I just looked through the Annual report and came across some interesting statistics. I'd be curious to get responses from those who think that LCI is a good buy at the current price. Let me say that I was long on LCI, but I just sold the last of my shares today.
LCI currently markets 11 items, 4 from Jerome Stevens. Of those 11 items, 6 items, which includes the 4 JS items contributed 97% of net sales in FY 2004, 95% in FY 2003, and 84% in FY 2002.
Finished product purchases from JS made up 81% of inventory purchases in FY 2004, 62% in FY 2003, and 26% in FY 2002.
Net sales increased to $63.8 million for FY 2004 from $42.5 million for FY 2003. Of that $21.3 million increase, $20.5 million came from the JS items. The increase in sales from FY 2002 to FY 2003 was $17.4 million. Of that $9.7 million was from the JS items plus one LCI item.
LCI's growth is primarily due to the JS items. The biggest item is Levothyroxine, which now has two competitors in Mylan and Sandoz, which has both Levoxyl and Synthroid AB ratings, where JS has only the Levoxyl rating.
LCI has submitted 7 ANDAs this year; however, the average time to receive an approval from the FDA is 17 months. That means LCI probably will not get any approvals on those items until near the end of 2005. LCI is also working on getting old ANDAs to market, but how much will they add to sales? They quit making them for a reason. What's changed now?
LCI relies more and more on the JS items for sales and growth, items which have more competition. They diluted the shares by 4 million to quarantee the JS items. They are probaly a year away from any new items of any value.
One other thing. It doesn't look like the extra 4 million shares are bing included in the EPS numbers. According to my calculations, using the numbers from Yahoo!, the EPS should be .55, not .63.
You are wrong about the 4 million not being counted. They were added to the shares outstanding last quarter. You are also wrong about the "published" percent of earnings for specific drugs. LCI does not publish the breakdown in these earnings as it would then inform the competition of their most lucrative product lines.
I know they should be, but look at the numbers on Yahoo! financial. The .634 EPS they show would apply to only 21 million shares, not 24 million. If you look at the annual report, under number of shares for 2004, they show approx. 21 million, not 24 million. Which brings up another question. If the annual report shows 21 million shares, are there now 25 million, instead of 24 million? I beleive that LCI is showing over 1 million shares to be issued for employee compensation.