Lannett Company Inc (LCI, Financial) filed Quarterly Report for the period ended 2009-12-31.
Lannett Company Inc has a market cap of $112.4 million; its shares were traded at around $4.52 with a P/E ratio of 14.1 and P/S ratio of 0.9.
On April 10, 2007, the Company entered into a Stock Purchase Agreement to acquire Cody by purchasing all of the remaining shares of common stock of Cody. The consideration for the April 10, 2007 acquisition was approximately $4,438,000, which represented the fair value of the tangible net assets acquired. The agreement also required Lannett to issue to the sellers up to 120,000 shares of unregistered common stock of the Company contingent upon the receipt of a license from a regulatory agency. This license was subsequently received in July 2008 and triggered the payment of 105,000 shares (87.5% of the 120,000 shares as the Company already owned 12.5%) of Lannett stock to the former owners of Cody Labs, which was completed in October 2008. Therefore, the Company recorded an intangible asset related to the acquisition of a drug import license in the original amount of $581,175 and recorded a corresponding deferred tax liability of approximately $150,700 due to the non-deductibility of the amortization for tax purposes. The Company has assigned a 15 year life to this intangible asset based on average life cycles of Lannett products.
For the six months ended December 31, 2009 and 2008, the Company incurred amortization expense of approximately $917,000 and $892,000, respectively. As of December 31, 2009 and June 30, 2009, accumulated amortization totaled approximately $8,541,000 and $7,624,000, respectively.
Advertising Costs - The Company charges advertising costs to operations as incurred. Advertising expense for the six months ended December 31, 2009 and 2008 was approximately $11,000 and $31,000, respectively.
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Lannett Company Inc has a market cap of $112.4 million; its shares were traded at around $4.52 with a P/E ratio of 14.1 and P/S ratio of 0.9.
Highlight of Business Operations:
The total reserve for chargebacks, rebates, returns and other adjustments increased from $13,734,540 at June 30, 2009 to $14,283,623 at December 31, 2009. As of December 31, 2009 approximately $10,058,000 of the original $10,545,000 return reserve recorded in Fiscal 2008 for Prenatal Multivitamin was applied to accounts receivable for customers who had returned the Prenatal Multivitamin product by that date, leaving a balance of approximately $487,000 of Multivitamin returns reserve on the consolidated balance sheet at December 31, 2009. The increase in reserves was due to an increase in the rebates reserve as a result of the timing of credits being processed by the customers and by the Company, and partially offset by a decrease in chargeback reserves due primarily to a decrease in inventory levels at wholesaler distribution centers.On April 10, 2007, the Company entered into a Stock Purchase Agreement to acquire Cody by purchasing all of the remaining shares of common stock of Cody. The consideration for the April 10, 2007 acquisition was approximately $4,438,000, which represented the fair value of the tangible net assets acquired. The agreement also required Lannett to issue to the sellers up to 120,000 shares of unregistered common stock of the Company contingent upon the receipt of a license from a regulatory agency. This license was subsequently received in July 2008 and triggered the payment of 105,000 shares (87.5% of the 120,000 shares as the Company already owned 12.5%) of Lannett stock to the former owners of Cody Labs, which was completed in October 2008. Therefore, the Company recorded an intangible asset related to the acquisition of a drug import license in the original amount of $581,175 and recorded a corresponding deferred tax liability of approximately $150,700 due to the non-deductibility of the amortization for tax purposes. The Company has assigned a 15 year life to this intangible asset based on average life cycles of Lannett products.
For the six months ended December 31, 2009 and 2008, the Company incurred amortization expense of approximately $917,000 and $892,000, respectively. As of December 31, 2009 and June 30, 2009, accumulated amortization totaled approximately $8,541,000 and $7,624,000, respectively.
Advertising Costs - The Company charges advertising costs to operations as incurred. Advertising expense for the six months ended December 31, 2009 and 2008 was approximately $11,000 and $31,000, respectively.
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