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Amphastar Pharmaceuticals, Inc. (AMPH) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

Amphastar Pharmaceuticals, Inc.

CIK: 1297184 Ticker: AMPH

EXHIBIT 99.1

Amphastar Pharmaceuticals Reports Revenues of $55.9 Million for the Fourth Quarter Ended December 31, 2014

RANCHO CUCAMONGA, Calif., March 24, 2015 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (Nasdaq:AMPH) ("Amphastar" or the "Company") today reported results for the fourth quarter ended December 31, 2014.

  • Net revenues of $55.9 million for the fourth quarter
  • GAAP net loss of $2.5 million, or $0.06 per diluted share for the fourth quarter
  • Adjusted non-GAAP net loss of $1.5 million, or $0.03 per diluted share for the fourth quarter
  Three Months Ended
December 31,
Years Ended
December 31,
  2014 2013 2014 2013
  (in thousands, except per share data)
Net revenues  $ 55,877  $ 54,877  $ 210,461  $ 229,681
GAAP net income (loss)  $ (2,521)  $ 1,829  $ (10,699)  $ 11,862
Adjusted non-GAAP net income (loss)*  $ (1,496)  $ 3,258  $ (5,003)  $ 17,686
GAAP diluted EPS  $ (0.06)  $ 0.05  $ (0.25)  $ 0.31
Adjusted non-GAAP diluted EPS*  $ (0.03)  $ 0.08  $ (0.12)  $ 0.45
         
(*see Table II for reconciliation to GAAP numbers)

Fourth Quarter Results

For the three months ended December 31, 2014, the Company reported net revenues of $55.9 million, an increase of 2% from $54.9 million for the same prior year period.

During the quarter, net revenues of enoxaparin were $22.1 million, a decrease of 36% compared to $34.6 million for the same prior year period, which is due to a decrease in the average selling price.

Sales of our insulin API products were $5.9 million.

Other finished pharmaceutical product revenues were $27.9 million for the quarter, an increase of 37% compared to $20.3 million for the same prior year period.

Cost of revenues were $43.9 million, or 79% of revenues, and $35.2 million, or 64% of revenues, for the three months ended December 31, 2014 and 2013, respectively, representing an increase of $8.7 million, or 25%. The increase is primarily due to the cost of revenues at our French subsidiary, AFP, as we prepared to increase production to meet the demand of MannKind. Decreases in the average selling price of enoxaparin and negative gross margins on insulin products contributed to the increase in costs as a percentage of revenues.

Selling, distribution, and marketing expenses were $1.5 million and $1.3 million for the three months ended December 31, 2014 and 2013, respectively. General and administrative expenses were $9.8 million and $8.0 million for the three months ended December 31, 2014 and 2013, respectively. The increase is primarily due to the inclusion of expenses at AFP, which we acquired in April 2014.

For the three months ended December 31, 2014, research and development expenses increased by 4% to $7.6 million from $7.3 million, compared to the same period in the prior year. The increase was primarily due to increases in clinical trial expenses and other expenses related to purchases of materials and other research and development supplies during the three months ended December 31, 2014.

The Company reported a quarterly net loss of $2.5 million, or $0.06 per fully diluted share, for the three months ended December 31, 2014, compared to net income of $1.8 million, or $0.05 per fully diluted share, for the same period in the prior year. The Company reported an adjusted non-GAAP quarterly net loss of $1.5 million, or $0.03 per fully diluted share, for the three months ended December 31, 2014, compared to adjusted non-GAAP net income of $3.3 million, or $0.08 per fully diluted share, for the same period in the prior year.

Year-End Results

For the year ended December 31, 2014, the Company reported net revenues of $210.5 million, a decrease of 8% from $229.7 million for the same prior year period.

During the year, net revenues of enoxaparin were $107.5 million, a decrease of 26% compared to $145.9 million for the same prior year period, due to a decrease in the average selling price. Sales of our insulin products were $12.0 million.

Other finished product revenues were $91.0 million for the year, an increase of 9% compared to $83.8 million for the same prior year period. The increase is primarily related to increased demand.

Cost of revenues were $159.2 million, or 76% or revenues, and $142.7 million, or 62% of revenues, for the year ended December 31, 2014 and 2013, respectively, representing an increase of $16.5 million, or 12%. The increase is primarily due to the cost of revenues at our French subsidiary, AFP.

Selling, distribution, and marketing expenses were $5.6 million and $5.3 million for the year ended December 31, 2014 and 2013, respectively. General and administrative expenses were $34.8 million and $31.0 million for the year ended December 31, 2014 and 2013, respectively. The increase is primarily related to the inclusion of expenses at AFP, which we acquired in April 2014, and an increase in corporate compensation expense including stock-based compensation expense.

For the year ended December 31, 2014, research and development expenses decreased by 14% to $28.4 million from $33.0 million, compared to the same period in the prior year. The decrease was primarily due to a decrease in submission fees paid to the FDA. This decrease was partially offset by an increase in clinical trials expense. Research and development expenses are expected to increase in the next several quarters as we begin further clinical and pre-clinical trials.

The Company reported an annual net loss of $10.7 million, or $0.25 per fully diluted share, for the year ended December 31, 2014, compared to net income of $11.9 million, or $0.31 per fully diluted share, for the same period in the prior year. The Company reported an adjusted non-GAAP annual net loss of $5.0 million, or $0.12 per fully diluted share, for the year ended December 31, 2014, compared to adjusted non-GAAP net income of $17.7 million, or $0.45 per fully diluted share, for the same period in the prior year.

Liquidity

Our cash and cash equivalents, and short term investments at December 31, 2014 were $69.3 million. Cash flow provided by operating activities were $12.4 million in the quarter and $21.1 million for the year ended December 31, 2014.

Dr. Jack Zhang, CEO, commented: "We are pleased with our strong cash flow from operations. More importantly, we have made significant progress on key projects in R&D."

Non-GAAP Financial Measures

The Company is disclosing non-GAAP financial measures when providing financial results. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with accounting principles generally accepted in the U.S. or "GAAP." In addition to disclosing its financial results determined in accordance with GAAP, the Company is disclosing certain non-GAAP results that exclude amortization expense, share-based compensation and impairment charges in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance, because the Company's management uses these measures internally for forecasting, budgeting, and measuring its operating performance. Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. 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 measure set forth below and 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.

Conference Call Information

The Company will hold a conference call to discuss its financial results today, March 24, 2015, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free 877-881-2595, or 315-625-3083 for international callers, five minutes before the conference. The passcode for the conference call is 8342521. The call can also be accessed on the Investors page on the Company's website www.amphastar.com.

Pipeline Information

The Company currently has three abbreviated new drug applications, or ANDAs, filed with the FDA targeting products with a market size of over $0.5 billion, and another ten generic products in development targeting products with a market size of over $14.0 billion. The proprietary pipeline includes a new drug application or NDA for Primatene® and an NDA supplement for Amphadase®. The Company is currently developing six other proprietary drugs including injectables, inhalation products, and other dosage forms. Market information is based on IMS Health data for the 12 months ended December 31, 2014.

Company Information

Amphastar is a specialty pharmaceutical company that primarily develops, manufactures, markets, and sells generic and proprietary injectable and inhalation products, including products with high technical barriers to market entry. Additionally, in 2014, the Company commenced sales of insulin active pharmaceutical ingredient. Most of the Company's finished products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers.

Forward Looking Statements

This press release contains forward-looking statements, including statements relating to Amphastar. These statements are not historical facts but rather are based on Amphastar's current expectations, estimates, and projections regarding Amphastar's business, operations and other similar or related factors. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates," and other similar or related expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance, and they involve risks, uncertainties, and assumptions that are difficult or impossible to predict. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Amphastar's filings with the SEC.

Table I
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Statement of Operations
(Unaudited; in thousands, except per share data)
 
  Three Months Ended
December 31,
Years Ended
December 31,
  2014 2013 2014 2013
         
Net revenues  $ 55,877  $ 54,877  $ 210,461  $ 229,681
Cost of revenues  43,916  35,247  159,205  142,725
Gross profit  11,961  19,630  51,256  86,956
         
Operating expenses:        
Selling, distribution, and marketing  1,497  1,290  5,564  5,349
General and administrative  9,770  8,007  34,809  30,972
Research and development  7,639  7,284  28,427  33,019
Impairment of long-lived assets  79  119  439  126
Total operating expenses  18,985  16,700  69,239  69,466
         
Income (loss) from operations  (7,024)  2,930  (17,983)  17,490
         
Non-operating income (expense), net  1,207  (148)  (165)  (263)
         
Income (loss) before income taxes  (5,817)  2,782  (18,148)  17,227
Income tax expense (benefit)  (3,296)  953  (7,449)  5,365
         
Net income (loss)  $ (2,521)  $ 1,829  $ (10,699)  $ 11,862
         
Net income (loss) per common share:        
Basic  $ (0.06)  $ 0.05  $ (0.25)  $ 0.31
Diluted  $ (0.06)  $ 0.05  $ (0.25)  $ 0.31
         
Weighted-average shares used to compute net income (loss) per common share:        
Basic  44,648  38,724  41,957  38,712
Diluted  44,648  39,141  41,957  38,883
         
Table II
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)
 
  Three Months Ended December 31,    
  2014 2013    
  GAAP Non-GAAP
Adjustments*
Non-GAAP As
Adjusted
GAAP Non-GAAP
Adjustments*
Non-GAAP As
Adjusted
   
Net revenues  $ 55,877  $ --   $ 55,877  $ 54,877  $ --   $ 54,877    
Cost of revenues  43,916  (751)  43,165  35,247  (749)  34,498    
Gross profit  11,961  751  12,712  19,630  749  20,379    
                 
Operating expenses:                
Selling, distribution, and marketing  1,497  (35)  1,462  1,290  (28)  1,262    
General and administrative  9,770  (1,323)  8,447  8,007  (1,147)  6,860    
Research and development  7,639  (177)  7,462  7,284  (131)  7,153    
Impairment of long-lived assets  79  (79)  --   119  (119)  --     
Total operating expenses  18,985  (1,614)  17,371  16,700  (1,425)  15,275    
                 
Income (loss) from operations  (7,024)  2,365  (4,659)  2,930  2,174  5,104    
                 
Non-operating income (expense), net  1,207  --   1,207  (148)  --   (148)    
                 
Income (loss) before income taxes  (5,817)  2,365  (3,452)  2,782  2,174  4,956    
Income tax expense (benefit)  (3,296)  1,340  (1,956)  953  745  1,698    
                 
Net income (loss)  $ (2,521)  $ 1,025  $ (1,496)  $ 1,829  $ 1,429  $ 3,258    
                 
Net income (loss) per common share:                
Basic  $ (0.06)    $ (0.03)  $ 0.05    $ 0.08    
Diluted  $ (0.06)    $ (0.03)  $ 0.05    $ 0.08    
                 
Weighted-average shares used to compute net income (loss) per common share:                
Basic  44,648    44,648  38,724    38,724    
Diluted  44,648    44,648  39,141    39,141    
                 
* Non-GAAP adjustments include reversal of intangible amortization expense and share-based compensation as follows, as well as the reversal of impairment of long-lived assets:    
     
 
  Three Months Ended December 31,
  2014 2013
  Intangible
Amortization
Expense
Share-Based
Compensation
Expense
Impairment of
Long-Lived
Assets 
Total Non-
GAAP
Adjustment
Intangible
Amortization
Expense
Share-Based
Compensation
Expense
Impairment of
Long-Lived
Assets 
Total Non-
GAAP
Adjustment
Cost of revenues $ (445) $ (306)   $ (751) $ (446) $ (303)   $ (749)
Selling, distribution, and marketing  --  (35)    (35)  --  (28)    (28)
General and administrative  (35)  (1,288)    (1,323)  (32)  (1,115)    (1,147)
Research and development  --  (177)    (177)  --  (131)    (131)
Impairment of long-lived assets      (79)  (79)      (119)  (119)
                 
Reconciliation of Non-GAAP Measures (continued)
 
  Years Ended December 31,    
  2014 2013    
  GAAP Non-GAAP
Adjustments*
Non-GAAP
As Adjusted
GAAP Non-GAAP
Adjustments*
Non-GAAP
As Adjusted
   
                 
Net revenues  $ 210,461  $ --   $ 210,461  $ 229,681  $ --   $ 229,681    
Cost of revenues  159,205  (3,360)  155,845  142,725  (3,285)  139,440    
Gross profit  51,256  3,360  54,616  86,956  3,285  90,241    
                 
Operating expenses:                
Selling, distribution, and marketing  5,564  (120)  5,444  5,349  (132)  5,217    
General and administrative  34,809  (5,082)  29,727  30,972  (4,216)  26,756    
Research and development  28,427  (661)  27,766  33,019  (699)  32,320    
Impairment of long-lived assets  439  (439)  --   126  (126)  --     
Total operating expenses  69,239  (6,302)  62,937  69,466  (5,173)  64,293    
                 
Income (loss) from operations  (17,983)  9,662  (8,321)  17,490  8,458  25,948    
                 
Non-operating income (expense), net  (165)  --   (165)  (263)  --   (263)    
                 
Income (loss) before income taxes  (18,148)  9,662  (8,486)  17,227  8,458  25,685    
Income tax expense (benefit)  (7,449)  3,966  (3,483)  5,365  2,634  7,999    
                 
Net income (loss)  $ (10,699)  $ 5,696  $ (5,003)  $ 11,862  $ 5,824  $ 17,686    
                 
Net income (loss) per common share:                
Basic  $ (0.25)    $ (0.12)  $ 0.31    $ 0.46    
Diluted  $ (0.25)    $ (0.12)  $ 0.31    $ 0.45    
                 
Weighted-average shares used to compute net income (loss) per common share:                
Basic  41,957    41,957  38,712    38,712    
Diluted  41,957    41,957  38,883    38,883    
                 
* Non-GAAP adjustments include reversal of intangible amortization expense and share-based compensation as follows, as well as the reversal of impairment of long-lived assets:    
                 
                 
  Years Ended December 31,
  2014 2013
  Intangible
Amortization
Expense
Share-Based
Compensation
Expense
Impairment of
Long-Lived
Assets
Total Non-
GAAP
Adjustment
Intangible
Amortization
Expense
Share-Based
Compensation
Expense
Impairment of
Long-Lived
Assets
Total Non-
GAAP
Adjustment
Cost of revenues $ (1,782) $ (1,578) $ -- $ (3,360) $ (1,782) $ (1,503) $ -- $ (3,285)
Selling, distribution, and marketing  --  (120)  --  (120)  --  (132)  --  (132)
General and administrative  (137)  (4,945)  --  (5,082)  (124)  (4,092)  --  (4,216)
Research and development  --  (661)  --  (661)  --  (699)  --  (699)
Impairment of long-lived assets  --  --  (439)  (439)  --  --  (126)  (126)
CONTACT: Amphastar Pharmaceuticals, Inc.
         Bill Peters
         Chief Financial Officer
         (909) 980-9484

The following information was filed by Amphastar Pharmaceuticals, Inc. (AMPH) on Tuesday, March 24, 2015 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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Inside this 10-K Annual Report

Consolidated Balance Sheets
Consolidated Balance Sheets (parentheticals)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income (loss)
Consolidated Statements Of Operations
Consolidated Statements Of Stockholders' Equity
Consolidated Statements Of Stockholders' Equity (parentheticals)
Accounting Policies, By Policy (policies)
Document And Entity Information
Note 1 - General
Note 10 - Inventories
Note 10 - Inventories (details) - Analysis Of Inventories
Note 10 - Inventories (tables)
Note 11 - Property, Plant, And Equipment
Note 11 - Property, Plant, And Equipment (details)
Note 11 - Property, Plant, And Equipment (details) - Property, Plant, And Equipment
Note 11 - Property, Plant, And Equipment (tables)
Note 12 - Impairment Of Long-lived Assets
Note 12 - Impairment Of Long-lived Assets (details)
Note 13 - Debt
Note 13 - Debt (details)
Note 13 - Debt (details) - Debt Consists Of The Following
Note 13 - Debt (details) - Long-term Debt Maturities
Note 13 - Debt (tables)
Note 14 - Income Taxes
Note 14 - Income Taxes (details)
Note 14 - Income Taxes (details) - Deferred Tax Assets And Liabilities
Note 14 - Income Taxes (details) - Income Before Tax, Domestic And Foreign
Note 14 - Income Taxes (details) - Income Tax Rate Reconciliation
Note 14 - Income Taxes (details) - Provision (benefit) For Income Taxes
Note 14 - Income Taxes (details) - Unrecognized Tax Benefits
Note 14 - Income Taxes (tables)
Note 15 - Stockholders' Equity
Note 15 - Stockholders' Equity (details)
Note 15 - Stockholders' Equity (details) - Information Relating To Dsu Grants And Deliveries
Note 15 - Stockholders' Equity (details) - Option Grants And Exercises
Note 15 - Stockholders' Equity (details) - Share-based Compensation Expense Under All Plans
Note 15 - Stockholders' Equity (details) - Summary Of Nonvested Options
Note 15 - Stockholders' Equity (details) - Summary Of Option Activity
Note 15 - Stockholders' Equity (details) - Weighted-averages For Key Assumptions Used In Determining The Fair Value Of Options Granted
Note 15 - Stockholders' Equity (tables)
Note 16 - Employee Benefits
Note 16 - Employee Benefits (details)
Note 17 - Commitments And Contingencies
Note 17 - Commitments And Contingencies (details)
Note 17 - Commitments And Contingencies (details) - Future Minimum Rental Payments
Note 17 - Commitments And Contingencies (tables)
Note 18 - Litigation
Note 18 - Litigation (details)
Note 19 - Subsequent Event
Note 19 - Subsequent Event (details)
Note 2 - Summary Of Significant Accounting Policies
Note 2 - Summary Of Significant Accounting Policies (details)
Note 2 - Summary Of Significant Accounting Policies (details) - Property, Plant And Equipment Estimated Useful Life
Note 2 - Summary Of Significant Accounting Policies (tables)
Note 20 - Quarterly Financial Data (unaudited)
Note 20 - Quarterly Financial Data (unaudited) (details) - Quarterly Financial Data
Note 20 - Quarterly Financial Data (unaudited) (tables)
Note 3 - Business Acquisition
Note 3 - Business Acquisition (details)
Note 3 - Business Acquisition (details) - Acquired Assets And Liabilities Assumed
Note 3 - Business Acquisition (details) - Acquisition Of Merck Sharpe & Dohme’s Payment Terms
Note 3 - Business Acquisition (details) - Acquisition Pro Forma Information
Note 3 - Business Acquisition (tables)
Note 4 - Revenue Recognition
Note 4 - Revenue Recognition (details)
Note 4 - Revenue Recognition (details) - Analysis Of The Chargeback Liability
Note 4 - Revenue Recognition (details) - Analysis Of The Product Return Liability
Note 4 - Revenue Recognition (tables)
Note 5 - Income (loss) Per Share
Note 5 - Income (loss) Per Share (details)
Note 5 - Income (loss) Per Share (details) - Calculation Of Basic And Diluted Net Income (loss) Per Common Share
Note 5 - Income (loss) Per Share (tables)
Note 6 - Segment Reporting
Note 6 - Segment Reporting (details)
Note 6 - Segment Reporting (details) - Financial Information By Reporting Segment
Note 6 - Segment Reporting (details) - Net Revenues And Carrying Values Of Long-lived Assets Of Enterprises By Geographic Regions
Note 6 - Segment Reporting (tables)
Note 7 - Customer And Supplier Concentration
Note 7 - Customer And Supplier Concentration (details) - Accounts Receivable And Net Revenues Information For The Company’s Major Customers
Note 7 - Customer And Supplier Concentration (tables)
Note 8 - Fair Value Measurements
Note 8 - Fair Value Measurements (details)
Note 8 - Fair Value Measurements (details) - Fair Values Of The Company’s Financial Assets And Liabilities Measured On A Recurring Basis
Note 8 - Fair Value Measurements (tables)
Note 9 - Goodwill And Intangible Assets
Note 9 - Goodwill And Intangible Assets (details)
Note 9 - Goodwill And Intangible Assets (details) - Future Amortization Expense
Note 9 - Goodwill And Intangible Assets (details) - Goodwill
Note 9 - Goodwill And Intangible Assets (details) - Weighted-average Life, Original Cost, Accumulated Amortization, And Net Book Value By Major Intangible Asset Classification
Note 9 - Goodwill And Intangible Assets (tables)
Ticker: AMPH
CIK: 1297184
Form Type: 10-K Annual Report
Accession Number: 0001171843-15-001654
Submitted to the SEC: Thu Mar 26 2015 6:10:49 AM EST
Accepted by the SEC: Thu Mar 26 2015
Period: Wednesday, December 31, 2014
Industry: Pharmaceutical Preparations

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