ALBANY, N.Y., Nov. 8, 2016 /PRNewswire/ -- AMRI (NASDAQ:
AMRI) today reported financial and operating results for the third
quarter ended September 30, 2016 and
reiterated its outlook for 2016.
Highlights:
- Contract revenue of $151.7
million, up 50% from the third quarter 2015
- Reported contract margins of 19%; non-GAAP contract margins of
30%
- Reported basic and diluted EPS $(0.57); non-GAAP diluted EPS of $0.17
- Recurring royalty revenue of $1.1
million
- Reported net loss of $(23.4)
million; non-GAAP net income of $7.2
million
- Adjusted EBITDA of $25.5 million,
up 55% from the third quarter 2015
- Reaffirms 2016 outlook
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Non-GAAP contract
margins, non-GAAP net income, non-GAAP diluted EPS and adjusted
EBITDA are non-GAAP financial measures. For a discussion of these
measures and reconciliations to U.S. GAAP measures, see "Non-GAAP
Financial Measures" and Tables 1, 2 and 3.
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"We delivered another solid quarter, highlighted by strong
organic growth in Discovery and Development Services, strong
operational effectiveness in our Drug Product business, and with
the closing of the Euticals acquisition, a significantly expanded
API business," said William S.
Marth, AMRI's president and chief executive officer.
Strategically, our acquisitions have helped us establish a vast and
responsive global development and manufacturing network, an
extensive portfolio of unique APIs that have high barriers to
entry, and expanded technical capabilities in areas such as sterile
API, fermentation and monobactams that complement our organic
business.
Additionally, through organic growth initiatives such as the
Compound Library Consortium, our expansion into extractable and
leachables testing and building additional sterile capacity through
innovative alliances, we have continued to enhance our ability to
fulfill the complex needs of pharmaceutical and biotechnology
companies across all areas of the drug discovery, development and
commercialization spectrum.
We are confident in our outlook for the remainder of 2016 and
believe our strategy to acquire and organically grow in
technologically challenging businesses is strengthening and
positioning AMRI to be a premier provider of services to the
pharmaceutical industry and positions us well for long-term
growth."
Third Quarter 2016 Results
Total revenue for the third quarter of 2016 was $152.7 million, an increase of 46%, compared to
total revenue of $104.6 million
reported in the third quarter of 2015.
Total contract revenue for the third quarter of 2016 was
$151.7 million, an increase of 50%,
compared to $101.4 million reported
in the third quarter of 2015, due primarily to the acquisition of
Euticals, which closed on July 11,
2016. Contract margins reported under GAAP were 19% in the
third quarter of 2016, compared with 21% for the third quarter of
2015. Non-GAAP contract margins were 30 % for the third quarter of
2016, compared with 25% for the third quarter of 2015. The
improvement in non-GAAP contract margins was driven largely by
growth within our Discovery and Development Services (DDS)
business, and higher operational effectiveness and a favorable
product mix in our Drug Product (DP) business.
Recurring royalty revenue in the third quarter of 2016 was
$1.1 million, down from $3.2 million in the third quarter of 2015,
reflecting a change in estimate of the second quarter royalties
receivable related to Allergan's sales of mixed amphetamine
salts.
Research and development expense in the third quarter of 2016
was $4.6 million, up from
$1.9 million in the third quarter
2015, reflecting increased investment in collaboration agreements
and our Active Pharmaceutical Ingredients (API) portfolio.
Reported net loss was $(23.4)
million, or $(0.57) per basic
and diluted share, in the third quarter of 2016, compared to a
reported net loss of $(4.2) million,
or $(0.12) per basic and diluted
share in the third quarter of 2015. Non-GAAP net income in the
third quarter of 2016 was $7.2
million or non-GAAP earnings per diluted share of
$0.17, compared to non-GAAP net
income of $5.1 million or non-GAAP
earnings per diluted share of $0.14
for the third quarter of 2015.
Adjusted EBITDA in the third quarter of 2016 was $25.5 million, an increase of $9.0 million or 55% compared to the third quarter
2015.
For a reconciliation of non-GAAP financial measures to U.S. GAAP
financial measures for the 2016 and 2015 reporting periods, please
see Tables 1, 2 and 3 at the end of this press release.
Year-to-Date Results
Total revenue for the nine-month period ended September 30, 2016 was $379.1 million, an increase of 37% compared to
total revenue of $275.9 million
reported for the nine-month period ended September 30, 2015.
Contract revenue for the nine-month period ended September 30, 2016 was $371.0 million, an increase of 42% compared to
$261.7 million reported for the
nine-month period ended September 30,
2015, due primarily to the acquisition of Euticals and
Gadea. Contract margins reported under GAAP were 23% for the
nine-month period ended September 30,
2016, compared with 22% for the nine-month period ended
September 30, 2015. Non-GAAP contract
margins were 30% for the nine-month period ended September 30, 2016, compared with 25% for the
nine-month period ended September 30,
2015.
Recurring royalty revenue for the nine-month period ended
September 30, 2016 was $8.2 million, a decrease of 43% from $14.2 million for the nine-month period ended
September 30, 2016 due to the
expiration of Allegra (fexofenadine) royalties in the second
quarter of 2015. Recurring royalty revenue for the nine-month
period ended September 30, 2016
includes $5.8 million from the net
sales of mixed amphetamine salts sold by Allergan and royalties
from an API sourced from our business in Spain.
Research and development expense for the nine month period ended
September 30, 2016 was $11.3 million, up from $2.8 million for the nine-month period ended
September 30, 2015, due to increased
investment in collaboration agreements and our API portfolio.
Reported net loss was $(54.8)
million, or $(1.48) per basic
and diluted share for the nine-month period ended September 30, 2016, compared to a reported net
loss of $(4.1) million, or
$(0.12) per basic and diluted share
for the nine-month period ended September
30, 2015. Non-GAAP net income for the nine-month period
ended September 30, 2016 was
$22.3 million or non-GAAP earnings
per diluted share of $0.59, compared
to non-GAAP net income of $18.9
million or non-GAAP earnings per diluted share of
$0.56 for the nine-month period ended
September 30, 2015.
Adjusted EBITDA for the nine-month period ended September 30, 2016 was $65.4 million, an increase of $16.8 million or 35% compared to the nine-month
period ended September 30, 2015.
Segment Results
Active
Pharmaceutical Ingredients (API)
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Three Months
Ended
|
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Nine Months
Ended
|
|
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September
30,
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September
30,
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(Unaudited; $ in
thousands)
|
|
2016
|
|
2015
|
|
2016
|
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2015
|
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API Contract
Revenue
|
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$
89,568
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|
$
56,158
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$
209,717
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$
134,003
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API Royalty
Revenue
|
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1,057
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|
3,294
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|
8,152
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|
8,697
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API Total Revenue
|
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$
90,625
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|
$
59,452
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$
217,869
|
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$
142,700
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Cost of Contract
Revenue
|
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$
78,034
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$
43,410
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$
165,234
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$
100,427
|
|
|
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Gross Profit,
excluding royalties
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$
11,534
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$
12,748
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$
44,483
|
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$
33,576
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Gross Profit,
including royalties
|
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$
12,591
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$
16,042
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$
52,635
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$
42,273
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Gross Margin,
excluding royalties
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12.9%
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22.7%
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21.2%
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25.1%
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Gross Margin,
including royalties
|
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13.9%
|
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27.0%
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24.2%
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29.6%
|
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Non-GAAP Gross
Profit, excluding royalties (1)
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$
25,338
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$
16,245
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$
65,301
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$
37,463
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Non-GAAP Gross
Margin, excluding royalties (1)
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28.3%
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28.9%
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31.1%
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28.0%
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|
|
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Non-GAAP Gross
Profit, including royalties (1)
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$
26,395
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$
19,539
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$
73,453
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$
46,160
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Non-GAAP Gross
Margin, including royalties (1)
|
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29.1%
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32.9%
|
|
33.7%
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|
32.3%
|
|
|
|
|
|
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(1) Refer to Table 1
included in this release for the reconciliation of U.S. GAAP
contract gross profit and contract gross margin to non-GAAP
contract gross profit and
non-GAAP contract gross margin as a percentage of contract
revenue.
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API contract revenue for the third quarter of 2016 increased 59%
compared to the third quarter of 2015, primarily due to
$40.2 million of incremental revenue
from the acquisition of Euticals, partially offset by lower organic
revenue, associated with the timing of product transfers from the
Holywell, UK site closure.
API contract margin excluding royalties, determined under GAAP
for the third quarter of 2016 decreased 10 percentage points
compared to the third quarter of 2015, inclusive of the impact of
acquisition accounting associated with Euticals. API non-GAAP
contract margin excluding royalties for the third quarter of 2016
decreased slightly from 29% in the third quarter of 2015 to 28% in
the third quarter of 2016, reflecting the margins realized on
Euticals' revenue.
API royalty revenue in the third quarter of 2016 declined
$2.2 million, reflecting a change in
estimate of the second quarter royalties related to Allergan's
sales of mixed amphetamine salts.
For the nine-month period ended September
30, 2016, API contract revenue increased $75.7 million or 57%, due primarily to
$51.4 million and $40.2 million of incremental revenue from the
acquisitions of Gadea Pharmaceuticals and Euticals respectively,
partially offset by lower organic revenue associated with the
timing of product transfers from the Holywell, UK site closure.
API contract margin excluding royalties determined under GAAP
for the nine-month period ended September
30, 2016 decreased 4 percentage points compared to the
nine-month period ended September 30,
2015, inclusive of the impact of acquisition accounting
adjustments associated with the acquisitions of Gadea
Pharmaceuticals and Euticals. API non-GAAP contract margin
excluding royalties for the nine-month period ended September 30, 2016 increased 3 percentage points
compared to the nine-month period ended September 30, 2015, driven by the margins
realized on Gadea Pharmaceuticals' revenues.
Drug Discovery
Services (DDS)
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Three Months
Ended
|
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Nine Months
Ended
|
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September
30,
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September
30,
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(Unaudited; $ in
thousands)
|
|
2016
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2015
|
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2016
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2015
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DDS Contract Revenue
(1)
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$
28,465
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$
21,521
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$
77,488
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$
60,733
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Cost of Contract
Revenue (1)
|
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18,212
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|
15,551
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|
53,745
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|
45,136
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Contract Gross
Profit
|
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$
10,253
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|
$
5,970
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|
$
23,743
|
|
$
15,597
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Contract Gross
Margin
|
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36.0%
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27.7%
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30.6%
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25.7%
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|
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Non-GAAP Contract
Gross Profit (2)
|
$
10,844
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|
$
6,408
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$
25,434
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$
16,759
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Non-GAAP Contract
Gross Margin(2)
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38.1%
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29.8%
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|
32.8%
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27.6%
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(1) A portion of the
2015 amounts were reclassified from DDS to DP to
better align business
activities within our reporting segments.
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(2) Refer to Table 1
included in this release for the reconciliation of U.S.
GAAP contract gross profit and contract gross margin to
non-GAAP
contract gross profit and non-GAAP contract gross margin as a
percentage
of contract revenue.
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DDS contract revenue for the third quarter of 2016 increased 32%
compared to the third quarter of 2015, due primarily to incremental
revenue of $4.3 million from the
acquisitions of Whitehouse Labs and
Euticals, and organic growth in the underlying
business.
DDS contract margin determined under GAAP increased 8 percentage
points in the third quarter of 2016 as compared to the third
quarter of 2015. DDS non-GAAP contract margin increased 8
percentage points for the third quarter of 2016 as compared to the
third quarter of 2015, driven by the margins realized on Whitehouse
Laboratories' revenue and greater efficiencies in discovery
services.
For the first nine months of 2016, DDS contract revenue
increased 28%, due primarily to an increase in analytical services
revenue, including $9.4 million of
incremental revenue from the acquisition of Whitehouse
Laboratories, and organic growth in discovery services.
DDS contract margin determined under GAAP for the nine-month
period ended September 30, 2016
increased 5 percentage points compared with the nine-month period
ended September 30, 2015. DDS
non-GAAP contract margin for the nine-month period ended
September 30, 2016 increased 5
percentage points from the nine-month period ended September 30, 2015, driven by the margins
realized on Whitehouse Laboratories' revenues and operational
efficiencies.
Drug Product
(DP)
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Three Months
Ended
|
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Nine Months
Ended
|
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September
30,
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September
30,
|
(Unaudited; $ in
thousands)
|
|
2016
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2015
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2016
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2015
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DP Contract Revenue
(1)
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$
24,547
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$
23,669
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$
74,670
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$
66,970
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Cost of Contract
Revenue (1)
|
|
17,881
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|
21,243
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|
56,725
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|
57,448
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Contract Gross
Profit
|
|
$
6,666
|
|
$
2,426
|
|
$
17,945
|
|
$
9,522
|
Contract Gross
Margin
|
|
27.2%
|
|
10.2%
|
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24.0%
|
|
14.2%
|
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|
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Non-GAAP Contract
Gross Profit (2)
|
$
6,966
|
|
$
2,402
|
|
$
18,802
|
|
$
10,323
|
Non-GAAP Contract
Gross Margin (2)
|
28.4%
|
|
10.1%
|
|
25.2%
|
|
15.4%
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(1) A portion of the
2015 amounts were reclassified from DDS to DP to
better align business activities within our reporting
segments.
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(2) Refer to Table 1
included in this release for the reconciliation of U.S.
GAAP contract gross profit and contract gross margin to
non-GAAP
contract gross profit and non-GAAP contract gross margin as a
percentage
of contract revenue.
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|
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DP contract revenue for the third quarter of 2016 increased 4%
compared to the third quarter 2015, primarily due to organic
growth.
DP GAAP contract margin for the third quarter 2016 increased 17
percentage points compared to the third quarter of 2015. DP
non-GAAP contract margin for the third quarter of 2016 increased 18
percentage points compared to the third quarter of 2015, primarily
due to strong operational effectiveness at our Albuquerque, N.M. commercial manufacturing
facility.
DP contract revenue for the nine-month period ended September 30, 2016 increased 11% compared to the
nine-month period ended September 30,
2015, primarily due to the addition of Gadea
Pharmaceuticals' and organic revenue growth.
DP contract margin determined under GAAP for the nine-month
period ended September 30, 2016
increased 10 percentage points compared to the nine-month period
ended September 30, 2015. DP non-GAAP
contract margin for the nine-month period ended September 30, 2016 increased 10 percentage points
compared to the nine-month period ended September 30, 2015, driven by enhanced operating
efficiencies at our Albuquerque,
N.M. commercial manufacturing facility.
Fine Chemicals
(FC)
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|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(Unaudited; $ in
thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
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FC Contract
Revenue
|
|
$
9,101
|
|
$
-
|
|
$
9,101
|
|
$
-
|
Cost of Contract
Revenue
|
|
9,359
|
|
-
|
|
9,359
|
|
-
|
Contract Gross
Profit
|
|
$
(258)
|
|
-
|
|
$
(258)
|
|
-
|
Contract Gross
Margin
|
|
-2.8%
|
|
-
|
|
-2.8%
|
|
-
|
|
|
|
|
|
|
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Non-GAAP Contract
Gross Profit (1)
|
$
2,386
|
|
-
|
|
$
2,386
|
|
-
|
Non-GAAP Contract
Gross Margin (1)
|
26.2%
|
|
-
|
|
26.2%
|
|
-
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 1
included in this release for the reconciliation of U.S. GAAP
contract gross
profit and contract gross margin to non-GAAP contract gross profit
and non-GAAP contract gross
margin as a percentage of contract revenue.
|
Fine Chemicals (FC) is a new reporting segment for AMRI
resulting from the acquisition of Euticals. Consequently, there are
no comparative prior period amounts. Non-GAAP contract gross profit
and margin reflect the impact of acquisition accounting inventory
adjustments associated with the acquisition of Euticals.
Liquidity and Capital Resources
At September 30, 2016, AMRI had
cash, cash equivalents and restricted cash of $45.0 million, compared to $31.4 million at June 30,
2016. The increase in cash and cash equivalents for the
quarter ended September 30, 2016 was
primarily due to net proceeds from long-term debt financing of
$185.5 million, partially offset by
the use of $143.3 million for the
purchase of Euticals (net of cash and debt assumed), $13.0 million for capital expenditures,
$10.0 million for operations, and
$6.6 million of repayments net of
receipts on short-term borrowings.
At December 31, 2015, AMRI had
cash, cash equivalents and restricted cash of $52.3 million. The decrease in cash and cash
equivalents for the nine months ended September 30, 2016 was primarily due to the use
of $143.3 million for the purchase of
Euticals (net of cash and debt assumed), $38.0 million for capital expenditures,
$44.9 million of debt payments, and
$6.6 million of repayments net of
receipts on short-term borrowings, partially offset by net proceeds
from long-term debt financing of $219.8
million and cash generated by operating activities of
$5.2 million.
Financial Outlook
AMRI's guidance takes into account a number of factors,
including expected financial results for 2016, anticipated tax
rates and shares outstanding.
AMRI's estimates for full year 2016, are as follows:
- Full Year 2016 revenue of $590 to $615
million, reflecting approximately $123 million of incremental revenue from
Euticals, an increase of 50% at the midpoint, including:
- DDS revenue of approximately $110
million
- API revenue of approximately $356
million
- DP revenue of approximately $107
million
- FC revenue of approximately $18
million
- Royalty revenue of $10 to $11
million
- GAAP contract margin of approximately 22%; Non-GAAP contract
margin of approximately 29%
- GAAP selling, general and administrative expenses of
approximately 21% of revenue; Non-GAAP selling, general and
administrative expenses of approximately 15% of revenue
- R&D expense of approximately $15
million
- GAAP diluted EPS between $(1.49) and
$(1.39); Non-GAAP diluted EPS between $1.03 and $1.11, based on an average fully
diluted share count of approximately 39 million shares
- Capital expenditures of approximately $48 million
For a reconciliation of non-GAAP financial measures to U.S. GAAP
financial measures for the full year 2016 reporting period, please
see Table 4 at the end of this press release.
Third Quarter Results Conference Call
AMRI will host a conference call and webcast today
at 8:30 a.m. ET to discuss third quarter 2016
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
3694774. 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 at
(855) 859-2056 (domestic calls) or (404)
537-3406 (international calls) and entering passcode 49003667.
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 Services (DDS), Active
Pharmaceutical Ingredients (API), Drug Product (DP), and Fine
Chemicals (FC). 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. These
forward-looking statements include all of the estimates under
"Financial Outlook" and statements regarding, among other things,
the integration of the Euticals business and its financial
impact, the performance of the Company's previously acquired higher
margin businesses, the strength of the Company's commercial
operations and prospects, projections regarding future revenues and
financial performance, and the Company's momentum and long-term
growth. The words "outlook", "guidance", "anticipates", "believes",
"expects", "may", "plans", "predicts", "will", "potential", "goal"
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Readers should not place undue reliance on
these 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, the
ability of the Company to successfully integrate the Euticals
business and achieve the expected financial results; ongoing
headwinds in the U.S. and other world economies which could lead to
overall softness in the markets the Company serves; difficulty in
raising new capital to support the Company's business, including
financing our debt obligations, capital expenditures and
acquisitions; 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 historically
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 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, 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, 2015 as filed with the Securities
and Exchange Commission (SEC) on March 30,
2016, the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2016 as filed with the
SEC on August 5, 2016 and the
Company's other SEC filings. The financial guidance offered by
senior management with respect to 2016 represents a point-in-time
estimate and is 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 Financial Measures
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, net income, and earnings per diluted share, adjusted
to exclude certain charges (and gains when applicable) that relate
to specific events or transactions, such as impairment charges,
restructuring charges, executive transition costs, business
acquisition costs, realized and unrealized gains and losses on
foreign currency transactions related to business acquisitions,
non-recurring professional fees, ERP implementation costs,
insurance recoveries on business interruption events, and gains on
sales of facilities in the 2016 and 2015 periods presented.
Management typically excludes these amounts when evaluating our
operating performance and believes that the resulting non-GAAP
measures provide investors with a consistent basis for comparison
across periods and, therefore, are useful to investors in assessing
our operating performance.
Our U.S. GAAP measures are also adjusted to exclude certain
non-cash charges (and gains when applicable) such as non-cash debt
interest and amortization charges, share-based compensation
expense, acquisition accounting inventory adjustments, and
acquisition accounting depreciation and amortization for the
periods presented for 2016 and 2015. Management typically excludes
the amounts described above when evaluating our operating
performance and believes that the resulting non-GAAP measures are
useful to investors in assessing our operating performance.
We have also presented the non-GAAP measure of adjusted EBITDA,
which in addition to the items excluded above, further excludes the
impact of interest income and expense, depreciation and
amortization expense, and income tax expense or benefit.
We believe presentation of our non-GAAP measures enhances an
overall understanding of our historical financial performance
because we believe these measures 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 the related GAAP
measures. Reconciliations of these non-GAAP measures to the most
directly comparable GAAP financial measures are set forth in Tables
1-3.
A reconciliation of forward-looking non-GAAP financial measures
to the most directly comparable GAAP reported financial measures
has been included in Table 4.
Albany Molecular
Research, Inc. Selected Consolidated Balance Sheet Data
(unaudited)
|
|
(Dollars in
thousands)
|
|
September
30,
|
December
31,
|
|
|
2016
|
2015
|
|
|
|
|
Cash and cash
equivalents
|
|
$
44,756
|
$
49,343
|
Restricted
cash
|
|
$
242
|
$
2,966
|
Accounts receivable,
net
|
|
$
126,898
|
$
110,427
|
Royalty income
receivable
|
|
$
4,099
|
$
6,184
|
Inventory
|
|
$
201,901
|
$
89,231
|
Total current
assets
|
|
$
404,248
|
$
280,245
|
Property and
equipment, net
|
|
$
376,121
|
$
209,508
|
Total
assets
|
|
$
1,258,083
|
$
865,567
|
|
|
|
|
Total current
liabilities
|
|
$
182,543
|
$
99,096
|
Long‑term debt,
excluding current installments, net of unamortized
discount
|
|
$
606,112
|
$
373,692
|
Total
liabilities
|
|
$
920,085
|
$
578,344
|
Total stockholders'
equity
|
|
$
337,998
|
$
287,223
|
Total liabilities and
stockholders' equity
|
|
$
1,258,083
|
$
865,567
|
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,
2016
|
|
|
September 30,
2015
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
|
$
|
151,681
|
|
$
|
101,348
|
|
$
|
370,976
|
|
$
|
261,706
|
Recurring
royalties
|
|
|
1,057
|
|
|
3,231
|
|
|
8,152
|
|
|
14,238
|
Total
revenue
|
|
|
152,738
|
|
|
104,579
|
|
|
379,128
|
|
|
275,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of contract
revenue
|
|
|
123,486
|
|
|
80,204
|
|
|
285,063
|
|
|
203,011
|
Technology incentive
award
|
|
|
-
|
|
|
(6)
|
|
|
-
|
|
|
554
|
Research and
development
|
|
|
4,642
|
|
|
1,903
|
|
|
11,289
|
|
|
2,778
|
Selling, general and
administrative
|
|
|
37,304
|
|
|
21,219
|
|
|
89,828
|
|
|
55,211
|
Restructuring and
other charges
|
|
|
2,967
|
|
|
709
|
|
|
6,094
|
|
|
3,828
|
Impairment
charges
|
|
|
-
|
|
|
540
|
|
|
201
|
|
|
3,155
|
Total operating
expenses
|
|
|
168,399
|
|
|
104,569
|
|
|
392,475
|
|
|
268,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
operations
|
|
|
(15,661)
|
|
|
10
|
|
|
(13,347)
|
|
|
7,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(12,714)
|
|
|
(6,318)
|
|
|
(26,914)
|
|
|
(12,532)
|
Other (expense)
income, net
|
|
|
(549)
|
|
|
798
|
|
|
(7,207)
|
|
|
1,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
income taxes
|
|
|
(28,924)
|
|
|
(5,510)
|
|
|
(47,468)
|
|
|
(3,224)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
|
(5,499)
|
|
|
(1,340)
|
|
|
7,292
|
|
|
862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(23,425)
|
|
$
|
(4,170)
|
|
$
|
(54,760)
|
|
$
|
(4,086)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
|
$
|
(0.57)
|
|
$
|
(0.12)
|
|
$
|
(1.48)
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share
|
|
$
|
(0.57)
|
|
$
|
(0.12)
|
|
$
|
(1.48)
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 1:
Reconciliation of three and nine months ended September 30, 2016
and 2015 reported
contract gross profit and contract gross margin to non-GAAP
contract gross profit and non-
GAAP contract gross margin:
|
|
Non-GAAP
Measures
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Dollars in
thousands)
|
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Consolidated Contract
Revenue, as reported
|
|
$
151,681
|
|
$
101,348
|
|
$
370,976
|
|
$
261,706
|
Consolidated Cost of
Contract Revenue, as reported
|
|
123,486
|
|
80,204
|
|
285,063
|
|
203,011
|
Consolidated Contract
Gross Profit, as reported
|
|
28,195
|
|
21,144
|
|
85,913
|
|
58,695
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
217
|
|
246
|
|
920
|
|
723
|
add: Acquisition
accounting inventory adjustments
|
|
12,923
|
|
3,126
|
|
19,581
|
|
3,126
|
add: Acquisition
accounting depreciation
|
|
4,199
|
|
539
|
|
5,509
|
|
2,001
|
Non-GAAP Consolidated
Contract Gross Profit
|
|
$
45,534
|
|
$
25,055
|
|
$
111,923
|
|
$
64,545
|
Consolidated Contract
Gross Margin, as reported
|
|
18.6%
|
|
20.9%
|
|
23.2%
|
|
22.4%
|
Non-GAAP Consolidated
Contract Gross Margin
|
|
30.0%
|
|
24.7%
|
|
30.2%
|
|
24.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DDS Segment Contract
Revenue, as reported
|
|
$
28,465
|
|
$
21,521
|
|
$
77,488
|
|
$
60,733
|
DDS Segment Cost of
Contract Revenue, as reported
|
|
18,212
|
|
15,551
|
|
53,745
|
|
45,136
|
DDS Segment Contract
Gross Profit, as reported
|
|
10,253
|
|
5,970
|
|
23,743
|
|
15,597
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
105
|
|
147
|
|
647
|
|
449
|
add: Acquisition
accounting inventory adjustments
|
|
199
|
|
-
|
|
199
|
|
-
|
add: Acquisition
accounting depreciation
|
|
287
|
|
291
|
|
845
|
|
713
|
Non-GAAP DDS Segment
Contract Gross Profit
|
|
$
10,844
|
|
$
6,408
|
|
$
25,434
|
|
$
16,759
|
DDS Segment Contract
Gross Margin, as reported
|
|
36.0%
|
|
27.7%
|
|
30.6%
|
|
25.7%
|
Non-GAAP DDS Segment
Contract Gross Margin
|
|
38.1%
|
|
29.8%
|
|
32.8%
|
|
27.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
API Segment Contract
Revenue, as reported
|
|
$
89,568
|
|
$
56,158
|
|
$
209,717
|
|
$
134,003
|
API Segment Cost of
Contract Revenue, as reported
|
|
78,034
|
|
43,410
|
|
165,234
|
|
100,427
|
API Segment Contract
Gross Profit, as reported
|
|
11,534
|
|
12,748
|
|
44,483
|
|
33,576
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
83
|
|
69
|
|
169
|
|
189
|
add: Acquisition
accounting inventory adjustments
|
|
10,363
|
|
3,126
|
|
17,021
|
|
3,126
|
add: Acquisition
accounting depreciation
|
|
3,358
|
|
302
|
|
3,628
|
|
572
|
Non-GAAP API Segment
Contract Gross Profit
|
|
$
25,338
|
|
$
16,245
|
|
$
65,301
|
|
$
37,463
|
API Segment Contract
Gross Margin, as reported
|
|
12.9%
|
|
22.7%
|
|
21.2%
|
|
25.1%
|
Non-GAAP API Segment
Contract Gross Margin
|
|
28.3%
|
|
28.9%
|
|
31.1%
|
|
28.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DP Segment Contract
Revenue, as reported
|
|
$
24,547
|
|
$
23,669
|
|
$
74,670
|
|
$
66,970
|
DP Segment Cost of
Contract Revenue, as reported
|
|
17,881
|
|
21,243
|
|
56,725
|
|
57,448
|
DP Segment Contract
Gross Profit, as reported
|
|
6,666
|
|
2,426
|
|
17,945
|
|
9,522
|
|
|
|
|
|
|
|
|
|
add: Share-based
compensation expense
|
|
29
|
|
30
|
|
104
|
|
85
|
add: Acquisition
accounting depreciation
|
|
271
|
|
(54)
|
|
753
|
|
716
|
Non-GAAP DP Segment
Contract Gross Profit
|
|
$
6,966
|
|
$
2,402
|
|
$
18,802
|
|
$
10,323
|
DP Segment Contract
Gross Margin, as reported
|
|
27.2%
|
|
10.2%
|
|
24.0%
|
|
14.2%
|
Non-GAAP DP Segment
Contract Gross Margin
|
|
28.4%
|
|
10.1%
|
|
25.2%
|
|
15.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FC Segment Contract
Revenue, as reported
|
|
$
9,101
|
|
$
-
|
|
$
9,101
|
|
$
-
|
FC Segment Cost of
Contract Revenue, as reported
|
|
9,359
|
|
-
|
|
9,359
|
|
-
|
FC Segment Contract
Gross Profit, as reported
|
|
(258)
|
|
-
|
|
(258)
|
|
-
|
|
|
|
|
|
|
|
|
|
add: Acquisition
accounting inventory adjustments
|
|
2,361
|
|
|
|
2,361
|
|
|
add: Acquisition
accounting depreciation
|
|
283
|
|
-
|
|
283
|
|
-
|
Non-GAAP FC Segment
Contract Gross Profit
|
|
$
2,386
|
|
$
-
|
|
$
2,386
|
|
$
-
|
FC Segment Contract
Gross Margin, as reported
|
|
-2.8%
|
|
-
|
|
-2.8%
|
|
-
|
Non-GAAP FC Segment
Contract Gross Margin
|
|
26.2%
|
|
-
|
|
26.2%
|
|
-
|
Table 2:
Reconciliation of the three and nine months ended September 30,
2016 and 2015
reported net (loss) income and (loss) earnings per diluted share to
non-GAAP net income and
non-GAAP diluted earnings per share:
|
|
|
|
Three Months Ended
|
|
|
(Dollars in
thousands, except for
per share data)
|
September 30,
2016
|
|
September 30,
2015
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
$
151,681
|
|
$
-
|
|
$
151,681
|
|
$
101,348
|
|
$
-
|
|
$
101,348
|
|
|
Recurring
royalties
|
1,057
|
|
-
|
|
1,057
|
|
3,231
|
|
-
|
|
3,231
|
|
|
Total
revenue
|
152,738
|
|
-
|
|
152,738
|
|
104,579
|
|
-
|
|
104,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of contract
revenue
|
123,486
|
|
(17,339)
|
(a) (b)
(d)
|
106,147
|
|
80,204
|
|
(3,899)
|
(a) (b)
(c)
|
76,305
|
|
|
Technology incentive
award
|
-
|
|
-
|
|
-
|
|
(6)
|
|
-
|
|
(6)
|
|
|
Research and
development
|
4,642
|
|
(109)
|
(e)
|
4,533
|
|
1,903
|
|
(2)
|
(e)
|
1,901
|
|
|
Selling, general and
administrative
|
37,304
|
|
(12,886)
|
(f) (g) (h) (i)
(j) (k)
|
24,418
|
|
21,219
|
|
(5,537)
|
(f) (g) (h) (i)
(j) (k)
|
15,682
|
|
|
Restructuring and
other charges
|
2,967
|
|
(2,967)
|
(l)
|
(0)
|
|
709
|
|
(709)
|
(l)
|
(0)
|
|
|
Impairment
charges
|
-
|
|
-
|
|
-
|
|
540
|
|
(540)
|
(m)
|
-
|
|
|
Total operating
expenses
|
168,399
|
|
(33,301)
|
|
135,098
|
|
104,569
|
|
(10,687)
|
|
93,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
(15,661)
|
|
33,301
|
|
17,640
|
|
10
|
|
10,687
|
|
10,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(12,714)
|
|
5,331
|
(n)
|
(7,383)
|
|
(6,318)
|
|
2,694
|
(n)
|
(3,624)
|
|
|
Other (expense)
income, net
|
(549)
|
|
779
|
(o)
|
230
|
|
798
|
|
-
|
|
798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income before income
taxes
|
(28,924)
|
|
39,412
|
|
10,488
|
|
(5,510)
|
|
13,382
|
|
7,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(5,499)
|
|
8,746
|
(p)
|
3,247
|
|
(1,340)
|
|
4,105
|
(p)
|
2,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(23,425)
|
|
$
30,666
|
|
$
7,241
|
|
$
(4,170)
|
|
$
9,277
|
|
$
5,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per share
|
$
(0.57)
|
|
$
0.75
|
|
$
0.18
|
|
$
(0.12)
|
|
$
0.27
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share
|
$
(0.57)
|
|
$
0.74
|
(q)
|
$
0.17
|
|
$
(0.12)
|
|
$
0.26
|
(q)
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Acquisition
accounting depreciation in 2016 and 2015 of $4,199 and $521,
respectively.
|
|
|
|
|
|
|
|
|
(b)
|
Share-based
compensation expense in 2016 and 2015 of $217 and $246,
respectively.
|
|
|
|
|
|
|
|
|
(c )
|
Acquisition
accounting inventory adjustments associated with the acquisition of
Gadea in 2015 of $3,132
|
|
|
|
|
|
|
(d)
|
Acquisition
accounting inventory adjustments associated with the acquisition of
Euticals in 2016 of $12,923.
|
|
|
|
|
|
(e)
|
Acquisition
accounting depreciation in 2016 and 2015 of $109 and $2,
respectively.
|
|
|
|
|
|
|
|
|
(f)
|
Acquisition
accounting depreciation and amortization in 2016 and 2015 of $3,034
and $1,306, respectively.
|
|
|
|
|
|
|
(g)
|
Share-based
compensation expense in 2016 and 2015 of $1,533 and $1,550,
respectively.
|
|
|
|
|
|
|
|
(h)
|
Business acquisition
costs in 2016 and 2015 of $6,775 and $1,630,
respectively.
|
|
|
|
|
|
|
|
|
(i)
|
Executive transition
charges in 2016 and 2015 of $0 and $469, respectively.
|
|
|
|
|
|
|
|
|
(j)
|
ERP implementation
costs in 2016 and 2015 of $1,544 and $467, respectively.
|
|
|
|
|
|
|
|
|
(k)
|
Non-recurring
professional fees in 2016 and 2015 of $0 and $115, respectively,
associated with the defense of an open securities litigation matter
.
|
|
|
(l)
|
Restructuring and
other charges in 2016 relate primarily to the Company's
reorganization actions associated with the Euticals acquisition,
Singapore and Holywell, UK facilities,
partially offset by a reduction in lease obligation
reserves
|
|
|
Restructuring and
other charges in 2015 relate primarily to the closure of the
company's Holywell, UK facility.
|
|
|
|
|
|
(m)
|
Impairment charges in
2015 relate to property, plant, and equipment charges associated
with the closure of the Company's Holywell, UK facility.
|
|
|
(n)
|
Represents
debt-related non-cash interest and amortization charges.
|
|
|
|
|
|
|
|
|
(o)
|
Loss on hedge
transaction associated with the Euticals purchase price of $779 in
2016.
|
|
|
|
|
|
|
|
|
(p)
|
Income tax effects of
non-GAAP adjustments included in income before income taxes in 2016
and 2015
|
|
|
|
|
|
|
(q)
|
Weighted average
share counts utilized in computing non-GAAP diluted EPS in 2016 and
2015 of 42,055,497 and 35,712,142, respectively.
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
(Dollars in
thousands, except for per share
data)
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
|
|
$
370,976
|
|
$
-
|
|
$
370,976
|
|
$
261,706
|
|
$
-
|
|
$
261,706
|
|
|
Recurring
royalties
|
|
|
8,152
|
|
-
|
|
8,152
|
|
14,238
|
|
-
|
|
14,238
|
|
|
Total
revenue
|
|
|
379,128
|
|
-
|
|
379,128
|
|
275,944
|
|
-
|
|
275,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of contract
revenue
|
|
|
285,063
|
|
(26,010)
|
(a) (b) (c )
(d)
|
259,053
|
|
203,011
|
|
(5,847)
|
(a) (b) (c
)
|
197,164
|
|
|
Technology incentive
award
|
|
|
-
|
|
-
|
|
-
|
|
554
|
|
-
|
|
554
|
|
|
Research and
development
|
|
|
11,289
|
|
(109)
|
(e)
|
11,180
|
|
2,778
|
|
(2)
|
(e)
|
2,776
|
|
|
Selling, general and
administrative
|
|
|
89,828
|
|
(28,491)
|
(f) (g) (h) (i)
(j) (k)
|
61,337
|
|
55,211
|
|
(13,102)
|
(f) (g) (h) (i) (j)
(k)
|
42,109
|
|
|
Restructuring and
other charges
|
|
|
6,094
|
|
(6,094)
|
(l)
|
-
|
|
3,828
|
|
(3,828)
|
(l)
|
(0)
|
|
|
Impairment
charges
|
|
|
201
|
|
(201)
|
(m)
|
-
|
|
3,155
|
|
(3,155)
|
(m)
|
-
|
|
|
Total operating
expenses
|
|
|
392,475
|
|
(60,905)
|
|
331,570
|
|
268,537
|
|
(25,934)
|
|
242,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
|
|
(13,347)
|
|
60,905
|
|
47,558
|
|
7,407
|
|
25,934
|
|
33,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(26,914)
|
|
10,905
|
(n)
|
(16,009)
|
|
(12,532)
|
|
6,220
|
(n)
|
(6,312)
|
|
|
Other (expense)
income, net
|
|
|
(7,207)
|
|
7,022
|
(o)
(p)
|
(185)
|
|
1,901
|
|
(600)
|
(q)
|
1,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
|
|
(47,468)
|
|
78,833
|
|
31,365
|
|
(3,224)
|
|
31,555
|
|
28,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
7,292
|
|
1,800
|
(r)(s)
|
9,092
|
|
862
|
|
8,605
|
(r)
|
9,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
$
(54,760)
|
|
$
77,033
|
|
$
22,273
|
|
$
(4,086)
|
|
$
22,950
|
|
$
18,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per share
|
|
|
$
(1.48)
|
|
$
2.08
|
|
$
0.60
|
|
$
(0.12)
|
|
$
0.70
|
|
$
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share
|
|
|
$
(1.48)
|
|
$
2.07
|
(t)
|
$
0.59
|
|
$
(0.12)
|
|
$
0.68
|
(t)
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Acquisition
accounting depreciation in 2016 and 2015 of $5,509 and $1,982,
respectively.
|
|
|
|
|
|
|
|
|
(b)
|
Share-based
compensation expense in 2016 and 2015 of $920 and $733,
respectively.
|
|
|
|
|
|
|
|
|
(c)
|
Acquisition
accounting inventory adjustments associated with the acquisition of
Gadea in 2016 and 2015 of $6,658 and $3,132,
respectively.
|
|
|
|
(d)
|
Acquisition
accounting inventory adjustments associated with the acquisition of
Euticals in 2016 of $12,923.
|
|
|
|
|
|
|
|
(e)
|
Acquisition
accounting depreciation in 2016 and 2015 of $109 and $2,
respectively.
|
|
|
|
|
|
|
|
|
(f)
|
Acquisition
accounting depreciation and amortization in 2016 and 2015 of $6,536
and $2,721, respectively.
|
|
|
|
|
|
|
|
(g)
|
Share-based
compensation expense in 2016 and 2015 of $5,444 and $4,083,
respectively.
|
|
|
|
|
|
|
|
|
(h)
|
Business acquisition
costs in 2016 and 2015 of $12,255 and $3,302,
respectively.
|
|
|
|
|
|
|
|
|
|
(i)
|
Executive transition
charges in 2016 and 2015 of $7 and $1,405, respectively.
|
|
|
|
|
|
|
|
|
|
(j)
|
ERP implementation
costs in 2016 and 2015 of $3,649 and $765, respectively.
|
|
|
|
|
|
|
|
|
|
(k)
|
Non-recurring
professional fees in 2016 and 2015 of $600 and $826, respectively,
primarily associated with the defense of an open securities
litigation matter.
|
|
|
(l)
|
Restructuring and
other charges in 2016 relate primarily to the Company's
reorganization actions associated with the Euticals acquisition,
Singapore and Holywell, UK facilities, partially offset by a
reduction in lease obligation reserves
|
|
|
Restructuring and
other charges in 2015 relate primarily to the closure of the
company's Holywell, UK facility.
|
|
|
|
|
|
|
|
(m)
|
Impairment charges in
2016 relate to intellectual property assets associated with one of
the Company's proprietary drug discovery programs.
|
|
|
|
|
Impairment charges in
2015 relate to property, plant, and equipment charges associated
with the closure of the Company's Holywell, UK facility.
|
|
|
|
(n)
|
Represents
debt-related non-cash interest and amortization charges.
|
|
|
|
|
|
|
|
|
|
(o)
|
Gain on sale of
Syracuse, NY facility, which was closed in 2014.
|
|
|
|
|
|
|
|
|
|
(p)
|
Foreign exchange
losses associated with the Euticals purchase of $7,180 in
2016.
|
|
|
|
|
|
|
|
|
|
(q)
|
Insurance recovery -
business interruption in 2015.
|
|
|
|
|
|
|
|
|
|
|
|
(r)
|
Income tax effects of
non-GAAP adjustments included in income before income taxes in 2016
and 2015
|
|
|
|
|
|
|
|
(s)
|
Income tax expense
related to the establishment of a valuation allowance on the
Company's U.S. deferred tax assets of $8,467 in 2016.
|
|
|
|
(t)
|
Weighted average
share counts utilized in computing non-GAAP diluted EPS in 2016 and
2015 of 37,819,024 and 33,934,222, respectively.
|
|
|
|
Table 3:
Reconciliation of the three and nine months ended September 30,
2016 and 2015 reported net (loss) income to adjusted
EBITDA:
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
Net (loss) income, as
reported
|
|
$
(23,425)
|
|
$
(4,170)
|
|
$
(54,760)
|
|
$
(4,086)
|
Income tax (benefit)
expense
|
|
(5,499)
|
|
(1,340)
|
|
7,292
|
|
862
|
Interest expense,
net
|
|
12,714
|
|
6,318
|
|
26,914
|
|
12,532
|
Depreciation and
amortization
|
|
15,011
|
|
6,908
|
|
31,291
|
|
18,670
|
EBITDA
|
|
(1,199)
|
|
7,716
|
|
10,737
|
|
27,978
|
Impairment
charges
|
|
-
|
|
540
|
|
201
|
|
3,155
|
Restructuring and
other charges
|
|
2,967
|
|
709
|
|
4,951
|
|
3,828
|
Executive transition
costs
|
|
-
|
|
469
|
|
7
|
|
1,405
|
Business acquisition
costs
|
|
6,777
|
|
1,630
|
|
12,257
|
|
3,302
|
Purchase accounting
inventory adjustments
|
|
12,923
|
|
3,081
|
|
19,581
|
|
3,081
|
ERP Implementation
costs
|
|
1,544
|
|
467
|
|
3,649
|
|
765
|
Non-recurring
professional fees
|
|
-
|
|
115
|
|
600
|
|
826
|
Share-based
compensation expense
|
|
1,750
|
|
1,796
|
|
6,364
|
|
4,816
|
Insurance recovery -
business interruption
|
|
-
|
|
-
|
|
-
|
|
(600)
|
Gain on sale of
facility
|
|
-
|
|
-
|
|
(158)
|
|
-
|
Foreign exchange loss
on acquisition
|
|
779
|
|
-
|
|
7,180
|
|
-
|
Adjusted
EBITDA
|
|
$
25,541
|
|
$
16,523
|
|
$
65,369
|
|
$
48,556
|
Table 4:
Reconciliation of forward-looking non-GAAP financial measures to
forward-looking
GAAP financial measures:
|
|
Reconciliation of
GAAP net loss and GAAP diluted loss per share to non-GAAP net
income and non-
GAAP diluted earnings per share (Dollars in
thousands)
|
|
Low
|
|
High
|
GAAP net
loss
|
$
(57)
|
|
$
(53)
|
|
|
|
|
Restructuring and
other charges
|
10
|
|
10
|
Business acquisition
costs
|
13
|
|
13
|
Acquisition
accounting inventory adjustments
|
30
|
|
30
|
Acquisition
accounting depreciation and amortization
|
20
|
|
20
|
ERP Implementation
costs
|
4
|
|
4
|
Non-recurring
professional fees
|
1
|
|
1
|
Non-cash debt
interest and amortization charges
|
16
|
|
16
|
Share-based
compensation expense
|
8
|
|
8
|
Insurance recovery -
business interruption
|
(7)
|
|
(7)
|
Foreign exchange loss
on acquisition
|
7
|
|
7
|
Tax effect for above
items
|
(13)
|
|
(13)
|
Non-recurring income
tax adjustments
|
8
|
|
8
|
Non-GAAP net
income
|
$
40
|
|
$
44
|
|
|
|
|
GAAP diluted loss per
share
|
$
(1.49)
|
|
$
(1.39)
|
Non-GAAP diluted
earnings per share
|
$
1.03
|
|
$
1.11
|
|
|
|
|
Reconciliation of
GAAP contract gross profit and GAAP contract gross margin to
non-GAAP contract
gross profit and non-GAAP gross margin
|
|
|
|
|
GAAP contract gross
margin
|
22%
|
|
|
add: acquisition
accounting inventory adjustments
|
5%
|
|
|
add: acquisition
accounting depreciation
|
2%
|
|
|
Non-GAAP contract
gross margin
|
29%
|
|
|
|
|
|
|
Reconciliation of
GAAP SG&A as a percentage of contract revenue to non-GAAP
SG&A as a percentage
of contract revenue
|
|
|
|
|
GAAP Selling, general
and administrative expense
|
21%
|
|
|
deduct: share based
compensation expense
|
(1%)
|
|
|
deduct: acquisition
accounting depreciation and amortization
|
(2%)
|
|
|
deduct: business
acquisition costs
|
(2%)
|
|
|
deduct: ERP
implementation costs
|
(1%)
|
|
|
Non-GAAP Selling,
General, and Administrative Expense
|
15%
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/amri-announces-third-quarter-2016-results-300359041.html
SOURCE AMRI