ALBANY, N.Y., Aug. 4, 2015 /PRNewswire/ -- AMRI (NASDAQ: AMRI) today reported financial and operating results for the second quarter ended June 30, 2015.
Highlights:
- Second quarter contract revenue of $85.2million, a 39% increase from 2014
- Adjusted contract margins of 26%
- Second quarter adjusted diluted EPS of $0.22, including a $0.05 decrease in EPS from royalties in the current quarter
- Operating cash flow of $16 million
“We are very pleased to present another strong financial quarter, with all our divisions achieving excellent results,” said William S. Marth, AMRI’s president and chief executive officer. “Notably, recent acquisitions, combined with the cost reduction initiatives and efficiency efforts we’ve made to date, are contributing to continued strong contract margin performance.
The recent addition of Gadea Pharmaceutical Group will significantly expand our capabilities in technically complex active pharmaceutical ingredients and will extend our reach into many new markets. Based on our strong pipeline of business and the addition of Gadea, we remain confident that the positive trends we are seeing will continue in the second half of the year and look forward to providing investors with our outlook for the remainder of the year in mid-September.”
Second Quarter 2015 Results
Total revenue for the second quarter of 2015 was $89.5 million, an increase of 31% compared to total revenue of $68.2 million reported in the second quarter of 2014.
Total contract revenue for the second quarter of 2015 was $85.2 million, an increase of 39% compared to total contract revenue of $61.5 million reported in the second quarter of 2014. Adjusted contract margins were 26% for the second quarter of 2015, compared with 27% for the second quarter of 2014. Margins benefited from recent acquisitions and the impact of the cost reduction initiatives and facility optimization activities, offset by product mix within the Active Pharmaceutical Ingredients (API) segment. Adjusted contract margins exclude purchase accounting depreciation and amortization, as well as share-based compensation expense that are included under U.S. GAAP. For a reconciliation of U.S. GAAP contract margins as reported to adjusted contract margins for the 2015 and 2014 reporting periods, please see Table 1 at the end of press release.
Royalty revenue in the second quarter of 2015 was $4.3 million, a decrease of 36% from $6.7 million in the second quarter of 2014 due primarily to lower royalties on Allegra (fexofenadine) products. Royalty revenue for the second quarter of 2015 includes $1.8 million of royalties from the fexofenadine products and $2.5 million from the net sales of certain amphetamine salts sold by Allergan (formerly Actavis).
Net income under U.S. GAAP was $2.3 million, or $0.07 per diluted share, in the second quarter of 2015, compared to U.S. GAAP net income of $3.7 million, or $0.11 per diluted share for the second quarter of 2014. Net income on an adjusted non-GAAP basis in the second quarter of 2015 was $7.4 million or $0.22 per diluted share, compared to adjusted net income of $7.2 million or $0.22 per diluted share for 2014. For a reconciliation of U.S. GAAP net income and earnings per diluted share as reported to adjusted net income and earnings per diluted share for the 2015 and 2014 reporting periods, please see Tables 2 and 3 at the end of this press release.
Beginning in the second quarter 2015, AMRI implemented an updated non-GAAP definition, which includes the impact of cash interest expense and excludes the impact of non-cash stock-based compensation, both of which had previously been excluded and included, respectively in the Company’s calculations of these non-GAAP financial measures. These changes have redefined non-GAAP cost of contract revenue, SG&A, interest expense, net income, and EBITDA financial measures from the prior non-GAAP definition. We believe these financial measures provide investors with appropriate non-GAAP measurements that emphasize the cash earnings potential of the business and better reflect the underlying financial performance of the business. Historic non-GAAP reported operating results have been adjusted to match this new definition.
Year-to-Date Results
Total revenue for the six-month period ended June 30, 2015 was $171.4 million, an increase of 34% compared to total revenue of $127.5 million reported in the second quarter of 2014.
Total contract revenue for the first six months of 2015 was $160.4 million, an increase of 43% compared to total contract revenue of $112.5 million in 2014.
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