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8-K - 8-K - UNITED THERAPEUTICS Corpa11-21733_18k.htm

Exhibit 99.1

 

For Immediate Release

Contact: Andrew Fisher

(202) 483-7000

Afisher@unither.com

 

UNITED THERAPEUTICS CORPORATION REPORTS

SECOND QUARTER 2011 FINANCIAL RESULTS

 

·                  Total Revenues of $183.8 million

 

·                  Earnings per Share of $1.27 per Basic Share or $1.18 per Diluted Share

 

·                  Earnings Before Non-Cash Charges of $1.61 per Basic Share, or $1.49 per Diluted Share

 

Silver Spring, MD, July 28, 2011: United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the quarter ended June 30, 2011.

 

“I’m pleased with the successful unblinding of the FREEDOM-M study this quarter, as well as the very good operating results we achieved,” remarked Martine Rothblatt, Ph.D., United Therapeutics’ Chairman and Chief Executive Officer. “We remain on track to reach our 2011 forecast for revenues of $750 million, with a plus/minus margin of 5 percent.”

 

Total revenues for the quarter ended June 30, 2011 were $183.8 million, up from $134.7 million for the quarter ended June 30, 2010.  Net income for the quarter ended June 30, 2011, was $73.9 million, or $1.27 per basic share, compared to $37.7 million, or $0.67 per basic share, for the same quarter in 2010. Gross margin from sales was $162.4 million for the quarter ended June 30, 2011, compared to $119.2 million for the same quarter last year. Earnings before non-cash charges(1) for the quarter ended June 30, 2011 were $93.5 million, compared to $65.7 million for the quarter ended June 30, 2010.

 

Results for the three- and six-month periods ended June 30, 2011 and June 30, 2010 do not include the results of Medicomp, Inc., our former telemedicine subsidiary, which we sold during the first quarter of 2011. The results of Medicomp, Inc. have been reported within discontinued operations on our consolidated statements of operations below.

 


(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.

 



 

Financial Results for the Three Months Ended June 30, 2011

 

Revenues

 

The table below summarizes the components of net revenues (dollars in thousands):

 

 

 

Three Months Ended
June 30,

 

Percentage

 

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

Cardiopulmonary products:

 

 

 

 

 

 

 

Remodulin

 

$

104,894

 

$

96,367

 

8.8

%

Tyvaso

 

61,809

 

29,483

 

109.6

%

Adcirca

 

16,843

 

8,589

 

96.1

%

Other

 

205

 

282

 

(27.3

)%

Total net revenues

 

$

183,751

 

$

134,721

 

36.4

%

 

Revenues for the quarter ended June 30, 2011 increased by $49.0 million, compared to the quarter ended June 30, 2010. The growth in revenues primarily reflects the increase in the number of patients being prescribed our products.

 

Expenses

 

The table below summarizes research and development expense by major project and non-project components (dollars in thousands):

 

 

 

Three Months Ended
June 30,

 

Percentage

 

 

 

2011

 

2010

 

Change

 

 

 

 

 

 

 

 

 

Project and non-project component:

 

 

 

 

 

 

 

Cardiopulmonary

 

$

24,490

 

$

18,619

 

31.5

%

Share-based compensation

 

(9,555

)

1,420

 

(772.9

)%

Other

 

9,305

 

8,548

 

8.9

%

Total research and development expense

 

$

24,240

 

$

28,587

 

(15.2

)%

 

Cardiopulmonary. The increase in expenses related to our cardiopulmonary projects for the quarter ended June 30, 2011 was attributable largely to increases in expenses related to our FREEDOM-C2 and FREEDOM-M clinical trials and our development of beraprost-MR.

 

Share-based compensation.  The decrease in share-based compensation for the quarter ended June 30, 2011, compared to the same quarter in 2010, corresponded to a reduction in share-based compensation recognized in connection with our share tracking awards plans as a result of the decrease in our stock price.

 



 

The table below summarizes selling, general and administrative expense by major categories (in thousands):

 

 

 

Three Months Ended
June 30,

 

Percentage

 

 

 

2011

 

2010

 

Change

 

Category:

 

 

 

 

 

 

 

General and administrative

 

$

24,268

 

$

18,754

 

29.4

%

Sales and marketing

 

17,072

 

12,900

 

32.3

%

Share-based compensation

 

(17,484

)

(2,000

)

(774.2

)%

Total selling, general and administrative expense

 

$

23,856

 

$

29,654

 

(19.6

)%

 

General and administrative. The increase in general and administrative expenses for the quarter ended June 30, 2011, compared to the same quarter in 2010, corresponded principally to increases in professional fees in connection with various completed and prospective transactions, and travel expenses, as a result of our growth and increase in business development activities.

 

Sales and marketing. The increase in sales and marketing expenses for the quarter ended June 30, 2011, compared to the quarter ended June 30, 2010, was attributable to an increase in salaries, as we recently expanded our sales force, and an increase in professional fees in connection with our marketing and advertising initiatives.

 

Share-based compensation. The decrease in share-based compensation for the quarter ended June 30, 2011, compared to the same quarter in 2010, reflects a reduction in share-based compensation recognized in connection with our share tracking awards plans as a result of the decrease in our stock price.

 

2011 Revenue Guidance

 

We reaffirm our full-year revenue guidance for our three commercial products (Remodulin, Tyvaso and Adcirca), and we continue to expect related revenues to fall within a range of 5% above or below $750 million for 2011.

 



 

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 to earnings before non-cash charges is presented below (in thousands, except per share data):

 

 

 

Three Months Ended
June 30,

 

 

 

2011

 

2010

 

 

 

 

 

 

 

Net income, as reported

 

$

73,891

 

$

37,707

 

Adjust for non-cash charges:

 

 

 

 

 

Interest expense

 

5,431

 

4,759

 

Income tax expense

 

35,723

 

19,212

 

License fees

 

 

 

Depreciation and amortization

 

4,837

 

4,582

 

Impairment charges

 

609

 

 

Share-based compensation

 

(27,037

)

(574

)

Earnings before non-cash charges

 

$

93,454

 

$

65,686

 

 

 

 

 

 

 

Earnings before non-cash charges per share:

 

 

 

 

 

Basic

 

$

1.61

 

$

1.17

 

Diluted

 

$

1.49

 

$

1.09

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

 

58,180

 

56,047

 

Diluted

 

62,756

 

60,393

 

 



 

Conference Call

 

We will host a half-hour teleconference on Thursday, July 28, 2011, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-800-642-1687, with international callers dialing 1-706-645-9291 and using access code 80689472.

 

This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.

 

About United Therapeutics

 

United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening conditions.

 

Non-GAAP Financial Information

 

This press release contains a financial measure, earnings before non-cash charges, that does not comply with United States generally accepted accounting principles (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.

 

We use earnings before non-cash charges to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) 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 in that it excludes certain operating expenses that are recurring in nature. In addition, 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 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 future operating results and the demand for our products, including our guidance for annual revenues. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.  We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of July 28, 2011, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason. [uthr-g]

 

Remodulin and Tyvaso are registered trademarks of United Therapeutics Corporation.

 

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
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(Unaudited)

 

(Unaudited)

 

Revenues:

 

 

 

 

 

 

 

 

 

Net product sales

 

$

183,546

 

$

134,439

 

$

345,764

 

$

260,071

 

License fees

 

205

 

282

 

499

 

564

 

Total revenues

 

183,751

 

134,721

 

346,263

 

260,635

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

24,240

 

28,587

 

71,947

 

63,055

 

Selling, general and administrative

 

23,856

 

29,654

 

82,118

 

75,106

 

Cost of product sales

 

21,162

 

15,261

 

40,900

 

28,984

 

Total operating expenses

 

69,258

 

73,502

 

194,965

 

167,145

 

Operating income

 

114,493

 

61,219

 

151,298

 

93,490

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

Interest income

 

839

 

802

 

1,504

 

1,746

 

Interest expense

 

(5,431

)

(4,759

)

(10,841

)

(9,446

)

Equity loss in affiliate

 

(30

)

(44

)

(67

)

(91

)

Other, net

 

(257

)

93

 

(1,023

)

318

 

Total other (expense) income, net

 

(4,879

)

(3,908

)

(10,427

)

(7,473

)

Income from continuing operations before income taxes

 

109,614

 

57,311

 

140,871

 

86,017

 

Income tax expense

 

(35,723

)

(19,345

)

(47,622

)

(29,106

)

Income from continuing operations

 

73,891

 

37,966

 

93,249

 

56,911

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

(Loss) income from discontinued operations, net of tax

 

 

(259

)

76

 

(275

)

Loss on disposal of discontinued operations, net of tax

 

 

 

(3,044

)

 

Loss from discontinued operations

 

 

(259

)

(2,968

)

(275

)

Net income

 

$

73,891

 

$

37,707

 

$

90,281

 

$

56,636

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.27

 

$

0.68

 

$

1.61

 

$

1.03

 

Discontinued operations

 

$

0.00

 

$

(0.01

)

$

(0.05

)

$

(0.01

)

Net income per basic common share

 

$

1.27

 

$

0.67

 

$

1.56

 

$

1.02

 

Diluted

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.18

 

$

0.63

 

$

1.49

 

$

0.96

 

Discontinued operations

 

$

0.00

 

$

(0.01

)

$

(0.05

)

$

(0.01

)

Net income per diluted common share

 

$

1.18

 

$

0.62

 

$

1.44

 

$

0.95

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

58,180

 

56,047

 

57,968

 

55,411

 

Diluted

 

62,756

 

60,393

 

62,525

 

59,548

 

 



 

SELECTED CONSOLIDATED BALANCE SHEET DATA

June 30, 2011

(Unaudited, In thousands)

 

Cash, cash equivalents and marketable securities (excluding restricted amounts of $5.1 million)

 

$

 887,417

 

Total assets

 

1,578,740

 

Total liabilities and common stock subject to repurchase

 

576,397

 

Total stockholders’ equity

 

1,002,343