ANI Pharmaceuticals Reports Record Second Quarter 2023 Financial Results and Raises Full-Year 2023 Guidance  

08/09/2023

Second Quarter 2023 Financial Results

-- Record quarterly net revenues of $116.5 million, representing year-over-year growth of 57.8%; net income available to common shareholders of $5.8 million and diluted GAAP income per share of $0.29 --

-- Record quarterly adjusted non-GAAP EBITDA of $34.1 million representing year-over-year growth of 246.0%; adjusted non-GAAP diluted earnings per share of $1.28 --

-- Lead Rare Disease asset, Purified Cortrophin® Gel (Repository Corticotrophin Injection USP) 80 U/ml (Cortrophin Gel) reported net sales of $24.3 million, a year-over-year increase of 138.2% --

-- Generics, Established Brands and Others reported net sales of $92.2 million, representing year-over-year growth of 44.9% --

Full Year 2023 Guidance

-- Company is raising net revenue guidance to $425 million to $445 million from $385 million to $410 million; adjusted non-GAAP EBITDA guidance is raised to $115 million to $125 million from $97 million to $107 million; adjusted non-GAAP earnings per share guidance is raised to $3.62 to $4.11 from $2.99 to $3.45 –

-- Company is raising Cortrophin Gel specific revenue guidance to $90 million to $100 million from $80 million to $90 million, representing 116% to 140% growth as compared to $41.7 million recognized in 2022 --

-- Mid-point of revised total Company guidance represents year-over-year growth in net revenues of 37%, adjusted non-GAAP EBITDA of 115%, and adjusted non-GAAP earnings per diluted share of 184% --

Company Highlights

-- Strong performance for Cortrophin Gel; record number of new patient starts and new cases initiated in the second quarter of 2023; ACTH market continues to show year-over-year growth for twelve consecutive months according to IQVIA --

-- Continued increase in new unique prescribers and number of repeat prescribers; growth across all targeted specialties of neurology, nephrology and rheumatology; pulmonology sales team gaining momentum --

-- Company’s strong R&D capabilities, operational excellence and U.S.-based manufacturing footprint helped capture new business opportunities and drive growth in Generics and Established Brands --

-- Successfully completed public equity offering resulting in net proceeds of $80.6 million; $42.0 million in cash generated from operating activities (year-to-date), ending Q2 with $161.7 million in cash --

BAUDETTE, Minn., Aug. 09, 2023 (GLOBE NEWSWIRE) -- ANI Pharmaceuticals, Inc. (Nasdaq: ANIP) (ANI or the Company) today announced business highlights and financial results for the three months ended June 30, 2023.

“The second quarter of 2023 was another strong quarter for ANI, across all areas of the business. The Company is proud to report record net revenues and adjusted non-GAAP EBITDA and raise full-year 2023 guidance for the second quarter in a row. With record quarterly new patient starts, new cases initiated, new unique prescribers, and ongoing growth in repeat prescribers, the launch momentum for Purified Cortrophin Gel remains strong. In addition, the overall ACTH category is robust, with year-on-year growth in volumes every month during the first half of 2023. Following our recent successful equity raise and based on strong cash flow generation from operating activities, we believe ANI is well-positioned to seek opportunities to increase the scope and scale of our Rare Disease portfolio through M&A and in-licensing,” stated Nikhil Lalwani, President and CEO of ANI.

“Our Generics, Established Brands and Others segment also delivered strong results in the quarter. We received four generic ANDA approvals and expanded commercialization efforts into several new sales channels. We continued to serve patients in need and customers while capturing new business opportunities by leveraging our operational excellence and U.S.-based manufacturing footprint. With an impressive first half of 2023, we’re excited to build on the momentum, and grow our business while continuing to help patients in need,” concluded Lalwani.

Second Quarter 2023 Financial Highlights:

  • Net revenues were $116.5 million compared to $73.9 million in Q2 2022.
  • GAAP net income available to common shareholders was $5.8 million, and diluted GAAP income per share was $0.29.
  • Adjusted non-GAAP EBITDA was $34.1 million compared to $9.9 million in Q2 2022.
  • Adjusted non-GAAP diluted earnings per share was $1.28, compared to diluted earnings per share of $0.13 in Q2 2022.
  • Cash and cash equivalents were $161.7 million with year-to-date (six month) cash flow from operations of $42.0 million.

Second Quarter and Recent Business Highlights:

Rare Disease Business Update

Revenues for our lead asset, Cortrophin Gel, totaled $24.3 million for the second quarter of 2023. During the quarter, the Company saw a record number of new cases initiated, new patient starts and new unique prescribers. Growth continued across targeted specialties of neurology, rheumatology and nephrology and the Company gained early traction from the newly launched Pulmonology sales force. Since the launch of Cortrophin Gel, the overall ACTH category has experienced twelve consecutive months of year-over-year growth from June 2022 to May 2023.

The Company is raising its 2023 revenue guidance for Cortrophin Gel to $90 million to $100 million, representing 116% - 140% year-over-year growth.  

Rare Disease remains a critical focus area for achieving future growth, and the Company continues to actively explore opportunities to acquire assets or establish partnerships to increase the scope and scale of its Rare Disease platform.

Generics Business, Established Brands and Others Update

Sales of generic pharmaceuticals products, established brands and others grew 44.9% year-over-year in the second quarter of 2023. The Company’s generics business is well positioned for delivering sustainable growth, driven by a strong R&D organization launching new products. During the quarter, ANI received four Abbreviated New Drug Applications (ANDAs) approvals, including Colestipol Hydrochloride Tablets USP, 1 g and Nitrofurantoin Oral Suspension USP, 25 mg/5 ml. The Company also expanded commercialization efforts into several new sales channels.

During the second quarter, ANI continued to leverage its operational excellence and focus on U.S.-based manufacturing to take advantage of the numerous opportunities arising from supply disruptions in both generics and established brands. As previously announced, manufacturing operations ceased at the Oakville, Ontario, site in January 2023, with the successful relocation of the Oakville products to U.S. facilities. Discussions with potential buyers for the Oakville site remain ongoing.

Second Quarter 2023 Financial Results

 Three Months Ended June 30,
(in thousands) 2023  2022 Change     
Generics, Established Brands, and Other Segment  
Generic pharmaceutical products$63,317 49,863 $13,454 27.0%
Established brand pharmaceutical products, royalties, and other pharmaceutical services 28,926  13,790  15,136 109.8%
Generics, established brands, and other segment total net revenues$92,243 63,653 $28,590 44.9%
Rare Disease Segment  
Rare disease pharmaceutical products 24,304  10,202  14,102 138.2%
Total net revenues$116,547 73,855 $42,692 57.8%
   

Net revenues for generic pharmaceutical products were $63.3 million during the three months ended June 30, 2023, an increase of 27.0% compared to $49.9 million for the same period in 2022, driven by increased volumes on the base business, the annualization of 2022 launches and new product launches in 2023.

Net revenues for established brand pharmaceutical products, royalties, and other pharmaceutical services were $28.9 million during the three months ended June 30, 2023, an increase of 109.8% compared to $13.8 million for the same period in 2022, driven by an increase in volume.

Net revenues of Rare Disease pharmaceutical products, which consist entirely of sales of Cortrophin Gel, were $24.3 million during the three months ended June 30, 2023, an increase of $14.1 million from $10.2 million for the same period in 2022. This growth was driven by increased volume as the product was launched in late January 2022.

Operating expenses increased by 20.0% to $104.1 million for the three months ended June 30, 2023, from $86.8 million in the prior year period as a result of the following factors:

For the three months ended June 30, 2023, cost of sales increased to $42.3 million from $35.3 million for the same period in 2022, an increase of $7.0 million, or 19.8%, primarily due to a significant growth in sales volumes of generic and Rare Disease pharmaceutical products.

Research and development expenses increased from $4.2 million to $7.4 million for the three months ended June 30, 2023, an increase of $3.2 million or 77.0%, primarily due to a higher level of activity associated with generic projects coupled with an increase associated with projects related to Cortrophin Gel in the current year period.

Selling, general, and administrative expenses increased from $32.0 million to $38.8 million for the three months ended June 30, 2023, an increase of $6.8 million, or 21.3%, primarily due to higher employment related costs and increased legal expenses.

Depreciation and amortization expense was $14.7 million for the three months ended June 30, 2023, compared to $13.8 million for the same period in 2022, an increase of $0.9 million.

The Company recognized a contingent consideration fair value adjustment relating to its 2021 acquisition of Novitium of $1.0 million and $(1.1) million in the three months ended June 30, 2023, and 2022, respectively.

The Company recognized restructuring activities of $2.6 million of expense in the three months ended June 30, 2022, in relation to the closure of its Oakville, Ontario, Canada facility. Costs included $1.4 million in termination benefits, $0.9 million in fixed asset impairments and accelerated depreciation, and $0.3 million of other costs. The restructuring activities recognized in the three months ended June 30, 2023, were immaterial.

Net income available to common shareholders for the second quarter of 2023 was $5.8 million as compared to net loss of $(15.3) million in the prior year period. Diluted earnings per share for the three months ended June 30, 2023, was $0.29 compared to diluted GAAP loss per share of $(0.94) in the prior year period.

Adjusted non-GAAP diluted earnings per share was $1.28 in the second quarter of 2023 compared to diluted earnings per share of $0.13 in the second quarter of 2022.

For reconciliations of adjusted non-GAAP EBITDA and adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 3 and Table 4, respectively.

Liquidity

As of June 30, 2023, the Company had $161.7 million in unrestricted cash and cash equivalents, $172.9 million in net accounts receivable and $295.5 million (face value) in outstanding debt. The Company generated year-to-date cash flow from operations of $42.0 million.

2023 Financial Guidance Upward Revisions

 Revised Full Year 2023 Guidance  Prior Full Year 2023 Guidance  Prior Year Actual Growth
Net Revenue (total Company)$425 million - $445 million $385 million - $410 million $316.4 million 34% - 41%
        
Cortrophin Gel Net Revenue$90 million - $100 million $80 million - $90 million $41.7 million 116% - 140%
        
Adj. Non-GAAP Gross Margin63% to 64.8% 60% to 62.5% 58.3% 4.7 pts to 6.5 pts
        
Adjusted Non-GAAP EBITDA$115 million - $125 million $97 million - $107 million $55.9 million 106% - 124%
        
Adjusted Non-GAAP Diluted EPS$3.62 - $4.11 $2.99 - $3.45 $1.36 166% - 202%
        

 

In addition, ANI currently anticipates between 19.1 million and 19.3 million shares outstanding and a U.S. GAAP effective tax rate of between approximately 6.0% to 10.0%. The Company will continue to tax affect adjustments for computation of adjusted non-GAAP diluted earnings per share at a tax rate of 24%.

Conference Call

As previously announced, ANI management will host its second quarter 2023 conference call as follows:

DateWednesday, August 9, 2023
  
Time8:30 a.m. ET
  
Toll free (U.S.)800-267-6316
  
Webcast (live and replay)www.anipharmaceuticals.com, under the “Investors” section
  

A replay of the conference call will be available within two hours of the call’s completion and will remain accessible for two weeks by dialing 800-839-2461 and entering access code 119757.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI’s management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance. Beginning in the fourth quarter of 2022, ANI no longer excludes expense for In-Process Research & Development or Cortrophin Gel pre-launch charges and sales and marketing expenses from its non-GAAP results. Historically, the Company excluded these charges. These changes have been made to align with views expressed by the U.S. Securities and Exchange Commission. Prior periods have been recast to reflect these changes.

Adjusted non-GAAP EBITDA is defined as net income (loss), excluding tax expense or benefit, interest expense, (net), other expense, (net), depreciation, amortization, the excess of fair value over cost of acquired inventory, non-cash stock-based compensation expense, Novitium transaction expenses, contingent consideration fair value adjustment, and certain other items that vary in frequency and impact on ANI’s results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided below.

ANI is not providing a reconciliation for the forward-looking full year 2023 adjusted EBITDA guidance because it does not currently have sufficient information to accurately estimate all of the variables and individual adjustments for such reconciliation, including “with” and “without” tax provision information. As such, ANI’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.

Adjusted non-GAAP Net Income (Loss)

ANI’s management considers adjusted non-GAAP net income (loss) to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Novitium transaction expenses, contingent consideration fair value adjustment, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP net income (loss) when analyzing Company performance. Beginning in the fourth quarter of 2022, ANI no longer excludes expense for In-Process Research & Development or Cortrophin Gel pre-launch charges and sales and marketing expenses from its non-GAAP results. Historically, the Company excluded these charges. These changes have been made to align with views expressed by the U.S. Securities and Exchange Commission. Prior periods have been recast to reflect these changes.

Adjusted non-GAAP net income (loss) is defined as net income (loss), plus the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation expense, Novitium transaction expenses, non-cash interest expense, depreciation and amortization expense, contingent consideration fair value adjustment, and certain other items that vary in frequency and impact on ANI’s results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP net income (loss) should be considered in addition to, but not in lieu of, net income (loss) reported under GAAP. A reconciliation of adjusted non-GAAP net income (loss) to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Diluted (Loss)/Earnings per Share

ANI’s management considers adjusted non-GAAP diluted (loss)/earnings per share to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Novitium transaction expenses, contingent consideration fair value adjustment, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP diluted (loss)/earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted (loss)/earnings per share is defined as adjusted non-GAAP net income (loss), as defined above, divided by the diluted weighted average shares outstanding during the period. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP diluted (loss)/earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted (loss)/earnings per share to the most directly comparable GAAP financial measure is provided below.

ANI is not providing a reconciliation for the forward-looking full year 2023 adjusted diluted earnings per share guidance because it does not currently have sufficient information to accurately estimate all of the variables and individual adjustments for such reconciliation, including “with” and “without” tax provision information. As such, ANI’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.

About ANI
ANI Pharmaceuticals, Inc. (Nasdaq: ANIP) is a diversified biopharmaceutical company serving patients in need by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceutical products, including for diseases with high unmet medical need. Our team is focused on delivering sustainable growth by scaling up our Rare Disease business through the successful launch of our lead asset, Purified Cortrophin® Gel, strengthening our generics business with enhanced development capability, innovation in established brands and leveraging our North American manufacturing capabilities. For more information, please visit our website www.anipharmaceuticals.com.

Forward-Looking Statements
To the extent any statements made in this release deal with information that is not historical, these are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, those relating to the commercialization and potential sales of the product and any additional product launches from the Company’s generic pipeline, other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “plans,” “potential,” “future,” “believes,” “intends,” “continue,” other words of similar meaning, derivations of such words and the use of future dates.

Uncertainties and risks may cause the Company’s actual results to be materially different than those expressed in or implied by such forward-looking statements. Uncertainties and risks include, but are not limited to: risks that we may face with respect to importing raw materials and delays in delivery of raw materials and other ingredients and supplies necessary for the manufacture of our products from both domestic and overseas sources due to supply chain disruptions or for any other reason; delays or failure in obtaining and maintaining approvals by the FDA of the products we sell; changes in policy or actions that may be taken by the FDA and other regulatory agencies, including drug recalls; the ability of our manufacturing partners to meet our product demands and timelines; our dependence on single source suppliers of ingredients due to the time and cost to validate a second source of supply; acceptance of our products at levels that will allow us to achieve profitability; our ability to develop, license or acquire, and commercialize new products; the level of competition we face and the legal, regulatory and/or legislative strategies employed by our competitors to prevent or delay competition from generic alternatives to branded products; our ability to protect our intellectual property rights; the impact of legislative or regulatory reform on the pricing for pharmaceutical products; the impact of any litigation to which we are, or may become, a party; our ability, and that of our suppliers, development partners, and manufacturing partners, to comply with laws, regulations and standards that govern or affect the pharmaceutical and biotechnology industries; our ability to maintain the services of our key executives and other personnel; whether we experience disruptions to our operations resulting from the closure of our Oakville, Ontario manufacturing plant, including the transition of certain products manufactured there to our other facilities which has been completed, or have difficulties finding a buyer for the plant and property; and general business and economic conditions, such as inflationary pressures, geopolitical conditions including but not limited to the conflict between Russia and the Ukraine, and the effects and duration of outbreaks of public health emergencies, such as COVID-19, and other risks and uncertainties that are described in ANI’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission.

More detailed information on these and additional factors that could affect the Company’s actual results are described in the Company’s filings with the Securities and Exchange Commission (SEC), including its most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other filings with the SEC. All forward-looking statements in this news release speak only as of the date of this news release and are based on the Company’s current beliefs, assumptions, and expectations. The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Contact
Lisa M. Wilson, In-Site Communications, Inc.
212-452-2793
lwilson@insitecony.com


SOURCE: ANI Pharmaceuticals, Inc.

FINANCIAL TABLES FOLLOW


 
ANI Pharmaceuticals, Inc. and Subsidiaries
Table 1. US GAAP Statement of Operations
(unaudited, in thousands, except per share amounts)
 
 Three Months Ended June 30,Six Months Ended June 30,
  2023  2022  2023  2022 
Net Revenues$116,547 $73,855 $223,333 $138,332 
     
Operating Expenses    
Cost of sales (excluding depreciation and amortization) 42,284  35,294  79,992  69,565 
Research and development 7,374  4,165  13,298  9,439 
Selling, general, and administrative 38,760  31,958  75,228  60,775 
Depreciation and amortization 14,690  13,764  29,390  28,321 
Contingent consideration fair value adjustment 1,035  (1,095) 1,996  (342)
Restructuring activities 2  2,570  1,132  2,570 
Intangible asset impairment charge -  112  -  112 
     
Total Operating Expenses 104,145  86,768  201,036  170,440 
     
Operating Income (Loss) 12,402  (12,913) 22,297  (32,108)
     
Other Expense, net    
Interest expense, net (7,100) (6,669) (14,796) (13,282)
Other (expense) income, net (53) 764  (87) 675 
     
Income (Loss) Before Income Tax Benefit 5,249  (18,818) 7,414  (44,715)
     
Income tax benefit 996  3,895  270  9,662 
     
Net Income (Loss)$6,245 $(14,923)$7,684 $(35,053)
     
Dividends on Series A Convertible Preferred Stock (407) (407) (813) (812)
     
Net Income (Loss) Available to Common Shareholders$5,838 $(15,330)$6,871 $(35,865)
     
Basic and Diluted Income (Loss) Per Share:    
Basic Income (Loss) Per Share$0.30 $(0.94)$0.36 $(2.21)
Diluted Income (Loss) Per Share$0.29 $(0.94)$0.36 $(2.21)
     
Basic Weighted-Average Shares Outstanding 17,688  16,272  17,044  16,205 
Diluted Weighted-Average Shares Outstanding 17,855  16,272  17,177  16,205 
     


ANI Pharmaceuticals, Inc. and Subsidiaries
Table 2. US GAAP Balance Sheets
(unaudited, in thousands)
 
 June 30, 2023
December 31, 2022
Current Assets  
Cash and cash equivalents$161,707 $48,228 
Current restricted cash -  5,006 
Accounts receivable, net 172,925  165,438 
Inventories 104,323  105,355 
Prepaid income taxes 4,088  3,827 
Assets held for sale 8,020  8,020 
Prepaid expenses and other current assets 8,248  8,387 
Total Current Assets 459,311  344,261 
Non-current Assets  
Property and equipment, net 44,371  43,246 
Deferred tax assets, net of deferred tax liabilities and valuation allowance 81,500  81,363 
Intangible assets, net 230,299  251,635 
Goodwill 28,221  28,221 
Derivatives and other non-current assets 15,639  11,361 
Total Assets$859,341 $760,087 
   
Current Liabilities  
Current debt, net of deferred financing costs$850 $850 
Accounts payable 28,505  29,305 
Accrued royalties 9,885  9,307 
Accrued compensation and related expenses 11,493  10,312 
Accrued government rebates 11,971  10,872 
Returned goods reserve 29,798  33,399 
Current contingent consideration 25,025  - 
Accrued expenses and other 5,338  5,394 
Total Current Liabilities 122,865  99,439 
   
Non-current Liabilities  
Non-current debt, net of deferred financing costs and current component 285,244  285,669 
Non-current contingent consideration 12,029  35,058 
Other non-current liabilities 4,731  1,381 
Total Liabilities$424,869 $421,547 
   
Mezzanine Equity  
Convertible Preferred Stock, Series A 24,850  24,850 
   
Stockholders’ Equity  
Common Stock 2  1 
Treasury stock (9,180) (5,094)
Additional paid-in capital 495,488  403,901 
Accumulated deficit (90,414) (97,286)
Accumulated other comprehensive income, net of tax 13,726  12,168 
Total Stockholders’ Equity 409,622  313,690 
   
Total Liabilities, Mezzanine Equity, and Stockholders’ Equity$859,341 $760,087 
   


ANI Pharmaceuticals, Inc. and Subsidiaries
Table 3: Adjusted non-GAAP EBITDA Calculation and US GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
                
     Reconciliation of certain adjusted non-GAAP accounts:
     Net Revenues Cost of sales (excluding depreciation and amortization) Selling, general, and administrative Research and development
 Three Months Ended
June 30,
  Three Months Ended
June 30,
 Three Months Ended
June 30,
 Three Months Ended
June 30,
 Three Months Ended
June 30,
  2023  2022    2023  2022   2023  2022   2023  2022   2023  2022 
Net Income (Loss)$6,245 $(14,923) As reported:$116,547 $73,855  $42,284 $35,294  $38,760 $31,958  $7,374 $4,165 
                
Add/(Subtract):               
Interest expense, net 7,100  6,669              
Other expense (income), net (1) 53  (14)             
Income tax benefit (996) (3,895)             
Depreciation and amortization 14,690  13,764              
Contingent consideration fair value adjustment 1,035  (1,095)             
Intangible asset impairment charge   112              
Restructuring activities 2  2,570              
Impact of Canada operations (2) 492  1,820  Impact of Canada operations(2)   (1,045)  (289) (1,249)  (194) (1,545)  (9) (71)
Stock-based compensation 5,249  3,756  Stock-based compensation      (188) (144)  (4,836) (3,417)  (225) (195)
Excess of fair value over cost of acquired inventory   973  Excess of fair value over cost of acquired inventory        (973)          
Novitium transaction expenses 249  124  Novitium transaction expenses           (249) (124)     
Adjusted non-GAAP EBITDA$34,119 $9,861  As adjusted:$116,547 $72,810  $41,807 $32,928  $33,481 $26,872  $7,140 $3,899 
                
(1) Adjustment to Other expense (income), net excludes $750 thousand of income related to the sale of an ANDA during the three months ended June 30, 2022.
(2) Impact of Canada operations includes CDMO revenues, cost of sales relating to CDMO revenues, all selling, general, and administrative expenses, and all research and development expenses recorded in Canada in the period presented, exclusive of restructuring activities, stock-based compensation, and depreciation and amortization, which are included within their respective line items above. The adjustment of Canada operations represents revenues, cost of sales and expense that will not recur after the completion of the closure of our Canada operations, which was completed as of March 31, 2023. The adjustment of Canada operations does not adjust for revenues, cost of sales, and expense that will recur at our other manufacturing facilities after the transfer of certain manufacturing activities is complete.
                
                
                
     Reconciliation of certain adjusted non-GAAP accounts:
     Net Revenues Cost of sales (excluding depreciation and amortization) Selling, general, and administrative Research and development
 Six Months Ended
June 30,
  Six Months Ended
June 30,
 Six Months Ended
June 30,
 Six Months Ended
June 30,
 Six Months Ended
June 30,
  2023  2022    2023  2022   2023  2022   2023  2022   2023  2022 
                
Net Income (Loss)$7,684 $(35,053) As reported:$223,333 $138,332  $79,992 $69,565  $75,228 $60,775  $13,298 $9,439 
                
Add/(Subtract):               
Interest expense, net 14,796  13,282              
Other expense (income), net (1) 87  75              
Income tax benefit (270) (9,662)             
Depreciation and amortization 29,390  28,321              
Contingent consideration fair value adjustment 1,996  (342)             
Intangible asset impairment charge   112              
Restructuring activities 1,132  2,570              
Impact of Canada operations (2) 2,138  1,820  Impact of Canada operations(2) (565) (1,045)  (1,705) (1,249)  (925) (1,545)  (73) (71)
Stock-based compensation 9,587  6,992  Stock-based compensation      (339) (288)  (8,816) (6,338)  (432) (366)
Excess of fair value over cost of acquired inventory   4,802  Excess of fair value over cost of acquired inventory        (4,802)          
Novitium transaction expenses 591  1,217  Novitium transaction expenses           (591) (1,217)     
Adjusted non-GAAP EBITDA$67,131 $14,134  As adjusted:$222,768 $137,287  $77,948 $63,226  $64,896 $51,675  $12,793 $9,002 
                
(1) Adjustment to Other expense (income), net excludes $750 thousand of income related to the sale of an ANDA during the three months ended June 30, 2022.
(2) Impact of Canada operations includes CDMO revenues, cost of sales relating to CDMO revenues, all selling, general, and administrative expenses, and all research and development expenses recorded in Canada in the period presented, exclusive of restructuring activities, stock-based compensation, and depreciation and amortization, which are included within their respective line items above. The adjustment of Canada operations represents revenues, cost of sales and expense that will not recur after the completion of the closure of our Canada operations, which was completed as of March 31, 2023. The adjustment of Canada operations does not adjust for revenues, cost of sales, and expense that will recur at our other manufacturing facilities after the transfer of certain manufacturing activities is complete.
                


ANI Pharmaceuticals, Inc. and Subsidiaries
Table 4: Adjusted non-GAAP Net Income and Adjusted non-GAAP Diluted Earnings per Share Reconciliation
(unaudited, in thousands, except per share amounts)
     
 Three Months Ended June 30,Six Months Ended June 30,
  2023  2022  2023  2022 
     
Net Income (Loss) Available to Common Shareholders$5,838 $(15,330)$6,871 $(35,865)
     
Add/(Subtract):    
Non-cash interest expense 710  967  1,675  1,920 
Depreciation and amortization 14,690  13,764  29,390  28,321 
Contingent consideration fair value adjustment 1,035  (1,095) 1,996  (342)
Restructuring activities 2  2,570  1,132  2,570 
Intangible asset impairment charge   112    112 
Impact of Canada operations(1) 492  1,820  2,138  1,820 
Stock-based compensation 5,249  3,756  9,587  6,992 
Excess of fair value over cost of acquired inventory   973    4,802 
Novitium transaction expenses 249  124  591  1,217 
Less:    
Estimated tax impact of adjustments (calc. at 24%) (5,382) (5,518) (11,162) (11,379)
     
Adjusted non-GAAP Net Income Available to Common Shareholders (2)$22,883 $2,143 $42,218 $168 
Diluted Weighted-Average    
Shares Outstanding 17,855  16,272  17,177  16,205 
Adjusted Diluted Weighted-Average    
Shares Outstanding 17,855  16,282  17,177  16,218 
     
Adjusted non-GAAP    
Diluted Earnings per Share$1.28 $0.13 $2.46 $0.01 
     
(1) Impact of Canada operations includes CDMO revenues, cost of sales relating to CDMO revenues, all selling, general, and administrative expenses, and all research and development expenses recorded in Canada in the period presented, exclusive of restructuring activities, stock-based compensation, and depreciation and amortization, which are included within their respective line items above. The adjustment of Canada operations represents revenues, cost of sales and expense that will not recur after the completion of the closure of our Canada operations, which was completed as of March 31, 2023. The adjustment of Canada operations does not adjust for revenues, cost of sales, and expense that will recur at our other manufacturing facilities after the transfer of certain manufacturing activities is complete.
     
(2) Adjusted non-GAAP Net Income (Loss) Available to Common Shareholders excludes undistributed earnings to participating securities.