United Therapeutics Reports First Quarter 2010 Financial Results
Total revenues for the first quarter of 2010 were
"We begin this year impressively, with continued strong growth in revenues and operating results, which are primarily due to increased use of Remodulin and Tyvaso," said
Financial Results for the Three Months Ended
Revenues
The following table sets forth the components of net revenues (in thousands):
Three Months Ended
March 31,
2010 2009 % Change
Cardiovascular products:
Remodulin $95,769 $76,810 24.7%
Tyvaso 24,884 - 100.0%
Adcirca 4,979 - 100.0%
Telemedicine services and products 2,966 2,570 15.4%
Other 282 350 (19.4%)
Total net revenues $128,880 $79,730 61.6%
The growth in revenues for the three months ended
Research and Development Expense
The table below summarizes research and development expense by major project and non-project component (dollars in thousands):
Three Months Ended
March 31,
Percentage
2010 2009 Change
Project and non-project component:
Cardiovascular $17,400 $11,418 52.4%
Share-based compensation 10,536 4,656 126.3%
Other 6,935 4,885 42.0%
Total research and development expense $34,871 $20,959 66.4%
Cardiovascular. The increase in cardiovascular program expenses relates to our amended FREEDOM-M and FREEDOM-C2 clinical trials and to our development of beraprost-MR.
Share-based compensation. The increase in share-based compensation reflects the increase in compensation expense recognized in connection with outstanding awards granted under our Share Tracking Awards Plan (STAP), primarily as a result of the increase in the price of our common stock over the three months ended
Selling, General and Administrative Expense
The table below summarizes selling, general and administrative expense by major category (dollars in thousands):
Three Months Ended
March 31,
Percentage
2010 2009 Change
Category:
General and administrative $ 17,113 $ 11,383 50.3%
Sales and marketing 10,293 8,459 21.7%
Share-based compensation 19,471 9,376 107.7%
Total selling, general and administrative
expense $ 46,877 $ 29,218 60.4%
General and administrative. The increase in general and administrative expenses reflects: (i) an increase in operating-related expenses due to the growth of our business; (ii) an increase in depreciation expense incurred in connection with our recently-constructed facilities in
Sales and marketing. The increase in sales and marketing expenses corresponds primarily to expenses incurred related to marketing our new products, Tyvaso and Adcirca.
Share-based compensation. The increase in share-based compensation expense is attributable to increases in expenses recognized in connection with outstanding awards granted under our STAP and a potential year-end stock option grant to our Chief Executive Officer, which is based on a formula set forth in her employment agreement, both reflecting the increase in the price of our common stock over the three months ended
Earnings before Non-Cash Charges
The following table provides a reconciliation of net income to earnings before non-cash charges for each of the three-month periods ended
Three Months Ended
March 31,
2010 2009
Net income, as reported $18,929 $13,197
Add non-cash charges:
Interest 4,687 2,637
Depreciation and amortization 4,571 1,765
Income tax expense 9,752 6,799
Impairment charges - -
Share-based compensation 30,126 14,055
Earnings before non-cash charges $68,065 $38,453
Earnings before non-cash charges per share(1):
Basic $1.24 $0.73
Diluted $1.13 $0.71
(1) Calculated by dividing earnings before non-cash charges by the basic
and diluted weighted average number of common shares outstanding, as
reported below in our Consolidated Statements of Operations.
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 (Earnings before Non-Cash Charges) that does not comply with
We use earnings before non-cash charges, a non-GAAP financial measure: (a) as a measure of operating performance because it assists us in comparing our operating performance on a consistent basis by excluding the impact of expenses not directly related to 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 financial results by excluding certain expenses that may not be indicative of our core operating performance. In addition, we have historically reported earnings before non-cash charges to investors, and 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 of continued revenue growth, financial performance and operating results. 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 March 31, 2010 2009 (Unaudited) Revenues: Net product sales $125,675 $76,858 Service sales 2,923 2,530 License fees 282 342 Total revenues 128,880 79,730 Operating expenses: Research and development 34, 871 20,959 Selling, general and administrative 46, 877 29,218 Cost of product sales 13,736 8,066 Cost of service sales 1,150 920 Total operating expenses 96,634 59,163 Income from operations 32, 246 20,567 Other income (expense): Interest income 944 1,721 Interest expense (4,687) (2,637) Equity loss in affiliate (47) (19) Other, net 225 364 Total other income (expense), net (3,565) (571) Income before income tax 28,681 19,996 Income tax expense (9,752) (6,799) Net income $18,929 $13,197 Net income per common share: Basic $0.35 $0.25 Diluted $0.32 $0.24 Weighted average number of common shares outstanding: Basic 54,769 52,880 Diluted 60,019 54,304
CONSOLIDATED BALANCE SHEET DATAMarch 31, 2010 (unaudited, in thousands) Cash, cash equivalents and marketable securities (excluding restricted amounts of$40,102 )$ 454,028 Total assets$ 1,126,703 Total liabilities and common stock subject to repurchase$ 398,455 Total stockholders' equity$ 728,248
SOURCE
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