Alere 10-Q 2011 Q1 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

COMMISSION FILE NUMBER 001-16789

ALERE INC.

(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization) 04-3565120
(I.R.S. Employer
Identification No.)

51 SAWYER ROAD, SUITE 200
WALTHAM, MASSACHUSETTS 02453
(Address of principal executive offices)(Zip code)

(781) 647-3900
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerþ Accelerated filero Non-accelerated filero(Do not check if a smaller reporting company) Smaller reporting companyo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso Noþ

The number of shares outstanding of the registrant’s common stock, par value of $0.001 per share, as of May 2, 2011 was 85,509,607.

ALERE INC.

REPORT ON FORM 10-Q

For the Quarterly Period Ended March 31, 2011

     This Quarterly Report onForm 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can identify these statements by forward-looking words such as “may,” “could,” “should,” “would,” “intend,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “continue” or similar words. A number of important factors could cause actual results of Alere Inc. and its subsidiaries to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the risk factors detailed in Part I, Item 1A, “Risk Factors,” of our Annual Report onForm 10-K, as amended, for the fiscal year ended December 31, 2010 and other risk factors identified herein or from time to time in our periodic filings with the Securities and Exchange Commission. Readers should carefully review these risk factors, and should not place undue reliance on our forward-looking statements. These forward-looking statements are based on information, plans and estimates at the date of this report. We undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

     Unless the context requires otherwise, references in this Quarterly Report onForm 10-Q to “we,” “us” and “our” refer to Alere Inc. and its subsidiaries.

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
a) Consolidated Statements of Operations for the Three Months Ended March 31, 2011 and 2010		3
b) Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010		4
c) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010		5
d) Notes to Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3. Quantitative and Qualitative Disclosures About Market Risk		39
Item 4. Controls and Procedures		39
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 6. Exhibits		41
SIGNATURE		42
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALERE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)

	Three Months Ended March 31,
	2011			2010
Net product sales	$	407,243		$	350,101
Services revenue		167,552			159,304
Net product sales and services revenue		574,795			509,405
License and royalty revenue		7,669			5,849
Net revenue		582,464			515,254
Cost of net product sales		189,687			163,705
Cost of services revenue		84,716			75,785
Cost of net product sales and services revenue		274,403			239,490
Cost of license and royalty revenue		1,854			1,807
Cost of net revenue		276,257			241,297
Gross profit		306,207			273,957
Operating expenses:
Research and development		36,542			30,993
Sales and marketing		133,209			119,591
General and administrative		105,551			94,663
Total operating expenses		275,302			245,247
Operating income		30,905			28,710
Interest expense, including amortization of original issue discounts and deferred financing costs		(38,305	)		(33,135	)
Other income (expense), net		2,336			3,044
Loss from continuing operations before provision (benefit) for income taxes		(5,064	)		(1,381	)
Provision (benefit) for income taxes		(4,330	)		446
Loss from continuing operations before equity earnings of unconsolidated entities, net of tax		(734	)		(1,827	)
Equity earnings of unconsolidated entities, net of tax		1,011			4,040
Income from continuing operations		277			2,213
Income from discontinued operations, net of tax		—			11,946
Net income		277			14,159
Less: Net income (loss) attributable to non-controlling interests		62			(670	)
Net income attributable to Alere Inc. and Subsidiaries		215			14,829
Preferred stock dividends		(5,809	)		(5,853	)
Preferred stock repurchase		13,688			—
Net income available to common stockholders	$	8,094		$	8,976
Basic net income per common share attributable to Alere Inc. and Subsidiaries:
Income (loss) from continuing operations	$	0.09		$	(0.03	)
Income from discontinued operations, net of tax		—			0.14
Net income per common share	$	0.09		$	0.11
Diluted net income per common share attributable to Alere Inc. and Subsidiaries:
Income (loss) from continuing operations	$	0.09		$	(0.03	)
Income from discontinued operations, net of tax		—			0.14
Net income per common share	$	0.09		$	0.11
Weighted average shares-basic		85,362			83,806
Weighted average shares-diluted		86,953			83,806

The accompanying notes are an integral part of these consolidated financial statements.

3

ALERE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par value)

	March 31,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	318,666		$	401,306
Restricted cash		2,612			2,581
Marketable securities		980			2,094
Accounts receivable, net of allowances of $26,222 and $20,381 at March 31, 2011 and December 31, 2010, respectively		406,943			397,148
Inventories, net		251,841			257,720
Deferred tax assets		57,267			57,111
Income tax receivable		3,812			1,383
Receivable from joint venture, net		8,549			—
Prepaid expenses and other current assets		100,363			74,914
Total current assets		1,151,033			1,194,257
Property, plant and equipment, net		401,425			390,510
Goodwill		2,871,735			2,831,300
Other intangible assets with indefinite lives		28,091			28,183
Finite-lived intangible assets, net		1,673,098			1,707,581
Deferred financing costs, net, and other non-current assets		58,315			57,529
Receivable from joint venture, net of current portion		17,668			23,872
Investments in unconsolidated entities		63,388			62,556
Marketable securities		3,652			9,404
Deferred tax assets		25,637			25,182
Total assets	$	6,294,042		$	6,330,374
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	17,790		$	16,891
Current portion of capital lease obligations		2,200			2,126
Accounts payable		126,144			126,844
Accrued expenses and other current liabilities		322,374			345,832
Payable to joint venture, net		—			2,787
Deferred gain on joint venture		288,824			288,378
Total current liabilities		757,332			782,858
Long-term liabilities:
Long-term debt, net of current portion		2,382,280			2,378,566
Capital lease obligations, net of current portion		2,089			1,402
Deferred tax liabilities		413,714			420,166
Other long-term liabilities		168,594			169,656
Total long-term liabilities		2,966,677			2,969,790
Commitments and contingencies(Note 16)
Stockholders’ equity:
Series B preferred stock, $0.001 par value (liquidation preference: $771,674 at March 31, 2011 and $836,222 at December 31, 2010);
Authorized: 2,300 shares; Issued and outstanding: 1,929 shares at March 31, 2011 and 2,091 shares at December 31, 2010		661,175			718,554
Common stock, $0.001 par value;
Authorized: 200,000 shares; Issued and outstanding: 85,452 shares at March 31, 2011 and 84,904 shares at December 31, 2010		85			85
Additional paid-in capital		3,247,076			3,232,997
Accumulated deficit		(1,363,281	)		(1,377,184	)
Treasury stock, at cost, 41 shares at March 31, 2011 and 24 shares at December 31, 2010		(722	)		(104	)
Accumulated other comprehensive income		22,950			690
Total stockholders’ equity		2,567,283			2,575,038
Non-controlling interests		2,750			2,688
Total equity		2,570,033			2,577,726
Total liabilities and equity	$	6,294,042		$	6,330,374

The accompanying notes are an integral part of these consolidated financial statements.

4

ALERE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

	Three Months Ended March 31,
	2011			2010
Cash Flows from Operating Activities:
Net income	$	277		$	14,159
Income from discontinued operations, net of tax		—			11,946
Income from continuing operations		277			2,213
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Non-cash interest expense, including amortization of original issue discounts and write-off of deferred financing costs		3,603			3,292
Depreciation and amortization		94,975			89,248
Non-cash stock-based compensation expense		5,808			7,570
Impairment of inventory		294			195
Impairment of long-lived assets		230			(34	)
Impairment of intangible assets		2,935			—
Loss on sale of fixed assets		479			213
Gain on sales of marketable securities		(333	)		—
Equity earnings of unconsolidated entities, net of tax		(1,011	)		(4,040	)
Deferred income taxes		(13,238	)		(10,988	)
Other non-cash items		1,606			(2,681	)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net		(5,339	)		8,759
Inventories, net		11,063			(10,415	)
Prepaid expenses and other current assets		(24,473	)		2,683
Accounts payable		(5,935	)		(8,845	)
Accrued expenses and other current liabilities		14,795			(9,112	)
Other non-current liabilities		1,424			2,238
Net cash provided by continuing operations		87,160			70,296
Net cash used in discontinued operations		—			(172	)
Net cash provided by operating activities		87,160			70,124
Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(28,944	)		(17,286	)
Proceeds from sale of property, plant and equipment		204			166
Proceeds from disposition of business		11,490			—
Cash paid for acquisitions, net of cash acquired		(94,899	)		(338,384	)
Proceeds from sales of marketable securities		6,982			—
Net cash received from equity method investments		—			8,221
Increase in other assets		(12,102	)		(1,412	)
Net cash used in continuing operations		(117,269	)		(348,695	)
Net cash provided by discontinued operations		—			63,446
Net cash used in investing activities		(117,269	)		(285,249	)
Cash Flows from Financing Activities:
Decrease in restricted cash		3			161
Cash paid for financing costs		(80	)		(875	)
Cash paid for contingent purchase price consideration		(13,222	)		—
Proceeds from issuance of common stock, net of issuance costs		11,824			10,634
Repurchase of preferred stock		(49,380	)		—
Proceeds from long-term debt		937			—
Payments on long-term debt		(3,600	)		(2,437	)
Net proceeds (payments) under revolving credit facilities		133			(2,320	)
Repurchase of common stock		(618	)		—
Excess tax benefits on exercised stock options		1,169			1,421
Principal payments on capital lease obligations		(653	)		(252	)
Other		(244	)		(38	)
Net cash provided by (used in) financing activities		(53,731	)		6,294
Foreign exchange effect on cash and cash equivalents		1,200			(8,612	)
Net decrease in cash and cash equivalents		(82,640	)		(217,443	)
Cash and cash equivalents, beginning of period		401,306			492,773
Cash and cash equivalents, end of period	$	318,666		$	275,330

The accompanying notes are an integral part of these consolidated financial statements.

5

ALERE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1) Basis of Presentation of Financial Information

     The accompanying consolidated financial statements of Alere Inc. are unaudited. In the opinion of management, the unaudited consolidated financial statements contain all adjustments considered normal and recurring and necessary for their fair presentation. Interim results are not necessarily indicative of results to be expected for the year. These interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows. Our audited consolidated financial statements for the year ended December 31, 2010 included information and footnotes necessary for such presentation and were included in our Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission, or SEC, on April 29, 2011. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2010.

     Certain reclassifications of prior period amounts have been made to conform to current period presentation. These reclassifications had no effect on net income or equity.

(2) Cash and Cash Equivalents

     We consider all highly-liquid cash investments with original maturities of three months or less at the date of acquisition to be cash equivalents. At March 31, 2011, our cash equivalents consisted of money market funds.

(3) Inventories

     Inventories are stated at the lower of cost (first in, first out) or market and are comprised of the following (in thousands):

	March 31, 2011		December 31, 2010
Raw materials	$	75,618	$	81,640
Work-in-process		55,314		61,849
Finished goods		120,909		114,231
	$	251,841	$	257,720

(4) Stock-based Compensation

     We recorded stock-based compensation expense in our consolidated statements of operations for the three months ended March 31, 2011 and 2010, respectively, as follows (in thousands):

	Three Months Ended March 31,
	2011			2010
Cost of sales	$	350		$	407
Research and development		945			2,365
Sales and marketing		959			1,013
General and administrative		3,554			3,785
		5,808			7,570
Benefit for income taxes		(1,286	)		(1,421	)
Stock-based compensation, net of tax	$	4,522		$	6,149

(5) Net Income per Common Share

     The following table sets forth the computation of basic and diluted net income per common share for the periods presented (in thousands, except per share data):

6

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

	Three Months Ended March 31,
	2011			2010
Numerator:
Income from continuing operations	$	277		$	2,213
Preferred stock dividends		(5,809	)		(5,853	)
Preferred stock repurchase		13,688			—
Income (loss) from continuing operations attributable to common shares		8,156			(3,640	)
Less: Net income (loss) attributable to non-controlling interest		62			(670	)
Income (loss) from continuing operations attributable to Alere Inc. and Subsidiaries		8,094			(2,970	)
Income from discontinued operations		—			11,946
Net income available to common stockholders	$	8,094		$	8,976
Denominator:
Weighted-average common shares outstanding — basic		85,362			83,806
Effect of dilutive securities:
Stock options		1,348			—
Warrants		136			—
Potentially issuable shares of common stock associated with contingent consideration arrangements		107			—
Weighted-average common shares outstanding — diluted		86,953			83,806
Net income per common share — basic:
Income (loss) from continuing operations attributable to Alere Inc. and Subsidiaries	$	0.09		$	(0.03	)
Income from discontinued operations		—			0.14
Net income per common share — basic	$	0.09		$	0.11
Net income per common share — diluted:
Income (loss) from continuing operations attributable to Alere Inc. and Subsidiaries	$	0.09		$	(0.03	)
Income from discontinued operations		—			0.14
Net income per common share — diluted	$	0.09		$	0.11

     For the three months ended March 31, 2011 and 2010, anti-dilutive shares of 14,877 and 17,390, respectively, were excluded from the computations of diluted net income per common share.

(6) Stockholders’ Equity

     (a) Preferred Stock

     For the three months ended March 31, 2011 and 2010, Series B preferred stock dividends amounted to $5.8 million and $5.9 million, respectively, which reduced earnings available to common stockholders for purposes of calculating net income per common share for each of the respective periods. As of April 15, 2011, payments have been made covering all dividend periods through March 31, 2011.

     (b) Share Repurchases

     In December 2010, our Board of Directors authorized the repurchase of up to $50.0 million of our common or preferred stock. During the first quarter of 2011, under this authorization we repurchased, in the open market and privately-negotiated transactions, 183,000 shares of our Series B preferred stock, which were convertible into approximately 1.1 million shares of our common stock, at a cost of approximately $49.4 million, which we paid in cash. Under this same authorization, we completed this repurchase program by repurchasing 16,700 shares of our common stock at a cost of approximately $0.6 million, which we paid in cash. The repurchase of the preferred stock at an average cost of $269.84 per preferred share, an amount less than the weighted average fair value of the preferred shares at issuance, resulted in the allocation of $13.7 million of income attributable to common shareholders.

7

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     In March 2011, our Board of Directors authorized an additional repurchase of up to $50.0 million of our preferred or common stock.

(7) Comprehensive Income (Loss)

     The following table provides a reconciliation of net income reported in our consolidated financial statements to comprehensive income (loss) for the three months ended March 31, 2011 and 2010 (in thousands):

	Three Months Ended March 31,
	2011			2010
Net income attributable to Alere Inc. and subsidiaries	$	215		$	14,829
Other comprehensive income (loss), net of tax:
Changes in cumulative translation adjustment		21,515			(17,962	)
Unrealized losses on available for sale securities		(215	)		(241	)
Unrealized gains (losses) on interest rate swaps		988			(734	)
Minimum pension liability adjustment		(28	)		328
Total other comprehensive income (loss)		22,260			(18,609	)
Total comprehensive income (loss)	$	22,475		$	(3,780	)

     A summary of the changes in stockholders’ equity and non-controlling interest comprising total equity for the three months ended March 31, 2011 and 2010 is provided below (in thousands):

	Three Months Ended March 31,
	2011								2010
	Total			Non-					Total			Non-
	Stockholders’			controlling					Stockholders’			controlling
	Equity			Interest		Total Equity			Equity			Interest			Total Equity
Equity, beginning of period	$	2,575,038		$	2,688	$	2,577,726		$	3,527,555		$	1,334		$	3,528,889
Issuance of common stock and warrants in connection with acquisitions		1,000			—		1,000			—			—			—
Exercise of common stock options, warrants and shares issued under employee stock purchase plan		11,824			—		11,824			10,634			—			10,634
Repurchase of common stock		(618	)		—		(618	)		—			—			—
Repurchase of preferred stock		(49,380	)		—		(49,380	)		—			—			—
Preferred stock dividends		(33	)		—		(33	)		(51	)		—			(51	)
Stock-based compensation related to grants of common stock options		5,808			—		5,808			7,570			—			7,570
Excess tax benefits on exercised stock options		1,169			—		1,169			284			—			284
Non-controlling interest from acquisitions		—			—		—			—			19,454			19,454
Redeemable non-controlling interest in subsidiaries’ income		—			—		—			—			396			396
Net income (loss)		215			62		277			14,829			(670	)		14,159
Total other comprehensive income (loss)		22,260			—		22,260			(18,609	)		—			(18,609	)
Equity, end of period	$	2,567,283		$	2,750	$	2,570,033		$	3,542,212		$	20,514		$	3,562,726

8

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

(8) Business Combinations

     Acquisitions are accounted for using the acquisition method and the acquired companies’ results have been included in the accompanying consolidated financial statements from their respective dates of acquisition. During the three months ended March 31, 2011 and 2010, we expensed acquisition-related costs of $1.9 million and $4.0 million, respectively, in general and administrative expense.

     Our business acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, based on our expectations of synergies of combining the businesses. These synergies include elimination of redundant facilities, functions and staffing; use of our existing commercial infrastructure to expand sales of the acquired businesses’ products; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand product sales.

     Allocation of the purchase price for acquisitions is based on estimates of the fair value of the net assets acquired and, for acquisitions completed within the past year, is subject to adjustment upon finalization of the purchase price allocation. We are not aware of any information that indicates the final purchase price allocations will differ materially from the preliminary estimates. Determination of the estimated useful lives of the individual categories of intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with finite lives is recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. We amortize our finite-lived intangible assets based on patterns on which the respective economic benefits are expected to be realized.

     (a) Acquisitions in 2011

     During 2011, we acquired the following businesses for a preliminary aggregate purchase price of $75.3 million, which consisted of cash payments totaling $64.1 million, 25,463 shares of our common stock with an acquisition date fair value of $1.0 million, contingent consideration obligations with an aggregate acquisition date fair value of $4.2 million and deferred purchase price consideration of $2.1 million.

• 90% interest in BioNote, Inc., or BioNote, headquartered in South Korea, a manufacturer of diagnostic products for the veterinary industry (Acquired January 2011). We previously owned a 10% interest in BioNote.

• assets, including domain name, of Pregnancy.org, LLC, or Pregnancy.org, a U.S.-based company providing a website for preconception, pregnancy and newborn care content, tools and sharing (Acquired January 2011)

• Home Telehealth Limited, subsequently renamed Alere Connected Health Limited, or Alere Connected Health, located in Cardiff, Wales, a company that focuses on delivering integrated, comprehensive services and programs to health and social care providers and insurers (Acquired February 2011)

• Bioeasy Diagnostica Ltda., or Bioeasy, located in Belo Horizonte, Brazil, a company that markets and sells rapid diagnostic tests and systems for laboratory diagnosis, prevention and monitoring of immunological diseases and fertility (Acquired March 2011)

     The operating results of BioNote and Bioeasy are included in our professional diagnostics reporting unit and business segment. The operating results of Pregnancy.org and Alere Connected Health are included in our health management reporting unit and business segment. Our consolidated statement of operations for the three months ended March 31, 2011 included revenue totaling approximately $3.0 million related to these businesses. Goodwill has been recognized in all of the acquisitions and amounted to approximately $41.9 million. Goodwill related to the acquisition of Pregnancy.org, which totaled $1.3 million, is expected to be deductible for tax purposes.

9

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     A summary of the preliminary aggregate purchase price allocation for the acquisitions consummated in 2011 is as follows (in thousands):

Current assets	$	13,326
Property, plant and equipment		4,913
Goodwill		41,862
Intangible assets		27,722
Other non-current assets		410
Total assets acquired		88,233
Current liabilities		6,108
Non-current liabilities		6,781
Total liabilities assumed		12,889
Net assets acquired		75,344
Less:
Previously-owned 10% investment in BioNote		3,937
Contingent consideration		4,242
Fair value of common stock issued		1,000
Deferred purchase price consideration		2,070
Cash paid	$	64,095

     The following are the intangible assets acquired and their respective amortizable lives (dollars in thousands):

			Weighted
			Average
	Amount		Useful Life
Core technology and patents	$	5,441	14.4 years
Database		64	3.0 years
Trademarks and trade names		4,748	16.7 years
Customer relationships		15,138	9.2 years
Non-compete agreements		425	3.9 years
Other		1,532	8.1 years
In-process research and development		374		N/A
Total intangible assets	$	27,722

     (b) Acquisitions in 2010

     During 2010, we acquired the following businesses for a preliminary aggregate purchase price of $602.5 million, which consisted of initial cash payments totaling $512.1 million, contingent consideration obligations with an acquisition date fair value of $89.7 million and deferred purchase price consideration with an acquisition date present value of $0.7 million.

• RMD Networks, Inc., or RMD, located in Denver, Colorado, a provider of clinical groupware software and services designed to improve communication and coordination of care among providers, patients, and payers in the healthcare environment (Acquired January 2010)

• certain assets of Streck, Inc., or Streck, located in Nebraska, a manufacturer of hematology, chemistry and immunology products for the clinical laboratory (Acquired January 2010)

• Standard Diagnostics, headquartered in South Korea, a company that specializes in the medical diagnostics industry. Its main product lines relate to diagnostic reagents and devices for hepatitis, infectious diseases, tumor markers, fertility, drugs of abuse, urine strips and protein strips. (Initial controlling interest acquired February 2010)

10

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

• Kroll Laboratory Specialists, Inc., subsequently renamed Alere Toxicology Services, or Alere Toxicology, headquartered in Gretna, Louisiana, a company that provides forensic quality substance abuse testing products and services across the United States (Acquired February 2010)

• a privately-owned U.K. research and development operation (Acquired March 2010)

• assets of the diagnostics division of Micropharm Ltd., located in Wales, United Kingdom, an expert in high-quality antibody production in sheep for both diagnostic and therapeutic purposes, providing antisera on a contract basis for U.K. and overseas companies and academic institutions, mainly for research, therapeutic and diagnostic uses (Acquired March 2010)

• Quantum Diagnostics Group Limited, or Quantum, headquartered in Essex, England, an independent provider of drug testing products and services to healthcare professionals across the U.K. and Europe (Acquired April 2010)

• assets of the workplace health division of Good Health Solutions Pty Ltd., subsequently renamed Alere Health Pty Ltd., located in East Sydney, Australia, an important player in the Australian health and wellness market, focusing on health screenings, health-related consulting services, health coaching and fitness instruction (Acquired April 2010)

• certain assets of Unotech Diagnostics, Inc., or Unotech, located in California, a privately-owned company engaged in the development, formulation, manufacture, packaging, supply and distribution of our BladderCheck NMP22 lateral flow test and related lateral flow products (Acquired June 2010)

• Scipac Holdings Limited, or Scipac, headquartered in Kent, England, a diagnostic reagent company with an extensive product portfolio supplying purified human antigens, recombinant proteins and disease state plasma to a global customer base (Acquired June 2010)

• a privately-owned research and development operation, located in San Diego, California (Acquired July 2010)

• Diagnostixx of California, Corp. (d/b/a Immunalysis Corporation), or Immunalysis, located in Pomona, California, a privately-owned manufacturer and marketer of abused and prescription drug screening solutions used by clinical reference and forensic/crime laboratories (Acquired August 2010)

• AdnaGen AG, or AdnaGen, located in Langenhagen, Germany, a company that focuses on the development of innovative tumor diagnostics for the detection of rare cells (Acquired November 2010)

• Medlab Produtos Medicos Hospitalares Ltda, or Medlab, located in San Paulo, Brazil, a distributor of medical instruments and reagents to public and private laboratories throughout Brazil and Uruguay (Acquired December 2010)

• Capital Toxicology, LLC, or Capital Toxicology, located in Austin, Texas, a privately-held toxicology business specializing in pain management services (Acquired December 2010)

     The operating results of the acquired businesses mentioned above, except for RMD and Alere Health Pty Ltd., are included in our professional diagnostics reporting unit and business segment. The operating results of RMD and Alere Health Pty Ltd. are included in our health management reporting unit and business segment. Our consolidated statements of operations for the three months ended March 31, 2011 and 2010 included revenue totaling approximately $51.8 million and $16.1 million, respectively, related to these businesses. Goodwill has been recognized in all of the acquisitions, with the exception of Unotech and Streck, and amounted to approximately $280.6 million. Goodwill related to the acquisitions of Alere Toxicology and Capitol Toxicology, which totaled $63.7 million, is expected to be deductible for tax purposes.

11

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     A summary of the preliminary aggregate purchase price allocation for the acquisitions consummated in 2010 is as follows (in thousands):

Current assets	$	84,862
Property, plant and equipment		36,565
Goodwill		280,648
Intangible assets		283,855
Other non-current assets		16,988
Total assets acquired		702,918
Current liabilities		28,324
Non-current liabilities		72,050
Total liabilities assumed		100,374
Net assets acquired		602,544
Less:
Contingent consideration		89,708
Present value of deferred purchase price consideration		688
Cash paid	$	512,148

     The following are the intangible assets acquired and their respective amortizable lives (dollars in thousands):

			Weighted
			Average
	Amount		Useful Life
Core technology and patents	$	106,885	12.4 years
Quality systems		153	5.0 years
Database		654	3.0 years
Trademarks and trade names		11,654	6.3 years
License agreements		459	10.0 years
Customer relationships		125,332	14.3 years
Non-compete agreements		2,650	4.2 years
Software		5,000	7.0 years
Distribution agreement		800	14.0 years
Manufacturing know-how		3,683	10.5 years
In-process research and development		26,585		N/A
Total intangible assets	$	283,855

     (c) Restructuring Plans of Acquisitions

     In connection with several of our acquisitions consummated during 2008 and prior, we initiated integration plans to consolidate and restructure certain functions and operations, including the costs associated with the termination of certain personnel of these acquired entities and the closure of certain of the acquired entities’ leased facilities. These costs have been recognized as liabilities assumed in connection with the acquisition of these entities and are subject to potential adjustments as certain exit activities are refined. The following table summarizes the liabilities established for exit activities related to these acquisitions (in thousands):

	Severance			Facility			Total Exit
	Related			And Other			Activities
Balance, December 31, 2010	$	339		$	3,020		$	3,359
Restructuring plan adjustments		(90	)		—			(90	)
Payments		—			(546	)		(546	)
Balance, March 31, 2011	$	249		$	2,474		$	2,723

12

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     In connection with our acquisition of Matria in 2008, we implemented an integration plan to improve operating efficiencies and eliminate redundant costs resulting from the acquisition. The restructuring plan impacted all cost centers within the Matria organization, as activities were combined with our existing business operations. Since inception of the plan, we recorded $18.5 million in exit costs, of which $13.8 million relates to change in control and severance costs to involuntarily terminate employees and $4.7 million related to facility exit costs. As of March 31, 2011, $0.9 million in facility exit costs remain unpaid.

     In conjunction with our acquisition of Panbio in 2008, we formulated a restructuring plan to realize efficiencies and cost savings. In February 2008, we agreed upon a plan to close Panbio’s facility located in Columbia, Maryland. The manufacturing operation at the Maryland-based facility was transferred to a third-party manufacturer, the sales of the products at this facility were transferred to our shared services center in Orlando, Florida and the distribution operations were transferred to our distribution facility in Freehold, New Jersey. Since inception of the plan, we recorded $1.0 million in exit costs, including $0.8 million related to facility and other exit costs and $0.2 million related to severance costs to involuntarily terminated employees. As of March 31, 2011, $0.2 million in facility exit costs remain unpaid.

     During 2007, we formulated restructuring plans in connection with our acquisition of Cholestech Corporation, or Cholestech, consistent with our acquisition strategy to realize operating efficiencies and cost savings. Additionally, in March 2008, we announced plans to close the Cholestech facility in Hayward, California. We have transitioned the manufacturing of the related products to our facility in San Diego, California and have transitioned the sales and distribution of the products to our shared services center in Orlando, Florida. Since inception of the plans, we recorded $8.5 million in exit costs, of which $5.8 million relates to executive change in control agreements and severance costs to involuntarily terminate employees and $2.7 million relates to facility exit costs. During the first quarter of 2011, we determined that $0.1 million of change in control costs would not be incurred, thereby reducing the assumed liability and goodwill related to the Cholestech acquisition. As of March 31, 2011, $1.6 million in facility exit costs remain unpaid. See Note 9 for additional restructuring charges related to the Cholestech facility closure and integration.

     Although we believe our plans and estimated exit costs for our acquisitions are reasonable, actual spending for exit activities may differ from current estimated exit costs.

     (d) Pro Forma Financial Information

     The following table presents selected unaudited financial information of our company, including Standard Diagnostics as if the acquisition of this entity had occurred on January 1, 2010. Pro forma results exclude adjustments for various other less significant acquisitions completed since January 1, 2010, as these acquisitions did not materially affect our results of operations.

     The pro forma results are derived from the historical financial results of the acquired businesses for the periods presented and are not necessarily indicative of the results that would have occurred had the acquisitions been consummated on January 1, 2010. There was no pro forma impact on the results of operations for the three months ended March 31, 2011, as the acquisition of Standard Diagnostics closed prior to January 1, 2011 (in thousands, except per share amounts).

	Three Months Ended
	March 31, 2010
Pro forma net revenue	$	521,407
Pro forma net loss from continuing operations attributable to Alere Inc. and Subsidiaries	$	(4,794	)
Pro forma net income available to common stockholders	$	7,152
Pro forma net loss from continuing operations attributable to Alere Inc. and Subsidiaries per common share — basic and diluted(1)	$	(0.06	)
Pro forma net income available to common stockholders — basic(1)	$	0.09
Pro forma net income available to common stockholders — diluted(1)	$	0.09

⁽¹⁾ Net income (loss) per common share amounts are computed as described in Note 5.

13

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

(9) Restructuring Plans

     The following table sets forth the aggregate charges associated with restructuring plans recorded in operating income for the three months ended March 31, 2011 and 2010 (in thousands):

	Three Months Ended March 31,
	2011		2010
Cost of net revenue	$	1,350	$	1,580
Research and development		18		(85	)
Sales and marketing		1,012		952
General and administrative		3,819		4,521
	$	6,199	$	6,968

     (a) 2011 Restructuring Plans

     In the first quarter of 2011, management executed additional plans to further reduce costs and improve efficiencies in our health management business segment, as well as cease operations at our GeneCare facility in Chapel Hill, North Carolina. As a result of these plans, we recorded $4.2 million in charges during the three months ended March 31, 2011, which included $1.3 million in severance costs related to several of our health management businesses and $2.9 million in intangible asset impairments related to our GeneCare operations. As of March 31, 2011, $1.2 million in severance costs remain unpaid. We anticipate incurring an additional $2.3 million in costs under these plans, primarily related to facility lease obligations.

     Additionally, during the first quarter of 2011, management executed several plans to reduce costs and improve operational efficiencies in our professional diagnostics business segment, including consolidation of operating activities among certain of our European subsidiaries. As a result of these plans, we recorded $1.6 million in charges during the three months ended March 31, 2011, which included $1.0 million in severance costs and $0.6 million in fixed asset and inventory impairments. We have $0.3 million in unpaid severance cost under these plans as of March 31, 2011. We do not anticipate incurring significant additional charges under these first quarter plans.

     (b) 2010 Restructuring Plans

     In 2010, management executed plans to reduce costs and improve efficiencies in our health management business segment. As a result of these plans, we recorded $5.5 million in charges during the three months ended March 31, 2010, which included $3.2 million in severance costs, $2.2 million in costs associated with facility exit costs and $0.1 million in present value accretion on facility exit costs, which was included in interest expense. Since inception of the plans, we recorded $7.5 million in charges, which included $4.6 million in severance costs, $2.5 million in costs associated with facility exit costs, $0.2 million in fixed asset impairments and $0.2 million in present value accretion on facility exit costs, which was included in interest expense. We have $1.9 million in severance and facility exit costs remaining to be paid as of March 31, 2011. We do not anticipate incurring significant additional charges under these plans.

     During 2010, management also executed several plans to reduce costs and improve efficiencies in our professional diagnostics business segment. As a result of these plans, during the three months ended March 31, 2011 and since inception, we recorded $0.1 million and $3.4 million, respectively, in charges. The $0.1 million related to various miscellaneous charges, and the $3.4 million included $2.4 million in severance costs, $0.8 million in facility and other exit costs and $0.2 million in fixed asset impairments. As of March 31, 2011, substantially all costs have been paid. We do not anticipate incurring significant additional charges under these plans.

     (c) 2008 Restructuring Plans

     In May 2008, we decided to close our facility located in Bedford, England and initiated steps to cease operations at this facility and transition the manufacturing operations principally to our manufacturing facilities in Shanghai

14

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

and Hangzhou, China. Based upon this decision, during the three months ended March 31, 2011 and 2010, we recorded $0.3 million and $0.6 million, respectively, in restructuring charges primarily related to transition costs. Of the $0.3 million and $0.5 million included in operating income for the three months ended March 31, 2011 and 2010, respectively, substantially all was charged to our professional diagnostics business segment.

     In addition to the restructuring charges discussed above, $0.4 million and $1.6 million of charges associated with the Bedford facility closure were borne by our 50/50 joint venture with P&G, or SPD, during the three months ended March 31, 2011 and 2010, respectively. Included in the $0.4 million of charges for the three months ended March 31, 2011 was $0.2 million in severance and transition costs and $0.2 million of fixed asset write-offs. Included in the $1.6 million of charges for the three months ended March 31, 2010 was $1.0 million in severance and retention costs, $1.0 million in transition costs and a $0.4 million reduction in inventory reserves. Of these restructuring charges, 50%, or $0.2 million and $0.8 million, has been included in equity earnings of unconsolidated entities, net of tax, in our consolidated statements of operations for the three months ended March 31, 2011 and 2010, respectively. Of the total exit costs incurred jointly with SPD under this plan, $0.4 million in costs remain unpaid as of March 31, 2011.

     Since inception of the plan, we recorded $17.2 million in restructuring charges, including $5.9 million of fixed asset and inventory impairments, $4.6 million related to the acceleration of facility restoration costs and early termination lease penalties, $4.1 million in severance costs, $3.2 million in transition costs and $0.6 million related to a pension plan curtailment gain associated with the Bedford employees being terminated. SPD has been allocated $31.3 million in restructuring charges since the inception of the plan, including $9.3 million of fixed asset and inventory impairments, $11.4 million in severance and retention costs, $2.9 million in early termination lease penalties, $7.1 million in facility exit costs and $0.6 million related to the acceleration of facility exit costs. We anticipate incurring additional costs of approximately $1.0 million related to the closure of this facility, primarily related to severance and transition costs, through the end of 2011. Of these additional anticipated costs, approximately $0.8 million will be borne by SPD and $0.2 million will be borne by us and will be included primarily in our professional diagnostics business segment.

     As a result of our plans to transition the businesses of Cholestech and HemoSense, Inc., or HemoSense, to our San Diego, California facility and Panbio to Orlando, Florida and close these facilities, we incurred $0.7 million in restructuring charges related to our professional diagnostics business segment for the three months ended March 31, 2010, of which $0.3 million relates to severance and retention costs and $0.4 million in transition costs. Since the inception of the plan, we incurred $14.6 million in restructuring charges, of which $4.5 million relates to severance and retention costs, $3.4 million in fixed asset impairments, $4.6 million in transition costs, $1.6 million in inventory write-offs and $0.5 million in present value accretion of facility lease costs related to these plans. As of March 31, 2011, $0.5 million in facility exit costs remains unpaid. We do not anticipate incurring significant additional restructuring charges under these plans.

(10) Long-term Debt

     We had the following long-term debt balances outstanding (in thousands):

	March 31, 2011			December 31, 2010
First Lien Credit Agreement — Term loans	$	938,813		$	941,250
Second Lien Credit Agreement		250,000			250,000
3% Senior subordinated convertible notes		150,000			150,000
9% Senior subordinated notes		390,059			389,686
7.875% Senior notes		244,966			244,756
8.625% Senior subordinated notes		400,000			400,000
Lines-of-credit		4,178			4,405
Other		22,054			15,360
		2,400,070			2,395,457
Less: Current portion		(17,790	)		(16,891	)
	$	2,382,280		$	2,378,566

     In connection with our significant long-term debt issuances, we recorded interest expense, including amortization of deferred financing costs and original issue discounts, in our consolidated statements of operations for the three months ended March 31, 2011 and 2010, respectively, as follows (in thousands):

15

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

	Three Months Ended March 31,
	2011		2010
Secured credit facilities	$	12,054	$	15,675
3% Senior subordinated convertible notes		1,246		1,246
9% Senior subordinated notes		9,730		9,695
7.875% Senior notes		5,365		5,142
8.625% Senior subordinated notes		8,908		—
	$	37,303	$	31,758

     In August 2007, we entered into interest rate swap contracts, with an effective date of September 28, 2007, that had a total notional value of $350.0 million and an original maturity date of September 28, 2010. These interest rate swap contracts paid us variable interest at the three-month LIBOR rate, and we paid the counterparties a fixed rate of 4.85%. In March 2009, we extended our August 2007 interest rate hedge for an additional two-year period commencing in September 2010 at a one-month LIBOR rate of 2.54%. These interest rate swap contracts were entered into to convert $350.0 million of the $1.2 billion variable rate term loans under the secured credit facilities into fixed rate debt.

     In January 2009, we entered into interest rate swap contracts, with an effective date of January 14, 2009, that had a total notional value of $500.0 million and a maturity date of January 5, 2011. These interest rate swap contracts paid us variable interest at the one-month LIBOR rate, and we paid the counterparties a fixed rate of 1.195%. These interest rate swap contracts were entered into to convert $500.0 million of the $1.2 billion variable rate term loan under the secured credit facility into fixed rate debt. We did not extend the terms of these interest rate swap contracts after January 5, 2011.

(11) Derivative Financial Instruments

     We use derivative financial instruments (interest rate swap contracts) in the management of our interest rate exposure related to our secured credit facilities. We do not hold or issue derivative financial instruments for speculative purposes.

     The following tables summarize the fair value of our derivative instruments and the effect of derivative instruments on/in our accompanying consolidated balance sheets and consolidated statements of operations (in thousands):

		Fair Value at		Fair Value at
Derivative Instruments	Balance Sheet Caption	March 31, 2011		December 31, 2010
Interest rate swap contracts(1)	Accrued expenses and other current liabilities	$	—	$	26
Interest rate swap contracts(1)	Other long-term liabilities	$	10,363	$	11,954

		Amount of		Amount of
		Gain Recognized		Loss Recognized
		During the Three		During the Three
	Location of Gain (Loss)	Months Ended		Months Ended
Derivative Instruments	Recognized in Income	March 31, 2011		March 31, 2010
Interest rate swap contracts(1)	Other comprehensive income (loss)	$	1,617	$	(1,201	)

⁽¹⁾ See Note 10 regarding our interest rate swaps which qualify as cash flow hedges.

(12)Fair Value Measurements

     We apply fair value measurement accounting to value our financial assets and liabilities. Fair value measurement accounting provides a framework for measuring fair value under U.S. GAAP and requires expanded disclosures regarding fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

16

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     Described below are the three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets and liabilities include investments in marketable securities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Our Level 2 liabilities include interest rate swap contracts.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value of the contingent consideration obligations related to our acquisitions completed after January 1, 2009 are valued using Level 3 inputs.

     The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2011 and December 31, 2010, and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):

			Quoted Prices in		Significant Other
	March 31,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Marketable securities	$	4,632	$	4,632	$	—	$	—
Total assets	$	4,632	$	4,632	$	—	$	—
Liabilities:
Interest rate swap liability(1)	$	10,363	$	—	$	10,363	$	—
Contingent consideration obligations(2)		125,352		—		—		125,352
Total liabilities	$	135,715	$		$	10,363	$	125,352

			Quoted Prices in		Significant Other
	December 31,		Active Markets		Observable Inputs		Unobservable Inputs
Description	2010		(Level 1)		(Level 2)		(Level 3)
Assets:
Marketable securities	$	11,948	$	11,948	$	—	$	—
Total assets	$	11,948	$	11,948	$	—	$	—
Liabilities:
Interest rate swap liability(1)	$	11,980	$	—	$	11,980	$	—
Contingent consideration obligations(2)		132,879		—		—		132,879
Total liabilities	$	144,859	$	—	$	11,980	$	132,879

(1)

The fair value of our interest rate swaps is based on the application of standard discounted cash flow models using market interest rate data.

(2)

The fair value measurements for our contingent consideration obligations related to the acquisitions completed after January 1, 2009 are valued using Level 3 inputs. We determine the fair value of the contingent consideration obligations based on a probability-weighted approach derived from earn-out criteria estimates and a probability assessment with respect to the likelihood of achieving the various earn-out criteria. The measurement is based upon significant inputs not observable in the market. Changes in the fair value of these contingent consideration obligations are recorded as income or expense, a component of operating income in our consolidated statements of operations. See Note 16 for additional information on the valuation of our contingent consideration obligations.

17

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

     Changes in the fair value of our Level 3 contingent consideration obligations during the three months ended March 31, 2011 were as follows (in thousands):

Fair value of contingent consideration obligations, December 31, 2010	$	132,879
Acquisition date fair value of contingent consideration obligations recorded		4,242
Payments		(13,222	)
Adjustments, net (income) expense		1,453
Fair value of contingent consideration obligations, March 31, 2011	$	125,352

     At March 31, 2011 and December 31, 2010, the carrying amounts of cash and cash equivalents, restricted cash, receivables, accounts payable and other current liabilities approximated their estimated fair values.

     The carrying amount and the estimated fair value of our long-term debt were $2.4 billion and $2.5 billion, respectively, at March 31, 2011. The carrying amount and the estimated fair value of our long-term debt were $2.4 billion each at December 31, 2010. The estimated fair value of our long-term debt was determined using market sources that were derived from available market information and may not be representative of actual values that could have been or will be realized in the future.

(13) Defined Benefit Pension Plan

     Our subsidiary in England, Unipath Ltd., has a defined benefit pension plan established for certain of its employees. The net periodic benefit costs are as follows (in thousands):

	Three Months Ended March 31,
	2011			2010
Service cost	$	—		$	—
Interest cost		202			159
Expected return on plan assets		(155	)		(111	)
Amortization of prior service cost		106			—
Realized losses		—			—
Net periodic benefit cost	$	153		$	48

(14) Financial Information by Segment

     Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group is composed of the chief executive officer and members of senior management. Our reportable operating segments are Professional Diagnostics, Health Management, Consumer Diagnostics and Corporate and Other. Our operating results include license and royalty revenue which is allocated to Professional Diagnostics and Consumer Diagnostics on the basis of the original license or royalty agreement.

     We evaluate performance of our operating segments based on revenue and operating income (loss). Segment information for the three months ended March 31, 2011 and 2010 is as follows (in thousands):

								Corporate
	Professional		Health			Consumer		and
	Diagnostics		Management			Diagnostics		Other			Total
Three months ended March 31, 2011:
Net revenue to external customers	$	415,812	$	143,063		$	23,589	$	—		$	582,464
Operating income (loss)	$	60,262	$	(11,933	)	$	3,361	$	(20,785	)	$	30,905
Depreciation and amortization	$	65,249	$	28,314		$	1,259	$	153		$	94,975
Restructuring charge	$	1,978	$	4,221		$	—	$	—		$	6,199
Stock-based compensation	$	—	$	—		$	—	$	5,808		$	5,808
Three months ended March 31, 2010:
Net revenue to external customers	$	340,393	$	148,532		$	26,329	$	—		$	515,254
Operating income (loss)	$	51,474	$	(9,001	)	$	2,378	$	(16,141	)	$	28,710
Depreciation and amortization	$	57,844	$	29,930		$	1,327	$	147		$	89,248
Restructuring charge	$	1,489	$	5,434		$	45	$	—		$	6,968
Stock-based compensation	$	—	$	—		$	—	$	7,570		$	7,570
Assets:
As of March 31, 2011	$	4,942,767	$	998,680		$	202,484	$	150,111		$	6,294,042
As of December 31, 2010	$	4,913,491	$	1,011,183		$	207,795	$	197,905		$	6,330,374

18

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

(15) Related Party Transactions

     In May 2007, we completed the formation of our 50/50 joint venture with P&G for the development, manufacturing, marketing and sale of existing and to-be-developed consumer diagnostic products, outside the cardiology, diabetes and oral care fields. Upon completion of the arrangement to form the joint venture, we ceased to consolidate the operating results of our consumer diagnostic products business related to the joint venture and instead account for our 50% interest in the results of the joint venture under the equity method of accounting.

     We had a net receivable from the joint venture of $8.5 million and a net payable to the joint venture of $2.8 million as of March 31, 2011 and December 31, 2010, respectively. Included in the $8.5 million receivable balance as of March 31, 2011 is approximately $8.3 million of costs incurred in connection with our 2008 SPD-related restructuring plans. We have also recorded a long-term receivable totaling approximately $17.7 million and $23.9 million as of March 31, 2011 and December 31, 2010, respectively, related to the 2008 SPD-related restructuring plans. Additionally, customer receivables associated with revenue earned after the joint venture was completed have been classified as other receivables within prepaid and other current assets on our accompanying consolidated balance sheets in the amount of $8.2 million and $7.8 million as of March 31, 2011 and December 31, 2010, respectively. In connection with the joint venture arrangement, the joint venture bears the collection risk associated with these receivables. Sales to the joint venture under our manufacturing agreement totaled $16.3 million and $18.0 million during the three months ended March 31, 2011 and 2010, respectively. Additionally, services revenue generated pursuant to the long-term services agreement with the joint venture totaled $0.3 million during both the three months ended March 31, 2011 and 2010. Sales under our manufacturing agreement and long-term services agreement are included in net product sales and services revenue, respectively, in our accompanying consolidated statements of operations.

     Under the terms of our product supply agreement, the joint venture purchases products from our manufacturing facilities in the U.K. and China. The joint venture in turn sells a portion of those tests back to us for final assembly and packaging. Once packaged, the tests are sold to P&G for distribution to third-party customers in North America. As a result of these related transactions, we have recorded $6.7 million and $7.0 million of trade receivables which are included in accounts receivable on our accompanying consolidated balance sheets as of March 31, 2011 and December 31, 2010, respectively, and $17.6 million and $20.5 million of trade accounts payable which are included in accounts payable on our accompanying consolidated balance sheets as of March 31, 2011 and December 31, 2010, respectively.

(16) Commitments and Contingencies

     (a) Legal Proceedings

     We are not a party to any pending legal proceedings that we currently believe could have a material adverse impact on our sales, operations or financial performance. However, because of the nature of our business, we may be subject at any particular time to lawsuits or other claims arising in the ordinary course of our business, and we expect that this will continue to be the case in the future.

     (b) Acquisition-related Contingent Consideration Obligations

     We have contractual contingent consideration obligations related to our acquisitions of Accordant, AdnaGen, Alere Connected Health, Bioeasy, Capital Toxicology, Free & Clear, Immunalysis, JSM, Medlab, Mologic,

19

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

Tapestry now known as Alere Home Monitoring, Inc., or Alere Home Monitoring, a privately-owned research and development operation, a privately-owned U.K. research and development operation, a privately-owned health management business acquired in 2008 and certain other small businesses.

     (i) Acquisitions completed prior to January 1, 2009

• Privately-owned health management business

     With respect to a privately-owned health management business which we acquired in 2008, the terms of the acquisition agreement provide for contingent consideration payable upon successfully meeting certain revenue and EBITDA targets. The final earn-out was achieved during the fourth quarter of 2010, resulting in an accrual of approximately €23.9 million ($31.8 million). Cash payment totaling €24.1 million ($34.0 million) was made during the first quarter of 2011.

     (ii) Acquisitions completed on or after January 1, 2009

• Accordant

     With respect to Accordant, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and cash collection targets starting after the second anniversary of the acquisition date and completed prior to the third anniversary date of the acquisition. The maximum amount of the earn-out payment is $6.0 million and, if earned, payment is expected to be made during 2012 and 2013.

• AdnaGen

     With respect to AdnaGen, the terms of the acquisition agreement require us to pay earn-outs upon successfully (i) meeting certain financial performance targets during the two years following the acquisition; (ii) achieving multiple product development milestones during the three years following the acquisition and (iii) creating pharmaceutical alliances during the six years following the acquisition. The maximum amount of the earn-out payments is approximately $63.0 million.

• Alere Connected Health

     With respect to Alere Connected Health, the terms of the acquisition agreement require us to pay earn-outs upon successfully meeting certain EBIT targets during calendar years 2011 through 2013. The maximum amount of the earn-out payments is £9.0 million (approximately $14.5 million).

• Bioeasy

     With respect to Bioeasy, the terms of the acquisition agreement require us to pay earn-outs upon successfully meeting certain revenue and EBITDA targets during each of the calendar years 2011 through 2013. The maximum amount of the earn-out payments is approximately $7.5 million.

• Capital Toxicology

   �� With respect to Capital Toxicology, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain EBITDA targets during each of the calendar years 2011 and 2012. The maximum amount of the earn-out payments is approximately $16.0 million.

• Free & Clear

     With respect to Free & Clear, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and EBITDA targets during fiscal year 2010. A payment of approximately $11.5 million was made during the second quarter of 2011 which was accrued as of March 31, 2011.

20

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

• Immunalysis

     With respect to Immunalysis, the terms of the acquisition agreement require us to pay earn-outs upon successfully meeting certain gross profit targets during each of the calendar years 2010 through 2012. The maximum remaining amount of the earn-out payments is approximately $5.7 million.

• JSM

     With respect to JSM, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and operating income targets during each of the calendar years 2010 through 2012. The 2010 portion of the earn-out totaling approximately $0.6 million was earned as of December 31, 2010. Payment of the 2010 earn-out is expected to be made during the second quarter of 2011. The maximum remaining amount of the earn-out payments is approximately $2.4 million.

• Medlab

     With respect to Medlab, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and EBITDA targets during each of the calendar years 2011 through 2016. The maximum amount of the earn-out payments is approximately $10.2 million.

• Mologic

     With respect to Mologic, the terms of the acquisition agreement require us to pay earn-outs, in shares of our common stock, upon successfully meeting four research and development project milestones during the four years following the acquisition. A portion of the earn-out was achieved during the fourth quarter of 2010, resulting in an accrual of approximately $3.9 million. Payment of this portion of the earn-out is expected to be made during the second quarter of 2011. The maximum remaining amount of the earn-out payments is $15.0 million, which will be paid in shares of our common stock.

• Alere Home Monitoring

     With respect to Alere Home Monitoring, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and EBITDA targets during each of the calendar years 2010 and 2011. Cash payment for the 2010 portion of the earn-out totaling $12.7 million was paid during the first quarter of 2011. The maximum remaining amount of the earn-out payments is $12.3 million which, if earned, will be paid in shares of our common stock.

• Privately-owned research and development operation

     With respect to our acquisition of a privately-owned research and development operation, the terms of the acquisition agreement require us to pay earn-outs upon successfully meeting multiple product development milestones during the five years following the acquisition. The maximum amount of the earn-out payments is $57.5 million.

• Privately-owned U.K. research and development operation

     With respect to our acquisition of a privately-owned U.K. research and development operation, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and product development targets. The maximum amount of the earn-out payments is $125.0 million and, if earned, payments are expected to be made during the eight-year period following the acquisition date, but could extend thereafter.

     (c) Contingent Obligations

• Agreements with Epocal

     In November 2009, we entered into a distribution agreement with Epocal, Inc., or Epocal, to distribute the epoc^® Blood Analysis System for blood gas and electrolyte testing for $20.0 million, which is recorded on our accompanying consolidated balance sheet in other intangible assets, net. We also entered into a definitive agreement to acquire all of the issued and outstanding equity securities of Epocal for a total potential purchase price of up to

21

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

$255.0 million, including a base purchase price of up to $172.5 million if Epocal achieves certain gross margin and other financial milestones on or prior to October 31, 2014, plus additional payments of up to $82.5 million if Epocal achieves certain other milestones relating to its gross margin and product development efforts on or prior to this date. We also agreed that, if the acquisition is consummated, we will provide $12.5 million in management incentive arrangements, 25% of which will vest over three years and 75% of which will be payable only upon the achievement of certain milestones. The acquisition will also be subject to other closing conditions, including the receipt of any required antitrust or other approvals. In April 2011, we entered into a license agreement with Epocal and amended some of the terms of the definitive agreement to acquire Epocal. The license agreement provides Alere with royalty-free access to certain Epocal intellectual property for use in Alere home-use products and provided for an upfront license payment of $18.0 million, of which $12.0 million was paid in April 2011, $3.0 million will be paid in June 2011 and $3.0 million will be paid in September 2011. The amendment of the definitive agreement increased the working capital target by $18.0 million. The amendment of the agreement also added an additional potential milestone payment of $8.0 million. As a result, the maximum purchase price under the acquisition agreement increased to $263.0 million.

• Option agreement with P&G

     In connection with the formation of SPD in May 2007, we entered into an option agreement with P&G, pursuant to which P&G has the right, for a period of 60 days commencing on May 17, 2011, to require us to acquire all of P&G’s interest in SPD at fair market value, and P&G has the right, upon certain material breaches by us of our obligations to SPD, to acquire all of our interest in SPD at fair market value. No gain on the proceeds that we received from P&G through the formation of SPD will be recognized in our financial statements until P&G’s option to require us to purchase its interest in SPD expires. If P&G chooses to exercise its option, the deferred gain carried on our books would be reversed in connection with the repurchase transaction. As of March 31, 2011 and December 31, 2010, the deferred gain of $288.8 million and $288.4 million, respectively, is presented as a current liability on our accompanying consolidated balance sheets.

(17) Recent Accounting Pronouncements

     From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position, results of operations or cash flows upon adoption.

Recently Adopted Standards

     Effective January 1, 2011, we adopted Accounting Standards Update, or ASU, No. 2009-13,Revenue Recognition (Topic 650): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB EITF, or ASU 2009-13. ASU 2009-13 will separate multiple-deliverable revenue arrangements. This update establishes a selling price hierarchy for determining the selling price of a deliverable. The amendments of this update will replace the term “fair value” in the revenue allocation guidance with “selling price” to clarify that the allocation of revenue is based on entity-specific assumptions rather than assumptions of a marketplace participant. The amendments of this update will eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The amendments in this update will require that a vendor determine its best estimated selling price in a manner consistent with that used to determine the price to sell the deliverable on a standalone basis. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.

(18) Equity Investments

     We account for the results from our equity investments under the equity method of accounting in accordance with ASC 323,Investments — Equity Method and Joint Ventures,based on the percentage of our ownership interest in the business. Our equity investments primarily include the following:

22

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

(a) SPD

     In May 2007, we completed the formation of SPD, our 50/50 joint venture with P&G, for the development, manufacturing, marketing and sale of existing and to-be-developed consumer diagnostic products, outside the cardiology, diabetes and oral care fields. Upon completion of the arrangement to form the joint venture, we ceased to consolidate the operating results of our consumer diagnostics business related to the joint venture. For the three months ended March 31, 2011 and 2010, we recorded earnings of $0.4 million and $3.6 million, respectively, in equity earnings of unconsolidated entities, net of tax, in our accompanying consolidated statements of operations, which represented our 50% share of SPD’s net income for the respective periods.

(b) TechLab

     In May 2006, we acquired 49% of TechLab, Inc., or TechLab, a privately-held developer, manufacturer and distributor of rapid non-invasive intestinal diagnostics tests in the areas of intestinal inflammation, antibiotic associated diarrhea and parasitology. For three months ended March 31, 2011 and 2010, we recorded earnings of $0.5 million and $0.6 million, respectively, in equity earnings of unconsolidated entities, net of tax, in our accompanying consolidated statements of operations, which represented our minority share of TechLab’s net income for the respective periods.

     Summarized financial information for the P&G joint venture and TechLab on a combined basis is as follows (in thousands):

Combined Condensed Results of Operations:

	Three Months Ended March 31,
	2011		2010
Net revenue	$	55,554	$	61,254
Gross profit	$	35,465	$	36,112
Net income after taxes	$	1,834	$	8,398

Combined Condensed Balance Sheets:

	March 31, 2011		December 31, 2010
Current assets	$	94,515	$	93,250
Non-current assets		26,954		25,965
Total assets	$	121,469	$	119,215
Current liabilities	$	59,218	$	62,788
Non-current liabilities		2,371		2,091
Total liabilities	$	61,589	$	64,879

(19) Discontinued Operations

     On January 15, 2010, we completed the sale of our vitamins and nutritional supplements business for a purchase price of approximately $62.6 million in cash, which is net of the final working capital adjustment. The sale included our entire private label and branded nutritional businesses and represents the complete divestiture of our entire vitamins and nutritional supplements business segment. We recognized a gain of approximately $18.7 million ($11.6 million, net of tax) during 2010. The results of the vitamins and nutritional supplements business, which represents our entire vitamins and nutritional supplements business segment, are included in income from discontinued operations, net of tax, in our consolidated financial statements.

     The following summarized financial information related to the vitamins and nutritional supplements businesses has been segregated from continuing operations and reported as discontinued operations through the date of disposition (amounts in thousands).

	Three Months Ended
	March 31, 2010
Net revenue	$	4,362
Income from discontinued operations before income taxes	$	19,429
Provision for income taxes		7,483
Income from discontinued operations, net of taxes	$	11,946

23

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

(20) Guarantor Financial Information

     Our 9% senior subordinated notes due 2016, our 7.875% senior notes due 2016 and our 8.625% senior subordinated notes due 2018 are guaranteed by certain of our consolidated, wholly-owned subsidiaries, or the Guarantor Subsidiaries. The guarantees are full and unconditional and joint and several. The following supplemental financial information sets forth, on a consolidating basis, balance sheets as of March 31, 2011 and December 31, 2010, the statements of operations for the three months ended March 31, 2011 and 2010 and cash flows for the three months ended March 31, 2011 and 2010 for the Company, the Guarantor Subsidiaries and our other subsidiaries, or the Non-Guarantor Subsidiaries. The supplemental financial information reflects the investments of the Company and the Guarantor Subsidiaries in the Guarantor and Non-Guarantor Subsidiaries using the equity method of accounting.

     We have extensive transactions and relationships between various members of the consolidated group. These transactions and relationships include intercompany pricing agreements, intellectual property royalty agreements and general and administrative and research and development cost-sharing agreements. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly-unrelated parties.

24

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2011
(in thousands)

				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net product sales	$	—		$	237,976		$	199,970		$	(30,703	)	$	407,243
Services revenue		—			151,525			16,027			—			167,552
Net product sales and services revenue		—			389,501			215,997			(30,703	)		574,795
License and royalty revenue		—			2,551			6,556			(1,438	)		7,669
Net revenue		—			392,052			222,553			(32,141	)		582,464
Cost of net product sales		770			107,162			112,135			(30,380	)		189,687
Cost of services revenue		—			78,535			6,181			—			84,716
Cost of net product sales and services revenue		770			185,697			118,316			(30,380	)		274,403
Cost of license and royalty revenue		—			—			3,292			(1,438	)		1,854
Cost of net revenue		770			185,697			121,608			(31,818	)		276,257
Gross profit (loss)		(770	)		206,355			100,945			(323	)		306,207
Operating expenses:
Research and development		4,741			18,602			13,199			—			36,542
Sales and marketing		651			82,859			49,699			—			133,209
General and administrative		14,046			60,975			30,530			—			105,551
Total operating expenses		19,438			162,436			93,428			—			275,302
Operating income (loss)		(20,208	)		43,919			7,517			(323	)		30,905
Interest expense, including amortization of original issue discounts and deferred financing costs		(37,660	)		(16,126	)		(4,368	)		19,849			(38,305	)
Other income (expense), net		19,587			(2,368	)		4,966			(19,849	)		2,336
Income (loss) from continuing operations before provision (benefit) for income taxes		(38,281	)		25,425			8,115			(323	)		(5,064	)
Provision (benefit) for income taxes		(18,944	)		11,924			2,815			(125	)		(4,330	)
Income (loss) from continuing operations before equity earnings of unconsolidated entities, net of tax		(19,337	)		13,501			5,300			(198	)		(734	)
Equity in earnings of subsidiaries, net of tax		19,146			—			—			(19,146	)		—
Equity earnings of unconsolidated entities, net of tax		468			—			490			53			1,011
Net income (loss)		277			13,501			5,790			(19,291	)		277
Less: Net income attributable to non-controlling interests		—			—			62			—			62
Net income (loss) attributable to Alere Inc. and Subsidiaries		277			13,501			5,728			(19,291	)		215
Preferred stock dividends		(5,809	)		—			—			—			(5,809	)
Preferred stock repurchase		13,688			—			—			—			13,688
Net income (loss) available to common stockholders	$	8,156		$	13,501		$	5,728		$	(19,291	)	$	8,094

25

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2010
(in thousands)

				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net product sales	$	—		$	204,499		$	174,879		$	(29,277	)	$	350,101
Services revenue		—			147,353			11,951			—			159,304
Net product sales and services revenue		—			351,852			186,830			(29,277	)		509,405
License and royalty revenue		—			1,562			5,227			(940	)		5,849
Net revenue		—			353,414			192,057			(30,217	)		515,254
Cost of net product sales		95			98,051			94,355			(28,796	)		163,705
Cost of services revenue		—			71,685			4,100			—			75,785
Cost of net product sales and services revenue		95			169,736			98,455			(28,796	)		239,490
Cost of license and royalty revenue		—			5			2,742			(940	)		1,807
Cost of net revenue		95			169,741			101,197			(29,736	)		241,297
Gross profit (loss)		(95	)		183,673			90,860			(481	)		273,957
Operating expenses:
Research and development		4,825			17,071			9,097			—			30,993
Sales and marketing		342			77,863			41,386			—			119,591
General and administrative		9,669			62,403			22,591			—			94,663
Total operating expenses		14,836			157,337			73,074			—			245,247
Operating income (loss)		(14,931	)		26,336			17,786			(481	)		28,710
Interest expense, including amortization of original issue discounts and deferred financing costs		(32,199	)		(19,212	)		(2,537	)		20,813			(33,135	)
Other income (expense), net		20,225			1,592			2,040			(20,813	)		3,044
Income (loss) from continuing operations before provision (benefit) for income taxes		(26,905	)		8,716			17,289			(481	)		(1,381	)
Provision (benefit) for income taxes		(11,632	)		7,117			5,126			(165	)		446
Income (loss) from continuing operations before equity earnings of unconsolidated entities, net of tax		(15,273	)		1,599			12,163			(316	)		(1,827	)
Equity in earnings of subsidiaries, net of tax		27,901			—			—			(27,901	)		—
Equity earnings of unconsolidated entities, net of tax		529			—			3,487			24			4,040
Income (loss) from continuing operations		13,157			1,599			15,650			(28,193	)		2,213
Income from discontinued operations, net of tax		1,002			9,956			988			—			11,946
Net income (loss)		14,159			11,555			16,638			(28,193	)		14,159
Less: Net loss attributable to non-controlling interests		—			—			(670	)		—			(670	)
Net income (loss) attributable to Alere Inc. and Subsidiaries		14,159			11,555			17,308			(28,193	)		14,829
Preferred stock dividends		(5,853	)		—			—			—			(5,853	)
Net income (loss) available to common stockholders	$	8,306		$	11,555		$	17,308		$	(28,193	)	$	8,976

26

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING BALANCE SHEET
March 31, 2011
(in thousands)

				Guarantor		Non-Guarantor
	Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	52,658		$	95,589	$	170,419	$	—		$	318,666
Restricted cash		—			1,740		872		—			2,612
Marketable securities		—			829		151		—			980
Accounts receivable, net of allowances		—			205,326		201,617		—			406,943
Inventories, net		—			114,224		145,582		(7,965	)		251,841
Deferred tax assets		29,915			22,632		4,720		—			57,267
Income tax receivable		3,400			275		137		—			3,812
Receivable from joint venture, net		—			2,402		6,147		—			8,549
Prepaid expenses and other current assets		9,490			28,077		62,796		—			100,363
Intercompany receivables		890,614			377,147		5,658		(1,273,419	)		—
Total current assets		986,077			848,241		598,099		(1,281,384	)		1,151,033
Property, plant and equipment, net		1,211			256,439		143,888		(113	)		401,425
Goodwill		—			1,943,572		933,435		(5,272	)		2,871,735
Other intangible assets with indefinite lives		—			12,900		15,191		—			28,091
Finite-lived intangible assets, net		8,820			1,155,435		508,843		—			1,673,098
Deferred financing costs, net, and other non-current assets		49,262			4,946		4,107		—			58,315
Receivable from joint venture, net of current portion		—			—		17,668		—			17,668
Investments in unconsolidated entities		3,645,920			1,196		86,011		(3,669,739	)		63,388
Marketable securities		2,523			—		1,129		—			3,652
Deferred tax assets		—			—		25,637		—			25,637
Intercompany notes receivable		1,186,154			163,781		—		(1,349,935	)		—
Total assets	$	5,879,967		$	4,386,510	$	2,334,008	$	(6,306,443	)	$	6,294,042
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	9,750		$	676	$	7,364	$	—		$	17,790
Current portion of capital lease obligations		—			1,782		418		—			2,200
Accounts payable		7,232			60,696		58,216		—			126,144
Accrued expenses and other current liabilities		(168,243	)		361,592		129,151		(126	)		322,374
Payable to joint venture, net		—			—		—		—			—
Deferred gain on joint venture		16,309			—		272,515		—			288,824
Intercompany payables		358,410			304,843		610,166		(1,273,419	)		—
Total current liabilities		223,458			729,589		1,077,830		(1,273,545	)		757,332
Long-term liabilities:
Long-term debt, net of current portion		2,373,700			—		8,580		—			2,382,280
Capital lease obligations, net of current portion		—			1,108		981		—			2,089
Deferred tax liabilities		(24,427	)		368,030		70,111		—			413,714
Other long-term liabilities		72,823			18,603		77,168		—			168,594
Intercompany notes payables		667,130			475,925		205,668		(1,348,723	)		—
Total long-term liabilities		3,089,226			863,666		362,508		(1,348,723	)		2,966,677
Stockholders’ equity		2,567,283			2,793,255		890,920		(3,684,175	)		2,567,283
Non-controlling interests		—			—		2,750		—			2,750
Equity		2,567,283			2,793,255		893,670		(3,684,175	)		2,570,033
Total liabilities and equity	$	5,879,967		$	4,386,510	$	2,334,008	$	(6,306,443	)	$	6,294,042

27

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING BALANCE SHEET
December 31, 2010
(in thousands)

				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	101,813		$	116,758		$	182,735	$	—		$	401,306
Restricted cash		—			1,739			842		—			2,581
Marketable securities		—			914			1,180		—			2,094
Accounts receivable, net of allowances		—			202,578			194,570		—			397,148
Inventories, net		—			126,374			139,070		(7,724	)		257,720
Deferred tax assets		33,483			19,256			4,372		—			57,111
Income tax receivable		—			1,383			—		—			1,383
Prepaid expenses and other current assets		7,815			22,709			44,390		—			74,914
Intercompany receivables		836,222			439,521			9,843		(1,285,586	)		—
Total current assets		979,333			931,232			577,002		(1,293,310	)		1,194,257
Property, plant and equipment, net		1,343			253,640			135,660		(133	)		390,510
Goodwill		—			1,944,719			891,599		(5,018	)		2,831,300
Other intangible assets with indefinite lives		—			12,900			15,283		—			28,183
Finite-lived intangible assets, net		12,698			1,198,979			495,904		—			1,707,581
Deferred financing costs, net, and other non-current assets		47,884			4,855			4,790		—			57,529
Receivable from joint venture, net of current portion		—			—			23,872		—			23,872
Investments in unconsolidated entities		3,589,973			1,196			42,700		(3,571,313	)		62,556
Marketable securities		2,308			—			7,096		—			9,404
Deferred tax assets		—			—			25,182		—			25,182
Intercompany notes receivable		1,320,925			13,128			—		(1,334,053	)		—
Total assets	$	5,954,464		$	4,360,649		$	2,219,088	$	(6,203,827	)	$	6,330,374
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	9,750		$	157		$	6,984	$	—		$	16,891
Current portion of capital lease obligations		—			1,954			172		—			2,126
Accounts payable		6,938			62,562			57,344		—			126,844
Accrued expenses and other current liabilities		(104,072	)		322,019			127,885		—			345,832
Payable to joint venture, net		—			(546	)		3,333		—			2,787
Deferred gain on joint venture		16,309			—			272,069		—			288,378
Intercompany payables		414,977			294,920			576,058		(1,285,955	)		—
Total current liabilities		343,902			681,066			1,043,845		(1,285,955	)		782,858
Long-term liabilities:
Long-term debt, net of current portion		2,375,554			—			3,012		—			2,378,566
Capital lease obligations, net of current portion		—			1,267			135		—			1,402
Deferred tax liabilities		(34,729	)		381,228			73,667		—			420,166
Other long-term liabilities		64,243			18,396			87,017		—			169,656
Intercompany notes payables		630,456			497,464			200,814		(1,328,734	)		—
Total long-term liabilities		3,035,524			898,355			364,645		(1,328,734	)		2,969,790
Stockholders’ equity		2,575,038			2,781,228			807,910		(3,589,138	)		2,575,038
Non-controlling interests		—			—			2,688		—			2,688
Equity		2,575,038			2,781,228			810,598		(3,589,138	)		2,577,726
Total liabilities and equity	$	5,954,464		$	4,360,649		$	2,219,088	$	(6,203,827	)	$	6,330,374

28

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2011
(in thousands)

				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	277		$	13,501		$	5,790		$	(19,291	)	$	277
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries, net of tax		(19,146	)		—			—			19,146			—
Non-cash interest expense, including amortization of original issue discounts and write-off of deferred financing costs		3,415			50			138			—			3,603
Depreciation and amortization		873			65,838			28,463			(199	)		94,975
Non-cash stock-based compensation expense		1,713			2,147			1,948			—			5,808
Impairment of inventory		—			—			294			—			294
Impairment of long-lived assets		—			—			230			—			230
Impairment of intangible assets		—			2,935			—			—			2,935
Loss on sale of fixed assets		—			304			175			—			479
Gain on sales of marketable securities		—			—			(333	)		—			(333	)
Equity earnings of unconsolidated entities, net of tax		(468	)		—			(490	)		(53	)		(1,011	)
Deferred income taxes		19,469			(22,801	)		(9,906	)		—			(13,238	)
Other non-cash items		1,158			255			193			—			1,606
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net		—			(2,042	)		(3,297	)		—			(5,339	)
Inventories, net		—			12,150			(1,381	)		294			11,063
Prepaid expenses and other current assets		(5,075	)		(6,646	)		(12,752	)		—			(24,473	)
Accounts payable		295			(1,320	)		(4,910	)		��			(5,935	)
Accrued expenses and other current liabilities		(21,341	)		39,480			(3,220	)		(124	)		14,795
Other non-current liabilities		(16	)		207			1,233			—			1,424
Intercompany payable (receivable)		60,600			(100,589	)		39,989			—			—
Net cash provided by (used in) operating activities		41,754			3,469			42,164			(227	)		87,160
Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(19	)		(15,440	)		(13,657	)		172			(28,944	)
Proceeds from sale of property, plant and equipment		—			83			121			—			204
Proceeds from disposition of business		—			—			11,490			—			11,490
Cash paid for acquisitions, net of cash acquired		(34,103	)		(3,153	)		(57,643	)		—			(94,899	)
Proceeds from sales of marketable securities		—			—			6,982			—			6,982
Increase in other assets		(3,958	)		(6,360	)		(1,784	)		—			(12,102	)
Net cash provided by (used in) investing activities		(38,080	)		(24,870	)		(54,491	)		172			(117,269	)
Cash Flows from Financing Activities:
Decrease in restricted cash		—			—			3			—			3
Cash paid for financing costs		(80	)		—			—			—			(80	)
Cash paid for contingent purchase price consideration		(12,975	)		(247	)		—			—			(13,222	)
Proceeds from issuance of common stock, net of issuance costs		11,824			—			—			—			11,824
Repurchase of preferred stock		(49,380	)		—			—			—			(49,380	)
Proceeds from long-term debt		—			937			—			—			937
Payments on long-term debt		(2,438	)		(418	)		(744	)		—			(3,600	)
Net proceeds under revolving credit facilities		—			—			133			—			133
Repurchase of common stock		(618	)		—			—			—			(618	)
Excess tax benefits on exercised stock options		872			198			99			—			1,169
Principal payments on capital lease obligations		—			(461	)		(192	)		—			(653	)
Other		(34	)		—			(210	)		—			(244	)
Net cash provided by (used in) financing activities		(52,829	)		9			(911	)		—			(53,731	)
Foreign exchange effect on cash and cash equivalents		—			223			922			55			1,200
Net decrease in cash and cash equivalents		(49,155	)		(21,169	)		(12,316	)		—			(82,640	)
Cash and cash equivalents, beginning of period		101,813			116,758			182,735			—			401,306
Cash and cash equivalents, end of period	$	52,658		$	95,589		$	170,419		$	—		$	318,666

29

ALERE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(unaudited)

CONSOLIDATING STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2010
(in thousands)

				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	14,159		$	11,555		$	16,638		$	(28,193	)	$	14,159
Income from discontinued operations, net of tax		1,002			9,956			988			—			11,946
Income (loss) from continuing operations		13,157			1,599			15,650			(28,193	)		2,213
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries, net of tax		(27,901	)		—			—			27,901			—
Non-cash interest expense, including amortization of original issue discounts and write-off of deferred financing costs		3,020			—			272			—			3,292
Depreciation and amortization		242			64,923			25,402			(1,319	)		89,248
Non-cash stock-based compensation expense		2,234			3,203			2,133			—			7,570
Impairment of inventory		—			18			177			—			195
Impairment of long-lived assets		—			—			(34	)		—			(34	)
Loss on sale of fixed assets		—			141			72			—			213
Equity earnings of unconsolidated entities, net of tax		(529	)		—			(3,487	)		(24	)		(4,040	)
Deferred income taxes		—			(17,817	)		(3,385	)		10,214			(10,988	)
Other non-cash items		(3,223	)		400			142			—			(2,681	)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net		—			5,203			3,556			—			8,759
Inventories, net		—			(1,196	)		(10,054	)		835			(10,415	)
Prepaid expenses and other current assets		(857	)		(1,219	)		4,759			—			2,683
Accounts payable		3,721			1,542			(14,108	)		—			(8,845	)
Accrued expenses and other current liabilities		(11,298	)		19,852			(7,360	)		(10,306	)		(9,112	)
Other non-current liabilities		(79	)		1,429			888			—			2,238
Intercompany payable (receivable)		(125,662	)		(89,177	)		214,839			—			—
Net cash provided by (used in) continuing operations		(147,175	)		(11,099	)		229,462			(892	)		70,296
Net cash provided by (used in) discontinued operations		—			(224	)		52			—			(172	)
Net cash provided by (used in) operating activities		(147,175	)		(11,323	)		229,514			(892	)		70,124
Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(18	)		(12,118	)		(6,042	)		892			(17,286	)
Proceeds from sale of property, plant and equipment		—			60			106			—			166
Cash paid for acquisitions, net of cash acquired		(116,844	)		(35,888	)		(185,652	)		—			(338,384	)
Net cash received from equity method investments		735			24			7,462			—			8,221
Increase in other assets		—			(349	)		(1,063	)		—			(1,412	)
Net cash provided by (used in) continuing operations		(116,127	)		(48,271	)		(185,189	)		892			(348,695	)
Net cash provided by discontinued operations		—			61,446			2,000			—			63,446
Net cash provided by (used in) investing activities		(116,127	)		13,175			(183,189	)		892			(285,249	)
Cash Flows from Financing Activities:
Decrease (increase) in restricted cash		—			(10	)		171			—			161
Cash paid for financing costs		(875	)		—			—			—			(875	)
Proceeds from issuance of common stock, net of issuance costs		10,634			—			—			—			10,634
Payments on long-term debt		(2,437	)		—			—			—			(2,437	)
Net proceeds (payments) under revolving credit facilities		—			110			(2,430	)		—			(2,320	)
Excess tax benefits on exercised stock options		1,127			—			294			—			1,421
Principal payments on capital lease obligations		—			(125	)		(127	)		—			(252	)
Other		(38	)		—			—			—			(38	)
Net cash provided by (used in) financing activities		8,411			(25	)		(2,092	)		—			6,294
Foreign exchange effect on cash and cash equivalents		—			—			(8,612	)		—			(8,612	)
Net increase (decrease) in cash and cash equivalents		(254,891	)		1,827			35,621			—			(217,443	)
Cash and cash equivalents, beginning of period		294,137			82,602			116,034			—			492,773
Cash and cash equivalents, end of period	$	39,246		$	84,429		$	151,655		$	—		$	275,330

30

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

     This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements by forward-looking words such as “may,” “could,” “should,” “would,” “intend,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “continue” or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial condition or state other “forward-looking” information. Forward-looking statements in this item include, without limitation, statements regarding anticipated expansion and growth in certain of our product and service offerings; the development and introduction of new technologies and products; the potential impact of these technologies and products under development; our expectations with respect to Apollo, our new integrated health management technology platform; our ability to accelerate adoption of our health management services; and our funding plans for our future working capital needs and commitments. Actual results or developments could differ materially from those projected in such statements as a result of numerous factors, including, without limitation, those risks and uncertainties set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010 and other risk factors identified herein or from time to time in our periodic filings with the SEC. We do not undertake any obligation to update any forward-looking statements. This report and, in particular, the following discussion and analysis of our financial condition and results of operations, should be read in light of those risks and uncertainties and in conjunction with our accompanying consolidated financial statements and notes thereto.

Overview

     We enable individuals to take charge of improving their health and quality of life at home, under medical supervision, by developing new capabilities in near-patient diagnosis, monitoring and health management. Our global, leading products and services, as well as our new product development efforts, currently focus on cardiology, women’s health, infectious disease, oncology and toxicology. We are continuing to expand our product and service offerings in all of these categories.

     As a global, leading supplier of near-patient monitoring tools, as well as value-added healthcare services, we are well positioned to improve care and lower healthcare costs for both providers and patients. Our rapidly growing home coagulation monitoring business, which supports doctors’ and patients’ efforts to monitor warfarin therapy using our INRatio blood coagulation monitoring system, continues to represent an early example of this. We have also continued to introduce our new integrated health management technology platform, called Apollo, to our customers since its launch on January 1, 2010. Using a sophisticated data engine for acquiring and analyzing information, combined with a state-of-the-art touch engine for communicating with individuals and their health partners, we expect Apollo to benefit healthcare providers, health insurers and patients alike by enabling more efficient and effective health management programs.

     During the first quarter of 2011, we continued to grow through a number of small, but strategic, acquisitions. We have also continued laying the groundwork for future revenue and earnings growth by focusing our efforts on new product development and introductions. While revenues to date remain modest, our important new products, including the epoc platform, the Alere CD4 Analyzer and the Alere Heart Check System, have begun to penetrate the markets into which they have been launched, and we expect this trend to continue. We are also focused on expanding our worldwide sales force. During the first quarter of 2011, we added 95 new sales persons, and we expect this initiative to continue during the second quarter. We also continued to build awareness and acceptance for our two novel biomarkers, NGAL and placental growth factor, or PIGF.

Financial Highlights

• Net revenue increased by $67.2 million, or 13%, to $582.5 million for the three months ended March 31, 2011, from $515.3 million for the three months ended March 31, 2010.

• Gross profit increased by $32.3 million, or 12%, to $306.2 million for the three months ended March 31, 2011, from $274.0 million for the three months ended March 31, 2010.

• For the three months ended March 31, 2011, we generated net income from continuing operations available to common stockholders of $8.1 million, or $0.09 per basic and diluted common share. For the three months ended March 31, 2010, we generated a net loss from continuing operations available to common stockholders of $3.0 million, or $0.03 per basic and diluted common share.

• In the three months ended March 31, 2011, we repurchased approximately $50.0 million of our outstanding securities, as described in more detail below. In March 2011, our Board of Directors authorized an additional repurchase of up to $50.0 million of our preferred or common stock. The newly authorized repurchase program expires December 31, 2011.

Results of Operations

     The following discussions of our results of continuing operations exclude the results related to the vitamins and nutritional supplements business segment, which was previously presented as a separate operating segment prior to its divestiture in January 2010. The vitamins and nutritional supplements business segment has been segregated from continuing operations and reflected as discontinued operations in our consolidated financial statements. See “Income from Discontinued Operations, Net of Tax” below. Results excluding the impact of currency translation are calculated on the basis of local currency results, using foreign currency exchange rates applicable to the earlier comparative period. We believe presenting information using the same foreign currency exchange rates helps investors isolate the impact of changes in those rates from other trends. Our results of operations were as follows:

     Net Product Sales and Services Revenue, Total and by Business Segment.Total net product sales and services revenue increased by $65.4 million, or 13%, to $574.8 million for the three months ended March 31, 2011, from $509.4 million for the three months ended March 31, 2010. Excluding the impact of currency translation, net product sales and services revenue for the three months ended March 31, 2011 increased by $60.8 million, compared to the three months ended March 31, 2010. Net product sales and services revenue by business segment for the three months ended March 31, 2011 and 2010 are as follows (in thousands):

31

	Three Months Ended March 31,				%
	2011		2010		Change
Professional diagnostics	$	409,785	$	336,203		22	%
Health management		143,063		148,532		(4	)%
Consumer diagnostics		21,947		24,670		(11	)%
Total net product sales and services revenue	$	574,795	$	509,405		13	%

Professional Diagnostics

     Net product sales and services revenue from our professional diagnostics business segment increased by $73.6 million, or 22%, comparing the three months ended March 31, 2011 to the three months ended March 31, 2010. Excluding the impact of currency translation, net product sales and services revenue from our professional diagnostics business segment increased by $69.3 million, or 21%, comparing the three months ended March 31, 2011 to the three months ended March 31, 2010. Revenue increased partially as a result of acquisitions, which contributed an aggregate of $30.8 million of such increase. Also contributing to the increase in net product sales and services revenue was an increase in North American flu-related net product sales during the three months ended March 31, 2011, as compared to the three months ended March 31, 2010. Net product sales from our North American flu-related sales increased approximately $17.2 million, comparing the three months ended March 31, 2011 to the three months ended March 31, 2010, as a result of a more typical flu season in 2011 than the lower than normal flu levels observed in 2010. Excluding the impact of acquisitions and flu-related sales, organic growth, particularly in our cardiology business, helped contribute to the increase in net product sales and services revenue during the three months ended March 31, 2011, as compared to the three months ended March 31, 2010. Excluding the impact of acquisitions and the increase in flu-related sales during the comparable periods, the currency-adjusted organic growth for our professional diagnostics net product sales and services revenue was approximately 7%.

Health Management

     Our health management net product sales and services revenue decreased by $5.5 million, or 4%, comparing the three months ended March 31, 2011 to the three months ended March 31, 2010. Net product sales and services revenue in our health management segment was adversely impacted by the increasingly competitive environment, including the impact of health plans in-sourcing less differentiated services, such as disease management. The decline in revenue was partially offset by increases in our wellness and home monitoring revenues.

Consumer Diagnostics

     Net product sales and services revenue from our consumer diagnostics business segment decreased by $2.7 million, or 11%, comparing the three months ended March 31, 2011 to the three months ended March 31, 2010. The decrease was primarily driven by a decrease of approximately $1.8 million of manufacturing revenue associated with our manufacturing agreement with our 50/50 joint venture with P&G, or SPD, whereby we manufacture and sell consumer diagnostic products to SPD. Net product sales by SPD were $49.8 million during the three months ended March 31, 2011, as compared to $53.1 million during the three months ended March 31, 2010.

     License and Royalty Revenue.License and royalty revenue represents license and royalty fees from intellectual property license agreements with third parties. License and royalty revenue increased by approximately $1.8 million, or 31%, to $7.7 million for the three months ended March 31, 2011, from $5.8 million for the three months ended March 31, 2010. The increase in license and royalty revenue is almost entirely attributable to an increase in royalties earned on flu-related product sales under existing licensing agreements, reflecting a more typical flu season in 2011 than the low level of flu observed in 2010.

     Gross Profit and Margin.Gross profit increased by $32.3 million, or 12%, to $306.2 million for the three months ended March 31, 2011, from $274.0 million for the three months ended March 31, 2010. The increase in gross profit during the three months ended March 31, 2011 was largely attributed to the increase in net product sales and services revenue resulting from acquisitions and organic growth from our professional diagnostics business segment.

     Cost of net revenue included amortization expense of $17.0 million and $14.9 million for the three months ended March 31, 2011 and March 31, 2010, respectively. Cost of net revenue during the three months ended March 31, 2010 included amortization of $2.8 million relating to the write-up of inventory to fair value in connection with the acquisition of Standard Diagnostics during the first quarter of 2010.

32

     Overall gross margin for both the three months ended March 31, 2011 and 2010 was 53%.

     Gross Profit from Net Product Sales and Services Revenue, Total and by Business Segment.Gross profit from net product sales and services revenue increased by $30.5 million, or 11%, to $300.4 million for the three months ended March 31, 2011, from $269.9 million for the three months ended March 31, 2010. Gross profit from net product sales and services revenue by business segment for the three months ended March 31, 2011 and 2010 are as follows (in thousands):

	Three Months Ended March 31,				%
	2011		2010		Change
Professional diagnostics	$	228,122	$	190,874		20	%
Health management		67,734		73,836		(8	)%
Consumer diagnostics		4,536		5,205		(13	)%
Total gross profit from net product sales and services revenue	$	300,392	$	269,915		11	%

Professional Diagnostics

     Gross profit from our professional diagnostics net product sales and services revenue increased by $37.2 million, or 20%, to $228.1 million for the three months ended March 31, 2011, compared to $190.9 million for the three months ended March 31, 2010, principally as a result of gross profit earned on revenue from acquired businesses, an increase in North American flu-related sales and organic growth, as discussed above. Reducing gross profit for the three months ended March 31, 2010 was amortization of $2.8 million relating to the write-up of inventory to fair value in connection with the acquisition of Standard Diagnostics during the first quarter of 2010.

     As a percentage of our professional diagnostics net product sales and services revenue, gross margin for the three months ended March 31, 2011 and 2010 was 56% and 57%, respectively. Higher revenue from our recently acquired toxicology services businesses which contribute lower than segment average gross margin contributed to the decrease in gross margin percentage for the three months ended March 31, 2011, compared to the three months ended March 31, 2010. Gross margins earned from revenues from our European business also declined as compared to those earned in the first quarter of 2010.

Health Management

     Gross profit from our health management net product sales and services revenue decreased by $6.1 million, or 8%, to $67.7 million for the three months ended March 31, 2011, compared to $73.8 million for the three months ended March 31, 2010. The gross profit earned during the three months ended March 31, 2011, as compared to the three months ended March 31, 2010, is a result of the increasingly competitive environment for the health management segment as discussed above.

     As a percentage of our health management net product sales and services revenue, gross margin for the three months ended March 31, 2011 and 2010 was 47% and 50%, respectively.

Consumer Diagnostics

     Gross profit from our consumer diagnostics net product sales and services revenue decreased by $0.7 million, or 13%, to $4.5 million for the three months ended March 31, 2011, compared to $5.2 million for the three months ended March 31, 2010.

     As a percentage of net product sales and services revenue, gross margin for both the three months ended March 31, 2011 and 2010 was 21%.

     Research and Development Expense.Research and development expense increased by $5.5 million, or 18%, to $36.5 million for the three months ended March 31, 2011, from $31.0 million for the three months ended March 31, 2010. Amortization expense of $2.3 million and $1.0 million was included in research and development expense for the three months ended March 31, 2011 and 2010, respectively.

     Research and development expense as a percentage of net revenue was 6% for each of the three months ended March 31, 2011 and 2010.

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     Sales and Marketing Expense.Sales and marketing expense increased by $13.6 million, or 11%, to $133.2 million for the three months ended March 31, 2011, from $119.6 million for the three months ended March 31, 2010. The increase in sales and marketing expense primarily relates to additional spending related to newly-acquired businesses. Also contributing to the increase in sales and marketing expense for the three months ended March 31, 2011, as compared to the three months ended March 31, 2010, were investments made in sales and marketing resources in support of new product launches. Amortization expense of $52.2 million and $50.8 million was included in sales and marketing expense for the three months ended March 31, 2011 and 2010, respectively.

     Sales and marketing expense as a percentage of net revenue was 23% for each of the three months ended March 31, 2011 and 2010.

     General and Administrative Expense.General and administrative expense increased by approximately $10.9 million, or 12%, to $105.6 million for the three months ended March 31, 2011, from $94.7 million for the three months ended March 31, 2010. The increase in general and administrative expense relates primarily to additional spending related to newly-acquired businesses. During the three months ended March 31, 2011 and 2010, we recorded $1.4 million of expense and $3.1 million of income, respectively, in connection with fair value adjustments to acquisition-related contingent consideration obligations in accordance with ASC 805,Business Combinations. Acquisition-related costs of $1.9 million and $4.0 million were included in general and administrative expense for the three months ended March 31, 2011 and 2010, respectively. Amortization expense of $4.7 million and $5.0 million was included in general and administrative expense for the three months ended March 31, 2011 and 2010, respectively.

     General and administrative expense as a percentage of net revenue was 18% for each of the three months ended March 31, 2011 and 2010.

     Interest Expense.Interest expense includes interest charges, amortization of deferred financing costs and amortization of original issue discounts associated with certain debt issuances. Interest expense increased by $5.2 million, or 16%, to $38.3 million for the three months ended March 31, 2011, from $33.1 million for the three months ended March 31, 2010. Such increase was principally due to interest expense incurred on our 8.625% senior subordinated notes issued in September 2010, totaling approximately $8.9 million for the three months ended March 31, 2011. The incremental interest expense was partially offset by lower interest expense incurred on our secured credit facility totaling $12.1 million and $15.7 million for the three months ended March 31, 2011 and 2010, respectively.

     Other Income (Expense), Net.Other income (expense), net includes interest income, realized and unrealized foreign exchange gains and losses, and other income and expense. The components and the respective amounts of other income (expense), net are summarized as follows (in thousands):

	Three Months Ended March 31,
	2011			2010			Change
Interest income	$	473		$	355		$	118
Foreign exchange gains (losses), net		(3,143	)		(221	)		(2,922	)
Other		5,006			2,910			2,096
Total other income (expense), net	$	2,336		$	3,044		$	(708	)

     The decrease in foreign exchange gains (losses), net was primarily a result of a $1.9 million realized foreign currency loss associated with the settlement of an acquisition-related contingent consideration obligation. Also contributing to the decrease was realized and unrealized foreign exchange losses associated with changes in currency exchange rates during the quarter. Other income of $5.0 million for the three months ended March 31, 2011 includes $3.0 million of estimated prior period royalty income and a $1.8 million reversal of a prior period legal settlement reserve no longer deemed necessary. Other income of $2.9 million for the three months ended March 31, 2010 includes a $3.1 million net gain associated with then-pending legal settlements related to previously disclosed intellectual property litigation relating to our health management businesses which were less than the amount of our reserves, offset by a charge related to an accounts receivable reserve for a prior year’s sale.

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     Provision (Benefit) for Income Taxes.The provision (benefit) for income taxes decreased by $4.8 million, to a $4.3 million benefit for the three months ended March 31, 2011, from a $0.4 million provision for the three months ended March 31, 2010. The effective tax rate was 86% for the three months ended March 31, 2011, compared to 32% for the three months ended March 31, 2010. The income tax provision (benefit) for the three months ended March 31, 2011 and 2010 relates to federal, foreign and state income tax provisions (benefits). In addition, the effective tax rate can be impacted each period by discrete factors and events. The income tax provision (benefit) decrease is primarily due to greater pre-tax losses, recognition of a capital loss carryforward and a reduction in a jurisdictional tax rate during the three months ended March 31, 2011, as compared to the three months ended March 31, 2010.

     Equity Earnings in Unconsolidated Entities, Net of Tax.Equity earnings in unconsolidated entities is reported net of tax and includes our share of earnings in entities that we account for under the equity method of accounting. Equity earnings in unconsolidated entities, net of tax for the three months ended March 31, 2011 reflects the following: (i) our 50% interest in SPD in the amount of $0.4 million, (ii) our 40% interest in Vedalab S.A., or Vedalab, in the amount of $0.1 million and (iii) our 49% interest in TechLab, Inc., or TechLab, in the amount of $0.5 million. Equity earnings in unconsolidated entities, net of tax for the three months ended March 31, 2010 reflects the following: (i) our 50% interest in SPD in the amount of $3.6 million, (ii) our 40% interest in Vedalab in the amount of $(0.1) million and (iii) our 49% interest in TechLab in the amount of $0.6 million.

     Income from Discontinued Operations, Net of Tax.The results of the vitamins and nutritional supplements business are included in income from discontinued operations, net of tax, in our consolidated financial statements. For the three months ended March 31, 2010, the discontinued operations generated net income of $11.9 million, which includes a gain of $19.6 million ($12.0 million, net of tax) on the sale of the vitamins and nutritional supplements business.

     Net Income Available to Common Stockholders. For the three months ended March 31, 2011, we generated net income available to common stockholders of $8.1 million, or $0.09 per basic and diluted common share. For the three months ended March 31, 2010, we generated net income available to common stockholders of $9.0 million, or $0.11 per basic and diluted common share. Net income available to common stockholders reflects $5.8 million and $5.9 million of preferred stock dividends paid during the three months ended March 31, 2011 and 2010, respectively, and $13.7 million of income associated with the repurchase of preferred stock during the three months ended March 31, 2011. See Note 5 of the accompanying consolidated financial statements for the calculation of net income per common share.

Liquidity and Capital Resources

     Based upon our current working capital position, current operating plans and expected business conditions, we currently expect to fund our short and long-term working capital needs primarily using existing cash and our operating cash flow, and we expect our working capital position to improve as we improve our future operating margins and grow our business through new product and service offerings and by continuing to leverage our strong intellectual property position. As of March 31, 2011, we have $318.7 million of cash on our accompanying consolidated balance sheet.

     In addition to our cash resources, we may also utilize the revolving credit line, under which we have $150.0 million available for borrowing at March 31, 2011, or other sources of financing to fund a portion of our capital needs and other future commitments, including our contractual contingent consideration obligations and future acquisitions. Our ability to access the capital markets may be impacted by the amount of our outstanding debt and equity and the extent to which our assets are encumbered by our outstanding secured debt. The terms and conditions of our outstanding debt instruments also contain covenants which expressly restrict our ability to incur additional indebtedness and conduct other financings. As of March 31, 2011, we had $2.4 billion in outstanding indebtedness comprised of $400.0 million of 8.625% subordinated notes due 2018, $245.0 million of 7.875% senior notes due 2016, $390.1 million of 9% senior subordinated notes due 2016, $938.8 million under our First Lien Credit Agreement, $250.0 million under our Second Lien Credit Agreement and $150.0 million of 3% senior subordinated convertible notes.

     If the capital and credit markets experience volatility or the availability of funds is limited, we may incur increased costs associated with issuing commercial paper and/or other debt instruments. In addition, it is possible that our ability to access the capital and credit markets could be limited by these or other factors at a time when we would like, or need, to do so, which could have an impact on our ability to refinance maturing debt and/or react to changing economic and business conditions.

     Our funding plans for our working capital needs and other commitments may be adversely impacted by unexpected costs associated with integrating the operations of newly-acquired companies, executing our cost

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savings strategies and prosecuting and defending our existing lawsuits and/or unforeseen lawsuits against us. We also cannot be certain that our underlying assumed levels of revenues and expenses will be realized. In addition, we intend to continue to make significant investments in our research and development efforts related to the substantial intellectual property portfolio we own. We may also choose to further expand our research and development efforts and may pursue the acquisition of new products and technologies through licensing arrangements, business acquisitions, or otherwise. We may also choose to make significant investment to pursue legal remedies against potential infringers of our intellectual property. If we decide to engage in such activities, or if our operating results fail to meet our expectations, we could be required to seek additional funding through public or private financings or other arrangements. In such event, adequate funds may not be available when needed or may be available only on terms which could have a negative impact on our business and results of operations. In addition, if we raise additional funds by issuing equity or convertible securities, dilution to then existing stockholders may result.

     In the three months ended March 31, 2011, we repurchased approximately $50.0 million of our outstanding securities, as described in more detail below. In March 2011, our Board of Directors authorized an additional repurchase of up to $50.0��million of our preferred or common stock. The authorized repurchase program expires December 31, 2011.

     In connection with the formation of SPD in May 2007, we entered into an option agreement with P&G, pursuant to which P&G has the right, for a period of 60 days commencing on May 17, 2011, to require us to acquire all of P&G’s interest in SPD at fair market value, and P&G has the right, upon certain material breaches by us of our obligations to SPD, to acquire all of our interest in SPD at fair market value.

     Summary of Changes in Cash Position

     As of March 31, 2011, we had cash and cash equivalents of $318.7 million, an $82.6 million decrease from December 31, 2010. Our primary sources of cash during the three months ended March 31, 2011 included $87.2 million generated by our operating activities, $11.5 million received from the disposition of a business, $7.0 from the sales of marketable securities and $11.8 million from common stock issuances under employee stock option and stock purchase plans. Our primary uses of cash during the three months ended March 31, 2011 related to $94.9 million net cash paid for acquisitions and transactional costs, $50.0 million related to the repurchase of our preferred and common stock, $28.7 million of capital expenditures, net of proceeds from the sale of equipment, $13.2 million related to payments of acquisition-related contingent consideration obligations, $12.1 million related to an increase in other assets, which includes a purchase of a license agreement totaling $6.0 million, and $3.6 million in repayment of long-term debt. Fluctuations in foreign currencies positively impacted our cash balance by $1.2 million during the three months ended March 31, 2011.

     Cash Flows from Operating Activities

     Net cash provided by operating activities during the three months ended March 31, 2011 was $87.2 million, which resulted from net income from continuing operations of $0.3 million and $95.3 million of non-cash items, offset by $8.5 million of cash used to meet net working capital requirements during the period. The $95.3 million of non-cash items included, among various other items, $95.0 million related to depreciation and amortization, $5.8 million related to non-cash stock-based compensation, $2.9 million related to the impairment of certain intangible assets and $3.6 million of interest expense related to the amortization of deferred financing costs and original issue discounts, partially offset by a $13.2 million decrease related to changes in our deferred tax assets and liabilities which resulted from amortization of intangible assets partially offset by the utilization of tax loss carryforwards, and $1.0 million in equity earnings in unconsolidated entities.

     Cash Flows from Investing Activities

     Our investing activities during the three months ended March 31, 2011 utilized $117.3 million of cash, including $94.9 million net cash paid for acquisitions and transaction-related costs and $28.7 million of capital expenditures, net of proceeds from the sale of equipment, $12.1 million related to an increase in other assets, which includes a purchase of a license agreement totaling $6.0 million, offset by $11.5 million received from the disposition of a business and $7.0 million received from the sales of marketable securities.

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     Cash Flows from Financing Activities

     Net cash used by financing activities during the three months ended March 31, 2011 was $53.7 million. Financing activities during the three months ended March 31, 2011 primarily included $50.0 million related to the repurchase of our preferred and common stock, $13.2 million related to payments of acquisition-related contingent consideration obligations, $3.6 million in repayment of long-term debt, $11.8 million cash received from common stock issuances under employee stock option and stock purchase plans and $1.2 million related to the excess tax benefit on exercised stock options.

     As of March 31, 2011, we had an aggregate of $4.3 million in outstanding capital lease obligations which are payable through 2015.

Income Taxes

     As of December 31, 2010, we had approximately $156.1 million of domestic NOL and capital loss carryforwards and $60.3 million of foreign NOL and capital loss carryforwards, respectively, which either expire on various dates through 2030 or may be carried forward indefinitely. These losses are available to reduce federal, state and foreign taxable income, if any, in future years. These losses are also subject to review and possible adjustments by the applicable taxing authorities. In addition, the domestic NOL carryforward amount at December 31, 2010 included approximately $102.2 million of pre-acquisition losses at Matria, QAS, ParadigmHealth, Biosite, Cholestech, Redwood, HemoSense, Ischemia, Inc. and Ostex International, Inc. Effective January 1, 2009, we adopted a new accounting standard for business combinations. Prior to adoption of this standard, the pre-acquisition losses were applied first to reduce to zero any goodwill and other non-current intangible assets related to the acquisitions, prior to reducing our income tax expense. Upon adoption of the new accounting standard, the reduction of a valuation allowance is generally recorded to reduce our income tax expense.

     Furthermore, all domestic losses are subject to the Internal Revenue Code Section 382 limitation and may be limited in the event of certain cumulative changes in ownership interests of significant shareholders over a three-year period in excess of 50%. Section 382 imposes an annual limitation on the use of these losses to an amount equal to the value of the company at the time of the ownership change multiplied by the long-term tax exempt rate. We have recorded a valuation allowance against a portion of the deferred tax assets related to our NOLs and certain of our other deferred tax assets to reflect uncertainties that might affect the realization of such deferred tax assets, as these assets can only be realized via profitable operations.

Off-Balance Sheet Arrangements

     We had no material off-balance sheet arrangements as of March 31, 2011.

Contractual Obligations

     The following summarizes our principal contractual obligations as of March 31, 2011 that have changed significantly since December 31, 2010 and the effects such obligations are expected to have on our liquidity and cash flow in future periods. Contractual obligations that were presented in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010, but omitted below, represent those that have not changed significantly since that date.

     (a) Acquisition-Related Contingent Consideration Obligations

• Privately-owned health management business

     With respect to a privately-owned health management business which we acquired in 2008, the terms of the acquisition agreement provide for contingent consideration payable upon successfully meeting certain revenue and EBITDA targets. The final earn-out was achieved during the fourth quarter of 2010, resulting in an accrual of approximately €23.9 million ($31.8 million). A cash payment totaling €24.1 million ($34.0 million) was made during the first quarter of 2011.

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• Alere Home Monitoring

     With respect to Tapestry now known as Alere Home Monitoring Inc., or Alere Home Monitoring, the terms of the acquisition agreement require us to pay an earn-out upon successfully meeting certain revenue and EBITDA targets during each of the calendar years 2010 and 2011. Cash payment for the 2010 portion of the earn-out totaling $12.7 million was paid during the first quarter of 2011. The maximum remaining amount of the earn-out payments is $12.3 million which, if earned, will be paid in shares of our common stock.

     (b) Contingent Obligations

• Agreements with Epocal

     In November 2009, we entered into a distribution agreement with Epocal, Inc., or Epocal, to distribute the epoc^® Blood Analysis System for blood gas and electrolyte testing for $20.0 million, which is recorded on our accompanying consolidated balance sheet in other intangible assets, net. We also entered into a definitive agreement to acquire all of the issued and outstanding equity securities of Epocal for a total potential purchase price of up to $255.0 million, including a base purchase price of up to $172.5 million if Epocal achieves certain gross margin and other financial milestones on or prior to October 31, 2014, plus additional payments of up to $82.5 million if Epocal achieves certain other milestones relating to its gross margin and product development efforts on or prior to this date. We also agreed that, if the acquisition is consummated, we will provide $12.5 million in management incentive arrangements, 25% of which will vest over three years and 75% of which will be payable only upon the achievement of certain milestones. The acquisition will also be subject to other closing conditions, including the receipt of any required antitrust or other approvals. In April 2011, we entered into a license agreement with Epocal and amended some of the terms of the definitive agreement to acquire Epocal. The license agreement provides Alere with royalty-free access to certain Epocal intellectual property for use in Alere home-use products and provided for an upfront license payment of $18.0 million, of which $12.0 million was paid in April 2011, $3.0 million will be paid in June 2011 and $3.0 million will be paid in September 2011. The amendment of the definitive agreement increased the working capital target by $18.0 million. The amendment of the agreement also added an additional potential milestone payment of $8.0 million. As a result, the maximum purchase price under the acquisition agreement increased to $263.0 million.

Critical Accounting Policies

     The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements in accordance with generally accepted accounting principles requires us to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a quarterly basis, we evaluate our estimates, including those related to revenue recognition and related allowances, bad debt, inventory, valuation of long-lived assets, including intangible assets and goodwill, income taxes, including any valuation allowance for our net deferred tax assets, contingencies and litigation, and stock-based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

     There have been no significant changes in our critical accounting policies or management estimates since the year ended December 31, 2010. A comprehensive discussion of our critical accounting policies and management estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010.

Recent Accounting Pronouncements

     See Note 17 in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q, regarding the impact of certain recent accounting pronouncements on our consolidated financial statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our market risks, and the ways we manage them, are summarized in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2010 Form 10-K, as amended. There have been no material changes in the three months ended March 31, 2011 to our market risks or management of such risks.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     Our management evaluated, with the participation of our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective at that time. We and our management understand nonetheless that controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. In reaching their conclusions stated above regarding the effectiveness of our disclosure controls and procedures, our CEO and CFO concluded that such disclosure controls and procedures were effective as of such date at the “reasonable assurance” level.

Changes in Internal Control over Financial Reporting

     There was no change in our internal control over financial reporting that occurred during the most recent fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     During the period covered by this report, we issued 14,230 shares of our common stock upon the net exercise of warrants to purchase 33,279 shares of our common stock, resulting in aggregate non-cash consideration to us of $750,015, and 5,519 shares of our common stock upon the exercise of warrants for cash, resulting in aggregate proceeds to us of $100,004. The warrants were issued in private placements relating to various acquisitions. The shares issued upon exercise of the warrants were offered and sold pursuant to the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, or the Securities Act.

     On January 28, 2011, we issued 25,463 shares of common stock in connection with our acquisition of the assets of Pregnancy.org, LLC. We relied on the exemption from registration afforded by Section 4(2) of the Securities Act.

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     The following table provides information regarding shares of our common stock and Series B preferred stock that we repurchased during the first quarter of 2011.

Issuer Purchases of Equity Securities
					Total Number of
					Shares Purchased as		Approximate Dollar Value of
	Total Number		Average		Part of Publicly		Shares that May Yet be
	of Shares		Price Paid		Announced Plans or		Purchased Under the Plans
Period	Purchased (1)		Per Share (2)		Programs (3)		or Programs (3)
January 1, 2011 — January 31, 2011
Series B preferred stock		118,000	$	266.30		118,000
Common stock		—		—		—
As of January 31, 2011							$	18,577,178
February 1, 2011 — February 28, 2011
Series B preferred stock		30,000	$	273.26		30,000
Common stock		—		—		—
As of February 28, 2011							$	10,379,352
March 1, 2011 — March 31, 2011
Series B preferred stock		35,000	$	278.85		35,000
Common stock		16,700	$	36.99		16,700
As of March 31, 2011							$	50,000,000	(4)
First Quarter 2011
Series B preferred stock		183,000	$	269.84		183,000
Common stock		16,700	$	36.99		16,700

(1)	In the first quarter of 2011, we repurchased an aggregate of 183,000 shares of our Series B preferred stock and 16,700 shares of our common stock in the open market and in privately negotiated transactions. All repurchases were made pursuant to an authorized share repurchase plan that we publicly announced on December 9, 2010.
(2)	Includes commission cost.
(3)	On December 8, 2010, the Board of Directors authorized the repurchase of up to $50.0 million of our common stock or preferred stock in the open market or through privately negotiated transactions through March 31, 2011, which amount was fully exhausted through the repurchases described above.
(4)	On March 21, 2011, the Board of Directors authorized the repurchase of up to an additional $50.0 million of our common stock or preferred stock in the open market or through privately negotiated transactions on or before December 31, 2011, all of which remained available for future repurchases as of March 31, 2011. We publicly announced this program on March 22, 2011.

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ITEM 6. EXHIBITS

Exhibits:
Exhibit No.	Description
10.1	Alere Inc. Annual Executive Incentive Compensation Process (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, event date February 3, 2011, filed February 9, 2011)
*31.1	Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*101	Interactive Data Files regarding (a) our Consolidated Statements of Operations for the Three Months Ended March 31, 2011 and 2010, (b) our Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010, (c) our Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 and (d) the Notes to such Consolidated Financial Statements.

* Filed herewith

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALERE INC.
Date: May 9, 2011	/s/ David Teitel
	David Teitel
	Chief Financial Officer and an authorized officer

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