WALTHAM, Mass., April 29, 2014 /PRNewswire/ -- Alere Inc. (NYSE: ALR), a global leader in enabling individuals to take charge of their health at home through the merger of rapid diagnostics and health information solutions, today announced its financial results for the quarter ended March 31, 2014.
Ron Zwanziger, Chairman, Chief Executive Officer and President of Alere said, "Despite a difficult quarter from a revenue perspective, principally related to weak U.S. influenza sales and a larger-than-expected reduction in U.S. healthcare utilization which primarily impacted our U.S. infectious disease revenue, we are pleased to have delivered adjusted earnings per diluted share in excess of our prior year's results. This was achieved in part through careful expense controls. Strong free cash flow generated during the quarter enabled us to reduce our net debt to adjusted EBITDA ratio during the quarter, again demonstrating our commitment to delivering continuing shareholder value."
Financial results for the first quarter of 2014:
- Net revenue of $716.6 million for the first quarter of 2014, compared to $739.2 million for the first quarter of 2013. Non-GAAP adjusted net revenue was $717.0 million for the first quarter of 2014, compared to $739.9 million for the first quarter of 2013.
- Net loss of $11.5 million attributable to common stockholders of Alere Inc., and respective net loss per diluted common share of $0.14, for the first quarter of 2014, compared to net income of $7.2 million attributable to common stockholders of Alere Inc., and respective net income per diluted common share of $0.09, for the first quarter of 2013.
- Non-GAAP adjusted net income per diluted common share of $0.55 for the first quarter of 2014, compared to non-GAAP adjusted net income per diluted common share of $0.53 for the first quarter of 2013.
- Net product and services revenue from our Professional Diagnostics segment was $561.3 million in the first quarter of 2014, compared to net product and services revenue of $578.6 million in the first quarter of 2013. Non-GAAP adjusted net product and services revenue from our Professional Diagnostics segment was $561.8 million in the first quarter of 2014, compared to non-GAAP adjusted net product and services revenue of $579.3 million in the first quarter of 2013. Recent Professional Diagnostics acquisitions contributed $21.5 million of incremental net revenue, compared to the first quarter of 2013, offset by a $6.4 million decrease in net revenue related to our 2013 disposition of Spinreact.
- U.S. influenza, meter-based Triage products and mail-order diabetes revenues were $7.3 million, $22.9 million and $32.3 million, respectively, for the first quarter of 2014 compared to $34.3 million, $21.6 million and $33.2 million, respectively, for the first quarter of 2013. Lower influenza revenues reflect the relatively short 2013-2014 flu season, which we noted in our fourth quarter 2013 earnings call. Meter-based Triage products revenue increased from the prior year for the first time since our supply issues began in the second quarter of 2012, reflecting increased revenues from sales of our BNP, Cardiac Panel and D-dimer products. Despite an increase in patients served from 282,000 at the end of the first quarter of 2013 to 769,000 as of March 31, 2014, mail-order diabetes revenues declined slightly, as a result of lower reimbursement rates that became effective on July 1, 2013.
- Excluding the impact of the change in U.S. influenza revenues and the impact on revenues from the U.S. meter-based Triage product sales, currency adjusted organic growth in our Professional Diagnostics segment was negative 1%. This growth rate was adversely impacted by the decrease in reimbursement rates that became effective on July 1, 2013 for our U.S. mail-order diabetes business. Excluding revenues from our U.S. mail-order diabetes business and considering the flu and Triage adjustments, the currency adjusted organic growth rate for the first quarter of 2014 was 4% for the remainder of our Professional Diagnostics segment.
- The 4% adjusted organic growth rate for our Professional Diagnostic segment for the first quarter of 2014, adjusted for the impact of the U.S. influenza, meter-based Triage products and mail-order diabetes revenues as noted above, reflects a 2% decrease in adjusted U.S. revenues, compared to the first quarter of 2013, offset by an 8% increase in adjusted net revenues from our international business. The 2% decrease in the U.S. business principally resulted from lower infectious disease revenues reflecting lower utilization levels during 2014 than during 2013.
- Net product and services revenue from our Health Information Solutions segment was $123.7 million in the first quarter of 2014, compared to $134.2 million in the first quarter of 2013 and $130.0 million in the fourth quarter of 2013, as a result of the weak contracting season that we experienced during the second half of 2013.
- Gross margin was 49.0% of net revenue in the first quarter of 2014, compared to 49.3% in the first quarter of 2013. Non-GAAP adjusted gross margins, which exclude from cost of net revenue amortization of acquisition-related intangibles, stock-based compensation expense, restructuring charges, and non-cash charges associated with acquired inventory, was 51.5% of non-GAAP adjusted net revenue in the first quarter of 2014 compared to 52.1% in the first quarter of 2013. The lower gross margin in the current period principally reflects the lower U.S. influenza sales and reduced mail-order diabetes reimbursement rates noted above.
- Operating expenses consisting of research and development and selling, general and administrative expenses were $325.3 million for the first quarter of 2014, compared to $333.8 million for the first quarter of 2013. Non-GAAP adjusted operating expenses, which exclude amortization of acquisition-related intangibles, restructuring charges, stock-based compensation expense, acquisition-related fair value and compensation-related contingent consideration charges and acquisition and disposition costs, were $255.5 million for the first quarter of 2014, or 35.6% of non-GAAP adjusted net revenue, compared to $257.3 million, or 34.8% of non-GAAP adjusted net revenue, for the first quarter of 2013.
- Free cash flow for the first quarter of 2014 was $78.4 million, reflecting cash flow from operations of $105.9 million, offset by capital expenditures of $27.5 million. Free cash flow for the first quarter of 2013 was $35.0 million, reflecting cash flow from operations of $71.1 million, offset by capital expenditures of $36.1 million.
- Non-GAAP EBITDA for the first quarter of 2014 was $144.5 million, which reflects adjustments to add back non-interest related restructuring charges of $7.2 million, $0.3 million of acquisition-related costs and $3.0 million of costs associated with potential business dispositions. Non-GAAP EBITDA for the first quarter of 2013 was $153.3 million, which reflects adjustments to add back non-interest related restructuring charges of $3.9 million and $0.9 million of acquisition-related costs. Adjusted non-GAAP EBITDA, which reflects adjustments to add back restructuring, acquisition and disposition related and proxy costs, totaled $661.0 million for the twelve-month period ended March 31, 2014, compared to $619.5 million for the twelve-month period ended March 31, 2013.
- Debt, net of cash and restricted cash held to secure debt ("net debt"), was $3.37 billion as of March 31, 2014, compared to net debt of $3.53 billion as of March 31, 2013. Our net debt to adjusted non-GAAP EBITDA ratio was 5.1x as of March 31, 2014, compared to 5.7x as of March 31, 2013.
The Company's GAAP results for the first quarter of 2014 exclude $0.4 million of revenue associated with acquired software license contracts that are not recognized due to business combination accounting rules and include $66.6 million of amortization, $7.3 million of restructuring charges, $5.7 million of stock-based compensation expense, $0.3 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, $4.6 million of income recorded for fair value adjustments to acquisition-related contingent consideration, $3.0 million of costs associated with potential business dispositions, $0.4 million of interest expense recorded in connection with fees paid for certain debt modifications, $0.4 million in compensation charges and $0.1 million of related interest accretion associated with acquisition-related contingent consideration obligations. The Company's GAAP results for the first quarter of 2013 exclude $0.6 million of revenue associated with acquired software license contracts that are not recognized due to business combination accounting rules and include $76.0 million of amortization, $3.9 million of restructuring charges, $4.1 million of stock-based compensation expense, $0.9 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, $11.0 million of expense recorded for fair value adjustments to acquisition-related contingent consideration, $1.0 million of interest expense recorded in connection with fees paid for certain debt modifications, $0.7 million in compensation charges associated with acquisition-related contingent consideration obligations, a $0.5 million charge associated with the write-up to fair market value of inventory acquired in connection with the acquisition of Epocal Inc. and $0.2 million of expense associated with the extinguishment of debt.
Detailed reconciliations of the non-GAAP financial measures presented in this release to the most directly comparable financial measures under GAAP, as well as a discussion regarding these non-GAAP financial measures, are included in the schedules to this press release.
The Company will host a conference call beginning at 8:30 a.m. (Eastern Time) today, April 29, 2014, to discuss these results, as well as other corporate matters. During the conference call, the Company may answer questions concerning business and financial developments and trends and other business and financial matters. The Company's responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed.
The conference call may be accessed by dialing (877) 443-4809 (domestic) or (412) 902-6615 (international) and asking for Alere Inc. A webcast of the call can also be accessed via the Alere website at http://www.alere.com/us/en/about/investor-relations/events.html, or directly through the following link: http://www.videonewswire.com/event.asp?id=99047.
A replay of the call will be available approximately one hour after the conclusion of the call and will remain available for a period of seven days following the call. The replay may be accessed by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and entering replay code 10045124. The replay will also be available via online webcast at http://www.videonewswire.com/event.asp?id=99047 or via the Alere website at http://www.alere.com/us/en/about/investor-relations/events.html for a period of 60 days following the call.
Additionally, reconciliations to non-GAAP financial measures not included in this press release that may be discussed during the call will also be available at the Alere website (http://www.alere.com/us/en/about/investor-relations/events.html) under the Earnings Calls and Releases section shortly before the conference call begins and will continue to be available on this website.
For more information about Alere, please visit our web site at http://www.alere.com.
By developing new capabilities in near-patient diagnosis, monitoring and health information solutions, Alere enables individuals to take charge of improving their health and quality of life at home. Alere's global leading products and services, as well as its new product development efforts, focus on infectious disease, toxicology, cardiology and diabetes. Alere is headquartered in Waltham, Massachusetts.
Alere Inc. and Subsidiaries |
|||||
Condensed Consolidated Statements of Operations |
|||||
(in thousands, except per share amounts) |
|||||
Three Months Ended March 31, |
|||||
2014 |
2013 |
||||
Net product sales and services revenue |
$ 711,410 |
$ 735,185 |
|||
License and royalty revenue |
5,212 |
4,064 |
|||
Net revenue |
716,622 |
739,249 |
|||
Cost of net revenue |
365,383 |
374,992 |
|||
Gross profit |
351,239 |
364,257 |
|||
Gross margin |
49% |
49% |
|||
Operating expenses: |
|||||
Research and development |
38,699 |
41,454 |
|||
Selling, general and administrative |
286,600 |
292,314 |
|||
Total operating expenses |
325,299 |
333,768 |
|||
Operating income |
25,940 |
30,489 |
|||
Interest and other income (expense), net |
(47,322) |
(57,869) |
|||
Loss before benefit for income taxes |
(21,382) |
(27,380) |
|||
Benefit for income taxes |
(9,917) |
(36,871) |
|||
Income (loss) before equity earnings of unconsolidated entities, net of tax |
(11,465) |
9,491 |
|||
Equity earnings of unconsolidated entities, net of tax |
5,352 |
2,934 |
|||
Net income (loss) |
(6,113) |
12,425 |
|||
Less: Net income (loss) attributable to non-controlling interests |
108 |
(25) |
|||
Net income (loss) attributable to Alere Inc. and Subsidiaries |
(6,221) |
12,450 |
|||
Preferred stock dividends |
(5,250) |
(5,250) |
|||
Net income (loss) available to common stockholders |
$ (11,471) |
$ 7,200 |
|||
Basic net income (loss) per common share |
$ (0.14) |
$ 0.09 |
|||
Diluted net income (loss) per common share |
$ (0.14) |
$ 0.09 |
|||
Weighted average shares - basic |
82,387 |
81,199 |
|||
Weighted average shares - diluted |
82,387 |
81,300 |
Alere Inc. and Subsidiaries |
|||
Condensed Consolidated Balance Sheets |
|||
(in thousands) |
|||
March 31, |
December 31, |
||
2014 |
2013 |
||
ASSETS |
|||
CURRENT ASSETS: |
|||
Cash and cash equivalents |
$ 433,026 |
$ 361,908 |
|
Restricted cash |
4,222 |
6,373 |
|
Marketable securities |
781 |
858 |
|
Accounts receivable, net |
528,793 |
548,729 |
|
Inventories, net |
371,136 |
364,185 |
|
Prepaid expenses and other current assets |
183,145 |
190,361 |
|
Total current assets |
1,521,103 |
1,472,414 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
545,051 |
545,164 |
|
GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
4,763,226 |
4,835,004 |
|
RESTRICTED CASH - NON-CURRENT |
28,856 |
29,370 |
|
DEFERRED FINANCING COSTS AND OTHER ASSETS, NET |
177,950 |
178,862 |
|
Total assets |
$ 7,036,186 |
$ 7,060,814 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
CURRENT LIABILITIES: |
|||
Current portions of long-term debt and capital lease obligations |
$ 71,472 |
$ 55,967 |
|
Other current liabilities |
620,709 |
617,219 |
|
Total current liabilities |
692,181 |
673,186 |
|
LONG-TERM LIABILITIES: |
|||
Long-term debt and capital lease obligations, net of current portions |
3,760,886 |
3,787,195 |
|
Deferred tax liabilities |
307,574 |
329,249 |
|
Other long-term liabilities |
194,989 |
188,336 |
|
Total long-term liabilities |
4,263,449 |
4,304,780 |
|
TOTAL EQUITY |
2,080,556 |
2,082,848 |
|
Total liabilities and equity |
$ 7,036,186 |
$ 7,060,814 |
Alere Inc. and Subsidiaries |
|||
Reconciliation to Non-GAAP Adjusted Operating Results |
|||
(in thousands, except per share amounts) |
|||
Three Months Ended March 31, |
|||
2014 |
2013 |
||
Reconciliation to Non-GAAP Adjusted Operating Income (1) |
|||
Operating income |
$ 25,940 |
$ 30,489 |
|
Adjustment related to acquired software license contracts |
419 |
643 |
|
Amortization of acquisition-related intangible assets |
66,473 |
75,867 |
|
Restructuring charges |
7,215 |
3,892 |
|
Stock-based compensation expense |
5,704 |
4,123 |
|
Compensation charges associated with acquisition-related contingent consideration obligations |
422 |
690 |
|
Acquisition-related costs |
321 |
896 |
|
Fair value adjustments to acquisition-related contingent consideration |
4,550 |
11,018 |
|
Non-cash charge associated with acquired inventory |
- |
461 |
|
Costs associated with potential business dispositions |
2,960 |
- |
|
Non-GAAP adjusted operating income |
$ 114,004 |
$ 128,079 |
|
Three Months Ended March 31, |
|||
2014 |
2013 |
||
Reconciliation to Non-GAAP Adjusted Net Income(1) |
|||
Net income (loss) available to common stockholders |
$ (11,471) |
$ 7,200 |
|
Adjustment related to acquired software license contracts |
419 |
643 |
|
Amortization of acquisition-related intangible assets |
66,491 |
75,989 |
|
Restructuring charges |
7,340 |
3,947 |
|
Stock-based compensation expense |
5,704 |
4,123 |
|
Compensation charges associated with acquisition-related contingent consideration obligations |
422 |
690 |
|
Acquisition-related costs |
321 |
896 |
|
Fair value adjustments to acquisition-related contingent consideration |
4,550 |
11,018 |
|
Non-cash charge associated with acquired inventory |
- |
461 |
|
Costs associated with potential business dispositions |
2,960 |
- |
|
Interest expense recorded in connection with fees paid for certain debt modifications and the termination of our senior secured credit facility |
364 |
952 |
|
Interest accretion associated with acquisition-related compensation charges |
95 |
- |
|
Expense associated with extinguishment of debt |
- |
163 |
|
Income tax effects on items above |
(29,858) |
(62,055) |
|
Non-GAAP adjusted net income available to common stockholders |
$ 47,337 |
$ 44,027 |
|
Net income (loss) per diluted common share |
$ (0.14) |
$ 0.09 |
|
Non-GAAP adjusted net income per diluted common share |
$ 0.55 |
$ 0.53 |
|
Weighted average shares - diluted |
82,387 |
81,300 |
|
Non-GAAP adjusted weighted average shares - diluted |
97,346 |
94,977 |
|
(1) In calculating "non-GAAP adjusted operating income" and "non-GAAP adjusted net income", the Company excludes (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business. In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant. Management believes that excluding such charges and income from operating income and net income or loss allows investors and management to evaluate and compare the Company's operating results from continuing operations from period to period in a meaningful and consistent manner. Due to the frequency of their occurrence in its business, the Company does not adjust operating income or net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that "non-GAAP adjusted operating income" and "non-GAAP adjusted net income" are not standard financial measurements under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered as an alternative to operating income and net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, "non-GAAP adjusted operating income" and "non-GAAP adjusted net income" presented in this press release may not be comparable to similar measures used by other companies. |
Alere Inc. and Subsidiaries |
||||||
Selected Consolidated Revenues by Business Area (1) |
||||||
(in thousands) |
||||||
Professional Diagnostics Segment |
% Change |
|||||
Q1 2014 |
Q1 2013 |
Q1 14 v. Q1 13 |
||||
Infectious disease |
$ 164,030 |
$ 189,844 |
-14% |
|||
Toxicology |
151,897 |
149,049 |
2% |
|||
Cardiology |
121,633 |
114,933 |
6% |
|||
Diabetes |
50,721 |
50,083 |
1% |
|||
Other (1) |
73,052 |
74,719 |
-2% |
|||
Professional diagnostics net product sales and services revenue (1) |
561,333 |
578,628 |
-3% |
|||
License and royalty revenue |
5,212 |
3,864 |
35% |
|||
Professional diagnostics net revenue |
$ 566,545 |
$ 582,492 |
-3% |
|||
Health Information Solutions Segment |
% Change |
|||||
Q1 2014 |
Q1 2013 |
Q1 14 v. Q1 13 |
||||
Condition and case management |
$ 49,319 |
$ 54,126 |
-9% |
|||
Wellness |
24,950 |
26,300 |
-5% |
|||
Women's & children's health |
22,215 |
29,080 |
-24% |
|||
Patient self-testing services |
27,184 |
24,701 |
10% |
|||
Health information solutions net revenue |
$ 123,668 |
$ 134,207 |
-8% |
|||
(1) Revenues are presented in accordance with generally accepted accounting principles and exclude an adjustment of $0.4 million and $0.6 million related to acquired software license contracts which were not recognized during the three months ended March 31, 2014 and 2013, respectively, due to business combination accounting rules. |
Alere Inc. and Subsidiaries |
||||||||||
Reconciliation of Operating Income (Loss) to Non-GAAP Adjusted Operating Income (Loss) |
||||||||||
(in thousands) |
||||||||||
For the Three Months Ended March 31, 2014 |
||||||||||
Operating Segment |
Professional Diagnostics |
Health Information Solutions |
Consumer Diagnostics |
Corporate |
Total |
|||||
Net revenue |
$ 566,545 |
$ 123,668 |
$ 26,409 |
$ - |
$ 716,622 |
|||||
Adjustment related to acquired software license contracts (1) |
419 |
- |
- |
- |
419 |
|||||
Non-GAAP adjusted net revenue |
$ 566,964 |
$ 123,668 |
$ 26,409 |
$ - |
$ 717,041 |
|||||
Operating income (loss) |
$ 51,326 |
$ (6,720) |
$ 2,248 |
$ (20,914) |
$ 25,940 |
|||||
Adjustment related to acquired software license contracts (1) |
419 |
- |
- |
- |
419 |
|||||
Amortization of acquisition-related intangible assets |
57,285 |
8,899 |
289 |
- |
66,473 |
|||||
Restructuring charges |
4,303 |
2,817 |
- |
95 |
7,215 |
|||||
Stock-based compensation expense |
- |
- |
- |
5,704 |
5,704 |
|||||
Compensation charges associated with acquisition-related contingent consideration obligations |
422 |
- |
- |
- |
422 |
|||||
Acquisition-related costs |
- |
- |
- |
321 |
321 |
|||||
Fair value adjustments to acquisition-related contingent consideration |
5,461 |
(1,011) |
- |
100 |
4,550 |
|||||
Costs associated with potential business dispositions |
2,960 |
- |
- |
- |
2,960 |
|||||
Non-GAAP adjusted operating income (loss) |
$ 122,176 |
$ 3,985 |
$ 2,537 |
$ (14,694) |
$ 114,004 |
|||||
Non-GAAP adjusted operating income (loss) as % of Non-GAAP adjusted net revenue |
21.5% |
3.2% |
9.6% |
15.9% |
||||||
(1) Estimated revenue related to acquired software license contracts that was not recognized during the first quarter of 2014 due to business combination accounting rules. |
For the Three Months Ended March 31, 2013 |
||||||||||
Operating Segment |
Professional Diagnostics |
Health Information Solutions |
Consumer Diagnostics |
Corporate |
Total |
|||||
Net revenue |
$ 582,492 |
$ 134,207 |
$ 22,550 |
$ - |
$ 739,249 |
|||||
Adjustment related to acquired software license contracts (1) |
643 |
- |
- |
- |
643 |
|||||
Non-GAAP adjusted net revenue |
$ 583,135 |
$ 134,207 |
$ 22,550 |
$ - |
$ 739,892 |
|||||
Operating income (loss) |
$ 59,840 |
$ (13,893) |
$ 2,280 |
$ (17,738) |
$ 30,489 |
|||||
Adjustment related to acquired software license contracts (1) |
643 |
- |
- |
- |
643 |
|||||
Amortization of acquisition-related intangible assets |
64,293 |
11,038 |
536 |
- |
75,867 |
|||||
Restructuring charges |
1,389 |
2,503 |
- |
- |
3,892 |
|||||
Stock-based compensation expense |
- |
- |
- |
4,123 |
4,123 |
|||||
Compensation charges associated with acquisition-related contingent consideration obligations |
690 |
- |
- |
- |
690 |
|||||
Non-cash charge associated with acquired inventory |
461 |
- |
- |
- |
461 |
|||||
Acquisition-related costs |
- |
- |
- |
896 |
896 |
|||||
Fair value adjustments to acquisition-related contingent consideration |
7,063 |
3,355 |
- |
600 |
11,018 |
|||||
Non-GAAP adjusted operating income (loss) |
$ 134,379 |
$ 3,003 |
$ 2,816 |
$ (12,119) |
$ 128,079 |
|||||
Non-GAAP adjusted operating income (loss) as % of Non-GAAP adjusted net revenue |
23.0% |
2.2% |
12.5% |
17.3% |
||||||
(1) Estimated revenue related to acquired software license contracts that was not recognized during the first quarter of 2013 due to business combination accounting rules. |
_________________________________________________ |
Comments: |
In calculating "adjusted operating income (loss)" in the schedule presented above, the Company excludes from operating income (loss) (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business. In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant. Management believes that excluding such charges and income from operating income (loss) allows investors and management to evaluate and compare the Company's operating results from continuing operations from period to period in a meaningful and consistent manner. Due to the frequency of their occurrence in its business, the Company does not adjust operating income (loss) for the costs associated with litigation, including payments made or received through settlements. It should be noted that "adjusted operating income (loss)" is not a standard financial measurement under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered as an alternative to operating income (loss) as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, "adjusted operating income (loss)" presented in this schedule may not be comparable to similar measures used by other companies. |
Reference should also be made to the Company's financial results contained in our earnings press release respective to the periods presented in this schedule, which include a more detailed discussion of the adjustments to the GAAP operating results presented above. |
Alere Inc. and Subsidiaries |
||||
Reconciliations to Non-GAAP Adjusted P&L Categories |
||||
(in thousands) |
||||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Net revenue |
$ 716,622 |
$ 739,249 |
||
Adjustment related to acquired software license contracts |
419 |
643 |
||
Non-GAAP adjusted net revenue |
$ 717,041 |
$ 739,892 |
||
Cost of net revenue |
$ 365,383 |
$ 374,992 |
||
Less adjustments: |
||||
Amortization of acquisition-related intangible assets |
(16,636) |
(19,170) |
||
Restructuring charges |
(875) |
(623) |
||
Stock-based compensation expense |
(287) |
(232) |
||
Non-cash charge associated with acquired inventory |
- |
(461) |
||
Non-GAAP adjusted cost of net revenue |
$ 347,585 |
$ 354,506 |
||
Non-GAAP adjusted gross profit |
$ 369,456 |
$ 385,386 |
||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Research and development |
$ 38,699 |
$ 41,454 |
||
Less adjustments: |
||||
Amortization of acquisition-related intangible assets |
(1,165) |
(1,282) |
||
Stock-based compensation expense |
(1,191) |
(747) |
||
Non-GAAP adjusted research and development |
$ 36,343 |
$ 39,425 |
||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Selling, general and administrative |
$ 286,600 |
$ 292,314 |
||
Less adjustments: |
||||
Amortization of acquisition-related intangible assets |
(48,672) |
(55,415) |
||
Restructuring charges |
(6,340) |
(3,269) |
||
Stock-based compensation expense |
(4,226) |
(3,144) |
||
Compensation charges associated with acquisition-related contingent consideration obligations |
(422) |
(690) |
||
Acquisition-related costs |
(321) |
(896) |
||
Fair value adjustments to acquisition-related contingent consideration |
(4,550) |
(11,018) |
||
Costs associated with potential business dispositions |
(2,960) |
- |
||
Non-GAAP adjusted selling, general and administrative |
$ 219,109 |
$ 217,882 |
||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Interest and other income (expense), net |
$ (47,322) |
$ (57,869) |
||
Less adjustments: |
||||
Restructuring charges |
125 |
55 |
||
Interest expense recorded in connection with fees paid for certain debt modifications and the termination of our senior secured credit facility |
364 |
952 |
||
Interest accretion associated with acquisition-related compensation charges |
95 |
- |
||
Expense associated with extinguishment of debt |
- |
163 |
||
Non-GAAP adjusted interest and other income (expense), net |
$ (46,738) |
$ (56,699) |
||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Benefit for income taxes |
$ (9,917) |
$ (36,871) |
||
Add: Income tax effects on Non-GAAP adjustments |
29,887 |
62,061 |
||
Non-GAAP adjusted provision for income taxes |
$ 19,970 |
$ 25,190 |
||
Three Months Ended March 31, 2014 |
Three Months Ended March 31, 2013 |
|||
Equity earnings of unconsolidated entities, net of tax |
$ 5,352 |
$ 2,934 |
||
Less adjustments: |
||||
Amortization of acquisition-related intangible assets |
148 |
151 |
||
Income tax effects on items above |
- |
- |
||
Non-GAAP adjusted equity earnings of unconsolidated entities, net of tax |
$ 5,500 |
$ 3,085 |
Alere Inc. and Subsidiaries |
|||||||||||
Reconciliations of Gross Profit/Margin to Non-GAAP Adjusted Gross Profit/Margin |
|||||||||||
(in thousands) |
|||||||||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||||||||
Alere Consolidated |
March 31, 2013 |
December 31, 2013 |
March 31, 2014 |
||||||||
Net revenue |
$ 739,249 |
$ 772,326 |
$ 716,622 |
||||||||
Adjustment related to acquired |
|||||||||||
software license contracts |
643 |
470 |
419 |
||||||||
Non-GAAP adjusted net revenue |
739,892 |
772,796 |
717,041 |
||||||||
Cost of net revenue |
374,992 |
387,977 |
365,383 |
||||||||
Less adjustments: |
|||||||||||
Amortization of acquisition-related intangible assets |
19,170 |
17,656 |
16,636 |
||||||||
Stock-based compensation expense |
232 |
329 |
287 |
||||||||
Non-cash charge associated with acquired inventory |
461 |
624 |
- |
||||||||
Restructuring charges |
623 |
2,957 |
875 |
||||||||
Non-GAAP adjusted cost of net revenue |
354,506 |
366,411 |
347,585 |
||||||||
Non-GAAP adjusted gross profit/margin |
$ 385,386 |
52.1% |
$ 406,385 |
52.6% |
$ 369,456 |
51.5% |
|||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||||||||
Professional Diagnostics Segment |
March 31, 2013 |
December 31, 2013 |
March 31, 2014 |
||||||||
Net product sales and services revenue |
$ 578,628 |
$ 600,667 |
$ 561,333 |
||||||||
Adjustment related to acquired |
|||||||||||
software license contracts |
643 |
470 |
419 |
||||||||
Non-GAAP adjusted net product sales and services revenue |
579,271 |
601,137 |
561,752 |
||||||||
Cost of net revenue |
278,453 |
292,183 |
273,542 |
||||||||
Less adjustments: |
|||||||||||
Amortization of acquisition-related intangible assets |
17,399 |
16,005 |
15,136 |
||||||||
Stock-based compensation expense |
232 |
329 |
287 |
||||||||
Non-cash charge associated with acquired inventory |
461 |
624 |
- |
||||||||
Restructuring charges |
199 |
2,253 |
833 |
||||||||
Non-GAAP adjusted cost of net revenue |
260,162 |
272,972 |
257,286 |
||||||||
Non-GAAP adjusted gross profit/margin |
$ 319,109 |
55.1% |
$ 328,165 |
54.6% |
$ 304,466 |
54.2% |
|||||
Three Months Ended |
Three Months Ended |
Three Months Ended |
|||||||||
Health Information Solutions Segment |
March 31, 2013 |
December 31, 2013 |
March 31, 2014 |
||||||||
Net product sales and services revenue |
$ 134,207 |
$ 130,012 |
$ 123,668 |
||||||||
Cost of net revenue |
76,857 |
70,780 |
68,714 |
||||||||
Less adjustments: |
|||||||||||
Amortization of acquisition-related intangible assets |
1,482 |
1,440 |
1,413 |
||||||||
Restructuring charges |
424 |
704 |
42 |
||||||||
Non-GAAP adjusted cost of net revenue |
74,951 |
68,636 |
67,259 |
||||||||
Non-GAAP adjusted gross profit/margin |
$ 59,256 |
44.2% |
$ 61,376 |
47.2% |
$ 56,409 |
45.6% |
Alere Inc. and Subsidiaries |
|||
Reconciliation of Net Loss to Non-GAAP EBITDA |
|||
(in thousands) |
|||
Three Months Ended |
|||
March 31, 2014 |
|||
Net loss (1) |
$ (6,113) |
||
Adjustment related to acquired software license contracts |
419 |
||
Income tax benefit |
(9,917) |
||
Depreciation and amortization |
98,234 |
||
Interest, net |
51,659 |
||
Non-cash stock-based compensation expense |
5,704 |
||
Non-cash fair value adjustments to acquisition-related contingent consideration |
4,550 |
||
Non-GAAP EBITDA |
$ 144,536 |
||
(1) Net loss for the three months ended March 31, 2014 includes non-interest related restructuring charges of $7.2 million, $0.3 million of acquisition-related costs and $3.0 million of costs associated with potential business dispositions which have not been added back for purposes of computing Non-GAAP EBITDA. |
Reconciliation of Cash Flow from Operating Activities to Free Cash Flow |
||
(in thousands) |
||
Three Months Ended |
||
March 31, 2014 |
||
Cash flow from operating activities (GAAP) |
$ 105,908 |
|
Capital expenditures |
(27,540) |
|
Free cash flow |
$ 78,368 |
SOURCE Alere Inc.
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