Total company net sales were
GAAP net income from continuing operations for the first quarter of fiscal 2016 was
Adjusted net income for the first quarter of fiscal 2016 was
During the quarter, the company repurchased 3.9 million shares under its share repurchase program. The diluted share count for the first quarter of fiscal 2016 reflects these purchases plus 0.8 million shares purchased under the program in the fourth quarter of fiscal 2015.
"The first quarter of fiscal 2016 was a strong one for
"We continue to advance the Acquire to Invest growth strategy highlighted at our December Investor Briefing," Trudeau continued. "Our increased R&D investment in the quarter resulted in initiation of three company-sponsored clinical trials and significant additional data generation activities for our Specialty Brands, particularly Acthar. Finally, we are very pleased with the acquisition of three commercial-stage hemostasis products, which adds depth and breadth to our hospital portfolio."
GAAP gross profit was
GAAP SG&A expenses for the first quarter of fiscal 2016 were
Income tax benefit in the first quarter was
Liquidity
In the fiscal first quarter,
BUSINESS SEGMENT RESULTS
Specialty Brands Segment
The segment benefitted from strong commercial execution throughout the first quarter of 2016 with net sales increasing
Specialty Generics Segment
Net sales for the first quarter fiscal 2016 decreased
Nuclear Imaging Segment
The company completed the sale of its CMDS business to
Net sales for the first quarter fiscal 2016 for the Nuclear Imaging segment were
GUIDANCE UPDATE
Management is raising its fiscal 2016 guidance for adjusted diluted earnings per share from the previous
CONFERENCE CALL AND WEBCAST
ABOUT
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, operational growth, adjusted effective tax rate, pro forma first quarter fiscal 2015 INOMAX net sales, pro forma first quarter fiscal 2015 Therakos net sales, and free cash flow, which are considered "non-GAAP" financial measures under applicable
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), adjusted for certain items (on a pre-tax basis for adjusted gross profit and adjusted SG&A and on an after-tax basis for adjusted net income) that management believes are not reflective of the operational performance of the business. Adjustments to GAAP amounts include, as applicable to each measure, restructuring and related charges, net; amortization and impairment charges; discontinued operations; acquisition-related expenses; significant legal and environmental charges; 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
Operational growth 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 first quarter fiscal 2015 INOMAX net sales represent
Free cash flow represents net cash provided by operating activities of
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
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.
Guidance on the company's fiscal year 2016 diluted earnings per share has been provided only on a non-GAAP basis. This is due to the inherent difficulty of forecasting the timing or amount of items that would be included in the most directly comparable forward-looking GAAP financial measure. Because reconciliation is not available without unreasonable effort, it is not included in 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
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
These and other factors are identified and described in more detail in the "Risk Factors" section of
CONTACTS
Investor Relations
Senior Vice President, Investor Strategy and IRO
314-654-6649
cole.lannum@mallinckrodt.com
Media
Senior Communications Manager
314-654-8618
rhonda.sciarra@mallinckrodt.com
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 |
|||||||||||
December 25, |
Percent of Net sales |
December 26, |
Percent of Net sales |
||||||||
Net sales |
$ |
914.8 |
100.0 |
% |
$ |
768.2 |
100.0 |
% |
|||
Cost of sales |
423.1 |
46.3 |
363.4 |
47.3 |
|||||||
Gross profit |
491.7 |
53.7 |
404.8 |
52.7 |
|||||||
Selling, general and administrative expenses |
242.5 |
26.5 |
224.1 |
29.2 |
|||||||
Research and development expenses |
63.6 |
7.0 |
52.7 |
6.9 |
|||||||
Restructuring charges, net |
6.3 |
0.7 |
7.2 |
0.9 |
|||||||
Gains on divestiture and license |
(0.1) |
— |
(0.8) |
(0.1) |
|||||||
Operating income |
179.4 |
19.6 |
121.6 |
15.8 |
|||||||
Interest expense |
(97.8) |
(10.7) |
(48.8) |
(6.4) |
|||||||
Interest income |
0.2 |
— |
0.1 |
— |
|||||||
Other income, net |
2.0 |
0.2 |
4.2 |
0.5 |
|||||||
Income from continuing operations before income taxes |
83.8 |
9.2 |
77.1 |
10.0 |
|||||||
Income tax benefit |
(32.1) |
(3.5) |
(10.3) |
(1.3) |
|||||||
Income from continuing operations |
115.9 |
12.7 |
87.4 |
11.4 |
|||||||
Income from discontinued operations, net of income taxes |
95.2 |
10.4 |
5.3 |
0.7 |
|||||||
Net income |
$ |
211.1 |
23.1 |
% |
$ |
92.7 |
12.1 |
% |
|||
Basic earnings per share: |
|||||||||||
Income from continuing operations |
$ |
1.00 |
$ |
0.75 |
|||||||
Income from discontinued operations |
0.82 |
0.05 |
|||||||||
Net income |
1.83 |
0.80 |
|||||||||
Diluted earnings per share: |
|||||||||||
Income from continuing operations |
$ |
1.00 |
$ |
0.74 |
|||||||
Income from discontinued operations |
0.82 |
0.05 |
|||||||||
Net income |
1.82 |
0.79 |
|||||||||
Weighted-average number of shares outstanding: |
|||||||||||
Basic |
115.4 |
114.8 |
|||||||||
Diluted |
116.3 |
116.3 |
|||||||||
MALLINCKRODT PLC |
|||||||||||||||||||||||||||
NON-GAAP MEASURES |
|||||||||||||||||||||||||||
(unaudited, in millions except per share data) |
|||||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||||
December 25, 2015 |
December 26, 2014 |
||||||||||||||||||||||||||
Gross profit |
Selling, general and administrative expenses |
Net income |
Diluted net income per share |
Gross profit |
Selling, general and administrative expenses |
Net income |
Diluted |
||||||||||||||||||||
GAAP |
$ |
491.7 |
$ |
242.5 |
$ |
211.1 |
$ |
1.82 |
$ |
404.8 |
$ |
224.1 |
$ |
92.7 |
$ |
0.79 |
|||||||||||
Adjustments: |
|||||||||||||||||||||||||||
Intangible asset amortization |
171.6 |
(1.8) |
173.4 |
1.49 |
123.5 |
(1.3) |
124.8 |
1.07 |
|||||||||||||||||||
Restructuring and related charges, net (1) |
— |
— |
6.4 |
0.06 |
— |
— |
7.3 |
0.06 |
|||||||||||||||||||
Inventory step-up expense |
16.2 |
— |
16.2 |
0.14 |
30.8 |
— |
30.8 |
0.26 |
|||||||||||||||||||
Incremental equity conversion costs |
— |
— |
— |
— |
— |
(23.8) |
23.8 |
0.20 |
|||||||||||||||||||
Income from discontinued operations |
— |
— |
(95.2) |
(0.82) |
— |
— |
(5.3) |
(0.05) |
|||||||||||||||||||
Acquisition related expenses |
— |
(1.1) |
1.1 |
0.01 |
— |
— |
— |
— |
|||||||||||||||||||
Significant legal and environmental changes |
— |
(11.5) |
11.5 |
0.10 |
— |
— |
— |
— |
|||||||||||||||||||
Income taxes (2) |
— |
— |
(81.8) |
(0.70) |
— |
— |
(63.1) |
(0.54) |
|||||||||||||||||||
Dilutive share impact (3) |
— |
— |
— |
— |
— |
— |
(2.3) |
(0.02) |
|||||||||||||||||||
As adjusted |
$ |
679.5 |
$ |
228.1 |
$ |
242.7 |
$ |
2.09 |
$ |
559.1 |
$ |
199.0 |
$ |
208.7 |
$ |
1.79 |
|||||||||||
Percent of net sales |
74.3 |
% |
24.9 |
% |
26.5 |
% |
72.8 |
% |
25.9 |
% |
27.2 |
% |
|||||||||||||||
(1) |
Includes pre-tax accelerated depreciation. |
(2) |
Includes tax effect of above adjustments and recurrant cash tax payments to the IRS associated with internal installment sale transactions. |
(3) |
For the three months ended December 26, 2014, 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 December 26, 2014. 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 116.3 million for the three months ended December 26, 2014. Due to 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 December 25, 2015. |
MALLINCKRODT PLC |
||||||||||||||||
SEGMENT NET SALES AND OPERATIONAL GROWTH |
||||||||||||||||
(unaudited, in millions) |
||||||||||||||||
Three Months Ended |
||||||||||||||||
December 25, |
December 26, |
Percent change |
Currency |
Operational |
||||||||||||
Specialty Brands |
$ |
543.2 |
$ |
373.6 |
45.4 |
% |
(0.3) |
% |
45.7 |
% |
||||||
Specialty Generics |
257.6 |
284.2 |
(9.4) |
(1.2) |
(8.2) |
|||||||||||
Nuclear Imaging |
103.6 |
101.9 |
1.7 |
(4.4) |
6.1 |
|||||||||||
904.4 |
759.7 |
19.0 |
(1.2) |
20.2 |
||||||||||||
Other(1) |
10.4 |
8.5 |
22.4 |
— |
22.4 |
|||||||||||
Net sales |
$ |
914.8 |
$ |
768.2 |
19.1 |
% |
(1.2)% |
20.3 |
% |
|||||||
(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 |
|||||||||||
December 25, |
December 26, |
Percent change |
|||||||||
Specialty Brands |
|||||||||||
Acthar |
$ |
286.7 |
$ |
266.4 |
7.6 |
% |
|||||
Inomax |
110.8 |
— |
— |
||||||||
Ofirmev |
66.9 |
71.4 |
(6.3) |
||||||||
Therakos immunotherapy |
50.4 |
— |
— |
||||||||
Other |
28.4 |
35.8 |
(20.7) |
||||||||
Specialty Brands Total |
$ |
543.2 |
$ |
373.6 |
45.4 |
% |
|||||
Specialty Generics |
|||||||||||
Hydrocodone (API) and hydrocodone-containing tablets |
$ |
36.7 |
$ |
34.0 |
7.9 |
% |
|||||
Oxycodone (API) and oxycodone-containing tablets |
28.9 |
47.0 |
(38.5) |
||||||||
Methylphenidate ER |
31.2 |
48.6 |
(35.8) |
||||||||
Other controlled substances |
109.7 |
111.9 |
(2.0) |
||||||||
Other |
51.1 |
42.7 |
19.7 |
||||||||
Specialty Generics Total |
$ |
257.6 |
$ |
284.2 |
(9.4) |
% |
|||||
Nuclear Imaging Total |
$ |
103.6 |
$ |
101.9 |
1.7 |
% |
MALLINCKRODT PLC |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(unaudited, in millions) |
|||||||
December 25, |
September 25, |
||||||
Assets |
|||||||
Current Assets: |
|||||||
Cash and cash equivalents |
$ |
521.9 |
$ |
365.9 |
|||
Accounts receivable, net |
485.9 |
548.5 |
|||||
Inventories |
284.9 |
281.8 |
|||||
Deferred income taxes |
116.3 |
142.7 |
|||||
Prepaid expenses and other current assets |
215.6 |
207.3 |
|||||
Current assets held for sale |
0.8 |
299.9 |
|||||
Total current assets |
1,625.4 |
1,846.1 |
|||||
Property, plant and equipment, net |
993.0 |
991.3 |
|||||
Goodwill |
3,645.2 |
3,649.4 |
|||||
Intangible assets, net |
9,491.7 |
9,666.3 |
|||||
Other assets |
284.0 |
251.0 |
|||||
Total Assets |
$ |
16,039.3 |
$ |
16,404.1 |
|||
Liabilities and Shareholders' Equity |
|||||||
Current Liabilities: |
|||||||
Current maturities of long-term debt |
$ |
21.9 |
$ |
22.3 |
|||
Accounts payable |
118.2 |
133.0 |
|||||
Accrued payroll and payroll-related costs |
79.6 |
103.7 |
|||||
Accrued interest |
72.7 |
80.2 |
|||||
Accrued and other current liabilities |
592.5 |
517.4 |
|||||
Current liabilities held for sale |
3.4 |
72.8 |
|||||
Total current liabilities |
888.3 |
929.4 |
|||||
Long-term debt |
6,409.6 |
6,474.3 |
|||||
Pension and postretirement benefits |
114.9 |
116.7 |
|||||
Environmental liabilities |
72.0 |
73.3 |
|||||
Deferred income taxes |
2,999.0 |
3,132.4 |
|||||
Other income tax liabilities |
109.8 |
121.3 |
|||||
Other liabilities |
253.1 |
245.5 |
|||||
Total Liabilities |
10,846.7 |
11,092.9 |
|||||
Shareholders' Equity: |
|||||||
Preferred shares |
— |
— |
|||||
Ordinary shares |
23.5 |
23.5 |
|||||
Ordinary shares held in treasury at cost |
(385.1) |
(109.7) |
|||||
Additional paid-in capital |
5,369.5 |
5,357.6 |
|||||
Retained earnings |
250.0 |
38.9 |
|||||
Accumulated other comprehensive income |
(65.3) |
0.9 |
|||||
Total Shareholders' Equity |
5,192.6 |
5,311.2 |
|||||
Total Liabilities and Shareholders' Equity |
$ |
16,039.3 |
$ |
16,404.1 |
MALLINCKRODT PLC |
|||||||
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS |
|||||||
(unaudited, in millions) |
|||||||
Three Months Ended |
|||||||
December 25, |
December 26, |
||||||
Cash Flows From Operating Activities: |
|||||||
Net income |
$ |
211.1 |
$ |
92.7 |
|||
Adjustments to reconcile net cash provided by operating activities: |
|||||||
Depreciation and amortization |
206.0 |
150.6 |
|||||
Share-based compensation |
8.5 |
35.4 |
|||||
Deferred income taxes |
(108.9) |
(69.7) |
|||||
Gain on disposal of discontinued operations |
(97.0) |
— |
|||||
Other non-cash items |
4.1 |
(10.9) |
|||||
Changes in assets and liabilities, net of the effects of acquisitions: |
|||||||
Accounts receivable, net |
68.4 |
28.1 |
|||||
Inventories |
(14.5) |
22.6 |
|||||
Accounts payable |
(13.0) |
(5.9) |
|||||
Income taxes |
82.3 |
71.0 |
|||||
Other |
(35.6) |
(97.1) |
|||||
Net cash provided by operating activities |
311.4 |
216.8 |
|||||
Cash Flows Used In Investing Activities: |
|||||||
Capital expenditures |
(49.0) |
(22.3) |
|||||
Proceeds from disposal of discontinued operations, net of cash |
264.0 |
— |
|||||
Restricted cash |
(0.1) |
0.4 |
|||||
Other |
0.7 |
1.0 |
|||||
Net cash provided by (used in) investing activities |
215.6 |
(20.9) |
|||||
Cash Flows From Financing Activities: |
|||||||
Issuance of external debt |
62.0 |
— |
|||||
Repayment of external debt and capital leases |
(129.6) |
(7.8) |
|||||
Debt issuance costs |
(0.1) |
— |
|||||
Excess tax benefit from share-based compensation |
— |
8.9 |
|||||
Proceeds from exercise of share options |
3.6 |
8.7 |
|||||
Repurchase of shares |
(275.4) |
(10.6) |
|||||
Other |
(30.0) |
— |
|||||
Net cash used in financing activities |
(369.5) |
(0.8) |
|||||
Effect of currency rate changes on cash |
(1.5) |
(3.9) |
|||||
Net increase in cash and cash equivalents |
156.0 |
191.2 |
|||||
Cash and cash equivalents at beginning of period |
365.9 |
707.8 |
|||||
Cash and cash equivalents at end of period |
$ |
521.9 |
$ |
899.0 |
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