Akorn, Inc. (NASDAQ: AKRX), a niche specialty pharmaceutical company, today reported financial results for the third quarter of 2011. Consolidated revenue for the third quarter of 2011 was $36.7 million, up 69% over the comparable prior year quarter consolidated revenue of $21.7 million. The increase in revenue was the result of a full quarter of AVR sales totaling $5.6 million, the continued growth of products launched in 2010 and strong organic growth in established injectable and ophthalmic products. Consolidated gross margin for the third quarter of 2011 was 60% compared to 53% in the comparable prior year period. Sustained improvements in gross margin are the result of favorable product mix, selected price increases and higher utilization of plant capacities.
Net income for the third quarter of 2011 was $13.5 million, and earnings per share were $0.13 per diluted share compared to a net income of $4.0 million and earnings per share of $0.04 in the comparable prior year quarter. Third quarter 2011 net income included $2.0 million of expense from the convertible debt issued June 1, up from $0.7 million in expense in the prior quarter. Of the $2.0 million in expense related to the convertible debt, $1.0 million represents cash interest and $1.0 million represents non-cash accretion of the convertible debt discount and amortization of deferred financing costs. Third quarter 2011 net income also included a $6.2 million credit to income tax expense. The Company’s deferred tax assets had previously been fully reserved to reflect the uncertainty that the Company would generate earnings sufficient to realize the benefit of these assets. The credit in this quarter represents the reversal of the reserve as the Company now feels it is probable it will realize the full benefit of its deferred tax assets.
Third quarter 2011 Adjusted EBITDA was $11.9 million, up 88% compared with $6.3 million in the comparable prior year quarter.