Full Press Release Details
| Media Contact: | Ron Rogers | Investor Contact: | Scott Gleason | |||||
| (801) 584-3065 | (801) 584-1143 | |||||||
| rrogers@myriad.com | sgleason@myriad.com |
Myriad Genetics Reports Fiscal First-Quarter 2016 Financial Results
SALT LAKE CITY, UTAH, November 3, 2015 Myriad Genetics, Inc. (NASDAQ: MYGN) today announced financial results for its fiscal first-quarter
2016, provided an update on recent business highlights, maintained its fiscal year 2016 financial guidance and provided fiscal second-quarter 2016 financial guidance.
We were very pleased with our results in the first quarter and reiterate our fiscal 2016 guidance, said Mark C. Capone, president and chief
executive officer of Myriad. More importantly, we continued the excellent progress on our five-year plan to transform Myriad into a diversified global pioneer in personalized medicine. We are now beginning to see the benefits of the
substantial investments the Company has made in our industry-leading pipeline and international expansion, which we believe will drive significant shareholder value over the next five years.
Financial Highlights
| Fiscal First Quarter | ||||||||||||
| ($ in millions) | 2016 | 2015 | % Change | |||||||||
| Molecular Diagnostic Testing Revenue | ||||||||||||
| Hereditary cancer testing revenue | $ | 156.7 | $ | 150.6 | 4 | % | ||||||
| Vectra DA testing revenue | 11.4 | 10.6 | 8 | % | ||||||||
| Other testing revenue | 3.8 | 3.3 | 15 | % | ||||||||
| Total molecular diagnostic testing revenue | 171.9 | 164.5 | 5 | % | ||||||||
| Pharmaceutical and clinical service revenue | 11.6 | 4.3 | 170 | % | ||||||||
| Total Revenue | $ | 183.5 | $ | 168.8 | 9 | % |
| Fiscal First Quarter | ||||||||||||
| ($ in millions) | 2016 | 2015 | % Change | |||||||||
| Total Revenue | $ | 183.5 | $ | 168.8 | 9 | % | ||||||
| Gross Profit | 147.0 | 133.9 | 10 | % | ||||||||
| Gross Margin | 80.1 | % | 79.3 | % | ||||||||
| Operating Expenses | 103.7 | 108.0 | (4 | %) | ||||||||
| Operating Income | 43.3 | 25.9 | 67 | % | ||||||||
| Operating Margin | 23.6 | % | 15.3 | % | ||||||||
| Adjusted Operating Income | 46.5 | 29.3 | 59 | % | ||||||||
| Adjusted Operating Margin | 25.3 | % | 17.4 | % | ||||||||
| Net Income | 26.6 | 16.0 | 66 | % | ||||||||
| Diluted EPS | 0.37 | 0.21 | 76 | % | ||||||||
| Adjusted EPS | $ | 0.41 | $ | 0.25 | 64 | % |
Fiscal Second-Quarter
and Fiscal Full-Year 2016 Financial Guidance
Below is a table summarizing Myriad s fiscal year 2016 and fiscal second-quarter
2016 financial guidance:
| Revenue | Adjusted Earnings Per Share | GAAP Diluted Earnings Per Share | ||||||||||
| Fiscal Year 2016 | $ | 750-$770 million | $ | 1.60-$1.65 | $ | 1.45-$1.50 | ||||||
| Fiscal Second Quarter 2016 | $ | 188-$190 million | $ | 0.40-$0.42 | $ | 0.36-$0.38 |
These projections are forward-looking statements and are subject to the risks summarized in the safe harbor
statement at the end of this press release. The Company will provide further details on its business outlook during the conference call it is holding today to discuss its fiscal first-quarter financial results and fiscal second-quarter and full
fiscal year 2016 financial guidance.
Conference Call and Webcast
A conference call will be held today, Tuesday, November 3, 2015, at 4:30 p.m. Eastern Time to discuss Myriad s financial results for
the fiscal first quarter, business developments and financial guidance. The dial-in number for domestic callers is (800) 706-9302. International callers may dial (303) 223-4366. All callers will be asked to reference reservation number
21779749. An archived replay of the call will be available for seven days by dialing (800) 633-8284 and entering the reservation number above. The conference call along with a slide presentation will also will be available through a live
Webcast at www.myriad.com.
About Myriad Genetics
Myriad Genetics Inc., is a leading personalized medicine company dedicated to being a trusted advisor transforming patient lives worldwide with
pioneering molecular diagnostics. Myriad discovers and commercializes molecular diagnostic tests that: determine the risk of developing disease, accurately diagnose disease, assess the risk of disease progression, and guide treatment decisions
across six major medical specialties where molecular diagnostics can significantly improve patient care
and lower healthcare costs. Myriad is focused on three strategic imperatives: transitioning and expanding its hereditary cancer testing markets, diversifying its product portfolio through the
introduction of new products and increasing the revenue contribution from international markets. For more information on how Myriad is making a difference, please visit the Company s website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, myPath, myRisk, myRisk Hereditary Cancer, myChoice, myPlan,
BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice HRD, Vectra and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its wholly owned subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (Unaudited)
| (in millions, except per share amounts) | Three Months Ended | |||||||
| Sept. 30, 2015 | Sept. 30, 2014 | |||||||
| Molecular diagnostic testing | $ | 171.9 | $ | 164.5 | ||||
| Pharmaceutical and clinical services | 11.6 | 4.3 | ||||||
| Total revenue | 183.5 | 168.8 | ||||||
| Costs and expenses: | ||||||||
| Cost of molecular diagnostic testing | 30.9 | 32.8 | ||||||
| Cost of pharmaceutical and clinical services | 5.6 | 2.1 | ||||||
| Research and development expense | 17.2 | 22.6 | ||||||
| Selling, general, and administrative expense | 86.5 | 85.4 | ||||||
| Total costs and expenses | 140.2 | 142.9 | ||||||
| Operating income | 43.3 | 25.9 | ||||||
| Other income (expense): | ||||||||
| Interest income | 0.1 | 0.1 | ||||||
| Other | 0.1 | (0.1 | ) | |||||
| Total other income | 0.2 | |||||||
| Income before income taxes | 43.5 | 25.9 | ||||||
| Income tax provision | 16.9 | 9.9 | ||||||
| Net income | $ | 26.6 | $ | 16.0 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.39 | $ | 0.22 | ||||
| Diluted | $ | 0.37 | $ | 0.21 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 68.7 | 72.8 | ||||||
| Diluted | 72.1 | 76.1 |
Consolidated Balance Sheets (Unaudited)
| (in millions) | Sept. 30, 2015 | Jun. 30, 2015 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 87.4 | $ | 64.1 | ||||
| Marketable investment securities | 68.0 | 80.7 | ||||||
| Prepaid expenses | 5.6 | 12.5 | ||||||
| Inventory | 34.3 | 25.1 | ||||||
| Trade accounts receivable, less allowance for doubtful accounts of $6.2 September 30, 2015 and $7.6 June 30, 2015 | 83.4 | 85.8 | ||||||
| Deferred taxes | 13.5 | 13.5 | ||||||
| Prepaid taxes | 13.5 | |||||||
| Other receivables | 1.6 | 1.9 | ||||||
| Total current assets | 307.3 | 283.6 | ||||||
| Equipment, leasehold improvements and property, net | 64.9 | 67.2 | ||||||
| Long-term marketable investment securities | 43.1 | 40.6 | ||||||
| Long-term deferred taxes | ||||||||
| Intangibles, net | 189.4 | 192.6 | ||||||
| Goodwill | 177.3 | 177.2 | ||||||
| Other assets | 5.0 | 5.0 | ||||||
| Total assets | $ | 787.0 | $ | 766.2 | ||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 15.8 | $ | 21.1 | ||||
| Accrued liabilities | 41.8 | 46.1 | ||||||
| Deferred revenue | 1.4 | 1.5 | ||||||
| Total current liabilities | 59.0 | 68.7 | ||||||
| Unrecognized tax benefits | 27.2 | 26.4 | ||||||
| Other long-term liabilities | 7.1 | 8.8 | ||||||
| Long-term deferred taxes | 6.6 | 0.2 | ||||||
| Total liabilities | 99.9 | 104.1 | ||||||
| Stockholders equity: | ||||||||
| Common stock, 73.5 and 73.5 shares outstanding at June 30, 2015 and 2014 respectively | 0.7 | 0.7 | ||||||
| Additional paid-in capital | 772.3 | 745.4 | ||||||
| Accumulated other comprehensive loss | (7.1 | ) | (7.0 | ) | ||||
| Accumulated deficit | (78.8 | ) | (77.0 | ) | ||||
| Total stockholders equity | 687.1 | 662.1 | ||||||
| Total liabilities and stockholders equity | $ | 787.0 | $ | 766.2 |
Consolidated Statement of Cash Flows (Unaudited)
| (in millions) | Sept. 30, 2015 | Sept. 30, 2014 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 26.6 | $ | 16.0 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 6.8 | 6.0 | ||||||
| Loss on disposition of assets | (0.4 | ) | 0.1 | |||||
| Share-based compensation expense | 8.7 | 6.9 | ||||||
| Bad debt expense | 6.0 | 7.1 | ||||||
| Deferred income taxes | 11.4 | 2.7 | ||||||
| Unrecognized tax benefits | 0.9 | 0.3 | ||||||
| Excess tax benefit from share-based compensation | (4.9 | ) | (1.7 | ) | ||||
| Gain on sale of marketable investment securities | ||||||||
| Changes in assets and liabilities: | ||||||||
| Prepaid expenses | 7.0 | (2.5 | ) | |||||
| Trade accounts receivable | (3.6 | ) | (1.5 | ) | ||||
| Other receivables | 0.2 | (7.5 | ) | |||||
| Inventory | (9.2 | ) | (0.9 | ) | ||||
| Prepaid taxes | (13.5 | ) | (5.1 | ) | ||||
| Accounts payable | (5.3 | ) | 2.6 | |||||
| Accrued liabilities | (5.7 | ) | (15.8 | ) | ||||
| Deferred revenue | (0.1 | ) | 0.3 | |||||
| Net cash provided by operating activities | 24.9 | 7.0 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures for equipment and leasehold improvements | (1.0 | ) | (11.5 | ) | ||||
| Restricted cash | (22.7 | ) | ||||||
| Purchases of marketable investment securities | (21.8 | ) | (5.9 | ) | ||||
| Proceeds from maturities and sales marketable investment securities | 31.8 | 67.6 | ||||||
| Net cash used in investing activities | 9.0 | 27.5 | ||||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from common stock issued under share-based compensation plans | 22.8 | 15.1 | ||||||
| Excess tax benefit from share-based compensation | 4.9 | 1.7 | ||||||
| Repurchase and retirement of common stock | (38.0 | ) | (45.6 | ) | ||||
| Net cash used in financing activities | (10.3 | ) | (28.8 | ) | ||||
| Effect of Foreign exchange rates on cash and cash equivalents | (0.3 | ) | (0.7 | ) | ||||
| Net increase in cash and cash equivalents | 23.3 | 5.0 | ||||||
| Cash and cash equivalents at beginning of year | 64.1 | 64.8 | ||||||
| Cash and cash equivalents at end of year | $ | 87.4 | $ | 69.8 |
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to the Company s continued progress on its five-year plan to transform the Company into a diversified global pioneer in personalized medicine; the benefits of the Company s investments made in its pipeline and
international expansion; the Company s belief that its substantial investments will drive significant shareholder value over the next five years; the Company s fiscal second quarter 2016 and fiscal full year 2016 financial guidance under
the caption Fiscal Second-Quarter and Fiscal Full Year 2016 Financial Guidance ; and the Company s strategic directives under the caption About Myriad Genetics. These forward-looking statements are based on
management s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described or implied in the forward-looking statements.
These risks include, but are not limited to: the risk that sales and profit margins of our existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related
to our ability to transition from our existing product portfolio to our new tests; risks related to changes in the governmental or private insurers reimbursement levels for our tests or our ability to obtain reimbursement for our new tests at
comparable levels to our existing tests; risks related to increased competition and the development of new competing tests and services; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic
tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and pharmaceutical and clinical services, including our ability to
successfully generate revenue outside the United States; the risk that licenses to the technology underlying our molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on
satisfactory terms; risks related to delays or other problems with operating our laboratory testing facilities; risks related to public concern over our genetic testing in general or our tests in particular; risks related to regulatory requirements
or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to our ability to obtain new corporate collaborations or licenses and acquire new
technologies or businesses on satisfactory terms, if at all; risks related to our ability to successfully integrate and derive benefits from any technologies or businesses that we license or acquire, including but not limited to our acquisition of a
healthcare clinic in Germany; risks related to our projections about the potential market opportunity for our products; the risk that we or our licensors may be unable to protect or that third parties will infringe the proprietary technologies
tests; the risk of patent-infringement claims or challenges to the validity of our patents; risks related to changes in intellectual property laws covering our molecular diagnostic tests and
pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decision in the lawsuit brought against us by the Association for Molecular Pathology et al; risks of new, changing
and competitive technologies and regulations in the United States and internationally; and other factors discussed under the heading Risk Factors contained in Item 1A of our Annual report on
Form 10-K for the fiscal year ended June 30, 2015, which has been filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in our
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Statement regarding use of non-GAAP financial measures
In this press release, the Company s financial results and financial guidance are provided in accordance with accounting principles generally accepted in
the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis
of the Company s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Company s business. A reconciliation of the GAAP
financial results to non-GAAP financial results is included in the attached financial statements.
Following is a description of the adjustments made to
GAAP financial measures:
The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the
reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Reconciliation of GAAP to Non-GAAP Financial Measures
for the Three Months ended September 30, 2015 and 2014
(Unaudited data in thousands, except per share amount)
| Three Months Ended | ||||||||
| Sept. 30, 2015 | Sept. 30, 2014 | |||||||
| GAAP Cost of molecular diagnostic testing | $ | 30.9 | $ | 32.8 | ||||
| GAAP Cost of pharmaceutical and clinical services | 5.6 | 2.1 | ||||||
| Acquisition - amortization of intangible assets | ||||||||
| Non-GAAP COGS | $ | 36.5 | $ | 34.9 | ||||
| Non-GAAP Gross Margin | 80 | % | 79 | % | ||||
| GAAP Research and Development | $ | 17.2 | $ | 22.6 | ||||
| Acquisition - amortization of intangible assets | (0.1 | ) | (0.1 | ) | ||||
| Non-GAAP R&D | $ | 17.1 | $ | 22.5 | ||||
| GAAP Selling, General and Administrative | $ | 86.5 | $ | 85.4 | ||||
| Acquisition - amortization of intangible assets | (3.1 | ) | (3.3 | ) | ||||
| Non-GAAP SG&A | $ | 83.4 | $ | 82.1 | ||||
| GAAP Operating Income | $ | 43.3 | $ | 25.9 | ||||
| Acquisition - amortization of intangible assets | 3.2 | 3.4 | ||||||
| Non-GAAP Operating Income | $ | 46.5 | $ | 29.3 | ||||
| Non-GAAP Operating Margin | 25 | % | 17 | % | ||||
| GAAP Net Income | $ | 26.6 | $ | 16.0 | ||||
| Acquisition - amortization of intangible assets | 3.2 | 3.4 | ||||||
| Non-GAAP Net Income | $ | 29.8 | $ | 19.4 | ||||
| GAAP Diluted EPS | $ | 0.37 | $ | 0.21 | ||||
| Non-GAAP Diluted EPS | $ | 0.41 | $ | 0.25 | ||||
| Diluted shares outstanding | 72.1 | 76.1 |
Free Cash Flow Reconciliation
(Unaudited data in thousands)
| Three Months Ended | ||||||||
| Sept. 30, 2015 | Sept. 30, 2014 | |||||||
| GAAP cash flow from operations | $ | 24.9 | $ | 7.0 | ||||
| Capital expenditures | (1.0 | ) | (11.5 | ) | ||||
| Free cash flow | $ | 23.9 | $ | (4.5 | ) |
Reconciliation of GAAP to Non-GAAP for Fiscal Year 2016 and Fiscal Second Quarter 2016 Financial Guidance
The Company s future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from guidance
set forth below. Some of the factors that could affect the Company s financial results are stated in the safe harbor statement of this press release. More information on potential factors that could affect the Company s financial results
are included under the heading Risk Factors contained in Item 1A in the Company s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from
time to time in the Company s Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
| Fiscal Year 2016 | ||
| Diluted net income per share | ||
| GAAP diluted net income per share | $1.45 - $1.50 | |
| Acquisition - amortization of intangible assets | 0.15 | |
| Non-GAAP diluted net income per share | $1.60 - $1.65 | |
| Fiscal Second Quarter 2016 | ||
| Diluted net income per share | ||
| GAAP diluted net income per share | $0.36 - $0.38 | |
| Acquisition - amortization of intangible assets | 0.04 | |
| Non-GAAP diluted net income per share | $0.40 - $0.42 |