Alere 8-K Inverness Medical Innovations Announces Fourth Quarter 2008 Results

Exhibit 99.1

Contact:	Doug Guarino	Director of Corporate Relations	781-647-3900
	Jon Russell	Vice President of Finance

INVERNESS MEDICAL INNOVATIONS ANNOUNCES
FOURTH QUARTER 2008 RESULTS

WALTHAM, MA...February 18, 2009...Inverness Medical Innovations, Inc. (NYSE:IMA), a global leader in enabling individuals to take charge of their health at home through the merger of rapid diagnostics and health management, today announced its financial results for the quarter ended December 31, 2008.

In the fourth quarter of 2008, the Company recorded net revenue of $459.3 million compared to net revenue of $288.0 million in the fourth quarter of 2007, an increase of 59%. The revenue increase was primarily due to $114.0 million of incremental revenue provided by our Health Management segment, along with $34.6 million of incremental revenue contributed by our other recently acquired businesses and organic growth which, on a currency adjusted basis, was approximately 10.7% in our Professional Diagnostics segment.

For the fourth quarter of 2008, the net income prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) was $16.4 million, or $0.14 per diluted common share, compared to net loss of $15.8 million, or $0.24 per diluted common share, for the fourth quarter of 2007. The Company reported adjusted cash basis net income of $60.2 million, or $0.66 per diluted common share, for the fourth quarter of 2008, compared to adjusted cash basis net income of $27.6 million, or $0.40 per diluted common share, for the fourth quarter of 2007.

The Company’s GAAP results for the fourth quarter of 2008 include amortization of $60.3 million, $5.0 million of restructuring charges and $6.7 million of stock-based compensation expense. GAAP results for the fourth quarter of 2007 include amortization of $28.0 million, the write-off of $4.8 million of in-process research and development acquired in connection with our acquisition of Diamics, $5.2 million of restructuring charges, $5.3 million of stock-based compensation expense, a $0.8 million charge related to the write-up to fair market value of inventory acquired in connection with the Cholestech and HemoSense acquisitions, and an unrealized foreign currency loss of $3.9 million associated with a cash escrow established in connection with the acquisition of BBI Holdings Plc.. These amounts, net of tax, have been excluded from the adjusted cash basis net income per common share for the respective quarters.

A detailed reconciliation of the Company’s adjusted cash basis net income, which is a non-GAAP financial measure, to net income under GAAP, as well as a discussion regarding this non-GAAP financial measure, is included in the schedules to this press release.

The Company will host a conference call beginning at 10:00 a.m. (Eastern Time) today, February 18, 2009, to discuss these results as well as other corporate matters. During the conference call, the Company may answer questions concerning business and financial developments and trends and other business and financial matters. The Company’s responses to these questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

The conference call may be accessed by dialing 706-679-1656 (domestic and international), an access code is not required, or via a link on the Inverness website at www.invernessmedical.com. It is also available via link at
https://event.meetingstream.com/r.htm?e=134985&s=1&k=91C3084D8CBF362549FF6D6A8D9F0BDC using Real Player or Windows Media. An on-demand web cast of the call will be available at the Inverness website (www.invernessmedical.com/News.cfm) two hours after the end of the call and will be accessible for 30 days. Additionally, reconciliations to non-GAAP financial measures not included in this press release that may be discussed during the call will also be available at the same website beginning shortly before the conference call and will continue to be available on this website for 30 days.

For more information about Inverness Medical Innovations, please visit our website athttp://www.invernessmedical.com.

By developing new capabilities in near-patient diagnosis, monitoring and health management, Inverness Medical Innovations enables individuals to take charge of improving their health and quality of life at home. Inverness’ global leading products and services, as well as its new product development efforts, focus on infectious disease, cardiology, oncology, drugs of abuse and women’s health. Inverness is headquartered in Waltham, Massachusetts.

Source: Inverness Medical Innovations

Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)

	Three Months Ended December 31, 2008									Three Months Ended December 31, 2007
							Non-GAAP									Non-GAAP
							Adjusted									Adjusted
				Non-GAAP			Cash						Non-GAAP			Cash
	GAAP			Adjustments			Basis (a)			GAAP			Adjustments			Basis (a)
Net product sales and services revenue	$	454,916		$	—		$	454,916		$	283,040		$	—			283,040
License and royalty revenue		4,350			—			4,350			4,920			—			4,920
Net revenue		459,266			—			459,266			287,960			—			287,960
Cost of sales		213,347			(11,220	)(b) (c) (d)		202,127			149,209			(13,266	)(b) (c) (d) (e)		135,943
Gross profit		245,919			11,220			257,139			138,751			13,266			152,017
Gross margin		54	%					56	%		48	%					53	%
Operating expenses:
Research and development		25,402			(2,506	)(b) (c) (d)		22,896			24,898			(3,838	)(b) (c) (d)		21,060
Purchase of in-process research and development		—			—			—			4,825			(4,825)	(f)		—
Selling, general and administrative		188,192			(56,579	)(b) (c) (d)		131,613			102,200			(22,100	)(b) (c) (d)		80,100
Total operating expenses		213,594			(59,085	)		154,509			131,923			(30,763	)		101,160
Operating income		32,325			70,305			102,630			6,828			44,029			50,857
Interest and other income (expense), net		(19,205	)		147	(c)		(19,058	)		(26,835	)		3,894	(g)		(22,941	)
Income tax (benefit) provision		(3,412	)		28,192	(h)		24,780			(2,529	)		4,676	(h)		2,147
Equity earnings of unconsolidated entities, net of tax		(119	)		1,505	(b) (c)		1,386			1,706			112	(b)		1,818
Net income (loss)	$	16,413		$	43,765		$	60,178		$	(15,772	)	$	43,359		$	27,587
Preferred stock dividends	$	(5,490	)					(5,490	)	$	—					$	—
Net income (loss) available to common stockholders — basic	$	10,923					$	54,688		$	(15,772	)				$	27,587
Net income (loss) per common share:
Basic	$	0.14					$	0.70		$	(0.24	)				$	0.42
Diluted	$	0.14	(i)				$	0.66	(k)	$	(0.24	)(j)				$	0.40	(l)
Weighted average common shares — basic		78,217						78,217			65,525						65,525
Weighted average common shares — diluted		78,941	(i)					92,853	(k)		65,525	(j)					69,578	(l)

(a)	In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or loss (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business. In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant. Management believes that excluding such charges and income from income or loss allows investors and management to evaluate and compare the Company’s operating results from continuing operations from period to period in a meaningful and consistent manner. Due to the frequency of their occurrence in its business, the Company does not adjust net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that “net income or loss on an adjusted cash basis” is not a standard financial measurement under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered as an alternative to net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, “net income or loss on an adjusted cash basis” presented in this press release may not be comparable to similar measures used by other companies.
(b)	Amortization expense of $60.3 million and $28.0 million in the fourth quarter of 2008 and 2007 GAAP results, respectively, including $9.2 million and $10.2 million charged to cost of sales, $1.0 million and $0.7 million charged to research and development, $49.9 million and $17.0 million charged to selling, general and administrative expense, in the respective quarters, with $0.2 million and $0.1 million charged through equity earnings of unconsolidated entities, net of tax, during the respective quarters.
(c)	Restructuring charge associated with the decision to close facilities of $5.0 million and $5.2 million in the fourth quarter of 2008 and 2007 GAAP results, respectively. The $5.0 million charge for the three months ended December 31, 2008 included $1.5 million charged to cost of sales, $0.4 million charged to research and development, $1.7 million charged to selling, general and administrative expense, $0.1 million charged to interest expense and $1.3 million charged through equity earnings of unconsolidated entities, net of tax. The $5.2 million charge for the three months ended December 31, 2007 included $2.0 million charged to cost of sales, $2.2 million charged to research and development and $1.0 million charged to selling, general and administrative expense. These charges have been excluded from net income or loss because they have a significant impact on results yet do not occur on a consistent or regular basis in the Company’s business.
(d)	Compensation costs of $6.7 million and $5.3 million associated with stock-based compensation expense in the fourth quarter of 2008 and 2007 GAAP results, respectively, including $0.5 million and $0.3 million charged to cost of sales, $1.2 million and $0.9 million charged to research and development and $5.0 million and $4.1 million charged to selling, general and administrative, in the respective quarters.
(e)	A write-off in the amount of $0.8 million during the fourth quarter of 2007, relating to inventory write-ups recorded in connection with the acquisitions of Cholestech Corp. and HemoSense, Inc. during the third and fourth quarters, respectively, of 2007.
(f)	Purchase of in-process research and development in the fourth quarter of 2007 includes a write-off of $4.8 million associated with the value of in-process research and development costs incurred in connection with our acquisition of Diamics, Inc.
(g)	A $3.9 million unrealized foreign currency loss associated with a cash escrow established in connection with the acquisition of BBI Holdings Plc.
(h)	Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f) and (g).
(i)	Included in the weighted average diluted common shares for the calculation of net income per common share on a GAAP basis for the three months ended December 31, 2008, are dilutive shares consisting of 724,000 common stock equivalent shares from the potential exercise of stock options and warrants. Potential dilutive shares consisting of 3,411,000 common stock equivalent shares from the potential conversion of convertible debt securities and potential dilutive shares consisting of 10,502,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock were not included in the calculation of net income per common share on a GAAP basis for the three months ended December 31, 2008 because inclusion thereof would be antidilutive.
(j)	For the three months ended December 31, 2007, potential dilutive shares were not used in the calculation of diluted net loss per common share under GAAP because inclusion thereof would be antidilutive.
(k)	Included in the weighted average diluted common shares for the calculation of net income per common share for the three months ended December 31, 2008, on an adjusted cash basis, are dilutive shares consisting of 724,000 common stock equivalent shares from the potential exercise of stock options and warrants. Also included were potential dilutive shares consisting of 3,411,000 common stock equivalent shares from the potential conversion of convertible debt securities and 10,502,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock. The diluted net income per common share calculation for the three months ended December 31, 2008, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $0.7 million and the add back of preferred stock dividends related to the Series B convertible preferred stock resulting in net income available to common stockholders of $60.9 million for the three months ended December 31, 2008.
(l)	Included in the weighted average diluted common shares for the calculation of diluted net income per common share for the three months ended December 31, 2007, on an adjusted cash basis, are dilutive shares consisting of 4,053,000 common stock equivalent shares from the potential exercise of stock options and awards and warrants. The diluted net income per common share calculation for the three months ended December 31, 2007, on an adjusted cash basis, does not include 2,868,000 common stock equivalent shares from the potential conversion of convertible debt, as inclusion thereof would be antidilutive.

Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and
Reconciliation to Non-GAAP Adjusted Cash Basis Amounts
(in $000s, except per share amounts)

	Year Ended December 31, 2008									Year Ended December 31, 2007
							Non-GAAP									Non-GAAP
							Adjusted									Adjusted
				Non-GAAP			Cash						Non-GAAP			Cash
	GAAP			Adjustments			Basis (a)			GAAP			Adjustments			Basis (a)
Net product sales and services revenue	$	1,645,600		$	—		$	1,645,600		$	817,561		$	—		$	817,561
License and royalty revenue		25,826			—			25,826			21,979			—			21,979
Net revenue		1,671,426			—			1,671,426			839,540			—			839,540
Cost of sales		810,867			(64,780	)(b) (c) (d) (e)		746,087			445,813			(34,877	)(b) (c) (d) (e)		410,936
Gross profit		860,559			64,780			925,339			393,727			34,877			428,604
Gross margin		51	%					55	%		47	%					51	%
Operating expenses:
Research and development		111,828			(15,586	)(b) (c) (d)		96,242			69,547			(7,597	)(b) (c) (d)		61,950
Purchase of in-process research and development		—			—			—			173,825			(173,825	)(f)		—
Selling, general and administrative		684,879			(198,865	)(b) (c) (d)		486,014			326,208			(94,021	)(b) (c) (d)		232,187
Total operating expenses		796,707			(214,451	)		582,256			569,580			(275,443	)		294,137
Operating (loss) income		63,852			279,231			343,083			(175,853	)		310,320			134,467
Interest and other income (expense), net		(103,356	)		8,762	(c) (i)		(94,594	)		(74,251	)		17,557	(g) (h)		(56,694	)
Income tax (benefit) provision		(16,686	)		99,242	(j)		82,556			(979	)		14,923	(j)		13,944
Equity earnings of unconsolidated entities, net of tax		1,050			8,183	(b) (c)		9,233			4,372			448	(b)		4,820
Net (loss) income	$	(21,768	)	$	196,934		$	175,166		$	(244,753	)	$	313,402		$	68,649
Preferred stock dividends	$	(13,989	)					(13,989	)	$	—					$	—
Net (loss) income available to common stockholders — basic	$	(35,757	)				$	161,177		$	(244,753	)				$	68,649
Net (loss) income per common share:
Basic	$	(0.46	)				$	2.07		$	(4.75	)				$	1.33
Diluted	$	(0.46	)(k)				$	1.97	(l)	$	(4.75	)(k)				$	1.27	(m)
Weighted average common shares — basic		77,778						77,778			51,510						51,510
Weighted average common shares — diluted		77,778	(k)					83,376	(l)		51,510	(k)					54,236	(m)

(a)	In calculating net income or loss on an adjusted cash basis, the Company excludes from net income or loss (i) certain non-cash charges, including amortization expense and stock-based compensation expense, (ii) non-recurring charges and income, and (iii) certain other charges and income that have a significant positive or negative impact on results yet do not occur on a consistent or regular basis in its business. In determining whether a particular item meets one of these criteria, management considers facts and circumstances that it believes are relevant. Management believes that excluding such charges and income from income or loss allows investors and management to evaluate and compare the Company’s operating results from continuing operations from period to period in a meaningful and consistent manner. Due to the frequency of their occurrence in its business, the Company does not adjust net income or loss for the costs associated with litigation, including payments made or received through settlements. It should be noted that “net income or loss on an adjusted cash basis” is not a standard financial measurement under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered as an alternative to net income or loss or cash flow from operating activities, as a measure of liquidity or as an indicator of operating performance or any measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, “net income or loss on an adjusted cash basis” presented in this press release may not be comparable to similar measures used by other companies.
(b)	Amortization expense of $215.3 million and $64.6 million for the year 2008 and 2007 GAAP results, respectively, including $43.4 million and $24.1 million charged to cost of sales, $3.7 million and $2.9 million charged to research and development, $167.3 million and $37.2 million charged to selling, general and administrative expense, in the respective periods, with $0.9 million and $0.4 million charged through equity earnings of unconsolidated entities, net of tax, during the respective periods.
(c)	Restructuring charge associated with the decision to close facilities of $50.7 million and $6.7 million for the year 2008 and 2007 GAAP results, respectively. The $50.7 million charge for the year ended December 31, 2008 included $17.9 million charged to cost of sales, $7.2 million charged to research and development, $11.3 million charged to selling, general and administrative expense, $7.1 million charged to interest expense and $7.2 million charged through equity earnings of unconsolidated entities, net of tax. The $6.7 million charge for the year ended December 31, 2007 included $2.0 million charged to cost of sales, $2.5 million charged to research and development and $2.2 million charged to selling, general and administrative expense. These charges have been excluded from net income or loss because they have a significant impact on results yet do not occur on a consistent or regular basis in the Company’s business.
(d)	Compensation costs of $26.4 million and $57.4 million associated with stock-based compensation expense for the year 2008 and 2007 GAAP results, respectively, including $1.5 million and $0.6 million charged to cost of sales, $4.6 million and $2.2 million charged to research and development and $20.3 million and $54.6 million charged to selling, general and administrative. The $54.6 million charged to selling, general and administrative during the year-ended December 31, 2007 includes $45.2 million of costs associated with stock option acceleration and conversion in connection with our acquisition of Biosite, Inc.
(e)	A write-off in the amount of $2.0 million and $8.2 million during the year ended December 31, 2008 and 2007, respectively, relating to inventory write-ups recorded in connection with the acquisitions of Panbio Limited and BBI Holdings Plc. during the first quarter of 2008 and Biosite, Inc., Cholestech Corp. and HemoSense, Inc. during the second, third and fourth quarters of 2007, respectively.
(f)	Purchase of in-process research and development during the year ended December 31, 2007 includes a write-off of $169.0 million and $4.8 million associated with the value of in-process research and development costs incurred in connection with our acquisitions of Biosite, Inc. and Diamics, Inc., respectively.
(g)	Charges totaling $15.6 million associated with the write-off of debt origination costs and a prepayment premium paid upon early extinguishment of related debt during the year ended December 31, 2007, in conjunction with our financing arrangements.
(h)	A $3.9 million unrealized foreign currency loss associated with a cash escrow established in connection with the acquisition of BBI Holdings Plc, partially offset by a $1.9 million foreign currency gain realized on the settlement of intercompany notes.
(i)	A $1.7 million net realized foreign currency loss associated with a cash escrow established in connection with the acquisition of BBI Holdings Plc.
(j)	Tax effect on adjustments as discussed above in notes (b), (c), (d), (e), (f), (g), (h) and (i).
(k)	For the year ended December 31, 2008 and 2007, potential dilutive shares were not used in the calculation of diluted net loss per common share under GAAP because inclusion thereof would be antidilutive.
(l)	Included in the weighted average diluted common shares for the calculation of net income per common share for the year ended December 31, 2008, on an adjusted cash basis, are dilutive shares consisting of 2,188,000 common stock equivalent shares from the potential exercise of stock options and warrants and potential dilutive shares consisting of 3,411,000 common stock equivalent shares from the potential conversion of convertible debt securities. The diluted net income per common share calculation for the year ended December 31, 2008, on an adjusted cash basis, includes the add back of interest expense related to the convertible debt of $2.8 million resulting in net income available to common stockholders of $164.0 million. Potential dilutive shares consisting of 6,681,000 common stock equivalent shares from the potential conversion of Series B convertible preferred stock for the year ended December 31, 2008 were not used in the calculation of diluted net income per common share, on an adjusted cash basis, because inclusion thereof would be antidilutive.
(m)	Included in the weighted average diluted common shares for the calculation of diluted net income per common share for the year ended December 31, 2007, on an adjusted cash basis, are dilutive shares consisting of 2,726,000 common stock equivalent shares from the potential exercise of stock options and awards and warrants. The diluted net income per common share calculation for the year ended December 31, 2007, on an adjusted cash basis, does not include 1,807,000 common stock equivalent shares from the potential conversion of convertible debt, as inclusion thereof would be antidilutive.

Inverness Medical Innovations, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in $000s)

	December 31,		December 31,
	2008		2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	141,324	$	414,732
Restricted cash		2,748		141,869
Marketable securities		1,763		2,551
Accounts receivable, net		280,608		163,380
Inventories, net		199,131		148,231
Prepaid expenses and other current assets		196,969		82,211
Total current assets		822,543		952,974
PROPERTY, PLANT AND EQUIPMENT, NET		284,483		267,880
GOODWILL AND OTHER INTANGIBLE ASSETS, NET		4,717,704		3,494,174
DEFERRED FINANCING COSTS AND OTHER ASSETS, NET		130,630		165,731
Total assets	$	5,955,360	$	4,880,759
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of notes payable	$	19,509	$	21,096
Other current liabilities		345,836		257,812
Total current liabilities		365,345		278,908
LONG-TERM LIABILITIES:
Notes payable, net of current portion		1,501,025		1,366,753
Deferred tax liability		462,787		326,128
Other long-term liabilities		347,365		322,303
Total long-term liabilities		2,311,177		2,015,184
TOTAL STOCKHOLDERS’ EQUITY		3,278,838		2,586,667
Total liabilities and stockholders’ equity	$	5,955,360	$	4,880,759