Navigation Links
Inverness Medical Innovations Announces Second Quarter 2008 Results
Date:7/29/2008

WALTHAM, Mass., July 29 /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 June 30, 2008.

In the second quarter of 2008, the Company recorded net revenue of $401.1 million compared to net revenue of $155.0 million in the second quarter of 2007. The revenue increase was primarily due to increased product and service revenue in our Professional Diagnostics segment which grew from $93.1 million in the second quarter of 2007 to $250.4 million in 2008, principally as a result of businesses acquired which contributed $147.0 million of the increased product and service revenue. Also contributing to the net revenue increase was product and service revenue provided by our newly formed Health Management segment totaling $92.5 million in the second quarter of 2008.

For the second quarter of 2008, the net loss prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") was $30.3 million, or $0.43 per diluted common share, compared to net loss of $54.7 million, or $1.17 per diluted common share, for the second quarter of 2007. The Company reported adjusted cash basis net income of $32.7 million, or $0.37 per diluted common share, for the second quarter of 2008, compared to adjusted cash basis net income of $11.8 million, or $0.24 per diluted common share, for the second quarter of 2007. Included in our adjusted cash basis results for the second quarter of 2008 was a $13.8 million charge associated with an arbitration decision, or $8.6 million net of tax charge, resulting in a $0.10 per diluted share impact, partially offset by $2.9 million of incom 427,331

Gross margin 50% 55%

Operating expenses:

Research and development 60,733 (10,693)(b)(c)(d) 50,040

Selling, general and

administrative 307,479 (85,121)(b)(c)(d) 222,358

Total operating expenses 368,212 (95,814) 272,398

Operating income (loss) 18,280 136,653 154,933

Interest and other income

(expense), net (59,399) 8,315 (c)(g) (51,084)

Income tax (benefit)

provision (8,578) 45,032 (i) 36,454

Equity earnings of

unconsolidated entities,

net of tax (1,981) 6,441 (b)(c) 4,460

Net (loss) income $(34,522) $106,377 $71,855

Preferred stock dividends $(3,107) $(3,107)

Net (loss) income available

to common stockholders -

basic $(37,629) $68,748

Net (loss) income per common

share

Basic $(0.49) $0.89

Diluted $(0.49)(j) $0.84 (k)

Weighted average common shares

- basic 77,446 77,446

Weighted average common shares

- diluted 77,446 (j) 83,201 (k)

Six Months Ended June 30, 2007

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis (a)

Net revenue $313,944 $- $313,944

Cost of revenue 169,266 (7,673)(b)(d)(e) 161,593

Gross profit 144,678 7,673 152,351

Gross margin 46% 49%

Operating expenses:

Research and development 24,119 (2,224)(b)(d) 21,895

Selling, general and

administrative 146,765 (57,528)(b)(c)(d) 89,237

Total operating expenses 170,884 (59,752) 111,132

Operating income (loss) (26,206) 67,425 41,219

Interest and other income

(expense), net (20,518) 13,663 (b)(f)(h) (6,855)

Income tax (benefit)

provision 3,205 6,798 (i) 10,003

Equity earnings of

unconsolidated

entities, net of tax 1,560 224 (b) 1,784

Net (loss) income $(48,369) $74,514 $26,145

Preferred stock dividends $- $-

Net (loss) income

available to common

stockholders - basic $(48,369) $26,145

Net (loss) income per

common share

Basic $(1.06) $0.57

Diluted $(1.06)(j) $0.55 (l)

Weighted average common shares

- basic 45,565 45,559

Weighted average common shares

- diluted 45,565 (j) 47,361 (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) Amortization expense of $95.0 million and $16.6 million in the first

six months of 2008 and 2007 GAAP results, respectively, including $23.7

million and $6.3 million charged to cost of sales, $1.8 million and $1.5

million charged to research and development and $69.1 million and $8.6

million charged to selling, general and administrative, in the respective

periods, with $0.4 million and $0.2 million charged through equity

earnings of unconsolidated entities, net of tax during the six months

ended June 30, 3008 and 2007, respectively.

(c) Restructuring charges associated with the decision to close facilities

of $39.9 million and $1.0 million in the first six months of 2008 and 2007

GAAP results, respectively. The $39.9 million charge for the six months

ended June 30, 2008 included $14.5 million charged to cost of sales, $6.6

million charged to research and development, $6.2 million charged to

selling, general and administrative, $6.6 million charged to interest

expense and $6.0 million charged through equity earnings of unconsolidated

entities, net of tax. The $1.0 million charge for the six months ended

June 30, 2007 was charged to selling, general and administrative. 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.

(d) Compensation costs of $12.7 million and $48.9 million associated with

stock-based compensation expense in the first six months of 2008 and 2007

GAAP results, respectively, including $0.6 million and $0.2 million

charged to cost of sales, $2.3 million and $0.7 million charged to

research and development and $9.8 million and $48.0 million charged to

selling, general and administrative. The $48.0 million charged to

selling, general and administrative during the six months ended June 30,

2007 includes $45.2 million of costs associated with stock option

acceleration and conversion in connection with our acquisition of Biosite,

Inc.

(e) A write-off in the amount of $2.0 million and $1.2 million during the

six months ended June 30, 2008 and 2007, respectively, relating to

inventory write-ups recorded in connection with the acquisitions of Panbio

Limited and BBI Holdings Plc. during the first quarter of 2008 and

Biosite, Inc during the second quarter of 2007.

(f) Charges totaling $15.6 million associated with the write-off of debt

origination costs and a prepayment premium paid upon early extinguishment

of related debt during the six months ended June 30, 2007, in conjunction

with our financing arrangements.

(g) A $1.7 million net realized foreign currency loss associated with a

cash escrow established in connection with the acquisition of BBI Holdings

Plc.

(h) A $1.9 million foreign currency gain realized on the settlement of

intercompany notes.

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

(e), (f), (g) and (h).

(j) For the six months ended June 30, 2008 and 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 net income per common share for the three months ended June

30, 2008, on an adjusted cash basis, are dilutive shares consisting of

2,344,000 common stock equivalent shares from the potential exercise of

stock options and warrants and potential dilutive shares consisting of

3,411,000 common stock equivalent shares from the potential conversion of

convertible debt securities. The net income per diluted share calculation

for the six months ended June 30, 2008, on an adjusted cash basis,

includes the add back of interest expense related to the convertible debt

of $1.5 million resulting in net income available to common stockholders

of $70.2 million. Potential dilutive shares consisting of 3,004,000 common

stock equivalent shares from the potential conversion of Series B

convertible preferred stock for the six months ended June 30, 2008 were

not used in the calculation of diluted net income per common share, on an

adjusted cash basis, because inclusion thereof would be antidilutive.

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

calculation of net income per common share for the six months ended June

30, 2007, on an adjusted cash basis, are dilutive shares consisting of

1,796,000 common stock equivalent shares from the potential exercise of

stock options and warrants. Potential dilutive shares consisting of

761,000 common stock equivalent shares from the potential conversion of

convertible debt securities for the six months ended June 30, 2007 were

not used in the calculation of diluted net income per common share, on an

adjusted cash basis, because inclusion thereof would be antidilutive.

Inverness Medical Innovations, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in $000s)

June 30, December 31,

2008 2007

(unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $167,234 $414,732

Restricted cash 3,401 141,869

Marketable securities 1,864 2,551

Accounts receivable, net 256,118 163,380

Inventories, net 180,248 148,231

Prepaid expenses and other current assets 121,566 82,211

Total current assets 730,431 952,974

PROPERTY, PLANT AND EQUIPMENT, NET 285,916 267,880

GOODWILL AND OTHER INTANGIBLE ASSETS, NET 4,793,183 3,494,174

DEFERRED FINANCING COSTS AND OTHER

ASSETS, NET 132,537 165,731

Total assets $5,942,067 $4,880,759

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Current portion of notes payable $21,005 $21,096

Other current liabilities 352,204 257,812

Total current liabilities 373,209 278,908

LONG-TERM LIABILITIES:

Notes payable, net of current portion 1,511,064 1,366,753

Deferred tax liability 447,209 326,128

Other long-term liabilities 333,119 322,303

Total long-term liabilities 2,291,392 2,015,184

TOTAL STOCKHOLDERS' EQUITY 3,277,466 2,586,667

Total liabilities and stockholders' equity $5,942,067 $4,880,759

e associated with a favorable settlement of a prior year's royalty dispute collected during the quarter, or $2.5 million net of tax benefit, resulting in a $0.03 per diluted share impact.

The Company's GAAP results for the second quarter of 2008 include amortization of $55.0 million, $23.6 million of restructuring charges, $7.2 million of stock-based compensation expense and a $0.3 million charge related to the write-up to fair market value of inventory acquired in connection with the acquisitions of Panbio Limited and BBI Holdings Plc. GAAP results for the second quarter of 2007 include amortization of $10.1 million, a $0.4 million restructuring charge, $47.3 million of non-cash stock-based compensation expense, of which $45.2 million relates to costs associated with stock option acceleration and conversion in connection with our acquisition of Biosite, Inc., a $1.2 million charge related to the write-up to fair market value of inventory acquired in connection with our accounting for the Biosite acquisition and $15.4 million of deferred financing costs and repayment premium related to the repayment of outstanding debt in conjunction with our financing arrangements related to our Biosite acquisition, offset by a $1.9 million foreign exchange gain on settlement of intercompany notes. 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, July 29, 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/346155/ using Real Player or Windows Media. 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 June 30, 2008

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis (a)

Net revenue $401,127 $- $401,127

Cost of revenue 195,025 (17,225)(b)(c)(d)(e) 177,800

Gross profit 206,102 17,225 223,327

Gross margin 51% 56%

Operating expenses:

Research and development 29,808 (5,313)(b)(c)(d) 24,495

Selling, general and

administrative 172,792 (50,794)(b)(c)(d) 121,998

Total operating expenses 202,600 (56,107) 146,493

Operating income (loss) 3,502 73,332 76,834

Interest and other income

(expense), net (38,646) 6,624 (c) (32,022)

Income tax (benefit) provision (7,698) 23,066 (h) 15,368

Equity earnings of

unconsolidated entities,

net of tax (2,902) 6,199 (b)(c) 3,297

Net (loss) income $(30,348) $63,089 $32,741

Preferred stock dividends $(3,107) $(3,107)

Net (loss) income

available to common

stockholders - basic $(33,455) $29,634

Net (loss) income per

common share

Basic $(0.43) $0.38

Diluted $(0.43)(i) $0.37 (j)

Weighted average common shares

- basic 77,647 77,647

Weighted average common shares

- diluted 77,647 (i) 82,984 (j)

Three Months Ended June 30, 2007

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis (a)

Net revenue $154,965 $- $154,965

Cost of revenue 88,625 (4,545)(b)(d)(e) 84,080

Gross profit 66,340 4,545 70,885

Gross margin 43% 46%

Operating expenses:

Research and development 12,110 (1,161)(b)(d) 10,949

Selling, general and

administrative 95,775 (53,141)(b)(c)(d) 42,634

Total operating expenses 107,885 (54,302) 53,583

Operating income (loss) (41,545) 58,847 17,302

Interest and other income

(expense), net (17,047) 13,458 (b)(f)(g) (3,589)

Income tax (benefit) provision (2,674) 5,931 (h) 3,257

Equity earnings of

unconsolidated entities,

net of tax 1,244 112 (b) 1,356

Net (loss) income $(54,674) $66,486 $11,812

Preferred stock dividends $- $-

Net (loss) income available

to common stockholders -

basic $(54,674) $11,812

Net (loss) income per common

share

Basic $(1.17) $0.25

Diluted $(1.17) (i) $0.24 (k)

Weighted average common shares -

basic 46,671 46,671

Weighted average common shares -

diluted 46,671 (i) 48,512 (k)

(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) Amortization expense of $55.0 million and $10.1 million in the second

quarter of 2008 and 2007 GAAP results, respectively, including $11.7

million and $3.3 million charged to cost of sales, $1.0 million and $0.7

million charged to research and development and $42.1 million and $6.0

million charged to selling, general and administrative, in the respective

quarters, with $0.2 million and $0.1 million charged through equity

earnings of unconsolidated entities, net of tax during the respective

quarters.

(c) Restructuring charges associated with the decision to close facilities

of $23.6 million and $0.4 million for the second quarter of 2008 and 2007

GAAP results, respectively. The $23.6 million charge for the three months

ended June 30, 2008 included $4.8 million charged to cost of sales, $3.2

million charged to research and development, $3.0 million charged to

selling, general and administrative, $6.6 million charged to interest

expense and $6.0 million charged through equity earnings of unconsolidated

entities, net of tax. The $0.4 million charge for the second quarter of

2007 was charged to selling, general and administrative. 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.

(d) Compensation costs of $7.2 million and $47.3 million associated with

stock-based compensation expense for the second quarter of 2008 and 2007

GAAP results, respectively, including $0.4 million and $0.1 million

charged to cost of sales, $1.1 million and $0.5 million charged to

research and development and $5.7 million and $46.7 million charged to

selling, general and administrative, in the respective quarters. The

$46.7 million charged to selling, general and administrative during the

2007 quarter includes $45.2 million of costs associated with stock option

acceleration and conversion in connection with our acquisition of Biosite,

Inc.

(e) A write-off in the amount of $0.3 million and $1.2 million during the

second quarter of 2008 and 2007, respectively, relating to inventory

write-ups recorded in connection with the acquisitions of Panbio Limited

and BBI Holdings Plc. during the first quarter of 2008 and Biosite, Inc

during the second quarter of 2007.

(f) A charge of $15.4 million associated with the write-off of debt

origination costs and a prepayment premium paid upon early extinguishment

of related debt during the 2007 quarter, in conjunction with our financing

arrangements related to our Biosite acquisition.

(g) A $1.9 million foreign currency gain realized on the settlement of

intercompany notes during the 2007 quarter.

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

(e), (f) and (g).

(i) For the three months ended June 30, 2008 and 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.

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

calculation of net income per common share for the three months ended June

30, 2008, on an adjusted cash basis, are dilutive shares consisting of

1,926,000 common stock equivalent shares from the potential exercise of

stock options and warrants and potential dilutive shares consisting of

3,411,000 common stock equivalent shares from the potential conversion of

convertible debt securities. The net income per diluted share calculation

for the three months ended June 30, 2008, on an adjusted cash basis,

includes the add back of interest expense related to the convertible debt

of $0.8 million resulting in net income available to common stockholders

of $30.4 million. Potential dilutive shares consisting of 6,008,000 common

stock equivalent shares from the potential conversion of Series B

convertible preferred stock for the three months ended June 30, 2008 were

not used in the calculation of diluted net income per common share, on an

adjusted cash basis, because inclusion thereof would be antidilutive.

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

calculation of net income per common share for the three months ended June

30, 2007, on an adjusted cash basis, are dilutive shares consisting of

1,841,000 common stock equivalent shares from the potential exercise of

stock options and warrants. Potential dilutive shares consisting of

1,513,000 common stock equivalent shares from the potential conversion of

convertible debt securities for the three months ended June 30, 2007 were

not used in the calculation of diluted net income per common share, on an

adjusted cash basis, because inclusion thereof would be antidilutive.

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)

Six Months Ended June 30, 2008

Non-GAAP

Adjusted

Non-GAAP Cash

GAAP Adjustments Basis (a)

Net revenue $773,360 $- $773,360

Cost of revenue 386,868 (40,839)(b)(c)(d)(e) 346,029

Gross profit 386,492 40,839
'/>"/>

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

Related biology technology :

1. Inverness Medical Innovations Agrees to Acquire Panbio Ltd.
2. Inverness - Chemogen Establish Exclusive License for TB Antibodies
3. Inverness Medical Innovations Announces Proposed Public Offering of Common Stock
4. Inverness Medical Innovations Agrees to Acquire ParadigmHealth
5. Inverness Medical Innovations Acquires ParadigmHealth
6. Inverness Medical Innovations to Participate at JP Morgan Healthcare Conference on January 8, 2008
7. Inverness Medical Innovations to Participate at 2008 Merrill Lynch Global Pharmaceutical, Biotechnology and Medical Device Conference on February 5, 2008
8. 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
9. Inverness Medical Innovations Completes Acquisition of BBI Holdings Plc
10. Inverness Medical Innovations Announces Fourth Quarter 2007 Results
11. Inverness Medical Innovations to Participate at Bank of America 2008 Smid Cap Conference on March 26, 2008
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:5/25/2016)... ... May 25, 2016 , ... The American Medical Informatics Association ... the National Coordinator for Health IT (ONC) outlining a measurement approach to interoperability ... available when and where it was needed. The organization of health informatics professionals ...
(Date:5/24/2016)... ... May 24, 2016 , ... ... and traumatic injuries, will be accelerated by research at Worcester Polytechnic Institute (WPI) ... of wound healing and tissue regeneration. , The novel method, developed by WPI ...
(Date:5/23/2016)... ... May 23, 2016 , ... ... Precision Farming in 2017 and Beyond. The paper outlines the key trends that ... ag industry. , “We’ve witnessed a lot of highs and lows as the ...
(Date:5/23/2016)... Alto, CA (PRWEB) , ... May 23, 2016 ... ... and public interest organization focused on molecular nanotechnology, announced the winners for the ... of pioneer physicist Richard Feynman, are given in two categories, one for experiment ...
Breaking Biology Technology:
(Date:3/18/2016)... 18, 2016 --> ... ICT, Manned & Unmanned Vehicles, Physical infrastructure and Perimeter Surveillance ... in the border security market and the continuing migration crisis ... Europe has led visiongain to publish this ... --> defence & security companies in the ...
(Date:3/14/2016)... , Allemagne, March 14, 2016 ... ) - --> - Renvoi : image ... --> --> ... biométriques, fournit de nouveaux lecteurs d,empreintes digitales pour ... de DERMALOG sera utilisé pour produire des cartes ...
(Date:3/9/2016)... This BCC Research report provides an overview ... Sequencing (RNA Seq) market for the years 2015, 2016 ... reagents, data analysis, and services. Use this ... market such as RNA-Sequencing tools and reagents, RNA-Sequencing data ... each segment and forecast their market growth, future trends ...
Breaking Biology News(10 mins):