Assertio Holdings, Inc. (“Assertio” or the “Company”)
(Nasdaq: ASRT), a pharmaceutical company with comprehensive
commercial capabilities offering differentiated products to
patients, today reported financial results for the fourth quarter
and full year ended December 31, 2023.
Financial Highlights
(unaudited): |
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
(in millions, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
Net Product Sales
(GAAP) |
$ |
32.5 |
|
|
$ |
49.9 |
|
$ |
149.5 |
|
|
$ |
155.1 |
Net (Loss) Income
(GAAP) |
$ |
(57.4 |
) |
|
$ |
88.6 |
|
$ |
(331.9 |
) |
|
$ |
109.6 |
(Loss) Earnings Per
Share (GAAP) |
$ |
(0.61 |
) |
|
$ |
1.34 |
|
$ |
(4.67 |
) |
|
$ |
2.03 |
Adjusted EBITDA
(Non-GAAP)1 |
$ |
4.5 |
|
|
$ |
33.4 |
|
$ |
67.7 |
|
|
$ |
101.6 |
Adjusted Earnings Per
Share (Non-GAAP)1 |
$ |
0.11 |
|
|
$ |
0.32 |
|
$ |
0.55 |
|
|
$ |
1.19 |
“Our fourth quarter results include positive indicators for the
future, demonstrating the durability of Assertio’s business model.
We delivered solid net product sales and positive cash flows from
operations as we adapted our business strategy and aligned
operating costs to the portfolio of products that will drive our
growth and cash flows going forward,” said Heather Mason, interim
Chief Executive Officer.
“Today we are providing guidance for 2024, targeting net product
sales of $110 million to $125 million and adjusted EBITDA2 of $20
million to $30 million. Our focus is growth in Rolvedon and prudent
management of Indocin’s pricing and volume to maximize the economic
opportunity, which should further grow our cash position.”
“Rolvedon continues to perform well in the targeted clinic
segment, reflecting sequential quarter-over-quarter demand growth
since launch. The channel inventory issues we previously discussed
have been resolved, and we are fully committed to maximizing this
asset. With our strategy now fully in place, we believe that
Rolvedon can grow to sales in excess of $100 million in the coming
years through increased customer access and new volume growth. We
also continue to advance the same-day dosing clinical study, with
an eye toward further differentiation.”
“Additionally, we have taken steps to substantially reduce our
operating costs to match our product portfolio. We will continue to
optimize Assertio’s non-personal promotion strategy while also
deploying our excellent in-person oncology team to expand our
customer base in the G-CSF market. We also continue to actively
pursue new business development opportunities that can further
expand and diversify our asset base,” concluded Mason.
Fourth quarter results included:
- Net product sales were $32.5 million, decreased from $49.9
million in the prior year fourth quarter.
- The declines in Indocin and Cambia following their respective
generic entrants were partially offset by the addition of
Rolvedon.
- Rolvedon net product sales were $11.0 million in the fourth
quarter, the first full quarter following the acquisition of
Spectrum. During the quarter, the Company successfully addressed
high levels of inventory in the channel and implemented an updated
commercial strategy expected to drive sales growth throughout 2024
while maintaining pricing discipline.
- Indocin net product sales in the fourth quarter were $10.8
million, a $23.4 million decrease from the prior year quarter
reflecting declining price and volumes due to a generic entrant
late in 2023.
- Gross margin3 in the fourth quarter was 70%, decreased from 88%
in the prior year fourth quarter.
- Inventory step-up amortization contributed nine percentage
points of the decrease in margin, with the remaining reduction in
margin primarily due to changes in sales mix from the addition of
Rolvedon and decrease in higher margin Indocin and Cambia.
- SG&A expense was $24.0 million, increased from $13.7
million in the prior year fourth quarter.
- Results included approximately $9.5 million in higher operating
expense due to the acquisition of Spectrum.
- In response to declining sales and gross profits, the Company
refined its organization to further reduce its operating expense
profile in the first quarter of 2024.
- Fourth quarter 2023 included the following other items:
- A charge of $40.8 million for loss on impairment of intangible
assets, primarily driven by a $36.0 million impairment of Indocin
intangible asset.
- A reduction in the fair value of contingent consideration
resulted in a benefit of $17.4 million driven by the revaluation of
the Indocin contingent liability due to generic competition.
- A charge of $2.4 million for restructuring costs.
- Income tax expense of $25.5 million, primarily due to the
impact of applying a valuation allowance against net deferred tax
assets.
- Adjusted EBITDA was $4.5 million, decreased from $33.4 million
in the prior year fourth quarter, primarily due to Indocin generic
competition and higher operating expenses from the acquisition of
Spectrum.
2024 Full Year Financial
Guidance
Assertio announced its initial 2024 operating guidance as
follows:
Net Product Sales (GAAP) |
$110.0 Million to $125.0 Million |
Adjusted EBITDA (Non-GAAP)4 |
$20.0 Million to $30.0 Million |
Balance Sheet and Cash Flow
- For the quarter ended December 31, 2023, cash and cash
equivalents totaled $73.4 million.
- Convertible debt outstanding principal balance at December 31,
2023 was $40.0 million and does not mature until September
2027.
- Cash generated from operating activities quarter-to-date and
year-to-date was $5.7 million and $49.6 million, respectively,
inclusive of transaction costs associated with the acquisition of
Spectrum and supporting Spectrum’s working capital needs.
Board Update
Assertio announced the appointment of Sigurd (Sig) Kirk as an
independent director, effective April 3, 2024. Kirk previously
served for 11 years as Executive Vice President, Corporate Business
Development at Allergan plc, which was acquired by AbbVie, Inc.,
where he led more than 75 deals. Prior to that, he served in
multiple senior leadership roles at Barr Pharmaceuticals.
Conference Call and Investor Presentation
Information
Assertio’s management will host a conference call to discuss its
fourth quarter and full year 2023 financial results today:
Date: |
Monday, March 11, 2024 |
Time: |
4:30 p.m. Eastern Time |
Webcast (live and archive): |
http://investor.assertiotx.com/overview/default.aspx (Events &
Webcasts, Investor Page) |
Dial-in numbers: |
1-646-968-2525, Conference ID 9752695 |
To access the live webcast, the recorded conference call replay,
and other materials, please visit Assertio’s investor relations
website at http://investor.assertiotx.com/overview/default.aspx.
Please connect at least 15 minutes prior to the live webcast to
ensure adequate time for any software download that may be needed
to access the webcast. The replay will be available approximately
two hours after the call on Assertio’s investor website.
About Assertio
Assertio is a commercial pharmaceutical company offering
differentiated products to patients. We have built our commercial
portfolio through acquisition or licensing of approved products.
Our comprehensive commercial capabilities include marketing through
both a sales force and a non-personal promotion model, market
access through payor contracting, and trade and distribution. To
learn more about Assertio, visit www.assertiotx.com.
Investor Contact
Matt Kreps, Managing DirectorDarrow AssociatesM:
214-597-8200mkreps@darrowir.com
Forward Looking Statements
The statements in this communication include forward-looking
statements. Forward-looking statements may discuss goals,
intentions and expectations as to future plans, trends, events,
results of operations or financial condition, or otherwise, based
on current beliefs. Forward-looking statements speak only as of the
date they are made or as of the dates indicated in the statements
and should not be relied upon as predictions of future events, as
there can be no assurance that the events or circumstances
reflected in these statements will be achieved or will occur.
Forward-looking statements can often, but not always, be identified
by the use of forward-looking terminology including “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,”
“pro forma,” “estimates,” “anticipates,” “designed,” or the
negative of these words and phrases, other variations of these
words and phrases or comparable terminology. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those contemplated by the
statements, including: Assertio’s ability to grow sales of Rolvedon
and the commercial success and market acceptance of Rolvedon and
Assertio’s other products; Assertio’s ability to successfully
develop and execute its sales, marketing and promotion strategies
using its sales force and non-personal promotion model
capabilities; the impact on sales and profits from the entry and
sales of generics of Assertio’s products and/or other products
competitive with any of Assertio’s products (including indomethacin
suppositories compounded by hospitals and other institutions
including a 503B compounder which we believe to be violation of
certain provisions of the Food, Drug and Cosmetic Act); the timing
and impact of additional generic approvals and uncertainty around
the recent approvals and launches of generic Indocin products
(which are not patent protected and now face generic competition as
a result of the August 2023 approval and launch of generic
indomethacin suppositories and January 2024 approval of a generic
indomethacin oral suspension product); risks that any new
businesses will not be integrated successfully or that the combined
company will not realize estimated cost savings, value of certain
tax assets, synergies and growth, or that such benefits may take
longer and/or cost more to realize than expected; expected industry
trends, including pricing pressures and managed healthcare
practices; Assertio’s ability to attract and retain executive
leadership and key employees, including in connection with our
ongoing search for a permanent CEO; the ability of Assertio’s
third-party manufacturers to manufacture adequate quantities of
commercially salable inventory and active pharmaceutical
ingredients for each of Assertio’s products on commercially
reasonable terms and in compliance with their contractual
obligations to Assertio, and Assertio’s ability to maintain its
supply chain which relies on single-source suppliers; the outcome
of, and Assertio’s intentions with respect to, any litigation or
government investigations, including pending and potential future
shareholder litigation relating to the Spectrum Merger and/or the
recent approval and launch of generic indomethacin suppositories,
antitrust litigation, opioid-related government investigations,
opioid-related litigation and related claims for negligence and
breach of fiduciary duty against Assertio’s former insurance
broker, as well as Spectrum’s legacy shareholder and other
litigation and, and other disputes and litigation, and the costs
and expenses associated therewith; Assertio’s financial cost and
outcomes of clinical trials, including the extent to which data
from the Rolvedon same-day dosing trial, if and when completed, may
support ongoing commercialization efforts; Assertio’s compliance
with legal and regulatory requirements related to the development
or promotion of its products; variations in revenues obtained from
commercialization agreements and the accounting treatment with
respect thereto; Assertio’s common stock regaining and maintaining
compliance with The Nasdaq Capital Market’s minimum closing bid
requirement of at least $1.00 per share; and Assertio’s ability to
obtain and maintain intellectual property protection for its
products and operate its business without infringing the
intellectual property rights of others. For a discussion of
additional factors that could cause actual results to differ
materially from those contemplated by forward-looking statements,
see the risks described in Assertio’s Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the
Securities and Exchange Commission. Many of these risks and
uncertainties may be exacerbated by public health emergencies and
general macroeconomic conditions. Assertio does not assume, and
hereby disclaims, any obligation to update forward-looking
statements, except as may be required by law.
Non-GAAP Financial Measures
To supplement the Company’s financial results presented on a
U.S. generally accepted accounting principles (“GAAP”) basis, the
Company has included information about non-GAAP measures of EBITDA,
adjusted EBITDA, adjusted earnings, and adjusted earnings per share
as useful operating metrics. The Company believes that the
presentation of these non-GAAP financial measures, when viewed with
results under GAAP and the accompanying reconciliation, provides
supplementary information to analysts, investors, lenders, and the
Company’s management in assessing the Company’s performance and
results from period to period. The Company uses these non-GAAP
measures internally to understand, manage and evaluate the
Company’s performance. These non-GAAP financial measures should be
considered in addition to, and not a substitute for, or superior
to, net income or other financial measures calculated in accordance
with GAAP. Non-GAAP financial measures used by us may be calculated
differently from, and therefore may not be comparable to, non-GAAP
measures used by other companies.
This release also includes estimated full-year non-GAAP adjusted
EBITDA information, which the Company believes enables investors to
better understand the anticipated performance of the business, but
should be considered a supplement to, and not as a substitute for
or superior to, financial measures calculated in accordance with
GAAP. No reconciliation of estimated non-GAAP adjusted EBITDA to
estimated net income is provided in this release because some of
the information necessary for estimated net income such as income
taxes, fair value change in contingent consideration, and
stock-based compensation is not yet ascertainable or accessible and
the Company is unable to quantify these amounts that would be
required to be included in estimated net income without
unreasonable efforts.
Specified Items
Non-GAAP measures presented within this release exclude
specified items. The Company considers specified items to be
significant income/expense items not indicative of current
operations. Specified items may include adjustments to interest
expense and interest income, income tax expense (benefit),
depreciation expense, amortization expense, sales reserves
adjustments for products the Company is no longer selling,
stock-based compensation expense, fair value adjustments to
contingent consideration or derivative liability, restructuring
charges, amortization of fair value inventory step-up as a result
of purchase accounting, transaction-related costs, gains or losses
from adjustments to long-lived assets and assets not part of
current operations, changes in valuation allowances on deferred tax
assets, and gains or losses resulting from debt refinancing or
extinguishment.
ASSERTIO HOLDINGS, INC.CONSOLIDATED STATEMENTS OF
COMPREHENSIVE (LOSS) INCOME(in thousands, except per share
amounts)(unaudited) |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
Product sales, net |
$ |
32,462 |
|
|
$ |
49,866 |
|
|
$ |
149,451 |
|
|
$ |
155,121 |
|
Royalties and milestones |
|
523 |
|
|
|
487 |
|
|
|
2,433 |
|
|
|
2,403 |
|
Other revenue |
|
— |
|
|
|
— |
|
|
|
185 |
|
|
|
(1,290 |
) |
Total revenues |
|
32,985 |
|
|
|
50,353 |
|
|
|
152,069 |
|
|
|
156,234 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of sales |
|
9,721 |
|
|
|
6,015 |
|
|
|
27,020 |
|
|
|
18,748 |
|
Research and development expenses |
|
1,024 |
|
|
|
— |
|
|
|
2,843 |
|
|
|
— |
|
Selling, general and administrative expenses |
|
23,958 |
|
|
|
13,706 |
|
|
|
78,638 |
|
|
|
46,786 |
|
Change in fair value of contingent consideration |
|
(17,414 |
) |
|
|
11,841 |
|
|
|
(25,538 |
) |
|
|
18,687 |
|
Amortization of intangible assets |
|
4,775 |
|
|
|
8,171 |
|
|
|
27,527 |
|
|
|
32,608 |
|
Loss on impairment of intangible assets |
|
40,808 |
|
|
|
— |
|
|
|
279,639 |
|
|
|
— |
|
Restructuring charges |
|
2,442 |
|
|
|
— |
|
|
|
5,476 |
|
|
|
— |
|
Total costs and expenses |
|
65,314 |
|
|
|
39,733 |
|
|
|
395,605 |
|
|
|
116,829 |
|
(Loss) income from
operations |
|
(32,329 |
) |
|
|
10,620 |
|
|
|
(243,536 |
) |
|
|
39,405 |
|
Other income (expense): |
|
|
|
|
|
|
|
Debt related expenses |
|
— |
|
|
|
— |
|
|
|
(9,918 |
) |
|
|
— |
|
Interest expense |
|
(755 |
) |
|
|
(1,313 |
) |
|
|
(3,380 |
) |
|
|
(7,961 |
) |
Other gain (loss) |
|
1,179 |
|
|
|
(731 |
) |
|
|
2,780 |
|
|
|
(278 |
) |
Total other income
(expense) |
|
424 |
|
|
|
(2,044 |
) |
|
|
(10,518 |
) |
|
|
(8,239 |
) |
Net (loss) income before
income taxes |
|
(31,905 |
) |
|
|
8,576 |
|
|
|
(254,054 |
) |
|
|
31,166 |
|
Income tax (expense)
benefit |
|
(25,479 |
) |
|
|
79,975 |
|
|
|
(77,888 |
) |
|
|
78,459 |
|
Net (loss) income and
comprehensive (loss) income |
$ |
(57,384 |
) |
|
$ |
88,551 |
|
|
$ |
(331,942 |
) |
|
$ |
109,625 |
|
|
|
|
|
|
|
|
|
Basic net (loss) income per
share |
$ |
(0.61 |
) |
|
$ |
1.83 |
|
|
$ |
(4.67 |
) |
|
$ |
2.33 |
|
Diluted net (loss) income per
share |
$ |
(0.61 |
) |
|
$ |
1.34 |
|
|
$ |
(4.67 |
) |
|
$ |
2.03 |
|
Shares used in computing basic
net (loss) income per share |
|
94,669 |
|
|
|
48,300 |
|
|
|
71,031 |
|
|
|
47,004 |
|
Shares used in computing
diluted net (loss) income per share |
|
94,669 |
|
|
|
67,074 |
|
|
|
71,031 |
|
|
|
54,669 |
|
ASSERTIO HOLDINGS, INC. CONSOLIDATED BALANCE
SHEETS(in thousands, except share
data)(unaudited) |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
73,441 |
|
|
$ |
64,941 |
|
Accounts receivable, net |
|
47,663 |
|
|
|
45,357 |
|
Inventories, net |
|
37,686 |
|
|
|
13,696 |
|
Prepaid and other current assets |
|
12,272 |
|
|
|
8,268 |
|
Total current assets |
|
171,062 |
|
|
|
132,262 |
|
Property and equipment,
net |
|
770 |
|
|
|
744 |
|
Intangible assets, net |
|
111,332 |
|
|
|
197,996 |
|
Deferred tax asset |
|
— |
|
|
|
80,202 |
|
Other long-term assets |
|
3,255 |
|
|
|
2,709 |
|
Total assets |
$ |
286,419 |
|
|
$ |
413,913 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
13,439 |
|
|
$ |
5,991 |
|
Accrued rebates, returns and discounts |
|
58,137 |
|
|
|
49,426 |
|
Accrued liabilities |
|
18,213 |
|
|
|
12,181 |
|
Long-term debt, current portion |
|
— |
|
|
|
470 |
|
Contingent consideration, current portion |
|
2,700 |
|
|
|
26,300 |
|
Other current liabilities |
|
954 |
|
|
|
948 |
|
Total current liabilities |
|
93,443 |
|
|
|
95,316 |
|
Long-term debt |
|
38,514 |
|
|
|
66,403 |
|
Contingent consideration |
|
— |
|
|
|
22,200 |
|
Other long-term
liabilities |
|
16,459 |
|
|
|
4,269 |
|
Total liabilities |
|
148,416 |
|
|
|
188,188 |
|
Commitments and
contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, $0.0001 par value, 200,000,000 shares authorized;
94,668,523 and 48,319,838 shares issued and outstanding as of
December 31, 2023 and December 31, 2022, respectively |
|
9 |
|
|
|
5 |
|
Additional paid-in capital |
|
789,537 |
|
|
|
545,321 |
|
Accumulated deficit |
|
(651,543 |
) |
|
|
(319,601 |
) |
Total shareholders’ equity |
|
138,003 |
|
|
|
225,725 |
|
Total liabilities and
shareholders' equity |
$ |
286,419 |
|
|
$ |
413,913 |
|
ASSERTIO HOLDINGS, INC. CONSOLIDATED STATEMENTS OF
CASH FLOWS(in
thousands)(unaudited) |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
Operating
Activities |
|
|
|
Net (loss) income |
$ |
(331,942 |
) |
|
$ |
109,625 |
|
Adjustments to reconcile net
(loss) income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
|
28,229 |
|
|
|
33,396 |
|
Amortization of debt issuance costs and Royalty Rights |
|
455 |
|
|
|
304 |
|
Loss on impairment of intangible assets |
|
279,639 |
|
|
|
— |
|
Gain on extinguishment of debt |
|
— |
|
|
|
(1,046 |
) |
Recurring fair value measurements of assets and liabilities |
|
(25,482 |
) |
|
|
18,939 |
|
Debt-related expenses |
|
9,918 |
|
|
|
— |
|
Stock-based compensation |
|
9,158 |
|
|
|
7,504 |
|
Provisions for inventory and other assets |
|
3,288 |
|
|
|
3,265 |
|
Deferred income taxes |
|
76,201 |
|
|
|
(80,375 |
) |
Changes in assets and
liabilities, net of acquisition: |
|
|
|
Accounts receivable |
|
48,669 |
|
|
|
(996 |
) |
Inventories |
|
(4,973 |
) |
|
|
(6,593 |
) |
Prepaid and other assets |
|
(1,169 |
) |
|
|
8,019 |
|
Accounts payable and other accrued liabilities |
|
(29,348 |
) |
|
|
(10,113 |
) |
Accrued rebates, returns and discounts |
|
(12,313 |
) |
|
|
(3,236 |
) |
Interest payable |
|
(726 |
) |
|
|
(95 |
) |
Net cash provided by operating activities |
|
49,604 |
|
|
|
78,598 |
|
Investing
Activities |
|
|
|
Purchases of property and
equipment |
|
(628 |
) |
|
|
(274 |
) |
Net cash acquired in Spectrum
Merger |
|
1,950 |
|
|
|
— |
|
Purchase of Sympazan |
|
(419 |
) |
|
|
(15,372 |
) |
Purchase of Otrexup |
|
— |
|
|
|
(27,027 |
) |
Proceeds from the sale of
investments |
|
2,194 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
3,097 |
|
|
|
(42,673 |
) |
Financing
Activities |
|
|
|
Proceeds from issuance of 2027
Convertible Notes |
|
— |
|
|
|
70,000 |
|
Payments in connection with 2027
Convertible Notes |
|
(10,500 |
) |
|
|
— |
|
Payment of direct transaction
costs related to convertible debt inducement |
|
(1,119 |
) |
|
|
— |
|
Payment in connection with 2024
Senior Notes |
|
— |
|
|
|
(70,750 |
) |
Payment of debt issuance
costs |
|
— |
|
|
|
(4,084 |
) |
Payment of contingent
consideration |
|
(24,194 |
) |
|
|
(7,845 |
) |
Payment of Royalty Rights |
|
(459 |
) |
|
|
(1,297 |
) |
Proceeds from issuance of common
stock |
|
— |
|
|
|
7,020 |
|
Payments related to the vesting
and settlement of equity awards, net |
|
(7,898 |
) |
|
|
(838 |
) |
Other financing activities |
|
(31 |
) |
|
|
— |
|
Net cash used in financing activities |
|
(44,201 |
) |
|
|
(7,794 |
) |
Net increase in cash and cash
equivalents |
|
8,500 |
|
|
|
28,131 |
|
Cash and cash equivalents at
beginning of year |
|
64,941 |
|
|
|
36,810 |
|
Cash and cash equivalents at end
of year |
$ |
73,441 |
|
|
$ |
64,941 |
|
Supplemental Disclosure
of Cash Flow Information |
|
|
|
Net cash paid (refunded) for income taxes |
$ |
4,031 |
|
|
$ |
(6,913 |
) |
Cash paid for interest |
$ |
3,651 |
|
|
$ |
7,752 |
|
RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP EBITDA
and ADJUSTED EBITDA(in
thousands)(unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve months ended December 31, |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Financial Statement Classification |
GAAP Net (Loss)
Income |
|
$ |
(57,384 |
) |
|
$ |
88,551 |
|
|
$ |
(331,942 |
) |
|
$ |
109,625 |
|
|
|
Interest expense |
|
|
755 |
|
|
|
1,313 |
|
|
|
3,380 |
|
|
|
7,961 |
|
|
Interest expense |
Income tax (expense) benefit |
|
|
25,479 |
|
|
|
(79,975 |
) |
|
|
77,888 |
|
|
|
(78,459 |
) |
|
Income tax (expense)
benefit |
Depreciation expense |
|
|
132 |
|
|
|
196 |
|
|
|
702 |
|
|
|
787 |
|
|
Selling, general and
administrative expenses |
Amortization of intangible assets |
|
|
4,775 |
|
|
|
8,171 |
|
|
|
27,527 |
|
|
|
32,608 |
|
|
Amortization of intangible
assets |
EBITDA
(Non-GAAP) |
|
|
(26,243 |
) |
|
|
18,256 |
|
|
|
(222,445 |
) |
|
|
72,522 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Legacy product reserves(1) |
|
|
— |
|
|
|
— |
|
|
|
(185 |
) |
|
|
1,290 |
|
|
Other revenue |
Stock-based compensation |
|
|
2,642 |
|
|
|
2,388 |
|
|
|
9,158 |
|
|
|
7,504 |
|
|
Selling, general and
administrative expenses |
Change in fair value of contingent consideration(2) |
|
|
(17,414 |
) |
|
|
11,841 |
|
|
|
(25,538 |
) |
|
|
18,687 |
|
|
Change in fair value of
contingent consideration |
Debt-related expenses(3) |
|
|
— |
|
|
|
— |
|
|
|
9,918 |
|
|
|
— |
|
|
Debt-related expenses |
Transaction-related expenses(4) |
|
|
361 |
|
|
|
— |
|
|
|
8,900 |
|
|
|
— |
|
|
Selling, general and
administrative expenses |
Loss on impairment of intangible assets(5) |
|
|
40,808 |
|
|
|
— |
|
|
|
279,639 |
|
|
|
— |
|
|
Loss on impairment of
intangible assets |
Restructuring costs(6) |
|
|
2,442 |
|
|
|
— |
|
|
|
5,476 |
|
|
|
— |
|
|
Restructuring charges |
Other(7) |
|
|
1,855 |
|
|
|
892 |
|
|
|
2,820 |
|
|
|
1,592 |
|
|
Multiple |
Adjusted EBITDA
(Non-GAAP) |
|
$ |
4,451 |
|
|
$ |
33,377 |
|
|
$ |
67,743 |
|
|
$ |
101,595 |
|
|
|
(1) Represents removal of the impact of revenue
adjustment to reserves for product sales allowances
(gross-to-net-sales allowances) estimates related to previously
divested products.
(2) The fair value of the contingent
consideration is remeasured each reporting period, with changes in
the fair value resulting from changes in the underlying inputs
being recognized as a benefit or expense in operating expenses
until the contingent consideration arrangement is settled.
(3) Debt-related expenses consist of an induced
conversion expense of approximately $8.8 million and direct
transaction costs of approximately $1.1 million incurred as a
result of the privately negotiated exchange of $30.0 million
principal amount of the Company’s 6.5% Convertible Senior Notes due
2027 in the first quarter of 2023.
(4) Represents transaction-related expenses
associated with the acquisition of Spectrum, which closed effective
July 31, 2023.
(5) Represents the loss recognized in the
period for the impairment of intangible assets.
(6) Restructuring charges represent
non-recurring costs associated with the Company’s announced
restructuring plan.
(7) Other for the three and twelve months
ended December 31, 2023 and 2022 represents the following
adjustments (in thousands):
|
|
Three Months EndedDecember 31, |
|
Twelve months endedDecember 31, |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Financial Statement Classification |
Amortization of inventory step-up |
|
$ |
3,001 |
|
|
$ |
107 |
|
|
$ |
5,167 |
|
|
$ |
807 |
|
|
Cost of sales |
Interest income on short-term investments |
|
|
(690 |
) |
|
|
— |
|
|
|
(2,403 |
) |
|
|
— |
|
|
Other gain (loss) |
Derivative fair value adjustment |
|
|
(456 |
) |
|
|
252 |
|
|
|
56 |
|
|
|
252 |
|
|
Other gain (loss) |
Gain on debt extinguishment |
|
|
— |
|
|
|
(1,046 |
) |
|
|
— |
|
|
|
(1,046 |
) |
|
Other gain (loss) |
Loss recognized for expected credit loss reserve |
|
|
— |
|
|
|
1,579 |
|
|
|
— |
|
|
|
1,579 |
|
|
Other gain (loss) |
Total Other |
|
$ |
1,855 |
|
|
$ |
892 |
|
|
$ |
2,820 |
|
|
$ |
1,592 |
|
|
|
RECONCILIATION OF GAAP NET (LOSS) INCOME and NET (LOSS)
INCOME PER SHARE TONON-GAAP ADJUSTED EARNINGS and ADJUSTED
EARNINGS PER SHARE(1)(in thousands, except
per share amounts)(unaudited) |
|
Three Months Ended December 31, 2023 |
|
Three Months Ended December 31, 2022 |
|
Amount |
|
Diluted EPS(2) |
|
Amount |
|
Diluted EPS(2) |
Net (loss) income per
share (GAAP) |
$ |
(57,384 |
) |
|
$ |
(0.61 |
) |
|
$ |
88,551 |
|
|
$ |
1.34 |
Add: Convertible debt interest
expense and other income statement impacts, net of tax(2) |
|
566 |
|
|
|
|
|
1,169 |
|
|
|
Adjustments |
|
|
|
|
|
|
|
Amortization of intangible assets |
|
4,775 |
|
|
|
|
|
8,171 |
|
|
|
Stock-based compensation |
|
2,642 |
|
|
|
|
|
2,388 |
|
|
|
Change in fair value of contingent consideration |
|
(17,414 |
) |
|
|
|
|
11,841 |
|
|
|
Contingent consideration cash payable(3) |
|
(2,170 |
) |
|
|
|
|
(6,854 |
) |
|
|
Transaction-related expenses |
|
361 |
|
|
|
|
|
— |
|
|
|
Loss on impairment of intangible assets |
|
40,808 |
|
|
|
|
|
— |
|
|
|
Restructuring charges |
|
2,442 |
|
|
|
|
|
— |
|
|
|
Other |
|
1,855 |
|
|
|
|
|
640 |
|
|
|
Increase (release) of deferred tax asset valuation
allowance(4) |
|
33,165 |
|
|
|
|
|
(80,375 |
) |
|
|
Income taxes expense, as adjusted(5) |
|
1,877 |
|
|
|
|
|
(4,047 |
) |
|
|
Adjusted earnings
(Non-GAAP) |
$ |
11,523 |
|
|
$ |
0.11 |
|
|
$ |
21,484 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
Diluted shares used in
calculation (GAAP)(2) |
|
94,669 |
|
|
|
|
|
67,074 |
|
|
|
Add: Dilutive effect of
stock-based awards and equivalents(2) |
|
325 |
|
|
|
|
|
— |
|
|
|
Add: Dilutive effect of 2027
Convertible Notes(2) |
|
9,768 |
|
|
|
|
|
— |
|
|
|
Diluted shares used in
calculation (Non-GAAP)(2) |
|
104,762 |
|
|
|
|
|
67,074 |
|
|
|
(1) Certain adjustments included here are the
same as those reflected in the Company’s reconciliation of GAAP net
(loss) income to non-GAAP adjusted EBITDA and therefore should be
read in conjunction with that reconciliation and respective
footnotes.
(2) The Company uses the if-converted method
with respect to its convertible debt to compute GAAP and Non-GAAP
diluted earnings per share when the effect is dilutive. Under the
if-converted method, the Company assumes the 2027 Convertible
Notes, which were entered into on August 22, 2022, were converted
at the beginning of each period presented and outstanding. As a
result, interest expense, net of tax, and any other income
statement impact associated with the 2027 Convertible Notes, net of
tax, is added back to net income used in the diluted earnings per
share calculation. As a result, interest expense, net of tax,
associated with the 2027 Convertible Notes was added back to net
loss used in the diluted earnings per share calculation for the
three months ended December 31, 2023. For the three months ended
December 31, 2022, interest expense, net of tax and the loss from
the derivative fair value adjustment, net of tax, associated with
the 2027 Convertible Notes, is added back to net income used in the
diluted earnings per share calculation.
For the three months ended December 31, 2023, the Company’s
potentially dilutive convertible debt under the if-converted method
and potentially dilutive stock-based awards under the
treasury-stock method were not included in the computation of GAAP
diluted net (loss) income per share, because to do so would be
anti-dilutive. However, the Company’s potentially dilutive
convertible debt under the if-converted method and the potentially
dilutive stock-based awards under the treasury-stock method were
included in the computation of non-GAAP adjusted earnings and
adjusted earnings per share because their effect was dilutive.
For the three months ended December 31, 2022, the Company’s
potentially dilutive convertible debt under the if-converted method
and potentially dilutive stock-based awards under the treasury
stock method were included in both the computation of GAAP and
non-GAAP diluted net income per share because their effect was
dilutive.
(3) Represents the accrued cash payable of the
INDOCIN contingent consideration for the respective period based on
20% royalty for annual INDOCIN net sales over $20.0 million.
(4) For the three-months ended December 31,
2023, represents the amount of income tax expense related to the
recognition of a full valuation allowance against deferred tax
assets. For the three-months ended December 31, 2022, represents
the amount of income tax benefit related to the reversal of
previously recorded valuation allowances.
(5) Represents the Company’s income tax benefit
(expense) adjustment from the tax effect of pre-tax adjustments
excluded from adjusted earnings. The tax effect of pre-tax
adjustments excluded from adjusted earnings is computed at the
blended federal and state statutory rate of 25%.
RECONCILIATION OF GAAP NET (LOSS) INCOME and NET (LOSS)
INCOME PER SHARE TONON-GAAP ADJUSTED EARNINGS and ADJUSTED
EARNINGS PER SHARE(1)(in thousands, except
per share amounts)(unaudited) |
|
Twelve Months EndedDecember 31,
2023 |
|
Twelve Months EndedDecember 31,
2022 |
|
Amount |
|
Diluted EPS(2) |
|
Amount |
|
Diluted EPS(2) |
Net (loss) income
(GAAP)(2) |
$ |
(331,942 |
) |
|
$ |
(4.67 |
) |
|
$ |
109,625 |
|
|
$ |
2.03 |
Add: Convertible debt interest
expense and other income statement impacts, net of tax(2) |
|
2,535 |
|
|
|
|
|
1,560 |
|
|
|
Adjustments |
|
|
|
|
|
|
|
Amortization of intangible assets |
|
27,527 |
|
|
|
|
|
32,608 |
|
|
|
Legacy products revenue reserves |
|
(185 |
) |
|
|
|
|
1,290 |
|
|
|
Stock-based compensation |
|
9,158 |
|
|
|
|
|
7,504 |
|
|
|
Debt-related expenses, net |
|
9,639 |
|
|
|
|
|
— |
|
|
|
Change in fair value of contingent consideration |
|
(25,538 |
) |
|
|
|
|
18,687 |
|
|
|
Contingent consideration cash payable(3) |
|
(13,443 |
) |
|
|
|
|
(16,068 |
) |
|
|
Transaction-related expenses |
|
8,900 |
|
|
|
|
|
— |
|
|
|
Loss on impairment of intangible assets |
|
279,639 |
|
|
|
|
|
— |
|
|
|
Restructuring charges |
|
5,476 |
|
|
|
|
|
— |
|
|
|
Other |
|
2,820 |
|
|
|
|
|
1,340 |
|
|
|
Increase (release) of deferred tax asset valuation
allowance(4) |
|
76,200 |
|
|
|
|
|
(80,375 |
) |
|
|
Income taxes expense, as adjusted(5) |
|
(3,679 |
) |
|
|
|
|
(11,340 |
) |
|
|
Adjusted earnings
(Non-GAAP) |
$ |
47,107 |
|
|
$ |
0.55 |
|
|
$ |
64,831 |
|
|
$ |
1.19 |
|
|
|
|
|
|
|
|
Diluted shares used in
calculation (GAAP)(2) |
|
71,031 |
|
|
|
|
|
54,669 |
|
|
|
Add: Dilutive effect of
stock-based awards and equivalents(2) |
|
3,054 |
|
|
|
|
|
— |
|
|
|
Add: Dilutive effect of 2027
Convertible Notes(2) |
|
10,932 |
|
|
|
|
|
— |
|
|
|
Diluted shares used in
calculation (Non-GAAP)(2) |
|
85,017 |
|
|
|
|
|
54,669 |
|
|
|
(1) Certain adjustments included here are the
same as those reflected in the Company’s reconciliation of GAAP net
income to non-GAAP adjusted EBITDA and therefore should be read in
conjunction with that reconciliation and respective footnotes.
(2) The Company uses the if-converted method
with respect to its convertible debt to compute GAAP and Non-GAAP
diluted earnings per share when the effect is dilutive. Under the
if-converted method, the Company assumes the 2027 Convertible
Notes, which were entered into on August 22, 2022, were converted
at the beginning of each period presented and outstanding. As a
result, interest expense, net of tax, associated with the 2027
Convertible Notes is added back to net loss used in the diluted
earnings per share calculation for the twelve months ended December
31, 2023. For the twelve months ended December 31, 2022, interest
expense, net of tax and the loss from the derivative fair value
adjustment, net of tax, associated with the 2027 Convertible Notes,
is added back to net income used in the diluted earnings per share
calculation.
For the twelve months ended December 31, 2023, the Company’s
potentially dilutive convertible debt under the if-converted method
and potentially dilutive stock-based awards under the
treasury-stock method were not included in the computation of GAAP
diluted net (loss) income per share, because to do so would be
anti-dilutive. However, the Company’s potentially dilutive
convertible debt under the if-converted method and the potentially
dilutive stock-based awards under the treasury-stock method were
included in the computation of non-GAAP adjusted earnings and
adjusted earnings per share because their effect was dilutive.
For the twelve months ended December 31, 2022, the Company’s
potentially dilutive convertible debt under the if-converted method
and potentially dilutive stock-based awards under the
treasury-stock method were included in both the computation of GAAP
and non-GAAP diluted net income per share because their effect was
dilutive.
(3) Represents the accrued cash payable of the
INDOCIN contingent consideration for the respective period based on
20% royalty for annual INDOCIN net sales over $20.0 million.
(4) For the twelve months ended December 31,
2023, represents the amount of income tax expense related to the
recognition of a full valuation allowance against deferred tax
assets. For the twelve months ended December 31, 2022, represents
the amount of income tax benefit related to the reversal of
previously recorded valuation allowances.
(5) Represents the Company’s income tax benefit
(expense) adjustment from the tax effect of pre-tax adjustments
excluded from adjusted earnings. The tax effect of pre-tax
adjustments excluded from adjusted earnings is computed at the
blended federal and state statutory rate of 25%.
1 Non-GAAP measures are reconciled to the corresponding GAAP
measures in the schedules attached. 2 See “Non-GAAP Financial
Measures” below for information about reconciling our Adjusted
EBITDA guidance to Net Income.3 Gross margin represents the ratio
of net product sales less cost of sales to net product sales.4 See
“Non-GAAP Financial Measures” below for information about
reconciling our Adjusted EBITDA guidance to Net Income.
Assertio (NASDAQ:ASRT)
過去 株価チャート
から 8 2024 まで 9 2024
Assertio (NASDAQ:ASRT)
過去 株価チャート
から 9 2023 まで 9 2024