•

Test Volumes Improved Meaningfully By the End of the Fourth Quarter Following Substantial Declines in March and April Due to the Initiation of Social Distancing Policies

•

Total Fourth-Quarter Revenues of $93.2 Million

•

Fourth-Quarter Diluted EPS of ($0.74) and Adjusted EPS of ($0.31)

o

While test volumes were detrimentally impacted by the global pandemic, the company saw a significant recovery in overall test volume in the quarter. Averaged across our tests, volumes ended the quarter at approximately 75 percent of their pre-pandemic level.

o

Generated revenue of $93.2 million in the fiscal fourth-quarter 2020 and reduced total non-GAAP expenses by approximately $41 million from the prior quarter.  

o

Total cash and cash equivalents and marketable securities increased sequentially in the fiscal fourth quarter to $254.8 million.

o

Received a final local coverage determination (LCD) for pharmacogenomic (PGx) testing by Palmetto GBA and CGS Administrators, LLC, two of the administrative contractors for the Centers for Medicare & Medicaid Services. The new LCD expands coverage for patients to all healthcare providers licensed and qualified to diagnose the condition and prescribe relevant medications (either independently or in an arrangement).

o

Published a new study for riskScore^® in the Journal of the American Medical Association Network Open demonstrating the ability of Myriad’s polygenic risk score to modify breast cancer risk stratification in women diagnosed with pathogenic mutations in common breast cancer genes.

o

Announced a new collaboration with OptraHEALTH^® to implement a cognitive ChatBOT named Gene^™ which provides genetic and financial assistance information to prospective patients with the ability to answer over 500,000 health related questions. 

o

Launched our proprietary AMPLIFY technology which increases maternal fetal fraction an average of 2.3 times and further increases the already market-leading accuracy of our Prequel^® non-invasive prenatal screening test.

o

Published a new study in Genetics in Medicine comprising over 93,000 patients which showed the challenges associated with ethnicity-based guidelines for carrier screening used by both the American College of Medical Genetics and the American College of Gynecology. In the study, following ethnicity-based guidelines from ACOG and ACMG would have resulted in 77 percent of carriers of severe genetic disease being missed.

o

Launched a new radiographic progression (RP) enhancement tool for the Vectra^® test report that is personalized based on the age, gender and adiposity of the patient.  The new test report will provide individual risk of a patient’s risk of RP within one year.

o

Received favorable coverage decisions for Prolaris^® from four new commercial health plans

including one of the top five national providers of health insurance. In aggregate the new health plans represent 26 million covered lives.

o

Received U.S. Food and Drug Administration (FDA) approval for the myChoice CDx^® test for use as a companion diagnostic by healthcare professionals to identify advanced ovarian cancer patients with positive homologous recombination deficiency status, who are eligible or may become eligible, for first-line maintenance treatment with Lynparza (olaparib) in combination with bevacizumab.

Revenue by Product:

Fiscal Fourth Quarter

Fiscal Year

($ in millions)

2020

2019

% Change

2020

2019

% Change

Molecular diagnostic testing revenue

Hereditary Cancer

$

39.9

$

119.0

(66%)

$

347.4

$

479.7

(28%)

GeneSight^®

8.5

29.8

(71%)

74.1

112.6

(34%)

Prenatal

16.6

25.0

(34%)

76.7

104.9

(27%)

Vectra^®

7.2

12.2

(41%)

39.1

48.3

(19%)

Prolaris^®

4.5

6.3

(29%)

24.7

25.5

(3%)

EndoPredict^®

2.2

3.0

(27%)

10.5

10.4

1%

Other testing revenue

4.4

1.6

175%

14.4

8.0

80%

Total molecular diagnostic testing revenue

83.3

196.9

(58%)

586.9

789.4

(26%)

Pharmaceutical and clinical service revenue

9.9

18.5

(46%)

51.7

61.7

(16%)

Total Revenue

$

93.2

$

215.4

(57%)

$

638.6

$

851.1

(25%)

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,

2020

2019

2020

2019

Molecular diagnostic testing

$

83.3

$

196.9

$

586.9

$

789.4

Pharmaceutical and clinical services

9.9

18.5

51.7

61.7

Total revenue

93.2

215.4

638.6

851.1

Costs and expenses:

Cost of molecular diagnostic testing

32.2

41.6

157.5

168.2

Cost of pharmaceutical and clinical services

4.5

9.0

28.6

32.8

Research and development expense

17.4

20.9

77.2

85.9

Change in the fair value of contingent consideration

—

(0.3

)

(2.8

)

1.1

Selling, general, and administrative expense

107.4

149.8

510.1

555.5

Goodwill and intangible asset impairment charges

—

—

99.7

—

Total costs and expenses

161.5

221.0

870.3

843.5

Operating income (loss)

(68.3

)

(5.6

)

(231.7

)

7.6

Other income (expense):

Interest income

0.5

0.9

3.0

3.2

Interest expense

(3.1

)

(3.2

)

(10.8

)

(12.0

)

Other

12.4

0.2

16.2

1.2

Total other income (expense):

9.8

(2.1

)

8.4

(7.6

)

Income (loss) before income tax

(58.5

)

(7.7

)

(223.3

)

0.0

Income tax benefit

(3.0

)

(3.4

)

(23.7

)

(4.4

)

Net income (loss)

$

(55.5

)

$

(4.3

)

$

(199.6

)

$

4.4

Net loss attributable to non-controlling interest

(0.1

)

(0.1

)

(0.1

)

(0.2

)

Net income (loss) attributable to Myriad Genetics, Inc. stockholders

$

(55.4

)

$

(4.2

)

$

(199.5

)

$

4.6

Earnings (loss) per share:

Basic

$

(0.74

)

$

(0.06

)

$

(2.69

)

$

0.06

Diluted

$

(0.74

)

$

(0.06

)

$

(2.69

)

$

0.06

Weighted average shares outstanding:

Basic

74.6

73.4

74.3

73.5

Diluted

74.6

74.8

74.3

76.0

Consolidated Balance Sheets (Unaudited)

(in millions)

June 30,

June 30,

ASSETS

2020

2019

Current assets:

Cash and cash equivalents

$

163.7

$

93.2

Marketable investment securities

54.1

43.7

Prepaid expenses

13.8

16.6

Inventory

29.1

31.4

Trade accounts receivable

68.1

133.9

Prepaid taxes

—

25.1

Other receivables

2.9

4.7

Total current assets

331.7

348.6

Property, plant and equipment, net

37.0

57.3

Operating lease right-of-use assets

66.0

—

Long-term marketable investment securities

37.0

54.9

Intangibles, net

605.3

684.7

Goodwill

327.6

417.2

Total assets

$

1,404.6

$

1,562.7

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

21.7

$

33.3

Accrued liabilities

75.9

78.9

Current maturities of operating lease liabilities

13.5

—

Short-term contingent consideration

3.1

3.4

Deferred revenue

32.8

2.2

Total current liabilities

147.0

117.8

Unrecognized tax benefits

23.5

21.7

Noncurrent operating lease liabilities

56.9

—

Other long-term liabilities

4.3

7.8

Contingent consideration

3.7

10.4

Long-term debt

224.4

233.5

Long-term deferred taxes

26.6

82.6

Total liabilities

486.4

473.8

Commitments and contingencies

Stockholders’ equity:

Common stock, 74.7 and 73.5 shares outstanding at June 30, 2020 and

   June 30, 2019 respectively

0.7

0.7

Additional paid-in capital

1,096.6

1,068.0

Accumulated other comprehensive loss

(5.2

)

(5.4

)

Retained earnings (accumulated deficit)

(173.9

)

25.6

Total Myriad Genetics, Inc. stockholders’ equity

918.2

1,088.9

Non-Controlling Interest

—

—

Total stockholders' equity

918.2

1,088.9

Total liabilities and stockholders’ equity

$

1,404.6

$

1,562.7

Consolidated Statement of Cash Flows (Unaudited)

(in millions)

Twelve months ended

June 30,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) attributable to Myriad Genetics, Inc. stockholders

$

(199.5

)

$

4.6

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

72.0

73.0

Non-cash interest expense

0.5

0.4

Gain on deconsolidation of subsidiary

(1.0

)

—

Gain on disposition of assets

—

(0.9

)

Share-based compensation expense

25.2

33.5

Deferred income taxes

(55.8

)

18.6

Unrecognized tax benefits

1.7

(5.5

)

Impairment of goodwill and intangible assets

99.7

0.0

Change in fair value of contingent consideration

2.8

(1.4

)

Payment of contingent consideration

—

(1.5

)

Changes in assets and liabilities:

Prepaid expenses

2.2

(3.2

)

Trade accounts receivable

64.0

(18.2

)

Other receivables

0.6

(0.7

)

Inventory

1.6

8.0

Prepaid taxes

25.1

(25.1

)

Accounts payable

(10.7

)

1.1

Accrued liabilities

1.6

1.5

Deferred revenue

30.7

(0.5

)

Net cash provided by operating activities

60.7

83.7

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(10.2

)

(8.6

)

Acquisitions, net of cash acquired

—

(278.5

)

Proceeds from sale of subsidiary

21.3

—

Purchases of marketable investment securities

(60.8

)

(78.5

)

Proceeds from maturities and sales of marketable investment securities

69.0

79.2

Net cash provided by (used in) investing activities

19.3

(286.4

)

CASH FLOWS FROM FINANCING ACTIVITIES:

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

3.5

8.7

Net proceeds from revolving credit facility

—

340.0

Repayment of revolving credit facility

(8.6

)

(115.0

)

Payment of contingent consideration recognized at acquisition

(3.9

)

—

Fees associated with refinancing of revolving credit facility

(1.0

)

(1.4

)

Repurchase and retirement of common stock

—

(50.0

)

Net cash provided by (used in) financing activities

(10.0

)

182.3

Effect of foreign exchange rates on cash and cash equivalents

0.5

2.7

Net increase (decrease) in cash and cash equivalents

70.5

(17.7

)

Cash and cash equivalents at beginning of the period

93.2

110.9

Cash and cash equivalents at end of the period

$

163.7

$

93.2

•

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

•

Equity compensation – non-cash equity-based compensation provided to Myriad employees

•

Deferred Tax impact of non-GAAP adjustments - Changes in effective tax rate based upon ASU 2016-09 and the deferred tax impact of non-deductible acquisition costs

•

Non-recurring legal expenses – one-time legal expenses tied to non-recurring events

•

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

•

COVID-19 costs - One time expenses associated with the COVID-19 global pandemic

•

Sale of entities – One time gain on disposition of German clinic pension

•

Settlement of Hereditary Cancer Qui Tam Complaint – Expenses tied to the one-time settlement of the Qui Tam Complaint against Myriad around hereditary cancer billing

•

Elevate initiatives - Expenses tied to Elevate 2020 program

•

Leadership transition – One time expenses related to the leadership transition

•

Impairment of Goodwill and Intangibles – One time impairment charges on intangible assets and goodwill tied to company acquisitions

•

Non-recurring valuation allowance expense – One time adjustment to deferred tax assets

Reconciliation of GAAP to Non-GAAP Financial Measures

for the Three and Twelve months ended June 30, 2020

(Unaudited data in millions, except per share amount)

Three Months Ended

Twelve Months Ended

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Revenue

$

93.2

$

215.4

$

638.6

$

851.1

GAAP Cost of molecular diagnostic testing

32.2

41.6

157.5

168.2

GAAP Cost of pharmaceutical and clinical services

4.5

9.0

28.6

32.8

Acquisition - Integration related costs

—

—

(0.2

)

Equity Compensation

(0.3

)

(0.2

)

(1.4

)

(0.7

)

Elevate initiatives

—

(0.4

)

(0.2

)

(4.2

)

Non-GAAP COGS

$

36.4

$

50.0

$

184.5

$

195.9

Non-GAAP Gross Margin

60.9

%

76.8

%

71.1

%

77.0

%

GAAP R&D

$

17.4

$

20.9

$

77.2

$

85.9

Acquisition - amortization of intangible assets

—

(0.1

)

—

(0.3

)

Acquisition - Integration related costs

—

(0.1

)

—

(0.8

)

Equity compensation

(1.2

)

(1.4

)

(5.1

)

(5.6

)

Elevate initiatives

(0.1

)

—

(1.2

)

(2.2

)

Non-GAAP R&D

$

16.1

$

19.3

$

70.9

$

77.0

GAAP Contingent Consideration

$

—

$

(0.3

)

$

(2.8

)

$

1.1

Potential future consideration related to acquisitions

—

0.3

2.8

(1.1

)

Non-GAAP Contingent Consideration

$

—

$

—

$

—

$

—

GAAP Impairment of Goodwill and Intangibles

$

—

$

—

$

99.7

$

—

Impairment of goodwill and intangibles

—

—

(99.7

)

—

Non-GAAP Impairment of Goodwill and Intangibles

$

—

$

—

$

—

$

—

GAAP SG&A

$

107.4

$

149.8

$

510.1

$

555.5

Acquisition - amortization of intangible assets

(15.2

)

(15.1

)

(60.7

)

(58.7

)

Acquisition - Integration related costs

—

(2.8

)

(0.6

)

(20.8

)

Non-recurring legal expenses

(1.5

)

—

(2.8

)

—

COVID-19 costs

(0.8

)

—

(0.8

)

—

Leadership transition

(1.7

)

—

(2.7

)

—

Settlement of hereditary cancer Qui Tam complaint

—

(9.1

)

—

(9.1

)

Equity compensation

(0.4

)

(7.1

)

(18.7

)

(27.1

)

Elevate initiatives

(4.8

)

(2.8

)

(11.9

)

(6.8

)

Non-GAAP SG&A

$

83.0

$

112.9

$

411.9

$

433.0

GAAP Operating Income (Loss)

$

(68.3

)

$

(5.6

)

$

(231.7

)

$

7.6

Acquisition - Integration related costs

—

2.9

0.6

21.8

Acquisition - amortization of intangible assets

15.2

15.2

60.7

59.0

Impairment of goodwill and intangibles

—

—

99.7

—

Non-recurring legal expenses

1.5

—

2.8

—

COVID-19 costs

0.8

—

0.8

—

Leadership transition

1.7

—

2.7

—

Equity compensation

1.9

8.7

25.2

33.4

Elevate initiatives

4.9

3.2

13.3

13.2

Settlement of hereditary cancer Qui Tam complaint

—

9.1

—

9.1

Potential future consideration related to acquisitions

—

(0.3

)

(2.8

)

1.1

Non-GAAP Operating Income (Loss)

$

(42.3

)

$

33.2

$

(28.7

)

$

145.2

Non-GAAP Operating Margin

-45

%

15

%

-4

%

17

%

GAAP Net Income (Loss) Attributable to Myriad Genetics, Inc. Stockholders

$

(55.4

)

$

(4.2

)

$

(199.5

)

$

4.6

Acquisition - Integration related costs

—

2.9

0.6

21.8

Acquisition - amortization of intangible assets

15.2

15.2

60.7

59.0

Impairment of goodwill and intangibles

—

—

99.7

—

Non-recurring legal expenses

1.5

—

2.8

—

COVID-19 costs

0.8

—

0.8

—

Leadership transition

1.7

—

2.7

—

Equity compensation

1.9

8.7

25.2

33.4

Elevate initiatives

4.8

3.2

13.3

13.2

Potential future consideration related to acquisitions

—

(0.3

)

(2.8

)

1.1

Settlement of hereditary cancer Qui Tam complaint

—

9.1

—

9.1

Sale of entities

—

—

(1.0

)

—

Deferred tax impact of non-GAAP adjustments

2.5

(0.6

)

(3.4

)

2.2

Non-recurring valuation allowance expense

6.5

—

6.5

—

Tax effect associated with non-GAAP adjustments

(2.9

)

(3.3

)

(11.8

)

(17.5

)

Non-GAAP Net Income (Loss)

$

(23.4

)

$

30.7

$

(6.2

)

$

126.9

GAAP diluted earnings (loss) per share

$

(0.74

)

$

(0.06

)

$

(2.69

)

$

0.06

Non-GAAP diluted earnings (loss) per share

$

(0.31

)

$

0.41

$

(0.08

)

$

1.67

Diluted shares outstanding

74.6

74.8

74.3

76.0

Free Cash Flow Reconciliation

(Unaudited data in millions)

Three Months Ended

Twelve Months Ended

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

GAAP cash flow from operations

$

30.0

$

31.5

$

60.7

$

83.7

Capital expenditures

(2.4

)

(1.4

)

(10.2

)

(8.6

)

Free cash flow

$

27.6

$

30.1

$

50.5

$

75.1

Elevate initiative costs

4.8

3.2

13.3

13.2

Non-recurring legal expenses

—

—

1.3

—

COVID-19 costs

0.8

—

0.8

—

Leadership transition

1.7

—

2.7

—

Cash paid for contingent consideration in operating cash flows

—

—

—

1.5

Acquisition - Integration related costs

—

2.9

0.6

21.8

Tax effect associated with non-GAAP adjustments

(2.0

)

(1.7

)

(5.2

)

(10.2

)

Non-GAAP Free cash flow

$

32.9

$

34.5

$

64.0

$

101.4