Louisiana
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001-32360
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72-0717400
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(State or other
Jurisdiction of
Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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Exhibit No.
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Description of Exhibit .
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99.1
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Unaudited pro forma condensed consolidated financial statements of Akorn, Inc.
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Akorn, Inc. | |||
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By:
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/s/ Timothy A. Dick | |
Timothy A. Dick
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Chief Financial Officer | |||
AKORN, INC.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
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(IN THOUSANDS, EXCEPT SHARE DATA)
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DECEMBER 31, 2010 | ||||||||||||||
As
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Pro Forma
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|||||||||||||
Reported
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Adjustments
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Notes
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Pro Forma
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 41,623 | $ | - | $ | 41,623 | ||||||||
Trade accounts receivable, net
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11,270 | - | 11,270 | |||||||||||
Inventories
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18,917 | (1,136 | ) |
(a)
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17,781 | |||||||||
Prepaid expenses and other current assets
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1,803 | - | 1,803 | |||||||||||
TOTAL CURRENT ASSETS
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73,613 | (1,136 | ) | 72,477 | ||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET
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32,731 | - | 32,731 | |||||||||||
OTHER LONG-TERM ASSETS:
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Intangibles, net
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3,122 | - | 3,122 | |||||||||||
Deferred financing costs
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1,545 | - | 1,545 | |||||||||||
Other Assets
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105 | 3,203 |
(b)
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3,308 | ||||||||||
TOTAL OTHER LONG-TERM ASSETS
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4,772 | 3,203 | 7,975 | |||||||||||
TOTAL ASSETS
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$ | 111,116 | $ | 2,067 | $ | 113,183 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Trade accounts payable
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$ | 4,894 | $ | - | $ | 4,894 | ||||||||
Accrued compensation
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3,396 | - | 3,396 | |||||||||||
Accrued expenses and other liabilities
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3,473 | - | 3,473 | |||||||||||
Advance from unconsolidated joint venture
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10,177 | (10,177 | ) |
(b)
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- | |||||||||
TOTAL CURRENT LIABILITIES
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21,940 | (10,177 | ) | 11,763 | ||||||||||
LONG-TERM LIABILITIES:
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Lease incentive obligations
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1,125 | - | 1,125 | |||||||||||
Product warranty liability
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1,299 | - | 1,299 | |||||||||||
TOTAL LONG-TERM LIABILITIES
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2,424 | - | 2,424 | |||||||||||
TOTAL LIABILITIES
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24,364 | (10,177 | ) | 14,187 | ||||||||||
SHAREHOLDERS' EQUITY:
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Common stock, no par value -- 150,000,000 shares
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authorized, 93,975,334 shares outstanding
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182,466 | - | 182,466 | |||||||||||
Warrants to acquire common stock
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19,673 | - | 19,673 | |||||||||||
Accumulated deficit
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(115,387 | ) | 12,244 |
(c)
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(103,143 | ) | ||||||||
TOTAL SHAREHOLDERS' EQUITY
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86,752 | 12,244 | 98,996 | |||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
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$ | 111,116 | $ | 2,067 | $ | 113,183 |
AKORN, INC.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
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2010
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Pro Forma
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2010
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As Reported
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Adjustments
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Notes
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Pro Forma
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Revenues
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$ | 86,409 | $ | (3,050 | ) |
(d)
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$ | 83,359 | ||||||
Cost of sales
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43,944 | (1,519 | ) |
(e)
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42,425 | |||||||||
GROSS PROFIT
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42,465 | (1,531 | ) | 40,934 | ||||||||||
Selling, general and administrative expenses
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22,721 | - | 22,721 | |||||||||||
Research and development expenses
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6,975 | - | 6,975 | |||||||||||
Amortization of intangibles
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1,497 | - | 1,497 | |||||||||||
TOTAL OPERATING EXPENSES
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31,193 | - | 31,193 | |||||||||||
OPERATING INCOME
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11,272 | (1,531 | ) | 9,741 | ||||||||||
Write-off and amortization of deferred financing costs
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(2,841 | ) | - | (2,841 | ) | |||||||||
Interest expense, net
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(942 | ) | - | (942 | ) | |||||||||
Equity in earnings of unconsolidated joint venture
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23,368 | (23,368 | ) |
(f)
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- | |||||||||
Change in fair value of warrants liability
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(8,881 | ) | - | (8,881 | ) | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES
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21,976 | (24,899 | ) | (2,923 | ) | |||||||||
Income tax provision
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152 | (123 | ) |
(g)
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29 | |||||||||
NET INCOME (LOSS)
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$ | 21,824 | $ | (24,776 | ) | $ | (2,952 | ) | ||||||
NET INCOME (LOSS) PER SHARE:
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BASIC
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$ | 0.24 | $ | (0.27 | ) | $ | (0.03 | ) | ||||||
DILUTED
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$ | 0.22 | $ | (0.27 | ) | $ | (0.03 | ) | ||||||
SHARES USED IN COMPUTING NET INCOME (LOSS)
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PER SHARE:
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BASIC
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92,801 | 92,801 | 92,801 | |||||||||||
DILUTED
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99,250 | 92,801 | 92,801 |
1.
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BASIS OF PRESENTATION
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2.
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NOTES TO UNAUDITED PRO FORMA ADJUSTMENT
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(a)
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The pro forma adjustment to inventory removes all raw materials, work in process and finished goods that was on our balance sheet as of December 31, 2010 related to the product that we manufactured on a contract basis for the JV Company.
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(b)
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The $10,177,000 balance in Advance from Unconsolidated Joint Venture as of December 31, 2010 represents the net difference between the $13,380,000 unearned portion of our gain from the JV Company Sale Transaction and the $3,203,000 carrying value of our Investment in Unconsolidated Joint Venture on that date. The pro forma adjustment assumes that the unearned portion of the gain had been earned and our Investment in Unconsolidated Joint Venture had been reclassified to Other Assets as of December 31, 2010.
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(c)
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The adjustment to Accumulated Deficit reflects settlement of the unearned gain from the Sale Transaction, net of the elimination of our Inventory of JV Company products and components.
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(d)
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Revenue has been adjusted to eliminate the revenue we earned from (1) marketing the JV Company’s products, and (2) manufacturing and selling one product to the JV Company on a contract basis.
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(e)
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Cost of Sales has been adjusted to eliminate the standard costs associated with the product we contract manufactured and sold to the JV Company, partially offset by the estimated positive impact to plant variance that resulted from our manufacture of this product
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(f)
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Equity in Earnings of Unconsolidated Joint Venture of $23,368,000 has been eliminated. This amount consisted of $21,563,000 of income recognized in connection with the Sale Transaction and $1,805,000 of income from our 50% portion of the JV Company’s net income in 2010.
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(g)
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Income Tax Provision has been pro forma adjusted by multiplying the estimated pre-tax income contribution of the JV Company by our estimated marginal tax rate. The estimated effective tax rate was calculated by dividing our Income Tax Provision by our Pre-Tax Income less the Change in Fair Value of Warrants Liability, since that change in value is a significant permanent non-deductible expense for tax purposes.
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