United Therapeutics Corporation Reports Second Quarter 2015 Financial Results
"Orenitram® sales grew nearly 300% as compared to the second quarter of 2014 when the product was first launched," said
Key financial highlights include (in thousands, except per share data):
Three Months Ended |
||||||||
2015 |
2014 |
|||||||
Revenues |
$ |
347,161 |
$ |
322,802 |
||||
Net income |
$ |
99,211 |
$ |
111,852 |
||||
Non-GAAP earnings(1) |
$ |
132,517 |
$ |
118,655 |
||||
Net income, per diluted share |
$ |
1.91 |
$ |
2.10 |
||||
Non-GAAP earnings, per diluted share(1) |
$ |
2.55 |
$ |
2.23 |
||||
(1) See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below. |
Financial Results for the Three Months Ended
Revenues
The table below summarizes the components of net revenues (dollars in thousands):
Three Months Ended |
Percentage | ||||||||
2015 |
2014 |
Change | |||||||
Cardiopulmonary products: |
|||||||||
Remodulin® |
$ |
135,957 |
$ |
138,152 |
(1.6) |
% | |||
Tyvaso® |
115,841 |
121,227 |
(4.4) |
% | |||||
Adcirca® |
68,081 |
55,318 |
23.1 |
% | |||||
Orenitram® |
25,870 |
6,632 |
290.1 |
% | |||||
Other |
1,412 |
1,473 |
(4.1) |
% | |||||
Total net revenues |
$ |
347,161 |
$ |
322,802 |
7.5 |
% |
Revenues for the quarter ended
Expenses
Research and development expense. The table below summarizes research and development expense by major project and non-project components (dollars in thousands):
Three Months Ended |
Percentage |
||||||||
2015 |
2014 |
Change |
|||||||
Project and non-project component: |
|||||||||
Cardiopulmonary |
$ |
30,886 |
$ |
28,274 |
9.2 |
% | |||
Share-based compensation expense |
13,400 |
1,047 |
1,179.8 |
% | |||||
Other |
5,125 |
10,421 |
(50.8) |
% | |||||
Total research and development expense |
$ |
49,411 |
$ |
39,742 |
24.3 |
% |
Share-based compensation expense. The increase in share-based compensation of
Selling, general and administrative expense. The table below summarizes selling, general and administrative expense by major categories (dollars in thousands):
Three Months Ended |
Percentage |
||||||||
2015 |
2014 |
Change |
|||||||
Category: |
|||||||||
General and administrative |
$ |
53,040 |
$ |
47,889 |
10.8 |
% | |||
Sales and marketing |
24,373 |
22,046 |
10.6 |
% | |||||
Share-based compensation expense (benefit) |
32,574 |
(1,904) |
1,810.8 |
% | |||||
Total selling, general and administrative expense |
$ |
109,987 |
$ |
68,031 |
61.7 |
% |
General and administrative. The increase in general and administrative expense of
Share-based compensation expense (benefit). The increase in share-based compensation of
Cost of product sales. The table below summarizes cost of product sales by major categories (dollars in thousands):
Three Months Ended |
Percentage |
||||||||
2015 |
2014 |
Change |
|||||||
Category: |
|||||||||
Cost of product sales |
$ |
14,748 |
$ |
39,725 |
(62.9) |
% | |||
Share-based compensation expense (benefit) |
1,310 |
(1,016) |
228.9 |
% | |||||
Total cost of product sales |
$ |
16,058 |
$ |
38,709 |
(58.5) |
% |
Cost of product sales. The decrease in cost of product sales for the quarter ended
Income Tax Expense
The provision for income tax expense is based on an estimated annual effective tax rate that is subject to adjustment in subsequent quarterly periods if any of the components used to estimate the annual effective tax rate are updated or revised. Our estimated annual effective tax rates were approximately 42 percent and approximately 35 percent as of
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for the following charges, which are presented net of the annual effective income tax rate, as applicable: (1) interest expense; (2) license fees; (3) depreciation and amortization; (4) impairment charges; and (5) share-based compensation expense (stock option, share tracking award and employee stock purchase plan).
A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):
Three Months Ended |
||||||||
2015 |
2014 |
|||||||
Net income, as reported |
$ |
99,211 |
$ |
111,852 |
||||
Adjust for the following charges(1): |
||||||||
Interest expense |
758 |
3,071 |
||||||
Depreciation and amortization |
4,901 |
4,944 |
||||||
Share-based compensation expense (benefit) |
27,647 |
(1,212) |
||||||
Non-GAAP earnings |
$ |
132,517 |
$ |
118,655 |
||||
Non-GAAP earnings per share: |
||||||||
Basic |
$ |
2.88 |
$ |
2.49 |
||||
Diluted |
$ |
2.55 |
$ |
2.23 |
||||
Weighted average number of common shares outstanding: |
||||||||
Basic |
46,091 |
47,617 |
||||||
Diluted |
51,905 |
53,252 |
||||||
(1) Non-GAAP earnings adjustments are presented net of the impact of our estimated effective income tax rates of approximately 42 percent and approximately 35 percent for the three-months ended |
Conference Call
We will host a half-hour teleconference on
This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.
About
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP earnings, that does not comply with
We use non-GAAP earnings to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure improves investors' understanding of our financial results by excluding certain expenses that we do not consider when evaluating and comparing the performance of our core operations and making operating decisions. However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature. In addition, our calculation of this non-GAAP financial measure may differ from the methodology used by other companies. The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of net income, the most directly comparable GAAP financial measure, to non-GAAP earnings can be found in the table above under the heading, Non-GAAP Earnings.
Forward-looking Statements
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements relating to the continued growth of Orenitram. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the
Orenitram, Remodulin and Tyvaso are registered trademarks of
Adcirca is a registered trademark of Eli Lilly and Company.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | |||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||
(Unaudited) |
(Unaudited) |
||||||||||||
Revenues: |
|||||||||||||
Net product sales |
$ |
345,749 |
$ |
321,329 |
$ |
671,666 |
$ |
605,882 |
|||||
Other |
1,412 |
1,473 |
2,999 |
6,323 |
|||||||||
Total revenues |
347,161 |
322,802 |
674,665 |
612,205 |
|||||||||
Operating expenses: |
|||||||||||||
Research and development |
49,411 |
39,742 |
159,623 |
52,190 |
|||||||||
Selling, general and administrative |
109,987 |
68,031 |
321,327 |
98,246 |
|||||||||
Cost of product sales |
16,058 |
38,709 |
36,836 |
69,309 |
|||||||||
Total operating expenses |
175,456 |
146,482 |
517,786 |
219,745 |
|||||||||
Operating income |
171,705 |
176,320 |
156,879 |
392,460 |
|||||||||
Other (expense) income: |
|||||||||||||
Interest expense |
(1,296) |
(4,746) |
(3,355) |
(9,356) |
|||||||||
Other, net |
(2,075) |
1,459 |
(1,982) |
3,145 |
|||||||||
Total other expense, net |
(3,371) |
(3,287) |
(5,337) |
(6,211) |
|||||||||
Income before income taxes |
168,334 |
173,033 |
151,542 |
386,249 |
|||||||||
Income tax expense |
(69,123) |
(61,181) |
(68,972) |
(136,873) |
|||||||||
Net income |
$ |
99,211 |
$ |
111,852 |
$ |
82,570 |
$ |
249,376 |
|||||
Net income per common share: |
|||||||||||||
Basic |
$ |
2.15 |
$ |
2.35 |
$ |
1.78 |
$ |
5.09 |
|||||
Diluted |
$ |
1.91 |
$ |
2.10 |
$ |
1.57 |
$ |
4.54 |
|||||
Weighted average number of common shares outstanding: |
|||||||||||||
Basic |
46,091 |
47,617 |
46,397 |
49,002 |
|||||||||
Diluted |
51,905 |
53,252 |
52,457 |
54,948 |
SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited, in thousands) | ||||
Cash, cash equivalents and marketable securities (excluding restricted amounts) |
$ |
556,167 |
||
Total assets |
1,736,822 |
|||
Total liabilities and temporary equity |
696,349 |
|||
Total stockholders' equity |
1,040,473 |
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