On May 6, 2020 Lannett Company, Inc. (NYSE: LCI) reported financial results for its fiscal 2020 third quarter ended March 31, 2020 (Press release, Lannett, MAY 6, 2020, View Source [SID1234557169]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"I am incredibly proud of the effort and dedication of all of our employees in response to the COVID-19 public health crisis," said Tim Crew, chief executive officer of Lannett. "We focused on employee safety and our team continues to produce important medications for patients. We also recently brought a number of new drug products to market. Fortunately for Lannett, all of our finished-dose manufacturing is U.S. based. We have long articulated our supply chain has less global fragmentation than that of many of our competitors. As a result, our supply chain for products and key ingredients has to date been only modestly affected by challenges associated with COVID-19.
"For our fiscal 2020 third quarter, net sales were higher than expected due to COVID-19, as patients appear to have purchased extra supply of their medications and some customers increased their purchases of some of our products to address patient demand and avoid shortages.
"We plan to launch several new products in the next several months, and look forward to our scheduled meeting in early June with the FDA to plan next steps for the clinical advancement of our biosimilar insulin glargine partnered product candidate."
For the fiscal 2020 third quarter on a GAAP basis, net sales were $144.4 million compared with $172.8 million for the third quarter of fiscal 2019. Gross profit was $41.7 million, or 29% of net sales, compared with $65.3 million, or 38% of net sales. For the fiscal 2020 third quarter, operating expenses included an asset impairment charge of $14.0 million related to the write-down of the value of a product license agreement. Net loss was $16.6 million, or $0.43 per share, versus net income of $10.6 million, or $0.27 per diluted share, for the third quarter of fiscal 2019.
For the fiscal 2020 third quarter reported on a Non-GAAP basis, net sales were $144.4 million compared with $172.8 million for the third quarter of fiscal 2019. Adjusted gross profit was $52.3 million, or 36% of net sales, compared with $77.0 million, or 45% of net sales, for the prior-year third quarter. Adjusted interest expense was $12.7 million compared with $17.0 million for the third quarter of fiscal 2019. Adjusted net income was $11.7 million, or $0.27 per diluted share, compared with $26.6 million, or $0.68 per diluted share, for the fiscal 2019 third quarter. Adjusted EBITDA for the fiscal 2020 third quarter was $35.9 million.
Guidance for Fiscal 2020
**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 2020 third quarter ended March 31, 2020. The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 49654451. 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, as defined in the company’s existing Credit Agreement, is appropriate to provide additional information to investors to demonstrate the company’s ability to comply with financial debt covenants. 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) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature.
*Adjusted EBITDA excludes the same adjustments discussed above, as well as additional adjustments permitted under the company’s existing Credit Agreement.