Teligent, Inc. Announces First Quarter 2021 Earnings Report and Provides Business Update
25 Mai 2021 - 1:00PM
Teligent, Inc. (NASDAQ: TLGT), a New Jersey-based
generics pharmaceutical company, today announced its financial
results for the first quarter of 2021 and provided a business
update.
“As we prepare for the second half of 2021, we
are pleased with the progress being made with respect to
remediation, our strengthened capital position, and the recent
additions to our senior management team and board of directors,”
said Tim Sawyer, Teligent’s President & Chief Executive
Officer. “As noted on our fourth quarter call, we have reduced our
debt by $118 million since June 30, 2020, and we
continue to assess our cost structure so that we can maximize the
value of our existing and future capital. We are also reiterating
our prior guidance that we anticipate informing the FDA on our
inspection readiness sometime during the third quarter of
2021.”
Early 2021 Achievements
- Appointment of Ernest R. De Paolantonio as Chief Financial
Officer of the Company, effective April 15, 2021.
- Appointments of generic industry veteran William S.
Marth and financial expert R. Carter Pate to our
Board of Directors in February 2021.
- As previously announced, in January 2021, the Company
effectuated a series of additional strategic actions in partnership
with its senior lenders and its Series C noteholders to
recapitalize and enhance the Company’s financial flexibility,
including:
- Completion of $77 million debt-for-equity exchange
with Series C noteholders and senior secured lenders; this
transaction, along with financings earlier in 2020, has resulted in
aggregate debt reduction of $118 million since June
30, 2020.
- Amended Second Lien Credit Agreement to provide $4.6
million in incremental financing to support the company’s
ongoing liquidity.
- Additionally, the Company executed and
completed on March 31, 2021 an At-The-Market (ATM) equity offering,
raising gross proceeds of approximately $38.5 million.
First Quarter 2021 - Financial
Highlights
- Consolidated net revenues for the
first quarter of 2021 were $11.6 million, versus $7.4 million
in the first quarter of 2020. The increase of $4.1 million was
driven primarily by timing of orders from private label customers,
wholesale restocking and fewer Canadian supply constraints.
- Cost of revenues
increased by $4.2 million to $12.8 million in the first quarter of
2021 in comparison to the $8.6 million in the first quarter of
2020. Gross Profit percentage improved 5 percentage points to
-10.5% in Q1 2021 from -15.6% in Q1 of the prior year. The increase
in gross profit in the first quarter of 2021 was mainly
attributable to higher sales offset by an increase in inventory
reserves, increased absorption allocations due to lower contract
volume, and price erosion in light of COVID-19.
- Selling, general
and administrative expenses in the first quarter of 2021 decreased
by $0.4 million to $6.3 million as compared to $6.7 million in the
first quarter of 2020. The decrease was primarily due lower
professional fees versus the first Quarter of 2020.
- There was a
negligible impairment charge of $24K in the first quarter of 2021.
An impairment charge was recorded in the first quarter of 2020 of
$8.4 million related to trademark and technology of $4.9 million
and product acquisition costs of $3.5 million.
- Product
development and research expenses were $1.5 million in the first
quarter of 2021 and $1.8 million in the first quarter of 2020. The
change was primarily due to a decrease in personnel costs, outside
testing and pilot batch expenses partially offset by an increase of
API expenses of $0.1million and increase in clinical studies.
- Net Income for
the first quarter of 2021 was $2.2 million as compared to a
net loss of $26.8 million for the first quarter of 2020. The
increase in income was primarily due to a gain on debt
restructuring of $22.4 million offset by higher operating and
interest expense as well as other expenses related to the debt
restructure
Full Year 2021 Financial
GuidanceAs previously noted in our 2020 year-end earnings
release, the Company will not be providing financial guidance for
the year ending December 31, 2021 at this time or in the
immediate term. There are a number of factors which
weigh on our inability to provide such financial guidance,
including, but not limited to, the continuing macroeconomic
volatility triggered by the COVID-19 global pandemic and its
continued impact on the Company’s business plans and efforts to
resolve the Warning Letter issued by the FDA in November 2019,
our dependence on the FDA’s schedule to reinspect the company’s
facilities and conduct the pre-approval inspection of our newly
constructed sterile injectable manufacturing facility
in Buena, New Jersey, and the work we are continuing to
diligently pursue with our financial and strategic advisors to
critically assess the strengths of the company and how we can best
leverage them moving forward. We do, however, look forward to a
time in the future as we complete our work and assessments when we
can provide such financial guidance and report more on some of
these activities being pursued.
FDA Warning Letter Update As
previously disclosed, the Company received a warning letter from
the FDA in November 2019 arising from an
inspection of its Buena, New Jersey manufacturing
facility, as well as an additional comment letter from the FDA in
August 2020. The Company has since provided the FDA with
supplemental submissions outlining additional changes in its
practices, submitting additional documentation to support previous
and ongoing independent assessments, providing updates to the
Company’s organizational structure, and providing further detail in
regard to ongoing remediation projects (including comprehensive
product quality assessments) to ensure all of our products are
safe, effective and compliant.
As part of the Company’s efforts to remediate
the issues identified in the FDA Warning Letter and to strengthen
its quality systems, the Company undertook and completed a
comprehensive review of all of our products during the fourth
quarter of 2020. While the review did not identify material issues
with many of the Company’s products, it did identify issues of
non-conformance with respect to certain products, which resulted in
recalls and halting the production of certain products, which the
Company is actively reviewing and remediating. The Company is
continuing to work diligently to remediate all issues cited by the
FDA and those resulting from its comprehensive quality review, and
continue to have active communications with the FDA regarding its
progress. As previously reported, based on management’s current
assessment of these remediation efforts, the Company believes it
will be ready to inform the FDA of its inspection readiness during
the third quarter. However, since the Company does not control the
timing of the FDA re-inspection of the facility, we cannot predict
a precise time range for the date when FDA will perform the site
re-inspection.
COVID-19 Response Summary In
alignment with the directives in the state of New Jersey, as a
Pharmaceutical manufacturing facility, we are considered
"essential". During the COVID-19 Public Health Emergency and State
of Emergency in order to continue to supply our products to the
patients that need them, we maintained our manufacturing operations
and monitored conditions in order to maintain a safe workplace for
our employees. The Company has taken several preventative measures
to help ensure business continuity, while maintaining safe and
stable operations. We have directed all non-production, Quality or
R&D employees, to continue working from home in accordance with
state and local guidelines while we continue to evaluate and
finalize our return to office protocols. We have implemented social
distancing measures on-site at our manufacturing facility to
protect employees and our products. Our employees are provided
daily personal protective equipment upon their arrival to the site
and we have implemented temperature monitoring services at our
newly established single point of entrance. We have also
implemented a more frequent sanitization process of the facility.
As the Public Health Emergency, State of Emergency and restrictions
have abated, we are in the process of implementing a phased ‘return
to office’ protocol under which we will maintain social distanced
workspace and continue to sanitize our facilities.
About Teligent,
Inc.Teligent is a specialty generic pharmaceutical
company. Our mission is to be a leading player in the specialty
generic prescription drug market. Learn more on our
website www.teligent.com.
Forward-Looking StatementsThis
press release includes certain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, plans, objectives, expectations and intentions, and other
statements contained in this press release that are not historical
facts and statements identified by words such as “plan,” “believe,”
“continue,” “should” or words of similar meaning. Factors that
could cause actual results to differ materially from these
expectations include, but are not limited to: our inability to meet
current or future regulatory requirements in connection with
existing or future ANDAs; our inability to achieve profitability;
our failure to obtain FDA approvals as anticipated; our inability
to execute and implement our business plan and strategy; the
potential lack of market acceptance of our products; our inability
to protect our intellectual property rights; changes in global
political, economic, business, competitive, market and regulatory
factors; and our inability to successfully complete future product
acquisitions. These statements are based on our current beliefs or
expectations and are inherently subject to various risks and
uncertainties, including those set forth under the caption “Risk
Factors” in Teligent, Inc.’s most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other periodic reports we
file with the Securities and Exchange
Commission. Teligent, Inc. does not undertake any
obligation to update any forward-looking statements contained in
this document as a result of new information, future events or
otherwise, except as required by law.
Contact: |
Philip YachmetzTeligent, Inc.(856)
776-4632pyachmetz@teligent.comwww.teligent.com |
Source: Teligent, Inc.
PART IFINANCIAL
INFORMATION
TELIGENT, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
information)
|
|
March 31, 2021(unaudited) |
|
December 31, 2020 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
27,454 |
|
|
|
$ |
5,946 |
|
|
Restricted cash |
|
206 |
|
|
|
206 |
|
|
Accounts receivable, net of allowance for doubtful accounts of
$2,749 and $2,399, as of March 31, 2021 and December 31, 2020,
respectively |
|
9,891 |
|
|
|
11,257 |
|
|
Inventories |
|
20,936 |
|
|
|
23,396 |
|
|
Prepaid expenses and other receivables |
|
2,678 |
|
|
|
3,486 |
|
|
Total current assets |
|
61,165 |
|
|
|
44,291 |
|
|
Property, plant and equipment,
net |
|
15,949 |
|
|
|
16,131 |
|
|
Intangible assets, net |
|
19,473 |
|
|
|
22,964 |
|
|
Goodwill |
|
508 |
|
|
|
501 |
|
|
Other assets |
|
3,683 |
|
|
|
3,901 |
|
|
Total assets |
|
$ |
100,778 |
|
|
|
$ |
87,788 |
|
|
LIABILITIES AND STOCKHOLDERS’
DEFICIT |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
4,734 |
|
|
|
$ |
7,972 |
|
|
Accrued expenses |
|
8,763 |
|
|
|
14,713 |
|
|
Capital lease obligation, current |
|
435 |
|
|
|
436 |
|
|
Total current liabilities |
|
13,932 |
|
|
|
23,121 |
|
|
Series C Senior Secured
Convertible Notes, net of debt discount and debt issuance costs
(face of $0 and $50,323 as of March 31, 2021 and December 31, 2020,
respectively) |
|
— |
|
|
|
31,922 |
|
|
Series D Senior Convertible
Notes, net of debt discount and debt issuance costs (face of $277
and $3,352 as of March 31, 2021 and December 31, 2020,
respectively) |
|
297 |
|
|
|
5,796 |
|
|
Revolver, net of debt issuance
costs (face of $25,000 and $25,000 as of March 31, 2021 and
December 31, 2020, respectively) |
|
25,000 |
|
|
|
25,000 |
|
|
2023 Term Loans, net of debt
issuance costs (face of $83,515 and $102,905 as of March 31, 2021
and December 31, 2020, respectively ) |
|
88,870 |
|
|
|
99,490 |
|
|
Derivative liabilities |
|
— |
|
|
|
7,507 |
|
|
Deferred tax liability |
|
192 |
|
|
|
190 |
|
|
Other long term
liabilities |
|
4,807 |
|
|
|
4,914 |
|
|
Total liabilities |
|
133,098 |
|
|
|
197,940 |
|
|
Commitments and
Contingencies |
|
|
|
|
Mezzanine equity: |
|
|
|
|
Redeemable, convertible preferred stock, Series D preferred stock,
$0.01 par value, 1,000,000 shares authorized; 85.412 shares issued
and outstanding as of March 31, 2021 |
|
15,374 |
|
|
|
— |
|
|
Stockholders’ deficit: |
|
|
|
|
Common stock, $0.01 par value, 100,000,000 shares authorized;
89,428,513 and 21,754,223 shares issued and outstanding as of March
31, 2021 and December 31, 2020, respectively |
|
1,198 |
|
|
|
220 |
|
|
Additional paid-in capital |
|
195,297 |
|
|
|
135,218 |
|
|
Accumulated deficit |
|
(241,343 |
) |
|
|
(243,496 |
) |
|
Accumulated other comprehensive loss |
|
(2,846 |
) |
|
|
(2,094 |
) |
|
Total stockholders’ deficit |
|
(47,694 |
) |
|
|
(110,152 |
) |
|
Total liabilities, mezzanine equity and stockholders' deficit |
|
$ |
100,778 |
|
|
|
$ |
87,788 |
|
|
The accompanying notes are an integral part
of the condensed consolidated financial statements.
TELIGENT, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except shares and per
share information)(Unaudited)
|
|
Three months ended March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
Revenue, net |
|
$ |
11,588 |
|
|
|
$ |
7,447 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Cost of revenues |
|
12,799 |
|
|
|
8,610 |
|
|
Selling, general and administrative expenses |
|
6,272 |
|
|
|
6,717 |
|
|
Impairment charges |
|
24 |
|
|
|
8,373 |
|
|
Product development and research expenses |
|
1,463 |
|
|
|
1,800 |
|
|
Total costs and expenses |
|
20,558 |
|
|
|
25,500 |
|
|
Operating loss |
|
(8,970 |
) |
|
|
(18,053 |
) |
|
|
|
|
|
|
Other Expense: |
|
|
|
|
Foreign currency exchange loss |
|
(2,092 |
) |
|
|
(1,597 |
) |
|
Interest and other expense, net |
|
(4,119 |
) |
|
|
(5,876 |
) |
|
Gain on debt restructuring |
|
22,439 |
|
|
|
— |
|
|
Inducement loss |
|
(1,889 |
) |
|
|
— |
|
|
Change in the fair value of
derivative liabilities |
|
(3,186 |
) |
|
|
(1,258 |
) |
|
Income/(loss) before income
tax expense |
|
2,183 |
|
|
|
(26,784 |
) |
|
|
|
|
|
|
Income tax expense |
|
30 |
|
|
|
52 |
|
|
|
|
|
|
|
Net income/(loss) attributable
to common shareholders |
|
$ |
2,153 |
|
|
|
$ |
(26,836 |
) |
|
|
|
|
|
|
Basic income/(loss) per
share |
|
$ |
0.04 |
|
|
|
$ |
(4.98 |
) |
|
Diluted income/(loss) per
share |
|
$ |
0.03 |
|
|
|
$ |
(4.98 |
) |
|
|
|
|
|
|
Weighted average shares of
common stock outstanding: |
|
|
|
|
Basic shares |
|
58,472,427 |
|
|
|
5,387,933 |
|
|
Diluted shares |
|
77,142,350 |
|
|
|
5,387,933 |
|
|
The accompanying notes are an integral part
of the condensed consolidated financial statements.
TELIGENT, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in
thousands)(Unaudited)
|
|
Three months ended March 31, |
|
|
2021 |
|
2020 |
Cash flows from
operating activities: |
|
|
|
|
Net income/(loss) |
|
$ |
2,153 |
|
|
|
$ |
(26,836 |
) |
|
Reconciliation of net loss to net cash (used in) provided by
operating activities: |
|
|
|
|
Depreciation of fixed assets and leases |
|
182 |
|
|
|
985 |
|
|
Provision for bad debt |
|
350 |
|
|
|
85 |
|
|
Provision for write down of inventory |
|
(1,077 |
) |
|
|
1,394 |
|
|
Stock based compensation |
|
70 |
|
|
|
491 |
|
|
Amortization of debt costs and debt discount |
|
186 |
|
|
|
1,704 |
|
|
Amortization of intangible assets |
|
589 |
|
|
|
741 |
|
|
Non cash lease expense |
|
91 |
|
|
|
103 |
|
|
Foreign currency exchange (gain)/loss |
|
2,092 |
|
|
|
1,597 |
|
|
Loss on impairment of intangible assets |
|
24 |
|
|
|
8,373 |
|
|
Non cash interest expense |
|
3,134 |
|
|
|
1,984 |
|
|
Gain on debt restructuring |
|
(22,439 |
) |
|
|
— |
|
|
Inducement loss |
|
1,889 |
|
|
|
— |
|
|
Change in the fair value of derivative liabilities |
|
3,186 |
|
|
|
1,258 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
1,037 |
|
|
|
11,637 |
|
|
Inventories |
|
3,590 |
|
|
|
(8,186 |
) |
|
Prepaid expenses, other current receivables, and assets |
|
365 |
|
|
|
(58 |
) |
|
Accounts payable and accrued expenses |
|
(6,187 |
) |
|
|
1,889 |
|
|
Operating liabilities |
|
(109 |
) |
|
|
(107 |
) |
|
Net cash used in operating
activities |
|
(10,874 |
) |
|
|
(2,946 |
) |
|
Cash flows from
investing activities: |
|
|
|
|
Capital expenditures |
|
(47 |
) |
|
|
(880 |
) |
|
Net cash used in investing
activities |
|
(47 |
) |
|
|
(880 |
) |
|
Cash flows from
financing activities: |
|
|
|
|
Proceeds from Term Loan 2023 |
|
1,465 |
|
|
|
— |
|
|
Proceeds from ATM |
|
34,940 |
|
|
|
— |
|
|
Debt issuance costs |
|
(3,986 |
) |
|
|
— |
|
|
Principal paid on lease obligation |
|
(4 |
) |
|
|
(3 |
) |
|
Net cash provided by (used in)
financing activities |
|
32,415 |
|
|
|
(3 |
) |
|
Effect of exchange rate on
cash and cash equivalents |
|
104 |
|
|
|
(651 |
) |
|
Net increase (decrease) in
cash, cash equivalents and restricted cash |
|
21,598 |
|
|
|
(4,480 |
) |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
6,712 |
|
|
|
16,182 |
|
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
28,310 |
|
|
|
$ |
11,702 |
|
|
Supplemental Cash flow
information: |
|
|
|
|
Cash payments for interest |
|
$ |
441 |
|
|
|
$ |
388 |
|
|
Cash payments for income taxes |
|
16 |
|
|
|
34 |
|
|
Non-cash operating,
investing and financing transactions: |
|
|
|
|
Acquisition of capital expenditures in accounts payable and accrued
expenses |
|
24 |
|
|
|
183 |
|
|
Capitalized stock compensation in capital expenditures |
|
— |
|
|
|
5 |
|
|
Issuance of Series D preferred stock |
|
15,374 |
|
|
|
— |
|
|
The accompanying notes are an integral part
of the condensed consolidated financial statements.
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