Myriad Genetics, Inc.
Aug 12, 2014

Myriad Genetics Reports Fiscal Fourth-Quarter and Full-Year 2014 Financial Results

Fiscal 2014 Revenue Up 27 Percent and Adjusted Net Income Up 29 Percent

SALT LAKE CITY, Aug. 12, 2014 (GLOBE NEWSWIRE) -- Myriad Genetics, Inc. (Nasdaq:MYGN) today announced financial results for its fiscal fourth quarter and fiscal year ended June 30, 2014, provided an update on recent business highlights, and provided financial guidance for its fiscal year ending June 30, 2015. Revenue for the fiscal fourth quarter was $188.8 million compared to $174.1 million in the same period of the prior year, an increase of 8.4 percent. Fourth quarter GAAP earnings per diluted share were $0.43, which included $3.8 million in certain non-cash charges, resulting in adjusted earnings per diluted share of $0.48.

"Myriad had an outstanding year as we launched a record three new products and closed a major strategic acquisition. I am exceptionally proud of the Myriad team and their outstanding performance in the face of broad competition," said Peter D. Meldrum, president and chief executive officer of Myriad. "I am particularly pleased with the rapid acceptance and uptake of our myRisk Hereditary Cancer™ test, with fourth quarter revenues of $27.3 million, an increase of 89 percent as compared to our March 2014 quarter."

Fiscal Fourth Quarter 2014 Results

Fiscal Year 2014 Financial Results

Fourth Quarter Business Highlights

Fiscal Year 2015 Financial Guidance

The Company is guiding toward fiscal year 2015 total revenue of $800 to $820 million and adjusted diluted earnings per share of $1.90 to $2.00. Our adjusted EPS excludes approximately $12 million in anticipated non-cash amortization charges related to the acquisition of Crescendo Bioscience, which translates to GAAP EPS guidance of $1.75 to $1.85. These projections are forward looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further detail on its business outlook during the conference call it is holding today to discuss its fiscal 2014 fourth-quarter and full-year financial results.

Conference Call and Webcast

A conference call will be held today, Tuesday, August 12, 2014, at 4:30 p.m. Eastern Time to discuss Myriad's financial results for the fiscal fourth quarter of 2014. The dial-in number for domestic callers is (800) 707-7427. International callers may dial (416) 352-0001. All callers will be asked to reference reservation number 21728148. An archived replay of the call will be available for seven days by dialing (800) 633-8284 and entering the reservation number above. The conference call also will be available through a live Webcast at www.myriad.com.

About Myriad Genetics

Myriad Genetics is a leading molecular diagnostic company dedicated to making a difference in patients' lives through the discovery and commercialization of transformative tests to assess a person's risk of developing disease, guide treatment decisions and assess risk of disease progression and recurrence. Myriad's molecular diagnostic tests are based on an understanding of the role genes play in human disease and were developed with a commitment to improving an individual's decision making process for monitoring and treating disease. Myriad is focused on strategic directives to introduce new products, including companion diagnostics, as well as expanding internationally. For more information on how Myriad is making a difference, please visit the Company's website: www.myriad.com.

Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, myPath, myRisk, myRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, HRD, Vectra DA and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. in the United States and foreign countries. MYGN-F, MYGN-G

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the rapid acceptance and uptake of our myRisk Hereditary Cancer test; the planned launch of our myChoice HRD test this fiscal year; the Company's fiscal year 2015 financial guidance under the caption "Fiscal Year 2015 Financial Guidance"; and the Company's strategic directives under the caption "About Myriad Genetics." These "forward-looking statements" are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that sales and profit margins of our existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to changes in the governmental or private insurers reimbursement levels for our tests or our ability to obtain reimbursement for our new tests at comparable levels to our existing tests; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and pharmaceutical and clinical services, including our ability to successfully generate revenue outside the United States; the risk that we may not be successful in transitioning from our existing product portfolio to our new products, such as our myRisk Hereditary Cancer test, which represents the next generation of our existing hereditary cancer franchise; the risk that we may not be able to generate sufficient revenue from our existing tests and our new tests or develop new tests; the risk that licenses to the technology underlying our molecular diagnostic tests and pharmaceutical and clinical services and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with manufacturing our products or operating our laboratory testing facilities; risks related to public concern over genetic testing in general or our tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to our ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to our ability to successfully integrate and derive benefits from any technologies or businesses that we license or acquire; risks related to increased competition and the development of new competing tests and services; risks related to our projections about the potential market opportunity for our products; the risk that we or our licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying our tests; the risk of patent infringement claims or challenges to the validity of our patents; risks related to changes in intellectual property laws covering our molecular diagnostic tests and pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decision in the lawsuit brought against us by the Association for Molecular Pathology et al; risks of new, changing and competitive technologies and regulations in the United States and internationally; and other factors discussed under the heading "Risk Factors" contained in Item 1A in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. All information in this press release is as of the date of the release, and Myriad undertakes no duty to update this information unless required by law.

 
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
         
(in thousands, except per share amounts)Three Months EndedTwelve Months Ended
 Jun. 30, 2014Jun. 30, 2013Jun. 30, 2014Jun. 30, 2013
         
Molecular diagnostic testing $182,863 $166,089 $748,198 $582,392
Pharmaceutical and clinical services  5,902    8,027    30,018    30,773   
Total revenue 188,765    174,116    778,216    613,165   
         
Costs and expenses:        
Cost of molecular diagnostic testing 28,298    18,416    96,140    64,376   
Cost of pharmaceutical and clinical services  2,682    3,657    13,061    15,242   
Research and development expense 20,187    14,581    67,476    53,706   
Selling, general, and administrative expense 84,347    71,545    327,097    251,839   
Total costs and expenses 135,514    108,199    503,774    385,163   
         
Operating income  53,251    65,917    274,442    228,002   
         
Other income (expense):        
Interest income 207    1,309    5,397    5,497   
Other (908)   1    (1,974)   (223)  
Total other income (701)   1,310    3,423    5,274   
         
Income before income taxes 52,550    67,227    277,865    233,276   
         
Income tax provision (benefit) 18,921    23,153    101,640    86,137   
         
Net income $33,629 $44,074 $176,225 $147,139
         
         
Earnings per share:        
Basic $0.45 $0.55 $2.33 $1.82
Diluted $0.43 $0.53 $2.25 $1.77
         
Weighted average shares outstanding        
Basic 74,391 80,166 75,728 80,948
Diluted 77,678 82,639 78,182 83,327
         
Condensed Consolidated Balance Sheets (Unaudited)    
 Jun. 30, 2014Jun. 30, 2013    
(In thousands)        
Cash, cash equivalents, and marketable investment securities $270,586 $531,064    
Trade receivables, net 81,297  94,333     
Other receivables 3,770  2,645     
Prepaid expenses 6,921  956     
Inventory 23,919  5,007     
Tax receivable 13,609  728     
Equipment and leasehold improvements, net 34,594  27,602     
Note receivable —  21,667     
Other assets 5,000  13,000     
Intangibles, net 205,312  13,330     
Goodwill 169,181  56,850     
Deferred tax assets 9,625  36,639     
Total assets $823,814 $803,821    
         
Accounts payable and accrued liabilities $79,488 $62,466    
Deferred revenue 1,090  2,043     
Uncertain tax benefits 24,238  10,718     
Stockholders' equity 718,998  728,594     
Total liabilities and stockholders' equity $823,814 $803,821    

Statement regarding use of non-GAAP financial measures

In this press release, the Company's financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. The Company's financial measures under GAAP include substantial one-time charges related to its acquisition of Crescendo Bioscience, Inc. in February 2014 and ongoing amortization expense related to acquired intangible assets that will be recognized over the useful lives of the assets. Management believes that presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of the Company's core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Company's business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial statements.

Following is a description of these adjustments:

The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

 
Reconciliation of GAAP to Non-GAAP Financial Measures 
for the Three and Twelve Months ended June 30, 2014 and 2013
(Unaudited data in thousands)
 Three Months EndedTwelve Months Ended
 Jun. 31, 2014Jun. 31, 2013Jun. 31, 2014Jun. 31, 2013
         
GAAP Cost of molecular diagnostic testing  $ 28,298  $ 18,416  $ 96,140  $ 64,376
GAAP Cost of pharmaceutical and clinical services   2,682  3,657  13,061  15,242
Acquisition - change of control payments  --   --   (238)  -- 
Acquisition - accelerated share-based compensation  --   --   (185)  -- 
Acquisition - amortization of intangible assets  --   --   --   -- 
Non-GAAP COGS  $ 30,980  $ 22,073  $ 108,778  $ 79,618
         
Non-GAAP Gross Margin 84% 87% 86% 87%
         
GAAP Research and Development  $ 20,187  $ 14,581  $ 67,476  $ 53,706
Acquisition - change of control payments  --   --   (1,710)  -- 
Acquisition - accelerated share-based compensation  --   --   (2,075)  -- 
Acquisition - amortization of intangible assets  (78)  (78)  (313)  (313)
Non-GAAP R&D  $ 20,109  $ 14,503  $ 63,378  $ 53,393
         
GAAP Selling, General and Administrative  $ 84,347  $ 71,545  $ 327,097  $ 251,839
Acquisition - change of control payments  --   --   (3,747)  -- 
Acquisition - accelerated share-based compensation  --   --   (4,669)  -- 
Acquisition - amortization of intangible assets  (2,906)  (116)  (4,306)  (464)
Non-GAAP SG&A  $ 81,441  $ 71,429  $ 314,375  $ 251,375
         
GAAP Operating Income  $ 53,251  $ 65,917  $ 274,442  $ 228,002
Acquisition - change of control payments  --   --   5,695  -- 
Acquisition - accelerated share-based compensation  --   --   6,929  -- 
Acquisition - amortization of intangible assets  2,984  194  4,619  777
Non-GAAP Operating Income  $ 56,235  $ 66,111  $ 291,685  $ 228,779
         
Non-GAAP Operating Margin 30% 38% 37% 37%
         
GAAP Net Income  $ 33,629  $ 44,074  $ 176,225  $ 147,139
Acquisition - change of control payments  --   --   5,695  -- 
Acquisition - accelerated share-based compensation  --   --   6,929  -- 
Acquisition - amortization of intangible assets  2,984  194  4,619  777
Disposition of business operations  804  --   804  -- 
Tax benefit associated with non-GAAP adjustments  (289)  --   (4,626)  -- 
Non-GAAP Net Income  $ 37,128  $ 44,268  $ 189,646  $ 147,916
         
GAAP Diluted EPS  $ 0.43  $ 0.53  $ 2.25  $ 1.77
Non-GAAP Diluted EPS  $ 0.48  $ 0.54  $ 2.43  $ 1.78
         
         
Free Cash Flow Reconciliation        
(Unaudited data in thousands)        
 Three Months EndedTwelve Months Ended
 Jun. 31, 2014Jun. 31, 2013Jun. 31, 2014Jun. 31, 2013
         
GAAP cash flow from operations  $ 40,933  $ 63,000  $ 190,213  $ 173,866
         
Capital expenditures  (4,618)  (2,791)  (14,271)  (11,373)
         
Free cash flow after acquisition related charges  36,315  60,209  175,942  162,493
         
Acquisition - change in control payments  --   --   5,695  -- 
Acquisition - accelerated equity compensation  --   --   6,929  -- 
         
Free cash flow before acquisition related charges  $ 36,315  $ 60,209  $ 188,566  $ 162,493

Reconciliation of GAAP to Non-GAAP Fiscal Year 2015 Financial Guidance

The Company's future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from guidance set forth below. Some of the factors that could affect the Company's financial results are stated in the safe harbor statement of this press release. More information on potential factors that could affect the Company's financial results are included under the heading "Risk Factors" contained in Item 1A in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in the Company's Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

   
 Fiscal Year 2015
Diluted net income per share  
GAAP diluted net income per share $1.75 -- $1.85
Acquisition - amortization of intangible assets  0.15
Non-GAAP diluted net income per share$1.90 -- $2.00
   
CONTACT: Media Contact:

         Ron Rogers

         (801) 584-3065

         rrogers@myriad.com

         

         Investor Contact:

         Scott Gleason

         (801) 584-1143

         sgleason@myriad.com