UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 2017
TELIGENT, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-08568 | 01-0355758 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
105 Lincoln Avenue
Buena, New Jersey 08310
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (856) 697-1441
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
¬ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¬ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¬ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¬ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On May 2, 2017, Teligent, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the first quarter ended March 31, 2017 and certain other information. A copy of the press release is attached hereto as Exhibit 99.1.
The Company will conduct a conference call to review its financial results on May 2, 2017, at 4:15 p.m. Eastern Time.
The information, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall otherwise be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are filed with this Report:
Exhibit No. | Description | |
99.1 | Press release of Teligent, Inc., dated May 2, 2017. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TELIGENT, INC. | |||
By: | /s/ Jenniffer Collins | ||
Name: | Jenniffer Collins | ||
Title: | Chief Financial Officer | ||
Date: May 2, 2017 | |||
Exhibit 99.1
News From
Buena, NJ 08310
Release Date: May 2, 2017
Contact: | Jenniffer Collins Teligent, Inc. (856) 697-4379 www.teligent.com |
TELIGENT, INC. ANNOUNCES FIRST QUARTER 2017 RESULTS
Teligent Revenue Growth of 27% Over 2016
BUENA, NJ - (PRNewswire) - Teligent, Inc. (NASDAQ: TLGT), a New Jersey-based specialty generic pharmaceutical company, today announced its financial results for the first quarter ended March 31, 2017.
First Quarter 2017 Highlights
• | Total revenues of $19.9 million in the first quarter of 2017, an increase of 27% over the same quarter in 2016. |
• | Total net revenues generated from the sale of our generic topical and injectable pharmaceutical products for the first quarters of 2017 and 2016 of $16.4 million and $9.2 million, respectively, an increase of 79% over the same quarter last year. |
• | Total net revenues generated from contract manufacturing services and other income for the first quarters of 2017 and 2016 of $3.5 million and $6.5 million, respectively. |
• | Total net international revenues for the first quarters of 2017 and 2016 of $3.0 million and $2.2 million, respectively. |
• | Gross margin for the first quarter of 2017 equaled 55% as compared to 51% in the first quarter of 2016. |
• | Operating income was $3.0 million in the first quarter of 2017, compared to operating income of $0.8 million in the same quarter in 2016. |
• | Our operating results in the first quarter of 2017 include $3.7 million in research and development costs, compared to $3.7 million in the same quarter in 2016. |
• | Adjusted EBITDA (as defined and reconciled to GAAP) for the first quarters of 2017 and 2016 were $4.9 million and $2.8 million, respectively. |
• | Adjusted income per fully diluted share (as defined and reconciled to GAAP) for the first quarters of 2017 and 2016 were $0.07 and $0.02, respectively. |
• | As a result of the fluctuation in foreign exchange rates during the first quarter of 2017, we recorded a non-cash gain in the amount of $1.1 million related to the foreign currency translation of our intercompany loans to three of our wholly-owned subsidiaries, compared to a non-cash gain in the amount of $1.6 million in the same quarter in 2016. |
• | Teligent received approval from the U.S. Food and Drug Administration ("FDA") of two Abbreviated New Drug Applications ("ANDAS") for topical generic prescription products during the first quarter, one for Triamcinolone Acetonide Ointment USP, 0.5%, and the other for Clobetasol Propionate Gel, 0.05%. |
Full Year 2017 Financial Guidance
• | The Company expects total revenue between $85 million and $100 million for the year ending December 31, 2017. |
• | The Company anticipates gross margin of 50% to 54% for the year ending December 31, 2017. |
• | In order to complete all of the development work required for the 2017 filings, the Company expects to spend between 24% and 27% of total revenue in research and development by the end of 2017. The Company intends to continue its aggressive R&D commitment in 2017 in both the U.S. and Canada. |
“We are off to a strong start in 2017. We grew revenue almost 11 percent compared to last quarter, we launched four products, and maintained our strong market presence in our existing portfolio of products,’’ said Jason Grenfell-Gardner, President and Chief Executive Officer. “During the quarter, we received approval from the FDA for two ANDAs, which we plan to launch in the second quarter.”
Mr. Grenfell-Gardner continued, “We are committed to executing our TICO strategy to expand our specialty generic pharmaceutical product portfolio in the topical, injectable, complex, and ophthalmic markets. Revenue from the Teligent portfolio of injectable and topical products increased 79% over the same quarter last year. We now market eighteen products in the US generic topical market, another four products in the US hospital injectable market, and have thirty approved generic products in the Canadian market.”
“We have 33 ANDAs on file with the US FDA and based on QuintilesIMS Health data as of February 2017, the current total addressable market of these pipeline ANDAs is estimated at approximately $2.0 billion. Significantly, 88% of this total addressable market is for products filed in Generic Drug User Fee Amendments (GDUFA) Year 3 or later. We filed one additional partnered ANDA in April 2017, which brings our total to three partnered submissions pending approval at the FDA,” Mr. Grenfell-Gardner concluded.
The Company will hold a conference call at 4:15 pm ET today, Tuesday, May 2, 2017 to discuss the first quarter 2017 results.
The Company invites you to listen to the call by dialing 1-888-346-3479. International participants should call 1-412-902-4260. Canadian participants should call 1-855-669-9657. Participants should ask to be joined into the Teligent, Inc. call.
This call is being webcast by MultiVu (a PR Newswire Company) and can be accessed in the Investor Relations Section of Teligent Inc.'s website at www.teligent.com.
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 and Adjusted EBITDA 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 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 income (loss), plus:
Depreciation expense
Amortization of intangibles
Interest expense, net
Non-cash interest expense
Provision for income taxes
Inventory step up and acquisition costs related to acquisitions
Foreign currency exchange gain/loss
Non-cash expenses, such as share-based compensation expense, and preferred stock dividend
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 the 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)
(unaudited)
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Product sales, net | $ | 19,853 | $ | 15,422 | |||
Research and development services and other income | 38 | 235 | |||||
Total revenues | 19,891 | 15,657 | |||||
Costs and Expenses: | |||||||
Cost of revenues | 8,957 | 7,702 | |||||
Selling, general and administrative expenses | 4,299 | 3,407 | |||||
Product development and research expenses | 3,668 | 3,711 | |||||
Total costs and expenses | 16,924 | 14,820 | |||||
Operating income | 2,967 | 837 | |||||
Other Income (Expense): | |||||||
Foreign currency exchange gain | 1,079 | 1,553 | |||||
Interest and other expense, net | (3,132 | ) | (3,318 | ) | |||
Income (loss) before income tax expense | 914 | (928 | ) | ||||
Income tax expense | 83 | 22 | |||||
Net income (loss) | $ | 831 | $ | (950 | ) | ||
Basic earnings (loss) per share | $ | 0.02 | $ | (0.02 | ) | ||
Diluted earnings (loss) per share | $ | 0.02 | $ | (0.02 | ) | ||
Weighted average shares of common stock outstanding: | |||||||
Basic and Diluted shares | 53,195,580 | 53,031,351 | |||||
TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share information)
March 31, | December 31, | ||||||
2017 | 2016* | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 59,478 | $ | 66,006 | |||
Accounts receivable, net | 25,172 | 21,735 | |||||
Inventories | 14,275 | 12,708 | |||||
Prepaid expenses and other receivables | 2,962 | 2,847 | |||||
Total current assets | 101,887 | 103,296 | |||||
Property, plant and equipment, net | 34,413 | 26,215 | |||||
Intangible assets,net | 52,716 | 52,465 | |||||
Goodwill | 450 | 446 | |||||
Other | 834 | 804 | |||||
Total assets | $ | 190,300 | $ | 183,226 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 8,076 | $ | 4,614 | |||
Accrued expenses | 10,048 | 10,349 | |||||
Total current liabilities | 18,124 | 14,963 | |||||
Convertible 3.75% senior notes, net of debt discount and debt issuance costs (face of $143,750) | 113,672 | 111,391 | |||||
Deferred tax liability | 209 | 205 | |||||
Total liabilities | 132,005 | 126,559 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; | |||||||
53,226,382 and 53,148,441 shares issued and outstanding | |||||||
as of March 31, 2017 and December 31, 2016, respectively | 551 | 551 | |||||
Additional paid-in capital | 103,503 | 102,624 | |||||
Accumulated deficit | (44,072 | ) | (44,903 | ) | |||
Accumulated other comprehensive loss, net of taxes | (1,687 | ) | (1,605 | ) | |||
Total stockholders’ equity | 58,295 | 56,667 | |||||
Total liabilities and stockholders' equity | $ | 190,300 | $ | 183,226 | |||
* Derived from the audited December 31, 2016 financial statements
TELIGENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2017 and 2016
(in thousands)
March 31, 2017 | March 31, 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 831 | $ | (950 | ) | ||
Non-cash expenses | 3,395 | 2,085 | |||||
Changes in operating assets and liabilities | (2,340 | ) | 1,647 | ||||
Net cash provided by operating activities | 1,886 | 2,782 | |||||
Net cash used in investing activities | (8,551 | ) | (2,916 | ) | |||
Net cash provided by (used in) financing activities | 5 | (65 | ) | ||||
Effect of exchange rate on cash and cash equivalents | 132 | 48 | |||||
Net decrease in cash and cash equivalents | (6,660 | ) | (199 | ) | |||
Cash and cash equivalents at beginning of period | 66,006 | 87,191 | |||||
Cash and cash equivalents at end of period | $ | 59,478 | $ | 87,040 | |||
TELIGENT, INC. AND SUBSIDIARIES
GROSS TO NET DEDUCTIONS
(in thousands)
Three months ended March 31, | ||||||||
2017 | 2016 | |||||||
Gross product sales | $ | 54,300 | $ | 26,823 | ||||
Reduction to gross product sales: | ||||||||
Chargebacks and billbacks | 30,015 | 12,345 | ||||||
Sales discounts and other allowances | 7,849 | 5,287 | ||||||
Total reduction to gross product sales | 37,864 | 17,632 | ||||||
Product sales, net | 16,436 | 9,191 | ||||||
Contract manufacturing product sales | 3,417 | 6,231 | ||||||
Total product sales, net | $ | 19,853 | $ | 15,422 | ||||
TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
Three months ended March 31, | ||||||||
2017 | 2016 | |||||||
Net income (loss) | $ | 831 | $ | (950 | ) | |||
Depreciation | 395 | 174 | ||||||
Amortization of intangibles | 687 | 705 | ||||||
Interest expense, net | 851 | 1,313 | ||||||
Non-cash interest expense | 2,281 | 2,005 | ||||||
Provision for income taxes | 83 | 22 | ||||||
EBITDA | 5,128 | 3,269 | ||||||
Inventory step-up, related to acquisition | — | 343 | ||||||
Foreign currency exchange gain | (1,079 | ) | (1,553 | ) | ||||
Non-cash stock-based compensation expense | 843 | 753 | ||||||
Adjusted EBITDA | 4,892 | 2,812 | ||||||
Product development and research expenses | 3,668 | 3,711 | ||||||
Adjusted EBITDA, before Product development and research expenses | $ | 8,560 | $ | 6,523 | ||||
TELIGENT, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTED NET INCOME (LOSS)
(in thousands, except share and per share information)
Three months ended March 31, | ||||||||
2017 | 2016 | |||||||
Net income (loss) | $ | 831 | $ | (950 | ) | |||
Non-cash interest expense | 2,281 | 2,005 | ||||||
Provision for income taxes | 83 | 22 | ||||||
Amortization of intangibles | 687 | 705 | ||||||
Inventory step-up, related to acquisition | — | 343 | ||||||
Foreign currency exchange gain | (1,079 | ) | (1,553 | ) | ||||
Non-cash stock-based compensation expense | 843 | 753 | ||||||
Adjusted net income | $ | 3,646 | $ | 1,325 | ||||
Non-GAAP adjusted net income per diluted share | $ | 0.07 | $ | 0.02 | ||||