Quarterly Report (10-q)

Date : 08/08/2018 @ 10:54AM
Source : Edgar (US Regulatory)
Stock : Acorda Therapeutics, Inc. (ACOR)
Quote : 15.89  0.0 (0.00%) @ 12:00PM

Quarterly Report (10-q)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission File Number 000-50513

 

ACORDA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

13-3831168

(State or other jurisdiction of incorporation

or organization)

 

(I.R.S. Employer

Identification No.)

 

420 Saw Mill River Road, Ardsley, New York

 

10502

(Address of principal executive offices)

 

(Zip Code)

(914) 347-4300

(Registrant’s telephone number,

including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  (Do not check if a small reporting company)

  

Small reporting company

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at July 31, 2018

Common Stock, $0.001 par value

per share

 

47,483,813 shares

 

 


 

ACORDA THERAPEUTICS, INC.

TABLE OF CONTENTS

 

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements

 

1

 

Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017

 

1

 

Consolidated Statements of Operations (unaudited) for the Three and Six-month Periods Ended June 30, 2018 and 2017

 

2

 

Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three and Six-month Periods Ended June 30, 2018 and 2017

 

3

 

Consolidated Statements of Cash Flows (unaudited) for the Six-month Periods Ended June 30, 2018 and 2017

 

4

 

Notes to Consolidated Financial Statements (unaudited)

 

5

Item 2 .

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

35

Item 4.

Controls and Procedures

 

35

PART II—OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

37

Item 1A.

Risk Factors

 

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

43

Item 6.

Exhibits

 

44

Signatures

 

 

45

 

 


 

This Quarterly Report on Form 10-Q contains forward ‑looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Stockholders are cautioned that such statements involve risks and uncertainties, including: the ability to realize the benefits anticipated from acquisitions, among other reasons because acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; we may need to raise additional fu nds to finance our operations and may not be able to do so on acceptable terms; our ability to successfully market and sell Ampyra (dalfampridine) Extended Release Tablets, 10 mg in the U.S., which will likely be materially adversely affected by the March 2017 court decision in our litigation against filers of Abbreviated New Drug Applications to market generic versions of Ampyra in the U.S.; the risk of unfavorable results from future studies of Inbrija ( levodopa inhalation powder ) or from our other resear ch and development programs, or any other acquired or in-licensed programs; we may not be able to complete development of, obtain regulatory approval for, or successfully market Inbrija or any other products under development; risks associated with complex , regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of Inbrija to meet market demand, if it receives regulatory approval; third party payers (including governmental agencies) may not reim burse for the use of Ampyra, Inbrija or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; the occurrence of adverse safety events with our products; the outcome ( by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation ; competition; failure to protect our intellectual p roperty, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse actio n by regulatory agencies. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s beliefs and assumptions. All statements, other than state ments of historical facts, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipates, ” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual r esults or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and investors should not place undue reliance on these statements. In addition to the risks and uncertainties describe d above, we have included important factors in the cautionary statements included in this report and in our Annual Report on Form 10-K, as amended by Amendment No.1 on Form 10-K/A, for the year ended December 31, 2017, particularly in the “Risk Factors” se ction (as updated by the disclosures in our subsequent quarterly reports, including this report), that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. Forward-looking statements in this report are made only as of the date hereof, and we do not assume any obligation to public ly update any forward-looking statements as a result of developments occurring after the date of this report.

We and our subsidiaries own several registered trademarks in the U.S. and in other countries. These registered trademarks include, in the U.S., the marks “Acorda Therapeutics,” our stylized Acorda Therapeutics logo, “Biotie Therapies,” “Ampyra” “Qutenza” and “ARCUS.”  Also, our mark “Fampyra” is a registered mark in the European Community Trademark Office and we have registrations or pending applications for this mark in other jurisdictions. Our trademark portfolio also includes several registered trademarks and pending trademark applications (e.g., “Inbrija”) in the U.S. and worldwide for potential product names or for disease awareness activities. Third party trademarks, trade names, and service marks used in this report are the property of their respective owners.

 

 

 


 

P ART I

Item 1.  Financial Statements

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

(In thousands, except share data)

 

June 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

243,345

 

 

$

307,068

 

Restricted cash

 

 

221

 

 

 

410

 

Short term investments

 

 

148,371

 

 

 

 

Trade accounts receivable, net of allowances of $1,783 and $845, as of

   June 30, 2018 and December 31, 2017, respectively

 

 

64,360

 

 

 

81,403

 

Prepaid expenses

 

 

15,101

 

 

 

13,333

 

Finished goods inventory held by the Company

 

 

21,147

 

 

 

37,501

 

Other current assets

 

 

2,007

 

 

 

1,983

 

Total current assets

 

 

494,552

 

 

 

441,698

 

Property and equipment, net of accumulated depreciation

 

 

42,524

 

 

 

36,669

 

Goodwill

 

 

284,100

 

 

 

286,611

 

Intangible assets, net of accumulated amortization

 

 

428,762

 

 

 

430,603

 

Non-current portion of deferred cost of license revenue

 

 

 

 

 

1,638

 

Other assets

 

 

678

 

 

 

750

 

Total assets

 

$

1,250,616

 

 

$

1,197,969

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

15,400

 

 

$

27,367

 

Accrued expenses and other current liabilities

 

 

97,761

 

 

 

100,128

 

Current portion of deferred license revenue

 

 

 

 

 

9,057

 

Current portion of loans payable

 

 

629

 

 

 

645

 

Current portion of liability related to sale of future royalties

 

 

7,081

 

 

 

6,763

 

Total current liabilities

 

 

120,871

 

 

 

143,960

 

Convertible senior notes (due 2021)

 

 

313,679

 

 

 

308,805

 

Non-current portion of acquired contingent consideration

 

 

109,174

 

 

 

112,722

 

Non-current portion of deferred license revenue

 

 

 

 

 

23,398

 

Non-current portion of loans payable

 

 

24,698

 

 

 

25,670

 

Deferred tax liability

 

 

37,586

 

 

 

22,459

 

Non-current portion of liability related to sale of future royalties

 

 

26,102

 

 

 

29,025

 

Other non-current liabilities

 

 

11,871

 

 

 

11,943

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value. Authorized 20,000,000 shares at June 30,

   2018 and December 31, 2017; no shares issued as of June 30,

   2018 and December 31, 2017, respectively

 

 

 

 

 

 

Common stock, $0.001 par value. Authorized 80,000,000 shares at June 30,

   2018 and December 31, 2017; issued 47,223,027 and 46,441,428 shares,

   including those held in treasury, as of June 30, 2018 and

   December 31, 2017, respectively

 

 

47

 

 

 

46

 

Treasury stock at cost (79,275 shares at June 30, 2018 and 16,151 shares

  at December 31, 2017)

 

 

(1,976

)

 

 

(389

)

Additional paid-in capital

 

 

993,292

 

 

 

968,580

 

Accumulated deficit

 

 

(389,527

)

 

 

(455,108

)

Accumulated other comprehensive income

 

 

4,799

 

 

 

6,858

 

Total stockholders’ equity

 

 

606,635

 

 

 

519,987

 

Total liabilities and stockholders’ equity

 

$

1,250,616

 

 

$

1,197,969

 

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

1


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited)

 

(In thousands, except per share data)

 

Three-month period ended June 30, 2018

 

 

Three-month period ended June 30, 2017

 

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net product revenues

 

$

150,412

 

 

$

132,756

 

 

$

253,415

 

 

$

245,349

 

Royalty revenues

 

 

2,890

 

 

 

4,418

 

 

 

6,052

 

 

 

8,946

 

License revenue

 

 

 

 

 

2,264

 

 

 

 

 

 

4,529

 

Total net revenues

 

 

153,302

 

 

 

139,438

 

 

 

259,467

 

 

 

258,824

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

31,094

 

 

 

29,665

 

 

 

52,444

 

 

 

54,848

 

Cost of license revenue

 

 

 

 

 

159

 

 

 

 

 

 

317

 

Research and development

 

 

25,910

 

 

 

51,184

 

 

 

56,470

 

 

 

97,677

 

Selling, general and administrative

 

 

44,263

 

 

 

49,334

 

 

 

91,864

 

 

 

101,359

 

Changes in fair value of acquired contingent consideration

 

 

(7,000

)

 

 

6,400

 

 

 

(800

)

 

 

17,200

 

Total operating expenses

 

 

94,267

 

 

 

136,742

 

 

 

199,978

 

 

 

271,401

 

Operating income (loss)

 

 

59,035

 

 

 

2,696

 

 

 

59,489

 

 

 

(12,577

)

Other (expense) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and amortization of debt discount expense

 

 

(5,414

)

 

 

(5,460

)

 

 

(10,911

)

 

 

(9,603

)

Interest income

 

 

910

 

 

 

35

 

 

 

1,236

 

 

 

73

 

Realized (loss) gain on foreign currency transactions

 

 

(2

)

 

 

4

 

 

 

(7

)

 

 

(440

)

Other income

 

 

24

 

 

 

 

 

 

24

 

 

 

 

Total other expense, net

 

 

(4,482

)

 

 

(5,421

)

 

 

(9,658

)

 

 

(9,970

)

Income (loss) before taxes

 

 

54,553

 

 

 

(2,725

)

 

 

49,831

 

 

 

(22,547

)

Provision for income taxes

 

 

(8,356

)

 

 

(5,471

)

 

 

(11,833

)

 

 

(4,552

)

Net income (loss)

 

$

46,197

 

 

$

(8,196

)

 

$

37,998

 

 

$

(27,099

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share—basic

 

$

0.99

 

 

$

(0.18

)

 

$

0.82

 

 

$

(0.59

)

Net income (loss) per share—diluted

 

$

0.98

 

 

$

(0.18

)

 

$

0.81

 

 

$

(0.59

)

Weighted average common shares outstanding used in

   computing net income (loss) per share—basic

 

 

46,799

 

 

 

45,943

 

 

 

46,546

 

 

 

45,876

 

Weighted average common shares outstanding used in

   computing net income (loss) per share—diluted

 

 

47,201

 

 

 

45,943

 

 

 

46,974

 

 

 

45,876

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

2


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

 

(In thousands)

 

Three-month period ended June 30, 2018

 

 

Three-month period ended June 30, 2017

 

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

Net income (loss)

 

$

46,197

 

 

$

(8,196

)

 

$

37,998

 

 

$

(27,099

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(4,529

)

 

 

10,170

 

 

 

(1,982

)

 

 

12,572

 

Unrealized income (loss) on available for sale debt securities

 

 

15

 

 

 

 

 

(77

)

 

 

 

Other comprehensive (loss) income, net of tax

 

 

(4,514

)

 

 

10,170

 

 

 

(2,059

)

 

 

12,572

 

Comprehensive income (loss)

 

$

41,683

 

 

$

1,974

 

 

$

35,939

 

 

$

(14,527

)

 

See accompanying Unaudited Notes to Consolidated Financial Statements

3


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(unaudited)

 

(In thousands)

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

37,998

 

 

$

(27,099

)

Adjustments to reconcile net income (loss) to net cash provided by (used in)

   operating activities:

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

11,112

 

 

 

18,616

 

Amortization of net premiums and discounts on investments

 

 

(78

)

 

 

Amortization of debt discount and debt issuance costs

 

 

7,973

 

 

 

6,365

 

Depreciation and amortization expense

 

 

6,648

 

 

 

11,723

 

Change in acquired contingent consideration obligation

 

 

(800

)

 

 

17,200

 

Unrealized foreign currency transaction loss

 

 

 

 

 

247

 

Non-cash royalty revenue

 

 

(5,326

)

 

 

 

Deferred tax provision (benefit)

 

 

12,633

 

 

 

(1,618

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Decrease (increase)  in accounts receivable

 

 

17,042

 

 

 

(3,325

)

(Increase) decrease in prepaid expenses and other current assets

 

 

(1,640

)

 

 

3,805

 

Decrease (increase) in inventory

 

 

16,355

 

 

 

(778

)

Decrease in non-current portion of deferred cost of license revenue

 

 

 

 

 

317

 

Decrease (increase) in other assets

 

 

17

 

 

 

(3,924

)

Decrease in accounts payable, accrued expenses and other current

   liabilities

 

 

(17,036

)

 

 

(32,229

)

Decrease in non-current portion of deferred license revenue

 

 

 

 

 

(4,529

)

Increase in other non-current liabilities

 

 

61

 

 

 

69

 

Net cash provided by (used in) operating activities

 

 

84,959

 

 

 

(15,160

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(10,793

)

 

 

(8,747

)

Purchases of intangible assets

 

 

(162

)

 

 

(207

)

Purchases of investments

 

 

(148,371

)

 

 

Net cash used in investing activities

 

 

(159,326

)

 

 

(8,954

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock and option exercises

 

 

12,727

 

 

 

5,474

 

Refund of deposit for purchase of noncontrolling interest

 

 

 

 

 

2,722

 

Purchase of treasury stock

 

 

(1,587

)

 

 

(60

)

Repayment of loans payable

 

 

(656

)

 

 

(2,409

)

Net cash provided by financing activities

 

 

10,484

 

 

 

5,727

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(84

)

 

 

906

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(63,967

)

 

 

(17,481

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

308,039

 

 

 

158,871

 

Cash, cash equivalents and restricted cash at end of period

 

$

244,072

 

 

$

141,390

 

Supplemental disclosure:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

3,045

 

 

$

3,047

 

Cash paid for taxes

 

 

13,554

 

 

 

7,682

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

4


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

(1) Organization and Business Activities

Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a biopharmaceutical company focused on developing therapies that restore function and improve the lives of people with neurological disorders.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, Accounting Standards Codification (ASC) Topic 270-10 and with the instructions to Form 10-Q. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included in the interim periods presented and all adjustments are of a normal recurring nature. The Company has evaluated subsequent events through the date of this filing. Operating results for the three and six-month periods ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. When used in these notes, the terms “Acorda” or “the Company” mean Acorda Therapeutics, Inc. The December 31, 2017 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. You should read these unaudited interim condensed consolidated financial statements in conjunction with the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2017.

Certain reclassifications were made to prior period amounts in the consolidated financial statements and accompanying notes to conform with the current year presentation due to the adoption of ASU 2016-18 “Statement of Cash Flows” and Topic 230: Restricted Cash. See Note 2.

(2) Summary of Significant Accounting Policies

Our critical accounting policies are detailed in our Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2017. Effective January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606), ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, ASU 2016-15 “Statement of Cash Flows” (Topic 230): Classification of Certain Cash Receipts and Cash Payments, ASU 2016-18 “Statement of Cash Flows” (Topic 230): Restricted Cash , ASU 2017-01, “Business Combinations” (Topic 805): Clarifying the Definition of a Business, and ASU 2017-09, “Compensation – Stock Compensation” (Topic 718): Scope of Modification Accounting and ASU 2017-01 . Other than the adoption of the new accounting guidance, our critical accounting policies have not changed materially from December 31, 2017.

Revenue Recognition

On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement

5


 

that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. L icense revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred revenue as a cumulative effect adjustment of $27.6 million within the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

 

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)

Balance as of December 31, 2017

 

Net Adjustments

 

Balance as of

January 1, 2018

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

1,983

 

$

(634

)

$

1,349

 

Non-current portion of deferred cost of license revenue

 

1,638

 

 

(1,638

)

 

 

    Total Assets

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

23,398

 

 

(23,398

)

 

 

Deferred tax liability

 

22,459

 

 

2,600

 

 

25,059

 

Accumulated deficit

 

(455,108

)

 

27,583

 

 

(427,525

)

    Total liabilities and stockholders' equity

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

          

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of June 30, 2018 was as follows:

(In thousands)

Balance as of

June 30, 2018

Prior to Adoption

of ASC 606

 

Net Adjustments

 

Balance as of

June 30, 2018

as Reported

Under ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

2,641

 

$

(634

)

$

2,007

 

Non-current portion of deferred cost of license revenue

 

1,320

 

 

(1,320

)

 

 

    Total Assets

$

1,252,570

 

$

(1,954

)

$

1,250,616

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

18,870

 

 

(18,870

)

 

 

Deferred tax liability

 

34,986

 

 

2,600

 

 

37,586

 

Accumulated deficit

 

(412,900

)

 

23,373

 

 

(389,527

)

    Total liabilities and stockholders' equity

$

1,252,570

 

$

(1,954

)

$

1,250,616

 

 

6


 

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the three-month period ended June 30, 2018 was as follows:

(In thousands)

Three-Month Period Ended June 30, 2018 Balance Prior to

Adoption of ASC 606

 

Effect of Change

 

Three-Month Period

Ended June 30, 2018

Balance as Reported

Under ASC 606

 

License revenue

$

2,264

 

$

(2,264

)

$

 

Cost of license revenue

 

159

 

 

(159

)

 

 

Operating income (loss)

$

61,140

 

$

(2,105

)

$

59,035

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

48,302

 

$

(2,105

)

$

46,197

 

Net income (loss) per share—basic

$

1.03

 

$

(0.04

)

$

0.99

 

Net income (loss) per share—diluted

$

1.02

 

$

(0.04

)

$

0.98

 

 

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the six-month period ended June 30, 2018 was as follows:

(In thousands)

Six-Month Period

Ended June 30, 2018

Balance Prior to

Adoption of ASC 606

 

Effect of Change

 

Six-Month Period

Ended June 30, 2018

Balance as Reported

Under ASC 606

 

License revenue

$

4,528

 

$

(4,528

)

$

 

Cost of license revenue

 

318

 

 

(318

)

 

 

Operating income (loss)

$

63,699

 

$

(4,210

)

$

59,489

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

42,208

 

$

(4,210

)

$

37,998

 

Net income (loss) per share—basic

$

0.91

 

$

(0.09

)

$

0.82

 

Net income (loss) per share—diluted

$

0.90

 

$

(0.09

)

$

0.81

 

 

 

 

 

 

 

 

 

 

 

ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities.

ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, (iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.

ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer.

 

We currently do not have any contract assets. We recognize contract liabilities when a customer pays an upfront deposit upon contract execution for future obligations to be performed by us. As of June 30, 2018, we had contract liability in the amount of $5.5 million which reflects an upfront deposit paid by a customer upon contract execution for future obligations to be performed by us. The amount is currently reported in accrued expenses and other current liabilities in the Balance Sheet. If the contract is canceled, these upfront deposits are refundable only if certain obligations have not been performed by us. We did not have any contract liability as of December 31, 2017.

7


 

Product Revenue, Net

 Net revenue from product sales is recognized at the transaction price when the customer obtains control of the Company’s products, which occurs at a point in time, typically upon receipt of the product by the customer. The Company’s products are sold primarily to a network of specialty providers which are contractually obligated to hold no more than an agreed upon number of days of inventory.  The Company’s payment terms are between 30 to 34 days.

The Company’s net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services. These adjustments represent variable consideration under ASC 606 and are recorded for the Company’s estimate of cash consideration expected to be given by the Company to a customer that is presumed to be a reduction of the transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.

Discounts and Allowances

Revenue from product sales are recorded at the transaction price, which includes estimates for discounts and allowances for which reserves are established and includes cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services Discounts and allowances are recorded following shipment of product and the appropriate reserves are credited. These reserves are classified as reductions of accounts receivable (if the amount is payable to the Customer and right of offset exists) or a current liability (if the amount is payable to a party other than a Customer). These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves. Allowances for customer credits, chargebacks, rebates, data fees and wholesaler fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The nature of our allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: We contract for Medicaid and other U.S. Federal government programs to allow for our products to remain eligible for reimbursement under these programs. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program.  Based upon our contracts and the most recent experience with respect to sales through each of these channels, we provide an allowance for chargebacks and rebates. We monitor the sales trends and adjust the chargeback and rebate percentages on a regular basis to reflect the most recent chargebacks and rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Managed Care Contract Rebates: We contract with various managed care organizations including health insurance companies and pharmacy benefit managers. These contracts stipulate that rebates and, in some cases, administrative fees, are paid to these organizations provided our product is placed on a specific tier on the organization’s drug formulary. Based upon our contracts and the most recent experience with respect to sales through managed care channels, we provide an allowance for managed care contract rebates. We monitor the sales trends and adjust the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Copay Mitigation Rebates: We offer copay mitigation to commercially insured patients who have coverage for our products (in accordance with applicable law) and are responsible for a cost share. Based upon our contracts and the most recent experience with respect to actual copay assistance provided, we provide an allowance for copay

8


 

mitigation rebates. We monitor the sale s trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: We sell directly to our network of specialty pharmacies, Kaiser and ASD Specialty Healthcare, Inc. We generally provide invoice discounts for prompt payment for our products. We estimate our cash discounts based on the terms offered to our customers. Discounts are estimated based on rates that are explicitly stated in the Company’s contracts as it is expected they will take the discount and are recorded as a reduction of revenue at the time of product shipment when product revenue is recognized. We adjust estimates based on actual activity as necessary.

Product Returns: We either offer customers no return except for products damaged in shipping or consistent with industry practice, a limited right of return based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.  The company currently estimates product return liabilities using historical sales information and inventory remaining in the distribution channel.  

Data Fees and Fees for Service Payable to Specialty Pharmacies: We have contracted with certain specialty pharmacies to obtain transactional data related to our products in order to develop a better understanding of our selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. We pay a variable fee to the specialty pharmacies to provide us the data. We also pay the specialty pharmacies a flat fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. We estimate our fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenue

Royalty revenue recorded by the Company relates exclusively to the Company’s License and Collaboration agreement with Biogen which provides for ongoing royalties based on sales of Fampyra outside of the U.S. The Company recognizes revenue for royalties under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) sale or usage of the products or 2) satisfaction of the performance obligations. The Company has satisfied its performance obligations and therefore recognizes royalty revenue when the sales to which the royalties relate are completed.

Milestone Revenue

Milestone revenue relates to the License and Collaboration agreement with Biogen which provides for milestone payments for the achievement of certain regulatory and sales milestones during the term of the agreement. Regulatory milestones are contingent upon the approval of Fampyra for new indications outside of the U.S. Sales milestones are contingent upon the achievement of certain net sales targets for Fampyra sales outside of the U.S. The Company recognizes milestone revenue under ASC 606, which provides constraints for entities to recognize milestone revenue which is deemed to be variable by requiring the Company to estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes an estimate of revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the milestone is achieved. For regulatory milestones, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For sales-based milestones, the Company recognizes revenue upon the achievement of the specific sale milestones.

9


 

The following table disaggregates our revenue by ma jor source (in thousands):

 

Three-month period ended June 30, 2018

 

 

Three-month period ended June 30, 2017

 

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net product revenues

$

150,412

 

 

$

132,756

 

 

$

253,415

 

 

$

245,349

 

Royalty revenues

 

2,890

 

 

 

4,418

 

 

 

6,052

 

 

 

8,946

 

License revenue

 

 

 

 

2,264

 

 

 

 

 

 

4,529

 

Total net revenues

$

153,302

 

 

$

139,438

 

 

$

259,467

 

 

$

258,824

 

Foreign Currency Translation

The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; income and expense items are translated using the average exchange rate during the period; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction losses and gains are recognized in the period incurred and are reported as other (expense) income, net in the statement of operations.

Segment and Geographic Information

 

The Company is managed and operated as one business which is focused on developing therapies that restore function and improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from the sales of Ampyra and Qutenza in the U.S.

 

 

Subsequent Events

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined the following subsequent events required disclosure in these financial statements.

On August 3, 2018, we reported the following updates on the Ampyra ANDA litigation with the three generic drug manufacturers that remain a party to the litigation: We have entered into a conditioned settlement agreement with Mylan Pharmaceuticals Inc. and affiliates, and as a result of the settlement agreement, Mylan will be permitted to market its generic version of Ampyra in the U.S. sometime in 2025 or earlier under certain circumstances; we have signed an interim agreement with Teva Pharmaceuticals USA, Inc., that addresses the period of time until August 31, 2018 (and potentially until the appellate court issues a decision on the merits); and we have signed an interim agreement with West-Ward Pharmaceuticals International Limited and Hikma Pharmaceuticals USA Inc., successors to Roxane Laboratories, Inc., that addresses the period of time until the appellate court issues a decision on the merits. The terms of the settlement agreement and interim agreements are otherwise confidential.

Accounting Pronouncements Adopted

As noted above, in May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (Topic 606) (ASU 2014-09). This new standard replaced all previous U.S. GAAP guidance on this topic and eliminated all industry-specific guidance. The new standard requires the application of a five-step model to determine the amount and timing of revenue to be recognized. The underlying principle is that revenue is to be recognized for the transfer of goods or services to customers that reflects the amount of consideration that the Company expects to be entitled to in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective transition method. See discussion of the adoption above in Revenue Recognition .

10


 

In November 2016, the FASB issued Accounting Standards Update ASU 2016-18 “Statement of Cash Flows” (Topic 230); Restricted Cash (ASU 2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this ASU require retrospective application to each period presented. The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires t he entities to present statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than on e line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial positio n, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

(In thousands)

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

$

307,068

 

 

$

243,345

 

 

$

158,537

 

 

$

141,135

 

Restricted cash

 

410

 

 

 

221

 

 

 

79

 

 

 

 

Restricted cash included in Other assets

 

561

 

 

 

506

 

 

 

255

 

 

 

255

 

Total Cash, cash equivalents and restricted cash per statement of cash flows

$

308,039

 

 

$

244,072

 

 

$

158,871

 

 

$

141,390

 

Amounts included in restricted cash represent those amounts required to be set aside to cover the Company’s self-funded employee health insurance. Restricted cash included in other assets on the statement of financial position relates to cash collateralized standby letters of credit in connection with obligations under facility leases, which is included with other assets in the consolidated balance sheet due to the long-term nature of the letters of credit.

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payment arrangements with employees are accounted for under ASC 718, while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50, before the amendments, differed significantly from ASC 718. However, FASB concluded that awards granted to employees are economically similar to awards granted to nonemployees and therefore two different accounting models were not justified. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods therein with early adoption permitted. The Company early adopted this guidance beginning June 1, 2018. The adoption of this guidance did not have an impact on its consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (Topic 842). The main objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company has implemented a process to identify its outstanding lease portfolio and is currently evaluating its outstanding leases to determine the impact the new standard will have on its financial statements.

In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating whether it will adopt this guidance early. The Company does not expect the adoption of this guidance to have a significant impact on its consolidated financial statements.

11


 

In February 2018, the FASB issued Accounting Standards Update 2018-02, ‘Income Statement—Reporting Comprehensive Income’ (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion t hereof) is recorded. ASC 740-10-35-4 requires that deferred tax assets and liabilities should be adjusted to account for any changes in tax laws or rates within the period that the enactment of these changes occurs and any adjustments to flow through incom e from continuing operations. Since the adjustments due to the Tax Cuts and Jobs Act are required to flow through income from continuing operations, the tax effects of items within accumulated other comprehensive income known now as “stranded tax effects,” do not reflect the appropriate tax rate. As such, FASB issued ASU 2018-02, in order to address these stranded income tax effects. The new standard requires entities to disclose the following:

 

A description of the accounting policy for releasing income tax effects from AOCI;

 

Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act, and

 

Information about the other income tax effects that are reclassified.

 

The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In March 2018, the FASB issued Accounting Standards Update 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118’. The ASU adds seven paragraphs to ASC 740, Income Taxes, that contain SEC guidance related to SAB 118 (codified as SEC SAB Topic 5.EE, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”), which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment which is the period that includes December 22, 2017. The measurement period should not extend beyond one year from the enactment date. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

(3) Share-based Compensation

During the three‑month periods ended June 30, 2018 and 2017, the Company recognized share-based compensation expense of $5.2 million and $11.7 million, respectively. During the six‑month periods ended June 30, 2018 and 2017, the Company recognized share-based compensation expense of $11.1 million and $19.6 million, respectively. Activity in options and restricted stock during the six-month period ended June 30, 2018 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended June 30, 2018 and 2017 were approximately $14.32 and $7.24, respectively The weighted average fair value per share of options granted to employees for the six-month periods ended June 30, 2018 and 2017 were approximately $12.84 and $10.75, respectively.

The following table summarizes share-based compensation expense included within the consolidated statements of operations:

 

 

 

For the three-month

period ended June 30,

 

 

For the six-month

period ended June 30,

 

(In millions)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Research and development expense

 

$

1.5

 

 

$

3.8

 

 

$

3.2

 

 

$

6.4

 

Selling, general and administrative expense

 

 

3.7

 

 

 

7.9

 

 

 

7.9

 

 

 

13.2

 

Total

 

$

5.2

 

 

$

11.7

 

 

$

11.1

 

 

$

19.6

 

 

12


 

A summary of share-based compensation activity for the six-month period ended June 30, 2018 is presented below:

Stock Option Activity

 

 

 

Number of

Shares

(In   thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

 

 

Intrinsic

Value

(In   thousands)

 

Balance at January 1, 2018

 

 

8,930

 

 

$

29.46

 

 

 

 

 

 

 

 

 

Granted

 

 

705

 

 

 

25.12

 

 

 

 

 

 

 

 

 

Cancelled

 

 

(401

)

 

 

27.26

 

 

 

 

 

 

 

 

 

Exercised

 

 

(638

)

 

 

21.18

 

 

 

 

 

 

 

 

 

Balance at June 30, 2018

 

 

8,596

 

 

$

29.82

 

 

 

5.9

 

 

$

19,315

 

Vested and expected to vest at

    June 30, 2018

 

 

8,545

 

 

$

29.85

 

 

 

5.9

 

 

$

19,096

 

Vested and exercisable at

    June 30, 2018

 

 

6,669

 

 

$

30.51

 

 

 

5.1

 

 

$

13,284

 

 

Restricted Stock and Performance Stock Unit Activity

 

(In thousands)

 

 

 

 

Restricted Stock and Performance Stock Units

 

Number of Shares

 

Nonvested at January 1, 2018

 

 

697

 

Granted

 

 

 

Vested

 

 

(143

)

Forfeited

 

 

(106

)

Nonvested at June 30, 2018

 

 

448

 

 

Unrecognized compensation cost for unvested stock options, restricted stock awards and performance stock units as of June 30, 2018 totaled $30.3 million and is expected to be recognized over a weighted average period of approximately 1.8 years.

During the three‑month period ended June 30, 2018, the Company repurchased 16,339 shares of common stock at an average price of $23.58 per share or approximately $0.4 million. During the six‑month period ended June 30, 2018, the Company repurchased 63,124 shares of common stock at an average price of $25.15 per share or approximately $1.6 million. The share repurchase consists primarily of common stock withheld to cover the tax liability in connection with the settlement of vested restricted stock units and stock options that were exercised in the three and six-month period ended June 30, 2018.

13


 

(4) Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and six-month periods ended June 30, 2018 and 2017:

 

(In thousands, except per share data)

 

Three-month period ended June 30, 2018

 

 

Three-month period ended June 30, 2017

 

 

Six-month period ended June 30, 2018

 

 

Six-month period ended June 30, 2017

 

Basic and diluted