Quarterly Financial Information (Unaudited)

12 Months Ended

Jun. 30, 2013

Quarterly Financial Information (Unaudited)

Quarterly Financial Information (Unaudited)

Note 23.  Quarterly Financial Information (Unaudited)

Lannett’s quarterly consolidated results of operations are shown below:

	Fourth			Third		Second			First
(In thousands, except per share data)	Quarter			Quarter		Quarter			Quarter
Fiscal 2013
Net sales	$	40,174		$	39,022	$	36,564		$	35,294
Cost of sales	24,971			23,852		23,143			21,668
Gross profit	15,203			15,170		13,421			13,626
Operating expenses	9,527			10,474		8,727			9,935
Operating income	5,676			4,696		4,694			3,691
Other income (expense)	(109		)	594		(86		)	1,529
Income tax expense	1,950			1,327		1,749			2,277
Less: Net income (loss) attributable to noncontrolling interest	54			16		(22		)	17
Net income	$	3,563		$	3,947	$	2,881		$	2,926
Earnings per common share (1)
Basic	$	0.12		$	0.14	$	0.10		$	0.10
Diluted	$	0.12		$	0.14	$	0.10		$	0.10

	Fourth			Third		Second		First
(In thousands, except per share data)	Quarter			Quarter		Quarter		Quarter
Fiscal 2012
Net sales	$	35,690		$	30,688	$	27,734	$	28,878
Cost of sales	23,677			19,797		20,307		20,262
Gross profit	12,013			10,891		7,427		8,616
Operating expenses	9,407			8,527		6,932		7,171
Operating income	2,606			2,364		495		1,445
Other income (expense)	(362		)	427		654		(1,011		)
Income tax expense	812			1,057		519		212
Less: Net income attributable to noncontrolling interest	17			16		21		16
Net Income	$	1,415		$	1,718	$	609	$	206
Earnings per common share (1)
Basic	$	0.05		$	0.06	$	0.02	$	0.01
Diluted	$	0.05		$	0.06	$	0.02	$	0.01

	Fourth			Third			Second			First
(In thousands, except per share data)	Quarter			Quarter			Quarter			Quarter
Fiscal 2011
Net sales	$	25,507		$	25,893		$	30,039		$	25,396
Cost of sales	21,752			20,589			21,682			19,492
Gross profit	3,755			5,304			8,357			5,904
Operating expenses	7,186			6,134			4,536			6,643
Operating income (expense)	(3,431		)	(830		)	3,821			(739		)
Other income (expense)	568			22			(67		)	(45		)
Income tax expense (benefit)	(1,015		)	(450		)	1,394			(390		)
Less: Net income attributable to noncontrolling interest	16			4			7			10
Net income (loss)	$	(1,864	)	$	(362	)	$	2,353		$	(404	)
Earnings per common share (1)
Basic	$	(0.07	)	$	(0.01	)	$	0.09		$	(0.02	)
Diluted	$	(0.07	)	$	(0.01	)	$	0.09		$	(0.02	)

(1) Due to differences in weighted average common shares outstanding, quarterly earnings per share may not add up to the totals reported for the full fiscal year.

During the first quarter of Fiscal 2013, the Company entered into a favorable settlement agreement related to litigation the Company had been involved in since January 2010.  As a result of the agreement the Company recorded a gain in the amount of $1.3 million.  As of June 30, 2013, the Company had recorded all amounts related to the agreement.

In the fourth quarter of Fiscal 2011, gross margins were 15%.  Gross margins in the fourth quarter of Fiscal 2011 were primarily impacted by product mix as well as underutilization of labor resources in our manufacturing process as compared to the previous quarters in Fiscal 2011.