United Therapeutics Corporation Reports 2015 Fourth Quarter And Annual Financial Results
"We are pleased with our 2015 top-line financial results as fourth-quarter revenues were
Key financial highlights include (in thousands, except per share data):
Three Months Ended |
Year Ended | |||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||
Revenues |
$ |
404,875 |
$ |
346,363 |
$ |
1,465,761 |
$ |
1,288,519 | ||||||
Net income |
$ |
104,644 |
$ |
115,935 |
$ |
651,639 |
$ |
340,074 | ||||||
Non-GAAP earnings(1) |
$ |
183,034 |
$ |
151,797 |
$ |
631,655 |
$ |
501,392 | ||||||
Net income, per diluted share |
$ |
2.10 |
$ |
2.17 |
$ |
12.72 |
$ |
6.28 | ||||||
Non-GAAP earnings, per diluted share(1) |
$ |
3.68 |
$ |
2.83 |
$ |
12.33 |
$ |
9.26 | ||||||
(1) See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below. |
Revenues
The table below summarizes the components of total revenues (dollars in thousands):
Three Months Ended |
Percentage |
Year Ended |
Percentage |
|||||||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||||||||
Net product sales: |
||||||||||||||||
Remodulin® |
$ |
140,482 |
$ |
136,591 |
3 |
% |
$ |
572,795 |
$ |
553,728 |
3 |
% | ||||
Tyvaso® |
119,130 |
115,070 |
4 |
% |
470,069 |
463,067 |
2 |
% | ||||||||
Adcirca® |
91,581 |
73,545 |
25 |
% |
278,829 |
221,471 |
26 |
% | ||||||||
Orenitram® |
37,289 |
20,175 |
85 |
% |
118,434 |
41,267 |
187 |
% | ||||||||
Unituxin® |
15,714 |
— |
NM |
(1) |
20,443 |
— |
NM |
(1) | ||||||||
Other |
679 |
982 |
(31) |
% |
5,191 |
8,986 |
(42) |
% | ||||||||
Total revenues |
$ |
404,875 |
$ |
346,363 |
17 |
% |
$ |
1,465,761 |
$ |
1,288,519 |
14 |
% | ||||
(1) Calculation is not meaningful. |
Revenues for the quarter ended
Revenues for the year 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 |
Year Ended |
Percentage |
|||||||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||||||||
Project and non-project: |
||||||||||||||||
Cardiopulmonary |
$ |
38,297 |
$ |
46,857 |
(18) |
% |
$ |
130,097 |
$ |
131,843 |
(1) |
% | ||||
Share-based compensation expense |
30,336 |
15,729 |
93 |
% |
87,713 |
72,714 |
21 |
% | ||||||||
Other |
7,315 |
8,896 |
(18) |
% |
27,288 |
37,992 |
(28) |
% | ||||||||
Total research and development expense |
$ |
75,948 |
$ |
71,482 |
6 |
% |
$ |
245,098 |
$ |
242,549 |
1 |
% |
Cardiopulmonary. The decrease in cardiopulmonary project expenses of
Share-based compensation. The increases of
Other. The decrease in other research and development expenses 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 |
Year Ended |
Percentage |
|||||||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||||||||
Category: |
||||||||||||||||
General and administrative |
$ |
42,801 |
$ |
41,493 |
3 |
% |
$ |
174,570 |
$ |
186,312 |
(6) |
% | ||||
Sales and marketing |
24,698 |
21,312 |
16 |
% |
94,297 |
82,000 |
15 |
% | ||||||||
Share-based compensation expense |
81,062 |
17,729 |
357 |
% |
183,745 |
112,975 |
63 |
% | ||||||||
Total selling, general and administrative expense |
$ |
148,561 |
$ |
80,534 |
84 |
% |
$ |
452,612 |
$ |
381,287 |
19 |
% |
General and administrative. The decrease in general and administrative expenses of
Sales and marketing. The increase in sales and marketing expenses of
Share-based compensation. The increases of
Cost of product sales. The table below summarizes cost of product sales by major categories (dollars in thousands):
Three Months Ended |
Percentage |
Year Ended |
Percentage |
|||||||||||||
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||||||||||
Category: |
||||||||||||||||
Cost of product sales |
$ |
19,339 |
$ |
16,904 |
14 |
% |
$ |
60,240 |
$ |
121,518 |
(50) |
% | ||||
Share-based compensation expense (benefit) |
5,970 |
(1,134) |
626 |
% |
8,796 |
4,365 |
102 |
% | ||||||||
Total cost of product sales |
$ |
25,309 |
$ |
15,770 |
60 |
% |
$ |
69,036 |
$ |
125,883 |
(45) |
% |
Cost of product sales. The decrease in cost of product sales of
Share-based compensation. The increases of
Gain on Sale of Intangible Asset
In
Income Taxes
The provision for income taxes was
The provision for income taxes was
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for the following charges, which are presented net of our 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). For 2015, we also adjusted non-GAAP earnings to eliminate the gain (net of our annual effective income tax rate) resulting from the sale of the PPRV in September 2015.
A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):
Three Months Ended |
Year Ended | ||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||
Net income, as reported |
$ |
104,644 |
$ |
115,935 |
$ |
651,639 |
$ |
340,074 | |||
Adjust for the following charges(1): |
|||||||||||
Interest expense |
340 |
2,268 |
2,949 |
11,312 | |||||||
License fees |
— |
7,067 |
— |
7,067 | |||||||
Depreciation and amortization |
4,958 |
5,743 |
20,502 |
20,734 | |||||||
Share-based compensation expense |
73,092 |
20,784 |
174,531 |
122,205 | |||||||
Gain on sale of intangible asset |
— |
— |
(217,966) |
— | |||||||
Non-GAAP earnings |
$ |
183,034 |
$ |
151,797 |
$ |
631,655 |
$ |
501,392 | |||
Non-GAAP earnings per share: |
|||||||||||
Basic |
$ |
4.01 |
$ |
3.20 |
$ |
13.73 |
$ |
10.41 | |||
Diluted |
$ |
3.68 |
$ |
2.83 |
$ |
12.33 |
$ |
9.26 | |||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
45,687 |
47,431 |
46,000 |
48,176 | |||||||
Diluted |
49,746 |
53,548 |
51,221 |
54,155 | |||||||
(1) Non-GAAP earnings adjustments are presented net of the impact of our actual effective income tax rates of approximately 38 percent and 35 percent for the quarters and years 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, which 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 sales growth of our products and our ability to continue to fund the development of products within our pipeline. 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
Orenitram, Remodulin, Tyvaso and Unituxin 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 December 31, |
Year Ended December 31, | ||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||
Revenues: |
|||||||||||
Net product sales |
$ |
404,196 |
$ |
345,381 |
$ |
1,460,570 |
$ |
1,279,533 | |||
Other |
679 |
982 |
5,191 |
8,986 | |||||||
Total revenues |
404,875 |
346,363 |
1,465,761 |
1,288,519 | |||||||
Operating expenses: |
|||||||||||
Research and development |
75,948 |
71,482 |
245,098 |
242,549 | |||||||
Selling, general and administrative |
148,561 |
80,534 |
452,612 |
381,287 | |||||||
Cost of product sales |
25,309 |
15,770 |
69,036 |
125,883 | |||||||
Total operating expenses |
249,818 |
167,786 |
766,746 |
749,719 | |||||||
Operating income |
155,057 |
178,577 |
699,015 |
538,800 | |||||||
Other (expense) income: |
|||||||||||
Interest expense |
(546) |
(3,527) |
(4,735) |
(17,592) | |||||||
Gain on sale of intangible asset |
— |
— |
350,000 |
— | |||||||
Other, net |
1,521 |
(286) |
157 |
3,972 | |||||||
Total other income (expense), net |
975 |
(3,813) |
345,422 |
(13,620) | |||||||
Income before income taxes |
156,032 |
174,764 |
1,044,437 |
525,180 | |||||||
Income tax expense |
(51,388) |
(58,829) |
(392,798) |
(185,106) | |||||||
Net income |
$ |
104,644 |
$ |
115,935 |
$ |
651,639 |
$ |
340,074 | |||
Net income per common share: |
|||||||||||
Basic |
$ |
2.29 |
$ |
2.44 |
$ |
14.17 |
$ |
7.06 | |||
Diluted |
$ |
2.10 |
$ |
2.17 |
$ |
12.72 |
$ |
6.28 | |||
Weighted average number of common shares outstanding: |
|||||||||||
Basic |
45,687 |
47,431 |
46,000 |
48,176 | |||||||
Diluted |
49,746 |
53,548 |
51,221 |
54,155 | |||||||
SELECTED CONSOLIDATED BALANCE SHEET DATA | |||||||||||
(In thousands) | |||||||||||
| |||||||||||
2015 |
2014 | ||||||||||
Cash, cash equivalents and marketable securities |
$ |
991,774 |
$ |
818,197 | |||||||
Total assets |
2,184,445 |
1,884,410 | |||||||||
Total liabilities and temporary equity |
595,893 |
642,054 | |||||||||
Total stockholders' equity |
1,588,552 |
1,242,356 |
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