ALBANY, N.Y., Feb. 12, 2015 /PRNewswire/ -- AMRI (NASDAQ: AMRI) today reported financial and operating results for the fourth quarter and full year ended December 31, 2014.
“While our OsoBio facility resumed full operations later than anticipated, after we learned in the fall of 2014 that a remediation would be necessary, strong execution led us to finish 2014 with record performances in each of our businesses, as reflected by a greater than 30% increase in quarterly revenue and adjusted earnings,” said William S. Marth, AMRI’s president and chief executive officer.
“During 2014, we reorganized our discovery business, optimizing our resource mix and laying the ground work for a differentiated discovery platform. We advanced our growth in generics, initiating multiple development programs across all segments of our business, and we completed and integrated two acquisitions and announced a third, expanding our capabilities into very attractive, high demand areas such as controlled substances, sterile manufacturing and product development. Lastly, we created sustainable shareholder value, replacing declining royalties with an expanding, profitable contract business.
“We have much to be proud of in 2014 and are poised for a strong 2015. Despite a significant headwind from the loss of Allegra royalties in 2015, we believe continued strong growth in our base business, the contribution of our acquisitions, together with enhanced operational discipline, will lead to continued, significant growth in revenue and earnings in 2015.”
Fourth Quarter 2014 Results
Total revenue for the fourth quarter of 2014 was $86.6 million, an increase of 29% compared to total revenue of $67.1 million reported in the fourth quarter of 2013.
Total contract revenue for the fourth quarter of 2014 was $80.7 million, an increase of 35% compared to contract revenue of $59.7 million reported in the fourth quarter of 2013. Adjusted contract margins were 23% for the fourth quarter of 2014, compared with 21% for the fourth quarter of 2013, driven by the growth of the Drug Product business, increased capacity utilization, and the benefit of cost reduction initiatives and facility optimization. Adjusted contract margins exclude the following items that are included under U.S. GAAP: business interruption costs, purchase accounting depreciation and amortization and business acquisition costs. For a reconciliation of U.S. GAAP contract margins as reported to adjusted contract margins for the 2014 and 2013 reporting periods, please see Table 1 at the end of press release.
Royalty revenue in the fourth quarter of 2014 was $5.9 million, a decrease of 21% from $7.4 million in the fourth quarter of 2013. Royalty revenue for the fourth quarter of 2014 includes $3.4 million in royalties from the Allegra® products as well as $2.5 million from the net sales of certain amphetamine salts sold by Actavis.
Net loss under U.S. GAAP was $(1.9) million, or $(0.06) per diluted share, in the fourth quarter of 2014, compared to U.S. GAAP net income of $4.3 million, or $0.13 per diluted share for the fourth quarter of 2013. Net income on an adjusted basis in the fourth quarter of 2014 was $9.2 million, or $0.28 per diluted share, compared to adjusted net income of $6.8 million or $0.21 per diluted share in 2013. Net income on an adjusted basis excludes the following items that are included under U.S. GAAP: business interruption charges, restructuring and impairment charges, convertible debt interest and amortization charges, business acquisition costs, executive transition costs, postretirement benefit plan settlement gains, write-offs of deferred financing costs, non-recurring income tax adjustments, litigation settlements, insurance demutualization gains, losses on disposals of fixed assets related to restructuring activities, ERP implementation costs, and depreciation and amortization of purchase accounting adjustments. For a reconciliation of U.S. GAAP net income (loss) and earnings (loss) per diluted share as reported to adjusted net income and earnings per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release.
Full Year 2014 Results
Total revenue for the year ended December 31, 2014 was a record $276.6 million, an increase of 12% compared to total revenue of $246.6 million for the same period in 2013.
Total contract revenue for the full year 2014 was a record $250.7 million, an increase of 19% compared to contract revenue of $210.0 million for 2013. Adjusted contract margins were 19% for the full year 2014, compared to 18% in 2013.
Royalty revenue for the full year 2014 was $25.9 million, a decrease of 29% from $36.6 million in 2013, in line with expectations. Royalty revenue for the full year 2014 includes $16.3 million in royalties from the Allegra® products, as well as $9.6 million from the net sales of certain amphetamine salts sold by Actavis.
Net loss under U.S. GAAP for the full year 2014 was $(3.3) million, or $(0.10) per diluted share, compared to U.S. GAAP net income of $11.8 million, or $0.37 per diluted share for the full year 2013. Net income on an adjusted basis in the full year 2014 was $20.7 million or $0.63 per diluted share, compared to adjusted net income of $21.5 million or $0.68 per diluted share in 2013. Adjusted net income in 2014 includes a $6.4 million decline in royalty income and $0.7 million of income from operations acquired during 2014.
For a reconciliation of U.S. GAAP net income (loss) and earnings (loss) per diluted share as reported to adjusted net income and earnings per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release.
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