Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (I.R.S. Employer Identification No.) 11570 6 th Street Rancho Cucamonga, CA 91730 (Address of principal executive offices) (zip code) (909) 980-9484 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fro ...

Financial Data and Key Metrics Changes - The company reported revenue of $145.7 million for Q2 2023, an 18% increase from $123.5 million in the same period last year [5][11] - Net income rose to $26.1 million or $0.49 per share, compared to $17.3 million or $0.33 per share in Q2 2022 [17] - Adjusted net income increased by 68% to $34.8 million or $0.65 per share, up from $20.7 million or $0.39 per share in the previous year [17] Business Line Data and Key Metrics Changes - Glucagon injection sales reached $27.3 million, more than doubling from $11.8 million in the prior year, driven by strong market demand [5][11] - Sales of Primatene Mist decreased to $16.5 million from $19 million due to inventory adjustments by retailers, although retail sales grew by 5% [6][12] - Epinephrine sales declined to $16.7 million as competitors returned to normal distribution levels [6][12] - Other finished pharmaceutical products saw a 47% increase in sales, benefiting from competitor shortages [6] Market Data and Key Metrics Changes - The company anticipates a significant role in addressing nationwide drug shortages, particularly in the hospital setting [7] - The FDA approved the brand name Ruxovi for the intranasal naloxone product, with a planned launch delayed to Q4 2023 [7] Company Strategy and Development Direction - The acquisition of BAQSIMI enhances the diabetes portfolio and aligns with the company's focus on proprietary products, biosimilars, and complex products [4] - The company plans to launch glucagon injection in Canada, expanding sales opportunities [14] - Research and development remain a priority, with a focus on advancing the product pipeline and improving margins and cash flow [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities from new products emerging from the pipeline [10] - The company is in positive dialogue with the FDA regarding AMP-002 and remains hopeful for a successful response [8][35] - Management noted that while there will be an increase in sales from shortage products, it will be incremental due to existing production capacity constraints [30] Other Important Information - Gross margins slightly decreased to 50% from 51% year-over-year, impacted by an impairment charge of $2.7 million related to UK product rights [15] - Selling, distribution, and marketing expenses increased due to higher advertising costs for Primatene Mist [16] Q&A Session Summary Question: Marketing strategy for BAQSIMI and expected sales trends - The transition for BAQSIMI will occur in phases, with the company taking over marketing in Q3, anticipating higher sales during the back-to-school period [20] Question: Sales recovery expectations for Primatene Mist - Sales trends are uncertain, but there is an expectation that the current inventory destocking will eventually stabilize sales [21] Question: Future benefits from ongoing supply shortages - The company expects to continue benefiting from supply shortages, particularly in the hospital market [22][29] Question: Glucagon sales mix and institutional penetration - Approximately 60% of glucagon sales are from retail, with significant growth opportunities in the institutional market [27] Question: Nature of CRL for AMP-008 - The CRL is considered minor, and the company plans to respond in Q3 [28] Question: Impact of Pfizer facility damage on product shortages - The company anticipates some benefits from the damage at the Pfizer facility, particularly in hospital products [30]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36509 | --- | --- | |----------------------------------------------------------------------------------------------------- ...

Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) Q1 2023 Results Conference Call May 9, 2023 5:00 PM ET Company Participants Dan Dischner - VP of HR & Corporate Communication William Peters - CFO, Executive VP of Finance, Treasurer & Director Conference Call Participants Tim Chiang - Capital One David Amsellem - Piper Sandler Operator Greetings, and welcome to the Amphastar Pharmaceuticals, Inc. First Quarter Earnings Call. [Operator Instructions] Please note that certain statements made during this call regar ...

[Part I. FINANCIAL INFORMATION](index=6&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Amphastar Pharmaceuticals, Inc.'s unaudited condensed consolidated financial statements for the three months ended March 31, 2023, encompassing balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows with accompanying notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$773,656** | **$741,987** | | Total Current Assets | $407,670 | $378,319 | | **Total Liabilities** | **$225,079** | **$213,329** | | Total Current Liabilities | $105,635 | $94,862 | | **Total Stockholders' Equity** | **$548,577** | **$528,658** | Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Net Revenues** | **$140,022** | **$120,368** | | Gross Profit | $73,840 | $55,826 | | Income from Operations | $33,433 | $21,614 | | **Net Income** | **$26,032** | **$24,253** | | **Diluted EPS** | **$0.50** | **$0.47** | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$40,382** | **$50,765** | | Net cash used in investing activities | ($6,333) | ($9,110) | | Net cash used in financing activities | ($13,548) | $4,648 | | **Net increase in cash** | **$20,517** | **$46,274** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures supporting the financial statements, covering accounting policies, revenue recognition, segment performance, debt, share-based compensation, legal matters, and the planned BAQSIMI® acquisition - The company focuses on developing, manufacturing, and marketing technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulin API products, with most products used in hospital or urgent care settings[31](index=31&type=chunk) Provision for Chargebacks and Rebates (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Beginning balance | $26,606 | $20,167 | | Provision | $69,027 | $46,779 | | Credits and payments | ($67,289) | ($48,394) | | **Ending balance** | **$28,344** | **$18,552** | Segment Net Revenues and Gross Profit (in thousands) | Segment | Net Revenues Q1 2023 | Gross Profit Q1 2023 | Net Revenues Q1 2022 | Gross Profit Q1 2022 | | :--- | :--- | :--- | :--- | :--- | | Finished pharmaceutical products | $136,010 | $76,176 | $116,546 | $56,939 | | API | $4,012 | ($2,336) | $3,822 | ($1,113) | | **Total** | **$140,022** | **$73,840** | **$120,368** | **$55,826** | - On April 20, 2023, the Company agreed to acquire BAQSIMI® from Eli Lilly for **$500.0 million** in cash at closing, a **$125.0 million** guaranteed payment one year after closing, and up to **$450.0 million** in contingent milestone payments[135](index=135&type=chunk) - To finance the BAQSIMI® acquisition, the Company has entered into a debt commitment letter for a **$500.0 million** senior secured term loan facility and a **$150.0 million** senior secured revolving credit facility[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial performance, noting a **16% increase in net revenues to $140.0 million** driven by glucagon sales, alongside gross margin improvements, operating expense trends, liquidity, and the planned BAQSIMI® acquisition - The company's largest products by net revenue are Primatene MIST®, glucagon, epinephrine, lidocaine, enoxaparin, and phytonadione[143](index=143&type=chunk) - In March 2023, the FDA approved the company's naloxone hydrochloride nasal spray 4mg, with a planned launch in Q3 2023[144](index=144&type=chunk) - The company entered into an agreement to acquire BAQSIMI® from Eli Lilly, a significant strategic move to be financed with **$500M** in cash at closing and substantial new debt[152](index=152&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Q1 2023 net revenues increased **16% to $140.0 million**, primarily from **134% glucagon sales growth**, with gross margin improving to **53%** and R&D expenses rising **22% to $19.8 million** due to clinical trials Net Revenues by Key Product (in thousands) | Product | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Glucagon | $25,696 | $10,984 | $14,712 | 134% | | Primatene MIST® | $23,483 | $24,697 | ($1,214) | (5)% | | Epinephrine | $20,091 | $15,156 | $4,935 | 33% | | Lidocaine | $13,646 | $10,590 | $3,056 | 29% | | Phytonadione | $7,713 | $10,475 | ($2,762) | (26)% | | Naloxone | $4,957 | $7,413 | ($2,456) | (33)% | - The increase in sales of glucagon was primarily due to an increase in unit volumes, while the increase in epinephrine sales was due to higher demand caused by competitor shortages[158](index=158&type=chunk) - Gross margins increased to **53%** in Q1 2023 from **46%** in Q1 2022, driven by higher sales of high-margin products like glucagon and epinephrine, and the launch of ganirelix and vasopressin[162](index=162&type=chunk) - Research and development expenses increased by **22% to $19.8 million**, primarily due to increased salary and personnel costs, and a significant rise in clinical trial expenses for the insulin and inhalation product pipeline[165](index=165&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, working capital reached **$302.0 million**, with **$40.4 million** in operating cash flow, deemed sufficient for future operations despite anticipated significant cash requirements for clinical trials and acquisitions - The company expects cash requirements to increase significantly to fund clinical trials, expand manufacturing facilities in the U.S. and China, and pursue strategic acquisitions[172](index=172&type=chunk) - Working capital increased by **$18.5 million** to **$302.0 million** at March 31, 2023, from **$283.5 million** at December 31, 2022[174](index=174&type=chunk) - Net cash from operating activities was **$40.4 million** in Q1 2023, compared to **$50.8 million** in Q1 2022, with the decrease primarily due to changes in working capital, including an increase in accounts receivable[177](index=177&type=chunk)[178](index=178&type=chunk) - Net cash used in financing activities was **$13.5 million**, mainly due to **$8.0 million** in treasury stock purchases and **$4.5 million** used to settle share-based compensation awards[180](index=180&type=chunk) [Item 3. Quantitative and Qualitative Disclosure about Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company faces market risks from investments, interest rates, and foreign currency exchange, with no material changes reported since the December 31, 2022, Annual Report on Form 10-K - The company is exposed to market risk from changes in the value of its investments, interest rate fluctuations, and foreign currency exchange rate changes[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[189](index=189&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[190](index=190&type=chunk) [Part II. OTHER INFORMATION](index=59&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 of the Condensed Consolidated Financial Statements for detailed information on the company's legal proceedings - For information regarding legal proceedings, the report refers to Note 19 in Part I, Item 1 of the financial statements[192](index=192&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section outlines new risks from the proposed BAQSIMI® acquisition, including deal completion failure and increased indebtedness up to **$650 million**, alongside ongoing risks from COVID-19, geopolitical issues, and healthcare legislation - Failure to complete the BAQSIMI® acquisition could negatively impact the stock price and business, and may require payment of a **$5.0 million** termination fee under certain circumstances[193](index=193&type=chunk)[194](index=194&type=chunk) - To finance the acquisition, the company will incur up to **$650.0 million** in new debt, which will materially increase indebtedness and could adversely affect operating results, cash flows, and operational flexibility due to restrictive covenants[202](index=202&type=chunk)[203](index=203&type=chunk)[209](index=209&type=chunk) - The acquisition is subject to regulatory clearance, including under the HSR Act, which could delay or impose conditions on the completion of the transaction[214](index=214&type=chunk)[215](index=215&type=chunk) - Ongoing risks include disruptions from the COVID-19 pandemic affecting supply chains and clinical trials, geopolitical and trade risks associated with manufacturing in China, and the impact of sanctions related to the Russia-Ukraine conflict[221](index=221&type=chunk)[227](index=227&type=chunk)[232](index=232&type=chunk) - The company faces risks from healthcare legislation like the Affordable Care Act and the Inflation Reduction Act of 2022, which could increase costs, mandate price controls, and negatively impact profitability[234](index=234&type=chunk)[240](index=240&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2023, the company repurchased **263,131 shares** at an average of **$30.44 per share**, with **$35.6 million** remaining for repurchase under the authorized buyback program as of March 31, 2023 Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2023 | 138,190 | $28.92 | | February 2023 | 98,504 | $31.35 | | March 2023 | 26,437 | $34.93 | - As of March 31, 2023, **$35.6 million** remained available for repurchase under the company's share buyback program, which was increased by **$50.0 million** in November 2022[245](index=245&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable to the company's current reporting - Not applicable[245](index=245&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's current reporting - Not applicable[245](index=245&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section is not applicable to the company's current reporting - Not applicable[245](index=245&type=chunk) [Item 6. Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including Amended and Restated Bylaws, a contract research agreement amendment, and required CEO/CFO certifications - The report includes several exhibits, such as an amendment to a research agreement with Nanjing Hanxin Pharmaceutical Technology Co., Ltd., and required CEO/CFO certifications (302 and 906)[250](index=250&type=chunk)

Injectables Proprietary Biosimilars Complex Generic Inhalation Corporate Presentation Needham Conference April 2023 Forward Looking Statements This presentation and the accompanying oral presentation contain forward-looking statements that are based on our management's current expectations and assumptions and on information currently available to management. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including, but not limited t ...

Financial Data and Key Metrics Changes - The company reported net revenues for the fiscal year of $499 million, a 14% increase, with gross profit rising by 25% [5] - In Q4 2022, net revenues reached $135 million, a 12% increase from $120.9 million in the previous year [12] - Net income for Q4 2022 was $33.9 million or $0.66 per share, up 72% and 66% respectively compared to the previous year's Q4 [14] Business Line Data and Key Metrics Changes - Glucagon sales increased by 19% to $18.3 million in Q4 2022, driven by competitor product discontinuation [12] - Primatene MIST sales grew to $22.3 million from $21.5 million in the prior year [12] - Other finished pharmaceutical products saw a 52% increase in sales, totaling $33.1 million, attributed to sodium bicarbonate, dextrose, and isoproterenol [12][14] Market Data and Key Metrics Changes - The glucagon market is experiencing growth opportunities due to competitor exits, allowing the company to expand its market share [27] - The company anticipates continued strength in its product portfolio throughout 2023, despite potential fluctuations due to competitor capacity [8] Company Strategy and Development Direction - The company plans to increase marketing spend for Primatene MIST by an additional $2 million to $3 million [6] - A significant increase in R&D investment is planned to support the pipeline and capacity expansion [11][16] - The company is expanding its manufacturing capacity to double output for glucagon and quadruple capacity for inhalation products [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustaining growth in 2023, particularly from glucagon and Primatene MIST [15][30] - The company expects gross margins to remain flat year-over-year due to increased labor and input costs [16] - Management highlighted the importance of maintaining a strong cash position to support stock buybacks and operational expansions [17] Other Important Information - The company reported positive cash flow from operations of approximately $15.2 million in Q4 2022 [15] - The FDA has approved increased manufacturing capacity for glucagon, allowing the company to meet additional market demand [7] Q&A Session Summary Question: What is driving the growth in other finished product sales? - The growth is attributed to market shortages for products like sodium bicarbonate and dextrose, along with increased capacity at the factory [20] Question: How does the company feel about AMP-002 leading up to the potential approval date? - The company remains optimistic about AMP-002 and continues to engage with the agency [21] Question: Can you comment on the growth trajectory for glucagon? - The company sees opportunities for growth due to competitor exits and plans to expand market share [27] Question: What about the filing for AMP-007 and AMP-027? - AMP-007 is expected to be a P4 filing, and AMP-027 is planned for filing in Q2 [29]

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Amphastar Pharmaceuticals develops, manufactures, and markets complex generic and proprietary injectable, inhalation, intranasal, and insulin API products - Amphastar Pharmaceuticals, Inc. is a bio-pharmaceutical company focused on **technically challenging generic and proprietary injectable, inhalation, intranasal, and insulin API products**[14](index=14&type=chunk) Net Revenues and Net Income (2020-2022) | Metric | 2022 ($M) | 2021 ($M) | 2020 ($M) | | :---------- | :-------- | :-------- | :-------- | | Net Revenues| 499.0 | 437.8 | 349.8 | | Net Income | 91.4 | 62.1 | 1.4 | - The company's primary strategic focus is developing and commercializing products with **high technical barriers to market entry**, leveraging proprietary R&D, competitive API sourcing/manufacturing, and improved drug formulations[17](index=17&type=chunk) - The company has **over 20 commercial products** and **more than 20 product candidates** in various stages of development, including generic ANDAs, biosimilar insulin, and proprietary candidates[25](index=25&type=chunk)[51](index=51&type=chunk) Overview Our Markets Our Strengths Our Strategy Our Technical Capabilities Finished Pharmaceutical Products APIs Supply Agreement with MannKind Corporation Research and Development Backlog Manufacturing and Facilities Raw Material and Other Suppliers Sales and Marketing Competition Government Regulation Intellectual Property Human Capital Corporate Information [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) Amphastar faces significant risks including new product development, revenue concentration, supply chain, competition, regulatory complexities, international operations, and intellectual property - The company's success is **highly dependent on its ability to develop, acquire, and commercialize new pharmaceutical products**, with significant investment in R&D and no guarantee of regulatory clearance or commercial success[190](index=190&type=chunk)[191](index=191&type=chunk)[201](index=201&type=chunk) Key Product Revenue Contribution (2020-2022) | Product | 2022 (% of Net Rev) | 2021 (% of Net Rev) | 2020 (% of Net Rev) | | :--------------- | :------------------ | :------------------ | :------------------ | | Primatene MIST® | 17% | 17% | 15% | | Glucagon | 11% | 11% | - | | Epinephrine | 15% | 13% | 7% | | Lidocaine | 11% | 10% | 12% | | Phytonadione | 10% | 10% | 12% | | Enoxaparin | 7% | 8% | 14% | - The company faces **significant competition** from both generic and branded pharmaceutical companies, many of which have greater financial and operational resources, potentially limiting growth and market share[210](index=210&type=chunk)[211](index=211&type=chunk)[216](index=216&type=chunk) - **International operations, particularly manufacturing in China**, expose the company to risks such as political unrest, tariffs, health epidemics (e.g., COVID-19, African swine flu), and changes in trade policies, which could disrupt supply chains and operations[187](index=187&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk) Summary of Risk Factors Risks Relating to our Business and Industry Risks Relating to Regulatory Matters Risks Relating to our International Business Risks Relating to our Intellectual Property Risks Related to Ownership of our Common Stock General Risk Factors [Item 1B. Unresolved Staff Comments](index=153&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[510](index=510&type=chunk) [Item 2. Properties](index=155&type=section&id=Item%202.%20Properties) Amphastar operates 56 owned/leased buildings across six global locations for manufacturing, R&D, and administration, with all facilities FDA-compliant - The company owns or leases **56 buildings across six locations** (U.S., France, China), totaling **1.8 million square feet** for manufacturing, R&D, distribution, packaging, laboratory, office, and warehouse space[70](index=70&type=chunk) - All facilities are regularly inspected by the FDA and are believed to be in **material compliance with cGMP regulations**[70](index=70&type=chunk) - The company continues to expand its **Nanjing, China facility** and believes current manufacturing capacity is **adequate for the near term**[70](index=70&type=chunk)[511](index=511&type=chunk)[513](index=513&type=chunk) [Item 3. Legal Proceedings](index=155&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 20 of the Consolidated Financial Statements - Legal proceedings information is incorporated by reference from Note 20 of the Consolidated Financial Statements[514](index=514&type=chunk) [Item 4. Mine Safety Disclosures](index=155&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[514](index=514&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=156&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Amphastar's common stock trades on Nasdaq (AMPH); no dividends paid since IPO, with **47.9 million shares outstanding** and a **$39.9 million share repurchase** in 2022 - Amphastar's common stock is listed on the Nasdaq Global Select Market under the symbol '**AMPH**'[515](index=515&type=chunk) - The company has **not declared or paid any dividends** on its common stock since its initial public offering and anticipates retaining future earnings for business development[516](index=516&type=chunk) Common Stock Outstanding and Repurchases | Metric | Value | | :----------------------------------- | :-------------- | | Shares Outstanding (Feb 22, 2023) | 47,896,820 | | Shares Repurchased (2022) | 1,335,528 | | Cost of Repurchases (2022) | $39.9 million | | Remaining Buyback Authorization | $43.6 million | Dividend Policy Holders of Record Stock Performance Graph Issuer Purchases of Equity Securities During the Quarter Ended December 31, 2022 Recent Sales of Unregistered Securities [Item 6. [Reserved]](index=157&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[524](index=524&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=159&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Amphastar's consolidated operating results, financial condition, liquidity, and cash flows for 2022, highlighting revenue growth, macroeconomic impacts, and accounting policies - Net revenues increased by **14% to $499.0 million** in 2022 from $437.8 million in 2021, primarily driven by finished pharmaceutical products[15](index=15&type=chunk)[539](index=539&type=chunk) Net Revenues by Segment (2021-2022) | Segment | 2022 ($M) | 2021 ($M) | Change ($M) | Change (%) | | :--------------------------- | :-------- | :-------- | :---------- | :--------- | | Finished Pharmaceutical Products | 486.5 | 419.6 | 66.9 | 16% | | API Products | 12.5 | 18.2 | (5.7) | (31)% | | Total Net Revenues | 499.0 | 437.8 | 61.2 | 14% | Key Finished Pharmaceutical Product Sales (2021-2022) | Product | 2022 ($M) | 2021 ($M) | Change ($M) | Change (%) | | :--------------- | :-------- | :-------- | :---------- | :--------- | | Primatene MIST® | 84.3 | 73.1 | 11.2 | 15% | | Epinephrine | 74.2 | 57.5 | 16.7 | 29% | | Glucagon | 55.3 | 47.6 | 7.7 | 16% | | Lidocaine | 52.5 | 44.4 | 8.1 | 18% | | Phytonadione | 49.5 | 45.5 | 4.0 | 9% | | Naloxone | 26.3 | 27.5 | (1.2) | (5)% | | Enoxaparin | 35.0 | 36.0 | (1.0) | (3)% | - Gross margin increased to **50% in 2022 from 46% in 2021**, driven by higher-margin products like Primatene MIST®, epinephrine, and glucagon, despite increased labor and input costs[539](index=539&type=chunk)[546](index=546&type=chunk) Operating Expenses (2021-2022) | Expense Category | 2022 ($M) | 2021 ($M) | Change ($M) | Change (%) | | :------------------------------- | :-------- | :-------- | :---------- | :--------- | | Selling, Distribution, & Marketing | 21.5 | 17.5 | 4.0 | 23% | | General & Administrative | 45.1 | 51.4 | (6.4) | (12)% | | Research & Development | 74.8 | 60.9 | 13.8 | 23% | - Net cash provided by operating activities was **$89.2 million in 2022, down from $98.0 million in 2021**, primarily due to increased accounts receivables and inventories[560](index=560&type=chunk)[564](index=564&type=chunk)[565](index=565&type=chunk) Overview COVID-19 Pandemic Macroeconomic Trends and Uncertainties Business Segments Results of Operations Liquidity and Capital Resources Critical Accounting Policies Recent Accounting Pronouncements Off Balance Sheet Arrangements Government Regulation [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=181&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Amphastar's market risk exposures include investment, interest rate, and foreign currency exchange risks, impacting its debt and international API business - The company's primary market risk exposures are **investment risk, interest rate risk, and foreign currency exchange risk**[606](index=606&type=chunk) Cash and Investments (2021-2022) | Asset Category | 2022 ($M) | 2021 ($M) | | :----------------------------- | :-------- | :-------- | | Cash & Cash Equivalents | 156.1 | 126.4 | | Short-term Investments | 19.7 | 10.3 | | Restricted Cash & Investments | 2.4 | 2.4 | - As of December 31, 2022, **$13.3 million of the company's $75.9 million long-term debt** had variable interest rates, with a 1% increase in rates potentially raising annual interest expense by **$0.1 million**[610](index=610&type=chunk) - Foreign currency exchange risk primarily affects the **API manufacturing business in France** (euro-denominated sales) and the **Chinese subsidiary ANP** (Chinese yuan remeasurement) A 10% unfavorable change in USD strengthening against foreign currencies would reduce foreign currency gains by approximately **$2.6 million** and other comprehensive income by **$1.6 million** as of December 31, 2022[612](index=612&type=chunk)[615](index=615&type=chunk) Investment Risk Interest Rate Risk Foreign Currency Exchange Risk [Item 8. Financial Statements and Supplementary Data](index=184&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Amphastar's audited consolidated financial statements for 2020-2022, including balance sheets, income statements, cash flows, and detailed notes, with the independent auditor's report - The consolidated financial statements for the periods ended December 31, 2022, 2021, and 2020 are presented in conformity with **U.S. GAAP**[622](index=622&type=chunk)[653](index=653&type=chunk) - Ernst & Young LLP issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2022[623](index=623&type=chunk)[835](index=835&type=chunk)[836](index=836&type=chunk) - Critical audit matters included the **provision for chargebacks estimate** and the **enoxaparin inventory lower of cost or net realizable value estimate**, both requiring significant judgment due to market conditions and complex estimations[626](index=626&type=chunk)[627](index=627&type=chunk)[632](index=632&type=chunk) Consolidated Balance Sheet Highlights (2021-2022) | Metric (in thousands) | Dec 31, 2022 | Dec 31, 2021 | | :--------------------------- | :----------- | :----------- | | Total Assets | $741,987 | $671,529 | | Total Liabilities | $213,329 | $226,007 | | Total Stockholders' Equity | $528,658 | $445,522 | Consolidated Statements of Operations Highlights (2020-2022) | Metric (in thousands) | 2022 | 2021 | 2020 | | :--------------------------- | :----------- | :----------- | :----------- | | Net Revenues | $498,987 | $437,768 | $349,846 | | Gross Profit | $248,860 | $199,739 | $143,340 | | Income from Operations | $107,497 | $69,887 | $10,954 | | Net Income | $91,386 | $63,301 | $1,097 | | Basic EPS | $1.88 | $1.30 | $0.03 | | Diluted EPS | $1.74 | $1.25 | $0.03 | Consolidated Statements of Cash Flows Highlights (2020-2022) | Metric (in thousands) | 2022 | 2021 | 2020 | | :--------------------------- | :----------- | :----------- | :----------- | | Net Cash from Operating Activities | $89,181 | $97,994 | $57,266 | | Net Cash from Investing Activities | $(32,777) | $(28,672) | $(36,415) | | Net Cash from Financing Activities | $(26,439) | $(37,018) | $(2,246) | | Net Increase in Cash | $29,745 | $32,081 | $18,957 | Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=232&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure - There were no changes in or disagreements with accountants on accounting and financial disclosure[827](index=827&type=chunk) [Item 9A. Controls and Procedures](index=232&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with Ernst & Young LLP concurring - Management concluded that disclosure controls and procedures were **effective** as of December 31, 2022[828](index=828&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2022, based on the COSO framework[829](index=829&type=chunk) - Ernst & Young LLP provided an **unqualified opinion** on the effectiveness of internal control over financial reporting[830](index=830&type=chunk)[835](index=835&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended December 31, 2022, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[831](index=831&type=chunk) [Item 9B. Other Information](index=236&type=section&id=Item%209B.%20Other%20Information) The company reported no other information for this item - There is no other information to report[841](index=841&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=236&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reported no disclosures regarding foreign jurisdictions that prevent inspections - There are no disclosures regarding foreign jurisdictions that prevent inspections[841](index=841&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=237&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2023 Annual Meeting of Stockholders Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[843](index=843&type=chunk) [Item 11. Executive Compensation](index=237&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2023 Annual Meeting of Stockholders Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[844](index=844&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=237&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and related stockholder matters are incorporated by reference from the company's 2023 Annual Meeting of Stockholders Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[844](index=844&type=chunk) [Item 13. Relationships and Related Transactions, and Director Independence](index=237&type=section&id=Item%2013.%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding relationships, related transactions, and director independence is incorporated by reference from the company's 2023 Annual Meeting of Stockholders Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[844](index=844&type=chunk) [Item 14. Principal Accountant Fees and Services](index=237&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2023 Annual Meeting of Stockholders Proxy Statement - Information for this item is incorporated by reference from the 2023 Proxy Statement[845](index=845&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=238&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed or incorporated by reference into the Annual Report on Form 10-K - Financial statements filed as part of this report are listed in Part II, Item 8[847](index=847&type=chunk) - The section provides a comprehensive list of exhibits, including corporate governance documents, equity incentive plans, and various supply and loan agreements[848](index=848&type=chunk)[849](index=849&type=chunk)[850](index=850&type=chunk) [Item 16. Form 10-K Summary](index=242&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that there is no Form 10-K Summary provided - No Form 10-K Summary is provided[850](index=850&type=chunk)

Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) Q3 2022 Results Conference Call November 7, 2022 5:00 PM ET Company Participants Dan Dischner - Vice President, Corporate Communications Bill Peters - Chief Financial Officer Dan Dischner - Vice President of Corporate Communications Tony Marrs - Senior Vice President of Regulatory Affairs and Clinical Operations Conference Call Participants David Amsellem - Piper Sandler Serge Belanger - Needham & Company Elliot Wilbur - Raymond James Operator Greetings, and wel ...