SHANGHAI, China, Nov. 12 /Xinhua-PRNewswire/ -- WuXi PharmaTech (Cayman) Inc. , a leading pharmaceutical, biotechnology and medical device research and development outsourcing company with operations in China and the United States, today announced its unaudited financial results for the third quarter ended September 30, 2008. During the quarter, WuXi’s net revenue increased 98% year-over-year to $67.5 million, and diluted earnings per ADS were $0.10.
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Commenting on the third quarter 2008 results, Dr. Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech, said, “WuXi continues to deliver strong revenue and profitability growth, as reflected in 98% year-over-year top-line revenue and 70% adjusted EBITDA growth. As we disclosed in the pre- announcement, the constricted biotech financing environment is impacting the CRO industry. However, we believe the need for outsourced development and manufacturing services will continue to be robust in the longer term. WuXi will continually work with WuXi’s customers to bring their programs from bench to the market sooner and less costly.
“We are dedicated to maintaining and expanding WuXi’s preferred provider status with our customers. In addition to delivering high-quality, IP- protected services efficiently, we will continue to position WuXi for the future to improve the success of discovery and shorten development time for our customers. This commitment requires us to expand WuXi’s capacity and capabilities to meet our customers’ expanding needs, from the bench to the market.”
Numbers presented on a non-GAAP basis exclude share-based compensation expenses, amortization of acquired intangible assets and deferred tax impact on acquired intangible assets. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled “Use of Non-GAAP Financial Measures”.
The Company’s Laboratory Services include discovery chemistry, service biology, toxicology, pharmaceutical development, analytical services, biopharmaceutical and medical device testing. Net revenues from Laboratory Services increased 76% to $47.0 million in the third quarter 2008 from $26.7 million in the third quarter 2007. Gross profit increased 51% in the third quarter 2008 from $12.9 million in the third quarter 2007. Third quarter 2008 GAAP gross margin was 41%, and non-GAAP gross margin was 49%.
The Manufacturing Services segment focuses on advanced intermediates, active pharmaceutical ingredients (APIs), and biologics-based manufacturing, testing and related services. Net revenues from Manufacturing Services increased 180% to $20.5 million in the third quarter 2008 from $7.3 million in the third quarter 2007. Gross profit increased 9% in the third quarter 2008 from $3.1 million in the third quarter 2007. Third quarter 2008 GAAP gross margin was 16%, and non-GAAP gross margin was 23%.
Revised Full Year 2008 Guidance Confirmed
WuXi confirms its net revenue guidance of $260 to $265 million for the full year 2008, as announced in October 2008. This represents year-over-year revenue growth ranging from 92% to 96%.
WuXi also confirms full-year adjusted EBITDA is expected to be in the range of $70 to $75 million (The forecast excludes any potential future impairment charges and further mark-to-market adjustments on foreign currency forward contracts, if any).
Conference Call
WuXi PharmaTech senior management will host a conference call at 8:00 am (Eastern) / 5:00 am (Pacific) / 9:00 pm (Beijing/Hong Kong) on Thursday, November 13, 2008, to discuss its 2008 third quarter financial results and recent business activities. The conference call may be accessed by calling:
A live webcast of the conference call and replay will be available on the investor relations page of WuXi PharmaTech’s website at http://www.wuxiapptec.com .
About WuXi PharmaTech
WuXi PharmaTech is a leading pharmaceutical, biotechnology and medical device R&D outsourcing company, with operations in China and the United States. As a research-driven and customer-focused company, WuXi PharmaTech provides broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process. WuXi PharmaTech’s services are designed to assist its global partners in shortening the cycle and lowering the cost of drug and medical device R&D. WuXi PharmaTech’s operating subsidiaries are known as WuXi AppTec. For more information, please visit: http://www.wuxiapptec.com .
Use of Non-GAAP Financial Measures
We have provided the third quarter 2007 and 2008 gross profit, operating income, net income on a non-GAAP basis, which excludes share-based compensation expenses, amortization of acquired intangible assets and deferred tax impact on acquired intangible assets. Adjusted EBITDA refers to EBITDA excluding share-based compensation expenses. The Company believes both management and investors benefit from referring to these non-GAAP financial measures (including adjusted EBITDA) in assessing the Company’s financial performance and liquidity and when planning and forecasting future periods. These non-GAAP operating measures (including adjusted EBITDA) are useful for understanding and assessing underlying business performance and operating trends. The Company expects to provide gross profit, operating income, net income on a non-GAAP basis using a consistent method on a quarterly basis going forward.
Readers are cautioned not to view non-GAAP results (including adjusted EBITDA) on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of non-GAAP measures to GAAP measures for the indicated periods attached hereto.
Cautionary Note Regarding Forward-Looking Statements
Statements in this release contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995, including, among others, expected net revenue and EBITDA levels for 2008; the global trends in outsourced R&D and manufacturing; and anticipated changes in the pharma business model and the opportunities presented to WuXi as a result of those changes.
These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Among other factors, uncertainty in the global economy may adversely impact our business and the trends for outsourced R&D and manufacturing; Pharma companies may not change their business models as expected or in a manner favorable to us; we may fail to capitalize on the opportunities presented; we may not maintain our preferred provider status with our clients; and may be unable to successfully expand our capabilities to meet client needs. In addition other factors that could cause our actual results to differ from what we currently anticipate include our limited operating history; failure to generate sufficient future cash flows or secure any required future financing on acceptable terms or at all; failure to retain key personnel; effective integration of products and services from AppTec; our reliance on a limited number of customers to continue to account for a high percentage of our revenues; risk of payment failure by any of our large customers, which could significantly harm our cash flows and profitability; dependency upon the continued service of our senior management and key scientific personnel and ability to retain our existing customers or expand our customer base. The financial information contained in this release should be read in conjunction with the consolidated and pro forma financial statements and notes thereto included in our 2007 Annual Report on Form 20-F filed with available on the Securities and Exchange Commission’s website at http://www.sec.gov . For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations and prospects, see “Risk Factors” beginning on page 10 of our 2007 Annual Report on Form 20-F. Our results of operations for the third quarter 2008 are not necessarily indicative of our operating results for any future periods. Any projections in this release are based on limited information currently available to us, which is subject to change. Although these projections and the factors influencing them will likely change, we undertake no obligation to update or revise these forward- looking statements, whether as a result of new information, future events or otherwise, after the date of this press release. Such information speaks only as of the date of this release.
CONTACT: Debra Yu, MD, Vice President Strategy, WuXi PharmaTech (Cayman)
Inc., +1-215-218-5559, ir@wuxiapptec.com and Dr. Hai Mi, Executive Director
of Investor Relations and Business Planning, WuXi PharmaTech (Cayman) Inc.,
+86- 21-5046-3726, ir@wuxiapptec.com or Juliane Snowden, Vice President of
Investor Relations, Burns McClellan, +1-212-213-0006, Jsnowden@burnsmc.com
for WuXi PharmaTech (Cayman) Inc.
Web site: http://www.wuxiapptec.com//
