Amneal Reports Fourth Quarter And Full Year 2018 Financial Results
‒ Q4 2018 Net Revenue of $498 Million; GAAP Loss per share of $0.07; Combined Adjusted Diluted EPS(1) of $0.33 ‒
‒ Full Year 2018 Net Revenue of $1.66 Billion; GAAP Loss per share of $0.16; Combined Net Revenue(1)of $1.86 Billion(3); Combined Adjusted Diluted EPS(1) of $0.98 ‒
‒ Industry Leading Pipeline Execution in 2018; 62 ANDAs Approved and 42 New Products Launched ‒
‒ Targeting up to 50 New Generic Product Launches in 2019 ‒
‒ Provides 2019 Financial Outlook ‒
BRIDGEWATER, N.J., Feb. 28, 2019 /PRNewswire/ -- Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (the "Company") announced its results today for the fourth quarter and year ended December 31, 2018.
Summary of GAAP and Non-GAAP Combined and Adjusted Results |
|||||||||||||||||
(Unaudited; In thousands, except per share amounts) |
|||||||||||||||||
Three Months Ended |
Variance |
||||||||||||||||
December 31, |
September 30, |
December 31, |
Sequential |
Year/ Year |
|||||||||||||
GAAP Results(2) |
|||||||||||||||||
Net revenue |
$ |
497,528 |
$ |
476,487 |
$ |
293,369 |
4.4 |
% |
69.6 |
% |
|||||||
Net (loss) income |
$ |
(20,330) |
$ |
17,465 |
$ |
62,194 |
(216.4) |
% |
(132.7) |
% |
|||||||
Diluted (loss) earnings per share (EPS) |
$ |
(0.07) |
$ |
0.05 |
N/A |
(240.0) |
% |
N/A |
|||||||||
Non-GAAP Results(3) |
|||||||||||||||||
Combined net revenue |
$ |
497,528 |
$ |
476,487 |
$ |
487,383 |
4.4 |
% |
2.1 |
% |
|||||||
Combined adjusted net income |
$ |
99,976 |
$ |
82,101 |
$ |
76,446 |
21.8 |
% |
30.8 |
% |
|||||||
Combined adjusted EBITDA |
$ |
186,647 |
$ |
162,917 |
$ |
139,625 |
14.6 |
% |
33.7 |
% |
|||||||
Combined adjusted diluted EPS |
$ |
0.33 |
$ |
0.27 |
N/A |
22.2 |
% |
N/A |
Years Ended |
Variance |
|||||||||
December 31, |
December 31, |
Year/Year |
||||||||
GAAP Results(2) |
||||||||||
Net revenue |
$ |
1,662,991 |
$ |
1,033,654 |
60.9 |
% |
||||
Net (loss) income |
$ |
(201,303) |
$ |
169,325 |
(218.9) |
% |
||||
Diluted loss per share attributable to Amneal Pharmaceuticals, Inc. |
$ |
(0.16) |
N/A |
N/A |
||||||
Non-GAAP Results(3) |
||||||||||
Combined net revenue |
$ |
1,861,473 |
$ |
1,857,780 |
0.2 |
% |
||||
Combined adjusted net income |
$ |
293,702 |
$ |
270,511 |
8.6 |
% |
||||
Combined adjusted EBITDA |
$ |
584,280 |
$ |
503,678 |
16.0 |
% |
||||
Combined adjusted diluted EPS |
$ |
0.98 |
N/A |
N/A |
(1) See "Non-GAAP Financial Measures" below. |
(2) Current 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. Prior year GAAP results represent Amneal Pharmaceuticals LLC only. |
(3) Assumes the combination between Amneal Pharmaceuticals LLC and Impax Laboratories, LLC occurred on the first day of the year presented. |
Executive Commentary
"We ended a year of significant progress with improved financial results in the fourth quarter," said Rob Stewart, President and CEO of Amneal. "Our fourth quarter performance is the direct result of our strategic investments, accelerated synergy capture and solid performance from our base business, which helped to offset recent competition on several of our largest products. Both our Generics and Specialty segments grew net revenue sequentially and compared to last year's fourth quarter as we delivered improved consolidated net revenue of $498 million, combined adjusted EBITDA(4) of $187 million and combined adjusted diluted EPS(4) of $0.33."
"The full year 2018 was marked by several key strategic milestones, most notably the reshaping of our Company through the merger of Impax and Amneal. By the end of 2018, we completed the merger integration and accelerated the capture of synergies, resulting in approximately $60 million of cost savings for the year. We strategically deployed capital with the acquisition of Gemini Laboratories and through several partnerships including agreements with Jerome Stevens Pharmaceuticals, Inc. and Lannett for Levothyroxine. Through our R&D investments, we achieved 62 ANDA approvals, 10 tentative approvals and we submitted 31 ANDAs with the FDA. We launched 42 new generic products, which contributed $171 million in revenue in 2018."
"Operationally we are doing well as we achieved industry-leading pipeline execution in 2018 with a consistent pace of new approvals and launches. However, the financial benefits of this execution have been slower to materialize than expected as market dynamics are constraining the uptake of certain products. Our 2019 financial outlook reflects the current pricing and competitive challenges within the generic industry, which is impacting our previously expected growth rate. We continue to expect to deliver at least $200 million in merger cost synergies by the end of 2020, as we focus on generating cash to invest in strategic opportunities to diversify the business and accelerate our growth."
Basis of Presentation
The Company's financial results are presented in accordance with U.S. GAAP, which include the results of operations of Impax Laboratories, LLC ("Impax") and Gemini Laboratories, LLC ("Gemini") subsequent to the transaction closing dates of May 4, 2018 and May 7, 2018, respectively. As used in this press release the term "actual" refers to measures under the accounting principles generally accepted in the United States. The Company has two reportable segments, Generics and Specialty, and does not allocate general corporate services to either segment.
Fourth Quarter 2018 Performance
Net revenue in the fourth quarter of 2018 was $498 million, an increase of 69.6%, compared to the prior year period, primarily due to the combination with Impax and the acquisition of Gemini in May 2018, as well as new generic product launches. Net loss was $20 million in the fourth quarter of 2018, compared to net income of $62 million in the fourth quarter of 2017, primarily due to charges related to the combination with Impax and the acquisition of Gemini, including approximately $23 million of incremental interest expense. Diluted EPS in the fourth quarter of 2018 was a loss of $0.07. Diluted EPS in the fourth quarter of 2017 is not available as Amneal Pharmaceuticals LLC was a privately-held company for the period presented.
Combined net revenue(4) in the fourth quarter of 2018 was $498 million, an increase of 2.1%, compared to the prior year period, due to an increase in net revenue from both Generics and Specialty segments. Combined adjusted net income(4) in the fourth quarter of 2018 was $100 million, an increase of 30.8%, compared to the prior year period. Combined adjusted EBITDA(4) in the fourth quarter of 2018 was $187 million, an increase of 33.7%, compared to the prior year period. The increase in both combined adjusted net income(4) and combined adjusted EBITDA(4) was primarily due to higher revenues and cost synergies from the combination with Impax. Combined adjusted diluted EPS in the fourth quarter of 2018 was $0.33.
Full Year 2018 Performance
Net revenue for the full year 2018 was $1,663 million, an increase of 60.9%, compared to full year 2017, primarily due to the combination with Impax and the acquisition of Gemini in May 2018, as well as the contribution from 42 new generic product launches. Net loss was $201 million for full year 2018, compared to net income of $169 million for full year 2017, primarily due to charges related to the combination with Impax and the acquisition of Gemini, including approximately $73 million of incremental interest expense. Diluted EPS for full year 2018 was a loss of $0.16. Diluted EPS for full year 2017 is not available as Amneal Pharmaceuticals LLC was a privately-held company for the period presented.
Combined net revenue(4) for full year 2018 was $1,861 million, a slight increase compared to full year 2017. Combined adjusted net income(4) for full year 2018 was $294 million, an increase of 8.6%, compared to full year 2017. Combined adjusted EBITDA(4) for full year 2018 was $584 million, an increase of 16.0%, compared to full year 2017. The increase in both combined adjusted net income(4) and combined adjusted EBITDA(4) was primarily due to favorable product sales mix and cost synergies from the combination with Impax. Combined adjusted diluted EPS for the full year 2018 was $0.98.
(4) See "Non-GAAP Financial Measures" below.
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Reconciliation of Generics Operating Income to Generics Combined Operating Income |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Generics |
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue - Generics |
$ |
410,897 |
$ |
— |
$ |
410,897 |
$ |
293,369 |
$ |
112,943 |
$ |
406,312 |
|||||||
Cost of goods sold |
263,002 |
— |
263,002 |
141,953 |
150,762 |
292,715 |
|||||||||||||
Gross profit |
147,895 |
— |
147,895 |
151,416 |
(37,819) |
113,597 |
|||||||||||||
Selling, general, and administrative |
16,572 |
— |
16,572 |
11,210 |
8,223 |
19,433 |
|||||||||||||
Research and development |
53,650 |
— |
53,650 |
43,494 |
12,612 |
56,106 |
|||||||||||||
In-process research and development |
38,609 |
— |
38,609 |
— |
186,731 |
186,731 |
|||||||||||||
Restructuring and asset-related charges |
12,031 |
— |
12,031 |
— |
— |
— |
|||||||||||||
Legal settlement gains |
(19,300) |
— |
(19,300) |
(7,845) |
— |
(7,845) |
|||||||||||||
Intellectual property legal development |
3,263 |
— |
3,263 |
2,732 |
— |
2,732 |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(38,123) |
(38,123) |
|||||||||||||
Fixed asset impairment |
— |
— |
— |
— |
5,577 |
5,577 |
|||||||||||||
Operating income (loss) |
$ |
43,070 |
$ |
— |
$ |
43,070 |
$ |
101,825 |
$ |
(212,839) |
$ |
(111,014) |
|||||||
Gross margin |
36.0 |
% |
— |
36.0 |
% |
51.6 |
% |
(33.5) |
% |
28.0 |
% |
||||||||
Adjusted gross profit (Non-GAAP)(5) |
$ |
185,268 |
$ |
— |
$ |
185,268 |
$ |
155,739 |
$ |
35,401 |
$ |
191,140 |
|||||||
Adjusted gross margin (Non-GAAP)(6) |
45.1 |
% |
— |
45.1 |
% |
53.1 |
% |
31.3 |
% |
47.0 |
% |
||||||||
Adjusted operating income (Non-GAAP) |
$ |
150,166 |
$ |
— |
$ |
150,166 |
$ |
106,148 |
$ |
16,431 |
$ |
122,579 |
(5) 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. |
(6) Adjusted gross margin is calculated as adjusted gross profit divided by combined net revenue. |
Fourth Quarter 2018 Performance
Generics net revenue of $411 million increased 40.1% for the fourth quarter of 2018, compared to the prior year period. The increase is primarily attributable to the combination with Impax as well as 42 new product launches in 2018, including Methylphenidate Hydrochloride extended release tablets, Phytonadione tablets, Levothyroxine tablets, Potassium Chloride oral solution, Erythromycin instant release tablets and Colesevelam Hydrochloride tablets. Generics combined net revenue(4) in the fourth quarter of 2018 was $411 million, an increase of 1.1%, compared to the prior year period. The increase is primarily due to new product launches as noted above, partially offset by lower sales across a number of existing products due to lower pricing and additional competition.
Generics gross margin for the fourth quarter of 2018 was 36.0%, compared to 51.6% for the fourth quarter of 2017. The decrease was primarily as a result of higher cost of sales due to incremental amortization and inventory acquisition accounting adjustments, manufacturing plant closure charges and product sales mix primarily due to additional competition on several key products. Generics combined adjusted gross margin(4) for the fourth quarter of 2018 was 45.1%, compared to 47.0% for the fourth quarter of 2017, primarily due to product sales mix.
Generics operating income for the fourth quarter of 2018 was $43 million, compared to $102 million for the fourth quarter of 2017, primarily due to higher amortization charges, acquisition and site closure expenses, in-process research and development impairment charges and restructuring and asset-related charges, principally a result of the combination with Impax. Generics combined adjusted operating income(4) for the fourth quarter of 2018 was $150 million, an increase of 22.5%, compared to $123 million in the prior year period, primarily due to lower selling, general and administrative expenses, lower research and development expenses and an increase in legal settlement gains.
(4) See "Non-GAAP Financial Measures" below
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Reconciliation of Generics Operating Income to Generics Combined Operating Income |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Generics |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue - Generics |
$ |
1,439,031 |
$ |
102,237 |
$ |
1,541,268 |
$ |
1,033,654 |
$ |
549,077 |
$ |
1,582,731 |
|||||||
Cost of goods sold |
842,996 |
122,761 |
965,757 |
507,476 |
551,776 |
1,059,252 |
|||||||||||||
Gross profit |
596,035 |
(20,524) |
575,511 |
526,178 |
(2,699) |
523,479 |
|||||||||||||
Selling, general, and administrative |
68,426 |
11,896 |
80,322 |
56,050 |
28,294 |
84,344 |
|||||||||||||
Research and development |
183,412 |
13,623 |
197,035 |
171,420 |
63,245 |
234,665 |
|||||||||||||
In-process research and development |
39,259 |
— |
39,259 |
— |
192,809 |
192,809 |
|||||||||||||
Acquisition, integration and transaction |
114,622 |
— |
114,622 |
— |
— |
— |
|||||||||||||
Restructuring and asset-related charges |
33,943 |
— |
33,943 |
— |
— |
— |
|||||||||||||
Legal settlement gains |
(22,300) |
— |
(22,300) |
(29,312) |
— |
(29,312) |
|||||||||||||
Intellectual property legal development |
15,772 |
— |
15,772 |
20,518 |
715 |
21,233 |
|||||||||||||
Litigation, settlements and related |
— |
84,597 |
84,597 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(31,048) |
(31,048) |
|||||||||||||
Fixed asset impairment |
— |
— |
— |
— |
8,380 |
8,380 |
|||||||||||||
Operating income |
$ |
162,901 |
$ |
(130,640) |
$ |
32,261 |
$ |
307,502 |
$ |
(265,094) |
$ |
42,408 |
|||||||
Gross margin |
41.4 |
% |
(20.1) |
% |
37.3 |
% |
50.9 |
% |
(0.5) |
% |
33.1 |
% |
|||||||
Adjusted gross profit (Non-GAAP)(5) |
$ |
712,954 |
$ |
3,246 |
$ |
716,200 |
$ |
561,518 |
$ |
208,960 |
$ |
770,478 |
|||||||
Adjusted gross margin (Non-GAAP)(6) |
49.5 |
% |
3.2 |
% |
46.5 |
% |
54.3 |
% |
38.1 |
% |
48.7 |
% |
|||||||
Adjusted operating income (Non-GAAP) |
$ |
489,520 |
$ |
(22,273) |
$ |
467,247 |
$ |
342,842 |
$ |
123,241 |
$ |
466,083 |
(5) 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. |
(6) Adjusted gross margin is calculated as adjusted gross profit divided by combined net revenue. |
Full Year 2018 Performance
Generics net revenue of $1,439 million increased 39.2% for the full year 2018, compared to full year 2017. The increase is primarily attributable to the combination with Impax as well as the contribution from 42 new product launches in 2018, including Methylphenidate Hydrochloride extended release tablets, Phytonadione tablets, Levothyroxine tablets, Potassium Chloride oral solution, Erythromycin instant release tablets and Colesevelam Hydrochloride tablets. Generics combined net revenue(4) for full year 2018 was $1,541 million, a decrease of 2.6%, compared to full year 2017. The decrease was primarily driven by lower sales of Epinephrine Auto-Injector due to an ongoing supply disruption, and lower sales of existing base business products, including Budesonide Inhalation Suspension, Lidocaine, Diclofenac Sodium Gel 3% and Loratadine/PSE as a result of lower pricing and additional competition.
Generics gross margin for full year 2018 was 41.4%, compared to 50.9% for full year 2017. The decrease was primarily as a result of higher cost of sales due to incremental amortization, inventory acquisition accounting adjustments, inventory-related charges, manufacturing plant closure charges, impairment of product intangible assets and lower margin products in the Impax portfolio. Generics combined adjusted gross margin(4) for full year 2018 was 46.5%, compared to 48.7% for full year 2017, primarily due to product sales mix.
Generics operating income for full year 2018 was $163 million, compared to $308 million for full year 2017, primarily due to acquisition, integration and transaction-related expenses, principally a result of the combination with Impax, as noted above. Generics combined adjusted operating income(4) for full year 2018 was $467 million, an increase of 0.2%, compared to $466 million for full year 2017.
(4) 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 December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue - Specialty: |
|||||||||||||||||||
Rytary® |
$ |
42,680 |
$ |
— |
$ |
42,680 |
$ |
— |
$ |
28,290 |
$ |
28,290 |
|||||||
Zomig® |
18,308 |
— |
18,308 |
— |
15,034 |
15,034 |
|||||||||||||
All other specialty products |
25,643 |
— |
25,643 |
— |
37,747 |
37,747 |
|||||||||||||
Total net revenue - Specialty |
86,631 |
— |
86,631 |
— |
81,071 |
81,071 |
|||||||||||||
Cost of goods sold |
41,118 |
— |
41,118 |
— |
23,405 |
23,405 |
|||||||||||||
Gross profit |
45,513 |
— |
45,513 |
— |
57,666 |
57,666 |
|||||||||||||
Selling, general, and administrative |
16,200 |
— |
16,200 |
— |
22,156 |
22,156 |
|||||||||||||
Research and development |
3,647 |
— |
3,647 |
— |
3,077 |
3,077 |
|||||||||||||
Intellectual property legal development |
(26) |
— |
(26) |
— |
— |
— |
|||||||||||||
Restructuring and asset-related charges |
1,682 |
— |
1,682 |
— |
— |
— |
|||||||||||||
Litigation, settlements and related |
— |
— |
— |
— |
1,111 |
1,111 |
|||||||||||||
Fixed asset impairment |
— |
— |
— |
— |
74,128 |
74,128 |
|||||||||||||
Operating income (loss) |
$ |
24,010 |
$ |
— |
$ |
24,010 |
$ |
— |
$ |
(42,806) |
$ |
(42,806) |
|||||||
Gross margin |
52.5 |
% |
— |
52.5 |
% |
— |
71.1 |
% |
71.1 |
% |
|||||||||
Adjusted gross profit (Non-GAAP)(5) |
$ |
70,058 |
$ |
— |
$ |
70,058 |
$ |
— |
$ |
63,368 |
$ |
63,368 |
|||||||
Adjusted gross margin (Non-GAAP)(6) |
80.9 |
% |
— |
80.9 |
% |
— |
78.2 |
% |
78.2 |
% |
|||||||||
Adjusted operating income (Non- |
$ |
50,600 |
$ |
— |
$ |
50,600 |
$ |
— |
$ |
38,995 |
$ |
38,995 |
(5) 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. |
(6) Adjusted gross margin is calculated as adjusted gross profit divided by combined net revenue. |
Fourth Quarter 2018 Performance
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 combined net revenue(4) in the fourth quarter of 2018 was $87 million, an increase of 6.9%, compared to the prior year period, driven primarily by higher revenue from Rytary®, Zomig® and Unithroid®, partially offset by significantly lower sales of Albenza® as a result of the loss of exclusivity in September of 2018.
Specialty combined gross margin(4) for the fourth quarter of 2018 was 52.5%, compared to 71.1% for the prior year period, driven primarily by higher amortization expense. Specialty combined adjusted gross margin(4) was 80.9% for the fourth quarter of 2018, compared to 78.2% in the prior year period, primarily due to product sales mix.
Specialty combined operating income(4) for the fourth quarter of 2018 was $24 million, an increase of $67 million, compared to a combined operating loss of $43 million for the fourth quarter of 2017, primarily due to fixed asset impairment charges in the fourth quarter of 2017, for which there were no comparable charges in the current year period, and increased revenue, as noted above. Specialty combined adjusted operating income(4) for the fourth quarter of 2018 was $51 million, an increase of $12 million, compared to $39 million for the prior year period, primarily due to increased revenue and lower selling, general and administrative expenses.
(4) See "Non-GAAP Financial Measures" below
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Reconciliation of Specialty Operating Income to Specialty Combined Operating Income |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Specialty |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue - Specialty: |
|||||||||||||||||||
Rytary® |
$ |
95,541 |
$ |
35,086 |
$ |
130,627 |
$ |
— |
$ |
91,637 |
$ |
91,637 |
|||||||
Zomig® |
43,111 |
14,411 |
57,522 |
— |
51,115 |
51,115 |
|||||||||||||
All other specialty products sales |
85,308 |
46,748 |
132,056 |
— |
132,297 |
132,297 |
|||||||||||||
Total net revenue - Specialty |
223,960 |
96,245 |
320,205 |
— |
275,049 |
275,049 |
|||||||||||||
Cost of goods sold |
103,592 |
26,731 |
130,323 |
— |
98,650 |
98,650 |
|||||||||||||
Gross profit |
120,368 |
69,514 |
189,882 |
— |
176,399 |
176,399 |
|||||||||||||
Selling, general, and administrative |
49,465 |
27,942 |
77,407 |
— |
80,185 |
80,185 |
|||||||||||||
Research and development |
10,778 |
3,664 |
14,442 |
— |
17,662 |
17,662 |
|||||||||||||
Intellectual property legal development |
489 |
23 |
512 |
— |
3,167 |
3,167 |
|||||||||||||
Restructuring and asset-related charges |
4,076 |
— |
4,076 |
— |
— |
— |
|||||||||||||
Litigation, settlements and related |
— |
940 |
940 |
— |
1,111 |
1,111 |
|||||||||||||
Fixed asset impairment |
— |
— |
— |
— |
74,128 |
74,128 |
|||||||||||||
Operating income |
$ |
55,560 |
$ |
36,945 |
$ |
92,505 |
$ |
— |
$ |
146 |
$ |
146 |
|||||||
Gross margin |
53.7 |
% |
72.2 |
% |
59.3 |
% |
— |
64.1 |
% |
64.1 |
% |
||||||||
Adjusted gross profit (Non-GAAP)(5) |
$ |
178,022 |
$ |
75,626 |
$ |
253,648 |
$ |
— |
$ |
200,937 |
$ |
200,937 |
|||||||
Adjusted gross margin (Non-GAAP)(6) |
79.5 |
% |
78.6 |
% |
79.2 |
% |
— |
73.1 |
% |
73.1 |
% |
||||||||
Adjusted operating income (Non-GAAP) |
$ |
118,127 |
$ |
43,997 |
$ |
162,124 |
$ |
— |
$ |
101,698 |
$ |
101,698 |
(5) 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. |
(6) Adjusted gross margin is calculated as adjusted gross profit divided by combined net revenue. |
Full Year 2018 Performance
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 combined net revenue(4) for full year 2018 was $320 million, an increase of 16.4%, compared to full year 2017, driven primarily by higher revenue from Rytary, Zomig and Unithroid.
Specialty combined gross margin(4) for full year 2018 was 59.3%, compared to 64.1% for full year 2017, driven primarily by higher amortization expense. Specialty combined adjusted gross margin(4) was 79.2% for full year of 2018, compared to 73.1% for full year 2017, primarily due to product sales mix.
Specialty combined operating income(4) for full year 2018 was $93 million compared to $146 thousand of operating income for full year 2017, primarily due to fixed asset impairment charges in 2017, for which there were no comparable charges in 2018. Specialty combined adjusted operating income(4) for full year 2018 was $162 million, an increase of $60 million, compared to $102 million for full year 2017, primarily due to increased revenue and lower selling, general and administrative expenses.
(4) See "Non-GAAP Financial Measures" below.
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 certain 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.
2019 Key Outlook Assumptions
Full Year 2019 Financial Outlook |
|
Adjusted gross margin |
47% - 50% |
Adjusted R&D as a % of net revenue |
9% - 10% |
Adjusted SG&A as a % of net revenue |
11% - 12% |
Adjusted EBITDA |
$600 million - $650 million |
Adjusted diluted EPS |
$0.94 - $1.04 |
Adjusted effective tax rate |
19% - 21% |
Capital expenditures |
Approximately $100 million |
Weighted diluted shares outstanding |
Approximately 300 million |
Conference Call Information
Amneal will hold a conference call on February 28, 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/1898588/19E7D09970ECDA91F9B21D94F3CEC0AB. The number to call from within the United States is (866) 652-5200 and (412) 317-6060 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 10128077.
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 approximately 6,000 employees in its operations in North America, Asia, and Europe, working together to bring high-quality medicines to patients primarily within the United States.
Amneal is one of the largest and fastest growing generic pharmaceutical manufacturers in the United States, with an expanding portfolio of generic products 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 division 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, 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 results of Impax and Gemini as if the transaction closing dates had occurred on the first day of all periods presented herein. 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 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.
All combined business results presented in this release are not prepared in accordance with Article 11 of Regulation S-X. Adjusted gross profit is calculated as total revenues less adjusted cost of goods sold. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues. 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.
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 of 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 impact of global economic conditions; our ability to integrate the operations of Amneal Pharmaceuticals LLC and Impax Laboratories, LLC pursuant to the business combination completed on May 4, 2018, and our ability to realize the anticipated synergies and other benefits of the combination; our ability to successfully develop and commercialize new products; our ability to obtain exclusive marketing rights for our products and to introduce products on a timely basis; the competition we face in the pharmaceutical industry from brand and generic drug product companies, and the impact of that competition 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; 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 Quarterly Report on Form 10-Q and in the Company's subsequent filings with the Securities and Exchange Commission, including its Annual Report on 10-K for the fiscal year ended December 31, 2018 expected to be filed on or about March 1, 2019. 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 |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
(unaudited) |
|||||||||||||||
Three months ended |
Years ended |
||||||||||||||
December 31, |
December 31, |
December 31, |
December 31, |
||||||||||||
Net revenue |
$ |
497,528 |
$ |
293,369 |
$ |
1,662,991 |
$ |
1,033,654 |
|||||||
Cost of goods sold |
304,120 |
141,953 |
946,588 |
507,476 |
|||||||||||
Gross profit |
193,408 |
151,416 |
716,403 |
526,178 |
|||||||||||
Selling, general and administrative |
71,236 |
26,966 |
230,435 |
109,046 |
|||||||||||
Research and development |
57,297 |
43,494 |
194,190 |
171,420 |
|||||||||||
In-process research and development impairment charges |
38,609 |
— |
39,259 |
— |
|||||||||||
Acquisition, transaction-related and integration expenses |
4,945 |
7,050 |
221,818 |
9,403 |
|||||||||||
Restructuring and asset-related charges |
14,104 |
— |
56,413 |
— |
|||||||||||
Legal settlement gains |
(19,300) |
(7,845) |
(22,300) |
(29,312) |
|||||||||||
Intellectual property legal development expenses |
3,237 |
2,732 |
16,261 |
20,518 |
|||||||||||
Operating income (loss) |
23,280 |
79,019 |
(19,673) |
245,103 |
|||||||||||
Other (expense) income: |
|||||||||||||||
Interest expense, net |
(42,880) |
(19,956) |
(143,571) |
(71,061) |
|||||||||||
Foreign exchange gain (loss) |
2,817 |
3,341 |
(19,701) |
29,092 |
|||||||||||
Loss on extinguishment of debt |
— |
(1) |
(19,667) |
(2,532) |
|||||||||||
Loss on sale of international operations |
(146) |
(352) |
(2,958) |
(29,232) |
|||||||||||
Other income (expense) |
2,123 |
24 |
2,848 |
(47) |
|||||||||||
Total other expense, net |
(38,086) |
(16,944) |
(183,049) |
(73,780) |
|||||||||||
(Loss) income before income taxes |
(14,806) |
62,075 |
(202,722) |
171,323 |
|||||||||||
Provision for (benefit from) income taxes |
5,524 |
(119) |
(1,419) |
1,998 |
|||||||||||
Net (loss) income |
(20,330) |
62,194 |
(201,303) |
169,325 |
|||||||||||
Less: Net (income) loss attributable to Amneal Pharmaceuticals |
— |
(61,569) |
148,806 |
(167,648) |
|||||||||||
Less: Net loss (income) attributable to non-controlling interests |
11,562 |
(625) |
32,753 |
(1,677) |
|||||||||||
Net loss attributable to Amneal Pharmaceuticals, Inc. before |
(8,768) |
— |
(19,744) |
— |
|||||||||||
Accretion of redeemable non-controlling interest |
— |
— |
(1,176) |
— |
|||||||||||
Net loss attributable to Amneal Pharmaceuticals, Inc. |
$ |
(8,768) |
$ |
— |
$ |
(20,920) |
$ |
— |
|||||||
Net loss per share attributable to Amneal Pharmaceuticals, |
|||||||||||||||
Class A and Class B-1 basic and diluted |
$ |
(0.07) |
$ |
(0.16) |
|||||||||||
Weighted-average common shares outstanding: |
|||||||||||||||
Class A and Class B-1 basic and diluted |
127,343 |
127,252 |
Amneal Pharmaceuticals, Inc. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(In thousands) |
|||||||
December 31, 2018 |
December 31, 2017 |
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
213,394 |
$ |
74,166 |
|||
Restricted cash |
5,385 |
3,756 |
|||||
Trade accounts receivable, net |
481,495 |
351,367 |
|||||
Inventories |
457,219 |
284,038 |
|||||
Prepaid expenses and other current assets |
128,321 |
42,396 |
|||||
Related party receivables |
830 |
16,210 |
|||||
Total current assets |
1,286,644 |
771,933 |
|||||
Property, plant and equipment, net |
544,146 |
486,758 |
|||||
Goodwill |
426,226 |
26,444 |
|||||
Intangible assets, net |
1,654,969 |
44,599 |
|||||
Deferred tax asset, net |
373,159 |
898 |
|||||
Other assets |
67,592 |
11,257 |
|||||
Total assets |
$ |
4,352,736 |
$ |
1,341,889 |
|||
Liabilities and Stockholders' Equity / Members' Deficit |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued expenses |
$ |
514,440 |
$ |
194,779 |
|||
Current portion of long-term debt, net |
21,449 |
89,171 |
|||||
Current portion of financing obligations - related party |
266 |
311 |
|||||
Related party payables |
17,695 |
12,622 |
|||||
Total current liabilities |
553,850 |
296,883 |
|||||
Long-term debt, net |
2,630,598 |
1,355,274 |
|||||
Financing obligation - related party |
39,083 |
39,987 |
|||||
Deferred income taxes |
1,178 |
2,491 |
|||||
Liabilities under tax receivable agreement |
192,884 |
— |
|||||
Other long-term liabilities |
38,780 |
7,793 |
|||||
Related party payable- long term |
— |
15,043 |
|||||
Total long-term liabilities |
2,902,523 |
1,420,588 |
|||||
Total stockholders' equity / members' deficit |
896,363 |
(375,582) |
|||||
Total liabilities and stockholders' / members' deficit |
$ |
4,352,736 |
$ |
1,341,889 |
Amneal Pharmaceuticals, Inc. |
|||||||
Consolidated Statements of Cash Flows |
|||||||
(In thousands) |
|||||||
Years Ended December 31, |
|||||||
2018 |
2017 |
||||||
Cash flows from operating activities: |
|||||||
Net (loss) income |
$ |
(201,303) |
$ |
169,325 |
|||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|||||||
Depreciation and amortization |
137,403 |
45,936 |
|||||
Unrealized foreign currency loss (gain) |
18,582 |
(30,823) |
|||||
Amortization of debt issuance costs |
5,859 |
4,585 |
|||||
Loss on extinguishment of debt |
19,667 |
2,532 |
|||||
Loss on sale of certain international businesses |
2,958 |
29,232 |
|||||
Intangible asset impairment charges |
47,928 |
— |
|||||
Non-cash restructuring and asset-related charges |
11,295 |
— |
|||||
Deferred tax (benefit) provision |
(9,439) |
742 |
|||||
Stock-based compensation and PPU expense |
167,597 |
— |
|||||
Inventory provision |
44,539 |
3,771 |
|||||
Other operating charges and credits, net |
(1,866) |
9,935 |
|||||
Changes in assets and liabilities: |
|||||||
Trade accounts receivable, net |
89,084 |
35,255 |
|||||
Inventories |
(42,875) |
(31,826) |
|||||
Prepaid expenses, other current assets and other assets |
19,198 |
(25,305) |
|||||
Related party receivables |
10,928 |
(5,485) |
|||||
Accounts payable, accrued expenses and other liabilities |
(55,212) |
18,105 |
|||||
Related party payables |
(14,113) |
8,208 |
|||||
Net cash provided by operating activities |
250,230 |
234,187 |
|||||
Cash flows from investing activities: |
|||||||
Purchases of property, plant and equipment |
(83,088) |
(94,771) |
|||||
Acquisition of product rights and licenses |
(14,000) |
(19,500) |
|||||
Acquisitions, net of cash acquired |
(324,634) |
— |
|||||
Proceeds from sale of property, plant and equipment |
25,344 |
— |
|||||
Proceeds from sale of certain international businesses, net of cash sold |
— |
15,717 |
|||||
Net cash used in investing activities |
(396,378) |
(98,554) |
|||||
Cash flows from financing activities: |
|||||||
Payments of deferred financing costs and debt extinguishment costs |
(54,955) |
(5,026) |
|||||
Proceeds from issuance of debt |
1,325,383 |
250,000 |
|||||
Payments of principal on debt and capital leases |
(617,051) |
(13,625) |
|||||
Net (payments) borrowings on revolving credit line |
(75,000) |
50,000 |
|||||
Payments of principal on financing obligation - related party |
(243) |
(274) |
|||||
Proceeds from exercise of stock options |
3,797 |
— |
|||||
Equity contributions |
27,742 |
40 |
|||||
Capital contribution from (dividend to) non-controlling interest |
360 |
(865) |
|||||
Acquisition of redeemable non-controlling interest |
(11,775) |
— |
|||||
Tax distribution to non-controlling interest |
(35,543) |
— |
|||||
Distributions to members |
(182,998) |
(375,265) |
|||||
Repayment of related party note |
(92,042) |
— |
|||||
Net cash provided by (used in) financing activities |
287,675 |
(95,015) |
|||||
Effect of foreign exchange rate on cash |
(670) |
(242) |
|||||
Net increase in cash, cash equivalents, and restricted cash |
140,857 |
40,376 |
|||||
Cash, cash equivalents, and restricted cash - beginning of period |
77,922 |
37,546 |
|||||
Cash, cash equivalents, and restricted cash - end of period |
$ |
218,779 |
$ |
77,922 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Reconciliation of Non-GAAP Combined Results of Operations |
|||||||||||||||||||
(Unaudited: In thousands) |
|||||||||||||||||||
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue: |
|||||||||||||||||||
Generics |
$ |
410,897 |
$ |
— |
$ |
410,897 |
$ |
293,369 |
$ |
112,943 |
$ |
406,312 |
|||||||
Specialty |
86,631 |
— |
86,631 |
— |
81,071 |
81,071 |
|||||||||||||
Total net revenue |
497,528 |
— |
497,528 |
293,369 |
194,014 |
487,383 |
|||||||||||||
Cost of goods sold |
304,120 |
— |
304,120 |
141,953 |
174,167 |
316,120 |
|||||||||||||
Gross profit |
193,408 |
— |
193,408 |
151,416 |
19,847 |
171,263 |
|||||||||||||
Selling, general and administrative |
71,236 |
— |
71,236 |
26,966 |
59,441 |
86,407 |
|||||||||||||
Research and development |
57,297 |
— |
57,297 |
43,494 |
15,689 |
59,183 |
|||||||||||||
In-process research and development |
38,609 |
— |
38,609 |
— |
186,731 |
186,731 |
|||||||||||||
Acquisition, transaction-related and |
4,945 |
— |
4,945 |
7,050 |
8,061 |
15,111 |
|||||||||||||
Restructuring and asset-related charges |
14,104 |
— |
14,104 |
— |
— |
— |
|||||||||||||
Legal settlement gains |
(19,300) |
(19,300) |
(7,845) |
— |
(7,845) |
||||||||||||||
Intellectual property legal development |
3,237 |
— |
3,237 |
2,732 |
— |
2,732 |
|||||||||||||
Litigation, settlements and related charges |
— |
— |
— |
— |
1,223 |
1,223 |
|||||||||||||
Impairment loss on tangible assets |
— |
— |
— |
— |
79,705 |
79,705 |
|||||||||||||
Gain on sale of assets |
— |
— |
— |
— |
(656) |
(656) |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(38,123) |
(38,123) |
|||||||||||||
Operating income (loss) |
23,280 |
— |
23,280 |
79,019 |
(292,224) |
(213,205) |
|||||||||||||
Other (expense) income: |
|||||||||||||||||||
Interest expense, net |
(42,880) |
— |
(42,880) |
(19,956) |
(13,672) |
(33,628) |
|||||||||||||
Foreign exchange gain |
2,817 |
— |
2,817 |
3,341 |
— |
3,341 |
|||||||||||||
Loss on extinguishment of debt |
— |
— |
— |
(1) |
— |
(1) |
|||||||||||||
Loss on sale of international |
(146) |
— |
(146) |
(352) |
— |
(352) |
|||||||||||||
Other income (expense) |
2,123 |
— |
2,123 |
24 |
(292) |
(268) |
|||||||||||||
Total other (expense) income, net |
(38,086) |
— |
(38,086) |
(16,944) |
(13,964) |
(30,908) |
|||||||||||||
(Loss) income before income taxes |
(14,806) |
— |
(14,806) |
62,075 |
(306,188) |
(244,113) |
|||||||||||||
Provision for (benefit from) income |
5,524 |
— |
5,524 |
(119) |
(9,010) |
(9,129) |
|||||||||||||
Net (loss) income |
$ |
(20,330) |
$ |
— |
$ |
(20,330) |
$ |
62,194 |
$ |
(297,178) |
$ |
(234,984) |
|||||||
Less: Net income attributable to |
— |
(61,569) |
|||||||||||||||||
Less: Net loss (income) attributable to |
11,562 |
(625) |
|||||||||||||||||
Net loss attributable to Amneal |
$ |
(8,768) |
$ |
— |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Reconciliation of Non-GAAP Combined Results of Operations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Year ended December 31, 2018 |
Year ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net revenue: |
|||||||||||||||||||
Generics |
$ |
1,439,031 |
$ |
102,237 |
$ |
1,541,268 |
$ |
1,033,654 |
$ |
549,077 |
$ |
1,582,731 |
|||||||
Specialty |
223,960 |
96,245 |
320,205 |
— |
275,049 |
275,049 |
|||||||||||||
Total net revenue |
1,662,991 |
198,482 |
1,861,473 |
1,033,654 |
824,126 |
1,857,780 |
|||||||||||||
Cost of goods sold |
946,588 |
149,492 |
1,096,080 |
507,476 |
650,426 |
1,157,902 |
|||||||||||||
Gross profit |
716,403 |
48,990 |
765,393 |
526,178 |
173,700 |
699,878 |
|||||||||||||
Selling, general and administrative |
230,435 |
80,242 |
310,677 |
109,046 |
217,410 |
326,456 |
|||||||||||||
Research and development |
194,190 |
17,287 |
211,477 |
171,420 |
80,907 |
252,327 |
|||||||||||||
In-process research and development |
39,259 |
— |
39,259 |
— |
192,809 |
192,809 |
|||||||||||||
Acquisition, transaction-related and |
221,818 |
4,381 |
226,199 |
9,403 |
11,097 |
20,500 |
|||||||||||||
Restructuring and asset-related charges |
56,413 |
— |
56,413 |
— |
— |
— |
|||||||||||||
Legal settlement gains |
(22,300) |
— |
(22,300) |
(29,312) |
— |
(29,312) |
|||||||||||||
Intellectual property legal development |
16,261 |
23 |
16,284 |
20,518 |
3,882 |
24,400 |
|||||||||||||
Litigation, settlements and related |
— |
85,537 |
85,537 |
— |
1,223 |
1,223 |
|||||||||||||
Impairment loss on tangible assets |
— |
— |
— |
— |
82,508 |
82,508 |
|||||||||||||
Gain on sale of assets |
— |
— |
— |
— |
(17,236) |
(17,236) |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(31,048) |
(31,048) |
|||||||||||||
Operating (loss) income |
(19,673) |
(138,480) |
(158,153) |
245,103 |
(367,852) |
(122,749) |
|||||||||||||
Other (expense) income: |
|||||||||||||||||||
Interest expense, net |
(143,571) |
(18,231) |
(161,802) |
(71,061) |
(53,412) |
(124,473) |
|||||||||||||
Foreign exchange (loss) gain |
(19,701) |
921 |
(18,780) |
29,092 |
— |
29,092 |
|||||||||||||
Loss on extinguishment of debt |
(19,667) |
— |
(19,667) |
(2,532) |
(1,215) |
(3,747) |
|||||||||||||
Loss on sale of international |
(2,958) |
— |
(2,958) |
(29,232) |
— |
(29,232) |
|||||||||||||
Other income (expense) |
2,848 |
(638) |
2,210 |
(47) |
(10,878) |
(10,925) |
|||||||||||||
Total other (expense) income, net |
(183,049) |
(17,948) |
(200,997) |
(73,780) |
(65,505) |
(139,285) |
|||||||||||||
(Loss) income before income taxes |
(202,722) |
(156,428) |
(359,150) |
171,323 |
(433,357) |
(262,034) |
|||||||||||||
(Benefit from) provision for income |
(1,419) |
(6,273) |
(7,692) |
1,998 |
18,326 |
20,324 |
|||||||||||||
Net (loss) income |
$ |
(201,303) |
$ |
(150,155) |
$ |
(351,458) |
$ |
169,325 |
$ |
(451,683) |
$ |
(282,358) |
|||||||
Less: Net loss (income) attributable to |
148,806 |
(167,648) |
|||||||||||||||||
Less: Net loss (income) attributable to |
32,753 |
(1,677) |
|||||||||||||||||
Accretion of redeemable non- |
(1,176) |
— |
|||||||||||||||||
Net loss attributable to Amneal |
$ |
(20,920) |
$ |
— |
Amneal Pharmaceuticals, Inc. |
|||||||||
Reconciliation of Non-GAAP Combined Results of Operations |
|||||||||
(Unaudited; In thousands) |
|||||||||
The following reconciliation for the three months ended September 30, 2018 has been provided for sequential comparison. |
|||||||||
Three months ended September 30, 2018 |
|||||||||
Add: |
(Non-GAAP) |
||||||||
Actual |
Impax/ |
Combined |
|||||||
Net revenue: |
|||||||||
Generics |
$ |
391,175 |
$ |
— |
$ |
391,175 |
|||
Specialty |
85,312 |
— |
85,312 |
||||||
Total net revenue |
476,487 |
— |
476,487 |
||||||
Cost of goods sold |
276,382 |
— |
276,382 |
||||||
Gross profit |
200,105 |
— |
200,105 |
||||||
Selling, general and administrative |
78,075 |
— |
78,075 |
||||||
Research and development |
42,999 |
— |
42,999 |
||||||
In-process research and development impairment charges |
4,401 |
— |
4,401 |
||||||
Acquisition, transaction-related and integration expenses |
2,231 |
— |
2,231 |
||||||
Restructuring and asset-related charges |
(2,156) |
— |
(2,156) |
||||||
Operating income |
74,555 |
— |
74,555 |
||||||
Other expense: |
|||||||||
Interest expense, net |
(43,018) |
— |
(43,018) |
||||||
Foreign exchange loss |
(5,137) |
— |
(5,137) |
||||||
Loss on sale of international operations |
(2,812) |
— |
(2,812) |
||||||
Other expense |
(1,014) |
— |
(1,014) |
||||||
Total other expense, net |
(51,981) |
— |
(51,981) |
||||||
Income before income taxes |
22,574 |
— |
22,574 |
||||||
Provision for income taxes |
5,109 |
5,109 |
|||||||
Net income |
$ |
17,465 |
$ |
— |
$ |
17,465 |
|||
Less: Net income attributable to Amneal Pharmaceuticals LLC pre-Combination |
— |
||||||||
Less: Net income attributable to non-controlling interests |
(10,577) |
||||||||
Accretion of redeemable non-controlling interest |
64 |
||||||||
Net income attributable to Amneal Pharmaceuticals, Inc. |
$ |
6,952 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Reconciliation of Generics Cost of Goods Sold to Generics Combined Adjusted Cost of Goods Sold |
|||||||||||||||||||
Generics |
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Cost of goods sold |
$ |
263,002 |
$ |
— |
$ |
263,002 |
$ |
141,953 |
$ |
150,762 |
$ |
292,715 |
|||||||
Adjusted to deduct: |
|||||||||||||||||||
Amortization |
10,030 |
— |
10,030 |
923 |
13,075 |
13,998 |
|||||||||||||
Inventory related charges(7) |
3,620 |
— |
3,620 |
3,400 |
6,224 |
9,624 |
|||||||||||||
Acquisition and site closure |
12,384 |
— |
12,384 |
— |
— |
— |
|||||||||||||
Asset impairment charges(9) |
510 |
— |
510 |
— |
43,961 |
43,961 |
|||||||||||||
Stock-based compensation expense |
406 |
— |
406 |
— |
— |
— |
|||||||||||||
Restructuring and asset-related |
— |
— |
— |
— |
9,960 |
9,960 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Adjusted cost of goods sold (Non- |
$ |
225,629 |
$ |
— |
$ |
225,629 |
$ |
137,630 |
$ |
77,542 |
$ |
215,172 |
|||||||
Generics |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Cost of goods sold |
$ |
842,996 |
$ |
122,761 |
$ |
965,757 |
$ |
507,476 |
$ |
551,776 |
$ |
1,059,252 |
|||||||
Adjusted to deduct: |
|||||||||||||||||||
Amortization |
23,940 |
13,823 |
37,763 |
3,974 |
53,039 |
57,013 |
|||||||||||||
Inventory related charges(7) |
45,615 |
9,894 |
55,509 |
22,682 |
25,740 |
48,422 |
|||||||||||||
Acquisition and site closure |
27,619 |
— |
27,619 |
— |
9,314 |
9,314 |
|||||||||||||
Asset impairment charges(9) |
8,401 |
53 |
8,454 |
— |
96,864 |
96,864 |
|||||||||||||
Stock-based compensation expense |
921 |
— |
921 |
— |
— |
— |
|||||||||||||
Restructuring and asset-related |
— |
— |
— |
— |
26,702 |
26,702 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Royalty expense |
— |
— |
— |
8,684 |
— |
8,684 |
|||||||||||||
Adjusted cost of goods sold (Non- |
$ |
726,077 |
$ |
98,991 |
$ |
825,068 |
$ |
472,136 |
$ |
340,117 |
$ |
812,253 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Reconciliation of Specialty Cost of Goods Sold to Specialty Combined Adjusted Cost of Goods Sold |
|||||||||||||||||||
Specialty |
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Cost of goods sold |
$ |
41,118 |
$ |
— |
$ |
41,118 |
$ |
— |
$ |
23,405 |
$ |
23,405 |
|||||||
Adjusted to deduct: |
|||||||||||||||||||
Amortization |
18,848 |
— |
18,848 |
— |
3,884 |
3,884 |
|||||||||||||
Inventory related charges(7) |
5,697 |
— |
5,697 |
— |
— |
— |
|||||||||||||
Restructuring and asset-related |
— |
— |
— |
— |
1,818 |
1,818 |
|||||||||||||
Adjusted cost of goods sold (Non- |
$ |
16,573 |
$ |
— |
$ |
16,573 |
$ |
— |
$ |
17,703 |
$ |
17,703 |
|||||||
Specialty |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Cost of goods sold |
$ |
103,592 |
$ |
26,731 |
$ |
130,323 |
$ |
— |
$ |
98,650 |
$ |
98,650 |
|||||||
Adjusted to deduct: |
|||||||||||||||||||
Amortization |
49,047 |
6,112 |
55,159 |
— |
15,457 |
15,457 |
|||||||||||||
Inventory related charges(7) |
8,607 |
— |
8,607 |
— |
— |
— |
|||||||||||||
Restructuring and asset-related |
— |
— |
— |
— |
9,081 |
9,081 |
|||||||||||||
Adjusted cost of goods sold (Non- |
$ |
45,938 |
$ |
20,619 |
$ |
66,557 |
$ |
— |
$ |
74,112 |
$ |
74,112 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Reconciliation of Generics Operating (Loss) Income to Generics Combined Adjusted Operating Income |
|||||||||||||||||||
Generics |
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Operating income (loss) |
$ |
43,070 |
$ |
— |
$ |
43,070 |
$ |
101,825 |
$ |
(212,839) |
$ |
(111,014) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Acquisition and site closure |
20,905 |
— |
20,905 |
— |
— |
— |
|||||||||||||
Amortization |
10,030 |
— |
10,030 |
923 |
13,075 |
13,998 |
|||||||||||||
Inventory related charges(7) |
3,620 |
— |
3,620 |
3,400 |
6,224 |
9,624 |
|||||||||||||
Stock-based compensation expense |
1,926 |
— |
1,926 |
— |
829 |
829 |
|||||||||||||
Asset impairment charges(9) |
39,119 |
39,119 |
— |
236,269 |
236,269 |
||||||||||||||
Restructuring and asset-related |
12,031 |
— |
12,031 |
— |
10,996 |
10,996 |
|||||||||||||
Litigation, settlements and related |
(97) |
— |
(97) |
— |
— |
— |
|||||||||||||
Amortization of upfront payment (11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
R&D milestone payment |
5,300 |
— |
5,300 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(38,123) |
(38,123) |
|||||||||||||
Other |
3,839 |
— |
3,839 |
— |
— |
— |
|||||||||||||
Adjusted operating income (Non- |
$ |
150,166 |
$ |
— |
$ |
150,166 |
$ |
106,148 |
$ |
16,431 |
$ |
122,579 |
|||||||
Generics |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Operating income |
$ |
162,901 |
$ |
(130,640) |
$ |
32,261 |
$ |
307,502 |
$ |
(265,094) |
$ |
42,408 |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Acquisition and site closure |
150,348 |
— |
150,348 |
— |
9,314 |
9,314 |
|||||||||||||
Amortization |
23,940 |
13,823 |
37,763 |
3,974 |
53,039 |
57,013 |
|||||||||||||
Inventory related charges(7) |
45,615 |
9,894 |
55,509 |
22,682 |
26,702 |
49,384 |
|||||||||||||
Stock-based compensation expense |
3,348 |
— |
3,348 |
— |
829 |
829 |
|||||||||||||
Asset impairment charges(9) |
47,660 |
53 |
47,713 |
— |
298,053 |
298,053 |
|||||||||||||
Restructuring and asset-related |
33,943 |
— |
33,943 |
— |
28,911 |
28,911 |
|||||||||||||
Litigation, settlements and related |
(97) |
84,597 |
84,500 |
— |
— |
— |
|||||||||||||
Amortization of upfront payment (11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Royalty expense |
— |
— |
— |
8,684 |
— |
8,684 |
|||||||||||||
R&D milestone payment |
8,000 |
— |
8,000 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(31,048) |
(31,048) |
|||||||||||||
Other |
3,439 |
— |
3,439 |
— |
2,535 |
2,535 |
|||||||||||||
Adjusted operating income (Non- |
$ |
489,520 |
$ |
(22,273) |
$ |
467,247 |
$ |
342,842 |
$ |
123,241 |
$ |
466,083 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Reconciliation of Specialty Operating (Loss) Income to Specialty Combined Adjusted Operating Income |
|||||||||||||||||||
Specialty |
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Operating income (loss) |
$ |
24,010 |
$ |
— |
$ |
24,010 |
$ |
— |
$ |
(42,806) |
$ |
(42,806) |
|||||||
Adjusted to add: |
|||||||||||||||||||
Amortization |
18,848 |
— |
18,848 |
— |
3,884 |
3,884 |
|||||||||||||
Inventory related charges(7) |
5,697 |
— |
5,697 |
— |
— |
— |
|||||||||||||
Acquisition and site closure |
189 |
— |
189 |
— |
— |
— |
|||||||||||||
Stock-based compensation expense |
11 |
— |
11 |
— |
1,971 |
1,971 |
|||||||||||||
Asset impairment charges(9) |
— |
— |
— |
— |
74,128 |
74,128 |
|||||||||||||
Restructuring and asset-related |
1,682 |
— |
1,682 |
— |
1,818 |
1,818 |
|||||||||||||
Litigation, settlements and related |
— |
— |
— |
— |
— |
— |
|||||||||||||
Other |
163 |
— |
163 |
— |
— |
— |
|||||||||||||
Adjusted operating income (Non- |
$ |
50,600 |
$ |
— |
$ |
50,600 |
$ |
— |
$ |
38,995 |
$ |
38,995 |
|||||||
Specialty |
Year ended December 31, 2018 |
Year ended December 31, 2017 |
|||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Operating income |
$ |
55,560 |
$ |
36,945 |
$ |
92,505 |
$ |
— |
$ |
146 |
$ |
146 |
|||||||
Adjusted to add: |
|||||||||||||||||||
Amortization |
49,047 |
6,112 |
55,159 |
— |
15,457 |
15,457 |
|||||||||||||
Inventory related charges(7) |
8,607 |
— |
8,607 |
— |
— |
— |
|||||||||||||
Acquisition and site closure |
189 |
— |
189 |
— |
— |
— |
|||||||||||||
Stock-based compensation expense |
11 |
— |
11 |
— |
1,971 |
1,971 |
|||||||||||||
Asset impairment charges(9) |
— |
— |
— |
— |
74,128 |
74,128 |
|||||||||||||
Restructuring and asset-related |
4,076 |
— |
4,076 |
— |
9,996 |
9,996 |
|||||||||||||
Litigation, settlements and related |
— |
940 |
940 |
— |
— |
— |
|||||||||||||
Other |
637 |
— |
637 |
— |
— |
— |
|||||||||||||
Adjusted operating income (Non- |
$ |
118,127 |
$ |
43,997 |
$ |
162,124 |
$ |
— |
$ |
101,698 |
$ |
101,698 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands, except per share amounts) |
|||||||||||||||||||
Reconciliation of Net (Loss) Income to Combined Adjusted Net Income and Calculation of Adjusted Diluted EPS |
|||||||||||||||||||
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net (loss) income |
$ |
(20,330) |
$ |
— |
$ |
(20,330) |
$ |
62,194 |
$ |
(297,178) |
$ |
(234,984) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Non-cash interest |
1,640 |
— |
1,640 |
690 |
6,660 |
7,350 |
|||||||||||||
GAAP Income tax expense (benefit) |
5,524 |
— |
5,524 |
(119) |
(9,010) |
(9,129) |
|||||||||||||
Amortization |
28,878 |
— |
28,878 |
923 |
16,959 |
17,882 |
|||||||||||||
Stock-based compensation expense |
3,606 |
— |
3,606 |
— |
6,586 |
6,586 |
|||||||||||||
Acquisition and site closure |
28,966 |
— |
28,966 |
7,050 |
8,061 |
15,111 |
|||||||||||||
Restructuring and asset-related |
14,104 |
— |
14,104 |
245 |
13,483 |
13,728 |
|||||||||||||
Inventory related charges(7) |
9,317 |
— |
9,317 |
3,400 |
6,224 |
9,624 |
|||||||||||||
Litigation, settlements and related |
(497) |
— |
(497) |
— |
642 |
642 |
|||||||||||||
Gain on sale of assets |
— |
— |
— |
— |
(656) |
(656) |
|||||||||||||
Asset impairment charges(9) |
39,119 |
— |
39,119 |
— |
310,397 |
310,397 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Foreign exchange gain |
(2,817) |
— |
(2,817) |
(3,341) |
— |
(3,341) |
|||||||||||||
Loss on sale of international |
146 |
— |
146 |
352 |
— |
352 |
|||||||||||||
R&D milestone payments |
5,300 |
— |
5,300 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(38,123) |
(38,123) |
|||||||||||||
Other |
3,412 |
— |
3,412 |
— |
1,328 |
1,328 |
|||||||||||||
Income tax at 21% |
(26,626) |
— |
(26,626) |
(14,993) |
(5,328) |
(20,321) |
|||||||||||||
Net income attributable to NCI not
|
(189) |
— |
(189) |
— |
— |
— |
|||||||||||||
Adjusted net income (Non-GAAP) |
$ |
99,976 |
$ |
— |
$ |
99,976 |
$ |
56,401 |
$ |
20,045 |
$ |
76,446 |
|||||||
Adjusted diluted EPS (Non-GAAP(13) |
$ |
0.33 |
(13) Utilizes weighted diluted average shares outstanding of 299,345, 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) Income to Combined Adjusted Net Income and Calculation of Adjusted Diluted EPS |
|||||||||||||||||||
Year ended December 31, 2018 |
Year ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net (loss) income |
$ |
(201,303) |
$ |
(150,155) |
$ |
(351,458) |
$ |
169,325 |
$ |
(451,693) |
$ |
(282,368) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Non-cash interest |
5,859 |
9,413 |
15,272 |
4,585 |
25,949 |
30,534 |
|||||||||||||
GAAP Income tax (benefit) expense |
(1,419) |
(6,273) |
(7,692) |
1,998 |
18,326 |
20,324 |
|||||||||||||
Amortization |
72,987 |
19,935 |
92,922 |
3,974 |
68,496 |
72,470 |
|||||||||||||
Stock-based compensation expense |
8,840 |
4,816 |
13,656 |
— |
26,258 |
26,258 |
|||||||||||||
Acquisition and site closure |
264,424 |
9,829 |
274,253 |
9,403 |
20,411 |
29,814 |
|||||||||||||
Restructuring and asset-related |
56,413 |
5,123 |
61,536 |
245 |
40,248 |
40,493 |
|||||||||||||
Loss on extinguishment of debt |
19,667 |
— |
19,667 |
2,531 |
1,215 |
3,746 |
|||||||||||||
Inventory related charges(7) |
54,222 |
9,894 |
64,116 |
22,682 |
26,702 |
49,384 |
|||||||||||||
Litigation, settlements and related |
2,092 |
90,099 |
92,191 |
— |
8,351 |
8,351 |
|||||||||||||
Loss (gain) on sale of assets |
878 |
— |
878 |
— |
(17,236) |
(17,236) |
|||||||||||||
Asset impairment charges(9) |
47,660 |
53 |
47,713 |
— |
372,181 |
372,181 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Royalty expense |
— |
— |
— |
8,684 |
— |
8,684 |
|||||||||||||
Foreign exchange loss (gain) |
19,701 |
(921) |
18,780 |
(29,092) |
— |
(29,092) |
|||||||||||||
Loss on sale of international |
2,958 |
— |
2,958 |
29,232 |
— |
29,232 |
|||||||||||||
R&D milestone payments |
8,000 |
— |
8,000 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(31,048) |
(31,048) |
|||||||||||||
Other |
7,095 |
1,953 |
9,048 |
4,158 |
6,534 |
10,692 |
|||||||||||||
Income tax at 21% |
(79,484) |
1,309 |
(78,175) |
(47,822) |
(24,086) |
(71,908) |
|||||||||||||
Net income attributable to NCI not
|
(386) |
— |
(386) |
— |
— |
— |
|||||||||||||
Adjusted net income (Non-GAAP) |
$ |
298,627 |
$ |
(4,925) |
$ |
293,702 |
$ |
179,903 |
$ |
90,608 |
$ |
270,511 |
|||||||
Adjusted diluted EPS (Non-GAAP(14) |
$ |
0.98 |
(14) Utilizes weighted diluted average shares outstanding of 299,328, 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 Income to Combined Adjusted Net Income and Calculation of Adjusted Diluted EPS |
|||||||||
The following reconciliation for the three months ended September 30, 2018 has been provided for sequential comparison. |
|||||||||
Three months ended September 30, 2018 |
|||||||||
Add: |
(Non-GAAP) |
||||||||
Actual |
Impax/ |
Combined |
|||||||
Net income |
$ |
17,465 |
$ |
— |
$ |
17,465 |
|||
Adjusted to add (deduct): |
|||||||||
Non-cash interest |
1,452 |
— |
1,452 |
||||||
GAAP Income tax expense |
5,109 |
— |
5,109 |
||||||
Amortization |
25,655 |
— |
25,655 |
||||||
Stock-based compensation expense |
3,590 |
— |
3,590 |
||||||
Acquisition and site closure expenses(8) |
12,430 |
— |
12,430 |
||||||
Restructuring and asset-related charges(10) |
(2,156) |
— |
(2,156) |
||||||
Inventory related charges(7) |
17,422 |
— |
17,422 |
||||||
Litigation, settlements and related charges |
2,589 |
— |
2,589 |
||||||
Asset impairment charges(9) |
8,541 |
— |
8,541 |
||||||
Foreign exchange loss |
5,137 |
— |
5,137 |
||||||
Loss on sale of international operations |
2,812 |
— |
2,812 |
||||||
Other |
3,947 |
— |
3,947 |
||||||
Income tax at 21% |
(21,839) |
— |
(21,839) |
||||||
Net income attributable to NCI not associated with our Class B shares |
(53) |
— |
(53) |
||||||
Adjusted net income (Non-GAAP) |
$ |
82,101 |
$ |
— |
$ |
82,101 |
|||
Adjusted diluted EPS (Non-GAAP)(15) |
$ |
0.27 |
(15) Utilizes weighted diluted average shares outstanding of 299,483, which consists of Class A, Class B & Class B-1 shares. |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited, In thousands) |
|||||||||||||||||||
Reconciliation of Net (Loss) Income to EBITDA and Combined Adjusted EBITDA |
|||||||||||||||||||
Three months ended December 31, 2018 |
Three months ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net (loss) income |
$ |
(20,330) |
$ |
— |
$ |
(20,330) |
$ |
62,194 |
$ |
(297,178) |
$ |
(234,984) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Interest expense, net |
42,880 |
— |
42,880 |
19,956 |
13,672 |
33,628 |
|||||||||||||
Income tax expense (benefit) |
5,524 |
— |
5,524 |
(119) |
(9,010) |
(9,129) |
|||||||||||||
Depreciation and amortization |
47,494 |
— |
47,494 |
12,842 |
21,620 |
34,462 |
|||||||||||||
EBITDA (Non-GAAP) |
$ |
75,568 |
$ |
— |
$ |
75,568 |
$ |
94,873 |
$ |
(270,896) |
$ |
(176,023) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Stock-based compensation expense |
$ |
3,606 |
$ |
— |
$ |
3,606 |
$ |
— |
$ |
6,586 |
$ |
6,586 |
|||||||
Acquisition and site closure |
28,966 |
— |
28,966 |
7,050 |
8,061 |
15,111 |
|||||||||||||
Restructuring and asset-related |
14,104 |
— |
14,104 |
245 |
13,483 |
13,728 |
|||||||||||||
Inventory related charges(7) |
9,317 |
— |
9,317 |
3,400 |
6,224 |
9,624 |
|||||||||||||
Litigation, settlements and related |
(497) |
— |
(497) |
— |
642 |
642 |
|||||||||||||
Gain on sale of assets |
— |
— |
— |
— |
(656) |
(656) |
|||||||||||||
Asset impairment charges(9) |
39,119 |
— |
39,119 |
— |
310,397 |
310,397 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Foreign exchange gain |
(2,817) |
— |
(2,817) |
(3,341) |
— |
(3,341) |
|||||||||||||
Loss on sale of international |
146 |
— |
146 |
352 |
— |
352 |
|||||||||||||
R&D milestone payments |
5,300 |
— |
5,300 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(38,123) |
(38,123) |
|||||||||||||
Other |
3,412 |
— |
3,412 |
— |
1,328 |
1,328 |
|||||||||||||
Adjusted EBITDA (Non-GAAP) |
$ |
186,647 |
$ |
— |
$ |
186,647 |
$ |
102,579 |
$ |
37,046 |
$ |
139,625 |
Amneal Pharmaceuticals, Inc. |
|||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||
(Unaudited; In thousands) |
|||||||||||||||||||
Reconciliation of Net (Loss) Income to EBITDA and Combined Adjusted EDITBA |
|||||||||||||||||||
Year ended December 31, 2018 |
Year ended December 31, 2017 |
||||||||||||||||||
Add: |
(Non-GAAP) |
Add: |
(Non-GAAP) |
||||||||||||||||
Actual |
Impax/ |
Combined |
Actual |
Impax/ |
Combined |
||||||||||||||
Net (loss) income |
$ |
(201,303) |
$ |
(150,155) |
$ |
(351,458) |
$ |
169,325 |
$ |
(451,693) |
$ |
(282,368) |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Interest expense, net |
143,571 |
18,231 |
161,802 |
71,061 |
53,412 |
124,473 |
|||||||||||||
Income tax expense (benefit) |
(1,419) |
(6,273) |
(7,692) |
1,998 |
18,326 |
20,324 |
|||||||||||||
Depreciation and amortization |
137,403 |
24,902 |
162,305 |
45,936 |
93,854 |
139,790 |
|||||||||||||
EBITDA (Non-GAAP) |
$ |
78,252 |
$ |
(113,295) |
$ |
(35,043) |
$ |
288,320 |
$ |
(286,101) |
$ |
2,219 |
|||||||
Adjusted to add (deduct): |
|||||||||||||||||||
Stock-based compensation expense |
$ |
8,840 |
$ |
4,816 |
$ |
13,656 |
$ |
— |
$ |
26,258 |
$ |
26,258 |
|||||||
Acquisition and site closure |
264,424 |
9,829 |
274,253 |
9,403 |
20,411 |
29,814 |
|||||||||||||
Restructuring and asset-related |
56,413 |
5,123 |
61,536 |
245 |
40,248 |
40,493 |
|||||||||||||
Loss on extinguishment of debt |
19,667 |
— |
19,667 |
2,531 |
1,215 |
3,746 |
|||||||||||||
Inventory related charges(7) |
54,222 |
9,894 |
64,116 |
22,682 |
26,702 |
49,384 |
|||||||||||||
Litigation, settlements and related |
2,092 |
90,099 |
92,191 |
— |
8,351 |
8,351 |
|||||||||||||
Loss (gain) on sale of assets |
878 |
— |
878 |
— |
(17,236) |
(17,236) |
|||||||||||||
Asset impairment charges(9) |
47,660 |
53 |
47,713 |
— |
372,181 |
372,181 |
|||||||||||||
Amortization of upfront payment(11) |
10,423 |
— |
10,423 |
— |
— |
— |
|||||||||||||
Royalty expense |
— |
— |
— |
8,684 |
— |
8,684 |
|||||||||||||
Foreign exchange loss (gain) |
19,701 |
(921) |
18,780 |
(29,092) |
— |
(29,092) |
|||||||||||||
Loss on sale of international |
2,958 |
— |
2,958 |
29,232 |
— |
29,232 |
|||||||||||||
R&D milestone payments |
8,000 |
— |
8,000 |
— |
— |
— |
|||||||||||||
Change in fair value of contingent |
— |
— |
— |
— |
(31,048) |
(31,048) |
|||||||||||||
Other |
4,285 |
867 |
5,152 |
4,158 |
6,534 |
10,692 |
|||||||||||||
Adjusted EBITDA (Non-GAAP) |
$ |
577,815 |
$ |
6,465 |
$ |
584,280 |
$ |
336,163 |
$ |
167,515 |
$ |
503,678 |
Amneal Pharmaceuticals, Inc. |
|||||||||
Non-GAAP Reconciliations |
|||||||||
(Unaudited; In thousands) |
|||||||||
Reconciliation of Net Income to EBITDA and Combined Adjusted EDITBA |
|||||||||
The following reconciliation for the three months ended September 30, 2018 has been provided for sequential comparison. |
|||||||||
Three months ended September 30, 2018 |
|||||||||
Add: |
(Non-GAAP) |
||||||||
Actual |
Impax/ |
Combined |
|||||||
Net income |
$ |
17,465 |
$ |
— |
$ |
17,465 |
|||
Adjusted to add (deduct): |
|||||||||
Interest expense, net |
43,018 |
— |
43,018 |
||||||
Income tax expense |
5,109 |
— |
5,109 |
||||||
Depreciation and amortization |
43,013 |
— |
43,013 |
||||||
EBITDA (Non-GAAP) |
$ |
108,605 |
$ |
— |
$ |
108,605 |
|||
Adjusted to add (deduct): |
|||||||||
Stock-based compensation expense |
$ |
3,590 |
$ |
— |
3,590 |
||||
Acquisition and site closure expenses(8) |
12,430 |
— |
12,430 |
||||||
Restructuring and asset-related charges(10) |
(2,156) |
— |
(2,156) |
||||||
Inventory related charges(7) |
17,422 |
— |
17,422 |
||||||
Litigation, settlements and related charges |
2,589 |
— |
2,589 |
||||||
Asset impairment charges(9) |
8,541 |
— |
8,541 |
||||||
Foreign exchange loss |
5,137 |
— |
5,137 |
||||||
Loss on sale of international operations |
2,812 |
— |
2,812 |
||||||
Other |
3,947 |
— |
3,947 |
||||||
Adjusted EBITDA (Non-GAAP) |
$ |
162,917 |
$ |
— |
$ |
162,917 |
(7) Inventory related charges primarily represents the amortization of the Impax inventory step-up to fair value in purchase accounting and write-offs of pre-launch inventory quantities. |
(8) Acquisition and site closure expenses includes costs related to (i) accelerated vesting of Amneal profit participation units, (ii) special bonuses associated with the combination and integration of Impax, (iii) plant closure and redundant employee costs and (iv) third party costs associated with the combination of Impax and related integration including legal, investment banking, accounting and information technology. |
(9) Asset impairment charges for the year ended December 31, 2018 are primarily associated with the write-off of leasehold improvements in connection with the closing of our Hayward, CA facility. Asset impairment charges for the year ended December 31, 2017 are primarily associated with a write-off of in process research and development product rights and impairment charges primarily related to two products acquired in the Teva Transaction as well as fixed asset impairment charges primarily related to the Taiwan and Middlesex, New Jersey facilities. |
(10) Restructuring and asset related 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) Change in fair value of contingent consideration represents the reduction in contingent consideration liability related to a product acquired in the Teva Transaction. Based on timing and probability of product launch, and number of competitors expected in the market, the Company concluded that fair value of the contingent consideration was zero at December 31, 2017. |
CONTACT:
Mark Donohue
(908) 409-6718
SOURCE Amneal Pharmaceuticals, Inc.
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