Lannett Company reported financial results for its fiscal 2018 fourth quarter and full year ended June 30, 2018.
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For the fiscal 2018 fourth quarter, on a GAAP basis, net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017. Gross profit was $66.5 million, or 39% of total net sales, compared with $58.9 million, or 42% of total net sales.
Research and development (R&D) expenses were $8.3 million compared with $11.4 million for the fiscal 2017 fourth quarter. Selling, general and administrative (SG&A) expenses increased to $20.6 million from $16.5 million.
Restructuring expenses were $4.1 million compared with $1.8 million. During the fiscal 2018 fourth quarter, the company recorded $25.0 million of asset impairment charges, primarily related to restructuring of the company's Cody Laboratories subsidiary.
Operating income was $8.6 million compared with $28.8 million. Interest expense was $21.2 million compared with $20.7 million for the fourth quarter of fiscal 2017.
The company recorded an income tax benefit of $0.9 million versus income tax expense of $3.1 million in the prior-year period.
Net loss attributable to Lannett was $11.4 million, or $0.30 per share, versus net income attributable to Lannett of $5.7 million, or $0.15 per diluted share, for the fiscal 2017 fourth quarter.
For the fiscal 2018 fourth quarter reported on a Non-GAAP basis, adjusted net sales were $170.9 million compared with $139.1 million for the fourth quarter of fiscal 2017.
Adjusted gross profit was $76.0 million, or 44% of adjusted net sales, compared with $68.0 million, or 49% of adjusted net sales, for the prior-year fourth quarter. Adjusted R&D expenses were $8.3 million compared with $11.4 million. Adjusted SG&A expenses were $17.4 million compared with $16.2 million.
Adjusted operating income was $50.3 million compared with $40.4 million for the prior-year fourth quarter. Adjusted interest expense was $16.6 million compared with $16.0 million for the fourth quarter of fiscal 2017. Adjusted income tax expense was $9.6 million compared with $10.0 million in the prior-year period.
Adjusted net income attributable to Lannett increased to $24.5 million, or $0.64 per diluted share, from $15.1 million, or $0.40 per diluted share, for the fiscal 2017 fourth quarter.
For the fiscal 2018 full year, on a GAAP basis, net sales were $684.6 million compared with $637.3 million for fiscal 2017. During fiscal 2017, the company recorded a $4.0 million adjustment to a settlement agreement with one of its customers, which resulted in total net sales for the prior year of $633.3 million.
Gross profit was $288.7 million, or 42% of total net sales, compared with $301.2 million, or 48% of total net sales, for fiscal 2017. R&D expenses were $29.2 million compared with $42.1 million. SG&A expenses were $82.2 million compared with $73.5 million.
Restructuring expenses were $7.1 million compared with $7.2 million. In the current year, the company recorded a loss on sale of intangible asset of $15.5 million and asset impairment charges of $25.0 million.
In the prior year, the company recorded acquisition and integration-related expenses of $4.0 million and asset impairment charges of $88.1 million. Operating income was $129.7 million compared with $86.4 million. Interest expense was $85.6 million compared with $89.4 million for fiscal 2017.
The company recorded an income tax expense of $22.4 million compared with $1.1 million in the prior year. Net income attributable to Lannett was $28.7 million, or $0.75 per diluted share, versus net loss attributable to Lannett of $0.6 million, or $0.02 per share, for fiscal 2017.
For the fiscal 2018 full year reported on a Non-GAAP basis, adjusted net sales were $684.6 million compared with $637.3 million for fiscal 2017.
Adjusted gross profit was $326.2 million, or 48% of adjusted net sales, compared with $343.7 million, or 54% of adjusted net sales, for the prior year. Adjusted R&D expenses were $29.2 million compared with $42.1 million. Adjusted SG&A expenses were $71.0 million compared with $71.3 million.
Adjusted operating income was $226.0 million compared with $230.3 million for the prior year. Adjusted interest expense declined to $65.4 million from $68.7 million for fiscal 2017.
Adjusted income tax expense was $45.8 million compared with $57.2 million in the prior-year period. Adjusted net income attributable to Lannett increased to $118.2 million, or $3.10 per diluted share, compared with $107.9 million, or $2.86 per diluted share, for fiscal 2017. ■