Amphastar Pharmaceuticals, Inc. Reports Revenues Of $59.7 Million For The Third Quarter Ended September 30, 2014

RANCHO CUCAMONGA, Calif., Nov. 12, 2014 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (Nasdaq:AMPH) ("Amphastar" or the "Company") today reported results for the third quarter ended September 30, 2014.

  • Net revenues of $59.7 million for the third quarter
  • GAAP net loss of $5.4 million or $0.12 per diluted share for the third quarter
  • Adjusted non-GAAP net loss of $3.3 million or $0.07 per diluted share for the third quarter
  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2014 2013 2014 2013
  (in thousands, except per share data)
Net revenues  $ 59,711  $ 59,318  $ 154,584  $ 174,805
GAAP net income (loss)  $ (5,379)  $ (159)  $ (8,178)  $ 10,033
Adjusted non-GAAP net income (loss)*  $ (3,255)  $ 1,889  $ (2,555)  $ 14,700
GAAP diluted EPS  $ (0.12)  $ (0.00)  $ (0.20)  $ 0.26
Adjusted non-GAAP diluted EPS*  $ (0.07)  $ 0.05  $ (0.06)  $ 0.38
         
 (*see Table II for reconciliation to GAAP numbers)        

Third Quarter Results

For the three months ended September 30, 2014, the Company reported net revenues of $59.7 million, an increase of 1% from $59.3 million for the same prior year period.

During the quarter, net revenues of enoxaparin were $32.0 million, a decrease of 11% compared to $36.2 million for the same prior year period, due to a decrease in the average selling price. Sales of insulin products by the Company's recently acquired subsidiary, Amphastar France Pharmaceuticals, S.A.S., or AFP, were $6.0 million.

Other product revenues were $21.7 million for the quarter, a decrease of 6% compared to $23.1 million for the same prior year period. Decreased sales of Cortrosyn® were partially offset by increased sales of naloxone.

Cost of revenues were $47.9 million and $39.0 million for the three months ended September 30, 2014 and 2013, respectively, representing an increase of $8.9 million, or 23%. The increase is primarily due to the cost of revenues at AFP. Purchase price allocation accounting rules regarding the Company's acquisition of AFP required that insulin inventory be recorded at fair value. Therefore, shipments of insulin in the quarter were at a gross margin of approximately 0%. Additionally, reductions in production levels at AFP and Amphastar during the three months ended September 30, 2014 resulted in higher manufacturing variances which caused a temporary increase in cost of revenues for the period.

Selling, distribution, and marketing expenses were $1.5 million for the quarter, which was consistent with the same prior year period. General and administrative expenses were $9.6 million and $9.5 million for the three months ended September 30, 2014 and 2013, respectively. Expenses at AFP were offset by lower corporate expenses.

For the three months ended September 30, 2014, research and development expenses decreased by 5% to $8.6 million from $9.0 million, compared to the same period in the prior year. The decrease was primarily due to decreased submission fees paid to the FDA during the three months ended September 30, 2014. This decrease was partially offset by increases in clinical trial expenses and expense related to purchases of materials and other research and development supplies during the three month ended September 30, 2014. Research and development expenses are expected to increase in the next several quarters as we begin further clinical and pre-clinical trials.

The Company reported an adjusted non-GAAP quarterly net loss of $3.3 million, or $0.07 per fully diluted share, for the three months ended September 30, 2014, compared to adjusted non-GAAP net income of $1.9 million, or $0.05 per fully diluted share, for the same period in the prior year.

Liquidity

Our cash and cash equivalents, and short term investments at September 30, 2014 were $74.4 million. Cash flow from operating activities were $13.8 million in the quarter and $8.9 for the nine months ended September 30, 2014.

Share buyback program

On November 6, 2014, the Company's Board of Directors authorized a $10.0 million share buyback program, which is expected to continue for an indefinite period. The primary goal of the program is to offset dilution created by the Company's equity compensation programs.

Purchases may be made through the open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions, or other means, as determined by the Company's management and in accordance with the requirements of the Securities and Exchange Commission.

The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions.

Dr. Jack Zhang, CEO, commented:  "We are pleased with our strong revenues and cash flow for the quarter. Our share buyback program shows our long term belief in the value of our stock."

Non-GAAP Financial Measures

The Company is disclosing non-GAAP financial measures when providing financial results. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with accounting principles generally accepted in the U.S. or "GAAP." In addition to disclosing its financial results determined in accordance with GAAP, the Company is disclosing certain non-GAAP results that exclude amortization expense, share-based compensation and impairment charges in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance, because the Company's management uses these measures internally for forecasting, budgeting, and measuring its operating performance. Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

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