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.
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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
7,553 4,558
Rebates payable
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
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SOURCE Lannett Company, Inc.
