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Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2021

Autor: Accesswire
09.08.2021, 22:05  |  130   |   |   

Reports Net Revenues of $101.7 Million for the Three Months Ended June 30, 2021RANCHO CUCAMONGA, CA / ACCESSWIRE / August 9, 2021 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three …

Reports Net Revenues of $101.7 Million for the Three Months Ended June 30, 2021

RANCHO CUCAMONGA, CA / ACCESSWIRE / August 9, 2021 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months ended June 30, 2021.

Second Quarter Highlights

  • Net revenues of $101.7 million for the second quarter
  • GAAP net income of $7.8 million, or $0.16 per share, for the second quarter
  • Adjusted non-GAAP net income of $10.6 million, or $0.21 per share, for the second quarter

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "Continued strong sales of glucagon, Primatene Mist® and our epinephrine products led to another strong quarter of growth. We believe that these products will continue to drive growth as we continue to develop and realize approvals from our pipeline."

 
  Three Months Ended     Six Months Ended  
 
  June 30,     June 30,  
 
  2021     2020     2021     2020  
 
  (in thousands, except per share data)  
Net revenues
  $ 101,663     $ 85,806     $ 204,683     $ 170,494  
GAAP net income (loss) attributable to Amphastar
  $ 7,767     $ (192 )   $ 12,808     $ 3,757  
Adjusted non-GAAP net income attributable to Amphastar*
  $ 10,615     $ 7,610     $ 24,168     $ 15,993  
GAAP diluted EPS attributable to Amphastar stockholders
  $ 0.16     $ (0.00 )   $ 0.26     $ 0.08  
Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders*
  $ 0.21     $ 0.16     $ 0.49     $ 0.33  

* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders are non-GAAP financial measures. Please see the discussion in the section entitled "Non-GAAP Financial Measures" and the reconciliation of GAAP to non-GAAP financial measures in Table III of this press release.

Second Quarter Results

    Three Months Ended 
June 30,
    Change  
    2021     2020     Dollars     %  
    (in thousands)        
Net revenues:
                       
Primatene Mist®
  $ 16,680     $ 12,468     $ 4,212       34 %
Glucagon
    12,131       -       12,131       N/A  
Lidocaine
    11,594       7,608       3,986       52 %
Phytonadione
    10,421       10,689       (268 )     (3 )%
Enoxaparin
    9,328       10,218       (890 )     (9 )%
Epinephrine
    9,192       6,957       2,235       32 %
Naloxone
    6,625       8,723       (2,098 )     (24 )%
Other finished pharmaceutical products
    18,751       24,272       (5,521 )     (23 )%
Total finished pharmaceutical products net revenues
  $ 94,722     $ 80,935     $ 13,787       17 %
API
    6,941       4,871       2,070       42 %
Total net revenues
  $ 101,663     $ 85,806     $ 15,857       18 %

Changes in net revenues were primarily driven by:

  • Primatene Mist ® increased volumes resulting from:
    • The continued success of our nationwide television, radio, and digital marketing campaign
    • An increase in our distribution channels throughout 2020 and 2021
  • Glucagon for injection emergency kit which was launched in the first quarter of 2021
  • Lidocaine and epinephrine sales increased due to higher demand as a result of a market shortage
  • Naloxone sales decreased due to lower average selling price resulting from increased competition
  • Other finished pharmaceutical product sales decreased due to lower demand, largely due to competitors returning to their normal distribution levels
    Three Months Ended June 30,     Change  
    2021     2020     Dollars     %  
    (in thousands)        
Net revenues
  $ 101,663     $ 85,806     $ 15,857       18 %
Cost of revenues
    54,287       52,629       1,658       3 %
Gross profit
  $ 47,376     $ 33,177     $ 14,199       43 %
as % of net revenues
    47 %     39 %                
                                 

Changes in the cost of revenues and the resulting increase in gross margin were primarily driven by:

  • Increased sales of higher margin products such as Primatene Mist ® , epinephrine injection multi-dose vials, and glucagon
  • Partially offset by increased cost for heparin, which is used as the starting material for enoxaparin
    Three Months Ended              
    June 30,     Change  
    2021     2020     Dollars     %  
    (in thousands)        
Selling, distribution, and marketing
  $ 4,129     $ 4,026     $ 103       3 %
General and administrative
    14,565       15,924       (1,359 )     (9 )%
Research and development
    18,122       16,149       1,973       12 %
Non-operating income, net
    3,657       1,418       2,239       158 %
  • Selling, distribution, and marketing expenses increased due to the marketing and distribution expenses for Primatene Mist ®
  • General and administrative expenses decreased primarily due to cash compensation and share-based compensation expense relating to the separation agreement that we entered into with a former executive during the second quarter of 2020, which was partially offset by an increase in legal expenses in the second quarter of 2021
  • Research and development expenses increased due to an increase in salaries and personnel-related expenses as well as an increase in depreciation expense
  • Non-operating income, net, increased as a result of a reduction in the accrual for the settlement of the Aventis litigation during the quarter by $2.7 million based on the settlement agreement with Aventis during the quarter

Cash flow provided by operating activities for the six months ended June 30, 2021, was $55.0 million.

Share Buyback Program

On August 3, 2021, the Company's Board of Directors authorized an increase of $20 million to the Company's share buyback program, which is expected to continue for an indefinite period of time. The primary goal of the program is to offset dilution created by the Company's equity compensation programs.

Purchases may be made through the open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions, or other means, as determined by the Company's management and in accordance with the requirements of the Securities and Exchange Commission and applicable laws.

The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions.

Debt Refinancing

On August 4, 2021, the Company refinanced $30 million of outstanding debt by entering into a $140 million credit facility consisting of a $70 million term loan and a $70 million revolving line of credit.

Bill Peters, Chief Financial Officer, commented, "Entering into this credit agreement allows us to lower our interest expense while enabling financial flexibility for future growth needs."

Capital One and East West Bank were the joint lead arrangers for this syndicated debt offering, and Wells Fargo Bank, Cathay Bank, and Fifth Third Bank participated as lenders.

Pipeline Information

The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.5 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and seven generic products in development targeting products with a market size of approximately $10 billion. This market information is based on IQVIA data for the 12 months ended June 30, 2021. The Company is currently developing multiple proprietary products with injectable and intranasal dosage forms.

Amphastar's Chinese subsidiary, ANP, currently has 17 Drug Master Files, or DMFs, on file with the FDA and is developing several additional DMFs.

Company Information

Amphastar is a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically-challenging generic and proprietary injectable, inhalation, and intranasal products. Additionally, the Company sells insulin API products. Most of the Company's finished products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. More information and resources are available at www.amphastar.com .

Amphastar's logo and other trademarks or service marks of Amphastar, including, but not limited to Amphastar ® , Primatene Mist ® , Amphadase ® , and Cortrosyn ® , are the property of Amphastar.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company is disclosing non-GAAP financial measures when providing financial results. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with GAAP. As a result, the Company is disclosing certain non-GAAP results, including (i) Adjusted non-GAAP net income (loss) attributed to Amphastar and (ii) Adjusted non-GAAP diluted EPS attributed to Amphastar's stockholders, which exclude amortization expense, share-based compensation, impairment charges, executive severance expense, and legal settlements, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance because the Company's management uses these measures internally for forecasting, budgeting, and measuring its operating performance. Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Conference Call Information

The Company will hold a conference call to discuss its financial results today, August 9, 2021, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free (877) 407-0989 or (201) 389-0921 for international callers, five minutes before the conference.

The call can also be accessed on the Investors page on the Company's website at www.amphastar.com .

Forward-Looking Statements

All statements in this press release and in the conference call referenced above that are not historical are forward-looking statements, including, among other things, statements relating to our expectations regarding future financial performance, backlog, sales and marketing of our products, market size and growth, product development, the timing of FDA filings or approvals, including the DMFs of ANP, the timing of product launches, acquisitions and other matters related to our pipeline of product candidates, our share buyback program and other future events, such as the impact of the COVID-19 pandemic including its variants and related responses of business and governments to the pandemic on our operations and personnel, and on commercial activity and demand across our business operations and results of operations. These statements are not facts but rather are based on Amphastar's historical performance and our current expectations, estimates, and projections regarding our business, operations, and other similar or related factors. Words such as "may," "might," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expect," "intend," "plan," "project," "believe," "estimate," and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Amphastar's control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Amphastar's filings with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 15, 2021. In particular, the extent of COVID-19's impact on our business will depend on several factors, including the severity, duration and extent of the pandemic including its variants, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. You can locate these reports through our website at http://ir.amphastar.com and on the SEC's website at www.sec.gov. The forward-looking statements in this release speak only as of the date of the release. Amphastar undertakes no obligation to revise or update information or any forward-looking statements in this press release or the conference call referenced above to reflect events or circumstances in the future, even if new information becomes available or if subsequent events cause our expectations to change.

Contact Information:

Amphastar Pharmaceuticals, Inc.
Bill Peters
Chief Financial Officer
(909) 980-9484
 

Table I 
Amphastar Pharmaceuticals, Inc. 
Condensed Consolidated Statement of Operations 
(Unaudited; in thousands, except per share data)

    Three Months Ended 
June 30,
    Six Months Ended 
June 30,
 
    2021     2020     2021     2020  
                         
Net revenues
  $ 101,663     $ 85,806     $ 204,683     $ 170,494  
Cost of revenues
    54,287       52,629       112,361       100,494  
Gross profit
    47,376       33,177       92,322       70,000  
                                 
Operating expenses:
                               
Selling, distribution, and marketing
    4,129       4,026       8,666       7,320  
General and administrative
    14,565       15,924       29,903       26,670  
Research and development
    18,122       16,149       32,887       31,452  
Total operating expenses
    36,816       36,099       71,456       65,442  
                                 
Income (loss) from operations
    10,560       (2,922 )     20,866       4,558  
                                 
Non-operating income (expense), net
    3,657       1,418       (1,535 )     (257 )
                                 
Income (loss) before income taxes
    14,217       (1,504 )     19,331       4,301  
Income tax provision (benefit)
    5,595       (75 )     6,750       2,205  
                                 
Net income (loss)
  $ 8,622     $ (1,429 )   $ 12,581     $ 2,096  
                                 
Net income (loss) attributable to non-controlling interests
  $ 855     $ (1,237 )   $ (227 )   $ (1,661 )
                                 
Net income (loss) attributable to Amphastar
  $ 7,767     $ (192 )   $ 12,808     $ 3,757  
                                 
Net income (loss) per share attributable to Amphastar stockholders:
                               
Basic
  $ 0.16     $ (0.00 )   $ 0.27     $ 0.08  
Diluted
  $ 0.16     $ (0.00 )   $ 0.26     $ 0.08  
                                 
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar stockholders:
                               
Basic
    47,731       46,753       47,626       46,581  
Diluted
    49,552       46,753       49,535       48,458  

Table II 
Amphastar Pharmaceuticals, Inc. 
Condensed Consolidated Balance Sheets 
(Unaudited; in thousands, except share data)

    June 30,     December 31,  
    2021     2020  
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 105,432     $ 92,642  
Restricted cash
    19,159       1,865  
Short-term investments
    11,745       12,977  
Restricted short-term investments
    2,200       2,200  
Accounts receivable, net
    67,893       66,005  
Inventories
    97,931       96,831  
Income tax refunds and deposits
    718       385  
Prepaid expenses and other assets
    5,895       6,777  
Total current assets
    310,973       279,682  
                 
Property, plant, and equipment, net
    252,590       260,055  
Finance lease right-of-use assets
    540       612  
Operating lease right-of-use assets
    27,169       20,042  
Goodwill and intangible assets, net
    40,049       40,615  
Other assets
    9,444       5,250  
Deferred tax assets
    24,980       24,980  
Total assets
  $ 665,745     $ 631,236  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 109,604     $ 95,504  
Income taxes payable
    3,631       1,077  
Current portion of long-term debt
    8,077       12,263  
Current portion of operating lease liabilities
    3,237       3,357  
Total current liabilities
    124,549       112,201  
                 
Long-term reserve for income tax liabilities
    4,709       4,709  
Long-term debt, net of current portion
    30,460       34,186  
Long-term operating lease liabilities, net of current portion
    24,555       17,464  
Deferred tax liabilities
    765       741  
Other long-term liabilities
    13,484       13,212  
Total liabilities
    198,522       182,513  
Commitments and contingencies
               
Stockholders' equity:
               
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding
    -       -  
Common stock: par value $0.0001; 300,000,000 shares authorized; 55,736,209 and 47,983,549 shares issued and outstanding as of June 30, 2021 and 54,760,922 and 47,495,439 shares issued and outstanding as of December 31, 2020, respectively
    6       5  
Additional paid-in capital
    427,301       410,061  
Retained earnings
    130,581       117,773  
Accumulated other comprehensive loss
    (4,931 )     (3,721 )
Treasury stock
    (130,964 )     (121,812 )
Total Amphastar Pharmaceuticals, Inc. stockholders' equity
    421,993       402,306  
Non-controlling interests
    45,230       46,417  
Total equity
    467,223       448,723  
Total liabilities and stockholders' equity
  $ 665,745     $ 631,236  
                 

Table III 
Amphastar Pharmaceuticals, Inc. 
Reconciliation of Non-GAAP Measures 
(Unaudited; in thousands, except per share data)

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2021     2020     2021     2020  
                         
GAAP net income (loss)
  8,622     (1,429 )   12,581     2,096  
Adjusted for:
                               
Intangible amortization
    277       251       553       509  
Share-based compensation
    6,084       4,194       10,918       9,476  
Impairment of long-lived assets
    308       16       314       30  
Expense related to executive separation agreement
    -       4,869       -       4,869  
Reserves for litigation and settlements
    (2,704 )     -       2,991       -  
Income tax (benefit) provision on pre-tax adjustments
    (306 )     (1,445 )     (2,535 )     (2,449 )
Non-GAAP net income
  12,281     6,456     24,822     14,531  
                                 
Non-GAAP net income (loss) attributable to non-controlling interests
  1,666     (1,154 )   654     (1,462 )
                                 
Non-GAAP net income attributable to Amphastar
  10,615     7,610     24,168     15,993  
                                 
Non-GAAP net income per share attributable to Amphastar stockholders:
                               
Basic
  0.22     0.16     0.51     0.34  
Diluted
  0.21     0.16     0.49     0.33  
                                 
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar stockholders:
                               
Basic
    47,731       46,753       47,626       46,581  
Diluted
    49,552       48,668       49,535       48,458  
                                 
    Three Months Ended June 30, 2021  
                                           
    Cost of revenue     Selling, distribution and marketing     General and administrative     Research and development     Non-operating income (expense), net     Income tax provision (benefit)     Non-controlling interest adjustment  
GAAP
  $ 54,287     $ 4,129     $ 14,565     $ 18,122     $ 3,657     $ 5,595     $ 855  
Intangible amortization
    (244 )     -       (33 )     -       -       -       11  
Share-based compensation
    (932 )     (147 )     (4,568 )     (437 )     -       -       791  
Impairment of long-lived assets
    (84 )     -       (2 )     (222 )     -       -       1  
Reserves for litigation and settlements
    -       -       -       -       (2,704 )     -       -  
Income tax provision (benefit) on pre-tax adjustments
    -       -       -       -       -       306       8  
Non-GAAP
  $ 53,027     $ 3,982     $ 9,962     $ 17,463     $ 953     $ 5,901     $ 1,666  
                                                         

Reconciliation of Non-GAAP Measures (continued)

 
  Three Months Ended June 30, 2020  
 
  Cost of revenue     Selling, 
distribution and marketing
    General and administrative     Research and development     Non- 
operating income (expense), net
    Income tax provision (benefit)     Non-Controlling interest adjustment  
GAAP
  $ 52,629     $ 4,026     $ 15,924     $ 16,149     $ 1,418     $ (75 )   $ (1,237 )
Intangible amortization
    (217 )     -       (34 )     -       -       -       11  
Share-based compensation
    (970 )     (123 )     (2,733 )     (368 )     -       -       86  
Impairment of long-lived assets
    (3 )     -       (13 )     -       -       -       6  
Expense related to executive separation agreement
    -       -       (4,869 )     -       -       -       -  
Income tax provision (benefit) on pre-tax adjustments
    -       -       -       -       -       1,445       (20 )
Non-GAAP
  $ 51,439     $ 3,903     $ 8,275     $ 15,781     $ 1,418     $ 1,370     $ (1,154 )
                                                         
 
  Six Months Ended June 30, 2021  
                                           
    Cost of revenue     Selling, distribution and marketing     General 
and administrative
    Research and development     Non-operating income (expense), net     Income tax provision 
(benefit)
    Non-controlling interest adjustment  
GAAP
  $ 112,361     $ 8,666     $ 29,903     $ 32,887     $ (1,535 )   $ 6,750     $ (227 )
Intangible amortization
    (486 )     -       (67 )     -       -       -       22  
Share-based compensation
    (2,078 )     (274 )     (7,536 )     (1,030 )     -       -       862  
Impairment of long-lived assets
    (84 )     -       (8 )     (222 )     -       -       3  
Reserves for litigation and settlements
    -       -       (1,295 )     -       1,696       -       -  
Income tax provision (benefit) on pre-tax adjustments
    -       -       -       -       -       2,535       (6 )
Non-GAAP
  $ 109,713     $ 8,392     $ 20,997     $ 31,635     $ 161     $ 9,285     $ 654  
                                                         
    Six Months Ended June 30, 2020  
                                           
    Cost of revenue    
Selling,
distribution and marketing
    General and administrative     Research and development     Non-operating 
income (expense), net
    Income tax provision (benefit)     Non-controlling interest adjustment  
GAAP
  $ 100,494     $ 7,320     $ 26,670     $ 31,452     $ (257 )   $ 2,205     $ (1,661 )
Intangible amortization
    (441 )     -       (68 )     -       -       -       22  
Share-based compensation
    (2,329 )     (230 )     (5,952 )     (965 )     -       -       213  
Impairment of long-lived assets
    (13 )     -       (17 )     -       -       -       7  
Expense related to executive separation agreement
    -       -       (4,869 )     -       -       -       -  
Income tax provision (benefit) on pre-tax adjustments
    -       -       -       -       -       2,449       (43 )
Non-GAAP
  $ 97,711     $ 7,090     $ 15,764     $ 30,487     $ (257 )   $ 4,654     $ (1,462 )
                                                         

SOURCE: Amphastar Pharmaceuticals, Inc.



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Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2021 Reports Net Revenues of $101.7 Million for the Three Months Ended June 30, 2021RANCHO CUCAMONGA, CA / ACCESSWIRE / August 9, 2021 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three …

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