Alere Inc. Announces Fourth Quarter 2011 Results

Alere Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and

Reconciliation to Non-GAAP Adjusted Cash Basis Amounts

(in $000s, except per share amounts)

Three Months Ended December 31, 2011

Three Months Ended December 31, 2010

Non-GAAP

Non-GAAP

Adjusted

Adjusted

Non-GAAP

Cash

Non-GAAP

Cash

GAAP

Adjustments

Basis (a)

GAAP

Adjustments

Basis (a)

Net product sales and services revenue

$  645,359

$              1,452

(b)

$     646,811

$     573,747

$                    -

$     573,747

License and royalty revenue

5,750

-

5,750

4,707

-

4,707

Net revenue

651,109

1,452

652,561

578,454

578,454

Cost of net revenue

310,171

(21,967)

(c) (d) (e) (g)

288,204

275,368

(17,077)

(c) (d) (e) (f)

258,291

     Gross profit

340,938

23,419

364,357

303,086

17,077

320,163

     Gross margin

52%

56%

52%

55%

Operating expenses:

Research and development

37,503

(2,329)

(c) (e)

35,174

37,091

(2,973)

(c) (e)

34,118

Selling, general and administrative

264,656

(76,830)

(c) (d) (e) (h) (i)

187,826

292,870

(133,250)

(c) (d) (e) (h) (i) (n) (p)

159,620

Goodwill impairment charge

383,612

(383,612)

(m)

1,006,357

(1,006,357)

(m)

-

  Total operating expenses

685,771

(462,771)

223,000

1,336,318

(1,142,580)

193,738

     Operating income (loss)

(344,833)

486,190

141,357

(1,033,232)

1,159,657

126,425

Interest and other income (expense), net

(42,417)

(4,478)

(d) (j) (k) (l)

(46,895)

(30,457)

(87)

(d)

(30,544)

Income (loss) from continuing operations before provision (benefit) for income taxes

(387,250)

481,712

94,462

(1,063,689)

1,159,570

95,881

Provision (benefit) for income taxes

(23,936)

54,168

(s)

30,232

(28,967)

55,064

(s)

26,097

Income (loss) from continuing operations before equity earnings of unconsolidated entities, net of tax

(363,314)

427,544

64,230

(1,034,722)

1,104,506

69,784

Equity earnings (losses) of unconsolidated entities, net of tax

3,602

304

(c)

3,906

2,371

38

(c) (d)

2,409

Income (loss) from continuing operations

(359,712)

427,848

68,136

(1,032,351)

1,104,544

72,193

Income (loss) from discontinued operations, net of tax

-

-

-

(516)

11

(q)

(505)

Net income (loss)

(359,712)

427,848

68,136

(1,032,867)

1,104,555

71,688

Less: Net income attributable to non-controlling interests, net of tax

73

21

(o)

94

251

251

(o)

502

Net income (loss) attributable to Alere Inc. and Subsidiaries

$ (359,785)

$          427,827

$       68,042

$ (1,033,118)

$       1,104,304

$       71,186

Preferred stock dividends

$     (5,367)

$       (5,367)

$        (6,234)

$       (6,234)

Net income (loss) available to common stockholders

$ (365,152)

$       62,675

$ (1,039,352)

$       64,952

Basic net income (loss) per common share attributable to Alere Inc. and Subsidiaries:

Basic income (loss) per common share from continuing operations

$       (4.62)

$           0.79

$        (12.23)

$           0.77

Basic income (loss) per common share from discontinued operations

$            -

$              -

$          (0.01)

$         (0.01)

Basic net income (loss) per common share

$       (4.62)

$           0.79

$        (12.24)

$           0.76

Diluted net income (loss) per common share attributable to Alere Inc. and Subsidiaries:

Diluted income (loss) per common share from continuing operations

$       (4.62)

(t)

$           0.74

(u)

$        (12.23)

(t)

$           0.71

(v)

Diluted income (loss) per common share from discontinued operations

$            -

(t)

$              -

(u)

$          (0.01)

(t)

$         (0.01)

(v)

Diluted net income (loss) per common share

$       (4.62)

(t)

$           0.74

(u)

$        (12.24)

(t)

$           0.71

(v)

Weighted average common shares - basic

79,034

79,034

84,924

84,924

Weighted average common shares - diluted

79,034

(t)

92,952

(u)

84,924

(t)

101,670

(v)

(a) In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or loss (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business.  In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant.  Management believes that excluding such charges and income from net income or loss allows investors and management to evaluate and compare the Company's operating results from continuing operations from period to period in a meaningful and consistent manner.  Due to the frequency of their occurrence in its business, the Company does not adjust net income or loss for the costs associated with litigation, including payments made or received through settlements.  It should be noted that "net income or loss on an adjusted cash basis" is not a standard financial measurement under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered as an alternative to net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, "net income or loss on an adjusted cash basis" presented in this press release may not be comparable to similar measures used by other companies.

(b)  Approximately $1.5 million in estimated revenue related to acquired software license contracts will not be recognized for the fourth quarter of 2011 due to business combination accounting rules.

(c) Amortization expense of $80.9 million and $78.7 million in the fourth quarter of 2011 and 2010 GAAP results, respectively, including $15.0 million and $16.3 million charged to cost of sales, $1.5 million and $1.3 million charged to research and development, $64.2 million and $60.9 million charged to selling, general and administrative, with $0.2 million and $0.2 million charged through equity earnings of unconsolidated entities, net of tax, during each of the respective quarters.

(d) Restructuring associated with the decision to close facilities resulted in a charge of $8.8 million and $1.6 million for the fourth quarter of 2011 and 2010 GAAP results, respectively. The $8.8 million charge for the fourth quarter of 2011 included $0.6 million charged to cost of sales, $8.1 million charged to selling, general and administrative expense and $0.1 million charged to interest expense. The $1.6 million charge for the fourth quarter of 2010 included $0.6 million charged to cost of sales, $1.3 million charged to selling, general and administrative expense, a net recovery of $0.1 million recorded to interest and other income (expense), net and a net recovery of $0.2 million recorded through equity earnings of unconsolidated entities, net of tax

(e) Compensation costs of $4.9 million and $6.9 million associated with stock-based compensation expense for the fourth quarter of 2011 and 2010 GAAP results, respectively, including $0.4 million and $0.5 million charged to cost of sales, $0.8 million and $1.7 million charged to research and development and $3.7 million and $4.7 million charged to selling, general and administrative, in the respective periods.

(f) A net recovery in the amount of $0.3 million during the fourth quarter of 2010, relating to inventory write-ups recorded in connection with acquisitions. (See also footnote o below.)

(g) A write-off in the amount of $6.0 million during the fourth quarter of 2011, relating to inventory write-ups recorded in connection with acquisitions.

(h) Acquisition-related costs in the amount of $5.3 million and $1.4 million in the fourth quarter of 2011 and 2010 GAAP results, respectively, recorded in connection with ASC 805, Business Combinations.  

(i) $4.4 million of income and $4.1 million of expense in the fourth quarter of 2011 and 2010 GAAP results, respectively, recorded in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805, Business Combinations.

(j) Interest expense of $1.3 million recorded in connection with fees paid for certain debt modifications and the termination of our senior secured credit facility.

(k) A $5.4 million realized foreign currency gain in the fourth quarter of 2011 GAAP results associated with a bank account funded for the acquisition of Axis-Shield plc.

(l) A $0.5 million gain related to previously-owned shares of Axis-Shield plc recorded in connection with the completion of the acquisition during the fourth quarter of 2011.

(m) A goodwill impairment charge of $383.6 million and $1.0 billion during the fourth quarter of 2011 and 2010 GAAP results, respectively, related to our health management reporting unit and business segment.

(n) A $60.1 million compensation charge associated with our acquisition of minority shares of Standard Diagnostics, Inc. during the fourth quarter of 2010.

(o) Amortization expense of $28.0 thousand ($21.0 thousand, net of tax) and $0.3 million ($0.3 million, net of tax) in the fourth quarter of 2011 and 2010 GAAP results.

(p) A $0.7 million fair value write-down in the fourth quarter of 2010 recorded in connection with an idle facility.

(q) Expenses of $18.0 thousand ($11.0 thousand, net of tax) in the fourth quarter of 2010 incurred in connection with the sale of our vitamins and nutritional supplements business.

(s) Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n) and (p).

(t) For the three months ended December 31, 2011 and 2010, potential dilutive shares were not used in the calculation of diluted net loss per common share under GAAP because inclusion thereof would be antidilutive.

(u) Included in the weighted average diluted common shares for the calculation of net income per common share for the three months ended December 31, 2011, on an adjusted cash basis, are dilutive shares consisting of 241,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities and 10,239,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock. The diluted net income per common share calculation for the three months ended December 31, 2011, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $0.7 million and the add back of $5.4 million of preferred stock dividends related to the Series B convertible preferred stock, resulting in net income available to common stockholders of $68.7 million for the three months ended December 31, 2011.

(v) Included in the weighted average diluted common shares for the calculation of net income per common share for the three months ended December 31, 2010, on an adjusted cash basis, were dilutive shares consisting of 1,188,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,893,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock, 115,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and 112,000 potentially issuable shares of common stock associated with contingent consideration arrangements. The diluted net income per common share calculation for the three months ended December 31, 2010, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $0.7 million, the add back of $6.2 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $24.0 thousand resulting in net income available to common stockholders of $71.8 million for the three months ended December 31, 2010.

Alere Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and

Reconciliation to Non-GAAP Adjusted Cash Basis Amounts

(in $000s, except per share amounts)

Year Ended December 31, 2011

Year Ended December 31, 2010

Non-GAAP

Non-GAAP

Adjusted

Adjusted

Non-GAAP

Cash

Non-GAAP

Cash

GAAP

Adjustments

Basis (a)

GAAP

Adjustments

Basis (a)

Net product sales and services revenue

$ 2,363,054

$              1,452

(b)

$  2,364,506

$  2,134,588

$                    -

$  2,134,588

License and royalty revenue

23,473

-

23,473

20,759

-

20,759

Net revenue

2,386,527

1,452

2,387,979

2,155,347

-

2,155,347

Cost of net revenue

1,140,692

(73,634)

(c) (d) (e) (g)

1,067,058

1,020,760

(75,404)

(c) (d) (e) (f)

945,356

     Gross profit

1,245,835

75,086

1,320,921

1,134,587

75,404

1,209,991

     Gross margin

52%

55%

53%

56%

Operating expenses:

Research and development

150,165

(16,915)

(c) (d) (e)

133,250

133,278

(12,370)

(c) (d) (e)

120,908

Selling, general and administrative

964,913

(270,810)

(c) (d) (e) (h) (i) (l)

694,103

946,041

(333,265)

(c) (d) (e) (h) (i) (o)

612,776

Goodwill impairment charge

383,612

(383,612)

(n)

1,006,357

(1,006,357)

(n)

-

  Total operating expenses

1,498,690

(671,337)

827,353

2,085,676

(1,351,992)

733,684

     Operating income (loss)

(252,855)

746,423

493,568

(951,089)

1,427,396

476,307

Interest and other income (expense), net

86,808

(241,986)

(d) (j) (k) (l) (m) (p) (q)

(155,178)

(116,697)

(3,042)

(d) (h) (q)

(119,739)

Income (loss) from continuing operations before provision (benefit) for income taxes

(166,047)

504,437

338,390

(1,067,786)

1,424,354

356,568

Provision (benefit) for income taxes

(28,349)

136,356

(u)

108,007

(29,931)

144,214

(u)

114,283

Income (loss) from continuing operations before equity earnings of unconsolidated entities, net of tax

(137,698)

368,081

230,383

(1,037,855)

1,280,140

242,285

Equity earnings of unconsolidated entities, net of tax

8,524

1,489

(c) (d)

10,013

10,566

3,750

(c) (d)

14,316

Income (loss) from continuing operations

(129,174)

369,570

240,396

(1,027,289)

1,283,890

256,601

Income from discontinued operations, net of tax

-

-

-

11,397

191

(r)

11,588

Net income (loss)

(129,174)

369,570

240,396

(1,015,892)

1,284,081

268,189

Less: Net income attributable to non-controlling interests, net of tax

233

75

(s)

308

1,418

3,714

(s) (t)

5,132

Net income (loss) attributable to Alere Inc. and Subsidiaries

$  (129,407)

$          369,495

$     240,088

$ (1,017,310)

$       1,280,367

$     263,057

Preferred stock dividends

$    (22,049)

$     (22,049)

$      (24,235)

$     (24,235)

Preferred stock repurchase

$      23,936

$          (23,936)

(y)

$              -

$               -

$              -

Net income available to common stockholders

$  (127,520)

$     218,039

$ (1,041,545)

$     238,822

Basic net income (loss) per common share attributable to Alere Inc. and Subsidiaries:

Basic income (loss) per common share from continuing operations

$        (1.53)

$           2.62

$        (12.47)

$           2.69

Basic income per common share from discontinued operations

$              -

$              -

$           0.14

$           0.14

Basic net income (loss) per common share

$        (1.53)

$           2.62

$        (12.33)

$           2.83

Diluted net income (loss) per common share attributable to Alere Inc. and Subsidiaries:

Diluted income (loss) per common share from continuing operations

$        (1.53)

(v)

$           2.48

(w)

$        (12.47)

(v)

$           2.51

(x)

Diluted income per common share from discontinued operations

$              -

(v)

$              -

(w)

$           0.14

(v)

$           0.11

(x)

Diluted net income (loss) per common share

$        (1.53)

(v)

$           2.48

(w)

$        (12.33)

(v)

$           2.63

(x)

Weighted average common shares - basic

83,128

83,128

84,445

84,445

Weighted average common shares - diluted

83,128

(v)

98,079

(w)

84,445

(v)

101,284

(x)

(a) In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or loss (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business.  In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant.  Management believes that excluding such charges and income from net income or loss allows investors and management to evaluate and compare the Company's operating results from continuing operations from period to period in a meaningful and consistent manner.  Due to the frequency of their occurrence in its business, the Company does not adjust net income or loss for the costs associated with litigation, including payments made or received through settlements.  It should be noted that "net income or loss on an adjusted cash basis" is not a standard financial measurement under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered as an alternative to net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, "net income or loss on an adjusted cash basis" presented in this press release may not be comparable to similar measures used by other companies.

(b)  As of December 31, 2011, approximately $1.5 million, $4.1 million, $2.2 million, $1.4 million, $0.7 million and $0.2 million in estimated revenue related to acquired software license contracts will not be recognized in fiscal 2011, fiscal 2012 , fiscal 2013, fiscal 2014, fiscal 2015 and fiscal 2016, respectively, due to business combination accounting rules.

(c) Amortization expense of $308.8 million and $299.4 million for the year 2011 and 2010 GAAP results, respectively, including $63.2 million and $63.0 million charged to cost of sales, $12.7 million and $4.8 million charged to research and development, $232.0 million and $209.6 million charged to selling, general and administrative, with $0.9 million and $0.9 million charged through equity earnings of unconsolidated entities, net of tax, during each of the respective periods.

(d) Restructuring charges associated with the decision to close facilities of $29.1 million and $15.1 million for the year 2011 and 2010 GAAP results, respectively.  The $29.1 million charge for the year ended December 31, 2011 included $2.9 million charged to cost of sales, $0.4 million charged to research and development, $24.9 million charged to selling, general and administrative expense, $0.3 million charged to interest expense and $0.6 million charged through equity earnings of unconsolidated entities, net of tax. The $15.1 million charge for the year ended December 31, 2010 included $3.9 million charged to cost of sales, $0.5 million charged to research and development, $10.9 million charged to selling, general and administrative expense, a net recovery of $3.1 million recorded to interest and other income (expense), net and $3.0 million charged through equity earnings of unconsolidated entities, net of tax

(e) Compensation costs of $21.2 million and $29.9 million associated with stock-based compensation expense for the year 2011 and 2010 GAAP results, respectively, including $1.5 million and $1.9 million charged to cost of sales, $3.9 million and $7.1 million charged to research and development and $15.8 million and $20.9 million charged to selling, general and administrative, in the respective periods.

(f) A write-off in the amount of $6.6 million during the year ended December 31, 2010, relating to inventory write-ups recorded in connection with acquisitions.  (See also footnote s below.)

(g) A write-off in the amount of $6.0 million during the year ended December 31, 2011, relating to inventory write-ups recorded in connection with acquisitions.  

(h) Acquisition-related costs in the amount of $11.5 million and $8.3 million for the year 2011 and 2010 GAAP results, respectively, recorded in connection with ASC 805, Business Combinations. The $8.3 million of acquisition-related costs recorded during 2010 included $8.2 million charged to selling, general and administrative and $0.1 million charged to interest expense.

(i) $14.1 million of income and $1.8 million of expense for the year 2011 and 2010 GAAP results, respectively, recorded in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805, Business Combinations.

(j) A $1.9 million realized foreign currency loss associated with the settlement of an acquisition-related contingent consideration obligation for the year 2011.

(k) Interest expense of $32.5 million recorded in connection with fees paid for certain debt modifications and the termination of our senior secured credit facility and related interest rate swap agreement for the year 2011.

(l) A $12.7 million realized foreign currency loss for the year 2011 GAAP results associated with a bank account funded for the acquisition of Axis-Shield plc.

(m) A $0.5 million gain related to previously-owned shares of Axis-Shield plc recorded in connection with the completion of the acquisition during the fourth quarter of 2011.

(n) A goodwill impairment charge in the amount of $383.6 million and $1.0 billion for the year 2011 and 2010 GAAP results, respectively, related to our health management reporting unit and business segment.

(o) A $60.1 million compensation charge associated with our acquisition of minority shares of Standard Diagnostics, Inc. during the fourth quarter of 2010.

(p) Recognition of a $288.9 million gain originally recorded in connection with the formation of SPD, our 50/50 joint venture with the Procter & Gamble Company.

(q) A $0.6 million and $0.7 million fair value write-down for the year 2011 and 2010, respectively, recorded in connection with an idle facility.

(r) Expenses of $0.3 million ($0.2 million, net of tax) incurred in connection with the sale of our vitamins and nutritional supplements business for the year 2010 GAAP results.

(s) Amortization expense of $0.1 million ($0.1 million, net of tax) and $3.2 million ($2.4 million, net of tax) for the year 2011 and 2010 GAAP results, respectively.

(t) A write-off in the amount of $1.7 million ($1.3 million, net of tax) in the first nine months of 2010 relating to inventory write-ups attributable to operating results of non-controlling interests.

(u) Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), and (q).

(v) For the year ended December 31, 2011 and 2010, potential dilutive shares were not used in the calculation of diluted net income per common share under GAAP because inclusion thereof would be antidilutive.

(w) Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2011, on an adjusted cash basis, are dilutive shares consisting of 768,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 142,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and 10,602,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock. The diluted net income per common share calculation for the year ended December 31, 2011, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $2.8 million, the add back of $22.0 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.1 million, resulting in net income available to common stockholders of $243.0 million for the year ended December 31, 2011.

(x) Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2010, on an adjusted cash basis, were dilutive shares consisting of 1,412,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,438,000 common stock equivalent shares from the potential conversion of convertible debt securities, 11,654,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock, 306,000 common stock equivalents from the potential settlement of a portion of the deferred purchase price consideration related to the ACON Second Territory Business and 28,000 potentially issuable shares of common stock associated with contingent consideration arrangements. The diluted net income per common share calculation for the year ended December 31, 2010, on an adjusted cash basis, included the add back of interest expense related to the convertible debt of $2.8 million, the add back of $24.2 million of preferred stock dividends related to the Series B convertible preferred stock and the add back of interest expense related to the ACON Second Territory Business of $0.3 million resulting in net income available to common stockholders of $266.0 million for the year ended December 31, 2010.

(y)  Non-cash income allocated to net income available to common stockholders as a result of repurchases of preferred shares during the year ended December 31, 2011.

Alere Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in $000s)

December 31,

December 31,

2011

2010

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$      299,173

$      401,306

Restricted cash

8,987

2,581

Marketable securities

1,086

2,094

Accounts receivable, net

475,824

397,148

Inventories, net

320,269

257,720

Prepaid expenses and other current assets

188,388

133,408

Total current assets

1,293,727

1,194,257

PROPERTY, PLANT AND EQUIPMENT, NET

491,205

390,510

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

4,681,170

4,567,064

DEFERRED FINANCING COSTS AND OTHER ASSETS, NET

211,027

178,543

Total assets

$   6,677,129

$   6,330,374

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Current portion of notes payable

$        73,415

$        19,017

Current portion of deferred gain on joint venture

-

288,378

Other current liabilities

551,037

475,463

Total current liabilities

624,452

782,858

LONG-TERM LIABILITIES:

Notes payable, net of current portion

3,280,080

2,379,968

Deferred tax liability

376,565

420,166

Other long-term liabilities

153,399

169,656

Total long-term liabilities

3,810,044

2,969,790

Redeemable non-controlling interest

2,497

-

TOTAL EQUITY

2,240,136

2,577,726

Total liabilities and equity

$   6,677,129

$   6,330,374

Alere Inc. and Subsidiaries

Selected Consolidated Revenues by Business Area (1)

(in thousands)

Professional Diagnostics Segment

% Change

% Change

Q4 2011

2011

Q4 2010

2010

Q4 11 v. Q4 10

2011 v. 2010

Cardiology

$ 128,094

$    518,746

$ 127,724

$    488,497

0%

6%

Infectious disease

159,424

564,983

134,473

437,709

19%

29%

Toxicology

119,375

387,209

79,525

300,125

50%

29%

Diabetes

14,960

14,960

-

-

Other (1)

74,068

250,274

59,681

214,387

24%

17%

Professional diagnostics net product sales and services revenue (1)

495,921

1,736,172

401,403

1,440,718

24%

21%

License and royalty revenue

5,750

20,337

4,666

18,774

23%

8%

Professional diagnostics net revenue

$ 501,671

$ 1,756,509

$ 406,069

$ 1,459,492

24%

20%

Health Management Segment

% Change

% Change

Q4 2011

2011

Q4 2010

2010

Q4 11 v. Q4 10

2011 v. 2010

Disease and case management

$   55,820

$    237,938

$   67,524

$    281,563

-17%

-15%

Wellness

24,499

104,868

27,460

103,343

-11%

1%

Women's & children's health

28,737

114,287

30,953

126,910

-7%

-10%

Patient self-testing services

16,892

77,421

21,700

87,003

-22%

-11%

Health management net revenue

$ 125,948

$    534,514

$ 147,637

$    598,819

-15%

-11%

(1)  Revenues are presented in accordance with Generally Accepted Accounting Principles and exclude an adjustment of $1,452 in revenue related to acquired software license contracts which were not recognized for the fourth quarter of 2011 due to business combination accounting rules.