Myriad Genetics, Inc. (Nasdaq:MYGN) today reported financial results for its fourth quarter and fiscal year ended June 30, 2010.
Financial Results – Fiscal Fourth Quarter 2010
Revenues increased 9% to $93.9 million in the fourth quarter of fiscal 2010, from $86.1 million in the fourth quarter of last year. Oncology revenues increased 7% to $67.2 million in the fourth fiscal quarter, compared with $63.0 million in the prior year, while woman's health revenues grew 16% to $26.7 million this quarter, compared with $23.1 million in the fourth quarter of last year.
BRACAnalysis®, Myriad's products which provide a comprehensive analysis of BRCA1 and BRCA2 genes for assessing a woman's risk of developing hereditary breast and ovarian cancer, accounted for $82.5 million of total revenues for the fourth fiscal quarter. COLARIS® and COLARIS AP®, the Company's products which provide a comprehensive analysis of MLH1, MSH6, APC and MYH genes for assessing a person's risk for colorectal cancer or uterine cancer, accounted for $7.3 million of the total fourth quarter revenues. The remaining $4.1 million of total revenues was generated from the Company's other products which included MELARIS®, TheraGuide® 5-FU, OnDose™, PREZEON™, PROLARIS™ and single site testing as well as a small amount of license revenue.
For the fourth fiscal quarter ended June 30, 2010, operating income was $37.6 million or 40% of revenues, compared to $34.5 million in the same quarter of the prior year, an increase of 9%. Net income for our fourth fiscal quarter was $53.3 million or $0.54 per diluted share, which included a $14.6 million one-time income tax benefit as a result of recording a deferred tax asset and booking additional research and development tax credits during the quarter. This compares with fiscal 2009 fourth quarter net income, which included a loss from discontinued operations of $13.1 million, of $23.6 million or $0.24 per diluted share.
Gross profit was $82.7 million or 88% of revenue for the fiscal 2010 fourth quarter, compared with $74.9 million or 87% of revenue in last year's fourth quarter. Research and development expense was $5.3 million for the fourth quarter of fiscal 2010, compared with $4.4 million for the fiscal 2009 fourth quarter. This 20% increase was primarily due to increased clinical studies to support the Company's new molecular diagnostic products. Selling, general and administrative expense increased 10% to $39.8 million, compared with $36.0 million in the prior year fourth quarter.
"Myriad generated over $46 million of cash flow from operations this quarter," said Peter Meldrum, the Company's President and Chief Executive Officer. "Additionally, we repurchased approximately 4% of the Company's common stock during the quarter while maintaining a strong cash position of $488 million at year end."
Financial Results – Fiscal Year 2010
Revenues for fiscal 2010 increased 11% to $362.6 million from $326.5 million in fiscal 2009. This double-digit, year-over-year growth during a difficult economic environment continues to demonstrate the critical nature of the information provided by Myriad's tests.
Net income was $152.3 million or $1.54 per diluted share for fiscal 2010, which included a net $11.5 income tax benefit. This compares with fiscal 2009 net income, including a loss from discontinued operations of $51.6 million, of $84.6 million or $0.86 per diluted share. Additionally, the Company has significant net operating loss carry forwards and research and development tax credits remaining which may be used to offset federal income taxes payable on approximately $256 million of future income.
Gross profit for fiscal 2010 was $318.4 million, or 88% of revenue, compared with $283.3 million, or 87% of revenue last year. The margin growth resulted primarily from technology improvements and efficiency gains in the operation of the Company's molecular diagnostics laboratory.
Research and development expense was $21.9 million for fiscal 2010, compared with $17.9 million for fiscal 2009, an increase of 22%. Selling, general and administrative expense increased 16% to $161.4 million compared with $138.9 million in the prior year.
During the 2010 fiscal year, the Company generated net cash from operating activities of $155.1 million and an additional $22.3 million through the exercise of employee stock options. Even with the repurchase of 4% of Myriad common stock for $71.4 million and the investment of $7.9 million in property, plant and equipment, the Company grew its cash balance by more than $96 million for the year ended June 30, 2010. At June 30, 2010, the Company had $488.4 million in cash, cash equivalents and marketable investment securities compared with $392.2 million at June 30, 2009, an increase of 25%. The Company has no debt and no convertible securities.
2011 Financial Guidance
For the 2011 fiscal year ending June 30, 2011, the Company currently expects the following:
The Company also expects to generate cash flow from operations of $170 million for the 2011 fiscal year.
"Based on the midpoint of our guidance range, this represents an 8% revenue growth in our 2011 fiscal year," said Peter Meldrum, the Company's President and Chief Executive Officer. "We are transitioning from the 2010 fiscal year where we did not record an income tax provision to the 2011 fiscal year where we will record an income tax expense even though we won't be required to pay income taxes. Therefore, in order to provide a consistent comparison of our fiscal 2010 operating results with our estimates for fiscal 2011, we have provided a cash flow from operations estimate of $170 million, which represents a 10% increase over the $155 million that we generated in the 2010 fiscal year."
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