Qiagen N.v. · NYSE:QGEN
Qiagen — Q1 2023 Earnings Presentation
45 slides from Qiagen's earnings presentation, May 4, 2023
Slide 1: Form 6-K Report of Foreign Private Issuer
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM 6-K __________________________________ REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 20
Slide 2: Form 6-K Table of Contents
QIAGEN N.V. Form 6-K Table of Contents Item Page Other Information 3 Signatures 4 Exhibit Index 5 2
Slide 3: Other Information
Other Information For the three months ended March 31, 2023, QIAGEN N.V. prepared its quarterly report under United States generally accepted accounting principles (U.S. GAAP). This quarterly report is furnished herewith as Exhibit 99.1 and incorporated by reference herein. 3
Slide 4: Signatures
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. QIAGEN N.V. BY: /s/ Roland Sackers Roland Sackers Chief Financial Officer Date: May 4, 2023 4
Slide 5: Exhibit Index
Exhibit Index Exhibit Exhibit No. 99.1 U.S. GAAP Quarterly Report for the Period Ended March 31, 2023 5
Slide 6: Exhibit 99.1 U.S. GAAP Quarterly Report
Exhibit 99.1 QIAGEN N.V. and Subsidiaries U.S. GAAP Quarterly Report for the Period Ended March 31, 2023 Table of Contents Financial Information Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 2 Condensed Consol
Slide 7: Condensed Consolidated Balance Sheets (Assets)
Condensed Consolidated Financial Statements QIAGEN N.V. and Subsidiaries Condensed Consolidated Balance Sheets March 31, December 31, (in thousands) Notes 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents $359,180 $730,669 Short-term investments 928,161 687,597 Accounts receivab
Slide 8: Condensed Consolidated Balance Sheets (Liabilities and Equity)
QIAGEN N.V. and Subsidiaries Condensed Consolidated Balance Sheets March 31, December 31, (in thousands, except par value) Notes 2023 2022 (unaudited) Liabilities and equity Current liabilities: Current portion of long-term debt (8) $393,243 $389,552 Accrued and other current liabilities (4, 9, 10)
Slide 9: Condensed Consolidated Statements of Income
QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Three months ended March 31, (in thousands, except per share data) Notes 2023 2022 Net sales (4) $485,398 $628,391 Cost of sales: Cost of sales 161,906 198,118 Acquisition-related intangible amortization 16,016 15,3
Slide 10: Condensed Consolidated Statements of Comprehensive Income
QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three months ended March 31, (in thousands) Notes 2023 2022 Net income $85,035 $155,312 Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods: Losses on cash flow
Slide 11: Condensed Consolidated Statements of Changes in Equity
QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Changes in Equity (Unaudited) Accumulated Other Additional Retained Comprehensive (in thousands) Notes Common Shares Paid-In Capital Earnings Loss Treasury Shares Total Equity Shares Amount Shares Amount Balance at December 31, 2022 2
Slide 12: Condensed Consolidated Statements of Cash Flows
QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, (in thousands) Notes 2023 2022 Cash flows from operating activities: Net income $85,035 $155,312 Adjustments to reconcile net income to net cash provided by operating activities, net
Slide 13: Condensed Consolidated Statements of Cash Flows (continued)
QIAGEN N.V. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, (in thousands) Notes 2023 2022 Cash flows from financing activities: Proceeds from issuance of common shares 75 29 Tax withholding related to vesting of stock awards (12) — (7,702) C
Slide 14: Notes: Corporate Information
Notes to the Condensed Consolidated Financial Statements (unaudited) March 31, 2023 1. Corporate Information QIAGEN N.V. (QIAGEN) is a public limited liability company (naamloze vennootschap) under Dutch law with registered office at Hulsterweg 82, 5912 PL Venlo, The Netherlands. QIAGEN N.V., a Neth
Slide 15: Notes: Basis of Preparation and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and e
Slide 16: 3. Acquisitions
3. Acquisitions Business Combinations and Asset Acquisitions For acquisitions which have been accounted for as business combinations, the acquired companies’ results have been included in the accompanying consolidated statements of income from their respective dates of acquisition. Our acquisitions
Slide 17: 4. Revenue
4. Revenue Contract Estimates The majority of our revenue is derived from contracts (i) with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount in which we have the right to invoice as product is delivered. We have elected, as a practical
Slide 18: Revenue Disaggregation and 5. Inventories
Three Months Ended March 31, (in thousands) 2023 2022 Consumables and related revenues $231,224 $326,265 Instruments 19,104 30,250 Total Molecular Diagnostics $250,328 $356,515 Consumables and related revenues $199,411 $234,694 Instruments 35,659 37,182 Total Life Sciences $235,070 $271,876 Total $4
Slide 19: 6. Intangible Assets
6. Intangible Assets The following table sets forth the intangible assets by major asset class as of March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Gross Carrying Accumulated Gross Carrying Accumulated (in thousands) Amount Amortization Amount Amortization Amortized Intangibl
Slide 20: 7. Investments
For the three-month period ended March 31, 2023, amortization expense on intangible assets increased to $23.3 million as compared to amortization expense of $23.1 million in the same period of 2022. Amortization of intangibles for the next five years is expected to be approximately: Annual Amortizat
Slide 21: 8. Debt
The changes in non-marketable investments not accounted for under the equity method during the three months ended March 31, 2023 and 2022 are as follows: (in thousands) 2023 2022 Balance at beginning of year $5,329 $3,945 Cash investments in equity securities, net 223 (104) Shares received in exchan
Slide 22: Convertible Notes Carrying Amounts and Interest Expense
As of December 31, 2022 Unamortized debt Fair Value discount and (in thousands) Principal Amount issuance costs Carrying Amount Amount Leveling Cash Convertible Notes due 2023 $400,000 ($10,448) $389,552 $493,436 Level 1 Cash Convertible Notes due 2024 500,000 (35,669) 464,331 596,485 Level 1 Conver
Slide 23: Convertible Note Conversion Terms
• in case of early redemption in respect of the outstanding notes at our option, where the conversion date falls in the period from (and including) the date on which the call notice is published to (and including) the 45th business day prior to the redemption date; or • if we experience certain cust
Slide 24: Cash Convertible Notes Conversion Conditions
• if we experience certain customary events of default, including defaults under certain other indebtedness until such event has been cured or waived or the payment of the Cash Convertible Notes have been accelerated. For the 2023 Notes, the Contingent Conversion Period expired on March 13, 2023 and
Slide 25: Call Options and Warrants
Aside from the initial payment of a premium, we will not be required to make any cash payments under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which the market price per common share exceeds the exercise price of the Call Options during the
Slide 26: Schuldschein Tranches and Revolving Credit Facility
A summary of the tranches issued is as follows: Carrying Value (in thousands) as of March 31, December 31, Currency Notional Amount Interest Rate Maturity 2023 2022 EUR €51.5 million Floating 6M EURIBOR + 0.55% July 2025 $55,891 $54,803 EUR €62.0 million Fixed 2.741% July 2027 67,271 65,967 EUR €29.
Slide 27: 9. Derivatives and Hedging: Net Investment Hedge
portion of our Euro net investments in our foreign operations. As further described in Note 8 "Debt", four tranches of the 2017 Schuldschein matured and were paid in October 2022 and two tranches of the 2017 Schuldschein matured and were paid during 2021. As a result, €109.5 million remained designa
Slide 28: Cash Convertible Notes Embedded Cash Conversion Option
Cash Convertible Notes Embedded Cash Conversion Option The embedded cash conversion option within the Cash Convertible Notes discussed in Note 8 "Debt" is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value repor
Slide 29: Gains and Losses on Derivative Instruments
As of March 31, 2023 As of December 31, 2022 (in thousands) Current Liability Long-Term Liability Current Liability Long-Term Liability Liabilities: Derivative instruments designated as hedges Interest rate contracts - cash flow hedge (1) $— ($35,818) $— ($36,982) Total derivative instruments design
Slide 30: 10. Financial Instruments and Fair Value Measurements
10. Financial Instruments and Fair Value Measurements Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: • Level 1. Observable inputs, such as quoted prices in active markets; • Level
Slide 31: Fair Value of Financial Instruments
The carrying values of financial instruments, including accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities. In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market pri
Slide 32: 11. Income Taxes 12. Share-Based Compensation
11. Income Taxes The quarterly provision for income taxes is based upon the estimated annual effective tax rate for the year, applied to the current period ordinary income before tax plus the tax effect of any discrete items. Our operating subsidiaries are exposed to statutory tax rates ranging from
Slide 33: 13. Equity
Share-Based Compensation Expense For the three-month periods ended March 31, 2023 and 2022, share-based compensation expense was as follows: Three months ended March 31, (in thousands) 2023 2022 Cost of sales $867 $743 Research and development 2,006 1,273 Sales and marketing 3,811 3,873 General and
Slide 34: 14. Earnings per Common Share 15. Commitments and Contingencies
14. Earnings per Common Share We present basic and diluted earnings per common share. Basic earnings per common share is calculated by dividing the net income by the weighted average number of common shares outstanding. Diluted earnings per common share reflect the potential dilution of earnings tha
Slide 35: Litigation
Litigation From time to time, we may be party to legal proceedings incidental to our business. As of March 31, 2023, certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were pending against QIAGEN or our subsidiaries. These matters have arisen i
Slide 36: Operating and Financial Review and Prospects
Operating and Financial Review and Prospects This section contains a number of forward-looking statements. These statements are based on current management expectations, and actual results may differ materially. Among the factors that could cause actual results to differ from management’s expectatio
Slide 37: Net Sales
Three-Month Period Ended March 31, 2023 compared to Three-Month Period Ended March 31, 2022 Net Sales In the tables presented below, results may not sum and percentages may not recalculate due to rounding. First quarter (in millions) 2023 2022 Product type Net sales Net sales % change Consumables an
Slide 38: Gross Profit
outside of COVID-19 testing, while overall NeuMoDx sales declined against COVID-19 headwinds. Sales of diagnostic solutions were adversely impacted by three percentage points from unfavorable currency movements against the U.S. dollar in the first quarter of 2023. PCR / Nucleic acid amplification in
Slide 39: Sales and Marketing, Research and Development, General and Administrative
Sales and Marketing First quarter (in millions) 2023 2022 % change Sales and marketing $114.6 $118.5 -3% % of net sales 23.6 % 18.9 % Sales and marketing expenses decreased by 3% during the three months ended March 31, 2023 compared to the prior year period. The overall decrease in sales and marketi
Slide 40: Acquisition-Related Intangible Amortization, Restructuring and Other Items
Acquisition-Related Intangible Amortization First quarter (in millions) 2023 2022 % change Acquisition-related intangible amortization $2.7 $2.9 -9% % of net sales 0.5 % 0.5 % Amortization expenses related to acquisition-related intangibles decreased by 9% during the three months ended March 31, 202
Slide 41: Provision for Income Taxes
Provision for Income Taxes First quarter (in millions) 2023 2022 % change Income before income taxes $108.8 $195.5 -44% Income tax expense $23.8 $40.2 -41% Net income $85.0 $155.3 Effective tax rate 21.8 % 20.6 % Our effective tax rate differs from the Netherlands statutory tax rate of 25.8% due in
Slide 42: Operating, Investing and Financing Activities
Operating Activities For the three months ended March 31, 2023 and March 31, 2022, we generated net cash from operating activities of $71.9 million and $207.4 million, respectively. The decrease in net cash provided by operating activities is primarily the result of lower net income adjustments and
Slide 43: Quantitative and Qualitative Disclosures about Market Risk
with interest periods of one, three or six months. The interest rate is linked to our ESG performance. We have additional credit lines totaling €27.0 million with no expiration date, none of which were utilized as of March 31, 2023. In connection with certain acquisitions, we could be required to ma
Slide 44: Interest Rate Risk and Critical Accounting Policies
Interest Rate Risk We are exposed to interest rate risk on our short-term investments and our debt. This exposure is managed in the aggregate with a focus on immediate and intermediate liquidity needs. Interest income earned on our cash investments is affected by changes in the relative levels of ma
Slide 45: Legal Proceedings and Risk Factors
Legal Proceedings For information on legal proceedings, see Note 15 "Commitments and Contingencies" to the accompanying condensed consolidated financial statements. While no assurances can be given regarding the outcome of the proceedings described in Note 15, based on information currently availabl