Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX
Amneal Pharmaceuticals — Q2 2020 Earnings Presentation
31 slides from Amneal Pharmaceuticals's earnings presentation, Aug 6, 2020
Slide 1: Q2 2020 Earnings Call
Q2 2020 Earnings Call Strategic Priorities and Financial Results August 6, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation, 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
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 o
Slide 4: Agenda
Agenda Strategic Execution 1 Chirag and Chintu Patel, Co-CEOs Q2 2020 Financial Results 2 Tasos Konidaris, EVP & CFO Closing Remarks 3 Chirag Patel, Co-CEO 4 Q&A 4
Slide 5: Continued Growth & Operational Excellence
Continued Growth & Chirag and Chintu Patel Operational Co-CEOs Excellence 5
Slide 6: Executing on Our Strategic Priorities
Executing on Our Strategic Priorities Solid Financial Performance Grow our Base Business Revenue: $465 Million; +15% Revitalize Generics with new product launches and Adjusted EBITDA: $101 Million; +9% increasing market share in base business Adjusted EPS: $0.13; +44% Grow Specialty by focusing on R
Slide 7: Focused on Patients While Managing Through COVID-19
Focused on Patients While Managing Through COVID-19 Strategic Task Force of Top Leaders Guiding Our Preparedness, Response, Mitigation & Continuity Generics / Specialty • Select products experienced lower demand as a result of social distancing, delayed doctor visits, and elective surgeries • Generi
Slide 8: Continuing Generic Pipeline Execution
Continuing 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. All trademarks are the property of their
Slide 9: Generics Pipeline Focused on Complex & Differentiated Dosage
Generics Pipeline Focused on Complex & Differentiated Dosage ANDAs Submitted (Pending + TA): 91 Projects Development Pipeline: 132 projects 1% 1% 2% 3% 5% 4% 6% 1% 13% 8% 8% 12% 43% 9% 11% 7% 8% 16% 13% 29% Inhalation Nasal Spray Transdermal Inhalation Nasal Spray Transdermal Oral liquid Oral liquid
Slide 10: Driving Results in Specialty Franchise
Driving Results in Specialty Franchise Strong Results this Quarter Demonstrate Our Solid, Scalable Foundation Growing franchise by focusing on marketing execution, building Marketing initiatives are gaining traction and driving topline KOL relationships, and rapidly adapting to the changing revenue
Slide 11: Maximizing Well-Established Specialty Footprint & Infrastructure
Maximizing Well-Established Specialty Footprint & Infrastructure Building a Leading Position Offering Proven Options Partnering to Bring Important in Movement Disorders for Migraine Patients Neuromuscular Treatments for Patients IPX203 K127 Neurology Development Orphan Drug under development Program
Slide 12: Diversifying Our Distribution Channels with AvKARE
Diversifying Our Distribution Channels with AvKARE Growing Our Business and Identifying New Opportunities to Better Serve Government Agencies: About AvKARE Platform Well-Positioned for Growth Q2 2020 Financial Results In Line with • One of the largest private label • Generic manufacturers outsourcin
Slide 13: Financial Review
Financial Review Tasos Konidaris EVP & CFO 13
Slide 14: Q2 2020 Results
Q2 2020 Results Adjusted Results(1) Variance The addition of AvKARE, cost management and new products drive EBITDA growth versus prior-year $ in millions Q2 2020 Q2 2019 Q1 2020 YOY Sequential Revenue 465 405 499 15% -7% • Revenue YOY growth due to: AvKARE(2) ($64 million), EluRyng, Sucralfate and S
Slide 15: Generics Segment
Generics Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $335 $353 $307 $103 42% 34% 35% $65 $62 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Year-over-year decrease: price erosion due to Year-over-year operating efficiencies and product Year-over-year
Slide 16: Specialty Segment
Specialty Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $94 $50 $88 82% 75% 74% $39 $39 $70 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Year-over-year increase: higher sales of Rytary® Year-over-year decrease: primarily due to the Year-over-year inc
Slide 17: Balance Sheet and Liquidity
Balance Sheet and Liquidity $ millions Liquidity at June 30, 2020 As of December 31, As of June 30, 2020 2019 Current portion and long-term debt(1) 2,794 2,631 Cash and cash equivalents $268 Cash and cash equivalents(2) 268 153 ABL Available $414 Net Debt(3) 2,526 2,478 Gross Debt to LTM Adjuste
Slide 18: Reiterating 2020 Financial Outlook
Reiterating 2020 Financial Outlook(1) (in $ millions except for Adjusted Diluted EPS) 2020 Guidance Net Revenues $1,875 - $1,975 Adjusted Gross Margin 44% - 46% Adjusted EBITDA $400 - $450 Adjusted Diluted EPS $0.45 – $0.60 Weighted Average Diluted Shares Outstanding(2) ~300 million Operating Cash F
Slide 19: Key Takeaways
Key Takeaways Strong operational and financial Highly adaptive to COVID-19 Relentless focus on performance in Q2 despite COVID reinvigorating the company • Proactive planning • Sound strategic focus with • Building on our recent success, momentum in execution • Resiliency and dedication of we contin
Slide 20: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations 20
Slide 21: Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation of Net (Loss) Income to Adjusted Net Income and Calculation of Adjusted Diluted EPS ($) in thousands Three months ended June 30, 2020 June 30, 2019 March 31, 2020 Net (loss) income $ (23,944) $ (50,526) $ 121,517 Adjusted to add (deduct): Non-cash interest 1,998 1,617 1,866 GAAP Incom
Slide 22: Gross Debt and Net Debt to LTM Adjusted EBITDA
Gross Debt and Net Debt to LTM Adjusted EBITDA ($) in thousands Last Twelve Months June 30, 2020 December 31, 2019 Current portion of long-term debt, net 29,756 21,479 Long-term debt, net 2,764,578 2,609,046 Cash and cash equivalents and restricted cash 268,272 152,822 Net debt 2,526,062 2,477,703 A
Slide 23: Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA ($) in thousands Three months ended June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Net (loss) income $ (23,944) $ 121,517 $ (64,903) $ (363,392) $ (50,526) $ (124,752) Adjusted to add (d
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 June 30, 2020 June 30, 2019 March 31, 2020 Operating income (loss) $ 26,516 $ 4,886 $ 81,837 Adjusted to add (deduct): Acquisition and site closure expenses 4,188 10,885 4,600 Amorti
Slide 25: Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold
Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold ($) in thousands Three months ended June 30, 2020 June 30, 2019 March 31, 2020 Cost of goods sold $ 319,666 $ 296,381 $ 313,578 Cost of goods sold impairment charges 759 3,012 1,456 Adjusted to deduct (add): Amortization 35,966 34,7
Slide 26: 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 June 30, 2020 June 30, 2019 March 31, 2020 Cost of goods sold $ 218,909 $ 263,423 $ 218,865 Cost of goods sold impairment charges 759 3,012 1,456 Adjusted to deduct: Amortization
Slide 27: Reconciliation of Specialty Operating Income to Adjusted Operating Income
Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income ($) in thousands Three months ended June 30, 2020 June 30, 2019 March 31, 2020 Operating income $ 23,569 $ 16,536 $ 9,867 Adjusted to add: Amortization 25,445 20,159 25,446 Acquisition and site closure expenses 83 2,
Slide 28: 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 June 30, 2020 June 30, 2019 March 31, 2020 Cost of goods sold $ 50,229 $ 32,958 $ 47,818 Adjusted to deduct: Amortization 25,445 20,160 25,446 Adjusted cost of goods sold (Non-
Slide 29: Reconciliation of Research and Development to Adjusted R&D
Reconciliation of Research and Development to Adjusted Research and Development ($) in thousands Three months ended June 30, 2020 June 30, 2019 March 31, 2020 Research and development $ 45,572 $ 48,016 $ 36,379 IPR&D impairment charges — — 960 Intellectual property legal development expenses 3,550 2
Slide 30: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of Selling, General & Administrative to Adjusted Selling, General, & Administrative ($) in thousands Three months ended June 30, 2020 June 30, 2019 March 31, 2020 Selling, general and administrative $ 80,944 $ 67,281 $ 77,976 Adjusted to deduct (add): Amortization 8,010 — 6,480 Stock-
Slide 31: Amneal
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