ALBANY, New York, Nov. 5,
2015 /PRNewswire/ -- AMRI (NASDAQ: AMRI) today reported
financial and operating results for the third quarter ended
September 30 2015.
Highlights:
- Third quarter contract revenue of $101.4
million, a 76% increase from 2014
- Adjusted contract margins expand to 25%
- Third quarter adjusted diluted EPS of $0.14, including a $0.04 decrease in EPS from royalties in the
current quarter
- Operating cash flow of $18.5
million
- Reiterates Full Year 2015 total revenue of $400 to $416 million; adjusted EPS guidance
maintained at between $0.90 and $0.95
per diluted share
"Adjusted contract margins" and "Adjusted diluted EPS" are Non-GAAP
measurements. See discussion under the heading "Non-GAAP Adjustment
Items" in this release.
"We achieved a significant milestone this quarter, achieving
over $100 million in contract revenue
and expanded adjusted contract margins of 25%," said William S. Marth, AMRI's president and chief
executive officer. "Recent acquisitions and organic growth,
combined with cost reduction initiatives and efficiency efforts,
contributed to our continued strong performance.
With the addition of Gadea Pharmaceuticals, we've tripled the
number of commercial APIs in our portfolio, providing us with a
solid foundation in our API business in targeted segments. These
APIs are approved and sold globally, providing us expanded market
access for the rest of our portfolio.
Our integrated drug discovery center in Buffalo NY is now operational to meet the
demands of customers who are looking for a US-based discovery
service offering. The integration of biology and chemistry along
with state of the art technology and our informatics partnership
with PerkinElmer, as well as the high caliber of talent we are
recruiting, will facilitate fast data turnaround and program
progression.
Outsourcing trends continue to expand, and as industry assets
and capacity continue to shift, we see opportunities for AMRI. As
we continue to grow, we will continue to integrate, align and scale
our capabilities and asset base to respond to our customer's
expanding needs as we look to be a leading provider of discovery
services, API and drug product to the industry."
Third Quarter 2015 Results
Total revenue for the third quarter of 2015 was $104.6 million, an increase of 67% compared to
total revenue of $62.5 million
reported in the third quarter of 2014.
Total contract revenue for the third quarter of 2015 was
$101.4 million, an increase of 76%
compared to total contract revenue of $57.5
million reported in the third quarter of 2014. Adjusted
contract margins were 25% for the third quarter of 2015, compared
with 8% for the third quarter of 2014. Margins benefited from
recent acquisitions, product mix within the Active Pharmaceutical
Ingredients (API) segment and the impact of the cost reduction
initiatives and facility optimization activities.
Royalty revenue in the third quarter of 2015 was $3.2 million, a decrease of 35% from $5.0 million in the third quarter of 2014 due
primarily to lower royalties on Allegra (fexofenadine) products
which have ended. Royalty revenue for the third quarter of 2015
includes royalties from the net sales of certain amphetamine salts
sold by Allergan (formerly Actavis) and royalties from net sales of
an API sourced in Spain.
Net loss under U.S. GAAP was $(4.2)
million, or $(0.12) per share,
in the third quarter of 2015, compared to U.S. GAAP net loss of
$(8.6) million, or $(0.27) per share for the third quarter of 2014.
Net income on an adjusted non-GAAP basis in the third quarter of
2015 was $5.1 million or $0.14 per diluted share, compared to adjusted net
loss of $(0.6) million or
$(0.02) 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 nine-month period ended September 30, 2015 was $275.9 million, an increase of 45% compared to
total revenue of $190.0 million
reported for the nine-month period of 2014.
Total contract revenue for the first nine months of 2015 was
$261.7 million, an increase of 54%
compared to total contract revenue of $170.0
million in 2014. Adjusted contract margins were 25% for the
first nine months of 2015, compared with 18% for 2014.
Royalty revenue in the first nine months of 2015 was
$14.2 million, a decrease of 29% from
$20.0 million in 2014 due primarily
to lower royalties on Allegra (fexofenadine) products. Royalty
revenue for the first nine months of 2015 includes royalties from
the fexofenadine products, royalties from the net sales of certain
amphetamine salts sold by Allergan and royalties from the net sales
of an API sourced in Spain. Net
loss under U.S. GAAP was $(4.1)
million, or $(0.12) per share,
in the first nine months of 2015, compared to U.S. GAAP net loss of
$(1.4) million, or $(0.05) per share in 2014. Net income on an
adjusted non-GAAP basis in the first nine months of 2015 was
$18.9 million or $0.56 per diluted share, compared to adjusted net
income of $11.7 million or
$0.37 per diluted share for 2014.
Segment Results
Drug Discovery
Services (DDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
DDS Contract
Revenue
|
|
$ 23,137
|
|
$ 17,108
|
|
$ 65,764
|
|
$ 55,223
|
Cost of Contract
Revenue
|
|
16,742
|
|
14,051
|
|
48,936
|
|
45,091
|
Contract Gross
Profit
|
|
6,395
|
|
3,057
|
|
16,828
|
|
10,132
|
Contract Gross
Margin
|
|
27.6%
|
|
17.9%
|
|
25.6%
|
|
18.3%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (1) (2)
|
|
6,833
|
|
3,180
|
|
17,990
|
|
10,506
|
Adjusted Contract
Gross Margin (1) (2)
|
|
29.5%
|
|
18.6%
|
|
27.4%
|
|
19.0%
|
|
|
|
|
|
|
|
|
|
(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 third quarter of 2015 increased $6.0
million or 35% compared to the third quarter of 2014,
primarily due to $4.6 million of
incremental revenues from the acquisition of SSCI in February 2015. DDS adjusted contract margins
increased 11 percentage points in the third quarter of 2015, driven
by the margins realized on SSCI revenues, as well as the benefits
of cost reduction initiatives and facility optimization.
For the nine months ending September 30,
2015, DDS contract revenue increased $10.5 million or 19% primarily due to
$10.7 million of incremental SSCI
revenues. DDS adjusted gross margins increased 8 percentage points,
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
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
API Contract
Revenue
|
|
$ 56,156
|
|
$ 30,548
|
|
$ 134,001
|
|
$ 99,918
|
Cost of Contract
Revenue
|
|
43,410
|
|
29,778
|
|
100,427
|
|
79,499
|
Contract Gross
Profit
|
|
12,746
|
|
770
|
|
33,574
|
|
20,419
|
Contract Gross
Margin
|
|
22.7%
|
|
2.5%
|
|
25.1%
|
|
20.4%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (1) (2)
|
|
16,243
|
|
891
|
|
37,461
|
|
20,685
|
Adjusted Contract
Gross Margin (1) (2)
|
|
28.9%
|
|
2.9%
|
|
28.0%
|
|
20.7%
|
|
|
|
|
|
|
|
|
|
(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 third quarter of 2015 increased
$25.6 million or 84% compared to the
third quarter 2014, primarily due to $17.8
million of incremental revenues from the acquisition of
Gadea Pharmaceuticals in July 2015
and product mix. API adjusted contract margin for the third quarter
of 2015 increased 26 percentage points, driven by the margins
realized on Gadea's revenues, an improved product mix and pricing
impacts.
For the first nine months of 2015, API contract revenue
increased $34.1 million or 34%, due
to the addition of Gadea and increased product volumes. API
adjusted gross margin increased 7 percentage points in 2015, due to
the addition of Gadea, an improved product mix and pricing
impacts.
Drug Product
Manufacturing (DPM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(Unaudited; $ in
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
DPM Contract
Revenue
|
|
$ 22,055
|
|
$ 9,825
|
|
$ 61,941
|
|
$ 14,852
|
Cost of Contract
Revenue
|
|
20,052
|
|
12,585
|
|
53,648
|
|
18,472
|
Contract Gross Profit
(Loss)
|
|
2,003
|
|
(2,760)
|
|
8,293
|
|
(3,620)
|
Contract Gross
Margin
|
|
9.1%
|
|
-28.1%
|
|
13.4%
|
|
-24.4%
|
|
|
|
|
|
|
|
|
|
Adjusted Contract
Gross Profit (Loss) (1)
|
|
1,979
|
|
572
|
|
9,094
|
|
(274)
|
Adjusted Contract
Gross Margin (1)
|
|
9.0%
|
|
5.8%
|
|
14.7%
|
|
-1.8%
|
|
|
|
|
|
|
|
|
|
(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 third
quarter of 2015 increased $12.2
million or 124% compared to the third quarter 2014, and
includes $4.1 million of revenue from
the Glasgow facility that was
acquired in January 2015. Drug
Product adjusted contract margins for the third quarter of 2015
increased 3 percentage points, driven primarily by the addition of
the Glasgow business. In the third
quarter 2014, Drug Product contract revenue and gross margin were
impacted due to a business disruption at the Albuquerque
facility.
For the first nine months of 2015, Drug Product contract revenue
increased $47.1 million, due
primarily to increased revenue at the Albuquerque facility and the
addition of $11.5 million in revenue
from Glasgow. Drug Product
adjusted gross margins improved 17 percentage points, due to the
addition of the Glasgow
business.
Liquidity and Capital Resources
At September 30, 2015, AMRI had
cash, cash equivalents and restricted cash of $82.4 million, compared to $45.6 million at June 30,
2015. The increase in cash and cash equivalents for the
quarter ended September 30 2015 was
primarily due to cash generated by operating activities of
$18.5 million, net proceeds from debt
financing of $16.3 million, and
$11.0 million from the Gadea
acquisition, which was partially offset by $6.1 million in capital expenditures. Total
common shares outstanding, net of treasury shares, were 35,497,776
at September 30, 2015.
Financial Outlook
AMRI's guidance takes into account a number of factors,
including expected results for the fourth quarter 2015, anticipated
tax rates and shares outstanding. Please refer to the financial
supplement document included on the Investor Relations page of our
website at: ir.amriglobal.com for further information on our full
year 2015 guidance.
AMRI's outlook for 2015 is as follows:
- Full Year 2015 total revenue of $400 to
$416 million
- Full year contract revenue of between $384 and $398 million*, an increase of 56% at the
midpoint
- Adjusted contract margins of approximately 26%
- Royalty revenue of between $16 and $18
million*
- Adjusted SG&A expenses at approximately 15% of contract
revenue
- R&D of approximately $5
million
- Adjusted EBITDA between $75 and $78
million, up 53% at the midpoint
- Adjusted diluted EPS of 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
- Adjusted effective tax rate of 32%
- Capital expenditures of between $24 and
$26 million
*Forecasted contract revenue and royalties have been adjusted by
$2.0 million from the previous
forecast, based on a reclass of an API from contract revenue to
royalties.
Third Quarter Results Conference Call
AMRI will host a conference call and webcast today at
8:30 a.m. ET to discuss third 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
62660027. 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 62660027. 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; the success of
the sales of the 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. All financial
guidance offered by senior management today represents 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)
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 79,462
|
|
$ 46,995
|
Restricted
cash
|
|
2,963
|
|
4,052
|
Accounts receivable,
net
|
|
88,306
|
|
71,644
|
Royalty income
receivable
|
|
4,762
|
|
5,061
|
Inventory
|
|
104,668
|
|
49,880
|
Total current
assets
|
|
303,429
|
|
191,012
|
Property and
equipment, net
|
|
213,686
|
|
165,475
|
Total
assets
|
|
819,868
|
|
515,868
|
|
|
|
|
|
Total current
liabilities
|
|
99,284
|
|
48,690
|
Long‑term debt,
excluding current installments,
net of unamortized
discount
|
|
344,373
|
|
155,985
|
Total
liabilities
|
|
531,131
|
|
274,046
|
Total stockholders'
equity
|
|
288,737
|
|
241,822
|
Total liabilities and
stockholders' equity
|
|
819,868
|
|
515,868
|
Albany Molecular
Research, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Dollars in
thousands, except for per share data)
|
|
|
September 30,
2015
|
|
|
September 30,
2014
|
|
|
September 30,
2015
|
|
|
September 30,
2014
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
|
$
|
101,348
|
|
$
|
57,481
|
|
$
|
261,706
|
|
$
|
169,993
|
Recurring
royalties
|
|
|
3,231
|
|
|
4,990
|
|
|
14,238
|
|
|
19,978
|
Total
revenue
|
|
|
104,579
|
|
|
62,471
|
|
|
275,944
|
|
|
189,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of contract
revenue
|
|
|
80,204
|
|
|
56,414
|
|
|
203,011
|
|
|
143,062
|
Technology incentive
award
|
|
|
(6)
|
|
|
260
|
|
|
554
|
|
|
1,277
|
Research and
development
|
|
|
1,903
|
|
|
568
|
|
|
2,778
|
|
|
775
|
Selling, general and
administrative
|
|
|
21,219
|
|
|
11,568
|
|
|
55,211
|
|
|
34,944
|
Postretirement
benefit plan settlement gain
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(1,285)
|
Restructuring
charges
|
|
|
709
|
|
|
2,164
|
|
|
3,828
|
|
|
3,436
|
Impairment
charges
|
|
|
540
|
|
|
1,232
|
|
|
3,155
|
|
|
4,950
|
Total operating
expenses
|
|
|
104,569
|
|
|
72,206
|
|
|
268,537
|
|
|
187,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
10
|
|
|
(9,735)
|
|
|
7,407
|
|
|
2,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(6,318)
|
|
|
(2,575)
|
|
|
(12,532)
|
|
|
(8,256)
|
Other income,
net
|
|
|
798
|
|
|
235
|
|
|
1,901
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(5,510)
|
|
|
(12,075)
|
|
|
(3,224)
|
|
|
(5,441)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
|
(1,340)
|
|
|
(3,434)
|
|
|
862
|
|
|
(4,024)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(4,170)
|
|
$
|
(8,641)
|
|
$
|
(4,086)
|
|
$
|
(1,417)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
|
$
|
(0.12)
|
|
$
|
(0.27)
|
|
$
|
(0.12)
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
|
(0.12)
|
|
$
|
(0.27)
|
|
$
|
(0.12)
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 1: Reconciliation of three and nine months ended
September 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
|
|
Nine Months
Ended
|
(Dollars in
thousands)
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Consolidated Contract
Revenue, as reported
|
|
$ 101,348
|
|
$ 57,481
|
|
$ 261,706
|
|
$ 169,993
|
Consolidated Cost of
Contract Revenue, as reported
|
|
$ 80,204
|
|
$ 56,414
|
|
$ 203,011
|
|
$ 143,062
|
Consolidated Contract
Gross Profit, as reported
|
|
21,144
|
|
1,067
|
|
58,695
|
|
26,931
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
246
|
|
157
|
|
723
|
|
472
|
add: Purchase
accounting adjustments
|
|
3,665
|
|
268
|
|
5,127
|
|
363
|
add: Business
interruption charges
|
|
-
|
|
3,117
|
|
-
|
|
3,117
|
add: Business
acquisition costs
|
|
-
|
|
34
|
|
-
|
|
34
|
Consolidated Contract
Gross Profit, as adjusted
|
|
$ 25,055
|
|
$ 4,643
|
|
$ 64,545
|
|
$ 30,917
|
Consolidated Contract
Gross Margin, as reported
|
|
20.9%
|
|
1.9%
|
|
22.4%
|
|
15.8%
|
Consolidated Contract
Gross Margin, as adjusted
|
|
24.7%
|
|
8.1%
|
|
24.7%
|
|
18.2%
|
|
|
|
|
|
|
|
|
|
DDS Segment Contract
Revenue, as reported
|
|
$ 23,137
|
|
$ 17,108
|
|
$ 65,764
|
|
$ 55,223
|
DDS Segment Cost of
Contract Revenue, as reported
|
|
16,742
|
|
14,051
|
|
48,936
|
|
45,091
|
DDS Segment Contract
Gross Profit, as reported
|
|
6,395
|
|
3,057
|
|
16,828
|
|
10,132
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
147
|
|
123
|
|
449
|
|
374
|
add: Purchase
accounting adjustments
|
|
291
|
|
-
|
|
713
|
|
-
|
DDS Segment Contract
Gross Profit, as adjusted
|
|
$ 6,833
|
|
$ 3,180
|
|
$ 17,990
|
|
$ 10,506
|
DDS Segment Contract
Gross Margin, as reported
|
|
27.6%
|
|
17.9%
|
|
25.6%
|
|
18.3%
|
DDS Segment Contract
Gross Margin, as adjusted
|
|
29.5%
|
|
18.6%
|
|
27.4%
|
|
19.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
API Segment Contract
Revenue, as reported
|
|
$ 56,156
|
|
$ 30,548
|
|
$ 134,001
|
|
$ 99,918
|
API Segment Cost of
Contract Revenue, as reported
|
|
43,410
|
|
29,778
|
|
100,427
|
|
79,499
|
API Segment Contract
Gross Profit, as reported
|
|
12,746
|
|
770
|
|
33,574
|
|
20,419
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
69
|
|
26
|
|
189
|
|
76
|
add: Purchase
accounting adjustments
|
|
3,428
|
|
95
|
|
3,698
|
|
190
|
API Segment Contract
Gross Profit, as adjusted
|
|
$ 16,243
|
|
$ 891
|
|
$ 37,461
|
|
$ 20,685
|
API Segment Contract
Gross Margin, as reported
|
|
22.7%
|
|
2.5%
|
|
25.1%
|
|
20.4%
|
API Segment Contract
Gross Margin, as adjusted
|
|
28.9%
|
|
2.9%
|
|
28.0%
|
|
20.7%
|
|
|
|
|
|
|
|
|
|
Drug Product Segment
Contract Revenue, as reported
|
|
$ 22,055
|
|
$ 9,825
|
|
$ 61,941
|
|
$ 14,852
|
Drug Product Segment
Cost of Contract Revenue, as reported
|
|
20,052
|
|
12,585
|
|
53,648
|
|
18,472
|
Drug Product Segment
Contract Gross Profit (Loss), as reported
|
|
2,003
|
|
(2,760)
|
|
8,293
|
|
(3,620)
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
30
|
|
8
|
|
85
|
|
22
|
add: Purchase
accounting adjustments
|
|
(54)
|
|
173
|
|
716
|
|
173
|
add: Business
interruption charges
|
|
-
|
|
3,117
|
|
-
|
|
3,117
|
add: Business
acquisition costs
|
|
-
|
|
34
|
|
-
|
|
34
|
Drug Product Segment
Contract Gross Profit (Loss), as adjusted
|
|
$ 1,979
|
|
$ 572
|
|
$ 9,094
|
|
$ (274)
|
Drug Product Segment
Contract Margin, as reported
|
|
9.1%
|
|
-28.1%
|
|
13.4%
|
|
-24.4%
|
Drug Product Segment
Contract Margin, as adjusted
|
|
9.0%
|
|
5.8%
|
|
14.7%
|
|
-1.8%
|
Table 2: Reconciliation of the three and nine months ended
September 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:
|
|
Third
Quarter
|
|
Third
Quarter
|
|
YTD September
30,
|
|
YTD September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income (loss) from
operations, as reported
|
|
$ 10
|
|
$ (9,735)
|
|
$ 7,407
|
|
$ 2,812
|
Impairment
charges
|
|
540
|
|
1,232
|
|
3,155
|
|
4,950
|
Restructuring
charges
|
|
709
|
|
2,164
|
|
3,828
|
|
3,436
|
Business interruption
charges
|
|
-
|
|
3,117
|
|
-
|
|
3,117
|
Executive transition
costs
|
|
469
|
|
-
|
|
1,405
|
|
626
|
Business acquisition
costs
|
|
1,630
|
|
970
|
|
3,302
|
|
2,638
|
Purchase accounting
adjustments
|
|
4,962
|
|
753
|
|
7,838
|
|
1,028
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
467
|
|
-
|
|
765
|
|
-
|
Non-recurring
professional fees
|
|
115
|
|
-
|
|
826
|
|
-
|
Share-based
compensation expense
|
|
1,796
|
|
1,018
|
|
4,816
|
|
2,975
|
Income (loss) from
operations, as adjusted
|
|
$ 10,698
|
|
$ (481)
|
|
$ 33,342
|
|
$ 20,297
|
|
|
|
|
|
|
|
|
|
Net loss, as
reported
|
|
$ (4,170)
|
|
$ (8,641)
|
|
$ (4,086)
|
|
$ (1,417)
|
Impairment
charges
|
|
540
|
|
1,232
|
|
3,155
|
|
4,950
|
Restructuring
charges
|
|
709
|
|
2,164
|
|
3,828
|
|
3,436
|
Business interruption
charges
|
|
-
|
|
3,117
|
|
-
|
|
3,117
|
Executive transition
costs
|
|
469
|
|
-
|
|
1,405
|
|
626
|
Business acquisition
costs
|
|
1,630
|
|
970
|
|
3,302
|
|
2,638
|
Purchase accounting
adjustments
|
|
4,962
|
|
753
|
|
7,838
|
|
1,028
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
467
|
|
-
|
|
765
|
|
-
|
Non-recurring
professional fees
|
|
115
|
|
-
|
|
826
|
|
-
|
Non-cash debt
interest and amortization charges
|
|
2,694
|
|
1,696
|
|
6,220
|
|
5,019
|
Share-based
compensation expense
|
|
1,796
|
|
1,018
|
|
4,816
|
|
2,975
|
Insurance recovery -
business interruption
|
|
-
|
|
-
|
|
(600)
|
|
-
|
Write-off of deferred
financing costs
|
|
-
|
|
-
|
|
-
|
|
439
|
Tax effect for above
items
|
|
(4,105)
|
|
(2,896)
|
|
(8,605)
|
|
(7,069)
|
Non-recurring income
tax adjustments
|
|
-
|
|
-
|
|
-
|
|
(2,715)
|
Net income (loss), as
adjusted
|
|
$ 5,107
|
|
$ (587)
|
|
$ 18,864
|
|
$ 11,742
|
|
|
|
|
|
|
|
|
|
Loss per share, as
reported
|
|
$ (0.12)
|
|
$ (0.27)
|
|
$ (0.12)
|
|
$ (0.05)
|
Impairment
charges
|
|
0.02
|
|
0.04
|
|
0.09
|
|
0.12
|
Restructuring
charges
|
|
0.02
|
|
0.06
|
|
0.10
|
|
0.09
|
Business interruption
charges
|
|
-
|
|
0.06
|
|
-
|
|
0.06
|
Executive transition
costs
|
|
0.01
|
|
-
|
|
0.03
|
|
0.01
|
Business acquisition
costs
|
|
0.03
|
|
0.02
|
|
0.06
|
|
0.06
|
Purchase accounting
adjustments
|
|
0.09
|
|
0.02
|
|
0.16
|
|
0.02
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(0.03)
|
ERP Implementation
costs
|
|
0.01
|
|
-
|
|
0.02
|
|
-
|
Non-recurring
professional fees
|
|
-
|
|
-
|
|
0.02
|
|
-
|
Non-cash debt
interest and amortization charges
|
|
0.05
|
|
0.03
|
|
0.12
|
|
0.10
|
Share-based
compensation expense
|
|
0.03
|
|
0.02
|
|
0.09
|
|
0.06
|
Insurance recovery -
business interruption
|
|
-
|
|
-
|
|
(0.01)
|
|
-
|
Write-off of deferred
financing costs
|
|
-
|
|
-
|
|
-
|
|
0.01
|
Non-recurring income
tax adjustments
|
|
-
|
|
-
|
|
-
|
|
(0.08)
|
Earnings (loss) per
diluted share, as adjusted
|
|
$ 0.14
|
|
$ (0.02)
|
|
$ 0.56
|
|
$ 0.37
|
Table 3: Reconciliation of the three and nine months ended
September 30, 2015 and 2014 reported
net loss to adjusted EBITDA:
|
|
Third
Quarter
|
|
Third
Quarter
|
|
YTD September
30,
|
|
YTD September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net loss, as
reported
|
|
$ (4,170)
|
|
$ (8,641)
|
|
$ (4,086)
|
|
$ (1,417)
|
Income tax (benefit)
expense
|
|
(1,340)
|
|
(3,434)
|
|
862
|
|
(4,024)
|
Interest expense,
net
|
|
6,318
|
|
2,575
|
|
12,532
|
|
8,256
|
Depreciation and
amortization
|
|
6,908
|
|
5,042
|
|
18,670
|
|
13,066
|
EBITDA
|
|
7,716
|
|
(4,458)
|
|
27,978
|
|
15,881
|
Impairment
charges
|
|
540
|
|
1,232
|
|
3,155
|
|
4,950
|
Restructuring
charges
|
|
709
|
|
2,164
|
|
3,828
|
|
3,436
|
Business interruption
charges
|
|
-
|
|
3,117
|
|
-
|
|
3,117
|
Executive transition
costs
|
|
469
|
|
-
|
|
1,405
|
|
626
|
Business acquisition
costs
|
|
1,630
|
|
970
|
|
3,302
|
|
2,638
|
Purchase accounting
adjustments
|
|
3,081
|
|
-
|
|
3,081
|
|
-
|
Postretirement
benefit plan settlement gain
|
|
-
|
|
-
|
|
-
|
|
(1,285)
|
ERP Implementation
costs
|
|
467
|
|
-
|
|
765
|
|
-
|
Non-recurring
professional fees
|
|
115
|
|
-
|
|
826
|
|
-
|
Share-based
compensation expense
|
|
1,796
|
|
1,018
|
|
4,816
|
|
2,975
|
Insurance recovery -
business interruption
|
|
-
|
|
-
|
|
(600)
|
|
-
|
Adjusted
EBITDA
|
|
$ 16,523
|
|
$ 4,043
|
|
$ 48,556
|
|
$ 32,338
|