HERTFORDSHIRE, England and
PITTSBURGH, May 10, 2017
/PRNewswire/ -- Mylan N.V. (NASDAQ, TASE: MYL) today announced
its financial results for the quarter ended March 31,
2017.
Financial Highlights
- Total revenues of $2.72 billion,
up 24% compared to the prior year period
-
- North America segment third
party net sales of $1.21 billion, up
5%; and up approximately 20% excluding the impact of EpiPen®
Auto-Injector, which was anticipated
- Europe segment third party net
sales of $892.0 million, up 53%
- Rest of World segment third party net sales of $580.5 million, up 34%
- U.S. GAAP diluted earnings per ordinary share ("U.S. GAAP EPS")
of $0.12, up 300% compared to U.S.
GAAP EPS of $0.03 in the prior year
period
- Adjusted diluted earnings per ordinary share ("adjusted EPS")
of $0.93, up 22% compared to
$0.76 in the prior year period
- U.S. GAAP cash provided by operating activities of $452.9 million, up 463% compared to $80.5 million in the prior year period
- Mylan is not providing forward looking guidance for U.S. GAAP
reported financial measures or a quantitative reconciliation of
forward-looking non-GAAP financial measures. Please see "Non-GAAP
Financial Measures" for additional information.
Mylan CEO Heather Bresch
commented, "Mylan's results during the first quarter marked a great
start to what we believe will be another year of strong financial
performance, and continue to reflect the strength and diversity of
our global business and demonstrate our resilience and ability to
absorb both our industry's natural volatility, as well as
additional headwinds, related to particular products and/or
markets. We delivered year-over-year revenue growth of 24%,
adjusted EPS growth of 22%, and expanded segment profitability in
all three segments. These results are a true reflection of all of
the great assets we have integrated, with significant contributions
from acquisitions completed last year, as well as from new product
launches across our business. We remain confident in our guidance
and our business outlook for the full year 2017, including our
adjusted EPS guidance range."
Mylan President Rajiv Malik said,
"We continued to benefit from the successful execution of the
integration of our global platform, with strong double-digit
revenue growth in Europe and Rest
of World and a solid performance in North
America. We also continue to execute on our key pipeline
programs, as outlined during our March investor day. Our overall
expectations for the global pricing environment are unchanged and
we are still predicting mid-single digit price erosion globally for
the year."
Mylan CFO Ken Parks added, "We
are pleased with our strong operating cash flow generation in the
quarter, and we remain committed to deleveraging in 2017. With our
financial flexibility, we continue to execute on our business plan,
including business development activities, while maintaining our
commitment to an investment grade credit rating."
Total Revenues
|
Three Months
Ended
|
|
March
31,
|
(Unaudited; in
millions)
|
2017
|
|
2016
|
|
Percent
Change
|
Total
Revenues
|
$
|
2,719.5
|
|
|
$
|
2,191.3
|
|
|
24%
|
North America
(1)
|
1,214.9
|
|
|
1,157.5
|
|
|
5%
|
Europe
(1)
|
892.0
|
|
|
584.3
|
|
|
53%
|
Rest of World
(1)
|
580.5
|
|
|
434.3
|
|
|
34%
|
Other
Revenues
|
32.1
|
|
|
15.2
|
|
|
111%
|
|
|
(1)
|
As previously
reported, effective October 1, 2016, we expanded our reportable
segments as follows: North America, Europe and Rest of
World. As a result, the amounts previously reported under the
Specialty segment have been recast to North America and amounts
related to
Brazil are included in Rest of World for all periods presented.
Segment amounts represent third party net sales.
|
First Quarter 2017 Financial Results
Total Revenues
Total revenues were $2.72 billion
in the first quarter of 2017, compared to $2.19 billion in the prior year period. Third
party net sales for the current quarter were $2.69 billion compared to $2.18 billion for the prior year period,
representing an increase of $511.3
million, or 23%. In the first quarter of 2017, net sales
from the acquisitions of Meda AB (publ) ("Meda") and the
non-sterile, topicals-focused business of Renaissance Acquisition
Holdings, LLC (the "Topicals Business") contributed approximately
$606.6 million. These increases were
partially offset by a net decrease in net sales from new products
and existing products of approximately $85.8
million. The decrease from existing products was due to a
combination of lower pricing and volumes in the current quarter.
Other third party revenues for the current quarter were
$32.1 million compared to
$15.2 million in the prior year
period, an increase of $16.9 million
primarily as a result of an increase in royalty income, including
the impact of the acquired businesses. The unfavorable impact of
foreign currency translation on current quarter revenues was
approximately $10 million or less
than 1%. Below is a summary of third party net sales in each of our
segments for the three months ended March 31, 2017:
- Third party net sales from North
America were $1.21 billion
for the quarter, an increase of 5% when compared to the prior year
period. This increase was principally due to net sales from the
acquisitions of Meda and the Topicals Business which totaled
approximately $182.1 million.
Partially offsetting this increase was a net decrease in net sales
from new products and lower volume and pricing on existing
products. In addition, sales of the EpiPen® Auto-Injector declined
in the current quarter as a result of increased competition and the
impact of the launch of the authorized generic. The impact of
foreign currency translation was less than 1% within North America.
- Third party net sales from Europe were $892.0
million for the quarter, an increase of 53% when compared to
the prior year period. This increase was primarily the result of
net sales from the acquisition of Meda which totaled approximately
$337.8 million. This increase was
partially offset by a net decrease in net sales from new products
and lower volume and pricing on existing products. The unfavorable
impact of foreign currency translation on current period third
party net sales was approximately $24
million, or 4% within Europe.
- Third party net sales from Rest of World were
$580.5 million for the quarter, an
increase of 34% when compared to the prior year period. This
increase was primarily due to net sales from the acquisition of
Meda which totaled approximately $86.7
million. In addition, net sales from existing products
increased principally as a result of higher sales from our
anti-retroviral franchise. Throughout the segment, sales from new
products and higher volumes on existing products more than offset
lower pricing. The favorable impact of foreign currency translation
on current period third party net sales was approximately
$13 million, or 3% within Rest of
World.
Total Gross Profit
Gross profit was $1.09 billion and
$907.0 million for the first quarter
of 2017 and 2016, respectively. Gross margins were 40% and 41% in
the first quarter of 2017 and 2016, respectively. Gross margins
were negatively impacted in the current quarter due to increased
amortization expense as a result of the acquisitions of Meda and
the Topicals Business, lower gross profit from the sales of
existing products in North
America, including the EpiPen® Auto-Injector, partially
offset by the contributions from the acquired businesses noted
above. Adjusted gross profit was $1.45
billion and adjusted gross margins were 53% for the first
quarter of 2017 compared to adjusted gross profit of $1.18 billion and adjusted gross margins of 54%
in the prior year period. Adjusted gross margins were negatively
impacted in the current quarter as a result of lower gross profit
from the sales of existing products in North America, including the EpiPen®
Auto-Injector, partially offset by the contributions from the
acquired businesses.
Total Profitability
Earnings from operations increased $121.6
million from the comparable prior year period primarily due
to the increase in gross profit, partially offset by higher
SG&A expense related to the acquired businesses.
R&D expense decreased from the comparable prior year period
due to lower expenditures principally related to the Company's
respiratory and biologics programs due to the timing of clinical
activities when compared to the prior year period. Partially
offsetting these decreases was the additional R&D expense due
to the impact of acquisitions. SG&A expense increased from the
comparable prior year period primarily due to the additional
expense related to the acquired businesses, partially offset by
lower acquisition related costs, including consulting and legal
costs.
U.S. GAAP net earnings increased by $52.5
million to $66.4 million for
the three months ended March 31, 2017, compared to
$13.9 million for the prior year
period. First quarter 2017 U.S. GAAP net earnings were positively
impacted by the increase in earnings from operations. Partially
offsetting this increase were higher non-operating expenses
including interest expense in the current quarter. U.S. GAAP EPS
increased from $0.03 to $0.12 in the current quarter. Adjusted net
earnings increased by $113.5 million
to $499.8 million compared to
$386.3 million for the prior year
period. Adjusted EPS increased 22% to $0.93 compared to $0.76 in the prior year period.
EBITDA, which is defined as net earnings (excluding the losses
from equity method investees) plus income taxes, interest expense,
depreciation and amortization, was $658.5
million for the quarter ended March 31, 2017 and
$417.3 million for the comparable
prior year quarter. After adjusting for certain items as further
detailed in the reconciliation below, adjusted EBITDA was
$812.7 million for the quarter ended
March 31, 2017 and $583.7
million for the comparable prior year quarter.
Cash Flow
Net cash provided by operating activities was $452.9 million for the three months ended
March 31, 2017 compared to $80.5
million for the prior year period. Capital expenditures were
approximately $58.4 million for the
three months ended March 31, 2017 compared to approximately
$51.8 million for the comparable
prior year. Adjusted cash provided by operating activities was
$536.0 million for the three months
ended March 31, 2017 compared to $202.0
million for the prior year period. Adjusted free cash flow,
defined as adjusted cash provided by operating activities less
capital expenditures, was $477.6
million for the three months ended March 31, 2017,
compared to $150.2 million in the
prior year.
Conference Call
Mylan N.V. will host a conference call and live webcast, today
at 10:00 a.m. ET, to review the
company's financial results for the first quarter ended
March 31, 2017. The dial-in number to
access the call is 800.514.4861 or 678.809.2405 for international
callers. To access the live webcast, please log onto Mylan's
website (www.mylan.com) at least 15 minutes before the event is
scheduled to begin to register and download or install any
necessary software. A replay of the webcast will be available will
be available at www.mylan.com/investors, for a limited time.
Non-GAAP Financial Measures
This press release includes the presentation and discussion of
certain financial information that differs from what is reported
under accounting principles generally accepted in the United States ("U.S. GAAP"). These
non-GAAP financial measures, including, but not limited to,
adjusted EPS, adjusted gross profit, adjusted gross margins,
adjusted net earnings, EBITDA, adjusted EBITDA, adjusted cash
provided by operating activities, adjusted free cash flow, adjusted
SG&A as a percentage of total revenues, adjusted R&D as a
percentage of total revenues and adjusted effective tax rate are
presented in order to supplement investors' and other readers'
understanding and assessment of the financial performance of Mylan
N.V. ("Mylan" or the "Company"). Management uses these measures
internally for forecasting, budgeting, measuring its operating
performance, and incentive-based awards. In addition, primarily due
to acquisitions, Mylan believes that an evaluation of its ongoing
operations (and comparisons of its current operations with
historical and future operations) would be difficult if the
disclosure of its financial results were limited to financial
measures prepared only in accordance with U.S. GAAP. We
believe that non-GAAP financial measures are useful supplemental
information for our investors and when considered together with our
U.S. GAAP financial measures and the reconciliation to the most
directly comparable U.S. GAAP financial measure, provide a more
complete understanding of the factors and trends affecting our
operations. The financial performance of the Company is measured by
senior management, in part, using the adjusted metrics included
herein, along with other performance metrics. Management's annual
incentive compensation is derived, in part, based on the adjusted
EPS metric and the adjusted free cash flow metric. In addition, the
Company believes that including EBITDA and supplemental adjustments
applied in presenting adjusted EBITDA pursuant to our debt
agreements is appropriate to provide additional information to
investors to demonstrate the Company's ability to comply with
financial debt covenants (which are calculated using a measure
similar to adjusted EBITDA) and assess the Company's ability to
incur additional indebtedness. We also report sales performance
using the non-GAAP financial measure of "constant currency" total
revenues and third party net sales. This measure provides
information on the change in net sales assuming that foreign
currency exchange rates had not changed between the prior and
current period. The comparisons presented as constant currency
rates reflect comparative local currency sales at the prior year's
foreign exchange rates. We routinely evaluate our third party net
sales performance at constant currency so that sales results can be
viewed without the impact of foreign currency exchange rates,
thereby facilitating a period-to-period comparison of our
operational activities, and we believe that this presentation also
provides useful information to investors for the same reason. The
"Summary of Total Revenues by Segment" table below compares third
party net sales on an actual and constant currency basis for each
reportable segment for the three months ended March 31, 2017
and 2016. Also, other than as described, set forth below, Mylan has
provided reconciliations of such non-GAAP financial measures to the
most directly comparable U.S. GAAP financial measures. Investors
and other readers are encouraged to review the related U.S. GAAP
financial measures and the reconciliations of the non-GAAP measures
to their most directly comparable U.S. GAAP measures set forth
below, and investors and other readers should consider non-GAAP
measures only as supplements to, not as substitutes for or as
superior measures to, the measures of financial performance
prepared in accordance with U.S. GAAP.
For additional information regarding the components and uses of
Non-GAAP financial measures refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations-- Use of
Non-GAAP Financial Measures section of Mylan's Quarterly Report on
Form 10-Q for the three months ended March 31, 2017.
Mylan is not providing forward looking guidance for U.S. GAAP
reported financial measures or a quantitative reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable U.S. GAAP measure because it is unable to predict with
reasonable certainty the ultimate outcome of certain significant
items without unreasonable effort. These items include, but are not
limited to, acquisition-related expenses including those related to
the Meda transaction, restructuring expenses, asset impairments,
litigation settlements and other contingencies, including changes
to contingent consideration and certain other gains or losses.
These items are uncertain, depend on various factors, and could
have a material impact on U.S. GAAP reported results for the
guidance period. With respect to the target of $6.00 in adjusted EPS in 2018, it does not
represent Company guidance and the Company is not providing a U.S.
GAAP target or reconciliation because the Company has not
quantified all future amounts, including U.S. GAAP amounts, related
to this target.
Reconciliation of Adjusted Net Earnings and Adjusted
EPS
Below is a reconciliation of U.S. GAAP net earnings and U.S.
GAAP EPS to adjusted net earnings and adjusted EPS for the three
months ended March 31, 2017 compared to the prior year period:
|
Three Months Ended
March 31,
|
(In millions,
except per share amounts)
|
2017
|
|
2016
|
U.S. GAAP net
earnings and U.S. GAAP diluted earnings per share
|
$
|
66.4
|
|
|
$
|
0.12
|
|
|
$
|
13.9
|
|
|
$
|
0.03
|
|
Purchase accounting
related amortization (primarily included in cost of
sales)
|
349.2
|
|
|
|
|
249.3
|
|
|
|
Litigation
settlements, net
|
(0.9)
|
|
|
|
|
(1.5)
|
|
|
|
Interest expense
(primarily related to clean energy investment financing)
|
7.3
|
|
|
|
|
5.7
|
|
|
|
Accretion of
contingent consideration liability and other fair value
adjustments
|
17.7
|
|
|
|
|
10.0
|
|
|
|
Clean energy
investments pre-tax loss (a)
|
22.3
|
|
|
|
|
25.5
|
|
|
|
Acquisition related
costs (primarily included in SG&A and cost of sales)
(b)
|
31.3
|
|
|
|
|
53.2
|
|
|
|
Restructuring related
costs (c)
|
23.1
|
|
|
|
|
9.8
|
|
|
|
Other special items
included in:
|
|
|
|
|
|
|
|
Cost of
sales
|
7.1
|
|
|
|
|
13.8
|
|
|
|
Research and
development expense (d)
|
65.1
|
|
|
|
|
66.1
|
|
|
|
Selling, general and
administrative expense
|
5.9
|
|
|
|
|
6.8
|
|
|
|
Other expense,
net
|
6.1
|
|
|
|
|
2.2
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(100.8)
|
|
|
|
|
(68.5)
|
|
|
|
Adjusted net earnings
and adjusted EPS
|
$
|
499.8
|
|
|
$
|
0.93
|
|
|
$
|
386.3
|
|
|
$
|
0.76
|
|
Weighted average
diluted ordinary shares outstanding
|
536.9
|
|
|
|
|
509.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant items for
the three months ended March 31, 2017 include the
following:
|
(a)
|
Adjustment represents
exclusion of the pre-tax loss related to Mylan's clean energy
investments and related
financing, excluding interest expense, the activities of which
qualify for income tax credits under Section 45 of
the U.S. Internal Revenue Code of 1986, as amended (the "Code").
The amount is included in other expense,
net in the Condensed Consolidated Statements of
Operations.
|
(b)
|
Acquisition related
costs primarily relate to acquisition and integration activities,
including ongoing activities.
Included in SG&A for the three months ended March 31, 2017
is approximately $24.1 million, primarily related
to consulting, professional and legal costs.
|
(c)
|
Of the total amount,
approximately $12.9 million is included in cost of sales, $1.3
million is included in R&D and
$8.9 million is included in SG&A.
|
(d)
|
R&D expense
includes an upfront expense of approximately $50 million related to
a joint development and
marketing agreement for a respiratory product, $5.8 million related
to Momenta collaboration expense and other
similar smaller agreements.
|
Below is a reconciliation of U.S. GAAP net earnings to EBITDA
and adjusted EBITDA for the three months ended March 31, 2017
compared to the prior year period (in millions):
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP net
earnings
|
$
|
66.4
|
|
|
$
|
13.9
|
|
Add
adjustments:
|
|
|
|
Net contribution
attributable to equity method investments
|
33.2
|
|
|
30.9
|
|
Income tax
provision
|
5.2
|
|
|
5.1
|
|
Interest
expense
|
138.2
|
|
|
70.3
|
|
Depreciation and
amortization
|
415.5
|
|
|
297.1
|
|
EBITDA
|
$
|
658.5
|
|
|
$
|
417.3
|
|
Add/(deduct)
adjustments:
|
|
|
|
Share-based
compensation expense
|
23.1
|
|
|
26.5
|
|
Litigation
settlements and other contingencies, net
|
9.0
|
|
|
(1.5)
|
|
Restructuring & other special
items
|
122.1
|
|
|
141.4
|
|
Adjusted
EBITDA
|
$
|
812.7
|
|
|
$
|
583.7
|
|
About Mylan
Mylan is a global pharmaceutical company committed to setting
new standards in healthcare. Working together around the world to
provide 7 billion people access to high quality medicine, we
innovate to satisfy unmet needs; make reliability and service
excellence a habit; do what's right, not what's easy; and impact
the future through passionate global leadership. We market a
growing portfolio of more than 7,500 products around the world,
including antiretroviral therapies on which approximately 50% of
people being treated for HIV/AIDS in the developing world depend.
We market our products in more than 165 countries and territories.
We are one of the world's largest producers of active
pharmaceutical ingredients. Every member of our more than
35,000-strong workforce is dedicated to creating better health for
a better world, one person at a time. Learn more at mylan.com.
FORWARD-LOOKING STATEMENTS
This release contains "forward-looking statements." These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include, without limitation, that
Mylan's results during the first quarter marked a great start to
what it believes will be another year of strong financial
performance; Mylan remains confident in its guidance and business
outlook for the full year 2017, including its adjusted EPS guidance
range; Mylan's overall expectations for the global pricing
environment are unchanged and Mylan still predicts mid-single digit
price-erosion globally for the year; Mylan remains committed to
deleveraging in 2017; and with its financial flexibility Mylan
continues to execute on its business plan, including business
development activities, while maintaining its commitment to an
investment grade credit rating. These may often be identified by
the use of words such as "will," "may," "could," "should," "would,"
"project," "believe," "anticipate," "expect," "plan," "estimate,"
"forecast," "potential," "intend," "continue," "target," and
variations of these words or comparable words. Because
forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to: the ability to meet expectations regarding
the accounting and tax treatments of Mylan's acquisition (the "EPD
Transaction") of Mylan Inc. and Abbott Laboratories' non-U.S.
developed markets specialty and branded generics business (the "EPD
Business") and the acquisition of Meda by Mylan (the "Meda
Transaction"); changes in relevant tax and other laws, including
but not limited to changes in the U.S. tax code and healthcare and
pharmaceutical laws and regulations in the U.S. and abroad; actions
and decisions of healthcare and pharmaceutical regulators; the
integration of the EPD Business and Meda being more difficult,
time-consuming, or costly than expected; operating costs, customer
loss, and business disruption (including, without limitation,
difficulties in maintaining relationships with employees,
customers, clients, or suppliers) being greater than expected
following the EPD Transaction and the Meda Transaction; the
retention of certain key employees of the EPD Business and Meda
being difficult; the possibility that Mylan may be unable to
achieve expected synergies and operating efficiencies in connection
with the EPD Transaction, the Meda Transaction, and the
December 2016 announced restructuring
program in certain locations, within the expected time-frames or at
all and to successfully integrate the EPD Business and Meda; with
respect to the Company agreeing to the terms of a $465 million settlement with the U.S. Department
of Justice and other government agencies related to the
classification of the EpiPen® Auto-Injector and EpiPen Jr®
Auto-Injector (collectively, "EpiPen® Auto-Injector") for purposes
of the Medicaid Drug Rebate Program, the inability or unwillingness
on the part of any of the parties to finalize the settlement, any
legal or regulatory challenges to the settlement, and any failure
by third parties to comply with their contractual obligations;
expected or targeted future financial and operating performance and
results; the capacity to bring new products to market, including
but not limited to where Mylan uses its business judgment and
decides to manufacture, market, and/or sell products, directly or
through third parties, notwithstanding the fact that allegations of
patent infringement(s) have not been finally resolved by the courts
(i.e., an "at-risk launch"); any regulatory, legal, or other
impediments to Mylan's ability to bring new products, including but
not limited to generic Advair, to market; success of clinical
trials and Mylan's ability to execute on new product opportunities,
including but not limited to generic Advair; any changes in or
difficulties with our inventory of, and our ability to manufacture
and distribute, the EpiPen® Auto-Injector to meet anticipated
demand; the potential impact of any change in patient access to the
EpiPen® Auto-Injector and the introduction of a generic version of
the EpiPen® Auto-Injector; the scope, timing, and outcome of any
ongoing legal proceedings, including government investigations, and
the impact of any such proceedings on financial condition, results
of operations, and/or cash flows; the ability to protect
intellectual property and preserve intellectual property rights;
the effect of any changes in customer and supplier relationships
and customer purchasing patterns; the ability to attract and retain
key personnel; changes in third-party relationships; the impact of
competition; changes in the economic and financial conditions of
the businesses of Mylan; the inherent challenges, risks, and costs
in identifying, acquiring, and integrating complementary or
strategic acquisitions of other companies, products, or assets and
in achieving anticipated synergies; uncertainties and matters
beyond the control of management; and inherent uncertainties
involved in the estimates and judgments used in the preparation of
financial statements, and the providing of estimates of financial
measures, in accordance with U.S. GAAP and related standards or on
an adjusted basis. For more detailed information on the risks and
uncertainties associated with Mylan's business activities, see the
risks described in Mylan's Annual Report on Form 10-K for the year
ended December 31, 2016, as amended,
and our other filings with the Securities and Exchange Commission
(the "SEC"). You can access Mylan's filings with the SEC through
the SEC website at www.sec.gov, and Mylan strongly encourages you
to do so. Mylan undertakes no obligation to update any statements
herein for revisions or changes after the date of this release.
Mylan N.V. and
Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(Unaudited; in
millions, except per share amounts)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
Net sales
|
$
|
2,687.4
|
|
|
$
|
2,176.1
|
|
Other
revenues
|
32.1
|
|
|
15.2
|
|
Total
revenues
|
2,719.5
|
|
|
2,191.3
|
|
Cost of
sales
|
1,634.5
|
|
|
1,284.3
|
|
Gross
profit
|
1,085.0
|
|
|
907.0
|
|
Operating
expenses:
|
|
|
|
Research and
development
|
217.5
|
|
|
253.6
|
|
Selling, general and
administrative
|
631.3
|
|
|
549.3
|
|
Litigation
settlements and other contingencies, net
|
9.0
|
|
|
(1.5)
|
|
Total operating
expenses
|
857.8
|
|
|
801.4
|
|
Earnings from
operations
|
227.2
|
|
|
105.6
|
|
Interest
expense
|
138.2
|
|
|
70.3
|
|
Other expense,
net
|
17.4
|
|
|
16.3
|
|
Earnings before
income taxes
|
71.6
|
|
|
19.0
|
|
Income tax
provision
|
5.2
|
|
|
5.1
|
|
Net
earnings
|
$
|
66.4
|
|
|
$
|
13.9
|
|
Earnings per ordinary
share:
|
|
|
|
Basic
|
$
|
0.12
|
|
|
$
|
0.03
|
|
Diluted
|
$
|
0.12
|
|
|
$
|
0.03
|
|
Weighted average
ordinary shares outstanding:
|
|
|
|
Basic
|
534.5
|
|
|
489.8
|
|
Diluted
|
536.9
|
|
|
509.6
|
|
Mylan N.V. and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited; in
millions)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
723.8
|
|
|
$
|
998.8
|
|
Accounts receivable,
net
|
2,872.0
|
|
|
3,310.9
|
|
Inventories
|
2,547.8
|
|
|
2,456.4
|
|
Prepaid expenses and
other current assets
|
921.9
|
|
|
756.4
|
|
Total current
assets
|
7,065.5
|
|
|
7,522.5
|
|
Intangible assets,
net
|
14,370.0
|
|
|
14,447.8
|
|
Goodwill
|
9,394.1
|
|
|
9,231.9
|
|
Other non-current
assets
|
3,443.0
|
|
|
3,524.0
|
|
Total
assets
|
$
|
34,272.6
|
|
|
$
|
34,726.2
|
|
LIABILITIES AND
EQUITY
|
Liabilities
|
|
|
|
Current portion of
long-term debt and other long-term obligations
|
$
|
294.4
|
|
|
$
|
290.0
|
|
Other current
liabilities
|
4,229.8
|
|
|
4,750.7
|
|
Long-term
debt
|
14,700.8
|
|
|
15,202.9
|
|
Other non-current
liabilities
|
3,391.6
|
|
|
3,365.0
|
|
Total
liabilities
|
22,616.6
|
|
|
23,608.6
|
|
Noncontrolling
interest
|
—
|
|
|
1.4
|
|
Mylan N.V.
shareholders' equity
|
11,656.0
|
|
|
11,116.2
|
|
Total liabilities and
equity
|
$
|
34,272.6
|
|
|
$
|
34,726.2
|
|
Mylan N.V. and
Subsidiaries
|
Reconciliation of
Non-GAAP Financial Measures
|
(Unaudited; in
millions)
|
|
Summary of Total
Revenues by Segment
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
Currency
Impact (1)
|
|
2017
Constant
Currency
Revenues
|
|
Constant
Currency %
Change (2)
|
Third party net
sales
|
|
|
|
|
|
|
|
|
|
|
|
North America
(3)
|
$
|
1,214.9
|
|
|
$
|
1,157.5
|
|
|
5
|
%
|
|
$
|
(2.2)
|
|
|
$
|
1,212.7
|
|
|
5
|
%
|
Europe
(3)
|
892.0
|
|
|
584.3
|
|
|
53
|
%
|
|
24.3
|
|
|
916.3
|
|
|
57
|
%
|
Rest of World
(3)
|
580.5
|
|
|
434.3
|
|
|
34
|
%
|
|
(12.7)
|
|
|
567.8
|
|
|
31
|
%
|
Total third party net
sales (3)
|
2,687.4
|
|
|
2,176.1
|
|
|
23
|
%
|
|
9.4
|
|
|
2,696.8
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other third party
revenues
|
32.1
|
|
|
15.2
|
|
|
111
|
%
|
|
0.2
|
|
|
32.3
|
|
|
113
|
%
|
Consolidated total
revenues
|
$
|
2,719.5
|
|
|
$
|
2,191.3
|
|
|
24
|
%
|
|
$
|
9.6
|
|
|
$
|
2,729.1
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Currency impact is
shown as unfavorable (favorable).
|
(2)
|
The constant currency
percentage change is derived by translating third party net sales
or revenues for the current period at prior year
comparative period exchange rates, and in doing so shows the
percentage change from 2017 constant currency third party net sales
or
revenues to the corresponding amount in the prior year.
|
(3)
|
Effective October 1,
2016, the Company expanded its reportable segments as follows:
North America, Europe and Rest of World. As a result,
the amounts previously reported under the Specialty segment have
been recast to North America and amounts related to Brazil are
included
in Rest of World for all periods presented.
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP cost of
sales
|
$
|
1,634.5
|
|
|
$
|
1,284.3
|
|
Deduct:
|
|
|
|
Purchase accounting
amortization and other related items
|
(343.3)
|
|
|
(243.6)
|
|
Acquisition related
costs
|
(5.9)
|
|
|
(18.5)
|
|
Restructuring related
costs
|
(12.9)
|
|
|
(1.4)
|
|
Other special
items
|
(7.1)
|
|
|
(13.8)
|
|
Adjusted cost of
sales
|
$
|
1,265.3
|
|
|
$
|
1,007.0
|
|
|
|
|
|
Adjusted gross profit
(a)
|
$
|
1,454.2
|
|
|
$
|
1,184.3
|
|
|
|
|
|
Adjusted gross margin
(a)
|
53
|
%
|
|
54
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP
R&D
|
$
|
217.5
|
|
|
$
|
253.6
|
|
Deduct:
|
|
|
|
Acquisition related
costs
|
(0.3)
|
|
|
(0.1)
|
|
Restructuring related
costs
|
(1.3)
|
|
|
—
|
|
Other special
items
|
(65.1)
|
|
|
(66.1)
|
|
Adjusted
R&D
|
$
|
150.8
|
|
|
$
|
187.4
|
|
|
|
|
|
Adjusted R&D as %
of total revenues
|
6
|
%
|
|
9
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP
SG&A
|
$
|
631.3
|
|
|
$
|
549.3
|
|
Deduct:
|
|
|
|
Acquisition related
costs
|
(24.1)
|
|
|
(35.7)
|
|
Restructuring related
costs
|
(8.9)
|
|
|
—
|
|
Purchase accounting
amortization and other related items
|
(0.2)
|
|
|
—
|
|
Other special
items
|
(5.9)
|
|
|
(6.8)
|
|
Adjusted
SG&A
|
$
|
592.2
|
|
|
$
|
506.8
|
|
|
|
|
|
Adjusted SG&A as
% of total revenues
|
22
|
%
|
|
23
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP total
operating expenses
|
$
|
857.8
|
|
|
$
|
801.4
|
|
(Deduct) /
Add:
|
|
|
|
Litigation
settlements and other contingencies, net
|
(9.0)
|
|
|
1.5
|
|
R&D
adjustments
|
(66.7)
|
|
|
(66.2)
|
|
SG&A
adjustments
|
(39.1)
|
|
|
(42.5)
|
|
Adjusted total
operating expenses
|
$
|
743.0
|
|
|
$
|
694.2
|
|
|
|
|
|
Adjusted earnings
from operations (b)
|
$
|
711.2
|
|
|
$
|
490.1
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP interest
expense
|
$
|
138.2
|
|
|
$
|
70.3
|
|
Deduct:
|
|
|
|
Interest expense
related to clean energy investments (c)
|
(3.3)
|
|
|
(3.8)
|
|
Accretion of
contingent consideration liability
|
(7.8)
|
|
|
(10.0)
|
|
Acquisition related
costs
|
(0.2)
|
|
|
(4.3)
|
|
Other special
items
|
(2.0)
|
|
|
(1.9)
|
|
Adjusted interest
expense
|
$
|
124.9
|
|
|
$
|
50.3
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP other
expense, net
|
$
|
17.4
|
|
|
$
|
16.3
|
|
Add:
|
|
|
|
Clean energy
investments pre-tax loss
|
(22.3)
|
|
|
(25.5)
|
|
Purchase accounting
related amortization
|
(5.7)
|
|
|
(5.7)
|
|
Net loss on Sagent
Agila joint venture termination
|
(5.7)
|
|
|
—
|
|
Acquisition related
costs
|
(0.8)
|
|
|
(3.0)
|
|
Other
items
|
(2.3)
|
|
|
(2.2)
|
|
Adjusted other
income
|
$
|
(19.4)
|
|
|
$
|
(20.1)
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP earnings
before income taxes
|
$
|
71.6
|
|
|
$
|
19.0
|
|
Total pre tax
non-GAAP adjustments
|
534.3
|
|
|
441.0
|
|
Adjusted earnings
before income taxes
|
$
|
605.9
|
|
|
$
|
460.0
|
|
|
|
|
|
U.S. GAAP income
tax provision
|
$
|
5.2
|
|
|
$
|
5.1
|
|
Adjusted tax
expense
|
100.8
|
|
|
68.5
|
|
Adjusted income tax
provision
|
$
|
106.0
|
|
|
$
|
73.6
|
|
|
|
|
|
Adjusted effective
tax rate
|
17.5
|
%
|
|
16.0
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
U.S. GAAP net cash
provided by operating activities
|
$
|
452.9
|
|
|
$
|
80.5
|
|
Add:
|
|
|
|
Restructuring related
costs
|
55.2
|
|
|
—
|
|
Acquisition related
costs
|
22.9
|
|
|
61.5
|
|
R&D
expense
|
5.0
|
|
|
60.0
|
|
Adjusted cash
provided by operating activities
|
$
|
536.0
|
|
|
$
|
202.0
|
|
|
|
|
|
Deduct:
|
|
|
|
Capital
expenditures
|
(58.4)
|
|
|
(51.8)
|
|
Adjusted free cash
flow
|
$
|
477.6
|
|
|
$
|
150.2
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
U.S. GAAP gross
profit is calculated as U.S. GAAP total revenues less U.S. GAAP
cost of sales. U.S. GAAP gross margin is calculated as
U.S. GAAP gross profit divided by U.S. GAAP total revenues.
Adjusted gross profit is calculated as total revenues less adjusted
cost of
sales. Adjusted gross margin is calculated as adjusted gross profit
divided by total revenues.
|
(b)
|
U.S. GAAP earnings
from operations is calculated as U.S. GAAP gross profit less U.S.
GAAP total operating expenses. Adjusted earnings
from operations is calculated as adjusted gross profit less
adjusted total operating expenses.
|
(c)
|
Adjustment represents
exclusion of activity related to Mylan's clean energy investments,
the activities of which qualify for income tax credits under
section 45 of the Code.
|
Combined Twelve Months Ended March 31,
2017 Debt-to-Adjusted EBITDA and Net Debt-to-Adjusted
EBITDA
The stated historical non-GAAP financial measure, combined for
the twelve months ended March 31,
2017 adjusted EBITDA, is based on the sum of (i)
$3,906.9 million of adjusted EBITDA
(unaudited) for Mylan and (ii) $207.8
million of adjusted EBITDA (unaudited) for the period of
January 1, 2016 to the date of
acquisition for Meda and the Topicals Business. The stated measures
represent an aggregation of Mylan and Renaissance figures which are
derived from financial information prepared in accordance with U.S.
GAAP and Meda figures derived from financial information prepared
in accordance with IFRS as issued by the IASB and does not reflect
pro forma adjustments (including the elimination of transactions
between Mylan and Meda and Mylan and Renaissance).
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
March 31,
2017
|
|
March 31,
2017
|
Mylan N.V. adjusted
EBITDA, as reported
|
$
|
821.4
|
|
|
$
|
1,060.9
|
|
|
$
|
1,211.9
|
|
|
$
|
812.7
|
|
|
$
|
3,906.9
|
|
Pro-forma adjusted
EBITDA from acquisitions
|
|
|
|
|
|
|
|
|
207.8
|
|
Total adjusted
EBITDA
|
|
|
|
|
|
|
|
|
$
|
4,114.7
|
|
|
|
|
|
|
|
|
|
|
|
Notional
debt
|
|
|
|
|
|
|
|
|
$
|
15,018.0
|
|
Short-term borrowings
and capital leases
|
|
|
|
|
|
|
|
|
42.3
|
|
Total debt
|
|
|
|
|
|
|
|
|
$
|
15,060.3
|
|
Less: cash and cash
equivalents
|
|
|
|
|
|
|
|
|
(723.8)
|
|
Total net
debt
|
|
|
|
|
|
|
|
|
$
|
14,336.5
|
|
|
|
|
|
|
|
|
|
|
|
Debt-to-adjusted
EBITDA leverage ratio
|
|
|
|
|
|
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
Net debt-to-adjusted
EBITDA leverage ratio
|
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term average debt-to-adjusted EBITDA leverage target of
~3.0x
The stated forward-looking non-GAAP financial measure, targeted
long term average leverage of ~3.0x net debt-to-adjusted EBITDA, is
based on the ratio of (i) targeted long-term average debt, and (ii)
targeted long-term adjusted EBITDA. However, the Company has not
quantified future amounts to develop the target but has stated its
goal to manage long-term average debt and adjusted earnings and
EBITDA over time in order to generally maintain the target. This
target does not reflect Company guidance.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mylan-reports-first-quarter-2017-results-300454888.html
SOURCE Mylan N.V.