Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX
Amneal Pharmaceuticals — Q4 2019 Earnings Presentation
30 slides from Amneal Pharmaceuticals's earnings presentation, Feb 26, 2020
Slide 1: Q4 and FY2019 Earnings Call
Q4 and FY2019 Earnings Call Amneal 2.0 Strategic Priorities and Financial Results February 26, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward- looking statements include statements regarding management’s intentions, p
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures, including adjusted EBITDA, adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted gross margin, and adjusted operating income, which are intended as supplemental measures
Slide 4: Agenda
Agenda 1 Strategic Priorities Chirag and Chintu Patel, Co-CEOs Q4 and FY19 Financial Results & 2 Guidance Todd Branning, SVP & CFO 3 Closing Remarks Chirag Patel, Co-CEO 4 Q&A 4
Slide 5: Strategic Priorities
Strategic Priorities Chirag and Chintu Patel Co-CEOs 5
Slide 6: Amneal Today, Amneal 2.0
Amneal Today Amneal 2.0 Building On Significant Momentum Leading Rebuilding Amneal As A Differentiated Into 2020 Pharmaceutical Leader Great progress addressing inefficiencies across the business Revitalize and focus R&D Continuing to execute with urgency to manage costs and strengthen Complete stra
Slide 7: Extracting Additional Value from Generics Business
Extracting Additional Value from Generics Business Optimizing value of diverse and growing portfolio of 225+ generics products Strategic shift of focus to products Strength in complex generics and Key to winning over competition is with higher barriers to entry dosage forms positions us for operatio
Slide 8: Ensure Continued Generic Pipeline Execution
Ensure Continued Generic Pipeline Execution What We’ve Done: What’s Next: 1 Notable Complex Generic Launches Continued Pipeline Execution Generics Injectables Transdermal Topical/Ring Oral Solids Liquid/Nasal Ophthalmic 8 (1) Generic versions of innovator products.
Slide 9: Generics Pipeline Focused on Complex & Differentiated Dosage
Generics Pipeline Focused on Complex & Differentiated Dosage ANDAs Submitted (Pending + TA): 97 Projects Development Pipeline: 80 projects Nasal Spray 1% Transdermal 1% Inhalation 1% Otic 1% Transdermal 4% Nasal Spray 4% Inhalation 4% Topical 7% Oral Liquid 5% Oral Liquid 7% Topical 10% Ophthalmic 7
Slide 10: Growth and Value Creation in Specialty Franchise
Growth and Value Creation in Specialty Franchise Building on solid, scalable foundation to maximize exposure in key category Strengthening operational execution of well-established Delivering results with topline prescription infrastructure and footprint in Neurology and growth in key brands Endocri
Slide 11: Maximize Well-established Specialty Footprint & Infrastructure
Maximize Well-established Specialty Footprint & Infrastructure Building a Leading Position Offering Proven Options for Partnering to Bring Important in Movement Disorders Migraine Patients Neuromuscular Treatments for Patients Neurology IPX203 K127 Development Orphan Drug under development as Progra
Slide 12: Financial Review
Financial Review Todd Branning SVP & CFO 12
Slide 13: Q4 and FY 2019 Results
Q4 and FY 2019 Results Adjusted Results(1) Variance Revenue and Gross Margin impacted by: ▪ Price erosion due to additional competition on our existing product Q4 Q4 Q3 portfolio YOY Sequential $ millions 2019 2018 2019 ▪ Sale of international businesses ▪ 37 new generic products launched during 201
Slide 14: Generics Segment
Generics Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $150 $411 $291 $300 45% 30% 33% $49 $40 Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 ▪ Year-over-year decrease: price erosion due to ▪ Year-over-year decrease: price erosion, product ▪ Year-over-year d
Slide 15: Specialty Segment
Specialty Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $97 $51 $87 $87 $46 81% $41 74% 75% Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 ▪ Year-over-year increase: higher sales of Unithroid® ▪ Year-over-year decrease: primarily significant ▪ Year-over-year
Slide 16: Cash Flow and Balance Sheet Information
Cash Flow and Balance Sheet Information $ millions $ millions Q4 2019 Q3 2019 Change $321 $305 Cash and cash equivalents(5) $153 $217 ($64) Accounts receivable $604 $518 $86 Current portion and long-term debt(1) $2,631 $2,636 ($5) $37 $5 $10 $217 $28 Cash flow from operations ($51) $140 --- $153 Gro
Slide 17: 2020 Financial Outlook
2020 Financial Outlook(1) (in $ millions except for Adjusted Diluted EPS) 2019 2020 Outlook Net Revenues $1,626 $1,875 - $1,975 Adjusted Gross Margin 44% 44% - 46% Adjusted EBITDA $356 $400 - $450 Adjusted Diluted EPS $0.35 $0.45 – 0.60 Weighted Average Diluted Shares Outstanding(2) Approximately 29
Slide 18: Closing Remarks
Closing Remarks Chirag Patel Co-CEO 18
Slide 19: Q&A
Q&A
Slide 20: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations 20
Slide 21: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 June 30, 2019 March 31, 2019 Net loss $ (64,903) $ (20,330) $ (363,392) $ (50,526) $ (124,752) Adjusted to add (deduct): Interest expense, net 38,829 42
Slide 22: Gross Debt and Net Debt to LTM Adjusted EBITDA
Gross Debt and Net Debt to LTM Adjusted EBITDA ($) in thousands Last Twelve Months December 31, 2019 September 30, 2019 Current portion of long-term debt, net 21,479 21,468 Long-term debt, net 2,609,046 2,614,412 Cash and cash equivalents and restricted cash 152,822 217,058 Net debt 2,477,703 2,418,
Slide 23: Reconciliation of Net Loss to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted EPS ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Net loss $ (64,903) $ (20,330) $ (363,392) Adjusted to add (deduct): Non-cash interest 1,629 1,640 1,631 GAAP Income ta
Slide 24: Reconciliation of Generics Operating Income to Adjusted Operating Income
Reconciliation of Generics Operating Income to Generics Adjusted Operating Income ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Operating (loss) income $ (3,093) $ 43,070 $ (80,361) Adjusted to add (deduct): Acquisition and site closure expenses 6,028 20,
Slide 25: Reconciliation of Generics Cost of Goods Sold to Adjusted
Reconciliation of Generics Cost of Goods Sold to Generics Adjusted Cost of Goods Sold ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Cost of goods sold $ 224,708 $ 263,002 $ 217,773 Cost of goods sold impairment charges 13,721 — 49,115 Adjusted to deduct:
Slide 26: Reconciliation of Specialty Operating Income to Adjusted Operating Income
Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Operating income $ 18,012 $ 24,010 $ 3,596 Adjusted to add: Amortization 24,695 18,848 27,103 Inventory related charges — 5,6
Slide 27: Reconciliation of Specialty Cost of Goods Sold to Adjusted
Reconciliation of Specialty Cost of Goods Sold to Specialty Adjusted Cost of Goods Sold ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Cost of goods sold $ 48,665 $ 41,118 $ 49,944 Cost of goods sold impairment charges — — 7,017 Adjusted to deduct: Amortiz
Slide 28: Reconciliation of Research and Development to Adjusted R&D
Reconciliation of Research and Development to Adjusted Research and Development ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Research and development $ 48,050 $ 57,297 $ 38,125 IPR&D impairment charges 450 38,609 23,382 Intellectual property legal develo
Slide 29: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of Selling, General & Administrative to Adjusted Selling, General, & Administrative ($) in thousands Three months ended December 31, 2019 December 31, 2018 September 30, 2019 Selling, general and administrative $ 74,084 $ 71,236 $ 63,797 Adjusted to deduct (add): Stock-based compensat
Slide 30: amneal
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