Elite Pharmaceuticals, Inc. ELTP reported breakeven earnings per share in the first quarter of fiscal 2025, flat year over year.
Revenues in Detail
Elite Pharmaceuticals registered revenues of $18.8 million in the fiscal first quarter, up 109.4% year over year.
The revenue uptick primarily resulted from the Elite label products achieving greater sales after 15 months of their launch compared with the prior-year quarter, being the period in which the Elite label was initially launched.
Segment Details
Elite Pharmaceuticals derives revenues from two segments — Manufacturing fees and Licensing fees.
For the quarter under review, revenues from Manufacturing fees were $18.4 million, up 133.2% from the year-ago quarter. This primarily resulted from the strength of Elite label products.
Revenues from Licensing fees during the fiscal first quarter were $0.4 million, down 66.5% year over year. The decrease was primarily due to the company’s transitioning away from licensing products to third parties to marketing of the Elite label, which does not result in license fee revenues.
Elite Pharmaceuticals Inc. Price, Consensus and EPS Surprise
Elite Pharmaceuticals Inc. price-consensus-eps-surprise-chart | Elite Pharmaceuticals Inc. Quote
Elite Pharmaceuticals Gross Margin
In the quarter under review, Elite Pharmaceuticals’ gross profit surged 78.4% year over year to $8.5 million. The gross margin contracted 783 basis points (bps) to 45.1%.
Adjusted Operating Expenses Analysis
Research and development expenses went up 89.2% year over year to $2.2 million, while general and administrative expenses increased 18.6% year over year to $1.9 million. Total adjusted operating expenses of $4.1 million increased 47.3% year over year.
Profitability
Adjusted operating profit totaled $4.3 million, which rose 123.2% from the prior-year quarter. The adjusted operating margin in the fiscal first quarter expanded 143 bps to 23.1%.
In the fiscal first quarter, Elite Pharmaceuticals’ net income was $0.6 million, down 46.1% from the year-ago quarter.
Liquidity & Debt Management
Elite Pharmaceuticals exited first-quarter fiscal 2025 with cash of $8.4 million compared with $7.1 million at the fiscal 2024-end.
Net cash provided by operating activities at the end of first-quarter fiscal 2025 was $3.1 million against net cash used in operating activities of $2.7 million a year ago.
Our Take
Elite Pharmaceuticals exited the first quarter of fiscal 2025 with encouraging top-line results and solid revenues from Manufacturing fees. Robust adoption of the Elite label products raises our optimism. The expansion of the adjusted operating margin in the fiscal first quarter bodes well.
However, lower revenues from Licensing fees were discouraging. During the reported quarter, the gross margin contracted, which did not bode well.
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