BRIDGEWATER, N.J.--(
BUSINESS WIRE
)--
Amneal Pharmaceuticals, Inc. (Nasdaq: AMRX)
(“Amneal” or the “Company”) announced its results today for the second quarter ended June 30, 2024.
“Amneal achieved strong revenues and adjusted EBITDA in the second quarter, and we are pleased to raise full year 2024 guidance driven by broad-based growth across our business. Amneal is a diversified and growing global pharmaceuticals company built on our core strengths in quality, innovation and operational execution. Coupled with this week’s approval of CREXONT for Parkinson’s disease, Amneal is well positioned to continue delivering durable long-term growth. We are excited about the big opportunities ahead as we focus on the most important areas of medicine to create value for patients, providers and all stakeholders,” said Chirag and Chintu Patel, Co-Chief Executive Officers.
Second Quarter 2024 Results
Net revenue in the second quarter of 2024 was $702 million, an increase of 17% compared to $599 million in the second quarter of 2023. Generics net revenue increased 14% driven primarily by biosimilars and new product launches. Specialty net revenue increased 7% driven by promoted products in Neurology and Endocrinology. AvKARE net revenue increased 33% driven by continued growth across its sales channels.
Net income attributable to Amneal Pharmaceuticals, Inc. was $6 million in the second quarter of 2024 compared to $12 million in the second quarter of 2023.
Adjusted EBITDA in the second quarter of 2024 was $162 million, an increase of 11% compared to the second quarter of 2023, reflective of strong revenue performance partially offset by the impact of business mix on gross margins and higher commercial spend to support new products.
Diluted income per share in the second quarter of 2024 was $0.02 compared to $0.08 for the second quarter of 2023, primarily due to lower net income. Adjusted diluted earnings per share in the second quarter of 2024 was $0.16 compared to $0.19 for the second 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.
Raising Full Year 2024 Guidance
The Company is raising its previously provided full year 2024 guidance.
Updated Guidance
Prior Guidance
Net revenue
$2.70 billion - $2.80 billion
$2.55 billion - $2.65 billion
Adjusted EBITDA
(1)
$610 million - $630 million
$580 million - $620 million
Adjusted diluted EPS
(2)
$0.57 - $0.63
$0.53 - $0.63
Operating cash flow
(3)
$280 million - $320 million
$260 million - $300 million
Capital expenditures
$60 million - $70 million
$60 million - $70 million
(1)
Includes 100% of Adjusted EBITDA from the AvKARE acquisition.
(2)
Accounts for 35% non-controlling interest in AvKARE. Updated guidance and prior guidance assume weighted-average diluted shares outstanding of approximately 320 million and 317 million for the year ending December 31, 2024, respectively.
(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, August 9, 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 (833) 470-1428 (in the U.S.) with access code 462066. 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=52762
.
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 (loss) per share based on adjusted net income (loss), which is net loss adjusted to (A) exclude (i) non-cash interest, (ii) GAAP provision for (benefit from) income taxes, (iii) amortization, (iv) stock-based compensation, (v) acquisition, site closure expenses, and idle facility expenses, (vi) restructuring and other charges, (vii) 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 six months ended June 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 six months ended June 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 June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net revenue
$
701,780
$
599,046
$
1,360,971
$
1,156,586
Cost of goods sold
451,833
379,025
872,964
758,379
Gross profit
249,947
220,021
488,007
398,207
Selling, general and administrative
116,462
105,570
229,057
207,666
Research and development
36,054
37,799
75,352
76,489
Intellectual property legal development expenses
1,042
820
2,026
2,464
Restructuring and other charges
220
82
1,690
592
Change in fair value of contingent consideration
—
(6,364
)
100
(3,907
)
Charges related to legal matters, net
699
2,017
95,058
1,581
Other operating expense (income)
—
13
—
(1,211
)
Operating income
95,470
80,084
84,724
114,533
Other (expense) income:
Interest expense, net
(65,719
)
(50,857
)
(131,422
)
(100,172
)
Foreign exchange (loss) gain, net
(262
)
421
(1,459
)
2,322
Increase in tax receivable agreement liability
(13,444
)
(405
)
(15,392
)
(1,231
)
Other income, net
4,360
417
8,432
4,782
Total other expense, net
(75,065
)
(50,424
)
(139,841
)
(94,299
)
Income (loss) before income taxes
20,405
29,660
(55,117
)
20,234
Provision for (benefit from) income taxes
3,618
(23
)
9,774
645
Net income (loss)
16,787
29,683
(64,891
)
19,589
Less: Net income attributable to non-controlling interests
(10,793
)
(17,766
)
(20,758
)
(14,615
)
Net income (loss) attributable to Amneal Pharmaceuticals, Inc.
$
5,994
$
11,917
$
(85,649
)
$
4,974
Net income (loss) per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders:
Basic
$
0.02
$
0.08
$
(0.28
)
$
0.03
Diluted
$
0.02
$
0.08
$
(0.28
)
$
0.03
Weighted-average common shares outstanding
(1)
:
Basic
309,117
153,738
308,198
152,928
Diluted
318,957
154,887
308,198
154,575
(1)
Following the implementation of the 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)
June 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
43,769
$
91,542
Restricted cash
5,853
7,565
Trade accounts receivable, net
769,871
613,732
Inventories
575,624
581,384
Prepaid expenses and other current assets
81,596
82,685
Related party receivables
8,767
955
Total current assets
1,485,480
1,377,863
Property, plant and equipment, net
425,380
447,574
Goodwill
598,533
598,629
Intangible assets, net
819,944
890,423
Operating lease right-of-use assets
33,284
30,329
Operating lease right-of-use assets - related party
11,974
12,954
Financing lease right-of-use assets
58,299
59,280
Other assets
77,028
55,517
Total assets
$
3,509,922
$
3,472,569
Liabilities and Stockholders' (Deficiency) Equity
Current liabilities:
Accounts payable and accrued expenses
$
619,194
$
534,662
Current portion of liabilities for legal matters
30,740
76,988
Revolving credit facility
179,000
179,000
Current portion of long-term debt, net
225,156
34,125
Current portion of operating lease liabilities
9,669
9,207
Current portion of operating lease liabilities - related party
3,259
2,825
Current portion of financing lease liabilities
3,199
2,467
Related party payables - short term
12,773
7,321
Current portion of notes payable - related party
31,363
—
Total current liabilities
1,114,353
846,595
Long-term debt, net
2,177,578
2,386,004
Note payable - related party
—
41,447
Operating lease liabilities
26,782
24,095
Operating lease liabilities - related party
11,126
12,787
Financing lease liabilities
58,007
58,566
Related party payables - long term
16,146
11,776
Liabilities for legal matters - long term
85,479
316
Other long-term liabilities
24,518
29,679
Total long-term liabilities
2,399,636
2,564,670
Redeemable non-controlling interests
53,422
41,293
Total stockholders' (deficiency) equity
(57,489
)
20,011
Total liabilities and stockholders' (deficiency) equity
$
3,509,922
$
3,472,569
Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(unaudited; $ in thousands)
Six Months Ended June 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(64,891
)
$
19,589
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
111,100
115,261
Unrealized foreign currency loss (gain)
2,080
(1,561
)
Amortization of debt issuance costs and discount
1,221
4,523
Intangible asset impairment charges
920
1,283
Change in fair value of contingent consideration
100
(3,907
)
Stock-based compensation
13,446
14,157
Inventory provision
41,493
41,806
Other operating charges and credits, net
(1,531
)
3,364
Changes in assets and liabilities:
Trade accounts receivable, net
(155,843
)
66,976
Inventories
(35,447
)
(60,526
)
Prepaid expenses, other current assets and other assets
(8,418
)
31,898
Related party receivables
(628
)
351
Accounts payable, accrued expenses and other liabilities
122,026
(107,760
)
Related party payables
9,619
2,913
Net cash provided by operating activities
35,247
128,367
Cash flows from investing activities:
Purchases of property, plant and equipment
(19,824
)
(21,691
)
Acquisition of intangible assets
(10,450
)
(1,488
)
Deposits for future acquisition of property, plant and equipment
(940
)
(842
)
Proceeds from sale of subsidiary
4,989
—
Net cash used in investing activities
(26,225
)
(24,021
)
Cash flows from financing activities:
Payments of principal on debt, revolving credit facilities, financing leases and other
(78,877
)
(87,566
)
Borrowings on revolving credit facilities
48,000
100,000
Proceeds from exercise of stock options
386
—
Employee payroll tax withholding on restricted stock unit vesting
(7,371
)
(2,033
)
Tax distributions to non-controlling interests
(8,883
)
(35,557
)
Payment of principal on notes payable - related party
(11,496
)
—
Net cash used in financing activities
(58,241
)
(25,156
)
Effect of foreign exchange rate on cash
(266
)
165
Net (decrease) increase in cash, cash equivalents, and restricted cash
(49,485
)
79,355
Cash, cash equivalents, and restricted cash - beginning of period
99,107
35,227
Cash, cash equivalents, and restricted cash - end of period
$
49,622
$
114,582
Cash and cash equivalents - end of period
$
43,769
$
109,284
Restricted cash - end of period
5,853
5,298
Cash, cash equivalents, and restricted cash - end of period
$
49,622
$
114,582
Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(unaudited, $ in thousands)
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net income (loss)
$
16,787
$
29,683
$
(64,891
)
$
19,589
Adjusted to add:
Interest expense, net
65,719
50,857
131,422
100,172
Provision for (benefit from) income taxes
3,618
(23
)
9,774
645
Depreciation and amortization
55,572
57,111
111,100
115,261
EBITDA (Non-GAAP)
$
141,696
$
137,628
$
187,405
$
235,667
Adjusted to add (deduct):
Stock-based compensation expense
6,725
6,561
13,231
14,157
Acquisition, site closure, and idle facility expenses
(1)
579
1,579
1,023
4,280
Restructuring and other charges
131
82
1,601
493
Charges related to legal matters, net
(2)
699
2,017
95,058
6,081
Asset impairment charges
—
1,338
1,015
2,071
Foreign exchange loss (gain)
262
(421
)
1,459
(2,322
)
Change in fair value of contingent consideration
—
(6,364
)
100
(3,907
)
Increase in tax receivable agreement liability
13,444
405
15,392
1,231
System implementation expense
(3)
855
1,641
1,772
2,413
Other
(2,180
)
1,622
(3,494
)
2,104
Adjusted EBITDA (Non-GAAP)
$
162,211
$
146,088
$
314,562
$
262,268
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 June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net income (loss)
$
16,787
$
29,683
$
(64,891
)
$
19,589
Adjusted to add (deduct):
Non-cash interest
547
2,112
629
3,953
GAAP provision for (benefit from) income taxes
3,618
(23
)
9,774
645
Amortization
38,818
39,309
77,489
78,920
Stock-based compensation expense
6,725
6,561
13,231
14,157
Acquisition, site closure expenses, and idle facility
expenses
(1)
579
1,579
1,023
4,280
Restructuring and other charges
131
82
1,584
493
Charges related to legal matters, including interest, net
(2)
699
2,725
95,185
7,607
Asset impairment charges
—
1,331
1,015
2,064
Change in fair value of contingent consideration
—
(6,364
)
100
(3,907
)
Increase in tax receivable agreement liability
13,444
405
15,392
1,231
System implementation expense
(3)
855
1,641
1,772
2,413
Other
(2,180
)
1,620
(3,494
)
2,251
Provision for income taxes
(4)
(17,800
)
(16,495
)
(32,141
)
(27,324
)
Net income attributable to non-controlling interests not
associated with our Class B common stock
(10,793
)
(7,292
)
(20,758
)
(12,687
)
Adjusted net income (Non-GAAP)
$
51,430
$
56,874
$
95,910
$
93,685
Weighted average diluted shares outstanding (Non-GAAP)
(5)
318,957
307,004
317,758
306,691
Adjusted diluted earnings per share (Non-GAAP)
$
0.16
$
0.19
$
0.30
$
0.31
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 six months ended June 30, 2024 primarily included rent for vacated properties. Acquisition, site closure, and idle facility expenses for the three and six months ended June 30, 2023 primarily included site closure costs associated with the planned cessation of manufacturing at our Hauppauge, NY facility.
(2)
For the six months ended June 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.
(3)
System implementation expense for the three and six months ended June 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 six months ended June 30, 2024 were 25.7% and 25.1%, respectively. The non-GAAP effective tax rates for the three and six months ended June 30, 2023 were 22.5% and 22.6%, respectively.
(5)
Weighted average diluted shares outstanding for the three and six months ended June 30, 2024 consisted of fully diluted Class A common stock. Weighted average diluted shares outstanding for the three and six months ended June 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 June 30, 2024
Three Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
427,328
$
—
$
427,328
$
373,701
$
—
$
373,701
Cost of goods sold
(2)
260,903
(11,444
)
249,459
225,189
(13,404
)
211,785
Gross profit
166,425
11,444
177,869
148,512
13,404
161,916
Gross margin %
38.9
%
41.6
%
39.7
%
43.3
%
Selling, general and administrative
(3)
31,627
(1,591
)
30,036
28,040
(2,597
)
25,443
Research and development
(4)
31,703
(584
)
31,119
31,108
(325
)
30,783
Intellectual property legal development expenses
1,032
—
1,032
801
—
801
Restructuring and other charges
53
(53
)
—
—
—
—
Charges related to legal matters, net
699
(699
)
—
2,017
(2,017
)
—
Other operating income
—
—
—
13
—
13
Operating income
$
101,311
$
14,371
$
115,682
$
86,533
$
18,343
$
104,876
(1)
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($0.9 million and $0.3 million), amortization expense ($10.5 million and $10.8 million), site closure and idle facility expenses (none and $1.0 million), and asset impairment charges (none and $1.3 million).
(3)
Adjustments for the three months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($1.0 million and $2.0 million) and site closure costs ($0.6 million in each period).
(4)
Adjustments for the three months ended June 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)
Six Months Ended June 30, 2024
Six Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
818,622
$
—
$
818,622
$
717,507
$
—
$
717,507
Cost of goods sold
(2)
500,825
(23,712
)
477,113
455,740
(28,846
)
426,894
Gross profit
317,797
23,712
341,509
261,767
28,846
290,613
Gross margin %
38.8
%
41.7
%
36.5
%
40.5
%
Selling, general and administrative
(3)
64,712
(3,320
)
61,392
55,640
(3,876
)
51,764
Research and development
(4)
66,074
(1,239
)
64,835
63,467
(1,268
)
62,199
Intellectual property legal development expenses
1,992
—
1,992
2,425
—
2,425
Restructuring and other charges
53
(53
)
—
99
—
99
Charges (credit) related to legal matters, net
(5)
95,058
(95,058
)
—
(427
)
(4,073
)
(4,500
)
Other operating income
—
—
—
(1,211
)
—
(1,211
)
Operating income
$
89,908
$
123,382
$
213,290
$
141,774
$
38,063
$
179,837
(1)
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.
(2)
Adjustments for the six months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($1.8 million and $2.0 million), amortization expense ($20.9 million and $21.6 million), site closure and idle facility expenses (none and $3.1 million), asset impairment charges ($1.0 million and $2.0 million), and other (none and $0.1 million).
(3)
Adjustments for the six months ended June 30, 2024 and 2023, respectively, were comprised of stock-based compensation expense ($2.3 million and $2.7 million) and site closure costs ($1.0 million and $1.2 million).
(4)
Adjustments for the six months ended June 30, 2024 and 2023 were comprised of stock-based compensation expense.
(5)
Adjustments for the six months ended June 30, 2024 were 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 June 30, 2024
Three Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
104,041
$
—
$
104,041
$
96,994
$
—
$
96,994
Cost of goods sold
(1)
46,142
(25,977
)
20,165
46,512
(25,844
)
20,668
Gross profit
57,899
25,977
83,876
50,482
25,844
76,326
Gross margin %
55.7
%
80.6
%
52.0
%
78.7
%
Selling, general and administrative
(2)
26,610
(317
)
26,293
22,759
(228
)
22,531
Research and development
(2)
4,351
(259
)
4,092
6,691
(487
)
6,204
Intellectual property legal development expenses
10
—
10
19
—
19
Restructuring and other charges
78
(78
)
—
82
(82
)
—
Change in fair value of contingent consideration
(3)
—
—
—
(6,364
)
6,364
—
Operating income
$
26,850
$
26,631
$
53,481
$
27,295
$
20,277
$
47,572
(1)
Adjustments for the three months ended June 30, 2024 and 2023 were comprised of amortization expense.
(2)
Adjustments for the three months ended June 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)
Six Months Ended June 30, 2024
Six Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
209,275
$
—
$
209,275
$
188,672
$
—
$
188,672
Cost of goods sold
(1)
90,942
(51,955
)
38,987
89,703
(52,027
)
37,676
Gross profit
118,333
51,955
170,288
98,969
52,027
150,996
Gross margin %
56.5
%
81.4
%
52.5
%
80.0
%
Selling, general and administrative
(2)
51,806
(588
)
51,218
45,138
(414
)
44,724
Research and development
(2)
9,278
(543
)
8,735
13,022
(876
)
12,146
Intellectual property legal development expenses
34
—
34
39
—
39
Restructuring and other charges
1,024
(1,024
)
—
82
(82
)
—
Change in fair value of contingent consideration
(3)
100
(100
)
—
(3,907
)
3,907
—
Operating income
$
56,091
$
54,210
$
110,301
$
44,595
$
49,492
$
94,087
(1)
Adjustments for the six months ended June 30, 2024 and 2023 were comprised of amortization expense.
(2)
Adjustments for the six months ended June 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 June 30, 2024
Three Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
170,411
$
—
$
170,411
$
128,351
$
—
$
128,351
Cost of goods sold
144,788
—
144,788
107,324
—
107,324
Gross profit
25,623
—
25,623
21,027
—
21,027
Gross margin %
15.0
%
15.0
%
16.4
%
16.4
%
Selling, general and administrative
(2)
14,642
(3,546
)
11,096
14,015
(4,188
)
9,827
Operating income
$
10,981
$
3,546
$
14,527
$
7,012
$
4,188
$
11,200
(1)
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.
(2)
Adjustments for the three months ended June 30, 2024 and 2023 were comprised of amortization expense.
Amneal Pharmaceuticals, Inc.
AvKARE Segment
Reconciliation of GAAP to Non-GAAP Operating Results
(1)
(unaudited; $ in thousands)
Six Months Ended June 30, 2024
Six Months Ended June 30, 2023
As Reported
Adjustments
Non-GAAP
As Reported
Adjustments
Non-GAAP
Net revenue
$
333,074
$
—
$
333,074
$
250,407
$
—
$
250,407
Cost of goods sold
281,197
—
281,197
212,936
—
212,936
Gross profit
51,877
—
51,877
37,471
—
37,471
Gross margin %
15.6
%
15.6
%
15.0
%
15.0
%
Selling, general and administrative
(2)
29,549
(7,091
)
22,458
26,955
(7,952
)
19,003
Operating income
$
22,328
$
7,091
$
29,419
$
10,516
$
7,952
$
18,468
(1)
Operating results for the sale of Amneal products by AvKARE were included in our Generics segment.
(2)
Adjustments for the six months ended June 30, 2024 and 2023, respectively, were comprised of amortization expense ($7.1 million and $8.4 million) and other (none and ($0.4) million).
