Myriad Genetics, Inc.
May 6, 2014

Myriad Genetics Reports Financial Results for Third Quarter of Fiscal Year 2014

Revenues Up 17 Percent; FY14 Guidance Raised

SALT LAKE CITY, May 6, 2014 (GLOBE NEWSWIRE) -- Myriad Genetics, Inc. (Nasdaq:MYGN) today announced financial results for the fiscal third quarter and nine months ended March 31, 2014, increased its fiscal year 2014 guidance, and provided an update on recent business highlights. Revenue for the third quarter was $182.9 million, a 17 percent increase over the same period in the prior year. Third quarter GAAP earnings per diluted share were $0.48, which included a $12.6 million one-time, non-cash expense associated with the purchase of Crescendo Bioscience, Inc. during the quarter and a $1.2 million non-cash amortization of acquired intangible assets. Excluding these non-cash charges, third quarter adjusted earnings per diluted share were $0.60, a 30 percent increase over the same period in the prior year. A reconciliation of GAAP to adjusted earnings per diluted share is provided in the financial section of this earnings release.

"Myriad continued to deliver double digit top and bottom line growth in the third quarter which reflects the continued success of our business strategy," said Peter D. Meldrum, president and CEO of Myriad. "More importantly, we are well positioned to grow our business in the future, deliver long-term value for shareholders, and achieve our goal of building the leading global molecular diagnostic company focused on providing exceptional patient care across all major human diseases."

Fiscal Third Quarter 2014 Results

Year-to-Date Performance

Business Highlights

Increased Fiscal Year 2014 Outlook

Myriad is raising its revenue expectations for the fiscal year ending June 30, 2014 to $770 to $775 million, compared to previous guidance of $740 to $750 million. This new guidance represents 26 percent revenue growth when compared to the prior fiscal year. The non-GAAP financial guidance discussed below reflects certain non-cash charges associated with acquisitions to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures. We believe this will provide investors with additional information that may be useful in analyzing the Company's past and future operating performance. The Company is projecting adjusted diluted earnings per share of $2.37 to $2.40 compared to previous guidance of $2.09 to $2.12. The new guidance represents 34 to 35 percent EPS growth relative to the adjusted diluted earnings per share of the prior fiscal year.

Conference Call and Webcast

A conference call will be held on Tuesday, May 6, 2014, at 4:30 p.m. Eastern Time to discuss Myriad's financial results for the fiscal third quarter of 2014, increased fiscal year 2014 guidance, and recent business highlights. The dial-in number for domestic callers is (800) 667-8757. International callers may dial (303) 223-4377. All callers will be asked to enter the reservation number 21714202. An archived replay of the call will be available for seven days by dialing (800) 633-8284 and entering the above reservation number. 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, Myriad myPath, Myriad myPlan, Myriad myRisk, and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G

MYRIAD GENETICS, INC. AND SUBSIDIARIES    
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)    
         
(in thousands, except per share amounts)Three Months EndedNine Months Ended
 Mar. 31, 2014Mar. 31, 2013Mar. 31, 2014Mar. 31, 2013
         
Molecular diagnostic testing $176,191 $148,384 $565,335 $416,304
Companion diagnostic services 6,733 8,088 24,115 22,746
Total revenue 182,924 156,472 589,450 439,050
         
Costs and expenses:        
Cost of molecular diagnostic testing 23,648 16,462 67,842 45,960
Cost of companion diagnostic services 2,961 3,872 10,379 11,585
Research and development expense 13,397 13,618 47,289 39,125
Selling, general, and administrative expense 87,631 64,602 242,752 180,294
Total costs and expenses 127,637 98,554 368,262 276,964
         
Operating income 55,287 57,918 221,188 162,086
         
Other income (expense):        
Interest income 2,498 1,434 5,190 4,187
Other (442) (111) (1,066) (224)
Total other income 2,056 1,323 4,124 3,963
         
Income before income taxes 57,343 59,241 225,312 166,049
         
Income tax provision (benefit) 20,573 21,349 82,719 62,984
         
Net income $36,770 $37,892 $142,593 $103,065
         
         
Earnings per share:        
Basic $0.50 $0.47 $1.87 $1.27
Diluted $0.48 $0.46 $1.82 $1.23
         
Weighted average shares outstanding        
Basic 73,821 80,375 76,173 81,219
Diluted 76,374 82,434 78,332 83,544
         
Condensed Consolidated Balance Sheets (Unaudited)    
 Mar. 31, 2014Jun. 30, 2013    
(In thousands)        
Cash, cash equivalents, and marketable investment securities $277,713 $531,064    
Trade receivables, net 82,678  94,333     
Other receivables 3,226  3,373     
Prepaid expenses 2,307  956     
Inventory 18,906  5,007     
Tax receivable 12,360  —     
Equipment and leasehold improvements, net 32,665  27,602     
Note receivable —  21,667     
Other assets 5,000  13,000     
Intangibles, net 208,296  13,330     
Goodwill 166,746  56,850     
Deferred tax assets 6,529  36,639     
Total assets $816,426 $803,821    
         
Accounts payable and accrued liabilities $70,038 $62,466    
Deferred revenue 2,118  2,043     
Uncertain tax benefits 13,641  10,718     
Deferred tax liabilities 8,387       
Stockholders' equity 722,242  728,594     
Total liabilities and stockholders' equity $816,426 $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 Nine Months ended March 31, 2014 and 2013
(Unaudited data in thousands)
 Three Months EndedNine Months Ended
 Mar. 31, 2014Mar. 31, 2013Mar. 31, 2014Mar. 31, 2013
         
GAAP Cost of molecular diagnostic testing  $ 23,648  $ 16,462  $ 67,842  $ 45,960
GAAP Cost of companion diagnostic testing  2,961  3,872  10,379  11,585
Acquisition - change of control payments  (238)  --  (238)  --
Acquisition - accelerated share-based compensation  (185)  --  (185)  --
Acquisition - amortization of intangible assets  --  --  --  --
Non-GAAP COGS  $ 26,186  $ 20,334  $ 77,798  $ 57,545
         
Non-GAAP Gross Margin 86% 87% 87% 87%
         
GAAP Research and Development  $ 13,397  $ 13,618  $ 47,289  $ 39,125
Acquisition - change of control payments  (1,710)  --  (1,710)  --
Acquisition - accelerated share-based compensation  (2,075)  --  (2,075)  --
Acquisition - amortization of intangible assets  (78)  (78)  (234)  (234)
Non-GAAP R&D  $ 9,534  $ 13,540  $ 43,270  $ 38,891
         
GAAP Selling, General and Administrative  $ 87,631  $ 64,602  $ 242,752  $ 180,294
Acquisition - change of control payments  (3,747)  --  (3,747)  --
Acquisition - accelerated share-based compensation  (4,669)  --  (4,669)  --
Acquisition - amortization of intangible assets  (1,067)  (116)  (1,400)  (349)
Non-GAAP SG&A  $ 78,148  $ 64,486  $ 232,936  $ 179,945
         
GAAP Operating Income  $ 55,287  $ 57,918  $ 221,188  $ 162,086
Acquisition - change of control payments  5,695  --  5,695  --
Acquisition - accelerated share-based compensation  6,929  --  6,929  --
Acquisition - amortization of intangible assets  1,145  194  1,634  583
Non-GAAP Operating Income  $ 69,056  $ 58,112  $ 235,446  $ 162,669
         
Non-GAAP Operating Margin 38% 37% 40% 37%
         
GAAP Net Income  $ 36,770  $ 37,892  $ 142,593  $ 103,065
Acquisition - change of control payments  5,695  --  5,695  --
Acquisition - accelerated share-based compensation  6,929  --  6,929  --
Acquisition - amortization of intangible assets  1,145  194  1,634  583
Tax benefit associated with non-GAAP adjustments  (4,337)  --  (4,337)  --
Non-GAAP Net Income  $ 46,202  $ 38,086  $ 152,514  $ 103,648
         
GAAP Diluted EPS  $ 0.48  $ 0.46  $ 1.82  $ 1.23
Non-GAAP Diluted EPS  $ 0.60  $ 0.46  $ 1.95  $ 1.24
         
Free Cash Flow Reconciliation        
(Unaudited data in thousands)        
 Three Months EndedNine Months Ended
 Mar. 31, 2014Mar. 31, 2013Mar. 31, 2014Mar. 31, 2013
         
GAAP cash flow from operations  $ 11,249  $ 37,396  $ 149,280  $ 110,866
         
Capital expenditures  (1,555)  (1,574)  (9,653)  (8,582)
         
Free cash flow after acquisition related charges  9,694  35,822  139,627  102,284
         
Acquisition - change in control payments  5,695  --  5,695  --
Acquisition - accelerated equity compensation  6,929  --  6,929  --
         
Free cash flow before acquisition related charges  $ 22,318  $ 35,822  $ 152,251  $ 102,284

Reconciliation of GAAP to Non-GAAP 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 from time to time in the Company's public report filed with the SEC, including the Company's recent Form 10-K and Form 10-Q.

 Fiscal Year 2014
Diluted net income per share  
GAAP diluted net income per share $2.23 - $2.26
Acquisition - change of control payments 0.04
Acquisition - accelerated share based compensation 0.06
Acquisition - amortization of intangible assets 0.04
Non-GAAP diluted net income per share$2.37 - $2.40

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 Company being well positioned to grow its business in the future, deliver long-term value for shareholders, and achieve its goal of building the leading global molecular diagnostic company focused on providing exceptional patient care across all major human diseases; the Company's financial guidance under the caption "Increased Fiscal Year 2014 Outlook;" and the Company's strategic directives under the caption "About Myriad Genetics". These "forward-looking statements" are management's present 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 described in the forward-looking statements. These risks include, but are not limited to: the risk that our expectations regarding our fiscal 2014 revenues and 2014 non-GAAP earnings per share may be incorrect (including because one or more of our assumptions underlying our revenue or expense expectations may not be realized), the risk that sales and profit margins of our existing molecular diagnostic tests and companion diagnostic 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; risks related to increased competition and the development of new competing tests and services; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic tests and companion diagnostic services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and companion diagnostic services, including our ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying our molecular diagnostic tests and companion diagnostic services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating our laboratory testing facilities; risks related to public concern over our 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; 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 or other intellectual property; risks related to changes in intellectual property laws covering our molecular diagnostic tests and companion diagnostic services and patents or enforcement in the United States and foreign countries; 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 of 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.

CONTACT: Media Contact: Ron Rogers

         (801) 584-3065

         rrogers@myriad.com

         

         Investor Contact: Scott Gleason

         (801) 584-1143

         sgleason@myriad.com