Attached files
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| 8-K - FORM 8-K - Impax Laboratories, LLC | d388015d8k.htm |
Exhibit 99.1
Company Contact:
Mark Donohue
Sr. Director
Investor Relations and Corporate Communications
(215) 558-4526
www.impaxlabs.com
Impax Laboratories Reports Second Quarter 2012 Adjusted EPS
Increased to $0.60; GAAP EPS Increased to $0.27
HAYWARD, Calif. (July 31, 2012) – Impax Laboratories, Inc. (NASDAQ: IPXL) today reported second quarter 2012 financial results.
| • | Adjusted net income increased $28.4 million to $41.0 million in the second quarter 2012, or $0.60 per diluted share, compared to $12.6 million, or $0.19 per diluted share, in the prior year period, primarily attributable to the benefit of the revenue and gross profit earned from United States (U.S.) Zomig® sales pursuant to the previously disclosed License Agreement with AstraZeneca UK Limited (AstraZeneca License Agreement) and higher generic Adderall XR® sales. Adjusted results exclude certain items related to recent third-party business development transactions. |
| • | GAAP net income increased 49% to $18.7 million in the second quarter 2012, or $0.27 per diluted share, compared to $12.6 million, or $0.19 per diluted share, in the prior year period, primarily due to U.S. Zomig® tablet sales by the Company’s brand division and higher generic Adderall XR® sales. |
| • | Total revenues increased 32% to $166.5 million in the second quarter 2012, compared to $125.9 million in the prior year period, primarily due to U.S. Zomig® tablet sales and higher generic Adderall XR® sales. Second quarter 2012 revenues exclude U.S. Zomig® orally disintegrating and nasal spray formulation sales by AstraZeneca, although the Company received the benefit of the gross profit ($16.2 million) from these sales during the specified transition period pursuant to the AstraZeneca License Agreement. |
| • | Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), increased to $72.6 million in the second quarter 2012, compared to $24.9 million in the prior year period, primarily attributable to the items noted above. |
Please refer to “Non-GAAP Financial Measures” below for a reconciliation of GAAP to non-GAAP items.
“The positive second quarter results reflect our Zomig® tablets sales in the U.S. utilizing our expanded neurology focused brand sales force, as well as increased receipt of shipments of generic Adderall XR® from our third-party supplier which led to higher sales in the quarter,” said Larry Hsu, Ph.D., president and CEO, Impax Laboratories, Inc. “We are excited that our brand sales force began promoting and sampling Zomig® tablets in the U.S. on April 1. This product will support the growth of our commercial organization as we prepare for the potential launch of RytaryTM, our first internally developed brand product for Parkinson’s Disease.”
“The U.S. Food and Drug Administration (FDA) recently completed a preapproval inspection for RytaryTM and an undisclosed generic product at our Taiwan facility and there were no Form 483 observations. We continue to work at resolving the recent observation made by the FDA in Hayward and have been notified that a satisfactory re-inspection will be necessary to close out the warning letter,” Dr. Hsu continued.
1
“Our generic business pipeline has 46 pending ANDAs with more than 40 internally developed or partnered products, including many alternative dosage form products. We remain focused on pursuing strategic opportunities that are aimed at advancing our generic and brand businesses beyond our internal efforts. So far in 2012, our business development activities include the in-licensing of Zomig® on the brand side, and the acquisition of alternative dosage form generic products and a co-development, supply and distribution agreement with TOLMAR, Inc. on the generics side. With more than $354 million in cash and short-term investments and no debt, our business development activities will continue to focus on delivering growth from high-value products, technologies, and businesses in complementary dosage forms,” Dr. Hsu concluded.
Segment Information
The Company has two reportable segments, the Global Pharmaceuticals Division (generic products & services) and the Impax Pharmaceuticals Division (brand products & services) and does not allocate general corporate services to either segment.
Global Pharmaceuticals Division Information
| (unaudited, amounts in thousands) | Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: |
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| Global product sales, net |
$ | 126,435 | $ | 111,125 | $ | 242,646 | $ | 203,463 | ||||||||
| Rx Partner |
2,466 | 4,866 | 5,444 | 7,548 | ||||||||||||
| OTC Partner |
783 | 1,184 | 1,474 | 3,127 | ||||||||||||
| Research Partner |
3,384 | 3,384 | 6,769 | 9,769 | ||||||||||||
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| Total Revenues |
133,068 | 120,559 | 256,333 | 223,907 | ||||||||||||
| Cost of revenues |
70,478 | 63,257 | 133,584 | 110,431 | ||||||||||||
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| Gross profit |
62,590 | 57,302 | 122,749 | 113,476 | ||||||||||||
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| Operating expenses: |
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| Research and development |
12,136 | 13,466 | 22,798 | 23,242 | ||||||||||||
| Patent litigation |
2,914 | 2,209 | 6,952 | 3,983 | ||||||||||||
| Selling, general and administrative |
3,319 | 2,579 | 7,692 | 5,198 | ||||||||||||
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| Total operating expenses |
18,369 | 18,254 | 37,442 | 32,423 | ||||||||||||
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| Income from operations |
$ | 44,221 | $ | 39,048 | $ | 85,307 | $ | 81,053 | ||||||||
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Global Pharmaceuticals Division revenues in the second quarter 2012 were $133.1 million, up 10% compared to the prior year period, due to higher Global product sales, net, partially offset by lower Rx Partner sales.
For the second quarter 2012, Global product sales, net, were $126.4 million, up 14% from the prior year period, primarily due to higher sales of authorized generic Adderall XR®. Partially offsetting this increase was a $2.4 million decline in Rx Partner revenues due to lower customer demand.
Gross profit of $62.6 million represented a 47% gross margin in the second quarter 2012, and was in-line with the gross margin for the prior year period, primarily due to higher sales of our authorized generic Adderall XR® product.
2
Total generic operating expenses in the second quarter 2012 increased slightly compared to the prior year period, as higher patent litigation and selling, general and administrative (SG&A) expenses were offset by lower investments in research and development (R&D).
Impax Pharmaceuticals Division Information
| (unaudited, amounts in thousands) | Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: |
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| Impax Pharma product sales, net |
$ | 28,091 | $ | — | $ | 28,091 | $ | — | ||||||||
| Rx Partner |
1,437 | 1,437 | 2,875 | 2,875 | ||||||||||||
| Promotional Partner |
3,535 | 3,535 | 7,070 | 7,070 | ||||||||||||
| Research Partner |
329 | 329 | 659 | 659 | ||||||||||||
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| Total Revenues |
33,392 | 5,301 | 38,695 | 10,604 | ||||||||||||
| Cost of revenues |
18,159 | 2,901 | 21,068 | 5,841 | ||||||||||||
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| Gross profit |
15,233 | 2,400 | 17,627 | 4,763 | ||||||||||||
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| Operating expenses: |
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| Research and development |
7,733 | 10,512 | 15,887 | 20,227 | ||||||||||||
| Selling, general and administrative |
6,707 | 1,377 | 9,768 | 2,483 | ||||||||||||
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| Total operating expenses |
14,440 | 11,889 | 25,655 | 22,710 | ||||||||||||
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| Income (loss) from operations |
$ | 793 | $ | (9,489 | ) | $ | (8,028 | ) | $ | (17,947 | ) | |||||
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Impax Pharmaceuticals Division revenues in the second quarter 2012 increased $28.1 million to $33.4 million, compared to the prior year period, due to U.S. sales of Zomig® tablets pursuant to the AstraZeneca License Agreement for which there was no comparable amount in the prior year period.
Gross profit of $15.2 million increased $12.8 million in the second quarter 2012, due to U.S. Zomig® tablet sales, compared to the prior year period. Gross margin in the second quarter 2012 was 46%, up slightly over the prior year period. The second quarter 2012 gross margin was negatively impacted by the inclusion of $14.3 million in cost of revenues for amortization and acquisition-related costs due to the Zomig® transaction.
Total brand operating expenses in the second quarter 2012 increased $2.6 million, compared to the prior year period, due to higher SG&A expenses resulting from Zomig® marketing costs and the expansion of the Company’s neurology focused sales force, as well as pre-launch planning costs for RytaryTM, partially offset by lower R&D expenses.
Corporate and Other
| (unaudited, amounts in thousands) | Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| General and administrative expenses |
$ | 14,844 | $ | 11,553 | $ | 28,643 | $ | 24,407 | ||||||||
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| Loss from operations |
$ | (14,844 | ) | $ | (11,553 | ) | $ | (28,643 | ) | $ | (24,407 | ) | ||||
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General and administrative expenses in the second quarter 2012 increased $3.3 million, compared to the prior year period, primarily due to employee severance and increased personnel expenses.
Cash and Short-term Investments
Cash and short-term investments were $354.5 million as of June 30, 2012, as compared to $346.4 million as of December 31, 2011.
3
2012 Financial Outlook
The Company updated its 2012 financial outlook as noted below.
| • | Gross margins as a percent of total revenues of approximately 60%. |
| • | Total R&D expenses across the generic and brand divisions to approximate $89.0 million with generic R&D of approximately $48.0 million and brand R&D of approximately $41.0 million. |
| • | UPDATED—Patent litigation expenses of approximately $10.0 to $13.0 million. |
| • | SG&A expenses of approximately $113.0 million. |
| • | Effective tax rate of approximately 36%. |
| • | Capital expenditures of approximately $78.0 million. |
Conference Call Information
The Company will host a conference call on July 31, 2012 at 11:00 a.m. EDT to discuss its results. The number to call from within the United States is (877) 356-3814 and (706) 758-0033 internationally. The call can also be accessed via a live Webcast through the Investor Relations section of the Company’s Web site, www.impaxlabs.com. A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial (855) 859-2056 (in the U.S.) and (404) 537-3406 (international callers). The access conference code is 99743725.
About Impax Laboratories, Inc.
Impax Laboratories, Inc. is a technology based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals Division and markets branded products through the Impax Pharmaceuticals Division. Additionally, where strategically appropriate, Impax has developed marketing partnerships to fully leverage its technology platform. Impax Laboratories is headquartered in Hayward, California, and has a full range of capabilities in its Hayward, Philadelphia and Taiwan facilities. For more information, please visit the Company’s Web site at: www.impaxlabs.com.
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995:
To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the effect of current economic conditions on the Company’s industry, business, financial position and results of operations, fluctuations in the Company’s revenues and operating income, the Company’s ability to successfully develop and commercialize pharmaceutical products, reductions or loss of business with any significant customer, the impact of consolidation of the Company’s customer base, the impact of competition, the Company’s ability to sustain profitability and positive cash flows, any delays or unanticipated expenses in connection with the operation of the Company’s Taiwan facility, the effect of foreign economic, political, legal and other risks on the Company’s operations abroad, the uncertainty of patent litigation, increased government scrutiny on the Company’s agreements with brand pharmaceutical companies, consumer acceptance and demand for new pharmaceutical products, the difficulty of predicting Food and Drug Administration filings and approvals, the Company’s inexperience in conducting clinical trials and submitting new drug applications, the Company’s ability to successfully conduct clinical trials, the Company’s reliance on third parties to conduct clinical trials and testing, the availability of raw materials and impact of interruptions in the Company’s supply chain, the use of controlled substances in the Company’s products, disruptions or failures in the Company’s information technology systems and network infrastructure, the Company’s reliance on alliance and collaboration agreements, the Company’s dependence on certain employees, the Company’s ability to comply with legal and regulatory requirements governing the healthcare industry, the regulatory environment, the Company’s ability to protect the Company’s intellectual property, exposure to product liability claims, changes in tax regulations, the Company’s ability to manage the Company’s growth, including through potential acquisitions, the restrictions imposed by the Company’s credit facility, uncertainties involved in the preparation of the Company’s financial statements, the Company’s ability to maintain an effective system of internal control over financial reporting, any manufacturing difficulties or delays, the effect of terrorist attacks on the Company’s business, the location of the Company’s manufacturing and research and development facilities near earthquake fault lines and other risks described in the Company’s periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and Impax undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.
4
Impax Laboratories, Inc.
Consolidated Statements of Operations
(unaudited, amounts in thousands, except share and per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: |
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| Global Pharmaceuticals Division |
$ | 133,068 | $ | 120,559 | $ | 256,333 | $ | 223,907 | ||||||||
| Impax Pharmaceuticals Division |
33,392 | 5,301 | 38,695 | 10,604 | ||||||||||||
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| Total Revenues |
166,460 | 125,860 | 295,028 | 234,511 | ||||||||||||
| Cost of revenues |
88,637 | 66,158 | 154,652 | 116,272 | ||||||||||||
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| Gross profit |
77,823 | 59,702 | 140,376 | 118,239 | ||||||||||||
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| Operating expenses: |
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| Research and development |
19,869 | 23,978 | 38,685 | 43,469 | ||||||||||||
| Patent litigation |
2,914 | 2,209 | 6,952 | 3,983 | ||||||||||||
| Selling, general and administrative |
24,870 | 15,509 | 46,103 | 32,088 | ||||||||||||
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| Total operating expenses |
47,653 | 41,696 | 91,740 | 79,540 | ||||||||||||
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| Income from operations |
30,170 | 18,006 | 48,636 | 38,699 | ||||||||||||
| Other expense, net |
(95 | ) | (545 | ) | (175 | ) | (540 | ) | ||||||||
| Interest income |
244 | 290 | 499 | 611 | ||||||||||||
| Interest expense |
(423 | ) | (11 | ) | (462 | ) | (28 | ) | ||||||||
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| Income before income taxes |
29,896 | 17,740 | 48,498 | 38,742 | ||||||||||||
| Provision for income taxes |
11,262 | 5,214 | 17,531 | 12,358 | ||||||||||||
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| Net income before noncontrolling interest |
18,634 | 12,526 | 30,967 | 26,384 | ||||||||||||
| Add back loss attributable to noncontrolling interest |
38 | 24 | 70 | 29 | ||||||||||||
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| Net Income |
$ | 18,672 | $ | 12,550 | $ | 31,037 | $ | 26,413 | ||||||||
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| Net Income per share: |
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| Basic |
$ | 0.29 | $ | 0.20 | $ | 0.48 | $ | 0.41 | ||||||||
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| Diluted |
$ | 0.27 | $ | 0.19 | $ | 0.46 | $ | 0.39 | ||||||||
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| Weighted average common shares outstanding: |
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| Basic |
65,482,700 | 64,024,483 | 65,289,869 | 63,709,258 | ||||||||||||
| Diluted |
67,954,573 | 67,654,047 | 68,064,934 | 67,401,018 | ||||||||||||
5
Impax Laboratories, Inc.
Condensed Consolidated Balance Sheets
(unaudited, amounts in thousands)
| June 30, 2012 |
December 31, 2011 |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 184,632 | $ | 104,419 | ||||
| Short-term investments |
169,851 | 241,995 | ||||||
| Accounts receivable, net |
143,447 | 153,773 | ||||||
| Inventory, net |
63,092 | 54,177 | ||||||
| Prepaid expenses and other assets |
46,919 | 7,718 | ||||||
| Current portion deferred tax asset |
33,993 | 37,853 | ||||||
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| Total current assets |
641,934 | 599,935 | ||||||
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| Property, plant and equipment, net |
136,888 | 118,158 | ||||||
| Other assets |
90,359 | 45,942 | ||||||
| Intangible assets, net |
61,636 | 2,250 | ||||||
| Goodwill |
27,574 | 27,574 | ||||||
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| Total assets |
$ | 958,391 | $ | 793,859 | ||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Accounts payable and accrued expenses |
$ | 131,112 | $ | 93,071 | ||||
| Accrued profit sharing and royalty expenses |
32,984 | 40,766 | ||||||
| Accrued product licensing payments |
96,000 | — | ||||||
| Deferred revenue |
12,743 | 23,024 | ||||||
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| Total current liabilities |
272,839 | 156,861 | ||||||
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| Deferred revenue |
15,327 | 17,131 | ||||||
| Other liabilities |
20,780 | 16,861 | ||||||
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| Total liabilities |
308,946 | $ | 190,853 | |||||
| Total stockholders’ equity |
649,445 | 603,006 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 958,391 | $ | 793,859 | ||||
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Impax Laboratories, Inc.
Consolidated Statements of Cash Flows
(unaudited, amounts in thousands)
| Six Months Ended June 30, |
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| 2012 | 2011 | |||||||
| Cash flows from operating activities: |
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| Net income |
$ | 31,037 | $ | 26,413 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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| Depreciation and amortization |
12,144 | 8,351 | ||||||
| Accretion of interest income on short-term investments |
(318 | ) | (461 | ) | ||||
| Deferred income taxes |
(29,486 | ) | 3,125 | |||||
| Tax benefit related to the exercise of employee stock options |
(2,338 | ) | (5,641 | ) | ||||
| Deferred revenue |
931 | 1,887 | ||||||
| Deferred product manufacturing costs |
(1,574 | ) | (1,061 | ) | ||||
| Recognition of deferred revenue |
(12,320 | ) | (13,461 | ) | ||||
| Amortization of deferred product manufacturing costs |
1,709 | 2,026 | ||||||
| Accrued profit sharing and royalty expense |
58,445 | 44,789 | ||||||
| Payments of profit sharing and royalty expense |
(66,226 | ) | (31,121 | ) | ||||
| Share-based compensation expense |
8,323 | 6,133 | ||||||
| Bad debt expense |
— | 125 | ||||||
| Changes in assets and liabilities: |
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| Accounts receivable |
10,326 | (39,141 | ) | |||||
| Inventory |
(8,915 | ) | (1,489 | ) | ||||
| Prepaid expenses and other assets |
36,626 | (15,389 | ) | |||||
| Accounts payable and accrued expenses |
37,374 | (2,815 | ) | |||||
| Other liabilities |
3,591 | 2,487 | ||||||
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| Net cash provided by (used in) operating activities |
79,329 | (15,243 | ) | |||||
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| Cash flows from investing activities: |
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| Purchase of short-term investments |
(104,869 | ) | (180,274 | ) | ||||
| Maturities of short-term investments |
177,331 | 239,998 | ||||||
| Purchases of property, plant and equipment |
(24,971 | ) | (14,569 | ) | ||||
| Payment for product licensing rights |
(55,000 | ) | — | |||||
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| Net cash provided by (used in) investing activities |
(7,509 | ) | 45,155 | |||||
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| Cash flows from financing activities: |
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| Tax benefit related to the exercise of employee stock options and restricted stock |
2,338 | 5,641 | ||||||
| Proceeds from exercise of stock options and ESPP |
6,055 | 10,833 | ||||||
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| Net cash provided by financing activities |
8,393 | 16,474 | ||||||
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| Net increase in cash and cash equivalents |
80,213 | 46,386 | ||||||
| Cash and cash equivalents, beginning of period |
104,419 | 91,796 | ||||||
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| Cash and cash equivalents, end of period |
$ | 184,632 | $ | 138,182 | ||||
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7
Impax Laboratories, Inc.
Non-GAAP Financial Measures
Total adjusted net income, adjusted net income per diluted share and adjusted EBITDA are not measures of financial performance under generally accepted accounting principles (GAAP) and should not be construed as substitutes for, or superior to, GAAP net income, and net income per diluted share as a measure of financial performance. However, management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information to and facilitates analysis by investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculation of adjusted net income, adjusted net income per diluted share and adjusted EBITDA, may not be comparable to similarly designated measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment.
The following table reconciles reported net income to adjusted net income.
| (Unaudited, amounts in millions, except per share data) | Three months ended June 30, |
Six months ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net Income |
$ | 18.7 | $ | 12.6 | $ | 31.0 | $ | 26.4 | ||||||||
| Adjusted to add (deduct): |
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| Gross profit earned on Zomig® Agreement(a) |
16.2 | — | 46.2 | — | ||||||||||||
| Amortization and acquisition-related costs(b) |
14.3 | — | 14.3 | — | ||||||||||||
| Acquisition related in-process R&D(c) |
1.6 | — | 1.6 | — | ||||||||||||
| Employee severance |
1.9 | — | 1.9 | 0.8 | ||||||||||||
| Inventory adjustment |
— | — | 3.5 | — | ||||||||||||
| Lower of cost or market charge |
— | — | 1.7 | — | ||||||||||||
| Income tax effect |
(11.7 | ) | — | (24.2 | ) | — | ||||||||||
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| Adusted net Income |
$ | 41.0 | $ | 12.6 | $ | 76.0 | $ | 27.2 | ||||||||
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| Net Income excluding adjusted items per diluted share |
$ | 0.60 | $ | 0.19 | $ | 1.12 | $ | 0.40 | ||||||||
| Net Income per diluted share |
$ | 0.27 | $ | 0.19 | $ | 0.46 | $ | 0.39 | ||||||||
8
Impax Laboratories, Inc.
Non-GAAP Financial Measures
The following table reconciles reported net income to adjusted EBITDA.
| (Unaudited, amounts in millions) | Three months ended June 30, |
Six months ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net Income |
$ | 18.7 | $ | 12.6 | $ | 31.0 | $ | 26.4 | ||||||||
| Adjusted to add (deduct): |
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| Interest income |
(0.2 | ) | (0.3 | ) | (0.5 | ) | (0.6 | ) | ||||||||
| Interest expense |
0.4 | 0.0 | 0.5 | 0.0 | ||||||||||||
| Depreciation and other |
3.9 | 4.2 | 7.6 | 8.4 | ||||||||||||
| Income taxes |
11.3 | 5.2 | 17.5 | 12.4 | ||||||||||||
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| EBITDA |
34.1 | 21.7 | 56.1 | 46.6 | ||||||||||||
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| Adjusted to add: |
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| Gross profit earned on Zomig® Agreement(a) |
16.2 | — | 46.2 | — | ||||||||||||
| Amortization and acquisition-related costs(b) |
14.3 | — | 14.3 | — | ||||||||||||
| Acquisition related in-process R&D(c) |
1.6 | — | 1.6 | — | ||||||||||||
| Employee severance |
1.9 | — | 1.9 | 0.8 | ||||||||||||
| Inventory adjustment |
— | — | 3.5 | — | ||||||||||||
| Lower of cost or market charge |
— | — | 1.7 | — | ||||||||||||
| Share-based compensation |
4.5 | 3.2 | 8.3 | 6.1 | ||||||||||||
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| Adjusted EBITDA |
$ | 72.6 | $ | 24.9 | $ | 133.6 | $ | 53.5 | ||||||||
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| (a) | On February 1, 2012, the Company announced that it had entered into the AstraZeneca License Agreement. As part of the AstraZeneca License Agreement, AstraZeneca granted to the Company an exclusive license to commercialize the tablet, orally disintegrating and nasal spray formulations of Zomig® (zolmitriptan) products for the treatment of migraine headaches in the United States and in certain U.S. territories. Under the terms of the AstraZeneca License Agreement, the Company agreed to pay AstraZeneca quarterly payments totaling $130.0 million during 2012 of which $30.0 million was paid in the second quarter ($55.0 million for the first six months ended June 30, 2012). During the specified product transition period pursuant to the AstraZeneca License Agreement, the Company will receive the benefit of the gross profit ($16.2 million and $46.2 million for the three months and six months ended June 30, 2012, respectively) from U.S. Zomig® sales by AstraZeneca commencing from January 1, 2012 and ending when the Company commences commercialization of the Zomig® products. The benefit of the gross profit received from AstraZeneca is recorded as a reduction of the $130.0 million to be paid by the Company to AstraZeneca during 2012 and is not reflected within the Company’s income. |
| (b) | Amortization and acquisition-related costs from the February 2012 AstraZeneca License Agreement. |
| (c) | Acquisition related in-process R&D from the June 2012 Development, Distribution and Supply Agreement with TOLMAR, Inc. |
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