NASHVILLE, Tenn., May 8, 2018 /PRNewswire/ -- Cumberland
Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical
company focused on hospital acute care, gastroenterology, and
oncology supportive care today announced first quarter 2018
financial results. Net revenues for the period were $8.6 million, resulting in a net loss of
$(2.4) million or $(0.15) per diluted share. As of March 31,
2018, Cumberland had $91 million in total assets, including
approximately $51 million in cash and
marketable securities.
QUARTER HIGHLIGHTS:
- Submitted supplemental New Drug Application for a Next
Generation Caldolor® product
- Released clinical publications in support of
Omeclamox®-Pak and Ethyol®
- Progressed enrollment in Phase II clinical studies for four
advanced pipeline programs
- Obtained approval for sale of Caldolor in India, with launch preparations underway
- Entered into collaboration agreement with Louisiana State University through Cumberland
Emerging Technologies
"Our goal has been to build a business that generates
sustainable growth and profitability," said A.J. Kazimi, Chief
Executive Officer of Cumberland Pharmaceuticals. "We continue to
develop and grow the current portfolio while selectively adding new
brands. Meanwhile, we are advancing a very robust clinical pipeline
which includes several potential orphan drug candidates. We believe
that these continued developments will help progress our goal of
advancing patient care through the delivery of high-quality
medicines."
KEY QUARTER DEVELOPMENTS:
Caldolor®
The FDA has accepted for filing the supplemental New Drug
Application Cumberland submitted early in the year for the approval
of its Next Generation Caldolor product. It features improved
packaging and a new formulation. Also during the first
quarter, Cumberland continued
enrollment in a study evaluating Caldolor in patients ranging from
newborn to six months of age. Additionally, Caldolor was approved
for sale in India. Cumberland is now preparing for the launch of
the brand with its international partner in that market.
Amifostine Study Publication
In January 2018, the Company
announced a new publication in Leukemia & Lymphoma,
with study results showing that amifostine decreases
gastro-intestinal (GI) toxicity in patients who receive treatment
for their multiple myeloma. Cumberland markets branded amifostine in
the U.S. under the name Ethyol.
H. Pylori Triple Therapy Publication
In March 2018, the Company
announced a publication of an open access article
in Infection and Drug Resistance, with results
demonstrating an 85% eradication rate of Helicobacter pylori (H.
pylori) infection using clarithromycin-based triple therapy.
Cumberland markets a branded
clarithromycin-based triple therapy in the U.S. under the
name Omeclamox-Pak.
GEL Agreement
In March 2018, Cumberland reached agreement with
Gastro-Entero-Logic LLC (GEL), to acquire the assets associated
with Omeclamox-Pak including the product's FDA approved New Drug
Application, trademarks and other assets. As a result of this
acquisition Cumberland will no
longer be obligated to provide GEL with royalty or fees for
overseeing the product's manufacturing. Cumberland will become responsible for
maintaining the FDA approval and for overseeing the product's
packaging.
CET Collaboration Agreement
In February 2018, Cumberland
Emerging Technologies (CET), Cumberland's majority-owned subsidiary, and
Louisiana State University entered into
an agreement, adding to CET's roster of academic collaborations
which also includes Vanderbilt
University, the University of
Mississippi, and the University of
Tennessee Research Foundation. These partnerships combine
the strengths and capabilities of each organization by working
together to identify, formulate, and develop attractive new
biomedical products.
FINANCIAL RESULTS:
Net Revenue: For the three months ended
March 31, 2018, net revenues were $8.6
million, compared to $9.6
million for the prior year period. Net revenue by
product for the three months ended March 31, 2018, included
$3.3 million for
Kristalose®, and $2.3
million for Ethyol®. Net revenue for the
Company's other brands were $1.3
million for Acetadote® (including the brand and
Company's Authorized Generic) $1.0
million for Caldolor®, $0.4 million for Totect®, $0.1 million for Vaprisol®, and
$0.1 million for
Omeclamox®-Pak.
Operating Expenses: Total operating expenses for
the three months ended March 31, 2018 were $11.0 million, compared to $10.3 million during the prior year period. The
primary reason for this increase is costs associated with the
Company's Phase II clinical programs.
Earnings: Net income (loss) for the first quarter
2018 was $(2.4) million or
$(0.15) per diluted share, compared
to $(1.3) million or $(0.08) a share for the prior year period.
Adjusted Earnings for the first quarter were $(1.4) million or $(0.09) per diluted share, compared to
$0.3 million or $0.02 per diluted share for the prior year
period. The definition and reconciliation of Adjusted Earnings to
net income is provided in this release.
Balance Sheet: At March 31, 2018, Cumberland had $50.9
million in cash and marketable securities, including
approximately $35.3 million in cash
and equivalents. Total assets at March 31, 2018 were
$91.1 million. Total
liabilities were $30.2 million,
including $12.0 million outstanding
on the Company's revolving line of credit, resulting in Total
shareholder's equity of $61.1
million.
Cumberland also has
approximately $44 million in tax net
operating loss carryforwards, resulting from the prior exercise of
stock options.
Conference Call and Webcast
A conference call and live
Internet webcast will be held on Tuesday, May 8, 2018 at
4:30 p.m. Eastern Time to discuss the
Company's first quarter 2018 financial results. To participate in
the call, please dial 877-303-1298 (for U.S. callers) or
253-237-1032 (for international callers). A rebroadcast of
the teleconference will be available for one week and can be
accessed by dialing 855-859-2056 (for U.S. callers) or 404-537-3406
(for international callers). The Conference ID for the
rebroadcast is 4296607. The live webcast and rebroadcast can be
accessed via Cumberland's website
at http://investor.shareholder.com/cpix/events.cfm.
About Cumberland Pharmaceuticals
Cumberland Pharmaceuticals Inc. is a specialty
pharmaceutical company focused on the delivery of high-quality
prescription brands to improve patient care. The Company develops,
acquires, and commercializes brands for the hospital acute care,
gastroenterology, and oncology market segments.
The Company's portfolio of FDA approved brands includes:
- Acetadote® (acetylcysteine) Injection,
for the treatment of acetaminophen poisoning;
- Caldolor® (ibuprofen) Injection, for
the treatment of pain and fever;
- Kristalose® (lactulose) for Oral
Solution, a prescription laxative, for the treatment of chronic and
acute constipation;
- Omeclamox®-Pak, (omeprazole,
clarithromycin, amoxicillin) for the treatment of Helicobacter
pylori (H. pylori) infection and related duodenal ulcer
disease;
- Vaprisol® (conivaptan) Injection, to
raise serum sodium levels in hospitalized patients with euvolemic
and hypervolemic hyponatremia;
- Ethyol® (amifostine) Injection, for
the reduction of xerostomia (dry mouth) in patients undergoing
post-operative radiation treatment for head and neck cancer and the
renal toxicity associated with the administration of cisplatin in
patients with advanced ovarian cancer; and
- Totect® (dexrazoxane hydrochloride)
Injection, for emergency oncology intervention, to treat the toxic
effects of anthracycline chemotherapy in case of extravasation
(drug leakage from the bloodstream into the tissues).
Cumberland's pipeline of
product candidates includes:
- Hepatoren® (ifetroban) Injection, a
Phase II candidate for the treatment of critically ill patients
suffering from liver and kidney failure associated with hepatorenal
syndrome ("HRS");
- Boxaban® (ifetroban) ) Oral Capsules,
a Phase II candidate for the treatment of asthma patients with
aspirin-exacerbated respiratory disease ("AERD");
- Vasculan® (ifetroban) Oral Capsules, a
Phase II candidate for the treatment of patients with the systemic
sclerosis (SSc) form of autoimmune disease;
- Portaban® (ifetroban) Injection and
Oral Capsules, a Phase II candidate for the treatment of patients
with portal hypertension associated with liver disease; and
- RediTrex™ (methotrexate) Injection,
an approval submission candidate for the treatment of active
rheumatoid, juvenile idiopathic and severe psoriatic arthritis, as
well as severe disabling psoriasis.
For more information on Cumberland's approved products, including full
prescribing information, please visit the individual product
websites, links to which can be found on the Company's website
www.cumberlandpharma.com.
About Acetadote® (acetylcysteine)
Injection
Acetadote, administered intravenously within 8 to 10 hours after
ingestion of a potentially hepatotoxic quantity of acetaminophen,
is indicated to prevent or lessen hepatic injury. Used in the
emergency department, Acetadote is approved in the United States to treat overdose of
acetaminophen, a common ingredient in many over-the-counter
medications.
Acetadote is contraindicated in patients with hypersensitivity
or previous anaphylactoid reactions to acetylcysteine or any
components of the preparation. Serious anaphylactoid reactions,
including death in a patient with asthma, have been reported in
patients administered acetylcysteine intravenously. Acetadote
should be used with caution in patients with asthma or where there
is a history of bronchospasm. The total volume administered should
be adjusted for patients weighing less than 40 kg and for those
requiring fluid restriction. To avoid fluid overload, the volume of
diluent should be reduced as needed. If volume is not adjusted,
fluid overload can occur, potentially resulting in hyponatremia,
seizure and death. For full prescribing information, visit
www.acetadote.com.
About Caldolor® (ibuprofen) Injection
Caldolor is indicated in adults and pediatric patients for the
management of mild to moderate pain and management of moderate to
severe pain as an adjunct to opioid analgesics, as well as the
reduction of fever. It was the first FDA-approved intravenous
therapy for fever. Caldolor is contraindicated in patients
with known hypersensitivity to ibuprofen or other NSAIDs, patients
with a history of asthma or other allergic type reactions after
taking aspirin or other NSAIDs. Caldolor is contraindicated
for use during the peri-operative period in the setting of coronary
artery bypass graft (CABG) surgery. Caldolor should be used
with caution in patients with prior history of ulcer disease or GI
bleeding, in patients with fluid retention or heart failure, in the
elderly, those with renal impairment, heart failure, liver
impairment, and those taking diuretics or ACE inhibitors.
Blood pressure should be monitored during treatment with
Caldolor. For full prescribing information, including boxed
warning, visit www.caldolor.com.
About Kristalose® (lactulose) Oral
Solution
Kristalose is indicated for the treatment of acute and chronic
constipation. It is a unique, proprietary, crystalline form of
lactulose, with no restrictions on length of therapy or patient
age. Initial dosing may produce flatulence and intestinal cramps,
which are usually transient. Excessive dosage can lead to diarrhea
with potential complications such as loss of fluids, hypokalemia
and hypernatremia. Nausea and vomiting have been reported. Use with
caution in diabetics. Kristalose is contraindicated in patients who
require a low-galactose diet. Elderly, debilitated patients who
receive lactulose for more than six months should have serum
electrolytes (potassium, chloride, carbon dioxide) measured
periodically. For full prescribing information, visit
www.kristalose.com.
About Omeclamox®-Pak (omeprazole, clarithromycin,
amoxicillin)
Omeprazole is an antisecretory drug, which works by decreasing
the amount of acid the stomach produces. Clarithromycin and
amoxicillin are antibacterial drugs, which inhibit the growth of
bacteria allowing the stomach lining to heal. Omeclamox-Pak is
contraindicated in patients with a history of hypersensitivity to
omeprazole, any macrolide antibiotic or penicillin. The safety and
effectiveness of Omeclamox-Pak in the pediatric population has not
yet been established. Omeclamox-Pak was approved by the FDA in
2011. For full prescribing information, visit
www.omeclamox.com.
About Vaprisol® (conivaptan hydrochloride)
Injection
Vaprisol is an intravenous treatment for hyponatremia used in
the critical care setting. Hyponatremia is an electrolyte
disturbance in which sodium ion concentration in blood plasma is
lower than normal. This can be associated with a variety of
critical care conditions including congestive heart failure, liver
failure, kidney failure and pneumonia. The product is a
vasopressin receptor antagonist that raises serum sodium levels and
promotes free water secretion. Vaprisol was approved by the FDA in
2005 for euvolemic hyponatremia and in 2007 for hypervolemic
hyponatremia. For full prescribing information, visit
www.vaprisol.com.
About Ethyol® (amifostine) Injection
Ethyol is indicated to reduce the cumulative renal toxicity
associated with repeated administration of cisplatin in patients
with advanced ovarian cancer. It is indicated to reduce the
incidence of moderate to severe xerostomia in patients undergoing
post-operative radiation treatment for head and neck cancer, where
the radiation port includes a substantial portion of the parotid
glands.
About Totect® (dexrazoxane) Injection
Totect is an anthracycline extravasation agent approved by the
FDA. Anthracyclines are used to treat many types of cancer and are
among the most common cancer therapies.
Anthracycline extravasation occurs when there is accidental
leaking of the intravenously-administered medication into the
surrounding tissues. Anthracycline extravasation can result
in serious complications for cancer patients including tissue
necrosis with skin ulceration. In addition to tissue damage, an
anthracycline extravasation may cause damage to the nerves,
tendons, muscle, and joints. For more information please visit
www.totect.com.
About Cumberland Emerging Technologies (CET)
Cumberland Emerging Technologies, Inc. (www.cet-fund.com) is a
joint initiative between Cumberland Pharmaceuticals Inc.,
Vanderbilt University, LaunchTN, and
Gloria Pharmaceuticals. The mission of CET is to advance biomedical
technologies and products conceived at Vanderbilt University and other regional research
centers towards the marketplace. CET helps manage the development
and commercialization process for select projects, and provides
expertise on intellectual property, regulatory, manufacturing and
marketing issues that are critical to successful new biomedical
products. CET's Life Sciences Center, provides laboratory space,
equipment and infrastructure for CET's activities and other
early-stage life sciences ventures.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the federal securities laws, which are subject to
certain risks and reflect Cumberland's current views on future events
based on what it believes are reasonable assumptions. These forward
looking statements involve certain risks and uncertainties, and
actual results may differ materially from them. Some important
factors which may cause results to differ from expectations
include: market conditions; competition; an inability of
manufacturers to produce Cumberland's products on a timely basis or
failure of manufacturers to comply with regulations applicable to
pharmaceutical manufacturers; maintaining an effective sales and
marketing infrastructure; availability of additional debt and
equity capital required to finance the business model; market
conditions at the time additional capital is required; our ability
to continue to acquire branded products; product sales; management
of our growth and integration of our acquisitions, as well as other
risks discussed in the "Risk Factors" section of the Company's most
recent Annual Report on Form 10-K, and other filings with the SEC.
There can be no assurance that results anticipated by the Company
will be realized or that they will have the expected effects.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
The Company does not undertake any obligation to publicly revise
these statements to reflect events after the date hereof.
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
35,262,976
|
|
$
|
45,412,868
|
Marketable
securities
|
15,610,105
|
|
4,672,476
|
Accounts receivable,
net of allowances
|
6,301,162
|
|
8,395,112
|
Inventories,
net
|
6,661,525
|
|
6,737,848
|
Other current
assets
|
2,987,404
|
|
3,466,541
|
Total current
assets
|
66,823,172
|
|
68,684,845
|
Property and
equipment, net
|
566,907
|
|
528,882
|
Intangible assets,
net
|
21,052,197
|
|
21,444,545
|
Other
assets
|
2,565,354
|
|
2,486,830
|
Deferred tax assets,
net
|
87,210
|
|
87,210
|
Total
assets
|
$
|
91,094,840
|
|
$
|
93,232,312
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
8,518,879
|
|
$
|
8,979,929
|
Other current
liabilities
|
7,770,977
|
|
8,714,814
|
Total current
liabilities
|
16,289,856
|
|
17,694,743
|
Revolving line of
credit
|
12,000,000
|
|
9,800,000
|
Other long-term
liabilities
|
1,930,679
|
|
1,815,968
|
Total
liabilities
|
30,220,535
|
|
29,310,711
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock—no par
value; 100,000,000 shares authorized;
15,727,250 and 15,723,075 shares issued and outstanding as
of March 31, 2018 and December 31, 2017, respectively
|
51,755,834
|
|
52,410,941
|
Retained
earnings
|
9,329,983
|
|
11,709,222
|
Total shareholders'
equity
|
61,085,817
|
|
64,120,163
|
Noncontrolling
interests
|
(211,512)
|
|
(198,562)
|
Total
equity
|
60,874,305
|
|
63,921,601
|
Total liabilities and
equity
|
$
|
91,094,840
|
|
$
|
93,232,312
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations and Comprehensive Income
(loss)
(Unaudited)
|
|
|
|
Three months ended
March 31,
|
|
2018
|
|
2017
|
Net
revenues
|
$
|
8,587,605
|
|
$
|
9,636,755
|
Costs and
expenses:
|
|
|
|
Cost of products
sold
|
1,527,961
|
|
1,381,497
|
Selling and
marketing
|
4,670,511
|
|
5,293,020
|
Research and
development
|
1,874,939
|
|
898,363
|
General and
administrative
|
2,330,281
|
|
2,110,233
|
Amortization
|
636,135
|
|
611,444
|
Total costs and
expenses
|
11,039,827
|
|
10,294,557
|
Operating income
(loss)
|
(2,452,222)
|
|
(657,802)
|
Interest
income
|
82,494
|
|
52,535
|
Interest
expense
|
(18,302)
|
|
(31,715)
|
Income (loss) before
income taxes
|
(2,388,030)
|
|
(636,982)
|
Income tax (expense)
benefit
|
(4,159)
|
|
(656,587)
|
Net income
(loss)
|
(2,392,189)
|
|
(1,293,569)
|
Net loss at
subsidiary attributable to noncontrolling interests
|
12,950
|
|
19,123
|
Net income (loss)
attributable to common shareholders
|
$
|
(2,379,239)
|
|
$
|
(1,274,446)
|
Earnings (loss) per
share attributable to common shareholders
|
|
|
|
- basic
|
$
|
(0.15)
|
|
$
|
(0.08)
|
- diluted
|
$
|
(0.15)
|
|
$
|
(0.08)
|
Weighted-average
shares outstanding
|
|
|
|
- basic
|
15,689,240
|
|
16,042,219
|
- diluted
|
15,689,240
|
|
16,042,219
|
|
|
|
|
Comprehensive income
(loss) attributable to common shareholders
|
(2,379,239)
|
|
(1,274,446)
|
Net loss at
subsidiary attributable to noncontrolling interests
|
12,950
|
|
19,123
|
Total comprehensive
income (loss)
|
$
|
(2,392,189)
|
|
$
|
(1,293,569)
|
|
|
|
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(2,392,189)
|
|
$
|
(1,293,569)
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization expense
|
692,991
|
|
661,485
|
Deferred tax
expense
|
—
|
|
758,112
|
Share-based
compensation
|
339,209
|
|
254,585
|
Excess tax (benefit)
expense derived from exercise of stock options
|
—
|
|
(92,741)
|
Noncash interest
expense
|
18,303
|
|
26,778
|
Noncash
investment gains
|
(43,338)
|
|
(4,807)
|
Net changes in assets
and liabilities affecting operating activities:
|
|
|
|
Accounts
receivable
|
2,093,950
|
|
2,395,348
|
Inventories
|
76,323
|
|
(275,175)
|
Other current assets
and other assets
|
600,884
|
|
132,819
|
Accounts payable and
other current liabilities
|
(1,254,535)
|
|
(1,216,345)
|
Other long-term
liabilities
|
103,991
|
|
92,881
|
Net provided by
operating activities
|
235,589
|
|
1,439,371
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(94,881)
|
|
(123,945)
|
Purchases of
marketable securities
|
(15,151,948)
|
|
(792,716)
|
Proceeds from sale of
marketable securities
|
4,257,657
|
|
941,087
|
Additions to
intangible assets
|
(532,954)
|
|
(453,961)
|
Net cash used in
investing activities
|
(11,522,126)
|
|
(429,535)
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on line of
credit
|
12,000,000
|
|
—
|
Repayments on line of
credit
|
(9,800,000)
|
|
—
|
Sales of shares of
common stock, net of offering costs
|
200,909
|
|
—
|
Payments of deferred
offering costs
|
(248,108)
|
|
—
|
Repurchase of common
shares
|
(1,016,156)
|
|
(545,924)
|
Net cash provided by
(used in) financing activities
|
1,136,645
|
|
(545,924)
|
Net increase
(decrease) in cash and cash equivalents
|
(10,149,892)
|
|
463,912
|
Cash and cash
equivalents at beginning of period
|
45,412,868
|
|
34,510,330
|
Cash and cash
equivalents at end of period
|
$
|
35,262,976
|
|
$
|
34,974,242
|
CUMBERLAND
PHARMACEUTICALS INC. AND SUBSIDIARIES
Reconciliation of Net
Income (loss) Attributable to Common Shareholders to Adjusted
Earnings and Adjusted Diluted Earnings Per Share
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
March 31, 2018
|
|
Three months
ended
March 31, 2017
|
|
Earnings
impact
|
|
Earnings per
share impact
|
|
Earnings
impact
|
|
Earnings per
share impact
|
Net income (loss)
attributable to common shareholders
|
$
|
(2,379,239)
|
|
$
|
(0.15)
|
|
$
|
(1,274,446)
|
|
$
|
(0.08)
|
Less: Net loss at
subsidiary attributable to noncontrolling interests
|
12,950
|
|
—
|
|
19,123
|
|
—
|
Net income
(loss)
|
(2,392,189)
|
|
(0.15)
|
|
(1,293,569)
|
|
(0.08)
|
Adjustments to net
income (loss)
|
|
|
|
|
|
|
|
Income tax
expense
|
4,159
|
|
—
|
|
656,587
|
|
0.04
|
Depreciation and
amortization
|
692,991
|
|
0.04
|
|
661,485
|
|
0.04
|
Share-based
compensation (a)
|
339,209
|
|
0.02
|
|
254,585
|
|
0.02
|
Interest
income
|
(82,494)
|
|
(0.01)
|
|
(52,535)
|
|
—
|
Interest
expense
|
18,302
|
|
—
|
|
31,715
|
|
—
|
Adjusted Earnings
(loss) and Adjusted Diluted Earnings (loss) Per
Share
|
$
|
(1,420,022)
|
|
$
|
(0.09)
|
|
$
|
258,268
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares outstanding:
|
|
|
|
15,689,240
|
|
|
|
16,455,943
|
|
|
|
|
|
|
|
|
(a) Represents the
share-based compensation of Cumberland.
|
|
|
|
|
|
|
The Company provided the above adjusted supplemental financial
performance measures, which are considered "non-GAAP" financial
measures under applicable SEC rules and regulations. These
financial measures should be considered supplemental to, and not as
a substitute for, financial information prepared in accordance with
Generally Accepted Accounting Principles ("GAAP"). The definition
of these supplemental measures may differ from similarly titled
measures used by others.
Because these supplemental financial measures exclude the effect
of items that will increase or decrease the Company's reported
results of operations, management encourages investors to review
the Company's consolidated financial statements and publicly filed
reports in their entirety. A reconciliation of the supplemental
financial measures to the most directly comparable GAAP financial
measures is included in the tables accompanying this release.
Cumberland's management
believes these supplemental financial performance measures are
important as they are used by management, along with financial
measures in accordance with GAAP, to evaluate the Company's
operating performance. In addition, Cumberland believes that they will be used by
certain investors to measure the Company's operating results.
Management believes that presenting these supplemental measures
provides useful information about the Company's underlying
performance across reporting periods on a consistent basis by
excluding items that Cumberland
does not believe are indicative of its core business performance or
reflect long-term strategic activities. Certain of these
items are not settled through cash payments and include:
depreciation, amortization, share-based compensation expense and
income taxes. Cumberland
utilizes its net operating loss carryforwards to pay minimal income
taxes. In addition, the use of these financial measures
provides greater transparency to investors of supplemental
information used by management in its financial and operational
decision-making, including the evaluation of the Company's
operating performance.
The Company defines these supplemental financial measures as
follows:
- Adjusted Earnings (loss): net income (loss) adjusted for
the impact of income taxes, depreciation and amortization expense,
share-based compensation and interest income and interest
expense.
- Adjusted Diluted Earnings (loss) Per Share: Adjusted
Earnings (loss) divided by diluted weighted-average common shares
outstanding.
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SOURCE Cumberland Pharmaceuticals Inc.