Assertio (ASRT) - 2021 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements and notes for Q1 2021 Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and shareholders' equity at specific dates Balance Sheet Items | ASSETS/LIABILITIES | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----------------- | :---------------------------- | :------------------------------- | | Cash and cash equivalents | $61,033 | $20,786 | | Total current assets | $124,069 | $94,254 | | Total assets | $325,424 | $303,274 | | Total current liabilities | $109,090 | $132,686 | | Total liabilities | $220,121 | $247,760 | | Shareholders' Equity | $105,303 | $55,514 | - Total assets increased by $22.15 million from December 31, 2020, to March 31, 2021, primarily driven by a significant increase in cash and cash equivalents[7] - Total liabilities decreased by $27.64 million, mainly due to a reduction in current liabilities, particularly accrued rebates, returns, and discounts, and accrued liabilities[7] Condensed Consolidated Statements of Comprehensive Income This section reports the company's revenues, expenses, and net income over specific periods Comprehensive Income Metrics | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Total revenues | $26,839 | $20,917 | | Total costs and expenses | $19,332 | $37,549 | | Income (Loss) from operations | $7,507 | $(16,632) | | Total other (expense) income | $(2,415) | $59,910 | | Net income and Comprehensive income | $4,544 | $41,230 | | Basic net income per share | $0.03 | $0.51 | | Diluted net income per share | $0.03 | $0.51 | - Total revenues increased by $5.92 million (28.3%) year-over-year, primarily driven by product sales from newly acquired INDOCIN and SPRIX products[10] - The company swung from an operating loss of $16.63 million in Q1 2020 to an operating income of $7.51 million in Q1 2021, largely due to reduced selling, general and administrative expenses[10] - Net income decreased significantly from $41.23 million in Q1 2020 to $4.54 million in Q1 2021, mainly due to a large one-time gain on the sale of Gralise in the prior year[10] Condensed Consolidated Statements of Shareholders' Equity This section details changes in the company's equity accounts, including common stock and retained earnings Shareholders' Equity Summary | Metric | December 31, 2020 (in thousands) | March 31, 2021 (in thousands) | | :-------------------------------- | :------------------------------- | :---------------------------- | | Common Shares (in thousands) | 113,569 | 173,744 | | Stock Amount (in thousands) | $13 | $18 | | Additional Paid-In Capital (in thousands) | $483,446 | $528,686 | | Accumulated Earnings (Deficit) (in thousands) | $(427,945) | $(423,401) | | Shareholders' Equity (in thousands) | $55,514 | $105,303 | - Shareholders' equity increased by $49.79 million from December 31, 2020, to March 31, 2021, primarily driven by the issuance of common stock in connection with stock offerings ($44.86 million) and net income ($4.54 million)[13] - Common shares outstanding increased significantly from 113,569 thousand to 173,744 thousand, largely due to the issuance of 57,600 thousand shares in stock offerings[13] Condensed Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash used in operating activities | $(4,226) | $(25,063) | | Net cash provided by investing activities | — | $449,036 | | Net cash provided by (used in) financing activities | $44,473 | $(360,107) | | Net increase in cash and cash equivalents | $40,247 | $63,866 | | Cash and cash equivalents at end of period | $61,033 | $105,973 | - Net cash used in operating activities decreased significantly from $25.06 million in Q1 2020 to $4.23 million in Q1 2021, primarily due to the prior year's divestitures of Gralise and NUCYNTA[17][135] - Net cash provided by financing activities was $44.47 million in Q1 2021, a substantial increase from the $360.11 million used in Q1 2020, driven by proceeds from registered direct stock offerings in February 2021[17][137] Notes to Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of comprehensive income, statements of shareholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, revenue breakdown, asset and liability components, debt, equity, and commitments for the quarter ended March 31, 2021 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines significant accounting policies, SEC compliance, and the impact of COVID-19 on company operations - The company adapted to COVID-19 by initiating remote work and increasing virtual visits with providers due to limitations on in-person interactions[23] - COVID-19 led to a decline in prescriptions associated with elective surgeries, impacting the company's product sales[23] NOTE 2. REVENUE This note disaggregates Q1 2021 and 2020 revenue by type, highlighting Zyla Merger product sales and NUCYNTA divestiture impacts Revenue Breakdown by Type | Revenue Type | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Product sales, net | $26,405 | $9,252 | | Commercialization agreement, net | — | $11,258 | | Royalties and milestones | $434 | $407 | | Total revenues | $26,839 | $20,917 | - Product sales, net, increased significantly to $26.41 million in Q1 2021 from $9.25 million in Q1 2020, primarily due to the acquisition of INDOCIN Products ($14.60 million) and SPRIX ($1.70 million) from the Zyla Merger in May 2020[26][27] - Commercialization agreement revenue ceased in Q1 2021, compared to $11.26 million in Q1 2020, following the sale of the NUCYNTA franchise in February 2020[26][29] NOTE 3. ACCOUNTS RECEIVABLES, NET This note details the components of accounts receivable, net, as of March 31, 2021, and December 31,