WALTHAM, Mass., May 22, 2017 /PRNewswire/ -- Alere Inc.
(NYSE: ALR), a global leader in rapid diagnostic tests, today
announced certain preliminary unaudited financial information for
the fourth quarter and full fiscal year ended December 31, 2016 and the first quarter of 2017
ended March 31, 2017. The Company
also provided an update on its expected filing of its 2016 Annual
Report on Form 10-K and filed its preliminary proxy statement with
respect to the pending merger with Abbott Laboratories.
The following amounts are preliminary, unaudited and are subject
to change and reflect the impact of the Restatement (as defined
below) adjustments identified to date, as described further
below:
Preliminary Unaudited Full Year 2016 Results
- Revenue for the full year 2016 is expected to be $2.38 billion, which would be a decrease from
$2.45 billion in full year 2015.
- GAAP loss from continuing operations is expected to be
$(140) million, or $(1.86) per diluted share, for the full year
2016.
- Non-GAAP organic growth for the full year 2016 is expected to
be +0.3% or +2.5% excluding Arriva*.
- Non-GAAP adjusted EBITDA is expected to be $344 million for the full year 2016, including
approximately $135 million in
merger-related costs, audit and legal fees related to ongoing
investigations and legal settlements, as detailed in the
Supplemental Financial Information table.
*During the period from
November 4, 2016 to December 31, 2016, the Company furnished
$9.8 million of Arriva products and
services that were subject to the CMS revocation to customers but
did not recognize any revenue for such products and services
because they were not eligible for reimbursement by CMS at the time
the Company furnished them.
Preliminary Unaudited Fourth Quarter 2016 Results
- Total revenue is expected to be $597
million, which would be a decrease from $617 million in the prior year period.
- Reported GAAP loss from continuing operations during the fourth
quarter of 2016 is expected to be $(117)
million, or $(1.41) per
diluted share.
- Non-GAAP organic growth during the fourth quarter of 2016 is
expected to be -0.9%, or +3.7% excluding Arriva.
- Non-GAAP adjusted EBITDA is expected to be $79 million in the fourth quarter of 2016, which
includes approximately $50 million in
merger-related costs, audit and legal fees related to ongoing
investigations and legal settlements, as detailed in the
Supplemental Financial Information table.
Preliminary Unaudited First Quarter 2017 Results
- Total revenue is expected to be $588
million.
- Non-GAAP organic growth is expected to be +0.9%, or +6.8%
excluding Arriva.
Update on Annual Report 2016 Form 10-K
As previously
disclosed, the Company was delayed in filing its Annual Report on
Form 10-K for the fiscal year ended December
31, 2016 due to the Company's review of certain revenue
transactions in the Company's South
Korea and Japan locations.
Based on this review, the Company determined that it had
incorrectly recorded certain revenue transactions at its Standard
Diagnostics subsidiary in South
Korea. Specifically, the Company failed to correctly apply
U.S. GAAP regarding the timing of revenue recognition primarily
relating to transactions in which the Company recognized revenue
prior to full satisfaction of all contractual criteria for title
and risk of loss passing to the customer as required by U.S. GAAP.
The principal cause of these misstatements in the timing of revenue
recognition was inappropriate conduct at the Company's Standard
Diagnostics subsidiary. As also previously disclosed, as a
result of this review, the Company will be restating certain
previously issued financial statements (the "Restatement").
The Company has completed its review of the above matters at its
South Korea and Japan locations and, consistent with its prior
expectation, the Company expects the following adjustments to
previously reported financial information as set forth in the
tables below. In addition, the Restatement reflects corrections for
certain other misstatements that the Company identified in 2017
relating to 2014, 2015 and 2016. These adjustments relate to (a)
misstatements in the classification of certain amounts between
current assets, noncurrent assets and current liabilities, (b)
misstatements in the classification of certain legal-related
charges between non-operating expenses and operating expenses, and
(c) misstatements to general and administrative expenses to correct
the timing of bad debt expenses and fair value adjustments related
to contingent consideration liabilities from acquisitions. These
adjustments are incorporated into the tables below.
Annual Restatement Impact
(in millions)
|
Nine Months
Ended September
30, 2016
|
Twelve Months
Ended December
31, 2015
|
Twelve Months
Ended December
31, 2014
|
Twelve Months
Ended December
31, 2013
|
|
|
|
|
|
Revenue
|
$
8
|
$
(8)
|
$
2
|
$
(1)
|
Pre-Tax
Income
|
$
(1)
|
$
(4)
|
$
0
|
$
1
|
Net Income
|
$
(0)
|
$
(3)
|
$
0
|
$
0
|
|
|
|
|
|
|
|
|
|
|
2015 Quarterly Restatement
Impact (in millions)
|
Three Months
Ended March 31,
2015
|
Three Months
Ended June 30,
2015
|
Three Months
Ended September
30, 2015
|
Three Months
Ended December
31, 2015
|
|
|
|
|
|
Revenue
|
$
(3)
|
$
(1)
|
$
1
|
$
(6)
|
Pre-Tax
Income
|
$
(1)
|
$
(0)
|
$
1
|
$
(4)
|
Net
Income
|
$
(0)
|
$
(0)
|
$
1
|
$
(3)
|
|
|
|
|
|
|
|
|
|
|
2016 Quarterly
Restatement Impact (in
millions)
|
Three Months
Ended March 31,
2016
|
Three Months
Ended June 30,
2016
|
Three Months
Ended September
30, 2016
|
|
|
|
|
|
|
Revenue
|
$
9
|
$
(1)
|
$
(0)
|
|
Pre-Tax
Income
|
$
4
|
$
2
|
$
(6)
|
|
Net
Income
|
$
4
|
$
2
|
$
(6)
|
|
|
|
|
|
|
NOTE: The ($6)
million pre-tax income impact for the Three Months Ended September
30, 2016 includes $4.4M of expense related to fair value
adjustments for contingent consideration.
|
In addition, as the Company disclosed on May 11, 2017, it is in the process of reviewing
sales transactions to a limited number of distributors from select
selling entities during fiscal years 2012 to 2016 to determine if
revenue recognition timing was appropriate according to U.S. GAAP
with respect to collectability being reasonably assured at the time
of sale. This review relates to the timing of the recognition of
the revenue and not to the existence or measurement of revenue for
these transactions and the selling entities being reviewed have
historical collection rates in excess of 99.5%.
The Company's goal is to complete its review and file its 2016
Annual Report on Form 10-K by no later than June 15, 2017.
The review necessary to complete the 2016 Annual Report on Form
10-K is not complete. The time necessary to review the
foregoing matter may take longer than the Company expects, which
would cause a further delay in the filing of the Annual Report
beyond the projected filing date noted above. In the course of this
ongoing review of revenue recognition and the completion of the
review necessary to file the Annual Report, the Company may
identify other matters that require additional time to review,
which other matters may be similar or different to those identified
above. In addition, any of these other items may require the
Company to further adjust previously reported financial
information, and such adjustments may be material in amount.
Information Regarding Preliminary Unaudited
Results
The financial results presented in this release
are preliminary and may change. These preliminary results include
calculations that have been prepared by Alere management and have
not been reviewed or audited by our independent registered public
accounting firm. There can be no assurance that Alere's actual
financial results will not materially differ from the preliminary
unaudited financial data presented herein. Actual results may
differ for a number of reasons, including the impact of any changes
that may be required as a result of the ongoing review by Alere of
revenue recognition and other adjustments that may be made in
connection with the finalization of the fiscal year 2016 financial
statements and the finalization of the financial statements for the
three months ended March 31, 2017 (which may also impact
the financial results for any other period presented herein).
In addition, the preliminary unaudited financial data
presented for the periods ended December 31,
2016 and March 31, 2017 should not be viewed as a
substitute for the full financial information prepared in
accordance with U.S. GAAP, including footnotes, which is expected
to be filed with the SEC as soon as practicable. Please see
the "2016 Form 10-K Update" and "Cautionary Statement Regarding
Forward-Looking Statements" sections of this press release for
further information.
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
the performance 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.
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 "preliminary", "may," "could,"
"should," "would," "intend," "will," "expect," "anticipate,"
"believe," "estimate," "can," "continue" or similar words. A number
of important factors could cause actual results of Alere 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); (v) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Agreement and Plan of Merger,
as amended (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; (vi) 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;
(vii) risks related to diverting management's attention from
Alere's ongoing business operations; (viii) 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, (ix) the risk that
the previously announced review of certain aspects of revenue
recognition is not completed in a timely manner or the scope of
such review expands, (x) the risk that the failure by Alere to file
its Form 10-K for the fiscal year ended December 31, 2016 and Form 10-Q for the fiscal
quarter ended in March 31, 2017 in a
timely manner could lead to the acceleration of the maturity of
certain of Alere's indebtedness, (xi) the possibility that the
previously announced review of certain aspects of revenue
recognition uncovers an additional error or errors in revenue
recognition or other financial information which require additional
adjustments which may be material, or material weaknesses in the
Company's internal controls over financial reporting, (xii) the
risk that the Company experiences an acceleration of amounts due
under its senior secured credit facility due to the restatement,
any circumstances described in Alere's Current Report on Form 8-K
as filed on April 17, 2017, this
Current Report on Form 8-K or the failure to timely file the Annual
Report on Form 10-K for 2016 and Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31,
2017 (or that the Company could be required to obtain a
waiver under such credit agreement), (xiii) risks relating to the
ongoing investigations by the United States Securities and Exchange
Commission (the "SEC") and the United States Department of Justice,
(xiv) the risk that these or other risk factors impact the expected
timing of the filing of the Form 10-K for the fiscal year ended
December 31, 2016 and Form 10-Q for
the fiscal quarter ended in March 31,
2017, and (xv) 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. These forward-looking statements are
based on information, plans and estimates at the date of this
communication. The Company undertakes no obligation to update any
forward-looking statements to reflect changes in underlying
assumptions or factors, new information, future events or other
changes.
About Alere
Alere believes that when diagnosing and
monitoring health conditions, Knowing now matters.™
Alere delivers reliable and actionable information by providing
rapid diagnostic tests, enhancing clinical and economic healthcare
outcomes globally. Headquartered in Waltham, Mass., Alere focuses on rapid
diagnostics for cardiometabolic disease, infectious disease and
toxicology. For more information on Alere, please visit
www.alere.com.
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Condensed Consolidated Statements of
Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Net product sales and
services revenue
|
|
$
592,553
|
|
$
613,850
|
|
$
2,364,337
|
|
$
2,438,638
|
License and royalty
revenue
|
|
4,256
|
|
3,286
|
|
11,998
|
|
16,977
|
|
Net
revenue
|
|
596,809
|
|
617,136
|
|
2,376,335
|
|
2,455,615
|
Cost of net
revenue
|
|
325,648
|
|
368,586
|
|
1,286,468
|
|
1,347,315
|
|
Gross
profit
|
|
271,161
|
|
248,550
|
|
1,089,867
|
|
1,108,300
|
|
Gross
margin
|
|
45%
|
|
40%
|
|
46%
|
|
45%
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
25,184
|
|
28,228
|
|
112,122
|
|
119,453
|
|
Selling, general and
administrative
|
|
264,283
|
|
229,877
|
|
969,683
|
|
808,595
|
|
Impairment and (gain)
loss on disposition, net
|
|
-
|
|
8,132
|
|
(3,810)
|
|
50,540
|
|
Operating
income
|
|
(18,306)
|
|
(17,687)
|
|
11,872
|
|
129,712
|
Interest and other
income (expense), net
|
|
(32,137)
|
|
(60,482)
|
|
(167,122)
|
|
(214,254)
|
|
Loss from continuing
operations before provision (benefit) for income taxes
|
|
(50,443)
|
|
(78,169)
|
|
(155,250)
|
|
(84,542)
|
Provision (benefit)
for income taxes
|
|
83,762
|
|
(51,146)
|
|
35,376
|
|
(53,564)
|
|
Income (loss) from
continuing operations before equity earnings of unconsolidated
entities, net of
tax
|
|
(134,205)
|
|
(27,023)
|
|
(190,626)
|
|
(30,978)
|
Equity earnings of
unconsolidated entities, net of tax
|
|
17,200
|
|
5,210
|
|
50,505
|
|
15,530
|
|
Income (loss) from
continuing operations
|
|
(117,005)
|
|
(21,813)
|
|
(140,121)
|
|
(15,448)
|
|
Income from
discontinued operations, net of tax
|
|
-
|
|
2,736
|
|
-
|
|
219,513
|
Net
income
|
|
(117,005)
|
|
(19,077)
|
|
(140,121)
|
|
204,065
|
|
Less: Net income
attributable to non-controlling interests
|
|
(103)
|
|
(5)
|
|
350
|
|
381
|
Net income
attributable to Alere Inc. and Subsidiaries
|
|
(116,902)
|
|
(19,072)
|
|
(140,471)
|
|
203,684
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
(5,367)
|
|
(5,367)
|
|
(21,350)
|
|
(21,293)
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
(122,269)
|
|
$
(24,439)
|
|
$
(161,821)
|
|
$
182,391
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
per common share:
|
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
|
$
(1.41)
|
|
$
(0.31)
|
|
$
(1.86)
|
|
$
(0.43)
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
|
|
2.57
|
|
Basic and diluted
net income per common share
|
|
$
(1.41)
|
|
$
(0.31)
|
|
$
(1.86)
|
|
$
2.14
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per common share:
|
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
|
$
(1.41)
|
|
$
(0.31)
|
|
$
(1.86)
|
|
$
(0.43)
|
|
Income from
discontinued operations
|
|
-
|
|
|
|
-
|
|
2.57
|
|
Diluted net income
per common share
|
|
$
(1.41)
|
|
$
(0.31)
|
|
$
(1.86)
|
|
$
2.14
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - basic
|
|
86,955
|
|
85,953
|
|
86,796
|
|
85,420
|
Weighted average
shares - diluted
|
|
86,955
|
|
85,953
|
|
86,796
|
|
85,420
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Condensed Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents1
|
$
567,215
|
|
$
502,200
|
Restricted
cash
|
51,550
|
|
5,694
|
Marketable
securities
|
76
|
|
164
|
Accounts receivable,
net
|
413,535
|
|
436,924
|
Inventories,
net
|
308,920
|
|
350,949
|
Prepaid expenses and
other current assets
|
118,607
|
|
114,514
|
Assets held for
sale
|
-
|
|
4,165
|
Total current
assets
|
1,459,903
|
|
1,414,610
|
|
|
|
|
Property, Plant and
Equipment, net
|
441,190
|
|
446,039
|
Goodwill and other
intangible assets, net
|
3,592,107
|
|
3,862,306
|
Restricted Cash-
non-current
|
2,171
|
|
43,228
|
Other non-current
assets
|
152,908
|
|
138,640
|
Assets held for sale
- non-current
|
-
|
|
13,337
|
Total
assets
|
$
5,648,279
|
|
$
5,918,160
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Short-term debt and
current portions of long-term debt and capital lease
obligations
|
$
85,434
|
|
$
203,954
|
Liabilities related
to assets held for sale
|
-
|
|
363
|
Other current
liabilities
|
593,574
|
|
518,389
|
Total current
liabilities
|
679,008
|
|
722,706
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Long-term debt and
capital lease obligations, net of current portions
|
2,865,426
|
|
2,838,347
|
Deferred tax
liabilities
|
119,098
|
|
147,618
|
Other long-term
liabilities
|
155,992
|
|
154,193
|
Liabilities related
to assets held for sale - non-current
|
-
|
|
-
|
Total long-term
liabilities
|
3,140,516
|
|
3,140,158
|
|
|
|
|
TOTAL
EQUITY
|
1,828,755
|
|
2,055,296
|
Total liabilities
and equity
|
$
5,648,279
|
|
$
5,918,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) As of December 31,
2016 the Company held $567M of cash and cash equivalents, $172M was
held by domestic subsidiaries and $395M was held by foreign
entities.
|
Alere
Inc. and Subsidiaries
|
Preliminary
Unaudited Selected Consolidated Revenues
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
%
Change
|
|
|
|
2016
|
|
2015
|
|
|
2016 v.
2015
|
|
Professional
diagnostics segment (1)
|
|
|
|
|
|
|
|
Cardiometabolic
|
$
143,569
|
|
$
180,163
|
|
|
-20%
|
|
Infectious
disease
|
211,509
|
|
188,609
|
|
|
12%
|
|
Toxicology
|
147,785
|
|
149,540
|
|
|
-1%
|
|
Other
|
38,020
|
|
44,927
|
|
|
-15%
|
|
|
Total professional
diagnostics segment
|
540,883
|
|
563,239
|
|
|
-4%
|
|
Consumer
diagnostics segment (1)
|
17,569
|
|
19,768
|
|
|
-11%
|
|
Other
Non-reportable
|
34,101
|
|
30,843
|
|
|
11%
|
|
License and
royalty revenue
|
4,256
|
|
3,286
|
|
|
30%
|
|
|
Net
revenue
|
$
596,809
|
|
$
617,136
|
|
|
-3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
|
%
Change
|
|
|
|
2016
|
|
2015
|
|
|
2016 v.
2015
|
|
Professional
diagnostics segment (1)
|
|
|
|
|
|
|
|
Cardiometabolic
|
$
622,468
|
|
$
703,553
|
|
|
-12%
|
|
Infectious
disease
|
776,153
|
|
710,178
|
|
|
9%
|
|
Toxicology
|
608,635
|
|
618,362
|
|
|
-2%
|
|
Other
|
140,426
|
|
192,321
|
|
|
-27%
|
|
|
Total professional
diagnostics segment
|
2,147,682
|
|
2,224,414
|
|
|
-3%
|
|
Consumer
diagnostics segment (1)
|
74,152
|
|
85,128
|
|
|
-13%
|
|
Other
Non-reportable
|
142,503
|
|
129,096
|
|
|
10%
|
|
License and
royalty revenue
|
11,998
|
|
16,977
|
|
|
-29%
|
|
|
Net
revenue
|
$
2,376,335
|
|
$
2,455,615
|
|
|
-3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Revenues have been restated for the impact of restatement
adjustments made during the preparation of our consolidated
financial statements for
2016.
|
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Reconciliation of Net Income (Loss) to Non-GAAP
EBITDA
|
(in
thousands)
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
2016
|
|
2015
|
|
|
|
|
Net Income (loss)
(1)
|
$
(117,005)
|
|
$
(19,077)
|
Less: Income
from discontinued operations, net of tax
|
-
|
|
2,736
|
Loss from
continuing operations
|
(117,005)
|
|
(21,813)
|
|
|
|
|
Adjustment related to
acquired software license contracts
|
-
|
|
-
|
Income tax provision
(benefit)
|
83,762
|
|
(51,146)
|
Depreciation and
amortization
|
71,467
|
|
75,719
|
Interest,
net
|
42,342
|
|
57,954
|
Non-cash stock-based
compensation expense
|
10,681
|
|
6,795
|
Non-cash fair value
adjustments to acquisition-related contingent
consideration
|
(1,419)
|
|
(5,703)
|
Impairment and (gain)
loss on dispositions, net
|
(11,152)
|
|
8,132
|
Non-cash INRatio
product recall expenses
|
-
|
|
21,100
|
Other
|
-
|
|
(40)
|
Non-GAAP Adjusted
EBITDA
|
$
78,676
|
|
$
90,998
|
|
|
|
|
(1) Net income (loss)
for the three months ended December 31, 2015 includes $16.7
million of cash costs associated with the voluntary withdrawal of
InRatio product, restructuring charges of $4.3 million, $2.8
million of costs associated with business dispositions, $0.1
million of acquisition-related costs which have not been added back
for purposes of computing Non-GAAP Adjusted EBITDA. The three
months ended December 31, 2016 includes $22.1 million of Abbott
integration costs, $14.3 million for a legal settlement accrual,
$12.8 million of charges related to governmental investigations,
non-interest related restructuring charges of $10.1 million,
$0.5 million of cash costs associated with the voluntary withdrawal
of InRatio product, and $0.1 million of acquisition-related costs
which have not been added back for purposes of computing Non-GAAP
Adjusted EBITDA.
|
|
Twelve Months
Ended December 31,
|
|
2016
|
|
2015
|
|
|
|
|
Net Income (loss)
(1)
|
$
(140,121)
|
|
$
204,065
|
Less: Income
from discontinued operations, net of tax
|
-
|
|
219,513
|
Loss from
continuing operations
|
(140,121)
|
|
(15,448)
|
|
|
|
|
Adjustment related to
acquired software license contracts
|
-
|
|
877
|
Income tax provision
(benefit)
|
35,376
|
|
(53,564)
|
Depreciation and
amortization
|
285,884
|
|
309,684
|
Interest,
net
|
168,320
|
|
212,551
|
Non-cash stock-based
compensation expense
|
41,796
|
|
26,391
|
Non-cash fair value
adjustments to acquisition-related contingent
consideration
|
(13,308)
|
|
(57,613)
|
Impairment and (gain)
loss on dispositions, net
|
(33,683)
|
|
50,540
|
Non-cash INRatio
product recall expenses
|
-
|
|
21,100
|
Other
|
-
|
|
622
|
Non-GAAP Adjusted
EBITDA
|
$
344,264
|
|
$
495,139
|
|
|
|
|
(1)Net
income (loss) for the twelve months ended December 31, 2015
includes $16.7 million of cash costs associated with the voluntary
withdrawal of InRatio product, restructuring charges of $15.6
million, $9.3 million of costs associated with business
dispositions, and $0.5 million of acquisition-related costs which
have not been added back for purposes of computing Non-GAAP
Adjusted EBITDA. The twelve months ended December 31, 2016
includes $60.3 million of Abbott integration costs, restructuring
charges of $37.9 million, $35.2 million for a legal settlement
accrual, $35.6 million of charges related to governmental
investigations, $6.0 million of acquisition-related costs, $1.8
million of cash costs associated with the withdrawal of InRatio
product and $1.0 million of costs associated with business
dispositions which have not been added back for purposes of
computing Non-GAAP Adjusted EBITDA.
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Reconciliation of Non-GAAP Organic Revenue
Growth
|
(in
thousands)
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
%
Change
|
|
2016
|
2015
|
|
2016 v.
2015
|
|
|
|
|
|
Net
revenue
|
$
596,809
|
$
617,136
|
|
-3.3%
|
Impact of foreign
currency exchange
|
7,830
|
-
|
|
|
Impact of
acquisitions & dispositions
|
(1,453)
|
(8,234)
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue
|
$
603,186
|
$
608,902
|
|
-0.9%
|
|
|
|
|
|
Arriva
Revenue
|
(11,622)
|
(38,592)
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue (excluding Arriva)
|
$
591,564
|
$
570,310
|
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
%
Change
|
|
2016
|
2015
|
|
2016 v.
2015
|
|
|
|
|
|
Net
revenue
|
$
2,376,335
|
$
2,455,615
|
|
-3.2%
|
Impact of foreign
currency exchange
|
40,543
|
-
|
|
|
Impact of
acquisitions & dispositions
|
(13,984)
|
(60,414)
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue
|
$
2,402,894
|
$
2,395,201
|
|
0.3%
|
|
|
|
|
|
Arriva
Revenue
|
(99,887)
|
(148,538)
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue (excluding Arriva)
|
$
2,303,007
|
$
2,246,663
|
|
2.5%
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Consolidated Statements of Cash
Flows
|
(in
thousands)
|
|
|
|
|
|
|
|
For The Year Ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net income
(loss)
|
$
(140,121)
|
|
$
204,065
|
|
$
(33,123)
|
Income from
discontinued operations, net of tax
|
—
|
|
219,513
|
|
138,318
|
Income (loss) from
continuing operations
|
(140,121)
|
|
(15,448)
|
|
(171,441)
|
Adjustments to
reconcile net income (loss) from continuing operations to net cash
provided
by operating activities:
|
|
|
|
|
|
Non-cash interest
expense, including amortization of original issue discounts and
deferred financing costs
|
13,369
|
|
12,831
|
|
16,233
|
Depreciation and
amortization
|
285,608
|
|
309,264
|
|
336,029
|
Non-cash stock-based
compensation expense
|
41,796
|
|
26,391
|
|
12,452
|
Tax benefit related
to discontinued operations retained by Alere Inc.
|
—
|
|
—
|
|
9,845
|
Impairment of
inventory
|
2,667
|
|
15,597
|
|
3,124
|
Impairment of
long-lived assets
|
1,792
|
|
3,708
|
|
7,019
|
Loss on sale of fixed
assets
|
3,551
|
|
3,925
|
|
6,545
|
Equity earnings of
unconsolidated entities, net of tax
|
(50,505)
|
|
(15,530)
|
|
(17,509)
|
Deferred income
taxes
|
(36,010)
|
|
(99,389)
|
|
12,254
|
Loss on
extinguishment of debt
|
—
|
|
19,886
|
|
—
|
Impairment and net
(gain) loss on business disposition
|
(3,810)
|
|
50,540
|
|
7,742
|
Other non-cash
items
|
(463)
|
|
28,782
|
|
4,965
|
Non-cash change in
fair value of contingent consideration
|
(13,309)
|
|
(59,871)
|
|
7,677
|
Changes in assets and
liabilities, net of acquisitions:
|
|
|
|
|
|
Accounts receivable,
net
|
26,698
|
|
(6,680)
|
|
(4,264)
|
Inventories,
net
|
(13,655)
|
|
(63,935)
|
|
(67,532)
|
Prepaid expenses and
other current assets
|
(19,921)
|
|
(5,295)
|
|
(51,998)
|
Accounts
payable
|
4,362
|
|
(10,783)
|
|
47,851
|
Accrued expenses and
other current liabilities
|
54,342
|
|
22,643
|
|
37,886
|
Other non-current
assets and liabilities
|
23,329
|
|
(3,357)
|
|
13,254
|
Cash paid for
contingent consideration
|
(430)
|
|
(6,315)
|
|
(22,077)
|
Net cash provided by
continuing operations
|
179,290
|
|
206,964
|
|
188,055
|
Net cash provided by
discontinued operations
|
—
|
|
318
|
|
43,468
|
Net cash provided
by operating activities
|
179,290
|
|
207,282
|
|
231,523
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Increase in
restricted cash
|
(4,721)
|
|
(13,715)
|
|
(5,446)
|
Purchases of
property, plant and equipment
|
(67,694)
|
|
(90,778)
|
|
(100,562)
|
Proceeds from sale of
property, plant and equipment
|
1,428
|
|
2,099
|
|
1,486
|
Cash received from
business dispositions, net of cash divested
|
21,470
|
|
675,823
|
|
45,076
|
Cash paid for
business acquisitions, net of cash acquired
|
(5,958)
|
|
(60,135)
|
|
(75)
|
Cash received from
investments
|
—
|
|
—
|
|
198
|
Cash paid for equity
investment
|
(184)
|
|
—
|
|
—
|
Proceeds from sale of
equity investment
|
40,751
|
|
—
|
|
8,546
|
Cash received from
sales of marketable securities
|
87
|
|
92
|
|
580
|
Cash received from
equity method investments
|
16,989
|
|
26,136
|
|
980
|
Decrease (increase)
in other assets
|
460
|
|
(1,794)
|
|
986
|
Net cash provided by
(used in) continuing operations
|
2,628
|
|
537,728
|
|
(48,231)
|
Net cash used in
discontinued operations
|
—
|
|
(209)
|
|
(8,972)
|
Net cash provided
by (used in) investing activities
|
2,628
|
|
537,519
|
|
(57,203)
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
Cash paid for
financing costs
|
(29,187)
|
|
(16,188)
|
|
(1,528)
|
Cash paid for
contingent consideration
|
(680)
|
|
(14,223)
|
|
(32,902)
|
Cash paid for
dividends
|
(21,292)
|
|
(21,293)
|
|
(21,293)
|
Proceeds from
issuance of common stock, net of issuance costs
|
18,934
|
|
79,185
|
|
51,555
|
Proceeds from
issuance of short-term debt
|
—
|
|
1,511
|
|
806
|
Proceeds from
issuance of long-term debt
|
459
|
|
2,162,162
|
|
58
|
Payments on
short-term debt
|
(1,722)
|
|
(25,584)
|
|
—
|
Payments on long-term
debt
|
(198,316)
|
|
(2,656,386)
|
|
(65,122)
|
Net proceeds
(payments) under revolving credit facilities
|
126,017
|
|
(127,536)
|
|
(42,522)
|
Excess tax benefits
on exercised stock options
|
—
|
|
—
|
|
972
|
Principal payments on
capital lease obligations
|
(4,032)
|
|
(5,618)
|
|
(6,085)
|
Purchase of
non-controlling interest
|
—
|
|
—
|
|
(623)
|
Other
|
—
|
|
(8,937)
|
|
—
|
Net cash used in
continuing operations
|
(109,819)
|
|
(632,907)
|
|
(116,684)
|
Net cash used in
discontinued operations
|
—
|
|
(76)
|
|
(1,471)
|
Net cash used in
financing activities
|
(109,819)
|
|
(632,983)
|
|
(118,155)
|
Foreign exchange
effect on cash and cash equivalents
|
(7,084)
|
|
(11,379)
|
|
(16,312)
|
Net increase in cash
and cash equivalents
|
65,015
|
|
100,439
|
|
39,853
|
Cash and cash
equivalents, beginning of period – continuing
operations
|
502,200
|
|
378,461
|
|
355,431
|
Cash and cash
equivalents, beginning of period – discontinued
operations
|
—
|
|
23,300
|
|
6,477
|
Cash and cash
equivalents, end of period
|
567,215
|
|
502,200
|
|
401,761
|
Less: Cash and cash
equivalents of discontinued operations, end of
period
|
—
|
|
—
|
|
23,300
|
Cash and cash
equivalents of continuing operations, end of
period
|
$
567,215
|
|
$
502,200
|
|
$
378,461
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Supplemental Financial Information
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2016
|
|
Cost of Net
Revenue
|
|
Research and
Development
|
|
Selling,
General
& Administrative
|
|
Impairment,
net of loss on
disposition
|
|
Interest and
other income,
net
|
|
Provision for
income taxes
|
|
Equity earnings
of
unconsolidated entities,
net of tax
|
|
Net
Income1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets
|
$
12,281
|
|
$
922
|
|
$
31,384
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
(44,587)
|
Restructuring
charges
|
2,090
|
|
512
|
|
7,535
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(10,136)
|
Impairment
Charges
|
-
|
|
-
|
|
193
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(193)
|
Stock-based
compensation expense
|
518
|
|
531
|
|
9,633
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(10,681)
|
Acquisition-related
costs
|
-
|
|
-
|
|
72
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(72)
|
Fair value
adjustments to acquisition-related contingent
consideration
|
-
|
|
-
|
|
(1,419)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,419
|
Costs associated with
potential business dispositions
|
-
|
|
-
|
|
42
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(42)
|
Impairment and (gain)
loss on disposition, net
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(11,152)
|
|
11,152
|
Amortization -
Unconsolidated Subs
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
46
|
|
(46)
|
Audit and legal fees
related to on-going governmental investigations
|
-
|
|
-
|
|
12,893
|
|
-
|
|
1,697
|
|
-
|
|
-
|
|
(14,590)
|
Abbott transaction
related expenses
|
-
|
|
-
|
|
22,064
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(22,064)
|
INRatio recall
expense
|
2,481
|
|
-
|
|
(1,300)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,181)
|
Legal
settlement accrual
|
-
|
|
-
|
|
14,300
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(14,300)
|
Income tax effects on
items above
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
72,986
|
|
-
|
|
(72,986)
|
Total of
Supplemental Information
|
$
17,370
|
|
$
1,965
|
|
$
95,398
|
|
$
-
|
|
$
1,697
|
|
$
72,986
|
|
$
(11,106)
|
|
$
(178,309)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of above items
on EPS numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
(5,367)
|
Impact of above items
on EPS denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,301)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) All impacts are
shown as pre-tax with aggregate tax effect displayed as "Income tax
effects on items above".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended December 31, 2016
|
|
Cost of Net
Revenue
|
|
Research and
Development
|
|
Selling, General
& Administrative
|
|
Impairment, net of
loss on disposition
|
|
Interest and other
income, net
|
|
Provision for
income taxes
|
|
Equity earnings of
unconsolidated entities, net of tax
|
|
Net
Income1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets
|
$
49,616
|
|
$
3,685
|
|
$
127,253
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
(180,553)
|
Restructuring
charges
|
5,991
|
|
4,052
|
|
27,831
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(37,874)
|
Impairment
Charges
|
85
|
|
-
|
|
193
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(278)
|
Stock-based
compensation expense
|
2,054
|
|
1,904
|
|
37,838
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(41,796)
|
Acquisition-related
costs
|
-
|
|
5,000
|
|
1,030
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,030)
|
Fair value
adjustments to acquisition-related contingent
consideration
|
-
|
|
-
|
|
(13,308)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
13,308
|
Costs associated with
potential business dispositions
|
7
|
|
-
|
|
995
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,002)
|
Impairment and (gain)
loss on disposition, net
|
-
|
|
-
|
|
-
|
|
(3,810)
|
|
-
|
|
-
|
|
(29,873)
|
|
33,683
|
Amortization -
Unconsolidated Subs
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
275
|
|
(275)
|
Audit and legal fees
related to on-going governmental investigations
|
-
|
|
-
|
|
35,615
|
|
-
|
|
4,509
|
|
-
|
|
-
|
|
(40,125)
|
Abbott transaction
related expenses
|
-
|
|
-
|
|
60,266
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(60,266)
|
INRatio recall
expense
|
4,581
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,581)
|
Legal settlement
accrual
|
-
|
|
-
|
|
35,175
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(35,175)
|
Income tax effects on
items above
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(19,303)
|
|
-
|
|
19,303
|
Total of
Supplemental Information
|
$
62,333
|
|
$
14,641
|
|
$
312,888
|
|
$
(3,810)
|
|
$
4,509
|
|
$
(19,303)
|
|
$
(29,598)
|
|
$
(341,660)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of above items
on EPS numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
(1,035)
|
Impact of above items
on EPS denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,279)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) All impacts are
shown as pre-tax with aggregate tax effect displayed as "Income tax
effects on items above".
|
|
|
|
|
|
|
|
|
|
|
Alere Inc. and
Subsidiaries
|
Preliminary
Unaudited Reconciliation of Non-GAAP Organic Revenue
Growth
|
(in
thousands)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
%
Change
|
|
2017
|
2016
|
|
2017 v.
2016
|
|
|
|
|
|
Net
revenue
|
$
588,216
|
$
586,940
|
|
0.2%
|
Impact of foreign
currency exchange
|
4,770
|
-
|
|
|
Impact of
acquisitions & dispositions
|
(900)
|
-
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue
|
$
592,085
|
$
586,940
|
|
0.9%
|
|
|
|
|
|
Arriva
Revenue
|
(3,039)
|
(35,143)
|
|
|
|
|
|
|
|
Non-GAAP organic
net revenue (excluding Arriva)
|
$
589,046
|
$
551,797
|
|
6.8%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/alere-announces-update-on-form-10-k-and-provides-preliminary-unaudited-financial-results-300461347.html
SOURCE Alere Inc.