Alere Inc. ( ALR) Q3 2011 Earnings Call October 26, 2011 8:30 AM ET Executives Doug Guarino – Director, Corporate Relations Ron Zwanziger – Chairman, President and CEO David Teitel – CFO, VP and Treasurer Analysts Jon Groberg – Macquarie Capital John Putnam – Capstone Investments Peter Lawson – Mizuho Securities Zarak Khurshid – Wedbush Ashim Anand – Natixis Greg Simpson – Wunderlich Jeff Frelick – Canaccord Isaac Ro – Goldman Sachs Presentation Operator
Additionally, please note that during the call we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available on the company’s website at alere.com.With that, let me turn the call over to Alere Chairman and CEO, Ron Zwanziger. Ron? Ron Zwanziger Thanks, Doug, and good morning, everyone. I’m pleased to report a strong third quarter highlighted by currency adjusted organic growth in our diagnostics business of 8.7%. Given the increasing uncertainty in the world, we carefully managed expenses throughout the third quarter to deliver solid leverage below the line. In response to continuing worldwide economic uncertainties, we will continue to carefully monitor spending and further tighten as necessary to respond to any additional pressures. Despite the ongoing EU debt crisis, our European in particular has performed well throughout 2011 and sales in the third quarter were no exception. Supported by new product sales, revenues in Europe reflected strong organic growth, particularly in our cardiology and infectious disease units. We feel well-positioned for the rest of the year in this geography. Sales growth in Asia were also particularly strong with revenues in Japan beginning to rebound from the effect of earthquake earlier this year and further benefiting from higher sales of recently cleared new cardiology products. Additionally, the investments we made in R&D and sales force during the first half of the year have begun to show earlier results which we expect to accelerate through to ‘12. In the U.S., an otherwise strong performance, was offset by the expected negative effect of ongoing quality and related FDA problems being experienced by Beckman Coulter with the sales of our BMP test for the use on their instrument in the U.S. down 9% to $2 million in the quarter compared to last year.
Viewing global revenue trends as a whole and factoring the projected income of new product sales over the next several years, we continue to expect strong and increasing organic topline growth for our Professional Diagnostics business throughout 2012 and beyond.In our Health Management unit consistent with the trends we highlighted in our Q2 call, revenue declined sequentially in our smoking cessation unit primarily a result of state budgetary pressures. Additionally, revenues in our coagulation monitoring business also declined for the third quarter in a row as the final negative impact of the CMS reimbursement policy change flow through their results. This impact has now been fully absorbed by the business and we expect to return to modest growth for our home monitoring unit in the fourth quarter. Read the rest of this transcript for free on seekingalpha.com