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Amneal Reports Fourth Quarter and Full Year 2023 Financial Results

‒ Full Year 2023 Performance Met or Exceeded Financial Guidance Metrics –

‒ Q4 2023 Net Revenue of $617 million; GAAP Net Loss of $99 million; Diluted Loss per Share of $0.40 ‒

‒ Q4 2023 Adjusted Net Income(1) of $44 million, Adjusted EBITDA(1) of $142 million; Adjusted Diluted EPS(1) of $0.14 ‒

‒ Full Year 2023 Net Revenue of $2.39 billion; GAAP Net Loss of $84 million; Diluted Loss per Share of $0.48 ‒

‒ Full Year 2023 Adjusted Net Income(1) of $198 million; Adjusted EBITDA(1) of $558 million; Adjusted Diluted EPS(1) of $0.64 ‒

‒ Provides 2024 Financial Guidance of $2.55 to $2.65 billion in net revenue and $580 to $620 million in Adjusted EBITDA(1)

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX) (“Amneal” or the “Company”) today announced its results for the fourth quarter and full year ended December 31, 2023.

“Amneal had a very successful year in 2023 as we delivered strong execution and growth across our diversified pharmaceutical business. We are starting 2024 with substantial momentum and key catalysts, including complex high-value products, biosimilars and specialty, to further expand our reach. Against the macro backdrop of a global aging population, significant unmet patient needs and ongoing supply issues, Amneal’s mission to provide access to high-quality, affordable, essential medicines has never been more important or more aligned with industry dynamics. Our durable business is ideally positioned to drive sustainable, profitable growth and create value for all our stakeholders, this year and beyond,” said Chirag and Chintu Patel, Co-Chief Executive Officers.

Net revenue in the fourth quarter of 2023 was $617 million, an increase of 1% compared to $610 million in the fourth quarter of 2022. The increase was driven by AvKARE revenues growing 38% due to new launches and Specialty revenues growing 2% driven by key branded products, partially offset by Generics revenues declining 9% as strong performance of biosimilars and complex generics was offset by the timing of orders. Net loss attributable to Amneal Pharmaceuticals, Inc. was $99 million in the fourth quarter of 2023 compared to a net loss of $4 million in the fourth quarter of 2022, primarily due to non-cash intangible asset impairment charges and costs associated with our term loan refinancing. Adjusted EBITDA(1) in the fourth quarter of 2023 was $142 million, a decrease of 8% compared to the fourth quarter of 2022, primarily due to investments in research and development and commercial to drive future growth. Diluted loss per share in the fourth quarter of 2023 was $0.40, an increase of $0.37 from a loss of $0.03 for the fourth quarter of 2022, due to the aforementioned factors, partially offset by an increase in the weighted-average common shares outstanding as a result of our previously announced reorganization. Adjusted diluted EPS(1) in the fourth quarter of 2023 was $0.14, a decrease of 39% from $0.23 in the fourth quarter of 2022.

Net revenue for the year ended December 31, 2023 was $2.39 billion, an increase of 8% compared to $2.21 billion for the year ended December 31, 2022. Revenue growth was driven by all three business segments with AvKARE growing 31%, Generics growing 3% due to strong performance of our complex portfolio and biosimilars, and Specialty growing 4%. Net loss attributable to Amneal Pharmaceuticals, Inc. was $84 million for the year ended December 31, 2023, an improvement of $41 million compared to a net loss of $130 million for the year ended December 31, 2022. Adjusted EBITDA(1) for the year ended December 31, 2023 was $558 million, an increase of $44 million compared to the year ended December 31, 2022, reflective of strong revenue growth and continued operating expense leverage. Diluted loss per share for the year ended December 31, 2023 was $0.48, a decrease of 44% compared to diluted loss per share of $0.86 for the year ended December 31, 2022. Adjusted diluted EPS(1) in the year ended December 31, 2023 was $0.64, a decrease of 6% from $0.68 for the year ended December 31, 2022, due to higher EBITDA offset by higher interest expense.

(1) See “Non-GAAP Financial Measures” below.

2024 Financial Guidance

 

Full Year 2024 Guidance

Full Year 2023 Actuals

Net revenue

$2.55 billion - $2.65 billion

$2.39 billion

Adjusted EBITDA (1)

$580 million - $620 million

$558 million

Adjusted diluted EPS (2)

$0.53 - $0.63

$0.64

Operating cash flow (3)

$260 million - $300 million

$346 million

Capital expenditures

$60 million - $70 million

$43 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. Assumes weighted-average diluted shares outstanding of approximately 317 million for the year ending December 31, 2024, compared to weighted-average diluted shares outstanding of 310 million for the year ended December 31, 2023. See also “Non-GAAP Financial Measures” below for assumptions used in calculation.

(3) 2024 does not contemplate one time and non-recurring items such as legal settlements and other discrete items. 2023 includes the impact of a payment of $85.5 million for the Opana ER® antitrust litigation settlement, including interest.

Amneal’s 2024 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 today, March 1, 2024, 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 (833) 470-1428 (in the U.S.) with access code 743629. A replay of the conference call will be posted shortly after the call and will be available for seven days. 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. (Nasdaq: AMRX), headquartered in Bridgewater, NJ, is a fully integrated global pharmaceutical company. We make healthy possible through the development, manufacturing, and distribution of a diverse portfolio of over 270 pharmaceutical products, 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; expected or estimated operating results and financial performance; and statements regarding our positioning, including our ability to drive sustainable long-term growth, 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 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 impact of a prolonged business interruption within our supply chain; 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; legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives; our dependence on information technology systems and infrastructure and the potential for cybersecurity incidents; our ability to attract, hire and retain highly skilled personnel; 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 claims brought against us by 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 dependence on third-party agreements for a portion of our product offerings; 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 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 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, adjusted net income 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 loss adjusted to (A) exclude (i) non-cash interest, (ii) GAAP provision for (benefit from) 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 certain 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) reorganization expenses, (xvi) other and (xvii) 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 diluted EPS was calculated assuming (i) the weighted average diluted shares outstanding of class A common stock and (ii) as if all shares of class B common stock were converted to shares of class A common stock as of January 1, 2022.

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 December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

 

2022

Net revenue

$

616,981

 

 

$

609,759

 

 

$

2,393,607

 

 

$

2,212,304

 

Cost of goods sold

 

427,154

 

 

 

394,371

 

 

 

1,573,042

 

 

 

1,427,596

 

Gross profit

 

189,827

 

 

 

215,388

 

 

 

820,565

 

 

 

784,708

 

Selling, general and administrative

 

109,003

 

 

 

102,158

 

 

 

429,675

 

 

 

399,700

 

Research and development

 

46,086

 

 

 

41,907

 

 

 

163,950

 

 

 

195,688

 

In-process research and development impairment charges

 

30,800

 

 

 

12,970

 

 

 

30,800

 

 

 

12,970

 

Intellectual property legal development expenses

 

478

 

 

 

1,362

 

 

 

3,828

 

 

 

4,358

 

Acquisition, transaction-related and integration (credit) expenses

 

 

 

 

(5

)

 

 

 

 

 

709

 

Restructuring and other charges

 

114

 

 

 

109

 

 

 

1,749

 

 

 

1,421

 

Change in fair value of contingent consideration

 

(13,710

)

 

 

2,226

 

 

 

(14,497

)

 

 

731

 

Insurance recoveries for property losses and associated expenses, net

 

 

 

 

 

 

 

 

 

 

(1,911

)

Charges related to legal matters, net

 

2,863

 

 

 

20,094

 

 

 

1,824

 

 

 

269,930

 

Other operating income

 

 

 

 

(1,465

)

 

 

(1,138

)

 

 

(3,960

)

Operating income (loss)

 

14,193

 

 

 

36,032

 

 

 

204,374

 

 

 

(94,928

)

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

(59,548

)

 

 

(47,028

)

 

 

(210,629

)

 

 

(158,377

)

Foreign exchange gain (loss), net

 

2,288

 

 

 

569

 

 

 

1,671

 

 

 

(12,364

)

Loss on refinancing

 

(40,805

)

 

 

 

 

 

(40,805

)

 

 

(291

)

Other income, net

 

411

 

 

 

2,772

 

 

 

5,119

 

 

 

17,833

 

Total other expense, net

 

(97,654

)

 

 

(43,687

)

 

 

(244,644

)

 

 

(153,199

)

Loss before income taxes

 

(83,461

)

 

 

(7,655

)

 

 

(40,270

)

 

 

(248,127

)

Provision for (benefit from) income taxes

 

9,883

 

 

 

(1,797

)

 

 

8,452

 

 

 

6,662

 

Net loss

 

(93,344

)

 

 

(5,858

)

 

 

(48,722

)

 

 

(254,789

)

Less: Net (income) loss attributable to non-controlling interests

 

(5,305

)

 

 

1,525

 

 

 

(35,271

)

 

 

125,241

 

Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest

 

(98,649

)

 

 

(4,333

)

 

 

(83,993

)

 

 

(129,548

)

Accretion of redeemable non-controlling interest

 

 

 

 

 

 

 

 

 

 

(438

)

Net loss attributable to Amneal Pharmaceuticals, Inc.

$

(98,649

)

 

$

(4,333

)

 

$

(83,993

)

 

$

(129,986

)

 

 

 

 

 

 

 

 

Net loss per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders:

 

 

 

 

 

 

 

Basic and diluted

$

(0.40

)

 

$

(0.03

)

 

$

(0.48

)

 

$

(0.86

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic and diluted

 

243,711

 

 

 

151,476

 

 

 

176,136

 

 

 

150,944

 

Amneal Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(unaudited; in thousands)

 

December 31,

2023

 

December 31,

2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

91,542

 

$

25,976

Restricted cash

 

7,565

 

 

9,251

Trade accounts receivable, net

 

613,732

 

 

741,791

Inventories

 

581,384

 

 

530,735

Prepaid expenses and other current assets

 

82,685

 

 

103,565

Related party receivables

 

955

 

 

500

Total current assets

 

1,377,863

 

 

1,411,818

Property, plant and equipment, net

 

447,574

 

 

469,815

Goodwill

 

598,629

 

 

598,853

Intangible assets, net

 

890,423

 

 

1,096,093

Operating lease right-of-use assets

 

30,329

 

 

38,211

Operating lease right-of-use assets - related party

 

12,954

 

 

17,910

Financing lease right-of-use assets

 

59,280

 

 

63,424

Other assets

 

55,517

 

 

103,217

Total assets

$

3,472,569

 

$

3,799,341

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

534,662

 

$

538,199

Current portion of liabilities for legal matters

 

76,988

 

 

107,483

Revolving credit facility

 

179,000

 

 

60,000

Current portion of long-term debt, net

 

34,125

 

 

29,961

Current portion of operating lease liabilities

 

9,207

 

 

8,321

Current portion of operating lease liabilities - related party

 

2,825

 

 

2,869

Current portion of financing lease liabilities

 

2,467

 

 

3,488

Related party payables - short term

 

7,321

 

 

2,479

Total current liabilities

 

846,595

 

 

752,800

Long-term debt, net

 

2,386,004

 

 

2,591,981

Note payable - related party

 

41,447

 

 

39,706

Operating lease liabilities

 

24,095

 

 

32,126

Operating lease liabilities - related party

 

12,787

 

 

15,914

Financing lease liabilities

 

58,566

 

 

60,769

Related party payable - long term

 

11,776

 

 

9,649

Other long-term liabilities

 

29,995

 

 

87,468

Total long-term liabilities

 

2,564,670

 

 

2,837,613

Redeemable non-controlling interests

 

41,293

 

 

24,949

Total stockholders' equity

 

20,011

 

 

183,979

Total liabilities and stockholders' equity

$

3,472,569

 

$

3,799,341

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(unaudited; in thousands)

 

Years Ended December 31,

 

2023

 

2022

Cash flows from operating activities:

 

 

 

Net loss

$

(48,722

)

 

$

(254,789

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

229,400

 

 

 

240,175

 

Unrealized foreign currency (gain) loss

 

(768

)

 

 

15,190

 

Amortization of debt issuance costs and discount

 

8,182

 

 

 

8,595

 

Loss on refinancing

 

40,805

 

 

 

291

 

Intangible asset impairment charges

 

66,932

 

 

 

24,081

 

Change in fair value of contingent consideration

 

(14,497

)

 

 

731

 

Stock-based compensation

 

26,822

 

 

 

31,847

 

Inventory provision

 

74,686

 

 

 

51,096

 

Insurance recoveries for property and equipment losses

 

 

 

 

(1,000

)

Other operating charges and credits, net

 

9,923

 

 

 

8,828

 

Changes in assets and liabilities:

 

 

 

Trade accounts receivable, net

 

126,289

 

 

 

(79,717

)

Inventories

 

(126,182

)

 

 

(102,396

)

Prepaid expenses, other current assets and other assets

 

37,814

 

 

 

9,882

 

Related party receivables

 

(490

)

 

 

646

 

Accounts payable, accrued expenses and other liabilities

 

(94,446

)

 

 

109,568

 

Related party payables

 

9,829

 

 

 

2,072

 

Net cash provided by operating activities

 

345,577

 

 

 

65,100

 

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(43,216

)

 

 

(46,407

)

Acquisition of intangible assets

 

(22,388

)

 

 

(41,800

)

Deposits for future acquisition of property, plant, and equipment

 

(3,585

)

 

 

(2,388

)

Acquisition of business

 

 

 

 

(84,714

)

Proceeds from insurance recoveries for property and equipment losses

 

 

 

 

1,000

 

Net cash used in investing activities

 

(69,189

)

 

 

(174,309

)

Cash flows from financing activities:

 

 

 

Payments of deferred financing and refinancing costs

 

(162,415

)

 

 

(1,663

)

Payments of principal on debt, revolving credit facility, financing leases and other

 

(414,080

)

 

 

(123,272

)

Proceeds from issuance of debt

 

217,732

 

 

 

 

Borrowings on revolving credit facility

 

219,000

 

 

 

85,000

 

Proceeds from exercise of stock options

 

451

 

 

 

662

 

Employee payroll tax withholding on restricted stock unit vesting

 

(2,378

)

 

 

(3,571

)

Payments of deferred consideration for acquisitions - related party

 

 

 

 

(44,498

)

Acquisition of redeemable non-controlling interests

 

 

 

 

(1,722

)

Tax distributions to non-controlling interest

 

(70,883

)

 

 

(17,556

)

Net cash used in financing activities

 

(212,573

)

 

 

(106,620

)

Effect of foreign exchange rate on cash

 

65

 

 

 

(5,683

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

63,880

 

 

 

(221,512

)

Cash, cash equivalents, and restricted cash - beginning of period

 

35,227

 

 

 

256,739

 

Cash, cash equivalents, and restricted cash - end of period

$

99,107

 

 

$

35,227

 

Cash and cash equivalents - end of period

$

91,542

 

 

$

25,976

 

Restricted cash - end of period

$

7,565

 

 

$

9,251

 

Cash, cash equivalents, and restricted cash - end of period

$

99,107

 

 

$

35,227

 

Amneal Pharmaceuticals, Inc.

Non-GAAP Reconciliations

(unaudited, in thousands)

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(93,344

)

 

$

(5,858

)

 

$

(48,722

)

 

$

(254,789

)

Adjusted to add (deduct):

 

 

 

 

 

 

 

Interest expense, net

 

59,548

 

 

 

47,028

 

 

 

210,629

 

 

 

158,377

 

Provision for (benefit from) income taxes

 

9,883

 

 

 

(1,797

)

 

 

8,452

 

 

 

6,662

 

Depreciation and amortization

 

56,933

 

 

 

61,056

 

 

 

229,400

 

 

 

240,175

 

EBITDA (Non-GAAP)

$

33,020

 

 

$

100,429

 

 

$

399,759

 

 

$

150,425

 

Adjusted to add (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

5,974

 

 

 

7,831

 

 

 

26,822

 

 

 

31,847

 

Acquisition, site closure, and idle facility expenses (1)

 

1,186

 

 

 

3,452

 

 

 

7,017

 

 

 

15,682

 

Restructuring and other charges

 

114

 

 

 

109

 

 

 

1,650

 

 

 

1,378

 

Loss on refinancing

 

40,805

 

 

 

 

 

 

40,805

 

 

 

291

 

Charges related to legal matters, net (2)

 

2,863

 

 

 

20,094

 

 

 

11,824

 

 

 

269,930

 

Asset impairment charges (3)

 

67,228

 

 

 

18,551

 

 

 

70,107

 

 

 

26,909

 

Foreign exchange (gain) loss

 

(2,288

)

 

 

(569

)

 

 

(1,671

)

 

 

12,364

 

Change in fair value of contingent consideration

 

(13,710

)

 

 

2,226

 

 

 

(14,497

)

 

 

731

 

Insurance recoveries for property losses and

associated expenses

 

 

 

 

 

 

 

 

 

 

(1,911

)

Regulatory approval milestone

 

 

 

 

 

 

 

 

 

 

5,000

 

Increase in tax receivable agreement liability

 

1,217

 

 

 

631

 

 

 

3,124

 

 

 

631

 

System implementation expense (4)

 

934

 

 

 

727

 

 

 

5,363

 

 

 

2,818

 

Reorganization expenses(5)

 

4,630

 

 

 

 

 

 

5,927

 

 

 

393

 

Other

 

175

 

 

 

551

 

 

 

1,984

 

 

 

(2,378

)

Adjusted EBITDA (Non-GAAP)

$

142,148

 

 

$

154,032

 

 

558,214

 

 

$

514,110

 

 Amneal Pharmaceuticals, Inc.

Non-GAAP Reconciliations

(unaudited; in thousands, except per share amounts)

 

Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted Earnings per Share

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Net loss

$

(93,344

)

 

$

(5,858

)

 

$

(48,722

)

 

$

(254,789

)

Adjusted to add (deduct):

 

 

 

 

 

 

 

Non-cash interest

 

1,016

 

 

 

1,885

 

 

 

7,017

 

 

 

7,715

 

GAAP provision for (benefit from) income taxes

 

9,883

 

 

 

(1,797

)

 

 

8,452

 

 

 

6,662

 

Amortization

 

39,208

 

 

 

42,851

 

 

 

157,219

 

 

 

164,997

 

Stock-based compensation expense

 

5,974

 

 

 

7,831

 

 

 

26,822

 

 

 

31,847

 

Acquisition, site closure expenses, and idle facility

expenses (1)

 

1,186

 

 

 

3,452

 

 

 

7,017

 

 

 

15,682

 

Restructuring and other charges

 

114

 

 

 

109

 

 

 

1,650

 

 

 

1,378

 

Loss on refinancing

 

40,805

 

 

 

 

 

 

40,805

 

 

 

291

 

Charges related to legal matters, including interest,

net (2)

 

3,580

 

 

 

21,564

 

 

 

14,784

 

 

 

273,226

 

Asset impairment charges (3)

 

67,143

 

 

 

18,485

 

 

 

70,015

 

 

 

26,843

 

Regulatory approval milestone

 

 

 

 

 

 

 

 

 

 

5,000

 

Change in fair value of contingent consideration

 

(13,710

)

 

 

2,226

 

 

 

(14,497

)

 

 

731

 

Insurance recoveries for property losses and

associated expenses

 

 

 

 

 

 

 

 

 

 

(1,911

)

Increase in tax receivable agreement liability

 

1,217

 

 

 

631

 

 

 

3,124

 

 

 

631

 

System implementation expense (4)

 

934

 

 

 

727

 

 

 

5,363

 

 

 

2,818

 

Reorganization expenses (5)

 

4,630

 

 

 

 

 

 

5,927

 

 

 

393

 

Other

 

323

 

 

 

552

 

 

 

2,466

 

 

 

(2,235

)

Provision for income taxes (6)

 

(17,563

)

 

 

(15,297

)

 

 

(60,014

)

 

 

(56,450

)

Net income attributable to non-controlling interests

not associated with our class B common stock

 

(7,831

)

 

 

(5,958

)

 

 

(29,873

)

 

 

(15,121

)

Adjusted net income (Non-GAAP)

$

43,565

 

 

$

71,403

 

 

$

197,555

 

 

$

207,708

 

Weighted average diluted shares outstanding (Non-GAAP) (7)

 

314,986

 

 

 

305,145

 

 

 

310,234

 

 

 

304,598

 

Adjusted diluted earnings per share (Non-GAAP)

$

0.14

 

 

$

0.23

 

 

$

0.64

 

 

$

0.68

 

Amneal Pharmaceuticals, Inc.

Non-GAAP Reconciliations

(unaudited)

Explanations for Reconciliations of Net Loss to EBITDA and Adjusted EBITDA and

Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted Earnings per Share

(1) 

Acquisition, site closure, and idle facility expenses for the three months and year ended December 31, 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 December 31, 2022 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 year ended December 31, 2022 primarily included (i) transaction and integration costs associated with the acquisition of the baclofen franchise from certain entities affiliated with Saol International Limited, which closed on February 9, 2022; (ii) integration costs associated with the acquisition of Puniska Healthcare Pvt. Ltd., which closed on November 2, 2021; and (iii) site closure costs associated with the planned cessation of manufacturing at our Hauppauge, NY facility.

(2) 

For the three months ended December 31, 2023, charges related to legal matters, net were primarily comprised of a settlement of commercial antitrust litigation. For the year ended December 31, 2023, charges related to legal matters, net were primarily comprised of (i) charges associated with civil prescription opioid litigation, (ii) a settlement of a customer claim, (iii) a settlement of commercial antitrust litigation, and (iv) a settlement of a stockholder derivative lawsuit. For the three months ended December 31, 2022, charges related to legal matters, net primarily related to prescription opioid litigation. For the year ended December 31, 2022, charges related to legal matters, net, primarily included charges for (i) the settlements of the Opana ER® antitrust litigation and (ii) prescription opioid litigation, offset in part by insurance recoveries associated with class action shareholder lawsuits.

 (3)

Asset impairment charges for the three months and year ended December 31, 2023 were primarily associated with the write-offs of intangibles assets. Asset impairment charges for the three months and year ended December 31, 2022 were associated with the write-offs of intangibles assets and equipment.

 (4)

System implementation expense for the three months ended December 31, 2023 was primarily for the implementation of sales deduction software and indirect procurement software. System implementation expense for the three months ended December 31, 2022 was primarily for indirect procurement software. System implementation expense for the years ended December 31, 2023 and 2022 was primarily for the implementation of indirect procurement software, sales deduction software, and financial statement consolidation software.  System implementation expenses were associated with the further integration of our acquired businesses.

 (5)

On November 7, 2023, the Company implemented a plan to reorganize and simplify its corporate structure by eliminating its umbrella partnership-C-corporation structure and converting to a more traditional C-corporation structure, whereby all stockholders hold their voting and economic interests directly through the public company (“Reorganization”). For the three months ended December 31, 2023 and the years ended December 31, 2023 and 2022, Reorganization expenses were comprised of professional fees. 

 (6)

The non-GAAP effective tax rates for the three months and year ended December 31, 2023 were 28.7% and 23.3%, respectively. The non-GAAP effective tax rates for the three months and year ended December 31, 2022 were 17.6% and 21.4%, respectively.

 (7)

Weighted average diluted shares outstanding consisted of class A common stock and class B common stock, as if all shares of class B common stock were converted to class A common stock as of January 1, 2022.

Amneal Pharmaceuticals, Inc.

Generics Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

 

Three Months Ended December 31, 2023

 

Three Months Ended December 31, 2022

 

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

 

$

363,037

 

 

$

 

 

$

363,037

 

 

$

399,165

 

 

$

 

 

$

399,165

 

Cost of goods sold (2)

 

 

221,861

 

 

 

(14,167

)

 

 

207,694

 

 

 

249,795

 

 

 

(16,875

)

 

 

232,920

 

Gross profit

 

 

141,176

 

 

 

14,167

 

 

 

155,343

 

 

 

149,370

 

 

 

16,875

 

 

 

166,245

 

Gross margin %

 

 

38.9

%

 

 

 

 

42.8

%

 

 

37.4

%

 

 

 

 

41.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

 

30,734

 

 

 

(1,849

)

 

 

28,885

 

 

 

25,371

 

 

 

(1,319

)

 

 

24,052

 

Research and development (4)

 

 

33,663

 

 

 

(654

)

 

 

33,009

 

 

 

38,127

 

 

 

(1,112

)

 

 

37,015

 

In-process research and development impairment charges

 

 

26,500

 

 

 

(26,500

)

 

 

 

 

 

12,970

 

 

 

(12,970

)

 

 

 

Intellectual property legal development expenses

 

 

468

 

 

 

 

 

 

468

 

 

 

1,332

 

 

 

 

 

 

1,332

 

Acquisition, transaction-related and integration expenses

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

(1

)

 

 

 

Restructuring and other charges

 

 

 

 

 

 

 

 

 

 

 

108

 

 

 

(108

)

 

 

 

Charges related to legal matters, net

 

 

2,863

 

 

 

(2,863

)

 

 

 

 

 

19,958

 

 

 

(19,958

)

 

 

 

Other operating income

 

 

 

 

 

 

 

 

 

 

 

(1,465

)

 

 

 

 

 

(1,465

)

Operating income

 

$

46,948

 

 

$

46,033

 

 

$

92,981

 

 

$

52,968

 

 

$

52,343

 

 

$

105,311

(1) 

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

 (2)

Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ($0.6 million and $1.2 million), amortization expense ($10.7 million and $12.4 million), site closure and idle facility expenses ($0.7 million and $2.7 million), asset impairment charges ($2.3 million and $0.3 million), and other ($(0.1) million and $0.3 million).

 (3)

Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ($1.2 million and $0.5 million) and site closure costs ($0.6 million and $0.8 million).

 (4)

Adjustments for the three months ended December 31, 2023 and 2022 were comprised of stock-based compensation expense. 

Amneal Pharmaceuticals, Inc.

Generics Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

 

Year Ended December 31, 2023

 

Year Ended December 31, 2022

 

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

 

$

1,471,401

 

 

$

 

 

$

1,471,401

 

 

$

1,432,073

 

 

$

 

 

$

1,432,073

 

Cost of goods sold (2)

 

 

913,869

 

 

 

(56,450

)

 

 

857,419

 

 

 

896,031

 

 

 

(70,080

)

 

 

825,951

 

Gross profit

 

 

557,532

 

 

 

56,450

 

 

 

613,982

 

 

 

536,042

 

 

 

70,080

 

 

 

606,122

 

Gross margin %

 

 

37.9

%

 

 

 

 

41.7

%

 

 

37.4

%

 

 

 

 

42.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

 

119,912

 

 

 

(7,411

)

 

 

112,501

 

 

 

109,781

 

 

 

(9,960

)

 

 

99,821

 

Research and development (4)

 

 

132,233

 

 

 

(2,555

)

 

 

129,678

 

 

 

167,509

 

 

 

(4,819

)

 

 

162,690

 

In-process research and development impairment charges

 

 

26,500

 

 

 

(26,500

)

 

 

 

 

 

12,970

 

 

 

(12,970

)

 

 

 

Intellectual property legal development expenses

 

 

3,708

 

 

 

 

 

 

3,708

 

 

 

4,251

 

 

 

 

 

 

4,251

 

Acquisition, transaction-related and integration expenses

 

 

 

 

 

 

 

 

 

 

 

25

 

 

 

(25

)

 

 

 

Restructuring and other charges

 

 

211

 

 

 

(112

)

 

 

99

 

 

 

821

 

 

 

(821

)

 

 

 

Insurance recoveries for property losses and associated expenses, net

 

 

 

 

 

 

 

 

 

 

 

(1,911

)

 

 

1,911

 

 

 

 

(Credit) charges related to legal matters, net

 

 

(64

)

 

 

(9,936

)

 

 

(10,000

)

 

 

22,400

 

 

 

(22,400

)

 

 

 

Other operating income

 

 

(1,138

)

 

 

 

 

 

(1,138

)

 

 

(3,960

)

 

 

 

 

 

(3,960

)

Operating income

 

$

276,170

 

 

$

102,964

 

 

$

379,134

 

 

$

224,156

 

 

$

119,164

 

 

$

343,320

 (1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

 (2)

Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ($3.5 million and $4.8 million), amortization expense ($42.8 million and $44.2 million), site closure and idle facility expenses ($4.9 million and $12.5 million), asset impairment charges ($5.2 million and $8.6 million), and other ($0.1 million and none).

 (3)

Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of stock-based compensation expense ($5.2 million, and $2.5 million), site closure expenses ($2.2 million and $2.5 million), and a regulatory approval milestone (none and $5.0 million).

 (4)

Adjustments for the years ended December 31, 2023 and 2022 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 December 31, 2023

 

Three Months Ended December 31, 2022

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

104,481

 

 

$

 

 

$

104,481

 

 

$

102,550

 

 

$

 

 

$

102,550

 

Cost of goods sold (1)

 

79,023

 

 

 

(59,940

)

 

 

19,083

 

 

 

52,069

 

 

 

(32,652

)

 

 

19,417

 

Gross profit

 

25,458

 

 

 

59,940

 

 

 

85,398

 

 

 

50,481

 

 

 

32,652

 

 

 

83,133

 

Gross margin %

 

24.4

%

 

 

 

 

81.7

%

 

 

49.2

%

 

 

 

 

81.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

20,243

 

 

 

(39

)

 

 

20,204

 

 

 

20,259

 

 

 

(119

)

 

 

20,140

 

Research and development (2)

 

12,423

 

 

 

(451

)

 

 

11,972

 

 

 

3,780

 

 

 

(372

)

 

 

3,408

 

In-process research and development impairment charges

 

4,300

 

 

 

(4,300

)

 

 

 

 

 

 

 

 

 

 

 

 

Intellectual property legal development expenses

 

10

 

 

 

 

 

 

10

 

 

 

30

 

 

 

 

 

 

30

 

Acquisition, transaction-related and integration expenses

 

 

 

 

 

 

 

 

 

 

2

 

 

 

(2

)

 

 

 

Restructuring and other charges

 

92

 

 

 

(92

)

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of contingent consideration (3)

 

(13,710

)

 

 

13,710

 

 

 

 

 

 

2,226

 

 

 

(2,226

)

 

 

 

Operating income

$

2,100

 

 

$

51,112

 

 

$

53,212

 

 

$

24,184

 

 

$

35,371

 

 

$

59,555

 

(1) 

Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ($25.8 million and $27.4 million) and asset impairment charges ($34.1 million and $5.3 million).

 

 

 (2)

Adjustments for the three months ended December 31, 2023 and 2022 were comprised of stock-based compensation expense.

 

 

 (3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC.

Amneal Pharmaceuticals, Inc.

Specialty Segment

Reconciliation of GAAP to Non-GAAP Operating Results

(unaudited; $ in thousands)

 

Year Ended December 31, 2023

 

Year Ended December 31, 2022

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

390,457

 

 

$

 

 

$

390,457

 

 

$

374,121

 

 

$

 

 

$

374,121

 

Cost of goods sold (1)

 

214,277

 

 

 

(137,811

)

 

 

76,466

 

 

 

182,432

 

 

 

(113,512

)

 

 

68,920

 

Gross profit

 

176,180

 

 

 

137,811

 

 

 

313,991

 

 

 

191,689

 

 

 

113,512

 

 

 

305,201

 

Gross margin %

 

45.1

%

 

 

 

 

80.4

%

 

 

51.2

%

 

 

 

 

81.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

88,137

 

 

 

(688

)

 

 

87,449

 

 

 

90,031

 

 

 

(913

)

 

 

89,118

 

Research and development (2)

 

31,717

 

 

 

(1,785

)

 

 

29,932

 

 

 

28,179

 

 

 

(1,471

)

 

 

26,708

 

In-process research and development impairment charges

 

4,300

 

 

 

(4,300

)

 

 

 

 

 

 

 

 

 

 

 

 

Intellectual property legal development expenses

 

120

 

 

 

 

 

 

120

 

 

 

107

 

 

 

 

 

 

107

 

Acquisition, transaction-related and integration expenses

 

 

 

 

 

 

 

 

 

 

49

 

 

 

(49

)

 

 

 

Restructuring and other charges

 

1,105

 

 

 

(1,105

)

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of contingent consideration (3)

 

(14,497

)

 

 

14,497

 

 

 

 

 

 

731

 

 

 

(731

)

 

 

 

Operating income

$

65,298

 

 

$

131,192

 

 

$

196,490

 

 

$

72,592

 

 

$

116,676

 

 

$

189,268

 

(1) 

Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ($103.7 million and $108.2 million) and asset impairment charges ($34.1 million and $5.3 million).

 

 

 (2)

Adjustments for the years ended December 31, 2023 and 2022 were comprised of stock-based compensation expense.

 

 

 (3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC.

Amneal Pharmaceuticals, Inc.

AvKARE Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Three Months Ended December 31, 2023

 

Three Months Ended December 31, 2022

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

149,463

 

 

$

 

 

$

149,463

 

 

$

108,044

 

 

$

 

 

$

108,044

 

Cost of goods sold

 

126,270

 

 

 

 

 

 

126,270

 

 

 

92,507

 

 

 

 

 

 

92,507

 

Gross profit

 

23,193

 

 

 

 

 

 

23,193

 

 

 

15,537

 

 

 

 

 

 

15,537

 

Gross margin %

 

15.5

%

 

 

 

 

15.5

%

 

 

14.4

%

 

 

 

 

14.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

14,073

 

 

 

(3,764

)

 

 

10,309

 

 

 

14,298

 

 

 

(4,932

)

 

 

9,366

 

Operating income

$

9,120

 

 

$

3,764

 

 

$

12,884

 

 

$

1,239

 

 

$

4,932

 

 

$

6,171

 (1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

 

 

 (2)

Adjustments for the three months ended December 31, 2023 and 2022, respectively, were comprised of amortization expense ($4.2 million and $4.9 million) and other ($(0.4) million and none).

Amneal Pharmaceuticals, Inc.

AvKARE Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Year Ended December 31, 2023

 

Year Ended December 31, 2022

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

531,749

 

 

$

 

 

$

531,749

 

 

$

406,110

 

 

$

 

 

$

406,110

 

Cost of goods sold

 

444,896

 

 

 

 

 

 

444,896

 

 

 

349,133

 

 

 

 

 

 

349,133

 

Gross profit

 

86,853

 

 

 

 

 

 

86,853

 

 

 

56,977

 

 

 

 

 

 

56,977

 

Gross margin %

 

16.3

%

 

 

 

 

16.3

%

 

 

14.0

%

 

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

55,341

 

 

 

(15,373

)

 

 

39,968

 

 

 

53,659

 

 

 

(19,324

)

 

 

34,335

 

Operating income

$

31,512

 

 

$

15,373

 

 

$

46,885

 

 

$

3,318

 

 

$

19,324

 

 

$

22,642

 

 (1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

 

 

 (2)

Adjustments for the years ended December 31, 2023 and 2022, respectively, were comprised of amortization ($16.8 million and $19.7 million) and other ($(1.4) million and $(0.4) million).

 

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