- Q4'16 revenue $532.2 million
increased 6% in constant currency from the prior year
period
- FY'16 revenue of $1.85 billion
increased 6% in constant currency from the prior year
period
- Catalent's proprietary OptiShell™
softgel technology has been selected for use in OPKO Health's NDA
for RAYALDEE® and has been approved by the U.S.
FDA
- Announced the launch of our
FastChain™ service, for greater speed, flexibility and efficiency
in the management and distribution of global clinical trial
supplies
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 fourth quarter and fiscal year 2016, which ended
June 30, 2016.
Fourth quarter 2016 revenue of $532.2 million increased 4% as
reported and increased 6% in constant currency from $510.1 million
reported in the fourth quarter a year ago. For the fiscal year
2016, revenue was $1.85 billion, an increase of 1% as reported and
an increase of 6% in constant currency. All three of the Company’s
reporting segments posted constant currency revenue growth for the
fourth quarter and the fiscal year, led by a double-digit increase
in the Clinical Supply Services segment for the fiscal year.
Fourth quarter 2016 net earnings attributable to Catalent were
$58.1 million, or $0.46 per diluted share, compared to net earnings
of $153.7 million, or $1.22 per diluted share, in the fourth
quarter a year ago. The decrease in profitability was primarily due
to the release of a valuation allowance on deferred tax assets of
$136.7 million, which was recorded as a tax benefit in the fourth
quarter of the prior fiscal year. Fiscal year 2016 net earnings
attributable to Catalent were $111.5 million, or $0.89 per diluted
share, compared to net earnings of $212.2 million, or $1.75 per
diluted share, for the same period a year ago.
Fourth quarter 2016 EBITDA from continuing operations of $134.4
million increased 10% from $121.8 million in the fourth quarter a
year ago. Fiscal year 2016 EBITDA from continuing operations was
$374.3 million, an increase of 4% from $360.2 million for the same
period a year ago.
Fourth quarter 2016 Adjusted EBITDA, as referenced in the GAAP
to non-GAAP reconciliation provided later in this release, was
$141.8 million, or 26.6% of revenue, compared to $136.3 million, or
26.7% of revenue, in the fourth quarter a year ago. This represents
an increase of 7% on a constant currency basis. Fiscal year 2016
Adjusted EBITDA of $401.2 million, or 21.7% of revenue, compared to
$443.1 million, or 24.2% of revenue, for the same period a year
ago.
Fourth quarter 2016 Adjusted Net Income, as referenced in the
GAAP to non-GAAP reconciliation provided later in this release, was
$64.9 million, or $0.52 per diluted share, compared to Adjusted Net
Income of $33.0 million, or $0.26 per diluted share, in the fourth
quarter a year ago. Fiscal year 2016 Adjusted Net Income was $153.2
million, or $1.22 per diluted share, compared to Adjusted Net
Income of $167.9 million, or $1.38 per diluted share, for the same
period a year ago.
"While fiscal year 2016 was clearly a challenging year overall
for the company, I'm encouraged by our favorable Q4 results, which
included constant currency revenue growth of 6% and Adjusted EBITDA
growth of 7%,” said John Chiminski, President and Chief Executive
Officer of Catalent, Inc. “We will look to carry this momentum into
our 2017 fiscal year, which we expect will be a strong year. We
continue to believe that ongoing market consolidation and strong
demand for fewer, bigger, and better suppliers in our dynamic
industry positions us well for future organic growth.”
In fiscal 2016, we engaged in a business reorganization to
better align our internal business unit structure with our "Follow
the Molecule" strategy. Under the revised structure, we have
created a Drug Delivery Solutions ("DDS") operating segment which
encompasses all of our modified release technologies; pre-filled
syringes and other injectable formats; blow-fill seal unit dose
development and manufacturing; biologic cell line development;
analytical services; micronization technologies; and other
conventional oral dose forms under a single DDS management team.
Additionally, as part of the re-alignment, we have created a
stand-alone Clinical Supply Services ("CSS") operating segment and
management team with a sole focus on providing global clinical
supply chain management services that aim to speed our customers'
drugs to market. Further, as a result of the business unit
re-alignment, our Softgel Technologies business now reports as a
distinct operating segment. For financial reporting purposes, we
present three financial reporting segments based on criteria
established by U.S. GAAP: Softgel Technologies, Drug Delivery
Solutions and Clinical Supply Services.
Fourth Quarter 2016 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $224.8 million
for the fourth quarter of fiscal 2016, an increase of 1% as
reported, or 4% in constant currency, compared to the fourth
quarter a year ago. This performance on a constant currency basis
was attributable to higher end market volume demand for consumer
health and prescription products, primarily in North America, Latin
America, and Asia Pacific.
Revenue from the Drug Delivery Solutions segment was $238.2
million for the fourth quarter of fiscal 2016, an increase of 9% as
reported, or 10% in constant currency, over the fourth quarter a
year ago. This strong performance was primarily driven by increased
volumes related to fee-for-service development work and analytical
testing in the U.S., and increased volumes related to our biologics
and blow-fill-seal offerings.
Revenue from the Clinical Supply Services segment was $81.5
million for the fourth quarter of fiscal 2016, an increase of 1% as
reported, or 4% in constant currency over the fourth quarter a year
ago. This growth was primarily due to increased volume related to
core manufacturing, packaging, storage and distribution
activities.
Segment EBITDA Highlights
Softgel Technologies segment EBITDA in the fourth quarter of
2016 was $59.0 million, an increase of 1% as reported, or 5% in
constant currency, versus the fourth quarter a year ago. The
increase was primarily attributable to the higher end market volume
demand for consumer health and prescription softgel products across
North America, Latin America, and Asia Pacific, as well as from
effective absorption of fixed costs through higher capacity
utilization across the network.
Drug Delivery Solutions segment EBITDA in the fourth quarter of
2016 was $75.7 million, an increase of 13% as reported, or 15% in
constant currency. The increase was primarily driven by increased
volumes related to fee-for-service development work and analytical
testing in the U.S., increased volumes related to our biologics
offering, and higher demand for products utilizing our
blow-fill-seal technology platform.
Clinical Supply Services segment EBITDA in the fourth quarter of
2016 was $13.7 million, a decrease of 11% as reported, or 7% in
constant currency. The decrease was primarily attributable to
increased costs related to a business update to enhance operational
efficiency, as well further investments in the segment's
infrastructure, project management and business development
efforts.
Fiscal 2016 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $775.0 million
for fiscal year 2016, a decrease of 2% as reported, or an increase
of 7% in constant currency, over the same period a year ago. This
improvement on a constant currency basis was attributable to higher
end market volume demand for lower margin consumer health products
primarily in Asia Pacific. Partially offsetting increased revenue
was a decrease in volume of prescription products primarily in
Europe due to the temporary suspension of operations at our
facility in Beinheim, France, which occurred between November 2015
and April 2016.
Revenue from the Drug Delivery Solutions segment was $806.4
million for fiscal year 2016, an increase of 1% as reported, or 4%
in constant currency, over the same period a year ago. This growth
was primarily attributable to analytical services driven by
increased sales volumes related to fee-for-service development work
and analytical testing in the U.S. Net revenue also increased as a
result of increased volume from our biologics offerings and
increased volume of products utilizing our blow-fill-seal
technology platform. Partially offsetting these increases was
decreased sales from our oral delivery solutions platform due to
lower end customer demand for certain higher margin offerings
primarily in our U.S. operations and lower revenue from product
participation related activities.
Revenue from the Clinical Services Supplies segment was $307.5
million for fiscal year 2016, an increase of 7% as reported, or 10%
in constant currency, over the same period a year ago. This growth
was primarily due to due to increased lower-margin comparator
sourcing volume and increased volume related to storage and
distribution revenue.
Segment EBITDA Highlights
Softgel Technologies segment EBITDA for fiscal year 2016 was
$163.8 million, a decrease of 6% as reported, or an increase of 4%
on a constant currency basis. The increase was primarily driven by
increased sales volumes of our lower margin consumer health
products and more effective absorption of fixed costs through
higher capacity utilization, partially offset by the temporary
suspension of operations at our facility in Beinheim, France which
occurred between November 2015 and April 2016.
Drug Delivery Solutions segment EBITDA for fiscal year 2016 was
$215.2 million, a decrease of 7% as reported, or 4% in constant
currency. The decline in profitability was primarily due to reduced
end customer demand reducing volume of certain higher margin
offerings and lower absorption of fixed manufacturing costs within
our oral delivery solutions platform, partially offset by increased
profit generated by our biologics offering and from products
utilizing our blow-fill-seal technology platform.
Clinical Supply Services segment EBITDA for fiscal year 2016 was
$53.2 million, a decrease of 6% as reported, or a decrease of 2% in
constant currency. This decrease was primarily attributable to a
shift to lower-margin comparator sourcing volume and increased cost
related to operational efficiency activities.
Additional Financial Highlights
Fourth quarter 2016 gross margin of 35.3% declined 30 basis
points from 35.6% in the fourth quarter a year ago. For fiscal year
2016, gross margin was 31.8%, a decrease of 180 basis points from
33.6% for the same period a year ago. The decrease was primarily
attributable to the temporary suspension of operations at our
facility in Beinheim, France which occurred between November 2015
and April 2016.
Fourth quarter 2016 selling, general and administrative expenses
were $89.5 million and represented 16.8% of revenue, compared to
$86.9 million, or 17.0% of revenue, in the fourth quarter a year
ago. For fiscal 2016, selling, general and administrative expenses
were $358.1 million and represented 19.4% of revenue, compared to
$337.3 million, or 18.4% of revenue, for the same period 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 $292.1 million as of June 30, 2016, a 9%
increase compared to the third quarter of fiscal year 2016. The
segment also recorded net new business wins of $106.4 million
during the fourth quarter, which represented a 10% increase year
over year. The segment’s trailing-twelve-month book-to-bill ratio
was 1.2x.
Balance Sheet and Liquidity
As of June 30, 2016, Catalent had $1.8 billion in net debt,
essentially unchanged compared to the debt level as of June 30,
2015. As of June 30, 2016, Catalent’s net leverage ratio was 4.3x,
compared to 3.9x as of June 30, 2015.
Fiscal Year 2017 Outlook
For fiscal year 2017, the company expects revenue in the range
of $1.920 billion to $1.995 billion. Catalent expects Adjusted
EBITDA in the range of $430 million to $455 million and Adjusted
Net Income in the range of $165 million to $190 million. These
guidance ranges are consistent with the organic, constant currency
long-term CAGR growth expectations of 4-6% for revenue and 6-8% for
Adjusted EBITDA. The Company expects capital expenditures in the
range of $125 million to $135 million and fully diluted share count
in the range of 126 million to 128 million shares on a weighted
average basis.
Earnings Webcast
The Company’s management will host a webcast to discuss the
results at 4:45 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. 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 more than 9,200 people, including over 1,400
scientists, at 31 facilities across 5 continents and in fiscal 2016
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 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). 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) 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) 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 reconciliation of net earnings/(loss) to Adjusted Net
Income.
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; 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 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, 2015, 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
SubsidiariesConsolidated Statements of
Operations(Dollars in millions, except per share
data)
Three Months Ended June
30,
FX impact(unfavorable) /
favorable
Constant
CurrencyIncrease/(Decrease)
2016 2015 Change $
Change% Net revenue $ 532.2 $ 510.1 $ (10.3 ) $ 32.4 6 %
Cost of sales 344.4 328.4 (5.3 )
21.3 6 % Gross margin 187.8 181.7 (5.0 ) 11.1 6 %
Selling, general and administrative expenses 89.5 86.9 (1.0 ) 3.6 4
% Impairment charges and (gain)/loss on sale of assets 1.9 0.9 —
1.0 * Restructuring and other 5.6 4.7
(0.5 ) 1.4 30 % Operating earnings 90.8 89.2
(3.5 ) 5.1 6 % Interest expense, net 21.8 22.6 (0.2 ) (0.6 ) (3 )%
Other (income)/expense, net (8.5 ) 3.9
(0.3 ) (12.1 ) * Earnings from continuing operations, before
income taxes 77.5 62.7 (3.0 ) 17.8 28 % Income tax
expense/(benefit) 19.4 (90.8 ) (0.8 )
111.0 * Earnings from continuing operations 58.1
153.5 (2.2 ) (93.2 ) (61 )% Net earnings/(loss) from discontinued
operations, net of tax — (0.1 ) —
0.1 * Net earnings 58.1 153.4 (2.2 ) (93.1 )
(61 )% Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax — (0.3 ) —
0.3 * Net earnings attributable to Catalent $ 58.1
$ 153.7 $ (2.2 ) $ (93.4 ) (61 )%
Amounts
attributable to Catalent:
Earnings from continuing operations less
net income(loss) attributable to noncontrolling interest
58.1 153.8 Net earnings attributable to Catalent 58.1 153.7
Weighted average shares outstanding 124.8 124.6 Weighted average
diluted shares outstanding 125.9 126.2
Earnings per share
attributable to Catalent: Basic Earnings/(loss) from
continuing operations 0.47 1.23 Net earnings/(loss) 0.47 1.23
Diluted Earnings/(loss) from continuing operations 0.46 1.22
Net earnings/(loss) 0.46 1.22
* - percentage not meaningful
Catalent, Inc. and
SubsidiariesSelected Segment Financial Data(Dollars
in millions)
Three Months Ended June
30,
FX impact(unfavorable)
/favorable
Constant
CurrencyIncrease/(Decrease)
2016 2015 Change $
Change% Softgel Technologies Net revenue $ 224.8 $
221.7 $ (6.5 ) $ 9.6 4 % Segment EBITDA 59.0 58.7 (2.9 ) 3.2 5 %
Drug Delivery Solutions Net revenue 238.2 218.7 (1.5 ) 21.0
10 % Segment EBITDA 75.7 66.9 (1.0 ) 9.8 15 %
Clinical Supply
Services Net revenue 81.5 80.6 (2.1 ) 3.0 4 % Segment EBITDA
13.7 15.4 (0.6 ) (1.1 ) (7 )% Inter-segment revenue elimination
(12.3 ) (10.9 ) (0.2 ) (1.2 ) 11 % Unallocated Costs (14.0 ) (19.2
) 0.8 4.4 (23 )%
Combined Total
Net revenue $ 532.2 $ 510.1 $ (10.3 ) $ 32.4
6 % EBITDA from
continuing operations $ 134.4 $ 121.8 $ (3.7 ) $ 16.3
13 %
Refer to the Company's description of non-GAAP measures
including Segment EBITDA as referenced above.
Catalent, Inc. and
SubsidiariesConsolidated Statements of
Operations(Dollars in millions, except per share
amounts)
Twelve Months Ended June
30,
FX impact(unfavorable)
/favorable
Constant
CurrencyIncrease/(Decrease)
2016 2015 Change $
Change% Net revenue $ 1,848.1 $ 1,830.8 $ (95.4 ) $ 112.7 6
% Cost of sales 1,260.5 1,215.5
(69.1 ) 114.1 9 % Gross margin 587.6 615.3 (26.3 )
(1.4 ) * Selling, general and administrative expenses 358.1 337.3
(9.5 ) 30.3 9 % Impairment charges and (gain)/loss on sale of
assets 2.7 4.7 0.2 (2.2 ) (47 )% Restructuring and other 9.0
13.4 (0.6 ) (3.8 ) (28 )%
Operating earnings 217.8 259.9 (16.4 ) (25.7 ) (10 )% Interest
expense, net 88.5 105.0 (1.5 ) (15.0 ) (14 )% Other
(income)/expense, net (15.6 ) 42.4 (2.6
) (55.4 ) * Earnings from continuing operations before
income taxes 144.9 112.5 (12.3 ) 44.7 40 % Income tax
expense/(benefit) 33.7 (97.7 ) (4.0 )
135.4 * Earnings from continuing operations 111.2
210.2 (8.3 ) (90.7 ) (43 )% Net earnings from discontinued
operations, net of tax — 0.1 —
(0.1 ) * Net earnings 111.2 210.3 (8.3 ) (90.8 ) (43
)% Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax (0.3 ) (1.9 ) —
1.6 (84 )% Net earnings attributable to Catalent $
111.5 $ 212.2 $ (8.3 ) $ (92.4 ) (44 )%
Amounts attributable to Catalent:
Earnings from continuing operations less
netincome (loss) attributable to noncontrolling interest
111.5 212.1 Net earnings attributable to Catalent 111.5 212.2
Weighted average shares outstanding 124.8 119.6 Weighted
average diluted shares outstanding 125.9 121.3
Earnings
per share attributable to Catalent: Basic Earnings from
continuing operations 0.89 1.77 Net earnings 0.89 1.77
Diluted Earnings from continuing operations 0.89 1.75 Net
earnings 0.89 1.75
* - percentage not meaningful
Catalent, Inc. and
SubsidiariesSelected Segment Financial Data(Dollars
in millions)
Twelve Months Ended June
30,
FX impact(unfavorable)
/favorable
Constant
CurrencyIncrease/(Decrease)
2016 2015 Change $
Change% Softgel Technologies Net revenue $ 775.0 $
787.5 $ (68.2 ) $ 55.7 7 % Segment EBITDA 163.8 173.6 (15.9 ) 6.1 4
%
Drug Delivery Solutions Net revenue 806.4 798.3 (20.4 )
28.5 4 % Segment EBITDA 215.2 230.7 (5.2 ) (10.3 ) (4 )%
Clinical Supply Services Net revenue 307.5 288.4 (9.4 ) 28.5
10 % Segment EBITDA 53.2 56.7 (2.4 ) (1.1 ) (2 )%
Inter-segment
revenue elimination (40.8 ) (43.4 ) 2.6 — * Unallocated Costs
(57.9 ) (100.8 ) 3.3 39.6 (39 )%
Combined Total
Net revenue $ 1,848.1 $ 1,830.8
$ (95.4 ) $ 112.7 6 %
EBITDA from continuing operations $ 374.3 $ 360.2
$ (20.2 ) $ 34.3 10 %
Refer to the Company's description of non-GAAP measures
including Segment EBITDA as referenced above.
Catalent, Inc. and
SubsidiariesReconciliation of Earnings/(Loss) from
Continuing Operations to EBITDA from Continuing Operations and
Adjusted EBITDA*(Dollars in millions)
QuarterEnded
Year Ended Quarter Ended Year
Ended
June 30, 2015
June 30, 2015
September 30,
2015
December31, 2015
March 31, 2016
June 30, 2016
June 30, 2016
Earnings from continuing operations $ 153.5 $ 210.2 $ 11.7 $ 30.7 $
10.7 $ 58.1 $ 111.2 Interest expense, net 22.6 105.0 22.7 22.3 21.7
21.8 88.5 Income tax expense/(benefit) (90.8 ) (97.7 ) 2.0 9.2 3.1
19.4 33.7 Depreciation and amortization 36.2 140.8 35.5 35.2 34.8
35.1 140.6 Noncontrolling interest 0.3 1.9 0.2
0.1 — — 0.3 EBITDA from continuing
operations 121.8 360.2 72.1 97.5 70.3 134.4 374.3 Equity
compensation 2.6 9.0 2.6 2.5 3.6 2.1 10.8 Impairment charges and
(gain)/loss on sale of assets 0.9 4.7 1.2 (0.1 ) (0.3 ) 1.9 2.7
Financing related expenses
and other
— 21.8 — — — — — US GAAP Restructuring 4.7 13.4 1.0 0.6 1.8 5.6 9.0
Acquisition, integration and other special items 3.7 13.8 1.0 3.6
7.8 5.8 18.2 Foreign Exchange loss/(gain) (included in other, net)
(1) 1.5 (2.7 ) (0.5 ) (3.3 ) (2.0 ) (4.7 ) (10.5 ) Other
adjustments 1.1 22.9 0.2 0.3 (0.5 )
(3.3 ) (3.3 ) Subtotal 136.3 443.1 77.6 101.1 80.7 141.8 401.2
Estimated cost savings — — — — —
— — Adjusted EBITDA $ 136.3 $ 443.1 $
77.6 $ 101.1 $ 80.7 $ 141.8 $ 401.2
FX impact (unfavorable) (4.1 ) (20.8 ) Adjusted EBITDA -
Constant Currency $ 145.9 $ 422.0
* Refer to the Company's description of non-GAAP measures
including Adjusted EBITDA as referenced above.
(1) Foreign exchange gain of $10.5 million for the twelve
months ended June 30, 2016 included $16.3 million of non-cash
unrealized foreign currency exchange rate gains primarily driven by
gains of $9.0 million related to foreign trade receivables and
payables. The foreign exchange adjustment was also affected by the
exclusion of realized foreign currency exchange rate losses from
the non-cash and cash settlement of inter-company loans of $5.8
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)
Note: In response to a
recent regulatory focus on Non-GAAP performance metrics, the
Company has revised the calculation for Adjusted Net Income by
replacing the cash tax effects in the periods presented with the
income tax expense, discrete tax items and estimated tax effect of
reconciling items as described in the footnotes herein.
Prior years end and interim periods presented have been re-cast
to reflect the revised calculation.
QuarterEnded
Year Ended Quarter Ended Year Ended
June 30,2015
June 30,2015
September30, 2015
December31, 2015
March 31,2016
June 30,2016
June 30,2016
Net earnings $ 153.4 $ 210.3 $ 11.7 $ 30.7 $ 10.7 $ 58.1 $ 111.2
Net earnings/(loss) from discontinued operations, net of tax (0.1 )
0.1 — — — — — Earnings
from continuing operations, net of tax 153.5 210.2 11.7 30.7 10.7
58.1 111.2 Amortization (1) 11.8 46.5 11.9 11.7 11.4 11.4 46.4 Net
(earnings)/loss attributable to noncontrolling interest, net of tax
0.3 1.9 0.2 0.1 — — 0.3 Equity compensation 2.6 9.0 2.6 2.5 3.6 2.1
10.8 Impairment charges and loss on sale of assets 0.9 4.7 1.2 (0.1
) (0.3 ) 1.9 2.7 Financing related expenses — 21.8 — — — — — U.S.
GAAP restructuring 4.7 13.4 1.0 0.6 1.8 5.6 9.0 Acquisition,
integration and other special items 3.7 13.8 1.0 3.6 7.8 5.8 18.2
Foreign exchange loss/(gain) (included in other (income)/expense,
net) 1.5 (2.7 ) (0.5 ) (3.3 ) (2.0 ) (4.7 ) (10.5 ) Other
adjustments 1.1 22.9 0.2 0.3 (0.5 ) (3.3 ) (3.3 ) Estimated tax
effect of adjustments(2) (36.6 ) (42.7 ) (5.7 ) (4.4 ) (6.5 ) (6.1
) (22.7 ) Discrete income tax expense/(benefit) items(3) (110.5 )
(130.9 ) (0.6 ) (2.8 ) 0.4 (5.9 ) (8.9 ) Adjusted net income
$ 33.0 $ 167.9 $ 23.0 $ 38.9 $ 26.4
$ 64.9 $ 153.2
* 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
Reconciliation of Net Earnings/(Loss)
to Adjusted Net Income/(Loss)
(Dollars in millions)
Note: In response to a
recent regulatory focus on Non-GAAP performance metrics, the
Company has revised the calculation for Adjusted Net Income by
replacing the cash tax effects in the periods presented with the
income tax expense, discrete tax items and estimated tax effect of
reconciling items as described in the footnotes herein.
Prior years end and interim periods presented have been re-cast
to reflect the revised calculation.
Year Ended Quarter Ended
YearEnded
June 30,2013
June 30,2014
September30, 2014
December31, 2014
March 31,2015
June 30,2015
June 30,2015
Net earnings / (loss) $ (49.7 ) $ 15.2 $ (19.9 ) $ 46.0 $ 30.8 $
153.4 $ 210.3 Net earnings/(loss) from discontinued operations, net
of tax 1.2 (2.7 ) 0.4 (0.2 ) — (0.1 ) 0.1
Earnings/(loss) from continuing operations, net of tax (50.9
) 17.9 (20.3 ) 46.2 30.8 153.5 210.2 Amortization (1) 43.4 42.5
11.3 11.6 11.8 11.8 46.5 Net (earnings)/loss attributable to
noncontrolling interest, net of tax 0.1 1.0 0.4 0.5 0.7 0.3 1.9
Equity compensation 2.8 4.5 1.5 2.7 2.2 2.6 9.0 Impairment charges
and loss on sale of assets 5.2 3.2 — 3.5 0.3 0.9 4.7 Financing
related expenses 16.9 11.0 20.6 1.2 — — 21.8 U.S. GAAP
restructuring 18.4 19.7 1.4 2.1 5.2 4.7 13.4 Acquisition,
integration and other special items 15.5 9.8 3.2 4.4 2.5 3.7 13.8
Foreign exchange loss/(gain) (included in other (income)/expense,
net) 5.7 (3.5 ) (3.7 ) 0.5 (1.0 ) 1.5 (2.7 ) Other adjustments 4.2
0.3 23.8 (3.2 ) 1.2 1.1 22.9 Sponsor advisory fee 12.4 12.9 — — — —
— Estimated tax effect of adjustments(2) (14.2 ) (8.3 ) (1.1 ) (2.2
) (2.8 ) (36.6 ) (42.7 ) Discrete income tax expense/(benefit)
items (3)
13.1 22.3 (4.8 ) (15.2 ) (0.4 ) (110.5 ) (130.9 )
Adjusted net income $ 72.6 $ 133.3 $ 32.3 $
52.1 $ 50.5 $ 33.0 $ 167.9
Adjustments made to revise previously reported Adjusted Net Income:
Income tax expense/(benefit) (4) 27.0 49.5 (14.0 ) (4.1 ) 11.2
(90.8 ) (97.7 ) Cash taxes (paid)/refunded (4) (14.2 ) (21.1 ) (9.9
) (8.2 ) (5.6 ) (10.8 ) (34.5 ) Estimated cash tax
(savings)/expense attributable to reconciling items (4) (4.1 ) (5.3
) (0.9 ) (1.3 ) (1.7 ) (1.9 ) (5.8 ) Discrete income tax
expense/(benefit) items(2) (13.1 ) (22.3 ) 4.8 15.2 0.4 110.5 130.9
Estimated tax effect of adjustments(3) 14.2 8.3
1.1 2.2 2.8 36.6 42.7
Previously Reported Adjusted Net Income $ 82.4
$ 142.4 $ 13.4 $ 55.9 $ 57.6 $
76.6 $ 203.5 (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. (4) Represents the
cash basis tax adjustments which were removed from the previous
Adjusted Net Income calculation.
Catalent, Inc. and
SubsidiariesConsolidated Balance Sheets(Dollars in
millions)
June 30, 2016
June 30, 2015
ASSETS Current assets: Cash and cash equivalents $ 131.6 $
151.3 Trade receivables, net 414.8 372.4 Inventories 154.8 132.9
Prepaid expenses and other 89.0 80.9 Total current assets
790.2 737.5 Property, plant, and equipment, net 905.8 885.2 Other
non-current assets, including intangible assets 1,395.1
1,515.6
Total assets $ 3,091.1 $
3,138.3 LIABILITIES, REDEEMABLE NONCONTROLLING
INTEREST, AND SHAREHOLDERS' EQUITY Current liabilities: Current
portion of long-term obligations and other short-term borrowings $
27.7 $ 23.8 Accounts payable 143.7 128.2 Other accrued liabilities
219.8 247.0 Total current liabilities 391.2 399.0 Long-term
obligations, less current portion 1,832.8 1,857.0 Other non-current
liabilities 231.2 242.5 Redeemable noncontrolling interest — 5.8
Commitment and contingencies (1) Total shareholders' equity 635.9
634.0
Total liabilities, redeemable noncontrolling
interest and shareholders' equity $ 3,091.1
$ 3,138.3
(1) Please refer to note 16 of the consolidated financial
statements within the Company’s Annual Report on Form 10-K for the
fiscal year ended June 30, 2016.
Catalent, Inc. and
SubsidiariesConsolidated Statements of Cash
Flows(Dollars in millions)
Twelve Months Ended June
30,
2016 2015 CASH FLOWS FROM OPERATING
ACTIVITIES: Net cash provided by/(used in) operating activities
from continuing operations $ 155.3 $ 171.7 Net cash provided
by/(used in) operating activities from discontinued operations —
0.1
Net cash provided by/(used in) operating
activities 155.3 171.8 CASH
FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and
equipment and other productive assets (139.6 ) (141.0 ) Proceeds
from sale of property and equipment 1.9 — Payment for acquisitions,
net — (130.8 ) Net cash provided by/(used in) investing
activities from continuing operations (137.7 ) (271.8 ) Net cash
provided by/(used in) investing activities from discontinued
operations — —
Net cash provided by/(used in)
investing activities (137.7 ) (271.8
) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in
short-term borrowings 2.3 — Proceeds from borrowing, net — 150.4
Payments related to long-term obligations (18.6 ) (879.8 ) Call
premium payments and financing fees paid — (12.6 ) Equity
contribution/(redemption) — 948.8 Purchase of Redeemable
Noncontrolling Interest Shares (5.8 ) — Cash paid, in lieu of
equity, for tax withholding obligations (8.7 ) (10.3 ) Net cash
(used in)/provided by financing activities from continuing
operations (30.8 ) 196.5 Net cash (used in)/provided by financing
activities from discontinued operations — —
Net
cash (used in)/provided by financing activities (30.8
) 196.5 Effect of foreign currency on cash
(6.5 ) (19.6 )
NET INCREASE/(DECREASE) IN CASH AND
EQUIVALENTS (19.7 ) 76.9
CASH AND EQUIVALENTS AT BEGINNING
OF PERIOD 151.3 74.4
CASH AND EQUIVALENTS AT
END OF PERIOD $ 131.6 $
151.3
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160829005886/en/
Investors:Catalent, Inc.Thomas Castellano,
732-537-6325investors@catalent.com
Catalent (NYSE:CTLT)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Catalent (NYSE:CTLT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024