IRIS International Reports Lower Quarter Earnings

The effect of an acquisition and unfavorable foreign currency contributed to IRIS International Inc. having lower earnings for the fourth quarter when compared to a year ago. For the fourth quarter ending Dec. 31, the Chatsworth-based in vitro diagnostics company had net income of $452,000, or $0.30 per diluted share, on revenues of $29.3 million. For the same period in 2009, the company had net income of $1.9 million, or $0.11 per diluted share, on revenues of $26.5 million. For the full year of 2010, the company had net income of $3 million, or $0.17 per diluted share, on revenues of $107.7 million. For the full year or 2009, the company had net income of $6.3 million, or $0.35 per diluted share, on revenues of $92.6 million. The fourth quarter results were primarily impacted by the dilutive effect of the acquisition of Arista Molecular Laboratory of about $2.1 million, or $0.09 per share, related to its operations and menu expansion initiatives. The fourth quarter also included a net unfavorable foreign currency impact of about $742,000, or $0.03 per share; chief financial officer transition costs of $244,000, or $0.01 per share; and costs of $800,000, or $0.03 per share, related to higher instrument cost of goods. The higher cost of goods was due to a price premium on the last purchase of automated chemistry analyzers sourced in Japan. While the company had lower earnings, it did achieve the strongest sales performance for any quarter or year in the company’s history. “Strong instrument sales and record consumables and service in our core urinalysis business reflect continued improvement in the U.S. and global hospital and laboratory capital spending environment,” said Cesar M. Garcia, IRIS’ chairman, president and CEO. “In addition, our new marketing and sales initiatives for our iQ200 automated microscopy analyzer are resulting in significant penetration into new markets, including Mexico and China, where we have made great strides.” Garcia also said the addition of Arista, which was acquired in July 2010, should contribute financially to the company this year. “We expect Arista to become a growing source of revenues and earnings for IRIS in the rapidly growing field of personalized medicine, and we are continuing to develop a good pipeline of customer targets, which should begin to translate into meaningful revenues in 2011 and achieving break even in this new business in 2012,” Garcia said. IRIS is anticipating 2011 revenue to be between $117 million to $123 million, representing a 10 percent to 15 percent growth over 2010. Jessica Vernabe