WALTHAM, Mass., April 24 /PRNewswire-FirstCall/ -- Inverness Medical Innovations, Inc. , a global leader in rapid point-of-care diagnostic products, today announced its financial results for the quarter ended March 31, 2008.
In the first quarter of 2008, the Company recorded net revenue of $372.2 million compared to net revenue of $159.0 million in the first quarter of 2007. The revenue increase was primarily due to increased product and service revenue in our Professional Diagnostics segment which grew from $83.8 million in the first quarter of 2007 to $259.6 million in 2008, principally as a result of businesses acquired which contributed $152.4 million of the increased product and service revenue. Also contributing to the net revenue increase was product and service revenue provided by our newly formed Health Management segment totaling $45.2 million in the first quarter of 2008. In addition, total royalty and license revenue grew from $5.2 million in the first quarter of 2007 to $10.9 million in 2008, principally as a result of businesses acquired which contributed $4.4 million of the increased royalty and license revenue. As a result of the formation of our Consumer Diagnostics joint venture with The Procter & Gamble Company, we no longer consolidate the third party revenues earned on sales of consumer products sold through the joint venture and instead recognized product sales to the joint venture of $28.9 million in the first quarter of 2008 compared to pre-joint venture formation revenues of $49.9 million in the first quarter of 2007. Despite the $21.0 million of decreased revenues included in our consolidated results, underlying Consumer Diagnostics revenues recorded by the joint venture increased to $54.7 million in the first quarter of 2008 compared to $49.9 million in the first quarter of 2007.
For the first quarter of 2008, the net loss prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") was $4.2 million, or $0.05 per diluted common share, compared to net income of $6.3 million, or $0.14 per diluted common share, for the first quarter of 2007. The Company reported adjusted cash basis net income of $39.1 million, or $0.48 per diluted common share, for the first quarter of 2008, compared to adjusted cash basis net income of $14.3 million, or $0.31 per diluted common share, for the first quarter of 2007.
The Company's GAAP results for the first quarter of 2008 include amortization of $40.0 million, $16.3 million of restructuring charges, $5.6 million of stock-based compensation expense, a $1.7 million charge related to the write-up to fair market value of inventory acquired in connection with the acquisitions of Panbio Limited and BBI Holdings Plc, and a net realized foreign currency loss of $1.7 million associated with a cash escrow established in connection with the BBI acquisition. GAAP results for the first quarter of 2007 include amortization of $6.5 million, a $0.6 million restructuring charge, $1.6 million of non-cash stock-based compensation expense and $0.2 million of deferred financing costs related to the repayment of outstanding debt. These amounts, net of tax, have been excluded from the adjusted cash basis net income per common share 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 loss under GAAP, as well as a discussion regarding this non-GAAP financial measure, is included in the schedules to this press release.
In connection with the review of the current quarter's results, two errors affecting the Company's previously reported fourth quarter 2007 results were noted as requiring correction. The first error was the understatement of the fourth quarter 2007 income tax provision by $1.8 million for a non-cash charge related to the write off of in-process research and development expense recorded during the quarter. The second error was a $2.4 million understatement of non-cash amortization expense to sales and marketing related to a 2007 acquisition. The Company will file the required 8-K relating to the restatement, as well as an amendment to its Form 10-K to correct its previously reported 2007 results.
The Company will host a conference call beginning at 10:00 a.m. (Eastern Time) today, April 24, 2008, 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 can be accessed by dialing 973-582-2700 (domestic and international), an access code is not required, or via a link on the Inverness website at http://www.invernessmedical.com. It is also available via link at http://audioevent.mshow.com/343993/ using Real Player or Windows Media. An on-demand webcast of the call will be available at the Inverness website (www.invernessmedical.com/News.cfm) two hours after the end of the call and will be accessible for 30 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 same website beginning shortly before the conference call and will continue to be available on this website for 30 days.
For more information about Inverness Medical Innovations, please visit our website at http://www.invernessmedical.com.
By developing new capabilities in near-patient diagnosis, monitoring and health management, Inverness Medical Innovations enables individuals to take charge of improving their health and quality of life. A global leader in rapid point-of-care diagnostics, Inverness' products, as well as its new product development efforts, focus on infectious disease, cardiology, oncology, drugs of abuse and women's health. Inverness is headquartered in Waltham, Massachusetts.
CONTACT: Doug Guarino, Director of Corporate Relations, or Jon Russell,
Vice President of Finance, both of Inverness Medical Innovations, Inc.,
+1-781-647-3900
Web site: http://www.invernessmedical.com/
http://www.invernessmedical.com/News.cfm/
