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Press Release

Lannett Announces Record Net Sales For Fiscal 2016 Fourth-Quarter And Full-Year

Lannett
Posted on: 25 Aug 16

PHILADELPHIA, Aug. 23, 2016 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2016 fourth quarter and full year ended June 30, 2016.  As previously announced, the company completed the acquisition of Kremers Urban Pharmaceuticals Inc. (KU) on November 25, 2015.  Accordingly, fiscal 2016 fourth-quarter and full-year financial results include the operations of KU since the acquisition date. 

"Our record net sales for the fourth quarter were driven by the addition of KU's operations and higher sales of key products," said Arthur Bedrosian, chief executive officer of Lannett.  "Today's announcement builds upon our recent positive momentum and caps a number of significant successes over the last six months.  These achievements include refinancing a sizable portion of debt that will result in savings of approximately $170 million in cash interest over the life of the loans, expanding and advancing our robust pipeline, receiving a number of product approvals and making solid progress on our cost reduction program.  All of which, combined with our increased size and scale resulting from our acquisition strategy, gives us great confidence in Lannett's future."

For the fiscal 2016 fourth quarter, total net sales increased 70% to $168.9 million from $99.3 million for the fourth quarter of fiscal 2015.  Gross profit was $79.9 million compared with $72.0 million.  Gross profit as a percentage of net sales was 47% compared with 72% in last year's fourth quarter, primarily due to the inclusion of KU's lower-margin business, as well as amortization of acquired intangible assets and other purchase accounting related expenses.  Research and development (R&D) expenses increased to $13.0 million from $7.0 million for the fiscal 2015 fourth quarter.  Selling, general and administrative (SG&A) expenses were $22.0 million compared with $12.3 million.  Acquisition and integration-related expenses were $4.2 million compared with $1.7 million in the prior-year fourth quarter.  In the fourth quarter of fiscal 2016, the company recorded restructuring expenses of $2.4 million related to a cost reduction plan implemented in February 2016 and an impairment charge of $8.0 million related to acquired intangible assets.  Operating income was $30.4 million compared with $51.0 million.  The company recorded an income tax benefit of $2.9 million in the fourth quarter of fiscal 2016 versus income tax expense of $17.2 million in the prior-year period.  Interest expense was $27.1 million compared with $88 thousand for the fourth quarter of fiscal 2015.  Net income attributable to Lannett was $3.6 million, or $0.10 per diluted share, compared to net income attributable to Lannett of $33.9 million, or $0.91 per diluted share, for the fiscal 2015 fourth quarter. 

For the fiscal 2016 fourth quarter reported on a Non-GAAP basis, adjusted total net sales increased to $168.9 million from $99.3 million for the fourth quarter of fiscal 2015.  Adjusted gross profit was $91.9 million, or 54% of adjusted total net sales, compared with $72.2 million, or 73% of adjusted total net sales, for the fiscal 2015 fourth quarter.  Adjusted R&D expenses increased to $13.1 million from $7.0 million.  Adjusted SG&A expenses were $17.8 million compared with $12.3 million.  Adjusted operating income increased to $61.0 million from $52.9 million for the prior-year fourth quarter.  Adjusted net income attributable to Lannett was $27.5 million, or $0.73 per diluted share, compared with $35.2 million, or $0.94 per diluted share, for the fiscal 2015 fourth quarter.

For the 2016 fiscal year, total net sales were $542.5 million compared with $406.8 million for fiscal 2015.  Fiscal 2016 total net sales were reduced by a previously announced, pre-tax, non-recurring settlement agreement of $23.6 million, which was recorded as a reduction to net sales during the fiscal 2016 third quarter.  Gross profit was $286.5 million compared with $306.4 million.  Gross profit as a percentage of net sales was 53% compared with 75% for fiscal 2015, primarily due to the inclusion of KU's lower-margin business, as well as amortization of acquired intangible assets and other purchase accounting related expenses.  R&D expenses increased to $45.1 million from $30.3 million for fiscal 2015.  SG&A expenses were $68.3 million compared with $45.2 million.  Acquisition and integration-related expenses were $27.2 million compared with $4.3 million in the prior year.  Fiscal 2016 included restructuring expenses of $7.2 million and the impairment charge of $8.0 million.  Operating income was $130.8 million compared with $226.5 million.  Interest expense was $65.9 million compared with $207 thousand for fiscal 2015.  Net income attributable to Lannett was $44.8 million, or $1.20 per diluted share, compared with $149.9 million, or $4.04 per diluted share, for fiscal 2015.

For the fiscal 2016 full year reported on a Non-GAAP basis, adjusted total net sales increased to $566.1 million from $406.8 million for fiscal 2015.  Adjusted gross profit was $348.1 million, or 61% of adjusted total net sales, compared with $306.6 million, or 75% of adjusted total net sales, for fiscal 2015.  Adjusted R&D expenses increased to $45.1 million from $30.3 million.  Adjusted SG&A expenses were $59.0 million compared with $45.2 million.  Adjusted operating income increased to $244.0 million from $231.1 million for the prior year.  Adjusted net income attributable to Lannett was $127.8 million, or $3.42 per diluted share, compared with $153.0 million, or $4.12 per diluted share, for fiscal 2015. 

For more information:
www.prnewswire.com/news-releases/lannett-announces-record-net-sales-for-fiscal-2016-fourth-quarter-and-full-year-300317233.html

Editor's Details

Mike Wood
PharmiWeb.com
www.pharmiweb.com
editor@pharmiweb.com

Last updated on: 25/08/2016

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