Anika Therapeutics Reports Fourth Quarter and Full Year 2012 Financial Results
Fourth Quarter Revenue Increases 23% on Strong Sales of Orthovisc
Earnings Grow 48% to $0.31 per Share in Quarter and 32% to $0.82 per Share for Year
Press Release: Anika Therapeutics, Inc. – 19 hours ago
BEDFORD, Mass.--(BUSINESS WIRE)--
Anika Therapeutics, Inc. (ANIK), a leader in products for tissue protection, healing and repair, based on hyaluronic acid (“HA”) technology, today reported financial results for the quarter and full year ended December 31, 2012. The company generated record quarterly and full year revenue in 2012.
Management Commentary
“In addition to achieving record quarterly and full year revenue, Anika delivered double-digit revenue and net income growth in the fourth quarter of 2012, concluding an excellent year from both financial and operational perspectives,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. “These results were in line with the preliminary financial results we released on January 22, 2013.”
“Our top-line performance continues to be driven by strong demand for Orthovisc, our flagship orthobiologics product,” Sherwood said. “Orthovisc revenue in our U.S. market was up nearly 42% for the full year. Through the strength of our partner Depuy Mitek’s marketing activities over the past year, Orthovisc closed 2012 as the market leader in the U.S. multi-injection segment and the number two U.S. brand in viscosupplementation overall. On the bottom line, growing revenue, coupled with operating efficiencies, have enabled us to drive continued growth in income from operations and generate robust cash flow. Our financial performance remains strong despite a one time restructuring charge in the fourth quarter implemented to strengthen our business and refocus our development programs.”
“We have made progress in our efforts to secure U.S. regulatory approval for Monovisc®,” said Sherwood. “Subsequent to our Monovisc announcement on December 4, 2012, we completed an encouraging discussion with the FDA in January 2013 to determine our next steps. We followed up on that discussion by submitting a new PMA amendment incorporating existing data.”
“The year 2012 was successful for Anika, and we are well-positioned for further success in 2013,” Sherwood said. “Demand for Orthovisc is growing. We continue to streamline our operations and improve our manufacturing capabilities, and we are excited about our product pipeline. Anika is evolving from an HA biomaterials company into a products company focused on promising new medical solutions, and a company dedicated to capturing more of the value we have created by enhancing our capabilities in commercialization. We look forward to reporting our progress as the rest of 2013 unfolds.”
Revenue
Anika’s total revenue increased 23% to $22.6 million in the fourth quarter of 2012, from $18.4 million in the fourth quarter of 2011. For the full year 2012, total revenue grew 10% to $71.4 million, from $64.8 million a year earlier. The company’s revenue growth for both periods was primarily driven by increased sales of its flagship Orthobiologics product, Orthovisc®.
Product Gross Margin
Product gross margin for the fourth quarter of 2012 improved to 66.1%, from 59.8% in the fourth quarter last year. For the 12 months ended December 31, 2012, product gross margin increased to 57.4%, compared with 56.8% for full year 2011. The improvements for both the quarter and the year were driven by higher production volume, a more favorable product mix, and the realization of operational efficiencies from our new manufacturing facility after consolidation of sites.
Operating Income
Operating income for the fourth quarter of 2012 increased to $7.8 million, from $4.9 million in the same period in 2011. For the 12 months ended December 31, 2012, operating income increased to $19.7 million, from $14.0 million a year earlier. This growth was driven by a combination of increased revenue, higher product gross profit, lower R&D spending related to clinical studies, and reduced general and administrative expenses in 2012.
Net Income
Net income for the fourth quarter of 2012 rose to $4.5 million, or $0.31 per diluted share, from $2.9 million, or $0.21 per diluted share, in the fourth quarter last year. For full year 2012, net income grew to $11.8 million, or $0.82 per diluted share, from $8.5 million, or $0.62 per diluted share, in 2011. Net income for both 2012 periods includes, a one-time, pre-tax charge of $2.5 million related to the closure of the company’s tissue engineering facility in Italy. The company’s effective tax rate for 2012 increased to 39.8%, from 38.6% for 2011.
Operating Expenses
Research and development expenses for the fourth quarter of 2012 were $1.3 million, compared with $1.5 million in the fourth quarter last year. For the full year, R&D expenses decreased to $5.4 million, from $6.2 million in 2011. Anika expects a significant year-over-year increase in R&D expense for 2013 due to the anticipated initiation of a clinical study and new product pipeline initiatives.
Selling, general and administrative (“SG&A”) expenses in the fourth quarter of 2012 decreased to $3.7 million, from $4.9 million in the fourth quarter of 2011. For full year 2012, SG&A expenses decreased to $14.7 million, compared with $17.9 million in 2011. The declines for both periods were primarily due to U.S. manufacturing facilities consolidation, and the assumption of litigation costs by a third party.
Cash and Cash Equivalents
Anika’s cash and cash equivalents at December 31, 2012 increased to $44.1 million, from $35.8 million at December 31, 2011, driven by higher profits.
Conference Call Information
Anika will hold a conference call to discuss its financial results, business highlights and outlook tomorrow, Thursday, February 28, 2013 at 9:00 a.m. ET. In addition, the company will answer questions concerning business and financial developments and trends, and other business and financial matters affecting the company, some of the responses to which may contain information that has not been previously disclosed.
To listen to the conference call, dial 800-291-5365 (international callers dial 617-614-3922) and use the passcode 89264114. Please call approximately 10 minutes before the starting time and reference Anika Therapeutics. In addition, the conference call will be available through a live audio webcast in the “Investor Relations” section of the Anika Therapeutics website, www.anikatherapeutics.com. An accompanying slide presentation also can be accessed via the Anika Therapeutics website. The conference call will be archived and accessible on the same website shortly after the conclusion of the call.
