distribution of products, termination of our service agreements by our customers, disgorgement of money, operating restrictions and criminal prosecution.
If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products or injunctions against the distribution of our products, termination of our service agreements by our customers, disgorgement of money, operating restrictions and criminal prosecution.
We will be exposed to significant risks in relation to compliance with anti-corruption laws and regulations and economic sanctions programs.
We will be exposed to significant risks in relation to compliance with anti-bribery and anti-corruption laws and regulations and economic sanctions programs.
Our global business is adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, increases in unemployment rates, the inflationary environment, rising interest rates, a recessionary environment, instability in financial institutions and budgeting constraints of governmental entities.
Our global business is adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, increases in unemployment rates, the inflationary environment, high interest rates, a recessionary environment, instability in financial institutions and budgeting constraints of governmental entities.
This may require us to follow government-sponsored tendering processes involving stringent restrictions, including pricing restrictions, ESG requirements, and other compliance obligations. As a result, we may face challenges meeting such government-sponsored tendering requirements, and ultimately, may not be awarded such contracts with government entities.
This may require us to follow government-sponsored tendering processes involving stringent restrictions, including pricing restrictions, sustainability requirements, and other compliance obligations. As a result, we may face challenges meeting such government-sponsored tendering requirements, and ultimately, may not be awarded such contracts with government entities.
Expectations of our performance related to ESG matters, or the reporting of such matters, may impose additional costs on us and expose us to new risks. There is an increasing focus and scrutiny from the SEC and other regulators, investors, customers, suppliers, vendors, employees and other stakeholders concerning corporate responsibility and sustainability and ESG factors in particular.
Expectations of our performance related to sustainability matters, or the reporting of such matters, may impose additional costs on us and expose us to new risks. There is an increasing focus and scrutiny from regulators, investors, customers, suppliers, vendors, employees and other stakeholders concerning corporate responsibility and sustainability in particular.
In addition, the Credit Agreement requires us to comply with two financial covenants consisting of a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) and a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement). See Part II, Item 8, “Financial Statements and Supplementary Data—Note 8. Borrowings” for more information related to our financial covenants.
In addition, the Credit Agreement requires us to comply with two financial covenants consisting of a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) and a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement). Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 10. Borrowings” for more information related to our financial covenants.
These foreign risks include, among others: • compliance with multiple different registration requirements and new and changing product registration requirements, our inability to benefit from registration for our products inasmuch as registrations may be controlled by a distributor, and the difficulty in transitioning our product registrations; • compliance with complex foreign and U.S. laws and regulations that apply to our international operations, including U.S. laws on import/export limitations, the FCPA, and local laws prohibiting corrupt payments to governmental officials; • lost revenue as a result of macroeconomic developments, including the inflationary environment and recessionary fears; • the imposition by foreign governments of trade barriers such as tariffs, quotas, preferential bidding, import restrictions or other barriers; • exposure to currency exchange fluctuations against the U.S. dollar; • decreased liquidity resulting from longer payment cycles, generally lower average selling prices and greater difficulty in accounts receivable collection and enforcing agreements through foreign legal systems; • lower productivity resulting from difficulties we may encounter in staffing and managing sales, customer support and R&D operations across many countries; • difficulties associated with navigating foreign laws and legal systems; • difficulties in identifying potential third-party distributors or distribution channels; • import or export licensing requirements, both by the U.S. and foreign countries; • international sanction regimes, including future regulations and sanctions that could further limit the countries in which our products may be manufactured or sold, increase the cost of conducting business in these countries, or restrict our access to, or increase the cost of obtaining, products from foreign sources; • reduced or lack of protection for and enforcement of our intellectual property rights; • social, geopolitical or macroeconomic instability in some of the regions where we currently sell our products or operate or where we may expand into in the future, including as a result of conflicts, including the ongoing conflict in Ukraine and the Israel-Hamas conflict, acts of terrorism, civil unrest, wars, pandemics, endemics or other public health crises, environmental incidents and disruptions in global transportation; • increased financial accounting and reporting burdens and complexities; • import and export duties, changes to import and export regulations, customs regulations and processes, and restrictions on the transfer of funds, including currency controls; • complex and potentially adverse tax consequences resulting from international tax laws; • transportation difficulties and delays resulting from inadequate local infrastructure; and • diversion of our products into the U.S. or other markets that are sold into other international markets at lower prices.
These risks include, among others: • compliance with multiple different registration requirements and new and changing product registration requirements, our inability to benefit from registration for our products inasmuch as registrations may be controlled by a distributor, and the difficulty in transitioning our product registrations; • compliance with complex foreign and U.S. laws and regulations that apply to our international operations, including regulations in the U.S., EU and other jurisdictions impacting the marketing of our products, U.S. laws on import/export limitations, the FCPA, and local laws prohibiting corrupt payments to governmental officials, including anti-corruption laws in China; • lost revenue as a result of macroeconomic developments, including the inflationary environment and recessionary fears; • the imposition or threat of, or changes in policy regarding, trade barriers (such as sanctions, tariffs, quotas, preferential bidding, import restrictions or other barriers) by U.S. or foreign governments; • exposure to currency exchange fluctuations against the U.S. dollar; • decreased liquidity resulting from longer payment cycles, generally lower average selling prices and greater difficulty in accounts receivable collection and enforcing agreements through foreign legal systems; • lower productivity resulting from difficulties we may encounter in staffing and managing sales, customer support and R&D operations across many countries; • difficulties associated with navigating foreign laws and legal systems; • difficulties in identifying potential third-party distributors or distribution channels; • import or export licensing requirements, both by the U.S. and foreign countries; 32 • U.S. or international sanction regimes, including future regulations and sanctions that could further limit the countries in which our products may be manufactured or sold, increase the cost of conducting business in these countries, or restrict our access to, or increase the cost of obtaining, products from foreign sources; • reduced or lack of protection for and enforcement of our intellectual property rights; • social, geopolitical or macroeconomic instability in some of the regions where we currently sell our products or operate or where we may expand into in the future, including as a result of conflicts, including the ongoing conflicts in Ukraine and the Middle East, acts of terrorism, civil unrest, wars, pandemics, endemics or other public health crises, environmental incidents and disruptions in global transportation; • increased financial accounting and reporting burdens and complexities; • import and export duties, changes to import and export regulations, customs regulations and processes, and restrictions on the transfer of funds, including currency controls; • complex and potentially adverse tax consequences resulting from international tax laws; • transportation difficulties and delays resulting from inadequate local infrastructure; and • diversion of our products into the U.S. or other markets that are sold into other international markets at lower prices.
In addition, we could fail, or be perceived as failing, in our achievement of certain ESG-related initiatives or goals, or we could be criticized for the scope of such initiatives or goals or our standards for measuring and reporting such goals.
In addition, we could fail, or be perceived as failing, in our achievement of certain sustainability-related initiatives or goals, or we could be criticized for the scope of such initiatives or goals or our standards for measuring and reporting such goals.
Government entities are enhancing or advancing legal and regulatory requirements, including disclosure requirements, specific to ESG matters. For example, the state of California has adopted new climate change disclosure requirements and the E.U. has adopted the Corporate Sustainability Reporting Directive. Compliance with such rules could require significant effort and resources and result in changes to our current ESG goals.
Government entities are enhancing or advancing legal and regulatory requirements, including disclosure requirements, specific to sustainability matters. For example, the state of California has adopted new climate change disclosure requirements and the EU has adopted the Corporate Sustainability Reporting Directive. Compliance with such rules could require significant effort and resources and result in changes to our current sustainability goals.
We have entered into a series of interest rate cap and interest rate swap agreements to hedge our interest rate exposures related to our variable rate borrowings under the credit facilities.
We have entered into a series of interest rate swap agreements to hedge our interest rate exposures related to our variable rate borrowings under the credit facilities.
We may face reputational damage if our ESG performance or ESG rating profile is, or is perceived as being, below that of our competitors or peer companies.
We may face reputational damage if our sustainability performance or sustainability rating profile is, or is perceived as being, below that of our competitors or peer companies.
Alleged manufacturing and design defects could lead to recalls (either voluntary or required by the FDA or other government authorities) and could result in the removal of one or more of our products from the market.
Alleged manufacturing and design defects or regulatory non-compliance could lead to recalls (either voluntary or required by the FDA or other government authorities) and could result in the removal of one or more of our products from the market.
We are subject to income taxes in the U.S. and in various non-U.S. jurisdictions. The U.S. Congress, the Organisation for Economic Co-operation and Development and other government agencies in jurisdictions where we do business have had an extended focus on issues related to the taxation of multinational corporations.
We are subject to income taxes in the U.S. and in various non-U.S. jurisdictions. The U.S. Congress, the Organization for Economic Co-operation and Development and other government agencies in jurisdictions where we do business have had an enhanced focus on issues related to the taxation of multinational corporations.
We may also be bound by contractual obligations with our customers relating to privacy, data protection and data security that are more stringent than applicable privacy, data security and data protection laws and regulations, and some companies often will not contract with vendors that do not meet more rigorous standards.
We are also bound by contractual obligations with some of our customers relating to privacy, data protection and data security, some of which may be more stringent than applicable privacy, data security and data protection laws and regulations, as some companies will not contract with vendors that do not meet more rigorous standards.
Additionally, many investors use ESG factors to help guide their 46 investment strategies and, in some cases, may choose not to invest in us if they believe our ESG performance is inadequate.
Additionally, many investors use sustainability factors to help guide their investment strategies and, in some cases, may choose not to invest in us if they believe our sustainability performance is inadequate.
In addition, we are transitioning from integration efforts of the two independent businesses to focusing on transformation of the combined company with the goal of creating a more efficient and agile company.
In addition, we are transitioning from integration efforts of the two independent businesses to focusing on business efficiencies of the combined company with the goal of creating a more efficient and agile company.
Department of State. The FCPA prohibits providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage. We may deal with state-owned business enterprises, the employees and representatives of which may be considered foreign officials for purposes of the FCPA.
Department of the Treasury (“OFAC”) and the U.S. Department of State. The FCPA prohibits providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage. We may deal with state-owned business enterprises, the employees and representatives of which may be considered foreign officials for purposes of the FCPA.
Future quotas, duties or tariffs may have a material adverse effect on our business, financial condition, results of operations or cash flows. Future trade agreements could also provide our competitors with an advantage over us or increase our costs, either of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Future trade agreements could also provide our competitors with an advantage over us or increase our costs, either of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
If we elect not to or are unable to satisfy such evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulators, stakeholders may conclude that our performance related to corporate responsibility and ESG matters is inadequate.
If we elect not to or are unable to satisfy such evolving standards for identifying, measuring and reporting sustainability metrics, including sustainability-related disclosures that may be required of public companies by regulators, stakeholders may conclude that our performance related to corporate responsibility and sustainability matters is inadequate.
General Risk Factors We are subject to, and may in the future become subject to, claims and litigation that could result in significant expenses and could ultimately result in an unfavorable outcome for us.
We are subject to, and may in the future become subject to, claims and litigation that could result in significant expenses and could ultimately result in an unfavorable outcome for us.
We have entered into hedging agreements to address certain of our currency risks and intend to utilize local currency funding of expansions when appropriate. Risks Relating to the Consummation of the Combinations and our Transformation Efforts The failure to integrate successfully the businesses of Quidel and Ortho would adversely affect our future business and financial performance.
We have entered into hedging agreements to address certain of our currency risks and intend to utilize local currency funding of expansions when appropriate. Risks Relating to Our Integration and Business Efficiency Efforts The failure to integrate successfully the businesses of Quidel and Ortho would adversely affect our future business and financial performance.
As a result, if sales or revenues of our respiratory products fluctuate or decline for any reason, whether as a result of COVID-19 reaching an endemic stage, a mild respiratory season, market share loss or price pressure, obsolescence, regulatory matters, or any other reason, our operating results would be materially and adversely affected on a disproportionate basis.
As a result, if sales or revenues of our respiratory products fluctuate or decline for any reason, whether as a result of a mild respiratory season, market share loss or price pressure, obsolescence, regulatory matters, or any other reason, our operating results would be materially and adversely affected on a disproportionate basis.
In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the FCPA, the Bribery Act and the Brazilian Anti-Bribery Act, among others, and economic and trade sanctions, including those administered by the United Nations, the E.U., the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) and the U.S.
In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the FCPA, the Bribery Act and the Brazilian Anti-Bribery Act, among others, and economic and trade sanctions, including those administered by the United Nations, the EU, China, the Office of Foreign Assets Control of the U.S.
We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs. As of December 31, 2023, we had approximately 7,100 employees located around the world consisting of commercial, supply chain, quality, regulatory and compliance, R&D and general administrative personnel.
We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs. As of December 29, 2024, we had approximately 6,600 employees located around the world consisting of commercial, supply chain, quality, regulatory and compliance, R&D and general administrative personnel.
Our failure to satisfy stakeholder expectations related to our ESG performance or to accomplish or accurately track and report on our ESG goals on a timely basis, or at all, could result in the loss of business or difficulty obtaining new business or new supplier relationships, adversely affect our reputation, stock price, financial condition, results of operation or growth, expose us to increased scrutiny from stakeholders and enforcement authorities, which may result in litigation or regulatory action or otherwise subject us to liability, and present challenges in attracting and retaining talented employees.
Our failure to comply with sustainability regulations or to satisfy stakeholder expectations related to our sustainability performance or to accomplish or accurately track and report on our sustainability initiatives or goals on a timely basis, or at all, could result in the loss of business, inability to sell our products in certain jurisdictions, or difficulty obtaining new business or new supplier relationships, adversely affect our reputation, stock price, financial condition, results of operation or growth, expose us to increased scrutiny from stakeholders and enforcement authorities, which may result in litigation or regulatory action or otherwise subject us to liability, and present challenges in attracting and retaining talented employees.
If we are unable to realize the anticipated benefits and synergies expected from the Combinations and transformation within the anticipated timeframe, our business, financial condition and operating results may be adversely affected. We will continue to incur significant transaction and merger-related costs in connection with the Combinations.
If we are unable to realize the anticipated benefits and synergies expected from the Combinations and our business efficiency initiatives within the anticipated timeframe, our business, financial condition and operating results may be adversely affected. We will continue to incur significant integration-related costs in connection with the Combinations.
In the U.S., these healthcare laws and regulations include the federal Physician Self-Referral Law, federal Anti-Kickback Statute, federal civil and criminal false claims laws, including the FCA, the federal Civil Monetary Penalties Law, the Health Insurance Portability and Accountability Act of 1996, the federal Physician Payments Sunshine Act, the federal Food, Drug, and Cosmetics Act, U.S. federal consumer protection and unfair competition laws, and state law equivalents of each of the foregoing, as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.
In the U.S., these healthcare laws and regulations include the federal Physician Self-Referral Law, federal Anti-Kickback Statute, federal civil and criminal false claims laws, including the FCA, the federal Civil Monetary Penalties Law, HIPAA, the federal Physician Payments Sunshine Act, FDCA, U.S. federal consumer protection and unfair competition laws, and state law equivalents of each of the foregoing, as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.
A significant percentage of our total revenues is generated from a limited number of our product families. In particular, revenues from the sales of our respiratory products have represented a significant portion of our total revenues. Sales of our respiratory products accounted for approximately 24% of our total revenues for the year ended December 31, 2023.
A significant percentage of our total revenues is generated from a limited number of our product families. In particular, revenues from the sales of our respiratory products have represented a significant portion of our total revenues. Sales of our respiratory products accounted for approximately 18% of our total revenues for the year ended December 29, 2024.
We may not realize the full benefits of the Combinations, including the synergies, cost savings or sales or growth opportunities that we expect from the Combinations and transformation, or these benefits may take longer to realize than expected.
We may not realize the full benefits of the Combinations and our business efficiency initiatives, including the synergies, cost savings or sales or growth opportunities that we expect, or these benefits may take longer to realize than expected.
We assumed certain underfunded and unfunded Benefit Plan liabilities, which amounted to approximately $36.0 million as of December 31, 2023. Several of these plans are unfunded and, while we do not believe the 45 liabilities in relation to these plans are significant, they must be satisfied as they mature from our cash resources.
We assumed certain underfunded and unfunded Benefit Plan liabilities, which amounted to approximately $32.4 million as of December 29, 2024. Several of these plans are unfunded and, while we do not believe the liabilities in relation to these plans are significant, they must be satisfied as they mature from our cash resources.
Moreover, an adverse determination in any of these types of disputes could prevent us from developing, using, manufacturing or selling some of our processes or products and services; limit or restrict the type of work that employees involved with such products may perform for us; require us to obtain a license on the disputed rights, which may not be available on commercially reasonable terms, if at all; subject us to significant liability in the form of royalty payments, penalties, special and punitive 36 damages and attorneys’ fees; cause our distributors or end users to reduce or terminate purchases of our products; or require us to re-design our products or processes, any of which could materially and adversely affect our business, financial condition and results of operations.
Moreover, an adverse determination in any of these types of disputes could prevent us from developing, using, manufacturing or selling some of our processes or products and services; limit or restrict the type of work that employees involved with such products may perform for us; require us to obtain a license on the disputed rights, which may not be available on commercially reasonable terms, if at all; subject us to significant liability in the form of royalty payments, penalties, special and punitive damages and attorneys’ fees; cause our distributors or end users to reduce or terminate purchases of our products; or require us to re-design our products or processes, any of which could materially and adversely affect our business, financial condition and results of operations. 36 In addition to the foregoing, we may also be required to indemnify certain customers, distributors and strategic partners under our agreements with such parties if a third party alleges or if a court finds that our products or activities have infringed upon, misappropriated or misused another person’s proprietary rights.
Disruptions in the U.S., Europe, China or in other geographies, including as a result of the ongoing conflict in Ukraine and the Israel-Hamas conflict, or weakening of emerging markets, such as China, could adversely affect our sales, profitability and/or liquidity.
Disruptions in the U.S., Europe, China or in other geographies, including as a result of the ongoing conflicts in Ukraine and the Middle East, or increasing regulation in emerging markets, such as China, could adversely affect our sales, profitability and/or liquidity.
These provisions may delay, deter or prevent a change in control of us, adversely affecting the market price of our common stock. 47 Our Bylaws designate the Court of Chancery of the State of Delaware (the “Court of Chancery”) as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our Bylaws designate the Court of Chancery of the State of Delaware (the “Court of Chancery”) as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. 44 The terms of the Credit Agreement impose restrictions that may limit our current and future operating flexibility, particularly our ability to respond to changes in the economy or our industry or to take certain actions, which could harm our long-term interests and may limit our ability to make payments on our indebtedness.
The terms of the Credit Agreement impose restrictions that may limit our current and future operating flexibility, particularly our ability to respond to changes in the economy or our industry or to take certain actions, which could harm our long-term interests and may limit our ability to make payments on our indebtedness.
All of our issued shares of common stock are freely tradable without restriction or further registration under the Securities Act, except for any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act (“Rule 144”), including certain of our directors, executive officers and other affiliates, which shares may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. 48 All of our issued shares of common stock are freely tradable without restriction or further registration under the Securities Act, except for any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act (“Rule 144”), including certain of our directors, executive officers and other affiliates, which shares may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.
Health insurance premiums, co-payments and deductibles have also generally increased in recent years. These increases may cause individuals to forgo health insurance, as well as medical attention. This behavior may reduce the demand for certain of our diagnostics products and services.
These increases may cause individuals to forgo health insurance, as well as medical attention. This behavior may reduce the demand for certain of our diagnostics products and services.
Moreover, our market capitalization has increased significantly in the last few years. Accordingly, we may be benchmarked against larger peer companies, some of which may have more resources than us and thus may have achieved better ESG performance and/or a higher ESG rating profile.
Moreover, if our market capitalization increases, we may be benchmarked against larger peer companies, some of which may have more resources than us and thus may have achieved better sustainability performance and/or a higher sustainability rating profile.
They are also subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct. 35 We also depend on the interoperability of our mobile applications with popular mobile operating systems that we do not control, such as Android and iOS. Any changes in such systems that degrade the functionality of our digital solutions could negatively impact our business.
We also depend on the interoperability of our mobile applications with popular mobile operating systems that we do not control, such as Android and iOS. Any changes in such systems that degrade the functionality of our digital solutions could negatively impact our business.
Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the U.S. Certain of our intellectual property rights are held through license agreements and collaboration arrangements with third parties.
Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the U.S. Furthermore, in recent years, the U.S.
The divestiture or discontinuance of certain businesses could result, individually or in the aggregate, in the recognition of material losses and a material adverse effect on our results of operations. 32 Risks Relating to Our International Operations As a global business, we face risks relating to our non-U.S. operations and international sales, including inherent macroeconomic, geopolitical and regulatory risks, that could impact our financial performance, cause interruptions in our current business operations and impede our growth strategy.
Risks Relating to Our International Operations As a global business, we face risks relating to our non-U.S. operations and international sales, including inherent macroeconomic, geopolitical and regulatory risks, that could impact our financial performance, cause interruptions in our current business operations and impede our growth strategy.
Failure to obtain FDA clearance or approval would preclude commercialization in the U.S., which could materially and adversely affect our future results of operations. 37 Modifications or enhancements to a cleared or approved product that could significantly affect safety or effectiveness, or that constitute a major change in the intended use of the product, could require new 510(k) clearances or possibly approval of a new PMA or BLA, or a supplement to those applications.
Modifications or enhancements to a cleared or approved product that could significantly affect safety or effectiveness, or that constitute a major change in the intended use of the product, could require new 510(k) clearances or possibly approval of a new PMA or BLA, or a supplement to those applications.
These regulations impact many aspects of our operations, including development, manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, physician interaction and record-keeping.
Our businesses are extensively regulated by the FDA and other federal, state and foreign regulatory agencies. These regulations impact many aspects of our operations, including development, manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, physician interaction and record-keeping.
The FDA can authorize the emergency use of an unapproved medical product or an unapproved use of an approved medical product for certain emergency circumstances after the HHS Secretary has made a declaration of emergency justifying authorization of emergency use.
The FDA can authorize the emergency use of an unapproved medical product or an unapproved use of an approved medical product for certain emergency circumstances after the HHS Secretary has made a declaration of emergency justifying authorization of emergency use, as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.
Before we can sell certain of our products, we must conduct clinical studies intended to demonstrate that those products are safe and effective and perform as expected.
Before we can sell certain of our products, we must conduct clinical studies intended to demonstrate that those products are safe and effective and perform as expected. The results of these clinical studies are used to obtain regulatory clearance or approval from government authorities, such as the FDA.
If one or more of our products is claimed to be defective, we could be subject to claims of liability and harm to our reputation that could adversely affect our business. Our product development and production processes are complex and could expose our products to claims of defectiveness.
If one or more of our products is claimed to be defective or does not comply with applicable regulations, we could be subject to claims of liability and harm to our reputation that could adversely affect our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe SGC is comprised of members of our executive leadership team, including the Chief Financial Officer, Chief Operating Officer, General Counsel, Chief Administrative Officer, Chief Information Officer (“CIO”) and CISO.
Biggest changeOur CISO has over 20 years of global information security leadership experience across financial services, legal and medical device industries and over 35 years of broader IT experience. The SGC is comprised of members of our executive leadership team, including the CEO; CFO; Chief Operations Officer; Chief Legal Officer; Vice President, Information Technology; and CISO.
The SGC has the authority to (i) investigate any matter brought to its attention that may impact our ability to adequately protect our information assets and (ii) to involve its members, the Board, other steering committees, government agencies and law enforcement, as it deems appropriate to respond to and remediate such matters.
The SGC has the authority to (i) investigate any matter brought to its attention that may impact our ability to adequately protect our information assets and (ii) involve its members, the Board, other steering committees, government agencies and law enforcement, as it deems appropriate, to respond to and remediate such matters.
The Audit Committee of the Board oversees our cybersecurity risk management and strategy and has an oversight role that involves reviewing, establishing policies for, and assessing the efficacy of processes used to evaluate significant risk exposures and the measures management implements to mitigate these risks.
The Audit Committee oversees our cybersecurity risk management and strategy and has an oversight role that involves reviewing, establishing policies for, and assessing the efficacy of processes used to evaluate significant risk exposures and the measures management implements to mitigate these risks.
These processes are designed to promote (i) strong controls across our entire IT ecosystem, (ii) transparency across our IT infrastructure so that our information security team can detect, identify and escalate anomalies for further analysis and action, and (iii) a sound enterprise security architecture with security integrated into each phase of system implementation.
These processes are designed to promote (i) robust controls across our IT ecosystem, (ii) transparency across our IT infrastructure so that our information security team can detect, identify and escalate anomalies for further analysis and action, and (iii) a sound enterprise security architecture with security integrated into each phase of system implementation.
Additional information on cybersecurity risks we face is discussed in Part I, Item 1A, “Risk Factors,” under the heading “Risks Relating to Our IT Systems.” Oversight of cybersecurity risk involves a three-tiered hierarchy designed to leverage the appropriate level of expertise to assess and manage such risks.
Additional information on cybersecurity risks we face is discussed in Part I, Item 1A, “Risk Factors,” under the heading “Risks Relating to Our IT Systems.” Oversight of cybersecurity risk involves a three-tiered hierarchy designed to leverage the appropriate level of expertise to assess and manage such risks. This consists of our CISO, SGC and the Audit Committee.
In addition, we also periodically consult with outside advisors and experts to anticipate future trends, such as threats and issues within the healthcare industry as well as updates on key regulatory changes, including evolving cybersecurity policies and mandates from the FDA and the Cybersecurity and Infrastructure Security Agency.
In addition, we also periodically consult with outside advisors and experts on security controls of our products and manufacturing sites and to anticipate future trends, such as threats and issues within the healthcare industry as well as updates on key regulatory changes, including evolving cybersecurity policies and mandates from the FDA and the Cybersecurity and Infrastructure Security Agency.
In this role, the CISO is responsible for the effective operations of information security controls and management of information security and cybersecurity risks across the enterprise, including within our products and operations.
Our CISO is primarily responsible for our global information security program. In this role, the CISO is responsible for the effective operation of our information security controls and management of information security and cybersecurity risks across the enterprise, including within our products and operations.
The CIO, CISO, other members of the SGC, and other personnel also periodically update the Audit Committee on material cybersecurity risks, significant cybersecurity incidents, mitigation measures and impacts to the Company. The Board receives updates from management, including the CIO, and the Audit Committee on cybersecurity risks on at least an annual basis. 50
The Vice President, Information Technology, CISO, additional members of the SGC, and other personnel also annually update the Audit Committee on material cybersecurity risks, significant cybersecurity incidents, mitigation measures and impacts to the Company. The Board receives updates from management, including the Vice President, Information Technology, and the Audit Committee on cybersecurity risks on at least an annual basis. 50
Our cybersecurity risk management is part of our broader enterprise risk management process, which is managed by our internal audit team with oversight from our executive leadership, and ultimately, the Audit Committee and the Board.
This includes security by design, regular penetration testing, vulnerability scanning and standardization where possible of cybersecurity architecture principles. Our cybersecurity risk management is part of our broader enterprise risk management process, which is managed by our internal audit team with oversight from our executive leadership, and ultimately, the Audit Committee and the Board.
The CISO is also responsible for developing and implementing our information security policies and standards in accordance with applicable global regulatory requirements and facilitating updates to these policies and standards at least annually. Our CISO has 20 years of global information security leadership experience across financial services, legal and medical device industries and over 35 years of broader IT experience.
The CISO is also responsible for developing and implementing our information security policies and standards in accordance with applicable global regulatory requirements and facilitating updates to these policies and standards at least annually.
We believe that the processes and controls we have established to protect our stakeholders’ interests, including with respect to our current regulated products and internal systems, are robust and aligned with applicable cybersecurity regulations and certain identified industry best practices. This includes security by design, regular penetration testing, vulnerability scanning and standardization where possible of cybersecurity architecture principles.
We believe that the processes and controls we have established to protect our stakeholders’ interests, including with respect to our current regulated products and internal systems, are robust and generally aligned with applicable cybersecurity regulations and informed in part by certain industry standards, principles and frameworks, such as those set by the National Institute of Standards and Technology.
We aim to secure our data and information throughout their lifecycle – from creation, collection and processing to dissemination, use, storage and disposition. While we have not identified any material cybersecurity threats or incidents during the last fiscal year, there can be no guarantee that we will not be the subject of future successful attacks, threats or incidents.
While we have not identified any cybersecurity threats or incidents that have materially affected us since the beginning of the last fiscal year, there can be no guarantee that we will not be the subject of future successful attacks, threats or incidents that could materially affect us.
Removed
This consists of our Chief Information Security Officer (“CISO”), Security Governance Committee (“SGC”) and the Audit Committee of the Board. Our CISO is primarily responsible for our global information security program.
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Components of our cybersecurity program are also evaluated by third parties such as our customers, external auditors and government agencies.
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We aim to secure our data and information throughout their lifecycle – from creation, collection and processing to dissemination, use, storage and disposition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties At December 31, 2023, our material operating locations, which we define as the facilities we lease with more than 75,000 square feet plus all owned facilities of more than 20,000 square feet, were as follows: Location Status Lease Term Square Footage Primary Use Raritan, NJ Owned N/A 569,000 Administrative offices, R&D and manufacturing Rochester, NY (513 Technology Blvd) Owned N/A 438,628 Manufacturing San Diego, CA (Summers Ridge) Leased 2033 - options to extend for two additional 5-year periods 316,531 Administrative offices, sales and marketing, R&D and manufacturing (principal executive offices) Rochester, NY (100 Indigo Creek) Owned N/A 260,221 Office, R&D Pencoed, Wales Owned N/A 198,380 Office, manufacturing Athens, OH Leased 2027 149,240 Administrative offices, sales and marketing, R&D and manufacturing Carlsbad, CA (Rutherford) Leased 2036 - options to extend for two additional 5-year periods 128,745 Manufacturing Memphis, TN Leased 2026 116,500 Warehouse San Diego, CA (Waples Ct.) Leased 2031 - options to extend for two additional 5-year periods 106,412 Office, light manufacturing, storage, packaging, assembly and distribution Rochester, NY (130 Indigo Creek) Owned N/A 103,138 Office, R&D Strasbourg, France Owned N/A 97,951 Warehouse, service Rochester, NY (1000 Lee Road) Leased 2024 89,114 Manufacturing San Diego, CA (McKellar) Owned N/A 72,863 Administrative offices, R&D and manufacturing Pompano Beach, FL Owned N/A 21,500 Manufacturing We believe that our facilities are adequate for our current needs, and we currently do not anticipate any material difficulty in renewing any of our leases as they expire or securing additional or replacement facilities, in each case, on commercially reasonable terms.
Biggest changeProperties At December 29, 2024, our material operating locations, which we define as the facilities we lease with more than 75,000 square feet plus all owned facilities with more than 20,000 square feet, were as follows: Location Status Lease Term Square Footage Primary Use Raritan, NJ Owned N/A 569,000 Administrative offices, R&D and manufacturing Rochester, NY (513 Technology Blvd) Owned N/A 438,628 Manufacturing San Diego, CA (Summers Ridge) Leased 2033 - options to extend for two additional 5-year periods 316,531 Administrative offices, sales and marketing, R&D and manufacturing (principal executive offices) Rochester, NY (100 Indigo Creek) Owned N/A 260,221 Office, R&D Pencoed, Wales (1) Owned N/A 198,380 Office, manufacturing Athens, OH Leased 2027 149,240 Administrative offices, sales and marketing, R&D and manufacturing Carlsbad, CA (Rutherford) Leased 2036 - options to extend for two additional 5-year periods 128,745 Manufacturing Memphis, TN Leased 2026 116,500 Warehouse San Diego, CA (Waples Ct.) Leased 2031 - options to extend for two additional 5-year periods 106,412 Office, light manufacturing, storage, packaging, assembly and distribution Rochester, NY (130 Indigo Creek) Owned N/A 103,138 Office, R&D Strasbourg, France Owned N/A 97,951 Warehouse, service Rochester, NY (1000 Lee Road) Leased 2027 89,114 Manufacturing Pompano Beach, FL Owned N/A 21,500 Manufacturing (1) In December 2024, the Company entered into an agreement for the expansion of the office building and manufacturing facility.
However, in anticipation of our growth strategy, we may pursue additional facilities. Item 3. Legal Proceedings The information set forth in Part II, Item 8, “Financial Statements and Supplementary Data—Note 12. Commitments and Contingencies—Litigation and Other Legal Proceedings” is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 51 Part II
Legal Proceedings The information set forth in Part II, Item 8, “Financial Statements and Supplementary Data—Note 14. Commitments and Contingencies—Litigation and Other Legal Proceedings” is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 51 Part II
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We believe that our facilities are adequate for our current needs, and we currently do not anticipate any material difficulty in renewing any of our leases as they expire or securing additional or replacement facilities, in each case, on commercially reasonable terms. However, in anticipation of our growth strategy, we may pursue additional facilities. Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the three months ended December 31, 2023, the Company repurchased 120,000 shares of outstanding common stock under the Stock Repurchase Program for approximately $7.2 million. 52 STOCKHOLDER RETURN PERFORMANCE GRAPH Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock with the cumulative total returns of the Nasdaq Composite Index and Nasdaq Health Care Composite Index for the five years ended December 31, 2023.
Biggest changeWe did not repurchase any shares of our common stock in 2024 through the expiration date. 52 STOCKHOLDER RETURN PERFORMANCE GRAPH Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock with the cumulative total returns of the Nasdaq Composite Index and Nasdaq Health Care Composite Index for the five years ended December 29, 2024.
The graph assumes (i) an initial investment of $100 as of the market close on December 31, 2018 in our common stock, the Nasdaq Composite Index and the Nasdaq Health Care Composite Index and (ii) reinvestment of dividends.
The graph assumes (i) an initial investment of $100 as of the market close on December 31, 2019 in our common stock, the Nasdaq Composite Index and the Nasdaq Health Care Composite Index and (ii) reinvestment of dividends.
The graph represents stock price performance of Quidel, from fiscal year 2019 through May 27, 2022, and QuidelOrtho following the closing date of the Combinations. The stock price performance of our common stock depicted in the graph represents past performance only and is not necessarily indicative of future performance.
The graph represents stock price performance of Quidel, from fiscal year ended 2020 through May 27, 2022, and QuidelOrtho following the closing date of the Combinations. The stock price performance of our common stock depicted in the graph represents past performance only and is not necessarily indicative of future performance.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the symbol “QDEL.” As of February 22, 2024, we had approximately 88 common stockholders of record and we do not anticipate paying any cash dividends in the foreseeable future.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market under the symbol “QDEL.” As of February 19, 2025, we had approximately 84 common stockholders of record and we do not anticipate paying any cash dividends in the foreseeable future.
(2) On August 17, 2022, the Board authorized a stock repurchase program, allowing the Company to repurchase up to $300.0 million of its common stock through August 17, 2024 (the “Stock Repurchase Program”).
Issuer Purchases of Equity Securities On August 17, 2022, our Board authorized the Stock Repurchase Program, allowing us to repurchase up to $300.0 million of our common stock, which expired on August 17, 2024.
COMPARISON OF 5 YEAR TOTAL CUMULATIVE RETURN Among QuidelOrtho Corporation, the Nasdaq Composite and the Nasdaq Health Care Composite Indices Base Period Company/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 QuidelOrtho Corporation $ 100.00 $ 153.69 $ 367.98 $ 276.51 $ 175.48 $ 150.96 Nasdaq Composite Index $ 100.00 $ 135.23 $ 194.24 $ 235.78 $ 157.74 $ 226.24 Nasdaq Health Care Composite Index $ 100.00 $ 125.83 $ 163.63 $ 157.82 $ 125.58 $ 133.80 Item 6. [Reserved]
COMPARISON OF 5 YEAR TOTAL CUMULATIVE RETURN Among QuidelOrtho Corporation, the Nasdaq Composite and the Nasdaq Health Care Composite Indices Base Period Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 QuidelOrtho Corporation $ 100.00 $ 246.34 $ 174.03 $ 115.76 $ 100.20 $ 60.16 Nasdaq Composite Index $ 100.00 $ 143.95 $ 177.76 $ 119.14 $ 172.14 $ 227.78 Nasdaq Health Care Composite Index $ 100.00 $ 128.87 $ 124.76 $ 99.07 $ 105.73 $ 106.19 Item 6. [Reserved]
Removed
Issuer Purchases of Equity Securities The table below sets forth information regarding repurchases of our common stock by us during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) 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 (2) October 2, 2023 - October 29, 2023 3,674 $ 66.64 — $ 225,677,460 October 30, 2023 - November 26, 2023 121,783 60.28 120,000 218,444,460 November 27, 2023 - December 31, 2023 858 70.68 — 218,444,460 Total 126,315 $ 60.54 120,000 $ 218,444,460 (1) Includes shares surrendered, if any, to the Company to satisfy the payment of minimum tax withholding obligations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRevenues The following table compares Total revenues by business unit for fiscal years 2023, 2022 and 2021: Fiscal Year Ended (Dollars in millions) 2023 2022 2021 % Change 2023 vs. 2022 % Change 2022 vs. 2021 Labs $ 1,425.4 $ 820.2 $ 44.8 74 % 1,731 % Transfusion Medicine 648.5 393.8 — 65 % N/M Point of Care 892.2 1,955.3 1,453.3 (54) % 35 % Molecular Diagnostics 31.7 96.7 200.5 (67) % (52) % Total revenues $ 2,997.8 $ 3,266.0 $ 1,698.6 (8) % 92 % * N/M - Not meaningful For fiscal year 2023, Total revenues decreased to $2,997.8 million from $3,266.0 million for the prior year.
Biggest changeRevenues The following table compares Total revenues by business unit for fiscal years ended 2024, 2023 and 2022: Fiscal Year Ended (Dollars in millions) 2024 2023 2022 % Change 2024 vs. 2023 % Change 2023 vs. 2022 Labs $ 1,426.7 $ 1,425.4 $ 820.2 — % 74 % Immunohematology (1) 522.6 512.4 296.8 2 % 73 % Donor Screening (1) 115.5 136.1 97.0 (15) % 40 % Point of Care 694.1 892.2 1,955.3 (22) % (54) % Molecular Diagnostics 24.0 31.7 96.7 (24) % (67) % Total revenues $ 2,782.9 $ 2,997.8 $ 3,266.0 (7) % (8) % (1) For presentation purposes, as a result of the wind-down of the U.S. donor screening portfolio, the previously reported Transfusion Medicine business unit is shown in its two product categories: Immunohematology and Donor Screening.
We assess fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using a variety of methods including, but not limited to, an income 64 approach and a market approach, such as the estimation of future cash flows of the acquired business and current selling prices of similar assets.
We assess fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using a variety of methods including, but not limited to, an income approach and a market approach, such as the estimation of future cash flows of the acquired business and current selling prices of similar assets.
For these same reasons, the reagent rental model also benefits our commercial strategy in emerging markets. We believe that the shift in our sales strategy will grow our installed base, thereby 62 increasing sales of higher-margin assays, reagents and other consumables over the life of the customer contracts and enhancing our recurring revenue and cash flows.
For these same reasons, the reagent rental model also benefits our commercial strategy in emerging markets. We believe that the shift in our sales strategy will grow our installed base, thereby increasing sales of higher-margin assays, reagents and other consumables over the life of the customer contracts and enhancing our recurring revenue and cash flows.
The increase in Other expense (income), net in fiscal year 2023 compared to fiscal year 2022 was primarily related to (i) the release of tax reserves upon the settlement of certain U.S. federal tax matters, with an offsetting benefit recorded to income tax expense and (ii) net foreign currency losses.
The increase in Other expense, net in fiscal year ended 2023 compared to fiscal year ended 2022 was primarily related to (i) the release of tax reserves upon the settlement of certain U.S. federal tax matters, with an offsetting benefit recorded to income tax expense and (ii) net foreign currency losses.
Loss on Extinguishment of Debt Loss on extinguishment of debt was $24.0 million for fiscal year 2022, and was related to the satisfaction and discharge of the senior notes and termination of the former term loans and revolving credit facility of Ortho, which occurred in connection with the consummation of the Combinations.
Loss on Extinguishment of Debt Loss on extinguishment of debt was $24.0 million for fiscal year ended 2022, and was related to the satisfaction and discharge of the senior notes and termination of the former term loans and revolving credit facility of Ortho, which occurred in connection with the consummation of the Combinations.
Cash used for financing activities was $265.8 million for fiscal year 2023, and was primarily related to payments on long-term borrowings of $228.0 million, payments of deferred consideration of $30.3 million and payments of tax withholdings related to vesting of stock-based awards of $13.5 million.
Cash used for financing activities was $265.8 million for fiscal year ended 2023, and was primarily related to payments on long-term borrowings of $228.0 million, payments of deferred consideration of $30.3 million and payments of tax withholdings related to vesting of stock-based awards of $13.5 million.
On March 31, 2023, we entered into an amendment to our existing receivables purchase agreement (the “RPA”), by and among Ortho-Clinical Diagnostics US FinanceCo I, LLC (“Ortho FinanceCo I”), as Seller, our wholly owned receivables financing subsidiary, Wells Fargo Bank, N.A., as administrative agent (the “Agent”), Ortho-Clinical Diagnostics, Inc., as the Master Servicer and as an Originator (“Ortho Inc.”), Quidel Corporation, as an Originator, and certain Purchasers.
Receivables Purchase Agreement On March 31, 2023, we entered into an amendment to our existing RPA, by and among Ortho-Clinical Diagnostics US FinanceCo I, LLC (“Ortho FinanceCo I”), as Seller, our wholly owned receivables financing subsidiary, Wells Fargo Bank, N.A., as administrative agent (the “Agent”), Ortho-Clinical Diagnostics, Inc., as the Master Servicer and as an Originator (“Ortho Inc.”), Quidel Corporation, as an Originator, and certain Purchasers.
For fiscal year 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to a decrease in our pre-acquisition U.S. federal reserves for uncertain tax positions due to settlement of certain tax matters partially offset by net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Taxed Income (“GILTI”).
For fiscal year ended 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to a decrease in our pre-acquisition U.S. federal reserves for uncertain tax positions due to settlement of certain tax matters partially offset by net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Taxed Income.
With our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, we aim to provide clarity to clinicians and patients to help create better health outcomes. Our global infrastructure and commercial reach support our customers across more than 130 countries and territories with quality diagnostics, a broad test portfolio and market-leading service.
With our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, we aim to support clarity for clinicians and patients to help create better health outcomes. Our global infrastructure and commercial reach support our customers across more than 130 countries and territories with quality diagnostics, a broad test portfolio and market-leading service.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. Reserve for Contractual Rebates We record revenues primarily from product sales.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements. Allowance for Contractual Rebates We record revenues primarily from product sales.
While we believe that we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcome of examinations by tax authorities in determining the adequacy of our provision for income taxes. See Part II, Item 8, “Financial Statements and Supplementary Data—Note 6. Income Taxes” for more information on income taxes.
While we believe that we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcome of examinations by tax authorities in determining the adequacy of our provision for income taxes. Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 6. Income Taxes” for more information on income taxes.
See Part II, Item 8, “Financial Statements and Supplementary Data—Note 5. Segment and Geographic Information” for a reconciliation of Adjusted EBITDA by reportable segment to (Loss) income before income taxes.
Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 5. Segment and Geographic Information” for a reconciliation of Adjusted EBITDA by reportable segment to (Loss) income before income taxes.
This discussion should be read in conjunction with the section entitled “Future Uncertainties and Forward-Looking Statements” on page 4 and the “Risk Factors” starting on page 26 of this Annual Report.
This discussion should be read in conjunction with the section entitled “Future Uncertainties and Forward-Looking Statements” on page 4 and the “Risk Factors” starting on page 25 of this Annual Report.
Results of Operations Comparison of fiscal years ended 2023, 2022 and 2021 Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31. Fiscal years 2023, 2022 and 2021 were 52 weeks.
Results of Operations Comparison of fiscal years ended 2024, 2023 and 2022 Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31. Fiscal years ended 2024, 2023 and 2022 were 52 weeks.
Fiscal Year Ended January 1, 2023 Cash provided by operating activities was $885.3 million for fiscal year 2022, and reflected net income of $548.7 million and non-cash adjustments of $389.8 million, primarily associated with depreciation and amortization, stock-based compensation expense, deferred income taxes, loss on extinguishment of debt and the unwind of the inventory fair value step up initially recorded in connection with the Combinations.
Fiscal Year Ended January 1, 2023 Cash provided by operating activities was $885.3 million for fiscal year ended 2022, and reflected net income of $548.7 million and non-cash adjustments of $389.8 million, primarily associated with depreciation and amortization, stock-based compensation expense, change in deferred tax assets and liabilities, loss on extinguishment of debt and the unwind of the inventory fair value step up initially recorded in connection with the Combinations.
We expect demand for our respiratory products to continue to fluctuate and pricing pressures on certain products to persist as a result of a number of factors, including increased supply, emergence and spread of new variants, and the seasonal demands of the respiratory seasons, which are typically more prevalent during the fall and winter.
We expect overall demand for our non-respiratory and respiratory products to continue to fluctuate and pricing pressures on certain products to persist as a result of a number of factors, including increased supply, emergence and spread of new variants, and the seasonal demands of the respiratory season, which are typically more prevalent during the fall and winter.
While we expect the revenues and financial results from our respiratory products to be affected by the seasonal demands of the respiratory seasons, we intend to continue our focus on prudently managing our business and delivering improved financial results, while at the same time striving to introduce new products and services into the market.
While we expect the revenues and financial results from our non-respiratory and respiratory products to be affected by the highly competitive environment and our respiratory products to be affected by the seasonal demands of the respiratory season, we intend to continue our focus on prudently managing our business and delivering improved financial results, while at the same time striving to introduce new products and services into the market.
The increases in Labs and Transfusion Medicine revenues were primarily related to incremental revenues from the Combinations. Additionally, the increase in Labs revenue included a $19.2 million settlement award from a third party related to one of our collaboration agreements.
The increases in Labs, Immunohematology and Donor Screening revenues were primarily related to incremental revenues from the Combinations. Additionally, the increase in Labs revenue included a $19.2 million settlement award from a third party related to one of our collaboration agreements.
Fair value of the assets acquired and liabilities assumed, including intangible assets, in-process research and development (“IPR&D”), and contingent payments, are measured based on the assumptions and estimations with regards to variable factors such as the amount and timing of future cash flows for the asset or liability being measured, appropriate risk-adjusted discount rates, nonperformance risk, or other factors that market participants would consider.
Fair value of the assets acquired and liabilities assumed, including intangible assets, IPR&D, and contingent payments, are measured based on the assumptions and estimations with regards to variable factors such as the amount and timing of future cash flows for the asset or liability being measured, appropriate risk-adjusted discount rates, nonperformance risk, or other factors that market participants would consider.
The increase in cost of sales, excluding amortization of intangible assets as a percentage of revenue, was primarily driven by incremental revenues in the Labs and Transfusion Medicine business units as a result of the Combinations and a decrease in sales of respiratory products.
The increase in cost of sales, excluding amortization of intangible assets as a percentage of revenue, was primarily driven by incremental revenues in the Labs, Immunohematology and Donor Screening business units as a result of the Combinations and a decrease in sales of respiratory products.
Business Combination” for further discussion regarding the Combinations. 61 Cash provided by financing activities was $252.0 million for fiscal year 2022, and was primarily related to proceeds from long-term borrowings, net of debt issuance costs of $2,734.5 million, payments on long-term borrowings and extinguishment costs of $2,388.3 million, repurchases of common stock of $74.3 million and payments of $37.7 million for contingent and deferred consideration.
Cash provided by financing activities was $252.0 million for fiscal year ended 2022, and was primarily related to proceeds from long-term borrowings, net of debt issuance costs of $2,734.5 million, payments on long-term borrowings and extinguishment 61 costs of $2,388.3 million, repurchases of common stock of $74.3 million and payments of $37.7 million for contingent and deferred consideration.
As of December 31, 2023, we had a valuation allowance of $274.7 million, which represents the portion of our deferred tax assets that management believes is not more likely than not to be realized. We will continue to assess the need for a valuation allowance on our deferred tax assets by evaluating both positive and negative evidence that may exist.
As of December 29, 2024, we had a valuation allowance of $142.4 million, which represents the portion of our deferred tax assets that management believes is not more likely than not to be realized. We will continue to assess the need for a valuation allowance on our deferred tax assets by evaluating both positive and negative evidence that may exist.
Specifically, we plan to wind-down only the VIP platform and microplate assays, which are only sold in the U.S., and have a lower growth and margin profile than other parts of our Transfusion Medicine business. This wind-down will not affect any donor screening portfolio outside of the U.S.
Specifically, we plan to wind-down only the VIP platform and microplate assays, which are only sold in the U.S. and have a lower growth and margin profile. This wind-down will not affect any donor screening portfolio outside of the U.S.
In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix and customer contractual terms, which vary across customers, the related balance of which was $31.3 million of our rebate reserves at December 31, 2023.
In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix and customer contractual terms, which vary across customers, the related balance of which was $39.8 million of our rebate reserves at December 29, 2024.
Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue primarily in the following business units: Labs, Transfusion Medicine, Point of Care and Molecular Diagnostics.
Latin America and JPAC (Japan and Asia Pacific) are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics.
For our annual evaluation for impairment of goodwill as of October 2, 2023, we bypassed the qualitative assessment and proceeded directly to the quantitative goodwill impairment test for all reporting units. This quantitative analysis required us to make estimates and assumptions in order to calculate the fair value of our reporting units.
For our annual evaluation for impairment of goodwill as of September 30, 2024, we bypassed the qualitative assessment and 63 proceeded directly to the quantitative goodwill impairment test for all reporting units. This quantitative analysis required us to make estimates and assumptions in order to calculate the fair value of our reporting units.
To mitigate these supply chain challenges, we continue to (i) partner with suppliers to invest in additional capacity and raw material inventory, (ii) diversify our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components and (iii) create redundancy in our global supply chain.
To help mitigate these supply chain challenges, we (i) partner with suppliers to invest in additional capacity and raw material inventory, (ii) diversify our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components, (iii) create redundancy in our global supply chain and (iv) insource activity where it makes strategic and financial sense.
Long-term Liquidity Outlook Our future capital requirements and the adequacy of our available funds to service any long-term debt outstanding and to fund working capital expenditures and business development efforts will depend on many factors, including: • our ability to successfully integrate the recently acquired Ortho business and realize cross-selling revenue synergies; • our ability to realize revenue growth from our new technologies and create innovative products in our markets; • outstanding debt and covenant restrictions; • our ability to leverage our operating expenses to realize operating profits as we grow revenue; • competing technological and market developments; and • our entry into strategic collaborations with other companies or acquisitions of other companies or technologies to enhance or complement our product and service offerings.
Long-term Liquidity Outlook Our future capital requirements and the adequacy of our available funds to service any long-term debt outstanding and to fund working capital expenditures and business development efforts will depend on many factors, including: • our ability to successfully integrate the Ortho business and realize cross-selling revenue synergies; • our ability to realize revenue growth from our new technologies and create innovative products in our markets; • outstanding debt and covenant restrictions; • our ability to leverage our operating expenses to realize operating profits as we grow revenue; • competing technological and market developments; and • our entry into strategic collaborations with other companies or acquisitions of other companies or technologies to enhance or complement our product and service offerings. 62 Contractual Obligations and Off-Balance Sheet Arrangements In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future.
Basis of Presentation and Summary of Significant Accounting Policies.” Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
Basis of Presentation and Summary of Significant Accounting Policies.” Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
For fiscal years 2023, 2022 and 2021, revenues related to our respiratory products accounted for approximately 24%, 57% and 81% of our Total revenues, respectively, primarily driven by sales of our COVID-19 products . Planned Wind-Down of U.S. Donor Screening Portfolio In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio.
For fiscal years ended 2024, 2023 and 2022, revenues related to our respiratory products accounted for approximately 18%, 24% and 57% of our Total revenues, respectively . Planned Wind-Down of U.S. Donor Screening Portfolio In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio.
Our operations in Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” The key indicators that we monitor are as follows: • Total revenues — This measure is discussed in the section entitled “Results of Operations.” • Adjusted EBITDA — Adjusted EBITDA by reportable segment is used by our management to measure and evaluate the internal operating performance of our reportable segments.
The key indicators that we monitor are as follows: • Total revenues — This measure is discussed in the section entitled “Results of Operations.” • Adjusted EBITDA — Adjusted EBITDA by reportable segment is used by our management to measure and evaluate the internal operating performance of our reportable segments.
The decrease was primarily driven by lower demand for QuickVue and Sofia SARS Antigen assays, partially offset by incremental revenues of $433.8 million from the Combinations. Total revenues wer e $2,536.5 million for fiscal year 2022, compared to $1,500.2 million for fiscal year 2021. During fiscal year 2022, the impact of the Combinations contributed $607.3 million to Total revenues.
Total revenues wer e $1,877.1 million for fiscal year ended 2023, compared to $2,536.5 million for fiscal year ended 2022. The decrease was primarily driven by lower demand for QuickVue and Sofia SARS Antigen assays, partially offset by incremental revenues of $433.8 million from the Combinations.
The decrease was primarily driven by lower demand for QuickVue and Sofia SARS Antigen assays, partially offset by decreased distribution costs and approximately $160 million of incremental impact of the Combinations. Adjusted EBITDA was $1,614.6 million for fiscal year 2022, compared to $1,028.5 million for fiscal year 2021.
Adjusted EBITDA was $1,025.2 million for fiscal year ended 2023, compared to $1,689.2 million for fiscal year ended 2022. The decrease was primarily driven by lower demand for QuickVue and Sofia SARS Antigen assays, partially offset by decreased distribution costs and approximately $160 million of incremental impact of the Combinations.
Cash used for investing activities was $187.6 million for fiscal year 2023, and was primarily related to $209.3 million in purchases of property, equipment, investments and intangibles. We also purchased $60.1 million and sold $78.3 million of marketable securities during fiscal year 2023.
Cash used for investing activities was $187.6 million for fiscal year ended 2023, and was primarily related to $209.3 million in purchases of property, equipment, investments and intangibles and $13.5 million in proceeds from government assistance allocated to fixed assets. We also purchased $60.1 million and sold $78.3 million of marketable securities during fiscal year ended 2023.
During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. We record these adjustments to the provisional amounts with a corresponding offset to goodwill.
During the measurement period, we adjust the 64 provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.
The increase was primarily driven by incremental revenues of $110.1 million from the Combinations, partially offset by a decrease in Point of Care revenue. Total revenues were $206.8 million for fiscal year 2022, compared to $69.6 million for fiscal year 2021.
The increase was primarily driven by increases in Immunohematology and Point of Care revenues. Total revenues were $327.3 million for fiscal year ended 2023, compared to $206.8 million for fiscal year ended 2022. The increase was primarily driven by incremental revenues of $110.1 million from the Combinations, partially offset by a decrease in Point of Care revenue.
During fiscal year 2023, we transferred $154.6 million of instrument inventories from Inventories to Property, plant and equipment, net, further increasing our investment in property, plant and equipment.
During fiscal year ended 2024, we transferred $148.9 million of instrument inventories from Inventories to Property, plant and equipment, net, further increasing our investment in property, plant and equipment.
Any adjustments identified after the measurement period are recorded in the Consolidated Statements of (Loss) Income. Inventory Valuations We periodically review inventory for both potential obsolescence and potential declines in anticipated selling prices.
We record these adjustments to the provisional amounts with a corresponding offset to goodwill. Any adjustments identified after the measurement period are recorded in the Consolidated Statements of (Loss) Income. Inventory Valuations We periodically review inventory for both potential obsolescence and potential declines in anticipated selling prices.
Other Expense (Income), Net Other expense (income), net was $20.6 million, $8.1 million and $(0.1) million for fiscal years 2023, 2022 and 2021, respectively.
Other Expense, Net Other expense, net was $7.1 million, $20.6 million and $8.1 million for fiscal years ended 2024, 2023 and 2022, respectively.
Cost of Sales, Excluding Amortization of Intangible Assets Cost of sales, excluding amortization of intangible assets, increased to $1,503.4 million, or 50.2% of Total revenues, for fiscal year 2023, compared to $1,330.0 million, or 40.7% of Total revenues, for fiscal year 2022.
Cost of sales, excluding amortization of intangible assets, increased to $1,500.7 million, or 50.1% of Total revenues, for fiscal year ended 2023, compared to $1,329.8 million, or 40.7% of Total revenues, for fiscal year ended 2022.
Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 10. Stockholders’ Equity.” Liquidity Outlook Short-term Liquidity Outlook Our primary source of liquidity, other than our holdings of Cash and cash equivalents, has been cash flows from operations. Cash generated from operations provides us with the financial flexibility we need to meet normal operating, investing and financing needs.
Liquidity Outlook Short-term Liquidity Outlook Our primary source of liquidity, other than our holdings of Cash and cash equivalents, has been cash flows from operations. Cash generated from operations provides us with the financial flexibility we need to meet normal operating, investing and financing needs.
Our total rebate reserve was $75.6 million at December 31, 2023. 63 Goodwill and Intangible Assets The useful lives of intangible assets with definite lives are based on the expected number of years the asset will generate revenue or otherwise be used by us and the related amortization is based on the straight-line method.
Goodwill and Intangible Assets The useful lives of intangible assets with definite lives are based on the expected number of years the asset will generate revenue or otherwise be used by us and the related amortization is based on the straight-line method.
Income Taxes For fiscal years 2023 and 2022, we recognized income tax benefits of $19.0 million in relation to loss before taxes of $29.1 million and income tax provisions of $187.2 million in relation to income before taxes of $735.9 million, resulting in effective tax rates of 65.3% and 25.4%, respectively.
Income Taxes For fiscal years ended 2024 and 2023, we recognized income tax benefits of $79.5 million in relation to loss before taxes of $2,131.5 million and $19.0 million in relation to loss before taxes of $29.1 million, resulting in effective tax rates of 3.7% and 65.3%, respectively.
The increase was primarily driven by incremental revenues of $95.0 million from the Combinations, partially offset by lower Point of Care revenue, primarily related to decreased demand for QuickVue SARS Antigen assays. Total revenues were $220.0 million for fiscal year 2022, compared to $58.0 million for fiscal year 2021.
The increase was primarily driven by incremental revenues of $95.0 million from the Combinations, partially offset by lower Point of Care revenue, primarily related to decreased demand for QuickVue SARS Antigen assays. Adjusted EBITDA was $130.5 million for fiscal year ended 2024, compared to $127.2 million for fiscal year ended 2023.
The increase was primarily driven by approximately $29 million of incremental impact of the Combinations, partially offset by lower Point of Care revenue and a shift in product mix. Adjusted EBITDA was $104.1 million for fiscal year 2022, compared to $24.1 million for fiscal year 2021.
The increase was primarily driven by approximately $29 million of incremental impact of the Combinations, partially offset by lower Point of Care revenue and a shift in product mix.
Currency exchange rates had an unfavorable impact of 100 basis points and 300 basis points on our growth rate for fiscal years 2023 and 2022, respectively. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products.
These decreases were primarily driven by variability of our U.S. respiratory products. Currency exchange rates had an unfavorable impact of approximately 60 basis points and 100 basis points on our growth rates for fiscal years ended 2024 and 2023, respectively. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products.
Despite our mitigation efforts, such disruptions and challenges have materially affected and could further materially affect our ability to timely manufacture and distribute our products and could unfavorably impact our results of operations depending on the nature and duration of such disruptions and challenges. 54 Outlook Our financial performance and results of operations will depend on future developments and other factors that are highly uncertain, continuously evolving and unpredictable, including the occurrence, spread, severity, duration and emergence of new variants of respiratory diseases, including flu, strep, RSV and COVID-19, as well as ongoing supply, production and logistics challenges.
Outlook Our financial performance and results of operations will depend on future developments and other factors that are highly uncertain, continuously evolving and unpredictable, including the occurrence, spread, severity, duration and emergence of new variants of respiratory diseases, including flu, strep, RSV and COVID-19, as well as ongoing supply, production and logistics challenges.
Cash Flow Summary Fiscal Year Ended (In millions) 2023 2022 2021 Net cash provided by operating activities $ 280.2 $ 885.3 $ 805.9 Net cash used for investing activities (187.6) (1,644.2) (319.5) Net cash (used for) provided by financing activities (265.8) 252.0 (173.1) Effect of exchange rates on cash (1.2) (2.0) (0.4) Net (decrease) increase in cash, cash equivalents and restricted cash $ (174.4) $ (508.9) $ 312.9 Fiscal Year Ended December 31, 2023 Cash provided by operating activities was $280.2 million for fiscal year 2023, and reflected a net loss of $10.1 million and non-cash adjustments of $485.2 million, primarily associated with depreciation and amortization, stock-based compensation expense and accretion of interest on deferred consideration.
Cash Flow Summary Fiscal Year Ended (In millions) 2024 2023 2022 Net cash provided by operating activities $ 83.0 $ 280.2 $ 885.3 Net cash used for investing activities (149.9) (187.6) (1,644.2) Net cash provided by (used for) financing activities 48.8 (265.8) 252.0 Effect of exchange rates on cash (2.9) (1.2) (2.0) Net decrease in cash, cash equivalents and restricted cash $ (21.0) $ (174.4) $ (508.9) Fiscal Year Ended December 29, 2024 Cash provided by operating activities was $83.0 million for fiscal year ended 2024, and reflected a net loss of $2,052.0 million and non-cash adjustments of $2,293.7 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities, as well as depreciation and amortization, asset impairment charge and stock-based compensation expense.
Research and Development Expense Research and development expense for fiscal year 2023 increased by $56.3 million, or 29.6%, to $246.8 million from $190.5 million for the prior year, primarily due to the incremental impact of the Combinations, as well as increased costs related to the development of Savanna, QuickVue OTC assays and Sofia products.
Research and development expense for fiscal year ended 2023 increased by $57.1 million, or 30.4%, to $245.0 million from $187.9 million for the prior year, primarily due to the incremental impact of the Combinations, as well as increased costs related to the development of Savanna, QuickVue OTC assays and Sofia products.
On May 27, 2022, pursuant to the BCA, Quidel and Ortho consummated the Combinations and each of Quidel and Ortho became a wholly owned subsidiary of QuidelOrtho. Our Consolidated Financial Statements for 2023 include a full year of Ortho operations. For additional information about the Combinations, see Part II, Item 8, “Financial Statements and Supplementary Data—Note 2.
On May 27, 2022, pursuant to the BCA, Quidel and Ortho consummated the Combinations and each of Quidel and Ortho became a wholly owned subsidiary of QuidelOrtho. Our Consolidated Financial Statements for fiscal years ended 2024 and 2023 each include a full year of Ortho operations.
North America Total revenues and Adjusted EBITDA for North America were as follows: Fiscal Year Ended (Dollars in millions) 2023 2022 2021 % Change 2023 vs. 2022 % Change 2022 vs. 2021 Total revenues $ 1,877.1 $ 2,536.5 $ 1,500.2 (26) % 69 % Adjusted EBITDA $ 949.2 $ 1,614.6 $ 1,028.5 (41) % 57 % Total revenues were $1,877.1 million for fiscal year 2023, compared to $2,536.5 million for fiscal year 2022.
North America Total revenues and Adjusted EBITDA for North America were as follows: Fiscal Year Ended (Dollars in millions) 2024 2023 2022 % Change 2024 vs. 2023 % Change 2023 vs. 2022 Total revenues $ 1,619.8 $ 1,877.1 $ 2,536.5 (14) % (26) % Adjusted EBITDA $ 892.1 $ 1,025.2 $ 1,689.2 (13) % (39) % Total revenues were $1,619.8 million for fiscal year ended 2024, compared to $1,877.1 million for fiscal year ended 2023.
Molecular Diagnostics revenue decreased by $65.0 million, primarily driven by lower demand for the Lyra SARS Antigen assay due to the end of the public health emergency in the U.S. Currency exchange rates had an unfavorable impact of approximately 100 basis points on the growth rate for fiscal year 2023.
Molecular Diagnostics revenue decreased by $65.0 million, primarily driven by lower demand for the Lyra SARS Antigen assay due to the end of the public health emergency in the U.S.
China Total revenues and Adjusted EBITDA for China were as follows: Fiscal Year Ended (Dollars in millions) 2023 2022 2021 % Change 2023 vs. 2022 % Change 2022 vs. 2021 Total revenues $ 310.1 $ 220.0 $ 58.0 41 % 279 % Adjusted EBITDA $ 129.1 $ 104.1 $ 24.1 24 % 332 % Total revenues were $310.1 million for fiscal year 2023, compared to $220.0 million for fiscal year 2022.
China Total revenues and Adjusted EBITDA for China were as follows: Fiscal Year Ended (Dollars in millions) 2024 2023 2022 % Change 2024 vs. 2023 % Change 2023 vs. 2022 Total revenues $ 325.0 $ 310.1 $ 220.0 5 % 41 % Adjusted EBITDA $ 130.5 $ 127.2 $ 99.4 3 % 28 % Total revenues were $325.0 million for fiscal year ended 2024, compared to $310.1 million for fiscal year ended 2023.
In addition, we expect to continue to evaluate strategic opportunities to expand our product lines and services, production capabilities, technologies and geographic footprint and address other business challenges and opportunities.
We expect to continue to evaluate strategic opportunities to (i) expand our product lines and services, production capabilities, technologies and geographic footprint and address other business challenges and opportunities, and (ii) rationalize and consolidate facilities with the goal to improve our long-term results.
Operating Expenses The following table summarizes operating expenses for fiscal years 2023, 2022 and 2021: Fiscal Year Ended (Dollars in millions) 2023 % of Total Revenues 2022 % of Total Revenues 2021 % of Total Revenues Selling, marketing and administrative $ 763.2 25.5 % $ 621.0 19.0 % $ 239.6 14.1 % Research and development 246.8 8.2 % 190.5 5.8 % 95.7 5.6 % Amortization of intangible assets 204.8 6.8 % 132.5 4.1 % 27.4 1.6 % Acquisition and integration costs 113.4 3.8 % 136.0 4.2 % 9.6 0.6 % Other operating expenses 27.1 0.9 % 12.3 0.4 % — — % Selling, Marketing and Administrative Expenses Selling, marketing and administrative expenses for fiscal year 2023 increased by $142.2 million, or 22.9%, to $763.2 million from $621.0 million for the prior year, primarily due to the incremental impact of the Combinations, partially offset by freight expense due to lower sales and shipment volume and lower employee compensation costs.
Operating Expenses The following table summarizes operating expenses for fiscal years ended 2024, 2023 and 2022: Fiscal Year Ended (Dollars in millions) 2024 % of Total Revenues 2023 % of Total Revenues 2022 % of Total Revenues Selling, marketing and administrative $ 766.8 27.6 % $ 763.2 25.5 % $ 621.0 19.0 % Research and development 218.7 7.9 % 245.0 8.2 % 187.9 5.8 % Amortization of intangible assets 203.4 7.3 % 204.8 6.8 % 132.5 4.1 % Acquisition and integration costs 127.2 4.6 % 113.4 3.8 % 136.0 4.2 % Goodwill impairment charge 1,822.6 N/M — N/M — N/M Asset impairment charge 56.9 N/M 4.5 N/M 2.8 N/M Other operating expenses 51.8 1.9 % 27.1 0.9 % 12.3 0.4 % * N/M - Not meaningful Selling, Marketing and Administrative Expenses Selling, marketing and administrative expenses for fiscal year ended 2024 increased by $3.6 million, or 0.5%, to $766.8 million from $763.2 million for the prior year, primarily due to higher incentive-based employee compensation costs, partially offset by compensation costs related to cost-savings initiatives and lower advertising costs.
The increase was primarily driven by incremental revenues from the Combinations, partially offset by lower Point of Care revenue and increased selling and distribution costs. Adjusted EBITDA was $31.7 million for fiscal year 2022, compared to $28.1 million for fiscal year 2021.
The increase was primarily driven by incremental revenues from the Combinations, partially offset by lower Point of Care revenue and increased selling and distribution costs.
The increase was primarily driven by incremental revenues of $177.1 million from the Combinations and higher Labs revenue, partially offset by lower Point of Care revenue. Total revenues w ere $302.7 million for fiscal year 2022, compared to $70.8 million for fiscal year 2021.
The increase was primarily driven by incremental revenues of $177.1 million from the Combinations and higher Labs revenue, partially offset by lower Point of Care revenue. Adjusted EBITDA was $133.5 million for fiscal year ended 2024, compared to $115.3 million for fiscal year ended 2023.
Liquidity and Capital Resources As of December 31, 2023 and January 1, 2023, the principal sources of liquidity consisted of the following: (Dollars in millions) December 31, 2023 January 1, 2023 Cash and cash equivalents $ 118.9 $ 292.9 Marketable securities, current 48.4 52.1 Marketable securities, non-current 7.4 21.0 Total cash, cash equivalents and marketable securities $ 174.7 $ 366.0 Amount available to borrow under the Revolving Credit Facility $ 787.1 $ 786.9 Working capital including cash and cash equivalents and marketable securities, current $ 476.7 $ 568.1 As of December 31, 2023, we had $118.9 million in Cash and cash equivalents, a $174.0 million decrease from January 1, 2023.
The increase was primarily driven by approximately $37 million of incremental impact of the Combinations, partially offset by lower Point of Care revenue. 59 Liquidity and Capital Resources As of December 29, 2024 and December 31, 2023, our principal sources of liquidity consisted of the following: (Dollars in millions) December 29, 2024 December 31, 2023 Cash and cash equivalents $ 98.3 $ 118.9 Marketable securities, current — 48.4 Marketable securities, non-current — 7.4 Total cash, cash equivalents and marketable securities $ 98.3 $ 174.7 Amount available to borrow under the Revolving Credit Facility $ 589.0 $ 787.1 Working capital including cash and cash equivalents and marketable securities, current $ 220.1 $ 476.7 As of December 29, 2024, we had $98.3 million in Cash and cash equivalents, a $20.6 million decrease from December 31, 2023.
In addition, we routinely evaluate our supply chain for potential gaps and continue to take other steps intended to help address continuity. In our distribution operations, we have been investing in and implementing automation capabilities to help improve accuracy and timeliness of customer shipments.
In addition, we routinely evaluate our supply chain for potential gaps and continue to take other steps intended to help address continuity.
Costs for fiscal year 2021 were primarily related to the evaluation of new business development opportunities, including the Combinations. Other Operating Expenses Other operating expenses were $27.1 million and $12.3 million for fiscal years 2023 and 2022, respectively, which were primarily related to the profit share expense for our Joint Business with Grifols acquired in connection with the Combinations.
Other Operating Expenses Other operating expenses were $51.8 million, $27.1 million and $12.3 million for fiscal years ended 2024, 2023 and 2022, respectively, which were primarily related to the profit share expense for our Joint Business with Grifols and, in fiscal year ended 2024, a $20.0 million write off of the tax assessment refund.
Fiscal Year Ended January 2, 2022 Cash provided by operating activities was $805.9 million for fiscal year 2021, and reflected net income of $704.2 million and non-cash adjustments of $104.5 million, primarily associated with depreciation and amortization, stock-based compensation expense and accretion of interest on deferred consideration.
Fiscal Year Ended December 31, 2023 Cash provided by operating activities was $280.2 million for fiscal year ended 2023, and reflected a net loss of $10.1 million and non-cash adjustments of $485.2 million, primarily associated with depreciation and amortization, stock-based compensation expense, change in deferred tax assets and liabilities and accretion of interest on deferred consideration.
While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments.
While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments. The winding down of the U.S. donor screening portfolio, as compared to prior years, contributed to the decline in revenue with a margin lower than our overall margin.
The excess of the estimated fair value over carrying value for our China reporting unit was approximately 170%. To evaluate the sensitivity of the fair value calculations used in the goodwill impairment test, the Company applied a hypothetical 5% decrease to the fair values of each reporting unit and compared those hypothetical values to the reporting unit carrying values.
To evaluate the sensitivity of the fair value calculations used in the interim goodwill impairment test for the EMEA and Latin America reporting units, we applied a hypothetical 5% decrease to the fair value of each reporting unit and compared that hypothetical value to the reporting unit’s carrying value.
Under the market approach, we estimated the fair value based on market multiples of our revenue and EBITDA. In all instances, the estimated fair values of our reporting units exceeded their carrying values and consequently did not result in an impairment.
Under the market approach, we estimated the fair value based on market multiples of our revenue and EBITDA. We concluded that the China and JPAC reporting units’ carrying values exceeded their respective estimated fair values.
Cash used for investing activities was $1,644.2 million for fiscal year 2022, and was primarily related to the Combinations. We purchased $140.9 million of property, equipment, investments and intangibles and received $18.4 million of proceeds from government assistance allocated to fixed assets. We also purchased $63.7 million and sold $53.4 million of marketable securities during fiscal year 2022.
We purchased $140.9 million of property, equipment, investments and intangibles and received $18.4 million in proceeds from government assistance allocated to fixed assets. We also purchased $63.7 million and sold $53.4 million of marketable securities during 2022. Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 2. Business Combination” for further discussion regarding the Combinations.
The increases in amortization expense in fiscal year 2023 compared to fiscal year 2022 and fiscal year 2022 compared to fiscal year 2021 were primarily due to the Combinations. 56 Acquisition and Integration Costs Acquisition and integration costs were $113.4 million, $136.0 million and $9.6 million for fiscal years 2023, 2022 and 2021, respectively.
Acquisition and Integration Costs Acquisition and integration costs were $127.2 million, $113.4 million and $136.0 million for fiscal years ended 2024, 2023 and 2022, respectively. The increase in costs in fiscal year ended 2024 compared to fiscal year ended 2023 was primarily due to employee compensation related charges and consulting costs.
Amortization of Intangible Assets Amortization of intangible assets for fiscal years 2023, 2022 and 2021 was $204.8 million, $132.5 million and $27.4 million, respectively.
Amortization of Intangible Assets Amortization of intangible assets for fiscal years ended 2024, 2023 and 2022 was $203.4 million, $204.8 million and $132.5 million, respectively. The increase in amortization expense in fiscal year ended 2023 compared to fiscal year ended 2022 was primarily due to the Combinations.
Contractual Obligations and Off-Balance Sheet Arrangements In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to debt, income taxes, lease arrangements, purchase obligations and licensing arrangements are provided in Part II, Item 8, “Financial Statements and Supplementary Data—Note 8. Borrowings,” “—Note 6.
Information regarding our obligations relating to debt, income taxes, lease arrangements, purchase obligations and licensing arrangements are provided in Part II, Item 8, “Financial Statements and Supplementary Data—Note 10. Borrowings,” “—Note 6. Income Taxes,” “—Note 11. Leases” and “—Note 14. Commitments and Contingencies,” respectively.
The decrease in costs in fiscal year 2023 compared to fiscal year 2022 was primarily due to acquisition costs attributable to the Combinations, partially offset by higher integration-related costs. The increase in costs in fiscal year 2022 compared to fiscal year 2021 was primarily due to acquisition and integration-related costs attributable to the Combinations.
The decrease in costs in fiscal year ended 2023 compared to fiscal 56 year ended 2022 was primarily due to acquisition costs attributable to the Combinations, partially offset by higher integration-related costs. Goodwill Impairment Charge During fiscal year ended 2024, we recognized a non-cash goodwill impairment charge of $1.8 billion.
Some of our raw materials are available from a limited number of sources. During 2023 and 2022, we encountered some increasing pressures on raw material pricing, though they were less severe in fiscal year 2023 than in 2022.
Some of our raw materials are available from a limited number of sources. While we encountered increasing pressures on raw material pricing during fiscal years ended 2023 and 2022, inflationary impacts during fiscal year ended 2024 lessened and returned closer to pre-COVID-19 pandemic levels.
Based on this hypothetical 5% decrease, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of our reporting units ranged from approximately 3% to approximately 160%.
Based on this hypothetical 5% decrease, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) was approximately 3% and 37% for the EMEA and Latin America reporting units, respectively. Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 9.
The remaining increase of $325.4 million was primarily driven by increased revenues, partially offset by increased distribution and selling costs. 58 EMEA Total revenues and Adjusted EBITDA for EMEA were as follows: Fiscal Year Ended (Dollars in millions) 2023 2022 2021 % Change 2023 vs. 2022 % Change 2022 vs. 2021 Total revenues $ 327.3 $ 206.8 $ 69.6 58 % 197 % Adjusted EBITDA $ 58.3 $ 31.7 $ 28.1 84 % 13 % Total revenues were $327.3 million for fiscal year 2023, compared to $206.8 million for fiscal year 2022.
EMEA Total revenues and Adjusted EBITDA for EMEA were as follows: Fiscal Year Ended (Dollars in millions) 2024 2023 2022 % Change 2024 vs. 2023 % Change 2023 vs. 2022 Total revenues $ 335.8 $ 327.3 $ 206.8 3 % 58 % Adjusted EBITDA $ 46.5 $ 41.0 $ 31.4 13 % 31 % 58 Total revenues were $335.8 million for fiscal year ended 2024, compared to $327.3 million for fiscal year ended 2023.
The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for our North America, EMEA, Latin America, Japan and Asia Pacific reporting units as of the testing date ranged from approximately 8% to 70%.
The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) was approximately 8% and 45%, respectively.
Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. As of December 31, 2023 and January 1, 2023, there were no amounts outstanding under the Revolving Credit Facility.
Debt Capitalization Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $13.0 million and $198.0 million borrowings outstanding, was $589.0 million as of December 29, 2024.
Demand for our respiratory products, which includes our COVID-19 products, declined in 2023 compared to 2022 due to the end of the U.S. public health emergency regarding COVID-19 and the transition of COVID-19 from a pandemic to an endemic environment.
Demand for our respiratory products, which includes our COVID-19 products, declined in 2024 compared to 2023 due to the decreased occurrence and duration of COVID-19 in an endemic environment and a COVID-19 government award in 2023 that 54 did not occur in 2024.
Other Total revenues and Adjusted EBITDA for Other, which includes our Latin America, Japan and Asia Pacific operating segments, were as follows: Fiscal Year Ended (Dollars in millions) 2023 2022 2021 % Change 2023 vs. 2022 % Change 2022 vs. 2021 Total revenues $ 483.3 $ 302.7 $ 70.8 60 % 328 % Adjusted EBITDA $ 116.3 $ 92.7 $ 43.0 25 % 116 % 59 Total revenues w ere $483.3 million for fiscal year 2023, compared to $302.7 million for fiscal year 2022.
Other Total revenues and Adjusted EBITDA for Other were as follows: Fiscal Year Ended (Dollars in millions) 2024 2023 2022 % Change 2024 vs. 2023 % Change 2023 vs. 2022 Total revenues $ 502.3 $ 483.3 $ 302.7 4 % 60 % Adjusted EBITDA $ 133.5 $ 115.3 $ 91.2 16 % 26 % Total revenues w ere $502.3 million for fiscal year ended 2024, compared to $483.3 million for fiscal year ended 2023.
See Part II, Item 8, “Financial Statements and Supplementary Data—Note 2.
Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 6. Income Taxes” for more information.
Recent Accounting Pronouncements Information about recently adopted and proposed accounting pronouncements is included in Part II, Item 8, “Financial Statements and Supplementary Data—Note 1.
We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations. Recent Accounting Pronouncements Information about recently adopted and proposed accounting pronouncements is included in Part II, Item 8, “Financial Statements and Supplementary Data—Note 1.
We also recorded $60.6 million of expense related to the unwind of the inventory fair value adjustment related to the Combinations during fiscal year 2022. Cost of sales, excluding amortization of intangible assets, increased to $1,330.0 million, or 40.7% of Total revenues, for fiscal year 2022, compared to $420.3 million, or 24.7% of Total revenues, for fiscal year 2021.
We also recorded $60.6 million of expense related to the unwind of the inventory fair value adjustment related to the Combinations during fiscal year ended 2022.
Our Stock Repurchase Program allows us to repurchase up to $300.0 million of our common stock through August 17, 2024. The Stock Repurchase Program does not obligate us to acquire any specific number of shares.
Stock Repurchases On August 17, 2022, our Board authorized the Stock Repurchase Program, allowing us to repurchase up to $300.0 million of our common stock, which expired on August 17, 2024. We did not repurchase any shares of our common stock during fiscal year ended 2024 through the expiration date.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+4 added−23 removed3 unchanged
Biggest changeWe have entered into foreign currency forward contracts to manage our foreign currency exposures on foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions. We had forward contracts outstanding with a total notional amount of $1,252.2 million as of December 31, 2023, with maturity dates through December 2024.
Biggest changeFor translation of operations in non-U.S. Dollar currencies, the local currency of most entities is the functional currency. We have entered into foreign currency forward contracts to manage our exposures on foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions.
Assuming facilities under the Credit Agreement are fully drawn, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense on our outstanding borrowings under the Credit Agreement by approximately $4.0 million per year before considering the impact of derivative instruments.
Assuming facilities under the Credit Agreement are fully drawn, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense on our outstanding borrowings under the Credit Agreement by approximately $3.6 million per year before considering the impact of derivative instruments.
These risks include the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany balances with foreign subsidiaries and transactions denominated in currencies other than the functional currency of the local jurisdiction. We derived approximately 39% of our Total revenues for the fiscal year ended December 31, 2023, from operations outside the U.S.
These risks include the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany balances with foreign subsidiaries and transactions denominated in currencies other than the functional currency of the local jurisdiction. We derived approximately 44% of our Total revenues for the fiscal year ended December 29, 2024, from operations outside the U.S.
Because the Company was in a net short (payable) position relative to its major foreign currencies after consideration of forward contracts, a uniform weakening of the U.S. dollar will yield the largest overall potential net loss in earnings due to exchange.
Because the Company was in a net long (receivable) position relative to its major foreign currencies after consideration of forward contracts, a uniform weakening of the U.S. dollar will yield the largest overall potential net gain in earnings due to exchange.
A sensitivity to changes in the value of the U.S. dollar on foreign currency denominated derivatives and investments indicated that if the U.S. dollar uniformly weakened by 10% against all currency exposures of the Company at December 31, 2023, (Loss) income before income taxes would have declined by approximately $4.4 million in fiscal year 2023.
A sensitivity to changes in the value of the U.S. dollar on foreign currency denominated derivatives and investments indicated that if the U.S. dollar uniformly weakened by 10% against all currency exposures of the Company at December 29, 2024, (Loss) income before income taxes would have increased by approximately $7.1 million in fiscal year ended 2024.
The cash flows from these contracts are reported as operating activities in the Consolidated Statements of Cash Flows. The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates. The forward contracts are designated as hedges of the net investment in a foreign operation.
The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates. The forward contracts are designated as hedges of the net investment in a foreign operation. Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 16.
We entered into interest rate swap contracts, commencing on December 30, 2022, with a total notional value of $1.3 billion, which increased to $1.8 billion on December 29, 2023, to hedge future interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan.
We have interest rate swap contracts with a total notional value of $1.8 billion to hedge future interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan. Foreign Currency Exchange Risk We are exposed to foreign currency exchange risk by virtue of our international operations.
Removed
Our Credit Agreement provides for variable rate borrowings of up to $2,750.0 million under the Term Loan and $800.0 million under the Revolving Credit Facility.
Added
We had forward contracts outstanding with a total notional amount of $1.4 billion as of December 29, 2024, with maturity dates through November 2025.
Removed
For further discussion of the risks related to our Credit Agreement, see “Risk Factors—Risks Relating to Corporate Finance—Our indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness” in Part I, Item 1A, “Risk Factors” of this Annual Report.
Added
Derivative Instruments and Hedging Activities” for additional information related to such forward contracts. Credit Risk The use of derivative instruments exposes us to credit risk if the counterparty fails to perform when the fair value of a derivative instrument contract is positive.
Removed
We selectively use derivative instruments to reduce market risk associated with changes in interest rates. The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes.
Added
If the counterparty fails to perform, collateral is not required by any party whether derivatives 65 are in an asset or liability position. We have a policy of diversifying derivatives with counterparties to mitigate the overall risk of counterparty defaults. Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 16.
Removed
Our current investment policy with respect to our cash and cash equivalents focuses on maintaining acceptable levels of interest rate risk and liquidity. Although we continue to evaluate our investments, our cash equivalents as of December 31, 2023 consisted primarily of government money market funds and other high credit quality debt securities.
Added
Derivative Instruments and Hedging Activities” for additional information. 66
Removed
These funds provide daily liquidity and may be subject to interest rate risk and decrease in value if market interest rates increase.
Removed
We do not expect our operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates. 65 Foreign Currency Exchange Risk We are exposed to foreign currency exchange risk by virtue of our international operations.
Removed
For translation of operations in non-U.S. Dollar currencies, the local currency of most entities is the functional currency. Foreign exchange effects from the translation of our balance sheet resulted in comprehensive income of $50.4 million and a comprehensive loss of $69.8 million for the fiscal years ended December 31, 2023 and January 1, 2023, respectively.
Removed
Foreign exchange effects from the translation of our balance sheet were not material during the fiscal year ended January 2, 2022. Adjustments resulting from the re-measurement of transactions denominated in foreign currencies other than the functional currency of our subsidiaries are expensed as incurred.
Removed
In the majority of our jurisdictions, we earn revenue and incur costs in the currency used in such jurisdiction.
Removed
We incur significant costs in foreign currencies, including Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Chinese Yuan/Renminbi, Colombian Peso, Euro, Indian Rupee, Japanese Yen, Mexican Peso, Philippine Peso, South Korean Won, Swiss Franc, Danish Krone, Czech Koruna and Thai Baht.
Removed
As a result, movements in exchange rates cause our revenue and expenses to fluctuate, impacting our profitability and cash flows. Future business operations and opportunities, including the continued expansion of our business outside North America, may further increase the risk that cash flows resulting from these activities may be adversely affected by changes in currency exchange rates.
Removed
Like many multi-national companies, we have exposure to the British Pound. We are negatively impacted by a lower British Pound exchange rate from translation impact when compared to the U.S. Dollar, but we also benefit from expenses denominated in British Pound, as well as some cross-border transactions at a lower exchange rate.
Removed
The magnitude of the impact is dependent on our level of operations and business volumes in the U.K., forward contract hedge positions, cross currency volume and the exchange rate.
Removed
Additionally, in order to fund the purchase price for the assets and capital stock of certain non-U.S. entities, a combination of equity contributions and intercompany loans were utilized to capitalize certain non-U.S. subsidiaries. In many instances, the intercompany loans are denominated in currencies other than the functional currency of the affected subsidiaries.
Removed
Where intercompany loans are not a component of permanently invested capital of the affected subsidiaries, increases or decreases in the value of the subsidiaries’ functional currency against other currencies can affect our results of operations.
Removed
During the fiscal years ended December 31, 2023 and January 1, 2023, we recorded net foreign currency exchange losses of $2.6 million and $6.0 million, respectively. Net foreign currency exchange impact was not material for the fiscal year ended January 2, 2022.
Removed
The foreign currency gains/losses in each period primarily consist of unrealized gains/losses related to intercompany loans denominated in currencies other than the functional currency of the affected subsidiaries. We have entered into and may in the future enter into derivative instruments to manage our foreign currency exposure on these intercompany loans in the future.
Removed
Foreign currency forward contracts that qualified and were designated for hedge accounting are recorded at their fair value as of December 31, 2023 and the pre-tax unrealized loss of $6.7 million is reported as a component of Other comprehensive income (loss) (“OCI”), all of which is expected to be reclassified to earnings in the next 12 months.
Removed
Actual gains (losses) upon settlement will be recognized in earnings, within the line item impacted, during the estimated time in which the transactions are incurred. Actual losses upon settlement recognized in earnings during the fiscal year ended December 31, 2023 were $6.2 million.
Removed
Actual gains upon settlement recognized in earnings during the fiscal year ended January 1, 2023 were $3.5 million. Actual losses/gains upon settlement recognized in earnings during the fiscal year ended January 2, 2022 were not material.
Removed
The 66 unrealized gains or losses on these contracts are recorded in foreign currency translation adjustment within OCI, and remain in Accumulated other comprehensive loss (“AOCI”) until either the sale or complete or substantially complete liquidation of the subsidiary.
Removed
The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components). Changes in fair value of the excluded components are recognized in OCI. The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument.
Removed
The cash flows from these contracts are reported as investing activities in the Consolidated Statement of Cash Flows. See Part II, Item 8, “Financial Statements and Supplementary Data—Note 14. Derivative Instruments and Hedging Activities” for additional information related to such forward contracts, which information is incorporated herein by reference. 67

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