Teligent, Inc. Announces First Quarter 2018 Results

May 8, 2018

BUENA, N.J., May 08, 2018 (GLOBE NEWSWIRE) -- Teligent, Inc. (NASDAQ:TLGT), a New Jersey-based specialty generic pharmaceutical company, today announced its financial results for the first quarter ended March 31, 2018.

First Quarter 2018 Highlights

  • The Company adopted ASC 606: Revenue from Contracts with Customers ("ASC 606") issued by the Financial Accounting Standards Board on January 1, 2018. To understand the financial impact of adopting ASC 606, see the Reconciliation of Revenue (net), Cost of Revenue and Gross Margin table included

  • After adoption of ASC 606, total revenue of $14.5 million in the first quarter of 2018, a decrease of 26% over the same period in 2017. Total revenue was driven primarily by $8.9 million of sales generated by our U.S. generic topical and injectable pharmaceutical products, a decrease of 34% over the same quarter in 2017 and $4.3 million of international revenues, an increase of 46% over the same quarter in 2017

  • After adoption of ASC 606, gross margin of 36% for the first quarter of 2018, a decrease from the 55% reported in the same period in 2017

  • Operating loss of $3.5 million in the first quarter of 2018, compared to operating income of $3.0 million in the same period in 2017

  • $3.4 million of product development and research expenses in the first quarter of 2018, compared to $3.7 million for the same period in 2017

  • Due to the fluctuation in foreign exchange rates during the first quarter of 2018, we recorded a non-cash gain in the amount of $1.3 million related to the foreign currency translation of our intercompany loans to three of our wholly-owned subsidiaries; and other balances held in currencies other than local currency, compared to a non-cash gain in the amount of $1.1 million in the same period in 2017

  • Adjusted EBITDA, before product development and research expenses, in the first quarter of 2018 was $1.9 million, compared to $8.6 million for the same period in 2017

  • Year to date, the Company received approval for four ANDAs in the U.S.

  • Year to date, the Company launched four new products in the U.S.

“We are pleased with our solid first quarter 2018 financial results, particularly the performance of our US portfolio of topical and injectable pharmaceutical products as well as the continued strong performance and further growth opportunities for our Canadian operations,” said Jason Grenfell-Gardner, President and Chief Executive Officer.

Mr. Grenfell-Gardner continued, “The expansion of our Buena, New Jersey manufacturing facility continues to progress, achieving two major milestones.  I am proud to report the facility went clean on April 20th and manufactured our first injectable engineering batch on April 24th. In addition, we received four ANDA approvals year to date, Betamethasone Dipropionate Lotion USP (Augmented) 0.05%, Halobetasol Propionate Ointment, 0.05%, Ciclopirox Shampoo, 1%, and Clobetasol Propionate Cream USP, 0.05%.  Collectively, these four products represent $189.6 million of addressable market per IQVIA data.”

“We now have 29 ANDAs on file with the US FDA. Based on IQVIA data as of March 2018, these 29 ANDAs represent a total addressable market of approximately $1.8 billion.  We remain confident in the growth of our business, our plans to work closely with all members of the organization to improve profitability, and our ability to deliver gross margin and EBITDA in line with our 2018 guidance.” Mr. Grenfell-Gardner concluded.

About Teligent, Inc.

Teligent is a specialty generic pharmaceutical company. Our mission is to be a leading player in the specialty generic prescription drug market. Learn more on our website www.teligent.com.

Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions, and other statements contained in this press release that are not historical facts and statements identified by words such as “plan,” “believe,” “continue,” “should” or words of similar meaning. Factors that could cause actual results to differ materially from these expectations include, but are not limited to: our inability to meet current or future regulatory requirements in connection with existing or future ANDAs; our inability to achieve profitability; our failure to obtain FDA approvals as anticipated; our inability to execute and implement our business plan and strategy; the potential lack of market acceptance of our products; our inability to protect our intellectual property rights; changes in global political, economic, business, competitive, market and regulatory factors; and our inability to complete successfully future product acquisitions. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under the caption “Risk Factors” in Teligent, Inc.’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other periodic reports we file with the Securities and Exchange Commission. Teligent, Inc. does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

In addition to reporting financial information required in accordance with U.S. generally accepted accounting principles (GAAP), Teligent is also presenting EBITDA and Adjusted EBITDA which are non-GAAP financial measures. Since EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs are non-GAAP financial measures, they should not be used in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, Teligent's definition of Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies.

Adjusted EBITDA, as defined by the Company, is calculated as follows:

Net income (loss), plus:

Depreciation expense

Amortization of intangibles

Loss on impairment

Interest expense, net

Non-cash interest expense

Provision for income taxes

Inventory step up and acquisition costs related to acquisitions

Foreign currency exchange gain/loss

Non-cash expenses, such as share-based compensation expense

The Company believes that Adjusted EBITDA is a meaningful indicator, to both Company management and investors, of the past and expected ongoing operating performance of the Company. EBITDA is a commonly used and widely accepted measure of financial performance. Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance.

While the Company uses EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs in managing and analyzing its business and financial condition and believes these non-GAAP financial measures to be useful to investors in evaluating the Company's performance, it is open to certain shortcomings. EBITDA and Adjusted EBITDA do not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omit share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense.  Due to the inherent limitations of EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs, the Company's management utilizes comparable GAAP financial measures to evaluate the business in conjunction with EBITDA and Adjusted EBITDA and encourages investors to do likewise.

The Company also presents a non-GAAP financial measure of adjusted net income (loss) and adjusted net income (loss) per diluted share, to show the adjusted net income when EBITDA adjustments are added back or subtracted out of the traditional GAAP reported net income (loss).  Adjusted diluted earnings per share, as defined by the Company, is equal to adjusted net income divided by the actual or anticipated diluted share count for the applicable period.

 
TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share information)
   
  Three months ended March 31,
  2018   2017
Revenue, net $ 14,545     $ 19,891  
       
Costs and Expenses:      
 Cost of revenues 9,325     8,957  
 Selling, general and administrative expenses 5,360     4,299  
 Product development and research expenses 3,391     3,668  
 Total costs and expenses 18,076     16,924  
Operating (loss) income (3,531 )   2,967  
       
Other Income (Expense):      
 Foreign currency exchange gain/(loss) 1,325     1,079  
 Interest and other expense, net (2,572 )   (3,132 )
(Loss) income before income tax expense (4,778 )   914  
       
Income tax expense 24     83  
       
Net (loss) income attributable to common shareholders $ (4,802 )   $ 831  
       
Basic and diluted (loss) income per share $ (0.09 )   $ 0.02  
       
Weighted average shares of common stock outstanding:      
 Basic and diluted shares 53,458,513     53,195,580  


TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share information)

  March 31,
2018
  December 31,
2017
      (Audited)
ASSETS      
Current assets:      
 Cash and cash equivalents $ 13,235     $ 26,692  
 Accounts receivable, net 13,415     18,143  
 Inventories 17,786     16,075  
 Prepaid expenses and other receivables 2,631     3,622  
 Total current assets 47,067     64,532  
Property, plant and equipment, net 76,708     68,355  
Intangible assets, net 56,588     56,017  
Goodwill 452     471  
Other 277     611  
 Total assets $ 181,092     $ 189,986  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
 Accounts payable $ 5,937     $ 10,595  
 Accrued expenses 11,138     13,502  
 Total current liabilities 17,075     24,097  
       
Convertible 3.75% senior notes, net of debt discount and debt issuance costs (face of $143,750) 123,571     120,977  
Deferred tax liability 153     159  
 Total liabilities 140,799     145,233  
       
Stockholders’ equity:      
 Common stock, $0.01 par value, 100,000,000 shares authorized;      
  53,496,889 and 53,400,281 shares issued and outstanding      
   as of March 31, 2018 and December 31, 2017, respectively 554     554  
 Additional paid-in capital 106,958     106,312  
 Accumulated deficit (64,896 )   (60,094 )
 Accumulated other comprehensive loss, net of taxes (2,323 )   (2,019 )
 Total stockholders’ equity 40,293     44,753  
 Total liabilities and stockholders' equity $ 181,092     $ 189,986  


TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2018 and 2017
(in thousands)

  March 31, 2018   March 31, 2017
Cash flows from operating activities:      
 Net (loss) income $ (4,802 )   $ 831  
 Non-cash expenses 3,865     3,395  
 Changes in operating assets and liabilities (2,475 )   (2,340 )
       
Net cash (used in) provided by operating activities (3,412 )   1,886  
       
Net cash used in investing activities (9,758 )   (8,551 )
       
Net cash provided by financing activities     5  
       
Effect of exchange rate on cash and cash equivalents (287 )   132  
Net decrease in cash and cash equivalents (13,170 )   (6,660 )
Cash and cash equivalents at beginning of period 26,692     66,006  
       
Cash and cash equivalents at end of period $ 13,235     $ 59,478  


TELIGENT, INC. AND SUBSIDIARIES
GROSS TO NET DEDUCTIONS
(in thousands)
  Three months ended March 31,
  2018   2017
       
Gross product sales $ 36,548     $ 54,300  
       
Reduction to gross product sales:      
 Chargebacks and billbacks 16,915     30,015  
 Wholesaler fees for service 635      
 Sales discounts and other allowances 5,762     7,849  
Total reduction to gross product sales 23,312     37,864  
       
Product sales, net 13,236     16,436  
Contract manufacturing product sales 1,298     3,417  
Research and development services and other income 11     38  
       
Total revenue, net $ 14,545     $ 19,891  


TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
   
  Three months ended March 31,
  2018   2017
       
Net (loss) income $ (4,802 )   $ 831  
       
Depreciation 561     395  
Amortization of intangibles 791     687  
Loss on impairment 22      
Interest (income)/expense, net (22 )   851  
Non-cash interest expense 2,594     2,281  
Provision for income taxes 24     83  
EBITDA (832 )   5,128  
       
Foreign currency exchange gain (1,325 )   (1,079 )
Non-cash stock-based compensation expense 620     843  
Adjusted EBITDA (1,537 )   4,892  
       
Product development and research expenses 3,391     3,668  
       
Adjusted EBITDA, before product development and research expenses 1,854     8,560  


TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTED NET (LOSS) INCOME
(in thousands, except share and per share information)
   
  Three months ended March 31,
  2018   2017
       
Net (loss) income $ (4,802 )   $ 831  
       
Non-cash interest expense 2,594     2,281  
Provision for income taxes 24     83  
Amortization of intangibles 791     687  
Loss on impairment 22      
Foreign currency exchange gain (1,325 )   (1,079 )
Non-cash stock-based compensation expense 620     843  
Adjusted net (loss) income $ (2,076 )   $ 3,646  
       
Non-GAAP adjusted net (loss) income per diluted share $ (0.04 )   $ 0.07  


TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF REVENUE, NET, COST OF REVENUES AND GROSS MARGIN
(in thousands)
   
  Three months ended March 31,
  2018   2018 *   2017
           
Revenue, net $ 15,180     $ 15,180     $ 19,891  
Wholesaler fees for service 635          
Revenue, net 14,545     15,180     19,891  
           
Cost of revenue 9,960     9,960     8,957  
Wholesaler fees for service 635          
Cost of revenue 9,325     9,960     8,957  
           
Gross margin 34 %   34 %   55 %
Wholesaler fees for service 2 %   0 %   7 %
Gross margin 36 %   34 %   62 %

* These figures represent financial results for the three months ended March 31, 2018 had ASC 606 not been adopted. 

Contact: Damian Finio
Teligent, Inc.
(856) 336-9117
www.teligent.com 

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Source: Teligent, Inc.