Akorn Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. Consolidated revenue for the third quarter 2009 was $19.4 million, versus $31.9 million in the third quarter 2008 representing a decrease of approximately 39%. The decrease was due to lower sales of tetanus-diphtheria and flu vaccines and overall lower sales to wholesalers as part of an effort to reduce wholesaler inventory levels. The Company's net loss was $5.1 million or $0.06 per basic and diluted share in the third quarter 2009 compared to a net profit of $2.4 million or $0.03 per basic and diluted share in the third quarter 2008. This reflects the revenue and gross profit decreases and a $1.1 million charge for the change in the fair value of warrants issued in conjunction with the Company's renegotiated revolving line of credit and subordinated debt, offset by a $1.0 million decrease in selling, general and administrative expense compared to the prior year period resulting from targeted cost reductions. Adjusted EBITDA for third quarter 2009 was a negative $1.6 million compared with a positive $4.4 million Adjusted EBITDA in the prior year period. The company reported loss before income tax of $5.101 million and loss from operations of $3.835 million compared to income before income tax of $2.401 million and income from operations of $2.225 million for the same period of last year. The company reported net cash used in operating activities of $0.737 million and payments for property, plant and equipment of $0.280 million compared to net cash used in operating activities of $1.243 million and payments for property, plant and equipment of $1.322 million for the same period of last year. The company reported EBITDA loss of $3.390 million compared to EBITDA of $3.822 million for the same period of last year. For the nine months, the company reported net loss of $22.742 million or $0.25 per basic and diluted share on revenues of $57.711 million compared to net loss of $5.962 million or $0.07 per basic and diluted share on revenues of $67.562 million for the same period of last year. The company reported loss before income tax of $22.740 million and loss from operations of $19.146 million compared to loss before income tax of $5.959 million and loss from operations of $5.560 million for the same period of last year. The company reported net cash used in operating activities of $5.349 million and payments for property, plant and equipment of $0.922 million compared to net cash used in operating activities of $14.295 million and payments for property, plant and equipment of $2.742 million for the same period of last year. The company reported EBITDA loss of $17.527 million and adjusted EBITDA loss of $6.752 million compared to EBITDA loss of $2.032 million and adjusted EBITDA of $0.211 million for the same period of last year. The company announced the launch of the generic version of Acular(R) (Ketorolac Tromethamine Ophthalmic), a drug with estimated brand sales of $119 million in 2008. In addition, the company launched Hydralazine Hydrochloride, an existing generic, with estimated sales of $23 million in 2008.

Akorn Inc., Q3 2009 Earnings Call, Nov 10 2009

On August 17, 2009, Akorn Inc. entered into an amended and restated credit agreement by and among the company, Akorn (New Jersey) Inc., a wholly owned subsidiary of the Company, the lenders from time to time party thereto and EJ Funds, LP, assignee of General Electric Capital Corporation, which replaces and supersedes the prior credit agreement among the above mentioned parties. The Amended and Restated Credit Agreement increased the borrowing availability from $5,650,000 to $10,000,000 and revised the interest payable under the agreement to 10% fixed per annum, eliminating the prime rate and LIBOR options. The Amended and Restated Credit Agreement is secured by the assets of the Company and is not subject to debt covenants until April 1, 2010. In addition, on August 17, 2009, the Company entered into an Amended and Restated Subordinated Note in favor of The John N. Kapoor Trust dated September 20, 1989, which replaces and supersedes the prior subordinated note which had matured and not been paid off on July 28, 2009. Pursuant to the Amended and Restated Subordinated Note, the Company refinanced its $5,000,000 subordinated debt payable to the Kapoor Trust. The principal amount of $5,000,000 has been increased to $5,853,267 to include all accrued but unpaid interest owing under the prior subordinated note through August 16, 2009 and the annual interest rate of 15% remained unchanged. The Amended and Restated Subordinated Note is due and payable on August 17, 2014.