Selling, general and administrative (SG&A) expenses in the fourth quarter of 2012 increased by approximately $4.2 to $11.1 million, compared to $6.9 million for the fourth quarter of 2011. The increase was primarily due to the hiring of the Company’s new gastroenterology sales force, and expenses related to the development of the Company’s OTC cough and cold product candidate, operating expenses related to Pernix Manufacturing, an increase in stock compensation expense, expenses associated with the acquisitions of Cypress Pharmaceuticals, Hawthorn Pharmaceuticals, and Somaxon Pharmaceuticals as well as an increase in corporate infrastructure costs to support the Company’s growth objectives.
Depreciation and amortization expense was $ 0.9 million for the fourth quarter of 2012, compared to $0.6 million for the fourth quarter of 2011. The Company recognized an income tax benefit of $204,000 for the fourth quarter of 2012, compared to income tax expense of $2.1 million in the fourth quarter of 2011.
For the year ended December 31, 2012, net revenues increased 1% to $61.3 million, compared to $60.6 million for the prior year period. Total net product revenues consisted of 55% branded products and 36% generic products for the full year.
The net loss for the year ended December 31, 2012 was approximately $(1.4) million, or $(0.05) per basic and diluted share, compared to net income of approximately $8.3 million, or $0.35 per basic and $0.34 per diluted share, for the prior year period.Adjusted EBITDA was $5.9 million for the year ended December 31, 2012, compared to adjusted EBITDA of $17.4 million for the prior year period. See the table at the end of this press release for a reconciliation of net income to EBITDA and adjusted EBITDA. For the full year 2012, acquisition-related expenses were $1.0 million. Stock compensation expense increased to $3.3 million in 2012 as compared to $1.6 million in 2011 primarily related to a restricted stock issuance in March and December 2012. In total, these investments impacted adjusted EBITDA by approximately $4.3 million for the quarter.