Business Wire | Aug 6, 2021 07:24AM EDT

ANI Pharmaceuticals Reports Second Quarter 2021 Results

Aug. 06, 2021

BAUDETTE, Minn.--(BUSINESS WIRE)--Aug. 06, 2021--ANI Pharmaceuticals, Inc. ("ANI" or the "Company") (NASDAQ: ANIP) today announced business highlights and financial results for the three and six months ended June 30, 2021.

Second Quarter and Recent Business Highlights

* The Company refiled its supplemental new drug application ("sNDA") for Cortrophin(r) Gel with the U.S. Food and Drug Administration ("FDA" or the "Agency") on June 29, 2021; goal date is October 29, 2021; * Acquisition of Novitium Pharma LLC ("Novitium"), a privately held, New Jersey-based high-growth pharmaceutical company, is on track to close in the second half of 2021, pending Federal Trade Commission ("FTC") clearance and customary closing conditions; and * Acquired new drug applications ("NDAs") from Sandoz Inc. for a portfolio of dermatology products.

Second Quarter 2021 Financial Highlights

* Net revenues were $48.6 million compared to $48.5 million in Q2 2020. * GAAP net loss was $14.1 million, and diluted GAAP loss per share was ($1.17). * Adjusted non-GAAP EBITDA was $13.1 million. * Adjusted non-GAAP diluted earnings per share was $0.67. * Cash and cash equivalents were $24.3 million, net accounts receivable was $92.6 million, and face value of debt was $205.7 million as of June 30, 2021.

"In the second quarter, we made meaningful progress executing on the four pillars of our growth strategy. Most notably, on June 29, we refiled our sNDA with the FDA for Cortrophin Gel. Since that time, we have engaged in productive communication with the Agency. In support of this important asset, we are continuing to strengthen our leadership team to drive our commercial strategy forward. This refiling is a significant milestone for the organization, and I am proud of what we have accomplished to date. If approved, Cortrophin has the potential to improve access for patients in need and transform ANI," said Nikhil Lalwani, President and CEO of ANI.

"We appreciate our stockholders' overwhelming support for the Novitium acquisition at our Annual Meeting of Stockholders. The transaction is on track to close later this year, and planning for maximizing the value of the combined assets for all stakeholders is well under way. We have also integrated the four dermatology products acquired from Sandoz, thus expanding our branded portfolio. It is an important and exciting time for ANI, and we look forward to providing updates as we move forward on our growth journey," concluded Lalwani.

Second Quarter 2021 Financial Results

Net Revenues Three Months Ended(in thousands) June 30,

2021 2020

Generic pharmaceutical products $ 34,199 $ 33,400

Branded pharmaceutical products 11,038 10,633

Contract manufacturing 2,322 2,900

Royalty and other income 1,066 1,537

Total net revenues $ 48,625 $ 48,470

Net revenues for generic pharmaceutical products were $34.2 million during the three months ended June 30, 2021, an increase of 2.4% compared to $33.4 million for the same period in 2020. From a product perspective, the net increase was due to increased sales of Fenofibrate, Potassium Citrate Extended Release, Vancomycin Oral Solution, and the second quarter 2021 launch of Nicardipine. These increases were somewhat tempered by declines in sales of Methazolamide, Miglustat, Penicillamine, and Mixed Amphetamine Salts.

Net revenues for branded pharmaceutical products were $11.0 million during the three months ended June 30, 2021, an increase of 3.8% compared to $10.6 million for the same period in 2020. The increase primarily reflects the launch of the products acquired in the Sandoz, Inc. acquisition in the second quarter of 2021 and increased sales of InnoPran XL. These increases were tempered by decreased revenues of Atacand and Arimidex.

Contract manufacturing revenues were $2.3 million during the three months ended June 30, 2021, a decrease of 19.9% compared to $2.9 million for the same period in 2020, due to a decreased volume of orders from contract manufacturing customers in the period.

Royalty and other revenues were $1.1 million during the three months ended June 30, 2021, a decrease of $0.4 million from $1.5 million for the same period in 2020, primarily due to decreases in product development revenues earned by ANI Canada and a the non-recurrence of royalty revenue related to Yescarta(r). These decreases were tempered by licensing revenues earned during the three months ended June 30, 2021.

Operating expenses increased by 7.4% to $64.2 million for the three months ended June 30, 2021, from $59.8 million in the prior year period.

Cost of sales, excluding depreciation and amortization, increased by $1.6 million to $22.3 million in the second quarter of 2021 from prior year period, primarily as a result of increased volumes in the current year period. The increase was tempered by a $1.2 million decrease related to a decrease in sales of products subject to profit sharing arrangements.

Research and development expenses decreased to $2.8 million in the second quarter of 2021 from $3.0 million in the second quarter of 2020, primarily due to the non-recurrence of $0.4 million of 2020 severance related expense associated with the restructuring of our internal Cortrophin development team.

Selling, general and administrative expenses decreased by $2.4 million in the second quarter of 2021 to $18.8 million compared to $21.2 million in the comparable quarter in 2020. The decrease primarily reflects the non-recurrence of $6.5 million of termination benefit expenses related to the 2020 departure of the Company's former President and CEO. The Company also incurred recruitment and related legal charges associated with the CEO search in the second quarter 2020. These decreases were offset by $1.7 million of transaction expenses related to the pending Novitium acquisition and $2.5 million in sales and marketing expenses related to Cortrophin pre-launch activities incurred during the three months ended June 30, 2021.

On August 3, 2021, the Company entered into a Settlement Agreement with Arbor Pharmaceuticals, LLC to resolve all claims related to a civil proceeding which was pending trial later this month. Under the terms of the agreement, ANI will pay Arbor $8.4 million and Arbor will dismiss all claims against ANI. Neither party admitted wrongdoing in reaching this settlement. The Company recorded an $8.4 million charge to the second quarter Statement of Operations and will pay the settlement from cash on the balance sheet.

Depreciation and amortization increased by 1.1% in the second quarter of 2021 to $11.3 million from $11.2 million in the comparable quarter in 2020, primarily due to the amortization of the NDAs acquired in April 2021 from Sandoz Inc., partially offset by assets that became fully amortized in 2020.

Net loss for the second quarter of 2021 was $14.1 million as compared to net loss of $12.3 million in the prior year period. Diluted loss per share for the three months ended June 30, 2021 was ($1.17), compared to diluted loss per share of ($1.03) in the prior year period.

Adjusted non-GAAP diluted earnings per share was $0.67 in the second quarter of 2021 compared to $0.69 in the second quarter of 2020.

For reconciliations of adjusted non-GAAP EBITDA and adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 3 and Table 4, respectively.

Liquidity

As of June 30, 2021, the Company had $24.2 million in unrestricted cash and cash equivalents plus $92.6 million in net accounts receivable. The Company had $205.7 million (face value) in outstanding debt as of June 30, 2021.

Conference Call

As previously announced, ANI Pharmaceuticals management will host its second quarter 2021 conference call as follows:

Date Friday, August 6, 2021Time 8:30 a.m. ETToll free (U.S.) (866) 342-8591 Webcast (live and www.anipharmaceuticals.com, under the "Investors"replay) section A replay of the conference call will be available within two hours of the call's completion and will remain accessible for one week by dialing 800-695-0974 and entering access code 5412658.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI's management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI's operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance.

Adjusted non-GAAP EBITDA is defined as net income, excluding tax expense or benefit, interest expense, (net), other expense, (net), depreciation, amortization, the excess of fair value over cost of acquired inventory, non-cash stock-based compensation expense, expense from acquired in-process research and development, Novitium transaction expenses, Cortrophin pre-launch charges, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI's results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Net Income

ANI's management considers adjusted non-GAAP net income to be an important financial indicator of ANI's operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired in-process research and development ("IPR&D") expense, Novitium transaction expenses, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI's results of operations. Management uses adjusted non-GAAP net income when analyzing Company performance.

Adjusted non-GAAP net income is defined as net income, plus the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation expense, Novitium transaction expenses, non-cash interest expense, depreciation and amortization expense, expense from acquired in-process research and development, Cortrophin pre-launch charges, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI's results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI's results. Adjusted non-GAAP net income should be considered in addition to, but not in lieu of, net income reported under GAAP. A reconciliation of adjusted non-GAAP net income to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Diluted Earnings per Share

ANI's management considers adjusted non-GAAP diluted earnings per share to be an important financial indicator of ANI's operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired IPR&D expense, Novitium transaction expenses, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI's results of operations. Management uses adjusted non-GAAP diluted earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted earnings per share is defined as adjusted non-GAAP net income, as defined above, divided by the diluted weighted average shares outstanding during the period. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI's results. Adjusted non-GAAP diluted earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure is provided below.

About ANI

ANI Pharmaceuticals, Inc. is an integrated specialty pharmaceutical company focused on delivering value to our customers by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals. We focus on niche and high barrier to entry opportunities including controlled substances, oncology products (anti-cancers), hormones and steroids, and complex formulations. For more information, please visit our website www.anipharmaceuticals.com.

Forward-Looking Statements

To the extent any statements made in this release relate to information that is not historical, these are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Company's corporate strategy, the pending acquisition of Novitium and anticipated benefits and results of such acquisition, future operations, products, financial position, operating results and prospects, including plans for growth, the Company's pipeline or potential markets therefor, plans for existing ANDAs, timing of approval of our sNDA for Cortrophin Gel and commercialization plans, and other statements that are not historical in nature, particularly those that utilize terminology such as "anticipates," "will," "expects," "plans," "potential," "future," "believes," "intends," "continue," other words of similar meaning, derivations of such words and the use of future dates.

Uncertainties and risks may cause the Company's actual results to be materially different than those expressed in or implied by such forward-looking statements. Uncertainties and risks include, but are not limited to, the risk that the Company may not be able to obtain the requisite FTC approval or satisfy other closing conditions to complete the Novitium acquisition or such approvals will be further delayed, risks the Company may face with respect to importing raw materials; the use of single source suppliers and the time it may take to validate and qualify another supplier, if necessary; increased competition and strategies employed by competitors; the ability to realize benefits anticipated from acquisitions; costs and regulatory requirements relating to contract manufacturing arrangements; delays or failure in obtaining product approvals from the U.S. Food and Drug Administration; general business and economic conditions, including the ongoing impact of the COVID-19 pandemic; market trends for our products; regulatory environment and changes; and regulatory and other approvals relating to product development and manufacturing.

More detailed information on these and additional factors that could affect the Company's actual results are described in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. All forward-looking statements in this news release speak only as of the date of this news release and are based on the Company's current beliefs, assumptions, and expectations. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Financial Tables Follow

ANI Pharmaceuticals, Inc. and SubsidiariesTable 1: US GAAP Statement of Operations(unaudited, in thousands, except per share amounts) Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Net Revenues $ 48,625 $ 48,470 $ 103,146 $ 98,244

Operating Expenses:

Cost of sales (excl. 22,314 20,695 42,299 42,499 depreciation andamortization)Research and development 2,805 3,035 5,773 9,379

Selling, general, and 18,820 21,213 36,407 34,896 administrativeDepreciation and 11,324 11,198 22,222 22,381 amortizationLegal settlement expense 8,400 - 8,400 -

Cortrophin pre-launch 515 3,636 553 8,238 charges Total Operating Expenses 64,178 59,777 115,654 117,393

Operating Loss (15,553 ) (11,307 ) (12,508 ) (19,149 )

Other Expense, NetInterest expense, net (2,531 ) (2,356 ) (4,985 ) (4,388 )

Other expense, net (67 ) (116 ) (582 ) (106 )

Loss Before Benefit for (18,151 ) (13,779 ) (18,075 ) (23,643 )Income Taxes Benefit for income taxes 4,045 1,443 4,055 4,296

Net Loss $ (14,106 ) $ (12,336 ) $ (14,020 ) $ (19,347 )

Loss Per ShareBasic Loss Per Share $ (1.17 ) $ (1.03 ) $ (1.16 ) $ (1.62 )

Diluted Loss Per Share $ (1.17 ) $ (1.03 ) $ (1.16 ) $ (1.62 )

Basic Weighted-Average 12,085 11,967 12,045 11,935 Shares OutstandingDiluted Weighted-Average 12,085 11,967 12,045 11,935 Shares OutstandingANI Pharmaceuticals, Inc. and SubsidiariesTable 2: US GAAP Balance Sheets(unaudited, in thousands)June 30,2021December 31,2020Current AssetsCash and cash equivalents$

24,261

$

7,864

Accounts receivable, net92,648

95,793

Inventories, net67,634

60,803

Prepaid income taxes2,375

-

Prepaid expenses and other current assets4,881

5,861

Total Current Assets191,799

170,321

Property and equipment60,336

58,797

Accumulated depreciation(20,002

)

(17,528

)

Property and equipment, net40,334

41,269

Restricted cash5,001

5,003

Deferred tax assets, net of deferred tax liabilities and valuation allowance58,526

51,704

Intangible assets, net180,199

188,511

Goodwill3,580

3,580

Other non-current assets720

802

Total Assets$

480,159

$

461,190

Current LiabilitiesCurrent debt, net of deferred financing costs$

15,182

$

13,243

Accounts payable12,977

11,261

Accrued expenses and other11,582

2,456

Accrued royalties4,688

6,407

Accrued compensation and related expenses4,319

6,231

Current income taxes payable, net-

3,906

Accrued government rebates8,740

7,826

Returned goods reserve31,904

27,155

Deferred revenue62

80

Total Current Liabilities89,454

78,565

Non-current debt, net of deferred financing costs and current component189,525

172,443

Derivatives and other non-current liabilities9,263

14,482

Total Liabilities288,242

265,490

Stockholders' EquityCommon stock1

1

Treasury stock(3,062

)

(2,246

)

Additional paid-in capital219,403

214,354

Accumulated deficit(18,992

)

(4,972

)

Accumulated other comprehensive loss, net of tax(5,433

)

(11,437

)

Total Stockholders' Equity191,917

195,700

Total Liabilities and Stockholders' Equity$

480,159

$

461,190

ANI Pharmaceuticals, Inc. and SubsidiariesTable 2: US GAAP Balance Sheets(unaudited, in thousands) June 30, December 2021 31, 2020Current Assets Cash and cash equivalents $ 24,261 $ 7,864

Accounts receivable, net 92,648 95,793

Inventories, net 67,634 60,803

Prepaid income taxes 2,375 -

Prepaid expenses and other current assets 4,881 5,861

Total Current Assets 191,799 170,321

Property and equipment 60,336 58,797

Accumulated depreciation (20,002 ) (17,528 )

Property and equipment, net 40,334 41,269

Restricted cash 5,001 5,003

Deferred tax assets, net of deferred tax liabilities 58,526 51,704 and valuation allowanceIntangible assets, net 180,199 188,511

Goodwill 3,580 3,580

Other non-current assets 720 802

Total Assets $ 480,159 $ 461,190

Current Liabilities Current debt, net of deferred financing costs $ 15,182 $ 13,243

Accounts payable 12,977 11,261

Accrued expenses and other 11,582 2,456

Accrued royalties 4,688 6,407

Accrued compensation and related expenses 4,319 6,231

Current income taxes payable, net - 3,906

Accrued government rebates 8,740 7,826

Returned goods reserve 31,904 27,155

Deferred revenue 62 80

Total Current Liabilities 89,454 78,565

Non-current debt, net of deferred financing costs 189,525 172,443 and current componentDerivatives and other non-current liabilities 9,263 14,482

Total Liabilities 288,242 265,490

Stockholders' Equity Common stock 1 1

Treasury stock (3,062 ) (2,246 )

Additional paid-in capital 219,403 214,354

Accumulated deficit (18,992 ) (4,972 )

Accumulated other comprehensive loss, net of tax (5,433 ) (11,437 )

Total Stockholders' Equity 191,917 195,700

Total Liabilities and Stockholders' Equity $ 480,159 $ 461,190

ANI Pharmaceuticals, Inc. and SubsidiariesTable 3: Adjusted non-GAAP EBITDA Calculation and US GAAP to Non-GAAP Reconciliation(unaudited, in thousands)Three Months Ended June 30,

2021

2020

Net Loss$

(14,106

)

$

(12,336

)

Add/(Subtract):Interest expense, net2,531

2,356

Other expense, net67

116

Benefit for income taxes(4,045

)

(1,443

)

Depreciation and amortization11,324

11,198

Legal settlement expense8,400

-

Cortrophin pre-launch charges and sales & marketing expenses2,902

3,636

Stock-based compensation(1)2,844

2,271

CEO transition items(2)-

7,145

Cortrophin team restructuring-

401

Asset impairments(3)-

40

Excess of fair value over cost of acquired inventory1,492

1,420

Charges related to market exits-

567

Novitium transaction expenses1,690

-

Adjusted non-GAAP EBITDA$

13,099

$

15,371

ANI Pharmaceuticals, Inc. and SubsidiariesTable 3: Adjusted non-GAAP EBITDA Calculation and US GAAP to Non-GAAPReconciliation(unaudited, in thousands) Three Months Ended June 30,

2021 2020

Net Loss $ (14,106 ) $ (12,336 )

Add/(Subtract): Interest expense, net 2,531 2,356

116 Other expense, net 67

Benefit for income taxes (4,045 ) (1,443 )

Depreciation and amortization 11,324 11,198

8,400 Legal settlement expense -

Cortrophin pre-launch charges and sales 2,902 3,636 & marketing expensesStock-based compensation^(1) 2,844 2,271

7,145 CEO transition items^(2) -

401 Cortrophin team restructuring -

40 Asset impairments^(3) -

Excess of fair value over cost of 1,492 1,420 acquired inventory 567 Charges related to market exits -

1,690 Novitium transaction expenses -

Adjusted non-GAAP EBITDA $ 13,099 $ 15,371

Reconciliation of certain adjusted non-GAAP accounts:Cost of sales (excl.depreciation andamortization)Selling, general, andadministrativeexpensesResearch anddevelopmentexpensesThree Months EndedJune 30,Three Months EndedJune 30,Three Months EndedJune 30,2021

2020

2021

2020

2021

2020

As reported:

$

22,314

$

20,695

$

18,820

$

21,213

$

2,805

$

3,035

Cortrophin pre-launch charges and sales & marketing expenses(2,387

)

Stock-based compensation(1)(6

)

(39

)

(2,683

)

(2,074

)

(155

)

(158

)

CEO transition items(2)(7,145

)

Cortrophin team restructuring(47

)

(354

)

Asset impairments(3)(40

)

Excess of fair value over cost of acquired inventory(1,492

)

(1,420

)

Charges related to market exits(267

)

(300

)

Novitium transaction expenses(1,690

)

As adjusted:

$

20,816

$

18,929

$

12,060

$

11,947

$

2,650

$

2,223

Reconciliation of certain adjusted non-GAAP accounts: Cost of sales (excl. Selling, general, and Research and depreciation and administrative development amortization) expenses expenses Three Months Ended Three Months Ended Three Months Ended June 30, June 30, June 30, 2021 2020 2021 2020 2021 2020

As reported: $ 22,314 $ 20,695 $ $ 21,213 $ $ 18,820 2,805 3,035

Cortrophinpre-launch charges and (2,387 ) sales &marketingexpensesStock-based ) ) ) ) ) )compensation^(1) (6 (39 (2,683 (2,074 (155 (158

CEO transition )items^(2) (7,145

Cortrophin team ) )restructuring (47 (354

Asset )impairments^(3) (40

Excess of fair value over cost (1,492 ) (1,420 ) of acquiredinventoryCharges related ) )to market exits (267 (300

Novitium )transaction (1,690 expensesAs adjusted: $ 20,816 $ 18,929 $ $ 11,947 $ $ 12,060 2,650 2,223

Six Months Ended June 30,

2021

2020

Net Loss$

(14,020

)

$

(19,347

)

Add/(Subtract):Interest expense, net4,985

4,388

Other expense, net582

106

Benefit for income taxes(4,055

)

(4,296

)

Depreciation and amortization22,222

22,381

Legal settlement expense8,400

-

Cortrophin pre-launch charges and sales & marketing expenses3,044

8,238

Stock-based compensation(1)4,713

4,695

CEO transition items(2)-

7,145

Cortrophin team restructuring-

401

Acquired IPR&D expense-

3,784

Asset impairments(3)-

792

Excess of fair value over cost of acquired inventory1,492

4,071

Charges related to market exits-

567

Novitium transaction expenses4,633

-

Adjusted non-GAAP EBITDA$

31,996

$

32,925

Six Months Ended June 30,

2021 2020

Net Loss $ (14,020 ) $ (19,347 )

Add/(Subtract): Interest expense, net 4,985 4,388

Other expense, net 582 106

Benefit for income taxes (4,055 ) (4,296 )

Depreciation and amortization 22,222 22,381

8,400 Legal settlement expense -

Cortrophin pre-launch charges and sales 3,044 8,238 & marketing expensesStock-based compensation^(1) 4,713 4,695

7,145 CEO transition items^(2) -

401 Cortrophin team restructuring -

3,784 Acquired IPR&D expense -

792 Asset impairments^(3) -

Excess of fair value over cost of 1,492 4,071 acquired inventory 567 Charges related to market exits -

4,633 Novitium transaction expenses -

Adjusted non-GAAP EBITDA $ 31,996 $ 32,925

Reconciliation of certain adjusted non-GAAP accounts:

Cost of sales (excl. depreciation and amortization)

Selling, general, and administrative expenses

Research and development expenses

Six Months Ended June 30,

Six Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

2021

2020

As reported:

$

42,299

$

42,499

$

36,407

$

34,896

$

5,773

$

9,379

Cortrophin pre-launch charges and sales & marketing expenses(2,490

)

Stock-based compensation(1)(10

)

(69

)

(4,429

)

(4,273

)

(274

)

(353

)

CEO transition items(2)(7,145

)

Cortrophin team restructuring(47

)

(354

)

Acquired IPR&D expense(3,784

)

Asset impairments(3)(740

)

(52

)

Excess of fair value over cost of acquired inventory(1,492

)

(4,071

)

Charges related to market exits(267

)

(300

)

Novitium transaction expenses(4,633

)

As adjusted:

$

40,797

$

37,352

$

24,855

$

23,379

$

5,499

$

4,588

Reconciliation of certain adjusted non-GAAP accounts:

Cost of sales (excl. Selling, general, and Research and depreciation and administrative development amortization) expenses expenses



Six Months Ended Six Months Ended Six Months Ended June 30, June 30, June 30,

2021 2020 2021 2020 2021 2020

As reported: $ 42,299 $ 42,499 $ 36,407 $ 34,896 $ 5,773 $ 9,379



Cortrophinpre-launchcharges and (2,490 ) sales &marketingexpensesStock-based (10 ) (69 ) (4,429 ) (4,273 ) (274 ) (353 )compensation^ (1)CEO (7,145 ) transition items^(2)Cortrophin (47 ) (354 )team restructuringAcquired IPR& (3,784 )D expenseAsset (740 ) (52 ) impairments^ (3)Excess offair value (1,492 ) (4,071 ) over cost of acquiredinventoryCharges (267 ) (300 )related to market exitsNovitium (4,633 ) transaction expensesAs adjusted: $ 40,797 $ 37,352 $ 24,855 $ 23,379 $ 5,499 $ 4,588

(1) For the three and six months ended June 30, 2020, Stock-based compensation excludes $3.4 million of stock-based compensation expense associated with the departure of a former President and CEO. This amount is included in this table as part of CEO transition items.

(2) For the three and six months ended June 30, 2020, CEO transition items is comprised of $3.4 million of stock compensation expense and $3.1 million of expense for salary continuation, bonus and other fringe benefits associated with the departure of a former President and CEO, as well as certain legal and recruiting costs related to the search for a permanent replacement.(3) For the three months ended June 30, 2020, Asset impairments is comprised of a finished goods inventory reserve for Bretylium. For the six months ended June 30, 2020, it is comprised of finished goods inventory reserves for Bretylium and an accounts receivable reserve due to customer bankruptcy, tempered by a modest recovery of previously reserved inventory related to market exits.^(1) For the three and six months ended June 30, 2020, Stock-basedcompensation excludes $3.4 million of stock-based compensation expenseassociated with the departure of a former President and CEO. This amount isincluded in this table as part of CEO transition items.

^(2) For the three and six months ended June 30, 2020, CEO transition itemsis comprised of $3.4 million of stock compensation expense and $3.1 millionof expense for salary continuation, bonus and other fringe benefitsassociated with the departure of a former President and CEO, as well ascertain legal and recruiting costs related to the search for a permanentreplacement.^(3) For the three months ended June 30, 2020, Asset impairments is comprisedof a finished goods inventory reserve for Bretylium. For the six months endedJune 30, 2020, it is comprised of finished goods inventory reserves forBretylium and an accounts receivable reserve due to customer bankruptcy,tempered by a modest recovery of previously reserved inventory related tomarket exits.ANI Pharmaceuticals, Inc. and SubsidiariesTable 4: Adjusted non-GAAP Net Income and Adjusted non-GAAP Diluted Earnings per Share Reconciliation(unaudited, in thousands, except per share amounts)Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net Loss$

(14,106

)

$

(12,336

)

$

(14,020

)

$

(19,347

)

Add/(Subtract):Non-cash interest expense539

500

1,085

657

Depreciation and amortization expense11,324

11,198

22,222

22,381

Cortrophin pre-launch charges and sales & marketing expenses2,902

3,636

3,044

8,238

Legal settlement expense8,400

-

8,400

-

Acquired IPR&D expense-

-

-

3,784

Stock-based compensation(1)2,844

2,271

4,713

4,695

CEO transition items(2)-

7,145

-

7,145

Cortrophin team restructuring-

401

-

401

Asset impairments(3)-

40

-

792

Excess of fair value over cost of acquired inventory1,492

1,420

1,492

4,071

Charges related to market exits-

567

-

567

Novitium transaction expenses1,690

-

4,633

-

Less:Estimated tax impact of adjustments (calc. at 24%)(7,006

)

(6,523

)

(10,941

)

(12,655

)

Adjusted non-GAAP Net Income$

8,080

$

8,319

$

20,627

$

20,729

Diluted Weighted-AverageShares Outstanding12,085

11,967

12,045

11,935

Adjusted Diluted Weighted-AverageShares Outstanding12,100

11,982

12,059

11,964

Adjusted non-GAAPDiluted Earnings per Share$

0.67

$

0.69

$

1.71

$

1.73

ANI Pharmaceuticals, Inc. and SubsidiariesTable 4: Adjusted non-GAAP Net Income and Adjusted non-GAAP Diluted Earningsper Share Reconciliation(unaudited, in thousands, except per share amounts) Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Net Loss $ (14,106 ) $ (12,336 ) $ (14,020 ) $ (19,347 )

Add/(Subtract):Non-cash interest 539 500 1,085 657 expenseDepreciation and 11,324 11,198 22,222 22,381 amortization expenseCortrophin pre-launch 2,902 3,636 3,044 8,238 charges and sales &marketing expensesLegal settlement expense 8,400 - 8,400 -

Acquired IPR&D expense - - - 3,784

Stock-based compensation 2,844 2,271 4,713 4,695 ^(1)CEO transition items^(2) - 7,145 - 7,145

Cortrophin team - 401 - 401 restructuringAsset impairments^(3) - 40 - 792

Excess of fair value 1,492 1,420 1,492 4,071 over cost of acquiredinventoryCharges related to - 567 - 567 market exitsNovitium transaction 1,690 - 4,633 - expensesLess:Estimated tax impact of (7,006 ) (6,523 ) (10,941 ) (12,655 )adjustments (calc. at24%) Adjusted non-GAAP Net $ 8,080 $ 8,319 $ 20,627 $ 20,729 Income Diluted Weighted-AverageShares Outstanding 12,085 11,967 12,045 11,935

Adjusted DilutedWeighted-AverageShares Outstanding 12,100 11,982 12,059 11,964

Adjusted non-GAAPDiluted Earnings per $ 0.67 $ 0.69 $ 1.71 $ 1.73 Share(1) For the three and six months ended June 30, 2020, Stock-based compensation excludes $3.4 million of stock-based compensation expense associated with the departure of a former President and CEO. This amount is included in this table as part of CEO transition items.(2) For the three and six months ended June 30, 2020, CEO transition items is comprised of $3.4 million of stock compensation expense and $3.1 million of expense for salary continuation, bonus and other fringe benefits associated with the departure of a former President and CEO, as well as certain legal and recruiting costs related to the search for a permanent replacement.(3) For the three months ended June 30, 2020, Asset impairments is comprised of a finished goods inventory reserve for Bretylium. For the six months ended June 30, 2020, it is comprised of finished goods inventory reserves for Bretylium and an accounts receivable reserve due to customer bankruptcy, tempered by a modest recovery of previously reserved inventory related to market exits. View source version on businesswire.com: https://www.businesswire.com/news/home/20210806005255/en/

CONTACT: Investor Relations: Lisa M. Wilson, In-Site Communications, Inc. T: 212-452-2793 E: lwilson@insitecony.com