Alere Inc. Announces First Quarter 2011 Results

WALTHAM, Mass., April 27, 2011 /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 March 31, 2011.

Financial results for the first quarter of 2011:

• Net revenue of $582.5 million for the first quarter of 2011, compared to $515.3 million for the first quarter of 2010.
• Product and services revenues from our Professional Diagnostics segment were $409.8 million in the first quarter of 2011, compared to $336.2 million in the first quarter of 2010. Recent professional diagnostics acquisitions contributed $30.8 million of incremental net revenue compared to the first quarter of 2010.
• North American influenza sales increased to $19.5 million for the first quarter of 2011, compared to $2.3 million for the first quarter of 2010.
• Excluding the impact of the change in North American influenza revenues, currency adjusted organic growth in our Professional Diagnostics segment was 6.9%.
• Adjusted cash-basis gross margins were 55.8% for the first quarter of 2011, compared to 57.0% for the first quarter of 2010 and 55.3% in the fourth quarter of 2010. Adjusted cash-basis gross margins from products and services in our Professional Diagnostics segment were 59.6% in the first quarter of 2011, compared to 60.1% in the fourth quarter of 2010. Adjusted cash-basis gross margins from our Health Management segment increased sequentially from 47.6% in the fourth quarter of 2010 to 49.0% in the first quarter of 2011.
• GAAP net income of $8.1 million attributable to common stockholders of Alere Inc. and respective net income per diluted common share of $0.09, compared to GAAP net income of $9.0 million attributable to common stockholders of Alere Inc. and respective net income per diluted common share of $0.11, for the first quarter of 2010.
• GAAP net income for the first quarter of 2010 included a gain of $19.6 million, net of costs to dispose ($12.0 million, net of tax), resulting from the disposition of our nutritionals business which was included in the first quarter of 2010 income from discontinued operations, or net income of $0.14 per common share.
• Adjusted cash-basis net income per diluted common share of $0.61 for the first quarter of 2011, compared to adjusted cash-basis net income per diluted common share from continuing operations of $0.64, for the first quarter of 2010.
• Adjusted free cash flow for the quarter was $58.2 million, reflecting adjusted cash flow from operations of $87.2 million, offset by capital expenditures of $28.9 million.

The Company's GAAP results for the first quarter of 2011 include amortization of $76.3 million, $6.4 million of restructuring charges, $5.8 million of stock-based compensation expense, $1.9 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, a $1.9 million foreign currency loss associated with the settlement of an acquisition-related contingent consideration obligation and $1.4 million of expense recorded for fair value adjustments to acquisition-related contingent consideration obligations. The Company's GAAP results for the first quarter of 2010 include amortization of $72.1 million, $8.0 million of restructuring charges, $7.6 million of stock-based compensation expense, a $2.8 million charge associated with the write-up to fair market value of inventory acquired in connection with the acquisition of Standard Diagnostics, Inc., $4.0 million of acquisition-related costs recorded in accordance with ASC 805, Business Combinations, $0.3 million of expense incurred in connection with the disposal of our nutritionals business, offset by $3.1 million of income recorded for fair value adjustments to acquisition-related contingent consideration obligations and a $1.9 million allocation of certain of the aforementioned charges to non-controlling stockholders. 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 income, which is a non-GAAP financial measure, to net income 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 8:30 a.m. (Eastern Time) today, April 27, 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 (800) 860-2442 (domestic) or (412) 858-4600 (international) and asking for Alere Inc. A webcast of the call can also be accessed via the Alere website at www.alere.com/ic, or directly through the following link: http://www.videonewswire.com/event.asp?id=78416.

A replay of the call will be available approximately four hours 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 450179. The replay will also be available via online webcast at http://www.videonewswire.com/event.asp?id=78416 or via the Alere website at www.alere.com/ic 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 (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 athttp://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.