Myriad Genetics, Inc. (NASDAQ:MYGN), a global leader in molecular
diagnostics and personalized medicine, today announced financial
results for its fiscal first-quarter 2018, provided an update on
recent business highlights, maintained its fiscal year 2018
financial guidance, and issued fiscal second-quarter 2018 financial
guidance.
"The first quarter exceeded our expectations and represented an
excellent start to the fiscal year as a result of strong hereditary
cancer and GeneSight® test demand,” said Mark C.
Capone, president and CEO, Myriad Genetics. “Perhaps more
importantly we had a number of significant reimbursement catalysts
that strengthen our ability to deliver on our long-term financial
goals.”
Financial HighlightsThe following table
summarizes the financial results for the fiscal first-quarter
2018:
Revenue |
|
|
|
|
|
|
|
|
|
|
Fiscal First-Quarter |
|
|
($
in millions) |
|
2018 |
|
|
2017 |
|
% Change |
Molecular
diagnostic testing revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer
testing revenue |
$ |
126.7 |
|
|
$ |
139.3 |
|
|
(9 |
%) |
|
|
|
|
|
|
|
|
|
|
GeneSight testing
revenue |
|
28.8 |
|
|
|
7.2 |
|
|
300 |
% |
|
|
|
|
|
|
|
|
|
|
Vectra DA testing
revenue |
|
16.0 |
|
|
|
11.6 |
|
|
38 |
% |
|
|
|
|
|
|
|
|
|
|
Prolaris testing
revenue |
|
2.9 |
|
|
|
2.9 |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
EndoPredict testing
revenue |
|
1.9 |
|
|
|
1.7 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
Other testing
revenue |
|
2.5 |
|
|
|
2.4 |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
Total
molecular diagnostic testing revenue |
|
178.8 |
|
|
|
165.1 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
Pharmaceutical and clinical service revenue |
|
11.4 |
|
|
|
12.4 |
|
|
(8 |
%) |
|
|
|
|
|
|
|
|
|
Total
Revenue |
$ |
190.2 |
|
|
$ |
177.5 |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
Income Statement |
|
|
|
|
|
|
|
|
|
|
Fiscal First-Quarter |
|
|
($
in millions) |
|
2018 |
|
|
2017 |
|
% Change |
Total
Revenue |
$ |
190.2 |
|
|
$ |
177.5 |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
147.2 |
|
|
|
137.5 |
|
|
7 |
% |
|
Gross Margin |
|
77.4 |
% |
|
|
77.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
59.8 |
|
|
|
131.8 |
|
|
(55 |
%) |
|
|
|
|
|
|
|
|
|
Operating
Income |
|
87.4 |
|
|
|
5.7 |
|
|
1433 |
% |
|
Operating Margin |
|
46.0 |
% |
|
|
3.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Operating Income |
|
24.7 |
|
|
|
21.6 |
|
|
14 |
% |
|
Adjusted Operating
Margin |
|
13.0 |
% |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
81.1 |
|
|
|
(1.2 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
|
1.15 |
|
|
|
(0.02 |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS |
$ |
0.26 |
|
|
$ |
0.23 |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
Business Highlights
• Hereditary Cancer
- Exceeded three percent hereditary cancer volume target in the
first quarter, and achieved the third straight quarter of volume
growth with pricing in-line with expectations.
- Launched riskScore™, a new clinically validated personalized
medicine tool to enhance the myRisk® Hereditary
Cancer test. riskScore quantifies a woman’s risk of developing
breast cancer by combining genetic markers throughout the genome
with her family and clinical history and represents a major new
epoch in hereditary cancer testing.
- Presented data at the National Society of Genetic Counselors
demonstrating that in a cohort of 17,205 women, the riskScore
single nucleotide polymorphism (SNP) panel was highly predictive of
breast cancer risk with a p- value of less than 10-50.
- The National Comprehensive Cancer Network (NCCN) updated their
professional guidelines to include a recommendation that all
metastatic prostate cancer patients receive hereditary cancer
testing. There are approximately 26,000 men in the United States
every year who develop metastatic prostate cancer.
• GeneSight
- Achieved statistically significant improvement in the
gold-standard outcomes of response and remission in 1,200 patient
prospective randomized controlled trial.
- Presented data from the IMPACT study at the World Congress of
Psychiatric Genetics demonstrating that GeneSight statistically
significantly improved anxiety symptom severity in 210 patients
with generalized anxiety disorder. Anxiety symptoms based on the
GAD-7 scale, improved 45 percent in patients receiving congruent
therapy versus 26 percent for patients receiving non-congruent
therapy. The result was statistically significant with a p-value of
0.03.
- Presented MEDCO health economic data showing patients with
generalized anxiety disorder who used GeneSight saved on average
$6,747 in prescription costs with congruent versus non-congruent
therapy selection.
• Vectra DA
- Presented data at the American College of Rheumatology (ACR)
meeting demonstrating that Vectra DA® was four
times better at predicting radiographic progression compared to
DAS28 and other conventional measures of disease activity.
- Presented new clinical utility data from 60,596 patients
demonstrating that physicians use Vectra DA scores to change
treatment decisions appropriately. The study found that in patients
who were naive to biologics, rheumatologists were 118 percent more
likely to recommend a biologic for patients with a high Vectra DA
score when compared to patients with a low Vectra DA score.
For patients already on a biologic, rheumatologists were 158
percent more likely to change therapy on patients with high Vectra
DA scores compared to those with low Vectra DA scores.
- Signed coverage with evidence development agreement with
CareFirst BlueCross BlueShield, the 18th largest commercial payer
in the United States.
• EndoPredict
- Presented new data at the World Congress on Controversies in
Breast Cancer. In a study of 387 women determined to be at
intermediate risk by the Nottingham Prognostic Index, EndoPredict
markedly outperformed the first generation test with two times the
prognostic power. Additionally, in this patient cohort EndoPredict
was the only test that was statistically significant for predicting
late stage recurrence (5-10 years).
• Companion Diagnostics
- Submitted a supplemental PMA for BRACAnalysis®
CDx in conjunction with AstraZeneca’s Lynparza submission for HER2-
metastatic breast cancer with approval expected in the fiscal third
quarter.
- UnitedHealthcare recently updated its hereditary breast and
ovarian cancer coverage policy to include coverage for all
metastatic breast cancer patients based upon the need to evaluate
these patients for PARP inhibitor therapy.
• International
- Signed the company’s first payer demonstration study with
GeneSight in Canada with Sun Life Financial, the largest private
health insurer in Canada. The study will evaluate the ability of
GeneSight to improve both clinical and health economic outcomes in
patients with anxiety and depression.
- Submitted BRACAnalysis CDx in Japan for review by the
Pharmaceutical Medical Devices Agency (PMDA) and marketing approval
by Ministry of Health, Labor and Welfare as a companion diagnostic
to olaparib for use in HER2- metastatic breast cancer
patients.
Fiscal Year 2018 and Fiscal Second-Quarter 2018
Financial GuidanceBelow is a table summarizing Myriad’s
fiscal year 2018 and fiscal second-quarter 2018 financial
guidance:
|
|
|
|
|
|
|
Revenue |
|
GAAP
Diluted Earnings Per Share |
|
Adjusted Earnings Per Share |
Fiscal Year 2018 |
$750-$770 million |
|
$1.41-$1.46 |
|
$1.00-$1.05 |
|
|
|
|
|
|
Fiscal
Second-Quarter 2018 |
$187-$189 million |
|
$0.08-$0.10 |
|
$0.22-$0.24 |
|
|
|
|
|
|
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 the conference call today to discuss
the fiscal first-quarter financial results, fiscal year 2018
financial guidance, and fiscal second-quarter 2018 financial
guidance.
Conference Call and WebcastA conference call
will be held today, Tuesday, November 7, 2017, at 4:30 p.m. EST to
discuss Myriad’s financial results for the fiscal first-quarter,
business developments and financial guidance. The dial-in
number for domestic callers is 1-800-701-6414. International
callers may dial 1-303-223-4376. All callers will be asked to
reference reservation number 21859999. 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
five strategic imperatives: stabilizing hereditary cancer
revenue, growing new product volume, expanding reimbursement
coverage for new products, increasing RNA kit revenue
internationally and improving profitability with Elevate
2020. 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, EndoPredict, Vectra, GeneSight, riskScore 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 |
|
|
September 30, |
|
|
2017 |
|
2016 |
Molecular diagnostic
testing |
|
$ |
178.8 |
|
|
$ |
165.1 |
|
Pharmaceutical and
clinical services |
|
|
11.4 |
|
|
|
12.4 |
|
Total
revenue |
|
|
190.2 |
|
|
|
177.5 |
|
Costs and
expenses: |
|
|
|
|
Cost of
molecular diagnostic testing |
|
|
36.2 |
|
|
|
34.3 |
|
Cost of
pharmaceutical and clinical services |
|
|
6.8 |
|
|
|
5.7 |
|
Research
and development expense |
|
|
17.8 |
|
|
|
19.4 |
|
Change in
the fair value of contingent consideration |
|
|
(73.2 |
) |
|
|
0.5 |
|
Selling,
general, and administrative expense |
|
|
115.2 |
|
|
|
111.9 |
|
Total
costs and expenses |
|
|
102.8 |
|
|
|
171.8 |
|
Operating
income |
|
|
87.4 |
|
|
|
5.7 |
|
Other income
(expense): |
|
|
|
|
Interest
income |
|
|
0.4 |
|
|
|
0.3 |
|
Interest
expense |
|
|
(0.9 |
) |
|
|
(0.7 |
) |
Other |
|
|
(0.3 |
) |
|
|
(1.3 |
) |
Total
other income (expense): |
|
|
(0.8 |
) |
|
|
(1.7 |
) |
Income
before income tax |
|
|
86.6 |
|
|
|
4.0 |
|
Income tax
provision |
|
|
5.6 |
|
|
|
5.2 |
|
Net income (loss) |
|
$ |
81.0 |
|
|
$ |
(1.2 |
) |
Net loss attributable
to non-controlling interest |
|
|
(0.1 |
) |
|
|
— |
|
Net income (loss)
attributable to Myriad Genetics, Inc. stockholders |
|
$ |
81.1 |
|
|
$ |
(1.2 |
) |
Earnings per
share: |
|
|
|
|
Basic |
|
$ |
1.18 |
|
|
$ |
(0.02 |
) |
Diluted |
|
$ |
1.15 |
|
|
$ |
(0.02 |
) |
Weighted average shares
outstanding: |
|
|
|
|
Basic |
|
|
68.6 |
|
|
|
68.8 |
|
Diluted |
|
|
70.4 |
|
|
|
68.8 |
|
|
|
|
|
|
|
Consolidated Balance Sheets (Unaudited) |
(in millions) |
|
|
|
|
|
|
Quarters Ended September 30, |
|
|
2017 |
|
2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
87.9 |
|
|
$ |
102.4 |
|
Marketable investment securities |
|
|
60.4 |
|
|
|
48.3 |
|
Prepaid
expenses |
|
|
9.5 |
|
|
|
12.7 |
|
Inventory |
|
|
38.9 |
|
|
|
42.2 |
|
Trade
accounts receivable, less allowance for doubtful accounts of $8.6
September 30, 2017 and $8.2 June 30, 2017 |
|
|
113.2 |
|
|
|
105.6 |
|
Prepaid
taxes |
|
|
8.8 |
|
|
|
0.2 |
|
Other
receivables |
|
|
6.9 |
|
|
|
5.7 |
|
Total
current assets |
|
|
325.6 |
|
|
|
317.1 |
|
Property, plant and
equipment, net |
|
|
49.8 |
|
|
|
51.1 |
|
Long-term marketable
investment securities |
|
|
50.1 |
|
|
|
48.5 |
|
Intangibles, net |
|
|
483.8 |
|
|
|
491.6 |
|
Goodwill |
|
|
319.0 |
|
|
|
316.1 |
|
Total
assets |
|
$ |
1,228.3 |
|
|
$ |
1,224.4 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
22.5 |
|
|
$ |
22.0 |
|
Accrued
liabilities |
|
|
59.8 |
|
|
|
65.6 |
|
Short-term contingent consideration |
|
|
54.0 |
|
|
|
127.3 |
|
Deferred
revenue |
|
|
2.9 |
|
|
|
2.6 |
|
Total
current liabilities |
|
|
139.2 |
|
|
|
217.5 |
|
Unrecognized tax
benefits |
|
|
31.9 |
|
|
|
25.2 |
|
Other long-term
liabilities |
|
|
7.4 |
|
|
|
7.2 |
|
Contingent
consideration |
|
|
13.8 |
|
|
|
13.2 |
|
Long-term debt |
|
|
74 |
|
|
|
99 |
|
Long-term deferred
taxes |
|
|
91.2 |
|
|
|
84.4 |
|
Total
liabilities |
|
|
357.7 |
|
|
|
446.6 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Common
stock, 69.2 and 68.4 shares outstanding at September 30, 2017 and
June 30, 2017 respectively |
|
|
0.7 |
|
|
|
0.7 |
|
Additional paid-in capital |
|
|
859.6 |
|
|
|
851.4 |
|
Accumulated other comprehensive loss |
|
|
(2.2 |
) |
|
|
(5.5 |
) |
Retained
earnings (deficit) |
|
|
12.8 |
|
|
|
(68.4 |
) |
Total
Myriad Genetics, Inc. stockholders’ equity |
|
|
870.9 |
|
|
|
778.2 |
|
Non-Controlling Interest |
|
|
(0.3 |
) |
|
|
(0.4 |
) |
Total
stockholders' equity |
|
|
870.6 |
|
|
|
777.8 |
|
Total
liabilities and stockholders’ equity |
|
$ |
1,228.3 |
|
|
$ |
1,224.4 |
|
|
|
|
|
|
|
Consolidated Statement of Cash Flows
(Unaudited) |
(in millions) |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
2017 |
|
2016 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net Income (loss)
attributable to Myriad Genetics, Inc. stockholders |
|
$ |
81.1 |
|
|
$ |
(1.2 |
) |
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
13.2 |
|
|
|
9.2 |
|
Non-cash
interest expense |
|
|
0.1 |
|
|
|
0.1 |
|
Gain on
disposition of assets |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
Share-based compensation expense |
|
|
6.4 |
|
|
|
7.8 |
|
Bad debt
expense |
|
|
8.0 |
|
|
|
7.2 |
|
Deferred
income taxes |
|
|
4.7 |
|
|
|
3.2 |
|
Unrecognized tax benefits |
|
|
6.7 |
|
|
|
0.4 |
|
Change in
fair value of contingent consideration |
|
|
(73.2 |
) |
|
|
0.5 |
|
Changes
in assets and liabilities: |
|
|
|
|
Prepaid
expenses |
|
|
3.2 |
|
|
|
7.8 |
|
Trade
accounts receivable |
|
|
(16.5 |
) |
|
|
(5.9 |
) |
Other
receivables |
|
|
0.3 |
|
|
|
(1.8 |
) |
Inventory |
|
|
3.3 |
|
|
|
(13.0 |
) |
Prepaid
taxes |
|
|
(8.9 |
) |
|
|
(1.0 |
) |
Accounts
payable |
|
|
0.4 |
|
|
|
(5.0 |
) |
Accrued
liabilities |
|
|
(5.8 |
) |
|
|
(10.0 |
) |
Deferred
revenue |
|
|
0.6 |
|
|
|
(1.0 |
) |
Net cash provided by
(used in) operating activities |
|
|
23.5 |
|
|
|
(2.9 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
Capital
expenditures |
|
|
(1.6 |
) |
|
|
(1.5 |
) |
Acquisitions, net of
cash acquired |
|
|
— |
|
|
|
(213.0 |
) |
Purchases of marketable
investment securities |
|
|
(31.5 |
) |
|
|
(32.2 |
) |
Proceeds from
maturities and sales of marketable investment securities |
|
|
17.9 |
|
|
|
88.7 |
|
Net cash used in
investing activities |
|
|
(15.2 |
) |
|
|
(158.0 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Net proceeds (payments)
from common stock issued under share-based compensation plans |
|
|
1.7 |
|
|
|
(1.9 |
) |
Net proceeds from
issuance of debt |
|
|
— |
|
|
|
199.0 |
|
Repayment of revolving
credit facility |
|
|
(25.0 |
) |
|
|
— |
|
Repurchase and
retirement of common stock |
|
|
— |
|
|
|
(21.3 |
) |
Net cash provided by
(used in) financing activities |
|
|
(23.3 |
) |
|
|
175.8 |
|
Effect of foreign
exchange rates on cash and cash equivalents |
|
|
0.5 |
|
|
|
3.5 |
|
Net increase (decrease)
in cash and cash equivalents |
|
|
(14.5 |
) |
|
|
18.4 |
|
Cash and cash
equivalents at beginning of the period |
|
|
102.4 |
|
|
|
68.5 |
|
Cash and
cash equivalents at end of the period |
|
$ |
87.9 |
|
|
$ |
86.9 |
|
|
|
|
|
|
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 hereditary cancer business
representing a major new epoch in hereditary cancer testing; the
Company’s expectation that riskScore will enhance the myRisk
Hereditary Cancer test; broadening payor coverage and delivering on
the Company’s long-term financial goals; the Company’s expectation
that a supplemental PMA for BRACAnalysis CDx in conjunction with
AstraZeneca’s Lynparza submission for HER2- metastatic breast
cancer will be approved in the fiscal third quarter; the National
Comprehensive Cancer Network (NCCN) updating their professional
guidelines to include a recommendation that all metastatic prostate
cancer patients receive hereditary cancer testing; UnitedHealthcare
updating its hereditary breast and ovarian cancer coverage policy
to include coverage for all metastatic breast cancer patients based
upon the need to evaluate these patients for PARP inhibitor
therapy; the Company’s second-quarter revenue guidance of $187 to
$189 million, adjusted earnings per share of $0.22 to $0.24, and
diluted earnings per share guidance of $0.08 to $0.10, and the
Company’s reiterated fiscal full year revenue guidance of total
revenue of $750 to $770 million, diluted earnings per share
guidance of $0.37 to $0.42, and adjusted earnings per share
guidance of $1.00 to $1.05, as further discussed under the caption
“Fiscal Year 2018 and Fiscal Second-Quarter 2018 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 the Company’s existing molecular diagnostic tests and
pharmaceutical and clinical services may decline or will not
continue to increase at historical rates; risks related to the
Company’s ability to transition from its existing product portfolio
to the Company’s new tests; risks related to changes in the
governmental or private insurers’ reimbursement levels for the
Company’s tests or the Company’s ability to obtain reimbursement
for its new tests at comparable levels to its existing tests; risks
related to increased competition and the development of new
competing tests and services; the risk that the Company 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 the Company may not
successfully develop new markets for its molecular diagnostic tests
and pharmaceutical and clinical services, including the Company’s
ability to successfully generate revenue outside the United States;
the risk that licenses to the technology underlying the Company’s
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 the Company’s laboratory testing facilities; risks
related to public concern over the Company’s genetic testing in
general or the Company’s 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 the
Company’s ability to obtain new corporate collaborations or
licenses and acquire new technologies or businesses on satisfactory
terms, if at all; risks related to the Company’s ability to
successfully integrate and derive benefits from any technologies or
businesses that it licenses or acquires, including but not limited
to the Company’s acquisition of Assurex, Sividon and the Clinic;
risks related to the Company’s projections about the potential
market opportunity for the Company’s products; the risk that the
Company or its licensors may be unable to protect or that third
parties will infringe the proprietary technologies underlying the
Company’s tests; the risk of patent-infringement claims or
challenges to the validity of the Company’s patents; risks related
to changes in intellectual property laws covering the Company’s
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; the risk that
the Company may be unable to comply with financial operating
covenants under the Company’s credit or lending agreements; the
risk that the Company will be unable to pay, when due, amounts due
under the Company’s credit or lending agreements; and other factors
discussed under the heading “Risk Factors” contained in Item 1A of
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.
Statement regarding use of non-GAAP financial
measuresIn 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 schedules.
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.
- Acquisition – integration related costs: Costs related to
closing and integration of acquired companies
- Tax impact related to equity compensation – Changes in
effective tax rate based upon ASU 2016-09
- Tax expense associated with R&D tax credit reserves – One
time net benefits associated with the release of R&D tax credit
reserves.
- Potential future consideration related to acquisitions –
Non-cash expenses related to valuation adjustments of earn-out and
milestone payments tied to recent acquisitions
- One-time non-deductible costs – One-time non-deductible tax
items
- Elevate 2020 costs –Expenses tied to Elevate 2020 program
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
Months ended September 30, 2017 and 2016 |
|
|
|
(Unaudited data in
millions, except per share amount) |
|
|
|
|
Three Months Ended |
|
Sep 30, 2017 |
|
Sep 30, 2016 |
|
|
|
|
Revenue |
$ |
190.2 |
|
|
$ |
177.5 |
|
|
|
|
|
GAAP Cost of
molecular diagnostic testing |
$ |
36.2 |
|
|
$ |
34.3 |
|
GAAP Cost of
pharmaceutical and clinical
services |
|
6.8 |
|
|
|
5.7 |
|
Acquisition - Integration related costs |
|
- |
|
|
|
- |
|
Non-GAAP
COGS |
$ |
43.0 |
|
|
$ |
40.0 |
|
|
|
|
|
Non-GAAP Gross
Margin |
|
77 |
% |
|
|
77 |
% |
|
|
|
|
GAAP Research
and Development |
$ |
17.8 |
|
|
$ |
19.4 |
|
Acquisition - Integration related costs |
|
- |
|
|
|
(0.1 |
) |
Acquisition - amortization of intangible assets |
|
(0.1 |
) |
|
|
(0.1 |
) |
Elevate
2020 costs |
|
(0.1 |
) |
|
|
- |
|
Non-GAAP
R&D |
$ |
17.6 |
|
|
$ |
19.2 |
|
|
|
|
|
GAAP Contingent
Consideration |
$ |
(73.2 |
) |
|
$ |
0.5 |
|
Potential
future consideration related to acquisitions |
|
73.2 |
|
|
|
(0.5 |
) |
Non-GAAP
Contingent Consideration |
$ |
- |
|
|
$ |
- |
|
|
|
|
|
GAAP Selling,
General and Administrative |
$ |
115.2 |
|
|
$ |
111.9 |
|
Acquisition - Integration related costs |
|
- |
|
|
|
(9.9 |
) |
Acquisition - amortization of intangible assets |
|
(9.1 |
) |
|
|
(5.3 |
) |
Elevate
2020 costs |
|
(1.2 |
) |
|
|
- |
|
Non-GAAP
SG&A |
$ |
104.9 |
|
|
$ |
96.7 |
|
|
|
|
|
GAAP Operating
Income (Loss) |
$ |
87.4 |
|
|
$ |
5.7 |
|
Acquisition - Integration related costs |
|
- |
|
|
|
10.0 |
|
Acquisition - amortization of intangible assets |
|
9.2 |
|
|
|
5.4 |
|
Elevate
2020 costs |
|
1.3 |
|
|
|
- |
|
Potential
future consideration related to acquisitions |
|
(73.2 |
) |
|
|
0.5 |
|
Non-GAAP
Operating Income |
$ |
24.7 |
|
|
$ |
21.6 |
|
|
|
|
|
Non-GAAP
Operating Margin |
|
13 |
% |
|
|
12 |
% |
|
|
|
|
GAAP Net Loss
Attributable to Myriad Genetics, Inc. Stockholders |
$ |
81.1 |
|
|
$ |
(1.2 |
) |
Acquisition - Integration related costs |
|
- |
|
|
|
10.0 |
|
Acquisition - amortization of intangible assets |
|
9.2 |
|
|
|
5.4 |
|
Elevate
2020 costs |
|
1.3 |
|
|
|
- |
|
Tax
impact related to equity compensation |
|
0.3 |
|
|
|
2.4 |
|
Potential
future consideration related to acquisitions |
|
(73.2 |
) |
|
|
0.5 |
|
One-time
non-deductible costs |
|
- |
|
|
|
2.8 |
|
Tax
effect associated with non-GAAP adjustments |
|
(0.5 |
) |
|
|
(3.9 |
) |
Non-GAAP Net
Income |
$ |
18.2 |
|
|
$ |
16.0 |
|
|
|
|
|
GAAP Diluted
EPS |
$ |
1.15 |
|
|
$ |
(0.02 |
) |
Non-GAAP
Diluted EPS |
$ |
0.26 |
|
|
$ |
0.23 |
|
|
|
|
|
Diluted shares
outstanding |
|
70.4 |
|
|
|
69.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Reconciliation |
|
|
|
(Unaudited data in
millions) |
|
|
|
|
Three Months Ended |
|
Sep 30, 2017 |
|
Sep 30, 2016 |
|
|
|
|
GAAP cash flow
from operations |
$ |
23.5 |
|
|
$ |
(2.9 |
) |
|
|
|
|
Capital
expenditures |
|
(1.6 |
) |
|
|
(1.5 |
) |
|
|
|
|
Free cash
flow |
$ |
21.9 |
|
|
$ |
(4.4 |
) |
|
|
|
|
Elevate 2020 costs |
|
1.3 |
|
|
|
- |
|
Acquisition -
Integration related costs |
|
- |
|
|
|
7.9 |
|
Cash paid at closing to
Assurex vendors |
|
- |
|
|
|
6.8 |
|
Tax effect associated
with non-GAAP adjustments |
|
(0.5 |
) |
|
|
(5.7 |
) |
|
|
|
|
Non-GAAP Free
cash flow |
$ |
22.7 |
|
|
$ |
4.6 |
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP for Fiscal Year 2018
and Fiscal Second-Quarter 2018 Financial GuidanceThe
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 2018 |
Diluted net
income per share |
|
GAAP diluted net income
per share |
$1.41 - $1.46 |
Acquisition -
amortization of intangible assets |
0.53 |
Change in contingent
consideration |
(1.04) |
One-time expenses |
0.10 |
Non-GAAP
diluted net income per share |
$1.00 - $1.05 |
|
|
|
|
|
Fiscal Second-Quarter 2018 |
Diluted net
income per share |
|
GAAP diluted net income
per share |
$0.08 - $0.10 |
Acquisition -
amortization of intangible assets |
0.12 |
One-time expenses |
0.02 |
Non-GAAP
diluted net income per share |
$0.22- $0.24 |
|
|
Media Contact:Ron Rogers(801) 584-3065rrogers@myriad.com
Investor Contact:Scott Gleason(801)
584-1143sgleason@myriad.com
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