United Therapeutics Corporation Reports 2010 Fourth Quarter and Annual Financial Results
"We finished 2010 with solid operating results led by the growth in our revenues," remarked
Total revenues for the three months ended
(1) See definition of earnings before non-cash charges, a non-GAAP financial measure, and a reconciliation of net income to earnings before non-cash charges below.
Results
Revenues. Revenues for the quarter ended
The table below summarizes the components of revenues (in thousands):
Three Months Ended Year Ended
December 31, December 31,
2010 2009 2010 2009
Cardiopulmonary products:
Remodulin $ 101,879 $ 86,415 $ 403,599 $ 331,579
Tyvaso 48,714 15,155 151,797 20,268
Adcirca 12,804 4,275 36,307 5,789
Telemedicine products and
services 2,787 2,795 10,932 10,968
License fees 293 283 1,196 1,244
Total revenues $ 166,477 $ 108,923 $ 603,831 $ 369,848 Operating Expenses. Our operating expenses 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,
2010 2009 2010 2009
Project and non-project:
Cardiopulmonary $ 31,908 $ 22,906 $ 86,161 $ 61,574
Share-based compensation 19,774 11,129 45,878 36,294
Other 10,573 6,997 34,722 24,320
Total research and development
expense $ 62,255 $ 41,032 $ 166,761 $ 122,188 Cardiopulmonary. The increase in cardiopulmonary project expenses of
Share-based compensation. The increase in share-based compensation expense of
Other. Other research and development expenses increased
The table below summarizes selling, general and administrative expense by major categories (in thousands):
Three Months Ended Year Ended
December 31, December 31,
2010 2009 2010 2009
Category
General and administrative $ 28,302 $ 28,894 $ 83,077 $ 68,606
Sales and marketing 14,147 11,860 49,332 43,593
Share-based compensation 32,549 15,823 67,191 64,139
Total selling, general and
administrative expense $ 74,998 $ 56,577 $ 199,600 $ 176,338 Sales and marketing. The increase in sales and marketing expenses of
Share-based compensation. For the quarter ended
Income Tax Benefit. We recognized income tax benefits of
Earnings Before Non-Cash Charges
Earnings before non-cash charges is defined as net income, adjusted for the following non-cash charges, as applicable: (1) interest; (2) income taxes; (3) license fees; (4) depreciation and amortization; (5) impairment charges; and (6) share-based compensation (stock option and share tracking award expense).
A reconciliation of net income (loss) to earnings before non-cash charges is presented below (in thousands, except per share data):
Three Months Ended
Year Ended December 31, December 31,
2010 2009 2008 2007 2010 2009
Net (loss)
income, as
reported $ 105,916 $ 19,462 $ (49,327) $ 12,353 $ 9,544 $ (3,330)
Add
(subtract)
non-cash
charges:
Interest
expense 19,714 12,875 11,439 14,281 5,459 3,659
Income tax
expense
(benefit) 41,923 (695) (34,394) (7,876) (5,039) (1,403)
License fees — — 150,000 (1) 11,013 (2) — —
Depreciation
and
amortization 17,920 11,394 4,536 3,427 3,739 4,721
Impairment
charges 6,177 5,457 1,605 3,582 6,177 5,058
Share-based
compensation 113,636 100,810 36,393 48,766 52,558 27,502
Earnings
before
non-cash
charges $ 305,286 $ 149,303 $ 120,252 $ 85,546 $ 72,438 $ 36,207
Earnings
before
non-cash
charges per
share:
Basic $ 5.44 $ 2.80 $ 2.63 $ 1.98 $ 1.27 $ 0.67
Diluted $ 5.13 $ 2.66 $ 2.41 $ 1.87 $ 1.17 $ 0.62
Weighted
average
number of
common
shares
outstanding:
Basic 56,142 53,314 45,802 42,448 57,187 53,926
Diluted 59,516 56,133 49,900 44,902 61,715 57,944
(1) During the three months ended December 31, 2008 , we made an upfront payment of $150.0
million to Eli Lilly and Company (Lilly) as required by our license and manufacturing and
supply agreements. We also issued approximately 6.3 million shares of our common stock to
Lilly in exchange for $150.0 million under a stock purchase agreement entered into
together with the license and manufacturing and supply agreements. Because 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.
(2) 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.
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 non-cash charges to assist us in: (a) planning, including the preparation of our internal annual operating budget; (b) allocating resources to enhance the financial performance of our business; (c) evaluating the effectiveness of our operational strategies; and (d) evaluating 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 we do not consider when evaluating and comparing the performance of our core operations and making operating decisions. In addition, we have historically reported earnings before non-cash charges to investors, and believe the inclusion of this non-GAAP financial measure provides investors with a consistent method of comparison to historical periods. However, there are limitations in the use of this non-GAAP financial measure as it excludes certain operating expenses that are recurring in nature. Furthermore, 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 to 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 earnings before non-cash charges can be found in the table above under the heading, 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 about operating results and demand for our products, and our expected timing of enrollment and unblinding of our FREEDOM-M and FREEDOM-C2 clinical trials. 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 Eli Lilly and Company.
UNITED THERAPEUTICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Year Ended December 31, December 31, 2010 2009 2010 2009 Revenues: Net product sales$ 163,445 $ 105,945 $ 591,881 $ 357,870 Service sales 2,738 2,697 10,753 10,751 License fees 294 281 1,197 1,227 Total revenues 166,477 108,923 603,831 369,848 Operating expenses: Research and development 62,255 41,032 166,761 122,188 Selling, general and administrative 74,998 56,577 199,600 176,338 Cost of product sales 18,536 12,233 67,716 40,890 Cost of service sales 1,637 1,263 5,749 4,431 Total operating expenses 157,426 111,105 439,826 343,847 (Loss) income from operations 9,051 (2,182) 164,005 26,001 Other income (expense): Interest income 629 1,005 2,939 5,146 Interest expense (5,459) (3,659) (19,714) (12,875) Equity loss in affiliate (30) (42) (160) (141) Other, net 314 145 769 636 Total other (expense) income, net (4,546) (2,551) (16,166) (7,234) Income (loss) before income tax 4,505 (4,733) 147,839 18,767 Income tax benefit (expense) 5,039 1,403 (41,923) 695 Net income (loss)$ 9,544 $ (3,330) $ 105,916 $ 19,462 Net income (loss) per common share: Basic$ 0.17 $ (0.06) $ 1.89 $ 0.37 Diluted$ 0.15 $ (0.06) $ 1.78 $ 0.35 Weighted average number of common shares outstanding: Basic 57,187 53,926 56,142 53,314 Diluted 61,715 53,926 59,516 56,133
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
December 31,
2010 2009
Cash, cash equivalents and marketable securities
(excluding restricted amounts of $5,122 and $39,976 ,
respectively) $ 759,932 $ 378,120
Total assets 1,431,635 1,051,544
Total liabilities and common stock subject to repurchase 547,749 398,535
Total stockholders' equity 883,886 653,009
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