•

Total Fourth-Quarter Revenues of $200.9 Million

•

Fourth-Quarter Diluted EPS of $0.18 and Adjusted EPS of $0.38, Up 31 Percent

Revenue

Fiscal Fourth-Quarter

Fiscal Year

($ in millions)

2018

2017                (Restated)

% Change

2018

2017                (Restated)

% Change

Molecular diagnostic testing revenue

Hereditary cancer testing revenue

$

126.8

$

143.5

(12%)

$

498.2

$

567.2

(12%)

GeneSight testing revenue

33.9

25.5

33%

124.9

78.4

59%

Vectra DA testing revenue

15.1

10.3

47%

57.2

43.7

31%

Prolaris testing revenue

7.0

3

133%

20.9

12.1

73%

EndoPredict testing revenue

2.8

2

40%

8.9

7.7

16%

Other testing revenue

2.0

2.7

(26%)

9.2

11.5

(20%)

Total molecular diagnostic testing revenue

187.6

187

0%

719.3

720.6

0%

Pharmaceutical and clinical service revenue

13.3

12.6

6%

53.3

49.3

8%

Total Revenue

$

200.9

$

199.6

1%

$

772.6

$

769.9

0%

Income Statement

Fiscal Fourth-Quarter

Fiscal Year

($ in millions)

2018

2017                (Restated)

% Change

2018

2017                (Restated)

% Change

Total Revenue

$

200.9

$

199.6

1%

$

772.6

$

769.9

0%

Gross Profit

155.2

157.1

(1%)

595.4

598.7

(1%)

Gross Margin

77.3

%

78.7

%

77.1

%

77.8

%

Operating Expenses

139.3

138.2

1%

476.7

550

(13%)

Operating Income

15.9

18.9

(16%)

118.7

48.7

144%

Operating Margin

7.9

%

9.5

%

15.4

%

6.3

%

Adjusted Operating Income

34.9

27.1

29%

110.4

95.7

15%

Adjusted Operating Margin

17.4

%

13.6

%

14.3

%

12.4

%

Net Income

13.1

12.3

7%

131.0

20.5

539%

Diluted EPS

0.18

0.18

0%

1.82

0.30

507%

Adjusted EPS

$

0.4

$

0.29

31%

$

1.2

$

1.03

17%

•

Revisions of Previously-Issued Financial Statements: During the financial close for fiscal year 2018, the Company determined that it had not fully reserved for its sales allowance for the financial periods from fiscal year 2015 through fiscal year 2018.  These errors which represented less than one percent of total revenue during that time frame were determined to be. The financial information for prior periods has been restated to reflect these adjustments.

•

Hereditary Cancer

o

Achieved sixth consecutive quarter of year-over-year hereditary cancer testing            volume growth.

o

Announced the second major clinical validation study for riskScore^® at the American Society of Clinical Oncology annual meeting. The study evaluated 518 women and found that riskScore is a highly statistically significant predictor of the 5-year and lifetime risk of breast cancer (p=2.6x10^-12 and p=2.5x10^-12, respectively).  Moreover, riskScore was

statistically significantly superior to Tyrer-Cuzick alone for both 5-year and lifetime risk of breast cancer (1.9x10^-8 and p=2.4x10^-8, respectively), underscoring the independent contribution of the combined test score.

o

Based upon recent changes to the National Comprehensive Cancer Network professional treatment guidelines for prostate, pancreatic and colon cancer, we estimate 121,000 additional cancer patients now qualify for hereditary cancer testing in the United States every year.

•

GeneSight^®

o

Fiscal fourth-quarter revenue increased 33 percent year-over-year to $33.9 million with record volumes in the quarter.

o

A record 15,000 physicians, including almost 3,000 new ordering doctors, ordered a GeneSight test in the fiscal fourth-quarter.

o

Presented the results from the GeneSight GUIDED randomized controlled trial at the American Psychiatric Association annual meeting. The landmark study showed that patients receiving GeneSight had significantly better outcomes with a 50 percent increase in remission rates and a 30 percent increase in response rates relative to standard-of-care therapy.

o

Announced the results of the IMPACT study at the American Society of Clinical Psychopharmacology annual meeting. In the study, patients treated by primary care physicians had 33 percent greater symptom improvement, 34 percent increased response and 57 percent greater remission than those treated by psychiatrists.

o

CareFirst^®, the 15^th largest commercial payer in the United States, announced a favorable coverage policy for GeneSight taking effect August 1, 2018 which included all physician specialties.

o

Announced a new coverage decision for GeneSight with a major U.S. company with 30,000 employees.

o

In late-stage negotiations with Kroger^® Prescription Plans on a potential favorable coverage decision for GeneSight.

•

Vectra DA^®

o

Fiscal fourth-quarter revenue increased 47 percent year-over-year to $15.1 million.

o

Announced a favorable coverage decision for Vectra DA from Kroger Prescription Plans, the pharmacy benefits manager for Kroger and other employers. Kroger is the fourth largest employer in the United States.

•

Prolaris^®

o

Fiscal fourth-quarter revenue increased 133 percent year-over-year to $7.0 million with record volumes in the quarter.

o

Received positive medical policy recommendations on Prolaris from eight commercial insurers, including a top-10 commercial insurer, and seven others, totaling over 20 million covered lives or 12 percent of total commercial lives in the United States. Prolaris is now covered for approximately 55 percent of prostate cancer patients in the United States.

•

EndoPredict^®

o

Fiscal fourth-quarter revenue increased 40 percent year-over-year to $2.8 million.

o

Received positive recommendation from the National Institute for Health and Care Excellence (NICE) in the United Kingdom to cover the EndoPredict test.

•

myPath^® Melanoma

o

Received positive medical policy recommendations on myPath Melanoma from eight commercial insurers.

•

Companion Diagnostics

o

Metastatic breast cancer patients tested by Myriad increased 13 percent sequentially based upon the recent launch of BRACAnalysis CDx as a companion diagnostic for Lynparza™.

o

Received pre-market approval from the Japanese Ministry of Health, Labor, and Welfare for our BRACAnalysis CDx test for HER2- metastatic breast cancer.

o

Announced positive results from Phase III, SOLO-1 study which evaluated patients with advanced ovarian cancer treated in the first-line setting who tested positive with Myriad’s BRACAnalysis CDx test.  Myriad intends to submit a supplementary pre-market approval (sPMA) to the U.S. Food and Drug Administration (FDA) for this indication.

o

Announced that the FDA has accepted Myriad’s sPMA application for BRACAnalysis CDx^® to be used as a companion diagnostic with Pfizer’s PARP inhibitor, talazoparib, in HER2- metastatic breast cancer.  The New Drug Application for talazoparib has been granted priority review by the U.S. FDA and has a Prescription Drug User Fee Act goal date of December 2018.

•

Closing of Counsyl Acquisition

o

Myriad signed a definitive agreement to acquire Counsyl, Inc., a global leader in reproductive genetic testing, which closed on July 31, 2018. The acquisition of Counsyl provides Myriad with two new products, ForeSight^TM and Prelude^TM, in the expanded carrier screening and non-invasive prenatal screening markets respectively. Myriad

estimates that these markets will grow to approximately 3 million tests performed annually in the United States and $1.5 billion of revenue over the next five years.

Revenue

GAAP Diluted Earnings Per Share

Adjusted Earnings Per Share

Fiscal Year 2019

$880-$890

million

$0.40-$0.45

$1.70-$1.75

Fiscal First-Quarter 2019

$200-$202

million

($0.08)-($0.06)

$0.28-$0.30

MYRIAD GENETICS, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS (Unaudited)

(in millions, except per share amounts)

Three months ended

Twelve months ended

June 30

June 30

2018

2017

2018

2017

(Restated)

(Restated)

Molecular diagnostic testing

$

187.6

$

187.0

$

719.3

$

720.6

Pharmaceutical and clinical services

13.3

12.6

53.3

49.3

Total revenue

200.9

199.6

772.6

769.9

Costs and expenses:

Cost of molecular diagnostic testing

38.0

35.6

148.7

145.2

Cost of pharmaceutical and clinical services

7.7

6.9

28.5

26.0

Research and development expense

17.7

18.8

70.8

74.4

Change in the fair value of contingent consideration

0.2

(2.7

)

(61.2

)

(0.8

)

Selling, general, and administrative expense

121.4

122.1

467.1

476.4

Total costs and expenses

185.0

180.7

653.9

721.2

Operating income

15.9

18.9

118.7

48.7

Other income (expense):

Interest income

0.5

0.3

1.8

1.2

Interest expense

(1.1

)

(1.2

)

(3.2

)

(6.0

)

Other

0.8

(0.1

)

(0.4

)

(3.0

)

Total other income (expense):

0.2

(1.0

)

(1.8

)

(7.8

)

Income before income tax

16.1

17.9

116.9

40.9

Income tax provision

3.0

5.8

(13.9

)

20.6

Net income

$

13.1

$

12.1

$

130.8

$

20.3

Net loss attributable to non-controlling interest

—

(0.2

)

(0.2

)

(0.2

)

Net income attributable to Myriad Genetics, Inc. stockholders

$

13.1

$

12.3

$

131.0

$

20.5

Earnings per share:

Basic

$

0.19

$

0.18

$

1.89

$

0.30

Diluted

$

0.18

$

0.18

$

1.82

$

0.30

Weighted average shares outstanding:

Basic

70.1

68.2

69.4

68.3

Diluted

72.9

68.9

72.0

68.8

Consolidated Balance Sheets (Unaudited)

(in millions)

June 30

June 30,

2018

2017

ASSETS

(Restated)

Current assets:

Cash and cash equivalents

$

110.9

$

102.4

Marketable investment securities

69.7

48.3

Prepaid expenses

9.4

12.7

Inventory

34.3

42.2

Trade accounts receivable, less allowance for doubtful

   accounts of $12.1 in 2018 and $7.6 in 2017

98.3

90.2

Prepaid taxes

—

0.2

Other receivables

3.8

5.7

Total current assets

326.4

301.7

Property, plant and equipment, net

43.2

51.1

Long-term marketable investment securities

30.7

48.5

Intangibles, net

455.2

491.5

Goodwill

318.6

316.1

Total assets

$

1,174.1

$

1,208.9

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

26.0

$

22.0

Accrued liabilities

68.3

65.6

Short-term contingent consideration

5.3

127.3

Deferred revenue

2.6

2.6

Total current liabilities

102.2

217.5

Unrecognized tax benefits

24.9

25.2

Other long-term liabilities

6.3

7.2

Contingent consideration

9.2

13.2

Long-term debt

9.3

99.1

Long-term deferred taxes

57.3

78.7

Total liabilities

209.2

440.9

Commitments and contingencies

Stockholders’ equity:

Common stock, 70.6 and 68.4 shares outstanding at June 30, 2018 and

   June 30, 2017 respectively

0.7

0.7

Additional paid-in capital

915.4

851.4

Accumulated other comprehensive income (loss)

(4.0

)

(5.5

)

Retained earnings (deficit)

52.8

(78.2

)

Total Myriad Genetics, Inc. stockholders’ equity

964.9

768.4

Non-Controlling Interest

—

(0.4

)

Total stockholders' equity

964.9

768.0

Total liabilities and stockholders’ equity

$

1,174.1

$

1,208.9

Consolidated Statement of Cash Flows (Unaudited)

(in millions)

Twelve months ended

June 30,

2018

2017

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income attributable to Myriad Genetics, Inc. stockholders

$

131.0

20.5

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

54.4

48.3

Non-cash interest expense

0.2

0.4

Loss (gain) on disposition of assets

(0.2

)

(0.3

)

Share-based compensation expense

27.1

29.9

Impairment of cost basis investment

—

2.4

Bad debt expense

32.3

37.3

Loss on extinguishment of debt

—

1.3

Deferred income taxes

(23.4

)

0.8

Unrecognized tax benefits

(0.3

)

1.2

Change in fair value of contingent consideration

(60.9

)

(0.8

)

Payment of contingent consideration

(22.7

)

—

Changes in assets and liabilities:

Prepaid expenses

3.3

7.8

Trade accounts receivable

(39.2

)

(39.9

)

Other receivables

1.1

(4.0

)

Inventory

7.9

(1.2

)

Prepaid taxes

—

3.4

Accounts payable

4.0

(3.0

)

Accrued liabilities

1.4

1.2

Deferred revenue

(0.1

)

0.9

Net cash provided by operating activities

115.9

106.2

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(8.4

)

(6.1

)

Acquisitions, net of cash acquired

—

(216.1

)

Sale of cost basis investment

—

2.6

Purchases of marketable investment securities

(80.9

)

(87.5

)

Proceeds from maturities and sales of marketable investment securities

77.7

160.8

Net cash used in investing activities

(11.6

)

(146.3

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from common stock issued under share-based compensation plans

36.9

6.0

Net proceeds from revolving credit facility

53.0

204.0

Repayment of revolving credit facility

(143.0

)

(105.0

)

Net proceeds from term loan

—

199.0

Payment of contingent consideration recorded in purchase accounting

(42.4

)

—

Repayment of term loan

—

(200.0

)

Fees paid for extinguishment of debt

—

(0.6

)

Repurchase and retirement of common stock

—

(31.6

)

Proceeds from non-controlling interest

0.5

—

Net cash provided by (used in) financing activities

(95.0

)

71.8

Effect of foreign exchange rates on cash and cash equivalents

(0.8

)

2.2

Net increase (decrease) in cash and cash equivalents

8.5

33.9

Cash and cash equivalents at beginning of the period

102.4

68.5

Cash and cash equivalents at end of the period

$

110.9

$

102.4

•

Acquisition – amortization of intangible assets: Represents recurring amortization charges resulting from the acquisition of intangible assets, including developed technology and database rights.

•

Acquisition – integration related costs: Costs related to closing and integration of acquired companies

•

Non-recurring legal expenses: One-time non-recurring legal settlements

•

Tax impact related to equity compensation: Changes in effective tax rate based upon ASU 2016-09

•

Potential future consideration related to acquisitions: Non-cash expenses related to valuation adjustments of earn-out and milestone payments tied to recent acquisitions

•

Impairment of Raindance Investment: One-time impairment charge associated with Myriad’s investment in Raindance Technologies

•

One-time debt restructuring costs: Charges related to the restructuring of the company’s debt from a one-year term loan to a revolving credit facility

•

One-time non-deductible costs: One-time non-deductible tax items

•

Tax reform impact on deferred taxes: One-time non-cash charges associated with change in value of our deferred tax assets due to tax reform

•

Elevate 2020 costs: Expenses tied to Elevate 2020 program

•

Non-recurring bad debt reserve: Changes in bad debt reserve tied to prior period adjustments

Reconciliation of GAAP to Non-GAAP Financial Measures

for the Three and Twelve Months ended June 30, 2018

(Unaudited data in millions, except per share amount)

Three Months Ended

Twelve Months Ended

Jun 30, 2018

Jun 30, 2017

Jun 30, 2018

Jun 30, 2017

(Restated)

(Restated)

Revenue

$

200.9

$

199.6

$

772.6

$

769.9

GAAP Cost of molecular diagnostic testing

38.0

35.6

148.7

145.2

GAAP Cost of pharmaceutical and clinical services

7.7

6.9

28.5

26.0

Acquisition - Integration related costs

—

—

—

(0.1

)

Elevate 2020 costs

(2.8

)

—

(3.0

)

—

Non-GAAP COGS

$

42.9

$

42.5

$

174.2

$

171.1

Non-GAAP Gross Margin

79

%

79

%

77

%

78

%

GAAP Research and Development

$

17.7

$

18.8

$

70.8

$

74.4

Acquisition - Integration related costs

—

(0.1

)

(0.1

)

(0.2

)

Acquisition - amortization of intangible assets

(0.1

)

(0.1

)

(0.3

)

(0.3

)

Elevate 2020 costs

(0.7

)

—

(1.8

)

—

Non-GAAP R&D

$

16.9

$

18.6

$

68.6

$

73.9

GAAP Contingent Consideration

$

0.2

$

(2.7

)

$

(61.2

)

$

(0.8

)

Potential future consideration related to acquisitions

(0.2

)

2.7

61.2

0.8

Non-GAAP Contingent Consideration

$

—

$

—

$

—

$

—

GAAP Selling, General and Administrative

$

121.4

$

122.1

$

467.1

$

476.4

Acquisition - Integration related costs

(0.6

)

(0.7

)

(0.9

)

(13.6

)

Acquisition - amortization of intangible assets

(9.1

)

(9.1

)

(36.6

)

(32.7

)

Non-recurring bad debt reserve

(2.5

)

—

(2.5

)

—

Non-recurring legal expenses

(0.5

)

(0.6

)

(0.5

)

(0.6

)

Elevate 2020 costs

(2.5

)

(0.3

)

(7.2

)

(0.3

)

Non-GAAP SG&A

$

106.2

$

111.4

$

419.4

$

429.2

GAAP Operating Income

$

15.9

$

18.9

$

118.7

$

48.7

Acquisition - Integration related costs

0.6

0.8

1.0

13.9

Acquisition - amortization of intangible assets

9.2

9.2

36.9

33.0

Non-recurring bad debt reserve

2.5

—

2.5

—

Non-recurring legal expenses

0.5

0.6

0.5

0.6

Elevate 2020 costs

6.0

0.3

12.0

0.3

Potential future consideration related to acquisitions

0.2

(2.7

)

(61.2

)

(0.8

)

Non-GAAP Operating Income

$

34.9

$

27.1

$

110.4

$

95.7

Non-GAAP Operating Margin

17

%

14

%

14

%

12

%

GAAP Net Income Attributable to Myriad Genetics, Inc. Stockholders

$

13.1

$

12.3

$

131.0

$

20.5

Acquisition - Integration related costs

0.6

0.8

1.0

13.9

Acquisition - amortization of intangible assets

9.2

9.2

36.9

33.0

Non-recurring bad debt reserve

2.5

—

2.5

—

Non-recurring legal expenses

0.5

0.6

0.5

0.6

Elevate 2020 costs

6.0

0.3

12.0

0.3

Potential future consideration related to acquisitions

0.2

(2.7

)

(61.2

)

(0.8

)

Tax impact related to equity compensation

(0.1

)

0.1

(0.4

)

3.0

One-time debt restructuring costs

—

—

—

1.3

One-time non-deductible costs

—

—

—

2.7

Tax reform effect

(1.8

)

—

(32.0

)

—

Impairment of Raindance Investment

—

—

—

2.4

Tax effect associated with non-GAAP adjustments

(2.6

)

(0.4

)

(4.2

)

(5.8

)

Non-GAAP Net Income

$

27.6

$

20.2

$

86.1

$

71.1

GAAP Diluted EPS

$

0.18

$

0.18

$

1.82

$

0.30

Non-GAAP Diluted EPS

$

0.38

$

0.29

$

1.20

$

1.03

Diluted shares outstanding

72.9

68.9

72.0

68.8

Free Cash Flow Reconciliation

(Unaudited data in millions)

Three Months Ended

Twelve Months Ended

Jun 30, 2018

Jun 30, 2017

Jun 30, 2018

Jun 30, 2017

(Restated)

(Restated)

GAAP cash flow from operations

$

47.9

$

36.6

$

115.9

$

106.2

Capital expenditures

(1.8

)

(0.7

)

(8.4

)

(6.1

)

Free cash flow

$

46.1

$

35.9

$

107.5

$

100.1

Elevate 2020 costs

3.7

0.3

9.7

0.3

Acquisition - Integration related costs

0.6

0.8

—

8.7

Cash paid for contingent consideration in operating cash flows

1.9

—

22.7

—

Cash paid at closing to Assurex vendors

—

—

—

6.8

Accrual for legal expenses

—

0.6

—

0.6

Tax effect associated with non-GAAP adjustments

(1.7

)

(0.6

)

(9.1

)

(5.7

)

Non-GAAP Free cash flow

$

50.6

$

37.0

$

130.8

$

110.8

Fiscal Year 2019

Diluted net income per share

GAAP diluted net income per share

$0.40- $0.45

Stock Based Compensation Expense

0.30

Acquisition - amortization of intangible assets

0.80

One-time expenses

0.20

Non-GAAP diluted net income per share

$1.70 - $1.75

Fiscal First-Quarter 2019

Diluted net income per share