8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Date of Report (Date of earliest event reported): November 8, 2006

LANNETT COMPANY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Commission File No. 001-31298

State of Delaware
(State of Incorporation) 23-0787699
(I.R.S. Employer I.D. No.)

9000 State Road
Philadelphia, PA 19136
(215) 333-9000
(Address of principal executive offices and telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 8, 2006, the Company announced its results of operations for the fiscal 2007 first quarter ended September 30, 2006, as set forth in the press release, a copy of which is included as Exhibit 99.1 hereto. This information shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date of this report, regardless of any general incorporation language in the filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits
99.1 November 8, 2006 financial press release

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

LANNETT COMPANY, INC
By:	/s/ Brian Kearns
	Vice President of Finance, Treasurer, and Chief Financial Officer

Date: November 28, 2006

EXHIBIT INDEX

Exhibit:		Description:
	99.1	November 8, 2006 Press Release

EX-99.1

Exhibit 99.1

Contacts: Robert Jaffe/Evan Pondel
PondelWilkinson Inc.
(310) 279-5980

LANNETT REPORTS FISCAL 2007 FIRST QUARTER FINANCIAL RESULTS

Philadelphia, PA — November 8, 2006 — Lannett Company, Inc. (AMEX: LCI) today reported financial results for the fiscal 2007 first quarter ended September 30, 2006.

For the first quarter of fiscal 2007, net sales rose 62% to $22.0 million from $13.6 million for the fiscal 2006 first quarter. The increase in net sales primarily consisted of higher sales of distributed products, which generally carry lower gross margins. Net income was $1.5 million, or $0.06 earnings per basic and diluted share, which included equity-based compensation expense of $0.2 million, net of tax benefit, or $0.01 per basic and diluted share. This compares with net income of $1.6 million, or $0.07 earnings per basic and diluted share, for the same period in fiscal 2006. Equity-based compensation expense was adopted at the beginning of fiscal year 2006 in accordance with the Statement of Financial Accounting Standards No. 123R.

“While our industry struggles to deal with competitive pressures on sales and margins, we are pleased with the solid top line growth during the first quarter of this year,” “During the quarter, we continued to invest in the company’s future by expanding our drug development program. The leasing of the new facility will help bolster our manufacturing, pharmaceutical development, distribution and warehousing capacities.” said Arthur Bedrosian, Lannett’s president and chief executive officer.

For the first quarter of fiscal 2007, gross profit rose to $9.1 million from $6.8 million in the first quarter of fiscal 2006. Research and development expenses increased to $1.8 million from $1.1 million for the same period in 2006. Selling, general and administrative expenses were $4.4 million, which included a $1.3 million royalty expense related to the sale of distributed products and $0.3 million of equity-based compensation expense, compared with $2.6 million in the first quarter of fiscal 2006. Amortization expense was $446,000 for both periods.

Lannett currently has 13 ANDAs pending at the FDA and 34 products in various stages of development.

About Lannett Company:

Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of indications. For more information, visit the company’s website at www.lannett.com.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, the new facility bolstering capacity, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, Lannett’s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company’s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company’s judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.

# # #

FINANCIAL TABLES FOLLOW

	For the Three Months Ended
	(UNAUDITED)
	September 30,		September 30,
	2006		2005
Net sales	$	21,967,826	$	13,641,532
Cost of sales		12,846,394		6,862,785
Gross profit		9,121,432		6,778,747
Research and development expenses		1,778,427		1,141,101
Selling, general and administrative expenses		4,382,500		2,577,135
Amortization expense		446,166		446,166
Operating income		2,514,339		2,614,345
Other income		34,582		40,046
Income before taxes		2,548,921		2,654,391
Income tax expense		1,021,047		1,053,415
Net income	$	1,527,874	$	1,600,976
Earnings per share:
Basic	$	0.06	$	0.07
Diluted	$	0.06	$	0.07
Shares used to calculate earnings per share:
Basic		24,147,941		24,110,790
Diluted		24,170,735		24,117,149

LANNETT COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

	(unaudited)
	September 30,		June 30,
	2006		2006
Assets:
Current Assets:
Cash	$	555,245	$	468,359
Trade accounts receivable, net		28,549,837		24,921,671
Inventories		10,940,816		11,476,503
Prepaid taxes		2,195,782		3,212,511
Other current assets		1,767,964		1,946,631
Deferred tax asset		1,461,172		1,461,172
Total current assets		45,470,816		43,486,847
Property and equipment, net		19,083,327		19,645,549
Investment securities-available-for-sale		4,599,066		5,621,609
Note Receivable		5,940,338		3,182,498
Deferred tax asset		17,029,341		18,070,674
Intangible asset, net		13,385,002		13,831,168
Construction in progress		2,254,855		1,955,508
Other assets		249,663		198,211
Total Assets	$	108,012,408	$	105,992,064
Liabilities and Shareholders’ Equity:
Current liabilities	$	20,958,615	$	20,624,428
Long-term debt, less current portion		6,904,215		7,065,986
Deferred income taxes and other liabilities		2,545,734		2,545,734
Shareholders’ equity		77,603,844		75,755,916
Total Liabilities and Shareholders’ Equity	$	108,012,408	$	105,992,064