‒ Q2 2019 Net Revenue of $405 Million; GAAP
Loss per share of $0.13; Combined Adjusted Diluted EPS(1) of $0.09
‒
‒ Positive cash flow from operations of $21
million ‒
‒ Reaffirms Full Year 2019 EBITDA Guidance
‒
‒ Investor Call at 8:30 a.m. ET to Discuss
Second Quarter 2019 Earnings Results ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (the “Company”)
announced its results today for the second quarter ended June 30,
2019.
Summary of GAAP and Non-GAAP Combined
and Adjusted Results
(Unaudited; In thousands, except per
share amounts)
Three Months Ended
June 30, 2019
June 30, 2018
Year/ Year Variance
GAAP Results(2)
Net revenue
$
404,642
$
413,787
(2.2)%
Net loss attributable to Amneal
Pharmaceuticals, Inc.
$
(16,902
)
$
(19,104
)
11.5%
Diluted loss per share attributable to
Amneal Pharmaceuticals, Inc.
$
(0.13
)
$
(0.15
)
13.3%
Non-GAAP Results(1)(3)
Combined net revenue
$
404,642
$
462,328
(12.5)%
Combined adjusted net income
$
26,669
$
69,895
(61.8)%
Combined adjusted EBITDA
$
92,081
$
138,622
(33.6)%
Combined adjusted diluted EPS
$
0.09
$
0.23
(60.9)%
(1) See “Non-GAAP Financial Measures” below.
(2) Prior year financials reflect the results of Amneal
Pharmaceuticals LLC consolidating the results of Impax
Laboratories, LLC from the transaction closing date on May 4,
2018.
(3) For the three months ended June 30, 2018, assumes the
combination between Amneal Pharmaceuticals LLC and Impax
Laboratories, LLC, and the acquisition of Gemini Laboratories, LLC,
excluding the impact of financing and acquisition accounting
adjustments, occurred on January 1, 2018.
Second Quarter 2019 Performance
Net revenue in the second quarter of 2019 was $405 million, a
decrease of 2.2% compared to the second quarter of 2018, due to
lower Generics segment revenue partially offset by an increase in
Specialty segment revenue. Net loss attributable to Amneal
Pharmaceuticals, Inc. was $17 million in the second quarter of 2019
compared to a net loss of $19 million in the prior year period.
Diluted EPS in the second quarter of 2019 was a loss of $0.13
compared to a loss of $0.15 in the prior year period.
Combined net revenue(1) in the second quarter of 2019 was $405
million, a decrease of 12.5% compared to the second quarter of
2018, due to a decline in revenue from both the Generics and
Specialty segments. Combined adjusted net income(1) in the second
quarter of 2019 was $27 million, a decrease of 61.8% compared to
the prior year period. Combined adjusted EBITDA(1) in the second
quarter of 2019 was $92 million, a decrease of 33.6% compared to
the prior year period, due to lower revenue and lower gross
margins, partially offset by lower operating expenses as a result
of cost synergies from the business combination with Impax.
Combined adjusted diluted EPS in the second quarter of 2019 was
$0.09, compared to $0.23 for the prior year period.
(1) See “Non-GAAP Financial Measures” below.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Generics
Operating Income (Loss) to Generics Combined Operating Income
(Loss)
(Unaudited; In
thousands)
Generics
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/
Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Generics
$
335,064
$
—
$
335,064
$
361,770
$
20,995
$
382,765
Cost of goods sold
263,423
—
263,423
211,534
29,624
241,158
Cost of goods sold impairment charges
3,012
—
3,012
—
—
—
Gross profit
68,629
—
68,629
150,236
(8,629
)
141,607
Selling, general, and administrative
14,379
—
14,379
19,621
4,340
23,961
Research and development
45,448
—
45,448
47,206
3,984
51,190
Restructuring and other charges
418
—
418
24,797
—
24,797
Legal settlement gains
—
—
—
(3,000
)
—
(3,000
)
Intellectual property legal development
expenses
2,511
—
2,511
4,004
—
4,004
Acquisition, integration and transaction
related expenses
987
—
987
114,622
—
114,622
Operating income (loss)
$
4,886
$
—
$
4,886
$
(57,014
)
$
(16,953
)
$
(73,967
)
Gross margin
20.5
%
—
%
20.5
%
41.5
%
(41.1
%)
37.0
%
Adjusted gross profit (Non-GAAP)(4)
$
115,434
$
—
$
115,434
$
186,848
$
(1,690
)
$
185,158
Adjusted gross margin (Non-GAAP)(5)
34.5
%
—
%
34.5
%
51.6
%
(8.0
%)
48.4
%
Adjusted operating income (Non-GAAP)
$
64,748
$
—
$
64,748
$
120,662
$
(11,339
)
$
109,323
(4) Adjusted gross profit is calculated as combined net revenue
less adjusted cost of goods sold. See Non-GAAP reconciliations
below for calculation of adjusted cost of goods sold.
(5) Adjusted gross margin is calculated as adjusted gross profit
divided by combined net revenue.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Generics
Operating (Loss) Income to Generics Combined Operating Loss
(Unaudited; In
thousands)
Generics
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Generics
$
717,541
$
—
$
717,541
$
636,959
$
102,237
$
739,196
Cost of goods sold
542,301
—
542,301
342,128
122,761
464,889
Cost of goods sold impairment charges
56,309
—
56,309
—
—
—
Gross profit
118,931
—
118,931
294,831
(20,524
)
274,307
Selling, general, and administrative
38,527
—
38,527
30,824
7,334
38,158
Research and development
95,599
—
95,599
91,415
13,623
105,038
In-process research and development
impairment charges
22,787
—
22,787
—
—
—
Restructuring and other charges
2,499
—
2,499
24,797
—
24,797
Litigation, settlements and related
charges
—
—
—
—
89,159
89,159
Legal settlement gains
—
—
—
(3,000
)
—
(3,000
)
Intellectual property legal development
expenses
5,632
—
5,632
8,580
23
8,603
Acquisition, integration and transaction
related expenses
3,584
—
3,584
114,622
—
114,622
Operating (loss) income
$
(49,697
)
$
—
$
(49,697
)
$
27,593
$
(130,663
)
$
(103,070
)
Gross margin
16.6
%
—
%
16.6
%
46.3
%
(20.1
%)
37.1
%
Adjusted gross profit (Non-GAAP)(4)
$
277,711
$
—
$
277,711
$
333,203
$
3,246
$
336,449
Adjusted gross margin (Non-GAAP)(5)
38.7
%
—
%
38.7
%
52.3
%
3.2
%
45.5
%
Adjusted operating income (Non-GAAP)
$
161,567
$
—
$
161,567
$
208,125
$
(16,752
)
$
191,373
(4) Adjusted gross profit is calculated as combined net revenue
less adjusted cost of goods sold. See Non-GAAP reconciliations
below for calculation of adjusted cost of goods sold.
(5) Adjusted gross margin is calculated as adjusted gross profit
divided by combined net revenue.
Generics net revenue of $335 million decreased 7.4% for the
second quarter of 2019 compared to $362 million for the second
quarter of 2018. Generics combined net revenue(1) in the second
quarter of 2019 was $335 million, a decrease of 12.5% compared to
$383 million in the prior year period. The decrease is primarily
attributable to additional competition on the base generic
portfolio including key products Aspirin Dipyridamole ER Capsules,
Yuvafem and Diclofenac Gel 1% and the sale of two of the Company's
international businesses, partially offset by sales of
Levothyroxine and Guanfacine HCL.
Generics gross margin for the second quarter of 2019 was 20.5%
compared to 41.5% for the second quarter of 2018. Generics combined
adjusted gross margin(1) for the second quarter of 2019 was 34.5%
compared to 48.4% for the prior year period. The decrease is
primarily related to unfavorable generics revenue mix including the
impact of price erosion, and inventory obsolescence charges.
Generics operating income for the second quarter of 2019 was $5
million compared to an operating loss of $57 million for the second
quarter of 2018, primarily due to acquisition, integration and
restructuring charges related to the business combination with
Impax in May 2018. Generics combined adjusted operating income(1)
for the second quarter of 2019 was $65 million, a decrease of 40.8%
compared to $109 million in the prior year period, primarily due to
lower revenues and gross margin as noted above.
(1) See “Non-GAAP Financial Measures” below.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Specialty
Operating Income to Specialty Combined Operating Income
(Unaudited; In
thousands)
Specialty
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Specialty:
Rytary®
$
33,000
$
—
$
33,000
$
20,520
$
8,578
$
29,098
Unithroid®
8,904
—
8,904
4,424
3,207
7,631
Zomig®
14,427
—
14,427
9,695
3,933
13,628
All other specialty products
13,247
—
13,247
17,378
11,828
29,206
Total net revenue - Specialty
69,578
—
69,578
52,017
27,546
79,563
Cost of goods sold
32,958
—
32,958
23,958
6,711
30,669
Gross profit
36,620
—
36,620
28,059
20,835
48,894
Selling, general, and administrative
16,150
—
16,150
13,549
7,707
21,256
Research and development
2,568
—
2,568
3,129
1,007
4,136
Intellectual property legal development
expenses
—
—
—
43
—
43
Restructuring and other charges
—
—
—
2,421
—
2,421
Acquisition, integration and transaction
related expenses
1,366
—
1,366
—
—
—
Operating income
$
16,536
$
—
$
16,536
$
8,917
$
12,121
$
21,038
Gross margin
52.6
%
—
%
52.6
%
53.9
%
75.6
%
61.5
%
Adjusted gross profit (Non-GAAP)(4)
$
56,780
$
—
$
56,780
$
40,660
$
22,363
$
63,023
Adjusted gross margin (Non-GAAP)(5)
81.6
%
—
%
81.6
%
78.2
%
81.2
%
79.2
%
Adjusted operating income (Non-GAAP)
$
39,313
$
—
$
39,313
$
23,939
$
13,649
$
37,588
(4) Adjusted gross profit is calculated as combined net revenue
less adjusted cost of goods sold. See Non-GAAP reconciliations
below for calculation of adjusted cost of goods sold.
(5) Adjusted gross margin is calculated as adjusted gross profit
divided by combined net revenue.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Specialty
Operating Income to Specialty Combined Operating Income
(Unaudited; In
thousands)
Specialty
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Specialty:
Rytary®
$
61,828
$
—
$
61,828
$
20,520
$
35,086
$
55,606
Unithroid®
18,625
—
18,625
4,424
9,716
14,140
Zomig®
25,551
—
25,551
9,695
14,411
24,106
All other specialty products
27,217
—
27,217
17,378
37,032
54,410
Total net revenue - Specialty
133,221
—
133,221
52,017
96,245
148,262
Cost of goods sold
63,823
—
63,823
23,958
26,731
50,689
Gross profit
69,398
—
69,398
28,059
69,514
97,573
Selling, general, and administrative
37,477
—
37,477
13,549
27,942
41,491
Research and development
6,275
—
6,275
3,129
3,664
6,793
Intellectual property legal development
expenses
1,045
—
1,045
43
—
43
Restructuring and other charges
178
—
178
2,421
—
2,421
Litigation, settlements and related
charges
—
—
—
—
940
940
Acquisition, integration and transaction
related expenses
3,250
—
3,250
—
—
—
Operating income
$
21,173
$
—
$
21,173
$
8,917
$
36,968
$
45,885
Gross margin
52.1
%
—
%
52.1
%
53.9
%
72.2
%
65.8
%
Adjusted gross profit (Non-GAAP)(4)
$
109,769
$
—
$
109,769
$
40,660
$
75,626
$
116,286
Adjusted gross margin (Non-GAAP)(5)
82.4
%
—
%
82.4
%
78.2
%
78.6
%
78.4
%
Adjusted operating income (Non-GAAP)
$
68,038
$
—
$
68,038
$
23,939
$
45,144
$
69,083
(4) Adjusted gross profit is calculated as combined net revenue
less adjusted cost of goods sold. See Non-GAAP reconciliations
below for calculation of adjusted cost of goods sold.
(5) Adjusted gross margin is calculated as adjusted gross profit
divided by combined net revenue.
The Specialty segment is comprised of the Impax Specialty
business acquired on May 4, 2018 and the Gemini Laboratories, LLC
business acquired on May 7, 2018. Prior to these two transactions,
Amneal did not have a Specialty segment.
Specialty net revenue in the second quarter of 2019 increased to
$70 million compared to $52 million for the second quarter of 2018,
primarily due to the timing of the combination with Impax and the
Gemini acquisition. Specialty combined net revenue(1) in the second
quarter of 2019 was $70 million, a decrease of 12.5% compared to
the prior year period, driven primarily by lower revenue from
Albenza® as a result of the loss of exclusivity in September of
2018, partially offset by higher revenue from Rytary® and
Unithroid®.
Specialty gross margin for the second quarter of 2019 was 52.6%
compared to 53.9% for the second quarter of 2018. Specialty
combined adjusted gross margin(5) was 81.6% for the second quarter
of 2019 compared to 79.2% in the prior year period, primarily due
to product sales mix.
Specialty operating income for the second quarter of 2019 was
$17 million compared to $9 million for the second quarter of 2018,
primarily due to higher revenue. Specialty combined adjusted
operating income(1) for the second quarter of 2019 was $39 million,
an increase of $1 million compared to the prior year period,
primarily due to lower expenses and favorable product sales
mix.
(1) See “Non-GAAP Financial Measures” below.
Corporate and Other Information
(Unaudited; In thousands)
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
General and administrative expense
$
36,752
$
—
$
36,752
$
22,833
$
8,000
$
30,833
Acquisition, transaction-related and
integration expenses
1,166
—
1,166
92,885
4,381
97,266
Restructuring and other charges
2,417
—
2,417
17,247
223
17,470
Total general, administrative and other
operating expenses
$
40,335
$
—
$
40,335
$
132,965
$
12,604
$
145,569
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
General and administrative expense
$
75,713
$
—
$
75,713
$
36,751
$
28,737
$
65,488
Acquisition, transaction-related and
integration expenses
2,717
—
2,717
100,020
10,925
110,945
Restructuring and other charges
6,319
—
6,319
17,247
5,123
22,370
Total general, administrative and other
operating expenses
$
84,749
$
—
$
84,749
$
154,018
$
44,785
$
198,803
General and administrative and other operating expenses in the
second quarter of 2019 decreased to $40 million compared to $133
million in the prior year period. General and administrative and
other operating expenses on a combined basis(1) in the second
quarter of 2019 decreased to $40 million compared to $146 million
in the prior year period. The decrease is primarily due to costs
associated with the Combination with Impax and Gemini acquisition
including lower acquisition, transaction-related and integration
expenses, and lower restructuring and other charges.
2019 Financial Outlook
Amneal’s full year 2019 estimates are based on management's
current expectations, including with respect to prescription
trends, pricing levels, inventory levels, and the anticipated
timing of future product launches and events. The Company cannot
provide a reconciliation between non-GAAP projections and the most
directly comparable GAAP measures 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.
Amneal is updating certain of its previously provided 2019
guidance as follows:
Full Year 2019 Financial
Guidance
Prior
Updated
Adjusted gross margin
47% - 50%
47% - 50%
Adjusted R&D as a % of net revenue
9% - 10%
9.5% - 10.5%
Adjusted SG&A as a % of net
revenue
11% - 12%
14% - 15%
Adjusted EBITDA
$600 million - $650
million(6)
$425 million - $475 million
Adjusted diluted EPS
$0.94 - $1.04
$0.52 - $0.62
Adjusted effective tax rate
19% - 21%
19% - 21%
Capital expenditures
Approximately $100 million
$65 million - $85 million
Weighted average diluted shares
outstanding
Approximately 300 million
Approximately 300 million
(6) The Company issued revised Adjusted EBITDA guidance on July
10, 2019. Prior to the July 10 update, the Company’s original
guidance with respect to 2019 Adjusted EBITDA was $600 million -
$650 million.
Conference Call Information
Amneal will hold a conference call on August 5, 2019 at 8:30
a.m. Eastern Time to discuss its results. The call and presentation
can also be accessed via a live Webcast through the Investor
Relations section of Amneal’s Web site at https://investors.amneal.com/investor-relations,
or directly at https://event.on24.com/wcc/r/2021447/323A22AA88A202DFC94FA94090002247.
The number to call from within the United States is (844) 746-0741
and (412) 317-5273 internationally. A replay of the conference call
will be available shortly after the call for a period of seven
days. To access the replay, dial (877) 344-7529 (in the U.S.) and
(412) 317-0088 (international callers). The access code for the
replay is 10133264.
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 certain non-GAAP financial measures,
including adjusted EBITDA, adjusted net income, adjusted net income
per diluted share, adjusted gross profit, adjusted gross margin and
adjusted operating income, which are intended as supplemental
measures of the Company’s performance that are not required by or
presented in accordance with GAAP. In addition, this release
includes these non-GAAP measures and our reported results on a
non-GAAP combined basis to include the historical results of Impax
and Gemini, not adjusted for financing and acquisition accounting
impacts of the combination, as if the transaction closing dates had
occurred on the first day of all periods presented herein. All
combined business results presented in this release are not
prepared in accordance with Article 11 of Regulation S-X. The
calculation of Non-GAAP adjusted diluted earnings per share assumes
the conversion of all outstanding shares of Class B Common Stock to
shares of Class A Common stock.
Management uses these non-GAAP historical and combined measures
internally to evaluate and manage the Company’s operations and to
better understand its business because they facilitate a
comparative assessment of the Company's operating performance
relative to its performance based on results calculated under GAAP.
These non-GAAP measures also isolate the effects of some items that
vary from period to period without any correlation to core
operating performance and eliminate 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 certain of these measures to
evaluate management's performance and set its compensation. The
Company believes that these non-GAAP measures also provide useful
information to investors regarding certain financial and business
trends relating to the Company’s financial condition and operating
results, and doing so on a combined basis facilitates an evaluation
of the financial performance of the Company and its operations on a
consistent basis. 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.
These non-GAAP measures are subject to limitations. The non-GAAP
measures presented in this release may not be comparable to
similarly titled measures used by other companies because other
companies may not calculate one or more in the same manner.
Additionally, the non-GAAP performance measures exclude significant
expenses and income that are required by GAAP to be recorded in the
Company’s financial statements; do not reflect changes in, or cash
requirements for, working capital needs; and do not reflect
interest expense, or the requirements necessary to service interest
or principal payments on debt. Further, the combined results may
not represent what our combined results of operations and financial
position would have been had the transactions occurred on the dates
indicated, nor are they intended to project our combined results of
operations or financial position for any future period. To
compensate for these limitations, management presents and considers
these non-GAAP measures in conjunction with the Company’s GAAP
results; no non-GAAP measure should be considered in isolation from
or as alternatives to net income, diluted earnings per share or any
other measure determined in accordance with GAAP. Readers should
review the reconciliations included below, and should not rely on
any single financial measure to evaluate the Company’s
business.
A reconciliation of each non-GAAP measure to the most directly
comparable GAAP measure is set forth below.
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 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 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.
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Operations
(Unaudited; In thousands,
except per share amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
Net revenue
$
404,642
$
413,787
$
850,762
$
688,976
Cost of goods sold
296,381
235,492
606,124
366,086
Cost of goods sold impairment charges
3,012
—
56,309
—
Gross profit
105,249
178,295
188,329
322,890
Selling, general and administrative
67,281
56,003
151,717
81,124
Research and development
48,016
50,335
101,874
94,544
In-process research and development
impairment charges
—
—
22,787
—
Acquisition, transaction-related and
integration expenses
3,519
207,507
9,551
214,642
Restructuring and other charges
2,835
44,465
8,996
44,465
Legal settlement gains
—
(3,000
)
—
(3,000
)
Intellectual property legal development
expenses
2,511
4,047
6,677
8,623
Operating loss
(18,913
)
(181,062
)
(113,273
)
(117,508
)
Other (expense) income:
Interest expense, net
(43,886
)
(36,622
)
(87,167
)
(57,673
)
Foreign exchange gain (loss), net
8,311
(25,946
)
2,847
(17,381
)
Loss on extinguishment of debt
—
(19,667
)
—
(19,667
)
(Loss) gain on sale of international
businesses, net
(1,888
)
—
6,930
—
Other income, net
149
791
1,256
1,739
Total other expense, net
(37,314
)
(81,444
)
(76,134
)
(92,982
)
Loss before income taxes
(56,227
)
(262,506
)
(189,407
)
(210,490
)
Benefit from income taxes
(5,701
)
(12,416
)
(14,129
)
(12,052
)
Net loss
(50,526
)
(250,090
)
(175,278
)
(198,438
)
Less: Net loss attributable to Amneal
Pharmaceuticals LLC pre-Combination
—
200,341
—
148,806
Less: Net loss attributable to
non-controlling interests
33,624
31,885
110,495
31,768
Net loss attributable to Amneal
Pharmaceuticals, Inc. before accretion of redeemable
non-controlling interest
(16,902
)
(17,864
)
(64,783
)
(17,864
)
Accretion of redeemable non-controlling
interest
—
(1,240
)
—
(1,240
)
Net loss attributable to Amneal
Pharmaceuticals, Inc.
$
(16,902
)
$
(19,104
)
$
(64,783
)
$
(19,104
)
Net loss per share attributable to
Amneal Pharmaceuticals, Inc.'s common stockholders:
Class A and Class B-1 basic and
diluted
$
(0.13
)
$
(0.15
)
$
(0.51
)
$
(0.15
)
Weighted-average common shares
outstanding:
Class A and Class B-1 basic and
diluted
128,016
127,112
127,852
127,112
Amneal Pharmaceuticals,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited; In
thousands)
June 30,
2019
December 31,
2018
Assets
Current assets:
Cash and cash equivalents
$
54,893
$
213,394
Restricted cash
2,129
5,385
Trade accounts receivable, net
634,666
481,495
Inventories
414,627
457,219
Prepaid expenses and other current
assets
77,062
128,321
Related party receivables
2,470
830
Total current assets
1,185,847
1,286,644
Property, plant and equipment, net
508,086
544,146
Goodwill
420,017
426,226
Intangible assets, net
1,553,330
1,654,969
Deferred tax asset, net
391,881
373,159
Operating lease right-of-use assets
59,900
—
Operating lease right-of-use assets -
related party
17,031
—
Financing lease right-of-use assets -
related party
62,588
—
Other assets
63,459
67,592
Total assets
$
4,262,139
$
4,352,736
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
505,143
$
514,440
Current portion of long-term debt, net
21,445
21,449
Current portion of operating lease
liabilities
13,313
—
Current portion of operating and financing
lease liabilities - related party
3,293
—
Related party payables
2,965
17,695
Current portion of financing obligation -
related party
—
266
Total current liabilities
546,159
553,850
Long-term debt, net
2,619,788
2,630,598
Deferred income taxes
—
1,178
Liabilities under tax receivable
agreement
193,499
192,884
Operating lease liabilities
47,836
—
Operating lease liabilities - related
party
14,862
—
Financing lease liabilities - related
party
61,990
—
Financing obligation - related party
—
39,083
Other liabilities
28,653
38,780
Total long-term liabilities
2,966,628
2,902,523
Total stockholders' equity
749,352
896,363
Total liabilities and stockholders'
equity
$
4,262,139
$
4,352,736
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited; In
thousands)
Six Months Ended June
30,
2019
2018
Cash flows from operating
activities:
Net loss
$
(175,278
)
$
(198,438
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
99,574
46,897
Amortization of Levothyroxine Transition
Agreement asset
36,393
—
Unrealized foreign currency (gain)
loss
(3,695
)
17,032
Amortization of debt issuance costs
3,218
2,577
Loss on extinguishment of debt
—
19,667
Gain on sale of international businesses,
net
(6,930
)
—
Gain on termination of lease
—
(3,524
)
Intangible asset impairment charges
79,096
—
Non-cash restructuring and asset-related
charges
1,314
—
Deferred tax benefit
(18,209
)
(14,993
)
Stock-based compensation and PPU
expense
10,571
160,401
Inventory provision
50,410
17,426
Other operating charges and credits,
net
3,155
927
Changes in assets and liabilities:
Trade accounts receivable, net
(162,954
)
(60,051
)
Inventories
(19,658
)
(71,655
)
Prepaid expenses, other current assets and
other assets
28,614
(5,107
)
Related party receivables
(1,624
)
11,017
Accounts payable, accrued expenses and
other liabilities
(13,538
)
19,630
Related party payables
2,225
(13,356
)
Net cash used in operating activities
(87,316
)
(71,550
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(29,629
)
(36,600
)
Acquisition of product rights and
licenses
(50,000
)
(3,000
)
Acquisitions, net of cash acquired
—
(321,324
)
Proceeds from sale of international
businesses, net of cash sold
34,834
—
Net cash used in investing activities
(44,795
)
(360,924
)
Cash flows from financing
activities:
Payments of deferred financing costs and
debt extinguishment costs
—
(54,955
)
Proceeds from issuance of debt
—
1,325,383
Payments of principal on debt and capital
leases
(13,500
)
(603,551
)
Payments on revolving credit line
—
(75,000
)
Payments of principal on financing lease -
related party
(866
)
—
Payments of financing obligation - related
party
—
(121
)
Proceeds from exercise of stock
options
1,385
1,977
Employee payroll tax withholding on
restricted stock unit vesting
(921
)
—
Equity contributions
—
27,742
Capital contribution from non-controlling
interest
—
360
Acquisition of non-controlling
interest
(3,543
)
—
Tax distribution to non-controlling
interest
(13,494
)
—
Distributions to members
—
(182,998
)
Repayment of related party note
—
(14,842
)
Net cash (used in) provided by financing
activities
(30,939
)
423,995
Effect of foreign exchange rate on
cash
1,293
(853
)
Net decrease in cash, cash equivalents,
and restricted cash
(161,757
)
(9,332
)
Cash, cash equivalents, and restricted
cash - beginning of period
218,779
77,922
Cash, cash equivalents, and restricted
cash - end of period
$
57,022
$
68,590
Cash and cash equivalents - end of
period
$
54,893
$
61,521
Restricted cash - end of period
2,129
7,069
Cash, cash equivalents, and restricted
cash - end of period
$
57,022
$
68,590
Amneal Pharmaceuticals,
Inc.
Reconciliation of Non-GAAP
Combined Results of Operations
(Unaudited; In
thousands)
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue:
Generics
$
335,064
$
—
$
335,064
$
361,770
$
20,995
$
382,765
Specialty
69,578
—
69,578
52,017
27,546
79,563
Total net revenue
404,642
—
404,642
413,787
48,541
462,328
Cost of goods sold
296,381
—
296,381
235,492
36,335
271,827
Cost of goods sold impairment charges
3,012
—
3,012
—
—
—
Gross profit
105,249
—
105,249
178,295
12,206
190,501
Selling, general and administrative
67,281
—
67,281
56,003
20,047
76,050
Research and development
48,016
—
48,016
50,335
4,991
55,326
Acquisition, transaction-related and
integration expenses
3,519
—
3,519
207,507
4,381
211,888
Restructuring and other charges
2,835
—
2,835
44,465
223
44,688
Legal settlement gains
—
—
—
(3,000
)
—
(3,000
)
Intellectual property legal development
expenses
2,511
—
2,511
4,047
—
4,047
Operating loss
(18,913
)
—
(18,913
)
(181,062
)
(17,436
)
(198,498
)
Other (expense) income:
Interest expense, net
(43,886
)
—
(43,886
)
(36,622
)
(4,539
)
(41,161
)
Foreign exchange gain (loss), net
8,311
—
8,311
(25,946
)
—
(25,946
)
Loss on extinguishment of debt
—
—
—
(19,667
)
—
(19,667
)
Loss on sale of international
businesses
(1,888
)
—
(1,888
)
—
—
—
Other income (expense), net
149
—
149
791
(14
)
777
Total other expense, net
(37,314
)
—
(37,314
)
(81,444
)
(4,553
)
(85,997
)
Loss before income taxes
(56,227
)
—
(56,227
)
(262,506
)
(21,989
)
(284,495
)
(Benefit from) provision for income
taxes
(5,701
)
—
(5,701
)
(12,416
)
1,017
(11,399
)
Net loss
(50,526
)
—
(50,526
)
(250,090
)
(23,006
)
(273,096
)
Less: Net loss attributable to Amneal
Pharmaceuticals LLC pre-Combination
—
—
—
200,341
Less: Net loss attributable to
non-controlling interests
33,624
—
33,624
31,885
Accretion of redeemable non-controlling
interest
—
—
—
(1,240
)
Net loss attributable to Amneal
Pharmaceuticals, Inc.
$
(16,902
)
$
—
$
(16,902
)
$
(19,104
)
Amneal Pharmaceuticals,
Inc.
Reconciliation of Non-GAAP
Combined Results of Operations
(Unaudited; In
thousands)
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue:
Generics
$
717,541
$
—
$
717,541
$
636,959
$
102,237
$
739,196
Specialty
133,221
—
133,221
52,017
96,245
148,262
Total net revenue
850,762
—
850,762
688,976
198,482
887,458
Cost of goods sold
606,124
—
606,124
366,086
149,492
515,578
Cost of goods sold impairment charges
56,309
—
56,309
—
—
—
Gross profit
188,329
—
188,329
322,890
48,990
371,880
Selling, general and administrative
151,717
—
151,717
81,124
64,013
145,137
Research and development
101,874
—
101,874
94,544
17,287
111,831
In-process research and development
impairment charges
22,787
—
22,787
—
—
—
Acquisition, transaction-related and
integration expenses
9,551
—
9,551
214,642
10,925
225,567
Restructuring and other charges
8,996
—
8,996
44,465
5,123
49,588
Legal settlement gains
—
—
—
(3,000
)
—
(3,000
)
Intellectual property legal development
expenses
6,677
—
6,677
8,623
23
8,646
Litigation, settlements and related
charges
—
—
—
—
90,099
90,099
Operating loss
(113,273
)
—
(113,273
)
(117,508
)
(138,480
)
(255,988
)
Other (expense) income:
Interest expense, net
(87,167
)
—
(87,167
)
(57,673
)
(18,231
)
(75,904
)
Foreign exchange gain (loss)
2,847
—
2,847
(17,381
)
921
(16,460
)
Loss on extinguishment of debt
—
—
—
(19,667
)
—
(19,667
)
Gain on sale of international
businesses
6,930
—
6,930
—
—
—
Other income (expense)
1,256
—
1,256
1,739
(638
)
1,101
Total other expense, net
(76,134
)
—
(76,134
)
(92,982
)
(17,948
)
(110,930
)
Loss before income taxes
(189,407
)
—
(189,407
)
(210,490
)
(156,428
)
(366,918
)
Benefit from income taxes
(14,129
)
—
(14,129
)
(12,052
)
(6,273
)
(18,325
)
Net loss
(175,278
)
—
(175,278
)
(198,438
)
(150,155
)
(348,593
)
Less: Net loss attributable to Amneal
Pharmaceuticals LLC pre-Combination
—
—
—
148,806
Less: Net loss attributable to
non-controlling interests
110,495
—
110,495
31,768
Accretion of redeemable non-controlling
interest
—
—
—
(1,240
)
Net loss attributable to Amneal
Pharmaceuticals, Inc.
$
(64,783
)
$
—
$
(64,783
)
$
(19,104
)
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Generics
Cost of Goods Sold to Combined Adjusted Cost of Goods Sold
Generics
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
263,423
$
—
$
263,423
$
211,534
$
29,624
$
241,158
Cost of goods sold impairment
charges
3,012
—
3,012
—
—
—
Adjusted to deduct (add):
Amortization
14,636
—
14,636
6,043
3,934
9,977
Inventory related charges(7)
21,443
—
21,443
30,569
3,005
33,574
Acquisition and site closure
expenses(8)
6,969
—
6,969
—
—
—
Asset impairment charges(9)
3,012
—
3,012
—
—
—
Stock-based compensation expense
813
—
813
—
—
—
Other
(68
)
—
(68
)
—
—
—
Adjusted cost of goods sold
(Non-GAAP)
$
219,630
$
—
$
219,630
$
174,922
$
22,685
$
197,607
Generics
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
542,301
$
—
$
542,301
$
342,128
$
122,761
$
464,889
Cost of goods sold impairment
charges
56,309
—
56,309
—
—
—
Adjusted to deduct (add):
Amortization
25,388
—
25,388
7,803
13,823
21,626
Inventory related charges(7)
21,777
—
21,777
30,569
9,894
40,463
Acquisition and site closure
expenses(8)
16,480
—
16,480
—
—
—
Asset impairment charges(9)
56,309
—
56,309
—
53
53
Stock-based compensation expense
1,409
—
1,409
—
—
—
Amortization of upfront payment(11)
36,393
—
36,393
—
—
—
Other
1,024
—
1,024
—
—
—
Adjusted cost of goods sold
(Non-GAAP)
$
439,830
$
—
$
439,830
$
303,756
$
98,991
$
402,747
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Specialty
Cost of Goods Sold to Combined Adjusted Cost of Goods Sold
Specialty
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
32,958
$
—
$
32,958
$
23,958
$
6,711
$
30,669
Adjusted to deduct:
Amortization
20,160
—
20,160
10,651
1,528
12,179
Inventory related charges(7)
—
—
—
1,950
—
1,950
Adjusted cost of goods sold
(Non-GAAP)
$
12,798
$
—
$
12,798
$
11,357
$
5,183
$
16,540
Specialty
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
63,823
$
—
$
63,823
$
23,958
$
26,731
$
50,689
Adjusted to deduct:
Amortization
40,371
—
40,371
10,651
6,112
16,763
Inventory related charges(7)
—
—
—
1,950
—
1,950
Adjusted cost of goods sold
(Non-GAAP)
$
23,452
$
—
$
23,452
$
11,357
$
20,619
$
31,976
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Generics
Operating Income (Loss) to Combined Adjusted Operating
Income
Generics
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating income (loss)
$
4,886
$
—
$
4,886
$
(57,014
)
$
(16,953
)
$
(73,967
)
Adjusted to add (deduct):
Acquisition and site closure
expenses(8)
10,885
—
10,885
114,622
—
114,622
Amortization
14,636
—
14,636
6,043
3,934
9,977
Inventory related charges(7)
21,443
—
21,443
30,569
3,005
33,574
Stock-based compensation expense
3,875
—
3,875
221
—
221
Asset impairment charges(9)
3,059
—
3,059
—
—
—
Restructuring and other charges(10)
418
—
418
24,797
—
24,797
R&D milestone payment
5,614
—
5,614
1,424
—
1,424
Other
(68
)
—
(68
)
—
(1,325
)
(1,325
)
Adjusted operating income
(Non-GAAP)
$
64,748
$
—
$
64,748
$
120,662
$
(11,339
)
$
109,323
Generics
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating (loss) income
$
(49,697
)
$
—
$
(49,697
)
$
27,593
$
(130,663
)
$
(103,070
)
Adjusted to add (deduct):
Acquisition and site closure
expenses(8)
29,670
—
29,670
114,622
—
114,622
Amortization
25,388
—
25,388
7,803
13,823
21,626
Inventory related charges(7)
21,777
—
21,777
30,569
9,894
40,463
Stock-based compensation expense
5,373
—
5,373
221
982
1,203
Asset impairment charges(9)
79,211
79,211
53
53
Restructuring and other charges(10)
2,499
—
2,499
24,797
—
24,797
Litigation, settlements and related
charges(12)
—
—
—
—
89,159
89,159
Amortization of upfront payment(11)
36,393
—
36,393
—
—
—
R&D milestone payment
9,929
—
9,929
2,700
—
2,700
Other
1,024
—
1,024
(180
)
—
(180
)
Adjusted operating income
(Non-GAAP)
$
161,567
$
—
$
161,567
$
208,125
$
(16,752
)
$
191,373
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Specialty
Operating Income to Combined Adjusted Operating Income
Specialty
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating income
$
16,536
$
—
$
16,536
$
8,917
$
12,121
$
21,038
Adjusted to add:
Amortization
20,160
—
20,160
10,651
1,528
12,179
Inventory related charges(7)
—
—
—
1,950
—
1,950
Acquisition and site closure
expenses(8)
2,251
—
2,251
—
—
—
Stock-based compensation expense
366
—
366
—
—
—
Restructuring and other charges(10)
—
—
—
2,421
—
2,421
Adjusted operating income
(Non-GAAP)
$
39,313
$
—
$
39,313
$
23,939
$
13,649
$
37,588
Specialty
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating income
$
21,173
$
—
$
21,173
$
8,917
$
36,968
$
45,885
Adjusted to add:
Amortization
40,371
—
40,371
10,651
6,112
16,763
Inventory related charges(7)
—
—
—
1,950
—
1,950
Acquisition and site closure
expenses(8)
5,806
—
5,806
—
—
—
Stock-based compensation expense
510
—
510
—
1,124
1,124
Restructuring and other charges(10)
178
—
178
2,421
—
2,421
Litigation, settlements and related
charges
—
—
—
—
940
940
Adjusted operating income
(Non-GAAP)
$
68,038
$
—
$
68,038
$
23,939
$
45,144
$
69,083
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In thousands,
except per share amounts)
Reconciliation of Net Loss to
Combined Adjusted Net Income and Calculation of Adjusted Diluted
EPS
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(50,526
)
$
—
$
(50,526
)
$
(250,090
)
$
(23,006
)
$
(273,096
)
Adjusted to add (deduct):
Non-cash interest
1,617
—
1,617
4,407
2,549
6,956
GAAP Income tax (benefit) expense
(5,701
)
—
(5,701
)
(12,416
)
1,017
(11,399
)
Amortization
34,796
—
34,796
16,694
5,462
22,156
Stock-based compensation expense
6,224
—
6,224
1,644
—
1,644
Acquisition and site closure
expenses(8)
19,056
—
19,056
207,507
4,381
211,888
Restructuring and other charges(10)
2,835
—
2,835
44,465
223
44,688
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges(7)
21,443
—
21,443
32,519
3,005
35,524
Loss on sale of assets
—
—
—
878
—
878
Asset impairment charges(9)
4,408
—
4,408
—
—
—
Foreign exchange (gain) loss
(8,311
)
—
(8,311
)
25,946
—
25,946
Loss on sale of international
business(13)
1,888
—
1,888
—
—
—
R&D milestone payments
5,614
—
5,614
1,424
—
1,424
Other
491
—
491
1,225
1,300
2,525
Income tax at 21%
(7,104
)
—
(7,104
)
(19,943
)
1,064
(18,879
)
Net income attributable to NCI not
associated with our Class B shares
(61
)
—
(61
)
(27
)
—
(27
)
Adjusted net income (Non-GAAP)
$
26,669
$
—
$
26,669
$
73,900
$
(4,005
)
$
69,895
Adjusted diluted EPS
(Non-GAAP)(14)
$
0.09
$
0.23
(14) Under the if-converted method, for the three months ended
June 30, 2019, utilizes weighted average diluted shares outstanding
of 299,139, which consists of Class A & Class B shares. Under
the if-converted method, for the three months ended June 30, 2018,
utilizes weighted average diluted shares outstanding of 299,029,
which consists of Class A, Class B & Class B-1 shares.
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In thousands,
except per share amounts)
Reconciliation of Net Loss to
Combined Adjusted Net Income and Calculation of Adjusted Diluted
EPS
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(175,278
)
$
—
$
(175,278
)
$
(198,438
)
$
(150,155
)
$
(348,593
)
Adjusted to add (deduct):
Non-cash interest
3,218
—
3,218
5,577
9,413
14,990
GAAP Income tax benefit
(14,129
)
—
(14,129
)
(12,052
)
(6,273
)
(18,325
)
Amortization
65,759
—
65,759
18,454
19,935
38,389
Stock-based compensation expense
10,571
—
10,571
1,644
4,816
6,460
Acquisition and site closure
expenses(8)
47,258
—
47,258
214,642
10,925
225,567
Restructuring and other charges(10)
8,996
—
8,996
44,465
5,123
49,588
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges(7)
21,777
—
21,777
32,519
9,894
42,413
Litigation, settlements and related
charges(12)
—
—
—
—
90,099
90,099
Loss on sale of assets
—
—
—
878
—
878
Asset impairment charges(9)
81,008
—
81,008
—
53
53
Amortization of upfront payment
36,393
—
36,393
—
—
—
Foreign exchange (gain) loss
(2,847
)
—
(2,847
)
17,381
(921
)
16,460
Gain on sale of international businesses,
net (13)
(6,930
)
—
(6,930
)
—
—
—
R&D milestone payments
9,929
—
9,929
2,700
—
2,700
Other
1,583
—
1,583
(820
)
1,953
1,133
Income tax at 21%
(18,334
)
—
(18,334
)
(31,020
)
1,309
(29,711
)
Net income attributable to NCI not
associated with our Class B shares
(140
)
—
(140
)
(144
)
—
(144
)
Adjusted net income (Non-GAAP)
$
68,834
$
—
$
68,834
$
115,453
$
(3,829
)
$
111,624
Adjusted diluted EPS
(Non-GAAP)(15)
$
0.23
$
0.37
(15) Under the if-converted method, for the six months ended
June 30, 2019, utilizes weighted average diluted shares outstanding
of 299,117, which consists of Class A & Class B shares. Under
the if-converted method, for the six months ended June 30, 2018,
utilizes weighted average diluted shares outstanding of 299,029,
which consists of Class A, Class B & Class B-1 shares.
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited, In
thousands)
Reconciliation of Net Loss to
EBITDA and Combined Adjusted EBITDA
Three months ended June 30,
2019
Three months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(50,526
)
$
—
$
(50,526
)
$
(250,090
)
$
(23,006
)
$
(273,096
)
Adjusted to add (deduct):
Interest expense, net
43,886
—
43,886
36,622
4,539
41,161
Income tax (benefit) expense
(5,701
)
—
(5,701
)
(12,416
)
1,017
(11,399
)
Depreciation and amortization
50,706
—
50,706
32,147
6,925
39,072
EBITDA (Non-GAAP)
$
38,365
$
—
$
38,365
$
(193,737
)
$
(10,525
)
$
(204,262
)
Adjusted to add (deduct):
Stock-based compensation expense
$
6,224
$
—
$
6,224
$
1,644
$
—
$
1,644
Acquisition and site closure
expenses(8)
19,056
—
19,056
207,507
4,381
211,888
Restructuring and other charges(10)
2,835
—
2,835
44,465
223
44,688
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges(7)
21,443
—
21,443
32,519
3,005
35,524
Loss on sale of assets
—
—
—
878
—
878
Asset impairment charges(9)
4,408
—
4,408
—
—
—
Foreign exchange (gain) loss
(8,311
)
—
(8,311
)
25,946
—
25,946
Loss on sale of international
businesses(13)
1,888
—
1,888
—
—
—
R&D milestone payments
5,614
—
5,614
1,424
—
1,424
Other
559
—
559
1,225
—
1,225
Adjusted EBITDA (Non-GAAP)
$
92,081
$
—
$
92,081
$
141,538
$
(2,916
)
$
138,622
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliation of Net Loss to
EBITDA and Combined Adjusted EBITDA
Six months ended June 30,
2019
Six months ended June 30,
2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(175,278
)
$
—
$
(175,278
)
$
(198,438
)
$
(150,155
)
$
(348,593
)
Adjusted to add (deduct):
Interest expense, net
87,167
—
87,167
57,673
18,231
75,904
Income tax benefit
(14,129
)
—
(14,129
)
(12,052
)
(6,273
)
(18,325
)
Depreciation and amortization
99,574
—
99,574
46,898
24,900
71,798
EBITDA (Non-GAAP)
$
(2,666
)
$
—
$
(2,666
)
$
(105,919
)
$
(113,297
)
$
(219,216
)
Adjusted to add (deduct):
Stock-based compensation expense
$
10,571
$
—
$
10,571
$
1,644
$
4,816
$
6,460
Acquisition and site closure
expenses(8)
47,258
—
47,258
214,642
10,925
225,567
Restructuring and other charges(10)
8,996
—
8,996
44,465
5,123
49,588
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges(7)
21,777
—
21,777
32,519
9,894
42,413
Litigation, settlements and related
charges(12)
—
—
—
—
90,099
90,099
Loss on sale of assets
—
—
—
878
—
878
Asset impairment charges(9)
81,008
—
81,008
—
53
53
Amortization of upfront payment(11)
36,393
—
36,393
—
—
—
Foreign exchange (gain) loss
(2,847
)
—
(2,847
)
17,381
(921
)
16,460
Gain on sale of international businesses,
net (13)
(6,930
)
—
(6,930
)
—
—
—
R&D milestone payments
9,929
—
9,929
2,700
—
2,700
Other
559
—
559
(820
)
653
(167
)
Adjusted EBITDA (Non-GAAP)
$
204,048
$
—
$
204,048
$
227,157
$
7,345
$
234,502
(7) For the three and six months ended June 30, 2019, inventory
related charges primarily represent inventory obsolescence
resulting from new initiatives and policies adopted with our
restructuring effort. For the three and six months ended June 30,
2018, inventory related charges represents a reserve for an
unfavorable supply arrangement and the amortization of the Impax
inventory step-up to fair value in purchase accounting.
(8) Acquisition and site closure expenses for the three and six
months ended June 30, 2019 includes costs related to (i) plant
closure and redundant employee costs and (ii) third party costs
associated with the combination of Impax and related integration
including legal, investment banking, accounting and information
technology. For the three and six months ended June 30, 2018,
acquisition and site closure expenses also includes costs
associated with the Impax sale of its Middlesex, NJ and Taiwan
facilities.
(9) Asset impairment charges for the three and six months ended
June 30, 2019 are primarily associated with the write-off of in
process research and development product rights and intangible
asset impairment charges primarily related to products acquired in
the Impax combination.
(10) Restructuring and other charges includes employee
separation costs associated with the consolidation of sites, as
well as the write-off of property, plant, and equipment at those
sites.
(11) Amortization of upfront payment represents the amortization
of the upfront payment made to Lannett in connection with our
Transition Agreement with Levothyroxine.
(12) Litigation, settlements and related charges represents an
Impax litigation settlement charge for the three and six months
ended June 30, 2018 related to a settlement of claims with the
plaintiffs in the class action antitrust suits related to
Solodyn®.
(13) For the three months ended June 30, 2019, loss on the sale
of international business represents the loss from the sale of our
Amneal Deutschland GmbH subsidiary, which comprised substantially
all of the Company's operations in Germany. For the six months
ended June 30, 2019, gain on the sale of international businesses,
net represents the gain from the sale of our Creo Pharma Holding
Limited subsidiary, which comprised substantially all of the
Company's operations in the United Kingdom partially offset by the
loss from the sale of our Amneal Deutschland GmbH subsidiary, which
comprised substantially all of the Company's operations in
Germany.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190805005245/en/
Mark Donohue (908) 409-6718
Amneal Pharmaceuticals (NYSE:AMRX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amneal Pharmaceuticals (NYSE:AMRX)
Historical Stock Chart
From Apr 2023 to Apr 2024
