Lannett Announces Fiscal 2020 Second-Quarter Financial Results
PHILADELPHIA, Feb. 5, 2020 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2020 second quarter ended December 31, 2019.
"For our fiscal 2020 second quarter, strong sales across multiple product categories drove solid increases to our net sales and net income over our fiscal 2020 first-quarter results," said Tim Crew, chief executive officer of Lannett. "Our improved topline was due in part to the introduction of seven new products in the second quarter of fiscal 2020, as well as a full quarter of sales of Posaconazole. We plan to commence marketing an additional 10 or so products in the second half of the year, including Numbrino(®), our recently approved, branded topical anesthetic product.
"We remain on track for launching a substantial number of new products in fiscal 2020. At the same time, we are making excellent progress advancing multiple products in our pipeline that have significant upside, as evidenced by the recent human pharmacokinetics and pharmacodynamics clinical trial that met all primary endpoints for our insulin glargine product."
For the fiscal 2020 second quarter on a GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019. Gross profit was $41.3 million, or 30% of net sales, compared with $69.8 million, or 36% of net sales. Net income was $5.1 million, or $0.13 per diluted share, compared with $12.4 million, or $0.32 per diluted share.
For the fiscal 2020 second quarter reported on a Non-GAAP basis, net sales were $136.1 million compared with $193.7 million for the second quarter of fiscal 2019. Adjusted gross profit was $50.2 million, or 37% of net sales, compared with $86.0 million, or 44% of net sales, for the prior-year second quarter. Adjusted interest expense was $13.1 million compared with $17.1 million for the second quarter of fiscal 2019. Adjusted net income was $11.7 million, or $0.27 per diluted share, compared with $33.6 million, or $0.86 per diluted share, for the fiscal 2019 second quarter. Adjusted EBITDA for the fiscal 2020 second quarter was $35.8 million.
Guidance for Fiscal 2020
Based on its current outlook, the company revised certain items in its GAAP guidance and adjusted guidance for fiscal year 2020, the net effect of which is not expected to have an impact on adjusted EBITDA. The full guidance is as follows:
GAAP Adjusted**
Net sales
$530 million to $550 million, up from $525 million to $545 million
$530 million to $550 million, up from $525 million to $545 million
---
Gross margin % Approximately 32.5% to 34.5%, down Approximately 39% to 41%, down from
from approximately 33.5% to 35.5% approximately 40% to 42%
---
R&D expense
$34 million to $36 million, unchanged
$34 million to $36 million, unchanged
---
SG&A expense
$69 million to $72 million, unchanged
$63 million to $66 million, unchanged
---
Restructuring
expense
$2 million to $3 million, down from $2 million to $4 million
$ --
---
Asset impairment
charges
$2 million
$ --
---
Interest and other
$67 million to $69 million, down from $70 million to $72 million
$51 million to $53 million, down from $54 million to $56 million
---
Effective tax rate Approximately 16% to 17%, unchanged Approximately 21% to 22%, down from
approximately 22% to 23%
---
Adjusted EBITDA* N/A
$145 million to $160 million, unchanged
---
Capital
expenditures
$20 million to $25 million, unchanged
$20 million to $25 million, unchanged
---
**A reconciliation of Adjusted
amounts to most directly
comparable GAAP amounts can be
found in the attached financial
tables.
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 2020 second quarter ended December 31, 2019. The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 49357861. 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 news 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, as defined in the company's existing Credit Agreement, is appropriate to provide additional information to investors to demonstrate the company's ability to comply with financial debt covenants. 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 with 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) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature.
*Adjusted EBITDA excludes the same adjustments discussed above, as well as additional adjustments permitted under the company's existing Credit Agreement.
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.
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, successfully commercializing recently introduced products, launching an additional 10 or so products in the second half of the year, including Numbrino(®), and achieving the financial metrics stated in the company's guidance for fiscal 2020, 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 which 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 Lannett'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 Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
FINANCIAL SCHEDULES FOLLOW
LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
ASSETS
(UNAUDITED)
---
Current assets: December 31, 2019 June 30, 2019
---
Cash and cash equivalents $119,176 $140,249
Accounts receivable, net 158,498 164,752
Inventories 152,090 143,971
Prepaid income taxes 6,949 -
Assets held for sale 3,757 9,671
Other current assets 8,709 13,606
Total current assets 449,179 472,249
Property, plant and equipment,
net 183,631 186,670
Intangible assets, net 422,849 411,229
Operating lease right-of-use
assets 6,015 -
Deferred tax assets 111,514 109,305
Other assets 7,896 7,960
TOTAL ASSETS $1,181,084 $1,187,413
===
LIABILITIES
---
Current liabilities:
Accounts payable $30,883 $13,493
Accrued expenses 10,750 5,805
Accrued payroll and payroll-
related expenses 12,238 19,924
Rebates payable 48,447 46,175
Royalties payable 20,298 16,215
Restructuring liability 515 2,315
Income taxes payable - 2,198
Current operating lease
liabilities 1,848 -
Short-term borrowings and
current portion of long-term
debt 101,939 66,845
Other current liabilities 2,851 3,652
Total current liabilities 229,769 176,622
Long-term debt, net 606,073 662,203
Long-term operating lease
liabilities 5,358 -
Other liabilities 14,712 14,547
TOTAL LIABILITIES 855,912 853,372
STOCKHOLDERS' EQUITY
---
Common stock ($0.001 par value,
100,000,000 shares authorized;
39,851,828 and 38,969,518
shares issued; 38,698,403 and
38,010,714 shares outstanding
at December 31, 2019 and June
30, 2019, respectively) 40 39
Additional paid-in capital 317,012 317,023
Retained earnings 25,002 32,075
Accumulated other comprehensive
loss (578) (615)
Treasury stock(1,153,425 and
958,804 shares at December 31,
2019 and June 30, 2019,
respectively) (16,304) (14,481)
Total stockholders' equity 325,172 334,041
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,181,084 $1,187,413
===
LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(UNAUDITED) (UNAUDITED)
Three months ended Six months ended
December 31, December 31,
2019 2018 2019 2018
Net sales $136,110 $193,718 $263,452 $348,772
Cost of sales 86,663 115,751 164,319 203,441
Amortization of intangibles 8,153 8,157 15,181 16,380
Gross profit 41,294 69,810 83,952 128,951
Operating expenses:
Research and development
expenses 6,906 9,723 15,846 19,533
Selling, general, and
administrative expenses 17,421 23,197 38,729 43,785
Restructuring expenses 192 213 1,580 1,235
Asset impairment charges 1,618 369,499
Total operating expenses 24,519 33,133 57,773 434,052
Operating income (loss) 16,775 36,677 26,179 (305,101)
Other income (loss):
Loss on extinguishment of debt (2,145)
Investment income 430 556 1,159 935
Interest expense (16,694) (21,512) (35,986) (42,945)
Other (735) (712) 199 (1,008)
Total other loss (16,999) (21,668) (36,773) (43,018)
Income (loss) before income tax (224) 15,009 (10,594) (348,119)
Income tax expense (benefit) (5,308) 2,647 (3,521) (72,953)
Net income (loss) $5,084 $12,362 $(7,073) $(275,166)
Earnings (loss) per common
share:
Basic $0.13 $0.33 $(0.18) $(7.30)
Diluted (1) $0.13 $0.32 $(0.18) $(7.30)
Weighted average common shares
outstanding:
Basic 38,605,052 37,761,176 38,457,159 37,674,200
Diluted (1) 40,557,503 39,112,547 38,457,159 37,674,200
(1) Effective with the 4.5%
Senior Convertible Note
issued on September 27, 2019,
the diluted earnings per
share was calculated based on
the "if-converted" method.
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 December 31, 2019
---
Net sales
Cost of
Amortization
Gross Gross
R&D
SG&A
Restructuring
Operating
Other
Income (loss)
Income tax Net income
Diluted
sales of intangibles Profit Margin % expense expense expenses income income before income expense earnings per
(loss) tax (benefit) share (i)
---
GAAP Reported $136,110 $86,663 $8,153 $41,294 30% $6,906 $17,421 $192 $16,775 $(16,999) $(224) $(5,308) $5,084 $0.13
Adjustments:
---
Amortization of intangibles
(a) - (8,153) 8,153 8,153 8,153 8,153
Cody API business (b) - (206) 206 (85) (161) 452 452 452
Depreciation on capitalized
software costs (c) - (1,058) 1,058 1,058 1,058
Decommissioning of
Philadelphia sites (d) - (303) 303 303 303 303
Restructuring expenses (e) - (192) 192 192 192
Non-cash interest (f) - 3,563 3,563 3,563
Other (g) - (209) 209 (135) 344 630 974 974
Tax adjustments (h) - 8,111 (8,111)
Non-GAAP Adjusted $136,110 $85,945
$ - $50,165 37% $6,821 $16,067
$ - $27,277 $(12,806) $14,471 $2,803 $11,668 $0.27
===
(a) To exclude
amortization of
purchased
intangible
assets
primarily
related to the
acquisitions of
KUPI and Silarx
Pharmaceuticals,
Inc.
(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
costs related
to the
decommissioning
and shutdown of
the
Philadelphia
manufacturing
and
distribution
sites
(e) To exclude
expenses
associated with
the Cody API
Restructuring
Plan
(f) To exclude non-
cash interest
expense
associated with
debt issuance
costs
(g) To primarily
exclude a
settlement
related to a
shareholder
derivative
lawsuit against
certain current
and former
officers and
directors of
the Company
(h) To exclude the
tax effect of
the pre-tax
adjustments
included above
at applicable
tax rates
(i) The weighted
average share
number for the
three months
ended December
31, 2019 is
40,557,503 for
GAAP and
46,198,445 for
the non-GAAP
earnings per
share
calculations.
Effective with
the 4.5% Senior
Convertible
Note issued on
September 27,
2019, the
diluted
earnings per
share was
calculated
based on the
"if-converted"
method.
LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
(In thousands, except percentages, share and per share data)
Six months ended December 31, 2019
---
Net sales
Cost of sales
Amortization
Gross Gross
R&D
SG&A
Restructuring
Asset
Operating
Other
Income (loss)
Income tax Net income
Diluted
of intangibles Profit Margin % expense expense expenses impairment income income before income expense (loss) earnings
charges (loss) tax (benefit) (loss) per
share (k)
---
GAAP Reported $263,452 $164,319 $15,181 $83,952 32% $15,846 $38,729 $1,580 1,618 $26,179 $(36,773) $(10,594) $(3,521) $(7,073) $(0.18)
Adjustments:
---
Amortization of intangibles
(a) - (15,181) 15,181 15,181 15,181 15,181
Cody API business (b) - (1,928) 1,928 (505) (375) 2,808 2,808 2,808
Depreciation on capitalized
software costs (c) - (2,117) 2,117 2,117 2,117
Decommissioning of
Philadelphia sites (d) - (1,292) 1,292 1,292 1,292 1,292
Restructuring expenses (e) - (1,580) 1,580 1,580 1,580
Asset impairment charges
(f) - (1,618) 1,618 1,618 1,618
Non-cash interest (g) - 7,571 7,571 7,571
Loss on extinguishment of
debt (h) - 2,145 2,145 2,145
Other (i) - (417) 417 (2,224) 2,641 (336) 2,305 2,305
Tax adjustments (j) - 9,110 (9,110)
Non-GAAP Adjusted $263,452 $160,682
$ - $102,770 39% $15,341 $34,013
$ -
$ - $53,416 $(27,393) $26,023 $5,589 $20,434 $0.49
===
(a) To exclude
amortization of
purchased
intangible
assets
primarily
related to the
acquisitions of
KUPI and Silarx
Pharmaceuticals,
Inc.
(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
costs related
to the
decommissioning
and shutdown of
the
Philadelphia
manufacturing
and
distribution
sites
(e) To exclude
expenses
associated with
the Cody API
Restructuring
Plan
(f) To exclude
impairment
charges
primarily
associated with
an operating
lease right-
of-use asset
(g) To exclude non-
cash interest
expense
associated with
debt issuance
costs
(h) To exclude the
loss on
extinguishment
of debt
primarily
related to the
partial
repayment of
the outstanding
Term Loan A
balance
(i) To primarily
exclude accrued
separation
costs related
to the
Company's
former Chief
Financial
Officer as well
as gains on
sales of assets
previously held
for sale,
partially
offset by legal
settlements
(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
six months
ended December
31, 2019 is
38,457,159 for
GAAP and
43,723,412 for
the non-GAAP
earnings (loss)
per share
calculations.
Effective with
the 4.5% Senior
Convertible
Note issued on
September 27,
2019, the
diluted
earnings per
share was
calculated
based on the
"if-converted"
method.
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 December 31, 2018
---
Net sales
Cost of sales
Amortization
Gross Gross
R&D
SG&A
Restructuring
Operating
Other
Income
Income tax Net income
Diluted
of intangibles Profit Margin % expenses expenses expenses income income before expense earnings
(loss) income tax per share (k)
---
GAAP Reported $193,718 $115,751 $8,157 $69,810 36% $9,723 $23,197 $213 $36,677 $(21,668) $15,009 $2,647 $12,362 $0.32
Adjustments:
---
Depreciation of fixed
assets step-up (a) - (1,124) 1,124 1,124 1,124 1,124
Amortization of intangibles
(b) - (8,157) 8,157 8,157 8,157 8,157
Cody API business Held for
Sale (c) - (3,486) 3,486 (862) 34 4,314 4,314 4,314
Depreciation on capitalized
software costs (d) - (1,058) 1,058 1,058 1,058
Legal and financial
advisory costs (e) - (2,430) 2,430 2,430 2,430
Decommissioning of
Philadelphia sites (f) - (2,265) 2,265 2,265 583 2,848 2,848
Restructuring expenses (g) - (213) 213 213 213
Non-cash interest (h) - 4,396 4,396 4,396
Other (i) - (1,126) 1,126 (210) (2,318) 3,654 285 3,939 3,939
Tax adjustments (j) - 7,199 (7,199)
Non-GAAP Adjusted $193,718 $107,750
$ - $85,968 44% $8,651 $17,425
$ - $59,892 $(16,404) $43,488 $9,846 $33,642 $0.86
===
(a) To exclude
depreciation of
a fair value
step-up in
property, plant
and equipment
related to the
acquisition of
Kremers Urban
Pharmaceuticals,
Inc. ("KUPI")
(b) To exclude
amortization of
purchased
intangible
assets
primarily
related to the
acquisitions of
KUPI and Silarx
Pharmaceuticals,
Inc.
(c) To exclude the
operating
results of the
Cody API
business Held
for Sale which
was classified
as Held for
Sale as of
September 30,
2018
(d) To exclude
depreciation on
previously
capitalized
software
integration
costs
associated with
the KUPI
acquisition
(e) To exclude legal
and financial
advisory costs
primarily
related to
exploring and
evaluating debt
and capital
structure
alternatives,
including the
December 2018
amendment to
our Credit
Agreement
(f) To exclude the
costs
associated with
the
decommissioning
and shutdown of
the
Philadelphia
manufacturing
and
distribution
sites
(g) To exclude
expenses
associated with
the 2016
Restructuring
Plan as well as
the Cody
Restructuring
Plan
(h) To exclude non-
cash interest
expense
associated with
debt issuance
costs
(i) To primarily
exclude
separation
costs related
to the
Company's cost
reduction plan,
as well as a
special
recognition
incentive
payment
(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
three months
ended December
31, 2018 is
39,112,547 for
both the GAAP
and the non-
GAAP earnings
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)
Six months ended December 31, 2018
---
Net sales
Cost of sales
Amortization
Gross Gross
R&D
SG&A
Restructuring
Asset
Operating
Other
Income
Income tax
Net income Diluted
of intangibles Profit Margin % expenses expenses expenses impairment income income before expense (loss) earnings
charges (loss) (loss) income tax (benefit) (loss) per
(loss) share (l)
---
GAAP Reported $348,772 $203,441 $16,380 $128,951 37% $19,533 $43,785 $1,235 $369,499 $(305,101) $(43,018) $(348,119) $(72,953) $(275,166) $(7.30)
Adjustments:
---
Depreciation of fixed
assets step-up (a) - (2,459) 2,459 2,459 2,459 2,459
Amortization of intangibles
(b) - (16,380) 16,380 16,380 16,380 16,380
Cody API business Held for
Sale (c) - (3,486) 3,486 (862) 34 4,314 4,314 4,314
Depreciation on capitalized
software costs (d) - (2,116) 2,116 2,116 2,116
Legal and financial
advisory costs (e) - (2,430) 2,430 2,430 2,430
Decommissioning of
Philadelphia sites (f) - (2,265) 2,265 2,265 583 2,848 2,848
Restructuring expenses (g) - (1,235) 1,235 1,235 1,235
Asset impairment charges
(h) - (369,499) 369,499 369,499 369,499
Non-cash interest (i) - 8,934 8,934 8,934
Other (j) - (1,126) 1,126 (210) (2,600) 3,936 285 4,221 4,221
Tax adjustments (k) - 88,703 (88,703)
Non-GAAP Adjusted $348,772 $194,105
$ - $154,667 44% $18,461 $36,673
$ -
$ - $99,533 $(33,216) $66,317 $15,750 $50,567 $1.30
===
(a) To exclude depreciation of a fair value
step-up in property, plant and equipment
related to the acquisition of Kremers
Urban Pharmaceuticals, Inc. ("KUPI")
(b) To exclude amortization of purchased
intangible assets primarily related to
the acquisitions of KUPI and Silarx
Pharmaceuticals, Inc.
(c) To exclude the operating results of the
Cody API business Held for Sale which was
classified as Held for Sale as of
September 30, 2018
(d) To exclude depreciation on previously
capitalized software integration costs
associated with the KUPI acquisition
(e) To exclude legal and financial advisory
costs primarily related to exploring and
evaluating debt and capital structure
alternatives, including the December 2018
amendment to our Credit Agreement
(f) To exclude the costs associated with the
decommissioning and shutdown of the
Philadelphia manufacturing and
distribution sites
(g) To exclude expenses associated with the
2016 Restructuring Plan as well as the
Cody Restructuring Plan
(h) To exclude asset impairment charges
related to goodwill and other long-lived
assets
(i) To exclude non-cash interest expense
associated with debt issuance costs
(j) To primarily exclude separation costs
related to the Company's cost reduction
plan, as well as a special recognition
incentive payment
(k) To exclude the tax effect of the pre-tax
adjustments included above at applicable
tax rates
(l) The weighted average share number for the
six months ended December 31, 2018 is
37,674,200 for GAAP and 38,937,705 for
the non-GAAP earnings (loss) per share
calculations
LANNETT COMPANY, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED)
($ in thousands)
Three months ended
December 31, 2019
Net income $5,084
Interest expense 16,694
Depreciation and
amortization 14,089
Income tax
expense (5,308)
EBITDA 30,559
Share-based
compensation 2,007
Inventory write-
down 2,544
Investment
income (430)
Other non-
operating loss 735
Restructuring
expenses 192
Restructuring
payments (844)
Cody API
business (a) 452
Decommissioning
of Philadelphia
sites (b) 303
Other 269
Adjusted EBITDA
(Non-GAAP) $35,787
(a) To exclude the operating results of the
ceased Cody API business
(b) To exclude the costs related to the
decommissioning and shutdown of the
Philadelphia manufacturing and
distribution sites
LANNETT COMPANY, INC.
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
($ in millions)
Fiscal Year 2020 Guidance
Non-GAAP
GAAP Adjustments
Adjusted
Net sales
$530 - $550
$530 - $550
Gross margin percentage approx. 32.5% to 34.5% 6.5%
(a) approx. 39% to 41%
R&D expense
$34 - $36
$34 - $36
SG&A expense
$69 - $72 ($6)
(b)
$63 - $66
Restructuring expense
$2 - $3
($2 - $3)
(c)
Asset impairment charges $2 ($2)
(d)
Interest and other
$67 - $69 ($16)
(e)
$51 - $53
Effective tax rate approx. 16% to 17% 5%
(f) approx. 21% to 22%
Adjusted EBITDA N/A N/A
$145 - $160
Capital expenditures
$20 - $25
$20 - $25
(a) The adjustment primarily reflects
amortization of purchased intangible
assets related to the acquisition of
Kremers Urban Pharmaceuticals, Inc.
("KUPI")
(b) The adjustment primarily excludes
depreciation on previously capitalized
software integration costs associated
with the KUPI acquisition
(c) To exclude expenses associated with
the Cody API Restructuring Plan
(d) This adjustment primarily excludes an
impairment charge associated with an
operating lease right-of-use asset
(e) The adjustment primarily reflects
non-cash interest expense associated
with debt issuance costs
(f) The adjustment reflects the impact of
tax credits and deductions relative to
expected annual pre-tax income
LANNETT COMPANY, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (UNAUDITED)
($ in millions)
Fiscal Year 2020
Guidance
Low High
---
Net income (loss) $(2.0) $6.0
Interest expense 67.0 69.0
Depreciation and
amortization 56.0 57.0
Income taxes - 2.0
EBITDA 121.0 134.0
Share-based
compensation 10.0 11.0
Inventory write-
down 9.0 10.0
Separation costs 1.0 1.0
Cody API business 3.0 3.0
Impairment 2.0 2.0
Restructuring
expenses 2.0 3.0
Restructuring
payments (3.0) (4.0)
Adjusted EBITDA
(Non-GAAP) $145.0 $160.0
LANNETT COMPANY, INC.
NET SALES BY MEDICAL INDICATION
Three months ended Six months ended
($ in thousands) December 31, December 31,
---
Medical Indication 2019 2018 2019 2018
--- ---
Analgesic $2,111 $2,547 $3,995 $4,376
Anti-Psychosis 22,697 14,036 50,730 24,925
Cardiovascular 23,972 25,680 45,579 47,450
Central Nervous System 19,331 7,373 38,588 21,659
Endocrinology 88,477 142,355
Gastrointestinal 18,313 12,943 35,275 30,537
Infectious Disease 18,078 4,616 29,973 9,096
Migraine 10,878 12,551 20,021 22,288
Respiratory/Allergy/Cough/Cold 3,075 3,388 5,781 6,972
Urinary 1,233 1,596 1,668 3,137
Other 9,934 12,606 19,796 23,411
Contract manufacturing revenue 6,488 7,905 12,046 12,566
---
Total net sales $136,110 $193,718 $263,452 $348,772
===
Contact: Robert Jaffe
Robert Jaffe Co.,
LLC
(424) 288-4098
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SOURCE Lannett Company, Inc.
