United Therapeutics Corporation Reports Third Quarter 2016 Financial Results
"Our financial performance continues its strength this quarter," said
Key financial highlights include (dollars in millions, except per share data):
Three Months Ended |
Percentage |
||||||||
2016 |
2015 |
Changes |
|||||||
Revenues |
$ |
408.2 |
$ |
386.2 |
5.7% |
||||
Net income |
$ |
161.8 |
$ |
464.4 |
(65.2)% |
||||
Non-GAAP earnings(1) |
$ |
201.5 |
$ |
174.7 |
15.3% |
||||
Net income, per diluted share |
$ |
3.50 |
$ |
9.24 |
(62.1)% |
||||
Non-GAAP earnings, per diluted share(1) |
$ |
4.36 |
$ |
3.48 |
25.3% |
____________________
(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 total revenues (dollars in millions):
Three Months Ended |
Percentage |
||||||||
2016 |
2015 |
Change |
|||||||
Net product sales: |
|||||||||
Remodulin® |
$ |
152.4 |
$ |
150.1 |
1.5% |
||||
Tyvaso® |
101.8 |
121.7 |
(16.4)% |
||||||
Adcirca® |
96.0 |
73.8 |
30.1% |
||||||
Orenitram® |
40.7 |
34.4 |
18.3% |
||||||
Unituxin® |
17.3 |
4.7 |
268.1% |
||||||
Other |
— |
1.5 |
(100.0)% |
||||||
Total revenues |
$ |
408.2 |
$ |
386.2 |
5.7% |
Revenues for the three months ended
Expenses
Cost of product sales. The table below summarizes cost of product sales by major categories (dollars in millions):
Three Months Ended |
Percentage |
||||||||
2016 |
2015 |
Change |
|||||||
Category: |
|||||||||
Cost of product sales |
$ |
20.0 |
$ |
15.0 |
33.3% |
||||
Share-based compensation expense (benefit) |
3.6 |
(8.1) |
144.4% |
||||||
Total cost of product sales |
$ |
23.6 |
$ |
6.9 |
242.0% |
Cost of product sales. The increase in cost of product sales of
Share-based compensation. The increase in share-based compensation of
Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):
Three Months Ended |
Percentage |
||||||||
2016 |
2015 |
Change |
|||||||
Category: |
|||||||||
Research and development expense |
$ |
37.2 |
$ |
40.6 |
(8.4)% |
||||
Share-based compensation expense (benefit) |
8.7 |
(31.0) |
128.1% |
||||||
Total research and development expense |
$ |
45.9 |
$ |
9.6 |
378.1% |
Share-based compensation. 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 millions):
Three Months Ended |
Percentage |
||||||||
2016 |
2015 |
Change |
|||||||
Category: |
|||||||||
General and administrative |
$ |
42.4 |
$ |
41.0 |
3.4% |
||||
Sales and marketing |
20.1 |
21.5 |
(6.5)% |
||||||
Share-based compensation expense (benefit) |
37.6 |
(79.8) |
147.1% |
||||||
Total selling, general and administrative expense |
$ |
100.1 |
$ |
(17.3) |
678.6% |
Share-based compensation. The increase in share-based compensation of
Gain on Sale of Intangible Asset
In
Income Tax Expense
Our 2016 effective income tax rate decreased as compared to 2015 primarily due to a decrease in non-deductible share-based compensation, which was driven largely by a decrease in our stock price during 2016 compared to 2015.
Share Repurchases
In the third quarter of 2016, we repurchased approximately 1.1 million shares of our common stock at an aggregate cost of $135.8 million. These purchases were made pursuant to our
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for: (1) interest expense; (2) license fees; (3) depreciation and amortization; (4) impairment charges; (5) share-based compensation expense (benefit), net (including expenses relating to stock options, share tracking awards, restricted stock units and our employee stock purchase plan); and (6) tax impact on non-GAAP earnings adjustments. For 2015, we also adjusted non-GAAP earnings to eliminate the gain resulting from the sale of the PPRV in
A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):
Three Months Ended |
|||||||
2016 |
2015 |
||||||
Net income, as reported |
$ |
161.8 |
$ |
464.4 |
|||
Adjusted for: |
|||||||
Interest expense |
0.5 |
0.8 |
|||||
Depreciation and amortization |
8.2 |
8.2 |
|||||
Share-based compensation expense, net |
49.9 |
(118.9) |
|||||
Gain on sale of intangible asset |
— |
(350.0) |
|||||
Tax (benefit) expense(1) |
(18.9) |
170.2 |
|||||
Non-GAAP earnings |
$ |
201.5 |
$ |
174.7 |
|||
Non-GAAP earnings per share: |
|||||||
Basic |
$ |
4.66 |
$ |
3.84 |
|||
Diluted |
$ |
4.36 |
$ |
3.48 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
43.2 |
45.5 |
|||||
Diluted |
46.2 |
50.2 |
______________________
(1) |
Represents the total tax impact of the quarterly non-GAAP earnings adjustments based on our actual quarterly effective income tax rates of approximately 32 percent and approximately 37 percent as of |
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, the calculation of our non-GAAP financial measure may differ from the methodology used by other companies. The presentation of our 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 our growth potential, our expectations regarding receipt of
Orenitram, Remodulin, Tyvaso and Unituxin are registered trademarks of
Adcirca is a registered trademark of Eli Lilly and Company.
| |||||||
Three Months Ended |
|||||||
2016 |
2015 |
||||||
(Unaudited) |
|||||||
Revenues: |
|||||||
Net product sales |
$ |
408.2 |
$ |
384.7 |
|||
Other |
— |
1.5 |
|||||
Total revenues |
408.2 |
386.2 |
|||||
Operating expenses: |
|||||||
Cost of product sales |
23.6 |
6.9 |
|||||
Research and development |
45.9 |
9.6 |
|||||
Selling, general and administrative |
100.1 |
(17.3) |
|||||
Total operating expenses |
169.6 |
(0.8) |
|||||
Operating income |
238.6 |
387.0 |
|||||
Other income (expense): |
|||||||
Interest expense |
(0.5) |
(0.8) |
|||||
Gain on sale of intangible asset |
— |
350.0 |
|||||
Other, net |
1.0 |
0.6 |
|||||
Total other income, net |
0.5 |
349.8 |
|||||
Income before income taxes |
239.1 |
736.8 |
|||||
Income tax expense |
(77.3) |
(272.4) |
|||||
Net income |
$ |
161.8 |
$ |
464.4 |
|||
Net income per common share: |
|||||||
Basic |
$ |
3.75 |
$ |
10.20 |
|||
Diluted |
$ |
3.50 |
$ |
9.24 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
43.2 |
45.5 |
|||||
Diluted |
46.2 |
50.2 |
SELECTED CONSOLIDATED BALANCE SHEET DATA | ||||
|
||||
Cash, cash equivalents and marketable securities |
$ |
1,034.9 |
||
Total assets |
2,269.2 |
|||
Total liabilities and temporary equity |
430.5 |
|||
Total stockholders' equity |
1,838.7 |
|||
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