More Extrinsic Growth From Inverness on the Way

Comparing year-over-year gains at Inverness Medical Innovations (AMEX: IMA  ) is becoming harder with each passing press release announcing the purchase of another company.

Adjusted net revenue for the third quarter came in up 64% over the year-ago quarter, but almost all of the growth was due to recent purchases. Organic growth of product revenue, adjusted for the impact of its new joint venture with Procter & Gamble (NYSE: PG  ) , was up a more reasonable 8.4% for the quarter.

The company is continuing to establish itself as a global player, experiencing a 34% increase in year-over-year international sales from its Biosite acquisition. That number will only go up after the close of its recent acquisition of PanBio, which will increase its presence in Australia. In addition to increasing its international sales force, Inverness is also moving manufacturing overseas. Many of the products formerly manufactured by Biosite are being transitioned to China, which is helping to increase margins.

As expected, the mergers are having an overall positive impact on the company's expenses. Inverness estimates it has already achieved an annual savings of $39 million from the addition of its two largest acquisitions -- Biosite and Cholestech -- on the way to its goal of $70 million per year within three years. It looks like its outbidding of Beckman Coulter (NYSE: BEC  ) for Biosite might have been a shrewd move. 

Believe it or not, management hinted -- I'd even go so far as to say they insisted -- that they're not done trading stock for revenue. While I'd think it would be hard to integrate multiple companies at the same time, management feels the integration process is easier now that the company is larger (and certainly more experienced). Looks like investors can look forward to a few more quarters of difficult year-over-year comparisons.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 539603, ~/Articles/ArticleHandler.aspx, 10/26/2016 10:05:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,089.28 -79.99 -0.44%
S&P 500 2,133.63 -9.53 -0.44%
NASD 5,254.38 -29.02 -0.55%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
BEC.DL22 $0.00 Down +0.00 +0.00%
Beckman Coulter, I… CAPS Rating: *****
PG $87.15 Up +0.18 +0.21%
Procter and Gamble CAPS Rating: ****