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, 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.

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,” including under “Outlook” and “Liquidity Outlook,” 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: fluctuations in demand for our non-respiratory and respiratory products; 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

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, EMEA and China. Latin America and JPAC (Japan and Asia Pacific) are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Transfusion Medicine, Point of Care and Molecular Diagnostics.

Current wording

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, EMEA and China. Latin America and JPAC (Japan and Asia Pacific) are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue in the following business units: Labs, Immunohematology, Donor Screening, Point of Care and Molecular Diagnostics.

Previous 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.

Current wording

For the nine months ended September 29, 2024, Total revenues decreased by 8% to $2,075.1 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 nine months ended September 29, 2024 and October 1, 2023, revenues related to our respiratory products accounted for approximately 17% and 24% 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 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.

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. 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. The winding down of the U.S. donor screening portfolio, as compared to the prior year periods, contributed to the decline in revenue with a margin lower than our overall margin. Refer to Item 1, “Financial Statements—Note 3. Revenue” for more information. The wind-down of our U.S. donor screening portfolio is expected to be substantially complete by the end of 2025.

Previous wording

We expect overall demand for our non-respiratory and respiratory products to continue to fluctuate and pricing pressures on certain products to persist as a result of a number of factors, including increased supply, emergence and spread of new variants, and the seasonal demands of the respiratory seasons, which are typically more prevalent during the fall and winter.

Current wording

We expect overall demand for our non-respiratory and respiratory products to continue to fluctuate and pricing pressures on certain products to persist as a result of a number of factors, including increased supply, emergence and spread of new variants, and the seasonal demands of the respiratory season, which are typically more prevalent during the fall and winter.

Previous wording

While we expect the revenues and financial results from our non-respiratory and respiratory products to be affected by the highly competitive environment and seasonal demands of the respiratory seasons, we intend to continue our focus on prudently managing our business and delivering improved financial results, while at the same time striving to introduce new products and services into the market.

Current wording

While we expect the revenues and financial results from our non-respiratory and respiratory products to be affected by the highly competitive environment and our respiratory products to be affected by the seasonal demands of the respiratory season, we intend to continue our focus on prudently managing our business and delivering improved financial results, while at the same time striving to introduce new products and services into the market.

Previous wording

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

Current wording

The following table compares Total revenues by business unit for the three and nine months ended September 29, 2024 and October 1, 2023:

Previous wording

For the three months ended June 30, 2024, Total revenues decreased to $637.0 million from $665.1 million for the same period in the prior year. Labs revenue decreased 2% compared to the prior year period, primarily due to a decline in instrument revenue, partially offset by growth in recurring revenue, which includes reagents, consumables and services in our Labs revenue. Transfusion Medicine revenue decreased 1% compared to the prior year period, primarily due to the wind-down of the U.S. donor screening business. The decrease in Point of Care revenue of $17.1 million was driven primarily by lower demand for QuickVue SARS Antigen assays, partially offset by an increase in sales of Sofia SARS Antigen assays. Molecular Diagnostics sales decreased by $1.8 million compared to the prior year period. Currency exchange rates had an unfavorable impact of approximately 100 basis points on our growth rate for the three months ended June 30, 2024.

Current wording

For the three months ended September 29, 2024, Total revenues decreased to $727.1 million from $744.0 million for the same period in the prior year. Labs revenue increased 4% compared to the prior year period, primarily due to growth in recurring revenue, which includes reagents, consumables and services in our Labs revenue, partially offset by a decline in instrument revenue. Excluding foreign currency impact, Labs revenue increased 5% compared to the prior year period. Immunohematology revenue increased 2% compared to the prior year period, primarily due to reagent growth. Donor Screening revenue decreased 20% compared to the prior year period, primarily due to the wind-down of the U.S. donor screening business. Point of Care revenue decreased 12% compared to the prior year period, primarily due to lower sales of Sofia SARS Antigen assays, partially offset by an increase in demand for QuickVue SARS Antigen assays. Currency exchange rates did not significantly impact our growth rate for the three months ended September 29, 2024.

Previous 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.

Current wording

For the nine months ended September 29, 2024, Total revenues decreased to $2,075.1 million from $2,255.2 million for the same period in the prior year. Labs revenue decreased 1% compared to the prior year period, 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, partially offset by growth in recurring revenue. Immunohematology revenue increased 2% compared to the prior year period, primarily due to reagent growth. Donor Screening revenue decreased 7% compared to the prior year period, primarily due to the wind-down of the U.S. donor screening business. The Point of Care business unit contributed to revenue decline, driven by a decrease of $178.9 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 $11.8 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 nine months ended September 29, 2024.

Previous wording

Cost of sales, excluding amortization of intangible assets, decreased to $361.0 million, or 56.7% of Total revenues, for the three months ended June 30, 2024, compared to $368.6 million, or 55.4% of Total revenues, for the three months ended July 2, 2023. Cost of sales, excluding amortization of intangible assets, was impacted by revenue decline, partially offset by a shift in product mix.

Current wording

Cost of sales, excluding amortization of intangible assets, increased to $374.8 million, or 51.5% of Total revenues, for the three months ended September 29, 2024, compared to $374.6 million, or 50.3% of Total revenues, for the three months ended October 1, 2023. Cost of sales, excluding amortization of intangible assets, was impacted by a shift in product mix.

Previous 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.

Current wording

Cost of sales, excluding amortization of intangible assets, decreased to $1,114.7 million, or 53.7% of Total revenues, for the nine months ended September 29, 2024, compared to $1,140.7 million, or 50.6% of Total revenues, for the nine months ended October 1, 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 and six months ended June 30, 2024 and July 2, 2023:

Current wording

The following table summarizes operating expenses for the three and nine months ended September 29, 2024 and October 1, 2023:

Previous 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.

Current wording

Selling, marketing and administrative expenses for the nine months ended September 29, 2024 increased by $3.7 million, or 0.6%, to $579.3 million from $575.6 million for the same period in the prior year, primarily due to higher employee compensation costs.

Previous 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.

Current wording

Research and development expense for the nine months ended September 29, 2024 decreased by $14.3 million, or 7.7%, to $171.4 million from $185.7 million for the same period in the prior year, primarily due to lower employee compensation costs and outside services.

Previous wording

Amortization of intangible assets was $51.9 million and $103.6 million for the three and six months ended June 30, 2024, respectively, and $51.4 million and $102.2 million for the three and six months ended July 2, 2023, respectively.

Current wording

Amortization of intangible assets was $51.9 million and $155.5 million for the three and nine months ended September 29, 2024, respectively, and $51.4 million and $153.6 million for the three and nine months ended October 1, 2023, respectively.

Previous 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.

Current wording

Integration related costs were $36.8 million and $90.3 million for the three and nine months ended September 29, 2024, respectively, and $26.5 million and $80.4 million for the three and nine months ended October 1, 2023, respectively. The increase in costs compared to the prior year periods was primarily due to consulting costs and employee compensation related charges.

Previous 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.

Current wording

During the nine months ended September 29, 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

During the three and six months ended June 30, 2024, we recognized an impairment charge of $56.9 million related to the long-lived assets classified as assets held for sale. Refer to Item 1, “Financial Statements—Note 7. Assets Held for Sale” for more information. Asset impairment charge was $0.5 million and $1.0 million for the three and six months ended July 2, 2023, respectively.

Current wording

During the nine months ended September 29, 2024, we recognized an impairment charge of $56.9 million related to the long-lived assets classified as assets held for sale. Refer to Item 1, “Financial Statements—Note 7. Assets Held for Sale” for more information. Asset impairment charges were $2.2 million and $3.2 million for the three and nine months ended October 1, 2023, respectively.

Previous 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.

Current wording

Other operating expenses were $6.3 million and $23.6 million for the three and nine months ended September 29, 2024, respectively, and $7.4 million and $17.0 million for the three and nine months ended October 1, 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 $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.

Current wording

Interest expense, net was $42.9 million and $122.9 million for the three and nine months ended September 29, 2024, respectively, and $37.7 million and $110.9 million for the three and nine months ended October 1, 2023, respectively. Refer to Item 1, “Financial Statements—Note 9. Borrowings” for more information.

Previous wording

Other expense, net was $4.4 million and $6.3 million for the three and six months ended June 30, 2024, respectively, and $1.0 million and $3.9 million for the three and six months ended July 2, 2023, respectively. The increases from prior year periods were primarily related to the Credit Agreement amendment fees. Refer to Item 1, “Financial Statements—Note 9. Borrowings” for more information.

Current wording

Other expense, net was $0.9 million and $7.2 million for the three and nine months ended September 29, 2024, respectively, and $4.1 million and $8.0 million for the three and nine months ended October 1, 2023, respectively. The decreases from prior year periods were primarily related to net foreign currency losses offset by the Credit Agreement amendment fees. Refer to Item 1, “Financial Statements—Note 9. Borrowings” for more information.

Previous 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.

Current wording

For the three months ended September 29, 2024, we recognized an income tax benefit of $8.9 million in relation to loss before income taxes of $28.8 million, resulting in an effective tax rate of 30.9%. For the three months ended October 1, 2023, we recognized an income tax benefit of $2.8 million in relation to loss before income taxes of $15.5 million, resulting in an effective tax rate of 18.1%. For the three months ended September 29, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to the utilization of net operating losses previously not benefited due to valuation allowances. For the three months ended October 1, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Tax Income, partially offset by non-U.S. earnings being taxed at rates that were different than the U.S. statutory rate, R&D credits, foreign tax credits and foreign exchange losses.

Previous wording

For the six months ended June 30, 2024, we recognized an income tax benefit of $108.1 million in relation to loss before income taxes of $1,961.8 million, resulting in an effective benefit tax rate of 5.5%. For the six months ended July 2, 2023, the recognized amount of income tax benefit was not material in relation to loss before income taxes of $4.4 million, resulting in an effective benefit tax rate of 0.7%. For the six months ended June 30, 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 six months ended July 2, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Tax Income, partially offset by U.S. earnings being taxed at rates that are different than the U.S. statutory rate, R&D credit, foreign tax credits and foreign exchange losses.

Current wording

For the nine months ended September 29, 2024, we recognized an income tax benefit of $117.0 million in relation to loss before income taxes of $1,990.6 million, resulting in an effective tax rate of 5.9%. For the nine months ended October 1, 2023, we recognized an income tax benefit of $2.8 million in relation to loss before income taxes of $19.9 million, resulting in an effective tax rate of 14.1%. For the nine months ended September 29, 2024, the effective tax rate differed from the U.S. federal statutory rate primarily due to goodwill impairment charges that were nondeductible for tax purposes. For the nine months ended October 1, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to net operating losses in certain subsidiaries not being benefited due to the establishment of valuation allowances and Global Intangible Low-Tax Income, partially offset by non-U.S. earnings being taxed at rates that were different than the U.S. statutory rate, R&D credits, foreign tax credits and foreign exchange losses.

Previous 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.

Current wording

Adjusted EBITDA was $625.7 million for the nine months ended September 29, 2024, compared to $708.1 million for the nine months ended October 1, 2023. The decrease was primarily driven by a COVID-19 government award in the prior year period, along with the corresponding inventory release of $39 million, partially offset by a decrease in employee compensation costs, lower other operating expenses and an increase in revenues for Sofia SARS Antigen assays.

Previous wording

Total revenues were $124.2 million for the three months ended June 30, 2024, which decreased slightly compared to $124.4 million for the three months ended July 2, 2023.

Current wording

Total revenues were $80.4 million for the three months ended September 29, 2024, which decreased slightly compared to $81.1 million for the three months ended October 1, 2023, driven by an increase of 6% in Labs revenues, offset by decreases in other business units revenues.

Previous wording

Adjusted EBITDA was $60.5 million for the six months ended June 30, 2024, compared to $58.7 million for the six months ended July 2, 2023. The increase was primarily driven by higher Labs revenues and the impact from changes in product mix.

Current wording

Adjusted EBITDA was $36.9 million for the three months ended September 29, 2024, compared to $37.3 million for the three months ended October 1, 2023. The decrease was primarily driven by a decrease in other business units revenues, partially offset by higher Labs revenues.

Previous 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.

Current wording

Adjusted EBITDA was $97.4 million for the nine months ended September 29, 2024, compared to $96.0 million for the nine months ended October 1, 2023. The increase was primarily driven by higher Labs revenues, partially offset by a decrease in other business units revenues and the impact from changes in product mix.

Previous wording

Total revenues were $81.6 million for the three months ended June 30, 2024, which increased slightly compared to $81.3 million for the three months ended July 2, 2023 driven by an increase in Labs revenues, offset by a decrease in Point of Care revenue.

Current wording

Total revenues were $126.5 million for the three months ended September 29, 2024, which increased slightly compared to $123.2 million for the three months ended October 1, 2023, primarily due to an increase in Labs revenues, partially offset by a decrease in Point of Care revenues.

Previous 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.

Current wording

As of September 29, 2024, we had $143.7 million in Cash and cash equivalents, a $24.8 million increase 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 $253.0 million borrowings outstanding, was $534.0 million as of June 30, 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 $230.0 million borrowings outstanding, was $557.0 million as of September 29, 2024.

Previous 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.

Current wording

Capital expenditures, including investments, were $147.9 million for the nine months ended September 29, 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 $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.

Current wording

Cash provided by operating activities was $19.3 million for the nine months ended September 29, 2024, and reflected a net loss of $1,873.6 million and non-cash adjustments of $2,099.8 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. Cash provided by operating activities was also driven by $110.9 million cash outflows for inventories.

Previous 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.

Current wording

Cash used for investing activities was $112.0 million for the nine months ended September 29, 2024, and was primarily related to $147.9 million in purchases of property, plant, equipment, investments and intangibles. We also sold $63.1 million of marketable securities.

Previous 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.

Current wording

Cash provided by financing activities was $117.7 million for the nine months ended September 29, 2024, and was primarily related to net proceeds from the Revolving Credit Facility of $230.0 million, partially offset by payments on long-term borrowings of $107.0 million.

Previous 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.

Current wording

Cash provided by operating activities was $199.8 million for the nine months ended October 1, 2023, and reflected a net loss of $17.1 million and non-cash adjustments of $366.6 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 $124.1 million, primarily due to a COVID-19 government award, offset by other changes in working capital, including $146.0 million cash outflows for inventories.

Previous 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.

Current wording

Cash used for investing activities was $132.5 million for the nine months ended October 1, 2023, and was primarily related to $160.7 million in purchases of property, plant, equipment, investments and intangibles. We also purchased $50.6 million and sold $68.3 million of marketable securities.

Previous 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.

Current wording

Cash used for financing activities was $208.0 million for the nine months ended October 1, 2023, and was primarily related to payments on long-term borrowings of $175.7 million, payments for deferred consideration of $30.3 million and payments of tax withholdings related to vesting of stock-based awards of $13.0 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 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.

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 nine months ended September 29, 2024, we transferred $99.4 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 six months ended June 30, 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 nine months ended September 29, 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 six months ended June 30, 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 nine months ended September 29, 2024: