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 ‒

BRIDGEWATER, N.J.--(BUSINESS WIRE)--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 (833) 470-1428 (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

Contacts

Contact
Anthony DiMeo
VP, Investor Relations
anthony.dimeo@amneal.com

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