Navigation Links
Inverness Medical Innovations Announces Fourth Quarter 2007 Results
Date:2/20/2008

WALTHAM, Mass., Feb. 20 /PRNewswire-FirstCall/ -- Inverness Medical Innovations, Inc. (Amex: IMA), a global leader in rapid point-of-care diagnostic products, today announced its financial results for the quarter ended December 31, 2007.

In the fourth quarter of 2007, the Company recorded net revenue of $288.0 million compared to net revenue of $157.0 million in the fourth quarter of 2006. The revenue increase was primarily due to increased product sales in our Professional Diagnostics segment which grew from $87.2 million in the fourth quarter of 2006 to $234.2 million in 2007, principally as a result of businesses acquired which contributed $139.3 million of the increased product revenue. Partially offsetting this increase was a decrease of $16.1 million in revenue as compared to the prior year's quarter as a result of our second quarter of 2007 formation of a joint venture for our Consumer Diagnostics business with the Procter & Gamble Company and a $3.3 million decrease in product sales from our Nutritional segment.

For the fourth quarter of 2007, the net loss prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") was $12.5 million, or $0.19 per diluted common share, compared to net income of $6.0 million, or $0.15 per diluted common share, for the fourth quarter of 2006. The Company reported adjusted cash basis net income of $27.6 million, or $0.40 per diluted common share, for the fourth quarter of 2007, compared to adjusted cash basis net income of $13.8 million, or $0.34 per diluted common share, for the fourth quarter of 2006.

The Company's GAAP results for the fourth quarter of 2007 include amortization of $25.6 million, the write-off of $4.8 million of i Non-GAAP Cash

GAAP Adjustments Basis(a)

Net revenue $569,454 $- $569,454

Cost of sales 340,231 (21,036)(b)(c)(d) 319,195

Gross profit 229,223 21,036 250,259

Gross margin 40% 44%

Operating expenses:

Research and

development 53,666 (7,544)(b)(c)(d)(g) 46,122

Purchase of in-process

research and

development (4,960)(g) (4,960)

Selling, general and

administrative 165,688 (11,648)(b)(c)(d) 154,040

Loss on dispositions,

net 3,498 (3,498)(e) -

Operating (loss)

income 6,371 48,686 55,057

Interest and other income

(expense), net (17,486) (2,776)(b)(c)(h) (20,262)

Income tax (benefit)

provision 5,727 1,962(j) 7,689

Net (loss) income $(16,842) $43,948 $27,106

Net (loss) income per

common share:

Basic $(0.49) $0.79

Diluted $(0.49)(k) $0.76(m)

Weighted average common

shares - basic 34,109 34,109

Weighted average common

shares - diluted 34,109(k) 35,578(m)

(a) In calculating net income or loss on an adjusted cash basis, the

Company excludes from net income or loss (i) certain non-cash

charges including amortization expense and stock-based compensation

expense, (ii) non-recurring charges and income, and (iii) certain

other charges and income that have a significant positive or

negative impact on results yet do not occur on a consistent or

regular basis in its business. In determining whether a particular

item meets one of these criteria, management considers facts and

circumstances that it believes are relevant. Management believes

that excluding such charges and income from income or loss allows

investors and management to evaluate and compare the Company's

operating results from continuing operations from period to period

in a meaningful and consistent manner. Due to the frequency of

their occurrence in its business, the Company does not adjust net

income or loss for the costs associated with litigation, including

payments made or received through settlements. It should be noted

that "net income or loss on an adjusted cash basis" is not a

standard financial measurement under accounting principles generally

accepted in the United States of America ("GAAP") and should not be

considered as an alternative to net income or loss or cash flow from

operating activities, as a measure of liquidity or as an indicator

of operating performance or any measure of performance derived in

accordance with GAAP.

(b) Restructuring charge associated with the decision to close

facilities of $6.7 million and $8.9 million for the year ended

December 31, 2007 and 2006, respectively. The $6.7 million charge

for the year ended December 31, 2007 includes: $2.0 million charged

to cost of sales, $2.5 million charged to research and development,

and $2.2 million charged to selling, general and administrative

expense. The $8.9 million charge for the year ended December 31,

2006 includes: $9.5 million charged to cost of sales, $2.9 million

charged to research and development and $0.8 million charged to

selling, general and administrative expense, offset by a $4.3

million net foreign currency gain resulting from the closure of our

CDIL operation in Ireland recorded to other income. These charges

have been excluded from net income or loss because they have a

significant impact on results yet do not occur on a consistent or

regular basis in the Company's business.

(c) Amortization expense of $62.2 million and $21.8 million for the year

2007 and 2006 GAAP results, respectively, including $24.1 million

and $11.2 million charged to cost of sales, $2.9 million and $3.3

million charged to research and development, $34.8 million and $7.1

million charged to selling, general and administrative expense, and

$0.4 million and $0.2 million charged to other expense in the

respective periods.

(d) Compensation costs of $57.4 million and $5.5 million associated with

stock-based compensation expense, including $0.6 million and $0.4

million charged to cost of sales, $2.2 million and $1.4 million

charged to research and development and $54.6 million and $3.7

million charged to selling, general and administrative. The $57.5

million charged to selling, general and administrative during the

year-ended December 31, 2007 includes $45.2 million of costs

associated with stock option acceleration and conversion in

connection with our recent acquisition of Biosite.

(e) A net loss of $3.5 million resulting from a loss of $4.9 million

associated with management's decision to dispose of our SMB research

operation, offset by a $1.4 million gain on the sale of an idle

manufacturing facility.

(f) Write-offs in the amount of $6.2 million, $1.9 million and $0.1

million during the year ended December 31, 2007, relating to

inventory adjustments recorded in connection with the acquisition of

Biosite, Cholestech and HemoSense, respectively.

(g) Purchase of in-process research and development during the year

ended December 31, 2007 includes a write-off of $169.0 million and

$4.8 million associated with the value of in-process research and

development costs incurred in connection with our acquisition of

Biosite and Diamics, respectively. Purchase of in-process research

and development during the year ended December 31, 2006 includes a

write-off of $5.0 million associated with the value of in-process

research and development costs incurred in connection with our

acquisition of Clondiag.

(h) Write-off of debt origination costs upon early extinguishment of

related debt, which constitutes a charge having a significant

negative impact on results yet does not occur on a consistent or

regular basis in our business in the amount of $15.6 million and

$1.3 million for the year ended December 31, 2007 and 2006,

respectively.

(i) A $3.9 million unrealized foreign currency loss associated with a

cash escrow established in connection with the acquisition of BBI

Holdings Plc, partially offset by a $1.9 million foreign currency

gain realized on the settlement of intercompany notes.

(j) Tax effect on adjustments as discussed above in notes (b), (c), (d),

(f), (h) and (i).

(k) For the year ended December 31, 2007 and 2006, potential dilutive

shares were not used in the calculation of diluted net loss per

common share under GAAP because inclusion thereof would be

antidilutive.

(l) Included in the weighted average diluted common shares for the

calculation of diluted net income per common share for the year

ended December 31, 2007, on an adjusted cash basis, are dilutive

shares consisting of 2,726,000 common stock equivalent shares from

the potential exercise of stock options and awards and warrants.

The diluted net income per common share calculation for the year

ended December 31, 2007, on an adjusted cash basis, does not

include 1,807,000 common stock equivalent shares from the potential

conversion of convertible debt, as inclusion thereof would be

antidilutive.

(m) Included in the weighted average diluted common shares for the

calculation of diluted net income per common share for the year

ended December 31, 2006, on an adjusted cash basis, are dilutive

shares consisting of 1,469,000 common stock equivalent shares from

the potential exercise of stock options and warrants.

Inverness Medical Innovations, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in $000s)

December 31, December 31,

2007 2006

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $414,732 $71,104

Restricted cash 141,869 -

Marketable securities 2,551 -

Accounts receivable, net 163,380 100,388

Inventories, net 148,231 78,322

Prepaid expenses and other current assets 82,211 25,730

Total current assets 952,974 275,544

PROPERTY, PLANT AND EQUIPMENT, NET 267,880 82,312

GOODWILL AND OTHER INTANGIBLE ASSETS, NET 3,496,616 679,002

DEFERRED FINANCING COSTS AND OTHER ASSETS, NET 165,731 48,913

Total assets $4,883,201 $1,085,771

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Current portion of notes payable $21,096 $8,088

Other current liabilities 257,812 134,143

Total current liabilities 278,908 142,231

LONG-TERM LIABILITIES:

Notes payable, net of current portion 1,366,753 194,888

Deferred tax liability 325,308 23,984

Other long-term liabilities 322,303 10,530

Total long-term liabilities 2,014,364 229,402

TOTAL STOCKHOLDERS' EQUITY 2,589,929 714,138

Total liabilities and stockholders' equity $4,883,201 $1,085,771

n-process research and development acquired in connection with our acquisition of Diamics, $5.2 million of restructuring charges, $5.3 million of stock-based compensation expense, a $0.8 million charge related to the write-up to fair market value of inventory acquired in connection with the Cholestech and HemoSense acquisitions, and an unrealized foreign currency loss of $3.9 million associated with a cash escrow established in connection with the acquisition of BBI Holdings Plc. GAAP results for the fourth quarter of 2006 include amortization of $5.4 million, a $1.2 million restructuring charge, and $1.6 million of non-cash stock-based compensation expense. 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.

The Company will host a conference call beginning at 10:00 a.m. (Eastern Time) today, February 20, 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/342025/ using Real Player or Windows Media. A telephone replay of the call will be available by dialing 706-645-9291 (domestic and international) with an access code of 34933552. That replay will be available until 12:00 midnight (Eastern Time) on February 23, 2008. An on- demand webcast of the call will be available at the Inverness website (http://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.

Inverness Medical Innovations, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and

Reconciliation to Non-GAAP Adjusted Cash Basis Amounts

(in $000s, except per share amounts)

Three Months Ended December 31, 2007

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis(a)

Net revenue $287,960 $- $287,960

Cost of sales 149,209 (13,266)(b)(c)(d)(f) 135,943

Gross profit 138,751 13,266 152,017

Gross margin 48% 53%

Operating expenses:

Research and

development 24,898 (3,838)(b)(c)(d) 21,060

Purchase of in-process

research and

development 4,825 (4,825)(g) -

Selling, general and

administrative 99,758 (19,658)(b)(c)(d) 80,100

Loss on dispositions,

net - - -

Operating income 9,270 41,587 50,857

Interest and other income

(expense), net (25,146) 4,006(c)(h) (21,140)

Income tax (benefit)

provision (3,366) 5,494(i) 2,128

Net (loss) income $(12,510) $40,099 $27,589

Net (loss) income per

common share:

Basic $(0.19) $0.42

Diluted $(0.19)(j) $0.40(k)

Weighted average common

shares - basic 65,525 65,525

Weighted average common

shares - diluted 65,525(j) 69,578(k)

Three Months Ended December 31, 2006

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis(a)

Net revenue $157,008 $- $157,008

Cost of sales 89,680 (3,906)(b)(c)(d) 85,774

Gross profit 67,328 3,906 71,234

Gross margin 43% 45%

Operating expenses:

Research and

development 13,917 (1,460)(c)(d) 12,457

Purchase of in-process

research and

development - - -

Selling, general and

administrative 44,584 (2,493)(c)(d) 42,091

Loss on dispositions,

net 307 (307)(e) -

Operating income 8,520 8,166 16,686

Interest and other income

(expense), net (650) 177(c) (473)

Income tax (benefit)

provision 1,843 552(i) 2,395

Net (loss) income $6,027 $7,791 $13,818

Net (loss) income per

common share:

Basic $0.15 $0.36

Diluted $0.15(l) $0.34(l)

Weighted average common

shares - basic 38,885 38,885

Weighted average common

shares - diluted 40,715(l) 40,715(l)

(a) In calculating net income or loss on an adjusted cash basis, the

Company excludes from net income or loss (i) certain non-cash

charges including amortization expense and stock-based compensation

expense, (ii) non-recurring charges and income, and (iii) certain

other charges and income that have a significant positive or

negative impact on results yet do not occur on a consistent or

regular basis in its business. In determining whether a particular

item meets one of these criteria, management considers facts and

circumstances that it believes are relevant. Management believes

that excluding such charges and income from income or loss allows

investors and management to evaluate and compare the Company's

operating results from continuing operations from period to period

in a meaningful and consistent manner. Due to the frequency of

their occurrence in its business, the Company does not adjust net

income or loss for the costs associated with litigation, including

payments made or received through settlements. It should be noted

that "net income or loss on an adjusted cash basis" is not a

standard financial measurement under accounting principles generally

accepted in the United States of America ("GAAP") and should not be

considered as an alternative to net income or loss or cash flow from

operating activities, as a measure of liquidity or as an indicator

of operating performance or any measure of performance derived in

accordance with GAAP.

(b) Restructuring charge associated with the decision to close

facilities of $5.2 million and $1.2 million for the three months

ended December 31, 2007 and 2006, respectively. The $5.2 million

charge for the three months ended December 31, 2007 includes: $2.0

million charged to cost of sales, $2.2 million charged to research

and development, and $1.0 million charged to selling, general and

administrative expense. The $1.2 million charge for the three

months ended December 31, 2006 was charged to cost of sales. These

charges have been excluded from net income or loss because they have

a significant impact on results yet do not occur on a consistent or

regular basis in the Company's business.

(c) Amortization expense of $25.6 million and $5.4 million included in

the fourth quarter of 2007 and 2006 GAAP results, respectively,

including $10.2 million and $2.7 million charged to cost of sales,

$0.7 million and $1.0 million charged to research and development,

$14.6 million and $1.5 million charged to selling, general and

administrative expense, and $0.1 million and $0.2 million charged to

other income, in the respective quarters.

(d) Compensation costs of $5.3 million and $1.6 million associated with

stock-based compensation expense, including $0.3 million and $0.1

million charged to cost of sales, $0.9 million and $.5 million

charged to research and development and $4.1 million and $1.0

million charged to selling, general and administrative.

(e) Loss of $0.3 million associated with management's decision to

dispose of our SMB research facility.

(f) Write-offs in the amount of $0.7 million and $0.1 million during the

three months ended December 31, 2007, relating to inventory

adjustments recorded in connection with the acquisition of

Cholestech and HemoSense, respectively.

(g) Purchase of in-process research and development during the three

months ended December 31, 2007 includes a write-off of $4.8 million

associated with the value of in-process research and development

costs incurred in connection with our acquisition of Diamics.

(h) A $3.9 million unrealized foreign currency loss associated with a

cash escrow established in connection with the acquisition of BBI

Holdings Plc.

(i) Tax effect on adjustments as discussed above in notes (b), (c), (d),

(f) and (h).

(j) For the three months ended December 31, 2007, potential dilutive

shares were not used in the calculation of diluted net loss per

common share under GAAP because inclusion thereof would be

antidilutive.

(k) Included in the weighted average diluted common shares for the

calculation of diluted net income per common share for the three

months ended December 31, 2007, on an adjusted cash basis, are

dilutive shares consisting of 4,053,000 common stock equivalent

shares from the potential exercise of stock options and awards and

warrants. The diluted net income per common share calculation for

the three months ended December 31, 2007, on an adjusted cash

basis, does not include 2,868,000 common stock equivalent shares

from the potential conversion of convertible debt, as inclusion

thereof would be antidilutive.

(l) Included in the weighted average diluted common shares for the

calculation of diluted net income per common share for the three

months ended December 31, 2006, under GAAP and on an adjusted cash

basis, are dilutive shares consisting of 1,830,000 common stock

equivalent shares from the potential exercise of stock options and

warrants.

Inverness Medical Innovations, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and

Reconciliation to Non-GAAP Adjusted Cash Basis Amounts

(in $000s, except per share amounts)

Year Ended December 31, 2007

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis(a)

Net revenue $839,540 $- $839,540

Cost of sales 445,813 (34,877)(b)(c)(d)(f) 410,936

Gross profit 393,727 34,877 428,604

Gross margin 47% 51%

Operating expenses:

Research and development 69,547 (7,597)(b)(c)(d) 61,950

Purchase of in-process

research and

development 173,825 (173,825)(g) -

Selling, general and

administrative 323,766 (91,579)(b)(c)(d) 232,187

Loss on dispositions,

net - - -

Operating (loss)

income (173,411) 307,878 134,467

Interest and other income

(expense), net (69,879) 18,005(c)(b)(f) (51,874)

Income tax (benefit)

provision (1,799) 15,743(i) 13,944

Net (loss) income $(241,491) $310,140 $68,649

Net (loss) income per

common share:

Basic $(4.69) $1.33

Diluted $(4.69)(k) $1.27(l)

Weighted average common

shares - basic 51,510 51,510

Weighted average common

shares - diluted 51,510(k) 54,236(l)

Year Ended December 31, 2006

Non-GAAP

Adjusted


'/>"/>

SOURCE Inverness Medical Innovations
Copyright©2008 PR Newswire.
All rights reserved

Related biology technology :

1. Inverness Medical Innovations Completes Acquisition of BBI Holdings Plc
2. Correction to Press Release Dated January 31, 2008: Inverness Medical Innovations to Participate at 2008 Merrill Lynch Global Pharmaceutical, Biotechnology and Medical Device Conference on February 5, 2008
3. Inverness Medical Innovations to Participate at 2008 Merrill Lynch Global Pharmaceutical, Biotechnology and Medical Device Conference on February 5, 2008
4. Inverness Medical Innovations to Participate at JP Morgan Healthcare Conference on January 8, 2008
5. Inverness Medical Innovations Acquires ParadigmHealth
6. Inverness Medical Innovations Agrees to Acquire ParadigmHealth
7. Inverness Medical Innovations Announces Proposed Public Offering of Common Stock
8. Inverness - Chemogen Establish Exclusive License for TB Antibodies
9. Inverness Medical Innovations Agrees to Acquire Panbio Ltd.
10. B-Line Medical and Immersion Medical Announce Partnership
11. MIT researcher addresses biomedical engineering challenges
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/5/2016)... SAN DIEGO , Feb. 5, 2016 ... the region,s trusted information source for community, health and ... San Diego) will integrate to enhance care coordination ... people to the services they need and to better ... to improve care.   San Diego ...
(Date:2/4/2016)... 2016  Sangamo BioSciences, Inc. (NASDAQ: SGMO ), ... Edward Lanphier , Sangamo,s president and chief executive ... Sangamo,s ZFP Therapeutic ® development programs and an ... ET on Thursday, February 11, 2016, at the Leerink ... conference is being held in New York ...
(Date:2/4/2016)... and MENLO PARK, Calif. , ... DMPI) ("DelMar" and the "Company"), a biopharmaceutical company focused on ... that it will present at the 18 th ... 8, 2016 at 10:00 a.m. EST in New ... DelMar,s president and CEO, will provide an update on the ...
(Date:2/4/2016)... Oakland, California (PRWEB) , ... February 04, 2016 ... ... Artificial Intelligence (AI) and leading supplier of Semantic Graph Database technology has been ... Graph Database Products ” by Corporate America Magazine. , “At Corporate America, it’s ...
Breaking Biology Technology:
(Date:2/2/2016)... Technology Enhancements Accelerate Growth of X-ray Imaging ... and computed radiography markets in Thailand ... Indonesia (TIM). It provides an in-depth analysis ... as regional market drivers and restraints. The study offers ... market attractiveness, both for digital and computed radiography. Market ...
(Date:2/1/2016)... Canada , February 1, 2016 ... technological advancements to drive global touchfree intuitive gesture control ... --> Rising sales of consumer electronics coupled ... gesture control market size through ... consumer electronics coupled with new technological advancements to drive ...
(Date:1/28/2016)... -- Synaptics (NASDAQ: SYNA ), a leading developer of human ... December 31, 2015. --> --> ... 2 percent compared to the comparable quarter last year to $470.5 ... $35.0 million, or $0.93 per diluted share. ... quarter of fiscal 2016 grew 9 percent over the prior year ...
Breaking Biology News(10 mins):