Lannett (LCINQ) 8-K Results of Operations and Financial Condition

Exhibit 99.1

	Contact:	Robert Jaffe
		Robert Jaffe Co., LLC
		(424) 288-4098

LANNETT REPORTS RECORD FISCAL 2015 SECOND QUARTER

NET SALES OF $115 MILLION, EPS OF $1.21

—Company Raises Outlook for Fiscal 2015—

Philadelphia, PA — February 4, 2015 — Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2015 second quarter ended December 31, 2014.

For the fiscal 2015 second quarter, net sales rose 71% to $114.8 million from $67.3 million in last year’s second quarter.  Gross profit doubled to $87.2 million, or 76% of net sales, from $41.0 million, or 61% of net sales.  Research and development (R&D) expenses increased to $7.8 million from $5.8 million for the fiscal 2014 second quarter.  Selling, general and administrative (SG&A) expenses were $12.8 million, compared with $9.9 million in the same quarter of the prior year.  Operating income more than doubled to $66.5 million from $25.4 million for the prior year second quarter.  Net income attributable to Lannett Company grew 170% to $44.8 million, or $1.21 per diluted share, from $16.6 million, or $0.46 per diluted share.

“Strong sales and gross margin across a number of product categories drove our record financial results,” said Arthur Bedrosian, chief executive officer of Lannett.  “The fiscal 2015 second quarter represents the ninth consecutive quarter of record net sales, as well as the twelfth consecutive quarter in which net sales and adjusted EPS exceeded the comparable prior-year period.  Looking ahead, we expect our momentum in the first half of the year to continue into the second half.”

For the first six months of fiscal 2015, net sales rose 84% to $208.2 million from $113.2 million in the comparable prior-year period.  Gross profit was $158.8 million, or 76% of net sales.  This compares with gross profit for the first six months of fiscal 2014 of $42.3 million, or 37% of net sales, which included a non-recurring pre-tax charge of $20.1 million related to the contract extension with Jerome Stevens Pharmaceuticals, Inc. (JSP).  Excluding the JSP contract renewal charge, gross profit was $62.4 million, or 55% of net sales.  R&D expenses increased to $14.2 million from $10.5 million for the fiscal 2014 first six months.  SG&A expenses were $23.4 million, compared with $17.1 million in the same period of the prior year.  Operating income was $121.2 million compared with $14.7 million for the first six months of the prior year.  Excluding the JSP contract renewal charge, operating income for the prior-year period was $34.8 million.  Net income attributable to Lannett Company was $79.7 million, or $2.15 per diluted share, compared with $10.6 million, or $0.31 per diluted share.  Adjusted net income, which excludes the impact

of the JSP contract renewal charge equal to $12.6 million after-tax, was $23.2 million, or $0.69 per diluted share, in the first six months of fiscal 2014.

Guidance for Fiscal 2015

Based on Lannett’s current outlook, the company raised its financial guidance for the fiscal 2015 full year as follows:

·Net sales in the range of $395 million to $405 million, up from previous guidance of $370 million to $390 million;

·Gross margin as a percentage of net sales of approximately 74% to 75%, revised from 73% to 75%;

·R&D expense in the range of $29 million to $31 million, down from previous guidance of $34 million to $36 million;

·SG&A expense ranging from $47 million to $49 million, up from $46 million to $48 million;

·The full year effective tax rate to be in the range of 34% to 35%, down from previous guidance of 36% to 38%; and

·Capital expenditures in fiscal 2015 in the range of $40 million to $50 million, which includes $7 million to continue the partial fit-out of two buildings recently acquired by the company, unchanged from previous guidance.

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for the fiscal 2015 second quarter ended December 31, 2014.  The conference call will be available to interested parties by dialing 877-261-8992 from the U.S. or Canada, or 847-619-6548 from international locations, passcode 38859987.  The call will be broadcast via the Internet at www.lannett.com.  Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software.  A playback of the call will be archived and accessible on the same website for at least three months

Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

About Lannett Company, Inc.:

Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical 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, achieving the financial metrics stated in the company’s guidance for fiscal 2015, 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.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)

	Three months ended						Six months ended
	December 31,						December 31,
	2014			2013			2014			2013
Net sales	$	114,822		$	67,326		$	208,209		$	113,155
Cost of sales	27,621			26,284			49,441			50,707
JSP contract renewal cost	—			—			—			20,100
Gross profit	87,201			41,042			158,768			42,348
Operating expenses:
Research and development	7,836			5,785			14,199			10,530
Selling, general, and administrative	12,822			9,890			23,375			17,069
Total operating expenses	20,658			15,675			37,574			27,599
Operating income	66,543			25,367			121,194			14,749
Other income (expense):
Gain (loss) on sale of assets	—			7			20			(55		)
Gain on investment securities	680			1,102			695			1,565
Interest and dividend income	106			49			208			95
Interest expense	(73		)	(46		)	(111		)	(104		)
Other	—			(87		)	—			(87		)
Total other income	713			1,025			812			1,414
Income before income tax	67,256			26,392			122,006			16,163
Income tax expense	22,435			9,800			42,235			5,558
Net income	44,821			16,592			79,771			10,605
Less: Net income attributable to noncontrolling interest	10			26			28			34
Net income attributable to Lannett Company, Inc.	$	44,811		$	16,566		$	79,743		$	10,571
Earnings per common share attributable to Lannett Company, Inc.
Basic	$	1.26		$	0.48		$	2.24		$	0.33
Diluted	$	1.21		$	0.46		$	2.15		$	0.31
Weighted average common shares outstanding:
Basic	35,669,904			34,677,426			35,633,917			32,131,831
Diluted	37,074,024			36,276,326			37,025,667			33,561,454

LANNETT COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	(Unaudited)
	December 31, 2014			June 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	170,607		$	105,587
Investment securities	14,328			40,693
Accounts receivable, net	90,645			61,325
Inventories, net	42,642			44,844
Deferred tax assets	11,655			11,265
Other current assets	4,156			1,833
Total current assets	334,033			265,547
Property, plant and equipment, net	75,276			61,704
Intangible assets, net	1,186			927
Deferred tax assets	12,917			14,234
Other assets	320			361
TOTAL ASSETS	$	423,732		$	342,773
LIABILITIES
Current liabilities:
Accounts payable	$	19,045		$	20,982
Accrued expenses	4,181			3,901
Accrued payroll and payroll-related expenses	5,459			12,860
Rebates payable	10,198			4,558
Income taxes payable	4,149			4,569
Current portion of long-term debt	132			129
Total current liabilities	43,164			46,999
Long-term debt, less current portion	942			1,009
TOTAL LIABILITIES	44,106			48,008
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Common stock ($0.001 par value, 100,000,000 shares authorized; 36,217,404 and 36,088,272 shares issued; 35,700,412 and 35,571,280 shares outstanding at December 31, 2014 and June 30, 2014, respectively)	36			36
Additional paid-in capital	222,149			216,793
Retained earnings	163,397			83,654
Accumulated other comprehensive loss	(320		)	(54		)
Treasury stock (516,992 shares at December 31, 2014 and June 30, 2014)	(5,959		)	(5,959		)
Total Lannett Company, Inc. stockholders’ equity	379,303			294,470
Noncontrolling interest	323			295
Total stockholders’ equity	379,626			294,765
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	423,732		$	342,773