Press Release
United Therapeutics Reports Third Quarter 2008 Financial Results
- Revenues of $75.0 Million, Increase of 27% over Third Quarter 2007
- EPS of $0.55 per Basic Share, or $0.50 per Diluted Share, Decreases of 21% and 24% over Third Quarter 2007, respectively
- Earnings Before Non-Cash Charges of $37.8 million, Increase of 39% over Third Quarter 2007
SILVER SPRING, Md., Oct. 30 /PRNewswire-FirstCall/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended September 30, 2008. Total revenues for the third quarter of 2008 were $75.0 million, up from $59.0 million for the third quarter of 2007. Net income for the third quarter of 2008 was $12.6 million, or $0.55 per basic share, compared to $14.8 million, or $0.70 per basic share, for the third quarter of 2007. Gross margins from sales were $66.7 million for the third quarter of 2008, compared to $52.2 million for the third quarter of 2007. The increases in revenues and gross margins corresponded to the continued growth in sales of our lead product, Remodulin. Earnings before non-cash charges, defined as net income before non-cash income taxes, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $37.8 million for the third quarter of 2008, up 39% from $27.3 million for the third quarter of 2007.
"I am enthused about being on track for a $300 million per year revenue run rate based on this quarter's results," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "We are also energized by the great opportunity of bringing prostacyclin therapy to the thousands of additional patients who need it."
Research and Development Expenses
The table below summarizes research and development expenses by major project and non-project components (dollars in thousands):
Three Months Ended
September 30,
2008 2007 Percentage
Change
Project and non-project:
Cardiovascular $11,678 $11,761 (0.7)%
Cancer 984 3,408 (71.1)%
Infectious disease 347 202 71.8%
Share-based compensation 4,701 3,148 49.3%
Other 1,503 1,040 44.5%
Total research and
development expenses $19,213 $19,559 (1.8)%
Selling, General and Administrative Expenses
The table below summarizes selling, general and administrative expenses by major category (dollars in thousands):
Three Months Ended
September 30,
Percentage
2008 2007 Change
Category:
General and administrative $9,832 $8,380 17.3%
Sales and marketing 7,920 5,923 33.7%
Share-based compensation 12,266 4,860 152.4%
Total selling, general and
administrative expenses $30,018 $19,163 56.6%
The increase in sales and marketing expenses primarily reflects increases in salaries and related expenses as a result of headcount growth.
Share-based compensation was higher for the quarter ended September 30, 2008, compared to the same quarter in 2007, as a result of an approximate $5.2 million increase relating to the fair value of a potential year-end stock option grant to our Chief Executive Officer, which is governed by her employment agreement.
Earnings Before Non-Cash Charges
The following table provides a reconciliation of net income to earnings before non-cash charges for the three-month periods ending September 30, 2008 and 2007 (in thousands, except per share data):
Three Months Ended
September 30,
2008 2007
Net income, as reported $12,623 $14,848
Add back:
Income tax expense 6,712 2,010
Depreciation and amortization 1,143 865
Impairment charges 353 1,515
Share-based compensation 16,989 8,040
Earnings before non-cash charges $37,820 $27,278
Earnings before non-cash charges per share (1):
Basic $1.65 $1.29
Diluted $1.48 $1.22
(1) Calculated by dividing earnings before non-cash charges by the
weighted average shares outstanding, as reported below.
Conference Call
United Therapeutics will host a half-hour teleconference on Thursday, October 30, 2008, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-800-603-1777, with international callers dialing 1-706-679-8129. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 1-800-642-1687, with international callers dialing 1-706-645-9291, and using conference code: 67213939.
This teleconference is also being webcast and can be accessed via United Therapeutics' website at http://ir.unither.com/events.cfm.
About United Therapeutics
United Therapeutics 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 cardiovascular and infectious diseases and cancer.
Non-GAAP Financial Information
This press release contains a financial measure that does not comply with U.S. generally accepted accounting principals (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.
We use earnings before non-cash charges, a financial non-GAAP measure, internally for operating, budgeting and financial planning purposes and as a metric to determine the efficiency of our operations. We believe our investors' understanding of our performance is enhanced by disclosing this measure. 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.
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 our annual revenue run rate and our belief about the future prospects of Remodulin. 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 October 30, 2008, 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.
Remodulin is a registered trademark of United Therapeutics Corporation.
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UNITED THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)
Revenues:
Net product sales $72,149 $56,661 $196,799 $144,449
Service sales 2,324 1,718 6,944 5,263
Distributor fees 559 666 1,892 1,333
Total revenues 75,032 59,045 205,635 151,045
Operating expenses:
Research and
development
19,213 19,559 59,430 65,642
Selling, general and
administrative 30,018 19,163 72,442 54,801
Cost of product sales 6,950 5,568 19,689 14,174
Cost of service sales 791 598 2,270 1,730
Total operating
expenses
56,972 44,888 153,831 136,347
Income from
operations 18,060 14,157 51,804 14,698
Other income (expense):
Interest income 2,311 3,681 8,723 9,663
Interest expense - (717) - (2,141)
Equity loss in affiliate 1 (72) (155) (265)
Other, net (493) (34) 32 (254)
Total other income,
net 1,819 2,858 8,600 7,003
Income before income tax
19,879 17,015 60,404 21,701
Income tax expense (7,256) (2,167) (22,048) (3,828)
Net income $12,623 $14,848 $38,356 $17,873
Net income per common
share:
Basic $0.55 $0.70 $1.70 $0.85
Diluted $0.50 $0.66 $1.55 $0.80
Weighted average number
of common shares
outstanding:
Basic 22,934 21,087 22,624 21,075
Diluted 25,482 22,443 24,707 22,380
CONSOLIDATED BALANCE SHEET DATA
As of September 30, 2008
(Unaudited, in thousands)
Cash, cash equivalents and marketable investments
(excluding restricted amounts of $45,353) $341,861
Total assets $766,680
Total liabilities & common stock subject to repurchase $348,094
Total stockholders' equity $418,586
SOURCE United Therapeutics Corporation
Contact: Andrew Fisher of United Therapeutics Corporation, +1-202-483-7000, [email protected]James Edgemond, (301) 608-9292, [email protected]
