‒ Q2 2022 Net Revenue of $559 million; GAAP Net
Loss of $121 million; Diluted Loss per Share of $(0.80) ‒ ‒
Adjusted EBITDA (1) of $135 million; Adjusted Diluted EPS (1) of
$0.19 ‒ ‒ Updates 2022 Adjusted EBITDA guidance ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (“Amneal” or
the “Company”) announced its results today for the second quarter
ended June 30, 2022.
“Solid second quarter results reflect topline growth across all
three segments and meaningful acceleration in performance from the
first quarter. Our core business is strong as we expect
acceleration in the second half of 2022 and further momentum in the
years ahead. On the horizon are a number of key catalyst launches
in high growth areas that will build upon our strong, diversified
core business performance,” said Chirag and Chintu Patel, Co-Chief
Executive Officers.
Net revenue in the second quarter of 2022 was $559 million, an
increase of 5% compared to $535 million in the second quarter of
2021. The increase was driven by growth across all three segments
with solid broad-based performance in Generics, including
Injectables, Specialty growth driven by Rytary® and Unithroid®, and
the expansion of AvKARE’s distribution channel.
Net loss attributable to Amneal Pharmaceuticals, Inc. was $121
million in the second quarter of 2022 compared to net income of $15
million in the second quarter of 2021. Net loss in the quarter
included a pre-tax charge of $263 million for the previously
disclosed preliminary settlement of the Opana ER® antitrust
litigation. Adjusted EBITDA(1) in the second quarter of 2022 was
$135 million, a decrease of 6% compared to the second quarter of
2021, reflective of lower gross profit due to product mix and a
tough comparison to the prior year. Diluted loss per share and
adjusted diluted EPS(1) in the second quarter of 2022 were $(0.80)
and $0.19, respectively, compared to $0.10 and $0.23, respectively,
in the second quarter of 2021.
(1)
See “Non-GAAP Financial Measures”
below.
Revised Full Year 2022 Guidance
The Company is updating its full year 2022 guidance.
Revised
Full Year 2022 Guidance
Prior
Full Year 2022 Guidance
Net revenue
$2.15 billion - $2.25 billion
$2.15 billion - $2.25 billion
Adjusted EBITDA (1)
$500 million - $520 million
$540 million - $560 million
Adjusted diluted EPS (2)
$0.65 - $0.70
$0.80 - $0.85
Operating cash flow (3)
$200 million - $225 million
$225 million - $250 million
Capital expenditures
$65 million - $75 million
$75 million - $85 million
Weighted average diluted shares
outstanding (4)
Approximately 305 million
Approximately 307 million
(1)
Includes 100% of EBITDA from the AvKARE
acquisition. Beginning in the first quarter of 2022, the Company no
longer excludes research and development (“R&D”) milestone
expense from its non-GAAP financial measures. In the second quarter
of 2022 and 2021, R&D milestone expenses were $1 million and $8
million, respectively. Prior periods presented have been revised to
reflect this change. Refer to our Form 8-K filed with the
Securities and Exchange Commission on May 4, 2022 for a full
reconciliation of previously reported non-GAAP results to revised
non-GAAP results for prior periods.
(2)
Accounts for 35% non-controlling interest
in AvKARE. Beginning in the first quarter of 2022, the Company no
longer excludes R&D milestone expense from its non-GAAP
financial measures.
(3)
Represents cash provided by operating
activities. Guidance does not contemplate one time and
non-recurring items such as legal settlements and other discrete
items. These amounts exclude anticipated cash payments this year of
approximately $131 million related to the preliminary settlement of
the Opana ER® antitrust litigation.
(4)
Assumes the weighted average diluted
shares outstanding of class A and class B common stock under the
if-converted method.
Amneal’s 2022 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 the
United States of America (“GAAP”). The Company cannot provide a
reconciliation between non-GAAP projections and the most directly
comparable measures in accordance with GAAP without unreasonable
efforts because it is unable to predict with reasonable certainty
the ultimate outcome of certain significant items required for the
reconciliation. The items include, but are not limited to,
acquisition-related expenses, restructuring expenses and benefits,
asset impairments and other gains and losses. These items are
uncertain, depend on various factors, and could have a material
impact on GAAP reported results.
Conference Call Information
Amneal will host a conference call and live webcast at 8:30 am
Eastern Time on August 5, 2022 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 (844) 200-6205 (in the U.S.) or (929)
526-1599 (international callers). The access code for the call is
236256. A replay of the conference call will be posted shortly
after the call and will be available for seven days. To access the
replay, dial (866) 813-9403 (in the U.S.) or +44 (204) 525-0658
(international callers). The access code for the replay is
862075.
About Amneal
Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in
Bridgewater, NJ, is a fully-integrated essential medicines company.
We make healthy possible through the development, manufacturing,
and distribution of generic and specialty pharmaceuticals,
primarily within the United States. The Company has a diverse
portfolio of over 250 products in its Generics segment and is
expanding across a broad range of complex products and therapeutic
areas, including injectables and biosimilars. In its Specialty
segment, Amneal has a growing portfolio of branded pharmaceutical
products focused primarily on central nervous system and endocrine
disorders, with a pipeline focused on unmet needs. Through its
AvKARE segment, the Company is a distributor of pharmaceuticals and
other products for the U.S. federal government, retail, and
institutional markets. For more information, please visit
www.amneal.com.
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 U.S. Private Securities Litigation Reform Act of 1995). Such
forward-looking statements include statements regarding
management’s intentions, plans, beliefs, expectations or forecasts
for the future, including among other things: discussions of future
operations; expected or estimated operating results and financial
performance, the Company’s growth prospects and opportunities as
well as its strategy for growth; product development and launches;
the successful commercialization and market acceptance of new
products, and expenditures. Words such as “plans,” “expects,”
“will,” “anticipates,” “estimates,” and similar words are intended
to identify estimates and forward-looking statements.
The reader is cautioned not to rely on these forward-looking
statements. These forward-looking statements are based on current
expectations of future 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, in general, specifically 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 ability to manage
our growth through acquisitions and otherwise; our dependence on
the sales of a limited number of products for a substantial portion
of our total revenues; 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 and any associated supply chain disruptions;
existing and future legal proceedings, the outcome of which are
uncertain and may divert management resources and require us to
incur substantial defense or settlement payments and costs; legal,
regulatory and legislative efforts by our brand competitors to
deter competition from our generic alternatives; the impact of
severe weather; the impact of the ongoing COVID-19 pandemic, and
the emergence of variant strains; 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 product
liability and other claims against us by consumers and other third
parties; risks related to changes in the regulatory environment,
including U.S. federal and state laws related to healthcare fraud
abuse and health information privacy and security and changes in
such laws; changes to Food and Drug Administration (“FDA”) product
approval requirements; the impact of healthcare reform and changes
in coverage and reimbursement levels by governmental authorities
and other third-party payers; our dependence on third-party
agreements for a portion of our product offerings; the impact of
global economic conditions, including any economic effects stemming
from adverse geopolitical events, an economic downturn and
inflation rates; our ability to identify, make and integrate
acquisitions or investments in complementary businesses and
products on advantageous terms; our substantial amount of
indebtedness and our ability to generate sufficient cash to service
our indebtedness in the future, and the impact of interest rate
fluctuations on such indebtedness; our obligations under a tax
receivable agreement may be significant; and the high concentration
of ownership of our Class A Common Stock and the fact that we are
controlled by the Amneal Group. The forward-looking statements
contained herein are also subject generally to other risks and
uncertainties that are described from time to time in the Company’s
filings with the Securities and Exchange Commission, including
under Item 1A, “Risk Factors” in the Company’s most recent Annual
Report on Form 10-K and in its subsequent reports on Forms 10-Q and
8-K. Investors are cautioned not to place undue reliance on any
such forward-looking statements, which speak only as of the date
they are made. Forward-looking statements included herein speak
only as of the date hereof and we undertake no obligation to revise
or update such statements to reflect the occurrence of events or
circumstances after the date hereof.
Non-GAAP Financial Measures
As previously disclosed, beginning in the first quarter of 2022,
we no longer exclude research and development milestone expenses
related to license and collaboration agreements from our non-GAAP
financial measures and our line item components, including adjusted
research and development, adjusted EBITDA, adjusted operating
income, adjusted net income and adjusted earnings per share. Prior
period adjusted results have been revised to reflect this
change.
This release includes certain non-GAAP financial measures,
including EBITDA, adjusted EBITDA, adjusted net income, adjusted
diluted earnings per share, adjusted gross profit, adjusted gross
margin, adjusted operating income, adjusted cost of goods sold,
adjusted selling general and administrative expense, and adjusted
research and development expense, which are intended as
supplemental measures of the Company’s performance that are not
required by or presented in accordance with GAAP. The calculation
of non-GAAP adjusted diluted earnings per share assumes the
conversion of all outstanding shares of class B Common Stock to
shares of class A Common Stock under the if-converted method.
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 net income, diluted earnings per share, gross
profit, gross margin, operating income, cost of goods sold, selling
general and administrative expense, and research and development
expense or any other 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.
Consolidated Statements of
Operations
(Unaudited; In thousands,
except per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net revenue
$
559,355
$
535,075
$
1,056,988
$
1,028,180
Cost of goods sold
353,724
322,577
676,786
624,120
Cost of goods sold impairment charges
5,112
—
5,112
—
Gross profit
200,519
212,498
375,090
404,060
Selling, general and administrative
98,806
86,157
197,471
176,883
Research and development
50,748
52,864
103,546
101,046
In-process research and development
impairment charges
—
710
—
710
Intellectual property legal development
expenses
821
1,365
1,585
4,947
Acquisition, transaction-related and
integration expenses
241
4,283
675
7,085
Charges related to legal matters, net
251,877
—
249,551
—
Insurance recoveries for property losses
and associated expenses
(1,911
)
—
(1,911
)
—
Restructuring and other charges
—
—
731
363
Change in fair value of contingent
consideration
(270
)
—
(70
)
—
Other operating income
(1,175
)
—
(1,175
)
—
Operating (loss) income
(198,618
)
67,119
(175,313
)
113,026
Other (expense) income:
Interest expense, net
(35,623
)
(34,083
)
(68,958
)
(67,968
)
Foreign exchange loss, net
(5,429
)
(2,244
)
(7,442
)
(156
)
Loss on refinancing
(291
)
—
(291
)
—
Other income, net
7,230
4,032
9,352
4,826
Total other expense, net
(34,113
)
(32,295
)
(67,339
)
(63,298
)
(Loss) income before income taxes
(232,731
)
34,824
(242,652
)
49,728
Provision for income taxes
7,350
2,648
3,889
3,007
Net (loss) income
(240,081
)
32,176
(246,541
)
46,721
Less: Net loss (income) attributable to
non-controlling interests
119,273
(17,644
)
124,015
(25,483
)
Net (loss) income attributable to
Amneal Pharmaceuticals, Inc. before accretion of redeemable
non-controlling interest
(120,808
)
14,532
(122,526
)
21,238
Accretion of redeemable non-controlling
interest
—
—
(438
)
—
Net (loss) income attributable to
Amneal Pharmaceuticals, Inc.
$
(120,808
)
$
14,532
$
(122,964
)
$
21,238
Net (loss) income per share
attributable to Amneal Pharmaceuticals, Inc.'s class A common
stockholders:
Basic
$
(0.80
)
$
0.10
$
(0.82
)
$
0.14
Diluted
$
(0.80
)
$
0.10
$
(0.82
)
$
0.14
Weighted-average common shares
outstanding:
Basic
150,993
148,996
150,445
148,507
Diluted
150,993
151,986
150,445
151,606
Amneal Pharmaceuticals,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited; In
thousands)
June 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
91,979
$
247,790
Restricted cash
6,203
8,949
Trade accounts receivable, net
688,849
662,583
Inventories
533,028
489,389
Prepaid expenses and other current
assets
232,204
110,218
Related party receivables
1,338
1,179
Total current assets
1,553,601
1,520,108
Property, plant and equipment, net
483,625
514,158
Goodwill
600,974
593,017
Intangible assets, net
1,204,224
1,166,922
Operating lease right-of-use assets
36,490
39,899
Operating lease right-of-use assets -
related party
19,212
20,471
Financing lease right-of-use assets
63,443
64,475
Other assets
79,836
20,614
Total assets
$
4,041,405
$
3,939,664
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
561,692
$
525,345
Current portion of liabilities for legal
matters
275,338
58,000
Revolving credit facility
85,000
—
Current portion of long-term debt, net
29,920
30,614
Current portion of operating lease
liabilities
10,096
9,686
Current portion of operating and financing
lease liabilities - related party
2,796
2,636
Current portion of financing lease
liabilities
3,318
3,101
Related party payables - short term
24,904
47,861
Total current liabilities
993,064
677,243
Long-term debt, net
2,622,447
2,680,053
Note payable - related party
38,856
38,038
Operating lease liabilities
28,904
32,894
Operating lease liabilities - related
party
17,380
18,783
Financing lease liabilities
60,011
60,251
Related party payables - long term
10,654
9,619
Other long-term liabilities
79,213
38,903
Total long-term liabilities
2,857,465
2,878,541
Redeemable non-controlling interests
17,885
16,907
Total stockholders' equity
172,991
366,973
Total liabilities and stockholders'
equity
$
4,041,405
$
3,939,664
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Cash Flows
(Unaudited; In
thousands)
Six Months Ended June
30,
2022
2021
Cash flows from operating
activities:
Net (loss) income
$
(246,541
)
$
46,721
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization
117,511
112,037
Unrealized foreign currency loss
8,014
124
Amortization of debt issuance costs and
discount
4,388
4,473
Loss on refinancing
291
—
Intangible asset impairment charges
5,112
710
Insurance recoveries for property and
equipment losses
(1,000
)
—
Stock-based compensation
16,327
12,962
Inventory provision
17,748
25,805
Change in fair value of contingent
consideration
(70
)
—
Other operating charges and credits,
net
3,449
2,764
Changes in assets and liabilities:
Trade accounts receivable, net
(26,561
)
(13,167
)
Inventories
(65,395
)
(54,580
)
Prepaid expenses, other current assets and
other assets
(119,747
)
(23,988
)
Related party receivables
(159
)
7,383
Accounts payable, accrued expenses and
other liabilities
273,947
(21,137
)
Related party payables
7,508
(3,912
)
Net cash (used in) provided by operating
activities
(5,178
)
96,195
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(15,842
)
(19,585
)
Deposits for future acquisition of
property, plant, and equipment
(3,955
)
(1,667
)
Acquisition of intangible assets
(10,000
)
(500
)
Acquisitions of businesses, net of cash
acquired
(84,714
)
(73,828
)
Proceeds from insurance recoveries for
property and equipment losses
1,000
—
Net cash used in investing activities
(113,511
)
(95,580
)
Cash flows from financing
activities:
Payments of deferred financing and
refinancing costs
(1,622
)
—
Payments of principal on debt, financing
leases and other
(63,010
)
(33,876
)
Borrowings on revolving credit
facility
85,000
—
Proceeds from exercise of stock
options
239
681
Employee payroll tax withholding on
restricted stock unit vesting
(3,291
)
(2,378
)
Tax distributions to non-controlling
interests
(9,917
)
(27,551
)
Acquisition of redeemable non-controlling
interest
(1,722
)
—
Payments of deferred consideration for
acquisitions - related party
(43,998
)
—
Payments of principal on financing lease -
related party
—
(93
)
Repayment of related party note
—
(1,000
)
Net cash used in financing activities
(38,321
)
(64,217
)
Effect of foreign exchange rate on
cash
(1,547
)
(366
)
Net decrease in cash, cash equivalents,
and restricted cash
(158,557
)
(63,968
)
Cash, cash equivalents, and restricted
cash - beginning of period
256,739
347,121
Cash, cash equivalents, and restricted
cash - end of period
$
98,182
$
283,153
Cash and cash equivalents - end of
period
$
91,979
$
278,306
Restricted cash - end of period
6,203
4,847
Cash, cash equivalents, and restricted
cash - end of period
$
98,182
$
283,153
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited, In
thousands)
Reconciliation of Net (Loss)
Income to EBITDA and Adjusted EBITDA (1)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net (loss) income
$
(240,081
)
$
32,176
$
(246,541
)
$
46,721
Adjusted to add:
Interest expense, net
35,623
34,083
68,958
67,968
Provision for income taxes
7,350
2,648
3,889
3,007
Depreciation and amortization
59,696
56,487
117,511
112,037
EBITDA (Non-GAAP)
$
(137,412
)
$
125,394
$
(56,183
)
$
229,733
Adjusted to add (deduct):
Stock-based compensation expense
8,262
7,632
16,327
12,962
Acquisition, site closure, and idle
facility expenses (2)
3,173
5,964
8,762
11,756
Restructuring and other charges (3)
—
—
731
363
Loss on refinancing
291
—
291
—
Inventory related charges
—
87
—
201
Charges related to legal matters, net
(4)
251,877
—
249,551
—
Asset impairment charges
5,250
741
5,250
1,064
Foreign exchange loss
5,429
2,244
7,442
156
Regulatory approval milestone
—
—
5,000
—
Change in fair value of contingent
consideration
(270
)
—
(70
)
—
Insurance recoveries for property losses
and associated expenses
(1,911
)
—
(1,911
)
—
Other
(104
)
807
(745
)
1,806
Adjusted EBITDA (Non-GAAP)
$
134,585
$
142,869
$
234,445
$
258,041
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In thousands,
except per share amounts)
Reconciliation of Net (Loss)
Income to Adjusted Net Income and Calculation of Adjusted Diluted
Earnings Per Share (1)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net (loss) income
$
(240,081
)
$
32,176
$
(246,541
)
$
46,721
Adjusted to add (deduct):
Non-cash interest
1,966
2,077
3,948
4,049
GAAP provision for income taxes
7,350
2,648
3,889
3,007
Amortization
40,216
41,361
79,368
80,875
Stock-based compensation expense
8,262
7,632
16,327
12,962
Acquisition, site closure expenses, and
idle facility expenses (2)
3,173
5,964
8,762
11,756
Restructuring and other charges (3)
—
—
731
363
Loss on refinancing
291
—
291
—
Inventory related charges
—
87
—
201
Charges related to legal matters,
including interest, net (4)
252,230
—
249,904
—
Asset impairment charges
5,250
741
5,250
1,064
Regulatory approval milestone
—
—
5,000
—
Change in fair value of contingent
consideration
(270
)
—
(70
)
—
Insurance recoveries for property losses
and associated expenses
(1,911
)
—
(1,911
)
—
Other
(103
)
807
(603
)
1,806
Provision for income taxes (5)
(17,451
)
(20,132
)
(27,659
)
(35,185
)
Net income attributable to non-controlling
interests not associated with our class B common stock
(1,889
)
(2,054
)
(4,088
)
(3,850
)
Adjusted net income (Non-GAAP)
$
57,033
$
71,307
$
92,598
$
123,769
Weighted average diluted shares
outstanding (Non-GAAP) (6)
304,278
304,103
304,456
303,722
Adjusted diluted earnings per share
(Non-GAAP)
$
0.19
$
0.23
$
0.30
$
0.41
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(Unaudited; In
thousands)
Explanations for
Reconciliations of Net (Loss) Income to EBITDA and Adjusted EBITDA
and
Net (Loss) Income to Adjusted
Net Income and Calculation of Adjusted Diluted Earnings per
Share
(1)
Beginning in the first quarter of 2022, we
will no longer exclude research and development milestone expenses
related to license and collaboration agreements from our non-GAAP
financial measures and our line item components, including adjusted
research and development, adjusted EBITDA, adjusted operating
income, adjusted net income and adjusted earnings per share. Prior
period adjusted results have been revised to reflect this change.
Refer to our Form 8-K filed on May 4, 2022 for additional
information.
(2)
Acquisition, site closure, and idle
facility expenses for the three months ended June 30, 2022
primarily included: (i.) integration costs associated with the
acquisition of the baclofen franchise from certain entities
affiliated with Saol International Limited which closed on February
9, 2022 (the “Saol Acquisition”) and (ii) site closure costs
associated with the planned cessation of manufacturing at our
Hauppauge, NY facility. Acquisition, site closure, and idle
facility expenses for the six months ended June 30, 2022 primarily
included (i) transaction and integration costs associated with the
Saol Acquistion; (ii.) integration costs associated with the
acquisition of Puniska Healthcare Pvt. Ltd. which closed on
November 2, 2021; and (iii) site closure costs associated with the
planned cessation of manufacturing at our Hauppauge, NY facility.
Acquisition, site closure and idle facility expenses for the three
and six months ended June 30, 2021 primarily included (i)
transaction and integration costs associated with the acquisition
of Kashiv Specialty Pharmaceuticals, LLC, which closed on April 2,
2021; (ii) integration costs associated with the acquisition of
AvKARE; and (iii) site closure expenses associated with the planned
cessation of manufacturing at our Hauppauge, NY facility.
(3)
For the three and six months ended June
30, 2021, restructuring and other charges primarily consisted of
cash severance charges associated with the cost of benefits for
former management employees.
(4)
For the three and six months ended June
30, 2022, charges related to legal matters, net, primarily included
charges for the preliminary settlement of the Opana ER® antitrust
litigation, net of insurance recoveries associated with class
action shareholder lawsuits.
(5)
The non-GAAP effective tax rates for the
three and six months ended June 30, 2022 were 23.4% and 23.0%,
respectively. The non-GAAP effective tax rates for the three and
six months ended June 30, 2021 were 21.0%.
(6)
Weighted average diluted shares
outstanding consisted of class A common stock and class B common
stock under the if-converted method.
Amneal Pharmaceuticals,
Inc.
Generics Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Three Months Ended June 30,
2022
Three Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
364,895
$
—
$
364,895
$
360,437
$
—
$
360,437
Cost of goods sold (2)
223,423
(13,961
)
209,462
204,154
(13,637
)
190,517
Cost of goods sold impairment charges
5,112
(5,112
)
—
—
—
—
Gross profit
136,360
19,073
155,433
156,283
13,637
169,920
Gross margin %
37.4
%
42.6
%
43.4
%
47.1
%
Selling, general and administrative
(3)
26,558
(1,200
)
25,358
11,797
9
11,806
Research and development (4)
44,174
(1,406
)
42,768
43,431
(1,196
)
42,235
In-process research and development
impairment charges
—
—
—
710
(710
)
—
Intellectual property legal development
expense
778
—
778
1,340
—
1,340
Acquisition, transaction-related and
integration expenses
8
(8
)
—
—
—
—
Charges related to legal matters
483
(483
)
—
—
—
—
Insurance recoveries for property losses
and associated expenses
(1,911
)
1,911
—
—
—
—
Other operating income
(1,175
)
—
(1,175
)
—
—
—
Operating income
$
67,445
$
20,259
$
87,704
$
99,005
$
15,534
$
114,539
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
June 30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($1.3 million and $1.4 million), amortization
expense ($10.2 million and $9.8 million), site closure and idle
facility expenses ($2.4 million and $2.2 million), inventory
related charges (none and $0.1 million), asset impairment charges
($0.1 million and none), and other (none and $0.1 million).
(3)
Adjustments for the three months ended
June 30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($0.6 million and $0.4 million), site closure
costs ($0.6 million and $(0.5) million), and other (none and $0.1
million).
(4)
Adjustments for the three months ended
June 30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($1.4 million and $1.0 million) and other
(none and $0.2 million). Non-GAAP adjusted research and development
for the three months ended June 30, 2021, as previously reported,
has been revised to include $7.8 million of research and
development milestone expenses previously excluded.
Amneal Pharmaceuticals,
Inc.
Generics Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Six Months Ended June 30,
2022
Six Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
682,642
$
—
$
682,642
$
672,945
$
—
$
672,945
Cost of goods sold (2)
422,453
(29,052
)
393,401
389,452
(25,656
)
363,796
Cost of goods sold impairment charges
5,112
(5,112
)
—
—
—
—
Gross profit
255,077
34,164
289,241
283,493
25,656
309,149
Gross margin %
37.4
%
42.4
%
42.1
%
45.9
%
Selling, general and administrative
(3)
54,151
(7,450
)
46,701
30,559
(815
)
29,744
Research and development (4)
87,395
(2,565
)
84,830
79,548
(2,198
)
77,350
In-process research and development
impairment charges
—
—
—
710
(710
)
—
Intellectual property legal development
expenses
1,550
—
1,550
4,922
—
4,922
Acquisition, transaction-related and
integration expenses
8
(8
)
—
—
—
—
Charges related to legal matters
2,157
(2,157
)
—
—
—
—
Insurance recoveries for property losses
and associated expenses
(1,911
)
1,911
—
—
—
—
Restructuring and other charges
206
(206
)
—
Other operating income
(1,175
)
—
(1,175
)
80
(80
)
—
Operating income
$
112,696
$
44,639
$
157,335
$
167,674
$
29,459
$
197,133
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the six months ended June
30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($2.8 million and $2.0 million), amortization
expense ($19.5 million and $17.8 million), site closure and idle
facility expenses ($7.0 million and $4.7 million), inventory
related charges (none and $0.2 million), asset impairment charges
($0.1 and $0.4 million), and other ($(0.3) million and $0.6
million).
(3)
Adjustments for the six months ended June
30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($1.3 million and $0.8 million), a regulatory
approval milestone ($5.0 million and none), and site closure costs
($1.1 million and immaterial).
(4)
Adjustments for the six months ended June
30, 2022 and 2021, respectively, were comprised of stock-based
compensation expense ($2.6 million and $1.8 million) and other
(none and $0.3 million). Non-GAAP adjusted research and development
for the six months ended June 30, 2021, as previously reported, has
been revised to include $11.3 million of research and development
milestone expenses previously excluded.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(Unaudited; In
thousands)
Three Months Ended June 30,
2022
Three Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
97,001
$
—
$
97,001
$
88,635
$
—
$
88,635
Cost of goods sold (1)
42,791
(26,878
)
15,913
48,683
$
(27,500
)
21,183
Gross profit
54,210
26,878
81,088
39,952
27,500
67,452
Gross margin %
55.9
%
83.6
%
45.1
%
76.1
%
Selling, general and administrative
(2)
23,171
199
23,370
20,656
(741
)
19,915
Research and development (2)
6,574
(403
)
6,171
9,433
(289
)
9,144
Intellectual property legal development
expenses
43
—
43
25
—
25
Acquisition, transaction-related and
integration expenses
32
(32
)
—
16
(16
)
—
Change in fair value of contingent
consideration (3)
(270
)
270
—
—
—
—
Operating income
$
24,660
$
26,844
$
51,504
$
9,822
$
28,546
$
38,368
(1)
Adjustments for the three months ended
June 30, 2022 and 2021 were comprised of amortization expense.
(2)
Adjustments for the three months ended
June 30, 2022 and 2021 were comprised of stock-based compensation
expense.
(3)
Contingent consideration was recorded in
connection with the acquisition of Kashiv Specialty
Pharmaceuticals, LLC.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(Unaudited; In
thousands)
Six Months Ended June 30,
2022
Six Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
182,087
$
—
$
182,087
$
184,566
$
—
$
184,566
Cost of goods sold (1)
86,644
(53,532
)
33,112
96,881
(54,993
)
41,888
Gross profit
95,443
53,532
148,975
87,685
54,993
142,678
Gross margin %
52.4
%
81.8
%
47.5
%
77.3
%
Selling, general and administrative
(2)
47,571
(414
)
47,157
40,537
(1,332
)
39,205
Research and development (3)
16,151
(729
)
15,422
21,498
(469
)
21,029
Intellectual property legal development
expenses
35
—
35
25
—
25
Acquisition, transaction-related and
integration expenses
32
(32
)
—
16
(16
)
—
Change in fair value of contingent
consideration (4)
(70
)
70
—
—
—
—
Operating income
$
31,724
$
54,637
$
86,361
$
25,609
$
56,810
$
82,419
(1)
Adjustments for the six months ended June
30, 2022 and 2021 were comprised of amortization expense.
(2)
Adjustments for the six months ended June
30, 2022 and 2021 were comprised of stock-based compensation
expense.
(3)
Adjustments for the six months ended June
30, 2022 and 2021 were comprised of stock-based compensation
expense. Non-GAAP adjusted research and development for the six
months ended June 30, 2021, as previously reported, has been
revised to include $7.4 million of research and development
milestone expenses previously excluded.
(4)
Contingent consideration was recorded in
connection with the acquisition of Kashiv Specialty
Pharmaceuticals, LLC.
Amneal Pharmaceuticals,
Inc.
AvKARE Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Three Months Ended June 30,
2022
Three Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
97,459
$
—
$
97,459
$
86,003
$
—
$
86,003
Cost of goods sold
87,510
—
87,510
69,740
—
69,740
Gross profit
9,949
—
9,949
16,263
—
16,263
Gross margin %
10.2
%
10.2
%
18.9
%
18.9
%
Selling, general and administrative
(2)
12,735
(4,933
)
7,802
13,599
(6,183
)
7,416
Acquisition, transaction-related and
integration expenses (3)
—
—
—
491
(491
)
—
Operating (loss) income
$
(2,786
)
$
4,933
$
2,147
$
2,173
$
6,674
$
8,847
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
June 30, 2022 and 2021 were comprised of amortization expense.
(3)
Adjustments for the three months ended
June 30, 2021 were comprised of finance integration expenses.
Amneal Pharmaceuticals,
Inc.
AvKARE Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(Unaudited; In
thousands)
Six Months Ended June 30,
2022
Six Months Ended June 30,
2021
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
192,259
$
—
$
192,259
$
170,669
$
—
$
170,669
Cost of goods sold
167,689
—
167,689
137,787
—
137,787
Gross profit
24,570
—
24,570
32,882
—
32,882
Gross margin %
12.8
%
12.8
%
19.3
%
19.3
%
Selling, general and administrative
(2)
26,145
(9,459
)
16,686
27,303
(12,367
)
14,936
Acquisition, transaction-related and
integration expenses (3)
—
—
—
1,422
(1,422
)
—
Operating income
$
(1,575
)
$
9,459
$
7,884
$
4,157
$
13,789
$
17,946
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the six months ended June
30, 2022 and 2021, respectively, were comprised of amortization
expense ($9.9 million and $12.4 million) and other ($(0.4) million
and none).
(3)
Adjustments for the six months ended June
30, 2021 were comprised of finance integration expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220805005035/en/
Anthony DiMeo Head of Investor Relations
anthony.dimeo@amneal.com
Amneal Pharmaceuticals (NYSE:AMRX)
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