TMCnet News
Recro Reports Second Quarter 2021 Financial ResultsQ2 2021 Highlighted by Revenues of $18.0 Million, an Increase of 16% Compared to Q2 2020 Revenue Multiple New Business Agreements Continue to Expand and Diversify Customer Base and Pipeline Company Closes Public Financing Raising Net Proceeds of $32.1 Million Company to Host Conference Call Today at 4:30 p.m. ET EXTON, Pa., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Recro Pharma, Inc. (“Recro”; NASD:REPH), a dedicated contract development and manufacturing organization (CDMO) solving complex formulation and manufacturing challenges for companies developing oral solid dose drug products, today reported financial results for the second quarter and six months ended June 30, 2021. “This is a very exciting time at Recro, and today, the company is pleased to report strong second quarter earnings. During the quarter, with the addition of new projects for Astex Pharmaceuticals and Ensysce Biosciences, as well as a new unnamed customer, we continued to expand and diversify our customer base, reduce our portfolio concentration risk, strengthen both our top-line and margins, and continue to generate strong positive cash flow as we progress toward long-term profitability,” said David Enloe, president and chief executive officer. “Recro also significantly strengthened its financial position during the period with the closing of an oversubscribed underwritten public offering in May that raised net proceeds of $32.1 million. These funds, combined with two prior amendments to the company’s outstanding credit facility during 2021 with Athyrium, have fortified our cash position and improved our debt covenants. “And finally, during and subsequent to the second quarter, the company continued to expand and enhance the business through leadership and talent. In June, Recro announced the appointment of Laura L. Parks, Ph.D. to its board of directors. Laura is an experienced business leader with a track record of developing high performance, market-focused teams at a number of leading global biopharma, CDMO and food industry companies. In July, Recro announced the appointment of Erica Raether as the company’s inaugural vice president of people, culture and ESG (“environmental, social and governance”). Erica has 20 years of human resources leadership experience within the biotech and medical device industries focused on creating and executing innovative strategies that drive employee engagement, advance ESG objectives and achieve operational goals. We are very pleased to have Laura and Erica on board at Recro, and we expect both of these appointments to make significant contributions to the organization in the future. “In closing, I believe the last six months, and Q2 in particular, have been validating for the company. We continue to execute our newly implemented strategy and have seen early and impressive results. Our team continues to grow, bringing superb CDMO experience and other talent critical to building an exceptional organization. Today, we have a stronger, more diverse customer base and a portfolio spanning the entire biopharma product life cycle, from preclinical projects to mature commercial programs. Our financial status has improved significantly since the end of fiscal 2020 with the completion of a successful financing, and the restructuring and reduction of the company’s outstanding debt. And finally, we continue to make progress enhancing the company’s capabilities and competencies, which will to be critical to our efforts to drive continued growth of our business, both through organic and inorganic activities.” Second Quarter 2021 and Other Recent Highlights Strengthened leadership and organizational improvements:
New business growth:
Other corporate and financial developments:
Financial Results for the Three Months Ended June 30, 2021 At June 30, 2021, Recro had cash and cash equivalents of $45.7 million compared to $23.8 million as of the end of the prior fiscal year. The increase in cash is primarily due to the net proceeds of $32.1 million from an underwritten public offering that closed in May 2021. Revenues for the quarter ended June 30, 2021 were $18.0 million. This represents a 7% increase compared to the first quarter of 2021, and a 16% increase compared to revenues of $15.5 million recorded during the prior year period. The year-over-year increase was primarily the result of increased product sales from one of our commercial partners as well as higher revenues from our clinical trial materials business, including revenue from a new commercial product tech transfer project. Cost of sales for the quarter ended June 30, 2021 was $12.3 million compared to $11.6 million for the comparable period of 2020. The increase of $0.7 million was primarily due to higher commercial manufacturing volumes partially offset by lower costs due to certain employment incentive tax credits in 2021. Selling, general and administrative expenses for the second quarter were $3.8 million, compared to $4.3 million recorded in the 2020 period. The decrease of $0.5 million was primarily related to lower public company costs and stock based compensation expense. Interest expense was $4.0 million for the three months ended June 30, 2021, a decrease compared to $5.0 million for the comparable period of 2020. The decrease of $1.0 million was primarily due to reduced term loan borrowings under the Credit Agreement with Athyrium, as reported last quarter, as well as a decrease in the LIBOR base rate of interest on our term loans under the Credit Agreement. For the quarter ended June 30, 2021, the company recorded a net income of $1.2 million or $0.03 per diluted share, as compared to a net loss of $6.0 million or $0.25 per diluted share, for the comparable period of 2020. EBTIDA, as adjusted* for the period was $5.4 million compared to $4.7 million in the prior year period. Financial Results for the Six Months Ended June 30, 2021 Revenue for the six months ended June 30, 2021 was $34.8 million, compared to $37.3 million for the same period in 2020. The decrease of $2.5 million in revenue was primarily the result of the discontinuation of two commercial product lines by our commercial partners announced in the first quarter of 2020. During the 2021 period, increased product sales from two of our commercial partners as well as higher revenues from our clinical trial materials business, partially offset the decrease. Cost of sales for the six months ended June 30, 2021 was $26.7 million, compared to $29.9 million for the same period in 2020. The cost of sales decrease of $3.2 million, was primarily due to lower commercial manufacturing volumes and reflects lower costs due to the prior year reduction in force as well as certain employment incentive tax credits in 2021. Selling, general and administrative expenses for the six months ended June 30, 2021 were $8.5 million, compared to $9.7 million for the same period in 2020. The decrease of $1.2 million was primarily related to lower public company costs and stock based compensation expense. Interest expense was $7.8 million and $10.1 million during the six months ended June 30, 2021 and 2020, respectively. The decrease of $2.3 million was primarily due to reduced term loan borrowings under the Credit Agreement with Athyrium as well as a decrease in the LIBOR base rate of interest on our term loans under the Credit Agreement. For the six months ended June 30, 2021, Recro reported a net loss of $5.5 million, or $0.16 per diluted share, compared to a net loss of $13.7 million, or $0.58 per diluted share, for the comparable period in 2020. EBTIDA, as adjusted* for the period was $8.1 million compared to $7.4 million in the prior year period. *EBITDA, as adjusted is a non-GAAP financial measure (see reconciliation of non-GAAP financial measures in this release). Non-GAAP Financial Measures To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have certain non-GAAP information for our business, including EBITDA, as adjusted. We believe this non-GAAP financial measure is helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. This measure is used by investors, as well as management in assessing our performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. Please see the section of this press release titled “Reconciliation of GAAP to Non-GAAP Financial Measures” for a reconciliation of non-GAAP adjusted EBITDA to its most directly comparable GAAP measure. Conference call and webcast Recro management will be hosting a conference call and webcast today beginning at 4:30 p.m. ET. To access the conference call, please dial (844) 243-4691 (local) or (225) 283-0379 (international) at least 10 minutes prior to the start time and refer to conference ID 1658678. A live audio webcast of the call will be available under "Events" in the Investor section of the company's website, https://ir.recropharma.com/events. An archived webcast will be available on the company's website approximately two hours after the event and will be available for 30 days. About Recro Recro (NASD: REPH) is a contract development and manufacturing organization (CDMO) with capabilities from early feasibility to commercial manufacturing. With an expertise in solving complex manufacturing problems, Recro is a CDMO providing oral solid dosage form development, end-to-end regulatory support, clinical and commercial manufacturing, and packaging and logistics services to the global pharmaceutical market. In addition to our experience in handling DEA controlled substances and developing and manufacturing modified release oral solid dosage forms, Recro has the expertise to deliver on our clients’ pharmaceutical development and manufacturing projects, regardless of complexity level. We do all of this in our best-in-class facilities, which total 120,000 square feet, in Gainesville, Georgia. For more information about Recro’s CDMO solutions, visit recrocdmo.com. Cautionary statement regarding forward looking statements RECRO PHARMA, INC. AND SUBSIDIARIES
RECRO PHARMA, INC. AND SUBSIDIARIES
RECRO PHARMA, INC. AND SUBSIDIARIES To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have disclosed in the tables below the following non-GAAP information about EBITDA, as adjusted. EBITDA, as adjusted, is net income or loss as determined under GAAP excluding interest, depreciation, amortization, non-cash stock-based compensation and charges related to reductions in force as well as the impact of Accounting Standards Update 2014-09 in order to remove the impact of the timing of revenue recognized from profit-sharing arrangements upon transfer of control of the product, which more closely aligns revenue with expected cash receipt. We believe that non-GAAP financial measures are helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. EBITDA, as adjusted, is used by investors, as well as management in assessing our performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. Second quarter results
First half results
Full year guidance
Contacts Stephanie Diaz (Investors) Vida Strategic Partners (415) 675-7401 [email protected] Tim Brons (Media) Vida Strategic Partners (415) 675-7402 [email protected] Ryan D. Lake (CFO) Recro (770) 531-8365 [email protected] |