0001906324-26-000024
SEC filingRevenues declined 11% to $619.8M, driven by respiratory product variability and Joint Business termination; cost pressures increased.
For the three months ended March 29, 2026, total revenues decreased 11% to $619.8 million from $692.8 million in the prior-year period. The decline was primarily driven by variability in U.S. respiratory products, particularly lower sales of SOFIA SARS and QUICKVUE SARS Antigen assays, and the termination of a Joint Business arrangement, which contributed a $13.3 million revenue headwind. Currency exchange rates provided a favorable 210-basis-point impact on growth. Cost of sales, excluding amortization of intangible assets, rose to 57.4% of revenue from 50.4%, reflecting higher employee compensation costs. Net loss widened to $91.8 million from a net loss of $12.7 million, impacted by lower revenue and increased costs. Selling, marketing, and administrative expenses increased 6.6% to $199.3 million, while research and development expenses decreased 15.6% to $44.9 million. Interest expense, net, rose to $51.1 million from $40.0 million due to higher debt levels.
Segment performance was mixed. North America, the largest segment, saw revenues fall 19% to $328.9 million, with Adjusted EBITDA down 28% to $169.4 million, driven by respiratory weakness and the Joint Business termination. EMEA revenues grew 4% to $92.5 million, with Adjusted EBITDA up 22% to $20.1 million, supported by Immunohematology growth. China revenues declined 15% to $63.5 million, and Adjusted EBITDA fell 30% to $20.5 million, as slower distributor sales reflected uncertainty over pending IVD pricing guidelines. JPAC revenues rose 3% to $70.0 million, but Adjusted EBITDA decreased 6% to $16.5 million due to higher service costs. Latin America outperformed with 20% revenue growth to $64.9 million and a 32% increase in Adjusted EBITDA to $15.8 million, benefiting from Labs revenue and product mix.
Management’s outlook highlights ongoing uncertainties. The company expects continued fluctuation in respiratory and non-respiratory product demand, with influenza-like illness visits down approximately 30% in the first quarter of 2026 versus 2025. The China NHSA pricing guidelines remain unresolved, and the Middle East conflicts have caused order delays in EMEA. However, the company completed the acquisition of LEX Diagnostics in April 2026 to expand molecular diagnostics. The Optimization Plan, launched in Q2 2025, aims to deliver $50 million in net cost savings through 2027, with $20.4 million in charges incurred to date. The wind-down of the U.S. donor screening portfolio is expected to be substantially complete by mid-2026. Liquidity remains adequate with $140.4 million in cash and $546.4 million available under the revolving credit facility.
Operating cash flow swung from $65.6M in Q1 2025 to -$33.0M in Q1 2026, a $98.6M deterioration, while net loss deepened from -$12.7M to -$91.8M. Cash conversion was weak as CFO fell short of net loss adjusted for non-cash items ($112.9M D&A, $10.7M stock comp). Working capital absorbed $68.1M, led by a $72.6M inventory build and $69.0M outflow from other liabilities, partially offset by $54.0M receivable collections and $15.7M payroll accruals. Capex of $34.0M (down from $56.2M) was entirely covered by operating cash flow in the prior year but not in the current period. Financing activities provided $37.6M, including $50.0M from revolver draws, offset by $22.4M debt repayments and $1.7M short-term borrowings net reduction. No share repurchases or dividends were disclosed. The negative CFO and elevated capex resulted in a free cash flow deficit of $67.0M, a stark reversal from $9.4M positive FCF a year ago, signaling increased reliance on external financing.