HERTFORDSHIRE, England and
PITTSBURGH, May 3, 2016
/PRNewswire/ -- Mylan N.V. (NASDAQ, TASE: MYL) today announced
its financial results for the quarter ended March 31,
2016.
Financial Highlights
- Total revenues of $2.19 billion,
up 19% on a constant currency basis compared to the prior year
period (up 17% on a U.S. GAAP basis)
- Generics segment third party net sales of $1.93 billion, up 19% on a constant currency
basis (up 17% on a U.S. GAAP basis). All regions in the Generics
segment showed positive year-over-year growth.
- Specialty segment third party net sales of $247.9 million, up 17%
- Adjusted diluted earnings per ordinary share ("EPS") of
$0.76, up 9% compared to the prior
year period; U.S. GAAP diluted EPS of $0.03, down 77% as a result of higher operating
expenses, including amortization expense related to acquisitions
completed during 2015
- Reaffirms 2016 total revenues guidance of $10.5 billion to $11.5 billion, the midpoint of
which represents an increase of 16% versus 2015, and 2016 adjusted
diluted EPS guidance of $4.85 to
$5.15, the midpoint of which represents an increase of 16%
versus 2015 (U.S. GAAP diluted EPS of $2.38
to $2.43, the midpoint of which represents an increase of
41% versus 2015)
Mylan CEO Heather Bresch
commented, "We are off to a great start in 2016 with our strong
first quarter results delivering year-over-year constant currency
total revenues growth of 19% and adjusted diluted EPS growth of 9%.
We showed again the strength and resilience of Mylan's diverse,
global platform, with double digit revenue growth in Europe, Rest of World and Specialty and high
single digit revenue growth in North
America. Based on our first quarter performance, we remain
highly confident in our guidance and our business outlook for the
full year 2016. Despite much external focus and discussion of the
pricing environment, consistent with our previously communicated
2016 guidance and given Mylan's position as a large-scale,
differentiated player, we continue to see nothing out of the
ordinary to change our generic pricing assumptions of low- to
mid-single digit erosion for the full year.
Almost a decade ago, we laid out our vision and strategy for
growth and our belief that it would come from both organic and
inorganic initiatives to create unmatched scale in manufacturing,
broad breadth in our product portfolio, and expansion across all
geographic territories - all with the aim of achieving our mission
of providing access to medicine to patients around the world. We
are excited about our pending acquisition of Meda, which will
further strengthen and diversify our business in terms of product
portfolio, customer channels, and geography, and position us for
continued growth and value creation over the near- and long-term. I
am pleased to note that Meda's Q1 2016 earnings results reported
this morning were in-line with our modeled expectations for the
business, and we remain fully committed to and look forward to
closing this transaction."
Total Revenues
|
Three Months
Ended
|
|
March
31,
|
(Unaudited; in
millions)
|
2016
|
|
2015
|
|
Percent
Change
|
Total
Revenues
|
$
|
2,191.3
|
|
|
$
|
1,871.7
|
|
|
17%
|
Generics Segment
Third Party Net Sales
|
1,928.2
|
|
|
1,643.5
|
|
|
17%
|
North
America*
|
919.7
|
|
|
855.0
|
|
|
8%
|
Europe
|
587.7
|
|
|
406.2
|
|
|
45%
|
Rest of
World*
|
420.8
|
|
|
382.3
|
|
|
10%
|
Specialty Third Party
Net Sales
|
247.9
|
|
|
211.1
|
|
|
17%
|
Other
Revenues
|
15.2
|
|
|
17.1
|
|
|
(11)%
|
*Beginning in the first quarter of 2016, the Company
reclassified sales from its Brazilian operation from the Rest of
World region to the North America
region. The amount reclassified for the three months ended
March 31, 2015 was approximately
$10.2 million.
Generics Segment Revenues
Generics segment third party net sales were
$1.93 billion for the quarter, an
increase of 17% when compared to the prior year period. When
translating third party net sales for the current quarter at prior
year comparative period exchange rates ("constant currency"), third
party net sales increased by 19%.
- Third party net sales from North
America were $919.7
million for the quarter, an increase of 8% when compared to
the prior year period. This increase was principally due to net
sales from products launched since April 1,
2015 ("new products"), and to a lesser extent, incremental
net sales from our established products. Factors offsetting this
increase were lower sales on existing products. Constant currency
third party net sales from North
America increased by 8%.
- Third party net sales from Europe were $587.7
million for the quarter, an increase of 45% when compared to
the prior year period. This increase was primarily the result of
incremental net sales from our established products as well as new
products. Higher volumes on existing products, primarily in
France, were offset by lower
pricing throughout Europe, due to
government-imposed pricing reductions and competitive market
conditions. Constant currency third party net sales from
Europe increased by 47%.
- Third party net sales from Rest of World were
$420.8 million for the quarter, an
increase of 10% when compared to the prior year period. This
increase was primarily driven by incremental net sales from
established products, net sales by Jai Pharma Limited (certain
female healthcare businesses acquired from Famy Care Limited), and
to a lesser extent, new product launches across the region. Higher
volumes in Japan and Australia also contributed to the increase.
These increases were partially offset by lower pricing throughout
the region and a decrease in third party net sales volumes from our
operations in India, in particular
the anti-retroviral ("ARV") franchise. Constant currency third
party net sales from Rest of World increased by 15%.
Specialty Segment Revenues
Specialty segment reported third party net sales
were $247.9 million for the quarter,
an increase of 17% when compared to the prior year period. This
increase was primarily the result of higher volumes of the
EpiPen® Auto-Injector and higher sales of the
Perforomist® Inhalation Solution.
Total Gross Profit
Adjusted gross profit was $1.18
billion and adjusted gross margins were 54% for the
quarter as compared to adjusted gross profit of $990.6 million and adjusted gross margins of 53%
in the comparable prior year period. The current quarter increase
was primarily due to the incremental contribution from established
products in the first quarter of 2016 as well as new product
introductions, partially offset by decreased margins on existing
products in North America. U.S.
GAAP gross profit was $907.0
million and $830.1 million for
the first quarter of 2016 and 2015, respectively. U.S. GAAP
gross margins were 41% and 44% in the first quarter of 2016 and
2015, respectively. The decrease in gross margins relates
principally to additional amortization expense related to
acquisitions completed during 2015.
Total Profitability
Adjusted earnings from operations for the quarter were
$490.1 million, up 14% from the
comparable prior year period. U.S. GAAP earnings from
operations were $105.6 million
for the quarter, a decrease of 34% from the comparable prior year
period. R&D expense on an adjusted basis increased
primarily as a result of the continued development of our
respiratory, insulin and biologics programs. U.S. GAAP
R&D expense also increased primarily as a result of an
upfront payment made to Momenta for $45
million related to the Company's collaboration agreement.
SG&A expense on a U.S. GAAP and adjusted basis primarily
increased due to the incremental expense related to the established
products.
EBITDA, which is defined as net earnings (excluding the
non-controlling interest and losses from equity method investees)
plus income taxes, interest expense, depreciation and amortization,
was $417.3 million for the quarter
ended March 31, 2016, and
$340.5 million for the comparable
prior year quarter. Adjusted net earnings attributable to Mylan
N.V. increased by $77.2 million
to $386.3 million compared to
$309.1 million for the prior year
comparable period. U.S. GAAP net earnings attributable to
Mylan N.V. decreased by $42.7
million to $13.9 million for
the quarter ended March 31, 2016, as
compared to $56.6 million for the
comparable prior year period. After adjusting for certain items as
further detailed in the reconciliation below, adjusted
EBITDA was $583.7 million for the
quarter ended March 31, 2016 and
$504.6 million for the comparable
prior year period. Adjusted diluted EPS increased 9% to
$0.76 compared
to $0.70 in the prior year comparable period. U.S.
GAAP diluted EPS decreased from $0.13 to $0.03 as a
result of higher operating expenses, including amortization expense
related to acquisitions completed during 2015.
Cash Flow
Adjusted cash provided by operating activities was
$202 million for the three months
ended March 31, 2016 compared to
$336 million for the comparable prior
year period. On a U.S. GAAP basis, net cash provided by
operating activities was $81
million for the three months ended March 31, 2016 compared to $267 million for the comparable prior year
period. Capital expenditures were approximately $52 million for the three months ended
March 31, 2016 as compared to
approximately $48 million for the
comparable prior year period. Adjusted free cash flow was
$150 million for the three months
ended March 31, 2016, compared to
$288 million in the prior year
period.
Conference Call
Mylan will host a conference call and live webcast, today,
May 3, 2016, at 10 am ET, in
conjunction with this release of its financial results. 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 to begin to register and download or install any necessary
software.
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 diluted EPS, adjusted cash provided by operating
activities, adjusted gross profit, adjusted gross margins, adjusted
earnings from operations, adjusted net earnings attributable to
Mylan N.V. ("Mylan" or the "Company"), constant currency total
revenues, constant currency third party net sales, EBITDA, adjusted
EBITDA, and adjusted free cash flow, are presented in order to
supplement investors' and other readers' understanding and
assessment of the Company's financial performance. Management uses
these measures internally for forecasting, budgeting and measuring
its operating performance. 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. 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 and the geographic regions within the Generics
segment for the three months ended March 31, 2016 and 2015.
Also, 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.
Below is a reconciliation of U.S. GAAP net earnings attributable
to Mylan N.V. and U.S. GAAP diluted EPS to adjusted net earnings
attributable to Mylan N.V. and adjusted diluted EPS for the three
months ended March 31, 2016 compared to the respective prior
year period (in millions, except per share amounts):
|
Three Months Ended
March 31,
|
|
2016
|
|
2015
|
U.S. GAAP net
earnings attributable to Mylan N.V. and U.S. GAAP diluted
EPS
|
$
|
13.9
|
|
|
$
|
0.03
|
|
|
$
|
56.6
|
|
|
$
|
0.13
|
|
Purchase accounting
related amortization (primarily included in cost of
sales)
|
249.3
|
|
|
|
|
144.0
|
|
|
|
Litigation
settlements, net
|
(1.5)
|
|
|
|
|
17.7
|
|
|
|
Interest expense
(a)
|
5.7
|
|
|
|
|
12.2
|
|
|
|
Non-cash accretion of
contingent consideration liability
|
10.0
|
|
|
|
|
9.2
|
|
|
|
Clean energy
investments pre-tax loss (a)
|
25.5
|
|
|
|
|
22.5
|
|
|
|
Acquisition related
costs (primarily included in cost of sales and selling, general and
administrative expense)
|
61.6
|
|
|
|
|
78.8
|
|
|
|
Restructuring and other special items included
in:
|
|
|
|
|
|
|
|
Cost of
sales
|
15.2
|
|
|
|
|
8.0
|
|
|
|
Research and
development expense (b)
|
66.1
|
|
|
|
|
17.9
|
|
|
|
Selling, general and
administrative expense
|
6.8
|
|
|
|
|
7.8
|
|
|
|
Other expense,
net
|
2.2
|
|
|
|
|
7.0
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(68.5)
|
|
|
|
|
(72.6)
|
|
|
|
Adjusted net earnings
attributable to Mylan N.V. and adjusted diluted EPS
|
$
|
386.3
|
|
|
$
|
0.76
|
|
|
$
|
309.1
|
|
|
$
|
0.70
|
|
Weighted average
diluted ordinary shares outstanding
|
509.6
|
|
|
|
|
443.8
|
|
|
|
|
|
|
|
(a)
|
Adjustment represents
exclusion of the pre-tax loss related to Mylan's clean energy
investments and related financing, the activities of which qualify
for income tax credits under Section 45 of the 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)
|
Research and
development expense includes a $45 million upfront payment to
Momenta and $15 million of milestone payments to Theravance
Biopharma.
|
Below is a reconciliation of U.S. GAAP net earnings attributable
to Mylan N.V. to EBITDA and adjusted EBITDA for the quarter ended
March 31, 2016 compared to the respective prior year period
(in millions):
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP net
earnings attributable to Mylan N.V.
|
$
|
13.9
|
|
|
$
|
56.6
|
|
Add
adjustments:
|
|
|
|
Net contribution
attributable to the noncontrolling interest and equity method
investments
|
30.9
|
|
|
24.7
|
|
Income
taxes
|
5.1
|
|
|
4.7
|
|
Interest
expense
|
70.3
|
|
|
79.5
|
|
Depreciation and
amortization
|
297.1
|
|
|
175.0
|
|
EBITDA
|
$
|
417.3
|
|
|
$
|
340.5
|
|
Add / (deduct)
adjustments:
|
|
|
|
Share-based
compensation expense
|
26.5
|
|
|
19.2
|
|
Litigation
settlements, net
|
(1.5)
|
|
|
17.7
|
|
Restructuring & other special
items
|
141.4
|
|
|
127.2
|
|
Adjusted
EBITDA
|
$
|
583.7
|
|
|
$
|
504.6
|
|
About Mylan
Mylan is a global pharmaceutical company committed to setting
new standards in health care. 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 offer a growing
portfolio of around 1,400 generic pharmaceuticals and several brand
medications. In addition, we offer a wide range of antiretroviral
therapies, upon which nearly 50% of HIV/AIDS patients in developing
countries depend. We also operate one of the largest active
pharmaceutical ingredient manufacturers and currently market
products in approximately 165 countries and territories. Our
workforce includes nearly 35,000 people dedicated to improving the
customer experience and increasing pharmaceutical access to
consumers around the world. But don't take our word for it. See for
yourself. See inside. 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,
statements about the proposed acquisition of Meda AB (publ.)
("Meda") by Mylan (the "Meda Transaction"), Mylan's related public
offer to the shareholders of Meda to acquire all of the outstanding
shares of Meda (the "Offer"), Mylan's acquisition of Mylan Inc. and
the EPD Business (the "EPD Transaction"), the benefits and
synergies of the EPD Transaction and the Meda Transaction, future
opportunities for Mylan, Meda, or the combined company and products
and any other statements regarding Mylan's, Meda's or the combined
company's future operations, anticipated business levels, future
earnings, planned activities, anticipated growth, market
opportunities, strategies, competition, and other expectations and
targets for future periods. 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: uncertainties related to the Meda
Transaction, including as to the timing of the Meda Transaction,
uncertainties as to whether Mylan will be able to complete the Meda
Transaction, the possibility that competing offers will be made,
the possibility that certain conditions to the completion of the
Offer will not be satisfied, and the possibility that Mylan will be
unable to obtain regulatory approvals for the Meda Transaction or
be required, as a condition to obtaining regulatory approvals, to
accept conditions that could reduce the anticipated benefits of the
Meda Transaction; the ability to meet expectations regarding the
accounting and tax treatments of the EPD Transaction and 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; 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 and the Meda Transaction within the
expected time-frames or at all and to successfully integrate the
EPD Business and Meda; 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 to market; success of clinical trials and Mylan's
ability to execute on new product opportunities; 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 scope, timing, and outcome of any ongoing legal
proceedings 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, Meda or the
combined company; 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, 2015, as amended,
and its other filings with the Securities and Exchange Commission
("SEC"). These risks and uncertainties also include those risks and
uncertainties that are discussed in the offer document that has
been filed with the Swedish Financial Supervisory Authority
("SFSA") and will be published by Mylan upon approval by the SFSA
(the "Offer Document"), the Registration Statement on Form S-4
filed with the SEC on April 11, 2016
(as amended from time to time, the "Registration Statement") and
the EU Prospectus that has been filed with the Netherlands
Authority for the Financial Markets ("AFM") and will be published
by Mylan upon approval by the AFM (the "EU Prospectus"). 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.
ADDITIONAL INFORMATION
In connection with the Offer, the Offer Document has been filed
with the SFSA and will be published by Mylan upon approval by the
SFSA. In addition, Mylan has filed certain materials with the SEC,
including, among other materials, the Registration Statement. The
EU Prospectus has been filed with the AFM and will be published by
Mylan upon approval by the AFM. This release is not intended to be,
and is not, a substitute for such documents or for any other
document that Mylan may file with the SFSA, the SEC, the AFM or any
other competent EU authority in connection with the Offer. This
release contains advertising materials (reclame-uitingen) in
connection with the Offer as referred to in Section 5:20 of the
Dutch Financial Supervision Act (Wet op het financieel
toezicht). INVESTORS AND SECURITYHOLDERS OF MEDA ARE URGED TO
READ ANY DOCUMENTS FILED WITH THE SFSA, THE SEC AND THE AFM OR ANY
OTHER COMPETENT EU AUTHORITY CAREFULLY AND IN THEIR ENTIRETY BEFORE
MAKING AN INVESTMENT DECISION BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT MYLAN, MEDA AND THE OFFER. Such documents are or
upon publication will be available free of charge through the
website maintained by the SEC at www.sec.gov, on Mylan's website at
medatransaction.mylan.com or, to the extent filed with the AFM,
through the website maintained by the AFM at www.afm.nl, or by
directing a request to Mylan at +1 724-514-1813 or
investor.relations@mylan.com. Any materials filed by Mylan with the
SFSA, the SEC, the AFM or any other competent EU authority that are
required to be mailed to Meda shareholders will also be mailed to
such shareholders.
FURTHER INFORMATION
The distribution of this release and any related Offer
documentation in certain jurisdictions may be restricted or
affected by the laws of such jurisdictions. Accordingly, copies of
this release are not being, and must not be, mailed or otherwise
forwarded, distributed or sent in, into or from any such
jurisdiction. Therefore, persons who receive this release
(including, without limitation, nominees, trustees and custodians)
and are subject to the laws of any such jurisdiction will need to
inform themselves about, and observe, any applicable restrictions
or requirements. Any failure to do so may constitute a violation of
the securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, Mylan disclaims any responsibility or
liability for the violations of any such restrictions by any
person.
The acceptance period for the Offer for shares of Meda described
in this release has not commenced.
Mylan N.V. and
Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited; in
millions, except per share amounts)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
Net sales
|
$
|
2,176.1
|
|
|
$
|
1,854.6
|
|
Other
revenues
|
15.2
|
|
|
17.1
|
|
Total
revenues
|
2,191.3
|
|
|
1,871.7
|
|
Cost of
sales
|
1,284.3
|
|
|
1,041.6
|
|
Gross
profit
|
907.0
|
|
|
830.1
|
|
Operating
expenses:
|
|
|
|
Research and
development
|
253.6
|
|
|
169.9
|
|
Selling, general and
administrative
|
549.3
|
|
|
483.2
|
|
Litigation
settlements, net
|
(1.5)
|
|
|
17.7
|
|
Total operating
expenses
|
801.4
|
|
|
670.8
|
|
Earnings from
operations
|
105.6
|
|
|
159.3
|
|
Interest
expense
|
70.3
|
|
|
79.5
|
|
Other expense,
net
|
16.3
|
|
|
18.5
|
|
Earnings before
income taxes
|
19.0
|
|
|
61.3
|
|
Income tax
provision
|
5.1
|
|
|
4.7
|
|
Net earnings
attributable to Mylan N.V. ordinary shareholders
|
$
|
13.9
|
|
|
$
|
56.6
|
|
Earnings per ordinary
share attributable to Mylan N.V. ordinary shareholders:
|
|
|
|
Basic
|
$
|
0.03
|
|
|
$
|
0.14
|
|
Diluted
|
$
|
0.03
|
|
|
$
|
0.13
|
|
Weighted average
ordinary shares outstanding:
|
|
|
|
Basic
|
489.8
|
|
|
418.0
|
|
Diluted
|
509.6
|
|
|
443.8
|
|
Mylan N.V. and
Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited; in
millions)
|
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
1,199.4
|
|
|
$
|
1,236.0
|
|
Accounts receivable,
net
|
|
|
2,587.4
|
|
|
2,689.1
|
|
Inventories
|
|
|
2,144.1
|
|
|
1,951.0
|
|
Other current
assets
|
|
|
696.7
|
|
|
596.6
|
|
Total current
assets
|
|
|
6,627.6
|
|
|
6,472.7
|
|
Intangible assets,
net
|
|
|
7,278.4
|
|
|
7,221.9
|
|
Goodwill
|
|
|
5,566.9
|
|
|
5,380.1
|
|
Other non-current
assets
|
|
|
3,171.2
|
|
|
3,193.0
|
|
Total
assets
|
|
|
$
|
22,644.1
|
|
|
$
|
22,267.7
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
$
|
3,959.4
|
|
|
$
|
4,122.2
|
|
Long-term
debt
|
|
|
6,325.7
|
|
|
6,295.6
|
|
Other non-current
liabilities
|
|
|
2,084.1
|
|
|
2,084.1
|
|
Total
liabilities
|
|
|
12,369.2
|
|
|
12,501.9
|
|
Noncontrolling
interest
|
|
|
1.5
|
|
|
1.4
|
|
Mylan N.V.
shareholders' equity
|
|
|
10,273.4
|
|
|
9,764.4
|
|
Total liabilities and
equity
|
|
|
$
|
22,644.1
|
|
|
$
|
22,267.7
|
|
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,
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
Currency
Impact (1)
|
|
2016
Constant
Currency
Revenues (2)
|
|
%
Change
|
Generics:
|
|
|
|
|
|
|
|
|
|
|
|
Third party net
sales
|
|
|
|
|
|
|
|
|
|
|
|
North America
(3)
|
$
|
919.7
|
|
|
$
|
855.0
|
|
|
8
|
%
|
|
$
|
7.3
|
|
|
$
|
927.0
|
|
|
8
|
%
|
Europe
|
587.7
|
|
|
406.2
|
|
|
45
|
%
|
|
7.9
|
|
|
595.6
|
|
|
47
|
%
|
Rest of World
(3)
|
420.8
|
|
|
382.3
|
|
|
10
|
%
|
|
17.3
|
|
|
438.1
|
|
|
15
|
%
|
Total third party net
sales
|
1,928.2
|
|
|
1,643.5
|
|
|
17
|
%
|
|
32.5
|
|
|
1,960.7
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other third party
revenues
|
8.6
|
|
|
11.6
|
|
|
(26)
|
%
|
|
0.3
|
|
|
8.9
|
|
|
(24)
|
%
|
Total third party
revenues
|
1,936.8
|
|
|
1,655.1
|
|
|
17
|
%
|
|
32.8
|
|
|
1,969.6
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
sales
|
2.6
|
|
|
1.5
|
|
|
73
|
%
|
|
—
|
|
|
2.6
|
|
|
73
|
%
|
Generics total
revenues
|
1,939.4
|
|
|
1,656.6
|
|
|
17
|
%
|
|
32.8
|
|
|
1,972.2
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty:
|
|
|
|
|
|
|
|
|
|
|
|
Third party net
sales
|
247.9
|
|
|
211.1
|
|
|
17
|
%
|
|
—
|
|
|
247.9
|
|
|
17
|
%
|
Other third party
revenues
|
6.6
|
|
|
5.5
|
|
|
20
|
%
|
|
—
|
|
|
6.6
|
|
|
20
|
%
|
Total third party
revenues
|
254.5
|
|
|
216.6
|
|
|
17
|
%
|
|
—
|
|
|
254.5
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
sales
|
3.4
|
|
|
2.0
|
|
|
70
|
%
|
|
—
|
|
|
3.4
|
|
|
70
|
%
|
Specialty total
revenues
|
257.9
|
|
|
218.6
|
|
|
18
|
%
|
|
—
|
|
|
257.9
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of
intersegment sales
|
(6.0)
|
|
|
(3.5)
|
|
|
(71)
|
%
|
|
(0.1)
|
|
|
(6.1)
|
|
|
(74)
|
%
|
Consolidated total
revenues
|
$
|
2,191.3
|
|
|
$
|
1,871.7
|
|
|
17
|
%
|
|
$
|
32.7
|
|
|
$
|
2,224.0
|
|
|
19
|
%
|
|
|
(1)
|
Currency impact is
shown as unfavorable (favorable).
|
|
|
(2)
|
The constant currency
revenue change is derived by translating third party net sales for
the current period at prior year comparative period exchange
rates.
|
|
|
(3)
|
Beginning in the
first quarter of 2016, the Company reclassified sales from its
Brazilian operation from the Rest of World region to the North
America region.
The amount reclassified for the three months ended March 31, 2015
was approximately $10.2 million.
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP cost of
sales
|
$
|
1,284.3
|
|
|
$
|
1,041.6
|
|
Deduct:
|
|
|
|
Purchase accounting
related amortization
|
(243.6)
|
|
|
(140.2)
|
|
Acquisition related
costs
|
(18.5)
|
|
|
(12.3)
|
|
Restructuring &
other special items
|
(15.2)
|
|
|
(8.0)
|
|
Adjusted cost of
sales
|
$
|
1,007.0
|
|
|
$
|
881.1
|
|
|
|
|
|
Adjusted gross profit
(a)
|
$
|
1,184.3
|
|
|
$
|
990.6
|
|
|
|
|
|
Adjusted gross margin
(a)
|
54
|
%
|
|
53
|
%
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP
R&D
|
$
|
253.6
|
|
|
$
|
169.9
|
|
Deduct:
|
|
|
|
Acquisition related
costs
|
(0.1)
|
|
|
—
|
|
Restructuring &
other special items
|
(66.1)
|
|
|
(17.9)
|
|
Adjusted
R&D
|
$
|
187.4
|
|
|
$
|
152.0
|
|
|
|
|
|
Adjusted R&D as %
of total revenues
|
8.6
|
%
|
|
8.1
|
%
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP
SG&A
|
$
|
549.3
|
|
|
$
|
483.2
|
|
Deduct:
|
|
|
|
Acquisition related
costs
|
(35.7)
|
|
|
(66.5)
|
|
Restructuring &
other special items
|
(6.8)
|
|
|
(7.8)
|
|
Adjusted
SG&A
|
$
|
506.8
|
|
|
$
|
408.9
|
|
|
|
|
|
Adjusted SG&A as
% of total revenues
|
23.1
|
%
|
|
21.8
|
%
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP total
operating expenses
|
$
|
801.4
|
|
|
$
|
670.8
|
|
Add /
(Deduct):
|
|
|
|
Litigation
settlements, net
|
1.5
|
|
|
(17.7)
|
|
Acquisition related
costs
|
(35.8)
|
|
|
(66.5)
|
|
Restructuring &
other special items
|
(72.9)
|
|
|
(25.7)
|
|
Adjusted total
operating expenses
|
$
|
694.2
|
|
|
$
|
560.9
|
|
|
|
|
|
Adjusted earnings
from operations (b)
|
$
|
490.1
|
|
|
$
|
429.7
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP interest
expense
|
$
|
70.3
|
|
|
$
|
79.5
|
|
Deduct:
|
|
|
|
Interest expense
related to clean energy investments (c)
|
(3.8)
|
|
|
(4.3)
|
|
Non-cash accretion of
contingent consideration liability
|
(10.0)
|
|
|
(9.2)
|
|
Non-cash
interest
|
(1.9)
|
|
|
(7.9)
|
|
Acquisition financing
costs
|
(4.3)
|
|
|
—
|
|
Adjusted interest
expense
|
$
|
50.3
|
|
|
$
|
58.1
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP other
expense, net
|
$
|
16.3
|
|
|
$
|
18.5
|
|
(Add):
|
|
|
|
Equity method losses
from clean energy investments (c)
|
(25.5)
|
|
|
(22.5)
|
|
Purchase accounting
related amortization
|
(5.7)
|
|
|
(3.8)
|
|
Acquisition related
costs
|
(3.0)
|
|
|
—
|
|
Restructuring &
other special items
|
(2.2)
|
|
|
(7.0)
|
|
Adjusted other
income
|
$
|
(20.1)
|
|
|
$
|
(14.8)
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2016
|
|
2015
|
U.S. GAAP net cash
provided by operating activities
|
$
|
80.5
|
|
|
$
|
267.0
|
|
Add:
|
|
|
|
Acquisition related
costs
|
61.5
|
|
|
68.0
|
|
R&D
expense
|
60.0
|
|
|
—
|
|
Other
|
—
|
|
|
0.9
|
|
Adjusted cash
provided by operating activities
|
$
|
202.0
|
|
|
$
|
335.9
|
|
|
|
|
|
(Deduct):
|
|
|
|
Capital
expenditures
|
(51.8)
|
|
|
(48.1)
|
|
Adjusted free cash
flow
|
$
|
150.2
|
|
|
$
|
287.8
|
|
(a)
|
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. 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.
|
|
|
(b)
|
Adjusted earnings
from operations is calculated as adjusted gross profit less
adjusted total operating expenses. U.S. GAAP earnings from
operations is calculated as U.S. GAAP gross profit less U.S. GAAP
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.
|
Reconciliation of Forecasted Guidance
The reconciliations below are based on management's estimate of
adjusted net earnings and adjusted diluted EPS for the twelve
months ending December 31, 2016.
Mylan expects certain known U.S. GAAP amounts for 2016, as
presented in the reconciliation below. Other U.S. GAAP charges,
including those related to potential litigation, asset impairments
and restructuring programs that would be excluded from the adjusted
results are possible, but their amounts are dependent on numerous
factors that we currently cannot ascertain with sufficient
certainty or are presently unknown. These U.S. GAAP charges are
dependent upon future events and valuations that have not yet
occurred or been performed. The unaudited forecasted amounts
presented below are stated in millions, except for earnings per
share data.
Reconciliation of
Forecasted U.S. GAAP Net Earnings and U.S. GAAP Diluted EPS to
Adjusted Net Earnings
and Adjusted Diluted EPS
|
|
|
Twelve Months
Ended December 31, 2016
|
|
Lower
|
|
Upper
|
U.S. GAAP net
earnings attributable to Mylan N.V. and U.S. GAAP diluted
EPS
|
$
|
1,235
|
|
|
$
|
2.38
|
|
|
$
|
1,290
|
|
|
$
|
2.43
|
|
Purchase accounting
related amortization
|
1,000
|
|
|
|
|
1,050
|
|
|
|
Interest
expense
|
60
|
|
|
|
|
70
|
|
|
|
Pre-tax loss of clean
energy investments
|
90
|
|
|
|
|
100
|
|
|
|
R&D milestone
payments
|
100
|
|
|
|
|
125
|
|
|
|
Restructuring,
acquisition and other special items
|
270
|
|
|
|
|
375
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(230)
|
|
|
|
|
(285)
|
|
|
|
Adjusted net earnings
attributable to Mylan N.V. and adjusted diluted EPS
|
$
|
2,525
|
|
|
$
|
4.85
|
|
|
$
|
2,725
|
|
|
$
|
5.15
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mylan-reports-strong-first-quarter-2016-earnings-results-including-total-revenues-up-17-300261493.html
SOURCE Mylan N.V.