EXHIBIT 99.1
LANNETT COMPANY REPORTS RECORD SALES AND EARNINGS
RESULTS FOR ITS 2ND QUARTER AND FIRST SIX MONTHS OF FISCAL
2004
PHILADELPHIA, PA - January 20, 2004 - LANNETT COMPANY, INC. (AMEX:
LCI), a manufacturer of generic pharmaceuticals, announced record sales and
earnings for the quarter ended December 31, 2003. Sales increased 63% in the
quarter to a record $16.6 million versus sales of $10.2 million for the same
period of the prior year. Second quarter net earnings increased 39% to a record
$3.8 million or $0.19 per diluted share, from $2.8 million or $0.14 per diluted
share for the same period a year earlier. On a year-to-date basis through its
second quarter ended December 31, 2003, the Company's net sales increased by 54%
to $29.8 million, from $19.3 million in the same period of the prior year. Net
income increased by 36% to $7.3 million for the six months ended December 31,
2003, from $5.3 million for the same period in the prior year.
The following table presents Lannett's unaudited results of operations
for the quarters ended December 31, 2003 and December 31, 2002 and the six-month
periods ended December 31, 2003 and December 31, 2002:
Quarter Ended Six Months Ended
12/31/03 12/31/02 12/31/03 12/31/02
Unaudited Unaudited Unaudited Unaudited
(In thousands, except (In thousands, except
for Diluted Income per Share) for Diluted Income per Share)
Net Sales $ 16,574 $ 10,183 $ 29,795 $ 19,310
Cost of Sales 6,661 3,965 11,458 7,802
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Gross Profit 9,913 6,218 18,337 11,508
Research & Development Expenses 1,253 529 2,139 986
Selling, General & Admin. Expenses 2,177 1,263 3,911 2,156
------------------- ---------------------
Operating Profit 6,483 4,426 12,287 8,366
Other Income/(Expense) 10 (13) 3 (37)
------------------- ---------------------
Income Before Taxes 6,493 4,413 12,290 8,329
Income Tax Expense 2,661 1,650 5,040 3,014
------------------- ---------------------
Net Income 3,832 2,763 7,250 5,315
=================== =====================
Diluted Income per Share*** $ 0.19 $ 0.14 $ 0.36 $ 0.26
=================== =====================
*** DILUTED INCOME PER SHARE FOR THE QUARTER ENDED AND SIX MONTHS ENDED DECEMBER
31, 2002 HAS BEEN ADJUSTED FOR THE COMPANY'S 3 FOR 2 STOCK SPLIT EFFECTIVE FOR
SHAREHOLDERS OF RECORD ON FEBRUARY 14, 2003.
Larry Dalesandro, Chief Financial Officer, commenting on the results
for the quarter, stated, "The second quarter was an excellent quarter for
Lannett. Sales and earnings reached record levels for our company. As we
continue to invest more in research and development (R&D), it will enable us to
add products to our line, thereby increasing future sales levels. Spending on
R&D increased to $2.1 million for the six months ended December 31, 2003
compared to $1 million for the same period of the prior year. Net sales and our
related market share increased for a majority of our products in the quarter due
to the efforts of our growing sales team, and our focus on customer service."
Lannett continues to have a strong balance sheet, with cash of $8
million, net accounts receivable of $8.3 million, inventory of $10.8 million and
stockholders equity of $29 million.
The Company's common stock trades on the American Stock Exchange under
the symbol "LCI". For more information please call Investor Relations at
215/333-9000.
THIS PRESS RELEASE CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING
NATURE RELATING TO FUTURE EVENTS OR FUTURE BUSINESS PERFORMANCE. ANY SUCH
STATEMENTS THAT REFER TO LANNETT'S ESTIMATED OR ANTICIPATED FUTURE FINANCIAL
RESULTS, FUTURE INVENTORY LEVELS, FUTURE COMPETITION OR PRICING, FUTURE LEVELS
OF OPERATING EXPENSES, PRODUCT DEVELOPMENT EFFORTS OR PERFORMANCE, OR OTHER
NON-HISTORICAL FACTS ARE FORWARD-LOOKING AND REFLECT LANNETT'S CURRENT
PERSPECTIVE OF EXISTING TRENDS AND INFORMATION. THESE STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES THAT CANNOT BE PREDICTED OR QUANTIFIED AND, CONSEQUENTLY,
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS,
THE UNCERTAINTY THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE PRELIMINARY
RESULTS DESCRIBED IN THIS PRESS RELEASE, RATES OF SALE OF CUSTOMER INVENTORIES,
THE SUCCESS OF LANNETT'S PRODUCT DEVELOPMENT ACTIVITIES AND THE TIMELINESS WITH
WHICH REGULATORY AUTHORIZATIONS AND PRODUCT ROLL-OUT MAY BE ACHIEVED, MARKET
ACCEPTANCE OF LANNETT'S PRODUCTS AND THE IMPACT OF COMPETITIVE PRODUCTS AND
PRICING, THE AVAILABILITY ON COMMERCIALLY REASONABLE TERMS OF RAW MATERIALS AND
OTHER THIRD PARTY SOURCED PRODUCTS, SUCCESSFUL COMPLIANCE WITH EXTENSIVE,
COSTLY, COMPLEX AND EVOLVING GOVERNMENTAL REGULATIONS AND RESTRICTIONS, EXPOSURE
TO PRODUCT LIABILITY AND OTHER LAWSUITS AND CONTINGENCIES, AND OTHER RISKS AND
UNCERTAINTIES DETAILED IN LANNETT'S MOST RECENT FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING BUT NOT LIMITED TO: LANNETT'S ANNUAL REPORT AND
FORM 10-KSB FOR THE YEAR ENDED JUNE 30, 2003.
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