United Therapeutics Reports Third Quarter 2008 Financial Results
SILVER SPRING, Md., Oct 30, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended September 30, 2008. Total revenues for the third quarter of 2008 were $75.0 million, up from $59.0 million for the third quarter of 2007. Net income for the third quarter of 2008 was $12.6 million, or $0.55 per basic share, compared to $14.8 million, or $0.70 per basic share, for the third quarter of 2007. Gross margins from sales were $66.7 million for the third quarter of 2008, compared to $52.2 million for the third quarter of 2007. The increases in revenues and gross margins corresponded to the continued 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 $37.8 million for the third quarter of 2008, up 39% from $27.3 million for the third quarter of 2007.
"I am enthused about being on track for a $300 million per year revenue run rate based on this quarter's results," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "We are also energized by the great opportunity of bringing prostacyclin therapy to the thousands of additional patients who need it."
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 September 30, 2008 2007 Percentage Change Project and non-project: Cardiovascular $11,678 $11,761 (0.7)% Cancer 984 3,408 (71.1)% Infectious disease 347 202 71.8% Share-based compensation 4,701 3,148 49.3% Other 1,503 1,040 44.5% Total research and development expenses $19,213 $19,559 (1.8)% Selling, General and Administrative Expenses
The table below summarizes selling, general and administrative expenses by major category (dollars in thousands):
Three Months Ended September 30, Percentage 2008 2007 Change Category: General and administrative $9,832 $8,380 17.3% Sales and marketing 7,920 5,923 33.7% Share-based compensation 12,266 4,860 152.4% Total selling, general and administrative expenses $30,018 $19,163 56.6%
The increase in sales and marketing expenses primarily reflects increases in salaries and related expenses as a result of headcount growth.
Share-based compensation was higher for the quarter ended September 30, 2008, compared to the same quarter in 2007, as a result of an approximate $5.2 million increase relating to the fair value of a potential year-end stock option grant to our Chief Executive Officer, which is governed by her employment agreement.
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 September 30, 2008 and 2007 (in thousands, except per share data):
Three Months Ended September 30, 2008 2007 Net income, as reported $12,623 $14,848 Add back: Income tax expense 6,712 2,010 Depreciation and amortization 1,143 865 Impairment charges 353 1,515 Share-based compensation 16,989 8,040 Earnings before non-cash charges $37,820 $27,278 Earnings before non-cash charges per share (1): Basic $1.65 $1.29 Diluted $1.48 $1.22 (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, October 30, 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: 67213939.
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 financial performance and results, including our annual revenue run rate and our belief about the future prospects of Remodulin. 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 October 30, 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 Nine Months Ended September 30, September 30, 2008 2007 2008 2007 (Unaudited) (Unaudited) Revenues: Net product sales $72,149 $56,661 $196,799 $144,449 Service sales 2,324 1,718 6,944 5,263 Distributor fees 559 666 1,892 1,333 Total revenues 75,032 59,045 205,635 151,045 Operating expenses: Research and development 19,213 19,559 59,430 65,642 Selling, general and administrative 30,018 19,163 72,442 54,801 Cost of product sales 6,950 5,568 19,689 14,174 Cost of service sales 791 598 2,270 1,730 Total operating expenses 56,972 44,888 153,831 136,347 Income from operations 18,060 14,157 51,804 14,698 Other income (expense): Interest income 2,311 3,681 8,723 9,663 Interest expense - (717) - (2,141) Equity loss in affiliate 1 (72) (155) (265) Other, net (493) (34) 32 (254) Total other income, net 1,819 2,858 8,600 7,003 Income before income tax 19,879 17,015 60,404 21,701 Income tax expense (7,256) (2,167) (22,048) (3,828) Net income $12,623 $14,848 $38,356 $17,873 Net income per common share: Basic $0.55 $0.70 $1.70 $0.85 Diluted $0.50 $0.66 $1.55 $0.80 Weighted average number of common shares outstanding: Basic 22,934 21,087 22,624 21,075 Diluted 25,482 22,443 24,707 22,380 CONSOLIDATED BALANCE SHEET DATA As of September 30, 2008 (Unaudited, in thousands) Cash, cash equivalents and marketable investments (excluding restricted amounts of $45,353) $341,861 Total assets $766,680 Total liabilities & common stock subject to repurchase $348,094 Total stockholders' equity $418,586
SOURCE United Therapeutics Corporation
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