ALBANY, N.Y., Aug. 4, 2015 /PRNewswire/ -- AMRI (NASDAQ:
AMRI) today reported financial and operating results for the second
quarter ended June 30, 2015.
Highlights:
- Second quarter contract revenue of $85.2
million, a 39% increase from 2014
- Adjusted contract margins of 26%
- Second quarter adjusted diluted EPS of $0.22, including a $0.05 decrease in EPS from royalties in the
current quarter
- Operating cash flow of $16
million
"We are very pleased to present another strong financial
quarter, with all our divisions achieving excellent results," said
William S. Marth, AMRI's president
and chief executive officer. "Notably, recent acquisitions,
combined with the cost reduction initiatives and efficiency efforts
we've made to date, are contributing to continued strong contract
margin performance.
The recent addition of Gadea Pharmaceutical Group will
significantly expand our capabilities in technically complex active
pharmaceutical ingredients and will extend our reach into many new
markets. Based on our strong pipeline of business and the addition
of Gadea, we remain confident that the positive trends we are
seeing will continue in the second half of the year and look
forward to providing investors with our outlook for the remainder
of the year in mid-September."
Second Quarter 2015 Results
Total revenue for the second quarter of 2015 was $89.5 million, an increase of 31% compared to
total revenue of $68.2 million
reported in the second quarter of 2014.
Total contract revenue for the second quarter of 2015 was
$85.2 million, an increase of 39%
compared to total contract revenue of $61.5
million reported in the second quarter of 2014. Adjusted
contract margins were 26% for the second quarter of 2015, compared
with 27% for the second quarter of 2014. Margins benefited from
recent acquisitions and the impact of the cost reduction
initiatives and facility optimization activities, offset by product
mix within the Active Pharmaceutical Ingredients (API) segment.
Adjusted contract margins exclude purchase accounting depreciation
and amortization, as well as share-based compensation expense that
are included under U.S. GAAP. For a reconciliation of U.S.
GAAP contract margins as reported to adjusted contract margins for
the 2015 and 2014 reporting periods, please see Table 1 at the end
of press release.
Royalty revenue in the second quarter of 2015 was $4.3 million, a decrease of 36% from $6.7 million in the second quarter of 2014 due
primarily to lower royalties on Allegra (fexofenadine) products.
Royalty revenue for the second quarter of 2015 includes
$1.8 million of royalties from the
fexofenadine products and $2.5
million from the net sales of certain amphetamine salts sold
by Allergan (formerly Actavis).
Net income under U.S. GAAP was $2.3
million, or $0.07 per diluted
share, in the second quarter of 2015, compared to U.S. GAAP net
income of $3.7 million, or
$0.11 per diluted share for the
second quarter of 2014. Net income on an adjusted non-GAAP basis in
the second quarter of 2015 was $7.4
million or $0.22 per diluted
share, compared to adjusted net income of $7.2 million or $0.22 per diluted share for 2014. For a
reconciliation of U.S. GAAP net income and earnings per diluted
share as reported to adjusted net income and earnings per diluted
share for the 2015 and 2014 reporting periods, please see Tables 2
and 3 at the end of this press release.
Beginning in the second quarter 2015, AMRI implemented an
updated non-GAAP definition, which includes the impact of cash
interest expense and excludes the impact of non-cash stock-based
compensation, both of which had previously been excluded and
included, respectively in the Company's calculations of these
non-GAAP financial measures. These changes have redefined non-GAAP
cost of contract revenue, SG&A, interest expense, net income,
and EBITDA financial measures from the prior non-GAAP definition.
We believe these financial measures provide investors with
appropriate non-GAAP measurements that emphasize the cash earnings
potential of the business and better reflect the underlying
financial performance of the business. Historic non-GAAP reported
operating results have been adjusted to match this new
definition.
Year-to-Date Results
Total revenue for the six-month period ended June 30, 2015 was $171.4
million, an increase of 34% compared to total revenue of
$127.5 million reported in the second
quarter of 2014.
Total contract revenue for the first six months of 2015 was
$160.4 million, an increase of 43%
compared to total contract revenue of $112.5
million in 2014. Adjusted contract margins were 25% for the
first six months of 2015, compared with 23% for 2014.
Royalty revenue in the first six months of 2015 was $11.0 million, a decrease of 27% from
$15.0 million in 2014 due primarily
to lower royalties on Allegra (fexofenadine) products. Royalty
revenue for the first six months of 2015 includes $5.6 million of royalties from the fexofenadine
products and $5.4 million from the
net sales of certain amphetamine salts sold by Allergan.
Net income under U.S. GAAP was $0.1
million, or $0.00 per diluted
share, in the first six months of 2015, compared to U.S. GAAP net
income of $7.2 million, or
$0.22 per diluted share in 2014. Net
income on an adjusted non-GAAP basis in the first six months of
2015 was $13.8 million or
$0.42 per diluted share, compared to
adjusted net income of $12.3 million
or $0.38 per diluted share for
2014.
Segment Results
Drug Discovery
Services (DDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
DDS Contract
Revenue
|
|
$ 23,363
|
|
$ 19,125
|
|
$ 42,627
|
|
$ 38,115
|
Cost of Contract
Revenue
|
|
17,438
|
|
15,428
|
|
32,194
|
|
31,055
|
Contract Gross
Profit
|
|
5,925
|
|
3,697
|
|
10,433
|
|
7,060
|
Contract Gross
Margin
|
|
25.4%
|
|
19.3%
|
|
24.5%
|
|
18.5%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (1) (2)
|
|
6,493
|
|
3,823
|
|
11,157
|
|
7,311
|
Adjusted Contract
Gross Margin (1) (2)
|
|
27.8%
|
|
20.0%
|
|
26.2%
|
|
19.2%
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 1
included in this release for the reconciliation of U.S. GAAP
contract gross profit and contract gross margin to adjusted
contract gross profit and adjusted contract gross margin as a
percentage of contract revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) A portion of the
2014 amounts were reclassified from DDS to API to better align
business activities within our reporting segments.
|
|
|
|
Discovery and Development Services (DDS) contract revenue for
the second quarter of 2015 increased 22% to $23.4 million, compared to $19.1 million the second quarter of 2014,
primarily due to $4.1 million of
incremental revenues from the acquisition of SSCI in February 2015. DDS adjusted contract margins
increased to 28% from 20% in the second quarter of 2014, driven by
the margins realized on SSCI revenues, as well as the benefits of
cost reduction initiatives and facility optimization.
For the first half of 2015, DDS contract revenue increased 12%
to $42.6 million from $38.1 million in 2014. Incremental SSCI revenues
and increased Singapore and
insourcing revenues were partially offset by decreased U.S.
discovery and development revenues. DDS adjusted gross margins
increased to 26% in 2015 from 19% in 2014, driven by the margins
realized on SSCI revenues, as well as the benefits of cost
reduction initiatives and facility optimization.
Active
Pharmaceutical Ingredients (API)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
API Contract
Revenue
|
|
$ 39,997
|
|
$ 39,610
|
|
$ 77,845
|
|
$ 69,370
|
Cost of Contract
Revenue
|
|
28,434
|
|
26,469
|
|
57,016
|
|
49,714
|
Contract Gross
Profit
|
|
11,563
|
|
13,141
|
|
20,829
|
|
19,656
|
Contract Gross
Margin
|
|
28.9%
|
|
33.2%
|
|
26.8%
|
|
28.3%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (1)
|
|
11,776
|
|
13,261
|
|
21,219
|
|
19,801
|
Adjusted Contract
Gross Margin (1)
|
|
29.4%
|
|
33.5%
|
|
27.3%
|
|
28.5%
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 1
included in this release for the reconciliation of U.S. GAAP
contract gross profit and contract gross margin to adjusted
contract gross profit and adjusted contract gross margin as a
percentage of contract revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) A portion of the
2014 amounts were reclassified from DDS to API to better align
business activities within our reporting segments.
|
|
|
|
API contract revenue for the second quarter of 2015 was
consistent with 2014. API adjusted contract margins for the second
quarter of 2015 decreased to 29% from 34% in the second quarter of
2014, due to the mix of business within the segment.
For the first half of 2015, API contract revenue increased 12%
to $77.8 million from $69.4 million in 2014, due primarily to an
increase in commercial product sales and a full year of revenue
from Cedarburg Pharmaceuticals, which was acquired in April
2014. Excluding the acquisition of Cedarburg, API contract
revenue increased 8% compared to the first half of 2014. API
adjusted gross margins decreased to 27% in 2015 from 29% in 2014,
due to the mix of business within the segment.
Drug Product
Manufacturing (DPM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
DPM Contract
Revenue
|
|
$ 21,866
|
|
$ 2,739
|
|
$ 39,886
|
|
$ 5,027
|
Cost of Contract
Revenue
|
|
18,796
|
|
3,141
|
|
33,596
|
|
5,879
|
Contract Gross
Profit
|
|
3,070
|
|
(402)
|
|
6,290
|
|
(852)
|
Contract Gross
Margin
|
|
14.0%
|
|
-14.7%
|
|
15.8%
|
|
-16.9%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (Loss) (1)
|
|
3,724
|
|
(394)
|
|
7,115
|
|
(838)
|
Adjusted Contract
Gross Margin (1)
|
|
17.0%
|
|
-14.4%
|
|
17.8%
|
|
-16.7%
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 1
included in this release for the reconciliation of U.S. GAAP
contract gross loss and contract gross margin to adjusted contract
gross profit (loss) and adjusted contract gross margin as a
percentage of contract revenue.
|
|
|
|
Drug Product Manufacturing contract revenue for the second
quarter of 2015 increased $19.1
million over the same period of 2014 and includes
$13.2 million of revenue from OsoBio
which was acquired in July 2014,
$3.5 million of revenue from the
Glasgow facility that was acquired
in January 2015, and an 87% increase
in organic revenue. In addition, Drug Product adjusted contract
margins for the second quarter of 2015 increased to 17% compared to
-14% for the same period of 2014, driven by the additions of the
OsoBio and Glasgow businesses and
by increased capacity utilization.
For the first half of 2015, Drug Product contract revenue
increased $34.9 million to
$39.9 million from $5.0 million in 2014, due primarily to the
addition of $24.5 million in revenue
from OsoBio, $7.4 million in revenue
from Glasgow, and a 58% increase
in organic revenue. Drug Product adjusted gross margins improved to
18% in 2015 from -17% in 2014, due to the additions of OsoBio and
Glasgow and increased capacity
utilization.
Liquidity and Capital Resources
At June 30, 2015, AMRI had cash,
cash equivalents and restricted cash of $45.6 million, compared to $32.2 million at March 31,
2015. The increase in cash and cash equivalents for the
quarter ended June 30, 2015 was
primarily due to cash generated by operating activities of
$15.6 million, which was partially
offset by $3.4 million in capital
expenditures. Total common shares outstanding, net of treasury
shares, were 33,240,429 at June 30,
2015.
Financial Outlook
On July 16, 2015, AMRI acquired
all the outstanding shares of Gadea Pharmaceutical Group, a
privately-held company located in Valladolid, Spain, specializing in technically complex API
and finished drug product. The purchase price was $174
million, including the issuance of 2.2 million shares of common
stock, valued at $43.8 million, with the balance paid in
$97.0 million in cash and through the
assumption of $33.2 million of
debt.
On a stand-alone basis, Gadea's forecasted full year 2015
revenue is estimated to be between $80
million and $90 million, with forecasted adjusted EBITDA of
between $18 million and $20 million.
The transaction is expected to be accretive to AMRI's non-GAAP
diluted earnings per share, with nominal synergies. AMRI intends to
provide an update to its 2015 financial guidance including the
addition of Gadea in mid-September
2015.
Second Quarter Results Conference Call
AMRI will host a conference call and webcast today
at 8:30 a.m. ET to discuss second quarter 2015
results. The conference call can be accessed by dialing (866)
208-5728 (domestic calls) or (224) 633-1279 (international calls)
at 8:20 a.m. ET and entering passcode
69698467. The webcast and supplementing slides can be accessed on
the company's website at www.amriglobal.com.
A replay of the conference call can be accessed for 24 hours
beginning at 11:30 a.m. ET at (855)
859-2056 (domestic calls) or (404) 537-3406 (international calls)
and entering passcode 69698467. Replays of the webcast can also be
accessed for up to 90 days after the call via the investor area of
the company's website at http://ir.amriglobal.com.
About AMRI
Albany Molecular Research Inc. (AMRI) is a
global contract research and manufacturing organization that has
been working with the Life Sciences industry to improve patient
outcomes and the quality of life for more than two decades. With
locations in North America,
Europe and Asia, our key business segments include
Discovery and Development Solutions (DDS), Active Pharmaceutical
Ingredients (API), and Drug Product Manufacturing (DPM). Our DDS
segment provides comprehensive services from hit identification to
IND, including expertise with diverse chemistry, library design and
synthesis, in vitro biology and pharmacology, drug
metabolism and pharmacokinetics, as well as natural products. API
supports the chemical development and cGMP manufacture of complex
API, including potent, controlled substances, biologics, peptides,
steroids, hormones, cytotoxic compounds and sterile API. DPM
supports development through commercial scale production of complex
liquid-filled and lyophilized parenterals, sterile suspensions and
ophthalmic formulations. For more information about AMRI, please
visit our website at www.amriglobal.com or follow us on Twitter
(@amriglobal).
Forward-looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties. These statements include, but
are not limited to, statements regarding the company's estimates of
revenue, contract revenue, adjusted EBITDA, adjusted diluted
earnings per share, and all information and other statements
regarding the estimates of results and financial outlook for
2015, statements made by the company's Chief Executive Officer,
statements under the caption "Financial Outlook," statements
regarding the strength of the company's business and prospects,
statements regarding the impact of recent acquisition activity, and
statements concerning the company's momentum and long-term growth,
including expected results for 2015. Readers should not place undue
reliance on our forward-looking statements. The company's actual
results may differ materially from such forward-looking statements
as a result of numerous factors, some of which the company may not
be able to predict and may not be within the company's control.
Factors that could cause such differences include, but are not
limited to, trends in pharmaceutical and biotechnology companies'
outsourcing of manufacturing services and chemical research and
development, including softness in these markets; sales of
Allegra®, the rapid reduction in royalties on the Allegra products
expected in 2015 and the patent expirations on such products,; the
success of the sales of other products for which the company
receives royalties; the risk that the company will not be able to
replicate either in the short or long term the revenue stream that
has been derived from the royalties payable under the Allegra®
license agreements; the risk that clients may terminate or reduce
demand under any strategic or multi-year deal; the company's
ability to enforce its intellectual property and technology rights;
the company's ability to obtain financing sufficient to meet its
business needs; the company's ability to successfully comply with
heightened FDA scrutiny on aseptic fill/finish operations; the
results of further FDA inspections; the company's ability to
effectively maintain compliance with applicable FDA and DEA
regulations; the company's ability to integrate past or future
acquisitions, including the Gadea Pharmaceutical Group, Aptuit West
Lafayette and Glasgow operations,
Cedarburg Pharmaceuticals and Oso Biopharmaceuticals Manufacturing,
and make such acquisitions accretive to the company's business
model, the company's ability to take advantage of proprietary
technology and expand the scientific tools available to it, the
ability of the company's strategic investments and acquisitions to
perform as expected, as well as those risks discussed in the
company's Annual Report on Form 10-K for the year ended
December 31, 2014 as filed with the
Securities and Exchange Commission on March
16, 2015, and the company's other SEC filings. Contract
revenue and adjusted EBITDA and other financial guidance offered by
senior management today with respect to the expected results for
Gadea Pharmaceutical Group in 2015 represent a point-in-time
estimate and are based on information as of the date of this press
release. Senior management has made numerous assumptions in
providing this guidance which, while believed to be reasonable, may
not prove to be accurate. Numerous factors, including those noted
above, may cause actual results to differ materially from the
guidance provided. The company expressly disclaims any current
intention or obligation to update the guidance provided or any
other forward-looking statement in this press release to reflect
future events or changes in facts assumed for purposes of providing
this guidance or otherwise affecting the forward-looking statements
contained in this press release.
Non-GAAP Adjustment Items
To supplement our financial results prepared in accordance with
U.S. GAAP, we have presented non-GAAP measures of contract gross
profit, contract gross margin, income from operations, and net
income and income per diluted share as adjusted to exclude certain
impairment charges, restructuring charges, executive transition
costs, non-cash debt interest and amortization charges, business
acquisition costs, share-based compensation expense, non-recurring
professional fees, ERP implementation costs, depreciation and
amortization of purchase accounting adjustments, write-offs of
deferred financing costs, insurance recoveries, non-recurring
income tax adjustments, and postretirement benefit plan settlement
gains in the 2015 and 2014 periods. We have also presented
non-GAAP measures of adjusted EBITDA, which in addition to the
items excluded above, further excluded the impact of interest
income and expense, depreciation and amortization expense, and
income tax expense or benefit. Exclusion of these
non-recurring items allows comparisons of operating results that
are consistent over time. We believe presentation of these
non-GAAP measures enhances an overall understanding of our
historical financial performance because we believe they are an
indication of the performance of our base business. Management uses
these non-GAAP measures as a basis for evaluating our financial
performance as well as for budgeting and forecasting of future
periods. For these reasons, we believe they can be useful to
investors. The presentation of this additional information should
not be considered in isolation or as a substitute for income (loss)
from operations, net income (loss) or income (loss) per diluted
share, prepared in accordance with U.S. GAAP. Reconciliations
of these non-GAAP measures to the most directly comparable GAAP
financial measures are set forth in Tables 1-3.
Albany Molecular
Research, Inc.
Selected
Consolidated Balance Sheet Data
(unaudited)
|
|
|
|
|
(Dollars in
thousands)
|
|
June
30,
|
December
31,
|
|
|
2015
|
2014
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 42,556
|
$ 46,995
|
Restricted
cash
|
|
3,000
|
4,052
|
Accounts receivable,
net
|
|
79,068
|
71,644
|
Royalty income
receivable
|
|
4,450
|
5,061
|
Inventory
|
|
60,605
|
49,880
|
Total current
assets
|
|
206,667
|
191,012
|
Property and
equipment, net
|
|
175,045
|
165,475
|
Total
assets
|
|
602,584
|
519,953
|
|
|
|
|
Total current
liabilities
|
|
60,559
|
48,690
|
Long‑term debt,
excluding current installments, net of
unamortized
discount
|
|
201,651
|
159,980
|
Total
liabilities
|
|
353,599
|
278,131
|
Total stockholders'
equity
|
|
249,025
|
241,822
|
Total liabilities and
stockholders' equity
|
|
602,584
|
519,953
|
Albany Molecular
Research, Inc.
Condensed
Consolidated Statements of Operations
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
(Dollars in
thousands,
except for
per share data)
|
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
|
$
|
85,226
|
|
$
|
61,474
|
|
$
|
160,358
|
|
$
|
112,512
|
Recurring
royalties
|
|
|
4,322
|
|
|
6,705
|
|
|
11,007
|
|
|
14,988
|
Total
revenue
|
|
|
89,548
|
|
|
68,179
|
|
|
171,365
|
|
|
127,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
contract revenue
|
|
|
64,668
|
|
|
45,038
|
|
|
122,807
|
|
|
86,648
|
Technology
incentive award
|
|
|
179
|
|
|
424
|
|
|
560
|
|
|
1,017
|
Research
and development
|
|
|
384
|
|
|
128
|
|
|
875
|
|
|
207
|
Selling,
general and
administrative
|
|
|
16,518
|
|
|
12,747
|
|
|
33,992
|
|
|
23,376
|
Postretirement
benefit plan
settlement gain
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(1,285)
|
Restructuring
charges
|
|
|
1,632
|
|
|
1,042
|
|
|
3,119
|
|
|
1,272
|
Impairment
charges
|
|
|
–
|
|
|
3,718
|
|
|
2,615
|
|
|
3,718
|
Total
operating
expenses
|
|
|
83,381
|
|
|
63,097
|
|
|
163,968
|
|
|
114,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
6,167
|
|
|
5,082
|
|
|
7,397
|
|
|
12,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
|
(3,179)
|
|
|
(3,065)
|
|
|
(6,214)
|
|
|
(5,681)
|
Other income
(expense), net
|
|
|
634
|
|
|
(192)
|
|
|
1,103
|
|
|
(232)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
3,622
|
|
|
1,825
|
|
|
2,286
|
|
|
6,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense (benefit)
|
|
|
1,315
|
|
|
(1,899)
|
|
|
2,202
|
|
|
(590)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
2,307
|
|
$
|
3,724
|
|
$
|
84
|
|
$
|
7,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income
per share
|
|
$
|
0.07
|
|
$
|
0.12
|
|
$
|
0.00
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income
per share
|
|
$
|
0.07
|
|
$
|
0.11
|
|
$
|
0.00
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 1: Reconciliation of three and six months ended
June 30, 2015 and 2014 reported
contract gross profit (loss) and contract gross margin to adjusted
contract gross profit (loss) and adjusted contract gross
margin:
Non-GAAP
Measures
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(Dollars in
thousands)
|
|
June
30,
|
|
June
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Consolidated Contract
Revenue, as reported
|
|
$
85,226
|
|
$ 61,474
|
|
$ 160,358
|
|
$ 112,512
|
Consolidated Cost of
Contract Revenue, as reported
|
|
$
64,668
|
|
$ 45,038
|
|
$ 122,807
|
|
$ 86,648
|
Consolidated Contract
Gross Profit, as reported
|
|
20,558
|
|
16,436
|
|
37,551
|
|
25,864
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
255
|
|
159
|
|
477
|
|
315
|
add: Purchase
accounting depreciation
|
|
1,179
|
|
95
|
|
1,462
|
|
95
|
Consolidated Contract
Gross Profit, as adjusted
|
|
$
21,992
|
|
$ 16,690
|
|
$ 39,490
|
|
$ 26,274
|
Consolidated Contract
Gross Margin, as reported
|
|
24.1%
|
|
26.7%
|
|
23.4%
|
|
23.0%
|
Consolidated Contract
Gross Margin, as adjusted
|
|
25.8%
|
|
27.1%
|
|
24.6%
|
|
23.4%
|
|
|
|
|
|
|
|
|
|
DDS Segment Contract
Revenue, as reported
|
|
$
23,363
|
|
$ 19,125
|
|
$ 42,627
|
|
$ 38,115
|
DDS Segment Cost of
Contract Revenue, as reported
|
|
17,438
|
|
15,428
|
|
32,194
|
|
31,055
|
DDS Segment Contract
Gross Profit, as reported
|
|
5,925
|
|
3,697
|
|
10,433
|
|
7,060
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
146
|
|
126
|
|
302
|
|
251
|
add: Purchase
accounting depreciation
|
|
422
|
|
-
|
|
422
|
|
-
|
DDS Segment Contract
Gross Profit, as adjusted
|
|
$
6,493
|
|
$ 3,823
|
|
$ 11,157
|
|
$ 7,311
|
DDS Segment Contract
Gross Margin, as reported
|
|
25.4%
|
|
19.3%
|
|
24.5%
|
|
18.5%
|
DDS Segment Contract
Gross Margin, as adjusted
|
|
27.8%
|
|
20.0%
|
|
26.2%
|
|
19.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
API Segment Contract
Revenue, as reported
|
|
$
39,997
|
|
$ 39,610
|
|
$ 77,845
|
|
$ 69,370
|
API Segment Cost of
Contract Revenue, as reported
|
|
28,434
|
|
26,469
|
|
57,016
|
|
49,714
|
API Segment Contract
Gross Profit, as reported
|
|
11,563
|
|
13,141
|
|
20,829
|
|
19,656
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
78
|
|
25
|
|
120
|
|
50
|
add: Purchase
accounting depreciation
|
|
135
|
|
95
|
|
270
|
|
95
|
API Segment Contract
Gross Profit, as adjusted
|
|
$
11,776
|
|
$ 13,261
|
|
$ 21,219
|
|
$ 19,801
|
API Segment Contract
Gross Margin, as reported
|
|
28.9%
|
|
33.2%
|
|
26.8%
|
|
28.3%
|
API Segment Contract
Gross Margin, as adjusted
|
|
29.4%
|
|
33.5%
|
|
27.3%
|
|
28.5%
|
|
|
|
|
|
|
|
|
|
Drug Product Segment
Contract Revenue, as reported
|
|
$
21,866
|
|
$ 2,739
|
|
$ 39,886
|
|
$ 5,027
|
Drug Product Segment
Cost of Contract Revenue, as reported
|
|
18,796
|
|
3,141
|
|
33,596
|
|
5,879
|
Drug Product Segment
Contract Gross Loss, as reported
|
|
3,070
|
|
(402)
|
|
6,290
|
|
(852)
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
31
|
|
8
|
|
55
|
|
14
|
add: Purchase
accounting depreciation
|
|
623
|
|
-
|
|
770
|
|
-
|
Drug Product Segment
Contract Gross Profit (Loss), as adjusted
|
|
$
3,724
|
|
$ (394)
|
|
$ 7,115
|
|
$ (838)
|
Drug Product Segment
Contract Margin, as reported
|
|
14.0%
|
|
-14.7%
|
|
15.8%
|
|
-16.9%
|
Drug Product Segment
Contract Margin, as adjusted
|
|
17.0%
|
|
-14.4%
|
|
17.8%
|
|
-16.7%
|
Table 2: Reconciliation of the three and six months ended
June 30, 2015 and 2014 reported
income from operations, net income and earnings per diluted share
to adjusted income from operations, adjusted net income and
adjusted diluted earnings per share:
|
|
Second
Quarter
|
|
Second
Quarter
|
|
YTD June
30,
|
|
YTD June
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income from
operations, as reported
|
|
$
6,167
|
|
$
5,082
|
|
$
7,397
|
|
$
12,547
|
Impairment
charges
|
|
-
|
|
3,718
|
|
2,615
|
|
3,718
|
Restructuring
charges
|
|
1,632
|
|
1,042
|
|
3,119
|
|
1,272
|
Executive transition
costs
|
|
145
|
|
(14)
|
|
936
|
|
626
|
Business acquisition
costs
|
|
582
|
|
1,346
|
|
1,672
|
|
1,668
|
Purchase accounting
depreciation and amortization
|
|
1,873
|
|
275
|
|
2,876
|
|
275
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
94
|
|
-
|
|
298
|
|
-
|
Non-recurring
professional fees
|
|
94
|
|
-
|
|
711
|
|
-
|
Share-based
compensation expense
|
|
1,465
|
|
1,024
|
|
3,020
|
|
1,957
|
Income from
operations, as adjusted
|
|
$
12,052
|
|
$
12,473
|
|
$
22,644
|
|
$
20,778
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
|
$
2,307
|
|
$
3,724
|
|
$
84
|
|
$
7,224
|
Impairment
charges
|
|
-
|
|
3,718
|
|
2,615
|
|
3,718
|
Restructuring
charges
|
|
1,632
|
|
1,042
|
|
3,119
|
|
1,272
|
Executive transition
costs
|
|
145
|
|
(14)
|
|
936
|
|
626
|
Business acquisition
costs
|
|
582
|
|
1,346
|
|
1,672
|
|
1,668
|
Purchase accounting
depreciation and amortization
|
|
1,873
|
|
275
|
|
2,876
|
|
275
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
94
|
|
-
|
|
298
|
|
-
|
Non-recurring
professional fees
|
|
94
|
|
-
|
|
711
|
|
-
|
Non-cash debt
interest and amortization charges
|
|
1,772
|
|
1,682
|
|
3,526
|
|
3,323
|
Share-based
compensation expense
|
|
1,465
|
|
1,024
|
|
3,020
|
|
1,957
|
Insurance recovery -
business interruption
|
|
(600)
|
|
-
|
|
(600)
|
|
-
|
Write-off of deferred
financing costs
|
|
-
|
|
439
|
|
-
|
|
439
|
Tax effect for above
items
|
|
(1,964)
|
|
(3,353)
|
|
(4,500)
|
|
(4,173)
|
Non-recurring income
tax adjustments
|
|
-
|
|
(2,715)
|
|
-
|
|
(2,715)
|
Net income, as
adjusted
|
|
$
7,400
|
|
$
7,168
|
|
$
13,757
|
|
$
12,329
|
|
|
|
|
|
|
|
|
|
Earnings per diluted
share, as reported
|
|
$
0.07
|
|
$
0.11
|
|
$
0.00
|
|
$
0.22
|
Impairment
charges
|
|
-
|
|
0.07
|
|
0.08
|
|
0.07
|
Restructuring
charges
|
|
0.04
|
|
0.02
|
|
0.09
|
|
0.03
|
Executive transition
costs
|
|
0.00
|
|
-
|
|
0.02
|
|
0.01
|
Business acquisition
costs
|
|
0.01
|
|
0.03
|
|
0.03
|
|
0.03
|
Purchase accounting
depreciation and amortization
|
|
0.04
|
|
0.01
|
|
0.06
|
|
0.01
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(0.03)
|
ERP Implementation
costs
|
|
0.01
|
|
-
|
|
0.01
|
|
-
|
Non-recurring
professional fees
|
|
0.00
|
|
-
|
|
0.01
|
|
-
|
Non-cash debt
interest and amortization charges
|
|
0.03
|
|
0.03
|
|
0.07
|
|
0.07
|
Share-based
compensation expense
|
|
0.03
|
|
0.02
|
|
0.06
|
|
0.04
|
Insurance recovery -
business interruption
|
|
(0.01)
|
|
-
|
|
(0.01)
|
|
-
|
Write-off of deferred
financing costs
|
|
-
|
|
0.01
|
|
-
|
|
0.01
|
Non-recurring income
tax adjustments
|
|
-
|
|
(0.08)
|
|
-
|
|
(0.08)
|
Earnings per diluted
share, as adjusted
|
|
$
0.22
|
|
$
0.22
|
|
$
0.42
|
|
$
0.38
|
Table 3: Reconciliation of the three and six months ended
June 30, 2015 and 2014 reported
income from operations to adjusted EBITDA:
|
|
Second
Quarter
|
|
Second
Quarter
|
|
YTD June
30,
|
|
YTD June
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income from
operations, as reported
|
|
$
6,167
|
|
$
5,082
|
|
$
7,397
|
|
$ 12,547
|
Impairment
charges
|
|
-
|
|
3,718
|
|
2,615
|
|
3,718
|
Restructuring
charges
|
|
1,632
|
|
1,042
|
|
3,119
|
|
1,272
|
Executive transition
costs
|
|
145
|
|
(14)
|
|
936
|
|
626
|
Business acquisition
costs
|
|
582
|
|
1,346
|
|
1,672
|
|
1,668
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
94
|
|
-
|
|
298
|
|
-
|
Non-recurring
professional fees
|
|
94
|
|
-
|
|
711
|
|
-
|
Share-based
compensation expense
|
|
1,465
|
|
1,024
|
|
3,020
|
|
1,957
|
Income from
operations, as adjusted
|
|
10,179
|
|
12,198
|
|
19,768
|
|
20,503
|
Add: Non-operating
income (expense) net, as reported
|
|
634
|
|
(192)
|
|
1,103
|
|
(232)
|
Deduct: Insurance
recovery - business interruption
|
|
(600)
|
|
-
|
|
(600)
|
|
-
|
Add: Depreciation and
amortization
|
|
6,276
|
|
4,263
|
|
11,762
|
|
8,024
|
Adjusted
EBITDA
|
|
$
16,489
|
|
$
16,269
|
|
$ 32,033
|
|
$ 28,295
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/amri-announces-second-quarter-2015-results-300123091.html
SOURCE AMRI