BUENA, N.J., April 28, 2015 /PRNewswire/ -- IGI
Laboratories, Inc. (NYSE MKT: IG), a New
Jersey based specialty generic pharmaceutical company,
announced its financial results for the first quarter ended
March 31, 2015.
First Quarter 2015 Highlights
- Total revenues of $10.7 million
in the first quarter of 2015, an increase of 56% over the same
quarter in 2014
- Total net revenues generated from the sale of IGI label generic
topical pharmaceutical products for the three months ended
March 31, 2015 and 2014 of
$8.1 million, and $2.9 million, respectively
- Gross profit for the three months ended March 31, 2015 equaled 53% as compared to 42% in
the same period of 2014
- IGI filed one Abbreviated New Drug Application (ANDA), in the
first quarter of 2015 with the U.S. Food and Drug Administration
(FDA), and one ANDA on April 28, 2015
- Operating income was $1.1 million
in the first quarter of 2015 compared to $0.2 million in the same period in 2014
- Adjusted EBITDA (as defined and reconciled to GAAP below) for
the three months ended March 31, 2015
and 2014 was $1.7 million and
$0.6 million, respectively
- Adjusted net income per fully diluted share (as defined and
reconciled to GAAP below) for the three months ended March 31, 2015 and 2014 was $0.00 and $0.01,
respectively
IGI's President and Chief Executive Officer, Jason Grenfell-Gardner, stated, "Consistent with
our expectations, based on historical trends in our portfolio and
significant incremental sales in the fourth quarter of 2014, we
experienced a decline in first quarter revenue as compared to the
fourth quarter of 2014. Looking forward, as a result of recent
changes in our customer mix and market pricing, particularly for
econazole nitrate, we anticipate revenue from our econazole nitrate
cream products to decline in the second quarter of 2015. While the
impact of this change has not fully taken effect, we now expect
second quarter 2015 revenue in a range of $7.0 to $8.0 million. As we continue
to evaluate and respond to these changes, we intend to update the
investment community as quickly as practical to share our outlook
on the market and any adjustments to our business that we see
necessary to provide updated guidance for the full year 2015."
Mr. Grenfell-Gardner continued, "These changes in the market
dynamics of one product in the short term will not distract us from
our dedication to the creation of long-term shareholder value
through the execution of our TICO strategy to expand our presence
in the topical, injectable, complex and ophthalmic markets.
We still believe that 2015 is the year dedicated to building our
foundation, focused on the advancement of our research and
development pipeline. We believe that we are making good
progress on the injectable and ophthalmic product projects, as well
as our first 505(b)2 topical project, so we are actively pursuing
all areas of our TICO strategy. As of today, we have
twenty-four ANDAs pending with the FDA. Based on February 2015 IMS Health data, the addressable
market for our pipeline of twenty-four ANDAs, pending approval by
the FDA, is estimated at $702
million. Our team has now filed its first two ANDAs
for 2015, and is on target to file at least another four in the
second quarter of 2015. Including the products currently on
stability, our team has almost doubled productivity over this time
last year, and we expect to be on target to file 20 topical ANDA
submissions in 2015."
The Company will hold a conference call today at 4:15 pm ET to discuss 1st quarter 2015
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:
Depreciation and amortization
Interest expense, net
Provision for income taxes
Amortization of acquisition costs related to Econazole purchase
Non-cash expenses, such as share-based compensation expense
Less change in the fair value of derivative liability
Adjusted Net Income, as defined by the Company, is calculated
as follows:
Net income, plus:
Non-cash interest expense, net
Provision for income taxes
Amortization of acquisition costs related to Econazole purchase
Non-cash expenses, such as share-based compensation expense
Less change in the fair value of derivative liability
Adjusted Net Income Per Fully Diluted Share is equal to
Adjusted Net Income divided by the actual or anticipated diluted
share count for the applicable period.
The Company believes that 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 and change in the fair value of
derivative liability 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 Adjusted Net Income, 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. Adjusted Net Income, 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 Adjusted Net Income, EBITDA and Adjusted EBITDA, the
Company's management utilizes comparable GAAP financial measures to
evaluate the business in conjunction with Adjusted Net Income,
EBITDA and Adjusted EBITDA and encourages investors to do
likewise.
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share and per share information)
|
|
|
|
|
|
|
|
|
|
March 31,
2015 (Unaudited)
|
|
December
31, 2014*
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 157,031
|
|
$ 158,883
|
Accounts receivable,
net
|
16,305
|
|
14,366
|
Inventories
|
3,722
|
|
2,784
|
Prepaid expenses and other
receivables
|
1,336
|
|
1,185
|
Total current assets
|
178,394
|
|
177,218
|
Property, plant and
equipment, net
|
3,355
|
|
3,262
|
Product acquisition
costs, net
|
12,074
|
|
10,604
|
Debt issuance costs,
net
|
4,946
|
|
5,132
|
Other
|
834
|
|
862
|
Total assets
|
$ 199,603
|
|
$ 197,078
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
2,551
|
|
$
1,643
|
Accrued expenses
|
6,591
|
|
5,141
|
Payable for product
acquisition costs
|
6,000
|
|
6,000
|
Deferred income,
current
|
27
|
|
87
|
Capital lease obligation,
current
|
129
|
|
131
|
Total current liabilities
|
15,298
|
|
13,002
|
|
|
|
|
Convertible 3.75%
senior notes, net of debt discount (face of $143,750)
|
101,901
|
|
100,311
|
Fair value of
derivative liability - convertible 3.75% senior notes
|
32,775
|
|
41,400
|
Note payable,
bank
|
3,160
|
|
3,160
|
Other long term
liabilities
|
40
|
|
71
|
Total liabilities
|
153,174
|
|
157,944
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Series A Convertible Preferred stock, $0.01 par value, 100
shares authorized; 0 shares issued
and outstanding as of March 31, 2015 and December 31, 2014, respectively
|
-
|
|
-
|
Series C Convertible Preferred stock, $0.01 par value, 1,550
shares authorized; 0 shares issued
and outstanding as of March 31, 2015 and December 31, 2014, respectively
|
-
|
|
-
|
Common stock, $0.01 par
value, 60,000,000 shares authorized; 52,859,953 and 52,819,787 shares issued and
outstanding as of March 31, 2015
and December 31, 2014, respectively
|
548
|
|
548
|
Additional paid-in
capital
|
78,912
|
|
78,172
|
Accumulated
deficit
|
(33,031)
|
|
(39,586)
|
Total stockholders' equity
|
46,429
|
|
39,134
|
Total liabilities and stockholders' equity
|
$ 199,603
|
|
$ 197,078
|
|
|
|
|
|
|
|
|
*Derived from the
audited December 31, 2014 financial statements
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
For the three
months ended March 31, 2015 and 2014
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
March
31, 2014
|
|
|
Revenues:
|
|
|
|
Product sales,
net
|
$
10,510
|
|
$ 6,383
|
Research and development
income
|
51
|
|
313
|
Licensing, royalty and other
revenue
|
110
|
|
157
|
Total revenues
|
10,671
|
|
6,853
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
Cost of
revenues
|
5,043
|
|
3,987
|
Selling, general and
administrative expenses
|
1,900
|
|
1,282
|
Product development and
research expenses
|
2,630
|
|
1,365
|
Total costs and expenses
|
9,573
|
|
6,634
|
Operating
income
|
1,098
|
|
219
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
Change in the fair value of
derivative liability
|
8,625
|
|
-
|
Interest and other expense,
net
|
(3,168)
|
|
(52)
|
Income before income
tax expense
|
6,555
|
|
167
|
|
|
|
|
Income tax
expense
|
-
|
|
-
|
|
|
|
|
Net income
|
$
6,555
|
|
$
167
|
|
|
|
|
Basic
income per share
|
$0.12
|
|
$0.00
|
Diluted
income per share
|
$0.00
|
|
$0.00
|
|
|
|
|
Weighted average
shares of common stock outstanding:
|
|
|
|
Basic
|
52,841,900
|
|
46,826,733
|
Diluted
|
67,210,177
|
|
48,529,603
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the three
months ended March 31, 2015 and 2014
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
March
31, 2015
|
|
March
31, 2014
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
6,555
|
|
$
167
|
Non-cash (income) expenses
|
(6,289)
|
|
429
|
Changes in operating assets and liabilities
|
(380)
|
|
(533)
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
(114)
|
|
63
|
|
|
|
|
Net cash used in
investing activities
|
(1,711)
|
|
(68)
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
(27)
|
|
318
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
(1,852)
|
|
313
|
Cash and cash
equivalents at beginning of period
|
158,883
|
|
2,101
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
157,031
|
|
$
2,414
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP MEASURES
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
Net income
|
$6,555
|
$167
|
|
|
|
|
|
Depreciation and
amortization expense
|
143
|
126
|
|
Interest expense,
net
|
1,384
|
44
|
|
Non-cash interest
expense
|
1,785
|
-
|
|
Provision for income
taxes
|
-
|
-
|
|
EBITDA
|
9,867
|
337
|
|
|
|
|
|
Amortization of
product acquisition costs
|
30
|
30
|
|
Stock-based
compensation expense
|
378
|
259
|
|
Change in the fair
value of derivative liability
|
(8,625)
|
-
|
|
Adjusted
EBITDA
|
$1,650
|
$626
|
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
|
RECONCILIATION OF
NON-GAAP ADJUSTED NET INCOME
|
|
(in thousands,
except shares and per share information)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
Net income
|
$6,555
|
$ 167
|
|
|
|
|
|
Non-cash interest
expense
|
1,785
|
-
|
|
Provision for income
taxes
|
-
|
-
|
|
Amortization of
product acquisition costs
|
30
|
30
|
|
Non-cash stock-based
compensation expense
|
378
|
259
|
|
Change in the fair
value of derivative liability
|
(8,625)
|
-
|
|
Adjusted Net
Income
|
$ 123
|
$ 456
|
|
|
|
Adjusted Net Income
Per Diluted Share
|
$ 0.00
|
$0.01
|
|
IGI LABORATORIES,
INC. AND SUBSIDIARIES
|
GROSS TO NET
CALCULATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2015
|
|
2014
|
|
|
|
|
Gross IGI product
sales
|
$ 22,307
|
|
$ 5,025
|
|
|
|
|
Reduction to gross
product sales:
|
|
|
|
Chargebacks and billbacks
|
12,512
|
|
1,584
|
Sales discounts and other allowances
|
1,699
|
|
498
|
Total reduction to
gross product sales
|
14,211
|
|
2,082
|
|
|
|
|
IGI product sales,
net
|
8,096
|
|
2,943
|
|
|
|
|
Contract
manufacturing product sales
|
2,414
|
|
3,440
|
|
|
|
|
Total product
sales
|
$ 10,510
|
|
$ 6,383
|
Logo -
http://photos.prnewswire.com/prnh/20130827/MM70487LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/igi-laboratories-announces-first-quarter-2015-results-300073711.html
SOURCE IGI Laboratories, Inc.