- Q2'21 net revenue of $910.8 million increased 26%
as-reported, or 24% in constant currency, compared to Q2'20.
Organic, constant currency net revenue grew 17%, compared to
Q2'20.
- Q2'21 net earnings of $88.4 million increased 94%, or 88% in
constant currency, compared to Q2'20.
- Q2'21 Adjusted EBITDA of $223.5 million increased 31%
as-reported, or 28% in constant currency, compared to
Q2'20.
- Q2'21 Biologics segment net revenue of $403.9 million
increased more than 75%, compared to Q2'20.
- Increasing guidance to reflect projected net revenue growth
of 23-28% and Adjusted EBITDA growth of 26-33%, compared to
projected net revenue growth in previous guidance of 16-22% and
Adjusted EBITDA growth of 17-26%.
Catalent, Inc. (NYSE: CTLT), the leading global provider of
advanced delivery technologies, development, and manufacturing
solutions for drugs, biologics, cell and gene therapies, and
consumer health products, today announced financial results for the
second quarter of fiscal 2021, which ended December 31, 2020.
“Our second quarter results reflect robust organic growth in our
Biologics segment, and our increased guidance reflects our
expectation of continued strong results for these offerings for the
remainder of our fiscal year. Additional capacity in our drug
product and drug substance offerings will come on line in the
second half of our fiscal year to help fight the pandemic and serve
other critical patient needs,” said John Chiminski, Chair and Chief
Executive Officer of Catalent, Inc.
Second Quarter 2021 Consolidated Results
Net revenue of $910.8 million increased 26% as reported, or 24%
in constant currency, from the $721.4 million reported for the
second quarter a year ago. Overall organic revenue growth (i.e.,
excluding the effect of acquisitions) was 17%.
Net earnings were $88.4 million. Accounting for the net earnings
attributable to holders of Catalent’s Series A convertible
preferred stock, net earnings attributable to common shareholders
were $76.6 million, or $0.46 per basic share, compared to net
earnings attributable to common shareholders of $34.3 million, or
$0.23 per basic share, in the second quarter a year ago.
EBITDA from operations, as referenced in the GAAP to non-GAAP
reconciliation provided later in this release, was $205.9 million,
an increase of $50.6 million from $155.3 million in the second
quarter a year ago. Second quarter fiscal 2021 Adjusted EBITDA (see
the GAAP to non-GAAP reconciliation provided later in this release)
was $223.5 million, or 24.5% of net revenue, compared to $171.0
million, or 23.7% of net revenue, in the second quarter a year ago.
This represents an increase of 30.7% as reported, and an increase
of 27.8% on a constant-currency basis.
Adjusted Net Income (see the GAAP to non-GAAP reconciliation)
was $114.4 million, or $0.63 per diluted share, compared to
Adjusted Net Income of $72.0 million, or $0.45 per diluted share,
in the second quarter a year ago.
Second Quarter 2021 Segment Review
Biologics
Net revenue from the Biologics segment was $403.9 million for
the second quarter of fiscal 2021, an increase of 79% as reported
and 76% in constant currency, compared to the second quarter a year
ago. Segment EBITDA (see the GAAP to non-GAAP reconciliation
provided later in this release) in the second quarter of fiscal
2021 was $135.5 million, an increase of 115% as reported and 109%
in constant currency compared to the second quarter a year ago.
Segment EBITDA margin was 33.5% in the second quarter of fiscal
2021 compared to 28.0% in the second quarter of the prior year.
Excluding the effect of acquisitions, net revenue increased 65%
and segment EBITDA increased 104% compared to the three months
ended December 31, 2019.
The Biologics segment represented 44% of Catalent’s total net
revenue in the second quarter of fiscal 2021.
Softgel and Oral Technologies
Net revenue from the Softgel and Oral Technologies segment was
$246.6 million for the second quarter of fiscal 2021, a decrease of
8% as reported or 10% in constant currency, compared to the second
quarter a year ago. Segment EBITDA was $45.6 million in the second
quarter of fiscal 2021, a decrease of 29% as reported, or 31% in
constant currency, compared to the second quarter a year ago.
Segment EBITDA margin was 18.5% in the second quarter of fiscal
2021 compared to 24.1% in the second quarter of the prior year.
The Softgel and Oral Technologies segment represented 27% of
Catalent’s total net revenue in the second quarter of fiscal
2021.
Oral and Specialty Delivery
Net revenue from the Oral and Specialty Delivery segment was
$169.9 million for the second quarter of fiscal 2021, an increase
of 19% as reported and 17% in constant currency, over the second
quarter a year ago. Segment EBITDA in the second quarter of fiscal
2021 was $44.2 million, an increase of 34% as reported, or 31% in
constant currency, compared to the second quarter a year ago.
Segment EBITDA margin was 26.0% in the second quarter of fiscal
2021 compared to 23.1% in the second quarter of the prior year.
Excluding the effect of acquisitions, net revenue increased 2%
and segment EBITDA increased 9% compared to the three months ended
December 31, 2019.
The Oral and Specialty Delivery segment represented 19% of
Catalent’s total net revenue in the second quarter of fiscal
2021.
Clinical Supply Services
Net revenue from the Clinical Supply Services segment was $93.5
million for the second quarter of fiscal 2021, an increase of 6% as
reported and 4% in constant currency, compared to the second
quarter a year ago. Segment EBITDA in the second quarter of fiscal
2021 was $25.3 million, an increase of 5% as reported, or 2% in
constant currency, compared to the second quarter a year ago.
Segment EBITDA margin was 27.1% in the second quarter of fiscal
2021 compared to 27.3% in the second quarter of the prior year.
The Clinical Supply Services segment represented 10% of
Catalent’s total net revenue in the second quarter of fiscal
2021.
Balance Sheet and Liquidity
As of December 31, 2020, Catalent had $3.1 billion in total
debt, and $2.2 billion in total debt net of cash and short-term
investments, compared to $2.1 billion in total net debt as of
September 30, 2020. The current debt structure does not include any
significant maturity until 2026.
Catalent’s net leverage ratio (see the GAAP to non-GAAP
reconciliation provided later in this release) as of December 31,
2020 was 2.6x, compared to 2.6x at September 30, 2020 and 4.2x at
December 31, 2019.
Fiscal Year 2021 Outlook
Catalent is raising its previously issued guidance to reflect
second quarter performance and to account for higher net underlying
demand, including increased demand related to COVID-19 treatments
and vaccines, partially offset by lower demand in some offerings
attributable to the effects of the pandemic.
The revised guidance assumes no major unforeseen change to
either the current status of the COVID-19 pandemic generally or its
effect on Catalent’s operations and business. The revised guidance
does not assume the receipt of any vaccine or treatment order from
any of our customers beyond what either has been received to date
or is deemed required under executed take-or-pay arrangements. The
revised guidance ranges are wider than the ranges we have
forecasted in the previous few fiscal years due to the continuing
uncertainty in both revenues and costs across our businesses
engendered by the COVID-19 pandemic. The revised guidance
projects:
- Net revenue for fiscal 2021 in the range of $3.80 billion to
$3.95 billion, compared to the previous range of $3.58 billion to
$3.78 billion;
- Adjusted EBITDA for fiscal 2021 in the range of $950 million to
$1,000 million, compared to the previous range of $880 million to
$950 million;
- Adjusted Net Income for fiscal 2021 in the range of $475
million to $525 million, compared to the previous range of $410
million to $470 million; and
- A fully diluted share count in the range of 180 million to 182
million shares on a weighted-average basis, which includes the
outstanding Series A Convertible Preferred Stock as-if converted,
compared to the previous range of 178 million to 180 million
shares.
Earnings Webcast
The Company’s management will host a webcast to discuss the
results at 8:15 a.m. ET today. Catalent invites all interested
parties to listen to the webcast, which will be accessible through
Catalent’s website at http://investor.catalent.com. A supplemental
slide presentation will also be available in the “Investors”
section of Catalent’s website prior to the start of the webcast.
The webcast replay, along with the supplemental slides, will be
available for 90 days in the “Investors” section of Catalent’s
website at www.catalent.com.
About Catalent, Inc.
Catalent, Inc. (NYSE: CTLT), an S&P 500® company, is the
leading global provider of advanced delivery technologies,
development, and manufacturing solutions for drugs, biologics, cell
and gene therapies, and consumer health products. With over 85
years serving the industry, Catalent has proven expertise in
bringing more customer products to market faster, enhancing product
performance and ensuring reliable clinical and commercial product
supply. Catalent employs more than 14,000 people, including
approximately 2,500 scientists, at more than 45 facilities across
four continents and in fiscal year 2020 generated over $3 billion
in annual revenue. Catalent is headquartered in Somerset, N.J. For
more information, please visit www.catalent.com.
Non-GAAP Financial Measures
Use of EBITDA from operations, Adjusted EBITDA, Adjusted Net
Income and Segment EBITDA
Management measures operating performance based on consolidated
earnings from operations before interest expense, expense (benefit)
for income taxes, and depreciation and amortization, adjusted for
the income or loss attributable to non-controlling interests
(“EBITDA from operations”). EBITDA from operations is not defined
under U.S. GAAP, is not a measure of operating income, operating
performance, or liquidity presented in accordance with U.S. GAAP,
and is subject to important limitations.
Catalent believes that the presentation of EBITDA from
operations enhances an investor’s understanding of its financial
performance. Catalent believes this measure is a useful financial
metric to assess its operating performance across periods by
excluding certain items that it believes are not representative of
its core business and uses this measure for business planning
purposes.
In addition, given the significant investments that Catalent has
made in the past in property, plant and equipment, depreciation and
amortization expenses represent a meaningful portion of its cost
structure. Catalent believes that EBITDA from operations will
provide investors with a useful tool for assessing the
comparability between periods of its ability to generate cash from
operations sufficient to pay taxes, to service debt and to
undertake capital expenditures because it eliminates depreciation
and amortization expense. Catalent presents EBITDA from operations
in order to provide supplemental information that it considers
relevant for the readers of its consolidated financial statements,
and such information is not meant to replace or supersede U.S. GAAP
measures. Catalent’s definition of EBITDA from operations may not
be the same as similarly titled measures used by other
companies.
Catalent evaluates the performance of its segments based on
segment earnings before non-controlling interest, other (income)
expense, impairments, restructuring costs, interest expense, income
tax expense (benefit), and depreciation and amortization (“segment
EBITDA”). Moreover, under Catalent’s credit agreement, its ability
to engage in certain activities, such as incurring certain
additional indebtedness, making certain investments and paying
certain dividends, is tied to ratios based on Adjusted EBITDA,
which is not defined under U.S. GAAP, is not a measure of operating
income, operating performance, or liquidity presented in accordance
with U.S. GAAP, and is subject to important limitations. Adjusted
EBITDA is the covenant compliance measure used in the credit
agreement governing debt incurrence and restricted payments.
Because not all companies use identical calculations, Catalent’s
presentation of Adjusted EBITDA may not be comparable to other
similarly titled measures of other companies.
Management also measures operating performance based on Adjusted
Net Income (Loss) and Adjusted Net Income (Loss) per share.
Adjusted Net Income (Loss) is not defined under U.S. GAAP, is not a
measure of operating income, operating performance, or liquidity
presented in accordance with U.S. GAAP and is subject to important
limitations. Catalent believes that the presentation of Adjusted
Net Income (Loss) and Adjusted Net Income (Loss) per share enhances
an investor’s understanding of its financial performance. Catalent
believes these measures are a useful financial metric to assess its
operating performance across periods by excluding certain items
that it believes are not representative of its core business and
Catalent uses these measures for business planning purposes.
Catalent defines Adjusted Net Income (Loss) as net earnings (loss)
adjusted for amortization attributable to purchase accounting and
adjustments for other cash and non-cash items included in the table
below, partially offset by its estimate of the tax effects of such
cash and non-cash items. Catalent believes that Adjusted Net Income
(Loss) and Adjusted Net Income (Loss) per share provides investors
with a useful tool for assessing the comparability between periods
of its ability to generate cash from operations available to its
stockholders. Catalent’s definition of Adjusted Net Income (Loss)
may not be the same as similarly titled measures used by other
companies.
The most directly comparable U.S. GAAP measure to EBITDA from
operations, Adjusted EBITDA and Adjusted Net Income (Loss) is net
earnings (loss). Included in this release is a reconciliation of
net earnings (loss) to EBITDA from operations, Adjusted EBITDA and
Adjusted Net Income.
Catalent does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable U.S. GAAP financial
measures because it could not do so without unreasonable effort due
to the unavailability of the information needed to calculate
reconciling items and due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from the non-GAAP financial measures in future periods. When
planning, forecasting, and analyzing future periods, Catalent does
so primarily on a non-GAAP basis without preparing a U.S. GAAP
analysis as that would require estimates for various cash and
non-cash reconciling items that would be difficult to predict with
reasonable accuracy. For example, equity compensation expense would
be difficult to estimate because it depends on Catalent’s future
hiring and retention needs, as well as the future fair market value
of its common stock, all of which are difficult to predict and
subject to constant change. It is equally difficult to anticipate
the need for or magnitude of a presently unforeseen one-time
restructuring expense or the values of end-of-period foreign
currency exchange rates. As a result, Catalent does not believe
that a U.S. GAAP reconciliation would provide meaningful
supplemental information about its outlook.
Use of Constant Currency
As changes in exchange rates are an important factor in
understanding period-to-period comparisons, Catalent believes the
presentation of results on a constant-currency basis in addition to
reported results helps improve investors’ ability to understand its
operating results and evaluate its performance in comparison to
prior periods. Constant-currency information compares results
between periods as if exchange rates had remained constant period
over period. Catalent uses results on a constant-currency basis as
one measure to evaluate its performance. Catalent calculates
constant currency by calculating current-year results using
prior-year foreign currency exchange rates. Catalent generally
refers to such amounts calculated on a constant-currency basis as
excluding the impact of foreign exchange or being on a
constant-currency basis. These results should be considered in
addition to, not as a substitute for, results reported in
accordance with U.S. GAAP. Results on a constant-currency basis, as
Catalent presents them, may not be comparable to similarly titled
measures used by other companies and are not measures of
performance presented in accordance with U.S. GAAP.
Forward-Looking Statements
This release contains both historical and forward-looking
statements. All statements other than statements of historical
fact, are, or may be deemed to be, forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements generally can be
identified by the use of statements that include phrases such as
“believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,”
“project,” “foresee,” “likely,” “may,” “will,” “would,” or other
words or phrases with similar meanings. Similarly, statements that
describe Catalent’s objectives, plans, or goals are, or may be,
forward-looking statements. These statements are based on current
expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual
results could vary materially from Catalent’s expectations and
projections. Some of the factors that could cause actual results to
differ include, but are not limited to, the following: the current
or future effects of the COVID-19 pandemic on Catalent's and its
clients' businesses; participation in a highly competitive market
and increased competition that may adversely affect Catalent’s
business; demand for its offerings, which depends in part on its
customers’ research and development and the clinical and market
success of their products; product and other liability risks that
could adversely affect Catalent’s results of operations, financial
condition, liquidity and cash flows; failure to comply with
existing and future regulatory requirements; failure to provide
quality offerings to customers could have an adverse effect on
Catalent’s business and subject it to regulatory actions and costly
litigation; problems providing the highly exacting and complex
services or support required; global economic, political and
regulatory risks to Catalent’s operations; inability to enhance
existing or introduce new technology or service offerings in a
timely manner; inadequate patents, copyrights, trademarks and other
forms of intellectual property protections; fluctuations in the
costs, availability, and suitability of the components of the
products Catalent manufactures, including active pharmaceutical
ingredients, excipients, purchased components and raw materials;
changes in market access or healthcare reimbursement in the United
States or internationally; fluctuations in the exchange rate of the
U.S. dollar against other currencies, including as a result of the
U.K.’s exit from the European Union; adverse tax legislative or
regulatory initiatives or challenges or adjustments to Catalent’s
tax positions; loss of key personnel; risks generally associated
with information systems; inability to complete any future
acquisitions or other transactions that may complement or expand
its business or divest of non-strategic businesses or assets and
difficulties in successfully integrating acquired businesses and
realizing anticipated benefits of such acquisitions; risks
associated with timely and successfully completing, and correctly
anticipating the future demand predicted for, capital expansion
projects at existing facilities, offerings and customers’ products
that may infringe on the intellectual property rights of third
parties; environmental, health and safety laws and regulations,
which could increase costs and restrict operations; labor and
employment laws and regulations or labor difficulties, which could
increase costs or result in operational disruptions; additional
cash contributions required to fund Catalent’s existing pension
plans; substantial leverage that may limit its ability to raise
additional capital to fund operations and react to changes in the
economy or in the industry; and exposure to interest-rate risk to
the extent of its variable-rate debt preventing it from meeting its
obligations under its indebtedness. For a more detailed discussion
of these and other factors, see the information under the caption
“Risk Factors” in Catalent’s Annual Report on Form 10-K for the
fiscal year ended June 30, 2020, filed August 31, 2020. All
forward-looking statements speak only as of the date of this
release or as of the date they are made, and Catalent does not
undertake to update any forward-looking statement as a result of
new information or future events or developments except to the
extent required by law.
More products. Better treatments. Reliably
supplied.™
Catalent, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited; dollars and shares
in millions, except per share data)
Three Months Ended
December 31,
FX Impact
Constant Currency
Increase/(Decrease)
2020
2019
Change $
Change %
Net revenue
$
910.8
$
721.4
$
17.9
$
171.5
24
%
Cost of sales
612.6
489.2
10.9
112.5
23
%
Gross margin
298.2
232.2
7.0
59.0
25
%
Selling, general, and administrative
expenses
165.5
141.0
1.4
23.1
16
%
Impairment charges and (gain) loss on sale
of assets
0.6
1.7
—
(1.1)
(65)
%
Restructuring and other
5.5
0.5
0.1
4.9
980
%
Operating earnings
126.6
89.0
5.5
32.1
36
%
Interest expense, net
25.9
34.9
0.2
(9.2)
(26)
%
Other (income) expense, net
(8.3)
(4.4)
1.8
(5.7)
130
%
Earnings before income taxes
109.0
58.5
3.5
47.0
80
%
Income tax expense
20.6
13.0
0.7
6.9
53
%
Net earnings
$
88.4
$
45.5
$
2.8
$
40.1
88
%
Less: Net earnings attributable to
preferred shareholders
(11.8)
(11.2)
—
—
—
%
Net earnings attributable to common
shareholders
$
76.6
$
34.3
$
—
$
—
—
%
Weighted average shares outstanding -
basic
167.1
146.1
Weighted average diluted shares
outstanding - diluted
169.3
147.7
Earnings per share:
Basic
Net earnings
$
0.46
$
0.23
Diluted
Net earnings
$
0.45
$
0.23
Catalent, Inc. and
Subsidiaries
Selected Segment Financial
Data
(Unaudited; dollars in
millions)
Three Months Ended
December 31,
FX Impact
Constant Currency
Increase/(Decrease)
2020
2019
Change $
Change %
Biologics
Net revenue
$
403.9
$
225.2
$
7.9
$
170.8
76
%
Segment EBITDA
135.5
63.0
3.9
68.6
109
%
Softgel and Oral Technologies
Net revenue
246.6
267.9
5.2
(26.5)
(10)
%
Segment EBITDA
45.6
64.5
1.0
(19.9)
(31)
%
Oral and Specialty Delivery
Net revenue
169.9
143.2
2.7
24.0
17
%
Segment EBITDA
44.2
33.1
0.9
10.2
31
%
Clinical Supply Services
Net revenue
93.5
87.9
2.0
3.6
4
%
Segment EBITDA
25.3
24.0
0.9
0.4
2
%
Inter-segment revenue
elimination
(3.1)
(2.8)
0.1
(0.4)
(14)
%
Unallocated costs
(44.7)
(29.3)
(2.1)
(13.3)
(45)
%
Combined totals
Net revenue
$
910.8
$
721.4
$
17.9
$
171.5
24
%
EBITDA from operations
$
205.9
$
155.3
$
4.6
$
46.0
30
%
Refer to Catalent's description of non-GAAP measures, including
segment EBITDA and EBITDA from operations as referenced above.
Catalent, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited; dollars in
millions, except per share amounts)
Six Months Ended
December 31,
FX impact
Constant Currency
Increase/(Decrease)
2020
2019
Change $
Change %
Net revenue
$
1,756.5
$
1,386.1
$
27.6
$
342.8
25
%
Cost of sales
$
1,209.4
976.2
16.7
216.5
22
%
Gross margin
547.1
409.9
10.9
126.3
31
%
Selling, general and administrative
expenses
330.2
283.8
2.4
44.0
16
%
Impairment charges and (gain) loss on sale
of assets
2.4
1.5
—
0.9
60
%
Restructuring and other
6.4
1.2
0.1
5.1
425
%
Operating earnings
208.1
123.4
8.4
76.3
62
%
Interest expense, net
51.2
71.2
0.4
(20.4)
(29)
%
Other (income) expense, net
(19.5)
0.5
3.3
(23.3)
*
Earnings before income taxes
176.4
51.7
4.7
120.0
232
%
Income tax expense
5.6
6.1
0.6
(1.1)
(18)
%
Net earnings
$
170.8
$
45.6
$
4.1
$
121.1
266
%
Less: Net earnings attributable to
preferred shareholders
(25.4)
(18.7)
—
—
—
%
Net earnings attributable to common
shareholders
$
145.4
$
26.9
$
—
$
—
—
%
Weighted average shares outstanding -
basic
165.6
145.9
Weighted average diluted shares
outstanding - diluted
168.1
147.8
Earnings per share:
Basic
Net earnings
$
0.88
$
0.18
Diluted
Net earnings
$
0.87
$
0.18
*Percentage not meaningful
Catalent, Inc. and
Subsidiaries
Selected Segment Financial
Data
(Unaudited; dollars in
millions)
Six Months Ended
December 31,
FX Impact
Constant Currency
Increase/(Decrease)
2020
2019
Change $
Change %
Biologics
Net revenue
$
781.0
$
413.8
$
11.2
$
356.0
86
%
Segment EBITDA
242.0
98.8
5.0
138.2
140
%
Softgel and Oral Technologies
Net revenue
467.7
528.5
7.2
(68.0)
(13)
%
Segment EBITDA
83.4
110.9
1.8
(29.3)
(26)
%
Oral and Specialty Delivery
Net revenue
328.2
275.8
5.6
46.8
17
%
Segment EBITDA
65.6
60.8
2.0
2.8
5
%
Clinical Supply Services
Net revenue
186.2
172.5
3.5
10.2
6
%
Segment EBITDA
50.3
45.6
1.6
3.1
7
%
Inter-segment revenue
elimination
(6.6)
(4.5)
0.1
(2.2)
(49)
%
Unallocated costs
(73.6)
(70.7)
(3.8)
0.9
1
%
Combined totals
Net revenue
$
1,756.5
$
1,386.1
$
27.6
$
342.8
25
%
EBITDA from operations
$
367.7
$
245.4
$
6.6
$
115.7
47
%
Refer to Catalent's description of non-GAAP measures, including
segment EBITDA and EBITDA from operations as referenced above.
Catalent, Inc. and
Subsidiaries
Reconciliation of Net Earnings
to EBITDA from Operations and Adjusted EBITDA*
(Unaudited; dollars in
millions)
Three months ended
December 31, 2019
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
Net earnings
$
45.5
$
20.9
$
154.2
$
82.4
$
88.4
Interest expense, net
34.9
34.4
20.5
25.3
25.9
Income tax expense (benefit)
13.0
8.8
24.8
(15.0)
20.6
Depreciation and amortization
61.9
64.8
66.4
69.1
71.0
EBITDA from operations
155.3
128.9
265.9
161.8
205.9
Stock-based compensation
10.3
8.6
12.6
18.7
11.4
Impairment charges and (gain) loss on sale
of assets
1.7
0.6
3.4
1.8
0.6
Financing-related expenses and other
—
16.0
0.2
—
—
Restructuring and other
0.5
1.3
3.0
0.9
5.5
Acquisition, integration, and other
special items
7.5
7.5
10.6
4.0
9.2
Foreign exchange loss (gain) (included in
other, net)
5.5
(3.8)
(0.1)
(3.8)
(2.6)
Other adjustments
(9.8)
26.3
(28.2)
(9.0)
(6.5)
Adjusted EBITDA
$
171.0
$
185.4
$
267.4
$
174.4
$
223.5
FX impact
4.9
Adjusted EBITDA at constant currency
$
218.6
* Refer to Catalent's description of non-GAAP measures,
including EBITDA from operations and Adjusted EBITDA as referenced
above.
Catalent, Inc. and
Subsidiaries
Reconciliation of Net Earnings
to Adjusted Net Income*
(Unaudited; dollars in
millions, except per share data)
Three months ended
December 31, 2019
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
Net earnings
$
45.5
$
20.9
$
154.2
$
82.4
$
88.4
Amortization (1)
21.8
23.0
22.5
22.9
23.0
Stock-based compensation
10.3
8.6
12.6
18.7
11.4
Impairment charges and (gain) loss on sale
of assets
1.7
0.6
3.4
1.8
0.6
Financing-related expenses
—
16.0
0.2
—
—
Restructuring and other
0.5
1.4
3.0
0.9
5.5
Acquisition, integration, and other
special items
7.5
7.6
10.6
4.0
9.2
Foreign exchange loss (gain) (included in
other, net)
5.5
(3.9)
(0.1)
(3.8)
(2.6)
Other adjustments(2)
(9.8)
26.2
(28.3)
(9.0)
(6.5)
Estimated tax effect of adjustments(3)
(10.5)
(17.7)
(7.0)
(8.6)
(10.7)
Discrete income tax (benefit) expense
items(4)
(0.5)
0.2
(16.7)
(31.2)
(3.9)
Adjusted net income (ANI)
$
72.0
$
82.9
$
154.4
$
78.1
$
114.4
Weighted average shares outstanding -
basic
146.1
167.1
Weighted average diluted shares
outstanding - diluted
147.7
169.3
Earnings per share:
Net earnings per share - basic
$
0.23
$
0.46
Net earnings per share - diluted
$
0.23
$
0.45
ANI per share:
ANI per share - basic
$
0.49
$
0.68
ANI per share - diluted (5)
$
0.45
$
0.63
* Refer to Catalent's description of non-GAAP measures,
including Adjusted Net Income as referenced above.
(1) Represents the amortization attributable to purchase
accounting for previously completed business combinations.
(2) Represents unrealized (gains) losses related to the fair
value of the derivative liability associated with the Series A
convertible preferred stock.
(3) The tax effect of adjustments to Adjusted Net Income are
computed by applying the statutory tax rate in the jurisdictions to
the income or expense items that are adjusted in the period
presented; if a valuation allowance exists, the rate applied is
zero.
(4) Discrete period income tax expense (benefit) items are
unusual or infrequently occurring items, primarily including:
changes in judgment related to the realizability of deferred tax
assets in future years, changes in measurement of a prior-year tax
position, deferred tax impact of changes in tax law, and purchase
accounting.
(5) Represents Adjusted Net Income divided by the weighted
average sum of (a) the number of shares of Common Stock
outstanding, plus (b) the number of shares of Common Stock that
would be issued assuming exercise or vesting of all potentially
dilutive instruments, plus (c) the number of shares of Common Stock
equivalent to the shares of Series A Preferred Stock outstanding
under the "if-converted" method. For the three months ended
December 31, 2020 and 2019, the weighted average was 180.2 and
160.8, respectively.
Catalent, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Unaudited; dollars in
millions)
December 31,
2020
June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
833.1
$
953.2
Trade receivables, net
771.5
838.1
Inventories
461.3
323.8
Prepaid expenses and other
453.0
177.9
Total current assets
2,518.9
2,293.0
Property, plant, and equipment, net
2,129.8
1,900.8
Other non-current assets, including
intangible assets
3,549.4
3,582.7
Total assets
$
8,198.1
$
7,776.5
LIABILITIES, REDEEMABLE PREFERRED
STOCK, AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations
and other short-term borrowings
$
72.0
$
72.9
Accounts payable
356.9
321.0
Other accrued liabilities
595.1
499.3
Total current liabilities
1,024.0
893.2
Long-term obligations, less current
portion
2,983.8
2,945.1
Other non-current liabilities
375.8
432.8
Redeemable preferred stock
359.0
606.6
Total shareholders' equity
3,455.5
2,898.8
Total liabilities, redeemable preferred
stock, and shareholders' equity
$
8,198.1
$
7,776.5
Catalent, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Unaudited; dollars in
millions)
Six Months Ended
December 31,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash provided by operating
activities
$
223.7
$
145.9
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of property, equipment, and
other productive assets
(338.9)
(152.2)
Proceeds from sale of property and
equipment
0.3
—
Proceeds from sale of subsidiaries
—
20.8
Payment for acquisitions, net of cash
acquired
(14.8)
(10.7)
Payments for investments
(1.0)
(2.0)
Net cash used in investing activities
(354.4)
(199.2)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net change in other borrowings
1.5
(5.9)
Payments related to long-term
obligations
(54.8)
(51.5)
Dividends paid
(13.0)
(20.0)
Proceeds from sale of common stock,
net
81.8
—
Other financing activities
3.7
—
Cash paid, in lieu of equity, for tax
withholding obligations
(26.4)
(24.4)
Net cash used in financing activities
(7.2)
(101.8)
Effect of foreign currency exchange on
cash
17.8
(1.4)
NET DECREASE IN CASH AND
EQUIVALENTS
(120.1)
(156.5)
CASH AND EQUIVALENTS AT BEGINNING OF
PERIOD
953.2
345.4
CASH AND EQUIVALENTS AT END OF
PERIOD
$
833.1
$
188.9
Catalent, Inc. and
Subsidiaries
Reconciliation of Segment
EBITDA to Net Earnings
(Unaudited; dollars in
millions, except per share data)
Three Months Ended
December 31,
Six Months Ended
December 31,
2020
2019
2020
2019
Biologics
$
135.5
$
63.0
$
242.0
$
98.8
Softgel and Oral Technologies
45.6
64.5
83.4
110.9
Oral and Specialty Delivery
44.2
33.1
65.6
60.8
Clinical Supply Services
25.3
24.0
50.3
45.6
Sub-Total
$
250.6
$
184.6
$
441.3
$
316.1
Reconciling items to net earnings
Unallocated costs (1)
(44.7)
(29.3)
(73.6)
(70.7)
Depreciation and amortization
(71.0)
(61.9)
(140.1)
(122.5)
Interest expense, net
(25.9)
(34.9)
(51.2)
(71.2)
Income tax expense
(20.6)
(13.0)
(5.6)
(6.1)
Net earnings
$
88.4
$
45.5
$
170.8
$
45.6
(1) Unallocated costs include restructuring and special items,
equity-based compensation, impairment charges, certain other
corporate directed costs, and other costs that are not allocated to
the segments.
Catalent, Inc. and
Subsidiaries
Calculation of Net Leverage
Ratio
(Unaudited; dollars in
millions)
December 31,
2019
March 31, 2020
June 30, 2020
September 30,
2020
December 31,
2020
Total Secured Debt
$
1,268.9
$
1,130.5
$
928.5
$
926.5
$
924.6
Total Unsecured Debt
1,628.1
2,068.2
2,089.5
2,132.2
2,131.2
Total Debt
2,897.0
3,198.7
3,018.0
3,058.7
3,055.8
Cash and Cash Equivalents
188.9
608.4
953.2
1,007.0
833.1
Total Net Debt
2,708.1
2,590.3
2,064.8
2,051.7
2,222.7
Adjusted EBIDTA
Q3 2019
154.3
Q4 2019
199.4
199.4
Q1 2020
127.1
127.1
127.1
Q2 2020
171.0
171.0
171.0
171.0
Q3 2020
185.4
185.4
185.4
185.4
Q4 2020
267.4
267.4
267.4
Q1 2021
174.4
174.4
Q2 2021
223.5
LTM Adjusted EBITDA
$
651.8
$
682.9
$
750.9
$
798.2
$
850.7
Net Sr. Secured Debt / Adj. EBITDA
1.7x
0.8x
n.a.1
n.a.1
0.1x
Net Debt / Adj. EBITDA
4.2x
3.8x
2.8x
2.6x
2.6x
1 Cash and cash equivalents exceed total secured debt
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210202005289/en/
Investor Contact: Catalent, Inc. Paul Surdez
732-537-6325 investors@catalent.com
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