Cumberland Pharmaceuticals Reports 17% Revenue Growth For Th

|Mar 18|magazine62 min read

NASHVILLE, Tenn., March 18, 2020 /PRNewswire/ --  Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company focused on hospital acute care and gastroenterology, today announced fourth quarter and full year 2019 financial results. Net Revenues for the fourth quarter were $13.7 million, and for the full year 2019, Net Revenues totaled $47.5 million, a 17% increase over the prior year.

As of December 31, 2019, the total assets of the Company grew to $104.5 million, including $28.2 million in cash and investments. Total Liabilities were $53.5 million, and Total Shareholder's Equity was $51.1 million. Cumberland also has available $44.1 million in tax net operating loss carryforwards, resulting from the prior exercise of stock options.

Fourth Quarter and Annual Highlights:

  • Received FDA approval for RediTrex line of injectable methotrexate products
  • Completed initial launch of Caldolor Next Generation product
  • Completed strategic review of brands, capabilities, and international partners
  • Initiated clinical program to study ifetroban in patients with Duchenne Muscular Dystrophy
  • Completed clinical study of Caldolor in children from birth to six months of age

"During 2019, we made significant progress in advancing our major initiatives and accomplishing many key objectives," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "We are working hard to build a specialty pharma business that delivers sustained growth and profitable operations." He continued, "And I'd like to thank our team for all their fine efforts and valuable contributions."

At the beginning of 2019, Cumberland commenced a strategic review of its brands, capabilities, and international partners. This review followed an accelerated business development initiative, which resulted in a series of transactions. Because of that progress, the Company felt that it was prudent to take a fresh look at its product portfolio, partners, and organization to ensure proper focus and capabilities.

As a result of the strategic review:

Cumberland executed a License and Distribution agreement with Hong Kong WinHealth Pharma Group Co. Limited ("WinHealth") for Caldolor and Acetadote in China and Hong Kong. Cumberland also entered into a Strategic Alliance agreement with WinHealth to explore future business opportunities that will further the mission and goals of each organization.

The Company also completed an agreement with Hikma Pharmaceuticals LLC to register and distribute Vibativ in the Middle East, finalized arrangements with R-Pharma JSC for ongoing distribution of Vibativ in Russia and Eastern Europe, and completed an agreement with Dr. Reddy's Laboratories Limited for the registration and distribution of Vibativ in India.

Cumberland concluded its agreement with Clinigen Group plc ("Clinigen") for the distribution and support for Ethyol® and Totect®. As a result, Cumberland will no longer be involved with the distribution, marketing, and promotion of Ethyol and Totect in the United Stated. At the end of 2019, the Company transitioned the responsibilities of both products back to Clinigen. Cumberland will receive $5 million in financial consideration paid over the two years following the transition date of December 31, 2019.

Cumberland's newest marketed brand, Vibativ (telavancin), was the subject of two favorable clinical publications during 2019. One study showed numerically superior cure rates of telavancin compared to vancomycin within a subset of patients who had hospital-acquired pneumonia. Another study detailed the positive clinical outcomes that resulted from treating multiple infection types with Vibativ, including complicated skin and skin structure infections, bone and joint infections, bacteremia and endocarditis, and lower respiratory tract infections.

Meanwhile, Cumberland continued to advance its clinical programs in 2019. Near the end of 2019, Cumberland was awarded $1 million in grant funding from the FDA to support a Phase II clinical program to study ifetroban for the treatment of cardiomyopathy associated with Duchenne Muscular Dystrophy ("DMD"). DMD is a rare, fatal, genetic neuromuscular disease and is characterized by the progressive loss of muscle which results in deterioration of the skeletal, heart and lung muscles.

Early in 2019, Cumberland received FDA approval for its next generation of Caldolor, featuring an improved formulation in a ready-to-use presentation. The Company then commenced an initial launch focused on a select group of key hospitals across the United States. During the third and fourth quarters of 2019, there was a growing demand for the new product from the select accounts, and Cumberland began planning for a full-scale national launch in early 2020.

Cumberland also completed its study of Caldolor in patients ranging from newborn to six months of age.  Topline results from this study show no safety concerns and similar blood levels to that of older children. Cumberland is now finalizing the study report for submission to the FDA and will pursue label expansion based on this information.

Near the end of 2019, Cumberland received FDA approval for RediTrex, its new line of injectable products designed for treating patients with arthritis and psoriasis. The Company now is actively preparing for the national launch of RediTrex in 2020.

FINANCIAL RESULTS:

Net Revenue:  For the three months ended December 31, 2019, net revenues were $13.7 million, up 1% from $13.5 million for the prior year period. Net revenue by product for the three months ended December 31, 2019, included $4.4 million for Ethyol®, $3.2 million for Kristalose®, $2.5 million for Vibativ®, $1.7 million for Caldolor®, and $1.2 million for Acetadote®, which included the Company's Brand and Authorized Generic products.

For the year ended December 31, 2019, net revenues were $47.5 million, a 17% increase compared to $40.7 million for the year ended December 31, 2018.

Operating Expenses:  Total operating expenses for the three months ended December 31, 2019 were $14.7 million, down from $15.8 million for the prior year period. Total operating expenses for the year ended December 31, 2019 were $51.2 million, compared to $48.1 million for 2018. The full-year expense increases include additional costs of products sold and an increase in amortization, a non-cash expense.

Adjusted Earnings:  Adjusted Earnings for the three months ended December 31, 2019 were $1.5 million, or $0.09 per share, compared to $1.6 million, or $0.10 per share in for the prior year period. Adjusted Earnings for the full year ended December 31, 2019 were $5.0 million, or $0.32 per share, a significant increase over the loss of $(0.5) million, or $(0.03) per share in 2018.

This performance measure represents net income attributable to common shareholders with adjustments for the impact of income taxes, depreciation, amortization, share based compensation expenses, Vibativ costs of products sold, and expenses that are non-core to the operating performance of the period. The definition and the reconciliation of Adjusted Earnings are provided in this release.

Balance Sheet:  At December 31, 2019, Cumberland had $28.2 million in cash and marketable securities. Total assets at December 31, 2019 were $104.5 million. Total Liabilities were $53.5 million, including $18.5 million outstanding on the Company's revolving line of credit and $8.6 million related to contingent liabilities related to the Vibativ acquisition, resulting in Total Shareholder's Equity of $51.1 million.

Conference Call and Webcast

A conference call and live Internet webcast will be held on Wednesday, March 18, 2020 at 4:30 p.m. Eastern Time to discuss the Company's fourth quarter and annual 2018 financial results. To participate in the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 855-859-2056 (for U.S. callers) or 404-537-3406 (for international callers). The Conference ID for the rebroadcast is 9759981. The live webcast and rebroadcast can be accessed via Cumberland's website at http://investor.cumberlandpharma.com/events-calendar.

About Cumberland Pharmaceuticals

Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on the delivery of high- quality prescription brands to improve patient care. The Company develops, acquires and commercializes brands for the hospital acute care and gastroenterology market segments. These medical specialties are categorized by moderately concentrated prescriber bases that we believe can be penetrated effectively by targeted sales forces. The Company's portfolio of FDA approved brands includes:

  • Acetadote® (acetylcysteine) Injection, for the treatment of acetaminophen poisoning;
  • Caldolor® (ibuprofen) Injection, for the treatment of pain and fever;
  • Kristalose® (lactulose) for Oral Solution, a prescription laxative, for the treatment of chronic and acute constipation;
  • Omeclamox®-Pak, (omeprazole, clarithromycin, amoxicillin) for the treatment of Helicobacter pylori (H. pylori) infection and related duodenal ulcer disease;
  • Vaprisol® (conivaptan) Injection, to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia;
  • Vibativ® (telavancin) Injection, for the treatment of certain serious bacterial infections including hospital-acquired and ventilator-associated bacterial pneumonia, as well as complicated skin and skin structure infections;
  • RediTrex™ (methotrexate) Injection, for the treatment of active rheumatoid, juvenile idiopathic and severe psoriatic arthritis, as well as disabling psoriasis.

For more information on Cumberland's approved products, including full prescribing information, please visit the individual product websites, links to which can be found on the Company's website www.cumberlandpharma.com.

The Company has Phase II clinical programs underway evaluating its ifetroban product candidates in patients with cardiomyopathy associated with Duchenne Muscular Dystrophy ("DMD"), Systemic Sclerosis ("SSc"), and Aspirin-Exacerbated Respiratory Disease ("AERD"), Hepatorenal Syndrome ("HRS") and Portal Hypertension ("PH").

About Acetadote® (acetylcysteine) Injection

Acetadote, administered intravenously within 8 to 10 hours after ingestion of a potentially hepatotoxic quantity of acetaminophen, is indicated to prevent or lessen hepatic injury. Used in the emergency department, Acetadote is approved in the United States to treat overdose of acetaminophen, a common ingredient in many over-the-counter medications. Acetadote is contraindicated in patients with hypersensitivity or previous anaphylactoid reactions to acetylcysteine or any components of the preparation. Serious anaphylactoid reactions, including death in a patient with asthma, have been reported in patients administered acetylcysteine intravenously. Acetadote should be used with caution in patients with asthma or where there is a history of bronchospasm. The total volume administered should be adjusted for patients weighing less than 40 kg and for those requiring fluid restriction. To avoid fluid overload, the volume of diluent should be reduced as needed. If volume is not adjusted, fluid overload can occur, potentially resulting in hyponatremia, seizure and death. For full prescribing information, visit www.acetadote.com.

About Caldolor® (ibuprofen) Injection

Caldolor is indicated in adults and pediatric patients for the management of mild to moderate pain and management of moderate to severe pain as an adjunct to opioid analgesics, as well as the reduction of fever.  It was the first FDA-approved intravenous therapy for fever.

Caldolor is contraindicated in patients with known hypersensitivity to ibuprofen or other NSAIDs, patients with a history of asthma or other allergic type reactions after taking aspirin or other NSAIDs.  Caldolor is contraindicated for use during the peri-operative period in the setting of coronary artery bypass graft (CABG) surgery. Caldolor should be used with caution in patients with prior history of ulcer disease or GI bleeding, in patients with fluid retention or heart failure, in the elderly, those with renal impairment, heart failure, liver impairment, and those taking diuretics or ACE inhibitors.  Blood pressure should be monitored during treatment with Caldolor.  For full prescribing information, including boxed warning, visit www.caldolor.com.

About Kristalose® (lactulose) Oral Solution

Kristalose is indicated for the treatment of acute and chronic constipation. It is a unique, proprietary, crystalline form of lactulose, with no restrictions on length of therapy or patient age. Initial dosing may produce flatulence and intestinal cramps, which are usually transient. Excessive dosage can lead to diarrhea with potential complications such as loss of fluids, hypokalemia and hypernatremia. Nausea and vomiting have been reported. Use with caution in diabetics.

Kristalose is contraindicated in patients who require a low-galactose diet. Elderly, debilitated patients who receive lactulose for more than six months should have serum electrolytes (potassium, chloride, carbon dioxide) measured periodically. For full prescribing information, visit www.kristalose.com.

About Omeclamox®-Pak (omeprazole, clarithromycin, amoxicillin)

Omeprazole is an antisecretory drug, which works by decreasing the amount of acid the stomach produces. Clarithromycin and amoxicillin are antibacterial drugs, which inhibit the growth of bacteria allowing the stomach lining to heal. Omeclamox-Pak is contraindicated in patients with a history of hypersensitivity to omeprazole, any macrolide antibiotic or penicillin. The safety and effectiveness of Omeclamox-Pak in the pediatric population has not yet been established. Omeclamox-Pak was approved by the U.S. Food and Drug Administration in 2011. For full prescribing information, visit www.omeclamox.com.

About Vaprisol® (conivaptan hydrochloride) Injection

Vaprisol is an intravenous treatment for hyponatremia used in the critical care setting. Hyponatremia is an electrolyte disturbance in which sodium ion concentration in blood plasma is lower than normal.  This can be associated with a variety of critical care conditions including congestive heart failure, liver failure, kidney failure and pneumonia.  The product is a vasopressin receptor antagonist that raises serum sodium levels and promotes free water secretion. Vaprisol was approved by the U.S. Food and Drug Administration in 2005 for euvolemic hyponatremia and in 2007 for hypervolemic hyponatremia. For full prescribing information, visit www.vaprisol.com.

About Vibativ® (telavancin) for Injection

Vibativ is a patented, FDA approved injectable anti-infective for the treatment of certain serious bacterial infections including hospital-acquired and ventilator-associated bacterial pneumonia and complicated skin and skin structure infections. It addresses a range of Gram-positive bacterial pathogens, including those that are considered difficult-to-treat and multidrug-resistant. For more information please visit www.vibativ.com.

About Cumberland Emerging Technologies (CET)

Cumberland Emerging Technologies, Inc. (www.cet-fund.com) is a joint initiative between Cumberland Pharmaceuticals Inc., Vanderbilt University, LaunchTN, and Gloria Pharmaceuticals. The mission of CET is to advance biomedical technologies and products conceived at Vanderbilt University and other regional research centers towards the marketplace.

CET helps manage the development and commercialization process for select projects, and provides expertise on intellectual property, regulatory, manufacturing and marketing issues that are critical to successful new biomedical products. CET's Life Sciences Center, provides laboratory space, equipment and infrastructure for CET's activities and other early-stage life sciences ventures.

Forward-Looking Statements

This press release contains forward-looking statements, which are subject to certain risks and reflect Cumberland's current views on future events based on what it believes are reasonable assumptions. No assurance can be given that these events will occur. As with any business, all phases of Cumberland's operations are subject to factors outside of its control, and any one or combination of these factors could materially affect Cumberland's results of operations. These factors include market conditions, competition, an inability of manufacturers to produce Cumberland's products on a timely basis or failure of manufacturers to comply with regulations applicable to pharmaceutical manufacturers, maintaining an effective sales and marketing infrastructure, natural disasters, public health epidemics, and other events beyond our control, as more fully discussed in the Company's most recent Form 10-K and subsequent 10-Qs as filed with the SEC. There can be no assurance that results anticipated by the Company will be realized or that they will have the expected effects. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to publicly revise these statements to reflect events after the date hereof.

 

CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2019 and 2018

(Unaudited)




2019


2018






ASSETS





Current assets:





Cash and cash equivalents


$

28,212,635



$

27,938,960


Marketable securities




8,290,679


Accounts receivable, net


9,781,463



7,844,249


Inventories, net


9,411,521



12,078,343


Prepaid and other current assets


2,757,456



2,963,806


Total current assets


50,163,075



59,116,037


Noncurrent inventory


15,554,992



15,749,000


Property and equipment, net


747,796



771,213


Intangible assets, net


30,920,324



33,655,099


Goodwill


882,000



784,000


Deferred tax assets, net


21,802



87,210


Operating lease right-of-use assets


2,960,569




Other assets


3,298,725



2,531,309


Total assets


$

104,549,283



$

112,693,868







LIABILITIES AND EQUITY





Current liabilities:





Accounts payable


$

11,912,446



$

11,093,297


Operating lease current liabilities


920,431




Other current liabilities


11,317,358



16,710,927


Total current liabilities


24,150,235



27,804,224


Revolving line of credit


18,500,000



20,000,000


Operating lease noncurrent liabilities


2,076,472




Other long-term liabilities


8,737,323



9,319,143


Total liabilities


53,464,030



57,123,367


Commitments and contingencies





Equity:





Shareholders' equity:





Common stock – no par value; 100,000,000 shares authorized; 15,263,555 and 15,481,497 shares issued and outstanding as of December 31, 2019 and 2018, respectively


49,914,478



51,098,613


Retained earnings


1,208,395



4,746,154


Total shareholders' equity


51,122,873



55,844,767


Noncontrolling interests


(37,620)



(274,266)


Total equity


51,085,253



55,570,501


Total liabilities and equity


$

104,549,283



$

112,693,868



 

CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)




Three months ended
December 31,


Years ended

December 31,



2019


2018


2019


2018










Revenues:









Net product revenue


$

13,231,839



$

13,405,273



$

45,552,587



$

40,200,832


Other revenue


446,533



92,633



1,981,050



540,933


Net revenues


13,678,372



13,497,906



47,533,637



40,741,765


Costs and expenses:









Cost of products sold


2,818,213



2,866,352



8,752,020



7,378,095


Selling and marketing


5,592,963



5,708,434



21,429,040



20,258,307


Research and development


2,079,782



2,785,231



6,478,592



7,575,892


General and administrative


3,135,405



3,577,569



10,362,433



10,150,777


Amortization


1,049,418



823,009



4,134,557



2,769,466


Total costs and expenses


14,675,781



15,760,595



51,156,642



48,132,537


Operating income (loss)


(997,409)



(2,262,689)



(3,623,005)



(7,390,772)


Interest income


47,449



166,064



243,364



564,484


Interest expense


(29,198)



(136,328)



(246,186)



(195,848)


Income (loss) before income taxes


(979,158)



(2,232,953)



(3,625,827)



(7,022,136)


Income tax expense (benefit)


6,812



(4,159)



79,316



(16,636)


Net income (loss)


(972,346)



(2,237,112)



(3,546,511)



(7,038,772)


Net loss at subsidiary attributable to noncontrolling interests


11,640



17,015



8,752



75,704


Net income (loss) attributable to common shareholders


$

(960,706)



$

(2,220,097)



$

(3,537,759)



$

(6,963,068)











Earnings per share attributable to common shareholders:









Basic


$

(0.06)



$

(0.14)



$

(0.23)



$

(0.45)


Diluted


$

(0.06)



$

(0.14)



$

(0.23)



$

(0.45)


Weighted-average common shares outstanding:









Basic


15,227,514



15,521,564



15,396,098



15,614,052


Diluted


15,227,514



15,521,564



15,396,098



15,614,052











Comprehensive income (loss) attributable to common shareholders


(960,706)



(2,220,097)



(3,537,759)



(6,963,068)


Net loss at subsidiary attributable to noncontrolling interests


11,640



17,015



8,752



75,704


Total comprehensive income (loss)


$

(972,346)



$

(2,237,112)



$

(3,546,511)



$

(7,038,772)


 

CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Years ended December 31, 2019 and 2018

(Unaudited)




2019


2018








Cash flows from operating activities:






Net income (loss)


$

(3,546,511)



$

(7,038,772)



Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:






Depreciation and amortization expense


4,404,175



2,982,703



Deferred tax expense


65,408



81,886



Share-based compensation


1,485,898



1,364,698



Excess tax (benefit) expense derived from exercise of stock options




(81,886)



Decrease in non-cash contingent consideration


(804,167)





Noncash interest expense


47,525



99,883



Noncash investment gains


(26,315)



(168,440)



Net changes in assets and liabilities affecting operating activities:






Accounts receivable


(1,937,214)



550,863



Inventory


2,860,830



460,505



Other current assets and other assets


(587,477)



712,149



Accounts payable and other accrued liabilities


1,824,024



4,308,706



Other long-term liabilities


(729,820)



(159,558)



Net cash provided by (used in) operating activities


3,056,356



3,112,737



Cash flows from investing activities:






Additions to property and equipment


(246,202)



(455,569)



Cash paid for acquisitions


(5,000,000)



(20,000,000)



Additions to intangible assets


(772,944)



(3,819,486)



Proceeds from sale of marketable securities


20,062,132



16,122,376



Purchases of marketable securities


(11,745,138)



(19,572,139)



Net cash (used in) provided by investing activities


2,297,848



(27,724,818)



Cash flows from financing activities:






Borrowings on line of credit


76,000,000



56,000,000



Repayments on line of credit


(77,500,000)



(45,800,000)



Sales of shares of common stock, net of offering costs




200,909



Sale of subsidiary shares to noncontrolling interest


1,000,000





Cash payment of contingent consideration


(1,033,108)





Cash payment of financing costs


(52,500)





Payments of deferred equity offering costs




(383,310)



Payments made in connection with repurchase of common shares


(3,494,921)



(2,879,426)



Net cash provided by financing activities


(5,080,529)



7,138,173



Net increase (decrease) in cash and cash equivalents


273,675



(17,473,908)



Cash and cash equivalents, beginning of year


27,938,960



45,412,868



Cash and cash equivalents, end of year


$

28,212,635



$

27,938,960




 

CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES

Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Adjusted Earnings (Loss) and Adjusted Diluted Earnings Per Share

(Unaudited)




Three months ended
December 31,


Three months ended
December 31,



2019


2019


2018


2018












Earnings
impact


Earnings per
share impact


Earnings
impact


Earnings per
share impact

Net income (loss) attributable to common shareholders


$

(960,706)



$

(0.06)



$

(2,220,097)



$

(0.14)


Less: Net loss at subsidiary attributable to noncontrolling interests


11,640





17,015




Net income (loss)


(972,346)



(0.06)



(2,237,112)



(0.14)


Adjustments to net income (loss)









Income tax expense (benefit)


(6,812)





4,159




Depreciation and amortization


1,125,217



0.07



874,652



0.06


Share-based compensation (a)


378,081



0.02



359,459



0.02


Impact of Vibativ cost of product sold (b)


955,545



0.06



1,292,286



0.08


FDA costs of Reditrex submission (c)






1,294,239



0.08


Interest income


(47,449)





(166,064)



(0.01)


Interest expense


29,198





136,328



0.01


Adjusted Earnings and Adjusted Diluted Earnings Per Share


$

1,461,434



$

0.09



$

1,557,947



$

0.10


Diluted weighted-average common shares outstanding:




15,595,192





15,895,250











 



Twelve months ended
December 31,


Twelve months ended
December 31,



2019


2019


2018


2018












Earnings
impact


Earnings per
share impact


Earnings
impact


Earnings per
share impact

Net income (loss) attributable to common shareholders


$

(3,537,759)



$

(0.22)



$

(6,963,068)



$

(0.45)


Less: Net loss at subsidiary attributable to noncontrolling interests


8,752





75,704




Net income (loss)


(3,546,511)



(0.22)



(7,038,772)



(0.45)


Adjustments to net income (loss)









Income tax expense (benefit)


(79,316)



(0.01)



16,636




Depreciation and amortization


4,404,175



0.28



2,982,703



0.19


Share-based compensation (a)


1,485,898



0.09



1,364,698



0.09


Impact of Vibativ cost of product sold (b)


2,702,350



0.17



1,292,286



0.08


FDA costs of Reditrex submission (c)






1,294,239



0.08


Interest income


(243,364)



(0.02)



(564,484)



(0.04)


Interest expense


246,186



0.02



195,848



0.01


Adjusted Earnings and Adjusted Diluted Earnings Per Share


$

4,969,418



$

0.32



$

(456,846)



$

(0.03)


Diluted weighted-average common shares outstanding:




15,763,570





15,614,052











 

The Company provided the above adjusted supplemental financial performance measures, which are considered "non-GAAP" financial measures under applicable Securities and Exchange Commission rules and regulations. These financial measures should be considered supplemental to, and not as a substitute for, financial information prepared in accordance with generally accepted accounting principles ("GAAP"). The definition of these supplemental measures may differ from similarly titled measures used by others.

Because these supplemental financial measures exclude the effect of items that will increase or decrease the Company's reported results of operations, management strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety. A reconciliation of the supplemental financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this release.

Cumberland's management believes these supplemental financial performance measures are important as they are used by management, along with financial measures in accordance with GAAP, to evaluate the Company's operating performance.  In addition, Cumberland believes that they will be used by certain investors to measure the Company's operating results. Management believes that presenting these supplemental measures provides useful information about the Company's underlying performance across reporting periods on a consistent basis by excluding items that Cumberland does not believe are indicative of its core business performance or reflect long-term strategic activities.  Certain of these items are not settled through cash payments and include: depreciation, amortization, share-based compensation expense and income taxes.  Cumberland utilizes its net operating loss carryforwards to pay minimal income taxes.  In addition, the use of these financial measures provides greater transparency to investors of supplemental information used by management in its financial and operational decision-making, including the evaluation of the Company's operating performance.

The Company defines these supplemental financial measures as follows:

  • Adjusted Earnings: net income (loss) adjusted for the impact of income taxes, depreciation and amortization expense, share-based compensation expense and other income and interest expense.

(a) Represents the share-based compensation of Cumberland.

(b) Represents the non-cash impact of the Vibativ cost of products sold.  Cumberland has elected to add these costs back in the calculation of adjusted earnings as all the Vibativ inventory the Company is selling was transferred to Cumberland as part of the transaction with Theravance at no additional cost in the product acquisition.          

(c)  Reflects the initial RediTrex submission fee paid to the FDA to evaluate our request for product approval during 2018. The FDA approved the product during 2019.

  • Adjusted Diluted Earnings Per Share: Adjusted Earnings divided by diluted weighted-average common shares outstanding.

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SOURCE Cumberland Pharmaceuticals Inc.