Inverness Medical Innovations Announces Financial Results for Fourth Quarter and Full Year 2002

WALTHAM, Mass., Feb. 20 /PRNewswire-FirstCall/ -- Inverness Medical Innovations, Inc. (AMEX:IMA) , 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.

This press release contains forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially due to numerous factors, including without limitation demand for the Company's products, conditions in the financial markets, the operational integration associated with any past or future acquisition transactions and other risks generally associated with such transactions, the potential market acceptance of the Company's current and future products, the intensely competitive environment in the Company's markets which could reduce the Company's market share or limit its ability to increase market share, the efficacy and safety of the Company's products, the content and timing of submissions to and decisions by regulatory authorities both in the United States and abroad, the ability to manufacture sufficient quantities of product for development and commercialization activities, the ability of the Company to successfully develop and commercialize products, the effect of pending and future legal proceedings, including the cost thereof, on the Company's financial performance and product offerings and the risks and uncertainties described in the Company's periodic reports filed with the Securities and Exchange Commission under the federal securities laws, including the Company's Annual Report on Form 10-K/A for the year ended December 31, 2001. The Company undertakes no obligation to update any forward-looking statements.

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