Akorn Announces Certain Preliminary Financial Results for Q3 2013

  Akorn Announces Certain Preliminary Financial Results for Q3 2013

   - To facilitate debt syndication for previously announced acquisition of
                             Hi-Tech Pharmacal -

Business Wire

LAKE FOREST, Ill. -- October 28, 2013

Akorn, Inc. (NASDAQ: AKRX), a niche generic pharmaceutical company (the
“Company”), today announced certain preliminary financial results for its
third quarter ended September 30, 2013. The purpose of this release is to
facilitate the syndication of a $600 million term loan related to the
Company’s previously announced acquisition of Hi-Tech Pharmacal Co., Inc. The
acquisition is expected to close during the first quarter of 2014. The Company
will issue a press release and host a conference call on November 5, 2013 to
report its final third quarter financial results.

Preliminary Third Quarter 2013 Financial Results

  *Consolidated revenue for the third quarter of 2013 is expected to be in
    the range of $81 million to $82 million.
  *GAAP net income is expected to be in the range of $12 million to $13
    million, or from $0.10 to $0.11 per diluted share.
  *Non-GAAP adjusted net income is expected to be in the range of
    approximately $16 million to $17 million, resulting in non-GAAP adjusted
    net income per diluted share of $0.14 to $0.15.
  *Operating cash flows for the third quarter of 2013 are expected to be
    approximately $20 to $22 million, and free cash flows are expected to be
    approximately $17 to $18 million.

2013 Outlook

The Company reaffirms its fiscal year 2013 guidance excluding the impact of
Hi-Tech acquisition-related costs on GAAP net income.

Third Quarter 2013 Conference Call

The Company will host a conference call at 10:00 a.m. Eastern Time on Tuesday,
November 5, 2013, to discuss final third quarter 2013 results followed by a
Q&A session. The domestic call-in number is 888-389-5988 and the international
call-in number is 719-325-2454. The confirmation code for all callers is
7868985. The URL for the webcast is
http://www.videonewswire.com/event.asp?id=96457. A live broadcast of the
conference call will be available online at www.akorn.com under the Investor
Relations tab. An online replay will follow immediately and be available for
30 days.

About Akorn, Inc.

Akorn, Inc. is a niche pharmaceutical company engaged in the development,
manufacture and marketing of multisource and branded pharmaceuticals. Akorn
has manufacturing facilities located in Decatur, Illinois, Somerset, New
Jersey and Paonta Sahib, India where the Company manufactures ophthalmic and
injectable pharmaceuticals. Additional information is available on the
Company’s website at www.akorn.com.

Forward Looking Statements

This press release includes statements that may constitute "forward-looking
statements", including projections of certain measures of Akorn's results of
operations, projections of sales, projections of certain charges and expenses,
projections related to the number and potential market size of ANDAs and other
statements regarding Akorn's goals, regulatory approvals and strategy. Akorn
cautions that these forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those
indicated in the forward-looking statements. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Because such statements inherently involve risks and
uncertainties, actual future results may differ materially from those
expressed or implied by such forward-looking statements. You can identify
these statements by the fact that they do not relate strictly to historical or
current facts. They use words such as "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," and other words and terms of similar
meaning in connection with a discussion of future operating or financial
performance. Factors that could cause or contribute to such differences
include, but are not limited to: statements relating to future steps we may
take, prospective products, future performance or results of current and
anticipated products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, and financial results. These cautionary statements
should be considered in connection with any subsequent written or oral
forward-looking statements that may be made by the Company or by persons
acting on its behalf and in conjunction with its periodic SEC filings. You are
advised, however, to consult any further disclosures we make on related
subjects in our reports filed with the SEC. In particular, you should read the
discussion in the section entitled "Cautionary Statement Regarding
Forward-Looking Statements" in our most recent Annual Report on Form 10-K, as
it may be updated in subsequent reports filed with the SEC. That discussion
covers certain risks, uncertainties and possibly inaccurate assumptions that
could cause our actual results to differ materially from expected and
historical results. Other factors besides those listed there could also
adversely affect our results. The addressable IMS market size figures
presented in this press release outline the approximate aggregate size of the
potential market and are not forecasts of our future sales.

Non-GAAP Financial Measures

In addition to reporting various financial information in accordance with U.S.
generally accepted accounting principles (GAAP), Akorn also reports Adjusted
net income and Adjusted net income per diluted share, which are non-GAAP
financial measures. Since Adjusted net income and Adjusted net income per
diluted share are non-GAAP financial measures, they should not be used in
isolation or as a substitute for consolidated statements of operations and
cash flow data prepared in accordance with GAAP. In addition, Akorn’s
definitions of Adjusted net income and Adjusted net income per diluted share
may not be comparable to similarly titled non-GAAP financial measures reported
by other companies.

Adjusted net income, as defined by the Company, is calculated as follows:

Net income, plus:

  *The recorded provision for income taxes
  *Intangible asset amortization
  *Non-cash expenses, such as non-cash interest, share-based compensation
    expense, changes in the fair value of warrants, and deferred financing
    cost amortization
  *Other adjustments, such as acquisition related expenses and legal
  *Less an estimated tax provision.

Adjusted net income per diluted share is equal to non-GAAP Adjusted net income
divided by the actual or anticipated diluted share count, calculated in
accordance with GAAP, for the applicable period.

The Company believes that Adjusted net income and Adjusted net income per
diluted shares are meaningful financial indicators, to both Company management
and investors, in that they exclude non-cash income and expense items that
have no impact on current or future cash flows, as well as other income and
expense items that are not expected to recur and therefore are not reflective
of continuing operating performance. Adjusted net income and Adjusted net
income per diluted share provide the Company and investors with income figures
that would be expected to be more aligned with cash flows than GAAP net
income, which includes a number of non-cash income and expense items.

While the Company uses Adjusted net income and Adjusted net income per diluted
share in managing and analyzing its business and financial condition and
believes these non-GAAP financial measures to be useful to investors in
evaluating the Company’s performance, each of these financial measures has
certain shortcomings. Adjusted net income does not take into account non-cash
expenses that reflect the amortization of past expenditures, or include
stock-based compensation, which is an important and material element of the
Company’s compensation package for its directors, officers and other key
employees. Due to the inherent limitations of each of these non-GAAP financial
measures, the Company’s management utilizes comparable GAAP financial measures
to evaluate the business in conjunction with Adjusted net income and Adjusted
net income per diluted share and encourages investors to do likewise.

                                                  Quarter ended Sept. 30, 2013
                                                  Low              High
NET INCOME                                        $   11,700       $  12,700
INCOME TAX PROVISION                                 7,500          8,100
INCOME BEFORE INCOME TAXES                            19,200          20,800
Acquisition-related expenses                          1,400           1,400
Non-cash stock compensation expense                   1,400           1,400
Non-cash interest expense                             1,200           1,200
Amortization expense                                  1,600           1,600
Write-off and amortization of deferred                200             200
financing costs
Litigation settlement                                400            400
ADJUSTED INCOME BEFORE INCOME TAXES                   25,400          27,000
ADJUSTED INCOME TAX PROVISION                        9,300          9,900
ADJUSTED NET INCOME                               $   16,100       $  17,100
DILUTED SHARES                                        113,700         113,700
ADJUSTED NET INCOME PER DILUTED SHARE             $   0.14         $  0.15


Akorn, Inc.
Tim Dick, Chief Financial Officer
(847) 279-6150
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