QuidelOrtho (QDEL) risk factors, FY2024 10-K

Risks Relating to Our Business, Strategy and Operations

1. 01The industry and market segments in which we operate are highly competitive, and our failure to compete effectively could adversely affect our sales and results of operations
2. 02Global market, macroeconomic and geopolitical conditions may adversely affect our operations and performance
3. 03Fluctuations or a decline in sales of our respiratory products could materially and adversely affect our operating results
4. 04A significant portion of our total revenues are from a relatively small number of customers, and if we fail to retain or expand our customer relationships or significant customers terminate or do not renew their contracts, our business, operating results and financial condition could be adversely affected
5. 05Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results
6. 06a small number of contract manufacturers and a large number of single and sole source suppliers makes us vulnerable to possible production capacity or other constraints of such suppliers or in their supply chain and reduced control over manufacturing, product availability, delivery schedules and costs
7. 07We may experience manufacturing or warehousing problems or delays due to, among other reasons, our volume, specialized processes, natural disasters, public health crises and macroeconomic and geopolitical conditions
8. 08Our collaboration arrangements may not operate according to our business strategy if our collaboration arrangement partners fail to fulfill their obligations
9. 09A decrease in the number of surgical procedures performed, and the resulting decrease in blood demand, could negatively impact our financial results
10. 10Our reagent rental model reduces our cash flows during the initial part of the applicable contract, which causes our cash flows to fluctuate from quarter to quarter
11. 11We may not achieve market acceptance of our products by customers and this would have a negative effect on future sales
12. 12The healthcare industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes, including an effort to reduce costs, which could adversely affect our business, financial condition and results of operations
13. 13Governmental and private healthcare providers and payors around the world are increasingly utilizing managed care for the delivery of healthcare services, forming group purchasing organizations to improve their purchasing leverage and using competitive bid processes to procure healthcare products and services
14. 14Consolidation of our customer base, the formation of group purchasing organizations and government-sponsored tendering processes could materially adversely affect our sales and results of operations
15. 15We have been incorporating AI into our internal operations and may incorporate AI into our products and services. Implementation of AI and machine learning technologies may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business

Risks Relating to Our International Operations

1. 16As a global business, we face risks relating to our non-U.S. operations and international sales, including inherent macroeconomic, geopolitical and regulatory risks, that could impact our financial performance, cause interruptions in our current business operations and impede our growth strategy
2. 17Currency translation risk and currency transaction risk may adversely affect our financial condition, results of operations and cash flows

Risks Relating to Our Integration and Business Efficiency Efforts

1. 18The failure to integrate successfully the businesses of Quidel and Ortho would adversely affect our future business and financial performance
2. 19We will continue to incur significant integration-related costs in connection with the Combinations

Risks Relating to Our IT Systems

1. 20Our ability to protect our information systems and personal and confidential information, including from data corruption, cyber-attacks, security breaches or IT errors, is critical to the success of our business
2. 21and services, as well as those of our service providers, remain potentially vulnerable to known or unknown threats. Additionally, our information systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages and system failures
3. 22Interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems could impair the delivery of our cloud-based solutions and negatively impact our business

Risks Relating to Our Intellectual Property

1. 23To remain competitive, we must continue to develop, obtain and protect proprietary technology rights; otherwise, we may lose market share or need to reduce prices as a result of competitors selling lower priced or technologically superior products or services that compete with ours

Risks Relating to Government Regulation

1. 24Regulation of Our Industry and Products
2. 25Some of our respiratory products were authorized by the FDA through an EUA and the loss of such authorization could have a material adverse effect on our business, results of operations, financial position and cash flows
3. 26If we are unable to obtain or maintain required clearances or approvals for the commercialization of our products in the U.S. and certain foreign countries, we will not be able to sell those products in such jurisdictions, which could negatively impact our results of operations
4. 27clearance or approval, and we may be subject to civil, criminal, monetary and non-monetary penalties and damage to our reputation
5. 28If the results of clinical studies required to gain regulatory approval to sell our products are not available when expected, or do not demonstrate the safety and effectiveness of those products, we may be unable to obtain regulatory approval and sell those products
6. 29or modified products from being developed, cleared, approved or commercialized in a timely manner or at all, which could negatively impact our business
7. 30We may encounter challenges entering into contracts with government entities due to government-sponsored tendering requirements, and any contracts that we have entered into or will enter into with government entities may involve future funding, compliance and possible sanctions risks
8. 31If one or more of our products is claimed to be defective or does not comply with applicable regulations, we could be subject to claims of liability and harm to our reputation that could adversely affect our business
9. 32information, benefits or claims, which is highly regulated by the FTC and the FDA, could be alleged to be misleading or erroneous. If the FTC or the FDA alleges or establishes that any of our communications are misleading, we could be subject to litigation and material penalties and fines
10. 33We are subject to healthcare laws and regulations that could result in liability, require us to change our business practices and restrict our operations in the future
11. 34We use hazardous materials in our business that may result in substantial compliance costs or claims against us relating to handling, storage or disposal
12. 35We will be exposed to significant risks in relation to compliance with anti-bribery and anti-corruption laws and regulations and economic sanctions programs
13. 36We are subject to U.S. and foreign tax laws, and changes to such tax laws or differing interpretation of those laws by the relevant governmental authorities could adversely affect us

Risks Relating to Corporate Finance

1. 37We may need to raise additional funds to finance our future capital or operating needs or other business purposes, which could have adverse consequences on the interests of our stockholders, and may not be available on acceptable terms or at all
2. 38Our indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness
3. 39The occurrence of any one of the foregoing risks could have a material adverse effect on our business, financial condition, results of operations and ability to satisfy our obligations in respect of our outstanding debt
4. 40Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our business, financial position and results of operations and our ability to satisfy our debt obligations

Risks Relating to Our Employees

1. 41We may have difficulty attracting, motivating and retaining executives and other key employees
2. 42If we are required to make unexpected payments to any defined benefit plans or other post-employment benefit plans (“Benefit Plans”) applicable to our employees, our financial condition may be adversely affected
3. 43We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs
4. 44We are subject to, and may in the future become subject to, claims and litigation that could result in significant expenses and could ultimately result in an unfavorable outcome for us
5. 45Expectations of our performance related to sustainability matters, or the reporting of such matters, may impose additional costs on us and expose us to new risks
6. 46We are exposed to business risk which, if not fully covered by insurance, could have an adverse effect on our results of operations
7. 47Some provisions of our Charter, our Bylaws and Delaware law may make takeover attempts difficult, which could depress the price of our common stock and inhibit our stockholders’ ability to receive a premium price for their shares
8. 48The market price of our common stock may be volatile
9. 49Future sales of our common stock by us or our stockholders in the public market, or the perception that such sales may occur, could reduce the price of our common stock, and any additional capital raised by us through the sale of equity or convertible securities may dilute ownership in the Company