Myriad Genetics Reports Fiscal Third-Quarter 2016 Financial Results
May 03 2016 - 04:05PM
Myriad Genetics, Inc. (NASDAQ:MYGN) today announced financial
results for its fiscal third-quarter 2016, provided an update on
recent business highlights, provided fiscal-fourth quarter
financial guidance and updated its fiscal year 2016 financial
guidance.
"For the fourth consecutive quarter we have
exceeded our financial projections and the highlight of this
quarter was strong growth from new products including Prolaris® and
Vectra DA®,” said Mark C. Capone, president and chief executive
officer of Myriad. “Importantly, we made significant progress in
securing new product reimbursement coverage this quarter, and
coupled with positive developments in our other development
programs, we remain confident in our ability to deliver on our
five-year strategic goals.”
Financial Highlights
- Below are tables summarizing the financial results and revenue
by product class for our fiscal third-quarter 2016:
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Fiscal Third-Quarter |
|
|
($ in
millions) |
|
2016 |
|
|
2015 |
|
% Change |
Molecular diagnostic
testing revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer testing revenue |
$ |
|
156.3 |
|
|
$ |
|
159.0 |
|
|
|
(2 |
%) |
|
|
|
|
|
|
|
|
Vectra DA
testing revenue |
|
|
12.3 |
|
|
|
|
10.5 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
Prolaris
testing revenue |
|
|
5.2 |
|
|
|
|
0.5 |
|
|
|
940 |
% |
|
|
|
|
|
|
|
|
Other
testing revenue |
|
|
3.6 |
|
|
|
|
3.0 |
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
Total molecular
diagnostic testing revenue |
|
|
177.4 |
|
|
|
|
173.0 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
Pharmaceutical and
clinical service revenue |
|
|
13.1 |
|
|
|
|
7.0 |
|
|
|
87 |
% |
|
|
|
|
|
|
|
|
Total Revenue |
$ |
|
190.5 |
|
|
$ |
|
180.0 |
|
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Statement |
|
|
|
|
|
|
|
|
|
Fiscal Third-Quarter |
|
|
($ in
millions) |
|
2016 |
|
|
2015 |
|
% Change |
Total Revenue |
$ |
|
190.5 |
|
|
$ |
|
180.0 |
|
|
|
6 |
% |
|
|
|
|
|
|
|
|
Gross Profit |
|
|
150.3 |
|
|
|
|
143.7 |
|
|
|
5 |
% |
Gross
Margin |
|
|
78.9 |
% |
|
|
|
79.8 |
% |
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
107.7 |
|
|
|
|
108.0 |
|
|
|
0 |
% |
|
|
|
|
|
|
|
|
Operating Income |
|
|
42.6 |
|
|
|
|
35.7 |
|
|
|
19 |
% |
Operating
Margin |
|
|
22.4 |
% |
|
|
|
19.8 |
% |
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income |
|
|
45.8 |
|
|
|
|
46.3 |
|
|
|
(1 |
%) |
Adjusted
Operating Margin |
|
|
24.0 |
% |
|
|
|
25.7 |
% |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
32.6 |
|
|
|
|
21.4 |
|
|
|
52 |
% |
|
|
|
|
|
|
|
|
Diluted EPS |
|
|
0.44 |
|
|
|
|
0.29 |
|
|
|
52 |
% |
|
|
|
|
|
|
|
|
Adjusted EPS |
$ |
|
0.41 |
|
|
$ |
|
0.40 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Highlights
- myRisk® Hereditary Cancer
- NCCN updated its professional guidelines for hereditary cancer
to include additional surgical risk-reduction considerations for
multiple genes on the myRisk Hereditary cancer panel including
PALB2, BRIP1, RAD51C and RAD51D. Additionally, NCCN expanded
criteria for hereditary pancreatic and prostate cancer increasing
the number of patients in the United States eligible for testing in
these indications to approximately 25,000.
- At the Society for Gynecological Oncology (SGO) meeting in
March, Myriad presented data in 381 endometrial cancer patients
showing that myRisk Hereditary Cancer identified 60 percent more
deleterious mutations than traditional single syndrome
screening.
- At the American College of Medical Genetics and Genomics annual
meeting, Myriad presented data demonstrating that one of its
proprietary myVision algorithmic variant classification tools,
Pheno®, could be utilized on a broader set of cancer risk genes
with greater than 99.5 percent accuracy in classification of
variants of unknown significance.
- Vectra® DA
- Vectra DA volumes were up 18 percent year-over-year and 11
percent sequentially in the fiscal third-quarter with approximately
42,500 tests performed.
- Expanded the successful practice integration pilot
program to the national phase with our entire rheumatology sales
team in the fiscal-third quarter.
- Signed two private insurance contracts totaling 2 million
additional covered lives for Vectra DA.
- Prolaris®/Urology
- Prolaris sample volume was up 90 percent year-over-year and 21
percent sequentially with approximately 4,300 tests ordered.
- Signed multiple additional private insurance contracts bringing
our total covered private lives to 28 million.
- myPath® Melanoma
- The second validation study on myPath Melanoma demonstrating a
90 percent diagnostic accuracy in differentiating melanoma from
benign nevi has been submitted to a major dermatology journal and
we anticipate acceptance in the fiscal fourth-quarter.
- Additionally, the clinical utility study on myPath Melanoma has
been submitted for publication and we also anticipate acceptance of
this study in the fiscal fourth-quarter.
- Companion Diagnostics
- Presented data at the recent SGO meeting demonstrating that
myChoice HRD predicted both progression free survival and overall
survival in platinum treated ovarian cancer patients. The test also
performed substantially better than any of the individual
proprietary markers (LOH, TAI, LST) in isolation.
- Announced a research collaboration with TESARO and Merck to
evaluate myChoice® HRD and Myriad’s other tumor
tests to predict responders to an investigational combination
therapy including Merck’s anti-PD-1 therapy KEYTRUDA and TESARO’s
PARP inhibitor niraparib.
- Announced a research collaboration with AbbVie in non-small
cell lung cancer to utilize myChoice HRD and Myriad’s other new
tumor companion diagnostics to help identify potential responders
to veliparib.
- International
- International revenues were up 40 percent year-over-year in the
third quarter and accounted for approximately five percent of total
product revenue in the quarter.
- The French government has established provisional funding for
EndoPredict and other breast prognostic tests beginning in April.
France represents a market opportunity of approximately 25,000
tests per year for EndoPredict.
- Signed an agreement with Hospital Corporation of America in the
United Kingdom covering testing for hereditary cancer, Tumor
BRACAnalysis CDx, EndoPredict and Prolaris. HCA manages six
hospitals seeing approximately 500,000 patients per year in the
UK.
- Share Repurchase
- During the quarter, the Company repurchased approximately 1.2
million shares, or $45 million, of common stock under our share
repurchase program and ended the quarter with approximately $47
million remaining on our current share repurchase
authorization.
Fiscal Fourth-Quarter and Fiscal
Full-Year 2016 Financial GuidanceBelow is a table
summarizing Myriad’s fiscal year 2016 and fiscal fourth-quarter
2016 financial guidance:
|
|
Revenue |
|
Adjusted Earnings Per Share |
|
GAAP Diluted Earnings Per Share |
Fiscal Fourth-Quarter
2016 |
|
$186-$188 million |
|
$0.36-$0.38 |
|
$0.32-$0.34 |
|
|
|
|
|
|
|
Fiscal
Year 2016 |
|
$753-$755 million |
|
$1.63-$1.65 |
|
$1.48-$1.50 |
|
|
|
|
|
|
|
The Company is providing fourth-quarter revenue
guidance of $186 to $188 million and adjusted earnings per share of
$0.36 to $0.38. As a result, the Company is narrowing the
range for its fiscal full year revenue guidance to total revenue of
$753 to $755 million and updating its adjusted earnings per share
guidance to $1.63 to $1.65.
These projections are forward-looking statements
and are subject to the risks summarized in the safe harbor
statement at the end of this press release. The Company will
provide further details on its business outlook during its
conference call today to discuss the fiscal third-quarter financial
results and fiscal fourth-quarter and fiscal year 2016 financial
guidance.
Conference Call and WebcastA
conference call will be held today, Tuesday, May 3, 2016, at 4:30
p.m. EDT to discuss Myriad’s financial results for the fiscal
third-quarter, business developments and financial guidance.
The dial-in number for domestic callers is (888) 224-7964.
International callers may dial (303) 223-4373. All callers
will be asked to reference reservation number 21809474. An
archived replay of the call will be available for seven days by
dialing (800) 633-8284 and entering the reservation number above.
The conference call along with a slide presentation will also will
be available through a live webcast at www.myriad.com.
About Myriad GeneticsMyriad
Genetics Inc., is a leading personalized medicine company dedicated
to being a trusted advisor transforming patient lives worldwide
with pioneering molecular diagnostics. Myriad discovers and
commercializes molecular diagnostic tests that: determine the risk
of developing disease, accurately diagnose disease, assess the risk
of disease progression, and guide treatment decisions across six
major medical specialties where molecular diagnostics can
significantly improve patient care and lower healthcare
costs. Myriad is focused on three strategic
imperatives: transitioning and expanding its hereditary
cancer testing markets, diversifying its product portfolio through
the introduction of new products and increasing the revenue
contribution from international markets. For more information
on how Myriad is making a difference, please visit the Company's
website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis,
Colaris, Colaris AP, myPath, myRisk, Myriad myRisk, myRisk
Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor
BRACAnalysis CDx, myChoice HRD, Vectra and Prolaris are trademarks
or registered trademarks of Myriad Genetics, Inc. or its wholly
owned subsidiaries in the United States and foreign countries.
MYGN-F, MYGN-G
MYRIAD GENETICS, INC. AND
SUBSIDIARIES |
CONSOLIDATED INCOME STATEMENTS
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share amounts) |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Mar 31, 2016 |
|
|
Mar 31, 2015 |
|
|
Mar 31, 2016 |
|
|
Mar 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Molecular diagnostic
testing |
$ |
177.4 |
|
$ |
|
173.0 |
|
|
$ |
532.0 |
|
$ |
516.6 |
Pharmaceutical and
clinical services |
|
13.1 |
|
|
|
7.0 |
|
|
|
35.4 |
|
|
16.6 |
Total
revenue |
|
190.5 |
|
|
|
180.0 |
|
|
|
567.4 |
|
|
533.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of
molecular diagnostic testing |
|
33.6 |
|
|
|
33.0 |
|
|
|
98.6 |
|
|
100.9 |
Cost of
pharmaceutical and clinical services |
|
6.6 |
|
|
|
3.3 |
|
|
|
18.7 |
|
|
8.1 |
Research
and development expense |
|
17.2 |
|
|
|
16.7 |
|
|
|
51.1 |
|
|
56.8 |
Selling,
general, and administrative expense |
|
90.5 |
|
|
|
91.3 |
|
|
|
267.8 |
|
|
269.4 |
Total
costs and expenses |
|
147.9 |
|
|
|
144.3 |
|
|
|
436.2 |
|
|
435.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
42.6 |
|
|
|
35.7 |
|
|
|
131.2 |
|
|
98.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
0.3 |
|
|
|
0.1 |
|
|
|
0.5 |
|
|
0.3 |
Other |
|
0.2 |
|
|
|
(0.3 |
) |
|
|
— |
|
|
1.1 |
Total
other income (expense) |
|
0.5 |
|
|
|
(0.2 |
) |
|
|
0.5 |
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
43.1 |
|
|
|
35.5 |
|
|
|
131.7 |
|
|
99.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
10.5 |
|
|
|
14.1 |
|
|
|
42.1 |
|
|
37.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
32.6 |
|
$ |
|
21.4 |
|
|
$ |
89.6 |
|
$ |
61.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.46 |
|
$ |
|
0.30 |
|
|
$ |
1.28 |
|
$ |
0.85 |
Diluted |
$ |
0.44 |
|
$ |
|
0.29 |
|
|
$ |
1.22 |
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
70.9 |
|
|
|
70.7 |
|
|
|
70.1 |
|
|
72.0 |
Diluted |
|
73.5 |
|
|
|
73.9 |
|
|
|
73.2 |
|
|
75.1 |
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
(in
millions) |
|
Mar 31, 2016 |
|
|
Jun. 30, 2015 |
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
|
120.5 |
|
|
$ |
|
64.1 |
|
|
|
|
|
Marketable investment securities |
|
|
96.2 |
|
|
|
|
80.7 |
|
|
|
|
|
Prepaid expenses |
|
|
21.1 |
|
|
|
|
12.5 |
|
|
|
|
|
Inventory |
|
|
25.3 |
|
|
|
|
25.1 |
|
|
|
|
|
Trade accounts receivable, less allowance for doubtful |
|
|
|
|
|
|
|
|
|
accounts of $6.5 March 31, 2016 and $7.6 June 30,
2015 |
|
|
91.1 |
|
|
|
|
85.8 |
|
|
|
|
|
Deferred taxes |
|
|
— |
|
|
|
|
13.5 |
|
|
|
|
|
Prepaid taxes |
|
|
15.3 |
|
|
|
|
— |
|
|
|
|
|
Other receivables |
|
|
2.9 |
|
|
|
|
1.9 |
|
|
|
|
|
Total current assets |
|
|
372.4 |
|
|
|
|
283.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
|
60.0 |
|
|
|
|
67.2 |
|
|
|
|
|
Long-term
marketable investment securiteis |
|
|
69.7 |
|
|
|
|
40.6 |
|
|
|
|
|
Intangibles, net |
|
|
183.2 |
|
|
|
|
192.6 |
|
|
|
|
|
Goodwill |
|
|
177.9 |
|
|
|
|
177.2 |
|
|
|
|
|
Other
assets |
|
|
5.0 |
|
|
|
|
5.0 |
|
|
|
|
|
Total assets |
$ |
|
868.2 |
|
|
$ |
|
766.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
|
13.8 |
|
|
$ |
|
21.1 |
|
|
|
|
|
Accrued liabilities |
|
|
50.8 |
|
|
|
|
46.1 |
|
|
|
|
|
Deferred revenue |
|
|
1.5 |
|
|
|
|
1.5 |
|
|
|
|
|
Total current liabilities |
|
|
66.1 |
|
|
|
|
68.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrecognized tax benefits |
|
|
24.0 |
|
|
|
|
26.4 |
|
|
|
|
|
Other
long-term liabilities |
|
|
7.7 |
|
|
|
|
8.8 |
|
|
|
|
|
Long-term
deferred taxes |
|
|
0.2 |
|
|
|
|
0.2 |
|
|
|
|
|
Total liabilities |
|
|
98.0 |
|
|
|
|
104.1 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
Common stock, 70.4 and 68.9 shares outstanding at |
|
|
|
|
|
|
|
|
|
March 31, 2016 and June 30, 2015 respectively |
|
|
0.7 |
|
|
|
|
0.7 |
|
|
|
|
|
Additional paid-in capital |
|
|
847.0 |
|
|
|
|
745.4 |
|
|
|
|
|
Accumulated other comprehensive loss |
|
|
(8.3 |
) |
|
|
|
(7.0 |
) |
|
|
|
|
Accumulated deficit |
|
|
(69.2 |
) |
|
|
|
(77.0 |
) |
|
|
|
|
Total stockholders' equity |
|
|
770.2 |
|
|
|
|
662.1 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
|
868.2 |
|
|
$ |
|
766.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash Flows
(Unaudited) |
|
|
|
|
|
|
|
|
(in millions) |
|
Mar 31, 2016 |
|
|
Mar 31, 2015 |
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net income |
$ |
|
89.6 |
|
|
$ |
|
61.5 |
|
|
|
Adjustments to reconcile net income to net cash provided by |
|
|
|
|
|
|
|
operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
20.0 |
|
|
|
|
18.4 |
|
|
|
Gain on
disposition of assets |
|
|
(0.4 |
) |
|
|
|
0.1 |
|
|
|
Share-based compensation expense |
|
|
23.9 |
|
|
|
|
31.6 |
|
|
|
Bad debt
expense |
|
|
23.5 |
|
|
|
|
23.5 |
|
|
|
Deferred
income taxes |
|
|
31.5 |
|
|
|
|
(1.0 |
) |
|
|
Unrecognized tax benefits |
|
|
(2.4 |
) |
|
|
|
1.9 |
|
|
|
Excess
tax benefit from share-based compensation |
|
|
(17.9 |
) |
|
|
|
(3.2 |
) |
|
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
Prepaid
expenses |
|
|
(8.7 |
) |
|
|
|
(3.0 |
) |
|
|
Trade
accounts receivable |
|
|
(28.7 |
) |
|
|
|
(32.2 |
) |
|
|
Other
receivables |
|
|
(1.0 |
) |
|
|
|
0.9 |
|
|
|
Inventory |
|
|
(0.2 |
) |
|
|
|
(4.9 |
) |
|
|
Prepaid
taxes |
|
|
(15.3 |
) |
|
|
|
13.6 |
|
|
|
Accounts
payable |
|
|
(6.9 |
) |
|
|
|
(6.4 |
) |
|
|
Accrued
liabilities |
|
|
2.9 |
|
|
|
|
(11.5 |
) |
|
|
Deferred
revenue |
|
|
- |
|
|
|
|
0.2 |
|
|
|
Net cash provided by
operating activities |
|
|
109.9 |
|
|
|
|
89.5 |
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Capital
expenditures for equipment and leasehold improvements |
|
|
(2.8 |
) |
|
|
|
(21.9 |
) |
|
|
Acquisitions, net of cash acquired |
|
|
- |
|
|
|
|
(20.1 |
) |
|
|
Purchases
of marketable investment securities |
|
|
(131.4 |
) |
|
|
|
(55.1 |
) |
|
|
Proceeds
from maturities and sales marketable investment securities |
|
|
86.6 |
|
|
|
|
140.8 |
|
|
|
Net cash provided by
(used in) investing activities |
|
|
(47.6 |
) |
|
|
|
43.7 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Net
proceeds from common stock issued under |
|
|
|
|
|
|
|
share-based compensation plans |
|
|
85.9 |
|
|
|
|
25.6 |
|
|
|
Excess
tax benefit from share-based compensation |
|
|
17.9 |
|
|
|
|
3.2 |
|
|
|
Repurchase and retirement of common stock |
|
|
(107.9 |
) |
|
|
|
(165.9 |
) |
|
|
Net cash provided by
(used in) financing activities |
|
|
(4.1 |
) |
|
|
|
(137.1 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of Foreign
exchange rates on cash and cash equivalents |
|
|
(1.8 |
) |
|
|
|
(5.7 |
) |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
|
|
56.4 |
|
|
|
|
(9.6 |
) |
|
|
Cash and cash
equivalents at beginning of year |
|
|
64.1 |
|
|
|
|
64.8 |
|
|
|
Cash and cash
equivalents at end of period |
$ |
|
120.5 |
|
|
$ |
|
55.2 |
|
|
|
|
|
|
|
|
|
|
|
Safe Harbor StatementThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements relating to the Company’s significant progress in
securing new product reimbursement coverage this quarter; positive
developments in the Company’s other development programs; the
Company’s confidence in its ability to deliver on its five-year
strategic goals; NCCN expanded criteria for hereditary pancreatic
and prostate cancer increasing the number of patients in the United
States eligible for testing in these indications to approximately
25,000; the Company’s expectation of acceptance of its second
validation study on myPath Melanoma by a major dermatology journal
in the fiscal fourth-quarter; the Company’s anticipation of
acceptance of its clinical utility study on myPath Melanoma for
publication in the fiscal fourth-quarter; France representing a
market opportunity of approximately 25,000 tests per year for
EndoPredict; the Company’s fourth-quarter revenue guidance of $186
to $188 million and adjusted earnings per share of $0.36 to $0.38
and the Company’s narrowed range for its fiscal full year revenue
guidance to total revenue of $753 to $755 million and raised
adjusted earnings per share guidance to $1.63 to $1.65, as further
discussed under the caption “Fiscal Third-Quarter and Fiscal
Full-Year 2016 Financial Guidance”; and the Company’s strategic
directives under the caption “About Myriad Genetics.” These
“forward-looking statements” are based on management’s current
expectations of future events and are subject to a number of risks
and uncertainties that could cause actual results to differ
materially and adversely from those described or implied in the
forward-looking statements. These risks include, but are not
limited to: the risk that sales and profit margins of our existing
molecular diagnostic tests and pharmaceutical and clinical services
may decline or will not continue to increase at historical rates;
risks related to our ability to transition from our existing
product portfolio to our new tests; risks related to changes in the
governmental or private insurers’ reimbursement levels for our
tests or our ability to obtain reimbursement for our new tests at
comparable levels to our existing tests; risks related to increased
competition and the development of new competing tests and
services; the risk that we may be unable to develop or achieve
commercial success for additional molecular diagnostic tests and
pharmaceutical and clinical services in a timely manner, or at all;
the risk that we may not successfully develop new markets for our
molecular diagnostic tests and pharmaceutical and clinical
services, including our ability to successfully generate revenue
outside the United States; the risk that licenses to the technology
underlying our molecular diagnostic tests and pharmaceutical and
clinical services tests and any future tests are terminated or
cannot be maintained on satisfactory terms; risks related to delays
or other problems with operating our laboratory testing facilities;
risks related to public concern over our genetic testing in general
or our tests in particular; risks related to regulatory
requirements or enforcement in the United States and foreign
countries and changes in the structure of the healthcare system or
healthcare payment systems; risks related to our ability to obtain
new corporate collaborations or licenses and acquire new
technologies or businesses on satisfactory terms, if at all; risks
related to our ability to successfully integrate and derive
benefits from any technologies or businesses that we license or
acquire, including but not limited to our acquisition of a
healthcare clinic in Germany; risks related to our projections
about the potential market opportunity for our products; the risk
that we or our licensors may be unable to protect or that third
parties will infringe the proprietary technologies underlying our
tests; the risk of patent-infringement claims or challenges to the
validity of our patents; risks related to changes in intellectual
property laws covering our molecular diagnostic tests and
pharmaceutical and clinical services and patents or enforcement in
the United States and foreign countries, such as the Supreme Court
decision in the lawsuit brought against us by the Association for
Molecular Pathology et al; risks of new, changing and competitive
technologies and regulations in the United States and
internationally; and other factors discussed under the heading
“Risk Factors” contained in Item 1A of our Annual report on Form
10-K for the fiscal year ended June 30, 2015, which has been filed
with the Securities and Exchange Commission, as well as any updates
to those risk factors filed from time to time in our Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K.
Statement regarding use of non-GAAP
financial measures
In this press release, the Company’s financial
results and financial guidance are provided in accordance with
accounting principles generally accepted in the United States
(GAAP) and using certain non-GAAP financial measures. Management
believes that presentation of operating results using non-GAAP
financial measures provides useful supplemental information to
investors and facilitates the analysis of the Company’s core
operating results and comparison of operating results across
reporting periods. Management also uses non-GAAP financial measures
to establish budgets and to manage the Company’s business. A
reconciliation of the GAAP financial results to non-GAAP financial
results is included in the attached financial statements.
Following is a description of the adjustments
made to GAAP financial measures:
- Acquisition - amortization of intangible assets: Represents
recurring amortization charges resulting from the acquisition of
intangible assets, including developed technology and database
rights.
- Severance – executive severance: Represents one-time severance
expenses associated with the departure of executive officers of
Myriad Genetics, Inc.
- Discontinued operations - One-time charges associated with the
closing of business units.
- Tax expense associated with R&D tax credit reserves – One
time net benefits associated with the release of R&D tax credit
reserves.
The Company encourages investors to carefully
consider its results under GAAP, as well as its supplemental
non-GAAP information and the reconciliation between these
presentations, to more fully understand its business. Non-GAAP
financial results are reported in addition to, and not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP.
Reconciliation of GAAP to Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
for
the Three and Nine Months ended March 31, 2016 and
2015 |
|
|
|
|
|
|
|
|
|
(Unaudited data in
millions, except per share amount) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
Mar. 31, 2016 |
|
Mar. 31, 2015 |
|
Mar. 31, 2016 |
|
Mar. 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Cost of
molecular diagnostic testing |
$ |
33.6 |
|
|
$ |
33.0 |
|
|
$ |
98.6 |
|
|
$ |
100.9 |
|
|
|
|
GAAP Cost of
pharmaceutical and clinical
services |
|
6.6 |
|
|
|
3.3 |
|
|
|
18.7 |
|
|
|
8.1 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
Non-GAAP
COGS |
$ |
40.2 |
|
|
$ |
36.3 |
|
|
$ |
117.3 |
|
|
$ |
109.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Margin |
|
79 |
% |
|
|
80 |
% |
|
|
79 |
% |
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research
and Development |
$ |
17.2 |
|
|
$ |
16.7 |
|
|
$ |
51.1 |
|
|
$ |
56.8 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
(0.4 |
) |
|
|
- |
|
|
|
(0.4 |
) |
|
|
|
Discontinued operations |
|
- |
|
|
|
(0.2 |
) |
|
|
- |
|
|
|
(0.2 |
) |
|
|
|
Acquisition - amortization of
intangible assets |
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
|
Non-GAAP
R&D |
$ |
17.1 |
|
|
$ |
16.0 |
|
|
$ |
50.8 |
|
|
$ |
56.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling,
General and Administrative |
$ |
90.5 |
|
|
$ |
91.3 |
|
|
$ |
267.8 |
|
|
$ |
269.4 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
(6.8 |
) |
|
|
- |
|
|
|
(11.1 |
) |
|
|
|
Acquisition - amortization of
intangible assets |
|
(3.1 |
) |
|
|
(3.1 |
) |
|
|
(9.2 |
) |
|
|
(9.2 |
) |
|
|
|
Non-GAAP
SG&A |
$ |
87.4 |
|
|
$ |
81.4 |
|
|
$ |
258.6 |
|
|
$ |
249.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income |
$ |
42.6 |
|
|
$ |
35.7 |
|
|
$ |
131.2 |
|
|
$ |
98.0 |
|
|
|
|
Discontinued operations |
|
- |
|
|
|
0.2 |
|
|
|
- |
|
|
|
0.2 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
7.2 |
|
|
|
- |
|
|
|
11.5 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
3.2 |
|
|
|
3.2 |
|
|
|
9.5 |
|
|
|
9.4 |
|
|
|
|
Non-GAAP
Operating Income |
$ |
45.8 |
|
|
$ |
46.3 |
|
|
$ |
140.7 |
|
|
$ |
119.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Operating Margin |
|
24 |
% |
|
|
26 |
% |
|
|
25 |
% |
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income |
$ |
32.6 |
|
|
$ |
21.4 |
|
|
$ |
89.6 |
|
|
$ |
61.5 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
7.2 |
|
|
|
- |
|
|
|
11.5 |
|
|
|
|
Discontinued operations |
|
- |
|
|
|
0.2 |
|
|
|
- |
|
|
|
0.2 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
3.2 |
|
|
|
3.2 |
|
|
|
9.5 |
|
|
|
9.4 |
|
|
|
|
Tax expense associated with R&D
tax credit reserves |
|
(6.0 |
) |
|
|
- |
|
|
|
(6.0 |
) |
|
|
- |
|
|
|
|
Tax expense associated with
Non-GAAP adjustments |
|
- |
|
|
|
(2.7 |
) |
|
|
- |
|
|
|
(4.4 |
) |
|
|
|
Non-GAAP Net
Income |
$ |
29.8 |
|
|
$ |
29.3 |
|
|
$ |
93.1 |
|
|
$ |
78.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
EPS |
$ |
0.44 |
|
|
$ |
0.29 |
|
|
$ |
1.22 |
|
|
$ |
0.82 |
|
|
|
|
Non-GAAP
Diluted EPS |
$ |
0.41 |
|
|
$ |
0.40 |
|
|
$ |
1.27 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
73.5 |
|
|
|
73.9 |
|
|
|
73.2 |
|
|
|
75.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Reconciliation |
|
|
|
|
|
|
|
|
|
|
(Unaudited data in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
Mar. 31, 2016 |
|
Mar. 31, 2015 |
|
Mar. 31, 2016 |
|
Mar. 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cash flow
from operations |
$ |
44.1 |
|
|
$ |
29.9 |
|
|
$ |
109.9 |
|
|
$ |
89.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(0.7 |
) |
|
|
(4.5 |
) |
|
|
(2.8 |
) |
|
|
(21.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow |
$ |
43.4 |
|
|
$ |
25.4 |
|
|
$ |
107.1 |
|
|
$ |
67.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP for
Fiscal Year 2016 and Fiscal Fourth-Quarter 2016 Financial
Guidance
The Company’s future performance and financial
results are subject to risks and uncertainties, and actual results
could differ materially from guidance set forth below. Some of the
factors that could affect the Company’s financial results are
stated in the safe harbor statement of this press release. More
information on potential factors that could affect the Company’s
financial results are included under the heading "Risk Factors"
contained in Item 1A in the Company’s most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission, as
well as any updates to those risk factors filed from time to time
in the Company’s Quarterly Reports on Form 10-Q or Current Reports
on Form 8-K.
|
|
Fiscal
Year 2016 |
Diluted net income per
share |
|
GAAP diluted net income per
share |
$1.48 - $1.50 |
Acquisition - amortization of
intangible assets |
0.15 |
Non-GAAP diluted net income
per share |
$1.63 -
$1.65 |
|
|
|
|
|
|
|
|
Fiscal
Fourth-Quarter 2016 |
Diluted net income per
share |
|
GAAP diluted net income per
share |
$0.32 - $0.34 |
Acquisition - amortization of
intangible assets |
0.04 |
Non-GAAP diluted net income
per share |
$0.36 -
$0.38 |
Media Contact:
Ron Rogers
(801) 584-3065
rrogers@myriad.com
Investor Contact:
Scott Gleason
(801) 584-1143
sgleason@myriad.com
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