MALLINCKRODT CHESTERFIELD, United Kingdom, May 3, 2016 /PRNewswire/ -- Mallinckrodt plc (NYSE: MNK), a leading global specialty biopharmaceutical company, today reported results for the second quarter of fiscal 2016. Amounts reported reflect presentation of the company's former contrast media and delivery systems (CMDS) business as a discontinued operation. Unless otherwise noted, all comparisons of fiscal 2016 second quarter or first half performance are to the comparable periods of fiscal 2015.
http://photos.prnewswire.com/prnvar/20150105/167103LOGO
Total Mallinckrodt net sales were $918.0 million in the second quarter of fiscal 2016, up 12.7% on a constant-currency basis. Specialty Brands segment revenue was up 60.0% and the primary component of overall net sales acceleration. Results were led by solid volume growth in H.P. Acthar Gel (repository corticosteroid injection), the inclusion of INOMAX (nitric oxide) gas for inhalation and Therakos(®) immunotherapy platforms, and incremental volume growth for OFIRMEV(®) (acetaminophen) injection. Specialty Brands results were partially offset by decreased net sales within the Specialty Generics and Nuclear Imaging segments.
GAAP net income from continuing operations for the quarter was $120.3 million, or $1.07 per diluted share, compared with $75.2 million, or $0.64 per diluted share. The increase principally reflects higher net sales and profits from recently acquired assets in the Specialty Brands segment and strong net sales and profit contribution from Acthar. In addition, selling, general and administrative (SG&A) costs decreased due to ongoing restructuring and 2015 charges that did not recur in fiscal 2016. These factors were partially offset by higher interest expense resulting primarily from the debt associated with the acquisitions of INOMAX and Therakos, and the impairment of in-process research and development intangible assets acquired in our fiscal 2013 CNS Therapeutics, Inc. acquisition.
Adjusted net income for the quarter was $224.8 million, up 12.9% from $199.1 million. Adjusted diluted earnings per share were $2.01, up 18.2% from $1.70.
During the quarter, the company repurchased 3.4 million shares under its share repurchase program.
"Mallinckrodt's performance in the second quarter of fiscal 2016 was again very strong, driven by exceptional commercial execution across our Specialty Brands portfolio," said Mark Trudeau, President and Chief Executive Officer. "Each of the key branded products contributed volume growth - Acthar, INOMAX, Therakos and, notably, OFIRMEV - expanding patient access so more people may benefit from these drugs. The Specialty Brands segment continues to contribute nearly 60% of our total net sales.
"The strength of our growth strategy is evidenced by these results," Trudeau continued. "We continue to acquire under-resourced assets for underserved patient populations in areas of high unmet medical need. Then we invest in commercial and scientific support for these assets, including generating additional data and sponsoring clinical and health economic studies. By following this strategy and focusing on execution, we are making steady progress and creating near- and long-term value for patients and shareholders."
GAAP gross profit was $479.6 million for the quarter, up 3.6% over $462.9 million. This growth resulted from the addition and performance of both INOMAX and Therakos, and the performance of Acthar and OFIRMEV; partially offset by decreased gross profit from the Specialty Generics segment. Adjusted gross profit as a percentage of net sales was 71.4% versus 71.9%.
GAAP SG&A expenses for the quarter were $231.2 million, compared with $308.4 million. However, adjusted SG&A as a percentage of net sales for the quarter was 25.3%, an improvement of 250 basis points. The decrease in absolute SG&A expenses is primarily due to fiscal 2015 legal, environmental and equity costs - as well as benefits from restructuring - all partially offset by the addition of INOMAX and Therakos marketing and sales teams to the business.
Income tax benefit in the second quarter was $53.6 million, versus a benefit of $34.1 million. The adjusted effective tax rate was 15.7% compared to 20.2%.
Six-Month Fiscal 2016 Results
Net sales were $1.833 billion, up 15.5% compared with $1.587 billion. The increase came primarily through the inclusion and performance of INOMAX and Therakos, and continued net sales performance of Acthar. Specialty Brands results were partially offset by decreased net sales within the Specialty Generics segment.
On a GAAP basis, net income was $329.4 million, compared with $191.5 million. Diluted earnings per share from continuing operations were $2.07 compared with $1.38.
On a non-GAAP basis, adjusted net income was $467.5 million, compared with $407.8 million. Adjusted diluted earnings per share were $4.09, compared with $3.49, an increase of 17.2%.
Liquidity
In the first six months of fiscal 2016, Mallinckrodt generated $448.7 million in free cash flow, with $186.3 million in the second quarter. The company used a portion of this strong cash generation and the cash received from the divestiture of CMDS to repurchase $501.6 million of ordinary shares and to acquire the Hemostasis products. Mallinckrodt's cash balance at the end of the quarter was $341.4 million. The company's liquidity position remains quite strong and resilient, and management remains focused primarily on allocating capital to share repurchases, debt reduction and additional business development targets.
BUSINESS SEGMENT RESULTS
Specialty Brands Segment
The segment benefited from strong commercial execution throughout the second quarter with net sales increasing to $535.0 million, compared with $334.3 million, an increase of 60.0%. As noted, the increase in net sales was driven by the inclusion and performance of INOMAX and Therakos, which collectively generated net sales of $165.7 million. Additionally, Acthar net sales were $248.4 million in the quarter, an 8.9% increase over $228.0 million. Mallinckrodt's second largest product, INOMAX, generated net sales of $115.5 million, an increase of 13.8% reported over pro forma net sales of $101.5 million, and up 13.9% on a constant-currency basis. OFIRMEV net sales were $71.1 million compared with $68.1 million, an increase of 4.4%. Net sales of the Therakos immunotherapy product line were $50.2 million, which represents growth of 11.6% reported over pro forma net sales of $45.0 million, and up 13.0% on a constant-currency basis.
Specialty Generics Segment
Net sales for the segment in the second quarter decreased 27.1%, to $264.4 million, compared with $362.8 million, driven principally by net sales declines in various product categories due to increased competition. This quarter's comparison also reflects an exceptionally strong second quarter in fiscal 2015. Management continues to expect difficult year-over-year net sales comparisons in this segment moving forward.
Nuclear Imaging Segment
The company completed the sale of its CMDS business to Guerbet S.A. in November 2015. The financial results of the CMDS business are presented as a discontinued operation in both the current and prior fiscal year. The Global Medical Imaging segment was renamed Nuclear Imaging at the beginning of fiscal 2016.
Net sales for the second quarter fiscal 2016 for the Nuclear Imaging segment were $102.2 million, compared with $109.5 million.
GUIDANCE UPDATE
Management is raising its fiscal 2016 guidance for adjusted diluted earnings per share from the previous $7.85 to $8.30 to a revised range of $8.15 to $8.50.
CONFERENCE CALL AND WEBCAST
Mallinckrodt will hold a conference call for investors on Tuesday, May 3, 2016, beginning at 8:30 a.m. U.S. Eastern Time. This call can be accessed in three ways:
-- At the Mallinckrodt website: http://www.mallinckrodt.com/investors.
-- By telephone: For both listen-only participants and those who wish to
take part in the question-and-answer portion of the call, the telephone
dial-in number in the U.S. is (877) 359-9508. For participants outside
the U.S., the dial-in number is (224) 357-2393. Callers will need to
provide the Conference ID of 73221217.
-- Through an audio replay: A replay of the call will be available
beginning at 11:30 a.m. U.S. Eastern time on Tuesday, May 3, 2016, and
ending at 11:59 p.m. U.S. Eastern Time on Tuesday, May 17, 2016. Dial-in
numbers for U.S.-based participants are (855) 859-2056 or (800)
585-8367. Participants outside the U.S. should use the replay dial-in
number (404) 537-3406. All callers will be required to provide the
Conference ID of 73221217.
ABOUT MALLINCKRODT
Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical and biopharmaceutical products and therapies, as well as nuclear imaging products. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology and pulmonology; immunotherapy and neonatal respiratory critical care therapies; analgesics and hemostasis products; and central nervous system drugs. The company's core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company's Specialty Brands segment includes branded medicines; its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing; and the Nuclear Imaging segment includes nuclear imaging agents. To learn more about Mallinckrodt, visit www.mallinckrodt.com.
Mallinckrodt uses its website as a channel of distribution of important company information, such as press releases, investor presentations and other financial information. It also uses its website to expedite public access to time-critical information regarding the company in advance of or in lieu of distributing a press release or a filing with the U.S. Securities and Exchange Commission (SEC) disclosing the same information. Therefore, investors should look to the Investor Relations page of the website for important and time-critical information. Visitors to the website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations page of the website.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures, including adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted SG&A, net sales growth on a constant-currency basis, adjusted effective tax rate, pro forma fiscal 2015 INOMAX net sales, pro forma fiscal 2015 Therakos net sales, and free cash flow, which are considered "non-GAAP" financial measures under applicable SEC rules and regulations.
Adjusted net income, adjusted gross profit and adjusted SG&A represent amounts prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and adjusted for certain items that management believes are not reflective of the operational performance of the business. The adjustments for these items are on a pre-tax basis for adjusted gross profit and adjusted SG&A and on an after-tax basis for adjusted net income. Adjustments to GAAP amounts include, as applicable to each measure, restructuring and related charges, net; amortization and impairment charges; discontinued operations; acquisition-related expenses; changes in fair value of contingent consideration obligations; inventory step-up expenses; significant legal and environmental charges; recurrent cash tax payments to the U.S. Internal Revenue Service associated with internal installment sales transactions; and other items identified by the company. Adjusted diluted earnings per share represent adjusted net income divided by the number of diluted shares.
The adjusted effective tax rate is calculated as the income tax effects on continuing and discontinued operations plus the income tax impact included in Mallinckrodt's reconciliation of net income, divided by income from continuing and discontinued operations plus the pre-tax, non-income, tax-related adjustments included in its reconciliation of adjusted net income (excluding dilutive share impact). The income tax impact item included in its reconciliation of adjusted net income primarily represents the tax impact of adjustments between net income and adjusted net income as well as U.S. tax payments associated with internal installment sale transactions.
Net sales growth on a constant-currency basis measures the change in net sales between current- and prior-year periods using a constant currency, the exchange rate in effect during the applicable prior-year period.
Pro forma second quarter fiscal 2015 INOMAX net sales represent $101.5 million of INOMAX net sales under its prior ownership. Pro forma second quarter fiscal 2015 Therakos net sales represent $45.0 million of its net sales under its prior ownership.
Free cash flow for the first six months of fiscal 2016 represents net cash provided by operating activities of $540.1 million less capital expenditures of $91.4 million, each as prepared in accordance with GAAP. For the second quarter, the company generated $228.7 million in net cash provided by operating activities less capital expenditures of $42.4 million.
The company has provided these adjusted financial measures because they are used by management, along with financial measures in accordance with GAAP, to evaluate the company's operating performance. In addition, the company believes that they will be used by certain investors to measure Mallinckrodt's operating results. Management believes that presenting these adjusted measures provides useful information about the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance. These adjusted measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The company's definition of these adjusted measures may differ from similarly titled measures used by others.
Because adjusted financial measures exclude the effect of items that will increase or decrease the company's reported results of operations, management strongly encourages investors to review the company's consolidated financial statements and publicly filed reports in their entirety. A reconciliation of certain of these historical adjusted financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this release.
Cautionary Statements Related to Forward-Looking Statements
Statements in this document that are not strictly historical, including statements regarding future financial condition and operating results, economic, business, competitive and/or regulatory factors affecting Mallinckrodt's businesses and any other statements regarding events or developments that we believe or anticipate will or may occur in the future, may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties.
There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: general economic conditions and conditions affecting the industries in which Mallinckrodt operates; the commercial success of Mallinckrodt's products; Mallinckrodt's ability to realize anticipated growth, synergies and cost savings from acquisitions; conditions that could necessitate an evaluation of Mallinckrodt's goodwill and/or intangible assets for possible impairment; changes in laws and regulations; Mallinckrodt's ability to successfully integrate acquisitions of operations, technology, products and businesses generally and to realize anticipated growth, synergies and cost savings; Mallinckrodt's ability to successfully develop or commercialize new products; Mallinckrodt's ability to protect intellectual property rights; Mallinckrodt's ability to receive procurement and production quotas granted by the U.S. Drug Enforcement Administration; customer concentration; Mallinckrodt's reliance on certain individual products that are material to its financial performance; cost containment efforts of customers, purchasing groups, third-party payers and governmental organizations; the reimbursement practices of a small number of public or private insurers; limited clinical trial data for H.P. Acthar Gel; complex reporting and payment obligations under healthcare rebate programs; Mallinckrodt's ability to navigate price fluctuations; Mallinckrodt's ability to achieve expected benefits from restructuring activities; complex manufacturing processes; competition; product liability losses and other litigation liability; ongoing governmental investigations; material health, safety and environmental liabilities; retention of key personnel; conducting business internationally; and the effectiveness of information technology infrastructure.
These and other factors are identified and described in more detail in the "Risk Factors" section of Mallinckrodt's Annual Report on Form 10-K for the fiscal year ended September 25, 2015. The forward-looking statements made herein speak only as of the date hereof and Mallinckrodt does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.
CONTACTS
Investor Relations
Coleman N. Lannum, CFA
Senior Vice President, Investor Strategy and IRO
314-654-6649
cole.lannum@mallinckrodt.com
Media
Rhonda Sciarra
Senior Communications Manager
314-654-8618
rhonda.sciarra@mallinckrodt.com
Meredith Fischer
Senior Vice President, Communications and Public Affairs
314-654-3318
meredith.fischer@mallinckrodt.com
MALLINCKRODT PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in millions, except per share data)
Three Months Ended
------------------
March 25, 2016 Percent of March 27, 2015 Percent of
Net sales Net sales
-------------- ----------- -------------- -----------
Net sales $918.0 100.0% $819.0 100.0%
Cost of sales 438.4 47.8 356.1 43.5
----- -----
Gross profit 479.6 52.2 462.9 56.5
Selling, general and
administrative
expenses 231.2 25.2 308.4 37.7
Research and
development expenses 58.6 6.4 58.0 7.1
Restructuring charges,
net 8.7 0.9 3.5 0.4
Non-restructuring
impairment charges 16.9 1.8 - -
Gains on divestiture
and license (0.2) - (0.9) (0.1)
---- ----
Operating income 164.4 17.9 93.9 11.5
Interest expense (97.2) (10.6) (57.4) (7.0)
Interest income 0.2 - 0.4 -
Other income (loss),
net (0.7) (0.1) 4.2 0.5
---- ---
Income from continuing
operations before
income taxes 66.7 7.3 41.1 5.0
Income tax benefit (53.6) (5.8) (34.1) (4.2)
----- -----
Income from continuing
operations 120.3 13.1 75.2 9.2
Income (loss) from
discontinued
operations, net of
income taxes (2.0) (0.2) 23.6 2.9
---- ----
Net income $118.3 12.9% $98.8 12.1%
====== =====
Basic earnings per share:
Income from continuing
operations $1.08 $0.64
Income (loss) from
discontinued
operations (0.02) 0.20
Net income 1.06 0.85
Diluted earnings per share:
Income from continuing
operations $1.07 $0.64
Income (loss) from
discontinued
operations (0.02) 0.20
Net income 1.06 0.84
Weighted-average number of shares
outstanding:
Basic 111.1 115.6
Diluted 112.0 117.2
MALLINCKRODT PLC
NON-GAAP MEASURES
(unaudited, in millions except per share data)
Three Months Ended
------------------
March 25, 2016 March 27, 2015
-------------- --------------
Gross profit Selling, general Net income Diluted net Gross profit Selling, general Diluted net
and income per and income per
administrative share administrative share
expenses expenses Net income
------------ ---------------- ---------- ------------ ------------ ---------------- ---------- ------------
GAAP $479.6 $231.2 $118.3 $1.06 $462.9 $308.4 $98.8 $0.84
Adjustments:
Intangible asset
amortization 173.2 (1.8) 175.0 1.56 121.8 (1.1) 122.9 1.05
Restructuring and
related charges, net
(1) 0.6 (1.1) 10.4 0.09 - - 3.6 0.03
Inventory step-up
expense 2.1 - 2.1 0.02 4.4 - 4.4 0.04
Incremental equity
conversion costs - - - - - (21.6) 21.6 0.18
Loss (income) from
discontinued operations - - 2.0 0.02 - - (23.6) (0.20)
Non-restructuring
impairment charges - - 16.9 0.15 - - - -
Change in contingent
consideration fair
value - 6.3 (6.3) (0.06) - - - -
Acquisition related
expenses - (1.9) 1.9 0.02 - (7.1) 7.1 0.06
Significant legal and
environmental changes - - - - - (51.3) 51.3 0.44
Income taxes (2) - - (95.5) (0.85) - - (85.2) (0.73)
Dilutive share impact
(3) - - - - - - (1.8) (0.01)
--- --- --- --- --- ----
As adjusted $655.5 $232.7 $224.8 $2.01 $589.1 $227.3 $199.1 $1.70
====== ====== ====== ====== ====== ======
Percent of net sales 71.4% 25.3% 24.5% 71.9% 27.8% 24.3%
( )
(1) Includes pre-tax accelerated
depreciation.
(2) Includes tax effects of above
adjustments as well as the
elimination of deferred tax
benefits related to acquired
intangibles. Deferred tax
benefits are recognized not
only on intangible asset
amortization, but also on
recurrent cash tax payments to
the IRS associated with
internal installment sale
transactions.
(3) For the three months ended March
27, 2015, the diluted net
income per share on a GAAP
basis was required to be
calculated using the two-class
method of calculating net
income per share. This method
required $0.9 million of net
income be allocated to
participating securities for
the three months ended March
27, 2015. This adjustment
reflects this allocation and a
similar allocation of the above
adjustments. Using the two-
class method, the weighted-
average number of shares were
117.2 million for the three
months ended March 27, 2015.
Due to the fiscal 2015 vesting
of equity awards that qualified
as participating securities,
the Company is no longer
required to use the two-class
method, and therefore applied
the treasury stock method for
the three months ended March
25, 2016.
MALLINCKRODT PLC
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Three Months Ended
------------------
March 25, 2016 March 27, 2015 Percent Currency Constant-
change impact currency
growth
-------------- -------------- -------- --------- ----------
Specialty
Brands $535.0 $334.3 60.0% (0.3)% 60.3%
Specialty
Generics 264.4 362.8 (27.1) (0.6) (26.5)
Nuclear
Imaging 102.2 109.5 (6.7) (1.3) (5.4)
----- -----
901.6 806.6 11.8 (0.6) 12.4
Other(1) 16.4 12.4 32.3 - 32.3
Net sales $918.0 $819.0 12.1% (0.6)% 12.7%
====== ======
(1) Represents net sales from an ongoing,
post-divestiture supply agreement
with the acquirer of the CMDS
business. Amounts for periods prior
to the divestiture represent the
reclassification of intercompany
sales to third-party sales to
conform with the expected
presentation of the ongoing supply
agreement.
MALLINCKRODT PLC
SELECT PRODUCT LINE NET SALES
(unaudited, in millions)
Three Months Ended
------------------
Constant-currency
March 25, 2016 March 27, 2015 Percent Currency
impact growth
change
---
Specialty Brands
Acthar $248.4 $228.0 8.9% - % 8.9%
Inomax 115.5 - - - - %
Ofirmev 71.1 68.1 4.4 - 4.4%
Therakos immunotherapy 50.2 - - - - %
Hemostasis 11.4 - - - - %
Other 38.4 38.2 0.5 (0.1) 0.6%
Specialty Brands Total $535.0 $334.3 60.0% (0.3)% 60.3%
====== ======
Specialty Generics
Hydrocodone (API) and
hydrocodone-containing
tablets $40.8 $66.6 (38.7)% - % (38.7)%
Oxycodone (API) and
oxycodone-containing
tablets 37.9 48.6 (22.0) - (22.0)
Methylphenidate ER 24.6 34.0 (27.6) - (27.6)
Other controlled substances 121.9 145.4 (16.2) - (16.2)
Other 39.2 68.2 (42.5) (3.0) (39.5)
Specialty Generics Total $264.4 $362.8 (27.1)% (0.6)% (26.5)%
====== ======
Nuclear Imaging Total $102.2 $109.5 (6.7)% (1.3)% (5.4)%
====== ======
MALLINCKRODT PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in millions, except per share data)
Six Months Ended
----------------
March 25, 2016 Percent of March 27, 2015 Percent of
Net sales Net sales
-------------- ----------- -------------- -----------
Net sales $1,832.8 100.0% $1,587.2 100.0%
Cost of sales 861.5 47.0 719.5 45.3
----- -----
Gross profit 971.3 53.0 867.7 54.7
Selling, general and
administrative
expenses 473.7 25.8 532.5 33.5
Research and
development expenses 122.2 6.7 110.7 7.0
Restructuring charges,
net 15.0 0.8 10.7 0.7
Non-restructuring
impairment charges 16.9 0.9 - -
Gains on divestiture
and license (0.3) - (1.7) (0.1)
---- ----
Operating income 343.8 18.8 215.5 13.6
Interest expense (195.0) (10.6) (106.2) (6.7)
Interest income 0.4 - 0.5 -
Other income, net 1.3 0.1 8.4 0.5
--- ---
Income from continuing
operations before
income taxes 150.5 8.2 118.2 7.4
Income tax benefit (85.7) (4.7) (44.4) (2.8)
----- -----
Income from continuing
operations 236.2 12.9 162.6 10.2
Income from
discontinued
operations, net of
income taxes 93.2 5.1 28.9 1.8
---- ----
Net income $329.4 18.0% $191.5 12.1%
====== ======
Basic earnings per share:
Income from continuing
operations $2.09 $1.40
Income from
discontinued
operations 0.82 0.25
Net income 2.91 1.65
Diluted earnings per share:
Income from continuing
operations $2.07 $1.38
Income from
discontinued
operations 0.82 0.25
Net income 2.88 1.62
Weighted-average number of shares
outstanding:
Basic 113.2 115.2
Diluted 114.2 116.8
( )
MALLINCKRODT PLC
NON-GAAP MEASURES
(unaudited, in millions except per share data)
Six Months Ended
----------------
March 25, 2016 March 27, 2015
-------------- --------------
Selling,
Gross profit Selling, general Diluted net
and income per
administrative share
expenses Net income Gross profit general Net income
and
administrative Diluted net
income per
share
expenses
--- ---
GAAP $971.3 $473.7 $329.4 $2.88 $867.7 $532.5 $191.5 $1.62
Adjustments:
Intangible asset
amortization 344.8 (3.6) 348.4 3.05 245.3 (2.4) 247.7 2.12
Restructuring and
related charges, net
(1) 0.6 (1.1) 16.8 0.15 - - 10.9 0.09
Inventory step-up
expense 18.3 - 18.3 0.16 35.2 - 35.2 0.30
Incremental equity
conversion costs - - - - - (45.4) 45.4 0.39
Income from discontinued
operations - - (93.2) (0.82) - - (28.9) (0.25)
Non-restructuring
impairment charges - - 16.9 0.15 - - - -
Change in contingent
consideration fair
value - 6.3 (6.3) (0.06) - - - -
Acquisition related
expenses - (3.0) 3.0 0.03 - (7.1) 7.1 0.06
Significant legal and
environmental changes - (11.5) 11.5 0.10 - (51.3) 51.3 0.44
Income taxes (2) - - (177.3) (1.55) - - (148.3) (1.27)
Dilutive share impact
(3) - - - - - - (4.1) (0.02)
--- --- --- --- --- ----
As adjusted $1,335.0 $460.8 $467.5 $4.09 $1,148.2 $426.3 $407.8 $3.49
======== ====== ====== ======== ====== ======
Percent of net sales 72.8% 25.1% 25.5% 72.3% 26.9% 25.7%
( )
(1) Includes pre-tax accelerated
depreciation.
(2) Includes tax effects of above
adjustments as well as the
elimination of deferred tax
benefits related to acquired
intangibles. Deferred tax
benefits are recognized not
only on intangible asset
amortization, but also on
recurrent cash tax payments to
the IRS associated with
internal installment sale
transactions.
(3) For the six months ended March
27, 2015, the diluted net
income per share on a GAAP
basis was required to be
calculated using the two-class
method of calculating net
income per share. This method
required $1.9 million of net
income be allocated to
participating securities for
the six months ended March 27,
2015. This adjustment reflects
this allocation and a similar
allocation of the above
adjustments. Using the two-
class method, the weighted-
average number of shares were
116.8 million for the six
months ended March 27, 2015.
Due to the fiscal 2015 vesting
of equity awards that qualified
as participating securities,
the Company is no longer
required to use the two-class
method, and therefore applied
the treasury stock method for
the six months ended March 27,
2015.
MALLINCKRODT PLC
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Six Months Ended
----------------
March 25, 2016 March 27, 2015 Percent Currency
change impact Constant-
currency
growth
------
Specialty
Brands $1,078.2 $707.9 52.3% (0.3)% 52.6%
Specialty
Generics 522.0 647.0 (19.3) (0.8) (18.5)
Nuclear
Imaging 205.8 211.4 (2.6) (2.8) 0.2
----- -----
1,806.0 1,566.3 15.3 (0.9) 16.2
Other(1) 26.8 20.9 28.2 - 28.2
Net sales $1,832.8 $1,587.2 15.5% (0.9)% 16.4%
======== ========
(1) Represents net sales from an ongoing,
post-divestiture supply agreement
with the acquirer of the CMDS
business. Amounts for periods prior
to the divestiture represent the
reclassification of intercompany
sales to third-party sales to
conform with the expected
presentation of the ongoing supply
agreement.
MALLINCKRODT PLC
SELECT PRODUCT LINE NET SALES
(unaudited, in millions)
Six Months Ended
----------------
March 25, 2016 March 27, 2015 Percent Currency Constant-
impact currency
growth
change
---
Specialty Brands
Acthar $535.1 $494.4 8.2% - % 8.2%
Inomax 226.3 - - - - %
Ofirmev 138.0 139.5 (1.1) - (1.1)%
Therakos immunotherapy 100.6 - - - - %
Hemostasis 11.4 - - - - %
Other 66.8 74.0 (9.7) (0.5) (9.2)%
Specialty Brands Total $1,078.2 $707.9 52.3% (0.3)% 52.6%
======== ======
Specialty Generics
Hydrocodone (API) and
hydrocodone-containing
tablets $77.5 $100.6 (23.0)% - % (23.0)%
Oxycodone (API) and
oxycodone-containing
tablets 66.8 95.6 (30.1) - (30.1)
Methylphenidate ER 55.8 82.6 (32.4) - (32.4)
Other controlled substances 231.6 257.3 (10.0) - (10.0)
Other 90.3 110.9 (18.6) (4.9) (13.7)
Specialty Generics Total $522.0 $647.0 (19.3)% (0.8)% (18.5)%
====== ======
Nuclear Imaging Total $205.8 $211.4 (2.6)% (2.8)% 0.2%
====== ======
MALLINCKRODT PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
March 25, 2016 September 25, 2015
-------------- ------------------
Assets
Current Assets:
Cash and cash equivalents $341.4 $365.9
Accounts receivable, net 503.5 548.5
Inventories 377.1 281.8
Deferred income taxes 116.3 142.7
Prepaid expenses and other
current assets 205.6 207.3
Current assets held for sale 1.0 299.9
Total current assets 1,544.9 1,846.1
Property, plant and
equipment, net 999.4 991.3
Goodwill 3,645.3 3,649.4
Intangible assets, net 9,425.3 9,666.3
Other assets 288.7 251.0
----- -----
Total Assets $15,903.6 $16,404.1
========= =========
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-
term debt $21.6 $22.3
Accounts payable 118.0 133.0
Accrued payroll and payroll-
related costs 99.6 103.7
Accrued interest 98.3 80.2
Accrued and other current
liabilities 549.5 517.4
Current liabilities held for
sale 5.1 72.8
--- ----
Total current liabilities 892.1 929.4
Long-term debt 6,409.6 6,474.3
Pension and postretirement
benefits 132.7 116.7
Environmental liabilities 72.5 73.3
Deferred income taxes 2,872.2 3,132.4
Other income tax liabilities 118.3 121.3
Other liabilities 308.3 245.5
----- -----
Total Liabilities 10,805.7 11,092.9
Shareholders' Equity:
Preferred shares - -
Ordinary shares 23.6 23.5
Ordinary shares held in
treasury at cost (611.3) (109.7)
Additional paid-in capital 5,382.4 5,357.6
Retained earnings 368.3 38.9
Accumulated other
comprehensive income (65.1) 0.9
----- ---
Total Shareholders' Equity 5,097.9 5,311.2
------- -------
Total Liabilities and
Shareholders' Equity $15,903.6 $16,404.1
========= =========
MALLINCKRODT PLC
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Six Months Ended
----------------
March 25, 2016 March 27, 2015
-------------- --------------
Cash Flows From
Operating
Activities:
Net
income $329.4 $191.5
Adjustments to
reconcile net cash
provided by
operating
activities:
Depreciation
and
amortization 417.5 301.2
Share-
based
compensation 19.8 65.9
Deferred
income
taxes (224.0) (124.2)
Non-
cash
impairment
charges 16.9 -
Gain
on
disposal
of
discontinued
operations (97.4) -
Other
non-
cash
items 9.2 (59.6)
Changes in assets
and liabilities,
net of the effects
of acquisitions:
Accounts
receivable,
net 50.6 (29.8)
Inventories 1.3 42.3
Accounts
payable (16.2) 19.1
Income
taxes 71.9 82.3
Other (38.9) (123.2)
----- ------
Net
cash
provided
by
operating
activities 540.1 365.5
----- -----
Cash Flows From
Investing
Activities:
Capital
expenditures (91.4) (55.1)
Acquisitions
and
intangibles,
net
of
cash
acquired (170.1) -
Proceeds
from
disposal
of
discontinued
operations,
net
of
cash 269.8 -
Restricted
cash 21.1 0.4
Other 4.6 1.7
--- ---
Net
cash
provided
by
(used
in)
investing
activities 34.0 (53.0)
---- -----
Cash Flows From
Financing
Activities:
Issuance
of
external
debt 78.4 80.0
Repayment
of
external
debt
and
capital
leases (151.5) (63.5)
Debt
financing
costs (0.1) (0.4)
Excess
tax
benefit
from
share-
based
compensation - 20.2
Proceeds
from
exercise
of
share
options 6.3 20.6
Repurchase
of
shares (501.6) (12.3)
Other (30.0) (4.0)
----- ----
Net
cash
(used
in)
provided
by
financing
activities (598.5) 40.6
------ ----
Effect
of
currency
rate
changes
on
cash (0.1) (7.4)
---- ----
Net
increase
in
cash
and
cash
equivalents (24.5) 345.7
Cash
and
cash
equivalents
at
beginning
of
period 365.9 707.8
Cash
and
cash
equivalents
at
end
of
period $341.4 $1,053.5
====== ========
MALLINCKRODT PLC
HISTORICAL PRO FORMA NET SALES (1)
(unaudited, in millions)
Three Months Ended (2)
December 26, March 27, June 26, September 25,
2014 2015 2015 2015
------------ ---------- --------- -------------
Inomax (3) $95.7 $101.5 $98.1 $103.7
Therakos immunotherapy 48.2 45.0 46.2 46.1
Hemostasis products
(4) 17.9 16.3 15.9 15.4
(1) Mallinckrodt may from time to time
reference pro forma net sales in its
public communications, which is
considered a "non-GAAP" financial
measure under applicable SEC rules and
regulations. Pro forma net sales is a
key financial measure used by
management to assess net sales growth,
and represents net sales of acquired
products or businesses as if the
product or business had been owned by
Mallinckrodt for the entire period
presented. This adjusted measure
should be considered supplemental to
and not a substitute for financial
information prepared in accordance with
GAAP. Mallinckrodt's definition of
this adjusted measure may differ from
similarly titled measures used by
others. Unless otherwise noted,
amounts in the table represent
historical pro forma net sales prior to
Mallinckrodt's acquisition and are
excluded from Mallinckrodt's historical
financial information.
(2) Unless otherwise noted, the periods
presented above represents the three
calendar months most closely aligned to
Mallinckrodt's fiscal periods, as the
prior owners utilized calendar month
end reporting. As such the periods
presented above included 92, 90, 91 and
92 days for the three months ended
December 26, 2014, March 27, 2015, June
26, 2015 and September 25, 2015,
respectively, instead of 91 days in
Mallinckrodt's three months ended for
those periods.
(3) Inomax pro forma net sales for the three
months ended June 26, 2015, included
only 87 days as this represented the
period it was acquired by Mallinckrodt
and converted from calendar reporting
to Mallinckrodt's fiscal periods. The
three months ended June 26, 2015
included $16.7 million of net sales
prior to the acquisition (April 1, 2015
through April 15, 2015) that are
excluded from Mallinckrodt's historical
financial information and $81.5 million
of post-acquisition net sales (April
16, 2015 through June 26, 2015) that
are included within Mallinckrodt's
historical financial information. The
Inomax net sales for the three months
ended September 25, 2015 (June 27, 2015
through September 25, 2015) are fully
included within Mallinckrodt's
historical financial information.
(4) Represents historical net sales of
Recothrom.
Logo - http://photos.prnewswire.com/prnh/20150105/167103LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mallinckrodt-plc-reports-fiscal-2016-second-quarter-results-300261531.html
SOURCE Mallinckrodt plc
