Lannett Company Reports Fiscal 2006 First Quarter Financial Results.PHILADELPHIA Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. -- Lannett Company, Inc. (AMEX AMEX See: American Stock Exchange :LCI LCI Livable Centers Initiative LCI Life Cycle Inventory LCI Landing Craft, Infantry LCI La Chaine Info (French cable news channel) LCI Lean Construction Institute LCI Lions Club International ) today reported its financial results for the fiscal 2006 first quarter ended September September: see month. 30, 2005. For the first quarter of fiscal 2006, net income totaled $1.6 million, or $0.07 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $1.3 million, or $0.05 per basic and diluted share, for the same period in the prior year. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight at $13.6 million reflected a sharp turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from a declining trend in recent quarters. For the first quarter of fiscal 2005, net sales totaled $15.0 million. "After a challenging three quarters, we made excellent progress building our pipeline and adding solid margin products to the company's product offering," said Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism Bedrosian, president of Lannett. "Our positive net sales and improved profitability were driven by strong demand for certain products in our existing portfolio as well as the recent launch of a number of new products. The momentum generated in the first quarter, along with two additional approvals already received in the second quarter, gives us confidence that we are on track to meet our anticipated mid-teen range rate of sales growth for fiscal 2006." Bedrosian said the company is focused on building and developing its pipeline of product candidates and, accordingly, expects R&D spending to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale over the balance of the fiscal year. For the first quarter of fiscal 2006, gross profit was $6.8 million, or 50% of net sales, compared with $7.4 million, or 49% of net sales, in the first quarter of fiscal 2005. Research and development expenses decreased to $1.1 million from $1.3 million in the same period in fiscal 2005. SG&A expenses were $2.6 million, up from $2.1 million in last year's first quarter. Amortization expense was $0.5 million, compared with $1.7 million for the prior year period. About Lannett Company: Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. pharmaceutical products for a wide range of indications. For more information, visit Lannett Company's website at www.lannett.com. This news release contains certain statements of a forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. nature relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future events or future business performance. Any such statements, whether expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. , are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. or other regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals or actions, the ability to successfully commercialize products upon approval, Lannett's estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , product development efforts or performance, and other risk factors discussed in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
Ended
(UNAUDITED)
September September
30, 30,
2005 2004
------------ ------------
Net sales $13,641,532 $15,011,496
Cost of sales 6,862,785 7,620,834
------------ ------------
Gross profit 6,778,747 7,390,662
Research and development expenses 1,141,101 1,348,217
Selling, general and administrative expenses 2,577,135 2,110,889
Amortization expense 446,166 1,690,084
------------ ------------
Operating income 2,614,345 2,241,472
------------ ------------
Other income (expense) 40,046 (46,175)
------------ ------------
Income before taxes 2,654,391 2,195,297
Income tax expense 1,053,415 878,156
------------ ------------
Net income $1,600,976 $1,317,141
============ ============
Earnings per share:
Basic $0.07 $0.05
============ ============
Diluted $0.07 $0.05
============ ============
Shares used to calculate earnings per share:
Basic 24,110,790 24,082,401
============ ============
Diluted 24,117,149 24,199,904
============ ============
LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, June 30,
2005 2005
------------ ------------
Assets: (Unaudited)
Current Assets:
Cash $2,981,086 $4,165,601
Trade accounts receivable, net 14,785,501 10,735,529
Inventories 10,792,031 9,988,769
Prepaid taxes 2,900,352 3,957,993
Other current assets 1,871,005 1,966,270
Deferred tax assets 3,123,953 3,123,953
------------ ------------
Total current assets 36,453,928 33,938,115
Property and equipment, net 17,022,780 16,624,848
Investment securities-available-for-sale 6,519,359 7,888,708
Deferred tax assets 18,637,874 18,610,159
Intangible asset, net 15,169,669 15,615,835
Note receivable 2,000,000 -
Construction in progress 1,788,721 2,079,650
Other assets 154,280 159,745
------------ ------------
Total Assets $97,746,611 $94,917,060
============ ============
Liabilities and Shareholders' Equity:
Current liabilities $17,868,416 $16,395,562
Long-term debt, less current portion 6,698,656 7,262,672
Deferred income taxes 2,009,582 2,009,582
Shareholders' equity 71,169,957 69,249,244
------------ ------------
Total Liabilities and Shareholders' Equity $97,746,611 $94,917,060
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