- Q1'18 revenue of $543.9 million increased 23% as-reported, or 22% in constant currency from the prior-year period.
- Announced and closed the acquisition of Cook Pharmica, a privately held, biologics-focused contract development and manufacturing organization.
- Issued 8-year $450 million, 4.875% coupon, USD senior notes with proceeds used to fund the Cook Pharmica acquisition; concurrently re-priced and extended our term loans (USD tranche 50 bps and EUR tranche 75 bps lower).
- FY’18 guidance updated to reflect acquisition.
Catalent, Inc. (NYSE:CTLT), the leading global provider of advanced
delivery technologies and development solutions for drugs, biologics and
consumer health products, today announced financial results for the
first quarter of fiscal 2018, which ended September 30, 2017.
First quarter 2018 revenue of $543.9 million increased 23% as reported
and 22% in constant currency from $442.2 million reported in the first
quarter a year ago. All three of the Company’s reporting segments posted
double-digit constant-currency revenue growth for the first quarter when
compared to the first quarter of the prior year.
First quarter 2018 net earnings were $3.8 million, or $0.03 per diluted
share, compared to net earnings of $4.6 million, or $0.04 per diluted
share, in the first quarter a year ago.
First quarter 2018 EBITDA from continuing operations of $65.2 million,
as referenced in the GAAP to non-GAAP reconciliation provided later in
this release, increased 4% from $62.7 million in the first quarter a
year ago.
First quarter 2018 Adjusted EBITDA (see the non-GAAP reconciliation for
a discussion of this metric) was $90.9 million, or 16.7% of revenue,
compared to $75.0 million, or 17.0% of revenue, in the first quarter a
year ago. This represents an increase of 21% as reported and an increase
of 22% on a constant-currency basis.
First quarter 2018 Adjusted Net Income (see the non-GAAP reconciliation)
was $27.1 million, or $0.21 per diluted share, compared to Adjusted Net
Income of $19.6 million, or $0.16 per diluted share, in the first
quarter a year ago.
“We’re pleased with our performance during the first quarter, where we
recorded double-digit revenue growth on a constant-currency basis across
all three of our reporting segments,” said John Chiminski, Chairman,
President and Chief Executive Officer of Catalent, Inc. “The acquisition
of Cook Pharmica, which we closed on October 23rd, significantly
strengthens our position as a leader in biologics development and
manufacturing. Integration is currently underway, and the acquisition is
already beginning to create value for the company, our customers and our
shareholders.”
First Quarter 2018 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $219.7 million for the
first quarter of fiscal 2018, an increase of 18% as reported, or 16% in
constant currency, compared to the first quarter a year ago. The
constant-currency growth was primarily attributable to the February 2017
Accucaps acquisition, which contributed 14 percentage points to the
segment’s constant-currency revenue growth during the quarter. The
remaining growth was driven by increased end-market volume demand for
prescription products in Europe, but was partially offset by lower
end-market volume demand for consumer health and prescription products
in Asia Pacific, and a reduction in end-market volume demand for
consumer health products in Europe.
Revenue from the Drug Delivery Solutions segment was $225.8 million for
the first quarter of fiscal 2018, an increase of 18% as reported, or 17%
in constant currency, over the first quarter a year ago. The growth was
primarily driven by favorable end-customer demand for certain higher
margin offerings, primarily in our U.S. operations within our oral
delivery solutions platform, and increased volume from our biologics
offerings, partially offset by a decrease in product participation
revenue. The acquisition of Pharmatek, which closed in September 2016,
contributed 4 percentage points of the constant-currency growth in
segment revenue during the quarter.
Revenue from the Clinical Supply Services segment was $109.7 million for
the first quarter of fiscal 2018, an increase of 46% as reported and in
constant currency over the first quarter a year ago. This growth was due
to higher volume related to core storage, distribution, manufacturing,
and packaging services; as well as due to increased lower-margin
comparator sourcing activities.
Segment EBITDA Highlights
Softgel Technologies segment EBITDA (see the discussion of non-GAAP
measures below) in the first quarter of fiscal 2018 was $35.1 million,
an increase of 15% as reported and in constant currency, versus the
first quarter a year ago. The increase was driven by the acquisition of
Accucaps, which contributed 18 percentage points of the
constant-currency growth in the segment EBITDA during the quarter.
Excluding the acquisition, segment EBITDA declined by 3 percentage
points in constant currency, primarily related to decreased volume
related to our consumer health products in Asia Pacific and Europe and
an unfavorable shift in product mix in Europe.
Drug Delivery Solutions segment EBITDA in the first quarter of fiscal
2018 was $47.4 million, an increase of 13% as reported, or 12% in
constant currency. The increase was primarily driven by favorable
end-customer demand for certain higher margin offerings, primarily in
our U.S. operations within our oral delivery solutions platform, and
increased volume from our biologics offerings, partially offset by
operational inefficiencies with respect to products utilizing our
blow-fill-seal technology platform and a reduction in profit related to
product participation activities. The acquisition of Pharmatek
contributed 2 percentage points of the constant-currency growth in
segment EBITDA during the quarter.
Clinical Supply Services segment EBITDA in the first quarter of fiscal
2018 was $16.7 million, an increase of 59% as reported, or 58% in
constant currency. The increase was primarily attributable to higher
demand for our core storage, distribution, manufacturing and packaging
services, as well as improved capacity utilization across the network.
Increased volume related to lower-margin comparator sourcing activities
modestly contributed to the segment’s EBITDA growth.
Additional Financial Highlights
First quarter 2018 gross margin of 25.8% decreased 230 basis points
as-reported, from 28.1% in the first quarter a year ago. The decrease
was primarily attributable to unfavorable “same store” product mix
within the Softgel Technologies segment, the Accucaps acquisition, and a
decrease in product participation revenue within the Drug Delivery
Solutions segment.
First quarter 2018 selling, general and administrative expenses were
$107.0 million and represented 19.7% of revenue, compared to $98.2
million, or 22.2% of revenue, in the first quarter a year ago.
Backlog for the Clinical Supply Services segment, defined as estimated
future service revenues from work not yet completed under signed
contracts, was $333.2 million as of September 30, 2017, a 1% decrease
compared to the fourth quarter of fiscal year 2017. The segment also
recorded net new business wins of $99.4 million during the first
quarter, which represented an 8% increase year over year. The segment’s
trailing-twelve-month book-to-bill ratio was 1.1x.
Balance Sheet and Liquidity
As of September 30, 2017, Catalent had $2.1 billion in total debt, and
$1.5 billion in total debt net of cash and short-term investments, which
is in-line with the total debt, and below the net debt, as of June 30,
2017, due to the timing of the receipt of cash proceeds from Catalent’s
primary stock offering completed during the quarter in connection with
the Cook Pharmica acquisition. As of September 30, 2017, Catalent’s
total net leverage ratio was 3.2x, an improvement compared to the 4.0x
recorded in the prior quarter as a result of the aforementioned cash
proceeds from the stock offering. On a pro forma basis for the pending
acquisition of Cook Pharmica, Catalent’s total net leverage ratio as of
September 30, 2017 would have been 4.8x.
After the end of the quarter, on October 18, 2017, Catalent issued $450
million aggregate principal amount of 4.875% senior unsecured notes due
January 2026. The net proceeds of these notes were used, along with cash
on hand and the net proceeds of the stock offering, to fund the $750
million, subject to customary adjustments and a previous deposit, due at
the closing of the Cook Pharmica acquisition. The remaining portion of
the purchase price, $200 million, will be paid in four equal
installments over the first four anniversaries of the October 23 closing.
Concurrently, the Company completed an amendment to its senior secured
credit facilities to lower the interest rates on its U.S.
dollar-denominated and euro-denominated term loans and on its revolving
credit facility and extend their maturities. The new applicable rate for
U.S. dollar-denominated term loans is LIBOR (subject to a floor of
1.00%) plus 2.25%, which is 0.50% lower than the previous rate, and the
new applicable rate for euro-denominated term loans is LIBOR (subject to
a floor of 1.00%) plus 1.75%, which is 0.75% lower than the previous
rate. The new applicable rate for the revolving loans is initially LIBOR
plus 2.25%, which is 1.25% lower than the previous rate, and such rate
can additionally be reduced to LIBOR plus 2.00% in future periods based
on a leverage ratio. The term loans and revolving loans will now mature
in May 2024 and May 2022, respectively. The Third Amendment also
includes a prepayment of 1.0% in the event of another repricing event on
or before the six-month anniversary of the Third Amendment.
Fiscal Year 2018 Outlook
Management is updating its guidance, which will now reflect the recently
completed acquisition of Cook Pharmica, which closed on October 23,
2017. For fiscal year 2018, the company expects revenue in the range of
$2.31 billion to $2.41 billion. Catalent expects Adjusted EBITDA in the
range of $521 million to $547 million and Adjusted Net Income in the
range of $198 million to $224 million. The Company expects self-funded
capital expenditures in the range of $152 million to $165 million and
fully diluted share count in the range of 133 million to 135 million
shares on a weighted-average basis.
Earnings Webcast
The Company’s management will host a webcast to discuss the results at
8:15 a.m. ET today. Catalent invites all interested parties to listen to
the webcast, which will be accessible through Catalent’s website at
http://investor.catalent.com
.
A supplemental slide presentation will also be available in the
“Investors” section of Catalent’s website prior to the start of the
webcast. The webcast replay, along with the supplemental slides, will be
available for 90 days in the “Investors” section of Catalent’s website
at
www.catalent.com
.
About Catalent, Inc.
Catalent, Inc. (NYSE:CTLT) is the leading global provider of advanced
delivery technologies and development solutions for drugs, biologics and
consumer health products. With over 80 years serving the industry,
Catalent has proven expertise in bringing more customer products to
market faster, enhancing product performance and ensuring reliable
clinical and commercial product supply. Catalent employs over 11,000
people, including over 1,400 scientists, at more than 30 facilities
across 5 continents and in fiscal 2017 generated over $2 billion in
annual revenue. Catalent is headquartered in Somerset, N.J. For more
information, please visit
www.catalent.com
.
Non-GAAP Financial Measures
Use of EBITDA from continuing operations, Adjusted EBITDA, Adjusted
Net Income and Segment EBITDA
Management measures operating performance based on consolidated earnings
from continuing operations before interest expense, expense/(benefit)
for income taxes, and depreciation and amortization, and it is adjusted
for the income or loss attributable to non-controlling interest (“EBITDA
from continuing operations”). EBITDA from continuing operations is not
defined under U.S. GAAP and is not a measure of operating income,
operating performance or liquidity presented in accordance with U.S.
GAAP and is subject to important limitations.
The Company believes that the presentation of EBITDA from continuing
operations enhances an investor’s understanding of its financial
performance. The Company believes this measure is a useful financial
metric to assess its operating performance from period to period by
excluding certain items that it believes are not representative of its
core business and uses this measure for business planning purposes.
In addition, given the significant investments that Catalent has made in
the past in property, plant and equipment, depreciation and amortization
expenses represent a meaningful portion of its cost structure. The
Company believes that EBITDA from continuing operations will provide
investors with a useful tool for assessing the comparability between
periods of its ability to generate cash from operations sufficient to
pay taxes, to service debt and to undertake capital expenditures because
it eliminates depreciation and amortization expense. The Company
presents EBITDA from continuing operations in order to provide
supplemental information that it considers relevant for the readers of
the Consolidated Financial Statements, and such information is not meant
to replace or supersede U.S. GAAP measures. The Company’s definition of
EBITDA from continuing operations may not be the same as similarly
titled measures used by other companies.
Catalent evaluates the performance of its segments based on segment
earnings before non-controlling interest, other (income)/expense,
impairments, restructuring costs, interest expense, income tax
expense/(benefit), and depreciation and amortization (“segment EBITDA”).
Moreover, under the Company's credit agreement, its ability to engage in
certain activities, such as incurring certain additional indebtedness,
making certain investments and paying certain dividends, is tied to
ratios based on Adjusted EBITDA, which is not defined under U.S. GAAP
and is subject to important limitations. Adjusted EBITDA is the covenant
compliance measure used in the credit agreement governing debt
incurrence and restricted payments. Because not all companies use
identical calculations, the Company’s presentation of Adjusted EBITDA
may not be comparable to other similarly titled measures of other
companies.
Management also measures operating performance based on Adjusted Net
Income/(loss) and Adjusted Net Income/(loss) per share. Adjusted Net
Income/(loss) is not defined under U.S. GAAP and is not a measure of
operating income, operating performance or liquidity presented in
accordance with U.S. GAAP and is subject to important limitations. The
Company believes that the presentation of Adjusted Net Income/(loss) and
Adjusted Net Income/loss per share enhances an investor’s understanding
of its financial performance. The Company believes this measure is a
useful financial metric to assess its operating performance from period
to period by excluding certain items that it believes are not
representative of its core business and the Company uses this measure
for business planning purposes. The Company defines Adjusted Net
Income/(loss) as net earnings/(loss) adjusted for (1) earnings or loss
of discontinued operations, net of tax, (2) amortization attributable to
purchase accounting and (3) income or loss from non-controlling interest
in its majority-owned operations. The Company also makes adjustments for
other cash and non-cash items included in the table below, partially
offset by its estimate of the tax effects as a result of such cash and
non-cash items. The Company believes that Adjusted Net Income/(loss) and
Adjusted Net Income/(loss) per share will provide investors with a
useful tool for assessing the comparability between periods of its
ability to generate cash from operations available to its stockholders.
The Company’s definition of Adjusted Net Income/(loss) may not be the
same as similarly titled measures used by other companies.
The most directly comparable GAAP measure to EBITDA from continuing
operations and Adjusted EBITDA is earnings/(loss) from continuing
operations. The most directly comparable GAAP measure to Adjusted Net
Income/(loss) is net earnings/(loss). Included in this release is a
reconciliation of earnings/(loss) from continuing operations to EBITDA
from continuing operations and Adjusted EBITDA and a reconciliation of
net earnings/(loss) to Adjusted Net Income.
The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable GAAP financial measures
because it could not do so without unreasonable effort due to the
unavailability of the information needed to calculate reconciling items
and due to the variability, complexity and limited visibility of the
adjusting items that would be excluded from the non-GAAP financial
measures in future periods. When planning, forecasting and analyzing
future periods, the Company does so primarily on a non-GAAP basis
without preparing a GAAP analysis as that would require estimates for
various cash and non-cash reconciling items that would be difficult to
predict with reasonable accuracy. For example, equity compensation
expense would be difficult to estimate because it depends on the
Company’s future hiring and retention needs, as well as the future fair
market value of the Company’s common stock, all of which are difficult
to predict and subject to constant change. It is equally difficult to
anticipate the need for or magnitude of a presently unforeseen one-time
restructuring expense or the values of end-of-period foreign currency
exchange rates. As a result, the Company does not believe that a GAAP
reconciliation would provide meaningful supplemental information about
the Company’s outlook.
Use of Constant Currency
As changes in exchange rates are an important factor in understanding
period-to-period comparisons, the Company believes the presentation of
results on a constant currency basis in addition to reported results
helps improve investors’ ability to understand its operating results and
evaluate its performance in comparison to prior periods. Constant
currency information compares results between periods as if exchange
rates had remained constant period over period. The Company uses results
on a constant currency basis as one measure to evaluate its performance.
The Company calculates constant currency by calculating current-year
results using prior-year foreign currency exchange rates. The Company
generally refers to such amounts calculated on a constant currency basis
as excluding the impact of foreign exchange or being on a constant
currency basis. These results should be considered in addition to, not
as a substitute for, results reported in accordance with U.S. GAAP.
Results on a constant currency basis, as the Company presents them, may
not be comparable to similarly titled measures used by other companies
and are not measures of performance presented in accordance with U.S.
GAAP.
Forward-Looking Statements
This release contains both historical and forward-looking statements.
All statements other than statements of historical fact are, or may be
deemed to be, forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements generally can be identified by the use of statements that
include phrases such as “believe,” “expect,” “anticipate,” “intend,”
“estimate,” “plan,” “project,” “foresee,” “likely,” “may,” “will,”
“would” or other words or phrases with similar meanings. Similarly,
statements that describe the Company’s objectives, plans or goals are,
or may be, forward-looking statements. These statements are based on
current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results
could vary materially from Catalent, Inc.’s expectations and
projections. Some of the factors that could cause actual results to
differ include, but are not limited to, the following: participation in
a highly competitive market and increased competition may adversely
affect the business of the Company; demand for the Company’s offerings,
which depends in part on the Company’s customers’ research and
development and the clinical and market success of their products;
product and other liability risks that could adversely affect the
Company’s results of operations, financial condition, liquidity and cash
flows; failure to comply with existing and future regulatory
requirements; failure to provide quality offerings to customers could
have an adverse effect on the Company’s business and subject it to
regulatory actions and costly litigation; problems providing the highly
exacting and complex services or support required; global economic,
political and regulatory risks to the operations of the Company;
inability to enhance existing or introduce new technology or service
offerings in a timely manner; inadequate patents, copyrights, trademarks
and other forms of intellectual property protections; fluctuations in
the costs, availability, and suitability of the components of the
products the Company manufactures, including active pharmaceutical
ingredients, excipients, purchased components and raw materials; changes
in market access or healthcare reimbursement in the United States or
internationally; fluctuations in the exchange rate of the U.S. dollar
and other foreign currencies including as a result of the recent U.K.
referendum to exit from the European Union; adverse tax legislative or
regulatory initiatives or challenges to the Company’s tax positions;
loss of key personnel; risks generally associated with information
systems; inability to complete any future acquisitions and other
transactions that may complement or expand the business of the Company
or divest of non-strategic businesses or assets and difficulties in
successfully integrating acquired business and realizing anticipated
benefits of such acquisitions; offerings and customers’ products that
may infringe on the intellectual property rights of third parties;
environmental, health and safety laws and regulations, which could
increase costs and restrict operations; labor and employment laws and
regulations or labor difficulties, which could increase costs or result
in operational disruptions; additional cash contributions required to
fund the Company’s existing pension plans; substantial leverage
resulting in the limited ability of the Company to raise additional
capital to fund operations and react to changes in the economy or in the
industry, exposure to interest rate risk to the extent of the Company’s
variable rate debt and preventing the Company from meeting its
obligations under its indebtedness. For a more detailed discussion of
these and other factors, see the information under the caption “Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2017, filed on August 28, 2017, and in Exhibit 99.4 to
its Current Report on Form 8-K filed on September 25, 2017, with the
Securities and Exchange Commission. All forward-looking statements speak
only as of the date of this release or as of the date they are made, and
Catalent, Inc. does not undertake to update any forward-looking
statement as a result of new information or future events or
developments except to the extent required by law.
More products. Better treatments. Reliably supplied.™
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Catalent, Inc. and Subsidiaries
Consolidated Statements of Operations
(Dollars in millions, except per share data)
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Three Months Ended
September 30,
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FX impact
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Constant Currency
Increase/(Decrease)
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2017
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2016
|
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Change $
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Change %
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Net revenue
|
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$
|
543.9
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$
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442.2
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$
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6.5
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$
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95.2
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22
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%
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Cost of sales
|
|
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403.8
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318.1
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6.1
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79.6
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25
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%
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Gross margin
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140.1
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124.1
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0.4
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15.6
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|
13
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%
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Selling, general and administrative expenses
|
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107.0
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|
|
98.2
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|
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0.3
|
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|
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8.5
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9
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%
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Restructuring and other
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1.2
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1.1
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—
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0.1
|
|
|
|
9
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%
|
|
Operating earnings
|
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|
31.9
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|
24.8
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|
|
|
0.1
|
|
|
|
7.0
|
|
|
|
28
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%
|
|
Interest expense, net
|
|
|
24.3
|
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|
|
22.1
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|
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—
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2.2
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|
|
|
10
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%
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Other (income)/expense, net
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5.7
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|
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(2.1
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)
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0.8
|
|
|
|
7.0
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|
|
*
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|
Earnings from continuing operations, before income
taxes
|
|
|
1.9
|
|
|
|
4.8
|
|
|
|
(0.7
|
)
|
|
|
(2.2
|
)
|
|
|
(46
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)%
|
|
Income tax expense/(benefit)
|
|
|
(1.9
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)
|
|
|
0.2
|
|
|
|
(0.3
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)
|
|
|
(1.8
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)
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*
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Net earnings
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$
|
3.8
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$
|
4.6
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|
$
|
(0.4
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)
|
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|
$
|
(0.4
|
)
|
|
|
(9
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)%
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Weighted average shares outstanding
|
|
|
125.7
|
|
|
|
124.8
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
127.8
|
|
|
|
126.3
|
|
|
|
|
|
|
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Earnings per share:
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Basic
|
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Net earnings
|
|
|
0.03
|
|
|
|
0.04
|
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Diluted
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
0.03
|
|
|
|
0.04
|
|
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* - percentage not meaningful
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Catalent, Inc. and Subsidiaries
Selected Segment Financial Data
(Dollars in millions)
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Three Months Ended
September 30,
|
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FX impact
|
|
|
Constant Currency
Increase/(Decrease)
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
Change $
|
|
|
Change %
|
|
Softgel Technologies
|
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|
Net revenue
|
|
|
$
|
219.7
|
|
|
|
$
|
186.4
|
|
|
|
$
|
4.0
|
|
|
|
$
|
29.3
|
|
|
|
16
|
%
|
|
Segment EBITDA
|
|
|
35.1
|
|
|
|
30.5
|
|
|
|
—
|
|
|
|
4.6
|
|
|
|
15
|
%
|
|
Drug Delivery Solutions
|
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|
|
|
|
|
|
|
|
Net revenue
|
|
|
225.8
|
|
|
|
191.3
|
|
|
|
2.5
|
|
|
|
32.0
|
|
|
|
17
|
%
|
|
Segment EBITDA
|
|
|
47.4
|
|
|
|
42.0
|
|
|
|
0.3
|
|
|
|
5.1
|
|
|
|
12
|
%
|
|
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
109.7
|
|
|
|
75.0
|
|
|
|
0.4
|
|
|
|
34.3
|
|
|
|
46
|
%
|
|
Segment EBITDA
|
|
|
16.7
|
|
|
|
10.5
|
|
|
|
0.1
|
|
|
|
6.1
|
|
|
|
58
|
%
|
|
Inter-segment revenue elimination
|
|
|
(11.3
|
)
|
|
|
(10.5
|
)
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
|
|
4
|
%
|
|
Unallocated Costs
|
|
|
(34.0
|
)
|
|
|
(20.3
|
)
|
|
|
(0.9
|
)
|
|
|
(12.8
|
)
|
|
|
63
|
%
|
|
Combined Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
$
|
543.9
|
|
|
|
$
|
442.2
|
|
|
|
$
|
6.5
|
|
|
|
$
|
95.2
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from continuing operations
|
|
|
$
|
65.2
|
|
|
|
$
|
62.7
|
|
|
|
$
|
(0.5
|
)
|
|
|
$
|
3.0
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the Company's description of non-GAAP measures including
segment EBITDA as referenced above.
|
|
|
|
|
|
|
|
|
Catalent, Inc. and Subsidiaries
Reconciliation of Earnings/(Loss) from Continuing Operations to
EBITDA from Continuing Operations and Adjusted EBITDA*
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Twelve
Months
Ended
|
|
|
|
|
September 30,
2016
|
|
|
December 31,
2016
|
|
|
March 31,
2017
|
|
|
June 30,
2017
|
|
|
September 30,
2017
|
|
|
September 30,
2017
|
|
Earnings from continuing operations
|
|
|
$
|
4.6
|
|
|
|
$
|
17.4
|
|
|
|
$
|
26.0
|
|
|
|
$
|
61.8
|
|
|
|
$
|
3.8
|
|
|
|
$
|
109.0
|
|
|
Interest expense, net
|
|
|
22.1
|
|
|
|
22.8
|
|
|
|
22.6
|
|
|
|
22.6
|
|
|
|
24.3
|
|
|
|
92.3
|
|
|
Income tax expense/(benefit)
|
|
|
0.2
|
|
|
|
9.5
|
|
|
|
8.7
|
|
|
|
7.4
|
|
|
|
(1.9
|
)
|
|
|
23.7
|
|
|
Depreciation and amortization
|
|
|
35.8
|
|
|
|
35.5
|
|
|
|
36.5
|
|
|
|
38.7
|
|
|
|
39.0
|
|
|
|
149.7
|
|
|
EBITDA from continuing operations
|
|
|
62.7
|
|
|
|
85.2
|
|
|
|
93.8
|
|
|
|
130.5
|
|
|
|
65.2
|
|
|
|
374.7
|
|
|
Equity compensation
|
|
|
6.9
|
|
|
|
4.9
|
|
|
|
4.6
|
|
|
|
4.5
|
|
|
|
7.0
|
|
|
|
21.0
|
|
|
Impairment charges and (gain)/loss on sale of assets
|
|
|
—
|
|
|
|
0.5
|
|
|
|
1.8
|
|
|
|
7.5
|
|
|
|
—
|
|
|
|
9.8
|
|
|
Financing related expenses
and other
|
|
|
—
|
|
|
|
4.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.3
|
|
|
US GAAP Restructuring and
Other
|
|
|
1.1
|
|
|
|
3.3
|
|
|
|
0.1
|
|
|
|
3.5
|
|
|
|
1.2
|
|
|
|
8.1
|
|
|
Acquisition, integration and other special items
|
|
|
4.8
|
|
|
|
3.9
|
|
|
|
8.4
|
|
|
|
8.5
|
|
|
|
11.0
|
|
|
|
31.8
|
|
|
Foreign Exchange loss/(gain) (included in other, net) (1)
|
|
|
(0.5
|
)
|
|
|
(3.2
|
)
|
|
|
9.2
|
|
|
|
4.1
|
|
|
|
6.5
|
|
|
|
16.6
|
|
|
Other adjustments
|
|
|
—
|
|
|
|
(0.8
|
)
|
|
|
(0.1
|
)
|
|
|
0.5
|
|
|
|
—
|
|
|
|
(0.4
|
)
|
|
Adjusted EBITDA
|
|
|
$
|
75.0
|
|
|
|
$
|
98.1
|
|
|
|
$
|
117.8
|
|
|
|
$
|
159.1
|
|
|
|
$
|
90.9
|
|
|
|
$
|
465.9
|
|
|
FX impact (unfavorable)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA - Constant Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
91.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Refer to the Company's description of non-GAAP measures including
Adjusted EBITDA as referenced above.
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Foreign exchange loss of $16.6 million for the twelve months ended
September 30, 2017 includes: (a) $3.5 million of unrealized losses
related to foreign trade receivables and payables, (b) $32.1 million
of unrealized losses on the ineffective portion of the Company's net
investment hedge, and (c) $1.8 million of unrealized losses on
inter-company loans. The foreign exchange adjustment was also
affected by the exclusion of realized foreign currency exchange rate
gains from the settlement of inter-company loans of $20.8 million.
Inter-company loans are between Catalent entities and do not reflect
the ongoing results of the Company's trade operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catalent, Inc. and Subsidiaries
Reconciliation of Net Earnings/(Loss) to Adjusted Net Income*
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Twelve
Months
Ended
|
|
|
|
|
September 30,
2016
|
|
|
December 31,
2016
|
|
|
March 31,
2017
|
|
|
June 30,
2017
|
|
|
September 30,
2017
|
|
|
September 30,
2017
|
|
Net earnings
|
|
|
$
|
4.6
|
|
|
|
$
|
17.4
|
|
|
|
$
|
26.0
|
|
|
|
$
|
61.8
|
|
|
|
$
|
3.8
|
|
|
|
$
|
109.0
|
|
|
Amortization (1)
|
|
|
11.0
|
|
|
|
11.1
|
|
|
|
11.0
|
|
|
|
11.2
|
|
|
|
11.4
|
|
|
|
44.7
|
|
|
Equity compensation
|
|
|
6.9
|
|
|
|
4.9
|
|
|
|
4.6
|
|
|
|
4.5
|
|
|
|
7.0
|
|
|
|
21.0
|
|
|
Impairment charges and loss on sale of assets
|
|
|
—
|
|
|
|
0.5
|
|
|
|
1.8
|
|
|
|
7.5
|
|
|
|
—
|
|
|
|
9.8
|
|
|
Financing related expenses
|
|
|
—
|
|
|
|
4.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.3
|
|
|
U.S. GAAP restructuring and other
|
|
|
1.1
|
|
|
|
3.3
|
|
|
|
0.1
|
|
|
|
3.5
|
|
|
|
1.2
|
|
|
|
8.1
|
|
|
Acquisition, integration and other special items
|
|
|
4.8
|
|
|
|
3.9
|
|
|
|
8.4
|
|
|
|
8.5
|
|
|
|
11.0
|
|
|
|
31.8
|
|
|
Foreign exchange loss/(gain) (included in other (income)/expense,
net)
|
|
|
(0.5
|
)
|
|
|
(3.2
|
)
|
|
|
9.2
|
|
|
|
4.1
|
|
|
|
6.5
|
|
|
|
16.6
|
|
|
Other adjustments
|
|
|
—
|
|
|
|
(0.8
|
)
|
|
|
(0.1
|
)
|
|
|
0.5
|
|
|
|
—
|
|
|
|
(0.4
|
)
|
|
Estimated tax effect of
adjustments(2)
|
|
|
(6.5
|
)
|
|
|
(6.5
|
)
|
|
|
(10.7
|
)
|
|
|
(12.2
|
)
|
|
|
(11.2
|
)
|
|
|
(40.6
|
)
|
|
Discrete income tax expense/(benefit) items(3)
|
|
|
(1.8
|
)
|
|
|
(0.2
|
)
|
|
|
(1.6
|
)
|
|
|
(6.8
|
)
|
|
|
(2.6
|
)
|
|
|
(11.2
|
)
|
|
Adjusted net income
|
|
|
$
|
19.6
|
|
|
|
$
|
34.7
|
|
|
|
$
|
48.7
|
|
|
|
$
|
82.6
|
|
|
|
$
|
27.1
|
|
|
|
$
|
193.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Refer to the Company's description of non-GAAP measures including
Adjusted Net Income as referenced above.
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Represents the amortization attributable to purchase accounting for
previously completed business combinations.
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
The tax effect of adjustments to Adjusted Net Income is computed by
applying the statutory tax rate in the jurisdictions to the income
or expense items which are adjusted in the period presented; if a
valuation allowance exists, the rate applied is zero.
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
Discrete period income tax expense/(benefit) items are unusual or
infrequently occurring items primarily including: changes in
judgment related to the realizability of deferred tax assets in
future years, changes in measurement of a prior year tax position,
deferred tax impact of changes in tax law, and purchase accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catalent, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
|
June 30,
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
601.4
|
|
|
|
$
|
288.3
|
|
Trade receivables, net
|
|
|
410.5
|
|
|
|
488.8
|
|
Inventories
|
|
|
194.0
|
|
|
|
184.9
|
|
Prepaid expenses and other
|
|
|
124.2
|
|
|
|
97.8
|
|
Total current assets
|
|
|
1,330.1
|
|
|
|
1,059.8
|
|
Property, plant, and equipment, net
|
|
|
1,025.0
|
|
|
|
995.9
|
|
Other non-current assets, including intangible assets
|
|
|
1,429.7
|
|
|
|
1,398.6
|
|
Total assets
|
|
|
$
|
3,784.8
|
|
|
|
$
|
3,454.3
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Current portion of long-term obligations and other short-term
borrowings
|
|
|
$
|
23.9
|
|
|
|
$
|
24.6
|
|
Accounts payable
|
|
|
166.8
|
|
|
|
163.2
|
|
Other accrued liabilities
|
|
|
266.4
|
|
|
|
281.2
|
|
Total current liabilities
|
|
|
457.1
|
|
|
|
469.0
|
|
Long-term obligations, less current portion
|
|
|
2,082.9
|
|
|
|
2,055.1
|
|
Other non-current liabilities
|
|
|
206.0
|
|
|
|
206.7
|
|
Commitment and contingencies (1)
|
|
|
—
|
|
|
|
—
|
|
Total shareholders' equity
|
|
|
1,038.8
|
|
|
|
723.5
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
3,784.8
|
|
|
|
$
|
3,454.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Please refer to note 13 of the consolidated financial statements
within our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catalent, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
83.7
|
|
|
|
48.3
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Acquisition of property and equipment and other productive assets
|
|
|
(42.7
|
)
|
|
|
(27.7
|
)
|
|
Payment for acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
(86.9
|
)
|
|
Net cash (used in) investing activities
|
|
|
(42.7
|
)
|
|
|
(114.6
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Net change in other borrowings
|
|
|
(1.7
|
)
|
|
|
(4.3
|
)
|
|
Proceeds from borrowing, net
|
|
|
—
|
|
|
|
75.0
|
|
|
Payments related to long-term obligations
|
|
|
(4.7
|
)
|
|
|
(4.7
|
)
|
|
Equity offering, sale of common stock
|
|
|
277.8
|
|
|
|
—
|
|
|
Cash paid, in lieu of equity, for tax withholding obligations
|
|
|
(8.4
|
)
|
|
|
(0.1
|
)
|
|
Net cash provided by financing activities
|
|
|
263.0
|
|
|
|
65.9
|
|
|
Effect of foreign currency on cash
|
|
|
9.1
|
|
|
|
0.9
|
|
|
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS
|
|
|
313.1
|
|
|
|
0.5
|
|
|
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
288.3
|
|
|
|
131.6
|
|
|
CASH AND EQUIVALENTS AT END OF PERIOD
|
|
|
$
|
601.4
|
|
|
|
$
|
132.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investors:
Catalent, Inc.
Thomas Castellano, 732-537-6325
investors@catalent.com