Lannett third quarter net sales increase 19% to $30.7 million

Lannett Company, Inc. (NYSE AMEX: LCI) today reported financial results for the fiscal 2012 third quarter and nine months ended March 31, 2012.

For the third quarter of fiscal 2012, net sales rose 19% to $30.7 million from $25.9 million for the same quarter last year. Gross profit doubled to $10.9 million compared with $5.3 million for the fiscal 2011 third quarter. As a percentage of net sales, gross margin was 35% compared with 20% for the fiscal third quarter of last year. Research and development (R&D) expenses were $2.9 million compared with $1.9 million in the fiscal 2011 third quarter. Selling, general and administrative (SG&A) expenses were $5.6 million, which included $560,000 for expenses related to a marketing agreement the company entered into in connection with promoting one of its branded pain management products, compared with $4.3 million in the same quarter of the prior year. Operating income was $2.4 million compared to an operating loss of $830,000 for the third quarter of fiscal 2011. Net income attributable to Lannett Company was $1.7 million, or $0.06 per diluted share, versus a net loss attributable to Lannett Company of $362,000, or $0.01 per share, for the comparable quarter of fiscal 2011.

"As expected, our solid financial performance in the fiscal 2012 third quarter showed substantial improvement over the previous two quarters," said Arthur Bedrosian, president and chief executive officer of Lannett. "Specifically, our results for the quarter were driven by strong sales of our cardiovascular and pain management products, as well as price increases on certain other products. We also benefited from improved manufacturing efficiencies."

For the first nine months of fiscal 2012, net sales increased to $87.3 million from $81.3 million for the comparable prior year period. Gross profit rose to $26.9 million from $19.6 million for the same period in the prior year. As a percentage of net sales, gross margin was 31% compared with 24% for the prior year nine-month period. R&D expenses were $7.9 million compared with $5.6 million for the first nine months of fiscal 2011. SG&A expenses were $14.8 million compared with $11.8 million in the same period of the prior year. Operating income was $4.3 million compared with $2.3 million for the first nine months of fiscal 2011. Net income attributable to Lannett Company was $2.5 million, or $0.09 per diluted share, compared with $1.6 million, or $0.06 per diluted share, for the first nine months of the prior year.