AMRX Amneal Pharmaceuticals Holding Co

‒ Q2 2024 Net Revenue of $702 million; GAAP Net Income of $6 million; Diluted Income per Share of $0.02 ‒

‒ Adjusted EBITDA of $162 million; Adjusted Diluted EPS of $0.16 ‒

‒ Raising 2024 Full Year Guidance ‒

‒ CREXONT® U.S. FDA approval represents an exciting new long-term growth driver ‒

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX) (“Amneal” or the “Company”) announced its results today for the second quarter ended June 30, 2024.

“Amneal achieved strong revenues and adjusted EBITDA in the second quarter, and we are pleased to raise full year 2024 guidance driven by broad-based growth across our business. Amneal is a diversified and growing global pharmaceuticals company built on our core strengths in quality, innovation and operational execution. Coupled with this week’s approval of CREXONT for Parkinson’s disease, Amneal is well positioned to continue delivering durable long-term growth. We are excited about the big opportunities ahead as we focus on the most important areas of medicine to create value for patients, providers and all stakeholders,” said Chirag and Chintu Patel, Co-Chief Executive Officers.

Second Quarter 2024 Results

Net revenue in the second quarter of 2024 was $702 million, an increase of 17% compared to $599 million in the second quarter of 2023. Generics net revenue increased 14% driven primarily by biosimilars and new product launches. Specialty net revenue increased 7% driven by promoted products in Neurology and Endocrinology. AvKARE net revenue increased 33% driven by continued growth across its sales channels.

Net income attributable to Amneal Pharmaceuticals, Inc. was $6 million in the second quarter of 2024 compared to $12 million in the second quarter of 2023.

Adjusted EBITDA in the second quarter of 2024 was $162 million, an increase of 11% compared to the second quarter of 2023, reflective of strong revenue performance partially offset by the impact of business mix on gross margins and higher commercial spend to support new products.

Diluted income per share in the second quarter of 2024 was $0.02 compared to $0.08 for the second quarter of 2023, primarily due to lower net income. Adjusted diluted earnings per share in the second quarter of 2024 was $0.16 compared to $0.19 for the second quarter of 2023 due to the aforementioned factor.

The Company presents GAAP and adjusted (non-GAAP) quarterly results. Please refer to the “Non-GAAP Financial Measures” section for more information. In the tables provided below, GAAP to non-GAAP reconciliations are presented.

Raising Full Year 2024 Guidance

The Company is raising its previously provided full year 2024 guidance.

 

Updated Guidance

Prior Guidance

Net revenue

$2.70 billion - $2.80 billion

$2.55 billion - $2.65 billion

Adjusted EBITDA (1)

$610 million - $630 million

$580 million - $620 million

Adjusted diluted EPS (2)

$0.57 - $0.63

$0.53 - $0.63

Operating cash flow (3)

$280 million - $320 million

$260 million - $300 million

Capital expenditures

$60 million - $70 million

$60 million - $70 million

(1)

Includes 100% of Adjusted EBITDA from the AvKARE acquisition.

(2)

Accounts for 35% non-controlling interest in AvKARE. Updated guidance and prior guidance assume weighted-average diluted shares outstanding of approximately 320 million and 317 million for the year ending December 31, 2024, respectively.

(3)

Does not contemplate one-time and non-recurring items such as legal settlements and other discrete items.

Amneal’s 2024 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 today, August 9, 2024, 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 (833) 470-1428 (in the U.S.) with access code 462066. A replay of the conference call will be posted shortly after the call and will be available for seven days. 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. (Nasdaq: AMRX), headquartered in Bridgewater, NJ, is a global pharmaceuticals company. We make healthy possible through the development, manufacturing, and distribution of a diverse portfolio of over 280 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; expected or estimated operating results and financial performance; and statements regarding our positioning, including our ability to drive sustainable long-term growth, 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 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 impact of a prolonged business interruption within our supply chain; 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; legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives; our dependence on information technology systems and infrastructure and the potential for cybersecurity incidents; our ability to attract, hire and retain highly skilled personnel; 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 claims brought against us by 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 dependence on third-party agreements for a portion of our product offerings; 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 potential expansion into additional international markets subjecting us to increased regulatory, economic, social and political uncertainties; 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 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, adjusted net income 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 (loss) per share based on adjusted net income (loss), which is net loss adjusted to (A) exclude (i) non-cash interest, (ii) GAAP provision for (benefit from) income taxes, (iii) amortization, (iv) stock-based compensation, (v) acquisition, site closure expenses, and idle facility expenses, (vi) restructuring and other charges, (vii) charges related to certain legal matters, including interest, net, (viii) asset impairment charges, (ix) change in fair value of contingent consideration, (x) increase in tax receivable agreement liability, (xi) system implementation expense, (xii) other and (xiii) net income attributable to non-controlling interests not associated with our Class B common stock, and (B) include non-GAAP provision for income taxes. Non-GAAP adjusted diluted EPS for the three and six months ended June 30, 2024 was calculated using the weighted average fully diluted shares outstanding of Class A common stock. Non-GAAP adjusted diluted EPS for the three and six months ended June 30, 2023 was calculated using the weighted average diluted shares outstanding of Class A common stock and assuming all shares of Class B common stock were converted to shares of Class A common stock as of January 1, 2023.

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net revenue

$

701,780

 

 

$

599,046

 

 

$

1,360,971

 

 

$

1,156,586

 

Cost of goods sold

 

451,833

 

 

 

379,025

 

 

 

872,964

 

 

 

758,379

 

Gross profit

 

249,947

 

 

 

220,021

 

 

 

488,007

 

 

 

398,207

 

Selling, general and administrative

 

116,462

 

 

 

105,570

 

 

 

229,057

 

 

 

207,666

 

Research and development

 

36,054

 

 

 

37,799

 

 

 

75,352

 

 

 

76,489

 

Intellectual property legal development expenses

 

1,042

 

 

 

820

 

 

 

2,026

 

 

 

2,464

 

Restructuring and other charges

 

220

 

 

 

82

 

 

 

1,690

 

 

 

592

 

Change in fair value of contingent consideration

 

—

 

 

 

(6,364

)

 

 

100

 

 

 

(3,907

)

Charges related to legal matters, net

 

699

 

 

 

2,017

 

 

 

95,058

 

 

 

1,581

 

Other operating expense (income)

 

—

 

 

 

13

 

 

 

—

 

 

 

(1,211

)

Operating income

 

95,470

 

 

 

80,084

 

 

 

84,724

 

 

 

114,533

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

(65,719

)

 

 

(50,857

)

 

 

(131,422

)

 

 

(100,172

)

Foreign exchange (loss) gain, net

 

(262

)

 

 

421

 

 

 

(1,459

)

 

 

2,322

 

Increase in tax receivable agreement liability

 

(13,444

)

 

 

(405

)

 

 

(15,392

)

 

 

(1,231

)

Other income, net

 

4,360

 

 

 

417

 

 

 

8,432

 

 

 

4,782

 

Total other expense, net

 

(75,065

)

 

 

(50,424

)

 

 

(139,841

)

 

 

(94,299

)

Income (loss) before income taxes

 

20,405

 

 

 

29,660

 

 

 

(55,117

)

 

 

20,234

 

Provision for (benefit from) income taxes

 

3,618

 

 

 

(23

)

 

 

9,774

 

 

 

645

 

Net income (loss)

 

16,787

 

 

 

29,683

 

 

 

(64,891

)

 

 

19,589

 

Less: Net income attributable to non-controlling interests

 

(10,793

)

 

 

(17,766

)

 

 

(20,758

)

 

 

(14,615

)

Net income (loss) attributable to Amneal Pharmaceuticals, Inc.

$

5,994

 

 

$

11,917

 

 

$

(85,649

)

 

$

4,974

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders:

 

 

 

 

 

 

 

Basic

$

0.02

 

 

$

0.08

 

 

$

(0.28

)

 

$

0.03

 

Diluted

$

0.02

 

 

$

0.08

 

 

$

(0.28

)

 

$

0.03

 

Weighted-average common shares outstanding(1):

 

 

 

 

 

 

 

Basic

 

309,117

 

 

 

153,738

 

 

 

308,198

 

 

 

152,928

 

Diluted

 

318,957

 

 

 

154,887

 

 

 

308,198

 

 

 

154,575

 

(1)

Following the implementation of the Reorganization on November 7, 2023, all outstanding shares of Old PubCo Class A Common Stock and Old PubCo Class B Common Stock were exchanged for an equivalent number of shares of Class A common stock of the Company. Refer to Note 1. Nature of Operations and Note 8. (Loss) Earnings per Share to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K for additional information.

 

Amneal Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(unaudited; $ in thousands)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

43,769

 

 

$

91,542

Restricted cash

 

5,853

 

 

 

7,565

Trade accounts receivable, net

 

769,871

 

 

 

613,732

Inventories

 

575,624

 

 

 

581,384

Prepaid expenses and other current assets

 

81,596

 

 

 

82,685

Related party receivables

 

8,767

 

 

 

955

Total current assets

 

1,485,480

 

 

 

1,377,863

Property, plant and equipment, net

 

425,380

 

 

 

447,574

Goodwill

 

598,533

 

 

 

598,629

Intangible assets, net

 

819,944

 

 

 

890,423

Operating lease right-of-use assets

 

33,284

 

 

 

30,329

Operating lease right-of-use assets - related party

 

11,974

 

 

 

12,954

Financing lease right-of-use assets

 

58,299

 

 

 

59,280

Other assets

 

77,028

 

 

 

55,517

Total assets

$

3,509,922

 

 

$

3,472,569

Liabilities and Stockholders' (Deficiency) Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

619,194

 

 

$

534,662

Current portion of liabilities for legal matters

 

30,740

 

 

 

76,988

Revolving credit facility

 

179,000

 

 

 

179,000

Current portion of long-term debt, net

 

225,156

 

 

 

34,125

Current portion of operating lease liabilities

 

9,669

 

 

 

9,207

Current portion of operating lease liabilities - related party

 

3,259

 

 

 

2,825

Current portion of financing lease liabilities

 

3,199

 

 

 

2,467

Related party payables - short term

 

12,773

 

 

 

7,321

Current portion of notes payable - related party

 

31,363

 

 

 

—

Total current liabilities

 

1,114,353

 

 

 

846,595

Long-term debt, net

 

2,177,578

 

 

 

2,386,004

Note payable - related party

 

—

 

 

 

41,447

Operating lease liabilities

 

26,782

 

 

 

24,095

Operating lease liabilities - related party

 

11,126

 

 

 

12,787

Financing lease liabilities

 

58,007

 

 

 

58,566

Related party payables - long term

 

16,146

 

 

 

11,776

Liabilities for legal matters - long term

 

85,479

 

 

 

316

Other long-term liabilities

 

24,518

 

 

 

29,679

Total long-term liabilities

 

2,399,636

 

 

 

2,564,670

Redeemable non-controlling interests

 

53,422

 

 

 

41,293

Total stockholders' (deficiency) equity

 

(57,489

)

 

 

20,011

Total liabilities and stockholders' (deficiency) equity

$

3,509,922

 

 

$

3,472,569

 

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(unaudited; $ in thousands)

 

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net (loss) income

$

(64,891

)

 

$

19,589

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

111,100

 

 

 

115,261

 

Unrealized foreign currency loss (gain)

 

2,080

 

 

 

(1,561

)

Amortization of debt issuance costs and discount

 

1,221

 

 

 

4,523

 

Intangible asset impairment charges

 

920

 

 

 

1,283

 

Change in fair value of contingent consideration

 

100

 

 

 

(3,907

)

Stock-based compensation

 

13,446

 

 

 

14,157

 

Inventory provision

 

41,493

 

 

 

41,806

 

Other operating charges and credits, net

 

(1,531

)

 

 

3,364

 

Changes in assets and liabilities:

 

 

 

Trade accounts receivable, net

 

(155,843

)

 

 

66,976

 

Inventories

 

(35,447

)

 

 

(60,526

)

Prepaid expenses, other current assets and other assets

 

(8,418

)

 

 

31,898

 

Related party receivables

 

(628

)

 

 

351

 

Accounts payable, accrued expenses and other liabilities

 

122,026

 

 

 

(107,760

)

Related party payables

 

9,619

 

 

 

2,913

 

Net cash provided by operating activities

 

35,247

 

 

 

128,367

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(19,824

)

 

 

(21,691

)

Acquisition of intangible assets

 

(10,450

)

 

 

(1,488

)

Deposits for future acquisition of property, plant and equipment

 

(940

)

 

 

(842

)

Proceeds from sale of subsidiary

 

4,989

 

 

 

—

 

Net cash used in investing activities

 

(26,225

)

 

 

(24,021

)

Cash flows from financing activities:

 

 

 

Payments of principal on debt, revolving credit facilities, financing leases and other

 

(78,877

)

 

 

(87,566

)

Borrowings on revolving credit facilities

 

48,000

 

 

 

100,000

 

Proceeds from exercise of stock options

 

386

 

 

 

—

 

Employee payroll tax withholding on restricted stock unit vesting

 

(7,371

)

 

 

(2,033

)

Tax distributions to non-controlling interests

 

(8,883

)

 

 

(35,557

)

Payment of principal on notes payable - related party

 

(11,496

)

 

 

—

 

Net cash used in financing activities

 

(58,241

)

 

 

(25,156

)

Effect of foreign exchange rate on cash

 

(266

)

 

 

165

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(49,485

)

 

 

79,355

 

Cash, cash equivalents, and restricted cash - beginning of period

 

99,107

 

 

 

35,227

 

Cash, cash equivalents, and restricted cash - end of period

$

49,622

 

 

$

114,582

 

Cash and cash equivalents - end of period

$

43,769

 

 

$

109,284

 

Restricted cash - end of period

 

5,853

 

 

 

5,298

 

Cash, cash equivalents, and restricted cash - end of period

$

49,622

 

 

$

114,582

 

 

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (loss)

$

16,787

 

 

$

29,683

 

 

$

(64,891

)

 

$

19,589

 

Adjusted to add:

 

 

 

 

 

 

 

Interest expense, net

 

65,719

 

 

 

50,857

 

 

 

131,422

 

 

 

100,172

 

Provision for (benefit from) income taxes

 

3,618

 

 

 

(23

)

 

 

9,774

 

 

 

645

 

Depreciation and amortization

 

55,572

 

 

 

57,111

 

 

 

111,100

 

 

 

115,261

 

EBITDA (Non-GAAP)

$

141,696

 

 

$

137,628

 

 

$

187,405

 

 

$

235,667

 

Adjusted to add (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

6,725

 

 

 

6,561

 

 

 

13,231

 

 

 

14,157

 

Acquisition, site closure, and idle facility expenses (1)

 

579

 

 

 

1,579

 

 

 

1,023

 

 

 

4,280

 

Restructuring and other charges

 

131

 

 

 

82

 

 

 

1,601

 

 

 

493

 

Charges related to legal matters, net (2)

 

699

 

 

 

2,017

 

 

 

95,058

 

 

 

6,081

 

Asset impairment charges

 

—

 

 

 

1,338

 

 

 

1,015

 

 

 

2,071

 

Foreign exchange loss (gain)

 

262

 

 

 

(421

)

 

 

1,459

 

 

 

(2,322

)

Change in fair value of contingent consideration

 

—

 

 

 

(6,364

)

 

 

100

 

 

 

(3,907

)

Increase in tax receivable agreement liability

 

13,444

 

 

 

405

 

 

 

15,392

 

 

 

1,231

 

System implementation expense (3)

 

855

 

 

 

1,641

 

 

 

1,772

 

 

 

2,413

 

Other

 

(2,180

)

 

 

1,622

 

 

 

(3,494

)

 

 

2,104

 

Adjusted EBITDA (Non-GAAP)

$

162,211

 

 

$

146,088

 

 

$

314,562

 

 

$

262,268

 

 

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income (loss)

$

16,787

 

 

$

29,683

 

 

$

(64,891

)

 

$

19,589

 

Adjusted to add (deduct):

 

 

 

 

 

 

 

Non-cash interest

 

547

 

 

 

2,112

 

 

 

629

 

 

 

3,953

 

GAAP provision for (benefit from) income taxes

 

3,618

 

 

 

(23

)

 

 

9,774

 

 

 

645

 

Amortization

 

38,818

 

 

 

39,309

 

 

 

77,489

 

 

 

78,920

 

Stock-based compensation expense

 

6,725

 

 

 

6,561

 

 

 

13,231

 

 

 

14,157

 

Acquisition, site closure expenses, and idle facility

expenses (1)

 

579

 

 

 

1,579

 

 

 

1,023

 

 

 

4,280

 

Restructuring and other charges

 

131

 

 

 

82

 

 

 

1,584

 

 

 

493

 

Charges related to legal matters, including interest, net (2)

 

699

 

 

 

2,725

 

 

 

95,185

 

 

 

7,607

 

Asset impairment charges

 

—

 

 

 

1,331

 

 

 

1,015

 

 

 

2,064

 

Change in fair value of contingent consideration

 

—

 

 

 

(6,364

)

 

 

100

 

 

 

(3,907

)

Increase in tax receivable agreement liability

 

13,444

 

 

 

405

 

 

 

15,392

 

 

 

1,231

 

System implementation expense (3)

 

855

 

 

 

1,641

 

 

 

1,772

 

 

 

2,413

 

Other

 

(2,180

)

 

 

1,620

 

 

 

(3,494

)

 

 

2,251

 

Provision for income taxes (4)

 

(17,800

)

 

 

(16,495

)

 

 

(32,141

)

 

 

(27,324

)

Net income attributable to non-controlling interests not

associated with our Class B common stock

 

(10,793

)

 

 

(7,292

)

 

 

(20,758

)

 

 

(12,687

)

Adjusted net income (Non-GAAP)

$

51,430

 

 

$

56,874

 

 

$

95,910

 

 

$

93,685

 

Weighted average diluted shares outstanding (Non-GAAP) (5)

 

318,957

 

 

 

307,004

 

 

 

317,758

 

 

 

306,691

 

Adjusted diluted earnings per share (Non-GAAP)

$

0.16

 

 

$

0.19

 

 

$

0.30

 

 

$

0.31

 

Amneal Pharmaceuticals, Inc. Non-GAAP Reconciliations (unaudited)

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, 2024 primarily included rent for vacated properties. 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.

(2)

For the six months ended June 30, 2024, charges related to legal matters, net were primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against the Company by political subdivisions and Native American tribes across the United States.

(3)

System implementation expense for the three and six months ended June 30, 2024 and 2023 was primarily for the implementation of software to further integrate our acquired businesses.

(4)

The non-GAAP effective tax rates for the three and six months ended June 30, 2024 were 25.7% and 25.1%, respectively. The non-GAAP effective tax rates for the three and six months ended June 30, 2023 were 22.5% and 22.6%, respectively.

(5)

Weighted average diluted shares outstanding for the three and six months ended June 30, 2024 consisted of fully diluted Class A common stock. Weighted average diluted shares outstanding for the three and six months ended June 30, 2023 consisted of diluted Class A common stock and Class B common stock, as if all shares of Class B common stock were converted to Class A common stock as of January 1, 2023.

 

Amneal Pharmaceuticals, Inc.

Generics Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

427,328

 

 

$

—

 

 

$

427,328

 

 

$

373,701

 

 

$

—

 

 

$

373,701

 

Cost of goods sold (2)

 

260,903

 

 

 

(11,444

)

 

 

249,459

 

 

 

225,189

 

 

 

(13,404

)

 

 

211,785

 

Gross profit

 

166,425

 

 

 

11,444

 

 

 

177,869

 

 

 

148,512

 

 

 

13,404

 

 

 

161,916

 

Gross margin %

 

38.9

%

 

 

 

 

41.6

%

 

 

39.7

%

 

 

 

 

43.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

31,627

 

 

 

(1,591

)

 

 

30,036

 

 

 

28,040

 

 

 

(2,597

)

 

 

25,443

 

Research and development (4)

 

31,703

 

 

 

(584

)

 

 

31,119

 

 

 

31,108

 

 

 

(325

)

 

 

30,783

 

Intellectual property legal development expenses

 

1,032

 

 

 

—

 

 

 

1,032

 

 

 

801

 

 

 

—

 

 

 

801

 

Restructuring and other charges

 

53

 

 

 

(53

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Charges related to legal matters, net

 

699

 

 

 

(699

)

 

 

—

 

 

 

2,017

 

 

 

(2,017

)

 

 

—

 

Other operating income

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

13

 

Operating income

$

101,311

 

 

$

14,371

 

 

$

115,682

 

 

$

86,533

 

 

$

18,343

 

 

$

104,876

 

(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, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($0.9 million and $0.3 million), amortization expense ($10.5 million and $10.8 million), site closure and idle facility expenses (none and $1.0 million), and asset impairment charges (none and $1.3 million).

(3)

Adjustments for the three months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($1.0 million and $2.0 million) and site closure costs ($0.6 million in each period).

(4)

Adjustments for the three months ended June 30, 2024 and 2023 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, 2024

 

Six Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

818,622

 

 

$

—

 

 

$

818,622

 

 

$

717,507

 

 

$

—

 

 

$

717,507

 

Cost of goods sold (2)

 

500,825

 

 

 

(23,712

)

 

 

477,113

 

 

 

455,740

 

 

 

(28,846

)

 

 

426,894

 

Gross profit

 

317,797

 

 

 

23,712

 

 

 

341,509

 

 

 

261,767

 

 

 

28,846

 

 

 

290,613

 

Gross margin %

 

38.8

%

 

 

 

 

41.7

%

 

 

36.5

%

 

 

 

 

40.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

64,712

 

 

 

(3,320

)

 

 

61,392

 

 

 

55,640

 

 

 

(3,876

)

 

 

51,764

 

Research and development (4)

 

66,074

 

 

 

(1,239

)

 

 

64,835

 

 

 

63,467

 

 

 

(1,268

)

 

 

62,199

 

Intellectual property legal development expenses

 

1,992

 

 

 

—

 

 

 

1,992

 

 

 

2,425

 

 

 

—

 

 

 

2,425

 

Restructuring and other charges

 

53

 

 

 

(53

)

 

 

—

 

 

 

99

 

 

 

—

 

 

 

99

 

Charges (credit) related to legal matters, net (5)

 

95,058

 

 

 

(95,058

)

 

 

—

 

 

 

(427

)

 

 

(4,073

)

 

 

(4,500

)

Other operating income

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,211

)

 

 

—

 

 

 

(1,211

)

Operating income

$

89,908

 

 

$

123,382

 

 

$

213,290

 

 

$

141,774

 

 

$

38,063

 

 

$

179,837

 

(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, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($1.8 million and $2.0 million), amortization expense ($20.9 million and $21.6 million), site closure and idle facility expenses (none and $3.1 million), asset impairment charges ($1.0 million and $2.0 million), and other (none and $0.1 million).

(3)

Adjustments for the six months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($2.3 million and $2.7 million) and site closure costs ($1.0 million and $1.2 million).

(4)

Adjustments for the six months ended June 30, 2024 and 2023 were comprised of stock-based compensation expense.

(5)

Adjustments for the six months ended June 30, 2024 were associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against the Company by political subdivisions and Native American tribes across the United States.

 

Amneal Pharmaceuticals, Inc.

Specialty Segment

Reconciliation of GAAP to Non-GAAP Operating Results

(unaudited; $ in thousands)

 

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

104,041

 

 

$

—

 

 

$

104,041

 

 

$

96,994

 

 

$

—

 

 

$

96,994

 

Cost of goods sold (1)

 

46,142

 

 

 

(25,977

)

 

 

20,165

 

 

 

46,512

 

 

 

(25,844

)

 

 

20,668

 

Gross profit

 

57,899

 

 

 

25,977

 

 

 

83,876

 

 

 

50,482

 

 

 

25,844

 

 

 

76,326

 

Gross margin %

 

55.7

%

 

 

 

 

80.6

%

 

 

52.0

%

 

 

 

 

78.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

26,610

 

 

 

(317

)

 

 

26,293

 

 

 

22,759

 

 

 

(228

)

 

 

22,531

 

Research and development (2)

 

4,351

 

 

 

(259

)

 

 

4,092

 

 

 

6,691

 

 

 

(487

)

 

 

6,204

 

Intellectual property legal development expenses

 

10

 

 

 

—

 

 

 

10

 

 

 

19

 

 

 

—

 

 

 

19

 

Restructuring and other charges

 

78

 

 

 

(78

)

 

 

—

 

 

 

82

 

 

 

(82

)

 

 

—

 

Change in fair value of contingent consideration (3)

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,364

)

 

 

6,364

 

 

 

—

 

Operating income

$

26,850

 

 

$

26,631

 

 

$

53,481

 

 

$

27,295

 

 

$

20,277

 

 

$

47,572

 

(1)

Adjustments for the three months ended June 30, 2024 and 2023 were comprised of amortization expense.

(2)

Adjustments for the three months ended June 30, 2024 and 2023 were comprised of stock-based compensation expense.

(3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) 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, 2024

 

Six Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

209,275

 

 

$

—

 

 

$

209,275

 

 

$

188,672

 

 

$

—

 

 

$

188,672

 

Cost of goods sold (1)

 

90,942

 

 

 

(51,955

)

 

 

38,987

 

 

 

89,703

 

 

 

(52,027

)

 

 

37,676

 

Gross profit

 

118,333

 

 

 

51,955

 

 

 

170,288

 

 

 

98,969

 

 

 

52,027

 

 

 

150,996

 

Gross margin %

 

56.5

%

 

 

 

 

81.4

%

 

 

52.5

%

 

 

 

 

80.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

51,806

 

 

 

(588

)

 

 

51,218

 

 

 

45,138

 

 

 

(414

)

 

 

44,724

 

Research and development (2)

 

9,278

 

 

 

(543

)

 

 

8,735

 

 

 

13,022

 

 

 

(876

)

 

 

12,146

 

Intellectual property legal development expenses

 

34

 

 

 

—

 

 

 

34

 

 

 

39

 

 

 

—

 

 

 

39

 

Restructuring and other charges

 

1,024

 

 

 

(1,024

)

 

 

—

 

 

 

82

 

 

 

(82

)

 

 

—

 

Change in fair value of contingent consideration (3)

 

100

 

 

 

(100

)

 

 

—

 

 

 

(3,907

)

 

 

3,907

 

 

 

—

 

Operating income

$

56,091

 

 

$

54,210

 

 

$

110,301

 

 

$

44,595

 

 

$

49,492

 

 

$

94,087

 

(1)

Adjustments for the six months ended June 30, 2024 and 2023 were comprised of amortization expense.

(2)

Adjustments for the six months ended June 30, 2024 and 2023 were comprised of stock-based compensation expense.

(3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) 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, 2024

 

Three Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

170,411

 

 

$

—

 

 

$

170,411

 

 

$

128,351

 

 

$

—

 

 

$

128,351

 

Cost of goods sold

 

144,788

 

 

 

—

 

 

 

144,788

 

 

 

107,324

 

 

 

—

 

 

 

107,324

 

Gross profit

 

25,623

 

 

 

—

 

 

 

25,623

 

 

 

21,027

 

 

 

—

 

 

 

21,027

 

Gross margin %

 

15.0

%

 

 

 

 

15.0

%

 

 

16.4

%

 

 

 

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

14,642

 

 

 

(3,546

)

 

 

11,096

 

 

 

14,015

 

 

 

(4,188

)

 

 

9,827

 

Operating income

$

10,981

 

 

$

3,546

 

 

$

14,527

 

 

$

7,012

 

 

$

4,188

 

 

$

11,200

 

(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, 2024 and 2023 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, 2024

 

Six Months Ended June 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

333,074

 

 

$

—

 

 

$

333,074

 

 

$

250,407

 

 

$

—

 

 

$

250,407

 

Cost of goods sold

 

281,197

 

 

 

—

 

 

 

281,197

 

 

 

212,936

 

 

 

—

 

 

 

212,936

 

Gross profit

 

51,877

 

 

 

—

 

 

 

51,877

 

 

 

37,471

 

 

 

—

 

 

 

37,471

 

Gross margin %

 

15.6

%

 

 

 

 

15.6

%

 

 

15.0

%

 

 

 

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

29,549

 

 

 

(7,091

)

 

 

22,458

 

 

 

26,955

 

 

 

(7,952

)

 

 

19,003

 

Operating income

$

22,328

 

 

$

7,091

 

 

$

29,419

 

 

$

10,516

 

 

$

7,952

 

 

$

18,468

 

(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, 2024 and 2023, respectively, were comprised of amortization expense ($7.1 million and $8.4 million) and other (none and ($0.4) million).

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240809079166/en/

Contact Anthony DiMeo VP, Investor Relations & Media anthony.dimeo@amneal.com