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Pernix Therapeutics Reports Fourth Quarter And Full Year 2012 Financial Results

Additional information about Pernix is available on the Company’s website located at www.pernixtx.com.

Non-GAAP Financial Measures

Pernix is disclosing non-GAAP financial measures in this press release. Primarily due to acquisitions, Pernix believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with U.S. generally accepted accounting principles (GAAP). In addition to disclosing its financial results determined in accordance with GAAP, Pernix is disclosing non-GAAP results that exclude items such as amortization expense and certain other expense and revenue items in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance. Whenever Pernix uses a non-GAAP measure, it will provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures set forth herein and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Cautionary Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions are forward-looking statements. Because these statements reflect the Company’s current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors, as more fully described under the caption "Risk Factors" in our Form 10-K, Form 10-Q and Form 8-K filings with the Securities and Exchange Commission and as otherwise enumerated herein or therein, could affect the Company’s future financial results and could cause actual results to differ materially from those expressed in forward-looking statements contained in the Company’s Annual Report on Form 10-K. The forward-looking statements in this press release are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results. The Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

 
PERNIX THERAPEUTICS HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
   
December 31, December 31,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 23,022,821 $ 34,551,180
Accounts receivable, net 36,647,087 20,601,360
Inventory, net 22,014,405 6,261,162
Prepaid expenses and other current assets 3,888,117 2,144,203
Prepaid income taxes 2,024,411
Deferred income tax assets - current   8,118,500     4,552,000  
Total current assets 95,715,341 68,109,905
Property and equipment, net 6,946,944 911,948
Other assets:
Investments 5,710,526 4,451,831
Goodwill 37,160,911 1,406,591
Intangible assets, net 104,054,431 7,469,913
Other long-term assets   1,858,534     213,783  
Total assets $ 251,446,687   $ 82,563,971  
 
LIABILITIES
Current liabilities:
Accounts payable $ 5,045,488 $ 2,987,913
Accrued personnel expense 2,881,967 2,044,121
Accrued allowances 30,054,551 17,006,409
Income taxes payable 585,931
Other accrued expenses 5,548,084 1,565,918
Contracts payable and other obligations 8,130,664 1,290,000
Debt, short term 2,286,513
Line of Credit       6,000,000  
Total current liabilities 53,947,267 31,480,292
Long-term liabilities
Contracts payable and other obligations 7,765,511 600,000
Debt - long term 41,349,563
Deferred income taxes   35,535,500     860,000  
Total liabilities   138,597,841     32,940,292  
Commitments and contingencies
 
Temporary Equity
Common stock subject to repurchase (4,427,084 shares) 34,309,901
 
STOCKHOLDERS' EQUITY

Preferred stock $.01 par value, 10,000,000 shares authorized, no shares outstandingCommon stock, $.01 par value, 90,000,000 shares authorized, 35,723,161 and 27,820,004 issued, and 34,030,351 and 25,749,137 outstanding at December 31, 2012 and December 31, 2011, respectively

296,033 257,491
Treasury stock, at cost (2,072,810 and 2,070,867 shares held at December 31, 2012 and December 31, 2011, respectively) (3,772,410 ) (3,751,890 )
Additional paid-in capital 58,606,942 30,185,292
Retained earnings 20,433,362 21,843,418
Other comprehensive income   2,975,118     1,089,368  
Total stockholders' equity   78,538,945     49,623,679  
Total liabilities and stockholders' equity $ 251,446,687   $ 82,563,971  
 
 
PERNIX THERAPEUTICS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
   
Three Months Ended December 31,

 Year Ended December 31, 

2012   2011 2012   2011
Net sales $ 18,197,042 $ 21,402,911 $ 61,312,559 $ 60,606,855
Costs and expenses:
Cost of sales 7,515,434 7,474,799 23,376,895 20,921,233
Selling, general and administrative expenses 11,149,140 6,982,488 35,451,653 22,537,966
Research and development expense 219,971 204,630 731,665 922,432
 
Loss from the operations of the joint venture 122,486 240,195 814,351
Depreciation and amortization expense   880,894     612,067     3,201,483     2,302,894  
 
Total costs and expenses   19,765,439     15,396,470     63,001,891     47,498,876  
 
Income (loss) from operations   (1,568,397 )   6,006,441     (1,689,332 )   13,107,979  
 
Other income (expense):
Interest expense, net (34,847 ) (41,414 ) (94,823 ) (171,378 )
 
Income (loss) before income taxes (1,603,244 ) 5,965,027 (1,784,155 ) 12,936,601
Income tax provision (benefit)   (203,999 )   2,089,000     (373,999 )   4,589,000  
 
Net income (loss) $ (1,399,245 ) $ 3,876,027 $ (1,410,156 ) $ 8,347,601
 
Unrealized gain on securities, net of income tax (401,124 ) 1,089,368 1,885,750 1,089,368
               
Comprehensive income $ (1,800,369 )   4,965,395     475,594     9,436,969  
 
Net income (loss) per share, basic $ (0.05 ) $ 0.15   $ (0.05 ) $ 0.35  
Net income (loss) per share, diluted $ (0.05 ) $ 0.15   $ (0.05 ) $ 0.34  
 
Weighted-average common shares, basic   29,254,667     25,738,003     28,146,207     23,990,734  
 
Weighted-average common shares, diluted   29,254,667     26,516,582     28,146,207     24,460,291  
 

Supplemental Financial Information

The following table presents a reconciliation of Pernix’s net income to EBITDA and adjusted EBITDA. The Company defines EBITDA as net income plus interest, income tax expense, depreciation and amortization and presents these measures to assist investors in evaluating Pernix’s operating performance and comparing the Company’s results with those of other companies. Adjusted EBITDA further eliminates the effect certain non-recurring expenses and certain non-cash expenses. EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for net income.

 
PERNIX THERAPEUTICS HOLDINGS, INC.
EBITDA Reconciliation Table
 
  Three Months Ended December 31,  

 Year Ended December 31, 

2012   2011 2012   2011
GAAP Net Income (loss) $ (1,399,245 ) $ 3,876,025 $ (1,410,156 ) $ 8,347,601
Plus:
Income tax expense (benefit) $ (203,999 ) 2,089,000 (373,999 ) 4,589,000
Depreciation and amortization 880,894 612,067 3,201,483 2,302,894
Interest expense, net   34,847     41,414   94,823     171,378
EBITDA $ (687,503 ) $ 6,618,506 $ 1,512,151   $ 15,410,873
 
Adjustments to EBITDA:
Impairment Charge 380,000 380,000
Stock-based compensation 897,461 586,495 3,339,300 1,595,830
Acquisition expenses   776,816       1,000,947    
Adjusted EBITDA $ 986,774   $ 7,585,001 $ 5,852,398   $ 17,386,703




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