Celgene Corporation
Jan 13, 2014
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Celgene Corporation Announces 2014 Financial Outlook and Preliminary 2013 Results

SUMMIT, N.J.--()--Celgene Corporation (NASDAQ:CELG) provided its preliminary 2013 results and financial outlook for 2014 and beyond at the 32nd Annual J.P. Morgan Healthcare Conference. In 2013, total revenue is expected to be approximately $6.5 billion and total net product sales are expected to be $6.4 billion. Adjusted diluted earnings per share (EPS) is expected to be approximately $5.96. Based on U.S. Generally Accepted Accounting Principles (GAAP), diluted EPS is expected to be in the range of $3.37 to $3.39. In 2014, total net product sales are expected to be $7.3 billion to $7.4 billion, a 16 percent year-over-year increase. Adjusted diluted EPS is expected to be $7.00 to $7.20, a 19 percent year-over-year increase based on the mid-point of the range. On a GAAP basis, diluted EPS is expected to be in the range of $5.54 to $5.92.

“2013 momentum and confidence in our business model leads us to raise our 2015 and 2017 targets.”



“Our 2013 accomplishments and confidence in our core business position us for another year of outstanding execution across all financial metrics in 2014 as we launch our I&I franchise and anticipate achieving many other significant milestones,” said Bob Hugin, Celgene’s Chairman and Chief Executive Officer. “2013 momentum and confidence in our business model leads us to raise our 2015 and 2017 targets.”

Preliminary 2013 Financial Results Year-Over-Year (Unaudited)

Certain activities involved in determining the audited results for the fiscal year ended December 31, 2013 are in process and could result in the final reported audited results being different from the unaudited results noted in this press release. Please see the attached Reconciliation of Estimated/Projected GAAP to Adjusted Measures for further information.

Celgene Forecasts Strong Product Sales and Earnings Growth in 2014

Raising 2015 and 2017 Long-term Financial Targets

2014 Expected Milestones

Hematology

Oncology

I&I

Q4 and Full year 2013 Conference Call and Webcast Information

Celgene will host a conference call to discuss the results and achievements of its fourth quarter and full year 2013 operating and financial performance on January 30, 2014, at 9 a.m. ET. The conference call will be available by webcast on the Investor Relations webpage at www.celgene.com. An audio replay of the call will be available from noon ET January 30, 2014, until midnight ET February 6, 2014. To access the replay, in the U.S. dial (855) 859-2056; outside the U.S. dial (404) 537-3406; and enter conference ID number 33928469.

About Celgene

Celgene Corporation, headquartered in Summit, New Jersey, is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of novel therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. For more information, please visit www.celgene.com.

Forward-Looking Statements

This press release contains forward-looking statements, which are generally statements that are not historical facts. Forward-looking statements can be identified by the words "expects," "anticipates," "believes," "intends," "estimates," "plans," "will," “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our Annual Report on Form 10-K and our other reports filed with the Securities and Exchange Commission.

In addition to financial information prepared in accordance with U.S. GAAP, this press release also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information. These adjusted measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. We typically exclude certain GAAP items that management does not believe affect our basic operations and that do not meet the GAAP definition of unusual or non-recurring items. Other companies may define these measures in different ways. See the attached Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for explanations of the amounts excluded and included to arrive at the adjusted measures for the year ended December 31, 2013 and for the projected amounts for the year ending December 31, 2014.

 
Celgene Corporation and Subsidiaries
Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures
(Unaudited)
 
Three Months Ended   Twelve Months Ended   Twelve Months Ending
December 31, 2013 December 31, 2013 December 31, 2014
Range Range Range
Low   High Low   High Low   High
Estimated/projected diluted earnings per common share - GAAP   (1 ) $ 0.50 $ 0.52 $ 3.37 $ 3.39 $ 5.54 $ 5.92
 
Per share impact of excluded items before tax:
Cost of goods sold (excluding amortization of acquired intangible assets):
Share-based compensation expense (2 ) 0.01 0.01 0.04 0.04 0.06 0.06
 
Research and Development:
Share-based compensation expense (2 ) 0.10 0.10 0.34 0.34 0.49 0.48
Upfront collaboration payments (1 )(3) 0.53 0.53 1.34 1.34 0.12 0.07
 
Selling, general and administrative:
Share-based compensation expense (2 ) 0.11 0.11 0.38 0.38 0.55 0.54
Settlement of contingent obligation (4 ) - - - - 0.07 0.05
 
Amortization of acquired intangible assets (1 )(5) 0.15 0.15 0.61 0.61 0.60 0.60
 
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration (1 )(6) 0.22 0.21 0.40 0.39 0.07 0.07
 
Non-operating asset impairment (7 ) 0.19 0.18 0.19 0.18 - -
 
Net income tax adjustments (8 )   (0.30 )     (0.30 )   (0.71 )     (0.71 )   (0.50 )   (0.59 )
Estimated/projected diluted earnings per common share - Adjusted Approximately $ 1.51 Approximately $ 5.96 $ 7.00   $ 7.20  
 
Twelve Months Ended Twelve Months Ending
December 31, 2013 December 31, 2014
Range Range
Low High Low High
 
Operating margin percentage of revenue - GAAP (1 ) 27.8 % 27.9 % 38.7 % 39.4 %
Plus adjustments:
Share-based compensation expense (2 ) 5.0 % 5.0 % 6.3 % 6.1 %
Upfront collaboration payments (1 )(3) 8.9 % 8.9 % 0.7 % 0.4 %
Settlement of contingent obligation (4 ) 0.0 % 0.0 % 0.4 % 0.3 %
Amortization of acquired intangible assets (1 )(5) 4.0 % 4.0 % 3.5 % 3.4 %
Change in fair value of contingent consideration (1 )(6)   2.7 %   2.6 %   0.4 %   0.4 %
Operating margin percentage of revenue - Adjusted   48.4 %   48.4 %   50.0 %   50.0 %
 
In addition to financial information prepared in accordance with U.S. GAAP, this press release also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information. These adjusted financial measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. We typically exclude certain GAAP items that management does not believe affect our basic operations and that do not meet the GAAP definition of unusual or non-recurring items. Other companies may define these measures in different ways.
 
Explanation of adjustments:

(1) Our projected 2014 earnings do not include the effect of any business combinations, collaboration agreements, asset acquisitions, intangible asset impairments, or changes in the fair value of our CVRs issued as part of the acquisition of Abraxis BioScience Inc. (Abraxis) that may occur after the day prior to the date of this press release.

(2) Exclude share-based compensation expense.

(3) Exclude upfront payments for research and development collaboration arrangements.

(4) Exclude settlement of contingent obligation to make matching contributions to a non-profit organization.

(5) Exclude amortization of acquired intangible assets from business combinations.

(6) Exclude changes in the fair value of contingent consideration from business combinations.

(7) Exclude impairment of royalty receivable asset that was received in April 2011 as partial consideration in the sale of the non-core assets obtained by Celgene in the acquisition of Abraxis.

(8) Net income tax adjustments reflect the estimated tax effect of the above adjustments and the impact of certain other non-operating tax adjustments, including one-time effects of acquisition related matters, adjustments to the amount of unrecognized tax benefits, and taxes on certain unremitted foreign earnings.

Contacts

Investors:
Celgene Corporation
Investor Relations
Patrick E. Flanigan III, 908-673-9969
Vice President
or
Media:
Brian P. Gill, 908-673-9530
Vice President
Corporate Communications