A. J. Kazimi - Chief Executive Officer Marty Cearnal - Chief Commercial Officer Rick Greene - Chief Financial Officer Elizabeth Davis - Corporate Relations.

Analysts:.

Good day ladies and gentlemen and welcome to the Cumberland Pharmaceuticals 2014 Second Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Later we’ll have a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this call is being recorded.

I would now like to turn the call over to Elizabeth Davis, Corporate Relations. The floor is yours..

Hello, everyone. Before we begin I’d like to point out that the company issued a press release containing financial results for the second quarter ended June 30, 2014. The release including the financial table is available on the company’s website at www.cumberlandpharma.com. Before we begin, allow me to read the following Safe Harbor Statement.

This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these statements reflect the company’s current views, expectations, and beliefs concerning future events, these forward-looking statements involve risks and uncertainties.

Investors should note that many factors as more fully described under the caption Risk Factors in our Form 10-K, Form 10-Q and Form 8-K filings with the SEC could affect the company’s future financial results and could differ materially from those expressed in forward-looking statements contained in the company’s annual report on Form 10-K or other SEC filings or other public statements.

The forward-looking statements are qualified by these risk factors. The company assumes no obligation to publically update any forward-looking statement, whether as a result of new information, future developments or otherwise. Also, please note that this conference call is being webcast through our website and will be available there.

I’ll now turn the call over to our Chief Executive Officer, A. J. Kazimi to begin our discussion of the company’s quarterly performance..

Thanks Elizabeth. Good afternoon everyone and thank you for joining us as we review our second quarter 2014 results. With me on today’s call are Cumberland’s Chief Commercial Officer, Marty Cearnal, and our Chief Financial Officer, Rick Greene.

We’ll start by reviewing our recent developments and then provide an update on our products, followed by a discussion of our financial performance and key highlights for the quarter. We’ll then conclude with a review of Cumberland’s strategy and plans before opening the call to any questions. So let’s begin.

We are very pleased to report a successful second quarter, which is built on the positive momentum generated in the first quarter of this year. Each of our five FDA approved products showed sequential improvement from Q1, with the newest brands added to our portfolio delivering the contributions we had planned.

During the second quarter, we launched our newest product Vaprisol through a national meeting of our hospital sales division. That followed the launch of Omeclamox-Pak by our field sales team in January. These two new products have diversified our business and contributed to our swift return to profitability in 2014.

Net income during the second quarter increased $1.4 million from the prior year period. Our five marketed products delivered $9.8 million in net revenue during the second quarter and our financial position remains strong with nearly $54 million in cash and investments and no debt at the end of June 2014.

We also had nearly $43 million of tax net loss carry forwards available at the end of June, resulting from the prior exercise of stock options. During the second quarter we also established a new line of credit with SunTrust Bank, which provides us with up to $20 million of borrowing capacity.

We were pleased to expand our relationship with SunTrust and extend our access to this important source of capital. Meanwhile, we believe our shares represent a valuable investment and continued our repurchases during the quarter, and we’ve now repurchased over 3.8 million shares through this program since its inception.

In May, we announced that our Chinese partner Gloria Pharmaceutical joined us in a new research and development initiative. Each company made a $1 million cash investment into Cumberland Emerging Technologies or CET, which partners with academic research centers to develop promising bio-pharmaceutical technologies.

These new funds will be used to expand and accelerate development of CET’s pipeline of new product candidate. We believe CET represents a unique partnership among academia, government and industry and we are delighted to welcome Gloria as our international partner and fourth constituent to CET.

Based on these new arrangements, Gloria will have the first opportunity to negotiate a license to CET products for China and Cumberland will retain access to CET product rights for the rest of the world. Gloria is a leading provider of pharmaceutical products to China’s hospitals.

Cumberland and Gloria had previously entered into an exclusive licensing agreement to bring our Caldolor and Acetadote products to hospitals and patients in China. I’d now like to ask Marty Cearnal, our Chief Commercial Officer, to provide an update on our marketed products. Marty..

omeprazole, amoxicillin, and clarithromycin for the treatment of H. pylori infection and related ulcer disease. As you may know, many stomach ulcers are caused by an infection from the bacteria Helicobacter pylori or H. pylori, which colonize in the stomach and duodenum.

When present this bacterial infection has been proven to be the cause of over 90% of duodenal ulcers. These ulcers commonly cause abdominal pain and may lead to serious bleeding. We’ve seen a positive response from the gastroenterology market with prescriptions up 36% in the first several months since our launch of the product in early 2014.

We also introduced a new marketing strategy for Kristalose in January and have continued to see the resulting benefits. The new strategy allows us to provide increased support to patients through an enhanced coupon program for the product, with monthly redemptions continuing to increase.

Based on the resulting sales growth, Kristalose has now become our largest selling product. On to Acetadote, where we continue to feature the EDTA free message at all levels in the product’s distribution and promotion, we're maintaining sales promotional coverage at key medical facilities and poison control centers.

Our goal has been to maintain significant market share and we have done just that. We also continue to actively support Caldolor and are very excited about the prospects for this brand. The growth in Caldolor sales slowed in the first quarter due to severe winter weather and shortages of saline needed to reconstitute the product.

The product sales began to rebound in the second quarter with hospital pull-through purchases achieving record levels in May. Our hospital sales organization continues to focus on increasing use of the product in key medical centers across the country where Caldolor is on formulary and stocked.

A series of new Caldolor studies is scheduled for presentation in October. These studies include an investigator initiated laparoscopic cholecystectomy study from the University of Medicine and Dentistry of New Jersey, Rutgers Medical Center and New York Methodist Hospital, which will be presented at the American Society of Anesthesiology Meeting.

Also, a study entitled a Multi-Center, Randomized, Open-Label, Parallel, Active-Comparator trial to determine efficacy and safety of intravenous ibuprofen in pediatric patients will be presented at the American Academy of Pediatrics Meeting.

That completes the update on our marketed brands and I’ll turn it over to our Chief Financial Officer, Rick Greene for the financial review..

Thank you, Marty. For the three months ended June 30, 2014 net revenues were $9.8 million. Net revenues by product were $3.6 million for Kristalose; $3.1 million for Acetadote, including $1.8 million of our authorized generic; $1.3 million for Omeclamox-Pak; $1.1 million for Vaprisol; and $0.6 million for Caldolor.

Net revenues for the six months ended June 30, 2014 were $17.8 million compared to $17.3 million for the prior year period. Total operating expenses for the second quarter were $8.5 million compared to $8.2 million for the prior year period. Operating expenses for the first half of 2014 were $16.2 million compared to $17.2 million in 2013.

The decrease in operating expenses continues to be a result of our efforts to manage expenses in line with revenues. Net income for the quarter was $0.7 million compared to a loss of $0.6 million for the prior year period. Net income for the six months ended June 30, 2014 was $1 million compared to $0.2 million in 2013.

Diluted earnings per share for the second quarter were $0.04 up from a loss of $0.03 per share in the second quarter of 2013. For the six months period, diluted earnings per share were $0.06 compared to $0.01 in 2013. Cash flow from operations for the six months ended June 30, 2014 was $1.8 million, similar to the prior year period.

As of June 30, 2014 we had approximately $54 million in cash and securities, with approximately $39 million in cash and cash equivalents and $15 million in marketable securities. We had no debt and total assets were $93 million. With that, I’ll turn it back over to you A.J..

Thanks Rick. Before we move to take any questions, I’d like to share some closing thoughts. I was very pleased to see our momentum continuing in the second quarter and we are confident that our best days as a company are ahead of us.

Last year we faced our share of challenges and I’m pleased to say that our team responded with timely and effective solutions, which are already yielding results.

We took steps to reduce discretionary expenses and acquired rights to new products that have clear synergies with our medical focus, and as a result, we’ve swiftly returned to profitability and now have the most diversified revenue stream in our company’s history.

We are very optimistic about the opportunities that both Vaprisol and Omeclamox-Pak are bringing to Cumberland. We feel that both brands are additions that will allow us to continue to build momentum in our commercialization and our business development efforts.

We do remain very active on the business development front as we seek new commercial and late stage development assets that fit well with our organization. We’re working actively on multiple opportunities and will provide update as appropriate. Moreover, we are fortunate to own products with worldwide rights with untapped potential.

We are working to selectively expand and progress our international partnerships and do expect those arrangements to provide meaningful contributions to our business overtime. We will conclude the analysis, reports and publications for the completed Caldolor studies and update the comprehensive safety and efficacy data set for that product.

Once complied, we expect to then submit the new Caldolor data for expanded product labeling. Our lead development candidate Hepatoren is progressing through a Phase II study in patient suffering from life threatening liver and kidney failure. Our goal is to complete enrolment in that study this year.

We do believe our stock represents an attractive investment opportunity and will continue repurchasing shares with excess cash.

And finally, I’d like to acknowledge and thank our employees for the contributions that drove our success during the first half of this year and we remain focused on our mission of advancing patient care through delivery of high quality pharmaceutical products. So now, let’s open up the call if there are any questions you may have.

Operator, please proceed..

(Operator Instructions). And speakers, I’m not showing any questions in the queue at this time. I would like to turn the call back over for any closing remarks..

Okay. Well, thank you everyone for joining our call today. We do understand that many investors prefer a private discussion with the management regarding the quarter result and we remain prepared to host those calls.

We appreciate your time and interest in Cumberland and we look forward to providing you with another update after the end of the third quarter. Bye..

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Have a good day everyone..