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Lannett Announces Fiscal 2018 Fourth-Quarter And Full-Year Financial Results; Provides Guidance For Fiscal 2019

Lannett
Posted on: 29 Aug 18

PHILADELPHIA, Aug. 28, 2018 /PRNewswire/ -- Lannett Company, Inc. (NYSE : LCI ) today reported financial results for its fiscal 2018 fourth quarter and full year ended June 30, 2018. 

"For both the fiscal 2018 fourth quarter and full year, our revenue and adjusted net income solidly improved over last year, and our overall financial performance was within our full-year guidance," said Tim Crew, chief executive officer of Lannett.  "Operationally, in the second half of fiscal 2018, we completed several transactions acquiring more than 25 market-ready or near-market-ready product lines that have added to our pipeline and in-licensing several more.  In addition, we implemented a restructuring plan at our Cody Laboratories subsidiary and began the consolidation of our product distribution function.  Importantly, we improved the pace of new product launches and these products were well received by our customers.

"As we announced last week, the company was informed that its contract with Jerome Stevens Pharmaceuticals (JSP) will not be renewed upon its expiration on March 23, 2019.  The company has been assured of a continuous supply of the products covered under the agreement through March of next year, and we expect these products to significantly contribute to our financial performance in fiscal 2019. 

"Our overarching goal is to fortify our business as we build for the future, while also preparing for the impact of the eventual expiration of the JSP contract.  The eight products we have launched since January 1st of this year are expected to contribute more than $50 million to revenues in the current fiscal year.  Given our large pool of approved but not yet launched products and filed drug product applications awaiting approval at the FDA, our goal is to continue this recent rate of launching products.  Moreover, we will implement a number of new cost reduction initiatives, which we estimate will generate substantial cost savings in fiscal 2019.

"To summarize, our path forward is clear and includes launching products already under our control, increasing our product offering through strategic relationships and product development, and lowering our costs.  We believe we are making progress on all of these fronts." 

For the fiscal 2018 fourth quarter, on a GAAP basis, net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017.  Gross profit was $66.5 million, or 39% of total net sales, compared with $58.9 million, or 42% of total net sales.  Research and development (R&D) expenses were $8.3 million compared with $11.4 million for the fiscal 2017 fourth quarter.  Selling, general and administrative (SG&A) expenses increased to $20.6 million from $16.5 million.  Restructuring expenses were $4.1 million compared with $1.8 million.  During the fiscal 2018 fourth quarter, the company recorded $25.0 million of asset impairment charges, primarily related to restructuring of the company's Cody Laboratories subsidiary.  Operating income was $8.6 million compared with $28.8 million.  Interest expense was $21.2 million compared with $20.7 million for the fourth quarter of fiscal 2017.  The company recorded an income tax benefit of $0.9 million versus income tax expense of $3.1 million in the prior-year period.  Net loss attributable to Lannett was $11.4 million, or $0.30 per share, versus net income attributable to Lannett of $5.7 million, or $0.15 per diluted share, for the fiscal 2017 fourth quarter.

For the fiscal 2018 fourth quarter reported on a Non-GAAP basis, adjusted net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017.  Adjusted gross profit was $76.0 million, or 44% of adjusted net sales, compared with $68.0 million, or 49% of adjusted net sales, for the prior-year fourth quarter.  Adjusted R&D expenses were $8.3 million compared with $11.4 million.  Adjusted SG&A expenses were $17.4 million compared with $16.2 million.  Adjusted operating income was $50.3 million compared with $40.4 million for the prior-year fourth quarter.  Adjusted interest expense was $16.6 million compared with $16.0 million for the fourth quarter of fiscal 2017.  Adjusted income tax expense was $9.6 million compared with $10.0 million in the prior-year period.  Adjusted net income attributable to Lannett increased to $24.5 million, or $0.64 per diluted share, from $15.1 million, or $0.40 per diluted share, for the fiscal 2017 fourth quarter.

For the fiscal 2018 full year, on a GAAP basis, net sales were $684.6 million compared with $637.3 million for fiscal 2017.  During fiscal 2017, the company recorded a $4.0 million adjustment to a settlement agreement with one of its customers, which resulted in total net sales for the prior year of $633.3 million.  Gross profit was $288.7 million, or 42% of total net sales, compared with $301.2 million, or 48% of total net sales, for fiscal 2017.  R&D expenses were $29.2 million compared with $42.1 million.  SG&A expenses were $82.2 million compared with $73.5 million.  Restructuring expenses were $7.1 million compared with $7.2 million.  In the current year, the company recorded a loss on sale of intangible asset of $15.5 million and asset impairment charges of $25.0 million.  In the prior year, the company recorded acquisition and integration-related expenses of $4.0 million and asset impairment charges of $88.1 million.  Operating income was $129.7 million compared with $86.4 million.  Interest expense was $85.6 million compared with $89.4 million for fiscal 2017.  The company recorded an income tax expense of $22.4 million compared with $1.1 million in the prior year.  Net income attributable to Lannett was $28.7 million, or $0.75 per diluted share, versus net loss attributable to Lannett of $0.6 million, or $0.02 per share, for fiscal 2017. 

For the fiscal 2018 full year reported on a Non-GAAP basis, adjusted net sales were $684.6 million compared with $637.3 million for fiscal 2017.  Adjusted gross profit was $326.2 million, or 48% of adjusted net sales, compared with $343.7 million, or 54% of adjusted net sales, for the prior year.  Adjusted R&D expenses were $29.2 million compared with $42.1 million.  Adjusted SG&A expenses were $71.0 million compared with $71.3 million.  Adjusted operating income was $226.0 million compared with $230.3 million for the prior year.  Adjusted interest expense declined to $65.4 million from $68.7 million for fiscal 2017.  Adjusted income tax expense was $45.8 million compared with $57.2 million in the prior-year period.  Adjusted net income attributable to Lannett increased to $118.2 million, or $3.10 per diluted share, compared with $107.9 million, or $2.86 per diluted share, for fiscal 2017.

For more information:
www.prnewswire.com/news-releases/lannett-announces-fiscal-2018-fourth-quarter-and-full-year-financial-results-provides-guidance-for-fiscal-2019-300703654.html

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

Last updated on: 29/08/2018

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