Lannett Reports Strong Fiscal 2015 Financial Results

--Company Records Net Sales of $99 Million, EPS of $0.91; Provides Guidance for Fiscal 2016--

Aug 25, 2015, 16:04 ET from Lannett Company, Inc.

PHILADELPHIA, Aug. 25, 2015 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2015 fourth quarter and full year ended June 30, 2015.  On June 1, 2015, the company completed the acquisition of Silarx Pharmaceuticals, Inc.  The financial results presented below include approximately one month of operations for Silarx, which were not material.

For the fiscal 2015 fourth quarter, net sales rose 23% to $99.3 million from $80.6 million in last year's fourth quarter.  Gross profit increased 29% to $72.0 million, or 72% of net sales, from $55.9 million, or 69% of net sales.  Research and development (R&D) expenses increased to $7.0 million from $6.6 million for the fiscal 2014 fourth quarter.  Selling, general and administrative (SG&A) expenses were $13.9 million, which included $1.6 million of acquisition-related expenses, compared with $12.0 million.  Operating income grew 37% to $51.0 million from $37.4 million.  Net income attributable to Lannett Company increased 44% to $33.9 million, or $0.91 per diluted share, from $23.5 million, or $0.64 per diluted share, for the prior year fourth quarter. 

"Our fourth quarter performance was in line with expectations and reflects higher sales and gross margin across a number of product categories," said Arthur Bedrosian, chief executive officer of Lannett.  "We have now reported fourteen consecutive quarters in which net sales and adjusted EPS exceeded the comparable prior-year period.

"Also during the fourth quarter, we completed the Silarx acquisition, which expands and diversifies our product pipeline, adds greater capacity to manufacture liquid pharmaceuticals and increases our current research and development capabilities.  I am pleased to report that we expect the acquisition to be immediately accretive to our fiscal 2016 financial results and the integration of Silarx's operations is proceeding smoothly and is nearly complete."

For the fiscal 2015 full year, net sales rose 49% to $406.8 million from $273.8 million in the prior year.  Gross profit was $306.4 million, or 75% of net sales.  This compares with gross profit for fiscal 2014 of $154.4 million, or 56% of net sales, which included a non-recurring pre-tax charge of $20.1 million related to the contract extension with Jerome Stevens Pharmaceuticals, Inc. (JSP).  Excluding the JSP contract renewal charge, gross profit was $174.5 million, or 64% of net sales.  R&D expenses increased to $30.3 million from $27.7 million.  SG&A expenses were $49.5 million, compared with $38.6 million.  Included in SG&A expenses for fiscal 2015 were $4.3 million in acquisition-related expenses.  Operating income was $226.5 million compared with $88.1 million for the prior year.  Excluding the JSP contract renewal charge, operating income for the prior-year period was $108.2 million.  Net income attributable to Lannett Company was $149.9 million, or $4.04 per diluted share, compared with $57.1 million, or $1.62 per diluted share, for fiscal 2014.  Adjusted net income, which excludes the impact of the JSP contract renewal charge equal to $12.6 million after-tax, was $69.7 million, or $1.98 per diluted share, in fiscal 2014.

Guidance for Fiscal 2016

  • Based on Lannett's current outlook, the company provided financial guidance for the fiscal 2016 full year as follows:
  • Net sales in the range of $425 million to $435 million;
  • Gross margin as a percentage of net sales of approximately 71% to 73%;
  • R&D expense in the range of $33 million to $35 million;
  • SG&A expense ranging from $57 million to $59 million, which includes approximately $5.0 million in acquisition-related expenses;
  • The full year effective tax rate to be in the range of 34% to 35%; and
  • Capital expenditures in fiscal 2016 in the range of $60 million to $70 million, which includes $30 million to continue the partial fit-out of company-owned buildings.

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 2015 fourth quarter and full year ended June 30, 2015.  The conference call will be available to interested parties by dialing 877-261-8992 from the U.S. or Canada, or 847-619-6548 from international locations, passcode 40464835.  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.

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.  For more information, visit the company's 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, achieving the financial metrics stated in the company's guidance for fiscal 2016, 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, including products acquired in the Silarx transaction, Lannett'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 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.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

June 30, 2015

June 30, 2014

ASSETS

Current assets:

Cash and cash equivalents

$               200,340

$          105,587

Investment securities

13,467

40,693

Accounts receivable, net

91,103

61,325

Inventories, net

46,191

44,844

Deferred tax assets

16,270

11,265

Other current assets

3,175

1,833

Total current assets

370,546

265,547

Property, plant and equipment, net

94,556

61,704

Intangible assets, net

29,090

927

Goodwill

141

-

Deferred tax assets

12,495

14,234

Other assets

1,938

361

TOTAL ASSETS

$               508,766

$          342,773

LIABILITIES

Current liabilities:

Accounts payable

$                  19,195

$            20,982

Accrued expenses

4,928

3,901

Accrued payroll and payroll-related expenses

10,397

12,860

Rebates payable

7,553

4,558

Income taxes payable

1,918

4,569

Current portion of long-term debt

135

129

Total current liabilities

44,126

46,999

Long-term debt, less current portion

874

1,009

TOTAL LIABILITIES

45,000

48,008

Commitments and Contingencies

STOCKHOLDERS' EQUITY

Common stock ($0.001 par value, 100,000,000 shares authorized; 36,783,381

 and 36,088,272 shares issued; 36,264,585 and 35,571,280 shares outstanding at

June 30, 2015 and 2014, respectively)

37

36

Additional paid-in capital

236,178

216,793

Retained earnings

233,573

83,654

Accumulated other comprehensive loss

(295)

(54)

Treasury stock (518,796 and 516,992 shares at June 30, 2015 and 2014, respectively)

(6,080)

(5,959)

Total Lannett Company, Inc. stockholders' equity

463,413

294,470

Noncontrolling interest

353

295

Total stockholders' equity

463,766

294,765

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$               508,766

$          342,773

 

LANNETT COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)

Three months ended 

Fiscal Year ended 

June 30,

June 30,

2015

2014

2015

2014

Net sales

$         99,276

$           80,619

$        406,837

$         273,771

Cost of sales 

27,326

24,691

100,481

99,263

JSP contract renewal cost

-

-

-

20,100

Gross profit

71,950

55,928

306,356

154,408

Operating expenses:

Research and development

6,984

6,600

30,342

27,713

Selling, general, and administrative

13,948

11,977

49,527

38,606

Total operating expenses

20,932

18,577

79,869

66,319

Operating income

51,018

37,351

226,487

88,089

Other income (loss):

Foreign currency gain (loss)

-

-

(21)

1

Gain (loss) on sale of assets

18

-

33

(142)

Gain on investment securities

113

142

705

1,907

Interest and dividend income

122

91

425

295

Interest expense

(88)

(13)

(207)

(130)

Total other income

165

220

935

1,931

Income before income taxes

51,183

37,571

227,422

90,020

Income tax expense

17,222

14,019

77,430

32,857

Net income

33,961

23,552

149,992

57,163

Less: Net income attributable to noncontrolling interest

18

17

73

62

Net income attributable to Lannett Company, Inc.

$         33,943

$           23,535

$        149,919

$           57,101

Earnings per common share attributable to Lannett Company, Inc.

     Basic

$              0.94

$               0.66

$               4.18

$               1.70

     Diluted

$              0.91

$               0.64

$               4.04

$               1.62

Weighted average common shares outstanding:

     Basic

36,164,719

35,413,363

35,827,167

33,663,589

     Diluted

37,321,633

36,913,944

37,127,117

35,193,376

 

Contact:

Robert Jaffe

Robert Jaffe Co., LLC

(424) 288-4098

Logo - http://photos.prnewswire.com/prnh/20150417/199461LOGO

 

SOURCE Lannett Company, Inc.



RELATED LINKS

http://www.lannett.com