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Elite Pharmaceuticals' (ELTP) FY24 Earnings Up, Gross Margin Down
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Elite Pharmaceuticals, Inc. (ELTP - Free Report) delivered earnings per share (EPS) of 2 cents in fiscal 2024 compared with break-even EPS at the fiscal 2023-end.
Revenues in Detail
Elite Pharmaceuticals registered revenues of $56.6 million in fiscal 2024, up 65.8% from the comparable fiscal 2023 period. This primarily resulted from robust revenues from Manufacturing fees.
Segment Details
Elite Pharmaceuticals’ derives revenues from two sources — Manufacturing fees and Licensing fees.
In fiscal 2024, revenues from Manufacturing fees were $54.1 million, up 85.4% from the fiscal 2023-end. This primarily resulted from the launch of the Elite label during the current fiscal year, which achieved increased sales for the year ended Mar 31, 2024, compared with the prior fiscal year, which did not include any sales of Elite label products.
Revenues in the Licensing fees segment totaled $2.5 million in fiscal 2024, down 49.6% from fiscal 2023. The decrease was primarily due to the expiration of the marketing alliance agreements between the company and Lannett Company, Inc. (the Lannett Agreements) on Mar 31, 2023.
The revenue streams that were generated during periods ending on or prior to Mar 31, 2023, and attributed to the Lannett Agreements included profit splits on the sale by Lannett of Amphetamine IR and Amphetamine ER. Since Apr 1, 2023, these products have been sold by Elite Pharmaceuticals under its label, with revenues being recorded as manufacturing revenues instead of licensing fees.
Elite Pharmaceuticals’ Gross Margin
In fiscal 2024, Elite Pharmaceuticals’ gross profit was $26.4 million, up 58.8% from the comparable fiscal 2023 period. The gross margin for fiscal 2024 was 47%, down from 49% in the comparable fiscal 2023 period.
The decrease in gross margin was due to increased manufacturing volumes, resulting in decreased unit costs due to efficiencies of scale being achieved on the increased manufacturing volume.
The research and development expenses in fiscal 2024 were $6.9 million, up 11% from the comparable fiscal 2023 period. The increase was a result of the timing and nature of product development activities during the fiscal year that ended on Mar 31, 2024, compared with the prior fiscal year.
General and administrative expenses in fiscal 2024 were $7.2 million, up 39.5% from the comparable fiscal 2023 period. This largely resulted from an increased human resource headcount and costs in fiscal 2024 compared with the prior fiscal year, as well as infrastructure costs related to Elite label’s commercial activities resulting from the commercial launch of the Elite label product line during the fiscal year that ended on Mar 31, 2024.
Profitability
In fiscal 2024, income from operations was $10.8 million, up 193.5% from the comparable fiscal 2023 period.
In fiscal 2024, the net income was $20.1 million, up 464.6% from the comparable fiscal 2023 period.
Liquidity & Debt Management
Elite Pharmaceuticals exited fiscal 2024 with cash of $7.1 million compared with $7.8 million at the fiscal 2023-end.
Cumulative net cash used in operating activities at the end of fiscal 2024 was $3.3 million against net cash provided by operating activities of $3.3 million a year ago.
Our Take
Elite Pharmaceuticals exited fiscal 2024 with encouraging top-line and bottom-line results. Robust revenues from Manufacturing fees were impressive. The increase in operating profits, which was primarily attributed to the commercial launch of the Elite label product line during fiscal 2024, and solid net income during the fiscal year were also encouraging.
However, the decline in the Licensing fee revenues was disappointing. Gross margin contraction does not bode well.
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Elite Pharmaceuticals' (ELTP) FY24 Earnings Up, Gross Margin Down
Elite Pharmaceuticals, Inc. (ELTP - Free Report) delivered earnings per share (EPS) of 2 cents in fiscal 2024 compared with break-even EPS at the fiscal 2023-end.
Revenues in Detail
Elite Pharmaceuticals registered revenues of $56.6 million in fiscal 2024, up 65.8% from the comparable fiscal 2023 period. This primarily resulted from robust revenues from Manufacturing fees.
Segment Details
Elite Pharmaceuticals’ derives revenues from two sources — Manufacturing fees and Licensing fees.
In fiscal 2024, revenues from Manufacturing fees were $54.1 million, up 85.4% from the fiscal 2023-end. This primarily resulted from the launch of the Elite label during the current fiscal year, which achieved increased sales for the year ended Mar 31, 2024, compared with the prior fiscal year, which did not include any sales of Elite label products.
Revenues in the Licensing fees segment totaled $2.5 million in fiscal 2024, down 49.6% from fiscal 2023. The decrease was primarily due to the expiration of the marketing alliance agreements between the company and Lannett Company, Inc. (the Lannett Agreements) on Mar 31, 2023.
The revenue streams that were generated during periods ending on or prior to Mar 31, 2023, and attributed to the Lannett Agreements included profit splits on the sale by Lannett of Amphetamine IR and Amphetamine ER. Since Apr 1, 2023, these products have been sold by Elite Pharmaceuticals under its label, with revenues being recorded as manufacturing revenues instead of licensing fees.
Elite Pharmaceuticals’ Gross Margin
In fiscal 2024, Elite Pharmaceuticals’ gross profit was $26.4 million, up 58.8% from the comparable fiscal 2023 period. The gross margin for fiscal 2024 was 47%, down from 49% in the comparable fiscal 2023 period.
The decrease in gross margin was due to increased manufacturing volumes, resulting in decreased unit costs due to efficiencies of scale being achieved on the increased manufacturing volume.
Elite Pharmaceuticals’ Operating Expenses Analysis
The research and development expenses in fiscal 2024 were $6.9 million, up 11% from the comparable fiscal 2023 period. The increase was a result of the timing and nature of product development activities during the fiscal year that ended on Mar 31, 2024, compared with the prior fiscal year.
General and administrative expenses in fiscal 2024 were $7.2 million, up 39.5% from the comparable fiscal 2023 period. This largely resulted from an increased human resource headcount and costs in fiscal 2024 compared with the prior fiscal year, as well as infrastructure costs related to Elite label’s commercial activities resulting from the commercial launch of the Elite label product line during the fiscal year that ended on Mar 31, 2024.
Profitability
In fiscal 2024, income from operations was $10.8 million, up 193.5% from the comparable fiscal 2023 period.
In fiscal 2024, the net income was $20.1 million, up 464.6% from the comparable fiscal 2023 period.
Liquidity & Debt Management
Elite Pharmaceuticals exited fiscal 2024 with cash of $7.1 million compared with $7.8 million at the fiscal 2023-end.
Cumulative net cash used in operating activities at the end of fiscal 2024 was $3.3 million against net cash provided by operating activities of $3.3 million a year ago.
Our Take
Elite Pharmaceuticals exited fiscal 2024 with encouraging top-line and bottom-line results. Robust revenues from Manufacturing fees were impressive. The increase in operating profits, which was primarily attributed to the commercial launch of the Elite label product line during fiscal 2024, and solid net income during the fiscal year were also encouraging.
However, the decline in the Licensing fee revenues was disappointing. Gross margin contraction does not bode well.