WALTHAM, Mass., Nov. 8, 2012 /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 management, today announced its financial results for the quarter ended September 30, 2012.
Financial results for the third quarter of 2012:
- Net revenue of $691.4 million for the third quarter of 2012, compared to $585.8 million for the third quarter of 2011. Non-GAAP adjusted net revenue, which includes $0.9 million in estimated revenue related to acquired software license contracts not recognized for GAAP purposes for the third quarter of 2012 due to business combination accounting rules, was $692.3 million for the third quarter of 2012, compared to $585.8 million for the third quarter of 2011.
- Net loss of $9.2 million attributable to common stockholders of Alere Inc., and respective net loss per diluted common share of $0.11, for the third quarter of 2012, compared to net income of $234.2 million attributable to common stockholders of Alere Inc., and respective net income per diluted common share of $2.48, for the third quarter of 2011. Net income for the third quarter of 2011 included a gain of $288.9 million in connection with the formation of our joint venture with the Procter & Gamble Company.
- Non-GAAP adjusted net income per diluted common share of $0.43 for the third quarter of 2012, compared to non-GAAP adjusted net income per diluted common share of $0.67 for the third quarter of 2011.
- Net product and services revenue from our Professional Diagnostics segment was $528.8 million in the third quarter of 2012, compared to net product and services revenue of $426.3 million in the third quarter of 2011. Non-GAAP adjusted net product and services revenue from our Professional Diagnostics segment, which includes $0.9 million in estimated revenue related to acquired software license contracts not recognized for GAAP purposes for the third quarter of 2012 due to business combination accounting rules, was $529.7 million in the third quarter of 2012, compared to non-GAAP adjusted net product and services revenue of $426.3 million in the third quarter of 2011. Recent professional diagnostics acquisitions contributed $134.6 million of incremental net revenue compared to the third quarter of 2011.
- North American influenza sales decreased to $9.9 million for the third quarter of 2012, from $16.0 million for the third quarter of 2011.
- Excluding the impact of the change in North American influenza revenues and the impact on revenues of the FDA matters associated with our U.S. Alere Triage products, currency adjusted organic growth in our Professional Diagnostics segment was 1%.
- Net product and services revenue from our Health Management segment was $135.1 million in the third quarter of 2012, compared to $129.9 million in the third quarter of 2011 and $138.6 million in the second quarter of 2012. The increase in revenue from the third quarter of 2011 was related primarily to increased revenues from our home coagulation monitoring programs.
The Company's GAAP results for the third quarter of 2012 exclude $0.9 million of revenue associated with acquired software license contracts that are not recognized due to business combination accounting rules and include amortization of $83.1 million, $3.3 million of restructuring charges, $3.6 million of stock-based compensation expense, $0.8 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, and $1.3 million of amortization associated with fees paid for certain debt modifications and terminations, offset by $15.1 million of income recorded for fair value adjustments to acquisition-related contingent consideration. The Company's GAAP results for the third quarter of 2011 include amortization of $70.3 million, $3.4 million of restructuring charges, $4.3 million of stock-based compensation expense, $2.9 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, $1.3 million of amortization associated with fees paid for certain debt modifications and terminations, a $0.6 million fair value write-down in connection with an idle facility and a net unrealized foreign currency loss of $18.1 million associated with a bank account funded for the acquisition of Axis-Shield plc, offset by $3.8 million of income recorded for fair value adjustments to acquisition-related contingent consideration and a $288.9 million gain in connection with the formation of our joint venture with Procter & Gamble in May 2007. These amounts, net of tax, have been excluded from the non-GAAP adjusted net income per diluted common share attributable to Alere Inc. for the respective quarters.
Detailed reconciliations of the Company's non-GAAP adjusted operating income and non-GAAP adjusted net income available to common shareholders to operating income and net loss available to common shareholders under GAAP, as well as a discussion regarding these non-GAAP financial measures, is included in the schedules to this press release.
The Company will host a conference call beginning at 8:30 a.m. (Eastern Time) today, November 8, 2012, 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 information that has not been previously disclosed.
The conference call may be accessed by dialing (877) 270-2148 (domestic) or (412) 902-6510 (international) and asking for Alere Inc. A webcast of the call can also be accessed via the Alere web site at www.alere.com/investors, or directly through the following link: http://www.videonewswire.com/event.
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 10020552. The replay will also be available via online webcast at http://www.videonewswire.com/event or via the Alere web site at www.alere.com/investors 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 web site (http://www.alere.com/investors) under the Earnings Calls and Releases section shortly before the conference call begins and will continue to be available on this web site.
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 management, 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 cardiology, infectious disease, toxicology, diabetes, oncology and women's health. Alere is headquartered in Waltham, Massachusetts.
| Alere Inc. and Subsidiaries |
|||||
| Condensed Consolidated Statements of Operations |
|||||
| (in thousands, except per share amounts) |
|||||
| Three Months Ended September 30, |
|||||
| 2012 |
2011 |
||||
| Net product sales and services revenue |
$ 686,228 |
$ 580,520 |
|||
| License and royalty revenue |
5,188 |
5,249 |
|||
| Net revenue |
691,416 |
585,769 |
|||
| Cost of net revenue |
345,641 |
279,807 |
|||
| Gross profit |
345,775 |
305,962 |
|||
| Gross margin |
50% |
52% |
|||
| Operating expenses: |
|||||
| Research and development |
40,562 |
34,772 |
|||
| Selling, general and administrative |
266,481 |
226,271 |
|||
| Total operating expenses |
307,043 |
261,043 |
|||
| Operating income |
38,732 |
44,919 |
|||
| Interest and other income (expense), net |
(55,933) |
233,319 |
|||
| Income (loss) before provision (benefit) for income taxes |
(17,201) |
278,238 |
|||
| Provision (benefit) for income taxes |
(10,677) |
42,652 |
|||
| Income (loss) before equity earnings of unconsolidated entities, net of tax |
(6,524) |
235,586 |
|||
| Equity earnings of unconsolidated entities, net of tax |
3,007 |
4,118 |
|||
| Net income (loss) |
(3,517) |
239,704 |
|||
| Less: Net income attributable to non-controlling interests |
286 |
138 |
|||
| Net income (loss) attributable to Alere Inc. and Subsidiaries |
(3,803) |
239,566 |
|||
| Preferred stock dividends |
(5,352) |
(5,358) |
|||
| Net income (loss) available to common stockholders |
$ (9,155) |
$ 234,208 |
|||
| Basic net income (loss) per common share |
$ (0.11) |
$ 2.84 |
|||
| Diluted net income (loss) per common share |
$ (0.11) |
$ 2.48 |
|||
| Weighted average shares - basic |
80,792 |
82,486 |
|||
| Weighted average shares - diluted |
80,792 |
97,090 |
|||
| Alere Inc. and Subsidiaries |
|||||
| Condensed Consolidated Statements of Operations |
|||||
| (in thousands, except per share amounts) |
|||||
| Nine Months Ended September 30, |
|||||
| 2012 |
2011 |
||||
| Net product sales and services revenue |
$ 2,051,729 |
$ 1,717,695 |
|||
| License and royalty revenue |
11,333 |
17,723 |
|||
| Net revenue |
2,063,062 |
1,735,418 |
|||
| Cost of net revenue |
1,008,608 |
830,521 |
|||
| Gross profit |
1,054,454 |
904,897 |
|||
| Gross margin |
51% |
52% |
|||
| Operating expenses: |
|||||
| Research and development |
120,009 |
112,662 |
|||
| Selling, general and administrative |
826,301 |
700,257 |
|||
| Total operating expenses |
946,310 |
812,919 |
|||
| Operating income |
108,144 |
91,978 |
|||
| Interest and other income (expense), net |
(146,549) |
129,225 |
|||
| Income (loss) before benefit for income taxes |
(38,405) |
221,203 |
|||
| Benefit for income taxes |
(12,621) |
(4,414) |
|||
| Income (loss) before equity earnings of unconsolidated entities, net of tax |
(25,784) |
225,617 |
|||
| Equity earnings of unconsolidated entities, net of tax |
10,417 |
4,922 |
|||
| Net income (loss) |
(15,367) |
230,539 |
|||
| Less: Net income attributable to non-controlling interests |
137 |
160 |
|||
| Net income (loss) attributable to Alere Inc. and Subsidiaries |
(15,504) |
230,379 |
|||
| Preferred stock dividends |
(15,940) |
(16,682) |
|||
| Preferred stock repurchase |
- |
23,936 |
|||
| Net income (loss) available to common stockholders |
$ (31,444) |
$ 237,633 |
|||
| Basic net income (loss) per common share |
$ (0.39) |
$ 2.81 |
|||
| Diluted net income (loss) per common share |
$ (0.39) |
$ 2.56 |
|||
| Weighted average shares - basic |
80,492 |
84,508 |
|||
| Weighted average shares - diluted |
80,492 |
100,058 |
|||
| Alere Inc. and Subsidiaries |
|||
| Condensed Consolidated Balance Sheets |
|||
| (in thousands) |
|||
| September 30, |
December 31, |
||
| 2012 |
2011 |
||
| ASSETS |
|||
| CURRENT ASSETS: |
|||
| Cash and cash equivalents |
$ 302,254 |
$ 299,173 |
|
| Restricted cash |
3,216 |
8,987 |
|
| Marketable securities |
897 |
1,086 |
|
| Accounts receivable, net |
508,591 |
475,824 |
|
| Inventories, net |
332,512 |
320,269 |
|
| Prepaid expenses and other current assets |
153,249 |
188,388 |
|
| Total current assets |
1,300,719 |
1,293,727 |
|
| PROPERTY, PLANT AND EQUIPMENT, NET |
516,814 |
491,205 |
|
| GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
4,974,806 |
4,676,742 |
|
| DEFERRED FINANCING COSTS AND OTHER ASSETS, NET |
220,342 |
211,027 |
|
| Total assets |
$ 7,012,681 |
$ 6,672,701 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
| CURRENT LIABILITIES: |
|||
| Short-term debt and current portion of long-term debt |
$ 58,860 |
$ 73,415 |
|
| Other current liabilities |
588,722 |
551,037 |
|
| Total current liabilities |
647,582 |
624,452 |
|
| LONG-TERM LIABILITIES: |
|||
| Long-term debt, net of current portion |
3,541,290 |
3,280,080 |
|
| Deferred tax liability |
413,808 |
380,700 |
|
| Other long-term liabilities |
178,406 |
153,398 |
|
| Total long-term liabilities |
4,133,504 |
3,814,178 |
|
| Redeemable non-controlling interest |
- |
2,497 |
|
| TOTAL EQUITY |
2,231,595 |
2,231,574 |
|
| Total liabilities and equity |
$ 7,012,681 |
$ 6,672,701 |
|
| Alere Inc. and Subsidiaries |
|||
| Reconciliation to Non-GAAP Adjusted Operating Results |
|||
| (in thousands, except per share amounts) |
|||
| Three Months Ended September 30, |
|||
| 2012 |
2011 |
||
| Reconciliation to Non-GAAP Adjusted Operating Income (1) |
|||
| Operating income |
$ 38,732 |
$ 44,919 |
|
| Revenue related to acquired software license contracts |
905 |
- |
|
| Amortization of acquisition-related intangible assets |
82,867 |
70,121 |
|
| Restructuring charges |
3,239 |
3,129 |
|
| Stock-based compensation expense |
3,626 |
4,286 |
|
| Acquisition-related costs |
833 |
2,912 |
|
| Fair value adjustments to acquisition-related contingent consideration |
(15,145) |
(3,845) |
|
| Fair value write-down in connection with an idle facility |
- |
596 |
|
| Non-GAAP adjusted operating income |
$ 115,057 |
$ 122,118 |
|
| Three Months Ended September 30, |
|||
| 2012 |
2011 |
||
| Reconciliation to Non-GAAP Adjusted Net Income(1) |
|||
| Net income (loss) available to common shareholders |
$ (9,155) |
$ 234,208 |
|
| Revenue related to acquired software license contracts |
905 |
- |
|
| Amortization of acquisition-related intangible assets |
83,083 |
70,314 |
|
| Restructuring charges |
3,287 |
3,412 |
|
| Stock-based compensation expense |
3,626 |
4,286 |
|
| Acquisition-related costs |
833 |
2,912 |
|
| Fair value adjustments to acquisition-related contingent consideration |
(15,145) |
(3,845) |
|
| Gain in connection with the formation of a joint venture |
- |
(288,896) |
|
| Unrealized foreign currency loss associated with a bank account funded for the acquisition of Axis-Shield plc |
- |
18,050 |
|
| Fair value write-down in connection with an idle facility |
- |
596 |
|
| Amortization of fees paid for certain debt modifications and terminations |
1,320 |
1,320 |
|
| Income tax effects on items above |
(32,931) |
16,254 |
|
| Non-GAAP adjusted net income available to common shareholders |
$ 35,823 |
$ 58,611 |
|
| Net income (loss) per diluted common share |
$ (0.11) |
$ 2.48 |
|
| Non-GAAP adjusted net income per diluted common share |
$ 0.43 |
$ 0.67 |
|
| Weighted average shares - diluted |
80,792 |
97,090 |
|
| Non-GAAP adjusted weighted average shares - diluted |
84,299 |
97,090 |
|
| (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 |
|||
| Reconciliation to Non-GAAP Adjusted Operating Results |
|||
| (in thousands, except per share amounts) |
|||
| Nine Months Ended September 30, |
|||
| 2012 |
2011 |
||
| Reconciliation to Non-GAAP Adjusted Operating Income (1) |
|||
| Operating income |
$ 108,144 |
$ 91,978 |
|
| Revenue related to acquired software license contracts |
3,317 |
- |
|
| Amortization of acquisition-related intangible assets |
242,167 |
227,207 |
|
| Restructuring charges |
10,132 |
19,625 |
|
| Stock-based compensation expense |
11,868 |
16,275 |
|
| Acquisition-related costs |
6,094 |
6,191 |
|
| Fair value adjustments to acquisition-related contingent consideration |
(16,782) |
(9,684) |
|
| Non-cash charge associated with acquired inventory |
4,681 |
- |
|
| Fair value write-down in connection with an idle facility |
- |
596 |
|
| Expenses incurred in connection with the sale of our vitamin and nutritional supplements business |
- |
23 |
|
| Non-GAAP adjusted operating income |
$ 369,621 |
$ 352,211 |
|
| Nine Months Ended September 30, |
|||
| 2012 |
2011 |
||
| Reconciliation to Non-GAAP Adjusted Net Income(1) |
|||
| Net income (loss) available to common shareholders |
$ (31,444) |
$ 237,633 |
|
| Revenue related to acquired software license contracts |
3,317 |
- |
|
| Amortization of acquisition-related intangible assets |
242,849 |
227,798 |
|
| Restructuring charges |
10,290 |
20,365 |
|
| Stock-based compensation expense |
11,868 |
16,275 |
|
| Acquisition-related costs |
6,094 |
6,191 |
|
| Fair value adjustments to acquisition-related contingent consideration |
(16,782) |
(9,684) |
|
| Interest expense recorded in connection with fees paid for certain debt modifications and the termination of our senior secured credit facility and related interest rate swap agreement |
3,960 |
31,213 |
|
| Non-cash charge associated with acquired inventory |
4,681 |
- |
|
| Gain in connection with the formation of a joint venture |
- |
(288,896) |
|
| Unrealized foreign currency loss associated with a bank account funded for the acquisition of Axis-Shield plc |
- |
18,050 |
|
| Realized foreign currency loss associated with the settlement of an acquisition-related contingent consideration obligation |
- |
1,920 |
|
| Fair value write-down in connection with an idle facility |
- |
596 |
|
| Expenses incurred in connection with the sale of our vitamin and nutritional supplements business |
- |
23 |
|
| Non-cash income allocated to net income available to common stockholders as a result of repurchases of preferred shares |
- |
(23,936) |
|
| Income tax effects on items above |
(93,028) |
(82,183) |
|
| Non-GAAP adjusted net income available to common shareholders |
$ 141,805 |
$ 155,365 |
|
| Net income (loss) per diluted common share |
$ (0.39) |
$ 2.56 |
|
| Non-GAAP adjusted net income per diluted common share |
$ 1.70 |
$ 1.74 |
|
| Weighted average shares - diluted |
80,492 |
100,058 |
|
| Non-GAAP adjusted weighted average shares - diluted |
94,327 |
100,058 |
|
| (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 |
% Change |
||||||||||||
| Q3 2012 |
YTD 2012 |
Q3 2011 |
YTD 2011 |
Q3 12 v. Q3 11 |
YTD 12 v. YTD 11 |
|||||||||
| Cardiology |
$ 122,372 |
$ 386,795 |
$ 127,943 |
$ 390,652 |
-4% |
-1% |
||||||||
| Infectious disease |
136,561 |
425,398 |
142,639 |
405,559 |
-4% |
5% |
||||||||
| Toxicology |
156,074 |
437,736 |
93,497 |
267,834 |
67% |
63% |
||||||||
| Diabetes |
35,670 |
100,628 |
- |
- |
||||||||||
| Other (1) |
78,077 |
230,519 |
62,172 |
176,206 |
26% |
31% |
||||||||
| Professional diagnostics net product sales and services revenue (1) |
528,754 |
1,581,076 |
426,251 |
1,240,251 |
24% |
27% |
||||||||
| License and royalty revenue |
2,688 |
8,833 |
3,701 |
14,587 |
-27% |
-39% |
||||||||
| Professional diagnostics net revenue |
$ 531,442 |
$ 1,589,909 |
$ 429,952 |
$ 1,254,838 |
24% |
27% |
||||||||
| Health Management Segment |
% Change |
% Change |
||||||||||||
| Q3 2012 |
YTD 2012 |
Q3 2011 |
YTD 2011 |
Q3 12 v. Q3 11 |
YTD 12 v. YTD 11 |
|||||||||
| Disease and case management |
$ 57,383 |
$ 165,277 |
$ 59,441 |
$ 182,118 |
-3% |
-9% |
||||||||
| Wellness |
24,290 |
80,881 |
24,427 |
80,369 |
-1% |
1% |
||||||||
| Women's & children's health |
29,136 |
90,220 |
28,509 |
85,550 |
2% |
5% |
||||||||
| Patient self-testing services |
24,269 |
68,074 |
17,554 |
60,529 |
38% |
12% |
||||||||
| Health management net revenue |
$ 135,078 |
$ 404,452 |
$ 129,931 |
$ 408,566 |
4% |
-1% |
||||||||
| (1)Revenues are presented in accordance with Generally Accepted Accounting Principles and exclude an adjustment of $905 and $3,317 in revenue related to acquired software license contracts which were not recognized during the three and nine months ended September 30, 2012, respectively, due to business combination accounting rules. |
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SOURCE Alere Inc.
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