Impax Labs (IPXL) reported earnings on Wed 11/9/16 (b/o)

** charts before earnings **

 

** charts after earnings **

 

Impax Labs misses by $0.02, misses on revs; guides FY16 EPS below consensus, revs below consensus :

• Reports Q3 (Sep) earnings of $0.37 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $0.39; revenues rose 3.1% year/year to $227.9 mln vs the $234.68 mln Capital IQ Consensus.
  • Upon closing the Teva Transaction on August 3, 2016, the Company initiated the process of transferring and securing Teva's and Allergan's customers for the acquired products to its account. The Company assumed certain price concessions would occur following the closing, however, the Company elected to take additional price reductions on certain of the acquired products in order to retain key customers. These reductions produced significantly lower than expected operating cash flows from the acquired product lines and triggered an impairment analysis. The Company's impairment analysis resulted in the recognition of a total $251.0 million non-cash impairment charge to earnings on the Company's consolidated statement of operations for the third quarter of 2016.
• Co issues downside guidance for FY16, sees EPS of $1.10-1.20 (Prior $1.57-1.70), excluding non-recurring items, vs. $1.59 Capital IQ Consensus Estimate; sees FY16 revs of $840-855 mln (Prior $900-940 mln) vs. $913.17 mln Capital IQ Consensus Estimate.
  • Adjusted gross margins as a percent of total revenue are expected to be 48% to 50% (previously low 50% range)