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Q3 2013 Earnings Call
October 29, 2013 8:30 am ET
Doug Guarino - Director of Corporate Communications & Corporate Relations
Ron Zwanziger - Chairman, Chief Executive Officer and President
David A. Teitel - Chief Financial Officer, Principal Accounting Officer, Vice President and Treasurer
Namal Nawana - Chief Operating Officer
Daniel L. Leonard - Leerink Swann LLC, Research Division
Isaac Ro - Goldman Sachs Group Inc., Research Division
Jeffrey Frelick - Canaccord Genuity, Research Division
William B. Bonello - Craig-Hallum Capital Group LLC, Research Division
Zarak Khurshid - Wedbush Securities Inc., Research Division
Anthony Petrone - Jefferies LLC, Research Division
Nicholas Jansen - Raymond James & Associates, Inc., Research Division
Good morning, and welcome to Alere Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Doug Guarino. Please go ahead, sir.
Thank you. Good morning, and welcome to the Alere conference call to discuss our results for the quarter ended September 30, 2013.
We are joined today by Ron Zwanziger, Chairman and CEO; Dave Teitel, CFO; and Namal Nawana, COO.
Previous Statements by ALR
» Alere Management Discusses Q2 2013 Results - Earnings Call Transcript
» Alere Inc. (ALR) Management Discusses Q2 2013 Results (Webcast)
» Alere Management Discusses Q1 2013 Results - Earnings Call Transcript
Additionally, please note that during this call, we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available on the company's website at alere.com.
And with that, let me turn the call over to Alere Chairman and CEO, Ron Zwanziger. Ron?
Thanks, Doug, and good morning, everyone. I'm pleased to report another excellent quarter, which represents a continuation of the progress we've been making for some time and is in keeping with the commitments we've make to our shareholders. It's an exciting time at Alere, as the strategic initiatives announced during our third quarter call last year are yielding more consistent performance across multiple businesses and geographies, while augmenting our capacity to react more quickly to local challenges.
These efforts are collectively leading to improved earnings predictability. We remain keenly focused on enhancing shareholder value through our 3-point plan to accelerate the company's organic growth rate, improve operational execution, deleverage our capital structure. Successful execution of this plan should drive higher operating margins and improve free cash flow generation and increase earnings growth, which again aligns with the commitments we made to our shareholders.
The first point of the plan is improvement in our organic growth rate, and in Q3 results reflect good progress in this area, which Dave will discuss in some detail in a moment. Broadly speaking, however, the strong performance of the majority of our Professional Diagnostics, driven by sales of a variety of infectious disease and cardiology products in a number of countries around the world, highlights the breadth and the technological strength of our diagnostics portfolio.
The second point of our plan is a commitment to drive higher operating margins, improve free cash flow generation and increase earnings growth. We made good progress with respect to these objectives during the third quarter, as you will have seen from our results today already. Namal, our Chief Financial Officer will provide further details later in the call.
And the third point of our plan originally involved deleveraging to at least 4x debt-to-EBITDA by the end of 2015 through the use of excess cash flow from operations and divestitures among core operations. During the third quarter, we revised this goal to 3x debt-to-EBITDA in the same period, and we remain very confident about our ability to achieve this target. Dave, our Chief Financial Officer will provide an update on progress in the quarter and the status of divestitures and debt reductions in a moment.
Our optimism around the power and value of a technology-driven solution to Chronic Care continues to increase. Alere is well positioned to benefit from the increasing global incidence of chronic disease, coupled with the financial burden that these health care costs place on national budgets, both in the U.S. and elsewhere. Although Health Information Solutions had a challenging contracting season overall, the wins we are achieving in the HIS segment generally reflect an emerging type of customers, such as an ACO or forward thinking managed care entity, that recognizes the savings potential of an integrated diagnostics-driven approach to patient management.