DUBLIN, May 7, 2013 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the first quarter ended March 31, 2013, updated 2013 financial guidance and key additions to its board of directors.
"During the first quarter, we continued to deliver strong top and bottom line growth fueled by growing sales of Xyrem and Erwinaze," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals plc. "We have made substantial progress in the execution of our strategy to maximize the potential of our product portfolio while further strengthening our cash position, positioning us to pursue promising corporate development opportunities and share repurchases."
Adjusted net income for the first quarter of 2013 was $84.4 million, or $1.37 per diluted share, compared to $51.7 million, or $0.89 per diluted share, for the first quarter of 2012.
Both GAAP income from continuing operations and GAAP net income for the first quarter of 2013 were $43.4 million, or $0.71 per diluted share. GAAP income from continuing operations for the first quarter of 2012 was $30.2 million, or $0.52 per diluted share, and GAAP net income for the first quarter of 2012 was $27.7 million, or $0.48 per diluted share.
GAAP net income for the first quarter of 2013 included various acquisition-related expenses, including the change in fair value of contingent consideration, upfront license fees, transaction, integration and restructuring expenses, as well as certain non-cash expenses and income tax adjustments. GAAP net income for the first quarter of 2012 included various acquisition-related expenses, including transaction and integration expenses, as well as certain non-cash expenses and discontinued operations. Reconciliations of applicable GAAP to non-GAAP adjusted information are included with this press release.
In May 2013, our board of directors authorized the use of up to $200 million to repurchase the company's ordinary shares. The timing and amount of repurchases will depend on a variety of factors, including the price of the company's ordinary shares, alternative investment opportunities, restrictions under our existing credit agreement, corporate and regulatory requirements and market conditions.
First Quarter 2013 Revenues and Product SalesTotal revenues for the first quarter of 2013 were $196.2 million, compared to total revenues of $102.5 million for the first quarter of 2012. The increase in total revenues for the quarter ended March 31, 2013 was driven primarily by inclusion of revenues from the acquired EUSA Pharma business and increased net sales of Xyrem® (sodium oxybate) oral solution.
Total revenues for the quarter ended March 31, 2013 included net sales, royalties and contract revenues. A table showing net sales for the first quarter of 2013 compared to pro forma net sales for the first quarter of 2012 is included in this press release.
Net sales for the first quarter of 2013 were as follows:
Operating Expenses and Other Operating expenses for the first quarter of 2013 increased to $128.1 million compared to $66.8 million for the first quarter of 2012. Operating expenses increased over the prior year for the following reasons:
First quarter of 2013 net interest expense was $7.4 million. As of March 31, 2013, our cash and cash equivalents were $450.5 million, and the remaining balance on our term loan was $451.2 million.
During the fourth quarter of 2012, the company sold its women's health business. Financial results from the women's health business are reported as discontinued operations for the quarter ended March 31, 2012.
2013 Financial Guidance Jazz Pharmaceuticals is providing the following updated 2013 guidance:Revenues
$830-$860 million Total Net Product Sales
$823-$853 million -Xyrem Net Sales
-Erwinaze/Erwinase Net Sales
$150-$175 millionAdjusted Gross Margin %1,3
87-89% Adjusted Combined SG&A and R&D Expenses2,3
$260-$275 millionGAAP Net Income Per Diluted Share
$3.32-$3.69 Adjusted Net Income Per Diluted Share3
Excludes $4 million of acquisition accounting inventory fair value step-up and $2 million in share-based compensation expense from estimated GAAP gross margin of 86-88%.2.
Excludes $46-$48 million of share-based compensation expense, $15 million related to a change in fair value of contingent consideration, $4 million of depreciation expense, $4 million of upfront license fees and $2-$3 million of transaction, integration and restructuring costs from estimated GAAP combined SG&A and R&D expenses of $325-$340 million.3.
See "Non‑GAAP Financial Measures" below. A reconciliation of non-GAAP adjusted guidance measures shown above is included with this press release.Other AnnouncementsThree new members have joined the company's board of directors. With their extensive experience, Peter Gray, Heather Ann McSharry and Norbert G. Riedel, Ph.D. bring additional depth and expertise to the board. With these additions, the company's board of directors consists of eleven members.
In April 2013, we entered into a collaboration with Medtronic, Inc., the market leader in intrathecal pumps. Prialt is currently approved for use with the Medtronic SynchroMed® II Drug Infusion System. Jazz Pharmaceuticals and Medtronic have agreed to develop joint speaker, physician education and training programs.
Conference Call DetailsJazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. EDT (9:30 p.m. IST) to provide a business and financial update and discuss its first quarter 2013 results and updated 2013 financial guidance. The live webcast may be accessed from the Investors & Media section of the company's website at www.jazzpharmaceuticals.com. Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. Investors may participate in the conference call by dialing +1 877 280 4962 in the U.S., or +1 857 244 7319 outside the U.S., and entering passcode 74507526.
A replay of the conference call will be available through May 14, 2013 by dialing +1 888 286 8010 in the U.S., or +1 617 801 6888 outside the U.S., and entering passcode 88616839.
An archived version of the webcast will be available for at least one week in the Investors & Media section of the Jazz Pharmaceuticals website at www.jazzpharmaceuticals.com.
About Jazz PharmaceuticalsJazz Pharmaceuticals plc is a specialty biopharmaceutical company focused on improving patients' lives by identifying, developing and commercializing innovative products that address unmet medical needs. The company has a diverse portfolio of products in the areas of narcolepsy, oncology, pain and psychiatry. The company's U.S. marketed products in these areas include: Xyrem® (sodium oxybate) oral solution, Erwinaze® (asparaginase Erwinia chrysanthemi), Prialt® (ziconotide) intrathecal infusion and FazaClo® (clozapine, USP) HD. Outside of the U.S., Jazz Pharmaceuticals also has a number of products marketed by its EUSA Pharma division. For further information, see www.jazzpharmaceuticals.com.
Non-GAAP Financial MeasuresTo supplement Jazz Pharmaceuticals' financial results and guidance presented on a GAAP basis, the company uses certain non-GAAP adjusted financial measures. The company believes that these non-GAAP financial measures are helpful in understanding its past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the company during 2012. They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP. Jazz Pharmaceuticals' management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. Compensation of executives is based in part on the performance of the company's business based on certain of these non-GAAP measures. In addition, Jazz Pharmaceuticals believes that the use of these non-GAAP measures enhances the ability of investors to compare its results from period to period. The non-GAAP adjusted financial measures as used by Jazz Pharmaceuticals in this press release may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company's competitors and other companies.
As used in this press release, (i) the historical adjusted net income measures exclude from GAAP income from continuing operations, as applicable, amortization of intangible assets, share-based compensation expense, acquisition accounting inventory fair value step-up adjustments, transaction and integration costs, restructuring charges, change in fair value of contingent consideration, upfront license fees, depreciation and other non-cash expense, and adjust the income tax provision to the estimated amount of taxes that are payable in cash; (ii) the historical adjusted combined SG&A and R&D expenses exclude from GAAP combined SG&A and R&D expenses, as applicable, share-based compensation expense, transaction, integration and restructuring costs, depreciation, upfront license fees and change in fair value of contingent consideration; (iii) the adjusted net income guidance measures exclude from estimated GAAP net income amortization of intangible assets and depreciation, share-based compensation expense, acquisition accounting inventory fair value step-up adjustments, transaction, integration and restructuring costs, change in fair value of contingent consideration, upfront license fees and other non-cash expense, and adjust the income tax provision to the estimated amount of taxes that are payable in cash; (iv) the adjusted gross margin percentage guidance excludes from estimated GAAP gross margin percentage share-based compensation expense, acquisition accounting inventory fair value step-up adjustments and restructuring expense; and (v) the adjusted combined SG&A and R&D expenses guidance excludes from estimated GAAP combined SG&A and R&D expenses share-based compensation expense, transaction, integration and restructuring costs, depreciation, change in fair value of contingent consideration and upfront license fees.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals' future financial results and growth potential, including 2013 financial guidance, plans to pursue investment opportunities, future collaboration activities, potential share repurchases and other statements that are not historical facts. These forward-looking statements are based on Jazz Pharmaceuticals' current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with maintaining and increasing sales of and revenue from Xyrem, such as the potential introduction of generic competition and changed or increased regulatory restrictions on or requirements with respect to Xyrem, as well as similar risks related to effectively commercializing the company's other marketed products, including Erwinaze and Prialt; protecting the company's intellectual property rights; obtaining appropriate pricing and reimbursement for the company's products in an increasingly challenging environment; ongoing regulation and oversight by U.S. and non-U.S. regulatory agencies; dependence on key customers and sole source suppliers, including the risk that the company may be unable to timely resolve potential product supply shortages and meet product demand; the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical success and regulatory approval; the company's ability to identify and acquire, in-license or develop additional products or product candidates to grow its business; and potential restrictions on the company's ability and flexibility to pursue future opportunities as a result of its substantial outstanding debt obligations; as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results; and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals plc's Securities and Exchange Commission filings and reports (Commission File No. 001-33500), including in the Annual Report on Form 10-K for the year ended December 31, 2012 and future filings and reports by the company, including the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.
JAZZ PHARMACEUTICALS PLCCONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)(Unaudited)Three Months EndedMarch 31,20132012Revenues:Product sales, net
$ 194,652$ 101,452Royalties and contract revenues
196,237102,530Operating expenses:Cost of product sales
27,2207,744Selling, general and administrative
70,52844,356Research and development
10,7473,959Intangible asset amortization
19,55510,732Total operating expenses
128,05066,791Income from operations
68,18735,739Interest income (expense), net
(7,399)13Foreign currency gain
271-Income from continuing operations before income tax provision
61,05935,752Income tax provision
17,6345,517Income from continuing operations
43,42530,235Loss from discontinued operations
27,681Basic income (loss) per ordinary share:Income from continuing operations
.56Loss from discontinued operations
.51Diluted income (loss) per ordinary share:Income from continuing operations
.52Loss from discontinued operations
.48Weighted-average ordinary shares used inper share computations:Basic
61,51158,084JAZZ PHARMACEUTICALS PLCSUMMARY OF PRODUCT SALES, NET(In thousands)(Unaudited)Three Months EndedMarch 31,20132012Xyrem
$ 194,652$ 101,452The following compares actual net product sales for the three months ended March 31, 2013 to unaudited pro forma information representing combined net product sales for the three months ended March 31, 2012, as if the merger with Azur Pharma, the acquisition of EUSA Pharma and the disposition of the women's health business had each been completed on January 1, 2012:SUMMARY OF PRODUCT SALES, NET (PRO FORMA) (In thousands) (Unaudited) Three Months EndedMarch 31,20132012Xyrem
$ 117,526$ 73,437Erwinaze/Erwinase
12,67412,874Total pro forma net sales
$ 194,652$ 147,140JAZZ PHARMACEUTICALS PLCCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) March 31,December 31,20132012ASSETSCurrent assets:Cash and cash equivalents
$ 450,511$ 387,196Accounts receivable, net
11,2867,445Deferred tax assets, net
47,51735,813Other current assets
21,39519,113Total current assets
647,372551,572Property and equipment, net
7,7957,281Intangible assets, net
436,355442,600Deferred tax assets, net, non-current
62,93374,850Deferred financing costs
15,68616,576Other long-term assets
$ 2,009,690$ 1,966,493LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:Accounts payable
$ 31,634$ 15,887Accrued liabilities
100,935104,666Current portion of long-term debt
32,65629,688Income taxes payable
39,300-Deferred tax liability, net
1,1381,138Total current liabilities
243,725191,538Deferred revenue, non-current
6,5666,776Long-term debt, less current portion
418,506427,073Contingent consideration, non-current
-34,800Deferred tax liability, net, non-current
169,176178,393Other non-current liabilities
9,8176,621Total shareholders' equity
1,161,9001,121,292Total liabilities and shareholders' equity
$ 2,009,690$ 1,966,493JAZZ PHARMACEUTICALS PLCRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share amounts)(Unaudited)Three Months EndedMarch 31,20132012GAAP income from continuing operations
30,235 Intangible asset amortization
19,55510,732 Share-based compensation expense
8,7573,281 Acquisition accounting inventory fair value step-up
1,5451,308 Transaction and integration costs
1,0226,095 Restructuring charges
949- Change in fair value of contingent consideration
4,500- Upfront license fees
575- Other non-cash expense
1,22942 Income tax adjustments
(1,132)-Adjusted net income
51,693GAAP income from continuing operations per diluted share
.52Adjusted net income per diluted share
.89Shares used in computing GAAP income from continuing operations and adjusted net income per diluted share amounts
61,51158,084 JAZZ PHARMACEUTICALS PLC RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS AND OTHER INFORMATION (In thousands, except per share amounts and percentages) (Unaudited) Three Months EndedMarch 31, 2013March 31, 2012GAAPAdjustmentNon-GAAPGAAPAdjustmentNon-GAAPTotal revenues
2,530Cost of product sales
6,075Selling, general and administrative
35,856Research and development
3,444Intangible asset amortization
19,555(19,555)-10,732(10,732)-Interest expense (income), net
(55)Foreign currency gain
271-271---Income from continuing operations before
income tax provision61,05942,132
57,210Income tax provision
Effective tax rate (g)
28.9%18.2%15.4%9.6%Income from continuing operations
84,42530,23521,45851,693Income from continuing operations
per diluted share$
.89(a) Acquisition accounting inventory fair value step-up of $1,545, share-based compensation expense of $709 and
restructuring expense of $42.(b) Share-based compensation expense of $7,005, change in fair value of contingent consideration of $4,500, transaction and integration costs of $1,022, restructuring expense of $907 and depreciation expense of $554.(c) Upfront license fees of $4,000, share-based compensation expense of $1,043 and depreciation of $21.(d) Non-cash interest expense associated with debt discount and debt issuance costs.(e)Sum of the above adjustments.(f)Adjustments to convert the income tax provision to the estimated amount of taxes payable in cash.(g)Income tax provision divided by income from continuing operations before income tax provision.(h)Net of adjustments (e) and (f).(i) Acquisition accounting inventory fair value step-up of $1,308 and share-based compensation expense of $361.(j)Transaction and integration costs of $6,095 and share-based compensation expense of $2,405. (k) Share-based compensation expense.(l) Amortization of product rights liability. JAZZ PHARMACEUTICALS PLC RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2013 FINANCIAL GUIDANCE (In millions, except per share amounts) (Unaudited) GAAP net income
$206 - $230Intangible asset amortization and depreciation
83-84Share-based compensation expense
48-50Acquisition accounting inventory fair value step-up
4Transaction, integration and restructuring costs
2-3Change in fair value of contingent consideration
15Upfront license fees
4Other non-cash expense
4-5Income tax adjustments
3-8 Adjusted net income
$379 - $392 GAAP net income per diluted share
$3.32 - $3.69 Adjusted net income per diluted share
$6.10 - $6.30 Shares used in computing GAAP and adjusted net income per diluted share amounts
|SOURCE Jazz Pharmaceuticals plc|
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