Elite Pharms Inc

Dianne Will, Christopher Dick, George Kenneth Smith Dianne Will, Christopher Dick, George Kenneth Smith Forward-looking statements are made pursuant to the safe harbor provisions of the federal securities laws and represent management's current expectations. Actual results may differ materially. Elite disclaims any obligation to update or revise its forward-looking statements except as required by law. More complete information regarding forward-looking statements, risks, and uncertainties can be found on Reports Elite files with the SEC, which is available on the Elite's website at ElitePharma.com. Thank you, Matthew, and good morning, ladies and gentlemen, and thank you for joining us today. This is Elite's earnings call, our CFO Carter Ward.

will give us the financial update, after which I'll come back with a brief update and answer some of the questions that you've submitted to Dianne. Mr. Ward, you have the floor.

Thank you, Nasrat. Good morning, everybody. Thank you for calling in yesterday. We filed our 10-Q. That's our quarterly report. It's for the quarter ended June 30th, 2026. We're on the March 31st fiscal year, so the June quarter is our first quarter of the fiscal 2027. It's available on our website, EliteFarmer.com, under the Investor Relations section. If you haven't seen it yet, please go there, take a copy. As always, I'm going to provide some context, some color to the financial statements and answer any finance questions we received. Received a lot of questions this time. Thank you very, very much. I really appreciate everybody taking the time to ask the questions and paying attention. Nice to know people are out there. Let me start with the area. I'm going to start with the area that I received the most questions on. Many questions on revenues and operating profit. I'm not going to go to each specific question because they're all pretty much similar. Revenues for the quarter. were 32.4 million and operating profits were 7.5 million. Both in line with the previous three quarters, both solid and steady. The questions I received, however, they were not related to this solid performance, but rather the change as compared to the June 2025 quarter, which is our 10Q presents them, comparison of the quarter-on-quarter changes. The June 2025 quarter was elites Best quarter ever so far. Got a lot of questions on the top line revenue decrease and what we're doing to increase the top line in the future. Got questions on COGS and margins, and I'll address all of them. Let's start by looking at the June 2025 quarter and how it compares to all of the quarters that followed. It's really a textbook example of how the generic market works. Thank you very much. We captured a decent market share and at attractive prices. Most importantly, the Lizdex market was a generic market in its initial stage, and that is the key. Also key is that the generic market is defined by competition. We weren't the only company launching into the Lizdex market. There were more than 10 companies doing the same as Elite at that time, maybe even more than 15. So you put that in the mix, that type of competition, and you have a fluid market at that point in time with competition increasing. As competition increases, prices decrease. Over time, the weaker, more inefficient companies can't make it. At the lower prices, they drop out, and eventually the market stabilizes and an equilibrium is reached. And that's what happened during June July 2025 time period. Elite came out of that correction with an impact market share actually trending up with stable prices, volumes, and stable operations. Prices were lower than the initial market phase but still solid, and Elite is now established as a reliable supplier of choice for generic buybacks. Just as we are the same for generic adderall and have been for years. So count Vyvanse in that category as well now. You need to keep all this in mind when asking about, when the question is asked about comparing June 2026 to June 2025. In June 2025, the market was higher, hadn't reached the equilibrium that it has now. June 2026, we're at the steady state. In fact, we've been in a steady market state for the last four quarters now, approximately. Q3 through Q4 of last year, and this year, Q1. So the results over that time period, those four quarters, they've been pretty steady and solid. Prices are lower than the initial market phase, but the volumes are trending up. Talking about volumes, volumes are our main driver of talks. We get a lot of cost of goods sold. Got a lot of questions overnight on Cost of Goods Sold. And just so you know, there's a positive correlation between the two. More volume, more COGS. But also, with respect to COGS, there's also a different mix this year as compared to last year. It's not just Lizdex in the COGS. Most notable would be Naltrexone, which we weren't selling last year, but we are selling this year and selling quite a bit of it. Naltrexone's an expensive product. I hope that answers the questions on 2026 versus 2025. But there's more going on here than just how a product launch works and what happens. In that regard, I got some questions on what's the next steps? What are we doing to grow revenues in the future? To answer that, Let's look back over the past few years because I always like to say that looking at the past can give you some insight into the future. So let's go back to the beginning of this decade, early 2020s. It was Zola Root Label, and back then we sold Private Label, Phentamine, Naltrexone, a few other products. Then we launched the Private Label Generic Adderall. That took us to another level. Revenues were around in the low 30, 30 millions or so. This is annual revenues. If you notice, we're above that for quarterly revenue now. But we launched a generic private label Adderall. Revenues reached 30 million. Then we launched the elite label in 2023. And that brought us up several levels. And the revenues crossed the 80 million mark. Thank you very much. Vivance, all these products were pipeline products at one time. It's a pipeline that brought us to where we are today. It's also the pipeline that will continue to grow Elite's revenues and our profits. As always, Nasrat's going to talk more about the pipeline, but from a finance perspective, we continue to fund product development, and our business model remains the same as it was for the past product launches. We've grown Elite. by using a robust pipeline that we keep filled and we keep it moving. There's velocity through our pipeline. We're going to continue doing that, and that will grow revenues and profits in the future. I hope that answers those questions. Before moving on, one last question I received on revenues, and it comes from the revenue concentration footnote. The question was, elite's biggest customer Customer Now accounts for 60% of revenues versus 51% last year. Are overall revenues down because this customer is requiring price concessions? Do they control so much of the market that Elite cannot diversify away from them? The generic market is highly concentrated in a few large wholesalers. That's true for everybody, not just for Elite. We all have to deal with them. But the reductions in price, the stabilization of the correction in prices, especially in the LISDACs, it's not a result of customer concentration, but rather it's the overall interaction of supply, demand, competition, the traditional market concepts, the economics that drive prices in the generic market and in pretty much any market. So that's the real explanation for price fluctuations and that. Not really customer concentration. Moving down to P&L, we have research and development. R&D expense was $2 million this year for the quarter compared to $1.7 million last year's June 2025 quarter. That's the pipeline development I just spoke of. We did have quite an eventful quarter for R&D. During this quarter, we launched methadone during this quarter, and just after the quarter, we launched Grapinerol. We filed an NDA and ANDA during this quarter. We had a successful pivotal bio study, which is quite a big deal. So all of that in this quarter itself. Once again, pipeline is the lifeblood and we're very healthy when it comes to that area of the company.