Coppersmith Presentation to Alere Inc Stockholders
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Coppersmith's Plan: Operational Rationalization (Cont'd)
3. 25% of R&D expense (roughly $40mm) recently redirected from long-term (10+ years) to short-term projects
> We believe this was a top-down decision without regard for specific project ROI and may instead represent a savings
opportunity
> We believe R&D is too dispersed company-wide and may reflect an inability to prioritize (i.e. too many projects)
> The entire R&D process needs to be evaluated and a strict ROI analysis performed on existing projects, especially the
remaining ~$80mm that is being spent annually on long-term projects for ten years or more in the future
4. If the potential divestitures are executed, then corporate expense savings of $19mm could be generated to adjust for the
proportional reduction in revenue.
Potential Targets
SG&A
Gross Margin
R&D
COPPERSMITH
Corporate
Total
$55mm
$36-71mm
$40mm
$19mm
$150-$180mm
We believe $50-$100mm of savings should be readily achievable, and cannot understand why
management and the Board won't commit to a target of their ownView entire presentation