Teligent, Inc. Announces Second Quarter 2017 Results
Second Quarter 2017 Highlights
- Total revenues of
$18.4 million in the second quarter of 2017, an increase of 7% over the same quarter in 2016. - Total net revenues generated from the sale of our generic topical and injectable pharmaceutical products for the second quarters of 2017 and 2016 of
$15.9 million and$11.1 million , respectively, an increase of 43% over the same quarter last year. - Total net revenues generated from contract manufacturing services and other income for the second quarters of 2017 and 2016 of
$2.5 million and$6.0 million , respectively. - Total net international revenues for the second quarters of 2017 and 2016 of
$3.6 million and$2.8 million , respectively. - Gross margin for the second quarter of 2017 equaled 44% as compared to 56% in the second quarter of 2016.
- Operating loss was
$1.8 million in the second quarter of 2017, compared to operating income of$1.1 million in the same quarter in 2016. Operating income was$1.2 million for the six months endedJune 30, 2017 , compared to operating income of$1.9 million in 2016. - Our operating results in the second quarter of 2017 include
$5.1 million in research and development costs, compared to$4.8 million in the same quarter in 2016. - Adjusted EBITDA (as defined and reconciled to GAAP) for the second quarter of 2017 and 2016 were
$0.3 million and$3.0 million , respectively. - Adjusted loss per fully diluted share (as defined and reconciled to GAAP) for the second quarter of 2017 was
$0.01 , compared to adjusted income per fully diluted share (as defined and reconciled to GAAP) for the second quarter of 2016 of$0.02 . - As a result of the fluctuation in foreign exchange rates during the second quarter of 2017, we recorded a non-cash gain in the amount of
$3.8 million related to the foreign currency translation of our intercompany loans to three of our wholly-owned subsidiaries, compared to a non-cash loss in the amount of$0.6 million in the same quarter in 2016. - On
July 21, 2017 , the Company received approval from theU.S. Food and Drug Administration ("FDA") of one Abbreviated New Drug Application ("ANDA") for a topical generic prescription product, Erythromycin Topical Gel USP, 2%, for a total of three approvals in 2017. - In
Canada , we filed four Abbreviated New Drug Submissions ("ANDSs") and received three approvals for injectable generic prescription drug products during the second quarter endedJune 30, 2017 .
Revised Full Year 2017 Financial Guidance
- The Company now expects total revenue between
$75 million and $85 million for the year endingDecember 31, 2017 . - The Company now anticipates gross margin of 47% to 50% for the year ending
December 31, 2017 .
“During the second quarter, we expanded our portfolio with two product launches, and maintained a strong market presence in our existing portfolio of products,’’ said
Mr. Grenfell-Gardner continued, “We continue to progress on the significant expansion of our manufacturing facility in
“We filed two additional ANDAs in the second quarter, and after the recent approval of Erythromycin Topical Gel, we now have 34 ANDAs on file with the US FDA and based on
The Company will hold a conference call at
The Company invites you to listen to the call by dialing 1-866-393-8366. International participants should call 1-409-350-3154. Participants should ask to be joined into the
This call is being webcast and can be accessed in the Investor Relations Section of
About
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
Non-GAAP Financial Measures
In addition to reporting financial information required in accordance with U.S. generally accepted accounting principles (GAAP),
Adjusted EBITDA, as defined by the Company, is calculated as follows:
Net income (loss), plus:
Depreciation expense
Amortization of intangibles
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 the 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) | |||||||||||||||
(unaudited) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Product sales, net | $ | 18,295 | $ | 17,025 | $ | 38,148 | $ | 32,447 | |||||||
Research and development services and other income | 113 | 113 | 151 | 348 | |||||||||||
Total revenues | 18,408 | 17,138 | 38,299 | 32,795 | |||||||||||
Costs and Expenses: | |||||||||||||||
Cost of revenues | 10,371 | 7,582 | 19,328 | 15,284 | |||||||||||
Selling, general and administrative expenses | 4,706 | 3,712 | 9,005 | 7,119 | |||||||||||
Product development and research expenses | 5,113 | 4,768 | 8,781 | 8,479 | |||||||||||
Total costs and expenses | 20,190 | 16,062 | 37,114 | 30,882 | |||||||||||
Operating (loss) income | (1,782 | ) | 1,076 | 1,185 | 1,913 | ||||||||||
Other Income (Expense): | |||||||||||||||
Foreign currency exchange gain (loss) | 3,822 | (622 | ) | 4,901 | 931 | ||||||||||
Interest and other expense, net | (2,936 | ) | (3,332 | ) | (6,068 | ) | (6,650 | ) | |||||||
(Loss) income before income tax expense | (896 | ) | (2,878 | ) | 18 | (3,806 | ) | ||||||||
Income tax expense | 23 | 23 | 106 | 45 | |||||||||||
Net loss | $ | (919 | ) | $ | (2,901 | ) | $ | (88 | ) | $ | (3,851 | ) | |||
Basic and diluted loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | 0.00 | $ | (0.07 | ) | ||||
Weighted average shares of common stock outstanding: | |||||||||||||||
Basic and diluted shares | 53,304,407 | 53,059,799 | 53,250,109 | 53,045,576 | |||||||||||
TELIGENT, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except shares and per share information) | |||||||
June 30, | December 31, | ||||||
2017 | 2016* | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 50,216 | $ | 66,006 | |||
Accounts receivable, net | 27,272 | 21,735 | |||||
Inventories | 14,437 | 12,708 | |||||
Prepaid expenses and other receivables | 3,084 | 2,847 | |||||
Total current assets | 95,009 | 103,296 | |||||
Property, plant and equipment, net | 45,072 | 26,215 | |||||
Intangible assets, net | 55,064 | 52,465 | |||||
Goodwill | 456 | 446 | |||||
Other | 784 | 804 | |||||
Total assets | $ | 196,385 | $ | 183,226 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,709 | $ | 4,614 | |||
Accrued expenses | 12,019 | 10,349 | |||||
Total current liabilities | 21,728 | 14,963 | |||||
Convertible 3.75% senior notes, net of debt discount and debt issuance costs (face of $143,750) | 116,030 | 111,391 | |||||
Deferred tax liability | 219 | 205 | |||||
Total liabilities | 137,977 | 126,559 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; | |||||||
53,391,948 and 53,148,441 shares issued and outstanding | |||||||
as of June 30, 2017 and December 31, 2016, respectively | 554 | 551 | |||||
Additional paid-in capital | 104,695 | 102,624 | |||||
Accumulated deficit | (44,991 | ) | (44,903 | ) | |||
Accumulated other comprehensive loss, net of taxes | (1,850 | ) | (1,605 | ) | |||
Total stockholders’ equity | 58,408 | 56,667 | |||||
Total liabilities and stockholders' equity | $ | 196,385 | $ | 183,226 | |||
* Derived from the audited December 31, 2016 financial statements |
TELIGENT, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
For the six months ended June 30, 2017 and 2016 | |||||||
(in thousands) | |||||||
June 30, 2017 | June 30, 2016 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (88 | ) | $ | (3,851 | ) | |
Non-cash expenses | 4,613 | 7,266 | |||||
Changes in operating assets and liabilities | (5,832 | ) | (821 | ) | |||
Net cash (used in) provided by operating activities | (1,307 | ) | 2,594 | ||||
Net cash used in investing activities | (15,286 | ) | (8,524 | ) | |||
Net cash provided by (used in) financing activities | 267 | (93 | ) | ||||
Effect of exchange rate on cash and cash equivalents | 536 | 33 | |||||
Net decrease in cash and cash equivalents | (16,326 | ) | (6,023 | ) | |||
Cash and cash equivalents at beginning of period | 66,006 | 87,191 | |||||
Cash and cash equivalents at end of period | $ | 50,216 | $ | 81,201 | |||
TELIGENT, INC. AND SUBSIDIARIES | |||||||||||||||
GROSS TO NET DEDUCTIONS | |||||||||||||||
(in thousands) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Gross product sales | $ | 66,744 | $ | 44,563 | $ | 121,044 | $ | 71,386 | |||||||
Reduction to gross product sales: | |||||||||||||||
Chargebacks and billbacks | 44,090 | 27,059 | 74,105 | 39,404 | |||||||||||
Sales discounts and other allowances | 6,766 | 6,411 | 14,615 | 11,698 | |||||||||||
Total reduction to gross product sales | 50,856 | 33,470 | 88,720 | 51,102 | |||||||||||
Product sales, net | 15,888 | 11,093 | 32,324 | 20,284 | |||||||||||
Contract manufacturing product sales | 2,407 | 5,932 | 5,824 | 12,163 | |||||||||||
Total product sales, net | $ | 18,295 | $ | 17,025 | $ | 38,148 | $ | 32,447 | |||||||
TELIGENT, INC. AND SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net loss | $ | (919 | ) | $ | (2,901 | ) | $ | (88 | ) | $ | (3,851 | ) | ||||
Depreciation | 427 | 222 | 822 | 396 | ||||||||||||
Amortization of intangibles | 709 | 732 | 1,396 | 1,437 | ||||||||||||
Interest expense, net | 578 | 1,259 | 1,429 | 2,572 | ||||||||||||
Non-cash interest expense | 2,358 | 2,073 | 4,639 | 4,078 | ||||||||||||
Provision for income taxes | 23 | 23 | 106 | 45 | ||||||||||||
EBITDA | 3,176 | 1,408 | 8,304 | 4,677 | ||||||||||||
Inventory step-up, related to acquisition | — | 187 | — | 530 | ||||||||||||
Foreign currency exchange (gain) loss | (3,822 | ) | 622 | (4,901 | ) | (931 | ) | |||||||||
Non-cash stock-based compensation expense | 896 | 756 | 1,739 | 1,509 | ||||||||||||
Adjusted EBITDA | 250 | 2,973 | 5,142 | 5,785 | ||||||||||||
Product development and research expenses | 5,113 | 4,768 | 8,781 | 8,479 | ||||||||||||
Adjusted EBITDA, before Product development and research expenses |
$ | 5,363 | $ | 7,741 | $ | 13,923 | $ | 14,264 |
TELIGENT, INC. AND SUBSIDIARIES | |||||||||||||||
RECONCILIATION OF NON-GAAP ADJUSTED NET INCOME (LOSS) | |||||||||||||||
(in thousands, except share and per share information) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (919 | ) | $ | (2,901 | ) | $ | (88 | ) | $ | (3,851 | ) | |||
Non-cash interest expense | 2,358 | 2,073 | 4,639 | 4,078 | |||||||||||
Provision for income taxes | 23 | 23 | 106 | 45 | |||||||||||
Amortization of intangibles | 709 | 732 | 1,396 | 1,437 | |||||||||||
Inventory step-up, related to acquisition | — | 187 | — | 530 | |||||||||||
Foreign currency exchange (gain) loss | (3,822 | ) | 622 | (4,901 | ) | (931 | ) | ||||||||
Non-cash stock-based compensation expense | 896 | 756 | 1,739 | 1,509 | |||||||||||
Adjusted net (loss) income | $ | (755 | ) | $ | 1,492 | $ | 2,891 | $ | 2,817 | ||||||
Non-GAAP adjusted net (loss) income per diluted share | $ | (0.01 | ) | $ | 0.02 | $ | 0.05 | $ | 0.04 | ||||||
Contact:Jenniffer Collins Teligent, Inc. (856) 697-4379 www.teligent.com