Alere Earnings Call Nuggets: Molecular Strategy and No Longer Giving Guidance
Isaac Ro – Goldman Sachs: Thanks for the color you gave on 2013 expectations without being specific can you guys commit to maybe raising earning this year, year-over-year?
David Teitel – CFO, VP and Treasurer: Well, as you know we decided not to give earnings guidance. But it will surprise if we didn’t manage to do that.
Isaac Ro – Goldman Sachs: Then maybe just on the molecular strategy, I was interested by your comments there, what was across the landscape there have been first movers here who’ve seen really solid growth, but having said that the core test opportunities as you pointed out are somewhat crowded and having said that it’s also nothing notable, it seems profitability for some of these companies has also been a challenge. So, can you just help us understand how you think you are differentiated both on the technology as well as your channel strategy?
Ron Zwanziger – Chairman, CEO and President: Sure, I mean so the reason we were late is because we wanted to wait and find and acquire and develop, the kind of technology that really would lead to a rapid test, in a sense and when we talk about rapid test, we made a test that anyone can use by themselves in any setting, any ambulatory setting. So, our channel is that tends to be different to what you have been talking about. Secondly, as it relates to the technology, we’re only ever interested in technology, which because of the nature of our rapid diagnostics involves very high volume that the technology has to lend itself to high volume manufacturing, which necessitates much more effort upfront in terms of plants and design and automation and so forth. And once you get through that, you end up with good gross margin ability to make some real money, which I think is probably way you are heading. By the way that explains why we’ve been carrying so much losses in the development program, so for example, in 2012, we probably carried around $30 million to $32 million loss on this program just out of our facility in Jena with a good chunk of that cost. Dealing with the issues of scale-up and manufacturability and process issues, which if you don’t deal with them you can never enter profitability and we are seeing a sharp improvement in – as a result of automation in our cost structure. And what we now need, because we build the extensive plant, and now we’re beginning to see growth and expect some real growth in 2013. You get efficiencies and profitabilities. And so the result we are optimistic both about the nature of our platform and that targets, the fact that are truly rapid in the sense that we mean. I just realize that was probably rather longer response than you expected.
Isaac Ro – Goldman Sachs: Any updates on potential divestiture of non-core assets?
Ron Zwanziger – Chairman, CEO and President: We have some due diligence being done on some units at the moment as part of the process, whether that will lead to divest, I don’t know, but we do have a process and we do have some party doing from due diligence on some assets at the moment.
No Longer Giving Guidance
Bill Bonello – Craig-Hallum: Couple of things. One, just do you maybe want to give us some explanation of why you know longer give guidance? Then Ron, I thought, I heard you say, you’d be surprised, if you couldn’t do better on the net income basis, which is a little bit surprising to me given the trajectory of where earnings have gone, so I just love to hear the thinking behind that?
Ron Zwanziger – Chairman, CEO and President: I mean, we have started giving guidance at the time of the financial crisis when the world was falling apart and everybody was in panic and we didn’t see that we would have particular issues. So, in order to sort of give reassurances that our earnings went about to unravel completely the way (semi) predictions, we thought we’d come in, and so, we did it, and a lot of people encouraged us to do it, but I don’t think we get particular benefit for providing it, and so we are going to back to the way we had been for years. So, for us it’s actually the norm not providing guidance as opposed to providing guidance. What was the second part of your question, Bill?
Bill Bonello – Craig-Hallum: The second part was in response the Isaac’s question, you said, you’d be surprised, if you didn’t more in ’13 then in ’12, which just given the Triage issues and the trajectory of earnings in ’12, I’m just trying to understand, how that’s possible?
Ron Zwanziger – Chairman, CEO and President: Well, so the main reason is I think that despite the fact that we have the delays on Triage and Dave went through a great deal of couple to giving you folks so much information around it. The bottom line basically is that, we are a quarter behind where we thought we would be in a sort of very complex issue involving a several 100 people in dealing with the issues in San Diego. Now, the extra quarter delay means that we’ll have been out of the market, or many of the customers that have been out of the market longer, which means, recovery will be difficult. But all that said, I’m actually quite optimistic that we will, in fact, get on top of the volume issue. We are getting very – from the customers that we are shipping to – and after all, we are shipping a fair amount anyway, we’re getting sort of very good feedback. So I’m actually fairly optimistic that even if we do encounter more delays beyond anything we’ve already said, and the indications that Dave already gave, I’m actually fairly optimistic that we’ll recover. In many ways, you can sort of view Triage as sort of a new growth opportunity given the hammering we’ve taken in the third and fourth quarters of last year. So I do think that as we get on top of it, that later this year we should see a good recovery.
Bill Bonello – Craig-Hallum: Then just one housekeeping. Is the $11 million royalty is that a one-time item and just to be clear, it was included in the adjusted EPS?
David Teitel – CFO, VP and Treasurer: It was included in the adjusted EPS, as we always include royalties.
Ron Zwanziger – Chairman, CEO and President: Now, as to whether it was a one-time issue, first of all, this particular involved additional royalties, including some minimums, so that would be pretty encouraging. The license was actually non-exclusive, and we’ve had a significant interest in the technology and these are in areas that we don’t plan to develop ourselves. So in some respect it wasn’t really a one-time event.
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