‒ Q3 2019 Net Revenue of $378 million; GAAP
Loss per share of ($2.03); Adjusted Diluted EPS (1) of $0.04 ‒
‒ Positive Cash Flow from Operations of $140
million ‒
‒ Executing on Near-Term Strategic Actions to
Accelerate Business Performance ‒
‒ Announced Licensing Agreement to Develop and
Commercialize Neurology Focused Orphan Drug to Treat Myasthenia
Gravis ‒
‒ Co-Chief Executive Officers and Certain
Amneal Group Legacy Owners Authorized to Purchase up to 10 Million
Additional Shares ‒
‒ Updates Full Year 2019 Guidance ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (the “Company”)
announced its results today for the third quarter ended September
30, 2019.
Net revenue in the third quarter of 2019 was $378 million, a
decrease of 21% compared to $476 million in the third quarter of
2018, primarily due to lower Generics business revenue. Net loss
attributable to Amneal Pharmaceuticals, Inc. was $265 million in
the third quarter of 2019 compared to a net income of $7 million in
the prior year period. Diluted EPS in the third quarter of 2019 was
a loss of $2.03 compared to earnings of $0.05 in the prior year
period.
Adjusted net income(1) in the third quarter of 2019 was $12
million, a decrease of 86% compared to the prior year period.
Adjusted EBITDA(1) in the third quarter of 2019 was $71 million, a
decrease of 56% 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 savings initiatives.
Adjusted diluted EPS in the third quarter of 2019 was $0.04,
compared to $0.27 for the prior year period.
The Company generated positive cash flow from operations in the
third quarter of 2019 of $140 million. Cash and cash equivalents,
including restricted cash as of September 30, 2019 were $217
million, down slightly from year end, but increased $160 million
from the second quarter ended June 30, 2019.
“While we are disappointed with our third quarter results, we
continue to be optimistic about Amneal and view 2019 as a
transition year,” said Chirag and Chintu Patel, Co-Chief Executive
Officers. “Since rejoining as Co-CEOs in early August, we have
substantially completed a comprehensive review of the business and
believe we have identified the root causes of Amneal’s recent
underperformance. This review has reinforced our belief that Amneal
is a fundamentally strong company with a diverse generics portfolio
across multiple dosage forms, a growing and increasingly complex
pipeline and a specialty franchise with significant opportunities.
We have already implemented initiatives to accelerate the
reinvigoration of our Company and are confident we will return to
growth in 2020 and beyond.”
Development and Commercialization Partnership
In a separate press release today, the Company announced that it
has entered into a licensing agreement with Kashiv BioSciences, LLC
for the development and commercialization of Kashiv’s orphan drug
K127 (pyridostigmine) for the treatment of Myasthenia Gravis.
Through this partnership, Amneal gains exclusive rights within the
United States to the New Drug Application and commercialization of
K127.
Equity Purchase Authorization
The Board of Directors Conflicts Committee has approved a waiver
of an existing standstill provision in the Second Amended and
Restated Stockholders Agreement, as amended (the “Stockholders
Agreement”), between the Company and certain of its stockholders,
which will allow the Company’s Co-Chief Executive Officers, Chirag
Patel and Chintu Patel, and certain other Amneal legacy owners
(and/or affiliates thereof) that are subject to the Stockholders
Agreement, to purchase up to 10 million shares of Class A common
stock on the open market during permissible trading windows. The
timing, price and volume of the share purchases, if any, will be
determined by the buyers based on applicable securities laws and
other relevant factors. The waiver is scheduled to expire on March
15, 2020.
(1) See “Non-GAAP Financial Measures” below.
Amneal Pharmaceuticals,
Inc.
Generics Operating
Results
(Unaudited; In
thousands)
Generics
Three Months Ended September
30,
2019
2018
Net revenue - Generics
$
291,021
$
391,175
Cost of goods sold
217,773
230,051
Cost of goods sold impairment charges
49,115
7,815
Gross profit
24,133
153,309
Selling, general, and administrative
14,256
21,030
Research and development
34,316
38,347
In-process research and development
impairment charges
23,382
650
Restructuring and other charges
14,702
(2,885
)
Charges (gains) related to legal matters,
net
14,750
—
Intellectual property legal development
expenses
2,586
3,929
Acquisition, integration and transaction
related expenses
502
—
Operating (loss) income
$
(80,361
)
$
92,238
Gross margin
8.3
%
39.2
%
Adjusted gross profit (Non-GAAP) (2)
$
86,789
$
194,368
Adjusted gross margin (Non-GAAP) (3)
29.8
%
49.7
%
Adjusted operating income (Non-GAAP)
$
39,693
$
131,449
(1)
See “Non GAAP Financial Measures”
below.
(2)
Adjusted gross profit is calculated as net
revenue less adjusted cost of goods sold. See Non-GAAP
reconciliations below for calculation of adjusted cost of goods
sold.
(3)
Adjusted gross margin is calculated as
adjusted gross profit divided by net revenue. See “Non-GAAP
Financial Measures” below.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Generics
Operating (Loss) Income to Generics Combined Operating Loss
(Unaudited; In
thousands)
Generics
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Generics
$
1,008,562
$
—
$
1,008,562
$
1,028,134
$
102,237
$
1,130,371
Cost of goods sold
760,074
—
760,074
572,179
122,761
694,940
Cost of goods sold impairment charges
105,424
—
105,424
7,815
—
7,815
Gross profit
143,064
—
143,064
448,140
(20,524
)
427,616
Selling, general, and administrative
52,783
—
52,783
51,854
7,334
59,188
Research and development
129,915
—
129,915
129,762
13,623
143,385
In-process research and development
impairment charges
46,169
—
46,169
650
—
650
Restructuring and other charges
17,201
—
17,201
21,912
—
21,912
Charges (gains) related to legal matters,
net
14,750
—
14,750
(3,000
)
89,159
86,159
Intellectual property legal development
expenses
8,218
—
8,218
12,509
23
12,532
Acquisition, integration and transaction
related expenses
4,086
—
4,086
114,622
—
114,622
Operating (loss) income
$
(130,058
)
$
—
$
(130,058
)
$
119,831
$
(130,663
)
$
(10,832
)
Gross margin
14.2
%
—
%
14.2
%
43.6
%
(20.1
)%
37.8
%
Adjusted gross profit (Non-GAAP) (2)
$
364,500
$
—
$
364,500
$
527,571
$
3,246
$
530,817
Adjusted gross margin (Non-GAAP) (3)
36.1
%
—
%
36.1
%
51.3
%
3.2
%
47.0
%
Adjusted operating income (Non-GAAP)
$
201,260
$
—
$
201,260
$
339,574
$
(16,752
)
$
322,822
(1)
See “Non-GAAP Financial Measures”
below.
(2)
Adjusted gross profit is calculated as net
revenue less adjusted cost of goods sold or combined net revenue
less adjusted combined cost of goods sold, as applicable. See
Non-GAAP reconciliations below for calculation of adjusted cost of
goods sold.
(3)
Adjusted gross margin is calculated as
adjusted gross profit divided by net revenue or adjusted combined
gross profit divided by combined net revenue, as applicable. See
“Non-GAAP Financial Measures” below.
Generics net revenue was $291 million in the third quarter of
2019 compared to $391 million for the prior year period. The
decrease is primarily attributable to additional competition on the
base generic portfolio including Yuvafem, Aspirin Dipyridamole ER
Capsules, and Diclofenac Gel 1%, the sale of two of the Company's
international businesses earlier in 2019, the reclassification of
Oxymorphone HCI to the Specialty segment during the third quarter
of 2019 and the ongoing supply constraints of Epinephrine
Auto-Injector. The decrease was partially offset by sales of
Levothyroxine and new product launches in 2019, as well as higher
sales of Triamcinolone Acetonide injection.
Generics gross margin for the third quarter of 2019 was 8%
compared to 39% for the prior year period. The decrease is
primarily related to impairment and inventory obsolescence charges,
and the impact of price erosion. Generics adjusted gross margin(1)
for the third quarter of 2019 was 30% compared to 50% for the prior
year period primarily due to product sales mix and the impact of
price erosion and volume declines leading to underutilization of
manufacturing facilities.
Generics operating loss for the third quarter of 2019 was $80
million compared to operating income of $92 million for the 2018,
primarily due to lower revenue and gross profit as noted above, and
in-process research and development impairment charges,
restructuring charges and legal charges relating to commercial and
governmental legal proceedings and claims. Generics adjusted
operating income(1) for the third quarter of 2019 was $40 million
compared to $131 million for the prior year period primarily due to
lower revenue and lower gross profit, partially offset by lower
operating expenses as a result of cost savings initiatives.
Amneal Pharmaceuticals,
Inc.
Specialty Operating
Results
(Unaudited; In
thousands)
Specialty
Three Months Ended September
30,
2019
2018
Net revenue - Specialty:
Rytary®
$
33,710
$
33,073
Unithroid®
10,155
7,829
Zomig®
13,971
15,445
All other specialty products
29,426
28,965
Total net revenue - Specialty
87,262
85,312
Cost of goods sold
49,944
38,516
Cost of goods sold impairment charges
7,017
—
Gross profit
30,301
46,796
Selling, general, and administrative
20,228
19,716
Research and development
3,809
4,002
Intellectual property legal development
expenses
—
472
Restructuring and other charges
213
(27
)
Acquisition, integration and transaction
related expenses
2,455
—
Operating income
$
3,596
$
22,633
Gross margin
34.7
%
54.9
%
Adjusted gross profit (Non-GAAP) (2)
$
64,421
$
67,304
Adjusted gross margin (Non-GAAP) (3)
73.8
%
78.9
%
Adjusted operating income (Non-GAAP)
$
40,907
$
43,589
(1)
See “Non-GAAP Financial Measures”
below.
(2)
Adjusted gross profit is calculated as net
revenue less adjusted cost of goods sold. See Non-GAAP
reconciliations below for calculation of adjusted cost of goods
sold.
(3)
Adjusted gross margin is calculated as
adjusted gross profit divided by net revenue. See “Non-GAAP
Financial Measures” below.
Amneal Pharmaceuticals,
Inc.
Reconciliation of Specialty
Operating Income to Specialty Combined Operating Income
(Unaudited; In
thousands)
Specialty
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue - Specialty:
Rytary®
$
95,538
$
—
$
95,538
$
53,593
$
35,086
$
88,679
Unithroid®
28,780
—
28,780
12,253
9,716
21,969
Zomig®
39,522
—
39,522
25,140
14,411
39,551
All other specialty products
56,643
—
56,643
46,343
37,032
83,375
Total net revenue - Specialty
220,483
—
220,483
137,329
96,245
233,574
Cost of goods sold
113,767
—
113,767
62,474
26,731
89,205
Cost of goods sold impairment charges
7,017
—
7,017
—
—
—
Gross profit
99,699
—
99,699
74,855
69,514
144,369
Selling, general, and administrative
57,705
—
57,705
33,265
27,942
61,207
Research and development
10,084
—
10,084
7,131
3,664
10,795
Intellectual property legal development
expenses
1,045
—
1,045
515
—
515
Restructuring and other charges
391
—
391
2,394
—
2,394
Charges related to legal matters, net
—
—
—
—
940
940
Acquisition, integration and transaction
related expenses
5,705
—
5,705
—
—
—
Operating income
$
24,769
$
—
$
24,769
$
31,550
$
36,968
$
68,518
Gross margin
45.2
%
—
%
45.2
%
54.5
%
72.2
%
61.8
%
Adjusted gross profit (Non-GAAP) (2)
$
174,190
$
—
$
174,190
$
107,964
$
75,626
$
183,590
Adjusted gross margin (Non-GAAP) (3)
79.0
%
—
%
79.0
%
78.6
%
78.6
%
78.6
%
Adjusted operating income (Non-GAAP)
$
108,945
$
—
$
108,945
$
67,528
$
45,144
$
112,672
(1)
See “Non-GAAP Financial Measures”
below.
(2)
Adjusted gross profit is calculated as net
revenue less adjusted cost of goods sold or combined net revenue
less adjusted combined cost of goods sold, as applicable. See
Non-GAAP reconciliations below for calculation of adjusted cost of
goods sold.
(3)
Adjusted gross margin is calculated as
adjusted gross profit divided by net revenue or adjusted combined
gross profit divided by combined net revenue, as applicable. See
“Non-GAAP Financial Measures” below.
Specialty net revenue was $87 million in the third quarter of
2019 compared to $85 million for the prior year period, primarily
due to the reclassification of Oxymorphone HCI during the third
quarter of 2019, which was previously included in the Generics
segment results, and higher revenue from Rytary® and Unithroid®,
partially offset by lower revenue from Albenza® as a result of the
loss of exclusivity in September of 2018.
Specialty gross margin for the third quarter of 2019 was 35%
compared to 55% for the prior year period primarily due to product
sales mix. Specialty adjusted gross margin(1) for the third quarter
of 2019 was 74% compared to 79% for the prior year period primarily
due to the addition of lower margin Oxymorphone HCI as noted
above.
Specialty operating income for the third quarter of 2019 was $4
million compared to $23 million for the prior year period,
primarily due to higher cost of goods sold relating to Oxymorphone
HCI and cost of goods sold impairment charges. Specialty adjusted
operating income(1) for the third quarter of 2019 was $41 million
compared to $44 million for the prior year period primarily due to
the higher cost of goods sold.
Corporate and Other Information
(Unaudited; In thousands)
Three Months Ended September
30,
2019
2018
General and administrative expense
$
29,313
$
34,740
Acquisition, transaction-related and
integration expenses
174
2,231
Restructuring and other charges
6,022
756
Charges (gains) related to legal matters,
net
—
2,589
Total general, administrative and other
operating expenses
$
35,509
$
40,316
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
General and administrative expense
$
105,026
$
—
$
105,026
$
71,491
$
28,737
$
100,228
Acquisition, transaction-related and
integration expenses
2,891
—
2,891
102,251
10,925
113,176
Restructuring and other charges
12,341
—
12,341
18,003
5,123
23,126
Charges (gains) related to legal matters,
net
—
—
—
2,589
—
2,589
Total general, administrative and other
operating expenses
$
120,258
$
—
$
120,258
$
194,334
$
$
44,785
$
239,119
General and administrative and other operating expenses in the
third quarter of 2019 decreased to $36 million compared to $40
million in the prior year period. The decrease is primarily due to
synergies associated with the Combination with Impax and the Gemini
acquisition including lower acquisition, transaction-related and
integration expenses, partially offset by restructuring and other
charges relating to recent cost savings initiatives.
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, the costs incurred and
benefits realized of restructuring activities 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 and benefits,
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%
Approximately 43%
Adjusted R&D as a % of net revenue
9.5% - 10.5%
No change
Adjusted SG&A as a % of net
revenue
14% - 15%
No change
Adjusted EBITDA
$425 million - $475 million
Approximately $345 million
Adjusted diluted EPS
$0.52 - $0.62
Approximately $0.31
Adjusted effective tax rate
19% - 21%
No change
Capital expenditures
$65 million - $85 million
$55 million - $65 million
Weighted average diluted shares
outstanding
Approximately 300 million
No change
Conference Call Information
Amneal will hold a conference call on November 6, 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: the risk
that our goodwill may become impaired, which could adversely affect
our financial condition and results of operations, 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 owners.
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Operations
(Unaudited; In thousands,
except per share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net revenue
$
378,283
$
476,487
$
1,229,045
$
1,165,463
Cost of goods sold
267,717
268,567
873,841
634,653
Cost of goods sold impairment charges
56,132
7,815
112,441
7,815
Gross profit
54,434
200,105
242,763
522,995
Selling, general and administrative
63,797
75,486
215,514
156,610
Research and development
38,125
42,349
139,999
136,893
In-process research and development
impairment charges
23,382
650
46,169
650
Charges (gains) related to legal matters,
net
14,750
2,589
14,750
(411
)
Intellectual property legal development
expenses
2,586
4,401
9,263
13,024
Acquisition, transaction-related and
integration expenses
3,131
2,231
12,682
216,873
Restructuring and other charges
20,937
(2,156
)
29,933
42,309
Operating (loss) income
(112,274
)
74,555
(225,547
)
(42,953
)
Other income (expense):
Interest expense, net
(42,209
)
(43,018
)
(129,376
)
(100,691
)
Foreign exchange loss, net
(12,531
)
(5,137
)
(9,684
)
(22,518
)
Loss on extinguishment of debt
—
—
—
(19,667
)
(Loss) gain on sale of international
businesses, net
—
(2,812
)
6,930
(2,812
)
Gain from reduction of tax receivable
agreement liability
192,844
—
192,844
—
Other income (expense), net
446
(1,014
)
1,702
725
Total other income (expense),
net
138,550
(51,981
)
62,416
(144,963
)
Income (loss) before income taxes
26,276
22,574
(163,131
)
(187,916
)
Provision for (benefit from) income
taxes
389,668
5,109
375,539
(6,943
)
Net (loss) income
(363,392
)
17,465
(538,670
)
(180,973
)
Less: Net loss attributable to Amneal
Pharmaceuticals LLC pre-Combination
—
—
—
148,806
Less: Net loss (income) attributable to
non-controlling interests
98,386
(10,577
)
208,881
21,191
Net (loss) income attributable to Amneal
Pharmaceuticals, Inc. before accretion of redeemable
non-controlling interest
(265,006
)
6,888
(329,789
)
(10,976
)
Accretion of redeemable non-controlling
interest
—
64
—
(1,176
)
Net (loss) income attributable to
Amneal Pharmaceuticals, Inc.
$
(265,006
)
$
6,952
$
(329,789
)
$
(12,152
)
Net (loss) income per share
attributable to Amneal Pharmaceuticals, Inc.'s common
stockholders:
Class A and Class B-1 basic
$
(2.03
)
$
0.05
$
(2.56
)
$
(0.10
)
Class A and Class B-1 diluted
$
(2.03
)
$
0.05
$
(2.56
)
$
(0.10
)
Weighted-average common shares
outstanding:
Class A and Class B-1 basic
130,729
127,247
128,822
127,196
Class A and Class B-1 diluted
130,729
128,222
128,822
127,196
Amneal Pharmaceuticals,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited; In
thousands)
September 30, 2019
December 31, 2018
Assets
Current assets:
Cash and cash equivalents
$
212,738
$
213,394
Restricted cash
4,320
5,385
Trade accounts receivable, net
518,109
481,495
Inventories
401,827
457,219
Prepaid expenses and other current
assets
66,699
128,321
Related party receivables
2,138
830
Total current assets
1,205,831
1,286,644
Property, plant and equipment, net
490,712
544,146
Goodwill
419,671
426,226
Intangible assets, net
1,435,801
1,654,969
Deferred tax asset, net
—
373,159
Operating lease right-of-use assets
56,455
—
Operating lease right-of-use assets -
related party
14,930
—
Financing lease right-of-use assets -
related party
61,936
—
Other assets
18,607
67,592
Total assets
$
3,703,943
$
4,352,736
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
495,857
$
514,440
Current portion of long-term debt, net
21,468
21,449
Current portion of operating lease
liabilities
13,467
—
Current portion of operating and financing
lease liabilities - related party
3,353
—
Related party payables
765
17,695
Current portion of financing obligation -
related party
—
266
Total current liabilities
534,910
553,850
Long-term debt, net
2,614,412
2,630,598
Deferred income taxes
—
1,178
Liabilities under tax receivable
agreement
—
192,884
Operating lease liabilities
44,375
—
Operating lease liabilities - related
party
14,271
—
Financing lease liabilities - related
party
61,719
—
Financing obligation - related party
—
39,083
Other liabilities
38,532
38,780
Total long-term liabilities
2,773,309
2,902,523
Total stockholders' equity
395,724
896,363
Total liabilities and stockholders'
equity
$
3,703,943
$
4,352,736
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited; In
thousands)
Nine Months Ended September
30,
2019
2018
Cash flows from operating
activities:
Net loss
$
(538,670
)
$
(180,973
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain from reduction of tax receivable
agreement liability
(192,884
)
—
Depreciation and amortization
152,932
89,910
Amortization of Levothyroxine Transition
Agreement asset
36,393
—
Unrealized foreign currency loss
10,552
21,560
Amortization of debt issuance costs
4,849
4,220
Loss on extinguishment of debt
—
19,667
(Gain) loss on sale of international
businesses, net
(6,930
)
2,812
Intangible asset impairment charges
158,610
8,474
Non-cash restructuring and asset-related
charges
11,923
—
Deferred tax provision (benefit)
371,683
(9,111
)
Stock-based compensation and PPU
expense
16,666
163,991
Inventory provision
67,844
20,755
Other operating charges and credits,
net
5,945
(1,955
)
Changes in assets and liabilities:
Trade accounts receivable, net
(46,457
)
(74,711
)
Inventories
(25,906
)
(53,708
)
Prepaid expenses, other current assets and
other assets
41,256
9,803
Related party receivables
(1,305
)
10,828
Accounts payable, accrued expenses and
other liabilities
(13,932
)
(26,858
)
Related party payables
25
(14,125
)
Net cash provided by (used in) operating
activities
52,594
(9,421
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(42,664
)
(63,065
)
Acquisition of product rights and
licenses
(50,000
)
(14,000
)
Acquisitions, net of cash acquired
—
(324,634
)
Proceeds from surrender of corporate owned
life insurance
43,017
—
Proceeds from sale of international
businesses, net of cash sold
34,834
—
Net cash used in investing activities
(14,813
)
(401,699
)
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
(20,250
)
(610,482
)
Net borrowings on revolving credit
line
—
25,000
Proceeds from exercise of stock
options
1,385
3,162
Employee payroll tax withholding on
restricted stock unit vesting
(926
)
—
Equity contributions
—
27,742
Capital contribution from non-controlling
interest
—
360
Acquisition of non-controlling
interest
(3,543
)
(11,775
)
Tax distribution to non-controlling
interest
(13,494
)
—
Distributions to members
—
(182,998
)
Payments of principal on financing lease -
related party
(1,707
)
—
Repayment of related party note
—
(14,842
)
Net cash (used in) provided by financing
activities
(38,535
)
506,595
Effect of foreign exchange rate on
cash
(967
)
(1,204
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(1,721
)
94,271
Cash, cash equivalents, and restricted
cash - beginning of period
218,779
77,922
Cash, cash equivalents, and restricted
cash - end of period
$
217,058
$
172,193
Cash and cash equivalents - end of
period
$
212,738
$
165,192
Restricted cash - end of period
4,320
7,001
Cash, cash equivalents, and restricted
cash - end of period
$
217,058
$
172,193
Amneal Pharmaceuticals,
Inc.
Reconciliation of Non-GAAP
Combined Results of Operations
(Unaudited; In
thousands)
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non- GAAP)
Add:
(Non- GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net revenue:
Generics
$
1,008,562
$
—
$
1,008,562
$
1,028,134
$
102,237
$
1,130,371
Specialty
220,483
—
220,483
137,329
96,245
233,574
Total net revenue
1,229,045
—
1,229,045
1,165,463
198,482
1,363,945
Cost of goods sold
873,841
—
873,841
634,653
149,492
784,145
Cost of goods sold impairment charges
112,441
—
112,441
7,815
—
7,815
Gross profit
242,763
—
242,763
522,995
48,990
571,985
Selling, general and administrative
215,514
—
215,514
156,610
64,013
220,623
Research and development
139,999
—
139,999
136,893
17,287
154,180
In-process research and development
impairment charges
46,169
—
46,169
650
—
650
Acquisition, transaction-related and
integration expenses
12,682
—
12,682
216,873
10,925
227,798
Charges (gains) related to legal matters,
net
14,750
14,750
(411
)
90,099
89,688
Restructuring and other charges
29,933
—
29,933
42,309
5,123
47,432
Intellectual property legal development
expenses
9,263
—
9,263
13,024
23
13,047
Operating loss
(225,547
)
—
(225,547
)
(42,953
)
(138,480
)
(181,433
)
Other income (expense):
Interest expense, net
(129,376
)
—
(129,376
)
(100,691
)
(18,231
)
(118,922
)
Foreign exchange (loss) gain, net
(9,684
)
—
(9,684
)
(22,518
)
921
(21,597
)
Loss on extinguishment of debt
—
—
—
(19,667
)
—
(19,667
)
Gain (loss) on sale of international
businesses
6,930
—
6,930
(2,812
)
—
(2,812
)
Gain from reduction of tax receivable
agreement liability
192,844
—
192,844
—
—
—
Other income (expense)
1,702
—
1,702
725
(638
)
87
Total other income (expense),
net
62,416
—
62,416
(144,963
)
(17,948
)
(162,911
)
Loss before income taxes
(163,131
)
—
(163,131
)
(187,916
)
(156,428
)
(344,344
)
Provision for (benefit from) income
taxes
375,539
—
375,539
(6,943
)
(6,273
)
(13,216
)
Net loss
(538,670
)
—
(538,670
)
(180,973
)
$
(150,155
)
$
(331,128
)
Less: Net loss attributable to Amneal
Pharmaceuticals LLC pre-Combination
—
—
—
148,806
Less: Net loss attributable to
non-controlling interests
208,881
—
208,881
21,191
Accretion of redeemable non-controlling
interest
—
—
—
(1,176
)
Net loss attributable to Amneal
Pharmaceuticals, Inc.
$
(329,789
)
$
—
$
(329,789
)
$
(12,152
)
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Cost of
Goods Sold to Adjusted Cost of Goods Sold
Generics
Three Months Ended September
30,
2019
2018
Cost of goods sold
$
217,773
$
230,051
Cost of goods sold impairment
charges
49,115
7,815
Adjusted to deduct (add):
Amortization
10,912
6,107
Inventory related charges (5)
(2,038
)
11,426
Acquisition and site closure expenses
(6)
3,956
15,235
Asset impairment charges (7)
49,115
7,891
Stock-based compensation expense
711
400
Adjusted cost of goods sold
(Non-GAAP)
$
204,232
$
196,807
Generics
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non- GAAP)
Add:
(Non- GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
760,074
$
—
$
760,074
$
572,179
$
122,761
$
694,940
Cost of goods sold impairment
charges
105,424
—
105,424
7,815
—
7,815
Adjusted to deduct (add):
Amortization
36,300
—
36,300
13,910
13,823
27,733
Inventory related charges (5)
19,739
—
19,739
41,995
9,894
51,889
Acquisition and site closure expenses
(6)
20,436
—
20,436
15,235
—
15,235
Asset impairment charges (7)
105,424
—
105,424
7,891
53
7,944
Stock-based compensation expense
2,120
—
2,120
400
—
400
Amortization of upfront payment (9)
36,393
—
36,393
—
—
—
Other
1,024
—
1,024
—
—
—
Adjusted cost of goods sold
(Non-GAAP)
$
644,062
$
—
$
644,062
$
500,563
$
98,991
$
599,554
Specialty
Three Months Ended September
30,
2019
2018
Cost of goods sold
$
49,944
$
38,516
Cost of goods sold impairment
charges
7,017
—
Adjusted to deduct:
Amortization
27,103
19,548
Asset impairment charges (7)
7,017
—
Inventory related charges (5)
—
960
Adjusted cost of goods sold
(Non-GAAP)
$
22,841
$
18,008
Specialty
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non- GAAP)
Add:
(Non GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Cost of goods sold
$
113,767
$
—
$
113,767
$
62,474
$
26,731
$
89,205
Cost of goods sold impairment
charges
7,017
—
7,017
—
—
—
Adjusted to deduct:
Amortization
67,474
—
67,474
30,199
6,112
36,311
Asset impairment charges (7)
7,017
—
7,017
—
—
—
Inventory related charges (5)
—
—
—
2,910
—
2,910
Adjusted cost of goods sold
(Non-GAAP)
$
46,293
$
—
$
46,293
$
29,365
$
20,619
$
49,984
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Generics
Operating (Loss) Income to Adjusted Operating Income
Generics
Three Months Ended September
30,
2019
2018
Operating (loss) income
$
(80,361
)
$
92,238
Adjusted to add (deduct):
Acquisition and site closure expenses
(6)
5,941
15,235
Amortization
10,912
6,107
Inventory related charges (5)
(2,038
)
11,426
Stock-based compensation expense
3,982
1,201
Asset impairment charges (7)
72,530
8,541
Restructuring and other charges (8)
14,702
(2,885
)
Charges (gains) related to legal matters
(10)
15,000
—
Other
(975
)
(414
)
Adjusted operating income
(Non-GAAP)
$
39,693
$
131,449
Generics
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non- GAAP)
Add:
(Non- GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating (loss) income
$
(130,058
)
$
—
$
(130,058
)
$
119,831
$
(130,663
)
$
(10,832
)
Adjusted to add (deduct):
Acquisition and site closure expenses
(6)
35,611
—
35,611
129,857
—
129,857
Amortization
36,300
—
36,300
13,910
13,823
27,733
Inventory related charges (5)
19,739
—
19,739
41,995
9,894
51,889
Stock-based compensation expense
9,355
—
9,355
1,422
982
2,404
Asset impairment charges (7)
151,741
151,741
8,541
53
8,594
Restructuring and other charges (8)
17,201
—
17,201
21,912
—
21,912
Charges related to legal matters, net
(10)
15,000
—
15,000
—
89,159
89,159
Amortization of upfront payment (9)
36,393
—
36,393
—
—
—
R&D milestone payment
9,929
—
9,929
2,700
—
2,700
Other
49
—
49
(594
)
—
(594
)
Adjusted operating income
(Non-GAAP)
$
201,260
$
—
$
201,260
$
339,574
$
(16,752
)
$
322,822
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Reconciliations of Specialty
Operating Income to Adjusted Operating Income
Specialty
Three Months Ended September
30,
2019
2018
Operating income
$
3,596
$
22,633
Adjusted to add:
Amortization
27,103
19,548
Inventory related charges (5)
—
960
Acquisition and site closure expenses
(6)
2,522
—
Stock-based compensation expense
456
—
Restructuring and other charges (8)
213
(26
)
Asset impairment charges (7)
7,017
—
Other
—
474
Adjusted operating income
(Non-GAAP)
$
40,907
$
43,589
Specialty
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non-GAAP)
Add:
(Non- GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Operating income
$
24,769
$
—
$
24,769
$
31,550
$
36,968
$
68,518
Adjusted to add:
Amortization
67,474
—
67,474
30,199
6,112
36,311
Inventory related charges (5)
—
—
—
2,910
—
2,910
Acquisition and site closure expenses
(6)
8,328
—
8,328
—
—
—
Stock-based compensation expense
966
—
966
—
1,124
1,124
Restructuring and other charges (8)
391
—
391
2,395
—
2,395
Charges related to legal matters, net
—
—
—
—
940
940
Asset impairment charges (7)
7,017
—
7,017
—
—
—
Other
—
—
—
474
—
474
Adjusted operating income
(Non-GAAP)
$
108,945
$
—
$
108,945
$
67,528
$
45,144
$
112,672
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In thousands,
except per share amounts)
Reconciliation of Net (Loss)
Income to Adjusted Net Income and Calculation of Adjusted Diluted
EPS
Three months ended September
30,
2019
2018
Net (loss) income
$
(363,392
)
$
17,465
Adjusted to add (deduct):
Non-cash interest
1,631
1,452
GAAP Income tax expense
389,668
5,109
Gain from reduction of tax receivable
agreement liability (4)
(192,844
)
—
Amortization
38,015
25,655
Stock-based compensation expense
6,095
3,590
Acquisition and site closure expenses
(6)
11,230
20,816
Restructuring and other charges (8)
20,937
(2,156
)
Inventory related charges (5)
(2,038
)
12,386
Charges related to legal matters, net
(10)
15,000
2,589
Asset impairment charges (7)
79,547
8,541
Foreign exchange loss
12,531
5,137
Loss on sale of international business
(11)
—
2,812
Other
(1,387
)
597
Income tax at 21%
(3,149
)
(21,839
)
Net income attributable to NCI not
associated with our Class B shares
(91
)
(53
)
Adjusted net income (Non-GAAP)
$
11,753
$
82,101
Adjusted diluted EPS (Non-GAAP)
(12)
$
0.04
$
0.27
(12)
For the three months ended September 30,
2019, utilizes weighted average diluted shares outstanding of
299,106, which consists of Class A shares and Class B shares under
the if-converted method. For the three months ended September 30,
2018, utilizes weighted average diluted shares outstanding of
299,483, which consists of Class A shares and Class B shares under
the if-converted method.
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
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non-GAAP)
Add:
(Non-GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(538,670
)
$
—
$
(538,670
)
$
(180,973
)
$
(150,155
)
$
(331,128
)
Adjusted to add (deduct):
Non-cash interest
4,849
—
4,849
7,029
9,413
16,442
Gain from reduction of tax receivable
agreement liability (4)
(192,844
)
—
(192,844
)
—
—
—
GAAP Income tax expense (benefit)
375,539
—
375,539
(6,943
)
(6,273
)
(13,216
)
Amortization
103,774
—
103,774
44,109
19,935
64,044
Stock-based compensation expense
16,666
—
16,666
5,234
4,816
10,050
Acquisition and site closure expenses
(6)
58,488
—
58,488
235,458
10,925
246,383
Restructuring and other charges (8)
29,933
—
29,933
42,309
5,123
47,432
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges (5)
19,739
—
19,739
44,905
9,894
54,799
Charges related to legal matters, net
(10)
15,000
—
15,000
2,589
90,099
92,688
Asset impairment charges (7)
160,555
—
160,555
8,541
53
8,594
Amortization of upfront payment
36,393
—
36,393
—
—
—
Foreign exchange loss (gain)
9,684
—
9,684
22,518
(921
)
21,597
(Gain) loss on sale of international
businesses, net (11)
(6,930
)
—
(6,930
)
2,812
—
2,812
R&D milestone payments
9,929
—
9,929
2,700
—
2,700
Other
196
—
196
655
1,953
2,608
Income tax at 21%
(21,483
)
—
(21,483
)
(52,859
)
1,309
(51,550
)
Net income attributable to NCI not
associated with our Class B shares
(231
)
—
(231
)
(197
)
—
(197
)
Adjusted net income (Non-GAAP)
$
80,587
$
—
$
80,587
$
197,554
$
(3,829
)
$
193,725
Adjusted diluted EPS (Non-GAAP)
(13)
$
0.27
$
0.65
(13)
For the nine months ended September 30,
2019, utilizes weighted average diluted shares outstanding of
299,125, which consists of Class A shares and Class B shares under
the if-converted method. For the nine months ended September 30,
2018, utilizes weighted average diluted shares outstanding of
299,156, which consists of Class A and Class B shares under the
if-converted method.
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited, In
thousands)
Reconciliations of Net (Loss)
Income to EBITDA and Adjusted EBITDA
Three Months Ended September
30,
2019
2018
Net (loss) income
$
(363,392
)
$
17,465
Adjusted to add (deduct):
Interest expense, net
42,209
43,018
Income tax expense
389,668
5,109
Depreciation and amortization
53,358
43,013
EBITDA (Non-GAAP)
$
121,843
$
108,605
Adjusted to add (deduct):
Gain from reduction of tax receivable
agreement liability (4)
$
(192,844
)
$
—
Stock-based compensation expense
6,095
3,590
Acquisition and site closure expenses
(6)
11,230
20,816
Restructuring and other charges (8)
20,937
(2,156
)
Inventory related charges (5)
(2,038
)
12,386
Charges related to legal matters, net
(10)
15,000
2,589
Asset impairment charges (7)
79,547
8,541
Foreign exchange loss
12,531
5,137
Loss on sale of international businesses
(11)
—
2,812
Other
(1,387
)
597
Adjusted EBITDA (Non-GAAP)
$
70,914
$
162,917
Nine Months Ended September
30, 2019
Nine Months Ended September
30, 2018
Add:
(Non- GAAP)
Add:
(Non- GAAP)
Actual
Impax/ Gemini
Combined
Actual
Impax/ Gemini
Combined
Net loss
$
(538,670
)
$
—
$
(538,670
)
$
(180,973
)
$
(150,155
)
$
(331,128
)
Adjusted to add (deduct):
Interest expense, net
129,376
—
129,376
100,691
18,231
118,922
Income tax expense (benefit)
375,539
—
375,539
(6,943
)
(6,273
)
(13,216
)
Depreciation and amortization
152,932
—
152,932
89,911
24,900
114,811
EBITDA (Non-GAAP)
$
119,177
$
—
$
119,177
$
2,686
$
(113,297
)
$
(110,611
)
Adjusted to add (deduct):
Gain from reduction of tax receivable
agreement liability (4)
$
(192,844
)
$
—
$
(192,844
)
$
—
$
—
$
—
Stock-based compensation expense
16,666
—
16,666
5,234
4,816
10,050
Acquisition and site closure expenses
(6)
58,488
—
58,488
235,458
10,925
246,383
Restructuring and other charges (8)
29,933
—
29,933
42,309
5,123
47,432
Loss on extinguishment of debt
—
—
—
19,667
—
19,667
Inventory related charges (5)
19,739
—
19,739
44,905
9,894
54,799
Charges related to legal matters, net
(10)
15,000
—
15,000
2,589
90,099
92,688
Asset impairment charges (7)
160,555
—
160,555
8,541
53
8,594
Amortization of upfront payment (9)
36,393
—
36,393
—
—
—
Foreign exchange loss (gain)
9,684
—
9,684
22,518
(921
)
21,597
(Gain) loss on sale of international
businesses, net (11)
(6,930
)
—
(6,930
)
2,812
—
2,812
R&D milestone payments
9,929
—
9,929
2,700
—
2,700
Other
(828
)
—
(828
)
655
653
1,308
Adjusted EBITDA (Non-GAAP)
$
274,962
$
—
$
274,962
$
390,074
$
7,345
$
397,419
Amneal Pharmaceuticals, Inc. Non-GAAP
Reconciliations (Unaudited; In thousands)
(4)
Gain from reduction of tax receivable
agreement liability represents the reversal of the accrued
liability associated with the Company’s deferred tax assets created
at the Combination.
(5)
For the three and nine months ended
September 30, 2019, inventory related charges primarily represent
inventory obsolescence resulting from new initiatives and policies
adopted with our restructuring efforts. For the three and nine
months ended September 30, 2018, inventory related charges also
include a reserve for an unfavorable supply arrangement and the
amortization of the Impax inventory step-up to fair value in
purchase accounting.
(6)
Acquisition and site closure expenses for
the three and nine months ended September 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 nine months ended
September 30, 2018, acquisition and site closure expenses also
includes costs associated with the Impax sale of its Middlesex, NJ
and Taiwan facilities.
(7)
Asset impairment charges for the three and
nine months ended September 30, 2019 are primarily associated with
the write-off of in process research and development and intangible
asset impairment charges primarily related to products acquired in
the Impax combination.
(8)
For the three and nine months ended
September 30, 2019, restructuring and other charges are primarily
associated with cash severance provided pursuant to our severance
programs for employees at our Hauppauge, NY, Hayward, CA and other
facilities as well as asset-related charges associated with the
impairment of property, plant and equipment and the right of use
asset associated with our Hauppauge, NY facility. For the three and
nine months ended September 30, 2018, restructuring and other
charges includes employee separation costs associated with the
consolidation of sites due to the Combination of Amneal and Impax,
as well as the write-off of property, plant, and equipment at those
sites.
(9)
Amortization of upfront payment represents
the amortization of the upfront payment made to Lannett in
connection with our Transition Agreement with Levothyroxine.
(10)
For the three and nine months ended
September 30, 2019, charges related to legal matters, net are
primarily associated with an agreement in principle with Teva
Pharmaceuticals, Inc. regarding a matter associated with Impax
prior to the Combination (Teva vs Impax, LLC). Charges related to
legal matters, net for the nine months ended September 30, 2018
relate to an Impax litigation settlement charge and a settlement
for claims with the plaintiffs in the class action antitrust suits
related to Solodyn®.
(11)
For the nine months ended
September 30, 2019 gain/loss on the sale of international business,
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/20191106005342/en/
Mark Donohue (908) 409-6718
Amneal Pharmaceuticals (NYSE:AMRX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amneal Pharmaceuticals (NYSE:AMRX)
Historical Stock Chart
From Sep 2023 to Sep 2024