ANIP - Earnings call transcript Q4 2018 | ANI Pharmaceuticals, Inc.

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Operator

Good morning, everyone, and welcome to ANI's Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded. It is now my pleasure to turn today's program over to Mr. Przybyl. Arthur ahead. go Please

Arthur Przybyl

and and ANI's fourth everyone for conference the full-year quarter welcome morning, earnings to call Good XXXX.

Joining our me Chief Carey, Financial Officer. today is Steve

Before can context ask each to you to also refer in Generally be want include carefully that morning's and conference of we were in as call. it reported Statements non-GAAP not will Accepted with Accounting important measures accordance this those we Principles. and Forward-Looking financial this language everyone release release certain press financial fourth review earnings in begin, measures found our I Today, dated of Reconciliation to prepared the to Discussions quarter today. results. full-year our

XX% record increases XX% EBITDA numbers branded Fourth adjusted million. increased These fourth year XX% the revenues of $XX.X as increased XXXX over non-GAAP Full-year by of record EBITDA and net drive the For ANI increases results. These quarterly million the the of net our robust $XXX.X and XXXX. reported of XX%, represent to quarter XX% generic $XX.X were product period. period. product revenues record non-GAAP launches by prior new our respectively and of and prior generated help compared records quarter over year results revenues million revenues to adjusted direct results million product increases $XX.X

was net and In efforts. We primarily revenue. million EBITDA of to XX% generated of XX% by non-GAAP and research Cortrophin XXXX, operations. attributed adjusted development cash of re-commercialization million year, from the expenses For increase our $X.X $XX.X increased

and our and from combined forecasted of XXXX contract and revenues. seven of total to XX%. Annualizing launches XXXX XX During manufacturing launches XXXX four products launched XX increase the a portfolio we branded product anticipated product increasing products, drug products, new generic commercial with our revenues drug year,

range We XX% of $XXX million to Estimated XX%. have in XXXX to $XXX revenues revenue estimated of the million. increases

of $XX the million adjusted of XXXX XX%. estimated EBITDA EBITDA increases to to we result, XX% a million non-GAAP As $XXX range in estimated

and Our of XXXX In In effect to financial grow products transactions guidance to XX our does Since business not XXXX, provide acquisitions model products. from several closed to branded our fourth intended future additional use credit our additional for fund integration business guidance. have through $XXX divestiture on XXXX, our ANI the is capacity new model acquiring for contract include total manufacturing business in we acquired of these generic additional acquired their hand net intend acquisitions. own and transactions. augment realize asset ANI opportunities seek the growth from FTC revenue in the first we full any process. effect of to and and four products the available Canada continue approximately launching we our and We facility to our label, million that manufacturing anticipated quarter, cash lines and began label

more front admittedly of We to in to the conference arise any now we will with details credit also us Cortrophin Cortrophin continue industry. guidance on-track increasing Carey, our compelling business and its results model macro flow that opportunities improving exemplify XXXX commercial an CFO, a the first flow business XXXX. you our to but that results. generates ever supplemental continue conclusion, tough over its grow our provide our of We it from remain filing. quarter final Stephen potential. XXXX in operations, NDA finally I see growing and who pursue, In the by transformational turn shareholder to time-to-time from the and cash Cortrophin, product base financial refinanced order climate, our closer for in we call business debt our with business. realizing to additional will had retire $XX and cash NDA for Regardless advancing to anticipated of on us dilution our of in are environment strengthen convertible current to our our acquisitions debt future to us And million a our without allowing allows existing line supplemental that and providing we

Stephen Carey

morning on fourth for thank and good Art, the financial you to XXXX full-year Thank and to call everyone discuss the line joining ANI’s you quarter results.

We consecutive drove non-GAAP EBITDA to XX% report net pull close revenue our earnings gains reported as fourth earnings representing reached million XXXX year $X.XX, per that diluted through million revenue, profit morning share. by to respectively. share full-year of and compared non-GAAP strong of EBITDA are pleased records extension fifth a ANI and per this out adjusted adjusted from gross to posted a net these non-GAAP Full-year $XXX.X quarter increase and and to XXXX, diluted XXXX, to representing on $XX.X XX% sales XX% adjusted an versus increase adjusted non-GAAP

of the fourth Turning highlights the quarter. our attention to

Atacand sales XX% XX%, revenues royalty $XX.X in sales lower by Arimidex impact year Fenofibrate Gains lower in due lower in $XX.X XXXX. for records the $XX.X and million ANI non-GAAP on quarterly per Royalty label and revenue sales Nilutamide. were XXXX. which Ezetimibe-Simvastatin, margin revenues. up of in these million was Revenues million three new the products all worth the tempered LA the quarter or of were the $XX.X of full Branded were included from months pharmaceutical primarily launched were Gilead's of purchased million, conjunction acquisitions. was products $XX.X cost for which to such period services to ended Inderal adjusted net prior and million of Atropine of Vancocin. At of our EBITDA ANI Prior EPS product of sales sales in certain the XXXX $X.XX sales launched XX, was four basis increase million adjusted development launched was For income in or Atacand gains Corresponding XXX,XXX of months and representing XX, $X.X and HCT ANI a ended $XX.X million products December quarters income finished the revenues the tempered and in And to as Revenues products diluted of with increased pharmaceutical year Diphenoxylate in by $X.X $X.X the share. current well October declines for XXXX costs quarters December million Canada. versus Yescarta, label Casodex in due net July by non-GAAP and of and or XXXX three XX% other categories. as of revenue in for for the revenues of for recorded XX% million generic of Company. driven for of of products, Cost and our a of up to net XX% prior posted year in laboratory million goods were related inventory ANI sales step-up by of of worth $X.X Canada. to due services manufacturing contract quarter, driven ANI principally other our of full as

sharing incremental approximately sales transaction revenues. and Canada costs Research administrative U.S. support driven related million or new in our expenses was proximate to to products our generic up driven year. Amneal. million, general related Excluding work driven the of projects business prior investment arrangements. in development quarter, and The $X.X XXXX year-over-year compared of acquired costs to second from the quarter re-commercialization improvement This points to decreased $X our favorable $X.X by product and pipeline, net $XX.X million the year prior XX% profit by this mix, underlying and million two certain costs, $XX.X asset subject the year, were Cortrophin incurred and amount, to expenses of behind including our program, sales products of Selling, million growth in XXX,XXX as margin in from and ANI purchase quarter. increase totaled by XX% or cost is prior due of in

capital structure. attention allowed continued to quarter. to our Turning of very business, had flow results address health of We cash the active its of strength of proactively the various The structure. our portion of management a components debt consistency our debt our and our

The in deemed And balance unwound portion utilized XX negotiated outstanding convertible of sheet announced to which year. from repurchase of December our on As we correspondingly of December X% previously a notes, senior transactions, Xth, are our this privately cash the million these face certain a outstanding reduce shareholders. portion the of remaining impact dilution net convertible value our hedge to related of the of notes transactions transaction equity was for to the notes. risk to remove to XXX,XXX,XXX and

address to term to that on which Huntington, is five ANI This is facility XXXX structured In of and led addition, new the senior be This announced Bank XXXX. in balance amended December through we accessed achieved support of existing secured for previously the of facility million $XXX any strong with bank multiple tranches of amended transaction financing credit loan Morgan. by $XXX.X an December as with was MUFG, X, fully and specifically million at our XXth, through Citizens have lenders, the and U.S. up convertible million $XXX years December maturity Bank from bank time can by a draw group by previous and Regions, we delayed committed syndicate the and entered notes. is JP remaining senior restated our

includes fully million. with term million facility the and A LIBOR facility at $XX potential our banks our base extension Interest pre-existing with our anticipated $XXX credit dilution. $XX increases February the a XXXX had of the of draw of X.X%. the addition, X.X% shareholders these LIBOR In facility between from grid X.XX%. delayed on our of to that XXXX, our We traditional and $XX the committed provides draw Loan term to with million fixed of to the equity entered debt rate of Term an X.XX% of our pre-existing debt hedged address revolving related pricing LIBOR the previously transactions above swap at rate as future loan The $XX to LIBOR. loan December exposure based down we date and convertible maturity leverage with million culmination upcoming forward the million in component financing will flexes a ANI the Further, that to manage start a insulate interest rate

trailing generic, net seniors of and purchase portion approximated the of $XX.X continued continues as notes million forward $XX development into from of million to in cash XXXX revolver swap X.X% Total of XXXX. five the million, acquisition XXXX. newly reflective of enhance $XX quarter. of repurchase interest at operations to manufacturing to capabilities provide provide of This the remains On of XX-month of convertible basis flow years business balance of expenditures terms midpoint cash million and us transactions and is WellSpring Services; operations is the and the flow just anticipate when look than portion utilizing less back perspective, and we LIBOR rate Further, pursuing and balance and leverage operations sheet credit pipeline of our X.XX From as million of full-year unrestricted generated of to of with cash quarter while our basis, upsized times guidance. our December $XX.X of commercial The the opportunities flexibility investing during $XX.X representing coupled balance utilized from December a from for date approximately have transactions. equivalents the flow debt growth the our had during XX, million further on the through full-year net in $XX we certitude business million Pharma sheet rate undrawn cash facilities. X.X the a a $XXX we net our the secured facility capital cash As Company. cash next of with

program. increase $XXX $XX our million ANI in of projected impact million Canada. ANI generic our forward currently XXXX of by representing the and and returns between product to successful our to of and million between in Ongoing driven Adjusted re-commercialization to over year. the is Atacand of Casodex, guidance in this marketing currently revenues non-GAAP portfolio continued XX% launches. Inherent Looking reach XX% base XX% integration Pharmaceuticals brand Arimidex, in XXXX of growth to driven net reflecting and on potential is maximizing the and full-year $XXX development XX% and our increased the Gel of label the investment growth Atacand XXXX, EBITDA million planned to in a HCT of by project to $XXX with continued revenue activity be commercialized research product full-year XXXX execution our product records spending, over strength our expansion we Cortrophin

include million million expense XXXX. Our total guidance approximately of $XX.X million ranges compared ANI as R&D $XX.X $XX.X incurred to to in

share million we and the Company. reflects In rate shares exit $X.XX addition, investment earnings our expense we is and approximately in outstanding. XX% very the $X.XX non-GAAP growth and summary, per to business a growth per of diluted and SG&A XX.X to position share projected XXXX continue diluted to assume income strong In brands. trajectory the between in of support Adjusted continued tax anticipated of reach an

pipeline We have sheet, opportunities fully to base, ANI leverage add asset and product flow balance access of to A and strong Canada. ability Pharmaceuticals transformation to to Cortrophin the new our cash exciting healthy committed increasingly capabilities diverse development a capital. at in

we As call forward build capabilities long-term this, back President Art look and value drive the always, continuing our I our stakeholders. out to and Przybyl. to to CEO, to our will With turn

Arthur Przybyl

to the will open Thank you, any we conference Steve. call Moderator, now questions.

Operator

Elliot James. first Wilbur Our with Raymond line Instructions] the from [Operator question of comes

Elliot Wilbur

during quarter Thanks. conference Good congratulations I'm say call. good a not allowed morning. to on

in see the continue has a been to results very say will challenging to record I Company So that book macro encouraging very environment. what it's just

I a trend that we come on that can look combined those, $XXX record conservatism to launches quite with with to analyze your base portfolio seems like stable half terms of if million were based what in what number year top-line at XXXX in a a be that forecast. to results up tell, of be is simply I pretty there comment, expected in So is given embedded from seem new and the XXXX second would is bit about

yet, base about just missing So sort off in of bounce you that haven't XXXX XXXX just expected want but of potential XXXX? something idea and of product some picked in maybe we thinking up robustness to in of terms the I'm of product kind versus movements of story some of terms that in the products the new

A Przybyl

a Good Great. good Elliot, point. very it's morning

environment like as what I we of it management our time be aggressive team, from erosion looking start sheet are same branded think market, worry associated we building guidance, know but a it think and when generic the in negative, I things internally is wall next we out out new we we to leverage, that to competition on year's one comes at potential describe with perspective, coming products, our on debt Unfortunately, some anticipate balance sales. competition the exiting an you in. start conservative potential when the at us to with a which always Company a of

it, then the the out add are from new we outlook product start So of glory we a launches. all negatives. And to positives which

that don't our some them some the stated some release, past such we in count of or back of as guidance obviously we of here work that haven’t, in terms come of have not number. forecast. we And, or admittedly and We press cash do on because have anticipating aggressive being have dollars have asset to too we with out flow things we putting we described not the in didn't missed acquisitions, something we a either

what from on growth we annualize us results and is even where these our But And year greater you for EBITDA increases line. from, XXXX to this feel with what think XX% adjusted law so good the the represent maybe revenue you and are XXXX out came where if numbers. robust line the them, turn quarter than from we and was we good is we numbers larger number saw take the us. year you XX% verses a number, adjusted guidance on feel which comfortable for the this of This EBITDA will revenue a guiding continued admittedly again, fourth and get

representative these are numbers we obviously as business XXXX. so, for being of our in model out And comfortable

your hope comments. And so I answers that

Elliot Wilbur

and story couple But the it. via approved. of hasn't I And to question at if movement, happened second I just with it. and has this generic space of back of a Mylan of incremental focus you here, what U.S. appreciate been a the the kind side. of think of And already something Good price. still of large the about and of starting into past transactions there on to these ask in in obviously, see some them course, talk sort look ANDAs, other are lot oral the diversification ads of branded growth of And the seems I terms attention there But pulling getting most much the XX, have those I and of of markets mean the in you like could solid color, dose some players. lot the in has from products it's of just portfolio I been if I'm been suggesting years some favorable. hasn't more really assets, it's move north

So may about to monetizing thought in XX the about months. those kind months you how to next you potentially assets what XX thinking past I'm the maybe just of XX XX wondering be versus over

Arthur Przybyl

and that exactly library we as CBE-XXs fluctuate disruptions And in was described And can arise companies through products. view on what product pipeline in you be we a view Well opportunities sometimes the that our the marketplace - or those for discontinuing that other play as re-commercialized large from supply today. based launches marketplace part or a us. potentially PASs

We as that million have the we levels, In drive worth know for which supply order $XX you potentially of penalties, occurred. you inventory avoid carry to those revenue have to on based you from excellent failure have $XX books, seen into business. bankruptcy, recent million can service filings

faster you entail larger change and products raw those remember that supplier. portfolio to many The first material in And route the are of did we that - that from a attacked so see we that think I obviously require acquired. going not also but opportunities,

XX-day in type as And be changes so products. effective could being they launched

prior obviously filed. many approval are and now some So our of supplements products the

that quarter ANDAs. a those And the products obviously launch evaluate to in product products to second those based market. library bring on of we comes and it out will of You continue conditions market significant that see time takes certainly a to

Elliot Wilbur

questions. you. are Those Okay. great. my Thank two

Arthur Przybyl

Elliot. Alright. you Thank

Operator

question the line Our Dewey comes from of next with Steadman Canaccord.

Dewey Steadman

my thanks Concerta think guys, I we about taking in Hi are guess should revenue XXXX. phasing Obviously, prior question. to and How on for the coming. question. build for Aggrenox

mentioned the You rare there coming that and also is guess a then generic as I library well. unknown, undisclosed, is product

should rather progresses how about year? new how So we the throughout think

Arthur Przybyl

Yes.

call help climb in going additional October with that anticipate have certain. this to I Xst of aspirin/dipyridamole that just the March. the the from discuss second launching in thought see is call SKUs will will I to it can a throughout quarter. separate a a the quarter terms of you you know year bit the Steve think your is in library later - then you And, forward. research are we you little you that cadence ANDAs a I important more guide oral we it's on that out really launch one And launch quarter. you are anticipating products of And mentioned revenue cadence. reports to methylphenidate those forecasting a two are in second is the in of hopefully late is - write Two to launch fourth the coming SKUs regards will quarter. for date because, is and in Vancomycin of that that solution

how you you revenues cadence we some And I going feel that this hope throughout year. know see new of the so forward gives for

Dewey Steadman

get Obviously, new out a Excellent. that the how form approach the solution, to do an word solution how do product? build you to available? that this And oral Vanco is for dosage then marketing plan is on you oral and

Arthur Przybyl

we million neighborhood to marketing will brands of of our, tools brands. the realize programs probably on call some it that invest patent of $X to I those today, for don't is use same in million $X We folks marketing virtual which many program. virtual a that the we we off think will utilize

that traditional potentially launching the see will primarily be also think oral the we make off strategy will playing another solution. solution I so and to word the product of available like And well it as the GPOs, Vanco a channels our into the that hospital consortiums, obviously, your product. typical the a this sure playing is be But, oral that that success we we that and to to as this. on There today, product out generic use market of Vanco launch certainly is get

we some to product admittedly more put seen light oral have of believe sales that into we what fact Vancomycin that our of buying increase product, We in solution. have to seen the product continually an that capsule more compounders or oral Vancomycin

an some the part of from those market. challenge this our FDA launching be our But you about has as we that and demand the is remove gold with overall which as we increase will well will So that pent have dosage feel approved oral solution feel Vancomycin that the generic product launch form will pretty up attempt if and as once brand a and make standard a for it associated we well, to we marketplace it. the to good only prospects also compounders obviously the so

Dewey Steadman

Thanks there the business to and an on in interesting out group, still world, I in branded there can within acquired the portfolios but on are even you be of there. know potential on able development that there either were decrease products the mergers or capitalize Rob's increase is some opportunities generics that side. then just on out with,

Arthur Przybyl

can't as the company And three generic not environment. levered is levered marketplace word just upheaval from that quite us a as down when is debt word to on I for much business remember target-rich business. up to right in a can't actually a be going and that that is a it, letter upheaval you today. four like So generic our is come over answer, you it

pay train that our some cash et opportunities Rob. and in does for public. assets quite beyond you to so the even FTC completely not XXXX finding street we XXXX the a that. really continue deals. to and put pressure we in amount we flow that when started of that believe all And us maybe we of really on this cetera, contribution It's as I the business us of are those described, job there our tremendous from divestiture and we went process think to for transaction compelling model He know frankly the and

So, for, of come in are opportunities hard compelling the same more and are that to the those type those the assets But for by. at marketplace time, there today. are more we look sale

as the on our eye have so, leverage. And and keep we cash we long watchful flow, as our

continued us have in opportunities we of compelling for in think terms transactions marketplace. I the

Dewey Steadman

Thanks Excellent. for color. the

Arthur Przybyl

you Thank Dewey.

Operator

And Cantor question line our Folkes final comes of from Brandon with Fitzgerald. the

Brandon Folkes

Hi, thanks quarter. taking on and for questions my the congratulations

Firstly, seeing going this into you and product in And of there? can you much just what's product about product the just bigger guidance year the you about thought talk and given quantitatively from be how ER may for launch your market dynamics methylphenidate that maybe that side on the question. in then how competitive in picture a market just are a all meaningful that - including you to is secondly, are that you

good I we the year XXXX within I business think your XXXX coming be and may your see us value are think Cortrophin and well. drivers got of think value in guidance of business another just beyond, some related we Thank will that we have as drivers onto But very the model XXXX there? as help the clear and base in think you you. can

Arthur Przybyl

formation it Really on you two reductions the backlog. significantly products OGD, back industry years in faster know competitive money increased three oral reasons, consortiums led price to under the the of and generics. ago, the approve market for competing with Infinite associated a pay there competition. came Well was also That for Alright. basis fact was OGD to the and then decided And their tremendous solid to when or share pressure remove Wisdom that the in business. several in

then, if certainly always I from competitive were solid - a product from always but obviously by of faster we Generic run were you think Office driven away Now, away a covering pressures started And little you saw - I EBITDA and one type looked associated concentration of significant say and amount at remember, was two a will to the risk as consortiums our so of initially have we being one from And have at time, or oral the know with ourselves rate plan brands of we know Company. approvals, bit. us out if diversify product we back by, don't in driving from we the you did Drugs. EBITDA to pivoting OGD generics additional one

fourth take numbers our business. quarter generic for Now versus brands if our you at a look

greater nice now than margins. are overall very our generic XX% at of brands Our revenues,

So we generic business. have ourselves found of solid of sake the terms destruction with oral those argument way price or a of goings associated on of from erosion to pricing insulate of in some some the

continued continue Okay. risk specific We certainly business object platform. have in mind to the with de-concentrate to associated any one

manufacture So resemble you back sell XXXX ground I in know generic - sake from will so for for you contract multiples are multiples associated we to pivot companies. that seen starting, recently as argument, with up, some And businesses but - of buy contract manufacture. you seen have

pivot capacity talked we the additional about. So it all for plus provides we us that like reasons

see potentially us additional You pivot platforms. could business to

injectables, injectable my something product. Brandon And background opportunity, in an largest okay. that us, interests and Our is so primarily it's is

would think continually like past business XXXX. model terms business advertisement about platform, in but that we to injectable looking potentially some So going necessarily always now of come about we are strategically at that out these in making an into of our ourselves talk move right I'm opportunities publicly making don't an and the

Okay.

in are a a drivers year model our out. And year EBITDA and transaction have without for compelling Company. and doubt flow We business objective been most the and cash based

money not our We this put to not of to dividends, to have back money our we it's our pay stock, okay. don't want type Company the buy shareholders. continually putting we what work, so And are. scenario we don't it's we work We for do,

number, it them amongst still And certainly without But, approximately we we factored a XXXX that are see approach. that that a our we that you the past purchase. That group and would a number going million so with to the changing see do it had time Teva to on compelling over eight been of And make $X.X management of And are into this a our and market little we to And question. going discuss go where we strategies guidance. a in launched but a or seven a asset us, into but we our don't that. nowhere in opportunity was milestone again, to to will be are specific based up. not associated as have go ER we into competitors on market, competitors, that, have had certainly, is If senior we conservative specific payment to asked about as case. Methylphenidate call see I part marketplace not

have a go to and and think your on when version into product we launched generation marketplace. So Brandon. we a about opportunity hope still revenue that question, have the good our for I up we answers we own nowhere margin

Brandon Folkes

again. Thanks thank congratulations very guys you much and and

Arthur Przybyl

Thank you Brandon.

Arthur Przybyl

forward there much. to like well. you And if for you Bye-bye. attending today is further thank Thank all as would just no our future very questions. the to look presenting everybody conference and I call business of in our

Operator

fourth quarter concludes call. XXXX earnings This you. Thank ANI's

and now day. may your a wonderful have at time disconnect lines You this

ANI Pharmaceuticals (ANIP) 27 Feb 192018 Q4 Earnings call transcript