Alere Inc. (ALR, Financial), the diagnostic tests manufacturer being acquired by Abbott Laboratories (ABT, Financial) for $5.3 billion, delivered its financial results for the second quarter of 2017 on Aug. 3.
The company closed the quarter with a $92.7 million net loss, a nearly 157% decline from the comparable quarter of 2016 when it posted a loss of $38.258 million.
The non-GAAP Ebitda was $44.144 million versus $90.518 million in the prior-year quarter.
The diluted loss per share was $1.13, down nearly 157% from a loss of 44 cents last year.
Revenue for the quarter came in at $557.7 million, an 8.6% decrease year over year. Of this revenue, $554.7 million was from net product sales and services and the remainder from licenses and royalties.
During the quarter, the company also provided customers with Arriva products for a total amount of $14 million. This was not booked as revenue, however, because it did not have the requirements under the Centers for Medicare and Medicaid Services (CMS) for reimbursement at the time of shipment.
Arriva is a subsidiary of Alere and the largest contract supplier under the Medicare National Mail Order Competitive Bid Program for Diabetes Testing Supplies (DTS).
The cardiometabolic diagnostic segment decreased 16.5% to $139.8 million; the infectious disease diagnostic segment decline 12.1% to $166.5 million; and toxicology was up 1.1% to $159.9 million.
Concerning its financial situation, the company had approximately $491.7 million in cash on hand and securities as of June 30, or $5.63 per diluted share. The current ratio is 2.04. Total long-term debt amounted to $3.11 billion. The company’s debt burden is considerable with a long-term debt-equity ratio of 157.45, which is higher than the industry average of 36.27. A lower interest coverage ratio of 0.77 suggests Alere may have issues covering interest expenses on outstanding debt.
GuruFocus gives Alere a financial strength rating of 4 out of 10 and a profitability and growth ratio of 4 out of 10.
Alere closed at $49.71 per share on Thursday, down 75 cents or 1.49% from the previous trading day, with a total volume of 4,165,024 shares traded on the New York Stock Exchange.
The company has an enterprise value of $7.3 billion, an EV/Ebitda ratio of 28.15 and a market capitalization of $4.34 billion.
Alera has a price-book (P/B) ratio of 3.63, a price-sales (P/S) ratio of 1.83 and price-earnings (P/E) ratio of -19.90. The forward P/E ratio is 24.10.
Disclosure: I have no positions in any stocks mentioned in this article.
