Impax Reports Third Quarter 2017 Results

HAYWARD, Calif., Nov. 9, 2017

Total revenues in the third quarter 2017 were $206.4 million, a decrease of 9.4%, compared to $227.9 million in the prior year period as a decrease in sales of generic products was partially offset by an increase in sales of specialty products. 

GAAP net loss was $49.4 million or a loss of $0.69 per share for the third quarter 2017, compared to a loss of $179.3 million or a loss of $2.51 per share in the prior year period. The third quarter 2017 results included a reserve charge for pre-launch product inventory due to delays in anticipated regulatory approvals, non-cash intangible asset impairment charges, and restructuring and severance charges related to the Company's operational and cost improvement plans. The third quarter 2016 results include non-cash intangible asset impairment charges primarily related to the products acquired from Teva Pharmaceuticals Industries Ltd. and affiliates of Allergan plc (the "Teva Transaction").

Adjusted net income was $16.7 million or $0.23 per share in the third quarter 2017, compared to $26.1 million or $0.37 per share in the prior year period, primarily due to lower product revenue caused by buyer consolidation and additional competition. Refer to the attached "Non-GAAP Financial Measures" for a reconciliation of all GAAP to non-GAAP items.

For the third quarter 2017, EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $15.4 million, compared to a loss of $247.9 million in the prior year period, primarily as a result of the charges noted above. Adjusted EBITDA was $45.6 million, compared to $58.9 million in the prior year period. Cash and cash equivalents were $157.7 million as of September 30, 2017.

"This quarter saw us execute on our Path Forward long-term growth strategy with the announcement of the pending Amneal Pharmaceuticals transaction," said Paul Bisaro, President and Chief Executive Officer of Impax. "The combination with Amneal will provide multiple opportunities to drive strong future growth, including investment in high-growth specialty assets. This combination will create a more diversified company with one of the industry's leading high-value generic product pipelines with broad R&D capabilities across dosage forms. We are actively engaged in pre-integration planning and continue to target a close in the first half of 2018."

"While our third quarter results were in line with our expectations, we continue to navigate the challenging generic market environment. As such, we accelerated our focus on aligning infrastructure to support standalone revenue and earnings growth, while closely controlling our expenses. We have made significant progress on our operational and cost improvement plan as we currently expect to complete the closure of our Middlesex, New Jersey packaging facility by the end of 2017, ahead of schedule. Additionally, we are in late-stage negotiations for the sale of our Taiwan manufacturing facility. If we are successful in selling our Taiwan facility by the end of the first quarter of 2018, we could realize the anticipated cost savings by the end of 2018, approximately one year ahead of schedule."