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 ======== ======= ======== ========
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 ----- ----- ------ ----- Total research and development expense $41,032 $179,751 $122,188 $239,181 ======= ======== ======== ========
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 ------ --- ------ ------ Total selling, general and administrative expense $56,577 $21,865 $176,338 $94,306 ======= ======= ======== =======
General and administrative. During the three months and year ended
-- An impairment charge of$4.2 million recognized during the three months endedDecember 31, 2009 , on three of ourSilver Spring, Maryland , properties that housed employees prior to relocating to our newly-completed combination office and laboratory building inSilver Spring . The old buildings are scheduled to be razed in 2010 in connection with commencement of construction on the last phase of ourSilver Spring campus;
-- Increases in professional fees of approximately$1.2 million and$4.2 million , for the three months and year endedDecember 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 endedDecember 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 endedDecember 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 ======== ======== ======= ======= ======= ======= Earnings before non-cash charges per share: Basic(4) $2.80 $2.63 $1.98 $1.48 $0.67 $0.53 ===== ===== ===== ===== ===== ===== Diluted(5) $2.66 $2.42 $1.87 $1.42 $0.62 $0.51 ===== ===== ===== ===== ===== ===== (1) Adjusted for the retrospective adoption of FASB ASC 470-20. (2) During the three months endedDecember 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 endedDecember 31, 2007 , we issued 400,000 shares of our common stock toToray 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 endedDecember 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 endedDecember 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
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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) ======= ======== ======= ======== Net (loss) income per common share:(2) Basic $(0.06) $(1.73) $0.37 $(1.08) ====== ====== ===== ====== Diluted $(0.06) $(1.73) $0.35 $(1.08) ====== ====== ===== ====== Weighted average number of common shares outstanding: (2) Basic 53,926 47,454 53,314 45,802 ====== ====== ====== ====== Diluted 53,926 47,454 56,133 45,802 ====== ====== ====== ====== (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 effectedSeptember 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.
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