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
13
--------------------------------------------------------------------------------
Table of Contents
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 2022 2021 Change Revenue Product sales 97.3 % 94.1 % 21.7 % Contract research and development 2.7 % 5.9 % (46.2) % Total revenue 100.0 % 100.0 % 17.7 % Cost of sales 20.0 % 22.0 % 6.7 % Gross profit 80.0 % 78.0 % 20.7 % Expenses Research and development 9.5 % 9.5 % 17.5 % Selling, general, and administrative 5.4 % 4.3 % 48.2 % Total expenses 14.9 % 13.8 % 27.1 % Income from operations 65.1 % 64.2 % 19.4 % Interest income 5.5 % 4.5 % 43.0 % Income before taxes 70.6 % 68.7 % 20.9 % Provision for income taxes 13.4 % 13.6 % 16.2 % Net income 57.2 % 55.1 % 22.1 %
Total revenue for the quarter ended
Gross profit as a percentage of revenue increased to 80% for the third quarter of fiscal 2023 from 78% for the third quarter of fiscal 2022. The increase was primarily due to increased prices and economies of scale due to increased revenue, partially offset by increased costs.
Total expenses increased 27% for the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022 due to an 18% increase in research and development expense and a 48% increase in selling, general, and administrative expense. The increases in expenses were primarily due to increased employee compensation expenses and increased staffing.
Interest income for the third quarter of fiscal 2023 increased 43% due to an increase in our available-for-sale securities and an increase in their average interest rate.
The 22% increase in net income in the third quarter of fiscal 2023 compared to the prior-year quarter was primarily due to increased revenue and increased interest income, partially offset by increased expenses.
14
--------------------------------------------------------------------------------
Table of Contents
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 December 31 , to-Period 2022 2021 Change Revenue Product sales 97.4 % 96.2 % 27.1 % Contract research and development 2.6 % 3.8 % (12.9) % Total revenue 100.0 % 100.0 % 25.6 % Cost of sales 21.7 % 23.2 % 17.8 % Gross profit 78.3 % 76.8 % 28.0 % Expenses Research and development 7.7 % 10.4 % (6.6) % Selling, general, and administrative 4.8 % 6.0 % (0.9) % Total expenses 12.5 % 16.4 % (4.5) % Income from operations 65.8 % 60.4 % 36.8 % Interest income 4.1 % 4.2 % 19.8 % Income before taxes 69.9 % 64.6 % 35.7 % Provision for income taxes 13.1 % 11.8 % 37.6 % Net income 56.8 % 52.8 % 35.3 %
Total revenue for the nine months ended
Gross profit as a percentage of revenue increased to 78% for the first nine months of fiscal 2023 from 77% for the first nine months of fiscal 2022. The increase was primarily due to increased prices and economies of scale due to increased revenue, partially offset by increased costs.
Total expenses decreased 5% for the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022 due to an 7% decrease in research and development expense and a 1% decrease in selling, general, and administrative expense. The decrease in research and development expense was primarily due to the reallocation of resources to revenue-generating activities.
Interest income for the first nine months of fiscal 2023 increased 20% due to an increase in our available-for-sale securities and an increase in their average interest rate.
The 35% increase in net income in the first nine months of fiscal 2023 compared to the prior-year period was primarily due to increased revenue and increased interest income.
Supply Chain Disruptions
Supply chain disruptions may have favorably affected product sales in the
quarter and nine months ended
15
--------------------------------------------------------------------------------
Table of Contents
Liquidity and Capital Resources
Overview
Cash and cash equivalents were
Operating Activities
Net cash provided by operating activities related to product sales and research
and development contract revenue as our primary source of working capital for
the current and prior-year quarters. Net cash provided by operating activities
was
Accounts receivable decreased
Inventories increased
Investing Activities
Cash used by investing activities during the nine months ended
Financing Activities
Cash used in financing activities during the nine months ended
In addition to cash dividends to shareholders paid in third quarter of fiscal
2023, on
We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company's results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.
16
--------------------------------------------------------------------------------
Table of Contents
© Edgar Online, source