Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX
Amneal Pharmaceuticals — Q1 2020 Earnings Presentation
32 slides from Amneal Pharmaceuticals's earnings presentation, May 11, 2020
Slide 1: Q1 2020 Earnings Call: Strategic Priorities and Financial Results
Q1 2020 Earnings Call Strategic Priorities and Financial Results May 11, 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 COVID-19 Response and 1 Strategic Priorities Chirag and Chintu Patel, Co-CEOs Q1 2020 Financial Results & 2 2020 Full Year Guidance Tasos Konidaris, SVP & CFO Closing Remarks 3 Chirag Patel, Co-CEO 4 Q&A 4
Slide 5: COVID-19 Response and Strategic Priorities
COVID-19 Response and Chirag and Chintu Patel Strategic Co-CEOs Priorities 5
Slide 6: Protecting Our Stakeholders and Combatting COVID-19
Protecting Our Stakeholders and Combatting COVID-19 Strategic Task Force Comprising Top Leaders Guiding Our Preparedness, Response, Mitigation & Continuity Employees and Communities Patients Suppliers, Third-Party Partners, Customers & Healthcare Providers • Prioritizing health and safety • Donated
Slide 7: Executing on Our Strategic Priorities
Executing on Our Strategic Priorities Improving operational execution Revitalizing the generics business Strengthened supply chain, increased plant Built on base business and drove new product utilization, reduced costs and addressed launches, including recent launch of generic inefficiencies – all
Slide 8: Strengthening the Generics Business
Strengthening the Generics Business Working Aggressively To Expand Sales, With Approximately 250 Generics Products Currently Marketed Strengthening the base business & Leveraging our strong R&D Pursuing opportunities to grow driving new product launches capabilities to rapidly progress the through n
Slide 9: 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 9 (1) Generic versions of innovator products.
Slide 10: Generics Pipeline Focused on Complex & Differentiated Dosage
Generics Pipeline Focused on Complex & Differentiated Dosage ANDAs Submitted (Pending + TA): 95 Projects Development Pipeline: 94 projects Transdermal 1% Inhalation 1% Nasal Spray 5% Nasal Spray 1% Transdermal MDI/DPI 5% 3% Oral Liquid 6% Oral Liquid 9% Ophthalmic 7% Topical 10% Topical 8% ER Tabs/C
Slide 11: Driving Results in Specialty Franchise
Driving Results in Specialty Franchise Strong Results in the Segment this Quarter Demonstrate Our Solid, Scalable Foundation Growing franchise by focusing on strategic selection of Marketing initiatives are gaining traction and driving topline products & leveraging strong existing infrastructure rev
Slide 12: 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 13: Diversifying Our Distribution Channels with AvKARE
Diversifying Our Distribution Channels with AvKARE Growing Our Business and Identifying New Opportunities in Which We Can Better Serve Government Agencies: Platform Well-Positioned for Growth Q1 2020 Financial Results Exceeded Expectations • Generic manufacturers outsourcing greater share • Reported
Slide 14: Financial Review
Financial Review Tasos Konidaris SVP & CFO 14
Slide 15: Q1 2020 Results
Q1 2020 Results Adjusted Results(1) Net Revenue growth to Q1 2019 driven by AvKARE, EluRyng, Variance Sucralfate and Specialty segment; partially offset by divestiture of International, and competition to Levothyroxine Sodium Tabs and $ in millions Q1 2020 Q1 2019 Q4 2019 YOY Sequential Diclofenac
Slide 16: Generics Segment
Generics Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $383 $353 $300 $97 $103 42% 42% 33% $49 Q1 19 Q4 19 Q1 20 Q1 19 Q4 19 Q1 20 Q1 19 Q4 19 Q1 20 Year-over-year decrease: price erosion due to Year-over-year operating efficiencies and product Year-over-year
Slide 17: Specialty Segment
Specialty Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income $97 $88 $46 83% 75% 75% $39 $64 $29 Q1 19 Q4 19 Q1 20 Q1 19 Q4 19 Q1 20 Q1 19 Q4 19 Q1 20 Year-over-year increase: higher sales of Rytary® Year-over-year decrease: primarily due to the Year-over-year inc
Slide 18: Balance Sheet and Liquidity
Balance Sheet and Liquidity $ millions Liquidity at Mar 31, 2020 As of March 31, As of December 31, 2020 2019 Current portion and long-term debt1) 3,102 2,631 Cash and cash equivalents Cash and cash equivalents(2) 407 153 • $407 ($207 adjusting for $200M return to ABL) Net Debt(3) 2,695 2,478 Gross
Slide 19: 2020 Financial Outlook
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 $0.45 – 0.60 Weighted Average Diluted Shares Outstanding(2) Approximately 300 million Operating Cash F
Slide 20: Key Takeaways
Key Takeaways Proactive response to the Strong operational and Relentless focus on COVID-19 pandemic financial performance in Q1 reinvigorating the company • Mobilized quickly to • Results reflect the • Building on our recent ensure the health of our strength of our momentum, we continue employees a
Slide 21: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations 21
Slide 22: Reconciliation of Net Income (Loss) to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation of Net Income (Loss) to Adjusted Net Income and Calculation of Adjusted Diluted EPS ($) in thousands Three months ended March 31, 2020 March 31, 2019 December 31, 2019 Net income (loss) $ 121,517 $ (124,752) $ (64,903) Adjusted to add (deduct): Non-cash interest 1,866 1,601 1,629 GAAP
Slide 23: Gross Debt and Net Debt to LTM Adjusted EBITDA
Gross Debt and Net Debt to LTM Adjusted EBITDA ($) in thousands Last Twelve Months March 31, 2020 December 31, 2019 Current portion of long-term debt, net and Revolving Credit Facility 329,736 21,479 Long-term debt, net 2,772,029 2,609,046 Cash and cash equivalents and restricted cash 406,925 152,82
Slide 24: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA ($) in thousands Three months ended March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Net income (loss) $ 121,517 $ (64,903) $ (363,392) $ (50,526) $ (124,752) Adjusted to add (deduct): Interest expense,
Slide 25: Reconciliation of Generics Operating Income to Adjusted Operating Income
Reconciliation of Generics Operating Income to Generics Adjusted Operating Income ($) in thousands Three months ended March 31, 2020 March 31, 2019 December 31, 2019 Operating income (loss) $ 81,837 $ (54,583) $ (3,093) Adjusted to add (deduct): Acquisition and site closure expenses 4,600 18,785 6,0
Slide 26: 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 March 31, 2020 March 31, 2019 December 31, 2019 Cost of goods sold $ 313,578 $ 309,743 $ 273,373 Cost of goods sold impairment charges 1,456 53,297 13,721 Adjusted to deduct: Amortization 36,096 3
Slide 27: 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 March 31, 2020 March 31, 2019 December 31, 2019 Cost of goods sold $ 218,865 $ 278,878 $ 224,708 Cost of goods sold impairment charges 1,456 53,297 13,721 Adjusted to deduct: Amo
Slide 28: Reconciliation of Specialty Operating Income to Adjusted Operating Income
Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income ($) in thousands Three months ended March 31, 2020 March 31, 2019 December 31, 2019 Operating income $ 9,867 $ 4,637 $ 18,012 Adjusted to add: Amortization 25,446 20,212 24,695 Acquisition and site closure expenses —
Slide 29: 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 March 31, 2020 March 31, 2019 December 31, 2019 Cost of goods sold $ 47,818 $ 30,865 $ 48,665 Adjusted to deduct: Amortization 25,446 20,211 24,695 Adjusted cost of goods sold
Slide 30: Reconciliation of R&D to Adjusted R&D
Reconciliation of Research and Development to Adjusted Research and Development ($) in thousands Three months ended March 31, 2020 March 31, 2019 December 31, 2019 Research and development $ 36,379 $ 53,858 $ 48,050 IPR&D impairment charges 960 22,787 450 Intellectual property legal development expe
Slide 31: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of Selling, General & Administrative to Adjusted Selling, General, & Administrative ($) in thousands Three months ended March 31, 2020 March 31, 2019 December 31, 2019 Selling, general and administrative $ 77,976 $ 84,436 $ 74,084 Adjusted to deduct (add): Amortization 6,480 — — Stock
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Amneal Pharmaceuticals — Q1 2020 Earnings Presentation on 6ix