- Diluted earnings per share increase 130% in 2011

- Notice of Allowance for Acetadote® patent

- Caldolor® receives marketing approval in Canada

NASHVILLE, Tenn., (February 29, 2012) — Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX)

, a specialty pharmaceutical company focused on hospital acute care and gastroenterology, today announced 2011 annual financial results.

Net Revenue: For the year ended December 31, 2011, net revenue increased to $51.1 million, up 11.5% compared with $45.9 million for 2010.

For the three months ended December 31, 2011, net revenue was $13.0 million, up from $12.8 million in the prior year period.

Operating Expenses: For the year ended December 31, 2011, total operating expenses were approximately $41.3 million, compared with $39.4 million for 2010. The difference was primarily a result of increased cost of products sold, research and development and general and administrative expenses, partially offset by lower selling and marketing expenses.

Total operating expenses for the three months ended December 31, 2011were $11.3 million compared to $10.6 million the prior year period. Increases in cost of products sold, research and development expenses and general and administrative expenses were partially offset by a decrease in selling and marketing expenses compared to the prior year.

Net Income: Net income attributable to common shareholders for the year ended December 31, 2011 increased more than 130% to $5.7 million, or $0.28 per diluted share, compared to $2.5 million, or $0.12 per diluted share, for 2010.

Net income attributable to common shareholders for the three months ended December 31, 2011, was $0.9 million, or $0.04 per diluted share, similar to the same period in 2010.

Balance Sheet: As of December 31, 2011, Cumberland had $70.6 million in cash and cash equivalents, compared to $65.9 million at the end of 2010. Total assets at December 31, 2011, were $95.5 million compared to $92.1 million in 2010. At December 31, 2011, Cumberland had total debt of $4.9 million, down from $7.2 million at the end of 2010. Shareholders’ equity increased to $82.8 million at the end of 2011 from $77.7 million for the prior period.

“We are pleased to have delivered strong revenue and earnings growth and to have achieved our revenue guidance during 2011,” said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. “2011 milestones for Cumberland included the approval and launch of the next generation Acetadote®, the acquisition of the worldwide rights to Kristalose®, as well as our addition of a fourth product, Hepatoren, which we believe is an excellent complement to our current offerings,” said Kazimi. “In addition to these milestones, we continued to focus on the incremental growth of our brands including new international partnerships and opportunities for new indications.”

Cumberland is introducing earnings guidance for 2012. The Company expects to see diluted earnings to be in the range of $0.32 to $0.36 per share, reflecting growth of approximately 15-30%. This guidance reflects a continuation of existing trends as well as the company’s expectation for the implementation of its new commercial strategy. This guidance represents the Company’s best estimate of future results, which may be affected by factors described below in “Forward-Looking Statements.”

Company Highlights


In January 2011, the U.S. Food and Drug Administration (FDA) approved Cumberland’s supplemental new drug application (sNDA) for a new formulation of Acetadote, which was the result of a phase IV commitment the Company made to the FDA upon receipt of initial marketing approval of the product. The new formulation does not contain Ethylene diamine tetracetic acid or any other stabilization or chelating agents and is free of preservatives. Cumberland launched the next generation product, which replaced the previously marketed formulation, in the first quarter of 2011 and has worked to ensure widespread distribution and transition to the next generation product.

In February 2012, Cumberland received a Notice of Allowance from the United States Patent and Trademark Office relating to its patent application for its new formulation of Acetadote (acetylcysteine) Injection, which is used to treat acetaminophen poisoning. The new formulation was FDA approved in 2011 and listed in the “Orange Book,” the FDA’s official register of approved pharmaceutical products. Once issued, the patent will expire in at least 2025. This composition of matter patent represents another significant milestone for Cumberland and its Acetadote brand.


Cumberland reached an agreement in November 2011 to acquire the remaining rights associated with the Kristalose brand, including the trademark and the FDA approved registration for the product from Mylan Pharmaceuticals. Cumberland will provide a royalty on product sales in exchange for these assets.


An exclusive agreement was reached with Harbin Gloria, a China based pharmaceutical company, for the commercialization of Caldolor and Acetadote in China. Under the terms of the agreement, Harbin Gloria will have exclusive rights to register and commercialize both products in China. In exchange for the license to the product, Cumberland will receive upfront and milestone licensing payments and royalties on the product sale.

The application for regulatory approval of Caldolor for fever in Canada by Cumberland’s partner Alveda Pharma, was approved in December 2011.

Conference Call and Webcast

A conference call and live Internet webcast will be held on Wednesday, February 29, 2012 at 5:00 p.m. Eastern Time to discuss the Company’s fourth quarter 2011 financial results. To participate in the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 855-859-2056 (for U.S. callers) or 404-537-3406 (for international callers). The Conference ID for the rebroadcast is 50392851. The live webcast and rebroadcast can be accessed via Cumberland’s website at

About Cumberland Pharmaceuticals

Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription products. The Company’s primary target markets include hospital acute care and gastroenterology. Cumberland’s marketed products include Acetadote® (acetylcysteine) Injection for the treatment of acetaminophen poisoning, Caldolor® (ibuprofen) Injection, the first injectable treatment for pain and fever approved in the United States, and Kristalose® (lactulose) for Oral Solution, a prescription laxative. Cumberland is dedicated to providing innovative products that improve quality of care for patients. For more information, please visit the Company’s website at

About Acetadote

Acetadote, administered intravenously within 8 to 10 hours after ingestion of a potentially hepatotoxic quantity of acetaminophen, is indicated to prevent or lessen hepatic injury. Used in the emergency department, Acetadote is the only injectable product approved in the United States to treat overdose of acetaminophen, a common ingredient in many over-the-counter medications. Acetadote is contraindicated in patients with hypersensitivity or previous anaphylactoid reactions to acetylcysteine or any components of the preparation. Serious anaphylactoid reactions, including death in a patient with asthma, have been reported in patients administered acetylcysteine intravenously. Acetadote should be used with caution in patients with asthma or where there is a history of bronchospasm. The total volume administered should be adjusted for patients weighing less than 40 kg and for those requiring fluid restriction. To avoid fluid overload, the volume of diluent should be reduced as needed. If volume is not adjusted fluid overload can occur, potentially resulting in hyponatremia, seizure and death. For full prescribing information, visit

About Caldolor

Caldolor is indicated for the management of mild to moderate pain and management of moderate to severe pain as an adjunct to opioid analgesics, as well as the reduction of fever in adults. It was the first FDA-approved intravenous therapy for fever. Caldolor is contraindicated in patients with known hypersensitivity to ibuprofen or other NSAIDs, patients with asthma, urticarial, or allergic type reactions after taking aspirin or other NSAIDs. Caldolor is contraindicated for use during the peri-operative period in the setting of coronary artery bypass graft (CABG) surgery. Caldolor should be used with caution in patients with prior history of ulcer disease or GI bleeding, in patients with fluid retention or heart failure, in the elderly, those with renal impairment, heart failure, liver impairment, and those taking diuretics or ACE inhibitors. Blood pressure should be monitored during treatment with Caldolor. For full prescribing information, including boxed warning, visit

About Kristalose

Kristalose is indicated for the treatment of acute and chronic constipation. It is a unique, proprietary, crystalline form of lactulose, with no restrictions on length of therapy or patient age. Initial dosing may produce flatulence and intestinal cramps, which are usually transient. Excessive dosage can lead to diarrhea with potential complications such as loss of fluids, hypokalemia and hypernatremia. Nausea and vomiting have been reported. Use with caution in diabetics. Kristalose is contraindicated in patients who require a low-galactose diet. Elderly, debilitated patients who receive lactulose for more than six months should have serum electrolytes (potassium, chloride, carbon dioxide) measured periodically. For full prescribing information, visit

Forward-Looking Statements

This press release contains forward-looking statements, which are subject to certain risks and reflect Cumberland’s current views on future events based on what it believes are reasonable assumptions. No assurance can be given that these events will occur. As with any business, all phases of Cumberland’s operations are subject to factors outside of its control, and any one or combination of these factors could materially affect Cumberland’s results of operations. These factors include market conditions, competition, an inability of manufacturers to produce Cumberland’s products on a timely basis or failure of manufacturers to comply with regulations applicable to pharmaceutical manufacturers, maintaining an effective sales and marketing infrastructure and other factors discussed in the Company’s Form 10-K filed with the SEC. There can be no assurance that results anticipated by the Company will be realized or that they will have the expected effects. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to publicly revise these statements to reflect events after the date hereof.

Investor Contact:
  Media Contact:
Elizabeth Davis
Corporate Relations
(615) 255-0068
  Rebecca Kirkham
Lovell Communications
(615) 297-7766

SOURCE: Cumberland Pharmaceuticals Inc.

- MORE –
Condensed Consolidated Balance Sheets
December 31, 2011 and 2010

ASSETS   2011   2010
Current assets:
Cash and cash equivalents
  $ 70,599,146     $ 65,893,970  
Accounts receivable, net of allowances
    7,082,890       5,145,494  
    5,774,694       7,683,842  
Prepaid and other current assets
    1,627,455       1,336,765  
Deferred tax assets
    2,223,882       978,771  
Total current assets
    87,308,067       81,038,842  
Property and equipment, net
    1,119,339       1,220,010  
Intangible assets, net
    7,023,064       7,427,223  
Deferred tax assets
Other assets
    67,846       102,787  
Total assets
  $ 95,518,316     $ 92,054,054  
Current liabilities:
Current portion of long-term debt
  $     $ 2,666,668  
Accounts payable
    1,513,548       2,124,654  
Other accrued liabilities
    5,086,400       4,436,298  
Total current liabilities
    6,599,948       9,227,620  
Revolving line of credit
    4,859,951       1,825,951  
Long-term debt, excluding current portion
Deferred tax liability
Other long-term obligations, excluding current portion
    578,119       618,343  
Total liabilities
    12,683,047       14,338,579  
Commitments and contingencies
Shareholders’ equity:
Common stock – no par value; 100,000,000 shares authorized; 20,020,535 and 20,338,461shares issued and outstanding as of December 31, 2011 and 2010, respectively
    70,272,155       70,778,874  
Retained earnings
    12,656,662       6,998,806  
Total shareholders’ equity
    82,928,817       77,777,680  
Noncontrolling interests
    (93,548 )     (62,205 )
Total equity
    82,835,269       77,715,475  
Total liabilities and equity
  $ 95,518,316     $ 92,054,054  

Condensed Consolidated Statements of Income
Years ended December 31, 2011, 2010 and 2009

    2011   2010   2009
Net product revenue
  $ 50,893,794     $ 44,704,570     $ 43,142,350  
Other revenue
    248,982       1,171,801       394,928  
Net revenues
    51,142,776       45,876,371       43,537,278  
Costs and expenses:
Cost of products sold
    5,362,554       3,586,646       4,136,541  
Selling and marketing
    20,940,060       22,674,505       20,194,074  
Research and development
    5,028,072       4,327,485       4,993,278  
General and administrative
    9,197,955       7,990,222       7,643,070  
    655,302       686,911       686,904  
    109,346       108,855       106,776  
Total costs and expenses
    41,293,289       39,374,624       37,760,643  
Operating income
    9,849,487       6,501,747       5,776,635  
Interest income
    210,727       200,207       79,363  
Interest expense
    (353,497 )     (1,423,523 )     (772,927 )
Income before income taxes
    9,706,717       5,278,431       5,083,071  
Income tax expense
    (4,080,204 )     (2,851,420 )     (2,024,192 )
Net income
    5,626,513       2,427,011       3,058,879  
Net loss at subsidiary attributable to
noncontrolling interests
    31,343       29,669       32,536  
Net income attributable to common shareholders
  $ 5,657,856     $ 2,456,680     $ 3,091,415  
Earnings per share attributable to common shareholders
- Basic
  $ 0.28     $ 0.12     $ 0.22  
- Diluted
  $ 0.28     $ 0.12     $ 0.17  
Weighted-average shares outstanding
- Basic
    20,342,913       20,333,932       14,199,479  
- Diluted
    20,572,132       21,058,577       18,234,171  

Condensed Consolidated Statements of Cash Flows
Years ended December 31, 2011, 2010 and 2009

    2011   2010   2009
Cash flows from operating activities:
Net income
  $ 5,626,513     $ 2,427,011     $ 3,058,879  
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense
    1,040,407       978,398       816,499  
Deferred tax expense (benefit)
    1,665,110       (332,349 )     (525,467 )
Stock-based compensation — nonemployees
    149,719       80,222       1,056,401  
Stock-based compensation – employees
    629,586       688,408       606,395  
Excess tax benefit derived from exercise of stock options
    (2,355,345 )     (3,874,966 )     (3,968,894 )
Noncash interest expense
    137,487       352,484       128,800  
Net changes in assets and liabilities affecting operating
Accounts receivable
    (1,937,396 )     1,031,091       (3,047,238 )
    1,909,148       (2,860,969 )     (3,060,097 )
Prepaid, other current assets and other assets
    (399,393 )     1,342,032       (721,464 )
Accounts payable and other accrued liabilities
    2,296,535       201,725       6,572,098  
Other long-term obligations
    (40,224 )     313,575       (510,942 )
Net cash provided by operating activities
    8,722,147       346,662       404,970  
Cash flows from investing activities:
Additions to property and equipment
    (257,502 )     (577,159 )     (601,802 )
Additions to trademarks and patents
    (180,269 )     (191,483 )     (110,541 )
Net cash used in investing activities
    (437,771 )     (768,642 )     (712,343 )
Cash flows from financing activities:
Proceeds from initial public offering of common stock
Costs of initial public offering
                (7,479,011 )
Proceeds from borrowings on long-term debt
Principal payments on note payable
    (5,333,333 )     (12,666,667 )     (5,000,000 )
Net borrowings on line of credit
Costs of financing for long-term debt and credit facility
    (17,637 )     (110,000 )     (189,660 )
Payments made in connection with repurchase of common shares
    (4,247,440 )     (4,846,791 )     (27,295,808 )
Proceeds from exercise of stock options
    629,865       1,362,760       175,089  
Excess tax benefit derived from exercise of stock options
    2,355,345       3,874,966       3,968,894  
Net cash (used in) provided by financing activities
    (3,579,200 )     (12,385,732 )     67,179,504  
Net increase (decrease) in cash and cash equivalents
    4,705,176       (12,807,712 )     66,872,131  
Cash and cash equivalents, beginning of year
    65,893,970       78,701,682       11,829,551  
Cash and cash equivalents, end of year
  $ 70,599,146     $ 65,893,970     $ 78,701,682  
Supplemental disclosure of cash flow information:
Cash paid during the year for:
  $ 191,410     $ 814,373     $ 677,387  
Income taxes
    304,480       52,136       196,187  
Noncash investing and financing activities:
Change in unpaid invoices for purchases of intangibles
Reclass of redeemable common stock to (from) equity
            1,930,000       (1,930,000 )
Deferred financing costs

The following information was filed by Cumberland Pharmaceuticals Inc (CPIX) on Thursday, March 1, 2012 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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