Palm Beach, FL 2/15/12 (StreetBeat) -- Elite Pharmaceuticals, Inc. (OTCBB:ELTP), a specialty pharmaceutical company dedicated to developing and commercializing generic and branded oral controlled release products announced results for the fiscal third quarter ended December 31, 2011.Consolidated revenues for the quarter ended December 31, 2011 increased by 86% as compared with revenues from the prior quarter ending September 31, 2011. This increase is the result of the continued growth of the phentermine product launched earlier this year and the launch of the Lodrane D(R) products during this quarter. The company achieved a 117% increase in manufacturing revenues and a 234% increase in contract product development fees, but offset by an 80% decrease in royalty revenues which resulted from the removal of the extended release Lodrane products from the market in August 2011. Loss from operations decreased to $430k this quarter from a loss of $592k the previous quarter.
On a year to date basis, consolidated revenues through the first 3 fiscal quarters decreased by 42%, from $3.1 million last year to $1.8 million for the first nine months of this fiscal year. Revenue streams, while expanding, have not yet offset the revenues earned last year from the extended release Lodrane(R) products discontinued at the beginning of this fiscal year. The loss of this revenue stream has been the primary factor in the increased operating losses sustained by Elite this year. Last year, Elite achieved an operating profit of $72k for the 3rd quarter, and a nine month operating loss of $155k. This year, Elite's operating losses for the 3rd quarter and nine months were $430k and $1.4million, respectively.
Elite expects revenues from the products launched this year to continue to grow and its contract product development activities to continue at current levels. Elite anticipates an expansion in revenues from the contract manufacture of generic methadone, first shipped in January 2012, and from the launch of Elite's recently approved Hydromorphone product.
GAAP net income, including non-cash revenues and expenses relating to the accounting treatment of preferred share derivatives and the fair value of warrant derivatives, was $8.8 million, or $0.03 basic net income per share and $0.02 fully diluted net income per share.
Cash flow from operations for the first nine months of fiscal 2012 was a negative $789k, compared to a positive operating cash flow of $318k for the comparable period last year. Net cash flow for the first nine months, inclusive of cash used in investing and financing activities, was a negative $1.3million. Cash as of December 31, 2011 was $569k.
Chairman & CEO Jerry Treppel states that "our business and strategic plans as we discussed in our prior earnings calls are proceeding as expected. Our revenues from our newly launched products will continue to grow aided by the launch of additional new products. Beginning to utilize our new manufacturing space, increased batch size production, and start up of our packaging line, should all increase profitability in the coming quarters. It remains our corporate goal to achieve positive cash flow on an operating basis as soon as practicable. Additionally, we are working diligently to complete the Socius capital raise transaction so we can aggressively pursue our R&D objectives."
The Company will host a conference call to discuss the results of operations and provide an update on recent business developments on Wednesday, February 15, 2011 at 2:00 PM EST. Company executives will also conduct a question and answer session following their remarks.
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