LANNETT REPORTS FISCAL 2022 THIRD-QUARTER FINANCIAL RESULTS

Rhea-AI Summary

Lannett Company reported Q3 fiscal 2022 results with net sales of $78.4 million, down from $112.4 million YOY. Gross profit dropped to $3.1 million (4% of net sales) from $26.5 million (24%). The company incurred a net loss of $34.9 million or $0.86 per share. Cash increased to over $106 million after selling its liquid manufacturing plant for $10.5 million. Despite ongoing competitive pressure, Lannett is progressing on its pivotal biosimilar insulin glargine trial, expecting results by year-end, aiming for a 2024 launch.

Positive

• Cash position strengthened to over $106 million.
• Progress in pivotal biosimilar insulin glargine trial with 25% enrollment.
• Restructuring expected to yield annual cost savings of $20 million.

Negative

• Net sales decreased by $34 million year-over-year.
• Gross profit declined from 24% to 4% of net sales.
• Net loss increased to $34.9 million, compared to $7.1 million the previous year.

Q3 Business and Financial Highlights:

• Net Sales were $78.4 Million
• Cash in Excess of $106 Million at March 31
• Completed Sale of Liquid Manufacturing Plant for $10.5 Million; Major Elements of November 2021 Restructuring Plan Expected to be Completed by June 30
• Pivotal Biosimilar Insulin Glargine Clinical Trial Progressing

TREVOSE, Pa., May 4, 2022 /PRNewswire/ -- Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2022 third quarter ended March 31, 2022. 

"For the quarter, ongoing competitive pressures and unusually high product returns for a few key products impacted our topline and gross profit," said Tim Crew, chief executive officer of Lannett. "Even so, our adjusted gross margin percentage rose from the previous quarter and our bottom line was modestly better than our internal estimates. Our cash position strengthened to more than $106 million at March 31, 2022, in part due to the sale of our liquid manufacturing plant during the quarter.

"In late March, we initiated the pivotal clinical trial for our biosimilar insulin glargine, by far the biggest and most important opportunity currently in our pipeline. The trial is progressing with approximately 25% of our subject enrollment goal achieved. We expect top line results for the study will be available toward the end of this calendar year. If successful, we anticipate filing the Biologics License Application (BLA) for a biosimilar and interchangeable insulin glargine to Sanofi's Lantus^® Solostar and, if approved, potentially launching the product in the first half of 2024. We also are advancing our biosimilar insulin aspart product, which continues to track to a potential launch in 2025, if approved.

"Looking ahead to the second half of the current calendar year, we anticipate the existing competitive environment to continue, which we expect to be partially offset by savings from our recent restructuring efforts. We also anticipate launching several products next year with potentially more meaningful financial contributions than our recent historical average."

Restructuring, Cost Reduction Initiatives - Update

In November 2021, the company announced a restructuring plan to further optimize its operations, improve efficiencies and reduce costs to improve competitiveness. On March 31, 2022, the company finalized the sale of its liquid drug manufacturing plant in Carmel, New York for total consideration of $10.5 million, having previously completed the restructuring of its R&D function and targeted headcount reductions. The transfer of certain products from the Carmel plant to the company's main plant is in process and expected to continue into next calendar year. The major elements of the company's restructuring plan are expected to be completed by June 30, 2022 and the plan is expected to generate approximately $20 million of annual cost savings.

Third Quarter Financial Results: Fiscal 2022 vs Fiscal 2021

GAAP basis:

• Net sales were $78.4 million compared with $112.4 million
• Gross profit was $3.1 million, or 4% of net sales, compared with $26.5 million, or 24% of net sales
• Restructuring expenses were $1.8 million
• Net loss was $34.9 million, or $0.86 per share, compared with $7.1 million, or $0.18 per share

Non-GAAP basis:

• Net sales were $78.4 million compared with $112.4 million
• Adjusted gross profit was $9.3 million, or 12% of net sales, compared with $30.4 million, or 27% of net sales
• Adjusted interest expense increased to $12.9 million from $9.8 million
• Adjusted net loss was $16.7 million, or $0.41 per share, versus adjusted net income of $1.0 million, or $0.02 per diluted share
• Adjusted EBITDA was $98 thousand compared with $17.0 million

Guidance for Fiscal 2022

Based on its current outlook, the company updated and/or tightened certain elements of its guidance for fiscal year 2022, as follows:

	GAAP	Adjusted*
Net sales	$335 million to $350 million, from $335 million to $360 million	$335 million to $350 million, from $335 million to $360 million
Gross margin %	Approximately 8.5% to 9.5%, from approximately 10% to 11%	Approximately 13.5% to 14.5%, from approximately 14% to 15%
R&D expense	$22 million to $24 million, from $23 million to $26 million	$22 million to $24 million, from $23 million to $26 million
SG&A expense	$71 million to $73 million, from $66.5 million to $69.5 million	$55 million to $57 million, from $55 million to $58 million
Restructuring expense	$3 million to $4 million	$--
Asset impairment	$49.4 million	$--
Interest and other	Approximately $58 million, unchanged	Approximately $52 million, unchanged
Effective tax rate	Approximately 0% to 3%, from approximately 0% to 5%	Approximately 23.5% to 24.5%, from 23% to 24%
Adjusted EBITDA	N/A	$0 to $8 million, unchanged
Capital expenditures	Approximately $12 million, from $10 million to $14 million	Approximately $12 million, from $10 million to $14 million

*A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the financial tables following this release.

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 its fiscal 2022 third quarter ended March 31, 2022. The conference call will be available to interested parties by dialing 877-344-8082 from the U.S. or Canada, or 213-992-4618 from international locations. 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.

Use of Non-GAAP Financial Measures

This release contains references to non-GAAP financial measures, including Adjusted EBITDA, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods. The company also believes that including Adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. 

Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release.

Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) restructuring expenses, (3) asset impairment charges, (4) non-cash interest expense, as well as (5) certain other items considered unusual or non-recurring in nature.

Lantus^® is a registered trademark of Sanofi S.A.

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 – see financial schedule below for net sales by medical indication. For more information, visit the company's website at www.lannett.com.

Cautionary Statement Regarding Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and can be identified by the words "estimate,", "expect," "believe," "target," "anticipate" and other similar expressions. Any such statements, including, but not limited to, statements regarding the company's competitive environment and other market conditions; regulatory and operational developments; the timing related to commencing and successfully completing the pivotal clinical trials, filing the Biologics License Applications, and successfully launching any products, including biosimilar insulin glargine and biosimilar insulin aspart; the potential material impact of COVID-19 on future financial results; the timing of the company's restructuring plan and its ability to realize estimated cost reductions and other benefits therefrom; the company's financial status and performance; and the company's ability to achieve the financial metrics stated in the company's updated guidance for fiscal 2022, 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 beyond the company's control. Such factors 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 acquired products, and the company'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 latest Form 10-K, subsequent Form 8-Ks and 10-Qs and other documents filed with the Securities and Exchange Commission from time to time. You should not place undue reliance upon any such forward-looking statements, which represent the company's judgment as of the date of this release. To the fullest extent permitted by law, the company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:	Robert Jaffe
	Robert Jaffe Co., LLC
	(424) 288-4098

FINANCIAL SCHEDULES FOLLOW

LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
				(Unaudited)
				March 31, 2022		June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents				$                               106,108		$                    93,286
Accounts receivable, net				63,974		98,834
Inventories				95,434		109,545
Income taxes receivable				37,236		35,050
Assets held for sale				-		2,678
Other current assets				15,953		14,170
Total current assets				318,705		353,563
Property, plant and equipment, net				140,120		166,674
Intangible assets, net				88,351		137,835
Operating lease right-of-use asset				10,028		10,559
Other assets				15,103		15,106
TOTAL ASSETS				$                               572,307		$                  683,737
LIABILITIES
Current liabilities:
Accounts payable				$                                  28,571		$                    29,585
Accrued expenses				15,872		13,077
Accrued payroll and payroll-related expenses				10,817		10,680
Rebates payable				24,332		19,025
Royalties payable				6,145		13,779
Restructuring liability				899		8
Current operating lease liabilities				2,059		2,045
Other current liabilities				5,660		2,270
Total current liabilities				94,355		90,469
Long-term debt, net				610,080		590,683
Long-term operating lease liabilities				10,285		11,047
Other liabilities				16,895		19,009
TOTAL LIABILITIES				731,615		711,208
STOCKHOLDERS' DEFICIT
Common stock ($0.001 par value, 100,000,000 shares authorized; 42,180,724 and 40,913,148 shares issued;
40,616,948 and 39,576,606 shares outstanding at March 31, 2022 and June 30, 2021, respectively)				42		41
Additional paid-in capital				362,531		355,239
Accumulated deficit				(503,091)		(364,766)
Accumulated other comprehensive loss				(526)		(548)
Treasury stock (1,563,776 and 1,336,542 shares at March 31, 2022 and June 30, 2021, respectively)				(18,264)		(17,437)
Total stockholders' deficit				(159,308)		(27,471)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT				$                               572,307		$                  683,737

 

LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
		Three months ended				Nine months ended
		March 31,				March 31,
		2022		2021		2022		2021
Net sales		$               78,357		$         112,370		$             266,390		$         372,769
Cost of sales		72,658		82,063		230,656		298,738
Amortization of intangibles		2,621		3,851		10,425		21,097
Gross profit		3,078		26,456		25,309		52,934
Operating expenses:
Research and development expenses		5,807		5,973		16,318		18,156
Selling, general and administrative expenses		17,572		17,636		55,268		46,502
Restructuring expenses		1,782		-		2,673		4,043
Asset impairment charges		-		-		49,361		198,000
Total operating expenses		25,161		23,609		123,620		266,701
Operating income (loss)		(22,083)		2,847		(98,311)		(213,767)
Other income (expense):
Investment income		34		80		114		168
Interest expense		(14,517)		(12,631)		(43,171)		(40,613)
Other		303		18		252		23
Total other expense		(14,180)		(12,533)		(42,805)		(40,422)
Loss before income tax		(36,263)		(9,686)		(141,116)		(254,189)
Income tax benefit		(1,365)		(2,544)		(2,791)		(68,600)
Net loss		$             (34,898)		$           (7,142)		$           (138,325)		$        (185,589)
Loss per common share (1):
Basic		$                  (0.86)		$             (0.18)		$                  (3.44)		$              (4.72)
Diluted		$                  (0.86)		$             (0.18)		$                  (3.44)		$              (4.72)
Weighted average common shares outstanding (1):
Basic		40,503,301		39,511,296		40,261,330		39,340,670
Diluted		40,503,301		39,511,296		40,261,330		39,340,670
(1) Effective with the Warrants issued on April 22, 2021, the basic and diluted earnings per share was calculated based on the two-class method.

 

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
(In thousands, except percentages, share and per share data)
Nine months ended March 31, 2022
	Net sales	Cost of sales	Amortization of intangibles	Gross Profit	Gross Margin %	R&D expenses	SG&A expenses	Restructuring expenses	Asset impairment charges	Operating loss	Other expense	Loss before income tax	Income tax benefit	Net loss	Diluted loss per share (l)
GAAP Reported	$           266,390	$           230,656	$             10,425	$             25,309	10%	$             16,318	$             55,268	$             2,673	$             49,361	$           (98,311)	$           (42,805)	$         (141,116)	$              (2,791)	$         (138,325)	$                (3.44)
Adjustments:
Amortization of intangibles (a)	-	-	(10,425)	10,425		-	-	-	-	10,425	-	10,425	-	10,425
Cody API business (b)	-	(109)	-	109		(6)	(289)	-	-	404	-	404	-	404
Depreciation on capitalized software costs (c)	-	-	-	-		-	(3,153)	-	-	3,153	-	3,153	-	3,153
Restructuring expenses (d)	-	-	-	-		-	-	(2,673)	-	2,673	-	2,673	-	2,673
Distribution agreement renewal costs (e)	-	-	-	-		-	(219)	-	-	219	-	219	-	219
Asset impairment charges (f)	-	-	-	-		-	-	-	(49,361)	49,361	-	49,361	-	49,361
Write-downs for excess and obsolete inventory (g)	-	(3,244)	-	3,244		-	-	-	-	3,244	-	3,244	-	3,244
Reimbursement of legal costs (h)	-	-	-	-		-	(8,215)	-	-	8,215	-	8,215	-	8,215
Non-cash interest (i)	-	-	-	-		-	-	-	-	-	4,553	4,553	-	4,553
Other (j)	-	(487)	-	487		(3)	(879)	-	-	1,369	124	1,493	-	1,493
Tax adjustments (k)	-	-	-	-		-	-	-	-	-	-	-	(11,358)	11,358
Non-GAAP Adjusted	$             266,390	$             226,816	$                       -	$               39,574	15%	$               16,309	$               42,513	$                    -	$                       -	$             (19,248)	$             (38,128)	$             (57,376)	$             (14,149)	$             (43,227)	$                 (1.07)

(a)	To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI
(b)	To exclude the operating results of the ceased Cody API business
(c)	To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition
(d)	To exclude expenses associated with the 2021 Restructuring Plan
(e)	To exclude the consideration recorded to renew the Company's distribution agreement with Recro Gainesville LLC
(f)	To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the facility and certain equipment at Silarx in Carmel, NY
(g)	To exclude write-downs for excess and obsolete inventory related to certain product lines discontinued as a result of the sale of the Silarx facility
(h)	To exclude the reimbursement of legal costs associated with a distribution agreement
(i)	To exclude non-cash interest expense associated with debt issuance costs
(j)	To primarily exclude one-time employee retention awards and separation costs related to the Company's former Chief Information Officer
(k)	To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates
(l)	The weighted average share number for the nine months ended March 31, 2022 is 40,261,330 for GAAP and non-GAAP loss per share calculations.

 

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
(In thousands, except percentages, share and per share data)
Nine months ended March 31, 2021
	Net sales	Cost of sales	Amortization of intangibles	Gross Profit	Gross Margin %	R&D expenses	SG&A expenses	Restructuring expenses	Asset impairment charges	Operating income (loss)	Other loss	Income (loss) before income tax	Income tax expense (benefit)	Net income (loss)	Diluted earnings (loss) per share (k)
GAAP Reported	$         372,769	$         298,738	$            21,097	$       52,934	14%	$            18,156	$            46,502	$              4,043	$         198,000	$   (213,767)	$          (40,422)	$       (254,189)	$          (68,600)	$   (185,589)	$              (4.72)
Adjustments:
Amortization of intangibles (a)	-	-	(21,097)	21,097		-	-	-	-	21,097	-	21,097	-	21,097
Cody API business (b)	-	(249)	-	249		(5)	(473)	-	-	727	-	727	-	727
Depreciation on capitalized software costs (c)	-	-	-	-		-	(3,153)	-	-	3,153	-	3,153	-	3,153
Restructuring expenses (d)	-	-	-	-		-	-	(4,043)	-	4,043	-	4,043	-	4,043
Asset impairment charges (e)	-	-	-	-		-	-	-	(198,000)	198,000	-	198,000	-	198,000
Write-downs for excess and obsolete inventory (f)	-	(16,623)	-	16,623		-	-	-	-	16,623	-	16,623	-	16,623
Distribution agreement renewal costs (g)	-	(4,966)	-	4,966		-	-	-	-	4,966	-	4,966	-	4,966
Non-cash interest (h)	-	-	-	-		-	-	-	-	-	9,073	9,073	-	9,073
Other (i)	-	-	-	-		-	(3,695)	-	-	3,695	-	3,695	-	3,695
Tax adjustments (j)	-	-	-	-		-	-	-	-	-	-	-	69,376	(69,376)
Non-GAAP Adjusted	$            372,769	$            276,900	$                     -	$         95,869	26%	$              18,151	$              39,181	$                     -	$                     -	$         38,537	$            (31,349)	$               7,188	$                   776	$           6,412	$                 0.16
(a)	To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI
(b)	To exclude the operating results of the ceased Cody API business
(c)	To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition
(d)	To exclude expenses associated with the 2020 Restructuring Plan
(e)	To exclude asset impairment charges primarily related to the KUPI product rights intangible assets
(f)	To exclude write-downs for excess and obsolete inventory related to the discontinuance of certain product lines
(g)	To exclude the consideration recorded to renew the Company's distribution agreement with Recro Gainesville LLC
(h)	To exclude non-cash interest expense associated with debt issuance costs
(i)	To primarily exclude the reimbursement of legal costs associated with a distribution agreement
(j)	To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates
(k)	The weighted average share number for the nine months ended March 31, 2021 is 39,340,670 for GAAP and 40,933,946 for the non-GAAP earnings (loss) per share calculations

 

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
(In thousands, except percentages, share and per share data)
Three months ended March 31, 2022
	Net sales	Cost of sales	Amortization of intangibles	Gross Profit	Gross Margin %	R&D expenses	SG&A expenses	Restructuring expenses	Operating loss	Other expense	Loss before income tax	Income tax benefit	Net loss	Diluted loss per share (j)
GAAP Reported	$             78,357	$             72,658	$               2,621	$               3,078	4%	$               5,807	$             17,572	$             1,782	$           (22,083)	$           (14,180)	$           (36,263)	$              (1,365)	$           (34,898)	$                (0.86)
Adjustments:
Amortization of intangibles (a)	-	-	(2,621)	2,621		-	-	-	2,621	-	2,621	-	2,621
Cody API business (b)	-	(59)	-	59		-	(19)	-	78	-	78	-	78
Depreciation on capitalized software costs (c)	-	-	-	-		-	(1,051)	-	1,051	-	1,051	-	1,051
Restructuring expenses (d)	-	-	-	-		-	-	(1,782)	1,782	-	1,782	-	1,782
Write-downs for excess and obsolete inventory (e)	-	(3,244)	-	3,244		-	-	-	3,244	-	3,244	-	3,244
Reimbursement of legal costs (f)	-	-	-	-		-	(3,048)	-	3,048	-	3,048	-	3,048
Non-cash interest (g)	-	-	-	-		-	-	-	-	1,594	1,594	-	1,594
Other (h)	-	(310)	-	310		(2)	(102)	-	414	124	538	-	538
Tax adjustments (i)	-	-	-	-		-	-	-	-	-	-	(4,196)	4,196
Non-GAAP Adjusted	$               78,357	$               69,045	$                       -	$                 9,312	12%	$                 5,805	$               13,352	$                    -	$               (9,845)	$             (12,462)	$             (22,307)	$               (5,561)	$             (16,746)	$                 (0.41)
(a)	To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI
(b)	To exclude the operating results of the ceased Cody API business
(c)	To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition
(d)	To exclude expenses associated with the 2021 Restructuring Plan
(e)	To exclude write-downs for excess and obsolete inventory related to certain product lines discontinued as a result of the sale of the Silarx facility
(f)	To exclude the reimbursement of legal costs associated with a distribution agreement
(g)	To exclude non-cash interest expense associated with debt issuance costs
(h)	To primarily exclude one-time employee retention awards
(i)	To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates
(j)	The weighted average share number for the three months ended March 31, 2022 is 40,503,301 for GAAP and non-GAAP loss per share calculations.

 

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
(In thousands, except percentages, share and per share data)
Three months ended March 31, 2021
	Net sales	Cost of sales	Amortization of intangibles	Gross Profit	Gross Margin %	R&D expenses	SG&A expenses	Operating income	Other expense	Income (loss) before income tax	Income tax benefit	Net income (loss)	Diluted earnings (loss) per share (g)
GAAP Reported	$           112,370	$             82,063	$               3,851	$         26,456	24%	$               5,973	$             17,636	$           2,847	$           (12,533)	$             (9,686)	$              (2,544)	$         (7,142)	$             (0.18)
Adjustments:
Amortization of intangibles (a)	-	-	(3,851)	3,851		-	-	3,851	-	3,851	-	3,851
Cody API business (b)	-	(91)	-	91		-	(18)	109	-	109	-	109
Depreciation on capitalized software costs (c)	-	-	-	-		-	(1,051)	1,051	-	1,051	-	1,051
Non-cash interest (d)	-	-	-	-		-	-	-	2,823	2,823	-	2,823
Other (e)	-	-	-	-		-	(2,191)	2,191	-	2,191	-	2,191
Tax adjustments (f)	-	-	-	-		-	-	-	-	-	1,923	(1,923)
Non-GAAP Adjusted	$             112,370	$               81,972	$                       -	$           30,398	27%	$                 5,973	$               14,376	$           10,049	$               (9,710)	$                   339	$                  (621)	$                960	$                0.02
(a)	To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI
(b)	To exclude the operating results of the ceased Cody API business
(c)	To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition
(d)	To exclude non-cash interest expense associated with debt issuance costs
(e)	To primarily exclude the reimbursement of legal costs associated with a distribution agreement
(f)	To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates
(g)	The weighted average share number for the three months ended March 31, 2021 is 39,511,296 for GAAP and 41,051,998 for the non-GAAP earnings (loss) per share calculations

 

	LANNETT COMPANY, INC.
	RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
	($ in thousands)
			Three months ended
			March 31, 2022
	Net loss		$                               (34,898)
	Interest expense		14,517
	Depreciation and amortization		7,788
	Income tax benefit		(1,365)
	EBITDA		(13,958)
	Share-based compensation		1,699
	Inventory write-down		7,373
	Investment income		(34)
	Other non-operating income		(303)
	Restructuring expenses		1,782
	Reimbursement of legal costs (a)		3,048
	Other (b)		491
	Adjusted EBITDA (Non-GAAP)		$                                         98
(a)	To exclude the reimbursement of legal costs associated with a distribution agreement
(b)	To primarily exclude one-time employee retention awards

 

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
($ in millions)
		Fiscal Year 2022 Guidance
						Non-GAAP
		GAAP		Adjustments		Adjusted
Net sales		$335 - $350		-		$335 - $350
Gross margin percentage		approx. 8.5% to 9.5%		5%	(a)	approx. 13.5% to 14.5%
R&D expense		$22 - $24		-		$22 - $24
SG&A expense		$71 - $73		($16)	(b)	$55 - $57
Restructuring expense		$3 - $4		($3 - $4)	(c)	-
Asset impairment charges		$49.4		($49.4)	(d)	-
Interest and other		approx. $58		($6)	(e)	approx. $52
Effective tax rate		approx. 0% to 3%		-		approx. 23.5% to 24.5%
Adjusted EBITDA		N/A		N/A		$0 - $8
Capital expenditures		approx. $12		-		approx. $12

(a) The adjustment primarily reflects amortization of purchased intangible assets related to the acquisition of Kremers Urban Pharmaceuticals, Inc. ("KUPI")

(b) The adjustment primarily excludes depreciation on previously capitalized software integration costs associated with the KUPI acquisition and the reimbursement of legal costs associated with a distribution agreement

(c) To exclude expenses associated with the 2021 Restructuring Plan

(d) To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the Company's former facility in Carmel, NY

(e) The adjustment primarily reflects non-cash interest expense associated with debt issuance costs

 

LANNETT COMPANY, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
($ in millions)
	Fiscal Year 2022 Guidance
	Low		High
Net loss	$               (177.0)		$               (170.0)
Interest expense	58.0		58.0
Depreciation and amortization	34.0		34.0
Income taxes	-		(5.2)
EBITDA	(85.0)		(83.2)
Share-based compensation	9.0		9.0
Inventory write-down	12.0		15.0
Asset impairment charges (a)	49.4		49.4
Restructuring expenses (b)	3.0		4.0
Reimbursement of legal costs (c)	10.0		12.0
Other (d)	1.6		1.8
Adjusted EBITDA (Non-GAAP)	$                       -		$                     8.0
(a) To exclude asset impairment charges primarily related to the KUPI product rights intangible assets and the Company's former facility in Carmel, NY
(b) To exclude expenses associated with the 2021 Restructuring Plan
(c) To exclude the reimbursement of legal costs associated with a distribution agreement
(d) To primarily exclude one-time employee retention awards and separation costs related to the Company's former Chief Information Officer

 

LANNETT COMPANY, INC.
NET SALES BY MEDICAL INDICATION
	Three months ended				Nine months ended
($ in thousands)	March 31,				March 31,
Medical Indication	2022		2021		2022		2021
Analgesic	$             3,292		$             3,836		$            12,525		$            10,528
Anti-Psychosis	3,346		11,678		9,156		38,023
Cardiovascular	9,468		16,573		33,321		52,623
Central Nervous System	15,177		24,509		60,302		71,648
Endocrinology	6,792		6,822		22,934		19,551
Gastrointestinal	11,709		16,817		40,972		52,492
Infectious Disease	5,438		10,610		24,473		55,586
Migraine	3,507		5,169		12,638		20,942
Respiratory/Allergy/Cough/Cold	2,309		2,548		7,291		6,241
Urinary	827		1,566		3,167		4,385
Other	13,873		8,617		32,160		24,661
Contract Manufacturing revenue	2,619		3,625		7,451		16,089
Net Sales	$            78,357		$          112,370		$          266,390		$          372,769

 

 

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SOURCE Lannett Company, Inc.

FAQ

What were Lannett's Q3 fiscal 2022 net sales?

Lannett's net sales for Q3 fiscal 2022 were $78.4 million.

How much did Lannett lose in Q3 fiscal 2022?

Lannett reported a net loss of $34.9 million in Q3 fiscal 2022.

What is Lannett's cash position as of March 31, 2022?

As of March 31, 2022, Lannett had over $106 million in cash.

What is the timeline for Lannett's biosimilar insulin glargine trial?

Lannett expects to have top line results from the insulin glargine trial by the end of this calendar year.

What are Lannett's updated sales guidance for fiscal 2022?

Lannett has updated its sales guidance to $335 million to $350 million for fiscal 2022.