Market Newsdesk

February 23, 2021 4:10 pm

PPD Reports Fourth Quarterand Full Year 2020 Results

PPD Reports Fourth Quarterand Full Year 2020 Results

Provides First Quarter and Full Year 2021 Guidance

WILMINGTON, N.C.–(BUSINESS WIRE)–
PPD, Inc. (Nasdaq: PPD), a leading global contract research organization, today reported its financial results for the fourth quarter and full year ended December 31, 2020.

Highlights

Fourth quarter net authorizations of $1,297.6 million, representing 28.1% growth and resulting in a net book-to-bill ratio of 1.30x on a historical basis

Full year net authorizations of $4,613.7 million, representing 20.5% growth and resulting in a net book-to-bill ratio of 1.32x on a historical basis

Ending backlog of $8,187.9 million, an increase of 15.9% over the prior year-end on a historical basis

Fourth quarter and full year revenue of $1,364.3 million and $4,681.5 million, representing growth of 30.3% and 16.1% over the same periods in 2019, respectively

Fourth quarter and full year net income attributable to common stockholders of $73.1 million and $120.2 million, representing growth of 980.2% and 119.8% over the same periods in 2019, respectively

Fourth quarter and full year adjusted EBITDA of $251.9 million and $875.7 million, representing 17.9% and 12.7% growth over the same periods in 2019, respectively

Fourth quarter and full year diluted EPS of $0.20 and $0.35 and adjusted diluted EPS of $0.39 and $1.19, respectively

Full year 2021 guidance: revenue of $5,145 million to $5,304 million; adjusted EBITDA of $970 million to $1,000 million; adjusted diluted EPS of $1.37 to $1.45

First quarter 2021 guidance: revenue of $1,277 million to $1,302 million; adjusted EBITDA of $225 million to $229 million; adjusted diluted EPS of $0.30 to $0.32

“PPD’s talent and culture have been instrumental to our success,” said David Simmons, PPD’s chairman and CEO. “The challenges of the pandemic put a spotlight on our people, differentiated capabilities and therapeutic expertise – and PPD excelled in that spotlight. Not only have we played a key role in developing vaccines and therapeutics to prevent and treat COVID-19, but our unwavering commitment to study continuity and deployment of innovative solutions in this dynamic environment produced outstanding financial results. As we add another year of double-digit growth to our long track record of strong performance, we are very well positioned for 2021.”

Fourth Quarter 2020 Results

Revenue for the three months ended December 31, 2020 increased 30.3% to $1,364.3 million, compared to $1,046.9 million for the three months ended December 31, 2019. At the segment level, Clinical Development Services revenue of $1,110.1 million grew 28.3% and Laboratory Services revenue of $254.2 million grew 40.1%, each compared to the three months ended December 31, 2019.

Net income attributable to common stockholders for the three months ended December 31, 2020 was $73.1 million, or $0.20 per diluted share, compared to $6.8 million, or $0.02 per diluted share, for the three months ended December 31, 2019. Adjusted net income for the three months ended December 31, 2020 was $141.0 million, or $0.39 per diluted share, compared to adjusted net income of $92.2 million, or $0.33 per diluted share, for the three months ended December 31, 2019.

Adjusted EBITDA for the three months ended December 31, 2020 was $251.9 million, compared to $213.6 million for the three months ended December 31, 2019.

Full Year 2020 Results

Revenue for the year ended December 31, 2020 increased 16.1% to $4,681.5 million, compared to $4,031.0 million for the prior year. At the segment level, Clinical Development Services revenue of $3,804.9 million grew 13.4% and Laboratory Services revenue of $876.6 million grew 29.5%, each compared to the prior year.

Net income attributable to common stockholders for the year ended December 31, 2020 was $120.2 million, or $0.35 per diluted share, compared to $54.7 million, or $0.19 per diluted share, for the prior year. Adjusted net income for the year ended December 31, 2020 was $412.8 million, or $1.19 per diluted share, compared to adjusted net income of $286.8 million, or $1.02 per diluted share, for the prior year.

Adjusted EBITDA for the year ended December 31, 2020 was $875.7 million, compared to $776.9 million for the year ended December 31, 2019.

Important disclosures about, and reconciliations of, non-GAAP measures to their most directly comparable GAAP measures, including adjusted net income, adjusted diluted earnings per share and adjusted EBITDA, are provided in the “Non-GAAP Financial Measures” section of this press release.

Net Authorizations and Backlog

The following table provides select information related to PPD’s net authorizations and backlog as of and for the three months ended December 31, 2020 compared to the three months ended December 31, 2019:

Historical Basis

ASC 606 Direct Basis

ASC 606 Basis

(dollars in millions)

2020

% Change

2020

% Change

2020

% Change

Net authorizations……………………………………….

$1,297.6

28.1

%

$1,297.6

28.1

%

$1,881.9

38.5

%

Ending backlog………………………………………..

$8,187.9

15.9

%

$8,512.8

16.2

%

$12,237.7

19.1

%

Backlog conversion………………………………………..

12.7

%

11.7

%

11.6

%

Net book-to-bill………………………………………..

1.30x

1.36x

1.38x

The following table provides select information related to PPD’s net authorizations and backlog as of and for the year ended December 31, 2020 compared to the year ended December 31, 2019:

Historical Basis

ASC 606 Direct Basis

ASC 606 Basis

(dollars in millions)

2020

% Change

2020

% Change

2020

% Change

Net authorizations………………………………………..

$4,613.7

20.5

%

$4,613.7

20.5

%

$6,643.8

31.5

%

Ending backlog………………………………………..

$8,187.9

15.9

%

$8,512.8

16.2

%

$12,237.7

19.1

%

Backlog conversion………………………………………..

11.7

%

11.1

%

10.7

%

Net book-to-bill………………………………………..

1.32x

1.35x

1.42x

Financial Position

As of December 31, 2020, cash and cash equivalents were $768.0 million, gross debt was $4,289.7 million and net debt was $3,521.7 million, resulting in a net leverage ratio of 4.0x trailing 12-month adjusted EBITDA.

As of December 31, 2020, PPD had $298.4 million of borrowing capacity under its revolving credit facility. Total liquidity, which is comprised of PPD’s borrowing capacity under its revolving credit facility and cash and cash equivalents of $768.0 million, was $1,066.4 million as of December 31, 2020, representing a 65.7% increase over total liquidity of $643.6 million as of December 31, 2019.

On January 13, 2021, PPD entered into and closed a new (i) $3,050.0 million aggregate principal amount senior secured first-lien term loan facility (the “New Term Loan”) maturing in January 2028 and (ii) $600.0 million committed principal amount senior secured first-lien revolving credit facility maturing in January 2026 (the “New Revolving Credit Facility” and together with the New Term Loan, the “New Credit Agreement”). The proceeds from borrowings under the New Term Loan, together with cash on hand, were used to (i) refinance in full the principal amount outstanding and accrued and unpaid interest, fees and other amounts then due and owing under the then-existing credit agreement (the “Refinancing”) and (ii) pay fees and expenses relating to the New Credit Agreement.

PPD’s adjusted total liquidity as of December 31, 2020 was $1,312.9 million after giving effect to the New Credit Agreement and the Refinancing, as if each had occurred on such date.

Financial Guidance

PPD’s first quarter and full year 2021 guidance is as follows:

First Quarter 2021

Low – High ($)

Low – High (Y/Y%)

Revenue

$1,277 million – $1,302 million

19% – 21%

Adjusted EBITDA

$225 million – $229 million

14% – 17%

Adjusted diluted EPS

$0.30 – $0.32

25% – 33%

Full Year 2021

Low – High ($)

Low – High (Y/Y%)

Revenue

$5,145 million – $5,304 million

10% – 13%

Adjusted EBITDA

$970 million – $1,000 million

11% – 14%

Adjusted diluted EPS

$1.37 – $1.45

15% – 22%

First quarter and full year 2021 guidance assumes foreign exchange rates will remain in effect through the first quarter and full year. PPD’s guidance for adjusted diluted EPS also assumes (i) an estimated full year adjusted tax rate of between 23% and 24% and (ii) diluted weighted-average shares outstanding of 358 million as of March 31, 2021 and 360 million as of December 31, 2021, respectively.

Webcast and Conference Call Details

PPD will host a conference call on Wednesday, February 24, at 9:00 a.m. (Eastern Time) to discuss its fourth quarter and full year 2020 financial results. The conference call can be accessed live over the phone by dialing +1 877 407 0784, or for international callers, +1 201 689 8560.

Investors and other interested parties may also listen to a live webcast of the conference call by logging onto the investors section of PPD’s website at https://investors.ppd.com. An online replay will be available after the call and can be accessed by dialing +1 844 512 2921, or for international callers, +1 412 317 6671. The passcode for the live conference call and the replay is 13715818. The replay will be available until Wednesday, March 10, 2021.

About PPD

PPD is a leading global contract research organization providing comprehensive, integrated drug development, laboratory and lifecycle management services. Our customers include pharmaceutical, biotechnology, medical device, academic and government organizations. With locations in 46 countries and more than 26,000 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a firm commitment to quality to help customers bend the cost and time curve of drug development and optimize value in delivering life-changing therapies to improve health. For more information, visit www.ppd.com.

Forward-Looking Statements

This press release contains forward-looking statements. These statements often include words such as “anticipate,” “expect,” “suggest,” “plan,” “guidance,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will,” and other similar expressions, including forward-looking statements about the impact from the novel coronavirus disease (the “COVID-19 pandemic”). We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at this time, including the impact from the COVID-19 pandemic. As you consider this press release, you should understand that these statements are not guarantees of performance or results. The forward-looking statements contained herein are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results, including the impact from the COVID-19 pandemic, and our ability to achieve our projected financial guidance, and therefore actual results might differ materially from those expressed in these forward-looking statements. Factors that might materially affect such forward-looking statements and projections include: any failure of our backlog to accurately predict or convert into future revenue; the fact that our customers can terminate, delay or reduce the scope of our contracts with them upon short notice or with no notice; the impact of industry, customer and therapeutic area concentration; consolidation amongst our customers, and the potential for rationalization of the combined drug development pipeline, resulting in fewer products in clinical development; our ability to accurately price our contracts and manage our costs associated with performance of such contracts; any failures in our information and communication systems, including cybersecurity breaches, impacting us or our customers, clinical trial participants or employees; our dependence on our technology network, and the impact from upgrades to the network; any failure to perform services in accordance with contractual requirements, regulatory standards and ethical standards; our ability to access clinical research sites, attract suitable investigators or enroll a sufficient number of patients (including as a result of the COVID-19 pandemic) for our customers’ clinical trials; any failure by us to comply with numerous privacy laws; our ability to keep pace with rapid technological changes that could make our services less competitive or obsolete; our ability to recruit, retain and motivate key personnel, including the loss of any key executive who becomes seriously ill with COVID-19; our dependence on third parties for critical goods and support services, including a significant impact from the COVID-19 pandemic on our suppliers; any violation of laws, including laws governing the conduct of clinical trials or other biopharmaceutical research, and anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010; competition between our existing and potential customers and the potential negative impact on our business; our management of business restructuring transactions and the integration of acquisitions; risks related to the drug and medical device development services industry that could result in potential liability that could affect our business, reputation and financial condition; any failure of our insurance to cover the potential liabilities, including indemnification obligations, associated with the operation of our business and provision of services and changes to our insurance coverage; our use of biological and hazardous materials, which could violate law or cause injury or death, resulting in liability; international or U.S. economic, currency, political and other risks, such as those from the COVID-19 pandemic; disruptions to our operations by the occurrence of a natural disaster, pandemic (such as the COVID-19 pandemic), or other catastrophic events; the current and uncertain future impact from the COVID-19 pandemic on our business, growth, reputation, prospects, financial condition, results of operations (including components of our financial results), cash flows and liquidity; changes in tax laws, such as U.S. tax reform, or interpretations of existing tax laws; economic conditions, import/export implications and regulatory changes relating to the United Kingdom’s exit from the European Union; any inability to adequately protect our intellectual property or the security of our systems and the data stored therein; our investments in third parties, which are illiquid and subject to loss; the substantial value of our goodwill and intangible assets, which we might not fully realize, resulting in impairment losses; difficult and volatile conditions in the capital and credit markets and in the overall economy, including those caused by the COVID-19 pandemic; the fragmented and highly competitive nature of the drug development services industry; changes in trends in the biopharmaceutical industry, including decreases in research and development spending and outsourcing; the potential adverse effect that the political, economic and/or regulatory influences and changes impacting the United States and international healthcare industry could have on both our customers’ and our businesses, including as a result of healthcare reform; any patent or other intellectual property litigation we might be involved in; risks related to our indebtedness; risks related to ownership of our common stock; the significant influence certain stockholders have over us; other factors beyond our control; and other risk factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as updated by the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and other SEC filings, copies of which are available free of charge on the SEC website at www.sec.gov. These cautionary statements should not be construed by you to be exhaustive and are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Backlog and Net Authorizations

Revenue is comprised of direct, third-party pass-through and out-of-pocket revenue from providing services to customers. Direct revenue represents revenue associated with the direct services. Third-party pass-through and out-of-pocket revenue (collectively, “indirect revenue”) represents the reimbursement by customers of third-party pass-through and out-of-pocket costs incurred by PPD under its contracts with customers.

Historically, PPD reported backlog and net authorizations on a basis which excluded indirect revenues and the impact of Accounting Standards Codification (“ASC”) 606 (“ASC 606”) on direct revenue (“Historical Basis”). During the first quarter of 2020, PPD began to assess backlog and net authorizations on an ASC 606 direct revenue basis (“ASC 606 Direct Basis”) and on an ASC 606 total direct and indirect revenue basis (“ASC 606 Basis”).

Net authorizations represent new business awards, net of award or contract modifications, contract cancellations, foreign currency fluctuations and other adjustments. Backlog for all periods represents anticipated revenues for work not yet completed or performed (i) under signed contracts, letters of intent and, in some cases, awards that are supported by other forms of written communication and (ii) where there is sufficient or reasonable certainty about the customer’s ability and intent to fund and commence the services within six months. Backlog conversion represents quarterly revenues for the period divided by opening backlog for that period. The net book-to-bill ratio represents the amount of net authorizations for the period divided by revenues recognized in that period.

Backlog might not be a reliable indicator of future revenue and PPD might not realize all or any part of the revenue from the authorizations in backlog as of any point in time.

Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted tax rate, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio, total liquidity and adjusted total liquidity. A non-GAAP financial measure is generally defined as a numerical measure of a company’s financial performance or financial position that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP.

Adjusted EBITDA consists of net income or loss attributable to common stockholders of PPD, adjusted for changes in recapitalization investment portfolio consideration and net income or loss attributable to noncontrolling interest and before interest expense, net, provision for or benefit from income taxes and depreciation and amortization and eliminates (i) non-operating income or expense and (ii) impacts of certain non-cash, unusual or other items that are included in net income or loss that we do not consider indicative of our ongoing operating performance. Adjusted tax rate is calculated by dividing adjusted tax expense by adjusted income before the provision for income taxes, whereby adjusted tax expense equals the sum of the following line items: (i) (benefit from) provision for income taxes and (ii) tax adjustments, and adjusted income before the provision for income taxes equals the sum of the following line items: (i) income before (benefit from) provision for income taxes and (ii) total adjustments to net income. Adjusted net income (and adjusted diluted earnings per share) consists of net income or loss (and diluted earnings or loss per share) attributable to common stockholders of PPD before amortization and the elimination of (i) non-operating income or expense and (ii) impacts of certain non-cash, unusual or other items that are included in net income or loss that we do not consider indicative of our ongoing operating performance. In the case of adjusted EBITDA, adjusted net income and adjusted diluted earnings per share, we believe that making such adjustments provides management and investors meaningful information to understand our operating performance and the ability to analyze financial and business trends on a period-to-period basis. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we note that revenue generated from such intangibles is included within revenue in determining net income or loss attributable to common stockholders of PPD. Net debt consists of the outstanding principal balance of the term loan, senior unsecured notes, finance lease obligations and revolving credit borrowings, less cash and cash equivalents, and the net leverage ratio is equal to net debt divided by trailing 12-month adjusted EBITDA.

Other companies in our industry may calculate adjusted EBITDA, adjusted tax rate, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio, total liquidity and adjusted total liquidity differently than we do. As a result, these non-GAAP financial measures have limitations as analytical and comparative tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA, adjusted tax rate, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio, total liquidity and adjusted total liquidity should not be considered as measures of discretionary cash available to us to invest in the growth of our business. In calculating these performance and liquidity financial measures, we make certain adjustments that are based on assumptions and estimates that may prove to have been inaccurate. Our presentation of adjusted EBITDA, adjusted tax rate, adjusted net income, adjusted diluted earnings per share, net debt, net leverage ratio, total liquidity and adjusted total liquidity should not be construed as an inference that our future results and financial position will be unaffected by unusual items.

PPD has not reconciled the forward-looking adjusted EBITDA and adjusted diluted earnings per share guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), certain fair value measurements, recapitalization portfolio interest consideration and costs related to the uncertainties caused by the global COVID-19 pandemic, which are potential adjustments to future earnings. PPD expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

PPD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

Three Months Ended

December 31,

Years Ended

December 31,

2020

2019

2020

2019

Revenue…………………………………………………………………………………………………………

$

1,364,292

$

1,046,884

$

4,681,474

$

4,031,017

Operating costs and expenses:

Direct costs, exclusive of depreciation and amortization………………………………………………………………………………………………………

459,346

372,077

1,682,046

1,484,258

Reimbursed costs………………………………………………………………………………………………………

390,231

235,938

1,200,754

924,634

Selling, general and administrative expenses………………………………………………………………………………………………………

275,415

257,375

1,010,127

938,806

Depreciation and amortization………………………………………………………………………………………………………

72,721

66,934

279,116

264,830

Long-lived and goodwill asset impairments………………………………………………………………………………………………………

—

1,284

1,414

1,284

Total operating costs and expenses……………………………………………………………………………………………………..

1,197,713

933,608

4,173,457

3,613,812

Income from operations…………………………………………………………………………………………………..

166,579

113,276

508,017

417,205

Interest expense, net…………………………………………………………………………………………………………

(50,937)

(82,597)

(216,932)

(311,744)

Loss on extinguishment of debt…………………………………………………………………………………………………………

—

—

(93,534)

—

Gain (loss) on investments…………………………………………………………………………………………………………

36,088

3,673

52,737

(19,043)

Other expense, net…………………………………………………………………………………………………………

(48,643)

(23,985)

(62,740)

(27,143)

Income before (benefit from) provision for income taxes…………………………………………………………………………………………………..

103,087

10,367

187,548

59,275

(Benefit from) provision for income taxes…………………………………………………………………………………………………………

(1,877)

(9,430)

18,805

2,957

Income before equity in losses of unconsolidated affiliates…………………………………………………………………………………………………..

104,964

19,797

168,743

56,318

Equity in losses of unconsolidated affiliates, net of income taxes…………………………………………………………………………………………………………

(2,501)

(1,503)

(8,187)

(3,563)

Net income…………………………………………………………………………………………………..

102,463

18,294

160,556

52,755

Net income attributable to noncontrolling interest …………………………………………………………………………………………………………

(2,366)

(1,544)

(6,865)

(4,934)

Net income attributable to PPD, Inc……………………………………………………………………………………………………

100,097

16,750

153,691

47,821

Recapitalization investment portfolio consideration…………………………………………………………………………………………………………

(27,009)

(9,984)

(33,538)

6,846

Net income attributable to common stockholders of PPD, Inc……………………………………………………………………………………………………

$

73,088

$

6,766

$

120,153

$

54,667

Earnings per share attributable to common stockholders of PPD, Inc.:

Basic…………………………………………………………………………………………………..

$

0.21

$

0.02

$

0.35

$

0.20

Diluted…………………………………………………………………………………………………..

$

0.20

$

0.02

$

0.35

$

0.19

Weighted-average common shares outstanding:…………………………………………………………………………………………………………

Basic…………………………………………………………………………………………………..

349,851

279,433

341,178

279,285

Diluted…………………………………………………………………………………………………..

357,226

282,603

346,684

280,693

PPD, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except par value)

Assets

December 31,

2020

2019

Current assets:

Cash and cash equivalents……………………………………………………………………………………..

$

767,999

$

345,187

Accounts receivable and unbilled services, net…………………………………………………………

1,609,718

1,326,614

Income taxes receivable…………………………………………………………………………………………

22,386

27,437

Prepaid expenses and other current assets………………………………………………………………..

146,100

119,776

Total current assets…………………………………………………………………………………….

2,546,203

1,819,014

Property and equipment, net……………………………………………………………………………………….

496,474

458,845

Investments in unconsolidated affiliates………………………………………………………………………

43,178

34,028

Investments……………………………………………………………………………………………………………..

265,894

250,348

Goodwill, net……………………………………………………………………………………………………………

1,820,208

1,764,104

Intangible assets, net………………………………………………………………………………………………….

748,404

892,091

Other assets……………………………………………………………………………………………………………..

201,643

156,220

Operating lease right-of-use assets………………………………………………………………………………

171,839

181,596

Total assets……………………………………………………………………………………………….

$

6,293,843

$

5,556,246

Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit

Current liabilities:

Accounts payable………………………………………………………………………………………………….

$

176,341

$

130,060

Accrued expenses:

Payables to investigators…………………………………………………………………………………..

404,654

322,231

Accrued employee compensation………………………………………………………………………

331,156

263,834

Accrued interest………………………………………………………………………………………………

2,825

44,527

Other accrued expenses…………………………………………………………………………………….

192,954

138,632

Income taxes payable…………………………………………………………………………………………….

21,206

15,161

Unearned revenue…………………………………………………………………………………………………

1,060,544

1,110,872

Current portion of operating lease liabilities…………………………………………………………….

51,643

45,962

Current portion of long-term debt and finance lease obligations…………………………………

36,238

35,794

Total current liabilities……………………………………………………………………………….

2,277,561

2,107,073

Accrued income taxes……………………………………………………………………………………………….

18,658

38,465

Deferred tax liabilities……………………………………………………………………………………………….

54,535

92,225

Recapitalization investment portfolio liability……………………………………………………………..

191,923

191,678

Long-term operating lease liabilities, less current portion………………………………………………

137,657

153,766

Long-term debt and finance lease obligations, less current portion………………………………….

4,226,192

5,608,134

Other liabilities…………………………………………………………………………………………………………

98,908

33,017

Total liabilities………………………………………………………………………………………….

7,005,434

8,224,358

Redeemable noncontrolling interest…………………………………………………………………………….

34,929

30,036

Stockholders’ deficit:

Common stock $0.01 par value,

2,000,000 shares authorized; 350,858 shares issued and

350,132 shares outstanding as of December 31, 2020 and

2,080,000 shares authorized; 280,127 shares issued and

279,426 shares outstanding as of December 31, 2019…………………………………………

3,509

2,801

Treasury stock, at cost, 726 and 701 shares as of

December 31, 2020 and 2019, respectively……………………………………………………….

(13,268)

(12,707)

Additional paid-in-capital……………………………………………………………………………………..

1,819,892

1,983

Accumulated deficit………………………………………………………………………………………………

(2,271,808)

(2,391,321)

Accumulated other comprehensive loss…………………………………………………………………..

(284,845)

(298,904)

Total stockholders’ deficit…………………………………………………………………………..

(746,520)

(2,698,148)

Total liabilities, redeemable noncontrolling interest and stockholders’ deficit…..

$

6,293,843

$

5,556,246

PPD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Years Ended December 31,

2020

2019

Cash flows from operating activities:

Net income……………………………………………………………………………………………………………….

$

160,556

$

52,755

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization……………………………………………………………………………………

279,116

264,830

Long-lived and goodwill asset impairments…………………………………………………………………..

1,414

1,284

Stock-based compensation expense…………………………………………………………………………….

21,274

15,632

Non-cash operating lease expense……………………………………………………………………………….

43,797

40,633

Amortization of debt issuance costs, modification costs and debt discounts…………………………..

10,535

17,768

Non-cash losses (gains) on interest rate swaps

2,572

(9,523)

(Gain) loss on investments

(52,737)

19,043

Loss on unconsolidated affiliates

8,187

3,563

Deferred income tax benefit

(38,564)

(84,795)

Loss on extinguishment of debt………………………………………………………………………………….

93,534

—

Amortization of costs to obtain a contract……………………………………………………………………..

11,224

11,432

Other…………………………………………………………………………………………………………………..

(1,722)

9,366

Change in operating assets and liabilities, net of effect of businesses acquired or sold:

Accounts receivable and unbilled services, net……………………………………………………………

(278,471)

(28,075)

Prepaid expenses and other current assets………………………………………………………………….

15,577

(11,465)

Other assets……………………………………………………………………………………………………….

(40,899)

(31,288)

Income taxes, net…………………………………………………………………………………………………

(7,001)

7,712

Accounts payable, accrued expenses and other liabilities……………………………………………….

141,238

26,283

Operating lease liabilities………………………………………………………………………………………

(45,330)

(39,065)

Unearned revenue………………………………………………………………………………………………..

(72,966)

166,856

Net cash provided by operating activities………………………………………………………………………….

251,334

432,946

Cash flows from investing activities:

Purchases of property and equipment……………………………………………………………………..

(163,331)

(125,424)

Acquisitions of businesses, net of cash and cash equivalents acquired…………………………….

321

(74,187)

Capital contributions paid for investments……………………………………………………………….

(6,852)

(4,069)

Distributions received from investments

43,974

452

Investments in unconsolidated affiliates…………………………………………………………………..

(20,000)

(30,000)

Net cash used in investing activities………………………………………………………………………………..

(145,888)

(233,228)

Cash flows from financing activities:

Repurchase of common stock………………………………………………………………………………..

(626)

(4,012)

Proceeds from exercise of stock options…………………………………………………………………..

24,264

4,524

Borrowing on revolving credit facility……………………………………………………………………..

150,000

—

Repayment of revolving credit facility…………………………………………………………………….

(150,000)

—

Proceeds from issuance of senior notes…………………………………………………………………….

1,200,000

891,000

Redemption of HoldCo Notes………………………………………………………………………………..

(1,464,500)

—

Redemption of OpCo Notes………………………………………………………………………………….

(1,160,865)

—

Payments on long-term debt and finance leases………………………………………………………….

(41,137)

(37,409)

Distribution to noncontrolling interest holder…………………………………………………………….

(3,829)

—

Payment of debt issuance and debt modification costs…………………………………………………

(20,738)

(30,142)

Payment of contingent consideration for acquisition of business…………………………………….

(4,338)

—

Net proceeds from initial public offering………………………………………………………………….

1,772,960

—

Recapitalization investment portfolio distribution……………………………………………………….

(20,474)

—

Return of capital and special dividend to stockholders…………………………………………………

—

(1,246,000)

Net cash provided by (used in) financing activities……………………………………………………………..

280,717

(422,039)

Effect of exchange rate changes on cash and cash equivalents………………………………………………..

36,649

14,442

Net increase (decrease) in cash and cash equivalents……………………………………………………………

422,812

(207,879)

Cash and cash equivalents, beginning of the period……………………………………………………………..

345,187

553,066

Cash and cash equivalents, end of the period……………………………………………………………………..

$

767,999

$

345,187

PPD, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(unaudited)

(in thousands, except per share data)

Three Months Ended

December 31,

Years Ended

December 31,

2020

2019

2020

2019

Net income attributable to common stockholders of PPD, Inc………………………………..

$

73,088

$

6,766

$

120,153

$

54,667

Recapitalization investment portfolio consideration…………………………………………….

27,009

9,984

33,538

(6,846)

Net income attributable to noncontrolling interest……………………………………………….

2,366

1,544

6,865

4,934

Net income……………………………………………………………………………………………..

102,463

18,294

160,556

52,755

Reconciliation to Adjusted EBITDA:

Interest expense, net…………………………………………………………………………………….

50,937

82,597

216,932

311,744

(Benefit from) provision for income taxes…………………………………………………………

(1,877)

(9,430)

18,805

2,957

Depreciation and amortization……………………………………………………………………….

72,721

66,934

279,116

264,830

Stock-based compensation expense…………………………………………………………………

5,175

3,931

21,274

15,632

Option holder special bonuses (a)……………………………………………………………………

659

4,017

6,288

18,874

Other expense, net (b)………………………………………………………………………………….

48,643

23,985

62,740

27,143

Long-lived and goodwill asset impairments……………………………………………………….

—

1,284

1,414

1,284

Loss on extinguishment of debt………………………………………………………………………

—

—

93,534

—

Sponsor fees and related costs (c)……………………………………………………………………

—

934

448

3,805

Severance and charges for other cost reduction activities (d)………………………………….

245

2,641

2,305

10,398

Transaction-related and public company transition costs (e)…………………………………..

1,233

9,959

10,177

22,950

(Gain) loss on investments (f)………………………………………………………………………..

(36,088)

(3,673)

(52,737)

19,043

Other adjustments (g)…………………………………………………………………………………..

7,749

12,148

54,825

25,530

Adjusted EBITDA……………………………………………………………………………………

$

251,860

$

213,621

$

875,677

$

776,945

Reconciliation to Adjusted Net Income:

Net income………………………………………………………………………………………………..

$

102,463

$

18,294

$

160,556

$

52,755

Amortization of intangible assets…………………………………………………………………….

39,015

40,949

157,613

162,121

Amortization of debt issuance and modification costs and debt discount…………………..

2,272

5,606

10,535

17,768

Amortization of accumulated other comprehensive income on derivatives………………..

(2,060)

(2,366)

(11,313)

(9,523)

Stock-based compensation expense…………………………………………………………………

5,175

3,931

21,274

15,632

Option holder special bonuses (a)……………………………………………………………………

659

4,017

6,288

18,874

Other expense, net (b)………………………………………………………………………………….

48,643

23,985

62,740

27,143

Long-lived and goodwill asset impairments……………………………………………………….

—

1,284

1,414

1,284

Loss on extinguishment of debt………………………………………………………………………

—

—

93,534

—

Sponsor fees and related costs (c)……………………………………………………………………

—

934

448

3,805

Severance and charges for other cost reduction activities (d)………………………………….

245

2,641

2,305

10,398

Transaction-related and public company transition costs (e)…………………………………..

1,233

9,959

10,177

22,950

(Gain) loss on investments (f)………………………………………………………………………..

(36,088)

(3,673)

(52,737)

19,043

Other adjustments (g)…………………………………………………………………………………..

7,749

12,148

54,825

25,530

Total adjustments……………………………………………………………………………………….

66,843

99,415

357,103

315,025

Tax adjustments¹ (h)……………………………………………………………………………………

(28,302)

(25,550)

(104,816)

(80,961)

Adjusted net income………………………………………………………………………………….

$

141,004

$

92,159

$

412,843

$

286,819

Diluted weighted average common shares outstanding…………………………………………

357,226

282,603

346,684

280,693

Adjusted diluted earnings per share……………………………………………………………….

$

0.39

$

0.33

$

1.19

$

1.02

¹The GAAP effective tax rate was (2%) and (91%) for the three months ended December 31, 2020 and 2019, respectively, and 10% and 5% for the years ended December 31, 2020 and 2019, respectively. The adjusted tax rate, as defined in the “Non-GAAP Financial Measures” section of this press release, was 16% and 15% for the three months ended December 31, 2020 and 2019, respectively, and 23% and 22% for the years ended December 31, 2020 and 2019, respectively.

PPD, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures

(unaudited)

(in thousands, except net leverage ratio)

Calculation of Net Leverage Ratio as of December 31, 2020

Gross debt………………………………………………………………………………………………………………………………………….

$

4,289,740

Less: Cash and cash equivalents………………………………………………………………………………………………………………

767,999

Net debt……………………………………………………………………………………………………………………………………………..

$

3,521,741

Adjusted EBITDA………………………………………………………………………………………………………………………………..

$

875,677

Net leverage ratio (net debt/trailing 12-month adjusted EBITDA)…………………………………………………………………….

4.0x

____________________

(a) Represents PPD’s costs associated with special cash bonuses paid to PPD’s option holders.

(b) Primarily represents losses from fluctuations in foreign currency exchange rates.

(c) Represents management fees incurred under consulting services agreements with certain investment funds of Hellman & Friedman LLC and its affiliates and The Carlyle Group, Inc. and its affiliates. These consulting services agreements terminated upon consummation of PPD’s initial public offering (“IPO”).

(d) Represents employee separation costs, exit and disposal costs associated with the full or partial exit of certain leased facilities, costs associated with planned employee reorganizations and other contract termination costs from various cost-reduction activities.

(e) Represents integration and transaction costs incurred with completed or contemplated acquisitions, costs incurred in connection with PPD’s IPO, secondary offering, other transaction costs and costs associated with PPD’s public company transition.

(f) Represents the fair value accounting gains or losses primarily from PPD’s investments in Auven Therapeutics Holdings, L.P. and venBio Global Strategic Fund, L.P.

(g) Other adjustments include amounts that management believes are not representative of our operating performance. These adjustments include implementation costs associated with a new enterprise resource planning system, one-time costs incurred in 2020 associated with the termination of a long-term incentive program which has been replaced by a traditional stock-based program in 2020, advisory costs associated with the adoption of new accounting standards, one-time costs and income associated with the COVID-19 pandemic and other unusual charges or income.

(h) Includes the tax effect of non-GAAP adjustments at an estimated blended statutory tax rate of 26%, excluding the change in recapitalization investment portfolio consideration, and $(11,483) and $(13,559) in other tax adjustments for the three months and year ended December 31, 2020, respectively, as they are not representative of PPD’s operating performance. There were no other tax adjustments for either the three months or year ended December 31, 2019.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006094/en/

PPD Contacts

Media:

Ned Glascock

+1 910 558 8760

[email protected]

Investors:

Tracy Krumme

+1 910 558 4186

[email protected]

KEYWORDS: North Carolina United States North America

INDUSTRY KEYWORDS: Health Other Science Clinical Trials Research Science Pharmaceutical Biotechnology

MEDIA:

Logo

Posted on February 23, 2021 4:10 pm
XOMA to Present at Upcoming Investor Conferences

EMERYVILLE, Calif., Feb. 23, 2021 (GLOBE NEWSWIRE) — XOMA Corporation (NASDAQ: XOMA) announced today its Chief Executive Officer, Jim Neal, will present at the following upcoming investor conferences:

The Cowen 41^st Annual Virtual Health Care Conference. Mr. Neal will be featured in a panel session entitled, “Blazing New Paths in Clinical Development and Structure” on Tuesday, March 2, 2021 at 2:10 PM ET. The session will be available via live webcast to conference attendees.

H.C. Wainwright Global Life Science s Conference. The presentation will be available on demand beginning March 9, 2021 at 7:00 AM ET and can be accessed at http://bit.ly/3k8O9yj. The presentation can also be accessed by visiting the investor relations section of the Company’s website at www.xoma.com. A replay of the presentation will be available and archived on the site for 90 days after the event.

About XOMA Corporation

XOMA has built a significant portfolio of products that are licensed to and being developed by other biotechnology and pharmaceutical companies. The Company’s portfolio of partner-funded programs spans multiple stages of the drug development process and across various therapeutic areas. Many of these licenses are the result of XOMA’s pioneering efforts in the discovery and development of antibody therapeutics. The Company’s royalty-aggregator business model includes acquiring additional licenses to programs with third-party funding. For more information, visit www.xoma.com.

Forward-Looking Statements/Explanatory Notes

Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the potential of XOMA’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time, creating additional value for the stockholders and cash sufficiency forecast. These statements are based on assumptions that may not prove accurate, and actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry, including those related to the fact that our product candidates subject to out-license agreements are still being developed, and our licensees may require substantial funds to continue development which may not be available; we do not know whether there will be, or will continue to be, a viable market for the products in which we have an ownership or royalty interest; if the therapeutic product candidates to which we have a royalty interest do not receive regulatory approval, our third-party licensees will not be able to market them. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA’s most recent filing on Form 10-K and in other SEC filings. Consider such risks carefully when considering XOMA’s prospects. Any forward-looking statement in this press release represents XOMA’s views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. XOMA disclaims any obligation to update any forward-looking statement, except as required by applicable law.

EXPLANATORY NOTE: Any references to “portfolio” in this press release refer strictly to milestone and/or royalty rights associated with a basket of drug products in development. Any references to “assets” in this press release refer strictly to milestone and/or royalty rights associated with individual drug products in development.   References to royalties or royalty rates strictly refer to future potential payment streams regardless of whether or not they are technically defined as royalties in the underlying contractual agreement; further, any rates referenced herein are subject to potential future contractual adjustments.

As of the date of this press release, all assets in XOMA’s milestone and royalty portfolio are investigational compounds. Efficacy and safety have not been established. There is no guarantee that any of these assets will become commercially available.

Investor contact:

Juliane Snowden
Oratorium Group, LLC
+1 646-438-9754
[email protected]

Media contact:

Kathy Vincent
KV Consulting & Management
+1 310-403-8951
[email protected]

Posted on February 23, 2021 4:10 pm
Xperi Holding Corporation Announces Fourth Quarter 2020 Results

Xperi Holding Corporation Announces Fourth Quarter 2020 Results

SAN JOSE, Calif.–(BUSINESS WIRE)–
Xperi Holding Corporation (Nasdaq: XPER) (the “Company”, “Xperi” or “we”) today announced financial results for the fourth quarter ended December 31, 2020.

“Last year was transformative for Xperi. We closed our merger with TiVo, made significant progress on integration, and were able to achieve $45 million in run rate synergies by year end. Additionally, we closed one of the largest IP licensing deals in the history of both companies, took important steps to increase profitability on the product side of the business, and announced significant new product offerings,” said Jon Kirchner, chief executive officer of Xperi. “As we enter 2021, we continue to build our IP licensing business and product business, positioning them for improved long-term growth, stability, and profitability.”

Fourth Quarter 2020 Financial Highlights:

Revenue of $433.9 million.

Cash Flow from Operations of $298.2 million.

Adjusted Free Cash Flow¹ of $296.8 million.

Paid down $163.1 million of corporate debt.

Bought back $20 million of common stock at an average price of $19.82.

Business and Recent Operating Highlights:

IP Licensing Business

Announced a new license agreement with Comcast that extends into 2031.

Entered a license agreement with Canon for DBI hybrid bonding.

Renewed and extended licenses with Cox, TCL, and Sony in Q1 2021.

Product Business

Consumer Experience business highlights:

Improved monetization in our consumer hardware business driven by higher user engagement on our content-first platform and an increased user base.

Expanded TiVo+ content from 26 to 145 linear channels and added tens of thousands of AVOD viewing hours.

Sony announced its BRAVIA CORE service, which will launch soon with the largest IMAX Enhanced movie collection to date.

Perceive won multiple innovation awards, including being named a CES 2021 Innovation Awards Honoree.

Connected Car business highlights:

Delivered HD Radio on eight new car models in North America.

Branded Connected Radio as DTS AutoStage, adding additional features such as lyrics to the platform.

Branded in-cabin monitoring solutions as DTS AutoSense, which are available across four OEM providers including three light truck and bus suppliers in Asia and one major European passenger vehicle manufacturer coming to market later this year.

Pay-TV business highlights:

Worked with partners to increase household deployments of TiVo IPTV in the United States and Latin America to help mitigate revenue declines in the business.

Added two new operator IPTV design wins.

Capital Allocation

On December 31, 2020, the Company paid down $150 million of debt, in addition to paying $13.1 million of scheduled debt amortization during the quarter.

During the quarter, the Company repurchased approximately 1 million shares of its common stock at an average price of $19.82 for a total of $20 million pursuant to a previously announced stock repurchase program.

On December 21, 2020, the Company paid $5.3 million to stockholders of record on November 30, 2020, for a quarterly cash dividend of $0.05 per share of common stock.

On February 3, 2021, the board of directors declared a dividend of $0.05 per share, payable on March 30, 2021, to stockholders of record on March 16, 2021.

Financial Outlook

The Company’s full year 2021 outlook is as follows:

Category

GAAP Outlook

Non-GAAP Outlook

Revenue

$860M to $900M

$860M to $900M

COGS

$115M to $125M

$115M to $125M

Operating Expense excluding COGS^*

$760M to $790M

$475M to $505M

Interest Expense

~ $43M

~ $43M

Other Income

~ $4M

~ $4M

Cash Tax (net of refunds)

$35M to $38M

$35M to $38M

Basic Shares Outstanding

105M

105M

Diluted Shares Outstanding

107M

112M

Operating Cash Flow

$180M to $220M

$180M to $220M

Adjusted Free Cash Flow^1*

$185M to $225M

$185M to $225M

*See tables for reconciliation of GAAP to non-GAAP differences.

¹Adjusted Free Cash Flow is defined as Operating Cash Flow, less purchases of property and equipment, plus merger and integration, separation, and severance and retention costs.

Conference Call Information

The Company will hold its fourth quarter 2020 earnings conference call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on Tuesday, February 23, 2021. To access the call in the U.S., please dial 800-437-2398, and for international callers, dial +1 323-289-6576. The conference ID is 5453588. All participants should dial in at least 15 minutes prior to the start of the conference call. Due to the COVID-19 pandemic and a lower number of operators, wait times for the dial-in may be long and the Company suggests utilizing the webcast link to access the call at Q4 Earnings Call Webcast.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the Company’s current expectations, estimates and projections about the Company’s financial results, forecasts, and business outlook, and our expectations for 2021, the development of our IP licensing and product businesses, and improved long-term growth, stability, and profitability. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control, and are not guarantees of future results, such as statements about the anticipated benefits of the transaction. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: challenges in integration of Xperi and TiVo operations after the merger, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenue, cost savings, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business strategies, and expansion and growth of the Company’s businesses; failure to realize the anticipated benefits of the recent merger with TiVo; the Company’s ability to implement its business strategy; pricing trends, including the Company’s ability to achieve economies of scale; the ability of the Company to retain and hire key personnel; potential adverse reactions or changes to business relationships resulting from the merger with TiVo; uncertainty as to the long-term value of the Company’s common stock; legislative, regulatory and economic developments affecting the Company’s business; general economic and market developments and conditions; failure to remediate the material weaknesses in our internal control over financial reporting; the evolving legal, regulatory and tax regimes under which the Company operates; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, and natural disasters; the extent to which the COVID-19 pandemic continues to have an adverse impact on our business, results of operations, and financial condition will depend on future developments, including measures taken in response to the pandemic, which are highly uncertain and cannot be predicted; and any plans regarding a potential separation of the combined business. These risks, as well as other risks associated with the business, are more fully discussed in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Company’s Quarterly Report on Form 10-Q. While the list of factors presented here is, and the list of factors presented in the Company’s filings with the SEC are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, liquidity or trading price of common stock. The Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

About Xperi Holding Corporation

Xperi invents, develops, and delivers technologies that enable extraordinary experiences. Xperi technologies, delivered via its brands (DTS, HD Radio, IMAX Enhanced, Invensas, TiVo), and by its startup, Perceive, make entertainment more entertaining, and smart devices smarter. Xperi technologies are integrated into billions of consumer devices, media platforms, and semiconductors worldwide, driving increased value for partners, customers and consumers.

Xperi, DTS, IMAX Enhanced, Invensas, HD Radio, Perceive, TiVo and their respective logos are trademarks or registered trademarks of affiliated companies of Xperi Holding Corporation in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amortization charges; costs related to actual or planned business combinations including transaction fees, integration costs, severance, facility closures, and retention bonuses; separation costs; all forms of stock-based compensation; loss on debt extinguishment; realized and unrealized gains or losses on marketable equity securities and associated tax effects. Management believes that the non-GAAP measures used in this release provide investors with important perspectives into the Company’s ongoing business and financial performance, and provide a better understanding of our core operating results reflecting our normal business operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our use of non-GAAP financial measures has certain limitations in that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP Operating Expenses, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures in the tables attached hereto. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures. All financial data is presented on a GAAP basis except where the Company indicates its presentation is on a non-GAAP basis.

Set forth below are reconciliations of the Company’s reported and forecasted GAAP to non-GAAP financial metrics.

XPER – E

XPERI HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Three Months Ended Twelve Months Ended

December 31,
2020 December 31,
2019 December 31,
2020 December 31,
2019

Revenue:

Licensing, services and software
$

                  427,801

$

                    90,420

$

                  876,603

$

                  279,513

Hardware

                         6,126

                              98

                       15,417

                            554

Total Revenue

                     433,927

                       90,518

                     892,020

                     280,067

Operating expenses:

Cost of licensing, services and software revenue, excluding depreciation and amortization of intangible assets

                       25,634

                         2,158

                       57,280

                         8,129

Cost of hardware revenue, excluding depreciation and amortization of intangible assets

                         7,389

                              61

                       21,077

                            331

Research, development and other related costs

                       70,589

                       32,846

                     195,154

                     110,850

Selling, general and administrative

                       76,770

                       33,550

                     245,356

                     117,671

Depreciation expense

                         6,103

                         1,665

                       17,918

                         6,721

Amortization expense

                       51,379

                       24,027

                     156,826

                       99,946

Litigation expense

                         6,281

                         1,079

                       20,782

                         5,127

Total operating expenses

                     244,145

                       95,386

                     714,393

                     348,775

Operating income (loss)

                     189,782

                       (4,868

)

                     177,627

                     (68,708

)

Interest expense

                     (13,271

)

                       (4,987

)

                     (37,873

)

                     (23,377

)

Other income, net

                         1,007

                         1,491

                         4,455

                         9,028

Loss on debt extinguishment

—

—

(8,300

)

—

Income (loss) before taxes

                     177,518

                       (8,364

)

                     135,909

                     (83,057

)

Provision for (benefit from) income taxes

                       (1,126

)

                         8,056

                       (7,887

)

                     (19,024

)

Net income (loss)

                     178,644

                     (16,420

)

                     143,796

                     (64,033

)

Less: Net loss attributable to noncontrolling interest

(1,147

)

(408

)

(2,966

)

(1,503

)

Net income (loss) attributable to the Company
$

                  179,791

$

                  (16,012

)

$

                  146,762

$

                  (62,530

)

Income (loss) per share attributable to the Company:

Basic
$

                        1.70

$

                      (0.32

)

$

                        1.77

$

                      (1.27

)

Diluted
$

                        1.68

$

                      (0.32

)

$

                        1.75

$

                      (1.27

)

Weighted average number of shares used in per share calculations-basic

                     105,498

                       49,566

                       82,840

                       49,120

Weighted average number of shares used in per share calculations-diluted

                     106,907

                       49,566

                       83,856

                       49,120

XPERI HOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

December 31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents
$

                  170,188

$

                    74,551

Available-for-sale debt securities

                       86,947

                       45,802

Equity securities

—

                         1,124

Accounts receivable

                     115,975

                       24,177

Unbilled contracts receivable

                     132,431

                     121,826

Other current assets

                       40,763

                       13,735

Total current assets

                     546,304

                     281,215

Long-term unbilled contracts receivable

                         6,761

                       26,672

Property and equipment, net

                       63,207

                       32,877

Operating lease right-of-use assets

                       80,226

17,786

Intangible assets, net

                  1,004,379

                     232,275

Goodwill

                     847,029

                     385,784

Other long-term assets

                     153,270

                       71,336

Total assets
$

               2,701,176

$

               1,047,945

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable
$

                    13,045

$

                      4,650

Accrued legal fees

                         5,783

                         1,316

Accrued liabilities

                     129,035

                       41,433

Current portion of long-term debt

                       43,689

                                –

Deferred revenue

                       33,119

720

Total current liabilities

                     224,671

                       48,119

Deferred revenue, less current portion

                       39,775

—

Long-term deferred tax liabilities

                       24,754

                       29,735

Long-term debt, net

                     795,661

                     334,679

Noncurrent operating lease liabilities

                       66,243

13,414

Other long-term liabilities

                       98,953

                       76,898

Total liabilities

                  1,250,057

                     502,845

Commitments and contingencies

Company stockholders’ equity:

Preferred stock

—

—

Common stock

                            110

                              64

Additional paid-in capital

                  1,268,471

                     768,284

Treasury stock at cost

                     (77,218

)

                   (368,701

)

Accumulated other comprehensive income (loss)

                         1,264

                            (53

)

Retained earnings

                     264,250

                     148,317

Total Company stockholders’ equity

                  1,456,877

                     547,911

Noncontrolling interest

                       (5,758

)

                       (2,811

)

Total equity

                  1,451,119

                     545,100

Total liabilities and equity
$

               2,701,176

$

               1,047,945

XPERI HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Twelve Months Ended

December 31,
2020 December 31,
2019

Cash flows from operating activities:

Net income (loss)
$

                  143,796

$

                  (64,033

)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Depreciation of property and equipment

                       17,918

                         6,721

Amortization of intangible assets

                     156,826

                       99,946

Stock-based compensation expense

                       39,135

                       31,554

Deferred income tax

                     (34,670

)

                     (38,611

)

Loss on debt extinguishment

8,300

—

Other

                       19,500

                         2,654

Changes in operating assets and liabilities, net of business acquisitions:

Accounts receivable

                         7,091

                         6,191

Unbilled contracts receivable, net

                       76,262

                     130,359

Other assets

                     (41,948

)

                         3,675

Accounts payable

                       (4,863

)

                         1,886

Accrued and other liabilities

                       21,692

                       (8,679

)

Deferred revenue

                       18,564

                       (2,410

)

Net cash from operating activities

                     427,603

                     169,253

Cash flows from investing activities:

Purchases of property and equipment

                       (7,379

)

                       (8,813

)

Proceeds from sale of property and equipment

—

55

Net cash received (paid) for mergers and acquisitions

117,424

—

Purchases of short-term investments

(77,178

)

(40,008

)

Proceeds from sales of short-term investments

11,225

6,833

Proceeds from maturities of short-term investments

24,683

27,290

Purchases of intangible assets

                     (50,935

)

                       (4,500

)

Net cash from investing activities

                       17,840

                     (19,143

)

Cash flows from financing activities:

Repayment of debt

                   (520,250

)

                   (150,000

)

Repayment of assumed debt from merger transaction

                   (734,609

)

—

Proceeds from debt, net

1,010,286

                                –

Contingent consideration payments after acquisition

—

(1,200

)

Dividend paid

(30,829

)

(39,502

)

Proceeds from exercise of stock options

                              91

                            695

Proceeds from employee stock purchase program

                         4,764

                         5,329

Repurchases of common stock

                     (80,589

)

                       (4,506

)

Net cash from financing activities

                   (351,136

)

                   (189,184

)

Effect of exchange rate changes on cash and cash equivalents

                         1,330

—

Net increase (decrease) in cash and cash equivalents

                       95,637

                     (39,074

)

Cash and cash equivalents at beginning of period

                       74,551

                     113,625

Cash and cash equivalents at end of period
$

                  170,188

$

                    74,551

Supplemental disclosure of cash flow information:

Interest paid
$

                    31,240

$

                    20,891

Income taxes paid, net of refunds
$

                    43,066

$

                    15,001

Stock issued in merger transaction
$

                  828,334

$

                           —

XPERI HOLDING CORPORATION

RECONCILIATION FROM OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW

(in thousands)

(unaudited)

Three Months Ended

December 31, 2020

Cash flow from operations (1)
$

                298,170

Adjustments to cash flow from operations:

Purchases of property & equipment (2)

                     (4,404

)

Merger and integration costs

                          319

Separation-related costs

                       2,260

Severance costs

                          468

Adjusted free cash flow
$

                296,813

(1)
derived from the difference between Q4 year-to-date operating cash flow of $427,603 and Q3 year-to-date operating cash flow of $129,433.

(2)
derived from the difference between Q4 year-to-date purchases of property & equipment of $7,379 and Q3 year-to-date purchases of property & equipment of $2,975.

XPERI HOLDING CORPORATION

RECONCILIATION FOR GUIDANCE ON

GAAP TO NON-GAAP OPERATING EXPENSE EXCLUDING COGS

(in millions)

(unaudited)

Twelve Months Ended

December 31, 2021

Low High

GAAP operating expense excluding COGS
$

                        760.0

$

                        790.0

Stock-based compensation — R&D

                           (21.0

)

                           (21.0

)

Stock-based compensation — SG&A

                           (33.0

)

                           (33.0

)

Merger, integration and separation-related expense — R&D

                             (4.0

)

                             (4.0

)

Merger, integration and separation-related expense — SG&A

                           (23.0

)

                           (23.0

)

Amortization expense

                         (204.0

)

                         (204.0

)

Total of non-GAAP adjustments

                         (285.0

)

                         (285.0

)

Non-GAAP operating expense excluding COGS
$

                        475.0

$

                        505.0

XPERI HOLDING CORPORATION

RECONCILIATION FOR GUIDANCE ON

OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW

(in millions)

(unaudited)

Twelve Months Ended

December 31, 2021

Low High

Cash flow from operations
$

               180.0

$

               220.0

Adjustments to cash flow from operations:

Purchases of property & equipment

                  (25.0

)

                  (25.0

)

Integration and separation related costs (1)

                    30.0

                    30.0

Adjusted free cash flow
$

               185.0

$

               225.0

(1) Includes severance and retention costs

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006090/en/

Xperi Investor Contact:

Geri Weinfeld, Vice President of Investor Relations

+1 818-436-1231

[email protected]

Xperi Media Contacts:

Lerin O’Neill, Director of Communications

+1 408-562-8455

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Audio/Video Hardware TV and Radio Consumer Electronics Technology Semiconductor Mobile/Wireless Entertainment

MEDIA:

Posted on February 23, 2021 4:10 pm
Zealand Pharma to participate in upcoming investor conferences

Company announcement – No. 8 / 2021

Copenhagen, DK February 23, 2021 – Zealand Pharma A/S (Nasdaq: ZEAL) (CVR-no. 20045078), a biotechnology company focused on the discovery, development and commercialization of innovative peptide-based medicines, today announced that members of its senior management team are scheduled to participate virtually in the following investor conferences in March:

Credit Suisse 2021 London Global Healthcare Conference

Date: Tuesday, March 2, 2021

Jefferies Pan-European Mid-Cap Virtual Conference

Date: Tuesday, March 30, 2021

# # #

About Zealand Pharma A/S

Zealand Pharma A/S (Nasdaq: ZEAL) (“Zealand”) is a biotechnology company focused on the discovery, development and commercialization of innovative peptide-based medicines. More than 10 drug candidates invented by Zealand have advanced into clinical development, of which two have reached the market. Zealand’s robust pipeline of investigational medicines includes three candidates in late stage development, and one candidate being reviewed for regulatory approval in the United States. Zealand markets V-Go^®, an all-in-one basal-bolus insulin delivery option for people with diabetes. License collaborations with Boehringer Ingelheim and Alexion Pharmaceuticals create opportunity for more patients to potentially benefit from Zealand-invented peptide therapeutics.Zealand was founded in 1998 in Copenhagen, Denmark, and has presence throughout the U.S. that includes key locations in New York, Boston, and Marlborough (MA). For more information about Zealand’s business and activities, please visit www.zealandpharma.com.

For further information, please contact:

Zealand Pharma Investor Relations

Maeve Conneighton
Argot Partners
[email protected]

Zealand Pharma Media Relations

David Rosen
Argot Partners
[email protected]

Posted on February 23, 2021 4:09 pm
ARKO Announces Participation in the Raymond James Institutional Investors Conference

RICHMOND, Va., Feb. 23, 2021 (GLOBE NEWSWIRE) — ARKO Corp. (Nasdaq: ARKO) today announced that the Company is scheduled to present at the Raymond James Institutional Investors Conference on Tuesday, March 2, 2021, at 12:30 pm Eastern Time.

The presentation will be webcast live over the internet and can be accessed at https://www.arkocorp.com/. A replay will be available for 30 days.

About ARKO
ARKO owns 100% of GPM Investments, LLC (“GPM”). Based in Richmond, VA, GPM was founded in 2003 with 169 stores and has grown through acquisitions to become the 7th largest convenience store chain in the United States, with approximately 2,950 locations comprised of approximately 1,350 company-operated stores and approximately 1,600 dealer sites to which it supplies fuel, in 33 states and Washington D.C. GPM operates in three segments: retail, which consists of fuel and merchandise sales to retail consumers; wholesale, which supplies fuel to third-party dealers and consignment agents; and GPM Petroleum, which supplies fuel to GPM and its subsidiaries selling fuel (both in the retail and wholesale segments) as well as sub-wholesalers and bulk purchasers.

Investor Contact

Chris Mandeville
(203) 682-8200
[email protected]

Posted on February 23, 2021 4:09 pm
Masimo Reports Fourth Quarter and Full-Year 2020 Financial Results

Masimo Reports Fourth Quarter and Full-Year 2020 Financial Results

Fourth Quarter2020 Highlights:

Product revenue increased 19.2% to $295.1 million, or 18.1% on a constant currency basis;

GAAP net income per diluted share was $1.21; and

Non-GAAP net income per diluted share was $0.98.

Full-Year 2020 Highlights:

Product revenue increased 22.1% to $1,143.7 million, or 22.1% on a constant currency basis;

GAAP net income per diluted share was $4.14; and

Non-GAAP net income per diluted share was $3.60.

IRVINE, Calif.–(BUSINESS WIRE)–
Masimo (Nasdaq: MASI) today announced its financial results for the fourth quarter and full-year ended January 2, 2021.

Fourth Quarter 2020 Results:

Total revenue for the fourth quarter of 2020, including royalty and other revenue, increased 19.2% to $295.1 million, compared to $247.5 million in the fourth quarter of 2019. Product revenue increased 19.2% to $295.1 million, or 18.1% on a constant currency basis, compared to $247.4 million in the fourth quarter of 2019. Excluding handheld and fingertip pulse oximeters, shipments of noninvasive technology boards and instruments increased 35.2% to 83,000 in the fourth quarter of 2020, compared to 61,400 in the fourth quarter of 2019.

For the fourth quarter 2020, GAAP operating margin was 22.0%, compared to 24.9% in the fourth quarter of 2019. Fourth quarter 2020 non-GAAP operating margin was 23.1%, compared to 25.7% in the fourth quarter of 2019.

For the fourth quarter 2020, GAAP net income was $70.7 million, or $1.21 per diluted share, compared to GAAP net income of $52.9 million or $0.92 per diluted share, in the fourth quarter 2019. Fourth quarter 2020 non-GAAP net income was $57.3 million, or $0.98 per diluted share, compared to net income of $52.1 million or $0.91 per diluted share, in the fourth quarter 2019.

Full-Year 2020 Results:

Total revenue for the full-year of 2020, including royalty and other revenue, increased 22.0% to $1,143.7 million, compared to $937.8 million for the full-year 2019. Product revenue increased 22.1% on a reported and constant currency basis to $1,143.7 million, compared to $936.4 million for the full-year 2019. Excluding handheld and fingertip pulse oximeters, shipments of noninvasive technology boards and instruments increased 91.8% to 472,300 for the full-year 2020, compared to 246,200 for the full-year 2019.

For the full-year of 2020, GAAP operating margin was 22.4%, compared to 23.6% in the prior year period. Full-year 2020 non-GAAP operating margin was 23.1%, compared to 24.0% in the prior year period.

For the full-year of 2020, GAAP net income was $240.3 million, or $4.14 per diluted share compared to net income of $196.2 million, or $3.44 per diluted share in 2019. Non-GAAP net income was $209.2 million or $3.60 per diluted share compared to net income of $183.9 million, or $3.22 per diluted share in 2019.

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said “Throughout 2020, as our customers on the front lines responded to this crisis and rose to the challenge, so did our team. We have invested heavily in innovation and product supply efforts to deliver clinically relevant solutions that improve patient outcomes and reduce the cost of care. As we enter a new year, I am confident that Masimo will continue its leadership in delivering innovative solutions to clinicians and patients around the world.”

2021 Financial Guidance

The Company provided the following estimates for its full-year2021 guidance:

2021 Guidance⁽¹⁾

(in millions, except percentages and earnings per share)

GAAP

Non-GAAP

Total revenue

$

1,200.0

$

1,200.0

Product revenue

$

1,200.0

$

1,200.0

Percentage growth – as reported

4.9

%

N/A

Percentage growth – constant currency

N/A

3.6

%

Gross margin

66.8

%

67.0

%

Operating margin

23.5

%

24.5

%

Diluted earnings per share

$

3.81

$

3.80

Estimated tax rate

20.7

%

24.1

%

______________

(1)

Consistent with prior guidance provided on January 13, 2021.

Product revenue increasing to $1.200 billion, which reflects reported growth of 4.9% and constant currency growth of 3.6%;

GAAP diluted earnings per share increasing to $3.81;

Non-GAAP diluted earnings per share increasing to $3.80; and

Included in our full-year 2021 revenue guidance is approximately $15.0 million of year-over-year currency tailwinds.

Supplementary Non-GAAP Financial Information

For additional non-GAAP financial details, please visit the Investor Relations section of the Company’s website at www.masimo.com to access Supplementary Financial Information.

Non-GAAP Financial Measures

The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measures presented exclude the items described below. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results. Furthermore, management also believes that these items are not indicative of the Company’s on-going core operating performance. These non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP.

Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies.

The Company has presented the following non-GAAP measures to assist investors in understanding the Company’s core net operating results on an on-going basis: (i) constant currency product revenue growth %, (ii) non-GAAP net income, (iii) non-GAAP (net income) earnings per diluted share and (iv) non-GAAP operating income/margin. These non-GAAP financial measures may also assist investors in making comparisons of the Company’s core operating results with those of other companies. Management believes constant currency product revenue growth, non-GAAP operating income/margin, non-GAAP net income and non-GAAP earnings per diluted share are important measures in the evaluation of the Company’s performance and uses these measures to better understand and evaluate our business.

The non-GAAP financial measures reflect adjustments for the following items, as well as the related income tax effects thereof:

Constant currency adjustments.

Some of our sales agreements with foreign customers provide for payment in currencies other than the U.S. Dollar. These foreign currency revenues, when converted into U.S. Dollars, can vary significantly from period to period depending on the average and quarter-end exchange rates during a respective period. We believe that comparing these foreign currency denominated revenues by holding the exchange rates constant with the prior year period is useful to management and investors in evaluating our product revenue growth rates on a period-to-period basis. We anticipate that fluctuations in foreign exchange rates and the related constant currency adjustments for calculation of our product revenue growth rate will continue to occur in future periods.

Royalty and other revenue, net of related costs.

We derive royalty and other revenue, net of related costs, from certain non-recurring contractual arrangements that we do not expect to continue in the future. We believe the exclusion of royalty and other revenue, net of related costs, associated with these non-recurring revenue streams is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.

Acquisition/Strategic investment-related costs, including depreciation and amortization.

In the event the Company acquires, invests in or divests certain business operations, there may be non-recurring gains, losses or expenses that will be recognized related to the assets and/or liabilities sold or acquired that are not representative of normal on-going cash flows. Furthermore, there may be depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition/strategic investment that does not reflect the normal on-going costs of operating our core business. We believe that exclusion of these gains, losses or costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods.

Litigation damages, awards and settlements.

In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds. Litigation matters can vary in their characteristics, frequency and significance to our operating results. We believe that exclusion of these gains (net of any related costs incurred in the period the award or settlement is recognized) and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or are infrequent in nature.

Realized and unrealized gains or losses from foreign currency transactions.

We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs and other operating expenses. As the Company does not actively hedge these currency exposures, changes in the underlying currency rates relative to the U.S. Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods.

Excess tax benefits from stock-based compensation.

Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees.

Fourth Quarter and Full-Year 2020 Actuals versus Fourth Quarter and Full-Year 2019 Actuals:

RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY PRODUCT REVENUE⁽¹⁾:

Quarter Ended

(in thousands, except percentages)

January 2,

2021

December 28,

2019

GAAP product revenue

$

295,054

$

247,434

Non-GAAP constant currency adjustments:

Constant currency F/X adjustments

(2,917

)

—

Total non-GAAP constant currency adjustments

(2,917

)

—

Non-GAAP constant currency product revenue

$

292,137

$

247,434

Product revenue growth %

GAAP

19.2

%

Non-GAAP constant currency

18.1

%

__________________

(1)

May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY PRODUCT REVENUE⁽¹⁾:

Year Ended

(in thousands, except percentages)

January 2,

2021

December 28,

2019

GAAP product revenue

$

1,143,744

$

936,408

Non-GAAP constant currency adjustments:

Constant currency F/X adjustments

(491

)

—

Total non-GAAP constant currency adjustments

(491

)

—

Non-GAAP constant currency product revenue

$

1,143,253

$

936,408

Product revenue growth %

GAAP

22.1

%

Non-GAAP constant currency

22.1

%

__________________

(1)

May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE⁽¹⁾:

Quarter Ended

January 2,

2021

December 28,

2019

(in thousands, except per share amounts)

$

Per Diluted Share

$

Per Diluted Share

GAAP net income

$

70,669

$

1.21

$

52,921

$

0.92

Non-GAAP adjustments:

Royalty and other revenue, net of related costs

—

—

(45

)

—

Acquisition/strategic investment related costs

3,249

0.06

2,135

0.04

Non-operating other (income) expense

(1,384

)

(0.02

)

312

0.01

Tax impact of pre-tax non-GAAP adjustments above

(5,214

)

(0.09

)

(566

)

(0.01

)

Excess tax benefits from stock-based compensation

(10,001

)

(0.17

)

(2,631

)

(0.05

)

Total non-GAAP adjustments

(13,350

)

(0.23

)

(796

)

(0.01

)

Non-GAAP net income

$

57,318

$

0.98

$

52,126

$

0.91

Weighted average shares outstanding – diluted

58,237

57,267

__________________

(1)

May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE⁽¹⁾:

Year Ended

January 2,

2021

December 28,

2019

(in thousands, except per share amounts)

$

Per Diluted Share

$

Per Diluted Share

GAAP net income

$

240,302

$

4.14

$

196,216

$

3.44

Non-GAAP adjustments:

Royalty and other revenue, net of related costs

—

—

(1,262

)

(0.02

)

Acquisition/strategic investment related costs

8,286

0.14

4,729

0.08

Litigation damages, awards and settlements

(474

)

(0.01

)

—

—

Non-operating other (income) expense

(2,631

)

(0.05

)

627

0.01

Tax impact of pre-tax non-GAAP adjustments above

(6,096

)

(0.11

)

(689

)

(0.01

)

Excess tax benefits from stock-based compensation

(30,172

)

(0.52

)

(15,692

)

(0.27

)

Total non-GAAP adjustments

(31,086

)

(0.54

)

(12,286

)

(0.22

)

Non-GAAP net income

$

209,216

$

3.60

$

183,930

$

3.22

Weighted average shares outstanding – diluted

58,037

57,100

__________________

(1)

May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN⁽¹⁾:

Quarter Ended

January 2,

2021

December 28,

2019

(in thousands, except percentages)

$

$

GAAP operating income/margin

$

64,895

$

61,557

Non-GAAP adjustments:

Royalty and other revenue, net of related costs

—

(45

)

Acquisition/strategic investment related costs

3,249

2,135

Total non-GAAP adjustments

3,249

2,090

Non-GAAP operating income/margin

$

68,145

$

63,647

GAAP operating income/margin %
22.0

%

24.9

%

Non-GAAP operating income/margin %
23.1

%

25.7

%

__________________

(1)

May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN⁽¹⁾:

Year Ended

January 2,

2021

December 28,

2019

(in thousands, except percentages)

$

$

GAAP operating income/margin

$

255,823

$

221,216

Non-GAAP adjustments:

Royalty and other revenue, net of related costs

—

(1,262

)

Acquisition/strategic investment related costs

8,286

4,729

Litigation damages, awards and settlements

(474

)

—

Total non-GAAP adjustments

7,812

3,467

Non-GAAP operating income/margin

$

263,636

$

224,683

GAAP operating income/margin %
22.4

%

23.6

%

Non-GAAP operating income/margin %
23.1

%

24.0

%

__________________

(1)

May not foot due to rounding.

Full-Year 2021 Guidance versus Full-Year 2020 Actuals:

RECONCILIATION OF GAAP PRODUCT REVENUE GROWTH % TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH %⁽¹⁾:

(in thousands, except percentages)

Full-Year 2021

Guidance⁽²⁾

Full-Year 2020

Actuals

GAAP product revenue

$

1,200,000

$

1,143,744

Non-GAAP constant currency adjustments:

Constant currency F/X adjustments

(15,000

)

—

Total non-GAAP constant currency adjustments

(15,000

)

—

Non-GAAP constant currency product revenue

$

1,185,000

$

1,143,744

Product revenue growth %:

GAAP

4.9

%

Non-GAAP constant currency

3.6

%

__________________

(1)

May not foot due to rounding.

(2)

Consistent with prior guidance provided on January 13, 2021.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE⁽¹⁾:

Full-Year 2021

Guidance⁽²⁾

Full-Year 2020

Actuals

(in thousands, except per share amounts)

$

Per Diluted Share

$

Per Diluted Share

GAAP net income

$

223,600

$

3.81

$

240,302

$

4.14

Non-GAAP adjustments:

Acquisition/strategic investment related costs

12,000

0.20

8,286

0.14

Litigation damages, awards and settlements

—

—

(474

)

(0.01

)

Non-operating other (income) expense

—

—

(2,631

)

(0.05

)

Tax impact of pre-tax non-GAAP adjustments above

(2,500

)

(0.04

)

(6,096

)

(0.11

)

Excess tax benefits from stock-based compensation

(10,000

)

(0.17

)

(30,172

)

(0.52

)

Total non-GAAP adjustments

(500

)

(0.01

)

(31,086

)

(0.54

)

Non-GAAP product net income

$

223,100

$

3.80

$

209,216

$

3.60

Weighted average shares outstanding – diluted

58,700

58,037

__________________

(1)

May not foot due to rounding.

(2)

Consistent with prior guidance provided on January 13, 2021.

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND OPERATING MARGIN⁽¹⁾:

Full-Year 2021

Guidance⁽²⁾

Full-Year 2020

Actuals

(in thousands, except percentages)

$

$

GAAP gross margin

$

801,300

$

743,065

Non-GAAP adjustments:

Acquisition/strategic investment-related costs

2,500

1,807

Total non-GAAP adjustments

2,500

1,807

Non-GAAP gross margin

$

803,800

$

744,872

GAAP gross margin %

66.8

%

65.0

%

Non-GAAP gross margin %

67.0

%

65.1

%

GAAP operating income/margin
$
281,900
$
255,823

Non-GAAP adjustments:

Acquisition/strategic investment-related costs

12,000

8,286

Litigation damages, awards and settlements

—

(474

)

Total non-GAAP adjustments

12,000

7,812

Non-GAAP operating income/margin
$
293,900
$
263,636

GAAP operating income/margin %

23.5

%

22.4

%

Non-GAAP operating income/margin %

24.5
%
23.1

%

__________________

(1)

May not foot due to rounding.

(2)

Consistent with prior guidance provided on January 13, 2021.

Conference Call:

The conference call to review Masimo’s complete financial results for the fourth quarter and full-year ended January 2, 2021 will begin at 1:30 p.m. PT (4:30 p.m. ET) on February 23, 2021 and will be hosted by Joe Kiani, Chairman and Chief Executive Officer, and Micah Young, Executive Vice President and Chief Financial Officer. A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at www.masimo.com.

To register for the conference call and receive the dial-in number, please use the link below. Upon registering, each participant will be provided with call details and a registrant ID number.

Conference Call Registration Link:

http://www.directeventreg.com/registration/event/3927609

A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the Company’s website.

About Masimo

Masimo (Nasdaq: MASI) is a global medical technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, patient monitors, and automation and connectivity solutions. Our mission is to improve patient outcomes and reduce the cost of care. Masimo SET^®Measure-through Motion and Low Perfusion^™pulse oximetry, introduced in 1995, has been shown in over 100 independent and objective studies to outperform other pulse oximetry technologies. Masimo SET^®has also been shown to help clinicians reduce severe retinopathy of prematurity in neonates, improve CCHD screening in newborns, and, when used for continuous monitoring with Masimo Patient SafetyNet^™in post-surgical wards, reduce rapid response team activations, ICU transfers, and costs. Masimo SET^®is estimated to be used on more than 200 million patients in leading hospitals and other healthcare settings around the world, and is the primary pulse oximetry at 9 of the top 10 hospitals listed in the 2019-20 U.S. News and World Report Best Hospitals Honor Roll. Masimo continues to refine SET^®and in 2018, announced that SpO₂ accuracy on RD SET^®sensors during conditions of motion has been significantly improved, providing clinicians with even greater confidence that the SpO₂ values they rely on accurately reflect a patient’s physiological status. In 2005, Masimo introduced rainbow^®Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively, including total hemoglobin (SpHb^®), oxygen content (SpOC^™), carboxyhemoglobin (SpCO^®), methemoglobin (SpMet^®), Pleth Variability Index (PVi^®), RPVi^™(rainbow^®PVi), and Oxygen Reserve Index (ORi^™). In 2013, Masimo introduced the Root^®Patient Monitoring and Connectivity Platform, built from the ground up to be as flexible and expandable as possible to facilitate the addition of other Masimo and third-party monitoring technologies; key Masimo additions include Next Generation SedLine^®Brain Function Monitoring, O3^®Regional Oximetry, and ISA^™Capnography with NomoLine^®sampling lines. Masimo’s family of continuous and spot-check monitoring Pulse CO-Oximeters^®includes devices designed for use in a variety of clinical and non-clinical scenarios, including tetherless, wearable technology, such as Radius-7^®and Radius PPG^™, portable devices like Rad-67^™, fingertip pulse oximeters like MightySat^®Rx, and devices available for use both in the hospital and at home, such as Rad-97^™. Masimo hospital automation and connectivity solutions are centered around the Iris^®platform, and include Iris Gateway^™, Patient SafetyNet, Replica^™, Halo ION^™, UniView^™, and Masimo SafetyNet^™. Additional information about Masimo and its products may be found at www.masimo.com. Published clinical studies on Masimo products can be found at www.masimo.com/evidence/featured-studies/feature/.

Forward-Looking Statements

All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our expectations for full year 2021 financial guidance; including with respect to product revenue, product revenue growth and constant currency revenue growth, GAAP diluted earnings per share, Non-GAAP diluted earnings per share and year-over-year currency tailwinds; our long-term outlook; our ability to continue in its leadership in delivering innovative solutions to clinicians and patients worldwide; demand for our products; anticipated revenue and earnings growth; our financial condition, results of operations and business generally; expectations regarding our ability to design and deliver innovative new noninvasive technologies and reduce the cost of care; and demand for our technologies; . These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and 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, those related to: risks related to ; our dependence on Masimo SET^® and Masimo rainbow SET^™ products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors’ assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; risks related to global economic and marketplace uncertainties related to the impact of the COVID-19 pandemic; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Masimo, SET, Signal Extraction Technology, Improving Patient Outcome and Reducing Cost of Care… by Taking Noninvasive Monitoring to New Sites and Applications, rainbow, SpHb, SpOC, SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of Masimo Corporation.

MASIMO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

January 2,

2021

December 28,

2019

ASSETS

Current assets

Cash and cash equivalents

$

641,447

$

567,687

Short-term investments

—

120,000

Accounts receivable, net of allowance for doubtful accounts

141,350

132,433

Inventories

215,952

115,871

Other current assets

102,416

60,071

Total current assets

1,101,165

996,062

Lease receivable, noncurrent

57,666

49,936

Deferred costs and other contract assets

20,076

16,214

Property and equipment, net

272,511

219,552

Intangible assets, net

73,923

27,251

Goodwill

103,206

22,350

Deferred tax assets

39,363

35,972

Other non-current assets

44,642

28,791

Total assets

$

1,712,552

$

1,396,128

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$

64,061

$

54,548

Accrued compensation

71,601

54,705

Deferred revenue and other contract-related liabilities, current

44,935

25,939

Other current liabilities

53,239

37,027

Total current liabilities

233,836

172,219

Other non-current liabilities

71,076

56,035

Total liabilities

304,912

228,254

Commitments and contingencies

Masimo Corporation Stockholders’ equity

Common stock

55

54

Treasury stock

(638,736

)

(526,580

)

Additional paid-in capital

703,693

600,624

Accumulated other comprehensive income (loss)

1,413

(6,718

)

Retained earnings

1,341,235

1,100,494

Total Masimo Corporation stockholders’ equity

1,407,640

1,167,874

Noncontrolling interest

$

(20

)

$

—

Total equity

$

1,407,640

$

1,167,874

Total liabilities and equity

$

1,712,552

$

1,396,128

MASIMO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)

Three Months Ended

Twelve Months Ended

January 2,

2021

December 28,

2019

January 2,

2021

December 28,

2019

Revenue:

Product

$

295,054

$

247,434

$

1,143,744

$

936,408

Royalty and other revenue

—

76

—

1,429

Total revenue

295,054

247,510

1,143,744

937,837

Cost of goods sold

108,128

80,587

400,679

308,665

Gross profit

186,926

166,923

743,065

629,172

Operating expenses:

Selling, general and administrative

90,343

81,943

369,057

314,661

Research and development

31,688

23,423

118,659

93,295

Litigation awards, settlements/or defense costs

—

—

(474

)

—

Total operating expenses

122,031

105,366

487,242

407,956

Operating income

64,895

61,557

255,823

221,216

Non-operating income

1,805

2,812

7,913

12,950

Income before provision for income taxes

66,700

64,369

263,736

234,166

Provision for income taxes

(3,949

)

11,448

23,454

37,950

Net income including noncontrolling interest

70,649

52,921

240,282

196,216

Net loss attributable to noncontrolling interest

20

—

20

—

Net income attributable to Masimo Corporation stockholders

$

70,669

$

52,921

$

240,302

$

196,216

Other comprehensive income, net of tax:

Foreign currency translation gains (losses)

6,627

1,076

8,131

(519

)

Comprehensive income attributable to Masimo Corporation stockholders

$

77,296

$

53,997

$

248,433

$

195,697

Net income per share attributable to Masimo Corporation stockholders:

Basic

$

1.28

$

0.99

$

4.39

$

3.67

Diluted

$

1.21

$

0.92

$

4.14

$

3.44

Weighted-average shares used in per share calculations:

Basic

55,138

53,633

54,700

53,434

Diluted

58,237

57,267

58,037

57,100

The following table presents details of the stock-based compensation expense that is included in each functional line item in the condensed consolidated statements of operations (in thousands):

Three Months Ended

Twelve Months Ended

January 2,

2021

December 28,

2019

January 2,

2021

December 28,

2019

Cost of goods sold

$

216

$

106

$

714

$

445

Selling, general and administrative

4,019

7,417

31,462

30,450

Research and development

1,618

2,067

10,049

8,340

Total

$

5,853

$

9,590

$

42,225

$

39,235

MASIMO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Twelve Months Ended

January 2,

2021

December 28,

2019

Cash flows from operating activities:

Net income including noncontrolling interest

$

240,282

$

196,216

Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:

Depreciation and amortization

29,300

23,487

Stock-based compensation

42,225

39,233

Loss on disposal of equipment, intangibles and other assets

554

357

Benefit (provision) for doubtful accounts

82

687

(Benefit) from deferred income taxes

(4,964

)

(5,965

)

Changes in operating assets and liabilities:

(Increase) in trade accounts receivable

(2,229

)

(23,580

)

(Increase) in inventories

(94,434

)

(21,257

)

(Increase) in other current assets

(29,984

)

(8,536

)

(Increase) in lease receivable, net

(7,749

)

(11,958

)

(Increase) decrease in deferred costs and other contract assets

(2,806

)

3,308

(Increase) in other non-current assets

(1,320

)

(226

)

Increase in accounts payable

7,637

9,934

Increase in accrued compensation

15,544

5,338

Increase in deferred revenue and other contract-related liabilities

10,871

7,739

(Decrease) increase in income taxes payable

(1,301

)

4,079

Increase in accrued liabilities

9,391

746

(Decrease) increase in other non-current liabilities

(136

)

2,038

Net cash provided by operating activities

210,963

221,640

Cash flows from investing activities:

Maturities of short-term investments

120,000

160,000

Purchases of short-term investments

—

(280,000

)

Purchases of property and equipment, net

(72,549

)

(68,375

)

Increase in intangible assets

(7,408

)

(4,117

)

Business combinations, net of cash acquired

(112,706

)

—

Deposit to acquire noncontrolling interest

(3,374

)

—

Other strategic investing activities

(6,750

)

(5,189

)

Net cash (used in) investing activities

(82,787

)

(197,681

)

Cash flows from financing activities:

Proceeds from issuance of common stock

58,424

28,339

Repurchases of common stock

(110,540

)

(37,555

)

Payroll tax withholdings on behalf of employees for stock options

(2,191

)

(123

)

Net cash (used in) provided by financing activities

(54,307

)

(9,339

)

Effect of foreign currency exchange rates on cash

3,060

814

Net increase in cash, cash equivalents and restricted cash

76,929

15,434

Cash, cash equivalents and restricted cash at beginning of period

568,075

552,641

Cash, cash equivalents and restricted cash at end of period

$

645,004

$

568,075

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006082/en/

Investor Contact: Eli Kammerman

(949) 297-7077

[email protected]

Media Contact: Evan Lamb

(949) 396-3376

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Medical Devices Health Other Health Pharmaceutical Cardiology Biotechnology

MEDIA:

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Posted on February 23, 2021 4:09 pm
Ontrak to Report 2020 Fourth Quarter Financial Results on March 9, 2021

Ontrak to Report 2020 Fourth Quarter Financial Results on March 9, 2021

SANTA MONICA, Calif.–(BUSINESS WIRE)–
Ontrak, Inc. (NASDAQ: OTRK) (“Ontrak” or the “Company”), a leading AI-powered and telehealth-enabled, virtualized healthcare company, today announced it will report financial results for the fourth quarter 2020 on Tuesday, March 9, 2021 after market close. Company management will host a corresponding conference call at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time.

Conference Call & Webcast Details

The conference call can be accessed by dialing +1 (833) 519-1269 for U.S. participants or (914) 800-3841 for international participants and referencing conference ID #4174875. A live and archived webcast of the event will be available at https://www.ontrak-inc.com/presentations.html.

About Ontrak, Inc.

Ontrak, Inc. (f/k/a Catasys, Inc.) is a leading AI and telehealth-enabled, virtualized healthcare company, whose mission is to help improve the health and save the lives of as many people as possible. The company’s PRE™ (Predict-Recommend-Engage) platform predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages people who are not getting the care they need. By combining predictive analytics with human engagement, Ontrak delivers improved member health and validated outcomes and savings to healthcare payers.

The company’s integrated, technology-enabled Ontrak™ programs, a critical component of the PRE platform, are designed to provide healthcare solutions to members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, COPD, and congestive heart failure, which result in high medical costs.

Ontrak has a unique ability to engage these members, who do not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance.

Ontrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaching and in-market Community Care Coordinators who address the social and environmental determinants of health, including loneliness. The company’s programs improve member health and deliver validated cost savings to healthcare payers of more than 50 percent for enrolled members. Ontrak solutions are available to members of leading national and regional health plans in 30 states and in Washington, D.C.

Learn more at www.ontrak-inc.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006079/en/

Investors:

Caroline Paul

Gilmartin Group

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Practice Management Technology Professional Services Managed Care Health General Health Mental Health Telecommunications Software Hospitals Insurance

MEDIA:

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Posted on February 23, 2021 4:09 pm
Myriad Genetics Delivers 6% Sequential Revenue Growth; Company Continues to Execute Strategic Transformation Plan

Highlights:

Revenue of $154.6 million up 6% sequentially in quarter ended Dec. 31, 2020

GAAP Earnings per share (EPS) of ($0.59) and adjusted EPS of ($0.12)

Despite COVID-19 headwinds, total test volumes increase 7% sequentially with stable pricing

Signed in-network agreement with the majority of Anthem Blue Cross Blue Shield health plans, the second largest commercial payer in the United States, returning all Myriad products to in-network status

Paul J. Diaz, President and Chief Executive Officer:

“In the midst of the COVID-19 pandemic, we continued to support our patients and healthcare providers with critical genetic insights needed to drive better health outcomes. This quarter we continued to see sequential improvement in test volumes and revenue trends, while executing on our strategic transformation plan to simplify our business, improve customer experience, build new tech-enabled commercial capabilities, and focus on our biggest growth opportunities. We are well underway in resetting our base of operations, with three planned business unit divestitures in progress, which will help us concentrate on our core products and reduce complexity and cost.”

“We are now focused on three core business areas where there are strong long-term market opportunities and growing demand for genetic insights: women’s health, oncology, and mental health.”

“Our progress to date is a direct reflection of the passion and energy of our 2,700 Myriad Genetics teammates. I want to thank them for putting our patients and customers first and for all they are doing to implement our transformation plan while executing on our day-to-day priorities. I look forward to sharing an update on our performance, and our transformation and growth plans, at our Investor day on May 4.”

SALT LAKE CITY, Feb. 23, 2021 (GLOBE NEWSWIRE) — Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, today announced financial results for its quarter ended Dec. 31, 2020 and provided an update on recent business performance.

Financial Highlights:
Myriad Genetics delivered total revenue in the quarter of $154.6 million which declined 21% year-over-year but increased 6% sequentially from the fiscal quarter ending Sep. 30, 2020, with improved commercial execution and a more stable pricing environment.

Total test volumes of 224,000 declined 5% year-over-year but increased 7% sequentially. Average revenue per test declined 1% sequentially, demonstrating an increasingly stable pricing environment for the company’s products and was driven by mix shift increases from non-hereditary cancer product and the reduction of zero pay tests.

During the quarter, revenue was impacted by $5.3 million due to changes associated with an increase in our payer reserve, predominantly associated with hereditary cancer revenue. The Company also had immaterial net positive adjustments to revenues related to prior periods.

GAAP gross margin was 69.5% and non-GAAP gross margin was 70.1%. Adjusted gross margin improved 30 basis points sequentially, impacted positively by test volume growth and negatively by increased revenue mix from prenatal testing.

GAAP total operating expenses were $155.7 million. Total adjusted operating expenses declined $7.9 million year-over-year to $119.6 million in the December 2020 quarter.

GAAP operating loss in the quarter was ($48.2) million; non-GAAP operating loss of ($11.3) million.

GAAP earnings per share (EPS) were ($0.59) and adjusted EPS were ($0.12) which improved by $0.03 sequentially.

Free cash flow in the quarter was ($20.4) million, and cash utilization improved by 66% sequentially. The company ended the quarter with $171.7 million in cash and equivalents and investments. In February, Myriad received a tax refund from the U.S. government providing an additional $89 million in cash.

The company negotiated an amendment to its credit facility providing increased financial flexibility. Under the new amendment certain financial covenants are waived until the June 2022 quarter and there is added flexibility around future deployment of capital. The company ended the December quarter with $224.8 million drawn on the $300 million facility. Near-term plans include using proceeds from business unit divestitures to pay down the existing credit facility balance.

Business Performance and Highlights

Women’s Health

The Myriad Women’s Health business — which serves women who are assessing their risk of cancer, and women who are pregnant or planning a family — recorded revenue of $56.3 million in the quarter, a decline of 33% year-over-year. Elective testing for hereditary cancer has been negatively impacted by the COVID-19 pandemic due to delayed elective office visits. The COVID-19 surge in the December quarter led many women to postpone elective testing. The company’s prenatal business continued to demonstrate improving fundamentals with test volumes increasing 15% year-over-year and 7% sequentially.

Myriad myRisk^® Hereditary Cancer

myRisk^® Hereditary Cancer test volumes for the Women’s Health business declined 30% year-over-year but increased 6% relative to the September 2020 quarter.

Myriad Foresight^® Carrier Screen

Technological enhancements to Myriad’s Foresight^® carrier screen test in the December quarter increased the detection rate for alpha thalassemia inherited blood conditions from 90% to >99% in high-risk ethnicities such as Hispanic patients where the risk of alpha thalassemia can be 200 times greater than the risk of cystic fibrosis. These changes reduced the risk of a false negative by 10 times and improved the accuracy of the Foresight test for ethnic minority populations.

Myriad Prequel^® Prenatal Screen

The scientific journal Genetics in Medicine published a study demonstrating that Myriad’s proprietary AMPLIFY^® technology increases the accuracy of the Prequel prenatal screen for five common microdeletions by an average of 9 times. For these microdeletions the Prequel test demonstrated 97.2% sensitivity and 99.8% specificity.

Oncology

The Myriad Oncology business provides hereditary cancer testing for patients who have cancer, and products such as the EndoPredict^® breast cancer prognostic test, the Prolaris prostate cancer test, and it’s myChoice CDx and BRACAnalysis CDx products for predicting response to PARP inhibitors. The Oncology business delivered total revenue of $60.4 million, down 6% relative to revenue in the December quarter of last year.

Myriad myRisk^® Hereditary Cancer

myRisk^® Hereditary Cancer test volumes for the Oncology business declined 16% year-over-year but increased 5% relative to the September 2020 quarter.

Myriad Prolaris^® Prostate Cancer

Received a new local coverage determination (LCD) for the Prolaris^® prostate cancer test from Palmetto GBA and CGS Administrators, LLC, two of the administrative contractors for the Centers for Medicare & Medicaid Services, which took effect December 6^th. The new LCD expands benefit entitlements for patients with unfavorable intermediate and high-risk prostate cancer and was partially responsible for the 31% sequential growth in Prolaris revenue.

Received acceptance for a new study publication in The Prostate demonstrating high accuracy for Prolaris in predicting metastases and disease specific mortality in men following radical prostatectomy.

A new study in Genitourinary Cancer demonstrated that the Prolaris test can accurately predict which patients will benefit from multi-modality therapy. Using the newly established threshold, 27% of men with newly diagnosed high-risk disease and 73% with unfavorable intermediate-risk disease could avoid multimodality therapy.

Myriad BRACAnalysis^® CDx

Saw significant increases in BRACAnalysis CDx test volume in Japan with total revenue from the country increasing 167% year-over-year to $8.8 million.

Myriad myChoice^® CDx

Announced a strategic collaboration with Illumina, Inc. for Illumina to create a kit-based version of the myChoice^® companion diagnostic (CDx) test for select international markets.

Received new reimbursement for the myChoice^® diagnostic system in Japan effective January 1, 2021.

Myriad EndoPredict^®

Received new public reimbursement for EndoPredict in Germany which will take effect between March and June 2021. Currently almost half of European EndoPredict volumes come from Germany.

Mental Health

Myriad’s Mental Health business — which consists of the GeneSight Psychotropic test that helps physicians understand how genetic alterations impact response to antidepressant and other psychotropic medications — saw revenue of $18.0 million in the quarter compared to $22.5 million in the same period last year. Total revenue for GeneSight was up 51% sequentially and test volumes increased 13% sequentially.

Myriad GeneSight

Saw a strong increase in new ordering providers with over 2,100 physicians ordering GeneSight for the first time in the quarter. Strong growth in new ordering physicians was a contributor to the 13% sequential growth in test volume despite COVID-19 related headwinds.

Had two important publications on GeneSight. The first was a new publication in Psychiatry Research demonstrated that the GeneSight combinatorial test was superior to single gene testing using the Clinical Pharmacogenetics Implementation Consortium (CPIC) guidelines. In a sub-analysis utilizing the GUIDED study data, only the GeneSight combinatorial approach was able to accurately predict variations in outcomes for patients with depression and statistically significantly predicted remission, response, and symptom improvement. The second was a meta-analysis of 1,556 patients based upon four prospective controlled clinical trials and published in Pharmacogenomics. The meta-analysis demonstrated statistically significant improvements in remission, response and symptom improvement. Myriad is actively in discussions with commercial payers based upon these positive data-sets.

Autoimmune

Myriad’s Autoimmune business — which consists of the Vectra test for measuring disease activity in rheumatoid arthritis — generated revenue of $8.9 million in the quarter compared to $10.3 million in the same period last year.

Vectra^®

Shared new data at the American College of Rheumatology annual meeting further demonstrating that Vectra^® testing and three additional biomarkers, combined with traditional risk factors, can predict the risk of cardiovascular events in patients with rheumatoid arthritis. The study, which evaluated over 44,000 patients, found that a one-point increase in the Vectra score was associated with being approximately four times greater risk of having a cardiovascular event.

Announced the decision to pursue strategic alternatives for the Myriad Autoimmune business units as part of the company’s transformation and growth plan.

Other

Other revenue – comprised of Myriad RBM contract research services for the pharmaceutical industry and the myPath Melanoma diagnostic test in dermatology — was $11.0 million in the December quarter versus $14.3 million in the same period in the prior year. The decline in revenue is entirely attributable to the previously announced sale of Myriad’s German clinic which occurred at the beginning of calendar year 2020.

Announced the decision to pursue strategic alternatives for the Myriad RBM and Dermatology business units as part of the company’s transformation and growth plan.

In-Network Provider with Anthem Blue Cross Blue Shield

Further expanding coverage for its genetic tests in the United States, Myriad recently signed a contract with the majority of the affiliated commercial health plans of Anthem Blue Cross Blue Shield, the second largest commercial payer in the country. The contract returns all Myriad products to in-network status, including hereditary cancer testing. While the new agreement is not expected to materially impact revenue in fiscal year 2021, it will aid in providing easier access to testing for patients and providers, and reducing non-payment on tests across all the company’s product lines.

Investor Day

Myriad plans to host an investor day to provide an update on its strategic transformation and growth plan on May 4^th. The investor day will be a virtual event hosted on the company’s website.

Financial Guidance

Given the continued unpredictability surrounding the COVID-19 pandemic and the impact it has had on the healthcare environment, customer behavior and the ability to market tests to physicians, the company will not provide financial guidance for the quarter ending March 31, 2021 or fiscal year 2021.

Conference Call and Webcast

A conference call will be held today, Tuesday, Feb. 23, 2021, at 5 p.m. EST to discuss Myriad’s financial results for the December quarter and business developments. The dial-in number for domestic callers is 1-800-584-2088. International callers may dial 1-212-231-2924. All callers will be asked to reference reservation number 21990097. An archived replay of the call will be available for seven days by dialing 1-800-633-8284 and entering the reservation number above. The conference call along with a slide presentation will be available through a live webcast at www.myriad.com.

About Myriad Genetics

Myriad Genetics Inc., is a leading genetic testing and precision medicine company dedicated to improving and transforming patient lives worldwide. Myriad discovers and commercializes molecular diagnostic tests that: determine the risk of developing disease, accurately diagnose disease, assess the risk of disease progression, and guide treatment decisions across medical specialties where molecular diagnostics can significantly improve patient care and lower healthcare costs. For more information, please visit the company’s website: www.myriad.com.

Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, myPath, myRisk, Myriad myRisk, myRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice CDx, Vectra, Prequel, Foresight, GeneSight, riskScore and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its wholly owned subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G.

Revenue by Product (Unaudited):

Three months ended December 31,

2020 2019

(In millions) WH ONC MH AI Other Total WH ONC MH AI Other Total % Change

Molecular diagnostic revenues:

Hereditary Cancer Testing $ 35.2 $ 43.5 $ — $ — $ — $ 78.7 $ 67.1 $ 50.6 $ — $ — $ — $ 117.7 -33.1 %

Prenatal 21.1 — — — — 21.1 16.4 — — — — 16.4 28.7 %

GeneSight — — 18.0 — — 18.0 — — 22.5 — — 22.5 -20.0 %

Vectra — — — 8.9 — 8.9 — — — 10.3 — 10.3 -13.6 %

myChoice CDx — 5.4 — — — 5.4 — 4.6 — — — 4.6 17.4 %

Prolaris — 8.4 — — — 8.4 — 6.8 — — — 6.8 23.5 %

EndoPredict — 3.1 — — — 3.1 — 2.5 — — — 2.5 24.0 %

Other — — — — 0.3 0.3 — — — — 0.3 0.3 0.0 %

Total molecular diagnostic revenue 56.3 60.4 18.0 8.9 0.3 143.9 83.5 64.5 22.5 10.3 0.3 181.1 -20.5 %

Pharmaceutical and clinical service revenue — — — — 10.7 10.7 — — — — 14.0 14.0 -23.6 %

Total revenue $ 56.3 $ 60.4 $ 18.0 $ 8.9 $ 11.0 $ 154.6 $ 83.5 $ 64.5 $ 22.5 $ 10.3 $ 14.3 $ 195.1 -20.8 %

WH = Women’s Health
ONC = Oncology
MH = Mental Health
AI = Autoimmune

MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

Three months ended Six months ended

December 31, December 31,

2020 2019 2020 2019

(unaudited) (unaudited)

Molecular diagnostic testing $ 143.9 $ 181.1 $ 279.6 $ 353.1

Pharmaceutical and clinical services 10.7 14.0 20.2 28.3

Total revenue 154.6 195.1 299.8 381.4

Costs and expenses:

Cost of molecular diagnostic testing 42.6 41.0 82.5 82.2

Cost of pharmaceutical and clinical services 4.5 8.6 8.8 17.1

Research and development expense 18.2 18.8 35.8 40.1

Change in the fair value of contingent consideration 4.6 (0.1 ) 3.5 0.6

Selling, general, and administrative expense 132.9 134.3 257.0 269.8

Goodwill and intangible asset impairment charges — 1.3 — 1.3

Total costs and expenses 202.8 203.9 387.6 411.1

Operating loss (48.2 ) (8.8 ) (87.8 ) (29.7 )

Other income (expense):

Interest income 0.3 0.8 0.7 1.7

Interest expense (2.9 ) (2.5 ) (5.8 ) (5.4 )

Other (4.9 ) (0.9 ) (6.5 ) (0.3 )

Total other expense, net (7.5 ) (2.6 ) (11.6 ) (4.0 )

Loss before income tax (55.7 ) (11.4 ) (99.4 ) (33.7 )

Income tax benefit (11.5 ) (3.1 ) (40.0 ) (4.8 )

Net loss $ (44.2 ) $ (8.3 ) $ (59.4 ) $ (28.9 )

Net loss attributable to non-controlling interest — — — —

Net loss attributable to Myriad Genetics, Inc. stockholders $ (44.2 ) $ (8.3 ) $ (59.4 ) $ (28.9 )

Net loss per share:

Basic and diluted $ (0.59 ) $ (0.11 ) $ (0.79 ) $ (0.39 )

Weighted average shares outstanding:

Basic and diluted 75.3 74.4 75.0 74.1

MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)

December 31, June 30,

ASSETS 2020 2020 2019

Current assets: (unaudited)

Cash and cash equivalents $ 117.0 $ 163.7 $ 93.2

Marketable investment securities 33.7 54.1 43.7

Prepaid expenses 11.7 13.8 16.6

Inventory 27.1 29.1 31.4

Trade accounts receivable 89.5 68.1 133.9

Prepaid taxes 108.4 — 25.1

Other receivables 2.0 2.9 4.7

Total current assets 389.4 331.7 348.6

Property, plant and equipment, net 40.7 37.0 57.3

Operating lease right-of-use assets 59.7 66.0 —

Long-term marketable investment securities 21.0 37.0 54.9

Intangibles, net 576.5 605.3 684.7

Goodwill 329.2 327.6 417.2

Other assets 2.3 — —

Total assets $ 1,418.8 $ 1,404.6 $ 1,562.7

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 20.5 $ 21.7 $ 33.3

Accrued liabilities 79.1 79.0 82.3

Current maturities of operating lease liabilities 13.6 13.5 —

Deferred revenue 32.7 32.8 2.2

Total current liabilities 145.9 147.0 117.8

Unrecognized tax benefits 30.5 23.5 21.7

Long-term deferred taxes 72.5 26.6 82.6

Long-term debt 224.8 224.4 233.5

Noncurrent operating lease liabilities 50.6 56.9 —

Other long-term liabilities 14.6 8.0 18.2

Total liabilities 538.9 486.4 473.8

Commitments and contingencies

Stockholders’ equity:

Common stock, 75.4, 74.7 and 73.5 shares outstanding at December 31, 2020, June 30, 2020 and 2019, respectively 0.8 0.7 0.7

Additional paid-in capital 1,109.5 1,096.6 1,068.0

Accumulated other comprehensive income (loss) 2.9 (5.2 ) (5.4 )

Retained earnings (accumulated deficit) (233.3 ) (173.9 ) 25.6

Total Myriad Genetics, Inc. stockholders’ equity 879.9 918.2 1,088.9

Non-controlling interest — — —

Total stockholders’ equity 879.9 918.2 1,088.9

Total liabilities and stockholders’ equity $ 1,418.8 $ 1,404.6 $ 1,562.7

MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

(in millions)

Six Months Ended

December 31,

2020 2019

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss attributable to Myriad Genetics, Inc. stockholders $ (59.4 ) $ (28.9 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 35.8 36.4

Non-cash interest expense 0.4 0.2

Non-cash lease expense 6.4 —

Gain on disposition of assets (0.1 ) —

Non-cash impact of foreign currency transactions 4.8 —

Gain on deconsolidation of subsidiary — (0.1 )

Share-based compensation expense 14.9 15.8

Deferred income taxes 45.3 (6.8 )

Unrecognized tax benefits 7.1 0.7

Impairment of goodwill classified as held for sale — 1.3

Change in fair value of contingent consideration 3.4 0.7

Changes in assets and liabilities:

Prepaid expenses 2.1 (0.2 )

Trade accounts receivable (21.4 ) 13.6

Other receivables 1.0 (0.3 )

Inventory 2.2 2.6

Prepaid taxes (108.4 ) 0.4

Other assets (2.3 ) —

Accounts payable (1.2 ) (11.3 )

Accrued liabilities (3.4 ) (11.8 )

Deferred revenue (0.2 ) 1.6

Net cash (used in) provided by operating activities (73.0 ) 13.9

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures (8.2 ) (4.8 )

Purchases of marketable investment securities — (45.0 )

Proceeds from maturities and sales of marketable investment securities 35.9 35.5

Net cash provided by (used in) investing activities 27.7 (14.3 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from common stock issued under share-based compensation plans 1.8 11.0

Payment of tax withheld for common stock issued under share-based compensation plans (3.8 ) (9.7 )

Payment of contingent consideration recognized at acquisition (0.1 ) (3.9 )

Repayment of revolving credit facility — (8.6 )

Net cash used in financing activities (2.1 ) (11.2 )

Effect of foreign exchange rates on cash and cash equivalents 0.7 1.1

Change in cash and cash equivalents classified as held for sale — (1.5 )

Net decrease in cash and cash equivalents (46.7 ) (12.0 )

Cash and cash equivalents at beginning of the period 163.7 93.2

Cash and cash equivalents at end of the period $ 117.0 $ 81.2

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 a pipeline of new products that fuels growth and broadens access to genetic testing for all; three planned business unit divestitures; an increasingly stable pricing environment; using proceeds from business unit divestitures to pay down the existing credit facility balance; planned submissions to Medicare and commercial payers to receive reimbursement for the use of Prolaris in the post radical prostatectomy patient population; expanding coverage for the Company’s genetic tests in the United States through the Anthem BCBS agreement; the Anthem BCBS agreement aiding in providing easier access to testing for patients and providers, and reducing non-payment on tests across all the company’s product lines; plans to host an investor day to provide an update on the Company’s strategic transformation plan on May 4, 2021; and the Company’s strategic imperatives 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 or implied in the forward-looking statements. These risks include, but are not limited to: the risk that sales and profit margins of the Company’s existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to the Company’s ability to successfully transition from its existing product portfolio to its new tests; risks related to changes in the governmental or private insurers’ reimbursement levels for the Company’s tests or the Company’s ability to obtain reimbursement for its new tests at comparable levels to its existing tests; risks related to increased competition and the development of new competing tests and services; the risk that the Company 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 the Company may not successfully develop new markets for its molecular diagnostic tests and pharmaceutical and clinical services, including the Company’s ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying the Company’s molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating the Company’s laboratory testing facilities; risks related to public concern over the Company’s genetic testing in general or the Company’s 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 the Company’s ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to the Company’s ability to successfully integrate and derive benefits from any technologies or businesses that it licenses or acquires; risks related to the Company’s projections about the potential market opportunity for the Company’s products; the risk that the Company or its licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying the Company’s tests; the risk of patent-infringement claims or challenges to the validity of the Company’s patents; risks related to changes in intellectual property laws covering the Company’s molecular diagnostic tests and pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decisions Mayo Collab. Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012), Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), and Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014); risks of new, changing and competitive technologies and regulations in the United States and internationally; the risk that the Company may be unable to comply with financial operating covenants under the Company’s credit or lending agreements; the risk that the Company will be unable to pay, when due, amounts due under the Company’s credit or lending agreements; and other factors discussed under the heading “Risk Factors” contained in Item 1A of 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.

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. Management believes that presentation of operating results using non-GAAP financial measures 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 schedules.

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 financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Financial Measures

for the three and six months ended December 31, 2020

(Unaudited data in millions, except per share amount)

Three Months Ended Six Months Ended

December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019

Revenue $ 154.6 $ 195.1 $ 299.8 $ 381.4

GAAP Cost of molecular diagnostic testing $ 42.6 $ 41.0 82.5 82.2

GAAP Cost of pharmaceutical and clinical services 4.5 8.6 8.8 17.1

Equity compensation (0.4 ) (0.4 ) (0.8 ) (0.7 )

Transformation initiatives (0.4 ) — (0.4 ) (0.2 )

Non-GAAP COGS $ 46.3 $ 49.2 $ 90.1 $ 98.4

Non-GAAP Gross Margin 70.1 % 74.8 % 69.9 % 74.2 %

GAAP Research and Development $ 18.2 $ 18.8 $ 35.8 $ 40.1

Equity compensation (1.1 ) (1.2 ) (2.3 ) (2.7 )

Transformation initiatives (0.5 ) (0.3 ) (0.5 ) (1.0 )

Other adjustments (0.4 ) — (0.7 ) —

Non-GAAP Research and Development $ 16.2 $ 17.3 $ 32.3 $ 36.4

GAAP Contingent Consideration $ 4.6 $ (0.1 ) $ 3.5 $ 0.6

Other adjustments (4.6 ) 0.1 (3.5 ) (0.6 )

Non-GAAP Contingent Consideration $ — $ — $ — $ —

GAAP Impairment of Goodwill and Intangibles $ — $ 1.3 $ — $ 1.3

Impairment of goodwill and intangibles — (1.3 ) — (1.3 )

Non-GAAP Impairment of Goodwill and Intangibles $ — $ — $ — $ —

GAAP Selling, General and Administrative $ 132.9 $ 134.3 $ 257.0 $ 269.8

Acquisition – amortization of intangible assets (15.2 ) (15.2 ) (30.4 ) (30.4 )

Equity compensation (5.1 ) (5.5 ) (11.8 ) (12.5 )

Transformation initiatives (8.0 ) (2.1 ) (9.9 ) (4.4 )

Other adjustments (1.2 ) (1.3 ) (4.0 ) (1.9 )

Non-GAAP Selling, General and Administrative $ 103.4 $ 110.2 $ 200.9 $ 220.6

GAAP Operating Loss $ (48.2 ) $ (8.8 ) $ (87.8 ) $ (29.7 )

Acquisition – amortization of intangible assets 15.2 15.2 30.4 30.4

Impairment of goodwill and intangibles — 1.3 — 1.3

Equity compensation 6.6 7.1 14.9 15.9

Transformation initiatives 8.9 2.4 10.8 5.6

Other adjustments 6.2 1.2 8.2 2.5

Non-GAAP Operating Income (Loss) $ (11.3 ) $ 18.4 $ (23.5 ) $ 26.0

Non-GAAP Operating Margin -7.3 % 9.4 % -7.8 % 6.8 %

GAAP Net Loss Attributable to Myriad Genetics, Inc. Stockholders $ (44.2 ) $ (8.3 ) $ (59.4 ) $ (28.9 )

Acquisition – amortization of intangible assets 15.2 15.2 30.4 30.4

Impairment of goodwill and intangibles — 1.3 — 1.3

Equity compensation 6.6 7.1 14.9 15.9

Transformation initiatives 8.9 2.4 10.8 5.6

Other adjustments 11.7 1.3 15.8 2.5

Non-GAAP tax benefit adjustment (7.6 ) (1.4 ) (32.4 ) (3.3 )

Non-GAAP Net Income (Loss) $ (9.4 ) $ 17.6 $ (19.9 ) $ 23.5

GAAP Diluted Loss per Share $ (0.59 ) $ (0.11 ) $ (0.79 ) $ (0.39 )

Non-GAAP Diluted Earnings (Loss) per Share $ (0.12 ) $ 0.24 $ (0.27 ) $ 0.32

Diluted shares outstanding 75.3 74.4 75.0 74.1

Free Cash Flow Reconciliation

(Unaudited data in millions)

Three Months Ended Six Months Ended

December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019

GAAP cash flows from operations $ (13.7 ) $ (1.9 ) $ (73.0 ) $ 13.9

Capital expenditures (6.7 ) (3.4 ) (8.2 ) (4.8 )

Free cash flow $ (20.4 ) $ (5.3 ) $ (81.2 ) $ 9.1

Transformation initiative costs 8.9 2.4 10.8 5.6

Settlement of hereditary cancer Qui Tam compliant — 9.1 — 9.1

Other adjustments 6.3 1.3 8.5 1.9

Tax effect associated with non-GAAP adjustments (3.6 ) (3.0 ) (4.5 ) (2.1 )

Non-GAAP Free cash flow $ (8.8 ) $ 4.5 $ (66.4 ) $ 23.6

Following is a description of the adjustments made to GAAP financial measures:

Acquisition – amortization of intangible assets: Represents recurring amortization charges resulting from the acquisition of intangible assets, including developed technology and database rights

Equity compensation – non-cash equity-based compensation provided to Myriad employees

Transformation initiatives – transitory costs related to Myriad’s Elevate 2020 program and transformation initiatives

Other – Other one-time non-recurring expenses including expenses related to leadership transition, COVID-19 costs, non-recurring legal expenses, and potential future consideration related to acquisitions, and the non-cash impact of foreign exchange transactions

Non-GAAP tax expense/(benefit) adjustment – Tax expense/(benefit) due to non-GAAP adjustments, ASU 2016-09 employee share-based payment accounting, and CARES Act legislation.

Media Contact: Jared Maxwell Investor Contact: Scott Gleason

(801) 505-5027 (801) 584-1143

[email protected] [email protected]

Posted on February 23, 2021 4:09 pm
Arena Reports Fourth Quarter Financial Results with Strong Liquidity Position and Maintained Pipeline Progress Over the Quarter

Arena Reports Fourth Quarter Financial Results with Strong Liquidity Position and Maintained Pipeline Progress Over the Quarter

– Significant pipeline progress with potentially first- or best-in-class drug candidates

– Strong cash position of $1.1 billion as of December 31, 2020

SAN DIEGO–(BUSINESS WIRE)–Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today provided a corporate update and reported financial results for the fourth quarter and full year ended December 31, 2020.

“This quarter we were pleased to announce the completion of enrollment of the ELEVATE UC 52 trial for etrasimod and expansion of our cardiovascular franchise to include temanogrel. Our growing and diverse pipeline is supported by a strong cash position,” said Amit D. Munshi, President and CEO of Arena. “Adapting to the impact of the global COVID-19 pandemic, our team has continued to put safety of trial participants first while striving to maintain important momentum across our programs.”

Fourth Quarter and Recent Updates

In February 2021, dosed first participant in the Phase 2b VOYAGE trial for etrasimod for eosinophilic esophagitis (EoE)

In February 2021, Garry Neil named Board Chair, and Nawal Ouzren named to the Board of Directors

In January 2021, etrasimod ELEVATE UC 52 Phase 3 trial in ulcerative colitis (UC) completed enrollment; both ELEVATE UC 52 and ELEVATE UC 12 Phase 3 trials on track for topline data in Q1 2022; we continue to monitor the impact of the COVID-19 resurgence on study progress for both UC 52 and UC 12

In January 2021, temanogrel program announced at JP Morgan Health Care Conference

In November 2020, etrasimod atopic dermatitis (AD) ADVISE Phase 2b trial delivered topline results; moving forward into a Phase 3 registrational program

In October 2020, olorinab CAPTIVATE Phase 2b trial in abdominal pain associated with irritable bowel syndrome (IBS-C, IBS-D) enrollment completed; topline data expected Q1 2021

Fourth Quarter and Full-Year 2020 Financial Updates

Fourth Quarter 2020 Financial Results

Revenues for the fourth quarter were zero compared to $3.0 million in the fourth quarter of 2019

Research and development (R&D) expenses for the fourth quarter totaled $100.4 million compared to $74.6 million in the same period 2019. This increase was primarily driven by our advancing clinical studies, including the etrasimod Phase 3 program. The R&D non-cash share-based compensation was $6.5 million in the fourth quarter as compared to $7.0 million in the same period 2019

Selling, general and administrative (SG&A) expenses for the fourth quarter totaled $34.9 million, compared to $22.2 million in the fourth quarter of 2019. This increase is primarily attributed to non-cash share-based compensation expenses. The SG&A non-cash share-based compensation was $13.5 million in the fourth quarter as compared to $6.3 million in the same period 2019

Net loss for the fourth quarter was $122.2 million compared to net loss of $88.3 million for the same period in 2019

Basic and diluted net loss per share for the fourth quarter was $2.10 compared to basic and diluted net loss per share of $1.76 for the same period in 2019

Full-Year 2020 Financial Results

Revenues totaled $0.3 million

Research and development expenses totaled $323.7 million, including $26.0 million related to non-cash share-based compensation

Selling, general and administrative expenses totaled $103.2 million, including $33.9 million related to non-cash share-based compensation

Net loss was $404.7 million, or $7.39 per share

At December 31, 2020, Arena’s cash, cash equivalents and investments balance was approximately $1.1 billion and approximately 58.6 million shares of Arena common stock were outstanding.

Conference Call & Webcast Information

Arena will host a live and webcast question and answer session via conference call with the investment community today, Tuesday, February 23, 2021, at 4:30 PM ET, to discuss the financial results and corporate update.

When: Tuesday, February 23, 2021, at 4:30 PM ET

Dial-in: (877) 643-7155 (United States) or (914) 495-8552 (International)

Conference ID: 1778476

Please join the conference call at least 20 minutes early to register. You can access the live webcast under the investor relations section of Arena’s website at: www.arenapharm.com. A replay of the event will be archived under the investor relations section of Arena’s website for 30 days shortly after the call.

About Arena Pharmaceuticals

ARENA Pharmaceuticals is a team with a singular purpose – deliver our important medicines to patients.

In a rapidly changing global market, we work with a sense of urgency every day to understand the needs of all our stakeholders, identify bold, sometimes disruptive, ideas to get our medicines to patients, and relentlessly execute until it’s done.

ARENA – Care More. Act Differently.

Etrasimod, olorinab, and temanogrel are investigational compounds that are not approved for any use in any country.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as “potentially,” “striving to,” “can,” “on track for,” “expected,” “guidance,” and “will,” and include, without limitation, statements about the following: Arena’s clinical programs, including study initiation, enrollment of study participants, participant safety, study momentum, and timing of data readouts; Arena’s planned conference call and webcast with the investment community; the potential of Arena’s drug candidates, including to be first- or best-in-class and be delivered to patients; and Arena’s purpose, work, understanding, ideas, and execution. For such statements, Arena claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Arena’s expectations. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the following: clinical trials and other studies may not proceed at the time or in the manner expected or at all; the timing and outcome of research, development and regulatory review is uncertain, and Arena’s drug candidates may not advance in development or be approved for marketing; enrolling participants in Arena’s ongoing and intended clinical trials is competitive and challenging; the duration and severity of the coronavirus disease (COVID-19) outbreak, including but not limited to the impact on Arena’s clinical trials and operations, the operations of Arena’s suppliers, partners, collaborators, and licensees, and capital markets, which in each case remains uncertain; risks related to developing and commercializing drugs; Arena may need additional funds to advance all of its programs, and you and others may not agree with the manner Arena allocates its resources; risks and uncertainties relating to cash and revenues that may be generated from product sales or other sources, including the impact of competition; Arena’s revenues are based in part on estimates, judgment and accounting policies, and incorrect estimates or disagreement regarding estimates or accounting policies may result in changes to Arena’s guidance or previously reported results; risks related to unexpected or unfavorable new data; nonclinical and clinical data is voluminous and detailed, and regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements before or after approval; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; topline data may not accurately reflect the complete results of a particular study or trial; satisfactory resolution of litigation or other disagreements with others; government and third-party payor actions, including relating to reimbursement and pricing; risks related to relying on licenses or collaborative arrangements, including lack of control and potential disputes; the entry into or modification or termination of licenses or collaborative arrangements; and Arena’s and third parties’ intellectual property rights. Additional factors that could cause actual results to differ materially from those stated or implied by Arena’s forward-looking statements are disclosed in Arena’s filings with the Securities and Exchange Commission (SEC), including but not limited to Arena’s quarterly report on Form 10-Q for the quarter ended September 30, 2020, which was filed with the SEC on November 9, 2020. These forward-looking statements represent Arena’s judgment as of the time of this release. Arena disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.

Arena Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

Three months ended

Year ended

December 31,

December 31,

2020

2019

2020

2019

(unaudited)

Revenues

United Therapeutics revenue

$

—

$

—

$

—

$

800,000

Royalty revenue

—

(3,578

)

262

(853

)

Collaboration and other revenue

37

6,580

57

7,284

Total revenues

37

3,002

319

806,431

Operating Costs & Expenses

Research & development

100,441

74,632

323,740

231,496

Selling, general & administrative

34,897

22,243

103,218

77,616

Transaction costs

—

—

—

14,573

Total operating costs & expenses

135,338

96,875

426,958

323,685

(Loss) income from operations

(135,301

)

(93,873

)

(426,639

)

482,746

Total interest & other income, net

13,140

5,562

21,905

25,142

(Loss) income before income taxes

(122,161

)

(88,311

)

(404,734

)

507,888

Income tax provision

—

—

—

(110,333

)

Net (loss) income

$

(122,161

)

$

(88,311

)

$

(404,734

)

$

397,555

Net (loss) income per share, basic:

$

(2.10

)

$

(1.76

)

$

(7.39

)

$

7.99

Net (loss) income per share, diluted:

$

(2.10

)

$

(1.76

)

$

(7.39

)

$

7.69

Shares used in calculating net income (loss) per share, basic:

58,288

50,113

54,767

49,779

Shares used in calculating net income (loss) per share, diluted:

58,288

50,113

54,767

51,698

Arena Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheet Data

(In thousands)

(Unaudited)

December 31, 2020

December 31, 2019

¹

¹

Assets

Cash & cash equivalents

$

219,544

$

243,274

Prepaid expenses & other current assets

35,266

20,369

Total available-for-sale investments

884,497

867,229

Land, property & equipment, net

22,090

25,128

Other non-current assets

29,323

18,123

Total assets

$

1,190,720

$

1,174,123

Liabilities & Stockholders’ Equity

Accounts payable & accrued liabilities

$

53,676

$

41,153

Total lease financing obligations & other long-term liabilities

56,575

61,505

Total stockholders’ equity

1,080,469

1,071,465

Total liabilities & stockholders’ equity

$

1,190,720

$

1,174,123

¹The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006073/en/

Corporate Contacts:

Patrick Malloy

Arena Pharmaceuticals, Inc.

Vice President, Investor Relations & Corporate Communications

[email protected]

847.987.4878

Media Contact:

[email protected]

858-453-7200

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: General Health Pharmaceutical Health Clinical Trials

MEDIA:

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Posted on February 23, 2021 4:09 pm
Avista named as one of the 2021 World’s Most Ethical Companies by Ethisphere for the second time

Recognition honors those companies who understand the importance of leading, making hard but values-based decisions, and their overall commitment to integrity.

SPOKANE, Wash., Feb. 23, 2021 (GLOBE NEWSWIRE) — Avista Corp. (NYSE: AVA), a Washington state-based energy company with operations spanning five states, has been recognized by Ethisphere, a global leader in defining and advancing the standards of ethical business practices, as one of the 2021 World’s Most Ethical Companies. This is the second consecutive year Avista has received this recognition.

Since Avista was founded on clean, renewable hydropower in 1889, the company has been able to serve its customers with an electric generation mix that’s more than half renewable, while keeping its carbon emissions among the lowest in the nation. Today, Avista continues to move closer to its goal to serve its customers with 100 percent clean electricity by 2045 and to have a carbon-neutral supply of electricity by the end of 2027. Avista recently updated the corporate responsibility section on its website at https://investor.avistacorp.com/corporate-responsibility/our-commitment

“Avista has always been committed to balancing reliability and affordability while maintaining responsibility for our environmental footprint. We strive to improve the lives of customers through the safe, responsible, and affordable delivery of energy, in a way that is trustworthy, innovative and collaborative. These guiding principles are founded on a long tradition of corporate responsibility that is built upon our commitment to manage the social, environmental and economic effects of our operations,” said Avista President and CEO Dennis Vermillion. “We’re honored to receive this recognition, because it acknowledges our belief that integrating corporate responsibility into our business builds trust, forges lasting relationships, strengthens morale, reduces risk, delivers enhanced value to our shareholders, and ultimately enables us to more effectively deliver on our vision to provide better energy for life.”

This is the second consecutive year that Avista has been recognized by Ethisphere as one of only nine honorees in the Energy & Utilities industry, based on Ethisphere’s assessment. In 2021, 135 honorees were recognized spanning 22 countries and 47 industries.

“While addressing the tough challenges of 2020, we saw companies like Avista earn the trust of stakeholders through resilience and a commitment to ethics and integrity,” said Ethisphere CEO Timothy Erblich. “The World’s Most Ethical Companies honorees continue to demonstrate an unwavering commitment to the highest values and positively impacting the communities they serve. Congratulations to everyone at Avista for earning the World’s Most Ethical Companies designation.”

Methodology & Scoring

Grounded in Ethisphere’s proprietary Ethics Quotient®, the World’s Most Ethical Companies assessment process includes more than 200 questions on culture, environmental and social practices, ethics and compliance activities, governance, diversity and initiatives to support a strong value chain. The process serves as an operating framework to capture and codify the leading practices of organizations across industries and around the globe.

This year, the process was streamlined and question set expanded to gauge how applicants are adapting and responding to the global health pandemic, environmental, social, and governance factors, safety, equity, and inclusion and social justice.

Honorees
The full list of the 2021 World’s Most Ethical Companies can be found at https://worldsmostethicalcompanies.com/honorees.

About Avista Corp.

Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is the operating division that provides electric service to 400,000 customers and natural gas to 373,000 customers. Its service territory covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern Oregon, with a population of 1.7 million. Alaska Energy and Resources Company is an Avista subsidiary that provides retail electric service in the city and borough of Juneau, Alaska, through its subsidiary Alaska Electric Light and Power Company. Avista stock is traded under the ticker symbol “AVA.” For more information about Avista, please visit www.avistacorp.com.

Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.

About the Ethisphere Institute

The Ethisphere® Institute is the global leader in defining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust and business success. Ethisphere has deep expertise in measuring and defining core ethics standards using data-driven insights that help companies enhance corporate character and measure and improve culture. Ethisphere honors superior achievement through its World’s Most Ethical Companies recognition program and provides a community of industry experts with the Business Ethics Leadership Alliance (BELA). More information about Ethisphere can be found at: https://ethisphere.com.

Media Contacts

Avista Media Contact
Laurine Jue
[email protected]

Ethisphere Media Contact
Clea Nabozny
[email protected]

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