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Akorn CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: AKRX

Thank you. Good morning, everyone, and thank you for joining our second quarter conference call. Before we discuss the operational and financial highlights for the quarter, we would first like to discuss an important matter.

After an extensive and further review of our first quarter financials, we determined that the purchase accounting relating to the acquisition of Certain Assets of Kilitch Drugs, that were acquired earlier this year, was incorrect, and required another set of review. We plan to reflect the corrected accounting in the amended 10-Q for the first quarter shortly. As a result, we are reporting preliminary results for the second quarter, and have preliminarily restated the earlier results with the estimated impact of the corrected purchase accounting. The final numbers will be reflected in the 10-Q to be filed later. We sincerely apologize for the error. However, the good news is that it does not affect our ongoing sales and ongoing operating results. I will let Tim discuss this in detail, and we’ll come back on the call to discuss the second quarter highlights. Tim?

Timothy Dick

Thank you, Raj. We released today a separate press release and 8-K announcing that on August 3 rd, 2012 the audit committee of Akorn’s board of directors, on the recommendation of management, concluded that the previously-issued financial statements contained in Akorn Inc.’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2012, should not be relied upon because of errors in those financial statements, and those financial statements would be restated to make the necessary accounting adjustments.

The previously disclosed 66.7 million purchase price for the acquisition of Kilitch Drug India Ltd. was originally recorded in the first quarter of 2012. Here in the second quarter of 2012, the company determined that its preliminary accounting for the acquisition of Kilitch Drugs India Limited, needed to be corrected, as certain items that had been previously capitalized as purchase price, needed to be either – needed to be expensed as either compensation earned from the achievement of acquisition related milestones, or other acquisition cost.

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