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Alere Reports Preliminary Financial Results for FY 2015 and Q1 2016

NEW YORK (GenomeWeb) – Alere yesterday released what it said was “preliminary unaudited financial information” for FY 2015, and for the quarter ended March 31.

The firm reported estimated revenues of $2.44 billion to $2.47 billion, and net income from continuing operations of $10 million to $25 million for FY 2015, which ended Dec. 31, 2015. Alere also reported estimated revenues of $573.0 million to $593.0 million, and an estimated income range from continuing operations of a loss of $8.0 million to a gain of $2.0 million for the three months ended March 31.  

The release followed the firm’s disclosure earlier this year that it wouldn’t be able to file its 2015 Form 10-K by March 15 as it needed to complete an analysis related to the timing of revenue recognition — specifically, revenue cutoff in Africa and China for FY 2013, 2014, and 2015, and each of the quarters in 2014 and 2015.

Alere said in its statement that over the past four months, it has reviewed hundreds of customer contracts and thousands of individual revenue transactions to determine whether revenue was recognized in accordance with US generally accepted accounting principles. The company said it had incorrectly recorded the timing of recognition of certain revenue transactions, including in Africa and China, in FY 2013 and FY 2014 and in the first three quarters of FY 2015.   

The firm also said it doesn’t expect the misstatements identified to date to be material to any of its previously-issued quarterly or annual financial statements. However, it does anticipate that the cumulative effect of reflecting these misstatements in the current year would be material to FY 2015.   

This release of financial information may also have an effect on Alere's acquistion deal with Abbott, which agreed earlier this year to pay $5.8 billion to buy the company. Uncertainty around the acquisition emerged because Alere delayed filing its 10-K report with US securities regulators. Abbott then requested termination of the acquisition, which Alere refused. Alere has also received a grand jury subpoena from the US Department of Justice over sales practices and dealings in Africa, Asia, and Latin America.

Alere said that in an upcoming 2015 Form 10-K, it expects to revise its previously-issued annual financial statements for FY 2013 and 2014, and the interim financial statements for Q1, Q2, and Q3 of 2015.

Leerink Partners analyst Dan Leonard said today in a research note that he believes the odds that the acquisition by Abbott will be consummated are higher than those reflected in the current stock price.

Shares of Alere were up almost 8 percent at $42.44 in morning trading on the New York Stock Exchange, while shares of Abbott were up a quarter of 1 percent at $42.38.