Reports Second Quarter
Reports Net Loss of
Reaffirms 2023 Net Sales and Adjusted EBITDA Guidance
Terlivaz® Launch Exceeds Expectations, Obtaining Approximately 50% of Targeted Hospital Formulary Access With Continued Medical Community Interest
Provides Update on Liquidity and Discussions With
"Mallinckrodt continued to advance our strategic initiatives in the second quarter, delivering results in line with our expectations. I am particularly pleased to share that we achieved year-over-year revenue growth this quarter – an important step forward in our goal to stabilize the business in the near term and return to sustainable growth in the long term," said
Second Quarter 2023 Financial Results1
Mallinckrodt's net sales in the second quarter of 2023 were
The Company's Specialty Brands segment reported net sales of
Mallinckrodt's Specialty Generics segment reported net sales of
The Company recorded a net loss for the second quarter of
Mallinckrodt's Adjusted EBITDA in the second quarter was
As a result of Mallinckrodt's ongoing evaluation of its financial situation and related discussions with its stakeholders, the Company has recorded
Six-Month 2023 Results2
Mallinckrodt's net sales were
The Company recorded a net loss of
Mallinckrodt's Adjusted EBITDA was
Second Quarter 2023 Business Segment Update
Specialty Brands Segment
Acthar Gel net sales declined 4.0% on a reported and constant currency basis, or
Terlivaz's launch progress continued to reflect positive momentum and significant enthusiasm from the medical community nearly one year following U.S. Food and Drug Administration (FDA) approval. The Company has gained formulary inclusion for Terlivaz at approximately 50% of targeted hospitals, ahead of the product's anticipated launch curve. Based on early utilization data, the Company expects peak year net sales between
INOmax® (nitric oxide) gas, for inhalation continues to be the market leader in nitric oxide for critically ill newborns, despite sales performance being impacted by persistent competitive pressures. Mallinckrodt continues to work with the
Amitiza sales continued to be impacted by the U.S. market becoming fully genericized and multiple market entrants. Internationally, product sales declined in the Japanese market due to an unfavorable impact from pricing.
Specialty Generics Segment
Mallinckrodt's Specialty Generics segment continued to experience strong growth driven by the strength of its
The Company continues to expect Specialty Generics net sales growth in 2023, particularly as disruptions in the drug market supply chain and shortages in certain therapeutic areas persist. As manufacturing volumes have increased, Mallinckrodt's materials supply chain has been resilient, and the Company is working to meet robust demand with a focus on enhancing manufacturing labor resources.
Please see "Non-GAAP Financial Measures" included in this release for a discussion of non-GAAP measures and reconciliation of GAAP and non-GAAP financial measures for the second quarter.
Liquidity Update
Mallinckrodt's cash balance at the end of the second quarter was
As the Company previously disclosed, on
Subject to approval by the Company's Board of Directors, Mallinckrodt's ongoing discussions with its various stakeholders contemplate entering into a restructuring support agreement that would include, among other things, initiating Chapter 11 proceedings. The Company expects to continue its current operations without material interruption and work with its business partners as usual during the course of these discussions and any potential restructuring.
Please see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Quarterly Report on Form 10-Q for the quarter ended
2023 Financial Guidance Update
For the full-year 2023, Mallinckrodt reaffirmed its net sales and Adjusted EBITDA guidance despite assuming incremental compensation costs in its results for key employee incentive and retention programs that could amount to
2023 Guidance |
|
Total net sales |
|
Adjusted EBITDA |
|
The Company does not provide a reconciliation of forward-looking non-GAAP guidance to the comparable GAAP measures as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort.
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The Company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, hepatology, nephrology, pulmonology, ophthalmology and oncology; immunotherapy and neonatal respiratory critical care therapies; analgesics; cultured skin substitutes and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. 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
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures, including adjusted EBITDA, adjusted gross profit, adjusted SG&A, adjusted R&D, and net sales growth (loss) on a constant-currency basis, which are considered "non-GAAP" financial measures under applicable
Adjusted EBITDA represents net income or loss prepared in accordance with accounting principles generally accepted in the
Segment net sales growth (loss) on a constant-currency basis measures the change in segment net sales between current- and prior-year periods using a constant currency, the exchange rate in effect during the applicable prior-year period.
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 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 unaudited condensed 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.
Further information regarding non-GAAP financial measures can be found on the Investor Relations page of the Company's website.
Predecessor and Successor Periods
Mallinckrodt's financial results presented here within include Successor and Predecessor periods. The Successor period runs from
Mallinckrodt's results of operations as reported in its unaudited condensed consolidated financial statements for the Successor and Predecessor periods are in accordance with GAAP. The comparison of the Predecessor and Successor periods for the periods presented here is not in accordance with GAAP. However, the Company believes that the comparison is useful for management and investors to assess Mallinckrodt's ongoing financial and operational performance and trends.
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, expected product launches, legal, economic, business, competitive and/or regulatory factors affecting Mallinckrodt's businesses, and any other statements regarding events or developments Mallinckrodt believes or anticipates 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: the possibility of entering into a restructuring support agreement; our operations and work with our business partners during the course of our ongoing discussions and any potential restructuring support agreement; the comparability of Mallinckrodt's post-emergence financial results to its historical results and the projections filed with the
The "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Mallinckrodt's Annual Report on Form 10-K for the fiscal year ended
CONTACTS
Investor Relations
Senior Vice President, Finance
314-654-3638
daniel.speciale@mnk.com
Derek Belz
Vice President, Investor Relations
314-654-3950
derek.belz@mnk.com
Media
Michael Freitag / Aaron Palash / Aura Reinhard
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Mallinckrodt, the "M" brand mark and the Mallinckrodt Pharmaceuticals logo are trademarks of a Mallinckrodt company. Other brands are trademarks of a Mallinckrodt company or their respective owners. © 2023.
_______________________________ |
1As a result of emerging from Chapter 11, the Company's second quarter ended |
2 As a result of emerging from Chapter 11, the Company's 6-month comparison period ended |
Exhibit 99.1
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
(unaudited, in millions, except per share data) |
|||||||||
Successor |
Predecessor |
||||||||
Three Months |
Period from |
Period from |
|||||||
Percent of Net sales |
Percent of Net sales |
Percent of Net sales |
|||||||
Net sales |
$ 475.0 |
100.0 % |
$ 85.0 |
100.0 % |
$ 383.7 |
100.0 % |
|||
Cost of sales |
370.1 |
77.9 |
102.2 |
120.2 |
266.8 |
69.5 |
|||
Gross profit (loss) |
104.9 |
22.1 |
(17.2) |
(20.2) |
116.9 |
30.5 |
|||
Selling, general and administrative expenses |
132.7 |
27.9 |
30.3 |
35.6 |
122.8 |
32.0 |
|||
Research and development expenses |
29.0 |
6.1 |
6.2 |
7.3 |
28.3 |
7.4 |
|||
Restructuring charges, net |
(0.2) |
— |
1.1 |
1.3 |
2.8 |
0.7 |
|||
Operating loss |
(56.6) |
(11.9) |
(54.8) |
(64.5) |
(37.0) |
(9.6) |
|||
Interest expense |
(162.6) |
(34.2) |
(21.1) |
(24.8) |
(50.4) |
(13.1) |
|||
Interest income |
4.7 |
1.0 |
0.1 |
0.1 |
0.2 |
0.1 |
|||
Other (expense) income, net |
(1.2) |
(0.3) |
5.9 |
6.9 |
(10.5) |
(2.7) |
|||
Reorganization items, net |
(4.0) |
(0.8) |
(3.5) |
(4.1) |
(587.5) |
(153.1) |
|||
Loss from continuing operations before income taxes |
(219.7) |
(46.3) |
(73.4) |
(86.4) |
(685.2) |
(178.6) |
|||
Income tax expense (benefit) |
528.1 |
111.2 |
(9.7) |
(11.4) |
(491.4) |
(128.1) |
|||
Loss from continuing operations |
(747.8) |
(157.4) |
(63.7) |
(74.9) |
(193.8) |
(50.5) |
|||
Income from discontinued operations, net of income taxes |
— |
— |
— |
— |
0.3 |
0.1 |
|||
Net loss |
$ (747.8) |
(157.4) % |
$ (63.7) |
(74.9) % |
$ (193.5) |
(50.4) % |
|||
Basic and diluted (loss) income per share: |
|||||||||
Loss from continuing operations |
$ (56.74) |
$ (4.83) |
$ (2.29) |
||||||
Income from discontinued operations |
— |
— |
— |
||||||
Net loss |
$ (56.74) |
$ (4.83) |
$ (2.28) |
||||||
Weighted-average number of shares outstanding |
|||||||||
Basic and diluted |
13.2 |
13.2 |
84.8 |
|
|||||||||||
CONSOLIDATED ADJUSTED EBITDA |
|||||||||||
(unaudited, in millions) |
|||||||||||
Successor |
Predecessor |
Non-GAAP |
|||||||||
Three Months |
Period from |
Period from |
Three Months Ended |
||||||||
Gross |
SG&A |
R&D |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
|||||
Net loss |
$ 104.9 |
$ 132.7 |
$ 29.0 |
$ (747.8) |
$ (63.7) |
$ (193.5) |
$ (257.2) |
||||
Adjustments: |
|||||||||||
Interest expense, net |
— |
— |
— |
157.9 |
21.0 |
50.2 |
71.2 |
||||
Income tax expense (benefit) |
— |
— |
— |
528.1 |
(9.7) |
(491.4) |
(501.1) |
||||
Depreciation |
9.7 |
(1.6) |
(0.5) |
11.8 |
2.9 |
17.9 |
20.8 |
||||
Amortization |
129.3 |
— |
— |
129.3 |
45.5 |
126.7 |
172.2 |
||||
Restructuring charges, net |
— |
— |
— |
(0.2) |
1.1 |
2.8 |
3.9 |
||||
Income from discontinued |
— |
— |
— |
— |
— |
(0.3) |
(0.3) |
||||
Change in contingent |
— |
7.5 |
— |
(7.5) |
— |
0.1 |
0.1 |
||||
Liabilities management and |
— |
(10.3) |
— |
10.3 |
9.2 |
7.0 |
16.2 |
||||
Unrealized loss (gain) on equity |
— |
— |
— |
1.2 |
(6.0) |
18.5 |
12.5 |
||||
Reorganization items, net |
— |
— |
— |
4.0 |
3.5 |
587.5 |
591.0 |
||||
Share-based compensation |
— |
(2.6) |
(0.1) |
2.7 |
— |
0.5 |
0.5 |
||||
Fresh-start inventory-related |
54.2 |
— |
— |
54.2 |
26.5 |
— |
26.5 |
||||
As adjusted: |
$ 298.1 |
$ 125.7 |
$ 28.4 |
$ 144.0 |
$ 30.3 |
$ 126.0 |
$ 156.3 |
||||
(1) |
Represents costs included in SG&A expenses, primarily related to professional fees incurred by the Company (including where the Company is responsible for the fees of third parties) in connection with its ongoing evaluation of its financial situation and related discussions with its stakeholders, expenses incurred related to the Predecessor directors' and officers' insurance policy and severance for the former Chief Executive Officer ("CEO") of the Predecessor, in addition to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence. |
(2) |
Represents |
(3) |
Adjusted gross profit, adjusted SG&A and adjusted research and development ("R&D") expenses for the period |
|
||||||
SEGMENT OPERATING INCOME |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Three Months |
Period from |
Period from |
||||
Specialty Brands (1) |
$ 61.6 |
$ 4.5 |
$ 102.4 |
|||
Specialty Generics (2) |
35.1 |
0.3 |
30.9 |
|||
Segment operating income |
96.7 |
4.8 |
133.3 |
|||
Unallocated amounts: |
||||||
Corporate and unallocated expenses (3) |
0.6 |
(0.9) |
(15.4) |
|||
Depreciation and amortization |
(141.1) |
(48.4) |
(144.6) |
|||
Share-based compensation |
(2.7) |
— |
(0.5) |
|||
Restructuring charges, net |
0.2 |
(1.1) |
(2.8) |
|||
Liabilities management and separation costs (4) |
(10.3) |
(9.2) |
(7.0) |
|||
Operating loss |
$ (56.6) |
$ (54.8) |
$ (37.0) |
(1) |
Includes |
(2) |
Includes |
(3) |
Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments. |
(4) |
Represents costs included in SG&A expenses, primarily related to professional fees incurred by the Company (including where the Company is responsible for the fees of third parties) in connection with its ongoing evaluation of its financial situation and related discussions with its stakeholders, expenses incurred related to the Predecessor directors' and officers' insurance policy and severance for the former CEO of the Predecessor, in addition to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence. |
|
||||||
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Three Months |
Period from |
Period from |
||||
Specialty Brands |
$ 280.1 |
$ 58.2 |
$ 247.7 |
|||
Specialty Generics |
194.9 |
26.8 |
136.0 |
|||
Net sales |
$ 475.0 |
$ 85.0 |
$ 383.7 |
|
||||||||||
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH |
||||||||||
(unaudited, in millions) |
||||||||||
Successor |
Non-GAAP |
Non-GAAP Measure |
||||||||
Three Months |
Three Months |
Percent change |
Currency |
Constant- |
||||||
Specialty Brands |
$ 280.1 |
$ 305.9 |
(8.4) % |
0.1 % |
(8.5) % |
|||||
Specialty Generics |
194.9 |
162.8 |
19.7 |
— |
19.7 |
|||||
Net sales |
$ 475.0 |
$ 468.7 |
1.3 % |
— % |
1.3 % |
|
||||||
SELECT PRODUCT LINE NET SALES AND CONSTANT-CURRENCY GROWTH |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Three Months |
Period from |
Period from |
||||
Specialty Brands |
||||||
Acthar Gel |
$ 116.8 |
$ 27.5 |
$ 94.2 |
|||
INOmax |
76.9 |
13.5 |
66.8 |
|||
|
62.9 |
10.2 |
49.7 |
|||
Amitiza |
18.6 |
5.8 |
33.8 |
|||
Terlivaz |
3.4 |
— |
— |
|||
Other |
1.5 |
1.2 |
3.2 |
|||
Specialty Brands Total |
280.1 |
58.2 |
247.7 |
|||
Specialty Generics |
||||||
Opioids |
72.1 |
8.7 |
38.8 |
|||
ADHD |
19.0 |
1.8 |
6.8 |
|||
Addiction treatment |
16.1 |
2.5 |
14.1 |
|||
Other |
2.4 |
0.1 |
2.0 |
|||
Generics |
109.6 |
13.1 |
61.7 |
|||
Controlled substances |
20.9 |
1.7 |
17.2 |
|||
APAP |
59.8 |
11.3 |
50.2 |
|||
Other |
4.6 |
0.7 |
6.9 |
|||
API |
85.3 |
13.7 |
74.3 |
|||
Specialty Generics |
194.9 |
26.8 |
136.0 |
|||
Net sales |
$ 475.0 |
$ 85.0 |
$ 383.7 |
|
||||||||||
SELECT PRODUCT LINE NET SALES AND CONSTANT-CURRENCY GROWTH |
||||||||||
(unaudited, in millions) |
||||||||||
Successor |
Non-GAAP |
Non-GAAP Measure |
||||||||
Three Months |
Three Months |
Percent change |
Currency |
Constant- |
||||||
Specialty Brands |
||||||||||
Acthar Gel |
$ 116.8 |
$ 121.7 |
(4.0) % |
— % |
(4.0) % |
|||||
INOmax |
76.9 |
80.3 |
(4.2) |
(0.1) |
(4.1) |
|||||
|
62.9 |
59.9 |
5.0 |
0.5 |
4.5 |
|||||
Amitiza |
18.6 |
39.6 |
(53.0) |
— |
(53.0) |
|||||
Terlivaz |
3.4 |
— |
— |
— |
— |
|||||
Other |
1.5 |
4.4 |
(65.9) |
(0.4) |
(65.5) |
|||||
Specialty Brands Total |
280.1 |
305.9 |
(8.4) |
0.1 |
(8.5) |
|||||
Specialty Generics |
||||||||||
Opioids |
72.1 |
47.5 |
51.8 |
— |
51.8 |
|||||
ADHD |
19.0 |
8.6 |
120.9 |
— |
120.9 |
|||||
Addiction treatment |
16.1 |
16.6 |
(3.0) |
(0.3) |
(2.7) |
|||||
Other |
2.4 |
2.1 |
14.3 |
— |
14.3 |
|||||
Generics |
109.6 |
74.8 |
46.5 |
(0.1) |
46.6 |
|||||
Controlled substances |
20.9 |
18.9 |
10.6 |
— |
10.6 |
|||||
APAP |
59.8 |
61.5 |
(2.8) |
— |
(2.8) |
|||||
Other |
4.6 |
7.6 |
(39.5) |
— |
(39.5) |
|||||
API |
85.3 |
88.0 |
(3.1) |
— |
(3.1) |
|||||
Specialty Generics |
194.9 |
162.8 |
19.7 |
— |
19.7 |
|||||
Net sales |
$ 475.0 |
$ 468.7 |
1.3 % |
— % |
1.3 % |
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
(unaudited, in millions, except per share data) |
|||||||||
Successor |
|||||||||
Six Months |
Period from through |
Period from through |
|||||||
Percent of Net sales |
Percent of Net sales |
Percent of Net sales |
|||||||
Net sales |
$ 899.6 |
100.0 % |
$ 85.0 |
100.0 % |
$ 874.6 |
100.0 % |
|||
Cost of sales |
744.9 |
82.8 |
102.2 |
120.2 |
582.0 |
66.5 |
|||
Gross profit (loss) |
154.7 |
17.2 |
(17.2) |
(20.2) |
292.6 |
33.5 |
|||
Selling, general and administrative expenses |
255.6 |
28.4 |
30.3 |
35.6 |
275.3 |
31.5 |
|||
Research and development expenses |
57.3 |
6.4 |
6.2 |
7.3 |
65.5 |
7.5 |
|||
Restructuring charges, net |
1.0 |
0.1 |
1.1 |
1.3 |
9.6 |
1.1 |
|||
Operating loss |
(159.2) |
(17.7) |
(54.8) |
(64.5) |
(57.8) |
(6.6) |
|||
Interest expense |
(324.6) |
(36.1) |
(21.1) |
(24.8) |
(108.6) |
(12.4) |
|||
Interest income |
9.4 |
1.0 |
0.1 |
0.1 |
0.6 |
0.1 |
|||
Other (expense) income, net |
(15.8) |
(1.8) |
5.9 |
6.9 |
(14.6) |
(1.7) |
|||
Reorganization items, net |
(9.6) |
(1.1) |
(3.5) |
(4.1) |
(630.9) |
(72.1) |
|||
Loss from continuing operations before income taxes |
(499.8) |
(55.6) |
(73.4) |
(86.4) |
(811.3) |
(92.8) |
|||
Income tax expense (benefit) |
497.3 |
55.3 |
(9.7) |
(11.4) |
(497.3) |
(56.9) |
|||
Loss from continuing operations |
(997.1) |
(110.8) |
(63.7) |
(74.9) |
(314.0) |
(35.9) |
|||
Income from discontinued operations, net of income taxes |
— |
— |
— |
— |
0.9 |
0.1 |
|||
Net loss |
$ (997.1) |
(110.8) % |
$ (63.7) |
(74.9) % |
$ (313.1) |
(35.8) % |
|||
Basic and diluted (loss) income per share: |
|||||||||
Loss from continuing operations |
$ (75.68) |
$ (4.83) |
$ (3.70) |
||||||
Income from discontinued operations |
— |
— |
0.01 |
||||||
Net loss |
$ (75.68) |
$ (4.83) |
$ (3.69) |
||||||
Weighted-average number of shares outstanding: |
|||||||||
Basic and diluted |
13.2 |
13.2 |
84.8 |
|
|||||||||||
CONSOLIDATED ADJUSTED EBITDA |
|||||||||||
(unaudited, in millions) |
|||||||||||
Successor |
Predecessor |
Non-GAAP |
|||||||||
Six Months |
Period from |
Period from |
Six Months Ended |
||||||||
Gross |
SG&A |
R&D |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
|||||
Net loss |
$ 154.7 |
$ 255.6 |
$ 57.3 |
$ (997.1) |
$ (63.7) |
$ (313.1) |
$ (376.8) |
||||
Adjustments: |
|||||||||||
Interest expense, net |
— |
— |
— |
315.2 |
21.0 |
108.0 |
129.0 |
||||
Income tax expense (benefit) |
— |
— |
— |
497.3 |
(9.7) |
(497.3) |
(507.0) |
||||
Depreciation |
18.6 |
(4.1) |
(1.0) |
23.7 |
2.9 |
40.0 |
42.9 |
||||
Amortization |
262.5 |
— |
— |
262.5 |
45.5 |
281.8 |
327.3 |
||||
Restructuring charges, net |
— |
— |
— |
1.0 |
1.1 |
9.6 |
10.7 |
||||
Income from discontinued |
— |
— |
— |
— |
— |
(0.9) |
(0.9) |
||||
Change in contingent |
— |
7.1 |
— |
(7.1) |
— |
— |
— |
||||
Significant legal and environmental |
— |
— |
11.1 |
11.1 |
|||||||
Liabilities management and |
— |
(15.2) |
— |
15.2 |
9.2 |
9.0 |
18.2 |
||||
Unrealized loss (gain) on equity |
— |
— |
— |
16.3 |
(6.0) |
22.2 |
16.2 |
||||
Reorganization items, net |
— |
— |
— |
9.6 |
3.5 |
630.9 |
634.4 |
||||
Share-based compensation |
— |
(5.1) |
(0.2) |
5.3 |
— |
1.7 |
1.7 |
||||
Fresh-start inventory-related |
125.6 |
— |
— |
125.6 |
26.5 |
— |
26.5 |
||||
As adjusted: |
$ 561.4 |
$ 238.3 |
$ 56.1 |
$ 267.5 |
$ 30.3 |
$ 303.0 |
$ 333.3 |
||||
(1) |
Represents costs included in SG&A expenses, primarily related to professional fees incurred by the Company (including where the Company is responsible for the fees of third parties) in connection with its ongoing evaluation of its financial situation and related discussions with its stakeholders, expenses incurred related to the Predecessor directors' and officers' insurance policy and severance for the former CEO of the Predecessor, in addition to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence. |
(2) |
Includes |
(3) |
Adjusted gross profit, adjusted SG&A and adjusted research and development ("R&D") expenses for the period |
|
||||||
SEGMENT OPERATING INCOME |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Six Months |
Period from |
Period from |
||||
Specialty Brands (1) |
$ 94.0 |
$ 4.5 |
$ 267.2 |
|||
Specialty Generics (2) |
67.9 |
0.3 |
65.3 |
|||
Segment operating income |
161.9 |
4.8 |
332.5 |
|||
Unallocated amounts: |
||||||
Corporate and unallocated expenses (3) |
(13.4) |
(0.9) |
(48.2) |
|||
Depreciation and amortization |
(286.2) |
(48.4) |
(321.8) |
|||
Share-based compensation |
(5.3) |
— |
(1.7) |
|||
Restructuring charges, net |
(1.0) |
(1.1) |
(9.6) |
|||
Liabilities management and separation costs (4) |
(15.2) |
(9.2) |
(9.0) |
|||
Operating loss |
$ (159.2) |
$ (54.8) |
$ (57.8) |
(1) |
Includes |
(2) |
Includes |
(3) |
Includes administration expenses and certain compensation, legal, environmental and other costs not charged to our reportable segments. |
(4) |
Represents costs included in SG&A, primarily related to professional fees incurred by the Company (including where the Company is responsible for the fees of third parties) in connection with its ongoing evaluation of its financial situation and related discussions with its stakeholders, expenses incurred related to the Predecessor directors' and officers' insurance policy and severance for the former CEO of the Predecessor, in addition to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence. |
|
||||||
SEGMENT |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Six Months |
Period from |
Period from through |
||||
Specialty Brands |
$ 532.1 |
$ 58.2 |
$ 587.1 |
|||
Specialty Generics |
367.5 |
26.8 |
287.5 |
|||
Net sales |
$ 899.6 |
$ 85.0 |
$ 874.6 |
|
|||||||||
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH |
|||||||||
(unaudited, in millions) |
|||||||||
Successor |
Non-GAAP |
Non-GAAP Measure |
|||||||
Six Months |
Six Months |
Percent change |
Currency |
Constant- |
|||||
Specialty Brands |
$ 532.1 |
$ 645.3 |
(17.5) % |
(0.1) % |
(17.4) % |
||||
Specialty Generics |
367.5 |
314.3 |
16.9 |
— |
16.9 |
||||
Net sales |
$ 899.6 |
$ 959.6 |
(6.3) % |
(0.1) % |
(6.2) % |
|
||||||
SELECT PRODUCT |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Six Months |
Period from through |
Period from |
||||
Specialty Brands |
||||||
Acthar Gel |
$ 198.8 |
$ 27.5 |
$ 221.9 |
|||
INOmax |
159.6 |
13.5 |
165.8 |
|||
|
121.6 |
10.2 |
109.6 |
|||
Amitiza |
43.1 |
5.8 |
81.5 |
|||
Terlivaz |
5.6 |
— |
— |
|||
Other |
3.4 |
1.2 |
8.3 |
|||
Specialty Brands Total |
532.1 |
58.2 |
587.1 |
|||
Specialty Generics |
||||||
Opioids |
134.3 |
8.7 |
88.8 |
|||
ADHD |
41.4 |
1.8 |
17.5 |
|||
Addiction treatment |
31.7 |
2.5 |
30.0 |
|||
Other |
4.2 |
0.1 |
4.9 |
|||
Generics |
211.6 |
13.1 |
141.2 |
|||
Controlled substances |
39.4 |
1.7 |
37.6 |
|||
APAP |
106.2 |
11.3 |
96.5 |
|||
Other |
10.3 |
0.7 |
12.2 |
|||
API |
155.9 |
13.7 |
146.3 |
|||
Specialty Generics |
367.5 |
26.8 |
287.5 |
|||
Net sales |
$ 899.6 |
$ 85.0 |
$ 874.6 |
|
|||||||||
SELECT PRODUCT LINE NET SALES AND CONSTANT-CURRENCY GROWTH |
|||||||||
(unaudited, in millions) |
|||||||||
Successor |
Non-GAAP Combined |
Non-GAAP Measures |
|||||||
Six Months |
Six Months |
Percent change |
Currency |
Constant- |
|||||
Specialty Brands |
|||||||||
Acthar Gel |
$ 198.8 |
$ 249.4 |
(20.3) % |
— % |
(20.3) % |
||||
INOmax |
159.6 |
179.3 |
(11.0) |
(0.1) |
(10.9) |
||||
|
121.6 |
119.8 |
1.5 |
(0.5) |
2.0 |
||||
Amitiza |
43.1 |
87.3 |
(50.6) |
— |
(50.6) |
||||
Terlivaz |
5.6 |
— |
— |
— |
— |
||||
Other |
3.4 |
9.5 |
(64.2) |
(1.4) |
(62.8) |
||||
Specialty Brands Total |
532.1 |
645.3 |
(17.5) |
(0.1) |
(17.4) |
||||
Specialty Generics |
|||||||||
Opioids |
134.3 |
97.5 |
37.7 |
— |
37.7 |
||||
ADHD |
41.4 |
19.3 |
114.5 |
— |
114.5 |
||||
Addiction treatment |
31.7 |
32.5 |
(2.5) |
(0.4) |
(2.1) |
||||
Other |
4.2 |
5.0 |
(16.0) |
— |
(16.0) |
||||
Generics |
211.6 |
154.3 |
37.1 |
(0.1) |
37.2 |
||||
Controlled substances |
39.4 |
39.3 |
0.3 |
— |
0.3 |
||||
APAP |
106.2 |
107.8 |
(1.5) |
— |
(1.5) |
||||
Other |
10.3 |
12.9 |
(20.2) |
— |
(20.2) |
||||
API |
155.9 |
160.0 |
(2.6) |
— |
(2.6) |
||||
Specialty Generics |
367.5 |
314.3 |
16.9 |
— |
16.9 |
||||
Net sales |
$ 899.6 |
$ 959.6 |
(6.3) % |
(0.1) % |
(6.2) % |
|
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(unaudited, in millions) |
|||
Successor |
|||
|
|
||
Assets |
|||
Current Assets: |
|||
Cash and cash equivalents |
$ 480.6 |
$ 409.5 |
|
Accounts receivable, net |
391.2 |
405.3 |
|
Inventories |
860.5 |
947.6 |
|
Prepaid expenses and other current assets |
123.2 |
273.4 |
|
Total current assets |
1,855.5 |
2,035.8 |
|
Property, plant and equipment, net |
453.2 |
457.6 |
|
Intangible assets, net |
2,581.3 |
2,843.8 |
|
Deferred income taxes |
— |
475.5 |
|
Other assets |
216.9 |
201.1 |
|
Total Assets |
$ 5,106.9 |
$ 6,013.8 |
|
Liabilities and Shareholders' Equity |
|||
Current Liabilities: |
|||
Current maturities of long-term debt |
$ 2,361.0 |
$ 44.1 |
|
Accounts payable |
83.4 |
114.0 |
|
Accrued payroll and payroll-related costs |
51.7 |
49.5 |
|
Accrued interest |
81.0 |
29.0 |
|
Acthar Gel-Related Settlement |
21.4 |
16.5 |
|
Opioid-Related Litigation Settlement liability |
400.0 |
200.0 |
|
Accrued and other current liabilities |
256.8 |
290.7 |
|
Total current liabilities |
3,255.3 |
743.8 |
|
Long-term debt |
737.6 |
3,027.7 |
|
Acthar Gel-Related Settlement |
65.8 |
75.0 |
|
Opioid-Related Litigation Settlement liability |
258.0 |
379.9 |
|
Pension and postretirement benefits |
41.0 |
41.0 |
|
Environmental liabilities |
35.2 |
35.8 |
|
Other income tax liabilities |
18.9 |
18.2 |
|
Other liabilities |
69.7 |
78.7 |
|
Total Liabilities |
4,481.5 |
4,400.1 |
|
Shareholders' Equity: |
|||
Preferred shares |
— |
— |
|
Ordinary shares |
0.1 |
0.1 |
|
Ordinary shares held in treasury at cost |
(0.1) |
— |
|
Additional paid-in capital |
2,196.1 |
2,191.0 |
|
Accumulated other comprehensive income |
14.6 |
10.8 |
|
Retained deficit |
(1,585.3) |
(588.2) |
|
Total Shareholders' Equity |
625.4 |
1,613.7 |
|
Total Liabilities and Shareholders' Equity |
$ 5,106.9 |
$ 6,013.8 |
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(unaudited, in millions) |
||||||
Successor |
Predecessor |
|||||
Six Months |
Period from |
Period from |
||||
Cash Flows From Operating Activities: |
||||||
Net loss |
$ (997.1) |
$ (63.7) |
$ (313.1) |
|||
Adjustments to reconcile net cash from operating activities: |
||||||
Depreciation and amortization |
286.2 |
48.4 |
321.8 |
|||
Share-based compensation |
5.3 |
— |
1.7 |
|||
Deferred income taxes |
475.5 |
(6.4) |
(473.0) |
|||
Reorganization items, net |
— |
— |
425.4 |
|||
Non-cash accretion expense |
138.6 |
7.7 |
— |
|||
Other non-cash items |
16.8 |
(6.1) |
35.3 |
|||
Changes in assets and liabilities: |
||||||
Accounts receivable, net |
14.4 |
17.0 |
49.8 |
|||
Inventories |
75.7 |
24.6 |
(33.2) |
|||
Accounts payable |
(24.5) |
(11.7) |
(3.6) |
|||
Income taxes |
159.4 |
(4.1) |
(26.9) |
|||
Payments of claims |
— |
— |
(629.0) |
|||
Other |
(29.3) |
(21.2) |
2.5 |
|||
Net cash from operating activities |
121.0 |
(15.5) |
(642.3) |
|||
Cash Flows From Investing Activities: |
||||||
Capital expenditures |
(26.3) |
(3.7) |
(33.4) |
|||
Proceeds from divestitures, net of cash |
— |
65.0 |
— |
|||
Other |
0.7 |
— |
0.4 |
|||
Net cash from investing activities |
(25.6) |
61.3 |
(33.0) |
|||
Cash Flows From Financing Activities: |
||||||
Issuance of external debt |
— |
— |
650.0 |
|||
Repayment of external debt |
(22.0) |
(1.7) |
(904.6) |
|||
Debt financing costs |
— |
— |
(24.1) |
|||
Repurchase of shares |
(0.1) |
— |
— |
|||
Net cash from financing activities |
(22.1) |
(1.7) |
(278.7) |
|||
Effect of currency rate changes on cash |
(1.1) |
(0.2) |
(3.9) |
|||
Net change in cash, cash equivalents and restricted cash |
72.2 |
43.9 |
(957.9) |
|||
Cash, cash equivalents and restricted cash at beginning of period |
466.7 |
447.3 |
1,405.2 |
|||
Cash, cash equivalents and restricted cash at end of period |
$ 538.9 |
$ 491.2 |
$ 447.3 |
|||
Cash and cash equivalents at end of period |
$ 480.6 |
$ 354.7 |
$ 297.9 |
|||
Restricted cash included in prepaid expenses and other current assets at end of period |
22.7 |
100.1 |
113.0 |
|||
Restricted cash included in other long-term assets at end of period |
35.6 |
36.4 |
36.4 |
|||
Cash, cash equivalents and restricted cash at end of period |
$ 538.9 |
$ 491.2 |
$ 447.3 |
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