United Therapeutics Corporation Reports 2009 Fourth Quarter and Annual Financial Results
"We are pleased that our revenues for 2009 grew in excess of 30% for the eighth consecutive year to
Total revenues for the three months ended
Earnings before non-cash charges, a non-GAAP financial measure, defined as net (loss) income before income taxes, non-cash interest, license fee expenses, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), for the three months ended
Results for the three months and year ended
Results
Revenues.Revenues for the year ended
The table below summarizes the components of revenues (in thousands):
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Remodulin $86,415 $73,137 $331,579 $269,718
Tyvaso 15,155 - 20,268 -
Adcirca 4,275 - 5,789 -
Telemedicine products and
services 2,795 2,370 10,968 9,485
Other products 283 355 1,244 2,294
--- --- ----- -----
Total revenues $108,923 $75,862 $369,848 $281,497
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Operating Expenses. Our operating expenses principally consist of research and development, selling, general and administrative, and costs of service and product sales.
The table below summarizes research and development expense by major project and non-project components (in thousands):
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Project and non-project:
Cardiovascular $22,906 $20,890 $61,575 $60,549
License fees - 150,000 - 150,000
Cancer 793 687 3,093 2,771
Infectious disease 1,126 725 4,106 1,556
Share-based compensation 11,129 4,918 36,294 16,200
Other 5,078 2,531 17,120 8,105
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Total research and
development expense $41,032 $179,751 $122,188 $239,181
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Cardiovascular license fees—Adcirca. Cardiovascular license fees for the year ended December 31, 2008, reflected the one-time, upfront payment to Lilly of
Share-based compensation. The increase in share-based compensation expense for both the three months and year ended
Other. The increase in other research and development expenses of approximately
The table below summarizes selling, general and administrative expense by major categories (in thousands):
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Category
General and administrative $28,894 $13,171 $68,606 $41,284
Sales and marketing 11,860 8,778 43,593 32,899
Share-based compensation 15,823 (84) 64,139 20,123
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Total selling, general and
administrative expense $56,577 $21,865 $176,338 $94,306
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General and administrative. During the three months and year ended
-- An impairment charge of $4.2 million recognized during the three months
ended December 31, 2009 , on three of our Silver Spring, Maryland ,
properties that housed employees prior to relocating to our
newly-completed combination office and laboratory building in Silver
Spring . The old buildings are scheduled to be razed in 2010 in
connection with commencement of construction on the last phase of our
Silver Spring campus;
-- Increases in professional fees of approximately $1.2 million and $4.2
million , for the three months and year ended December 31, 2009 ,
respectively, related to ongoing litigation, reviewing potential
acquisitions, entering new license agreements, and other matters;
-- $3.7 million of expenses during the three months ended December 31,
2009 , for validation work to manufacture Remodulin on different
equipment; and
-- An increase in general operating expenses of $3.4 million and $13.7
million for the three months and year ended December 31, 2009 ,
respectively, primarily resulting from the overall growth of the company
this year.
Sales and marketing. The increases in sales and marketing expenses for both the quarter and year ended
Share-based compensation. For the quarter ended
Income Tax Benefit. As a result of the net losses we incurred before income taxes, we recognized income tax benefits of
Earnings Before Non-Cash Charges
A reconciliation of net (loss) income to earnings before non-cash charges
is presented below (in thousands, except per share data):
Three Months Ended
Year Ended December 31, December 31,
------------------------------------ ----------------
2008(1) 2007(1) 2006(1) 2008(1)
As As As As
2009 adjusted adjusted adjusted 2009 adjusted
----- -------- -------- -------- ---- --------
Net (loss)
income,
as reported $19,462 $(49,327) $12,353 $72,596 $(3,330) $(82,070)
Add (subtract)
non-cash
charges:
Amortization of
debt discount
and issue
costs 12,875 11,439 14,281 2,417 3,659 2,530
Income tax
benefit, net
of taxes paid (695) (34,394) (9,431) (34,927) (1,403) (53,146)
License fee - 150,000(2) 11,013(3) - - 150,000
Depreciation and
amortization 11,394 4,955 3,427 2,713 4,721 1,810
Impairments 5,457 1,605 3,582 2,024 5,058 1,100
Share-based
compensation 100,810 36,393 48,766 23,513 27,502 4,852
------- ------ ------ ------ ------ -----
Earnings before
non-cash
charges $149,303 $120,671 $83,991 $68,336 $36,207 $25,076
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Earnings before
non-cash
charges per
share:
Basic(4) $2.80 $2.63 $1.98 $1.48 $0.67 $0.53
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Diluted(5) $2.66 $2.42 $1.87 $1.42 $0.62 $0.51
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(1) Adjusted for the retrospective adoption of FASB ASC 470-20.
(2) During the three months ended December 31, 2008 , we made a one-time
payment of $150.0 million to Lilly related to our license and
manufacturing and supply agreements. We also issued approximately 3.2
million shares of our common stock to Lilly for $150.0 million under a
related stock purchase agreement. Since there was no net impact on our
cash flows associated with these transactions, we have presented the
related up-front payment as an adjustment to net loss.
(3) During the year ended December 31, 2007 , we issued 400,000 shares of
our common stock to Toray Industries, Inc. The fair value of the
shares issued was expensed as research and development.
(4) Calculated by dividing earnings before non-cash charges presented
above by the weighted average number of shares outstanding for the
period.
(5) Calculated by dividing earnings before non-cash charges presented
above by the weighted average number of shares outstanding for the
period adjusted for potentially dilutive securities. For the quarter
and year ended December 31, 2009 , approximately 57.9 million shares
and 56.1 million shares, respectively, were used to calculate diluted
earnings before non-cash charges. For the quarter and year ended
December 31, 2008 , approximately 49.3 million shares and 49.9 million
shares, respectively, were used to calculate diluted earnings before
non-cash charges.
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 that does not comply with
We use earnings before taxes and non-cash charges, a non-GAAP financial measure:
(a) as measurements of operating performance because it assists us in comparing our operating performance on a consistent basis by excluding the impact of expenses not directly resulting from our core operations; (b) for planning purposes, including the preparation of our internal annual operating budget; (c) to allocate resources to enhance the financial performance of our business; (d) to evaluate the effectiveness of our operational strategies; and (e) to evaluate our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure enhances investors' understanding of our performance by excluding certain expenses that may not be indicative of our core operating measures. In addition, because we have historically reported earnings before non-cash charges to investors, we believe the inclusion of this non-GAAP financial measure provides consistency in our financial reporting. 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. A reconciliation of earnings before non-cash charges to net income, the most directly comparable GAAP financial measure, can be found in the table above under Earnings Before Non-Cash Charges.
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 expectations and intentions related to financial performance and results, including annual revenue growth and our expectations about continued growth of Remodulin and Tyvaso and Adcirca's potential to reach more patients. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the
Remodulin and Tyvaso are registered trademarks of
Adcirca is a registered trademark of
UNITED THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended For the Years Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
As As
Adjusted Adjusted
(1) (1)
Revenues:
Net product
sales $105,945 $73,206 $357,870 $270,005
Service sales 2,697 2,314 10,751 9,258
License fees 281 342 1,227 2,234
--- --- ----- -----
Total revenues 108,923 75,862 369,848 281,497
Operating
expenses:
Research and
development 41,032 179,751 122,188 239,181
Selling,
general and
administrative 56,577 21,865 176,338 94,306
Cost of product
sales 12,233 7,267 40,890 26,957
Cost of service
sales 1,263 839 4,431 3,109
----- --- ----- -----
Total operating
expenses 111,105 209,722 343,847 363,553
(Loss) income
from
operations (2,182) (133,860) 26,001 (82,056)
Other income
(expense):
Interest income 1,005 2,302 5,146 11,025
Interest
expense (3,659) (2,530) (12,875) (11,439)
Equity loss in
affiliate (42) (71) (141) (226)
Other, net 145 (1,057) 636 (1,025)
--- ------ --- ------
Total other
(expense)
income, net (2,551) (1,356) (7,234) (1,665)
(Loss) income
before income
tax benefit (4,733) (135,216) 18,767 (83,721)
Income tax
benefit 1,403 53,146 695 34,394
----- ------ --- ------
Net (loss)
income $(3,330) $(82,070) $19,462 $(49,327)
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Net (loss)
income per
common share:(2)
Basic $(0.06) $(1.73) $0.37 $(1.08)
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Diluted $(0.06) $(1.73) $0.35 $(1.08)
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Weighted
average number
of common
shares
outstanding: (2)
Basic 53,926 47,454 53,314 45,802
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Diluted 53,926 47,454 56,133 45,802
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(1) Adjusted for the retrospective adoption of FASB ASC 470-20.
(2) All share and per share data have been adjusted from previously
reported amounts to reflect the two-for-one stock split effected
September 22, 2009 .
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
December 31,
------------
2009 2008(1)
---- -------
Cash, cash equivalents and marketable
securities
(excluding restricted amounts of $39,976 and
$45,755, respectively) $378,120 $336,318
Total assets 1,051,544 874,534
Total liabilities and common stock subject to
repurchase 398,535 319,200
Total stockholders' equity 653,009 555,334
(1) Adjusted for the retrospective adoption of FASB ASC 470-20.
SOURCE