STAINES-UPON-THAMES, United
Kingdom, May 5, 2020
/PRNewswire/ --
- First quarter net sales of $665.8
million, with diluted loss per share of $0.60, with results impacted in part by
competitive and payer pressures in certain products and a decline
in demand due to COVID-19
- Adjusted diluted earnings per share (EPS) of $1.64
- Operating cash flows of $53.7
million; cash on hand today in excess of $700 million after addressing the senior notes
maturing in April 2020
- Key pipeline highlights include:
-
- U. S. Food and Drug Administration (FDA) acceptance of a New
Drug Application (NDA) for terlipressin
- Initiation of rolling submission of Biologics License
Application (BLA) for StrataGraft® regenerative
tissue
- Collaborations with Novoteris, LLC and Massachusetts General
Hospital to study inhaled nitric oxide in COVID-19 patients
- Company continues to work to resolve outstanding issues related
to opioids and Acthar® Gel, and considers all available
options to address legal and financial challenges
Mallinckrodt plc (NYSE: MNK), a
global biopharmaceutical company, today reported results for the
three months ended March 27, 2020. Unless otherwise noted, the
quarter comparisons are to the prior year comparable three months
ended March 29, 2019.
Net sales were $665.8 million in
the quarter with diluted loss per share of $0.60 compared to diluted income per share of
$1.83. Adjusted diluted EPS were
$1.64 versus $1.94, a decrease of 15.5%, on lower net sales in
first quarter 2020, partially offset by non-operational
favorability from adjusted income tax expense and interest
expense.
"As we navigate the unprecedented challenges created by the
COVID-19 pandemic, we are committed to ensuring patients have
uninterrupted access to our medicines," said Mark Trudeau, President and Chief Executive
Officer of Mallinckrodt. "I am
proud of Mallinckrodt's ability to
continue manufacturing and supplying products during this critical
time, and I thank our talented workforce for their ongoing
commitment to the patients we serve. We also continued to execute
on our strategic priorities and made important progress advancing
our pipeline during the first quarter, moving closer toward the
potential approval of key products - terlipressin and
StrataGraft® regenerative tissue - later this year."
"Looking ahead, we expect the next few quarters will be
challenging due to the impact of COVID-19, as some of our products
are sensitive to reduced numbers of surgical procedures and doctor
visits. We are adapting our operations to the current environment
as we continue serving patients and customers. At the same time, we
remain highly focused on addressing all legal and financial
challenges impacting the business, and will continue to evaluate
all available options to deal with these matters."
COMPANY FINANCIAL RESULTS
First Quarter 2020 Results
Gross profit was
$283.8 million with gross profit as a
percentage of net sales of 42.6%, compared with 42.4%. Adjusted
gross profit was $480.5 million,
compared with $566.3 million, with
adjusted gross profit as a percentage of net sales of 72.2%,
compared with 71.6%, due primarily to product mix.
Selling, general and administrative (SG&A) expenses were
$231.1 million or 34.7% of net sales,
as compared to $230.2 million, or
29.1%, primarily impacted by legal expenses and separation costs.
Adjusted SG&A expenses were $187.2
million or 28.1% of net sales, compared with $211.4 million or 26.7%. Adjusted SG&A
expense declined due to ongoing focused efforts on SG&A
reductions.
Research and development expenses were $77.4 million, as compared to $85.3 million, due in part to the completion of
two phase 3 clinical trials in late 2019. Research and development
as a percentage of net sales was 11.6% versus 10.8%.
Interest expense was $74.5 million
as compared to $82.7 million, a
reduction of 9.9%, driven by deleveraging activities executed in
2019, including repurchase of debt at a discount and the execution
of a fourth quarter debt exchange.
Income tax benefit was $18.9
million, for an effective tax rate of 25.0%. The adjusted
effective tax rate was 2.0% in the first quarter. The adjusted
effective tax rate has decreased from 2019 primarily due to the
interest-bearing deferred tax obligations being fully satisfied in
2019.
BUSINESS SEGMENT RESULTS
Specialty Brands Segment
Net sales for the segment in
the first quarter 2020 were $490.6
million.
- Acthar Gel net sales were $167.6
million, a 25.1% decrease, primarily driven by continued
reimbursement challenges impacting new and returning patients;
continued payer scrutiny on overall specialty pharmaceutical
spending; and reduced patient demand due to COVID-19 stay-at-home
orders. As the company navigates the ongoing CMS dispute, revenue
from Acthar Gel Medicaid sales will be recognized, and any
potential impact of a negative outcome in this matter is not
reflected in the financial results.
- INOMAX® (nitric oxide) gas, for inhalation, net
sales were $141.7 million, down 6.2%,
or 6.1% on a constant-currency basis, driven by increased
competition for inhaled nitric oxide. Overall INOmax consumption
remains high and is currently being driven, in part, by use in
COVID-19 patients. The INOmax Total Care service offering remains a
differentiating feature among competition.
- OFIRMEV® (acetaminophen) injection net sales were
$74.9 million, a decrease of 21.7%,
due to significant quarter-to-quarter order variability, and a
reduction in elective surgeries due to public health orders and
institutions focused on responding to the COVID-19 pandemic.
- Therakos® immunology platform net sales were
$63.7 million, a modest increase of
3.1%, or 3.6% on a constant-currency basis, impacted as the quarter
progressed by COVID-19, including stay-at-home directives impacting
patients' abilities to receive treatment in hospitals or apheresis
centers.
- AMITIZA net sales were $41.1
million, down 22.5% due to increased competition in the U.S.
and the biennial price reduction in Japan.
Specialty Generics Segment
Net sales for the segment
in the first quarter were $175.2
million, a decrease of 6.0%, primarily driven by a
now-resolved, short-term disruption in the manufacturing of
acetaminophen, which was unrelated to COVID-19.
COVID-19 UPDATE
Since the onset of the COVID-19
pandemic, the company has continued to manufacture, supply and
deliver its products largely without interruption. At present, the
company does not anticipate significant COVID-19-related
manufacturing or supply chain disruptions, and it continues to
evaluate its end-to-end supply chain and assess opportunities to
refine its processes going forward. However, Mallinckrodt's business performance started to be
impacted by reduced patient demand due to COVID-19 stay-at-home
orders at the end of the first quarter, and the company expects
this impact will be more significant in the second quarter at
least. The ultimate business impact will largely be determined by
the return to work guidance issued by international, national, and
local governments, health officials and customers.
The company is supporting the fight against COVID-19 in a number
of ways, including by partnering with Novoteris, LLC and
Massachusetts General Hospital to study inhaled nitric oxide for
use as a therapeutic option for COVID-19 patients; giving medically
trained employees paid time off to volunteer to treat or care for
COVID-19 patients; providing funding and therapies to hospitals to
conduct treatment-related research; adapting certain of its
manufacturing facilities to produce hand sanitizers for designated
counties, state health departments and emergency operation
distribution centers located in states where we have operations;
donating excess personal protective equipment (PPE) and other
resources to healthcare providers, first responders, and medical
facilities; and partnering with patient advocacy groups to help
mitigate the impact of the pandemic on patients.
LITIGATION UPDATE
On February
25, 2020 the company announced an agreement in principle for
a global resolution to its opioid litigation, subject to certain
conditions. Since that time, the company has been focused on
addressing relevant matters to facilitate implementation of that
resolution, including broadening plaintiff support and addressing
the company's near-term debt maturities. On March 3, 2020 the U.S. Attorney's office in
Massachusetts announced its
intervention in a lawsuit filed against the company alleging
violations of the False Claims Act relating to the method to
calculate Medicaid drug rebates for Acthar Gel. As announced on
March 16, 2020, the U.S. District
Court for the District of Columbia
ruled against Mallinckrodt in its
lawsuit against the U.S. Department of Health and Human Services
and Centers for Medicare and Medicaid Services (CMS) regarding the
Company's calculation of Medicaid drug rebates for Acthar Gel. The
company has sought reconsideration of the D.C. Court's ruling and a
stay of the decision and continues to evaluate all options
available to address these legal and financial matters.
LIQUIDITY
Cash provided by operating activities in the
first quarter was $53.7 million, with
free cash flow of $33.8 million.
The cash balance at the end of the first quarter was
$808.0 million, and the revolving
credit facility was fully drawn. Total principal debt outstanding
at the end of the first quarter was $5.418
billion, with net debt of $4.610
billion.
Following the quarter, the company successfully addressed the
maturity of the 4.875% Senior Notes due April 2020 as a result of the completion of a
$495.0 million private debt exchange
and the remaining $119.8 million with
cash on hand. As of today's earnings announcement, the current cash
balance is in excess of $700
million.
CONFERENCE CALL AND WEBCAST
Mallinckrodt will hold a conference call on
Tuesday, May 5, 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
1572379.
- Through an audio replay: A replay of the call will be available
beginning at 11:30 a.m. Eastern Time on
Tuesday, May 5, 2020, and ending at 11:59 p.m. Eastern Time on Tuesday, May 19, 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 1572379.
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 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 gross profit and adjusted SG&A
represent amounts prepared in accordance with accounting principles
generally accepted in the U.S. (GAAP) and adjusted for
certain items that management believes are not reflective of the
operational performance of the business. The adjustments for these
items are on a pre-tax basis for adjusted gross profit and adjusted
SG&A and on an after-tax basis for adjusted net income.
Adjustments to GAAP amounts include, as applicable to each measure,
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; 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 from 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 of legislative changes and tax impacts from certain
transactions, such as acquisitions or reorganizations.
Net sales growth on a constant-currency basis measures the
change in net sales between current- and prior-year periods using a
constant currency, the exchange rate in effect during the
applicable prior-year period.
Free cash flow for the first quarter represents net cash
provided by operating activities of $53.7
million less capital expenditures of $19.9 million, each as prepared in accordance
with GAAP.
Net debt as of March 27, 2020 represents the total
principal debt outstanding of $5.418
billion less cash of $808.0
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:
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;
the impact of Irish laws; and the impact of the outbreak of the
COVID-19 coronavirus.
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 the "Risk Factors" section of Mallinckrodt's Quarterly Report on Form 10-Q for
the quarterly period ended March 27,
2020, which the company expects to file later today. 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, CPA
Vice President, Investor Relations and IRO
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 05/20.
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(unaudited, in
millions, except per share data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 27,
2020
|
Percent
of Net
sales
|
|
March 29,
2019
|
Percent
of Net
sales
|
Net sales
|
$
|
665.8
|
|
100.0
|
%
|
|
$
|
790.6
|
|
100.0
|
%
|
Cost of
sales
|
382.0
|
|
57.4
|
|
|
455.5
|
|
57.6
|
|
Gross
profit
|
283.8
|
|
42.6
|
|
|
335.1
|
|
42.4
|
|
Selling, general and
administrative expenses
|
231.1
|
|
34.7
|
|
|
230.2
|
|
29.1
|
|
Research and
development expenses
|
77.4
|
|
11.6
|
|
|
85.3
|
|
10.8
|
|
Restructuring
charges, net
|
(1.8)
|
|
(0.3)
|
|
|
4.2
|
|
0.5
|
|
Losses on
divestiture
|
0.2
|
|
—
|
|
|
—
|
|
—
|
|
Opioid-related
litigation settlement
|
(16.8)
|
|
(2.5)
|
|
|
—
|
|
—
|
|
Operating (loss)
income
|
(6.3)
|
|
(0.9)
|
|
|
15.4
|
|
1.9
|
|
Interest
expense
|
(74.5)
|
|
(11.2)
|
|
|
(82.7)
|
|
(10.5)
|
|
Interest
income
|
3.5
|
|
0.5
|
|
|
1.5
|
|
0.2
|
|
Other income,
net
|
1.7
|
|
0.3
|
|
|
16.3
|
|
2.1
|
|
Loss from continuing
operations before income taxes
|
(75.6)
|
|
(11.4)
|
|
|
(49.5)
|
|
(6.3)
|
|
Income tax
benefit
|
(18.9)
|
|
(2.8)
|
|
|
(204.7)
|
|
(25.9)
|
|
(Loss) income from
continuing operations
|
(56.7)
|
|
(8.5)
|
|
|
155.2
|
|
19.6
|
|
Income (loss) from
discontinued operations, net of income taxes
|
6.5
|
|
1.0
|
|
|
(0.3)
|
|
—
|
|
Net (loss)
income
|
$
|
(50.2)
|
|
(7.5)
|
%
|
|
$
|
154.9
|
|
19.6
|
%
|
|
|
|
|
|
|
Basic (loss)
earnings per share:
|
|
|
|
|
|
(Loss) income from
continuing operations
|
$
|
(0.67)
|
|
|
|
$
|
1.86
|
|
|
Income (loss) from
discontinued operations
|
0.08
|
|
|
|
—
|
|
|
Net (loss)
income
|
$
|
(0.60)
|
|
|
|
$
|
1.86
|
|
|
Diluted (loss)
earnings per share:
|
|
|
|
|
|
(Loss) income from
continuing operations
|
$
|
(0.67)
|
|
|
|
$
|
1.83
|
|
|
Income (loss) from
discontinued operations
|
0.08
|
|
|
|
—
|
|
|
Net (loss)
income
|
$
|
(0.60)
|
|
|
|
$
|
1.83
|
|
|
Weighted-average
number of shares outstanding
|
|
|
|
|
|
Basic
weighted-average shares outstanding
|
84.2
|
|
|
|
83.5
|
|
|
Diluted
weighted-average shares outstanding
|
84.2
|
|
|
|
84.6
|
|
|
MALLINCKRODT
PLC
|
NON-GAAP
MEASURES
|
(unaudited, in
millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 27,
2020
|
|
March 29,
2019
|
|
Gross
profit
|
SG&A
|
Net
(loss)
income
|
|
Diluted net (loss)
income
per share
(1)
|
|
Gross
profit
|
SG&A
|
Net
income
|
|
Diluted
net
income
per share
|
GAAP
|
$
|
283.8
|
|
$
|
231.1
|
|
$
|
(50.2)
|
|
|
$
|
(0.60)
|
|
|
$
|
335.1
|
|
$
|
230.2
|
|
$
|
154.9
|
|
|
$
|
1.83
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
196.7
|
|
(0.9)
|
|
197.6
|
|
|
2.34
|
|
|
221.2
|
|
(1.6)
|
|
222.8
|
|
|
2.63
|
|
Restructuring and
related charges, net
|
—
|
|
—
|
|
(1.8)
|
|
|
(0.02)
|
|
|
—
|
|
—
|
|
4.2
|
|
|
0.05
|
|
Inventory step-up
expense
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
10.0
|
|
—
|
|
10.0
|
|
|
0.12
|
|
Income (loss) from
discontinued operations
|
—
|
|
—
|
|
(6.5)
|
|
|
(0.08)
|
|
|
—
|
|
—
|
|
0.3
|
|
|
—
|
|
Change in contingent
consideration fair value
|
—
|
|
0.8
|
|
(0.8)
|
|
|
(0.01)
|
|
|
—
|
|
(5.5)
|
|
5.5
|
|
|
0.07
|
|
Significant legal and
environmental charges (2)
|
—
|
|
(22.5)
|
|
5.7
|
|
|
0.07
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Divestitures
|
—
|
|
—
|
|
0.2
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Separation
costs
|
—
|
|
(21.3)
|
|
21.3
|
|
|
0.25
|
|
|
—
|
|
(11.7)
|
|
11.7
|
|
|
0.14
|
|
Gains on debt
extinguishment, net
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
(9.0)
|
|
|
(0.11)
|
|
Unrealized gain on
equity investment
|
—
|
|
—
|
|
(5.4)
|
|
|
(0.06)
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Legal entity and
intercompany financing reorganization
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
(192.8)
|
|
|
(2.28)
|
|
Income taxes
(3)
|
—
|
|
—
|
|
(21.8)
|
|
|
(0.26)
|
|
|
—
|
|
—
|
|
(43.2)
|
|
|
(0.51)
|
|
As
adjusted
|
$
|
480.5
|
|
$
|
187.2
|
|
$
|
138.3
|
|
|
$
|
1.64
|
|
|
$
|
566.3
|
|
$
|
211.4
|
|
$
|
164.4
|
|
|
$
|
1.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of net
sales
|
72.2
|
%
|
28.1
|
%
|
20.8
|
%
|
|
|
|
71.6
|
%
|
26.7
|
%
|
20.8
|
%
|
|
|
|
|
|
|
|
|
(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 84.3 shares for the
three months ended March 27, 2020.
|
|
|
(2)
|
Includes $22.5
million in opioid defense costs which are considered to be
non-recurring as a result of the 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 Litigation Settlement. These costs were
partially offset by a $16.8 million decrease in the fair value of
the opioid settlement warrants.
|
|
|
(3)
|
Includes tax effects
of above adjustments (unless otherwise separately stated), changes
in uncertain tax positions, tax impacts of legislative changes and
certain intercompany transactions. The three months ended
March 29, 2019 also includes certain installment sale
transactions.
|
MALLINCKRODT
PLC
|
SEGMENT NET SALES
AND CONSTANT-CURRENCY GROWTH
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
March 27,
2020
|
|
March 29,
2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty
Brands
|
$
|
490.6
|
|
|
$
|
604.2
|
|
|
(18.8)
|
%
|
|
(0.1)
|
%
|
|
(18.7)
|
%
|
Specialty
Generics
|
175.2
|
|
|
186.4
|
|
|
(6.0)
|
|
|
—
|
|
|
(6.0)
|
|
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
|
(15.8)
|
%
|
|
(0.1)
|
%
|
|
(15.7)
|
%
|
MALLINCKRODT
PLC
|
SELECT PRODUCT
LINE NET SALES AND CONSTANT-CURRENCY GROWTH
|
(unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
March 27,
2020
|
|
March 29,
2019
|
|
Percent change
|
|
Currency
impact
|
|
Constant-
currency
growth
|
Specialty
Brands
|
|
|
|
|
|
|
|
|
|
Acthar Gel
|
$
|
167.6
|
|
|
$
|
223.9
|
|
|
(25.1)
|
%
|
|
—
|
%
|
|
(25.1)
|
%
|
INOmax
|
141.7
|
|
|
151.1
|
|
|
(6.2)
|
|
|
(0.1)
|
|
|
(6.1)
|
|
Ofirmev
|
74.9
|
|
|
95.6
|
|
|
(21.7)
|
|
|
—
|
|
|
(21.7)
|
|
Therakos
|
63.7
|
|
|
61.8
|
|
|
3.1
|
|
|
(0.5)
|
|
|
3.6
|
|
Amitiza
|
41.1
|
|
|
53.0
|
|
|
(22.5)
|
|
|
—
|
|
|
(22.5)
|
|
Other
(1)
|
1.6
|
|
|
18.8
|
|
|
(91.5)
|
|
|
—
|
|
|
(91.5)
|
|
Specialty Brands
Total
|
$
|
490.6
|
|
|
$
|
604.2
|
|
|
(18.8)
|
%
|
|
(0.1)
|
%
|
|
(18.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
Specialty
Generics
|
|
|
|
|
|
|
|
|
|
Hydrocodone (API) and
hydrocodone-containing tablets
|
$
|
26.5
|
|
|
$
|
17.4
|
|
|
52.3
|
%
|
|
—
|
%
|
|
52.3
|
%
|
Oxycodone (API) and
oxycodone-containing tablets(2)
|
16.9
|
|
|
16.5
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
Acetaminophen
(API)(2)
|
44.1
|
|
|
46.2
|
|
|
(4.5)
|
|
|
—
|
|
|
(4.5)
|
|
Other controlled
substances(2)
|
83.6
|
|
|
94.2
|
|
|
(11.3)
|
|
|
—
|
|
|
(11.3)
|
|
Other(2)
|
4.1
|
|
|
12.1
|
|
|
(66.1)
|
|
|
—
|
|
|
(66.1)
|
|
Specialty Generics
Total
|
$
|
175.2
|
|
|
$
|
186.4
|
|
|
(6.0)
|
%
|
|
—
|
%
|
|
(6.0)
|
%
|
|
|
(1)
|
The three months
ended March 29, 2019 includes $12.4 million of net sales related to
BioVectra prior to the completion of the sale of this business in
November 2019.
|
|
|
(2)
|
Prior period amounts
have been reclassified to conform to current period
presentation.
|
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited, in
millions)
|
|
|
|
|
|
March
27, 2020
|
|
December
27, 2019
|
Assets
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
808.0
|
|
|
$
|
790.9
|
|
Accounts receivable,
net
|
527.2
|
|
|
577.5
|
|
Inventories
|
327.1
|
|
|
312.1
|
|
Prepaid expenses and
other current assets
|
211.0
|
|
|
150.2
|
|
Total current
assets
|
1,873.3
|
|
|
1,830.7
|
|
Property, plant and
equipment, net
|
878.2
|
|
|
896.5
|
|
Intangible assets,
net
|
6,820.4
|
|
|
7,018.0
|
|
Other
assets
|
599.4
|
|
|
593.7
|
|
Total
Assets
|
$
|
10,171.3
|
|
|
$
|
10,338.9
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
634.2
|
|
|
$
|
633.6
|
|
Accounts
payable
|
110.2
|
|
|
139.8
|
|
Accrued payroll and
payroll-related costs
|
63.0
|
|
|
105.2
|
|
Accrued
interest
|
82.3
|
|
|
62.9
|
|
Accrued and other
current liabilities
|
394.4
|
|
|
485.4
|
|
Total current
liabilities
|
1,284.1
|
|
|
1,426.9
|
|
Long-term
debt
|
4,739.1
|
|
|
4,741.2
|
|
Opioid-related
litigation settlement liability
|
1,626.6
|
|
|
1,643.4
|
|
Pension and
postretirement benefits
|
61.5
|
|
|
62.4
|
|
Environmental
liabilities
|
60.6
|
|
|
60.0
|
|
Other income tax
liabilities
|
291.3
|
|
|
227.1
|
|
Other
liabilities
|
212.3
|
|
|
237.2
|
|
Total
Liabilities
|
8,275.5
|
|
|
8,398.2
|
|
Shareholders'
Equity:
|
|
|
|
Preferred
shares
|
—
|
|
|
—
|
|
Ordinary
shares
|
18.7
|
|
|
18.7
|
|
Ordinary shares held
in treasury at cost
|
(1,615.7)
|
|
|
(1,615.7)
|
|
Additional paid-in
capital
|
5,569.1
|
|
|
5,562.5
|
|
Retained
deficit
|
(2,067.1)
|
|
|
(2,016.9)
|
|
Accumulated other
comprehensive loss
|
(9.2)
|
|
|
(7.9)
|
|
Total
Shareholders' Equity
|
1,895.8
|
|
|
1,940.7
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
10,171.3
|
|
|
$
|
10,338.9
|
|
MALLINCKRODT
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
|
|
|
|
Three Months
Ended
|
|
March
27, 2020
|
|
March
29, 2019
|
Cash Flows From
Operating Activities:
|
|
|
|
Net (loss)
income
|
$
|
(50.2)
|
|
|
$
|
154.9
|
|
Adjustments to
reconcile net cash from operating activities:
|
|
|
|
Depreciation and
amortization
|
223.1
|
|
|
247.6
|
|
Share-based
compensation
|
6.7
|
|
|
10.0
|
|
Deferred income
taxes
|
5.5
|
|
|
(243.2)
|
|
Losses on
divestitures
|
0.2
|
|
|
—
|
|
Other non-cash
items
|
(19.6)
|
|
|
2.6
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts receivable,
net
|
49.4
|
|
|
48.7
|
|
Inventories
|
(18.4)
|
|
|
(0.7)
|
|
Accounts
payable
|
(22.9)
|
|
|
(7.1)
|
|
Income
taxes
|
(34.9)
|
|
|
19.8
|
|
Other
|
(85.2)
|
|
|
(68.1)
|
|
Net cash from
operating activities
|
53.7
|
|
|
164.5
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Capital
expenditures
|
(19.9)
|
|
|
(39.8)
|
|
Proceeds from
divestiture, net of cash
|
(3.5)
|
|
|
—
|
|
Other
|
6.7
|
|
|
0.4
|
|
Net cash from
investing activities
|
(16.7)
|
|
|
(39.4)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Issuance of external
debt
|
—
|
|
|
200.0
|
|
Repayment of external
debt
|
(4.9)
|
|
|
(448.7)
|
|
Debt financing
costs
|
(4.0)
|
|
|
—
|
|
Proceeds from
exercise of share options
|
—
|
|
|
0.3
|
|
Repurchase of
shares
|
—
|
|
|
(0.5)
|
|
Other
|
—
|
|
|
0.5
|
|
Net cash from
financing activities
|
(8.9)
|
|
|
(248.4)
|
|
Effect of currency
rate changes on cash
|
(1.5)
|
|
|
0.3
|
|
Net change in
cash, cash equivalents and restricted cash
|
26.6
|
|
|
(123.0)
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
822.6
|
|
|
367.5
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
849.2
|
|
|
$
|
244.5
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
808.0
|
|
|
$
|
225.8
|
|
Restricted cash
included in other assets at end of period
|
41.2
|
|
|
18.7
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
849.2
|
|
|
$
|
244.5
|
|
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SOURCE Mallinckrodt plc