- Total revenue increased 1%, both
as-reported and in constant currency, to $418.3 million from first
quarter 2014
- Adjusted EBITDA increased 2% to
$83.4 million from first quarter 2014
- Adjusted net income of $0.13 per
diluted share, compared to adjusted net loss of $0.02 per diluted
share in first quarter 2014
- Announced the launch of OptiPact™,
an integrated service and technology offering based on Catalent’s
expertise in roller compaction
- Acquired the remaining stake in
Redwood Bioscience Inc. and its SMARTag™ Antibody-Drug Conjugate
(ADC) technology platform in early October
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 year 2015, which ended
September 30, 2014.
First quarter 2015 revenue of $418.3 million increased 1%, both
as-reported and in constant currency, from $414.3 million in the
first quarter a year ago.
First quarter 2015 net loss was $19.5 million, or $0.18 per
diluted share, compared to net income of $1.5 million, or $0.02 per
diluted share, in the first quarter a year ago. The decline in
profitability was primarily related to one-time IPO-related costs
of $50.4 million.
First quarter 2015 EBITDA from continuing operations was $36.6
million, a decrease of 50% from $72.7 million in the first quarter
a year ago. The decline in profitability was also primarily related
to one-time IPO-related costs of $50.4 million.
First quarter 2015 Adjusted EBITDA, as referenced in the GAAP to
non-GAAP reconciliation provided later in this release, was $83.4
million, or 19.9% of revenue, compared to $82.2 million, or 19.8%
of revenue, in the first quarter a year ago.
First quarter 2015 Adjusted Net Income was $13.4 million, or
$0.13 per diluted share, compared to the Adjusted Net Loss of $1.5
million, or $0.02 per diluted share, in the first quarter a year
ago.
“We are pleased with our first quarter results, highlighted by
double-digit EBITDA growth within two of our three reporting
segments,” said John Chiminski, President and Chief Executive
Officer of Catalent, Inc. “During the quarter, we continued to make
strategic investments in our technology platforms. To capitalize on
our twenty-year experience in roller compaction, we launched
OptiPact. This integrated service and technology offering will
further strengthen our ability to integrate optimal formulation,
development, analysis, scale-up, and manufacturing capabilities to
create differentiated final dosage forms. Additionally, in early
October, we acquired the remaining stake in Redwood Bioscience Inc.
and its SMARTag Antibody-Drug Conjugate technology platform, which
strengthens our position in the fast growing biologics market.”
First Quarter 2015 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Oral Technologies segment was $261.1 million,
an increase of 1%, or an increase of 2% on a constant currency
basis, over the first quarter a year ago. This growth was
attributable to strong performance within the modified release
technologies business and increased profit from product
participation-related activities, partially offset by lower
end-market demand for certain customer products using our softgel
technology platform.
Revenue from the Development and Clinical Services segment was
$103.1 million, an increase of 2%, or a decrease of 1% on a
constant currency basis, over the first quarter a year ago. This
growth was attributable to increased revenue in the analytical
services business, offset by declines in clinical services.
Revenue from the Medication Delivery Solutions segment was $56.9
million, an increase of 1%, on both an as-reported and constant
currency basis, over the first quarter a year ago. Strong
performance within blow-fill-seal and growth within biologics
driven by timing of completed project milestones partially offset
by lower sales within the Company’s sterile injectables
business.
Segment EBITDA Highlights
Oral Technologies segment EBITDA in the first quarter of 2015
was $57.7 million, a decrease of 4%, or 1% on a constant currency
basis. The decrease was primarily driven by lower end-market demand
and unfavorable product mix within the softgel business, partially
offset by strong growth within modified release technologies and
higher profit from product ownership related activities.
Development and Clinical Services segment EBITDA in the first
quarter of 2015 was $21.4 million, an increase of 36%, or 32% on a
constant currency basis. This EBITDA improvement was attributable
to favorable product mix within clinical services and growth from
the integrated oral solids development and supply business.
Medication Delivery Solutions segment EBITDA in the first
quarter of 2015 was $9.9 million, an increase of 21%, or 22% on a
constant currency basis. This increase was driven by increased
demand, favorable product mix, and operating efficiencies within
blow-fill-seal, as well as due to timing of completed project
milestones within biologics.
Additional Financial Highlights
First quarter gross margin of 30.0% increased 1.2 percentage
points from 28.8% in the first quarter a year ago, driven by
favorable product mix and by improved leveraging of fixed
manufacturing costs.
First quarter selling, general and administrative expenses were
$81.4 million and represented 19.5% of revenue, compared to 19.6%
of revenue in the first quarter a year ago, and is essentially in
line with the comparable prior year period.
Backlog for the Development and Clinical Services segment was
$389.6 million as of September 30, 2014, an increase of 4% compared
to the fourth quarter of fiscal year 2014. The segment also
recorded net new business wins of $119.6 million during the first
quarter, a decrease of 17% compared to the first quarter of fiscal
year 2014. The decrease was driven by several large new business
wins booked during the first quarter of the prior fiscal year,
which drove last year's new business wins to above normal levels.
The segment’s trailing-twelve-month book-to-bill ratio was
1.19x.
Balance Sheet and Liquidity
As of September 30, 2014, Catalent had $1.8 billion in debt as
compared to $2.7 billion as of June 30, 2014.
On September 9, Catalent’s IPO underwriters purchased an
additional 6,375,000 shares of the Company’s stock at the initial
public offering price pursuant to an option granted to the
underwriters at the time of the IPO, which resulted in net proceeds
of approximately $124 million. The proceeds were used to pay down
the Company’s senior unsecured term loan. In total, Catalent raised
gross proceeds of over $1 billion through the IPO. As of September
30, 2014, Catalent’s leverage ratio was 4.0x, compared to 6.1x as
of June 30, 2014.
Fiscal Year 2015 Outlook
There is no change to Catalent’s previously issued financial
guidance. For fiscal year 2015, the Company continues to expect its
revenue to be in the range of $1.89 billion to $1.92 billion, its
Adjusted EBITDA to be in the range of $450 million to $460 million,
its Adjusted Net Income to be in the range of $215 million to $225
million, and its capital expenditures to be in the range of $115
million to $125 million.
Earnings Webcast
The Company’s management will host a webcast to discuss the
results at 4:30 p.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.
The webcast replay, along with supplemental slides, will be
available for 90 days in the Investors section 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 approximately 8,000 people, including over 1,000
scientists, at nearly 30 facilities across 5 continents and in
fiscal 2014 generated more than $1.8 billion in annual revenue.
Catalent is headquartered in Somerset, N.J. For more information,
please visit www.catalent.com.
Non-GAAP Financial Measure
Use of EBITDA from continuing operations, Adjusted EBITDA and
Adjusted Net Income
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. In addition, 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”). Under the indentures governing the Company’s notes and
the credit agreement governing the senior unsecured term loan
facility, 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. The Company has included the
calculations of Adjusted EBITDA for the periods presented. Adjusted
EBITDA is the covenant compliance measure used in certain covenants
under the indentures governing its notes and the credit agreement
governing the senior unsecured term loan facility, particularly
those 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). 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. For example, Adjusted Net
Income excludes our non-cash tax expense and does not reflect the
impact on earnings resulting from certain other items. We believe
that the presentation of Adjusted Net Income/(loss) enhances an
investor’s understanding of our financial performance. We believe
this measure is a useful financial metric to assess our operating
performance from period to period by excluding certain items that
we believe are not representative of our core business and we use
this measure for business planning purposes. We define Adjusted Net
Income/(loss) as net earnings/(loss) adjusted for (1) earnings or
loss of discontinued operations, net of tax, (2) tax expense or
income which is not cash, (3) amortization attributable to purchase
accounting and (4) income or loss from non-controlling interest in
our majority-owned operations. We also make adjustments for other
cash and non-cash items included in the table below, partially
offset by our estimate of the cash taxes saved as a result of such
cash and non-cash items. We believe that Adjusted Net Income/(loss)
will provide investors with a useful tool for assessing the
comparability between periods of our ability to generate cash from
operations available to our stockholders. Our 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 reconciliation of net earnings/(loss) to Adjusted Net
Income.
Use of Constant Currency
As 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 our
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 our
business and subject the Company 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; adverse tax legislation
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 the
Company’s ability to successfully integrate acquired business and
realize 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; 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 our obligations under our
indebtedness. For a more detailed discussion of these and other
factors, see the information under the caption “Risk Factors” in
our 10-K for the fiscal year ended June 30, 2014, filed 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.™
Catalent, Inc. and Subsidiaries
Consolidated Statements of
Operations
(Unaudited; Dollars in
millions)
Three Months Ended September 30,
FX impact(unfavorable)/
favorable
Increase/(Decrease) 2014 2013
Change $ Change % Net revenue $ 418.3 $
414.3 $ (0.9 ) $ 4.9 1 % Cost of sales 293.0 295.1
0.4 (2.5 ) (1 )% Gross margin 125.3 119.2 (1.3 ) 7.4 6 %
Selling, general and administrative expenses 81.4 81.1 0.1 0.2
*
Restructuring and other 1.4 3.0 0.1 (1.7 ) (57
)% Operating earnings/(loss) 42.5 35.1 (1.5 ) 8.9 25 % Interest
expense, net 35.5 40.9 0.3 (5.7 ) (14 )% Other (income)/expense,
net 41.3 (1.0 ) (0.6 ) 42.9
*
Earnings/(loss) from continuing operations, before income taxes
(34.3 ) (4.8 ) (1.2 ) (28.3 )
*
Income tax expense/(benefit) (14.0 ) (6.6 ) (0.6 ) (6.8 )
*
Earnings/(loss) from continuing operations (20.3 ) 1.8 (0.6 ) (21.5
)
*
Net earnings/(loss) from discontinued operations, net of tax 0.4
(0.4 ) — 0.8
*
Net earnings/(loss) (19.9 ) 1.4 (0.6 ) (20.7 )
*
Less: Net earnings/(loss) attributable to noncontrolling interest,
net of tax (0.4 ) (0.1 ) — (0.3 )
*
Net earnings/(loss) attributable to Catalent $ (19.5 ) $ 1.5
$ (0.6 ) $ (20.4 )
*
Amounts attributable to Catalent: Earnings/(loss)
from continuing operations less net income (loss) attributable to
noncontrolling interest (19.9 ) 1.9 Net earnings/(loss)
attributable to Catalent (19.5 ) 1.5
Earnings per share
attributable to Catalent: Basic Earnings/(loss) from
continuing operations (0.19 ) 0.03 Net earnings/(loss) (0.18 ) 0.02
Diluted Earnings/(loss) from continuing operations (0.19 )
0.02 Net earnings/(loss) (0.18 ) 0.02
* - percentage not meaningful
Catalent, Inc. and Subsidiaries
Selected Segment Financial Data
(Unaudited; Dollars in
millions)
Three Months Ended September 30,
FX impact(unfavorable)/
favorable
Increase/(Decrease) 2014 2013
Change $ Change % Oral
Technologies Net revenue $ 261.1 $ 258.9 $ (3.7 ) $ 5.9 2 %
Segment EBITDA 57.7 60.4 (1.8 ) (0.9 ) (1 )%
Medication Delivery
Solutions Net revenue 56.9 56.5 — 0.4 1 % Segment EBITDA 9.9
8.2 (0.1 ) 1.8 22 %
Development and Clinical Services Net
revenue 103.1 101.0 2.8 (0.7 ) (1 )% Segment EBITDA 21.4 15.7 0.7
5.0 32 % Inter-segment revenue elimination (2.8 ) (2.1 ) — (0.7 )
33 % Unallocated Costs (52.4 ) (11.6 ) 0.6 (41.4 )
*
Combined Total
Net revenue $ 418.3 $ 414.3
$ (0.9 ) $ 4.9 1 %
EBITDA from continuing
operations $ 36.6 $ 72.7 $ (0.6 ) $ (35.5 ) (49 )%
* - percentage not meaningful
Catalent, Inc. and Subsidiaries
Reconciliation of Earnings/(Loss) from
Continuing Operations to EBITDA from Continuing Operations and
Adjusted EBITDA
(Unaudited; Dollars in
millions)
Quarter Ended
TwelveMonthsEnded
Quarter Ended
Twelve Months
Ended
September 30, 2013 December
31, 2013 March 31, 2014 June
30, 2014 June 30, 2014 September 30, 2014
September 30, 2014 Earnings/(loss) from continuing
operations $ 1.8 $ (18.9 ) $ 8.0 $ 27.0 $ 17.9 $ (20.3 ) $ (4.2 )
Interest expense, net 40.9 41.5 40.4 40.3 163.1 35.5 157.7 Income
tax expense/(benefit) (1) (6.6 ) 23.3 6.6 26.2 49.5 (14.0 ) 42.1
Depreciation and amortization 36.5 37.3 35.1 34.0 142.9 35.0 141.4
Noncontrolling interest 0.1 0.3 0.4 0.2
1.0 0.4 1.3 EBITDA from continuing operations
72.7 83.5 90.5 127.7 374.4 36.6 338.3 Equity compensation 1.2 1.1
1.1 1.1 4.5 1.5 4.8 Impairment charges and (gain)/loss on sale of
assets — — 0.4 2.8 3.2 — 3.2 Financing related expenses
and other (2)
0.1 (0.1 ) 0.1 10.9 11.0 20.6 31.5 US GAAP Restructuring 3.0 5.4
3.5 7.8 19.7 1.4 18.1 Acquisition, integration and other special
items 3.7 2.8 2.7 0.6 9.8 3.2 9.3 Foreign Exchange loss/(gain)
(included in other, net) (3) (1.7 ) (2.5 ) 4.5 (3.8 ) (3.5 ) (3.7 )
(5.5 ) Other adjustments (4) — — (0.1 ) 0.4 0.3 23.8 24.1 Sponsor
monitoring fee (5) 3.2 3.2 3.3 3.2 12.9
— 9.7 Subtotal 82.2 93.4 106.0 150.7 432.3
83.4 433.5 Estimated cost savings — — — —
— — — Adjusted EBITDA $ 82.2 $
93.4 $ 106.0 $ 150.7 $ 432.3 $ 83.4
$ 433.5 (1) Represents the amount of income
tax-related expense/(benefit) recorded within our net
earnings/(loss) which may not result in cash payment or receipt.
(2) Financing related expenses for the
three months ended September 30, 2014 include $20.6 million of
early debt termination expenses which were a result of the IPO. See
footnote 4 for an additional $29.8 million of IPO related costs:
totaling $50.4 million.
(3) Foreign exchange gain of $5.5 million for the twelve
months ended September 30, 2014 included $24.3 million of
unrealized foreign currency exchange rate gains primarily driven by
gains of $4.9 million related to inter-company loans denominated in
a currency different from the functional currency of either the
borrower or the lender, partially offset by foreign currency
exchange gains of $19.4 million driven by the ineffective portion
of the net investment hedge related to the Euro denominated debt.
The foreign exchange adjustment was also impacted by the exclusion
of realized foreign currency exchange rate losses from the non-cash
and cash settlement of inter-company loans of $18.8 million.
Inter-company loans are between Catalent entities and do not
reflect the ongoing results of the company's trade operations.
(4) Other Adjustments for the three months
ended September 30, 2014 includes $29.8 million for a sponsor
advisory agreement termination fee paid in connection with the IPO.
See footnote 2 for an additional $20.6 million of IPO related
costs: totaling $50.4 million.
(5) Represents the amount of sponsor advisory fee for each
respective period. The sponsor advisory fee agreement was
terminated following the completion of our IPO.
Catalent, Inc. and Subsidiaries
Reconciliation of Net Earnings/(Loss)
to Adjusted Net Income/(Loss)
(Unaudited; Dollars in
millions)
Quarter Ended
TwelveMonthsEnded
Quarter Ended
TwelveMonthsEnded
September 30, 2013 December
31, 2013 March 31, 2014 June
30, 2014 June 30, 2014 September 30, 2014
September 30, 2014 Net earnings/(loss) $ 1.4 $ (19.5
) $ 6.3 $ 27.0 $ 15.2 $ (19.9 ) $ (6.1 ) Net earnings/(loss) from
discontinued operations, net of tax 0.4 0.6 1.7
— 2.7 (0.4 ) 1.9 Earnings/(loss) from
continuing operations, net of tax 1.8 (18.9 ) 8.0 27.0 17.9 (20.3 )
(4.2 ) Amortization (1) 10.2 10.5 11.0 10.8 42.5 11.3 43.6 Income
tax expense/(benefit) (2) (6.6 ) 23.3 6.6 26.2 49.5 (14.0 ) 42.1
Cash taxes (paid)/refunded (15.8 ) 3.4 (1.1 ) (7.6 ) (21.1 ) (9.9 )
(15.2 ) Net (earnings)/loss attributable to noncontrolling
interest, net of tax 0.1 0.3 0.4 0.2 1.0 0.4 1.3 Equity
compensation 1.2 1.1 1.1 1.1 4.5 1.5 4.8 Impairment charges and
loss on sale of assets — — 0.4 2.8 3.2 — 3.2 Financing related
expenses (3) 0.1 (0.1 ) 0.1 10.9 11.0 20.6 31.5 U.S. GAAP
restructuring 3.0 5.4 3.5 7.8 19.7 1.4 18.1 Acquisition,
integration and other special items 3.7 2.8 2.7 0.6 9.8 3.2 9.3
Foreign exchange loss/(gain) (included in other (income)/expense,
net) (4) (1.7 ) (2.5 ) 4.5 (3.8 ) (3.5 ) (3.7 ) (5.5 ) Other
adjustments (5) — — (0.1 ) 0.4 0.3 23.8 24.1 Sponsor advisory fee
(6) 3.2 3.2 3.3 3.2 12.9 — 9.7 Estimated cash tax (savings)/expense
attributable to reconciling items (7) (0.7 ) (0.6 ) (1.4 ) (2.6 )
(5.3 ) (0.9 ) (5.5 ) Adjusted net income/(loss) $ (1.5 ) $ 27.9
$ 39.0 $ 77.0 $ 142.4 $ 13.4 $
157.3 (1) Represents the amortization attributable to
purchase accounting for previously completed business combinations.
(2) Represents the amount of income tax-related
expense/(benefit) recorded within our net earnings/(loss) which may
not result in cash payment or receipt.
(3) Financing related expenses for the
three months ended September 30, 2014 include $20.6 million of
early debt termination expenses which were a result of the IPO. See
footnote 5 for an additional $29.8 million of IPO related costs:
totaling $50.4 million.
(4) Foreign exchange gain of $5.5 million for the twelve
months ended September 30, 2014 included $24.3 million of
unrealized foreign currency exchange rate gains primarily driven by
gains of $4.9 million related to inter-company loans denominated in
a currency different from the functional currency of either the
borrower or the lender, partially offset by foreign currency
exchange gains of $19.4 million driven by the ineffective portion
of the net investment hedge related to the Euro denominated debt.
The foreign exchange adjustment was also impacted by the exclusion
of realized foreign currency exchange rate losses from the non-cash
and cash settlement of inter-company loans of $18.8 million.
Inter-company loans are between Catalent entities and do not
reflect the ongoing results of the company's trade operations.
(5) Other Adjustments for the three months
ended September 30, 2014 includes $29.8 million for a sponsor
advisory agreement termination fee paid in connection with the IPO.
See footnote 3 for an additional $20.6 million of IPO related
costs: totaling $50.4 million.
(6) Represents the amount of sponsor advisory fee for each
respective period. The sponsor advisory fee agreement was
terminated following the completion of our IPO. (7)
Represents the estimated cash tax impact of certain items recorded
in each period that are added back in the calculation of Adjusted
Net Income/(loss). The estimate is determined by applying the
statutory tax rate in tax paying jurisdictions to income or expense
items which impact cash taxes paid. Generally, amortization
attributable to purchase accounting, unrealized gains/losses due to
foreign currency translation and non-cash equity compensation do
not impact cash taxes.
Catalent, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited; Dollars in
millions)
September 30, 2014 June 30,
2014 ASSETS Current assets: Cash and cash equivalents
$ 63.2 $ 74.4 Trade receivables, net 332.2 403.7 Inventories 142.4
134.8 Prepaid expenses and other 81.3 74.6
Total current assets
619.1 687.5 Property, plant, and equipment, net 853.3 873.0 Other
non-current assets, including intangible assets 1,478.9
1,529.7
Total assets $ 2,951.3
$ 3,090.2 LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities: Current portion of long-term obligations and
other short-term borrowings $ 36.4 $ 25.2 Accounts payable 116.7
148.1 Other accrued liabilities 224.5 279.7 Total
current liabilities 377.6 453.0 Long-term obligations, less current
portion 1,780.3 2,685.4 Other non-current liabilities 286.1 319.1
Redeemable noncontrolling interest 4.3 4.5 Commitment and
contingencies (1) Total Shareholders' equity/(deficit) 503.0
(371.8 )
Total liabilities, redeemable noncontrolling interest
and Shareholders' equity/(deficit) $ 2,951.3
$ 3,090.2 (1) Please refer to
note 15 of the consolidated financial statements within our
September 30, 2014 Form 10-Q.
Catalent, Inc. and Subsidiaries
Consolidated Statements of Cash
Flows
(Unaudited; Dollars in
millions)
Three Months Ended September 30, 2014
2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net
cash provided by/(used in) operating activities from continuing
operations $ (40.2 ) $ 25.7 Net cash provided by/(used in)
operating activities from discontinued operations 0.4 (0.5 )
Net cash provided by/(used in) operating activities
(39.8 ) 25.2 CASH FLOWS FROM
INVESTING ACTIVITIES: Acquisition of property and equipment and
other productive assets (31.2 ) (18.8 ) Proceeds from sale of
property and equipment — 0.6 Payment for acquisitions, net (13.5 )
(8.0 ) Net cash provided by/(used in) investing activities from
continuing operations (44.7 ) (26.2 ) Net cash provided by/(used
in) investing activities from discontinued operations — —
Net cash provided by/(used in) investing activities
(44.7 ) (26.2 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Net change in short-term borrowings 11.7
(5.8 ) Proceeds from borrowing, net — — Payments related to
long-term obligations (863.8 ) (6.7 ) Call premium payments and
financing fees paid (9.8 ) — Equity contribution/(redemption) 948.8
— Net cash (used in)/provided by financing activities
from continuing operations 86.9 (12.5 ) Net cash (used in)/provided
by financing activities from discontinued operations — —
Net cash (used in)/provided by financing activities
86.9 (12.5 ) Effect of foreign currency
on cash (13.6 ) 2.9
NET INCREASE/(DECREASE) IN CASH AND
EQUIVALENTS (11.2 ) (10.6 )
CASH AND EQUIVALENTS AT
BEGINNING OF PERIOD 74.4 106.4
CASH AND
EQUIVALENTS AT END OF PERIOD $ 63.2
$ 95.8
Investor Contact:Bertner Advisors, LLCMonique Kosse,
860-940-0352Monique.Kosse@BertnerAdvisors.com
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