BAUDETTE, Minn., Nov. 3, 2014 /PRNewswire/ -- ANI Pharmaceuticals, Inc. (“ANI”) (NASDAQ: ANIP) today reported financial results for the three and nine months ended September 30, 2014 and increased its revenue and non-GAAP EBITDA guidance for the fourth quarter of 2014.
Third quarter net revenues were $17.4 million, an increase of 122% as compared to $7.8 million for the same period in 2013. Third quarter adjusted non-GAAP EBITDA was $10.1 million, an increase of 494% as compared to $1.7 million in the same period in 2013. Third quarter operating income was $8.2 million, an increase of 912% as compared to $0.8 million in the same period in 2013. Third quarter adjusted non-GAAP diluted earnings per share was $0.66. Third quarter diluted earnings per share was $0.59, an increase of 354% as compared to $0.13 in the same period in 2013. Also during the quarter, ANI acquired two mature brands, Lithobid® and Vancocin®, for a combined $23 million.
Arthur S. Przybyl, President and CEO, stated,
“ANI had a record third quarter across all major metrics of revenue, EBITDA, operating income, and earnings per share. Our third quarter financial results were the direct result of continued organic revenue growth, combined with the revenues from Lithobid and Vancocin, products we acquired in the third quarter. Third quarter results include two months of revenue from Vancocin and its authorized generic. We expect to launch Vancocin under our own label in the fourth quarter. We continue to advance our internal generic product development efforts while selectively pursuing acquisitions and partnerships for late stage ANDA products and mature brands.”
ANI’s Guidance for the Fourth Quarter of 2014
ANI’s guidance for the fourth quarter of 2014 is based on management’s current estimates of the Company’s market share for its products, product pricing, cost of sales, and operating costs.
- Net revenues estimated to be between $17 million and $18 million.
- Adjusted non-GAAP EBITDA, excluding non-cash stock compensation expense, estimated to be between $9.75 million and $10.25 million.
- Adjusted non-GAAP earnings per share, excluding non-cash stock compensation expense, estimated to be between $0.60 and $0.65 per share, assuming 11,318,014 shares outstanding.
- An estimated effective tax rate of 18%.
The guidance above does not take into account additional product launches during the fourth quarter of 2014. ANI will provide initial 2015 guidance in conjunction with the announcement of its fourth quarter and year-end financial results.
Year-to-Date Highlights Include:
- Year-to-date net revenues of $34.9 million, an increase of 79% as compared to $19.6 million for the same period in 2013.
- Year-to-date adjusted non-GAAP EBITDA of $14.5 million, an increase of 306% as compared to $3.6 million for the same period in 2013.
- Year-to-date operating income of $9.2 million, an increase of $11.8 million as compared to an operating loss of $2.6 million for the same period in 2013.
- Acquired Vancocin® NDA and related ANDAs from Shire on August 1, 2014.
- Acquired Lithobid® NDA from Noven Therapeutics on July 1, 2014.
- Acquired ANDAs for 31 generic products from Teva Pharmaceuticals.
- Filed an ANDA with the FDA for an anti-cancer drug, which was granted an expedited review.
- Entered into a collaborative arrangement for a second generic drug product with Sofgen Pharmaceuticals.
- Entered into a collaborative arrangement for a generic drug product with Dexcel Pharma Technologies Ltd.
- Entered into two development agreements for generic drugs with Sterling Pharmaceutical Services.
- Completed a follow-on public offering of common stock yielding net proceeds of $46.7 million.
Net revenues and Adjusted Non-GAAP EBITDA | ||||
(in thousands) | Three months ended September 30, | Nine months ended September 30, | ||
2014 | 2013 | 2014 | 2013 | |
Net revenues | $ 17,387 | $ 7,836 | $ 34,933 | $ 19,550 |
Adjusted Non-GAAP EBITDA(a) | $ 10,078 | $ 1,696 | $ 14,549 | $ 3,582 |
(a) See Table 2 for US GAAP reconciliation. |
Third Quarter Results
For the three months ended September 30, 2014, ANI reported net revenues of $17.4 million, an increase of 122% from $7.8 million in the prior year period. The increase in revenues was due to a 135% increase in net prescription sales from $6.4 million to $15.0 million, primarily as a result of sales of ANI’s newly acquired products, Lithobid and Vancocin, as well as price increases for the Company’s existing products. Contract sales, development services, and royalty revenues increased from $1.5 million to $2.4 million, primarily due to royalties received on sales of the authorized generic of Vancocin.
Adjusted non-GAAP EBITDA was $10.1 million for the three months ended September 30, 2014, compared to $1.7 million in the prior year period, an increase of 494%. For a reconciliation of adjusted non-GAAP EBITDA to GAAP operating income, please see Table 2.
Cost of sales decreased as a percentage of net revenues to 18% from 35%, primarily due to higher margin sales of the newly acquired Lithobid and Vancocin branded products, as well as price increases for the Company’s existing products.
Research and development costs were $0.9 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively. The increase was due to work on new development projects, including the Teva products and the collaborations with Sterling and Sofgen.
Selling, general and administrative expenses increased to $4.1 million for the three months ended September 30, 2014, from $3.5 million in the prior year period. The increase was primarily due to $692 thousand in non-cash stock-based compensation expense recognized during the quarter.
Operating income was $8.2 million for the three months ended September 30, 2014, as compared to $0.8 million in the prior year period. The third quarter 2013 operating income included $0.5 million of merger-related expenses.
Net income was $6.7 million for the three months ended September 30, 2014, as compared to $1.2 million in the prior year period. Diluted earnings per share for the three months ended September 30, 2014 was $0.59, based on 11,302,319 diluted shares outstanding, as compared with earnings per share of $0.13 in the prior year period.
Adjusted non-GAAP diluted earnings per share, excluding non-cash stock compensation expense, was $0.66. For a reconciliation of adjusted non-GAAP diluted earnings per share to GAAP net income, please see Table 3.
Results for Nine Months Ended September 30, 2014
For the nine months ended September 30, 2014, ANI reported net revenues of $34.9 million, an increase of 79% from $19.5 million in the prior year period. The increase in revenues was due to a 111% increase in net prescription sales from $13.8 million to $29.2 million, primarily as a result of increased existing product sales, as well as sales of ANI’s newly acquired products, Lithobid and Vancocin. Contract sales, development services, and royalty revenues were $5.7 million, consistent with the prior year period. Royalties received on sales of the authorized generic of Vancocin fully offset decreased contract manufacturing revenue during the quarter.
Adjusted non-GAAP EBITDA was $14.5 million for the nine months ended September 30, 2014, as compared to $3.6 million in the prior year period, an increase of 306%. For a reconciliation of adjusted non-GAAP EBITDA to GAAP operating income, please see Table 2.
Cost of sales decreased as a percentage of net revenues to 22% from 37%, primarily due to price increases for the Company’s existing products, as well as higher margin sales of the newly acquired Lithobid and Vancocin branded products.
Research and development costs were $2.1 million and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively. The increase was due to work on new development projects, including the Teva products, the new collaborations with Sterling and Sofgen, and a filing fee for an ANDA submission of an anti-cancer drug.
Selling, general and administrative expenses increased to $13.2 million for the nine months ended September 30, 2014 from $13.0 million in the prior year period.
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