ABAX Abaxis, Inc. (delisted)

Alere (ALR), a medical products company focused on integrating rapid diagnostics with health management, reported first-quarter fiscal 2011 adjusted earnings per share of 61 cents, beating the corresponding Zacks Consensus Estimate of 57 cents while trailing the year-ago earnings from continuing operations of 64 cents a share. 

Reported net income was about $8.1 million (or 9 cents per share) in the first quarter compared with $9 million (11 cents per share) in the prior-year period, down 10% year over year. Reported net income in the most recent quarter contains, among other items, a gain of $19.6 million emanating from the disposition of the nutritional segment.   

Revenues

Net revenues were $582.5 million in the reported quarter, up 13% year over year, surpassing the Zacks Consensus Estimate of $562 million. 

On a segment-wise basis, revenues from Professional Diagnostics were $409.8 million, up 21.9% year over year. Recent acquisitions resulted in $30.8 million of incremental sales compared with the prior-year quarter. Adjusted organic segment growth was 6.9% on a year-over-year basis.    

Margin

Adjusted gross margin, as reported, was 55.8% in the first quarter, down from 57% in the year-ago quarter. The same for the Professional Diagnostics segment was 59.6%, down from 60.1% in the sequentially prior quarter while that for the Health Management unit increased to 49% from 47.6% in the preceding period.    

Balance Sheet

Cash and cash equivalents totaled $319.6 million as of March 31, 2011, up 15.3% on a year-over-year basis. Long-term liabilities, in the form of notes payable, amounted to $2.4 billion, up 12.2%.

Outlook

Diagnostic tests are shifting closer to the consumers and into the home testing market, as more diagnostic tests are being developed to monitor patients rather than simply diagnose them. Alere's strategy of combining disease management with point-of-care testing (“POCT”), in a manner that encourages patients to take responsibility over their overall health care, is viewed as a prudent approach while at the same time ensuring affordability.

In addition to growing its revenues through a combination strategy of continued acquisitions and measured organic growth, the company is committed to improving its operating margin. Further, its product pipeline is strong, which has been developed through a combination of internal R&D as well as serial acquisitions. One of the company’s competitors is Abaxis (ABAX).

 
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