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Teligent, Inc. Announces Second Quarter 2019 Results

BUENA, N.J., Aug. 05, 2019 (GLOBE NEWSWIRE) -- Teligent, Inc. (TLGT), a New Jersey-based specialty generic pharmaceutical company, today announced its financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 Highlights

  • Net revenues of $18.3 million for the second quarter of 2019, a $2.1 million increase over the same quarter in 2018
     
  • Gross margin of 47% for the second quarter of 2019, an 1,800 basis point increase from the 29% reported in the same quarter in 2018, driven primarily by a more favorable customer and product mix and a lower of cost or market adjustment which dampened the second quarter of 2018 gross margin by 300 basis points
     
  • Operating income was $0.7 million for the second quarter of 2019, an improvement of $5.6 million or 114% compared to the operating loss of $4.9 million reported in the same quarter in 2018
     
  • As a result of the fluctuation in foreign exchange rates during the second quarter of 2019, the Company recorded a non-cash gain in the amount of $0.6 million related to the foreign currency translation of its intercompany loans and other balances held in foreign currencies, compared to a non-cash loss in the amount of $3.2 million in the same quarter in 2018
     
  • Adjusted EBITDA was a gain of $2.7 million in the second quarter of 2019, an improvement of $5.8 million or 186% compared to a loss of  $3.1 million in the same quarter in 2018
     
  • The Company received one ANDA approval during the second quarter of 2019 for Fluocinonide Cream USP, 0.1%

“I am pleased with Teligent’s second quarter 2019 top and bottom-line financial performance and improvements made in our manufacturing processes.” said Jason Grenfell-Gardner, President and Chief Executive Officer.

Mr. Grenfell-Gardner continued, “In addition to our strong financial performance, I am very encouraged by progress made towards filing our first injectable prior approval supplement and preparing for the FDA prior approval inspection.”

“We reaffirm our 2019 financial guidance of double-digit top-line percentage growth, gross margin greater than 40% and an adjusted EBITDA margin greater than 10%.” Mr. Grenfell-Gardner concluded.

About Teligent, Inc.

Teligent is a specialty generic pharmaceutical company. Our mission is to be a leading player in the specialty generic prescription drug market. Learn more on our website www.teligent.com.
  
Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions, and other statements contained in this press release that are not historical facts and statements identified by words such as “plan,” “believe,” “continue,” “should” or words of similar meaning. Factors that could cause actual results to differ materially from these expectations include, but are not limited to: our inability to meet current or future regulatory requirements in connection with existing or future ANDAs; our inability to achieve profitability; our failure to obtain FDA approvals as anticipated; our inability to execute and implement our business plan and strategy; the potential lack of market acceptance of our products; our inability to protect our intellectual property rights; changes in global political, economic, business, competitive, market and regulatory factors; and our inability to complete successfully future product acquisitions. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under the caption “Risk Factors” in Teligent, Inc.’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other periodic reports we file with the Securities and Exchange Commission. Teligent, Inc. does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise, except as required by law.
  
Non-GAAP Financial Measures

In addition to reporting financial information required in accordance with U.S. generally accepted accounting principles (GAAP), Teligent is also presenting EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research which are non-GAAP financial measures. Since EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs are non-GAAP financial measures, they should not be used in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, Teligent's definition of Adjusted EBITDA and adjusted net loss  may not be comparable to similarly titled non-GAAP financial measures reported by other companies.

Adjusted EBITDA, as defined by the Company, is calculated as follows:

Net loss, plus:

Depreciation expense

Amortization of intangibles

Impairment losses

Interest expense, net

Amortization of debt issuance costs and debt extinguishment

Provision for income taxes

Foreign currency exchange gain/(loss)

Non-cash stock-based compensation expense

The Company believes that Adjusted EBITDA is a meaningful indicator, to both Company management and investors, of the past and expected ongoing operating performance of the Company. EBITDA is a commonly used and widely accepted measure of financial performance. Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance.

While the Company uses EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs in managing and analyzing its business and financial condition and believes these non-GAAP financial measures to be useful to investors in evaluating the Company's performance, it is open to certain shortcomings. EBITDA and Adjusted EBITDA do not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omit share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense.  Due to the inherent limitations of EBITDA, Adjusted EBITDA and Adjusted EBITDA before product development and research costs, the Company's management utilizes comparable GAAP financial measures to evaluate the business in conjunction with EBITDA and Adjusted EBITDA and encourages investors to do likewise.

The Company also presents a non-GAAP financial measure of adjusted net income (loss) and adjusted net income (loss) per diluted share, to show the adjusted net income when EBITDA adjustments are added back or subtracted out of the traditional GAAP reported net income (loss).  Adjusted diluted earnings per share, as defined by the Company, is equal to adjusted net income divided by the actual or anticipated diluted share count for the applicable period.

 
TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share information)
 
  Three months ended June 30,   Six months ended June 30,
  2019     2018     2019     2018  
               
Revenue, net $ 18,341     $ 16,249     $ 31,463     $ 30,794  
               
Costs and Expenses:              
Cost of revenues 9,800     11,465     17,160     20,790  
Selling, general and administrative expenses 5,187     5,727     10,700     11,087  
Product development and research expenses 2,668     3,967     5,657     7,358  
Total costs and expenses 17,655     21,159     33,517     39,235  
Operating income/ (loss) 686     (4,910 )   (2,054 )   (8,441 )
               
Other Income (Expense):              
Foreign currency exchange gain/ (loss) 553     (3,220 )   (291 )   (1,895 )
Debt partial extinguishment of 2019 Notes     (2,467 )   (185 )   (2,467 )
Interest and other expense, net (5,155 )   (2,499 )   (10,102 )   (5,071 )
Loss before income tax expense (3,916 )   (13,096 )   (12,632 )   (17,874 )
               
Income tax expense 73     23     81     47  
               
Net loss $ (3,989 )   $ (13,119 )   $ (12,713 )   $ (17,921 )
               
Basic and diluted loss per share $ (0.08 )   $ (0.25 )   $ (0.24 )   $ (0.34 )
               
Weighted average shares of common stock outstanding:              
Basic and diluted shares 53,849,108     53,510,712     53,827,665     53,484,756  
                       



 
TELIGENT, INC. AND SUBSIDIARIES
GROSS TO NET DEDUCTIONS
(in thousands)
 
  Three months ended June 30,   Six months ended June 30,
  2019   2018   2019   2018
               
Gross product sales $ 39,322   $ 48,142   $ 66,736   $ 84,690
               
Reduction to gross product sales:              
Chargebacks and billbacks 11,826   21,449   22,712   38,364
Wholesaler fees for service 2,182   477   3,948   1,112
Sales discounts and other allowances 7,446   11,539   9,713   17,301
Total reduction to gross product sales 21,454   33,465   36,373   56,777
               
Product sales, net 17,868   14,677   30,363   27,913
               
Contract manufacturing product sales 388   1,450   930   2,748
               
Research and development services and other income 85   122   170   133
               
Total product sales, net $ 18,341   $ 16,249   $ 31,463   $ 30,794
                       


 

TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
 
  Three months ended June 30,   Six months ended June 30,
  2019     2018     2019     2018  
               
Net loss $ (3,989 )   $ (13,119 )   $ (12,713 )   $ (17,921 )
               
Depreciation 902     572     1,778     1,133  
Amortization of intangibles 758     759     1,514     1,550  
Impairment losses             22  
Interest expense/(income), net  (1) 3,596     166     7,020     144  
Amortization of debt issuance costs and
debt extinguishment
1,559     4,800     3,267     7,394  
Provision for income taxes 73     23     81     47  
EBITDA 2,899     (6,799 )   947     (7,631 )
               
Foreign currency exchange (gain)/ loss (553 )   3,220     291     1,895  
EBITDA after foreign currency exchange loss/(gain) 2,346     (3,579 )   1,238     (5,736 )
Non-cash stock-based compensation expense 316     483     684     1,103  
Adjusted EBITDA 2,662     (3,096 )   1,922     (4,633 )
               
Product development and research expenses 2,329     3,636     4,995     6,706  
               
Adjusted EBITDA before product development and research expenses $ 4,991     $ 540     $ 6,917     $ 2,073  
                               
(1)  Includes $2.2 million and $4.2 million of payment-in-kind interest during the three and six months ended June 30, 2019 respectively.
 

 

 
TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTED NET LOSS
(in thousands, except share and per share information) 
 
  Three months ended June 30,   Six months ended June 30,
  2019     2018     2019     2018  
               
Net loss $ (3,989 )   $ (13,119 )   $ (12,713 )   $ (17,921 )
               
Amortization of debt issuance costs and debt extinguishment 1,559     4,800     3,267     7,394  
Provision for income taxes 73     23     81     47  
Amortization of intangibles 758     759     1,514     1,550  
Impairment losses             22  
Foreign currency exchange (gain) / loss (553 )   3,220     291     1,895  
Non-cash stock-based compensation expense 316     483     684     1,103  
Adjusted net loss $ (1,836 )   $ (3,834 )   $ (6,876 )   $ (5,910 )
               
Non-GAAP adjusted net loss per basic and diluted share $ (0.04 )   $ (0.07 )   $ (0.13 )   $ (0.11 )
               

 

Contact: Damian Finio
Teligent, Inc.
(856) 336-9117
www.teligent.com