Lannett Co Inc (NYSE:LCI)

Fourth Quarter Fiscal 2013 Results

• Sales rose significantly to $40.2 million, up 13% from $35.7 million in the same quarter 2012.
• Fourth Quarter Fiscal 2013 EPS was $0.12, compared to $0.05 for the same quarter 2012.

“Our full year net income for fiscal 2013 was our highest in the company’s history,” said Arthur Bedrosian, president and chief executive officer of Lannett. “In addition, we reported record net sales for the fourth quarter and full year fiscal 2013. Our excellent financial performance was driven by sales growth across all of our key product categories, as well as a higher gross margin percentage due to favorable sales mix, price increases and enhanced manufacturing efficiencies.”

Bedrosian added, “In addition to our record financial performance, we recently completed an important contract extension with Jerome Stevens Pharmaceuticals (JSP). Under the amended agreement, Lannett will continue to be the exclusive distributor of substantially all JSP products for an additional five years, through March 2019. This, combined with 15 product applications currently pending at the FDA and our increased investment in product development, will fuel our positive momentum going forward.”

Business Outlook

Based on Lannett’s current outlook, the company provided financial guidance for the fiscal 2014 full year as follows:

• Net sales in the range of $181 million to $186 million;
• Gross margin as a percentage of net sales of approximately 43% to 44%;
• R&D expense in the range of $24 million to $26 million;
• SG&A expense ranging from $28 million to $30 million;
• The full year effective tax rate in the range of 34% to 36%; and,
• Capital expenditures are expected to be in the range of $28 million to $32 million, which includes the purchase and partial fit-out of a new facility.

The company noted that its guidance for fiscal 2014 does not include the impact of shares issued in connection with the JSP contract extension. The Company intends to expense the value of the shares issued, which approximates $20 million, in the fiscal 2014 first quarter. The impact of this transaction would also reduce the effective tax rate by approximately two percentage points.

Preliminary Third Quarter 2013 Results

PHILADELPHIA--(BUSINESS WIRE)--Lannett Company, Inc. (NYSE MKT: LCI) today announced that it expects to report fiscal 2013 third quarter net sales of approximately $39 million and diluted earnings per share between $0.12 and $0.14. For the prior year third quarter, net sales were $30.7 million and diluted earnings per share were $0.06. The company said the improved performance was driven by strong sales of existing and new products, as well as solid gross margin due to favorable product mix and enhanced manufacturing efficiencies

For the second quarter of fiscal 2011:

• Net sales rose to $30.0 million, compared with $28.7 million for the second quarter of fiscal 2010.
• Gross profit increased to $8.4 million from $8.1 million for the same period in the prior year.
• Operating income climbed to $3.8 million from $1.3 million in the fiscal 2010 second quarter.
• Net income attributable to Lannett Company was $2.4 million, or $0.09 per diluted share, compared with $55,000, or $0.00 per diluted share, for the prior year second quarter.

In December, the company completed a secondary offering of its common stock for a total of 3,250,000 shares, with net proceeds of approximately $14.9 million. The additional shares issued did not have a significant impact on weighted shares outstanding due to the timing of the offering.

"Our financial performance in the fiscal 2011 second quarter was driven by higher sales of certain key products, notably Oxycodone HCI Oral Solution, Levothyroxine Sodium Tablets, and OB Natal® One Tablets, as well as lower operating expenses," said Arthur Bedrosian, president and chief executive officer of Lannett. "We continue to be impacted by a dearth of product approvals, due to the FDA backlog. We believe, however, that several drug applications, including our New Drug Application for Morphine Sulfate Oral Solution, will soon be approved, subject to a positive facility inspection by the FDA, which is expected to be completed shortly."

We will begin tracking Lannett due to Fiscal 2011 estimates which indicate EPS growing 66.7% to $0.45.

Please note that since LCI is a pharmaceutical company it can be prone to disruptions in its operations due to drug launch delays and FDA issues.

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