United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the first quarter ended March 31, 2013.
"I am pleased that our first quarter 2013 results were solid, providing a strong foundation for continued growth," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "Our pipeline continues to grow, with two phase 3 trials, a new phase 1 trial of mesenchymal stem cells in PAH patients and advances in our strategic product portfolio."
Total revenues for the quarter ended March 31, 2013 were $245.1 million, up from $204.2 million for the quarter ended March 31, 2012. Net income for the quarter ended March 31, 2013 was $62.3 million or $1.24 per basic share, compared to $70.8 million or $1.32 per basic share for the same quarter in 2012. Gross margin from sales was $213.8 million for the quarter ended March 31, 2013, compared to $178.9 million for the same quarter last year. Earnings before non-cash charges(1)for the quarter ended March 31, 2013 were $138.6 million, compared to $114.4 million for the same quarter in 2012.
(1) See definition of earnings before non-cash charges, a non-GAAP financial measure, and a reconciliation of net income to earnings before non-cash charges below.
Revenues for the quarter ended March 31, 2013 increased by $40.9 million, compared to the same quarter in 2012. The growth in product revenues reflects the continuing increase in the number of patients being treated with our products.
Cardiopulmonary. The $1.0 million increase in cardiopulmonary program expense for the quarter ended March 31, 2013, compared to the same quarter in 2012, resulted from increases in expenses incurred related to the development of our TransCon injectable prostacyclin analogues and our implantable pump program, offset partly by a decrease in expenses related to oral treprostinil.
Share-based compensation. The increase in share-based compensation of $14.7 million for the quarter ended March 31, 2013, compared to the same quarter in 2012, resulted from the 14 percent appreciation in the price of our common stock during the quarter ended March 31, 2013, compared to a slight decline in our stock price during the same quarter in 2012.
General and administrative. The increase in general and administrative expense of $11.8 million for the quarter ended March 31, 2013 compared to the same quarter in 2012 was driven by increases in: (1) grants to unaffiliated, not-for-profit organizations that provide financial assistance to patients suffering from pulmonary arterial hypertension; (2) operating expenses resulting from our corporate expansion; (3) payroll-related expenses; and (4) consulting and professional fees.
Share-based compensation. The increase in share-based compensation of $19.4 million for the quarter ended March 31, 2013, compared to the same quarter in 2012, corresponded principally to the 14 percent increase in the price of our common stock during the quarter ended March 31, 2013, compared to a slight decline in our stock price during the same quarter in 2012.
The provision for income taxes was $28.5 million for the quarter ended March 31, 2013, compared to $33.2 million for the same quarter in 2012. The estimated annual effective tax rate was 34 percent as of March 31, 2013 and 2012.
We reaffirm our 2013 full-year revenue guidance for our three commercial products (Remodulin®, Tyvaso® and Adcirca®), as we continue to expect related revenues to fall within a range of 5% above or below $1.0 billion for 2013.
Earnings before non-cash charges is defined as net income, adjusted for the following non-cash charges, as applicable: (1) interest; (2) income taxes; (3) license fees; (4) depreciation and amortization; (5) impairment charges; and (6) share-based compensation (stock option, share tracking award and employee stock purchase plan expense).
We will host a half-hour teleconference on Thursday, April 25, 2013, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 32040188.
This press release contains a financial measure, earnings before non-cash charges, that does not comply with United States generally accepted accounting principles (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.
We use earnings before non-cash charges to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure improves investors' understanding of our financial results by excluding certain expenses that we do not consider when evaluating and comparing the performance of our core operations and making operating decisions. In addition, we have historically reported earnings before non-cash charges to investors, and believe the inclusion of this non-GAAP financial measure provides investors with a consistent method of comparison to historical periods. However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature. In addition, our calculation of this non-GAAP financial measure may differ in methodology used by other companies. The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of net income, the most directly comparable GAAP financial measure, to earnings before non-cash charges can be found in the table above under the heading, Earnings Before Non-Cash Charges.
Remodulin and Tyvaso are registered trademarks of United Therapeutics Corporation.