Q4 Business and Financial Highlights:
- Net Sales were $74.2
Million
- Adjusted Gross Margin Better than Expected, Improved vs
Q3
- Cash Was $88 Million at
June 30
- Completed Major Elements of November
2021 Restructuring Plan
Pipeline Updates:
- Pivotal Biosimilar Insulin Glargine Clinical Trial Over 90%
Complete, Top-line Results Anticipated by Year End; BLA Filing On
Track for First Half of 2023
- Expect to File IND for Biosimilar Insulin Aspart by First
Half of 2023
- Generic FLOVENT® DISKUS®
Product On Track for ANDA Filing Early Next Calendar Year,
Granted CGT Status by FDA
- Expect Partner to Commence Pilot PK Trials for Generic
Spiriva® Handihaler® by Year
End 2022
- Licensed a Filed ANDA for Mesalamine Delayed Release Tablets
USP, 1.2 g, from an Existing Partner
- Expect to Launch At Least Four Non-Solid Oral Generic
Products With Limited Competition in Fiscal 2023
TREVOSE,
Pa., Aug. 24, 2022 /PRNewswire/ -- Lannett
Company, Inc. (NYSE: LCI) today reported financial results for its
fiscal 2022 fourth quarter and full year ended June 30, 2022.
"For the quarter, net sales were in line with our expectations,
adjusted EBITDA was at the top end of our guidance range and
adjusted gross margin was better than anticipated, rebounding from
our adjusted gross margin in recent quarters," said Tim Crew, chief executive officer of Lannett.
"Our cash position was approximately $88 million at June
30, 2022; we continue to expect to receive sizable income
tax refunds within the next couple of months.
"With regard to our pipeline, we have added several near-term
product opportunities, of which a few have the potential to be
meaningful contributors to our financial results, especially in the
second half of the current fiscal year. Our durable large market
partnered product opportunities continue to progress and achieve
notable development milestones (details discussed below). As part
of our pre-launch activities for biosimilar insulin, we have
initiated preliminary discussions with a number of states and other
organizations around initiatives and programs to make insulin more
accessible and affordable to millions of patients. We welcome these
initiatives and believe our significant scale and competitive cost
structure will help position us to support and prosper from these
initiatives on affordable insulin.
"Looking ahead, our efforts will be focused on commercializing
recently added product opportunities, which we believe will help
increase our full-year gross margin in fiscal 2023. At the same
time, we intend to maintain operating discipline to reduce expenses
and make the most of our cash resources, all while working to
further develop with our partners our high value pipeline of
insulin and respiratory products, expand our existing strategic
alliances and form new ones."
Key Pipeline Update Subject to FDA Approval
- Company anticipates launching over the next several months
Zolmitriptan, a nasal spray product for migraine and cluster
headaches, and Fludarabine, an injectable product currently in
short supply;
- By the end of the current fiscal year, the company anticipates
launching Sucralfate, an oral suspension product, and two
additional partnered products. Sevoflurane, an inhaled anesthetic
product, and Mesalamine Delayed Release Tablets 1.2 gram;
- Biosimilar insulin glargine. More than 90% of the subject
enrollment goal has been achieved and the pivotal clinical trial
for biosimilar insulin glargine is expected to be completed next
month. Thus far no serious adverse events have been reported.
Top-line results are expected toward the end of this calendar year,
and filing of the Biologics License Application (BLA) is
anticipated next Spring, and thus a potential launch of the product
in the first half of calendar year 2024;
- Biosimilar insulin aspart: The company's partner is producing
insulin aspart at commercial scale and will be requesting a Type 2
meeting with the FDA later this calendar year. An IND filing is
anticipated for later this fiscal year. The company estimates
initiating the clinical study next summer and completing the study
in the spring of calendar 2024. The company anticipates a potential
launch of the product in the middle of calendar year 2025;
- Generic ADVAIR DISKUS®, fluticasone propionate and
salmeterol inhalation powder, remains on priority review. The
company anticipates fully responding to the CRL next year, with a
launch possible in 2024.
- Generic Flovent Diskus®, fluticasone propionate
inhalation powder: the pivotal clinical end-point study and PK
trials for the 100 mcg/blister were successfully completed in the
first attempt. The FDA has granted the company's request for CGT
status and the filing of the ANDA is estimated for earlier next
calendar year;
- Company expects its partner to commence a pilot PK study of
generic Spiriva® Handihaler® by year end and
is targeting an ANDA filing by early 2024.
Restructuring, Cost Reduction Initiatives
The major elements of the company's restructuring plan announced
in November 2021 have been completed.
The transfer of certain products from the company's recently sold
Carmel plant to its main plant is progressing on schedule and the
manufacturing of Lannett labeled product at that site will largely
be completed by the end of this calendar year.
Fourth-Quarter Financial Results: Fiscal 2022 vs Fiscal
2021
GAAP basis:
- Net sales were $74.2 million
compared with $106.0 million
- Gross profit was $7.9 million, or
11% of net sales, compared with $22.7
million, or 21% of net sales
- Asset impairment charges were $53.9
million compared with $18.6
million
- Net loss was $93.3 million, or
$2.30 per share, compared with
$177.9 million, or $4.50 per share
Non-GAAP basis:
- Net sales were $74.2 million
compared with $106.0 million
- Adjusted gross profit was $10.4
million, or 14% of net sales, compared with $26.4 million, or 25% of net sales
- Adjusted interest expense increased to $13.1 million from $12.1
million
- Adjusted net loss was $17.8
million, or $0.44 per share
compared with $7.4 million, or
$0.19 per share
- Negative adjusted EBITDA was $1.3
million versus adjusted EBITDA of $12.1 million
Full-Year Financial Results: Fiscal 2022 vs Fiscal
2021
GAAP basis:
- Net sales were $340.6 million
compared with $478.8 million
- Gross profit was $33.2 million,
or 10% of net sales, compared with $75.6
million, or 16% of net sales
- Restructuring expenses were $2.8
million compared with $4.0
million
- Asset impairment charges were $103.3
million compared with $216.6
million
- Net loss was $231.6 million, or
$5.74 per share, compared with
$363.5 million, or $9.23 per share
Non-GAAP basis:
- Net sales were $340.6 million
compared with $478.8 million
- Adjusted gross profit was $50.0
million, or 15% of net sales, compared with $122.3 million, or 26% of net sales
- Adjusted interest expense increased to $51.7 million from $43.7
million
- Adjusted net loss was $61.0
million, or $1.51 per share,
compared with $1.0 million, or
$0.03 per share
Guidance for Fiscal 2023
Based on its current outlook, the company provided guidance for
fiscal year 2023, as follows:
|
GAAP
|
Adjusted*
|
Net sales
|
$275 million to $300
million
|
$275 million to $300
million
|
Gross margin
%
|
Approximately 13% to
15%
|
Approximately 15% to
17%
|
R&D
expense
|
$23 million to $25
million
|
$23 million to $25
million
|
SG&A
expense
|
$64 million to $67
million
|
$56 million to $59
million
|
Interest and
other
|
Approximately $60
million
|
Approximately $53
million
|
Effective tax
rate
|
Approximately 0% to
4%
|
Approximately 23.5% to
24.5%
|
(Negative) Adjusted
EBITDA
|
N/A
|
($12 million) to $0
million
|
Capital
expenditures
|
Approximately $8
million to $12 million
|
Approximately $8
million to $12 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 fourth quarter and full year ended
June 30, 2022. The conference call
will be available to interested parties by dialing 877-407-9716
from the U.S. or Canada, or
201-493-6779 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., and
ADVAIR DISKUS® and Flovent®
Diskus® are registered trademarks of
GlaxoSmithKline. Spiriva® Handihaler® is
a registered trademark of Boehringer Ingelheim.
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
guidance for fiscal 2023, 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)
|
|
|
|
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
87,854
|
|
$
93,286
|
Accounts receivable,
net
|
56,241
|
|
98,834
|
Inventories
|
|
95,158
|
|
109,545
|
Income taxes
receivable
|
36,793
|
|
35,050
|
Assets held for
sale
|
|
-
|
|
2,678
|
Other current
assets
|
|
14,070
|
|
14,170
|
Total current
assets
|
290,116
|
|
353,563
|
Property, plant and
equipment, net
|
133,178
|
|
166,674
|
Intangible assets,
net
|
|
32,179
|
|
137,835
|
Operating lease
right-of-use asset
|
9,646
|
|
10,559
|
Other
assets
|
|
19,316
|
|
15,106
|
TOTAL
ASSETS
|
|
$
484,435
|
|
$
683,737
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
29,737
|
|
$
29,585
|
Total other expense,
net
|
23,667
|
|
13,077
|
Accrued payroll and
payroll-related expenses
|
8,342
|
|
10,680
|
Rebates
payable
|
|
21,568
|
|
19,025
|
Royalties
payable
|
|
5,677
|
|
13,779
|
Restructuring
liability
|
|
490
|
|
8
|
Current operating lease
liabilities
|
2,064
|
|
2,045
|
Other current
liabilities
|
13,395
|
|
2,270
|
Total current
liabilities
|
104,940
|
|
90,469
|
Long-term debt,
net
|
|
614,948
|
|
590,683
|
Long-term operating
lease liabilities
|
9,994
|
|
11,047
|
Other
liabilities
|
|
5,616
|
|
19,009
|
TOTAL
LIABILITIES
|
|
735,498
|
|
711,208
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
Common stock ($0.001 par value, 100,000,000 shares authorized;
42,269,137 and 40,913,148 shares issued;
|
|
|
|
40,704,572 and
39,576,606 shares outstanding at June 30, 2022 and June 30, 2021,
respectively)
|
42
|
|
41
|
Additional paid-in
capital
|
363,957
|
|
355,239
|
Accumulated
deficit
|
|
(596,386)
|
|
(364,766)
|
Accumulated other
comprehensive loss
|
(411)
|
|
(548)
|
Treasury
stock(1,564,565 and 1,336,542 shares at June 30, 2022 and June
30, 2021, respectively)
|
(18,265)
|
|
(17,437)
|
Total stockholders'
deficit
|
(251,063)
|
|
(27,471)
|
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
$
484,435
|
|
$
683,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
74,189
|
|
$
106,009
|
|
$
340,579
|
|
$
478,778
|
|
|
Cost of
sales
|
|
63,826
|
|
79,597
|
|
294,482
|
|
378,335
|
|
|
Amortization of
intangibles
|
|
2,506
|
|
3,753
|
|
12,931
|
|
24,850
|
|
|
Gross
profit
|
|
7,857
|
|
22,659
|
|
33,166
|
|
75,593
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
6,044
|
|
6,017
|
|
22,362
|
|
24,173
|
|
|
Selling, general and
administrative expenses
|
|
25,755
|
|
21,576
|
|
81,023
|
|
68,078
|
|
|
Restructuring
expenses
|
|
104
|
|
-
|
|
2,777
|
|
4,043
|
|
|
Asset impairment
charges
|
|
53,916
|
|
18,550
|
|
103,277
|
|
216,550
|
|
|
Total operating
expenses
|
|
85,819
|
|
46,143
|
|
209,439
|
|
312,844
|
|
|
Operating income
(loss)
|
|
(77,962)
|
|
(23,484)
|
|
(176,273)
|
|
(237,251)
|
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt
|
|
-
|
|
(10,341)
|
|
-
|
|
(10,341)
|
|
|
Investment
income
|
|
36
|
|
68
|
|
150
|
|
236
|
|
|
Interest
expense
|
|
(14,808)
|
|
(13,217)
|
|
(57,979)
|
|
(53,830)
|
|
|
Other
|
|
(74)
|
|
(1,687)
|
|
178
|
|
(1,664)
|
|
|
Total other expense,
net
|
|
(14,846)
|
|
(25,177)
|
|
(57,651)
|
|
(65,599)
|
|
|
Loss before income
tax
|
|
(92,808)
|
|
(48,661)
|
|
(233,924)
|
|
(302,850)
|
|
|
Income tax expense
(benefit)
|
|
487
|
|
129,225
|
|
(2,304)
|
|
60,625
|
|
|
Net
loss
|
|
$
(93,295)
|
|
$
(177,886)
|
|
$
(231,620)
|
|
$
(363,475)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share (1):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(2.30)
|
|
$
(4.50)
|
|
$
(5.74)
|
|
$
(9.23)
|
|
|
Diluted
|
|
$
(2.30)
|
|
$
(4.50)
|
|
$
(5.74)
|
|
$
(9.23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (1):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
40,619,081
|
|
39,544,909
|
|
40,350,522
|
|
39,391,589
|
|
|
Diluted
|
|
40,619,081
|
|
39,544,909
|
|
40,350,522
|
|
39,391,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
June 30, 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,
net
|
Loss before income
tax
|
Income tax
benefit
|
Net
loss
|
Diluted loss per
share (l)
|
|
|
|
GAAP
Reported
|
$
340,579
|
$
294,482
|
$
12,931
|
$
33,166
|
10 %
|
$
22,362
|
$
81,023
|
$
2,777
|
$
103,277
|
$
(176,273)
|
$
(57,651)
|
$
(233,924)
|
$
(2,304)
|
$
(231,620)
|
$
(5.74)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(12,931)
|
12,931
|
|
-
|
-
|
-
|
-
|
12,931
|
-
|
12,931
|
-
|
12,931
|
|
Cody API business
(b)
|
-
|
(141)
|
-
|
141
|
|
(10)
|
(265)
|
-
|
-
|
416
|
-
|
416
|
-
|
416
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(4,204)
|
-
|
-
|
4,204
|
-
|
4,204
|
-
|
4,204
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(2,777)
|
-
|
2,777
|
-
|
2,777
|
-
|
2,777
|
|
Distribution
agreement renewal costs (e)
|
-
|
-
|
-
|
-
|
|
-
|
(219)
|
-
|
-
|
219
|
-
|
219
|
-
|
219
|
|
Asset impairment
charges (f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(103,277)
|
103,277
|
-
|
103,277
|
-
|
103,277
|
|
Write-downs for excess
and obsolete inventory (g)
|
-
|
(3,244)
|
-
|
3,244
|
|
-
|
-
|
-
|
-
|
3,244
|
-
|
3,244
|
-
|
3,244
|
|
Reimbursement of legal
costs (h)
|
-
|
-
|
-
|
-
|
|
-
|
(19,833)
|
-
|
-
|
19,833
|
-
|
19,833
|
-
|
19,833
|
|
Non-cash interest
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
6,246
|
6,246
|
-
|
6,246
|
|
Other (j)
|
-
|
(509)
|
-
|
509
|
|
-
|
(1,139)
|
-
|
-
|
1,648
|
(776)
|
872
|
-
|
872
|
|
Tax adjustments
(k)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(16,554)
|
16,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
340,579
|
$
290,588
|
$
-
|
$
49,991
|
15 %
|
$
22,352
|
$
55,363
|
$
-
|
$
-
|
$
(27,724)
|
$
(52,181)
|
$
(79,905)
|
$
(18,858)
|
$
(61,047)
|
$
(1.51)
|
(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, the facility and certain equipment at Silarx in
Carmel, NY, and the other product rights intangible assets, which
include various distribution and supply agreements
|
|
|
(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 and settlement 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, separation costs related to the
Company's former Chief Information Officer and a gain on the sale
of various ANDAs to Chartwell, Inc.
|
|
|
|
|
|
(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 twelve months ended June 30, 2022 is
40,350,522 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
June 30, 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 expense,
net
|
Loss before income
tax
|
Income tax
expense
|
Net
loss
|
Diluted loss per
share (n)
|
|
|
|
GAAP
Reported
|
$
478,778
|
$
378,335
|
$
24,850
|
$
75,593
|
16 %
|
$
24,173
|
$
68,078
|
$
4,043
|
$
216,550
|
$
(237,251)
|
$
(65,599)
|
$
(302,850)
|
$
60,625
|
$
(363,475)
|
$
(9.23)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(24,850)
|
24,850
|
|
-
|
-
|
-
|
-
|
24,850
|
-
|
24,850
|
-
|
24,850
|
|
Cody API business
(b)
|
-
|
(270)
|
-
|
270
|
|
(5)
|
(486)
|
-
|
-
|
761
|
-
|
761
|
-
|
761
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(4,204)
|
-
|
-
|
4,204
|
-
|
4,204
|
-
|
4,204
|
|
Branded prescription
drug fee (d)
|
-
|
-
|
-
|
-
|
|
-
|
(831)
|
-
|
-
|
831
|
-
|
831
|
-
|
831
|
|
Restructuring expenses
(e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(4,043)
|
-
|
4,043
|
-
|
4,043
|
-
|
4,043
|
|
Asset impairment
charges (f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(216,550)
|
216,550
|
-
|
216,550
|
-
|
216,550
|
|
Write-downs for excess
and obsolete inventory (g)
|
-
|
(16,623)
|
-
|
16,623
|
|
-
|
-
|
-
|
-
|
16,623
|
-
|
16,623
|
-
|
16,623
|
|
Distribution
agreement renewal costs (h)
|
-
|
(4,966)
|
-
|
4,966
|
|
-
|
-
|
-
|
-
|
4,966
|
-
|
4,966
|
-
|
4,966
|
|
Loss on extinguishment
of debt (i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
10,341
|
10,341
|
-
|
10,341
|
|
Debt refinancing costs
(j)
|
-
|
-
|
-
|
-
|
|
-
|
(2,262)
|
-
|
-
|
2,262
|
-
|
2,262
|
-
|
2,262
|
|
Non-cash interest
(k)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
10,146
|
10,146
|
-
|
10,146
|
|
Other (l)
|
-
|
-
|
-
|
-
|
|
-
|
(5,610)
|
-
|
-
|
5,610
|
1,500
|
7,110
|
-
|
7,110
|
|
Tax adjustments
(m)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(59,763)
|
59,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
478,778
|
$
356,476
|
$
-
|
$
122,302
|
26 %
|
$
24,168
|
$
54,685
|
$
-
|
$
-
|
$
43,449
|
$
(43,612)
|
$
(163)
|
$
862
|
$
(1,025)
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 the
federally mandated branded prescription drug fee related to
Levothyroxine sold under the JSP agreement, which has not been sold
since fiscal year ended June 30, 2019
|
|
|
|
(e)
|
To exclude expenses
associated with the 2020 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
(f)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the intangible asset for a distribution and
supply agreement with Cediprof, Inc. for the Levothyroxine tablets
product
|
|
(g)
|
To exclude write-downs
for excess and obsolete inventory related to the discontinuance of
certain product lines
|
|
|
|
|
|
|
|
|
(h)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
|
|
|
|
(i)
|
To exclude the loss on
extinguishment of debt related to the retirement of the Term Loan B
in April 2021
|
|
|
|
|
|
|
|
|
(j)
|
To exclude legal and
financial advisory costs related to the debt refinancing in April
2021
|
|
|
|
|
|
|
|
|
|
(k)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
(l)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement and costs associated with a legal settlement
|
|
|
|
|
|
|
(m)
|
To exclude the impact
of the full valuation allowance booked against the Company's
deferred tax assets as well as the tax effect of the pre-tax
adjustments included above at applicable tax rates
|
|
|
|
(n)
|
The weighted average
share number for the twelve months ended June 30, 2021 is
39,391,589 for GAAP and the 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
June 30, 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,
net
|
Loss before income
tax
|
Income tax expense
(benefit)
|
Net
loss
|
Diluted loss per
share (j)
|
|
|
|
GAAP
Reported
|
$
74,189
|
$
63,826
|
$
2,506
|
$
7,857
|
11 %
|
$
6,044
|
$
25,755
|
$
104
|
$
53,916
|
$
(77,962)
|
$
(14,846)
|
$
(92,808)
|
$
487
|
$
(93,295)
|
$
(2.30)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(2,506)
|
2,506
|
|
-
|
-
|
-
|
-
|
2,506
|
-
|
2,506
|
-
|
2,506
|
|
Cody API business
(b)
|
-
|
(32)
|
-
|
32
|
|
(4)
|
24
|
-
|
-
|
12
|
-
|
12
|
-
|
12
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
-
|
-
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(104)
|
-
|
104
|
-
|
104
|
-
|
104
|
|
Asset impairment
charges (e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(53,916)
|
53,916
|
-
|
53,916
|
-
|
53,916
|
|
Reimbursement of legal
costs (f)
|
-
|
-
|
-
|
-
|
|
-
|
(11,618)
|
-
|
-
|
11,618
|
-
|
11,618
|
-
|
11,618
|
|
Non-cash interest
(g)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
1,693
|
1,693
|
-
|
1,693
|
|
Other (h)
|
-
|
(22)
|
-
|
22
|
|
3
|
(260)
|
-
|
-
|
279
|
(900)
|
(621)
|
-
|
(621)
|
|
Tax adjustments
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,196)
|
5,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
74,189
|
$
63,772
|
$
-
|
$
10,417
|
14 %
|
$
6,043
|
$
12,850
|
$
-
|
$
-
|
$
(8,476)
|
$
(14,053)
|
$
(22,529)
|
$
(4,709)
|
$
(17,820)
|
$
(0.44)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 asset
impairment charges primarily related to the KUPI product rights
intangible assets and the other product rights intangible assets,
which include various distribution and supply agreements
|
|
(f)
|
To exclude the
reimbursement of legal and settlement 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 and a gain on the sale of
various ANDAs to Chartwell, Inc.
|
|
|
|
|
|
|
(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 June 30, 2022 is 40,619,081
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
June 30, 2021
|
|
Net sales
|
Cost of
sales
|
Amortization of
intangibles
|
Gross
Profit
|
Gross Margin
%
|
R&D
expenses
|
SG&A
expenses
|
Asset impairment
charges
|
Operating income
(loss)
|
Other expense,
net
|
Loss before income
tax
|
Income tax
expense
|
Net
loss
|
Diluted loss per
share (k)
|
|
|
|
GAAP
Reported
|
$
106,009
|
$
79,597
|
$
3,753
|
$
22,659
|
21 %
|
$
6,017
|
$
21,576
|
$
18,550
|
$
(23,484)
|
$
(25,177)
|
$
(48,661)
|
$
129,225
|
$ (177,886)
|
$
(4.50)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(3,753)
|
3,753
|
|
-
|
-
|
-
|
3,753
|
-
|
3,753
|
-
|
3,753
|
|
Cody API business
(b)
|
-
|
(21)
|
-
|
21
|
|
-
|
(13)
|
-
|
34
|
-
|
34
|
-
|
34
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
-
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Branded prescription
drug fee (d)
|
-
|
-
|
-
|
-
|
|
-
|
(831)
|
-
|
831
|
-
|
831
|
-
|
831
|
|
Asset impairment
charges (e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(18,550)
|
18,550
|
-
|
18,550
|
-
|
18,550
|
|
Loss on extinguishment
of debt (f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
10,341
|
10,341
|
-
|
10,341
|
|
Debt refinancing costs
(g)
|
-
|
-
|
-
|
-
|
|
-
|
(2,262)
|
-
|
2,262
|
-
|
2,262
|
-
|
2,262
|
|
Non-cash interest
(h)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
1,073
|
1,073
|
-
|
1,073
|
|
Other (i)
|
-
|
-
|
-
|
-
|
|
-
|
(1,915)
|
-
|
1,915
|
1,500
|
3,415
|
-
|
3,415
|
|
Tax adjustments
(j)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(129,139)
|
129,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
106,009
|
$
79,576
|
$
-
|
$
26,433
|
25 %
|
$
6,017
|
$
15,504
|
$
-
|
$
4,912
|
$
(12,263)
|
$
(7,351)
|
$
86
|
$
(7,437)
|
$
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 the
federally mandated branded prescription drug fee related to
Levothyroxine sold under the JSP agreement, which has not been sold
since fiscal year ended June 30, 2019
|
|
|
(e)
|
To exclude asset
impairment charges primarily related to its intangible asset for a
distribution and supply agreement with Cediprof, Inc. for the
Levothyroxine tablets product
|
|
|
(f)
|
To exclude the loss on
extinguishment of debt related to the retirement of the Term Loan B
in April 2021
|
|
|
|
|
|
|
(g)
|
To exclude legal and
financial advisory costs related to the debt refinancing in April
2021
|
|
|
|
|
|
|
|
(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 and costs associated with a legal settlement
|
|
|
|
|
(j)
|
To exclude the impact
of the full valuation allowance booked against the Company's
deferred tax assets as well as the tax effect of the pre-tax
adjustments included above at applicable tax rates
|
|
(k)
|
The weighted average
share number for the three months ended June 30, 2021 is 39,544,909
for GAAP and non-GAAP loss per share calculations.
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
June 30,
2022
|
|
|
|
|
|
Net
loss
|
|
$
(93,295)
|
|
|
|
|
|
Interest
expense
|
|
14,808
|
|
Depreciation and
amortization
|
|
7,608
|
|
Income tax
expense
|
|
487
|
|
EBITDA
|
|
(70,392)
|
|
|
|
|
|
Share-based
compensation
|
|
1,384
|
|
Inventory
write-down
|
|
1,768
|
|
Asset impairment
charges (a)
|
|
53,916
|
|
Investment
income
|
|
(36)
|
|
Other non-operating
income
|
|
74
|
|
Restructuring
expenses
|
|
104
|
|
Reimbursement of legal
costs (b)
|
|
11,618
|
|
Other
|
|
291
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
$
(1,273)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the other product rights intangible assets,
which include various distribution and supply agreements
|
|
|
(b)
|
To exclude the
reimbursement of legal and settlement costs associated with a
distribution agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2023
Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$275 -
$300
|
|
-
|
|
$275 -
$300
|
|
|
|
|
|
|
|
|
|
Gross margin
percentage
|
|
approx. 13% to
15%
|
|
2 %
|
(a)
|
approx. 15% to
17%
|
|
|
|
|
|
|
|
|
|
R&D
expense
|
|
$23 -
$25
|
|
-
|
|
$23 -
$25
|
|
|
|
|
|
|
|
|
|
SG&A
expense
|
|
$64 -
$67
|
|
($8)
|
(b)
|
$56 -
$59
|
|
|
|
|
|
|
|
|
|
Interest and
other
|
|
approx.
$60
|
|
($7)
|
(c)
|
approx.
$53
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
approx. 0% to
4%
|
|
-
|
|
approx. 23.5% to
24.5%
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
N/A
|
|
N/A
|
|
$(12) -
$0
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$8 -
$12
|
|
-
|
|
$8 -
$12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment
primarily reflects amortization of purchased intangible
assets
|
|
|
|
|
|
|
|
|
|
(b) The adjustment
primarily excludes depreciation on previously capitalized software
integration costs associated with the KUPI acquisition
|
|
|
|
|
|
|
|
|
|
(c) The adjustment
primarily reflects non-cash interest expense associated with debt
issuance costs
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
($ in
millions)
|
|
|
|
|
|
Fiscal Year 2023
Guidance
|
|
Low
|
|
High
|
|
|
|
|
Net
loss
|
$
(111.0)
|
|
$
(101.0)
|
|
|
|
|
Interest
expense
|
60.0
|
|
60.0
|
Depreciation and
amortization
|
24.0
|
|
24.0
|
Income taxes
|
-
|
|
(4.0)
|
EBITDA
|
(27.0)
|
|
(21.0)
|
|
|
|
|
Share-based
compensation
|
6.0
|
|
7.0
|
Inventory
write-down
|
7.0
|
|
9.0
|
Other (a)
|
2.0
|
|
5.0
|
Adjusted EBITDA
(Non-GAAP)
|
$
(12.0)
|
|
$
-
|
|
|
|
|
(a) To primarily
exclude costs related to strategic review
initiatives
|
|
LANNETT COMPANY,
INC.
|
|
NET SALES BY MEDICAL
INDICATION
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
($ in
thousands)
|
June
30,
|
|
June
30,
|
|
Medical
Indication
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Analgesic
|
$
3,212
|
|
$
4,156
|
|
$
15,737
|
|
$
14,684
|
|
Anti-Psychosis
|
2,634
|
|
5,697
|
|
11,790
|
|
43,720
|
|
Cardiovascular
|
12,055
|
|
13,364
|
|
45,376
|
|
65,987
|
|
Central Nervous
System
|
18,023
|
|
23,467
|
|
78,325
|
|
95,115
|
|
Endocrinology
|
4,557
|
|
7,519
|
|
27,491
|
|
27,070
|
|
Gastrointestinal
|
10,054
|
|
15,048
|
|
51,026
|
|
67,540
|
|
Infectious
Disease
|
3,536
|
|
12,175
|
|
28,009
|
|
67,761
|
|
Migraine
|
3,683
|
|
4,612
|
|
16,321
|
|
25,554
|
|
Respiratory/Allergy/Cough/Cold
|
1,670
|
|
3,017
|
|
8,961
|
|
9,258
|
|
Urinary
|
1,421
|
|
1,401
|
|
4,588
|
|
5,786
|
|
Other
|
9,125
|
|
10,651
|
|
41,285
|
|
35,312
|
|
Contract Manufacturing
revenue
|
4,219
|
|
4,902
|
|
11,670
|
|
20,991
|
|
Net
Sales
|
$
74,189
|
|
$
106,009
|
|
$
340,579
|
|
$
478,778
|
|
|
|
|
|
|
|
|
|
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SOURCE Lannett Company, Inc.