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EP

ELITE PHARMACEUTICALS INC /NV/ (ELTP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $14.4M (−8% YoY; −24% QoQ) with operating income of $1.1M (−69% YoY) as holiday timing delayed late-December shipments into early January; January was “best ever” for shipments and revenue according to management, implying a meaningful Q4 rebound .
  • Net loss of $(10.9)M (−$0.01 EPS) was driven by a non-cash mark-to-market increase in warrant derivative liabilities as ELTP’s share price rose; operating performance (gross profit $6.1M; 43% GM) remained positive .
  • Strategic launches: generic Vyvanse (Dec 26), Hydrocodone/APAP (Dec 2), Codeine/APAP (Oct 7), and Methotrexate (Aug 27). Vyvanse revenue recognition largely missed Q3 due to delivery timing, but January sales were strong; DEA quotas are a gating factor for ADHD products .
  • Packaging expansion milestone: new 144 Ludlow packaging facility approval (Feb 9, 2025) removes a bottleneck and should aid throughput and margins mix over time; management reiterated FY25 revenue outlook to “skip the 60s and comfortably hit the 70s” (i.e., $70M+), aided by Vyvanse ramp and pipeline .
  • Potential stock catalysts: January/February run-rate strength flowing into Q4, Oxy/APAP launch by/before April, and M&A/NASDAQ path “very near” (management acknowledges a reverse split would be required for uplisting) .

What Went Well and What Went Wrong

  • What Went Well

    • January run-rate strength after shipment timing issues: “January 2025 was our best ever with regards to shipments, revenues, contribution margin,” nearly matching the entire Q3 quarter; February tracking similarly .
    • ADHD portfolio expansion: full commercial launch of Vyvanse (generic Lisdexamfetamine) with volumes “well in excess of all…other products combined,” and continued leadership in Adderall IR (~17% share) and ER (~16% incl. Prasco) .
    • Capacity unlock: FDA approval of the new packaging facility removes a bottleneck and doubles packaging capacity; CFO notes costs shift from G&A to COGS, aiding matching to revenue as volumes scale .

  • What Went Wrong

    • Revenue dip from shipment timing: Q3 revenue fell to $14.4M (−8% YoY; −24% QoQ) as late-December shipments moved to early January due to holidays and customer receiving schedules .
    • Margin pressure vs prior year: gross margin at 43% (vs 45% LY) and higher G&A (+59% YoY) from regulatory/compliance costs and pre-approval overhead for the new facility .
    • Non-cash warrant revaluation drove bottom-line loss: derivative liability rose to $33.6M (from $6.3M at 3/31/24), creating a large P&L hit despite positive operating profit .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($M)$15.539 $18.803 $18.880 $14.364
Gross Profit ($M)$7.041 $8.475 $8.197 $6.119
Gross Margin %45% 45% 43% 43%
Operating Income ($M)$3.533 $3.864 $3.485 $1.098
Net Income ($M)$0.706 $0.616 $(11.036) $(10.892)
Diluted EPS ($)$0.00 $0.00 $(0.01) $(0.01)
Revenue Consensus ($M)NA (S&P Global data unavailable)NA (S&P Global data unavailable)NA (S&P Global data unavailable)NA (S&P Global data unavailable)
EPS Consensus ($)NA (S&P Global data unavailable)NA (S&P Global data unavailable)NA (S&P Global data unavailable)NA (S&P Global data unavailable)

Revenue breakdown by type:

Revenue Mix ($M)Q3 2024Q1 2025Q2 2025Q3 2025
Manufacturing Fees$14.791 $18.444 $18.225 $13.738
Licensing Fees$0.748 $0.359 $0.655 $0.626
Total$15.539 $18.803 $18.880 $14.364

Operating/Balance Sheet KPIs:

KPIQ1 2025Q2 2025Q3 2025
Inventory ($M)$13.831 $14.165 $20.158
Working Capital ($M)$29.146 $32.440 $33.361
Warrant Derivative Liability ($M)$9.081 $21.836 $33.565
Operating Cash Flow YTD ($M)$3.144 (3M) $4.601 (6M) $3.538 (9M)
Cash & Restricted Cash ($M)$8.845 $9.999 $8.742

KPIs/operational notes:

  • Management noted Elite’s Adderall IR share ~17% and ER ~16% (13% Elite + ~3% via Prasco) over the past year (IQVIA basis) .
  • January 2025 unaudited revenue ~$12.5M; February tracking similarly, supporting a strong Q4 rebound after Q3 shipment timing effects .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue OutlookFY 2025“On target to skip the 60s and go for the 70s” (i.e., $70M+) “Skip the 60s and comfortably hit the 70s range” Maintained/strengthened tone
Oxycodone/APAP Launch TimingCY 2025Launch after Hydro/APAP (sequence adjusted due to API issues) Launch by or before April 2025 Date clarified; near-term
Methadone Launch TimingCY 2025After Oxy/APAP in 6–8 week cadence After Oxy/APAP (rescheduled due to Vyvanse priority) Rescheduled but intact
Packaging CapacityQ1 CY 2025“Nearly ready,” doubled capacity expected FDA approval received (Feb 9, 2025); capacity unlocked Achieved milestone
Strategic Path (M&A/NASDAQ)Medium-termAttractive position for M&A/uplisting discussed “Time is very near” to pursue M&A/uplisting; reverse split required for NASDAQ Timing pulled forward

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
ADHD franchise (Vyvanse, Adderall)Q2: CNS ANDA pending; strong Elite-label trajectory; service levels high Vyvanse launched Dec 26; Jan revenue ~$12.5M; quota management to avoid failure-to-supply; Adderall leadership reiterated Positive ramp, quota-constrained
Shipment timing / seasonalityNot flagged previouslyHoliday timing shifted Dec shipments to January; January best month ever One-off timing impact
Capacity & operationsNew packaging facility “nearly ready,” to triple line capacity (with line move) FDA approval obtained; G&A overhead component shifts into COGS as facility is used Capacity unlocked
Opioid product rollout (Hydro/APAP, Oxy/APAP, Methadone)Hydro/APAP launched; Oxy/APAP after Hydro; Methadone next Oxy/APAP slated by/before April; methadone after; rescheduled due to Vyvanse priority Slightly delayed but near-term
Macro/tariffsLimited discussionTariffs unlikely to hit medical products; limited exposure given U.S. sourcing for opioid APIs Neutral
Strategy: M&A/NASDAQ“Attractive” for M&A/uplisting in future “Very near” to pursue; reverse split required for NASDAQ Accelerating

Management Commentary

  • “January 2025 was our best ever with regards to shipments, revenues, contribution margin and February is tracking in a similar fashion.”
  • “Included in this delay is the full commercial launch of the lisdexamphetamine…volumes were well in excess of all of our other products combined…not included in the December financials but…delivered in first week of January.”
  • “Our 34,000 square foot…packaging expansion…approval is done…It’s going to more than double our packaging capacity, which was our bottleneck up until now.”
  • “Elite is heading for another record year. I am certain that we will skip the 60s and comfortably hit the 70s range in revenues.”
  • “We will launch [Oxy/APAP] probably by April — no later than April.”
  • “We have always targeted merger acquisition and/or NASDAQ…now is the right time…We cannot go to NASDAQ without a reverse split…The time is very near.”

Q&A Highlights

  • Vyvanse launch/quotas: Management emphasized deliberate quota pacing to avoid failure-to-supply; requested more quota but API allocation constraints limit pace; strategy is to smooth monthly deliveries .
  • Oxy/APAP timing: Reprioritized behind Vyvanse; targeted launch by or before April 2025 .
  • Opioid regulatory costs: Significant state-by-state fees and penalties complicate economics and launch decisions; team managing to remain in the green .
  • Packaging capacity: New facility approval allows throughput expansion; third line can be added quickly; addresses prior bottleneck .
  • Corporate strategy: M&A/uplisting path is active; reverse split likely necessary for NASDAQ; timeline pulled forward from prior references .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 FY2025 revenue and EPS was unavailable at the time of this analysis; therefore, no “vs. estimates” comparison could be made.
  • Implication: Sell-side models are likely to adjust upward for Q4 FY2025 to reflect January/February strength and additive Vyvanse contribution (which largely missed Q3 revenue recognition) .

Key Takeaways for Investors

  • Q3 was a timing-driven air pocket; January/February run-rate suggests a strong Q4 exit with Vyvanse ramping and delayed shipments recognized, supporting FY25’s “$70M+” revenue target .
  • Underlying operations are healthy (positive operating income; 43% GM) despite a non-cash derivative revaluation that obscures GAAP earnings; focus on operating trends vs. warrant liability swings .
  • ADHD franchise expansion (Vyvanse + Adderall) and near-term launches (Oxy/APAP by/before April; Methadone after) should diversify and lift revenue in CY2025, with quotas the key gating factor .
  • Capacity unlock from the 144 Ludlow approval reduces bottlenecks and shifts overhead into COGS, enabling better cost absorption as volumes scale .
  • Balance sheet trends are constructive: inventory build reflects staged shipments; working capital up to $33.4M; minimal long-term cash debt; internally funded launches .
  • Strategic optionality: management is actively pursuing M&A/uplisting; any credible transaction or uplist plan is a potential catalyst (while recognizing reverse split optics) .
  • Near-term trading setup: Watch for April Oxy/APAP launch confirmation and evidence that January/February run-rate translates into Q4 revenue/OP profit acceleration; these are likely stock-moving events .

Sources:

  • Q3 FY2025 8-K press release and 10-Q .
  • Q3 FY2025 earnings call transcript .
  • Prior quarters: Q1 FY2025 10-Q and Q2 FY2025 10-Q and 8-K .
  • Product launch 8-Ks: Methotrexate (Aug 27, 2024), Codeine/APAP (Oct 7, 2024), Hydro/APAP (Dec 2, 2024), Vyvanse approval/launch (Nov 18/Dec 26, 2024) .