QuidelOrtho Corp

Previous wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. These statements are any statement contained herein that is not strictly historical, including, but not limited to, certain statements under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding our commercial, integration and other strategic goals, industry prospects, our expected results of operations or financial position, and future plans, objectives, strategies, expectations and intentions. Without limiting the foregoing, the words “may,” “will,” “would,” “should,” “might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” “continue” or similar words, expressions or the negative of such terms or other comparable terminology are intended to identify forward-looking statements. Such statements are based on the beliefs and expectations of our management as of the date of this Quarterly Report and are subject to significant known and unknown risks and uncertainties. Actual results or outcomes may differ significantly from those set forth or implied in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth or implied in the forward-looking statements: supply chain, production, logistics, distribution and labor disruptions and challenges; the challenges and costs of integrating, restructuring and achieving anticipated synergies as a result of the Combinations; and other macroeconomic, geopolitical, market, business, competitive and/or regulatory factors affecting our business generally, including those discussed under Part II, Item 1A, “Risk Factors” of this Quarterly Report and Part I, Item 1A, “Risk Factors” of our Annual Report. Investors should not rely on forward-looking statements as predictions of future events because these statements are based on assumptions that may not come true and are speculative by their nature. All forward-looking statements are based on information currently available to us and speak only as of the date of this Quarterly Report. We undertake no obligation to update any of the forward-looking information or time-sensitive information included in this Quarterly Report, whether as a result of new information, future events, changed expectations or otherwise, except as required by law.

Current wording

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. These statements are any statement contained herein that is not strictly historical, including, but not limited to, certain statements under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding our commercial, integration and other strategic goals, our cost-savings initiatives, industry prospects, our expected results of operations or financial position, and future plans, objectives, strategies, expectations and intentions. Without limiting the foregoing, the words “may,” “will,” “would,” “should,” “might,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” “continue” or similar words, expressions or the negative of such terms or other comparable terminology are intended to identify forward-looking statements. Such statements are based on the beliefs and expectations of our management as of the date of this Quarterly Report and are subject to significant known and unknown risks and uncertainties. Actual results or outcomes may differ significantly from those set forth or implied in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth or implied in the forward-looking statements: supply chain, production, logistics, distribution and labor disruptions and challenges; the challenges and costs of integrating, restructuring and achieving anticipated synergies as a result of the Combinations; and other macroeconomic, geopolitical, market, business, competitive and/or regulatory factors affecting our business generally, including those discussed under Part II, Item 1A, “Risk Factors” of this Quarterly Report and Part I, Item 1A, “Risk Factors” of our Annual Report. Investors should not rely on forward-looking statements as predictions of future events because these statements are based on assumptions that may not come true and are speculative by their nature. All forward-looking statements are based on information currently available to us and speak only as of the date of this Quarterly Report. We undertake no obligation to update any of the forward-looking information or time-sensitive information included in this Quarterly Report, whether as a result of new information, future events, changed expectations or otherwise, except as required by law.

Previous wording

For the three months ended March 31, 2024, Total revenues decreased by 16% to $711.0 million as compared to the same period in the prior year, primarily driven by variability of our U.S. respiratory products. Currency exchange rates had an unfavorable impact of 100 basis points on our growth rate. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products. For the three months ended March 31, 2024 and April 2, 2023, revenues related to our respiratory products accounted for approximately 19% and 31% of our Total revenues, respectively.

Current wording

For the six months ended June 30, 2024, Total revenues decreased by 11% to $1,348.0 million as compared to the same period in the prior year, primarily driven by variability of our U.S. respiratory products. Currency exchange rates had an unfavorable impact of 100 basis points on our growth rate. Our revenues can be highly concentrated over a small number of products, including certain of our respiratory products. For the six months ended June 30, 2024 and July 2, 2023, revenues related to our respiratory products accounted for approximately 14% and 23% of our Total revenues, respectively.

Previous wording

In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio. Specifically, we plan to wind-down only the VIP platform and microplate assays, which are only sold in the U.S., and have a lower growth and margin profile than other parts of our Transfusion Medicine business. This wind-down will not affect any donor screening portfolio outside of the U.S. While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments.

Current wording

In February 2024, we initiated a wind-down plan to transition out of the U.S. donor screening portfolio. Specifically, we plan to wind-down only the ORTHO VERSEIA® Integrated Processor platform and microplate assays, which are only sold in the U.S., and have a lower growth and margin profile than other parts of our Transfusion Medicine business. This wind-down will not affect any donor screening portfolio outside of the U.S. While our goal is to wind-down this U.S. donor screening portfolio, we will continue to support our existing customers and honor our contractual commitments.

Previous wording

Because our business environment is highly competitive, our long-term growth and profitability will depend in part on our ability to retain and grow our current customers and attract new customers through developing and delivering new and improved products and services that meet our customers’ needs and expectations, including with respect to product performance, product offerings, cost, automation and other work-flow efficiencies. As a result, we expect to continue to maintain our emphasis on R&D investments for longer term growth, including for our next generation platforms and assays, as well as additional assays to be launched on our current platforms. In addition, we expect to continue to evaluate strategic opportunities to expand our product lines and services, production capabilities, technologies and geographic footprint and address other business challenges and opportunities.

Current wording

Because our business environment is highly competitive, our long-term growth and profitability will depend in part on our ability to retain and grow our current customers and attract new customers through developing and delivering new and improved products and services that meet our customers’ needs and expectations, including with respect to product performance, product offerings, cost, automation and other work-flow efficiencies. As a result, we expect to continue to maintain our emphasis on R&D investments for longer term growth, including for our next generation platforms and assays, as well as additional assays to be launched on our current platforms. In addition, we expect to continue to evaluate strategic opportunities to (i) expand our product lines and services, production capabilities, technologies and geographic footprint and address other business challenges and opportunities, and (ii) rationalize and consolidate facilities with the goal to improve our long term results.

Previous wording

The following table compares Total revenues by business unit for the three months ended March 31, 2024 and April 2, 2023:

Current wording

The following table compares Total revenues by business unit for the three and six months ended June 30, 2024 and July 2, 2023:

Previous wording

For the three months ended March 31, 2024, Total revenues decreased to $711.0 million from $846.1 million for the same period in the prior year. Labs revenue decreased by $13.8 million, primarily due to a $20.7 million settlement award from a third party related to one of our collaboration agreements in the prior year period. The Point of Care business unit contributed to revenue decline, driven by a decrease of $156.4 million in sales of QuickVue SARS Antigen assays primarily due to a COVID-19 government award in the prior year period, partially offset by an increase of $35.2 million in sales of Sofia SARS Antigen assays. Molecular Diagnostics sales decreased by $4.2 million, driven primarily by lower demand. Currency exchange rates had an unfavorable impact of approximately 100 basis points on the growth rate for the three months ended March 31, 2024.

Current wording

For the six months ended June 30, 2024, Total revenues decreased to $1,348.0 million from $1,511.2 million for the same period in the prior year. Labs revenue decreased by $21.0 million, primarily due to a $19.2 million settlement award from a third party related to one of our collaboration agreements in the prior year period. The Point of Care business unit contributed to revenue decline, driven by a decrease of $184.6 million in sales of QuickVue SARS Antigen assays primarily due to a COVID-19 government award in the prior year period, partially offset by an increase of $36.9 million in sales of Sofia SARS Antigen assays. Molecular Diagnostics sales decreased by $6.0 million, driven primarily by lower demand. Currency exchange rates had an unfavorable impact of approximately 100 basis points on our growth rate for the six months ended June 30, 2024.

Previous wording

Cost of sales, excluding amortization of intangible assets, decreased to $378.9 million, or 53.3% of Total revenues, for the three months ended March 31, 2024, compared to $397.5 million, or 47.0% of Total revenues, for the three months ended April 2, 2023. The decrease in cost of sales, excluding amortization of intangible assets, was driven primarily by a prior year period COVID-19 government award, along with the corresponding inventory release of $39 million, partially offset by an increase in sales of Sofia SARS Antigen assays.

Current wording

Cost of sales, excluding amortization of intangible assets, decreased to $739.9 million, or 54.9% of Total revenues, for the six months ended June 30, 2024, compared to $766.1 million, or 50.7% of Total revenues, for the six months ended July 2, 2023. The decrease in cost of sales, excluding amortization of intangible assets, was driven primarily by a prior year period COVID-19 government award, along with the corresponding inventory release of $39 million, partially offset by an increase in sales of Sofia SARS Antigen assays.

Previous wording

The following table summarizes operating expenses for the three months ended March 31, 2024 and April 2, 2023:

Current wording

The following table summarizes operating expenses for the three and six months ended June 30, 2024 and July 2, 2023:

Previous wording

Selling, marketing and administrative expenses for the three months ended March 31, 2024 increased by $2.3 million, or 1.1%, to $204.7 million from $202.4 million for the same period in the prior year.

Current wording

Selling, marketing and administrative expenses for the three months ended June 30, 2024 increased by $9.1 million, or 5.1%, to $188.2 million from $179.1 million for the same period in the prior year, primarily due to employee compensation costs.

Previous wording

Research and development expense for the three months ended March 31, 2024 decreased by $3.1 million, or 5.0%, to $59.2 million from $62.3 million for the same period in the prior year.

Current wording

Research and development expense for the three months ended June 30, 2024 decreased by $6.1 million, or 9.8%, to $56.3 million from $62.4 million for the same period in the prior year, primarily due to lower compensation costs and outside services.

Previous wording

Acquisition and integration costs were $22.6 million and $29.7 million for the three months ended March 31, 2024 and April 2, 2023, respectively. The decrease in costs in the three months ended March 31, 2024 compared to the prior year period was primarily due to decreases in consulting costs and compensation related charges.

Current wording

Integration related costs were $30.9 million and $53.5 million for the three and six months ended June 30, 2024, respectively, and $24.2 million and $53.9 million for the three and six months ended July 2, 2023, respectively. The increase in costs for the three months ended June 30, 2024 compared to the prior year period was primarily due to increases in compensation related charges, partially offset by decreases in consulting costs.

Previous wording

During the three months ended March 31, 2024, we identified a triggering event requiring an interim goodwill impairment assessment for our reporting units. As a result, we recognized a non-cash goodwill impairment charge of $1.7 billion for the North America reporting unit. Refer to Item 1, "Financial Statements—Note 7. Goodwill and Intangible Assets, Net” for more information.

Current wording

During the six months ended June 30, 2024, we identified a triggering event requiring an interim goodwill impairment assessment for our reporting units. As a result, we recognized a non-cash goodwill impairment charge of $1.7 billion for the North America reporting unit. Refer to Item 1, “Financial Statements—Note 8. Goodwill and Intangible Assets, Net” for more information.

Previous wording

Other operating expenses were $8.0 million and $3.8 million for the three months ended March 31, 2024 and April 2, 2023, respectively. Other operating expenses were primarily related to the profit share expense for our Joint Business with Grifols.

Current wording

Other operating expenses were $9.3 million and $17.3 million for the three and six months ended June 30, 2024, respectively, and $5.8 million and $9.6 million for the three and six months ended July 2, 2023, respectively. Other operating expenses were primarily related to the profit share expense for our Joint Business with Grifols.

Previous wording

Interest expense, net was $39.0 million and $36.7 million for the three months ended March 31, 2024 and April 2, 2023, respectively. See Item 1, "Financial Statements—Note 8. Borrowings” for more information.

Current wording

Interest expense, net was $41.0 million and $80.0 million for the three and six months ended June 30, 2024, respectively, and $36.5 million and $73.2 million for the three and six months ended July 2, 2023, respectively. Refer to Item 1, “Financial Statements—Note 9. Borrowings” for more information.

Previous wording

For the three months ended March 31, 2024, we recognized an income tax benefit of $92.9 million in relation to loss before income taxes of $1,798.9 million, resulting in an effective benefit tax rate of 5.2%. For the three months ended April 2, 2023, we recognized a provision for income taxes of $11.2 million in relation to income before income taxes of $60.0 million, resulting in an effective tax rate of 18.7%. For the three months ended March 31, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to goodwill impairment charges that are nondeductible for tax purposes. For the three months ended April 2, 2023, the effective tax rate was impacted by income tax benefits related to non-U.S. earnings being taxed at rates that are different than the U.S. statutory rate, R&D credits, foreign tax credits, and foreign exchange losses, partially offset by income taxes owed in certain U.S. states and Global Intangible Low-Tax Income.

Current wording

For the three months ended June 30, 2024, we recognized an income tax benefit of $15.2 million in relation to loss before income taxes of $162.9 million, resulting in an effective tax rate of 9.3%. For the three months ended July 2, 2023, we recognized an income tax benefit of $11.2 million in relation to loss before income taxes of $64.4 million, resulting in an effective benefit tax rate of 17.4%. For the three months ended June 30, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to Subpart F income and the Base Erosion and Anti-Abuse Tax liability. For the three months ended July 2, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to non-U.S. earnings being taxed at rates that are different than the U.S. statutory rate, operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances, R&D credits and foreign tax credits, partially offset by foreign exchange losses and Global Intangible Low-Tax Income.

Previous wording

•Adjusted EBITDA — Adjusted EBITDA by reportable segment is used by our management to measure and evaluate the internal operating performance of our reportable segments. It is also the basis for calculating certain management incentive compensation programs. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business, including at the segment level, consistently across the periods presented and to evaluate performance under management incentive compensation programs. Adjusted EBITDA consists of Net (loss) income before Interest expense, net, (Benefit from) provision for income taxes and depreciation and amortization and eliminates (i) certain non-operating income or expense items, and (ii) impacts of certain non-cash, unusual or other items that are included in Net (loss) income and that we do not consider indicative of our ongoing operating performance. See Item 1, "Financial Statements—Note 4. Segment and Geographic Information” for a reconciliation of Adjusted EBITDA by reportable segment to (Loss) income before income taxes.

Current wording

•Adjusted EBITDA — Adjusted EBITDA by reportable segment is used by our management to measure and evaluate the internal operating performance of our reportable segments. It is also the basis for calculating certain management incentive compensation programs. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business, including at the segment level, consistently across the periods presented and to evaluate performance under management incentive compensation programs. Adjusted EBITDA consists of Net loss before Interest expense, net, Benefit from income taxes and depreciation and amortization and eliminates (i) certain non-operating income or expense items, and (ii) impacts of certain non-cash, unusual or other items that are included in Net loss and that we do not consider indicative of our ongoing operating performance. Refer to Item 1, “Financial Statements—Note 4. Segment and Geographic Information” for a reconciliation of Adjusted EBITDA by reportable segment to Loss before income taxes.

Previous wording

Total revenues were $433.9 million for the three months ended March 31, 2024, compared to $582.8 million for the three months ended April 2, 2023. The decrease was primarily driven by a COVID-19 government award in the prior year period, partially offset by an increase in revenues for Sofia SARS Antigen assays.

Current wording

Total revenues were $784.0 million for the six months ended June 30, 2024, compared to $961.6 million for the six months ended July 2, 2023. The decrease was primarily driven by a COVID-19 government award in the prior year period, partially offset by an increase in revenues for Sofia SARS Antigen assays.

Previous wording

Adjusted EBITDA was $218.8 million for the three months ended March 31, 2024, compared to $278.4 million for the three months ended April 2, 2023. The decrease was primarily driven by a prior year period COVID-19 government award, along with the corresponding inventory release of $39 million, partially offset by an increase in revenues for Sofia SARS Antigen assays.

Current wording

Adjusted EBITDA was $392.7 million for the six months ended June 30, 2024, compared to $454.7 million for the six months ended July 2, 2023. The decrease was primarily driven by a prior year period COVID-19 government award, along with the corresponding inventory release of $39 million, partially offset by an increase in revenues for Sofia SARS Antigen assays.

Previous wording

Total revenues were $84.8 million for the three months ended March 31, 2024, compared to $81.3 million for the three months ended April 2, 2023, primarily driven by an increase in Labs and Transfusion Medicine revenues.

Current wording

Total revenues were $165.9 million for the six months ended June 30, 2024, compared to $161.9 million for the six months ended July 2, 2023, primarily driven by an increase in Labs and Transfusion Medicine revenues.

Previous wording

Adjusted EBITDA was $12.8 million for the three months ended March 31, 2024, compared to $7.2 million for the three months ended April 2, 2023, primarily driven by an increase in Labs and Transfusion Medicine revenues.

Current wording

Adjusted EBITDA was $24.2 million for the six months ended June 30, 2024, compared to $12.5 million for the six months ended July 2, 2023, primarily driven by an increase in Labs and Transfusion Medicine revenues and product mix.

Previous wording

Adjusted EBITDA was $24.7 million for the three months ended March 31, 2024, compared to $28.5 million for the three months ended April 2, 2023. The decrease was primarily driven by the impact from changes in product mix.

Current wording

Adjusted EBITDA was $35.8 million for the three months ended June 30, 2024, compared to $30.2 million for the three months ended July 2, 2023. The increase was primarily driven by higher Labs revenues and the impact from changes in product mix.

Previous wording

Adjusted EBITDA was $32.0 million for the three months ended March 31, 2024, compared to $21.8 million for the three months ended April 2, 2023, primarily driven by an increase in Labs revenues and product mix.

Current wording

Adjusted EBITDA was $66.1 million for the six months ended June 30, 2024, compared to $58.1 million for the six months ended July 2, 2023, primarily driven by an increase in Labs revenues and product mix.

Previous wording

As of March 31, 2024, we had $78.5 million in Cash and cash equivalents, a $40.4 million decrease from December 31, 2023. Our cash requirements fluctuate as a result of numerous factors, including cash generated from operations, progress in R&D, capital expansion projects and acquisition and business development activities. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.

Current wording

As of June 30, 2024, we had $107.0 million in Cash and cash equivalents, a $11.9 million decrease from December 31, 2023. Our cash requirements fluctuate as a result of numerous factors, including cash generated from operations, progress in R&D, capital expansion projects and acquisition and business development activities. We believe our organizational structure allows us the necessary flexibility to move funds throughout our subsidiaries to meet our operational working capital needs.

Previous wording

Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $13.0 million and $40.0 million borrowings outstanding, was $747.0 million as of March 31, 2024.

Current wording

Our Credit Agreement consists of a $2,750.0 million Term Loan and an $800.0 million Revolving Credit Facility. Availability under the Revolving Credit Facility, after deducting letters of credit of $13.0 million and $253.0 million borrowings outstanding, was $534.0 million as of June 30, 2024.

Previous wording

On April 25, 2024, we entered into the Amendment, by and among us, the lenders party thereto, and Bank of America, N.A., as administrative agent, which amends the Credit Agreement. The Amendment sets a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) for the applicable measurement period as of the last day of each fiscal quarter of (a) 4.50 to 1.00 on or prior to June 30, 2023, (b) 4.00 to 1.00 after June 30, 2023 and on or prior to June 30, 2024, (c) 4.25 to 1.00 after June 30, 2024 and on or prior to December 31, 2024, (d) 4.00 to 1.00 after December 31, 2024 and on or prior to June 30, 2025 and (e) 3.75 to 1.00 each fiscal quarter after June 30, 2025. The Credit Agreement contains a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters. We were in compliance with the financial covenants as of March 31, 2024.

Current wording

On April 25, 2024, we entered into the Amendment, by and among us, the lenders party thereto, and Bank of America, N.A., as administrative agent, which amended the Credit Agreement. The Amendment sets a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) for the applicable measurement period as of the last day of each fiscal quarter of (a) 4.50 to 1.00 on or prior to June 30, 2023, (b) 4.00 to 1.00 after June 30, 2023 and on or prior to June 30, 2024, (c) 4.25 to 1.00 after June 30, 2024 and on or prior to December 31, 2024, (d) 4.00 to 1.00 after December 31, 2024 and on or prior to June 30, 2025 and (e) 3.75 to 1.00 each fiscal quarter after June 30, 2025. The Credit Agreement contains a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters. We were in compliance with the financial covenants as of June 30, 2024.

Previous wording

Capital expenditures, including investments, were $66.1 million for the three months ended March 31, 2024. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities and other facility-related activities.

Current wording

Capital expenditures, including investments, were $101.4 million for the six months ended June 30, 2024. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities and other facility-related activities.

Previous wording

Cash used for operating activities was $0.7 million for the three months ended March 31, 2024, and reflected a net loss of $1,706.0 million and non-cash adjustments of $1,791.6 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities as well as depreciation, amortization and stock-based compensation expense. In addition, we benefited from collections on accounts receivables, which contributed cash inflows of $26.4 million, offset by other changes in working capital, including $37.7 million cash outflows for inventories.

Current wording

Cash used for operating activities was $98.6 million for the six months ended June 30, 2024, and reflected a net loss of $1,853.7 million and non-cash adjustments of $1,971.1 million, primarily associated with a goodwill impairment charge and change in deferred tax assets and liabilities as well as depreciation and amortization, asset impairment charge and stock-based compensation expense. In addition, we benefited from collections on accounts receivables, which contributed cash inflows of $24.2 million, offset by other changes in working capital, including $95.2 million cash outflows for inventories.

Previous wording

Cash used for investing activities was $20.2 million for the three months ended March 31, 2024, and was primarily related to $66.1 million in purchases of property, plant, equipment, investments and intangibles. We also sold $63.1 million of marketable securities.

Current wording

Cash used for investing activities was $55.5 million for the six months ended June 30, 2024, and was primarily related to $101.4 million in purchases of property, plant, equipment, investments and intangibles. We also sold $63.1 million of marketable securities.

Previous wording

Cash used for financing activities was $18.5 million for the three months ended March 31, 2024, and was primarily related to net proceeds from the Revolving Credit Facility of $40.0 million and payments on long-term borrowings of $51.9 million.

Current wording

Cash provided by financing activities was $144.0 million for the six months ended June 30, 2024, and was primarily related to net proceeds from the Revolving Credit Facility of $253.0 million, partially offset by payments on long-term borrowings of $103.7 million.

Previous wording

Cash provided by operating activities was $188.9 million for the three months ended April 2, 2023, and reflected net income of $48.8 million and non-cash adjustments of $125.7 million, primarily associated with depreciation, amortization and stock-based compensation expense. We benefited from collections on accounts receivables of $187.2 million, primarily due to a COVID-19 government award, partially offset by other changes in working capital.

Current wording

Cash provided by operating activities was $158.3 million for the six months ended July 2, 2023, and reflected a net loss of $4.4 million and non-cash adjustments of $243.7 million, primarily associated with depreciation and amortization, stock-based compensation expense and accretion of interest on deferred consideration. We benefited from collections on accounts receivables of $214.5 million, primarily due to a COVID-19 government award, offset by other changes in working capital.

Previous wording

Cash used for investing activities was $68.9 million for the three months ended April 2, 2023, and was primarily related to $66.0 million in purchases of property, plant, equipment, investments and intangibles. We also purchased $31.6 million and sold $28.4 million of marketable securities.

Current wording

Cash used for investing activities was $111.2 million for the six months ended July 2, 2023, and was primarily related to $117.3 million in purchases of property, plant, equipment, investments and intangibles. We also purchased $50.6 million and sold $53.9 million of marketable securities.

Previous wording

Cash used for financing activities was $59.6 million for the three months ended April 2, 2023, and was primarily related to payments on long-term borrowings of $51.9 million and payments of tax withholdings related to vesting of stock-based awards of $9.5 million.

Current wording

Cash used for financing activities was $159.3 million for the six months ended July 2, 2023, and was primarily related to payments on long-term borrowings of $123.8 million, payments for deferred consideration of $30.3 million and payments of tax withholdings related to vesting of stock-based awards of $12.5 million.

Previous wording

We are focused on expanding the number of instruments placed in the field and solidifying long-term contractual relationships with customers. In order to achieve this goal, in certain jurisdictions where it is permitted, we have leveraged a reagent rental model that has been recognized as more attractive to certain customers. In this model, we lease, rather than sell, instruments to our customers. Over the term of the contract, the purchase price of the instrument is embedded in the price of the assays and reagents. Going forward, we intend to increase the number of reagent rental placements in developed markets, a strategy that we believe is beneficial to our commercial goals because it lowers our customers’ upfront capital costs and therefore allows purchasing decisions to be made at the lab manager level. For these same reasons, the reagent rental model also benefits our commercial strategy in emerging markets. We believe that the shift in our sales strategy will grow our installed base, thereby increasing sales of higher-margin assays, reagents and other consumables over the life of the customer contracts and enhancing our recurring revenue and cash flows. During the three months ended March 31, 2024, we transferred $37.8 million of instrument inventories from Inventories to Property, plant and equipment, net, further increasing our investment in property, plant and equipment.

Current wording

We are focused on expanding the number of instruments placed in the field and solidifying long-term contractual relationships with customers. In order to achieve this goal, in certain jurisdictions where it is permitted, we have leveraged a reagent rental model that has been recognized as more attractive to certain customers. In this model, we lease, rather than sell, instruments to our customers. Over the term of the contract, the purchase price of the instrument is embedded in the price of the assays and reagents. Going forward, we intend to increase the number of reagent rental placements in developed markets, a strategy that we believe is beneficial to our commercial goals because it lowers our customers’ upfront capital costs and therefore allows purchasing decisions to be made at the lab manager level. For these same reasons, the reagent rental model also benefits our commercial strategy in emerging markets. We believe that the shift in our sales strategy will grow our installed base, thereby increasing sales of higher-margin assays, reagents and other consumables over the life of the customer contracts and enhancing our recurring revenue and cash flows. During the six months ended June 30, 2024, we transferred $69.2 million of instrument inventories from Inventories to Property, plant and equipment, net, further increasing our investment in property, plant and equipment.

Previous wording

There have been no accounting pronouncements issued or adopted during the three months ended March 31, 2024 that are expected to have a material impact on the Company’s financial statements.

Current wording

There have been no accounting pronouncements issued or adopted during the six months ended June 30, 2024 that are expected to have a material impact on the Company’s financial statements.

Previous wording

A comprehensive discussion of our critical accounting estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. Other than the following, there have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2024:

Current wording

A comprehensive discussion of our critical accounting estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. Other than the following, there have been no significant changes to our critical accounting policies and estimates during the six months ended June 30, 2024:

Previous wording

During the three months ended March 31, 2024, we concluded that (i) the sustained decline in our stock price and market capitalization occurred during the three months ended March 31, 2024, (ii) the faster than expected decline in COVID-19 and flu markets, and (iii) the recent delay in the timing of expected commercialization for Savanna were triggering events requiring an interim goodwill impairment assessment for all reporting units.

Current wording

During the first quarter of 2024, we concluded that (i) the sustained decline in our stock price and market capitalization occurred during the first quarter of 2024, (ii) the faster than expected decline in COVID-19 and flu markets, and (iii) the recent delay in the timing of expected commercialization for Savanna were triggering events requiring an interim goodwill impairment assessment for all reporting units.