SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

SEGMENT REPORTING

SEGMENT REPORTING

16. SEGMENT REPORTING

An operating segment is defined as a component of an entity that engages in business activities from which it may recognize revenues and incur expense, its operating results are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and its discrete financial information is available. Prior to 2022, based on this definition, we had concluded that we had one operating segment. Effective in the first quarter of 2022 and prospectively, in conjunction with the principal completion of our buildout of infrastructure in the areas of commercialization of rare disease therapies and the launch of Purified Cortrophin Gel, we determined that we have two operating segments as follows:

● Generics, Established Brands, and Other – Consists of operations related to the development, manufacturing, and marketing of generic and established brand pharmaceuticals, including those sold through traditional channels, contract manufactured products, product development services, royalties, and other.

● Rare Disease – Consists of operations related to the development, manufacturing and marketing of pharmaceuticals used in the treatment of patients with rare conditions. The rare disease segment currently consists of operations related to Purified Cortrophin Gel.

Our CODM evaluates our two operating segments based on revenues and earnings before interest, income taxes, depreciation, and amortization (“EBITDA”), exclusive of corporate expenses and other expenses not directly allocated or attributable to an operating segment. These expenses include but are not limited to certain management, legal, accounting, human resources, insurance, and information technology expenses.

We do not manage assets of the company by operating segment and our CODM does not review asset information by operating segment. Accordingly, we do not present total assets by operating segment.

Financial information by reportable segment is as follows:

	Three Months Ended
(in thousands)	March 31, 2022		March 31, 2021
Net Revenues
Generics, Established Brands, and Other	$	63,185	$	54,521
Rare Disease		1,292		—
Total net revenues	$	64,477	$	54,521
Segment earnings/(loss) before interest, taxes, depreciation and amortization ("EBITDA") and reconciliation to (loss)/income before income taxes
Generics, Established Brands, and Other		14,531		21,839
Rare Disease		(10,448)		(1,278)
Depreciation and amortization		(14,557)		(10,898)
Corporate and other unallocated expenses(1)		(8,721)		(6,618)
Total operating (loss)/income	$	(19,195)	$	3,045
Interest expense, net		(6,613)		(2,454)
Other expense, net		(89)		(515)
(Loss)/income before benefit for income taxes	$	(25,897)	$	76

^{(1) Includes expenses not directly allocated or attributable to a reporting segment, including certain management, legal, accounting, human resources, insurance, and information technology expenses, and are included in selling, general, and administrative expenses in our unaudited interim consolidated statement of operations.}

Geographic Information

Our operations are located in the United States, Canada, and India. The majority of the assets of the Company are located in the United States.

The following table depicts the Company’s revenue by geographic operations during the following periods:

(in thousands)	Three Months Ended March 31,
Location of Operations	2022		2021
United States	$	63,760	$	53,327
Canada		717		1,194
Total Revenue	$	64,477	$	54,521

The following table depicts the Company’s property and equipment, net according to geographic location as of:

(in thousands)	March 31, 2022		December 31, 2021
United States	$	38,770	$	38,564
Canada		13,685		13,831
India		258		276
Total property and equipment, net	$	52,713	$	52,671