SEGMENT REPORTING

3 Months Ended

Mar. 31, 2023

SEGMENT REPORTING

SEGMENT REPORTING

15. 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. 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 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 March 31,
(in thousands)	2023		2022
Net Revenues
Generics, Established Brands, and Other	$	90,456	$	63,185
Rare Disease		16,330		1,292
Total net revenues	$	106,786	$	64,477
Segment earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) and reconciliation to income (loss) before income taxes
Generics, Established Brands, and Other	$	38,828	$	14,531
Rare Disease		(1,251)		(10,448)
Depreciation and amortization		(14,700)		(14,557)
Corporate and other unallocated expenses(1)		(12,982)		(8,721)
Total operating income (loss)		9,895		(19,195)
Interest expense, net		(7,696)		(6,613)
Other expense, net		(34)		(89)
Income (loss) before (provision) benefit for income taxes	$	2,165	$	(25,897)

(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 currently located in the United States and India. We have ceased operations at our Oakville, Ontario, Canada location as of March 31, 2023. 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	2023		2022
United States	$	106,221	$	63,760
Canada		565		717
Total Revenue	$	106,786	$	64,477

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

(in thousands)	March 31, 2023		December 31, 2022
United States	$	42,024	$	40,343
Canada(1)		—		1,856
India		1,251		1,047
Total property and equipment, net	$	43,275	$	43,246

(1) Amounts as of March 31, 2023 exclude the land and building at our Canada facility, which are classified as held for sale as of March 31, 2023. These assets have a carrying value of $8.0 million.