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United Therapeutics Corporation Reports 2013 Fourth Quarter And Annual Financial Results

SILVER SPRING, Md., Feb. 25, 2014 /PRNewswire/ -- 

  • Total Annual Revenues of $1.1 billion
  • Annual Earnings per Share of $3.49 per Basic Share or $3.28 per Diluted Share
  • Annual Non-GAAP Earnings of $10.88 per Basic Share or $10.23 per Diluted Share

United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the fourth quarter and year ended December 31, 2013.

"United Therapeutics continued to deliver strong results in 2013, reflecting growing demand for our Remodulin®, Tyvaso® and Adcirca® products," remarked Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "In addition we successfully brought a fourth product, Orenitram, to FDA approval and continued enrolling patients in two pivotal trials with the goal of demonstrating that our oral prostacyclin analogues reduce morbidity and mortality in patients with pulmonary arterial hypertension. We feel blessed to be able to help PAH patients with medicines that have leading shares of their market segments, and are excited about our pipeline of several promising new therapies."

Total revenues for the quarter ended December 31, 2013 were $289.0 million, up from $243.8 million for the quarter ended December 31, 2012. Net loss for the quarter ended December 31, 2013 was $30.3 million or $0.60 net loss per basic share, compared to net income of $83.3 million or $1.65 per basic share for the quarter ended December 31, 2012. For the year ended December 31, 2013, we had net income of $174.6 million, or $3.49 per basic share and $3.28 per diluted share, compared to $304.4 million, or $5.84 per basic share and $5.71 per diluted share, for the year ended December 31, 2012. Non-GAAP earnings(1) for the quarter ended December 31, 2013, were $160.2 million or $3.19 per basic share, compared to $84.6 million or $1.67 per basic share for the quarter ended December 31, 2012.   Non-GAAP earnings for the year ended December 31, 2013, were $544.7 million or $10.88 per basic share, compared to $383.2 million or $7.36 per basic share for the year ended December 31, 2012.

________________________

(1)    See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.  

Operating Results

Revenues

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

 


Three Months Ended
December 31,


Year Ended
December 31,


2013


2012


2013


2012

Cardiopulmonary products:








Remodulin

$

119,865



$

116,214



$

491,179



$

457,969


Tyvaso

114,385



86,036



438,793



325,614


Adcirca

52,047



38,182



176,972



122,540


Other

2,720



3,385



10,040



9,953


Total revenues

$

289,017



$

243,817



$

1,116,984



$

916,076


 

Revenues for the quarter ended December 31, 2013 increased by $45.2 million compared to the quarter ended December 31, 2012. The growth in revenues corresponded to the continued increase in the number of patients being treated with our cardiopulmonary products.

Expenses

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

 


Three Months Ended
December 31,


Year Ended
December 31,


2013


2012


2013


2012

Project and non-project:








Cardiopulmonary

$

32,242



$

30,892



$

116,137



$

122,350


Share-based compensation expense (benefit)

76,422



(3,722)



134,706



11,237


Other

12,888



10,306



48,505



39,800


Total research and development expense

$

121,552



$

37,476



$

299,348



$

173,387


 

Share-based compensation.  The $80.1 million increase in share-based compensation expense for the quarter ended December 31, 2013 over the same quarter in 2012 reflects the 43 percent appreciation in the price of our common stock during the quarter ended December 31, 2013, compared to a 4 percent decline in our stock price for the same quarter in 2012.

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

 


Three Months Ended
December 31,


Year Ended
December 31,


2013


2012


2013


2012

Category:








General and administrative

$

38,112



$

31,118



$

140,235



$

116,899


Sales and marketing

21,038



15,788



73,871



67,220


Share-based compensation expense (benefit)

98,028



(6,833)



179,904



17,627


Total selling, general and administrative expense

$

157,178



$

40,073



$

394,010



$

201,746


 

General and administrative. The $7.0 million increase in general and administrative expenses for the quarter ended December 31, 2013 compared to the same quarter in 2012 was attributable principally to increases of $3.1 million in professional and consulting fees and $1.2 million in salaries and related expenses as a result of general corporate growth during 2013.

Sales and marketing. The $5.3 million increase in sales and marketing expenses for the quarter ended December 31, 2013 compared to the same quarter in 2012 was driven by an increase of $3.2 million in marketing and advertising expenses, as well as a $1.8 million increase in salaries and related expenses due to the growth of our sales force.

Share-based compensation.  The $104.9 million increase in share-based compensation expense for the quarter ended December 31, 2013 compared to the same quarter in 2012 reflects the 43 percent appreciation in the price of our common stock during the quarter ended December 31, 2013, compared to a 4 percent decline in the price of our common stock for the same quarter in 2012.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for the following non-cash charges, as applicable: (1) interest; (2) non-cash license fees; (3) depreciation and amortization; (4) impairment charges; and (5) share-based compensation (stock option, share tracking award and employee stock purchase plan expense). 

A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):

 


Year Ended
December 31,


Three Months Ended
December 31,


2013


2012


2011


2010


2013


2012













Net income (loss), as reported

$

174,560



$

304,442



$

217,868



$

105,916



$

(30,314)



$

83,255


Add (subtract) non-cash charges
(benefits):












Interest expense

18,058



16,639



21,372



19,714



4,562



4,490


Non-cash license fees





37,049








Depreciation and amortization

31,259



27,145



20,535



17,919



7,753



7,290


Impairment charges



4,839





7,688






Share-based compensation 
    expense (benefit)

320,786



30,115



(15,715)



113,942



178,202



(10,453)


Non-GAAP earnings

$

544,663



$

383,180



$

281,109



$

265,179



$

160,203



$

84,582














Non-GAAP earnings per share:












Basic

$

10.88



$

7.36



$

4.92



$

4.72



$

3.19



$

1.67


Diluted

$

10.23



$

7.19



$

4.73



$

4.46



$

2.88



$

1.62














Weighted average number of
common shares outstanding:












Basic

50,076



52,093



57,163



56,142



50,281



50,503


Diluted

53,231



53,280



59,395



59,516



55,648



52,133














 

Conference Call

We will host a half-hour teleconference on Tuesday, February 25, 2014, 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 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 58833697.

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 medicinal products.

Non-GAAP Financial Information

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

We use non-GAAP earnings to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure improves 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. 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 non-GAAP earnings can be found in the table above under the heading, Non-GAAP Earnings.

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 the growing demand for our products, the impact of the FDA's approval of Orenitram, the goal of our two pivotal trials of our oral prostacyclin analogues, and the potential of our pipeline to deliver promising new therapies. 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 February 25, 2014, 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]

Orenitram is a trademark, and 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 December 31,


Year Ended December 31,


2013


2012


2013


2012

Revenues:








Net product sales

$

286,297



$

240,431



$

1,106,944



$

906,123


Other

2,720



3,386



10,040



9,953


Total revenue

289,017



243,817



1,116,984



916,076


Operating expenses:








Research and development

121,552



37,476



299,348



173,387


Selling, general and administrative

157,178



40,073



394,010



201,746


Cost of product sales

38,778



37,665



131,127



119,297


Total operating expenses

317,508



115,214



824,485



494,430


Operating (loss) income

(28,491)



128,603



292,499



421,646


Other (expense) income:








Interest income

1,111



716



3,827



3,941


Interest expense

(4,562)



(4,490)



(18,058)



(16,639)


Other, net

312



123



635



31,723


Total other (expense) income, net

(3,139)



(3,651)



(13,596)



19,025


(Losses) earnings before income taxes

(31,630)



124,952



278,903



440,671


Income tax benefit (expense)

1,316



(41,697)



(104,343)



(136,229)


Net (loss) income

$

(30,314)



$

83,255



$

174,560



$

304,442


Net (loss) income per common share:








Basic

$

(0.60)



$

1.65



$

3.49



$

5.84


Diluted

$

(0.60)



$

1.60



$

3.28



$

5.71


Weighted average number of common shares outstanding:








Basic

50,281



50,503



50,076



52,093


Diluted

50,281



52,133



53,231



53,280


 

 

SELECTED CONSOLIDATED BALANCE SHEET DATA

(In millions)



December 31,


2013


2012

Cash, cash equivalents and marketable securities (excluding restricted amounts of $5.4 million as
of December 31, 2013 and 2012)

$

1,136.7



$

784.9


Total assets

2,087.6



1,626.6


Total liabilities and temporary equity

828.3



542.6


Total stockholders' equity

1,259.3



1,084.0


 

SOURCE United Therapeutics Corporation

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