ALBANY, N.Y., Sept. 15, 2015 /PRNewswire/ -- Following the
acquisition of Gadea Pharmaceutical Group, AMRI (NASDAQ: AMRI) has
updated guidance for full year 2015.
"We are very pleased to provide our updated outlook for 2015
results which reflect the recent addition of Gadea Pharmaceutical
Group," said William S. Marth,
AMRI's president and chief executive officer. "Gadea brought us
over 90 technically complex API programs, greatly enhancing our
commercial portfolio and opportunities for expanded business. With
Gadea's strong EBITDA and margins, combined with our expanding base
business, we remain confident in our outlook which includes full
year contract revenue growth of over 50% and adjusted diluted EPS
growth of over 40% at the midpoint."
In addition to the Gadea acquisition, the Company's guidance
takes into account a number of factors, including expected results
for the third and fourth quarter 2015, anticipated tax rates and
shares outstanding. Please refer to the financial supplement
documents included on the Investor Relations page of our website
here for further information on this updated guidance.
AMRI's outlook for 2015 is as follows:
- Full year contract revenue is expected to be between
$386 and $400 million, an increase of
56% at the midpoint
- Adjusted contract margins of approximately 26%
- Royalty revenue of between $14 and $16
million, including approximately $5.5
million of Allegra royalties, which have expired
- Adjusted selling, general and administrative (SG&A)
expenses at approximately 15% of contract revenue
- R&D of approximately $5
million, reflecting Gadea investment in generic and
505(b)(2) development programs
- Adjusted EBITDA between $75 and $78
million, up 53% at the midpoint
- Adjusted diluted EPS is expected to be between $0.90 and $0.95, compared to $0.65 in 2014, based on an average fully diluted
share count of approximately 34 million shares
- Effective tax rate of approximately 32%
- Capital expenditures of between $24 and
$26 million
The Company intends to announce third quarter 2015 results in
early November and currently expects the percentage of total
revenue and adjusted diluted EPS in the second half of 2015 to be
approximately 25% in the third quarter and 75% in the fourth
quarter, reflecting the historic seasonality in AMRI's business and
greater revenue contribution from Gadea in the fourth quarter.
AMRI's estimates for 2015 reflect the acquisition of
Gadea Pharmaceutical Group which closed in July 2015. 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.
In connection with the acquisition, AMRI secured financing on a
$200 million Term Loan, which bears
interest at 5.75% and repaid its $74
million revolving credit facility. These changes will result
in incremental interest expense of approximately $5 million in 2015.
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.
In conjunction with this change, AMRI provided adjusted non-GAAP
financial results in line with the updated non-GAAP definition for
full year 2014. The supplemental documents are available here at
the Investor Relations page of the company's website. This change
does not impact any prior period financial statements presented on
a GAAP basis.
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
royalty 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 regarding the strength of the company's business and
prospects, statements regarding the impact of recent acquisition
activity, statements regarding the expected financial results for
the third and fourth quarter 2015, 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; 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,
adjusted EBITDA, adjusted diluted EPS and other financial guidance
offered today 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 and plan in the future to present 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. We also present
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 our
quarterly and annual results as reported in these non-GAAP measures
will be reconciled to the most directly comparable GAAP financial
measures when such actual results are announced by AMRI.
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SOURCE AMRI