Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2018 fourth quarter and full year ended June 30, 2018.
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PHILADELPHIA, /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2018 fourth quarter and full year ended June 30, 2018. "For both the fiscal 2018 fourth quarter and full year, our revenue and adjusted net income solidly improved over last year, and our overall financial performance was within our full-year guidance," said Tim Crew, chief executive officer of Lannett. "Operationally, in the second half of fiscal 2018, we completed several transactions acquiring more than 25 market-ready or near-market-ready product lines that have added to our pipeline and in-licensing several more. In addition, we implemented a restructuring plan at our Cody Laboratories subsidiary and began the consolidation of our product distribution function. Importantly, we improved the pace of new product launches and these products were well received by our customers. "As we announced last week, the company was informed that its contract with Jerome Stevens Pharmaceuticals (JSP) will not be renewed upon its expiration on March 23, 2019. The company has been assured of a continuous supply of the products covered under the agreement through March of next year, and we expect these products to significantly contribute to our financial performance in fiscal 2019. "Our overarching goal is to fortify our business as we build for the future, while also preparing for the impact of the eventual expiration of the JSP contract. The eight products we have launched since January 1st of this year are expected to contribute more than $50 million to revenues in the current fiscal year. Given our large pool of approved but not yet launched products and filed drug product applications awaiting approval at the FDA, our goal is to continue this recent rate of launching products. Moreover, we will implement a number of new cost reduction initiatives, which we estimate will generate substantial cost savings in fiscal 2019. "To summarize, our path forward is clear and includes launching products already under our control, increasing our product offering through strategic relationships and product development, and lowering our costs. We believe we are making progress on all of these fronts." For the fiscal 2018 fourth quarter, on a GAAP basis, net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017. Gross profit was $66.5 million, or 39% of total net sales, compared with $58.9 million, or 42% of total net sales. Research and development (R&D) expenses were $8.3 million compared with $11.4 million for the fiscal 2017 fourth quarter. Selling, general and administrative (SG&A) expenses increased to $20.6 million from $16.5 million. Restructuring expenses were $4.1 million compared with $1.8 million. During the fiscal 2018 fourth quarter, the company recorded $25.0 million of asset impairment charges, primarily related to restructuring of the company's Cody Laboratories subsidiary. Operating income was $8.6 million compared with $28.8 million. Interest expense was $21.2 million compared with $20.7 million for the fourth quarter of fiscal 2017. The company recorded an income tax benefit of $0.9 million versus income tax expense of $3.1 million in the prior-year period. Net loss attributable to Lannett was $11.4 million, or $0.30 per share, versus net income attributable to Lannett of $5.7 million, or $0.15 per diluted share, for the fiscal 2017 fourth quarter. For the fiscal 2018 fourth quarter reported on a Non-GAAP basis, adjusted net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017. Adjusted gross profit was $76.0 million, or 44% of adjusted net sales, compared with $68.0 million, or 49% of adjusted net sales, for the prior-year fourth quarter. Adjusted R&D expenses were $8.3 million compared with $11.4 million. Adjusted SG&A expenses were $17.4 million compared with $16.2 million. Adjusted operating income was $50.3 million compared with $40.4 million for the prior-year fourth quarter. Adjusted interest expense was $16.6 million compared with $16.0 million for the fourth quarter of fiscal 2017. Adjusted income tax expense was $9.6 million compared with $10.0 million in the prior-year period. Adjusted net income attributable to Lannett increased to $24.5 million, or $0.64 per diluted share, from $15.1 million, or $0.40 per diluted share, for the fiscal 2017 fourth quarter. For the fiscal 2018 full year, on a GAAP basis, net sales were $684.6 million compared with $637.3 million for fiscal 2017. During fiscal 2017, the company recorded a $4.0 million adjustment to a settlement agreement with one of its customers, which resulted in total net sales for the prior year of $633.3 million. Gross profit was $288.7 million, or 42% of total net sales, compared with $301.2 million, or 48% of total net sales, for fiscal 2017. R&D expenses were $29.2 million compared with $42.1 million. SG&A expenses were $82.2 million compared with $73.5 million. Restructuring expenses were $7.1 million compared with $7.2 million. In the current year, the company recorded a loss on sale of intangible asset of $15.5 million and asset impairment charges of $25.0 million. In the prior year, the company recorded acquisition and integration-related expenses of $4.0 million and asset impairment charges of $88.1 million. Operating income was $129.7 million compared with $86.4 million. Interest expense was $85.6 million compared with $89.4 million for fiscal 2017. The company recorded an income tax expense of $22.4 million compared with $1.1 million in the prior year. Net income attributable to Lannett was $28.7 million, or $0.75 per diluted share, versus net loss attributable to Lannett of $0.6 million, or $0.02 per share, for fiscal 2017. For the fiscal 2018 full year reported on a Non-GAAP basis, adjusted net sales were $684.6 million compared with $637.3 million for fiscal 2017. Adjusted gross profit was $326.2 million, or 48% of adjusted net sales, compared with $343.7 million, or 54% of adjusted net sales, for the prior year. Adjusted R&D expenses were $29.2 million compared with $42.1 million. Adjusted SG&A expenses were $71.0 million compared with $71.3 million. Adjusted operating income was $226.0 million compared with $230.3 million for the prior year. Adjusted interest expense declined to $65.4 million from $68.7 million for fiscal 2017. Adjusted income tax expense was $45.8 million compared with $57.2 million in the prior-year period. Adjusted net income attributable to Lannett increased to $118.2 million, or $3.10 per diluted share, compared with $107.9 million, or $2.86 per diluted share, for fiscal 2017. Guidance for Fiscal 2019 GAAP Adjusted
---- --------
Net
sales $580 million to $610 million $580 million to $610 million
------ ---------------------------- ----------------------------
Gross
margin
% 38% to 39% 44% to 45%
------ --------- ---------
R&D
expense $28 million to $32 million $28 million to $32 million
-------- -------------------------- --------------------------
SG&A
expense $63 million to $66 million $63 million to $66 million
-------- -------------------------- --------------------------
Integration
and
restructuring
related
expense $7 million to $8 million $ --
------------- ------------------------ ----
Interest
expense $81 million to $83 million $63 million to $65 million
-------- -------------------------- --------------------------
Effective
tax
rate 22% to 23% 22% to 23%
--------- --------- ---------
Capital
expenditures $30 million to $35 million $30 million to $35 million
------------ -------------------------- --------------------------
As previously announced, the company will perform an analysis to determine the potential for impairment of its goodwill and certain long-lived assets as a result of the nonrenewal of the JSP agreement in the first quarter of fiscal 2019. The company believes that the impairment assessment will likely result in a material impairment of its goodwill, which is not included in the company's GAAP guidance above because at this time the company cannot estimate the amount or a reasonable range of amounts of such impairment. Any impairment would result in a noncash charge to GAAP earnings in the first quarter of fiscal 2019; any such charge will not affect the 2019 Non-GAAP guidance amounts. Conference Call Information and Forward-Looking Statements 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 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) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature. About Lannett Company, Inc.: 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, the impact of the non-renewal of the distribution agreement with Jerome Stevens Pharmaceuticals, successfully launching and commercializing recently acquired and previously approved products, realizing enhanced efficiencies, successfully consummating transactions with new and existing alliance partners and successfully launching commercializing products included therein, and achieving the financial metrics stated in the company's guidance for fiscal 2019, 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. FINANCIAL SCHEDULES FOLLOW LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
ASSETS
------
Current assets: June 30, 2018 June 30, 2017
------------- -------------
Cash and cash equivalents $98,586 $117,737
Investment securities - 27,091
Accounts receivable, net 252,651 204,066
Inventories 141,635 122,604
Prepaid income taxes 15,159 16,703
Assets held for sale 13,976 -
Other current assets 4,863 6,592
----- -----
Total current assets 526,870 494,793
Property, plant and equipment,
net 233,247 243,148
Intangible assets, net 424,425 453,861
Goodwill 339,566 339,566
Deferred tax assets 22,063 52,753
Other assets 29,133 19,191
TOTAL ASSETS $1,575,304 $1,603,312
========== ==========
LIABILITIES
-----------
Current liabilities:
Accounts payable $56,767 $44,720
Accrued expenses 7,425 12,499
Accrued payroll and payroll-
related expenses 7,819 4,833
Rebates payable 49,400 44,593
Royalties payable 5,955 3,015
Restructuring liability 6,706 5,431
Settlement liability - 17,000
Short-term borrowings and
current portion of long-term
debt 66,845 60,117
------ ------
Total current liabilities 200,917 192,208
Long-term debt, net 772,425 843,530
Other liabilities 3,047 6,452
TOTAL LIABILITIES 976,389 1,042,190
------- ---------
Commitments and contingencies
STOCKHOLDERS' EQUITY
--------------------
Common stock ($0.001 par value, 100,000,000
shares authorized; 38,256,839 and 37,528,450
shares issued; 37,380,517 and 36,919,296
shares outstanding at June 30, 2018 and June
30, 2017, respectively)
38 37
Additional paid-in capital 306,817 292,780
Retained earnings 306,464 277,774
Accumulated other comprehensive
loss (515) (222)
Treasury stock(876,322 and
609,154 shares at June 30,
2018 and June 30, 2017,
respectively) (13,889) (9,247)
------- ------
Total Lannett Company, Inc.
stockholders' equity 598,915 561,122
Noncontrolling interest - -
Total stockholders' equity 598,915 561,122
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,575,304 $1,603,312
========== ==========
LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(UNAUDITED)
Three months ended Twelve months ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Net sales $170,911 $139,118 $684,563 $637,341
Settlement agreement - - - (4,000)
Total net sales $170,911 $139,118 $684,563 $633,341
-------- -------- -------- --------
Cost of sales 96,226 72,503 363,729 300,030
Amortization of
intangibles 8,157 7,737 32,128 32,098
Gross profit 66,528 58,878 288,706 301,213
------ ------ ------- -------
Operating expenses:
Research and
development expenses 8,335 11,423 29,196 42,073
Selling, general, and
administrative
expenses 20,553 16,519 82,196 73,477
Acquisition and
integration-related
expenses - 291 83 3,965
Restructuring expenses 4,078 1,836 7,061 7,168
Loss on sale of
intangible asset - - 15,514 -
Asset impairment
charges 24,960 - 24,960 88,084
------ --- ------ ------
Total operating
expenses 57,926 30,069 159,010 214,767
------ ------ ------- -------
Operating income 8,602 28,809 129,696 86,446
----- ------ ------- ------
Other income (loss):
Investment income 545 683 4,753 3,768
Interest expense (21,194) (20,720) (85,634) (89,420)
Other (195) 54 2,278 (244)
---- --- ----- ----
Total other loss (20,844) (19,983) (78,603) (85,896)
------- ------- ------- -------
Income (loss) before
income tax (12,242) 8,826 51,093 550
Income tax expense
(benefit) (883) 3,100 22,403 1,097
---- ----- ------ -----
Net income (loss) (11,359) 5,726 28,690 (547)
Less: Net income
attributable to
noncontrolling
interest - - - 34
--- --- --- ---
Net income (loss)
attributable to
Lannett Company, Inc. $(11,359) $5,726 $28,690 $(581)
======== ====== ======= =====
Earnings (loss) per common share attributable to Lannett
Company, Inc.:
Basic $(0.30) $0.16 $0.77 $(0.02)
Diluted $(0.30) $0.15 $0.75 $(0.02)
Weighted average common shares outstanding:
Basic 37,315,567 36,892,902 37,127,306 36,812,524
Diluted 37,315,567 37,779,354 38,162,514 36,812,524
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 June 30, 2018
--------------------------------
Net sales Cost Amortization Gross Gross R&D SG&A Acquisition and Restructuring Asset impairment Operating Other Income (loss) Income Net income Net income Net income (loss) Diluted
of sales of intangibles Profit Margin % expense expense integration- expenses charges income income before income tax expense (loss) attributable to attributable to earnings
related (loss) tax (benefit) noncontrolling Lannett Company, Inc. (loss) per
expenses interest share (h)
--- --- --- ---------
GAAP Reported $170,911 $96,226 $8,157 $66,528 39% $8,335 $20,553 $ - $4,078 $24,960 $8,602 $(20,844) $(12,242) $(883) $(11,359) $ - $(11,359) $(0.30)
Adjustments:
------------
Depreciation of
Fixed Assets step-
up (a) - (1,335) - 1,335 - - - - - 1,335 - 1,335 - 1,335 - 1,335
Amortization of
intangibles (b) - - (8,157) 8,157 - - - - - 8,157 - 8,157 - 8,157 - 8,157
Restructuring
expenses (c) - - - - - - - (4,078) - 4,078 - 4,078 - 4,078 - 4,078
Asset impairment
charges (d) - - - - - - - - (24,960) 24,960 24,960 - 24,960 - 24,960
Non-cash interest
(e) - - - - - - - - - - 4,557 4,557 - 4,557 - 4,557
Other (f) - - - - - (3,188) - - - 3,188 - 3,188 - 3,188 - 3,188
Tax adjustments (g) - - - - - - - - - - - - 10,443 (10,443) - (10,443)
Non-GAAP Adjusted $170,911 $94,891 $ - $76,020 44% $8,335 $17,365 $ - $ - $ - $50,320 $(16,287) $34,033 $9,560 $24,473 $ - $24,473 $0.64
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(a) Relates to depreciation of a fair value
step-up in property, plant and equipment
related to the acquisition of Kremers
Urban Pharmaceuticals, Inc. ("KUPI")
(b) Relates to amortization of purchased
intangible assets primarily related to
the acquisitions of KUPI and Silarx
Pharmaceuticals, Inc.
(c) To exclude expenses associated with the
Cody Restructuring Plan and, to a lesser
extent, the 2016 Restructuring Plan
(d) To exclude asset impairment charges
primarily related to the Cody
Restructuring Plan, and to a lesser
extent, the consolidation of
manufacturing activities with respect to
plant-related assets located at the
Company's Townsend Road facility
(e) To exclude non-cash interest expense
associated with debt issuance costs
(f) To primarily exclude separation benefits
associated with the former Senior Vice
President of Sales as well as other
employees
(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 June 30, 2018 is
37,315,567 and 38,285,208 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)
Three months ended June 30, 2017
--------------------------------
Total net Cost of Amortization Gross Gross R&D SG&A Acquisition and Restructuring Operating Other Income Income tax Net Net income Net income Diluted
sales sales of intangibles Profit Margin % expense expense integration- expenses income income before expense income attributable to earnings
related (loss) income tax noncontrolling attributable to per share
expenses interest Lannett (g)
Company, Inc.
--- ---
GAAP Reported $139,118 $72,503 $7,737 $58,878 42% $11,423 $16,519 $291 $1,836 $28,809 $(19,983) $8,826 $3,100 $5,726 $ - $5,726 $0.15
Adjustments:
------------
Depreciation of
Fixed Assets step-
up (a) - (1,335) - 1,335 - - - - 1,335 - 1,335 - 1,335 - 1,335
Amortization of
intangibles (b) - - (7,737) 7,737 - (365) - - 8,102 - 8,102 - 8,102 - 8,102
Acquisition and
integration-
related expenses
(c) - - - - - - (291) - 291 - 291 - 291 - 291
Restructuring
expenses (d) - - - - - - - (1,836) 1,836 - 1,836 - 1,836 - 1,836
Non-cash interest
(e) - - - - - - - - - 4,743 4,743 - 4,743 - 4,743
Tax adjustments (f) - - - - - - - - - - - 6,899 (6,899) - (6,899)
Non-GAAP Adjusted $139,118 $71,168 $ - $67,950 49% $11,423 $16,154 $ - $ - $40,373 $(15,240) $25,133 $9,999 $15,134 $ - $15,134 $0.40
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(a) Relates to depreciation of a fair value
step-up in property, plant and equipment
related to the acquisition of Kremers
Urban Pharmaceuticals, Inc. ("KUPI")
(b) Relates to amortization of purchased
intangible assets primarily related to
the acquisitions of KUPI and Silarx
Pharmaceuticals, Inc.
(c) Relates to acquisition and integration-
related expenses primarily related to the
acquisition of KUPI
(d) To exclude expenses associated with the
2016 Restructuring Plan
(e) To exclude non-cash interest expense
primarily associated with debt issuance
costs
(f) The tax effect of the pre-tax adjustments
included at applicable tax rates
(g) The weighted average share number for the
three months ended June 30, 2017 is
37,779,354 for both the GAAP and the non-
GAAP earnings per share calculations
LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(In thousands, except percentages, share and per share data)
Twelve months ended June 30, 2018
---------------------------------
Net sales Cost of Amortization Gross Gross R&D SG&A Acquisition and Restructuring Loss on sale of Asset impairment Operating Other Income Income tax Net income Net income Net income Diluted
sales of intangibles Profit Margin % expense expense integration- expenses intangible asset charges income income before expense attributable to attributable to earnings
related (loss) income tax noncontrolling Lannett per share
expenses interest Company, Inc. (k)
--- --- -------- --- ---
GAAP Reported $684,563 $363,729 $32,128 $288,706 42% $29,196 $82,196 $83 $7,061 $15,514 $24,960 $129,696 $(78,603) $51,093 $22,403 $28,690 $ - $28,690 $0.75
Adjustments:
------------
Depreciation of
Fixed Assets step-
up (a) - (5,340) - 5,340 - - - - - - 5,340 - 5,340 - 5,340 - 5,340
Amortization of
intangibles (b) - - (32,128) 32,128 - (582) - - - - 32,710 - 32,710 - 32,710 - 32,710
Acquisition and
integration-
related expenses
(c) - - - - - - (83) - - - 83 - 83 - 83 - 83
Restructuring
expenses (d) - - - - - - - (7,061) - - 7,061 - 7,061 - 7,061 - 7,061
Loss on sale of
intangible asset
(e) - - - - - - - - (15,514) - 15,514 - 15,514 - 15,514 - 15,514
Asset impairment
charges (f) - - - - - - - - - (24,960) 24,960 - 24,960 - 24,960 - 24,960
Non-cash interest
(g) - - - - - - - - - - - 20,213 20,213 - 20,213 - 20,213
Litigation
settlement gain
(h) - - - - - - - - - - - (3,500) (3,500) - (3,500) - (3,500)
Other (i) - - - - - (10,593) - - - - 10,593 - 10,593 - 10,593 - 10,593
Tax adjustments (j) - - - - - - - - - - - - - 23,421 (23,421) - (23,421)
Non-GAAP Adjusted $684,563 $358,389 $ - $326,174 48% $29,196 $71,021 $ - $ - $ - $ - $225,957 $(61,890) $164,067 $45,824 $118,243 $ - $118,243 $3.10
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(a) Relates to
depreciation of
a fair value
step-up in
property, plant
and equipment
related to the
acquisition of
Kremers Urban
Pharmaceuticals,
Inc. ("KUPI")
(b) Relates to
amortization of
purchased
intangible
assets
primarily
related to the
acquisitions of
KUPI and Silarx
Pharmaceuticals,
Inc.
(c) Relates to
acquisition and
integration-
related
expenses
primarily
related to the
acquisition of
KUPI
(d) To exclude
expenses
associated with
the 2016
Restructuring
Plan and Cody
Restructuring
Plan
(e) To exclude a
loss realized
on a sale of an
intangible
asset
(f) To exclude asset
impairment
charges
primarily
related to the
Cody
Restructuring
Plan, and to a
lesser extent,
the
consolidation
of
manufacturing
activities with
respect to
plant-related
assets located
at the
Company's
Townsend Road
facility
(g) To exclude non-
cash interest
expense
primarily
associated with
debt issuance
costs
(h) To exclude a
settlement gain
associated with
patent
litigation
(i) To primarily
exclude
separation
benefits
associated with
the former
Chief Executive
Officer and
former Senior
Vice President
of Sales as
well as a
reversal of
indemnified
unrecognized
tax benefits
due to
expirations in
the statute of
limitations,
related to the
KUPI
acquisition
(j) To exclude the
impact of the
revaluation of
net long term
deferred tax
assets related
to the Tax Cut
and Jobs Act
legislation
("2017 Tax
Reform"),
partially
offset by the
tax effect of
the pre-tax
adjustments
included at
applicable tax
rates as well
as the reversal
of indemnified
unrecognized
tax benefits
related to the
KUPI
acquisition
(k) The weighted
average share
number for the
twelve months
ended June 30,
2018 is
38,162,514 for
both the GAAP
and the non-
GAAP earnings
per share
calculations
LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(In thousands, except percentages, share and per share data)
Twelve months ended June 30, 2017
---------------------------------
Total net Cost of Amortization Gross Profit Gross R&D SG&A Acquisition and Restructuring Asset Operating Other Income Income Net income Net income Net income (loss) Diluted
sales sales of intangibles Margin % expense expense integration- expenses impairment income income before tax (loss) attributable to attributable to earnings
related expenses charges (loss) income tax expense noncontrolling Lannett (loss)
interest Company, Inc. per share (k)
--- -------- ------------ --------------
GAAP Reported $633,341 $300,030 $32,098 $301,213 48% $42,073 $73,477 $3,965 $7,168 $88,084 $86,446 $(85,896) $550 $1,097 $(547) $34 $(581) $(0.02)
Adjustments:
------------
Settlement
agreement (a) 4,000 - - 4,000 - - - - - 4,000 - 4,000 - 4,000 - 4,000
Depreciation of
Fixed Assets step-
up (b) - (4,410) - 4,410 - - - - - 4,410 - 4,410 - 4,410 - 4,410
Amortization of
Inventory step-up
(c) - (1,938) - 1,938 - - - - - 1,938 - 1,938 - 1,938 - 1,938
Amortization of
intangibles (d) - - (32,098) 32,098 - (1,460) - - - 33,558 - 33,558 - 33,558 - 33,558
Acquisition and
integration-
related expenses
(e) - - - - - - (3,965) - - 3,965 - 3,965 - 3,965 - 3,965
Restructuring
expenses (f) - - - - - - - (7,168) - 7,168 - 7,168 - 7,168 - 7,168
Asset impairment
charges (g) - - - - - - - - (88,084) 88,084 - 88,084 - 88,084 - 88,084
Non-cash interest
(h) - - - - - - - - - - 20,704 20,704 - 20,704 - 20,704
Other (i) - - - - - (715) - - - 715 - 715 - 715 - 715
Tax adjustments (j) - - - - - - - - - - - - 56,094 (56,094) - (56,094)
Non-GAAP Adjusted $637,341 $293,682 $ - $343,659 54% $42,073 $71,302 $ - $ - $ - $230,284 $(65,192) $165,092 $57,191 $107,901 $34 $107,867 $2.86
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(a) Relates to an adjustment to the Fiscal
2016 settlement agreement with a former
customer
(b) Relates to depreciation of a fair value
step-up in property, plant and equipment
related to the acquisition of Kremers
Urban Pharmaceuticals, Inc. ("KUPI")
(c) Relates to amortization of a fair value
step-up in inventory related to the
acquisition of KUPI
(d) Relates to amortization of purchased
intangible assets primarily related to
the acquisitions of KUPI and Silarx
Pharmaceuticals, Inc.
(e) Relates to acquisition and integration-
related expenses primarily related to the
acquisition of KUPI
(f) To exclude expenses associated with the
2016 Restructuring Plan
(g) To exclude impairment charges related to
certain intangible assets acquired as
part of the KUPI acquisition
(h) To exclude non-cash interest expense
primarily associated with debt issuance
costs
(i) Primarily relates to separation expenses
associated with a former employee
(j) The tax effect of the pre-tax adjustments
included at applicable tax rates
(k) The weighted average share numbers for the
twelve months ended June 30, 2017 are
36,812,524 and 37,695,061 for the GAAP
and non-GAAP earnings (loss) per share
calculations, respectively
LANNETT COMPANY, INC.
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
($ in millions)
Fiscal Year 2019 Guidance
-------------------------
Non-GAAP
GAAP Adjustments Adjusted
---- ----------- --------
Net sales $580 - $610 - $580 - $610
Gross margin percentage 38.0% - 39.0% 6% (a) 44.0% to 45.0%
R&D expense $28 - $32 - $28 - $32
SG&A expense $63 - $66 - $63 - $66
Integration and
Restructuring-related
expense $7 - $8 ($7 - $8) (b) -
Interest expense $81 - $83 ($18) (c) $63 - $65
Effective tax rate 22% to 23% - 22% to 23%
Capital expenditures $30 - $35 - $30 - $35
(a) The adjustment primarily reflects
amortization of purchased intangible
assets related to the acquisition of
Kremers Urban Pharmaceuticals, Inc.
("KUPI")
(b) The adjustment reflects expenses related
to the Cody Restructuring Plan and 2016
Restructuring Plan as well as
depreciation of previously capitalized
costs related to the integration of KUPI
into the combined Company's ERP system
(c) The adjustment primarily reflects non-
cash interest expense associated with
debt issuance costs
Note: As previously disclosed in the Company's Form 8-
K filed on August 23, 2018, the Company will perform
an analysis to determine the potential for impairment
of its goodwill and certain long-lived assets as a
result of the nonrenewal of the JSP agreement in the
first quarter of Fiscal 2019. The Company believes
that the impairment assessment will likely result in
a material impairment of its goodwill, which is not
included in the Company's GAAP guidance above because
at this time the Company cannot estimate the amount
or a reasonable range of amounts of such impairment.
LANNETT COMPANY, INC.
NET SALES BY MEDICAL INDICATION
Three months ended Twelve months ended
(in thousands) June 30, June 30,
-------- --------
Medical Indication 2018 2017 2018 2017
------------------ ---- ---- ---- ----
Antibiotic $3,807 $3,701 $14,509 $16,748
Anti-Psychosis 12,430 11,506 59,557 58,625
Cardiovascular 24,056 11,143 64,011 50,628
Central Nervous System 7,652 7,423 31,789 39,451
Gallstone 4,605 11,135 20,280 48,600
Gastrointestinal 14,123 15,418 60,294 71,887
Glaucoma 833 2,800 6,540 18,763
Migraine 10,627 6,948 54,015 29,014
Muscle Relaxant 3,187 3,427 13,496 13,636
Pain Management 4,553 6,003 23,036 26,135
Respiratory 1,690 1,090 7,891 10,516
Thyroid Deficiency 59,945 43,738 245,929 174,005
Urinary 2,790 2,281 8,661 14,695
Other 16,549 10,328 54,720 47,196
Contract manufacturing
revenue 4,064 2,177 19,835 17,442
----- ----- ------ ------
Net Sales 170,911 139,118 684,563 637,341
------- ------- ------- -------
Settlement agreement - - - (4,000)
Total Net Sales $170,911 $139,118 $684,563 $633,341
======== ======== ======== ========
Contact: Robert Jaffe
Robert Jaffe Co.,
LLC
(424) 288-4098
View original content with multimedia:http://www.prnewswire.com/news-releases/lannett-announces-fiscal-2018-fourth-quarter-and-full-year-financial-results-provides-guidance-for-fiscal-2019-300703654.html SOURCE Lannett Company, Inc. |
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Company Codes: NYSE:LCI |
