Quidel Corporation ( QDEL) Q4 2011 Earnings Call February 29, 2012 5:00 pm ET Executives Randy Steward - CFO Doug Bryant - President and CEO Analysts Steven Crowley - Craig-Hallum Tycho Peterson - JPMorgan Zarak Khurshid - Wedbush Securities Ashim Anand - Natixis Scott Gleason - Stephens Jeff Frelick - Canaccord Genuity Ross Taylor - C.L. King Presentation Operator
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For today's call, I will report the financial results and Doug will provide a company update on the more recent developments. We will then open the call for your questions.For the fourth quarter of 2011, total revenues were $38.4 million compared to $31.7 million in the fourth quarter of 2010, an increase of 21%. The infectious disease product category comprised a majority of the revenue increase, growing 28% versus last year along with 8% growth from our women's health category. Inventories at distribution remained at low levels, indicating that revenues in Q4 were reflective of that in user demand. Global sales of infectious disease products totaled $27.3 million in the fourth quarter of 2011 compared to sales of $21.4 million in the fourth quarter of 2010. Strong sales from our influenza product line of which sales $9.7 million for the quarter drove the increase along with continued growth from our Strep A, RSV and herpes product lines. In the fourth quarter of 2011, Strep A and RSV each grew 8% over the fourth quarter of 2010. Revenues for the women's health category increased by 8% in the quarter to $8.2 million due to the timing of orders in our autoimmune and bone health business and an 18% growth from Thyretain, our Graves' disease product. Our gastrointestinal product category revenues were $1.7 million, equal to the fourth quarter of 2010. Gross margins in the fourth of 2011 expanded nearly 400 basis points to 60% from 56% in the fourth quarter of 2010, largely due to improved product mix, manufacturing efficiencies gained at our Athens, Ohio, facility and continued cost reduction activities, the latter two of which we consider to be permanent. Included in cost of sales for the quarter were $2.2 million of intangible amortization related to the Alere lateral flow royalty buyout discussed last quarter.
Operating expenses were $21 million in the fourth quarter of 2011 compared to $18.5 million for the fourth quarter of the prior year. Research and development costs in the fourth quarter of 2011 were $6.8 million compared to $5.6 million in the fourth quarter of 2010. Attributing to this R&D increase was a $1.1 million impairment charge related to a discontinued product and $500,000 related to a discontinued research and development project.Sales and marketing costs increased to $6.8 million in the fourth quarter of 2011 from $5.9 million in the fourth quarter of the previous year due to an increase in sales commissions associated with the increased sales in 2011. General and administrative expenses in Q4 of 2011 increased to $5.7 million from $4.9 million in the fourth quarter of last year. This is primarily related to an increase in employee incentive compensation in 2011 versus 2010. Stock-based compensation expense was $2.3 million in the fourth quarter versus $1.3 million for the comparable period in 2010. In the fourth quarter, we've recorded in the other expense line item $400,000 primarily associated with a facility shutdown in Ohio. In total, all of the aforementioned one-time items had a negative impact of approximately $0.04 per share. Our tax rate for the fourth quarter of 2011 was 30.1% and for the full year our effective tax rate was 33.5%. This compares to a tax rate of 35.3% for the full year of 2010. Net income in the fourth quarter of 2011 was $1 million or $0.03 per diluted share compared to net loss of $400,000 or $0.02 per share for the fourth quarter of 2010. On a non-GAAP basis excluding non-recurring items, amortization of intangibles and stock compensation expense, net income for the fourth quarter of 2011 was $4.9 million or $0.15 per diluted share. This compares to net income of $1.5 million or $0.05 per diluted share for the same period in 2010. Read the rest of this transcript for free on seekingalpha.com