Inverness Medical Innovations Announces Financial Results for Fourth Quarter and Full Year 2002
WALTHAM, Mass., Feb. 20 - Inverness Medical Innovations, Inc. (Amex: IMA - News), a leading provider of women's health and nutritional products and a developer of advanced medical devices, today announced its financial results for the quarter and year ending December 31, 2002.
Inverness Medical Innovations, Inc. was formed in May 2001 as a subsidiary of Inverness Medical Technology, Inc. (IMT), and subsequently split-off as an independent public company as part of a split-off and merger transaction whereby Johnson & Johnson acquired IMT in November 2001. As part of the split-off and merger, Inverness Medical Innovations acquired all rights to IMT's women's health, nutritional supplement and clinical diagnostics businesses, as well as certain intellectual property. Because Inverness Medical Innovations had not historically been operated or accounted for as a stand-alone business, the results for the three months and year ended December 31, 2001 discussed in this press release refer to historical consolidated financial statements for Inverness Medical Innovations' businesses which have been carved out of IMT 's financial statements in accordance with the requirements of accounting principles generally accepted in the United States. Because the financial results for the three months and year ended December 31, 2001 have been carved out of IMT's past financial statements, they may not reflect what Inverness Medical Innovations' results of operations, financial position and cash flows would have been had it been a separate, stand-alone entity during those periods.
For the three months ended December 31, 2002, Inverness Medical Innovations reported income, excluding non-recurring and certain non-cash charges and income, of $2.4 million, or $0.16 per diluted share, compared to a loss, excluding non-recurring and certain non-cash charges, of $4.6 million, or $0.71 per diluted share, for the fourth quarter of 2001. Net income under accounting principles generally accepted in the United States for the fourth quarter of 2002 was $1.9 million, compared to a net loss of $25.9 million in the fourth quarter of 2001. After deducting an aggregate charge of $280,000 consisting of amortization of the discounts and non-cash dividends on the Company's Series A Preferred Stock, net income available to common shareholders was $1.6 million, or $0.11 per diluted share, in the fourth quarter of 2002 compared to a net loss available to common shareholders of $25.9 million, or $3.99 per diluted share, for the fourth quarter of 2001. A detailed reconciliation of our income, excluding non-recurring and certain non-cash charges and income, which is a non-GAAP financial measure, to our net income under GAAP is included in the schedules to this press release.
In the fourth quarter of 2002, the Company had net revenues of $65.0 million, a $52.0 million increase over the net revenues of $13.0 million in the fourth quarter of 2001. Approximately 74% of product sales for the fourth quarter related to consumer products and 26% related to professional diagnostic products. The great majority of the revenue increase was due to the additional revenues contributed by Unipath, the women's health unit acquired from Unilever on December 20, 2001, IVC, the nutritional supplement unit acquired on March 19, 2002 and Wampole, the professional diagnostic business acquired on September 20, 2002.
For the year ended December 31, 2002, the Company reported income, excluding non-recurring and non-cash charges, of $1.4 million, or $0.12 per diluted share, compared to a loss, excluding non-recurring charges and income, of $4.0 million, or $0.63 per diluted share, for the year ended December 31, 2001. Net loss under accounting principles generally accepted in the United States for the year ended December 31, 2002 was $31.1 million compared to a net loss of $24.7 million for the year ended December 31, 2001. After deducting an aggregate charge of $11.9 million consisting of accelerated amortization of the discounts and non-cash dividends on the Company's Series A Preferred Stock, net loss available to common shareholders was $43.1 million, or $4.33 per diluted share, in the year ended December 31, 2002 compared to a net loss available to common shareholders of $24.7 million, or $3.88 per diluted share, for the year ended December 31, 2001. A detailed reconciliation of our income, excluding non-recurring and certain non-cash charges and income, which is a non-GAAP financial measure, to our net loss under GAAP is included in the schedules to this press release.
Net revenues for the year ended December 31, 2002 were $207.9 million compared to net revenues of $47.3 million for the year ended December 31, 2001. The great majority of the revenue increase was due to the additional revenues contributed by Unipath, IVC and Wampole.
The Company will host a conference call beginning at 10:00 a.m. (Eastern Time) today, February 20, 2003, to discuss these results and its earnings guidance for 2003 as well as other corporate matters. During the conference call the Company may answer questions concerning business and financial developments and trends and other 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 973-935-8511 (domestic and international), an access code is not required, or via a link on the Inverness website at www.invernessmedical.com or at www.calleci.com. A replay of the call will be available by dialing 973-341-3080 (domestic and international) with an access code of 3747323. The replay will be available until 12:00 midnight Eastern on February 22, 2003. An on demand webcast of the call will be available at the Company's website two hours after the end of the call and will be accessible for 30 days through March 22, 2003 at 5 p.m. Eastern Time.
For more information about Inverness Medical Innovations, please visit our website at www.invernessmedical.com.
Inverness Medical Innovations manufactures and sells products for the women's health and nutritional product markets and is engaged in the business of developing, manufacturing, and marketing advanced medical device technologies. The Company is presently exploring new opportunities for its proprietary electrochemical and other technologies in a variety of professional diagnostic and consumer-oriented applications including immuno-diagnostics with a focus on women's health and cardiology. The Company's women's health and nutritional products are distributed to consumers through established retail distribution networks such as Wal-Mart, Walgreens and CVS. The Company is headquartered in Waltham, Massachusetts.
Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Statements Of Operations
$000s, except per share numbers
Quarter Ended December 31, Year Ended December 31,
2002 2001 2002 2001
Net revenues $64,994 $12,977 $207,897 $47,268
Cost of sales 34,663 8,318 112,508 26,149
Gross profit 30,331 4,659 95,389 21,119
Operating expenses:
Research and development 3,932 777 13,847 1,810
Selling, general and
administrative 20,272 7,858 70,554 20,233
Total operating expenses 24,204 8,635 84,401 22,043
Operating income (loss) 6,127 (3,976) 10,988 (924)
Interest and other
expense, net (2,900) (970) (6,866) (2,279)
Income tax (provision)
benefit (857) 366 (2,683) (804)
Net income (loss)
excluding non-cash
and non-recurring
items 2,370 (4,580) 1,439 (4,007)
Non-cash and non-
recurring items (a) (501) (21,327) (32,574) (20,724)
Net income (loss) $1,869 $(25,907) $(31,135) $(24,731)
Non-cash amortization of
discounts and non-cash
dividends on preferred
stock (280) - (11,948) -
Income (loss)
available to common
stockholders $1,589 $(25,907) $(43,083) $(24,731)
Basic net income (loss)
per common share,
excluding non-cash and
non-recurring items
(a) and amortization
of discounts and
non-cash dividends
on preferred stock $0.17 $(0.71) $0.14 $(0.63)
Diluted net income (loss)
per common share,
excluding non-cash and
non-recurring items
(a) and amortization of
discounts and
non-cash dividends
on preferred stock $0.16 (b) $(0.71) (d) $0.12 (c) $(0.63)(d)
Basic net income (loss)
per common share $0.12 $(3.99) $(4.33) $(3.88)
Diluted net income (loss)
per common share $0.11(b) $(3.99)(d) $(4.33)(c,d) $(3.88)(d)
Weighted average common
shares - basic 13,571 6,488 9,940 6,368
Weighted average common
shares - diluted 15,552 (b) 6,488 (d) 11,979 (c,d) 6,368 (d)
Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
$000s
December 31,
2002 2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $30,668 $52,024
Accounts receivable, net 37,283 21,576
Inventories 37,154 14,782
Prepaid expenses and other current assets 8,735 6,440
Total current assets 113,840 94,822
PROPERTY, PLANT AND EQUIPMENT, NET 45,800 20,526
GOODWILL, TRADEMARKS AND OTHER
INTANGIBLE ASSETS, NET 186,424 160,766
DEFERRED FINANCING COSTS AND OTHER
ASSETS, NET 9,075 2,407
Total assets $355,139 $278,521
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $17,842 $20,819
Other current liabilities 67,406 52,981
Total current liabilities 85,248 73,800
LONG-TERM LIABILITIES:
Long-term debt, net of current portion 86,771 57,305
Other long-term liabilities 11,165 5,908
Total long-term liabilities 97,936 63,213
REDEEMABLE PREFERRED STOCK 9,051 51,894
TOTAL STOCKHOLDERS' EQUITY 162,904 89,614
Total liabilities and stockholders'
equity $355,139 $278,521
Inverness Medical Innovations, Inc.
Reconciliation of net income (loss) to income (loss) excluding
non-recurring and non-cash items
(in $000s)
Quarter Ended December 31, Year Ended December 31,
2002 2001 2002 2001
Net income (loss) under
generally accepted
accounting principles. $1,869 $(25,907) $(31,135) $(24,731)
Non-recurring and
non-cash charges and
income:
Non-cash stock-based
compensation charge 456 10,441 10,625 10,441
Non-cash interest
expense related to the
amortization of
original issue
discounts and
beneficial
conversion features 68 2,704
Non-cash (gain) or loss
to mark to market an
interest rate swap
agreement (46) 1,223
Unrealized foreign
exchange (gain) or loss (594) 74
Non-recurring foreign
exchange gain upon
settlement of an
intercompany loan (2,593) (2,593)
Net extraordinary loss
or (gain) due to early
extinguishment of
certain debt 3,210 327 (5,130) 327
Employer taxes related
to the exercises of
nonqualified options to
purchase restricted
stock by two key
executive officers 624
Non-cash impairment
charges related to the
goodwill and
certain intangible
assets of our
nutritional business 24,830
Litigation settlement 1,704 217 1,704
Non-cash charge for in-
process research and
development related
to the acquisition of
the Unipath business 6,980 6,980
A one-time charge to
write-off deferred tax
assets 1,330 1,330
Loss or (income) from
discontinued operations
resulting from the
split-off and 545 (58)
merger transaction
between Inverness
Medical Technology,
Inc. (former
parent) and Johnson
& Johnson in
November 2001
Total non-recurring and
non-cash charges 501 21,327 32,574 20,724
Income (loss) excluding
non-recurring charges
and income $2,370 $(4,580) $1,439 $(4,007)
Add-back of interest
expense related to
dilutive convertible
debt to earnings
available to common
shareholders 45 (a)
Income (loss) available
to common stockholders,
excluding non-recurring
and non-cash charges $2,415 $(4,580) $1,439 $(4,007)
Weighted average common
shares - diluted 15,552 (a) 6,488 (c) 11,979 (b) 6,368 (c)
Diluted net income
(loss) per common
share, excluding
non-cash and
non-recurring items
and amortization
of discounts and
non-cash dividends
on preferred stock $0.16 (a) $(0.71)(c) $0.12 (b) $(0.63)(c)
(a) For the quarter ended December 31, 2002, the common stock equivalent
of convertible debt are included in the denominator of the diluted
earnings per share calculation along with a $45,000 add-back of the
related interest expense to earnings available to common shareholders.
Series A convertible preferred stock are not included in the diluted
earnings per share calculation because the inclusion thereof would be
antidilutive.
(b) For the year ended December 31, 2002, neither convertible debt nor
series A redeemable convertible preferred stock were included as
dilutive securities in the calculation of diluted earnings per share
because the inclusion of such securities would be antidilutive.
(c) Diluted shares are not used in the earnings per share calculation in
the periods where there is a loss available to common shareholders
because inclusion thereof would be antidilutive. |
