Lannett Reports Fiscal 2012 Third Quarter Financial Results
PHILADELPHIA--(BUSINESS WIRE)-- Lannett Company, Inc. (NYSE AMEX: LCI) today reported financial results for the fiscal 2012 third quarter and nine months ended March 31, 2012.
For the third quarter of fiscal 2012, net sales rose 19% to $30.7 million from $25.9 million for the same quarter last year. Gross profit doubled to $10.9 million compared with $5.3 million for the fiscal 2011 third quarter. As a percentage of net sales, gross margin was 35% compared with 20% for the fiscal third quarter of last year. Research and development (R&D) expenses were $2.9 million compared with $1.9 million in the fiscal 2011 third quarter. Selling, general and administrative (SG&A) expenses were $5.6 million, which included $560,000 for expenses related to a marketing agreement the company entered into in connection with promoting one of its branded pain management products, compared with $4.3 million in the same quarter of the prior year. Operating income was $2.4 million compared to an operating loss of $830,000 for the third quarter of fiscal 2011. Net income attributable to Lannett Company (LCI) was $1.7 million, or $0.06 per diluted share, versus a net loss attributable to Lannett Company of $362,000, or $0.01 per share, for the comparable quarter of fiscal 2011.
As expected, our solid financial performance in the fiscal 2012 third quarter showed substantial improvement over the previous two quarters, said Arthur Bedrosian, president and chief executive officer of Lannett. Specifically, our results for the quarter were driven by strong sales of our cardiovascular and pain management products, as well as price increases on certain other products. We also benefited from improved manufacturing efficiencies.
For the first nine months of fiscal 2012, net sales increased to $87.3 million from $81.3 million for the comparable prior year period. Gross profit rose to $26.9 million from $19.6 million for the same period in the prior year. As a percentage of net sales, gross margin was 31% compared with 24% for the prior year nine-month period. R&D expenses were $7.9 million compared with $5.6 million for the first nine months of fiscal 2011. SG&A expenses were $14.8 million compared with $11.8 million in the same period of the prior year. Operating income was $4.3 million compared with $2.3 million for the first nine months of fiscal 2011. Net income attributable to Lannett Company was $2.5 million, or $0.09 per diluted share, compared with $1.6 million, or $0.06 per diluted share, for the first nine months of the prior year.
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 the fiscal 2012 third quarter and nine months ended March 31, 2012. The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 32382885. The conference call will also be available through a live audio Internet broadcast at www.lannett.com. A playback of the call will be archived and accessible at this site for at least three months.
Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the companys financial status and performance and 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.
About Lannett Company, Inc.:
Lannett Company, founded in 1942 and celebrating its 70th anniversary, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit the companys website at www.lannett.com.
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, the expected product approvals, the successful commercialization of recently approved products and products applications pending at the FDA, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannetts 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 companys Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
FINANCIAL TABLES FOLLOW
|LANNETT COMPANY, INC. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)|
Three months ended
|Nine months ended|
|March 31,||March 31,|
|Cost of sales||19,275,765||20,098,084||58,788,334||60,667,878|
|Amortization of intangible assets||470,409||463,769||1,409,015||1,385,892|
|Research and development expenses||2,911,530||1,854,216||7,850,744||5,557,296|
|Selling, general, and administrative expenses||5,616,186||4,279,502||14,779,953||11,755,062|
|Operating income (loss)||2,363,782||(830,068||)||4,303,521||2,251,919|
|Other income (expense):|
|Foreign currency (loss) gain||(3,308||)||1,529||(5,804||)||5,494|
|(Loss) gain on sale of assets||-||(17,565||)||3,536||(16,299||)|
|Realized gain on investments||361,059||59,689||214,696||74,454|
|Unrealized gain (loss) on investments||104,896||(17,898||)||(45,776||)||(17,898||)|
|Interest and dividend income||28,305||24,744||117,252||39,852|
|Income (loss) before income tax expense (benefit)||2,791,036||(807,599||)||4,374,019||2,162,640|
|Income tax expense (benefit)||1,056,684||(449,797||)||1,787,999||554,568|
|Net income (loss)||1,734,352||(357,802||)||2,586,020||1,608,072|
|Less net income attributable to noncontrolling interest||(16,468||)||(4,259||)||(53,072||)||(20,540||)|
|Net income (loss) attributable to Lannett Company, Inc.||$||1,717,884||$||(362,061||)||$||2,532,948||$||1,587,532|
|Earnings (loss) per common share - Lannett Company, Inc.:|
|Weighted average number of shares outstanding:|
|LANNETT COMPANY, INC. AND SUBSIDIARIES|
|CONSOLIDATED BALANCE SHEETS|
March 31, 2012
June 30, 2011
|Cash and cash equivalents||$||18,989,168||$||5,276,735|
|Trade accounts receivable (net of allowance of $123,573 and $123,573, respectively)||37,499,169||33,464,440|
|Income taxes receivable||3,205,508||3,636,306|
|Deferred tax assets||4,867,255||4,537,881|
|Other current assets||1,472,069||941,902|
|Total Current Assets||99,580,156||94,141,864|
|Property, plant and equipment||58,181,257||54,516,229|
|Less accumulated depreciation||(27,371,657||)||(24,586,448||)|
|Construction in progress||6,266,583||5,760,686|
|Intangible assets (product rights) - net of accumulated amortization||4,899,021||5,909,636|
|Deferred tax assets||8,747,015||10,446,500|
LIABILITIES AND SHAREHOLDERS' EQUITY
|Accrued payroll and payroll related||2,159,723||934,504|
|Current portion of long-term debt||639,591||629,435|
|Rebates, chargebacks and returns payable||15,394,344||13,564,395|
|Total Current Liabilities||35,117,758||34,860,211|
|Long-term debt, less current portion||6,781,862||7,192,496|
|Other long-term liabilities||-||2,417|
|Commitment and Contingencies|
Common stock - authorized 50,000,000 shares, par value $0.001; issued and outstanding, 28,572,304 and 28,403,946 shares, respectively
|Additional paid in capital||98,925,755||97,082,360|
|Accumulated other comprehensive (loss) income||(19,293||)||23,899|
|Less: Treasury stock at cost - 280,469 and 156,611 shares, respectively||(1,351,736||)||(872,303||)|
|TOTAL SHAREHOLDERS' EQUITY||109,577,132||105,689,174|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||151,476,752||$||147,744,298|
Robert Jaffe, 310-279-5980
Source: Lannett Company, Inc.Copyright Business Wire 2012