- Q4'17 revenue $616.9 million
increased 16% as-reported, or 19% in constant currency from the
prior-year period.
- FY'17 revenue $2,075.4 million
increased 12% as-reported, or 15% in constant currency from the
prior-year period.
- Entered into an exclusive long-term
supply agreement to produce the next generation of Pfizer's leading
OTC pain relief product with the launch of new Advil Liqui-Gels
Minis.
- Increased spray drying and roller
compaction capacity at our San Diego, California facility in
response to market demand for solubility enhancement
solutions.
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 full year of fiscal 2017, which
ended June 30, 2017.
Fourth quarter 2017 revenue of $616.9 million increased 16% as
reported and increased 19% in constant currency from $532.2 million
reported in the fourth quarter a year ago. For fiscal year 2017,
revenue was $2,075.4 million and increased 12% as reported and 15%
in constant currency, compared to the $1,848.1 million recorded in
the prior year. All three of the Company’s reporting segments
posted double-digit constant-currency revenue growth for the fourth
quarter and fiscal year when compared to the comparable periods of
the prior year.
Fourth quarter 2017 net earnings attributable to Catalent were
$61.8 million, or $0.49 per diluted share, compared to net earnings
of $58.1 million, or $0.46 per diluted share, in the fourth quarter
a year ago. For fiscal year 2017, net earnings attributable to
Catalent were $109.8 million, or $0.87 per diluted share, compared
to net earnings of $111.5 million, or $0.89 per diluted share, in
the prior year.
Fourth quarter 2017 EBITDA from continuing operations of $130.5
million, as referenced in the GAAP to non-GAAP reconciliation
provided later in this release, decreased 3% from $134.4 million in
the fourth quarter a year ago. For fiscal year 2017, EBITDA from
continuing operations was $372.2 million, in-line with the $374.3
million recorded in the prior year.
Fourth quarter 2017 Adjusted EBITDA (see the non-GAAP
reconciliation for a discussion of this metric) was $159.1 million,
or 25.8% of revenue, compared to $141.8 million, or 26.6% of
revenue, in the fourth quarter a year ago. This represents an
increase of 12% as reported and an increase of 15% on a
constant-currency basis.
Fourth quarter 2017 Adjusted Net Income (see the non-GAAP
reconciliation) was $82.6 million, or $0.65 per diluted share,
compared to Adjusted Net Income of $64.9 million, or $0.52 per
diluted share, in the fourth quarter a year ago.
"We're pleased with our performance during the fourth quarter,
where we recorded double-digit organic revenue growth and segment
EBITDA 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. "Fiscal year 2017 was
strong across many fronts with financial performance above our
long-term outlook, significant levels of free cash flow generation,
and the completion of two strategic acquisitions, Pharmatek and
Accucaps, both of which are already creating value for the company
and our shareholders."
Fourth Quarter 2017 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $257.1 million
for the fourth quarter of fiscal 2017, an increase of 14% as
reported, or 16% in constant currency, compared to the fourth
quarter a year ago. The constant-currency growth was attributable
to higher end-market demand for prescription products in Europe.
Increased demand for prescription and consumer health products in
North America also contributed to the growth, but was partially
offset by lower end-market demand for consumer health products in
Asia Pacific. The acquisition of Accucaps contributed 14 percentage
points of the segment's constant-currency revenue growth during the
quarter.
Revenue from the Drug Delivery Solutions segment was $270.2
million for the fourth quarter of fiscal 2017, an increase of 13%
as reported, or 16% in constant currency, over the fourth quarter a
year ago. The growth was primarily driven by favorable end-customer
demand for certain higher margin offerings within our oral delivery
solutions platform and increased volume related to our biologics
offerings. The acquisition of Pharmatek contributed 3 percentage
points of the segment's constant-currency revenue growth during the
quarter.
Revenue from the Clinical Supply Services segment was $99.3
million for the fourth quarter of fiscal 2017, an increase of 22%
as reported, or an increase of 28% in constant currency over the
fourth 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 fourth quarter of fiscal 2017 was
$65.2 million, an increase of 11% as reported, or 13% in constant
currency, versus the fourth quarter a year ago. The increase was
primarily attributable to increased volume for prescription
products in Europe and North America; partially offset by lower
end-market demand for consumer health products in Asia Pacific. The
acquisition of Accucaps contributed 9 percentage points of the
constant-currency growth in the segment EBITDA during the
quarter.
Drug Delivery Solutions segment EBITDA in the fourth quarter of
fiscal 2017 was $90.9 million, an increase of 20% as reported, or
23% in constant currency. The increase was primarily driven by
increased demand for certain higher margin offerings with our oral
delivery solutions platform, and increased volume related to our
biologics offerings. The acquisition of Pharmatek contributed 2
percentage points of the growth in segment EBITDA during the
quarter.
Clinical Supply Services segment EBITDA in the fourth quarter of
fiscal 2017 was $17.1 million, an increase of 25% as reported, or
34% in constant currency. The increase was primarily attributable
to higher demand for our core storage, distribution, manufacturing
and packaging services. Increased volume related to lower-margin
comparator sourcing activities also modestly contributed to the
segment's EBITDA growth.
Fiscal 2017 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $855.3 million
for fiscal year 2017, an increase of 10% as reported, or 12% in
constant currency, compared to a year ago. The constant-currency
growth was attributable to higher end-market demand for
prescription products in Europe, which includes increased volume at
a facility that produced at lower production levels in the prior
year due to a temporary suspension. Increased demand for
prescription and consumer health products in North America also
contributed to the growth, but this was partially offset by lower
end-market demand for consumer health products in Asia Pacific. The
acquisition of Accucaps contributed 6 percentage points of the
segment's constant-currency revenue growth during the period.
Revenue from the Drug Delivery Solutions segment was $910.1
million for fiscal year 2017, an increase of 13% as reported, or
16% in constant currency, over a year ago. The strong performance
was primarily driven by favorable end-customer demand for certain
higher margin offerings within our U.S. oral delivery solutions
platform, increased volume related to our biologics offerings, and
increased activity within the analytical services platform. The
acquisition of Pharmatek contributed 3 percentage points of the
segment's constant-currency revenue growth during the fiscal
year.
Revenue from the Clinical Supply Services segment was $348.8
million for fiscal year 2017, an increase of 13% as reported, or an
increase of 20% in constant currency over the prior year. 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 for fiscal year 2017 was
$190.5 million, an increase of 16% as reported, or 20% in constant
currency, compared to a year ago. The increase was primarily
attributable to a favorable mix shift to higher margin prescription
products in Europe and North America, and increased volume and
reduced costs at the facility that was suspended in the prior year.
The acquisition of Accucaps contributed 5 percentage points of the
constant-currency segment EBITDA growth during the period.
Drug Delivery Solutions segment EBITDA in fiscal year 2017 was
$242.4 million, an increase of 13% as reported, or 17% in constant
currency, over the prior year, due to increased volume and
favorable product mix within our analytical services platform and
biologics offerings, as well as due to increased volumes related to
our integrated oral solids development and manufacturing
capabilities within our oral delivery solutions platform. The
acquisition of Pharmatek contributed 2 percentage points of the
constant-currency segment EBITDA growth during the fiscal year.
Clinical Supply Services segment EBITDA in fiscal year 2017 was
$54.9 million, an increase of 3% as reported, or 14% in constant
currency, compared to a year ago. The increase was primarily
attributable to higher demand for our core storage, distribution,
manufacturing and packaging services. Increased volume related to
lower-margin comparator sourcing activities also modestly
contributed to the segment EBITDA growth.
Additional Financial Highlights
Fourth quarter 2017 gross margin of 34.8% decreased 50 basis
points as-reported, from 35.3% in the fourth quarter a year ago.
The decrease was primarily attributable to unfavorable product mix
within the Softgel Technologies segment and the addition of the
Accucaps acquisition. Gross margin of 31.5% in fiscal year 2017
declined 30 basis points as-reported, from the 31.8% recorded a
year ago. The decline was primarily attributable to unfavorable
product mix within the Clinical Supply Services segment.
Fourth quarter 2017 selling, general and administrative expenses
were $107.3 million and represented 17.4% of revenue, compared to
$89.5 million, or 16.8% of revenue, in the fourth quarter a year
ago. Selling, general and administrative expenses for fiscal year
2017 were $402.6 million and represented 19.4% of revenue, compared
to $358.1 million, or 19.4% of revenue, in the prior year.
Backlog for the Clinical Supply Services segment, defined as
estimated future service revenues from work not yet completed under
signed contracts was $338.3 million as of June 30, 2017, a 3%
increase compared to the third quarter of fiscal year 2017. The
segment also recorded net new business wins of $111.2 million
during the fourth quarter, which represented a 4% increase year
over year. The segment’s trailing-twelve-month book-to-bill ratio
was 1.1x.
Balance Sheet and Liquidity
As of June 30, 2017, Catalent had $2.1 billion in total debt,
and $1.8 billion in total debt net of cash and short-term
investments, which is essentially in-line with the total and net
debt levels as of March 31, 2017. As of June 30, 2017, Catalent’s
total net leverage ratio was 4.0x, an improvement compared to the
4.2x recorded in the prior quarter and the 4.3x recorded at the end
of fiscal year 2016.
Fiscal Year 2018 Outlook
For fiscal year 2018, the company expects revenue in the range
of $2.16 billion to $2.24 billion. Catalent expects Adjusted EBITDA
in the range of $477 million to $497 million and Adjusted Net
Income in the range of $192 million to $212 million. These guidance
ranges continue to be 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
self-funded capital expenditures in the range of $145 million to
$155 million and fully diluted share count in the range of 127
million to 129 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 over 10,000 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 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, 2017, filed today 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
Constant
CurrencyIncrease/(Decrease)
2017 2016 Change $
Change % Net revenue $ 616.9 $ 532.2 $ (14.2 ) $ 98.9 19 %
Cost of sales 401.7 344.4 (9.2 ) 66.5 19 %
Gross margin 215.2 187.8 (5.0 ) 32.4 17 % Selling, general and
administrative expenses 107.3 89.5 (1.2 ) 19.0 21 % Impairment
charges and (gain)/loss on sale of assets 7.5 1.9 — 5.6 *
Restructuring and other 3.5 5.6 (0.1 ) (2.0 ) (36 )%
Operating earnings 96.9 90.8 (3.7 ) 9.8 11 % Interest expense, net
22.6 21.8 (0.5 ) 1.3 6 % Other (income)/expense, net 5.1
(8.5 ) (0.5 ) 14.1 * Earnings from continuing operations,
before income
taxes
69.2 77.5 (2.7 ) (5.6 ) (7 )% Income tax expense 7.4 19.4
(0.8 ) (11.2 ) (58 )% Net earnings 61.8 58.1 (1.9 ) 5.6 10 %
Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax
— — — — * Net earnings attributable to
Catalent $ 61.8 $ 58.1 $ (1.9 ) $ 5.6 10 %
Weighted average shares outstanding 125.1 124.8
Weighted average diluted shares outstanding 127.3 125.9
Earnings per share attributable to Catalent: Basic
Net earnings 0.49 0.47
Diluted Net earnings 0.49 0.46
* - percentage not meaningful
Catalent, Inc. and
SubsidiariesSelected Segment Financial Data(Dollars
in millions)
Three Months Ended June
30,
FX impact
Constant
CurrencyIncrease/(Decrease)
2017 2016 Change $
Change % Softgel Technologies Net revenue $ 257.1 $
224.8 $ (4.4 ) $ 36.7 16 % Segment EBITDA 65.2 59.0 (1.4 ) 7.6 13 %
Drug Delivery Solutions Net revenue 270.2 238.2 (5.4 ) 37.4
16 % Segment EBITDA 90.9 75.7 (2.2 ) 17.4 23 %
Clinical Supply
Services Net revenue 99.3 81.5 (4.7 ) 22.5 28 % Segment EBITDA
17.1 13.7 (1.3 ) 4.7 34 % Inter-segment revenue elimination (9.7 )
(12.3 ) 0.3 2.3 (19 )% Unallocated Costs (42.7 ) (14.0 ) 0.5 (29.2
) *
Combined Total Net
revenue $ 616.9 $ 532.2 $ (14.2 ) $ 98.9 19 %
EBITDA from continuing
operations $ 130.5 $ 134.4 $ (4.4 ) $ 0.5 *
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
data)
Twelve Months Ended June
30,
FX impact
Constant
CurrencyIncrease/(Decrease)
2017 2016 Change $
Change % Net revenue $ 2,075.4 $ 1,848.1 $ (54.8 ) $ 282.1
15 % Cost of sales 1,420.8 1,260.5 (31.9 ) 192.2
15 % Gross margin 654.6 587.6 (22.9 ) 89.9 15 % Selling,
general and administrative expenses 402.6 358.1 (5.8 ) 50.3 14 %
Impairment charges and (gain)/loss on sale of assets 9.8 2.7 — 7.1
* Restructuring and other 8.0 9.0 0.3 (1.3 )
(14 )% Operating earnings 234.2 217.8 (17.4 ) 33.8 16 % Interest
expense, net 90.1 88.5 (2.6 ) 4.2 5 % Other (income)/expense, net
8.5 (15.6 ) (2.6 ) 26.7 * Earnings from continuing
operations, before income
taxes
135.6 144.9 (12.2 ) 2.9 2 % Income tax expense 25.8 33.7
(2.7 ) (5.2 ) (15 )% Net earnings 109.8 111.2 (9.5 ) 8.1 7 %
Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax
— (0.3 ) — 0.3 * Net earnings attributable to
Catalent $ 109.8 $ 111.5 $ (9.5 ) $ 7.8 7 %
Weighted average shares outstanding 125.0 124.8
Weighted average diluted shares outstanding 126.7 125.9
Earnings per share attributable to Catalent: Basic
Net earnings 0.88 0.89
Diluted Net earnings 0.87 0.89
Catalent, Inc. and
SubsidiariesSelected Segment Financial Data(Dollars
in millions)
Twelve Months Ended June
30,
FX impact
Constant
CurrencyIncrease/(Decrease)
2017 2016 Change $
Change % Softgel Technologies Net revenue $ 855.3 $
775.0 $ (11.3 ) $ 91.6 12 % Segment EBITDA 190.5 163.8 (6.3 ) 33.0
20 %
Drug Delivery Solutions Net revenue 910.1 806.4 (22.8 )
126.5 16 % Segment EBITDA 242.4 215.2 (9.6 ) 36.8 17 %
Clinical
Supply Services Net revenue 348.8 307.5 (21.3 ) 62.6 20 %
Segment EBITDA 54.9 53.2 (5.6 ) 7.3 14 % Inter-segment revenue
elimination (38.8 ) (40.8 ) 0.6 1.4 (3 )% Unallocated Costs (115.6
) (57.9 ) 2.0 (59.7 ) *
Combined Total
Net revenue $ 2,075.4 $ 1,848.1 $ (54.8
) $ 282.1 15 % EBITDA
from continuing operations $ 372.2 $ 374.3 $ (19.5 )
$ 17.4 5 %
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
TwelveMonthsEnded
Quarter Ended
TwelveMonthsEnded
June 30, 2016
June 30, 2016
September 30, 2016
December 31, 2016
March 31, 2017
June 30, 2017
June 30, 2017
Earnings from continuing operations $ 58.1 111.2 $ 4.6 $ 17.4 $
26.0 $ 61.8 $ 109.8 Interest expense, net 21.8 88.5 22.1 22.8 22.6
22.6 90.1 Income tax expense 19.4 33.7 0.2 9.5 8.7 7.4 25.8
Depreciation and amortization 35.1 140.6 35.8 35.5 36.5 38.7 146.5
Noncontrolling interest — 0.3 — — —
— — EBITDA from continuing operations 134.4
374.3 62.7 85.2 93.8 130.5 372.2 Equity compensation 2.1 10.8 6.9
4.9 4.6 4.5 20.9 Impairment charges and (gain)/loss on sale of
assets 1.9 2.7 — 0.5 1.8 7.5 9.8
Financing related expenses and other
— — — 4.3 — — 4.3
US GAAP Restructuring and Other (1)
5.6 9.0 1.1 3.3 0.1 3.5 8.0 Acquisition, integration and other
special items 5.8 18.2 4.8 3.9 8.4 8.5 25.6 Foreign Exchange
loss/(gain) (included in other, net) (2) (4.7 ) (10.5 ) (0.5 ) (3.2
) 9.2 4.1 9.6 Other adjustments (3.3 ) (3.3 ) — (0.8 ) (0.1
) 0.5 (0.4 ) Adjusted EBITDA $ 141.8 $ 401.2 $
75.0 $ 98.1 $ 117.8 $ 159.1 $ 450.0
FX impact (unfavorable) (4.3 ) (18.9 ) Adjusted EBITDA -
Constant Currency $ 163.4 $ 468.9 * Refer to
the Company's description of non-GAAP measures including Adjusted
EBITDA as referenced above. (1) Restructuring and
Other costs for the year ended June 30, 2017 includes settlement
charges of $1.8 million for certain customer claims related to a
temporary facility suspension. (2) Foreign exchange loss of
$9.6 million for the twelve months ended June 30, 2017 includes:
(a) $0.3 million of unrealized gains related to foreign trade
receivables and payables, (b) $21.3 million of unrealized losses on
the ineffective portion of the Company's net investment hedge, and
(c) $13.2 million of unrealized gains on inter-company loans. The
foreign exchange adjustment was also affected by the exclusion of
realized foreign currency exchange rate losses from the settlement
of inter-company loans of $1.8 million. Inter-company loans are
between Catalent entities and do not reflect the ongoing results of
the Company's trade operations.
Catalent, Inc. and
SubsidiariesReconciliation of Net Earnings/(Loss) to
Adjusted Net Income*(Dollars in millions)
QuarterEnded
TwelveMonthsEnded
Quarter Ended
TwelveMonthsEnded
June 30, 2016
June 30, 2016
September 30, 2016
December 31, 2016
March 31, 2017
June 30, 2017
June 30, 2017
Net earnings $ 58.1 $ 111.2 $ 4.6 $ 17.4 $ 26.0 $ 61.8 $ 109.8
Amortization (1) 11.4 46.4 11.0 11.1 11.0 11.2 44.3 Net
(earnings)/loss attributable to noncontrolling interest, net of tax
— 0.3 — — — — — Equity compensation 2.1 10.8 6.9 4.9 4.6 4.5 20.9
Impairment charges and loss on sale of assets 1.9 2.7 — 0.5 1.8 7.5
9.8 Financing related expenses — — — 4.3 — — 4.3 U.S. GAAP
restructuring (2) 5.6 9.0 1.1 3.3 0.1 3.5 8.0 Acquisition,
integration and other special items 5.8 18.2 4.8 3.9 8.4 8.5 25.6
Foreign exchange loss/(gain) (included in other (income)/expense,
net) (4.7 ) (10.5 ) (0.5 ) (3.2 ) 9.2 4.1 9.6 Other adjustments
(3.3 ) (3.3 ) — (0.8 ) (0.1 ) 0.5 (0.4 )
Estimated tax effect of adjustments(3)
(6.1 ) (22.7 ) (6.5 ) (6.5 ) (10.7 ) (12.2 ) (35.9 ) Discrete
income tax expense/(benefit) items(4) (5.9 ) (8.9 ) (1.8 ) (0.2 )
(1.6 ) (6.8 ) (10.4 ) Adjusted net income $ 64.9 $ 153.2
$ 19.6 $ 34.7 $ 48.7 $ 82.6 $
185.6 * 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) Restructuring and Other costs for the year ended June 30, 2017
includes settlement charges of $1.8 million for certain customer
claims related to a temporary facility suspension. (3) 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. (4)
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
SubsidiariesConsolidated Balance Sheets(Dollars in
millions)
June 30, 2017
June 30, 2016
ASSETS Current assets: Cash and cash equivalents $ 288.3 $
131.6 Trade receivables, net 488.8 414.8 Inventories 184.9 154.8
Prepaid expenses and other 97.8 89.0 Total current assets
1,059.8 790.2 Property, plant, and equipment, net 995.9 905.8 Other
non-current assets, including intangible assets 1,398.6
1,395.1
Total assets $ 3,454.3 $
3,091.1 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Current portion of long-term obligations and
other short-term borrowings $ 24.6 $ 27.7 Accounts payable 163.2
143.7 Other accrued liabilities 281.2 219.8 Total current
liabilities 469.0 391.2 Long-term obligations, less current portion
2,055.1 1,832.8 Other non-current liabilities 206.7 231.2
Commitment and contingencies (1) — — Total shareholders' equity
723.5 635.9
Total liabilities and shareholders'
equity $ 3,454.3 $ 3,091.1
(1) Please refer to note 14 of the consolidated financial
statements within our Annual Report on Form 10-K for the year ended
June 30, 2017.
Catalent, Inc. and
SubsidiariesConsolidated Statements of Cash
Flows(Dollars in millions)
Twelve Months Ended June
30,
2017 2016 CASH FLOWS FROM OPERATING
ACTIVITIES: Net cash provided by operating activities
299.5 155.3 CASH FLOWS FROM
INVESTING ACTIVITIES: Acquisition of property and equipment and
other productive assets (139.8 ) (139.6 ) Proceeds from sale of
property and equipment 0.7 1.9 Payment for acquisitions, net of
cash acquired (169.9 ) —
Net cash (used in)/provided by
investing activities (309.0 ) (137.7
) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in
other borrowings (5.8 ) 2.3 Proceeds from borrowing, net 397.4 —
Payments related to long-term obligations (218.5 ) (18.6 ) Call
premium payments and financing fees paid (6.4 ) — Purchase of
Redeemable Noncontrolling Interest Shares — (5.8 ) Cash paid, in
lieu of equity, for tax withholding obligations (5.4 ) (8.7 )
Net cash provided by/(used in) financing activities
161.3 (30.8 ) Effect of foreign
currency on cash 4.9 (6.5 )
NET INCREASE/(DECREASE) IN CASH AND
EQUIVALENTS 156.7 (19.7 )
CASH AND EQUIVALENTS AT BEGINNING
OF PERIOD 131.6 151.3
CASH AND EQUIVALENTS AT
END OF PERIOD $ 288.3 $
131.6
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version on businesswire.com: http://www.businesswire.com/news/home/20170828005923/en/
Investors:Catalent, Inc.Thomas Castellano,
732-537-6325investors@catalent.com
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