BUENA, N.J., March 2, 2015 /PRNewswire/ -- IGI
Laboratories, Inc. (NYSE MKT: IG), a New
Jersey based specialty generic pharmaceutical company,
announced its financial results for the fourth quarter and year
ended December 31, 2014.
Fourth Quarter and Year to Date 2014 Highlights
- Total revenues of $13.7 million
in the fourth quarter of 2014, an increase of 104% over the same
quarter in 2013
- Total revenues of $33.7 million
for the year ended December 31, 2014,
an increase of 85% over the same period in 2013
- Total net revenues generated from the sale of IGI label generic
topical pharmaceutical products for the three and twelve months
ended December 31, 2014 of
$10.5 million, and $19.8 million, respectively
- Gross profit for the year ended December
31, 2014 equaled 50% as compared to 34% in the same period
of 2013
- IGI filed eleven Abbreviated New Drug Applications (ANDAs), in
2014 with the U.S. Food and Drug Administration (FDA)
- Net income was $5.6 million in
the fourth quarter of 2014, including a non-cash gain of
$2.3 million, compared to
$0.7 million in the same period in
2013
- Net income was $5.3 million for
the year ended December 31, 2014,
including a non-cash gain of $2.3
million, compared to a net loss of $0.1 million for the year ended December 31, 2013
IGI's President and Chief Executive Officer, Jason Grenfell-Gardner, stated, "This year was a
critical one for our team, and I believe we have delivered.
At the beginning of 2014, we committed to increase revenue to
$25.5 - $26.4 million for the year,
achieve profitability, and to double our R&D spending while
filing ten ANDAs. We increased our commitment in October of
2014 to $31.0 to $33.0 million in
revenue for 2014, gross margins of approximately 50 percent, and we
re-affirmed our expectation to file at least 10 ANDAs in
2014. Our team has delivered on these promises. Revenue
grew 85% compared to 2013, and while we did increase R&D
spending by 150%, we filed 11 ANDAs, and we were able to achieve
$5.3 million in net income, including
a non-cash gain of $2.3
million. On top of all these achievements, we were
able to make two product acquisitions at the end of September as
initial drivers of our TICO strategy." Mr. Grenfell-Gardner
continued, "In December we completed our offering of $143.75 million 3.75% Convertible Senior Notes,
which net of fees and expenses helped to strengthen our balance
sheet to include over $158 million in
cash at the end of December. Our balance sheet is stronger
than ever, and we are actively seeking to expand our product
portfolio and manufacturing capabilities to execute on our TICO
strategy to expand our topical, injectable, complex and ophthalmic
presence in the specialty generic pharmaceutical markets.
Our research and development team now has twenty-two ANDAs
pending with the FDA. Based on December 2014 IMS Health data, the addressable
market for our pipeline of twenty-two ANDAs, pending approval by
the FDA, is estimated at $579 million. We believe we are
well positioned to increase revenues to at least $55 to $57 million in 2015, which would lead to
increased gross margins of between approximately 52 to 53 percent
for 2015. As we continue to invest in R&D to drive our
future growth, we expect to increase R&D expense to
approximately 27 to 28 percent of total revenue in 2015, which
would allow us to file at least twenty more ANDAs in 2015.
Based on the foregoing, we would anticipate Adjusted EBITDA
(Earnings before interest, taxes, depreciation and amortization) to
range between $7.5 and $8.5 million
in 2015."
The Company will hold a conference call today at 4:15 pm ET to discuss 4th quarter 2014
results.
The Company invites you to listen to the call by dialing
1-888-346-3479. International participants should call
1-412-902-4260. Canadian participants should call
1-855-669-9657. Participants should ask to be joined into the
IGI Laboratories, Inc. call.
This call is being webcast by MultiVu (a PR Newswire Company)
and can be accessed in the Investor Relations Section of IGI's
website at www.igilabs.com.
About IGI Laboratories, Inc.
IGI Laboratories is a specialty generic pharmaceutical company.
Our mission is to be a leading player in the specialty generic
prescription drug market.
Forward Looking Statements
This 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 "
will," "believe," "target," "estimated," "continue" or words of
similar meaning. These statements are based on our current beliefs
or expectations and are inherently subject to various risks and
uncertainties, including those included from time to time in the
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections in our most
recent Annual Report on Form 10-K, as updated by Quarterly Reports
on Form 10-Q and other reports we file with the Securities and
Exchange Commission. Actual results may differ materially from
these expectations. 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 and the impact of global
political, economic, business, competitive, market, regulatory and
other factors; and our inability to complete successfully future
product acquisitions. We assume no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
Non-GAAP Financial Measures
In addition to reporting financial information required in
accordance with U.S. generally accepted accounting principles
(GAAP), IGI Labs is also presenting EBITDA and Adjusted EBITDA
which are non-GAAP financial measures. Since EBITDA and Adjusted
EBITDA are non-GAAP financial measures, they should not be used in
isolation or as a substitute for consolidated statements of
operations and cash flow data prepared in accordance with GAAP. In
addition, IGI's definition of Adjusted EBITDA may not be comparable
to similarly titled non-GAAP financial measures reported by other
companies.
Adjusted EBITDA, as defined by the Company, is calculated as
follows:
Net income, plus:
Interest expense, net
Provision for income taxes
Depreciation and amortization
Amortization of acquisition costs related to Econazole purchase
Non-cash expenses, such as share-based compensation expense, and
preferred stock dividend
Less change in the fair value of derivative liability
The Company believes that Adjusted EBITDA is a meaningful
indicator, to both Company management and investors, of the past
and expected ongoing operating performance of the Company. EBITDA
is a commonly used and widely accepted measure of financial
performance. Adjusted EBITDA is deemed by the Company to be a
useful performance indicator because it includes an add back of
non-cash and non-recurring operating expenses which have little to
no bearing on cash flows and may be subject to uncontrollable
factors not reflective of the Company's true operational
performance (i.e. fair value adjustments to the derivative
liability).
While the Company uses EBITDA and Adjusted EBITDA in managing
and analyzing its business and financial condition and believes
these non-GAAP financial measures to be useful to investors in
evaluating the Company's performance, it is open to certain
shortcomings. EBITDA and Adjusted EBITDA does not take into
account the impact of capital expenditures on either the liquidity
or the financial performance of the Company and likewise omits
share-based compensation expenses, which may vary over time and may
represent a material portion of overall compensation
expense. Due to the inherent limitations of EBITDA and
Adjusted EBITDA, the Company's management utilizes comparable GAAP
financial measures to evaluate the business in conjunction with
EBITDA and Adjusted EBITDA and encourages investors to do
likewise.
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
Product sales,
net
|
$
13,579
|
|
$
5,857
|
Research and development
income
|
105
|
|
816
|
Licensing, royalty and other
revenue
|
51
|
|
52
|
Total revenues
|
13,735
|
|
6,725
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
Cost of
revenues
|
5,345
|
|
4,147
|
Selling, general and
administrative expenses
|
2,413
|
|
1,406
|
Product development and
research expenses
|
1,864
|
|
620
|
Total costs and expenses
|
9,622
|
|
6,173
|
Operating
income
|
4,113
|
|
552
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
Change in the fair value of
derivative liability
|
2,300
|
|
-
|
Interest and other expense,
net
|
(608)
|
|
(78)
|
Income before income
tax expense (benefit)
|
5,805
|
|
474
|
|
|
|
|
Income tax expense
(benefit)
|
173
|
|
(197)
|
|
|
|
|
Net income
|
5,632
|
|
671
|
|
|
|
|
Preferred stock
dividend
|
-
|
|
(1,308)
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
5,632
|
|
$
(637)
|
|
|
|
|
Basic
income (loss) per share
|
$0.11
|
|
($0.01)
|
Diluted
income (loss) per share
|
$0.09
|
|
($0.01)
|
|
|
|
|
Weighted average
shares of common stock outstanding:
|
|
|
|
Basic
|
52,784,635
|
|
44,519,326
|
Diluted
|
67,167,566
|
|
44,519,326
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
For the years
ended December 31, 2014 and 2013
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
Product sales,
net
|
$
32,104
|
|
$
16,981
|
Research and development
income
|
1,490
|
|
1,094
|
Licensing, royalty and other
revenue
|
146
|
|
149
|
Total revenues
|
33,740
|
|
18,224
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
Cost of
revenues
|
16,948
|
|
12,079
|
Selling, general and
administrative expenses
|
5,976
|
|
3,484
|
Product development and
research expenses
|
6,910
|
|
2,743
|
Total costs and expenses
|
29,834
|
|
18,306
|
Operating income
(loss)
|
3,906
|
|
(82)
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
Change in the fair value of
derivative liability
|
2,300
|
|
-
|
Interest and other expense,
net
|
(782)
|
|
(199)
|
Income (loss) before
income tax expense (benefit)
|
5,424
|
|
(281)
|
|
|
|
|
Income tax expense
(benefit)
|
173
|
|
(197)
|
|
|
|
|
Net income
(loss)
|
5,251
|
|
(84)
|
|
|
|
|
Preferred stock
dividend
|
-
|
|
(1,308)
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
5,251
|
|
$
(1,392)
|
|
|
|
|
Basic
income (loss) per share
|
$0.11
|
|
($0.03)
|
Diluted
income (loss) per share
|
$0.09
|
|
($0.03)
|
|
|
|
|
Weighted average
shares of common stock outstanding:
|
|
|
|
Basic
|
49,817,721
|
|
43,517,640
|
Diluted
|
64,207,190
|
|
43,517,640
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the years
ended December 31, 2014 and 2013
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
December
31,
|
|
|
2013
|
Cash flows from
operating activities:
|
|
|
|
Net income (loss)
|
$
5,251
|
|
$
(84)
|
Non-cash (income) expenses
|
(72)
|
|
1,212
|
Changes in operating assets and liabilities
|
(8,976)
|
|
(1,746)
|
|
|
|
|
Net cash used in
operating activities
|
(3,797)
|
|
(618)
|
|
|
|
|
Net cash used in
investing activities
|
(3,792)
|
|
(2,113)
|
|
|
|
|
Net cash provided by
financing activities
|
164,371
|
|
2,296
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
156,782
|
|
(435)
|
Cash and cash
equivalents at beginning of year
|
2,101
|
|
2,536
|
|
|
|
|
Cash and cash
equivalents at end of year
|
$
158,883
|
|
$
2,101
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share and per share information)
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
December
31,
|
|
2013
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
158,883
|
|
$
2,101
|
Accounts receivable,
net
|
14,366
|
|
4,947
|
Inventories
|
2,784
|
|
2,869
|
Prepaid expenses and other
receivables
|
1,185
|
|
641
|
Total current assets
|
177,218
|
|
10,558
|
Property, plant and
equipment, net
|
3,262
|
|
2,623
|
Product acquisition
costs, net
|
10,604
|
|
1,766
|
Debt issuance costs,
net
|
5,132
|
|
69
|
Other
|
862
|
|
411
|
Total assets
|
$
197,078
|
|
$
15,427
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,643
|
|
$
1,523
|
Accrued expenses
|
5,141
|
|
2,915
|
Payable for product
acquisition costs
|
6,000
|
|
-
|
Deferred income,
current
|
87
|
|
768
|
Capital lease obligation,
current
|
131
|
|
15
|
Total current liabilities
|
13,002
|
|
5,221
|
|
|
|
|
Convertible 3.75%
senior notes, net of debt discount (face of $143,750)
|
100,311
|
|
-
|
Fair value of
derivative liability - convertible 3.75% senior notes
|
41,400
|
|
-
|
Note payable,
bank
|
3,160
|
|
3,000
|
Other long term
liabilities
|
71
|
|
15
|
Total liabilities
|
157,944
|
|
8,236
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Series A Convertible Preferred stock, $0.01 par value, 100
shares
|
|
|
|
authorized; 0 shares
issued and outstanding as of December 31,
|
|
|
|
2014 and 2013,
respectively
|
-
|
|
-
|
Series C Convertible Preferred stock, $0.01 par value, 1,550
shares
|
|
|
|
authorized; 0 shares
issued and outstanding as of December 31,
|
|
|
|
2014 and 2013,
respectively
|
-
|
|
-
|
Common stock, $0.01 par
value, 60,000,000 shares authorized;
|
|
|
|
52,819,787 and
46,748,575 shares issued and outstanding as
|
|
|
|
of December 31,
2014 and December 31, 2013, respectively
|
548
|
|
487
|
Additional paid-in
capital
|
78,172
|
|
51,541
|
Accumulated
deficit
|
(39,586)
|
|
(44,837)
|
Total stockholders' equity
|
39,134
|
|
7,191
|
Total liabilities and stockholders' equity
|
$
197,078
|
|
$
15,427
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
2013
|
|
2014
|
2013
|
|
|
|
|
|
|
Net income (loss)
attributable to common
|
|
|
|
|
|
stockholders
|
$
5,632
|
$
(637)
|
|
$
5,251
|
$
(1,392)
|
|
|
|
|
|
|
ADJUSTMENTS TO ARRIVE
AT EBITDA:
|
|
|
|
|
|
Depreciation and
amortization expense
|
216
|
103
|
|
532
|
407
|
Interest expense,
net
|
268
|
70
|
|
406
|
167
|
Non-cash interest
expense
|
261
|
-
|
|
261
|
-
|
Income tax expense
(benefit)
|
173
|
(197)
|
|
173
|
(197)
|
EBITDA
|
6,550
|
(661)
|
|
6,623
|
(1,015)
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTMENTS TO ARRIVE
AT ADJUSTED EBITDA:
|
|
|
|
Amortization of
product acquisition costs
|
30
|
30
|
|
120
|
60
|
Stock-based
compensation expense
|
520
|
367
|
|
1,170
|
536
|
Prefered stock
dividend
|
-
|
1,308
|
|
-
|
1,308
|
Change in the fair
value of derivative liability
|
(2,300)
|
-
|
|
(2,300)
|
-
|
ADJUSTED
EBITDA
|
$
4,800
|
$
1,044
|
|
$
5,613
|
$
889
|
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SOURCE IGI Laboratories, Inc.