‒ Plan expected to reduce costs by
approximately $50 million annually ‒
‒ Reduces Full Year 2019 Adjusted EBITDA
Guidance ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) today announced a
comprehensive restructuring plan designed to reduce its cost base,
further right size its organization and optimize its global
manufacturing infrastructure.
“Recently we initiated an in depth, company-wide review of our
organizational structures, operational budgets, current and future
capital projects, and existing capability and infrastructure
alignments,” said Rob Stewart, President and Chief Executive
Officer of Amneal. “We undertook this review in response to the
continuing industry challenges impacting our business, including
ongoing pressure on our base generics business from the limited
number of buyers and the greater than expected effect of additional
competition on our key generic products. Additionally, while the
value from our complex product pipeline is still expected to be
realized, it continues to take longer to materialize than we
expected.”
“As a result of this review we have decided to take immediate
steps to re-align our business infrastructure and cost base in an
effort to align our Company to better deal with the current
business realities,” said Mr. Stewart. “These decisive actions
represent a difficult but necessary step forward to position Amneal
for future success.”
The restructuring plan is expected to reduce Amneal’s total
annual cost base by approximately $50.0 million. A majority of the
restructuring milestones are expected to be achieved during 2020,
with the full benefit of these actions being realized in 2021 and
beyond. The Company will continue to monitor its cost base in light
of market dynamics.
Key elements of the restructuring plan include substantial
operating budget reductions and revised, more efficient
organizational structures across all company functions;
re-prioritization of R&D projects to focus on key,
limited-competition opportunities; and realignment of manufacturing
and R&D infrastructure to be more cost efficient and agile in
responding to market opportunities.
Additional details regarding the restructuring plan and
restructuring charges will be provided in the future.
The Company also announced that as a result of continuing market
pressure and additional competition on its key generic products,
the uncertainty of supply of epinephrine auto-injector (generic
Adrenaclick®) from its third-party supplier during the high
seasonal third quarter, as well as delays in key product approvals
and launches including generic NuvaRing®, it currently expects
adjusted EBITDA for 2019 to now be in the range of $425 million to
$475 million.
The Company will revise its remaining 2019 financial guidance
metrics (previously announced on May 9, 2019) when it reports its
second quarter 2019 results on August 8, 2019.
Mr. Stewart concluded, “I recognize these actions represent
considerable change for Amneal. As a responsible employer, we are
committed to treating all employees fairly and providing those who
will be affected by these actions a comprehensive transition plan.
The changes announced today were not made lightly, but are
necessary to ensure that Amneal continues to deliver on our
commitment to provide affordable medicines for patients and value
for stakeholders.”
About Amneal
Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in
Bridgewater, NJ, is an integrated pharmaceutical company focused on
developing, manufacturing and distributing generic, brand and
biosimilar products. The Company has operations in North America,
Asia, and Europe, working together to bring high-quality medicines
to patients primarily within the United States.
Amneal has an extensive portfolio of more than 300 generic
medicines, and is expanding its portfolio to include complex dosage
forms in a broad range of therapeutic areas. The Company also
markets a portfolio of branded pharmaceutical products through its
Specialty segment focused principally on central nervous system
disorders and parasitic infections. For more information, visit
www.amneal.com.
Non-GAAP Financial Measures
This release includes a projection of the non-GAAP financial
measure adjusted EBITDA, which is intended as a supplemental
measure of the Company’s performance and is not required by or
presented in accordance with GAAP. We define adjusted EBITDA as net
income before net interest expense, income taxes, depreciation and
amortization (EBITDA), as adjusted for certain other items
described in our SEC filings, including stock-based compensation
expense, acquisition and site closure expenses, restructuring and
asset-related charges, loss on extinguishment of debt, inventory
related charges, litigation, settlements and related charges,
losses or gains on sales of assets, asset impairment charges,
amortization of upfront payments, royalty expenses, foreign
exchange losses or gains, loss on sale of international operations,
R&D milestone payments, and change in value of contingent
consideration. Management uses adjusted EBITDA internally to
evaluate and manage the Company’s operations and to better
understand its business because Adjusted EBITDA facilitates a
comparative assessment of the Company's operating performance
relative to its performance based on results calculated under GAAP.
Adjusted EBITDA also isolates the effects of some items that vary
from period to period without any correlation to core operating
performance and eliminates certain charges that management believes
do not reflect the Company's operations and underlying operational
performance. The compensation committee of the Company’s board of
directors also uses adjusted EBITDA to evaluate management's
performance and set its compensation. The Company believes that
adjusted EBITDA also provides useful information to investors
regarding certain financial and business trends relating to the
Company’s financial condition and operating results. Providing this
information therefore allows investors to make independent
assessments of the Company’s financial performance, results of
operation and trends while viewing the information through the eyes
of management.
Adjusted EBITDA is subject to limitations. Adjusted EBITDA as
presented in this release may not be comparable to similarly titled
measures used by other companies because other companies may not
calculate adjusted EBITDA in the same manner. Additionally,
adjusted EBITDA excludes significant expenses and income that are
required by GAAP to be recorded in the Company’s financial
statements; does not reflect changes in, or cash requirements for,
working capital needs; and does not reflect interest expense, or
the requirements necessary to service interest or principal
payments on debt. To compensate for these limitations, management
presents and considers adjusted EBITDA in conjunction with the
Company’s GAAP results. Adjusted EBITDA should not be considered in
isolation from or as an alternative to net income determined in
accordance with GAAP. Readers should not rely on any single
financial measure to evaluate the Company’s business.
The Company cannot provide a reconciliation between adjusted
EBITDA projections and the most directly comparable GAAP measure
without unreasonable efforts because it is unable to predict with
reasonable certainty the ultimate outcome of certain significant
items required for the reconciliation. The items include, but are
not limited to, acquisition-related expenses, restructuring
expenses, asset impairments and other gains and losses. These items
are uncertain, depend on various factors, and could have a material
impact on U.S. GAAP reported results for 2019.
Safe Harbor Statement
Certain statements contained herein, regarding matters that are
not historical facts, may be forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995). Such
forward-looking statements include statements regarding
management’s intentions, plans, beliefs, expectations or forecasts
for the future, including, among other things, future operating
results and financial performance, product development and
launches, integration strategies and resulting cost reduction,
market position and business strategy. Words such as “may,” “will,”
“could,” “expect,” “plan,” “anticipate,” “intend,” “believe,”
“estimate,” “assume,” “continue,” and similar words are intended to
identify estimates and forward-looking statements.
The reader is cautioned not to rely on these forward-looking
statements. These forward-looking statements are based on current
expectations of future events. If the underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could vary materially from the expectations and
projections of Amneal Pharmaceuticals, Inc. (the “Company”). Such
risks and uncertainties include, but are not limited to: our
ability to execute the restructuring plan described in this release
and achieve the cost savings and other results anticipated
therefrom; the impact of global economic conditions; our ability to
integrate the operations of Amneal Pharmaceuticals LLC and Impax
Laboratories, LLC pursuant to the business combination completed on
May 4, 2018, and our ability to realize the anticipated synergies
and other benefits of the combination; our ability to successfully
develop and commercialize new products; our ability to obtain
exclusive marketing rights for our products and to introduce
products on a timely basis; the competition we face in the
pharmaceutical industry from brand and generic drug product
companies, and the impact of that competition as well as
consolidation of institutional buyers and payers on our ability to
set prices; our ability to manage our growth; our dependence on the
sales of a limited number of products for a substantial portion of
our total revenues; the risk of product liability and other claims
against us by consumers and other third parties; risks related to
changes in the regulatory environment, including United States
federal and state laws related to healthcare fraud abuse and health
information privacy and security and changes in such laws; changes
to FDA product approval requirements; risks related to federal
regulation of arrangements between manufacturers of branded and
generic products; the impact of healthcare reform and changes in
coverage and reimbursement levels by governmental authorities and
other third-party payers; the continuing trend of consolidation of
certain customer groups; our reliance on certain licenses to
proprietary technologies from time to time; our dependence on third
party suppliers and distributors for raw materials for our products
and certain finished goods; the impact of global economic
conditions; our dependence on third party agreements for a portion
of our product offerings; our ability to make acquisitions of or
investments in complementary businesses and products on
advantageous terms; legal, regulatory and legislative efforts by
our brand competitors to deter competition from our generic
alternatives; the significant amount of resources we expend on
research and development; our substantial amount of indebtedness
and our ability to generate sufficient cash to service our
indebtedness in the future, and the impact of interest rate
fluctuations on such indebtedness; the high concentration of
ownership of our Class A Common Stock and the fact that we are
controlled by a group of stockholders. A further list and
descriptions of these risks, uncertainties and other factors can be
found in the Company’s most recently filed Annual Report on Form
10-K for the fiscal year ended December 31, 2018, as supplemented
by any subsequently filed Quarterly Reports on Form 10-Q. Copies of
these filings are available online at www.sec.gov, www.amneal.com
or on request from the Company.
Forward-looking statements included herein speak only as of the
date hereof and we undertake no obligation to revise or update such
statements to reflect the occurrence of events or circumstances
after the date hereof.
Trademarks referenced herein are the property of their
respective owner.
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version on businesswire.com: https://www.businesswire.com/news/home/20190710005214/en/
Amneal Investors: Mark Donohue (908) 409-6718
Media: David Belian (908) 280-6043
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