WALTHAM, Mass. (AP) -- Alere Inc. turned a first-quarter profit as acquisitions helped revenue, and the medical diagnostics company recorded a larger benefit for income taxes compared to the previous year's quarter.
But the Waltham, Mass., company also faces a proxy fight from a prominent shareholder that plans to nominate three candidates to its board. The investment firm Coppersmith Capital Management LLC said in a May 8 letter to Alere Chairman and CEO Ronald Zwanziger that its independent director nominees will better serve the interests of the company and its stockholders.
"We are taking this step in large part because of the substantial and ongoing destruction of stockholder value and the (company's) inability or unwillingness to acknowledge the troubled state in which Alere finds itself as a result of its previous decisions," the letter stated.
Coppersmith said it owns nearly 6 percent of the company's outstanding shares. A news release announcing its letter described Alere as a company with "declining margins, a convoluted business portfolio and a staggering debt load."
Coppersmith said its board nominees include former Stryker Corp. executive Curt Hartman, former Barnes Group CEO Ted Martin and Coppersmith managing partner Jerome Lande.
Alere said in a statement that it has had conversations with Coppersmith, and the company is open to input from the investment firm. Alere added that its board will continue to take actions that are in the best interest of all shareholders and the company.
"We will conduct our regular process in reviewing Coppersmith's nominees," the statement said.
For the first quarter, Alere said Thursday it earned $7.2 million, or 9 cents per share, after paying preferred dividends. That compares to a loss of $4.1 million, or 5 cents per share, in last year's quarter. Adjusted earnings, which don't count things like restructuring charges or acquisition related costs, totaled 53 cents per share.
Revenue climbed 10 percent to $739.2 million.
Analysts expected, on average, adjusted earnings of 52 cents per share on $726.1 million in revenue, according to FactSet.
The company said it recorded a benefit of about $36.9 million in the quarter for income taxes, compared to a $1.5 million benefit last year.
It also said recent professional diagnostics acquisitions accounted for most of its revenue growth in the quarter.
Alere shares climbed 27 cents to $27.12 Thursday afternoon after setting a new, 52-week high price of $29.57 earlier in the session. The shares had already climbed 45 percent so far this year, as of Wednesday's closing price.