|
FORM 8-K
CURRENT REPORT
|
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Delaware
(State or other jurisdiction of Incorporation)
|
001-36587
(Commission File Number) |
20-8737688
(IRS Employer Identification Number)
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|
|
|||
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.
|
(d)
|
Exhibits. The following Exhibits are furnished as part of this Current Report on Form 8-K.
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|
Catalent, Inc.
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|
(Registrant)
|
|
|
By:
|
/s/ STEVEN L. FASMAN
|
|
Steven L. Fasman
|
|
Senior Vice President & General Counsel
and Secretary
|
/s/ Wetteny Joseph
|
|
February 1, 2018
|
Wetteny Joseph
|
|
Date
|
Investor Contact:
Catalent, Inc.
Thomas Castellano
732-537-6325
investors@catalent.com
|
•
|
Q2'18 revenue of $606.3 million increased 25% as-reported, or 22% in constant currency from the prior-year period.
|
•
|
Q2'18 YTD revenue of $1,150.2 million increased 24% as-reported, or 22% in constant currency from the prior-year period.
|
•
|
FY’18 guidance raised to reflect continued strength in the business.
|
•
|
Wetteny Joseph appointed as Chief Financial Officer
|
|
Three Months Ended
December 31, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
606.3
|
|
|
$
|
483.7
|
|
|
$
|
17.0
|
|
|
$
|
105.6
|
|
|
22
|
%
|
Cost of sales
|
418.9
|
|
|
335.8
|
|
|
12.7
|
|
|
70.4
|
|
|
21
|
%
|
||||
Gross margin
|
187.4
|
|
|
147.9
|
|
|
4.3
|
|
|
35.2
|
|
|
24
|
%
|
||||
Selling, general and administrative expenses
|
114.3
|
|
|
96.2
|
|
|
1.1
|
|
|
17.0
|
|
|
18
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
4.2
|
|
|
0.5
|
|
|
0.1
|
|
|
3.6
|
|
|
*
|
|
||||
Restructuring and other
|
0.1
|
|
|
3.3
|
|
|
—
|
|
|
(3.2
|
)
|
|
(97
|
)%
|
||||
Operating earnings
|
68.8
|
|
|
47.9
|
|
|
3.1
|
|
|
17.8
|
|
|
37
|
%
|
||||
Interest expense, net
|
27.2
|
|
|
22.8
|
|
|
0.3
|
|
|
4.1
|
|
|
18
|
%
|
||||
Other (income)/expense, net
|
13.6
|
|
|
(1.8
|
)
|
|
1.4
|
|
|
14.0
|
|
|
*
|
|
||||
Earnings from continuing operations, before income
taxes
|
28.0
|
|
|
26.9
|
|
|
1.4
|
|
|
(0.3
|
)
|
|
(1
|
)%
|
||||
Income tax expense
|
49.9
|
|
|
9.5
|
|
|
—
|
|
|
40.4
|
|
|
*
|
|
||||
Net earnings/(loss)
|
$
|
(21.9
|
)
|
|
$
|
17.4
|
|
|
$
|
1.4
|
|
|
$
|
(40.7
|
)
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding
|
133.0
|
|
|
124.9
|
|
|
|
|
|
|
|
|||||||
Weighted average diluted shares outstanding
|
133.0
|
|
|
126.4
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings/(loss)
|
$
|
(0.16
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|||||
Diluted
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings/(loss)
|
$
|
(0.16
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
228.1
|
|
|
$
|
201.9
|
|
|
$
|
7.1
|
|
|
$
|
19.1
|
|
|
9
|
%
|
Segment EBITDA
|
50.1
|
|
|
43.4
|
|
|
1.1
|
|
|
5.6
|
|
|
13
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
285.4
|
|
|
214.0
|
|
|
7.0
|
|
|
64.4
|
|
|
30
|
%
|
||||
Segment EBITDA
|
81.1
|
|
|
50.0
|
|
|
2.0
|
|
|
29.1
|
|
|
58
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
108.7
|
|
|
77.0
|
|
|
3.7
|
|
|
28.0
|
|
|
36
|
%
|
||||
Segment EBITDA
|
19.0
|
|
|
11.6
|
|
|
1.0
|
|
|
6.4
|
|
|
55
|
%
|
||||
Inter-segment revenue elimination
|
(15.9
|
)
|
|
(9.2
|
)
|
|
(0.8
|
)
|
|
(5.9
|
)
|
|
64
|
%
|
||||
Unallocated Costs
|
(48.2
|
)
|
|
(19.8
|
)
|
|
(1.3
|
)
|
|
(27.1
|
)
|
|
*
|
|
||||
Combined Total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
606.3
|
|
|
$
|
483.7
|
|
|
$
|
17.0
|
|
|
$
|
105.6
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
102.0
|
|
|
$
|
85.2
|
|
|
$
|
2.8
|
|
|
$
|
14.0
|
|
|
16
|
%
|
|
Six Months Ended
December 31, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Net revenue
|
$
|
1,150.2
|
|
|
$
|
925.9
|
|
|
$
|
23.5
|
|
|
$
|
200.8
|
|
|
22
|
%
|
Cost of sales
|
822.7
|
|
|
653.9
|
|
|
18.8
|
|
|
150.0
|
|
|
23
|
%
|
||||
Gross margin
|
327.5
|
|
|
272.0
|
|
|
4.7
|
|
|
50.8
|
|
|
19
|
%
|
||||
Selling, general and administrative expenses
|
221.3
|
|
|
194.4
|
|
|
1.4
|
|
|
25.5
|
|
|
13
|
%
|
||||
Impairment charges and (gain)/loss on sale of assets
|
4.2
|
|
|
0.5
|
|
|
0.1
|
|
|
3.6
|
|
|
*
|
|
||||
Restructuring and other
|
1.3
|
|
|
4.4
|
|
|
—
|
|
|
(3.1
|
)
|
|
(70
|
)%
|
||||
Operating earnings
|
100.7
|
|
|
72.7
|
|
|
3.2
|
|
|
24.8
|
|
|
34
|
%
|
||||
Interest expense, net
|
51.5
|
|
|
44.9
|
|
|
0.3
|
|
|
6.3
|
|
|
14
|
%
|
||||
Other (income)/expense, net
|
19.3
|
|
|
(3.9
|
)
|
|
2.3
|
|
|
20.9
|
|
|
*
|
|
||||
Earnings from continuing operations, before income
taxes |
29.9
|
|
|
31.7
|
|
|
0.6
|
|
|
(2.4
|
)
|
|
(8
|
)%
|
||||
Income tax expense
|
48.0
|
|
|
9.7
|
|
|
(0.3
|
)
|
|
38.6
|
|
|
*
|
|
||||
Net earnings/(loss)
|
$
|
(18.1
|
)
|
|
$
|
22.0
|
|
|
$
|
0.9
|
|
|
$
|
(41.0
|
)
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amounts attributable to Catalent:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding
|
129.3
|
|
|
124.9
|
|
|
|
|
|
|
|
|||||||
Weighted average diluted shares outstanding
|
129.3
|
|
|
126.3
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per share attributable to Catalent:
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings/(loss)
|
$
|
(0.14
|
)
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|||||
Diluted
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings/(loss)
|
$
|
(0.14
|
)
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31, |
|
FX impact
|
|
Constant Currency Increase/(Decrease)
|
|||||||||||||
|
2017
|
|
2016
|
|
|
|
Change $
|
|
Change %
|
|||||||||
Softgel Technologies
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
447.8
|
|
|
$
|
388.3
|
|
|
$
|
11.1
|
|
|
$
|
48.4
|
|
|
12
|
%
|
Segment EBITDA
|
85.2
|
|
|
73.9
|
|
|
1.2
|
|
|
10.1
|
|
|
14
|
%
|
||||
Drug Delivery Solutions
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
511.2
|
|
|
405.3
|
|
|
9.5
|
|
|
96.4
|
|
|
24
|
%
|
||||
Segment EBITDA
|
128.5
|
|
|
92.0
|
|
|
2.3
|
|
|
34.2
|
|
|
37
|
%
|
||||
Clinical Supply Services
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
218.4
|
|
|
152.0
|
|
|
4.1
|
|
|
62.3
|
|
|
41
|
%
|
||||
Segment EBITDA
|
35.7
|
|
|
22.1
|
|
|
1.1
|
|
|
12.5
|
|
|
57
|
%
|
||||
Inter-segment revenue elimination
|
(27.2
|
)
|
|
(19.7
|
)
|
|
(1.2
|
)
|
|
(6.3
|
)
|
|
32
|
%
|
||||
Unallocated Costs
|
(82.2
|
)
|
|
(40.1
|
)
|
|
(2.3
|
)
|
|
(39.8
|
)
|
|
99
|
%
|
||||
Combined total
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
1,150.2
|
|
|
$
|
925.9
|
|
|
$
|
23.5
|
|
|
$
|
200.8
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBITDA from continuing operations
|
$
|
167.2
|
|
|
$
|
147.9
|
|
|
$
|
2.3
|
|
|
$
|
17.0
|
|
|
11
|
%
|
|
Quarter Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
|
December 31,
2016 |
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
|
December 31,
2017 |
||||||||||||
Earnings/(loss) from continuing operations
|
$
|
17.4
|
|
|
$
|
26.0
|
|
|
$
|
61.8
|
|
|
$
|
3.8
|
|
|
$
|
(21.9
|
)
|
|
$
|
69.7
|
|
Interest expense, net
|
22.8
|
|
|
22.6
|
|
|
22.6
|
|
|
24.3
|
|
|
27.2
|
|
|
96.7
|
|
||||||
Income tax expense/(benefit)
|
9.5
|
|
|
8.7
|
|
|
7.4
|
|
|
(1.9
|
)
|
|
49.9
|
|
|
64.1
|
|
||||||
Depreciation and amortization
|
35.5
|
|
|
36.5
|
|
|
38.7
|
|
|
39.0
|
|
|
46.8
|
|
|
161.0
|
|
||||||
EBITDA from continuing operations
|
85.2
|
|
|
93.8
|
|
|
130.5
|
|
|
65.2
|
|
|
102.0
|
|
|
391.5
|
|
||||||
Equity compensation
|
4.9
|
|
|
4.6
|
|
|
4.5
|
|
|
7.0
|
|
|
8.5
|
|
|
24.6
|
|
||||||
Impairment charges and (gain)/loss on sale of assets
|
0.5
|
|
|
1.8
|
|
|
7.5
|
|
|
—
|
|
|
4.2
|
|
|
13.5
|
|
||||||
Financing related expenses
and other
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
11.8
|
|
||||||
US GAAP Restructuring and
Other
|
3.3
|
|
|
0.1
|
|
|
3.5
|
|
|
1.2
|
|
|
0.1
|
|
|
4.9
|
|
||||||
Acquisition, integration and other special items
|
3.9
|
|
|
8.4
|
|
|
8.5
|
|
|
11.0
|
|
|
11.8
|
|
|
39.7
|
|
||||||
Foreign Exchange loss/(gain) (included in other, net)
(1)
|
(3.2
|
)
|
|
9.2
|
|
|
4.1
|
|
|
6.5
|
|
|
0.6
|
|
|
20.4
|
|
||||||
Other adjustments
|
(0.8
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
—
|
|
|
0.3
|
|
|
0.7
|
|
||||||
Adjusted EBITDA
|
$
|
98.1
|
|
|
$
|
117.8
|
|
|
$
|
159.1
|
|
|
$
|
90.9
|
|
|
$
|
139.3
|
|
|
$
|
507.1
|
|
FX impact (unfavorable)
|
|
|
|
|
|
|
|
|
2.8
|
|
|
|
|||||||||||
Adjusted EBITDA - Constant Currency
|
|
|
|
|
|
|
|
|
$
|
136.5
|
|
|
|
(1)
|
Foreign exchange loss of
$20.4 million
for the twelve months ended
December 31, 2017
includes: (a)
$5.8 million
of unrealized
losses
related to foreign trade receivables and payables, (b)
$45.1 million
of unrealized
losses
on the ineffective portion of the Company's net investment hedge, and (c)
$10.1 million
of unrealized
gains
on inter-company loans. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate
gains
from the settlement of inter-company loans of
$20.3 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
|
|||||||||||||||||||||
|
December 31,
2016 |
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
|
December 31,
2017 |
||||||||||||
Net earnings/(loss)
|
$
|
17.4
|
|
|
$
|
26.0
|
|
|
$
|
61.8
|
|
|
$
|
3.8
|
|
|
$
|
(21.9
|
)
|
|
$
|
69.7
|
|
Amortization
(1)
|
11.1
|
|
|
11.0
|
|
|
11.2
|
|
|
11.4
|
|
|
16.1
|
|
|
49.7
|
|
||||||
Equity compensation
|
4.9
|
|
|
4.6
|
|
|
4.5
|
|
|
7.0
|
|
|
8.5
|
|
|
24.6
|
|
||||||
Impairment charges and loss on sale of assets
|
0.5
|
|
|
1.8
|
|
|
7.5
|
|
|
—
|
|
|
4.2
|
|
|
13.5
|
|
||||||
Financing related expenses
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|
11.8
|
|
||||||
U.S. GAAP restructuring and other
|
3.3
|
|
|
0.1
|
|
|
3.5
|
|
|
1.2
|
|
|
0.1
|
|
|
4.9
|
|
||||||
Acquisition, integration and other special items
|
3.9
|
|
|
8.4
|
|
|
8.5
|
|
|
11.0
|
|
|
11.8
|
|
|
39.7
|
|
||||||
Foreign Exchange loss/(gain) (included in other, net)
(2)
|
(3.2
|
)
|
|
9.2
|
|
|
4.1
|
|
|
6.5
|
|
|
0.6
|
|
|
20.4
|
|
||||||
Other adjustments
|
(0.8
|
)
|
|
(0.1
|
)
|
|
0.5
|
|
|
—
|
|
|
0.3
|
|
|
0.7
|
|
||||||
Estimated tax effect of
adjustments
(3)
|
(6.5
|
)
|
|
(10.7
|
)
|
|
(12.2
|
)
|
|
(11.2
|
)
|
|
(14.0
|
)
|
|
(48.1
|
)
|
||||||
Discrete income tax expense/(benefit) items
(4)
|
(0.2
|
)
|
|
(1.6
|
)
|
|
(6.8
|
)
|
|
(2.6
|
)
|
|
(2.8
|
)
|
|
(13.8
|
)
|
||||||
Tax law changes provision
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46.0
|
|
|
46.0
|
|
||||||
Adjusted net income
|
$
|
34.7
|
|
|
$
|
48.7
|
|
|
$
|
82.6
|
|
|
$
|
27.1
|
|
|
$
|
60.7
|
|
|
$
|
219.1
|
|
(2)
|
Foreign exchange loss of
$20.4 million
for the twelve months ended
December 31, 2017
includes: (a)
$5.8 million
of unrealized
losses
related to foreign trade receivables and payables, (b)
$45.1 million
of unrealized
losses
on the ineffective portion of the Company's net investment hedge, and (c)
$10.1 million
of unrealized
gains
on inter-company loans. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate
gains
from the settlement of inter-company loans of
$20.3 million
. Inter-company loans are between Catalent entities and do not reflect the ongoing results of the Company's trade operations.
|
(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.
|
|
December 31,
2017 |
|
June 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
329.5
|
|
|
$
|
288.3
|
|
Trade receivables, net
|
427.9
|
|
|
488.8
|
|
||
Inventories
|
212.7
|
|
|
184.9
|
|
||
Prepaid expenses and other
|
105.4
|
|
|
97.8
|
|
||
Total current assets
|
1,075.5
|
|
|
1,059.8
|
|
||
Property, plant, and equipment, net
|
1,256.2
|
|
|
995.9
|
|
||
Other non-current assets, including intangible assets
|
2,055.4
|
|
|
1,398.6
|
|
||
Total assets
|
$
|
4,387.1
|
|
|
$
|
3,454.3
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term obligations and other short-term borrowings
|
$
|
69.9
|
|
|
$
|
24.6
|
|
Accounts payable
|
164.3
|
|
|
163.2
|
|
||
Other accrued liabilities
|
249.8
|
|
|
281.2
|
|
||
Total current liabilities
|
484.0
|
|
|
469.0
|
|
||
Long-term obligations, less current portion
|
2,672.5
|
|
|
2,055.1
|
|
||
Other non-current liabilities
|
225.1
|
|
|
206.7
|
|
||
Commitment and contingencies
(1)
|
—
|
|
|
—
|
|
||
Total shareholders' equity
|
1,005.5
|
|
|
723.5
|
|
||
Total liabilities and shareholders' equity
|
$
|
4,387.1
|
|
|
$
|
3,454.3
|
|
(1)
|
Please refer to note
13
of the consolidated financial statements within our Quarterly Report on Form 10-Q for the quarter ended
December 31, 2017
.
|
|
Six Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net cash provided by operating activities
|
176.0
|
|
|
96.0
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Acquisition of property and equipment and other productive assets
|
(82.9
|
)
|
|
(54.1
|
)
|
||
Proceeds from sale of property and equipment
|
1.8
|
|
|
1.3
|
|
||
Proceeds from sale of subsidiaries
|
3.4
|
|
|
—
|
|
||
Payment for acquisitions, net of cash acquired
|
(748.0
|
)
|
|
(85.7
|
)
|
||
Net cash provided by/(used in) investing activities from continuing operations
|
(825.7
|
)
|
|
(138.5
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net change in other borrowings
|
(0.6
|
)
|
|
(5.6
|
)
|
||
Proceeds from borrowing, net
|
442.6
|
|
|
397.4
|
|
||
Payments related to long-term obligations
|
(9.4
|
)
|
|
(209.2
|
)
|
||
Call premium payments and financing fees paid
|
(15.6
|
)
|
|
(6.4
|
)
|
||
Proceeds from sale of common stock, net
|
277.8
|
|
|
—
|
|
||
Cash paid, in lieu of equity, for tax withholding obligations
|
(12.4
|
)
|
|
(0.5
|
)
|
||
Net cash provided by financing activities
|
682.4
|
|
|
175.7
|
|
||
Effect of foreign currency on cash
|
8.5
|
|
|
(9.0
|
)
|
||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS
|
41.2
|
|
|
124.2
|
|
||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
288.3
|
|
|
131.6
|
|
||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
329.5
|
|
|
$
|
255.8
|
|