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Lannett Reports Fiscal 2012 Third Quarter Financial Results

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for the fiscal 2012 third quarter and nine months ended March 31, 2012. The conference call will be available to interested parties by dialing 800-447-0521 from the U.S. or Canada, or 847-413-3238 from international locations, passcode 32382885. The conference call will also be available through a live audio Internet broadcast at www.lannett.com. A playback of the call will be archived and accessible at this site for at least three months.

Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s financial status and performance and regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

About Lannett Company, Inc.:

Lannett Company, founded in 1942 and celebrating its 70 th anniversary, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit the company’s website at www.lannett.com.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, the expected product approvals, the successful commercialization of recently approved products and products applications pending at the FDA, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannett’s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company’s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.

FINANCIAL TABLES FOLLOW

 
LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
         
 

Three months ended

Nine months ended
March 31, March 31,

2012

2011

2012

2011

 
Net sales $ 30,687,726 $ 25,892,483 $ 87,299,709 $ 81,327,667
Cost of sales 19,275,765 20,098,084 58,788,334 60,667,878
Amortization of intangible assets 470,409 463,769 1,409,015 1,385,892
Product royalties   50,054     26,980     168,142     (290,380 )
 
Gross profit 10,891,498 5,303,650 26,934,218 19,564,277
 
Research and development expenses 2,911,530 1,854,216 7,850,744 5,557,296
Selling, general, and administrative expenses   5,616,186     4,279,502     14,779,953     11,755,062  
 
Operating income (loss)   2,363,782     (830,068 )   4,303,521     2,251,919  
 
Other income (expense):
Foreign currency (loss) gain (3,308 ) 1,529 (5,804 ) 5,494
(Loss) gain on sale of assets - (17,565 ) 3,536 (16,299 )
Realized gain on investments 361,059 59,689 214,696 74,454
Unrealized gain (loss) on investments 104,896 (17,898 ) (45,776 ) (17,898 )
Interest and dividend income 28,305 24,744 117,252 39,852
Interest expense   (63,698 )   (28,030 )   (213,406 )   (174,882 )
  427,254     22,469     70,498     (89,279 )
 
Income (loss) before income tax expense (benefit) 2,791,036 (807,599 ) 4,374,019 2,162,640
Income tax expense (benefit)   1,056,684     (449,797 )   1,787,999     554,568  
Net income (loss) 1,734,352 (357,802 ) 2,586,020 1,608,072
Less net income attributable to noncontrolling interest   (16,468 )   (4,259 )   (53,072 )   (20,540 )
 
Net income (loss) attributable to Lannett Company, Inc. $ 1,717,884   $ (362,061 ) $ 2,532,948   $ 1,587,532  
 
Earnings (loss) per common share - Lannett Company, Inc.:
Basic $ 0.06 $ (0.01 ) $ 0.09 $ 0.06
Diluted $ 0.06 $ (0.01 ) $ 0.09 $ 0.06
 
Weighted average number of shares outstanding:
Basic 28,571,062 28,373,436 28,509,595 26,215,510
Diluted 28,719,669 28,373,436 28,668,281 26,558,432
 
LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
  (Unaudited)    

March 31, 2012

June 30, 2011

 

ASSETS

Current Assets
Cash and cash equivalents $ 18,989,168 $ 5,276,735
Investment securities 5,571,049 19,382,079
Trade accounts receivable (net of allowance of $123,573 and $123,573, respectively) 37,499,169 33,464,440
Inventories, net 27,975,938 26,902,521
Income taxes receivable 3,205,508 3,636,306
Deferred tax assets 4,867,255 4,537,881
Other current assets   1,472,069     941,902  
Total Current Assets 99,580,156 94,141,864
 
Property, plant and equipment 58,181,257 54,516,229
Less accumulated depreciation   (27,371,657 )   (24,586,448 )
30,809,600 29,929,781
 
Construction in progress 6,266,583 5,760,686
Intangible assets (product rights) - net of accumulated amortization 4,899,021 5,909,636
Deferred tax assets 8,747,015 10,446,500
Other assets   1,174,377     1,555,831  
Total Assets $ 151,476,752   $ 147,744,298  
 

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES

Current Liabilities
Accounts payable $ 15,753,524 $ 18,377,782
Accrued expenses 1,170,576 1,354,095
Accrued payroll and payroll related 2,159,723 934,504
Current portion of long-term debt 639,591 629,435
Rebates, chargebacks and returns payable   15,394,344     13,564,395  
Total Current Liabilities 35,117,758 34,860,211
 
Long-term debt, less current portion 6,781,862 7,192,496
Other long-term liabilities   -     2,417  
Total Liabilities 41,899,620 42,055,124
 
Commitment and Contingencies
 

SHAREHOLDERS' EQUITY

Common stock - authorized 50,000,000 shares, par value $0.001; issued and outstanding, 28,572,304 and 28,403,946 shares, respectively

28,572 28,404
Additional paid in capital 98,925,755 97,082,360
Retained earnings 11,820,680 9,287,732
Noncontrolling interest 173,154 139,082
Accumulated other comprehensive (loss) income   (19,293 )   23,899  
110,928,868 106,561,477
Less: Treasury stock at cost - 280,469 and 156,611 shares, respectively   (1,351,736 )   (872,303 )
TOTAL SHAREHOLDERS' EQUITY   109,577,132     105,689,174  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 151,476,752   $ 147,744,298  




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