QuidelOrtho Corporation (NASDAQ:QDEL) Q4 2022 Earnings Call Transcript

Patrick Donnelly: Joe, maybe one on the EBITDA side. I know you are well aware of the amount of focus people have on this one. So I just want to make sure we understand kind of the 2023 guidance. I mean, is this the right stepping off point going forward, right? I don’t mean to ask about 2024 already. But when you think about that 28% in the middle, you kind of mentioned you have maybe $100 million of COVID on government contracts. I think those tend to be a little lower at least than kind of retail and maybe on the corporate average. But I think there’s this fear that as COVID comes out at 2024 then takes a step down, is this the right kind of stepping off point on EBITDA, maybe just talk about some of those moving pieces as we work our way through the year and kind of look forward?

Joe Busky: Hey, Patrick. Yeah. I think it is a pretty fair jumping all point, because if you go back to the point we just made on COVID, there’s really no change there with that endemic level of annual revenue being it’s $200 million to $400 million. And you are right, it’s up another $100 million in 2023 guide because of those government orders, which again, look, as you said, doesn’t carry a super significant amount of margin. So I do think it’s a good jumping off point. And so the midpoint of our EBITDA margin guide is at 28%, which is what we talked about at the Investor Day in December. It’s right in the middle of that 27% to 29% range that we gave. So we do feel pretty good about that. But going back to Doug’s comments, there is a goal to get it up to 30% the EBITDA margin, no doubt. And we know how to get there, it’s going to get — we are going to get there through greater revenue growth and we are going to get there through overachievement on synergies.

Patrick Donnelly: Okay. That’s very helpful. I appreciate that. And then, Doug, maybe on the Savanna timing and assumptions, can you just talk through, I guess, the time line here? I think this quarter is supposed to be around the 510(k) submission. It seems like EUA probably not happening. But can you just talk about where we are the pathway here in the U.S. and then maybe just the assumptions that are layered into the guide here on our way to that $250 million number? I think it’s over three years, that’s just how we are progressing there, and again, the time line in the U.S. would be great?

Doug Bryant: Yeah. Thanks for that question, Patrick. I think it will help us clarify just we are at. We are still expecting RVP for EUA in April and the 510(k) will be just shortly after that. So we are very much on track for the launch. As I said, the instrument build issues have been largely resolved, we think we are already at the capacity to have a meaningful launch and we are at the point where we are most of the effort right now is around cartridge ramp up. So we have got manual lines that we are — that we have in place. Obviously, we think we can make the immediate demand in Europe. There we are doubling down on the mainline potentially depending on the timing of the automated line, but we expect to have the ability to make millions of cartridges very surely.