detailed results of Q1/FY-2003
invernessmedical.com
WALTHAM, Mass., May 14 -- 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 ending March 31, 2003. For the three months ended March 31, 2003, Inverness Medical Innovations reported net income of $2.0 million, compared to a net loss of $31.5 million in the first quarter of 2002. After deducting amortization of the discounts and non-cash dividends on the Company's Series A Preferred Stock, net income available to common stockholders was $1.8 million, or $0.12 per diluted share, in the first quarter of 2003 compared to a net loss available to common stockholders of $33.0 million, or $4.66 per diluted share, for the first quarter of 2002. Excluding non-recurring and certain non-cash charges and income, the Company reported income of $2.0 million, or $0.13 per diluted share, compared to a loss, excluding non-recurring and certain non-cash charges and income, of $1.8 million, or $0.26 per diluted share, for the first quarter of 2002. 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 first quarter of 2003, the Company had net revenues of $64.8 million, a $27.6 million increase over the net revenues of $37.2 million in the first quarter of 2002. The majority of the revenue increase was due to the additional revenues contributed by IVC, the nutritional supplement unit acquired on March 19, 2002, and Wampole Laboratories, the professional diagnostic business acquired on September 20, 2002.
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
(in $000s, except per share amounts)
Three Months Ended March 31,
2003 2002
Net revenues $64,807 $37,248
Cost of sales 35,272 18,428
Gross profit 29,535 18,820
Operating expenses:
Research and development 4,685 3,366
Selling, general and
administrative 19,907 16,216
Charge related to asset
impairment -- 12,682
Stock-based compensation 6 10,145
Total operating expenses 24,598 42,409
Operating income (loss) 4,937 (23,589)
Interest and other income, net (2,083) 4,786
Income tax provision (856) (506)
Income (loss) before accounting
change 1,998 (19,309)
Cumulative effect of a change in
accounting principle -- (12,148)
Net income (loss) $1,998 $(31,457)
Non-cash amortization of discounts
and dividends on preferred stock (174) (1,529)
Net income (loss) available to
common stockholders $1,824 $(32,986)
Net income (loss) per common share:
Basic $0.13 $(4.66)
Diluted $0.12 (a) $(4.66)(b)
Weighted average shares - basic 13,800 7,082
Weighted average shares - diluted 15,451 (a) 7,082 (b)
(a) For the first quarter of 2003, convertible debt and preferred stock
are not included in the calculation of diluted income per share
because inclusion thereof, together with the reversal of related
interest and dividends as if such securities were converted at the
beginning of the period, would be antidilutive.
(b) For the first quarter of 2002, diluted shares are not used in the
calculation of diluted loss per share because inclusion thereof would
be antidilutive.
Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in $000s)
March 31, December 31,
2003 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $23,370 $30,668
Accounts receivable, net 37,542 37,283
Inventories 38,958 37,155
Prepaid expenses and other current
assets 9,594 8,822
Total current assets 109,464 113,928
PROPERTY, PLANT AND EQUIPMENT, NET 46,543 45,800
GOODWILL, TRADEMARKS AND OTHER
INTANGIBLE ASSETS, NET 188,144 188,813
DEFERRED FINANCING COSTS AND OTHER
ASSETS, NET 9,149 9,205
Total assets $353,300 $357,746
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of notes payable $21,109 $17,842
Other current liabilities 59,005 67,877
Total current liabilities 80,114 85,719
LONG-TERM LIABILITIES:
Notes payable, net of current portion 85,418 86,771
Other long-term liabilities 13,144 13,301
Total long-term liabilities 98,562 100,072
REDEEMABLE CONVERTIBLE PREFERRED
STOCK 9,225 9,051
TOTAL STOCKHOLDERS' EQUITY 165,399 162,904
Total liabilities and stockholders'
equity $353,300 $357,746
Inverness Medical Innovations, Inc.
Reconciliation of net income (loss) to income (loss) excluding non-
recurring and certain non-cash charges and income (a)
(in $000s, except per share amounts)
Quarter Ended March 31,
2003 2002
Net income (loss) under generally
accepted accounting principles. $1,998 $(31,457)
Non-recurring and certain non-cash
charges and income (b):
Non-cash stock-based compensation
charge 6 10,145
Non-cash interest expense related to
the amortization of
original issue discounts and
beneficial conversion features 50 3,525
Non-cash charge to mark to market an
interest rate swap agreement 130
Unrealized foreign exchange gain (216) (192)
Non-cash gain related to the
repurchase of a beneficial
conversion feature
upon early extinguishment of debt (9,600)
Non-cash impairment charges related
to the goodwill and
certain intangible assets of our
nutritional business 24,830
Employer taxes related to the
exercises of nonqualified options to
purchase restricted stock by two
key executive officers 624
Non-recurring financing costs
incurred in connection with early
extinguishment of debt 292
Total non-recurring and certain non-
cash charges and income (30) 29,624
Income (loss) excluding non-recurring
and certain non-cash charges and
income $1,968 $(1,833)
Weighted average common shares -
diluted 15,451 (d) 7,082 (e)
Diluted net income (loss) per common
share, excluding non-recurring and
certain non-cash charges and
income (c) $0.13 (d) $(0.26)(e)
(a) Management believes that income (loss) excluding non-recurring and
certain non-cash charges and income is useful because it 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 in addition to the
standard financial measurements under generally accepted accounting
principles (GAAP). Management internally evaluates the performance
of its business based on income excluding non-recurring and
non-cash charges. It should be noted that this is not a measurement
of financial performance under GAAP and should not be considered as
an alternative to net income 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) Excludes all non-cash charges and income, except depreciation and
amortization
(c) In addition to the non-cash charges listed above, the diluted net
income (loss) per common share, as shown, excludes amortization of
discounts and non-cash dividends on preferred stock which is included
in diluted net income (loss) per common share calculated in accordance
with GAAP. The charges for non-cash amortization of discounts and
dividends on preferred stock that are excluded are $174,000, or $0.01
per common share, for the quarter ended March 31, 2003 and $1,529,000,
or $0.22 per common share, for the quarter ended March 31, 2002.
(d) For the quarter ended March 31, 2003, 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.
(e) 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. |
