UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ____________________________________________________________________________
FORM 10-Q
  ____________________________________________________________________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021March 31, 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number: 0-10961
 ____________________________________________________________________________ 
QUIDEL CORPORATION
(Exact name of registrant as specified in its charter)
  ____________________________________________________________________________
Delaware 94-2573850
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
9975 Summers Ridge Road, San Diego, California 92121
(Address of principal executive offices, including zip code)
(858) 552-1100
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par ValueQDELThe NASDAQ Stock Market
____________________________________________________________________________ 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐   No  ☒
As of July 30, 2021, 41,632,759April 28, 2022, 41,848,256 shares of the registrant’s common stock were outstanding.



INDEX
 
Consolidated Balance Sheets as of June 30, 2021 March 31, 2022 and December 31, 20202021
3
Consolidated Statements of Income for the three and six months ended June 30, 2021March 31, 2022 and 20202021
4
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021March 31, 2022 and 20202021
5
Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021March 31, 2022 and 20202021
6
Consolidated Statements of Cash Flows for the six three months ended June 30, 2021March 31, 2022 and 20202021
7
Notes to Consolidated Financial Statements
8
1716
2522
2623
2724
2724
2724
2724
2724
2724
2825
2926

2

PART I    FINANCIAL INFORMATION
 
ITEM 1.    Financial Statements
QUIDEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value; unaudited)
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$593,224 $489,941 Cash and cash equivalents$1,275,536 $802,751 
Marketable securitiesMarketable securities44,270 25,758 
Accounts receivable, netAccounts receivable, net46,216 497,688 Accounts receivable, net569,817 377,969 
InventoriesInventories218,506 113,798 Inventories181,388 198,765 
Prepaid expenses and other current assetsPrepaid expenses and other current assets59,741 40,975 Prepaid expenses and other current assets42,639 35,067 
Total current assetsTotal current assets917,687 1,142,402 Total current assets2,113,650 1,440,310 
Property, plant and equipment, netProperty, plant and equipment, net251,045 110,481 Property, plant and equipment, net364,248 349,202 
Marketable securities, non-currentMarketable securities, non-current20,726 37,852 
Right-of-use assetsRight-of-use assets134,870 100,544 Right-of-use assets125,059 127,622 
GoodwillGoodwill337,027 337,032 Goodwill337,017 337,021 
Intangible assets, netIntangible assets, net109,537 122,431 Intangible assets, net91,584 98,655 
Deferred tax assetDeferred tax asset44,151 44,762 Deferred tax asset20,232 20,089 
Other non-current assetsOther non-current assets13,335 13,512 Other non-current assets20,609 19,623 
Total assetsTotal assets$1,807,652 $1,871,164 Total assets$3,093,125 $2,430,374 
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:Current liabilities:Current liabilities:
Accounts payableAccounts payable$99,562 $86,316 Accounts payable$157,472 $101,492 
Accrued payroll and related expensesAccrued payroll and related expenses16,559 34,781 Accrued payroll and related expenses27,820 40,385 
Income taxes payableIncome taxes payable6,585 127,788 Income taxes payable205,240 66,945 
Operating lease liabilitiesOperating lease liabilities8,952 7,799 Operating lease liabilities9,715 10,039 
Contingent considerationContingent consideration5,845 5,987 Contingent consideration5,957 5,986 
Deferred considerationDeferred consideration41,898 42,000 Deferred consideration41,970 41,945 
Other current liabilitiesOther current liabilities29,866 32,290 Other current liabilities44,482 56,728 
Total current liabilitiesTotal current liabilities209,267 336,961 Total current liabilities492,656 323,520 
Operating lease liabilities - non-currentOperating lease liabilities - non-current135,660 100,706 Operating lease liabilities - non-current135,668 128,556 
Deferred consideration - non-currentDeferred consideration - non-current34,611 73,951 Deferred consideration - non-current37,448 36,491 
Contingent consideration - non-currentContingent consideration - non-current87 87 
Other non-current liabilitiesOther non-current liabilities17,035 26,843 Other non-current liabilities12,344 12,358 
Commitments and contingencies (Note 8)Commitments and contingencies (Note 8)00Commitments and contingencies (Note 8)00
Stockholders’ equity:Stockholders’ equity:Stockholders’ equity:
Preferred stock, $0.001 par value per share; 5,000 shares authorized; NaN issued or outstanding at June 30, 2021 and December 31, 20200 0 
Common stock, $0.001 par value per share; 97,500 shares authorized; 41,633 and 42,290 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively42 42 
Preferred stock, $0.001 par value per share; 5,000 shares authorized; none issued or outstanding at March 31, 2022 and December 31, 2021Preferred stock, $0.001 par value per share; 5,000 shares authorized; none issued or outstanding at March 31, 2022 and December 31, 2021— — 
Common stock, $0.001 par value per share; 97,500 shares authorized; 41,846 and 41,686 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectivelyCommon stock, $0.001 par value per share; 97,500 shares authorized; 41,846 and 41,686 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively42 42 
Additional paid-in capitalAdditional paid-in capital267,890 388,121 Additional paid-in capital285,508 279,768 
Accumulated other comprehensive income (loss)1,019 (431)
Accumulated other comprehensive incomeAccumulated other comprehensive income239 355 
Retained earningsRetained earnings1,142,128 944,971 Retained earnings2,129,133 1,649,197 
Total stockholders’ equityTotal stockholders’ equity1,411,079 1,332,703 Total stockholders’ equity2,414,922 1,929,362 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$1,807,652 $1,871,164 Total liabilities and stockholders’ equity$3,093,125 $2,430,374 
See accompanying notes.
3

QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data; unaudited)
 
Three Months Ended
June 30,		Six Months Ended
 June 30,		 Three Months Ended
March 31,
2021202020212020 20222021
Total revenuesTotal revenues$176,610 $201,754 $551,948 $376,407 Total revenues$1,002,259 $375,338 
Cost of salesCost of sales70,424 53,003 143,803 112,665 Cost of sales262,301 73,379 
Gross profitGross profit106,186 148,751 408,145 263,742 Gross profit739,958 301,959 
Research and developmentResearch and development22,614 20,970 45,918 37,349 Research and development26,368 23,304 
Sales and marketingSales and marketing38,100 27,567 72,333 58,305 Sales and marketing65,388 34,233 
General and administrativeGeneral and administrative21,138 15,679 40,645 30,011 General and administrative24,508 19,507 
Acquisition and integration costsAcquisition and integration costs1,028 872 1,754 2,786 Acquisition and integration costs3,037 726 
Total operating expensesTotal operating expenses82,880 65,088 160,650 128,451 Total operating expenses119,301 77,770 
Operating incomeOperating income23,306 83,663 247,495 135,291 Operating income620,657 224,189 
Interest and other expense, netInterest and other expense, net(1,623)(3,467)(4,005)(6,274)Interest and other expense, net29 2,382 
Income before income taxesIncome before income taxes21,683 80,196 243,490 129,017 Income before income taxes620,628 221,807 
Provision for income taxesProvision for income taxes2,610 12,544 46,333 21,128 Provision for income taxes140,692 43,723 
Net incomeNet income$19,073 $67,652 $197,157 $107,889 Net income$479,936 $178,084 
Basic earnings per shareBasic earnings per share$0.46 $1.61 $4.74 $2.56 Basic earnings per share$11.46 $4.19 
Diluted earnings per shareDiluted earnings per share$0.45 $1.55 $4.64 $2.48 Diluted earnings per share$11.31 $4.09 
Shares used in basic per share calculationShares used in basic per share calculation41,691 42,117 41,622 42,086 Shares used in basic per share calculation41,875 42,510 
Shares used in diluted per share calculationShares used in diluted per share calculation42,374 43,746 42,475 43,574 Shares used in diluted per share calculation42,449 43,533 
See accompanying notes.

4

QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands; unaudited)
 
Three Months Ended
June 30,		Six Months Ended
June 30,		 Three Months Ended
March 31,
2021202020212020 20222021
Net incomeNet income$19,073 $67,652 $197,157 $107,889 Net income$479,936 $178,084 
Other comprehensive income (loss)Other comprehensive income (loss)Other comprehensive income (loss)
Changes in cumulative translation adjustment, net of taxChanges in cumulative translation adjustment, net of tax331 265 (509)200 Changes in cumulative translation adjustment, net of tax155 (840)
Changes in unrealized (losses) gains from cash flow hedges:
Net unrealized (losses) gains on derivative instruments(235)(138)106 269 
Reclassification of net realized losses (gains) on derivative instruments included in net income761 (195)1,853 (337)
Changes in unrealized losses from investments, net of taxChanges in unrealized losses from investments, net of tax(402)— 
Changes in unrealized gains (losses) from cash flow hedges:Changes in unrealized gains (losses) from cash flow hedges:
Net unrealized gains on derivative instrumentsNet unrealized gains on derivative instruments154 341 
Reclassification of net realized (gains) losses on derivative instruments included in net incomeReclassification of net realized (gains) losses on derivative instruments included in net income(23)1,092 
Total change in unrealized gains (losses) from cash flow hedges, net of taxTotal change in unrealized gains (losses) from cash flow hedges, net of tax526 (333)1,959 (68)Total change in unrealized gains (losses) from cash flow hedges, net of tax131 1,433 
Comprehensive incomeComprehensive income$19,930 $67,584 $198,607 $108,021 Comprehensive income$479,820 $178,677 
See accompanying notes.

5

QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands; unaudited)
Common Stock   Common StockAdditional
paid-in
capital		Accumulated
other
comprehensive
income (loss)		Retained
earnings		Total
stockholders’
equity
SharesParAdditional
paid-in
capital		Accumulated
other
comprehensive
income (loss)		Retained
earnings		Total
stockholders’
equity		SharesPar
Balance at December 31, 202042,290 $42 $388,121 $(431)$944,971 $1,332,703 
Balance at December 31, 2021Balance at December 31, 202141,686 $42 $279,768 $355 $1,649,197 $1,929,362 
Issuance of common stock under equity compensation plansIssuance of common stock under equity compensation plans409 1 6,373 — — 6,374 Issuance of common stock under equity compensation plans223 — 6,377 — — 6,377 
Stock-based compensation expenseStock-based compensation expense— — 5,889 — — 5,889 Stock-based compensation expense— — 6,178 — — 6,178 
Tax withholdings related to vesting of stock-based awardsTax withholdings related to vesting of stock-based awards(156)— (33,929)— — (33,929)Tax withholdings related to vesting of stock-based awards(63)— (6,815)— — (6,815)
Other comprehensive gain, net of tax— — — 593 — 593 
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — — (116)— (116)
Net incomeNet income— — — — 178,084 178,084 Net income— — — — 479,936 479,936 
Balance at March 31, 202142,543 43 366,454 162 1,123,055 1,489,714 
Issuance of common stock under equity compensation plans59 0 494 — — 494 
Stock-based compensation expense— — 5,846 — — 5,846 
Tax withholdings related to vesting of stock-based awards(12)— (1,467)— — (1,467)
Repurchases of common stock(957)(1)(103,437)— — (103,438)
Other comprehensive gain, net of tax— — — 857 — 857 
Net income— — — — 19,073 19,073 
Balance at June 30, 202141,633 $42 $267,890 $1,019 $1,142,128 $1,411,079 
Balance at March 31, 2022Balance at March 31, 202241,846 $42 $285,508 $239 $2,129,133 $2,414,922 

 Common Stock   
SharesParAdditional
paid-in
capital		Accumulated
other
comprehensive loss		Retained
earnings		Total
stockholders’
equity
Balance at December 31, 201941,868 $42 $425,557 $(463)$134,684 $559,820 
Issuance of common stock under equity compensation plans153 0 3,571 — — 3,571 
Stock-based compensation expense— — 3,325 — — 3,325 
Tax withholdings related to vesting of stock-based awards(25)— (1,954)— — (1,954)
Other comprehensive gain, net of tax— — — 200 — 200 
Net income— — — — 40,237 40,237 
Balance at March 31, 202041,996 42 430,499 (263)174,921 605,199 
Issuance of common stock under equity compensation plans203 — 3,287 — — 3,287 
Stock-based compensation expense— — 4,665 — — 4,665 
Issuance of shares in exchange for Convertible Senior Notes2 0 48 — — 48 
Derivative liabilities - Convertible Senior Notes elected to settle in cash— — (26,180)— — (26,180)
Tax withholdings related to vesting of stock-based awards(5)— (716)— — (716)
Repurchases of common stock(247)— (42,178)— — (42,178)
Other comprehensive loss, net of tax— — — (68)— (68)
Net income— — — — 67,652 67,652 
Balance at June 30, 202041,949 $42 $369,425 $(331)$242,573 $611,709 

Common StockAdditional
paid-in
capital		Accumulated
other
comprehensive
income (loss)		Retained
earnings		Total
stockholders’
equity
SharesPar
Balance at December 31, 202042,290 $42 $388,121 $(431)$944,971 $1,332,703 
Issuance of common stock under equity compensation plans409 1 6,373 — — 6,374 
Stock-based compensation expense— — 5,889 — — 5,889 
Tax withholdings related to vesting of stock-based awards(156)— (33,929)— — (33,929)
Other comprehensive gain, net of tax— — — 593 — 593 
Net income— — — — 178,084 178,084 
Balance at March 31, 202142,543 $43 $366,454 $162 $1,123,055 $1,489,714 

See accompanying notes.
6

QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)		QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)		QUIDEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
Six Months Ended
 June 30,		 Three Months Ended
March 31,
20212020 20222021
OPERATING ACTIVITIES:OPERATING ACTIVITIES:OPERATING ACTIVITIES:
Net incomeNet income$197,157 $107,889 Net income$479,936 $178,084 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and otherDepreciation, amortization and other27,191 24,237 Depreciation, amortization and other16,782 12,705 
Stock-based compensation expenseStock-based compensation expense11,674 9,008 Stock-based compensation expense7,432 5,828 
Amortization of debt discount and deferred issuance costs202 433 
Change in fair value of acquisition contingencies101 848 
Amortization of deferred financing costsAmortization of deferred financing costs101 101 
Accretion of interest on deferred considerationAccretion of interest on deferred consideration2,558 3,612 Accretion of interest on deferred consideration982 1,451 
Net change in operating lease right-of-use assets and liabilitiesNet change in operating lease right-of-use assets and liabilities1,781 129 Net change in operating lease right-of-use assets and liabilities9,351 794 
Change in deferred tax assets and liabilitiesChange in deferred tax assets and liabilities611 (21)Change in deferred tax assets and liabilities(89)446 
Change in fair value of derivative liabilities - Convertible Senior Notes0 1,084 
Payment of accreted interest on contingent and deferred consideration(8,157)0 
Changes in assets and liabilities:Changes in assets and liabilities:Changes in assets and liabilities:
Accounts receivableAccounts receivable451,094 (16,450)Accounts receivable(191,452)427,052 
InventoriesInventories(104,796)(34,501)Inventories17,355 (61,134)
Prepaid expenses and other current and non-current assetsPrepaid expenses and other current and non-current assets(19,927)(3,791)Prepaid expenses and other current and non-current assets(7,291)(13,811)
Accounts payableAccounts payable(10,124)9,414 Accounts payable52,592 (3,860)
Accrued payroll and related expensesAccrued payroll and related expenses(16,124)4,974 Accrued payroll and related expenses(10,944)(16,054)
Income taxes payableIncome taxes payable(126,010)17,056 Income taxes payable138,384 41,386 
Other current and non-current liabilitiesOther current and non-current liabilities202 (3,744)Other current and non-current liabilities(12,167)12,469 
Net cash provided by operating activities:Net cash provided by operating activities:407,433 120,177 Net cash provided by operating activities:500,972 585,457 
INVESTING ACTIVITIES:INVESTING ACTIVITIES:INVESTING ACTIVITIES:
Acquisitions of property, equipment and intangibles(153,536)(13,388)
Acquisitions of property, equipment, investments and intangiblesAcquisitions of property, equipment, investments and intangibles(22,402)(78,291)
Proceeds from government assistance allocated to fixed assetsProceeds from government assistance allocated to fixed assets23,263 0 Proceeds from government assistance allocated to fixed assets— 13,722 
Purchases of marketable securitiesPurchases of marketable securities(15,937)— 
Proceeds from sale of marketable securitiesProceeds from sale of marketable securities13,669 — 
Net cash used for investing activities:Net cash used for investing activities:(130,273)(13,388)Net cash used for investing activities:(24,670)(64,569)
FINANCING ACTIVITIES:FINANCING ACTIVITIES:FINANCING ACTIVITIES:
Proceeds from issuance of common stockProceeds from issuance of common stock4,866 6,091 Proceeds from issuance of common stock3,527 4,373 
Payments on finance lease obligationPayments on finance lease obligation(128)(228)Payments on finance lease obligation(91)(62)
Payments of tax withholdings related to vesting of stock-based awardsPayments of tax withholdings related to vesting of stock-based awards(35,396)(2,670)Payments of tax withholdings related to vesting of stock-based awards(6,815)(33,929)
Repurchases of common stock(103,438)(42,178)
Principal payments of acquisition contingent considerationPrincipal payments of acquisition contingent consideration(4,730)(6,034)Principal payments of acquisition contingent consideration(29)(30)
Principal payments of deferred consideration(35,143)(42,000)
Net cash used for financing activities:Net cash used for financing activities:(173,969)(87,019)Net cash used for financing activities:(3,408)(29,648)
Effect of exchange rates on cashEffect of exchange rates on cash92 44 Effect of exchange rates on cash(109)(129)
Net increase in cash and cash equivalentsNet increase in cash and cash equivalents103,283 19,814 Net increase in cash and cash equivalents472,785 491,111 
Cash and cash equivalents, beginning of periodCash and cash equivalents, beginning of period489,941 52,775 Cash and cash equivalents, beginning of period802,751 489,941 
Cash and cash equivalents, end of periodCash and cash equivalents, end of period$593,224 $72,589 Cash and cash equivalents, end of period$1,275,536 $981,052 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Initial measurement of derivative liabilities – Convertible Senior Notes$0 $26,180 
Purchase of property, equipment and intangibles by incurring current liabilitiesPurchase of property, equipment and intangibles by incurring current liabilities$31,164 $2,175 Purchase of property, equipment and intangibles by incurring current liabilities$13,714 $7,284 
Capital expenditures to be reimbursed under a government contractCapital expenditures to be reimbursed under a government contract$13,619 $0 Capital expenditures to be reimbursed under a government contract$— $12,622 
Reduction of other current liabilities upon issuance of restricted share unitsReduction of other current liabilities upon issuance of restricted share units$2,001 $767 Reduction of other current liabilities upon issuance of restricted share units$2,850 $2,001 
Extinguishment of Convertible Senior Notes through issuance of stock$0 $48 

See accompanying notes.
7

Quidel Corporation
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statementsConsolidated Financial Statements of Quidel Corporation and its subsidiaries (the “Company”“Company” or “Quidel”) havehave been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included.
The information at June 30, 2021,March 31, 2022, and for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, is unaudited. For further information, refer to the Company’s consolidated financial statementsConsolidated Financial Statements and notes thereto for the year ended December 31, 20202021 included in the Company’s 20202021 Annual Report on Form 10-K. Operating results for any quarter are historically seasonal in nature and are not necessarily indicative of the results expected for the full year.
For 20212022 and 2020,2021, the Company’s fiscal year will end or has ended on January 1, 2023 and January 2, 2022, and January 3, 2021, respectively. For 20212022 and 2020,2021, the Company’s secondfirst quarter ended on JulyApril 3, 2022 and April 4, 2021, and June 28, 2020, respectively. For ease of reference, the calendar quarter end dates are used herein. The three and six-monththree-month periods ended June 30,March 31, 2022 and 2021 and 2020 each included 13 and 26 weeks, respectively.weeks.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S.GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and liabilitiesexpenses and the related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board issued guidance codified in Accounting Standards Update 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under new guidance, an acquirer is required to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company early adopted the guidance during the first quarter of 2022 with no material impact to the Company’s consolidated financial statements.
Significant Accounting Policies
During the sixthree months ended June 30, 2021,March 31, 2022, there have been no changes to our significant accounting policies as described in our 20202021 Annual Report on Form 10-K.
Note 2. Computation of Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted EPS is computed based on the sum of the weighted averageweighted-average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable from stock options and unvested restricted stock units (“RSUs”) and, for the 2020 periods, the 3.25% Convertible Senior Notes.. Potentially dilutive common shares from outstanding stock options and unvested RSUs are determined using the average share price for each period under the treasury stock method.
8

The following table reconciles net income andpresents the calculation of the weighted-average shares used in computing basic and diluted earnings per shareEPS (in thousands):
Three Months Ended
June 30,		Six Months Ended
 June 30,
2021202020212020
Numerator:
Net income used for basic earnings per share$19,073 $67,652 $197,157 $107,889 
Interest expense on Convertible Senior Notes, net of tax0 179 0 360 
Net income used for diluted earnings per share$19,073 $67,831 $197,157 $108,249 
Basic weighted-average common shares outstanding41,691 42,117 41,622 42,086 
Dilutive potential shares issuable from Convertible Senior Notes0 392 0 401 
Dilutive potential shares issuable from stock options and unvested RSUs683 1,237 853 1,087 
Diluted weighted-average common shares outstanding42,374 43,746 42,475 43,574 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect197 0 133 1 
Three Months Ended
March 31,
20222021
Basic weighted-average common shares outstanding41,875 42,510 
Dilutive potential shares issuable from stock options and unvested RSUs574 1,023 
Diluted weighted-average common shares outstanding42,449 43,533 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect352 96 
Potentially dilutive shares excluded from the calculation above represent stock options when the combined exercise price and unrecognized stock-based compensation are greater than the average market price for the Company’s common stock because their effect is anti-dilutive.
Potentially dilutive shares from the Convertible Senior Notes in 2020 were determined using the if-converted method. Under the provisions of the if-converted method, the Convertible Senior Notes were assumed to be converted and the resulting common shares were included in the denominator of the EPS calculation and the interest expense, net of tax, recorded in connection with the Convertible Senior Notes was added back to net income. The Convertible Senior Notes had a dilutive impact when the average market price of the Company’s common stock exceeded the applicable conversion price of the notes. The Senior Convertible Notes became convertible on March 31, 2018 and matured on December 15, 2020.
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Note 3. Balance Sheet Account Details    
Marketable securities
The following is a summary of marketable securities (in thousands):
March 31, 2022December 31, 2021
Amortized CostGross Unrealized LossesFair ValueAmortized CostGross Unrealized LossesFair Value
Corporate bonds$36,844 $(326)$36,518 $22,344 $(28)$22,316 
Commercial paper2,197 — 2,197 — — — 
Corporate asset-backed securities5,591 (36)5,555 3,443 (1)3,442 
Total marketable securities, current44,632 (362)44,270 25,787 (29)25,758 
Corporate bonds, non-current12,741 (242)12,499 26,761 (83)26,678 
Corporate asset-backed securities, non-current8,320 (93)8,227 11,197 (23)11,174 
Total marketable securities$65,693 $(697)$64,996 $63,745 $(135)$63,610 
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Inventories consisted of the following (in thousands):
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Raw materialsRaw materials$103,794 $58,264 Raw materials$93,276 $103,159 
Work-in-process (materials, labor and overhead)Work-in-process (materials, labor and overhead)40,373 31,359 Work-in-process (materials, labor and overhead)28,150 36,091 
Finished goods (materials, labor and overhead)Finished goods (materials, labor and overhead)74,339 24,175 Finished goods (materials, labor and overhead)59,962 59,515 
Total inventoriesTotal inventories$218,506 $113,798 Total inventories$181,388 $198,765 
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Other receivablesOther receivables$39,400 $15,442 Other receivables$20,144 $15,879 
Unbilled receivables0 16,041 
Prepaid expensesPrepaid expenses14,284 7,335 Prepaid expenses17,438 14,598 
OtherOther6,057 2,157 Other5,057 4,590 
Total prepaid expenses and other current assetsTotal prepaid expenses and other current assets$59,741 $40,975 Total prepaid expenses and other current assets$42,639 $35,067 
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Unbilled receivables as of December 31, 2020 primarily consisted of receivables arising from unbilled milestone achievements for capital expenditures to be reimbursed under the National Institute of Health (“NIH”) contract. As of June 30, 2021, the Company had achieved and billed for all milestones under the NIH contract. Amounts not collected as of June 30, 2021 are included in other receivables. Since inception and as of June 30, 2021, the Company has collected $42.0 million of the
$65.0 million total contract value.
Other Current Liabilities
Other current liabilities consist of the following (in thousands):
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Customer incentives and rebatesCustomer incentives and rebates$13,969 $15,663 Customer incentives and rebates$13,471 $15,916 
Deferred revenueDeferred revenue2,553 3,733 Deferred revenue7,750 1,922 
Accrued other taxes payableAccrued other taxes payable2,421 2,157 Accrued other taxes payable6,996 10,218 
Derivative liabilities597 3,061 
Payables under transition services agreementsPayables under transition services agreements1,071 10,927 
OtherOther10,326 7,676 Other15,194 17,745 
Total other current liabilitiesTotal other current liabilities$29,866 $32,290 Total other current liabilities$44,482 $56,728 
Note 4. Income Taxes
The Company calculates its interim income tax provision in accordance with Accounting Standards Codification (“ASC”) 270, Interim Reporting, and ASC 740, Accounting for Income Taxes (together, “ASC 740”). At the end of each interim period, the Company estimates its annual effective tax rate and applies that rate to its ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects for other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur.
TheFor the three months ended March 31, 2022 and 2021, the Company recognized income tax provisions of $2.6$140.7 million in relation to income before taxes of $21.7$620.6 million and $12.5$43.7 million in relation to income before taxes of $80.2$221.8 million, respectively, resulting in effective tax rates of 12%23% and 16% for the three months ended June 30, 2021 and 2020,20%, respectively. The Company’s 12% and 16% effective tax rates for the three months ended June 30, 2021 and 2020, respectively, differed fromAs compared to the federal statutory rate of 21% primarily due to the discrete impact
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of excess tax deductions from stock based compensation, the benefit from research and development (“R&D”) credits and the benefit from corporate deductions attributable to Foreign Derived Intangible Income (“FDII”), the benefits of which are offset by the income tax owed in U.S. For the six months ended June 30, 2021 and 2020, respectively, the Company recognized income tax provision of $46.3 million and $21.1 million, in relation to income before taxes of $243.5 million and $129.0 million. The Company’s 19% and 16% effective tax rates forin both periods were impacted primarily by income taxes owed in US states. For the sixthree months ended June 30,March 31, 2021, and 2020, respectively, differedthis was partially offset by benefits from the federal statutory rate of 21% primarily due to the discrete impact of excess tax deductions from stock basedstock-based compensation, which was immaterial to the benefit from R&D credits andeffective tax rate in the benefit from corporate deductions attributable to FDII, the benefits of which are offset by the income tax owed in U.S. states, all in relation to income before taxes as described above.three months ended March 31, 2022.
The Company is subject to periodic audits by domestic and foreign tax authorities. Due to the carryforward of unutilized credits, the Company’s federal tax years from 2012 and forward are subject to examination by the U.S.US authorities. The Company’s state and foreign tax years for 2001 and forward are subject to examination by applicable tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax laws applied to the facts of each matter.
Note 5. Revolving Credit Facility
The Company has a $175.0 million Revolving Credit Facility under a credit agreementan Amended and Restated Credit Agreement (the “Credit Agreement”) expiring on August 31, 2023 of which no amounts were outstanding as of June 30, 2021.March 31, 2022. Loans will bear interest at a rate equal to (i) the London Interbank Offered Rate (“LIBOR”) plus the “applicable rate” or (ii) the “base rate” (defined as the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus one-half of one percent (0.50%), (c) LIBOR plus 1 percent, and (d) 1 percent) plus the “applicable rate.” The applicable rate is determined in accordance with a pricing grid based on the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) ranging from 1.75% to 2.50% per annum for LIBOR rate loans and from 0.75% to 1.50% per annum for base rate loans. In addition, the Company pays a commitment fee on the unused portion of the Credit Agreement based on the Company’s Consolidated Leverage Ratio ranging from 0.15% to 0.30% per annum in accordance with the pricing grid.
The Revolving Credit Facility is guaranteed by certain material domestic subsidiaries of the Company (the “Guarantors”) and is secured by liens on substantially all of the assets of the Company and the Guarantors, excluding real property and certain other types of excluded assets, and contains affirmative and negative covenants that are customary for credit agreements of this nature. The negative covenants include, among other things, limitations on asset sales, mergers, indebtedness, liens, dividends and other distributions, investments and transactions with affiliates. The Credit Agreement contains 2 financial covenants: (i) maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the last day of each fiscal quarter of 3.50 to 1.00, which ratio may be increased to 4.50 to 1.00 in case of certain qualifying acquisitions; and (ii) a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of 1.25 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters. The Company was in compliance with all financial covenants as of June 30, 2021.March 31, 2022.
Interest expense recognized, including amortization of deferred issuance cost, was $0.1 million and $0.3$0.2 million for each of the three and six months ended June 30, 2021March 31, 2022 and $0.2 million and $0.4 million for the three and six months ended June 30, 2020.2021.
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Note 6. Stockholders’ Equity
Issuances of Common Stock
A summary of the status of stock option activity for the sixthree months ended June 30, 2021March 31, 2022 is as follows (in thousands, except price data):
SharesWeighted-average
exercise price
per share
Outstanding at December 31, 2020760 $46.95 
Granted47 254.00 
Exercised(70)39.37 
Outstanding at June 30, 2021737 $60.95 
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SharesWeighted-average
exercise price
per share
Outstanding at December 31, 2021722 $62.71 
Granted135 103.06 
Exercised(40)36.00 
Forfeited(14)110.68 
Outstanding at March 31, 2022803 $69.98 
A summary of the status of restricted stock unitRSU activity for the sixthree months ended June 30, 2021March 31, 2022 is as follows (in thousands, except price data):
SharesWeighted-average
grant date fair value		SharesWeighted-average
grant date
fair value
Non-vested December 31, 2020878 $59.60 
Non-vested December 31, 2021Non-vested December 31, 2021587 $95.81 
GrantedGranted106 204.50 Granted313 103.60 
VestedVested(387)45.48 Vested(156)77.83 
ForfeitedForfeited(3)131.72 Forfeited(27)100.98 
Non-vested at June 30, 2021594 $94.16 
Non-vested at March 31, 2022Non-vested at March 31, 2022717 $102.94 
During the sixthree months ended June 30, 2021,March 31, 2022, the Company issued 10,94826,426 shares of common stock in connection with the Company’s employee stock purchase plan (the “ESPP”).
Stock-Based Compensation
The expense related to the Company’s stock-based compensation plans included in the accompanying Consolidated Statements of Income was as follows (in thousands):
Three Months Ended
June 30,		Six Months Ended
 June 30,		Three Months Ended
March 31,
Three Months Ended
March 31,
202120202021202020222021
Cost of salesCost of sales$643 $435 $1,159 $693 Cost of sales$649 $516 
Research and developmentResearch and development893 866 1,927 1,508 Research and development1,124 1,034 
Sales and marketingSales and marketing1,556 1,341 2,960 2,638 Sales and marketing1,760 1,404 
General and administrativeGeneral and administrative2,754 2,488 5,628 4,169 General and administrative3,529 2,874 
Acquisition and integration costsAcquisition and integration costs370 — 
Total stock-based compensation expenseTotal stock-based compensation expense$5,846 $5,130 $11,674 $9,008 Total stock-based compensation expense$7,432 $5,828 
As of June 30, 2021,March 31, 2022, total unrecognized compensation expense was $46.1$66.7 million, which is expected to be recognized over a weighted-average period of approximately 2.02.6 years.
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The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants.
Six Months Ended
 June 30,		Three Months Ended
March 31,
2021202020222021
Risk-free interest rateRisk-free interest rate0.42 %1.34 %Risk-free interest rate1.63 %0.42 %
Expected option life (in years)Expected option life (in years)5.015.14Expected option life (in years)4.915.01
Volatility rateVolatility rate53 %39 %Volatility rate58 %53 %
Dividend rateDividend rate0 %0 %Dividend rate0 %0 %
Weighted-average grant date fair valueWeighted-average grant date fair value$115.78$28.39Weighted-average grant date fair value$51.79$115.78
The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the sixthree months ended June 30,March 31, 2022 and 2021 was $103.60 and 2020 was $204.50 and $85.34,$238.20, respectively.
Compensation expense capitalized to inventory and compensation expense related to the Company’s ESPP were not material for the three and six months ended June 30, 2021March 31, 2022 or 2020.2021.
Note 7. Industry and Geographic Information
The Company operates in 1 reportable segment. Sales to customers outside of the U.S.United States represented $147.0$95.1 million (27%(9%) and $96.8$86.6 million (26%(23%) of total revenuerevenues for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively. As of June 30, 2021March 31, 2022 and December 31, 2020,2021, net accounts receivable due from foreign customers were $22.2$70.3 million and $18.6$53.5 million, respectively.
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For the three months ended March 31, 2022 and 2021, sales of COVID-19 products accounted for 83% an
d 72% of
total revenue, respectively. For the three months ended March 31, 2022 and 2021, sales of influenza products accounted for 9% and 4% of total revenue, respectively.
The Company had sales to individual customers in excess of 10% of total revenues, as follows:
Six Months Ended
 June 30,		Three Months Ended
March 31,
2021202020222021
Customer:Customer:Customer:
AA18 %19 %A38 %— %
BB11 %19 %B14 %22 %
CC9 %10 %C8 %12 %
Total:Total:38 %48 %Total:60 %34 %
As of June 30, 2021March 31, 2022 and December 31, 2020,2021, net accounts receivable from customers with balances due in excess of 10% of total accounts receivable totaled $9.1$468.2 million and $411.7$267.3 million, respectively.
Consolidated total revenues by product category for the sixthree months ended June 30,March 31, 2022 and 2021 and 2020 were as follows (in thousands):
Three Months Ended
June 30,		Six Months Ended
 June 30,		 Three Months Ended
March 31,
2021202020212020 20222021
Rapid ImmunoassayRapid Immunoassay$60,070 $80,606 $297,740 $176,536 Rapid Immunoassay$892,810 $237,670 
Cardiometabolic ImmunoassayCardiometabolic Immunoassay71,666 54,191 138,218 108,092 Cardiometabolic Immunoassay50,153 66,552 
Molecular Diagnostic SolutionsMolecular Diagnostic Solutions34,456 55,177 94,719 63,540 Molecular Diagnostic Solutions45,989 60,263 
Specialized Diagnostic SolutionsSpecialized Diagnostic Solutions10,418 11,780 21,271 28,239 Specialized Diagnostic Solutions13,307 10,853 
Total revenuesTotal revenues$176,610 $201,754 $551,948 $376,407 Total revenues$1,002,259 $375,338 
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Note 8. Commitments and Contingencies
Leases
We lease administrative, research and development, sales and marketing and manufacturing facilities and certain equipment under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases, and may contain clauses for rent escalation, renewal options or early termination.
Summers Ridge Lease — The Company leases 3 of the 4 buildings that are located on the Summers Ridge Propertyproperty in San Diego, California with an initial term through January 2033 with options to extend the lease for 2 additional five-year terms upon satisfaction of certain conditions, which have not been included in the determination of the lease term. The lease is subject to must-take provisions related to one1 additional building, which will have the same lease term as the 3 buildings originally leased. The remaining building is subject to the expiration of the lease with its current tenant in October 2022, subject to an option to renew for a two-year period.
McKellar Court Lease — During 1999, the Company completed a sale and leaseback transaction of its San Diego facility at McKellar Court to a partnership for which the Company is a limited partner. The partnership is deemed to be a variable interest entity (VIE). The Company is not, however, the primary beneficiary of the VIE as it does not have the power to direct the activities of the partnership and does not have the obligation to absorb losses or receive benefits of the partnership that could potentially be significant to the partnership. The Company made lease payments to the partnership of approximately $0.5 millionthe six months ended June 30, 2021.
Rutherford Lease — During January 2021, the Company entered into a lease agreement for a manufacturing facility in Carlsbad, California and recorded a right-of-use asset and a corresponding lease liability of $39.4 million. The initial lease term is 15 years with options to extend the lease for 2 additional five-year periods.
Litigation and Other Legal Proceedings
In Beckman Coulter, Inc. v. Quidel Corporation, which was filed in the Superior Court for the County of San Diego,
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California, on November 27, 2017, Beckman Coulter, Inc. (“Beckman Coulter”) alleged that a provision of an agreement between Quidel and Beckman Coulter violated state antitrust laws. Our acquisition of the B-type Naturietic Peptide assay business (“BNP Business”) in October 2017 consisted of assets and liabilities relating to a contractual arrangement with Beckman Coulter (the “BNP Supply Agreement”) for the supply of antibodies and other inputs related to, and distribution of, the Triage® B-type Naturietic Peptide Test (“BNP Test”) for the Beckman Coulter Access Family of Immunoassay Systems. In the lawsuit, Beckman Coulter asserted that an exclusivity provision violated certain state antitrust laws and was unenforceable. From the inception of the lawsuit, the lawsuit was subject to numerous motions, rulings, appellate reviews and opinions. The matter was scheduled for trial starting April 15, 2022. On July 24, 2021, the Company and Beckman Coulter entered into a Master Agreement (the “Master Agreement”) pursuant to which, among other matters, Quidel’s business of selling and distributing the BNP Test for the BNP Business will be transitioned to Beckman Coulter. Concurrent with entering into the Master Agreement, Quidel and Beckman Coulter entered into a Settlement Agreement to resolve all disputes relating to the existing BNP Supply Agreement, among other matters. On August 3, 2021, the lawsuit was dismissed with prejudice. See Note 11 for further discussion of the agreements with Beckman Coulter.
From time to time, the Company is involved in other litigation and other legal proceedings, including matters related to product liability claims, commercial disputes and intellectual property claims, as well as regulatory, employment, and other claims related to our business. The Company accrues for legal claims when, and to the extent that, amounts associated with the claims become probable and are reasonably estimable. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. For those matters as to which we are not able to estimate a possible loss or range of loss, we are not able to determine whether the loss will have a material adverse effect on our business, financial condition or results of operations or liquidity. No accrual has been recorded as of June 30, 2021March 31, 2022 and December 31, 20202021 related to such matters as they are not probable and/or reasonably estimable. 
Management believes that all such current legal actions, in the aggregate, will not have a material adverse effect on the Company. However, the resolution of, or increase in any accruals for, one or more matters may have a material adverse effect on the Company’s results of operations and cash flows. The Company also maintains insurance, including coverage for product liability claims, in amounts that management believes are appropriate given the nature of its business.
Note 9. Fair Value Measurements
The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods (in thousands):
June 30, 2021December 31, 2020 March 31, 2022December 31, 2021
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:Assets:Assets:
Cash equivalents (money market funds)$200,013 $0 $0 $200,013 $200,003 $0 $0 $200,003 
Cash equivalentsCash equivalents$204,603 $4,857 $— $209,460 $204,672 $6,649 $— $211,321 
Marketable securitiesMarketable securities— 64,996 — 64,996 — 63,610 — 63,610 
Derivative assetsDerivative assets0 361 0 361 0 24 0 24 Derivative assets— 257 — 257 — 84 — 84 
Total assets measured at fair valueTotal assets measured at fair value$200,013 $361 $0 $200,374 $200,003 $24 $0 $200,027 Total assets measured at fair value$204,603 $70,110 $— $274,713 $204,672 $70,343 $— $275,015 
Liabilities:Liabilities:Liabilities:
Derivative liabilitiesDerivative liabilities$0 $597 $0 $597 $0 $3,061 $0 $3,061 Derivative liabilities$— $29 $— $29 $— $269 $— $269 
Contingent considerationContingent consideration0 0 5,967 5,967 0 0 11,896 11,896 Contingent consideration— — 6,044 6,044 — — 6,073 6,073 
Deferred considerationDeferred consideration0 76,509 0 76,509 0 115,951 0 115,951 Deferred consideration— 79,418 — 79,418 — 78,436 — 78,436 
Total liabilities measured at fair valueTotal liabilities measured at fair value$0 $77,106 $5,967 $83,073 $0 $119,012 $11,896 $130,908 Total liabilities measured at fair value$— $79,447 $6,044 $85,491 $— $78,705 $6,073 $84,778 
There were no transfers of assets or liabilities betweeninto or out of Level 1, Level 2 and Level 3 categories of the fair value hierarchy during the three and six-monththree-month period ended June 30, 2021March 31, 2022 and the year ended December 31, 2020.2021.
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Cash equivalents consist of funds held in money market accounts that are valued using quoted prices in active markets for identical instruments.instruments and highly liquid corporate debt securities with maturities within three months from purchase. Marketable securities consist of investment-grade corporate debt securities, corporate asset-backed securities and commercial paper. Derivative financial instruments are measured based on observable inputs that are corroborated by market data. Observable inputs include broker quotes, daily market foreign currency rates and forward pricing curves.
In connection with the acquisition of the B-type Natriuretic Peptide (“BNP”) assay business (“BNP Business,Business”) from Alere Inc., the Company has anwill pay annual installment payment payable in 2022installments of up to $48.0 million and an annual installment payment of $40.0 million payable in 2023 remaining as of June 30, 2021.each year through April 2023. The
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fair value of the payments treated as deferred consideration is calculated based on the net present value of cash payments using an estimated borrowing rate based on a quoted price for a similar liability. The fair value of the payments treated as contingent consideration is calculated using a discounted probability weighted valuation model. Discount rates used in such calculation isare a significant assumption that isare not observed in the market and, therefore, the resulting fair value represents a Level 3 measurement. The discount rate of 2.9% used as of June 30, 2021 was based on estimated borrowing rate for a similar liability.
Changes in estimated fair value of contingent consideration liabilities from December 31, 20202021 through June 30, 2021March 31, 2022 were as follows (in thousands):
Contingent consideration liabilities
(Level 3 measurement)
Balance at December 31, 20202021$11,8966,073 
Cash payments(6,030)(29)
Change in estimated fair value, recorded in general and administrative expenses101 
Balance at June 30, 2021March 31, 2022$5,9676,044 

Note 10. Foreign Currency Hedges
In the normal course of business, the Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates. As part of its strategy to manage the level of exposure to the risk of fluctuations in foreign currency exchange rates, the Company uses designated cash flow hedges in the form of foreign currency forward contracts to mitigate the impact of foreign currency translation on transactions that are denominated primarily in the Euro and the Chinese Yuan. The Company also uses non-designated forward contracts to hedge non-functional currency denominated balance sheet assets. Hedging relationships for all derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transactions are formally documented. The Company does not use any derivative financial instruments for trading or other speculative purposes.
Such forward foreign currency forward contracts are carried at fair value in prepaid expenses and other current assets or other current liabilities depending on the unrealized gain or loss position of the hedged contract as of the balance sheet date. Changes in the value of the derivatives are recorded to other comprehensive income (loss) until the underlying hedged item is recognized in earnings, or the derivative no longer qualifies as a highly effective hedge. The cash flows from derivatives treated as hedges are classified in the Consolidated Statements of Cash Flows in the same category as the item being hedged.
The notional principal amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of ourthe Company’s exposure to credit or market loss. Credit risk represents ourthe Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current currency exchange rates at each respective date. WeThe Company generally enterenters into master netting arrangements which reducesthat reduce credit risk by permitting net settlement of transactions with the same counterparty. We present ourThe Company presents its derivative assets and derivative liabilities at their net fair values. We didThe Company does not have any derivative instruments with credit-risk related contingent features that would require usit to post collateral.
The following table summarizes the fair value and notional amounts of designated and non-designated foreign currency forward contracts as of June 30, 2021March 31, 2022 and December 31, 20202021 (in thousands):
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
Notional AmountFair Value, NetNotional AmountFair Value, NetNotional AmountFair Value, NetNotional AmountFair Value, Net
Designated cash flow hedges:Designated cash flow hedges:Designated cash flow hedges:
Prepaid expenses and other current assetsPrepaid expenses and other current assets$3,481 $158 $0 $0 Prepaid expenses and other current assets$4,593 $219 $— $84 
Other current liabilitiesOther current liabilities$7,173 $588 $38,435 $2,819 Other current liabilities$2,409 $29 $17,629 $139 
Non-designated forward contracts:Non-designated forward contracts:Non-designated forward contracts:
Prepaid expenses and other current assetsPrepaid expenses and other current assets$16,430 $203 $18,160 $24 Prepaid expenses and other current assets$22,548 $38 $— $— 
Other current liabilitiesOther current liabilities$1,442 $9 $23,120 $242 Other current liabilities$— $— $15,809 $130 
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Note 11. Pending Business Combination
On December 22, 2021, the Company entered into a Business Combination Agreement (the “BCA”) with Ortho Clinical Diagnostics Holdings plc (“Ortho”), Coronado Topco, Inc. (“Topco”), Orca Holdco, Inc. (“US Holdco Sub”), Laguna Merger Sub, Inc. (“US Merger Sub”) and Orca Holdco 2, Inc. (“US Holdco Sub 2”). Under the terms of the BCA, the Company is entering into a business combination with Ortho under Topco, a new holding company (the “Combinations”). The Combinations are expected to be implemented by way of (i) a scheme of arrangement to be undertaken by Ortho under Part 26 of the UK Companies Act 2006 (the “Ortho Scheme”), pursuant to which each issued and outstanding share of Ortho (the “Ortho Shares”) will be acquired by a nominee of Topco, such that Ortho will become a wholly owned subsidiary of Topco, and (ii) a merger (the “Quidel Merger”) of US Merger Sub with and into the Company immediately following consummation of the Ortho Scheme, with the Company surviving the merger as a wholly owned subsidiary of Topco.
At the effective time of the Ortho Scheme, each Ortho Share will be acquired by a nominee on behalf and for the benefit of Topco in exchange for 0.1055 shares of common stock of Topco (the “Topco Shares”) and $7.14 in cash. At the effective time of the Quidel Merger, each share of the Company’s common stock (each, a “Quidel Share”) will be converted into the right to receive 1 Topco Share. Ortho will be acquired for total consideration of approximately $4.3 billion (which is based on the April 26, 2022 closing price of $100.12 per Quidel Share), including $1.7 billion of cash, funded through cash on the Company’s balance sheet and expected incremental borrowings. Following the closing of the Combinations, Ortho’s current net debt of $2.0 billion is expected to continue to be outstanding. The Combinations are expected to be completed in the second quarter of 2022.
If the Combinations are completed, Ortho shareholders are expected to own approximately 38% of Topco on a fully diluted basis and the Company’s stockholders are expected to own approximately 62% of Topco on a fully diluted basis, based on the respective capitalizations of Ortho and the Company as of the date of the BCA. The parties intend to list the Topco Shares to be issued in the Combinations on Nasdaq.
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Note 11. Subsequent Events
On July 24, 2021, the Company and Beckman Coulter entered into a Master Agreement pursuant to which, among other matters, Quidel’s business of selling and distributing the BNP Test for the BNP Business will be transitioned to Beckman Coulter. Pursuant to the Master Agreement, on a country by country basis, the Company will discontinue offering its Triage® BNP assay and Beckman Coulter will offer its own branded BNP assay to the market. Prior to Beckman Coulter introducing its own branded product to the market, in certain countries, the Company will grant Beckman Coulter exclusive rights to distribute the Triage® BNP assay in such countries. The parties are targeting the initial commercial transition, including in the US, to be completed by late August 2021. Prior to the initial commercial transition to Beckman Coulter, Quidel will continue to operate the Triage® BNP Business.
As consideration for the arrangements during each of calendar years 2022 through and including 2029, Quidel will receive a minimum payment of $70 million and a maximum payment of $75 million. Such maximum payments will be pro-rated for 2021, based on the period commencing on the date of the initial commercial transition to Beckman Coulter, through December 31, 2021.
In addition, the parties entered into other related agreements under the Master Agreement, including a Transition Services Agreement, pursuant to which the parties will provide various transitional services, a Supply Agreement for the supply by Quidel of the Quidel antibody and other components used in the manufacture of the BNP assay, and a Distribution Agreement, granting Beckman Coulter the right to sell and distribute the Triage® BNP assay as described above.
Concurrent with entering into the Master Agreement, Quidel and Beckman Coulter entered into a Settlement Agreement to resolve all disputes relating to the existing BNP Supply Agreement, among other matters. See further discussion in Note 8 under the heading Litigation and Other Legal Proceedings.
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ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
In this Quarterly Report, all references to “we,” “our” and “us” refer to Quidel Corporation and its subsidiaries.
Future Uncertainties and Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the federal securities lawsSecurities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that involve material risks, assumptionsare not statements of historical fact, including without limitation certain statements under Part I, Item 2, “Management’s Discussion and uncertainties. Many possible eventsAnalysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors” and located elsewhere herein regarding industry prospects and our results of operations or factors could affect our future financial results and performance, such that our actual results and performance may differ materially from those thatposition, may be described or implied in thedeemed to be forward-looking statements. As such, no forward-looking statement can be guaranteed. Differences in actual results and performance may arise as a result of a number of factors including, without limitation:Without limiting the impact offoregoing, the novel virus (words COVID-19) global pandemic; competition; our development of new technologies, products and markets; our reliance on sales of our influenza and COVID-19 diagnostic tests; our reliance on a limited number of key distributors; the financial soundness of our customers and suppliers; acceptance of our products among physicians and other healthcare providers; the reimbursement system currently in place and future changes to that system; our ability to meet demand for our products; interruptions or shortages in our supply of raw materials and other components; costs and disruptions from failures in our information technology and storage systems and our exposure to data corruption, cyber-based attacks, security breaches and privacy violations; international risks, including but not limited to, compliance with product registration requirements, compliance with legal requirements, tariffs, exposure to currency exchange fluctuations and foreign currency exchange risk, longer payment cycles, lower selling prices and greater difficulty in collecting accounts receivable, reduced protection of intellectual property rights, social, political and economic instability, increased financial accounting and reporting burdens and complexities, taxes, and diversion of lower priced international products into U.S. market; worldwide political and social uncertainty, including tariffs, trade wars or social tensions; our development, acquisition and protection of proprietary technology rights; intellectual property risks, including but not limited to, infringement litigation, loss of our Emergency Use Authorization from the U.S. Food and Drug Administration (the “FDA”) for our COVID-19 products; failures or delays in receipt of new product reviews or related to currently-marketed products by FDA or other regulatory authorities or loss of any previously received regulatory approvals or clearances or other adverse actions by regulatory authorities; funding and compliance risks relating to government contracts, including the ability to meet key deliverables and milestones under our NIH RADx ATP contract; product defects; compliance with government regulations relating to the handling, storage and disposal of hazardous substances; our ability to identify and successfully acquire and integrate potential acquisition targets; our need for additional funds to finance our capital or operating needs; competition for and loss of management and key personnel; our exposure to claims and litigation that could result in significant expenses and could ultimately result in an unfavorable outcome for us; business risks not covered by insurance; changes in tax rates and exposure to additional tax liabilities or assessments; and provisions in our charter documents and Delaware law that might delay or impede stockholder actions with respect to business combinations or similar transactions. Forward-looking statements typically are identified by the use of terms such as “may,“may,” “will,” “should,” “might,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” and similar words although someare intended to identify forward-looking statements are expressed differently. Forward-looking statements instatements. Our business is subject to a number of risks, including those discussed under Part II, Item 1A, “Risk Factors” of this Quarterly Report include, among others, statements concerning: our outlook for the remainder of 2021 including the sources of expected growthon Form 10-Q and the sustainability of demand for COVID-19 testing; our initiatives for the remainder of 2021, including research and development activities and emphasis and our production capacity expansion; the expected timing of commencement of operations at our Carlsbad facility; that we expect to continue to make substantial expenditures for research and development activities; the nature and amount of projected capital expenditures for the remainder of 2021 and our source of funds for such expenditures; the sufficiency of our liquidity and capital resources, including the impact of COVID-19 thereon; our strategy, goals, initiatives and objectives; our strategy, exposure to, and defenses against, claims and litigation; the sufficiency of our liquidity and our short-term needs for capital; that we may incur additional debt or issue additional equity; and our intention to continue to evaluate technology, product lines and acquisition and licensing opportunities. The risks described underPart I, Item IA, “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, and elsewhere2021, that could cause actual results to differ materially from those indicated by forward-looking statements made herein and in reports and registration statements that we file with the Securities and Exchange Commission (the “SEC”)presented elsewhere by management from time to time, should be carefully considered. You are cautioned not to place undue reliance on thesetime. Such forward-looking statements which reflectrepresent management’s analysis only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to publicly release thecurrent expectations and are inherently uncertain. Investors are warned that actual results of any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise.may differ from management’s expectations.
The following should be read in conjunction with the Consolidated Financial Statements and Notesnotes thereto beginning on page 3 of this Quarterly Report.
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Overview
Our primary mission is to advance diagnostics to improve human health. We have a leadership position in the development, manufacturing and marketing of rapid diagnostic testing solutions. We separate these into our four product categories: rapid immunoassay, cardiometabolic immunoassay, molecular diagnostic solutions and specialized diagnostic solutions. We currently sell our products directly to end users and distributors, in each case, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies and wellness screening centers.centers, as well as for individual, non-professional, over-the-counter (“OTC”) use. More recently, we have begun to reach significant new markets as we introduced our QuickVue® At-Home OTC COVID-19 Test for reopening schools, and for health departments, employers, entertainment centers and many other locations. We market our products through a network of distributors and through a direct sales force. We operate in one business segment that develops, manufactures and markets our products globally.
For the three months ended March 31, 2022, total revenues increased 167% to $1,002.3 million as compared to the same period in the prior year, and currency exchange rates had a minimal impact on growth rate. Our revenues can be highly concentrated over a small number of products. For the three months ended March 31, 2022 and 2021, sales of our COVID-19 products accounted for 83% and 72% of our total revenue, respectively. For the three months ended March 31, 2022 and 2021, sales of our influenza products accounted for 9% and 4% of our total revenue, respectively. Additionally, a significant portion of our total revenue is from a relatively small number of customers. Approximately 60% and 34% of our total revenue for the three months ended March 31, 2022 and 2021, respectively, were related to sales to our three largest customers.
Recent Developments
On December 22, 2021, we entered into the BCA with Ortho, Topco, US Holdco Sub, US Merger Sub and US Holdco Sub 2. Under the terms of the BCA, we are entering into the Combinations with Ortho under Topco, a new holding company. The Combinations are expected to be implemented by way of (i) the Ortho Scheme, pursuant to which each issued and outstanding Ortho share will be acquired by a nominee of Topco, such that Ortho will become a wholly owned subsidiary of Topco, and (ii) the Quidel Merger immediately following consummation of the Ortho Scheme, with us surviving the merger as a wholly owned subsidiary of Topco.
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At the effective time of the Ortho Scheme, each Ortho Share will be acquired by a nominee on behalf and for the benefit of Topco in exchange for 0.1055 Topco Shares and $7.14 in cash. At the effective time of the Quidel Merger, each Quidel Share will be converted into the right to receive one Topco Share. Ortho will be acquired for total consideration of approximately $4.3 billion (which is based on the April 26, 2022 closing price of $100.12 per Quidel Share), including $1.7 billion of cash, funded through cash on our balance sheet and expected incremental borrowings. Following the closing of the Combinations, Ortho’s current net debt of $2.0 billion is expected to continue to be outstanding. The Combinations are expected to be completed in the second quarter of 2022.
If the Combinations are completed, Ortho shareholders are expected to own approximately 38% of Topco on a fully diluted basis and our stockholders are expected to own approximately 62% of Topco on a fully diluted basis, based on Ortho’s capitalization and our capitalization as of the date of the BCA. The parties intend to list the Topco Shares to be issued in the Combinations on Nasdaq. For additional information about the pending Combinations and the preliminary unaudited pro forma financial information, see Topco’s prospectus, filed with the Securities and Exchange Commission (the “SEC”) on April 11, 2022.
Impact of COVID-19 Pandemic
Events surrounding the SARS-CoV-2 virus that emerged in late 2019 and the ensuing global pandemic has had a dramatic impact on businesses globally and our business as well. The severity and duration of the pandemic and economic repercussions of the virus and government actions in response to the pandemic remain uncertain and will ultimately depend on many factors, including the speed of global dissemination and effectiveness of the vaccination and containment efforts throughout the world, the duration and spread of the virus, as well as potential seasonality, variants or new outbreaks.
In the United States, federal, state and local government directives and policies have beenwere put in place to manage public health concerns and address the economic impacts, including reduced business activity increased unemployment, and overall uncertainty presented by this new healthcare challenge. Similar actions have been taken by governments around the world. While all our sites are currentlyfacilities remain operational globally, our facilities could be required to temporarily curtail production levels or temporarily cease operations based on government mandates or as a result of the pandemic. To mitigate risks, we continue to evaluate the extent to which COVID-19 may impact our business and operations and adjust risk mitigation planning and business continuity activities as needed.
New SARS-CoV-2 Diagnostic Products
As a leader in point-of-care diagnostics and with established expertise in respiratory infectious disease products, we arewere and remain well-positioned to respond to the COVID-19 pandemic. We work closely with national and local governments, agencies, and industry partners to develop, manufacture and supply critical diagnostic products to support testing initiatives to help curb the spread of the SARS-CoV-2 virus. In particular, we developed new molecular and antigen products to diagnose the SARS-CoV-2 virus. We have experienced exceptional demand for such products. In response, we committed significant resources toward the expansion of our production capacity.
We expect demand for our molecular and antigen assays and instruments to continue for the near-term, especially in the United States. At the same time, we also have observed decreasedfluctuating demand for certain of our other diagnostic products in connection with customers closing or decreasing their operations and/or patients deferring treatment.products. The extent to which COVID-19 will impact demand for our products depends on future developments, which are highly uncertain and very difficult to predict, including new information that may emerge concerning the severity of the coronavirus,COVID-19, regulatory changes in any of the markets in which we serve, impact of new SARS-CoV-2 variants and actions to contain and treat its impacts,their impact, including the vaccination programs now beingthat have been implemented.
Operations and Employee Safety
While many governments implemented lockdown and shelter-in-place orders, requiring non-essential businesses to shut down operations, our business is deemed “essential” and we continued to operate, manufacture and distribute products to customers. We implemented preparedness plans designed to help protect the safety of our employees and maintain operational continuity with an emphasis on manufacturing, product distribution and product development during this crisis. To date, we have been able to maintain our operations without significant interruption and have been able to develop and quickly scale manufacturing capacity for new products related to the COVID-19 pandemic.
To mitigate the pandemic’s impact, we implemented preventative protocols intended to help safeguard our on-site employees and maintain business continuity. These measures have created additional burdens on our infrastructure and information technology systems and may result in decreased productivity and increased operating costs. However, the various responses we have put in place have to date resulted in limited disruption to our normal business operations.
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Supply Chains
As a result of the COVID-19 pandemic, and other economic and geopolitical conditions, we have seen delays in receipts forreceiving certain raw materials and components for our products. Such delays can result in disruption to our business operations. In response, we have increased safety stock of certain critical components and finished goods for which we have seen extraordinary demand. We are continuously evaluating our supply chain to identify potential gaps and take steps intended to help ensure continuity. We have considered potential political, legal or regulatory actions that could be taken as a result of the pandemic in jurisdictions where we manufacture, source or distribute products that could impact our supply of products to our customers or the availability of raw materials and components from our suppliers. We cannot currently predict the frequency, duration or scope of these government actions and any supply disruptions, and the availability of various products is dependent on our suppliers, their location and the extent to which they are impacted by the COVID-19 pandemic, among other factors. We arecontinue to proactively workingwork with manufacturers, industry partners and government agencies to help meet the needs of our customers during the pandemic.these supply chain constraints.
Our inventory levels may fluctuate due to supply chain variability in conjunction with larger and more frequent customer orders. In response, we have added alternate suppliers for certain critical components and instruments, increased inventory of raw materials needed in our operations, increased manufacturing capacity and continue to explore opportunities for further expansion in our Athens, Ohio, and San Diego, California facilities. In January 2021, we significantly expanded our capacity by entering into a long-term lease for an additional manufacturing facility inand Carlsbad, California. This facility is expected to begin operations in the second half of 2021.California facilities.
We are seeking to minimize the impact of delays and secure allocations of vital raw materials to meet demand for our products. However, dependent on thedespite our mitigation efforts, and vaccination roll outs, we may continue to experience some sort of interruptioninterruptions to our supply chains, and such an interruptioninterruptions could materially affect our ability to timely manufacture and distribute our products and unfavorably impact our results of operations depending on the nature and duration of such interruption.interruptions.
Outlook
Our financial performance and results of operations will depend on future developments and other factors that are highly uncertain, continuously evolving and cannot be predicted,unpredictable, including the duration, of the COVID-19 outbreak, the severity and continuation of outbreak surges of the COVID-19 pandemic and actions to contain the spread of the virus such as mask wearing, social distancing and vaccination efforts globally, and the impact of these and other factors onglobally. While demand for COVID-19 testing demand. Whilecan fluctuate dramatically, as we have seen a decrease in demand from the extremely high levels experienced in the fourth quarter of 2020,2021, we continue to believe that for at least the remainder of 2021, some level of COVID-19 testing demand is sustainable.will be sustainable through at least 2022. We believe thissome level of ongoing COVID-19 testing will be required as communities attempt a return to more normal practices in schools, the workplace and entertainment venues. With respect to our core products, we anticipate revenue growth, for these products for the second half of 2021, assuming a normalized respiratory season.
We expect to continue to invest heavily in research and development activities for our next generation immunoassay and molecular platforms, as well as additional assays to be launched on our current platforms. Additionally, we are making substantial investments in the expansion of our production capacity, whilecapacity. While initially this expansion was to address the testing demand driven by the COVID-19 pandemic, longer-termin the long-term, we expect this capacityexpansion to provide increased flexibility to address opportunities for new products and to address new markets globally. We intend to continue our focus on prudently managing our business and delivering improved financial results (excluding the effects of revenues from COVID-19 products), while at the same time striving to introduce new products into the market and maintain our emphasis on research and development investments for longer termlonger-term growth. Finally, we expect to continue to evaluate strategic opportunities to acquire new product lines, technologies and companies.
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Three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020March 31, 2021
Total Revenues
The following table compares total revenues for the three months ended June 30,March 31, 2022 and 2021 and 2020 (in thousands, except percentages):
Three Months Ended
June 30,		Increase (Decrease) Three Months Ended
March 31,		Increase (Decrease)
20212020$% 20222021$%
Rapid ImmunoassayRapid Immunoassay$60,070 $80,606 $(20,536)(25)%Rapid Immunoassay$892,810 $237,670 $655,140 276 %
Cardiometabolic ImmunoassayCardiometabolic Immunoassay71,666 54,191 17,475 32 %Cardiometabolic Immunoassay50,153 66,552 (16,399)-25 %
Molecular Diagnostic SolutionsMolecular Diagnostic Solutions34,456 55,177 (20,721)(38)%Molecular Diagnostic Solutions45,989 60,263 (14,274)-24 %
Specialized Diagnostic SolutionsSpecialized Diagnostic Solutions10,418 11,780 (1,362)(12)%Specialized Diagnostic Solutions13,307 10,853 2,454 23 %
Total revenuesTotal revenues$176,610 $201,754 $(25,144)(12)%Total revenues$1,002,259 $375,338 $626,921 167 %
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For the three months ended June 30, 2021,March 31, 2022, total revenue decreasedrevenues increased to $176.6$1,002.3 million from $201.8$375.3 million for the same period in the prior period.year. The Rapid Immunoassay andcategory was the largest contributor to revenue growth, primarily driven by an increase of $652.6 million in sales of QuickVue SARS Antigen assays. Cardiometabolic Immunoassay sales decreased by $16.4 million largely driven by lower BNP sales due to the transition of the BNP Business to Beckman Coulter, Inc. Molecular Diagnostic Solutions categories were the largest contributors to revenue decline,sales decreased by $14.3 million driven primarily by decreased pricing on the Lyra® Antigen assay. The increase in Specialized Diagnostic Solutions sales was driven primarily by increased demand for cell culture respiratory products in 2022 as there was no cold and flu season in the Sofia SARS Antigen assayfirst quarter of 2021. For the three months ended March 31, 2022 and Lyra SARS-CoV-2 assays. This was partially offset by increased2021, sales of the QuickVue SARS Antigenour influenza products were $89.1 million and Solana SARS assays. Cardiometabolic Immunoassay sales increased $17.5$16.4 million, as COVID-19 restrictions have begun to lift globally and sales are returning to pre-pandemic levels.respectively. Currency exchange rate impact for the quarterthree months ended March 31, 2022 was favorableunfavorable by $2.8$1.0 million, which had a 1.6%1.7% impact on the growth rate.
Gross Profit
Gross profit decreasedincreased to $106.2 million, or 60% of revenue for the three months ended June 30, 2021, compared to $148.8$740.0 million, or 74% of revenue for the three months ended June 30, 2020.March 31, 2022, compared to $302.0 million, or 80% of revenue for the three months ended March 31, 2021. The decreasedincreased gross profit was drivendue to higher sales volumes in the current period, partially offset by changes in product mix and lower selling prices for our SARS products and unfavorable product mix due to lower demand for SARS products and increased demand for Cardiometabolic Immunoassay products. Increases in supply chain and other indirect manufacturing costs also contributed to lower gross profit inwere offset by increased absorption driven by higher production volumes. Gross margin for the period. Gross marginthree months ended March 31, 2022 declined as compared to last year due to the same factors.period in the prior year driven primarily by product mix and lower selling prices.
Operating Expenses
The following table compares operating expenses for the three months ended June 30,March 31, 2022 and 2021 and 2020 (in thousands, except percentages):
Three Months Ended
June 30,
 20212020
 Operating
expenses		As a % of
total revenues		Operating
expenses		As a % of
total revenues
 Increase (Decrease)
 $%
Research and development$22,614 13 %$20,970 10 %$1,644 8 %
Sales and marketing$38,100 22 %$27,567 14 %$10,533 38 %
General and administrative$21,138 12 %$15,679 8 %$5,459 35 %
Acquisition and integration costs$1,028 1 %$872 — %$156 18 %

Three Months Ended March 31,
 20222021
 Operating
expenses		As a % of
total revenues		Operating
expenses		As a % of
total revenues		Increase (Decrease)
 $%
Research and development$26,368 3 %$23,304 6 %$3,064 13 %
Sales and marketing$65,388 7 %$34,233 9 %$31,155 91 %
General and administrative$24,508 2 %$19,507 5 %$5,001 26 %
Acquisition and integration costs$3,037 0 %$726 0 %$2,311 318 %
Research and Development Expense
Research and development expense for the three months ended June 30, 2021 was heavily focused on Savanna instrument and cartridge development and clinical work, Sofia Serology and Gastrointestinal assay chemicals and next generation platform development. Research and development expensesMarch 31, 2022 increased to $26.4 million from $21.0$23.3 million to $22.6 millionfor the same period in the prior year, primarily due primarily to increased costs related to the Savanna® development, partially offset by lower spending on the Savanna instrumentQuickVue OTC assays and cartridge development in preparation for clinical trials.
20
Sofia
®
projects.
Research and development expenses includeexpense includes direct external costs such as fees paid to third-party contractors and consultants, and internal direct and indirect costs such as compensation and other expenses for research and development personnel, supplies and materials, clinical trials and studies, facility costs and depreciation.
Sales and Marketing Expense
Sales and marketing expense for the three months ended June 30, 2021March 31, 2022 increased to $65.4 million from $27.6$34.2 million for the same period in the prior year, primarily driven by higher freight expense due to $38.1 million due primarily tohigher sales volume, higher product promotional spend associated with the launch of the QuickVue At HomeAt-Home OTC COVID-19 Test as well asand higher compensation costs driven by increased travel and meetings as COVID-19 related travel restrictions ease.headcount.
General and Administrative Expense
General and administrative expense for the three months ended June 30, 2021March 31, 2022 increased to $24.5 million from $15.7$19.5 million to $21.1 million compared withfor the same period in the prior year primarily due to increased spend on IT projects and higher compensation costs driven by increased headcount to supportimproved performance during the growth of the business.current period.
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Acquisition and Integration Costs
Acquisition and integration costs were $1.0of $3.0 million and $0.9$0.7 million for the three months ended June 30,March 31, 2022 and 2021, and 2020, respectively, primarily related to the evaluation of new business development opportunities.pending Combinations with Ortho.
Interest and Other Expense, Net
Interest and other expense, net primarily relates to accretion of interest on the deferred consideration coupon and accretion of interest related to our Convertible Senior Notes and interest and amortization of deferred financing costs associated with our Credit Agreement. Interest and other expense, net for the three months ended June 30, 2021March 31, 2022 decreased from $3.5 million to $1.6by $2.4 million compared withto the same period in the prior year, primarily due primarily to the maturity of the Company’s Convertible Senior Notes in December 2020, including an unfavorable $1.1 million change in fair value of derivative liabilities associated with a Convertible Senior Notes conversion. Additionally,decreased interest expense decreased due toas a result of a lower deferred consideration liability outstanding duringin 2022 compared to 2021.
Income Taxes
TheFor the three months ended March 31, 2022 and 2021, the Company recognized income tax provisions of $2.6$140.7 million in relation to income before taxes of $21.7$620.6 million and $12.5$43.7 million in relation to income before taxes of $80.2$221.8 million, respectively, resulting in effective tax rates of 12%23% and 16% for the three months ended June 30, 2021 and 2020,20%, respectively. The lowerhigher tax expense for the three months ended June 30, 2021March 31, 2022 compared to the same period in the prior year is primarily a result of lower pre-tax profits.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020
Total Revenues
The following table compares total revenues for the six months ended June 30, 2021 and 2020 (in thousands, except percentages):
 Six Months Ended
 June 30,		Increase (Decrease)
 20212020$%
Rapid Immunoassay$297,740 $176,536 $121,204 69 %
Cardiometabolic Immunoassay138,218 108,092 30,126 28 %
Molecular Diagnostic Solutions94,719 63,540 31,179 49 %
Specialized Diagnostic Solutions21,271 28,239 (6,968)(25)%
Total revenues$551,948 $376,407 $175,541 47 %
For the six months ended June 30, 2021, total revenue increased to $551.9 million from $376.4 milliona proportionate increase in the prior year. The Rapid Immunoassay category was the largest contributor to revenue growth, driven by sales of the Sofia SARS Antigen assays. Molecular Diagnostic Solutions sales grew $31.2 million over prior year, driven by the sales of Lyra SARS-CoV-2 assays. Cardiometabolic Immunoassay sales increased $30.1 million as COVID-19 restrictions have begun to lift and sales
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return to pre-pandemic levels. The decrease in Specialized Diagnostic Solutions sales was driven primarily by a decline in demand for the cell culture respiratory products as there was no cold and flu season in the first quarter of 2021. Currency exchange rate impact for the first half was favorable by $4.8 million, which had a 1.7% impact on the growth rate.
Gross Profit
Gross profit increased to $408.1 million, or 74% of revenue for the six months ended June 30, 2021, compared to $263.7 million, or 70% of revenue for the six months ended June 30, 2020. The increased gross profit was due to higher sales volumes in the current period as well as improved product mix driven by continued demand for our SARS assays. The gains were partially offset by higher indirect manufacturing costs. Gross margin improved as compared to the same period in the prior year driven primarily by improved product mix.
Operating Expenses
The following table compares operating expenses for the six months ended June 30, 2021 and 2020 (in thousands, except percentages):
Six Months Ended June 30,
 20212020
 Operating
expenses		As a % of
total revenues		Operating
expenses		As a % of
total revenues
 Increase (Decrease)
 $%
Research and development$45,918 8 %$37,349 10 %$8,569 23 %
Sales and marketing$72,333 13 %$58,305 15 %$14,028 24 %
General and administrative$40,645 7 %$30,011 8 %$10,634 35 %
Acquisition and integration costs$1,754 — %$2,786 1 %$(1,032)(37)%

Research and Development Expense
Research and development expense for the six months ended June 30, 2021 increased from $37.3 million to $45.9 million. Development costs for the year primarily consisted of spending on the Savanna instrument and cartridge and Sofia SARS and QuickVue At Home OTC COVID-19 Test. Increases over prior year were driven primarily by Savanna development in preparation for clinical trials.
Research and development expenses include direct external costs such as fees paid to third-party contractors and consultants, and internal direct and indirect costs such as compensation and other expenses for research and development personnel, supplies and materials, clinical trials and studies, facility costs and depreciation.
Sales and Marketing Expense
Sales and marketing expense for the six months ended June 30, 2021 increased $14.0 million to $72.3 million compared with the prior year, primarily due to product promotional spend associated with the launch of QuickVue At Home OTC COVID-19 Test, higher compensation costs driven by increased headcount and increased travel, meeting and trade show costs as COVID-19 related travel restrictions ease.
General and Administrative Expense
General and administrative expense for the six months ended June 30, 2021 increased from $30.0 million to $40.6 million compared with the prior year due to increased spend on IT projects and higher compensation costs driven by increased headcount to support the growth of the business.
Acquisition and Integration Costs
Acquisition and integration costs of $1.8 million and $2.8 million for the six months ended June 30, 2021 and 2020, respectively, primarily related to the evaluation of new business development opportunities.
22

Other Expense, net
Interest and other expense, net primarily relates to accretion of interest on the deferred consideration, coupon and accretion of interest related to our Convertible Senior Notes and interest and amortization of deferred financing costs associated with our Credit Agreement. Interest and other expense, net for the six months ended June 30, 2021 decreased from $6.3 million to $4.0 million compared with the prior year due primarily to the maturity of the Company’s Convertible Senior Notes in December 2020, including an unfavorable $1.1 million change in fair value of derivative liabilities associated with Convertible Senior Notes conversionin the second quarter of 2020. Additionally, interest expense decreased due to lower deferred consideration liability outstanding during 2021.
Income Taxes
For the six months ended June 30, 2021 and 2020, the Company recognized income tax provision of $46.3 million and $21.1 million, respectively, in relation to income before taxes of $243.5 million and $129.0 million. The higher tax expense for the six months ended June 30, 2021 compared to the same period in the prior year is a result of higher pre-tax profits, as well as a proportional decrease in tax deductions from stock-based compensation.
Liquidity and Capital Resources
As of June 30, 2021March 31, 2022 and December 31, 2020,2021, the principal sources of liquidity consisted of the following (in thousands):
June 30,
2021		December 31,
2020
Cash and cash equivalents$593,224 $489,941 
Amount available to borrow under the Revolving Credit Facility$175,000 $175,000 
Working capital including cash and cash equivalents$708,420 $805,441 
March 31,
2022		December 31,
2021
Cash and cash equivalents$1,275,536 $802,751 
Marketable securities, current44,270 25,758 
Marketable securities, non-current20,726 37,852 
Total cash, cash equivalents and marketable securities$1,340,532 $866,361 
Amount available to borrow under the Revolving Credit Facility$175,000 $175,000 
Working capital including cash and cash equivalents and marketable securities, current$1,620,994 $1,116,790 
As of June 30, 2021,March 31, 2022, we had $593.2$1,275.5 million in cash and cash equivalents, a $103.3$472.8 million increase from December 31, 2020.2021 driven primarily by cash generated from operations. Our cash requirements fluctuate as a result of numerous factors, such as cash generated from operations, progress in research and development, or capital expansion projects and integrationacquisition and business development activities. In addition,On December 22, 2021, we intendentered into the BCA, pursuant to which we will be entering into the Combinations with Ortho under Topco, a new holding company. Ortho will be acquired for total consideration of approximately $4.3 billion (which is based on the April 26, 2022 closing price of $100.12 per Quidel Share), including $1.7 billion of cash, funded through cash on our balance sheet and expected incremental borrowings. Following the closing of the Combinations, Ortho’s current net debt of $2.0 billion is expected to continue to evaluate candidates for new product lines, company or technology acquisitions or technology licensing. If we decide to proceed with any such transactions, we may need to incur additional debt or issue additional equity to successfully complete the transactions.be outstanding.
Our primary source of liquidity, other than our holdings of cash and cash equivalents, has been cash flows from operations and our Revolving Credit Facility.operations. Cash generated from operations provides us with the financial flexibility we need to meet normal operating, investing and financing needs. We do not currently expect the impacts of the COVID-19 pandemic to adversely affect our liquidity and capital resources or our ability to meet financial commitments. We anticipate that our current cash and cash equivalents, together with cash provided by operating activities and incremental borrowings will be sufficient to fund our near-term capital and operating needs for at least the next 12 months.
Normal operating needs include the planned costs to operate our business, including amounts required to fund working capital, research and development, and capital expenditures. Our primary short-term needs for capital, which are subject to change, include expenditures related to:
•acquisitions of equipment and other fixed assets in support and expansion of our manufacturing facility expansion;
•the continued advancement of research and development efforts;
•support of commercialization efforts related to our current and future products, including support of our direct sales force and field support resources;
•interest on and repayments of our deferred consideration, contingent consideration and lease obligations; and
•potential strategic acquisitions and investments.
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The Amended and Restated Credit Agreement provides us with a Revolving Credit Facility of $175.0 million and there iswas no balance outstanding as of June 30, 2021.March 31, 2022. The Revolving Credit Facility matures on August 31, 2023. See Note 5 ofto the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for further discussion of the Revolving Credit Facility.
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In connection with the acquisition of the BNP Business, the Company has an annual installment payment of $48.0 million payable in 2022 of up to $48.0 million and an annual installment payment of $40.0 million payable in 2023. As of June 30, 2021,March 31, 2022, these payments arewere recorded at fair value as contingent consideration of $5.8$5.9 million and deferred consideration of $76.5$79.4 million.
On December 12, 2018, our Board of Directors (the “Board”) authorized a stock repurchase program, allowing the Company to purchaserepurchase up to $50.0 million of the Company’s shares ofits common stock. On August 28, 2020, we announcedthe Board approved an amendment to the stock repurchase program to purchasethat authorized repurchases of an additional $150.0 million of our shares of common stock through August 28, 2022. As of March 31, 2022, and as of June 30, 2021, the Companywe had approximately $52.9 million available under the stock repurchase program.
We expect our revenue and operating expenses will significantly impact our cash management decisions. Our future capital requirements and the adequacy of our available funds to service ourany long-term debt outstanding and to fund working capital expenditures and business development efforts will depend on many factors, including:
•our ability to realize revenue growth from our new technologies and create innovative products in our markets;
•our ability to manage our recent significant growth and facility expansions;
•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.
Cash Flow Summary
Six Months Ended
 June 30,		Three Months Ended
March 31,
(In thousands)(In thousands)20212020(In thousands)20222021
Net cash provided by operating activities:Net cash provided by operating activities:$407,433 $120,177 Net cash provided by operating activities:$500,972 $585,457 
Net cash used for investing activities:Net cash used for investing activities:(130,273)(13,388)Net cash used for investing activities:(24,670)(64,569)
Net cash used for financing activities:Net cash used for financing activities:(173,969)(87,019)Net cash used for financing activities:(3,408)(29,648)
Effect of exchange rates on cashEffect of exchange rates on cash92 44 Effect of exchange rates on cash(109)(129)
Net increase in cash and cash equivalentsNet increase in cash and cash equivalents$103,283 $19,814 Net increase in cash and cash equivalents$472,785 $491,111 
Cash provided by operating activities of $407.4$501.0 million duringfor the sixthree months ended June 30, 2021March 31, 2022 reflects net income of $197.2$479.9 million and non-cash adjustments of $36.0$34.6 million primarily associated with depreciation, amortization, stock-based compensation, net change in operating lease right-of-use assets and the payment ofliabilities, and accretion of interest on deferred consideration. In addition, the companyCompany realized a net working capital contributionuse of $174.1$1.4 million primarily driven by a decreasean increase in accounts receivable, partially offset by a decreasean increase in income taxes payable and an increase in product inventory.accounts payable. For the sixthree months ended June 30, 2020,March 31, 2021, cash provided by operating activities of $120.2$585.5 million reflects net income of $107.9$178.1 million and non-cash adjustments of $39.3$21.3 million primarily associated with depreciation, amortization, stock-based compensation and accretion of interest on deferred consideration. Partially offsetting these inflows wasIn addition, we realized a net working capital useincrease of cash of $23.3$373.6 million driven by increasesa decrease in accounts receivable, and product inventory, partially offset by an increaseincreases in income taxes payable.product inventory.
Our investing activities used $130.3$24.7 million during the sixthree months ended June 30,March 31, 2022 primarily related to investments in manufacturing equipment, building improvements, Sofia, Solana® and Triage® instruments available for lease and scientific equipment. Additionally, we purchased $15.9 million and sold $13.7 million of available-for-sale securities during the three months ended March 31, 2022. Our investing activities used $64.6 million during the three months ended March 31, 2021 primarily related to investments in manufacturing equipment, and building improvements, Sofia, Solana and Triage instruments available for lease, building improvements and purchases of scientific equipment, partially offset by government proceeds received to fund such investments. Our investing activities used $13.4 million during the six months ended June 30, 2020 primarily related to payments for manufacturing equipment, computer equipment, building improvements, and Sofia, Solana and Triage instruments available for lease.
We are currently planning approximately $120$127.6 million in capital expenditures for the remainder of 2021.2022. The primary purposepurposes for our capital expenditures isare to invest in manufacturing capacity expansion, to acquire Savanna, Sofia, Solana and Triage instruments, to acquire scientific equipment, to purchase or develop information technology and to implement facility improvements. We plan to fund the capital expenditures with the cash on our balance sheet.
Cash used by financing activities was $174.0$3.4 million duringfor the sixthree months ended June 30, 2021March 31, 2022 primarily related to repurchases of common stock of $103.4 million, payments of tax withholdings for vesting of stock-based awards of $35.4 million, and payment on deferred and contingent consideration of $39.9$6.8 million, partially offset by proceeds of $3.5 million from the issuance of common stock under the ESPP and pursuant to stock option exercises of $4.9 million.exercises. Cash used by financing activities was $87.0$29.6 million duringfor the sixthree months ended June 30, 2020March 31, 2021 primarily related to repurchases of common stock of $42.2 million, payment on
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deferred and contingent consideration of $48.0 million, and payments of tax withholdings for vesting of stock-based awards of $2.7$33.9 million, partially offset by proceeds from the issuance of common stock under ESPP and stock option exercises of $6.1$4.4 million.
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Seasonality
Sales of our respiratory products are subject to, and significantly affected by, the seasonal demands of the cold and flu seasons, prevalent during the fall and winter. As a result of these seasonal demands, we typically experience lower sales volume in the second and third quarters of the calendar year, and typically have higher sales in the first and fourth quarters of the calendar year. The COVID-19 pandemic and impact of sales of our COVID-19 products combined with a very mild flu season diminished the seasonal effects in the first quarter of 2022. Historically, sales of our influenza products have varied from year to year based, in large part, on the severity, length and timing of the onset of the cold and flu season.The COVID-19 pandemic combined with no flu season diminished the seasonal effects for our influenza products in the first half of 2021.
Off-Balance Sheet ArrangementsRecent Accounting Pronouncements
At June 30, 2021Information about recently adopted and December 31, 2020, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referredproposed accounting pronouncements is included in Note 1 to as structured finance or special purpose entities, which would have been established for the purposeConsolidated Financial Statements in Part I, Item 1 of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.this Quarterly Report under the heading “Recent Accounting Pronouncements” and is incorporated herein by reference.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations isare based on our consolidated financial statements,Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, management evaluates itswe evaluate our estimates, including those related to reserves for contractual rebates, goodwill and intangiblesintangible assets and income taxes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.estimates.
A comprehensive discussion of our critical accounting policies and management estimates is included in Management’s“Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations” in our Annual Report on Form 10-K for the year ended December 31, 2020.2021. There were no material changes to our critical accounting policies and estimates during the sixthree months ended June 30, 2021.March 31, 2022.
ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Under our current policies, we do not use interest rate derivative instruments to manage our exposure to changes in interest rates.
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 continually evaluate our placement of investments, our cash equivalents as of June 30, 2021March 31, 2022 consisted primarily of prime money market funds. TheThese funds provide daily liquidity and may be subject to interest rate risk and falldecrease in value if market interest rates increase. 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.
Foreign Currency Exchange Risk
We are exposed to foreign currency risks that arise from normal business operations. 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 a location’sthe functional currency.
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currency of the local jurisdiction.
DuringFor the sixthree months ended June 30, 2021,March 31, 2022, total revenues were $551.9$1,002.3 million, of which approximately $96.6$74.0 million in revenue waswere denominated in currencies other than the U.S.US dollar. We believe constant currency revenue and the related constant currency changefluctuation rate, which are non-GAAP measures, enhance the comparison of our financial performanceresults from period-to-period and to that of our competitors.competitors because they present our operating performance without the effect of exchange rate variances. Constant currency revenue excludes the impact from foreign currency fluctuations, which was favorable $4.8unfavorable by $1.0 million f foror the sixthree months ended June 30, 2021,March 31, 2022, and is calculated by (i) translating current period revenues using prior period exchange rates net ofand (ii) excluding any hedging effect recognized in the current period. ConstantThe constant currency revenue changefluctuation rate (expressed as a percentage) is calculated by determining the change in current period constant currency revenues overrevenue compared to prior period revenues.revenue.
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The major currencies to which our revenues are exposed are the Canadian Dollar, the Euro and the Chinese Yuan. A 100-basis point move in the average exchange rates (assuming a simultaneous and immediate 100 basis100-basis point change for the relevant period) would have resulted in an increase or decrease in our reported revenue for the sixthree months ended June 30, 2021March 31, 2022 as follows (in thousands):
SixThree Months Ended
 June 30,March 31,
Currency20212022
Canadian Dollar$6,004 
Chinese Yuan$2,092892 
Euro$1,7541,218 
Our foreign currency management policy permits the use of derivative instruments, such as forward contracts, to reduce volatility in our results of operations resulting from foreign exchange rate fluctuations. We do not enter into foreign currency derivative instruments for trading purposes or to engage in speculative activity. See further discussion in Note 10 to the Notes to the Consolidated Financial Statements for additional information related to such forward contracts, which information is incorporated herein by reference.
ITEM 4.    Controls and Procedures
Evaluation of disclosure controls and procedures: We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”).Act. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2021March 31, 2022 at a reasonable assurance level to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.forms of the SEC.
Changes in internal control over financial reporting: There was no change in our internal control over financial reporting during the quarter ended June 30, 2021March 31, 2022 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1.    Legal Proceedings
The information set forth in the section entitled “Litigation and Other Legal Proceedings” under Note 8 to the Notes to the Consolidated Financial Statements, included in Part I, Item I of this Quarterly Report, is incorporated herein by reference.
ITEM 1A.    Risk Factors
There has been no material change in our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.2021. For a detailed description of our risk factors, refer to Part I, Item IA, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The table below sets forth information regarding repurchases of our common stock by us during the three months ended June 30, 2021.March 31, 2022.
PeriodTotal 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)
April 4, 2021 - May 2, 20214,982 $130.01 — $156,313,465 
May 3, 2021 - May 30, 20214,233 120.26 — 156,313,465 
May 31, 2021 - July 4, 2021959,875 108.08 957,239 52,894,442 
Total969,090 $108.25 957,239 $52,894,442 
PeriodTotal 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)
January 3, 2022 - January 30, 202228,723 $114.99 — $52,894,442 
January 31, 2022 - February 27, 202225,412 99.58 — 52,894,442 
February 28, 2022 - April 3, 20229,016 109.26 — 52,894,442 
Total63,151 $107.97 — $52,894,442 
(1) Includes shares surrendered, if any, to the Company to satisfy the payment of minimum tax withholding obligations.
(2) On December 18, 2018, the Company announced a stock repurchase program to repurchase up to $50.0 million of the Company’s shares of common stock, which was authorized by the Board of Directors (the “Board”) on December 12, 2018. On August 28, 2020, the Board authorized an increase of an additional $150.0 million to the Company’s existing stock repurchase program authorization, which was announced on September 1, 2020. The Board also extended the stock repurchase authorizationprogram through August 28, 2022. During the three months ended June 30, 2021, the Company repurchased 957,239 shares of outstanding common stock under this program for approximately $103.4 million.
ITEM 3.    Defaults Upon Senior Securities
None.
ITEM 4.    Mine Safety Disclosures
Not applicable.
ITEM 5.    Other Information
None.
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ITEM 6.    Exhibits
3.1
3.2
3.3
4.1
10.110.1(1)
10.210.2(1)
10.3(1)
10.4(1)
10.5(1)
10.6(1)
31.1*
31.2*
32.1**
101
The following financial statements from the Company'sRegistrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021,March 31, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104
The cover page from the Company'sRegistrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021,March 31, 2022, formatted in Inline XBRL (included as Exhibit 101).

_________________________
(1)Indicates a management plan or compensatory plan or arrangement.
*    Filed herewith.
**    Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Date: August 5, 2021May 4, 2022QUIDEL CORPORATION
/s/ DOUGLAS C. BRYANT
Douglas C. Bryant
President and Chief Executive Officer
(Principal Executive Officer)
/s/ RANDALL J. STEWARD
Randall J. Steward
Chief Financial Officer
(Principal Financial Officer)

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Exhibit Index
 
Exhibit
Number
3.1
3.2
3.3
4.1
10.110.1(1)
10.2(1)
10.210.3(1)
10.4(1)
10.5(1)
10.6(1)
31.1*
31.2*
32.1**
101
The following financial statements from the Company'sRegistrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021,March 31, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104The cover page from the Company'sRegistrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021,March 31, 2022, formatted in Inline XBRL (included as Exhibit 101).
___________________________
(1)Indicates a management plan or compensatory plan or arrangement.
*    Filed herewith.
**    Furnished herewith.




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