Myriad Genetics Reports Fiscal Second-Quarter 2016 Financial Results
February 02 2016 - 4:05PM
Myriad Genetics, Inc. (NASDAQ:MYGN) today announced financial
results for its fiscal second-quarter 2016, provided an update on
recent business highlights, maintained its fiscal year 2016 revenue
guidance, raised its fiscal year 2016 earnings guidance and
provided fiscal third-quarter 2016 financial guidance.
"We are pleased with the first half of fiscal year 2016 which
has positioned us to deliver upon our financial guidance for the
full year,” said Mark C. Capone, president and chief executive
officer of Myriad. “Our new products are making significant strides
towards broader market adoption and reimbursement on a worldwide
basis. Additionally, we are excited to announce that our companion
diagnostic portfolio has expanded to five tests with the addition
of two new tests that have been incorporated into additional
pharmaceutical company collaborations. We remain on track to
achieve our five-year strategic goals and build Myriad into a
diversified, global, leader in personalized medicine.”
Financial Highlights
- Below are tables summarizing the financial results and revenue
by product class for our fiscal second-quarter 2016:
Revenue |
|
|
|
|
|
|
|
|
|
|
Fiscal Second-Quarter |
|
|
($
in millions) |
|
|
2016 |
|
|
|
|
2015 |
|
|
% Change |
Molecular
diagnostic testing revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer
testing revenue |
$ |
|
166.6 |
|
|
$ |
|
165.0 |
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
Vectra DA testing
revenue |
|
|
11.3 |
|
|
|
|
10.8 |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
Prolaris testing
revenue |
|
|
1.9 |
|
|
|
|
0.4 |
|
|
|
375 |
% |
|
|
|
|
|
|
|
|
|
|
Other testing
revenue |
|
|
2.8 |
|
|
|
|
3.0 |
|
|
|
(7 |
%) |
|
|
|
|
|
|
|
|
|
Total
molecular diagnostic testing revenue |
|
|
182.6 |
|
|
|
|
179.2 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
Pharmaceutical and clinical service revenue |
|
|
10.7 |
|
|
|
|
5.2 |
|
|
|
106 |
% |
|
|
|
|
|
|
|
|
|
Total
Revenue |
$ |
|
193.3 |
|
|
$ |
|
184.4 |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement |
|
|
|
|
|
|
|
|
|
|
Fiscal Second-Quarter |
|
|
($
in millions) |
|
|
2016 |
|
|
|
|
2015 |
|
|
% Change |
Total
Revenue |
$ |
|
193.3 |
|
|
$ |
|
184.4 |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
|
152.7 |
|
|
|
|
146.5 |
|
|
|
4 |
% |
|
Gross Margin |
|
|
79.0 |
% |
|
|
|
79.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
107.5 |
|
|
|
|
110.2 |
|
|
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
45.2 |
|
|
|
|
36.3 |
|
|
|
25 |
% |
|
Operating Margin |
|
|
23.4 |
% |
|
|
|
19.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Operating Income |
|
|
48.4 |
|
|
|
|
43.8 |
|
|
|
11 |
% |
|
Adjusted Operating
Margin |
|
|
25.0 |
% |
|
|
|
23.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
|
30.3 |
|
|
|
|
24.0 |
|
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
Diluted
EPS |
|
|
0.41 |
|
|
|
|
0.32 |
|
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
Adjusted
EPS |
$ |
|
0.45 |
|
|
$ |
|
0.40 |
|
|
|
13 |
% |
Business Highlights
- myRisk® Hereditary Cancer
- Myriad presented an interim analysis of a large clinical
utility study comparing myRisk Hereditary Cancer to
BRACAnalysis® at the San Antonio Breast Cancer
Symposium (SABCS). In the interim analysis, myRisk Hereditary
Cancer increased the number of patients receiving clinically
appropriate risk reduction measures by 61 percent.
- The Company announced today that 61 percent of its hereditary
cancer revenue is now under three-year, non-cancellable, payer
contracts.
- Vectra® DA
- Vectra DA volumes were up 13 percent year-over-year in the
fiscal second-quarter with more than 38,000 tests performed.
- At the American College of Rheumatology Annual Meeting, Myriad
presented multiple studies on the potential ability of Vectra DA to
predict therapy response. One study demonstrated that Vectra
DA predicts response for methotrexate incomplete responders to
DMARDs or biologics. In another study, Vectra DA predicted which
patients could taper their therapy without experiencing
flares.
- During the second quarter, Myriad announced the issuance of the
first patent pertaining to the Vectra DA testing process by the
U.S. Patent and Trademark Office.
- Prolaris®/Urology
- Prolaris sample volume was up 104 percent year-over-year and 26
percent sequentially with over 3,500 tests ordered.
- At the 2016 ASCO Genitourinary Cancers Symposium (ASCO GU),
Myriad presented data on more than 11,000 men with prostate cancer
to evaluate their ability to pursue active surveillance based upon
the Prolaris Combined Score (PCS); 63 percent of the men qualified
for active surveillance based on their PCS, almost doubling the
number of eligible patients when compared to traditional
pathology.
- Myriad also presented its first validation study on the myPlan™
Renal Cancer prognostic test at ASCO GU. When the myPlan score was
combined with pathological stage to provide a combined prognostic
score (CPS), patients with a high CPS had a three-fold increased
risk of recurrence compared to patients with a low
score.
- Companion Diagnostics
- At SABCS, Myriad presented multiple studies demonstrating the
ability of the myChoice® HRD test to predict
response to DNA damaging agents. In a pooled analysis of five
statistically significant studies, patients with a positive
myChoice HRD score had a three-fold increase in pathological
complete response when compared to those patients with a negative
score.
- Today, Myriad is announcing the addition of two new companion
diagnostics. The first is a tumor sequencing panel that contains
the full sequencing of 80 clinically actionable genes and is
customizable for our pharmaceutical partners to support clinical
trials. The second new companion diagnostic is a proprietary assay
that evaluates the functionality of the immune pathway and predicts
response to immunotherapy. The Company already has signed
undisclosed research collaborations with major pharmaceutical
partners on each of these new products to be evaluated in
combination with myChoice HRD.
- International
- International revenues were up 29 percent sequentially in the
second quarter and accounted for four and a half percent of total
revenue in the quarter.
- At SABCS, Myriad presented a study that evaluated 928 patients
in the TransATAC cohort that compared the performance of
EndoPredict® to the widely-used first generation
breast cancer prognostic test. In this study, EndoPredict more
accurately predicted 10-year distant metastases when compared to
the first-generation prognostic test.
- During the fiscal second-quarter, Myriad won a competitive
tender for EndoPredict in France that is expected to generate
revenue during calendar year 2016. Additionally, Helsana, the
largest insurance provider in Switzerland, announced a favorable
coverage decision for Prolaris.
- Share Repurchase
- During the quarter, the Company repurchased approximately 0.6
million shares, or $25 million, of common stock under our share
repurchase program and ended the quarter with approximately $92
million remaining on our current share repurchase authorization.
Fiscal Third-Quarter and Fiscal Full-Year 2016 Financial
GuidanceBelow is a table summarizing Myriad’s fiscal year
2016 and fiscal third-quarter 2016 financial guidance:
|
Revenue |
|
Adjusted Earnings Per Share |
|
GAAP Diluted Earnings Per Share |
Fiscal Year 2016 |
$750-$770 million |
|
$1.63-$1.68 |
|
$1.48-$1.53 |
|
|
|
|
|
|
Fiscal
Third-Quarter 2016 |
$183-$185 million |
|
$0.37-$0.39 |
|
$0.33-$0.35 |
The Company is maintaining its
fiscal full-year revenue guidance of $750 to $770 million and
raising its adjusted earnings per share guidance from the previous
range of $1.60 to $1.65 to $1.63 to $1.68. Additionally, Myriad is
issuing fiscal third-quarter 2016 financial guidance with revenues
of $183 to $185 million and adjusted earnings per share of $0.37 to
$0.39.
These projections are forward-looking statements and are subject
to the risks summarized in the safe harbor statement at the end of
this press release. The Company will provide further details on its
business outlook during its conference call today to discuss the
fiscal second-quarter financial results and fiscal third-quarter
and fiscal full-year 2016 financial guidance.
Conference Call and WebcastA conference call
will be held today, Tuesday, February 2, 2016, at 4:30 p.m. EST to
discuss Myriad’s financial results for the fiscal second-quarter,
business developments and financial guidance. The dial-in
number for domestic callers is (800) 676-1873. International
callers may dial (303) 223-4378. All callers will be asked to
reference reservation number 21802448. An archived replay of
the call will be available for seven days by dialing (800) 633-8284
and entering the reservation number above. The conference
call along with a slide presentation will also will be available
through a live webcast at www.myriad.com.
About Myriad GeneticsMyriad Genetics Inc., is a
leading personalized medicine company dedicated to being a trusted
advisor transforming patient lives worldwide with pioneering
molecular diagnostics. Myriad discovers and commercializes
molecular diagnostic tests that: determine the risk of developing
disease, accurately diagnose disease, assess the risk of disease
progression, and guide treatment decisions across six major medical
specialties where molecular diagnostics can significantly improve
patient care and lower healthcare costs. Myriad is focused on
three strategic imperatives: transitioning and expanding its
hereditary cancer testing markets, diversifying its product
portfolio through the introduction of new products and increasing
the revenue contribution from international markets. For more
information on how Myriad is making a difference, please visit the
Company's website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris
AP, myPath, myRisk, myRisk Hereditary Cancer, myChoice, myPlan,
BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice HRD, Vectra and
Prolaris are trademarks or registered trademarks of Myriad
Genetics, Inc. or its wholly owned subsidiaries in the United
States and foreign countries. MYGN-F, MYGN-G
MYRIAD GENETICS, INC. AND
SUBSIDIARIES |
CONSOLIDATED INCOME STATEMENTS
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
|
|
|
|
|
|
|
|
|
Molecular diagnostic
testing |
|
$ |
|
182.6 |
|
$ |
179.2 |
$ |
|
354.5 |
|
$ |
343.6 |
Pharmaceutical and
clinical services |
|
|
|
10.7 |
|
|
5.2 |
|
|
22.3 |
|
|
9.6 |
Total revenue |
|
|
|
193.3 |
|
|
184.4 |
|
|
376.8 |
|
|
353.2 |
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Cost of molecular diagnostic
testing |
|
|
|
34.1 |
|
|
35.1 |
|
|
65.0 |
|
|
67.8 |
Cost of pharmaceutical and clinical
services |
|
|
|
6.5 |
|
|
2.8 |
|
|
12.1 |
|
|
4.9 |
Research and development
expense |
|
|
|
16.7 |
|
|
17.5 |
|
|
33.9 |
|
|
40.1 |
Selling, general, and
administrative expense |
|
|
|
90.8 |
|
|
92.7 |
|
|
177.3 |
|
|
178.1 |
Total costs and expenses |
|
|
|
148.1 |
|
|
148.1 |
|
|
288.3 |
|
|
290.9 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
45.2 |
|
|
36.3 |
|
|
88.5 |
|
|
62.3 |
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
0.1 |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
Other |
|
|
|
(0.3 |
) |
|
1.5 |
|
|
(0.1 |
) |
|
1.4 |
Total other income (expense) |
|
|
|
(0.2 |
) |
|
1.6 |
|
|
0.1 |
|
|
1.5 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
|
45.0 |
|
|
37.9 |
|
|
88.6 |
|
|
63.8 |
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
|
|
14.7 |
|
|
13.9 |
|
|
31.6 |
|
|
23.8 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
|
30.3 |
|
$ |
24.0 |
$ |
|
57.0 |
|
$ |
40.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
0.43 |
|
$ |
0.33 |
$ |
|
0.82 |
|
$ |
0.55 |
Diluted |
|
$ |
|
0.41 |
|
$ |
0.32 |
$ |
|
0.78 |
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
70.5 |
|
|
72.5 |
|
|
69.6 |
|
|
72.6 |
Diluted |
|
|
|
73.8 |
|
|
75.4 |
|
|
73.1 |
|
|
75.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
Dec. 31, 2015 |
|
Jun. 30, 2015 |
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
|
134.7 |
|
$ |
|
64.1 |
|
|
|
|
|
Marketable investment
securities |
|
|
|
84.6 |
|
|
|
80.7 |
|
|
|
|
|
Prepaid expenses |
|
|
|
|
9.7 |
|
|
|
12.5 |
|
|
|
|
|
Inventory |
|
|
|
|
29.1 |
|
|
|
25.1 |
|
|
|
|
|
Trade accounts
receivable, less allowance for doubtful |
|
|
|
|
|
|
|
|
accounts of $6.2
December 31, 2015 and $7.6 June 30, 2015 |
|
|
84.3 |
|
|
|
85.8 |
|
|
|
|
|
Deferred taxes |
|
|
|
|
— |
|
|
|
13.5 |
|
|
|
|
|
Prepaid taxes |
|
|
|
|
28.0 |
|
|
|
— |
|
|
|
|
|
Other receivables |
|
|
|
|
5.1 |
|
|
|
1.9 |
|
|
|
|
|
Total current assets |
|
|
|
|
375.5 |
|
|
|
283.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
|
|
61.7 |
|
|
|
67.2 |
|
|
|
|
|
Long-term
marketable investment securities |
|
|
|
66.2 |
|
|
|
40.6 |
|
|
|
|
|
Intangibles, net |
|
|
|
|
186.3 |
|
|
|
192.6 |
|
|
|
|
|
Goodwill |
|
|
|
|
177.0 |
|
|
|
177.2 |
|
|
|
|
|
Other assets |
|
|
|
|
5.0 |
|
|
|
5.0 |
|
|
|
|
|
Total assets |
|
|
$ |
|
871.7 |
|
$ |
|
766.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
|
16.5 |
|
$ |
|
21.1 |
|
|
|
|
|
Accrued liabilities |
|
|
|
|
47.9 |
|
|
|
46.1 |
|
|
|
|
|
Deferred revenue |
|
|
|
|
1.5 |
|
|
|
1.5 |
|
|
|
|
|
Total current liabilities |
|
|
|
|
65.9 |
|
|
|
68.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrecognized tax
benefits |
|
|
|
|
27.9 |
|
|
|
26.4 |
|
|
|
|
|
Other long-term
liabilities |
|
|
|
|
6.8 |
|
|
|
8.8 |
|
|
|
|
|
Long-term deferred
taxes |
|
|
|
|
0.3 |
|
|
|
0.2 |
|
|
|
|
|
Total liabilities |
|
|
|
|
100.9 |
|
|
|
104.1 |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
|
|
Common stock, 71.6 and
68.9 shares outstanding at |
|
|
|
|
|
|
|
|
December 31, 2015 and
June 30, 2015 respectively |
|
|
0.7 |
|
|
|
0.7 |
|
|
|
|
|
Additional paid-in capital |
|
|
|
|
847.8 |
|
|
|
745.4 |
|
|
|
|
|
Accumulated other
comprehensive loss |
|
|
|
(9.1 |
) |
|
|
(7.0 |
) |
|
|
|
|
Accumulated deficit |
|
|
|
|
(68.6 |
) |
|
|
(77.0 |
) |
|
|
|
|
Total stockholders' equity |
|
|
|
|
770.8 |
|
|
|
662.1 |
|
|
|
|
|
Total liabilities and
stockholders' equity |
|
$ |
|
871.7 |
|
$ |
|
766.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash Flows
(Unaudited) |
|
|
|
|
|
|
|
|
|
(in
millions) |
|
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
|
Cash flows
from operating activities: |
|
|
|
|
|
|
Net
income |
|
$ |
|
57.0 |
|
$ |
|
40.0 |
|
|
|
Adjustments to
reconcile net income to net cash provided by |
|
|
|
|
|
|
operating
activities: |
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
13.5 |
|
|
|
12.0 |
|
|
|
Gain on disposition of
assets |
|
|
(0.4 |
) |
|
|
- |
|
|
|
Share-based
compensation expense |
|
|
16.3 |
|
|
|
19.0 |
|
|
|
Bad debt expense |
|
|
|
14.5 |
|
|
|
14.0 |
|
|
|
Deferred income
taxes |
|
|
29.8 |
|
|
|
1.9 |
|
|
|
Unrecognized tax
benefits |
|
|
1.5 |
|
|
|
1.1 |
|
|
|
Excess tax benefit from
share-based compensation |
|
|
(16.1 |
) |
|
|
(2.6 |
) |
|
|
Gain on remeasurement
of foreign currency |
|
|
- |
|
|
|
(0.5 |
) |
|
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
Prepaid expenses |
|
|
|
2.8 |
|
|
|
(0.8 |
) |
|
|
Trade accounts
receivable |
|
|
(11.1 |
) |
|
|
(13.9 |
) |
|
|
Other receivables |
|
|
|
(5.3 |
) |
|
|
(1.6 |
) |
|
|
Inventory |
|
|
|
|
(4.1 |
) |
|
|
3.7 |
|
|
|
Prepaid taxes |
|
|
|
(28.0 |
) |
|
|
8.0 |
|
|
|
Accounts payable |
|
|
|
(4.1 |
) |
|
|
(6.2 |
) |
|
|
Accrued
liabilities |
|
|
|
(0.5 |
) |
|
|
(15.2 |
) |
|
|
Deferred revenue |
|
|
|
- |
|
|
|
0.7 |
|
|
|
Net cash
provided by operating activities |
|
|
65.8 |
|
|
|
59.6 |
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
Capital expenditures
for equipment and leasehold improvements |
|
|
(2.1 |
) |
|
|
(17.5 |
) |
|
|
Restricted cash |
|
|
|
- |
|
|
|
(21.6 |
) |
|
|
Purchases of marketable
investment securities |
|
|
(100.7 |
) |
|
|
(22.6 |
) |
|
|
Proceeds from
maturities and sales marketable investment securities |
|
|
71.3 |
|
|
|
80.5 |
|
|
|
Net cash
provided by (used in) investing activities |
|
|
(31.5 |
) |
|
|
18.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
|
|
Net proceeds from
common stock issued under |
|
|
|
|
|
|
share-based
compensation plans |
|
|
84.9 |
|
|
|
20.2 |
|
|
|
Excess tax benefit from
share-based compensation |
|
|
16.1 |
|
|
|
2.6 |
|
|
|
Repurchase and
retirement of common stock |
|
|
(62.9 |
) |
|
|
(103.9 |
) |
|
|
Net cash
provided by (used in) financing activities |
|
|
38.1 |
|
|
|
(81.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of
Foreign exchange rates on cash and cash equivalents |
|
|
(1.8 |
) |
|
|
(2.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
70.6 |
|
|
|
(5.1 |
) |
|
|
Cash and
cash equivalents at beginning of year |
|
|
64.1 |
|
|
|
64.8 |
|
|
|
Cash and
cash equivalents at end of period |
$ |
|
134.7 |
|
$ |
|
59.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Safe Harbor Statement This press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements relating to the strength of our first half of fiscal
year 2016 and our position and ability to deliver upon our
financial guidance for the full year; the strides made by our new
products towards broader market adoption and reimbursement on a
worldwide basis; the expansion of our companion diagnostic
portfolio, with the addition of two new tests, and expansion of our
pharmaceutical company collaborations; remaining on track to
achieve our five year strategic goals; the expectation of revenue
growth in France for EndoPredict testing in calendar year 2016; the
Company’s fiscal third-quarter 2016 and fiscal full-year 2016
financial guidance under the caption “Fiscal Third-Quarter and
Fiscal Full-Year 2016 Financial Guidance”; and the Company’s
strategic directives under the caption “About Myriad Genetics.”
These “forward-looking statements” are based on management’s
current expectations of future events and are subject to a number
of risks and uncertainties that could cause actual results to
differ materially and adversely from those described or implied in
the forward-looking statements. These risks include, but are not
limited to: the risk that sales and profit margins of our existing
molecular diagnostic tests and pharmaceutical and clinical services
may decline or will not continue to increase at historical rates;
risks related to our ability to transition from our existing
product portfolio to our new tests; risks related to changes in the
governmental or private insurers’ reimbursement levels for our
tests or our ability to obtain reimbursement for our new tests at
comparable levels to our existing tests; risks related to increased
competition and the development of new competing tests and
services; the risk that we may be unable to develop or achieve
commercial success for additional molecular diagnostic tests and
pharmaceutical and clinical services in a timely manner, or at all;
the risk that we may not successfully develop new markets for our
molecular diagnostic tests and pharmaceutical and clinical
services, including our ability to successfully generate revenue
outside the United States; the risk that licenses to the technology
underlying our molecular diagnostic tests and pharmaceutical and
clinical services tests and any future tests are terminated or
cannot be maintained on satisfactory terms; risks related to delays
or other problems with operating our laboratory testing facilities;
risks related to public concern over our genetic testing in general
or our tests in particular; risks related to regulatory
requirements or enforcement in the United States and foreign
countries and changes in the structure of the healthcare system or
healthcare payment systems; risks related to our ability to obtain
new corporate collaborations or licenses and acquire new
technologies or businesses on satisfactory terms, if at all; risks
related to our ability to successfully integrate and derive
benefits from any technologies or businesses that we license or
acquire, including but not limited to our acquisition of a
healthcare clinic in Germany; risks related to our projections
about the potential market opportunity for our products; the risk
that we or our licensors may be unable to protect or that third
parties will infringe the proprietary technologies underlying our
tests; the risk of patent-infringement claims or challenges to the
validity of our patents; risks related to changes in intellectual
property laws covering our molecular diagnostic tests and
pharmaceutical and clinical services and patents or enforcement in
the United States and foreign countries, such as the Supreme Court
decision in the lawsuit brought against us by the Association for
Molecular Pathology et al; risks of new, changing and competitive
technologies and regulations in the United States and
internationally; and other factors discussed under the heading
“Risk Factors” contained in Item 1A of our Annual report on Form
10-K for the fiscal year ended June 30, 2015, which has been filed
with the Securities and Exchange Commission, as well as any updates
to those risk factors filed from time to time in our Quarterly
Reports on Form 10-Q or Current Reports on Form 8-K.
Statement regarding use of non-GAAP financial
measures
In this press release, the Company’s financial results and
financial guidance are provided in accordance with accounting
principles generally accepted in the United States (GAAP) and using
certain non-GAAP financial measures. Management believes that
presentation of operating results using non-GAAP financial measures
provides useful supplemental information to investors and
facilitates the analysis of the Company’s core operating results
and comparison of operating results across reporting periods.
Management also uses non-GAAP financial measures to establish
budgets and to manage the Company’s business. A reconciliation of
the GAAP financial results to non-GAAP financial results is
included in the attached financial statements.
Following is a description of the adjustments made to GAAP
financial measures:
- Acquisition - amortization of intangible assets: Represents
recurring amortization charges resulting from the acquisition of
intangible assets, including developed technology and database
rights.
- Severance – executive severance: Represents one-time severance
expenses associated with the departure of executive officers of
Myriad Genetics, Inc.
The Company encourages investors to carefully consider its
results under GAAP, as well as its supplemental non-GAAP
information and the reconciliation between these presentations, to
more fully understand its business. Non-GAAP financial results are
reported in addition to, and not as a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
Reconciliation of GAAP to Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
for the Three and Six Months ended December 31, 2015
and 2014 |
|
|
|
|
|
|
|
|
|
(Unaudited data in millions, except per share amount) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Cost of molecular diagnostic testing |
$ |
34.1 |
|
|
$ |
35.1 |
|
|
$ |
65.0 |
|
|
$ |
67.8 |
|
|
|
|
GAAP Cost of pharmaceutical and clinical
services |
|
6.5 |
|
|
|
2.8 |
|
|
|
12.1 |
|
|
|
4.9 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
Non-GAAP COGS |
$ |
40.6 |
|
|
$ |
37.9 |
|
|
$ |
77.1 |
|
|
$ |
72.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
79 |
% |
|
|
79 |
% |
|
|
80 |
% |
|
|
79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and Development |
$ |
16.7 |
|
|
$ |
17.5 |
|
|
$ |
33.9 |
|
|
$ |
40.1 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
|
Non-GAAP R&D |
$ |
16.6 |
|
|
$ |
17.4 |
|
|
$ |
33.7 |
|
|
$ |
39.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling, General and Administrative |
$ |
90.8 |
|
|
$ |
92.7 |
|
|
$ |
177.3 |
|
|
$ |
178.1 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
(4.3 |
) |
|
|
- |
|
|
|
(4.3 |
) |
|
|
|
Acquisition - amortization of
intangible assets |
|
(3.1 |
) |
|
|
(3.1 |
) |
|
|
(6.2 |
) |
|
|
(6.1 |
) |
|
|
|
Non-GAAP SG&A |
$ |
87.7 |
|
|
$ |
85.3 |
|
|
$ |
171.1 |
|
|
$ |
167.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income |
$ |
45.2 |
|
|
$ |
36.3 |
|
|
$ |
88.5 |
|
|
$ |
62.3 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
4.3 |
|
|
|
- |
|
|
|
4.3 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
3.2 |
|
|
|
3.2 |
|
|
|
6.4 |
|
|
|
6.3 |
|
|
|
|
Non-GAAP Operating Income |
$ |
48.4 |
|
|
$ |
43.8 |
|
|
$ |
94.9 |
|
|
$ |
72.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Margin |
|
25 |
% |
|
|
24 |
% |
|
|
25 |
% |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income |
$ |
30.3 |
|
|
$ |
24.0 |
|
|
$ |
57.0 |
|
|
$ |
40.0 |
|
|
|
|
Severance - executive
severance |
|
- |
|
|
|
4.3 |
|
|
|
- |
|
|
|
4.3 |
|
|
|
|
Acquisition - amortization of
intangible assets |
|
3.2 |
|
|
|
3.2 |
|
|
|
6.4 |
|
|
|
6.3 |
|
|
|
|
Tax expense associated with
non-GAAP adjustments |
|
- |
|
|
|
(1.6 |
) |
|
|
- |
|
|
|
(1.6 |
) |
|
|
|
Non-GAAP Net Income |
$ |
33.5 |
|
|
$ |
29.9 |
|
|
$ |
63.4 |
|
|
$ |
49.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS |
$ |
0.41 |
|
|
$ |
0.32 |
|
|
$ |
0.78 |
|
|
$ |
0.53 |
|
|
|
|
Non-GAAP Diluted EPS |
$ |
0.45 |
|
|
$ |
0.40 |
|
|
$ |
0.87 |
|
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
shares outstanding |
|
73.8 |
|
|
|
75.4 |
|
|
|
73.1 |
|
|
|
75.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow Reconciliation |
|
|
|
|
|
|
|
|
|
|
(Unaudited
data in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
Dec. 31, 2015 |
|
Dec. 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cash flow from operations |
$ |
40.9 |
|
|
$ |
52.6 |
|
|
$ |
65.8 |
|
|
$ |
59.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(1.1 |
) |
|
|
(5.9 |
) |
|
|
(2.1 |
) |
|
|
(17.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
$ |
39.8 |
|
|
$ |
46.7 |
|
|
$ |
63.7 |
|
|
$ |
42.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP for Fiscal Year 2016
and Fiscal Second-Quarter 2016 Financial Guidance
The Company’s future performance and financial results are
subject to risks and uncertainties, and actual results could differ
materially from guidance set forth below. Some of the factors that
could affect the Company’s financial results are stated in the safe
harbor statement of this press release. More information on
potential factors that could affect the Company’s financial results
are included under the heading "Risk Factors" contained in Item 1A
in the Company’s most recent Annual Report on Form 10-K filed with
the Securities and Exchange Commission, as well as any updates to
those risk factors filed from time to time in the Company’s
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
|
|
Fiscal Year 2016 |
Diluted net
income per share |
|
GAAP diluted net income
per share |
$1.48 -
$1.53 |
Acquisition -
amortization of intangible assets |
0.15 |
Non-GAAP
diluted net income per share |
$1.63 - $1.68 |
|
|
|
|
|
|
|
|
Fiscal Third-Quarter 2016 |
Diluted net
income per share |
|
GAAP diluted net income
per share |
$0.33 -
$0.35 |
Acquisition -
amortization of intangible assets |
0.04 |
Non-GAAP
diluted net income per share |
$0.37 - $0.39 |
Media Contact: Ron Rogers
(801) 584-3065
rrogers@myriad.com
Investor Contact: Scott Gleason
(801) 584-1143
sgleason@myriad.com
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