- Q4'18 revenue of $685.3 million
increased 11% as-reported, or 9% in constant currency from the
prior-year period.
- Full-year revenue of $2,463.4
million increased 19% as-reported, or 16% in constant currency from
the prior-year.
- Closed the acquisition of Juniper
Pharmaceuticals, a European early development Center of Excellence
with dose form development and clinical manufacturing
capabilities.
- Issued 11,431,411 shares of common
stock at a price to the public of $40.24, raising approximately
$445 million of net proceeds used to pay down USD Term Loan
floating-rate debt.
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 2018, which ended
June 30, 2018.
Fourth quarter 2018 revenue of $685.3 million increased 11% as
reported and 9% in constant currency from $616.9 million reported
in the fourth quarter a year ago. For fiscal year 2018, revenue was
$2,463.4 million and increased 19% as reported and 16% in constant
currency, compared to the $2,075.4 million recorded in the
prior-year period. The Company's fourth quarter and fiscal year
2018 revenue growth over the prior fiscal year was primarily driven
by the Biologics and Specialty Drug Delivery and Clinical Supply
Services segments.
Fourth quarter 2018 net earnings were $82.7 million, or $0.61
per diluted share, compared to net earnings of $61.8 million, or
$0.49 per diluted share, in the fourth quarter a year ago. For
fiscal year 2018, net earnings were $83.6 million, or $0.63 per
diluted share, compared to net earnings of $109.8 million, or $0.87
per diluted share, in fiscal 2017. The fiscal year 2018 results
include a net tax charge of $42.5 million as a provisional estimate
of the net accounting impact of the U.S. tax law enacted in
December 2017. Fourth quarter 2018 EBITDA from continuing
operations of $172.0 million, as referenced in the GAAP to non-GAAP
reconciliation provided later in this release, increased 32% from
$130.5 million in the fourth quarter a year ago. For fiscal year
2018, EBITDA from continuing operations was $453.5 million, an
increase of 22% compared to the $372.2 million recorded in the
prior year.
Fourth quarter 2018 Adjusted EBITDA (see the non-GAAP
reconciliation for a discussion of this metric) was $181.5 million,
or 26.5% of revenue, compared to $159.1 million, or 25.8% of
revenue, in the fourth quarter a year ago. This represents an
increase of 14% as reported, and an increase of 11% on a
constant-currency basis.
Fourth quarter 2018 Adjusted Net Income (see the non-GAAP
reconciliation) was $90.0 million, or $0.67 per diluted share,
compared to Adjusted Net Income of $82.6 million, or $0.65 per
diluted share, in the fourth quarter a year ago.
“Our financial performance for the fourth quarter was in line
with our expectations and positions us well heading into fiscal
year 2019,” said John Chiminski, Chair, President and Chief
Executive Officer of Catalent, Inc. “We're excited to have closed
another acquisition on August 14th -Juniper Pharmaceuticals- which
adds to our spray drying capability and creates a European
early-stage formulation and development center of excellence. The
integration of both Juniper and our Bloomington biologics
acquisition, which closed during the second quarter, is progressing
according to plan. We're also very pleased to have strengthened our
balance sheet by paying down $450 million of floating-rate term
loan with the proceeds from our July 2018 equity offering. These
strategic steps allow us to play a role in the continued
consolidation of this fragmented industry."
In fiscal 2018, the Company engaged in a business reorganization
to better align its internal business unit structure with its
"Follow the Molecule" strategy and the increased focus on its
biologics-related offerings. Under the revised structure, it
created two new operating segments from its former Drug Delivery
Solutions segment:
- Biologics and Specialty Drug Delivery,
which encompasses manufacturing and development of biologic
cell-lines, blow-fill-seal unit-doses, prefilled syringes, vials,
cartridges and other injectable and inhaled formats; analytical
development and testing services for large molecules; and
development and manufacturing for inhaled products for delivery via
metered dose inhalers, dry powder inhalers, and intra-nasal sprays;
and
- Oral Drug Delivery, which encompasses
comprehensive formulation and analytical development capabilities
using advanced processing technologies such as bioavailability
enhancement, controlled release, particle size engineering; and
taste-masking for solid oral dose forms.
Each of the two new segments reports through a separate
management team. The Company's operating segments are the same as
its reporting segments. All prior-period comparative segment
information has been restated to reflect the current reportable
segments in accordance with ASC 280 Segment Reporting, as discussed
in Note 1 to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K (the "Consolidated Financial
Statements").
Fourth Quarter 2018 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $241.0 million
for the fourth quarter of fiscal 2018, a decrease of 6% as
reported, or 7% in constant currency, compared to the fourth
quarter a year ago. The constant-currency decline was primarily
attributable to a decrease in product participation revenue and
volume declines for both prescription and consumer health products
within North America and Europe; partially offset by strong demand
for consumer health products within Latin America.
Revenue from the Biologics and Specialty Drug Delivery segment
was $195.5 million for the fourth quarter of fiscal 2018, an
increase of 100% as reported, or 98% in constant currency, over the
fourth quarter a year ago. The constant-currency growth was
partially attributable to the acquisition of Catalent Indiana
(formerly Cook Pharmica), which contributed 71 percentage points to
the segment's revenue growth. Excluding the impact of the
acquisition, segment revenue increased 27% in constant currency,
driven by favorable end-customer demand for our U.S. based drug
substance and European drug product biologics offerings, as well as
higher volumes associated with products utilizing our respiratory
and opthalmic drug delivery platforms.
Revenue from the Oral Drug Delivery segment was $153.7 million
for the fourth quarter of fiscal 2018, a decrease of 11% as
reported, or 14% in constant currency, over the fourth quarter a
year ago. The constant-currency decline was primarily driven by a
prior-year contractual settlement recorded within the segment, a
decrease in product participation revenue and lower volume related
to our integrated oral solids development and commercial
manufacturing capabilities.
Revenue from the Clinical Supply Services segment was $107.6
million for the fourth quarter of fiscal 2018, an increase of 8% as
reported, or 5% in constant currency over the fourth quarter a year
ago. The constant-currency growth was due to higher volume related
to storage and distribution services, partially offset by lower
comparator sourcing volume.
Segment EBITDA Highlights
Softgel Technologies segment EBITDA (see the discussion of
non-GAAP measures below) in the fourth quarter of fiscal 2018 was
$59.0 million, a decrease of 10% as reported, or 8% in constant
currency, versus the fourth quarter a year ago. The decrease was
primarily driven by the lower product participation revenue and
volume declines for high-margin products within North America and
Europe, partially related to a shortage of supply of ibuprofen, an
active pharmaceutical ingredient. These declines were partially
offset by strong demand for consumer health products within Latin
America.
Biologics and Specialty Drug Delivery segment EBITDA in the
fourth quarter of fiscal 2018 was $60.4 million, an increase of
154% as reported, or 151% in constant currency. The
constant-currency growth was partially attributable to the Catalent
Indiana acquisition, which contributed 116 percentage points to the
segment's EBITDA growth. Excluding the impact of the acquisition,
segment EBITDA increased 35% in constant currency driven by
favorable end-customer demand for our U.S.-based drug substance and
European drug product biologics offerings, as well as higher
volumes associated with products utilizing our respiratory and
opthalmic drug delivery platforms.
Oral Drug Delivery segment EBITDA in the fourth quarter of
fiscal 2018 was $50.0 million, a decrease of 25% as reported, or
27% in constant currency. The constant-currency decline was
primarily driven by a prior-year contractual settlement recorded
within the segment, a decrease in product participation revenue and
lower volume related to our integrated oral solids development and
commercial manufacturing capabilities.
Clinical Supply Services segment EBITDA in the fourth quarter of
fiscal 2018 was $21.7 million, an increase of 27% as reported, or
20% in constant currency. The increase was primarily attributable
to higher demand and favorable product mix within our storage and
distribution services, as well as improved capacity utilization
across the network.
Fiscal 2018 Segment Highlights
Revenue Highlights by Business Segment
Revenue from the Softgel Technologies segment was $917.3 million
for fiscal year 2018, an increase of 7% as reported, or 4% in
constant currency, compared to a year ago. The constant-currency
growth was attributable to the February 2017 Accucaps acquisition,
which contributed 7 percentage points to the segment’s
constant-currency revenue growth during the year. Excluding the
Accucaps acquisition, Softgel revenue declined 3% in constant
currency, due to a decrease in product participation revenue and
decreased end-market demand for consumer health products in Europe
and Asia-Pacific; partially offset by strength in the Latin America
region.
Revenue from the Biologics and Specialty Drug Delivery segment
was $601.9 million for fiscal year 2018, an increase of 72% as
reported, or 68% in constant currency, over a year ago. The
constant-currency growth was partially attributable to the Catalent
Indiana acquisition, which contributed 50 percentage points to the
segment's revenue growth. Excluding the impact of the acquisition,
segment revenue increased 18% in constant currency, driven by
favorable end-customer demand for our U.S.-based drug substance and
European drug product biologics offerings, as well as higher
volumes associated with products utilizing our respiratory and
opthalmic drug delivery platforms.
Revenue from the Oral Drug Delivery segment was $573.9 million
for fiscal year 2018, an increase of 2% as reported, or a decrease
of 1% in constant currency, over a year ago. The constant-currency
decline was primarily driven by a prior-year contractual settlement
recorded within the segment, a decrease in product participation
revenue and lower volume related to our analytical development
services platform; partially offset by favorable end-customer
demand related to our integrated oral solids development and
commercial manufacturing capabilities.
Revenue from the Clinical Supply Services segment was $430.4
million for fiscal year 2018, an increase of 23% as reported, or
20% in constant currency over a year ago. This growth was due to
higher volume related to storage and distribution services, as well
as due to increased lower-margin comparator sourcing
activities.
Segment EBITDA Highlights
Softgel Technologies segment EBITDA for fiscal year 2018 was
$196.4 million, an increase of 3% as reported, or 2% in constant
currency, versus a year ago. The constant-currency increase was
driven by the acquisition of Accucaps, which contributed 5
percentage points of the constant-currency growth in segment EBITDA
during the period. Excluding the acquisition, segment EBITDA
decreased by 3% in constant currency, due to lower product
participation revenue and a shortage of supply of ibuprofen, an
active pharmaceutical ingredient; partially offset by favorable
product mix within North America.
Biologics and Specialty Drug Delivery segment EBITDA for fiscal
year 2018 was $146.8 million, an increase of 132% as reported, or
128% in constant currency. The constant-currency increase was
primarily driven by the Catalent Indiana acquisition, which
contributed 113 percentage points of the constant-currency growth
in segment EBITDA during the period. Excluding the acquisition,
segment EBITDA increased by 15% in constant currency, primarily
driven by favorable end-customer demand for our U.S.-based drug
substance and European drug product biologics offerings, partially
offset by lower levels of capacity utilization within our
respiratory and opthalmic drug delivery platforms.
Oral Drug Delivery segment EBITDA for fiscal year 2018 was
$172.9 million, a decrease of 3% as reported, or 6% in constant
currency. The constant-currency decrease was primarily driven by a
prior-year contractual settlement recorded within the segment, a
decrease in product participation revenue and lower volume related
to our analytical development services platform; partially offset
by favorable end-customer demand related to our integrated oral
solids development and commercial manufacturing capabilities.
Clinical Supply Services segment EBITDA for fiscal year 2018 was
$76.2 million, an increase of 39% as reported, or 32% in constant
currency. The increase was primarily attributable to higher demand
for our storage and distribution services, as well as improved
capacity utilization across the network. Increased volume related
to lower-margin comparator sourcing activities modestly contributed
to the segment’s EBITDA growth.
Additional Financial Highlights
Fourth quarter 2018 gross margin of 34.1% decreased 80 basis
points as-reported, from 34.9% in the fourth quarter a year ago.
The decrease was primarily attributable to a decrease in product
participation revenue within the Oral Drug Delivery and Softgel
Technologies segments, partially offset by the Catalent Indiana
acquisition.
Fourth quarter 2018 selling, general and administrative expenses
were $124.3 million and represented 18.1% of revenue, compared to
$107.3 million, or 17.4% of revenue, in the fourth quarter a year
ago.
Backlog for the Clinical Supply Services segment, defined as
estimated future service revenues from work not yet completed under
signed contracts, was $273.2 million as of June 30, 2018, a 2%
increase compared to the third quarter of fiscal year 2018. The
segment recorded net new business wins of $93.8 million during the
fourth quarter, which is an increase of 60% compared to the new
business wins recorded in the same period of prior year. The
segment’s trailing-twelve-month book-to-bill ratio was 0.9x. Please
note that fourth quarter and prior period ratios have been
re-calculated in light of the change in revenue recognition due to
the adoption of ASC 606, a new accounting rule, pursuant to which
the Company will recognize revenue relating to comparator
procurement on a net basis.
Balance Sheet and Liquidity
As of June 30, 2018, Catalent had $2.7 billion in total debt,
and $2.3 billion in total debt net of cash and short-term
investments, which is in-line with the total debt and net debt as
of March 31, 2018. As of June 30, 2018, Catalent’s total net
leverage ratio was 4.2x, a sequential improvement compared to the
total net leverage of 4.5x as of March 31, 2018. On a pro forma
basis for the acquisition of Catalent Indiana, the debt pay down of
$450 million completed in July, and the acquisition of Juniper
Pharmaceuticals, Catalent’s total net leverage ratio as of June 30,
2018 would have been 3.4x.
Fiscal Year 2019 Outlook
For fiscal year 2019, the Company expects revenue in the range
of $2.50 billion to $2.59 billion. Catalent expects Adjusted EBITDA
in the range of $597 million to $622 million and Adjusted Net
Income in the range of $260 million to $285 million. The Company
expects self-funded capital expenditures in the range of $175
million to $185 million and fully diluted share count in the range
of 146 million to 147 million shares on a weighted-average basis,
taking into account the recent issuance of additional shares in
connection with the recent equity offering.
Earnings Webcast
The Company’s management will host a webcast to discuss the
results at 8:15 a.m. ET today. Catalent invites all interested
parties to listen to the webcast, which will be accessible through
Catalent’s website at http://investor.catalent.com. A supplemental slide
presentation will also be available in the “Investors” section of
Catalent’s website prior to the start of the webcast. The webcast
replay, along with the supplemental slides, will be available for
90 days in the “Investors” section of Catalent’s website at
www.catalent.com.
About Catalent, Inc.
Catalent, Inc. (NYSE: CTLT) is the leading global provider of
advanced delivery technologies and development solutions for drugs,
biologics and consumer health products. With over 80 years serving
the industry, Catalent has proven expertise in bringing more
customer products to market faster, enhancing product performance
and ensuring reliable clinical and commercial product supply.
Catalent employs over 11,000 people, including over 1,800
scientists, at more than 30 facilities across 5 continents and in
fiscal 2018 generated approximately $2.5 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 U.K. referendum to exit from the European Union; adverse tax
legislative or regulatory initiatives or challenges to the
Company’s tax positions; loss of key personnel; risks generally
associated with information systems; inability to complete any
future acquisitions and other transactions that may complement or
expand the business of the Company or divest of non-strategic
businesses or assets and difficulties in successfully integrating
acquired business and realizing anticipated benefits of such
acquisitions; offerings and customers’ products that may infringe
on the intellectual property rights of third parties;
environmental, health and safety laws and regulations, which could
increase costs and restrict operations; labor and employment laws
and regulations or labor difficulties, which could increase costs
or result in operational disruptions; additional cash contributions
required to fund the Company’s existing pension plans; substantial
leverage resulting in the limited ability of the Company to raise
additional capital to fund operations and react to changes in the
economy or in the industry, exposure to interest rate risk to the
extent of the Company’s variable-rate debt and preventing the
Company from meeting its obligations under its indebtedness. For a
more detailed discussion of these and other factors, see the
information under the caption “Risk Factors” in the Company’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2018,
filed today. 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 (In millions, except per share
data)
Three Months Ended June
30,
FX impact
Constant Currency
Increase/(Decrease)
2018 2017 Change $
Change% Net revenue $ 685.3 $ 616.9 $ 11.5 $ 56.9 9% Cost of
sales 451.9 401.7 9.3 40.9 10% Gross
margin 233.4 215.2 2.2 16.0 7% Selling, general and administrative
expenses 124.3 107.3 1.0 16.0 15% Impairment charges and
(gain)/loss on sale of assets 4.3 7.5 — (3.2 ) (43)% Restructuring
and other 7.5 3.5 — 4.0 114% Operating
earnings 97.3 96.9 1.2 (0.8 ) (1)% Interest expense, net 30.0 22.6
0.3 7.1 31% Other (income)/expense, net (22.1 ) 5.1 (2.3 )
(24.9 ) *
Earnings from continuing operations,
before income
taxes
89.4 69.2 3.2 17.0 25% Income tax expense 6.7 7.4
(1.3 ) 0.6 8% Net earnings $ 82.7 $ 61.8 $ 4.5
$ 16.4 27% Weighted average shares
outstanding 133.2 125.1 Weighted average diluted shares outstanding
135.1 127.3
Earnings per share: Basic Net earnings $
0.62 $ 0.49 Diluted Net earnings $ 0.61 $ 0.49
* - percentage not meaningful
Catalent, Inc. and Subsidiaries Selected Segment
Financial Data (Dollars in millions)
Three Months Ended June
30,
FX impact
Constant Currency
Increase/(Decrease)
2018 2017 Change $
Change % Softgel Technologies Net revenue $
241.0 $ 257.1 $ 1.7 $ (17.8 ) (7 )% Segment EBITDA 59.0 65.2 (1.2 )
(5.0 )
(8
)%
Biologics and Specialty Drug Delivery Net revenue 195.5 97.3
3.1 95.1 98 % Segment EBITDA 60.4 23.8 0.7 35.9 151 %
Oral Drug
Delivery Net revenue 153.7 173.6 4.0 (23.9 ) (14 )% Segment
EBITDA 50.0 67.0 1.4 (18.4 ) (27 )%
Clinical Supply Services
Net revenue 107.6 99.3 3.4 4.9 5 % Segment EBITDA 21.7 17.1 1.1 3.5
20 %
Inter-segment revenue elimination (12.5 ) (10.4 ) (0.7
) (1.4 ) 13 %
Unallocated costs (19.1 ) (42.6 ) 2.4 21.1 (50
)%
Combined totals Net
revenue $ 685.3 $ 616.9 $ 11.5 $ 56.9 9
% EBITDA from continuing
operations $ 172.0 $ 130.5 $ 4.4 $ 37.1
28 %
* - percentage not meaningful
Refer to the Company's description of non-GAAP measures
including segment EBITDA as referenced above.
Catalent, Inc. and Subsidiaries Consolidated
Statements of Operations (In millions, except per share
amounts)
Twelve Months Ended June
30,
FX impact
Constant Currency
Increase/(Decrease)
2018 2017 Change $
Change% Net revenue $ 2,463.4 $ 2,075.4 $ 62.1 $ 325.9 16%
Cost of sales 1,710.8 1,420.8 48.2 241.8
17% Gross margin 752.6 654.6 13.9 84.1 13% Selling,
general and administrative expenses 462.6 402.6 4.8 55.2 14%
Impairment charges and (gain)/loss on sale of assets 8.7 9.8 0.1
(1.2 ) (12)% Restructuring and other 10.2 8.0 (0.1 )
2.3 29% Operating earnings 271.1 234.2 9.1 27.8 12%
Interest expense, net 111.4 90.1 1.1 20.2 22% Other
(income)/expense, net 7.7 8.5 2.7 (3.5 ) (41)%
Earnings from continuing operations,
before income taxes
152.0 135.6 5.3 11.1 8% Income tax expense 68.4 25.8
(1.6 ) 44.2 171% Net earnings $ 83.6 $ 109.8 $ 6.9 $
(33.1 ) (30)% Weighted average shares outstanding 131.2
125.0 Weighted average diluted shares outstanding 133.2 126.7
Earnings per share: Basic Net earnings $ 0.64 $ 0.88
Diluted Net earnings $ 0.63 $ 0.87
* - percentage not meaningful
Catalent, Inc. and Subsidiaries Selected Segment
Financial Data (Dollars in millions)
Twelve Months Ended June
30,
FX impact
Constant Currency
Increase/(Decrease)
2018 2017 Change $
Change% Softgel Technologies Net revenue $ 917.3 $
855.3 $ 24.5 $ 37.5 4% Segment EBITDA 196.4 190.5 2.3 3.6 2%
Biologics and Specialty Drug Delivery Net revenue 601.9
350.8 12.1 239.0 68% Segment EBITDA 146.8 63.4 2.1 81.3 128%
Oral Drug Delivery Net revenue 573.9 561.6 15.8 (3.5 ) (1)%
Segment EBITDA 172.9 179.0 5.1 (11.2 ) (6)%
Clinical Supply
Services Net revenue 430.4 348.8 13.4 68.2 20% Segment EBITDA
76.2 54.9 4.0 17.3 32%
Inter-segment revenue elimination
(60.1 ) (41.1 ) (3.7 ) (15.3 ) 37% Unallocated costs (138.8 )
(115.6 ) (2.7 ) (20.5 ) 18%
Combined totals
Net revenue $ 2,463.4 $ 2,075.4
$ 62.1 $ 325.9 16%
EBITDA from continuing operations $ 453.5 $ 372.2
$ 10.8 $ 70.5 19%
Refer to the Company's description of non-GAAP measures
including Segment EBITDA as referenced above.
Catalent, Inc. and Subsidiaries
Reconciliation of Earnings/(Loss) from
Continuing Operations to EBITDA from Continuing Operations
and
Adjusted EBITDA*
(Dollars in millions)
Quarter Ended
Twelve Months
Ended
Quarter Ended
Twelve Months
Ended
June 30, 2017
June 30, 2017
September 30, 2017
December 31, 2017
March 31, 2018
June 30, 2018
June 30, 2018
Net earnings / (loss) 61.8 $ 109.8 $ 3.8 $ (21.9 ) $ 19.0 $ 82.7 $
83.6 Interest expense, net 22.6 90.1 24.3 27.2 29.9 30.0 111.4
Income tax expense/(benefit) 7.4 25.8 (1.9 ) 49.9 13.7 6.7 68.4
Depreciation and amortization 38.7 146.5 39.0
46.8 51.7 52.6 190.1 EBITDA from
continuing operations 130.5 372.2 65.2 102.0 114.3 172.0 453.5
Equity compensation 4.5 20.9 7.0 8.5 5.6 6.1 27.2
Impairment charges and (gain)/losson sale
of assets
7.5 9.8 — 4.2 0.2 4.3 8.7 Financing-related expenses — 4.3 — 11.8 —
— 11.8
US GAAP restructuring and
other
3.5 8.0 1.2 0.1 1.4 7.5 10.2
Acquisition, integration and otherspecial
items
8.5 25.6 11.0 11.8 9.1 12.2 44.1
Foreign exchange loss/(gain)(included in
other, net) (1)
4.1 9.6 6.5 0.6 8.4 (20.5 ) (5.0 ) Other adjustments 0.5
(0.4 ) — 0.3 — (0.1 ) 0.2 Adjusted
EBITDA $ 159.1 $ 450.0 $ 90.9 $ 139.3 $
139.0 $ 181.5 $ 550.7 FX impact (unfavorable)
4.3 10.8 Adjusted EBITDA at Constant Currency $ 177.2
$ 539.9
* Refer to the Company's description of non-GAAP measures
including EBITDA from continuing operations and Adjusted EBITDA as
referenced above.
(1) Foreign exchange gain of $5.0 million for the twelve
months ended June 30, 2018 includes: (a) $2.9 million of unrealized
gains related to foreign trade receivables and payables, (b) $11.9
million of unrealized losses on the ineffective portion of the
Company's net investment hedge, and (c) $10.7 million of unrealized
losses on inter-company loans. The foreign exchange adjustment was
also affected by the exclusion of realized foreign currency
exchange rate gains from the settlement of inter-company loans of
$24.7 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* (In millions, except per share data)
Quarter Ended Twelve Months Ended
Quarter Ended
Twelve Months
Ended
June 30, 2017
June 30, 2017
September 30, 2017
December 31, 2017
March 31, 2018
June 30, 2018
June 30, 2018
Net earnings $ 61.8 $ 109.8 $ 3.8 $ (21.9 ) $ 19.0 $ 82.7 $ 83.6
Amortization (1) 11.2 44.3 11.4 16.1 17.6 17.5 62.6 Equity
compensation 4.5 20.9 7.0 8.5 5.6 6.1 27.2
Impairment charges and losson sale of
assets
7.5 9.8 — 4.2 0.2 4.3 8.7 Financing-related expenses — 4.3 — 11.8 —
— 11.8
U.S. GAAP restructuring andother
3.5 8.0 1.2 0.1 1.4 7.5 10.2
Acquisition, integration, andother special
items
8.5 25.6 11.0 11.8 9.1 12.2 44.1
Foreign exchange loss/(gain)(included in
other, net) (2)
4.1 9.6 6.5 0.6 8.4 (20.5 ) (5.0 ) Other adjustments 0.5 (0.4 ) —
0.3 — (0.1 ) 0.2
Estimated tax effect ofadjustments (3)
(12.2 ) (35.9 ) (11.2 ) (14.0 ) (11.6 ) (6.7 ) (43.5 )
Discrete income tax(benefit)/expense items
(4)
(6.8 ) (10.4 ) (2.6 ) (2.8 ) (0.1 ) (3.9 ) (9.4 ) Tax law changes
provision (5) — — — 46.0 5.6
(9.1 ) 42.5 Adjusted net income (ANI) $ 82.6 $ 185.6
$ 27.1 $ 60.7 $ 55.2 $ 90.0 $
233.0
Weighted average sharesoutstanding
125.1 125.0 133.2 131.2
Weighted average diluted
sharesoutstanding
127.3 126.7 135.1 133.2
ANI per share: ANI per basic share $
0.66 $ 1.48 $ 0.68 $ 1.78 ANI per diluted share $ 0.65 $ 1.46 $
0.67 $ 1.75
Earnings per share: Net earnings per basic share
$ 0.49 $ 0.88 $ 0.62 $ 0.64
Net earnings per dilutedshare
$ 0.49 $ 0.87 $ 0.61 $ 0.63
* 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) Foreign exchange gain of $5.0 million for the twelve months
ended June 30, 2018 includes: (a) $2.9 million of unrealized gains
related to foreign trade receivables and payables, (b) $11.9
million of unrealized losses on the ineffective portion of the
Company's net investment hedge, and (c) $10.7 million of unrealized
losses on inter-company loans. The foreign exchange adjustment was
also affected by the exclusion of realized foreign currency
exchange rate gains from the settlement of inter-company loans of
$24.7 million. Inter-company loans are between Catalent entities
and do not reflect the ongoing results of the Company's trade
operations. (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. (5) During the
fiscal year 2018, the Company recorded a net tax charge of $42.5
million as its provisional estimate of the net accounting impact of
the recently enacted U.S. tax law changes. The Company will
continue to evaluate the full impact of the 2017 income tax
legislation and record any potential adjustment during the
permitted one-year measurement period.
Catalent, Inc. and
Subsidiaries Consolidated Balance Sheets (Dollars in
millions)
June 30, 2018
June 30, 2017
ASSETS Current assets: Cash and cash equivalents $ 410.2 $
288.3 Trade receivables, net 555.8 488.8 Inventories 209.1 184.9
Prepaid expenses and other 65.2 97.8 Total current assets
1,240.3 1,059.8 Property, plant, and equipment, net 1,270.6 995.9
Other non-current assets, including intangible assets 2,020.2
1,398.6
Total assets $ 4,531.1
$ 3,454.3 LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Current portion of long-term
obligations and other short-term borrowings $ 71.9 $ 24.6 Accounts
payable 192.1 163.2 Other accrued liabilities 312.9 281.2
Total current liabilities 576.9 469.0 Long-term obligations, less
current portion 2,649.4 2,055.1 Other non-current liabilities 218.1
206.7 Commitments and contingencies (1) — — Total shareholders'
equity 1,086.7 723.5
Total liabilities and shareholders'
equity $ 4,531.1 $ 3,454.3
(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, 2018.
Catalent, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Dollars in
millions)
Twelve Months Ended June
30,
2018 2017 CASH FLOWS FROM OPERATING
ACTIVITIES: Net cash provided by operating activities
$ 374.5 $ 299.5 CASH
FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and
equipment and other productive assets (176.5 ) (139.8 ) Proceeds
from sale of property and equipment 1.8 0.7 Proceeds from sale of
subsidiaries 3.4 — Payment for acquisitions, net of cash acquired
(748.0 ) (169.9 ) Net cash (used in) investing activities from
continuing operations
(919.3 ) (309.0 )
CASH FLOWS FROM FINANCING ACTIVITIES: Net change in other
borrowings (3.1 ) (5.8 ) Proceeds from borrowing, net 442.6 397.4
Payments related to long-term obligations (18.9 ) (218.5 ) Call
premium payments and financing fees paid (15.6 ) (6.4 ) Proceeds
from sale of common stock, net 277.8 — Cash paid, in lieu of
equity, for tax withholding obligations (13.7 ) (5.4 )
Net cash
provided by financing activities 669.1
161.3 Effect of foreign exchange on cash (2.4 ) 4.9
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS 121.9 156.7
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 288.3
131.6
CASH AND EQUIVALENTS AT END OF PERIOD $
410.2 $ 288.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180828005126/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