Amneal Pharmaceuticals(US:AMRX)2025-08-07 20:10PART I - FINANCIAL INFORMATION This section covers the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the period ended June 30, 2025 Item 1. Financial Statements (Unaudited) This section presents Amneal Pharmaceuticals' unaudited consolidated financial statements, including statements of operations, balance sheets, and cash flows, for the three and six months ended June 30, 2025, with accompanying notes Consolidated Statements of Operations The company reported significant growth in net income for both the three and six-month periods ended June 30, 2025, compared to the prior year, driven by increased net revenue and improved operating income Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $724,508 | $701,780 | $1,419,928 | $1,360,971 | | Gross profit | $286,253 | $249,947 | $542,144 | $488,007 | | Operating income | $111,372 | $95,470 | $211,719 | $84,724 | | Net income (loss) attributable to Amneal | $22,417 | $5,994 | $34,612 | $(85,649) | | Diluted EPS | $0.07 | $0.02 | $0.11 | $(0.28) | Consolidated Balance Sheets As of June 30, 2025, total assets decreased slightly to $3.42 billion from $3.50 billion at year-end 2024, primarily due to reductions in intangible assets and cash, while total liabilities also decreased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $71,544 | $110,552 | | Total current assets | $1,584,692 | $1,587,806 | | Total assets | $3,422,788 | $3,501,445 | | Revolving credit facility | $290,000 | $100,000 | | Total long-term debt, net | $2,146,403 | $2,161,790 | | Total liabilities | $3,469,519 | $3,545,983 | | Total stockholders' deficiency | $(112,533) | $(109,512) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities significantly increased, while net cash used in investing and financing activities also rose Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $91,227 | $35,247 | | Net cash used in investing activities | $(44,345) | $(26,225) | | Net cash used in financing activities | $(80,853) | $(58,241) | | Net decrease in cash, cash equivalents, and restricted cash | $(34,748) | $(49,485) | Notes to Consolidated Financial Statements The notes provide detailed information on significant accounting policies, financial statement accounts, revenue disaggregation, debt refinancing, and legal proceedings, including the opioid litigation settlement - Revenue is highly concentrated, with three customers (A, B, and C) accounting for 23%, 16%, and 21% of total net revenue, respectively, for the first six months of 202539 - In January 2025, the company paid the entire remaining principal balance of $192.0 million on its Term Loan Due 2025 using borrowings from its revolving credit facility and cash on hand65 - The company reached a nationwide settlement in principle for opioid cases, agreeing to pay $92.5 million in cash over ten years and provide $180.0 million in naloxone nasal spray, with a $94.4 million charge recorded in Q1 2024, bringing the total liability to $114.5 million as of June 30, 20259192 - Subsequent to the quarter end, on August 1, 2025, the company refinanced its debt by issuing $600 million in senior secured notes due 2032 and borrowing $2.1 billion in new term loans due 2032 to repay its existing Term Loan Due 2028 and revolving credit facility borrowings133 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes the company's financial performance for the three and six months ended June 30, 2025, detailing revenue growth drivers, segment performance, gross margin trends, operating expenses, and liquidity, including recent debt refinancing Results of Operations For Q2 2025, net revenue grew 3.2% to $724.5 million, and gross margin improved to 39.5%, leading to a 16.7% increase in operating income, while the six-month period saw 4.3% revenue growth and a significant rise in operating income Consolidated Results - Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Net revenue | $724,508 | $701,780 | 3.2% | | Gross profit | $286,253 | $249,947 | 14.5% | | Operating income | $111,372 | $95,470 | 16.7% | Consolidated Results - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Net revenue | $1,419,928 | $1,360,971 | 4.3% | | Gross profit | $542,144 | $488,007 | 11.1% | | Operating income | $211,719 | $84,724 | nm | - Key drivers for revenue growth included new product launches in the Affordable Medicines segment ($33.0 million in Q2, $73.8 million in H1) and increased sales of CREXONT®, RYTARY®, and UNITHROID® in the Specialty segment149174 Segment Performance Analysis In Q2 2025, Affordable Medicines revenue increased by 1.4% due to new products, Specialty revenue grew 23.1% from strong brand performance, and AvKARE's operating income rose 65.3% despite a 4.3% revenue decrease due to a favorable product mix - Affordable Medicines: Q2 revenue grew 1.4% to $433.4 million, with operating income up 1.1% to $102.4 million, driven by $33.0 million in new product contributions155156 - Specialty: Q2 revenue grew 23.1% to $128.0 million, primarily from increases in CREXONT® ($11.2 million), RYTARY® ($9.0 million), and UNITHROID® ($3.7 million), leading to a 32.2% rise in operating income to $35.5 million160161 - AvKARE: Q2 revenue decreased 4.3% to $163.0 million, but operating income increased 65.3% to $18.1 million due to a favorable shift from low-margin distribution to higher-margin government label sales166167 Liquidity and Capital Resources The company's liquidity is primarily derived from operations and debt financing, with a recent major debt refinancing completed post-quarter to extend maturities and repay existing obligations - The company believes its current liquidity is sufficient to fund operations, interest, and contractual obligations for the next 12 months198 - On August 1, 2025, the company refinanced its debt, issuing $600 million in 6.875% senior secured notes due 2032 and borrowing $2.1 billion in new term loans due 2032 to repay its Term Loan Due 2028 and revolving credit facility207 - Net cash from operating activities for the first six months of 2025 was $91.2 million, a significant increase from $35.2 million in the prior year, primarily due to a $52.4 million litigation settlement payment made in 2024211212 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its assessment of market risk compared to the disclosures in its 2024 Annual Report on Form 10-K - There has not been any material change in the company's assessment of market risk as set forth in its 2024 Annual Report on Form 10-K220 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The Co-Chief Executive Officers and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025222 - No material changes were made to internal control over financial reporting during the quarter ended June 30, 2025223 PART II - OTHER INFORMATION This section addresses legal proceedings, risk factors, and other miscellaneous disclosures, including equity sales, senior security defaults, and exhibits Item 1. Legal Proceedings This section incorporates by reference the detailed information regarding legal proceedings found in Note 16. Commitments and Contingencies of the financial statements - Information regarding legal proceedings is detailed in Note 16. Commitments and Contingencies within the financial statements225 Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K226 Other Items (Items 2, 3, 4, 5, 6) This section confirms no unregistered sales of equity securities, no defaults upon senior securities, and no other material information to report under Item 5, with Item 6 listing the exhibits filed - The report indicates no activity for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), and Item 5 (Other Information)227228229