TREVOSE, Pa., Feb. 3, 2022 /PRNewswire/ -- Lannett
Company, Inc. (NYSE: LCI) today reported financial results for its
fiscal 2022 second quarter ended December
31, 2021.
"For the quarter, ongoing and increasing competitive pricing
pressure across our product offering negatively impacted net sales
and gross margin," said Tim Crew,
chief executive officer of Lannett. "While we anticipate this
pricing environment to persist over the near term, we continue to
execute on our core strategies to build our product pipeline,
advance our durable insulin and respiratory assets and reduce costs
throughout the organization. We also continue to maintain a solid
cash position, which was more than $98
million at December 31,
2021.
"Last month, the FDA completed its safety review of the
Investigational New Drug (IND) application for our biosimilar
insulin glargine and concluded that we may proceed with the
proposed clinical investigation. We expect the pivotal clinical
trial to commence next month and be completed by early next year.
If the trial is successful, we would anticipate filing the
Biologics License Application (BLA) shortly thereafter and
potentially launching the product by early 2024, if approved by the
FDA. Regarding the pending Abbreviated New Drug Application (ANDA)
for our generic Advair Diskus® product, we expect to receive
feedback from the FDA later this month.
"Looking ahead, we have revised our guidance down to
reflect, in part, a targeted product optimization effort, a delay
in the expected launch of a key product, fewer new supply requests
anticipated for the balance of this year, as well as the previously
mentioned competitive environment for a number of our oral generic
products."
Restructuring, Cost Reduction Initiatives -
Update
In November 2021, the company
announced a restructuring plan to further optimize operations,
improve efficiencies and reduce costs to improve competitiveness.
The plan is expected to be largely completed by the end of the
current fiscal year and generate approximately $20 million of cost savings annually. Thus far,
the company has completed the restructuring of its R&D function
and targeted headcount reductions.
Second Quarter Financial Results: Fiscal 2022 vs Fiscal
2021
GAAP basis:
- Net sales were $86.5 million
compared with $133.9 million
- Gross profit was $5.7 million, or
7% of net sales. This compares with $0.8
million, or 1% of net sales, which included a $23.2 million inventory write down and
$5.0 million to expense the cost to
renew a product distribution contract
- Asset impairment charges primarily related to the November 2021 Restructuring Plan and ongoing
competitive pressure were $49.4
million. Asset impairment charges were $198.0 million in last year's second quarter
- Net loss was $81.1 million, or
$2.01 per share, compared with
$171.9 million, or $4.36 per share
Non-GAAP basis:
- Net sales were $86.5 million
compared with $133.9 million
- Adjusted gross profit was $9.7
million, or 11% of net sales, compared with $31.1 million, or 23% of net sales
- Adjusted interest expense increased to $12.9 million from $10.5
million
- Adjusted net loss was $15.9
million, or $0.39 per share,
versus adjusted net income of $3.2
million, or $0.08 per diluted
share
- Negative adjusted EBITDA was $1.0
million versus adjusted EBITDA of $24.0 million
Guidance for Fiscal 2022
Based on its current outlook,
the company revised guidance for fiscal year 2022, as follows:
|
GAAP
|
Adjusted*
|
Net sales
|
$335 million to $360
million, down from $370 million to $400 million
|
$335 million to $360
million, down from $370 million to $400 million
|
Gross margin
%
|
Approximately 10% to
11%, down from approximately 15% to 17%
|
Approximately 14% to
15%, down from approximately 19% to 21%
|
R&D
expense
|
$23 million to $26
million, down from $25 million to $28 million
|
$23 million to $26
million, down from $25 million to $28 million
|
SG&A
expense
|
$66.5 million to $69.5
million, up from $64 million to $67 million
|
$55 million to $58
million, unchanged
|
Restructuring
expense
|
$3 million to $4
million
|
$--
|
Asset
impairment
|
$49.4
million
|
$--
|
Interest and
other
|
Approximately $58
million, unchanged
|
Approximately $52
million, unchanged
|
Effective tax
rate
|
Approximately 0% to 5%,
unchanged
|
Approximately 23% to
24%, up from 22% to 23%
|
Adjusted
EBITDA
|
N/A
|
$0 to $8 million, down
from $22 million to $32 million
|
Capital
expenditures
|
$10 million to $14
million, unchanged
|
$10 million to $14
million, unchanged
|
*A reconciliation of Adjusted amounts to most directly
comparable GAAP amounts can be found in the attached financial
tables.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference
call at 4:30 p.m. ET to review its
results of operations for its fiscal 2022 second quarter ended
December 31, 2021. The conference
call will be available to interested parties by dialing
888-771-4371 from the U.S. or Canada, or 847-585-4405 from
international locations, passcode 50278391. The call will be
broadcast via the Internet at www.lannett.com. Listeners are
encouraged to visit the website at least 10 minutes prior to the
start of the scheduled presentation to register, download and
install any necessary audio software. A playback of the call will
be archived and accessible on the same website for at least three
months.
Discussion during the conference call may include
forward-looking statements regarding such topics as, but not
limited to, the company's financial status and performance,
regulatory and operational developments, and any comments the
company may make about its future plans or prospects in response to
questions from participants on the conference call.
Use of Non-GAAP Financial Measures
This news release
contains references to Non-GAAP financial measures, including
Adjusted EBITDA, which are financial measures that are not prepared
in conformity with United States
generally accepted accounting principles (U.S. GAAP). Management
uses these measures internally for evaluating its operating
performance. The Company's management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor's overall understanding of the
financial results for the Company's core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company's core business between current, past and future
periods. The Company also believes that including Adjusted EBITDA
is appropriate to provide additional information to investors.
Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S.
GAAP.
Detailed reconciliations of non-GAAP financial measures to the
most directly comparable GAAP financial measures are included with
this release.
Non-GAAP financial measures exclude, among others, the effects
of (1) amortization of purchased intangibles and other purchase
accounting entries, (2) restructuring expenses, (3) asset
impairment charges, (4) non-cash interest expense, as well as (5)
certain other items considered unusual or non-recurring in
nature.
ADVAIR DISKUS® is a registered trademark of GlaxoSmithKline.
About Lannett Company, Inc.:
Lannett Company, founded
in 1942, develops, manufactures, packages, markets and distributes
generic pharmaceutical products for a wide range of medical
indications – see financial schedule below for net sales by medical
indication. For more information, visit the company's website at
www.lannett.com.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Any such statements, including, but not limited
to, the timing related to commencing and successfully completing
the pivotal clinical trial, filing the Biologics License
Application and successfully launching biosimilar insulin glargine;
timing related to receiving FDA approval and successfully launching
generic Advair Diskus; the potential material impact of COVID-19 on
future financial results; successfully reducing expenses as a
result of the restructuring and achieving the financial
metrics stated in the company's revised guidance for fiscal 2022,
whether expressed or implied, are subject to risks and
uncertainties which can cause actual results to differ materially
from those currently anticipated due to a number of factors which
include, but are not limited to, the difficulty in predicting the
timing or outcome of FDA or other regulatory approvals or actions,
the ability to successfully commercialize products upon approval,
including acquired products, and Lannett's estimated or anticipated
future financial results, future inventory levels, future
competition or pricing, future levels of operating expenses,
product development efforts or performance, and other risk factors
discussed in the company's Form 10-K and other documents filed with
the Securities and Exchange Commission from time to time.
These forward-looking statements represent the company's judgment
as of the date of this news release. The company disclaims
any intent or obligation to update these forward-looking
statements.
Contact:
|
Robert Jaffe
|
|
Robert Jaffe Co.,
LLC
|
|
(424)
288-4098
|
FINANCIAL SCHEDULES FOLLOW
LANNETT COMPANY,
INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands, except
share and per share data)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
December 31,
2021
|
|
June 30,
2021
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
98,635
|
|
$
93,286
|
Accounts receivable,
net
|
66,275
|
|
98,834
|
Inventories
|
|
105,779
|
|
109,545
|
Income taxes
receivable
|
35,847
|
|
35,050
|
Assets held for
sale
|
|
12,733
|
|
2,678
|
Other current
assets
|
|
15,345
|
|
14,170
|
Total current
assets
|
334,614
|
|
353,563
|
Property, plant and
equipment, net
|
143,104
|
|
166,674
|
Intangible assets,
net
|
|
90,972
|
|
137,835
|
Operating lease
right-of-use asset
|
10,227
|
|
10,559
|
Other
assets
|
|
16,020
|
|
15,106
|
TOTAL
ASSETS
|
|
$
594,937
|
|
$
683,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
25,988
|
|
$
29,585
|
Accrued
expenses
|
|
11,206
|
|
13,077
|
Accrued payroll and
payroll-related expenses
|
9,606
|
|
10,680
|
Rebates
payable
|
|
25,205
|
|
19,025
|
Royalties
payable
|
|
10,687
|
|
13,779
|
Restructuring
liability
|
|
620
|
|
8
|
Current operating lease
liabilities
|
2,054
|
|
2,045
|
Other current
liabilities
|
3,885
|
|
2,270
|
Total current
liabilities
|
89,251
|
|
90,469
|
Long-term debt,
net
|
|
603,484
|
|
590,683
|
Long-term operating
lease liabilities
|
10,554
|
|
11,047
|
Other
liabilities
|
|
17,808
|
|
19,009
|
TOTAL
LIABILITIES
|
|
721,097
|
|
711,208
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
Common
stock($0.001 par value, 100,000,000 shares authorized;
42,053,623 and 40,913,148 shares issued;
|
|
|
|
40,500,320 and
39,576,606 shares outstanding at December 31, 2021 and June 30,
2021, respectively)
|
42
|
|
41
|
Additional paid-in
capital
|
360,765
|
|
355,239
|
Accumulated
deficit
|
|
(468,193)
|
|
(364,766)
|
Accumulated other
comprehensive loss
|
(519)
|
|
(548)
|
Treasury stock
(1,553,303 and 1,336,542 shares at December 31, 2021 and June 30,
2021, respectively)
|
(18,255)
|
|
(17,437)
|
Total stockholders'
deficit
|
(126,160)
|
|
(27,471)
|
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
$
594,937
|
|
$
683,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
86,508
|
|
$
133,920
|
|
$
188,033
|
|
$
260,399
|
|
Cost of
sales
|
|
76,990
|
|
124,488
|
|
157,998
|
|
216,675
|
|
Amortization of
intangibles
|
|
3,808
|
|
8,657
|
|
7,804
|
|
17,246
|
|
Gross
profit
|
|
5,710
|
|
775
|
|
22,231
|
|
26,478
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
4,747
|
|
5,644
|
|
10,511
|
|
12,183
|
|
Selling, general and
administrative expenses
|
|
18,791
|
|
13,730
|
|
37,696
|
|
28,866
|
|
Restructuring
expenses
|
|
891
|
|
-
|
|
891
|
|
4,043
|
|
Asset impairment
charges
|
|
49,361
|
|
198,000
|
|
49,361
|
|
198,000
|
|
Total operating
expenses
|
|
73,790
|
|
217,374
|
|
98,459
|
|
243,092
|
|
Operating
loss
|
|
(68,080)
|
|
(216,599)
|
|
(76,228)
|
|
(216,614)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Investment
income
|
|
46
|
|
43
|
|
80
|
|
88
|
|
Interest
expense
|
|
(14,430)
|
|
(13,496)
|
|
(28,654)
|
|
(27,982)
|
|
Other
|
|
11
|
|
28
|
|
(51)
|
|
5
|
|
Total other
expense
|
|
(14,373)
|
|
(13,425)
|
|
(28,625)
|
|
(27,889)
|
|
Loss before income
tax
|
|
(82,453)
|
|
(230,024)
|
|
(104,853)
|
|
(244,503)
|
|
Income tax
benefit
|
|
(1,368)
|
|
(58,076)
|
|
(1,426)
|
|
(66,056)
|
|
Net
loss
|
|
$
(81,085)
|
|
$
(171,948)
|
|
$
(103,427)
|
|
$
(178,447)
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share (1):
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(2.01)
|
|
$
(4.36)
|
|
$
(2.58)
|
|
$
(4.55)
|
|
Diluted
|
|
$
(2.01)
|
|
$
(4.36)
|
|
$
(2.58)
|
|
$
(4.55)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (1):
|
|
|
|
|
|
|
|
|
|
Basic
|
|
40,358,127
|
|
39,443,441
|
|
40,142,974
|
|
39,257,211
|
|
Diluted
|
|
40,358,127
|
|
39,443,441
|
|
40,142,974
|
|
39,257,211
|
|
|
|
|
|
|
|
|
|
|
|
(1) Effective with the
Warrants issued on April 22, 2021, the basic and diluted earnings
per share was calculated based on the two-class method.
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(UNAUDITED)
|
(In thousands, except
percentages, share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2021
|
|
Net sales
|
Cost of
sales
|
Amortization
of intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Asset
impairment
charges
|
Operating
loss
|
Other
expense
|
Loss before
income tax
|
Income tax
benefit
|
Net
loss
|
Diluted loss
per share (j)
|
|
|
|
GAAP
Reported
|
$
188,033
|
$
157,998
|
$
7,804
|
$
22,231
|
12%
|
$
10,511
|
$
37,696
|
$
891
|
$
49,361
|
$
(76,228)
|
$
(28,625)
|
$
(104,853)
|
$
(1,426)
|
$
(103,427)
|
$
(2.58)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(7,804)
|
7,804
|
|
-
|
-
|
-
|
-
|
7,804
|
-
|
7,804
|
-
|
7,804
|
|
Cody API business
(b)
|
-
|
(50)
|
-
|
50
|
|
(6)
|
(270)
|
-
|
-
|
326
|
-
|
326
|
-
|
326
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(2,102)
|
-
|
-
|
2,102
|
-
|
2,102
|
-
|
2,102
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(891)
|
-
|
891
|
-
|
891
|
-
|
891
|
|
Distribution
agreement renewal costs (e)
|
-
|
-
|
-
|
-
|
|
-
|
(219)
|
-
|
-
|
219
|
-
|
219
|
-
|
219
|
|
Asset impairment
charges (f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(49,361)
|
49,361
|
-
|
49,361
|
-
|
49,361
|
|
Non-cash interest
(g)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
2,959
|
2,959
|
-
|
2,959
|
|
Other (h)
|
-
|
(177)
|
-
|
177
|
|
(1)
|
(5,944)
|
-
|
-
|
6,122
|
-
|
6,122
|
-
|
6,122
|
|
Tax adjustments
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,162)
|
7,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
188,033
|
$
157,771
|
$
-
|
$
30,262
|
16%
|
$
10,504
|
$
29,161
|
$
-
|
$
-
|
$
(9,403)
|
$
(25,666)
|
$
(35,069)
|
$
(8,588)
|
$
(26,481)
|
$
(0.66)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
|
(b)
|
To exclude the
operating results of the ceased Cody API business
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
To exclude depreciation
on previously capitalized software integration costs associated
with the KUPI acquisition
|
|
|
|
|
|
|
|
|
(d)
|
To exclude expenses
associated with the 2021 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
|
|
|
|
(f)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at Silarx
in Carmel, NY
|
|
|
|
|
|
(g)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
(h)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement, one-time employee retention awards and separation costs
related to the Company's former Chief Information
Officer
|
|
|
(i)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
|
|
(j)
|
The weighted average
share number for the six months ended December 31, 2021 is
40,142,974 for GAAP and non-GAAP loss per share
calculations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(UNAUDITED)
|
(In thousands, except
percentages, share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2020
|
|
Net sales
|
Cost of
sales
|
Amortization
of intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Asset
impairment
charges
|
Operating
income
(loss)
|
Other loss
|
Income
(loss) before
income tax
|
Income tax
expense
(benefit)
|
Net
income
(loss)
|
Diluted
earnings
(loss)
per share (k)
|
|
|
|
GAAP
Reported
|
$
260,399
|
$
216,675
|
$
17,246
|
$
26,478
|
10%
|
$
12,183
|
$
28,866
|
$
4,043
|
$
198,000
|
$
(216,614)
|
$
(27,889)
|
$
(244,503)
|
$
(66,056)
|
$
(178,447)
|
$
(4.55)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(17,246)
|
17,246
|
|
-
|
-
|
-
|
-
|
17,246
|
-
|
17,246
|
-
|
17,246
|
|
Cody API business
(b)
|
-
|
(158)
|
-
|
158
|
|
(5)
|
(455)
|
-
|
-
|
618
|
-
|
618
|
-
|
618
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(2,102)
|
-
|
-
|
2,102
|
-
|
2,102
|
-
|
2,102
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(4,043)
|
-
|
4,043
|
-
|
4,043
|
-
|
4,043
|
|
Asset impairment
charges (e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(198,000)
|
198,000
|
-
|
198,000
|
-
|
198,000
|
|
Write-downs for excess
and obsolete inventory (f)
|
-
|
(16,623)
|
-
|
16,623
|
|
-
|
-
|
-
|
-
|
16,623
|
-
|
16,623
|
|
16,623
|
|
Distribution
agreement renewal costs (g)
|
-
|
(4,966)
|
-
|
4,966
|
|
-
|
-
|
-
|
-
|
4,966
|
-
|
4,966
|
|
4,966
|
|
Non-cash interest
(h)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
6,250
|
6,250
|
-
|
6,250
|
|
Other (i)
|
-
|
-
|
-
|
-
|
|
-
|
(1,504)
|
-
|
-
|
1,504
|
-
|
1,504
|
-
|
1,504
|
|
Tax adjustments
(j)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
67,453
|
(67,453)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
260,399
|
$
194,928
|
$
-
|
$
65,471
|
25%
|
$
12,178
|
$
24,805
|
$
-
|
$
-
|
$
28,488
|
$
(21,639)
|
$
6,849
|
$
1,397
|
$
5,452
|
$
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
(b)
|
To exclude the
operating results of the ceased Cody API business
|
|
|
|
|
|
|
|
|
|
|
(c)
|
To exclude depreciation
on previously capitalized software integration costs associated
with the KUPI acquisition
|
|
|
|
|
|
|
|
|
(d)
|
To exclude the costs
associated with the decommissioning and shutdown of the
Philadelphia manufacturing and distribution sites
|
|
|
|
|
|
|
|
(e)
|
To exclude the
federally mandated branded prescription drug fee related to
Levothyroxine, a product the Company no longer sells
|
|
|
|
|
|
|
|
(f)
|
To exclude write-downs
for excess and obsolete inventory related to the discontinuance of
certain product lines
|
|
|
|
|
|
|
|
|
(g)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
|
|
|
|
(h)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
(i)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement
|
|
|
|
|
|
|
|
|
|
(j)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
|
|
(k)
|
The weighted average
share number for the six months ended December 31, 2020 is
39,257,211 for GAAP and 40,915,504 for the non-GAAP earnings (loss)
per share calculations
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(UNAUDITED)
|
(In thousands, except
percentages, share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2021
|
|
Net sales
|
Cost of
sales
|
Amortization
of intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Asset
impairment
charges
|
Operating
loss
|
Other
expense
|
Loss before
income tax
|
Income tax
benefit
|
Net
loss
|
Diluted loss
per share (i)
|
|
|
|
GAAP
Reported
|
$
86,508
|
$
76,990
|
$
3,808
|
$
5,710
|
7%
|
$
4,747
|
$
18,791
|
$
891
|
$
49,361
|
$
(68,080)
|
$
(14,373)
|
$
(82,453)
|
$
(1,368)
|
$
(81,085)
|
$
(2.01)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(3,808)
|
3,808
|
|
-
|
-
|
-
|
-
|
3,808
|
-
|
3,808
|
-
|
3,808
|
|
Cody API business
(b)
|
-
|
(17)
|
-
|
17
|
|
-
|
(257)
|
-
|
-
|
274
|
-
|
274
|
-
|
274
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
-
|
-
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Restructuring expenses
(d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(891)
|
-
|
891
|
-
|
891
|
-
|
891
|
|
Asset impairment
charges (e)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
(49,361)
|
49,361
|
-
|
49,361
|
-
|
49,361
|
|
Non-cash interest
(f)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
1,520
|
1,520
|
-
|
1,520
|
|
Other (g)
|
-
|
(177)
|
-
|
177
|
|
(1)
|
(3,525)
|
-
|
-
|
3,703
|
-
|
3,703
|
-
|
3,703
|
|
Tax adjustments
(h)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,588)
|
4,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
86,508
|
$
76,796
|
$
-
|
$
9,712
|
11%
|
$
4,746
|
$
13,958
|
$
-
|
$
-
|
$
(8,992)
|
$
(12,853)
|
$
(21,845)
|
$
(5,956)
|
$
(15,889)
|
$
(0.39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
|
(b)
|
To exclude the
operating results of the ceased Cody API business
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
To exclude depreciation
on previously capitalized software integration costs associated
with the KUPI acquisition
|
|
|
|
|
|
|
|
|
(d)
|
To exclude expenses
associated with the 2021 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at Silarx
in Carmel, NY
|
|
|
|
|
|
(f)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
(g)
|
To primarily exclude
the reimbursement of legal costs associated with a distribution
agreement, one-time employee retention awards and separation costs
related to the Company's former Chief Information
Officer
|
|
|
|
(h)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
|
|
(i)
|
The weighted average
share number for the three months ended December 31, 2021 is
40,358,127 for GAAP and non-GAAP loss per share
calculations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(UNAUDITED)
|
(In thousands, except
percentages, share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2020
|
|
Net sales
|
Cost of
sales
|
Amortization
of intangibles
|
Gross
Profit
|
Gross
Margin %
|
R&D
expenses
|
SG&A
expenses
|
Restructuring
expenses
|
Operating
income
(loss)
|
Other
expense
|
Income (loss)
before
income tax
|
Income tax
expense
(benefit)
|
Net income
(loss)
|
Diluted
earnings
(loss) per
share (j)
|
|
|
|
GAAP
Reported
|
$
133,920
|
$
124,488
|
$
8,657
|
$
775
|
1%
|
$
5,644
|
$
13,730
|
$
198,000
|
$
(216,599)
|
$
(13,425)
|
$
(230,024)
|
$
(58,076)
|
$
(171,948)
|
$
(4.36)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
-
|
-
|
(8,657)
|
8,657
|
|
-
|
-
|
-
|
8,657
|
-
|
8,657
|
-
|
8,657
|
|
Cody API business
(b)
|
-
|
(84)
|
-
|
84
|
|
(3)
|
(28)
|
-
|
115
|
-
|
115
|
-
|
115
|
|
Depreciation on
capitalized software costs (c)
|
-
|
-
|
-
|
-
|
|
-
|
(1,051)
|
-
|
1,051
|
-
|
1,051
|
-
|
1,051
|
|
Asset impairment
charges (d)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
(198,000)
|
198,000
|
-
|
198,000
|
-
|
198,000
|
|
Write-downs for excess
and obsolete inventory (e)
|
-
|
(16,623)
|
-
|
16,623
|
|
-
|
-
|
-
|
16,623
|
-
|
16,623
|
-
|
16,623
|
|
Distribution
agreement renewal costs (f)
|
-
|
(4,966)
|
-
|
4,966
|
|
-
|
-
|
-
|
4,966
|
-
|
4,966
|
-
|
4,966
|
|
Non-cash interest
(g)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
2,973
|
2,973
|
-
|
2,973
|
|
Other (h)
|
-
|
-
|
-
|
-
|
|
-
|
(553)
|
-
|
553
|
-
|
553
|
-
|
553
|
|
Tax adjustments
(i)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
57,784
|
(57,784)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted
|
$
133,920
|
$
102,815
|
$
-
|
$
31,105
|
23%
|
$
5,641
|
$
12,098
|
$
-
|
$
13,366
|
$
(10,452)
|
$
2,914
|
$
(292)
|
$
3,206
|
$
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
To exclude amortization
of purchased intangible assets primarily related to the acquisition
of KUPI
|
|
|
|
|
|
|
|
|
(b)
|
To exclude the
operating results of the ceased Cody API business
|
|
|
|
|
|
|
|
|
|
|
(c)
|
To exclude depreciation
on previously capitalized software integration costs associated
with the KUPI acquisition
|
|
|
|
|
|
|
|
(d)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets
|
|
|
|
|
|
|
|
|
(e)
|
To exclude write-downs
for excess and obsolete inventory related to the discontinuance of
certain product lines
|
|
|
|
|
|
|
|
(f)
|
To exclude the
consideration recorded to renew the Company's distribution
agreement with Recro Gainesville LLC
|
|
|
|
|
|
|
|
(g)
|
To exclude non-cash
interest expense associated with debt issuance costs
|
|
|
|
|
|
|
|
|
|
(i)
|
To exclude the tax
effect of the pre-tax adjustments included above at applicable tax
rates
|
|
|
|
|
|
|
|
|
(j)
|
The weighted average
share number for the three months ended December 31, 2020 is
39,443,441 for GAAP and 41,074,706 for the non-GAAP earnings (loss)
per share calculations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
($ in
thousands)
|
|
|
|
|
|
Three months
ended
|
|
|
December 31,
2021
|
|
|
|
Net
loss
|
|
$
(81,085)
|
|
|
|
Interest
expense
|
|
14,430
|
Depreciation and
amortization
|
|
9,286
|
Income tax
benefit
|
|
(1,368)
|
EBITDA
|
|
(58,737)
|
|
|
|
Share-based
compensation
|
|
2,309
|
Inventory
write-down
|
|
1,215
|
Asset impairment
charges (a)
|
|
49,361
|
Investment
income
|
|
(46)
|
Other non-operating
expense
|
|
(11)
|
Restructuring
expenses
|
|
891
|
Reimbursement of legal
costs (b)
|
|
2,900
|
Other (c)
|
|
1,077
|
Adjusted EBITDA
(Non-GAAP)
|
|
$
(1,041)
|
(a)
|
To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at Silarx
in Carmel, NY
|
(b)
|
To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
(c)
|
To primarily exclude
one-time employee retention awards and separation costs related to
the Company's former Chief Information Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
|
($ in
millions)
|
|
|
|
|
|
|
|
Fiscal Year 2022
Guidance
|
|
|
|
|
|
|
|
|
Non-GAAP
|
|
|
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$335 -
$360
|
|
-
|
|
$335 -
$360
|
|
|
Gross margin
percentage
|
|
approx. 10% to
11%
|
|
4%
|
(a)
|
approx. 14% to
15%
|
|
|
R&D
expense
|
|
$23 -
$26
|
|
-
|
|
$23 -
$26
|
|
|
SG&A
expense
|
|
$66.5 -
$69.5
|
|
($11.5)
|
(b)
|
$55 -
$58
|
|
|
Restructuring
expense
|
|
$3 -
$4
|
|
($3 -
$4)
|
(c)
|
-
|
|
|
Asset impairment
charges
|
|
$49.4
|
|
($49.4)
|
(d)
|
-
|
|
|
Interest and
other
|
|
approx.
$58
|
|
($6)
|
(e)
|
approx.
$52
|
|
|
Effective tax
rate
|
|
approx. 0% to
5%
|
|
-
|
|
approx. 23% to
24%
|
|
|
Adjusted
EBITDA
|
|
N/A
|
|
N/A
|
|
$0 -
$8
|
|
|
Capital
expenditures
|
|
$10 -
$14
|
|
-
|
|
$10 -
$14
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment
primarily reflects amortization of purchased intangible assets
related to the acquisition of Kremers Urban Pharmaceuticals, Inc.
("KUPI")
|
|
|
|
|
(b) The adjustment
primarily excludes depreciation on previously capitalized software
integration costs associated with the KUPI acquisition and the
reimbursement of legal costs associated with a distribution
agreement
|
|
|
(c) To exclude expenses
associated with the 2021 Restructuring Plan
|
|
|
(d) To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at
Silarx in Carmel, NY
|
|
|
(e) The adjustment
reflects non-cash interest expense associated with debt issuance
costs
|
|
|
|
|
LANNETT COMPANY,
INC.
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
|
($ in
millions)
|
|
|
|
|
|
Fiscal Year 2022
Guidance
|
|
Low
|
|
High
|
|
|
|
|
Net
loss
|
$
(166.4)
|
|
$
(158.0)
|
|
|
|
|
Interest
expense
|
58.0
|
|
58.0
|
Depreciation and
amortization
|
34.0
|
|
36.0
|
Income taxes
|
-
|
|
(8.0)
|
EBITDA
|
(74.4)
|
|
(72.0)
|
|
|
|
|
Share-based
compensation
|
9.0
|
|
9.0
|
Inventory
write-down
|
7.0
|
|
8.0
|
Asset impairment
charges (a)
|
49.4
|
|
49.4
|
Restructuring expenses
(b)
|
3.0
|
|
4.0
|
Reimbursement of legal
costs (c)
|
5.0
|
|
7.0
|
Other (d)
|
1.0
|
|
2.6
|
Adjusted EBITDA
(Non-GAAP)
|
$
-
|
|
$
8.0
|
|
|
|
|
(a) To exclude asset
impairment charges primarily related to the KUPI product rights
intangible assets and the facility and certain equipment at Silarx
in Carmel, NY
|
(b) To exclude expenses
associated with the 2021 Restructuring Plan
|
(c) To exclude the
reimbursement of legal costs associated with a distribution
agreement
|
(d) To primarily
exclude one-time employee retention awards and separation costs
related to the Company's former Chief Information
Officer
|
LANNETT COMPANY,
INC.
|
NET SALES BY MEDICAL
INDICATION
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
($ in
thousands)
|
December
31,
|
|
December
31,
|
Medical
Indication
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Analgesic
|
$
3,919
|
|
$
3,572
|
|
$
9,233
|
|
$
6,692
|
Anti-Psychosis
|
2,095
|
|
13,317
|
|
5,810
|
|
26,345
|
Cardiovascular
|
9,753
|
|
16,336
|
|
23,853
|
|
36,050
|
Central Nervous
System
|
22,340
|
|
24,614
|
|
45,125
|
|
47,139
|
Endocrinology
|
8,297
|
|
9,496
|
|
16,142
|
|
12,729
|
Gastrointestinal
|
14,023
|
|
18,575
|
|
29,263
|
|
35,675
|
Infectious
Disease
|
6,520
|
|
23,044
|
|
19,035
|
|
44,976
|
Migraine
|
4,446
|
|
6,083
|
|
9,131
|
|
15,773
|
Respiratory/Allergy/Cough/Cold
|
1,868
|
|
2,267
|
|
4,982
|
|
3,693
|
Urinary
|
1,164
|
|
1,361
|
|
2,340
|
|
2,819
|
Other
|
9,111
|
|
8,410
|
|
18,287
|
|
16,044
|
Contract Manufacturing
revenue
|
2,972
|
|
6,845
|
|
4,832
|
|
12,464
|
Net
Sales
|
$
86,508
|
|
$
133,920
|
|
$
188,033
|
|
$
260,399
|
|
|
|
|
|
|
|
|
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SOURCE Lannett Company, Inc.