SCHAUMBURG, Ill., May 5, 2015 (GLOBE NEWSWIRE) -- Sagent Pharmaceuticals, Inc. (Nasdaq:SGNT), a leader of specialty pharmaceutical products with a specific emphasis on the injectable market, today announced financial results for the quarter ended March 31, 2015.
First Quarter 2015 Highlights
- Revenue increased 17% to a $82.6 million driven by base business demand and the October 1, 2014 acquisition of Omega Laboratories Limited (“Omega”);
- Reported gross profit increased 8% to $21.9 million, or 26.5% of net revenue, inclusive of $0.6 million of incremental expense due to the purchase accounting revaluation of Omega inventory;
- Adjusted Gross Profit1 increased 13% to $23.5 million, or 28.4% of net revenue;
- Adjusted EBITDA1 declined 6% to $9.0 million;
- Net loss of $1.9 million, or diluted loss per share of $0.06, inclusive of $3.1 million ($0.10 per share) of costs related to our management transition, acquisition-related costs and the inventory step up on Omega, net of tax.
“We are very pleased to report a strong start to the year, with solid revenue performance driven by broad demand across our diverse product offerings including those marketed in Canada by Omega,” said Michael Logerfo, President of Sagent. “We remain focused on investing efficiently to enhance our deep product pipeline and expanding the reach of the business through our network of partners, suppliers, and customers. We intend to build upon our recent success through a combination of organic development activity and strategic acquisitions that will drive a long-term, profitable path of growth.”
1 Adjusted Gross Profit and Adjusted EBITDA are non-GAAP measures. Please see discussion of Non-GAAP Financial Measures at the end of this press release.
Financial Results for the Quarter Ended March 31, 2015
Net revenue for the first quarter of 2015 was $82.6 million, an increase of $11.8 million, or 17%, compared to $70.9 million in the first quarter of 2014. The increase was driven primarily by the $7.4 million from the addition of Omega on October 1, 2014. Gross profit for the first quarter of 2015 was $21.9 million, or 26.5% of net revenue, inclusive of $0.6 million of incremental expense due to the purchase accounting revaluation of Omega inventory, compared to $20.4 million, or 28.8% of net revenue, in the first quarter of 2014. Adjusted gross profit for the first quarter of 2015 was $23.5 million, or 28.4% of net revenue, compared to $20.7 million, or 29.2% of net revenue in the first quarter of 2014.
Total operating expenses for the first quarter of 2015 were $22.1 million, an increase of $8.4 million compared to $13.8 million for the same period in 2014. Included in first quarter of 2015 were $1.7 million of operating expenses for Omega. Product development expense for the first quarter of 2015 totaled $5.3 million, inclusive of $0.7 million for Omega, an increase of $1.3 million, or 32% compared to $4.0 million in the first quarter of 2014. Selling, general and administrative (“SG&A”) expenses for the first quarter of 2015 totaled $13.1 million, inclusive of $1.0 million for Omega, compared to $10.0 million in the first quarter of 2014. During the first quarter of 2015 Sagent incurred $4.6 million of non-recurring operating expenses including $1.3 million of M&A related costs and $3.3 million of severance and other costs related to the recent management transition. The equity in net income of joint ventures for the first quarter of 2015 totaled $0.9 million compared to $0.3 million in the first quarter of 2014.
Adjusted EBITDA for the first quarter of 2015 was $9.0 million, a decline of $0.5 million, or 6% compared to $9.6 million in the first quarter of 2014.
Including the impact of interest, other non-operating expenses, principally a $1.0 million unrealized currency translation loss due to the weakening of the Canadian dollar, and taxes, the net loss for the three months ended March 31, 2015 was $1.9 million, compared to net income of $5.1 million in the first quarter of 2014.
Liquidity
Our cash and cash equivalents and short term investments at March 31, 2015 were $69.2 million, and our working capital totaled $112.4 million.
Fiscal 2015 Guidance
Logerfo concluded, “Our financial outlook for 2015 remains intact and current year performance will continue to be influenced by GPO contract renewals, product pricing, FDA approvals and associated product launches and to a lesser degree, market shortages. We continue to develop private label programs and pursue opportunities through government contracting. We will supplement our current pipeline with product sourcing initiatives, investment in SCP and an increased focus on business development activities.”
Sagent’s business plan for fiscal 2015 currently anticipates:
- Net revenue for the year to be in the range of $325 to $375 million;
- Adjusted Gross Profit as a percentage of net revenue in the range of 27% to 31%; and
- Operating expenses in the range of $80 to $90 million.
Based upon the above assumptions, the Company anticipates Adjusted EBITDA in the range of $20 to $50 million.
Conference Call Information
Sagent will host its 2015 first quarter conference call today beginning at 9:00 a.m. Eastern Standard Time. Please call 877-293-5456 from the United States or +1-707-287-9357 internationally. In addition, the live conference call is being webcast and can be accessed on the “Events and Presentations” page of the “Investor Relations” section of the Company’s website, www.sagentpharma.com. A replay also will be available for 14 days following the live call, and may be accessed via the Company’s website or by calling 855-859-2056, passcode 32456507.
About Sagent Pharmaceuticals
Sagent Pharmaceuticals, Inc., founded in 2006, is a specialty pharmaceutical company focused on developing, manufacturing, sourcing and marketing pharmaceutical products, with a specific emphasis on injectables. Sagent has created a unique, global network of resources, comprising rapid development capabilities, sophisticated manufacturing and innovative drug delivery technologies, resulting in an extensive and rapidly expanding pharmaceutical product portfolio that fulfills the evolving needs of patients.
Forward-Looking Statements
Statements contained in this press release contain forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact, including our fiscal 2015 guidance, included in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give Sagent’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business as of the date of this release. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Sagent’s expectations are not predictions of future performance, and future results may substantially differ from current expectations based upon a variety of factors, risks and uncertainties affecting Sagent’s business, including, among others, our reliance upon our business partners for timely supply of sufficient high quality API and finished products in the quantities we require; the difficulty of predicting the timing or outcome of product development efforts and global regulatory approvals; the difficulty of predicting the timing and outcome of any pending litigation including litigation involving third parties that may have an impact on the timing of Sagent’s product launches; the impact of competitive products and pricing and actions by Sagent’s competitors with respect thereto; the timing of product launches; compliance with FDA and other global governmental regulations by Sagent and its third party manufacturers; changes in laws and regulations; our ability to successfully integrate our newly acquired Omega subsidiary; our ability to realize the expected benefits from our acquisition of and investment in our China and Omega subsidiaries; the additional capital investments we will be required to make in our international subsidiaries to achieve their manufacturing potential; the implementation and maintenance of our new enterprise resource planning software and other related applications; and other such risks detailed in Sagent’s periodic public filings with the Securities and Exchange Commission, including but not limited to Sagent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on March 16, 2015. Sagent disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law.
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