United Therapeutics Corporation
Feb 24, 2015

United Therapeutics Corporation Reports 2014 Fourth Quarter And Annual Financial Results

- Fourth Quarter Revenues of $346 million, Up 20% Year-over-year
- Total Annual Revenues of $1.3 billion, Up 15% Year-over-year
- Annual Net Income of $340 million or $6.28 per Diluted Share
- Annual Non-GAAP Earnings(1) of $591 million or $10.91 per Diluted Share

SILVER SPRING, Md. and RESEARCH TRIANGLE PARK, N.C., Feb. 24, 2015 /PRNewswire/ -- United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the fourth quarter and year ended December 31, 2014.

"Our overall revenues and profits grew significantly from 2013 to 2014, and we are pleased to see continued growth in the number of patients helped by each of our products," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Co-Chief Executive Officer.  "The fourth quarter was especially distinguished by Orenitram® exceeding 25% of Adcirca® sales and 17% of Tyvaso® sales, despite the fact that December was only the seventh month after Orenitram's launch, whereas the other products were launched in 2009.  This affirms our belief that Orenitram is on track to become our best-selling product."

Key financial highlights include (in thousands, except per share data):


Three Months Ended

December 31,


Year Ended
December 31,


2014


2013


2014


2013













Revenues

$

346,363



$

289,017



$

1,288,519



$

1,116,984


Net income (loss)

$

115,935



$

(30,314)



$

340,074



$

174,560


Non-GAAP earnings(1)

$

171,709



$

160,203



$

590,956



$

544,663


Net income (loss), per diluted share

$

2.17



$

(0.60)



$

6.28



$

3.28


Non-GAAP earnings, per diluted share(1)

$

3.21



$

2.88



$

10.91



$

10.23


________________________

(1)

See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.

Operating Results

Revenues

The table below summarizes the components of net revenues (in thousands):


Three Months Ended

December 31,


Year Ended
December 31,


2014


2013


2014


2013













Cardiopulmonary products:












Remodulin®

$

136,591



$

119,865



$

553,728



$

491,179


Tyvaso

115,070



114,385



463,067



438,793


Adcirca

73,546



52,047



221,471



176,972


 Orenitram

20,174





41,267




Other

982



2,720



8,986



10,040


     Total net revenues

$

346,363



$

289,017



$

1,288,519



$

1,116,984


Revenues for the quarter ended December 31, 2014 increased by $57.3 million, compared to the quarter ended December 31, 2013. The growth in revenues corresponded to the continued increase in the number of patients being treated with our cardiopulmonary products and the commencement of Orenitram sales in 2014.

Expenses

The table below summarizes research and development expense by major project and non-project components (in thousands):


Three Months Ended

December 31,


Year Ended
December 31,


2014


2013


2014


2013













Project and non-project component:












Cardiopulmonary

$

46,858



$

32,242



$

131,843



$

116,137


Share-based compensation expense

15,729



76,422



72,714



134,706


Other

8,895



12,888



37,992



48,505


     Total research and development expense

$

71,482



$

121,552



$

242,549



$

299,348


Cardiopulmonary. The increase in cardiopulmonary project expenses of $14.6 million for the quarter ended December 31, 2014, compared to the quarter ended December 31, 2013, resulted from an increase of $15.7 million in expenses related to our esuberaprost program, offset by a decrease of $2.8 million in expenses relating to our sustained-release, self-injectable product development program, which was terminated in 2014.

Share-based compensation. The $60.7 million decrease in share-based compensation expense for the quarter ended December 31, 2014 over the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to the 43 percent increase in the price of our common stock during the same quarter in 2013.

The table below summarizes selling, general and administrative expense by major categories (in thousands):


Three Months Ended
December 31,


Year Ended
December 31,


2014


2013


2014


2013













Category:












General and administrative

$

41,493



$

38,112



$

186,312



$

140,235


Sales and marketing

21,313



21,038



82,000



73,871


Share-based compensation expense

17,728



98,028



112,975



179,904


     Total selling, general and administrative expense

$

80,534



$

157,178



$

381,287



$

394,010


Share-based compensation. The $80.3 million decrease in share-based compensation expense for the quarter ended December 31, 2014 compared to the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to a 43 percent increase in the price of our common stock for the same period in 2013.

Cost of Product Sales

Cost of product sales for the quarter ended December 31, 2014 were $15.8 million, compared to $38.8 million for the quarter ended December 31, 2013.  The decrease of $23.0 million corresponded primarily to the expiration of our royalty obligation to GlaxoSmithKline PLC on sales of our treprostinil-based products.

Income Taxes

We recognized income tax expense of $58.8 million for the quarter ended December 31, 2014, compared to a $1.3 million tax benefit for the quarter ended December 31, 2013 that primarily resulted from our net loss for the quarter ended December 31, 2013.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income (loss), adjusted for the following charges, as applicable: (1) interest; (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):


Year Ended December 31,


Three Months Ended
December 31,


2014


2013


2012


2014


2013
















Net income (loss), as reported

$

340,074



$

174,560



$

304,442



$

115,935



$

(30,314)


Adjust for the following charges:















Interest expense

17,592



18,058



16,639



3,527



4,562


License fees

10,991







10,991




Depreciation and amortization

32,245



31,259



27,145



8,932



7,753


Impairment charges





4,839






Share-based compensation expense

190,054



320,786



30,115



32,324



178,202


Non-GAAP earnings

$

590,956



$

544,663



$

383,180



$

171,709



$

160,203

















Non-GAAP earnings per share:















Basic

$

12.27



$

10.88



$

7.36



$

3.62



$

3.19


Diluted

$

10.91



$

10.23



$

7.19



$

3.21



$

2.88

















Weighted average number of common shares outstanding:















  Basic

48,176



50,076



52,093



47,431



50,281


  Diluted

54,155



53,231



53,280



53,548



55,648

















Conference Call

We will host a half-hour teleconference on Tuesday, February 24, 2015, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533.  A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 73843546.

This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.

About United Therapeutics

United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions.

Non-GAAP Financial Information

This press release contains a financial measure, non-GAAP earnings, that does not comply with United States generally accepted accounting principles (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.

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, our expectation regarding Orenitram's potential to become our best-selling product.  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 February 24, 2015, 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.  [uthr-g]

Orenitram, Remodulin and Tyvaso are registered trademarks of United Therapeutics Corporation.

Adcirca is a registered trademark of Eli Lilly and Company.

 

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



Three Months Ended December 31,


Year Ended December 31,


2014


2013


2014


2013

Revenues:












Net product sales

$

345,381



$

286,297



$

1,279,533



$

1,106,944


Other

982



2,720



8,986



10,040


Total revenues

346,363



289,017



1,288,519



1,116,984


Operating expenses:












Research and development

71,482



121,552



242,549



299,348


Selling, general and administrative

80,534



157,178



381,287



394,010


Cost of product sales

15,771



38,778



125,883



131,127


Total operating expenses

167,787



317,508



749,719



824,485


     Operating income (loss)

178,576



(28,491)



538,800



292,499


Other (expense) income:












Interest expense

(3,527)



(4,562)



(17,592)



(18,058)


Other, net

(285)



1,423



3,972



4,462


Total other (expense) income, net

(3,812)



(3,139)



(13,620)



(13,596)


Income (loss) before income taxes

174,764



(31,630)



525,180



278,903


Income tax (expense) benefit

(58,829)



1,316



(185,106)



(104,343)


Net income (loss)

$

115,935



$

(30,314)



$

340,074



$

174,560


Net income (loss) per common share:












Basic

$

2.44



$

(0.60)



$

7.06



$

3.49


Diluted

$

2.17



$

(0.60)



$

6.28



$

3.28


Weighted average number of common shares outstanding:












Basic

47,431



50,281



48,176



50,076


Diluted

53,548



50,281



54,155



53,231


 

 

SELECTED CONSOLIDATED BALANCE SHEET DATA

(In billions)



December 31,


2014


2013

Cash, cash equivalents and marketable securities (excluding restricted amounts)

$

0.8



$

1.1


Total assets

1.9



2.1


Total liabilities and temporary equity

0.6



0.8


Total stockholders' equity

1.2



1.3


 

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SOURCE United Therapeutics Corporation

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