ANI Pharmaceuticals Reports Fourth Quarter and Full Year 2020 Results; Company Positioned for Sustainable Future Growth

March 9, 2021 11:50 UTC

 

-- Fourth quarter 2020 net revenues of $57.3 million; net loss of $3.6 million and diluted loss per share of $0.30 --

-- Fourth quarter adjusted non-GAAP EBITDA of $17.2 million and adjusted non-GAAP diluted eps of $0.80 --

-- ANI defines strategy for sustainable future growth and strengthens capital structure --

-- Definitive agreement to acquire Novitium Pharma strengthens R&D engine, and expands generics and CDMO business --

-- Cortrophin® Gel sNDA re-filing planned for Q2 2021; aligned with FDA on path forward --

-- Key additions to leadership team deepen commercial and manufacturing expertise --

 

BAUDETTE, Minn.--(BUSINESS WIRE)-- ANI Pharmaceuticals, Inc.. (“ANI” or the “Company”) (NASDAQ: ANIP) today announced business highlights and financial results for the three and 12 months ended December 31, 2020.

Corporate Strategy

The Company’s strategy for sustainable future growth is based on four key pillars:

  • Build a successful Cortrophin franchise;
  • Strengthen the Generics business by enhancing development capabilities and increased focus on niche opportunities. The acquisition of Novitium Pharma announced earlier today is an important step toward this goal;
  • Maximize the value from established brands through programmatic business development, and innovative access and go-to-market strategies; and
  • Expand CDMO business leveraging unique North American-based manufacturing capabilities.

ANI’s collaborative, purposeful and empowered team with their high-performance orientation is prepared to execute this strategy.

Fourth Quarter and Recent Business Highlights:

  • Signed a definitive agreement to acquire Novitium Pharma, a privately held, New Jersey-based pharmaceutical company with development, manufacturing, and commercialization capabilities for $163.5 million, including $89.5 million in cash and $74 million in equity, plus two potential future earnouts of up to $46.5 million. The transaction is expected to be accretive to Adjusted non-GAAP earnings per share within the first 12 months and close in the second half of 2021 following the requisite approvals needed to close the transaction, which include obtaining the approval of ANI shareholders as required by Nasdaq.
  • Engaged with the U.S. Food and Drug Administration (“FDA”) to refine regulatory path forward for Cortrophin® Gel. The Company believes it will refile a robust package with the FDA in the second quarter of 2021, which will provide the best opportunity for acceptance, and ultimately, approval.
  • Announced the addition of three key pharmaceutical executives: Christopher K. Mutz as Chief Commercial Officer and Head of Rare Diseases; Ori Gutwerg as Senior Vice President of Generics; and Davinder Singh as General Manager, Canadian Operations.

Fourth Quarter 2020 Financial Highlights:

  • Net revenues for Q4 2020 were $57.3 million compared to $48.0 million in Q4 2019 and $53.0 million in Q3 2020.
  • GAAP net loss for Q4 2020 was $3.6 million, and diluted GAAP loss per share was $0.30.
  • Adjusted non-GAAP EBITDA for Q4 2020 was $17.2 million.
  • Adjusted non-GAAP diluted earnings per share for Q4 2020 was $0.80.

Full Year 2020 Financial Highlights:

  • Net revenues were $208.5 million compared to $206.5 million in 2019.
  • GAAP net loss was $22.5 million, and diluted GAAP loss per share was $1.88.
  • Adjusted non-GAAP EBITDA was $67.1 million.
  • Adjusted non-GAAP diluted earnings per share was $3.50.

Cash and cash equivalents were $7.9 million, net accounts receivable was $95.8 million, and debt was $185.7 million as of December 31, 2020.

“Over the past six months, I have understood ANI’s core strengths and the landscape of potential opportunities to develop the four-pronged strategy for delivering sustainable future growth,” stated Nikhil Lalwani, President and CEO.

“The acquisition of Novitium creates a sustainable generics growth engine and enhances scale of our CDMO business. Although the additional work we are doing on Cortrophin impacts our timeline by one quarter, we believe it will result in a more comprehensive and robust refiling to support its approval. This is an important and exciting time for ANI, and we look forward to providing updates as we move forward on our growth journey,” concluded Lalwani.

Fourth Quarter 2020 Financial Results

Net Revenues
(in thousands)

 

Three Months Ended
December 31

 

 

 

2020

 

2019

 

Generic pharmaceutical products

 

$

38,650

 

$

29,121

 

Branded pharmaceutical products

 

 

15,759

 

 

15,624

 

Contract manufacturing

 

 

2,195

 

 

2,640

 

Royalty and other income

 

 

648

 

 

581

 

Total net revenues

 

$

57,252

 

$

47,966

 

Net revenues for generic pharmaceutical products were $38.7 million during the three months ended December 31, 2020, an increase of 32.7% compared to $29.1 million for the same period in 2019. This increase primarily reflects the January 2020 launches of Paliperidone, Miglustat, Mixed Amphetamine Salts, Tolterodine, Bexarotene and other products acquired from Amerigen, the January 2020 launch of Potassium Citrate ER, and increased revenues of Candesartan. These increases were tempered by decreases in revenues of Ezetimibe Simvastatin, Esterified Estrogen with Methyltestosterone (“EEMT”), and Methazolamide.

Net revenues for branded pharmaceutical products were $15.8 million during the three months ended December 31, 2020, an increase of 0.9% compared to $15.6 million for the same period in 2019, primarily due to increased revenues of Inderal LA, which were tempered by a decrease in unit sales of Innopran XL.

Contract manufacturing revenues were $2.2 million during the three months ended December 31, 2020, a decrease of 16.8% compared to $2.6 million for the same period in 2019, due to a decreased volume of orders from contract manufacturing customers in the period.

Royalty and other revenues were $0.6 million during the three months ended December 31, 2020, and December 31, 2019.

Operating expenses increased to $56.9 million for the three months ended December 31, 2020, from $52.6 million in the prior year period.

Cost of sales, excluding depreciation and amortization, increased by $6.7 million to $24.5 million in the fourth quarter of 2020, primarily as a result of increased volumes during the quarter, including a shift in product mix toward generic products, an increase related to sales of products subject to profit-sharing arrangements, increased freight charges, and fourth quarter 2020 inventory reserve charges. The increases were tempered by the non-recurrence of the fourth quarter 2019 inventory reserve charge primarily related to the exit from the market of Methylphenidate Extended Release.

Research and development expense decreased by $1.0 million in the fourth quarter of 2020 to $3.7 million compared with $4.7 million in the fourth quarter of 2019, primarily due to a decrease in expense related to the Cortrophin re-commercialization project and the non-recurrence of 2019 milestone expenses related to the Bretylium Tosylate project.

The Company recognized Cortrophin pre-launch charges of $3.0 million in the three months ended December 31, 2020, compared to Cortrophin pre-launch charges of $6.5 million in the three months ended December 31, 2019.

Selling, general, and administrative expenses rose by $0.4 million in the fourth quarter of 2020 to $14.4 million compared to $14.0 million in the comparable quarter in 2019.

Depreciation and amortization increased by $1.3 million in the fourth quarter of 2020 to $10.9 million compared to $9.6 million in the comparable quarter in 2019 due to amortization of the Abbreviated New Drug Applications (“ANDAs”) and marketing and distribution rights acquired in January 2020 from Amerigen and the ANDA acquired in July 2020.

Net loss for the fourth quarter of 2020 was $3.6 million as compared to net loss of $4.8 million in the prior year period. Diluted loss per share for the three months ended December 31, 2020 was ($0.30), compared to diluted loss per share of ($0.41) in the prior year period.

Adjusted non-GAAP diluted earnings per share was $0.80 in the fourth quarter of 2020 compared to adjusted non-GAAP diluted earnings per share of $1.08 in the prior year period.

For reconciliations of adjusted non-GAAP EBITDA and adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 3 and Table 4, respectively.

Liquidity

As of December 31, 2020, the Company had $7.9 million in unrestricted cash and cash equivalents plus $95.8 million in net accounts receivable. The Company had $185.7 million in outstanding debt as of December 31, 2020.

Conference Call

As previously announced, ANI Pharmaceuticals management will host its fourth quarter 2020 conference call as follows:

Date

 

Tuesday, March 9, 2021

Time

 

8:30 a.m. ET

Toll free (U.S.)

 

(866) 776-8875

Webcast (live and replay) www.anipharmaceuticals.com, under the “Investors” section

A replay of the conference call will be available within two hours of the call’s completion and will remain accessible for one week by dialing (855) 859-2056 and entering access code 2681582.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI’s management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance.

Adjusted non-GAAP EBITDA is defined as net income, excluding tax expense or benefit, interest expense, (net), other expense, (net), depreciation, amortization, the excess of fair value over cost of acquired inventory, non-cash stock-based compensation expense, CEO transition expenses, expense from acquired in-process research and development, transaction and integration expenses, Cortrophin pre-launch charges, asset impairments, and certain other items that vary in frequency and impact on ANI’s results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Net Income

ANI’s management considers adjusted non-GAAP net income to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, CEO transition expenses, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired in-process research and development (“IPR&D”) expense, transaction and integration expenses, asset impairments, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP net income when analyzing Company performance.

Adjusted non-GAAP net income is defined as net income, plus the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation expense, CEO transition expenses, transaction and integration expenses, non-cash interest expense, depreciation and amortization expense, expense from acquired in-process research and development, Cortrophin pre-launch charges, asset impairments, and certain other items that vary in frequency and impact on ANI’s results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate, and tax benefit related to the ANI Canada transfer pricing agreement. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP net income should be considered in addition to, but not in lieu of, net income reported under GAAP. A reconciliation of adjusted non-GAAP net income to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Diluted Earnings per Share

ANI’s management considers adjusted non-GAAP diluted earnings per share to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, CEO transition expenses, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired IPR&D expense, transaction and integration expenses, asset impairments, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP diluted earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted earnings per share is defined as adjusted non-GAAP net income, as defined above, divided by the diluted weighted average shares outstanding during the period, as adjusted for the dilutive effect of the convertible debt notes (in 2019), when applicable. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP diluted earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure is provided below.

About ANI

ANI Pharmaceuticals, Inc. is an integrated specialty pharmaceutical company developing, manufacturing, and marketing branded and generic prescription pharmaceuticals. The Company's targeted areas of product development currently include narcotics, oncolytics (anti-cancers), hormones and steroids, and complex formulations involving extended release and combination products. For more information, please visit our website www.anipharmaceuticals.com.

Forward-Looking Statements

To the extent any statements made in this release relate to information that is not historical, these are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Company’s corporate strategy, the pending acquisition of Novitium and anticipated results of such acquisition, future operations, products, financial position, operating results and prospects, including plans for growth, the Company’s pipeline or potential markets therefor, plans for existing ANDAs, timing for resubmission of a sNDA for Cortrophin Gel and commercialization plans, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “plans,” “potential,” “future,” “believes,” “intends,” “continue,” other words of similar meaning, derivations of such words and the use of future dates.

Uncertainties and risks may cause the Company’s actual results to be materially different than those expressed in or implied by such forward-looking statements. Uncertainties and risks include, but are not limited to, the risk that the Company may not be able to obtain the requisite approvals to complete the Novitium acquisition, the Company may face with respect to importing raw materials; the use of single source suppliers and the time it may take to validate and qualify another supplier, if necessary; increased competition and strategies employed by competitors; the ability to realize benefits anticipated from acquisitions; costs and regulatory requirements relating to contract manufacturing arrangements; delays or failure in obtaining product approvals from the U.S. Food and Drug Administration; general business and economic conditions, including the ongoing impact of the COVID-19 pandemic; market trends for our products; regulatory environment and changes; and regulatory and other approvals relating to product development and manufacturing.

More detailed information on these and additional factors that could affect the Company’s actual results are described in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. All forward-looking statements in this news release speak only as of the date of this news release and are based on the Company’s current beliefs, assumptions, and expectations. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Additional Information about the Proposed Novitium Transaction And Where To Find It

In connection with the proposed acquisition of Novitium and the issuances of equity contemplated thereby and in the accompanying PIPE transaction (collectively, the “Proposed Transactions”) described in a separate press release issued today and related SEC filing, the Company will file a proxy statement on Schedule 14A with the SEC to obtain the approval of ANI shareholders for both issuances as required by the Nasdaq listing standards. Additionally, the Company plans to file other relevant materials with the SEC in connection with the Proposed Transactions. This release is not a substitute for the proxy statement or any other document relating to the Proposed Transactions which the Company may file with the SEC. The definitive proxy statement will be sent or given to the stockholders of the Company and will contain important information about the Proposed Transactions. INVESTORS IN AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR FURNISHED OR WILL BE FILED OR WILL BE FURNISHED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTIONS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER, RELATED MATTERS AND THE PARTIES TO THE MERGER. The materials to be filed by the Company with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov or by contacting the investor relations department of the Company.

Participants in the Solicitation

This report does not constitute a solicitation of a proxy from any stockholder with respect to the Proposed Transactions. However, the Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Company stockholders in connection with the Proposed Transactions. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of the Company’s executive officers and directors in the solicitation by reading the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, the Company’s definitive proxy statement on Schedule 14A for the 2021 Annual Meeting of Stockholders and the other relevant materials filed with the SEC in connection with the Proposed Transactions if and when they become available. Additional information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the Proposed Transactions when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph filed, with or furnished to the SEC. All such documents, when filed or furnished, are available free of charge at the SEC’s website at www.sec.gov or by contacting the investor relations department of the Company.

Financial Tables Follow

ANI Pharmaceuticals, Inc. and Subsidiaries

Table 1: US GAAP Statement of Operations
(unaudited, in thousands, except per share amounts)
                 
                 
    Three Months Ended December 31,   Year Ended December 31,
   

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

                 
Net Revenues  

$

57,252

 

 

$

47,966

 

 

$

208,475

 

 

$

206,547

 

                 
Operating Expenses                
Cost of sales (excl. depreciation                
and amortization)  

 

24,540

 

 

 

17,795

 

 

 

87,157

 

 

 

63,154

 

Research and development  

 

3,683

 

 

 

4,678

 

 

 

16,001

 

 

 

19,806

 

Selling, general, and administrative  

 

14,365

 

 

 

14,014

 

 

 

64,986

 

 

 

55,843

 

Depreciation and amortization  

 

10,899

 

 

 

9,564

 

 

 

44,638

 

 

 

44,612

 

Cortrophin pre-launch charges  

 

2,988

 

 

 

6,511

 

 

 

11,263

 

 

 

6,706

 

Intangible asset impairment charge  

 

446

 

 

 

75

 

 

 

446

 

 

 

75

 

                 
Total Operating Expenses  

 

56,921

 

 

 

52,637

 

 

 

224,491

 

 

 

190,196

 

                 

Operating Income/(Loss)

 

 

331

 

 

 

(4,671

)

 

 

(16,016

)

 

 

16,351

 

                 
Other Expense, Net                
Interest expense, net  

 

(2,554

)

 

 

(2,870

)

 

 

(9,452

)

 

 

(12,966

)

Other expense, net  

 

(159

)

 

 

(111

)

 

 

(494

)

 

 

(228

)

                 
(Loss)/Income Before (Provision)/Benefit for Income Taxes  

 

(2,382

)

 

 

(7,652

)

 

 

(25,962

)

 

 

3,157

 

                 
(Provision)/Benefit for income taxes  

 

(1,253

)

 

 

2,817

 

 

 

3,414

 

 

 

2,937

 

                 
Net (Loss)/Income  

$

(3,635

)

 

$

(4,835

)

 

$

(22,548

)

 

$

6,094

 

                 
Basic and Diluted (Loss)/Earnings Per Share:                
Basic (Loss)/Earnings Per Share  

$

(0.30

)

 

$

(0.41

)

 

$

(1.88

)

 

$

0.51

 

Diluted (Loss)/Earnings Per Share  

$

(0.30

)

 

$

(0.41

)

 

$

(1.88

)

 

$

0.50

 

                 
Basic Weighted-Average Shares Outstanding  

 

11,996

 

 

 

11,886

 

 

 

11,964

 

 

 

11,841

 

Diluted Weighted-Average Shares Outstanding  

 

11,996

 

 

 

11,886

 

 

 

11,964

 

 

 

12,040

 

ANI Pharmaceuticals, Inc. and Subsidiaries
Table 2: US GAAP Balance Sheets
(unaudited, in thousands)
             
             
        December 31, 2020   December 31, 2019
Current Assets            
Cash and cash equivalents      

$

7,864

 

 

$

62,332

 

Accounts receivable, net      

 

95,793

 

 

 

72,129

 

Inventories, net      

 

60,803

 

 

 

48,163

 

Prepaid income taxes      

 

-

 

 

 

1,076

 

Prepaid expenses and other current assets      

 

5,861

 

 

 

3,995

 

Total Current Assets      

 

170,321

 

 

 

187,695

 

             
Property and equipment, net      

 

41,269

 

 

 

40,551

 

Restricted cash      

 

5,003

 

 

 

5,029

 

Deferred tax assets, net of deferred tax liabilities and valuation allowance    

 

51,704

 

 

 

38,326

 

Intangible assets, net      

 

188,511

 

 

 

180,388

 

Goodwill      

 

3,580

 

 

 

3,580

 

Other non-current assets      

 

802

 

 

 

1,220

 

Total Assets      

$

461,190

 

 

$

456,789

 

             
Current Liabilities            
Current debt, net of deferred financing costs      

$

13,243

 

 

$

9,941

 

Accounts payable      

 

11,261

 

 

 

14,606

 

Accrued expenses and other      

 

2,456

 

 

 

2,362

 

Accrued royalties      

 

6,407

 

 

 

5,084

 

Accrued compensation and related expenses      

 

6,231

 

 

 

3,736

 

Current income taxes payable, net      

 

3,906

 

 

 

-

 

Accrued government rebates      

 

7,826

 

 

 

8,901

 

Returned goods reserve      

 

27,155

 

 

 

16,595

 

Deferred revenue      

 

80

 

 

 

451

 

Total Current Liabilities      

 

78,565

 

 

 

61,676

 

             
Non-current debt, net of deferred financing costs and current component    

 

172,443

 

 

 

175,808

 

Derivatives and other non-current liabilities      

 

14,482

 

 

 

6,514

 

Total Liabilities      

 

265,490

 

 

 

243,998

 

             
Stockholders' Equity            
Common stock      

 

1

 

 

 

1

 

Treasury stock      

 

(2,246

)

 

 

(723

)

Additional paid-in capital      

 

214,354

 

 

 

200,800

 

(Accumulated deficit)/retained earnings      

 

(4,972

)

 

 

17,584

 

Accumulated other comprehensive loss, net of tax      

 

(11,437

)

 

 

(4,871

)

Total Stockholders' Equity      

 

195,700

 

 

 

212,791

 

             
Total Liabilities and Stockholders' Equity      

$

461,190

 

 

$

456,789

 

ANI Pharmaceuticals, Inc. and Subsidiaries

Table 3: Adjusted non-GAAP EBITDA Calculation and US GAAP to Non-GAAP Reconciliation

(unaudited, in thousands)

                 
                 
   

Three Months Ended December 31,

 

Year Ended December 31,

   

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

                 
Net (Loss)/Income  

$

(3,635

)

 

$

(4,835

)

 

$

(22,548

)

 

$

6,094

 

               
Add/(Subtract):                
Interest expense, net  

 

2,554

 

 

 

2,870

 

 

 

9,452

 

 

 

12,966

 

Other expense, net  

 

159

 

 

 

111

 

 

 

494

 

 

 

228

 

Provision/(Benefit) for income taxes  

 

1,253

 

 

 

(2,817

)

 

 

(3,414

)

 

 

(2,937

)

Depreciation and amortization  

 

10,899

 

 

 

9,564

 

 

 

44,638

 

 

 

44,612

 

Cortrophin pre-launch charges  

 

2,988

 

 

 

6,511

 

 

 

11,263

 

 

 

6,706

 

Expensed FDA approval milestone payment  

 

-

 

 

 

-

 

 

 

-

 

 

 

329

 

Stock-based compensation(1)  

 

2,392

 

 

 

2,444

 

 

 

9,470

 

 

 

9,217

 

CEO transition items(2)  

 

37

 

 

 

-

 

 

 

7,386

 

 

 

-

 

Cortrophin team restructuring  

 

-

 

 

 

-

 

 

 

401

 

 

 

-

 

Acquired IPR&D expense  

 

-

 

 

 

-

 

 

 

3,784

 

 

 

2,324

 

Excess of fair value over cost of acquired inventory  

 

113

 

 

 

-

 

 

 

4,296

 

 

 

-

 

Asset impairments(3)  

 

446

 

 

 

75

 

 

 

1,330

 

 

 

75

 

Charges related to market exits  

 

-

 

 

 

3,460

 

 

 

567

 

 

 

3,460

 

Transaction and integration expenses  

 

-

 

 

 

-

 

 

 

-

 

 

 

84

 

Adjusted non-GAAP EBITDA  

$

17,206

 

 

$

17,383

 

 

$

67,119

 

 

$

83,158

 

(1) For the year ended December 31, 2020, Stock-based compensation excludes $3.4 million of stock-based compensation expense associated with the departure of our former President and CEO. This amount is included in this table as part of CEO transition items.
                 
(2) CEO transition items for the year ended December 31, 2020 is comprised of $3.4 million of stock-based compensation expense and $3.1 million of expense for salary continuation, bonus and other fringe benefits associated with the departure of our former President and CEO, as well as certain legal and recruiting costs related to the search for a permanent replacement.
                 
(3) For the three months ended December 31, 2020, Asset impairments is comprised of the impairment of a marketing and distribution right intangible asset. For the year ended December 31, 2020, Asset impairments is comprised of finished goods inventory reserves for Bretylium, accounts receivable reserves due to customer bankruptcy, and the impairment of the marketing and distribution right intangible asset, tempered by a modest recovery of previously reserved inventory related to market exits. For the three and twelve month period ended December 2019, Asset impairments was comprised of the impairment of a product right intangible asset.
ANI Pharmaceuticals, Inc. and Subsidiaries
Table 4: Adjusted non-GAAP Net Income and Adjusted non-GAAP Diluted Earnings per Share Reconciliation
(unaudited, in thousands, except per share amounts)
               
  Three Months Ended December 31,   Year Ended December 31,
 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

               
Net (Loss)/Income

$

(3,635

)

 

$

(4,835

)

 

$

(22,548

)

 

$

6,094

 

               
Add/(Subtract):              
Non-cash interest expense

 

566

 

 

 

1,308

 

 

 

1,788

 

 

 

6,833

 

Depreciation and amortization expense

 

10,899

 

 

 

9,564

 

 

 

44,638

 

 

 

44,612

 

Cortrophin pre-launch charges

 

2,988

 

 

 

6,511

 

 

 

11,263

 

 

 

6,706

 

Expensed FDA approval milestone payment

 

-

 

 

 

-

 

 

 

-

 

 

 

329

 

Acquired IPR&D expense

 

-

 

 

 

-

 

 

 

3,784

 

 

 

2,324

 

Stock-based compensation(1)

 

2,392

 

 

 

2,444

 

 

 

9,470

 

 

 

9,217

 

CEO transition items(2)

 

37

 

 

 

-

 

 

 

7,386

 

 

 

-

 

Cortrophin team restructuring

 

-

 

 

 

-

 

 

 

401

 

 

 

-

 

Asset impairments(3)

 

446

 

 

 

75

 

 

 

1,330

 

 

 

75

 

Excess of fair value over cost of acquired inventory

 

113

 

 

 

-

 

 

 

4,296

 

 

 

-

 

Charges related to market exits

 

-

 

 

 

3,460

 

 

 

567

 

 

 

3,460

 

Transaction and integration expenses

 

-

 

 

 

-

 

 

 

-

 

 

 

84

 

Less:              
Tax impact of adjustments

 

(4,186

)

 

 

(5,607

)

 

 

(20,382

)

 

 

(17,674

)

Discrete tax benefit related to ANI Canada transfer pricing agreement

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,653

)

               
Adjusted Non-GAAP Net Income

$

9,620

 

 

$

12,920

 

 

$

41,993

 

 

$

60,407

 

               
Diluted Weighted-Average              
Shares Outstanding

 

11,996

 

 

 

11,886

 

 

 

11,964

 

 

 

12,040

 

Less: Dilutive Effect of Notes

 

-

 

 

 

-

 

 

 

-

 

 

 

(96

)

Adjusted Diluted Weighted-Average              
Shares Outstanding

 

12,009

 

 

 

11,980

 

 

 

11,986

 

 

 

11,944

 

               
Adjusted Non-GAAP              
Diluted Earnings per Share

$

0.80

 

 

$

1.08

 

 

$

3.50

 

 

$

5.06

 

(1) For the year ended December 31, 2020, Stock-based compensation excludes $3.4 million of stock-based compensation expense associated with the departure of our former President and CEO. This amount is included in this table as part of CEO transition items.
                 
(2) CEO transition items for the year ended December 31, 2020 is comprised of $3.4 million of stock-based compensation expense and $3.1 million of expense for salary continuation, bonus and other fringe benefits associated with the departure of our former President and CEO, as well as certain legal and recruiting costs related to the search for a permanent replacement.
                 
(3) For the three months ended December 31, 2020, Asset impairments is comprised of the impairment of a marketing and distribution right intangible asset. For the year ended December 31, 2020, Asset impairments is comprised of finished goods inventory reserves for Bretylium, accounts receivable reserves due to customer bankruptcy, and the impairment of the marketing and distribution right intangible asset, tempered by a modest recovery of previously reserved inventory related to market exits. For the three and twelve month period ended December 2019, Asset impairments was comprised of the impairment of a product right intangible asset.

 

Contacts

Investor Relations:
Lisa M. Wilson, In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com

 
 

Source: ANI Pharmaceuticals, Inc.

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