WALTHAM, Mass., Nov. 4, 2016 /PRNewswire/ -- Alere Inc. (NYSE: ALR), a global leader in rapid diagnostic tests, today announced that it has filed its Form 10-Q and reported financial results for the third quarter ended September 30, 2016.
Revenue for the third quarter of 2016 was $582 million, a 4% decrease compared to $604 million in the prior year period. Infectious disease revenue grew 11% or $19 million year-over-year with strength in Africa and Latin America, particularly in malaria and HIV product sales. This strong growth was offset by revenue declines of $15 million due to the divestiture of BBI in November 2015, $12 million in mail order diabetes and $7 million in Toxicology. Foreign currency had a negative impact of $4 million and organic growth was -0.7% during the third quarter of 2016.
Net income (loss) from continuing operations during the third quarter of 2016 was $22 million, or $0.19 per basic and diluted share, compared to $(2) million, or $(0.10) per basic and diluted share in the prior year period. On a non-GAAP basis, the Company reported non-GAAP adjusted EBITDA of $64 million in the third quarter of 2016, compared to $135 million in the prior year period. The year-over-year decrease was primarily driven by $41 million in merger and legal-related expenses, $12 million of investments in infrastructure and performance improvement initiatives and $5 million in acquisition costs.
Revenue (in millions)
License and Royalty
Certain amounts presented may not recalculate directly, due to rounding.
To supplement the financial measures prepared in accordance with U.S. GAAP, the Company uses non-GAAP adjusted EBITDA and organic growth, which are non-GAAP financial measures. The reconciliations of non-GAAP adjusted EBITDA to net income (loss) from continuing operations and organic growth to revenue, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, is shown in the table in this press release. The Company believes non-GAAP adjusted EBITDA and organic growth are useful to investors because these metrics are commonly used by investors to assess the unleveraged, pre-tax financial performance and operating results of ongoing business operations. The Company's management also uses non-GAAP adjusted EBITDA and organic growth because the Company's management also believes that these are useful measures to evaluate operating performance and cash flows of the Company based on operational factors. It should also be noted that not all companies calculate non-GAAP adjusted EBITDA and organic growth in the same manner and, accordingly, these measures presented in this press release may not be comparable to similar measures used by other companies.
As announced on February 1, 2016, Alere entered into a definitive agreement under which Abbott will acquire Alere for $56 per common share. Due to the pending transaction, Alere will no longer hold conference calls to discuss its quarterly financial results.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can identify these statements by forward-looking words such as "may," "could," "should," "would," "intend," "will," "expect," "anticipate," "believe," "estimate," "continue," "goal," "can" or similar words. A number of important factors could cause actual results of the Company and its subsidiaries to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, (i) the risk that the proposed merger with Abbott Laboratories ("Abbott") may not be completed in a timely manner or at all; (ii) the possibility that competing offers or acquisition proposals for Alere will be made; (iii) the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement and Plan of Merger (the "Merger Agreement") among Alere and Abbott pursuant to which Abbott will acquire Alere, including in circumstances which would require Alere to pay a termination fee or other expenses; (v) the effect of the announcement or pendency of the transactions contemplated by the Merger Agreement on Alere's ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; (vi) risks related to diverting management's attention from Alere's ongoing business operations; (vii) the risk that stockholder litigation in connection with the transactions contemplated by the Merger Agreement may result in significant costs of defense, indemnification and liability, (viii) the risk that Alere fails to file its future periodic reports on Form 10-K and Form 10-Q in a timely manner which could, among other things, lead to the acceleration of the maturity of certain of Alere's indebtedness; (ix) the possibility that any analysis of revenue recognition for future or past periods uncovers an error or misstatements in revenue recognition which require adjustment which may be material; or material weaknesses in the Company's internal controls over financial reporting; (x) risks relating to the ongoing investigations by the SEC and the United States Department of Justice; and (xii) the risk factors detailed in Part I, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (as filed with the SEC on August 8, 2016) and other risk factors identified herein or from time to time in our periodic filings with the SEC. Readers should carefully review these risk factors, and should not place undue reliance on our forward-looking statements.
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