Get Cash Back and $0 Commissions + The Power of TradeStation
Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full Year Ended December 31, 2018
Globe Newswire 12-Mar-2019 4:06 PM
Reports Net Revenues of $89.7 Million for the Three Months Ended December 31, 2018
RANCHO CUCAMONGA, Calif., March 12, 2019 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months and full year ended December 31, 2018.
Fourth Quarter Highlights
Net revenues of $89.7 million for the fourth quarter, up 48% from the quarter ended December 31, 2017
GAAP net income attributable to Amphastar of $1.9 million, or $0.04 per diluted share, for the fourth quarter
Adjusted non-GAAP net income attributable to Amphastar of $6.2 million, or $0.13 per diluted share, for the fourth quarter
Full Year Highlights
Net revenues of $294.7 million for the fiscal year, up 23% from the previous year
GAAP net loss attributable to Amphastar of $5.7 million, or $(0.12) per diluted share, for the fiscal year
Adjusted non-GAAP net income attributable to Amphastar of $10.4 million, or $0.21 per diluted share, for the fiscal year
Dr. Jack Zhang, Amphastar's CEO, commented: "The fourth quarter ended a great year for our Company. During the quarter we received approval for Primatene® Mist, which followed multiple ANDA approvals and launches throughout the year. Sales grew 48% in the quarter with Primatene® Mist's launch, and capped off sales growth of 23% for the year."
Three Months Ended
Year Ended
December 31,
December 31,
2018
2017
2018
2017
(in thousands, except per share data)
Net revenues
$
89,690
$
60,402
$
294,666
$
240,175
GAAP net income (loss) attributable to Amphastar
$
1,867
$
787
$
(5,738
)
$
3,647
Adjusted non-GAAP net income attributable to Amphastar*
$
6,231
$
4,115
$
10,399
$
17,334
GAAP diluted EPS attributable to Amphastar shareholders
$
0.04
$
0.02
$
(0.12
)
$
0.08
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*
$
0.13
$
0.08
$
0.21
$
0.36
___________________________________ * Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders 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.
Fourth Quarter Results
Three Months Ended
December 31,
Change
2018
2017
Dollars
%
(in thousands)
Net revenues:
Enoxaparin
$
19,085
$
11,347
$
7,738
68
%
Lidocaine
13,661
10,384
3,277
32
%
Phytonadione
12,942
10,703
2,239
21
%
Naloxone
7,703
8,434
(731
)
(9
)%
Medroxyprogesterone
7,448
—
7,448
N/A
Epinephrine
1,264
3,665
(2,401
)
(66
)%
Primatene® Mist
3,574
—
3,574
N/A
Other finished pharmaceutical products
17,257
11,452
5,805
51
%
Total finished pharmaceutical products net revenues
$
82,934
$
55,985
$
26,949
48
%
API
6,756
4,417
2,339
53
%
Total net revenues
$
89,690
$
60,402
$
29,288
48
%
Changes in net revenues were primarily driven by:
Enoxaparin increases due to higher average selling prices, as well as increased unit volumes
Medroxyprogesterone, which was launched in the first quarter of 2018
Primatene® Mist, which was launched in the fourth quarter of 2018
Epinephrine declines due to lower unit volumes
Three Months Ended
December 31,
Change
2018
2017
Dollars
%
(in thousands)
Net revenues
$
89,690
$
60,402
$
29,288
48
%
Cost of revenues
55,001
39,912
15,089
38
%
Gross profit
$
34,689
$
20,490
$
14,199
69
%
as % of net revenues
39
%
34
%
Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:
The launch of medroxyprogesterone acetate, isoproterenol hydrochloride and Primatene® Mist, which have higher margins
Enoxaparin sales, which had lower margins due to an increase in reserves for purchase commitments related to price increases for both crude heparin and semi-purified heparin, which are used for the production of enoxaparin
Three Months Ended
December 31,
Change
2018
2017
Dollars
%
(in thousands)
Selling, distribution and marketing
$
2,596
$
1,629
$
967
59
%
General and administrative
13,814
9,221
4,593
50
%
Research and development
16,734
11,386
5,348
47
%
Selling, distribution and marketing expenses increased due to higher freight costs and marketing expenses related to the launch of Primatene® Mist
General and administrative expenses increased primarily due to higher legal fees and expenses at the Company's subsidiary Amphastar Nanjing Pharmaceuticals, or ANP
Research and development expenses increased primarily due to material expenditures at ANP for pipeline product candidates, increased clinical trial expenses, and Food and Drug Administration, or FDA, filing fees
Year-End Results
Year Ended December 31,
Change
2018
2017
Dollars
%
(in thousands)
Net revenues:
Enoxaparin
$
53,371
$
36,593
$
16,778
46
%
Lidocaine
43,328
37,602
5,726
15
%
Phytonadione
41,897
37,946
3,951
10
%
Naloxone
37,195
42,342
(5,147
)
(12
)%
Medroxyprogesterone
24,071
—
24,071
N/A
Epinephrine
10,055
25,914
(15,859
)
(61
)%
Primatene® Mist
3,574
—
3,574
N/A
Other finished pharmaceutical products
57,568
49,742
7,826
16
%
Total finished pharmaceutical products net revenues
$
271,059
$
230,139
$
40,920
18
%
API
23,607
10,036
13,571
135
%
Total net revenues
$
294,666
$
240,175
$
54,491
23
%
Changes in net revenues were primarily driven by:
Enoxaparin increases due to higher average selling prices, as well as increased unit volumes
Medroxyprogesterone, which was launched in the first quarter of 2018
Primatene® Mist, which was launched in the fourth quarter of 2018
Lidocaine increases primarily due to increased unit volumes
Epinephrine declines due to the discontinuation of the unapproved vial product in 2017
Naloxone declines due to lower unit volumes
Year Ended December 31,
Change
2018
2017
Dollars
%
(in thousands)
Net revenues
$
294,666
$
240,175
$
54,491
23
%
Cost of revenues
187,681
149,666
38,015
25
%
Gross profit
$
106,985
$
90,509
$
16,476
18
%
as % of net revenues
36
%
38
%
Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:
The launch of medroxyprogesterone acetate, isoproterenol hydrochloride and Primatene® Mist, which have higher margins
Enoxaparin sales, which had lower margins due to an increase in reserves for purchase commitments related to price increases for both crude heparin and semi-purified heparin, which are used for the production of enoxaparin
Year Ended December 31,
Change
2018
2017
Dollars
%
(in thousands)
Selling, distribution and marketing
$
8,156
$
6,460
$
1,696
26
%
General and administrative
49,888
44,458
5,430
12
%
Research and development
57,564
43,503
14,061
32
%
Gain on sale of intangible assets
—
(2,643
)
2,643
(100
)%
Selling, distribution and marketing expenses increased primarily due to increased freight costs and marketing expenses related to the launch of Primatene® Mist
General and administrative expenses increased primarily due to higher legal fees and expenses at ANP
Research and development expenses increased primarily due to expenditures related to the expansion of our ANP facility, as well as an increase in FDA filing fees and an increase in clinical trial expenses
Cash flow provided by operating activities for the year ended December 31, 2018 was $38.2 million.
Certain GAAP and non-GAAP measures for comparative periods in 2017 were revised for immaterial errors.
Pipeline Information
The Company currently has five abbreviated new drug applications, or ANDAs, filed with the FDA targeting products with a market size of over $750 million, three biosimilar products in development targeting products with a market size of over $14 billion, and 11 generic products in development targeting products with a market size of over $12 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2018. The Company's proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing four other proprietary products, which include injectable, inhalation and intranasal dosage forms.
Amphastar's Chinese subsidiary, ANP, currently has nine Drug Master Files, or DMFs, on file with the FDA and is developing nine additional DMFs.
Company Information
Amphastar is a specialty 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 is available at the Company's website at www.amphastar.com.
Amphastar's logo and other trademarks or service marks of Amphastar, including, but not limited to Primatene®, 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, or 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 shareholders, which exclude amortization expense, share-based compensation, and impairment charges 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, March 12, 2019, at 2:00 p.m. Pacific Time.
To access the conference call, dial toll-free (877) 881-2595 or (315) 625-3083 for international callers, five minutes before the conference. The passcode for the conference call is 4878419.
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 the Company's expectations regarding future financial performance, backlog, sales and marketing of its products, market size and growth, the timing of FDA filings or approvals, including the DMFs of ANP, the timing of product launches, acquisitions and other matters related to its pipeline of product candidates, its share buyback program and other future events. These statements are not historical facts but rather are based on Amphastar's historical performance and its current expectations, estimates, and projections regarding Amphastar's 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. You can locate these reports through the Company's website at http://ir.amphastar.com and on the SEC's website at www.sec.gov. Amphastar undertakes no obligation to revise or update information 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 Amphastar's 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
Year Ended
December 31,
December 31,
2018
2017
2018
2017
Net revenues
$
89,690
$
60,402
$
294,666
$
240,175
Cost of revenues
55,001
39,912
187,681
149,666
Gross profit
34,689
20,490
106,985
90,509
Operating (income) expenses:
Selling, distribution, and marketing
2,596
1,629
8,156
6,460
General and administrative
13,814
9,221
49,888
44,458
Research and development
16,734
11,386
57,564
43,503
Gain on sale of intangible assets
—
—
—
(2,643
)
Total operating expenses
33,144
22,236
115,608
91,778
Income (loss) from operations
1,545
(1,746
)
(8,623
)
(1,269
)
Non-operating income (expense), net
(956
)
601
(1,303
)
2,518
Income (loss) before income taxes
589
(1,145
)
(9,926
)
1,249
Income tax expense (benefit)
(1,129
)
(1,932
)
(3,266
)
(2,398
)
Net income (loss)
$
1,718
$
787
$
(6,660
)
$
3,647
Net loss attributable to non-controlling interests
$
(149
)
$
—
$
(922
)
$
—
Net income (loss) attributable to Amphastar
$
1,867
$
787
$
(5,738
)
$
3,647
Net income (loss) per share attributable to Amphastar shareholders:
Basic
$
0.04
$
0.02
$
(0.12
)
$
0.08
Diluted
$
0.04
$
0.02
$
(0.12
)
$
0.08
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:
Basic
46,268
46,233
46,395
46,107
Diluted
49,181
49,330
46,395
48,367
The comparative periods in 2017 were revised for immaterial errors.
Table II Amphastar Pharmaceuticals, Inc. Condensed Consolidated Balance Sheet (Unaudited; in thousands, except per share data)
December 31,
December 31,
2018
2017
ASSETS
Current assets:
Cash and cash equivalents
$
86,337
$
65,594
Short-term investments
2,831
2,635
Restricted cash and short-term investments
4,155
4,155
Accounts receivable, net
52,163
35,996
Inventories
69,322
63,609
Income tax refunds and deposits
49
6,036
Prepaid expenses and other assets
5,485
9,753
Total current assets
220,342
187,778
Property, plant, and equipment, net
210,418
180,545
Goodwill and intangible assets, net
42,267
45,140
Other assets
9,918
8,663
Deferred tax assets
30,618
28,946
Total assets
$
513,563
$
451,072
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
87,418
$
57,555
Income taxes payable
1,187
3,325
Current portion of long-term debt and capital leases
18,229
6,312
Total current liabilities
106,834
67,192
Long-term reserve for income tax liabilities
415
879
Long-term debt and capital leases, net of current portion
31,984
40,844
Deferred tax liabilities
1,031
1,361
Other long-term liabilities
8,940
7,060
Total liabilities
149,204
117,336
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; 51,438,675 and 46,631,118 shares issued and outstanding as of December 31, 2018 and 50,039,212 and 46,623,581 shares issued and outstanding as of December 31, 2017, respectively
5
5
Additional paid-in capital
344,434
313,891
Retained earnings
67,485
72,642
Accumulated other comprehensive loss
(4,013
)
(2,100
)
Treasury stock
(75,476
)
(50,702
)
Total Amphastar stockholders' equity
332,435
333,736
Non-controlling interests
31,924
—
Total equity
364,359
333,736
Total liabilities and stockholders' equity
$
513,563
$
451,072
The December 31, 2017, figures were revised for immaterial errors.
Table III Amphastar Pharmaceuticals, Inc. Reconciliation of Non-GAAP Measures (Unaudited; in thousands, except per share data)
Three Months Ended
Year Ended
December 31,
December 31,
2018
2017
2018
2017
GAAP net income (loss)
$
1,718
$
787
$
(6,660
)
$
3,647
Adjusted for:
Intangible amortization
265
717
1,987
2,856
Share-based compensation
3,910
4,182
16,680
17,087
Impairment of long-lived assets
1,257
—
1,647
—
Income tax expense on pre-tax adjustments
(1,004
)
(1,571
)
(4,044
)
(6,256
)
Non-GAAP net income
$
6,146
$
4,115
$
9,610
$
17,334
Non-GAAP net loss attributable to non-controlling interests
$
(85
)
$
—
$
(789
)
$
—
Non-GAAP net income attributable to Amphastar
$
6,231
$
4,115
$
10,399
$
17,334
Non-GAAP net income per share attributable to Amphastar shareholders:
Basic
$
0.13
$
0.09
$
0.22
$
0.38
Diluted
$
0.13
$
0.08
$
0.21
$
0.36
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:
Basic
46,268
46,233
46,395
46,107
Diluted
49,181
49,330
48,830
48,367
Three Months Ended December 31, 2018
Selling,
General
Research
Income
Non-controlling
Cost of
distribution
and
and
tax expense
interest
revenue
and marketing
administrative
development
(benefit)
adjustment
GAAP
$
55,001
$
2,596
$
13,814
$
16,734
$
(1,129
)
$
(149
)
Intangible amortization
(224
)
—
(41
)
—
—
11
Share-based compensation
(898
)
(86
)
(2,602
)
(324
)
—
62
Impairment of long-lived assets
(1,010
)
—
(5
)
(242
)
—
1
Income tax expense on pre-tax adjustments
—
—
—
—
1,004
(10
)
Non-GAAP
$
52,869
$
2,510
$
11,166
$
16,168
$
(125
)
$
(85
)
Three Months Ended December 31, 2017
Selling,
General
Research
Income
Non-controlling
Cost of
distribution
and
and
tax expense
interest
revenue
and marketing
administrative
development
(benefit)
adjustment
GAAP
$
39,912
$
1,629
$
9,221
$
11,386
$
(1,932
)
$
—
Intangible amortization
(675
)
—
(42
)
—
—
—
Share-based compensation
(913
)
(65
)
(2,928
)
(276
)
—
—
Income tax expense on pre-tax adjustments
—
—
—
—
1,571
—
Non-GAAP
$
38,324
$
1,564
$
6,251
$
11,110
$
(361
)
$
—
The comparative periods in 2017 were revised for immaterial errors.
Reconciliation of Non-GAAP Measures (continued)
Year Ended December 31, 2018
Selling,
General
Research
Income
Non-controlling
Cost of
distribution
and
and
tax expense
interest
revenue
and marketing
administrative
development
(benefit)
adjustment
GAAP
$
187,681
$
8,156
$
49,888
$
57,564
$
(3,266
)
$
(922
)
Intangible amortization
(1,826
)
—
(161
)
—
—
22
Share-based compensation
(3,923
)
(383
)
(10,853
)
(1,521
)
—
130
Impairment of long-lived assets
(1,087
)
—
(9
)
(551
)
—
2
Income tax expense on pre-tax adjustments
—
—
—
—
4,044
(21
)
Non-GAAP
$
180,845
$
7,773
$
38,865
$
55,492
$
778
$
(789
)
Year Ended December 31, 2017
Selling,
General
Research
Income
Non-controlling
Cost of
distribution
and
and
tax expense
interest
revenue
and marketing
administrative
development
(benefit)
adjustment
GAAP
$
149,666
$
6,460
$
44,458
$
43,503
$
(2,398
)
$
—
Intangible amortization
(2,706
)
—
(150
)
—
—
—
Share-based compensation
(3,756
)
(302
)
(11,643
)
(1,386
)
—
—
Income tax expense on pre-tax adjustments
—
—
—
—
6,256
—
Non-GAAP
$
143,204
$
6,158
$
32,665
$
42,117
$
3,858
$
—
The comparative periods in 2017 were revised for immaterial errors.
