AMRI announces third quarter 2015 results

‘We achieved a significant milestone this quarter, achieving more than US$100m in contract revenue and expanded adjusted contract margins of 25%,’ said William S. Marth, AMRI's President and Chief Executive Officer. ‘Recent acquisitions and organic growth, combined with cost reduction initiatives and efficiency efforts, contributed to our continued strong performance,’ he added.

‘With the addition of Gadea Pharmaceuticals, we've tripled the number of commercial APIs in our portfolio, providing us with a solid foundation in our API business in targeted segments. These APIs are approved and sold globally, providing us expanded market access for the rest of our portfolio. Our integrated drug discovery centre in Buffalo (New York, USA) is now operational, and the integration of biology and chemistry — along with state-of-the-art technology and our informatics partnership with PerkinElmer — will facilitate fast data turnaround and programme progression,’ he continued.

Marth concluded: ‘Outsourcing trends continue to expand, and as industry assets and capacity continue to shift, we see opportunities for AMRI. As we continue to grow, we will continue to integrate, align and scale our capabilities and asset base to respond to our customer's expanding needs as we look to be a leading provider of discovery services, API and drug product to the industry.’

Highlights include

• third quarter contract revenue of $101.4m, a 76% increase from 2014
• adjusted contract margins expand to 25%
• third quarter adjusted diluted EPS of $0.14, including a $0.04 decrease in EPS from royalties in the current quarter
• operating cash flow of $18.5m
• reiterates full year 2015 total revenue of $400-416m (adjusted EPS guidance maintained at between $0.90 and $0.95 per diluted share).

Adjusted contract margins and adjusted diluted EPS are non-GAAP measurements.

Third quarter 2015 results

Total revenue for the third quarter of 2015 was $104.6m, an increase of 67% compared with total revenue of $62.5m reported in the third quarter of 2014. Total contract revenue for the third quarter of 2015 was $101.4m, an increase of 76% compared with total contract revenue of $57.5m reported in the third quarter of 2014.

Adjusted contract margins were 25% for the third quarter of 2015, compared with 8% for the third quarter of 2014. Margins benefited from recent acquisitions, product mix within the active pharmaceutical ingredients (API) segment and the impact of the cost reduction initiatives and facility optimisation activities.

Royalty revenue in the third quarter of 2015 was $3.2m, a decrease of 35% from $5.0m in the third quarter of 2014. Royalty revenue for the third quarter of 2015 includes royalties from the net sales of certain amphetamine salts sold by Allergan (formerly Actavis) and royalties from net sales of an API sourced in Spain.