NASHVILLE, Tenn., March 9, 2021 /PRNewswire/ -- Cumberland
Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical
company focused on hospital acute care, gastroenterology and
rheumatology, today announced fourth quarter and full year 2020
financial results. Net Revenues for the fourth quarter were
$10.3 million, up 10% over the prior
year period. For the full year 2020, Net Revenues totaled
$37.4 million, a 9% increase over
2019. The company also recorded an additional $3.2 million in revenue during the year
associated with divested product rights for two brands it is no
longer distributing.
As of December 31, 2020, the total assets of the Company
were $96.5 million, including
$24.8 million in cash and
investments. Total Liabilities were $49.6
million, and Total Shareholder's Equity was $47 million. Cumberland also had approximately $44 million in tax net operating loss
carryforwards, resulting from the prior exercise of stock
options.
2020 Highlights:
- Implemented national launch of a Next Generation Caldolor
product featuring a ready-to-use formulation in a pre-mixed
bag
- Commenced several national initiatives during 2020 to help
hospitals access Cumberland's
acute care brands during the COVID-19 pandemic
- Announced a series of publications featuring important new data
associated with the Company's Caldolor®
(ibuprofen) Injection, for the treatment of pain and fever
and Vibativ® (telavancin) Injection, for the
treatment of hospital-acquired and ventilator-associated bacterial
pneumonia, as well as complicated skin and skin structure
infections
- Introduced an FDA-approved RediTrex® line of
injectable methotrexate products, featuring an innovative delivery
system for patients with arthritis
"We are grateful that Cumberland was able to successfully manage
through the pandemic during 2020, in spite of the significant
market headwinds and other challenges we encountered," said A.J.
Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "Our
facilities remained open, our operations continued, and our
organization remained intact." He continued, "I would like to
acknowledge and thank my colleagues for their continued dedication
during such trying times for many. Together, we remain focused on
our mission of advancing patient care through the delivery of
high-quality medicines."
Caldolor®
Early in 2020, Cumberland
implemented a national launch of its Next Generation
Caldolor product featuring a ready-to-use formulation,
offering time and cost savings associated with its administration.
Caldolor is a non-steroidal anti-inflammatory drug (NSAID) and may
be used as the sole method of treatment for mild-moderate pain or
as part of a multimodal treatment for severe pain. Cumberland's new formulation of Caldolor comes
in a pre-mixed bag that is ready for use. It is the first
FDA-approved pre-mixed bag of ibuprofen.
Caldolor was also the subject of several clinical studies
published during the year. These studies demonstrated that patients
given Caldolor experienced less postoperative pain and had
decreased opioid use. Due to these studies, Caldolor was
recommended for consideration in Enhanced Recovery After Surgery
protocols for the management of postoperative pain - including that
of traumatic origin.
Vibativ®
Cumberland launched several
national initiatives during 2020 to help hospitals access the
Company's acute care brands during the healthcare emergency.
Cumberland's Vibativ product was
used to help COVID-19 patients who developed secondary-bacterial
infections in their lungs. Vibativ is a potent antibiotic, FDA
approved to treat hospital and ventilator acquired pneumonia that
can result from a variety of infectious agents. It addresses a
range of Gram-positive bacterial pathogens, including those that
are considered difficult-to-treat and multidrug-resistant.
Additionally, there were a series of clinical study manuscripts
published during the year regarding Vibativ. One study suggested
that Vibativ is a promising and viable option for patients with
bacteremia or endocarditis, including those with MRSA or another S.
aureus pathogen. Two other studies confirmed the continued in vitro
potency of Vibativ and detailed the positive outcomes that
resulted.
RediTrex®
The Company implemented a soft launch of its newly FDA-approved
RediTrex product line during the fourth quarter. Cumberland is now preparing for a full
national launch during the second half of 2021, once product
supplies are assured and market conditions return to normal. The
Company believes that RediTrex will be a valuable addition to the
portfolio and help further diversify and grow its business.
RediTrex is approved for patients with severe, active rheumatoid
arthritis and polyarticular juvenile idiopathic arthritis who have
difficulty tolerating or responding to orally delivered
methotrexate. It is also approved for symptomatic control of
severe, recalcitrant, disabling psoriasis in adults who are not
adequately responsive to other forms of therapy.
Omeclamox®-Pak
Cumberland closely monitored
its supply chain during the 2020 pandemic. This included monitoring
the facilities that supply the raw materials along with those that
manufacture the Company's products. Overall, the chain remained
intact with batches of finished goods shipped to the warehouses
that supply the country's hospital and retail pharmacies. However,
there was one exception, as the facility packaging Omeclamox-Pak
encountered financial difficulties due to the pandemic and
suspended operations. Subsequently, Cumberland learned that this facility is
reorganizing, and the Company awaits the resumption of its
operations.
Ifetroban Phase II Clinical Programs
Cumberland's development
pipeline includes a series of product candidates in Phase II
development. Enrollment in the Company's studies significantly
slowed during the pandemic, due to trial suspensions and the
decrease in eligible patient admissions to medical centers across
the country. While enrollment of new patients was limited most of
the year, the Company ensured that patients already entered into a
trial continued to receive their study drug. Cumberland looks forward to an improvement in
study enrollment as the pandemic subsides and centers begin to
reopen.
The Company has Phase II clinical programs underway evaluating
its ifetroban product candidates in patients with cardiomyopathy
associated with Duchenne Muscular Dystrophy, Systemic Sclerosis,
and Aspirin-Exacerbated Respiratory Disease.
FINANCIAL RESULTS:
Net Revenue: For the three months ended December 31,
2020, net revenues were $10.3
million, up 10% from $9.3
million for the prior year period. The company also recorded
an additional $900,000 in revenue
during the fourth quarter associated with divested product
rights.
Net revenue by product for the three months ended
December 31, 2020, included $5.2
million for Kristalose®, $2.3 million for Vibativ®,
$1.7 million for
Caldolor®, and $0.9 million for the Company's newest brand,
RediTrex®.
For the year ended December 31, 2020, net revenues were
$37.4 million, an 8.9% increase
compared to $34.4 million for
the year ended December 31, 2019. Additionally, the company
recorded a total of $3.2 million in
revenue during 2020 associated with divested product rights.
Net revenue by product for the year ended December 31,
2020, included $15.6 million for
Kristalose®, $10.9 million for Vibativ®,
$5.3 million for
Caldolor®, $1.9 million for Acetadote®
(including the brand and Company's Authorized Generic),
$1.1 million for
Vaprisol®, $0.9 million for RediTrex®, and
$0.3 million for
Omeclamox®- Pak.
Operating Expenses: Total operating expenses for the
three months ended December 31, 2020 were $12.0 million, down from $12.7 million for the prior year period. Total
operating expenses for the year ended December 31, 2020 were
$43.8 million, similar to
$43.7 million for 2019.
Adjusted Earnings: Adjusted Earnings for the three months
ended December 31, 2020 were $0.2
million, or $0.01 per share,
compared to a loss of $(1.9) million,
or $(0.12) per share for the prior
year period. Adjusted Earnings for the full year ended
December 31, 2020 were a loss of $(0.1) million, or
$(0.01) per share, a significant
turnaround over the loss of $(3.4)
million, or $(0.22) per share
in 2019.
This performance measure represents net income attributable to
common shareholders with adjustments for the impact of income
taxes, depreciation, amortization, share based compensation
expenses and expenses that are non-core to the operating
performance of the period. The definition and the reconciliation of
Adjusted Earnings are provided in this release.
Cash Flow: Cash flow from operations for the year ended
December 31, 2020 was $5.4 million, compared to $3.1 million for the prior year.
Balance Sheet: At December 31, 2020, Cumberland had $24.8
million in cash and cash equivalents. Total assets at
December 31, 2020 were $96.5
million. Total Liabilities were $49.6
million, including $15.0
million outstanding on the Company's revolving line of
credit and $8.2 million related to
contingent liabilities related to the Vibativ acquisition,
resulting in Total Shareholder's Equity of $47 million.
Conference Call and Webcast
A conference call and live Internet webcast will be held on
Tuesday, March 9, 2021 at 4:30 p.m.
Eastern Time to discuss the Company's fourth quarter and
annual 2020 financial results. To participate in the call, please
dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for
international callers). A rebroadcast of the teleconference will be
available for one week and can be accessed by dialing 855-859-2056
(for U.S. callers) or 404-537-3406 (for international callers). The
Conference ID for the rebroadcast is 7005878. The live webcast and
rebroadcast can be accessed via Cumberland's website at
http://investor.cumberlandpharma.com/events-calendar.
About Cumberland Pharmaceuticals
Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical
company focused on the delivery of high quality prescription brands
to improve patient care. The Company develops, acquires and
commercializes brands for the hospital acute care, gastroenterology
and rheumatology market segments. These medical specialties are
categorized by moderately concentrated prescriber bases that the
Company believes can be penetrated effectively by targeted sales
forces. The Company's portfolio of FDA-approved brands
includes:
- Caldolor® (ibuprofen) Injection, for
the treatment of pain and fever;
- Kristalose® (lactulose) for Oral
Solution, a prescription laxative, for the treatment of chronic and
acute constipation;
- Vibativ® (telavancin) Injection, for
the treatment of certain serious bacterial infections including
hospital-acquired and ventilator-associated bacterial pneumonia, as
well as complicated skin and skin structure infections;
- RediTrex® (methotrexate) Injection,
for the treatment of active rheumatoid, juvenile idiopathic and
severe psoriatic arthritis, as well as disabling psoriasis;
- Vaprisol® (conivaptan) Injection, to
raise serum sodium levels in hospitalized patients with euvolemic
and hypervolemic hyponatremia;
- Omeclamox®-Pak, (omeprazole,
clarithromycin, amoxicillin) for the treatment of Helicobacter
pylori (H. pylori) infection and related duodenal ulcer
disease;
- Acetadote® (acetylcysteine) Injection,
for the treatment of acetaminophen poisoning.
For more information on Cumberland's approved products, including full
prescribing information, please visit links to the individual
product websites, which can be found on the Company's website
www.cumberlandpharma.com.
The Company has Phase II clinical programs underway evaluating
its ifetroban product candidates in patients with cardiomyopathy
associated with Duchenne Muscular Dystrophy (DMD), Systemic
Sclerosis (SSc), and Aspirin-Exacerbated Respiratory Disease
(AERD).
About Caldolor® (ibuprofen) Injection
Caldolor is indicated in adults and pediatric patients for the
management of mild to moderate pain and management of moderate to
severe pain as an adjunct to opioid analgesics, as well as the
reduction of fever. It was the first FDA-approved intravenous
therapy for fever.
Caldolor is contraindicated in patients with known
hypersensitivity to ibuprofen or other NSAIDs, patients with a
history of asthma or other allergic type reactions after taking
aspirin or other NSAIDs. Caldolor is contraindicated for use during
the peri-operative period in the setting of coronary artery bypass
graft (CABG) surgery. For full prescribing and safety information,
including boxed warning, visit www.caldolor.com.
About Kristalose® (lactulose) Oral
Solution
Kristalose is indicated for the treatment of acute and chronic
constipation. It is a unique, proprietary, crystalline form of
lactulose, with no restrictions on length of therapy or patient
age. Kristalose is contraindicated in patients who require a
low-galactose diet. Elderly, debilitated patients who receive
lactulose for more than six months should have serum electrolytes
(potassium, chloride, carbon dioxide) measured periodically. For
full prescribing and safety information, visit
www.kristalose.com.
About Vibativ® (telavancin) for Injection
Vibativ is a patented, FDA approved injectable anti-infective
for the treatment of certain serious bacterial infections including
hospital-acquired and ventilator-associated bacterial pneumonia and
complicated skin and skin structure infections. It addresses a
range of Gram-positive bacterial pathogens, including those that
are considered difficult-to-treat and multidrug-resistant.
Intravenous unfractionated heparin sodium is contraindicated with
Vibativ administration due to artificially prolonged activated
partial thromboplastin time (aPTT) test results for up to 18 hours
after Vibativ administration. Vibativ is contraindicated in
patients with a known hypersensitivity to telavancin. For more
information please visit www.vibativ.com.
About RediTrex® (methotrexate) Injection
RediTrex is a single-dose prefilled syringe containing
prescription methotrexate. RediTrex is used to treat adults with
severe, active rheumatoid arthritis and children with active
polyarticular juvenile idiopathic arthritis, after treatment with
other medicines including non-steroidal anti-inflammatory drugs
(NSAIDS) have been used and did not work well. Methotrexate can
control the symptoms of severe, resistant, disabling psoriasis in
adults when other types of treatment have failed. For full
prescribing and safety information, visit www.reditrex.com.
About Vaprisol® (conivaptan hydrochloride)
Injection
Vaprisol is an intravenous treatment for hyponatremia used in
the critical care setting. Hyponatremia is an electrolyte
disturbance in which sodium ion concentration in blood plasma is
lower than normal. This can be associated with a variety of
critical care conditions including congestive heart failure, liver
failure, kidney failure and pneumonia. The product is a
vasopressin receptor antagonist that raises serum sodium levels and
promotes free water secretion. Vaprisol is contraindicated in
patients with hypovolemic hyponatremia. The coadministration of
Vaprisol with potent CYP3A inhibitors, such as ketoconazole,
itraconazole, clarithromycin, ritonavir, and indinavir, is
contraindicated. For full prescribing and safety information,
including boxed warning, visit www.vaprisol.com.
About Omeclamox®-Pak (omeprazole, clarithromycin,
amoxicillin)
Omeprazole is an antisecretory drug, which works by decreasing
the amount of acid the stomach produces. Clarithromycin and
amoxicillin are antibacterial drugs, which inhibit the growth of
bacteria allowing the stomach lining to heal. Omeclamox-Pak is
contraindicated in patients with a history of hypersensitivity to
omeprazole, any macrolide antibiotic or penicillin. For full
prescribing and safety information, visit www.omeclamox.com.
About Acetadote® (acetylcysteine)
Injection
Acetadote, administered intravenously within 8 to 10 hours after
ingestion of a potentially hepatotoxic quantity of acetaminophen,
is indicated to prevent or lessen hepatic injury. Used in the
emergency department, Acetadote is approved in the United States to treat overdose of
acetaminophen, a common ingredient in many over-the-counter
medications. Acetadote is contraindicated in patients with
hypersensitivity or previous anaphylactoid reactions to
acetylcysteine or any components of the preparation. For full
prescribing and safety information, visit www.acetadote.com.
About Cumberland Emerging Technologies (CET)
Cumberland Emerging Technologies, Inc. (www.cet-fund.com) is a
joint initiative between Cumberland Pharmaceuticals Inc.,
Vanderbilt University, LaunchTN, and
WinHealth. The mission of CET is to advance biomedical technologies
and products conceived at Vanderbilt
University and other regional research centers towards the
marketplace.
CET helps manage the development and commercialization process
for select projects, and provides expertise on intellectual
property, regulatory, manufacturing and marketing issues that are
critical to successful new biomedical products. CET's Life Sciences
Center provides laboratory space, equipment and infrastructure for
CET's activities and other early-stage life sciences ventures.
Forward-Looking Statements
This press release contains forward-looking statements, which
are subject to certain risks and reflect Cumberland's current views on future events
based on what it believes are reasonable assumptions. No assurance
can be given that these events will occur. As with any business,
all phases of Cumberland's
operations are subject to factors outside of its control, and any
one or combination of these factors could materially affect
Cumberland's results of
operations. These factors include market conditions, competition,
an inability of manufacturers to produce Cumberland's products on a timely basis or
failure of manufacturers to comply with regulations applicable to
pharmaceutical manufacturers, maintaining an effective sales and
marketing infrastructure, natural disasters, public health
epidemics, and other events beyond our control as more fully
discussed in the Company's most recent Form 10-K and subsequent
10-Qs as filed with the SEC. There can be no assurance that results
anticipated by the Company will be realized or that they will have
the expected effects. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. The Company does not undertake any obligation to
publicly revise these statements to reflect events after the date
hereof.
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
Consolidated Balance
Sheets
|
December 31,
2020 and 2019
|
(Unaudited)
|
|
|
2020
|
|
2019
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
24,753,796
|
|
|
$
|
28,212,635
|
|
Accounts receivable,
net
|
12,377,713
|
|
|
7,859,006
|
|
Inventories,
net
|
10,638,157
|
|
|
8,871,254
|
|
Prepaid and other
current assets
|
2,199,926
|
|
|
2,757,456
|
|
Current assets
associated with discontinued operations
|
—
|
|
|
2,462,724
|
|
Total current
assets
|
49,969,592
|
|
|
50,163,075
|
|
Non-current
inventory
|
11,656,742
|
|
|
15,554,992
|
|
Property and
equipment, net
|
574,169
|
|
|
747,796
|
|
Intangible assets,
net
|
28,118,316
|
|
|
30,920,324
|
|
Goodwill
|
882,000
|
|
|
882,000
|
|
Deferred tax assets,
net
|
—
|
|
|
21,802
|
|
Operating lease
right-of-use assets
|
2,028,148
|
|
|
2,960,569
|
|
Other
assets
|
3,234,338
|
|
|
3,298,725
|
|
Total
assets
|
$
|
96,463,305
|
|
|
$
|
104,549,283
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
13,396,286
|
|
|
$
|
9,993,578
|
|
Operating lease
current liabilities
|
1,016,779
|
|
|
920,431
|
|
Other current
liabilities
|
11,254,381
|
|
|
11,084,869
|
|
Current liabilities
associated with discontinued operations
|
—
|
|
|
2,151,357
|
|
Total current
liabilities
|
25,667,446
|
|
|
24,150,235
|
|
Revolving line of
credit
|
15,000,000
|
|
|
18,500,000
|
|
Operating lease
non-current liabilities
|
1,059,693
|
|
|
2,076,472
|
|
Other long-term
liabilities
|
7,862,772
|
|
|
8,737,323
|
|
Total
liabilities
|
49,589,911
|
|
|
53,464,030
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock – no par
value; 100,000,000 shares authorized; 14,988,429 and 15,263,555
shares issued and outstanding as of December 31, 2020 and
2019, respectively
|
49,121,523
|
|
|
49,914,478
|
|
Retained earnings
(deficit)
|
(2,131,013)
|
|
|
1,208,395
|
|
Total shareholders'
equity
|
46,990,510
|
|
|
51,122,873
|
|
Noncontrolling
interests
|
(117,116)
|
|
|
(37,620)
|
|
Total
equity
|
46,873,394
|
|
|
51,085,253
|
|
Total liabilities and
equity
|
$
|
96,463,305
|
|
|
$
|
104,549,283
|
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations and Comprehensive Income (Loss)
|
(Unaudited)
|
|
|
Three months
ended
December 31,
|
|
Years
ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
10,261,534
|
|
|
$
|
9,305,553
|
|
|
$
|
37,441,134
|
|
|
$
|
34,388,295
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of products
sold
|
2,266,018
|
|
|
2,389,584
|
|
|
8,653,020
|
|
|
7,421,316
|
|
Selling and
marketing
|
3,604,541
|
|
|
4,045,962
|
|
|
14,765,465
|
|
|
15,277,740
|
|
Research and
development
|
1,399,433
|
|
|
2,079,782
|
|
|
5,773,825
|
|
|
6,868,480
|
|
General and
administrative
|
3,587,977
|
|
|
3,135,197
|
|
|
10,196,299
|
|
|
9,974,384
|
|
Amortization
|
1,149,511
|
|
|
1,049,418
|
|
|
4,434,120
|
|
|
4,134,557
|
|
Total costs and
expenses
|
12,007,480
|
|
|
12,699,943
|
|
|
43,822,729
|
|
|
43,676,477
|
|
Operating income
(loss)
|
(1,745,946)
|
|
|
(3,394,390)
|
|
|
(6,381,595)
|
|
|
(9,288,182)
|
|
Interest
income
|
4,792
|
|
|
47,449
|
|
|
75,345
|
|
|
243,364
|
|
Interest
expense
|
(35,897)
|
|
|
(29,198)
|
|
|
(263,627)
|
|
|
(246,186)
|
|
Income (loss) before
income taxes
|
(1,777,051)
|
|
|
(3,376,139)
|
|
|
(6,569,877)
|
|
|
(9,291,004)
|
|
Income tax expense
(benefit)
|
(10,479)
|
|
|
6,812
|
|
|
(55,902)
|
|
|
79,316
|
|
Net income (loss) from
continuing operations
|
(1,787,530)
|
|
|
(3,369,327)
|
|
|
(6,625,779)
|
|
|
(9,211,688)
|
|
Discontinued
operations net of tax
|
872,064
|
|
|
2,396,983
|
|
|
3,206,875
|
|
|
5,665,177
|
|
Net income
(loss)
|
(915,466)
|
|
|
(972,344)
|
|
|
(3,418,904)
|
|
|
(3,546,511)
|
|
Net loss at
subsidiary attributable to noncontrolling interests
|
31,690
|
|
|
11,640
|
|
|
79,496
|
|
|
8,752
|
|
Net income (loss)
attributable to common shareholders
|
$
|
(883,776)
|
|
|
$
|
(960,704)
|
|
|
$
|
(3,339,408)
|
|
|
$
|
(3,537,759)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to common shareholders:
|
|
|
|
|
|
|
|
-Continuing
operations-basic
|
$
|
(0.12)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.60)
|
|
-Discontinuing
operations-basic
|
0.06
|
|
|
0.16
|
|
|
0.21
|
|
|
0.37
|
|
Basic
|
$
|
(0.06)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.23)
|
|
|
|
|
|
|
|
|
|
-Continuing
operations-diluted
|
$
|
(0.12)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.60)
|
|
-Discontinuing
operations-diluted
|
0.06
|
|
|
0.16
|
|
|
0.21
|
|
|
0.37
|
|
Diluted
|
$
|
(0.06)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.23)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
15,031,942
|
|
|
15,227,514
|
|
|
15,162,184
|
|
|
15,396,098
|
|
Diluted
|
15,031,942
|
|
|
15,227,514
|
|
|
15,162,184
|
|
|
15,396,098
|
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
Years ended
December 31, 2020 and 2019
|
(Unaudited)
|
|
|
2020
|
|
2019
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(3,418,904)
|
|
|
$
|
(3,546,511)
|
|
Discontinued
operations
|
3,206,875
|
|
|
5,665,177
|
|
Net income (loss) from
continuing operations
|
(6,625,779)
|
|
|
(9,211,688)
|
|
Adjustments to
reconcile net income (loss) to net cash flows provided
by operating activities:
|
|
|
|
Depreciation
and amortization expense
|
4,748,565
|
|
|
4,404,175
|
|
Deferred tax
expense
|
21,802
|
|
|
65,408
|
|
Share-based
compensation
|
1,046,516
|
|
|
1,485,898
|
|
Decrease in
non-cash contingent consideration
|
(1,160,202)
|
|
|
(804,167)
|
|
Write-off of
deferred offering costs
|
440,091
|
|
|
—
|
|
Increase in
cash surrender value of life insurance policies over premiums
paid
|
(154,611)
|
|
|
—
|
|
Noncash
interest expense
|
47,636
|
|
|
47,525
|
|
Noncash
investment gains
|
—
|
|
|
(26,315)
|
|
Net changes in
assets and liabilities affecting operating activities:
|
|
|
|
Accounts
receivable
|
(4,518,707)
|
|
|
(1,399,012)
|
|
Inventories
|
2,131,347
|
|
|
1,106,175
|
|
Other current assets
and other assets
|
1,210,489
|
|
|
(615,199)
|
|
Accounts payable and
other current liabilities
|
6,569,002
|
|
|
3,221,780
|
|
Other long-term
liabilities
|
(1,859,330)
|
|
|
(729,820)
|
|
Net cash provided by
(used in) operating activities from continuing
operations
|
1,896,819
|
|
|
(2,455,240)
|
|
Discontinued
operations
|
3,518,242
|
|
|
5,511,596
|
|
Net cash provided by
operating activities
|
5,415,061
|
|
|
3,056,356
|
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(140,817)
|
|
|
(246,202)
|
|
Cash paid for
acquisitions
|
—
|
|
|
(5,000,000)
|
|
Proceeds from
surrender of life insurance policies
|
460,888
|
|
|
—
|
|
Increase in cash
surrender value of life insurance policies
|
(104,750)
|
|
|
—
|
|
Additions to
intangible assets
|
(1,973,110)
|
|
|
(772,944)
|
|
Proceeds from sale of
marketable securities
|
—
|
|
|
20,062,132
|
|
Purchases of
marketable securities
|
—
|
|
|
(11,745,138)
|
|
Net cash (used in)
provided by investing activities
|
(1,757,789)
|
|
|
2,297,848
|
|
|
|
2020
|
|
2019
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on line of
credit
|
59,000,000
|
|
|
76,000,000
|
|
Payments on line of
credit
|
(62,500,000)
|
|
|
(77,500,000)
|
|
Sale of subsidiary
shares to noncontrolling interest
|
—
|
|
|
1,000,000
|
|
Cash settlement of
contingent consideration
|
(819,180)
|
|
|
(1,033,108)
|
|
Repurchase of
subsidiary shares from noncontrolling interest
|
(800,000)
|
|
|
—
|
|
Cash payments of
financing costs
|
(10,000)
|
|
|
(52,500)
|
|
Payments of deferred
equity offering costs
|
(135,405)
|
|
|
—
|
|
Payments made in
connection with repurchase of common shares
|
(1,851,526)
|
|
|
(3,494,921)
|
|
Net cash used in
financing activities
|
(7,116,111)
|
|
|
(5,080,529)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(3,458,839)
|
|
|
273,675
|
|
Cash and cash
equivalents, beginning of year
|
28,212,635
|
|
|
27,938,960
|
|
Cash and cash
equivalents, end of year
|
$
|
24,753,796
|
|
|
$
|
28,212,635
|
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
|
Reconciliation of Net
Income (Loss) Attributable to Common Shareholders to Adjusted
Earnings (Loss) and Adjusted Diluted Earnings Per Share
|
(Unaudited)
|
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
Earnings
impact
|
|
Earnings per
share impact
|
|
Earnings
impact
|
|
Earnings per
share impact
|
Net income (loss)
attributable to common shareholders
|
$
|
(883,776)
|
|
|
$
|
(0.06)
|
|
|
$
|
(960,704)
|
|
|
$
|
(0.06)
|
|
Less: Net loss at
subsidiary attributable to noncontrolling interests
|
31,690
|
|
|
—
|
|
|
11,640
|
|
|
—
|
|
Net income
(loss)
|
(915,466)
|
|
|
(0.06)
|
|
|
(972,344)
|
|
|
(0.06)
|
|
Discontinued
operations
|
872,064
|
|
|
0.06
|
|
|
2,396,983
|
|
|
0.16
|
|
Net income (loss)
from continuing operations
|
$
|
(1,787,530)
|
|
|
(0.12)
|
|
|
(3,369,327)
|
|
|
(0.22)
|
|
Adjustments to net
income (loss) from continuing operations
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
10,479
|
|
|
—
|
|
|
(6,812)
|
|
|
—
|
|
Depreciation and
amortization
|
1,223,881
|
|
|
0.08
|
|
|
1,125,217
|
|
|
0.07
|
|
Share-based
compensation (a)
|
241,178
|
|
|
0.02
|
|
|
378,081
|
|
|
0.02
|
|
Write-off of deferred
offering costs expense (b)
|
440,091
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
Interest
income
|
(4,792)
|
|
|
—
|
|
|
(47,449)
|
|
|
—
|
|
Interest
expense
|
35,897
|
|
|
—
|
|
|
29,198
|
|
|
—
|
|
Adjusted Earnings
(loss) from continuing operations and Adjusted Diluted
Earnings (loss) from continuing operations Per Share
|
$
|
159,204
|
|
|
$
|
0.01
|
|
|
$
|
(1,891,092)
|
|
|
$
|
(0.12)
|
|
Diluted
weighted-average common shares outstanding:
|
|
|
15,031,942
|
|
|
|
|
15,227,514
|
|
|
|
|
Twelve months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
Earnings
impact
|
|
Earnings per
share impact
|
|
Earnings
impact
|
|
Earnings per
share impact
|
Net income (loss)
attributable to common shareholders
|
$
|
(3,339,408)
|
|
|
$
|
(0.22)
|
|
|
$
|
(3,537,759)
|
|
|
$
|
(0.23)
|
|
Less: Net loss at
subsidiary attributable to noncontrolling interests
|
79,496
|
|
|
—
|
|
|
8,752
|
|
|
—
|
|
Net income
(loss)
|
(3,418,904)
|
|
|
(0.22)
|
|
|
(3,546,511)
|
|
|
(0.23)
|
|
Discontinued
operations
|
3,206,875
|
|
|
0.21
|
|
|
5,665,177
|
|
|
0.37
|
|
Net income (loss)
from continuing operations
|
$
|
(6,625,779)
|
|
|
$
|
(0.43)
|
|
|
$
|
(9,211,688)
|
|
|
(0.60)
|
|
Adjustments to net
income (loss) from continuing operations
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
55,902
|
|
|
—
|
|
|
(79,316)
|
|
|
(0.01)
|
|
Depreciation and
amortization
|
4,748,565
|
|
|
0.31
|
|
|
4,404,175
|
|
|
0.29
|
|
Share-based
compensation (a)
|
1,046,516
|
|
|
0.07
|
|
|
1,485,898
|
|
|
0.10
|
|
Write-off of deferred
offering costs expense (b)
|
440,091
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
Interest
income
|
(75,345)
|
|
|
—
|
|
|
(243,364)
|
|
|
(0.02)
|
|
Interest
expense
|
263,627
|
|
|
0.02
|
|
|
246,186
|
|
|
0.02
|
|
Adjusted Earnings
(loss) from continuing operations and Adjusted Diluted
Earnings (loss) from continuing operations Per Share
|
$
|
(146,423)
|
|
|
$
|
(0.01)
|
|
|
$
|
(3,398,109)
|
|
|
$
|
(0.22)
|
|
Diluted
weighted-average common shares outstanding:
|
|
|
15,162,184
|
|
|
|
|
15,396,098
|
|
The Company provided the above adjusted supplemental financial
performance measures, which are considered "non-GAAP" financial
measures under applicable Securities and Exchange Commission rules
and regulations. These financial measures should be considered
supplemental to, and not as a substitute for, financial information
prepared in accordance with generally accepted accounting
principles ("GAAP"). The definition of these supplemental measures
may differ from similarly titled measures used by others.
Because these supplemental financial measures exclude the effect
of items that will increase or decrease the Company's reported
results of operations, management strongly encourages investors to
review the Company's consolidated financial statements and publicly
filed reports in their entirety. A reconciliation of the
supplemental financial measures to the most directly comparable
GAAP financial measures is included in the tables accompanying this
release.
Cumberland's management
believes these supplemental financial performance measures are
important as they are used by management, along with financial
measures in accordance with GAAP, to evaluate the Company's
operating performance. In addition, Cumberland believes that they will be used by
certain investors to measure the Company's operating results.
Management believes that presenting these supplemental measures
provides useful information about the Company's underlying
performance across reporting periods on a consistent basis by
excluding items that Cumberland
does not believe are indicative of its core business performance or
reflect long-term strategic activities. Certain of these items are
not settled through cash payments and include: depreciation,
amortization, share-based compensation expense and income taxes.
Cumberland utilizes its net
operating loss carryforwards to pay minimal income taxes. In
addition, the use of these financial measures provides greater
transparency to investors of supplemental information used by
management in its financial and operational decision-making,
including the evaluation of the Company's operating
performance.
The Company defines these supplemental financial measures as
follows:
•
|
Adjusted
Earnings: net income (loss) adjusted for the impact of income
taxes, depreciation and amortization expense, share-based
compensation expense and other income and interest
expense.
|
|
|
|
|
|
|
|
(a) Represents the
share-based compensation of Cumberland.
|
|
|
|
|
|
|
(b) Represents the
write-off of deferred offering costs associated with our previous
S-3.
|
|
|
|
|
•
|
Adjusted Diluted
Earnings Per Share: Adjusted Earnings divided by diluted
weighted-average common shares outstanding.
|
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SOURCE Cumberland Pharmaceuticals Inc.