Impax Laboratories Management Discusses Q3 2010 Results – Earnings Call Transcript
Impax Laboratories, Inc. (
)
Q3 2010 Earnings Call
November 02, 2010; 11:00 am ET
Executives
Larry Hsu - President & Chief Executive Officer
Art Koch – Senior Vice President of Finance & Chief Financial Officer
Mark Donohue - Senior Director of Investor Relations & Corporate Communications
Analysts
Dewey Steadman - JPMorgan
David Amsellem - PiperJaffray
Louise Chen - Collins Stewart
Corey Davis - Jefferies
Sumant Kulkarni - Bank of America
Elliot Wilbur - Needham & Company
Michael Tong - Wells Fargo
Tim Chiang - CRT Capital
Operator
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Impax Laboratories Inc. Q2 2010 Earnings Call Transcript
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Impax Laboratories Inc. Q1 2010 Earnings Call Transcript
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BioScrip CEO Discusses Q3 2010 Results - Earnings Call Transcript
Good day and welcome to the Impax Laboratories Incorporated third quarter 2010 earnings conference call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Donohue, please go ahead sir.
Mark Donohue
Thank you, Rachel. Good morning everyone. Welcome to our third quarter 2010 earnings conference call and webcast at www.impaxlabs.com. On today’s call we have with us, Dr. Larry Hsu, our President and Chief Executive Officer, and Art Koch, our Chief Financial Officer. Following their prepared remarks, both will be available to take any questions you may have as time permits.
Should you have any questions after the call, please feel free to telephone myself at Investor Relations at 215-933-3526. A replay of today’s call will be available starting at 2:00 PM today through November 9th. Please refer to our third quarter earnings release for replay details.
Our discussion today may include certain forward-looking statements and actual results may differ from those presented here. The factors that could cause such a difference are outlined in our SEC filings and on our website. In addition, our discussion today includes certain non-GAAP measures as defined by the SEC. Please refer to our earnings release and reconciliation tables posted on our website.
With that, it’s a pleasure to turn our call over to Dr. Larry Hsu.
Larry Hsu
Thank you, good morning and well thanks for joining us. Our third quarter performance was driven by continuous strong demand for several of our global label products. Total adjusted revenue excluding the impact of the change in revenue recognition discussed in the earnings release this morning includes approximately 40% to $180 million lead by our generic Adderall XR, and the fenofibrate products.
Adjusted EBITDA includes a 78% to almost $28 million from $16 million last year. This solid result lead to a $7 million increase in adjusted net income and a $0.09 or 60% increase in earnings per diluted share.
Sales within our global business have benefited since the launch of our generic Adderall XR in October of 2009. It continues to be an important component of our generic business and we are working hard to build a significant and a lasting customer relationship. However, ongoing supply issue with our supplier continues to constrain our ability to fill strong customer demand leading to lower than expected sales and a market share. Keep in mind that we will always be dependent on supply and hitting our target depends on consistent product supply.
Demand from our customers has remained very strong since launch. Our
supply provider to us has significantly deteriorated. Since our launch in October 2009, our total sales over the first two quarters aggregated close to $200 million. Over the past two quarters, our total sales are approximately 50% of these levels as we have experienced supply issue and have been unable to meet customer demand.
We’re encouraged with our receipt of overdue deliverers in the third quarter, and we’ve began a new initiative to retain some of the customers we had lost due to our inability to supply. Since then however, other shipments we’ll promise have come in late and our supplier has told us recently to expect lower volume than previously committed for the balance of the 2010.
We had to severely allocate product, we have on hand to protect our customers from stocking out and we have had to
seize our new business effort. We have demonstrated significant demand over current levels. Based on well with an additional description or disruption and forecast, we believe we have no alternative to protect the interest of our customer and shareholders, but to initiate litigation.
We are checking to enforce
Shire’s
application to supply impacts with product pursuant to our agreement. For the first nine months of 2010, we generated adjusted revenue of $584 million and adjusted earnings per share of $2.81 far exceeding any other years in our history. This strong performance has resulted in the significant increase in our cash position to more than $358 million that we’ve plan to reinvest in vital strategic initiatives to continue to drive near and the long-term growth.
We have been very disciplined in our M&A approach checking deals that are strategically appropriate driving toward high value product, technologies, or business with meaningful R&D capabilities that are financially attractive with manageable execution risk.
We remained very active on the business development front, as we are pursuing generic and brand opportunities to acquire product, technology, and companies with compelling business strategies to drive near and the long-term growth.
During the quarter, we announced a collaboration agreement with Perrigo, with respect to the development and commercialization of two topical drug products. This marks our second entry this year into alternative dosage forms as we begin to execute our strategy of diversifying our product base.
We continue to aggressively explore
similar type of opportunities as one component of our M&A activities. We look forward to updating you on our business development activities as we continue our due diligence on numerous prospects.
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