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Akorn Completes 2014 Financial Statement Restatement and Reports Audited 2015 and Restated 2014 Results

- Sets Date for 2016 Annual Meeting

- Affirms 2016 Net Revenue and Earnings per Share Guidance

LAKE FOREST, Ill., May 10, 2016 (GLOBE NEWSWIRE) -- Akorn, Inc. (Nasdaq:AKRX), a leading specialty generic pharmaceutical company, today announced that it has filed its Annual Report on Form 10-K for the fiscal year December 31, 2015 (“Form 10-K”). The Company is now up to date on filing its periodic reports with the Securities and Exchange Commission (the “SEC”). The Company also announced plans to hold its 2016 annual meeting of shareholders on July 1, 2016.

The Company’s comprehensive Form 10-K filed today contains the following:

  • consolidated financial statements for the year ended December 31, 2015, and unaudited quarterly financial information for the quarters in 2015; and
  • consolidated restated financial statements for the year ended December 31, 2014 and unaudited restated quarterly financial information for the quarters in 2014.

Raj Rai, Akorn’s Chief Executive Officer, said, “The completion of the restatement of 2014 financial statements and the audit of the 2015 financial statements are important milestones for our Company. This allows our Company to shift its focus on executing on the strategic objectives and growth opportunities. I would like to thank the Akorn team members under the leadership of Duane Portwood and Randy Pollard for their perseverance and hard work throughout this process.”

Duane Portwood, Akorn’s Chief Financial Officer, added, “We filed our Annual Report on Form 10-K for 2015 and have scheduled our annual shareholders meeting for July 1, 2016, for compliance with the Listing Rules exception granted by the NASDAQ Listing Panel. As we move forward in 2016, we look forward to completing the remediation of our internal control weaknesses while helping the Company execute on its strategic objectives and growth opportunities.”

Financial Restatement for the Year Ended December 31, 2014

As discussed in the Form 10-K, the Company identified accounting errors primarily associated with rebates and contractual allowances for 2014. Net revenue for 2014 as previously reported of $593 million was overstated by $38 million and is now restated to be $555 million. Income from continuing operations before income taxes for 2014 as previously reported of $59 million was overstated by $34 million and is now restated to be $25 million.

On May 7, 2016, the Audit Committee of the Board of Directors of Akorn, Inc., upon the recommendation of the Company’s management, concluded that the unaudited financial information for the quarterly period ended March 31, 2014 contained an error related to commitment fees incurred to consummate term loan debt. Specifically, the fees were incorrectly expensed in the quarter rather than amortized over the life of the term loan debt. Income from continuing operations before income taxes for the quarter ended March 31, 2014 as previously reported of $16 million is now restated to be $18 million. The unaudited restated quarterly financial information for the quarter ended March 31, 2014 was included in the Form 10-K.

Key Financial Highlights for the Year Ended December 31, 2015

Revenues. Consolidated revenue for 2015 was $985 million, an increase of 77% over 2014 revenue of $555 million (as restated).

Gross Margin. Consolidated gross margin for 2015 was 60.5%, compared to 47.1% (as restated) for 2014. Excluding $6.3 million in costs from amortization of inventory step up and other items, non-GAAP gross margin was 61.1%, up from 51.2% (as restated) in 2014.

EBITDA. Earnings before interest, taxes, depreciation and amortization was $370 million in 2015, compared to $119 million (as restated) in 2014. Adjusted EBITDA, which is a non-GAAP measure used by management to evaluate the continuing operations of the Akorn business, was $460 million in 2015, compared to $182 million (as restated) in 2014. A full reconciliation of adjusted EBITDA adjustments can be found at the end of this press release.

Net Income per Share. Fully diluted earnings per share (EPS) was $1.22 in 2015 compared to $0.13 (as restated) in 2014. Including a net adjustment of $100 million to net income for non-GAAP items, adjusted fully diluted EPS was $2.02 in 2015. Including a net adjustment of $64 million to net income, adjusted fully diluted EPS was $0.63 (as restated) for 2014. Adjustments to net income in 2015 and 2014 included a number of items detailed at the end of this press release. Please refer to this table for a full reconciliation of GAAP to non-GAAP items.

Annual Meeting

The Company plans to hold its 2016 annual meeting of shareholders on July 1, 2016, within the extension period through July 5, 2016 granted by the Listing Qualifications Panel of The NASDAQ Stock Market to satisfy proxy solicitation and annual meeting requirements. Shareholders of record on May 11, 2016, the record date for the meeting, will be entitled to vote at the meeting. Qualified stockholder proposals (including proposals made pursuant to Rule 14a-18 under the Securities Exchange Act of 1934, as amended) to be presented at the Annual Meeting and included in the Company’s proxy statement and form of proxy relating to that meeting must be received by the Company at Company Headquarters, addressed to the corporate secretary, not later than the close of business on May 16, 2016. Such proposals must also comply with all applicable requirements, including applicable Louisiana law, the rules and regulations promulgated by the SEC, and the procedures set forth in the Company’s Amended and Restated Bylaws.

Earnings Guidance Affirmed for Full Year 2016

The Company is maintaining its full year 2016 financial guidance inclusive of net revenue of $1,060 - $1,080 million, GAAP diluted earnings per share of $1.56 - $1.66, and adjusted diluted earnings per share (non-GAAP) of $2.10 - $2.20.

Akorn’s guidance only contemplates launches of products approved by the U.S. Food and Drug Administration ("FDA") as of May 10, 2016 along with the full year contribution of products launched in 2015. Products that are not yet approved by the FDA are not included in Akorn’s 2016 financial guidance. Other guidance assumptions are detailed in the Company’s March 22, 2016 press release.

2015 Form 10-K Conference Call and Webcast Details

Akorn’s management plans to hold a conference call with interested investors and analysts at 10:00 am ET on Tuesday, May 10, 2016 to discuss the Company’s audited 2015 and audited and restated 2014 results. The dial-in number to access the call is (844)-249-9382 in the U.S. and Canada and (270) 823-1530 for international callers. The conference ID is 7498448. To access the live webcast, please go to Akorn’s Investor Relations website at http://investors.akorn.com.

A webcast replay of the conference call will be available shortly following the conclusion of the call and will be available for 90 days. To access the replay, please go to Akorn’s Investor Relations website at http://investors.akorn.com.

Non-GAAP Financial Measures

To supplement Akorn’s financial guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the following non-GAAP (also referred to as “adjusted” or “non-GAAP adjusted”) financial measures in this press release and the accompanying tables:(i) EBITDA, (ii) adjusted EBITDA, (iii) adjusted net income, (iv) adjusted diluted earnings per share, (v) adjusted revenues, and (vi) adjusted gross margin. The Company believes that each of these non-GAAP financial measures is helpful in understanding the Company’s past financial performance and potential future results, particularly in light of the effect of various acquisition and divestiture transactions effected by the Company. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for or superior to comparable GAAP measures.

Akorn’s management uses adjusted EBITDA, adjusted net income and adjusted diluted earnings per share in managing and analyzing its business and financial condition. Akorn’s management believes that the presentation of these and other non-GAAP financial measures provide investors greater transparency into Akorn’s ongoing results of operations allowing investors to better compare the Company’s results from period to period. The Company believes that adjusted gross margin, although a non-GAAP financial measure, is useful and meaningful to investors as a basis for making investment decisions. It provides investors with a supplemental way to understand the underlying operating performance of the Company.

Investors should note that these non-GAAP financial measures used to present financial guidance are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time-to-time in the future there may be other items that the Company may exclude for purposes of its non-GAAP financial measures; likewise, the Company may in the future cease to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Because of the non-standardized definitions, the non-GAAP financial measures as used by Akorn in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the Company’s competitors and other companies.

Set forth below is the definition of each non-GAAP financial measure as used by the Company in this press release and a full reconciliation of each non-GAAP financial measure to the most closely applicable GAAP financial measures is included herein.

EBITDA, as defined by the Company, represents net income before net interest expense, income tax expense, depreciation and amortization.

Adjusted EBITDA, as defined by the Company, is calculated as follows:

Net income, plus:

  • Interest income (expense), net
  • Provision for income taxes
  • Depreciation and amortization
  • Amortization of acquisition related inventory step-up
  • Non-cash expenses, such as share-based compensation expense, and amortization of deferred financing costs
  • Other adjustments, such as legal settlements, restatement expenses and various acquisition and disposition related expenses
  • Less gains (or plus losses) on foreign currency transactions

Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance.

Adjusted net income, as defined by the Company, is calculated as follows:

Net income, plus:

  • Intangible asset amortization
  • Non-cash expenses, such as non-cash interest, share-based compensation expense, and amortization of financing costs
  • Other adjustments, such as legal settlements, restatement expenses and various acquisition and disposition related expenses
  • Amortization of acquisition-related inventory step-up
  • Less gains (or plus losses) on foreign currency transactions
  • Less gains related to acquisitions and divestitures
  • Less an estimated tax provision, net of the benefit from utilizing net operating loss carry-forwards effected for the adjustments noted above

Adjusted diluted earnings per share is equal to adjusted net income divided by the actual or anticipated diluted share count for the applicable period. The Company believes that adjusted net income and adjusted diluted earnings per share are meaningful financial indicators, to both Company management and investors, in that they exclude non-cash income and expense items that have no impact on current or future cash flows, as well as other income and expense items that are not expected to recur and therefore are not reflective of continuing operating performance.

The shortcomings of non-GAAP financial measures as guidance or performance measures are that they provide a view of the Company’s results of operations without including all events during a period. For example, Adjusted EBITDA does not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omits share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense. Adjusted net income does not take into account non-cash expenses that reflect the amortization of past expenditures, or include share-based compensation, which is an important and material element of the Company's compensation package for its directors, officers and other key employees. Due to the inherent limitations of non-GAAP financial measures, investors should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measures as presented in this press release.

Forward Looking Statements

This press release includes statements that may constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Akorn’s current expectations and projections about future trends, events and uncertainties. Forward-looking statements may include, among others, statements concerning the expected completion of NASDAQ requirements to remain listed, the expected impact of the restatement on our financial our financial guidance, including projections of net revenue and earnings per share, the timing of filings, conference calls, our 2016 annual meeting, and other statements regarding Akorn's goals and strategy. These statements are not historical facts. The words “plan,” “intend,” “will,” “anticipate,” “believe,” “estimate,” “potential,” “expect” and similar expressions are generally intended to identify forward-looking statements. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the difficulty of predicting the impact of our restatement on our financial results, and the timing of the completion of the remaining NASDAQ requirements to remain listed on the NASDAQ Global Select Market; the difficulty of predicting the timing or outcome of product development efforts, including FDA and other regulatory agency approvals and actions, if any; the impact of competitive products and pricing; the susceptibility of our generic and off-patent pharmaceutical products to competition, substitution policies and reimbursement policies of the government; the timing and success of product launches; difficulties or delays in manufacturing; the availability and pricing of third party sourced products and materials; successful compliance with FDA and other governmental regulations; the continuing consolidation of our customer base, which could adversely affect sales of our products; our dependence on a small number of distributors, the loss of any of which could have a material adverse effect; changes in the laws and regulations and such other risks and uncertainties outlined in Akorn's public filings with the SEC, including the Company’s Form 10-K for the fiscal year ended December 31, 2015. Except as expressly required by law, Akorn disclaims any intent or obligation to update these forward-looking statements.

About Akorn:

Akorn, Inc. is a specialty generic pharmaceutical company engaged in the development, manufacture and marketing of multisource and branded pharmaceuticals. Akorn has manufacturing facilities located in Decatur, Illinois; Somerset, New Jersey; Amityville, New York; Hettlingen, Switzerland and Paonta Sahib, India that manufacture ophthalmic, injectable and specialty sterile and non-sterile pharmaceuticals. Additional information is available on Akorn’s website at www.akorn.com.

Additional Financial Tables and Supplemental Information Table of Contents:

As of and for the fiscal year ended December 31, 2015 and 2014, respectively:
Consolidated Balance Sheets
Consolidated Statements of Comprehensive Income
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS
Reconciliation of GAAP Gross Margin % to non-GAAP Gross Margin %
As of and for the quarter ended March 31, 2015 and 2014, respectively:
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Comprehensive Income
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS
As of and for the quarter and year-to-date period ended June 30, 2015 and 2014, respectively:
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Comprehensive Income
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS
As of and for the quarter and year-to-date period ended September 30, 2015 and 2014, respectively:
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Comprehensive Income
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS
For the quarter ended December 31, 2015 and 2014, respectively:
Condensed Consolidated Statements of Comprehensive Income
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS


CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
December 31,
2015 2014
(as Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$346,266 $70,679
Trade accounts receivable, net 150,621 187,545
Inventories, net 185,316 135,197
Deferred taxes, current 43,024 38,411
Available for sale security, current 5,941 7,268
Prepaid expenses and other current assets 19,988 37,061
TOTAL CURRENT ASSETS 751,156 476,161
PROPERTY, PLANT AND EQUIPMENT, NET 179,614 144,196
OTHER LONG-TERM ASSETS
Goodwill 284,710 285,283
Product licensing rights, net 653,628 704,791
Other intangibles, net 211,361 255,612
Deferred financing costs, net 27,591 23,704
Deferred taxes, non-current 3,757 2,084
Long-term investments 129 211
Other non-current assets 764 1,863
TOTAL OTHER LONG-TERM ASSETS 1,181,940 1,273,548
TOTAL ASSETS$2,112,710 $1,893,905
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable$46,019 $47,317
Purchase consideration payable, current 4,967 10,970
Income taxes payable 23,670
Accrued royalties 19,378 13,204
Accrued compensation 15,866 13,467
Current maturities of long-term debt 52,915 10,450
Accrued administrative fees 37,094 40,870
Accrued expenses and other liabilities 31,603 14,576
TOTAL CURRENT LIABILITIES 231,512 150,854
LONG-TERM LIABILITIES
Long-term debt 1,021,488 1,114,481
Deferred tax liability, non-current 231,382 269,428
Lease incentive obligations and other long-term liabilities 6,763 2,836
TOTAL LONG-TERM LIABILITIES 1,259,633 1,386,745
TOTAL LIABILITIES 1,491,145 1,537,599
SHAREHOLDERS’ EQUITY
Common stock, no par value — 150,000,000 shares authorized; 119,427,471 and 111,734,901 shares issued and outstanding at December 31, 2015 and 2014 458,659 342,252
Retained earnings 180,048 29,250
Accumulated other comprehensive loss (17,142) (15,195)
TOTAL SHAREHOLDERS’ EQUITY 621,565 356,307
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$2,112,710 $1,893,905


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Data)
Year ended December 31,
2014
2015 (as Restated) 2013
REVENUES$985,076 $555,048 $317,711
Cost of sales (exclusive of amortization of intangibles, included within operating expenses below) 389,064 293,688 145,807
GROSS PROFIT 596,012 261,360 171,904
Selling, general and administrative expenses 162,205 92,955 53,508
Acquisition-related costs 1,841 32,840 2,912
Research and development expenses 40,707 31,256 19,858
Amortization of intangibles 66,272 43,493 7,422
Impairment of intangible assets 30,376
TOTAL OPERATING EXPENSES 301,401 200,544 83,700
OPERATING INCOME 294,611 60,816 88,204
Amortization of deferred financing costs (4,283) (9,985) (842)
Interest expense, net (51,973) (35,657) (8,649)
Equity in earnings of unconsolidated joint venture 80
Bargain purchase gain 849 3,707
Gain from product divestiture 9,297
Other non-operating income (expense), net (7,048) 871 395
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 232,156 25,342 82,895
Income tax provision 81,358 10,954 30,533
INCOME FROM CONTINUING OPERATIONS$150,798 $14,388 $52,362
Loss from discontinued operations, net of tax$ $(504) $
CONSOLIDATED NET INCOME$150,798 $13,884 $52,362
CONSOLIDATED NET INCOME PER COMMON SHARE:
Income from continuing operations, basic$1.29 $0.14 $0.54
Loss from discontinued operations, basic$ $(0.01) $
CONSOLIDATED NET INCOME, BASIC$1.29 $0.13 $0.54
Income from continuing operations, diluted$1.22 $0.13 $0.46
Loss from discontinued operations, diluted$ $ $
CONSOLIDATED NET INCOME, DILUTED$1.22 $0.13 $0.46
SHARES USED IN COMPUTING CONSOLIDATED NET INCOME PER COMMON
SHARE:
BASIC 116,980 103,480 96,181
DILUTED 125,762 109,588 113,898

FYE 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

TWELVE MONTHS ENDED
DECEMBER 31,
2015 2014
(as Restated)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$ 150,798 $ 14,388
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation expense$ 19,939 $ 14,214
Amortization expense$ 66,272 $ 43,493
Interest expense, net$ 49,029 $ 30,786
Non-cash & convertible debt interest expense$ 2,944 $ 4,871
Income tax provision (benefit)$ 81,358 $ 10,954
EBITDA$ 370,340 $ 118,706
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES
Acquisition-related expenses$ 1,841 $ 32,840
Non-cash stock compensation expense$ 13,198 $ 7,752
Restatement expense$ 27,444 $ -
Gain from foreign currency forward contracts$ - $ (689)
Accelerated write-off of plant costs$ - $ -
Bargain purchase gain$ (849) $ -
Amortization of unfavorable contract liability$ - $ -
Gain from product divestiture$ 369 $ (9,297)
Amortization of inventory gross-up$ 4,681 $ 20,798
Debt financing costs$ 4,283 $ 9,985
Other costs associated with acquisitions$ 460 $ 1,400
Equity in earnings of unconsolidated JV$ - $ -
Loss on Impairment$ 33,003 $ -
Accelerated depreciation on plant assets$ - $ 949
Litigation settlement$ 5,569 $ -
ADJUSTED EBITDA$ 460,339 $ 182,444

FYE 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

TWELVE MONTHS ENDED
December 31,
2015 2014
(as Restated)
NET INCOME FROM CONTINUING OPERATIONS $150,798 $14,388
INCOME TAX PROVISION 81,358 10,954
INCOME BEFORE INCOME TAXES 232,156 25,342
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:
Acquisition-related expenses 1,841 32,840
Restatement expenses 27,444 -
Non-cash stock compensation expense 13,198 7,752
Non-cash interest expense 2,944 4,871
Amortization expense 66,272 43,493
Gain from foreign currency forward contracts - (689)
Gain from product divestitures 369 (9,297)
Bargain purchase gain (849) -
Other costs associated with dispositions 460 1,400
Amortization of inventory gross-up 4,681 20,798
Debt financing costs 4,283 9,985
Loss on impairment 33,003 -
Accelerated depreciation on plant assets - 949
Litigation settlement 5,569 -
ADJUSTED INCOME BEFORE INCOME TAX 391,371 137,444
ADJUSTED INCOME TAX PROVISION 137,155 59,411
ADJUSTED NET INCOME 254,216 78,033
ADJUSTED NET INCOME PER DILUTED SHARE (1) $2.02 $0.63



(1) Twelve months ended December 31, 2014 adjusted net income per diluted share was calculated using diluted shares of approximately 123.1 million, which includes the previously anti-dilutive effect of convertible debt shares.


FYE 2015 Reconciliation of GAAP Gross Margin % to non-GAAP Gross Margin %:

Twelve Months Ended Twelve Months Ended
December 31, 2015 December 31, 2014 (as Restated)
In thousands USD, except per share amounts GAAPAdjustments Adjusted
NON-GAAP
GAAPAdjustments Adjusted
NON-GAAP
Revenues $985,076 $985,076 $555,048 $555,048
Cost of sales (exclusive of amortization of intangibles included below) 389,064 (6,275)a 382,789 293,688 (22,871)a 270,817
GROSS PROFIT 596,012 6,275 602,287 261,360 22,871 284,231
Gross Margin 60.5% 61.1% 47.1% 51.2%
a - Amortization of inventory step-up, stock-based compensation expense, and accelerated depreciation on plant assets (2014).


QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, 2015
(Unaudited)
December 31, 2014 (As restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$ 123,532 $70,679
Trade accounts receivable, net 190,710 187,545
Inventories, net 149,403 135,197
Deferred taxes, current 39,564 38,411
Available for sale security, current 5,558 7,268
Prepaid expenses and other current assets 35,118 37,061
TOTAL CURRENT ASSETS 543,885 476,161
PROPERTY, PLANT AND EQUIPMENT, NET 175,991 144,196
OTHER LONG-TERM ASSETS
Goodwill 285,674 285,283
Product licensing rights, net 689,490 704,791
Other intangibles, net 254,590 255,612
Deferred financing costs, net 22,687 23,704
Deferred taxes, non-current 2,643 2,084
Long-term investments 129 211
Other non-current assets 1,248 1,863
TOTAL OTHER LONG-TERM ASSETS 1,256,462 1,273,548
TOTAL ASSETS$ 1,976,338 $1,893,905
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable$ 57,971 $47,317
Purchase consideration payable, current 12,367 10,970
Income taxes payable
Accrued royalties 13,948 13,204
Accrued compensation 8,375 13,467
Current maturities of long-term debt 10,450 10,450
Accrued administrative fees 36,312 40,870
Accrued expenses and other liabilities 14,428 14,576
TOTAL CURRENT LIABILITIES 153,851 150,854
LONG-TERM LIABILITIES
Long-term debt 1,110,458 1,114,481
Deferred tax liability, non-current 263,466 269,428
Lease incentive obligations and other long-term liabilities 6,388 2,836
TOTAL LONG-TERM LIABILITIES 1,380,312 1,386,745
TOTAL LIABILITIES 1,534,163 1,537,599
SHAREHOLDERS’ EQUITY
Common stock, no par value — 150,000,000 shares authorized; 114,332,873 and 111,734,901 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively 388,475 342,252
Warrants to acquire common stock
Retained earnings 66,788 29,250
Accumulated other comprehensive loss (13,088) (15,195)
TOTAL SHAREHOLDERS’ EQUITY 442,175 356,307
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,976,338 $1,893,905


QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
First Quarter First Quarter
(as Restated)
2015 2014
Revenues$227,378 $90,622
Cost of sales (exclusive of amortization of intangibles included below) 97,215 40,966
GROSS PROFIT 130,163 49,656
Selling, general and administrative expenses 29,986 16,586
Acquisition-related costs 1,257 454
Research and development expenses 9,276 4,419
Amortization of intangibles 16,377 4,757
TOTAL OPERATING EXPENSES 56,896 26,216
OPERATING INCOME 73,267 23,440
Amortization of deferred financing costs (996) (4,251)
Interest expense, net (13,480) (2,161)
Gain from product divestiture
Bargain purchase gain 849
Other non-operating income (expense), net (1,312) 567
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 58,328 17,595
Income tax provision (benefit) 20,790 8,101
INCOME (LOSS) FROM CONTINUING OPERATIONS$37,538 $9,494
(Loss) from discontinued operations, net of tax
NET INCOME (LOSS)$37,538 $9,494
NET INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations, basic$0.33 $0.10
(Loss) from discontinued operations, basic$ $
NET INCOME (LOSS), BASIC$0.33 $0.10
Income (loss) from continuing operations, diluted$0.31 $0.08
(Loss) from discontinued operations, diluted$ $
NET INCOME (LOSS), DILUTED$0.31 $0.08
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:
BASIC 113,352 96,633
DILUTED 125,377 116,884

Quarter ended March 31, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

THREE MONTHS ENDED
MARCH 31,
2015 2014
(as Restated)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$37,538 $9,494
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation expense$5,018 $1,917
Amortization expense$16,377 $4,757
Interest expense, net$12,302 $912
Non-cash interest expense$1,178 $1,249
Income tax provision (benefit)$20,790 $8,101
EBITDA$93,203 $26,430
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES
Acquisition-related expenses$1,257 $454
Non-cash stock compensation expense$2,974 $1,282
Restatement Expense$200
Gain from foreign currency forward contracts$- $(579)
Accelerated Write-off of plant costs$- $-
Bargain purchase gain$(849) $-
Amortization of unfavorable contract liability $-
Gain from product divestiture$144 $-
Amortization of inventory gross-up$4,681 $-
Debt financing costs$996 $4,251
Other costs associated with acquisitions$- $-
Equity in earnings of Unconsolidated JV$- $-
Loss on Impairment$- $-
Accelerated depreciation on plant assets$- $-
Litigation settlement$1,300 $-
ADJUSTED EBITDA$103,906 $31,838

Quarter ended March 31, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

THREE MONTHS ENDED
March 31,
2015 2014
(as Restated)
NET INCOME FROM CONTINUING OPERATIONS $37,538 $9,494
INCOME TAX PROVISION 20,790 8,101
INCOME BEFORE INCOME TAXES 58,328 17,595
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:
Acquisition-related expenses 1,257 454
Restatement expenses 200 -
Non-cash stock compensation expense 2,974 1,282
Non-cash interest expense 1,178 1,249
Amortization expense 16,377 4,757
Gain from foreign currency forward contracts - (579)
Gain from product divestitures 144 -
Bargain purchase gain (849) -
Other costs associated with dispositions - -
Amortization of inventory gross-up 4,681 -
Debt financing costs 996 4,251
Loss on impairment - -
Accelerated depreciation on plant assets - -
Litigation settlement 1,300 -
ADJUSTED INCOME BEFORE INCOME TAX 86,586 29,009
ADJUSTED INCOME TAX PROVISION 30,343 12,540
ADJUSTED NET INCOME 56,243 16,469
ADJUSTED NET INCOME PER DILUTED SHARE $0.45 $0.14


AKORN, INC.
QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
June 30, 2015
(Unaudited)
December 31, 2014
(As restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$ 257,090 $ 70,679
Trade accounts receivable, net 130,812 187,545
Inventories, net 156,315 135,197
Deferred taxes, current 40,717 38,411
Available for sale security, current 5,632 7,268
Prepaid expenses and other current assets 16,447 37,061
TOTAL CURRENT ASSETS 607,013 476,161
PROPERTY, PLANT AND EQUIPMENT, NET 179,239 144,196
OTHER LONG-TERM ASSETS
Goodwill 285,356 285,283
Product licensing rights, net 674,687 704,791
Other intangibles, net 251,283 255,612
Deferred financing costs, net 22,612 23,704
Deferred taxes, non-current 2,982 2,084
Long-term investments 130 211
Other non-current assets 1,282 1,863
TOTAL OTHER LONG-TERM ASSETS 1,238,332 1,273,548
TOTAL ASSETS$ 2,024,584 $ 1,893,905
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable$ 45,536 $ 47,317
Purchase consideration payable, current 4,904 10,970
Income taxes payable 3,525
Accrued royalties 13,716 13,204
Accrued compensation 11,286 13,467
Current maturities of long-term debt 53,971 10,450
Accrued administrative fees 45,229 40,870
Accrued expenses and other liabilities 20,813 14,576
TOTAL CURRENT LIABILITIES 198,980 150,854
LONG-TERM LIABILITIES
Long-term debt 1,026,713 1,114,481
Deferred tax liability, non-current 256,035 269,428
Lease incentive obligations and other long-term liabilities 6,910 2,836
TOTAL LONG-TERM LIABILITIES 1,289,658 1,386,745
TOTAL LIABILITIES 1,488,638 1,537,599
SHAREHOLDERS’ EQUITY
Common stock, no par value — 150,000,000 shares authorized; 119,199,049 and 111,734,901shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively 449,742 342,252
Warrants to acquire common stock
Retained earnings 99,296 29,250
Accumulated other comprehensive loss (13,092) (15,195)
TOTAL SHAREHOLDERS’ EQUITY 535,946 356,307
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$ 2,024,584 $ 1,893,905


QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
Second Quarter Second Quarter YTD -Second Quarter YTD – Second Quarter
2015 2014
(as Restated)
2015 2014
(as Restated)
Revenues$220,920 $133,872 $448,298 $224,494
Cost of sales (exclusive of amortization of intangibles included below) 92,513 73,000 189,728 113,967
GROSS PROFIT 128,407 60,871 258,570 110,527
Selling, general and administrative expenses 35,208 21,168 65,194 37,754
Acquisition-related costs 225 20,940 1,482 21,394
Research and development expenses 10,588 9,588 19,864 14,007
Amortization of intangibles 16,284 8,439 32,661 13,196
TOTAL OPERATING EXPENSES 62,305 60,135 119,201 86,351
OPERATING INCOME 66,102 736 139,369 24,176
Amortization of deferred financing costs (1,026) (2,346) (2,022) (6,597)
Interest expense, net (13,235) (7,917) (26,715) (10,076)
Gain from product divestiture 8,490 8,490
Bargain purchase gain 849
Other non-operating income (expense), net (1,483) (214) (2,795) 351
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 50,358 (1,251) 108,686 16,344
Income tax provision (benefit) 17,850 (499) 38,640 7,602
INCOME (LOSS) FROM CONTINUING OPERATIONS$32,508 $(752) $70,046 $ 8,742
(Loss) from discontinued operations, net of tax$ $(504) $ $ (504)
NET INCOME (LOSS)$32,508 $(1,256) $70,046 $ 8,238
NET INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations, basic$0.28 $(0.01) $0.61 $ 0.09
(Loss) from discontinued operations, basic$ $ $ $ (0.01)
NET INCOME (LOSS), BASIC$0.28 $(0.01) $0.61 $ 0.08
Income (loss) from continuing operations, diluted$0.27 $(0.01) $0.57 $ 0.07
(Loss) from discontinued operations, diluted$ $ $ $
NET INCOME (LOSS), DILUTED$0.27 $(0.01) $0.57 $ 0.07
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:
BASIC 115,808 103,183 114,587 99,926
DILUTED 125,919 103,183 125,650 117,576

Quarter ended June 30, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

THREE MONTHS ENDED
JUNE 30,
2015 2014
(as Restated)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$32,508 $(752)
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation expense$4,285 $3,557
Amortization expense$16,284 $8,439
Interest expense, net$12,373 $6,511
Non-cash interest expense$862 $1,406
Income tax provision (benefit)$17,850 $(499)
EBITDA$84,162 $18,662
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES
Acquisition-related expenses$225 $20,940
Non-cash stock compensation expense$3,157 $1,992
Restatement Expense$5,101 $-
Gain from foreign currency forward contracts$- $(125)
Accelerated Write-off of plant costs$- $-
Bargain purchase gain$- $-
Amortization of unfavorable contract liability$- $-
Gain from product divestiture$215 $(8,490)
Amortization of inventory gross-up$- $3,559
Debt financing costs$1,026 $2,346
Other costs associated with acquisitions$- $1,400
Equity in earnings of Unconsolidated JV$- $-
Loss on Impairment$2,627 $-
Accelerated depreciation on plant assets$- $-
Litigation settlement$- $-
ADJUSTED EBITDA$96,513 $40,284

Quarter ended June 30, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

THREE MONTHS ENDED
June 30,
2015 2014
(as Restated)
NET INCOME FROM CONTINUING OPERATIONS $32,508 $(752)
INCOME TAX PROVISION 17,850 (499)
INCOME BEFORE INCOME TAXES 50,358 (1,251)
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:
Acquisition-related expenses 225 20,940
Restatement expenses 5,101 -
Non-cash stock compensation expense 3,157 1,992
Non-cash interest expense 862 1,406
Amortization expense 16,284 8,439
Gain from foreign currency forward contracts - (125)
Gain from product divestitures 215 (8,490)
Bargain purchase gain - -
Other costs associated with dispositions - 1,400
Amortization of inventory gross-up - 3,559
Debt financing costs 1,026 2,346
Loss on impairment 2,627 -
Accelerated depreciation on plant assets - -
Litigation settlement - -
ADJUSTED INCOME BEFORE INCOME TAX 79,855 30,216
ADJUSTED INCOME TAX PROVISION 27,985 13,170
ADJUSTED NET INCOME 51,870 17,046
ADJUSTED NET INCOME PER DILUTED SHARE $0.41 $0.14


QUARTERLY CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
September 30, 2015
(Unaudited)
December 31, 2014
(As restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$ 314,465 $70,679
Trade accounts receivable, net 138,920 187,545
Inventories, net 175,851 135,197
Deferred taxes, current 41,871 38,411
Available for sale security, current 5,637 7,268
Prepaid expenses and other current assets 22,102 37,061
TOTAL CURRENT ASSETS 698,846 476,161
PROPERTY, PLANT AND EQUIPMENT, NET 177,433 144,196
OTHER LONG-TERM ASSETS
Goodwill 284,708 285,283
Product licensing rights, net 699,443 704,791
Other intangibles, net 212,360 255,612
Deferred financing costs, net 24,263 23,704
Deferred taxes, non-current 3,337 2,084
Long-term investments 129 211
Other non-current assets 748 1,863
TOTAL OTHER LONG-TERM ASSETS 1,224,988 1,273,548
TOTAL ASSETS$ 2,101,267 $ 1,893,905
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable$ 57,765 $ 47,317
Purchase consideration payable, current 4,936 10,970
Income taxes payable 15,489
Accrued royalties 14,452 13,204
Accrued compensation 15,958 13,467
Current maturities of long-term debt 53,450 10,450
Accrued administrative fees 46,929 40,870
Accrued expenses and other liabilities 28,767 14,576
TOTAL CURRENT LIABILITIES 237,746 150,854
LONG-TERM LIABILITIES
Long-term debt 1,024,100 1,114,481
Deferred tax liability, non-current 248,279 269,428
Lease incentive obligations and other long-term liabilities 6,640 2,836
TOTAL LONG-TERM LIABILITIES 1,279,019 1,386,745
TOTAL LIABILITIES 1,516,765 1,537,599
SHAREHOLDERS’ EQUITY
Common stock, no par value — 150,000,000 shares authorized; 119,313,203 and 111,734,901 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively 453,940 342,252
Warrants to acquire common stock
Retained earnings 147,263 29,250
Accumulated other comprehensive loss (16,701) (15,195)
TOTAL SHAREHOLDERS’ EQUITY 584,502 356,307

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$ 2,101,267 1,893,905


QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
Third Quarter Third Quarter YTD -Third Quarter YTD – Third Quarter
2015 2014
(as Restated)
2015 2014
(as Restated)
Revenues$256,801 $127,698 $705,099 $352,192
Cost of sales (exclusive of amortization of intangibles included below) 93,789 82,198 283,517 196,165
GROSS PROFIT 163,012 45,500 421,582 156,027
Selling, general and administrative expenses 45,031 26,799 110,225 64,553
Acquisition-related costs 230 8,159 1,712 29,553
Research and development expenses 10,439 8,758 30,303 22,765
Amortization of intangibles 16,545 13,814 49,206 27,010
TOTAL OPERATING EXPENSES 72,245 57,530 191,446 143,881
OPERATING INCOME (LOSS) 90,767 (12,030) 230,136 12,146
Amortization of deferred financing costs (1,086) (2,272) (3,108) (8,869)
Interest expense, net (12,652) (11,804) (39,367) (21,880)
Gain from product divestiture 847 9,337
Bargain purchase gain 849
Other non-operating income (expense), net (3,014) 1,012 (5,809) 1,363
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 74,015 (24,247) 182,701 (7,903)
Income tax provision (benefit) 26,048 (11,914) 64,688 (4,312)
INCOME (LOSS) FROM CONTINUING OPERATIONS$47,967 $(12,333) $118,013 $ (3,591)
(Loss) from discontinued operations, net of tax$ $ $ $ (504)
NET INCOME (LOSS)$47,967 $(12,333) $118,013 $ (4,095)
NET INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations, basic$0.40 $(0.12) $1.02 $ (0.04)
(Loss) from discontinued operations, basic$ $ $ $
NET INCOME (LOSS), BASIC$0.40 $(0.12) $1.02 $ (0.04)
Income (loss) from continuing operations, diluted$0.39 $(0.12) $0.96 $ (0.04)
(Loss) from discontinued operations, diluted$ $ $ $
NET INCOME (LOSS), DILUTED$0.39 $(0.12) $0.96 $ (0.04)
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:
BASIC 119,260 105,438 116,162 101,784
DILUTED 125,891 105,438 125,738 101,784

Quarter ended September 30, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

THREE MONTHS ENDED
SEPTEMBER 30,
2015 2014
(as Restated)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$47,967 $(12,333)
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation expense$5,145 $4,972
Amortization expense$16,545 $13,814
Interest expense, net$12,201 $10,505
Non-cash interest expense$451 $1,299
Income tax provision (benefit)$26,048 $(11,914)
EBITDA$108,357 $6,343
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES
Acquisition-related expenses$230 $8,159
Non-cash stock compensation expense$3,341 $1,790
Restatement Expense$9,571 $-
Gain from foreign currency forward contracts$- $15
Accelerated Write-off of plant costs$- $-
Bargain purchase gain$- $-
Amortization of unfavorable contract liability$- $-
Gain from product divestiture$11 $(847)
Amortization of inventory gross-up$- $6,285
Debt financing costs$1,086 $2,272
Other costs associated with acquisitions$- $-
Equity in earnings of Unconsolidated JV$- $-
Loss on Impairment$- $-
Accelerated depreciation on plant assets$- $949
Litigation settlement$2,750 $-
ADJUSTED EBITDA$125,346 $24,966

Quarter ended September 30, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

THREE MONTHS ENDED
September 30,
2015 2014
(as Restated)
NET INCOME FROM CONTINUING OPERATIONS $47,967 $(12,333)
INCOME TAX PROVISION 26,048 (11,914)
INCOME BEFORE INCOME TAXES 74,015 (24,247)
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:
Acquisition-related expenses 230 8,159
Restatement expenses 9,571 -
Non-cash stock compensation expense 3,341 1,790
Non-cash interest expense 451 1,299
Amortization expense 16,545 13,814
Gain from foreign currency forward contracts - 15
Gain from product divestitures 11 (847)
Bargain purchase gain - -
Other costs associated with dispositions - -
Amortization of inventory gross-up - 6,285
Debt financing costs 1,086 2,272
Loss on impairment - -
Accelerated depreciation on plant assets - 949
Litigation settlement 2,750 -
ADJUSTED INCOME BEFORE INCOME TAX 108,000 9,489
ADJUSTED INCOME TAX PROVISION 37,906 3,992
ADJUSTED NET INCOME 70,094 5,497
ADJUSTED NET INCOME PER DILUTED SHARE $0.56 $0.05


QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Share Data)
(Unaudited)
Fourth Quarter Fourth Quarter
2015 2014
(As restated)
Revenues$279,977 $202,856
Cost of sales (exclusive of amortization of intangibles included below) 105,547 97,523
GROSS PROFIT 174,430 105,333
Selling, general and administrative expenses 51,980 28,402
Acquisition-related costs 129 3,287
Research and development expenses 10,404 8,491
Amortization of intangibles 17,066 16,483
Intangible impairment 30,376
TOTAL OPERATING EXPENSES 109,955 56,663
OPERATING INCOME 64,475 48,670
Amortization of deferred financing costs (1,175) (1,116)
Interest expense, net (12,606) (13,777)
Gain (loss) from product divestiture (40)
Other non-operating income (expense), net (1,239) (492)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 49,455 33,245
Income tax provision (benefit) 16,670 15,266
INCOME (LOSS) FROM CONTINUING OPERATIONS$32,785 $17,979
(Loss) from discontinued operations, net of tax$ $
NET INCOME (LOSS)$32,785 $17,979
NET INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations, basic$0.27 $0.17
(Loss) from discontinued operations, basic$ $
NET INCOME (LOSS), BASIC$0.27 $0.17
Income (loss) from continuing operations, diluted$0.27 $0.16
(Loss) from discontinued operations, diluted$ $
NET INCOME (LOSS), DILUTED$0.27 $0.16
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE:
BASIC 119,390 108,515
DILUTED 125,698 124,491

Quarter ended December 31, 2015 Reconciliation of Net Income to Non-GAAP Adjusted EBITDA:

THREE MONTHS ENDED
DECEMBER 31,
2015 2014
(as Restated)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS$ 32,785 $ 17,979
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation expense$ 5,491 $ 3,768
Amortization expense$ 17,066 $ 16,483
Interest expense, net$ 12,153 $ 12,860
Non-cash interest expense$ 453 $ 917
Income tax provision (benefit)$ 16,670 $ 15,267
EBITDA$ 84,618 $ 67,274
NON-CASH AND OTHER NON-RECURRING INCOME AND EXPENSES
Acquisition-related expenses$ 129 $ 3,287
Non-cash stock compensation expense$ 3,726 $ 2,688
Restatement Expense$ 12,572 $ -
Gain from foreign currency forward contracts$ - $ -
Accelerated Write-off of plant costs$ - $ -
Bargain purchase gain$ - $ -
Amortization of unfavorable contract liability$ - $ -
Gain from product divestiture$ - $ 40
Amortization of inventory gross-up$ - $ 10,954
Debt financing costs$ 1,175 $ 1,115
Other costs associated with acquisitions$ 460 $ -
Equity in earnings of Unconsolidated JV$ - $ -
Loss on Impairment$ 30,376 $ -
Accelerated depreciation on plant assets$ - $ -
Litigation settlement$ 1,519 $ -
ADJUSTED EBITDA$ 134,575 $ 85,358

Quarter ended December 31, 2015 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP EPS to Non-GAAP EPS:

THREE MONTHS ENDED
December 31,
2015 2014
(as Restated)
NET INCOME FROM CONTINUING OPERATIONS $32,785 $17,979
INCOME TAX PROVISION 16,670 15,267
INCOME BEFORE INCOME TAXES 49,455 33,246
ADJUSTMENTS TO ARRIVE AT ADJUSTED NET INCOME:
Acquisition-related expenses 129 3,287
Restatement expenses 12,572 -
Non-cash stock compensation expense 3,726 2,688
Non-cash interest expense 453 917
Amortization expense 17,066 16,483
Gain from foreign currency forward contracts - -
Gain from product divestitures - 40
Bargain purchase gain - -
Other costs associated with dispositions 460 -
Amortization of inventory gross-up - 10,954
Debt financing costs 1,175 1,115
Loss on impairment 30,376 -
Accelerated depreciation on plant assets - -
Litigation settlement 1,519 -
ADJUSTED INCOME BEFORE INCOME TAX 116,931 68,730
ADJUSTED INCOME TAX PROVISION 40,921 29,709
ADJUSTED NET INCOME 76,010 39,021
ADJUSTED NET INCOME PER DILUTED SHARE $0.60 $0.31


Investors/Media: Stephanie Carrington ICR, Inc. (646) 277-1282 Stephanie.carrington@icrinc.com

Source:Akorn, Inc.