|
FORM 8-K
CURRENT REPORT
|
|
Delaware
(State or other jurisdiction of Incorporation)
|
001-36587
(Commission File Number) |
20-8737688
(IRS Employer Identification Number)
|
|
|
|||
14 Schoolhouse Road
Somerset, New Jersey
|
08873
|
||
(Address of registrant’s principal executive office)
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(Zip code)
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
•
|
Section 2.06 of the Bylaws as previously in effect was amended to provide for a majority vote standard for the election of directors in uncontested director elections. Effective immediately, each director of the Company will be elected by the affirmative vote of a majority of the votes cast in respect of shares present in person or represented by proxy at any annual or special meeting of stockholders for the election of directors and entitled to vote on the election of directors (meaning the number of shares voted for a nominee for director must exceed the total number of shares voted against such nominee for director, with abstentions and broker non-votes not counted as a vote cast either for or against that nominee). Under the Bylaws as previously in effect, directors were elected by a plurality of the votes cast in respect of shares present in person or represented by proxy at any such meeting for the election of directors and entitled to vote on the election of directors.
|
•
|
A new Section 2.13 was added to the Bylaws which permits a stockholder, or a group of up to twenty (20) stockholders, owning three percent (3%) or more of the Company’s outstanding shares of capital stock continuously for at least three years, to nominate and include in the Company’s proxy statement for an annual meeting of stockholders at which directors may be elected, director nominees constituting up to the greater of two or twenty percent (20%) of the total number of directors serving on the Board, provided that the stockholder(s) and the director nominee(s) satisfy the requirements specified in Section 2.13 of the Bylaws. Proxy access will first be available to stockholders in connection with the Company’s 2018 annual meeting.
|
•
|
Finally, the Bylaws as previously in effect were amended to include a number of other immaterial modifications intended to provide clarification and consistency and to remove references to The Blackstone Group L.P. and its affiliates therein.
|
•
|
A new provision was added to the Guidelines which provides that, following any uncontested director election, an incumbent director nominee who does not receive more votes cast for his or her election than votes cast against his or her election must promptly offer his or her resignation to the chair of the Board or the secretary of the Company following certification of the stockholders’ vote in such election. The Nominating Committee will promptly consider the offer to resign and recommend to the Board what action it believes should be taken with respect to such offered resignation. The Board must act on the Nominating Committee’s recommendation no later than ninety (90) days following the date of the stockholders’ meeting during which the election occurred. Any director who offers a resignation pursuant to the Guidelines will not participate in the consideration by the Nominating Committee or the Board regarding whether to accept his or her offered resignation. If a majority of the members of the Nominating Committee did not receive more votes for their election than votes against their election, then the independent directors (excluding those independent directors, if any, who did not receive more votes for their election than votes against their election in the most recent election) will appoint a committee of the Board solely for the purpose of considering the offered resignations and making a recommendation to the Board whether to accept such resignations; provided, however, that if there are fewer than three independent directors who received more votes for their election than votes against their election, then such committee will be comprised of all independent directors, and each independent director who is required to tender a resignation offer pursuant to the Guidelines will not participate in the consideration by such committee and the Board of whether to accept his or her offer to resign. In addition, the Company shall promptly publicly disclose the Board’s decision whether to accept any offer to resign tendered by a director pursuant to the Guidelines, including an explanation of how the decision was reached and, if applicable, the reasons an offer to resign was not accepted, in a Current Report on Form 8-K to be filed or furnished with the SEC. In deciding the action to be taken with respect to any such resignation offer tendered pursuant to the Guidelines, the Nominating Committee and the Board may consider all factors deemed relevant and shall consider what they believe is in the best interests of both the Company and the Company’s stockholders.
|
•
|
The Guidelines were also amended to provide that when the chair of the Board position is not held by an independent director of the Board, the independent directors of the Board will elect from among themselves a lead director (the “Lead Director”) to serve until the next annual meeting of stockholders. Under the Guidelines as previously in effect the independent directors of the Board may, but were not obligated to, elect a Lead Director from among themselves in the event the chair of the Board position was not held by an independent director of the Board. In addition, the Guidelines were amended to specify the qualifications of directors eligible to serve as the Lead Director which the Nominating Committee and the independent directors of the Board may consider in electing the Lead Director.
|
•
|
Finally, the Guidelines were amended to include a number of other immaterial modifications intended to provide clarification and consistency.
|
(d)
|
Exhibits. The following Exhibits are furnished as part of this Current Report on Form 8-K.
|
Exhibit No.
|
Description
|
||
|
|
|
|
|
3.1
|
|
Bylaws of Catalent, Inc., adopted August 24, 2017
|
|
|
|
|
|
10.1
|
|
Amendment to Employment Agreement, dated August 23, 2017, by and between Catalent, Inc. and John R. Chiminski
|
|
|
|
|
|
10.2
|
|
Form of Restricted Stock Agreement for U.S. Employees
|
|
|
|
|
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10.3
|
|
Form of Performance Restricted Stock Agreement for U.S. Employees
|
|
|
|
|
|
99.1
|
|
Earnings release, August 28, 2017, issued by Catalent, Inc.
|
|
|
|
|
|
99.2
|
|
Corporate Governance Guidelines of Catalent, Inc., adopted August 24, 2017
|
|
Catalent, Inc.
|
|
(Registrant)
|
|
|
By:
|
/s/ STEVEN L. FASMAN
|
|
Steven L. Fasman
|
|
Senior Vice President & General Counsel
and Secretary
|
Exhibit No.
|
Description
|
||
|
|
|
|
|
3.1
|
|
Bylaws of Catalent, Inc., adopted August 24, 2017
|
|
|
|
|
|
10.1
|
|
Amendment to Employment Agreement, dated August 23, 2017, by and between Catalent, Inc. and John R. Chiminski
|
|
|
|
|
|
10.2
|
|
Form of Restricted Stock Agreement for U.S. Employees
|
|
|
|
|
|
10.3
|
|
Form of Performance Restricted Stock Agreement for U.S. Employees
|
|
|
|
|
|
99.1
|
|
Earnings release, August 28, 2017, issued by Catalent, Inc.
|
|
|
|
|
|
99.2
|
|
Corporate Governance Guidelines of Catalent, Inc., adopted August 24, 2017
|
|
|
|
|
|
CATALENT, INC.
|
|
|
|
JOHN R. CHIMINSKI
|
|
|
|
||
/s/ Steven Fasman
|
|
|
|
/s/ John R. Chiminski
|
|
|
|
||
By: Steven Fasman
|
|
|
|
|
Title: Senior Vice President, General Counsel and Secretary
|
|
|
|
|
Participant
:
|
«First» «Last»
|
Date of Grant
:
|
[Date]
|
Number of Restricted Shares
:
|
«No_of_Restricted_Shares », subject to adjustment as set forth in the Plan.
|
Vesting Schedule
:
|
Provided the Participant has not incurred a Termination on or prior to the Vesting Date (as defined below), 100% of the Restricted Shares will vest on the third anniversary of the Date of Grant (the “
Vesting Date
”) and upon the Vesting Date, the Forfeiture Restriction shall lapse.
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates during the one-year period preceding the Termination Date;
|
(2)
|
with whom employees reporting to the Participant have had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates during the one-year period preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one-year period preceding the Termination Date.
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries or Affiliates, including, but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamins/minerals/supplements companies related to pre-clinical and clinical development, formulation, analysis,
manufacturing and/or packaging and any other technology, product or service of the type developed, manufactured or sold by the Company or any of its Subsidiaries or Affiliates (including, without limitation, any other business that the Company or any of its Subsidiaries or Affiliates have plans to engage in as of the Termination Date) in any geographical area where the Company or any of its Subsidiaries or Affiliates conducts business (a “
Competitive Business
”);
|
(2)
|
enter the employ of, or render any services to, any Person (or any division or controlled or controlling Affiliate of any Person) who or which engages in a Competitive Business;
|
(3)
|
acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or
|
(4)
|
interfere with, or attempt to interfere with, any business relationship (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries or Affiliates and any customer, client, supplier, or investor of the Company or any of its Subsidiaries or Affiliates.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries or Affiliates to leave such Employment; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries or Affiliates as of the Termination Date or who left the employment of the Company or any of its Subsidiaries or Affiliates coincident with, or within six (6) months prior to or after, the Termination Date; provided, however, that this restriction shall cease to apply to any employee who has not been employed by the Company or any of its Subsidiaries or Affiliates for at least six (6) months.
|
|
CATALENT, INC.
By:
Name:
Title:
Date:
|
|
PARTICIPANT NAME:
Address:
Personal Email Address:
Date:
|
|
SPOUSE NAME:
Address:
Date:
|
Participant
:
|
«First» «Last»
|
Date of Grant
:
|
[Date]
|
Performance Period
:
|
The period commencing on _________ and ending on __________.
|
Performance Shares
|
[Insert maximum number of shares], subject to adjustment as set forth in the Plan.
|
Performance Shares
:
|
«No_of_Performance_Shares _EPS», subject to adjustment as set forth in the Plan.
|
Performance Shares
:
|
«No_of_Performance_Shares_ RTSR_», subject to adjustment as set forth in the Plan.
|
(1)
|
with whom the Participant had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates during the one-year period preceding the Termination Date;
|
(2)
|
with whom employees reporting to the Participant have had personal contact or dealings on behalf of the Company or any of its Subsidiaries or Affiliates during the one-year period preceding the Termination Date; or
|
(3)
|
for whom the Participant had direct or indirect responsibility during the one-year period preceding the Termination Date.
|
(II)
|
During the Restricted Activity Period, the Participant will not directly or indirectly:
|
(1)
|
engage in any business that competes with the business of the Company or any of its Subsidiaries or Affiliates, including, but not limited to, providing formulation/dose form technologies and/or contract services to pharmaceutical, biotechnology, over-the-counter and vitamins/minerals/supplements companies related to pre-clinical and clinical development, formulation, analysis,
manufacturing and/or packaging and any other technology, product or service of the type developed, manufactured or sold by the Company or any of its Subsidiaries or Affiliates (including, without limitation, any other business that the Company or any of its Subsidiaries or Affiliates have plans to engage in as of the Termination Date) in any geographical area where the Company or any of its Subsidiaries or Affiliates conducts business (a “
Competitive Business
”);
|
(2)
|
enter the employ of, or render any services to, any Person (or any division or controlled or controlling Affiliate of any Person) who or which engages in a Competitive Business;
|
(3)
|
acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or
|
(4)
|
interfere with, or attempt to interfere with, any business relationship (whether formed before, on or after the Date of Grant) between the Company or any of its Subsidiaries or Affiliates and any customer, client, supplier, or investor of the Company or any of its Subsidiaries or Affiliates.
|
(1)
|
solicit or encourage any employee of the Company or any of its Subsidiaries or Affiliates to leave such Employment; or
|
(2)
|
hire any such employee who was employed by the Company or any of its Subsidiaries or Affiliates as of the Termination Date or who left the employment of the Company or any of its Subsidiaries or Affiliates coincident with, or within six (6) months prior to or after, the Termination Date; provided, however, that this restriction shall cease to apply to any employee who has
|
|
CATALENT, INC.
By:
Name:
Title:
Date:
|
|
PARTICIPANT NAME:
Address:
Personal Email Address:
Date:
|
|
SPOUSE NAME:
Address:
Date:
____________________________________
|
Performance Level
|
Cumulative
EPS
|
Percent of
Target Goal
|
EPS Performance
Percentage
|
Below Threshold
|
Below $_____
|
Below 75%
|
0%
|
Threshold
|
$____
|
75%
|
50%
|
|
Between $____
and $____
|
|
Linearly interpolate between 50% and 100%
|
Target
|
$____
|
100%
|
100%
|
|
Between $____ and $____
|
|
Linearly interpolate between 100% and 200%
|
Maximum
|
$____ (or higher)
|
125%
|
200%
|
Relative Total Shareholder Return
|
=
|
(Ending Stock Price -
Beginning Stock Price +
Assumed Dividend Reinvestment)
Beginning Stock Price
|
RTSR Percentile Rank
Relative to RTSR of Peer Group
|
Performance Level
|
RTSR Performance Percentage
|
Below 25th Percentile
|
Below Threshold
|
0%
|
25th Percentile
|
Threshold
|
50%
|
Between 25
th
Percentile
and Median
|
|
Linearly Interpolate Between
50% and 100%
|
Median
|
Target
|
100%
|
Between Median
and 75
th
Percentile
|
|
Linearly Interpolate Between 100% and 150%
|
75th Percentile and Above
|
Maximum
|
150%
|
Investor Contact:
Catalent, Inc.
Thomas Castellano
732-537-6325
investors@catalent.com
|
•
|
Q4'17 revenue $616.9 million increased 16% as-reported, or 19% in constant currency from the prior-year period.
|
•
|
FY'17 revenue $2,075.4 million increased 12% as-reported, or 15% in constant currency from the prior-year period.
|
•
|
Entered into an exclusive long-term supply agreement to produce the next generation of Pfizer's leading OTC pain relief product with the launch of new Advil Liqui-Gels Minis.
|
•
|
Increased spray drying and roller compaction capacity at our San Diego, California facility in response to market demand for solubility enhancement solutions.
|
|
Three Months Ended
June 30, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
616.9
|
|
|
$
|
532.2
|
|
|
$
|
(14.2
|
)
|
|
$
|
98.9
|
|
|
19
|
%
|
Cost of sales
|
401.7
|
|
|
344.4
|
|
|
(9.2
|
)
|
|
66.5
|
|
|
19
|
%
|
||||
Gross margin
|
215.2
|
|
|
187.8
|
|
|
(5.0
|
)
|
|
32.4
|
|
|
17
|
%
|
||||
Selling, general and administrative expenses
|
107.3
|
|
|
89.5
|
|
|
(1.2
|
)
|
|
19.0
|
|
|
21
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
7.5
|
|
|
1.9
|
|
|
—
|
|
|
5.6
|
|
|
*
|
|
||||
Restructuring and other
|
3.5
|
|
|
5.6
|
|
|
(0.1
|
)
|
|
(2.0
|
)
|
|
(36
|
)%
|
||||
Operating earnings
|
96.9
|
|
|
90.8
|
|
|
(3.7
|
)
|
|
9.8
|
|
|
11
|
%
|
||||
Interest expense, net
|
22.6
|
|
|
21.8
|
|
|
(0.5
|
)
|
|
1.3
|
|
|
6
|
%
|
||||
Other (income)/expense, net
|
5.1
|
|
|
(8.5
|
)
|
|
(0.5
|
)
|
|
14.1
|
|
|
*
|
|
||||
Earnings from continuing operations, before income
taxes
|
69.2
|
|
|
77.5
|
|
|
(2.7
|
)
|
|
(5.6
|
)
|
|
(7
|
)%
|
||||
Income tax expense
|
7.4
|
|
|
19.4
|
|
|
(0.8
|
)
|
|
(11.2
|
)
|
|
(58
|
)%
|
||||
Net earnings
|
61.8
|
|
|
58.1
|
|
|
(1.9
|
)
|
|
5.6
|
|
|
10
|
%
|
||||
Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
|
||||
Net earnings attributable to Catalent
|
$
|
61.8
|
|
|
$
|
58.1
|
|
|
$
|
(1.9
|
)
|
|
$
|
5.6
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding
|
125.1
|
|
|
124.8
|
|
|
|
|
|
|
|
|||||||
Weighted average diluted shares outstanding
|
127.3
|
|
|
125.9
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
0.49
|
|
|
0.47
|
|
|
|
|
|
|
|
|||||||
Diluted
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
0.49
|
|
|
0.46
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
257.1
|
|
|
$
|
224.8
|
|
|
$
|
(4.4
|
)
|
|
$
|
36.7
|
|
|
16
|
%
|
Segment EBITDA
|
65.2
|
|
|
59.0
|
|
|
(1.4
|
)
|
|
7.6
|
|
|
13
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
270.2
|
|
|
238.2
|
|
|
(5.4
|
)
|
|
37.4
|
|
|
16
|
%
|
||||
Segment EBITDA
|
90.9
|
|
|
75.7
|
|
|
(2.2
|
)
|
|
17.4
|
|
|
23
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
99.3
|
|
|
81.5
|
|
|
(4.7
|
)
|
|
22.5
|
|
|
28
|
%
|
||||
Segment EBITDA
|
17.1
|
|
|
13.7
|
|
|
(1.3
|
)
|
|
4.7
|
|
|
34
|
%
|
||||
Inter-segment revenue elimination
|
(9.7
|
)
|
|
(12.3
|
)
|
|
0.3
|
|
|
2.3
|
|
|
(19
|
)%
|
||||
Unallocated Costs
|
(42.7
|
)
|
|
(14.0
|
)
|
|
0.5
|
|
|
(29.2
|
)
|
|
*
|
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
616.9
|
|
|
$
|
532.2
|
|
|
$
|
(14.2
|
)
|
|
$
|
98.9
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
130.5
|
|
|
$
|
134.4
|
|
|
$
|
(4.4
|
)
|
|
$
|
0.5
|
|
|
*
|
|
|
Twelve Months Ended
June 30, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
(54.8
|
)
|
|
$
|
282.1
|
|
|
15
|
%
|
Cost of sales
|
1,420.8
|
|
|
1,260.5
|
|
|
(31.9
|
)
|
|
192.2
|
|
|
15
|
%
|
||||
Gross margin
|
654.6
|
|
|
587.6
|
|
|
(22.9
|
)
|
|
89.9
|
|
|
15
|
%
|
||||
Selling, general and administrative expenses
|
402.6
|
|
|
358.1
|
|
|
(5.8
|
)
|
|
50.3
|
|
|
14
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
9.8
|
|
|
2.7
|
|
|
—
|
|
|
7.1
|
|
|
*
|
|
||||
Restructuring and other
|
8.0
|
|
|
9.0
|
|
|
0.3
|
|
|
(1.3
|
)
|
|
(14
|
)%
|
||||
Operating earnings
|
234.2
|
|
|
217.8
|
|
|
(17.4
|
)
|
|
33.8
|
|
|
16
|
%
|
||||
Interest expense, net
|
90.1
|
|
|
88.5
|
|
|
(2.6
|
)
|
|
4.2
|
|
|
5
|
%
|
||||
Other (income)/expense, net
|
8.5
|
|
|
(15.6
|
)
|
|
(2.6
|
)
|
|
26.7
|
|
|
*
|
|
||||
Earnings from continuing operations, before income
taxes
|
135.6
|
|
|
144.9
|
|
|
(12.2
|
)
|
|
2.9
|
|
|
2
|
%
|
||||
Income tax expense
|
25.8
|
|
|
33.7
|
|
|
(2.7
|
)
|
|
(5.2
|
)
|
|
(15
|
)%
|
||||
Net earnings
|
109.8
|
|
|
111.2
|
|
|
(9.5
|
)
|
|
8.1
|
|
|
7
|
%
|
||||
Less: Net earnings/(loss) attributable to noncontrolling
interest, net of tax
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.3
|
|
|
*
|
|
||||
Net earnings attributable to Catalent
|
$
|
109.8
|
|
|
$
|
111.5
|
|
|
$
|
(9.5
|
)
|
|
$
|
7.8
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding
|
125.0
|
|
|
124.8
|
|
|
|
|
|
|
|
|||||||
Weighted average diluted shares outstanding
|
126.7
|
|
|
125.9
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
0.88
|
|
|
0.89
|
|
|
|
|
|
|
|
|||||||
Diluted
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
0.87
|
|
|
0.89
|
|
|
|
|
|
|
|
|
Twelve Months Ended
June 30, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
855.3
|
|
|
$
|
775.0
|
|
|
$
|
(11.3
|
)
|
|
$
|
91.6
|
|
|
12
|
%
|
Segment EBITDA
|
190.5
|
|
|
163.8
|
|
|
(6.3
|
)
|
|
33.0
|
|
|
20
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
910.1
|
|
|
806.4
|
|
|
(22.8
|
)
|
|
126.5
|
|
|
16
|
%
|
||||
Segment EBITDA
|
242.4
|
|
|
215.2
|
|
|
(9.6
|
)
|
|
36.8
|
|
|
17
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
348.8
|
|
|
307.5
|
|
|
(21.3
|
)
|
|
62.6
|
|
|
20
|
%
|
||||
Segment EBITDA
|
54.9
|
|
|
53.2
|
|
|
(5.6
|
)
|
|
7.3
|
|
|
14
|
%
|
||||
Inter-segment revenue elimination
|
(38.8
|
)
|
|
(40.8
|
)
|
|
0.6
|
|
|
1.4
|
|
|
(3
|
)%
|
||||
Unallocated Costs
|
(115.6
|
)
|
|
(57.9
|
)
|
|
2.0
|
|
|
(59.7
|
)
|
|
*
|
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
2,075.4
|
|
|
$
|
1,848.1
|
|
|
$
|
(54.8
|
)
|
|
$
|
282.1
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
372.2
|
|
|
$
|
374.3
|
|
|
$
|
(19.5
|
)
|
|
$
|
17.4
|
|
|
5
|
%
|
|
Quarter Ended
|
|
Twelve Months Ended
|
|
Quarter Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
|
June 30,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
|
March 31,
2017 |
|
June 30,
2017 |
|
June 30,
2017 |
||||||||||||||
Earnings from continuing operations
|
$
|
58.1
|
|
|
111.2
|
|
|
$
|
4.6
|
|
|
$
|
17.4
|
|
|
$
|
26.0
|
|
|
$
|
61.8
|
|
|
$
|
109.8
|
|
|
Interest expense, net
|
21.8
|
|
|
88.5
|
|
|
22.1
|
|
|
22.8
|
|
|
22.6
|
|
|
22.6
|
|
|
90.1
|
|
|||||||
Income tax expense
|
19.4
|
|
|
33.7
|
|
|
0.2
|
|
|
9.5
|
|
|
8.7
|
|
|
7.4
|
|
|
25.8
|
|
|||||||
Depreciation and amortization
|
35.1
|
|
|
140.6
|
|
|
35.8
|
|
|
35.5
|
|
|
36.5
|
|
|
38.7
|
|
|
146.5
|
|
|||||||
Noncontrolling interest
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
EBITDA from continuing operations
|
134.4
|
|
|
374.3
|
|
|
62.7
|
|
|
85.2
|
|
|
93.8
|
|
|
130.5
|
|
|
372.2
|
|
|||||||
Equity compensation
|
2.1
|
|
|
10.8
|
|
|
6.9
|
|
|
4.9
|
|
|
4.6
|
|
|
4.5
|
|
|
20.9
|
|
|||||||
Impairment charges and (gain)/loss on sale of assets
|
1.9
|
|
|
2.7
|
|
|
—
|
|
|
0.5
|
|
|
1.8
|
|
|
7.5
|
|
|
9.8
|
|
|||||||
Financing related expenses
and other
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|||||||
US GAAP Restructuring and
Other
(1)
|
5.6
|
|
|
9.0
|
|
|
1.1
|
|
|
3.3
|
|
|
0.1
|
|
|
3.5
|
|
|
8.0
|
|
|||||||
Acquisition, integration and other special items
|
5.8
|
|
|
18.2
|
|
|
4.8
|
|
|
3.9
|
|
|
8.4
|
|
|
8.5
|
|
|
25.6
|
|
|||||||
Foreign Exchange loss/(gain) (included in other, net)
(2)
|
(4.7
|
)
|
|
(10.5
|
)
|
|
(0.5
|
)
|
|
(3.2
|
)
|
|
9.2
|
|
|
4.1
|
|
|
9.6
|
|
|||||||
Other adjustments
|
(3.3
|
)
|
|
(3.3
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|||||||
Adjusted EBITDA
|
$
|
141.8
|
|
|
$
|
401.2
|
|
|
$
|
75.0
|
|
|
$
|
98.1
|
|
|
$
|
117.8
|
|
|
$
|
159.1
|
|
|
$
|
450.0
|
|
FX impact (unfavorable)
|
|
|
|
|
|
|
|
|
|
|
(4.3
|
)
|
|
(18.9
|
)
|
||||||||||||
Adjusted EBITDA - Constant Currency
|
|
|
|
|
|
|
|
|
|
|
$
|
163.4
|
|
|
$
|
468.9
|
|
(2)
|
Foreign exchange loss of
$9.6 million
for the twelve months ended
June 30, 2017
includes: (a)
$0.3 million
of unrealized
gains
related to foreign trade receivables and payables, (b)
$21.3 million
of unrealized
losses
on the ineffective portion of the Company's net investment hedge, and (c)
$13.2 million
of unrealized
gains
on inter-company loans. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate
losses
from the settlement of inter-company loans of
$1.8 million
. Inter-company loans are between Catalent entities and do not reflect the ongoing results of the Company's trade operations.
|
|
Quarter Ended
|
|
Twelve Months Ended
|
|
Quarter Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
|
June 30,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
|
March 31,
2017 |
|
June 30,
2017 |
|
June 30,
2017 |
||||||||||||||
Net earnings
|
$
|
58.1
|
|
|
$
|
111.2
|
|
|
$
|
4.6
|
|
|
$
|
17.4
|
|
|
$
|
26.0
|
|
|
$
|
61.8
|
|
|
$
|
109.8
|
|
Amortization
(1)
|
11.4
|
|
|
46.4
|
|
|
11.0
|
|
|
11.1
|
|
|
11.0
|
|
|
11.2
|
|
|
44.3
|
|
|||||||
Net (earnings)/loss attributable to noncontrolling interest, net of tax
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Equity compensation
|
2.1
|
|
|
10.8
|
|
|
6.9
|
|
|
4.9
|
|
|
4.6
|
|
|
4.5
|
|
|
20.9
|
|
|||||||
Impairment charges and loss on sale of assets
|
1.9
|
|
|
2.7
|
|
|
—
|
|
|
0.5
|
|
|
1.8
|
|
|
7.5
|
|
|
9.8
|
|
|||||||
Financing related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|||||||
U.S. GAAP restructuring
(2)
|
5.6
|
|
|
9.0
|
|
|
1.1
|
|
|
3.3
|
|
|
0.1
|
|
|
3.5
|
|
|
8.0
|
|
|||||||
Acquisition, integration and other special items
|
5.8
|
|
|
18.2
|
|
|
4.8
|
|
|
3.9
|
|
|
8.4
|
|
|
8.5
|
|
|
25.6
|
|
|||||||
Foreign exchange loss/(gain) (included in other (income)/expense, net)
|
(4.7
|
)
|
|
(10.5
|
)
|
|
(0.5
|
)
|
|
(3.2
|
)
|
|
9.2
|
|
|
4.1
|
|
|
9.6
|
|
|||||||
Other adjustments
|
(3.3
|
)
|
|
(3.3
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|||||||
Estimated tax effect of
adjustments
(3)
|
(6.1
|
)
|
|
(22.7
|
)
|
|
(6.5
|
)
|
|
(6.5
|
)
|
|
(10.7
|
)
|
|
(12.2
|
)
|
|
(35.9
|
)
|
|||||||
Discrete income tax expense/(benefit) items
(4)
|
(5.9
|
)
|
|
(8.9
|
)
|
|
(1.8
|
)
|
|
(0.2
|
)
|
|
(1.6
|
)
|
|
(6.8
|
)
|
|
(10.4
|
)
|
|||||||
Adjusted net income
|
$
|
64.9
|
|
|
$
|
153.2
|
|
|
$
|
19.6
|
|
|
$
|
34.7
|
|
|
$
|
48.7
|
|
|
$
|
82.6
|
|
|
$
|
185.6
|
|
(1)
|
Represents the amortization attributable to purchase accounting for previously completed business combinations.
|
(3)
|
The tax effect of adjustments to Adjusted Net Income is computed by applying the statutory tax rate in the jurisdictions to the income or expense items which are adjusted in the period presented; if a valuation allowance exists, the rate applied is zero.
|
|
June 30,
2017 |
|
June 30,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
288.3
|
|
|
$
|
131.6
|
|
Trade receivables, net
|
488.8
|
|
|
414.8
|
|
||
Inventories
|
184.9
|
|
|
154.8
|
|
||
Prepaid expenses and other
|
97.8
|
|
|
89.0
|
|
||
Total current assets
|
1,059.8
|
|
|
790.2
|
|
||
Property, plant, and equipment, net
|
995.9
|
|
|
905.8
|
|
||
Other non-current assets, including intangible assets
|
1,398.6
|
|
|
1,395.1
|
|
||
Total assets
|
$
|
3,454.3
|
|
|
$
|
3,091.1
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term obligations and other short-term borrowings
|
$
|
24.6
|
|
|
$
|
27.7
|
|
Accounts payable
|
163.2
|
|
|
143.7
|
|
||
Other accrued liabilities
|
281.2
|
|
|
219.8
|
|
||
Total current liabilities
|
469.0
|
|
|
391.2
|
|
||
Long-term obligations, less current portion
|
2,055.1
|
|
|
1,832.8
|
|
||
Other non-current liabilities
|
206.7
|
|
|
231.2
|
|
||
Commitment and contingencies
(1)
|
—
|
|
|
—
|
|
||
Total shareholders' equity
|
723.5
|
|
|
635.9
|
|
||
Total liabilities and shareholders' equity
|
$
|
3,454.3
|
|
|
$
|
3,091.1
|
|
(1)
|
Please refer to note
14
of the consolidated financial statements within our Annual Report on Form 10-K for the year ended
June 30, 2017
.
|
|
Twelve Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net cash provided by operating activities
|
299.5
|
|
|
155.3
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Acquisition of property and equipment and other productive assets
|
(139.8
|
)
|
|
(139.6
|
)
|
||
Proceeds from sale of property and equipment
|
0.7
|
|
|
1.9
|
|
||
Payment for acquisitions, net of cash acquired
|
(169.9
|
)
|
|
—
|
|
||
Net cash (used in)/provided by investing activities
|
(309.0
|
)
|
|
(137.7
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net change in other borrowings
|
(5.8
|
)
|
|
2.3
|
|
||
Proceeds from borrowing, net
|
397.4
|
|
|
—
|
|
||
Payments related to long-term obligations
|
(218.5
|
)
|
|
(18.6
|
)
|
||
Call premium payments and financing fees paid
|
(6.4
|
)
|
|
—
|
|
||
Purchase of Redeemable Noncontrolling Interest Shares
|
—
|
|
|
(5.8
|
)
|
||
Cash paid, in lieu of equity, for tax withholding obligations
|
(5.4
|
)
|
|
(8.7
|
)
|
||
Net cash provided by/(used in) financing activities
|
161.3
|
|
|
(30.8
|
)
|
||
Effect of foreign currency on cash
|
4.9
|
|
|
(6.5
|
)
|
||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS
|
156.7
|
|
|
(19.7
|
)
|
||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
131.6
|
|
|
151.3
|
|
||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
288.3
|
|
|
$
|
131.6
|
|
A.
|
Role and Responsibility of the Board
|
B.
|
Board Composition, Structure and Policies
|
1.
|
Independence of Directors
. The Company defines an “independent” director in accordance with Section 303A.02 of the Listed Company Manual of the New York Stock Exchange (“
NYSE
”). The Board shall make an affirmative determination at least annually as to the independence of each director. The NYSE independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. Because it is not possible to anticipate or explicitly provide for all potential conflicts of interest that may affect independence, the Board is also responsible for determining affirmatively, as to each independent director, that no material relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board will broadly consider all relevant facts and circumstances, including information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management. As the concern is independence from management, the Board does not view ownership of even a significant amount of stock, by itself, as a bar to an independence finding.
|
2.
|
Selection of Chair of the Board and Chief Executive Officer
. The Board shall select its chair (“
Chair
”) and the Company’s Chief Executive Officer (“
CEO
”) in a manner it considers to be in the best interests of both the Company and the Company’s stockholders. Therefore, the Board does not have a policy on whether the role of Chair and CEO should be separate or combined and, if it is to be separate, whether the Chair should be selected from the independent directors.
|
3.
|
Director Qualification Standards
. The Nominating and Corporate Governance Committee is responsible for reviewing the qualifications of potential director candidates and recommending to the Board candidates to be nominated for election to the Board. It is expected that the Nominating and Corporate Governance Committee will consider (a) minimum individual qualifications, including
|
4.
|
Board Composition
. The Board should monitor the mix of specific experience, qualifications and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure. The size of the Board shall be as provided in the Company’s bylaws and certificate of incorporation or as approved by the Board. The Nominating and Corporate Governance Committee is responsible for periodically reviewing and making recommendations to the Board concerning the appropriate composition and size of the Board in order to ensure that the Board has the requisite expertise and that its membership consists of persons with sufficiently diverse and independent backgrounds.
|
5.
|
Change in Present Job Responsibility
. Directors should offer to resign upon a significant change of the director’s principal current employer or principal employment, or other similarly significant change in professional occupation or association. The Board shall determine the action, if any, to be taken with respect to the offer to resign.
|
6.
|
Mandatory Resignation Policy in Uncontested Elections
. In an uncontested election of directors (
i.e.
, an election of directors at any meeting of stockholders other than a Contested Election Meeting (as defined in the Company’s bylaws)) any nominee for director who does not receive more votes for such nominee’s election than votes cast against such nominee’s election will promptly offer such nominee’s resignation to the Chair or the Secretary of the Company following certification of the stockholder vote.
|
7.
|
Retirement Age for Directors
. Directors are required to tender their resignation to the Board when they reach the age of 75. A director elected to the Board prior to that director’s 75
th
birthday may continue to serve until the annual stockholders meeting coincident with or next following such 75
th
birthday. On the recommendation of the Nominating and Corporate Governance Committee, the Board may accept such resignation or decline such resignation and waive this requirement (for a definite or indefinite period, as determined by the Board) as to any director if it deems such waiver to be in the best interests of the Company and its stockholders.
|
8.
|
Director Orientation and Continuing Education
. Management, working with the Board, will provide an orientation process for new directors and coordinate director continuing education programs. The orientation programs are designed to familiarize new directors with the Company’s businesses, strategies and challenges and to assist new directors in developing and maintaining skills necessary or appropriate for the performance of their responsibilities. As appropriate, management shall prepare additional educational sessions for directors on matters relevant to the Company and its business. Directors are also encouraged to participate in educational programs relevant to their responsibilities, including programs conducted by universities and other educational institutions.
|
9.
|
Lead Director
. Whenever the Chair is also the CEO or is a director who does not otherwise qualify as an “independent director”, the independent directors shall elect from among themselves a lead director (the “
Lead Director
”) of the Board at least once annually according to the following selection process:
|
(a)
|
The Nominating and Corporate Governance Committee will nominate a director who qualifies as an independent director to serve as the Lead Director. In nominating a candidate for Lead
|
(b)
|
Each director who qualifies as an independent director will be given the opportunity, by secret ballot, to vote in favor of the Lead Director nominee or to write in a candidate of such director’s own choice. In electing a Lead Director, the independent directors may consider these Corporate Governance Guidelines and the criteria and qualifications set forth in
Annex A
hereto.
|
(c)
|
The Lead Director will be elected by a majority of the votes cast pursuant to the secret ballot described in clause (b) above. If no independent director receives a majority of the votes cast pursuant to such ballot, one or more run-off elections between the independent directors who received the two (2) highest vote tallies shall subsequently be conducted in accordance with the procedures described in clause (b) above until a Lead Director has been elected by a majority of the votes cast by the independent directors.
|
10.
|
Term Limits
. The Board does not have a policy to impose term limits for directors because such a policy may deprive the Board of the service of directors who have developed, through valuable experience over time, an increasing insight into and familiarity with the Company and its operations.
|
1.
|
Frequency of Meetings
. The Board currently plans at least four meetings each year, with further meetings to occur (or action to be taken by unanimous written consent) at the discretion of the Board.
|
2.
|
Selection of Board Agenda Items
. The Chair, with approval from the Lead Director (if one has been elected), shall set the agenda for Board meetings with the understanding that other members of the Board may provide suggestions for agenda items that are aligned with the advisory and monitoring functions of the Board. Agenda items that fall within the scope of responsibilities of a Board committee are reviewed with the chair of that committee. Any member of the Board may request that an item be included on the agenda.
|
3.
|
Access to Management and Independent Advisors
. Board members shall have free access to all members of management and employees of the Company. Generally, any meeting or contact that a director wishes to initiate with an employee should be arranged through the CEO or Secretary of the Company. The Board expects that there will be opportunities for directors to meet with the CEO and other members of senior management in Board and committee meetings and in other formal or informal settings. In addition, Board members may consult with independent legal, financial, accounting and other advisors, at the Company’s expense, as necessary and appropriate and in accordance with the Board committee charters, to assist in their duties to the Company and its stockholders.
|
4.
|
Executive Sessions
. To ensure free and open discussion and communication among the non-management directors of the Board, the non-management directors will meet in executive session at most Board meetings with no members of management present. If the group of non-management directors includes directors who have not been determined to be independent, then the independent directors will meet in a private session at least once a year. The Lead Director, if any, or a director designated by the non-management or independent directors, as applicable, will preside at the executive sessions.
|
E.
|
Expectations of Directors
|
1.
|
Commitment and Attendance
. All directors are expected to make best efforts to attend all meetings of the Board, meetings of the committees of which they are members and the annual meeting of stockholders. Directors are encouraged to attend Board meetings and meetings of committees of which they are members in person but may also attend such meetings by telephone or video conference.
|
2.
|
Participation in Meetings
. Each director should be sufficiently familiar with the business of the Company, including its financial statements and capital structure, and the risks and competition it faces, to facilitate active and effective participation in the deliberations of the Board and of each committee on which such director serves. Management will make appropriate personnel available to answer any question a director may have about any aspect of the Company’s business. Directors should also review the materials provided by management and advisors in advance of the meetings of the Board and its committees and should arrive prepared to discuss the issues presented.
|
3.
|
Loyalty and Ethics
. In their roles as directors, all directors owe a duty of loyalty to the Company. The Company has adopted Standards of Business Conduct (the “
Standards
”), and directors are expected to adhere to the Standards.
|
4.
|
Other Directorships and Significant Activities
. Serving on the Board requires significant time and attention. Directors are expected to spend the time needed and meet as often as necessary to discharge their responsibilities properly. It is expected that, without specific approval from the Board, no director will serve on more than five public company boards (including the Company’s Board) and no member of the Audit Committee will serve on more than three public company audit committees (including the Company’s Audit Committee);
provided, however
, that, a member of the Audit Committee may serve on more than three public company audit committees (including the Company’s Audit Committee) if the Board (i) determines that such concurrent service would not impair the ability of any such director to effectively serve on the Company’s Audit Committee and (ii) discloses such determination either on or through the Company’s website or in the annual proxy statement. In addition, directors who also serve as CEOs or in equivalent positions at other public companies generally should not serve on more than two outside public company boards. Directors should advise the chair of the Nominating and Corporate Governance Committee and the CEO before accepting membership on other boards of directors or other significant commitments involving affiliation with other businesses, non-profit entities or governmental units.
|
5.
|
Confidentiality
. The proceedings and deliberations of the Board and its committees are confidential. Each director shall maintain the confidentiality of information received in connection with such director’s service on the Board.
|
G.
|
Evaluation of Board Performance
|
H.
|
Board Compensation
|
I.
|
Communications with Interested Parties
|
J.
|
Communications with Non-Management Directors
|
•
|
Breadth of senior management and leadership experience with one or more companies, including having previously served as the CEO of a public company;
|
•
|
Breadth of corporate governance leadership experience with one or more companies, including current or prior service on the board of directors of multiple public companies;
|
•
|
Ability and willingness to commit the time and energy necessary to properly carry out the Lead Director’s responsibilities set forth on Annex B to the Company’s Corporate Governance Guidelines;
|
•
|
Relationship with Company management, taking into consideration both the director’s independence from Company management and the director’s ability to effectively, efficiently and professionally work with Company management;
|
•
|
Ability to effectively communicate with major stockholders of the Company, if requested to do so;
|
•
|
Ability to lead the Company during a crisis, if necessary;
|
•
|
Understanding of the Company’s business, operations, industry and corporate strategy;
|
•
|
Interpersonal skills necessary to build consensus and foster communication among directors;
|
•
|
Personal judgment, confidence and integrity; and
|
•
|
Such other qualifications and criteria as deemed necessary or appropriate.
|
•
|
Preside over all meetings of the Board at which the Chair is not present, including any executive sessions of the independent directors or the non-management directors;
|
•
|
Assist in scheduling Board meetings and approve meeting schedules to ensure that there is sufficient time for discussion of all agenda items;
|
•
|
Request the inclusion of certain materials for Board meetings;
|
•
|
Approve, as needed, information sent to the Board;
|
•
|
Communicate to the CEO, together with the chair of the Compensation Committee, the results of the evaluation of CEO performance conducted by the Board or one of its committees;
|
•
|
Collaborate with the CEO on Board meeting agendas and approve such agendas;
|
•
|
Collaborate with the CEO in determining the need for special meetings of the Board;
|
•
|
Provide leadership and serve as temporary Chair or CEO in the event of the inability of the Chair or CEO to fulfill such role(s) due to crisis or other event or circumstance which would make leadership by existing management inappropriate or ineffective, in which case the Lead Director shall have the authority to convene meetings of the full Board or management;
|
•
|
Be available for consultation and direct communication if requested by major stockholders;
|
•
|
Act as the liaison between the independent or non-management directors and the Chair, as appropriate;
|
•
|
Call meetings of the independent or non-management directors when necessary and appropriate; and
|
•
|
Recommend to the Board, in concert with the chair of the respective Board committees, the retention of consultants and advisors who directly report to the Board, including such independent legal, financial or other advisors as he or she deems appropriate, without consulting or obtaining the advance authorization of any officer of the Company.
|