Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LANNETT CO INC | a15-20664_18k.htm |
| EX-99.1 - EX-99.1 - LANNETT CO INC | a15-20664_1ex99d1.htm |
| EX-99.2 - EX-99.2 - LANNETT CO INC | a15-20664_1ex99d2.htm |
| EX-99.3 - EX-99.3 - LANNETT CO INC | a15-20664_1ex99d3.htm |
Exhibit 99.4
Use of Non-GAAP Financial Measures
This Current Report on Form 8-K contains references to Non-GAAP financial measures, including EBITDA and Adjusted EBITDA, which are financial measures that are not prepared in conformity with accounting principles generally accepted in the United States (GAAP). We define EBITDA as net income or loss from the consolidated statements of operations before interest, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA as further adjusted for other non-operating items, as well as certain other items considered unusual or non-recurring in nature, as detailed in the table below. We believe that our presentation of these Non-GAAP financial measures provide 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, they provide a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. A reconciliation of EBITDA and Adjusted EBITDA has been provided within the table below. Non-GAAP financial measures, including EBITDA and Adjusted EBITDA, 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.
EBITDA and Adjusted EBITDA Reconciliation (Unaudited; dollars in thousands):
|
|
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Lannett |
|
Lannett |
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Lannett |
|
KUPI |
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KUPI |
|
KUPI |
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KUPI |
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KUPI |
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LTM |
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Historical |
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Historical |
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Historical |
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Historical |
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Historical |
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Historical |
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Historical |
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Historical |
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Pro Forma Combined (1) |
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Twelve months |
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Twelve months |
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Twelve months |
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Twelve months |
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Twelve months |
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Twelve months |
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Six months |
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Six months |
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Twelve months |
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06/30/13 |
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06/30/14 |
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06/30/15 |
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12/31/12 |
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12/31/13 |
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12/31/14 |
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06/30/14 |
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06/30/15 |
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06/30/15 |
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Net income |
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$ |
13,317 |
|
$ |
57,101 |
|
$ |
149,919 |
|
$ |
66,655 |
|
$ |
81,618 |
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$ |
118,074 |
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$ |
61,242 |
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$ |
28,521 |
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$ |
179,705 |
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Interest Expense |
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251 |
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130 |
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207 |
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— |
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— |
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— |
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— |
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— |
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67,830 |
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Depreciation and Amortization: |
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6,198 |
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5,984 |
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5,583 |
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9,880 |
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9,262 |
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10,947 |
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4,798 |
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5,374 |
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45,380 |
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Income Taxes |
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7,303 |
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32,857 |
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77,430 |
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16,538 |
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21,006 |
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43,477 |
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34,701 |
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17,002 |
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71,284 |
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EBITDA |
|
$ |
27,069 |
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$ |
96,072 |
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$ |
233,139 |
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$ |
93,073 |
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$ |
111,886 |
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$ |
172,498 |
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$ |
100,741 |
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$ |
50,897 |
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$ |
364,199 |
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Foreign currency gain (loss) |
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(3 |
) |
(1 |
) |
21 |
|
— |
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— |
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842 |
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561 |
|
237 |
|
539 |
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Gain (loss) on sale of assets |
|
(111 |
) |
142 |
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(33 |
) |
76 |
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(447 |
) |
(109 |
) |
(3 |
) |
56 |
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(83 |
) | |||||||||
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Gain (loss) on investments |
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(699 |
) |
(1,907 |
) |
(705 |
) |
— |
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— |
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— |
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— |
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— |
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(705 |
) | |||||||||
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Litigation settlement |
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(1,250 |
) |
— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Loss on Inventory Write-off |
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876 |
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2,918 |
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6,700 |
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7,197 |
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8,218 |
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7,800 |
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2,909 |
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4,240 |
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15,831 |
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Loss on Intangibles Write-off |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
|
550 |
|
550 |
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Interest and dividend income |
|
(116 |
) |
(295 |
) |
(425 |
) |
— |
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— |
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— |
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— |
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— |
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(425 |
) | |||||||||
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Stock Compensation |
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1,477 |
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9,026 |
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6,397 |
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1,206 |
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1,187 |
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1,341 |
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1,076 |
|
401 |
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7,062 |
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Acquisition-related expenses |
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— |
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265 |
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4,301 |
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— |
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— |
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4,860 |
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1,138 |
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2,010 |
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4,301 |
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Change-in-control expense |
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— |
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— |
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— |
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— |
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1,313 |
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3,246 |
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1,623 |
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1,623 |
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— |
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JSP contract renewal cost |
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— |
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20,100 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Synergies |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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9,824 |
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Methylphenidate XR Normalization |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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(15,766 |
) | |||||||||
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Run rate adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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(3,600 |
) | |||||||||
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Adjusted EBITDA |
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$ |
27,243 |
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$ |
126,320 |
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$ |
249,395 |
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$ |
101,552 |
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$ |
122,157 |
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$ |
190,478 |
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$ |
108,045 |
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$ |
60,014 |
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$ |
381,727 |
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(1) During the preparation of the Pro Forma information, we performed a review of KUPI’s accounting policies in an effort to determine if differences in accounting policies require adjustment or reclassification of KUPI’s results of operations or reclassification of assets or liabilities to conform to our accounting policies and classifications. We were not aware of any material differences between accounting policies of the two companies, except for certain reclassifications necessary to conform to our financial presentation, and accordingly, the Pro Forma information does not assume any material differences in accounting policies between the two companies.