‒ Q3 2023 Net Revenue of $620 million; GAAP Net
Income of $10 million; Diluted EPS of $0.06 ‒
‒ Q3 2023 Adjusted Net Income(1) of $60
million; Adjusted EBITDA (1) of $154 million; Adjusted Diluted EPS
(1) of $0.19 ‒
‒ Affirmed Previously Announced Increased 2023
Full Year Guidance ‒
Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (“Amneal” or
the “Company”) announced its results today for the third quarter
ended September 30, 2023.
“We are pleased to report strong double-digit revenue and
adjusted EBITDA growth for the third quarter and raise our full
year guidance. The acceleration in our growth is a testament to the
strong execution of our strategy, the success of our new launches
and the continued diversification of our portfolio. We are on-track
to launch more than 40 new generic products in 2023, our new
biosimilars are outperforming, and IPX203 for Parkinson’s remains
on-track to launch in 2024. Looking ahead, we expect continued
strong growth and momentum across our business. With the organic
growth engine set, we are focused on further deleveraging and
driving value creation for shareholders,” said Chirag and Chintu
Patel, Co-Chief Executive Officers.
Net revenue in the third quarter of 2023 was $620 million, an
increase of 14% compared to $546 million in the third quarter of
2022. Revenue growth was driven by growth across all three business
segments with Generics growing 12% due to strong performance of our
complex portfolio, biosimilar uptake and new product launches,
AvKARE growing 25% due to new product introductions, and Specialty
growing 9% due to strong performance of key branded products.
Net income attributable to Amneal Pharmaceuticals, Inc. was $10
million in the third quarter of 2023 compared to a net loss of $3
million in the third quarter of 2022. Adjusted EBITDA(1) in the
third quarter of 2023 was $154 million, an increase of 22% compared
to the third quarter of 2022, reflective of strong revenue
performance, durable adjusted gross margins and continued operating
expense leverage. Diluted EPS in the third quarter of 2023 was
$0.06 compared to a loss of $0.02 for the third quarter of 2022.
Adjusted diluted EPS(1) in the third quarter of 2023 was $0.19
compared to $0.14 for the third quarter of 2022.
(1)
See “Non-GAAP Financial Measures”
below.
Affirmed Previously Announced Increased 2023 Full Year
Guidance
Current
Guidance
Prior
Guidance
Net revenue
$2.37 billion - $2.42 billion
$2.30 billion - $2.40 billion
Adjusted EBITDA (1)
$540 million - $550 million
$525 million - $540 million
Adjusted diluted EPS (2)
$0.51 - $0.58
$0.45 - $0.55
Operating cash flow (3)
$250 million - $280 million
$220 million - $250 million
Capital expenditures
$50 million - $60 million
$50 million - $60 million
Weighted average diluted shares
outstanding (4)
Approximately 310 million
Approximately 307 million
(1)
Includes 100% of Adjusted EBITDA from the
AvKARE acquisition. See also “Non GAAP Financial Measures”
below.
(2)
Accounts for 35% non controlling interest
in AvKARE. See also “Non GAAP Financial Measures” below.
(3)
Does not contemplate one time and non
recurring items such as legal settlements and other discrete
items.
(4)
Assumes the weighted average diluted
shares outstanding of class A and class B common stock under the if
converted method.
Amneal’s 2023 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, legal settlements, 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 November 7, 2023 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 1 (833) 470-1428 (in the U.S.) with access
code 605508. 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 1 (866) 813-9403 (in the U.S.) with access code
301025. For a list of toll-free international numbers, visit this
website:
https://www.netroadshow.com/events/global-numbers?confId=52762.
About Amneal
Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in
Bridgewater, NJ, is a fully integrated global pharmaceuticals
company. We make healthy possible through the development,
manufacturing, and distribution of a diverse portfolio of
approximately 270 generic and specialty pharmaceuticals, primarily
within the United States. In its Generics segment, the Company is
expanding across a broad range of complex product categories and
therapeutic areas, including injectables and biosimilars. In its
Specialty segment, Amneal has a growing portfolio of branded
pharmaceuticals 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, financial
results, or forecasts for the future, including among other things:
discussions of future operations, including international
expansion; 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 other non-historical statements. Words such as
“plans,” “expects,” “will,” “anticipates,” “estimates,” and similar
words, or the negatives thereof, 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, including with respect to future
market conditions, company performance and financial results,
operational investments, business prospects, new strategies and
growth initiatives, the competitive environment, and other events.
If the underlying assumptions prove inaccurate or known or unknown
risks or uncertainties materialize, actual results could vary
materially from the expectations and projections of the
Company.
Such risks and uncertainties include, but are not limited to:
our ability to successfully develop, license, acquire and
commercialize new products on a timely basis; the competition we
face in the pharmaceutical industry from brand and generic drug
product companies, and the impact of that competition on our
ability to set prices; our ability to obtain exclusive marketing
rights for our products; our ability to manage our growth through
acquisitions and otherwise; our revenues are derived from the sales
of a limited number of products, a substantial portion of which are
through a limited number of customers; the 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; our ability to complete the
proposed holding company reorganization on the anticipated timeline
or at all and to realize the expected benefits of such
reorganization; 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 ability to secure satisfactory terms when
negotiating a refinancing or other new indebtedness; our dependence
on third-party agreements for a portion of our product offerings;
legal, regulatory and legislative efforts by our brand competitors
to deter competition from our generic alternatives; 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
product approval requirements; the impact of healthcare reform and
changes in coverage and reimbursement levels by governmental
authorities and other third-party payers; our potential expansion
into additional international markets subjecting us to increased
regulatory, economic, social and political uncertainties, including
recent events affecting the financial services industry; our
ability to identify, make and integrate acquisitions or investments
in complementary businesses and products on advantageous terms; the
impact of global economic, political or other catastrophic events;
our ability to attract, hire and retain highly skilled personnel;
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
This release includes certain non-GAAP financial measures,
including EBITDA, adjusted EBITDA, and adjusted diluted EPS, which
are intended as supplemental measures of the Company’s performance
that are not required by or presented in accordance with GAAP.
Adjusted diluted EPS reflects diluted earnings per share based on
adjusted net income, which is net income (loss) adjusted to (A)
exclude (i) non-cash interest, (ii) GAAP (benefit from) provision
for income taxes, (iii) amortization, (iv) stock-based
compensation, (v) acquisition, site closure expenses, and idle
facility expenses, (vi) restructuring and other charges, (vii) loss
on refinancing, (viii) charges related to legal matters, including
interest, net, (ix) asset impairment charges, (x) regulatory
approval milestone, (xi) change in fair value of contingent
consideration, (xii) insurance recoveries for property losses and
associated expenses (xiii) increase in tax receivable agreement
liability, (xiv) system implementation expense, (xv) other and
(xvi) net income attributable to non-controlling interests not
associated with class B common stock, and (B) include non-GAAP
provision for income taxes. Non-GAAP adjusted EPS is calculated
assuming the weighted average diluted shares outstanding of class A
and class B 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 any measure determined in accordance with
GAAP. Readers should review the reconciliations included below, and
should not rely on any single financial measure to evaluate the
Company’s business.
A reconciliation of each historical non-GAAP measure to the most
directly comparable GAAP measure is set forth below.
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Operations
(unaudited; $ in thousands,
except per share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net revenue
$
620,040
$
545,557
$
1,776,626
$
1,602,545
Cost of goods sold
387,509
351,327
1,145,888
1,033,225
Gross profit
232,531
194,230
630,738
569,320
Selling, general and administrative
113,006
100,071
320,672
297,542
Research and development
41,375
50,235
117,864
153,781
Intellectual property legal development
expenses
886
1,411
3,350
2,996
Acquisition, transaction-related and
integration expenses
—
39
—
714
Restructuring and other charges
1,043
581
1,635
1,312
Change in fair value of contingent
consideration
3,120
(1,425
)
(787
)
(1,495
)
Insurance recoveries for property losses
and associated expenses
—
—
—
(1,911
)
(Credit) charges related to legal matters,
net
(2,620
)
285
(1,039
)
249,836
Other operating expense (income)
73
(1,320
)
(1,138
)
(2,495
)
Operating income (loss)
75,648
44,353
190,181
(130,960
)
Other (expense) income:
Interest expense, net
(50,909
)
(42,391
)
(151,081
)
(111,349
)
Foreign exchange loss, net
(2,939
)
(5,491
)
(617
)
(12,933
)
Other income, net
1,157
5,709
4,708
14,770
Total other expense, net
(52,691
)
(42,173
)
(146,990
)
(109,512
)
Income (loss) before income taxes
22,957
2,180
43,191
(240,472
)
(Benefit from) provision for income
taxes
(2,076
)
4,570
(1,431
)
8,459
Net income (loss)
25,033
(2,390
)
44,622
(248,931
)
Less: Net (income) loss attributable to
non-controlling interests
(15,351
)
(299
)
(29,966
)
123,716
Net income (loss) attributable to
Amneal Pharmaceuticals, Inc. before accretion of redeemable
non-controlling interest
9,682
(2,689
)
14,656
(125,215
)
Accretion of redeemable non-controlling
interest
—
—
—
(438
)
Net income (loss) attributable to
Amneal Pharmaceuticals, Inc.
$
9,682
$
(2,689
)
$
14,656
$
(125,653
)
Net income (loss) per share
attributable to Amneal Pharmaceuticals, Inc.'s class A common
stockholders:
Basic
$
0.06
$
(0.02
)
$
0.10
$
(0.83
)
Diluted
$
0.06
$
(0.02
)
$
0.09
$
(0.83
)
Weighted-average common shares
outstanding:
Basic
154,219
151,393
153,363
150,765
Diluted
159,691
151,393
156,284
150,765
Amneal Pharmaceuticals,
Inc.
Condensed Consolidated Balance
Sheets
(unaudited; $ in
thousands)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
86,929
$
25,976
Restricted cash
8,678
9,251
Trade accounts receivable, net
690,947
741,791
Inventories
576,474
530,735
Prepaid expenses and other current
assets
91,444
103,565
Related party receivables
1,603
500
Total current assets
1,456,075
1,411,818
Property, plant and equipment, net
451,852
469,815
Goodwill
598,631
598,853
Intangible assets, net
982,531
1,096,093
Operating lease right-of-use assets
32,523
38,211
Operating lease right-of-use assets -
related party
15,876
17,910
Financing lease right-of-use assets
60,548
63,424
Other assets
89,043
103,217
Total assets
$
3,687,079
$
3,799,341
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
557,761
$
538,199
Current portion of liabilities for legal
matters
76,828
107,483
Revolving credit facilities
76,000
60,000
Current portion of long-term debt, net
30,533
29,961
Current portion of operating lease
liabilities
9,826
8,321
Current portion of operating lease
liabilities - related party
3,055
2,869
Current portion of financing lease
liabilities
3,098
3,488
Related party payables - short term
3,500
2,479
Total current liabilities
760,601
752,800
Long-term debt, net
2,541,814
2,591,981
Note payable - related party
41,001
39,706
Operating lease liabilities
26,412
32,126
Operating lease liabilities - related
party
13,598
15,914
Financing lease liabilities
59,351
60,769
Related party payables - long term
11,534
9,649
Other long-term liabilities
41,388
87,468
Total long-term liabilities
2,735,098
2,837,613
Redeemable non-controlling interests
37,144
24,949
Total stockholders' equity
154,236
183,979
Total liabilities and stockholders'
equity
$
3,687,079
$
3,799,341
Amneal Pharmaceuticals,
Inc.
Consolidated Statements of
Cash Flows
(unaudited; $ in
thousands)
Nine Months Ended September
30,
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
44,622
$
(248,931
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
172,467
179,119
Unrealized foreign currency loss
1,563
12,893
Amortization of debt issuance costs and
discount
6,884
6,489
Loss on refinancing - revolving credit
facility
—
291
Intangible asset impairment charges
2,036
5,786
Change in fair value of contingent
consideration
(787
)
(1,495
)
Stock-based compensation
20,848
24,016
Inventory provision
56,637
28,884
Insurance recoveries for property and
equipment losses
—
(1,000
)
Other operating charges and credits,
net
6,370
7,077
Changes in assets and liabilities:
Trade accounts receivable, net
49,055
33,570
Inventories
(103,092
)
(91,326
)
Prepaid expenses, other current assets and
other assets
24,810
(34,380
)
Related party receivables
(1,131
)
(517
)
Accounts payable, accrued expenses and
other liabilities
(74,685
)
165,437
Related party payables
4,157
2,479
Net cash provided by operating
activities
209,754
88,392
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(33,351
)
(34,941
)
Saol Acquisition
—
(84,714
)
Acquisition of intangible assets
(2,488
)
(41,800
)
Deposits for future acquisition of
property, plant and equipment
(1,658
)
(2,388
)
Proceeds from insurance recoveries for
property and equipment losses
—
1,000
Net cash used in investing activities
(37,497
)
(162,843
)
Cash flows from financing
activities:
Payments of deferred financing and
refinancing costs
(542
)
(1,663
)
Payments of principal on debt, revolving
credit facilities, financing leases and other
(151,510
)
(105,618
)
Borrowings on revolving credit
facilities
110,000
85,000
Proceeds from exercise of stock
options
408
662
Employee payroll tax withholding on
restricted stock unit vesting
(2,222
)
(3,483
)
Payments of deferred consideration for
acquisitions - related party
—
(44,498
)
Acquisition of redeemable non-controlling
interest
—
(1,722
)
Tax distributions to non-controlling
interests
(67,875
)
(13,131
)
Net cash used in financing activities
(111,741
)
(84,453
)
Effect of foreign exchange rate on
cash
(136
)
(1,944
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
60,380
(160,848
)
Cash, cash equivalents, and restricted
cash - beginning of period
35,227
256,739
Cash, cash equivalents, and restricted
cash - end of period
$
95,607
$
95,891
Cash and cash equivalents - end of
period
$
86,929
$
87,335
Restricted cash - end of period
8,678
8,556
Cash, cash equivalents, and restricted
cash - end of period
$
95,607
$
95,891
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(unaudited, $ in
thousands)
Reconciliation of Net Income
(Loss) to EBITDA and Adjusted EBITDA
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net income (loss)
$
25,033
$
(2,390
)
$
44,622
$
(248,931
)
Adjusted to add:
Interest expense, net
50,909
42,391
151,081
111,349
(Benefit from) provision for income
taxes
(2,076
)
4,570
(1,431
)
8,459
Depreciation and amortization
57,206
61,608
172,467
179,119
EBITDA (Non-GAAP)
$
131,072
$
106,179
$
366,739
$
49,996
Adjusted to add (deduct):
Stock-based compensation expense
6,691
7,689
20,848
24,016
Acquisition, site closure, and idle
facility expenses (1)
1,551
3,468
5,831
12,230
Restructuring and other charges
1,043
538
1,536
1,269
Loss on refinancing
—
—
—
291
Charges related to legal matters, net
(2)
2,880
285
8,961
249,836
Asset impairment charges
808
3,108
2,879
8,358
Foreign exchange loss
2,939
5,491
617
12,933
Change in fair value of contingent
consideration
3,120
(1,425
)
(787
)
(1,495
)
Insurance recoveries for property losses
and
associated expenses
—
—
—
(1,911
)
Regulatory approval milestone
—
—
—
5,000
Increase in tax receivable agreement
liability
676
—
1,907
—
System implementation expense (3)
2,016
769
4,429
2,091
Other
1,002
(469
)
3,106
(2,536
)
Adjusted EBITDA (Non-GAAP)
$
153,798
$
125,633
$
416,066
$
360,078
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(unaudited; in thousands,
except per share amounts)
Reconciliation of Net Income
(Loss) to Adjusted Net Income and Calculation of Adjusted Diluted
Earnings Per Share
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net income (loss)
$
25,033
$
(2,390
)
$
44,622
$
(248,931
)
Adjusted to add (deduct):
Non-cash interest
2,048
1,882
6,001
5,830
GAAP (benefit from) provision for income
taxes
(2,076
)
4,570
(1,431
)
8,459
Amortization
39,091
42,778
118,011
122,146
Stock-based compensation expense
6,691
7,689
20,848
24,016
Acquisition, site closure expenses, and
idle facility
expenses (1)
1,551
3,468
5,831
12,230
Restructuring and other charges
1,043
538
1,536
1,269
Loss on refinancing
—
—
—
291
Charges related to legal matters,
including
interest, net (2)
3,597
1,758
11,204
251,662
Asset impairment charges
808
3,108
2,872
8,358
Regulatory approval milestone
—
—
—
5,000
Change in fair value of contingent
consideration
3,120
(1,425
)
(787
)
(1,495
)
Insurance recoveries for property losses
and
associated expenses
—
—
—
(1,911
)
Increase in tax receivable agreement
liability
676
—
1,907
—
System implementation expense (3)
2,016
769
4,429
2,091
Other
1,189
(469
)
3,440
(2,394
)
Provision for income taxes (4)
(15,127
)
(13,494
)
(42,451
)
(41,153
)
Net income attributable to non-controlling
interests
not associated with our class B common
stock
(9,355
)
(5,075
)
(22,042
)
(9,163
)
Adjusted net income (Non-GAAP)
$
60,305
$
43,707
$
153,990
$
136,305
Weighted average diluted shares
outstanding (Non-GAAP) (5)
311,808
304,319
308,402
304,415
Adjusted diluted earnings per share
(Non-GAAP)
$
0.19
$
0.14
$
0.50
$
0.45
Amneal Pharmaceuticals,
Inc.
Non-GAAP
Reconciliations
(unaudited)
Explanations for
Reconciliations of Net Income (Loss) to EBITDA and Adjusted EBITDA
and Net Income (Loss) to Adjusted Net Income and Calculation of
Adjusted Diluted Earnings per Share
(1)
Acquisition, site closure, and idle
facility expenses for the three and nine months ended September 30,
2023 primarily included 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
months ended September 30, 2022 primarily included integration
costs associated with the acquisition of the baclofen franchise
from certain entities affiliated with Saol International Limited
(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 nine months ended September 30, 2022 primarily included (i)
transaction and integration costs associated with the Saol
Acquisition; (ii) integration costs associated with the acquisition
of Puniska Healthcare Pvt. Ltd.; and (iii) site closure costs
associated with the planned cessation of manufacturing at our
Hauppauge, NY facility.
(2)
For the three months ended September 30,
2023, charges related to legal matters, net were primarily
comprised of a charge for the settlement of a customer claim. For
the nine months ended September 30, 2023, charges related to legal
matters, net were primarily comprised of (i) charges for civil
prescription opioid litigation; (ii) settlement of a customer
claim; and (iii) settlement of a stockholder derivative lawsuit.
For the three months ended September 30, 2022, charges related to
legal matters, net were immaterial. For the nine months ended
September 30, 2022, charges related to legal matters, net, were
comprised of a charge for Opana ER® antitrust litigation, net of
insurance recoveries associated with a securities class action
settled during 2022.
(3)
System implementation expense for the
three months ended September 30, 2023 and 2022 was primarily for
the implementation of indirect procurement software to further
integrate our acquired businesses. System implementation expense
for the nine months ended September 30, 2023 and 2022 was primarily
for the implementation of (i) indirect procurement software; (ii)
sales deduction software; and (iii) financial statement
consolidation software to further integrate our acquired
businesses.
(4)
The non-GAAP effective tax rates for the
three and nine months ended September 30, 2023 were 20.1% and
21.6%, respectively. The non-GAAP effective tax rates for the three
and nine months ended September 30, 2022 were 23.6% and 23.2%,
respectively.
(5)
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 September
30, 2023
Three Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
390,857
$
—
$
390,857
$
350,266
$
—
$
350,266
Cost of goods sold (2)
236,268
(13,437
)
222,831
218,671
(19,041
)
199,630
Gross profit
154,589
13,437
168,026
131,595
19,041
150,636
Gross margin %
39.6
%
43.0
%
37.6
%
43.0
%
Selling, general and administrative
(3)
33,538
(1,686
)
31,852
30,259
(1,191
)
29,068
Research and development (4)
35,103
(633
)
34,470
41,987
(1,142
)
40,845
Intellectual property legal development
expenses
815
—
815
1,369
—
1,369
Acquisition, transaction-related and
integration expenses
—
—
—
16
(16
)
—
Restructuring and other charges
112
(112
)
—
507
(507
)
—
(Credit) charges related to legal matters,
net
(2,500
)
(3,000
)
(5,500
)
285
(285
)
—
Other operating loss (income)
73
—
73
(1,320
)
—
(1,320
)
Operating income
$
87,448
$
18,868
$
106,316
$
58,492
$
22,182
$
80,674
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense ($0.9 million and $0.8 million),
amortization expense ($10.5 million and $12.3 million), site
closure and idle facility expenses ($1.1 million and $2.8 million),
and asset impairment charges ($0.9 million and $3.1 million).
(3)
Adjustments for the three months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense ($1.3 million and $0.6 million)
and site closure costs ($0.4 million and $0.6 million).
(4)
Adjustments for the three months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense.
Amneal Pharmaceuticals,
Inc.
Generics Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(unaudited; $ in
thousands)
Nine Months Ended September
30, 2023
Nine Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
1,108,364
$
—
$
1,108,364
$
1,032,908
$
—
$
1,032,908
Cost of goods sold (2)
692,008
(42,283
)
649,725
646,236
(53,205
)
593,031
Gross profit
416,356
42,283
458,639
386,672
53,205
439,877
Gross margin %
37.6
%
41.4
%
37.4
%
42.6
%
Selling, general and administrative
(3)
89,178
(5,562
)
83,616
84,410
(8,641
)
75,769
Research and development (4)
98,570
(1,901
)
96,669
129,382
(3,707
)
125,675
Intellectual property legal development
expenses
3,240
—
3,240
2,919
—
2,919
Acquisition, transaction-related and
integration expenses
—
—
—
24
(24
)
—
Restructuring and other charges
211
(112
)
99
713
(713
)
—
Insurance recoveries for property losses
and associated expenses
—
—
—
(1,911
)
1,911
—
(Credit) charges related to legal matters,
net
(2,927
)
(7,073
)
(10,000
)
2,442
(2,442
)
—
Other operating income
(1,138
)
—
(1,138
)
(2,495
)
—
(2,495
)
Operating income
$
229,222
$
56,931
$
286,153
$
171,188
$
66,821
$
238,009
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the nine months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense ($2.9 million and $3.6 million),
amortization expense ($32.1 million and $31.8 million), site
closure and idle facility expenses ($4.2 million and $9.8 million),
asset impairment charges ($2.9 million and $8.3 million), and other
($0.2 million and $(0.3) million).
(3)
Adjustments for the nine months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense ($4.0 million and $1.9 million), a
regulatory approval milestone (none and $5.0 million), and site
closure costs ($1.6 million and $1.7 million).
(4)
Adjustments for the nine months ended
September 30, 2023 and 2022, respectively, were comprised of
stock-based compensation expense.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(unaudited; $ in
thousands)
Three Months Ended September
30, 2023
Three Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
97,304
$
—
$
97,304
$
89,484
$
—
$
89,484
Cost of goods sold (1)
45,551
(25,844
)
19,707
43,719
(27,328
)
16,391
Gross profit
51,753
25,844
77,597
45,765
27,328
73,093
Gross margin %
53.2
%
79.7
%
51.1
%
81.7
%
Selling, general and administrative
(2)
22,756
(235
)
22,521
22,201
(380
)
21,821
Research and development (2)
6,272
(458
)
5,814
8,248
(370
)
7,878
Intellectual property legal development
expenses
71
—
71
42
—
42
Acquisition, transaction-related and
integration expenses
—
—
—
15
(15
)
—
Restructuring and other charges
931
(931
)
—
—
—
—
Change in fair value of contingent
consideration (3)
3,120
(3,120
)
—
(1,425
)
1,425
—
Operating income
$
18,603
$
30,588
$
49,191
$
16,684
$
26,668
$
43,352
(1)
Adjustments for the three months ended
September 30, 2023 and 2022 were comprised of amortization
expense.
(2)
Adjustments for the three months ended
September 30, 2023 and 2022 were comprised of stock-based
compensation expense.
(3)
Change in fair value of contingent
consideration for the three months ended September 30, 2023 and
2022 was associated with the Saol Acquisition and the acquisition
of Kashiv Specialty Pharmaceuticals, LLC.
Amneal Pharmaceuticals,
Inc.
Specialty Segment
Reconciliation of GAAP to
Non-GAAP Operating Results
(unaudited; $ in
thousands)
Nine Months Ended September
30, 2023
Nine Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
285,976
$
—
$
285,976
$
271,571
$
—
$
271,571
Cost of goods sold (1)
135,254
(77,871
)
57,383
130,363
(80,860
)
49,503
Gross profit
150,722
77,871
228,593
141,208
80,860
222,068
Gross margin %
52.7
%
79.9
%
52.0
%
81.8
%
Selling, general and administrative
(2)
67,894
(649
)
67,245
69,772
(794
)
68,978
Research and development (2)
19,294
(1,334
)
17,960
24,399
(1,099
)
23,300
Intellectual property legal development
expenses
110
—
110
77
—
77
Acquisition, transaction-related and
integration expenses
—
—
—
47
(47
)
—
Restructuring and other charges
1,013
(1,013
)
—
—
—
—
Change in fair value of contingent
consideration (3)
(787
)
787
—
(1,495
)
1,495
—
Operating income
$
63,198
$
80,080
$
143,278
$
48,408
$
81,305
$
129,713
(1)
Adjustments for the nine months ended
September 30, 2023 and 2022 were comprised of amortization
expense.
(2)
Adjustments for the nine months ended
September 30, 2023 and 2022 were comprised of stock-based
compensation expense.
(3)
Change in fair value of contingent
consideration for the nine months ended September 30, 2023 and 2022
was associated with the Saol Acquisition and 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 September
30, 2023
Three Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
131,879
$
—
$
131,879
$
105,807
$
—
$
105,807
Cost of goods sold
105,690
—
105,690
88,937
—
88,937
Gross profit
26,189
—
26,189
16,870
—
16,870
Gross margin %
19.9
%
19.9
%
15.9
%
15.9
%
Selling, general and administrative
(2)
14,313
(3,657
)
10,656
13,216
(4,933
)
8,283
Operating income
$
11,876
$
3,657
$
15,533
$
3,654
$
4,933
$
8,587
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended
September 30, 2023 and 2022 were comprised of amortization expense
($4.2 million and $4.9 million), and other (($0.5) million and
none).
Amneal Pharmaceuticals,
Inc.
AvKARE Segment
Reconciliation of GAAP to
Non-GAAP Operating Results (1)
(unaudited; $ in
thousands)
Nine Months Ended September
30, 2023
Nine Months Ended September
30, 2022
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
382,286
$
—
$
382,286
$
298,066
$
—
$
298,066
Cost of goods sold
318,626
—
318,626
256,626
—
256,626
Gross profit
63,660
—
63,660
41,440
—
41,440
Gross margin %
16.7
%
16.7
%
13.9
%
13.9
%
Selling, general and administrative
(2)
41,268
(11,609
)
29,659
39,361
(14,392
)
24,969
Operating income
$
22,392
$
11,609
$
34,001
$
2,079
$
14,392
$
16,471
(1)
Operating results for the sale of Amneal
products by AvKARE were included in our Generics segment.
(2)
Adjustments for the nine months ended
September 30, 2023 and 2022, respectively, were comprised of
amortization expense ($12.6 million and $14.8 million), and other
(($1.0) million and ($0.4) million).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107394892/en/
Anthony DiMeo Head of Investor Relations
anthony.dimeo@amneal.com
Amneal Pharmaceuticals (NYSE:AMRX)
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