Impax Laboratories Inc. (NASDAQ:IPXL) Shares Get New Life with CEO Announcement

Impax Laboratories Inc. (NASDAQ:IPXL)

Today The Board of Impax Laboratories Inc. (NASDAQ:IPXL) made a move in response to disappoint 2016 financial results and earnings downgrades by appointing a new CEO. IPXL shares responded strongly. On Friday IPXL shares closed at $9.25 and news, on Monday, of the appointment sent IPXL shares gapping up to open at $10.50 before hitting an inter-day high of $13. Thirty minutes before the close of regular trading IXPL shares are still trading near their daily high at $12.37. Volumes are large – over seven times their normal daily trading average.

 

On March 22, reports placed the number of downwards earnings revisions at six. In the past 45 days the consensus earnings figure for FY 2017 went from $1.37 to $0.76. Alongside the downward revisions came poor share performance. Over the last month Impax Laboratories Inc. (NASDAQ:IPXL) shares are down over 35% and down over 30% YTD.

Today news came out that former Actavis Specialty Pharmaceuticals executive Paul Bisaro will replace interim CEO Kevin Buchi. Mr. Bisaro will be tasked with turning around Impax Laboratories Inc. (NASDAQ:IPXL) that reported poor financial results on March 1st when it released its Q4 2016 and full year earnings report. Total revenues came in at $824.4 million versus the 2015 figure of $860.5 million – a drop of 4.2%. On a GAAP basis, the EPS loss was -$6.63 versus a, EPS profit of $0.54. Adjusted EPS for 2016 were $1.16 versus a 2015 figure of $1.45. Sales were also negatively affected. In 2015 Impax Laboratories Inc. (NASDAQ:IPXL) reported sales of $699.8 million but in 2016 sales came in at just $591.7 million.

The losses mainly stemmed from the generic business of Impax Laboratories Inc. (NASDAQ:IPXL). Its revenues declined over 14%. However, Impax Laboratories Inc. (NASDAQ:IPXL) also has a specialty pharmaceutical business line. That segment of the business increased revenues 45.9% to $218 million.

The generics division is experiencing so much volatility, due to competition and pricing pressures, that management, in its 2017 guidance, declined to provide details for total revenues.

Despite the recent spate of earnings downgrades, analyst opinion on Impax Laboratories Inc. (NASDAQ:IPXL) appears mixed. Prior to today’s announcement of new leadership. Two firms rated IPXL as a “Strong Buy” six rated IPXL shares as a “Hold”, and one rated the shares a “Sell”.

3/27/2017
Ticker Symbol IPXL
Last Price a/o 3:36 PM EST  $                    12.68
Average Volume                1,720,000
Market Cap (mlns)  $                  678.49
Sales (mlns) $824.40
Shares Outstanding (mlns) 73.35
Share Float (mlns) 69.38
Shortable Yes
Optionable Yes
Inside Ownership 0.70%
Short Float 5.05%
Short Interest Ratio 3.04
Quarterly Return -32.73%
YTD Return -30.19%
Year Return -71.29%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

 

Author: Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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