Lannett Reports Fiscal 2017 Third-Quarter Financial Results
PHILADELPHIA, May 2, 2017 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2017 third quarter ended March 31, 2017.
"Net sales in our fiscal 2017 third quarter increased compared with the same quarter last year, largely due to volume increases, even though sales were reduced by $4.5 million as a result of Medicaid's Inflation-Adjusted Rebate program," said Arthur Bedrosian, chief executive officer of Lannett. "The program began being applied to generic drugs for the first time in calendar 2017. Despite higher net sales, our financial results were not at the level we expected due to competitive pricing pressure across a number of products, product mix and changes within distribution channels.
"Looking ahead, our business remains strong. We paid down $100 million of debt during the recently completed quarter, lowering annualized cash interest expense by approximately $5.5 million. Our goal remains to utilize free cash flow to further pay down debt. We continue to make solid progress on reducing costs, enhancing efficiencies and transferring manufacturing to our state of the art facility in Seymour, Indiana. In addition, we have a number of drug applications pending at the FDA and anticipate launching recently approved products in the first half of fiscal 2018."
For the fiscal 2017 third quarter, net sales increased to $165.7 million from $163.7 million for the third quarter of fiscal 2016. During the third quarter of last year, the company recorded a reduction to net sales of $23.6 million related to a pre-tax, one-time, settlement agreement with one of its customers. In the current year third quarter, the company recorded a $4.0 million adjustment to the settlement agreement. As a result, total net sales were $161.7 million compared with $140.1 million for the prior year third quarter. Gross profit rose 26% to $72.4 million from $57.5 million. Gross profit as a percentage of total net sales was 45% compared with 41% in last year's third quarter. Research and development (R&D) expenses decreased to $8.3 million from $16.5 million for the fiscal 2016 third quarter. Selling, general and administrative (SG&A) expenses were $17.6 million compared with $16.2 million. Acquisition and integration-related expenses were $1.3 million compared with $1.5 million in the prior-year third quarter. Restructuring expenses related to a cost reduction plan implemented in February 2016 were $1.6 million compared with $4.7 million in the third quarter of the previous year.
Operating income was $43.6 million compared with $18.6 million. Interest expense was $22.4 million compared with $27.0 million for the third quarter of fiscal 2016. Net income attributable to Lannett was $14.9 million, or $0.40 per diluted share, versus net loss attributable to Lannett of $5.5 million, or $0.15 per share, for the fiscal 2016 third quarter.
For the fiscal 2017 third quarter reported on a Non-GAAP basis, adjusted net sales increased to $165.7 million from $163.7 million for the third quarter of fiscal 2016. Adjusted gross profit was $85.5 million, or 52% of adjusted net sales, compared with $97.4 million, or 59% of adjusted net sales, for the fiscal 2016 third quarter. Adjusted R&D expenses decreased to $8.3 million from $16.4 million. Adjusted SG&A expenses were $17.3 million compared with $15.8 million. Adjusted operating income was $59.9 million compared with $65.2 million for the prior-year third quarter. Adjusted net income attributable to Lannett increased to $29.2 million, or $0.77 per diluted share, from $27.9 million, or $0.75 per diluted share, for the fiscal 2016 third quarter.
Guidance for Fiscal 2017
The company's fiscal 2017 third quarter was unfavorably impacted by a number of factors, including competitive pricing pressure, product mix and changes within distribution channels, which are expected to continue in the fourth quarter and result in slightly lower sales. The company expects its fiscal 2017 fourth quarter profitability on an adjusted basis to be similar with its fiscal 2017 third quarter.
Conference Call Information and Forward-Looking Statements
Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for the fiscal 2017 third quarter ended March 31, 2017. The conference call will be available to interested parties by dialing 800-446-1671 from the U.S. or Canada, or 847-413-3362 from international locations, passcode 44816037. The call will be broadcast via the Internet at www.lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.
Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial measures, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The Company's management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor's overall understanding of the financial results for the Company's core business. Additionally, it provides a basis for the comparison of the financial results for the Company's core business between current, past and future periods. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included with this release.
Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) acquisition and integration-related expenses, (3) impairment charges, (4) non-cash interest expense, as well as (5) certain other items considered unusual or non-recurring in nature.
About Lannett Company, Inc.:
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications – see financial schedule below for net sales by medical indication. For more information, visit the company's website at www.lannett.com.
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, realizing the expected benefits of optimizing operations, enhancing efficiencies, significantly reducing costs, paying down debt, expanding the pipeline, receiving product approvals, successfully commercializing product approvals and achieving the financial metrics stated in the company's guidance for fiscal 2017, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, including acquired products, and Lannett's estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company's Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
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Contact: |
Robert Jaffe |
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Robert Jaffe Co., LLC | |
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(424) 288-4098 |
FINANCIAL SCHEDULES FOLLOW
|
LANNETT COMPANY, INC. | ||||||
|
CONSOLIDATED BALANCE SHEETS | ||||||
|
(In thousands, except share and per share data) | ||||||
|
(Unaudited) |
||||||
|
March 31, 2017 |
June 30, 2016 | |||||
|
ASSETS |
||||||
|
Current assets: |
||||||
|
Cash and cash equivalents |
$ 132,031 |
$ 224,769 | ||||
|
Investment securities |
22,534 |
14,094 | ||||
|
Accounts receivable, net |
215,237 |
211,722 | ||||
|
Inventories |
123,817 |
114,904 | ||||
|
Prepaid income taxes |
9,889 |
- | ||||
|
Deferred tax assets |
43,945 |
40,892 | ||||
|
Other current assets |
7,268 |
6,434 | ||||
|
Total current assets |
554,721 |
612,815 | ||||
|
Property, plant and equipment, net |
232,320 |
216,638 | ||||
|
Intangible assets, net |
461,963 |
575,503 | ||||
|
Goodwill |
339,566 |
333,611 | ||||
|
Deferred tax assets |
19,720 |
11,556 | ||||
|
Other assets |
18,714 |
13,895 | ||||
|
TOTAL ASSETS |
$ 1,627,004 |
$ 1,764,018 | ||||
|
LIABILITIES |
||||||
|
Current liabilities: |
||||||
|
Accounts payable |
$ 48,787 |
$ 34,720 | ||||
|
Accrued expenses |
7,462 |
9,247 | ||||
|
Accrued payroll and payroll-related expenses |
9,939 |
10,572 | ||||
|
Rebates payable |
34,667 |
21,894 | ||||
|
Royalties payable |
3,931 |
5,127 | ||||
|
Restructuring liability |
4,970 |
4,130 | ||||
|
Settlement liability |
19,500 |
7,000 | ||||
|
Income taxes payable |
- |
743 | ||||
|
Acquisition-related contingent consideration |
- |
35,000 | ||||
|
Short-term borrowings and current portion of long-term debt |
81,678 |
178,236 | ||||
|
Total current liabilities |
210,934 |
306,669 | ||||
|
Long-term debt, net |
855,379 |
883,612 | ||||
|
Settlement liability |
- |
12,526 | ||||
|
Other liabilities |
6,770 |
6,754 | ||||
|
TOTAL LIABILITIES |
1,073,083 |
1,209,561 | ||||
|
Commitments and contingencies |
||||||
|
STOCKHOLDERS' EQUITY |
||||||
|
Common stock($0.001 par value, 100,000,000 shares authorized; 37,483,583 and 37,150,165 shares issued; 36,876,849 and 36,604,202 shares outstanding at March 31, 2017 and June 30, 2016, respectively) |
37 |
37 | ||||
|
Additional paid-in capital |
291,206 |
283,301 | ||||
|
Retained earnings |
272,048 |
278,355 | ||||
|
Accumulated other comprehensive loss |
(181) |
(295) | ||||
|
Treasury stock(606,734 and 545,963 shares at March 31, 2017 and June 30, 2016, respectively) |
(9,189) |
(7,349) | ||||
|
Total Lannett Company, Inc. stockholders' equity |
553,921 |
554,049 | ||||
|
Noncontrolling interest |
- |
408 | ||||
|
Total stockholders' equity |
553,921 |
554,457 | ||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 1,627,004 |
$ 1,764,018 | ||||
|
LANNETT COMPANY, INC. | ||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||
|
(In thousands, except share and per share data) | ||||||||
|
Three months ended |
Nine months ended | |||||||
|
March 31, |
March 31, | |||||||
|
2017 |
2016 |
2017 |
2016 | |||||
|
Net sales |
$ 165,720 |
$ 163,712 |
$ 498,223 |
$ 397,204 | ||||
|
Settlement agreement |
(4,000) |
(23,598) |
(4,000) |
(23,598) | ||||
|
Total net sales |
$ 161,720 |
$ 140,114 |
$ 494,223 |
$ 373,606 | ||||
|
Cost of sales |
81,553 |
75,345 |
227,527 |
155,964 | ||||
|
Amortization of intangibles |
7,737 |
7,278 |
24,361 |
11,079 | ||||
|
Gross profit |
72,430 |
57,491 |
242,335 |
206,563 | ||||
|
Operating expenses: |
||||||||
|
Research and development expenses |
8,340 |
16,495 |
30,650 |
32,092 | ||||
|
Selling, general and administrative expenses |
17,629 |
16,157 |
56,958 |
46,359 | ||||
|
Acquisition and integration-related expenses |
1,256 |
1,473 |
3,674 |
23,000 | ||||
|
Restructuring expenses |
1,568 |
4,749 |
5,332 |
4,749 | ||||
|
Intangible asset impairment charges |
- |
- |
88,084 |
- | ||||
|
Total operating expenses |
28,793 |
38,874 |
184,698 |
106,200 | ||||
|
Operating income |
43,637 |
18,617 |
57,637 |
100,363 | ||||
|
Other income (loss) |
||||||||
|
Investment income |
1,037 |
204 |
3,085 |
69 | ||||
|
Interest expense |
(22,373) |
(26,988) |
(68,700) |
(38,820) | ||||
|
Other |
(35) |
(46) |
(298) |
(76) | ||||
|
Total other loss |
(21,371) |
(26,830) |
(65,913) |
(38,827) | ||||
|
Income (loss) before income tax |
22,266 |
(8,213) |
(8,276) |
61,536 | ||||
|
Income tax expense (benefit) |
7,337 |
(2,743) |
(2,003) |
20,270 | ||||
|
Net income (loss) |
14,929 |
(5,470) |
(6,273) |
41,266 | ||||
|
Less: Net income attributable to noncontrolling interest |
- |
20 |
34 |
55 | ||||
|
Net income (loss) attributable to Lannett Company, Inc. |
$ 14,929 |
$ (5,490) |
$ (6,307) |
$ 41,211 | ||||
|
Earnings (loss) per common share attributable to Lannett Company, Inc. |
||||||||
|
Basic |
$ 0.41 |
$ (0.15) |
$ (0.17) |
$ 1.13 | ||||
|
Diluted |
$ 0.40 |
$ (0.15) |
$ (0.17) |
$ 1.10 | ||||
|
Weighted average common shares outstanding: |
||||||||
|
Basic |
36,849,208 |
36,495,961 |
36,785,829 |
36,398,030 | ||||
|
Diluted |
37,752,304 |
36,495,961 |
36,785,829 |
37,383,742 | ||||
|
LANNETT COMPANY, INC. | |||||||||||||||||
|
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED) | |||||||||||||||||
|
(In thousands, except percentages, share and per share data) | |||||||||||||||||
|
Three months ended March 31, 2017 | |||||||||||||||||
|
Total net sales |
Cost of sales |
Amortization of intangibles |
Gross Profit |
Gross |
R&D expense |
SG&A expense |
Acquisition and |
Restructuring expenses |
Operating income |
Other income (loss) |
Income before income tax |
Income tax expense |
Net income |
Net income attributable to noncontrolling interest |
Net income attributable to Lannett Company, Inc. |
Diluted | |
|
GAAP Reported |
$ 161,720 |
$ 81,553 |
$ 7,737 |
$ 72,430 |
45% |
$ 8,340 |
$ 17,629 |
$ 1,256 |
$ 1,568 |
$ 43,637 |
$ (21,371) |
$ 22,266 |
$ 7,337 |
$ 14,929 |
$ - |
$ 14,929 |
$ 0.40 |
|
Adjustments: |
|||||||||||||||||
|
Settlement agreement (a) |
4,000 |
- |
- |
4,000 |
- |
- |
- |
- |
4,000 |
- |
4,000 |
- |
4,000 |
- |
4,000 |
||
|
Depreciation of Fixed Assets step-up (b) |
- |
(1,335) |
- |
1,335 |
- |
- |
- |
- |
1,335 |
- |
1,335 |
- |
1,335 |
- |
1,335 |
||
|
Amortization of intangibles (c) |
- |
- |
(7,737) |
7,737 |
- |
(365) |
- |
- |
8,102 |
- |
8,102 |
- |
8,102 |
- |
8,102 |
||
|
Acquisition and integration-related expenses (d) |
- |
- |
- |
- |
- |
- |
(1,256) |
- |
1,256 |
- |
1,256 |
- |
1,256 |
- |
1,256 |
||
|
Restructuring expenses (e) |
- |
- |
- |
- |
- |
- |
- |
(1,568) |
1,568 |
- |
1,568 |
- |
1,568 |
- |
1,568 |
||
|
Non-cash interest (f) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5,688 |
5,688 |
- |
5,688 |
- |
5,688 |
||
|
Tax adjustments (g) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7,679 |
(7,679) |
- |
(7,679) |
||
|
Non-GAAP Adjusted |
$ 165,720 |
$ 80,218 |
$ - |
$ 85,502 |
52% |
$ 8,340 |
$ 17,264 |
$ - |
$ - |
$ 59,898 |
$ (15,683) |
$ 44,215 |
$ 15,016 |
$ 29,199 |
$ - |
$ 29,199 |
$ 0.77 |
|
(a) |
Relates to expense for an adjustment to a settlement agreement with a former customer |
||||||||||||||
|
(b) |
Relates to depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") |
||||||||||||||
|
(c) |
Relates to amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. |
||||||||||||||
|
(d) |
Relates to acquisition and integration-related expenses primarily related to the acquisition of KUPI |
||||||||||||||
|
(e) |
To exclude expenses associated with the 2016 Restructuring Plan |
||||||||||||||
|
(f) |
To exclude non-cash interest expense primarily associated with debt issuance costs |
||||||||||||||
|
(g) |
The tax effect of the pre-tax adjustments included at applicable tax rates |
||||||||||||||
|
(h) |
The weighted average share number for the three months ended March 31, 2017 is 37,752,304 for both the GAAP and the non-GAAP earnings per share calculations |
||||||||||||||
|
LANNETT COMPANY, INC. | |||||||||||||||||
|
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED) | |||||||||||||||||
|
(In thousands, except percentages, share and per share data) | |||||||||||||||||
|
Three months ended March 31, 2016 | |||||||||||||||||
|
Total net sales |
Cost of sales |
Amortization of intangibles |
Gross Profit |
Gross |
R&D expense |
SG&A expense |
Acquisition and integration-related expenses |
Restructuring expenses |
Operating income |
Other income (loss) |
Income |
Income tax expense (benefit) |
Net income (loss) |
Net income attributable to noncontrolling interest |
Net income (loss) attributable to Lannett Company, Inc. |
Diluted earnings (loss) per share (i) | |
|
GAAP Reported |
$ 140,114 |
$ 75,345 |
$ 7,278 |
$ 57,491 |
41% |
$ 16,495 |
$ 16,157 |
$ 1,473 |
$ 4,749 |
$ 18,617 |
$ (26,830) |
$ (8,213) |
$ (2,743) |
$ (5,470) |
$ 20 |
$ (5,490) |
$ (0.15) |
|
Adjustments: |
|||||||||||||||||
|
Settlement agreement (a) |
23,598 |
- |
- |
23,598 |
- |
- |
- |
- |
23,598 |
- |
23,598 |
- |
23,598 |
- |
23,598 |
||
|
Depreciation of Fixed Assets step-up (b) |
- |
(388) |
- |
388 |
(90) |
- |
- |
- |
478 |
- |
478 |
- |
478 |
- |
478 |
||
|
Amortization of Inventory step-up (c) |
- |
(8,616) |
- |
8,616 |
- |
- |
- |
- |
8,616 |
- |
8,616 |
- |
8,616 |
- |
8,616 |
||
|
Amortization of intangibles (d) |
- |
- |
(7,278) |
7,278 |
- |
(365) |
- |
- |
7,643 |
- |
7,643 |
- |
7,643 |
- |
7,643 |
||
|
Acquisition and integration-related expenses (e) |
- |
- |
- |
- |
- |
- |
(1,473) |
1,473 |
- |
1,473 |
- |
1,473 |
- |
1,473 |
|||
|
Restructuring expenses (f) |
- |
- |
- |
- |
- |
- |
- |
(4,749) |
4,749 |
- |
4,749 |
- |
4,749 |
- |
4,749 |
||
|
Non-cash interest (g) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5,003 |
5,003 |
- |
5,003 |
- |
5,003 |
||
|
Tax adjustments (h) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
18,180 |
(18,180) |
- |
(18,180) |
||
|
Non-GAAP Adjusted |
$ 163,712 |
$ 66,341 |
$ - |
$ 97,371 |
59% |
$ 16,405 |
$ 15,792 |
$ - |
$ - |
$ 65,174 |
$ (21,827) |
$ 43,347 |
$ 15,437 |
$ 27,910 |
$ 20 |
$ 27,890 |
$ 0.75 |
|
(a) |
Relates to a settlement agreement with a former customer |
||||||||||||||||
|
(b) |
Relates to depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") |
||||||||||||||||
|
(c) |
Relates to amortization of a fair value step-up in inventory related to the acquisition of KUPI |
||||||||||||||||
|
(d) |
Relates to amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. |
||||||||||||||||
|
(e) |
Relates to acquisition and integration-related expenses primarily related to the acquisition of KUPI |
||||||||||||||||
|
(f) |
To exclude expenses associated with the 2016 Restructuring Plan |
||||||||||||||||
|
(g) |
To exclude non-cash interest expense associated with debt issuance costs |
||||||||||||||||
|
(h) |
The tax effect of the pre-tax adjustments included at applicable tax rates |
||||||||||||||||
|
(i) |
The weighted average share numbers for the three months ended March 31, 2016 are 36,495,961 and 37,379,473 for the GAAP and non-GAAP earnings (loss) per share calculations, respectively |
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LANNETT COMPANY, INC. | ||||||||||||||||||
|
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED) | ||||||||||||||||||
|
(In thousands, except percentages, share and per share data) | ||||||||||||||||||
|
Nine months ended March 31, 2017 | ||||||||||||||||||
|
Total net sales |
Cost of sales |
Amortization of intangibles |
Gross Profit |
Gross |
R&D expense |
SG&A expense |
Acquisition and |
Restructuring expenses |
Intangible asset impairment charges |
Operating income |
Other income (loss) |
Income |
Income tax expense (benefit) |
Net income |
Net income attributable to noncontrolling interest |
Net income (loss) |
Diluted earnings (loss) per share (k) | |
|
GAAP Reported |
$ 494,223 |
$ 227,527 |
$ 24,361 |
$ 242,335 |
49% |
$ 30,650 |
$ 56,958 |
$ 3,674 |
$ 5,332 |
$ 88,084 |
$ 57,637 |
$ (65,913) |
$ (8,276) |
$ (2,003) |
$ (6,273) |
$ 34 |
$ (6,307) |
$ (0.17) |
|
Adjustments: |
||||||||||||||||||
|
Settlement agreement (a) |
4,000 |
- |
- |
4,000 |
- |
- |
- |
- |
- |
4,000 |
- |
4,000 |
- |
4,000 |
- |
4,000 |
||
|
Depreciation of Fixed Assets step-up (b) |
- |
(3,075) |
- |
3,075 |
- |
- |
- |
- |
- |
3,075 |
- |
3,075 |
- |
3,075 |
- |
3,075 |
||
|
Amortization of Inventory step-up (c) |
- |
(1,938) |
- |
1,938 |
- |
- |
- |
- |
- |
1,938 |
- |
1,938 |
- |
1,938 |
- |
1,938 |
||
|
Amortization of intangibles (d) |
- |
- |
(24,361) |
24,361 |
- |
(1,095) |
- |
- |
- |
25,456 |
- |
25,456 |
- |
25,456 |
- |
25,456 |
||
|
Acquisition and integration-related expenses (e) |
- |
- |
- |
- |
- |
- |
(3,674) |
- |
- |
3,674 |
- |
3,674 |
- |
3,674 |
- |
3,674 |
||
|
Restructuring expenses (f) |
- |
- |
- |
- |
- |
- |
- |
(5,332) |
- |
5,332 |
- |
5,332 |
- |
5,332 |
- |
5,332 |
||
|
Intangible assets impairment charges (g) |
- |
- |
- |
- |
- |
- |
- |
- |
(88,084) |
88,084 |
- |
88,084 |
- |
88,084 |
- |
88,084 |
||
|
Non-cash interest (h) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
15,961 |
15,961 |
- |
15,961 |
- |
15,961 |
||
|
Other (i) |
- |
- |
- |
- |
- |
(715) |
- |
- |
- |
715 |
- |
715 |
- |
715 |
- |
715 |
||
|
Tax adjustments (j) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
49,195 |
(49,195) |
- |
(49,195) |
||
|
Non-GAAP Adjusted |
$ 498,223 |
$ 222,514 |
$ - |
$ 275,709 |
55% |
$ 30,650 |
$ 55,148 |
$ - |
$ - |
$ - |
$ 189,911 |
$ (49,952) |
$ 139,959 |
$ 47,192 |
$ 92,767 |
$ 34 |
$ 92,733 |
$ 2.46 |
|
(a) |
Relates to expense for an adjustment to a settlement agreement with a former customer |
|||||||||||||||||||
|
(b) |
Relates to depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") |
|||||||||||||||||||
|
(c) |
Relates to amortization of a fair value step-up in inventory related to the acquisition of KUPI |
|||||||||||||||||||
|
(d) |
Relates to amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. |
|||||||||||||||||||
|
(e) |
Relates to acquisition and integration-related expenses primarily related to the acquisition of KUPI |
|||||||||||||||||||
|
(f) |
To exclude expenses associated with the 2016 Restructuring Plan |
|||||||||||||||||||
|
(g) |
To exclude impairment charges related to certain intangible assets acquired as part of the KUPI acquisition |
|||||||||||||||||||
|
(h) |
To exclude non-cash interest expense primarily associated with debt issuance costs |
|||||||||||||||||||
|
(i) |
Primarily relates to separation expenses associated with a former employee |
|||||||||||||||||||
|
(j) |
The tax effect of the pre-tax adjustments included at applicable tax rates |
|||||||||||||||||||
|
(k) |
The weighted average share numbers for the nine months ended March 31, 2017 are 36,785,829 and 37,669,173 for the GAAP and non-GAAP earnings (loss) per share calculations, respectively |
|||||||||||||||||||
|
LANNETT COMPANY, INC. | |||||||||||||||||
|
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED) | |||||||||||||||||
|
(In thousands, except percentages, share and per share data) | |||||||||||||||||
|
Nine months ended March 31, 2016 | |||||||||||||||||
|
Total net sales |
Cost of sales |
Amortization of intangibles |
Gross Profit |
Gross |
R&D expense |
SG&A expense |
Acquisition |
Restructuring expenses |
Operating income |
Other income (loss) |
Income |
Income tax expense |
Net income |
Net income attributable to noncontrolling interest |
Net income attributable to Lannett Company, Inc. |
Diluted earnings per share (j) | |
|
GAAP Reported |
$ 373,606 |
$ 155,964 |
$ 11,079 |
$ 206,563 |
55% |
$ 32,092 |
$ 46,359 |
$ 23,000 |
$ 4,749 |
$ 100,363 |
$ (38,827) |
$ 61,536 |
$ 20,270 |
$ 41,266 |
$ 55 |
$ 41,211 |
$ 1.10 |
|
Adjustments: |
|||||||||||||||||
|
Settlement agreement (a) |
23,598 |
- |
- |
23,598 |
- |
- |
- |
- |
23,598 |
- |
23,598 |
- |
23,598 |
- |
23,598 |
||
|
Depreciation of Fixed Assets step-up (b) |
- |
(388) |
- |
388 |
(90) |
- |
- |
- |
478 |
- |
478 |
- |
478 |
- |
478 |
||
|
Amortization of Inventory step-up (c) |
- |
(14,516) |
- |
14,516 |
- |
- |
- |
- |
14,516 |
- |
14,516 |
- |
14,516 |
- |
14,516 |
||
|
Amortization of intangibles (d) |
- |
- |
(11,079) |
11,079 |
- |
(513) |
- |
- |
11,592 |
- |
11,592 |
- |
11,592 |
- |
11,592 |
||
|
Acquisition and integration-related expenses (e) |
- |
- |
- |
- |
- |
- |
(23,000) |
- |
23,000 |
- |
23,000 |
- |
23,000 |
- |
23,000 |
||
|
Restructuring expenses (f) |
- |
- |
- |
- |
- |
- |
- |
(4,749) |
4,749 |
- |
4,749 |
- |
4,749 |
- |
4,749 |
||
|
Non-cash interest (g) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7,666 |
7,666 |
- |
7,666 |
- |
7,666 |
||
|
Other (h) |
- |
- |
- |
- |
- |
(4,606) |
- |
- |
4,606 |
- |
4,606 |
- |
4,606 |
- |
4,606 |
||
|
Tax adjustments (i) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
31,040 |
(31,040) |
- |
(31,040) |
||
|
Non-GAAP Adjusted |
$ 397,204 |
$ 141,060 |
$ - |
$ 256,144 |
64% |
$ 32,002 |
$ 41,240 |
$ - |
$ - |
$ 182,902 |
$ (31,161) |
$ 151,741 |
$ 51,310 |
$ 100,431 |
$ 55 |
$ 100,376 |
$ 2.69 |
|
(a) |
Relates to a settlement agreement with a former customer |
||||||||||||||||||
|
(b) |
Relates to depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") |
||||||||||||||||||
|
(c) |
Relates to amortization of fair value step-up in inventory primarily related to the acquisition of KUPI |
||||||||||||||||||
|
(d) |
Relates to amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. |
||||||||||||||||||
|
(e) |
Relates to acquisition and integration-related expenses primarily related to the acquisition of KUPI |
||||||||||||||||||
|
(f) |
To exclude expenses associated with the 2016 Restructuring Plan |
||||||||||||||||||
|
(g) |
To exclude non-cash interest expense primarily associated with debt issuance costs |
||||||||||||||||||
|
(h) |
Primarily relates to separation expenses associated with former employees |
||||||||||||||||||
|
(i) |
The tax effect of the pre-tax adjustments included at applicable tax rates |
||||||||||||||||||
|
(j) |
The weighted average share number for the nine months ended March 31, 2016 is 37,383,742 for both the GAAP and the non-GAAP earnings per share calculations |
||||||||||||||||||
|
LANNETT COMPANY, INC. | |||||||
|
NET SALES BY MEDICAL INDICATION | |||||||
|
Three months ended |
Nine months ended | ||||||
|
(in thousands) |
March 31, |
March 31, | |||||
|
Medical Indication |
2017 |
2016 |
2017 |
2016 | |||
|
Antibiotic |
$ 4,474 |
$ 3,160 |
$ 13,047 |
$ 8,716 | |||
|
Anti Psychosis |
14,433 |
1,061 |
47,119 |
4,533 | |||
|
Cardiovascular |
14,815 |
16,652 |
39,484 |
38,059 | |||
|
Central Nervous System |
11,124 |
14,264 |
32,028 |
20,351 | |||
|
Gallstone |
11,157 |
14,698 |
37,465 |
53,389 | |||
|
Gastrointestinal |
19,441 |
21,739 |
56,470 |
30,431 | |||
|
Glaucoma |
4,868 |
6,006 |
15,962 |
19,371 | |||
|
Migraine |
7,043 |
5,090 |
22,066 |
16,338 | |||
|
Muscle Relaxant |
3,673 |
1,193 |
10,208 |
4,246 | |||
|
Obesity |
1,024 |
1,023 |
2,819 |
2,853 | |||
|
Pain Management |
6,085 |
7,178 |
20,132 |
23,386 | |||
|
Respiratory |
4,256 |
5,308 |
9,426 |
6,703 | |||
|
Thyroid Deficiency |
44,999 |
38,009 |
130,267 |
116,543 | |||
|
Urinary |
2,619 |
6,506 |
12,413 |
10,148 | |||
|
Other |
13,531 |
11,714 |
34,051 |
29,755 | |||
|
Contract manufacturing revenues |
2,178 |
10,111 |
15,266 |
12,382 | |||
|
Net Sales |
165,720 |
163,712 |
498,223 |
397,204 | |||
|
Settlement agreement |
(4,000) |
(23,598) |
(4,000) |
(23,598) | |||
|
Total Net Sales |
$ 161,720 |
$ 140,114 |
$ 494,223 |
$ 373,606 | |||
SOURCE Lannett Company, Inc.