California-based Pharmaceutical Company Impax Laboratories Inc. (IPXL, Financial) came out with its fourth quarter results for the year ended December 31, 2014 on Feb 24, declaring a 30.2% increase in the quarter revenues. The results are especially exciting because the company had announced a loss in the corresponding quarter last year.
About the Company
Impax Laboratories Inc. has two divisions: the Global Pharmaceuticals Division, which in into the business of generic products and services and Impax Pharmaceuticals division, which is into brand products and services.
Quarter revelation
The 30% rise in the quarter revenues translated to $131.2 million in actual numbers beating the analyst’s estimation of $128.8 million. Impax had reported revenue of $100.7 million in the fourth quarter of 2013.
Earnings adjusted to one-time gains and costs were 16 cents per share where as the net income figure stood at less than 1 cent per share. The company beat the average Wall Street expectation of 11 cents per share. In the corresponding quarter of 2013, Impax had reported a loss of 2 cents per diluted share. On a GAAP basis, the company reported a break-even diluted EPS for this quarter compared to a loss of 14 cents per diluted share in the corresponding quarter of previous year.
The adjusted EBIDTA for t his period rose from $25.8 M=million to $27.4 million. The cash and cash equivalents and short term investments shot up to $414.9 million in this quarter as compared to $1.6 million in the quarter four of 2013.
Global Pharmaceutical: The revenues for this division increased by 35.5% to $117.9 million, which is a rise from $87 million of corresponding quarter last year. The gross margin for the quarter increased by 44.8% as compared to 30.4% in the corresponding period last year. The operating expenses decreased to $14.4 million as compared to $18 million in the last quarter of 2013.
Impax Pharmaceuticals: The division reported a decrease of 3.3% of $13.3 million in the total revenues for the quarter. The figure in the corresponding quarter of 2013 was slightly higher at $13.8 million. Gross Margin increased by 60%, an increase from 56.7% reported in the third quarter of 2013. The operating expenses increased from $18.5 million in last year’s quarter to $19.9 million this year.
Annual revelation
The annual revenue figure for Impax stood at $596 million, which is a rise of 16.5% since last year. The company reported an annual profit of $57.4 million, or 81 cents per share. Impax had reported annual revenue of $511.5 million for 2013. Adjusted diluted EPS for 2014 was $1.32, which is an increase of 61% as compared to 82 cents per share in 2013. On a GAAP basis, the diluted EPS for 2014 stood at 81 cents as compared to $1.47 per diluted share in 2013. This difference could be accounted to the receipt of $150 million in pre-tax settlements in 2013.
The adjusted annual EBITDA rose by $7.13 million to $186.7 million, which is a good jump from $115.4 million reported by the company for 2013.
In 2014, the brand division of Impax reported 39% increase in sales and 23% rise in the prescription of its Zomig nasal spray.
Other Factors
Impax Laboratories launched authorized generic Renvela and was successful in maximizing the product portfolio of solid oral and alternative dosage form products. The company competes with Teva Pharmaceutical Industries Limited (TEVA, Financial) and Mylan Inc. (MYL, Financial).
Summary
The shares of Impax Laboratories have risen by 29% since the beginning of the year and the stock has climbed 59% in the last 12 months. Impax Laboratories Inc has made a quarter-by-quarter and annual recovery which is noteworthy, especially in the scenario of loss to profit. Besides a short period between August to September last year, the stock has been steadily rising. Hence it would be safe to summarize that the stock is a ‘Buy’ option.
