Depomed, Inc. (DEPO) saw its loss widen to $12.89 million, or $0.21 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $11.78 million, or $0.20 a share. On the other hand, adjusted net income for the quarter stood at $20.93 million, or $0.28 a share compared with $24.89 million or $0.33 a share, a year ago.
Revenue during the quarter grew 5.41 percent to $110.52 million from $104.86 million in the previous year period. Gross margin for the quarter expanded 163 basis points over the previous year period to 81.68 percent. Total expenses were 98.86 percent of quarterly revenues, up from 96.91 percent for the same period last year. That has resulted in a contraction of 195 basis points in operating margin to 1.14 percent.
Operating income for the quarter was $1.26 million, compared with $3.24 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $35.36 million compared with $38.16 million in the prior year period. At the same time, adjusted EBITDA margin contracted 440 basis points in the quarter to 32 percent from 36.39 percent in the last year period.
"Although our third quarter revenues increased by 5% over the previous year's quarter, they did not meet our expectations, as several factors, including a disconnect between prescription demand and wholesaler shipments, influenced net sales of the NUCYNTA franchise and Gralise. Prescriptions for NUCYNTA ER grew 4% over the second quarter, while shipments to wholesalers were down 1%. Prescriptions for NUCYNTA and Gralise were equal to the second quarter, however, shipments were down 6% and 12%, respectively," said Jim Schoeneck, president and chief executive officer of Depomed. "In addition, we made adjustments to our reserve accounts, including managed care and PBM rebate submissions from prior quarters, which impacted our product net sales."
For financial year 2016, Depomed, Inc. forecasts revenue to be in the range of $455 million to $465 million. The Company projects net loss to be in the range of $43 million to $49 million and expects adjusted net income to be in the range of $79 million to $85 million.
Debt comes down
Depomed, Inc. has recorded a decline in total debt over the last one year. It stood at $714.19 million as on Sep. 30, 2016, down 11.02 percent or $88.42 million from $802.61 million on Sep. 30, 2015. Depomed, Inc. has recorded a decline in long-term debt over the last one year. It stood at $714.19 million as on Sep. 30, 2016, down 11.02 percent or $88.42 million from $802.61 million on Sep. 30, 2015. Total debt was 57.15 percent of total assets as on Sep. 30, 2016, compared with 58.90 percent on Sep. 30, 2015. Debt to equity ratio was at 2.46 as on Sep. 30, 2016, up from 2.35 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 0.06 for the quarter from 0.14 for the same period last year.
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