amph_Current_Folio_10Q_Q1

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 MARCH 31, 2020

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.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

33-0702205

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

11570 6th Street

 

 

Rancho Cucamonga, CA

 

91730

(Address of principal executive offices)

 

(zip code)

 

(909) 980-9484

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No      

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

T

 

 

 

 

 

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

Common Stock, par value $0.0001 per share

 

AMPH

 

The NASDAQ Stock Market LLC

 

 

 

 

 

 

 

 

The number of shares outstanding of the registrant’s only class of common stock as of May 6, 2020 was 46,198,304.

 

 

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020

 

Special Note About Forward-Looking Statements 

 

 

 

Part I. FINANCIAL INFORMATION 

 

 

PAGE

Item 1. Financial Statements (unaudited) 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 

 

1

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 

 

2

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2020 and 2019 

 

3

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019 

 

4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 

 

5

Notes to Condensed Consolidated Financial Statements 

 

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

 

29

Item 3. Quantitative and Qualitative Disclosure about Market Risk 

 

36

Item 4. Controls and Procedures 

 

36

Part II. OTHER INFORMATION 

Item 1. Legal Proceedings 

 

37

Item 1A. Risk Factors 

 

37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

40

Item 3. Defaults Upon Senior Securities 

 

40

Item 4. Mine Safety Disclosures 

 

40

Item 5. Other Information 

 

41

Item 6. Exhibits 

 

41

Signatures 

 

42

 

 

 

Table of Contents

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, or Quarterly Report, contains “forward-looking statements” that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words. Forward-looking statements relate to future events or future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements about:

 

·

our expectations regarding the sales and marketing of our products;

 

·

our expectations regarding our manufacturing and production and the integrity of our supply chain for our products, including the risks associated with our single source suppliers;

·

the impact of the COVID-19 pandemic and related responses of business and governments to the pandemic on our operations and personnel, and on commercial activity and demand across our business operations and results of operations;

·

interruptions to our manufacturing and production as a result of natural catastrophic events or other causes beyond our control such as power disruptions or widespread disease outbreaks, such as the COVID-19 pandemic;

·

global, national and local economic and market conditions, specifically with respect to geopolitical uncertainty, and the COVID-19 pandemic;

 

·

the timing and likelihood of U.S. Food and Drug Administration, or FDA, approvals and regulatory actions on our product candidates, manufacturing activities and product marketing activities;

 

·

our ability to advance product candidates in our platforms into successful and completed clinical trials and our subsequent ability to successfully commercialize our product candidates;

 

·

our ability to compete in the development and marketing of our products and product candidates;

·

our expectations regarding the business expansion plans for our Chinese subsidiary, ANP;

 

·

the potential for adverse application of environmental, health and safety and other laws and regulations on our operations;

 

·

our expectations for market acceptance of our new products and proprietary drug delivery technologies, as well as those of our active pharmaceutical ingredient, or API, customers;

 

·

the potential for our marketed products to be withdrawn due to patient adverse events or deaths, or if we fail to secure FDA approval for products subject to the Prescription Drug Wrap-Up program;

 

·

our expectations in obtaining insurance coverage and adequate reimbursement for our products from third-party payers;

 

·

the amount of price concessions or exclusion of suppliers adversely affecting our business;

 

·

our ability to establish and maintain intellectual property protection for our products and our ability to successfully defend our intellectual property in cases of alleged infringement;

 

·

the implementation of our business strategies, product development strategies and technology utilization;

 

·

the potential for exposure to product liability claims;

 

·

future acquisitions, divestitures or investments, including the anticipated benefits of such acquisitions, divestitures or investments;

 

·

our ability to expand internationally;

 

·

economic and industry trends and trend analysis;

 

·

our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

·

the impact of trade tariffs, export or import restrictions, or other trade barriers;

·

the impact of Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate including the potential for drug price controls;

·

the impact of global and domestic tax reforms, including the Tax Cuts and Jobs Act of 2017, or the Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act;

 

·

the timing for completion and the validation of the new construction at our ANP and Amphastar facilities; and

 

 

·

our financial performance expectations, including our expectations regarding our backlog, revenue, cost of revenue, gross profit or gross margin, operating expenses, including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability.

 

You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking

 

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statements. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. In particular, the extent of COVID-19’s impact on our business will depend on several factors, including the severity, duration and extent of the pandemic, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. We discuss many of these risks and uncertainties in greater detail in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2019, particularly in Item 1A. “Risk Factors.” These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report regardless of the time of delivery of this Quarterly Report, and such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report.

 

Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “Amphastar,” “the Company,” “we,” “our,” and “us” refer to Amphastar Pharmaceuticals, Inc. and our subsidiaries.

 

 

 

Table of Contents

PART I – FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

 

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

    

March 31, 

    

December 31, 

 

 

 

2020

 

2019

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,845

 

$

73,685

 

Restricted cash

 

 

1,865

 

 

1,865

 

Short-term investments

 

 

12,203

 

 

11,675

 

Restricted short-term investments

 

 

2,290

 

 

2,290

 

Accounts receivable, net

 

 

57,784

 

 

45,376

 

Inventories

 

 

107,900

 

 

110,501

 

Income tax refunds and deposits

 

 

814

 

 

311

 

Prepaid expenses and other assets

 

 

9,023

 

 

9,538

 

Total current assets

 

 

246,724

 

 

255,241

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

231,476

 

 

233,856

 

Finance lease right-of-use assets

 

 

798

 

 

887

 

Operating lease right-of-use assets

 

 

17,934

 

 

18,805

 

Goodwill and intangible assets, net

 

 

40,472

 

 

41,153

 

Other assets

 

 

11,192

 

 

11,156

 

Deferred tax assets

 

 

24,235

 

 

25,873

 

Total assets

 

$

572,831

 

$

586,971

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

65,438

 

$

77,051

 

Income taxes payable

 

 

2,994

 

 

2,042

 

Current portion of long-term debt

 

 

11,458

 

 

7,741

 

Current portion of operating lease liabilities

 

 

3,481

 

 

3,175

 

Total current liabilities

 

 

83,371

 

 

90,009

 

 

 

 

 

 

 

 

 

Long-term reserve for income tax liabilities

 

 

3,425

 

 

3,425

 

Long-term debt, net of current portion

 

 

36,410

 

 

39,394

 

Long-term operating lease liabilities, net of current portion

 

 

15,230

 

 

16,315

 

Deferred tax liabilities

 

 

765

 

 

867

 

Other long-term liabilities

 

 

10,257

 

 

9,433

 

Total liabilities

 

 

149,458

 

 

159,443

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding

 

 

 

 

 

Common stock: par value $0.0001; 300,000,000 shares authorized; 52,864,991 and 46,306,103 shares issued and outstanding as of March 31, 2020 and 52,495,483 and 46,576,968 shares issued and outstanding as of December 31, 2019, respectively

 

 

 5

 

 

 5

 

Additional paid-in capital

 

 

371,144

 

 

367,305

 

Retained earnings

 

 

120,319

 

 

116,370

 

Accumulated other comprehensive loss

 

 

(5,461)

 

 

(4,687)

 

Treasury stock

 

 

(108,493)

 

 

(97,627)

 

Total Amphastar Pharmaceuticals, Inc. stockholders’ equity

 

 

377,514

 

 

381,366

 

Non-controlling interests

 

 

45,859

 

 

46,162

 

Total equity

 

 

423,373

 

 

427,528

 

Total liabilities and stockholders’ equity

 

$

572,831

 

$

586,971

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

 

-1-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

    

2020

    

2019

 

Net revenues

 

$

84,688

 

$

79,790

 

Cost of revenues

 

 

47,865

 

 

48,887

 

Gross profit

 

 

36,823

 

 

30,903

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, distribution, and marketing

 

 

3,294

 

 

3,141

 

General and administrative

 

 

10,746

 

 

16,327

 

Research and development

 

 

15,303

 

 

14,607

 

Total operating expenses

 

 

29,343

 

 

34,075

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

7,480

 

 

(3,172)

 

 

 

 

 

 

 

 

 

Non-operating (expenses) income:

 

 

 

 

 

 

 

Interest income

 

 

153

 

 

148

 

Interest expense

 

 

(76)

 

 

(30)

 

Other expenses, net

 

 

(1,752)

 

 

(579)

 

Total non-operating expenses, net

 

 

(1,675)

 

 

(461)

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

5,805

 

 

(3,633)

 

Income tax provision (benefit)

 

 

2,280

 

 

(1,479)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,525

 

$

(2,154)

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

$

(424)

 

$

(3,022)

 

 

 

 

 

 

 

 

 

Net income attributable to Amphastar Pharmaceuticals, Inc.

 

$

3,949

 

$

868

 

 

 

 

 

 

 

 

 

Net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders:

 

 

 

 

 

 

 

Basic

 

$

0.09

 

$

0.02

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.08

 

$

0.02

 

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders:

 

 

 

 

 

 

 

Basic

 

 

46,408

 

 

46,744

 

 

 

 

 

 

 

 

 

Diluted

 

 

48,248

 

 

50,416

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

-2-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

    

2020

    

2019

 

Net income attributable to Amphastar Pharmaceuticals, Inc.

 

$

3,949

 

$

868

 

 

 

 

 

 

 

 

 

Other comprehensive loss attributable to Amphastar Pharmaceuticals, Inc., net of income taxes

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(774)

 

 

(113)

 

Total other comprehensive loss attributable to Amphastar Pharmaceuticals, Inc.

 

 

(774)

 

 

(113)

 

 

 

 

 

 

 

 

 

Total comprehensive income attributable to Amphastar Pharmaceuticals, Inc.

 

$

3,175

 

$

755

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

-3-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited; in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Accumulated

 

Treasury Stock

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

 

Amphastar

 

Non-

 

 

 

 

 

 

 

 

 

 

Paid-in

 

Retained

 

Comprehensive

 

 

 

 

 

 

Stockholders'

 

controlling

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

loss

 

Shares

 

Amount

 

Equity

 

Interest

 

Total

Balance as of December 31, 2019

 

52,495,483

 

$

 5

 

$

367,305

 

$

116,370

 

$

(4,687)

 

(5,918,515)

 

$

(97,627)

 

$

381,366

 

$

46,162

 

$

427,528

Net income attributable to Amphastar Pharmaceuticals, Inc.

 

 —

 

 

 —

 

 

 —

 

 

3,949

 

 

 —

 

 —

 

 

 —

 

 

3,949

 

 

 —

 

 

3,949

Other comprehensive loss attributable to Amphastar Pharmaceuticals, Inc.

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(774)

 

 —

 

 

 —

 

 

(774)

 

 

 —

 

 

(774)

Net loss attributable to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

(424)

 

 

(424)

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

(647,246)

 

 

(10,950)

 

 

(10,950)

 

 

 —

 

 

(10,950)

Issuance of treasury stock in connection with the Company's equity plans

 

 —

 

 

 —

 

 

(84)

 

 

 —

 

 

 —

 

6,873

 

 

84

 

 

 —

 

 

 —

 

 

 —

Issuance of common stock in connection with the Company's equity plans

 

369,508

 

 

 —

 

 

(1,238)

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

(1,238)

 

 

 —

 

 

(1,238)

Share-based compensation expense

 

 —

 

 

 —

 

 

5,161

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

5,161

 

 

121

 

 

5,282

Balance as of March 31, 2020

 

52,864,991

 

$

 5

 

$

371,144

 

$

120,319

 

$

(5,461)

 

(6,558,888)

 

$

(108,493)

 

$

377,514

 

$

45,859

 

$

423,373

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Accumulated

 

Treasury Stock

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

 

Amphastar

 

Non-

 

 

 

 

 

 

 

 

 

 

Paid-in

 

Retained

 

Comprehensive

 

 

 

 

 

 

Stockholders'

 

controlling

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

loss

 

Shares

 

Amount

 

Equity

 

Interest

 

Total

Balance as of December 31, 2018

 

51,438,675

 

$

 5

 

$

344,434

 

$

67,485

 

$

(4,013)

 

(4,807,557)

 

$

(75,476)

 

$

332,435

 

$

31,924

 

$

364,359

Beginning balance adjustment as a result of the adoption of new accounting standards

 

 —

 

 

 —

 

 

 —

 

 

(54)

 

 

 —

 

 —

 

 

 —

 

 

(54)

 

 

 —

 

 

(54)

Net income attributable to Amphastar Pharmaceuticals, Inc.

 

 —

 

 

 —

 

 

 —

 

 

868

 

 

 —

 

 —

 

 

 —

 

 

868

 

 

 —

 

 

868

Other comprehensive loss attributable to Amphastar Pharmaceuticals, Inc.

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(113)

 

 —

 

 

 —

 

 

(113)

 

 

 —

 

 

(113)

Proceeds from the private placement of ANP

 

 —

 

 

 —

 

 

2,588

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

2,588

 

 

16,378

 

 

18,966

Net loss attributable to non-controlling interest

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

(3,022)

 

 

(3,022)

Purchase of treasury stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

(145,479)

 

 

(3,015)

 

 

(3,015)

 

 

 —

 

 

(3,015)

Issuance of treasury stock in connection with the Company's equity plans

 

 —

 

 

 —

 

 

(98)

 

 

 —

 

 

 —

 

8,334

 

 

98

 

 

 —

 

 

 —

 

 

 —

Issuance of common stock in connection with the Company's equity plans

 

604,651

 

 

 —

 

 

(2,397)

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

(2,397)

 

 

 —

 

 

(2,397)

Share-based compensation expense

 

 —

 

 

 —

 

 

4,674

 

 

 —

 

 

 —

 

 —

 

 

 —

 

 

4,674

 

 

 —

 

 

4,674

Balance as of March 31, 2019

 

52,043,326

 

$

 5

 

$

349,201

 

$

68,299

 

$

(4,126)

 

(4,944,702)

 

$

(78,393)

 

$

334,986

 

$

45,280

 

$

380,266

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

-4-

Table of Contents

 

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

    

2020

    

2019

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

Net income (loss)

 

$

3,525

 

$

(2,154)

 

Reconciliation to net cash provided by operating activities:

 

 

 

 

 

 

 

Loss on impairment and disposal of assets

 

 

14

 

 

805

 

Depreciation of property, plant, and equipment

 

 

4,716

 

 

4,158

 

Amortization of product rights, trademarks, and patents

 

 

258

 

 

270

 

Operating lease right-of-use asset amortization

 

 

848

 

 

704

 

Share-based compensation expense

 

 

5,282

 

 

4,674

 

Changes in deferred taxes, net

 

 

1,638

 

 

 —

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(12,487)

 

 

(1,061)

 

Inventories

 

 

2,241

 

 

(9,507)

 

Prepaid expenses and other assets

 

 

1,494

 

 

(4,729)

 

Income tax refund, deposits, and payable

 

 

451

 

 

(1,713)

 

Operating lease liabilities

 

 

(824)

 

 

(614)

 

Accounts payable and accrued liabilities

 

 

(5,679)

 

 

5,557

 

Net cash provided by (used in) operating activities

 

 

1,477

 

 

(3,610)

 

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

Purchases and construction of property, plant, and equipment

 

 

(8,006)

 

 

(14,744)

 

Purchase of intangible assets

 

 

 —

 

 

(151)

 

Purchase of short-term investments

 

 

(510)

 

 

 —

 

Payment of deposits and other assets

 

 

(206)

 

 

11

 

Net cash used in investing activities

 

 

(8,722)

 

 

(14,884)

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

Proceeds from the private placement of ANP

 

 

 —

 

 

18,298

 

Proceeds from equity plans, net of withholding tax payments

 

 

(1,238)

 

 

(2,397)

 

Purchase of treasury stock

 

 

(10,950)

 

 

(3,015)

 

Proceeds from issuance of long-term debt

 

 

3,067

 

 

 —

 

Principal payments on long-term debt

 

 

(2,328)

 

 

(1,657)

 

Net cash (used in) provided by financing activities

 

 

(11,449)

 

 

11,229

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(146)

 

 

24

 

 

 

 

 

 

 

 

 

Net decrease in cash, cash equivalents, and restricted cash

 

 

(18,840)

 

 

(7,241)

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

75,550

 

 

88,202

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and restricted cash at end of period

 

$

56,710

 

$

80,961

 

 

 

 

 

 

 

 

 

Noncash Investing and Financing Activities:

 

 

 

 

 

 

 

Capital expenditure included in accounts payable

 

$

5,840

 

$

6,511

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

Interest paid, net of capitalized interest

 

$

559

 

$

898

 

Income taxes paid

 

$

209

 

$

234

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

 

-5-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1.  General

 

Amphastar Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, hereinafter referred to as the “Company”) is a specialty pharmaceutical company that develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable finished pharmaceutical products.  The Company’s inhalation product, Primatene® Mist is primarily distributed through drug retailers.

 

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019 and the notes thereto as filed with the Securities and Exchange Commission, or SEC, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles, or GAAP, have been condensed or omitted from the accompanying condensed consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from the audited financial statements. The accompanying interim financial statements are unaudited, but reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the Company’s consolidated financial position, results of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. The Company’s results of operations, comprehensive income (loss) and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods.

 

Note 2.  Summary of Significant Accounting Policies

 

Basis of Presentation

 

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and are prepared in accordance with United States generally accepted accounting principles, or GAAP. Certain prior period amounts have been reclassified within the operating activities of the statement of cash flows to conform to the current period presentation. All intercompany activity has been eliminated in the preparation of the condensed consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to present fairly the consolidated financial position, results of operations, and cash flows of the Company.

 

The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Nanjing Letop Biological Technology Co., Ltd., or Letop, (5) Nanjing Hanxin Pharmaceutical Technology Co., Ltd., or Hanxin, (6) Nanjing Baixin Trading Co., Ltd., or Baixin, (7) Amphastar France Pharmaceuticals, S.A.S., or AFP, (8) Amphastar UK Ltd., or AUK, and (9) International Medication Systems (UK) Limited, or IMS UK.

 

In July 2018, the Company’s Chinese subsidiary, ANP, completed a private placement of its common equity interest to accredited investors for aggregate gross proceeds of approximately $57 million, a portion of which was received in 2019. The Company has retained approximately 58% of the equity interest in ANP following the private placement and continues to consolidate the financial results of ANP with the Company’s results of operations. ANP’s net income after July 2, 2018, was attributed to the Company in accordance with the Company’s equity interest of approximately 58% in ANP.

 

-6-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

COVID-19 Pandemic

 

The Company is subject to risks and uncertainties as a result of the novel coronavirus pandemic, or COVID-19. The extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as the response to the pandemic is in its incipient stages and information is rapidly evolving. The Company considered the impact of COVID-19 on the assumptions and estimates used to determine the results reported and asset valuations as of March 31, 2020.

 

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the world, including locations where the Company operates, such as the United States, China and France. The Company has been actively monitoring the COVID-19 pandemic and its impact globally. In late January 2020, China implemented extensive curfews and travel restrictions to control the outbreak, and started easing these restrictions in March. Our business operations in China experienced a temporary disruption but resumed full operation in February 2020. In March 2020, France also implemented a stay-at-home order limiting movement and restricting travel, however, the Company was deemed to be an essential business and was not impacted by the restrictions. In March 2020, the Governors of the States of California and Massachusetts declared a health emergency and issued orders to close all nonessential businesses; as a specialty pharmaceutical company, the Company was deemed to be an essential business. Nonetheless, out of concern for the Company’s workers and pursuant to the government order in the United States certain workers began telecommuting from their homes. Except for the increased sales of Primatene® Mist and some hospital products, the financial results for the three months ended March 31, 2020, were not significantly impacted by the COVID-19 pandemic. Other than a temporary delay in re-opening the Company’s facility in China after the Lunar New Year celebration, the Company’s production facilities in all of its locations continued to operate in substantially the same manner during the quarter as they had prior to the COVID-19 pandemic with the adoption of enhanced safety measures intended to prevent the spread of the coronavirus. While the Company does not expect this matter to negatively impact its results of operations, cash flows and financial position in the near term, the related long term impact cannot be reasonably estimated at this time. The Company will continue to monitor the impact of COVID-19 on all aspects of its business.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include: determination of allowances for credit losses, allowance for discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to their net realizable values, impairment of long-lived and intangible assets and goodwill, self-insured claims, workers’ compensation liabilities, litigation reserves, stock price volatilities for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions.

 

Foreign Currency

 

The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary, ANP, and its U.K. subsidiary, AUK, is the USD. ANP maintains its books of record in Chinese yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s condensed consolidated statements of operations. 

 

The Company’s French subsidiary, AFP, maintains its book of record in euros. ANP’s other Chinese subsidiaries maintain their books of record in Chinese yuan. AUK’s subsidiary, IMS UK, maintains its book of record in British

-7-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. These books of record are translated into USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other accumulated comprehensive income (loss). The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income (loss). The unrealized losses of intercompany foreign currency transactions that are of a long-term investment nature for the three months ended March 31, 2020 and 2019 were $0.6 million and $0.7 million, respectively. 

 

Comprehensive Income (Loss)

 

For the three months ended March 31, 2020 and 2019, the Company included its foreign currency translation gain or loss as part of its comprehensive income (loss). There was no material income tax expense (benefit) allocated to other comprehensive income (loss) for the three months ended March 31, 2020 and 2019.

 

Advertising Costs

 

In connection with the launch of Primatene® Mist, in July 2019, the Company began to incur advertising costs. Advertising costs are expensed as incurred, except for costs related to the development of a major commercial or media campaign, which are expensed in the period in which the commercial or campaign is first presented, and is reflected as a component of selling, distribution and marketing in the Company’s condensed consolidated statement of operations. For the three months ended March 31, 2020, advertising cost was $1.0 million.

 

Financial Instruments

 

The carrying amounts of cash and cash equivalents, short-term investments, restricted cash and short-term investments, accounts receivable, accounts payable, accrued expenses, and short-term borrowings approximate fair value due to the short maturity of these items. The majority of the Company’s long-term obligations consist of variable rate debt, and their carrying value approximates fair value as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. The Company at times enters into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates without the exchange of the underlying notional debt amounts. Such interest rate swap contracts are recorded at their fair values.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments purchased with original maturities of three months or less.

 

Short-Term Investments

 

Short-term investments as of March 31, 2020 and December 31, 2019 consisted of certificates of deposit and investment grade corporate bonds with original expiration dates within 12 months.

 

Restricted Cash

 

Restricted cash is collateral required for the Company to guarantee certain vendor payments in France. As of March 31, 2020 and December 31, 2019, the restricted cash balance was $1.9 million.

 

 

-8-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Restricted Short-Term Investments

 

Restricted short-term investments consist of certificates of deposit that are collateral for standby letter of credit to qualify for workers’ compensation self-insurance. The certificates of deposit have original maturities greater than three months. As of March 31, 2020 and December 31, 2019, the balance of restricted short-term investments was $2.3 million.

 

Deferred Income Taxes

 

The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized.

 

Recent Accounting Pronouncements

 

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, No. 2016-13 Financial Instruments – Credit Losses, which is aimed at providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit. The standard update changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Available-for-sale debt securities with unrealized losses will be recorded through an allowance for credit losses. The ASU and the related clarifications subsequently issued by FASB are effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. This new guidance applies to the Company’s held-to-maturity investments and trade receivables. The adoption of this accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

In January 2017, the FASB issued ASU No. 2017-04 Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The update also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

In August 2018, the FASB issued ASU No. 2018-13 Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies, and adds certain disclosure requirements to Accounting Standard Codification, or ASC, 820, Fair Value Measurement. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

In August 2018, the FASB issued ASU No. 2018-14 Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans, which removes, modifies, and adds certain disclosure requirements to ASC 715-20, Defined Benefit Plans. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed

-9-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

consolidated financial statements and related disclosures.

 

In August 2018, the FASB issued ASU No. 2018-15 Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalized implementation cost incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The guidance also requires the entity to expense the capitalized implementation cost of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. This guidance is effective for the Company’s interim and annual reporting periods during the year ended December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

In October 2018, the FASB issued ASU No. 2018-17 Targeted Improvements to Related Party Guidance for Variable Interest Entities, which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

In November 2018, the FASB issued ASU No. 2018-18 Clarifying the Interaction between Topic 808 and Topic 606, which requires transactions in collaborative arrangements to be accounted for under ASC 606, Revenue from Contracts with Customers, or ASC 606, if the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. 

 

In December 2019, the FASB issued ASU No. 2019-12 Simplifying the Accounting for Income Taxes (Topic 740), which simplifies various aspects related to accounting for income taxes. The amendment also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The guidance is effective for the Company’s interim and annual reporting periods during the year ended December 31, 2021, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.

 

Note 3.  Revenue Recognition

 

In accordance with ASC 606, revenue is recognized at the time that the Company’s customers obtain control of the promised goods.

 

Generally, revenue is recognized at the time of product delivery to the Company’s customers. In some cases, revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements.

 

The consideration the Company receives in exchange for its goods or services is only recognized when it is probable that a significant reversal will not occur. The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration. The Company makes significant estimates for related variable consideration at the point of sale, including chargebacks, rebates, product returns, other discounts and allowances.

 

Provisions for estimated chargebacks, rebates, discounts, product returns and credit losses are made at the time of sale and are analyzed and adjusted, if necessary, at each balance sheet date.

 

-10-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Revenues derived from contract manufacturing services are recognized when third-party products are shipped to customers, and after the customer has accepted test samples of the products to be shipped.

 

The Company’s accounting policy is to review each agreement involving contract development and manufacturing services to determine if there are multiple revenue-generating activities that constitute more than one unit of accounting. Revenues are recognized for each unit of accounting based on revenue recognition criteria relevant to that unit. The Company does not have any revenue arrangements with multiple performance obligations.

 

Provision for Chargebacks and Rebates

 

The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue. Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell under the Company’s various contractual arrangements with third parties such as hospitals and group purchasing organizations in the United States. Rebates include primarily amounts paid to retailers, payers, and providers in the United States, including those paid to state Medicaid programs, and are based on contractual arrangements or statutory requirements. The Company estimates chargebacks and rebates using the expected value method at the time of sale to wholesalers based on wholesaler inventory stocking levels, historic chargeback and rebate rates, and current contract pricing.

 

The provision for chargebacks and rebates is reflected as a component of net revenues. The following table is an analysis of the chargeback and rebate provision:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2020

 

2019

 

 

 

(in thousands)

 

Beginning balance

    

$

21,644

    

$

22,423

 

Provision for chargebacks and rebates

 

 

35,987

 

 

26,982

 

Credits and payments issued to third parties

 

 

(39,353)

 

 

(28,861)

 

Ending balance

 

$

18,278

 

$

20,544

 

 

Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesalers’ customer mix. Changes in the rebate provision from period to period are primarily dependent on retailer’s and other indirect customers’ purchases. The approach that the Company uses to estimate chargebacks has been consistently applied for all periods presented. Variations in estimates have been historically small. The Company continually monitors the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates. The settlement of chargebacks and rebates generally occurs within 30 days to 60 days after the sale to wholesalers. Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer. Of the provision for chargebacks and rebates as of March 31, 2020 and December 31, 2019,  $13.4 million and $15.4 million were included in accounts receivable, net, on the condensed consolidated balance sheets, respectively. The remaining provision as of March 31, 2020 and December 31, 2019 of $4.9 million and $6.2 million,  respectively, were included in accounts payable and accrued liabilities.

 

Accrual for Product Returns

 

The Company offers most customers the right to return qualified excess or expired inventory for partial credit; however, API product sales are generally non-returnable. The Company’s product returns primarily consist of the returns of expired products from sales made in prior periods. Returned products cannot be resold. At the time product revenue is

-11-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

recognized, the Company records an accrual for product returns estimated using the expected value method. The accrual is based, in part, upon the historical relationship of product returns to sales and customer contract terms. The Company also assesses other factors that could affect product returns including market conditions, product obsolescence, and the introduction of new competition. Although these factors do not normally give the Company’s customers the right to return products outside of the regular return policy, the Company realizes that such factors could ultimately lead to increased returns. The Company analyzes these situations on a case-by-case basis and makes adjustments to the product return reserve as appropriate. 

 

The provision for product returns is reflected as a component of net revenues.  The following table is an analysis of the product return liability:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2020

 

2019

 

 

 

(in thousands)

 

Beginning balance

    

$

10,339

    

$

8,030

 

Provision for product returns

 

 

3,099

 

 

1,968

 

Credits issued to third parties

 

 

(2,239)

 

 

(1,275)

 

Ending balance

 

$

11,199

 

$

8,723

 

 

Of the provision of product returns as of March 31, 2020 and December 31, 2019, $7.3 million and $7.1 million, respectively, were included in accounts payable and accrued liabilities on the condensed consolidated balance sheets. The remaining provision as of March 31, 2020 and December 31, 2019 of $3.9 million and $3.2 million, respectively, were included in other long-term liabilities. For the three months ended March 31, 2020 and 2019,  the Company’s aggregate product return rate was 1.1% and 1.4% of qualified sales, respectively.

 

Note 4.  Income (Loss) per Share Attributable to Amphastar Pharmaceuticals, Inc. Shareholders

 

Basic net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders is calculated based upon the weighted-average number of shares outstanding during the period. Diluted net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders gives effect to all potential dilutive shares outstanding during the period, such as stock options, non-vested restricted stock units and shares issuable under the Company’s Employee Stock Purchase Plan, or ESPP and to reallocation of net income attributable to non-controlling interest from the assumed dilutive effect of stock options issued under the 2018 ANP Equity Incentive Plan, or the 2018 Plan.

 

For the three months ended March 31, 2020, options to purchase 1,999,083 shares of stock with a weighted-average exercise price of $20.81 per share, and the reallocation of net income attributable to non-controlling interests were excluded in the computation of diluted net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders because the effect would be anti-dilutive. 

 

For the three months ended March 31, 2019, the reallocation of net income attributable to non-controlling interest were excluded in the computation of diluted net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders because the effect would be anti-dilutive.

 

-12-

 

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

The following table provides the calculation of basic and diluted net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders for each of the periods presented:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,