Amneal Reports Fourth Quarter and Full Year 2023 Financial Results

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX) (“Amneal” or the “Company”) today announced its results for the fourth quarter and full year ended December 31, 2023.

“Amneal had a very successful year in 2023 as we delivered strong execution and growth across our diversified pharmaceutical business. We are starting 2024 with substantial momentum and key catalysts, including complex high-value products, biosimilars and specialty, to further expand our reach. Against the macro backdrop of a global aging population, significant unmet patient needs and ongoing supply issues, Amneal’s mission to provide access to high-quality, affordable, essential medicines has never been more important or more aligned with industry dynamics. Our durable business is ideally positioned to drive sustainable, profitable growth and create value for all our stakeholders, this year and beyond,” said Chirag and Chintu Patel, Co-Chief Executive Officers.

Net revenue in the fourth quarter of 2023 was $617 million, an increase of 1% compared to $610 million in the fourth quarter of 2022. The increase was driven by AvKARE revenues growing 38% due to new launches and Specialty revenues growing 2% driven by key branded products, partially offset by Generics revenues declining 9% as strong performance of biosimilars and complex generics was offset by the timing of orders. Net loss attributable to Amneal Pharmaceuticals, Inc. was $99 million in the fourth quarter of 2023 compared to a net loss of $4 million in the fourth quarter of 2022, primarily due to non-cash intangible asset impairment charges and costs associated with our term loan refinancing. Adjusted EBITDA⁽¹⁾ in the fourth quarter of 2023 was $142 million, a decrease of 8% compared to the fourth quarter of 2022, primarily due to investments in research and development and commercial to drive future growth. Diluted loss per share in the fourth quarter of 2023 was $0.40, an increase of $0.37 from a loss of $0.03 for the fourth quarter of 2022, due to the aforementioned factors, partially offset by an increase in the weighted-average common shares outstanding as a result of our previously announced reorganization. Adjusted diluted EPS⁽¹⁾ in the fourth quarter of 2023 was $0.14, a decrease of 39% from $0.23 in the fourth quarter of 2022.

Net revenue for the year ended December 31, 2023 was $2.39 billion, an increase of 8% compared to $2.21 billion for the year ended December 31, 2022. Revenue growth was driven by all three business segments with AvKARE growing 31%, Generics growing 3% due to strong performance of our complex portfolio and biosimilars, and Specialty growing 4%. Net loss attributable to Amneal Pharmaceuticals, Inc. was $84 million for the year ended December 31, 2023, an improvement of $41 million compared to a net loss of $130 million for the year ended December 31, 2022. Adjusted EBITDA⁽¹⁾ for the year ended December 31, 2023 was $558 million, an increase of $44 million compared to the year ended December 31, 2022, reflective of strong revenue growth and continued operating expense leverage. Diluted loss per share for the year ended December 31, 2023 was $0.48, a decrease of 44% compared to diluted loss per share of $0.86 for the year ended December 31, 2022. Adjusted diluted EPS⁽¹⁾ in the year ended December 31, 2023 was $0.64, a decrease of 6% from $0.68 for the year ended December 31, 2022, due to higher EBITDA offset by higher interest expense.

⁽¹⁾ See “Non-GAAP Financial Measures” below.

2024 Financial Guidance

⁽¹⁾ Includes 100% of Adjusted EBITDA from the AvKARE acquisition. See also “Non-GAAP Financial Measures” below.
⁽²⁾ Accounts for 35% non-controlling interest in AvKARE. Assumes weighted-average diluted shares outstanding of approximately 317 million for the year ending December 31, 2024, compared to weighted-average diluted shares outstanding of 310 million for the year ended December 31, 2023. See also “Non-GAAP Financial Measures” below for assumptions used in calculation.
⁽³⁾ 2024 does not contemplate one time and non-recurring items such as legal settlements and other discrete items. 2023 includes the impact of a payment of $85.5 million for the Opana ER® antitrust litigation settlement, including interest.

Amneal’s 2024 estimates are based on management’s current expectations, including with respect to prescription trends, pricing levels, the timing of future product launches, the costs incurred and benefits realized of restructuring activities, and our long-term strategy. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company cannot provide a reconciliation between non-GAAP projections and the most directly comparable measures in accordance with GAAP without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses and benefits, asset impairments, legal settlements, and other gains and losses. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results.

Conference Call Information

Amneal will host a conference call and live webcast at 8:30 am Eastern Time today, March 1, 2024, to discuss its results. The live webcast and presentation will be accessible through the Investor Relations section of the Company’s website at https://investors.amneal.com. To access the call through a conference line, dial (833) 470-1428 (in the U.S.) with access code 743629. A replay of the conference call will be posted shortly after the call and will be available for seven days. For a list of toll-free international numbers, visit this website: https://www.netroadshow.com/events/global-numbers?confId=52762.

About Amneal

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX), headquartered in Bridgewater, NJ, is a fully integrated global pharmaceutical company. We make healthy possible through the development, manufacturing, and distribution of a diverse portfolio of over 270 pharmaceutical products, primarily within the United States. In its Generics segment, the Company is expanding across a broad range of complex product categories and therapeutic areas, including injectables and biosimilars. In its Specialty segment, Amneal has a growing portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders, with a pipeline focused on unmet needs. Through its AvKARE segment, the Company is a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. For more information, please visit www.amneal.com.

Cautionary Statement on Forward-Looking Statements

Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Such forward-looking statements include statements regarding management’s intentions, plans, beliefs, expectations, financial results, or forecasts for the future, including among other things: discussions of future operations; expected or estimated operating results and financial performance; and statements regarding our positioning, including our ability to drive sustainable long-term growth, and other non-historical statements. Words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and similar words, or the negatives thereof, are intended to identify estimates and forward-looking statements.

The reader is cautioned not to rely on these forward-looking statements. These forward-looking statements are based on current expectations of future events, including with respect to future market conditions, company performance and financial results, operational investments, business prospects, new strategies and growth initiatives, the competitive environment, and other events. If the underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of the Company.

Such risks and uncertainties include, but are not limited to: our ability to successfully develop, license, acquire and commercialize new products on a timely basis; the competition we face in the pharmaceutical industry from brand and generic drug product companies, and the impact of that competition on our ability to set prices; our ability to obtain exclusive marketing rights for our products; our revenues are derived from the sales of a limited number of products, a substantial portion of which are through a limited number of customers; the impact of a prolonged business interruption within our supply chain; the continuing trend of consolidation of certain customer groups; our dependence on third-party suppliers and distributors for raw materials for our products and certain finished goods; legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives; our dependence on information technology systems and infrastructure and the potential for cybersecurity incidents; our ability to attract, hire and retain highly skilled personnel; risks related to federal regulation of arrangements between manufacturers of branded and generic products; our reliance on certain licenses to proprietary technologies from time to time; the significant amount of resources we expend on research and development; the risk of claims brought against us by third parties; risks related to changes in the regulatory environment, including U.S. federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws; changes to Food and Drug Administration product approval requirements; the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers; our dependence on third-party agreements for a portion of our product offerings; our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, and the impact of interest rate fluctuations on such indebtedness; our potential expansion into additional international markets subjecting us to increased regulatory, economic, social and political uncertainties, including recent events affecting the financial services industry; our ability to identify, make and integrate acquisitions or investments in complementary businesses and products on advantageous terms; the impact of global economic, political or other catastrophic events; our obligations under a tax receivable agreement may be significant; and the high concentration of ownership of our class A common stock and the fact that we are controlled by the Amneal Group. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements included herein speak only as of the date hereof and we undertake no obligation to revise or update such statements to reflect the occurrence of events or circumstances after the date hereof.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted EPS, which are intended as supplemental measures of the Company’s performance that are not required by or presented in accordance with GAAP. Adjusted diluted EPS reflects diluted earnings per share based on adjusted net income, which is net loss adjusted to (A) exclude (i) non-cash interest, (ii) GAAP provision for (benefit from) income taxes, (iii) amortization, (iv) stock-based compensation, (v) acquisition, site closure expenses, and idle facility expenses, (vi) restructuring and other charges, (vii) loss on refinancing, (viii) charges related to certain legal matters, including interest, net, (ix) asset impairment charges, (x) regulatory approval milestone, (xi) change in fair value of contingent consideration, (xii) insurance recoveries for property losses and associated expenses (xiii) increase in tax receivable agreement liability, (xiv) system implementation expense, (xv) reorganization expenses, (xvi) other and (xvii) net income attributable to non-controlling interests not associated with class B common stock, and (B) include non-GAAP provision for income taxes. Non-GAAP adjusted diluted EPS was calculated assuming (i) the weighted average diluted shares outstanding of class A common stock and (ii) as if all shares of class B common stock were converted to shares of class A common stock as of January 1, 2022.

Management uses these non-GAAP measures internally to evaluate and manage the Company’s operations and to better understand its business because they facilitate a comparative assessment of the Company’s operating performance relative to its performance based on results calculated under GAAP. These non-GAAP measures also isolate the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. The compensation committee of the Company’s board of directors also uses certain of these measures to evaluate management’s performance and set its compensation. The Company believes that these non-GAAP measures also provide useful information to investors regarding certain financial and business trends relating to the Company’s financial condition and operating results facilitates an evaluation of the financial performance of the Company and its operations on a consistent basis. Providing this information therefore allows investors to make independent assessments of the Company’s financial performance, results of operations and trends while viewing the information through the eyes of management.

These non-GAAP measures are subject to limitations. The non-GAAP measures presented in this release may not be comparable to similarly titled measures used by other companies because other companies may not calculate one or more in the same manner. Additionally, the non-GAAP performance measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements; do not reflect changes in, or cash requirements for, working capital needs; and do not reflect interest expense, or the requirements necessary to service interest or principal payments on debt. Further, our historical adjusted results are not intended to project our adjusted results of operations or financial position for any future period. To compensate for these limitations, management presents and considers these non-GAAP measures in conjunction with the Company’s GAAP results; no non-GAAP measure should be considered in isolation from or as alternatives to any measure determined in accordance with GAAP. Readers should review the reconciliations included below, and should not rely on any single financial measure to evaluate the Company’s business.

A reconciliation of each historical non-GAAP measure to the most directly comparable GAAP measure is set forth below.

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