Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 27, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ANI PHARMACEUTICALS INC | |
Entity Central Index Key | 1,023,024 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | ANIP | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,638,422 | |
Class C Special Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,864 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 8,369 | $ 27,365 |
Accounts receivable, net of $39,050 and $31,535 of adjustments for chargebacks and other allowances at June 30, 2017 and December 31, 2016, respectively | 55,513 | 45,895 |
Inventories, net | 42,307 | 26,183 |
Prepaid income taxes | 3,991 | 0 |
Prepaid expenses and other current assets | 2,676 | 3,564 |
Total Current Assets | 112,856 | 103,007 |
Property and equipment, net | 14,966 | 10,998 |
Restricted cash | 5,002 | 5,002 |
Deferred tax asset, net of valuation allowance | 27,933 | 26,227 |
Intangible assets, net | 196,624 | 175,792 |
Goodwill | 1,838 | 1,838 |
Total Assets | 359,219 | 322,864 |
Current Liabilities | ||
Accounts payable | 3,153 | 3,389 |
Accrued expenses and other | 1,565 | 927 |
Accrued royalties | 11,255 | 11,956 |
Accrued compensation and related expenses | 1,227 | 1,631 |
Current income taxes payable | 0 | 2,398 |
Accrued government rebates | 3,534 | 5,891 |
Returned goods reserve | 7,558 | 5,756 |
Total Current Liabilities | 28,292 | 31,948 |
Long-term Liabilities | ||
Long-term royalties | 0 | 625 |
Borrowings on line of credit | 30,000 | 0 |
Convertible notes, net of discount and deferred financing costs | 124,381 | 120,643 |
Total Liabilities | 182,673 | 153,216 |
Commitments and Contingencies (Note 11) | ||
Stockholders' Equity | ||
Common stock, $0.0001 par value, 33,333,334 shares authorized; 11,643,075 shares issued and 11,637,872 shares outstanding at June 30, 2017; 11,588,701 shares issued and outstanding at December 31, 2016 | 1 | 1 |
Class C special stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Preferred stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Treasury stock, 5,203 shares of common stock, at cost, at June 30, 2017, 0 shares of common stock at December 31, 2016 | (259) | 0 |
Additional paid-in capital | 175,901 | 172,563 |
Retained earnings/(Accumulated deficit) | 903 | (2,916) |
Total Stockholders' Equity | 176,546 | 169,648 |
Total Liabilities and Stockholders' Equity | $ 359,219 | $ 322,864 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Adjustments for chargebacks and other allowances | $ 39,050 | $ 31,535 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,666,667 | 1,666,667 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Treasury Stock, Common, Shares | 5,203 | 0 |
Common Stock [Member] | ||
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 33,333,334 | 33,333,334 |
Common Stock, Issued Shares | 11,643,075 | 11,588,701 |
Common Stock, Outstanding Shares | 11,637,872 | 11,588,701 |
Class C Special Stock [Member] | ||
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 781,281 | 781,281 |
Common Stock, Issued Shares | 10,864 | 10,864 |
Common Stock, Outstanding Shares | 10,864 | 10,864 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Revenues | $ 44,764 | $ 31,337 | $ 81,392 | $ 51,892 |
Operating Expenses: | ||||
Cost of sales (excluding depreciation and amortization) | 21,122 | 11,795 | 37,508 | 15,205 |
Research and development | 2,167 | 764 | 3,785 | 1,730 |
Selling, general, and administrative | 7,380 | 7,628 | 14,673 | 13,532 |
Depreciation and amortization | 7,101 | 5,956 | 13,807 | 10,565 |
Total Operating Expenses | 37,770 | 26,143 | 69,773 | 41,032 |
Operating Income | 6,994 | 5,194 | 11,619 | 10,860 |
Other Expense, net | ||||
Interest expense, net | (3,025) | (2,830) | (5,957) | (5,612) |
Other expense, net | (19) | (12) | (37) | (10) |
Income Before Provision for Income Taxes | 3,950 | 2,352 | 5,625 | 5,238 |
Provision for income taxes | (1,269) | (1,227) | (1,792) | (2,767) |
Net Income | $ 2,681 | $ 1,125 | $ 3,833 | $ 2,471 |
Basic and Diluted Earnings Per Share: | ||||
Basic Earnings Per Share (in dollars per share) | $ 0.23 | $ 0.1 | $ 0.33 | $ 0.22 |
Diluted Earnings Per Share (in dollars per share) | $ 0.23 | $ 0.1 | $ 0.33 | $ 0.21 |
Basic Weighted-Average Shares Outstanding (in shares) | 11,546 | 11,402 | 11,536 | 11,398 |
Diluted Weighted-Average Shares Outstanding (in shares) | 11,667 | 11,541 | 11,659 | 11,514 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 3,833 | $ 2,471 |
Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities: | ||
Stock-based compensation | 3,193 | 3,322 |
Deferred taxes | (1,706) | (435) |
Depreciation and amortization | 13,807 | 10,565 |
Non-cash interest relating to convertible notes and loan cost amortization | 3,790 | 3,482 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (9,618) | (13,630) |
Inventories, net | 776 | (807) |
Prepaid expenses and other current assets | 836 | (1,992) |
Accounts payable | (345) | 2,850 |
Accrued royalties | (701) | 2,423 |
Accrued compensation and related expenses | (404) | (117) |
Current income taxes, net | (6,389) | 977 |
Accrued government rebates | (2,357) | 1,878 |
Returned goods reserve | 1,802 | 661 |
Accrued expenses and other | 13 | 2,658 |
Net Cash and Cash Equivalents Provided by Operating Activities | 6,530 | 14,306 |
Cash Flows From Investing Activities | ||
Acquisition of product rights and other related assets | (50,956) | (144,494) |
Acquisition of property and equipment | (4,442) | (2,088) |
Net Cash and Cash Equivalents Used in Investing Activities | (55,398) | (146,582) |
Cash Flows From Financing Activities | ||
Payment of debt issuance costs | 0 | (294) |
Net borrowings under line of credit agreement | 30,000 | 0 |
Proceeds from stock option exercises | 131 | 504 |
Excess tax benefit from share-based compensation awards | 0 | 19 |
Repurchase of common stock under the stock repurchase program | 0 | (2,500) |
Treasury stock purchases for restricted stock vestings and forfeitures | (259) | (122) |
Net Cash and Cash Equivalents Provided by/(Used in) Financing Activities | 29,872 | (2,393) |
Change in Cash, Cash Equivalents, and Restricted Cash | (18,996) | (134,669) |
Cash, cash equivalents, and restricted cash, beginning of period | 32,367 | 154,684 |
Cash, cash equivalents, and restricted cash, end of period | 13,371 | 20,015 |
Reconciliation of cash, cash equivalents, and restricted cash, beginning of period | ||
Cash and cash equivalents | 27,365 | 154,684 |
Restricted cash | 5,002 | 0 |
Cash, cash equivalents, and restricted cash, beginning of period | 32,367 | 154,684 |
Reconciliation of cash, cash equivalents, and restricted cash, end of period | ||
Cash and cash equivalents | 8,369 | 15,014 |
Restricted cash | 5,002 | 5,001 |
Cash, cash equivalents, and restricted cash, end of period | 13,371 | 20,015 |
Supplemental disclosure for cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 2,097 | 2,056 |
Cash paid for income taxes, net | 9,882 | 2,206 |
Supplemental non-cash investing and financing activities: | ||
Accrued royalties related to asset purchase | 0 | 3,882 |
Property and equipment purchased and included in accounts payable | $ 109 | $ 45 |
BUSINESS, PRESENTATION, AND REC
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2017 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS Overview ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is an integrated specialty pharmaceutical company focused on delivering value to our customers by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals. We focus on niche and high barrier to entry opportunities including controlled substances, anti-cancer (oncolytics), hormones and steroids, and complex formulations. Our two pharmaceutical manufacturing facilities located in Baudette, Minnesota are capable of producing oral solid dose products, as well as liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. Our strategy is to use our assets to develop, acquire, manufacture, and market branded and generic specialty prescription pharmaceuticals. By executing this strategy, we believe we will be able to continue to grow our business, expand and diversify our product portfolio, and create long-term value for our investors. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2016, has been derived from audited financial statements of that date. The unaudited interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our Annual Report on Form 10-K for the year ended December 31, 2016. Certain prior period information has been reclassified to conform to the current period presentation. Please see Recently Adopted Accounting Pronouncements. Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited interim condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, fair value of long-lived assets, deferred taxes and valuation allowance, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness. Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued guidance clarifying when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The guidance does not change the accounting for modifications, but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The guidance is effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance must be adopted on a prospective basis. In June 2016, the FASB issued guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. We currently expect that the adoption of this guidance will likely change the way we assess the collectability of our receivables and recoverability of other financial instruments. We have not yet begun to evaluate the specific impacts of this guidance nor have we determined the manner in which we will adopt this guidance. In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We are currently evaluating the impact that the adoption of this guidance will have on our consolidated financial statements. We currently expect that the adoption of this guidance will likely change the way we account for our operating leases and will likely result in recording the future benefits of those leases and the related minimum lease payments on our consolidated balance sheets. We have not yet begun to evaluate the specific impacts of this guidance. In May 2014, the FASB issued guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue arising from contracts with customers. In August 2015, the FASB issued guidance approving a one-year deferral, making the standard effective for reporting periods beginning after December 15, 2017, with early adoption permitted only for reporting periods beginning after December 15, 2016. In March 2016, the FASB issued guidance to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross rather than net, with the same deferred effective date. In April 2016, the FASB issued guidance to clarify the implementation guidance on identifying performance obligations and the accounting for licenses of intellectual property, with the same deferred effective date. In May 2016, the FASB issued guidance rescinding SEC paragraphs related to revenue recognition, pursuant to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force meeting. In May 2016, the FASB also issued guidance to clarify the implementation guidance on assessing collectability, presentation of sales tax, noncash consideration, and contracts and contract modifications at transition, with the same effective date. We do not intend to adopt the guidance early. We expect that the adoption of this guidance will likely change the way we recognize revenue generated under customer contracts. However, we are currently reviewing our contracts with customers to determine if the accounting for these contracts will be impacted by the adoption of this guidance and, if so, if that impact will be material to our consolidated financial statements. We have not yet determined the manner in which we will adopt this guidance. Recently Adopted Accounting Pronouncements In January 2017, the FASB issued guidance to simplify the measurement of goodwill. The guidance eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for interim or annual goodwill impairment tests performed for testing dates after January 1, 2017. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a prospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued guidance clarifying the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance provides a screen to determine when an integrated set of assets and activities is not a business, provides a framework to assist entities in evaluating whether both an input and substantive process are present, and narrows the definition of the term output. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The guidance must be adopted on a prospective basis. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a prospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued guidance to reduce diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The revised guidance requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The guidance was effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. If an entity adopted the guidance in an interim period, any adjustments should have been reflected as of the beginning of the fiscal year that includes that interim period. The guidance must be adopted on a retrospective basis. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a retrospective basis, and all periods have been presented under this guidance. The adoption of this new guidance resulted in the inclusion of our $5.0 million of restricted cash in the cash and cash equivalents balance in our consolidated statement of cash flows for all reporting periods presented in 2017 and onward. In August 2016, the FASB issued guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance must be adopted on a retrospective basis and must be applied to all periods presented, but may be applied prospectively if retrospective application would be impracticable. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a retrospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued guidance simplifying the accounting for and financial statement disclosure of stock-based compensation awards, consisting of changes in the accounting for excess tax benefits and tax deficiencies, and changes in the accounting for forfeitures associated with share-based awards, among other things. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017. Pursuant to the adoption requirements for excess tax benefits and tax deficiencies, we no longer recognize excess tax benefits or tax deficiencies in Additional Paid in Capital (“APIC”); rather, we recognize them prospectively as a component of our current period provision/(benefit) before income taxes. We did not reverse our current APIC pool, which was $ 3.1 14 We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our condensed consolidated statements of earnings, balance sheets, or cash flows. |
REVENUE RECOGNITION AND RELATED
REVENUE RECOGNITION AND RELATED ALLOWANCES | 6 Months Ended |
Jun. 30, 2017 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION AND RELATED ALLOWANCES | 2. REVENUE RECOGNITION AND RELATED ALLOWANCES Revenue Recognition Revenue is recognized for product sales and contract manufacturing product sales upon passing of risk and title to the customer, when estimates of the selling price and discounts, rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments are reasonably determinable, collection is reasonably assured, and we have no further performance obligations. Contract manufacturing arrangements are typically less than two weeks in duration, and therefore the revenue is recognized upon completion of the aforementioned factors rather than using a proportional performance method of revenue recognition. The estimates for discounts, rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments reduce gross revenues to net revenues in the accompanying unaudited interim condensed consolidated statements of earnings, and are presented as current liabilities or reductions in accounts receivable in the accompanying unaudited interim condensed consolidated balance sheets (see “Accruals for Chargebacks, Rebates, Returns, and Other Allowances”). Historically, we have not entered into revenue arrangements with multiple elements. We record revenue related to marketing and distribution agreements with third parties in which we sell products under Abbreviated New Drug Applications (“ANDAs”) or New Drug Applications (“NDAs”) owned or licensed by these third parties. We have assessed and determined that we are the principal for sales under each of these marketing and distribution agreements and recognize the revenue on a gross basis when risk and title are passed to the customer, when estimates of the selling price and discounts, rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments are reasonably determinable, collection is reasonably assured, and we have no further performance obligations. Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products. These profit-sharing percentages are recognized in cost of sales in our consolidated statements of earnings and are accrued in accrued royalties in our consolidated balance sheets until payment has occurred. Occasionally, we engage in contract services, which include product development services, laboratory services, and royalties on net sales of certain contract manufactured products. For these services, revenue is recognized according to the terms of the agreement with the customer, which sometimes include substantive, measurable risk-based milestones, and when we have a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured, and we have no further performance obligations under the agreement. Accruals for Chargebacks, Rebates, Returns, and Other Allowances Our generic and branded product revenues are typically subject to agreements with customers allowing chargebacks, government rebates, product returns, administrative fees and other rebates, and prompt payment discounts. We accrue for these items at the time of sale and continually monitor and re-evaluate the accruals as additional information becomes available. We adjust the accruals at the end of each reporting period, to reflect any such updates to the relevant facts and circumstances. Accruals are relieved upon receipt of payment from the customer or upon issuance of credit to the customer. (in thousands) Accruals for Chargebacks, Rebates, Returns, and Other Allowances Administrative Prompt Government Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2015 $ 11,381 $ 4,631 $ 2,648 $ 1,653 $ 674 Accruals/Adjustments 43,349 5,773 3,256 5,071 2,180 Credits Taken Against Reserve (34,731) (3,895) (2,595) (4,274) (1,678) Balance at June 30, 2016 $ 19,999 $ 6,509 $ 3,309 $ 2,450 $ 1,176 Balance at December 31, 2016 $ 26,785 $ 5,891 $ 5,756 $ 3,550 $ 1,554 Accruals/Adjustments 88,973 5,110 5,220 10,646 3,842 Credits Taken Against Reserve (83,757) (7,467) (3,418) (8,593) (3,448) Balance at June 30, 2017 $ 32,001 $ 3,534 $ 7,558 $ 5,603 $ 1,948 Credit Concentration Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and pharmaceutical companies. During the three months ended June 30, 2017, three customers represented 32 24 23 32 22 24 82 28 21 18 25 24 17 |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | 3. INDEBTEDNESS Convertible Senior Notes In December 2014, we issued $ 143.8 3.0 69.48 96.21 The Notes are convertible at the option of the holder under certain circumstances and upon conversion we may elect to settle such conversion in shares of our common stock, cash, or a combination thereof. As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to APIC) of $ 33.6 The carrying value of the Notes is as follows as of: (in thousands) June 30, December 31, Principal amount $ 143,750 $ 143,750 Unamortized debt discount (17,328) (20,644) Deferred financing costs (2,041) (2,463) Net carrying value $ 124,381 $ 120,643 We had accrued interest of $ 0.4 The following table sets forth the components of total interest expense related to the Notes recognized in the accompanying unaudited interim condensed consolidated statements of earnings for the three and six months ended June 30, 2017 and 2016: Three Months Ended Six Months Ended (in thousands) June 30, June 30, June 30, June 30, Contractual coupon $ 1,078 $ 1,078 $ 2,156 $ 2,156 Amortization of debt discount 1,668 1,582 3,315 3,144 Amortization of finance fees 211 211 422 422 Capitalized interest (134) (54) (224) (100) $ 2,823 $ 2,817 $ 5,669 $ 5,622 As of June 30, 2017, the effective interest rate on the Notes was 7.9 Line of Credit In May 2016, we entered into a credit arrangement (the “Line of Credit”) with Citizens Bank Capital, a division of Citizens Asset Finance, Inc. (the “Citizens Agreement”). The Citizens Agreement provides for a $ 30.0 10.0 May 12, 2019 0.25 In February 2017, we drew down $ 30.0 40.0 30.0 0.3 0.2 0.2 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings per share by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our Employee Stock Purchase Plan (“ESPP”), unvested restricted stock awards, stock purchase warrants, and any conversion gain on our Notes (Note 3), using the treasury stock method. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share. Our unvested restricted shares contain non-forfeitable rights to dividends, and therefore are considered to be participating securities; in periods of net income, the calculation of basic and diluted earnings per share excludes from the numerator net income attributable to the unvested restricted shares, and excludes the impact of those shares from the denominator. For purposes of determining diluted earnings per share, we have elected a policy to assume that the principal portion of the Notes (Note 3) is settled in cash. As such, the principal portion of the Notes has no effect on either the numerator or denominator when determining diluted earnings per share. Any conversion gain is assumed to be settled in shares and is incorporated in diluted earnings per share using the treasury method. The warrants issued in conjunction with the issuance of the Notes (Note 3) are considered to be dilutive when they are in-the-money relative to our average stock price during the period; the bond hedge purchased in conjunction with the issuance of the Notes is always considered to be anti-dilutive. Basic Diluted Basic Diluted (in thousands, except per share amounts) Three Months Ended Three Months Ended Six Months Ended Six Months Ended 2017 2016 2017 2016 2017 2016 2017 2016 Net income $ 2,681 $ 1,125 $ 2,681 $ 1,125 $ 3,833 $ 2,471 $ 3,833 $ 2,471 Net income allocated to restricted stock (20) (8) (20) (8) (28) (17) (28) (17) Net income allocated to common shares $ 2,661 $ 1,117 $ 2,661 $ 1,117 $ 3,805 $ 2,454 $ 3,805 $ 2,454 Basic Weighted-Average Shares Outstanding 11,546 11,402 11,546 11,402 11,536 11,398 11,536 11,398 Dilutive effect of stock options and ESPP 121 139 123 116 Diluted Weighted-Average Shares Outstanding 11,667 11,541 11,659 11,514 Earnings Per Share $ 0.23 $ 0.10 $ 0.23 $ 0.10 $ 0.33 $ 0.22 $ 0.33 $ 0.21 The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings per share, including the shares underlying the Notes, was 4.8 4.5 4.7 4.5 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 5. INVENTORIES (in thousands) June 30, December 31, Raw materials $ 17,183 $ 14,138 Packaging materials 1,279 930 Work-in-progress 776 477 Finished goods (1) 23,279 10,812 42,517 26,357 Reserve for excess/obsolete inventories (210) (174) Inventories, net $ 42,307 $ 26,183 (1) Vendor Concentration We source the raw materials for our products, including active pharmaceutical ingredients (“API”), from both domestic and international suppliers. Generally, only a single source of API is qualified for use in each product due to the cost and time required to validate a second source of supply. As a result, we are dependent upon our current vendors to reliably supply the API required for ongoing product manufacturing. During the three months ended June 30, 2017, we purchased approximately 27 18 48 29 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 6. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consist of the following as of: (in thousands) June 30, December 31, Land $ 160 $ 160 Buildings 3,756 3,756 Machinery, furniture, and equipment 9,174 8,176 Construction in progress 7,846 4,293 20,936 16,385 Less: accumulated depreciation (5,970) (5,387) Property, Plant, and Equipment, net $ 14,966 $ 10,998 Depreciation expense was $ 0.3 0.2 0.6 0.4 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill As a result of our 2013 merger with BioSante Pharmaceuticals, Inc. (“BioSante”), we recorded goodwill of $ 1.8 Goodwill Accounting Policy Goodwill represents the excess of the total purchase consideration over the fair value of acquired assets and assumed liabilities, using the purchase method of accounting. Goodwill is not amortized, but is subject to periodic review for impairment. We assess the recoverability of the carrying value of goodwill as of October 31st of each year, and whenever events occur or circumstances change that would, more likely than not, reduce the fair value of our reporting unit below its carrying value. Before employing detailed impairment testing methodologies, we first evaluate the likelihood of impairment by considering qualitative factors relevant to our reporting unit. When performing the qualitative assessment, we evaluate events and circumstances that would affect the significant inputs used to determine the fair value of the goodwill. Events and circumstances evaluated include: macroeconomic conditions that could affect us, industry and market considerations for the generic pharmaceutical industry that could affect us, cost factors that could affect our performance, our financial performance (including share price), and consideration of any company-specific events that could negatively affect us, our business, or the fair value of our business. If we determine that it is more likely than not that goodwill is impaired, we will then apply detailed testing methodologies. Otherwise, we will conclude that no impairment has occurred. Detailed impairment testing involves comparing the fair value of our one reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of ANI. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, an impairment loss will be recorded, measured as the difference between the excess of the carrying value of the reporting unit over its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. There have been no events or changes in circumstances that would have reduced the fair value of our reporting unit below its carrying value during six months ended June 30, 2017. No impairment losses were recognized during the three or six months ended June 30, 2017 or 2016. Definite-lived Intangible Assets Acquisition of New Drug Applications and Product Rights In February 2017, we entered into an agreement with Cranford Pharmaceuticals, LLC to purchase a distribution license, trademark, and certain finished goods inventory for Inderal XL for $ 20.2 40 15.1 10 In February 2017, we entered into an agreement with Holmdel Pharmaceuticals, LP to purchase the NDA, trademark, and certain finished goods inventory for InnoPran XL, including a license to an Orange Book listed patent, for $ 30.6 30.0 0.6 0.1 19.0 10 In April 2016, we purchased the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC for $ 60.0 0.3 3.9 64.2 52.4 10 0.6 In September 2015, we entered into an agreement to purchase the NDAs for Corticotropin and Corticotropin-Zinc from Merck Sharp & Dohme B.V. for $ 75.0 0.3 75.3 10 Marketing and Distribution Rights In January 2016, we purchased from H2-Pharma, LLC the rights to market, sell, and distribute the authorized generic of Lipofen® and a generic hydrocortisone rectal cream product, along with the rights to an early-stage development project, for total consideration of $ 10.0 8.8 1.2 42 (in thousands) June 30, 2017 December 31, 2016 Weighted Average Gross Carrying Accumulated Gross Carrying Accumulated Amortization Acquired ANDA intangible assets $ 42,076 $ (10,491) $ 42,076 $ (8,390) 10.0 years NDAs and product rights 184,306 (26,859) 150,250 (17,081) 10.0 years Marketing and distribution rights 11,042 (3,963) 11,042 (2,662) 4.7 years Non-compete agreement 624 (111) 624 (67) 7.0 years $ 238,048 $ (41,424) $ 203,992 $ (28,200) Definite-lived intangible assets are stated at cost, net of amortization, generally using the straight line method over the expected useful lives of the intangible assets. In the case of the Inderal XL and InnoPran XL asset purchases, because we anticipate that the acquired assets will provide a greater economic benefit in the earlier years, we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets. Amortization expense was $ 6.8 5.7 13.2 10.1 We test for impairment of definite-lived intangible assets when events or circumstances indicate that the carrying value of the assets may not be recoverable. No such triggering events were identified during the three and six months ended June 30, 2017 and 2016 and therefore no impairment loss was recognized in the three and six months ended June 30, 2017 or 2016. (in thousands) 2017 (remainder of the year) $ 13,502 2018 26,825 2019 26,825 2020 26,343 2021 24,898 2022 and thereafter 78,231 Total $ 196,624 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION In July 2016, we commenced administration of the ANI Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan. As of June 30, 2017, we have 0.2 15 2 4 26 39 All equity-based service awards are granted under the ANI Pharmaceuticals, Inc. Fifth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”), which was approved by shareholders at the May 17, 2017 annual meeting. The approved 2008 Plan provided for an increase of 0.8 0.8 (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of sales $ 26 $ 24 $ 49 $ 14 Research and development 168 22 307 49 Selling, general, and administrative 1,585 2,171 2,794 3,259 $ 1,779 $ 2,217 $ 3,150 $ 3,322 Separation Agreement On April 26, 2016, we entered into a Separation Agreement and Release (the “Separation Agreement”) with our former Chief Financial Officer (the “Former Officer”), who resigned effective May 6, 2016. Under the Separation Agreement, 25,167 4,050 2,000 0.9 0.4 (in thousands) Options RSAs Outstanding December 31, 2015 474 63 Granted 273 42 Options Exercised/RSAs Vested (54) (15) Forfeited (50) (12) Outstanding June 30, 2016 643 78 Outstanding December 31, 2016 578 63 Granted 185 50 Options Exercised/RSAs Vested (2) (27) (1) Forfeited (3) - Outstanding June 30, 2017 758 86 (1) 259 |
STOCKHOLDER_S EQUITY
STOCKHOLDER’S EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDER’S EQUITY | 9. STOCKHOLDER’S EQUITY Stock Repurchase Program In October 2015, our Board of Directors authorized a program to repurchase up to $ 25.0 In January 2016, we purchased 65 2.5 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The utilization of our NOL carryforwards will be limited in future years as prescribed by Section 382 of the U.S. Internal Revenue Code. As of both June 30, 2017 and December 31, 2016, we had provided a valuation allowance against certain state net operating loss (“NOL”) carryforwards of $ 0.3 We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties, and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We have not identified any uncertain income tax positions that could have a material impact on the consolidated financial statements. We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense; we did not have any such amounts accrued as of June 30, 2017 and December 31, 2016. We are subject to taxation in various jurisdictions and all of our income tax returns remain subject to examination by tax authorities due to the availability of NOL carryforwards. For interim periods, we recognize an income tax provision/(benefit) based on our estimated annual effective tax rate expected for the entire year. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for estimated changes in temporary and estimated permanent differences, and excludes certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur. These changes in temporary differences, permanent differences, and discrete items result in variances to the effective tax rate from period to period. We also have elected to exclude the impacts from significant pre-tax non-recognized subsequent events from our interim estimated annual effective rate until the period in which they occur. Our estimated annual effective tax rate changes throughout the year as our on-going estimates of pre-tax income, changes in temporary differences, and permanent differences are revised, and as material discrete items occur. The effective tax rate for the three months ended June 30, 2017 was 32.1 The effective tax rate for the three months ended June 30, 2016 was 52.2 The effective tax rate for the six months ended June 30, 2017 was 31.9 The effective tax rate for the six months ended June 30, 2016 was 52.8 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Government Regulation Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of our products. The Drug Enforcement Administration (“DEA”) maintains oversight over our products that are controlled substances. Unapproved Products Two of our products, Esterified Estrogen with Methyltestosterone (“EEMT”) and Opium Tincture, are marketed without approved NDAs or ANDAs. During the three months ended June 30, 2017 and 2016, net revenues for these products totaled $ 6.7 9.0 12.9 18.0 The FDA's policy with respect to the continued marketing of unapproved products In addition, one group of products that we manufacture on behalf of a contract customer is marketed by that customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our contract manufacturing revenues for these unapproved products for the three months ended June 30, 2017 and 2016 were $ 0.4 0.5 0.9 0.8 We receive royalties on the net sales of a group of contract-manufactured products, which are marketed by the contract customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our royalties on the net sales of these unapproved products for the three and six months ended June 30, 2017 and 2016 were less than 1% Louisiana Medicaid Lawsuit On September 11, 2013, the Attorney General of the State of Louisiana filed a lawsuit in Louisiana state court against numerous pharmaceutical companies, including us, under various state laws, alleging that each defendant caused the state’s Medicaid agency to provide reimbursement for drug products that allegedly were not approved by the FDA and therefore allegedly not reimbursable under the federal Medicaid program. The lawsuit relates to three cough and cold prescription products manufactured and sold by our former Gulfport, Mississippi operation, which was sold in September 2010. Through its lawsuit, the state seeks unspecified damages, statutory fines, penalties, attorneys’ fees, and costs. While we cannot predict the outcome of the lawsuit at this time, we could be subject to material damages, penalties, and fines. We intend to vigorously defend against all claims in the lawsuit. Other Commitments and Contingencies All manufacturers of the drug Reglan and its generic equivalent metoclopramide, including ANI, have faced allegations from plaintiffs in various states, including California, New Jersey, and Pennsylvania, claiming bodily injuries as a result of ingestion of metoclopramide or its brand name, Reglan, prior to the FDA's February 2009 Black Box warning requirement. In August 2012, we were dismissed with prejudice from all New Jersey cases. In August 2016, we settled the outstanding California cases. We consider our exposure to this litigation to be limited due to several factors: (1) the only generic metoclopramide that we manufactured prior to the implementation of the FDA's warning requirement was an oral solution introduced after May 28, 2008; (2) our market share for the oral solution was a very small portion of the overall metoclopramide market; and (3) once we received a request for change of labeling from the FDA, we submitted our proposed changes within 30 days, and such changes were subsequently approved by the FDA. At the present time, we are unable to assess the likely outcome of the cases in the remaining states. Our insurance company has assumed the defense of this matter and paid all losses in settlement of the California cases. We cannot provide assurances that the outcome of these matters will not have an adverse effect on our business, financial condition, and operating results. Furthermore, like all pharmaceutical manufacturers, we may be exposed to other product liability claims in the future, which could limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results. We launched Erythromycin Ethylsuccinate (“EES”) on September 27, 2016 under a previously approved ANDA. In August 2016, we filed with the FDA to reintroduce this product under a Changes Being Effected in 30 Days submission (a “CBE-30 submission”). Under a CBE-30 submission, certain defined changes to an ANDA can be made if the FDA does not object in writing within 30 days. The FDA’s regulations, guidance documents, and historic actions support the filing of a CBE-30 for the types of changes that we proposed for our EES ANDA. We received no formal written letter from the FDA within 30 days of the CBE-30 submission date, and as such, launched the product in accordance with FDA regulations. On December 16, 2016, and nearly four months after our CBE-30 submission, the FDA sent us a formal written notice that a Prior Approval Supplement (“PAS”) was required for this ANDA. Under a PAS, proposed changes to an ANDA cannot be implemented without prior review and approval by the FDA. Because we did not receive this notice in the timeframe prescribed by the FDA’s regulations, we believe that our supplemental ANDA is valid, and as such continue to market the product. In addition, we filed a PAS which was accepted by the FDA and was originally assigned action date of June 2017. This date was later revised to October 2017 due to the election by the FDA to perform a Pre-Approval Inspection (“PAI”) of our Baudette manufacturing facilities. The FDA conducted its PAI between May 15, 2017 and May 18, 2017. On July 31, 2017, we received an Establishment Inspection Report from the FDA documenting that no objectionable conditions resulted from the inspection and that no FDA-483 or verbal observations were issued. We continue to reserve all of our legal options in this matter. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | 12. FAIR VALUE DISCLOSURES Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. The inputs used in measuring the fair value of cash and cash equivalents are considered to be level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, borrowings under line of credit, and other current liabilities) approximate their carrying values because of their short-term nature. While our Notes are recorded on our accompanying unaudited interim condensed consolidated balance sheets at their net carrying value of $ 124.4 151.0 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Our contingent value rights (“CVRs”), which were granted coincident with our merger with BioSante and expire in June 2023, are considered contingent consideration and are classified as liabilities. As such, the CVRs were recorded as purchase consideration at their estimated fair value, using level 3 inputs, and are marked to market each reporting period until settlement. The fair value of CVRs is estimated using the present value of our projection of the expected payments pursuant to the terms of the CVR agreement, which is the primary unobservable input. If our projection or expected payments were to increase substantially, the value of the CVRs could increase as a result. The present value of the liability was calculated using a discount rate of 15 Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis We do not have any financial assets and liabilities that are measured at fair value on a non-recurring basis. Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis We do not have any non-financial assets and liabilities that are measured at fair value on a recurring basis. Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis We measure our long-lived assets, including property, plant, and equipment, intangible assets, and goodwill, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. No such fair value impairment was recognized in the six months ended June 30, 2017 and 2016. Acquired Non-Financial Assets Measured at Fair Value In February 2017, we entered into an agreement with Cranford Pharmaceuticals, LLC to purchase a distribution license, trademark, and certain finished goods inventory for Inderal XL for $ 20.2 40 15.1 10 10 We also recorded $ 5.0 In February 2017, we entered into an agreement with Holmdel Pharmaceuticals, LP to purchase the NDA, trademark, and certain finished goods inventory for InnoPran XL, including a license to an Orange Book listed patent, for $ 30.6 30.0 0.6 0.1 19.0 10 10 11.6 In April 2016, we purchased the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC for $ 60.0 5.0 0.3 3.9 64.2 10.9 12 52.4 10 0.6 10 In January 2016, we purchased from Merck Sharp & Dohme B.V. the NDAs for two previously marketed generic drug products for $ 75.0 0.3 10 10 |
BUSINESS, PRESENTATION, AND R18
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2016, has been derived from audited financial statements of that date. The unaudited interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our Annual Report on Form 10-K for the year ended December 31, 2016. Certain prior period information has been reclassified to conform to the current period presentation. Please see Recently Adopted Accounting Pronouncements. |
Principles of consolidation | Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited interim condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, fair value of long-lived assets, deferred taxes and valuation allowance, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued guidance clarifying when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The guidance does not change the accounting for modifications, but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The guidance is effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance must be adopted on a prospective basis. In June 2016, the FASB issued guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. We currently expect that the adoption of this guidance will likely change the way we assess the collectability of our receivables and recoverability of other financial instruments. We have not yet begun to evaluate the specific impacts of this guidance nor have we determined the manner in which we will adopt this guidance. In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We are currently evaluating the impact that the adoption of this guidance will have on our consolidated financial statements. We currently expect that the adoption of this guidance will likely change the way we account for our operating leases and will likely result in recording the future benefits of those leases and the related minimum lease payments on our consolidated balance sheets. We have not yet begun to evaluate the specific impacts of this guidance. In May 2014, the FASB issued guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue arising from contracts with customers. In August 2015, the FASB issued guidance approving a one-year deferral, making the standard effective for reporting periods beginning after December 15, 2017, with early adoption permitted only for reporting periods beginning after December 15, 2016. In March 2016, the FASB issued guidance to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross rather than net, with the same deferred effective date. In April 2016, the FASB issued guidance to clarify the implementation guidance on identifying performance obligations and the accounting for licenses of intellectual property, with the same deferred effective date. In May 2016, the FASB issued guidance rescinding SEC paragraphs related to revenue recognition, pursuant to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force meeting. In May 2016, the FASB also issued guidance to clarify the implementation guidance on assessing collectability, presentation of sales tax, noncash consideration, and contracts and contract modifications at transition, with the same effective date. We do not intend to adopt the guidance early. We expect that the adoption of this guidance will likely change the way we recognize revenue generated under customer contracts. However, we are currently reviewing our contracts with customers to determine if the accounting for these contracts will be impacted by the adoption of this guidance and, if so, if that impact will be material to our consolidated financial statements. We have not yet determined the manner in which we will adopt this guidance. Recently Adopted Accounting Pronouncements In January 2017, the FASB issued guidance to simplify the measurement of goodwill. The guidance eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for interim or annual goodwill impairment tests performed for testing dates after January 1, 2017. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a prospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued guidance clarifying the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance provides a screen to determine when an integrated set of assets and activities is not a business, provides a framework to assist entities in evaluating whether both an input and substantive process are present, and narrows the definition of the term output. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The guidance must be adopted on a prospective basis. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a prospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued guidance to reduce diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The revised guidance requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The guidance was effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. If an entity adopted the guidance in an interim period, any adjustments should have been reflected as of the beginning of the fiscal year that includes that interim period. The guidance must be adopted on a retrospective basis. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a retrospective basis, and all periods have been presented under this guidance. The adoption of this new guidance resulted in the inclusion of our $5.0 million of restricted cash in the cash and cash equivalents balance in our consolidated statement of cash flows for all reporting periods presented in 2017 and onward. In August 2016, the FASB issued guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The guidance must be adopted on a retrospective basis and must be applied to all periods presented, but may be applied prospectively if retrospective application would be impracticable. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017, on a retrospective basis. The adoption of this new guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued guidance simplifying the accounting for and financial statement disclosure of stock-based compensation awards, consisting of changes in the accounting for excess tax benefits and tax deficiencies, and changes in the accounting for forfeitures associated with share-based awards, among other things. We adopted this guidance in the first quarter of 2017, effective as of January 1, 2017. Pursuant to the adoption requirements for excess tax benefits and tax deficiencies, we no longer recognize excess tax benefits or tax deficiencies in Additional Paid in Capital (“APIC”); rather, we recognize them prospectively as a component of our current period provision/(benefit) before income taxes. We did not reverse our current APIC pool, which was $ 3.1 14 We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our condensed consolidated statements of earnings, balance sheets, or cash flows. |
REVENUE RECOGNITION AND RELAT19
REVENUE RECOGNITION AND RELATED ALLOWANCES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Revenue Recognition [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the six months ended June 30, 2017 and 2016, respectively: (in thousands) Accruals for Chargebacks, Rebates, Returns, and Other Allowances Administrative Prompt Government Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2015 $ 11,381 $ 4,631 $ 2,648 $ 1,653 $ 674 Accruals/Adjustments 43,349 5,773 3,256 5,071 2,180 Credits Taken Against Reserve (34,731) (3,895) (2,595) (4,274) (1,678) Balance at June 30, 2016 $ 19,999 $ 6,509 $ 3,309 $ 2,450 $ 1,176 Balance at December 31, 2016 $ 26,785 $ 5,891 $ 5,756 $ 3,550 $ 1,554 Accruals/Adjustments 88,973 5,110 5,220 10,646 3,842 Credits Taken Against Reserve (83,757) (7,467) (3,418) (8,593) (3,448) Balance at June 30, 2017 $ 32,001 $ 3,534 $ 7,558 $ 5,603 $ 1,948 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The carrying value of the Notes is as follows as of: (in thousands) June 30, December 31, Principal amount $ 143,750 $ 143,750 Unamortized debt discount (17,328) (20,644) Deferred financing costs (2,041) (2,463) Net carrying value $ 124,381 $ 120,643 |
Interest Income and Interest Expense Disclosure | The following table sets forth the components of total interest expense related to the Notes recognized in the accompanying unaudited interim condensed consolidated statements of earnings for the three and six months ended June 30, 2017 and 2016: Three Months Ended Six Months Ended (in thousands) June 30, June 30, June 30, June 30, Contractual coupon $ 1,078 $ 1,078 $ 2,156 $ 2,156 Amortization of debt discount 1,668 1,582 3,315 3,144 Amortization of finance fees 211 211 422 422 Capitalized interest (134) (54) (224) (100) $ 2,823 $ 2,817 $ 5,669 $ 5,622 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Earnings per share for the three and six months ended June 30, 2017 and 2016 are calculated for basic and diluted earnings per share as follows: Basic Diluted Basic Diluted (in thousands, except per share amounts) Three Months Ended Three Months Ended Six Months Ended Six Months Ended 2017 2016 2017 2016 2017 2016 2017 2016 Net income $ 2,681 $ 1,125 $ 2,681 $ 1,125 $ 3,833 $ 2,471 $ 3,833 $ 2,471 Net income allocated to restricted stock (20) (8) (20) (8) (28) (17) (28) (17) Net income allocated to common shares $ 2,661 $ 1,117 $ 2,661 $ 1,117 $ 3,805 $ 2,454 $ 3,805 $ 2,454 Basic Weighted-Average Shares Outstanding 11,546 11,402 11,546 11,402 11,536 11,398 11,536 11,398 Dilutive effect of stock options and ESPP 121 139 123 116 Diluted Weighted-Average Shares Outstanding 11,667 11,541 11,659 11,514 Earnings Per Share $ 0.23 $ 0.10 $ 0.23 $ 0.10 $ 0.33 $ 0.22 $ 0.33 $ 0.21 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following as of: (in thousands) June 30, December 31, Raw materials $ 17,183 $ 14,138 Packaging materials 1,279 930 Work-in-progress 776 477 Finished goods (1) 23,279 10,812 42,517 26,357 Reserve for excess/obsolete inventories (210) (174) Inventories, net $ 42,307 $ 26,183 (1) |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant, and equipment consist of the following as of: (in thousands) June 30, December 31, Land $ 160 $ 160 Buildings 3,756 3,756 Machinery, furniture, and equipment 9,174 8,176 Construction in progress 7,846 4,293 20,936 16,385 Less: accumulated depreciation (5,970) (5,387) Property, Plant, and Equipment, net $ 14,966 $ 10,998 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The components of net definite-lived intangible assets are as follows: (in thousands) June 30, 2017 December 31, 2016 Weighted Average Gross Carrying Accumulated Gross Carrying Accumulated Amortization Acquired ANDA intangible assets $ 42,076 $ (10,491) $ 42,076 $ (8,390) 10.0 years NDAs and product rights 184,306 (26,859) 150,250 (17,081) 10.0 years Marketing and distribution rights 11,042 (3,963) 11,042 (2,662) 4.7 years Non-compete agreement 624 (111) 624 (67) 7.0 years $ 238,048 $ (41,424) $ 203,992 $ (28,200) |
Finite-lived Intangible Assets Amortization Expense | Expected future amortization expense is as follows: (in thousands) 2017 (remainder of the year) $ 13,502 2018 26,825 2019 26,825 2020 26,343 2021 24,898 2022 and thereafter 78,231 Total $ 196,624 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our accompanying unaudited interim condensed consolidated statements of earnings: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of sales $ 26 $ 24 $ 49 $ 14 Research and development 168 22 307 49 Selling, general, and administrative 1,585 2,171 2,794 3,259 $ 1,779 $ 2,217 $ 3,150 $ 3,322 |
Schedule of Share-based Compansation, Stock Option And Restricted Stock, Activity | (in thousands) Options RSAs Outstanding December 31, 2015 474 63 Granted 273 42 Options Exercised/RSAs Vested (54) (15) Forfeited (50) (12) Outstanding June 30, 2016 643 78 Outstanding December 31, 2016 578 63 Granted 185 50 Options Exercised/RSAs Vested (2) (27) (1) Forfeited (3) - Outstanding June 30, 2017 758 86 (1) 259 |
BUSINESS, PRESENTATION, AND R26
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Jun. 30, 2017 | Jan. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | |
Restricted Cash and Cash Equivalents, Noncurrent | $ 5,002 | $ 5,002 | $ 5,001 | $ 0 | |
Adjustments for New Accounting Pronouncement [Member] | |||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 14 | ||||
Adjustments for New Accounting Pronouncement [Member] | Additional Paid-in Capital [Member] | |||||
APIC Pool Not Tax Effected | $ 3,100 |
REVENUE RECOGNITION AND RELAT27
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | $ 31,535 | |
Ending balance | 39,050 | |
Chargebacks [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 26,785 | $ 11,381 |
Accruals/Adjustments | 88,973 | 43,349 |
Credits Taken Against Reserve | (83,757) | (34,731) |
Ending balance | 32,001 | 19,999 |
Government Rebates [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 5,891 | 4,631 |
Accruals/Adjustments | 5,110 | 5,773 |
Credits Taken Against Reserve | (7,467) | (3,895) |
Ending balance | 3,534 | 6,509 |
Returns [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 5,756 | 2,648 |
Accruals/Adjustments | 5,220 | 3,256 |
Credits Taken Against Reserve | (3,418) | (2,595) |
Ending balance | 7,558 | 3,309 |
Administrative Fees And Other Rebates [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 3,550 | 1,653 |
Accruals/Adjustments | 10,646 | 5,071 |
Credits Taken Against Reserve | (8,593) | (4,274) |
Ending balance | 5,603 | 2,450 |
Prompt Payment Discounts [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 1,554 | 674 |
Accruals/Adjustments | 3,842 | 2,180 |
Credits Taken Against Reserve | (3,448) | (1,678) |
Ending balance | $ 1,948 | $ 1,176 |
REVENUE RECOGNITION AND RELAT28
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details Textual) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Customer One [Member] | Net Revenues [Member] | ||||
Concentration Risk, Percentage | 32.00% | 28.00% | 32.00% | 25.00% |
Customer Two [Member] | Net Revenues [Member] | ||||
Concentration Risk, Percentage | 24.00% | 21.00% | 22.00% | 24.00% |
Customer Three [Member] | Net Revenues [Member] | ||||
Concentration Risk, Percentage | 23.00% | 18.00% | 24.00% | 17.00% |
Customer One Two And Three [Member] | Net Accounts Receivable [Member] | ||||
Concentration Risk, Percentage | 82.00% |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Principal amount | $ 143,750 | $ 143,750 |
Unamortized debt discount | (17,328) | (20,644) |
Deferred financing costs | (2,041) | (2,463) |
Net carrying value | $ 124,381 | $ 120,643 |
INDEBTEDNESS (Details 1)
INDEBTEDNESS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Contractual coupon | $ 1,078 | $ 1,078 | $ 2,156 | $ 2,156 |
Amortization of debt discount | 1,668 | 1,582 | 3,315 | 3,144 |
Amortization of finance fees | 211 | 211 | 422 | 422 |
Capitalized interest | (134) | (54) | (224) | (100) |
Interest Expense, Debt | $ 2,823 | $ 2,817 | $ 5,669 | $ 5,622 |
INDEBTEDNESS (Details Textual)
INDEBTEDNESS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Feb. 28, 2017 | May 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | |
Long-term Debt, Gross | $ 143,750 | $ 143,750 | $ 143,750 | |||||
Debt Instrument, Unamortized Discount | 17,328 | 17,328 | 20,644 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000 | |||||||
Deferred Finance Costs, Net | 2,041 | 2,041 | 2,463 | |||||
Interest Income (Expense), Nonoperating, Net | (3,025) | $ (2,830) | (5,957) | $ (5,612) | ||||
Long-term Line of Credit | 30,000 | 30,000 | ||||||
Proceeds from Lines of Credit | $ 30,000 | 30,000 | 0 | |||||
Prepaid Expenses and Other Current Assets [Member] | ||||||||
Deferred Costs, Current | $ 200 | $ 200 | ||||||
Convertible Senior Notes [Member] | ||||||||
Long-term Debt, Gross | $ 143,800 | |||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.00% | |||||||
Debt Instrument, Unamortized Discount | $ 33,600 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 96.21 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.90% | 7.90% | ||||||
Debt Instrument, Convertible, Conversion Price | $ 69.48 | |||||||
Convertible Senior Notes [Member] | Accrued Liabilities [Member] | ||||||||
Interest Payable, Current | $ 400 | $ 400 | $ 400 | |||||
Line of Credit [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000 | |||||||
Debt Instrument, Maturity Date | May 12, 2019 | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% | |||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR rate plus 1.25%, 1.50%, or 1.75% per annum, depending upon availability under the Citizens Agreement, or an alternative base rate plus either 0.25%, 0.50%, or 0.75% per annum | |||||||
Deferred Finance Costs, Net | $ 300 | $ 300 | ||||||
Interest Income (Expense), Nonoperating, Net | $ 200 | $ 300 | ||||||
Line Of Credit Facility Additional Revolving Commitment | $ 10,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income, Basic | $ 2,681 | $ 1,125 | $ 3,833 | $ 2,471 |
Net income, Diluted | 2,681 | 1,125 | 3,833 | 2,471 |
Net income allocated to common shares, Basic | 2,661 | 1,117 | 3,805 | 2,454 |
Net income allocated to common shares, Diluted | $ 2,661 | $ 1,117 | $ 3,805 | $ 2,454 |
Basic Weighted-Average Shares Outstanding, Basic | 11,546 | 11,402 | 11,536 | 11,398 |
Dilutive effect of stock options and ESPP, Diluted | 121 | 139 | 123 | 116 |
Diluted Weighted-Average Shares Outstanding, Diluted | 11,667 | 11,541 | 11,659 | 11,514 |
Earnings Per Share, Basic | $ 0.23 | $ 0.1 | $ 0.33 | $ 0.22 |
Earnings Per Share, Diluted | $ 0.23 | $ 0.1 | $ 0.33 | $ 0.21 |
Restricted Stock [Member] | ||||
Net income allocated to restricted stock, Basic | $ (20) | $ (8) | $ (28) | $ (17) |
Net income allocated to restricted stock, Diluted | $ (20) | $ (8) | $ (28) | $ (17) |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4.8 | 4.5 | 4.7 | 4.5 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | |
Inventories | |||
Raw materials | $ 17,183 | $ 14,138 | |
Packaging materials | 1,279 | 930 | |
Work-in-progress | 776 | 477 | |
Finished goods | [1] | 23,279 | 10,812 |
Inventory, Gross, Total | 42,517 | 26,357 | |
Reserve for excess/obsolete inventories | (210) | (174) | |
Inventories, net | $ 42,307 | $ 26,183 | |
[1] | Includes finished goods acquired in asset purchases (Note 12). |
INVENTORIES (Details Textual)
INVENTORIES (Details Textual) - Sales Revenue, Net [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Four Suppliers 2016 [Member] | ||||
Concentration Risk, Percentage | 48.00% | |||
Two Suppliers 2016 [Member] | ||||
Concentration Risk, Percentage | 29.00% | |||
Two suppliers 2017 [Member] | ||||
Concentration Risk, Percentage | 27.00% | |||
One Supplier 2017 [Member] | ||||
Concentration Risk, Percentage | 18.00% |
PROPERTY, PLANT, AND EQUIPMEN36
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment, Gross, Total | $ 20,936 | $ 16,385 |
Less: accumulated depreciation | (5,970) | (5,387) |
Property, Plant, and Equipment, net | 14,966 | 10,998 |
Land [Member] | ||
Property, Plant and Equipment, Gross, Total | 160 | 160 |
Buildings [Member] | ||
Property, Plant and Equipment, Gross, Total | 3,756 | 3,756 |
Machinery, furniture and equipment [Member] | ||
Property, Plant and Equipment, Gross, Total | 9,174 | 8,176 |
Construction in progress [Member] | ||
Property, Plant and Equipment, Gross, Total | $ 7,846 | $ 4,293 |
PROPERTY, PLANT, AND EQUIPMEN37
PROPERTY, PLANT, AND EQUIPMENT (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Depreciation, Total | $ 300 | $ 200 | $ 600 | $ 400 |
Interest Costs Capitalized | $ 100 | $ 54 | $ 200 | $ 100 |
GOODWILL AND INTANGIBLE ASSET38
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 238,048 | $ 203,992 |
Accumulated Amortization | (41,424) | (28,200) |
Acquired ANDA intangible assets | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | 42,076 | 42,076 |
Accumulated Amortization | $ (10,491) | (8,390) |
Weighted Average Amortization Period | 10 years | |
NDAs and product rights | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 184,306 | 150,250 |
Accumulated Amortization | $ (26,859) | (17,081) |
Weighted Average Amortization Period | 10 years | |
Marketing and distribution rights | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 11,042 | 11,042 |
Accumulated Amortization | $ (3,963) | (2,662) |
Weighted Average Amortization Period | 4 years 8 months 12 days | |
Non-compete agreement | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 624 | 624 |
Accumulated Amortization | $ (111) | $ (67) |
Weighted Average Amortization Period | 7 years |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Jun. 30, 2017USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
2017 (remainder of the year) | $ 13,502 |
2,018 | 26,825 |
2,019 | 26,825 |
2,020 | 26,343 |
2,021 | 24,898 |
2022 and thereafter | 78,231 |
Total | $ 196,624 |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Feb. 28, 2017 | Apr. 30, 2016 | Jan. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Amortization of Intangible Assets | $ 6,800 | $ 5,700 | $ 13,200 | $ 10,100 | ||||
Payments to Acquire Intangible Assets | 50,956 | 144,494 | ||||||
Goodwill | 1,838 | 1,838 | $ 1,838 | |||||
Finite-Lived Intangible Assets, Gross | 238,048 | 238,048 | 203,992 | |||||
Accrued Royalties Related To Asset Purchase | $ 0 | $ 3,882 | ||||||
Acquired Finite-lived Intangible Asset, Amortization Description | we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets. | |||||||
Cranford Pharmaceuticals [Member] | Non Compete Agreement [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 600 | |||||||
Inderal XL [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 15,100 | |||||||
Acquisition Costs Capitalized | 40 | |||||||
Asset Acquisition Purchase Price | $ 20,200 | |||||||
InnoPran XL [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 19,000 | |||||||
Acquisition Costs Capitalized | 100 | |||||||
Asset Acquisition Purchase Price | 30,600 | |||||||
InnoPran XL [Member] | Line of Credit [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Payments to Acquire Intangible Assets | 30,000 | |||||||
InnoPran XL [Member] | Cash [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Payments to Acquire Intangible Assets | $ 600 | |||||||
Marketing and Distribution Rights [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years 8 months 12 days | |||||||
Finite-Lived Intangible Assets, Gross | $ 11,042 | $ 11,042 | $ 11,042 | |||||
Marketing and Distribution Rights [Member] | H2 - Pharma, LLC [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Payments to Acquire Intangible Assets | $ 8,800 | |||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 10,000 | |||||||
Acquisition Costs Capitalized | 42 | |||||||
Accrued Royalties Assumed in Asset Purchase | 1,200 | |||||||
New Drug Applications [Member] | Merck Sharp Dohme B.V. [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Payments to Acquire Intangible Assets | $ 75,000 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 75,300 | |||||||
Acquisition Costs Capitalized | $ 300 | |||||||
New Drug Applications [Member] | Cranford Pharmaceuticals [Member] | ||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||
Payments to Acquire Intangible Assets | $ 60,000 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Finite-Lived Intangible Assets, Gross | $ 52,400 | |||||||
Acquisition Costs Capitalized | 300 | |||||||
Accrued Royalties Related To Asset Purchase | 3,900 | |||||||
Asset Acquisition Purchase Price | $ 64,200 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Allocated Share-based Compensation Expense | $ 1,779 | $ 2,217 | $ 3,150 | $ 3,322 |
Cost of Sales [Member] | 2008 Plan [Member] | ||||
Allocated Share-based Compensation Expense | 26 | 24 | 49 | 14 |
Research and Development Expense [Member] | 2008 Plan [Member] | ||||
Allocated Share-based Compensation Expense | 168 | 22 | 307 | 49 |
Selling, General and Administrative Expenses [Member] | 2008 Plan [Member] | ||||
Allocated Share-based Compensation Expense | $ 1,585 | $ 2,171 | $ 2,794 | $ 3,259 |
STOCK-BASED COMPENSATION (Det42
STOCK-BASED COMPENSATION (Details 1) - shares shares in Thousands | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | ||
Options [Member] | |||
Option Shares | |||
Outstanding at the beginning of the period (in shares) | 578 | 474 | |
Granted (in shares) | 185 | 273 | |
Options Exercised/RSAs Vested (in shares) | (2) | (54) | |
Forfeited (in shares) | (3) | (50) | |
Outstanding at the end of the period (in shares) | 758 | 643 | |
RSAs [Member] | |||
Option Shares | |||
Outstanding at the beginning of the period (in shares) | 63 | 63 | |
Granted (in shares) | 50 | 42 | |
Options Exercised/RSAs Vested (in shares) | (27) | [1] | (15) |
Forfeited (in shares) | 0 | (12) | |
Outstanding at the end of the period (in shares) | 86 | 78 | |
[1] | Includes five thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $259 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets. |
STOCK-BASED COMPENSATION (Det43
STOCK-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands | May 06, 2016 | May 17, 2017 | Apr. 26, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Allocated Share-based Compensation Expense | $ 1,779 | $ 2,217 | $ 3,150 | $ 3,322 | ||||
Treasury stock | $ (259) | $ (259) | $ 0 | |||||
Former Chief Financial Officer [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total Cost For Officer Transition Non Stock Based Compensation | 400 | |||||||
Treasury Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Treasury Stock, Shares, Acquired | 5,000 | |||||||
Options [Member] | Former Chief Financial Officer [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Allocated Share-based Compensation Expense | $ 900 | |||||||
Stock Option Grants Vested During Period Due To Modification | 25,167 | |||||||
Stock Options Modified During Period | 2,000 | |||||||
Restricted Stock [Member] | Former Chief Financial Officer [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share Based Payment Awards Other Than Stock Options Modified During Period | 4,050 | |||||||
2008 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 800,000 | 800,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 800,000 | |||||||
Employee Stock Purchase Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 | 200,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date | 15.00% | |||||||
Employee Stock Purchase Plan [Member] | Cost of Sales [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Allocated Share-based Compensation Expense | $ 2 | $ 4 | ||||||
Employee Stock Purchase Plan [Member] | Selling, General and Administrative Expenses [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Allocated Share-based Compensation Expense | $ 26 | $ 39 |
STOCKHOLDER_S EQUITY (Details T
STOCKHOLDER’S EQUITY (Details Textual) - Stock Repurchase Program [Member] - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | |
Jan. 31, 2016 | Oct. 31, 2015 | |
Stock Repurchase Program, Authorized Amount | $ 25 | |
Stock Repurchased and Retired During Period, Shares | 65 | |
Stock Repurchased and Retired During Period, Value | $ 2.5 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Percent | 32.10% | 52.20% | 31.90% | 52.80% | |
Deferred Tax Assets, Valuation Allowance | $ 0.3 | $ 0.3 | $ 0.3 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | ||||
Percentage Of Royalties On Net Sales Of Unapproved Products | less than 1% | less than 1% | less than 1% | less than 1% |
Unapproved Products [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | $ 6.7 | $ 9 | $ 12.9 | $ 18 |
Unapproved Products [Member] | Contract Customer [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | $ 0.4 | $ 0.5 | $ 0.9 | $ 0.8 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||||
Feb. 28, 2017 | Apr. 30, 2016 | Jan. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 15.00% | ||||||
Payments to Acquire Intangible Assets | $ 50,956 | $ 144,494 | |||||
Long-term Debt, Total | 124,381 | $ 120,643 | |||||
Finite-Lived Intangible Assets, Gross | 238,048 | 203,992 | |||||
Inventory, Finished Goods, Gross | [1] | 23,279 | $ 10,812 | ||||
Accrued Royalties Related To Asset Purchase | 0 | $ 3,882 | |||||
Cranford Pharmaceuticals [Member] | Non Compete Agreement [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 10.00% | ||||||
Finite-Lived Intangible Assets, Gross | $ 600 | ||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||||
Inderal XL [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 10.00% | ||||||
Finite-Lived Intangible Assets, Gross | $ 15,100 | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||
Acquisition Costs Capitalized | $ 40 | ||||||
Inventory, Finished Goods, Gross | 5,000 | ||||||
Asset Acquisition Purchase Price | $ 20,200 | ||||||
InnoPran XL [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 10.00% | ||||||
Finite-Lived Intangible Assets, Gross | $ 19,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||
Acquisition Costs Capitalized | $ 100 | ||||||
Inventory, Finished Goods, Gross | 11,600 | ||||||
Asset Acquisition Purchase Price | 30,600 | ||||||
InnoPran XL [Member] | Cash [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Payments to Acquire Intangible Assets | 600 | ||||||
InnoPran XL [Member] | Line of Credit [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Payments to Acquire Intangible Assets | $ 30,000 | ||||||
Merck Sharp Dohme B.V. [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 10.00% | ||||||
Finite-Lived Intangible Assets, Gross | $ 75,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||
Acquisition Costs Capitalized | $ 300 | ||||||
Fair Value, Inputs, Level 1 [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Notes Payable, Fair Value Disclosure | $ 151,000 | ||||||
New Drug Applications [Member] | Cranford Pharmaceuticals [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information | |||||||
Fair Value Inputs, Discount Rate | 12.00% | ||||||
Payments to Acquire Intangible Assets | $ 60,000 | ||||||
Finite-Lived Intangible Assets, Gross | $ 52,400 | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||
Acquisition Costs Capitalized | $ 300 | ||||||
Inventory, Finished Goods, Gross | 10,900 | ||||||
Funds Held In Escrow In Relation To Asset Purchase | 5,000 | ||||||
Accrued Royalties Related To Asset Purchase | 3,900 | ||||||
Asset Acquisition Purchase Price | $ 64,200 | ||||||
[1] | Includes finished goods acquired in asset purchases (Note 12). |