Alere (ALR) Q4 2011 Earnings Call February 08, 2012 8:30 am ET Executives Doug Guarino - Director of Corporate Communications & Corporate Relations Ron Zwanziger - Chairman of the Board, Chief Executive Officer and President David A. Teitel - Chief Financial Officer, Principal Accounting Officer, Vice President and Treasurer Analysts Ashim Anand - Natixis Bleichroeder LLC, Research Division John M. Putnam - Capstone Investments, Research Division Peter Lawson - Mizuho Securities USA Inc., Research Division Zarak Khurshid - Wedbush Securities Inc., Research Division Gregory J. Simpson - Wunderlich Securities Inc., Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division Jonathan P. Groberg - Macquarie Research Bill Bonello - RBC Capital Markets, LLC, Research Division Jeffrey Frelick - Canaccord Genuity, Research Division Nicholas Jansen - Raymond James & Associates, Inc., Research Division Presentation Operator
Additionally, please note that during this 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.And with that, let me turn the call over to Alere Chairman and CEO, Ron Zwanziger. Ron? Ron Zwanziger Thanks, Doug, and good morning, everyone. Our fourth quarter results were impacted by significant headwinds, which emerged in Europe and went through the quarter and not only affected our financial results but our comfort in setting and operating to our 2012 earnings outlook. On the positive side, sales growth in Asia Pacific region was strong, global new product sales showed encouraging acceleration, and our Health Management unit continued to stabilize. Finally, in the fourth quarter, we reentered the diabetes marketplace and began to address the primary missing element in our portfolio approach towards the most expensive chronic diseases. I'll expand briefly now on some of these elements. While Europe remained relatively strong during the first 10 months of the year, our November, December were particularly weak. While we had been highlighting the risk in Europe on earnings call during the past year, the abruptness which the situation deteriorate was still frankly surprising to us. While we're pleased that sales in Europe have been steady so far in the first quarter, continued uncertainty over the macroeconomic environment combined with how quickly ordering patterns can change has us feeling uncomfortable about predicting the European outlook for 2012. This concern compounded by an ease over the potential for further declines in U.S. states spending on health improvements programs led us in an Investor Conference in January to provide only minimal guidance around 2012 earnings. At that conference, we said that we expect to exceed $250 million in adjusted cash basis EPS in 2012, but the extent to which we exceed that minimum target cannot be predicted at this time, which continues to be our view today.
Despite the fourth quarter challenges in Europe, sales in the Asia Pacific region continued to accelerate supported by substantial growth in our high-margin cardiology and infectious disease products. As was the case in Q3, sales in Japan was strong in the fourth quarter with the revenues continuing to rebound from the effects of the earlier problems in that country, supported as well as the impact of an expanded sales force supporting the numerous cardiology products, which were approved recently in Japan.Through the full year of 2011, we achieved new product sales of $39 million, with $13 million of those occurring in the fourth quarter. The improvement in new product revenue performance in Q4 was driven by increases in sales related to our CD4 Analyzer as well as our blood gas and electrolyte system. These important platforms are achieving increased medical adoption, and this is a key factor behind our belief that new product sales will increasingly contribute to our expanding organic growth rate over the next several years despite any short-term fluctuations associated with economic issues in various countries. Read the rest of this transcript for free on seekingalpha.com