Lannett Announces Fiscal 2020 Second-Quarter Financial Results

PHILADELPHIA, Feb. 5, 2020 /PRNewswire/ -- Lannett Company, Inc. LCI today reported financial results for its fiscal 2020 second quarter ended December 31, 2019. 

Lannett Logo (PRNewsFoto/Lannett Company, Inc.)

"For our fiscal 2020 second quarter, strong sales across multiple product categories drove solid increases to our net sales and net income over our fiscal 2020 first-quarter results," said Tim Crew, chief executive officer of Lannett.  "Our improved topline was due in part to the introduction of seven new products in the second quarter of fiscal 2020, as well as a full quarter of sales of Posaconazole.  We plan to commence marketing an additional 10 or so products in the second half of the year, including Numbrino®, our recently approved, branded topical anesthetic product.

"We remain on track for launching a substantial number of new products in fiscal 2020.  At the same time, we are making excellent progress advancing multiple products in our pipeline that have significant upside, as evidenced by the recent human pharmacokinetics and pharmacodynamics clinical trial that met all primary endpoints for our insulin glargine product."

For the fiscal 2020 second quarter on a GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019.  Gross profit was $41.3 million, or 30% of net sales, compared with $69.8 million, or 36% of net sales.  Net income was $5.1 million, or $0.13 per diluted share, compared with $12.4 million, or $0.32 per diluted share.

For the fiscal 2020 second quarter reported on a Non-GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019.  Adjusted gross profit was $50.2 million, or 37% of net sales, compared with $86.0 million, or 44% of net sales, for the prior-year second quarter.  Adjusted interest expense was $13.1 million compared with $17.1 million for the second quarter of fiscal 2019.  Adjusted net income was $11.7 million, or $0.27 per diluted share, compared with $33.6 million, or $0.86 per diluted share, for the fiscal 2019 second quarter.  Adjusted EBITDA for the fiscal 2020 second quarter was $35.8 million.

Guidance for Fiscal 2020

Based on its current outlook, the company revised certain items in its GAAP guidance and adjusted guidance for fiscal year 2020, the net effect of which is not expected to have an impact on adjusted EBITDA.  The full guidance is as follows:



GAAP

Adjusted**

Net sales

$530 million to $550 million, up from $525 million to $545 million

$530 million to $550 million, up from $525 million to $545 million

Gross margin %

Approximately 32.5% to 34.5%, down from approximately 33.5% to 35.5%

Approximately 39% to 41%, down from approximately 40% to 42%

R&D expense

$34 million to $36 million, unchanged

$34 million to $36 million, unchanged

SG&A expense

$69 million to $72 million, unchanged

$63 million to $66 million, unchanged

Restructuring expense

$2 million to $3 million, down from $2 million to $4 million

$ --

Asset impairment charges

$2 million

$ --

Interest and other

$67 million to $69 million, down from $70 million to $72 million

$51 million to $53 million, down from $54 million to $56 million

Effective tax rate

Approximately 16% to 17%, unchanged

Approximately 21% to 22%, down from approximately 22% to 23%

Adjusted EBITDA*

N/A

$145 million to $160 million, unchanged

Capital expenditures

$20 million to $25 million, unchanged

$20 million to $25 million, unchanged

**A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the attached financial tables.

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 its fiscal 2020 second quarter ended December 31, 2019.  The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 49357861.  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, including Adjusted EBITDA, 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.  The company also believes that including Adjusted EBITDA, as defined in the company's existing Credit Agreement, is appropriate to provide additional information to investors to demonstrate the company's ability to comply with financial debt covenants.  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) restructuring expenses, (3) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature. 

*Adjusted EBITDA excludes the same adjustments discussed above, as well as additional adjustments permitted under the company's existing Credit Agreement.

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, successfully commercializing recently introduced products, launching an additional 10 or so products in the second half of the year, including Numbrino®, and achieving the financial metrics stated in the company's guidance for fiscal 2020, 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

 (UNAUDITED)





Current assets:

December 31, 2019



June 30, 2019

Cash and cash equivalents

$                   119,176



$       140,249

Accounts receivable, net

158,498



164,752

Inventories

152,090



143,971

Prepaid income taxes

6,949



-

Assets held for sale

3,757



9,671

Other current assets

8,709



13,606

Total current assets

449,179



472,249

Property, plant and equipment, net

183,631



186,670

Intangible assets, net

422,849



411,229

Operating lease right-of-use assets

6,015



-

Deferred tax assets

111,514



109,305

Other assets

7,896



7,960

TOTAL ASSETS

$                1,181,084



$    1,187,413





















LIABILITIES







Current liabilities:







Accounts payable

$                     30,883



$         13,493

Accrued expenses

10,750



5,805

Accrued payroll and payroll-related expenses

12,238



19,924

Rebates payable

48,447



46,175

Royalties payable

20,298



16,215

Restructuring liability

515



2,315

Income taxes payable

-



2,198

Current operating lease liabilities

1,848



-

Short-term borrowings and current portion of long-term debt

101,939



66,845

Other current liabilities

2,851



3,652

Total current liabilities

229,769



176,622

Long-term debt, net

606,073



662,203

Long-term operating lease liabilities

5,358



-

Other liabilities

14,712



14,547

TOTAL LIABILITIES

855,912



853,372











STOCKHOLDERS' EQUITY







Common stock ($0.001 par value, 100,000,000 shares authorized; 39,851,828 and 38,969,518 shares issued; 38,698,403 and 38,010,714 shares outstanding at

December 31, 2019 and June 30, 2019, respectively)

40



39

Additional paid-in capital

317,012



317,023

Retained earnings

25,002



32,075

Accumulated other comprehensive loss

(578)



(615)

Treasury stock(1,153,425 and 958,804 shares at December 31, 2019 and June 30, 2019, respectively)

(16,304)



(14,481)

Total stockholders' equity

325,172



334,041

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$                1,181,084



$    1,187,413

 

LANNETT COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)























 (UNAUDITED)



 (UNAUDITED)





Three months ended 



Six months ended 





December 31,



December 31,





2019



2018



2019



2018



















Net sales



$      136,110



$        193,718



$      263,452



$        348,772

Cost of sales 



86,663



115,751



164,319



203,441

Amortization of intangibles



8,153



8,157



15,181



16,380

Gross profit



41,294



69,810



83,952



128,951

Operating expenses:

















Research and development expenses



6,906



9,723



15,846



19,533

Selling, general, and administrative expenses



17,421



23,197



38,729



43,785

Restructuring expenses



192



213



1,580



1,235

Asset impairment charges



-



-



1,618



369,499

Total operating expenses



24,519



33,133



57,773



434,052

Operating income (loss)



16,775



36,677



26,179



(305,101)

Other income (loss):

















Loss on extinguishment of debt



-



-



(2,145)



-

Investment income



430



556



1,159



935

Interest expense



(16,694)



(21,512)



(35,986)



(42,945)

Other



(735)



(712)



199



(1,008)

Total other loss



(16,999)



(21,668)



(36,773)



(43,018)

Income (loss) before income tax



(224)



15,009



(10,594)



(348,119)

Income tax expense (benefit)



(5,308)



2,647



(3,521)



(72,953)

Net income (loss)



$          5,084



$          12,362



$         (7,073)



$      (275,166)



















Earnings (loss) per common share:

















     Basic



$             0.13



$              0.33



$           (0.18)



$            (7.30)

     Diluted (1)



$             0.13



$              0.32



$           (0.18)



$            (7.30)



















Weighted average common shares outstanding:

















     Basic



38,605,052



37,761,176



38,457,159



37,674,200

     Diluted (1)



40,557,503



39,112,547



38,457,159



37,674,200



(1) Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the "if-converted" method.

 

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 December 31, 2019



Net sales

Cost of

sales

Amortization

of intangibles

Gross

Profit

Gross

Margin %

R&D

expense

SG&A

expense

Restructuring

expenses

Operating

income

Other

income

(loss)

Income (loss)

before income

tax

Income tax

expense

(benefit)

Net income 

Diluted

earnings per

share (i)







GAAP Reported

$ 136,110

$86,663

$        8,153

$ 41,294

30%

$    6,906

$   17,421

$            192

$    16,775

$ (16,999)

$            (224)

$    (5,308)

$     5,084

$          0.13

Adjustments:





























Amortization of intangibles (a)

-

-

(8,153)

8,153



-

-

-

8,153

-

8,153

-

8,153



Cody API business (b)

-

(206)

-

206



(85)

(161)

-

452

-

452

-

452



Depreciation on capitalized software costs (c)

-

-

-

-



-

(1,058)

-

1,058

-

1,058

-

1,058



Decommissioning of Philadelphia sites (d)

-

(303)

-

303



-

-

-

303

-

303

-

303



Restructuring expenses (e)

-

-

-

-



-

-

(192)

192

-

192

-

192



Non-cash interest (f)

-

-

-

-



-

-

-

-

3,563

3,563

-

3,563



Other (g)

-

(209)

-

209



-

(135)

-

344

630

974

-

974



Tax adjustments (h)

-

-

-

-



-

-

-

-

-

-

8,111

(8,111)

































Non-GAAP Adjusted

$   136,110

$  85,945

$              -

$   50,165

37%

$     6,821

$    16,067

$               -

$      27,277

$   (12,806)

$           14,471

$       2,803

$     11,668

$           0.27





(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. 

(b)

To exclude the operating results of the ceased Cody API business 

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition 

(d)

To exclude the costs related to the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites 

(e)

To exclude expenses associated with the Cody API Restructuring Plan 

(f)

To exclude non-cash interest expense associated with debt issuance costs 

(g)

To primarily exclude a settlement related to a shareholder derivative lawsuit against certain current and former officers and directors of the Company 

(h)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates 

(i)

The weighted average share number for the three months ended December 31, 2019 is 40,557,503 for GAAP and 46,198,445 for the non-GAAP earnings per share calculations. Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the "if-converted" method.

 

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

































Six months ended December 31, 2019



Net sales

Cost of sales

Amortization

of intangibles

Gross

Profit

Gross

Margin %

R&D

expense

SG&A

expense

Restructuring

expenses

Asset

impairment

charges

Operating

income

Other

income

(loss)

Income (loss)

before income

tax

Income tax

expense

(benefit)

Net income

(loss)

Diluted

earnings

(loss) per

share (k)







GAAP Reported

$ 263,452

$ 164,319

$      15,181

$ 83,952

32%

$  15,846

$   38,729

$         1,580

1,618

$    26,179

$ (36,773)

$       (10,594)

$    (3,521)

$    (7,073)

$      (0.18)

Adjustments:































Amortization of intangibles (a)

-

-

(15,181)

15,181



-

-

-

-

15,181

-

15,181

-

15,181



Cody API business (b)

-

(1,928)

-

1,928



(505)

(375)

-

-

2,808

-

2,808

-

2,808



Depreciation on capitalized software costs (c)

-

-

-

-



-

(2,117)

-

-

2,117

-

2,117

-

2,117



Decommissioning of Philadelphia sites (d)

-

(1,292)

-

1,292



-

-

-

-

1,292

-

1,292

-

1,292



Restructuring expenses (e)

-

-

-

-



-

-

(1,580)

-

1,580

-

1,580

-

1,580



Asset impairment charges (f)

-

-

-

-



-

-

-

(1,618)

1,618

-

1,618

-

1,618



Non-cash interest (g)

-

-

-

-



-

-

-

-

-

7,571

7,571

-

7,571



Loss on extinguishment of debt (h)

-

-

-

-



-

-

-

-

-

2,145

2,145

-

2,145



Other (i)

-

(417)

-

417



-

(2,224)

-

-

2,641

(336)

2,305

-

2,305



Tax adjustments (j)

-

-

-

-



-

-

-

-

-

-

-

9,110

(9,110)



































Non-GAAP Adjusted

$   263,452

$   160,682

$              -

$ 102,770

39%

$    15,341

$    34,013

$               -

$            -

$      53,416

$   (27,393)

$           26,023

$       5,589

$     20,434

$        0.49





(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. 

(b)

To exclude the operating results of the ceased Cody API business 

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition 

(d)

To exclude the costs related to the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites 

(e)

To exclude expenses associated with the Cody API Restructuring Plan 

(f)

To exclude impairment charges primarily associated with an operating lease right-of-use asset 

(g)

To exclude non-cash interest expense associated with debt issuance costs 

(h)

To exclude the loss on extinguishment of debt primarily related to the partial repayment of the outstanding Term Loan A balance 

(i)

To primarily exclude accrued separation costs related to the Company's former Chief Financial Officer as well as gains on sales of assets previously held for sale, partially offset by legal settlements 

(j)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates 

(k)

The weighted average share number for the six months ended December 31, 2019 is 38,457,159 for GAAP and 43,723,412 for the non-GAAP earnings (loss) per share calculations. Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the "if-converted" method.

 

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 December 31, 2018



Net sales

Cost of sales

Amortization

of intangibles

Gross

Profit

Gross

Margin %

R&D

expenses

SG&A

expenses

Restructuring

expenses

Operating

income

Other

income

(loss)

Income

before

income tax

Income tax

expense

Net income

Diluted

earnings

per share (k)







GAAP Reported

$193,718

$   115,751

$        8,157

$ 69,810

36%

$    9,723

$      23,197

$           213

$     36,677

$ (21,668)

$ 15,009

$   2,647

$   12,362

$    0.32

Adjustments:





























Depreciation of fixed assets step-up (a)

-

(1,124)

-

1,124



-

-

-

1,124

-

1,124

-

1,124



Amortization of intangibles (b)

-

-

(8,157)

8,157



-

-

-

8,157

-

8,157

-

8,157



Cody API business Held for Sale (c)

-

(3,486)

-

3,486



(862)

34

-

4,314

-

4,314

-

4,314



Depreciation on capitalized software costs (d)

-

-

-

-



-

(1,058)

-

1,058

-

1,058

-

1,058



Legal and financial advisory costs (e)

-

-

-

-



-

(2,430)

-

2,430

-

2,430

-

2,430



Decommissioning of Philadelphia sites (f)

-

(2,265)

-

2,265



-

-

-

2,265

583

2,848

-

2,848



Restructuring expenses (g)

-

-

-

-



-

-

(213)

213

-

213

-

213



Non-cash interest (h)

-

-

-

-



-

-

-

-

4,396

4,396

-

4,396



Other (i)

-

(1,126)

-

1,126



(210)

(2,318)

-

3,654

285

3,939

-

3,939



Tax adjustments (j)

-

-

-

-



-

-

-

-

-

-

7,199

(7,199)

































Non-GAAP Adjusted

$  193,718

$     107,750

$              -

$   85,968

44%

$     8,651

$        17,425

$              -

$       59,892

$   (16,404)

$  43,488

$    9,846

$     33,642

$     0.86





(a)

To exclude depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") 

(b)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. 

(c)

To exclude the operating results of the Cody API business Held for Sale which was classified as Held for Sale as of September 30, 2018 

(d)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition 

(e)

To exclude legal and financial advisory costs primarily related to exploring and evaluating debt and capital structure alternatives, including the December 2018 amendment to our Credit Agreement 

(f)

To exclude the costs associated with the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites 

(g)

To exclude expenses associated with the 2016 Restructuring Plan as well as the Cody Restructuring Plan 

(h)

To exclude non-cash interest expense associated with debt issuance costs 

(i)

To primarily exclude separation costs related to the Company's cost reduction plan, as well as a special recognition incentive payment 

(j)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates 

(k)

The weighted average share number for the three months ended December 31, 2018 is 39,112,547 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)

































Six months ended December 31, 2018



Net sales

Cost of sales

Amortization

of intangibles

Gross

Profit

Gross

Margin %

R&D

expenses

SG&A

expenses

Restructuring

expenses

Asset

impairment

charges

Operating

income

(loss)

Other

income

(loss)

Income

before

income tax

(loss)

Income tax

expense

(benefit)

Net income

(loss)

Diluted

earnings

(loss) per

share (l)







GAAP Reported

$  348,772

$   203,441

$      16,380

$  128,951

37%

$  19,533

$43,785

$         1,235

$       369,499

$ (305,101)

$ (43,018)

$(348,119)

$  (72,953)

$     (275,166)

$  (7.30)

Adjustments:































Depreciation of fixed assets step-up (a)

-

(2,459)

-

2,459



-

-

-

-

2,459

-

2,459

-

2,459



Amortization of intangibles (b)

-

-

(16,380)

16,380



-

-

-

-

16,380

-

16,380

-

16,380



Cody API business Held for Sale (c)

-

(3,486)

-

3,486



(862)

34

-

-

4,314

-

4,314

-

4,314



Depreciation on capitalized software costs (d)

-

-

-

-



-

(2,116)

-

-

2,116

-

2,116

-

2,116



Legal and financial advisory costs (e)

-

-

-

-



-

(2,430)

-

-

2,430

-

2,430

-

2,430



Decommissioning of Philadelphia sites (f)

-

(2,265)

-

2,265



-

-

-

-

2,265

583

2,848

-

2,848



Restructuring expenses (g)

-

-

-

-



-

-

(1,235)

-

1,235

-

1,235

-

1,235



Asset impairment charges (h)

-

-

-

-



-

-

-

(369,499)

369,499



369,499

-

369,499



Non-cash interest (i)

-

-

-

-



-

-

-

-

-

8,934

8,934

-

8,934



Other (j)

-

(1,126)

-

1,126



(210)

(2,600)

-

-

3,936

285

4,221

-

4,221



Tax adjustments (k)

-

-

-

-



-

-

-

-

-

-

-

88,703

(88,703)



































Non-GAAP Adjusted

$    348,772

$     194,105

$              -

$    154,667

44%

$    18,461

$  36,673

$               -

$                 -

$      99,533

$   (33,216)

$      66,317

$     15,750

$          50,567

$     1.30





(a)

To exclude depreciation of a fair value step-up in property, plant and equipment related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI") 

(b)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc. 

(c)

To exclude the operating results of the Cody API business Held for Sale which was classified as Held for Sale as of September 30, 2018 

(d)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition 

(e)

To exclude legal and financial advisory costs primarily related to exploring and evaluating debt and capital structure alternatives, including the December 2018 amendment to our Credit Agreement 

(f)

To exclude the costs associated with the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites 

(g)

To exclude expenses associated with the 2016 Restructuring Plan as well as the Cody Restructuring Plan

(h)

To exclude asset impairment charges related to goodwill and other long-lived assets

(i)

To exclude non-cash interest expense associated with debt issuance costs 

(j)

To primarily exclude separation costs related to the Company's cost reduction plan, as well as a special recognition incentive payment 

(k)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(l)

The weighted average share number for the six months ended December 31, 2018 is 37,674,200 for GAAP and 38,937,705 for the non-GAAP earnings (loss) per share calculations 

 

LANNETT COMPANY, INC.

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED)

($ in thousands)











Three months ended 





December 31, 2019







Net income



$                          5,084







Interest expense



16,694

Depreciation and amortization



14,089

Income tax expense



(5,308)

EBITDA



30,559







Share-based compensation



2,007

Inventory write-down



2,544

Investment income



(430)

Other non-operating loss



735

Restructuring expenses



192

Restructuring payments



(844)

Cody API business (a)



452

Decommissioning of Philadelphia sites (b)



303

Other



269

Adjusted EBITDA (Non-GAAP)



$                        35,787





(a)

To exclude the operating results of the ceased Cody API business

(b)

To exclude the costs related to the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites

 

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

($ in millions)











Fiscal Year 2020 Guidance













Non-GAAP





GAAP



Adjustments



Adjusted















Net sales



 $530 - $550 



-



 $530 - $550 

Gross margin percentage



approx. 32.5% to 34.5%



6.5%

 (a) 

approx. 39% to 41%

R&D expense



 $34 - $36 



-



 $34 - $36 

SG&A expense



 $69 - $72 



($6)

 (b) 

 $63 - $66 

Restructuring expense



 $2 - $3 



 ($2 - $3) 

 (c) 

-

Asset impairment charges



$2



($2)

 (d) 

-

Interest and other



 $67 - $69 



($16)

 (e) 

 $51 - $53 

Effective tax rate



 approx. 16% to 17% 



5%

 (f) 

approx. 21% to 22%

Adjusted EBITDA



 N/A 



 N/A 



 $145 - $160 

Capital expenditures



 $20 - $25 



-



 $20 - $25 



(a) The adjustment primarily reflects amortization of purchased intangible assets related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI")

(b) The adjustment primarily excludes depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(c) To exclude expenses associated with the Cody API Restructuring Plan

(d) This adjustment primarily excludes an impairment charge associated with an operating lease right-of-use asset

(e) The adjustment primarily reflects non-cash interest expense associated with debt issuance costs

(f) The adjustment reflects the impact of tax credits and deductions relative to expected annual pre-tax income

 

LANNETT COMPANY, INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (UNAUDITED)

($ in millions)











Fiscal Year 2020 Guidance



Low



High









Net income (loss)

$    (2.0)



$     6.0









Interest expense

67.0



69.0

Depreciation and amortization

56.0



57.0

Income taxes

-



2.0

EBITDA

121.0



134.0









Share-based compensation

10.0



11.0

Inventory write-down

9.0



10.0

Separation costs

1.0



1.0

Cody API business

3.0



3.0

Impairment

2.0



2.0

Restructuring expenses

2.0



3.0

Restructuring payments

(3.0)



(4.0)

Adjusted EBITDA (Non-GAAP)

$ 145.0



$ 160.0

 

LANNETT COMPANY, INC.

NET SALES BY MEDICAL INDICATION



















Three months ended



Six months ended

($ in thousands)

December 31, 



December 31, 

Medical Indication

2019



2018



2019



2018

Analgesic

$    2,111



$    2,547



$    3,995



$    4,376

Anti-Psychosis

22,697



14,036



50,730



24,925

Cardiovascular

23,972



25,680



45,579



47,450

Central Nervous System

19,331



7,373



38,588



21,659

Endocrinology

-



88,477



-



142,355

Gastrointestinal

18,313



12,943



35,275



30,537

Infectious Disease

18,078



4,616



29,973



9,096

Migraine

10,878



12,551



20,021



22,288

Respiratory/Allergy/Cough/Cold

3,075



3,388



5,781



6,972

Urinary

1,233



1,596



1,668



3,137

Other

9,934



12,606



19,796



23,411

Contract manufacturing revenue

6,488



7,905



12,046



12,566

   Total net sales

$ 136,110



$ 193,718



$ 263,452



$ 348,772

 

Contact:

Robert Jaffe



Robert Jaffe Co., LLC



(424) 288-4098

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/lannett-announces-fiscal-2020-second-quarter-financial-results-300999766.html

SOURCE Lannett Company, Inc.

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