UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): September 25, 2019

 

Elanco Animal Health Incorporated

(Exact name of registrant as specified in its charter)

 

Indiana

 

001-38661

 

82-5497352

(State or other jurisdiction

 

(Commission

 

(I.R.S. Employer

of incorporation)

 

File Number)

 

Identification No.)

 

2500 Innovation Way
Greenfield, Indiana

 

46140

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (877) 352-6261

 

Not Applicable

(Former Name or Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which
registered

Common stock, no par value

 

ELAN

 

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

o Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

 

 

 

Item 2.05.          Costs Associated with Exit or Disposal Activities.

 

On September 25, 2019, the Board of Directors of Elanco Animal Health Incorporated (the “Company”) authorized a restructuring program to reduce costs and support margin expansion. As part of the restructuring program, the Company intends to eliminate approximately 250 positions across multiple locations and functions, including exiting research and development operations in Prince Edward Island, Canada, ceasing certain manufacturing operations in Wusi, China, and streamlining operations in Speke, England. Affected employees will receive severance and other transition assistance that meet or exceed local requirements.  The Company expects to substantially complete the restructuring actions within the next year.

 

The proposed restructuring is expected to lead to total restructuring charges of approximately $50 million, consisting of approximately $20 million in severance costs and approximately $30 million of non-cash asset write-down expenses. The Company expects to incur approximately $38 million of the total restructuring charge in the third quarter of 2019, with the remaining $12 million to be incurred in 2020. The total cash expenditures associated with the restructuring program are expected to be approximately $20 million, consisting primarily of severance costs.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Such statements include, without limitation, statements concerning the anticipated charges relating to the restructuring program and the expected completion date of the program.  Forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market, and regulatory conditions, and other factors described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and the Company’s other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

 

Item 7.01.          Regulation FD Disclosure.

 

On September 30, 2019, the Company issued a press release announcing the restructuring program described under Item 2.05 above.  A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1. The information contained in the accompanying Exhibit 99.1 is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information contained in the press release shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01             Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

 

Description

99.1

 

Press release issued by Elanco Animal Health Incorporated, dated September 30, 2019.

 

2

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Elanco Animal Health Incorporated

 

 

 

Date: September 30, 2019

By:

/s/ Michael-Bryant Hicks

 

 

Name:  Michael-Bryant Hicks

 

 

Title:  Executive Vice President, General Counsel and Corporate Secretary

 

3

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Media: Colleen Parr Dekker +1.317.989.7011 colleen_parr_dekker@elanco.com

Investor Relations: Jim Greffet (317) 383-9935 or greffet_james_f@elanco.com

 

Elanco Advances Margin Expansion Journey with Business Restructuring

Actions Expected to Drive at Least $12 Million in Savings in 2020

 

GREENFIELD, Ind. (September 30, 2019) Since its September 2018 initial public offering (IPO), Elanco Animal Health Inc. (NYSE: ELAN) has continued to evaluate its capabilities, structure and staffing to meet its goal of being an agile, standalone company, focused exclusively on animal health and delivering on its Innovation, Portfolio and Productivity (IPP) strategy.

 

As part of this effort, Elanco is implementing actions to enhance productivity and drive efficiency. Today the company is announcing its intent to eliminate approximately 250 positions across multiple locations and functions. This includes exiting R&D operations in Prince Edward Island, Canada; ceasing certain operations at the company’s Wusi, China site; and streamlining operations at the Speke, England location.

 

Today’s proposed actions are another step in Elanco’s journey to build a stronger, more competitive animal health company. These efforts build on Elanco’s productivity agenda, which has included consolidating suppliers and contract manufacturers, as well as rationalizing products.

 

“Our board and management team continually assess our organization to identify and execute opportunities to become a fit-for-purpose animal health company,” said Todd Young, executive vice president and chief financial officer of Elanco. “While decisions that affect our team are difficult, today’s action will tighten our focus, centralize and strengthen key capabilities, and increase our agility to quickly meet the changing needs of our customers in a dynamic, global market. At the same time, these actions advance our productivity agenda and our margin expansion efforts, driving greater efficiency within our global footprint and allowing Elanco to focus investments in our growth areas.”

 

The cost of this restructuring will be approximately $50 million with approximately $30 million relating to non-cash asset write downs. Elanco expects to realize at least $12 million of savings in 2020 from this restructuring. An estimated restructuring charge of $38 million will be incurred in Q3 2019 with the remaining $12 million to be incurred in 2020.

 

Elanco continues to make significant progress on its efforts to build new capabilities and systems required to complete its stand up as a fully independent business.

 

ABOUT ELANCO
Elanco (NYSE: ELAN) is a global animal health company that develops products and knowledge services to prevent and treat disease in food animals and pets in more than 90

 

 

countries. With a 65-year heritage, we rigorously innovate to improve the health of animals and benefit our customers, while fostering an inclusive, cause-driven culture for more than 5,800 employees. At Elanco, we’re driven by our vision of food and companionship enriching life - all to advance the health of animals, people and the planet. Learn more at www.elanco.com.

 

This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about the anticipated cost savings and anticipated charges relating to the restructuring, and reflects Elanco’s current belief. Forward-looking statements are based on our current expectations and assumptions regarding our business and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. For further discussion of these and other risks and uncertainties, see Elanco’s most recent filings with the United States Securities and Exchange Commission. Except as required by law, Elanco undertakes no duty to update forward-looking statements to reflect events after the date of this release.