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Akorn Inc. (AKRX) Posts Q4 and FY 2010 Results; 2011 Guidance

|Includes: Akorn, Inc. (AKRX)

Akorn Inc., a niche generic pharmaceutical company, today reported financial results for the fourth quarter and year ended December 31, 2010, noting key highlights and achievements that contributed to the results.

Consolidated revenue for the fourth quarter of 2010 was $24.0 million, an increase of 32 percent over revenue of $18.2 million reported in the fourth quarter of last year. Fourth quarter 2010 core business revenue was $24.0 million, up 60 percent over the prior year quarter core revenue of $15.0 million.

Consolidated revenue for the full-year 2010 was $86.4 million, up 14 percent over the full-year 2009 consolidated revenue of $75.9 million. Core business revenue for the year 2010 was $81.2 million, an 81 percent increase over the prior year core revenue of $44.8 million.

Consolidated gross margin for the fourth quarter of 2010 was 53 percent compared to 33 percent reported in the comparable quarter of 2009. Fourth quarter core business gross margin was 53 percent compared to 37 percent in the comparable prior year period.

Net income for the fourth quarter of 2010 was $23.7 million, or $0.23 earnings per share, compared to a net loss of $(2.6) million and a loss per share of $(0.03) in the fourth quarter of last year. Fourth quarter 2010 net income included $21.6 million in gain related to the sale of the joint venture’s product portfolio, as well as included $1.8 million in expense related to the prepayment of $5.8 million in subordinated debt. The company also reported that it incurred approximately $0.6 million in selling, general and administrative expenses in the fourth quarter 2010 related to a legal settlement with the prior CEO of the company.

Akorn generated $5.2 million in positive cash flow from operating activities in the fourth quarter of 2010 and ended the year with $42 million in cash and cash equivalents.

“We had another great quarter and ended the year on a positive note. The year 2010 was a very successful year as in a relatively short period of time we have strengthened the foundation of our company,” Raj Rai, CEO of Akorn stated in the press release. “Going forward, we plan to accelerate growth by investing in R&D, making opportunistic and strategic acquisitions and finally, increasing capital expenditures to expand capacity and enhance the productivity of our plants.”

The company noted several accomplishments, including, but not limited to: the sale of the Akorn-Strides, LLC joint-venture product portfolio to Pfizer for $63.2 million; prepaid high-cost subordinated debt of approximately $5.8 million during the fourth quarter of 2010, leaving the company debt free; and the initiation of an R&D strategy and completion of the development of 16 new products.

Akorn said it expects 2011 revenue in the range of $90.0 million to $94.0 million; gross margins for 2011 between 52 percent and 54 percent; and EBITDA of approximately $20.0 million to $24.0 million.

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