Forward-looking statements
Some of the statements made in this Report or in the documents incorporated
by reference in this Report and in other materials filed or to be filed by us
with the
Further information regarding our risks and uncertainties are contained in
Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year
ended
General
Critical accounting policies
A description of our critical accounting policies is provided in Management's
Discussion and Analysis of Financial Condition and Results of Operations in our
Annual Report on Form 10-K for the year ended
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Quarter ended
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
Percentage of Revenue Quarter- Quarter Ended December 31 to-Quarter Change 2020 2019 Revenue Product sales 96.9 % 95.3 % 2.8 % Contract research and development 3.1 % 4.7 % (33.8 )% Total revenue 100.0 % 100.0 % 1.1 % Cost of sales 16.5 % 19.5 % (14.9 )% Gross profit 83.5 % 80.5 % 5.0 % Expenses Research and development 10.7 % 12.0 % (9.0 )% Selling, general, and administrative 4.8 % 5.1 % (5.1 )% Total expenses 15.5 % 17.1 % (7.8 )% Income from operations 68.0 % 63.4 % 8.4 % Interest income 5.6 % 6.9 % (17.6 )% Income before taxes 73.6 % 70.3 % 5.8 % Provision for income taxes 13.5 % 12.6 % 8.6 % Net income 60.1 % 57.7 % 5.2 %
Total revenue for the quarter ended
Gross profit margin increased to 84% of revenue for the third quarter of fiscal 2021 compared to 80% of revenue for the third quarter of fiscal 2020 due to a more profitable revenue mix.
Total expenses decreased 8% in the third quarter of fiscal 2021 compared to the third quarter of fiscal 2020 due to a 9% decrease in research and development expense and a 5% decrease in selling, general, and administrative expense. The decrease in research and development expense was primarily due to the completion of certain product development activities. The decrease in selling, general, and administrative expense was primarily due to staffing changes.
Interest income for the third quarter of fiscal 2021 decreased 18% due to a decrease in our marketable securities and money market funds and a decrease in the average interest rates on those securities and funds.
The 5% increase in net income in the third quarter of fiscal 2021 compared to the prior-year quarter was primarily due to increased product sales, increased gross profit margin, and decreased expenses, partially offset by decreased contract research and development revenue and decreased interest income.
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Nine months ended
The table shown below summarizes the percentage of revenue and period-to-period changes for various items:
Percentage of Revenue Period- Nine Months Ended Dec. 31 to-Period Change 2020 2019 Revenue Product sales 95.8 % 95.7 % (19.4 )% Contract research and development 4.2 % 4.3 % (21.0 )% Total revenue 100.0 % 100.0 % (19.5 )% Cost of sales 18.4 % 19.2 % (22.9 )% Gross profit 81.6 % 80.8 % (18.7 )% Expenses Research and development 15.5 % 13.9 % (10.2 )% Selling, general, and administrative 6.6 % 5.3 % (0.2 )% Total expenses 22.1 % 19.2 % (7.4 )% Income from operations 59.5 % 61.6 % (22.2 )% Interest income 7.5 % 7.0 % (14.2 )% Income before taxes 67.0 % 68.6 % (21.4 )% Provision for income taxes 11.8 % 10.7 % (11.0 )% Net income 55.2 % 57.9 % (23.3 )%
Total revenue for the nine months ended
The decrease in product sales from the prior-year period was due to decreased purchase volumes by existing customers. The decrease in contract research and development revenue was due to the completion of certain contracts.
Total expenses decreased 7% for the first nine months of fiscal 2021 compared to the first nine months of fiscal 2020 primarily due to a 10% decrease in research and development expense. The decrease in research and development expense was due to the completion of certain product development activities.
Interest income for the first nine months of fiscal 2021 decreased 14% due to a decrease in our marketable securities and money market funds and a decrease in the average interest rates on those securities and funds.
The 23% decrease in net income in the first nine months of fiscal 2021 compared to the prior-year period was primarily due to a decrease in revenue.
The Impact of the COVID-19 Pandemic
The pandemic had a significant impact on total revenue and net income for the
nine months ended
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Liquidity and Capital Resources Overview
Cash and cash equivalents were
Investing Activities
Cash provided by investing activities in the nine months ended
Financing Activities
We paid
We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.
Off-Balance-Sheet Arrangements
Our off-balance sheet arrangements consist of purchase commitments. We believe such arrangements have no material current or anticipated future effect on our profitability, cash flows, or financial position.
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