Alere Reports First Quarter 2016 Financial Results

WALTHAM, Mass., Aug. 17, 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 its financial results for the first quarter ended March 31, 2016.  

Revenue for the first quarter of 2016 was $578 million, a 6% decrease compared to $613 million in the prior year period. The year-over-year decrease in revenue was primarily due to the negative impact of $17 million in foreign currency exchange, a $14 million decrease in BBI revenue, which was divested in November 2015, and a $6 million decrease in pain management revenue. These revenue decreases were partially offset by increased Alere i sales and the acquisition of U.S. Diagnostics. Global influenza sales were $27 million during the first quarter of 2016, including U.S. influenza sales of $20 million, of which $12 million was Alere i sales. Organic growth during the first quarter of 2016 was -1.0%. Excluding U.S. influenza and pain management, organic growth was 0.2%.

Net income (loss) from continuing operations during the first quarter of 2016 was $(10) million, or $(0.18) per basic and diluted share, compared to $(6) million, or $(0.14) per basic and diluted share in the prior year period. On a Non-GAAP basis, the Company reported Non-GAAP adjusted EBITDA of $109 million in the first quarter of 2016, compared to $135 million in the prior year period. The year-over-year decline was driven primarily by incremental expenses related to the pending merger with Abbott, higher legal expenses associated with ongoing government investigations, and lower margins due to primarily to product sales mix and volume.

"Our first quarter 2016 earnings were in line with our budget, which anticipated a weaker than average 2015-2016 flu season," said Namal Nawana, CEO of Alere.  "Despite the weaker respiratory season, we're pleased to report that Alere i continued to grow its market presence, generating record revenue during the first quarter of 2016. Based on our current business outlook, we expect improved organic revenue growth in the second quarter and second half of 2016."

The Company is seeking an amendment to its secured credit agreement that, if approved, will provide an extension of the date by which the Company will file its second quarter 2016 financial statements under the secured credit agreement to September 13, 2016.  The Company currently plans to file its second quarter 2016 Form 10-Q by September 13, 2016, and expects to pay approximately $3 million in fees to obtain the amendment.

Non-GAAP Information
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.

Conference Call
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. For example, forward-looking statements include statements regarding: the Company's expectation of improved organic revenue growth in the second quarter and second half of 2016, the Company's expectation that it will enter into an amendment to its secured credit agreement that will provide an extension of the date by which the Company must file its June 30, 2016 financial statements to September 13, 2016, the anticipated fees in connection with such amendment and the Company plans to file its second quarter 2016 Form 10-Q by September 13, 2016. 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 failure to receive, on a timely basis or otherwise, the required approval of the proposed merger with Abbott by Alere's stockholders; (iii) the possibility that competing offers or acquisition proposals for Alere will be made; (iv) 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);

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