United Therapeutics Reports Second Quarter 2008 Financial Results
SILVER SPRING, Md., July 31, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended June 30, 2008.
Total revenues for the second quarter of 2008 were $68.6 million, up 32.3% from $51.8 million for the second quarter of 2007. Net income for the second quarter of 2008 was $14.3 million, or $0.63 per basic share, compared to $5.8 million, or $0.28 per basic share, for the second quarter of 2007. Gross margins from sales were $60.6 million in the second quarter of 2008, compared to $45.8 million in the second quarter of 2007. The increases in revenues and gross margins corresponded to the growth in sales of our lead product, Remodulin. Earnings before non-cash charges, defined as net income before non-cash income taxes, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $30.7 million for the second quarter of 2008, up 70.3% from $18.0 million for the second quarter of 2007.
"It is gratifying that we are on track to grow our annual revenues in excess of 30% for the sixth consecutive year," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "I am also pleased that, after twelve years of operations, our accumulated deficit has been eliminated and we are now able to report accumulated earnings. These financial accomplishments reflect the decisions of hundreds of doctors and patients to use Remodulin and make it the leading form of prostacyclin therapy in the United States."
Research and Development Expenses
The table below summarizes research and development expenses by major project and non-project components (dollars in thousands):
Three Months Ended June 30, Percentage 2008 2007 Change Project and non-project: Cardiovascular $11,890 $ 9,269 28.3 % Cancer 177 4,061 (95.6)% Infectious disease 220 200 10.0 % Share-based compensation 3,313 2,981 11.1 % Other 3,541 1,459 142.7 % Total research and development expense $19,141 $17,970 6.5 %
The increase in cardiovascular expenses was primarily due to increased expenses related to our inhaled and oral treprostinil programs.
Selling, General and Administrative Expenses
The table below summarizes selling, general and administrative expenses by major category (dollars in thousands):
Three Months Ended June 30, Percentage 2008 2007 Change Category: General and administrative $9,444 $9,066 4.2 % Sales and marketing 9,316 5,708 63.2 % Share-based compensation 4,333 5,700 (24.0)% Total selling, general and administrative expenses $23,093 $20,474 12.8 %
The increase in sales and marketing related expenses reflects increases in salary and related expenses and professional fees incurred in connection with new marketing campaigns and initiatives.
Earnings Before Non-Cash Charges
The following table provides a reconciliation of net income to earnings before non-cash charges for the three-month periods ending June 30, 2008 and 2007, respectively (in thousands, except per share data):
Three Months Ended June 30, 2008 2007 Net income, as reported $14,331 $5,806 Add back: Income tax expense 7,553 2,724 Depreciation and amortization 1,028 796 Impairment charges 152 - Share-based compensation 7,661 8,714 Earnings before non-cash charges $30,725 $18,040 Earnings before non-cash charges per share (1): Basic $1.36 $0.87 Diluted $1.26 $0.82 (1) Calculated by dividing earnings before non-cash charges by the weighted average shares outstanding, as reported below. Conference Call
United Therapeutics will host a half-hour teleconference on Thursday, July 31, 2008, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-800-603-1777, with international callers dialing 1-706-679-8129. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 1-800-642-1687, with international callers dialing 1-706-645-9291, and using conference code: 56186490.
This teleconference is also being webcast and can be accessed via United Therapeutics' website at http://ir.unither.com/events.cfm.
About United Therapeutics
United Therapeutics is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening cardiovascular and infectious diseases and cancer.
Non-GAAP Financial Information
This press release contains a financial measure that does not comply with U.S. generally accepted accounting principals (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.
We use earnings before non-cash charges, a financial non-GAAP measure, internally for operating, budgeting and financial planning purposes and as a metric to determine the efficiency of our operations. We believe our investors' understanding of our performance is enhanced by disclosing this measure. The presentation of this non-GAAP financial measure is not to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
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, our expectations and intentions related to annual revenue growth and our ability to maintain our accumulated earnings. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of July 31, 2008, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason.
Remodulin is a registered trademark of United Therapeutics Corporation. [uthr-g] UNITED THERAPEUTICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 (Unaudited) (Unaudited) Revenues: Net product sales $65,497 $49,381 $124,650 $87,788 Service sales 2,393 1,783 4,620 3,545 Distributor fees 666 667 1,333 667 Total revenues 68,556 51,831 130,603 92,000 Operating expenses: Research and development 19,141 17,970 40,217 46,084 Selling, general and administrative 23,093 20,474 42,424 35,638 Cost of product sales 6,564 4,791 12,739 8,606 Cost of service sales 768 551 1,479 1,132 Total operating expenses 49,566 43,786 96,859 91,460 Income from operations 18,990 8,045 33,744 540 Other income (expense): Interest income 2,804 1,938 6,412 5,983 Interest expense - (713) - (1,424) Equity loss in affiliate (43) (79) (156) (193) Other, net 817 (279) 525 (220) Total other income, net 3,578 867 6,781 4,146 Income before income tax 22,568 8,912 40,525 4,686 Income tax expense (8,237) (3,106) (14,792) (1,661) Net income $14,331 $ 5,806 $25,733 $3,025 Net income per common share: Basic $0.63 $0.28 $1.15 $0.14 Diluted $0.59 $0.26 $1.07 $0.14 Weighted average number of common shares outstanding: Basic 22,600 20,837 22,467 21,069 Diluted 24,328 22,020 24,120 22,219 CONSOLIDATED BALANCE SHEET DATA As of June 30, 2008 (Unaudited, in thousands) Cash, cash equivalents and marketable investments (excluding restricted amounts of $45,037) $342,741 Total assets $679,818 Total liabilities & common stock subject to repurchase $316,411 Total stockholders' equity $363,407
SOURCE United Therapeutics Corporation
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