An activist shareholder is angling for seats on Alere's ($ALR) board, claiming the company's decisions have time and again marred profits. Now, after more than tripling its year-over-year losses last quarter, the company may have a harder time convincing investors to elect its nominees at a meeting next week.
Alere posted $764 million in revenue in the second quarter, good for about 9.1% growth, but spiking costs left the diagnostics outfit with a net loss of $65.9 million, far worse than the $18.2 million charge the company reported in Q2 of last year. Professional diagnostics sales jumped 11.7% to $599.6 million, but Alere's Health Information Solutions business declined another 2.8% to $134.8 million.
Alere's many recent acquisitions added about $47.4 million to Q2's diagnostic revenue growth, the company points out, but, as ired investor Coppersmith Capital Management would ask, at what cost?
Coppersmith, which owns about 7% of Alere, believes the company's of-late shopping sprees have wrecked shareholder value, and the management firm wants Alere to sell off the struggling Health Information Solutions unit, ditch its consumer products joint venture with Proctor & Gamble and consider shipping out its toxicology unit. All that would raise about $4 billion Alere could use to pay down its spiraling debt and increase its share price by as much as 136%, according to Coppersmith.
To get that done, Coppersmith has put forth three nominees to Alere's board, and shareholders get to weigh in Aug. 7.
For its part, Alere says Coppersmith's plan would gut a well-positioned infrastructure the company has worked tirelessly to create, and CEO Ron Zwanziger has given the pending proxy squabble a personal edge, questioning Coppersmith co-founder and board nominee Jerome Lande's work at another company and calling his plan "a failure to understand our business and our industry."
Lande counters that Alere is ducking the issue entirely, proposing "only feeble half-measures, with no quantified targets or timetables, in what appears to be nothing more than an attempt to placate frustrated stockholders."
- read Alere's full results