DUBLIN, Aug. 4, 2020 /PRNewswire/ --
- Second quarter net sales of $166.5
million net of the retrospective one-time Acthar®
Gel Medicaid liability; adjusted net sales of $700.9 million, a decline of 14.9%, due primarily
to demand impacts related to COVID-19 and competitive and payer
pressures on certain products
- Diluted loss per share of $11.04
with adjusted diluted earnings per share (EPS) of $1.89, a decline of 25.3%
- Operating cash flows of $170.9
million in the quarter with free cash flow of $159.5 million
- Key pipeline advancements include:
-
- A positive vote by the U.S. Food and Drug Administration (FDA)
advisory committee for terlipressin
- Completion of a rolling submission of a Biologics License
Application (BLA) to the FDA for StrataGraft®
regenerative skin tissue
- Company continues to work to resolve outstanding issues related
to opioids, Acthar Gel, and other risks, as well as address overall
debt levels, and is considering with its external advisors all
options to address legal and financial challenges. While no final
determination has been made, it is possible that Mallinckrodt plc and most of its subsidiaries could
file for Chapter 11 reorganization in the near term
Mallinckrodt plc (NYSE: MNK), a
global biopharmaceutical company, today reported results for the
three- and six-months ended June 26, 2020. Unless otherwise
noted, the quarter comparisons are to the prior year comparable
three- and six-months ended June 28, 2019.
Net sales were $166.5 million in
the second quarter and adjusted net sales, following the adjustment
for the retrospective one-time Acthar® Gel
(repository corticotropin injection) Medicaid rebate liability,
were $700.9 million, with diluted
loss per share of $11.04 compared to
diluted earnings per share of $0.08,
following the $639.7 million impact
from the retrospective Acthar Gel Medicaid rebate liability and a
$63.5 million non-restructuring
impairment of the OFIRMEV® (acetaminophen)
injection intangible asset. Adjusted diluted EPS were $1.89 versus $2.53,
a decrease of 25.3%, on lower net sales in second quarter 2020,
partially offset by non-operational favorability from adjusted
income tax expense and interest expense.
"Our reported GAAP net sales were impacted by the retrospective
one-time Acthar Gel Medicaid liability, and our normalized
operating results also displayed a contraction this quarter due to
the COVID-19 health crisis along with increased competitive and
payer pressures on certain products. Amidst these challenges, we
continued to operate well, which is a testament to our employees'
hard work and commitment to our business, patients and customers,"
said Mark Trudeau, President and
Chief Executive Officer of Mallinckrodt. "We also continue to
execute on our strategic priorities – making important progress in
advancing our pipeline, including a positive outcome of the recent
advisory committee meeting on terlipressin and completion of a
rolling submission of a Biologics License Application (BLA) to the
FDA for StrataGraft® regenerative skin tissue."
Trudeau continued, "Looking ahead, we expect our current
challenges to continue in the back half of the year. We remain
committed to ensuring patients have uninterrupted access to our
medicines throughout the COVID-19 health crisis. We continue to be
highly focused in the near term on addressing all legal and
financial challenges impacting the business."
COMPANY FINANCIAL RESULTS
Second Quarter 2020 Results
Gross loss was
$220.2 million as compared to gross
profit of $388.9 million, driven in
part by the retrospective one-time Acthar Gel Medicaid liability
coupled with declines in overall net sales. Adjusted gross profit
was $505.0 million, compared with
$603.9 million, due primarily to the
decline in net sales. Adjusted gross profit as a percentage of
adjusted net sales was 72.1%, compared with 73.4%, due primarily to
changes in product mix.
Selling, general and administrative (SG&A) expenses were
$231.3 million or 138.9% of net
sales, as compared to $225.9 million,
or 27.4%, primarily impacted by legal expenses and separation
costs. Adjusted SG&A expenses were $197.5 million or 28.2% of adjusted net sales,
compared with $208.6 million or
25.3%. The decline in adjusted SG&A expense reflects the
Company's ongoing efforts to reduce SG&A, while the percentage
of net sales and adjusted net sales were impacted by lower net
sales in the second quarter 2020.
Research and development expenses were $82.9 million, or 49.8% of net sales, as compared
to $79.6 million, or 9.7%. Research
and development as a percentage of adjusted net sales was 11.8%
versus 9.7%.
Interest expense was $64.2 million
as compared to $71.5 million, a
reduction of 10.2%, driven by lower aggregate debt in 2020, a
reduction in floating interest costs, and the reversal of deferred
interest associated with the interest-bearing deferred tax
obligations.
Income tax expense was $161.3
million, for an effective tax rate of negative 20.4%. The
adjusted effective tax rate was 4.6% in the second quarter.
Six-Month Fiscal 2020 Results
Net sales were
$832.3 million and adjusted net sales
were $1,366.7 million, down 15.3%
compared with $1,613.9 million. The
adjusted net sales decrease is primarily attributed to the
retrospective one-time Acthar Gel Medicaid liability, increased
competition on certain products and the impact of the COVID-19
pandemic.
Net loss was $983.3 million,
compared to net income of $161.7
million. Diluted loss per share was $11.66, compared to diluted earnings per share of
$1.92, with adjusted diluted earnings
per share of $3.53 versus
$4.48.
BUSINESS SEGMENT RESULTS
Specialty Brands Segment
Net sales for the segment in
the second quarter 2020 were $522.8
million.
- Acthar Gel net sales were $213.7
million, a 19.8% decrease, primarily driven by continued
reimbursement challenges impacting new and returning patients;
continued reduction in new patients as a result of COVID-19
pandemic, which is anticipated to impact results in the second half
of the year; continued payer scrutiny on overall specialty
pharmaceutical spending; and, to a partial extent, the change in
the Medicaid rebate calculation.
- INOMAX® (nitric oxide) gas, for inhalation, net
sales were $154.9 million, an
increase of 10.9%, or 11.0% on a constant-currency basis, driven by
an overall increased consumption of nitric oxide by the Company's
customers, including strong utilization within COVID-19 patients.
The INOmax Total Care service offering remains a differentiating
feature among competition.
- OFIRMEV® net sales were $52.4
million, a decrease of 42.1%, impacted by the overall
reduction in elective surgeries due to public health orders and
institutions being focused on responding to the COVID-19
pandemic.
- Therakos® immunology platform net sales were
$47.8 million, a decrease of 21.5%,
or 20.7% on a constant-currency basis, driven largely by COVID-19
stay-at-home directives impacting patients' abilities to receive
treatment in hospitals or apheresis centers.
- AMITIZA® (lubiprostone) net sales were $49.4 million, down 5.0% due to continued impact
of competition in the U.S. and the biennial price reduction in
Japan.
Specialty Generics Segment
Net sales for the segment in the second quarter were $178.1 million, as expected, with slight
sequential increase from the first quarter 2020.
LIQUIDITY
Cash provided by operating activities in the second quarter was
$170.9 million, with free cash flow
of $159.5 million. For the
six-month period, operating cash flows were $224.6 million, with free cash flows of
$193.3 million.
The cash balance at the end of the second quarter was
$818.3 million, and the revolving
credit facility was fully drawn. Total principal debt outstanding
at the end of the second quarter was $5.293
billion, with net debt of $4.475
billion.
BUSINESS AND LITIGATION UPDATE
The Company has identified several negative conditions and events
impacting the business as of June 26,
2020. Due to pressures from the Acthar Gel Medicaid matter,
the ongoing opioid litigation and the Company's existing debts and
the related risk of non-compliance with its financial debt covenant
over the next twelve months, the Company has been working with
external advisors to explore a range of options and engage in
dialogue with financial creditors and litigation claimants and
their advisors, including the possibility of a filing for
reorganization in bankruptcy under Chapter 11 by Mallinckrodt plc and most of its subsidiaries in
the near-term. However, these plans have not yet been
finalized nor are they fully within the Company's control.
Further disclosure regarding this matter will be included within
the Form 10-Q expected to be filed later today.
CONFERENCE CALL AND WEBCAST
Mallinckrodt will hold a conference
call on Tuesday, Aug. 4, 2020,
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/events-calendar/.
- 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
5970869. Dial-in 15 minutes in advance of the call is encouraged to
avoid connection delays.
- Through an audio replay: A replay of the call will be available
beginning at 11:30 a.m. Eastern Time on
Tuesday, Aug. 4, 2020, and ending at 11:30 a.m. Eastern Time on Tuesday, Aug. 18,
2020. 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 of (404) 537-3406. All callers will
be required to provide the Conference ID of 5970869.
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, nephrology,
pulmonology and ophthalmology; immunotherapy and neonatal
respiratory critical care therapies; analgesics 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 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 net
sales, adjusted gross profit, adjusted SG&A, net sales growth
on a constant-currency basis, adjusted effective tax rate, net debt
and free cash flow, which are considered "non-GAAP" financial
measures under applicable SEC rules and regulations.
Adjusted net income, adjusted net sales, 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 net sales, 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, amortization; restructuring and related charges, net;
inventory step-up expense; discontinued operations; changes in fair
value of contingent consideration obligations; significant legal
and environmental charges (inclusive of the CMS retrospective
liability); losses on divestiture; unrealized gain on equity
investment; gains on debt extinguishment, net; separation costs;
tax effects of aforementioned adjustments, changes in uncertain tax
positions, tax impacts related to substantial doubt about the
Company's ability to continue as a going concern, legislative
changes and tax impacts from certain transactions, such as
acquisitions or reorganizations; 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 loss, divided by loss from continuing and
income from 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
adjustment included in the reconciliation of adjusted net income
primarily represents the tax impact of adjustments between net loss
and adjusted net income, changes in uncertain tax positions, tax
impacts related to the substantial doubt about the Company's
ability to continue as a going concern, tax impacts of legislative
changes and tax impacts from certain transactions, such as
acquisitions or reorganizations.
Segment net sales growth 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.
Free cash flow for the second quarter represents net cash
provided by operating activities of $170.9
million less capital expenditures of $11.4 million, each as prepared in accordance
with GAAP.
Free cash flow for the year to date represents net cash provided
by operating activities of $224.6
million less capital expenditures of $31.3 million, each as prepared in accordance
with GAAP
Net debt as of June 26, 2020 represents the total principal
debt outstanding of $5.293 billion
less cash of $818.3 million, each as
prepared in accordance with GAAP.
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.
Further information regarding non-GAAP financial measures can be
found on the Investor Relations page of the company's website.
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, legal, economic, business, competitive and/or
regulatory factors affecting Mallinckrodt's businesses, and any other statements
regarding events or developments the company 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
dispute between Mallinckrodt, HHS and
CMS, including the lawsuit filed by Mallinckrodt and any related appeals, as well as
the time and expense of litigating this dispute; the impact of this
dispute on Mallinckrodt's expectations
for performance, as well as the financial impact of the
retrospective one-time Acthar Gel Medicaid liability on
Mallinckrodt or any other related
impacts; the impact of the outbreak of the COVID-19 coronavirus;
the possibility that Mallinckrodt plc
and/or certain of its subsidiaries will file for Chapter 11 and the
potential effects of such a filing and resulting bankruptcy process
on Mallinckrodt's liquidity, results of
operations and business; governmental investigations and inquiries,
regulatory actions and lawsuits brought against Mallinckrodt by government agencies and private
parties with respect to its historical commercialization of
opioids, including the non-binding agreement in principle regarding
terms and conditions of a global settlement to resolve all current
and future opioid-related claims; scrutiny from governments,
legislative bodies and enforcement agencies related to sales,
marketing and pricing practices; pricing pressure on certain of
Mallinckrodt's products due to legal
changes or changes in insurers' reimbursement practices resulting
from recent increased public scrutiny of healthcare and
pharmaceutical costs; the reimbursement practices of governmental
health administration authorities, private health coverage insurers
and other third-party payers; complex reporting and payment
obligations under the Medicare and Medicaid rebate programs and
other governmental purchasing and rebate programs; cost containment
efforts of customers, purchasing groups, third-party payers and
governmental organizations; changes in or failure to comply with
relevant laws and regulations; Mallinckrodt's and its partners' ability to
successfully develop or commercialize new products or expand
commercial opportunities; Mallinckrodt's ability to navigate price
fluctuations; competition; Mallinckrodt's and its partners' ability to protect
intellectual property rights; limited clinical trial data for
Acthar Gel; clinical studies and related regulatory processes;
product liability losses and other litigation liability; material
health, safety and environmental liabilities; potential
indemnification liabilities to Covidien pursuant to the separation
and distribution agreement; business development activities;
retention of key personnel; the effectiveness of information
technology infrastructure including cybersecurity and data leakage
risks; customer concentration; Mallinckrodt's reliance on certain individual
products that are material to its financial performance;
Mallinckrodt's ability to receive
procurement and production quotas granted by the U.S. Drug
Enforcement Administration; complex manufacturing processes;
conducting business internationally; Mallinckrodt's ability to achieve expected benefits
from restructuring activities; Mallinckrodt's significant levels of intangible
assets and related impairment testing; labor and employment laws
and regulations; natural disasters or other catastrophic events;
Mallinckrodt's substantial indebtedness
and its ability to generate sufficient cash to reduce its
indebtedness; future changes to U.S. and foreign tax
laws or the impact of disputes with governmental tax authorities;
and the impact of Irish laws.
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 December 27, 2019
and Form 10-Q for the fiscal quarter ended March 27, 2020. 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
Daniel J. Speciale
Vice President, Finance and Investor Relations Officer
314-654-3638
daniel.speciale@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. © 2020 08/20.
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited, in
millions, except per share data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
June
26, 2020
|
Percent
of Net sales
|
|
June
28, 2019
|
Percent
of Net sales
|
Net sales (includes a
retrospective one-time charge of $534.4 million related to the
Medicaid lawsuit for the three months ended June 26,
2020)
|
$
|
166.5
|
|
100.0
|
%
|
|
$
|
823.3
|
|
100.0
|
%
|
Cost of
sales
|
386.7
|
|
232.3
|
|
|
434.4
|
|
52.8
|
|
Gross (loss)
profit
|
(220.2)
|
|
(132.3)
|
|
|
388.9
|
|
47.2
|
|
Selling, general and
administrative expenses
|
231.3
|
|
138.9
|
|
|
225.9
|
|
27.4
|
|
Research and
development expenses
|
82.9
|
|
49.8
|
|
|
79.6
|
|
9.7
|
|
Restructuring
charges, net
|
14.4
|
|
8.6
|
|
|
(0.2)
|
|
—
|
|
Non-restructuring
impairment charges
|
63.5
|
|
38.1
|
|
|
113.5
|
|
13.8
|
|
Gains on
divestiture
|
(0.6)
|
|
(0.4)
|
|
|
—
|
|
—
|
|
Opioid-related
litigation settlement
|
8.5
|
|
5.1
|
|
|
—
|
|
—
|
|
Medicaid
lawsuit
|
105.3
|
|
63.2
|
|
|
—
|
|
—
|
|
Operating
loss
|
(725.5)
|
|
(435.7)
|
|
|
(29.9)
|
|
(3.6)
|
|
Interest
expense
|
(64.2)
|
|
(38.6)
|
|
|
(71.5)
|
|
(8.7)
|
|
Interest
income
|
1.0
|
|
0.6
|
|
|
2.2
|
|
0.3
|
|
Other (expense)
income, net
|
(0.6)
|
|
(0.4)
|
|
|
74.4
|
|
9.0
|
|
Loss from continuing
operations before income taxes
|
(789.3)
|
|
(474.1)
|
|
|
(24.8)
|
|
(3.0)
|
|
Income tax expense
(benefit)
|
161.3
|
|
96.9
|
|
|
(24.3)
|
|
(3.0)
|
|
Loss from continuing
operations
|
(950.6)
|
|
(570.9)
|
|
|
(0.5)
|
|
(0.1)
|
|
Income from
discontinued operations, net of income taxes
|
17.5
|
|
10.5
|
|
|
7.3
|
|
0.9
|
|
Net (loss)
income
|
$
|
(933.1)
|
|
(560.4)
|
%
|
|
$
|
6.8
|
|
0.8
|
%
|
|
|
|
|
|
|
Basic (loss)
earnings per share:
|
|
|
|
|
|
Loss from continuing
operations
|
$
|
(11.25)
|
|
|
|
$
|
(0.01)
|
|
|
Income from
discontinued operations
|
0.21
|
|
|
|
0.09
|
|
|
Net (loss)
income
|
$
|
(11.04)
|
|
|
|
$
|
0.08
|
|
|
Diluted (loss)
earnings per share:
|
|
|
|
|
|
Loss from continuing
operations
|
$
|
(11.25)
|
|
|
|
$
|
(0.01)
|
|
|
Income from
discontinued operations
|
0.21
|
|
|
|
0.09
|
|
|
Net (loss)
income
|
$
|
(11.04)
|
|
|
|
$
|
0.08
|
|
|
Weighted-average
number of shares outstanding
|
|
|
|
|
|
Basic weighted-average
shares outstanding
|
84.5
|
|
|
|
83.8
|
|
|
Diluted
weighted-average shares outstanding
|
84.5
|
|
|
|
83.8
|
|
|
MALLINCKRODT
PLC
|
NON-GAAP
MEASURES
|
(unaudited, in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
June 26,
2020
|
|
June 28,
2019
|
|
Net
sales
|
Gross
(loss)
profit
|
SG&A
|
Net
(loss)
income
|
|
Diluted net
(loss)
income per
share (1)
|
|
Net
sales
|
Gross
profit
|
SG&A
|
Net
income
|
|
Diluted net
income
per
share (1)
|
GAAP
|
$
|
166.5
|
|
$
|
(220.2)
|
|
$
|
231.3
|
|
$
|
(933.1)
|
|
|
$
|
(11.04)
|
|
|
$
|
823.3
|
|
$
|
388.9
|
|
$
|
225.9
|
|
$
|
6.8
|
|
|
$
|
0.08
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
190.8
|
|
(0.8)
|
|
191.6
|
|
|
2.26
|
|
|
—
|
|
215.0
|
|
(1.6)
|
|
216.6
|
|
|
2.58
|
|
Restructuring and
related charges, net
|
—
|
|
—
|
|
—
|
|
14.4
|
|
|
0.17
|
|
|
—
|
|
—
|
|
—
|
|
(0.2)
|
|
|
—
|
|
Non-restructuring
impairment charge
|
—
|
|
—
|
|
—
|
|
63.5
|
|
|
0.75
|
|
|
—
|
|
—
|
|
—
|
|
113.5
|
|
|
1.35
|
|
Income from
discontinued operations
|
—
|
|
—
|
|
—
|
|
(17.5)
|
|
|
(0.21)
|
|
|
—
|
|
—
|
|
—
|
|
(7.3)
|
|
|
(0.09)
|
|
Change in contingent
consideration fair value
|
—
|
|
—
|
|
4.9
|
|
(4.9)
|
|
|
(0.06)
|
|
|
—
|
|
—
|
|
3.2
|
|
(3.2)
|
|
|
(0.04)
|
|
Significant legal and
environmental charges (2)
|
534.4
|
|
534.4
|
|
(17.2)
|
|
665.4
|
|
|
7.86
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Divestitures
|
—
|
|
—
|
|
—
|
|
(0.6)
|
|
|
(0.01)
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Separation
costs
|
—
|
|
—
|
|
(20.7)
|
|
20.7
|
|
|
0.24
|
|
|
—
|
|
—
|
|
(18.9)
|
|
18.9
|
|
|
0.22
|
|
Gains on debt
extinguishment, net
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(62.3)
|
|
|
(0.74)
|
|
Unrealized loss on
equity investment
|
—
|
|
—
|
|
—
|
|
2.4
|
|
|
0.03
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
R&D upfront
payment (3)
|
—
|
|
—
|
|
—
|
|
5.0
|
|
|
0.06
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Legal entity and
intercompany financing reorganization
|
—
|
|
—
|
|
—
|
|
(6.3)
|
|
|
(0.07)
|
|
|
—
|
|
—
|
|
—
|
|
3.0
|
|
|
0.04
|
|
Income taxes
(4)
|
—
|
|
—
|
|
—
|
|
159.9
|
|
|
1.89
|
|
|
—
|
|
—
|
|
—
|
|
(72.8)
|
|
|
(0.87)
|
|
As
adjusted
|
$
|
700.9
|
|
$
|
505.0
|
|
$
|
197.5
|
|
$
|
160.5
|
|
|
$
|
1.89
|
|
|
$
|
823.3
|
|
$
|
603.9
|
|
$
|
208.6
|
|
$
|
213.0
|
|
|
$
|
2.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of adjusted
net sales
|
100.0
|
%
|
72.1
|
%
|
28.2
|
%
|
22.9
|
%
|
|
|
|
100.0
|
%
|
73.4
|
%
|
25.3
|
%
|
25.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In periods where the
Company reports a net loss from continuing operations, potential
ordinary shares outstanding are excluded from the calculation of
diluted earnings per share, prepared in accordance with GAAP, as
they would be anti-dilutive. These potentially dilutive shares are
included in the calculation of adjusted diluted earnings per share
when dilutive. As a result, the adjusted diluted earnings per share
utilized a weighted average share count of 84.7 shares and 84.1
shares for the three months ended June 26, 2020 and June 28,
2019, respectively.
|
|
|
(2)
|
Effective June 15,
2020, the Company was forced under protest to change the base date
average manufacturer price ("AMP") for Acthar Gel, as directed by
CMS. While the Company continues to pursue its appeal of the March
16, 2020 ruling by the U.S. District Court for the District of
Columbia that upheld CMS' position, the Company incurred a
retrospective one-time charge of $639.7 million, of which $534.4
million and $105.3 million have been reflected as a component of
net sales and operating expenses, respectively, in the unaudited
condensed consolidated statement of operations. The $105.3 million
reflected as a component of operating expenses represents a
pre-acquisition contingency related to the portion of the
retrospective liability that arose from sales of Acthar Gel prior
to the Company's acquisition of Questcor Pharmaceuticals Inc. in
August 2014. Of the $534.4 million recorded as a component of net
sales, $12.3 million represents the impact of the Medicaid rebate
calculation through June 14, 2020 for the three months ended June
26, 2020. Also includes $17.2 million in opioid defense costs and
an $8.5 million increase in the fair value of the opioid settlement
warrants. Opioid defense costs are considered to be non-recurring
as a result of the opioid-related litigation settlement announced
during the three months ended March 27, 2020; therefore, such costs
are included as an adjustment to net income on a go-forward basis
until effectuation of the opioid-related litigation
settlement.
|
|
|
(3)
|
Represents research
and development ("R&D") expense incurred related to an upfront
payment made in June 2020 to acquire product rights for
terlipressin in Japan.
|
|
|
(4)
|
Includes tax effects
of above adjustments (unless otherwise separately stated), changes
in uncertain tax positions, tax impacts related to the substantial
doubt about the Company's ability to continue as a going concern,
legislative changes and certain intercompany
transactions.
|
MALLINCKRODT
PLC
|
SEGMENT NET SALES
AND CONSTANT-CURRENCY GROWTH
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
June
26, 2020
|
|
June
28, 2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty Brands
(1)
|
$
|
522.8
|
|
|
$
|
627.8
|
|
|
(16.7)
|
%
|
|
(0.1)
|
%
|
|
(16.6)
|
%
|
Specialty
Generics
|
178.1
|
|
|
195.5
|
|
|
(8.9)
|
|
|
(0.1)
|
|
|
(8.8)
|
|
Segment net
sales
|
$
|
700.9
|
|
|
$
|
823.3
|
|
|
(14.9)
|
%
|
|
(0.1)
|
%
|
|
(14.8)
|
%
|
Medicaid
lawsuit
|
(534.4)
|
|
|
—
|
|
|
*
|
|
*
|
|
*
|
Net sales
|
$
|
166.5
|
|
|
$
|
823.3
|
|
|
(79.8)
|
%
|
|
(0.1)
|
%
|
|
(79.7)
|
%
|
|
*Not
meaningful
|
|
|
(1)
|
The three months
ended June 26, 2020 includes the prospective change to the Medicaid
rebate calculation of $8.6 million for the period from June 15,
2020 through June 26, 2020, of which $6.8 million represents the
channel impact.
|
MALLINCKRODT
PLC
|
SELECT PRODUCT
LINE NET SALES AND CONSTANT-CURRENCY GROWTH
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
June
26, 2020
|
|
June
28, 2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty
Brands
|
|
|
|
|
|
|
|
|
|
Acthar Gel
(1)
|
$
|
213.7
|
|
|
$
|
266.4
|
|
|
(19.8)
|
%
|
|
—
|
%
|
|
(19.8)
|
%
|
INOmax
|
154.9
|
|
|
139.7
|
|
|
10.9
|
|
|
(0.1)
|
|
|
11.0
|
|
Ofirmev
|
52.4
|
|
|
90.5
|
|
|
(42.1)
|
|
|
—
|
|
|
(42.1)
|
|
Therakos
|
47.8
|
|
|
60.9
|
|
|
(21.5)
|
|
|
(0.8)
|
|
|
(20.7)
|
|
Amitiza
|
49.4
|
|
|
52.0
|
|
|
(5.0)
|
|
|
—
|
|
|
(5.0)
|
|
Other
(2)
|
4.6
|
|
|
18.3
|
|
|
(74.9)
|
|
|
—
|
|
|
(74.9)
|
|
Specialty Brands
Total
|
$
|
522.8
|
|
|
$
|
627.8
|
|
|
(16.7)
|
%
|
|
(0.1)
|
%
|
|
(16.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
Specialty
Generics
|
|
|
|
|
|
|
|
|
|
Hydrocodone (API) and
hydrocodone-containing tablets
|
$
|
25.4
|
|
|
$
|
18.1
|
|
|
40.3
|
%
|
|
—
|
%
|
|
40.3
|
%
|
Oxycodone (API) and
oxycodone-containing tablets
|
15.0
|
|
|
19.6
|
|
|
(23.5)
|
|
|
—
|
|
|
(23.5)
|
|
Acetaminophen
(API)
|
55.5
|
|
|
48.4
|
|
|
14.7
|
|
|
—
|
|
|
14.7
|
|
Other controlled
substances
|
77.8
|
|
|
98.6
|
|
|
(21.1)
|
|
|
(0.1)
|
|
|
(21.0)
|
|
Other
|
4.4
|
|
|
10.8
|
|
|
(59.3)
|
|
|
—
|
|
|
(59.3)
|
|
Specialty Generics
Total
|
$
|
178.1
|
|
|
$
|
195.5
|
|
|
(8.9)
|
%
|
|
(0.1)
|
%
|
|
(8.8)
|
%
|
Segment net
sales
|
$
|
700.9
|
|
|
$
|
823.3
|
|
|
(14.9)
|
%
|
|
(0.1)
|
%
|
|
(14.8)
|
%
|
Medicaid
lawsuit
|
$
|
(534.4)
|
|
|
$
|
—
|
|
|
*
|
|
*
|
|
*
|
Net sales
|
$
|
166.5
|
|
|
$
|
823.3
|
|
|
(79.8)
|
%
|
|
(0.1)
|
%
|
|
(79.7)
|
%
|
|
|
|
*Not
meaningful
|
|
|
(1)
|
The three months
ended June 26, 2020 includes the prospective change to the Medicaid
rebate calculation of $8.6 million for the period from June 15,
2020 through June 26, 2020, of which $6.8 million represents the
channel impact.
|
|
|
(2)
|
The three months
ended June 28, 2019 includes $13.9 million of net sales related to
BioVectra prior to the completion of the sale of this business in
November 2019.
|
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited, in
millions, except per share data)
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June
26, 2020
|
Percent
of Net sales
|
|
June
28, 2019
|
Percent
of Net sales
|
Net sales (Includes a
retrospective one-time charge of $534.4 million related to the
Medicaid lawsuit for the six months ended June 26, 2020)
|
$
|
832.3
|
|
100.0
|
%
|
|
$
|
1,613.9
|
|
100.0
|
%
|
Cost of
sales
|
768.7
|
|
92.4
|
|
|
889.9
|
|
55.1
|
|
Gross
profit
|
63.6
|
|
7.6
|
|
|
724.0
|
|
44.9
|
|
Selling, general and
administrative expenses
|
462.4
|
|
55.6
|
|
|
456.1
|
|
28.3
|
|
Research and
development expenses
|
160.3
|
|
19.3
|
|
|
164.9
|
|
10.2
|
|
Restructuring
charges, net
|
12.6
|
|
1.5
|
|
|
4.0
|
|
0.2
|
|
Non-restructuring
impairment charges
|
63.5
|
|
7.6
|
|
|
113.5
|
|
7.0
|
|
Gains on
divestiture
|
(0.4)
|
|
—
|
|
|
—
|
|
—
|
|
Opioid-related
litigation settlement
|
(8.3)
|
|
(1.0)
|
|
|
—
|
|
—
|
|
Medicaid
lawsuit
|
105.3
|
|
12.7
|
|
|
—
|
|
—
|
|
Operating
loss
|
(731.8)
|
|
(87.9)
|
|
|
(14.5)
|
|
(0.9)
|
|
Interest
expense
|
(138.7)
|
|
(16.7)
|
|
|
(154.2)
|
|
(9.6)
|
|
Interest
income
|
4.5
|
|
0.5
|
|
|
3.7
|
|
0.2
|
|
Other income,
net
|
1.1
|
|
0.1
|
|
|
90.7
|
|
5.6
|
|
Loss from continuing
operations before income taxes
|
(864.9)
|
|
(103.9)
|
|
|
(74.3)
|
|
(4.6)
|
|
Income tax expense
(benefit)
|
142.4
|
|
17.1
|
|
|
(229.0)
|
|
(14.2)
|
|
(Loss) income from
continuing operations
|
(1,007.3)
|
|
(121.0)
|
|
|
154.7
|
|
9.6
|
|
Income from
discontinued operations, net of income taxes
|
24.0
|
|
2.9
|
|
|
7.0
|
|
0.4
|
|
Net (loss)
income
|
$
|
(983.3)
|
|
(118.1)
|
%
|
|
$
|
161.7
|
|
10.0
|
%
|
|
|
|
|
|
|
Basic (loss)
earnings per share:
|
|
|
|
|
|
(Loss) income from
continuing operations
|
$
|
(11.95)
|
|
|
|
$
|
1.85
|
|
|
Income from
discontinued operations
|
0.28
|
|
|
|
0.08
|
|
|
Net (loss)
income
|
(11.66)
|
|
|
|
1.93
|
|
|
Diluted (loss)
earnings per share:
|
|
|
|
|
|
(Loss) income from
continuing operations
|
$
|
(11.95)
|
|
|
|
$
|
1.84
|
|
|
Income from
discontinued operations
|
0.28
|
|
|
|
0.08
|
|
|
Net (loss)
income
|
(11.66)
|
|
|
|
1.92
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
Basic
|
84.3
|
|
|
|
83.7
|
|
|
Diluted
|
84.3
|
|
|
|
84.3
|
|
|
MALLINCKRODT
PLC
|
NON-GAAP
MEASURES
|
(unaudited, in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June 26,
2020
|
|
June 28,
2019
|
|
Net
sales
|
Gross
profit
|
SG&A
|
Net (loss)
income
|
|
Diluted net
(loss)
income
per
share (1)
|
|
Net
sales
|
Gross
profit
|
SG&A
|
Net
income
|
|
Diluted net
income per
share
|
GAAP
|
$
|
832.3
|
|
$
|
63.6
|
|
$
|
462.4
|
|
$
|
(983.3)
|
|
|
$
|
(11.66)
|
|
|
$
|
1,613.9
|
|
$
|
724.0
|
|
$
|
456.1
|
|
$
|
161.7
|
|
|
$
|
1.92
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
387.5
|
|
(1.7)
|
|
389.2
|
|
|
4.60
|
|
|
—
|
|
436.2
|
|
(3.2)
|
|
439.4
|
|
|
5.21
|
|
Restructuring and
related charges, net
|
—
|
|
—
|
|
—
|
|
12.6
|
|
|
0.15
|
|
|
—
|
|
—
|
|
—
|
|
4.0
|
|
|
0.05
|
|
Non-restructuring
impairment charge
|
—
|
|
—
|
|
—
|
|
63.5
|
|
|
0.75
|
|
|
—
|
|
—
|
|
—
|
|
113.5
|
|
|
1.35
|
|
Inventory step-up
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
10.0
|
|
—
|
|
10.0
|
|
|
0.12
|
|
Income from
discontinued operations
|
—
|
|
—
|
|
—
|
|
(24.0)
|
|
|
(0.28)
|
|
|
—
|
|
—
|
|
—
|
|
(7.0)
|
|
|
(0.08)
|
|
Change in contingent
consideration fair value
|
—
|
|
—
|
|
5.7
|
|
(5.7)
|
|
|
(0.07)
|
|
|
—
|
|
—
|
|
(2.3)
|
|
2.3
|
|
|
0.03
|
|
Significant legal and
environmental charges (2)
|
534.4
|
|
534.4
|
|
(39.7)
|
|
671.1
|
|
|
7.92
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Divestitures
|
—
|
|
—
|
|
—
|
|
(0.4)
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Separation
costs
|
—
|
|
—
|
|
(42.0)
|
|
42.0
|
|
|
0.50
|
|
|
—
|
|
—
|
|
(30.6)
|
|
30.6
|
|
|
0.36
|
|
Gain on debt
extinguishment, net
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(71.3)
|
|
|
(0.85)
|
|
Unrealized gain on
equity investment
|
—
|
|
—
|
|
—
|
|
(3.0)
|
|
|
(0.04)
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
R&D upfront
payment (3)
|
—
|
|
—
|
|
—
|
|
5.0
|
|
|
0.06
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Reorganization of
legal entity ownership
|
—
|
|
—
|
|
—
|
|
(6.3)
|
|
|
(0.07)
|
|
|
—
|
|
—
|
|
—
|
|
(189.8)
|
|
|
(2.25)
|
|
Income taxes
(4)
|
—
|
|
—
|
|
—
|
|
138.1
|
|
|
1.63
|
|
|
—
|
|
—
|
|
—
|
|
(116.0)
|
|
|
(1.38)
|
|
As
adjusted
|
$
|
1,366.7
|
|
$
|
985.5
|
|
$
|
384.7
|
|
$
|
298.8
|
|
|
$
|
3.53
|
|
|
$
|
1,613.9
|
|
$
|
1,170.2
|
|
$
|
420.0
|
|
$
|
377.4
|
|
|
$
|
4.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of adjusted
net sales
|
100.0
|
%
|
72.1
|
%
|
28.1
|
%
|
21.9
|
%
|
|
|
|
100.0
|
%
|
72.5
|
%
|
26.0
|
%
|
23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In periods where the
Company reports a net loss from continuing operations, potential
ordinary shares outstanding are excluded from the calculation of
diluted earnings per share, prepared in accordance with GAAP, as
they would be anti-dilutive. These potentially dilutive shares are
included in the calculation of adjusted diluted earnings per share
when dilutive. As a result, the adjusted diluted earnings per share
utilized a weighted average share count of 84.7 shares for the six
months ended June 26, 2020.
|
|
|
(2)
|
Effective June 15,
2020, the Company was forced under protest to change the base date
AMP for Acthar Gel, as directed by CMS. While the Company continues
to pursue its appeal of the March 16, 2020 ruling by the U.S.
District Court for the District of Columbia that upheld CMS'
position, the Company incurred a retrospective one-time charge of
$639.7 million, of which $534.4 million and $105.3 million have
been reflected as a component of net sales and operating expenses,
respectively, in the unaudited condensed consolidated statement of
operations. The $105.3 million reflected as a component of
operating expenses represents a pre-acquisition contingency related
to the portion of the retrospective liability that arose from sales
of Acthar Gel prior to the Company's acquisition of Questcor
Pharmaceuticals Inc. in August 2014. Of the $534.4 million recorded
as a component of net sales, $27.6 million represents the impact of
the Medicaid rebate calculation through June 14, 2020 for the six
months ended June 26, 2020. Also includes $39.7 million in opioid
defense costs which are considered to be non-recurring as a result
of the opioid-related litigation settlement announced during the
three months ended March 27, 2020; therefore, such costs are
included as an adjustment to net income on a go-forward basis until
effectuation of the opioid-related litigation settlement. These
costs were partially offset by a $8.3 million decrease in the fair
value of the opioid settlement warrants.
|
|
|
(3)
|
Represents R&D
expense incurred related to an upfront payment made in June 2020 to
acquire product rights for terlipressin in Japan.
|
|
|
(4)
|
Includes tax effects
of above adjustments (unless otherwise separately stated), changes
in uncertain tax positions, tax impacts related to the substantial
doubt about the Company's ability to continue as a going concern,
legislative changes and certain intercompany transactions.The six
months ended June 28, 2019 also includes certain installment sale
transactions.
|
MALLINCKRODT
PLC
|
SEGMENT NET SALES
AND CONSTANT-CURRENCY GROWTH
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
June
26, 2020
|
|
June
28, 2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty Brands
(1)
|
$
|
1,013.4
|
|
|
$
|
1,232.0
|
|
|
(17.7)
|
%
|
|
(0.1)
|
%
|
|
(17.6)
|
%
|
Specialty
Generics
|
353.3
|
|
|
381.9
|
|
|
(7.5)
|
|
|
—
|
|
|
(7.5)
|
|
Segment net
sales
|
$
|
1,366.7
|
|
|
$
|
1,613.9
|
|
|
(15.3)
|
%
|
|
(0.1)
|
%
|
|
(15.2)
|
%
|
Medicaid
lawsuit
|
(534.4)
|
|
|
—
|
|
|
*
|
|
*
|
|
*
|
Net sales
|
$
|
832.3
|
|
|
$
|
1,613.9
|
|
|
(48.4)
|
%
|
|
(0.1)
|
%
|
|
(48.3)
|
%
|
|
|
|
*Not
meaningful
|
|
|
(1)
|
The six months ended
June 26, 2020 includes the prospective change to the Medicaid
rebate calculation of $8.6 million for the period from June 15,
2020 through June 26, 2020, of which $6.8 million represents the
channel impact.
|
MALLINCKRODT
PLC
|
SELECT PRODUCT
LINE NET SALES
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
June
26, 2020
|
|
June
28, 2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty
Brands
|
|
|
|
|
|
|
|
|
|
Acthar
(1)
|
$
|
381.3
|
|
|
$
|
490.3
|
|
|
(22.2)
|
%
|
|
—
|
%
|
|
(22.2)
|
|
Inomax
|
296.6
|
|
|
290.8
|
|
|
2.0
|
|
|
(0.1)
|
|
|
2.1
|
|
Ofirmev
|
127.3
|
|
|
186.1
|
|
|
(31.6)
|
|
|
—
|
|
|
(31.6)
|
|
Therakos
|
111.5
|
|
|
122.7
|
|
|
(9.1)
|
|
|
(0.6)
|
|
|
(8.5)
|
|
Amitiza
|
90.5
|
|
|
105.0
|
|
|
(13.8)
|
|
|
—
|
|
|
(13.8)
|
|
Other
(2)
|
6.2
|
|
|
37.1
|
|
|
(83.3)
|
|
|
—
|
|
|
(83.3)
|
|
Specialty Brands
Total
|
$
|
1,013.4
|
|
|
$
|
1,232.0
|
|
|
(17.7)
|
%
|
|
(0.1)
|
%
|
|
(17.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
Specialty
Generics
|
|
|
|
|
|
|
|
|
|
Hydrocodone (API) and
hydrocodone-containing tablets
|
$
|
51.9
|
|
|
$
|
35.5
|
|
|
46.2
|
%
|
|
—
|
%
|
|
46.2
|
|
Oxycodone (API) and
oxycodone-containing tablets
|
31.9
|
|
|
36.1
|
|
|
(11.6)
|
|
|
—
|
|
|
(11.6)
|
|
Acetaminophen
(API)
|
99.6
|
|
|
94.6
|
|
|
5.3
|
|
|
—
|
|
|
5.3
|
|
Other controlled
substances
|
161.4
|
|
|
192.8
|
|
|
(16.3)
|
|
|
(0.1)
|
|
|
(16.2)
|
|
Other
|
8.5
|
|
|
22.9
|
|
|
(62.9)
|
|
|
—
|
|
|
(62.9)
|
|
Specialty Generics
Total
|
$
|
353.3
|
|
|
$
|
381.9
|
|
|
(7.5)
|
%
|
|
—
|
%
|
|
(7.5)
|
%
|
Segment net
sales
|
1,366.7
|
|
|
1,613.9
|
|
|
(15.3)
|
|
|
(0.1)
|
|
|
(15.2)
|
|
Medicaid
lawsuit
|
(534.4)
|
|
|
—
|
|
|
*
|
|
*
|
|
*
|
Net sales
|
$
|
832.3
|
|
|
$
|
1,613.9
|
|
|
(48.4)
|
%
|
|
(0.1)
|
%
|
|
(48.3)
|
%
|
|
|
|
*Not
meaningful
|
|
|
(1)
|
The six months ended
June 26, 2020 includes the prospective change to the Medicaid
rebate calculation of $8.6 million for the period from June 15,
2020 through June 26, 2020, of which $6.8 million represents the
channel impact.
|
|
|
(2)
|
The six months ended
June 28, 2019 includes $26.3 million of net sales related to
BioVectra prior to the completion of the sale of this business in
November 2019.
|
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited, in
millions)
|
|
|
|
|
|
June
26, 2020
|
|
December
27, 2019
|
Assets
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
818.3
|
|
|
$
|
790.9
|
|
Accounts receivable,
net
|
493.3
|
|
|
577.5
|
|
Inventories
|
333.0
|
|
|
312.1
|
|
Prepaid expenses and
other current assets
|
310.2
|
|
|
150.2
|
|
Total current
assets
|
1,954.8
|
|
|
1,830.7
|
|
Property, plant and
equipment, net
|
864.7
|
|
|
896.5
|
|
Intangible assets,
net
|
6,566.5
|
|
|
7,018.0
|
|
Other
assets
|
304.1
|
|
|
593.7
|
|
Total
Assets
|
$
|
9,690.1
|
|
|
$
|
10,338.9
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
19.5
|
|
|
$
|
633.6
|
|
Accounts
payable
|
86.5
|
|
|
139.8
|
|
Accrued payroll and
payroll-related costs
|
132.5
|
|
|
105.2
|
|
Accrued
interest
|
67.2
|
|
|
62.9
|
|
Medicaid
lawsuit
|
639.7
|
|
|
—
|
|
Accrued and other
current liabilities
|
375.5
|
|
|
485.4
|
|
Total current
liabilities
|
1,320.9
|
|
|
1,426.9
|
|
Long-term
debt
|
5,223.4
|
|
|
4,741.2
|
|
Opioid-related
litigation settlement liability
|
1,635.1
|
|
|
1,643.4
|
|
Pension and
postretirement benefits
|
61.4
|
|
|
62.4
|
|
Environmental
liabilities
|
60.3
|
|
|
60.0
|
|
Other income tax
liabilities
|
220.9
|
|
|
227.1
|
|
Other
liabilities
|
198.6
|
|
|
237.2
|
|
Total
Liabilities
|
8,720.6
|
|
|
8,398.2
|
|
Shareholders'
Equity:
|
|
|
|
Preferred
shares
|
—
|
|
|
—
|
|
Ordinary
shares
|
18.8
|
|
|
18.7
|
|
Ordinary shares held
in treasury at cost
|
(1,616.0)
|
|
|
(1,615.7)
|
|
Additional paid-in
capital
|
5,575.7
|
|
|
5,562.5
|
|
Retained
deficit
|
(3,000.2)
|
|
|
(2,016.9)
|
|
Accumulated other
comprehensive loss
|
(8.8)
|
|
|
(7.9)
|
|
Total Shareholders'
Equity
|
969.5
|
|
|
1,940.7
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
9,690.1
|
|
|
$
|
10,338.9
|
|
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
|
|
|
|
Six Months
Ended
|
|
June
26, 2020
|
|
June
28, 2019
|
Cash Flows From
Operating Activities:
|
|
|
|
Net (loss)
income
|
$
|
(983.3)
|
|
|
$
|
161.7
|
|
Adjustments to
reconcile net cash from operating activities:
|
|
|
|
Depreciation and
amortization
|
439.4
|
|
|
488.6
|
|
Share-based
compensation
|
13.3
|
|
|
22.8
|
|
Deferred income
taxes
|
314.1
|
|
|
(271.2)
|
|
Non-cash impairment
charges
|
63.5
|
|
|
113.5
|
|
Gains on
divestitures
|
(0.4)
|
|
|
—
|
|
Other non-cash
items
|
(12.5)
|
|
|
(76.0)
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts receivable,
net
|
83.6
|
|
|
95.5
|
|
Inventories
|
(27.2)
|
|
|
(23.8)
|
|
Accounts
payable
|
(45.7)
|
|
|
7.2
|
|
Income
taxes
|
(219.8)
|
|
|
22.4
|
|
Medicaid
lawsuit
|
639.7
|
|
|
—
|
|
Other
|
(40.1)
|
|
|
(73.3)
|
|
Net cash from
operating activities
|
224.6
|
|
|
467.4
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Capital
expenditures
|
(31.3)
|
|
|
(77.6)
|
|
Proceeds from
divestiture, net of cash
|
(3.5)
|
|
|
—
|
|
Other
|
6.0
|
|
|
8.2
|
|
Net cash from
investing activities
|
(28.8)
|
|
|
(69.4)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Issuance of external
debt
|
—
|
|
|
200.0
|
|
Repayment of external
debt
|
(129.6)
|
|
|
(685.9)
|
|
Debt financing
costs
|
(9.1)
|
|
|
—
|
|
Repurchase of
shares
|
(0.3)
|
|
|
(2.5)
|
|
Other
|
(19.2)
|
|
|
(18.0)
|
|
Net cash from
financing activities
|
(158.2)
|
|
|
(506.4)
|
|
Effect of currency
rate changes on cash
|
(0.5)
|
|
|
0.8
|
|
Net change in
cash, cash equivalents and restricted cash
|
37.1
|
|
|
(107.6)
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
822.6
|
|
|
367.5
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
859.7
|
|
|
$
|
259.9
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
818.3
|
|
|
$
|
241.1
|
|
Restricted cash
included in other assets at end of period
|
41.4
|
|
|
18.8
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
859.7
|
|
|
$
|
259.9
|
|
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