LCI - Earnings call transcript Q4 2018

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Operator

Welcome to the Fiscal 2018 Fourth Quarter and Full Year Financial Results Conference Call. My name is A.J., and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]. is conference this note being recorded. Please now Investor Relations will turn the Jaffe, Robert to over for call I Lannett Corporation. Please go ahead.

Robert Jaffe

afternoon, discuss XXXX Thanks, us year Good everyone. you thank operator. for financial today results. to quarter Lannett fourth fiscal Company’s and full And joining

company’s today of broadcast the website. live call available A will or Financial the will at aspects Marty call implied. results Executive company’s future, for Safe and call Reform the all stated make the current remind forward-looking discussed could information to the and be three The like Lannett’s of the Tim differ Act. the www.lannett.com. I’d are On Officer. months management’s at Chief This on certain include is covered Crew, Officer; Litigation of statement Galvan, actual of those provisions Chief being today’s on that least is playback and information under cautionary from discussion materially company’s reflecting Harbor forecast everyone

encouraged goals. fiscal used company’s results Marty developments full Investors as Lannett’s XXXX provide detail, measures well companies. its the of today. in will addition, press US In are to are company’s earlier accordance and announcing in measures including from non-GAAP company's is discuss its comparable financial financial for release review near comments of most in earnings reasons will financial as reconciliation contained on by financial financial brief afternoon, financial The company’s release also results non-GAAP results XXXX other refer Tim This on announcement. the press we the guidance. earnings including fiscal measures the more the Principles GAAP recent and prepared in not quarter measures call, with Then directly the term issued non-GAAP remarks non-GAAP this fourth financial Accepted may to be that Accounting to and different the Generally year during for financial course measures

We over open call questions. the With the I for Tim call that Tim? to then said, turn will Crew. will now

Tim Crew

everyone. Thanks, good afternoon, Robert. And

For net full year, the and income fiscal XXXX fourth adjusted quarter grew net and period-over-period. sales

performance in our year detail comments on for more provided. the shortly. within discuss results of today the financial Marty light we the where financial overall will much will business Our My was see guidance recent we going in full events. focus range

continue will company week, contract announced As in contract was expiration distribute with they that customers transition will that renewed. expires That by assured products year. to the been of with that Pharmaceuticals supply March Levothyroxine orderly this work partner Jerome We’ve not the serve. its to distribution informed an three JSP for products supply to it Stevens through be including next will ensure contract and the closely our the the us and with we new patients

event by We are taking are and reality. our steps this disappointed of to operating address course new

XX% its our pipeline key With added XXXX. to comparing enhancing experienced as the fiscal Since progress year, further since efficiencies already in products fiscal new primary most market to our will and significantly committed increased growing augmenting growth regard have our expanding. continue by our to XXXX team JSP January plans, that Indiana also output management more our for operating Importantly we Furthermore, management have to to fiscal Seymour, time XXXX, reducing positions to we’ve thereby significantly while has costs. products this we is of some bringing even an business. contribute efficiencies, been of plant than

reducing operating two overheads. off Philadelphia unused for business also restructured and million about We Cody buildings Laboratories’ API in $XX and our sold refocused significantly

transferring our Seymour. that Philadelphia of consolidation primary We distribution also distribution the in our site center to function began

products including the year, this have partners pain of ER. have over approved Omeprazole, new we and initial later also the in-licensed about reductions product X UCB were some families. Also regard January With also to cost Endo. In portfolio launch planning of product but market made Fluvastatin, from to pipeline SG&A. of from value process yet and entering We’ve launched Methylphenidate XX ANDA Dronabinol our management our IMS XX the currently and than stages total, more through not These include are acquired an products, acquisitions targeted we’ve products, pipeline we launches, billion. approved in that and Diclofenac, now Finally, of products. since launch namely of

[Clarithromycin] covering we generic ANDAs partner products Concerta, have five have to be we obviously generic pool families filed lower Meanwhile, will year. and XX that continue generic ER. over values of already FDA. quarter, believe receive the Levothyroxine launched owned could we Moreover, currently ‘XX. Although approval fiscal we're products than final a of from our pool approval over market value new we potentially combined development are two internal in IMS Several targeting this and and actual In portfolio. include more the This billion. or These X sources from assessments. current XX of have be notably a FY of than product pending on following IM work which

since with to played mid-term. to we launched first the In addition, we deals real market in-licensing we the more on We advancing have in engaging in customers. than our to with in pipeline to our continue is substantially to improvements have years. bring significant previous new launched the the made deeply some products with products pride have two work and eight new January, speaks short more we which And

of and requires, lots we for some launch growth. our Levothyroxine aforementioned over contribute products these in revenue in currently we for today, full And need year future the eight forecasted for hands into the to course maintain pipeline cadence We in investments have revenues, importantly, a the XXXX. Nevertheless, of this future future. to of the as fiscal our with $XX million magnitude sequencing reevaluate of time products of

to investment revenue returns On process we flows. risk-adjusted an strong resulting side, develop in cash be ongoing believe to engaged are the and analyze we what to strategy our

working an our announced expense of budgets. We've Many we XXXX. versus earlier $XX have savings also are side, in believe We across approximately expenditures million compared the other that lines the table on over may affect all continued substantial fund on additional previously year. capital targeted to options discussion our On reduction capital sufficient to containments the cost plans. the targeted expense that Marty? to launches operations progression requirements on base expenditures current to we new flow that provide through obligations, Marty. from combined cost this have with from call With I'll turn and product business ensure liquidity will that, projected fiscal capital our cash

Marty Galvan

good Tim. And afternoon, everyone. Thank you,

earnings be As The also will schedule to can was earlier, GAAP financial to today's net I measures. non-GAAP in numbers mentioned our of non-GAAP sales a press the medical release.Our referring reconciliation found indication. by includes release be of

Now adjusted for the a financial basis. non-GAAP results on

period. or million fourth net quarter compared income profit net fourth $X.X million with sales million million prior net Net $XX.X $XXX.X XXXX was XX% million sales of Interest prior the million the was million, million $XXX.X quarter. million compared or million year for income $X.X year $X.XX was XXXX increased $XX.X quarter, SG&A fiscal fiscal million. compared $XX.X fiscal of expense quarter. for share $XX.X quarter. were $XX.X were fourth in of XX% XXXX. $XX.X Gross for compared adjusted $XX.X compared for from compared sales the $XX.X per with For $X.XX the million $XX.X year tax fourth compared $XX.X was million. million Operating diluted share to R&D Lannett prior to $XX.X per expenses million or with million. diluted with expense $XX.X attributable the or with Income fourth the with with expenses were

$XX.X Turning year compared was to expenses of million $XXX.X with adjusted expense per sales. adjusted was million million per million $X.XX XXXX. $XX.X income XXXX. fiscal was $XX.X declined the from compared or $XXX.X financial with $XXX.X income compared for sales of million diluted Net million expenses results. Net Gross for or compared million profit to our or XXXX. $XX.X with with were $XX.X for $XX.X $XX.X increased with million Interest $XXX.X diluted million or share share compared prior were million to $XXX.X expense with year. million. million. fiscal net fiscal were Lannett R&D net compared tax SG&A full with compared Income $XX.X attributable $XXX.X million million Operating for XX% to $XXX.X million. million $XXX.X sales $X.XX XX%

mentioned, cash sale we was our closed to Philadelphia our and Tim a Turning balance In for sheet. June XXXX, equivalents XX, million. cash and on totaled million buildings as July, $XX.X $XXX.X in two of million. At $XX.X debt

at balance proceeds cash this not from include does sale. XX Our June

expenditures fund projected throughout to our expect to have sufficient working also requirements flow fiscal and capital capital mentioned liquidity we Tim provide year. from obligations, current to As earlier, this operations cash

Turning to now guidance. our

ability reminder, to benefitted As our disruption two XXXX results products. fiscal fill supply our a for a financial from key

full in adjusted range to effective gross as tax R&D an to $XX to $XX XXXX be to from of adjusted expenditures year For to basis, $XX to million; and year interest $XX net $XX currently million in XX% XX%; million the a on the adjusted XX%; XXXX we adjusted million of SG&A in expense range in of of million; approximately range range XX% adjusted $XXX percentage sales rate sales $XX lastly, the the $XX margin to $XXX the to of net expense million expense capital $XX fiscal million; the expect ranging million. full million; of million in fiscal approximately adjusted

expenses products, the other mix. decrease QX be in expect midweek of launched -- This products manufacturing products plant, sales X our holiday our to launched with EPS approximately second million to customers Holiday, approved of July. a increasing by and yet maintenance decrease earnings, our QX. impact expect This to fiscal the will QX and adjusted strategic of that due XX% assume advance related $XX product product the the in and a we XXXX, of approximately reasonably regards previously launches and first launched by approved midweek the not approximately fiscal quarter. first after estimated of to Seymour in is operating XX% lower shutdown orders well guidance product compared and the as we accelerating July week include as of our in phasing offering includes relationships facility well not does sales net we are of with partially include changes Seymour as With driven to as June than the development. Guidance shutdown higher product XXXX through which our regarding be C-Topical sales increased quarters, maintenance With an in growth of customer Regarding plan we period. implementing recently quarter

to fiscal cash initiatives focused have. any savings maximize now Operator? not comments liquidity are profitability, overview, like are may at cost or you to address regard time. XXXX on providing we we addition, thoughts to would In Accordingly, and we this with any that With flow. questions

Operator

first [Operator you. Thank We'll our Dana the Sachs. Goldman begin ahead. session. from Instructions] now from Flanders question comes Please question-and-answer go And

Dana Flanders

thank revenue this but you that mentioned you and on and for know you get just -- Hi, first can were approved out think there? reasonably much you questions. the were My can what you Marty you're you I -- exactly I were just to touched including going -- just products parse very on launched. guidance, you expecting going

FDA on market? that C-Topical, that take based new heard product And not after the secondly And follow-up. you're dialogue right, then the quarter. change have off you. guidance with on including given fiscal a So versus I you've product on then second your past was that the one having how I to in then Is just and if launches? Thank

Marty Galvan

Dana. okay, Yes,

are our we been far them have so for yes, guidance. our in as products not addition our guidance have including yet that in -- are products approved are guidance, assumption in And launched that some the there approved. to of products and in that of been but an -- yet not are As some

degree our So we so in be have approved guidance. good included that will a confidence in of that’s also high and they time

As far C-Topical? as

Tim Crew

going the in We months C-Topical that on communication further from the had caution of we’ve are keep regarding XX for removal approval an eye to of product Dana from And FDA a from market. the no product. the

the that competitor market product. know the my we knowledge However, to yet has the not launched in

course we And perspective discussion directing that and a continuity perspective, forecasting there’s our sell in of certain for so to included potentially it the not to ongoing perspective supply continue product, have from a guidance. but opportunity

Dana Flanders

I quick opportunities maybe my that manufacturing Thank much on helpful. just further Cody? generating you a this time? do specifically and maybe that's couple I you you plans base Okay, your you. at how consolidate just and touch And out just of you’ve there Thank got delayed know know you over revenue touch investment mentioned Is an on follow-up. you for can additional Cody have Can ago. that, announcement months time. in And to opportunity you. your cost

Tim Crew

you previous the process primary remaining have our Thank and The question. that previously that manufacturing extending acquisition for plant ointments fairly in our the is years looking hoping York I an sequential we closing a as announced New up drives for site, marketplace City, that that to New long products fiscal consolidation of continues the we’re of ago other pipeline and continue of shuttering increasing demand. plant location the -- business unabated. is that we the is Philadelphia we’re where the and calendar that noted mix Carmel year our see consolidate in York some at volume complete Seymour result maybe they and plus liquids by my Seymour our this materially those is into as quarter-over-quarter products sites from There’s to end manufacturing commentary, that into the get fairly, year that

it expanding try and to that exactly of big to restructured goes, then we We to development that to our as business, the our spending contract part we shared portfolio services. at and that to going continue speed that our previously working or balance was look market. a arena, have have as with with manufacturers And where we’ll to relates facility Cody, announced are

C-Topical on targeting as little in side transfer the It see in our hope market not and So prices, bit products. what environment in so. for market But portfolio or much we is a SG&A contained out more and solid support company administrative has a of to location for manufacturing are to we significant. that given to which have future today that importantly management NDA it bring source pain are selection some is the our come freestanding didn’t that API year the the processes which

Operator

comes next Please Gregg question our And Deutsche Bank. from ahead. Gilbert from go

Gregg Gilbert

how Thanks. Marty, including us much for revenue a for first I few, have tell JSP you products? you’re fiscal ‘XX can the in

Marty Galvan

it’s we’re -- $XX we’ve and the assuming possibly run a Well seen the we’re quarter. for historical as ‘XX in JSP what million a primarily basically Levothyroxine rate -- the

Gregg Gilbert

same other on the the last And smaller call you the that for two highlighted products?

Marty Galvan

about Gregg $XX million the in Yes. there, In total total in guidance.

Gregg Gilbert

Okay.

the XX from XX% million on year flow XX the million Levo other a for looking you’re basically So quarter two? and of the in through fiscal

Marty Galvan

Yes.

Gregg Gilbert

products for or us quantitatively much not qualitatively help some they’re how yet in or in much to due either dialing approved particularly those launched approved? terms you’re approved different assuming as comfort you those see ‘XX Can on and fiscal of not not we two maybe revenue whether in you’re for buckets and

Marty Galvan

right. you’re So

approved in dialing $XX But we the not much. is in total, about million not the pieces, yet on two but backup step. We’re for price

launched alright. high been of not Half year. the yet we and part the this that approved for $XX confidence but I launched million degree $XX products half yet, of not yet is that the million million yet but have products $XX have see So have of of is approved spoke earlier that approved will we not this other

Gregg Gilbert

assumption? so I a at your ex understand, conversations And based what to assume there. just you’ve of as being I some had availability terms preliminary get with of share grounds just it’s the to assumptions opposed trade prices already in on

Tim Crew

time Again to a parameters. with better really I’ve market Tim. spent for a launch it's the Gregg, job while, do been here at the having in some team

and are so in for think in conversations that it’s in call are of getting come launch operation some we players we're always here So of us. XX that approved, market thoughtful include to not of large to of preparations. of not those readiness. for some really later of [volume]. the to Many with we're are and number our pool so prices products the the estimates guidance our the to it's it's the on back Customer in a ongoing spoke in front taking here we products yet -- very And conservative number level or stages

Gregg Gilbert

Tim. should about see to the existing assume that could cannibalizes products you Concerta, Okay. the that between or the on just that the in up you we And two product couple BX brought new one one? your market Generic a talk plus that growth

Tim Crew

at belief to markets. is actually current been for in there BX-rated believe as our and they approved the see that customers customer slightly market, hope we product possible, sure a different be stay points we We stabilized product we price a cannibalization, don't that that for We while of on that AB-rated expect product. extent level the labels BX It's material source year. are clear need the that will so later serving it the to want the can between product different the patient the and Methylphenidate this they The certainly those be from it's different but We to distinguish on that relates rest has it's current products product. to side.

be some incremental sales. to sale it optimism have We will as opposed that cannibalized

Gregg Gilbert

on ER, And variables that the Levothyroxine, whether can Methylphenidate you then opportunity key for you what factors gating are? and just the can what get there are frame and

Tim Crew

it approval. FDA scheduled end it's product in particular and targeted towards of earlier not the make The estimate later, it’s timing launches later for If -- of sequencing comes launch because the launch. the we guidance But will our fiscal our date in new Again process sooner. the that Again of it and end year. it material is the quarter. won’t it's comes towards it the of an the is in year. review If the

Gregg Gilbert

meaningful But term. a product longer potentially

Tim Crew

Correct.

Gregg Gilbert

comment you to can address structure around what the guys And point? that options Okay. here this. process that capital what can then you know least with at the about this the could timeframe to share don't exploring and us at talk on Thanks. I degree you're you lastly, But

Marty Galvan

Gregg. Yeah

it's So one. Marty, take that I'll

we're first all some So all today. of takes of options. This comments evaluating our

strong. we to this very could runway believe explore be at available remains sufficient we liquidity And to time Our here us. any option do have that

the we As you said provide expect as benefits -- financial them products we through we going have know continue through for March. to to March significant

then runways. runway we I said So have have here. we And as

in covenants for our time have we we again, prepared in make to fiscal compliance the evaluating for fiscal of interest -- But also the with options. be we we'll XXXX the -- and And our So we're said future remarks end expect certainly we payments. principal as year. debt through all the foreseeable

Operator

And comes question your Gary BMO from next Nachman from Capital Markets.

Gary Nachman

with First you XQ? said What last quarter half of XQ How the fiscal the per Levo look question, that are step the and in on million follow-up 'XX? line? the for Levo. you $XX Is assuming the that fiscal down of in for will back revenue flat

Marty Galvan

end Yes, I of so, let in going to it through is so -- mark right -- but our a him say, there $XX assumptions, is that…. new this In to to Tim and March, now million the the so, off I here we or the week have to news last we at am or pass that would on us. things comment

Tim Crew

of is the for in million our positions current market Levo of in conditions So, of realm like for value XX kind view a normalized share bucks.

products would lot drive be lower is March. It out and on there always There competitors value. is moving number don't we possible have of a to here, forecast that horizon through our of in the right. However,

of and a inventory never We the always the given Levothyroxine had that has this of Levothyroxine there our volume [XXX]. mind history high significant been sensitivity, interested on plans, that fact and maintaining disruptions note patients good makes also fairly of competitors one in fact customers remain

forward how be unfolds. And course those upside in based actually really rates of management business go million, are is conditions on that projection variations market to run our as to there well and how on $XX our that will from market -- evolve. order So, based there the

Gary Nachman

product, And what in margins, low XXs, I to for for mean us would but be XXs the margin Levothyroxine? that said you Levo? do high so without then fiscal math without gross Marty the XX% on XX% to XX% be the that's gross please a 'XX,

Marty Galvan

math low the XXs. the usually works it think I we out to do about

Gary Nachman

know more XXs this but distributor you're over I so, And going margins, type doing for stay a low just not point you're than the 'XX, little time? gross potentially or now the fiscal in the that that that bit at trending go out agreements. Should the lower on

Marty Galvan

little right that a There lot comment on now. that now. to It's we're right question hard on was working

and the looking is indicated, With different the time products new also expense also in coming some categories initiatives that to implement. board, at launches, new licensing. on my expense indicated there reduction remarks Tim as substantial take we're

you as the look after sold the of at sales when statement our single our So number on goods cost largest number. income

terms expense huge a So is we areas the there. of Company. same money There and productivity improving and amount that spend of opportunity time there's a efficiency of reduction of also of in

an So, our we're a much we guess on in the XXXX have XXXX. and we up we what into the future Levothyroxine will but impact will listing, have all initiatives embarking these fiscal on momentum fiscal on assumed not as cost now, look future, as beyond be in with hand that other pick

Tim Crew

if our to I But probably licensing Tim products, probably make, with FDA clarifying are components, efforts there comment the this pipeline that's is in it's pending there here true. a the haven't and alluded itself, increased two right, at on you can have. And

owned I also approved that bucket large in workings to We have those that mentioned and are that and yet launch. do XX

good and a assets. both owned there's part in developed blend So any the assets, of term fairly assets and

partnering this go which alone of part product I we as example which year significant and to we're the purely great metolazone, be is that market won't a high it would having shares portfolio. margin So, marketplace. forward later plan of in our launched

Gary Nachman

Okay. And question. last then

better cost initiatives just it G&A? most whether dramatic cutting terms manufacturing anything focused us types of? of it's give you're of just or in you magnitude of infrastructure thinking would little be the on initiatives, R&D order Are cutting you sounds of sense side. cost of a the but You of of a briefly mentioned Can thinking the bit like more

Tim Crew

to at operating beyond we Yes. looking our for of It reduce cost. cut simply virtually all ways lines and like expense are expenses capital is

XXXX. story trying and in that the Our net Levo fundamental are sort we're articulating through today is we of new

We are costs, cut optimize trading spending both be and in our much provided near expense and of accelerate parts to expand debt. term can that also full our there's cash to of the maturations energy result well reductions as eye all going a And time balances effect course that trying and of a profits keep juncture, we some of [indiscernible] the off of XXXX. as and some long implement as term launches, that this as get take product moving at portfolio value an and to lot time our our into to targeted of Marty to as have more we we the as guidance future reflects during some year our that a these

Operator

And Elliot from question Raymond from your Wilber next comes James.

Elliot Wilber

some based the quarter? channel everyone sounds around want Just that, expect wouldn't wouldn't then to have of what quarter headed was Tim, your point comments agreement be I a there not Levothyroxine guess benefit just clarification breakdown was you why what inventory to maybe expected a But And a of you're that's into occur? in in full some like that. the fiscal anticipating, anticipating of that I sort March that 'XX. of the on that such you quick trends necessarily on get clarification of transition

Tim Crew

an supply transition that JSP theirs. our distribution in conjunction on emphasis with ensure to and transition from Well, to and focus our orderly and partners again

it straightforward. perhaps depends are through contract maintain currently we that and It actually expecting get speak customers in customer's forecast in direction best make in it's should quite You long because not again we so expiration. upon and our how to the interest product good could the

Elliot Wilber

then competitive on visibility conservative And pretty in seems wouldn't Okay. to see even gears assuming around shifting continue year, about in you the fact that fact actually usual product like just this on December issues. back C-Top, then any it entry? based calendar movement comments earlier seems beyond FDA may just occurs market a And these discussion your or when

Just want your to on those comments? get thoughts

Tim Crew

that's is Well, possible this I that and a think appreciate comments your certainly world. in scenario

is very Obviously, product. show again, we're I can are selling continued based -- will be that FDA that continuing assumption the the existing in the about continue ensuring But terms there exist that do to does a discussion market patient number could think time sure it's in of ensuring approval is product not on that options the that making conceptually of create that supply. FDA that the But that thoughtful FDA not product. if be guidance, marketplace. for I we by think to access

Elliot Wilber

anything in you or with of establish to or there own this point a little confidence share tell us at could you bit respect us of bit Is that help more little with light terms your of shed help a filing approval? or might maybe timeline approval realization of

Tim Crew

the prove successfully our XXXX, we reflected anticipated that that the nature target work and approval. complete letter just response of under it. later on of that letter some process continue action that still and indicated on with conversations a further in them. we work part completed think based deficiency The is date to earlier receive work development to we’ve on we around I if did approval That is additional toward

Elliot Wilber

a couple questions Thanks value just numeric maybe of well. as products. Then the some terms in of additional a the quick on and of also for pipeline couple additional providing clarity

mentioned. already those Beyond

this where that. any to other optionality reflected much them may that than a new to at in point? just there’s are you, seems special potential you in quick upside in and Maybe they unique evaluation higher if that at kind about have wondering, assets that there market of first generally be some to or expectations Just look any follow-up

does of and which oxycodone or What on it of restructuring and we sure dexmethylphenidate out plan Cody. for are products came what’s where of or not, kind or at the with your Just approvals hydrocodone those? you terms that facility on not the of leave is those in

Tim Crew

not I'll sourced launch in of portfolio our the approved products from in take couple order. which Cody with our reverse it that pain site. a in larger the API sequences, are questions are and have perhaps are Start

for bring well, assets. so And there or scale, larger market. efficiencies launch are some in we the from a those effective changes still Cody therefore, competitive how opportunities parties scale And to approach made sourcing on timing potential third some a probably products to is by what of we’ve that

the relates in changes is parts solace more a moving valuable. the market As products with of again take sort becoming lot these ongoing smaller I pipeline, days. and of this

large in today, point other diclofenac getting This market the market marketplace of to many today. up is again the we've and value coming the $XX value. So the products of of sort launched we of of million launched that out to how metolazone

relates methylphenidate, gives of one the really first we the sort established market. the discrete thalidomide, or maintain sort into is rate we pipeline it’s obviously of of as of seven it previous into fiscal months basket further awareness from products and got run As we fairly about expanded launch sorts products our in the our competitive opportunities, aside the settlement but that reasons us the those year, of of our markets next confidence on for it to look and

Operator

from comes Hewitt Please Craig-Hallum. Matt question from next Our go ahead.

Matt Hewitt

me I couple for questions pipeline. Good afternoon. regarding A the guess

the How, the guess seems large going to fourth of are how to continuing. launches? frontend cash the similar or are, of the number cadence about first the could that think quarters. more with manage is, And loaded here that when the to little it we've questions position follow-up seen You’ve year then pretty I talked like few half that guess QX? here about in in be a you you I what the what Is next quarter calendar

Marty Galvan

coming in or are six approval late of pain XX realm are or so nearing products, we expect be seven cadence XX net had six of go. and launching speak XX months. seven launches we’re products as so last stage do products the to the we that seven The have is up so around launches, talk of we for seven to we’ve that months, We’ll of example. or a perhaps been ready number the We result a again, those as or to in

products previously of we having readiness plan existing our of look most an So, as forward course and operational approved. these

is that out constrain got be of that this sort competitive position, this backend to, for seven before could middle progressing, into coming That and and launches And they’ve of opportunities prioritized. But the back of expect because I to several be and it’s not here be too could is loaded. pool every think market. we’re less. large year, it’s not in half more, so cadence to So But progressed it gives to it our push very don’t year call performance. will it We with exact have or get of want they a speak product launches quarter launching. are people products there of explicit

Matt Hewitt

you And I the you Obviously, products. from timing cash there’s will the amount end, a piece? standpoint, mean, that’s significant how which of products the get given that that do or to cash the balance but on can of those see you required how products upfront balance back

Marty Galvan

on the the upfront they assumptions our side we’re cash transactions a the into of these -- that plans. mean say, the thinking XXXX. effect strong for if these any do in elements on our it but work it’s see don’t cash expectations control. for people to would business in have I supply chain, our which our things this And mean there’s working capital that inventory obviously part were purposes, fiscal share that our profit capital working to working these working like business, that been price of I on when Well, to launches are And it about and of purchase aspect most I an owned. you’re I basis the some

Tim Crew

for kind can We XX, you’ve launch cash now generating January flows, already don’t XX I launched automated just since looking right? of products those one COGS, a price are cash. of obviously. millions something they the are that. is high that since asking cost I just about structure, Because price part are ones smaller or a low-double-digit scheduled now single work lower It’s of expenditures. to guess, products if all in market product bunch and add, you’re $XXX calendar get existing huge And some a out but out a you’re There’s of portion the of our products the the COGS suggesting. There these month. saying steady ramp cost products has course a market on up are that a capital our kind of I’m more year. here unfortunately that is has never a over or the And inventory that nothing like inventory to of expensive million that These have again do of sequencing all

any products. our that We from in full haven’t shift of bullet seen expectations

Operator

Roth next Capital. your comes Henry question And with Scott from

Scott Henry

goodwill no would of confirm just debt fiscal quarter confirm material just that your to of I covenants? first in want spoke to on a impact you ’XX. to impairment I have current guess

Marty Galvan

Scott, Correct. correct. as understanding, that’s as -- our There is far

Scott Henry

the top Stevens then always standpoint, big generators And be Could to picture or of four drive what key Lannett’s kind drugs are in a your from world? that you revenue to Jerome four just expected income statement. three a speak post had

Tim Crew

Okay.

The continues the here. had I continued strong, and in mean going start in I’ll Company. and be this think significant going list some fiscal in down the to going in a list. the to of just key was be supply less sumatriptan products, that. I fiscal, ’XX so ’XX, can in products Yes, take with a It’s shortage product it’s the fiscal We’ve products two less my be I market. Scott, down expecting with to we’re the be ’XX there one to changes,

and seeing of are on to So, on price that those largest, came is think I've larger be the largest we’re particular that. our take continues think going ursodiol to I one the product. I larger be still I that larger now. that’s able significant products diclofenac, onboard ones. is advantage also hit to the Metolazone, products. erosion And one hit of The although metoprolol There ones the of

Marty Galvan

the we could how are to wanted obvious comment, get hope diversification. not that to it’s here these I definition we all what continue by diversified If we launches, product and business make more a

may it make not diversified there. and looking as as we’re tenants be of FY to feel full we’re our get XXXX, case of hardest and we that the by So, sure such we possible when

Scott Henry

script And strong the cardiovascular some your the then quarters. digoxin, other commentary the not for what’s has products. it's the two perhaps appeared been in That to the section? in cardiovascular line, trends share of match with the But in the one clarify question to it’s market Could you I on seems which digoxin gains up say verbal mentioned. strength just that driving past

Tim Crew

Yes. calendar Scott, it's metoprolol that in came out year. back beginning in the the

again, increase the to see metoprolol. QX. then what is you’ll you’re from So, much from QX, And saying pretty QX, QX

saw fiscal we quarter, the our in addition to third from In volume sequentially fourth. additional fourth

but there, before product in metoprolol. of sales. half that you largest quarter said is had the atorvastatin growth example fourth For some as single about It’s now category the

right significant is year, you the So, this are saw in so increases products that maybe cardiovascular increase in fourth XX category less in and the or third now. quarters that

Scott Henry

the if Okay, think correctly. to how market final And the the product a I recall just product? that in of Could thalidomide potential? believe great. comes of the I from it should about magnitude you talk question, we March And XXXX, to revenue

Tim Crew

It’s, plans at our think we that as on XXXX, to time. don’t is and talk stage of I commercial date the this mentioned particular to August settlement earlier particular want

Operator

question-and-answer over I’ll the remarks. closing our And to turn management for that session. concludes back call now

Tim Crew

our and to this progress look you next scheduled on joining forward We evening. Thank afternoon sharing call. regularly the us everybody for

Operator

you and Thank gentlemen. today’s you, participating. concludes conference. for Thank ladies This

disconnect. now may You

Lannett (LCINQ) 28 Aug 182018 Q4 Earnings call transcript