Reports Net Revenues of $80.1 Million for the Three Months Ended September 30, 2019

RANCHO CUCAMONGA, Calif., Nov. 07, 2019 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended September 30, 2019.

Third Quarter Highlights

• Net revenues of $80.1 million for the third quarter
• GAAP net income of $1.3 million, or $0.03 per share, for the third quarter
• Adjusted non-GAAP net income of $5.2 million, or $0.10 per share, for the third quarter

Dr. Jack Zhang, Amphastar’s Chief Executive Officer, commented: “A significant accomplishment in the third quarter was the successful ramp up of our marketing efforts for Primatene® Mist. We are pleased to announce we started shipping Primatene® Mist to Walmart in October. Meanwhile, our pipeline of both generic and proprietary candidates continues to move ahead. Additionally, we recently had another complex ANDA accepted for filing.”

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2019			2018			2019			2018
		(in thousands, except per share data)
Net revenues		$	80,137		$	75,543		$	238,974		$	204,976
GAAP net income (loss) attributable to Amphastar		$	1,310		$	2,389		$	49,965		$	(7,605	)
Adjusted non-GAAP net income attributable to Amphastar*		$	5,169		$	5,721		$	14,171		$	4,168
GAAP diluted EPS attributable to Amphastar shareholders		$	0.03		$	0.05		$	1.00		$	(0.16	)
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*		$	0.10		$	0.12		$	0.28		$	0.09

_____________________________ * 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.

Third Quarter Results

		Three Months Ended
		September 30,						Change
		2019			2018			Dollars				%
		(in thousands)
Net revenues:
Lidocaine		$	11,670		$	9,875		$	1,795			18		%
Phytonadione			10,916			8,968			1,948			22		%
Naloxone			10,613			9,432			1,181			13		%
Enoxaparin			9,573			18,564			(8,991	)		(48	)	%
Medroxyprogesterone			7,879			7,552			327			4		%
Epinephrine			3,756			1,881			1,875			100		%
Primatene® Mist			3,654			—			3,654			N/A
Other finished pharmaceutical products			17,668			15,495			2,173			14		%
Total finished pharmaceutical products net revenues		$	75,729		$	71,767		$	3,962			6		%
API			4,408			3,776			632			17		%
Total net revenues		$	80,137		$	75,543		$	4,594			6		%

Changes in net revenues were primarily driven by:

• Lidocaine sales increases due to a higher average selling price, as well as higher unit volumes
• Phytonadione sales increases due to a higher average selling price
• Epinephrine and naloxone sales increases due to higher unit volumes
• Sales of Primatene® Mist, which launched in December 2018
• Increases in sales of other finished pharmaceutical products, including atropine, calcium chloride, and dextrose, which were in high demand due to market shortages

		Three Months Ended
		September 30,								Change
		2019				2018				Dollars				%
		(in thousands)
Net revenues		$	80,137			$	75,543			$	4,594			6		%
Cost of revenues			44,885				46,283				(1,398	)		(3	)	%
Gross profit		$	35,252			$	29,260			$	5,992			20		%
as % of net revenues			44	%			39	%

Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:

• Sales of Primatene® Mist, which has higher margins
• Increased sales of phytonadione, which has higher margins

		Three Months Ended
		September 30,						Change
		2019			2018			Dollars				%
		(in thousands)
Selling, distribution and marketing		$	3,221		$	1,963		$	1,258			64		%
General and administrative			11,021			13,407			(2,386	)		(18	)	%
Research and development			18,606			11,340			7,266			64		%

• Selling, distribution and marketing expenses increased primarily due to increased marketing expenses related to Primatene® Mist, including the cost of a television and radio marketing campaign, which began in July 2019
• General and administrative expenses decreased primarily due to lower legal expenses
• Research and development expenses increased primarily due to the development of active pharmaceutical ingredients and key components, and increased clinical trial expenses for our generic product pipeline, primarily for our inhalation abbreviated new drug applications, or ANDAs

Cash flow provided by operating activities for the nine months ended September 30, 2019, was $36.1 million.

Share Buyback Program

On November 4, 2019, the Company’s Board of Directors authorized an increase of $20 million to the Company’s share buyback program, which is expected to continue for an indefinite period of time. The primary goal of the program is to offset dilution created by the Company’s equity compensation programs.

Purchases may be made through the open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions, or other means, as determined by the Company’s management and in accordance with the requirements of the Securities and Exchange Commission and applicable laws.

The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions.

Pipeline Information

The Company currently has five ANDAs, filed with the FDA targeting products with a market size of approximately $1.1 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and 11 generic products in development targeting products with a market size of approximately $13 billion. This market information is based on IQVIA data for the 12 months ended September 30, 2019. The Company’s proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing three 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.

Company Information

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, November 7, 2019, 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 8097493.

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.Bill PetersChief Financial Officer(909) 980-9484

Table IAmphastar Pharmaceuticals, Inc.Condensed Consolidated Statement of Operations(Unaudited; in thousands, except per share data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2019				2018				2019				2018
Net revenues		$	80,137			$	75,543			$	238,974			$	204,976
Cost of revenues			44,885				46,283				140,432				132,680
Gross profit			35,252				29,260				98,542				72,296
Operating expenses:
Selling, distribution, and marketing			3,221				1,963				9,354				5,560
General and administrative			11,021				13,407				39,774				36,074
Research and development			18,606				11,340				49,209				40,830
Total operating expenses			32,848				26,710				98,337				82,464
Income (loss) from operations			2,404				2,550				205				(10,168	)
Non-operating (expense) income, net			(822	)			24				58,837				(347	)
Income (loss) before income taxes			1,582				2,574				59,042				(10,515	)
Income tax provision (benefit)			598				958				13,292				(2,137	)
Net income (loss)		$	984			$	1,616			$	45,750			$	(8,378	)
Net loss attributable to non-controlling interests		$	(326	)		$	(773	)		$	(4,215	)		$	(773	)
Net income (loss) attributable to Amphastar		$	1,310			$	2,389			$	49,965			$	(7,605	)
Net income (loss) per share attributable to Amphastar shareholders:
Basic		$	0.03			$	0.05			$	1.06			$	(0.16	)
Diluted		$	0.03			$	0.05			$	1.00			$	(0.16	)
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:
Basic			47,239				46,241				47,030				46,437
Diluted			50,075				48,281				50,128				46,437

Table IIAmphastar Pharmaceuticals, Inc.Condensed Consolidated Balance Sheet(Unaudited; in thousands, except share data)

		September 30,				December 31,
		2019				2018
ASSETS
Current assets:
Cash and cash equivalents		$	85,611			$	86,337
Restricted cash			1,865				1,865
Short-term investments			12,666				2,831
Restricted short-term investments			2,290				2,290
Accounts receivable, net			45,255				52,163
Inventories			109,854				69,322
Income tax refunds and deposits			890				49
Prepaid expenses and other assets			10,472				5,485
Total current assets			268,903				220,342
Property, plant, and equipment, net			222,158				210,418
Finance lease right-of-use assets			896				—
Operating lease right-of-use assets			19,463				—
Goodwill and intangible assets, net			41,139				42,267
Other assets			12,331				9,918
Deferred tax assets			20,746				30,618
Total assets		$	585,636			$	513,563
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	75,137			$	87,418
Income taxes payable			1,400				1,187
Current portion of long-term debt			6,969				18,229
Current portion of operating lease liabilities			3,090				—
Total current liabilities			86,596				106,834
Long-term reserve for income tax liabilities			415				415
Long-term debt, net of current portion			38,079				31,984
Long-term operating lease liabilities, net of current portion			16,940				—
Deferred tax liabilities			976				1,031
Other long-term liabilities			8,977				8,940
Total liabilities			151,983				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; 52,399,044 and 47,199,907 shares issued and outstanding as of September 30, 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			361,705				344,434
Retained earnings			117,396				67,485
Accumulated other comprehensive loss			(5,848	)			(4,013	)
Treasury stock			(83,853	)			(75,476	)
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity			389,405				332,435
Non-controlling interests			44,248				31,924
Total equity			433,653				364,359
Total liabilities and stockholders’ equity		$	585,636			$	513,563

Table IIIAmphastar Pharmaceuticals, Inc.Reconciliation of Non-GAAP Measures(Unaudited; in thousands, except per share data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2019				2018				2019				2018
GAAP net income (loss)		$	984			$	1,616			$	45,750			$	(8,378	)
Adjusted for:
Intangible amortization			251				271				777				1,722
Share-based compensation			4,294				3,908				13,000				12,770
Impairment of long-lived assets			11				10				194				390
Gain on litigation settlement			—				—				(59,900	)			—
Income tax provision (benefit) on pre-tax adjustments			(598	)			(788	)			10,422				(3,040	)
Non-GAAP net income (loss)		$	4,942			$	5,017			$	10,243			$	3,464
Non-GAAP net loss attributable to non-controlling interests		$	(227	)		$	(704	)		$	(3,928	)		$	(704	)
Non-GAAP net income attributable to Amphastar		$	5,169			$	5,721			$	14,171			$	4,168
Non-GAAP net income per share attributable to Amphastar shareholders:
Basic		$	0.11			$	0.12			$	0.30			$	0.09
Diluted		$	0.10			$	0.12			$	0.28			$	0.09
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:
Basic			47,239				46,241				47,030				46,437
Diluted			50,075				48,281				50,128				48,713

		Three Months Ended September 30, 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		$	44,885			$	3,221			$	11,021			$	18,606			$	(822	)		$	598		$	(326	)
Intangible amortization			(216	)			—				(35	)			—				—				—			12
Share-based compensation			(701	)			(96	)			(3,138	)			(359	)			—				—			107
Impairment of long-lived assets			(4	)			—				(11	)			4				—				—			6
Gain on litigation settlement			—				—				—				—				—				—			—
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—				598			(26	)
Non-GAAP		$	43,964			$	3,125			$	7,837			$	18,251			$	(822	)		$	1,196		$	(227	)

Reconciliation of Non-GAAP Measures (continued)

		Three Months Ended September 30, 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		$	46,283			$	1,963			$	13,407			$	11,340			$	24		$	958		$	(773	)
Intangible amortization			(230	)			—				(41	)			—				—			—			11
Share-based compensation			(884	)			(86	)			(2,615	)			(323	)			—			—			68
Impairment of long-lived assets			—				—				—				(10	)			—			—			1
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—			788			(11	)
Non-GAAP		$	45,169			$	1,877			$	10,751			$	11,007			$	24		$	1,746		$	(704	)

		Nine Months Ended September 30, 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		$	140,432			$	9,354			$	39,774			$	49,209			$	58,837			$	13,292			$	(4,215	)
Intangible amortization			(669	)			—				(108	)			—				—				—				34
Share-based compensation			(2,939	)			(285	)			(8,577	)			(1,199	)			—				—				257
Impairment of long-lived assets			(69	)			—				(23	)			(102	)			—				—				55
Gain on litigation settlement			—				—				—				—				(59,900	)			—				—
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—				(10,422	)			(59	)
Non-GAAP		$	136,755			$	9,069			$	31,066			$	47,908			$	(1,063	)		$	2,870			$	(3,928	)

		Nine Months Ended September 30, 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		$	132,680			$	5,560			$	36,074			$	40,830			$	(347	)		$	(2,137	)		$	(773	)
Intangible amortization			(1,602	)			—				(120	)			—				—				—				11
Share-based compensation			(3,025	)			(297	)			(8,251	)			(1,197	)			—				—				68
Impairment of long-lived assets			(77	)			—				(4	)			(309	)			—				—				1
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—				3,040				(11	)
Non-GAAP		$	127,976			$	5,263			$	27,699			$	39,324			$	(347	)		$	903			$	(704	)

Source: Amphastar Pharmaceuticals, Inc.

Globe Newswire Press Releases

Amphastar Pharma (AMPH) Tops Q3 EPS by 3cNovember 7, 2019 4:41 PM