Core Insights - Elite Pharmaceuticals, Inc. (ELTP) has experienced a significant decline in stock price, losing 10.7% since its earnings report for the quarter ended December 31, 2025, compared to a 0.2% gain in the S&P 500 Index during the same period [1] Financial Performance - For Q3 fiscal 2026, Elite Pharmaceuticals reported total revenues of $31.6 million, a 119.9% increase from $14.4 million in the same quarter last year [2] - Manufacturing fees rose by 128.4% to $31.4 million from $13.7 million, while licensing fees fell by 67.2% to $0.2 million from $0.6 million [2] - Gross profit increased by 111.7% year over year to $12.9 million from $6.1 million, with a gross margin of 41%, slightly down from 43% in the prior-year period [2] Operating Expenses and Income - Operating expenses decreased by 21.5% year over year to $3.9 million from $5 million, attributed to lower research and development and general administrative costs [3] - Income from operations surged to $9 million from $1.1 million in the prior-year quarter, while net income reached $18.6 million compared to a net loss of $10.9 million a year earlier [3] - On a per-share basis, ELTP earned $0.01 against a loss of $0.01 in the prior-year quarter [3] Business Segments - Elite Pharmaceuticals operates in a single reportable segment focused on ANDA (generic) products, generating operating income of $11.9 million in the quarter, up from $4.3 million a year earlier [4] Year-to-Date Performance - For the first nine months of fiscal 2026, revenue totaled $108.1 million, up from $52 million in the comparable period last year [5] - Gross profit for the nine-month period rose to $54.3 million from $22.8 million, and income from operations increased to $38.9 million from $8.4 million [5] - Operating cash flow improved significantly to $14.6 million for the nine months ended December 31, 2025, from $3.5 million in the prior-year period [5] Balance Sheet Strength - The balance sheet strengthened, with cash rising to $21.1 million as of December 31, 2025, from $11.3 million as of March 31, 2025 [6] - Working capital improved to $83.6 million as of December 31, 2025, from $45.9 million as of March 31, 2025 [6] Management Commentary - Management attributed revenue and profit growth to strong sales of recently launched Elite-label generics and broader product portfolio expansion [7] - The company has transitioned into a larger-scale generic supplier, with increased market penetration and customer reach as key drivers of improved financial performance [7] Margin Insights - Management noted that the gross margin dip compared to the year-ago quarter was due to a higher proportion of indirect sales through wholesalers, which typically carry lower margins [8] - Certain one-time costs related to new product introductions did not recur in the December period, impacting earlier quarters [8] Research and Development - Research and development expenses declined by 41.9% year over year to $1 million in the quarter from $1.8 million, reflecting a shift in resource allocation [9] - General and administrative expenses also decreased by 9.5% year over year to $2.5 million from $2.7 million [9] Strategic Priorities - While no formal quantitative guidance was provided, management expressed confidence in fiscal 2026 being the strongest year to date, with year-to-date revenue already exceeding prior full-year results [11] - The company highlighted continued investment in research and development, additional ANDA filings, and potential merger and acquisition opportunities as strategic priorities [11] - Management is also evaluating uplisting alternatives should suitable M&A opportunities not materialize [11] Recent Developments - During the quarter, Elite Pharmaceuticals expanded its generic portfolio, receiving FDA approval in November 2025 for a generic version of Ropinirole Extended-Release Tablets [12] - Earlier asset acquisitions included approved ANDAs for products such as Methadone Hydrochloride Tablets under an agreement with Nostrum Laboratories [12]