Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ALERE INC. | b85048e8vk.htm |
Exhibit 99.1
Contact:
|
Doug Guarino | Director of Corporate Relations | 781-647-3900 | |||
| Jon Russell | Vice President of Finance |
ALERE INC. ANNOUNCES
FOURTH QUARTER 2010 RESULTS
WALTHAM, MA...February 17, 2011...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 December 31,
2010.
Financial results for the fourth quarter of 2010:
| • | Net revenue of $578.5 million for the fourth quarter of 2010, compared to $546.2 million for the fourth quarter of 2009. | ||
| • | Product and services revenues from our Professional Diagnostics segment were $401.4 million in the fourth quarter of 2010 compared to $362.0 million in the fourth quarter of 2009. Recent professional diagnostics acquisitions contributed $43.8 million of incremental net revenue compared to the fourth quarter of 2009. | ||
| • | North American influenza sales decreased to $8.9 million for the fourth quarter of 2010, compared to $39.7 million for the fourth quarter of 2009. | ||
| • | Excluding the impact of the change in North American influenza revenues, currency adjusted organic growth in our Professional Diagnostics segment was 8.8%. This growth rate benefited from the termination of a distribution relationship for certain of our cardiology products in the fourth quarter of 2009, which reduced 2009 revenues by approximately $7.0 million. Further, excluding this impact, the adjusted organic growth rate in the Professional Diagnostics segment was 6.5%. | ||
| • | Adjusted gross margins were 55.3% for the quarter compared to 58.3% for the fourth quarter of 2009. Adjusted gross margins from product and services in our Professional Diagnostics segment increased sequentially from 59.9% in the third quarter of 2010 to 60.1% in the fourth quarter. Adjusted gross margins in our Health Management segment decreased sequentially from 51.8% in the third quarter of 2010 to 47.6% in the fourth quarter. | ||
| • | Adjusted free cash flow for the quarter was $78.4 million, reflecting adjusted cash flow from operations of $106.2 million, offset by capital expenditures of $27.8 million. | ||
| • | GAAP net loss of $1.0 billion attributable to common stockholders of Alere Inc. and respective net loss per common share of $12.24, compared to GAAP net loss of $3.1 million attributable to common stockholders of Alere Inc. and respective net loss per common share of $0.04, for the fourth |
| quarter of 2009. Fourth quarter 2010 GAAP net loss includes a $1.0 billion non-cash charge associated with the impairment of goodwill in our Health Management segment. | |||
| • | Adjusted cash basis net income per diluted common share from continuing operations of $0.71, compared to adjusted cash basis net income per diluted common share from continuing operations of $0.67, for the fourth quarter of 2009. |
The Company’s GAAP results for the fourth quarter of 2010 include amortization of $78.7
million, $6.9 million of stock-based compensation expense, $1.6 million of restructuring
charges, $1.4 million of acquisition-related costs recorded in accordance with ASC 805, Business
Combinations, a $1.0 billion non-cash charge associated with the impairment of goodwill in our
Health Management segment, a $60.1 million compensation charge associated with our acquisition
of minority shares, a $0.7 million write-down in the carrying value of a facility and $4.1
million of expense recorded for fair value adjustments to acquisition-related contingent
consideration obligations, offset by a $0.3 million adjustment associated with the write-up to
fair market value of inventory acquired in connection with acquisitions and a $0.3 million, net
of tax, allocation of certain of the aforementioned charges to non-controlling stockholders.
The Company’s GAAP results for the fourth quarter of 2009 include amortization of $71.9 million,
$6.9 million of restructuring charges, $7.9 million of stock-based compensation expense, a $1.4
million charge associated with the write-up to fair market value of inventory acquired in
connection with the acquisition of Concateno plc, $4.3 million of acquisition-related costs
recorded in accordance with our adoption of ASC 805, Business Combinations, $1.8 million of
expense incurred in connection with the disposal of our Nutritionals business, $1.8 million of
expense recorded for fair value adjustments to acquisition-related contingent consideration
obligations and a $3.2 million write-down in the carrying value of a facility. These amounts,
net of tax, have been excluded from the adjusted cash basis net income per diluted common share
attributable to Alere Inc. for the respective quarters.
A detailed reconciliation of the Company’s adjusted cash basis net loss, which is a non-GAAP
financial measure, to net loss under GAAP, as well as a discussion regarding this non-GAAP
financial measure, is included in the schedules to this press release.
The Company will host a conference call beginning at 8:00 a.m. (Eastern Time) today, February
17, 2011, 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 706-679-1656 (domestic and international), an
access code is not required, or via a link on the Alere website at www.alere.com/ic. It is
also available via link at http://us.meeting-stream.com/alere. An archive of
the call will be available from the same link approximately two hours after the conclusion of the
live call and will be accessible for 60 days. 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 (www.alere.com/ic) 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 website 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
infectious disease, cardiology, oncology, drugs of abuse and women’s health. Alere is
headquartered in Waltham, Massachusetts.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities
laws, including statements regarding our expected full year 2010 adjusted cash basis net income per
diluted share from continuing operations. Such forward-looking statements are estimates reflecting
management’s best judgment based upon current information and involve a number of risks and
uncertainties. Actual results and the timing of certain events could differ materially from those
projected or contemplated by the forward-looking statements due to numerous factors, including
without limitation, changes in global economic conditions or in the global financial markets,
including the credit markets, which impact our plans and operations and those of our suppliers and
customers; our exposure to changes in interest rates and foreign currency exchange rates; our
ability to successfully develop and commercialize products; the market acceptance of our products;
continued acceptance of health management services by payors, providers and patients; our ability
to develop enhanced health management programs through the integrated use of innovative diagnostic
and monitoring devices and to recognize the expected benefits of this strategy; the effects of
legislative changes, including US healthcare reform legislation, and the content and timing of
decisions by regulatory authorities both in the United States and abroad; the effect of pending and
future legal proceedings on our financial performance and the risks and uncertainties described in
our periodic reports filed with the Securities and Exchange Commission, including our Form 10-K for
the year ended December 31, 2009, as well as in our Quarterly Reports on Form 10-Q. We undertake no
obligation to update any forward-looking statements contained herein.
Source: Alere Inc.
Alere Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)
| Three Months Ended December 31, 2010 | Three Months Ended December 31, 2009 | |||||||||||||||||||||||
| Non-GAAP | Non-GAAP | |||||||||||||||||||||||
| Adjusted | Adjusted | |||||||||||||||||||||||
| Non-GAAP | Cash | Non-GAAP | Cash | |||||||||||||||||||||
| GAAP | Adjustments | Basis (a) | GAAP | Adjustments | Basis (a) | |||||||||||||||||||
Net product sales and services revenue |
$ | 573,747 | $ | — | $ | 573,747 | $ | 537,684 | $ | — | $ | 537,684 | ||||||||||||
License and royalty revenue |
4,707 | — | 4,707 | 8,487 | — | 8,487 | ||||||||||||||||||
Net revenue |
578,454 | 578,454 | 546,171 | — | 546,171 | |||||||||||||||||||
Cost of net revenue |
275,368 | (17,077 | )(b)(c)(d)(e) | 258,291 | 244,592 | (16,876 | )(b)(c)(d)(f) | 227,716 | ||||||||||||||||
Gross profit |
303,086 | 17,077 | 320,163 | 301,579 | 16,876 | 318,455 | ||||||||||||||||||
Gross margin |
52 | % | 55 | % | 55 | % | 58 | % | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Research and development |
37,091 | (2,973 | )(b)(d) | 34,118 | 32,037 | (2,887 | )(b)(c)(d) | 29,150 | ||||||||||||||||
Selling, general and administrative |
292,870 | (133,250 | )(b)(c)(d)(h)(i)(j)(l) | 159,620 | 234,422 | (75,845 | )(b)(c)(d)(i)(j)(l) | 158,577 | ||||||||||||||||
Goodwill impairment charge |
1,006,357 | (1,006,357 | )(g) | — | — | — | — | |||||||||||||||||
Total operating expenses |
1,336,318 | (1,142,580 | ) | 193,738 | 266,459 | (78,732 | ) | 187,727 | ||||||||||||||||
Operating income |
(1,033,232 | ) | 1,159,657 | 126,425 | 35,120 | 95,608 | 130,728 | |||||||||||||||||
Interest and other income (expense), net |
(30,457 | ) | (87 | )(c) | (30,544 | ) | (34,728 | ) | 196 | (c) | (34,532 | ) | ||||||||||||
(Loss) income from continuing operations before (benefit) provision for income taxes |
(1,063,689 | ) | 1,159,570 | 95,881 | 392 | 95,804 | 96,196 | |||||||||||||||||
(Benefit) provision for income taxes |
(28,967 | ) | 55,064 | (n) | 26,097 | 2,726 | 31,271 | (n) | 33,997 | |||||||||||||||
(Loss) income from continuing operations before equity earnings of unconsolidated entities, net of tax |
(1,034,722 | ) | 1,104,506 | 69,784 | (2,334 | ) | 64,533 | 62,199 | ||||||||||||||||
Equity earnings of unconsolidated entities, net of tax |
2,371 | 38 | (b)(c) | 2,409 | 2,087 | 1,629 | (b)(c) | 3,716 | ||||||||||||||||
(Loss) income from continuing operations |
(1,032,351 | ) | 1,104,544 | 72,193 | (247 | ) | 66,162 | 65,915 | ||||||||||||||||
(Loss) income from discontinued operations, net of tax |
(516 | ) | 11 | (m) | (505 | ) | 3,034 | 1,129 | (b)(m) | 4,163 | ||||||||||||||
Net (loss) income |
(1,032,867 | ) | 1,104,555 | 71,688 | 2,787 | 67,291 | 70,078 | |||||||||||||||||
Less: Net income attributable to non-controlling interests, net of tax |
251 | 251 | (k) | 502 | — | — | — | |||||||||||||||||
Net (loss) income attributable to Alere Inc. and Subsidiaries |
$ | (1,033,118 | ) | $ | 1,104,304 | $ | 71,186 | $ | 2,787 | $ | 67,291 | $ | 70,078 | |||||||||||
Preferred stock dividends |
$ | (6,234 | ) | $ | (6,234 | ) | $ | (5,916 | ) | $ | (5,916 | ) | ||||||||||||
Net (loss) income available to common stockholders |
$ | (1,039,352 | ) | $ | 64,952 | $ | (3,129 | ) | $ | 64,162 | ||||||||||||||
Basic net (loss) income per common share attributable to Alere Inc. and Subsidiaries: |
||||||||||||||||||||||||
Basic (loss) income per common share from continuing operations |
$ | (12.23 | ) | $ | 0.77 | $ | (0.08 | ) | $ | 0.72 | ||||||||||||||
Basic (loss) income per common share from discontinued operations |
$ | (0.01 | ) | $ | (0.01 | ) | $ | 0.04 | $ | 0.05 | ||||||||||||||
Basic net (loss) income per common share |
$ | (12.24 | ) | $ | 0.76 | $ | (0.04 | ) | $ | 0.77 | ||||||||||||||
Diluted net (loss) income per common share attributable to Alere Inc. and Subsidiaries: |
||||||||||||||||||||||||
Diluted (loss) income per common share from continuing operations |
$ | (12.23 | )(o) | $ | 0.71 | (p) | $ | (0.08 | )(o) | $ | 0.67 | (q) | ||||||||||||
Diluted (loss) income per common share from discontinued operations |
$ | (0.01 | )(o) | $ | (0.01 | )(p) | $ | 0.04 | (o) | $ | 0.04 | (q) | ||||||||||||
Diluted net (loss) income per common share |
$ | (12.24 | )(o) | $ | 0.71 | (p) | $ | (0.04 | )(o) | $ | 0.71 | (q) | ||||||||||||
Weighted average common shares — basic |
84,924 | 84,924 | 83,211 | 83,211 | ||||||||||||||||||||
Weighted average common shares — diluted |
84,924 | (o) | 101,670 | (p) | 83,211 | (o) | 100,431 | (q) | ||||||||||||||||
| (a) | In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or 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 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 net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that “net income or loss on an adjusted cash basis” 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 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, “net income or loss on an adjusted cash basis” presented in this press release may not be comparable to similar measures used by other companies. | |
| (b) | Amortization expense of $78.7 million and $71.9 million in the fourth quarter of 2010 and 2009 GAAP results, respectively, including $16.3 million and $11.6 million charged to cost of sales, $1.3 million and $1.2 million charged to research and development, $60.9 million and $58.8 million charged to selling, general and administrative, with $0.2 million and $0.3 million charged through equity earnings of unconsolidated entities, net of tax, during each of the respective quarters. Amortization associated with discontinued operations amounted to $0.1 million ($33.0 thousand, net of tax) during the fourth quarter of 2009. (See also footnote k below.) | |
| (c) | Restructuring charge associated with the decision to close facilities of $1.6 million and $6.9 million in the fourth quarter of 2010 and 2009 GAAP results, respectively. The $1.6 million charge for the three months ended December 31, 2010 included $0.6 million charged to cost of sales, $1.3 million charged to selling, general and administrative expense, a net recovery of $0.1 million recorded to interest and other income (expense), net and a net recovery of $0.2 million recorded through equity earnings of unconsolidated entities, net of tax. The $6.9 million charge for the three months ended December 31, 2009 included $3.4 million charged to cost of sales, $0.2 million charged to research and development, $1.8 million charged to selling, general and administrative expense, $0.2 million charged to interest expense and $1.3 million charged through equity earnings of unconsolidated entities, net of tax. | |
| (d) | Compensation costs of $6.9 million and $7.9 million associated with stock-based compensation expense for the fourth quarter of 2010 and 2009 GAAP results, respectively, including $0.5 million and $0.5 million charged to cost of sales, $1.7 million and $1.5 million charged to research and development and $4.7 million and $5.9 million charged to selling, general and administrative, in the respective periods. | |
| (e) | A net recovery in the amount of $0.3 million during the fourth quarter of 2010, relating to inventory write-ups recorded in connection with acquisitions. (See also footnote k below.) | |
| (f) | A write-off in the amount of $1.4 million during the fourth quarter of 2009, relating to inventory write-ups recorded in connection with acquisitions. | |
| (g) | A goodwill impairment charge during the fourth quarter of 2010 in the amount of $1.0 billion related to our health management reporting unit and business segment. | |
| (h) | A $60.1 million compensation charge associated with our acquisition of minority shares of Standard Diagnostics, Inc. during the fourth quarter of 2010. | |
| (i) | Acquisition-related costs in the amount of $1.4 million and $4.3 million in the fourth quarter of 2010 and 2009 GAAP results, respectively, recorded in connection with ASC 805, Business Combinations. | |
| (j) | $4.1 million and $1.8 million of expense in the fourth quarter of 2010 and 2009 GAAP results, respectively, recorded in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805, Business Combinations. | |
| (k) | Amortization expense of $0.3 million ($0.3 million, net of tax) attributable to operating results of non-controlling interests. | |
| (l) | A $0.7 million and $3.2 million fair value write-down in the fourth quarter of 2010 and 2009, respectively, recorded in connection with an idle facility. | |
| (m) | Expenses of $18.0 thousand ($11.0 thousand, net of tax) and $1.8 million ($1.1 million, net of tax) in the fourth quarter of 2010 and 2009, respectively, incurred in connection with the sale of our vitamins and nutritional supplements business. | |
| (n) | Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f) (g), (h), (i), (j) and (l). | |
| (o) | For the three months ended December 31, 2010 and 2009, potential dilutive shares were not used in the calculation of diluted net loss per common share under GAAP because inclusion thereof would be antidilutive. | |
| (p) | Included in the weighted average diluted common shares for the calculation of net income per common share for the three months ended December 31, 2010, on an adjusted cash basis, were dilutive shares consisting of 1,188,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,893,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock, 115,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and 112,000 potentially issuable shares of common stock associated with contingent consideration arrangements. The diluted net income per common share calculation for the three months ended December 31, 2010, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $0.7 million, the add back of $6.2 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $24.0 thousand resulting in net income available to common stockholders of $71.8 million for the three months ended December 31, 2010. | |
| (q) | Included in the weighted average diluted common shares for the calculation of net income per common share for the three months ended December 31, 2009, on an adjusted cash basis, are dilutive shares consisting of 1,922,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,286,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock and 573,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business. The diluted net income per common share calculation for the three months ended December 31, 2009, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $0.7 million, the add back of $5.9 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.1 million resulting in net income available to common stockholders of $70.9 million for the three months ended December 31, 2009. |
Alere Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)
| Year Ended December 31, 2010 | Year Ended December 31, 2009 | |||||||||||||||||||||||
| Non-GAAP | Non-GAAP | |||||||||||||||||||||||
| Adjusted | Adjusted | |||||||||||||||||||||||
| Non-GAAP | Cash | Non-GAAP | Cash | |||||||||||||||||||||
| GAAP | Adjustments | Basis (a) | GAAP | Adjustments | Basis (a) | |||||||||||||||||||
Net product sales and services revenue |
$ | 2,134,588 | $ | — | $ | 2,134,588 | $ | 1,893,566 | $ | — | $ | 1,893,566 | ||||||||||||
License and royalty revenue |
20,759 | — | 20,759 | 29,075 | — | 29,075 | ||||||||||||||||||
Net revenue |
2,155,347 | — | 2,155,347 | 1,922,641 | — | 1,922,641 | ||||||||||||||||||
Cost of net revenue |
1,020,760 | (75,404 | )(b)(c)(d)(e) | 945,356 | 868,419 | (55,605 | )(b)(c)(d)(f) | 812,814 | ||||||||||||||||
Gross profit |
1,134,587 | 75,404 | 1,209,991 | 1,054,222 | 55,605 | 1,109,827 | ||||||||||||||||||
Gross margin |
53 | % | 56 | % | 55 | % | 58 | % | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Research and development |
133,278 | (12,370 | )(b)(c)(d) | 120,908 | 112,848 | (10,680 | )(b)(c)(d) | 102,168 | ||||||||||||||||
Selling, general and administrative |
946,041 | (333,265 | )(b)(c)(d)(g)(i)(j)(q) | 612,776 | 798,679 | (258,302 | )(b)(c)(d)(g)(j)(q) | 540,377 | ||||||||||||||||
Goodwill impairment charge |
1,006,357 | (1,006,357 | )(h) | — | — | — | — | |||||||||||||||||
Gain on disposition |
— | — | — | (3,355 | ) | 3,355 | (m) | — | ||||||||||||||||
Operating income |
(951,089 | ) | 1,427,396 | 476,307 | 146,050 | 321,232 | 467,282 | |||||||||||||||||
Interest and other income (expense), net |
(116,697 | ) | (3,042 | )(c)(g) | (119,739 | ) | (105,802 | ) | (35 | )(c)(n)(o)(p) | (105,837 | ) | ||||||||||||
Income (loss) from continuing operations before provision (benefit) for income taxes |
(1,067,786 | ) | 1,424,354 | 356,568 | 40,248 | 321,197 | 361,445 | |||||||||||||||||
Provision (benefit) for income taxes |
(29,931 | ) | 144,214 | (r) | 114,283 | 15,627 | 110,398 | (r) | 126,025 | |||||||||||||||
Income (loss) from continuing operations before equity earnings of unconsolidated
entities, net of tax |
(1,037,855 | ) | 1,280,140 | 242,285 | 24,621 | 210,799 | 235,420 | |||||||||||||||||
Equity earnings of unconsolidated entities, net of tax |
10,566 | 3,750 | (b)(c) | 14,316 | 7,626 | 6,226 | (b)(c) | 13,852 | ||||||||||||||||
Income (loss) from continuing operations |
(1,027,289 | ) | 1,283,890 | 256,601 | 32,247 | 217,025 | 249,272 | |||||||||||||||||
Income (loss) from discontinued operations, net of tax |
11,397 | 191 | (k) | 11,588 | 1,934 | 1,226 | (k)(b) | 3,160 | ||||||||||||||||
Net income (loss) |
(1,015,892 | ) | 1,284,081 | 268,189 | 34,181 | 218,251 | 252,432 | |||||||||||||||||
Less: Net income attributable to non-controlling interests, net of tax |
1,418 | 3,714 | (l) | 5,132 | 465 | — | 465 | |||||||||||||||||
Net income (loss) attributable to Alere Inc. and Subsidiaries |
$ | (1,017,310 | ) | $ | 1,280,367 | $ | 263,057 | $ | 33,716 | $ | 218,251 | $ | 251,967 | |||||||||||
Preferred stock dividends |
$ | (24,235 | ) | $ | (24,235 | ) | $ | (22,972 | ) | $ | (22,972 | ) | ||||||||||||
Net income (loss) available to common stockholders |
$ | (1,041,545 | ) | $ | 238,822 | $ | 10,744 | $ | 228,995 | |||||||||||||||
Basic net income (loss) per common share attributable to Alere Inc. and Subsidiaries: |
||||||||||||||||||||||||
Basic income (loss) per common share from continuing operations |
$ | (12.47 | ) | $ | 2.69 | $ | 0.11 | $ | 2.80 | |||||||||||||||
Basic income (loss) per common share from discontinued operations |
$ | 0.14 | $ | 0.14 | $ | 0.02 | $ | 0.04 | ||||||||||||||||
Basic net income (loss) per common share |
$ | (12.33 | ) | $ | 2.83 | $ | 0.13 | $ | 2.84 | |||||||||||||||
Diluted net income (loss) per common share attributable to Alere Inc. and Subsidiaries: |
||||||||||||||||||||||||
Diluted income (loss) per common share from continuing operations |
$ | (12.47 | )(s) | $ | 2.51 | (u) | $ | 0.11 | (t) | $ | 2.60 | (v) | ||||||||||||
Diluted income (loss) per common share from discontinued operations |
$ | 0.14 | (s) | $ | 0.11 | (u) | $ | 0.02 | (t) | $ | 0.03 | (v) | ||||||||||||
Diluted net income (loss) per common share |
$ | (12.33 | )(s) | $ | 2.63 | (u) | $ | 0.13 | (t) | $ | 2.63 | (v) | ||||||||||||
Weighted average common shares — basic |
84,445 | 84,445 | 80,572 | 80,572 | ||||||||||||||||||||
Weighted average common shares — diluted |
84,445 | (s) | 101,284 | (u) | 81,967 | (t) | 96,845 | (v) | ||||||||||||||||
| (a) | In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or 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 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 net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that “net income or loss on an adjusted cash basis” 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 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, “net income or loss on an adjusted cash basis” presented in this press release may not be comparable to similar measures used by other companies. | |
| (b) | Amortization expense of $299.4 million and $257.2 million for the year 2010 and 2009 GAAP results, respectively, including $63.0 million and $42.1 million charged to cost of sales, $4.8 million and $4.4 million charged to research and development, $230.7 million and $209.6 million charged to selling, general and administrative, with $0.9 million and $0.9 million charged through equity earnings of unconsolidated entities, net of tax during each of the respective periods. Amortization associated with discontinued operations amounted to $0.2 million ($0.2 million, net of tax) for the year 2009. (See also footnote l below.) | |
| (c) | Restructuring charge associated with the decision to close facilities of $15.1 million and $23.4 million for the year 2010 and 2009 GAAP results, respectively. The $15.1 million charge for the year ended December 31, 2010 included $3.9 million charged to cost of sales, $0.5 million charged to research and development, $10.9 million charged to selling, general and administrative expense, a net recovery of $3.1 million recorded to interest and other income (expense), net and $3.0 million charged through equity earnings of unconsolidated entities, net of tax. The $23.4 million charge for the year ended December 31, 2009 included $9.5 million charged to cost of sales, $1.1 million charged to research and development, $6.8 million charged to selling, general and administrative expense, $0.7 million charged to interest expense and $5.3 million charged through equity earnings of unconsolidated entities, net of tax. | |
| (d) | Compensation costs of $29.9 million and $28.2 million associated with stock-based compensation expense for the year 2010 and 2009 GAAP results, respectively, including $1.9 million and $2.0 million charged to cost of sales, $7.1 million and $5.2 million charged to research and development and $20.9 million and $21.0 million charged to selling, general and administrative. | |
| (e) | A write-off in the amount of $6.6 million during the year ended December 31, 2010, relating to inventory write-ups recorded in connection with acquisitions. (See also footnote l below.) | |
| (f) | A write-off in the amount of $2.0 million during the year ended December 31, 2009, relating to an inventory write-up recorded in connection with an acquisition during the third quarter of 2009. | |
| (g) | Acquisition-related costs in the amount of $8.3 million and $15.9 million for the year 2010 and 2009 GAAP results, respectively, recorded in connection with ASC 805, Business Combinations. The $8.3 million of acquisition-related costs recorded during 2010 included $8.2 million charged to selling, general and administrative and $0.1 million charged to interest expense. | |
| (h) | A goodwill impairment charge during the fourth quarter of 2010 in the amount of $1.0 billion related to our health management reporting unit and business segment. | |
| (i) | A $60.1 million compensation charge associated with our acquisition of minority shares of Standard Diagnostics, Inc. during the fourth quarter of 2010. | |
| (j) | $1.8 million of expense for both the year 2010 and 2009 GAAP results, respectively, recorded in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805, Business Combinations. | |
| (k) | Expenses of $0.3 million ($0.2 million, net of tax) and $1.8 million ($1.1 million, net of tax) for the year 2010 and 2009 GAAP results, respectively, incurred in connection with the sale of our vitamins and nutritional supplements business. | |
| (l) | Amortization expense of $3.2 million ($2.4 million, net of tax) and a write-off in the amount of $1.7 million ($1.3 million, net of tax) relating to inventory write-ups attributable to operating results of non-controlling interests. | |
| (m) | A $3.4 million gain associated with management’s decision to dispose of our Diamics, Inc. operations. | |
| (n) | A $2.9 million net realized foreign currency gain associated with restricted cash established in connection with the acquisition of Concateno plc. | |
| (o) | A $1.9 million compensation-related charge recorded in connection with the acquisition of Concateno plc. | |
| (p) | A $0.3 million loss recorded in connection with the deferred payment of a portion of the ACON Second Territory Business purchase price consideration to be paid with our common stock. | |
| (q) | A $0.7 million and $3.2 million fair value write-down in the fourth quarter of 2010 and 2009, respectively, recorded in connection with an idle facility. | |
| (r) | Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f), (g), (h), (i), (j), (m), (n), (o), (p) and (q). | |
| (s) | For the year ended December 31, 2010, potential dilutive shares were not used in the calculation of diluted net income per common share under GAAP because inclusion thereof would be antidilutive. | |
| (t) | Included in the weighted average diluted common shares for the calculation of net income per common share on a GAAP basis for the year ended December 31, 2009, are dilutive shares consisting of 1,395,000 common stock equivalent shares from the potential exercise of stock options and warrants. Potential dilutive shares consisting of 3,426,000 common stock equivalent shares from the potential conversion of convertible debt securities, 386,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and potential dilutive shares consisting of 11,066,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock were not included in the calculation of net income per common share on a GAAP basis for the year ended December 31, 2009 because inclusion thereof would be antidilutive. | |
| (u) | Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2010, on an adjusted cash basis, were dilutive shares consisting of 1,412,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,654,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock, 306,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and 28,000 potentially issuable shares of common stock associated with contingent consideration arrangements. The diluted net income per common share calculation for the year ended December 31, 2010, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $2.8 million, the add back of $24.2 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.3 million resulting in net income available to common stockholders of $266.0 million for the year ended December 31, 2010. | |
| (v) | Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2009, on an adjusted cash basis, are dilutive shares consisting of 1,395,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,426,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,066,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock and 386,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business. The diluted net income per common share calculation for the year ended December 31, 2009, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $2.8 million, the add back of $23.0 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.4 million resulting in net income available to common stockholders of $255.1 million for the year ended December 31, 2009. |
Alere Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in $000s)
Condensed Consolidated Balance Sheets
(in $000s)
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 401,306 | $ | 492,773 | ||||
Restricted cash |
2,581 | 2,424 | ||||||
Marketable securities |
2,094 | 947 | ||||||
Accounts receivable, net |
397,148 | 354,453 | ||||||
Inventories, net |
257,720 | 221,539 | ||||||
Prepaid expenses and other current assets |
133,408 | 140,674 | ||||||
Assets held for sale |
— | 54,148 | ||||||
Total current assets |
1,194,257 | 1,266,958 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET |
390,510 | 324,388 | ||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
4,567,064 | 5,193,429 | ||||||
DEFERRED FINANCING COSTS AND OTHER ASSETS, NET |
178,543 | 159,217 | ||||||
Total assets |
$ | 6,330,374 | $ | 6,943,992 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Current portion of notes payable |
$ | 19,017 | $ | 19,869 | ||||
Liabilities related to assets held for sale |
— | 11,558 | ||||||
Current portion of deferred gain on joint venture |
288,378 | — | ||||||
Other current liabilities |
475,463 | 406,587 | ||||||
Total current liabilities |
782,858 | 438,014 | ||||||
LONG-TERM LIABILITIES: |
||||||||
Notes payable, net of current portion |
2,379,968 | 2,129,455 | ||||||
Deferred tax liability |
420,166 | 442,049 | ||||||
Other long-term liabilities |
169,656 | 405,585 | ||||||
Total long-term liabilities |
2,969,790 | 2,977,089 | ||||||
TOTAL EQUITY |
2,577,726 | 3,528,889 | ||||||
Total liabilities and equity |
$ | 6,330,374 | $ | 6,943,992 | ||||