UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 5, 2017
ALERE INC.
(Exact name of registrant as specified in charter)
Delaware | 1-16789 | 04-3565120 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
51 Sawyer Road, Suite 200, Waltham, Massachusetts 02453
(Address of Principal Executive Offices) (Zip Code)
(781) 647-3900
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition |
On June 5, 2017, Alere Inc. (the Company or Alere) issued a press release announcing the financial results for both the fiscal quarter and fiscal year ended December 31, 2016. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information provided under this Form 8-K (including Exhibit 99.1) is furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits. The following exhibit is being furnished herewith this Current Report on Form 8-K.
99.1 Press Release dated June 5, 2017
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ALERE INC. | ||||||
Date: June 5, 2017 | By: | /s/ James Hinrichs | ||||
James Hinrichs | ||||||
Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
EXHIBIT NO. |
DESCRIPTION | |
99.1 | Press Release dated June 5, 2017. |
Exhibit 99.1
Alere Files Form 10-K, Reports Fourth Quarter and
Full Year 2016 Financial Results
WALTHAM, Mass., June 5, 2017 Alere Inc. (NYSE: ALR), a global leader in rapid diagnostic tests, today announced that it has filed its Form 10-K and reported its financial results for the fourth quarter and full year ended December 31, 2016.
Full Year 2016 Results
| Revenue for the full year 2016 was $2.38 billion, a 3% decrease compared to $2.46 billion in the prior year period. |
| Non-GAAP organic growth for the full year 2016 was +0.3% or +2.5% excluding Arriva*. |
| Strong performance in Infectious Disease led by international growth on a constant currency basis included double-digit growth in Latin America, Asia Pacific and Africa. Patient self-testing also achieved double-digit growth in 2016. |
| Negative impact of foreign currency exchange was $41 million in 2016. |
| GAAP loss from continuing operations was $(137) million, or $(1.83) per diluted share, for the full year 2016, compared to $(15) million, or $(0.43) per diluted share in the prior year period. |
| Non-GAAP adjusted EBITDA of $347 million for the full year 2016, a 30% decrease compared to $495 million in the prior year period. The decrease was primarily due to 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.
Alere delivered solid 2016 results by maintaining our discipline and staying focused on core business growth as a leader in point-of-care diagnostics. Excluding extraordinary costs and the impact of foreign currency exchange and divestitures, our operating earnings in 2016 were roughly in line with 2015, said Namal Nawana, CEO of Alere. We successfully accelerated growth in our global Infectious Disease business in 2016, achieving double-digit sales growth driven by the success of the Alere i molecular platform with an expanded menu of three assays. In addition, we continued to invest in global operations and infrastructure to strengthen the enterprise. We have seen a strong start to 2017 in each of our global business units and look forward to reporting our progress in the first quarter results.
Revenue (in millions) |
FY2016 | FY2015 | % Change | |||||||||
Cardiometabolic Disease |
$ | 622 | $ | 704 | (12 | %) | ||||||
Infectious Disease |
776 | 710 | 9 | % | ||||||||
Toxicology |
609 | 618 | (2 | %) | ||||||||
Other |
140 | 192 | (27 | %) | ||||||||
Consumer Diagnostics Other Non-reportable* |
|
74 143 |
|
|
85 129 |
|
|
(13 10 |
%) % | |||
License and Royalty |
12 | 17 | (29 | %) | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 2,376 | $ | 2,456 | (3 | %) | ||||||
|
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|
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|
|
* | Patient self-testing has been reclassified into a separate reporting segment called Other Non-reportable. |
Fourth Quarter 2016 Results
| Total revenue was $597 million, a 3% decrease compared to $617 million in the prior year period. |
| Global influenza sales were $39 million in the fourth quarter of 2016, a 60% increase compared to $24 million in the prior year period. |
| Non-GAAP organic growth during the fourth quarter of 2016 was -0.9%, or +3.7% excluding Arriva. |
| Negative impact of foreign currency exchange was $8 million in the fourth quarter of 2016. |
| GAAP loss from continuing operations during the fourth quarter of 2016 was $(114) million, or $(1.38) per diluted share, compared to $(22) million, or $(0.31) per diluted share in the prior year period. |
| Non-GAAP adjusted EBITDA was $82 million in the fourth quarter of 2016, a 10% decrease compared to $91 million in the prior year period. The decrease was primarily due to higher costs as detailed in the Supplemental Financial Information table. |
Revenue (in millions) | Fourth Quarter 2016 |
Fourth Quarter 2015 |
% Change | |||||||||
Cardiometabolic Disease |
$ | 144 | $ | 180 | (20 | %) | ||||||
Infectious Disease |
212 | 189 | 12 | % | ||||||||
Toxicology |
148 | 150 | (1 | %) | ||||||||
Other |
38 | 45 | (15 | %) | ||||||||
Consumer Diagnostics Other Non-reportable* |
|
18 34 |
|
|
20 31 |
|
|
(11 11 |
%) % | |||
License and Royalty |
4 | 3 | 30 | % | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 597 | $ | 617 | (3 | %) | ||||||
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|
* | Patient self-testing has been reclassified into a separate reporting segment called Other Non-reportable. |
Page 2 of 4
Non-GAAP Information
To supplement the financial measures prepared in accordance with U.S. GAAP, the Company uses Non-GAAP adjusted EBITDA and Non-GAAP organic growth, which are non-GAAP financial measures. The reconciliations of Non-GAAP adjusted EBITDA to net income (loss) from continuing operations and Non-GAAP organic growth to revenue, the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, are shown in the table in this press release. The Company believes Non-GAAP adjusted EBITDA and Non-GAAP 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 Companys management also uses Non-GAAP adjusted EBITDA and Non-GAAP organic growth because the Companys management also believes that these are useful measures to evaluate the financial performance of the Company based on operational factors. It should also be noted that not all companies calculate Non-GAAP adjusted EBITDA and Non-GAAP 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, which definitive agreement was amended on April 12, 2017. The transaction is expected to close by the end of the third quarter of 2017, subject to the approval of Alere shareholders and the satisfaction of certain customary closing conditions, including applicable regulatory approvals. 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 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 Aleres 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 Aleres ability to retain
Page 3 of 4
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 managements attention from Aleres 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 Aleres 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 Companys 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 Aleres Current Report on Form 8-K as filed on April 17, 2017, Current Report on Form 8-K as filed on May 22, 2017 or the failure to timely file the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, (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.
# # #
Investor Relations
Juliet Cunningham
Vice President, Investor Relations
ir@alere.com
858.805.2232
Page 4 of 4
Alere Inc. and Subsidiaries
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 | ||||||||||||
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|
|||||||||
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 | ||||||||||||
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|
|||||||||
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 |
261,431 | 229,877 | 966,831 | 808,595 | ||||||||||||
Impairment and (gain) loss on disposition, net |
| 8,132 | (3,810 | ) | 50,540 | |||||||||||
|
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|
|||||||||
Operating income |
(15,454 | ) | (17,687 | ) | 14,724 | 129,712 | ||||||||||
Interest and other income (expense), net |
(32,137 | ) | (60,482 | ) | (167,122 | ) | (214,254 | ) | ||||||||
|
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|||||||||
Loss from continuing operations before provision (benefit) for income taxes |
(47,591 | ) | (78,169 | ) | (152,398 | ) | (84,542 | ) | ||||||||
Provision (benefit) for income taxes |
83,762 | (51,145 | ) | 35,376 | (53,564 | ) | ||||||||||
|
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|
|||||||||
Income (loss) from continuing operations before equity earnings of unconsolidated entities, net of tax |
(131,353 | ) | (27,024 | ) | (187,774 | ) | (30,978 | ) | ||||||||
Equity earnings of unconsolidated entities, net of tax |
17,200 | 5,210 | 50,505 | 15,530 | ||||||||||||
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|
|||||||||
Income (loss) from continuing operations |
(114,153 | ) | (21,814 | ) | (137,269 | ) | (15,448 | ) | ||||||||
Income from discontinued operations, net of tax |
| 2,736 | | 219,513 | ||||||||||||
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|
|
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|
|||||||||
Net income |
(114,153 | ) | (19,078 | ) | (137,269 | ) | 204,065 | |||||||||
Less: Net income attributable to non-controlling interests |
(103 | ) | (5 | ) | 350 | 381 | ||||||||||
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Net income attributable to Alere Inc. and Subsidiaries |
(114,050 | ) | (19,073 | ) | (137,619 | ) | 203,684 | |||||||||
Preferred stock dividends |
(5,367 | ) | (5,366 | ) | (21,350 | ) | (21,293 | ) | ||||||||
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Net income available to common stockholders |
$ | (119,417 | ) | $ | (24,439 | ) | $ | (158,969 | ) | $ | 182,391 | |||||
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Basic net income per common share: |
||||||||||||||||
Income (loss) from continuing operations |
$ | (1.38 | ) | $ | (0.31 | ) | $ | (1.83 | ) | $ | (0.43 | ) | ||||
Income from discontinued operations |
| 2.57 | ||||||||||||||
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Basic and diluted net income per common share |
$ | (1.38 | ) | $ | (0.31 | ) | $ | (1.83 | ) | $ | 2.14 | |||||
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Diluted net income per common share: |
||||||||||||||||
Income (loss) from continuing operations |
$ | (1.38 | ) | $ | (0.31 | ) | $ | (1.83 | ) | $ | (0.43 | ) | ||||
Income from discontinued operations |
| | 2.57 | |||||||||||||
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Diluted net income per common share |
$ | (1.38 | ) | $ | (0.31 | ) | $ | (1.83 | ) | $ | 2.14 | |||||
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Weighted average shares - basic |
86,955 | 85,953 | 86,796 | 85,420 | ||||||||||||
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Weighted average shares - diluted |
86,955 | 85,953 | 86,796 | 85,420 | ||||||||||||
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Alere Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
December 31, | December 31, | |||||||
2016 | 2015 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 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 | ||||||
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|
|||||
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 | ||||||
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Total assets |
$ | 5,648,279 | $ | 5,918,160 | ||||
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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 |
590,722 | 518,389 | ||||||
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Total current liabilities |
676,156 | 722,706 | ||||||
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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 |
| | ||||||
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Total long-term liabilities |
3,140,516 | 3,140,158 | ||||||
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TOTAL EQUITY |
1,831,607 | 2,055,296 | ||||||
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Total liabilities and equity |
$ | 5,648,279 | $ | 5,918,160 | ||||
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Alere Inc. and Subsidiaries
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 | % | ||||||||
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|||||||||
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 | % | ||||||||
|
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|
|||||||||
Net revenue |
$ | 596,809 | $ | 617,136 | -3 | % | ||||||
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|
|||||||||
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 | % | ||||||||
|
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|
|||||||||
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 | % | ||||||||
|
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|
|
|||||||||
Net revenue |
$ | 2,376,335 | $ | 2,455,615 | -3 | % | ||||||
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|
(1) | Revenues have been restated for the impact of restatements made during the preparation of our consolidated financial statements for 2016. For more information on these restatements see Note 2 in our Form 10-K. |
Alere Inc. and Subsidiaries
Reconciliation of Net Income (Loss) to Non-GAAP EBITDA
(in thousands)
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Net Income (loss) (1) |
$ | (114,153 | ) | $ | (19,078 | ) | ||
Less: Income from discontinued operations, net of tax |
| 2,736 | ||||||
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|
|
|
|||||
Loss from continuing operations |
(114,153 | ) | (21,814 | ) | ||||
Adjustment related to acquired software license contracts |
| | ||||||
Income tax provision (benefit) |
83,762 | (51,145 | ) | |||||
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 | ) | |||||
|
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|
|||||
Non-GAAP Adjusted EBITDA |
$ | 81,528 | $ | 90,998 | ||||
|
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|
|
(1) | Net income (loss) for the three months ended December 31, 2015 includes $16.7 million of cash costs asssociated with the voluntary withdrawal of INRatio products, 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, $15.5 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) |
$ | (137,269 | ) | $ | 204,065 | |||
Less: Income from discontinued operations, net of tax |
| 219,513 | ||||||
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|
|
|
|||||
Loss from continuing operations |
(137,269 | ) | (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 | ||||||
|
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|
|||||
Non-GAAP Adjusted EBITDA |
$ | 347,116 | $ | 495,139 | ||||
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(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 products, 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, $38.2 million of charges related to governmental investigations, $35.2 million for a legal settlement accrual, $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
Reconciliation of Non-GAAP Organic Revenue Growth
(in thousands)
Three Months Ended December 31, | % Change 2016 v. 2015 |
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2016 | 2015 | |||||||||||
Net revenue |
$ | 596,809 | $ | 617,136 | -3.3 | % | ||||||
Impact of foreign currency exchange |
7,830 | | ||||||||||
Impact of acquisitons & dispositions |
(1,453 | ) | (8,234 | ) | ||||||||
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Non-GAAP organic net revenue |
$ | 603,186 | $ | 608,902 | -0.9 | % | ||||||
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Arriva revenue |
(11,622 | ) | (38,592 | ) | ||||||||
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Non-GAAP organic net revenue (excluding Arriva) |
$ | 591,564 | $ | 570,310 | 3.7 | % | ||||||
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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 acquisitons & dispositions |
(13,984 | ) | (60,414 | ) | ||||||||
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Non-GAAP organic net revenue |
$ | 2,402,894 | $ | 2,395,201 | 0.3 | % | ||||||
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Arriva revenue |
(99,887 | ) | (148,538 | ) | ||||||||
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Non-GAAP organic net revenue (excluding Arriva) |
$ | 2,303,007 | $ | 2,246,663 | 2.5 | % | ||||||
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Alere Inc. and Subsidiaries
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 |
| | 15,493 | | 1,697 | | | (17,190 | ) | |||||||||||||||||||||||
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 |
| | | | | 70,892 | | (70,892 | ) | |||||||||||||||||||||||
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Total of Supplemental Information |
$ | 17,370 | $ | 1,965 | $ | 97,998 | $ | | $ | 1,697 | $ | 70,892 | $ | (11,106 | ) | $ | (178,815 | ) | ||||||||||||||
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Impact of above items on EPS numerator |
$ | | ||||||||||||||||||||||||||||||
Impact of above items on EPS denominator |
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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 |
| | 38,215 | | 4,509 | | | (42,725 | ) | |||||||||||||||||||||||
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 |
| | | | | (21,397 | ) | | 21,397 | |||||||||||||||||||||||
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Total of Supplemental Information |
$ | 62,333 | $ | 14,641 | $ | 315,488 | $ | (3,810 | ) | $ | 4,509 | $ | (21,397 | ) | $ | (29,598 | ) | $ | (342,166 | ) | ||||||||||||
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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 |
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