Assertio Holdings, Inc. (“Assertio” or the “Company”) (Nasdaq:
ASRT), a leading commercial pharmaceutical company bringing
differentiated products to patients, today reported financial
results for the third quarter ended September 30, 2021.
Financial Highlights:
(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
(in thousands) |
|
|
|
|
|
|
|
Net Product Sales (GAAP) |
$ |
25,997 |
|
|
$ |
33,664 |
|
|
|
$ |
77,271 |
|
|
|
$ |
61,974 |
|
|
Net Income (Loss) (GAAP) |
$ |
3,737 |
|
|
$ |
(10,522 |
) |
|
|
$ |
(5,887 |
) |
|
|
$ |
(3,791 |
) |
|
Adjusted EBITDA
(Non-GAAP)(1) |
$ |
15,796 |
|
|
$ |
5,242 |
|
|
|
$ |
31,004 |
|
|
|
$ |
8,116 |
|
|
(1) Adjusted EBITDA is reconciled to the
corresponding GAAP measures in the schedules attached.
“This quarter represents the achievement of several
significant milestones in the transformation of Assertio, as our
restructuring has been completed and we have now shifted our
priorities to growing the business. Our results are evidence that
our investments in digital capabilities and the strength of our
model are gathering momentum,” said Dan Peisert, President and
Chief Executive Officer of Assertio.
“Due to the strength of our results year-to-date
and the confidence we have in the outlook for our business, we have
raised our guidance for both full-year net product sales and
non-GAAP adjusted EBITDA. In a short period of time we have built a
lean, efficient organization, mitigated or resolved several legacy
legal uncertainties, and created our commercial model. The
execution against our key priorities has Assertio well positioned
for the next step of growth through business development.”
Third Quarter 2021 and Subsequent
Highlights:
Executing on 2021 Priorities:
- Mitigating Legacy Legal
Uncertainties: During the third quarter of 2021, the
Company continued to focus on resolving legacy legal uncertainties
and took substantial steps toward settling certain matters in a way
that management believes will allow it to invest in sustainable
long-term growth.
- The Company recently settled its
federal Glumetza antitrust litigation for $7.0 million, which was
paid in the quarter. This includes a $3.85 million class settlement
that is subject to court approval. The California state case
brought by Humana remains ongoing.
- The Company also entered into a
settlement agreement for a total of $1.2 million, of which our
insurer will pay $0.8 million, for its securities class action and
related derivatives, also subject to court approval.
- Both of these settlements were part of
the Company’s loss contingency provision taken the second quarter
of 2021. The Company admitted no liability as to the claims against
it and denied all allegations of wrongdoing.
- Delivering on Restructuring
Synergies: The Company’s successful execution of its
restructuring plan has resulted in cost savings that have come in
ahead of its previously announced target of $40.0 million in 2021.
Despite the anticipated year-over-year product sales decline, the
cost savings has resulted in substantial improvement in net income,
adjusted EBITDA, and operating cash flows.
- Digital Acceleration and New
Channels: Our partnership with the leading migraine
telemedicine platform, Cove, has had a strong initial launch with a
77% increase in CAMBIA® prescriptions through Cove in the third
quarter of 2021 compared to the third quarter of 2020. Our SPRIX®
program with Cove was also recently launched.
- Generating Strong Operating
Cash Flow: The Company generated $4.7 million of net cash
flows from operating activities in the third quarter, inclusive of
its legal settlement payments of $7.0 million.
- Reducing Our Debt:
The Company’s cash balance as of September 30, 2021 was $58.7
million. A principal payment of $4.8 million was made for the
senior secured debt on November 1, 2021, leaving an outstanding
balance of $70.8 million that does not fully mature until
2024.
2021 Financial Guidance:
The Company announces it has raised its full-year
net product sales and adjusted EBITDA guidance:
|
Prior Guidance |
New Guidance |
Net Product Sales (GAAP) |
$91.0 - $96.0 Million |
Greater Than $103.0 Million |
Adjusted EBITDA
(Non-GAAP)(1) |
$34.0 - $37.0 Million |
Greater Than $43.0 Million |
(1) See “Non-GAAP Financial Measures” below for
additional information.
COVID-19
Following the outbreak of COVID-19 during early
2020, the Company’s priority was and remains the health and safety
of its employees, their families, and the patients it serves. As a
result, in March 2020, the Company initiated remote working
arrangements and maintained flexible work arrangements for
individuals, which continued through the remainder of 2020 and into
2021. In addition to the health and safety of its employees, the
Company is focused on ensuring that it continues making its
products accessible to the patients who need them. Because COVID-19
impacted its ability to see in-person providers who prescribe its
products, the Company adapted its approach during 2020 and
increased its virtual visits. Additionally, due to the limitations
on elective surgeries and changes in patient behavior since the
outbreak of COVID-19, the Company experienced a decline and
subsequent volatility in prescriptions associated with those
elective procedures.
The Company implemented a restructuring plan in
December 2020 which, it believes, allows the business to continue
to provide its differentiated products to patients and better
positions itself for future success. The Company believes that it
is prepared with sufficient product inventory, technology to
facilitate virtual and / or digital communications, and operations
prepared to adapt its work environment as needed. The extent to
which its operations may continue to be impacted by the COVID-19
pandemic will depend largely on future developments, which are
highly uncertain and cannot be accurately predicted, including new
information which may emerge concerning the severity of the
outbreak, actions by government authorities to contain the outbreak
or treat its impact, the emergence of new COVID-19 variants and the
related potential for new surges in infections, and the
distribution, public acceptance and efficacy of COVID-19 vaccines
including for emerging variants.
Investor Presentation
Please visit
http://investor.assertiotx.com/overview/default.aspx to view
the accompanying third quarter 2021 investor presentation.
Conference Call Information
Assertio’s management will host a conference call
to discuss its third quarter 2021 financial results today:
Date: |
Thursday, November 4, 2021 |
Time: |
4:30 p.m. Eastern Time |
Webcast (live and archive): |
http://investor.assertiotx.com/overview/default.aspx
(Events & Webcasts, Investor Page) |
Dial-in numbers: |
1-844-200-6205 (domestic) |
|
1-929-526-1599 (international) |
Conference number: |
299479 |
To access the live webcast and replay, please visit
Assertio’s investor relations website at
http://investor.assertiotx.com/overview/default.aspx. Please
connect at least 15 minutes prior to the live webcast to ensure
adequate time for any software download that may be needed to
access the webcast. The replay will be available approximately two
hours after the call on Assertio’s investor website.
About Assertio
Assertio is a leading commercial pharmaceutical
company bringing differentiated products to patients. The Company
has a robust portfolio of branded prescription products in three
areas: neurology, hospital and pain and inflammation. Assertio has
grown through business development including licensing, mergers and
acquisitions. To learn more about Assertio, visit
www.assertiotx.com.
Investor Contact
Max NemmersHead, Investor Relations and
Administration investor@assertiotx.com
Forward Looking Statements
Statements in this communication that are not
historical facts are forward-looking statements that reflect
Assertio's current expectations, assumptions and estimates of
future performance and economic conditions. These forward-looking
statements are made in reliance on the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements relate to, among other things, future
events or the future performance or operations of Assertio. All
statements other than historical facts may be forward-looking
statements and can be identified by words such as "anticipate,"
"believe," "could," "design," "estimate," "expect," "forecast,"
"goal," "guidance," "imply," "intend," "may", "objective,"
"opportunity," "outlook," "plan," "position," "potential,"
"predict," "project," "prospective," "pursue," "seek," "should,"
"strategy," "target," "would," "will," "aim" or other similar
expressions that convey the uncertainty of future events or
outcomes are used to identify forward-looking statements. Such
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the control of Assertio. Factors that could cause
Assertio's actual results to differ materially from those implied
in the forward-looking statements include: (1) risks related to
disruption of management time from ongoing business operations due
to the recent restructuring of Assertio’s workforce announced on
December 15, 2020 (the “Restructuring”) and/or the integration of
the merger with Zyla Life Sciences (the “Merger”); (2) unexpected
costs, charges or expenses resulting from the Restructuring and/or
the Merger; (3) the ability of the Assertio to retain key
personnel; (4) potential adverse changes to business relationships
resulting from the Merger; (5) the combined company's ability to
achieve the growth prospects and synergies expected from the
Merger, as well as delays, challenges and expenses associated with
integrating the combined company’s existing businesses; (6)
negative effects of the Merger on the market price of Assertio's
common stock, credit ratings and operating results; (7)
legislative, regulatory and economic developments, including
changing business conditions in the industries in which Assertio
operates; (8) Assertio's ability to successfully pursue and
complete business development, strategic partnerships, and
investment opportunities to build and grow for the future; (9) the
commercial success and market acceptance of Assertio's products;
(10) coverage of Assertio’s products by payors and pharmacy benefit
managers; (11) Assertio’s ability to execute on its sales,
marketing and non-personal and digital promotion strategies,
including developing relationships with customers, physicians,
payors and other constituencies; (12) the entry of any generic
products for any of Assertio’s products; (13) the outcome of
Assertio’s opioid-related investigations, Assertio’s opioid-related
litigation and related claims for insurance coverage, and
Assertio’s securities class action and other disputes and
litigation, and the costs and expenses associated therewith; (14)
the outcome of Assertio’s antitrust litigation relating to the drug
Glumetza®; (15) Assertio's estimates regarding expenses, future
revenues, capital requirements and needs for additional financing;
(16) Assertio's ability to generate sufficient cash flow from its
business to make payments on its indebtedness; (17) Assertio's
ability to restructure or refinance its indebtedness and Assertio's
compliance with the terms and conditions of the agreements
governing its indebtedness; (18) compliance or non-compliance with
legal and regulatory requirements related to the development or
promotion of pharmaceutical products in the U.S.; (19) Assertio's
plans to acquire, in-license or co-promote other products, and/or
acquire companies; (20) Assertio's ability to raise additional
capital, if necessary; (21) variations in revenues obtained from
collaborative agreements; (22) Assertio's counterparties’
compliance or non-compliance with obligations under agreements;
(23) the ability of Assertio's common stock to maintain compliance
with Nasdaq's minimum closing bid requirement of at least $1.00 per
share; (24) obtaining and maintaining intellectual property
protection for Assertio’s products; (25) Assertio’s ability to
operate its business without infringing the intellectual property
rights of others; (26) the impact of disasters, acts of terrorism
or global pandemics, including COVID-19; (27) general market
conditions; and (28) other risks listed in Assertio's filings with
the United States Securities and Exchange Commission ("SEC"). These
risks are more fully described in Assertio's Annual Report on Form
10-K and Quarterly Reports on Form 10-Q filed with the SEC and in
other filings Assertio makes with the SEC from time to time.
Investors and potential investors are urged not to place undue
reliance on forward-looking statements in this communication, which
speak only as of this date. While Assertio may elect to update
these forward-looking statements at some point in the future, it
specifically disclaims any obligation to update or revise any
forward-looking-statements contained in this press release whether
as a result of new information or future events, except as may be
required by applicable law. Nothing contained herein constitutes or
will be deemed to constitute a forecast, projection or estimate of
the future financial performance or expected results of
Assertio.
Non-GAAP Financial MeasuresTo
supplement the Company’s financial results presented on a U.S.
generally accepted accounting principles (GAAP) basis, the Company
has included information about non-GAAP measures of EBITDA and
adjusted EBITDA as useful operating metrics. The Company believes
that the presentation of these non-GAAP financial measures, when
viewed with results under GAAP and the accompanying reconciliation,
provides supplementary information to analysts, investors, lenders,
and the Company’s management in assessing the Company’s performance
and results from period to period. The Company uses these non-GAAP
measures internally to understand, manage and evaluate the
Company’s performance, and in part, in the determination of bonuses
for executive officers and employees. These non-GAAP financial
measures should be considered in addition to, and not a substitute
for, or superior to, net income or other financial measures
calculated in accordance with GAAP. Non-GAAP financial measures
used by us may be calculated differently from, and therefore may
not be comparable to, non-GAAP measures used by other
companies.
This release also includes estimated non-GAAP
adjusted EBITDA information, which the Company believes enables
investors to better understand the anticipated performance of the
business, but should be considered a supplement to, and not as a
substitute for or superior to, financial measures calculated in
accordance with GAAP. No reconciliation of estimated non-GAAP
adjusted EBITDA to estimated net income is provided in this release
because some of the information necessary for estimated net income
such as income taxes, fair value change in contingent
consideration, and stock-based compensation is not yet
ascertainable or accessible and the Company is unable to quantify
these amounts that would be required to be included in estimated
net income without unreasonable efforts.
Specified ItemsNon-GAAP measures
presented within this release exclude specified items. The Company
considers specified items to be significant income/expense items
not indicative of current operations. Specified items include
adjustments to interest expense, income tax expense (benefit),
depreciation expense, amortization expense, sales reserves
adjustments for products the Company is no longer selling,
stock-based compensation expense, fair value adjustments to
contingent consideration, restructuring costs, amortization of fair
value inventory step-up as result of purchase accounting, non-cash
adjustments to Collegium Commercialization agreement revenue,
transaction-related costs, gains or losses from adjustments to
long-lived assets and assets not part of current operations, and
gains or losses resulting from debt refinancing or
extinguishment.
Revisions to Specified Items As a
result of the Company’s December 2020 restructuring plan and
subsequent announcement of a new executive team, beginning in 2021,
the Company will no longer adjust for legal costs and expenses
incurred in connection with opioid-related litigation,
investigations and regulations pertaining to the Company’s
historical commercialization of opioid products as a specified item
in the non-GAAP measure adjusted EBITDA. Management’s priorities
include, amongst other items, operating cash flows and mitigating
legacy legal uncertainties and therefore believes that investors
will benefit from the ability to view the profitability of the
Company’s current and ongoing business activities with such costs
included. Given the timing of the December 2020 restructuring plan
and subsequent announcement of the new executive team, Management
believes 2021 is the appropriate time to make such an update. Prior
period amounts of Adjusted EBITDA have been recast to conform to
this presentation.
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME(in thousands, except per
share amounts)(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
|
|
|
Product sales, net |
$ |
25,997 |
|
|
|
$ |
33,664 |
|
|
|
$ |
77,271 |
|
|
|
$ |
61,974 |
|
|
Commercialization agreement, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,258 |
|
|
Royalties and milestones |
416 |
|
|
|
299 |
|
|
|
1,391 |
|
|
|
1,158 |
|
|
Other revenue |
(941 |
) |
|
|
602 |
|
|
|
(976 |
) |
|
|
1,709 |
|
|
Total revenues |
25,472 |
|
|
|
34,565 |
|
|
|
77,686 |
|
|
|
76,099 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of sales |
3,050 |
|
|
|
6,462 |
|
|
|
10,936 |
|
|
|
13,099 |
|
|
Research and development expenses |
— |
|
|
|
1,316 |
|
|
|
— |
|
|
|
3,983 |
|
|
Selling, general and administrative expenses |
9,313 |
|
|
|
27,607 |
|
|
|
43,279 |
|
|
|
83,052 |
|
|
Amortization of intangible assets |
7,175 |
|
|
|
5,587 |
|
|
|
20,939 |
|
|
|
18,237 |
|
|
Restructuring charges |
— |
|
|
|
268 |
|
|
|
1,089 |
|
|
|
6,787 |
|
|
Total costs and expenses |
19,538 |
|
|
|
41,240 |
|
|
|
76,243 |
|
|
|
125,158 |
|
|
Income (loss) from operations |
5,934 |
|
|
|
(6,675 |
) |
|
|
1,443 |
|
|
|
(49,059 |
) |
|
Other (expense) income : |
|
|
|
|
|
|
|
Interest expense |
(2,495 |
) |
|
|
(3,050 |
) |
|
|
(7,783 |
) |
|
|
(13,328 |
) |
|
Other gain (loss), net |
344 |
|
|
|
253 |
|
|
|
747 |
|
|
|
(3,571 |
) |
|
Gain on sale of Gralise |
— |
|
|
|
— |
|
|
|
— |
|
|
|
126,655 |
|
|
Loss on extinguishment of convertible notes |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(47,880 |
) |
|
Loss on sale of NUCYNTA |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14,749 |
) |
|
Loss on debt extinguishment |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,233 |
) |
|
Total other (expense) income |
(2,151 |
) |
|
|
(2,797 |
) |
|
|
(7,036 |
) |
|
|
38,894 |
|
|
Net income (loss) before income taxes |
3,783 |
|
|
|
(9,472 |
) |
|
|
(5,593 |
) |
|
|
(10,165 |
) |
|
Income tax (expense) benefit |
(46 |
) |
|
|
(1,050 |
) |
|
|
(294 |
) |
|
|
6,374 |
|
|
Net income (loss) and Comprehensive income (loss) |
$ |
3,737 |
|
|
|
$ |
(10,522 |
) |
|
|
$ |
(5,887 |
) |
|
|
$ |
(3,791 |
) |
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
$ |
0.08 |
|
|
|
$ |
(0.35 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(0.15 |
) |
|
Diluted net income (loss) per share |
$ |
0.08 |
|
|
|
$ |
(0.35 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(0.15 |
) |
|
Shares used in computing basic net income (loss) per share |
44,969 |
|
|
|
29,891 |
|
|
|
42,550 |
|
|
|
24,958 |
|
|
Shares used in computing diluted net income (loss) per share |
45,055 |
|
|
|
29,891 |
|
|
|
42,550 |
|
|
|
24,958 |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS(in
thousands)(unaudited)
|
September 30, 2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
58,726 |
|
|
|
$ |
20,786 |
|
|
Accounts receivable, net |
36,145 |
|
|
|
44,350 |
|
|
Inventories, net |
5,481 |
|
|
|
11,712 |
|
|
Prepaid and other current assets |
12,193 |
|
|
|
17,406 |
|
|
Total current assets |
112,545 |
|
|
|
94,254 |
|
|
Property and equipment, net |
1,678 |
|
|
|
2,437 |
|
|
Intangible assets, net |
179,143 |
|
|
|
200,082 |
|
|
Other long-term assets |
5,939 |
|
|
|
6,501 |
|
|
Total assets |
$ |
299,305 |
|
|
|
$ |
303,274 |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
7,666 |
|
|
|
$ |
14,808 |
|
|
Accrued rebates, returns and discounts |
43,830 |
|
|
|
63,114 |
|
|
Accrued liabilities |
13,782 |
|
|
|
27,071 |
|
|
Current portion of long-term debt |
12,257 |
|
|
|
11,942 |
|
|
Contingent consideration, current portion |
7,200 |
|
|
|
6,776 |
|
|
Interest payable |
4,193 |
|
|
|
1,793 |
|
|
Other current liabilities |
11,552 |
|
|
|
7,182 |
|
|
Total current liabilities |
100,480 |
|
|
|
132,686 |
|
|
Long-term debt |
66,410 |
|
|
|
72,160 |
|
|
Contingent consideration |
30,759 |
|
|
|
31,776 |
|
|
Other long-term liabilities |
4,796 |
|
|
|
11,138 |
|
|
Total liabilities |
202,445 |
|
|
|
247,760 |
|
|
Commitments and contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, $0.0001 par value, 200,000,000 shares authorized;
44,622,498 and 28,392,149 shares issued and outstanding as of
September 30, 2021 and December 31, 2020, respectively |
4 |
|
|
|
3 |
|
|
Additional paid-in capital |
530,689 |
|
|
|
483,456 |
|
|
Accumulated deficit |
(433,833 |
) |
|
|
(427,945 |
) |
|
Total shareholders’ equity |
96,860 |
|
|
|
55,514 |
|
|
Total liabilities and shareholders' equity |
$ |
299,305 |
|
|
|
$ |
303,274 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
Operating Activities |
|
|
|
Net loss |
$ |
(5,887 |
) |
|
|
$ |
(3,791 |
) |
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
Gain on sale of Gralise |
— |
|
|
|
(126,655 |
) |
|
Loss on sale of NUCYNTA |
— |
|
|
|
14,749 |
|
|
Loss on extinguishment of Convertible Notes |
— |
|
|
|
47,880 |
|
|
Loss on prepayment of Senior Notes |
— |
|
|
|
8,233 |
|
|
Depreciation and amortization |
21,698 |
|
|
|
19,468 |
|
|
Amortization of debt discount, debt issuance costs and royalty
rights |
159 |
|
|
|
5,614 |
|
|
Recurring fair value measurement of assets and liabilities |
1,902 |
|
|
|
5,485 |
|
|
Stock-based compensation |
2,596 |
|
|
|
7,038 |
|
|
Provision for inventory and other assets |
(86 |
) |
|
|
2,561 |
|
|
Changes in assets and liabilities, net of acquisition: |
|
|
|
Accounts receivable |
8,205 |
|
|
|
24,944 |
|
|
Inventories |
6,317 |
|
|
|
(792 |
) |
|
Prepaid and other assets |
5,777 |
|
|
|
1,837 |
|
|
Accounts payable and other accrued liabilities |
(22,405 |
) |
|
|
(18,447 |
) |
|
Accrued rebates, returns and discounts |
(19,284 |
) |
|
|
(43,265 |
) |
|
Interest payable |
2,400 |
|
|
|
(4,449 |
) |
|
Net cash provided by (used in) operating activities |
1,392 |
|
|
|
(59,590 |
) |
|
Investing Activities |
|
|
|
Purchases of property and equipment |
— |
|
|
|
(10 |
) |
|
Cash acquired in Zyla Merger |
— |
|
|
|
7,585 |
|
|
Proceeds from sale of NUCYNTA |
— |
|
|
|
368,965 |
|
|
Proceeds from sale of Gralise |
— |
|
|
|
130,261 |
|
|
Proceeds from sale of investments |
— |
|
|
|
6,000 |
|
|
Net cash provided by investing activities |
— |
|
|
|
512,801 |
|
|
Financing Activities |
|
|
|
Payments in connection with convertible notes |
(335 |
) |
|
|
(264,731 |
) |
|
Payment in connection with Series A-1 and A-2 debt |
(4,750 |
) |
|
|
(10,000 |
) |
|
Payment of contingent consideration |
(2,495 |
) |
|
|
(261 |
) |
|
Payments in connection with Senior Notes settlement |
— |
|
|
|
(171,775 |
) |
|
Payments on Revolver |
— |
|
|
|
(10,000 |
) |
|
Payments on Promissory Note |
— |
|
|
|
(3,000 |
) |
|
Payment of Royalty Rights |
(510 |
) |
|
|
— |
|
|
Proceeds from issuance of common stock |
44,861 |
|
|
|
— |
|
|
Proceeds from exercise of stock options |
193 |
|
|
|
— |
|
|
Shares withheld for payment of employee's withholding tax
liability |
(416 |
) |
|
|
(814 |
) |
|
Net cash provided by (used in) financing activities |
36,548 |
|
|
|
(460,581 |
) |
|
Net increase (decrease) in cash and cash equivalents |
37,940 |
|
|
|
(7,370 |
) |
|
Cash and cash equivalents at beginning of year |
20,786 |
|
|
|
42,107 |
|
|
Cash and cash equivalents at end of period |
$ |
58,726 |
|
|
|
$ |
34,737 |
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow
Information |
|
|
|
Net cash paid for income taxes |
$ |
— |
|
|
|
$ |
865 |
|
|
Cash paid for interest |
$ |
5,216 |
|
|
|
$ |
12,100 |
|
|
RECONCILIATION OF GAAP NET INCOME (LOSS)
TO NON-GAAP EBITDA and ADJUSTED EBITDA (in
thousands)(unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Financial Statement Classification |
GAAP Net Income/(Loss) |
|
$ |
3,737 |
|
|
$ |
(10,522 |
) |
|
|
$ |
(5,887 |
) |
|
|
$ |
(3,791 |
) |
|
|
|
Interest expense |
|
2,495 |
|
|
3,050 |
|
|
|
7,783 |
|
|
|
13,328 |
|
|
|
Interest expense |
Income tax expense (benefit) |
|
46 |
|
|
1,050 |
|
|
|
294 |
|
|
|
(6,374 |
) |
|
|
Income tax benefit (expense) |
Depreciation expense |
|
236 |
|
|
561 |
|
|
|
758 |
|
|
|
1,231 |
|
|
|
Selling, general and administrative expenses |
Amortization of intangible assets |
|
7,175 |
|
|
5,587 |
|
|
|
20,939 |
|
|
|
18,237 |
|
|
|
Amortization of intangible assets |
EBITDA (Non-GAAP) |
|
$ |
13,689 |
|
|
$ |
(274 |
) |
|
|
$ |
23,887 |
|
|
|
$ |
22,631 |
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Legacy products revenue reserves (1) |
|
941 |
|
|
(602 |
) |
|
|
976 |
|
|
|
(1,709 |
) |
|
|
Other revenue |
Stock-based compensation (2) |
|
866 |
|
|
1,511 |
|
|
|
2,596 |
|
|
|
6,039 |
|
|
|
Multiple |
Contingent consideration fair value change (3) |
|
300 |
|
|
1,861 |
|
|
|
1,902 |
|
|
|
1,861 |
|
|
|
Selling, general and administrative expenses |
Restructuring cost (4) |
|
— |
|
|
268 |
|
|
|
1,089 |
|
|
|
6,787 |
|
|
|
Restructuring charges |
Other (5) |
|
— |
|
|
518 |
|
|
|
554 |
|
|
|
4,794 |
|
|
|
Multiple |
Prior year adjustments not repeating (6) |
|
— |
|
|
1,960 |
|
|
|
— |
|
|
|
(32,287 |
) |
|
|
Multiple |
Adjusted EBITDA (Non-GAAP) |
|
$ |
15,796 |
|
|
$ |
5,242 |
|
|
|
$ |
31,004 |
|
|
|
$ |
8,116 |
|
|
|
|
(1) |
Removal of the impact of revenue adjustment estimates related to
previously divested products. During the third quarter of 2021, the
Company reclassified product sales adjustments for previously
divested products from Product sales, net to Other revenue . There
was no change to Total revenue as a result of the
reclassifications. Prior period results have been recast to conform
with current period presentation. |
|
|
(2) |
Stock based compensation for the three and nine months ended
September 30, 2021 and three months ended September 30,
2020 is included in Selling, general and administrative expenses.
Stock based compensation for the nine months ended
September 30, 2020 included $0.3 million in Research and
development expense and $5.7 million in Selling, general and
administrative expenses. |
|
|
(3) |
The fair value of the contingent consideration is remeasured each
reporting period, with changes in the fair value resulting from a
change in the underlying inputs being recognized in operating
expenses until the contingent consideration arrangement is
settled. |
|
|
(4) |
Restructuring and related costs represents non-recurring costs
associated with the Company’s announced restructuring plans. |
|
|
(5) |
For the three and nine months ended September 30, 2021 and the
three and nine months ended September 30, 2020, Other
represents amortization of inventory step-up recognized in Cost of
sales related to Zyla acquired inventories sold. For the nine
months ended September 30, 2020, Other also includes credit
loss reserve recognized in the first quarter of 2020 in Other gain
(loss) related the Company’s investment in a company engaged in
medical research. |
|
|
(6) |
Represent the following one-time adjustments included in three and
nine months ended September 30, 2020: |
|
|
|
a. Gain on sale of Gralise of zero and $126.7 million,
respectivelyb. Loss on sale of NUCYNTA of zero and $14.7 million,
respectivelyc. Loss on extinguishment of convertible notes and debt
of zero and $56.1 million, respectivelyd. Transaction costs of $2.0
million and $18.0 million, respectivelye. Change in fair value of
Collegium warrants of zero and $3.6 million, respectivelyf. NUCYNTA
Commercialization agreement revenues of zero and $1.8 million,
respectively |
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