Amneal Reports Fourth Quarter and Full Year 2023 Financial Results
- None.
- None.
Insights
The financial results reported by Amneal Pharmaceuticals, Inc. indicate a mixed performance, with a slight increase in net revenue but a notable GAAP net loss for both Q4 2023 and the full year. The reported adjusted EBITDA and adjusted diluted EPS are critical metrics for investors as they exclude non-recurring items and provide a clearer picture of the company's operational performance. While the GAAP net loss is concerning, the growth in adjusted EBITDA suggests that the company is improving its operational efficiency. The decline in generics revenue is offset by growth in AvKARE and Specialty segments, highlighting a diversification strategy that may mitigate risks associated with generic drug pricing pressures.
The 2024 financial guidance provided by Amneal is optimistic, projecting an increase in net revenue and adjusted EBITDA. This forward-looking statement will likely influence investor sentiment, as it reflects management's confidence in the company's growth trajectory. However, it's important to note that the anticipated increase in capital expenditures could signal strategic investments in the company's future growth, possibly in R&D or infrastructure, but it also suggests a potential reduction in free cash flow in the short term.
Amneal's performance must be contextualized within the pharmaceutical industry, which is currently navigating a complex landscape of supply chain challenges and a global aging population. The company's focus on complex high-value products, biosimilars and specialty pharmaceuticals is strategically sound, as these areas are expected to see robust growth due to their complexity and barriers to entry, which can lead to higher margins. The reported growth in these segments could signal Amneal's potential to capture more market share and strengthen its competitive positioning.
Investors should also consider the impact of Amneal's term loan refinancing and non-cash intangible asset impairment charges on the net loss figures. These factors, while contributing to the net loss, do not necessarily reflect the company's ongoing operational performance. The increase in R&D and commercial investments mentioned as a cause for the decrease in adjusted EBITDA is a double-edged sword; while it may result in a temporary financial dip, it could lead to long-term benefits if it results in successful product development and market expansion.
Amneal's emphasis on its diversified pharmaceutical business, including AvKARE's 38% revenue growth and the expansion into biosimilars, aligns with broader industry trends towards specialty medication and alternatives to name-brand biologics. The company's strategic positioning to leverage these trends could be beneficial, as biosimilars offer a significant opportunity in the context of rising healthcare costs and patent expirations of major biologic drugs.
The decline in generic revenues reflects industry-wide challenges, including price erosion and competition, but the company's focus on complex generics may offer a buffer against these headwinds. The reported net loss attributable to non-cash intangible asset impairment charges suggests a revaluation of assets that could be due to these market conditions or strategic repositioning. The future product launches and the company's long-term strategy will be critical in evaluating Amneal's ability to sustain growth and profitability amidst these challenges.
‒ Full Year 2023 Performance Met or Exceeded Financial Guidance Metrics –
‒ Q4 2023 Net Revenue of
‒ Q4 2023 Adjusted Net Income(1) of
‒ Full Year 2023 Net Revenue of
‒ Full Year 2023 Adjusted Net Income(1) of
‒ Provides 2024 Financial Guidance of
“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
Net revenue for the year ended December 31, 2023 was
(1) See “Non-GAAP Financial Measures” below.
2024 Financial Guidance
|
Full Year 2024 Guidance |
Full Year 2023 Actuals |
Net revenue |
|
|
Adjusted EBITDA (1) |
|
|
Adjusted diluted EPS (2) |
|
|
Operating cash flow (3) |
|
|
Capital expenditures |
|
|
(1) Includes
(2) Accounts for
(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
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
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
About Amneal
Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX), headquartered in
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
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
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.
Amneal Pharmaceuticals, Inc.
|
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|||||||
Net revenue |
$ |
616,981 |
|
|
$ |
609,759 |
|
|
$ |
2,393,607 |
|
|
$ |
2,212,304 |
|
Cost of goods sold |
|
427,154 |
|
|
|
394,371 |
|
|
|
1,573,042 |
|
|
|
1,427,596 |
|
Gross profit |
|
189,827 |
|
|
|
215,388 |
|
|
|
820,565 |
|
|
|
784,708 |
|
Selling, general and administrative |
|
109,003 |
|
|
|
102,158 |
|
|
|
429,675 |
|
|
|
399,700 |
|
Research and development |
|
46,086 |
|
|
|
41,907 |
|
|
|
163,950 |
|
|
|
195,688 |
|
In-process research and development impairment charges |
|
30,800 |
|
|
|
12,970 |
|
|
|
30,800 |
|
|
|
12,970 |
|
Intellectual property legal development expenses |
|
478 |
|
|
|
1,362 |
|
|
|
3,828 |
|
|
|
4,358 |
|
Acquisition, transaction-related and integration (credit) expenses |
|
— |
|
|
|
(5 |
) |
|
|
— |
|
|
|
709 |
|
Restructuring and other charges |
|
114 |
|
|
|
109 |
|
|
|
1,749 |
|
|
|
1,421 |
|
Change in fair value of contingent consideration |
|
(13,710 |
) |
|
|
2,226 |
|
|
|
(14,497 |
) |
|
|
731 |
|
Insurance recoveries for property losses and associated expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,911 |
) |
Charges related to legal matters, net |
|
2,863 |
|
|
|
20,094 |
|
|
|
1,824 |
|
|
|
269,930 |
|
Other operating income |
|
— |
|
|
|
(1,465 |
) |
|
|
(1,138 |
) |
|
|
(3,960 |
) |
Operating income (loss) |
|
14,193 |
|
|
|
36,032 |
|
|
|
204,374 |
|
|
|
(94,928 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
(59,548 |
) |
|
|
(47,028 |
) |
|
|
(210,629 |
) |
|
|
(158,377 |
) |
Foreign exchange gain (loss), net |
|
2,288 |
|
|
|
569 |
|
|
|
1,671 |
|
|
|
(12,364 |
) |
Loss on refinancing |
|
(40,805 |
) |
|
|
— |
|
|
|
(40,805 |
) |
|
|
(291 |
) |
Other income, net |
|
411 |
|
|
|
2,772 |
|
|
|
5,119 |
|
|
|
17,833 |
|
Total other expense, net |
|
(97,654 |
) |
|
|
(43,687 |
) |
|
|
(244,644 |
) |
|
|
(153,199 |
) |
Loss before income taxes |
|
(83,461 |
) |
|
|
(7,655 |
) |
|
|
(40,270 |
) |
|
|
(248,127 |
) |
Provision for (benefit from) income taxes |
|
9,883 |
|
|
|
(1,797 |
) |
|
|
8,452 |
|
|
|
6,662 |
|
Net loss |
|
(93,344 |
) |
|
|
(5,858 |
) |
|
|
(48,722 |
) |
|
|
(254,789 |
) |
Less: Net (income) loss attributable to non-controlling interests |
|
(5,305 |
) |
|
|
1,525 |
|
|
|
(35,271 |
) |
|
|
125,241 |
|
Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest |
|
(98,649 |
) |
|
|
(4,333 |
) |
|
|
(83,993 |
) |
|
|
(129,548 |
) |
Accretion of redeemable non-controlling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(438 |
) |
Net loss attributable to Amneal Pharmaceuticals, Inc. |
$ |
(98,649 |
) |
|
$ |
(4,333 |
) |
|
$ |
(83,993 |
) |
|
$ |
(129,986 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
$ |
(0.40 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.86 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
243,711 |
|
|
|
151,476 |
|
|
|
176,136 |
|
|
|
150,944 |
|
Amneal Pharmaceuticals, Inc.
|
|||||
|
December 31,
|
|
December 31,
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
91,542 |
|
$ |
25,976 |
Restricted cash |
|
7,565 |
|
|
9,251 |
Trade accounts receivable, net |
|
613,732 |
|
|
741,791 |
Inventories |
|
581,384 |
|
|
530,735 |
Prepaid expenses and other current assets |
|
82,685 |
|
|
103,565 |
Related party receivables |
|
955 |
|
|
500 |
Total current assets |
|
1,377,863 |
|
|
1,411,818 |
Property, plant and equipment, net |
|
447,574 |
|
|
469,815 |
Goodwill |
|
598,629 |
|
|
598,853 |
Intangible assets, net |
|
890,423 |
|
|
1,096,093 |
Operating lease right-of-use assets |
|
30,329 |
|
|
38,211 |
Operating lease right-of-use assets - related party |
|
12,954 |
|
|
17,910 |
Financing lease right-of-use assets |
|
59,280 |
|
|
63,424 |
Other assets |
|
55,517 |
|
|
103,217 |
Total assets |
$ |
3,472,569 |
|
$ |
3,799,341 |
Liabilities and Stockholders’ Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable and accrued expenses |
$ |
534,662 |
|
$ |
538,199 |
Current portion of liabilities for legal matters |
|
76,988 |
|
|
107,483 |
Revolving credit facility |
|
179,000 |
|
|
60,000 |
Current portion of long-term debt, net |
|
34,125 |
|
|
29,961 |
Current portion of operating lease liabilities |
|
9,207 |
|
|
8,321 |
Current portion of operating lease liabilities - related party |
|
2,825 |
|
|
2,869 |
Current portion of financing lease liabilities |
|
2,467 |
|
|
3,488 |
Related party payables - short term |
|
7,321 |
|
|
2,479 |
Total current liabilities |
|
846,595 |
|
|
752,800 |
Long-term debt, net |
|
2,386,004 |
|
|
2,591,981 |
Note payable - related party |
|
41,447 |
|
|
39,706 |
Operating lease liabilities |
|
24,095 |
|
|
32,126 |
Operating lease liabilities - related party |
|
12,787 |
|
|
15,914 |
Financing lease liabilities |
|
58,566 |
|
|
60,769 |
Related party payable - long term |
|
11,776 |
|
|
9,649 |
Other long-term liabilities |
|
29,995 |
|
|
87,468 |
Total long-term liabilities |
|
2,564,670 |
|
|
2,837,613 |
Redeemable non-controlling interests |
|
41,293 |
|
|
24,949 |
Total stockholders' equity |
|
20,011 |
|
|
183,979 |
Total liabilities and stockholders' equity |
$ |
3,472,569 |
|
$ |
3,799,341 |
Amneal Pharmaceuticals, Inc.
|
|||||||
|
Years Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(48,722 |
) |
|
$ |
(254,789 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
229,400 |
|
|
|
240,175 |
|
Unrealized foreign currency (gain) loss |
|
(768 |
) |
|
|
15,190 |
|
Amortization of debt issuance costs and discount |
|
8,182 |
|
|
|
8,595 |
|
Loss on refinancing |
|
40,805 |
|
|
|
291 |
|
Intangible asset impairment charges |
|
66,932 |
|
|
|
24,081 |
|
Change in fair value of contingent consideration |
|
(14,497 |
) |
|
|
731 |
|
Stock-based compensation |
|
26,822 |
|
|
|
31,847 |
|
Inventory provision |
|
74,686 |
|
|
|
51,096 |
|
Insurance recoveries for property and equipment losses |
|
— |
|
|
|
(1,000 |
) |
Other operating charges and credits, net |
|
9,923 |
|
|
|
8,828 |
|
Changes in assets and liabilities: |
|
|
|
||||
Trade accounts receivable, net |
|
126,289 |
|
|
|
(79,717 |
) |
Inventories |
|
(126,182 |
) |
|
|
(102,396 |
) |
Prepaid expenses, other current assets and other assets |
|
37,814 |
|
|
|
9,882 |
|
Related party receivables |
|
(490 |
) |
|
|
646 |
|
Accounts payable, accrued expenses and other liabilities |
|
(94,446 |
) |
|
|
109,568 |
|
Related party payables |
|
9,829 |
|
|
|
2,072 |
|
Net cash provided by operating activities |
|
345,577 |
|
|
|
65,100 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(43,216 |
) |
|
|
(46,407 |
) |
Acquisition of intangible assets |
|
(22,388 |
) |
|
|
(41,800 |
) |
Deposits for future acquisition of property, plant, and equipment |
|
(3,585 |
) |
|
|
(2,388 |
) |
Acquisition of business |
|
— |
|
|
|
(84,714 |
) |
Proceeds from insurance recoveries for property and equipment losses |
|
— |
|
|
|
1,000 |
|
Net cash used in investing activities |
|
(69,189 |
) |
|
|
(174,309 |
) |
Cash flows from financing activities: |
|
|
|
||||
Payments of deferred financing and refinancing costs |
|
(162,415 |
) |
|
|
(1,663 |
) |
Payments of principal on debt, revolving credit facility, financing leases and other |
|
(414,080 |
) |
|
|
(123,272 |
) |
Proceeds from issuance of debt |
|
217,732 |
|
|
|
— |
|
Borrowings on revolving credit facility |
|
219,000 |
|
|
|
85,000 |
|
Proceeds from exercise of stock options |
|
451 |
|
|
|
662 |
|
Employee payroll tax withholding on restricted stock unit vesting |
|
(2,378 |
) |
|
|
(3,571 |
) |
Payments of deferred consideration for acquisitions - related party |
|
— |
|
|
|
(44,498 |
) |
Acquisition of redeemable non-controlling interests |
|
— |
|
|
|
(1,722 |
) |
Tax distributions to non-controlling interest |
|
(70,883 |
) |
|
|
(17,556 |
) |
Net cash used in financing activities |
|
(212,573 |
) |
|
|
(106,620 |
) |
Effect of foreign exchange rate on cash |
|
65 |
|
|
|
(5,683 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
63,880 |
|
|
|
(221,512 |
) |
Cash, cash equivalents, and restricted cash - beginning of period |
|
35,227 |
|
|
|
256,739 |
|
Cash, cash equivalents, and restricted cash - end of period |
$ |
99,107 |
|
|
$ |
35,227 |
|
Cash and cash equivalents - end of period |
$ |
91,542 |
|
|
$ |
25,976 |
|
Restricted cash - end of period |
$ |
7,565 |
|
|
$ |
9,251 |
|
Cash, cash equivalents, and restricted cash - end of period |
$ |
99,107 |
|
|
$ |
35,227 |
|
Amneal Pharmaceuticals, Inc.
|
|||||||||||||||
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(93,344 |
) |
|
$ |
(5,858 |
) |
|
$ |
(48,722 |
) |
|
$ |
(254,789 |
) |
Adjusted to add (deduct): |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
59,548 |
|
|
|
47,028 |
|
|
|
210,629 |
|
|
|
158,377 |
|
Provision for (benefit from) income taxes |
|
9,883 |
|
|
|
(1,797 |
) |
|
|
8,452 |
|
|
|
6,662 |
|
Depreciation and amortization |
|
56,933 |
|
|
|
61,056 |
|
|
|
229,400 |
|
|
|
240,175 |
|
EBITDA (Non-GAAP) |
$ |
33,020 |
|
|
$ |
100,429 |
|
|
$ |
399,759 |
|
|
$ |
150,425 |
|
Adjusted to add (deduct): |
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
5,974 |
|
|
|
7,831 |
|
|
|
26,822 |
|
|
|
31,847 |
|
Acquisition, site closure, and idle facility expenses (1) |
|
1,186 |
|
|
|
3,452 |
|
|
|
7,017 |
|
|
|
15,682 |
|
Restructuring and other charges |
|
114 |
|
|
|
109 |
|
|
|
1,650 |
|
|
|
1,378 |
|
Loss on refinancing |
|
40,805 |
|
|
|
— |
|
|
|
40,805 |
|
|
|
291 |
|
Charges related to legal matters, net (2) |
|
2,863 |
|
|
|
20,094 |
|
|
|
11,824 |
|
|
|
269,930 |
|
Asset impairment charges (3) |
|
67,228 |
|
|
|
18,551 |
|
|
|
70,107 |
|
|
|
26,909 |
|
Foreign exchange (gain) loss |
|
(2,288 |
) |
|
|
(569 |
) |
|
|
(1,671 |
) |
|
|
12,364 |
|
Change in fair value of contingent consideration |
|
(13,710 |
) |
|
|
2,226 |
|
|
|
(14,497 |
) |
|
|
731 |
|
Insurance recoveries for property losses and associated expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,911 |
) |
Regulatory approval milestone |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
Increase in tax receivable agreement liability |
|
1,217 |
|
|
|
631 |
|
|
|
3,124 |
|
|
|
631 |
|
System implementation expense (4) |
|
934 |
|
|
|
727 |
|
|
|
5,363 |
|
|
|
2,818 |
|
Reorganization expenses(5) |
|
4,630 |
|
|
|
— |
|
|
|
5,927 |
|
|
|
393 |
|
Other |
|
175 |
|
|
|
551 |
|
|
|
1,984 |
|
|
|
(2,378 |
) |
Adjusted EBITDA (Non-GAAP) |
$ |
142,148 |
|
|
$ |
154,032 |
|
|
$ |
558,214 |
|
|
$ |
514,110 |
|
Amneal Pharmaceuticals, Inc. Non-GAAP Reconciliations (unaudited; in thousands, except per share amounts) |
|||||||||||||||
Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted Earnings per Share |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss |
$ |
(93,344 |
) |
|
$ |
(5,858 |
) |
|
$ |
(48,722 |
) |
|
$ |
(254,789 |
) |
Adjusted to add (deduct): |
|
|
|
|
|
|
|
||||||||
Non-cash interest |
|
1,016 |
|
|
|
1,885 |
|
|
|
7,017 |
|
|
|
7,715 |
|
GAAP provision for (benefit from) income taxes |
|
9,883 |
|
|
|
(1,797 |
) |
|
|
8,452 |
|
|
|
6,662 |
|
Amortization |
|
39,208 |
|
|
|
42,851 |
|
|
|
157,219 |
|
|
|
164,997 |
|
Stock-based compensation expense |
|
5,974 |
|
|
|
7,831 |
|
|
|
26,822 |
|
|
|
31,847 |
|
Acquisition, site closure expenses, and idle facility expenses (1) |
|
1,186 |
|
|
|
3,452 |
|
|
|
7,017 |
|
|
|
15,682 |
|
Restructuring and other charges |
|
114 |
|
|
|
109 |
|
|
|
1,650 |
|
|
|
1,378 |
|
Loss on refinancing |
|
40,805 |
|
|
|
— |
|
|
|
40,805 |
|
|
|
291 |
|
Charges related to legal matters, including interest, net (2) |
|
3,580 |
|
|
|
21,564 |
|
|
|
14,784 |
|
|
|
273,226 |
|
Asset impairment charges (3) |
|
67,143 |
|
|
|
18,485 |
|
|
|
70,015 |
|
|
|
26,843 |
|
Regulatory approval milestone |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
Change in fair value of contingent consideration |
|
(13,710 |
) |
|
|
2,226 |
|
|
|
(14,497 |
) |
|
|
731 |
|
Insurance recoveries for property losses and associated expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,911 |
) |
Increase in tax receivable agreement liability |
|
1,217 |
|
|
|
631 |
|
|
|
3,124 |
|
|
|
631 |
|
System implementation expense (4) |
|
934 |
|
|
|
727 |
|
|
|
5,363 |
|
|
|
2,818 |
|
Reorganization expenses (5) |
|
4,630 |
|
|
|
— |
|
|
|
5,927 |
|
|
|
393 |
|
Other |
|
323 |
|
|
|
552 |
|
|
|
2,466 |
|
|
|
(2,235 |
) |
Provision for income taxes (6) |
|
(17,563 |
) |
|
|
(15,297 |
) |
|
|
(60,014 |
) |
|
|
(56,450 |
) |
Net income attributable to non-controlling interests not associated with our class B common stock |
|
(7,831 |
) |
|
|
(5,958 |
) |
|
|
(29,873 |
) |
|
|
(15,121 |
) |
Adjusted net income (Non-GAAP) |
$ |
43,565 |
|
|
$ |
71,403 |
|
|
$ |
197,555 |
|
|
$ |
207,708 |
|
Weighted average diluted shares outstanding (Non-GAAP) (7) |
|
314,986 |
|
|
|
305,145 |
|
|
|
310,234 |
|
|
|
304,598 |
|
Adjusted diluted earnings per share (Non-GAAP) |
$ |
0.14 |
|
|
$ |
0.23 |
|
|
$ |
0.64 |
|
|
$ |
0.68 |
|
Amneal Pharmaceuticals, Inc.
|
|
Explanations for Reconciliations of Net Loss to EBITDA and Adjusted EBITDA and
|
|
(1) |
Acquisition, site closure, and idle facility expenses for the three months and year ended December 31, 2023 primarily included site closure costs associated with the planned cessation of manufacturing at our |
| (2) | For the three months ended December 31, 2023, charges related to legal matters, net were primarily comprised of a settlement of commercial antitrust litigation. For the year ended December 31, 2023, charges related to legal matters, net were primarily comprised of (i) charges associated with civil prescription opioid litigation, (ii) a settlement of a customer claim, (iii) a settlement of commercial antitrust litigation, and (iv) a settlement of a stockholder derivative lawsuit. For the three months ended December 31, 2022, charges related to legal matters, net primarily related to prescription opioid litigation. For the year ended December 31, 2022, charges related to legal matters, net, primarily included charges for (i) the settlements of the Opana ER® antitrust litigation and (ii) prescription opioid litigation, offset in part by insurance recoveries associated with class action shareholder lawsuits. |
| (3) | Asset impairment charges for the three months and year ended December 31, 2023 were primarily associated with the write-offs of intangibles assets. Asset impairment charges for the three months and year ended December 31, 2022 were associated with the write-offs of intangibles assets and equipment. |
| (4) | System implementation expense for the three months ended December 31, 2023 was primarily for the implementation of sales deduction software and indirect procurement software. System implementation expense for the three months ended December 31, 2022 was primarily for indirect procurement software. System implementation expense for the years ended December 31, 2023 and 2022 was primarily for the implementation of indirect procurement software, sales deduction software, and financial statement consolidation software. System implementation expenses were associated with the further integration of our acquired businesses. |
| (5) | On November 7, 2023, the Company implemented a plan to reorganize and simplify its corporate structure by eliminating its umbrella partnership-C-corporation structure and converting to a more traditional C-corporation structure, whereby all stockholders hold their voting and economic interests directly through the public company (“Reorganization”). For the three months ended December 31, 2023 and the years ended December 31, 2023 and 2022, Reorganization expenses were comprised of professional fees. |
| (6) |
The non-GAAP effective tax rates for the three months and year ended December 31, 2023 were |
| (7) | Weighted average diluted shares outstanding consisted of class A common stock and class B common stock, as if all shares of class B common stock were converted to class A common stock as of January 1, 2022. |
Amneal Pharmaceuticals, Inc.
Reconciliation of GAAP to Non-GAAP Operating Results (1)
|
||||||||||||||||||||||||
|
|
Three Months Ended December 31, 2023 |
|
Three Months Ended December 31, 2022 |
||||||||||||||||||||
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
|
$ |
363,037 |
|
|
$ |
— |
|
|
$ |
363,037 |
|
|
$ |
399,165 |
|
|
$ |
— |
|
|
$ |
399,165 |
|
Cost of goods sold (2) |
|
|
221,861 |
|
|
|
(14,167 |
) |
|
|
207,694 |
|
|
|
249,795 |
|
|
|
(16,875 |
) |
|
|
232,920 |
|
Gross profit |
|
|
141,176 |
|
|
|
14,167 |
|
|
|
155,343 |
|
|
|
149,370 |
|
|
|
16,875 |
|
|
|
166,245 |
|
Gross margin % |
|
|
38.9 |
% |
|
|
|
|
42.8 |
% |
|
|
37.4 |
% |
|
|
|
|
41.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (3) |
|
|
30,734 |
|
|
|
(1,849 |
) |
|
|
28,885 |
|
|
|
25,371 |
|
|
|
(1,319 |
) |
|
|
24,052 |
|
Research and development (4) |
|
|
33,663 |
|
|
|
(654 |
) |
|
|
33,009 |
|
|
|
38,127 |
|
|
|
(1,112 |
) |
|
|
37,015 |
|
In-process research and development impairment charges |
|
|
26,500 |
|
|
|
(26,500 |
) |
|
|
— |
|
|
|
12,970 |
|
|
|
(12,970 |
) |
|
|
— |
|
Intellectual property legal development expenses |
|
|
468 |
|
|
|
— |
|
|
|
468 |
|
|
|
1,332 |
|
|
|
— |
|
|
|
1,332 |
|
Acquisition, transaction-related and integration expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
Restructuring and other charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
108 |
|
|
|
(108 |
) |
|
|
— |
|
Charges related to legal matters, net |
|
|
2,863 |
|
|
|
(2,863 |
) |
|
|
— |
|
|
|
19,958 |
|
|
|
(19,958 |
) |
|
|
— |
|
Other operating income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,465 |
) |
|
|
— |
|
|
|
(1,465 |
) |
Operating income |
|
$ |
46,948 |
|
|
$ |
46,033 |
|
|
$ |
92,981 |
|
|
$ |
52,968 |
|
|
$ |
52,343 |
|
|
$ |
105,311 |
|
| (1) | Operating results for the sale of Amneal products by AvKARE were included in our Generics segment. |
| (2) |
Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ( |
| (3) |
Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ( |
| (4) | Adjustments for the three months ended December 31, 2023 and 2022 were comprised of stock-based compensation expense. |
Amneal Pharmaceuticals, Inc. Generics Segment |
||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Operating Results (1) (unaudited; $ in thousands) |
||||||||||||||||||||||||
|
|
Year Ended December 31, 2023 |
|
Year Ended December 31, 2022 |
||||||||||||||||||||
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
|
$ |
1,471,401 |
|
|
$ |
— |
|
|
$ |
1,471,401 |
|
|
$ |
1,432,073 |
|
|
$ |
— |
|
|
$ |
1,432,073 |
|
Cost of goods sold (2) |
|
|
913,869 |
|
|
|
(56,450 |
) |
|
|
857,419 |
|
|
|
896,031 |
|
|
|
(70,080 |
) |
|
|
825,951 |
|
Gross profit |
|
|
557,532 |
|
|
|
56,450 |
|
|
|
613,982 |
|
|
|
536,042 |
|
|
|
70,080 |
|
|
|
606,122 |
|
Gross margin % |
|
|
37.9 |
% |
|
|
|
|
41.7 |
% |
|
|
37.4 |
% |
|
|
|
|
42.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (3) |
|
|
119,912 |
|
|
|
(7,411 |
) |
|
|
112,501 |
|
|
|
109,781 |
|
|
|
(9,960 |
) |
|
|
99,821 |
|
Research and development (4) |
|
|
132,233 |
|
|
|
(2,555 |
) |
|
|
129,678 |
|
|
|
167,509 |
|
|
|
(4,819 |
) |
|
|
162,690 |
|
In-process research and development impairment charges |
|
|
26,500 |
|
|
|
(26,500 |
) |
|
|
— |
|
|
|
12,970 |
|
|
|
(12,970 |
) |
|
|
— |
|
Intellectual property legal development expenses |
|
|
3,708 |
|
|
|
— |
|
|
|
3,708 |
|
|
|
4,251 |
|
|
|
— |
|
|
|
4,251 |
|
Acquisition, transaction-related and integration expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25 |
|
|
|
(25 |
) |
|
|
— |
|
Restructuring and other charges |
|
|
211 |
|
|
|
(112 |
) |
|
|
99 |
|
|
|
821 |
|
|
|
(821 |
) |
|
|
— |
|
Insurance recoveries for property losses and associated expenses, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,911 |
) |
|
|
1,911 |
|
|
|
— |
|
(Credit) charges related to legal matters, net |
|
|
(64 |
) |
|
|
(9,936 |
) |
|
|
(10,000 |
) |
|
|
22,400 |
|
|
|
(22,400 |
) |
|
|
— |
|
Other operating income |
|
|
(1,138 |
) |
|
|
— |
|
|
|
(1,138 |
) |
|
|
(3,960 |
) |
|
|
— |
|
|
|
(3,960 |
) |
Operating income |
|
$ |
276,170 |
|
|
$ |
102,964 |
|
|
$ |
379,134 |
|
|
$ |
224,156 |
|
|
$ |
119,164 |
|
|
$ |
343,320 |
|
| (1) | Operating results for the sale of Amneal products by AvKARE were included in our Generics segment. |
| (2) |
Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ( |
| (3) |
Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ( |
| (4) | Adjustments for the years ended December 31, 2023 and 2022 were comprised of stock-based compensation expense. |
Amneal Pharmaceuticals, Inc. Specialty Segment Reconciliation of GAAP to Non-GAAP Operating Results (unaudited; $ in thousands) |
|||||||||||||||||||||||
|
Three Months Ended December 31, 2023 |
|
Three Months Ended December 31, 2022 |
||||||||||||||||||||
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
$ |
104,481 |
|
|
$ |
— |
|
|
$ |
104,481 |
|
|
$ |
102,550 |
|
|
$ |
— |
|
|
$ |
102,550 |
|
Cost of goods sold (1) |
|
79,023 |
|
|
|
(59,940 |
) |
|
|
19,083 |
|
|
|
52,069 |
|
|
|
(32,652 |
) |
|
|
19,417 |
|
Gross profit |
|
25,458 |
|
|
|
59,940 |
|
|
|
85,398 |
|
|
|
50,481 |
|
|
|
32,652 |
|
|
|
83,133 |
|
Gross margin % |
|
24.4 |
% |
|
|
|
|
81.7 |
% |
|
|
49.2 |
% |
|
|
|
|
81.1 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (2) |
|
20,243 |
|
|
|
(39 |
) |
|
|
20,204 |
|
|
|
20,259 |
|
|
|
(119 |
) |
|
|
20,140 |
|
Research and development (2) |
|
12,423 |
|
|
|
(451 |
) |
|
|
11,972 |
|
|
|
3,780 |
|
|
|
(372 |
) |
|
|
3,408 |
|
In-process research and development impairment charges |
|
4,300 |
|
|
|
(4,300 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Intellectual property legal development expenses |
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
|
30 |
|
|
|
— |
|
|
|
30 |
|
Acquisition, transaction-related and integration expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
(2 |
) |
|
|
— |
|
Restructuring and other charges |
|
92 |
|
|
|
(92 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Change in fair value of contingent consideration (3) |
|
(13,710 |
) |
|
|
13,710 |
|
|
|
— |
|
|
|
2,226 |
|
|
|
(2,226 |
) |
|
|
— |
|
Operating income |
$ |
2,100 |
|
|
$ |
51,112 |
|
|
$ |
53,212 |
|
|
$ |
24,184 |
|
|
$ |
35,371 |
|
|
$ |
59,555 |
|
| (1) |
Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ( |
|
|
| (2) | Adjustments for the three months ended December 31, 2023 and 2022 were comprised of stock-based compensation expense. |
|
|
| (3) | Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC. |
Amneal Pharmaceuticals, Inc. Specialty Segment Reconciliation of GAAP to Non-GAAP Operating Results (unaudited; $ in thousands) |
|||||||||||||||||||||||
|
Year Ended December 31, 2023 |
|
Year Ended December 31, 2022 |
||||||||||||||||||||
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
$ |
390,457 |
|
|
$ |
— |
|
|
$ |
390,457 |
|
|
$ |
374,121 |
|
|
$ |
— |
|
|
$ |
374,121 |
|
Cost of goods sold (1) |
|
214,277 |
|
|
|
(137,811 |
) |
|
|
76,466 |
|
|
|
182,432 |
|
|
|
(113,512 |
) |
|
|
68,920 |
|
Gross profit |
|
176,180 |
|
|
|
137,811 |
|
|
|
313,991 |
|
|
|
191,689 |
|
|
|
113,512 |
|
|
|
305,201 |
|
Gross margin % |
|
45.1 |
% |
|
|
|
|
80.4 |
% |
|
|
51.2 |
% |
|
|
|
|
81.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (2) |
|
88,137 |
|
|
|
(688 |
) |
|
|
87,449 |
|
|
|
90,031 |
|
|
|
(913 |
) |
|
|
89,118 |
|
Research and development (2) |
|
31,717 |
|
|
|
(1,785 |
) |
|
|
29,932 |
|
|
|
28,179 |
|
|
|
(1,471 |
) |
|
|
26,708 |
|
In-process research and development impairment charges |
|
4,300 |
|
|
|
(4,300 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Intellectual property legal development expenses |
|
120 |
|
|
|
— |
|
|
|
120 |
|
|
|
107 |
|
|
|
— |
|
|
|
107 |
|
Acquisition, transaction-related and integration expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
49 |
|
|
|
(49 |
) |
|
|
— |
|
Restructuring and other charges |
|
1,105 |
|
|
|
(1,105 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Change in fair value of contingent consideration (3) |
|
(14,497 |
) |
|
|
14,497 |
|
|
|
— |
|
|
|
731 |
|
|
|
(731 |
) |
|
|
— |
|
Operating income |
$ |
65,298 |
|
|
$ |
131,192 |
|
|
$ |
196,490 |
|
|
$ |
72,592 |
|
|
$ |
116,676 |
|
|
$ |
189,268 |
|
| (1) |
Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ( |
|
|
| (2) | Adjustments for the years ended December 31, 2023 and 2022 were comprised of stock-based compensation expense. |
|
|
| (3) | Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC. |
Amneal Pharmaceuticals, Inc. AvKARE Segment Reconciliation of GAAP to Non-GAAP Operating Results (1) (unaudited; $ in thousands) |
|||||||||||||||||||||||
|
Three Months Ended December 31, 2023 |
|
Three Months Ended December 31, 2022 |
||||||||||||||||||||
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
$ |
149,463 |
|
|
$ |
— |
|
|
$ |
149,463 |
|
|
$ |
108,044 |
|
|
$ |
— |
|
|
$ |
108,044 |
|
Cost of goods sold |
|
126,270 |
|
|
|
— |
|
|
|
126,270 |
|
|
|
92,507 |
|
|
|
— |
|
|
|
92,507 |
|
Gross profit |
|
23,193 |
|
|
|
— |
|
|
|
23,193 |
|
|
|
15,537 |
|
|
|
— |
|
|
|
15,537 |
|
Gross margin % |
|
15.5 |
% |
|
|
|
|
15.5 |
% |
|
|
14.4 |
% |
|
|
|
|
14.4 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (2) |
|
14,073 |
|
|
|
(3,764 |
) |
|
|
10,309 |
|
|
|
14,298 |
|
|
|
(4,932 |
) |
|
|
9,366 |
|
Operating income |
$ |
9,120 |
|
|
$ |
3,764 |
|
|
$ |
12,884 |
|
|
$ |
1,239 |
|
|
$ |
4,932 |
|
|
$ |
6,171 |
|
(1) |
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment. |
|
|
(2) |
Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ( |
Amneal Pharmaceuticals, Inc. AvKARE Segment Reconciliation of GAAP to Non-GAAP Operating Results (1) (unaudited; $ in thousands) |
|||||||||||||||||||||||
|
Year Ended December 31, 2023 |
|
Year Ended December 31, 2022 |
||||||||||||||||||||
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
||||||||||||
Net revenue |
$ |
531,749 |
|
|
$ |
— |
|
|
$ |
531,749 |
|
|
$ |
406,110 |
|
|
$ |
— |
|
|
$ |
406,110 |
|
Cost of goods sold |
|
444,896 |
|
|
|
— |
|
|
|
444,896 |
|
|
|
349,133 |
|
|
|
— |
|
|
|
349,133 |
|
Gross profit |
|
86,853 |
|
|
|
— |
|
|
|
86,853 |
|
|
|
56,977 |
|
|
|
— |
|
|
|
56,977 |
|
Gross margin % |
|
16.3 |
% |
|
|
|
|
16.3 |
% |
|
|
14.0 |
% |
|
|
|
|
14.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative (2) |
|
55,341 |
|
|
|
(15,373 |
) |
|
|
39,968 |
|
|
|
53,659 |
|
|
|
(19,324 |
) |
|
|
34,335 |
|
Operating income |
$ |
31,512 |
|
|
$ |
15,373 |
|
|
$ |
46,885 |
|
|
$ |
3,318 |
|
|
$ |
19,324 |
|
|
$ |
22,642 |
|
(1) |
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment. |
|
|
(2) |
Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of amortization ( |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240301034971/en/
Anthony DiMeo
Head of Investor Relations
anthony.dimeo@amneal.com
Source: Amneal Pharmaceuticals, Inc.
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