Exhibit 99.1
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| Contacts: |
| Robert Jaffe/Evan Pondel |
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| PondelWilkinson Inc. |
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| (310) 279-5980 |
LANNETT REPORTS FISCAL 2008 SECOND QUARTER FINANCIAL RESULTS
Philadelphia, PA — February 8, 2008 — Lannett Company, Inc. (AMEX: LCI) today reported its financial results for the fiscal 2008 second quarter and six months ended December 31, 2007.
For the second quarter of fiscal 2008, net sales were $17.5 million compared with $22.9 million for the same period of the prior year. Net loss was $658,000, or $0.03 per share, versus net income of $955,000, or $0.04 per basic and diluted share, for the second quarter of fiscal 2007.
For the first six months of fiscal 2008, net sales were $35.1 million compared with $44.9 million for the same period of the prior year. Net loss was $785,000, or $0.03 per share, versus net income of $2.3 million, or $0.09 per basic and diluted share, for the first half of fiscal 2007.
“We continue to make progress on integrating our acquired raw material and oral solutions supplier and expect this unit to begin generating positive cash flow in early fiscal 2009,” said Arthur Bedrosian, president and chief executive officer of Lannett. “Costs associated with operating this unit, combined with certain non-recurring expenses and professional fees, offset what would have otherwise been a profitable quarter.”
For the second quarter of fiscal 2008, gross profit was $4.9 million, or 28% of net sales, compared with $5.5 million, or 24% of net sales, for the same period in the prior year. Research and development expenses decreased to $946,000 from $1.5 million in the comparable prior year period. SG&A expenses increased to $4.3 million, compared with $2.0 million, in the same period last year. Amortization expense was $446,000 for the second quarter in both fiscal 2008 and 2007.
For the first six months of fiscal 2008, gross profit was $10.7 million, or 30% of net sales, compared with $14.2 million, or 32% of net sales, for the same period in the prior year. Research and development expenses decreased to $2.2 million from $3.3 million in the comparable prior year period. SG&A expenses increased to $8.5 million, compared with $6.4 million, in the same period last year. Amortization expense was $892,000 for the first six months of both fiscal 2008 and 2007.
About Lannett Company, Inc.:
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit the company’s website at www.lannett.com.
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, pending ANDAs and products in various stages of development, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannett’s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company’s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking
statements represent the company’s judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
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FINANCIAL TABLES FOLLOW
LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
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| (UNAUDITED) |
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| December 31, |
| June 30, |
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| 2007 |
| 2007 |
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Assets: |
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Current Assets: |
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Cash |
| $ | 1,985,769 |
| $ | 5,192,341 |
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Trade accounts receivable, net |
| 22,226,732 |
| 19,473,978 |
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Inventories |
| 11,994,176 |
| 14,518,484 |
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Interest receivable |
| 57,835 |
| 36,260 |
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Prepaid taxes |
| 3,193,685 |
| 3,193,685 |
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Deferred tax assets |
| 1,676,172 |
| 1,258,930 |
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Other current assets |
| 825,481 |
| 611,512 |
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Total current assets |
| 41,959,850 |
| 44,285,190 |
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Property, plant, and equipment, net |
| 26,291,230 |
| 27,443,161 |
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Investment securities - available-for-sale |
| 2,346,599 |
| 3,320,632 |
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Deferred tax assets |
| 16,919,138 |
| 17,150,174 |
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Intangible asset, net |
| 11,254,168 |
| 12,046,502 |
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Construction in progress |
| 700,278 |
| 176,003 |
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Other assets |
| 213,411 |
| 234,438 |
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Total Assets |
| $ | 99,684,674 |
| $ | 104,656,100 |
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Liabilities and Shareholders’ Equity: |
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Current liabilities |
| $ | 17,783,313 |
| $ | 22,250,243 |
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Long-term debt, less current portion |
| 8,693,276 |
| 8,987,846 |
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Deferred tax liabilities |
| 3,207,989 |
| 3,202,835 |
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Other long term liabilities |
| 26,237 |
| 32,001 |
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Shareholders’ equity |
| 69,973,859 |
| 70,183,175 |
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Total Liabilities and Shareholders’ Equity |
| $ | 99,684,674 |
| $ | 104,656,100 |
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LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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| For the Three Months Ended |
| For the Six Months Ended |
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| (UNAUDITED) |
| (UNAUDITED) |
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| December 31, |
| December 31, |
| December 31, |
| December 31, |
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| 2007 |
| 2006 |
| 2007 |
| 2006 |
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Net sales |
| $ | 17,534,942 |
| $ | 22,916,347 |
| $ | 35,074,972 |
| $ | 44,884,171 |
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Cost of sales (excluding amortization of intangible asset) |
| 12,619,384 |
| 17,402,285 |
| 24,411,920 |
| 30,642,680 |
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Gross profit |
| 4,915,558 |
| 5,514,062 |
| 10,663,052 |
| 14,241,491 |
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Research and development expenses |
| 946,282 |
| 1,538,108 |
| 2,198,430 |
| 3,316,534 |
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Selling, general and administrative expenses |
| 4,296,993 |
| 1,981,664 |
| 8,472,273 |
| 6,353,241 |
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Amortization of intangible asset |
| 446,166 |
| 446,166 |
| 892,332 |
| 892,332 |
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Operating (loss) income |
| (773,883 | ) | 1,548,124 |
| (899,983 | ) | 3,679,384 |
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Other (expense) income |
| (43,647 | ) | 43,828 |
| (90,393 | ) | 78,412 |
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(Loss) income before taxes |
| (817,530 | ) | 1,591,952 |
| (990,376 | ) | 3,757,796 |
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Income tax (benefit) expense |
| (159,983 | ) | 636,781 |
| (205,668 | ) | 1,504,598 |
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Net (loss) income |
| $ | (657,547 | ) | $ | 955,171 |
| $ | (784,708 | ) | $ | 2,253,198 |
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(Loss) earnings per share: |
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| Basic |
| $ | (0.03 | ) | $ | 0.04 |
| $ | (0.03 | ) | $ | 0.09 |
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| Diluted |
| $ | (0.03 | ) | $ | 0.04 |
| $ | (0.03 | ) | $ | 0.09 |
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Shares used to calculate (loss) earnings per share: |
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| Basic |
| 24,183,044 |
| 24,154,553 |
| 24,179,344 |
| 24,151,237 |
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| Diluted |
| 24,183,044 |
| 24,222,515 |
| 24,179,344 |
| 24,197,946 |
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