Impax Laboratories Reports Second Quarter 2012 Adjusted EPS Increased To $0.60; GAAP EPS Increased To $0.27

Cash and Short-term Investments

Cash and short-term investments were $354.5 million as of June 30, 2012, as compared to $346.4 million as of December 31, 2011.

2012 Financial Outlook

The Company updated its 2012 financial outlook as noted below.

• Gross margins as a percent of total revenues of approximately 60%.
• Total R&D expenses across the generic and brand divisions to approximate $89.0 million with generic R&D of approximately $48.0 million and brand R&D of approximately $41.0 million.
• UPDATED - Patent litigation expenses of approximately $10.0 to $13.0 million.
• SG&A expenses of approximately $113.0 million.
• Effective tax rate of approximately 36%.
• Capital expenditures of approximately $78.0 million.

Conference Call Information

The Company will host a conference call on July 31, 2012 at 11:00 a.m. EDT to discuss its results. The number to call from within the United States is [phone] and [phone] internationally. The call can also be accessed via a live Webcast through the Investor Relations section of the Company’s Web site, www.impaxlabs.com. A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial [phone] (in the U.S.) and [phone] (international callers). The access conference code is 99743725.

About Impax Laboratories, Inc.

Impax Laboratories, Inc. is a technology based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals Division and markets branded products through the Impax Pharmaceuticals Division. Additionally, where strategically appropriate, Impax has developed marketing partnerships to fully leverage its technology platform. Impax Laboratories is headquartered in Hayward, California, and has a full range of capabilities in its Hayward, Philadelphia and Taiwan facilities. For more information, please visit the Company's Web site at: www.impaxlabs.com.

" Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the effect of current economic conditions on the Company’s industry, business, financial position and results of operations, fluctuations in the Company’s revenues and operating income, the Company’s ability to successfully develop and commercialize pharmaceutical products, reductions or loss of business with any significant customer, the impact of consolidation of the Company’s customer base, the impact of competition, the Company’s ability to sustain profitability and positive cash flows, any delays or unanticipated expenses in connection with the operation of the Company’s Taiwan facility, the effect of foreign economic, political, legal and other risks on the Company’s operations abroad, the uncertainty of patent litigation, increased government scrutiny on the Company’s agreements with brand pharmaceutical companies, consumer acceptance and demand for new pharmaceutical products, the difficulty of predicting Food and Drug Administration filings and approvals, the Company’s inexperience in conducting clinical trials and submitting new drug applications, the Company’s ability to successfully conduct clinical trials, the Company’s reliance on third parties to conduct clinical trials and testing, the availability of raw materials and impact of interruptions in the Company’s supply chain, the use of controlled substances in the Company’s products, disruptions or failures in the Company’s information technology systems and network infrastructure, the Company’s reliance on alliance and collaboration agreements, the Company’s dependence on certain employees, the Company’s ability to comply with legal and regulatory requirements governing the healthcare industry, the regulatory environment, the Company’s ability to protect the Company’s intellectual property, exposure to product liability claims, changes in tax regulations, the Company’s ability to manage the Company’s growth, including through potential acquisitions, the restrictions imposed by the Company’s credit facility, uncertainties involved in the preparation of the Company’s financial statements, the Company’s ability to maintain an effective system of internal control over financial reporting, any manufacturing difficulties or delays, the effect of terrorist attacks on the Company’s business, the location of the Company’s manufacturing and research and development facilities near earthquake fault lines and other risks described in the Company’s periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and Impax undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.

Impax Laboratories, Inc.
Consolidated Statements of Operations
(unaudited, amounts in thousands, except share and per share data)
		Three Months Ended June 30,						Six Months Ended June 30,
		2012			2011			2012			2011
Revenues:
Global Pharmaceuticals Division		$	133,068		$	120,559		$	256,333		$	223,907
Impax Pharmaceuticals Division			33,392			5,301			38,695			10,604
Total Revenues			166,460			125,860			295,028			234,511
Cost of revenues			88,637			66,158			154,652			116,272
Gross profit			77,823			59,702			140,376			118,239
Operating expenses:
Research and development			19,869			23,978			38,685			43,469
Patent litigation			2,914			2,209			6,952			3,983
Selling, general and administrative			24,870			15,509			46,103			32,088
Total operating expenses			47,653			41,696			91,740			79,540
Income from operations			30,170			18,006			48,636			38,699
Other expense, net			(95)			(545)			(175)			(540)
Interest income			244			290			499			611
Interest expense			(423)			(11)			(462)			(28)
Income before income taxes			29,896			17,740			48,498			38,742
Provision for income taxes			11,262			5,214			17,531			12,358
Net income before noncontrolling interest			18,634			12,526			30,967			26,384
Add back loss attributable to noncontrolling interest			38			24			70			29
Net Income		$	18,672		$	12,550		$	31,037		$	26,413
Net Income per share:
Basic		$	0.29		$	0.20		$	0.48		$	0.41
Diluted		$	0.27		$	0.19		$	0.46		$	0.39
Weighted average common shares outstanding:
Basic			65,482,700			64,024,483			65,289,869			63,709,258
Diluted			67,954,573			67,654,047			68,064,934			67,401,018

Impax Laboratories, Inc.
Condensed Consolidated Balance Sheets
(unaudited, amounts in thousands)
		June 30,			December 31,
		2012			2011
Assets
Current assets:
Cash and cash equivalents		$	184,632		$	104,419
Short-term investments			169,851			241,995
Accounts receivable, net			143,447			153,773
Inventory, net			63,092			54,177
Prepaid expenses and other assets			46,919			7,718
Current portion deferred tax asset			33,993			37,853
Total current assets			641,934			599,935
Property, plant and equipment, net			136,888			118,158
Other assets			90,359			45,942
Intangible assets, net			61,636			2,250
Goodwill			27,574			27,574
Total assets		$	958,391		$	793,859
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses		$	131,112		$	93,071
Accrued profit sharing and royalty expenses			32,984			40,766
Accrued product licensing payments			96,000			-
Deferred revenue			12,743			23,024
Total current liabilities			272,839			156,861
Deferred revenue			15,327			17,131
Other liabilities			20,780			16,861
Total liabilities			308,946		$	190,853
Total stockholders' equity			649,445			603,006
Total liabilities and stockholders' equity		$	958,391		$	793,859

Impax Laboratories, Inc.
Consolidated Statements of Cash Flows
(unaudited, amounts in thousands)
		Six Months Ended June 30,
		2012			2011
Cash flows from operating activities:
Net income		$	31,037		$	26,413
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			12,144			8,351
Accretion of interest income on short-term investments			(318)			(461)
Deferred income taxes			(29,486)			3,125
Tax benefit related to the exercise of employee stock options			(2,338)			(5,641)
Deferred revenue			931			1,887
Deferred product manufacturing costs			(1,574)			(1,061)
Recognition of deferred revenue			(12,320)			(13,461)
Amortization of deferred product manufacturing costs			1,709			2,026
Accrued profit sharing and royalty expense			58,445			44,789
Payments of profit sharing and royalty expense			(66,226)			(31,121)
Share-based compensation expense			8,323			6,133
Bad debt expense			-			125
Changes in assets and liabilities:
Accounts receivable			10,326			(39,141)
Inventory			(8,915)			(1,489)
Prepaid expenses and other assets			36,626			(15,389)
Accounts payable and accrued expenses			37,374			(2,815)
Other liabilities			3,591			2,487
Net cash provided by (used in) operating activities			79,329			(15,243)
Cash flows from investing activities:
Purchase of short-term investments			(104,869)			(180,274)
Maturities of short-term investments			177,331			239,998
Purchases of property, plant and equipment			(24,971)			(14,569)
Payment for product licensing rights			(55,000)			-
Net cash provided by (used in) investing activities			(7,509)			45,155
Cash flows from financing activities:
Tax benefit related to the exercise of employee stock options and restricted stock			2,338			5,641
Proceeds from exercise of stock options and ESPP			6,055			10,833
Net cash provided by financing activities			8,393			16,474
Net increase in cash and cash equivalents			80,213			46,386
Cash and cash equivalents, beginning of period			104,419			91,796
Cash and cash equivalents, end of period		$	184,632		$	138,182

Impax Laboratories, Inc.

Non-GAAP Financial Measures

Total adjusted net income, adjusted net income per diluted share and adjusted EBITDA are not measures of financial performance under generally accepted accounting principles (GAAP) and should not be construed as substitutes for, or superior to, GAAP net income, and net income per diluted share as a measure of financial performance. However, management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information to and facilitates analysis by investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculation of adjusted net income, adjusted net income per diluted share and adjusted EBITDA, may not be comparable to similarly designated measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment.

The following table reconciles reported net income to adjusted net income.

(Unaudited, amounts in millions, except per share data)		Three months ended June 30,						Six months ended June 30,
		2012			2011			2012			2011
Net Income		$	18.7		$	12.6		$	31.0		$	26.4
Adjusted to add (deduct):
Gross profit earned on Zomig® Agreement (a)			16.2			-			46.2			-
Amortization and acquisition-related costs (b)			14.3			-			14.3			-
Acquisition related in-process R&D (c)			1.6			-			1.6			-
Employee severance			1.9			-			1.9			0.8
Inventory adjustment			-			-			3.5			-
Lower of cost or market charge			-			-			1.7			-
Income tax effect			(11.7)			-			(24.2)			-
Adjusted net Income		$	41.0		$	12.6		$	76.0		$	27.2
Net Income excluding adjusted items per diluted share		$	0.60		$	0.19		$	1.12		$	0.40
Net Income per diluted share		$	0.27		$	0.19		$	0.46		$	0.39

Impax Laboratories, Inc.
Non-GAAP Financial Measures
The following table reconciles reported net income to adjusted EBITDA.
(Unaudited, amounts in millions)		Three months ended June 30,						Six months ended June 30,
		2012			2011			2012			2011
Net Income		$	18.7		$	12.6		$	31.0		$	26.4
Adjusted to add (deduct):
Interest income			(0.2)			(0.3)			(0.5)			(0.6)
Interest expense			0.4			0.0			0.5			0.0
Depreciation and other			3.9			4.2			7.6			8.4
Income taxes			11.3			5.2			17.5			12.4
EBITDA			34.1			21.7			56.1			46.6
Adjusted to add:
Gross profit earned on Zomig® Agreement (a)			16.2			-			46.2			-
Amortization and acquisition-related costs (b)			14.3			-			14.3			-
Acquisition related in-process R&D (c)			1.6			-			1.6			-
Employee severance			1.9			-			1.9			0.8
Inventory adjustment			-			-			3.5			-
Lower of cost or market charge			-			-			1.7			-
Share-based compensation			4.5			3.2			8.3			6.1
Adjusted EBITDA		$	72.6		$	24.9		$	133.6		$	53.5

(a)		On February 1, 2012, the Company announced that it had entered into the AstraZeneca License Agreement. As part of the AstraZeneca License Agreement, AstraZeneca granted to the Company an exclusive license to commercialize the tablet, orally disintegrating and nasal spray formulations of Zomig® (zolmitriptan) products for the treatment of migraine headaches in the United States and in certain U.S. territories. Under the terms of the AstraZeneca License Agreement, the Company agreed to pay AstraZeneca quarterly payments totaling $130.0 million during 2012 of which $30.0 million was paid in the second quarter ($55.0 million for the first six months ended June 30, 2012). During the specified product transition period pursuant to the AstraZeneca License Agreement, the Company will receive the benefit of the gross profit ($16.2 million and $46.2 million for the three months and six months ended June 30, 2012, respectively) from U.S. Zomig® sales by AstraZeneca commencing from January 1, 2012 and ending when the Company commences commercialization of the Zomig® products. The benefit of the gross profit received from AstraZeneca is recorded as a reduction of the $130.0 million to be paid by the Company to AstraZeneca during 2012 and is not reflected within the Company’s income.
(b)		Amortization and acquisition-related costs from the February 2012 AstraZeneca License Agreement.
(c)		Acquisition related in-process R&D from the June 2012 Development, Distribution and Supply Agreement with TOLMAR, Inc.

« First ‹ Previous 1 2 3 4 5 6 Next › Last »