LCI Lannett CO

Lannett Company, Inc. (AMEX:LCI) today reported financial results for the fiscal 2008 fourth quarter and full year ended June 30, 2008. For fiscal 2008, net sales were $72.4 million compared with $82.6 million for fiscal 2007. Gross profit was $16.3 million, compared with $21.4 million for the same period in the prior year. Research and development expenses decreased to $5.2 million from $7.5 million in the comparable prior year period. SG&A expenses increased to $16.6 million from $12.2 million in the same period last year. Net loss was $2.3 million, or $0.10 per share, compared with net loss of $6.9 million, or $0.29 per share, for the prior year, which included a $7.8 million write-down of debt associated with the acquisition in April 2007 of a bulk raw materials supplier. The company said that during the year it significantly expanded its product offering with FDA approval for six products. And, the U.S. Drug Enforcement Administration (DEA) granted Lannett�s wholly owned subsidiary, Cody Laboratories, an import license, which further diversifies the company�s portfolio by allowing it to enter the pain management market, which has few competitors and favorable demographics. For the fourth quarter of fiscal 2008, net sales were $20.7 million compared with $17.4 million for the same period of the prior year. Gross profit was $2.9 million, essentially unchanged from the same period in the prior year. Research and development expenses decreased to $1.5 million from $1.9 million in the comparable prior year period. SG&A expenses increased to $4.1 million compared with $3.3 million in the same period last year. Net loss, which included an income tax benefit of $2.6 million, was $277,506, or $0.01 per share, compared with net loss of $2.6 million, or $0.27 per share, for the prior year fourth quarter. �Our fourth quarter financial results were impacted by costs associated with accepted returns of one of our products,� said Arthur Bedrosian, president chief executive officer of Lannett. �We are optimistic about our ability to re-launch this product. SG&A expenses increased significantly in the fiscal 2008 fourth quarter and full year, due to the April 2007 acquisition of Cody Labs. We are optimistic that Cody Labs� will add meaningful value to Lannett�s operations over the long term. �Sales of Digoxin were strong in the fiscal 2008 fourth quarter, and we continue to work closely with the FDA to ensure a safe and uninterrupted supply of this important heart medication in the U.S., following the FDA�s announced recall of the Digitek� brand version of this product.� About Lannett Company, Inc.: Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit the company�s website at www.lannett.com. This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, the future financial performance of Cody Laboratories, pending ANDAs and products in various stages of development, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannett�s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company�s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company's judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements. LANNETT COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS � � � � � � June 30, June 30, � 2008 � 2007 Assets: Current Assets: Cash $ 6,256,712 $ 5,192,341 Trade accounts receivable, net 34,114,982 19,473,978 Inventories 11,617,258 14,518,484 Interest receivable 51,781 36,260 Prepaid taxes 1,598,937 3,193,685 Deferred tax assets 6,997,935 1,258,930 Other current assets � 591,415 � 611,512 Total current assets 61,229,020 44,285,190 � Property, plant, and equipment, net 24,734,103 27,443,161 � Investment securities - available-for-sale 2,500,135 3,320,632 Deferred tax assets 17,380,115 17,150,174 Intangible asset, net 10,361,835 12,046,502 Construction in progress 458,046 176,003 Other assets � 195,354 � 234,438 Total Assets $ 116,858,608 $ 104,656,100 � � Liabilities and Shareholders' Equity: Current liabilities $ 35,638,552 $ 22,250,243 Long-term debt, less current portion 8,186,922 8,987,846 Deferred tax liabilities 3,179,344 3,202,835 Unearned grant funds 500,000 - Other long term liabilities 32,001 32,001 Minority interest 50,309 - Shareholders' equity � 69,271,480 � 70,183,175 Total Liabilities and Shareholders' Equity $ 116,858,608 $ 104,656,100 � LANNETT COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS � � � � (Unaudited) Three months ended Fiscal Year ended June 30, June 30, � 2008 � � 2007 � � 2008 � � 2007 � � Net sales $ 20,748,799 $ 17,390,842 $ 72,403,283 $ 82,577,591 Cost of sales 17,392,501 13,768,773 54,080,947 57,394,751 Amortization of intangible assets 446,166 446,166 1,784,664 1,784,664 Product Royalties � 39,929 � � 226,989 � � 236,601 � � 1,973,189 � Gross profit 2,870,203 2,948,914 16,301,071 21,424,987 � Research and development expenses 1,457,381 1,873,219 5,172,715 7,459,432 Selling, general, and administrative expenses 4,090,186 3,277,541 16,552,859 12,161,187 Loss on impairment - - - 7,775,890 Loss on sale of investment 4,338 - 4,338 - Gain (loss) on sale of assets � 1,693 � � (7,113 ) � 1,693 � � (7,113 ) � Operating loss � (2,683,395 ) � (2,194,733 ) � (5,430,534 ) � (5,964,409 ) � Other (Expense) Income � (98,691 ) � (57,978 ) � (213,227 ) � 43,330 � � Loss before income tax (benefit) expense (2,782,086 ) (2,252,711 ) (5,643,761 ) (5,921,079 ) � Income tax (benefit) expense (2,554,889 ) 322,138 (3,376,011 ) 1,007,929 Minority interest � 50,309 � � - � � 50,309 � � - � � Net loss $ (277,506 ) $ (2,574,849 ) $ (2,318,059 ) $ (6,929,008 ) Loss per share: Basic $ (0.01 ) $ (0.11 ) $ (0.10 ) $ (0.29 ) Diluted $ (0.01 ) $ (0.11 ) $ (0.10 ) $ (0.29 ) � Shares used to calculate loss per share: Basic 24,282,639 24,170,375 24,227,181 24,159,251 Diluted 24,282,639 24,170,375 24,227,181 24,159,251