On August 27, 2019 Lannett Company, Inc. (NYSE: LCI) reported financial results for its fiscal 2019 fourth quarter and full year ended June 30, 2019 (Press release, Lannett, AUG 27, 2019, View Source [SID1234539028]).
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"In fiscal 2019, we made excellent progress rebuilding our business," said Tim Crew, chief executive officer of Lannett. "We feel positive about our company’s future following a number of significant accomplishments. Since January 2018, we have launched 25 products with annualized sales of approximately $100 million, acquired or in-licensed more than 40 ANDAs and paid down approximately $187 million of our outstanding debt, which included $87 million of voluntary payments. In the past year, we have expanded existing strategic alliances and established new ones, and submitted to the FDA nine product applications, all while we implemented and recently completed a net $33 million cost savings plan.
"Financial results for our fiscal 2019 fourth quarter, the first full quarter of the fiscal year without sales of Levothyroxine, exceeded or were at the upper end of our expectations. The quarter did benefit from a few items that were related to timing.
"Looking ahead, we expect to launch a number of new products that will continue to build our business in the near term and have begun adding products to our pipeline that have significant potential in the medium term and beyond."
For the fiscal 2019 fourth quarter, on a GAAP basis, net sales were $133.8 million compared with $170.9 million for the fourth quarter of fiscal 2018. Gross profit was $49.3 million, or 37% of total net sales, compared with $66.5 million, or 39% of total net sales. Research and development (R&D) expenses were $9.4 million compared with $8.3 million for the fiscal 2018 fourth quarter. Selling, general and administrative (SG&A) expenses were $22.2 million compared with $20.6 million. Restructuring expenses were $2.4 million compared with $4.1 million. Asset impairment charges were $5.9 million compared with $25.0 million for the prior year fourth quarter. Operating income increased to $9.4 million from $8.6 million. Interest expense decreased to $20.2 million from $21.2 million for the fourth quarter of fiscal 2018. Net loss was $7.6 million, or $0.20 per share, compared with $11.4 million, or $0.30 per share, for the fiscal 2018 fourth quarter.
For the fiscal 2019 fourth quarter reported on a Non-GAAP basis, net sales were $133.8 million compared with $170.9 million for the fourth quarter of fiscal 2018. Adjusted gross profit was $59.8 million, or 45% of adjusted net sales, compared with $76.0 million, or 44% of adjusted net sales, for the prior-year fourth quarter. Adjusted R&D expenses were $8.6 million compared with $8.3 million. Adjusted SG&A expenses were $17.0 million compared with $17.4 million. Adjusted operating income was $34.1 million compared with $50.3 million for the prior-year fourth quarter. Adjusted interest expense was $16.0 million compared with $16.6 million for the fourth quarter of fiscal 2018. Adjusted net income was $14.7 million, or $0.37 per diluted share, compared with $24.5 million, or $0.64 per diluted share, for the fiscal 2018 fourth quarter.
For the fiscal 2019 full year, on a GAAP basis, net sales were $655.4 million compared with $684.6 million for the fiscal 2018 full year. Gross profit was $243.6 million, or 37% of total net sales, compared with $288.7 million, or 42% of total net sales. R&D expenses were $38.8 million compared with $29.2 million for the fiscal 2018 full year. SG&A expenses were $87.6 million compared with $82.2 million. Restructuring expenses were $4.1 million compared with $7.1 million. The company reported operating loss of $262.3 million, which included asset impairment charges of $375.4 million. This compares to fiscal 2018 full year operating income of $129.7 million, which included asset impairment charges of $25.0 million and a loss on sale of intangible asset of $15.5 million. Interest expense decreased to $84.6 million from $85.6 million. Net loss was $272.1 million, or $7.20 per share, versus net income of $28.7 million, or $0.75 per diluted share, for fiscal 2018.
For the fiscal 2019 full year reported on a Non-GAAP basis, net sales were $655.4 million compared with $684.6 million for the fiscal 2018 full year. Adjusted gross profit was $291.4 million, or 44% of adjusted net sales, compared with $326.2 million, or 48% of adjusted net sales, for the prior year. Adjusted R&D expenses were $36.1 million compared with $29.2 million. Adjusted SG&A expenses were $71.2 million compared with $71.0 million. Adjusted operating income was $184.1 million compared with $226.0 million for the prior year. Adjusted interest expense was $67.0 million compared with $65.4 million for fiscal 2018. Adjusted net income was $91.8 million, or $2.35 per diluted share, compared with $118.2 million, or $3.10 per diluted share, for the fiscal 2018 full year.