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Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full Year Ended

Thursday, March 12, 2020 6 min read
Key Takeaway: Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full Year Ended December 31, 2019 Reports Net Revenues of $83.4 Million for the Three Months Ended December 31, 2019 RANCHO CUCAMONGA, CA March 12, 2020 Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (

Full Press Release Details

Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full Year Ended December 31, 2019
Reports Net Revenues of $83.4 Million for the Three Months Ended December 31, 2019
RANCHO CUCAMONGA, CA March 12, 2020 Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) ( Amphastar or the Company ) today reported results for the three months and full year ended December 31, 2019.
Fourth Quarter Highlights
Full Year Highlights
Dr. Jack Zhang, Amphastar's Chief Executive Officer, commented: We finished 2019 with very strong sales of Primatene Mist, with fourth quarter sales essentially equaling sales in the previous three quarters combined. Additionally, we have made great progress with our pipeline of product candidates, as we continue to move forward with clinical trials for both our insulin and inhalation products. In addition, the FDA accepted two more of our ANDAs.
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
(in thousands, except per share data)
Net revenues $ 83,383 $ 89,690 $ 322,357 $ 294,666
GAAP net income (loss) attributable to Amphastar $ (1,026) $ 1,867 $ 48,939 $ (5,738)
Adjusted non-GAAP net income attributable to Amphastar * $ 3,639 $ 6,231 $ 17,810 $ 10,399
GAAP diluted EPS attributable to Amphastar shareholders $ (0.02) $ 0.04 $ 0.98 $ (0.12)
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders * $ 0.07 $ 0.13 $ 0.36 $ 0.21
* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders are non-GAAP financial measures. Please see the discussion in the section entitled Non-GAAP Financial Measures and the reconciliation of GAAP to non-GAAP financial measures in Table III of this press release.
Fourth Quarter Results
Three Months Ended
December 31, Change
2019 2018 Dollars %
(in thousands)
Net revenues:
Lidocaine $ 12,282 $ 13,661 $ (1,379) (10) %
Phytonadione 12,309 12,942 (633) (5) %
Primatene Mist 9,002 3,574 5,428 152 %
Naloxone 8,951 7,703 1,248 16 %
Enoxaparin 8,800 19,085 (10,285) (54) %
Medroxyprogesterone 6,062 7,448 (1,386) (19) %
Epinephrine 4,311 1,264 3,047 241 %
Other finished pharmaceutical products 16,280 17,257 (977) (6) %
Total finished pharmaceutical products net revenues $ 77,997 $ 82,934 $ (4,937) (6) %
API 5,386 6,756 (1,370) (20) %
Total net revenues $ 83,383 $ 89,690 $ (6,307) (7) %
Changes in net revenues were primarily driven by:
Three Months Ended
December 31, Change
2019 2018 Dollars %
(in thousands)
Net revenues $ 83,383 $ 89,690 $ (6,307) (7) %
Cost of revenues 50,002 55,001 (4,999) (9) %
Gross profit $ 33,381 $ 34,689 $ (1,308) (4) %
as % of net revenues 40% 39%
Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:
Three Months Ended
December 31, Change
2019 2018 Dollars %
(in thousands)
Selling, distribution and marketing $ 3,476 $ 2,596 $ 880 34 %
General and administrative 10,505 13,814 (3,309) (24) %
Research and development 19,644 16,734 2,910 17 %
Year Ended December 31, Change
2019 2018 Dollars %
(in thousands)
Net revenues:
Lidocaine $ 46,013 $ 43,328 $ 2,685 6 %
Phytonadione 45,786 41,897 3,889 9 %
Enoxaparin 42,695 53,371 (10,676) (20) %
Naloxone 34,761 37,195 (2,434) (7) %
Medroxyprogesterone 27,850 24,071 3,779 16 %
Primatene Mist 18,065 3,574 14,491 405 %
Epinephrine 13,885 10,055 3,830 38 %
Other finished pharmaceutical products 72,945 57,568 15,377 27 %
Total finished pharmaceutical products net revenues $ 302,000 $ 271,059 $ 30,941 11 %
API 20,357 23,607 (3,250) (14) %
Total net revenues $ 322,357 $ 294,666 $ 27,691 9 %
Changes in net revenues were primarily driven by:
Year Ended December 31, Change
2019 2018 Dollars %
(in thousands)
Net revenues $ 322,357 $ 294,666 $ 27,691 9 %
Cost of revenues 190,434 187,681 2,753 1 %
Gross profit $ 131,923 $ 106,985 $ 24,938 23 %
as % of net revenues 41% 36%
Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:
Year Ended December 31, Change
2019 2018 Dollars %
(in thousands)
Selling, distribution and marketing $ 12,830 $ 8,156 $ 4,674 57 %
General and administrative 50,279 49,888 391 1 %
Research and development 68,853 57,564 11,289 20 %
Year Ended December 31, Change
2019 2018 Dollars %
(in thousands)
Non-operating income (expense), net $ 60,267 $ (1,303) $ 61,570 NM
Cash flow provided by operating activities for the year ended December 31, 2019, was $41.8 million.
Pipeline Information
The Company currently has seven ANDAs filed with the FDA targeting products with a market size of approximately $1.9 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and nine generic products in development targeting products with a market size of approximately $12 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2019. The Company's proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing four other proprietary products, which include injectable and intranasal dosage forms.
Amphastar's Chinese subsidiary, ANP, currently has 14 Drug Master Files, or DMFs, on file with the FDA and is developing four additional DMFs.
Amphastar is a specialty pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically-challenging generic and proprietary injectable, inhalation, and intranasal products. Additionally, the Company sells insulin API products. Most of the Company's finished products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. More information and resources are available at www.amphastar.com.
Amphastar's logo and other trademarks or service marks of Amphastar, including, but not limited to Primatene , Amphadase and Cortrosyn , are the property of Amphastar.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ( GAAP ), the Company is disclosing non-GAAP financial measures when providing financial results. The Company 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 GAAP. As a result, the Company is disclosing certain non-GAAP results, including (i) Adjusted non-GAAP net income (loss) attributed to Amphastar and (ii) Adjusted non-GAAP diluted EPS attributed to Amphastar's shareholders, which exclude amortization expense, share-based compensation, impairment charges, and legal settlements, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance because the Company's management uses these measures internally for forecasting, budgeting, and measuring its operating performance. Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures set forth below 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.
Conference Call Information
The Company will hold a conference call to discuss its financial results today, March 12, 2020, at 2:00 p.m. Pacific Time.
To access the conference call, dial toll-free (877) 881-2595 or (315) 625-3083 for international callers, five minutes before the conference. The passcode for the conference call is 4863509.
The call can also be accessed on the Investors page on the Company's website at www.amphastar.com.
Forward Looking Statements
All statements in this press release and in the conference call referenced above that are not historical are forward-looking statements, including, among other things, statements relating to the Company's expectations regarding future financial performance, backlog, sales and marketing of its products, market size and growth, the timing of FDA filings or approvals, including the DMFs of ANP, the timing of product launches, acquisitions and other matters related to its pipeline of product candidates, its share buyback program and other future events. These statements are not historical facts but rather are based on Amphastar's historical performance and its current expectations, estimates, and projections regarding Amphastar's business, operations and other similar or related factors. Words such as may, might, will, could, would, should, anticipate, predict, potential, continue, expect, intend, plan, project, believe, estimate, and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Amphastar's control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Amphastar's filings with the Securities and Exchange Commission. You can locate these reports through the Company's website at http://ir.amphastar.com and on the SEC's website at www.sec.gov. Amphastar undertakes no obligation to revise or update information in this press release or the conference call referenced above to reflect events or circumstances in the future, even if new information becomes available or if subsequent events cause Amphastar's expectations to change.
Contact Information:
Amphastar Pharmaceuticals, Inc.
Chief Financial Officer
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Statement of Operations
(Unaudited; in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
Net revenues $ 83,383 $ 89,690 $ 322,357 $ 294,666
Cost of revenues 50,002 55,001 190,434 187,681
Gross profit 33,381 34,689 131,923 106,985
Operating expenses:
Selling, distribution, and marketing 3,476 2,596 12,830 8,156
General and administrative 10,505 13,814 50,279 49,888
Research and development 19,644 16,734 68,853 57,564
Total operating expenses 33,625 33,144 131,962 115,608
Income (loss) from operations (244) 1,545 (39) (8,623)
Non-operating income (expenses), net 1,430 (956) 60,267 (1,303)
Income (loss) before income taxes 1,186 589 60,228 (9,926)
Income tax provision (benefit) 431 (1,129) 13,723 (3,266)
Net income (loss) $ 755 $ 1,718 $ 46,505 $ (6,660)
Net income (loss) attributable to non-controlling interests $ 1,781 $ (149) $ (2,434) $ (922)
Net income (loss) attributable to Amphastar $ (1,026) $ 1,867 $ 48,939 $ (5,738)
Net income (loss) per share attributable to Amphastar shareholders:
Basic $ (0.02) $ 0.04 $ 1.04 $ (0.12)
Diluted $ (0.02) $ 0.04 $ 0.98 $ (0.12)
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:
Basic 46,840 46,268 46,982 46,395
Diluted 46,840 49,181 49,907 46,395
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet
(Unaudited; in thousands, except share data)
December 31, December 31,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $ 73,685 $ 86,337
Restricted cash 1,865 1,865
Short-term investments 11,675 2,831
Restricted short-term investments 2,290 2,290
Accounts receivable, net 45,376 52,163
Inventories 110,501 69,322
Income tax refunds and deposits 311 49
Prepaid expenses and other assets 9,538 5,485
Total current assets 255,241 220,342
Property, plant, and equipment, net 233,856 210,418
Finance lease right-of-use assets 887
Operating lease right-of-use assets 18,805
Goodwill and intangible assets, net 41,153 42,267
Other assets 11,156 9,918
Deferred tax assets 25,873 30,618
Total assets $ 586,971 $ 513,563
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 77,051 $ 87,418
Income taxes payable 2,042 1,187
Current portion of long-term debt 7,741 18,229
Current portion of operating lease liabilities 3,175
Total current liabilities 90,009 106,834
Long-term reserve for income tax liabilities 3,425 415
Long-term debt, net of current portion 39,394 31,984
Long-term operating lease liabilities, net of current portion 16,315
Deferred tax liabilities 867 1,031
Other long-term liabilities 9,433 8,940
Total liabilities 159,443 149,204
Commitments and contingencies
Stockholders' equity:
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding
Common stock: par value $0.0001; 300,000,000 shares authorized; 52,495,483 and 46,576,968 shares issued and outstanding as of December 31, 2019 and 51,438,675 and 46,631,118 shares issued and outstanding as of December 31, 2018, respectively 5 5
Additional paid-in capital 367,305 344,434
Retained earnings 116,370 67,485
Accumulated other comprehensive loss (4,687) (4,013)
Treasury stock (97,627) (75,476)
Total Amphastar Pharmaceuticals, Inc. stockholders' equity 381,366 332,435
Non-controlling interests 46,162 31,924
Total equity 427,528 364,359
Total liabilities and stockholders' equity $ 586,971 $ 513,563
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
GAAP net income (loss) $ 755 $ 1,718 $ 46,505 $ (6,660)
Adjusted for:
Intangible amortization 260 265 1,037 1,987
Share-based compensation 4,296 3,910 17,296 16,680
Impairment of long-lived assets 171 1,257 365 1,647
Gain on litigation settlement (59,900)
Income tax provision (benefit) on pre-tax adjustments 72 (1,004) 10,494 (4,044)
Non-GAAP net income $ 5,554 $ 6,146 $ 15,797 $ 9,610
Non-GAAP net income (loss) attributable to non-controlling interests $ 1,915 $ (85) $ (2,013) $ (789)
Non-GAAP net income attributable to Amphastar $ 3,639 $ 6,231 $ 17,810 $ 10,399
Non-GAAP net income per share attributable to Amphastar shareholders:
Basic $ 0.08 $ 0.13 $ 0.38 $ 0.22
Diluted $ 0.07 $ 0.13 $ 0.36 $ 0.21
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:
Basic 46,840 46,268 46,982 46,395
Diluted 49,242 49,181 49,907 48,830
Three Months Ended December 31, 2019
Selling, General Research Non-operating Income Non-controlling
Cost of distribution and and income tax provision interest
revenue and marketing administrative development (expense), net (benefit) adjustment
GAAP $ 50,002 $ 3,476 $ 10,505 $ 19,644 $ 1,430 $ 431 $ 1,781
Intangible amortization (226) (34) 11
Share-based compensation (880) (103) (2,961) (352) 98
Impairment of long-lived assets (30) (141) 58
Income tax provision (benefit) on pre-tax adjustments (72) (33)
Non-GAAP $ 48,866 $ 3,373 $ 7,369 $ 19,292 $ 1,430 $ 359 $ 1,915
Reconciliation of Non-GAAP Measures (continued)
Three Months Ended December 31, 2018
Selling, General Research Non-operating Income Non-controlling
Cost of distribution and and income tax provision interest
revenue and marketing administrative development (expense), net (benefit) adjustment
GAAP $ 55,001 $ 2,596 $ 13,814 $ 16,734 $ (956) $ (1,129) $ (149)
Intangible amortization (224) (41) 11
Share-based compensation (898) (86) (2,602) (324) 62
Impairment of long-lived assets (1,010) (5) (242) 1
Income tax provision (benefit) on pre-tax adjustments 1,004 (10)
Non-GAAP $ 52,869 $ 2,510 $ 11,166 $ 16,168 $ (956) $ (125) $ (85)
Year Ended December 31, 2019
Selling, General Research Non-operating Income Non-controlling
Cost of distribution and and income tax provision interest
revenue and marketing administrative development (expense), net (benefit) adjustment
GAAP $ 190,434 $ 12,830 $ 50,279 $ 68,853 $ 60,267 $ 13,723 $ (2,434)
Intangible amortization (895) (142) 45
Share-based compensation (3,819) (388) (11,538) (1,551) 355
Impairment of long-lived assets (99) (164) (102) 113
Gain on litigation settlement (59,900)
Income tax provision (benefit) on pre-tax adjustments (10,494) (92)
Non-GAAP $ 185,621 $ 12,442 $ 38,435 $ 67,200 $ 367 $ 3,229 $ (2,013)
Year Ended December 31, 2018
Selling, General Research Non-operating Income Non-controlling
Cost of distribution and and income tax provision interest
revenue and marketing administrative development (expense), net (benefit) adjustment
GAAP $ 187,681 $ 8,156 $ 49,888 $ 57,564 $ (1,303) $ (3,266) $ (922)
Intangible amortization (1,826) (161) 22
Share-based compensation (3,923) (383) (10,853) (1,521) 130
Impairment of long-lived assets (1,087) (9) (551) 2
Income tax provision (benefit) on pre-tax adjustments 4,044 (21)
Non-GAAP $ 180,845 $ 7,773 $ 38,865 $ 55,492 $ (1,303) $ 778 $ (789)
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Last updated: Mar 12, 2020