EXHIBIT 99.1

Akorn Completes 2014 Financial Statement Restatement and Reports Audited 2015 and Restated 2014 Results

- Sets Date for 2016 Annual Meeting

- Affirms 2016 Net Revenue and Earnings per Share Guidance

LAKE FOREST, Ill., May 10, 2016 (GLOBE NEWSWIRE) -- Akorn, Inc. (Nasdaq:AKRX), a leading specialty generic pharmaceutical company, today announced that it has filed its Annual Report on Form 10-K for the fiscal year December 31, 2015 (“Form 10-K”).  The Company is now up to date on filing its periodic reports with the Securities and Exchange Commission (the “SEC”).  The Company also announced plans to hold its 2016 annual meeting of shareholders on July 1, 2016.

The Company’s comprehensive Form 10-K filed today contains the following:

  • consolidated financial statements for the year ended December 31, 2015, and unaudited quarterly financial information for the quarters in 2015; and
  • consolidated restated financial statements for the year ended December 31, 2014 and unaudited restated quarterly financial information for the quarters in 2014.

Raj Rai, Akorn’s Chief Executive Officer, said, “The completion of the restatement of 2014 financial statements and the audit of the 2015 financial statements are important milestones for our Company.  This allows our Company to shift its focus on executing on the strategic objectives and growth opportunities.   I would like to thank the Akorn team members under the leadership of Duane Portwood and Randy Pollard for their perseverance and hard work throughout this process.”

Duane Portwood, Akorn’s Chief Financial Officer, added, “We filed our Annual Report on Form 10-K for 2015 and have scheduled our annual shareholders meeting for July 1, 2016, for compliance with the Listing Rules exception granted by the NASDAQ Listing Panel.  As we move forward in 2016, we look forward to completing the remediation of our internal control weaknesses while helping the Company execute on its strategic objectives and growth opportunities.”

Financial Restatement for the Year Ended December 31, 2014

As discussed in the Form 10-K, the Company identified accounting errors primarily associated with rebates and contractual allowances for 2014.  Net revenue for 2014 as previously reported of $593 million was overstated by $38 million and is now restated to be $555 million.  Income from continuing operations before income taxes for 2014 as previously reported of $59 million was overstated by $34 million and is now restated to be $25 million. 

On May 7, 2016, the Audit Committee of the Board of Directors of Akorn, Inc., upon the recommendation of the Company’s management, concluded that the unaudited financial information for the quarterly period ended March 31, 2014 contained an error related to commitment fees incurred to consummate term loan debt.  Specifically, the fees were incorrectly expensed in the quarter rather than amortized over the life of the term loan debt.  Income from continuing operations before income taxes for the quarter ended March 31, 2014 as previously reported of $16 million is now restated to be $18 million.  The unaudited restated quarterly financial information for the quarter ended March 31, 2014 was included in the Form 10-K.

Key Financial Highlights for the Year Ended December 31, 2015

Revenues. Consolidated revenue for 2015 was $985 million, an increase of 77% over 2014 revenue of $555 million (as restated).

Gross Margin. Consolidated gross margin for 2015 was 60.5%, compared to 47.1% (as restated) for 2014.  Excluding $6.3 million in costs from amortization of inventory step up and other items, non-GAAP gross margin was 61.1%, up from 51.2% (as restated) in 2014.

EBITDA. Earnings before interest, taxes, depreciation and amortization was $370 million in 2015, compared to $119 million (as restated) in 2014.  Adjusted EBITDA, which is a non-GAAP measure used by management to evaluate the continuing operations of the Akorn business, was $460 million in 2015, compared to $182 million (as restated) in 2014.  A full reconciliation of adjusted EBITDA adjustments can be found at the end of this press release.

Net Income per Share. Fully diluted earnings per share (EPS) was $1.22 in 2015 compared to $0.13 (as restated) in 2014.  Including a net adjustment of $100 million to net income for non-GAAP items, adjusted fully diluted EPS was $2.02 in 2015.  Including a net adjustment of $64 million to net income, adjusted fully diluted EPS was $0.63 (as restated) for 2014.  Adjustments to net income in 2015 and 2014 included a number of items detailed at the end of this press release.  Please refer to this table for a full reconciliation of GAAP to non-GAAP items.

Annual Meeting

The Company plans to hold its 2016 annual meeting of shareholders on July 1, 2016, within the extension period through July 5, 2016 granted by the Listing Qualifications Panel of The NASDAQ Stock Market to satisfy proxy solicitation and annual meeting requirements.  Shareholders of record on May 11, 2016, the record date for the meeting, will be entitled to vote at the meeting. Qualified stockholder proposals (including proposals made pursuant to Rule 14a-18 under the Securities Exchange Act of 1934, as amended) to be presented at the Annual Meeting and included in the Company’s proxy statement and form of proxy relating to that meeting must be received by the Company at Company Headquarters, addressed to the corporate secretary, not later than the close of business on May 16, 2016. Such proposals must also comply with all applicable requirements, including applicable Louisiana law, the rules and regulations promulgated by the SEC, and the procedures set forth in the Company’s Amended and Restated Bylaws.

Earnings Guidance Affirmed for Full Year 2016

The Company is maintaining its full year 2016 financial guidance inclusive of net revenue of $1,060 - $1,080 million, GAAP diluted earnings per share of $1.56 - $1.66, and adjusted diluted earnings per share (non-GAAP) of $2.10 - $2.20.

Akorn’s guidance only contemplates launches of products approved by the U.S. Food and Drug Administration ("FDA") as of May 10, 2016 along with the full year contribution of products launched in 2015.  Products that are not yet approved by the FDA are not included in Akorn’s 2016 financial guidance.  Other guidance assumptions are detailed in the Company’s March 22, 2016 press release.

2015 Form 10-K Conference Call and Webcast Details

Akorn’s management plans to hold a conference call with interested investors and analysts at 10:00 am ET on Tuesday, May 10, 2016 to discuss the Company’s audited 2015 and audited and restated 2014 results.  The dial-in number to access the call is (844)-249-9382 in the U.S. and Canada and (270) 823-1530 for international callers. The conference ID is 7498448. To access the live webcast, please go to Akorn’s Investor Relations website at http://investors.akorn.com.

A webcast replay of the conference call will be available shortly following the conclusion of the call and will be available for 90 days. To access the replay, please go to Akorn’s Investor Relations website at http://investors.akorn.com.

Non-GAAP Financial Measures

To supplement Akorn’s financial guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the following non-GAAP (also referred to as “adjusted” or “non-GAAP adjusted”) financial measures in this press release and the accompanying tables:(i) EBITDA, (ii) adjusted EBITDA, (iii) adjusted net income, (iv) adjusted diluted earnings per share, (v) adjusted revenues, and (vi) adjusted gross margin. The Company believes that each of these non-GAAP financial measures is helpful in understanding the Company’s past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the Company.  The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for or superior to comparable GAAP measures. 

Akorn’s management uses adjusted EBITDA, adjusted net income and adjusted diluted earnings per share in managing and analyzing its business and financial condition. Akorn’s management believes that the presentation of these and other non-GAAP financial measures provide investors greater transparency into Akorn’s ongoing results of operations allowing investors to better compare the Company’s results from period to period. The Company believes that adjusted gross margin, although a non-GAAP financial measure, is useful and meaningful to investors as a basis for making investment decisions. It provides investors with a supplemental way to understand the underlying operating performance of the Company.

Investors should note that these non-GAAP financial measures used to present financial guidance are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time-to-time in the future there may be other items that the Company may exclude for purposes of its non-GAAP financial measures; likewise, the Company may in the future cease to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Because of the non-standardized definitions, the non-GAAP financial measures as used by Akorn in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the Company’s competitors and other companies.

Set forth below is the definition of each non-GAAP financial measure as used by the Company in this press release and a full reconciliation of each non-GAAP financial measure to the most closely applicable GAAP financial measures is included herein.

EBITDA, as defined by the Company, represents net income before net interest expense, income tax expense, depreciation and amortization.

Adjusted EBITDA, as defined by the Company, is calculated as follows:

Net income, plus:

  • Interest income (expense), net
  • Provision for income taxes
  • Depreciation and amortization
  • Amortization of acquisition related inventory step-up
  • Non-cash expenses, such as share-based compensation expense, and amortization of deferred financing costs
  • Other adjustments, such as legal settlements, restatement expenses and various acquisition and disposition related expenses
  • Less gains (or plus losses) on foreign currency transactions

Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance.

Adjusted net income, as defined by the Company, is calculated as follows:

Net income, plus:

  • Intangible asset amortization
  • Non-cash expenses, such as non-cash interest, share-based compensation expense, and amortization of financing costs
  • Other adjustments, such as legal settlements, restatement expenses and various acquisition and disposition related expenses
  • Amortization of acquisition-related inventory step-up
  • Less gains (or plus losses) on foreign currency transactions
  • Less gains related to acquisitions and divestitures
  • Less an estimated tax provision, net of the benefit from utilizing net operating loss carry-forwards effected for the adjustments noted above

Adjusted diluted earnings per share is equal to adjusted net income divided by the actual or anticipated diluted share count for the applicable period. The Company believes that adjusted net income and adjusted diluted earnings per share are meaningful financial indicators, to both Company management and investors, in that they exclude non-cash income and expense items that have no impact on current or future cash flows, as well as other income and expense items that are not expected to recur and therefore are not reflective of continuing operating performance. 

The shortcomings of non-GAAP financial measures as guidance or performance measures are that they provide a view of the Company’s results of operations without including all events during a period. For example, Adjusted EBITDA does not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omits share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense. Adjusted net income does not take into account non-cash expenses that reflect the amortization of past expenditures, or include share-based compensation, which is an important and material element of the Company's compensation package for its directors, officers and other key employees. Due to the inherent limitations of non-GAAP financial measures, investors 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. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measures as presented in this press release.

Forward Looking Statements

This press release includes statements that may constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Akorn’s current expectations and projections about future trends, events and uncertainties.  Forward-looking statements may include, among others, statements concerning the expected completion of NASDAQ requirements to remain listed, the expected impact of the restatement on our financial our financial guidance, including projections of net revenue and earnings per share, the timing of filings, conference calls, our 2016 annual meeting, and other statements regarding Akorn's goals and strategy. These statements are not historical facts. The words “plan,” “intend,” “will,” “anticipate,” “believe,” “estimate,” “potential,” “expect” and similar expressions are generally intended to identify forward-looking statements. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the difficulty of predicting the impact of our restatement on our financial results, and the timing of the completion of the remaining NASDAQ requirements to remain listed on the NASDAQ Global Select Market; the difficulty of predicting the timing or outcome of product development efforts, including FDA and other regulatory agency approvals and actions, if any; the impact of competitive products and pricing; the susceptibility of our generic and off-patent pharmaceutical products to competition, substitution policies and reimbursement policies of the government; the timing and success of product launches; difficulties or delays in manufacturing; the availability and pricing of third party sourced products and materials; successful compliance with FDA and other governmental regulations; the continuing consolidation of our customer base, which could adversely affect sales of our products; our dependence on a small number of distributors, the loss of any of which could have a material adverse effect; changes in the laws and regulations and such other risks and uncertainties outlined in Akorn's public filings with the SEC, including the Company’s Form 10-K for the fiscal year ended December 31, 2015.  Except as expressly required by law, Akorn disclaims any intent or obligation to update these forward-looking statements.

About Akorn:

Akorn, Inc. is a specialty generic pharmaceutical company engaged in the development, manufacture and marketing of multisource and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois; Somerset, New Jersey; Amityville, New York; Hettlingen, Switzerland and Paonta Sahib, India that manufacture ophthalmic, injectable and specialty sterile and non-sterile pharmaceuticals. Additional information is available on Akorn’s website at www.akorn.com.

Additional Financial Tables and Supplemental Information Table of Contents:

As of and for the fiscal year ended December 31, 2015 and 2014, respectively:
 Consolidated Balance Sheets 
 Consolidated Statements of Comprehensive Income 
 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA 
 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS 
 Reconciliation of GAAP Gross Margin % to non-GAAP Gross Margin % 
   
As of and for the quarter ended March 31, 2015 and 2014, respectively:
 Condensed Consolidated Balance Sheets 
 Condensed Consolidated Statements of Comprehensive Income 
 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA 
 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS 
   
As of and for the quarter and year-to-date period ended June 30, 2015 and 2014, respectively:
 Condensed Consolidated Balance Sheets 
 Condensed Consolidated Statements of Comprehensive Income 
 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA 
 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS 
   
As of and for the quarter and year-to-date period ended September 30, 2015 and 2014, respectively:
 Condensed Consolidated Balance Sheets 
 Condensed Consolidated Statements of Comprehensive Income 
 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA 
 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS 
   
For the quarter ended December 31, 2015 and 2014, respectively:
 Condensed Consolidated Statements of Comprehensive Income 
 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA 
 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS 
   


CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
 December 31,
 2015 2014
(as Restated)
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$346,266   $70,679  
Trade accounts receivable, net 150,621    187,545  
Inventories, net 185,316    135,197  
Deferred taxes, current 43,024    38,411  
Available for sale security, current 5,941    7,268  
Prepaid expenses and other current assets 19,988    37,061  
TOTAL CURRENT ASSETS 751,156    476,161  
PROPERTY, PLANT AND EQUIPMENT, NET 179,614    144,196  
OTHER LONG-TERM ASSETS   
Goodwill 284,710    285,283  
Product licensing rights, net 653,628    704,791  
Other intangibles, net 211,361    255,612  
Deferred financing costs, net 27,591    23,704  
Deferred taxes, non-current 3,757    2,084  
Long-term investments 129    211  
Other non-current assets 764    1,863  
TOTAL OTHER LONG-TERM ASSETS 1,181,940    1,273,548  
TOTAL ASSETS$2,112,710   $1,893,905  
LIABILITIES AND SHAREHOLDERS’ EQUITY   
CURRENT LIABILITIES   
Trade accounts payable$46,019   $47,317  
Purchase consideration payable, current 4,967    10,970  
Income taxes payable 23,670       
Accrued royalties 19,378    13,204  
Accrued compensation 15,866    13,467  
Current maturities of long-term debt 52,915    10,450  
Accrued administrative fees 37,094    40,870  
Accrued expenses and other liabilities 31,603    14,576  
TOTAL CURRENT LIABILITIES 231,512    150,854  
LONG-TERM LIABILITIES   
Long-term debt 1,021,488    1,114,481  
Deferred tax liability, non-current 231,382    269,428  
Lease incentive obligations and other long-term liabilities 6,763    2,836  
TOTAL LONG-TERM LIABILITIES 1,259,633    1,386,745  
TOTAL LIABILITIES 1,491,145    1,537,599  
SHAREHOLDERS’ EQUITY   
Common stock, no par value — 150,000,000 shares authorized; 119,427,471 and 111,734,901 shares issued and outstanding at December 31, 2015 and 2014 458,659    342,252  
Retained earnings 180,048    29,250  
Accumulated other comprehensive loss (17,142)   (15,195) 
TOTAL SHAREHOLDERS’ EQUITY 621,565    356,307  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$2,112,710   $1,893,905  
          


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Data)
      
 Year ended December 31,
    2014   
  2015  (as Restated)  2013 
REVENUES$985,076  $555,048  $317,711 
Cost of sales (exclusive of amortization of intangibles, included within operating expenses below) 389,064   293,688   145,807 
GROSS PROFIT 596,012   261,360   171,904 
Selling, general and administrative expenses 162,205   92,955   53,508 
Acquisition-related costs 1,841   32,840   2,912 
Research and development expenses 40,707   31,256   19,858 
Amortization of intangibles 66,272   43,493   7,422 
Impairment of intangible assets 30,376       
TOTAL OPERATING EXPENSES 301,401   200,544   83,700 
OPERATING INCOME 294,611   60,816   88,204 
Amortization of deferred financing costs (4,283)  (9,985)  (842)
Interest expense, net (51,973)  (35,657)  (8,649)
Equity in earnings of unconsolidated joint venture       80 
Bargain purchase gain 849      3,707 
Gain from product divestiture    9,297    
Other non-operating income (expense), net (7,048)  871   395 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 232,156   25,342   82,895 
Income tax provision 81,358   10,954   30,533 
INCOME FROM CONTINUING OPERATIONS$150,798  $14,388  $52,362 
Loss from discontinued operations, net of tax$  $(504) $ 
CONSOLIDATED NET INCOME$150,798  $13,884  $52,362 
CONSOLIDATED NET INCOME PER COMMON SHARE:     
Income from continuing operations, basic$1.29  $0.14  $0.54 
Loss from discontinued operations, basic$  $(0.01) $ 
CONSOLIDATED NET INCOME, BASIC$1.29  $0.13  $0.54 
Income from continuing operations, diluted$1.22  $0.13  $0.46 
Loss from discontinued operations, diluted$  $  $ 
CONSOLIDATED NET INCOME, DILUTED$1.22  $0.13  $0.46 
SHARES USED IN COMPUTING CONSOLIDATED NET INCOME PER COMMON     
SHARE:     
BASIC 116,980   103,480   96,181 
DILUTED 125,762   109,588   113,898 
            

FYE 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

  TWELVE MONTHS ENDED
  DECEMBER 31,
   2015  2014
 (as Restated)
     
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$  150,798  $  14,388 
     
ADJUSTMENTS TO ARRIVE AT EBITDA:   
 Depreciation expense$  19,939  $  14,214 
 Amortization expense$  66,272  $  43,493 
 Interest expense, net$  49,029  $  30,786 
 Non-cash & convertible debt interest expense$  2,944  $  4,871 
 Income tax provision (benefit)$  81,358  $  10,954 
EBITDA$  370,340  $  118,706 
     
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES  
     
 Acquisition-related expenses$  1,841  $  32,840 
 Non-cash stock compensation expense$  13,198  $  7,752 
 Restatement expense$  27,444  $  -  
 Gain from foreign currency forward contracts$  -   $  (689)
 Accelerated write-off of plant costs$  -   $  -  
 Bargain purchase gain$  (849) $  -  
 Amortization of unfavorable contract liability$  -   $  -  
 Gain from product divestiture$  369  $  (9,297)
 Amortization of inventory gross-up$  4,681  $  20,798 
 Debt financing costs$  4,283  $  9,985 
 Other costs associated with acquisitions$  460  $  1,400 
 Equity in earnings of unconsolidated JV$  -   $  -  
 Loss on Impairment$  33,003  $  -  
 Accelerated depreciation on plant assets$  -   $  949 
 Litigation settlement$  5,569  $  -  
ADJUSTED EBITDA$  460,339  $  182,444 
     

FYE 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

         
      TWELVE MONTHS ENDED
      December 31,
       2015  2014
(as Restated)
         
NET INCOME FROM CONTINUING OPERATIONS $150,798  $14,388 
         
INCOME TAX PROVISION    81,358   10,954 
         
INCOME BEFORE INCOME TAXES   232,156   25,342 
         
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:   
Acquisition-related expenses   1,841   32,840 
Restatement expenses    27,444   - 
Non-cash stock compensation expense  13,198   7,752 
Non-cash interest expense   2,944   4,871 
Amortization expense    66,272   43,493 
Gain from foreign currency forward contracts  -   (689)
Gain from product divestitures   369   (9,297)
Bargain purchase gain    (849)  - 
Other costs associated with dispositions  460   1,400 
Amortization of inventory gross-up   4,681   20,798 
Debt financing costs    4,283   9,985 
Loss on impairment    33,003   - 
Accelerated depreciation on plant assets  -   949 
Litigation settlement    5,569   - 
         
ADJUSTED INCOME BEFORE INCOME TAX   391,371   137,444 
         
ADJUSTED INCOME TAX PROVISION   137,155   59,411 
         
ADJUSTED NET INCOME    254,216   78,033 
         
ADJUSTED NET INCOME PER DILUTED SHARE (1) $2.02  $0.63 
         



(1) Twelve months ended December 31, 2014 adjusted net income per diluted share was calculated using diluted shares of approximately 123.1 million, which includes the previously anti-dilutive effect of convertible debt shares.

 

FYE 2015 Reconciliation of GAAP Gross Margin % to non-GAAP Gross Margin %:

           
  Twelve Months Ended Twelve Months Ended
  December 31, 2015 December 31, 2014 (as Restated)
In thousands USD, except per share amounts GAAPAdjustments Adjusted
NON-GAAP
 GAAPAdjustments Adjusted
NON-GAAP
Revenues $985,076   $985,076  $555,048   $555,048 
Cost of sales (exclusive of amortization of intangibles included below)  389,064  (6,275)a 382,789   293,688  (22,871)a 270,817 
GROSS PROFIT  596,012  6,275   602,287   261,360  22,871   284,231 
           
Gross Margin  60.5%   61.1%  47.1%   51.2%
           
a - Amortization of inventory step-up, stock-based compensation expense, and accelerated depreciation on plant assets (2014).
 


      
QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands)
      
  March 31, 2015
(Unaudited)
 December 31, 2014 (As restated) 
ASSETS     
CURRENT ASSETS     
Cash and cash equivalents$ 123,532   $70,679  
Trade accounts receivable, net  190,710   187,545  
Inventories, net  149,403   135,197  
Deferred taxes, current  39,564   38,411  
Available for sale security, current  5,558   7,268  
Prepaid expenses and other current assets  35,118   37,061  
TOTAL CURRENT ASSETS  543,885   476,161  
PROPERTY, PLANT AND EQUIPMENT, NET  175,991   144,196  
OTHER LONG-TERM ASSETS     
Goodwill  285,674   285,283  
Product licensing rights, net  689,490   704,791  
Other intangibles, net  254,590   255,612  
Deferred financing costs, net  22,687   23,704  
Deferred taxes, non-current  2,643   2,084  
Long-term investments  129   211  
Other non-current assets  1,248   1,863  
TOTAL OTHER LONG-TERM ASSETS  1,256,462   1,273,548  
TOTAL ASSETS$ 1,976,338   $1,893,905  
LIABILITIES AND SHAREHOLDERS’ EQUITY     
CURRENT LIABILITIES     
Trade accounts payable$ 57,971   $47,317  
Purchase consideration payable, current  12,367   10,970  
Income taxes payable           
Accrued royalties  13,948   13,204  
Accrued compensation  8,375   13,467  
Current maturities of long-term debt  10,450   10,450  
Accrued administrative fees  36,312   40,870  
Accrued expenses and other liabilities  14,428   14,576  
TOTAL CURRENT LIABILITIES  153,851   150,854  
LONG-TERM LIABILITIES     
Long-term debt  1,110,458   1,114,481  
Deferred tax liability, non-current  263,466   269,428  
Lease incentive obligations and other long-term liabilities  6,388   2,836  
TOTAL LONG-TERM LIABILITIES  1,380,312   1,386,745  
TOTAL LIABILITIES  1,534,163   1,537,599  
SHAREHOLDERS’ EQUITY     
Common stock, no par value — 150,000,000 shares authorized; 114,332,873 and 111,734,901 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively  388,475   342,252  
Warrants to acquire common stock           
Retained earnings  66,788   29,250  
Accumulated other comprehensive loss  (13,088)  (15,195) 
TOTAL SHAREHOLDERS’ EQUITY  442,175   356,307  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,976,338 $1,893,905  
        


    
QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
    
 First Quarter First Quarter
(as Restated)
  2015   2014 
Revenues$227,378      $90,622 
Cost of sales (exclusive of amortization of intangibles included below) 97,215   40,966 
GROSS PROFIT 130,163   49,656 
    
Selling, general and administrative expenses 29,986   16,586 
Acquisition-related costs 1,257   454 
Research and development expenses 9,276   4,419 
Amortization of intangibles 16,377   4,757 
TOTAL OPERATING EXPENSES 56,896   26,216 
OPERATING INCOME 73,267   23,440 
    
Amortization of deferred financing costs (996)  (4,251)
Interest expense, net (13,480)  (2,161)
Gain from product divestiture       
Bargain purchase gain 849      
Other non-operating income (expense), net (1,312)  567 
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 58,328   17,595 
Income tax provision (benefit) 20,790   8,101 
    
INCOME (LOSS) FROM CONTINUING OPERATIONS$37,538  $9,494 
(Loss) from discontinued operations, net of tax       
NET INCOME (LOSS)$37,538  $9,494 
NET INCOME (LOSS) PER SHARE:   
Income (loss) from continuing operations, basic$0.33  $0.10 
(Loss) from discontinued operations, basic$  $   
NET INCOME (LOSS), BASIC$0.33  $0.10 
    
Income (loss) from continuing operations, diluted$0.31  $0.08 
(Loss) from discontinued operations, diluted$  $   
NET INCOME (LOSS), DILUTED$0.31  $0.08 
    
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:   
BASIC 113,352   96,633 
DILUTED 125,377   116,884 
        

Quarter ended March 31, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

   
  THREE MONTHS ENDED
  MARCH 31,
   2015  2014
(as Restated)
     
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$37,538  $9,494 
     
ADJUSTMENTS TO ARRIVE AT EBITDA:   
 Depreciation expense$5,018  $1,917 
 Amortization expense$16,377  $4,757 
 Interest expense, net$12,302  $912 
 Non-cash interest expense$1,178  $1,249 
 Income tax provision (benefit)$20,790  $8,101 
EBITDA$93,203  $26,430 
     
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES  
     
 Acquisition-related expenses$1,257  $454 
 Non-cash stock compensation expense$2,974  $1,282 
 Restatement Expense$200   
 Gain from foreign currency forward contracts$-  $(579)
 Accelerated Write-off of plant costs$-  $- 
 Bargain purchase gain$(849) $- 
 Amortization of unfavorable contract liability  $- 
 Gain from product divestiture$144  $- 
 Amortization of inventory gross-up$4,681  $- 
 Debt financing costs$996  $4,251 
 Other costs associated with acquisitions$-  $- 
 Equity in earnings of Unconsolidated JV$-  $- 
 Loss on Impairment$-  $- 
 Accelerated depreciation on plant assets$-  $- 
 Litigation settlement$1,300  $- 
ADJUSTED EBITDA$103,906  $31,838 
        

Quarter ended March 31, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

       
      THREE MONTHS ENDED
      March 31,
       2015  2014
(as Restated)
         
NET INCOME FROM CONTINUING OPERATIONS $37,538  $9,494 
         
INCOME TAX PROVISION    20,790   8,101 
         
INCOME BEFORE INCOME TAXES   58,328   17,595 
         
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:   
Acquisition-related expenses   1,257   454 
Restatement expenses    200   - 
Non-cash stock compensation expense  2,974   1,282 
Non-cash interest expense   1,178   1,249 
Amortization expense    16,377   4,757 
Gain from foreign currency forward contracts  -   (579)
Gain from product divestitures   144   - 
Bargain purchase gain    (849)  - 
Other costs associated with dispositions  -   - 
Amortization of inventory gross-up   4,681   - 
Debt financing costs    996   4,251 
Loss on impairment    -   - 
Accelerated depreciation on plant assets  -   - 
Litigation settlement    1,300   - 
         
ADJUSTED INCOME BEFORE INCOME TAX   86,586   29,009 
         
ADJUSTED INCOME TAX PROVISION   30,343   12,540 
         
ADJUSTED NET INCOME    56,243   16,469 
         
ADJUSTED NET INCOME PER DILUTED SHARE $0.45  $0.14 
         


      
AKORN, INC.
QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
      
  June 30, 2015
(Unaudited)
 December 31, 2014
(As restated)
 
ASSETS     
CURRENT ASSETS     
Cash and cash equivalents$ 257,090  $   70,679  
Trade accounts receivable, net  130,812   187,545  
Inventories, net  156,315   135,197  
Deferred taxes, current  40,717   38,411  
Available for sale security, current  5,632   7,268  
Prepaid expenses and other current assets  16,447   37,061  
TOTAL CURRENT ASSETS  607,013   476,161  
PROPERTY, PLANT AND EQUIPMENT, NET  179,239   144,196  
OTHER LONG-TERM ASSETS     
Goodwill  285,356   285,283  
Product licensing rights, net  674,687   704,791  
Other intangibles, net  251,283   255,612  
Deferred financing costs, net  22,612   23,704  
Deferred taxes, non-current  2,982   2,084  
Long-term investments  130   211  
Other non-current assets  1,282   1,863  
TOTAL OTHER LONG-TERM ASSETS  1,238,332   1,273,548  
TOTAL ASSETS$ 2,024,584  $   1,893,905  
LIABILITIES AND SHAREHOLDERS’ EQUITY     
CURRENT LIABILITIES     
Trade accounts payable$ 45,536  $ 47,317  
Purchase consideration payable, current  4,904   10,970  
Income taxes payable  3,525        
Accrued royalties  13,716   13,204  
Accrued compensation  11,286   13,467  
Current maturities of long-term debt  53,971   10,450  
Accrued administrative fees  45,229   40,870  
Accrued expenses and other liabilities  20,813   14,576  
TOTAL CURRENT LIABILITIES  198,980   150,854  
LONG-TERM LIABILITIES     
Long-term debt  1,026,713   1,114,481  
Deferred tax liability, non-current  256,035   269,428  
Lease incentive obligations and other long-term liabilities  6,910   2,836  
TOTAL LONG-TERM LIABILITIES  1,289,658   1,386,745  
TOTAL LIABILITIES  1,488,638   1,537,599  
SHAREHOLDERS’ EQUITY     
Common stock, no par value — 150,000,000 shares authorized; 119,199,049 and 111,734,901shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively  449,742   342,252  
Warrants to acquire common stock          
Retained earnings  99,296   29,250  
Accumulated other comprehensive loss  (13,092)  (15,195) 
TOTAL SHAREHOLDERS’ EQUITY  535,946   356,307  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$ 2,024,584     $ 1,893,905  
       


          
QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
          
 Second Quarter Second Quarter YTD -Second Quarter YTD – Second Quarter  
  2015  2014
(as Restated)
  2015  2014
(as Restated)
  
Revenues$220,920    $133,872    $448,298    $224,494   
Cost of sales (exclusive of amortization of intangibles included below) 92,513   73,000   189,728    113,967   
GROSS PROFIT 128,407   60,871   258,570    110,527   
           
Selling, general and administrative expenses 35,208   21,168   65,194    37,754   
Acquisition-related costs 225   20,940   1,482    21,394   
Research and development expenses 10,588   9,588   19,864    14,007   
Amortization of intangibles 16,284   8,439   32,661    13,196   
TOTAL OPERATING EXPENSES 62,305   60,135   119,201    86,351   
OPERATING INCOME 66,102   736   139,369    24,176   
           
Amortization of deferred financing costs (1,026)  (2,346)  (2,022)   (6,597)  
Interest expense, net (13,235)  (7,917)  (26,715)   (10,076)  
Gain from product divestiture    8,490         8,490   
Bargain purchase gain         849        
Other non-operating income (expense), net (1,483)  (214)  (2,795)   351   
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 50,358   (1,251)  108,686    16,344   
Income tax provision (benefit) 17,850   (499)  38,640    7,602   
          
INCOME (LOSS) FROM CONTINUING OPERATIONS$32,508  $(752) $70,046  $ 8,742   
(Loss) from discontinued operations, net of tax$  $(504) $    $ (504)  
NET INCOME (LOSS)$32,508  $(1,256) $70,046  $ 8,238   
NET INCOME (LOSS) PER SHARE:          
Income (loss) from continuing operations, basic$0.28  $(0.01) $0.61  $ 0.09   
(Loss) from discontinued operations, basic$  $    $    $ (0.01)  
NET INCOME (LOSS), BASIC$0.28  $(0.01) $0.61  $ 0.08   
          
Income (loss) from continuing operations, diluted$0.27  $(0.01) $0.57  $ 0.07   
(Loss) from discontinued operations, diluted$  $    $    $     
NET INCOME (LOSS), DILUTED$0.27  $(0.01) $0.57  $ 0.07   
          
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:          
BASIC 115,808   103,183   114,587    99,926   
DILUTED 125,919   103,183   125,650    117,576   
                   

Quarter ended June 30, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

  
 THREE MONTHS ENDED
 JUNE 30,
  2015  2014
(as Restated)
    
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$32,508  $(752)
    
ADJUSTMENTS TO ARRIVE AT EBITDA:   
Depreciation expense$4,285  $3,557 
Amortization expense$16,284  $8,439 
Interest expense, net$12,373  $6,511 
Non-cash interest expense$862  $1,406 
Income tax provision (benefit)$17,850  $(499)
EBITDA$84,162  $18,662 
    
    
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES   
Acquisition-related expenses$225  $20,940 
Non-cash stock compensation expense$3,157  $1,992 
Restatement Expense$5,101  $- 
Gain from foreign currency forward contracts$-  $(125)
Accelerated Write-off of plant costs$-  $- 
Bargain purchase gain$-  $- 
Amortization of unfavorable contract liability$-  $- 
Gain from product divestiture$215  $(8,490)
Amortization of inventory gross-up$-  $3,559 
Debt financing costs$1,026  $2,346 
Other costs associated with acquisitions$-  $1,400 
Equity in earnings of Unconsolidated JV$-  $- 
Loss on Impairment$2,627  $- 
Accelerated depreciation on plant assets$-  $- 
Litigation settlement$-  $- 
ADJUSTED EBITDA$96,513  $40,284 
        

Quarter ended June 30, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

       
      THREE MONTHS ENDED
      June 30,
       2015  2014
(as Restated)
         
NET INCOME FROM CONTINUING OPERATIONS $32,508  $(752)
         
INCOME TAX PROVISION    17,850   (499)
         
INCOME BEFORE INCOME TAXES   50,358   (1,251)
         
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:   
Acquisition-related expenses   225   20,940 
Restatement expenses    5,101   - 
Non-cash stock compensation expense  3,157   1,992 
Non-cash interest expense   862   1,406 
Amortization expense    16,284   8,439 
Gain from foreign currency forward contracts  -   (125)
Gain from product divestitures   215   (8,490)
Bargain purchase gain    -   - 
Other costs associated with dispositions  -   1,400 
Amortization of inventory gross-up   -   3,559 
Debt financing costs    1,026   2,346 
Loss on impairment    2,627   - 
Accelerated depreciation on plant assets  -   - 
Litigation settlement    -   - 
         
ADJUSTED INCOME BEFORE INCOME TAX   79,855   30,216 
         
ADJUSTED INCOME TAX PROVISION   27,985   13,170 
         
ADJUSTED NET INCOME    51,870   17,046 
         
ADJUSTED NET INCOME PER DILUTED SHARE $0.41  $0.14 
         


      
QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
      
  September 30, 2015
(Unaudited)
 December 31, 2014
(As restated)
 
ASSETS     
CURRENT ASSETS     
Cash and cash equivalents$ 314,465   $70,679  
Trade accounts receivable, net  138,920   187,545  
Inventories, net  175,851   135,197  
Deferred taxes, current  41,871   38,411  
Available for sale security, current  5,637   7,268  
Prepaid expenses and other current assets  22,102   37,061  
TOTAL CURRENT ASSETS  698,846   476,161  
PROPERTY, PLANT AND EQUIPMENT, NET  177,433   144,196  
OTHER LONG-TERM ASSETS     
Goodwill  284,708   285,283  
Product licensing rights, net  699,443   704,791  
Other intangibles, net  212,360   255,612  
Deferred financing costs, net  24,263   23,704  
Deferred taxes, non-current  3,337   2,084  
Long-term investments  129   211  
Other non-current assets  748   1,863  
TOTAL OTHER LONG-TERM ASSETS  1,224,988   1,273,548  
TOTAL ASSETS$ 2,101,267  $ 1,893,905  
LIABILITIES AND SHAREHOLDERS’ EQUITY     
CURRENT LIABILITIES     
Trade accounts payable$ 57,765  $ 47,317  
Purchase consideration payable, current  4,936   10,970  
Income taxes payable  15,489        
Accrued royalties  14,452   13,204  
Accrued compensation  15,958   13,467  
Current maturities of long-term debt  53,450   10,450  
Accrued administrative fees  46,929   40,870  
Accrued expenses and other liabilities  28,767   14,576  
TOTAL CURRENT LIABILITIES  237,746   150,854  
LONG-TERM LIABILITIES     
Long-term debt  1,024,100   1,114,481  
Deferred tax liability, non-current  248,279   269,428  
Lease incentive obligations and other long-term liabilities  6,640   2,836  
TOTAL LONG-TERM LIABILITIES  1,279,019   1,386,745  
TOTAL LIABILITIES  1,516,765   1,537,599  
SHAREHOLDERS’ EQUITY     
Common stock, no par value — 150,000,000 shares authorized; 119,313,203 and 111,734,901 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively  453,940   342,252  
Warrants to acquire common stock          
Retained earnings  147,263   29,250  
Accumulated other comprehensive loss  (16,701)  (15,195) 
TOTAL SHAREHOLDERS’ EQUITY  584,502   356,307

  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$ 2,101,267     1,893,905   
             


          
QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
          
 Third Quarter Third Quarter YTD -Third Quarter YTD – Third Quarter  
  2015  2014
(as Restated)
  2015  2014
(as Restated)
  
Revenues$256,801    $127,698    $705,099    $352,192   
Cost of sales (exclusive of amortization of intangibles included below) 93,789   82,198   283,517    196,165   
GROSS PROFIT 163,012   45,500   421,582    156,027   
           
Selling, general and administrative expenses 45,031   26,799   110,225    64,553   
Acquisition-related costs 230   8,159   1,712    29,553   
Research and development expenses 10,439   8,758   30,303    22,765   
Amortization of intangibles 16,545   13,814   49,206    27,010   
TOTAL OPERATING EXPENSES 72,245   57,530   191,446    143,881   
OPERATING INCOME (LOSS) 90,767   (12,030)  230,136    12,146   
           
Amortization of deferred financing costs (1,086)  (2,272)  (3,108)   (8,869)  
Interest expense, net (12,652)  (11,804)  (39,367)   (21,880)  
Gain from product divestiture    847         9,337   
Bargain purchase gain         849        
Other non-operating income (expense), net (3,014)  1,012   (5,809)   1,363   
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 74,015   (24,247)  182,701    (7,903)  
Income tax provision (benefit) 26,048   (11,914)  64,688    (4,312)  
          
INCOME (LOSS) FROM CONTINUING OPERATIONS$47,967  $(12,333) $118,013  $ (3,591)  
(Loss) from discontinued operations, net of tax$  $    $    $ (504)  
NET INCOME (LOSS)$47,967  $(12,333) $118,013  $ (4,095)  
NET INCOME (LOSS) PER SHARE:          
Income (loss) from continuing operations, basic$0.40  $(0.12) $1.02  $ (0.04)  
(Loss) from discontinued operations, basic$  $    $    $     
NET INCOME (LOSS), BASIC$0.40  $(0.12) $1.02  $ (0.04)  
          
Income (loss) from continuing operations, diluted$0.39  $(0.12) $0.96  $ (0.04)  
(Loss) from discontinued operations, diluted$  $    $    $     
NET INCOME (LOSS), DILUTED$0.39  $(0.12) $0.96  $ (0.04)  
          
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:          
BASIC 119,260   105,438   116,162    101,784   
DILUTED 125,891   105,438   125,738    101,784   
                   

Quarter ended September 30, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

   
  THREE MONTHS ENDED
  SEPTEMBER 30,
   2015  2014
 (as Restated)
     
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$47,967  $(12,333)
     
ADJUSTMENTS TO ARRIVE AT EBITDA:   
 Depreciation expense$5,145  $4,972 
 Amortization expense$16,545  $13,814 
 Interest expense, net$12,201  $10,505 
 Non-cash interest expense$451  $1,299 
 Income tax provision (benefit)$26,048  $(11,914)
EBITDA$108,357  $6,343 
     
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES  
     
 Acquisition-related expenses$230  $8,159 
 Non-cash stock compensation expense$3,341  $1,790 
 Restatement Expense$9,571  $- 
 Gain from foreign currency forward contracts$-  $15 
 Accelerated Write-off of plant costs$-  $- 
 Bargain purchase gain$-  $- 
 Amortization of unfavorable contract liability$-  $- 
 Gain from product divestiture$11  $(847)
 Amortization of inventory gross-up$-  $6,285 
 Debt financing costs$1,086  $2,272 
 Other costs associated with acquisitions$-  $- 
 Equity in earnings of Unconsolidated JV$-  $- 
 Loss on Impairment$-  $- 
 Accelerated depreciation on plant assets$-  $949 
 Litigation settlement$2,750  $- 
ADJUSTED EBITDA$125,346  $24,966 
        

Quarter ended September 30, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

       
      THREE MONTHS ENDED
      September 30,
       2015  2014
(as Restated)
         
NET INCOME FROM CONTINUING OPERATIONS $47,967  $(12,333)
         
INCOME TAX PROVISION    26,048   (11,914)
         
INCOME BEFORE INCOME TAXES   74,015   (24,247)
         
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:   
Acquisition-related expenses   230   8,159 
Restatement expenses    9,571   - 
Non-cash stock compensation expense  3,341   1,790 
Non-cash interest expense   451   1,299 
Amortization expense    16,545   13,814 
Gain from foreign currency forward contracts  -   15 
Gain from product divestitures   11   (847)
Bargain purchase gain    -   - 
Other costs associated with dispositions  -   - 
Amortization of inventory gross-up   -   6,285 
Debt financing costs    1,086   2,272 
Loss on impairment    -   - 
Accelerated depreciation on plant assets  -   949 
Litigation settlement    2,750   - 
         
ADJUSTED INCOME BEFORE INCOME TAX   108,000   9,489 
         
ADJUSTED INCOME TAX PROVISION   37,906   3,992 
         
ADJUSTED NET INCOME    70,094   5,497 
         
ADJUSTED NET INCOME PER DILUTED SHARE $0.56  $0.05 
         


      
QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
      
 Fourth Quarter Fourth Quarter  
  2015  2014
(As restated)
  
Revenues$279,977    $202,856    
Cost of sales (exclusive of amortization of intangibles included below) 105,547   97,523   
GROSS PROFIT 174,430   105,333   
      
Selling, general and administrative expenses 51,980   28,402   
Acquisition-related costs 129   3,287   
Research and development expenses 10,404   8,491   
Amortization of intangibles 17,066   16,483   
Intangible impairment 30,376        
TOTAL OPERATING EXPENSES 109,955   56,663   
OPERATING INCOME 64,475   48,670   
      
Amortization of deferred financing costs (1,175)  (1,116)  
Interest expense, net (12,606)  (13,777)  
Gain (loss) from product divestiture    (40)  
Other non-operating income (expense), net (1,239)  (492)  
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 49,455   33,245   
Income tax provision (benefit) 16,670   15,266   
      
INCOME (LOSS) FROM CONTINUING OPERATIONS$32,785  $17,979   
(Loss) from discontinued operations, net of tax$  $     
NET INCOME (LOSS)$32,785  $17,979   
NET INCOME (LOSS) PER SHARE:     
Income (loss) from continuing operations, basic$0.27  $0.17   
(Loss) from discontinued operations, basic$  $     
NET INCOME (LOSS), BASIC$0.27  $0.17   
      
Income (loss) from continuing operations, diluted$0.27  $0.16   
(Loss) from discontinued operations, diluted$  $     
NET INCOME (LOSS), DILUTED$0.27  $0.16   
      
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:     
BASIC 119,390   108,515   
DILUTED 125,698   124,491   
          

Quarter ended December 31, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

   
  THREE MONTHS ENDED
  DECEMBER 31,
   2015  2014
(as Restated)
     
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$  32,785  $  17,979 
     
ADJUSTMENTS TO ARRIVE AT EBITDA:   
 Depreciation expense$  5,491  $  3,768 
 Amortization expense$  17,066  $  16,483 
 Interest expense, net$  12,153  $  12,860 
 Non-cash interest expense$  453  $  917 
 Income tax provision (benefit)$  16,670  $  15,267 
EBITDA$  84,618  $  67,274 
     
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES  
     
 Acquisition-related expenses$  129  $  3,287 
 Non-cash stock compensation expense$  3,726  $  2,688 
 Restatement Expense$  12,572  $  -  
 Gain from foreign currency forward contracts$  -   $  -  
 Accelerated Write-off of plant costs$  -   $  -  
 Bargain purchase gain$  -   $  -  
 Amortization of unfavorable contract liability$  -   $  -  
 Gain from product divestiture$  -   $  40 
 Amortization of inventory gross-up$  -   $  10,954 
 Debt financing costs$  1,175  $  1,115 
 Other costs associated with acquisitions$  460  $  -  
 Equity in earnings of Unconsolidated JV$  -   $  -  
 Loss on Impairment$  30,376  $  -  
 Accelerated depreciation on plant assets$  -   $  -  
 Litigation settlement$  1,519  $  -  
ADJUSTED EBITDA$  134,575  $  85,358 
        

Quarter ended December 31, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

       
      THREE MONTHS ENDED
      December 31,
       2015  2014
(as Restated)
         
NET INCOME FROM CONTINUING OPERATIONS $32,785  $17,979 
         
INCOME TAX PROVISION    16,670   15,267 
         
INCOME BEFORE INCOME TAXES   49,455   33,246 
         
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:   
Acquisition-related expenses   129   3,287 
Restatement expenses    12,572   - 
Non-cash stock compensation expense  3,726   2,688 
Non-cash interest expense   453   917 
Amortization expense    17,066   16,483 
Gain from foreign currency forward contracts  -   - 
Gain from product divestitures   -   40 
Bargain purchase gain    -   - 
Other costs associated with dispositions  460   - 
Amortization of inventory gross-up   -   10,954 
Debt financing costs    1,175   1,115 
Loss on impairment    30,376   - 
Accelerated depreciation on plant assets  -   - 
Litigation settlement    1,519   - 
         
ADJUSTED INCOME BEFORE INCOME TAX   116,931   68,730 
         
ADJUSTED INCOME TAX PROVISION   40,921   29,709 
         
ADJUSTED NET INCOME    76,010   39,021 
         
ADJUSTED NET INCOME PER DILUTED SHARE $0.60  $0.31 
         


Investors/Media:
Stephanie Carrington
ICR, Inc.
(646) 277-1282
Stephanie.carrington@icrinc.com


The following information was filed by Akorn Inc (AKRX) on Tuesday, May 10, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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