Executive Summary
Elite Pharmaceuticals reported a strong QQ1 2025 performance driven by the continued ramp of the Elite label and a robust pipeline. Revenue reached $18.80 million, up 109% year over year, with gross profit of $8.47 million (gross margin ~45.1%) and operating income of $3.86 million (operating margin ~20.6%). Net income was modest at $0.62 million, and EBITDA stood at $1.66 million with an EBITDA margin of ~8.8%. The company generated positive operating cash flow of $3.14 million and free cash flow of $1.47 million, marking a clear shift from the prior-year launch period when the Elite label incurred cash burn. Management attributes the top-line strength to the Elite label’s market position and a growing pipeline, including the approval of Methotrexate and the addition of three approved ANDAs (oxy/APAP, hydro/APAP, methadone). In addition, Elite expanded capacity with a 34,000 sq ft facility and advanced its regulatory roadmap (PDUFA in November; DEA timing; FDA inspections), positioning the company for multiple launches over the next several quarters. On the flip side, revenue concentration (two customers comprising about 75% of revenue) and regulatory/ IP risk in a highly controlled substance heavy portfolio remain key watch points. Overall, the trajectory remains positive, with a strong foundation to support accelerated growth, potential M&A activity, and a possible NASDAQ transition if execution continues.
Key Performance Indicators
QoQ: -81.49% | YoY:-46.07%
QoQ: -81.82% | YoY:-45.45%
Key Insights
Revenue: $18.80M; YoY +109.39%, QoQ +4.76%. Gross Profit: $8.47M; YoY +78.40%, QoQ +9.53%; Gross Margin ~45.07%. Operating Income: $3.86M; YoY +141.20%, QoQ +3.63%; Operating Margin ~20.55%. Net Income: $0.62M; YoY -46.07%, QoQ -81.49%; Net Margin ~3.27%. EBITDA: $1.66M; EBITDA Margin ~8.81%. EPS (Diluted): $0.0006; YoY -45.45%, QoQ -81.82%. Cash Flow: Net cash from operating activities ~$3.14M; Free Cash Flow ~$1.47M. Cash at end of period: $8.41M; Working capital: $29.11M. Leverage: Total debt...
Financial Highlights
Revenue: $18.80M; YoY +109.39%, QoQ +4.76%. Gross Profit: $8.47M; YoY +78.40%, QoQ +9.53%; Gross Margin ~45.07%. Operating Income: $3.86M; YoY +141.20%, QoQ +3.63%; Operating Margin ~20.55%. Net Income: $0.62M; YoY -46.07%, QoQ -81.49%; Net Margin ~3.27%. EBITDA: $1.66M; EBITDA Margin ~8.81%. EPS (Diluted): $0.0006; YoY -45.45%, QoQ -81.82%. Cash Flow: Net cash from operating activities ~$3.14M; Free Cash Flow ~$1.47M. Cash at end of period: $8.41M; Working capital: $29.11M. Leverage: Total debt $11.66M; Net debt $3.26M; Interest Coverage ~15.4x. Liquidity: Current ratio 3.08; Quick ratio 2.09. Valuation (as of 6/30/2024): P/S ~11.36x; P/B ~3.67x; P/E ~86.70x; EV/Sales ~130.82x. Note: four-quarter horizon shows a clear revenue trajectory as Elite label scales, with healthier cash conversion and a still-growing working capital base due to inventory and receivables expansion.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
18.80M |
109.39% |
4.76% |
| Gross Profit |
8.47M |
78.40% |
9.53% |
| Operating Income |
3.86M |
141.20% |
3.63% |
| Net Income |
615.77K |
-46.07% |
-81.49% |
| EPS |
0.00 |
-45.45% |
-81.82% |
Key Financial Ratios
operatingProfitMargin
20.6%
operatingCashFlowPerShare
$0
Management Commentary
Market/Strategy: The Elite label has extended its five-quarter runway, underpinning the revenue growth and profitability trajectory. Management emphasizes that the pipeline provides continued thrust to sustain momentum beyond a launch phase. Operations: The company completed the FDA-inspected new facility expansion (34,000 sq ft) with packaging line readiness and stability testing in progress; expects DEA approval within ~6 weeks and FDA filing by November, followed by potential FDA approval. Commercial execution: Direct sales via the Elite label, plus licensed products (Prasco and Precision Dose) continue to contribute, with Amphetamine IR/ER driving the majority of Elite label revenue and strong demand across other niche products. Regulatory/R&D: Three ANDAs approved this quarter (oxy/APAP, hydro/APAP, methadone), Methotrexate approval, and ongoing CMS DMF discussions with a PDUFA date in November; REMS obligations for opioid products add ongoing compliance costs. Financials: The narrative stresses a swing from 2023’s launch burn to 2024–2025’s positive cash flow, with receivables and inventories still growing as growth continues. Risks discussed include the patent/IP landscape around higher-profile opioids (e.g., OxyContin), potential launch delays, and concentration risk with two customers comprising ~75% of revenue.
We expect to launch at least three products within the coming four months.
— Nasrat Hakim
This puts Elite in a strong position for an M&A or a move to NASDAQ when the time is right.
— Nasrat Hakim
Forward Guidance
Near-term milestones include the launch of Methotrexate (already approved) and at least three additional Elite label products within the next four months (APAP with Codeine, Oxy/APAP, Hydro/APAP, and Methadone spacing to accommodate manufacturing, shelf stability, and regulatory clearances). The CMS DMF review has been extended by one month for DMF supplier-related issues, with a PDUFA date in November; management expects a decision that would enable launch timing adjustments. The company expects the new facility to provide manufacturing capacity for at least five years, with ongoing improvements in packaging and warehousing. From a financial perspective, Elite aims to sustain positive operating cash flow while financing working capital needs from expanding sales; potential debt capacity or equity financing remains an option if required to fund working capital during rapid scale-up. Key factors for investors to monitor include milestone approvals, launch execution cadence, working capital management (inventory/receivables/chargebacks), regulatory outcomes (DEA/FDA), and progression toward a NASDAQ listing or strategic M&A activity as growth validates scale.