Myriad Genetics, Inc. (MYGN)
F2Q13 Earnings Call
February 5, 2013 4:30 PM ET
Scott Gleason – VP, IR
Pete Meldrum – President and CEO
Mark Capone – President, Myriad Genetic Laboratories, Inc.
Jim Evans – CFO
Bill Quirk – Piper Jaffray
Amanda Murphy – William Blair
Doug Schenkel – Cowen & Company
Derik de Bruin – Bank of America
Isaac Ro – Goldman Sachs
Jon Wood – Jefferies
Dan Leonard – Leerink Swann
Michael Yee – RBC Capital Markets
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Thank you. And good afternoon, everyone, and welcome to Myriad Genetics second quarter fiscal year 2013 earnings call. My name is Scott Gleason, VP of Investor Relations here at Myriad Genetics, Inc.
During the call we will review the financial results we’ve released today, after which we will host a question-and-answer session. If you have not had a chance to review the earnings release it can be found on the Investor Relations section of our website at myriad.com.
Presenting for Myriad today will Pete Meldrum, President and Chief Executive Officer; Mark Capone, President-Myriad Genetics Laboratories; and Jim Evans, our Chief Financial Officer.
This call can be heard via live webcast along with the slide presentation at myriad.com. The call is being recorded and will be archived in the Investor section of our website.
Please note that some of the information presented here today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management’s current expectations and actual events or results may differ materially or adversely from these expectations for a wide variety of reasons.
We refer you to the documents the Company files from time to time with the Securities and Exchange Commission, specifically, the Company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
With that, I’ll now turn the call over to Pete.
Thank you, Scott. To begin, I will highlight our financial results for the second fiscal quarter of 2013. Myriad again delivered a very strong performance exceeding Wall Street expectations. Total company revenue increased 21% year-over-year to a new record of $149.1 million representing our sixth consecutive quarter of top-line growth greater than 20%. Of particular note was BART testing, which significantly exceeded our expectations and guidance during the second fiscal quarter.
Another area of strength was the companion diagnostic revenue which grew 63% over the same period last year to $8.5 million. Much of this growth was fueled by our recently announced diabetes collaboration with Sanofi.
Operating margins grew to a healthy 37.3% of revenues resulting in net income of $35 million, a 24% increase over the same quarter of fiscal 2012. Diluted earnings per share increased 27% over the prior-year period to $0.42 per share.
In light of the strong second quarter results, we are tightening our revenue guidance for the 2013 fiscal year. We are currently projecting revenue of $575 million to $585 million for fiscal 2013, an increase of $5 million to the lower end of the previous guidance range. This represents a 16% to 18% growth over our prior fiscal year.
I’m also pleased to announce that we’re increasing our earnings guidance for the second time this year. We’re now projecting diluted earnings per share of $1.55 to $1.58, up from the previous guidance range of $1.50 to $1.55 per share. This represents a 19% to 21% growth over fiscal 2012.
Myriad continues its strong commitment to return cash to its shareholders, and I am pleased to report that during the second fiscal quarter we repurchased $33.7 million worth of Myriad stock, representing 1.2 million shares. We have now repurchased nearly a quarter of the company’s outstanding stock. Even with our aggressive share repurchase program, Myriad ended the quarter with $468 million of cash. By the end of January, we had completed the current share repurchase program and I am pleased to announce that Myriad’s board has approved another $200 million share repurchase authorization.
This quarter’s financial results are reflective of the successful execution of our long-term growth and diversification strategy. This strategy starts with a deep commitment to the patient. We are passionate about developing novel, transformative products that save lives and improve the quality of life for patients with cancer and other major diseases. Our molecular diagnostic tests provide essential information to physicians concerning their patients’ risk of disease or disease recurrence and their patients’ likelihood of benefiting from particular therapies. Armed with this critical information, physicians can make better healthcare management decisions for their patients.
Myriad’s strategy encompasses three major growth initiatives. First, we are expanding the existing markets for our current portfolio of tests and taking steps to increase our penetration in these markets. This strategic initiative was primarily responsible for the 21% revenue growth that we achieved for the first half of our fiscal 2013 fiscal year.
Second, we are extending our global reach with operations in Europe and a distribution network in 61 countries around the world. This international capability will contribute to our future revenue growth in the near term.