For the second year in a row, Alere Inc. (ALR, Financial) has delayed filing its annual financial report with the Securities and Exchange Commission, citing possible accounting errors.
On March 1, the health care diagnostic test producer notified the SEC it would not be able to submit its annual report within the allotted time and requested an extension, which was set for March 16.
The Massachusetts-based company then submitted another filing on March 15, saying it needed more time to prepare.Ă‚
According to the company, it needs more time “to review certain aspects of revenue recognition at its Korean and Japanese locations, including inappropriate conduct at the Company’s subsidiary in South Korea, Standard Diagnostics Inc.”
The company said some revenue in each of the past four years may have been reported in the wrong quarter.Ă‚
In 2013, revenue was reported at $2,608.64 million. In 2014, revenue was reported at $2,575.28 million. The company is expecting a change within the range of $0 to $5 million for these two years.
In 2015, revenue was $2,463.32 million. The company expects changes between $5 million and $10 million for 2015 and 2016.
The company said it does not expect overall revenue to be affected, but only "a shift of revenue between accounting periods.”
The filing delay only adds to Alere's problems.The company is currenty in a legal dispute with Abbott Laboratories (ABT, Financial). After reaching a buyout agreement early in 2016, Abbott decided to back out after Alere's diabetes unit had its Medicare billing privileges revoked later that year. In response, Alere has appealed to the court system to force the transaction to continue.
If the judge rules in its favor, Alere will become a subsidiary of Abbott.
The company has a market capitalization of $3.24 billion with approximately 87 million shares outstanding. Alere closed at $37.23 Wednesday, up 22 cents or 0.59% from the previous trading day. The stock has lost 4.46% year to date. The company does not distribute dividends. It has a price-sales (P/S) ratio of 1.36 and a price-book (P/B) ratio of 2.25 times. The forward price-earnings (P/E) ratio is 16.33.
Abbott closed at $45.32 Wednesday, up 52 cents or 1.16% from the previous trading day. It has a P/S ratio of 3.76 and a P/B ratio of 3.25. The forward P/E ratio is 16.48. The health care company distributes an annual dividend of $1.06 for a yield of 2.37%.
Disclosure: I have no positioned in any stock mentioned in this article.
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