Amneal Reports Third Quarter 2024 Financial Results

‒ Q3 2024 Net Revenue of $702 million; GAAP Net Loss of $0.2 million; Diluted Loss per Share of $0.00 ‒

‒ Adjusted EBITDA of $158 million; Adjusted Diluted EPS of $0.16 ‒

‒ Affirms 2024 Full Year Guidance ‒

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX) (“Amneal” or the “Company”) today announced its results for the third quarter ended September 30, 2024.

“Q3 was an excellent quarter where we continued to drive strong financial results across our diversified business and we announced three strategic actions to solidify our long-term growth. First, we launched CREXONT® for the treatment of Parkinson’s disease. Second, we announced our collaboration with Metsera, Inc. to leverage Amneal’s expertise and supply next-generation medicines for obesity and metabolic diseases. Third, we expanded our deep pipeline by in-licensing a new high-value biosimilar. We look forward to building on our momentum and continuing to create value for all our key stakeholders,” said Chirag and Chintu Patel, Co-Chief Executive Officers.

Third Quarter 2024 Results

Net revenue in the third quarter of 2024 was $702 million, an increase of 13% compared to $620 million in the third quarter of 2023. Generics net revenue increased 9% driven by strong performance of new product launches and biosimilars. Specialty net revenue increased 19% driven by promoted products in neurology and endocrinology, including the recent launches of CREXONT® and ONGENTYS® for Parkinson’s disease. AvKARE net revenue increased 21% driven by growth across its distribution and government label sales channels.

Net loss attributable to Amneal Pharmaceuticals, Inc. was $0.2 million in the third quarter of 2024 compared to net income of $10 million in the third quarter of 2023, primarily due to higher interest expense.

Adjusted EBITDA in the third quarter of 2024 was $158 million, an increase of 2% compared to the third quarter of 2023, reflective of strong revenue performance and higher gross margins, partially offset by a $20 million research and development milestone payment associated with the Company’s exclusive license of Omalizumab during the third quarter of 2024.

Diluted loss per share in the third quarter of 2024 was $0.00 compared to diluted income per share of $0.06 for the third quarter of 2023, as higher interest expense reduced net income. Adjusted diluted earnings per share in the third quarter of 2024 was $0.16 compared to $0.19 for the third quarter of 2023 due to the aforementioned factor.

The Company presents GAAP and adjusted (non-GAAP) quarterly results. Please refer to the “Non-GAAP Financial Measures” section for more information. In the tables provided below, GAAP to non-GAAP reconciliations are presented.

Affirming Previously Announced Increased 2024 Full Year Guidance

Net revenue

$2.70 billion - $2.80 billion

Adjusted EBITDA (1)

$610 million - $630 million

Adjusted diluted EPS (2)

$0.57 - $0.63

Operating cash flow (3)

$280 million - $320 million

Capital expenditures

$60 million - $70 million

(1)

Includes 100% of Adjusted EBITDA from the AvKARE acquisition.

(2)

Accounts for 35% non-controlling interest in AvKARE. Guidance assumes approximately 320 million weighted-average diluted shares outstanding for the year ending December 31, 2024.

(3)

Does not contemplate one-time and non-recurring items such as legal settlements and other discrete items.

Amneal’s 2024 estimates are based on management’s current expectations, including with respect to prescription trends, pricing levels, the timing of future product launches, the costs incurred and benefits realized of restructuring activities, and our long-term strategy. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company cannot provide a reconciliation between non-GAAP projections and the most directly comparable measures in accordance with GAAP without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses and benefits, asset impairments, legal settlements, and other gains and losses. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results.

Conference Call Information

Amneal will host a conference call and live webcast at 8:30 am Eastern Time today, November 8, 2024, to discuss its results. The live webcast and presentation will be accessible through the Investor Relations section of the Company’s website at https://investors.amneal.com. To access the call through a conference line, dial [phone] (in the U.S.) with access code 088741. A replay of the conference call will be posted shortly after the call and will be available for seven days. For a list of toll-free international numbers, visit this website: https://www.netroadshow.com/events/global-numbers?confId=68226.

About Amneal

Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX), headquartered in Bridgewater, NJ, is a global pharmaceuticals company. We make healthy possible through the development, manufacturing, and distribution of a diverse portfolio of over 280 generic and specialty pharmaceuticals, primarily within the United States. In its Generics segment, the Company is expanding across a broad range of complex product categories and therapeutic areas, including injectables and biosimilars. In its Specialty segment, Amneal has a growing portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders, with a pipeline focused on unmet needs. Through its AvKARE segment, the Company is a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. For more information, please visit www.amneal.com.

Cautionary Statement on Forward-Looking Statements

Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Such forward-looking statements include statements regarding management’s intentions, plans, beliefs, expectations, financial results, or forecasts for the future, including among other things: discussions of future operations; expected or estimated operating results and financial performance; and statements regarding our positioning, including our ability to drive sustainable long-term growth, and other non-historical statements. Words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and similar words, or the negatives thereof, are intended to identify estimates and forward-looking statements.

The reader is cautioned not to rely on these forward-looking statements. These forward-looking statements are based on current expectations of future events, including with respect to future market conditions, company performance and financial results, operational investments, business prospects, new strategies and growth initiatives, the competitive environment, and other events. If the underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of the Company.

Such risks and uncertainties include, but are not limited to: our ability to successfully develop, license, acquire and commercialize new products on a timely basis; the competition we face in the pharmaceutical industry from brand and generic drug product companies, and the impact of that competition on our ability to set prices; our ability to obtain exclusive marketing rights for our products; our revenues are derived from the sales of a limited number of products, a substantial portion of which are through a limited number of customers; the impact of a prolonged business interruption within our supply chain; the continuing trend of consolidation of certain customer groups; our dependence on third-party suppliers and distributors for raw materials for our products and certain finished goods; legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives; our dependence on information technology systems and infrastructure and the potential for cybersecurity incidents; our ability to attract, hire and retain highly skilled personnel; risks related to federal regulation of arrangements between manufacturers of branded and generic products; our reliance on certain licenses to proprietary technologies from time to time; the significant amount of resources we expend on research and development; the risk of claims brought against us by third parties; risks related to changes in the regulatory environment, including U.S. federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws; changes to Food and Drug Administration product approval requirements; the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers; our dependence on third-party agreements for a portion of our product offerings; our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, and the impact of interest rate fluctuations on such indebtedness; our potential expansion into additional international markets subjecting us to increased regulatory, economic, social and political uncertainties; our ability to identify, make and integrate acquisitions or investments in complementary businesses and products on advantageous terms; the impact of global economic, political or other catastrophic events; our obligations under a tax receivable agreement may be significant; and the high concentration of ownership of our Class A common stock and the fact that we are controlled by the Amneal Group. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements included herein speak only as of the date hereof and we undertake no obligation to revise or update such statements to reflect the occurrence of events or circumstances after the date hereof.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted EPS, which are intended as supplemental measures of the Company’s performance that are not required by or presented in accordance with GAAP. Adjusted diluted EPS reflects diluted earnings per share based on adjusted net income (loss), which is net income (loss) adjusted to (A) exclude (i) non-cash interest, (ii) GAAP provision for (benefit from) income taxes, (iii) amortization, (iv) stock-based compensation expense, (v) acquisition, site closure expenses, and idle facility expenses, (vi) restructuring and other charges, (vii) (credit) charges related to certain legal matters, including interest, net, (viii) asset impairment charges, (ix) change in fair value of contingent consideration, (x) increase in tax receivable agreement liability, (xi) system implementation expense, (xii) other and (xiii) net income attributable to non-controlling interests not associated with our Class B common stock, and (B) include non-GAAP provision for income taxes. Non-GAAP adjusted diluted EPS for the three and nine months ended September 30, 2024 was calculated using the weighted average fully diluted shares outstanding of Class A common stock. Non-GAAP adjusted diluted EPS for the three and nine months ended September 30, 2023 was calculated using the weighted average diluted shares outstanding of Class A common stock and assuming all shares of Class B common stock were converted to shares of Class A common stock as of January 1, 2023.

Management uses these non-GAAP measures internally to evaluate and manage the Company’s operations and to better understand its business because they facilitate a comparative assessment of the Company’s operating performance relative to its performance based on results calculated under GAAP. These non-GAAP measures also isolate the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. The compensation committee of the Company’s board of directors also uses certain of these measures to evaluate management’s performance and set its compensation. The Company believes that these non-GAAP measures also provide useful information to investors regarding certain financial and business trends relating to the Company’s financial condition and operating results facilitates an evaluation of the financial performance of the Company and its operations on a consistent basis. Providing this information therefore allows investors to make independent assessments of the Company’s financial performance, results of operations and trends while viewing the information through the eyes of management.

These non-GAAP measures are subject to limitations. The non-GAAP measures presented in this release may not be comparable to similarly titled measures used by other companies because other companies may not calculate one or more in the same manner. Additionally, the non-GAAP performance measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements; do not reflect changes in, or cash requirements for, working capital needs; and do not reflect interest expense, or the requirements necessary to service interest or principal payments on debt. Further, our historical adjusted results are not intended to project our adjusted results of operations or financial position for any future period. To compensate for these limitations, management presents and considers these non-GAAP measures in conjunction with the Company’s GAAP results; no non-GAAP measure should be considered in isolation from or as alternatives to any measure determined in accordance with GAAP. Readers should review the reconciliations included below, and should not rely on any single financial measure to evaluate the Company’s business.

A reconciliation of each historical non-GAAP measure to the most directly comparable GAAP measure is set forth below.

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Operations

(unaudited; $ in thousands, except per share amounts)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Net revenue

$

702,468

 

$

620,040

 

$

2,063,439

 

$

1,776,626

Cost of goods sold

 

432,910

 

 

387,509

 

 

1,305,874

 

 

1,145,888

Gross profit

 

269,558

 

 

232,531

 

 

757,565

 

 

630,738

Selling, general and administrative

 

118,692

 

 

113,006

 

 

347,749

 

 

320,672

Research and development

 

61,097

 

 

41,375

 

 

136,449

 

 

117,864

Intellectual property legal development expenses

 

1,967

 

 

886

 

 

3,993

 

 

3,350

Restructuring and other charges

 

172

 

 

1,043

 

 

1,862

 

 

1,635

Change in fair value of contingent consideration

 

(1,030)

 

 

3,120

 

 

(930)

 

 

(787)

(Credit) charges related to legal matters, net

 

(149)

 

 

(2,620)

 

 

94,909

 

 

(1,039)

Other operating expense (income)

 

—

 

 

73

 

 

—

 

 

(1,138)

Operating income

 

88,809

 

 

75,648

 

 

173,533

 

 

190,181

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

(65,511)

 

 

(50,909)

 

 

(196,933)

 

 

(151,081)

Foreign exchange gain (loss), net

 

2,274

 

 

(2,939)

 

 

815

 

 

(617)

Increase in tax receivable agreement liability

 

(11,327)

 

 

(677)

 

 

(26,719)

 

 

(1,908)

Other income, net

 

1,178

 

 

1,834

 

 

9,610

 

 

6,616

Total other expense, net

 

(73,386)

 

 

(52,691)

 

 

(213,227)

 

 

(146,990)

Income (loss) before income taxes

 

15,423

 

 

22,957

 

 

(39,694)

 

 

43,191

Provision for (benefit from) income taxes

 

3,666

 

 

(2,076)

 

 

13,440

 

 

(1,431)

Net income (loss)

 

11,757

 

 

25,033

 

 

(53,134)

 

 

44,622

Less: Net income attributable to non-controlling interests

 

(11,913)

 

 

(15,351)

 

 

(32,671)

 

 

(29,966)

Net (loss) income attributable to Amneal Pharmaceuticals, Inc.

$

(156)

 

$

9,682

 

$

(85,805)

 

$

14,656

 

 

 

 

 

 

 

 

Net (loss) income per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders:

 

 

 

 

 

 

 

Basic

$

(—)

 

$

0.06

 

$

(0.28)

 

$

0.10

Diluted

$

(—)

 

$

0.06

 

$

(0.28)

 

$

0.09

Weighted-average common shares outstanding(1):

 

 

 

 

 

 

 

Basic

 

309,647

 

 

154,219

 

 

308,685

 

 

153,363

Diluted

 

309,647

 

 

159,691

 

 

308,685

 

 

156,284

(1)

Following the implementation of the previously disclosed reorganization on November 7, 2023, all outstanding shares of Old PubCo Class A Common Stock and Old PubCo Class B Common Stock were exchanged for an equivalent number of shares of Class A common stock of the Company. Refer to Note 1. Nature of Operations and Note 8. (Loss) Earnings per Share to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K for additional information.

Amneal Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(unaudited; $ in thousands)

 

September 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

74,006

 

$

91,542

Restricted cash

 

4,339

 

 

7,565

Trade accounts receivable, net

 

748,055

 

 

613,732

Inventories

 

596,359

 

 

581,384

Prepaid expenses and other current assets

 

81,956

 

 

82,685

Related party receivables

 

8,579

 

 

955

Total current assets

 

1,513,294

 

 

1,377,863

Property, plant and equipment, net

 

431,020

 

 

447,574

Goodwill

 

598,324

 

 

598,629

Intangible assets, net

 

780,189

 

 

890,423

Operating lease right-of-use assets

 

32,872

 

 

30,329

Operating lease right-of-use assets - related party

 

11,473

 

 

12,954

Financing lease right-of-use assets

 

57,532

 

 

59,280

Other assets

 

36,274

 

 

55,517

Total assets

$

3,460,978

 

$

3,472,569

Liabilities and Stockholders' (Deficiency) Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

671,085

 

$

534,662

Current portion of liabilities for legal matters

 

30,181

 

 

76,988

Revolving credit facility

 

140,000

 

 

179,000

Current portion of long-term debt, net

 

224,692

 

 

34,125

Current portion of operating lease liabilities

 

9,702

 

 

9,207

Current portion of operating lease liabilities - related party

 

3,327

 

 

2,825

Current portion of financing lease liabilities

 

3,300

 

 

2,467

Related party payables - short term

 

12,922

 

 

7,321

Total current liabilities

 

1,095,209

 

 

846,595

Long-term debt, net

 

2,169,607

 

 

2,386,004

Note payable - related party

 

—

 

 

41,447

Operating lease liabilities

 

26,210

 

 

24,095

Operating lease liabilities - related party

 

10,265

 

 

12,787

Financing lease liabilities

 

57,558

 

 

58,566

Related party payables - long term

 

26,186

 

 

11,776

Liabilities for legal matters - long term

 

85,479

 

 

316

Other long-term liabilities

 

24,144

 

 

29,679

Total long-term liabilities

 

2,399,449

 

 

2,564,670

Redeemable non-controlling interests

 

59,887

 

 

41,293

Total stockholders' (deficiency) equity

 

(93,567)

 

 

20,011

Total liabilities and stockholders' (deficiency) equity

$

3,460,978

 

$

3,472,569

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(unaudited; $ in thousands)

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

Cash flows from operating activities:

 

 

 

Net (loss) income

$

(53,134)

 

$

44,622

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

170,061

 

 

172,467

Unrealized foreign currency (gain) loss

 

(754)

 

 

1,563

Amortization of debt issuance costs and discount

 

2,662

 

 

6,884

Intangible asset impairment charges

 

920

 

 

2,036

Change in fair value of contingent consideration

 

(930)

 

 

(787)

Stock-based compensation

 

20,558

 

 

20,848

Inventory provision

 

63,611

 

 

56,637

Other operating charges and credits, net

 

(50)

 

 

6,370

Changes in assets and liabilities:

 

 

 

Trade accounts receivable, net

 

(134,031)

 

 

49,055

Inventories

 

(78,545)

 

 

(103,092)

Prepaid expenses, other current assets and other assets

 

(2,082)

 

 

24,810

Related party receivables

 

(483)

 

 

(1,131)

Accounts payable, accrued expenses and other liabilities

 

168,879

 

 

(74,685)

Related party payables

 

20,339

 

 

4,157

Net cash provided by operating activities

 

177,021

 

 

209,754

Cash flows from investing activities:

 

 

 

Purchases of property, plant and equipment

 

(36,769)

 

 

(33,351)

Acquisition of intangible assets

 

(14,050)

 

 

(2,488)

Deposits for future acquisition of property, plant and equipment

 

(1,107)

 

 

(1,658)

Proceeds from sale of subsidiary

 

4,989

 

 

—

Net cash used in investing activities

 

(46,937)

 

 

(37,497)

Cash flows from financing activities:

 

 

 

Payments of deferred financing and refinancing costs

 

—

 

 

(542)

Payments of principal on debt, revolving credit facilities, financing leases and other

 

(133,383)

 

 

(151,510)

Borrowings on revolving credit facilities

 

48,000

 

 

110,000

Proceeds from exercise of stock options

 

1,003

 

 

408

Employee payroll tax withholding on restricted stock unit vesting

 

(7,565)

 

 

(2,222)

Tax distributions to non-controlling interests

 

(14,442)

 

 

(67,875)

Payment of principal on notes payable - related party

 

(44,200)

 

 

—

Net cash used in financing activities

 

(150,587)

 

 

(111,741)

Effect of foreign exchange rate on cash

 

(259)

 

 

(136)

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(20,762)

 

 

60,380

Cash, cash equivalents, and restricted cash - beginning of period

 

99,107

 

 

35,227

Cash, cash equivalents, and restricted cash - end of period

$

78,345

 

$

95,607

Cash and cash equivalents - end of period

$

74,006

 

$

86,929

Restricted cash - end of period

 

4,339

 

 

8,678

Cash, cash equivalents, and restricted cash - end of period

$

78,345

 

$

95,607

Amneal Pharmaceuticals, Inc.

Non-GAAP Reconciliations

(unaudited, $ in thousands)

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Net income (loss)

$

11,757

 

$

25,033

 

$

(53,134)

 

$

44,622

Adjusted to add:

 

 

 

 

 

 

 

Interest expense, net

 

65,511

 

 

50,909

 

 

196,933

 

 

151,081

Provision for (benefit from) income taxes

 

3,666

 

 

(2,076)

 

 

13,440

 

 

(1,431)

Depreciation and amortization

 

58,961

 

 

57,206

 

 

170,061

 

 

172,467

EBITDA (Non-GAAP)

$

139,895

 

$

131,072

 

$

327,300

 

$

366,739

Adjusted to add (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

7,112

 

 

6,691

 

 

20,343

 

 

20,848

Acquisition, site closure, and idle facility expenses (1)

 

551

 

 

1,551

 

 

1,574

 

 

5,831

Restructuring and other charges

 

172

 

 

1,043

 

 

1,773

 

 

1,536

(Credit) charges related to legal matters, net (2)

 

(149)

 

 

2,880

 

 

94,909

 

 

8,961

Asset impairment charges

 

181

 

 

808

 

 

1,196

 

 

2,879

Foreign exchange (gain) loss

 

(2,274)

 

 

2,939

 

 

(815)

 

 

617

Change in fair value of contingent consideration

 

(1,030)

 

 

3,120

 

 

(930)

 

 

(787)

Increase in tax receivable agreement liability

 

11,327

 

 

677

 

 

26,719

 

 

1,908

System implementation expense (3)

 

257

 

 

2,016

 

 

2,029

 

 

4,429

Other

 

1,581

 

 

1,001

 

 

(1,913)

 

 

3,105

Adjusted EBITDA (Non-GAAP)

$

157,623

 

$

153,798

 

$

472,185

 

$

416,066

Amneal Pharmaceuticals, Inc.

Non-GAAP Reconciliations

(unaudited; in thousands, except per share amounts)

Reconciliation of Net Income (Loss) to Adjusted Net Income and Calculation of Adjusted Diluted Earnings Per Share

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Net income (loss)

$

11,757

 

$

25,033

 

$

(53,134)

 

$

44,622

Adjusted to add (deduct):

 

 

 

 

 

 

 

Non-cash interest

 

923

 

 

2,048

 

 

1,552

 

 

6,001

GAAP provision for (benefit from) income taxes

 

3,666

 

 

(2,076)

 

 

13,440

 

 

(1,431)

Amortization

 

41,992

 

 

39,091

 

 

119,481

 

 

118,011

Stock-based compensation expense

 

7,112

 

 

6,691

 

 

20,343

 

 

20,848

Acquisition, site closure expenses, and idle facility expenses (1)

 

551

 

 

1,551

 

 

1,574

 

 

5,831

Restructuring and other charges

 

172

 

 

1,043

 

 

1,756

 

 

1,536

(Credit) charges related to legal matters, including interest, net (2)

 

(149)

 

 

3,597

 

 

95,036

 

 

11,204

Asset impairment charges

 

181

 

 

808

 

 

1,196

 

 

2,872

Change in fair value of contingent consideration

 

(1,030)

 

 

3,120

 

 

(930)

 

 

(787)

Increase in tax receivable agreement liability

 

11,327

 

 

676

 

 

26,719

 

 

1,907

System implementation expense (3)

 

257

 

 

2,016

 

 

2,029

 

 

4,429

Other

 

1,581

 

 

1,189

 

 

(1,913)

 

 

3,440

Provision for income taxes (4)

 

(15,875)

 

 

(15,127)

 

 

(48,016)

 

 

(42,451)

Net income attributable to non-controlling interests not associated with our Class B common stock

 

(11,913)

 

 

(9,355)

 

 

(32,671)

 

 

(22,042)

Adjusted net income (Non-GAAP)

$

50,552

 

$

60,305

 

$

146,462

 

$

153,990

Weighted average diluted shares outstanding (Non-GAAP) (5)

 

322,946

 

 

311,808

 

 

319,491

 

 

308,402

Adjusted diluted earnings per share (Non-GAAP)

$

0.16

 

$

0.19

 

$

0.46

 

$

0.50

Amneal Pharmaceuticals, Inc. Non-GAAP Reconciliations (unaudited)

Explanations for Reconciliations of Net Income (Loss) to EBITDA and Adjusted EBITDA and Net Income (Loss) to Adjusted Net Income and Calculation of Adjusted Diluted Earnings per Share

(1)

Acquisition, site closure, and idle facility expenses for the three and nine months ended September 30, 2024 primarily included rent for vacated properties. Acquisition, site closure, and idle facility expenses for the three and nine months ended September 30, 2023 primarily included site closure costs associated with the planned cessation of manufacturing at our Hauppauge, NY facility.

(2)

For the nine months ended September 30, 2024, charges related to legal matters, net were primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against the Company by political subdivisions and Native American tribes across the United States. For the three months ended September 30, 2023, charges related to legal matters, net were primarily comprised of a charge for the settlement of a customer claim. For the nine months ended September 30, 2023, charges related to legal matters, net were primarily comprised of (i) charges for civil prescription opioid litigation; (ii) settlement of a customer claim; and (iii) settlement of a stockholder derivative lawsuit.

(3)

System implementation expense for the three and nine months ended September 30, 2024 and 2023 was primarily for the implementation of software to further integrate our acquired businesses.

(4)

The non-GAAP effective tax rates for the three and nine months ended September 30, 2024 were 23.9% and 24.7%, respectively. The non-GAAP effective tax rates for the three and nine months ended September 30, 2023 were 20.1% and 21.6%, respectively.

(5)

Weighted average diluted shares outstanding for the three and nine months ended September 30, 2024 consisted of fully diluted Class A common stock. Weighted average diluted shares outstanding for the three and nine months ended September 30, 2023 consisted of diluted Class A common stock and Class B common stock, as if all shares of Class B common stock were converted to Class A common stock as of January 1, 2023.

Amneal Pharmaceuticals, Inc.

Generics Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Three Months Ended September 30, 2024

 

Three Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

427,345

 

$

—

 

$

427,345

 

$

390,857

 

$

—

 

$

390,857

Cost of goods sold (2)

 

249,342

 

 

(11,411)

 

 

237,931

 

 

236,268

 

 

(13,437)

 

 

222,831

Gross profit

 

178,003

 

 

11,411

 

 

189,414

 

 

154,589

 

 

13,437

 

 

168,026

Gross margin %

 

41.7%

 

 

 

 

44.3%

 

 

39.6%

 

 

 

 

43.0%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

30,951

 

 

(1,931)

 

 

29,020

 

 

33,538

 

 

(1,686)

 

 

31,852

Research and development (4)

 

57,099

 

 

(674)

 

 

56,425

 

 

35,103

 

 

(633)

 

 

34,470

Intellectual property legal development expenses

 

1,786

 

 

—

 

 

1,786

 

 

815

 

 

—

 

 

815

Restructuring and other charges

 

17

 

 

(17)

 

 

—

 

 

112

 

 

(112)

 

 

—

(Credit) charges related to legal matters, net

 

(149)

 

 

149

 

 

—

 

 

(2,500)

 

 

(3,000)

 

 

(5,500)

Other operating loss

 

—

 

 

—

 

 

—

 

 

73

 

 

—

 

 

73

Operating income

$

88,299

 

$

13,884

 

$

102,183

 

$

87,448

 

$

18,868

 

$

106,316

(1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

(2)

Adjustments for the three months ended September 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($0.9 million in each period), amortization expense ($10.3 million and $10.5 million), site closure and idle facility expenses (none and $1.1 million), and asset impairment charges ($0.2 million and $0.9 million).

(3)

Adjustments for the three months ended September 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($1.4 million and $1.3 million) and site closure costs ($0.5 million and $0.4 million).

(4)

Adjustments for the three months ended September 30, 2024 and 2023 were comprised of stock-based compensation expense.

Amneal Pharmaceuticals, Inc.

Generics Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Nine Months Ended September 30, 2024

 

Nine Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

1,245,967

 

$

—

 

$

1,245,967

 

$

1,108,364

 

$

—

 

$

1,108,364

Cost of goods sold (2)

 

750,167

 

 

(35,123)

 

 

715,044

 

 

692,008

 

 

(42,283)

 

 

649,725

Gross profit

 

495,800

 

 

35,123

 

 

530,923

 

 

416,356

 

 

42,283

 

 

458,639

Gross margin %

 

39.8%

 

 

 

 

42.6%

 

 

37.6%

 

 

 

 

41.4%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (3)

 

95,663

 

 

(5,251)

 

 

90,412

 

 

89,178

 

 

(5,562)

 

 

83,616

Research and development (4)

 

123,173

 

 

(1,913)

 

 

121,260

 

 

98,570

 

 

(1,901)

 

 

96,669

Intellectual property legal development expenses

 

3,778

 

 

—

 

 

3,778

 

 

3,240

 

 

—

 

 

3,240

Restructuring and other charges

 

70

 

 

(70)

 

 

—

 

 

211

 

 

(112)

 

 

99

Charges (credit) related to legal matters, net (5)

 

94,909

 

 

(94,909)

 

 

—

 

 

(2,927)

 

 

(7,073)

 

 

(10,000)

Other operating income

 

—

 

 

—

 

 

—

 

 

(1,138)

 

 

—

 

 

(1,138)

Operating income

$

178,207

 

$

137,266

 

$

315,473

 

$

229,222

 

$

56,931

 

$

286,153

(1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

(2)

Adjustments for the nine months ended September 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($2.7 million and $2.9 million), amortization expense ($31.2 million and $32.1 million), site closure and idle facility expenses (none and $4.2 million), asset impairment charges ($1.2 million and $2.9 million), and other (none and $0.2 million).

(3)

Adjustments for the nine months ended September 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($3.7 million and $4.0 million) and site closure costs ($1.6 million in each period).

(4)

Adjustments for the nine months ended September 30, 2024 and 2023 were comprised of stock-based compensation expense.

(5)

Adjustment for the nine months ended September 30, 2024 was primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against the Company by political subdivisions and Native American tribes across the United States.

Amneal Pharmaceuticals, Inc.

Specialty Segment

Reconciliation of GAAP to Non-GAAP Operating Results

(unaudited; $ in thousands)

 

Three Months Ended September 30, 2024

 

Three Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

115,638

 

$

—

 

$

115,638

 

$

97,304

 

$

—

 

$

97,304

Cost of goods sold (1)

 

52,342

 

 

(29,394)

 

 

22,948

 

 

45,551

 

 

(25,844)

 

 

19,707

Gross profit

 

63,296

 

 

29,394

 

 

92,690

 

 

51,753

 

 

25,844

 

 

77,597

Gross margin %

 

54.7%

 

 

 

 

80.2%

 

 

53.2%

 

 

 

 

79.7%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

27,723

 

 

(167)

 

 

27,556

 

 

22,756

 

 

(235)

 

 

22,521

Research and development (2)

 

3,998

 

 

(258)

 

 

3,740

 

 

6,272

 

 

(458)

 

 

5,814

Intellectual property legal development expenses

 

181

 

 

—

 

 

181

 

 

71

 

 

—

 

 

71

Restructuring and other charges

 

—

 

 

—

 

 

—

 

 

931

 

 

(931)

 

 

—

Change in fair value of contingent consideration (3)

 

(1,030)

 

 

1,030

 

 

—

 

 

3,120

 

 

(3,120)

 

 

—

Operating income

$

32,424

 

$

28,789

 

$

61,213

 

$

18,603

 

$

30,588

 

$

49,191

(1)

Adjustments for the three months ended September 30, 2024 and 2023 were comprised of amortization expense.

(2)

Adjustments for the three months ended September 30, 2024 and 2023 were comprised of stock-based compensation expense.

(3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC.

Amneal Pharmaceuticals, Inc.

Specialty Segment

Reconciliation of GAAP to Non-GAAP Operating Results

(unaudited; $ in thousands)

 

Nine Months Ended September 30, 2024

 

Nine Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

324,913

 

$

—

 

$

324,913

 

$

285,976

 

$

—

 

$

285,976

Cost of goods sold (1)

 

143,284

 

 

(81,349)

 

 

61,935

 

 

135,254

 

 

(77,871)

 

 

57,383

Gross profit

 

181,629

 

 

81,349

 

 

262,978

 

 

150,722

 

 

77,871

 

 

228,593

Gross margin %

 

55.9%

 

 

 

 

80.9%

 

 

52.7%

 

 

 

 

79.9%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

79,529

 

 

(755)

 

 

78,774

 

 

67,894

 

 

(649)

 

 

67,245

Research and development (2)

 

13,276

 

 

(801)

 

 

12,475

 

 

19,294

 

 

(1,334)

 

 

17,960

Intellectual property legal development expenses

 

215

 

 

—

 

 

215

 

 

110

 

 

—

 

 

110

Restructuring and other charges

 

1,024

 

 

(1,024)

 

 

—

 

 

1,013

 

 

(1,013)

 

 

—

Change in fair value of contingent consideration (3)

 

(930)

 

 

930

 

 

—

 

 

(787)

 

 

787

 

 

—

Operating income

$

88,515

 

$

82,999

 

$

171,514

 

$

63,198

 

$

80,080

 

$

143,278

(1)

Adjustments for the nine months ended September 30, 2024 and 2023 were comprised of amortization expense.

(2)

Adjustments for the nine months ended September 30, 2024 and 2023 were comprised of stock-based compensation expense.

(3)

Contingent consideration was recorded in connection with the acquisitions of (i) the baclofen franchise from certain entities affiliated with Saol International Limited and (ii) Kashiv Specialty Pharmaceuticals, LLC.

Amneal Pharmaceuticals, Inc.

AvKARE Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Three Months Ended September 30, 2024

 

Three Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

159,485

 

$

—

 

$

159,485

 

$

131,879

 

$

—

 

$

131,879

Cost of goods sold

 

131,226

 

 

—

 

 

131,226

 

 

105,690

 

 

—

 

 

105,690

Gross profit

 

28,259

 

 

—

 

 

28,259

 

 

26,189

 

 

—

 

 

26,189

Gross margin %

 

17.7%

 

 

 

 

17.7%

 

 

19.9%

 

 

 

 

19.9%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

15,145

 

 

(3,545)

 

 

11,600

 

 

14,313

 

 

(3,657)

 

 

10,656

Operating income

$

13,114

 

$

3,545

 

$

16,659

 

$

11,876

 

$

3,657

 

$

15,533

(1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

(2)

Adjustments for the three months ended September 30, 2024 and 2023 were comprised of amortization expense ($3.5 million and $4.2 million) and other (none and ($0.5) million).

Amneal Pharmaceuticals, Inc.

AvKARE Segment

Reconciliation of GAAP to Non-GAAP Operating Results (1)

(unaudited; $ in thousands)

 

Nine Months Ended September 30, 2024

 

Nine Months Ended September 30, 2023

 

As Reported

 

Adjustments

 

Non-GAAP

 

As Reported

 

Adjustments

 

Non-GAAP

Net revenue

$

492,559

 

$

—

 

$

492,559

 

$

382,286

 

$

—

 

$

382,286

Cost of goods sold

 

412,423

 

 

—

 

 

412,423

 

 

318,626

 

 

—

 

 

318,626

Gross profit

 

80,136

 

 

—

 

 

80,136

 

 

63,660

 

 

—

 

 

63,660

Gross margin %

16.3%

 

 

 

16.3%

 

 

16.7%

 

 

16.7%

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative (2)

 

44,694

 

 

(10,636)

 

 

34,058

 

 

41,268

 

 

(11,609)

 

 

29,659

Operating income

$

35,442

 

$

10,636

 

$

46,078

 

$

22,392

 

$

11,609

 

$

34,001

(1)

Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.

(2)

Adjustments for the nine months ended September 30, 2024 and 2023, respectively, were comprised of amortization expense ($10.6 million and $12.6 million) and other (none and ($1.0) million).

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241108530772/en/

Contact Anthony DiMeo VP, Investor Relations [e-mail]