‒ Q2 2023 Net Revenue of $599 million; GAAP Net
Income of $12 million; Diluted EPS of $0.08 ‒ ‒ Q2 2023 Adjusted
Net Income(1) of $57 million; Adjusted EBITDA (1) of $146 million;
Adjusted Diluted EPS (1) of $0.19 ‒ ‒ Raising 2023 Full Year
Guidance ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (“Amneal” or
the “Company”) announced its results today for the second quarter
ended June 30, 2023.
“We are pleased to raise our full year 2023 guidance following
another strong quarter. Our momentum in the first half of the year
underscores the solid execution of our strategy and ability to
drive continued growth across our diversified portfolio. We expect
many key catalysts ahead, including complex generics launches, an
expanded injectables portfolio, strong biosimilars uptake,
continued specialty growth, expansion across AvKARE distribution
channels, and an emerging presence internationally. As one of the
largest domestic pharmaceutical manufacturers, we are focused on
doing our part in addressing the ongoing drug shortages in the U.S.
market. As we accelerate growth and profitability, we are also
extending the reach and impact of Amneal in making essential
medicines more accessible for patients around the world,” said
Chirag and Chintu Patel, Co-Chief Executive Officers.
Net revenue in the second quarter of 2023 was $599 million, an
increase of 7% compared to $559 million in the second quarter of
2022. The increase was driven by Generics growth due to the
durability of our diversified, complex portfolio and new product
launches, including biosimilars, as well as continued expansion
across AvKARE, with solid Specialty revenue performance.
Net income attributable to Amneal Pharmaceuticals, Inc. was $12
million in the second quarter of 2023 compared to a net loss of
$121 million in the second quarter of 2022. Adjusted EBITDA(1) in
the second quarter of 2023 was $146 million, an increase of 9%
compared to the second quarter of 2022, reflective of strong
revenue performance, durable adjusted gross margins and operating
expense leverage. Diluted EPS in the second quarter of 2023 was
$0.08 compared to a loss of $0.80 for the second quarter of 2022.
Adjusted diluted EPS(1) in the second quarter of 2023 was $0.19, in
line with the second quarter of 2022.
(1)
See “Non-GAAP Financial Measures”
below.
Raising Full Year 2023 Guidance
The Company is raising its previously provided full year 2023
guidance.
Updated
2023 Guidance
Prior
Full Year 2023 Guidance
Net revenue
$2.30 billion - $2.40 billion
$2.25 billion - $2.35 billion
Adjusted EBITDA (1)
$525 million - $540 million
$500 million - $530 million
Adjusted diluted EPS (2)
$0.45 - $0.55
$0.40 - $0.50
Operating cash flow (3)
$220 million - $250 million
$200 million - $230 million
Capital expenditures
$50 million - $60 million
$50 million - $60 million
Weighted average diluted shares
outstanding (4)
Approximately 307 million
Approximately 307 million
(1)
Includes 100% of EBITDA from the AvKARE
acquisition. See also “Non-GAAP Financial Measures” below.
(2)
Accounts for 35% non-controlling interest
in AvKARE. See also “Non-GAAP Financial Measures” below.
(3)
Represents cash provided by operating
activities. Guidance does not contemplate one time and
non-recurring items such as legal settlements and other
discrete items.
(4)
Assumes the weighted average diluted
shares outstanding of class A and class B common stock under the
if-converted method.
Amneal’s 2023 estimates are based on management’s current
expectations, including with respect to prescription trends,
pricing levels, the timing of future product launches, the costs
incurred and benefits realized of restructuring activities, and our
long-term strategy. The Company’s financial statements are prepared
in accordance with accounting principles generally accepted in the
United States of America (“GAAP”). The Company cannot provide a
reconciliation between non-GAAP projections and the most directly
comparable measures in accordance with GAAP without unreasonable
efforts because it is unable to predict with reasonable certainty
the ultimate outcome of certain significant items required for the
reconciliation. The items include, but are not limited to,
acquisition-related expenses, restructuring expenses and benefits,
asset impairments, legal settlements, and other gains and losses.
These items are uncertain, depend on various factors, and could
have a material impact on GAAP reported results.
Conference Call Information
Amneal will host a conference call and live webcast at 8:30 am
Eastern Time on August 4, 2023 to discuss its results. The live
webcast and presentation will be accessible through the Investor
Relations section of the Company’s website at
https://investors.amneal.com. To access the call through a
conference line, dial 1 (833) 470-1428 (in the U.S.) with access
code 977620. A replay of the conference call will be posted shortly
after the call and will be available for seven days. To access the
replay, dial 1 (866) 813-9403 (in the U.S.) with access code
301025. For a list of toll-free international numbers, visit this
website:
https://www.netroadshow.com/events/global-numbers?confId=52762.
About Amneal
Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in
Bridgewater, NJ, is a fully integrated global pharmaceuticals
company. We make healthy possible through the development,
manufacturing, and distribution of a diverse portfolio of
approximately 270 generic and specialty pharmaceuticals, primarily
within the United States. In its Generics segment, the Company is
expanding across a broad range of complex product categories and
therapeutic areas, including injectables and biosimilars. In its
Specialty segment, Amneal has a growing portfolio of branded
pharmaceuticals focused primarily on central nervous system and
endocrine disorders, with a pipeline focused on unmet needs.
Through its AvKARE segment, the Company is a distributor of
pharmaceuticals and other products for the U.S. federal government,
retail, and institutional markets. For more information, please
visit www.amneal.com.
Cautionary Statement on Forward-Looking Statements
Certain statements contained herein, regarding matters that are
not historical facts, may be forward-looking statements (as defined
in the U.S. Private Securities Litigation Reform Act of 1995). Such
forward-looking statements include statements regarding
management’s intentions, plans, beliefs, expectations, financial
results, or forecasts for the future, including among other things:
discussions of future operations, including international
expansion; expected or estimated operating results and financial
performance; the Company’s growth prospects and opportunities as
well as its strategy for growth; product development and launches;
the successful commercialization and market acceptance of new
products, and other non-historical statements. Words such as
“plans,” “expects,” “will,” “anticipates,” “estimates,” and similar
words, or the negatives thereof, are intended to identify estimates
and forward-looking statements.
The reader is cautioned not to rely on these forward-looking
statements. These forward-looking statements are based on current
expectations of future events, including with respect to future
market conditions, company performance and financial results,
operational investments, business prospects, new strategies and
growth initiatives, the competitive environment, and other events.
If the underlying assumptions prove inaccurate or known or unknown
risks or uncertainties materialize, actual results could vary
materially from the expectations and projections of the
Company.
Such risks and uncertainties include, but are not limited to:
our ability to successfully develop, license, acquire and
commercialize new products on a timely basis; the competition we
face in the pharmaceutical industry from brand and generic drug
product companies, and the impact of that competition on our
ability to set prices; our ability to obtain exclusive marketing
rights for our products; our ability to manage our growth through
acquisitions and otherwise; our revenues are derived from the sales
of a limited number of products, a substantial portion of which are
through a limited number of customers; the continuing trend of
consolidation of certain customer groups; our dependence on
third-party suppliers and distributors for raw materials for our
products and certain finished goods; our substantial amount of
indebtedness and our ability to generate sufficient cash to service
our indebtedness in the future, and the impact of interest rate
fluctuations on such indebtedness; our ability to secure
satisfactory terms when negotiating a refinancing or other new
indebtedness; our dependence on third-party agreements for a
portion of our product offerings; legal, regulatory and legislative
efforts by our brand competitors to deter competition from our
generic alternatives; risks related to federal regulation of
arrangements between manufacturers of branded and generic products;
our reliance on certain licenses to proprietary technologies from
time to time; the significant amount of resources we expend on
research and development; the risk of product liability and other
claims against us by consumers and other third parties; risks
related to changes in the regulatory environment, including U.S.
federal and state laws related to healthcare fraud abuse and health
information privacy and security and changes in such laws; changes
to Food and Drug Administration product approval requirements; the
impact of healthcare reform and changes in coverage and
reimbursement levels by governmental authorities and other
third-party payers; our potential expansion into additional
international markets subjecting us to increased regulatory,
economic, social and political uncertainties, including recent
events affecting the financial services industry; our ability to
identify, make and integrate acquisitions or investments in
complementary businesses and products on advantageous terms; the
impact of global economic, political or other catastrophic events;
our ability to attract, hire and retain highly skilled personnel;
our obligations under a tax receivable agreement may be
significant; and the high concentration of ownership of our Class A
Common Stock and the fact that we are controlled by the Amneal
Group. The forward-looking statements contained herein are also
subject generally to other risks and uncertainties that are
described from time to time in the Company’s filings with the
Securities and Exchange Commission, including under Item 1A, “Risk
Factors” in the Company’s most recent Annual Report on Form 10-K
and in its subsequent reports on Forms 10-Q and 8-K. Investors are
cautioned not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made.
Forward-looking statements included herein speak only as of the
date hereof and we undertake no obligation to revise or update such
statements to reflect the occurrence of events or circumstances
after the date hereof.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures,
including EBITDA, adjusted EBITDA, and adjusted diluted EPS, which
are intended as supplemental measures of the Company’s performance
that are not required by or presented in accordance with GAAP.
Adjusted diluted EPS reflects diluted earnings per share based on
adjusted net income, which is net income (loss) adjusted to (A)
exclude (i) non-cash interest, (ii) GAAP (benefit from) provision
for income taxes, (iii) amortization, (iv) stock-based
compensation, (v) acquisition, site closure expenses, and idle
facility expenses, (vi) restructuring and other charges, (vii) loss
on refinancing, (viii) charges related to legal matters, including
interest, net, (ix) asset impairment charges, (x) regulatory
approval milestone, (xi) change in fair value of contingent
consideration, (xii) insurance recoveries for property losses and
associated expenses (xiii) other and (xiv) net income attributable
to non-controlling interests not associated with class B common
stock, and (B) include non-GAAP provision for income taxes.
Non-GAAP adjusted EPS is calculated assuming the weighted average
diluted shares outstanding of class A and class B common stock
under the if-converted method.
Management uses these non-GAAP measures internally to evaluate
and manage the Company’s operations and to better understand its
business because they facilitate a comparative assessment of the
Company’s operating performance relative to its performance based
on results calculated under GAAP. These non-GAAP measures also
isolate the effects of some items that vary from period to period
without any correlation to core operating performance and eliminate
certain charges that management believes do not reflect the
Company’s operations and underlying operational performance. The
compensation committee of the Company’s board of directors also
uses certain of these measures to evaluate management’s performance
and set its compensation. The Company believes that these non-GAAP
measures also provide useful information to investors regarding
certain financial and business trends relating to the Company’s
financial condition and operating results facilitates an evaluation
of the financial performance of the Company and its operations on a
consistent basis. Providing this information therefore allows
investors to make independent assessments of the Company’s
financial performance, results of operations and trends while
viewing the information through the eyes of management.
These non-GAAP measures are subject to limitations. The non-GAAP
measures presented in this release may not be comparable to
similarly titled measures used by other companies because other
companies may not calculate one or more in the same manner.
Additionally, the non-GAAP performance measures exclude significant
expenses and income that are required by GAAP to be recorded in the
Company’s financial statements; do not reflect changes in, or cash
requirements for, working capital needs; and do not reflect
interest expense, or the requirements necessary to service interest
or principal payments on debt. Further, our historical adjusted
results are not intended to project our adjusted results of
operations or financial position for any future period. To
compensate for these limitations, management presents and considers
these non-GAAP measures in conjunction with the Company’s GAAP
results; no non-GAAP measure should be considered in isolation from
or as alternatives to any measure determined in accordance with
GAAP. Readers should review the reconciliations included below, and
should not rely on any single financial measure to evaluate the
Company’s business.
A reconciliation of each historical non-GAAP measure to the most
directly comparable GAAP measure is set forth below.
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Operations
(Unaudited; In thousands,
except per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net revenue
$
599,046
$
559,355
$
1,156,586
$
1,056,988
Cost of goods sold
379,025
358,836
758,379
681,898
Gross profit
220,021
200,519
398,207
375,090
Selling, general and administrative
105,570
98,806
207,666
197,471
Research and development
37,799
50,748
76,489
103,546
Intellectual property legal development
expenses
820
821
2,464
1,585
Acquisition, transaction-related and
integration expenses
—
241
—
675
Restructuring and other charges
82
—
592
731
Change in fair value of contingent
consideration
(6,364
)
(270
)
(3,907
)
(70
)
Insurance recoveries for property losses
and associated expenses
—
(1,911
)
—
(1,911
)
Charges related to legal matters, net
2,017
251,877
1,581
249,551
Other operating expense (income)
13
(1,175
)
(1,211
)
(1,175
)
Operating income (loss)
80,084
(198,618
)
114,533
(175,313
)
Other (expense) income:
Interest expense, net
(50,857
)
(35,623
)
(100,172
)
(68,958
)
Foreign exchange gain (loss), net
421
(5,429
)
2,322
(7,442
)
Other income, net
12
6,939
3,551
9,061
Total other expense, net
(50,424
)
(34,113
)
(94,299
)
(67,339
)
Income (loss) before income taxes
29,660
(232,731
)
20,234
(242,652
)
(Benefit from) provision for income
taxes
(23
)
7,350
645
3,889
Net income (loss)
29,683
(240,081
)
19,589
(246,541
)
Less: Net (income) loss attributable to
non-controlling interests
(17,766
)
119,273
(14,615
)
124,015
Net income (loss) attributable to
Amneal Pharmaceuticals, Inc. before accretion of redeemable
non-controlling interest
11,917
(120,808
)
4,974
(122,526
)
Accretion of redeemable non-controlling
interest
—
—
—
(438
)
Net income (loss) attributable to
Amneal Pharmaceuticals, Inc.
$
11,917
$
(120,808
)
$
4,974
$
(122,964
)
Net income (loss) per share
attributable to Amneal Pharmaceuticals, Inc.'s class A common
stockholders:
Basic
$
0.08
$
(0.80
)
$
0.03
$
(0.82
)
Diluted
$
0.08
$
(0.80
)
$
0.03
$
(0.82
)
Weighted-average common shares
outstanding:
Basic
153,738
150,993
152,928
150,445
Diluted
154,887
150,993
154,575
150,445
Amneal Pharmaceuticals,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited; In
thousands)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
109,284
$
25,976
Restricted cash
5,298
9,251
Trade accounts receivable, net
674,736
741,791
Inventories
550,558
530,735
Prepaid expenses and other current
assets
81,764
103,565
Related party receivables
149
500
Total current assets
1,421,789
1,411,818
Property, plant and equipment, net
459,108
469,815
Goodwill
599,206
598,853
Intangible assets, net
1,015,376
1,096,093
Operating lease right-of-use assets
34,031
38,211
Operating lease right-of-use assets -
related party
16,566
17,910
Financing lease right-of-use assets
61,570
63,424
Other assets
93,240
103,217
Total assets
$
3,700,886
$
3,799,341
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
512,719
$
538,199
Current portion of liabilities for legal
matters
77,011
107,483
Revolving credit facilities
120,000
60,000
Current portion of long-term debt, net
30,405
29,961
Current portion of operating lease
liabilities
9,861
8,321
Current portion of operating lease
liabilities - related party
2,992
2,869
Current portion of financing lease
liabilities
3,219
3,488
Related party payables - short term
21,143
2,479
Total current liabilities
777,350
752,800
Long-term debt, net
2,549,177
2,591,981
Note payable - related party
40,560
39,706
Operating lease liabilities
28,296
32,126
Operating lease liabilities - related
party
14,388
15,914
Financing lease liabilities
59,836
60,769
Related party payables - long term
9,123
9,649
Other long-term liabilities
39,282
87,468
Total long-term liabilities
2,740,662
2,837,613
Redeemable non-controlling interests
32,106
24,949
Total stockholders' equity
150,768
183,979
Total liabilities and stockholders'
equity
$
3,700,886
$
3,799,341
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited; In
thousands)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
19,589
$
(246,541
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
115,261
117,511
Unrealized foreign currency (gain)
loss
(1,561
)
8,014
Amortization of debt issuance costs and
discount
4,523
4,388
Loss on refinancing - revolving credit
facility
—
291
Intangible asset impairment charges
1,283
5,112
Change in fair value of contingent
consideration
(3,907
)
(70
)
Stock-based compensation
14,157
16,327
Inventory provision
41,806
17,748
Insurance recoveries for property and
equipment losses
—
(1,000
)
Other operating charges and credits,
net
3,364
3,449
Changes in assets and liabilities:
Trade accounts receivable, net
66,976
(26,561
)
Inventories
(60,526
)
(65,395
)
Prepaid expenses, other current assets and
other assets
31,898
(119,747
)
Related party receivables
351
(159
)
Accounts payable, accrued expenses and
other liabilities
(107,760
)
273,947
Related party payables
2,913
7,508
Net cash provided by (used in) operating
activities
128,367
(5,178
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(21,691
)
(15,842
)
Saol Acquisition
—
(84,714
)
Acquisition of intangible assets
(1,488
)
(10,000
)
Deposits for future acquisition of
property, plant and equipment
(842
)
(3,955
)
Proceeds from insurance recoveries for
property and equipment losses
—
1,000
Net cash used in investing activities
(24,021
)
(113,511
)
Cash flows from financing
activities:
Payments of deferred financing and
refinancing costs
—
(1,622
)
Payments of principal on debt, revolving
credit facilities, financing leases and other
(87,566
)
(63,010
)
Borrowings on revolving credit
facilities
100,000
85,000
Proceeds from exercise of stock
options
—
239
Employee payroll tax withholding on
restricted stock unit vesting
(2,033
)
(3,291
)
Payments of deferred consideration for
acquisitions - related party
—
(43,998
)
Acquisition of redeemable non-controlling
interest
—
(1,722
)
Tax distributions to non-controlling
interests
(35,557
)
(9,917
)
Net cash used in financing activities
(25,156
)
(38,321
)
Effect of foreign exchange rate on
cash
165
(1,547
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
79,355
(158,557
)
Cash, cash equivalents, and restricted
cash - beginning of period
35,227
256,739
Cash, cash equivalents, and restricted
cash - end of period
$
114,582
$
98,182
Cash and cash equivalents - end of
period
$
109,284
$
91,979
Restricted cash - end of period
5,298
6,203
Cash, cash equivalents, and restricted
cash - end of period
$
114,582
$
98,182
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited, In
thousands)
Reconciliation of Net Income
(Loss) to EBITDA and Adjusted EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss)
$
29,683
$
(240,081
)
$
19,589
$
(246,541
)
Adjusted to add:
Interest expense, net
50,857
35,623
100,172
68,958
(Benefit from) provision for income
taxes
(23
)
7,350
645
3,889
Depreciation and amortization
57,111
59,696
115,261
117,511
EBITDA (Non-GAAP)
$
137,628
$
(137,412
)
$
235,667
$
(56,183
)
Adjusted to add (deduct):
Stock-based compensation expense
6,561
8,262
14,157
16,327
Acquisition, site closure, and idle
facility expenses (1)
1,579
3,173
4,280
8,762
Restructuring and other charges
82
—
493
731
Loss on refinancing
—
291
—
291
Charges related to legal matters, net
(2)
2,017
251,877
6,081
249,551
Asset impairment charges
1,338
5,250
2,071
5,250
Foreign exchange (gain) loss
(421
)
5,429
(2,322
)
7,442
Change in fair value of contingent
consideration
(6,364
)
(270
)
(3,907
)
(70
)
Insurance recoveries for property losses
and
associated expenses
—
(1,911
)
—
(1,911
)
Regulatory approval milestone
—
—
—
5,000
Increase in tax receivable agreement
liability
405
—
1,231
—
Other
3,263
(104
)
4,517
(745
)
Adjusted EBITDA (Non-GAAP)
$
146,088
$
134,585
$
262,268
$
234,445
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In thousands,
except per share amounts)
Reconciliation of Net Income
(Loss) to Adjusted Net Income and Calculation of Adjusted Diluted
Earnings Per Share
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income (loss)
$
29,683
$
(240,081
)
$
19,589
$
(246,541
)
Adjusted to add (deduct):
Non-cash interest
2,112
1,966
3,953
3,948
GAAP (benefit from) provision for income
taxes
(23
)
7,350
645
3,889
Amortization
39,309
40,216
78,920
79,368
Stock-based compensation expense
6,561
8,262
14,157
16,327
Acquisition, site closure expenses, and
idle facility expenses (1)
1,579
3,173
4,280
8,762
Restructuring and other charges
82
—
493
731
Loss on refinancing
—
291
—
291
Charges related to legal matters,
including interest, net (2)
2,725
252,230
7,607
249,904
Asset impairment charges
1,331
5,250
2,064
5,250
Regulatory approval milestone
—
—
—
5,000
Change in fair value of contingent
consideration
(6,364
)
(270
)
(3,907
)
(70
)
Insurance recoveries for property losses
and associated expenses
—
(1,911
)
—
(1,911
)
Increase in tax receivable agreement
liability
405
—
1,231
—
Other
3,261
(103
)
4,664
(603
)
Provision for income taxes (3)
(16,495
)
(17,451
)
(27,324
)
(27,659
)
Net income attributable to non-controlling
interests not associated with our class B common stock
(7,292
)
(1,889
)
(12,687
)
(4,088
)
Adjusted net income (Non-GAAP)
$
56,874
$
57,033
$
93,685
$
92,598
Weighted average diluted shares
outstanding (Non-GAAP) (4)
307,004
304,278
306,691
304,456
Adjusted diluted earnings per share
(Non-GAAP)
$
0.19
$
0.19
$
0.31
$
0.30
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Explanations for
Reconciliations of Net Income (Loss) to EBITDA and Adjusted EBITDA
and
Net Income (Loss) to
Adjusted Net Income and Calculation of Adjusted Diluted Earnings
per Share
(1)
Acquisition, site closure, and idle
facility expenses for the three and six months ended June 30, 2023
primarily included site closure costs associated with the planned
cessation of manufacturing at our Hauppauge, NY facility.
Acquisition, site closure, and idle facility expenses for the three
months ended June 30, 2022 primarily included: (i) integration
costs associated with the acquisition of the baclofen franchise
from certain entities affiliated with Saol International Limited
which closed on February 9, 2022 (the “Saol Acquisition”) and (ii)
site closure costs associated with the planned cessation of
manufacturing at our Hauppauge, NY facility. Acquisition, site
closure, and idle facility expenses for the six months ended June
30, 2022 primarily included: (i) transaction and integration costs
associated with the Saol Acquisition; (ii) integration costs
associated with the acquisition of Puniska Healthcare Pvt. Ltd.
which closed on November 2, 2021; and (iii) site closure costs
associated with the planned cessation of manufacturing at our
Hauppauge, NY facility.
(2)
For the three months ended June 30, 2023,
charges related to legal matters, net primarily related to civil
prescription opioid litigation. For the six months ended June 30,
2023, charges related to legal matters, net primarily related to
civil prescription opioid litigation and other legal proceedings.
For the three and six months ended June 30, 2022, charges related
to legal matters, net, primarily included charges for the
preliminary settlement of the Opana ER® antitrust litigation, net
of insurance recoveries associated with class action shareholder
lawsuits.
(3)
The non-GAAP effective tax rates for the
three and six months ended June 30, 2023 were 22.5% and 22.6%,
respectively. The non-GAAP effective tax rates for the three and
six months ended June 30, 2022 were 23.4% and 23.0%,
respectively.
(4)
Weighted average diluted shares
outstanding consisted of class A common stock and class B common
stock under the if-converted method.
Amneal Pharmaceuticals,
Inc.
Generics Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Three Months Ended June 30,
2023
Three Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
373,701
$
—
$
373,701
$
364,895
$
—
$
364,895
Cost of goods sold (2)
225,189
(13,404
)
211,785
228,535
(19,073
)
209,462
Gross profit
148,512
13,404
161,916
136,360
19,073
155,433
Gross margin %
39.7
%
43.3
%
37.4
%
42.6
%
Selling, general and administrative
(3)
28,040
(2,597
)
25,443
26,558
(1,200
)
25,358
Research and development (4)
31,108
(325
)
30,783
44,174
(1,406
)
42,768
Intellectual property legal development
expenses
801
—
801
778
—
778
Acquisition, transaction-related and
integration expenses
—
—
—
8
(8
)
—
Insurance recoveries for property losses
and associated expenses
—
—
—
(1,911
)
1,911
—
Charges related to legal matters, net
2,017
(2,017
)
—
483
(483
)
—
Other operating loss (income)
13
—
13
(1,175
)
—
(1,175
)
Operating income
$
86,533
$
18,343
$
104,876
$
67,445
$
20,259
$
87,704
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
June 30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense ($0.3 million and $1.3 million),
amortization expense ($10.8 million and $10.2 million),
site closure and idle facility expenses ($1.0 million and
$2.4 million), and asset impairment charges ($1.3 million and
$5.2 million).
(3)
Adjustments for the three months ended
June 30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense ($2.0 million and $0.6 million) and site
closure costs ($0.6 million in each period).
(4)
Adjustments for the three months ended
June 30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense
Amneal Pharmaceuticals,
Inc.
Generics Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Six Months Ended June 30,
2023
Six Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
717,507
$
—
$
717,507
$
682,642
$
—
$
682,642
Cost of goods sold (2)
455,740
(28,846
)
426,894
427,565
(34,164
)
393,401
Gross profit
261,767
28,846
290,613
255,077
34,164
289,241
Gross margin %
36.5
%
40.5
%
37.4
%
42.4
%
Selling, general and administrative
(3)
55,640
(3,876
)
51,764
54,151
(7,450
)
46,701
Research and development (4)
63,467
(1,268
)
62,199
87,395
(2,565
)
84,830
Intellectual property legal development
expenses
2,425
—
2,425
1,550
—
1,550
Acquisition, transaction-related and
integration expenses
—
—
—
8
(8
)
—
Restructuring and other charges
99
—
99
206
(206
)
—
Insurance recoveries for property losses
and associated expenses
—
—
—
(1,911
)
1,911
—
(Credits) charges related to legal
matters, net
(427
)
(4,073
)
(4,500
)
2,157
(2,157
)
—
Other operating income
(1,211
)
—
(1,211
)
(1,175
)
—
(1,175
)
Operating income
$
141,774
$
38,063
$
179,837
$
112,696
$
44,639
$
157,335
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the six months ended June
30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense ($2.0 million and $2.8 million),
amortization expense ($21.6 million and $19.5 million),
site closure and idle facility expenses ($3.1 million and
$7.0 million), asset impairment charges ($2.0 million and $5.2
million), and other ($0.1 million and $(0.3) million).
(3)
Adjustments for the six months ended June
30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense ($2.7 million and $1.3 million), a
regulatory approval milestone (none and $5.0 million), and site
closure costs ($1.2 million and $1.1 million).
(4)
Adjustments for the six months ended June
30, 2023 and 2022, respectively, were comprised of stock-based
compensation expense.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(Unaudited; In
thousands)
Three Months Ended June 30,
2023
Three Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
96,994
$
—
$
96,994
$
97,001
$
—
$
97,001
Cost of goods sold (1)
46,512
(25,844
)
20,668
42,791
(26,878
)
15,913
Gross profit
50,482
25,844
76,326
54,210
26,878
81,088
Gross margin %
52.0
%
78.7
%
55.9
%
83.6
%
Selling, general and administrative
(2)
22,759
(228
)
22,531
23,171
199
23,370
Research and development (2)
6,691
(487
)
6,204
6,574
(403
)
6,171
Intellectual property legal development
expenses
19
—
19
43
—
43
Acquisition, transaction-related and
integration expenses
—
—
—
32
(32
)
—
Restructuring and other charges
82
(82
)
—
—
—
—
Change in fair value of contingent
consideration (3)
(6,364
)
6,364
—
(270
)
270
—
Operating income
$
27,295
$
20,277
$
47,572
$
24,660
$
26,844
$
51,504
(1)
Adjustments for the three months ended
June 30, 2023 and 2022 were comprised of amortization expense.
(2)
Adjustments for the three months ended
June 30, 2023 and 2022 were comprised of stock-based compensation
expense.
(3)
Change in fair value of contingent
consideration for the three months ended June 30, 2023 was
associated with the Saol Acquisition and the acquisition of Kashiv
Specialty Pharmaceuticals, LLC.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(Unaudited; In
thousands)
Six Months Ended June 30,
2023
Six Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
188,672
$
—
$
188,672
$
182,087
$
—
$
182,087
Cost of goods sold (1)
89,703
(52,027
)
37,676
86,644
(53,532
)
33,112
Gross profit
98,969
52,027
150,996
95,443
53,532
148,975
Gross margin %
52.5
%
80.0
%
52.4
%
81.8
%
Selling, general and administrative
(2)
45,138
(414
)
44,724
47,571
(414
)
47,157
Research and development (2)
13,022
(876
)
12,146
16,151
(729
)
15,422
Intellectual property legal development
expenses
39
—
39
35
—
35
Acquisition, transaction-related and
integration expenses
—
—
—
32
(32
)
—
Restructuring and other charges
82
(82
)
—
—
—
—
Change in fair value of contingent
consideration (3)
(3,907
)
3,907
—
(70
)
70
—
Operating income
$
44,595
$
49,492
$
94,087
$
31,724
$
54,637
$
86,361
(1)
Adjustments for the six months ended June
30, 2023 and 2022 were comprised of amortization expense.
(2)
Adjustments for the six months ended June
30, 2023 and 2022 were comprised of stock-based compensation
expense.
(3)
Change in fair value of contingent
consideration for the six months ended June 30, 2023 was associated
with the Saol Acquisition and the acquisition of Kashiv Specialty
Pharmaceuticals, LLC.
Amneal Pharmaceuticals,
Inc.
AvKARE Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Three Months Ended June 30,
2023
Three Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
128,351
$
—
$
128,351
$
97,459
$
—
$
97,459
Cost of goods sold
107,324
—
107,324
87,510
—
87,510
Gross profit
21,027
—
21,027
9,949
—
9,949
Gross margin %
16.4
%
16.4
%
10.2
%
10.2
%
Selling, general and administrative
(2)
14,015
(4,188
)
9,827
12,735
(4,933
)
7,802
Operating income (loss)
$
7,012
$
4,188
$
11,200
$
(2,786
)
$
4,933
$
2,147
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
June 30, 2023 and 2022 were comprised of amortization expense.
Amneal Pharmaceuticals,
Inc.
AvKARE Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Six Months Ended June 30,
2023
Six Months Ended June 30,
2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
250,407
$
—
$
250,407
$
192,259
$
—
$
192,259
Cost of goods sold
212,936
—
212,936
167,689
—
167,689
Gross profit
37,471
—
37,471
24,570
—
24,570
Gross margin %
15.0
%
15.0
%
12.8
%
12.8
%
Selling, general and administrative
(2)
26,955
(7,952
)
19,003
26,145
(9,459
)
16,686
Operating income (loss)
$
10,516
$
7,952
$
18,468
$
(1,575
)
$
9,459
$
7,884
(1)
Operating results for the sale of Amneal products by AvKARE were
included in our Generics segment.
(2)
Adjustments for the six months ended June 30, 2023 and 2022,
respectively, were comprised of amortization expense ($8.4 million
and $9.9 million), and other (($0.4) million in each
period).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230804762364/en/
Anthony DiMeo Head of Investor Relations
anthony.dimeo@amneal.com
Amneal Pharmaceuticals (NYSE:AMRX)
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