ALBANY, N.Y., Nov. 5, 2015 /PRNewswire/ -- AMRI (NASDAQ: AMRI) today reported financial and operating results for the third quarter ended September 30 2015.
Highlights:
- Third quarter contract revenue of $101.4million, a 76% increase from 2014
- Adjusted contract margins expand to 25%
- Third quarter adjusted diluted EPS of $0.14, including a $0.04 decrease in EPS from royalties in the current quarter
- Operating cash flow of $18.5 million
- Reiterates Full Year 2015 total revenue of $400 to $416 million; adjusted EPS guidance maintained at
between $0.90 and $0.95 per diluted share
“Adjusted contract margins” and “Adjusted diluted EPS” are Non-GAAP measurements. See discussion under the heading “Non-GAAP Adjustment Items” in this release.
“We achieved a significant milestone this quarter, achieving over $100 million in contract revenue and expanded adjusted contract margins of 25%,” said William S. Marth, AMRI’s president and chief executive officer. “Recent acquisitions and organic growth, combined with cost reduction initiatives and efficiency efforts, contributed to our continued strong performance.
With the addition of Gadea Pharmaceuticals, we’ve tripled the number of commercial APIs in our portfolio, providing us with a solid foundation in our API business in targeted segments. These APIs are approved and sold globally, providing us expanded market access for the rest of our portfolio.
Our integrated drug discovery center in Buffalo NY is now operational to meet the demands of customers who are looking for a US-based discovery service offering. The integration of biology and chemistry along with state of the art technology and our informatics partnership with PerkinElmer, as well as the high caliber of talent we are recruiting, will facilitate fast data turnaround and program progression.
Outsourcing trends continue to expand, and as industry assets and capacity continue to shift, we see opportunities for AMRI. As we continue to grow, we will continue to integrate, align and scale our capabilities and asset base to respond to our customer’s expanding needs as we look to be a leading provider of discovery services, API and drug product to the industry.”
Third Quarter 2015 Results
Total revenue for the third quarter of 2015 was $104.6 million, an increase of 67% compared to total revenue of $62.5 million reported in the third quarter of 2014.
Total contract revenue for the third quarter of 2015 was $101.4 million, an increase of 76% compared to total contract revenue of $57.5 million reported in the third quarter of 2014. Adjusted contract margins were 25% for the third quarter of 2015, compared with 8% for the third quarter of 2014. Margins benefited from recent acquisitions, product mix within the Active Pharmaceutical Ingredients (API) segment and the impact of the cost reduction initiatives and facility optimization activities.
Royalty revenue in the third quarter of 2015 was $3.2 million, a decrease of 35% from $5.0 million in the third quarter of 2014 due primarily to lower royalties on Allegra (fexofenadine) products which have ended. Royalty revenue for the third quarter of 2015 includes royalties from the net sales of certain amphetamine salts sold by Allergan (formerly Actavis) and royalties from net sales of an API sourced in Spain.
Net loss under U.S. GAAP was $(4.2) million, or $(0.12) per share, in the third quarter of 2015, compared to U.S. GAAP net loss of $(8.6) million, or $(0.27) per share for the third quarter of 2014. Net income on an adjusted non-GAAP basis in the third quarter of 2015 was $5.1 million or $0.14 per diluted share, compared to adjusted net loss of $(0.6) million or $(0.02) 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.
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