I was trying to reevaluate my long position last night so I decided to comb through Q2 financials again. Impairment aside, the company lost 8M. During the same Q, there was a one time legal expense of 13M and of course 3.5M for the dividend. Assuming revenues stay flat, and no one time expenses, that nets 8.5M profit all things equal. Not sure what the legal fees for dealing with all these future lawsuits is gonna cost.
Now, the paragraph below taken from Q2 2015, implies Donnatal revenue was at most (52.9 - 38.7) = 14.2M. That's asuming Zonegran revenue equaled the revenue declines mentioned. Q2 2016 saw Donnatal sales decline 33% which implies that for Q2 2016, Donnatal accounted for at most, 9.5M revenue. Applying the 77% gross margin, that translates to 7.3M proft generated in Q2 by Donnatal. So even if Donnatal sales were to decline, say 20% q over q, that would allow the company to put 7M in the bank.
Legacy Pharmaceuticals Division revenue for the three months ended June 30, 2015 was $72.4 million, compared to $19.5 million in the same quarter of the prior year, an increase of $52.9 million. The addition of the Portfolio acquired from Covis on April 21, 2015 drove an increase in revenue of approximately $38.7 million. The remainder of the increase over the prior year is driven by the addition of Donnatal® and Zonegran®, partially offset by revenue declines in Kapvay®, Orapred® and Ulesfia®. The second quarter of 2014 included a half quarter of Donnatal® revenue. Zonegran® was acquired at the end of the third quarter of 2014.
Now there are obvsiously a host of problems with Concordia and the only reason I even got trapped in this garbage is becasue I was making a killing selling call options for $1.50 a piece, beieving I could continue to do that if the shares dropped but then the premiums disappeared. I just dont see how they can go flat out broke though, for at least several quarters given their cash and cash equivalents of about 300M, and their revolver.