Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 15-May-14 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Registrant Name | 'PAR PHARMACEUTICAL COMPANIES, INC. | ' |
Entity Central Index Key | '0000878088 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 100 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Current assets: | ' | ' | ||
Cash and cash equivalents | $220,560 | $130,080 | ||
Available for sale marketable debt securities | 2,517 | 3,541 | ||
Accounts receivable, net | 94,005 | 143,279 | ||
Inventories | 170,724 | 117,307 | ||
Prepaid expenses and other current assets | 16,826 | 13,980 | ||
Deferred income tax assets | 62,749 | 55,932 | ||
Income taxes receivable | 6,359 | 1,458 | ||
Total current assets | 573,740 | 465,577 | ||
Property, plant and equipment, net | 206,430 | 127,276 | ||
Intangible assets, net | 1,297,087 | 1,092,648 | ||
Goodwill | 1,002,339 | 849,652 | ||
Other assets | 95,217 | 96,342 | ||
Total assets | 3,174,813 | 2,631,495 | ||
Current liabilities: | ' | ' | ||
Current portion of long-term debt | 9,467 | 21,462 | ||
Accounts payable | 75,814 | 31,181 | ||
Payables due to distribution agreement partners | 67,262 | 79,117 | ||
Accrued salaries and employee benefits | 17,516 | 20,700 | ||
Accrued government pricing liabilities | 30,512 | [1] | 35,829 | [1] |
Accrued legal fees | 10,809 | 4,395 | ||
Accrued legal settlements | 37,517 | 41,367 | ||
Payable to former Anchen securityholders | 2,237 | 2,305 | ||
Accrued interest payable | 16,563 | 7,629 | ||
Accrued expenses and other current liabilities | 18,422 | 14,986 | ||
Total current liabilities | 286,119 | 258,971 | ||
Long-term liabilities | 21,906 | 20,322 | ||
Non-current deferred tax liabilities | 334,664 | 288,783 | ||
Long-term debt, less current portion | 1,913,767 | 1,516,057 | ||
Commitments and contingencies | 0 | 0 | ||
Stockholders' equity: | ' | ' | ||
Common stock, $0.001 par value per share, 100 shares authorized and issued | 0 | 0 | ||
Additional paid-in capital | 797,519 | 686,577 | ||
Accumulated deficit | -177,780 | -138,416 | ||
Accumulated other comprehensive loss | -1,382 | -799 | ||
Total stockholders' equity | 618,357 | 547,362 | ||
Total liabilities and stockholders’ equity | $3,174,813 | $2,631,495 | ||
[1] | Includes amounts due to indirect customers for which no underlying accounts receivable exists and is principally comprised of Medicaid rebates and rebates due under other U.S. Government pricing programs, such as TriCare and the Department of Veterans Affairs. |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 100 | 100 |
Common Stock, shares issued | 100 | 100 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Net product sales | $282,833 | $282,518 |
Other product related revenues | 6,251 | 7,678 |
Total revenues | 289,084 | 290,196 |
Cost of goods sold, excluding amortization expense | 150,668 | 178,681 |
Amortization expense | 44,102 | 40,071 |
Total cost of goods sold | 194,770 | 218,752 |
Gross margin | 94,314 | 71,444 |
Operating expenses: | ' | ' |
Research and development | 34,624 | 20,224 |
Selling, general and administrative | 50,941 | 40,795 |
Intangible asset impairment | 41,758 | 0 |
Restructuring costs | 1,146 | 1,816 |
Total operating expenses | 128,469 | 62,835 |
Operating (loss) income | -34,155 | 8,609 |
Interest income | 14 | 37 |
Interest expense | -25,467 | -24,036 |
Loss on debt extinguishment | -3,989 | -7,335 |
Loss before benefit for income taxes | -63,597 | -22,725 |
(Benefit) provision for income taxes | -24,232 | -7,979 |
Net loss | ($39,365) | ($14,746) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net (loss) income | ($39,365) | ($14,746) |
Other comprehensive (loss) income: | ' | ' |
Unrealized (loss) gain on marketable securities, net of tax | -6 | -12 |
Unrealized loss on cash flow hedges, net of tax | -1,212 | 0 |
Less: reclassification adjustment for net (gains) losses included in net income, net of tax | 635 | 0 |
Other comprehensive loss | -583 | -12 |
Comprehensive (loss) income | ($39,948) | ($14,758) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net (loss) income | ($39,365) | ($14,746) |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Deferred income taxes | -28,036 | -7,648 |
Depreciation and amortization | 50,663 | 45,959 |
Non-cash interest expense | 2,686 | 2,654 |
Cost of goods on acquired inventory step up | 2,986 | 6,557 |
Intangible asset impairments | 41,758 | 0 |
Allowances against accounts receivable | 13,520 | 2,288 |
Share-based compensation expense | 942 | 2,268 |
Loss on debt extinguishment | 3,989 | 7,335 |
Other, net | -53 | 303 |
Changes in assets and liabilities: | ' | ' |
(Increase) decrease in accounts receivable | 41,997 | -28,215 |
(Increase) decrease in inventories | -20,984 | -15,570 |
Increase in prepaid expenses and other assets | -1,343 | 388 |
Increase in accounts payable, accrued expenses and other liabilities | 36,386 | 22,256 |
Payment to Department of Justice (DOJ) | 0 | -43,941 |
Increase (decrease) in payables due to distribution agreement partners | -12,102 | 36,097 |
Decrease (increase) in income taxes receivable/payable | -3,905 | -9,872 |
Net cash provided by operating activities | 89,139 | 6,113 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -13,212 | -4,408 |
Purchase of JHP, net of cash acquired | -478,647 | 0 |
Proceeds from available for sale of marketable debt securities | 1,000 | 1,000 |
Net cash used in investing activities | -490,859 | -3,408 |
Cash flows from financing activities: | ' | ' |
Proceeds from debt | 525,541 | 143,889 |
Payments of debt | -140,191 | -143,886 |
Debt issuance costs | -3,150 | 0 |
Payments to extinguish debt | 0 | -1,412 |
Proceeds from equity contributions, net | 110,000 | 2,070 |
Net cash provided by (used in) financing activities | 492,200 | 661 |
Net (decrease) increase in cash and cash equivalents | 90,480 | 3,366 |
Cash and cash equivalents at beginning of period | 130,080 | 36,794 |
Cash and cash equivalents at end of period | 220,560 | 40,160 |
Cash paid (received) during the period for: | ' | ' |
Income taxes, net | 7,721 | 11,134 |
Interest paid | 13,631 | 11,700 |
Non-cash transactions: | ' | ' |
Capital expenditures incurred but not yet paid | $731 | $634 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation: | |
The accompanying condensed consolidated financial statements at March 31, 2014 and for the three-month periods ended March 31, 2014 and March 31, 2013 are unaudited. In the opinion of management, however, such statements include all normal recurring adjustments necessary to present fairly the information presented therein. The condensed consolidated balance sheet at December 31, 2013 was derived from the Company’s audited consolidated financial statements included in our 2013 Annual Report on Form 10-K. | |
The accompanying condensed consolidated financial statements and these notes to condensed consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States of America for audited financial statements. Accordingly, these statements should be read in conjunction with our 2013 Annual Report on Form 10-K. Results of operations for interim periods are not necessarily indicative of those that may be achieved for full fiscal years. |
Sky_Growth_Merger
Sky Growth Merger (Sky Growth Merger [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
Sky Growth Merger [Member] | ' |
Business Acquisition [Line Items] | ' |
Business Acquisition Disclosure | ' |
Sky Growth Merger: | |
The Transactions | |
We were acquired at the close of business on September 28, 2012 through the Merger. Holdings and its wholly-owned subsidiaries were formed by affiliates of TPG solely for the purposes of completing the Merger and the related transactions. At the time of the Merger, each share of our common stock issued and outstanding immediately prior to the close of the Merger was converted into the right to receive cash. Aggregate consideration tendered at September 28, 2012 was for 100% of the equity of the Company. Subsequent to the Merger, we became an indirect, wholly owned subsidiary of Holdings. | |
The Merger was accounted for as a purchase business combination in accordance with ASC 805, "Business Combinations," ("ASC 805") whereby the purchase price paid to effect the Merger was allocated to recognize the acquired assets and liabilities assumed at fair value. The acquisition method of accounting uses the fair value concept defined in ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). | |
Transactions with Manager | |
In connection with the Merger and the related transactions, the Company entered into a management services agreement with an affiliate of TPG (the “Manager”). Pursuant to the agreement, in exchange for on-going consulting and management advisory services, the Manager receives an annual monitoring fee paid quarterly equal to 1% of EBITDA as defined under the Company’s senior secured credit facilities. There is an annual cap of $4 million for this fee. The Manager also receives reimbursement for out-of-pocket expenses incurred in connection with services provided pursuant to the agreement. The Company recorded an expense of $935 thousand for the three months ended March 31, 2014 and an expense of $861 thousand for the three months ended March 31, 2013 for consulting and management advisory service fees and out-of-pocket expenses, which are included in selling, general and administrative expenses in the condensed consolidated statement of operations. |
JPH_Acquisition
JPH Acquisition (JHP Group Holdings [Member]) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
JHP Group Holdings [Member] | ' | |||||||||||
Business Acquisition [Line Items] | ' | |||||||||||
Business Acquisition Disclosure | ' | |||||||||||
JHP Acquisition: | ||||||||||||
On February 20, 2014, the Company completed its acquisition of JHP Group Holdings, Inc. and its subsidiaries (collectively, “JHP”), a privately-held, specialty sterile products pharmaceutical company. The acquisition was accomplished through a reverse subsidiary merger of an indirect subsidiary of the Company with and into JHP Group Holdings, Inc., in which JHP Group Holdings, Inc. was the surviving entity and became an indirect, wholly owned subsidiary of the Company (the “JHP Acquisition”). The consideration for the JHP Acquisition consisted of $488 million in cash, subject to certain customary working capital adjustments. The Company financed the JHP Acquisition with proceeds received in connection with the debt financing provided by third party lenders of $395 million and an equity contribution of $110 million from certain investment funds associated with TPG. Among the primary reasons we acquired JHP and the factors that contributed to the preliminary recognition of goodwill was that the JHP Acquisition immediately expanded our presence into the rapidly growing market for injectable products and will eventually include ophthalmics and otics. The result is a broader and more diversified product portfolio, and an expanded development pipeline. With its high-barrier-to-entry products, JHP represents a complement to our strategy and product line. JHP also has a reputation for high-quality products and a strong record of regulatory compliance, which had driven its steady revenue growth prior to our acquisition. | ||||||||||||
JHP operates principally through its operating subsidiary, JHP Pharmaceuticals, LLC, which we have renamed Par Sterile Products, LLC (“Par Sterile”). Par Sterile will continue its activities as a leading specialty pharmaceutical company that develops, manufactures and markets sterile injectable products. Par Sterile marketed a portfolio of 14 specialty injectable products, including Aplisol® and Adrenalin®, and had developed a pipeline of approximately 30 products, 17 of which have been submitted for approval to the U.S. Food and Drug Administration at the time of the JHP Acquisition. Par Sterile’s products are predominately sold to hospitals through the wholesale distribution channel. Par Sterile targets products with limited competition due to difficulty in manufacturing and/or the product’s market size. Par Sterile’s manufacturing facility in Rochester, Michigan, has the capability to manufacture small-scale clinical through large-scale commercial products. | ||||||||||||
The operating results of Par Sterile from February 20, 2014 to March 31, 2014 are included in the accompanying condensed consolidated statement of operations as part of the Par Pharmaceutical segment, reflecting total revenues of approximately $14 million and an immaterial impact on loss from continuing operations. The condensed consolidated balance sheet as of March 31, 2014 reflects the JHP Acquisition, including goodwill, which represents Par Sterile's workforce expertise in R&D, marketing and manufacturing. | ||||||||||||
The JHP Acquisition has been accounted for as a business purchase combination using the acquisition method of accounting under the provisions of ASC 805. The acquisition method of accounting uses the fair value concept defined in ASC 820. ASC 805 requires, among other things, that most assets acquired and liabilities assumed in a business purchase combination be recognized at their fair values as of the JHP Acquisition date and that the fair value of acquired in-process research and development (“IPR&D”) be recorded on the balance sheet regardless of the likelihood of success of the related product or technology as of the completion of the JHP Acquisition. The process for estimating the fair values of IPR&D, identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, timing and probability of success to complete in-process projects and projecting regulatory approvals. Under ASC 805, transaction costs are not included as a component of consideration transferred and were expensed as incurred. The JHP Acquisition-related transaction costs incurred for the quarter ended March 31, 2014 totaled $12,350 thousand of which $8,213 thousand were included in operating expenses as selling, general and administrative on the condensed consolidated statements of operations and $4,137 thousand were capitalized as deferred financing costs or debt discount on the condensed consolidated balance sheet. The JHP Acquisition-related transaction costs for the quarter ended March 31, 2014 were comprised of bank fees ($10,388 thousand), legal fees ($1,505 thousand), and other fees ($457 thousand). The excess of the purchase price (consideration transferred) over the estimated amounts of identifiable assets and liabilities of JHP as of the effective date of the JHP Acquisition was allocated to goodwill, as part of the Par Pharmaceutical segment, in accordance with ASC 805. The purchase price allocation is subject to completion of our analysis of the fair value of the assets and liabilities of JHP as of the effective date of the JHP Acquisition. Accordingly, the purchase price allocation below is preliminary and will be adjusted upon completion of the final valuation. These adjustments could be material. Specific provisional areas include preliminary amounts for inventories, including related step-up to fair value; property, plant and equipment; intangible assets related to trade name, developed products and in-process research and development products; and goodwill. The final valuation is expected to be completed as soon as practicable but no later than one year from the consummation of the acquisition on February 20, 2014. The establishment of the fair value of the consideration for an acquisition, and the allocation to identifiable tangible and intangible assets and liabilities, requires the extensive use of accounting estimates and management judgment. We believe the fair values assigned to the assets acquired and liabilities assumed are based on reasonable estimates and assumptions based on data currently available. | ||||||||||||
The sources and uses of funds in connection with the JHP Acquisition are summarized below ($ in thousands): | ||||||||||||
Sources: | Uses: | |||||||||||
Senior secured term loan | $ | 395,000 | Cash purchase of equity | $ | 487,929 | |||||||
Sponsor equity contribution | 110,000 | Transaction costs | 12,350 | |||||||||
Company cash on hand | 1,633 | Accrued interest on Company debt | 6,354 | |||||||||
Total source of funds | $ | 506,633 | Total use of funds | $ | 506,633 | |||||||
Fair Value Estimate of Assets Acquired and Liabilities Assumed | ||||||||||||
The purchase price of JHP has been allocated on a preliminary basis to the following assets and liabilities ($ in thousands): | ||||||||||||
As of February 20, 2014 | ||||||||||||
Cash and cash equivalents | $ | 9,278 | ||||||||||
Accounts receivable, net | 6,244 | |||||||||||
Inventories | 35,418 | |||||||||||
Prepaid expenses and other current assets | 1,797 | |||||||||||
Property, plant and equipment | 73,939 | |||||||||||
Intangible assets | 290,299 | |||||||||||
Other long-term assets, net | 2,658 | |||||||||||
Total identifiable assets | 419,633 | |||||||||||
Accounts payable | 13,716 | |||||||||||
Accrued expenses and other current liabilities | 2,496 | |||||||||||
Deferred tax liabilities | 67,425 | |||||||||||
Other long-term liabilities | 754 | |||||||||||
Total liabilities assumed | 84,391 | |||||||||||
Net identifiable assets acquired | 335,242 | |||||||||||
Goodwill | 152,687 | |||||||||||
Net assets acquired | $ | 487,929 | ||||||||||
Approximately $20 million of the goodwill identified above and recorded on the condensed consolidated balance sheet as of March 31, 2014 will be deductible for income tax purposes. | ||||||||||||
Supplemental Pro forma Information (unaudited) | ||||||||||||
The following unaudited pro forma information for the quarter ended March 31, 2014, and the quarter ended March 31, 2013 assumes the JHP Acquisition occurred as of January 1, 2013. The pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized had the JHP Acquisition been consummated during the periods for which pro forma information is presented, or is it intended to be a projection of future results or trends. | ||||||||||||
Three months ended | ||||||||||||
(In thousands) | 31-Mar-14 | 31-Mar-13 | ||||||||||
Total revenues | $ | 308,146 | $ | 328,768 | ||||||||
Loss from continuing operations | $ | (29,476 | ) | $ | (32,502 | ) | ||||||
These amounts have been calculated after adjusting for the additional expense that would have been recorded assuming the fair value adjustments to finite-lived intangible assets ($199,300 thousand) and inventory ($10,748 thousand) had been applied on January 1, 2013, and the debt incurred as a result of the JHP Acquisition ($395,000 thousand) had been outstanding since January 1, 2013, along with the related repricing of the Term Loan Facility (as defined in Note 15, "Debt"), together with the consequential tax effects. | ||||||||||||
Pro forma loss from continuing operations for the quarter ended March 31, 2014 was adjusted to exclude $8,213 thousand of JHP Acquisition-related costs incurred in 2014 with the consequential tax effects. These costs were primarily bank fees, accounting fees, and legal fees. Pro forma loss from continuing operations for the quarter ended March 31, 2013 was adjusted to include the JHP Acquisition-related costs with the consequential tax effects. Pro forma loss from continuing operations for the quarters ended March 31, 2014 and 2013 have been adjusted to exclude certain JHP historical amounts such as intangible asset amortization. |
Acquisition_of_Divested_Produc
Acquisition of Divested Products from the Watson/Actavis Merger (Watson/Actavis Divestiture Products [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
Watson/Actavis Divestiture Products [Member] | ' |
Business Acquisition [Line Items] | ' |
Business Acquisition Disclosure | ' |
Acquisition of Divested Products from the Watson/Actavis Merger: | |
In connection with the merger of Watson Pharmaceuticals, Inc. and Actavis Group on November 6, 2012 (the “Watson/Actavis Merger”), Par acquired the U.S. marketing rights to five generic products that were marketed by Watson or Actavis, as well as eight Abbreviated New Drug Applications (“ANDA”) awaiting regulatory approval, and a generic product in late-stage development for $110 million. Par also acquired a number of related supply agreements each with a term of three years. The purchase price was paid in cash and funded from our cash on hand. | |
The acquisition was accounted for as a business combination and a bargain purchase under ASC 805. The purchase price of the acquisition was allocated to the assets acquired, with the excess of the fair value of assets acquired over the purchase price recorded as a gain. The gain was mainly attributed to the FTC-mandated divestiture of products by Watson and Actavis in conjunction with the approval of the related Watson/Actavis Merger. |
Edict_Acquisition
Edict Acquisition (Edict Acquisition [Member]) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Edict Acquisition [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Business Acquisition Disclosure | ' | ||||
Edict Acquisition: | |||||
On February 17, 2012, through Par Pharmaceutical, Inc., our wholly-owned subsidiary, we completed our acquisition of privately-held Edict Pharmaceuticals Private Limited, which has been renamed Par Formulations Private Limited (“Par Formulations”), for cash and our repayment of certain additional pre-close indebtedness (the “Edict Acquisition”). The operating results of Par Formulations were included in our consolidated financial results from the date of acquisition. The operating results were reflected as part of the Par Pharmaceutical segment. We funded the purchase from cash on hand. | |||||
The addition of Par Formulations broadened our industry expertise and expanded our R&D and manufacturing capabilities. The Edict Acquisition was revalued as part of the Merger. Refer to Note 2, “Sky Growth Merger.” | |||||
Consideration Transferred | |||||
The acquisition-date fair value of the consideration transferred consisted of the following items ($ amounts in thousands): | |||||
Cash paid for equity | $ | 20,659 | |||
Contingent purchase price liabilities | 11,641 | -1 | |||
Cash paid for assumed indebtedness | 4,300 | ||||
Total consideration | $ | 36,600 | |||
-1 | Contingent purchase price liabilities represent subsequent milestone payments related to successful FDA inspection of the Par Formulations manufacturing facility and ANDA filings. All contingent purchase price liabilities were paid in full within 18 months of the acquisition date. |
Pending_Acquisition_of_NuRay
Pending Acquisition of NuRay (NuRay [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
NuRay [Member] | ' |
Business Acquisition [Line Items] | ' |
Business Acquisition Disclosure | ' |
Pending Acquisition of Nuray Assets: | |
On November 1, 2013, our wholly-owned subsidiary, Par Formulations Private Limited, entered into a definitive agreement to purchase certain assets of privately-held Nuray Chemicals Private Limited ("Nuray"), a Chennai, India based developer and manufacturer of active pharmaceutical ingredients (“API”) for up to $19 million in cash and contingent payments. The assets to be acquired consist of Nuray’s API business located in Kakkalur, Tamil Nadu, India, including real property, improvements and related assets (the “Kakkalur Business”). The closing of the acquisition is subject to the receipt of applicable regulatory approvals and other customary closing terms and conditions. The acquisition will be accounted for as a business combination under the guidance of ASC 805. The operating results of the Kakkalur Business will be included in our consolidated financial results from the date of the closing of the acquisition as part of the Par Pharmaceutical segment. We will fund the purchase from cash on hand. |
Available_for_Sale_Marketable_
Available for Sale Marketable Debt Securities | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Available-for-sale Securities [Abstract] | ' | |||||||||||||||
Available for Sale Marketable Debt Securities | ' | |||||||||||||||
Available for Sale Marketable Debt Securities: | ||||||||||||||||
At March 31, 2014 and December 31, 2013, all of our investments in marketable debt securities were classified as available for sale and, as a result, were reported at their estimated fair values on the condensed consolidated balance sheets. Refer to Note 8, “Fair Value Measurements.” The following is a summary of amortized cost and estimated fair value of our marketable debt securities available for sale at March 31, 2014 ($ amounts in thousands): | ||||||||||||||||
Estimated | ||||||||||||||||
Unrealized | Fair | |||||||||||||||
Cost | Gain | (Loss) | Value | |||||||||||||
Corporate bonds | $ | 2,508 | $ | 9 | $ | — | $ | 2,517 | ||||||||
All available for sale marketable debt securities are classified as current on our condensed consolidated balance sheet as of March 31, 2014. | ||||||||||||||||
The following is a summary of amortized cost and estimated fair value of our investments in marketable debt securities available for sale at December 31, 2013 ($ amounts in thousands): | ||||||||||||||||
Estimated | ||||||||||||||||
Unrealized | Fair | |||||||||||||||
Cost | Gain | (Loss) | Value | |||||||||||||
Corporate bonds | $ | 3,522 | $ | 19 | $ | — | $ | 3,541 | ||||||||
The following is a summary of the contractual maturities of our available for sale debt securities at March 31, 2014 ($ amounts in thousands): | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Estimated Fair | ||||||||||||||||
Cost | Value | |||||||||||||||
Less than one year | $ | 2,508 | $ | 2,517 | ||||||||||||
Total | $ | 2,508 | $ | 2,517 | ||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements: | ||||||||||||||||
ASC 820-10 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: | ||||||||||||||||
Level 1: Quoted market prices in active markets for identical assets and liabilities. Active market means a market in which transactions for assets or liabilities occur with “sufficient frequency” and volume to provide pricing information on an ongoing unadjusted basis. Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition. We have determined that our cash equivalents in their entirety are classified as Level 1 within the fair value hierarchy. | ||||||||||||||||
Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Our Level 2 assets primarily include debt securities, including corporate bonds with quoted prices that are traded less frequently than exchange-traded instruments. All of our Level 2 asset values are determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The pricing model information is provided by third party entities (e.g., banks or brokers). In some instances, these third party entities engage external pricing services to estimate the fair value of these securities. We have a general understanding of the methodologies employed by the pricing services in their pricing models. We corroborate the estimates of non-binding quotes from the third party entities’ pricing services to an independent source that provides quoted market prices from broker or dealer quotations. We investigate large differences, if any. Based on historical differences, we have not been required to adjust quotes provided by the third party entities’ pricing services used in estimating the fair value of these securities. | ||||||||||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | ||||||||||||||||
Financial assets and liabilities | ||||||||||||||||
The fair value of our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 were as follows ($ amounts in thousands): | ||||||||||||||||
Estimated Fair Value at | ||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Corporate bonds (Note 7) | $ | 2,517 | $ | — | $ | 2,517 | $ | — | ||||||||
Cash equivalents | $ | 123,784 | $ | 123,784 | $ | — | $ | — | ||||||||
Senior secured term loan (Note 15) | $ | 1,447,084 | $ | — | $ | 1,447,084 | $ | — | ||||||||
7.375% senior notes (Note 15) | $ | 529,200 | $ | — | $ | 529,200 | $ | — | ||||||||
Derivative instruments - Interest rate caps (Note 16) | $ | 2,090 | $ | — | $ | 2,090 | $ | — | ||||||||
The fair value of our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 were as follows ($ amounts in thousands): | ||||||||||||||||
Estimated Fair Value at | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Corporate bonds (Note 7) | $ | 3,541 | $ | — | $ | 3,541 | $ | — | ||||||||
Cash equivalents | $ | 66,782 | $ | 66,782 | $ | — | $ | — | ||||||||
Senior secured term loan (Note 15) | $ | 1,063,255 | $ | — | $ | 1,063,255 | $ | — | ||||||||
7.375% senior notes (Note 15) | $ | 507,150 | $ | — | $ | 507,150 | $ | — | ||||||||
Derivative instruments - Interest rate caps (Note 16) | $ | 1,189 | $ | — | $ | 1,189 | $ | — | ||||||||
The carrying amount reported in the condensed consolidated balance sheets for accounts receivables, net, inventories, prepaid expenses and other current assets, accounts payable, payables due to distribution agreement partners, accrued salaries and employee benefits, accrued government pricing liabilities, accrued legal fees, accrued legal settlements, payable to former Anchen securityholders, and accrued expenses and other current liabilities approximate fair value because of their short-term nature. | ||||||||||||||||
Non-financial assets and liabilities | ||||||||||||||||
The Company does not have any non-financial assets or liabilities as of March 31, 2014 or December 31, 2013 that are measured in the condensed consolidated financial statements at fair value. | ||||||||||||||||
Intangible Assets | ||||||||||||||||
We evaluate long-lived assets, including intangible assets with definite lives, for impairment periodically or whenever events or other changes in circumstances indicate that the carrying value of an asset may no longer be recoverable. If such circumstances are determined to exist, projected undiscounted future cash flows to be generated by the long-lived asset or the appropriate grouping of assets (level 3 inputs), is compared to the carrying value to determine whether impairment exists at its lowest level of identifiable cash flows. During the three months ended March 31, 2014, we recorded intangible asset impairments totaling $41,758 thousand for two generic products not expected to achieve their originally forecasted operating results. There was no intangible asset impairment during the three months ended March 31, 2013. | ||||||||||||||||
Derivative Instruments - Interest Rate Caps | ||||||||||||||||
We use interest rate cap agreements to manage our interest rate risk on our variable rate long-term debt. Refer to Note 16, "Derivatives Instruments and Hedging Activities," for further information. |
Accounts_Receivable
Accounts Receivable | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||||||||||
Accounts Receivable | ' | |||||||||||||||||||||||
Accounts Receivable: | ||||||||||||||||||||||||
We account for revenue in accordance with ASC 605, "Revenue Recognition." In accordance with that standard, we recognize revenue for product sales when title and risk of loss have transferred to our customers, when reliable estimates of rebates, chargebacks, returns and other adjustments can be made, and when collectability is reasonably assured. This is generally at the time that products are received by our direct customers. We also review available trade inventory levels at certain large wholesalers to evaluate any potential excess supply levels in relation to expected demand. We determine whether we will recognize revenue at the time that our products are received by our direct customers or defer revenue recognition until a later date on a product by product basis at the time of launch. Upon recognizing revenue from a sale, we record estimates for chargebacks, rebates and incentive programs, product returns, cash discounts and other sales reserves that reduce accounts receivable. | ||||||||||||||||||||||||
The following tables summarize the impact of accounts receivable reserves and allowance for doubtful accounts on the gross trade accounts receivable balances at each balance sheet date ($ amounts in thousands): | ||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Gross trade accounts receivable | $ | 365,435 | $ | 383,347 | ||||||||||||||||||||
Chargebacks | (58,110 | ) | (48,766 | ) | ||||||||||||||||||||
Rebates and incentive programs | (83,953 | ) | (75,321 | ) | ||||||||||||||||||||
Returns | (84,590 | ) | (78,181 | ) | ||||||||||||||||||||
Cash discounts and other | (44,486 | ) | (37,793 | ) | ||||||||||||||||||||
Allowance for doubtful accounts | (291 | ) | (7 | ) | ||||||||||||||||||||
Accounts receivable, net | $ | 94,005 | $ | 143,279 | ||||||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | |||||||||||||||||||||||
Par balance at beginning of period | $ | (7 | ) | $ | — | |||||||||||||||||||
Par Sterile beginning balance | (278 | ) | — | |||||||||||||||||||||
Additions – charge to expense | (99 | ) | — | |||||||||||||||||||||
Adjustments and/or deductions | 93 | — | ||||||||||||||||||||||
Balance at end of period | $ | (291 | ) | $ | — | |||||||||||||||||||
The following tables summarize the activity for the three months ended March 31, 2014 and for the three months ended March 31, 2013, in the accounts affected by the estimated provisions described below ($ amounts in thousands): | ||||||||||||||||||||||||
Three months ended March 31, 2014 | ||||||||||||||||||||||||
Accounts receivable reserves | Par beginning balance | Par Sterile beginning balance | Provision recorded for current period sales | (Provision) reversal recorded for prior period sales | Credits processed | Ending balance | ||||||||||||||||||
Chargebacks | $ | (48,766 | ) | $ | (5,886 | ) | $ | (189,919 | ) | $ | — | -1 | $ | 186,461 | $ | (58,110 | ) | |||||||
Rebates and incentive programs | (75,321 | ) | (5,489 | ) | (92,684 | ) | — | 89,541 | (83,953 | ) | ||||||||||||||
Returns | (78,181 | ) | (4,398 | ) | (7,112 | ) | — | 5,101 | (84,590 | ) | ||||||||||||||
Cash discounts and other | (37,793 | ) | (1,792 | ) | (55,741 | ) | (1,399 | ) | -3 | 52,239 | (44,486 | ) | ||||||||||||
Total | $ | (240,061 | ) | $ | (17,565 | ) | $ | (345,456 | ) | $ | (1,399 | ) | $ | 333,342 | $ | (271,139 | ) | |||||||
Accrued liabilities (2) | $ | (35,829 | ) | $ | (382 | ) | $ | (16,076 | ) | $ | 1,755 | -4 | $ | 20,020 | $ | (30,512 | ) | |||||||
Three months ended March 31, 2013 | ||||||||||||||||||||||||
Accounts receivable reserves | Beginning balance | Provision recorded for current period sales | (Provision) reversal recorded for prior period sales | Credits processed | Ending balance | |||||||||||||||||||
Chargebacks | $ | (41,670 | ) | $ | (141,317 | ) | $ | — | -1 | $ | 140,680 | $ | (42,307 | ) | ||||||||||
Rebates and incentive programs | (59,426 | ) | (59,780 | ) | — | 61,052 | (58,154 | ) | ||||||||||||||||
Returns | (68,062 | ) | (9,029 | ) | — | 6,007 | (71,084 | ) | ||||||||||||||||
Cash discounts and other | (26,544 | ) | (40,597 | ) | — | 40,695 | (26,446 | ) | ||||||||||||||||
Total | $ | (195,702 | ) | $ | (250,723 | ) | $ | — | $ | 248,434 | $ | (197,991 | ) | |||||||||||
Accrued liabilities (2) | $ | (42,162 | ) | $ | (12,528 | ) | $ | — | $ | 14,835 | $ | (39,855 | ) | |||||||||||
-1 | Unless specific in nature, the amount of provision or reversal of reserves related to prior periods for chargebacks is not determinable on a product or customer specific basis; however, based upon historical analysis and analysis of activity in subsequent periods, we believe that our chargeback estimates remain reasonable. | |||||||||||||||||||||||
-2 | Includes amounts due to indirect customers for which no underlying accounts receivable exists and is principally comprised of Medicaid rebates and rebates due under other U.S. Government pricing programs, such as TriCare and the Department of Veterans Affairs. | |||||||||||||||||||||||
-3 | During the first quarter of 2014, we recorded additional reserves totaling approximately $1.4 million related to prior year claims from customers for various price decreases for the years 2009 through 2012. | |||||||||||||||||||||||
-4 | Based upon additional available information related to Managed Medicaid utilization in California, we reduced our Medicaid accruals for the periods March 2010 through December 2013 by approximately $2.4 million. Our Medicaid accrual represents our best estimate at this time. | |||||||||||||||||||||||
The Company sells its products directly to wholesalers, retail drug store chains, drug distributors, mail order pharmacies and other direct purchasers as well as customers that purchase its products indirectly through the wholesalers, including independent pharmacies, non-warehousing retail drug store chains, hospitals, managed health care providers and other indirect purchasers. The Company often negotiates product pricing directly with health care providers that purchase products through the Company’s wholesale customers. In those instances, chargeback credits are issued to the wholesaler for the difference between the invoice price paid to the Company by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The information that the Company considers when establishing its chargeback reserves includes contract and non-contract sales trends, average historical contract pricing, actual price changes, processing time lags and customer inventory information from its three largest wholesale customers. The Company’s chargeback provision and related reserve vary with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventory. | ||||||||||||||||||||||||
Customer rebates and incentive programs are generally provided to customers as an incentive for the customers to continue carrying the Company’s products or replace competing products in their distribution channels with our products. Rebate programs are based on a customer’s dollar purchases made during an applicable monthly, quarterly or annual period. The Company also provides indirect rebates, which are rebates paid to indirect customers that have purchased the Company’s products from a wholesaler under a contract with us. The incentive programs include stocking or trade show promotions where additional discounts may be given on a new product or certain existing products as an added incentive to stock the Company’s products. We may, from time to time, also provide price and/or volume incentives on new products that have multiple competitors and/or on existing products that confront new competition in order to attempt to secure or maintain a certain market share. The information that the Company considers when establishing its rebate and incentive program reserves are rebate agreements with, and purchases by, each customer, tracking and analysis of promotional offers, projected annual sales for customers with annual incentive programs, actual rebates and incentive payments made, processing time lags, and for indirect rebates, the level of inventory in the distribution channel that will be subject to indirect rebates. We do not provide incentives designed to increase shipments to our customers that we believe would result in out-of-the-ordinary course of business inventory for them. The Company regularly reviews and monitors estimated or actual customer inventory information at its three largest wholesale customers for its key products to ascertain whether customer inventories are in excess of ordinary course of business levels. | ||||||||||||||||||||||||
Pursuant to a drug rebate agreement with the Centers for Medicare and Medicaid Services, TriCare and similar supplemental agreements with various states, the Company provides a rebate on drugs dispensed under such government programs. The Company determines its estimate of the Medicaid rebate accrual primarily based on historical experience of claims submitted by the various states and any new information regarding changes in the Medicaid program that might impact the Company’s provision for Medicaid rebates. In determining the appropriate accrual amount we consider historical payment rates; processing lag for outstanding claims and payments; levels of inventory in the distribution channel; and the impact of the healthcare reform acts. The Company reviews the accrual and assumptions on a quarterly basis against actual claims data to help ensure that the estimates made are reliable. TriCare rebate accruals reflect the Fiscal Year 2008 National Defense Authorization Act and are based on actual and estimated rebates on Department of Defense eligible sales. | ||||||||||||||||||||||||
The Company accepts returns of product according to the following criteria: (i) the product returns must be approved by authorized personnel with the lot number and expiration date accompanying any request and (ii) we generally will accept returns of products from any customer and will provide the customer with a credit memo for such returns if such products are returned between six months prior to, and 12 months following, such products’ expiration date. Par Sterile generally will accept returns of products from any customer and will provide the customer with a credit memo for such returns if such products are returned between six months prior to and six months following, such Par Sterile products’ expiration date. The Company records a provision for product returns based on historical experience, including actual rate of expired and damaged in-transit returns, average remaining shelf-lives of products sold, which generally range from 12 to 48 months, and estimated return dates. Additionally, we consider other factors when estimating the current period return provision, including levels of inventory in the distribution channel, significant market changes that may impact future expected returns, and actual product returns, and may record additional provisions for specific returns that we believe are not covered by the historical rates. | ||||||||||||||||||||||||
The Company offers cash discounts to its customers, generally 2% of the sales price, as an incentive for paying within invoice terms, which generally range from 30 to 90 days. The Company accounts for cash discounts by reducing accounts receivable by the full amount of the discounts that we expect our customers to take. | ||||||||||||||||||||||||
In addition to the significant gross-to-net sales adjustments described above, we periodically make other sales adjustments. The Company generally accounts for these other gross-to-net adjustments by establishing an accrual in the amount equal to its estimate of the adjustments attributable to the sale. | ||||||||||||||||||||||||
The Company may at its discretion provide price adjustments due to various competitive factors, through shelf-stock adjustments on customers’ existing inventory levels. There are circumstances under which we may not provide price adjustments to certain customers as a matter of business strategy, and consequently may lose future sales volume to competitors and risk a greater level of sales returns on products that remain in the customer’s existing inventory. | ||||||||||||||||||||||||
As detailed above, we have the experience and access to relevant information that we believe are necessary to reasonably estimate the amounts of such deductions from gross revenues, except as described below. Some of the assumptions we use for certain of our estimates are based on information received from third parties, such as wholesale customer inventories and market data, or other market factors beyond our control. The estimates that are most critical to the establishment of these reserves, and therefore, would have the largest impact if these estimates were not accurate, are estimates related to contract sales volumes, average contract pricing, customer inventories and return volumes. The Company regularly reviews the information related to these estimates and adjusts its reserves accordingly, if and when actual experience differs from previous estimates. With the exception of the product returns allowance, the ending balances of accounts receivable reserves and allowances generally are processed during a two-month to four-month period. | ||||||||||||||||||||||||
Use of Estimates in Reserves | ||||||||||||||||||||||||
We believe that our reserves, allowances and accruals for items that are deducted from gross revenues are reasonable and appropriate based on current facts and circumstances. It is possible however, that other parties applying reasonable judgment to the same facts and circumstances could develop different allowance and accrual amounts for items that are deducted from gross revenues. Additionally, changes in actual experience or changes in other qualitative factors could cause our allowances and accruals to fluctuate, particularly with newly launched or acquired products. We review the rates and amounts in our allowance and accrual estimates on a quarterly basis. If future estimated rates and amounts are significantly greater than those reflected in our recorded reserves, the resulting adjustments to those reserves would decrease our reported net revenues; conversely, if actual product returns, rebates and chargebacks are significantly less than those reflected in our recorded reserves, the resulting adjustments to those reserves would increase our reported net revenues. We regularly review the information related to these estimates and adjust our reserves accordingly, if and when actual experience differs from previous estimates. | ||||||||||||||||||||||||
As is customary and in the ordinary course of business, our revenue that has been recognized for product launches included initial trade inventory stocking that we believed was commensurate with new product introductions. At the time of each product launch, we were able to make reasonable estimates of product returns, rebates, chargebacks and other sales reserves by using historical experience of similar product launches and significant existing demand for the products. |
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories: | |||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials and supplies | $ | 58,045 | $ | 44,403 | |||||
Work-in-process | 22,061 | 9,834 | |||||||
Finished goods | 90,618 | 63,070 | |||||||
$ | 170,724 | $ | 117,307 | ||||||
Inventory write-offs (inclusive of pre-launch inventories detailed below) | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Inventory write-offs | $ | 2,235 | $ | 4,107 | |||||
Par capitalizes inventory costs associated with certain products prior to regulatory approval and product launch, based on management's judgment of reasonably certain future commercial use and net realizable value, when it is reasonably certain that the pre-launch inventories will be saleable. The determination to capitalize is made once the Company (or its third party development partners) has filed an ANDA that has been acknowledged by the FDA as containing sufficient information to allow the FDA to conduct its review in an efficient and timely manner and management is reasonably certain that all regulatory and legal hurdles will be cleared. This determination is based on the particular facts and circumstances relating to the expected FDA approval of the generic drug product being considered, and accordingly, the time frame within which the determination is made varies from product to product. The Company could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, or a delay in commercialization, or other potential factors. As of March 31, 2014, Par had approximately $13 million in inventories related to generic products that were not yet available to be sold. | |||||||||
Strativa also capitalizes inventory costs associated with in-licensed branded products subsequent to FDA approval, but prior to product launch based on management’s judgment of probable future commercial use and net realizable value. We believe that numerous factors must be considered in determining probable future commercial use and net realizable value including, but not limited to, Strativa’s limited number of historical product launches, as well as the ability of third party partners to successfully manufacture commercial quantities of product. Strativa could be required to expense previously capitalized costs related to pre-launch inventory upon a change in such judgment, due to a delay in commercialization, product expiration dates, projected sales volume, estimated selling price or other potential factors. As of March 31, 2014, Strativa had approximately $2 million in inventories related to generic products that were not yet available to be sold. | |||||||||
The amounts in the table below represent inventories related to products that were not yet available to be sold and are also included in the total inventory balances presented above. | |||||||||
Pre-Launch Inventories | |||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials and supplies | $ | 10,104 | $ | 6,308 | |||||
Work-in-process | 3,149 | 93 | |||||||
Finished goods | 1,731 | 118 | |||||||
$ | 14,984 | $ | 6,519 | ||||||
Write-offs of pre-launch inventories | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Pre-launch inventory write-offs, net of partner allocation | $ | 493 | $ | 689 | |||||
Property_Plant_and_Equipment_n
Property, Plant and Equipment, net | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment, net | ' | ||||||||
Property, Plant and Equipment, net: | |||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 9,550 | $ | 4,553 | |||||
Buildings | 63,845 | 29,491 | |||||||
Machinery and equipment | 81,422 | 58,556 | |||||||
Office equipment, furniture and fixtures | 7,847 | 5,433 | |||||||
Computer software and hardware | 24,610 | 21,582 | |||||||
Leasehold improvements | 26,028 | 25,828 | |||||||
Construction in progress | 30,055 | 12,286 | |||||||
243,357 | 157,729 | ||||||||
Accumulated depreciation and amortization | (36,927 | ) | (30,453 | ) | |||||
$ | 206,430 | $ | 127,276 | ||||||
Depreciation and amortization expense related to property, plant and equipment | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Depreciation and amortization expense | $ | 6,543 | $ | 5,888 | |||||
Intangible_Assets_net
Intangible Assets, net | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||||||||||||||||||
Intangible Assets, net | ' | |||||||||||||||||||||||
Intangible Assets, net: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
Cost | Amortization | Net | Cost | Amortization | Net | |||||||||||||||||||
Developed products | $ | 511,752 | $ | (181,516 | ) | $ | 330,236 | $ | 530,759 | $ | (155,744 | ) | $ | 375,015 | ||||||||||
Other product related royalty streams | 115,600 | (25,853 | ) | 89,747 | 115,600 | (22,709 | ) | 92,891 | ||||||||||||||||
IPR&D | 293,400 | — | 293,400 | 293,400 | — | 293,400 | ||||||||||||||||||
Subsequently Developed IPR&D | 262,553 | (35,536 | ) | 227,017 | 262,553 | (25,331 | ) | 237,222 | ||||||||||||||||
Par trade name | 26,400 | — | 26,400 | 26,400 | — | 26,400 | ||||||||||||||||||
Watson/Actavis Divestiture Products | 62,544 | (26,021 | ) | 36,523 | 85,295 | (23,143 | ) | 62,152 | ||||||||||||||||
Watson/Actavis related IPR&D | 4,700 | — | 4,700 | 4,700 | — | 4,700 | ||||||||||||||||||
Developed products - JHP | 198,600 | (1,958 | ) | 196,642 | — | — | — | |||||||||||||||||
IPR&D - JHP | 90,999 | — | 90,999 | — | — | — | ||||||||||||||||||
JHP trade name | 700 | (13 | ) | 687 | — | — | — | |||||||||||||||||
Other | 1,000 | (264 | ) | 736 | 1,000 | (132 | ) | 868 | ||||||||||||||||
$ | 1,568,248 | $ | (271,161 | ) | $ | 1,297,087 | $ | 1,319,707 | $ | (227,059 | ) | $ | 1,092,648 | |||||||||||
We recorded amortization expense related to intangible assets of $44,102 thousand for the three months ended March 31, 2014 and $40,071 thousand for the three months ended March 31, 2013. Amortization expense was included in cost of goods sold. | ||||||||||||||||||||||||
Intangible Assets Acquired in the Merger | ||||||||||||||||||||||||
We were acquired on September 28, 2012 through the Merger. Refer to Note 2, “Sky Growth Merger,” for details of the Merger and related transactions. As part of the Merger, we revalued intangible assets related to commercial products (developed technology), royalty streams, IPR&D, and our trade name. | ||||||||||||||||||||||||
The remaining net book value of the related intangible asset related to developed products will be amortized over a weighted average amortization period of approximately six years. | ||||||||||||||||||||||||
IPR&D is related to R&D projects that were incomplete at the Merger. When the first product of each annual IPR&D group launches, it is our policy to commence amortization of the entire annual group utilizing the related cash flows expected to be generated for the annual group. Due to the nature of our generic product portfolio pipeline, individual products in the annual IPR&D groups are expected to launch within an annual time period or reasonably close thereto. | ||||||||||||||||||||||||
Subsequently developed annual IPR&D groups represent IPR&D annual groups that have had the first product in the group launched. The remaining net book value of the related intangible asset associated with subsequently developed annual IPR&D groups will be amortized over a weighted average amortization period of approximately seven years. | ||||||||||||||||||||||||
Trade names constitute intellectual property rights and are marketing-related intangible assets. Our corporate trade name was valued using a relief from royalty method of the income approach and accounted for as an indefinite-lived intangible asset that will be subject to annual impairment testing or whenever events or changes in business circumstances necessitate an evaluation for impairment using a fair value approach. | ||||||||||||||||||||||||
Intangible Assets acquired with the Divested Products from the Watson/Actavis Merger | ||||||||||||||||||||||||
On November 6, 2012, in connection with the Watson/Actavis Merger, we acquired the U.S. marketing rights to five generic products that were marketed by Watson or Actavis, eight ANDAs that were awaiting regulatory approval and a generic product in late-stage development. Refer to Note 4, “Acquisition of Divested Products from the Watson/Actavis Merger,” for details of the transaction. | ||||||||||||||||||||||||
The remaining net book value of the related intangible asset related to developed products will be amortized over a weighted average amortization period of approximately six years. | ||||||||||||||||||||||||
IPR&D consists of technology-related intangible assets used in R&D activities, which were incomplete at the time of the acquisition. Upon the successful completion and launch of a product in the group, we will make a separate determination of useful life of the related IPR&D intangible asset and commence amortization. | ||||||||||||||||||||||||
Intangible Assets acquired with the JHP Acquisition | ||||||||||||||||||||||||
On February 20, 2014, we acquired intangible assets as part of the JHP Acquisition. Refer to Note 3, "JHP Acquisition," for further details. The intangible assets related to commercial products (developed technology), IPR&D, and the JHP trade name. | ||||||||||||||||||||||||
The fair value of the developed technology and in-process research and development intangible assets were estimated using the discounted cash flow method of the income approach. We believe that the level and timing of cash flows appropriately reflect market participant assumptions. Some of the significant assumptions inherent in the development of the identifiable intangible asset valuations, from the perspective of a market participant, include the estimated net cash flows by year by project or product (including net revenues, costs of sales, research and development costs, selling and marketing costs and other charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset's life cycle, competitive trends impacting the asset and each cash flow stream, and other factors. | ||||||||||||||||||||||||
Developed products are defined as products that are commercialized, all research and development efforts have been completed by the seller, and final regulatory approvals have been received. The developed product intangible assets are composite assets, comprising the market position of the product, the developed technology utilized, and the customer base to which the products are sold. Developed technology and the customer base were considered but have not been identified separately as any related cash flows would be very much intertwined with the product related intangibles. Developed products held by the Company are considered separable from the business as they could be sold to a third party. Developed products were valued using a multi-period excess earnings method under the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset only. The remaining net book value of the related intangible asset related to developed products will be amortized over a weighted average amortization period of approximately ten years. | ||||||||||||||||||||||||
IPR&D is related to R&D projects that were incomplete at the time of the JHP Acquisition. We grouped and valued IPR&D based on the projected year of launch for each group, with the exception of one project that is expected to produce large cash flows in the future and we valued this project by itself. IPR&D is considered separable from the business as it could be sold to a third party. The value of IPR&D was accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until the completion or abandonment of each group. Upon the successful completion and launch of a product in a group, we will make a separate determination of useful life of the IPR&D intangible asset and commence amortization. This methodology resulted in six groups of IPR&D (2014 through 2018 plus a group with a single IPR&D project). When the first product of each IPR&D group launches, it is our policy to commence amortization of the entire group utilizing the related cash flows expected to be generated for the group. Due to the nature of our generic injectable product portfolio pipeline, individual products in the IPR&D groups are expected to launch within an annual time period or reasonably close thereto. | ||||||||||||||||||||||||
Trade names constitute intellectual property rights and are marketing-related intangible assets. The JHP trade name was valued using a relief from royalty method of the income approach and accounted for with a five year useful life based on expected utility. This asset will be subject to impairment testing whenever events or changes in business circumstances necessitate an evaluation for impairment using a fair value approach. | ||||||||||||||||||||||||
Intangible Asset Impairments | ||||||||||||||||||||||||
During the three months ended March 31, 2014, we recorded intangible asset impairments totaling $41,758 thousand related to an adjustment to the forecasted operating results of two Par Pharmaceutical segment products compared to their originally forecasted operating results at date of acquisition. The estimated fair values of the assets were determined by completing updated discounted cash flow models. There was no intangible asset impairment during the three months ended March 31, 2013. | ||||||||||||||||||||||||
Estimated Amortization Expense for Existing Intangible Assets at March 31, 2014 | ||||||||||||||||||||||||
The following table assumes the intangible asset related to the Par trade name as an indefinite-lived asset that will not be amortized in the future. | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||
Expense | ||||||||||||||||||||||||
Remainder of 2014 | $ | 147,428 | ||||||||||||||||||||||
2015 | 174,089 | |||||||||||||||||||||||
2016 | 178,711 | |||||||||||||||||||||||
2017 | 206,612 | |||||||||||||||||||||||
2018 | 171,042 | |||||||||||||||||||||||
2019 and thereafter | 392,805 | |||||||||||||||||||||||
$ | 1,270,687 | |||||||||||||||||||||||
Goodwill
Goodwill | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill Disclosure [Abstract] | ' | |||||||
Goodwill | ' | |||||||
Goodwill: | ||||||||
($ amounts in thousands) | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Balance at beginning of period | $ | 849,652 | $ | 850,652 | ||||
Additions: | ||||||||
JHP Acquisition (1) | 152,687 | — | ||||||
Deductions: | ||||||||
Finalization of purchase accounting (2) | — | (1,000 | ) | |||||
Balance at end of period | $ | 1,002,339 | $ | 849,652 | ||||
(1) As noted in Note 3, “JHP Acquisition,” we acquired JHP as of February 20, 2014. Based upon our purchase price allocation, we recorded $152,687 thousand of incremental goodwill. This goodwill was allocated to Par. | ||||||||
(2) As noted in Note 2, “Sky Growth Merger,” we were acquired through the Merger. Based upon purchase price allocation in accordance with ASC 350-20-35-30, we recorded goodwill, which was allocated to Par. | ||||||||
Goodwill is not being amortized, but is tested at least annually, on or about October 1st or whenever events or changes in business circumstances necessitate an evaluation for impairment using a fair value approach. The goodwill impairment test consists of a two-step process. The first step is to identify a potential impairment and the second step measures the amount of impairment, if any. Goodwill is deemed to be impaired if the carrying amount of a reporting unit exceeds its estimated fair value. As of October 1, 2013, Par performed its annual goodwill impairment assessment and concluded there was no impairment. No impairments of goodwill had been recognized through March 31, 2014. |
Income_Taxes
Income Taxes | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
Income Taxes: | |||||||||
($ in thousands) | |||||||||
Three months ended | |||||||||
March 31, 2014 | 31-Mar-13 | ||||||||
Benefit for income taxes | $ | (24,232 | ) | $ | (7,979 | ) | |||
Effective tax rate | 38 | % | 35 | % | |||||
The effective tax rate for the three months ended March 31, 2014 and March 31, 2013 reflect our nondeductible portion of the annual pharmaceutical manufacturers’ fee under the Patient Protection and Affordable Care Act, offset by benefits for deductions specific to U.S. domestic manufacturing companies. | |||||||||
Current deferred income tax assets at March 31, 2014 consist of temporary differences primarily related to accounts receivable reserves, inventory reserves, accrued legal settlements and net operating loss carryforwards. Non-current deferred income tax liabilities at March 31, 2014 consist of timing differences primarily related to intangible assets, debt and depreciation. | |||||||||
The Company and Anchen are currently being audited by the IRS for the tax years 2009, 2010 and 2011. Par Pharmaceutical Companies, Inc. is no longer subject to IRS audit for periods prior to 2009. Anchen is also currently under audit in one state jurisdiction for the years 2005 to 2010. We are also currently under audit in one additional state jurisdiction for the years 2003 through 2009. In most other state jurisdictions, we are no longer subject to examination by state tax authorities for years prior to 2008. | |||||||||
We reflect interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit. | |||||||||
The difference between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to ASC 740-10 represents an unrecognized tax benefit. An unrecognized tax benefit is a liability that represents a potential future obligation to the taxing authorities. As of March 31, 2014, we had $20,960 thousand included in “Long-term liabilities” and $949 thousand in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheet that represented unrecognized tax benefits, interest and penalties based on evaluation of tax positions. During the three months ended March 31, 2014, we recorded an increase in unrecognized tax benefits of $1,299 thousand as a result of tax positions taken during the quarter. We expect that a portion of this total liability could potentially settle in the next 12 months. However, the dollar range for a potential settlement cannot be estimated at this time. |
Debt
Debt | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Debt: | ||||||||
($ amounts in thousands) | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Senior credit facilities: | ||||||||
Senior secured term loan | $ | 1,441,678 | $ | 1,055,340 | ||||
Senior secured revolving credit facility | — | — | ||||||
7.375% senior notes | 490,000 | 490,000 | ||||||
1,931,678 | 1,545,340 | |||||||
Less unamortized debt discount to senior secured term loan | (8,444 | ) | (7,821 | ) | ||||
Less current portion | (9,467 | ) | (21,462 | ) | ||||
Long-term debt | $ | 1,913,767 | $ | 1,516,057 | ||||
Senior Credit Facilities | ||||||||
In connection with the Merger, on September 28, 2012, we entered into a credit agreement (the "Credit Agreement") with a syndicate of banks, led by Bank of America, N.A., as Administrative Agent, Bank of America, N.A., Deutsche Bank Securities, Inc., Goldman Sachs Bank USA, Citigroup Global Markets, Inc., RBC Capital Markets LLC and BMO Capital Markets as Joint Lead Arrangers and Joint Lead Bookrunners, Deutsche Bank Securities, Inc. and Goldman Sachs Bank USA as Co-Syndication Agents, and Citigroup Global Markets Inc. and RBC Capital Markets LLC as Co-Documentation Agents, to provide Senior Credit Facilities comprised of a seven-year senior secured term loan in an initial aggregate principal amount of $1,055 million (the “Term Loan Facility”) and a five-year senior secured revolving credit facility in an initial amount of $150 million (the “Revolving Facility”). The proceeds of the Revolving Facility are available for general corporate purposes. | ||||||||
The Credit Agreement contains customary representations and warranties, as well as customary events of default, in certain cases subject to reasonable and customary periods to cure, including but not limited to: failure to make payments when due, breach of covenants, breach of representations and warranties, insolvency proceedings, certain judgments and any change of control. The Credit Agreement also contains various customary covenants that, in certain instances, restrict our ability to: (i) create liens on assets; (ii) incur additional indebtedness; (iii) engage in mergers or consolidations with or into other companies; (iv) engage in dispositions of assets, including entering into a sale and leaseback transaction; (v) pay dividends and distributions or repurchase capital stock; (vi) make investments, loans, guarantees or advances in or to other companies; (vii) change the nature of our business; (viii) repay or redeem certain junior indebtedness; (ix) engage in transactions with affiliates; and (x) enter into restrictive agreements. In addition, the Credit Agreement requires us to demonstrate compliance with a maximum senior secured first lien leverage ratio whenever amounts are outstanding under the revolving credit facility as of the last day of any quarterly testing period. All obligations under the Credit Agreement are guaranteed by our material domestic subsidiaries. We were in compliance with all covenants as of March 31, 2014. | ||||||||
We are also obligated to pay a commitment fee based on the unused portion of the Revolving Facility. The Credit Agreement includes an accordion feature pursuant to which we may increase the amount available to be borrowed by up to an additional $250,000 thousand (or a greater amount if we meet certain specified financial ratios) under certain circumstances. Repayments of the proceeds of the term loan are due in quarterly installments over the term of the Credit Agreement. Amounts borrowed under the Revolving Facility are payable in full upon expiration of the Credit Agreement. | ||||||||
We are obligated to make mandatory principal prepayments for any fiscal year if the ratio of total amount of outstanding senior secured debt less cash and cash equivalents divided by our consolidated EBITDA is greater than 2.50 to 1.00 as of December 31 of any fiscal year. When the ratio is greater than 2.50 to 1.00 but less than or equal to 3.00 to 1.00, we are required to pay 25% of excess cash flows, as defined in the Credit Agreement. When the ratio is greater than 3.00 to 1.00, we are required to pay 50% of excess cash flows in the form of principal prepayments. For the year ended December 31, 2013, we were obligated to pay $10,802 thousand of principal prepayments during the first quarter of 2014. However, certain Term Lenders exercised their right under the Credit Agreement to decline their pro rata share of the mandatory principal prepayment. Therefore our actual mandatory principal prepayment in the first quarter of 2014 was $5,036 thousand. As permitted under the Credit Agreement, we will apply this mandatory principal prepayment amount against scheduled principal payments for the second and third quarters of 2014. | ||||||||
Repricing of the Term Loan Facility and Additional Borrowings - 2014 | ||||||||
On February 20, 2014 in conjunction with our acquisition of JHP, we entered into an amendment to our Senior Credit Facility that refinanced all of the outstanding tranche B-1 term loans of the Borrower (the “Existing Tranche B Term Loans”) with a new tranche of tranche B-2 term loans (the “New Tranche B Term Loans”) in an aggregate principal amount of $1,055 million. The terms of the New Tranche B Term Loans are substantially the same as the terms of the then Existing Tranche B Term Loans, except that (1) the interest rate margins applicable to the New Tranche B Term Loans are 3.00% for LIBOR and 2.00% for base rate, a 25 basis point reduction compared to the Existing Tranche B Term Loans and (2) the New Tranche B Loans are subject to a soft call provision applicable to the optional prepayment of the loans which requires a premium equal to 1.00% of the aggregate principal amount of the loans being prepaid if, on or prior to August 20, 2014, the Company enters into certain repricing transactions. Additionally, the maximum senior secured net leverage ratio in compliance with which the Company can incur new incremental debt was increased by 25 basis points to 3.75:1.00. | ||||||||
Additionally, on February 20, 2014 in conjunction with our acquisition of JHP, we also entered into the Incremental Term B-2 Joinder Agreement (the “Joinder”) among us, Holdings, and certain of our subsidiaries, and our lenders. Under the terms of the Joinder, we borrowed an additional $395 million of New Tranche B Term Loans from the lenders participating therein for the purpose of consummating our acquisition of JHP. | ||||||||
In connection with the transactions described herein, we incurred related transaction costs for the quarter ended March 31, 2014 that totaled $12,350 thousand of which $8,213 thousand were included in operating expenses as selling, general and administrative on the condensed consolidated statements of operations and $4,137 thousand were capitalized as deferred financing costs or debt discount on the condensed consolidated balance sheet. In accordance with the applicable accounting guidance for debt modifications and extinguishments, approximately $3,989 thousand of the existing unamortized deferred financing costs were written off in connection with this repricing and included in the condensed consolidated statements of operations as a loss on debt extinguishment. | ||||||||
Refinancing of the Term Loan Facility - 2013 | ||||||||
On February 6, 2013, the Company, Par Pharmaceutical, Inc., as co-borrower, Sky Growth Intermediate Holdings II Corporation (“Intermediate Holdings”), the subsidiary guarantor party thereto, Bank of America, as administrative agent, and the lenders and other parties thereto modified the Term Loan Facility (as amended, the “New Term Loan Facility”) by entering into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement. | ||||||||
Amendment No. 1 replaced the existing term loans with a new class of term loans in an aggregate principal amount of $1,066 million (the “New Term Loans”). Borrowings under the New Term Loan Facility bore interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR (which is subject to a 1.00% floor) or the base rate rate (which is subject to a 2.00% floor). The applicable margin for borrowings under the New Term Loans was 3.25% for LIBOR borrowings and 2.25% for base rate borrowings. Amendment No. 1 provided for a soft call option applicable to the New Term Loans. The soft call option provided for a premium equal to 1.00% of the amount of the outstanding principal if, on or prior to August 6, 2013, the Company entered into certain repricing transactions. The other terms applicable to the New Term Loans were substantially the same terms as the original term loans. | ||||||||
In connection with the transactions described herein, the Company paid a 1.00% soft call premium in an aggregate amount of approximately $10,500 thousand on the existing term loan in February 2013, a portion of which was capitalized as a discount to the New Term Loan Facility. In accordance with the applicable accounting guidance for debt modifications and extinguishments, approximately $5,923 thousand of the existing unamortized deferred financing costs and $1,412 thousand of the related $10,500 thousand soft call premium were written off in connection with this refinancing and included in the condensed consolidated statements of operations as a loss on debt extinguishment. | ||||||||
Repricing of the Revolving Facility - 2013 | ||||||||
The Company and Par Pharmaceutical, Inc., as co-borrower, Intermediate Holdings, the subsidiary guarantor party thereto, Bank of America, as administrative agent, and the lenders and other parties thereto modified the Revolving Credit Facility by entering into Amendment No. 2 (“Amendment No. 2”), dated February 22, 2013, and Amendment No. 3 (“Amendment No. 3” and, together with Amendment No. 2, the “Revolver Amendments”), dated February 28, 2013, to the Credit Agreement. | ||||||||
The Revolver Amendments extend the scheduled maturity of the revolving credit commitments of certain existing lenders (the “Extending Lenders”) who have elected to do so, such extension to be effected by converting such amount of the existing revolving credit commitments of the Extending Lenders into a new tranche of revolving credit commitments (the “Extended Revolving Facility”). The Revolver Amendments also set forth the interest rate payable on borrowings outstanding under the Extended Revolving Facility, as described below. The aggregate commitments under the Extended Revolving Facility are $127.5 million and the aggregate commitments under the non-extended portion of the Revolving Facility are $22.5 million. There were no outstanding borrowings from the Revolving Facility or the Extended Revolving Facility as of March 31, 2014. | ||||||||
Borrowings under the Extended Revolving Facility bear interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR or the base rate. The initial applicable margin for borrowings under the Extended Revolving Facility is 3.25% for LIBOR borrowings and 2.25% for base rate borrowings. The Extended Revolving Facility will mature on December 28, 2017. Borrowings and repayments of loans under the Extended Revolving Facility and the non-extended portion of the Revolving Facility may be made on a non-pro rata basis with one another, and the commitments under the non-extended portion of the Revolving Facility may be terminated prior to the commitments under the Extended Revolving Credit Facility. The other terms applicable to the Extended Revolving Credit Facility are substantially identical to those of the Revolving Credit Facility. | ||||||||
7.375% Senior Notes | ||||||||
In connection with the Merger, on September 28, 2012, we issued $490,000 thousand aggregate principal amount of 7.375% senior notes due 2020 (the “Notes”). The Notes were issued pursuant to an indenture entered into as of the same date between the Company and Wells Fargo Bank, National Association, as trustee. Interest on the Notes is payable semi-annually on April 15 and October 15, commencing on April 15, 2013. The Notes mature on October 15, 2020. | ||||||||
We may redeem the Notes at our option, in whole or in part on one or more occasions, at any time on or after October 15, 2015, at specified redemption prices that vary by year, together with accrued and unpaid interest, if any, to the date of redemption. At any time prior to October 15, 2015, we may redeem up to 40% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings at a redemption price equal to the sum of (i) 107.375% of the aggregate principal amount thereof, plus (ii) accrued and unpaid interest, if any, to the redemption date. At any time prior to October 15, 2015, we may also redeem the Notes, in whole or in part on one or more occasions, at a price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest and a specified “make-whole premium.” | ||||||||
The Notes are guaranteed on a senior unsecured basis by our material existing direct and indirect wholly-owned domestic subsidiaries and, subject to certain exceptions, each of our future direct and indirect domestic subsidiaries that guarantees the Senior Credit Facilities or our other indebtedness or indebtedness of the guarantors will guarantee the Notes. Under certain circumstances, the subsidiary guarantors may be released from their guarantees without consent of the holders of Notes. | ||||||||
The Notes and the subsidiary guarantees will be our and the guarantors’ senior unsecured obligations and will (i) rank senior in right of payment to all of our and the subsidiary guarantors’ existing and future subordinated indebtedness; (ii) rank equally in right of payment with all of our and the subsidiary guarantors’ existing and future senior indebtedness; (iii) be effectively subordinated to any of our and the subsidiary guarantors’ existing and future secured debt, to the extent of the value of the assets securing such debt; and, (iv) be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the Notes. | ||||||||
The indenture governing the Notes contains customary representations and warranties, as well as customary events of default, in certain cases subject to reasonable and customary periods to cure, including but not limited to: failure to make payments when due, breach of covenants, a payment default or acceleration equaling $40,000 thousand or more according to the terms of certain other indebtedness, failure to pay final judgments aggregating in excess of $40,000 thousand when due, insolvency proceedings, a required guarantee shall cease to remain in full force. The indenture also contains various customary covenants that, in certain instances, restrict our ability to: (i) pay dividends and distributions or repurchase capital stock; (ii) incur additional indebtedness; (iii) make investments, loans, guarantees or advances in or to other companies; (iv) engage in dispositions of assets, including entering into a sale and leaseback transaction; (v) engage in transactions with affiliates; (vi) create liens on assets; (vii) redeem or repay certain subordinated indebtedness; (viii) engage in mergers or consolidations with or into other companies; and, (ix) change the nature of our business. The covenants are subject to a number of exceptions and qualifications. Certain of these covenants will be suspended during any period of time that (1) the Notes have Investment Grade Ratings (as defined in the indenture) from both Moody’s Investors Service, Inc. and Standard & Poor’s, and (2) no default has occurred and is continuing under the indenture. In the event that the Notes are downgraded to below an Investment Grade Rating, the Company and certain subsidiaries will again be subject to the suspended covenants with respect to future events. We were in compliance with all covenants as of March 31, 2014. | ||||||||
Par Pharmaceutical Companies, Inc., the parent company, is the sole issuer of the Notes. The Notes are guaranteed on a senior unsecured basis by Par Pharmaceutical Companies, Inc.'s material direct and indirect wholly-owned domestic subsidiaries. The guarantees are full and unconditional and joint and several. Par Pharmaceutical Companies, Inc. has no independent assets or operations. Each of the subsidiary guarantors is 100% owned by Par Pharmaceutical Companies, Inc. and all non-guarantor subsidiaries of Par Pharmaceutical Companies, Inc. are minor subsidiaries. | ||||||||
Debt Maturities as of March 31, 2014 | ||||||||
Debt Maturities as of March 31, 2014 | ($ amounts in thousands) | |||||||
Remainder of 2014 | $ | 5,841 | ||||||
2015 | 14,503 | |||||||
2016 | 14,503 | |||||||
2017 | 14,503 | |||||||
2018 | 14,503 | |||||||
2019 | 1,377,825 | |||||||
2020 | 490,000 | |||||||
Total debt at March 31, 2014 | $ | 1,931,678 | ||||||
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities: | ||||||||||||||||||||||||
Risk Management Objective of Using Derivatives | ||||||||||||||||||||||||
We are exposed to certain risks arising from global economic conditions. We manage economic risks, including interest rate risk primarily through the use of derivative financial instruments to mitigate the potential impact of interest rate risk. All derivatives are carried at fair value on our condensed consolidated balance sheets. We do not enter into speculative derivatives. Specifically, we enter into derivative financial instruments to manage exposures that arise from payment of future known and uncertain cash amounts related to our borrowings, the value of which are determined by LIBOR interest rates. We may net settle any of our derivative positions under agreements with our counterparty, when applicable. | ||||||||||||||||||||||||
Cash Flow Hedges of Interest Rate Risk via Interest Rate Caps | ||||||||||||||||||||||||
Our objective in using interest rate derivatives is to add certainty to interest expense amounts and to manage our exposure to interest rate movements, specifically to protect us from variability in cash flows attributable to changes in LIBOR interest rates. To accomplish this objective, we primarily use interest rate caps as part of our interest rate risk management strategy. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if LIBOR exceeds the strike rate in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the year ended December 31, 2013, we entered into such derivatives to hedge the variable cash flows associated with existing variable-rate debt under our Credit Agreement. These instruments are designated for accounting purposes as cash flow hedges of benchmark interest rate risk related to our Credit Agreement. We assess effectiveness and the effective portion of changes in the fair value of derivatives designated and qualified as cash flow hedges for financial reporting purposes and changes in fair value are recorded in “Accumulated other comprehensive loss” on our condensed consolidated balance sheet and will be subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of the change in fair value of the derivatives would be recognized directly in earnings. | ||||||||||||||||||||||||
Interest Rate Caps | ||||||||||||||||||||||||
As of March 31, 2014, we had five outstanding interest rate caps with various termination dates and notional amounts, which we deemed to be effective for accounting purposes. The derivatives had a combined notional value of $600,000 thousand, all with an effective date as of September 30, 2013 and with termination dates each September 30th beginning in 2014 and ending in 2018. Consistent with the terms of the Credit Agreement, the interest rate caps have a strike of 1% which matches the LIBOR floor of 1.0% on the debt. The premium is deferred and paid over the life of the instrument. The effective annual interest rate related to these interest rate caps was a fixed weighted average rate of approximately 4.9% at March 31, 2014. These instruments are designated for accounting purposes as cash flow hedges of interest rate risk related to our Credit Agreement. Amounts reported in “Accumulated other comprehensive loss” on our condensed consolidated balance sheet related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt under the Credit Agreement. Approximately 44% of our total outstanding debt at March 31, 2014 remains subject to variability in cash flows attributable to changes in LIBOR interest rates. During the next twelve months, we estimate that $4,005 thousand will be reclassified from “Accumulated other comprehensive loss” on our condensed consolidated balance sheet at March 31, 2014 to interest expense. | ||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||
As of the effective date, we designated the interest rate swap agreements as cash flow hedges. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in LIBOR interest rates. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses will be recorded as a component of interest expense. As of March 31, 2014, we recorded $2,090 thousand (or $1,338 thousand, net of tax) as part of “Accumulated other comprehensive loss” on our condensed consolidated balance sheet. Future realized gains and losses in connection with each required interest payment will be reclassified from Accumulated other comprehensive loss to interest expense. | ||||||||||||||||||||||||
We elected to use the income approach to value the derivatives, using observable Level 2 market expectations at each measurement date and standard valuation techniques to convert future amounts to a single present amount (discounted) assuming that participants are motivated, but not compelled to transact. Level 2 inputs for the cap valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates, volatility and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for fair value measurements. Key inputs for valuation models include the cash rates, futures rates, swap rates, credit rates and interest rate volatilities. Reset rates, discount rates and volatilities are interpolated from these market inputs to calculate cash flows as well as to discount those future cash flows to present value at each measurement date. Refer to Note 8 for additional information regarding fair value measurements. | ||||||||||||||||||||||||
The fair value of our derivative instruments measured as outlined above as of March 31, 2014 was as follows: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
March 31, | Quoted Prices | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||||||||
Description | 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||
Derivatives | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||
Derivatives | $ | (2,090 | ) | $ | — | $ | (2,090 | ) | $ | — | ||||||||||||||
$ | (2,090 | ) | $ | — | $ | (2,090 | ) | $ | — | |||||||||||||||
The following table summarizes the fair value and presentation in our condensed consolidated balance sheets for derivative instruments as of March 31, 2014 and December 31, 2013: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | March 31, 2014 | December 31, 2013 | |||||||||||||||||||||
Balance Sheet Location | Fair Value | Fair Value | Balance Sheet Location | Fair Value | Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments under ASC 815 | ||||||||||||||||||||||||
Interest rate cap contracts | $ | — | $ | — | Accrued expenses and other current liabilities | $ | (4,005 | ) | (4,002 | ) | ||||||||||||||
Interest rate cap contracts | — | — | Other Assets | 1,915 | 2,813 | |||||||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | — | $ | (2,090 | ) | $ | (1,189 | ) | ||||||||||||||
Total derivatives | $ | — | $ | — | $ | (2,090 | ) | $ | (1,189 | ) | ||||||||||||||
The following tables summarize our five interest cap agreements with a single counterparty and that each agreement represented a net liability for us and none of our interest cap agreements represented a net asset as of March 31, 2014: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Offsetting of Derivative Liabilities | ||||||||||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||
Description | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Liabilities Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Pledged | Net Amount | ||||||||||||||||||
Derivatives by counterparty | ||||||||||||||||||||||||
Counterparty 1 | $ | (2,090 | ) | $ | (1,915 | ) | $ | (4,005 | ) | $ | 1,915 | $ | — | $ | (2,090 | ) | ||||||||
Total | $ | (2,090 | ) | $ | (1,915 | ) | $ | (4,005 | ) | $ | 1,915 | $ | — | $ | (2,090 | ) | ||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Offsetting of Derivative Assets | ||||||||||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||
Description | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Pledged | Net Amount | ||||||||||||||||||
Derivatives by counterparty | ||||||||||||||||||||||||
Counterparty 1 | $ | — | $ | 1,915 | $ | 1,915 | $ | (1,915 | ) | $ | — | $ | — | |||||||||||
Total | $ | — | $ | 1,915 | $ | 1,915 | $ | (1,915 | ) | $ | — | $ | — | |||||||||||
The following table summarizes information about the fair values of our derivative instruments on the condensed consolidated statements of other comprehensive income (loss) for the three months ended March 31, 2014 (Pre-tax): | ||||||||||||||||||||||||
Other Comprehensive Income (Loss) Rollforward: | Amount | |||||||||||||||||||||||
($ thousands) | ||||||||||||||||||||||||
Beginning Balance Gain/(Loss) (Pre-tax) as of | December 31, 2013 | $ | (1,189 | ) | ||||||||||||||||||||
Amount Recognized in Other Comprehensive Income (Loss) on Derivative (Pre-tax) | (1,893 | ) | ||||||||||||||||||||||
Amount Reclassified from Other Comprehensive Income (Loss) into Income (Loss) (Pre-tax) | 992 | |||||||||||||||||||||||
Ending Balance Gain/(Loss) (Pre-tax) as of | March 31, 2014 | $ | (2,090 | ) | ||||||||||||||||||||
The following table summarizes the effect and presentation of derivative instruments, including the effective portion or ineffective portion of our cash flow hedges, on the condensed consolidated statements of operations for the periods ending March 31, 2014 and 2013: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
The Effect of Derivative Instruments on the Statement of Financial Performance | ||||||||||||||||||||||||
For the Three Months Ended March 31, 2014 | ||||||||||||||||||||||||
Derivatives in ASC 815 Cash Flow Hedging Relationships | Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivative | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Loss) | Location of Gain or (Loss) Recognized in Income (Loss) on Derivative (Ineffective Portion ) | Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion ) | |||||||||||||||||||
(Effective Portion) | (Effective Portion) | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Interest rate cap contracts | $ | (1,893 | ) | $ | — | Interest Expense | $ | (992 | ) | $ | — | Interest Expense | $ | — | $ | — | ||||||||
Total | $ | (1,893 | ) | $ | — | $ | (992 | ) | $ | — | $ | — | $ | — | ||||||||||
Changes_in_Stockholders_Equity
Changes in Stockholders' Equity | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Changes in Stockholders' Equity | ' | ||||||||||||||
Changes in Stockholders’ Equity: | |||||||||||||||
Changes in our Common Stock, Additional Paid-In Capital and Accumulated Other Comprehensive Income accounts during the three-month period ended March 31, 2014 were as follows (share amounts and $ amounts in thousands): | |||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | |||||||||||||
Shares | Amount | ||||||||||||||
Balance, December 31, 2013 | — | $ | — | $ | 686,577 | $ | (799 | ) | |||||||
Unrealized loss on available for sale securities, net of tax | — | — | — | (6 | ) | ||||||||||
Unrealized loss on cash flow hedges, net of tax | — | — | — | (1,212 | ) | ||||||||||
Less: reclassification adjustment for net losses included in net income, net of tax | — | — | — | 635 | |||||||||||
Compensatory arrangements | — | — | 942 | — | |||||||||||
Capital contribution from Holdings | 110,000 | ||||||||||||||
Other | — | — | — | — | |||||||||||
Balance, March 31, 2014 | — | $ | — | $ | 797,519 | $ | (1,382 | ) | |||||||
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Share-Based Compensation | ' | ||||||||||||
Share-Based Compensation: | |||||||||||||
We account for share-based compensation as required by ASC 718-10, Compensation – Stock Compensation, ("ASC 718-10") which requires companies to recognize compensation expense in the amount equal to the fair value of all share-based payments granted to employees. Under ASC 718-10, we recognize share-based compensation ratably over the service period applicable to the award. ASC 718-10 also requires that excess tax benefits be reflected as financing cash flows. | |||||||||||||
Successor Share-Based Compensation | |||||||||||||
Stock Options | |||||||||||||
In conjunction with the Merger, certain senior level employees of the Company were granted stock options in Holdings, effectively granted as of September 28, 2012, under the terms of the Sky Growth Holdings Corporation 2012 Equity Incentive Plan. The share-based compensation expense relating to awards to those persons has been pushed down from Holdings to the Company. | |||||||||||||
Each optionee received two equal tranches of stock options. Tranche 1 options vest based upon continued employment over a five year period, ratably 20% each annual period. Our policy is to recognize expense for this type of award on a straight-line basis over the requisite service period for the entire award (5 years). Tranche 2 options vest based upon continued employment and the Company achieving specified annual or bi-annual EBITDA targets. Compensation expense will be recognized on a graded vesting schedule. In circumstances where the specified annual or bi-annual EBITDA targets are not met, Tranche 2 options may also vest in amounts of either 50% or 100% of the original award in the event of an initial public offering or other sale of Holdings to a third party buyer (a market condition) that returns a specified level of proceeds calculated as a multiple of the equity invested in the Company by the Sponsor. | |||||||||||||
We used the Black-Scholes stock option pricing model to estimate the fair value of all Tranche 1 options and Tranche 2 options without a market condition (i.e., Tranche 2 options with service and performance conditions only). | |||||||||||||
The Tranche 2 options with a market condition were valued using a Monte Carlo simulation. The Monte Carlo simulation developed a range of projected outcomes of the market condition by projecting potential share prices over a 5 year simulation and determining if the share price had reached the specified level of proceeds stipulated in the equity plan. We ran one million simulations and concluded the fair value of the Tranche 2 options with market condition as the average of present value of the payoffs across all simulations. | |||||||||||||
A summary of the calculated estimated grant date fair value per option is as follows: | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
Fair value of stock options | 2014 | 2013 | |||||||||||
TRANCHE 1 | $0.67 | $0.67 | |||||||||||
TRANCHE 2 without market condition | $0.68 | $0.68 | |||||||||||
TRANCHE 2 with market condition | $0.76 | $0.76 | |||||||||||
For Tranche 2 options, each quarter we will evaluate the probability of the Company achieving the annual or the bi-annual EBITDA targets (“Vesting Event A”) and the probability of an initial public offering or other sale of the Company to a third party buyer (“Vesting Event B”). If it is probable that the Company will achieve Vesting Event A, then the Company will recognize expense for Tranche 2 options at the $0.68 per option value with any necessary adjustments to expense to be equal to the ratable expense as of the end of that particular quarter end. If it is probable that the Company will achieve Vesting Event B, then the Company will recognize expense for Tranche 2 options at the $0.76 per option value (which is the fair value taking into account the market condition) with any necessary adjustment to expense to be equal to the ratable expense as of the end of that particular quarter end. | |||||||||||||
We granted a member of the Board of Directors of Holdings stock options in Holdings during the three months ended March 31, 2013 under similar terms as the Tranche 1 options granted as of September 28, 2012 under the Sky Growth Holdings Corporation 2012 Equity Incentive Plan. These stock options vest based upon continued service over an approximate five year period, ratably 20% each period ending September 28th. We will recognize expense on a straight-line basis over the requisite service period for the entire award. The share-based compensation expense relating to the award has been pushed down from Holdings to the Company. We used the Black-Scholes stock option pricing model to estimate the fair value of the stock option awards. | |||||||||||||
Set forth below is the impact on our results of operations of recording share-based compensation from stock options ($ amounts in thousands): | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Cost of goods sold | $ | 89 | $ | 223 | |||||||||
Selling, general and administrative | 830 | 2,011 | |||||||||||
Total, pre-tax | $ | 919 | $ | 2,234 | |||||||||
Tax effect of share-based compensation | (340 | ) | (827 | ) | |||||||||
Total, net of tax | $ | 579 | $ | 1,407 | |||||||||
The following is a summary of our stock option activity (shares in thousands): | |||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
TRANCHE 1 | |||||||||||||
Balance at December 31, 2013 | 21,830 | $1.00 | |||||||||||
Granted | 625 | 1.4 | |||||||||||
Exercised | — | 1 | |||||||||||
Forfeited | (200 | ) | 1 | ||||||||||
Balance at March 31, 2014 | 22,255 | $1.01 | 8.5 | $ | 8,902 | ||||||||
Exercisable at March 31, 2014 | 4,366 | $1.00 | 8.5 | $ | 1,746 | ||||||||
Vested and expected to vest at March 31, 2014 | 21,512 | $1.01 | 8.5 | $ | 8,605 | ||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
TRANCHE 2 | |||||||||||||
Balance at December 31, 2013 | 21,330 | $1.00 | |||||||||||
Granted | 625 | 1.4 | |||||||||||
Exercised | — | 1 | |||||||||||
Forfeited | (200 | ) | 1 | ||||||||||
Balance at March 31, 2014 | 21,755 | $1.01 | 8.5 | $ | 8,702 | ||||||||
Exercisable at March 31, 2014 | 4,266 | $1.00 | 8.5 | $ | 1,706 | ||||||||
Vested and expected to vest at March 31, 2014 | 21,012 | $1.01 | 8.5 | $ | 8,405 | ||||||||
Rollover Options | |||||||||||||
As part of the Merger, certain employees of the Company were given the opportunity to exchange their stock options in Predecessor for stock options in Holdings (“Rollover Stock Options”). Sponsor was not legally or contractually required to replace Predecessor stock options with Holdings stock options, therefore the Rollover Stock Options were not part of the purchase price. The ratio of exchange was based on the intrinsic value of the Predecessor stock options at September 28, 2012. | |||||||||||||
The term of the Predecessor stock options exchanged for Holdings stock options were not extended. All Rollover Stock Options maintained their 10 year term from original grant date. | |||||||||||||
All of the Rollover Stock Options were either vested prior to September 27, 2012 or were accelerated vested on September 27, 2012 (date of the Predecessor shareholders’ meeting that approved the Merger) in accordance with the terms of the Predecessor stock option agreements. No additional vesting conditions were imposed on the holders of the Rollover Stock Options. All remaining unrecognized share-based compensation expense associated with the Rollover Stock Options was recognized during the Predecessor period. | |||||||||||||
The following is a summary of our Rollover Stock Options activity (shares and aggregate intrinsic value in thousands): | |||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
Balance at December 31, 2013 | 17,351 | $0.25 | |||||||||||
Granted | — | 0.25 | |||||||||||
Exercised | — | 0.25 | |||||||||||
Forfeited | — | 0.25 | |||||||||||
Balance at March 31, 2014 | 17,351 | $0.25 | 3.6 | $ | 19,954 | ||||||||
Exercisable at March 31, 2014 | 17,351 | $0.25 | 3.6 | $ | 19,954 | ||||||||
Restricted Stock | |||||||||||||
In conjunction with the Merger, certain senior level employees were granted restricted stock units ("RSUs") in Holdings. The share-based compensation expense relating to awards to those persons has been pushed down from Holdings to the Company. | |||||||||||||
Each RSU has only a time-based service condition and will vest no later than the fifth anniversary of the grant date (September 28, 2017) upon fulfillment of the service condition. | |||||||||||||
The fair value of each RSU is based on fair value of each share of Holdings common stock on the grant date. The RSUs are classified as equity awards. The total calculated value, net of estimated forfeitures, will be recognized ratably over the 5 year vesting period. | |||||||||||||
Set forth below is the impact on our results of operations of recording share-based compensation from RSUs for the three-month period ended March 31, 2014 and 2013 ($ amounts in thousands): | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Cost of goods sold | $ | — | $ | 3 | |||||||||
Selling, general and administrative | 23 | 31 | |||||||||||
Total, pre-tax | $ | 23 | $ | 34 | |||||||||
Tax effect of stock-based compensation | (9 | ) | (13 | ) | |||||||||
Total, net of tax | $ | 14 | $ | 21 | |||||||||
The following is a summary of our RSU activity for the three-month period ended March 31, 2014 (shares and aggregate intrinsic value in thousands): | |||||||||||||
Shares | Weighted Average Grant Price | Aggregate Intrinsic Value | |||||||||||
Balance at December 31, 2013 | 375 | $1.00 | |||||||||||
Granted | — | 1 | |||||||||||
Vested | — | 1 | |||||||||||
Forfeited | — | 1 | |||||||||||
Non-vested restricted stock unit balance at March 31, 2014 | 375 | $1.00 | $ | 525 | |||||||||
Long-term Cash Incentive Awards | |||||||||||||
In conjunction with the Merger, certain employees were granted awards under the Long-term Cash Incentive Award Agreement incentive plan (the “Incentive Plan”) from Holdings. Each participant has the potential to receive a cash award based on specific achievements in the event of a transaction (e.g., initial public offering or sale of the company to a third party buyer) that returns a specified level of proceeds calculated as a multiple of the equity invested in the Company by the Sponsor. There is no vesting period under the Incentive Plan. The grantees must be employed by Sky Growth Holdings Corporation and its subsidiaries at the time of a transaction event in order to be eligible for a cash payment. | |||||||||||||
This plan is accounted for in accordance with ASC 450 and will be evaluated quarterly. If information available before the financial statements are issued indicates that it is probable that a liability had been incurred at the date of the financial statements then an accrual shall be made for the estimated cash payout. No amount was accrued for the Incentive Plan at March 31, 2014. |
Commitments_Contingencies_and_
Commitments, Contingencies and Other Matters | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments, Contingencies and Other Matters | ' |
Commitments, Contingencies and Other Matters: | |
Legal Proceedings | |
Our legal proceedings are complex and subject to significant uncertainties. As such, we cannot predict the outcome or the effects of the legal proceedings described below. While we believe that we have valid claims and/or defenses in the litigations described below, litigation is inherently unpredictable, and the outcome of these proceedings could include substantial damages, the imposition of substantial fines, penalties, and injunctive or administrative remedies. For proceedings where losses are both probable and reasonably estimable, we have accrued for such potential loss as set forth below. Such accruals have been developed based upon estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may ultimately prove to be inaccurate or incomplete, and unknown circumstances may exist or unforeseen events occur that could lead us to change those estimates and assumptions. Unless otherwise indicated below, at this time we are not able to estimate the possible loss or range of loss, if any, associated with these legal proceedings. In general, we intend to continue to vigorously prosecute and/or defend these proceedings, as appropriate; however, from time to time, we may settle or otherwise resolve these matters on terms and conditions that we believe are in the best interests of the Company. Resolution of any or all claims, investigations, and legal proceedings, individually or in the aggregate, could have a material adverse effect on our results of operations and/or cash flows in any given accounting period or on our overall financial condition. | |
Patent Related Matters | |
On April 28, 2006, CIMA Labs, Inc. and Schwarz Pharma, Inc. filed separate lawsuits against us in the U.S. District Court for the District of New Jersey. CIMA and Schwarz Pharma each have alleged that we infringed U.S. Patent Nos. 6,024,981 (the “'981 patent”) and 6,221,392 (the “'392 patent”) by submitting a Paragraph IV certification to the FDA for approval of alprazolam orally disintegrating tablets. On July 10, 2008, the United States Patent and Trademark Office (“USPTO”) rejected all claims pending in both the '392 and '981 patents. On September 28, 2009, the USPTO's Patent Trial and Appeal Board (“PTAB”) affirmed the Examiner's rejection of all claims in the '981 patent, and on March 24, 2011, the PTAB affirmed the rejections pending for both patents and added new grounds for rejection of the '981 patent. On June 24, 2011, the plaintiffs re-opened prosecution on both patents at the USPTO. On May 13, 2013, the PTAB reversed outstanding rejections to the currently pending claims of the '392 patent reexamination application and affirmed a conclusion by the Examiner that testimony offered by the patentee had overcome other rejections. On September 20, 2013, a reexamination certificate was issued for the ’392 patent, and on January 9, 2014, a reexamination certificate was issued for the ’981 patent, each incorporating narrower claims than the respective originally-issued patent. We intend to vigorously defend this lawsuit and pursue our counterclaims. | |
Unimed and Laboratories Besins Iscovesco (“Besins”) filed a lawsuit on August 22, 2003 against Paddock Laboratories, Inc. in the U.S. District Court for the Northern District of Georgia alleging patent infringement as a result of Paddock's submitting an ANDA with a Paragraph IV certification seeking FDA approval of testosterone 1% gel, a generic version of Unimed Pharmaceuticals, Inc.'s Androgel®. On September 13, 2006, we acquired from Paddock all rights to the ANDA, and the litigation was resolved by a settlement and license agreement that permits us to launch the generic version of the product no earlier than August 31, 2015, and no later than February 28, 2016, assuring our ability to market a generic version of Androgel® well before the expiration of the patents at issue. On January 30, 2009, the Bureau of Competition for the FTC filed a lawsuit against us in the U.S. District Court for the Central District of California, subsequently transferred to the Northern District of Georgia, alleging violations of antitrust laws stemming from our court-approved settlement, and several distributors and retailers followed suit with a number of private plaintiffs' complaints beginning in February 2009. On February 23, 2010, the District Court granted our motion to dismiss the FTC's claims and granted in part and denied in part our motion to dismiss the claims of the private plaintiffs. On September 28, 2012, the District Court granted our motion for summary judgment against the private plaintiffs' claims of sham litigation. On June 10, 2010, the FTC appealed the District Court's dismissal of the FTC's claims to the U.S. Court of Appeals for the 11th Circuit. On April 25, 2012, the Court of Appeals affirmed the District Court's decision. On June 17, 2013, the Supreme Court of the United States reversed the Court of Appeals’ decision and remanded the case to the U.S. District Court for the Northern District of Georgia for further proceedings. On October 23, 2013, the District Court issued an order on indicative ruling on a request for relief from judgment, effectively remanding to the District Court the appeal of the grant of our motion for summary judgment against the private plaintiffs’ claims and holding those claims in abeyance while the remaining issues pending before the Court are resolved. On January 15, 2014 we filed a motion to dismiss the FTC’s complaint for failure to state a claim; and on April 21, 2014, that motion was denied. On April 22, 2014, we filed a motion for an interlocutory appeal of that motion, and on May 9, 2014, that motion was in turn denied. We believe we have complied with all applicable laws in connection with the court-approved settlement and intend to continue to vigorously defend these actions. | |
On September 13, 2007, Santarus, Inc. and The Curators of the University of Missouri (“Missouri”) filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 6,699,885; 6,489,346; and 6,645,988 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of 20 mg and 40 mg omeprazole/sodium bicarbonate capsules. On December 20, 2007, Santarus and Missouri filed a second lawsuit against us in the U.S. District Court for the District of Delaware alleging infringement of the patents because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of 20 mg and 40 mg omeprazole/sodium bicarbonate powders for oral suspension. The complaints generally seek (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On March 4, 2008, the cases pertaining to our ANDAs for omeprazole capsules and omeprazole oral suspension were consolidated for all purposes. On April 14, 2010, the District Court ruled in our favor, finding that plaintiffs’ patents were invalid as being obvious and without adequate written description. Santarus appealed to the U.S. Court of Appeals for the Federal Circuit, and we cross-appealed the District Court’s decision of enforceability of plaintiffs’ patents. On July 1, 2010, we launched our generic Omeprazole/Sodium Bicarbonate product. On September 4, 2012, the Court of Appeals affirmed-in-part and reversed-in-part the District Court’s decision. On December 10, 2012, our petition for rehearing and rehearing en banc was denied without comment. A jury trial is now scheduled in the District Court for November 3, 2014. On March 1, 2013, we filed a motion for judgment on the pleadings seeking dismissal of the case, which was denied on May 13, 2014. A contingent liability of $9 million was recorded on our consolidated balance sheet as of March 31, 2014 and December 31, 2013 for this matter. We can give no assurance that the final resolution of this legal proceeding will not materially differ from our estimates and assumptions inherent in our best estimate of potential loss. We have ceased further distribution of our generic omeprazole/sodium bicarbonate 20 mg and 40 mg capsule product pending further developments. We will continue to vigorously defend this action. | |
On September 20, 2010, Schering-Plough HealthCare Products, Santarus, Inc., and the Curators of the University of Missouri filed a lawsuit against us in the U.S. District Court for the District of New Jersey. The complaint alleges infringement of U.S. Patent Nos. 6,699,885; 6,489,346; 6,645,988; and 7,399,772 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of a 20mg/1100 mg omeprazole/sodium bicarbonate capsule, a version of Schering-Plough's Zegerid OTC ® . The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. The case was stayed pending the decision by the Court of Appeals on the prescription product appeal described in the preceding paragraph, and the parties agreed to be bound by such decision for purposes of the OTC product litigation. The case was re-opened on October 3, 2012, and a bench-trial was scheduled for January 26, 2015. On April 11, 2014, the case was dismissed pursuant to a confidential settlement agreement. | |
On April 29, 2009, Pronova BioPharma ASA filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 5,502,077 and 5,656,667 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of omega-3-acid ethyl esters oral capsules. On May 29, 2012, the District Court ruled in favor of Pronova in the initial case, and we appealed to the U.S. Court of Appeals for the Federal Circuit on June 25, 2012. An oral hearing was held on May 8, 2013, and on September 12, 2013, the Court of Appeals ruled in our favor, reversing the lower District Court decision. On October 15, 2013, Pronova filed petitions for panel and en banc rehearing, which were denied on January 16, 2014. On March 5, 2014, judgment in our favor was formally entered in the District Court. | |
On October 4, 2010, UCB Manufacturing, Inc. filed a verified complaint in the Superior Court of New Jersey, Chancery Division, Middlesex, naming us, our development partner Tris Pharma, and Tris Pharma's head of research and development, Yu- Hsing Tu. The complaint alleges that Tris and Tu misappropriated UCB's trade secrets and, by their actions, breached contracts and agreements to which UCB, Tris, and Tu were bound. The complaint further alleges unfair competition against Tris, Tu, and us relating to the parties' manufacture and marketing of generic Tussionex® seeking a judgment of misappropriation and breach, a permanent injunction and disgorgement of profits. On June 2, 2011, the court granted Tris's motion for summary judgment dismissing UCB's claims, and UCB appealed. An oral hearing was held on April 8, 2013. We intend to vigorously defend the lawsuit. | |
On August 10, 2011, Avanir Pharmaceuticals, Inc. et al. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 7,659,282 and RE38155 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of oral capsules of 20 mg dextromethorphan hydrobromide and 10 mg quinidine sulfate. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. Our case was consolidated with those of other defendants, Actavis, Impax, and Wockhardt. A Markman ruling was entered December 3, 2012 and a bench trial was held from September 9-13 and October 15, 2013. On April 30, 2014, a decision was entered in favor of Avanir. We intend to prosecute our appeal of this decision vigorously. | |
On September 1, 2011, we, along with EDT Pharma Holdings Ltd. (now known as Alkermes Pharma Ireland Limited) (Elan), filed a complaint against TWi Pharmaceuticals, Inc. of Taiwan in the U.S. District Court for the District of Maryland and another complaint against TWi on September 2, 2011, in the U.S. District Court for the Northern District of Illinois. In both complaints, Elan and we allege infringement of U.S. Patent No. 7,101,576 because TWi filed an ANDA with a Paragraph IV certification seeking FDA approval of a generic version of Megace® ES. On February 6, 2012, we voluntarily dismissed our case in the Northern District of Illinois and proceeded with our case in the District of Maryland. Our complaint seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On July 17, 2013, the District Court granted in part and denied in part TWi's motion for summary judgment of invalidity and noninfringement and granted summary judgment in our favor dismissing two of TWi's invalidity defenses. On September 25, 2013, the District Court entered a stipulation in which TWi conceded infringement of the ’576 patent. A bench trial was held from October 7-15, 2013. On February 21, 2014, the District Court issued a decision in favor of TWi, finding all asserted claims of the ’576 patent invalid for obviousness. We intend to vigorously pursue an appeal of this decision. | |
On October 28, 2011, Astra Zeneca, Pozen, Inc., and KBI-E Inc., filed a lawsuit against our subsidiary, Anchen Pharmaceuticals, in the U.S. District Court for the District of New Jersey. The complaint alleges infringement of U.S. Patent No. 6,926,907; 6,369,085; 7,411,070; and 7,745 ,466 because Anchen submitted an ANDA with a Paragraph IV certification seeking FDA approval of delayed-release oral tablets of 375/20 and 500/20 mg naproxen/esomeprazole magnesium. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A Markman ruling was entered on May 1, 2013. On October 15, 2013, a draft stipulation of dismissal was offered to plaintiffs in light of our conversion of our Paragraph IV certification to a Paragraph III certification in our ANDA. As of the date of this Report, plaintiffs continue to oppose the entry of the dismissal stipulation. We will continue to defend this action vigorously. | |
On April 4, 2012, AR Holding Company, Inc. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 7,619,004; 7,601,758; 7,820,681; 7,915,269; 7,964,647; 7,964,648; 7,981,938; 8,093,296; 8,093,297; and 8,097,655 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of oral tablets of 0.6 mg colchicine. On November 1, 2012, Takeda Pharmaceuticals was substituted as the plaintiff and real party-in-interest in the case. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On August 30, 2013, Takeda filed a new complaint against us in view of our change of the ANDA’s labeled indication. A bench trial is scheduled for August 3, 2015. We intend to defend this action vigorously. | |
On August 22, 2012, we were added as a defendant to the action pending before the U.S. District Court for the Northern District of California brought by Takeda Pharmaceuticals, originally against Handa Pharmaceuticals. Takeda's complaints allege infringement of U.S. Patent Nos. 6,462,058; 6,664,276; 6,939,971; 7,285,668; 7,737,282; and 7,790,755 because Handa submitted an ANDA with a Paragraph IV certification to the FDA for approval of dexlansoprazole delayed release capsules, 30 mg and 60 mg. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We assumed the rights to this ANDA and are prosecuting the case vigorously. A bench trial was held on June 5-13, 2013. On April 26, 2013, we filed a declaratory judgment complaint in the U.S. District Court for the Northern District of California in view of U.S. Patent Nos. 8,105,626 and 8,173,158, and another in the same court on July 9, 2013 with respect to U.S. Patent No. 8,461,187, in each case against Takeda Pharmaceuticals, and asserting that the patents in questions are not infringed, invalid, or unenforceable. A bench trial has been set in this case for April 13, 2015. On October 17, 2013, a decision in favor of Takeda was entered in the original District Court case with respect to the ’282 and ’276 patents. On November 6, 2013, we filed our appeal of the original District Court’s judgment to the Court of Appeals for the Federal Circuit. We intend to continue to defend and prosecute, as appropriate, these actions vigorously. | |
On October 25, 2012, Purdue Pharma L.P. and Transcept Pharmaceuticals filed a lawsuit against us in the U.S. District Court for the District of New Jersey. The complaint alleged infringement of U.S. Patent Nos. 8,242,131 and 8,252,809 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of zolpidem tartrate sublingual tablets 1.75 and 3.5 mg. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A Markman hearing is scheduled for May 8, 2014, and pre-trial briefs are due October 24, 2014. We intend to defend this action vigorously. | |
On October 31, 2012, Acura Pharmaceuticals, Inc. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleged infringement of U.S. Patent No. 7,510,726 because we submitted an ANDA with a Paragraph IV certification seeking FDA approval of oxycodone oral tablets 5 and 7.5 mg. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On November 13, 2013, the case was dismissed pursuant to a confidential settlement agreement. | |
On December 19, 2012, Endo Pharmaceuticals and Grunenthal filed a lawsuit against us in the U.S. District Court for the Southern District of New York. The complaint alleges infringement of U.S. Patent Nos. 7,851,482; 8,114,383; 8,192,722; 8.309, 060; 8,309,122; and 8,329,216 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of oxymorphone hydrochloride extended release tablets 40 mg. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We intend to defend this action vigorously. | |
On January 8, 2013, we were substituted for Actavis as defendant in litigation then pending in the U.S. District Court for the District of Delaware. The action was brought by Novartis against Actavis for filing an ANDA with a Paragraph IV certification seeking FDA approval of rivastigmine transdermal extended release film 4.6 and 9.5 mg/24 hr. The complaint alleges infringement of U.S. Patents 5,602,176; 6,316,023; and 6,335,031 and generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A trial was held August 26-29, 2013, and a second bench trial directed to our non-infringement positions was held on May 1 and 2, 2014. We intend to defend this action vigorously | |
On February 7, 2013, Sucampo Pharmaceuticals, Takeda Pharmaceuticals, and R-Tech Ueno filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 6,414,016; 7,795,312; 8,026,393; 8,071,613; 8,097,653; and 8,338,639 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of lubiprostone oral capsules 8 mcg and 24 mcg. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On July 3, 2013, an amended complaint was filed, adding U.S. Patent No. 8,389,542 to the case. A bench trial is scheduled for December 1, 2014. We intend to defend this action vigorously. | |
On May 14, 2013, Bayer Pharma AG, Bayer IP GMBH, and Bayer Healthcare Pharmaceuticals, Inc. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 6,362,178 and 7,696,206 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of vardenafil hydrochloride orally disintegrating tablets. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A bench trial is scheduled for April 6, 2015. We intend to defend this action vigorously. | |
On May 15, 2013, Endo Pharmaceuticals filed a lawsuit against us in the U.S. District Court for the Southern District of New York. The complaint alleges infringement of U.S. Patent Nos. 7,851,482; 8,309,122; and 8,329,216 as a result of our November 2012 acquisition from Watson of an ANDA with a Paragraph IV certification seeking FDA approval of non-tamper resistant oxymorphone hydrochloride extended release tablets. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. While Watson had settled patent litigation relating to this product in October 2010, Endo is asserting patents that issued after that settlement agreement was executed. We intend to defend this action vigorously. | |
On June 19, 2013, Alza Corporation and Janssen Pharmaceuticals, Inc. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent No. 8,163,798 as a result of our November 2012 acquisition from Watson of an ANDA with a Paragraph IV certification seeking FDA approval of methylphenidate hydrochloride extended release tablets. The complaint generally seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A bench trial is scheduled for March 16, 2015. We intend to defend this action vigorously. | |
On June 21, 2013, we, along with Alkermes Pharma Ireland Ltd., filed a complaint against Breckenridge Pharmaceutical, Inc. in the U.S. District Court for the District of Delaware. In the complaint, we allege infringement of U.S. Patent Nos. 6,592,903 and 7,101,576 because Breckenridge filed an ANDA with a Paragraph IV certification seeking FDA approval of a generic version of Megace® ES. Our complaint seeks (i) a finding of infringement, validity, and/or enforceability; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A bench trial is scheduled for February 17, 2015. We intend to prosecute this infringement case vigorously. | |
On September 23, 2013, Forest Labs and Royalty Pharma filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos., 6,602,911; 7,888,342; and 7,994,220 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of 12.5, 25, 50, and 100 mg milnacipran HCl oral tablets. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A bench trial is scheduled for January 19, 2016. We intend to defend this action vigorously | |
On August 20, 2013, MonoSol RX and Reckitt Benckiser filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos., 8,017,150 and 8,475,832 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of EQ 2/0.5, 8/2, 4/1, 12/3 mg base buprenorphine HCl/naloxone HCl sublingual films. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. A three-day bench trial is scheduled for August 31, 2015. We intend to defend this action vigorously. | |
On November 26, 2013, Otsuka Pharmaceutical Co. filed a lawsuit against us in the U.S. District Court for the District of Delaware. The complaint alleges both improper notification as to the Paragraph IV certification accompanying our ANDA for approval of 15 and 30 mg tolvaptan oral tablets as well as infringement of U.S. Patent Nos. 5,753,677 and 8,501,730. The complaint seeks (i) a declaratory judgment of improper notice; (ii) a finding of infringement; and (iii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. On March 10, 2014, the District Court granted Otsuka’s motion for judgment on the pleadings, dismissing the case, as our initial notice letter preceded our acceptance for filing from FDA. At the appropriate time, we intend to resubmit the notice letter. | |
On December 27, 2013, Jazz Pharmaceuticals filed a lawsuit against us in the U.S. District Court for the District of New Jersey. The complaint alleges infringement of U.S. Patent Nos. 6,472,431; 6,780,889; 7,262,219; 7,851,506; 8,263,650; 8,324,275; 8,461,203; 7,668,730; 7,765,106; 7,765,107; 7,895,059; 8,457,988; and 8,589,182 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of 500mg/ml sodium oxybate oral solution. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We intend to defend this action vigorously. | |
On January 21, 2014, Lyne Laboratories, Fresenius USA Manufacturing and Fresenius Medical Care Holdings filed a lawsuit against us in the U.S. District Court for the District of Massachusetts. The complaint alleges infringement of U.S. Patent Nos. 8,591,938 and 8,592,480 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of 169mg/5ml calcium acetate oral solution. The complaint seeks (i) a finding of infringement; and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We intend to defend this action vigorously. | |
On January 23, 2014, Eli Lilly filed a lawsuit against us in the U.S. District Court for the Southern District of Indiana, and on January 24, 2014, Lilly, Daiichi Sankyo, and Ube Industries, Ltd. filed a lawsuit against us in the U.S. District Court for the District of New Jersey. The complaints allege infringement of U.S. Patent Nos. 8,404,703 and 8,569,325 because we submitted an ANDA with a Paragraph IV certification to the FDA for approval of EQ 5 mg and EQ 10 mg prasugrel hydrochloride oral tablets. The complaints seek (i) a finding of infringement and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We intend to defend these actions vigorously. | |
On February 14, 2014, Forest Laboratories, Inc., Forest Laboratories Holdings, Ltd., and Adamas Pharmaceuticals, Inc., filed a lawsuit against us and our Anchen subsidiary in the U.S. District Court for the District of Delaware. The complaint alleges infringement of U.S. Patent Nos. 8,039,009; 8,168,209; 8,173,708; 8,283,379; 8,329,752; 8,362,085; and 8,598,233 because we submitted ANDAs with Paragraph IV certifications to the FDA for approval of 7, 14, 21, and 28 mg memantine hydrochloride extended release capsules. The complaint seeks (i) a finding of infringement and (ii) a permanent injunction be entered, terminating at the expiration of the patents-in-suit. We intend to defend this action vigorously. | |
Industry Related Matters | |
We, along with numerous other pharmaceutical companies, have been named as a defendant in an action brought by the Attorney General of Illinois, alleging generally that the defendants defrauded the state Medicaid systems by purportedly reporting or causing the reporting of AWP and/or “Wholesale Acquisition Costs” that exceeded the actual selling price of the defendants’ prescription drugs. These AWP cases generally seek some combination of actual damages, and/or double damages, treble damages, compensatory damages, statutory damages, civil penalties, disgorgement of excessive profits, restitution, disbursements, counsel fees and costs, litigation expenses, investigative costs, injunctive relief, punitive damages, imposition of a constructive trust, accounting of profits or gains derived through the alleged conduct, expert fees, interest and other relief that the court deems proper. On November 21, 2013, we reached an agreement in principle to resolve the claims brought by the State of Illinois for $28,500 thousand, including attorneys’ fees and costs. A contingent liability of $28,500 thousand was recorded under the caption “Accrued legal settlements” on our condensed consolidated balance sheet as of March 31, 2014, in connection with the aforementioned AWP actions. | |
The Attorneys General of Florida, Indiana and Virginia and the United States Office of Personnel Management (the “USOPM”) have issued subpoenas, and the Attorneys General of Michigan, Tennessee, Texas, and Utah have issued civil investigative demands, to us. The demands generally request documents and information pertaining to allegations that certain of our sales and marketing practices caused pharmacies to substitute ranitidine capsules for ranitidine tablets, fluoxetine tablets for fluoxetine capsules, and two 7.5 mg buspirone tablets for one 15 mg buspirone tablet, under circumstances in which some state Medicaid programs at various times reimbursed the new dosage form at a higher rate than the dosage form being substituted. We have provided documents in response to these subpoenas to the respective Attorneys General and the USOPM. The aforementioned subpoenas and civil investigative demands culminated in the federal and state law qui tam action brought on behalf of the United States and several states by Bernard Lisitza. The complaint was unsealed on August 30, 2011. The United States intervened in this action on July 8, 2011 and filed a separate complaint on September 9, 2011, alleging claims for violations of the Federal False Claims Act and common law fraud. The states of Michigan and Indiana have also intervened as to claims arising under their respective state false claims acts, common law fraud, and unjust enrichment. We intend to vigorously defend these lawsuits. | |
Other | |
We are, from time to time, a party to certain other litigations, including product liability litigations. We believe that these litigations are part of the ordinary course of our business and that their ultimate resolution will not have a material effect on our financial condition, results of operations or liquidity. We intend to defend or, in cases where we are the plaintiff, to prosecute these litigations vigorously. |
Segment_Information
Segment Information | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Segment Information | ' | |||||||
Segment Information: | ||||||||
We operate in two reportable business segments: generic pharmaceuticals (referred to as “Par Pharmaceutical” or “Par”) and branded pharmaceuticals (referred to as “Strativa Pharmaceuticals” or “Strativa”). Branded products are marketed under brand names through marketing programs that are designed to generate physician and consumer loyalty. Branded products generally are patent protected, which provides a period of market exclusivity during which they are sold with little or no direct competition. Generic pharmaceutical products are the chemical and therapeutic equivalents of corresponding brand drugs. The Drug Price Competition and Patent Term Restoration Act of 1984 provides that generic drugs may enter the market upon the approval of an ANDA and the expiration, invalidation or circumvention of any patents on corresponding brand drugs, or the expiration of any other market exclusivity periods related to the brand drugs. Our chief operating decision maker is our Chief Executive Officer. | ||||||||
Our business segments were determined based on management’s reporting and decision-making requirements in accordance with ASC 280-10, "Segment Reporting." We believe that our generic products represent a single operating segment because the demand for these products is mainly driven by consumers seeking a lower cost alternative to brand name drugs. Par’s generic drugs are developed using similar methodologies, for the same purpose (e.g., seeking bioequivalence with a brand name drug nearing the end of its market exclusivity period for any reason discussed above). Par’s generic products are produced using similar processes and standards mandated by the FDA, and Par’s generic products are sold to similar customers. Based on the similar economic characteristics, production processes and customers of Par’s generic products, management has determined that Par’s generic pharmaceuticals are a single reportable business segment. Our chief operating decision maker does not review the Par (generic) or Strativa (brand) segments in any more granularity, such as at the therapeutic or other classes or categories. Certain of our expenses, such as the direct sales force and other sales and marketing expenses and specific research and development expenses, are charged directly to either of the two segments. Other expenses, such as general and administrative expenses and non-specific research and development expenses are allocated between the two segments based on assumptions determined by management. | ||||||||
Our chief operating decision maker does not review our assets or depreciation by business segment at this time as they are not material to Strativa. Therefore, such allocations by segment are not provided. | ||||||||
The financial data for the two business segments are as follows ($ amounts in thousands): | ||||||||
Three months ended | ||||||||
March 31, 2014 | 31-Mar-13 | |||||||
Revenues: | ||||||||
Par Pharmaceutical | $ | 273,806 | $ | 272,800 | ||||
Strativa | 15,278 | 17,396 | ||||||
Total revenues | $ | 289,084 | $ | 290,196 | ||||
Gross margin: | ||||||||
Par Pharmaceutical | $ | 83,644 | $ | 59,685 | ||||
Strativa | 10,670 | 11,759 | ||||||
Total gross margin | $ | 94,314 | $ | 71,444 | ||||
Operating (loss) income: | ||||||||
Par Pharmaceutical | $ | (23,260 | ) | $ | 9,523 | |||
Strativa | (10,895 | ) | (914 | ) | ||||
Total operating (loss) income | $ | (34,155 | ) | $ | 8,609 | |||
Interest income | 14 | 37 | ||||||
Interest expense | (25,467 | ) | (24,036 | ) | ||||
Loss on debt extinguishment | (3,989 | ) | (7,335 | ) | ||||
Benefit for income taxes | (24,232 | ) | (7,979 | ) | ||||
Net loss | $ | (39,365 | ) | $ | (14,746 | ) | ||
Total revenues of our top selling products were as follows ($ amounts in thousands): | ||||||||
Three months ended | ||||||||
31-Mar-14 | 31-Mar-13 | |||||||
Product | ||||||||
Par Pharmaceutical | ||||||||
Budesonide (Entocort® EC) | $ | 37,349 | $ | 50,403 | ||||
Propafenone (Rythmol SR®) | 21,112 | 17,159 | ||||||
Divalproex (Depakote®) | 20,405 | 1,426 | ||||||
Bupropion ER (Wellbutrin) | 16,342 | 8,253 | ||||||
Metoprolol succinate ER (Toprol-XL®) | 14,117 | 19,401 | ||||||
Other (1) | 145,631 | 98,402 | ||||||
Other product related revenues (2) | 5,439 | 6,779 | ||||||
Total Par Pharmaceutical Revenues | $ | 273,806 | $ | 272,800 | ||||
Strativa | ||||||||
Megace® ES | $ | 8,154 | $ | 10,536 | ||||
Nascobal® Nasal Spray | 6,324 | 6,202 | ||||||
Other | (12 | ) | (241 | ) | ||||
Other product related revenues (2) | 812 | 899 | ||||||
Total Strativa Revenues | $ | 15,278 | $ | 17,396 | ||||
-1 | The further detailing of revenues of the other approximately 80 generic drugs was not considered significant to the overall disclosure due to the lower volume of revenues associated with each of these generic products. No single product in the other category was significant to total generic revenues for the three-month periods ended March 31, 2014 and 2013. | |||||||
-2 | Other product related revenues represents licensing and royalty related revenues from profit sharing agreements. |
Restructuring
Restructuring | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||||||||||
Restructuring | ' | ||||||||||||||||||||
Restructuring: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Subsequent to the JHP Acquisition, we eliminated approximately 15 redundant positions within Par Pharmaceutical and accrued severance and other employee-related costs for those employees affected by the workforce reduction in the first quarter of 2014. | |||||||||||||||||||||
($ amounts in thousands) | |||||||||||||||||||||
Restructuring Activities (JHP) | Initial Charge | Cash Payments | Non-Cash Charge Related to Inventory and/or Intangible Assets | Reversals, Reclass or Transfers | Liabilities at March 31, 2014 | ||||||||||||||||
Severance and employee benefits to be paid in cash | $ | 1,146 | $ | — | $ | — | $ | — | $ | 1,146 | |||||||||||
Total restructuring costs line item | $ | 1,146 | $ | 0 | $ | 0 | $ | 0 | $ | 1,146 | |||||||||||
2013 | |||||||||||||||||||||
In January 2013, we initiated a restructuring of Strativa, our branded pharmaceuticals division, in anticipation of entering into a settlement agreement and corporate integrity agreement that terminated the U.S. Department of Justice’s ongoing investigation of Strativa’s marketing of Megace® ES. We reduced our Strativa workforce by approximately 70 people, with the majority of the reductions in the sales force. The remaining Strativa sales force has been reorganized into a single sales team of approximately 60 professionals that focus their marketing efforts principally on Nascobal® Nasal Spray. In connection with these actions, we incurred expenses for severance and other employee-related costs as well as the termination of certain contracts. There were no remaining liabilities at March 31, 2014 on the condensed consolidated balance sheet. | |||||||||||||||||||||
($ amounts in thousands) | |||||||||||||||||||||
Restructuring Activities (Strativa) | Initial Charge | Cash Payments | Non-Cash Charge Related to Inventory and/or Intangible Assets | Reversals, Reclass or Transfers | Liabilities at March 31, 2014 | ||||||||||||||||
Severance and employee benefits to be paid in cash | $ | 1,413 | $ | (1,409 | ) | $ | — | $ | (4 | ) | $ | — | |||||||||
Asset impairments and other | 403 | — | (403 | ) | — | — | |||||||||||||||
Total restructuring costs line item | $ | 1,816 | $ | (1,409 | ) | $ | (403 | ) | $ | (4 | ) | $ | 0 | ||||||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events: | |
On April 9, 2014, we entered into four interest rate caps with various termination dates and notional amounts with an additional counterparty. We entered into these derivative financial instruments to manage our exposures that arise from payment of future known and uncertain cash amounts related to our borrowings, the value of which are determined by LIBOR interest rates. Incremental borrowing related to the JHP acquisition necessitated additional interest rate caps to maintain a ratio of fixed interest rate debt to variable interest rate debt that is appropriate for our business. The derivatives have a combined notional value of $230,000 thousand, all with an effective date as of September 30, 2014 and with termination dates each September 30th beginning in 2015 and ending in 2018. Consistent with the terms of the Credit Agreement, the interest rate caps have a strike of 1% which matches the LIBOR floor of 1.0% on the debt. The premium is deferred and paid over the life of the instrument. The effective annual interest rate related to these interest rate caps is a fixed weighted average rate of approximately 4.8%. These instruments are designated for accounting purposes as cash flow hedges of interest rate risk related to our Credit Agreement. Future payments under these interest rate caps will be reflected as interest expense on our condensed consolidated statements of operations. |
JHP_Acquisition_Tables
JHP Acquisition (Tables) (JHP Group Holdings [Member]) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
JHP Group Holdings [Member] | ' | |||||||||||
Business Acquisition [Line Items] | ' | |||||||||||
Business Combination, Source of Funds and Use of Funds for Acquisition | ' | |||||||||||
The sources and uses of funds in connection with the JHP Acquisition are summarized below ($ in thousands): | ||||||||||||
Sources: | Uses: | |||||||||||
Senior secured term loan | $ | 395,000 | Cash purchase of equity | $ | 487,929 | |||||||
Sponsor equity contribution | 110,000 | Transaction costs | 12,350 | |||||||||
Company cash on hand | 1,633 | Accrued interest on Company debt | 6,354 | |||||||||
Total source of funds | $ | 506,633 | Total use of funds | $ | 506,633 | |||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | |||||||||||
The purchase price of JHP has been allocated on a preliminary basis to the following assets and liabilities ($ in thousands): | ||||||||||||
As of February 20, 2014 | ||||||||||||
Cash and cash equivalents | $ | 9,278 | ||||||||||
Accounts receivable, net | 6,244 | |||||||||||
Inventories | 35,418 | |||||||||||
Prepaid expenses and other current assets | 1,797 | |||||||||||
Property, plant and equipment | 73,939 | |||||||||||
Intangible assets | 290,299 | |||||||||||
Other long-term assets, net | 2,658 | |||||||||||
Total identifiable assets | 419,633 | |||||||||||
Accounts payable | 13,716 | |||||||||||
Accrued expenses and other current liabilities | 2,496 | |||||||||||
Deferred tax liabilities | 67,425 | |||||||||||
Other long-term liabilities | 754 | |||||||||||
Total liabilities assumed | 84,391 | |||||||||||
Net identifiable assets acquired | 335,242 | |||||||||||
Goodwill | 152,687 | |||||||||||
Net assets acquired | $ | 487,929 | ||||||||||
Business Acquisition, Pro Forma Information | ' | |||||||||||
Three months ended | ||||||||||||
(In thousands) | 31-Mar-14 | 31-Mar-13 | ||||||||||
Total revenues | $ | 308,146 | $ | 328,768 | ||||||||
Loss from continuing operations | $ | (29,476 | ) | $ | (32,502 | ) |
Edict_Acquisition_Tables
Edict Acquisition (Tables) (Edict Acquisition [Member]) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Edict Acquisition [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Business Combination, Consideration Transferred | ' | ||||
The acquisition-date fair value of the consideration transferred consisted of the following items ($ amounts in thousands): | |||||
Cash paid for equity | $ | 20,659 | |||
Contingent purchase price liabilities | 11,641 | -1 | |||
Cash paid for assumed indebtedness | 4,300 | ||||
Total consideration | $ | 36,600 | |||
-1 | Contingent purchase price liabilities represent subsequent milestone payments related to successful FDA inspection of the Par Formulations manufacturing facility and ANDA filings. All contingent purchase price liabilities were paid in full within 18 months of the acquisition date. |
Available_for_Sale_Marketable_1
Available for Sale Marketable Debt Securities (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Available-for-sale Securities [Abstract] | ' | |||||||||||||||
Summary of Amortized Cost and Estimated Fair Value of Available for Sale Marketable Debt Securities | ' | |||||||||||||||
The following is a summary of amortized cost and estimated fair value of our marketable debt securities available for sale at March 31, 2014 ($ amounts in thousands): | ||||||||||||||||
Estimated | ||||||||||||||||
Unrealized | Fair | |||||||||||||||
Cost | Gain | (Loss) | Value | |||||||||||||
Corporate bonds | $ | 2,508 | $ | 9 | $ | — | $ | 2,517 | ||||||||
All available for sale marketable debt securities are classified as current on our condensed consolidated balance sheet as of March 31, 2014. | ||||||||||||||||
The following is a summary of amortized cost and estimated fair value of our investments in marketable debt securities available for sale at December 31, 2013 ($ amounts in thousands): | ||||||||||||||||
Estimated | ||||||||||||||||
Unrealized | Fair | |||||||||||||||
Cost | Gain | (Loss) | Value | |||||||||||||
Corporate bonds | $ | 3,522 | $ | 19 | $ | — | $ | 3,541 | ||||||||
Summary of Contractual Maturities of Available for Sale Debt Securities | ' | |||||||||||||||
The following is a summary of the contractual maturities of our available for sale debt securities at March 31, 2014 ($ amounts in thousands): | ||||||||||||||||
March 31, 2014 | ||||||||||||||||
Estimated Fair | ||||||||||||||||
Cost | Value | |||||||||||||||
Less than one year | $ | 2,508 | $ | 2,517 | ||||||||||||
Total | $ | 2,508 | $ | 2,517 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | ' | |||||||||||||||
The fair value of our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 were as follows ($ amounts in thousands): | ||||||||||||||||
Estimated Fair Value at | ||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Corporate bonds (Note 7) | $ | 2,517 | $ | — | $ | 2,517 | $ | — | ||||||||
Cash equivalents | $ | 123,784 | $ | 123,784 | $ | — | $ | — | ||||||||
Senior secured term loan (Note 15) | $ | 1,447,084 | $ | — | $ | 1,447,084 | $ | — | ||||||||
7.375% senior notes (Note 15) | $ | 529,200 | $ | — | $ | 529,200 | $ | — | ||||||||
Derivative instruments - Interest rate caps (Note 16) | $ | 2,090 | $ | — | $ | 2,090 | $ | — | ||||||||
The fair value of our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 were as follows ($ amounts in thousands): | ||||||||||||||||
Estimated Fair Value at | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Corporate bonds (Note 7) | $ | 3,541 | $ | — | $ | 3,541 | $ | — | ||||||||
Cash equivalents | $ | 66,782 | $ | 66,782 | $ | — | $ | — | ||||||||
Senior secured term loan (Note 15) | $ | 1,063,255 | $ | — | $ | 1,063,255 | $ | — | ||||||||
7.375% senior notes (Note 15) | $ | 507,150 | $ | — | $ | 507,150 | $ | — | ||||||||
Derivative instruments - Interest rate caps (Note 16) | $ | 1,189 | $ | — | $ | 1,189 | $ | — | ||||||||
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||||||||||
Schedule of Accounts Receivable | ' | |||||||||||||||||||||||
The following tables summarize the impact of accounts receivable reserves and allowance for doubtful accounts on the gross trade accounts receivable balances at each balance sheet date ($ amounts in thousands): | ||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Gross trade accounts receivable | $ | 365,435 | $ | 383,347 | ||||||||||||||||||||
Chargebacks | (58,110 | ) | (48,766 | ) | ||||||||||||||||||||
Rebates and incentive programs | (83,953 | ) | (75,321 | ) | ||||||||||||||||||||
Returns | (84,590 | ) | (78,181 | ) | ||||||||||||||||||||
Cash discounts and other | (44,486 | ) | (37,793 | ) | ||||||||||||||||||||
Allowance for doubtful accounts | (291 | ) | (7 | ) | ||||||||||||||||||||
Accounts receivable, net | $ | 94,005 | $ | 143,279 | ||||||||||||||||||||
Schedule of Allowance for Doubtful Accounts Roll Forward | ' | |||||||||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | |||||||||||||||||||||||
Par balance at beginning of period | $ | (7 | ) | $ | — | |||||||||||||||||||
Par Sterile beginning balance | (278 | ) | — | |||||||||||||||||||||
Additions – charge to expense | (99 | ) | — | |||||||||||||||||||||
Adjustments and/or deductions | 93 | — | ||||||||||||||||||||||
Balance at end of period | $ | (291 | ) | $ | — | |||||||||||||||||||
Schedule of Accounts Affected by the Estimated Provisions | ' | |||||||||||||||||||||||
The following tables summarize the activity for the three months ended March 31, 2014 and for the three months ended March 31, 2013, in the accounts affected by the estimated provisions described below ($ amounts in thousands): | ||||||||||||||||||||||||
Three months ended March 31, 2014 | ||||||||||||||||||||||||
Accounts receivable reserves | Par beginning balance | Par Sterile beginning balance | Provision recorded for current period sales | (Provision) reversal recorded for prior period sales | Credits processed | Ending balance | ||||||||||||||||||
Chargebacks | $ | (48,766 | ) | $ | (5,886 | ) | $ | (189,919 | ) | $ | — | -1 | $ | 186,461 | $ | (58,110 | ) | |||||||
Rebates and incentive programs | (75,321 | ) | (5,489 | ) | (92,684 | ) | — | 89,541 | (83,953 | ) | ||||||||||||||
Returns | (78,181 | ) | (4,398 | ) | (7,112 | ) | — | 5,101 | (84,590 | ) | ||||||||||||||
Cash discounts and other | (37,793 | ) | (1,792 | ) | (55,741 | ) | (1,399 | ) | -3 | 52,239 | (44,486 | ) | ||||||||||||
Total | $ | (240,061 | ) | $ | (17,565 | ) | $ | (345,456 | ) | $ | (1,399 | ) | $ | 333,342 | $ | (271,139 | ) | |||||||
Accrued liabilities (2) | $ | (35,829 | ) | $ | (382 | ) | $ | (16,076 | ) | $ | 1,755 | -4 | $ | 20,020 | $ | (30,512 | ) | |||||||
Three months ended March 31, 2013 | ||||||||||||||||||||||||
Accounts receivable reserves | Beginning balance | Provision recorded for current period sales | (Provision) reversal recorded for prior period sales | Credits processed | Ending balance | |||||||||||||||||||
Chargebacks | $ | (41,670 | ) | $ | (141,317 | ) | $ | — | -1 | $ | 140,680 | $ | (42,307 | ) | ||||||||||
Rebates and incentive programs | (59,426 | ) | (59,780 | ) | — | 61,052 | (58,154 | ) | ||||||||||||||||
Returns | (68,062 | ) | (9,029 | ) | — | 6,007 | (71,084 | ) | ||||||||||||||||
Cash discounts and other | (26,544 | ) | (40,597 | ) | — | 40,695 | (26,446 | ) | ||||||||||||||||
Total | $ | (195,702 | ) | $ | (250,723 | ) | $ | — | $ | 248,434 | $ | (197,991 | ) | |||||||||||
Accrued liabilities (2) | $ | (42,162 | ) | $ | (12,528 | ) | $ | — | $ | 14,835 | $ | (39,855 | ) | |||||||||||
-1 | Unless specific in nature, the amount of provision or reversal of reserves related to prior periods for chargebacks is not determinable on a product or customer specific basis; however, based upon historical analysis and analysis of activity in subsequent periods, we believe that our chargeback estimates remain reasonable. | |||||||||||||||||||||||
-2 | Includes amounts due to indirect customers for which no underlying accounts receivable exists and is principally comprised of Medicaid rebates and rebates due under other U.S. Government pricing programs, such as TriCare and the Department of Veterans Affairs. | |||||||||||||||||||||||
-3 | During the first quarter of 2014, we recorded additional reserves totaling approximately $1.4 million related to prior year claims from customers for various price decreases for the years 2009 through 2012. | |||||||||||||||||||||||
-4 | Based upon additional available information related to Managed Medicaid utilization in California, we reduced our Medicaid accruals for the periods March 2010 through December 2013 by approximately $2.4 million. Our Medicaid accrual represents our best estimate at this time. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventories [Line Items] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials and supplies | $ | 58,045 | $ | 44,403 | |||||
Work-in-process | 22,061 | 9,834 | |||||||
Finished goods | 90,618 | 63,070 | |||||||
$ | 170,724 | $ | 117,307 | ||||||
Schedule of Inventory Write-offs | ' | ||||||||
Inventory write-offs (inclusive of pre-launch inventories detailed below) | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Inventory write-offs | $ | 2,235 | $ | 4,107 | |||||
Pre-Launch Inventories [Member] | ' | ||||||||
Inventories [Line Items] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
The amounts in the table below represent inventories related to products that were not yet available to be sold and are also included in the total inventory balances presented above. | |||||||||
Pre-Launch Inventories | |||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials and supplies | $ | 10,104 | $ | 6,308 | |||||
Work-in-process | 3,149 | 93 | |||||||
Finished goods | 1,731 | 118 | |||||||
$ | 14,984 | $ | 6,519 | ||||||
Schedule of Inventory Write-offs | ' | ||||||||
Write-offs of pre-launch inventories | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Pre-launch inventory write-offs, net of partner allocation | $ | 493 | $ | 689 | |||||
Property_Plant_and_Equipment_n1
Property, Plant and Equipment, net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of Property, Plant and Equipment, Net | ' | ||||||||
($ amounts in thousands) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 9,550 | $ | 4,553 | |||||
Buildings | 63,845 | 29,491 | |||||||
Machinery and equipment | 81,422 | 58,556 | |||||||
Office equipment, furniture and fixtures | 7,847 | 5,433 | |||||||
Computer software and hardware | 24,610 | 21,582 | |||||||
Leasehold improvements | 26,028 | 25,828 | |||||||
Construction in progress | 30,055 | 12,286 | |||||||
243,357 | 157,729 | ||||||||
Accumulated depreciation and amortization | (36,927 | ) | (30,453 | ) | |||||
$ | 206,430 | $ | 127,276 | ||||||
Schedule of Depreciation and Amortization Expense Related to Property, Plant and Equipment | ' | ||||||||
Depreciation and amortization expense related to property, plant and equipment | |||||||||
($ amounts in thousands) | |||||||||
Three months ended | |||||||||
31-Mar-14 | 31-Mar-13 | ||||||||
Depreciation and amortization expense | $ | 6,543 | $ | 5,888 | |||||
Intangible_Assets_net_Tables
Intangible Assets, net (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||||||||||||||||||
Schedule of Intangible Assets, net | ' | |||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
Cost | Amortization | Net | Cost | Amortization | Net | |||||||||||||||||||
Developed products | $ | 511,752 | $ | (181,516 | ) | $ | 330,236 | $ | 530,759 | $ | (155,744 | ) | $ | 375,015 | ||||||||||
Other product related royalty streams | 115,600 | (25,853 | ) | 89,747 | 115,600 | (22,709 | ) | 92,891 | ||||||||||||||||
IPR&D | 293,400 | — | 293,400 | 293,400 | — | 293,400 | ||||||||||||||||||
Subsequently Developed IPR&D | 262,553 | (35,536 | ) | 227,017 | 262,553 | (25,331 | ) | 237,222 | ||||||||||||||||
Par trade name | 26,400 | — | 26,400 | 26,400 | — | 26,400 | ||||||||||||||||||
Watson/Actavis Divestiture Products | 62,544 | (26,021 | ) | 36,523 | 85,295 | (23,143 | ) | 62,152 | ||||||||||||||||
Watson/Actavis related IPR&D | 4,700 | — | 4,700 | 4,700 | — | 4,700 | ||||||||||||||||||
Developed products - JHP | 198,600 | (1,958 | ) | 196,642 | — | — | — | |||||||||||||||||
IPR&D - JHP | 90,999 | — | 90,999 | — | — | — | ||||||||||||||||||
JHP trade name | 700 | (13 | ) | 687 | — | — | — | |||||||||||||||||
Other | 1,000 | (264 | ) | 736 | 1,000 | (132 | ) | 868 | ||||||||||||||||
$ | 1,568,248 | $ | (271,161 | ) | $ | 1,297,087 | $ | 1,319,707 | $ | (227,059 | ) | $ | 1,092,648 | |||||||||||
Schedule of Future Amortization Expense | ' | |||||||||||||||||||||||
The following table assumes the intangible asset related to the Par trade name as an indefinite-lived asset that will not be amortized in the future. | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||
Expense | ||||||||||||||||||||||||
Remainder of 2014 | $ | 147,428 | ||||||||||||||||||||||
2015 | 174,089 | |||||||||||||||||||||||
2016 | 178,711 | |||||||||||||||||||||||
2017 | 206,612 | |||||||||||||||||||||||
2018 | 171,042 | |||||||||||||||||||||||
2019 and thereafter | 392,805 | |||||||||||||||||||||||
$ | 1,270,687 | |||||||||||||||||||||||
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill Disclosure [Abstract] | ' | |||||||
Schedule of Goodwill | ' | |||||||
($ amounts in thousands) | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Balance at beginning of period | $ | 849,652 | $ | 850,652 | ||||
Additions: | ||||||||
JHP Acquisition (1) | 152,687 | — | ||||||
Deductions: | ||||||||
Finalization of purchase accounting (2) | — | (1,000 | ) | |||||
Balance at end of period | $ | 1,002,339 | $ | 849,652 | ||||
(1) As noted in Note 3, “JHP Acquisition,” we acquired JHP as of February 20, 2014. Based upon our purchase price allocation, we recorded $152,687 thousand of incremental goodwill. This goodwill was allocated to Par. | ||||||||
(2) As noted in Note 2, “Sky Growth Merger,” we were acquired through the Merger. Based upon purchase price allocation in accordance with ASC 350-20-35-30, we recorded goodwill, which was allocated to Par. |
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Components of Income Tax Expense (Benefit) | ' | ||||||||
($ in thousands) | |||||||||
Three months ended | |||||||||
March 31, 2014 | 31-Mar-13 | ||||||||
Benefit for income taxes | $ | (24,232 | ) | $ | (7,979 | ) | |||
Effective tax rate | 38 | % | 35 | % |
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Debt | ' | |||||||
($ amounts in thousands) | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Senior credit facilities: | ||||||||
Senior secured term loan | $ | 1,441,678 | $ | 1,055,340 | ||||
Senior secured revolving credit facility | — | — | ||||||
7.375% senior notes | 490,000 | 490,000 | ||||||
1,931,678 | 1,545,340 | |||||||
Less unamortized debt discount to senior secured term loan | (8,444 | ) | (7,821 | ) | ||||
Less current portion | (9,467 | ) | (21,462 | ) | ||||
Long-term debt | $ | 1,913,767 | $ | 1,516,057 | ||||
Schedule of Debt Maturities | ' | |||||||
Debt Maturities as of March 31, 2014 | ||||||||
Debt Maturities as of March 31, 2014 | ($ amounts in thousands) | |||||||
Remainder of 2014 | $ | 5,841 | ||||||
2015 | 14,503 | |||||||
2016 | 14,503 | |||||||
2017 | 14,503 | |||||||
2018 | 14,503 | |||||||
2019 | 1,377,825 | |||||||
2020 | 490,000 | |||||||
Total debt at March 31, 2014 | $ | 1,931,678 | ||||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | ' | |||||||||||||||||||||||
March 31, | Quoted Prices | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||||||||||
Description | 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||
Derivatives | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||
Derivatives | $ | (2,090 | ) | $ | — | $ | (2,090 | ) | $ | — | ||||||||||||||
$ | (2,090 | ) | $ | — | $ | (2,090 | ) | $ | — | |||||||||||||||
The following table summarizes the fair value and presentation in our condensed consolidated balance sheets for derivative instruments as of March 31, 2014 and December 31, 2013: | ||||||||||||||||||||||||
($ amounts in thousands) | ||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | March 31, 2014 | December 31, 2013 | |||||||||||||||||||||
Balance Sheet Location | Fair Value | Fair Value | Balance Sheet Location | Fair Value | Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments under ASC 815 | ||||||||||||||||||||||||
Interest rate cap contracts | $ | — | $ | — | Accrued expenses and other current liabilities | $ | (4,005 | ) | (4,002 | ) | ||||||||||||||
Interest rate cap contracts | — | — | Other Assets | 1,915 | 2,813 | |||||||||||||||||||
Total derivatives designated as hedging instruments under ASC 815 | $ | — | $ | — | $ | (2,090 | ) | $ | (1,189 | ) | ||||||||||||||
Total derivatives | $ | — | $ | — | $ | (2,090 | ) | $ | (1,189 | ) | ||||||||||||||
Offsetting Liabilities | ' | |||||||||||||||||||||||
Offsetting of Derivative Liabilities | ||||||||||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||
Description | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Liabilities Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Pledged | Net Amount | ||||||||||||||||||
Derivatives by counterparty | ||||||||||||||||||||||||
Counterparty 1 | $ | (2,090 | ) | $ | (1,915 | ) | $ | (4,005 | ) | $ | 1,915 | $ | — | $ | (2,090 | ) | ||||||||
Total | $ | (2,090 | ) | $ | (1,915 | ) | $ | (4,005 | ) | $ | 1,915 | $ | — | $ | (2,090 | ) | ||||||||
Offsetting Assets | ' | |||||||||||||||||||||||
Offsetting of Derivative Assets | ||||||||||||||||||||||||
As of March 31, 2014 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||
Description | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Pledged | Net Amount | ||||||||||||||||||
Derivatives by counterparty | ||||||||||||||||||||||||
Counterparty 1 | $ | — | $ | 1,915 | $ | 1,915 | $ | (1,915 | ) | $ | — | $ | — | |||||||||||
Total | $ | — | $ | 1,915 | $ | 1,915 | $ | (1,915 | ) | $ | — | $ | — | |||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||||||
Other Comprehensive Income (Loss) Rollforward: | Amount | |||||||||||||||||||||||
($ thousands) | ||||||||||||||||||||||||
Beginning Balance Gain/(Loss) (Pre-tax) as of | December 31, 2013 | $ | (1,189 | ) | ||||||||||||||||||||
Amount Recognized in Other Comprehensive Income (Loss) on Derivative (Pre-tax) | (1,893 | ) | ||||||||||||||||||||||
Amount Reclassified from Other Comprehensive Income (Loss) into Income (Loss) (Pre-tax) | 992 | |||||||||||||||||||||||
Ending Balance Gain/(Loss) (Pre-tax) as of | March 31, 2014 | $ | (2,090 | ) | ||||||||||||||||||||
Derivative Instruments, Gain (Loss) | ' | |||||||||||||||||||||||
The Effect of Derivative Instruments on the Statement of Financial Performance | ||||||||||||||||||||||||
For the Three Months Ended March 31, 2014 | ||||||||||||||||||||||||
Derivatives in ASC 815 Cash Flow Hedging Relationships | Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivative | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss) (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Loss) | Location of Gain or (Loss) Recognized in Income (Loss) on Derivative (Ineffective Portion ) | Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion ) | |||||||||||||||||||
(Effective Portion) | (Effective Portion) | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Interest rate cap contracts | $ | (1,893 | ) | $ | — | Interest Expense | $ | (992 | ) | $ | — | Interest Expense | $ | — | $ | — | ||||||||
Total | $ | (1,893 | ) | $ | — | $ | (992 | ) | $ | — | $ | — | $ | — | ||||||||||
Changes_in_Stockholders_Equity1
Changes in Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Schedule of Stockholders Equity | ' | ||||||||||||||
Changes in our Common Stock, Additional Paid-In Capital and Accumulated Other Comprehensive Income accounts during the three-month period ended March 31, 2014 were as follows (share amounts and $ amounts in thousands): | |||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | |||||||||||||
Shares | Amount | ||||||||||||||
Balance, December 31, 2013 | — | $ | — | $ | 686,577 | $ | (799 | ) | |||||||
Unrealized loss on available for sale securities, net of tax | — | — | — | (6 | ) | ||||||||||
Unrealized loss on cash flow hedges, net of tax | — | — | — | (1,212 | ) | ||||||||||
Less: reclassification adjustment for net losses included in net income, net of tax | — | — | — | 635 | |||||||||||
Compensatory arrangements | — | — | 942 | — | |||||||||||
Capital contribution from Holdings | 110,000 | ||||||||||||||
Other | — | — | — | — | |||||||||||
Balance, March 31, 2014 | — | $ | — | $ | 797,519 | $ | (1,382 | ) | |||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Options Weighted Average Grant Date Fair Value | ' | ||||||||||||
A summary of the calculated estimated grant date fair value per option is as follows: | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
Fair value of stock options | 2014 | 2013 | |||||||||||
TRANCHE 1 | $0.67 | $0.67 | |||||||||||
TRANCHE 2 without market condition | $0.68 | $0.68 | |||||||||||
TRANCHE 2 with market condition | $0.76 | $0.76 | |||||||||||
Schedule of Stock Option Activity | ' | ||||||||||||
The following is a summary of our stock option activity (shares in thousands): | |||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
TRANCHE 1 | |||||||||||||
Balance at December 31, 2013 | 21,830 | $1.00 | |||||||||||
Granted | 625 | 1.4 | |||||||||||
Exercised | — | 1 | |||||||||||
Forfeited | (200 | ) | 1 | ||||||||||
Balance at March 31, 2014 | 22,255 | $1.01 | 8.5 | $ | 8,902 | ||||||||
Exercisable at March 31, 2014 | 4,366 | $1.00 | 8.5 | $ | 1,746 | ||||||||
Vested and expected to vest at March 31, 2014 | 21,512 | $1.01 | 8.5 | $ | 8,605 | ||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
TRANCHE 2 | |||||||||||||
Balance at December 31, 2013 | 21,330 | $1.00 | |||||||||||
Granted | 625 | 1.4 | |||||||||||
Exercised | — | 1 | |||||||||||
Forfeited | (200 | ) | 1 | ||||||||||
Balance at March 31, 2014 | 21,755 | $1.01 | 8.5 | $ | 8,702 | ||||||||
Exercisable at March 31, 2014 | 4,266 | $1.00 | 8.5 | $ | 1,706 | ||||||||
Vested and expected to vest at March 31, 2014 | 21,012 | $1.01 | 8.5 | $ | 8,405 | ||||||||
Schedule of Restricted Stock Unit Activity | ' | ||||||||||||
The following is a summary of our RSU activity for the three-month period ended March 31, 2014 (shares and aggregate intrinsic value in thousands): | |||||||||||||
Shares | Weighted Average Grant Price | Aggregate Intrinsic Value | |||||||||||
Balance at December 31, 2013 | 375 | $1.00 | |||||||||||
Granted | — | 1 | |||||||||||
Vested | — | 1 | |||||||||||
Forfeited | — | 1 | |||||||||||
Non-vested restricted stock unit balance at March 31, 2014 | 375 | $1.00 | $ | 525 | |||||||||
Stock Options [Member] | ' | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Allocation of Share-Based Compensation Cost | ' | ||||||||||||
Set forth below is the impact on our results of operations of recording share-based compensation from stock options ($ amounts in thousands): | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Cost of goods sold | $ | 89 | $ | 223 | |||||||||
Selling, general and administrative | 830 | 2,011 | |||||||||||
Total, pre-tax | $ | 919 | $ | 2,234 | |||||||||
Tax effect of share-based compensation | (340 | ) | (827 | ) | |||||||||
Total, net of tax | $ | 579 | $ | 1,407 | |||||||||
Rollover Stock Options [Member] | ' | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Stock Option Activity | ' | ||||||||||||
The following is a summary of our Rollover Stock Options activity (shares and aggregate intrinsic value in thousands): | |||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Life | Aggregate Intrinsic Value | ||||||||||
Balance at December 31, 2013 | 17,351 | $0.25 | |||||||||||
Granted | — | 0.25 | |||||||||||
Exercised | — | 0.25 | |||||||||||
Forfeited | — | 0.25 | |||||||||||
Balance at March 31, 2014 | 17,351 | $0.25 | 3.6 | $ | 19,954 | ||||||||
Exercisable at March 31, 2014 | 17,351 | $0.25 | 3.6 | $ | 19,954 | ||||||||
Restricted Stock Units (RSUs) [Member] | ' | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||
Schedule of Allocation of Share-Based Compensation Cost | ' | ||||||||||||
Set forth below is the impact on our results of operations of recording share-based compensation from RSUs for the three-month period ended March 31, 2014 and 2013 ($ amounts in thousands): | |||||||||||||
Three months ended | Three months ended | ||||||||||||
March 31, | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Cost of goods sold | $ | — | $ | 3 | |||||||||
Selling, general and administrative | 23 | 31 | |||||||||||
Total, pre-tax | $ | 23 | $ | 34 | |||||||||
Tax effect of stock-based compensation | (9 | ) | (13 | ) | |||||||||
Total, net of tax | $ | 14 | $ | 21 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Schedule of Financial Data for Business Segments | ' | |||||||
The financial data for the two business segments are as follows ($ amounts in thousands): | ||||||||
Three months ended | ||||||||
March 31, 2014 | 31-Mar-13 | |||||||
Revenues: | ||||||||
Par Pharmaceutical | $ | 273,806 | $ | 272,800 | ||||
Strativa | 15,278 | 17,396 | ||||||
Total revenues | $ | 289,084 | $ | 290,196 | ||||
Gross margin: | ||||||||
Par Pharmaceutical | $ | 83,644 | $ | 59,685 | ||||
Strativa | 10,670 | 11,759 | ||||||
Total gross margin | $ | 94,314 | $ | 71,444 | ||||
Operating (loss) income: | ||||||||
Par Pharmaceutical | $ | (23,260 | ) | $ | 9,523 | |||
Strativa | (10,895 | ) | (914 | ) | ||||
Total operating (loss) income | $ | (34,155 | ) | $ | 8,609 | |||
Interest income | 14 | 37 | ||||||
Interest expense | (25,467 | ) | (24,036 | ) | ||||
Loss on debt extinguishment | (3,989 | ) | (7,335 | ) | ||||
Benefit for income taxes | (24,232 | ) | (7,979 | ) | ||||
Net loss | $ | (39,365 | ) | $ | (14,746 | ) | ||
Schedule of Total Revenues of Top Selling Products | ' | |||||||
Total revenues of our top selling products were as follows ($ amounts in thousands): | ||||||||
Three months ended | ||||||||
31-Mar-14 | 31-Mar-13 | |||||||
Product | ||||||||
Par Pharmaceutical | ||||||||
Budesonide (Entocort® EC) | $ | 37,349 | $ | 50,403 | ||||
Propafenone (Rythmol SR®) | 21,112 | 17,159 | ||||||
Divalproex (Depakote®) | 20,405 | 1,426 | ||||||
Bupropion ER (Wellbutrin) | 16,342 | 8,253 | ||||||
Metoprolol succinate ER (Toprol-XL®) | 14,117 | 19,401 | ||||||
Other (1) | 145,631 | 98,402 | ||||||
Other product related revenues (2) | 5,439 | 6,779 | ||||||
Total Par Pharmaceutical Revenues | $ | 273,806 | $ | 272,800 | ||||
Strativa | ||||||||
Megace® ES | $ | 8,154 | $ | 10,536 | ||||
Nascobal® Nasal Spray | 6,324 | 6,202 | ||||||
Other | (12 | ) | (241 | ) | ||||
Other product related revenues (2) | 812 | 899 | ||||||
Total Strativa Revenues | $ | 15,278 | $ | 17,396 | ||||
-1 | The further detailing of revenues of the other approximately 80 generic drugs was not considered significant to the overall disclosure due to the lower volume of revenues associated with each of these generic products. No single product in the other category was significant to total generic revenues for the three-month periods ended March 31, 2014 and 2013. | |||||||
-2 | Other product related revenues represents licensing and royalty related revenues from profit sharing agreements. |
Restructuring_Tables
Restructuring (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||||||||||
Schedule of Restructuring Costs | ' | ||||||||||||||||||||
($ amounts in thousands) | |||||||||||||||||||||
Restructuring Activities (JHP) | Initial Charge | Cash Payments | Non-Cash Charge Related to Inventory and/or Intangible Assets | Reversals, Reclass or Transfers | Liabilities at March 31, 2014 | ||||||||||||||||
Severance and employee benefits to be paid in cash | $ | 1,146 | $ | — | $ | — | $ | — | $ | 1,146 | |||||||||||
Total restructuring costs line item | $ | 1,146 | $ | 0 | $ | 0 | $ | 0 | $ | 1,146 | |||||||||||
2013 | |||||||||||||||||||||
In January 2013, we initiated a restructuring of Strativa, our branded pharmaceuticals division, in anticipation of entering into a settlement agreement and corporate integrity agreement that terminated the U.S. Department of Justice’s ongoing investigation of Strativa’s marketing of Megace® ES. We reduced our Strativa workforce by approximately 70 people, with the majority of the reductions in the sales force. The remaining Strativa sales force has been reorganized into a single sales team of approximately 60 professionals that focus their marketing efforts principally on Nascobal® Nasal Spray. In connection with these actions, we incurred expenses for severance and other employee-related costs as well as the termination of certain contracts. There were no remaining liabilities at March 31, 2014 on the condensed consolidated balance sheet. | |||||||||||||||||||||
($ amounts in thousands) | |||||||||||||||||||||
Restructuring Activities (Strativa) | Initial Charge | Cash Payments | Non-Cash Charge Related to Inventory and/or Intangible Assets | Reversals, Reclass or Transfers | Liabilities at March 31, 2014 | ||||||||||||||||
Severance and employee benefits to be paid in cash | $ | 1,413 | $ | (1,409 | ) | $ | — | $ | (4 | ) | $ | — | |||||||||
Asset impairments and other | 403 | — | (403 | ) | — | — | |||||||||||||||
Total restructuring costs line item | $ | 1,816 | $ | (1,409 | ) | $ | (403 | ) | $ | (4 | ) | $ | 0 | ||||||||
Sky_Growth_Merger_Narrative_De
Sky Growth Merger (Narrative) (Details) (Sky Growth Merger [Member], USD $) | Sep. 28, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 |
Manager [Member] | Manager [Member] | Manager [Member] | ||
Selling, General and Administrative Expenses [Member] | Selling, General and Administrative Expenses [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Acquired ownership percentage (percent) | 100.00% | ' | ' | ' |
Management services expenses, percentage of EBITDA (percent) | ' | 1.00% | ' | ' |
Management services expenses, maximum annual expenses | ' | $4,000,000 | ' | ' |
Management services expenses | ' | ' | $935,000 | $861,000 |
JHP_Acquisition_Narrative_Deta
JHP Acquisition Narrative (Details) (JHP Group Holdings [Member], USD $) | 0 Months Ended | 1 Months Ended |
Feb. 20, 2014 | Mar. 31, 2014 | |
product | ||
Business Acquisition [Line Items] | ' | ' |
Cash purchase of equity | $488,000,000 | ' |
Sponsor equity contribution | 110,000,000 | ' |
Number of specialty injectable products acquired | 14 | ' |
Number of products acquired | 30 | ' |
Number of products acquired with regulatory approval | 17 | ' |
Total revenues | ' | 14,000,000 |
Transaction costs | 12,350,000 | 12,350,000 |
Investment bank fees | ' | 10,388,000 |
Legal fees | ' | 1,505,000 |
Other fees | ' | 457,000 |
Goodwill will be deductible for income tax purposes | ' | 20,000,000 |
Intangible assets | 290,299,000 | ' |
Inventories | 35,418,000 | ' |
Scenario, Adjustment [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Intangible assets | 199,300,000 | ' |
Inventories | 10,748,000 | ' |
Other Assets [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Transaction costs | ' | 4,137,000 |
Selling, General and Administrative Expenses [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Transaction costs | ' | 8,213,000 |
Senior Secured Term Loan [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Senior secured term loan | $395,000,000 | ' |
JHP_Acquisition_Source_and_Use
JHP Acquisition - Source and Use of Funds (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Feb. 20, 2014 | Mar. 31, 2014 | Feb. 20, 2014 |
JHP Group Holdings [Member] | JHP Group Holdings [Member] | Senior Secured Term Loan [Member] | |||||
JHP Group Holdings [Member] | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Senior secured term loan | ' | ' | ' | ' | ' | ' | $395,000,000 |
Sponsor equity contribution | ' | ' | ' | ' | 110,000,000 | ' | ' |
Company cash on hand | 220,560,000 | 130,080,000 | 40,160,000 | 36,794,000 | 1,633,000 | ' | ' |
Cash purchase of equity | ' | ' | ' | ' | 487,929,000 | ' | ' |
Transaction costs | ' | ' | ' | ' | 12,350,000 | 12,350,000 | ' |
Accrued interest on Company debt | ' | ' | ' | ' | 6,354,000 | ' | ' |
Total source and use of funds | ' | ' | ' | ' | $506,633,000 | ' | ' |
JHP_Acquisition_Fair_Value_of_
JHP Acquisition - Fair Value of Assets and Liabilities Acquired (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 20, 2014 |
In Thousands, unless otherwise specified | JHP Group Holdings [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | $9,278 |
Accounts receivable, net | ' | ' | ' | 6,244 |
Inventories | ' | ' | ' | 35,418 |
Prepaid expenses and other current assets | ' | ' | ' | 1,797 |
Property, plant and equipment | ' | ' | ' | 73,939 |
Intangible assets | ' | ' | ' | 290,299 |
Other long-term assets, net | ' | ' | ' | 2,658 |
Total identifiable assets | ' | ' | ' | 419,633 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ' | ' | ' | ' |
Accounts payable | ' | ' | ' | 13,716 |
Accrued expenses and other current liabilities | ' | ' | ' | 2,496 |
Deferred tax liabilities | ' | ' | ' | 67,425 |
Other long-term liabilities | ' | ' | ' | 754 |
Total liabilities assumed | ' | ' | ' | 84,391 |
Net identifiable assets acquired | ' | ' | ' | 335,242 |
Goodwill | 1,002,339 | 849,652 | 850,652 | 152,687 |
Net assets acquired | ' | ' | ' | $487,929 |
JHP_Acquisition_Pro_Forma_Deta
JHP Acquisition - Pro Forma (Details) (JHP Group Holdings [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
JHP Group Holdings [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Total revenues | $308,146 | $328,768 |
Loss from continuing operations | ($29,476) | ($32,502) |
Acquisition_of_Divested_Produc1
Acquisition of Divested Products from the Watson/Actavis Merger (Narrative) (Details) (Watson/Actavis Divestiture Products [Member], USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Nov. 06, 2012 |
product | |
drug_application | |
Watson/Actavis Divestiture Products [Member] | ' |
Business Acquisition [Line Items] | ' |
Number of generic products with marketing rights acquired through merger (products) | 5 |
Number of abbreviated new drug applications awaiting regulatory approval (drug applications) | 8 |
Purchase price | $110,000 |
Supply agreement term (years) | '3 years |
Edict_Acquisition_Consideratio
Edict Acquisition (Consideration Transferred) (Details) (Edict Acquisition [Member], USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Feb. 17, 2012 | |
Edict Acquisition [Member] | ' | |
Business Acquisition [Line Items] | ' | |
Cash purchase of equity | $20,659 | |
Contingent purchase price liabilities | 11,641 | [1] |
Cash paid for assumed indebtedness | 4,300 | |
Total purchase price | $36,600 | |
Contingent liability, payment period (years) | '18 months | |
[1] | Contingent purchase price liabilities represent subsequent milestone payments related to successful FDA inspection of the Par Formulations manufacturing facility and ANDA filings. All contingent purchase price liabilities were paid in full within 18 months of the acquisition date. |
Pending_Acquisition_of_NuRay_N
Pending Acquisition of NuRay (Narrative) (Details) (NuRay [Member], USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Nov. 01, 2013 |
NuRay [Member] | ' |
Business Acquisition [Line Items] | ' |
Purchase price | $19,000 |
Available_for_Sale_Marketable_2
Available for Sale Marketable Debt Securities (Summary Amortized Cost and Estimated Fair Value) (Details) (Corporate Bonds [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Corporate Bonds [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Cost | $2,508 | $3,522 |
Unrealized Gain | 9 | 19 |
Unrealized (Loss) | 0 | 0 |
Estimated Fair Value | $2,517 | $3,541 |
Available_for_Sale_Marketable_3
Available for Sale Marketable Debt Securities (Summary of Contractual Maturities) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Cost | ' | ' |
Less than one year | $2,508 | ' |
Total | 2,508 | ' |
Estimated Fair Value | ' | ' |
Less than one year | 2,517 | ' |
Total | $2,517 | $3,541 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value of Assets and Liabilities Measured on Recurring Basis) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt interest rate (percent) | 7.38% | 7.38% |
Recurring [Member] | Estimate of Fair Value Measurement [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Corporate bonds (Note 6) | 2,517 | 3,541 |
Cash equivalents | 123,784 | 66,782 |
Recurring [Member] | Estimate of Fair Value Measurement [Member] | Term Loan [Member] | 7 Year Senior Secured Term Loan Facility [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 1,447,084 | 1,063,255 |
Recurring [Member] | Estimate of Fair Value Measurement [Member] | Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 529,200 | 507,150 |
Derivative instruments - Interest rate caps (Note 16) | 2,090 | 1,189 |
Recurring [Member] | Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Corporate bonds (Note 6) | 0 | 0 |
Cash equivalents | 123,784 | 66,782 |
Recurring [Member] | Level 1 [Member] | Term Loan [Member] | 7 Year Senior Secured Term Loan Facility [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 0 | 0 |
Derivative instruments - Interest rate caps (Note 16) | 0 | 0 |
Recurring [Member] | Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Corporate bonds (Note 6) | 2,517 | 3,541 |
Cash equivalents | 0 | 0 |
Recurring [Member] | Level 2 [Member] | Term Loan [Member] | 7 Year Senior Secured Term Loan Facility [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 1,447,084 | 1,063,255 |
Recurring [Member] | Level 2 [Member] | Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 529,200 | 507,150 |
Derivative instruments - Interest rate caps (Note 16) | 2,090 | 1,189 |
Recurring [Member] | Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Corporate bonds (Note 6) | 0 | 0 |
Cash equivalents | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Term Loan [Member] | 7 Year Senior Secured Term Loan Facility [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Debt | 0 | 0 |
Derivative instruments - Interest rate caps (Note 16) | 0 | 0 |
Fair_Value_Measurements_Narrat
Fair Value Measurements (Narrative) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
product | ||
Fair Value Disclosures [Abstract] | ' | ' |
Intangible asset impairment | $41,758 | $0 |
Number of products impaired not expected to achieve forecasted operating results | 2 | ' |
Accounts_Receivable_Narrative_
Accounts Receivable (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Duration prior to product expiration that returns will be accepted | '6 months |
Duration following product expiration that returns will be accepted | '12 months |
Percentage of cash discounts to customers (percent) | 2.00% |
Minimum [Member] | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Average shelf life of products sold | '12 months |
Invoice period for customers to avail cash discount, days | '30 days |
Process period for accounts receivable reserves and allowances, except for product returns allowance, in months | '2 months |
Maximum [Member] | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Average shelf life of products sold | '48 months |
Invoice period for customers to avail cash discount, days | '90 days |
Process period for accounts receivable reserves and allowances, except for product returns allowance, in months | '4 months |
Accounts_Receivable_Schedule_o
Accounts Receivable (Schedule of Accounts Receivable) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Gross trade accounts receivable | $365,435 | $383,347 | ' | ' |
Deductions from trade accounts receivable | -271,139 | -240,061 | -197,991 | 195,702 |
Allowance for doubtful accounts | -291 | -7 | 0 | 0 |
Accounts receivable, net | 94,005 | 143,279 | ' | ' |
Chargebacks [Member] | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Deductions from trade accounts receivable | -58,110 | -48,766 | -42,307 | 41,670 |
Rebates and incentive programs [Member] | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Deductions from trade accounts receivable | -83,953 | -75,321 | -58,154 | 59,426 |
Returns [Member] | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Deductions from trade accounts receivable | -84,590 | -78,181 | -71,084 | 68,062 |
Cash discounts and other [Member] | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Deductions from trade accounts receivable | ($44,486) | ($37,793) | ($26,446) | $26,544 |
Accounts_Receivable_Schedule_o1
Accounts Receivable (Schedule of Allowance for Doubtful Accounts Roll Forward) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Par Sterile [Member] | Par Sterile [Member] | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ' | ' | ' | ' |
Balance at beginning of period | ($7) | $0 | ($278) | $0 |
Additions – charge to expense | -99 | 0 | ' | ' |
Adjustments and/or deductions | 93 | 0 | ' | ' |
Balance at end of period | ($291) | $0 | ($278) | $0 |
Accounts_Receivable_Schedule_o2
Accounts Receivable (Schedule of Accounts Affected by the Estimated Provisions) (Details) (USD $) | 3 Months Ended | 48 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Beginning balance | ($240,061,000) | $195,702,000 | ' | |||
Provision recorded for current period sales | -345,456,000 | -250,723,000 | ' | |||
(Provision) reversal recorded for prior period sales | -1,399,000 | 0 | ' | |||
Credits processed | 333,342,000 | 248,434,000 | ' | |||
Ending balance | -271,139,000 | -197,991,000 | -240,061,000 | |||
Accrued Liabilities [Roll Forward] | ' | ' | ' | |||
Beginning balance | -35,829,000 | [1] | 42,162,000 | [1] | ' | |
Provision recorded for current period sales | -16,076,000 | [1] | -12,528,000 | [1] | ' | |
(Provision) reversal recorded for prior period sales | 1,755,000 | [1],[2] | 0 | [1] | ' | |
Credits processed | 20,020,000 | [1] | 14,835,000 | [1] | ' | |
Ending balance | -30,512,000 | [1] | -39,855,000 | [1] | -35,829,000 | [1] |
Decease in Medicaid accrual | ' | ' | -2,400,000 | |||
Par Sterile [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | -17,565,000 | |||
Accrued Liabilities [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | -382,000 | [1] | ||
Chargebacks [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Beginning balance | -48,766,000 | 41,670,000 | ' | |||
Provision recorded for current period sales | -189,919,000 | -141,317,000 | ' | |||
(Provision) reversal recorded for prior period sales | 0 | [3] | 0 | [3] | ' | |
Credits processed | 186,461,000 | 140,680,000 | ' | |||
Ending balance | -58,110,000 | -42,307,000 | ' | |||
Chargebacks [Member] | Par Sterile [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | -5,886,000 | |||
Rebates and incentive programs [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Beginning balance | -75,321,000 | 59,426,000 | ' | |||
Provision recorded for current period sales | -92,684,000 | -59,780,000 | ' | |||
(Provision) reversal recorded for prior period sales | 0 | 0 | ' | |||
Credits processed | 89,541,000 | 61,052,000 | ' | |||
Ending balance | -83,953,000 | -58,154,000 | ' | |||
Rebates and incentive programs [Member] | Par Sterile [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | -5,489,000 | |||
Returns [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Beginning balance | -78,181,000 | 68,062,000 | ' | |||
Provision recorded for current period sales | -7,112,000 | -9,029,000 | ' | |||
(Provision) reversal recorded for prior period sales | 0 | 0 | ' | |||
Credits processed | 5,101,000 | 6,007,000 | ' | |||
Ending balance | -84,590,000 | -71,084,000 | ' | |||
Returns [Member] | Par Sterile [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | -4,398,000 | |||
Cash discounts and other [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Beginning balance | -37,793,000 | 26,544,000 | ' | |||
Provision recorded for current period sales | -55,741,000 | -40,597,000 | ' | |||
(Provision) reversal recorded for prior period sales | -1,399,000 | [4] | 0 | ' | ||
Credits processed | 52,239,000 | 40,695,000 | ' | |||
Ending balance | -44,486,000 | -26,446,000 | ' | |||
Cash discounts and other [Member] | Par Sterile [Member] | ' | ' | ' | |||
Accounts Receivable Reserves [Roll Forward] | ' | ' | ' | |||
Ending balance | ' | ' | ($1,792,000) | |||
[1] | Includes amounts due to indirect customers for which no underlying accounts receivable exists and is principally comprised of Medicaid rebates and rebates due under other U.S. Government pricing programs, such as TriCare and the Department of Veterans Affairs. | |||||
[2] | $2.4 million. Our Medicaid accrual represents our best estimate at this time. | |||||
[3] | Unless specific in nature, the amount of provision or reversal of reserves related to prior periods for chargebacks is not determinable on a product or customer specific basis; however, based upon historical analysis and analysis of activity in subsequent periods, we believe that our chargeback estimates remain reasonable. | |||||
[4] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjBiNmU0NmVkN2U0YzRkN2E4NWY5YzJlMGM0ZWIzOGQ0fFRleHRTZWxlY3Rpb246QTRGNkNBMkZDNzhCNTFGQjJFNEYzRDY5MDJBOTVEQkUM} |
Inventories_Schedule_of_Invent
Inventories (Schedule of Inventories) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories [Line Items] | ' | ' |
Raw materials and supplies | $58,045 | $44,403 |
Work-in-process | 22,061 | 9,834 |
Finished goods | 90,618 | 63,070 |
Total inventories | 170,724 | 117,307 |
Generic Products Not Yet Available to be Sold [Member] | ' | ' |
Inventories [Line Items] | ' | ' |
Total inventories | 13,000 | ' |
Generic Products Not Yet Available to be Sold [Member] | Strativa [Member] | ' | ' |
Inventories [Line Items] | ' | ' |
Total inventories | 2,000 | ' |
Pre-Launch Inventories [Member] | ' | ' |
Inventories [Line Items] | ' | ' |
Raw materials and supplies | 10,104 | 6,308 |
Work-in-process | 3,149 | 93 |
Finished goods | 1,731 | 118 |
Total inventories | $14,984 | $6,519 |
Inventories_Schedule_of_Invent1
Inventories (Schedule of Inventory Write-offs) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Inventories [Line Items] | ' | ' |
Inventory write-offs | $2,235 | $4,107 |
Pre-Launch Inventories [Member] | ' | ' |
Inventories [Line Items] | ' | ' |
Inventory write-offs | $493 | $689 |
Property_Plant_and_Equipment_n2
Property, Plant and Equipment, net (Schedule of Property, Plant and Equipment, net) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $243,357 | $157,729 |
Accumulated depreciation and amortization | -36,927 | -30,453 |
Property, plant and equipment, net | 206,430 | 127,276 |
Land [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 9,550 | 4,553 |
Buildings [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 63,845 | 29,491 |
Machinery and equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 81,422 | 58,556 |
Office equipment, furniture and fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 7,847 | 5,433 |
Computer software and hardware [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 24,610 | 21,582 |
Leasehold improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 26,028 | 25,828 |
Construction in progress [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $30,055 | $12,286 |
Property_Plant_and_Equipment_n3
Property, Plant and Equipment, net (Schedule of Depreciation and Amortization Expense Related to Property, Plant and Equipment) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation and amortization expense | $6,543 | $5,888 |
Intangible_Assets_net_Narrativ
Intangible Assets, net (Narrative) (Details) (USD $) | 3 Months Ended | 3 Months Ended | |||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Nov. 06, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
product | Sky Growth Merger [Member] | Sky Growth Merger [Member] | Watson/Actavis Divestiture Products [Member] | Watson/Actavis Divestiture Products [Member] | JHP Group Holdings [Member] | JHP Group Holdings [Member] | JHP Group Holdings [Member] | ||
Developed products [Member] | Subsequently Developed In Process Research and Development [Member] | product | annual_IPRD_group | Developed products [Member] | Trade Names [Member] | ||||
drug_application | |||||||||
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense related to intangible assets | $44,102 | $40,071 | ' | ' | ' | ' | ' | ' | ' |
Weighted average amortization period | ' | ' | '6 years | '7 years | ' | '6 years | ' | '10 years | '5 years |
Number of generic products with marketing rights acquired through merger (products) | ' | ' | ' | ' | 5 | ' | ' | ' | ' |
Number of abbreviated new drug applications awaiting regulatory approval (products) | ' | ' | ' | ' | 8 | ' | ' | ' | ' |
Number of IPR&D groups created | ' | ' | ' | ' | ' | ' | 6 | ' | ' |
Intangible asset impairment | $41,758 | $0 | ' | ' | ' | ' | ' | ' | ' |
Number of products impaired not expected to achieve forecasted operating results | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible_Assets_Net_Schedule
Intangible Assets, Net (Schedule of Intangible Assets, Net) (Details) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Accumulated amortization | ($271,161) | ($227,059) |
Intangible assets, gross | 1,568,248 | 1,319,707 |
Intangible assets, net | 1,297,087 | 1,092,648 |
Par trade name [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Indefinite-lived intangible assets | 26,400 | 26,400 |
Watson/Actavis related IPR&D [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Indefinite-lived intangible assets | 4,700 | 4,700 |
IPR&D - JHP [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Indefinite-lived intangible assets | 90,999 | 0 |
Developed products [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 511,752 | 530,759 |
Accumulated amortization | -181,516 | -155,744 |
Finite-lived intangible assets, net | 330,236 | 375,015 |
Other product related royalty streams [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 115,600 | 115,600 |
Accumulated amortization | -25,853 | -22,709 |
Finite-lived intangible assets, net | 89,747 | 92,891 |
IPR&D [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 293,400 | 293,400 |
Accumulated amortization | 0 | 0 |
Finite-lived intangible assets, net | 293,400 | 293,400 |
Subsequently Developed Annual IPR&D Groups [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 262,553 | 262,553 |
Accumulated amortization | -35,536 | -25,331 |
Finite-lived intangible assets, net | 227,017 | 237,222 |
Watson/Actavis Divestiture Products [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 62,544 | 85,295 |
Accumulated amortization | -26,021 | -23,143 |
Finite-lived intangible assets, net | 36,523 | 62,152 |
Developed products - JHP [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 198,600 | 0 |
Accumulated amortization | -1,958 | 0 |
Finite-lived intangible assets, net | 196,642 | 0 |
JHP trade name [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 700 | 0 |
Accumulated amortization | -13 | 0 |
Finite-lived intangible assets, net | 687 | 0 |
Other [Member] | ' | ' |
Intangible Assets, Net (Excluding Goodwill) [Line Items] | ' | ' |
Finite-lived intangible assets, gross | 1,000 | 1,000 |
Accumulated amortization | -264 | -132 |
Finite-lived intangible assets, net | $736 | $868 |
Intangible_Assets_Net_Schedule1
Intangible Assets, Net (Schedule of Future Amortization Expense) (Details) (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' |
Remainder of 2014 | $147,428 |
2015 | 174,089 |
2016 | 178,711 |
2017 | 206,612 |
2018 | 171,042 |
2019 and thereafter | 392,805 |
Finite-lived intangible assets, net | $1,270,687 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Feb. 20, 2014 | ||
JHP Group Holdings [Member] | |||||
Goodwill [Roll Forward] | ' | ' | ' | ||
Balance at beginning of period | $849,652 | $850,652 | $152,687 | ||
JHP Acquisition | 152,687 | [1] | 0 | [1] | ' |
Finalization of purchase accounting | 0 | [2] | -1,000 | [2] | ' |
Balance at end of period | $1,002,339 | $849,652 | $152,687 | ||
[1] | As noted in Note 3, “JHP Acquisition,†we acquired JHP as of February 20, 2014. Based upon our purchase price allocation, we recorded $152,687 thousand of incremental goodwill. This goodwill was allocated to Par. | ||||
[2] | As noted in Note 2, “Sky Growth Merger,†we were acquired through the Merger. Based upon purchase price allocation in accordance with ASC 350-20-35-30, we recorded goodwill, which was allocated to Par. |
Income_Taxes_Schedule_of_Compo
Income Taxes (Schedule of Components of Income Tax Provision (Benefit)) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' |
(Benefit) provision for income taxes | ($24,232) | ($7,979) |
Effective tax rate | 38.00% | 35.00% |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Income Taxes [Line Items] | ' |
Increase resulting from current period tax positions | $1,299 |
Long Term Liabilities [Member] | ' |
Income Taxes [Line Items] | ' |
Total amount of accrued interest and penalties resulting from unrecognized tax benefits | 20,960 |
Accrued Expenses And Other Current Liabilities [Member] | ' |
Income Taxes [Line Items] | ' |
Total amount of accrued interest and penalties resulting from unrecognized tax benefits | $949 |
Years 2005 through 2010 [Member] | Anchen [Member] | ' |
Income Taxes [Line Items] | ' |
Number of states under audit | 1 |
Years 2003 through 2009 [Member] | ' |
Income Taxes [Line Items] | ' |
Number of states under audit | 1 |
Debt_Narrative_Details
Debt (Narrative) (Details) (USD $) | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 06, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 06, 2013 | Feb. 06, 2013 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Feb. 20, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 20, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan and Revolving Credit Facility [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | JHP Group Holdings [Member] | JHP Group Holdings [Member] | JHP Group Holdings [Member] | JHP Group Holdings [Member] | ||
Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | 7 Year Senior Secured Term Loan Facility [Member] | New Term Loan [Member] | New Term Loan [Member] | New Term Loan [Member] | New Term Loan [Member] | New Term Loan [Member] | New Tranche B Term Loans [Member] | New Tranche B Term Loans [Member] | New Tranche B Term Loans [Member] | Incremental Term B-2 Joinder Agreement [Member] | 5 Year Senior Secured Revolving Credit Facility [Member] | Extended Revolving Facility Maturing December 28, 2017 [Member] | Extended Revolving Facility Maturing December 28, 2017 [Member] | Extended Revolving Facility Maturing December 28, 2017 [Member] | Extended Revolving Facility Maturing December 28, 2017 [Member] | Non-Extended Portion of Revolving Facility [Member] | 7.375% Senior Notes Due 2020 [Member] | 7.375% Senior Notes Due 2020 [Member] | 7.375% Senior Notes Due 2020 [Member] | 7.375% Senior Notes Due 2020 [Member] | Other Assets [Member] | Selling, General and Administrative Expenses [Member] | ||||
Ratio is Greater than 2.5 but Less Than or Equal to 3.0 Required to Pay 25% of Excess cash Flows [Member] | Ratio is Greater than 2.5 but Less Than or Equal to 3.0 Required to Pay 25% of Excess cash Flows [Member] | Ratio is Greater than 2.5 but Less Than or Equal to 3.0 Required to Pay 25% of Excess cash Flows [Member] | Ratio is Greater than 3.0, Required to Pay 50% of Excess cash Flows [Member] | Ratio is Greater than 3.0, Required to Pay 50% of Excess cash Flows [Member] | Gain (Loss) on Extinguishment of Debt [Member] | LIBOR [Member] | Base Rate [Member] | LIBOR [Member] | Base Rate [Member] | LIBOR [Member] | Base Rate [Member] | Prior to October 15, 2015, up to 40% of aggregate principal amount [Member] | Prior to October 13, 2015, up to 100% of aggregate principal amount [Member] | |||||||||||||||||||
Minimum [Member] | Maximum [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt term (years) | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior secured term loan | ' | ' | ' | ' | ' | ' | ' | ' | $1,055,000,000 | $1,066,000,000 | ' | ' | ' | ' | $1,055,000,000 | ' | ' | $395,000,000 | ' | ' | ' | ' | ' | ' | $490,000,000 | ' | ' | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000,000 | ' | 127,500,000 | ' | ' | 22,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit, accordion feature, additional borrowing capacity available | ' | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of indebtedness to net capital | ' | 2.5 | ' | ' | 2.5 | 3 | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Excess cash flow required to be paid | ' | ' | ' | 25.00% | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Periodic principal payment | ' | 5,036,000 | 10,802,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.25% | 2.25% | ' | 3.00% | 2.00% | ' | ' | ' | ' | 3.25% | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate, Reduction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Soft Call Provision Prepayment Premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Variable Rate Step-Down Percentage Upon Achievement of Net Leverage Level | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Leverage Ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,350,000 | 12,350,000 | 4,137,000 | 8,213,000 |
Write off of unamortized deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,923,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,989,000 | ' | ' | ' |
Debt, variable rate floor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, call option premium percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for debt call option premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of debt call option premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,412,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit, amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt interest rate (percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.38% | 7.38% | ' | ' | ' | ' | ' | ' |
Debt percentage of principal amount redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' |
Debt redemption price percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 107.38% | 100.00% | ' | ' | ' | ' |
Debt minimum amount of payment default causing default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' |
Debt minimum amount of failure to pay final judgment causing default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $40,000,000 | ' | ' | ' | ' | ' | ' | ' |
Guarantors' ownership percentage by parent | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Schedule_of_Debt_Details
Debt (Schedule of Debt) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Long-term debt | $1,931,678 | $1,545,340 |
Less unamortized debt discount to senior secured term loan | -8,444 | -7,821 |
Less current portion | -9,467 | -21,462 |
Long-term debt | 1,913,767 | 1,516,057 |
Term Loan [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term debt | 1,441,678 | 1,055,340 |
Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term debt | 0 | 0 |
Senior Notes [Member] | 7.375% Senior Notes Due 2020 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term debt | $490,000 | $490,000 |
Debt_Schedule_of_Debt_Maturiti
Debt (Schedule of Debt Maturities) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Long-term Debt, Gross, Fiscal Year Maturity [Abstract] | ' | ' |
2014 | $5,841 | ' |
2015 | 14,503 | ' |
2016 | 14,503 | ' |
2017 | 14,503 | ' |
2018 | 14,503 | ' |
2019 | 1,377,825 | ' |
2020 | 490,000 | ' |
Long-term debt | $1,931,678 | $1,545,340 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities Narrative (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Feb. 06, 2013 | Mar. 31, 2014 | Feb. 06, 2013 |
In Thousands, unless otherwise specified | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | New Term Loan [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | ||
Term Loan [Member] | Derivative_interest_rate_cap | New Term Loan [Member] | ||||
LIBOR [Member] | Term Loan [Member] | |||||
LIBOR [Member] | ||||||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' | ' |
Number of outstanding interest rate caps | ' | ' | ' | ' | 5 | ' |
Notional amount | ' | ' | ' | ' | $600,000 | ' |
Fixed interest rate | ' | ' | ' | ' | 1.00% | ' |
Debt, variable rate floor | ' | ' | ' | 1.00% | ' | 1.00% |
Weighted average fixed interest rate | ' | ' | ' | ' | 4.90% | ' |
Percent of coverage | ' | ' | ' | ' | 44.00% | ' |
Expected to be reclassed from Accumulated other comprehensive loss during next 12 months | 4,005 | ' | ' | ' | ' | ' |
Accumulated other comprehensive loss | $1,382 | $799 | $2,090 | ' | ' | ' |
Derivative_Instruments_in_Stat
Derivative Instruments in Statement of Financial Position Fair Value (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Asset Derivatives | ' | ' |
Assets | $0 | $0 |
Liability Derivatives | ' | ' |
Total derivatives | -2,090 | -1,189 |
Designated as Hedging Instrument [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | 0 |
Liability Derivatives | ' | ' |
Total derivatives | -2,090 | -1,189 |
Interest Rate Cap [Member] | Designated as Hedging Instrument [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | 0 |
Accrued Expenses And Other Current Liabilities [Member] | Designated as Hedging Instrument [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | -4,005 | -4,002 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | 1,915 | 2,813 |
Estimate of Fair Value Measurement [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Liability Derivatives | ' | ' |
Liabilities | -2,090 | ' |
Estimate of Fair Value Measurement [Member] | Current Assets [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Estimate of Fair Value Measurement [Member] | Current Liabilities [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | -2,090 | ' |
Level 1 [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Liability Derivatives | ' | ' |
Liabilities | 0 | ' |
Level 1 [Member] | Current Assets [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Level 1 [Member] | Current Liabilities [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | 0 | ' |
Level 2 [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Liability Derivatives | ' | ' |
Liabilities | -2,090 | ' |
Level 2 [Member] | Current Assets [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Level 2 [Member] | Current Liabilities [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | -2,090 | ' |
Level 3 [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Liability Derivatives | ' | ' |
Liabilities | 0 | ' |
Level 3 [Member] | Current Assets [Member] | ' | ' |
Asset Derivatives | ' | ' |
Assets | 0 | ' |
Level 3 [Member] | Current Liabilities [Member] | ' | ' |
Liability Derivatives | ' | ' |
Liabilities | $0 | ' |
Offsetting_Liabilities_Details
Offsetting Liabilities (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Offsetting Liabilities [Line Items] | ' |
Gross Amounts of Recognized Liabilities | ($2,090) |
Gross Amounts Offset in the Statement of Financial Position | -1,915 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | -4,005 |
Financial Instruments | 1,915 |
Cash Collateral Pledged | 0 |
Net Amount | -2,090 |
Counterparty 1 [Member] | ' |
Offsetting Liabilities [Line Items] | ' |
Gross Amounts of Recognized Liabilities | -2,090 |
Gross Amounts Offset in the Statement of Financial Position | -1,915 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | -4,005 |
Financial Instruments | 1,915 |
Cash Collateral Pledged | 0 |
Net Amount | ($2,090) |
Offsetting_Assets_Details
Offsetting Assets (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Offsetting Assets [Line Items] | ' |
Gross Amounts of Recognized Assets | $0 |
Gross Amounts Offset in the Statement of Financial Position | 1,915 |
Net Amounts of Assets Presented in the Statement of Financial Position | 1,915 |
Financial Instruments | -1,915 |
Cash Collateral Pledged | 0 |
Net Amount | 0 |
Counterparty 1 [Member] | ' |
Offsetting Assets [Line Items] | ' |
Gross Amounts of Recognized Assets | 0 |
Gross Amounts Offset in the Statement of Financial Position | 1,915 |
Net Amounts of Assets Presented in the Statement of Financial Position | 1,915 |
Financial Instruments | -1,915 |
Cash Collateral Pledged | 0 |
Net Amount | $0 |
Accumulated_Comprehensive_Inco
Accumulated Comprehensive Income (Loss) Rollforward (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' |
Beginning Balance Gain/(Loss) as of December 31, 2012 | ($1,189) |
Amount Reclassified from Other Comprehensive Income (Loss) into Income (Loss) (Pre-tax) | 992 |
Ending Balance Gain/(Loss) (Pre-tax) as of September 30, 2013 | -2,090 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ' |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' |
Amount Recognized in Other Comprehensive Income (Loss) on Derivative (Pre-tax) | ($1,893) |
Derivative_Instruments_Gain_Lo
Derivative Instruments Gain (Loss) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Loss) (Effective Portion) | ($992) | $0 |
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion ) | 0 | 0 |
Cash Flow Hedging [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivative (Effective Portion) | -1,893 | 0 |
Interest Expense [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Loss) (Effective Portion) | -992 | 0 |
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion ) | 0 | 0 |
Interest Rate Cap [Member] | Cash Flow Hedging [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on Derivative (Effective Portion) | ($1,893) | $0 |
Changes_in_Stockholders_Equity2
Changes in Stockholders' Equity (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Common Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income/(Loss) [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Balance, December 31, 2013 (in shares) | ' | ' | 0 | 0 | ' | ' |
Balance, December 31, 2013 | $618,357 | $547,362 | $0 | $0 | $686,577 | ($799) |
Unrealized loss on available for sale securities, net of tax | ' | ' | ' | ' | ' | -6 |
Unrealized loss on cash flow hedges, net of tax | ' | ' | ' | ' | ' | -1,212 |
Compensatory arrangements | ' | ' | ' | ' | 942 | 0 |
Capital contribution from Holdings | ' | ' | ' | ' | 110,000 | ' |
Other | ' | ' | ' | ' | 0 | 0 |
Balance, March 31, 2014 (in shares) | ' | ' | 0 | 0 | ' | ' |
Balance, March 31, 2014 | $618,357 | $547,362 | $0 | $0 | $797,519 | ($1,382) |
ShareBased_Compensation_Narrat
Share-Based Compensation (Narrative) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of tranches of stock options | 2 | ' |
Stock Option Tranche 1 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Award vesting period | '5 years | ' |
Award vesting rights percentage | 20.00% | ' |
Award requisite service period | '5 years | ' |
Weighted average per share fair value of options granted | $0.67 | $0.67 |
Stock Option Tranche 2 [Member] | Vesting Event B [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average per share fair value of options granted | $0.76 | $0.76 |
Stock Option Tranche 2 [Member] | Vesting Event B [Member] | Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Award vesting rights percentage | 50.00% | ' |
Stock Option Tranche 2 [Member] | Vesting Event B [Member] | Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Award vesting rights percentage | 100.00% | ' |
Stock Option Tranche 2 [Member] | Vesting Event A [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average per share fair value of options granted | $0.68 | $0.68 |
Stock Options [Member] | Director [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Award vesting period | '5 years | ' |
Award vesting rights percentage | 20.00% | ' |
Rollover Stock Options [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expiration period | '10 years | ' |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Award vesting period | '5 years | ' |
ShareBased_Compensation_Stock_
Share-Based Compensation (Stock Options Weighted Average Grant Date Fair Value) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stock Option Tranche 1 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average per share fair value of options granted | $0.67 | $0.67 |
Stock Option Tranche 2 [Member] | Vesting Event A [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average per share fair value of options granted | $0.68 | $0.68 |
Stock Option Tranche 2 [Member] | Vesting Event B [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average per share fair value of options granted | $0.76 | $0.76 |
ShareBased_Compensation_Alloca
Share-Based Compensation (Allocated Share-Based Compensation) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock Options [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | $919 | $2,234 |
Tax effect of share-based compensation | -340 | -827 |
Total, net of tax | 579 | 1,407 |
Stock Options [Member] | Cost of goods sold [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | 89 | 223 |
Stock Options [Member] | Selling, general and administrative [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | 830 | 2,011 |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | 23 | 34 |
Tax effect of share-based compensation | -9 | -13 |
Total, net of tax | 14 | 21 |
Restricted Stock Units (RSUs) [Member] | Cost of goods sold [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | 0 | 3 |
Restricted Stock Units (RSUs) [Member] | Selling, general and administrative [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total, pre-tax | $23 | $31 |
ShareBased_Compensation_Summar
Share-Based Compensation (Summary of Stock Option Activity) (Details) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Stock Option Tranche 1 [Member] | ' |
Shares: | ' |
Beginning balance (in shares) | 21,830 |
Granted (in shares) | 625 |
Exercised (in shares) | 0 |
Forfeited (in shares) | -200 |
Ending balance (in shares) | 22,255 |
Exercisable (in shares) | 4,366 |
Expected to vest (in shares) | 21,512 |
Weighted Average Exercise Price (in dollars per share): | ' |
Beginning balance, Weighted Average Exercise Price (in dollars per share) | $1 |
Granted, Weighted Average Exercise Price (in dollars per share) | $1.40 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $1 |
Forfeited, Weighted Average Exercise Price (in dollars per share) | $1 |
Ending balance, Weighted Average Exercise Price (in dollars per share) | $1.01 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $1 |
Expected to vest, Weighted Average Exercise Price (in dollars per share) | $1.01 |
Weighted Average Remaining Life, Outstanding | '8 years 6 months |
Weighted Average Remaining Life, Exercisable | '8 years 6 months |
Weighted Average Remaining Life, Expected to vest | '8 years 6 months |
Aggregate Intrinsic Value, Ending Balance | $8,902 |
Aggregate Intrinsic Value, Exercisable | 1,746 |
Aggregate Intrinsic Value, Vested and expected to vest | 8,605 |
Stock Option Tranche 2 [Member] | ' |
Shares: | ' |
Beginning balance (in shares) | 21,330 |
Granted (in shares) | 625 |
Exercised (in shares) | 0 |
Forfeited (in shares) | -200 |
Ending balance (in shares) | 21,755 |
Exercisable (in shares) | 4,266 |
Expected to vest (in shares) | 21,012 |
Weighted Average Exercise Price (in dollars per share): | ' |
Beginning balance, Weighted Average Exercise Price (in dollars per share) | $1 |
Granted, Weighted Average Exercise Price (in dollars per share) | $1.40 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $1 |
Forfeited, Weighted Average Exercise Price (in dollars per share) | $1 |
Ending balance, Weighted Average Exercise Price (in dollars per share) | $1.01 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $1 |
Expected to vest, Weighted Average Exercise Price (in dollars per share) | $1.01 |
Weighted Average Remaining Life, Outstanding | '8 years 6 months |
Weighted Average Remaining Life, Exercisable | '8 years 6 months |
Weighted Average Remaining Life, Expected to vest | '8 years 6 months |
Aggregate Intrinsic Value, Ending Balance | 8,702 |
Aggregate Intrinsic Value, Exercisable | 1,706 |
Aggregate Intrinsic Value, Vested and expected to vest | 8,405 |
Rollover Stock Options [Member] | ' |
Shares: | ' |
Beginning balance (in shares) | 17,351 |
Granted (in shares) | 0 |
Exercised (in shares) | 0 |
Forfeited (in shares) | 0 |
Ending balance (in shares) | 17,351 |
Exercisable (in shares) | 17,351 |
Weighted Average Exercise Price (in dollars per share): | ' |
Beginning balance, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Granted, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Forfeited, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Ending balance, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $0.25 |
Weighted Average Remaining Life, Outstanding | '3 years 7 months 6 days |
Weighted Average Remaining Life, Exercisable | '3 years 7 months 6 days |
Aggregate Intrinsic Value, Ending Balance | 19,954 |
Aggregate Intrinsic Value, Exercisable | $19,954 |
ShareBased_Compensation_Summar1
Share-Based Compensation (Summary of Restricted Stock Activity and Restricted Stock Unit Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Restricted Stock Units (RSUs) [Member] | ' |
Shares: | ' |
Beginning Balance (in shares) | 375 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Ending Balance (in shares) | 375 |
Weighted Average Grant Price (in dollars per share): | ' |
Beginning Balance, Weighted Average Grant Price (in dollars per share) | $1 |
Granted, Weighted Average Grant Price (in dollars per share) | $1 |
Vested, Weighted Average Grant Price (in dollars per share) | $1 |
Forfeited, Weighted Average Grant Price (in dollars per share) | $1 |
Ending Balance, Weighted Average Grant Price (in dollars per share) | $1 |
Aggregate Intrinsic Value | $525 |
Commitments_Contingencies_and_1
Commitments, Contingencies and Other Matters (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 17, 2013 | Nov. 21, 2013 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Patent Infringement Claim Brought by the Curators of the University of Missouri [Member] | Patent Infringement Claim Brought by the Curators of the University of Missouri [Member] | TWi Pharmaceuticals [Member] | AWP Claim Brought by State of Illinois [Member] | AWP Claim Brought by State of Illinois [Member] | ||
claim | Accrued Legal Settlements [Member] | ||||||
Commitments Contingencies and Other Matters [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Accrued legal settlements | $37,517 | $41,367 | $9,000 | $9,000 | ' | ' | $28,500 |
Claims dismissed | ' | ' | ' | ' | 2 | ' | ' |
Litigation settlement amount | ' | ' | ' | ' | ' | $28,500 | ' |
Segment_Information_Schedule_o
Segment Information (Schedule of Financial Data for Business Segments) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
segment | ||
Segment Reporting Information [Line Items] | ' | ' |
Number of business segments | 2 | ' |
Total revenues | $289,084 | $290,196 |
Total gross margin | 94,314 | 71,444 |
Total operating (loss) income | -34,155 | 8,609 |
Interest income | 14 | 37 |
Interest expense | -25,467 | -24,036 |
Loss on debt extinguishment | -3,989 | -7,335 |
(Benefit) provision for income taxes | -24,232 | -7,979 |
Net loss | -39,365 | -14,746 |
Par Pharmaceutical [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenues | 273,806 | 272,800 |
Total gross margin | 83,644 | 59,685 |
Total operating (loss) income | -23,260 | 9,523 |
Strativa [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total revenues | 15,278 | 17,396 |
Total gross margin | 10,670 | 11,759 |
Total operating (loss) income | ($10,895) | ($914) |
Segment_Information_Schedule_o1
Segment Information (Schedule of Total Revenues of Top Selling Products) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
drug | ||||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | $289,084 | $290,196 | ||
Number of other insignificant generic drugs | 80 | ' | ||
Par Pharmaceutical [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 273,806 | 272,800 | ||
Par Pharmaceutical [Member] | Budesonide (Entocort EC) [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 37,349 | 50,403 | ||
Par Pharmaceutical [Member] | Propafenone Rythmol Sr [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 21,112 | 17,159 | ||
Par Pharmaceutical [Member] | Divalproex (Depakote) [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 20,405 | 1,426 | ||
Par Pharmaceutical [Member] | Bupropion Er Wellbutrin [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 16,342 | 8,253 | ||
Par Pharmaceutical [Member] | Metoprolol Succinate ER (Toprol-XL) [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 14,117 | 19,401 | ||
Par Pharmaceutical [Member] | Other [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 145,631 | 98,402 | ||
Par Pharmaceutical [Member] | Other product related royalty streams [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 5,439 | [1] | 6,779 | [1] |
Strativa [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 15,278 | 17,396 | ||
Strativa [Member] | Megace ES [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 8,154 | 10,536 | ||
Strativa [Member] | Nascobal Nasal Spray [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | 6,324 | 6,202 | ||
Strativa [Member] | Other [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | -12 | -241 | ||
Strativa [Member] | Other product related royalty streams [Member] | ' | ' | ||
Revenue, Major Customer [Line Items] | ' | ' | ||
Revenues | $812 | [1] | $899 | [1] |
[1] | Other product related revenues represents licensing and royalty related revenues from profit sharing agreements. |
Restructuring_Details
Restructuring (Details) (USD $) | 2 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 18, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
employee | JHP Restructuring [Member] | Strativa Restructuring [Member] | Employee Severance [Member] | Employee Severance and Termination Benefits [Member] | Employee Severance and Termination Benefits [Member] | Asset Impairments and Other [Member] | |
Strativa Restructuring [Member] | JHP Restructuring [Member] | Strativa Restructuring [Member] | Strativa Restructuring [Member] | ||||
employee | |||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Workforce reduction, number of employees | 20 | ' | ' | 70 | ' | ' | ' |
Reorganization of workforce, number of employees in single sales team | ' | ' | ' | 60 | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Initial Charge | ' | $1,146 | $1,816 | ' | $1,146 | $1,413 | $403 |
Cash Payments | ' | 0 | -1,409 | ' | 0 | -1,409 | 0 |
Non-Cash Charge Related to Inventory and/or Intangible Assets | ' | 0 | -403 | ' | 0 | 0 | -403 |
Reversals, Reclass or Transfers | ' | 0 | -4 | ' | 0 | -4 | 0 |
Liabilities at March 31, 2014 | ' | $1,146 | $0 | ' | $1,146 | $0 | $0 |
Subsequent_Events_Subsequent_E
Subsequent Events Subsequent Events (Details) (USD $) | 0 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 06, 2013 | Mar. 31, 2014 | Feb. 06, 2013 | Apr. 09, 2014 |
New Term Loan [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | Interest Rate Cap [Member] | |
LIBOR [Member] | New Term Loan [Member] | Subsequent Event [Member] | ||
Term Loan [Member] | LIBOR [Member] | |||
Term Loan [Member] | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Notional amount | ' | $600,000 | ' | $230,000 |
Fixed interest rate | ' | 1.00% | ' | ' |
Debt, variable rate floor | 1.00% | ' | 1.00% | ' |
Weighted average fixed interest rate | ' | 4.90% | ' | 4.80% |