Le Lézard
Classified in: Health, Business, Covid-19 virus
Subjects: ERN, ERP

LANNETT REPORTS FISCAL 2022 FOURTH-QUARTER, FULL-YEAR FINANCIAL RESULTS


Q4 Business and Financial Highlights:

Pipeline Updates:

TREVOSE, Pa., Aug. 24, 2022 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2022 fourth quarter and full year ended June 30, 2022. 

"For the quarter, net sales were in line with our expectations, adjusted EBITDA was at the top end of our guidance range and adjusted gross margin was better than anticipated, rebounding from our adjusted gross margin in recent quarters," said Tim Crew, chief executive officer of Lannett. "Our cash position was approximately $88 million at June 30, 2022; we continue to expect to receive sizable income tax refunds within the next couple of months.

"With regard to our pipeline, we have added several near-term product opportunities, of which a few have the potential to be meaningful contributors to our financial results, especially in the second half of the current fiscal year. Our durable large market partnered product opportunities continue to progress and achieve notable development milestones (details discussed below). As part of our pre-launch activities for biosimilar insulin, we have initiated preliminary discussions with a number of states and other organizations around initiatives and programs to make insulin more accessible and affordable to millions of patients. We welcome these initiatives and believe our significant scale and competitive cost structure will help position us to support and prosper from these initiatives on affordable insulin.

"Looking ahead, our efforts will be focused on commercializing recently added product opportunities, which we believe will help increase our full-year gross margin in fiscal 2023. At the same time, we intend to maintain operating discipline to reduce expenses and make the most of our cash resources, all while working to further develop with our partners our high value pipeline of insulin and respiratory products, expand our existing strategic alliances and form new ones."

Key Pipeline Update Subject to FDA Approval

Restructuring, Cost Reduction Initiatives

The major elements of the company's restructuring plan announced in November 2021 have been completed. The transfer of certain products from the company's recently sold Carmel plant to its main plant is progressing on schedule and the manufacturing of Lannett labeled product at that site will largely be completed by the end of this calendar year.

Fourth-Quarter Financial Results: Fiscal 2022 vs Fiscal 2021

GAAP basis:

Non-GAAP basis:

Full-Year Financial Results: Fiscal 2022 vs Fiscal 2021

GAAP basis:

Non-GAAP basis:

Guidance for Fiscal 2023

Based on its current outlook, the company provided guidance for fiscal year 2023, as follows:


GAAP

Adjusted*

Net sales

$275 million to $300 million

$275 million to $300 million

Gross margin %

Approximately 13% to 15%

Approximately 15% to 17%

R&D expense

$23 million to $25 million

$23 million to $25 million

SG&A expense

$64 million to $67 million

$56 million to $59 million

Interest and other

Approximately $60 million

Approximately $53 million

Effective tax rate

Approximately 0% to 4%

Approximately 23.5% to 24.5%

(Negative) Adjusted EBITDA

N/A

($12 million) to $0 million

Capital expenditures

Approximately $8 million to $12 million

Approximately $8 million to $12 million

*A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the financial tables following this release.

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 fourth quarter and full year ended June 30, 2022. The conference call will be available to interested parties by dialing 877-407-9716 from the U.S. or Canada, or 201-493-6779 from international locations. 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 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 and the other non-GAAP financial measures presented in this release 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 in the financial tables following 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.

Lantus® is a registered trademark of Sanofi S.A., and ADVAIR DISKUS® and Flovent® Diskus® are registered trademarks of GlaxoSmithKline. Spiriva® Handihaler® is a registered trademark of Boehringer Ingelheim.

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.

Cautionary Statement Regarding Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and can be identified by the words "estimate," "expect," "believe," "target," "anticipate" and other similar expressions. Any such statements, including, but not limited to, statements regarding the company's competitive environment and other market conditions; regulatory and operational developments; the timing related to commencing and successfully completing the pivotal clinical trials, filing the Biologics License Applications, and successfully launching any products, including biosimilar insulin glargine and biosimilar insulin aspart; the potential material impact of COVID-19 on future financial results; the timing of the company's restructuring plan and its ability to realize estimated cost reductions and other benefits therefrom; the company's financial status and performance; and the company's ability to achieve the financial metrics stated in the company's guidance for fiscal 2023, 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 beyond the company's control. Such factors 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 the company'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 latest Form 10-K, subsequent Form 8-Ks and 10-Qs and other documents filed with the Securities and Exchange Commission from time to time. You should not place undue reliance upon any such forward-looking statements, which represent the company's judgment as of the date of this release. To the fullest extent permitted by law, the company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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)







June 30, 2022


June 30, 2021








ASSETS






Current assets:





Cash and cash equivalents

$                                  87,854


$                    93,286

Accounts receivable, net

56,241


98,834

Inventories


95,158


109,545

Income taxes receivable

36,793


35,050

Assets held for sale


-


2,678

Other current assets


14,070


14,170

Total current assets

290,116


353,563

Property, plant and equipment, net

133,178


166,674

Intangible assets, net


32,179


137,835

Operating lease right-of-use asset 

9,646


10,559

Other assets


19,316


15,106

TOTAL ASSETS


$                               484,435


$                  683,737








LIABILITIES





Current liabilities:





Accounts payable


$                                  29,737


$                    29,585

Total other expense, net

23,667


13,077

Accrued payroll and payroll-related expenses

8,342


10,680

Rebates payable


21,568


19,025

Royalties payable


5,677


13,779

Restructuring liability


490


8

Current operating lease liabilities

2,064


2,045

Other current liabilities

13,395


2,270

Total current liabilities

104,940


90,469

Long-term debt, net


614,948


590,683

Long-term operating lease liabilities

9,994


11,047

Other liabilities


5,616


19,009

TOTAL LIABILITIES


735,498


711,208








STOCKHOLDERS' DEFICIT




Common stock ($0.001 par value, 100,000,000 shares authorized; 42,269,137 and 40,913,148 shares issued;




40,704,572 and 39,576,606 shares outstanding at June 30, 2022 and June 30, 2021, respectively)

42


41

Additional paid-in capital

363,957


355,239

Accumulated deficit


(596,386)


(364,766)

Accumulated other comprehensive loss

(411)


(548)

Treasury stock (1,564,565 and 1,336,542 shares at June 30, 2022 and June 30, 2021, respectively)

(18,265)


(17,437)

Total stockholders' deficit

(251,063)


(27,471)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$                               484,435


$                  683,737








 

 












LANNETT COMPANY, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



(In thousands, except share and per share data)
















Three months ended 


Twelve months ended 





June 30,


June 30,





2022


2021


2022


2021














Net sales


$               74,189


$         106,009


$             340,579


$         478,778



Cost of sales 


63,826


79,597


294,482


378,335



Amortization of intangibles


2,506


3,753


12,931


24,850



Gross profit


7,857


22,659


33,166


75,593



Operating expenses:











Research and development expenses


6,044


6,017


22,362


24,173



Selling, general and administrative expenses


25,755


21,576


81,023


68,078



Restructuring expenses


104


-


2,777


4,043



Asset impairment charges


53,916


18,550


103,277


216,550



Total operating expenses


85,819


46,143


209,439


312,844



Operating income (loss)


(77,962)


(23,484)


(176,273)


(237,251)



Other income (expense), net:











Loss on extinguishment of debt


-


(10,341)


-


(10,341)



Investment income


36


68


150


236



Interest expense


(14,808)


(13,217)


(57,979)


(53,830)



Other


(74)


(1,687)


178


(1,664)



Total other expense, net


(14,846)


(25,177)


(57,651)


(65,599)



Loss before income tax


(92,808)


(48,661)


(233,924)


(302,850)



Income tax expense (benefit)


487


129,225


(2,304)


60,625



Net loss


$             (93,295)


$       (177,886)


$           (231,620)


$        (363,475)














Loss per common share (1):











     Basic


$                  (2.30)


$             (4.50)


$                  (5.74)


$              (9.23)



     Diluted


$                  (2.30)


$             (4.50)


$                  (5.74)


$              (9.23)














Weighted average common shares outstanding (1):











     Basic


40,619,081


39,544,909


40,350,522


39,391,589



     Diluted


40,619,081


39,544,909


40,350,522


39,391,589














(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)

















Twelve months ended June 30, 2022


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, net

Loss before income tax

Income tax benefit

Net loss

Diluted loss per share (l)




GAAP Reported

$           340,579

$           294,482

$             12,931

$             33,166

10 %

$             22,362

$             81,023

$             2,777

$           103,277

$         (176,273)

$           (57,651)

$         (233,924)

$              (2,304)

$         (231,620)

$                (5.74)

Adjustments:
















Amortization of intangibles (a)

-

-

(12,931)

12,931


-

-

-

-

12,931

-

12,931

-

12,931


Cody API business (b)

-

(141)

-

141


(10)

(265)

-

-

416

-

416

-

416


Depreciation on capitalized software costs (c)

-

-

-

-


-

(4,204)

-

-

4,204

-

4,204

-

4,204


Restructuring expenses (d)

-

-

-

-


-

-

(2,777)

-

2,777

-

2,777

-

2,777


 Distribution agreement renewal costs (e)

-

-

-

-


-

(219)

-

-

219

-

219

-

219


Asset impairment charges (f)

-

-

-

-


-

-

-

(103,277)

103,277

-

103,277

-

103,277


Write-downs for excess and obsolete inventory (g)

-

(3,244)

-

3,244


-

-

-

-

3,244

-

3,244

-

3,244


Reimbursement of legal costs (h)

-

-

-

-


-

(19,833)

-

-

19,833

-

19,833

-

19,833


Non-cash interest (i)

-

-

-

-


-

-

-

-

-

6,246

6,246

-

6,246


Other (j)

-

(509)

-

509


-

(1,139)

-

-

1,648

(776)

872

-

872


Tax adjustments (k)

-

-

-

-


-

-

-

-

-

-

-

(16,554)

16,554


















Non-GAAP Adjusted

$             340,579

$             290,588

$                       -

$               49,991

15 %

$               22,352

$               55,363

$                    -

$                       -

$             (27,724)

$             (52,181)

$             (79,905)

$             (18,858)

$             (61,047)

$                 (1.51)

(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, the facility and certain equipment at Silarx in Carmel, NY, and the other product rights intangible assets, which include various distribution and supply agreements



(g)

To exclude write-downs for excess and obsolete inventory related to certain product lines discontinued as a result of the sale of the Silarx facility









(h)

To exclude the reimbursement of legal and settlement costs associated with a distribution agreement












(i)

To exclude non-cash interest expense associated with debt issuance costs













(j)

To primarily exclude one-time employee retention awards, separation costs related to the Company's former Chief Information Officer and a gain on the sale of various ANDAs to Chartwell, Inc. 






(k)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates












(l)

The weighted average share number for the twelve months ended June 30, 2022 is 40,350,522 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)

















Twelve months ended June 30, 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 income
(loss)

Other expense, net

Loss before income tax

Income tax expense

Net loss

Diluted loss per share (n)




GAAP Reported

$         478,778

$         378,335

$            24,850

$       75,593

16 %

$            24,173

$            68,078

$              4,043

$         216,550

$   (237,251)

$          (65,599)

$       (302,850)

$            60,625

$   (363,475)

$              (9.23)

Adjustments:
















Amortization of intangibles (a)

-

-

(24,850)

24,850


-

-

-

-

24,850

-

24,850

-

24,850


Cody API business (b)

-

(270)

-

270


(5)

(486)

-

-

761

-

761

-

761


Depreciation on capitalized software costs (c)

-

-

-

-


-

(4,204)

-

-

4,204

-

4,204

-

4,204


Branded prescription drug fee (d)

-

-

-

-


-

(831)

-

-

831

-

831

-

831


Restructuring expenses (e)

-

-

-

-


-

-

(4,043)

-

4,043

-

4,043

-

4,043


Asset impairment charges (f)

-

-

-

-


-

-

-

(216,550)

216,550

-

216,550

-

216,550


Write-downs for excess and obsolete inventory (g)

-

(16,623)

-

16,623


-

-

-

-

16,623

-

16,623

-

16,623


 Distribution agreement renewal costs (h)

-

(4,966)

-

4,966


-

-

-

-

4,966

-

4,966

-

4,966


Loss on extinguishment of debt (i)

-

-

-

-


-

-

-

-

-

10,341

10,341

-

10,341


Debt refinancing costs (j)

-

-

-

-


-

(2,262)

-

-

2,262

-

2,262

-

2,262


Non-cash interest (k)

-

-

-

-


-

-

-

-

-

10,146

10,146

-

10,146


Other (l)

-

-

-

-


-

(5,610)

-

-

5,610

1,500

7,110

-

7,110


Tax adjustments (m)

-

-

-

-


-

-

-

-

-

-

-

(59,763)

59,763


















Non-GAAP Adjusted

$            478,778

$            356,476

$                     -

$       122,302

26 %

$              24,168

$              54,685

$                     -

$                     -

$         43,449

$            (43,612)

$                 (163)

$                   862

$         (1,025)

$               (0.03)

















(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 federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019




(e)

To exclude expenses associated with the 2020 Restructuring Plan












(f)

To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the intangible asset for a distribution and supply agreement with Cediprof, Inc. for the Levothyroxine tablets product


(g)

To exclude write-downs for excess and obsolete inventory related to the discontinuance of certain product lines 









(h)

To exclude the consideration recorded to renew the Company's distribution agreement with Recro Gainesville LLC 









(i)

To exclude the loss on extinguishment of debt related to the retirement of the Term Loan B in April 2021









(j)

To exclude legal and financial advisory costs related to the debt refinancing in April 2021










(k)

To exclude non-cash interest expense associated with debt issuance costs











(l)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement and costs associated with a legal settlement







(m)

To exclude the impact of the full valuation allowance booked against the Company's deferred tax assets as well as the tax effect of the pre-tax adjustments included above at applicable tax rates




(n)

The weighted average share number for the twelve months ended June 30, 2021 is 39,391,589 for GAAP and the 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 June 30, 2022


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, net

Loss before income tax

Income tax expense (benefit)

Net loss

Diluted loss per share (j)




GAAP Reported

$             74,189

$             63,826

$               2,506

$               7,857

11 %

$               6,044

$             25,755

$                104

$             53,916

$           (77,962)

$           (14,846)

$           (92,808)

$                   487

$           (93,295)

$                (2.30)

Adjustments:
















Amortization of intangibles (a)

-

-

(2,506)

2,506


-

-

-

-

2,506

-

2,506

-

2,506


Cody API business (b)

-

(32)

-

32


(4)

24

-

-

12

-

12

-

12


Depreciation on capitalized software costs (c)

-

-

-

-


-

(1,051)

-

-

1,051

-

1,051

-

1,051


Restructuring expenses (d)

-

-

-

-


-

-

(104)

-

104

-

104

-

104


Asset impairment charges (e)

-

-

-

-


-

-

-

(53,916)

53,916

-

53,916

-

53,916


Reimbursement of legal costs (f)

-

-

-

-


-

(11,618)

-

-

11,618

-

11,618

-

11,618


Non-cash interest (g)

-

-

-

-


-

-

-

-

-

1,693

1,693

-

1,693


Other (h)

-

(22)

-

22


3

(260)

-

-

279

(900)

(621)

-

(621)


Tax adjustments (i)

-

-

-

-


-

-

-

-

-

-

-

(5,196)

5,196


















Non-GAAP Adjusted

$               74,189

$               63,772

$                       -

$               10,417

14 %

$                 6,043

$               12,850

$                    -

$                       -

$               (8,476)

$             (14,053)

$             (22,529)

$               (4,709)

$             (17,820)

$                 (0.44)















(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 other product rights intangible assets, which include various distribution and supply agreements


(f)

To exclude the reimbursement of legal and settlement costs associated with a distribution agreement








(g)

To exclude non-cash interest expense associated with debt issuance costs









(h)

To primarily exclude one-time employee retention awards and a gain on the sale of various ANDAs to Chartwell, Inc. 







(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 June 30, 2022 is 40,619,081 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 June 30, 2021


Net sales

Cost of sales

Amortization of intangibles

Gross Profit

Gross Margin %

R&D
expenses

SG&A
expenses

Asset impairment charges

Operating income (loss)

Other expense, net

Loss before income tax

Income tax expense

Net loss

Diluted loss per share (k)




GAAP Reported

$           106,009

$             79,597

$               3,753

$         22,659

21 %

$               6,017

$             21,576

$          18,550

$       (23,484)

$           (25,177)

$          (48,661)

$           129,225

$     (177,886)

$             (4.50)

Adjustments:















Amortization of intangibles (a)

-

-

(3,753)

3,753


-

-

-

3,753

-

3,753

-

3,753


Cody API business (b)

-

(21)

-

21


-

(13)

-

34

-

34

-

34


Depreciation on capitalized software costs (c)

-

-

-

-


-

(1,051)

-

1,051

-

1,051

-

1,051


Branded prescription drug fee (d)

-

-

-

-


-

(831)

-

831

-

831

-

831


Asset impairment charges (e)

-

-

-

-


-

-

(18,550)

18,550

-

18,550

-

18,550


Loss on extinguishment of debt (f)

-

-

-

-


-

-

-

-

10,341

10,341

-

10,341


Debt refinancing costs (g)

-

-

-

-


-

(2,262)

-

2,262

-

2,262

-

2,262


Non-cash interest (h)

-

-

-

-


-

-

-

-

1,073

1,073

-

1,073


Other (i)

-

-

-

-


-

(1,915)

-

1,915

1,500

3,415

-

3,415


Tax adjustments (j)

-

-

-

-


-

-

-

-

-

-

(129,139)

129,139

















Non-GAAP Adjusted

$             106,009

$               79,576

$                       -

$           26,433

25 %

$                 6,017

$               15,504

$                    -

$             4,912

$             (12,263)

$              (7,351)

$                      86

$           (7,437)

$               (0.19)















(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 federally mandated branded prescription drug fee related to Levothyroxine sold under the JSP agreement, which has not been sold since fiscal year ended June 30, 2019



(e)

To exclude asset impairment charges primarily related to its intangible asset for a distribution and supply agreement with Cediprof, Inc. for the Levothyroxine tablets product



(f)

To exclude the loss on extinguishment of debt related to the retirement of the Term Loan B in April 2021







(g)

To exclude legal and financial advisory costs related to the debt refinancing in April 2021








(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 and costs associated with a legal settlement





(j)

To exclude the impact of the full valuation allowance booked against the Company's deferred tax assets as well as the tax effect of the pre-tax adjustments included above at applicable tax rates


(k)

The weighted average share number for the three months ended June 30, 2021 is 39,544,909 for GAAP and non-GAAP loss per share calculations. 





 

 


LANNETT COMPANY, INC.


RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)


($ in thousands)








Three months ended 




June 30, 2022






Net loss


$                               (93,295)






Interest expense


14,808


Depreciation and amortization


7,608


Income tax expense


487


EBITDA


(70,392)






Share-based compensation


1,384


Inventory write-down


1,768


Asset impairment charges (a) 


53,916


Investment income


(36)


Other non-operating income


74


Restructuring expenses


104


Reimbursement of legal costs (b)


11,618


Other


291


Adjusted EBITDA (Non-GAAP)


$                                  (1,273)

















(a)

To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the other product rights intangible assets, which include various distribution and supply agreements



(b)

To exclude the reimbursement of legal and settlement costs associated with a distribution agreement



























 

 

LANNETT COMPANY, INC.










RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)










($ in millions)
























Fiscal Year 2023 Guidance
















Non-GAAP












GAAP


Adjustments


Adjusted


























Net sales


 $275 - $300 


-


 $275 - $300 










Gross margin percentage


approx. 13% to 15%


2 %

 (a) 

approx. 15% to 17%










R&D expense


 $23 - $25 


-


 $23 - $25 










SG&A expense


 $64 - $67 


($8)

 (b) 

 $56 - $59 










Interest and other


 approx. $60 


($7)

 (c) 

 approx. $53 










Effective tax rate


 approx. 0% to 4% 


-


 approx. 23.5% to 24.5% 










Adjusted EBITDA


 N/A 


 N/A 


 $(12) - $0 










Capital expenditures


 $8 - $12 


-


 $8 - $12 










































(a) The adjustment primarily reflects amortization of purchased intangible assets 










(b) The adjustment primarily excludes depreciation on previously capitalized software integration costs associated with the KUPI acquisition










(c) The adjustment primarily 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 2023 Guidance


Low


High





Net loss

$               (111.0)


$               (101.0)





Interest expense

60.0


60.0

Depreciation and amortization

24.0


24.0

Income taxes

-


(4.0)

EBITDA

(27.0)


(21.0)





Share-based compensation

6.0


7.0

Inventory write-down

7.0


9.0

Other (a)

2.0


5.0

Adjusted EBITDA (Non-GAAP)

$                 (12.0)


$                       -





(a) To primarily exclude costs related to strategic review initiatives 

 


LANNETT COMPANY, INC.


NET SALES BY MEDICAL INDICATION












Three months ended


Twelve months ended


($ in thousands)

June 30,


June 30,


Medical Indication

2022


2021


2022


2021


Analgesic

$             3,212


$             4,156


$            15,737


$            14,684


Anti-Psychosis

2,634


5,697


11,790


43,720


Cardiovascular

12,055


13,364


45,376


65,987


Central Nervous System

18,023


23,467


78,325


95,115


Endocrinology

4,557


7,519


27,491


27,070


Gastrointestinal

10,054


15,048


51,026


67,540


Infectious Disease

3,536


12,175


28,009


67,761


Migraine

3,683


4,612


16,321


25,554


Respiratory/Allergy/Cough/Cold

1,670


3,017


8,961


9,258


Urinary

1,421


1,401


4,588


5,786


Other

9,125


10,651


41,285


35,312


Contract Manufacturing revenue

4,219


4,902


11,670


20,991


   Net Sales

$            74,189


$          106,009


$          340,579


$          478,778










 

 

 

SOURCE Lannett Company, Inc.


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