Q3 Business and Financial Highlights:
- Net Sales were $78.4
Million
- Cash in Excess of $106 Million
at March 31
- Completed Sale of Liquid Manufacturing Plant for
$10.5 Million; Major Elements of
November 2021 Restructuring Plan
Expected to be Completed by June
30
- Pivotal Biosimilar Insulin Glargine Clinical Trial
Progressing
TREVOSE,
Pa., May 4, 2022 /PRNewswire/ -- Lannett
Company, Inc. (NYSE: LCI) today reported financial results for its
fiscal 2022 third quarter ended March
31, 2022.
"For the quarter, ongoing competitive pressures and unusually
high product returns for a few key products impacted our topline
and gross profit," said Tim Crew,
chief executive officer of Lannett. "Even so, our adjusted gross
margin percentage rose from the previous quarter and our bottom
line was modestly better than our internal estimates. Our cash
position strengthened to more than $106 million at March
31, 2022, in part due to the sale of our liquid
manufacturing plant during the quarter.
"In late March, we initiated the pivotal clinical trial for our
biosimilar insulin glargine, by far the biggest and most important
opportunity currently in our pipeline. The trial is progressing
with approximately 25% of our subject enrollment goal achieved. We
expect top line results for the study will be available toward the
end of this calendar year. If successful, we anticipate filing the
Biologics License Application (BLA) for a biosimilar and
interchangeable insulin glargine to Sanofi's Lantus®
Solostar and, if approved, potentially launching the product in the
first half of 2024. We also are advancing our biosimilar insulin
aspart product, which continues to track to a potential launch in
2025, if approved.
"Looking ahead to the second half of the current calendar year,
we anticipate the existing competitive environment to continue,
which we expect to be partially offset by savings from our recent
restructuring efforts. We also anticipate launching several
products next year with potentially more meaningful financial
contributions than our recent historical average."
Restructuring, Cost Reduction Initiatives -
Update
In November 2021, the company
announced a restructuring plan to further optimize its operations,
improve efficiencies and reduce costs to improve competitiveness.
On March 31, 2022, the company
finalized the sale of its liquid drug manufacturing plant in
Carmel, New York for total
consideration of $10.5 million,
having previously completed the restructuring of its R&D
function and targeted headcount reductions. The transfer of certain
products from the Carmel plant to
the company's main plant is in process and expected to continue
into next calendar year. The major elements of the company's
restructuring plan are expected to be completed by June 30, 2022 and the plan is expected to
generate approximately $20 million of
annual cost savings.
Third Quarter Financial Results: Fiscal 2022 vs Fiscal
2021
GAAP basis:
- Net sales were $78.4 million
compared with $112.4 million
- Gross profit was $3.1 million, or
4% of net sales, compared with $26.5
million, or 24% of net sales
- Restructuring expenses were $1.8
million
- Net loss was $34.9 million, or
$0.86 per share, compared with
$7.1 million, or $0.18 per share
Non-GAAP basis:
- Net sales were $78.4 million
compared with $112.4 million
- Adjusted gross profit was $9.3
million, or 12% of net sales, compared with $30.4 million, or 27% of net sales
- Adjusted interest expense increased to $12.9 million from $9.8
million
- Adjusted net loss was $16.7
million, or $0.41 per share,
versus adjusted net income of $1.0
million, or $0.02 per diluted
share
- Adjusted EBITDA was $98 thousand
compared with $17.0 million
Guidance for Fiscal 2022
Based on its current outlook, the company updated and/or
tightened certain elements of its guidance for fiscal year 2022, as
follows:
|
GAAP
|
Adjusted*
|
Net sales
|
$335 million to $350
million, from $335 million to $360 million
|
$335 million to $350
million, from $335 million to $360 million
|
Gross margin
%
|
Approximately 8.5% to
9.5%, from approximately 10% to 11%
|
Approximately 13.5% to
14.5%, from approximately 14% to 15%
|
R&D
expense
|
$22 million to $24
million, from $23 million to $26 million
|
$22 million to $24
million, from $23 million to $26 million
|
SG&A
expense
|
$71 million to $73
million, from $66.5 million to $69.5 million
|
$55 million to $57
million, from $55 million to $58 million
|
Restructuring
expense
|
$3 million to $4
million
|
$--
|
Asset
impairment
|
$49.4
million
|
$--
|
Interest and
other
|
Approximately $58
million, unchanged
|
Approximately $52
million, unchanged
|
Effective tax
rate
|
Approximately 0% to 3%,
from approximately 0% to 5%
|
Approximately 23.5% to
24.5%, from 23% to 24%
|
Adjusted
EBITDA
|
N/A
|
$0 to $8 million,
unchanged
|
Capital
expenditures
|
Approximately $12
million, from $10 million to $14 million
|
Approximately $12
million, from $10 million to $14 million
|
*A reconciliation of Adjusted amounts to most directly
comparable GAAP amounts can be found in the financial tables
following this release.
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 2022 third quarter ended March 31, 2022. The conference call will be
available to interested parties by dialing 877-344-8082 from the
U.S. or Canada, or 213-992-4618
from international locations. 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 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
and the other non-GAAP financial measures presented in this release
is appropriate to provide additional information to investors.
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 in
the financial tables following 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) asset
impairment charges, (4) non-cash interest expense, as well as (5)
certain other items considered unusual or non-recurring in
nature.
Lantus® is a registered trademark of Sanofi S.A.
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.
Cautionary Statement Regarding Forward-Looking
Statements
This release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical
facts and can be identified by the words "estimate,", "expect,"
"believe," "target," "anticipate" and other similar expressions.
Any such statements, including, but not limited to, statements
regarding the company's competitive environment and other market
conditions; regulatory and operational developments; the timing
related to commencing and successfully completing the pivotal
clinical trials, filing the Biologics License Applications, and
successfully launching any products, including biosimilar insulin
glargine and biosimilar insulin aspart; the potential material
impact of COVID-19 on future financial results; the timing of the
company's restructuring plan and its ability to realize estimated
cost reductions and other benefits therefrom; the company's
financial status and performance; and the company's ability to
achieve the financial metrics stated in the company's updated
guidance for fiscal 2022, 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 beyond the company's control. Such factors 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 the company'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 latest Form 10-K, subsequent Form 8-Ks
and 10-Qs and other documents filed with the Securities and
Exchange Commission from time to time. You should not place undue
reliance upon any such forward-looking statements, which represent
the company's judgment as of the date of this release. To the
fullest extent permitted by law, the company disclaims any intent
or obligation to update any forward-looking statements, whether as
a result of new information, future events or otherwise.
Contact:
|
Robert Jaffe
|
|
Robert Jaffe Co.,
LLC
|
|
(424)
288-4098
|
FINANCIAL SCHEDULES FOLLOW
LANNETT COMPANY,
INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands, except
share and per share data)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
March 31,
2022
|
|
June 30,
2021
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
106,108
|
|
$
93,286
|
Accounts receivable,
net
|
63,974
|
|
98,834
|
Inventories
|
|
95,434
|
|
109,545
|
Income taxes
receivable
|
37,236
|
|
35,050
|
Assets held for
sale
|
|
-
|
|
2,678
|
Other current
assets
|
|
15,953
|
|
14,170
|
Total current
assets
|
318,705
|
|
353,563
|
Property, plant and
equipment, net
|
140,120
|
|
166,674
|
Intangible assets,
net
|
|
88,351
|
|
137,835
|
Operating lease
right-of-use asset
|
10,028
|
|
10,559
|
Other
assets
|
|
15,103
|
|
15,106
|
TOTAL
ASSETS
|
|
$
572,307
|
|
$
683,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
28,571
|
|
$
29,585
|
Accrued
expenses
|
|
15,872
|
|
13,077
|
Accrued payroll and
payroll-related expenses
|
10,817
|
|
10,680
|
Rebates
payable
|
|
24,332
|
|
19,025
|
Royalties
payable
|
|
6,145
|
|
13,779
|
Restructuring
liability
|
|
899
|
|
8
|
Current operating lease
liabilities
|
2,059
|
|
2,045
|
Other current
liabilities
|
5,660
|
|
2,270
|
Total current
liabilities
|
94,355
|
|
90,469
|
Long-term debt,
net
|
|
610,080
|
|
590,683
|
Long-term operating
lease liabilities
|
10,285
|
|
11,047
|
Other
liabilities
|
|
16,895
|
|
19,009
|
TOTAL
LIABILITIES
|
|
731,615
|
|
711,208
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
Common stock ($0.001 par value, 100,000,000 shares authorized;
42,180,724 and 40,913,148 shares issued;
|
|
|
|
40,616,948 and
39,576,606 shares outstanding at March 31, 2022 and June 30, 2021,
respectively)
|
42
|
|
41
|
Additional paid-in
capital
|
362,531
|
|
355,239
|
Accumulated
deficit
|
|
(503,091)
|
|
(364,766)
|
Accumulated other
comprehensive loss
|
(526)
|
|
(548)
|
Treasury
stock(1,563,776 and 1,336,542 shares at March 31, 2022 and June
30, 2021, respectively)
|
(18,264)
|
|
(17,437)
|
Total stockholders'
deficit
|
(159,308)
|
|
(27,471)
|
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
$
572,307
|
|
$
683,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
78,357
|
|
$
112,370
|
|
$
266,390
|
|
$
372,769
|
|
|
Cost of
sales
|
|
72,658
|
|
82,063
|
|
230,656
|
|
298,738
|
|
|
Amortization of
intangibles
|
|
2,621
|
|
3,851
|
|
10,425
|
|
21,097
|
|
|
Gross
profit
|
|
3,078
|
|
26,456
|
|
25,309
|
|
52,934
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
5,807
|
|
5,973
|
|
16,318
|
|
18,156
|
|
|
Selling, general and
administrative expenses
|
|
17,572
|
|
17,636
|
|
55,268
|
|
46,502
|
|
|
Restructuring
expenses
|
|
1,782
|
|
-
|
|
2,673
|
|
4,043
|
|
|
Asset impairment
charges
|
|
-
|
|
-
|
|
49,361
|
|
198,000
|
|
|
Total operating
expenses
|
|
25,161
|
|
23,609
|
|
123,620
|
|
266,701
|
|
|
Operating income
(loss)
|
|
(22,083)
|
|
2,847
|
|
(98,311)
|
|
(213,767)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
Investment
income
|
|
34
|
|
80
|
|
114
|
|
168
|
|
|
Interest
expense
|
|
(14,517)
|
|
(12,631)
|
|
(43,171)
|
|
(40,613)
|
|
|
Other
|
|
303
|
|
18
|
|
252
|
|
23
|
|
|
Total other
expense
|
|
(14,180)
|
|
(12,533)
|
|
(42,805)
|
|
(40,422)
|
|
|
Loss before income
tax
|
|
(36,263)
|
|
(9,686)
|
|
(141,116)
|
|
(254,189)
|
|
|
Income tax
benefit
|
|
(1,365)
|
|
(2,544)
|
|
(2,791)
|
|
(68,600)
|
|
|
Net
loss
|
|
$
(34,898)
|
|
$
(7,142)
|
|
$
(138,325)
|
|
$
(185,589)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share (1):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.86)
|
|
$
(0.18)
|
|
$
(3.44)
|
|
$
(4.72)
|
|
|
Diluted
|
|
$
(0.86)
|
|
$
(0.18)
|
|
$
(3.44)
|
|
$
(4.72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (1):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
40,503,301
|
|
39,511,296
|
|
40,261,330
|
|
39,340,670
|
|
|
Diluted
|
|
40,503,301
|
|
39,511,296
|
|
40,261,330
|
|
39,340,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective with the
Warrants issued on April 22, 2021, the basic and diluted earnings
per share was calculated based on the two-class method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(UNAUDITED)
|
(In thousands, except
percentages, share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
March 31, 2022
|
|
Net sales
|
Cost of
sales
|
Amortization of
intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Asset impairment
charges
|
Operating
loss
|
Other
expense
|
Loss before
income tax
|
Income tax
benefit
|
Net
loss
|
Diluted loss
per share (l)
|
|
|
|
GAAP
Reported
|
$
266,390
|
$
230,656
|
$
10,425
|
$
25,309
|
10%
|
$
16,318
|
$
55,268
|
$
2,673
|
$
49,361
|
$
(98,311)
|
$
(42,805)
|
$
(141,116)
|
$
(2,791)
|
$
(138,325)
|
$
(3.44)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(10,425)
|
10,425
|
|
-
|
-
|
-
|
-
|
10,425
|
-
|
10,425
|
-
|
10,425
|
|
Cody API business
(b)
|
-
|
(109)
|
-
|
109
|
|
(6)
|
(289)
|
-
|
-
|
404
|
-
|
404
|
-
|
404
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(3,153)
|
-
|
-
|
3,153
|
-
|
3,153
|
-
|
3,153
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(2,673)
|
-
|
2,673
|
-
|
2,673
|
-
|
2,673
|
|
Distribution
agreement renewal costs (e)
|
-
|
-
|
-
|
-
|
|
-
|
(219)
|
-
|
-
|
219
|
-
|
219
|
-
|
219
|
|
Asset impairment
charges (f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(49,361)
|
49,361
|
-
|
49,361
|
-
|
49,361
|
|
Write-downs for excess
and obsolete inventory (g)
|
-
|
(3,244)
|
-
|
3,244
|
|
-
|
-
|
-
|
-
|
3,244
|
-
|
3,244
|
-
|
3,244
|
|
Reimbursement of legal
costs (h)
|
-
|
-
|
-
|
-
|
|
-
|
(8,215)
|
-
|
-
|
8,215
|
-
|
8,215
|
-
|
8,215
|
|
Non-cash interest
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
4,553
|
4,553
|
-
|
4,553
|
|
Other (j)
|
-
|
(487)
|
-
|
487
|
|
(3)
|
(879)
|
-
|
-
|
1,369
|
124
|
1,493
|
-
|
1,493
|
|
Tax adjustments
(k)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,358)
|
11,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
266,390
|
$
226,816
|
$
-
|
$
39,574
|
15%
|
$
16,309
|
$
42,513
|
$
-
|
$
-
|
$
(19,248)
|
$
(38,128)
|
$
(57,376)
|
$
(14,149)
|
$
(43,227)
|
$
(1.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
(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 expenses
associated with the 2021 Restructuring Plan
|
|
|
|
|
|
|
|
(e)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
(f)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at Silarx
in Carmel, NY
|
(g)
|
To exclude write-downs
for excess and obsolete inventory related to certain product lines
discontinued as a result of the sale of the Silarx
facility
|
|
(h)
|
To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
|
|
(i)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
(j)
|
To primarily exclude
one-time employee retention awards and separation costs related to
the Company's former Chief Information Officer
|
|
|
(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 nine months ended March 31, 2022 is 40,261,330
for GAAP and non-GAAP loss 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
March 31, 2021
|
|
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 loss
|
Income (loss)
before income
tax
|
Income tax
expense
(benefit)
|
Net income
(loss)
|
Diluted
earnings
(loss) per
share (k)
|
|
|
|
GAAP
Reported
|
$
372,769
|
$
298,738
|
$
21,097
|
$
52,934
|
14%
|
$
18,156
|
$
46,502
|
$
4,043
|
$
198,000
|
$
(213,767)
|
$
(40,422)
|
$
(254,189)
|
$
(68,600)
|
$
(185,589)
|
$
(4.72)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(21,097)
|
21,097
|
|
-
|
-
|
-
|
-
|
21,097
|
-
|
21,097
|
-
|
21,097
|
|
Cody API business
(b)
|
-
|
(249)
|
-
|
249
|
|
(5)
|
(473)
|
-
|
-
|
727
|
-
|
727
|
-
|
727
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(3,153)
|
-
|
-
|
3,153
|
-
|
3,153
|
-
|
3,153
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(4,043)
|
-
|
4,043
|
-
|
4,043
|
-
|
4,043
|
|
Asset impairment
charges (e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(198,000)
|
198,000
|
-
|
198,000
|
-
|
198,000
|
|
Write-downs for excess
and obsolete inventory (f)
|
-
|
(16,623)
|
-
|
16,623
|
|
-
|
-
|
-
|
-
|
16,623
|
-
|
16,623
|
-
|
16,623
|
|
Distribution
agreement renewal costs (g)
|
-
|
(4,966)
|
-
|
4,966
|
|
-
|
-
|
-
|
-
|
4,966
|
-
|
4,966
|
-
|
4,966
|
|
Non-cash interest
(h)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
9,073
|
9,073
|
-
|
9,073
|
|
Other (i)
|
-
|
-
|
-
|
-
|
|
-
|
(3,695)
|
-
|
-
|
3,695
|
-
|
3,695
|
-
|
3,695
|
|
Tax adjustments
(j)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
69,376
|
(69,376)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
372,769
|
$
276,900
|
$
-
|
$
95,869
|
26%
|
$
18,151
|
$
39,181
|
$
-
|
$
-
|
$
38,537
|
$
(31,349)
|
$
7,188
|
$
776
|
$
6,412
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
(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 expenses
associated with the 2020 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets
|
|
|
|
|
|
|
|
|
(f)
|
To exclude write-downs
for excess and obsolete inventory related to the discontinuance of
certain product lines
|
|
|
|
|
|
|
|
|
(g)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
|
|
|
|
(h)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
(i)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
|
|
|
|
|
(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 nine months ended March 31, 2021 is 39,340,670
for GAAP and 40,933,946 for the non-GAAP earnings (loss) 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2022
|
|
Net sales
|
Cost of
sales
|
Amortization of
intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Operating
loss
|
Other
expense
|
Loss before
income tax
|
Income tax
benefit
|
Net
loss
|
Diluted loss per
share (j)
|
|
|
|
GAAP
Reported
|
$
78,357
|
$
72,658
|
$
2,621
|
$
3,078
|
4%
|
$
5,807
|
$
17,572
|
$
1,782
|
$
(22,083)
|
$
(14,180)
|
$
(36,263)
|
$
(1,365)
|
$
(34,898)
|
$
(0.86)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(2,621)
|
2,621
|
|
-
|
-
|
-
|
2,621
|
-
|
2,621
|
-
|
2,621
|
|
Cody API business
(b)
|
-
|
(59)
|
-
|
59
|
|
-
|
(19)
|
-
|
78
|
-
|
78
|
-
|
78
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
-
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(1,782)
|
1,782
|
-
|
1,782
|
-
|
1,782
|
|
Write-downs for excess
and obsolete inventory (e)
|
-
|
(3,244)
|
-
|
3,244
|
|
-
|
-
|
-
|
3,244
|
-
|
3,244
|
-
|
3,244
|
|
Reimbursement of legal
costs (f)
|
-
|
-
|
-
|
-
|
|
-
|
(3,048)
|
-
|
3,048
|
-
|
3,048
|
-
|
3,048
|
|
Non-cash interest
(g)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
1,594
|
1,594
|
-
|
1,594
|
|
Other (h)
|
-
|
(310)
|
-
|
310
|
|
(2)
|
(102)
|
-
|
414
|
124
|
538
|
-
|
538
|
|
Tax adjustments
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,196)
|
4,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
78,357
|
$
69,045
|
$
-
|
$
9,312
|
12%
|
$
5,805
|
$
13,352
|
$
-
|
$
(9,845)
|
$
(12,462)
|
$
(22,307)
|
$
(5,561)
|
$
(16,746)
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
(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 expenses
associated with the 2021 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
(e)
|
To exclude write-downs
for excess and obsolete inventory related to certain product lines
discontinued as a result of the sale of the Silarx
facility
|
|
|
|
|
|
(f)
|
To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
|
|
|
|
|
(g)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
(h)
|
To primarily exclude
one-time employee retention awards
|
|
|
|
|
|
|
|
|
|
|
(i)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
|
(j)
|
The weighted average
share number for the three months ended March 31, 2022 is
40,503,301 for GAAP and non-GAAP loss 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2021
|
|
Net sales
|
Cost of
sales
|
Amortization of
intangibles
|
Gross
Profit
|
Gross Margin
%
|
R&D
expenses
|
SG&A
expenses
|
Operating
income
|
Other
expense
|
Income (loss)
before income
tax
|
Income tax
benefit
|
Net income
(loss)
|
Diluted
earnings (loss)
per share (g)
|
|
|
|
GAAP
Reported
|
$
112,370
|
$
82,063
|
$
3,851
|
$
26,456
|
24%
|
$
5,973
|
$
17,636
|
$
2,847
|
$
(12,533)
|
$
(9,686)
|
$
(2,544)
|
$
(7,142)
|
$
(0.18)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(3,851)
|
3,851
|
|
-
|
-
|
3,851
|
-
|
3,851
|
-
|
3,851
|
|
Cody API business
(b)
|
-
|
(91)
|
-
|
91
|
|
-
|
(18)
|
109
|
-
|
109
|
-
|
109
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Non-cash interest
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
2,823
|
2,823
|
-
|
2,823
|
|
Other (e)
|
-
|
-
|
-
|
-
|
|
-
|
(2,191)
|
2,191
|
-
|
2,191
|
-
|
2,191
|
|
Tax adjustments
(f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
1,923
|
(1,923)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
112,370
|
$
81,972
|
$
-
|
$
30,398
|
27%
|
$
5,973
|
$
14,376
|
$
10,049
|
$
(9,710)
|
$
339
|
$
(621)
|
$
960
|
$
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
(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 non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
(e)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
|
|
|
(f)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
(g)
|
The weighted average
share number for the three months ended March 31, 2021 is
39,511,296 for GAAP and 41,051,998 for the non-GAAP earnings (loss)
per share calculations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March 31,
2022
|
|
|
|
|
|
|
|
Net
loss
|
|
$
(34,898)
|
|
|
|
|
|
|
|
Interest
expense
|
|
14,517
|
|
|
Depreciation and
amortization
|
|
7,788
|
|
|
Income tax
benefit
|
|
(1,365)
|
|
|
EBITDA
|
|
(13,958)
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
1,699
|
|
|
Inventory
write-down
|
|
7,373
|
|
|
Investment
income
|
|
(34)
|
|
|
Other non-operating
income
|
|
(303)
|
|
|
Restructuring
expenses
|
|
1,782
|
|
|
Reimbursement of legal
costs (a)
|
|
3,048
|
|
|
Other (b)
|
|
491
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
$
98
|
|
|
|
|
|
|
(a)
|
To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
|
(b)
|
To primarily exclude
one-time employee retention awards
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
|
($ in
millions)
|
|
|
|
|
|
|
|
Fiscal Year 2022
Guidance
|
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$335 -
$350
|
|
-
|
|
$335 -
$350
|
|
|
Gross margin
percentage
|
|
approx. 8.5% to
9.5%
|
|
5%
|
(a)
|
approx. 13.5% to
14.5%
|
|
|
R&D
expense
|
|
$22 -
$24
|
|
-
|
|
$22 -
$24
|
|
|
SG&A
expense
|
|
$71 -
$73
|
|
($16)
|
(b)
|
$55 -
$57
|
|
|
Restructuring
expense
|
|
$3 -
$4
|
|
($3 -
$4)
|
(c)
|
-
|
|
|
Asset impairment
charges
|
|
$49.4
|
|
($49.4)
|
(d)
|
-
|
|
|
Interest and
other
|
|
approx.
$58
|
|
($6)
|
(e)
|
approx.
$52
|
|
|
Effective tax
rate
|
|
approx. 0% to
3%
|
|
-
|
|
approx. 23.5% to
24.5%
|
|
|
Adjusted
EBITDA
|
|
N/A
|
|
N/A
|
|
$0 -
$8
|
|
|
Capital
expenditures
|
|
approx.
$12
|
|
-
|
|
approx.
$12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment
primarily reflects amortization of purchased intangible assets
related to the acquisition of Kremers Urban Pharmaceuticals, Inc.
("KUPI")
|
(b) The adjustment
primarily excludes depreciation on previously capitalized software
integration costs associated with the KUPI acquisition and the
reimbursement of legal costs associated with a distribution
agreement
|
(c) To exclude expenses
associated with the 2021 Restructuring Plan
|
(d) To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the Company's former facility in Carmel,
NY
|
(e) The adjustment
primarily reflects non-cash interest expense associated with debt
issuance costs
|
LANNETT COMPANY,
INC.
|
|
|
|
|
|
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
|
|
|
|
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2022
Guidance
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(177.0)
|
|
$
(170.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
58.0
|
|
58.0
|
|
|
|
|
|
|
Depreciation and
amortization
|
34.0
|
|
34.0
|
|
|
|
|
|
|
Income taxes
|
-
|
|
(5.2)
|
|
|
|
|
|
|
EBITDA
|
(85.0)
|
|
(83.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
9.0
|
|
9.0
|
|
|
|
|
|
|
Inventory
write-down
|
12.0
|
|
15.0
|
|
|
|
|
|
|
Asset impairment
charges (a)
|
49.4
|
|
49.4
|
|
|
|
|
|
|
Restructuring expenses
(b)
|
3.0
|
|
4.0
|
|
|
|
|
|
|
Reimbursement of legal
costs (c)
|
10.0
|
|
12.0
|
|
|
|
|
|
|
Other (d)
|
1.6
|
|
1.8
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
-
|
|
$
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the Company's former facility in Carmel,
NY
|
(b) To exclude expenses
associated with the 2021 Restructuring Plan
|
|
|
|
|
|
|
(c) To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
(d) To primarily
exclude one-time employee retention awards and separation costs
related to the Company's former Chief Information
Officer
|
|
LANNETT COMPANY,
INC.
|
NET SALES BY MEDICAL
INDICATION
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
($ in
thousands)
|
March
31,
|
|
March
31,
|
Medical
Indication
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Analgesic
|
$
3,292
|
|
$
3,836
|
|
$
12,525
|
|
$
10,528
|
Anti-Psychosis
|
3,346
|
|
11,678
|
|
9,156
|
|
38,023
|
Cardiovascular
|
9,468
|
|
16,573
|
|
33,321
|
|
52,623
|
Central Nervous
System
|
15,177
|
|
24,509
|
|
60,302
|
|
71,648
|
Endocrinology
|
6,792
|
|
6,822
|
|
22,934
|
|
19,551
|
Gastrointestinal
|
11,709
|
|
16,817
|
|
40,972
|
|
52,492
|
Infectious
Disease
|
5,438
|
|
10,610
|
|
24,473
|
|
55,586
|
Migraine
|
3,507
|
|
5,169
|
|
12,638
|
|
20,942
|
Respiratory/Allergy/Cough/Cold
|
2,309
|
|
2,548
|
|
7,291
|
|
6,241
|
Urinary
|
827
|
|
1,566
|
|
3,167
|
|
4,385
|
Other
|
13,873
|
|
8,617
|
|
32,160
|
|
24,661
|
Contract Manufacturing
revenue
|
2,619
|
|
3,625
|
|
7,451
|
|
16,089
|
Net
Sales
|
$
78,357
|
|
$
112,370
|
|
$
266,390
|
|
$
372,769
|
|
|
|
|
|
|
|
|
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SOURCE Lannett Company, Inc.