Stock Analysis on Net
Stock Analysis on Net

Celgene Corp. (NASDAQ:CELG)

This company has been moved to the archive! The financial data has not been updated since October 31, 2019.

Common-Size Income Statement

Celgene Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net product sales 100.00 100.00 100.00 100.00 100.00
Cost of goods sold, excluding amortization of acquired intangible assets -3.85 -3.55 -3.92 -4.59 -5.10
Gross profit 96.15% 96.45% 96.08% 95.41% 94.90%
Other revenue 0.10 0.23 0.40 1.04 1.41
Research and development -37.16 -45.59 -39.97 -40.36 -32.13
Selling, general and administrative -21.29 -22.67 -23.76 -25.17 -26.81
Amortization of acquired intangible assets -3.07 -2.54 -4.10 -3.05 -3.41
Acquisition related gains (charges) and restructuring, net -0.73 10.41 -0.34 -3.27 -0.64
Operating income 34.01% 36.28% 28.31% 24.61% 33.30%
Interest and investment income, net 0.29 0.81 0.27 0.34 0.37
Interest expense -4.85 -4.02 -4.47 -3.39 -2.33
Other income (expense), net 2.21 0.18 -2.90 0.53 -0.58
Other income and expense -2.35% -3.03% -7.10% -2.52% -2.53%
Income before income taxes 31.65% 33.25% 21.21% 22.09% 30.77%
Income tax provision -5.15 -10.59 -3.34 -4.60 -4.33
Net income 26.51% 22.66% 17.87% 17.49% 26.44%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

The common-size income statement analysis reveals a company with exceptionally high gross margins and a volatile but generally strong net profitability profile. While the cost of goods sold remained minimal and stable, operating expenses—specifically research and development—exerted significant influence on the bottom line throughout the five-year period.

Gross Profitability and Direct Costs
Gross profit margins remained consistently high, fluctuating within a narrow range between 94.90% and 96.45%. The cost of goods sold, excluding amortization, stayed below 5.2% of net product sales, indicating strong pricing power and a low cost-to-revenue ratio for core product manufacturing.
Operating Expense Trends
Research and development (R&D) expenditures showed substantial volatility, peaking at 45.59% of net product sales in 2017 before retreating to 37.16% in 2018. This suggests aggressive and fluctuating investment in the product pipeline. Conversely, selling, general and administrative (SG&A) expenses exhibited a steady downward trend, declining from 26.81% in 2014 to 21.29% in 2018, reflecting improved operational efficiency or economies of scale.
Operating Income and Non-Recurring Items
Operating income margins were inconsistent, ranging from a low of 24.61% in 2015 to a high of 36.28% in 2017. The 2017 peak was significantly influenced by a one-time acquisition-related gain of 10.41% of net product sales. Excluding this anomaly, the operating margin showed a general tendency toward stabilization in the 34% range by 2018.
Financial Expenses and Taxation
Interest expense as a percentage of net product sales grew steadily from -2.33% in 2014 to -4.85% in 2018, indicating an increase in the company's debt burden relative to its sales. The income tax provision was highly variable, peaking at -10.59% in 2017, which contributed to fluctuations in net income.
Net Income Performance
Net income margins followed a U-shaped trajectory. After starting at 26.44% in 2014, profitability dipped to a low of 17.49% in 2015. A subsequent recovery phase occurred, bringing the net income margin back to 26.51% by 2018, effectively returning to 2014 levels despite the increased interest expenses.

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