Delaware | 20-8737688 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
14 Schoolhouse Road
|
08873 | ||||||||||
Somerset, | New Jersey | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, $0.01 par value per share | CTLT | New York Stock Exchange |
Large accelerated filer | x | Accelerated filer | o | |||||||||||
Non-accelerated filer | o | Smaller reporting company | o | |||||||||||
Emerging growth company | o |
Item | Page | ||||||||||
PART I | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 1B. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
Item 7. | |||||||||||
Item 7A. | |||||||||||
Item 8. | |||||||||||
Item 9. | |||||||||||
Item 9A. | |||||||||||
Item 9B. | |||||||||||
PART III | |||||||||||
Item 10. | |||||||||||
Item 11. | |||||||||||
Item 12. | |||||||||||
Item 13. | |||||||||||
Item 14. | |||||||||||
PART IV | |||||||||||
Item 15. | |||||||||||
Item 16. | |||||||||||
North America | Europe | South America | Asia Pacific | Total | |||||||||||||
Approximate number of employees as of June 30, 2019 | 6,800 | 3,900 | 900 | 700 | 12,300 |
Facility Sites | Country | Region | Segment | Total Square Footage | Leased/Owned | ||||||||||||||||||||||||||||||
1 | Eberbach | Germany | Europe | Softgel | 370,580 | Leased | |||||||||||||||||||||||||||||
2 | St. Petersburg, FL | USA | North America | Softgel | 328,073 | Owned | |||||||||||||||||||||||||||||
3 | Buenos Aires | Argentina | South America | Softgel | 265,000 | Owned | |||||||||||||||||||||||||||||
4 | Braeside | Australia | Asia-Pacific | Softgel | 163,100 | Owned | |||||||||||||||||||||||||||||
5 | Windsor | Canada | North America | Softgel | 125,892 | Owned | |||||||||||||||||||||||||||||
6 | Sorocaba | Brazil | South America | Softgel | 124,685 | Owned | |||||||||||||||||||||||||||||
7 | Strathroy | Canada | North America | Softgel | 118,009 | Owned | |||||||||||||||||||||||||||||
8 |
Kakegawa (1)
|
Japan | Asia-Pacific | Softgel | 104,500 | Owned | |||||||||||||||||||||||||||||
9 | Aprilia | Italy | Europe | Softgel | 156,020 | Leased/Owned | |||||||||||||||||||||||||||||
10 | Beinheim | France | Europe | Softgel | 78,100 | Owned | |||||||||||||||||||||||||||||
11 | Indaiatuba | Brazil | South America | Softgel | 53,800 | Owned | |||||||||||||||||||||||||||||
12 | Bloomington, IN | USA | North America | Biologics and Specialty Drug Delivery | 876,561 | Owned | |||||||||||||||||||||||||||||
13 | Woodstock, IL | USA | North America | Biologics and Specialty Drug Delivery | 352,260 | Owned | |||||||||||||||||||||||||||||
14 | Brussels | Belgium | Europe | Biologics and Specialty Drug Delivery | 265,287 | Owned | |||||||||||||||||||||||||||||
15 |
Morrisville, NC (1)
|
USA | North America | Biologics and Specialty Drug Delivery | 186,406 | Leased | |||||||||||||||||||||||||||||
16 | Limoges | France | Europe | Biologics and Specialty Drug Delivery | 179,000 | Owned | |||||||||||||||||||||||||||||
17 | Madison, WI | USA | North America | Biologics and Specialty Drug Delivery | 157,955 | Leased | |||||||||||||||||||||||||||||
18 | Emeryville, CA | USA | North America | Biologics and Specialty Drug Delivery | 10,323 | Leased | |||||||||||||||||||||||||||||
19 | Baltimore, MD | USA | North America | Biologics and Specialty Drug Delivery | 96,072 | Leased | |||||||||||||||||||||||||||||
20 | Harmans, MD | USA | North America | Biologics and Specialty Drug Delivery | 289,560 | Leased | |||||||||||||||||||||||||||||
21 |
Kansas City, MO (1)
|
USA | North America | Oral Drug Delivery / Biologics and Specialty Drug Delivery | 329,394 | Owned | |||||||||||||||||||||||||||||
22 | Somerset, NJ | USA | North America | Oral Drug Delivery / Corporate HQ | 265,000 | Owned | |||||||||||||||||||||||||||||
23 | Swindon | United Kingdom | Europe | Oral Drug Delivery | 253,314 | Owned | |||||||||||||||||||||||||||||
24 | Winchester, KY | USA | North America | Oral Drug Delivery | 180,000 | Owned | |||||||||||||||||||||||||||||
25 |
Schorndorf (1)
|
Germany | Europe | Oral Drug Delivery | 166,027 | Owned | |||||||||||||||||||||||||||||
26 | Malvern, PA | USA | North America | Oral Drug Delivery | 84,000 | Leased | |||||||||||||||||||||||||||||
27 | San Diego, CA | USA | North America | Oral Drug Delivery | 66,244 | Leased | |||||||||||||||||||||||||||||
28 | Dartford | United Kingdom | Europe | Oral Drug Delivery | 20,250 | Leased | |||||||||||||||||||||||||||||
29 | Nottingham | United Kingdom | Europe | Oral Drug Delivery | 37,428 | Owned | |||||||||||||||||||||||||||||
30 | Paris | France | Europe | Oral Drug Delivery | 150 | Leased |
Facility Sites | Country | Region | Segment | Total Square Footage | Leased/Owned | ||||||||||||||||||||||||||||||
31 | Philadelphia, PA | USA | North America | Clinical Supply Services | 212,833 | Leased/Owned | |||||||||||||||||||||||||||||
32 | Bathgate | United Kingdom | Europe | Clinical Supply Services | 191,000 | Owned | |||||||||||||||||||||||||||||
33 |
Kansas City, MO (1)
|
USA | North America | Clinical Supply Services | 80,606 | Owned | |||||||||||||||||||||||||||||
34 | Bolton | United Kingdom | Europe | Clinical Supply Services | 60,830 | Owned | |||||||||||||||||||||||||||||
35 |
Schorndorf (1)
|
Germany | Europe | Clinical Supply Services | 54,693 | Owned | |||||||||||||||||||||||||||||
36 | Shanghai | China | Asia-Pacific | Clinical Supply Services | 30,052 | Leased | |||||||||||||||||||||||||||||
37 | Shanghai | China | Asia-Pacific | Clinical Supply Services | 27,562 | Leased | |||||||||||||||||||||||||||||
38 | Singapore | Singapore | Asia-Pacific | Clinical Supply Services | 26,023 | Leased | |||||||||||||||||||||||||||||
39 |
Kakegawa (1)
|
Japan | Asia-Pacific | Clinical Supply Services | 2,800 | Owned | |||||||||||||||||||||||||||||
Total | 6,389,389 |
Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 2,463.4 | $ | 2,075.4 | $ | 1,848.1 | $ | 1,830.8 | |||||||||||||||||||||||||||||||||||||||||||
Cost of sales | 1,712.9 | 1,710.8 | 1,420.8 | 1,260.5 | 1,215.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross margin | 805.1 | 752.6 | 654.6 | 587.6 | 615.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | 512.0 | 464.8 | 402.6 | 358.1 | 337.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Impairment charges loss on sale of assets | 5.1 | 8.7 | 9.8 | 2.7 | 4.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other | 14.1 | 10.2 | 8.0 | 9.0 | 13.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings | 273.9 | 268.9 | 234.2 | 217.8 | 259.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 110.9 | 111.4 | 90.1 | 88.5 | 105.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other (income)/expense, net | 2.7 | 5.5 | 8.5 | (15.6) | 42.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations before income taxes | 160.3 | 152.0 | 135.6 | 144.9 | 112.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense/(benefit) | 22.9 | 68.4 | 25.8 | 33.7 | (97.7) | ||||||||||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations | 137.4 | 83.6 | 109.8 | 111.2 | 210.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Earnings from discontinued operations, net of tax | — | — | — | — | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | 137.4 | 83.6 | 109.8 | 111.2 | 210.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Less: Net (loss)/earnings attributable to non-controlling interest, net of tax | — | — | — | (0.3) | (1.9) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to Catalent | $ | 137.4 | $ | 83.6 | $ | 109.8 | $ | 111.5 | $ | 212.2 | |||||||||||||||||||||||||||||||||||||||||||
Basic earnings per share attributable to Catalent common shareholders: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 0.92 | $ | 0.64 | $ | 0.88 | $ | 0.89 | $ | 1.77 | |||||||||||||||||||||||||||||||||||||||||||
Net earnings | 0.92 | 0.64 | 0.88 | 0.89 | 1.77 | ||||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per share attributable to Catalent common shareholders: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 0.90 | $ | 0.63 | $ | 0.87 | $ | 0.89 | $ | 1.75 | |||||||||||||||||||||||||||||||||||||||||||
Net earnings | 0.90 | 0.63 | 0.87 | 0.89 | 1.75 |
Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Data (at period end): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 345.4 | $ | 410.2 | $ | 288.3 | $ | 131.6 | $ | 151.3 | |||||||||||||||||||||||||||||||||||||||||||
Goodwill | 2,220.9 | 1,397.2 | 1,044.1 | 996.5 | 1,061.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | 6,184.0 | 4,531.1 | 3,454.3 | 3,091.1 | 3,138.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt, including current portion and other short-term borrowing | 2,959.3 | 2,721.3 | 2,079.7 | 1,860.5 | 1,880.8 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 3,895.8 | 3,444.4 | 2,730.8 | 2,455.2 | 2,498.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total shareholders’ equity/(deficit) | $ | 1,681.6 | $ | 1,086.7 | $ | 723.5 | $ | 635.9 | $ | 634.0 |
(Dollars in millions) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | 218.1 | $ | 176.5 | $ | 139.8 | $ | 139.6 | $ | 141.0 | |||||||||||||||||||||||||||||||||||||||||||
Net cash provided by/(used in) continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating activities | 247.7 | 374.5 | 299.5 | 155.3 | 171.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
Investing activities | (1,510.4) | (919.3) | (309.0) | (137.7) | (271.8) | ||||||||||||||||||||||||||||||||||||||||||||||||
Financing activities | 1,201.4 | 669.1 | 161.3 | (30.8) | 196.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net cash provided by/(used in) discontinued operations: | — | — | — | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Effect of foreign currency on cash | $ | (3.5) | $ | (2.4) | $ | 4.9 | $ | (6.5) | $ | (19.6) |
(Dollars in millions) |
Fiscal Year Ended
June 30, |
FX Impact | Constant Currency Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 2,463.4 | $ | (57.0) | $ | 111.6 | 5 | % | |||||||||||||||||||||||||||||||
Cost of sales | 1,712.9 | 1,710.8 | (41.1) | 43.2 | 3 | % | |||||||||||||||||||||||||||||||||||
Gross margin | 805.1 | 752.6 | (15.9) | 68.4 | 9 | % | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 512.0 | 464.8 | (5.1) | 52.3 | 11 | % | |||||||||||||||||||||||||||||||||||
Impairment charges and (gain)/loss on sale of assets | 5.1 | 8.7 | (0.1) | (3.5) | (40) | % | |||||||||||||||||||||||||||||||||||
Restructuring and other | 14.1 | 10.2 | (0.4) | 4.3 | 42 | % | |||||||||||||||||||||||||||||||||||
Operating earnings | 273.9 | 268.9 | (10.3) | 15.3 | 6 | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | 110.9 | 111.4 | (0.7) | 0.2 | * | ||||||||||||||||||||||||||||||||||||
Other (income)/expense, net | 2.7 | 5.5 | (2.9) | 0.1 | 2 | % | |||||||||||||||||||||||||||||||||||
Earnings from operations, before income taxes | 160.3 | 152.0 | (6.7) | 15.0 | 10 | % | |||||||||||||||||||||||||||||||||||
Income tax expense/(benefit) | 22.9 | 68.4 | (1.4) | (44.1) | (64) | % | |||||||||||||||||||||||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | $ | (5.4) | $ | 59.2 | 71 | % | |||||||||||||||||||||||||||||||
(Dollars in millions) |
Fiscal Year Ended
June 30, |
FX Impact | Constant Currency Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Change $ | Change % | ||||||||||||||||||||||||||||||||||||||
Softgel Technologies | |||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 872.1 | $ | 917.3 | $ | (34.9) | $ | (10.3) | (1) | % | |||||||||||||||||||||||||||||||
Segment EBITDA | 191.2 | 196.4 | (7.3) | 2.1 | 1 | % | |||||||||||||||||||||||||||||||||||
Biologics and Specialty Drug Delivery | |||||||||||||||||||||||||||||||||||||||||
Net revenue | 742.1 | 601.9 | (6.5) | 146.7 | 24 | % | |||||||||||||||||||||||||||||||||||
Segment EBITDA | 180.4 | 146.8 | (1.4) | 35.0 | 24 | % | |||||||||||||||||||||||||||||||||||
Oral Drug Delivery | |||||||||||||||||||||||||||||||||||||||||
Net revenue | 619.9 | 573.9 | (10.7) | 56.7 | 10 | % | |||||||||||||||||||||||||||||||||||
Segment EBITDA | 186.7 | 172.9 | (3.7) | 17.5 | 10 | % | |||||||||||||||||||||||||||||||||||
Clinical Supply Services | |||||||||||||||||||||||||||||||||||||||||
Net revenue | 321.4 | 430.4 | (6.3) | (102.7) | (24) | % | |||||||||||||||||||||||||||||||||||
Segment EBITDA | 84.4 | 76.2 | (2.7) | 10.9 | 14 | % | |||||||||||||||||||||||||||||||||||
Inter-segment revenue elimination | (37.5) | (60.1) | 1.4 | 21.2 | 35 | % | |||||||||||||||||||||||||||||||||||
Unallocated Costs(1)
|
(142.9) | (138.8) | 4.3 | (8.4) | (6) | % | |||||||||||||||||||||||||||||||||||
Combined totals | |||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 2,463.4 | $ | (57.0) | $ | 111.6 | 5 | % | |||||||||||||||||||||||||||||||
EBITDA from operations | $ | 499.8 | $ | 453.5 | $ | (10.8) | $ | 57.1 | 13 | % |
Fiscal Year Ended
June 30, |
|||||||||||||||||
(Dollars in millions) | 2019 | 2018 | |||||||||||||||
Impairment charges and gain/(loss) on sale of assets | $ | (5.1) | $ | (8.7) | |||||||||||||
Equity compensation | (33.3) | (27.2) | |||||||||||||||
Restructuring and other special items (a)
|
(57.7) | (54.4) | |||||||||||||||
Other (expense), net (b)
|
(2.7) | (5.5) | |||||||||||||||
Non-allocated corporate costs, net | (44.1) | (43.0) | |||||||||||||||
Total unallocated costs | $ | (142.9) | $ | (138.8) |
Fiscal Year Ended
June 30, |
|||||||||||||||||
(Dollars in millions) | 2019 | 2018 | |||||||||||||||
Earnings from operations | $ | 137.4 | $ | 83.6 | |||||||||||||
Depreciation and amortization | 228.6 | 190.1 | |||||||||||||||
Interest expense, net | 110.9 | 111.4 | |||||||||||||||
Income tax expense | 22.9 | 68.4 | |||||||||||||||
EBITDA from operations | $ | 499.8 | $ | 453.5 |
2019 vs. 2018 | |||||||||||||||||
Factors Contributing to Year-Over-Year Change |
Fiscal Year Ended
June 30, |
||||||||||||||||
Net Revenue | Segment EBITDA | ||||||||||||||||
Revenue / Segment EBITDA without acquisitions/dispositions | — | % | 1 | % | |||||||||||||
Impact of divestitures | (1) | % | — | % | |||||||||||||
Constant currency change | (1) | % | 1 | % | |||||||||||||
Foreign exchange fluctuation | (4) | % | (4) | % | |||||||||||||
Total % change | (5) | % | (3) | % |
2019 vs. 2018 | |||||||||||||||||
Fiscal Year Ended
June 30, |
|||||||||||||||||
Net Revenue | Segment EBITDA | ||||||||||||||||
Revenue / Segment EBITDA without acquisitions | 7 | % | — | % | |||||||||||||
Impact of acquisitions | 17 | % | 24 | % | |||||||||||||
Constant currency change | 24 | % | 24 | % | |||||||||||||
Foreign exchange fluctuation | (1) | % | (1) | % | |||||||||||||
Total % change | 23 | % | 23 | % |
2019 vs. 2018 | |||||||||||||||||
Fiscal Year Ended
June 30, |
|||||||||||||||||
Net Revenue | Segment EBITDA | ||||||||||||||||
Revenue / Segment EBITDA without acquisitions | (1) | % | (5) | % | |||||||||||||
Impact of acquisitions | 11 | % | 15 | % | |||||||||||||
Constant currency change | 10 | % | 10 | % | |||||||||||||
Foreign exchange fluctuation | (2) | % | (2) | % | |||||||||||||
Total % Change | 8 | % | 8 | % |
2019 vs. 2018 | |||||||||||||||||
Fiscal Year Ended
June 30, |
|||||||||||||||||
Net Revenue | Segment EBITDA | ||||||||||||||||
Revenue / Segment EBITDA without acquisitions | 1 | % | 14 | % | |||||||||||||
Comparator revenue recognition adoption impact | (25) | % | — | % | |||||||||||||
Constant currency change | (24) | % | 14 | % | |||||||||||||
Foreign exchange fluctuation | (2) | % | (3) | % | |||||||||||||
Total % Change | (26) | % | 11 | % |
Fiscal Year Ended
June 30, |
|||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 |
Change $
|
||||||||||||||||||||
Net cash provided by/(used in): | |||||||||||||||||||||||
Operating activities | $ | 247.7 | $ | 374.5 | $ | (126.8) | |||||||||||||||||
Investing activities | $ | (1,510.4) | $ | (919.3) | $ | (591.1) | |||||||||||||||||
Financing activities | $ | 1,201.4 | $ | 669.1 | $ | 532.3 |
Twelve Months Ended | |||||||||||||||||
(In millions) | June 30, 2019 | June 30, 2018 | |||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | |||||||||||||
Interest expense, net | 110.9 | 111.4 | |||||||||||||||
Income tax expense (1)
|
22.9 | 68.4 | |||||||||||||||
Depreciation and amortization | 228.6 | 190.1 | |||||||||||||||
EBITDA from operations | 499.8 | 453.5 | |||||||||||||||
Equity compensation | 33.3 | 27.2 | |||||||||||||||
Impairment charges and (gain)/loss on sale of assets | 5.1 | 8.7 | |||||||||||||||
Financing-related expenses and other | 15.9 | 11.8 | |||||||||||||||
U.S. GAAP restructuring and other | 14.1 | 10.2 | |||||||||||||||
Acquisition, integration, and other special items | 43.6 | 44.1 | |||||||||||||||
Foreign exchange loss/(gain) (included in other, net) (2)
|
0.5 | (5.0) | |||||||||||||||
Other adjustments (3)
|
(12.7) | 0.2 | |||||||||||||||
Adjusted EBITDA (4)
|
$ | 599.6 | $ | 550.7 | |||||||||||||
FX impact (unfavorable) | $ | (10.2) | |||||||||||||||
Adjusted EBITDA - constant currency | $ | 609.8 |
Twelve Months Ended | |||||||||||||||||
(In millions, except per share data) | June 30, 2019 | June 30, 2018 | |||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | |||||||||||||
Amortization (1)
|
88.2 | 62.6 | |||||||||||||||
Equity compensation | 33.3 | 27.2 | |||||||||||||||
Impairment charges and (gain)/loss on sale of assets | 5.1 | 8.7 | |||||||||||||||
Financing-related expenses | 15.9 | 11.8 | |||||||||||||||
U.S. GAAP restructuring and other | 14.1 | 10.2 | |||||||||||||||
Acquisition, integration, and other special items | 43.6 | 44.1 | |||||||||||||||
Foreign exchange loss/(gain) (included in other, net) (2)
|
0.5 | (5.0) | |||||||||||||||
Other adjustments | (12.7) | 0.2 | |||||||||||||||
Estimated tax effect of adjustments (3)
|
(42.5) | (43.5) | |||||||||||||||
Discrete income tax (benefit)/expense items (4)
|
(14.5) | (9.4) | |||||||||||||||
Tax law changes provision (5)
|
(3.5) | 42.5 | |||||||||||||||
Adjusted net income (ANI) (6)
|
$ | 264.9 | $ | 233.0 | |||||||||||||
Weighted average shares outstanding | 144.2 | 131.2 | |||||||||||||||
Weighted average diluted shares outstanding | 146.0 | 133.2 | |||||||||||||||
ANI per share: | |||||||||||||||||
ANI per basic share | $ | 1.84 | $ | 1.78 | |||||||||||||
ANI per diluted share | $ | 1.81 | $ | 1.75 |
(Dollars in millions)(1)
|
Total | Fiscal 2020 | Fiscal 2021 - Fiscal 2022 | Fiscal 2023 - Fiscal 2024 | Thereafter | ||||||||||||||||||||||||
Long-term debt obligations (2)
|
$ | 2,823.6 | $ | 59.7 | $ | 123.9 | $ | 357.2 | $ | 2,282.8 | |||||||||||||||||||
Interest on long-term obligations (3)
|
897.8 | 133.4 | 252.6 | 246.8 | 265.0 | ||||||||||||||||||||||||
Capital lease obligations (4)
|
167.3 | 5.3 | 10.4 | 13.4 | 138.2 | ||||||||||||||||||||||||
Operating lease obligations (5)
|
58.2 | 12.2 | 19.2 | 15.9 | 10.9 | ||||||||||||||||||||||||
Purchase obligations (6)
|
79.4 | 67.1 | 10.0 | 2.3 | — | ||||||||||||||||||||||||
Other long-term liabilities (7)
|
64.2 | 5.7 | 8.7 | 7.7 | 42.1 | ||||||||||||||||||||||||
Total | $ | 4,090.5 | $ | 283.4 | $ | 424.8 | $ | 643.3 | $ | 2,739.0 |
Measurement of uncertain tax positions and foreign tax credits | |||||
Description of the Matter | As discussed in Note 10 to the Consolidated Financial Statements, the Company recorded income tax expense related to US and non-US tax paying jurisdictions totaling $22.9 million for the year ended June 30, 2019 and a liability for unrecognized tax benefits totaling $3.8 million at June 30, 2019. The Company’s accounting for income taxes involves the application of complex tax regulations in each of the international tax paying jurisdictions in which it operates. The determination of income subject to income tax in each tax paying jurisdiction requires management to apply transfer pricing guidelines for certain intercompany transactions and make assumptions and estimates about the value of transactions when allocating income and deductions between consolidated entities in different tax paying jurisdictions. The estimates and assumptions used in these allocations can result in uncertainty in the measured tax benefit. Additionally, the Company is entitled to claim US foreign tax credits for taxes paid at international tax paying jurisdictions. Certain of the assumptions and allocations used in the determination of the key inputs underlying the foreign tax credits are highly subjective and can also materially affect the calculation of US income taxes owed on global intangible low tax income. |
Auditing the completeness and measurement of the liability for recognized tax benefits related to certain intercompany transactions was complex because the assumptions are based on the interpretation of tax laws and legal rulings in multiple tax paying jurisdictions and require significant judgment in determining whether a tax position’s technical merits are more-likely-than-not to be sustained and measuring the amount of tax benefit that qualifies for recognition. Additionally, auditing the calculation of the foreign tax credits was complex because the estimates and assumptions about apportionment and allocation methodologies are highly judgmental. | |||||
How We Addressed the Matter in Our Audit | We tested controls over the process to assess the technical merits of tax positions related to certain intercompany transactions, as well as management’s process to measure the benefit of those tax positions, including controls over the completeness and accuracy of the underlying data. For example, we tested controls over management’s review of the evaluation of matters identified by and discussed with various tax authorities. We also tested controls over the calculation of foreign tax credits, including management’s review of such calculations and the completeness and accuracy of the data underlying the calculations. | ||||
Our audit procedures with respect to the calculation of the liability for unrecognized tax benefits and the benefit for foreign tax credits involved an assessment of the technical merits of the Company’s tax positions performed with the assistance of tax subject matter professionals with knowledge of and experience with the application of international and local income tax laws by the relevant income tax authorities. These procedures also included, among others, evaluating third-party advice obtained by the Company and making inquiries of its external tax advisers. We also evaluated the Company’s significant assumptions and the completeness and accuracy of the data used to determine the amount of tax benefits recognized and tested the accuracy of such calculations. For foreign tax credits, we also performed sensitivity analyses on the significant assumptions related to allocations and apportionment to evaluate how changes in assumptions affected the measurement of tax credits, and verified the completeness and accuracy of the computations. | |||||
Valuation of customer relationship intangible assets in the Paragon acquisition | |||||
Description of the Matter | During fiscal 2019, the Company completed its acquisition of Paragon Bioservices, Inc. (Paragon) for an aggregate nominal purchase price of $1,192.1 million. As discussed in Note 3 to the Consolidated Financial Statements, the transaction was accounted for using the acquisition method of accounting for business combinations. | ||||
Auditing the Company’s accounting for the Paragon acquisition was complex and required the involvement of specialists due to the significant estimation uncertainty involved in determining the $389.0 million fair value of the acquired customer relationship intangible assets recorded. Estimating the fair value of the customer relationship intangible assets involved the application of a valuation methodology and models using assumptions including a discount rate, revenue growth rates and appropriate profit margins on such revenues, customer contract renewal rates and a customer attrition rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions.
|
|||||
How We Addressed the Matter in Our Audit | We tested controls over the risks of material misstatement relating to the measurement and valuation of the acquired customer relationship intangible assets. For example, we tested controls over management’s review of the valuation models and the underlying assumptions used to develop such estimates. | ||||
To test the estimated fair value of the acquired customer relationship intangible assets, our audit procedures included, among others, evaluating the Company’s selection of a valuation method and testing the models and significant assumptions used in the models, including the completeness and accuracy of the underlying data. For example, we compared the significant assumptions to current industry and market trends and to the historical results of the acquired business. We also performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the acquired customer relationship intangible assets that would result from changes in the assumptions. In addition, we involved internal valuation specialists to assist in our evaluation of the significant assumptions and methodologies used by the Company.
|
|||||
Fair value of derivative liability | |||||
Description of the Matter | During May 2019, the Company entered into an equity commitment and investment agreement for the issuance and sale of 650,000 shares of Catalent’s Series A Preferred Stock for an aggregate purchase price of $650.0 million. As discussed in Note 9 to the Consolidated Financial Statements, the Series A Preferred Stock included a dividend adjustment feature that met the definition of a derivative for accounting purposes. The dividend adjustment feature was bifurcated from the Series A Preferred Stock and recorded separately as a derivative liability at its estimated fair value on the date of issuance and as of June 30, 2019 of $39.7 million and $26.8 million, respectively. | ||||
Auditing the Company’s valuations of this derivative was challenging as the Company uses complex valuation methodologies that incorporate significant assumptions which include the discount rate and forecasted volatility of the Company’s common stock price. The valuations include assumptions about economic and market conditions with uncertain future outcomes. | |||||
How We Addressed the Matter in Our Audit | We tested controls over the risks of material misstatement relating to the valuations of the derivative liability. For example, we tested controls over management’s review of the valuation models, the underlying assumptions used in the models and the related accounting conclusions. | ||||
To test the valuations of the derivative liability, our audit procedures included, among others, evaluating the methodologies used in the valuation model and testing the significant assumptions. For example, we compared the discount rate that was adjusted for the credit risk of the Company to the interest rates on comparable debt instruments, and we compared the forecasted volatility of the Company’s common stock price to its historical volatility. We also assessed the completeness and accuracy of the underlying data. In addition, we involved our internal valuation specialists to assist in our evaluation of the significant assumptions and methodologies used by the Company. We have also evaluated the Company’s financial statement disclosures related to these matters included in Note 9 to the Consolidated Financial Statements.
|
|||||
Revenue from contracts with customers | |||||
Description of the Matter |
As discussed above and in Note 1 to the Consolidated Financial Statements, the Company adopted Accounting Standards Codification 606 (“ASC 606”): Revenue from Contracts with Customers as of July 1, 2018. As discussed in Note 1 and Note 2 to the Consolidated Financial Statements, the Company earns its revenue by providing services under contracts with its customers in three primary revenue streams: manufacturing and commercial product supply, development services, and clinical supply services. For performance obligations related to services that are required to be recognized over-time, there is judgment involved in determining the most appropriate measure of progress towards satisfaction of each performance obligation.
|
||||
Auditing the Company’s assessment of measure of progress required a high degree of auditor judgment due to the subjectivity in determining the measure that most faithfully depicts the entity’s performance in satisfying performance obligations within each of the Company’s revenue streams and consistently applying the selected measure across similar arrangements. | |||||
How We Addressed the Matter in Our Audit | We tested controls over the risks of material misstatement relating to the determination of the most appropriate measure of progress towards satisfaction of performance obligations for each of its revenue streams. | ||||
To test the measures of progress used for performance obligations related to services that are required to be recognized over-time, our audit procedures included, among others, evaluating the appropriateness of the Company’s accounting policy for each type of arrangement. We also tested the identified measure of performance for a sample of arrangements by reading the contracts with the customers and reviewing the contract analyses prepared by management. We evaluated whether the selected measures of progress towards satisfaction of performance obligations were applied consistently across similar arrangements. We also tested the completeness and accuracy of the underlying data used for the measure of progress. |
June 30,
2019 |
June 30,
2018 |
|||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 345.4 | $ | 410.2 | ||||||||||||||||
Trade receivables, net | 716.4 | 555.8 | ||||||||||||||||||
Inventories | 257.2 | 209.1 | ||||||||||||||||||
Prepaid expenses and other | 76.8 | 65.2 | ||||||||||||||||||
Total current assets | 1,395.8 | 1,240.3 | ||||||||||||||||||
Property, plant, and equipment, net | 1,536.7 | 1,270.6 | ||||||||||||||||||
Other assets: | ||||||||||||||||||||
Goodwill | 2,220.9 | 1,397.2 | ||||||||||||||||||
Other intangibles, net | 930.8 | 544.9 | ||||||||||||||||||
Deferred income taxes | 38.6 | 32.9 | ||||||||||||||||||
Other | 61.2 | 45.2 | ||||||||||||||||||
Total assets | $ | 6,184.0 | $ | 4,531.1 | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current portion of long-term obligations and other short-term borrowings | $ | 76.5 | $ | 71.9 | ||||||||||||||||
Accounts payable | 255.8 | 192.1 | ||||||||||||||||||
Other accrued liabilities | 338.4 | 312.9 | ||||||||||||||||||
Total current liabilities | 670.7 | 576.9 | ||||||||||||||||||
Long-term obligations, less current portion | 2,882.8 | 2,649.4 | ||||||||||||||||||
Pension liability | 143.6 | 131.6 | ||||||||||||||||||
Deferred income taxes | 74.4 | 32.5 | ||||||||||||||||||
Other liabilities | 124.3 | 54.0 | ||||||||||||||||||
Commitment and contingencies (see Note 16) | — | — | ||||||||||||||||||
Total liabilities | 3,895.8 | 3,444.4 | ||||||||||||||||||
Redeemable preferred stock, $0.01 par value; 1.0 million and 0 shares authorized at June 30, 2019 and 2018, respectively; 650,000 and 0 shares issued and outstanding at June 30, 2019 and 2018, respectively
|
606.6 | — | ||||||||||||||||||
Shareholders’ equity/(deficit): | ||||||||||||||||||||
Common stock, $0.01 par value; 1.0 billion shares authorized in 2019 and 2018; 145.7 million and 133.4 million shares issued and outstanding at June 30, 2019 and 2018, respectively | 1.5 | 1.3 | ||||||||||||||||||
Preferred stock, $0.01 par value, other than redeemable preferred stock; 99.0 million and 100.0 million shares authorized at June 30, 2019 and 2018, respectively; 0 shares issued and outstanding at June 30, 2019 and 2018 | — | — | ||||||||||||||||||
Additional paid in capital | 2,757.4 | 2,283.3 | ||||||||||||||||||
Accumulated deficit | (723.4) | (872.1) | ||||||||||||||||||
Accumulated other comprehensive income/(loss) | (353.9) | (325.8) | ||||||||||||||||||
Total shareholders’ equity | 1,681.6 | 1,086.7 | ||||||||||||||||||
Total liabilities, redeemable preferred stock, and shareholders’ equity | $ | 6,184.0 | $ | 4,531.1 |
Year ended June 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 2,463.4 | $ | 2,075.4 | |||||||||||||||||||||||
Cost of sales | 1,712.9 | 1,710.8 | 1,420.8 | ||||||||||||||||||||||||||
Gross margin | 805.1 | 752.6 | 654.6 | ||||||||||||||||||||||||||
Selling, general, and administrative expenses | 512.0 | 464.8 | 402.6 | ||||||||||||||||||||||||||
Impairment charges and loss on sale of assets | 5.1 | 8.7 | 9.8 | ||||||||||||||||||||||||||
Restructuring and other | 14.1 | 10.2 | 8.0 | ||||||||||||||||||||||||||
Operating earnings | 273.9 | 268.9 | 234.2 | ||||||||||||||||||||||||||
Interest expense, net | 110.9 | 111.4 | 90.1 | ||||||||||||||||||||||||||
Other expense, net | 2.7 | 5.5 | 8.5 | ||||||||||||||||||||||||||
Earnings from operations before income taxes | 160.3 | 152.0 | 135.6 | ||||||||||||||||||||||||||
Income tax expense | 22.9 | 68.4 | 25.8 | ||||||||||||||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | $ | 109.8 | |||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Basic | |||||||||||||||||||||||||||||
Net earnings | $ | 0.92 | $ | 0.64 | $ | 0.88 | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||||||||
Net earnings | $ | 0.90 | $ | 0.63 | $ | 0.87 |
Year Ended June 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | $ | 109.8 | |||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | (18.6) | (4.4) | (31.9) | ||||||||||||||||||||||||||
Defined benefit pension plan | (9.5) | 4.3 | 13.0 | ||||||||||||||||||||||||||
Available for sale investment adjustments | — | (11.6) | 10.5 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax | (28.1) | (11.7) | (8.4) | ||||||||||||||||||||||||||
Comprehensive income | $ | 109.3 | $ | 71.9 | $ | 101.4 | |||||||||||||||||||||||
Shares of Common Stock |
Common Stock
|
Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income/(Loss) | Total Shareholders’ Equity/(Deficit) | ||||||||||||||||||||||||||||||||||||
Balance at June 30, 2016 | 124,712.2 | $ | 1.2 | $ | 1,976.5 | $ | (1,036.1) | $ | (305.7) | $ | 635.9 | ||||||||||||||||||||||||||||||
Cumulative effect of stock compensation standard adoption | (29.4) | (29.4) | |||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 337.7 | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||
Equity compensation | 20.9 | 20.9 | |||||||||||||||||||||||||||||||||||||||
Cash paid, in lieu of equity, for tax withholding | (5.4) | (5.4) | |||||||||||||||||||||||||||||||||||||||
Net earnings | 109.8 | 109.8 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income /(loss), net of tax | (8.4) | (8.4) | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2017 | 125,049.9 | 1.3 | 1,992.0 | (955.7) | (314.1) | 723.5 | |||||||||||||||||||||||||||||||||||
Equity offering, sale of common stock | 7,354.2 | 277.8 | 277.8 | ||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 1,019.5 | — | |||||||||||||||||||||||||||||||||||||||
Equity compensation | 27.2 | 27.2 | |||||||||||||||||||||||||||||||||||||||
Cash paid, in lieu of equity, for tax withholding | (13.7) | (13.7) | |||||||||||||||||||||||||||||||||||||||
Net earnings | 83.6 | 83.6 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income /(loss), net of tax | (11.7) | (11.7) | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | 133,423.6 | 1.3 | 2,283.3 | (872.1) | (325.8) | 1,086.7 | |||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting for ASC 606, net of tax | 15.1 | 15.1 | |||||||||||||||||||||||||||||||||||||||
Equity offering, sale of common stock | 11,431.4 | 0.1 | 445.4 | 445.5 | |||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 883.3 | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||
Equity compensation | 33.3 | 33.3 | |||||||||||||||||||||||||||||||||||||||
Cash paid, in lieu of equity, for tax withholding | (14.6) | (14.6) | |||||||||||||||||||||||||||||||||||||||
Equity issued in lieu of cash consideration for acquisition | 10.0 | 10.0 | |||||||||||||||||||||||||||||||||||||||
Preferred dividend | (3.8) | (3.8) | |||||||||||||||||||||||||||||||||||||||
Net earnings | 137.4 | 137.4 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income / (loss), net of tax | (28.1) | (28.1) | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 145,738.3 | $ | 1.5 | $ | 2,757.4 | $ | (723.4) | $ | (353.9) | $ | 1,681.6 |
Year ended June 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||||
Net earnings
|
$ | 137.4 | $ | 83.6 | $ | 109.8 | |||||||||||||||||||||||
Adjustments to reconcile earnings from operations to net cash from operations:
|
|||||||||||||||||||||||||||||
Depreciation and amortization | 228.6 | 190.1 | 146.5 | ||||||||||||||||||||||||||
Non-cash foreign currency transaction (gains)/losses, net | (0.5) | (2.7) | 7.8 | ||||||||||||||||||||||||||
Amortization and write-off of debt financing costs
|
14.2 | 4.7 | 6.8 | ||||||||||||||||||||||||||
Asset impairments charges and (gain)/loss on sale of assets
|
5.1 | 8.7 | 9.8 | ||||||||||||||||||||||||||
Reclassification of financing fees paid
|
5.4 | 11.8 | — | ||||||||||||||||||||||||||
(Gain)/loss on derivative instrument | (12.9) | — | — | ||||||||||||||||||||||||||
Equity compensation | 33.3 | 27.2 | 20.9 | ||||||||||||||||||||||||||
Provision/(benefit) for deferred income taxes | (15.1) | 35.4 | (1.3) | ||||||||||||||||||||||||||
Provision for bad debts and inventory | 12.5 | 6.9 | 11.0 | ||||||||||||||||||||||||||
Change in operating assets and liabilities: | |||||||||||||||||||||||||||||
(Increase) in trade receivables
|
(118.9) | (33.6) | (54.9) | ||||||||||||||||||||||||||
(Increase) in inventories
|
(34.0) | (1.8) | (13.5) | ||||||||||||||||||||||||||
Increase in accounts payable | 36.2 | 32.3 | 9.9 | ||||||||||||||||||||||||||
Other assets/accrued liabilities, net - current and non-current
|
(43.6) | 11.9 | 46.7 | ||||||||||||||||||||||||||
Net cash provided by operating activities
|
247.7 | 374.5 | 299.5 | ||||||||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||||
Acquisition of property and equipment and other productive assets | (218.1) | (176.5) | (139.8) | ||||||||||||||||||||||||||
Proceeds from sale of property and equipment | 0.5 | 1.8 | 0.7 | ||||||||||||||||||||||||||
Proceeds from sale of subsidiaries | — | 3.4 | — | ||||||||||||||||||||||||||
Payment for acquisitions, net of cash acquired
|
(1,291.0) | (748.0) | (169.9) | ||||||||||||||||||||||||||
Payment made for investments | (1.8) | — | — | ||||||||||||||||||||||||||
Net cash (used in) investing activities
|
(1,510.4) | (919.3) | (309.0) | ||||||||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||||
Net change in other borrowings
|
(8.4) | (3.1) | (5.8) | ||||||||||||||||||||||||||
Proceeds from borrowing, net
|
1,447.6 | 442.6 | 397.4 | ||||||||||||||||||||||||||
Payments related to long-term obligations | (1,290.3) | (18.9) | (218.5) | ||||||||||||||||||||||||||
Financing fees paid
|
(24.7) | (15.6) | (6.4) | ||||||||||||||||||||||||||
Proceeds from sale of common stock, net
|
445.5 | 277.8 | — | ||||||||||||||||||||||||||
Proceeds from sale of preferred stock, net | 646.3 | — | — | ||||||||||||||||||||||||||
Cash paid, in lieu of equity, for tax withholding obligation | (14.6) | (13.7) | (5.4) | ||||||||||||||||||||||||||
Net cash provided by financing activities
|
1,201.4 | 669.1 | 161.3 | ||||||||||||||||||||||||||
Effect of foreign currency on cash | (3.5) | (2.4) | 4.9 | ||||||||||||||||||||||||||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS | (64.8) | 121.9 | 156.7 | ||||||||||||||||||||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 410.2 | 288.3 | 131.6 | ||||||||||||||||||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 345.4 | $ | 410.2 | $ | 288.3 | |||||||||||||||||||||||
SUPPLEMENTARY CASH FLOW INFORMATION: | |||||||||||||||||||||||||||||
Interest paid | $ | 102.5 | $ | 83.2 | $ | 80.8 | |||||||||||||||||||||||
Income taxes paid, net | $ | 42.2 | $ | 23.9 | $ | 39.8 |
Year Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | As Reported | Effects of Change | Amount without Adoption of ASC 606 | ||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 79.9 | $ | 2,597.9 | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | 1,712.9 | 91.3 | 1,804.2 | ||||||||||||||||||||||||||||||||||||||||||||
Gross margin | 805.1 | (11.4) | 793.7 | ||||||||||||||||||||||||||||||||||||||||||||
Earnings from operations before income taxes | 160.3 | (11.4) | 148.9 | ||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 22.9 | (5.9) | 17.0 | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings/(loss) | $ | 137.4 | $ | (5.5) | $ | 131.9 | |||||||||||||||||||||||||||||||||||||||||
Year Ended June 30, 2018 | |||||||||||||||||||||||||||||
(Dollars in millions) | As Previously Reported | As Adjusted | |||||||||||||||||||||||||||
Selling, general, and administrative expenses | $ | 462.6 | $ | 464.8 | |||||||||||||||||||||||||
Operating earnings | 271.1 | 268.9 | |||||||||||||||||||||||||||
Other expense, net | $ | 7.7 | $ | 5.5 |
Softgel Technologies | Biologics & Specialty Drug Delivery | Oral Drug Delivery | Clinical Supply Services | Total | |||||||||||||||||||||||||||||||||||||
Manufacturing & commercial product supply | $ | 806.1 | $ | 379.5 | $ | 403.0 | $ | — | $ | 1,588.6 | |||||||||||||||||||||||||||||||
Development services | 66.0 | 362.6 | 216.9 | — | 645.5 | ||||||||||||||||||||||||||||||||||||
Clinical supply services | — | — | — | 321.4 | 321.4 | ||||||||||||||||||||||||||||||||||||
Total | $ | 872.1 | $ | 742.1 | $ | 619.9 | $ | 321.4 | $ | 2,555.5 | |||||||||||||||||||||||||||||||
Inter-segment revenue elimination | (37.5) | ||||||||||||||||||||||||||||||||||||||||
Combined net revenue | $ | 2,518.0 |
(Dollars in millions) |
Twelve Months Ended
June 30, 2019 |
|||||||
United States | $ | 1,317.3 | ||||||
Europe | 842.1 | |||||||
Other international locations | 433.8 | |||||||
Elimination of revenue attributable to multiple locations | (75.2) | |||||||
Total | $ | 2,518.0 |
(Dollars in millions) | ||||||||
Balance at June 30, 2018 | $ | 100.9 | ||||||
Balance at June 30, 2019 | $ | 177.4 | ||||||
Revenue recognized in the period from: | ||||||||
Amounts included in contracts liability at the beginning of the period | $ | 55.6 |
Cash paid at closing | $ | 1,182.1 | |||
Non-cash consideration | 10.0 | ||||
Total consideration | $ | 1,192.1 |
Property, plant, and equipment | $ | 163.2 | |||
Identifiable intangible assets | 392.3 | ||||
Other net assets | (63.0) | ||||
Deferred revenue | (73.2) | ||||
Deferred income taxes | (42.5) | ||||
Total identifiable net assets | 376.8 | ||||
Goodwill | 815.3 | ||||
Total assets acquired and liabilities assumed | $ | 1,192.1 |
For the Year Ended | ||||||||||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||||||||||
Revenue | $ | 2,638.8 | $ | 2,535.1 | ||||||||||||||||||||||||||||
Net earnings | 116.0 | 28.0 | ||||||||||||||||||||||||||||||
(Dollars in millions) | Softgel Technologies | Drug Delivery Solutions | Biologics and Specialty Drug Delivery | Oral Drug Delivery | Clinical Supply Services | Total | |||||||||||||||||||||||||||||
Balance at June 30, 2017 | $ | 415.2 | $ | 477.2 | $ | — | $ | — | $ | 151.7 | $ | 1,044.1 | |||||||||||||||||||||||
Additions | 0.4 | — | 341.9 | — | — | 342.3 | |||||||||||||||||||||||||||||
Reallocation | — | (477.2) | 163.8 | 313.4 | — | — | |||||||||||||||||||||||||||||
Divestitures | (0.9) | — | — | — | — | (0.9) | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | 0.5 | — | — | 6.5 | 4.7 | 11.7 | |||||||||||||||||||||||||||||
Balance at June 30, 2018 | 415.2 | — | 505.7 | 319.9 | 156.4 | 1,397.2 | |||||||||||||||||||||||||||||
Additions | — | — | 815.3 | 25.3 | — | 840.6 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | (6.0) | — | (1.0) | (4.9) | (5.0) | (16.9) | |||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 409.2 | $ | — | $ | 1,320.0 | $ | 340.3 | $ | 151.4 | $ | 2,220.9 |
June 30, 2019 | Weighted Average Life |
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
|||||||||||||||||||
Amortized intangibles: | |||||||||||||||||||||||
Core technology | 18 years | $ | 168.2 | $ | (105.6) | $ | 62.6 | ||||||||||||||||
Customer relationships | 14 years | 981.1 | (182.5) | 798.6 | |||||||||||||||||||
Product relationships | 11 years | 275.5 | (213.9) | 61.6 | |||||||||||||||||||
Other | 4 years | 9.3 | (1.3) | 8.0 | |||||||||||||||||||
Total intangible assets | $ | 1,434.1 | $ | (503.3) | $ | 930.8 |
June 30, 2018 | Weighted Average Life |
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
|||||||||||||||||||
Amortized intangibles: | |||||||||||||||||||||||
Core technology | 18 years | $ | 170.8 | $ | (85.3) | $ | 85.5 | ||||||||||||||||
Customer relationships | 14 years | 587.0 | (140.9) | 446.1 | |||||||||||||||||||
Product relationships | 12 years | 210.5 | (197.2) | 13.3 | |||||||||||||||||||
Total intangible assets | $ | 968.3 | $ | (423.4) | $ | 544.9 |
(Dollars in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||||||||||
Amortization expense | $ | 86.8 | $ | 86.7 | $ | 85.9 | $ | 85.6 | $ | 85.3 |
Year ended June 30, | |||||||||||||||||||||||||||||
(Dollars in millions)
|
2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Restructuring costs: | |||||||||||||||||||||||||||||
Employee-related reorganization
|
$ | 14.1 | $ | 11.9 | $ | 7.9 | |||||||||||||||||||||||
Facility exit and other costs
|
— | 0.4 | (1.7) | ||||||||||||||||||||||||||
Total restructuring costs | $ | 14.1 | $ | 12.3 | $ | 6.2 | |||||||||||||||||||||||
Other - Temporary suspension customer claims (recoveries) | $ | — | $ | (2.1) | $ | 1.8 | |||||||||||||||||||||||
Total restructuring and other costs | $ | 14.1 | $ | 10.2 | $ | 8.0 |
(Dollars in millions) |
Maturity as of June 30, 2019
|
June 30, 2019 | June 30, 2018 | ||||||||||||||
Senior Secured Credit Facilities | |||||||||||||||||
Term loan facility incremental dollar term B-2 | May 2026 | $ | 936.2 | $ | — | ||||||||||||
Term loan facility U.S. dollar-denominated | May 2024 | — | 1,228.4 | ||||||||||||||
Term loan facility euro-denominated | May 2024 | 346.8 | 358.9 | ||||||||||||||
Revolving credit facility | May 2024 | — | — | ||||||||||||||
Euro-denominated 4.75% Senior Notes due 2024 | December 2024 | 428.3 | 438.4 | ||||||||||||||
U.S. dollar-denominated 4.875% Senior Notes due 2026 | January 2026 | 444.6 | 443.8 | ||||||||||||||
U.S. dollar-denominated 5.00% Senior Notes due 2027 | July 2027 | 492.1 | — | ||||||||||||||
Deferred purchase consideration | October 2021 | 143.9 | 188.9 | ||||||||||||||
Capital lease obligations | 2020 to 2044 | 167.3 | 60.8 | ||||||||||||||
Other obligations | 2019 to 2020 | 0.1 | 2.1 | ||||||||||||||
Total | 2,959.3 | 2,721.3 | |||||||||||||||
Less: Current portion of long-term obligations and other short-term
borrowings |
76.5 | 71.9 | |||||||||||||||
Long-term obligations, less current portion | $ | 2,882.8 | $ | 2,649.4 |
(Dollars in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||
Maturities of long-term and other obligations | $ | 65.0 | 66.4 | 67.9 | 18.8 | 351.8 | 2,421.1 | $ | 2,991.0 |
Year ended June 30, | |||||||||||||||||||||||||||||
(Dollars in millions, except per share data) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Net earnings | $ | 137.4 | $ | 83.6 | $ | 109.8 | |||||||||||||||||||||||
Less: Net earnings attributable to participating securities | 5.4 | — | — | ||||||||||||||||||||||||||
Net earnings attributable to common shareholders | $ | 132.0 | $ | 83.6 | $ | 109.8 | |||||||||||||||||||||||
Weighted average shares outstanding | 144,245,956 | 131,226,110 | 124,954,248 | ||||||||||||||||||||||||||
Weighted average dilutive securities issuable-stock plans | 1,708,519 | 1,975,106 | 1,783,537 | ||||||||||||||||||||||||||
Total weighted average diluted shares outstanding | 145,954,475 | 133,201,216 | 126,737,785 | ||||||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Basic | $ | 0.92 | $ | 0.64 | $ | 0.88 | |||||||||||||||||||||||
Diluted | $ | 0.90 | $ | 0.63 | $ | 0.87 | |||||||||||||||||||||||
(Dollars in millions) | June 30, 2019 | June 30, 2018 | |||||||||
Unrealized foreign exchange gain/(loss) within Other Comprehensive Income | $ | 12.2 | $ | (12.5) | |||||||
Unrealized foreign exchange gain/(loss) within the Consolidated Statements of Operations | $ | 7.6 | $ | (11.8) |
(Dollars in millions)
|
Fair Value Measurements of
Series A Preferred Stock Derivative Liability Using Significant Unobservable Inputs (Level 3) |
|||||||
Balance at July 1, 2018 | $ | — | ||||||
Series A Preferred Stock at issuance | 39.7 | |||||||
Change in estimated fair value of Series A Preferred Stock derivative liability | (12.9) | |||||||
Balance at June 30, 2019 | $ | 26.8 |
Fiscal Year Ended
June 30, |
|||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
U.S. operations | $ | 36.1 | $ | 13.3 | $ | 5.0 | |||||||||||||||||||||||
Non-U.S. operations | 124.2 | 138.7 | 130.6 | ||||||||||||||||||||||||||
$ | 160.3 | $ | 152.0 | $ | 135.6 |
Fiscal Year Ended
June 30, |
|||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||||||
Federal | $ | 2.4 | $ | 14.1 | $ | 2.1 | |||||||||||||||||||||||
State and local | 0.3 | 0.1 | (0.4) | ||||||||||||||||||||||||||
Non-U.S. | 25.8 | 24.9 | 22.7 | ||||||||||||||||||||||||||
Total current | $ | 28.5 | $ | 39.1 | $ | 24.4 | |||||||||||||||||||||||
Deferred: | |||||||||||||||||||||||||||||
Federal | $ | 3.6 | $ | 24.2 | $ | 1.9 | |||||||||||||||||||||||
State and local | (11.6) | (1.0) | 1.4 | ||||||||||||||||||||||||||
Non-U.S. | 2.4 | 6.1 | (1.9) | ||||||||||||||||||||||||||
Total deferred | $ | (5.6) | $ | 29.3 | $ | 1.4 | |||||||||||||||||||||||
Total provision | $ | 22.9 | $ | 68.4 | $ | 25.8 |
Fiscal Year Ended
June 30, |
|||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Provision at U.S. federal statutory tax rate | $ | 33.7 | $ | 42.7 | $ | 47.4 | |||||||||||||||||||||||
State and local income taxes | (0.3) | (2.5) | (1.7) | ||||||||||||||||||||||||||
Foreign tax rate differential | (3.0) | (15.4) | (25.7) | ||||||||||||||||||||||||||
Global intangible low tax income | 3.4 | — | — | ||||||||||||||||||||||||||
Other permanent items | 4.9 | 2.7 | 2.9 | ||||||||||||||||||||||||||
Unrecognized tax positions | 1.1 | (2.4) | (0.3) | ||||||||||||||||||||||||||
Tax valuation allowance | (11.3) | 7.2 | 5.6 | ||||||||||||||||||||||||||
Foreign tax credit | (4.2) | — | — | ||||||||||||||||||||||||||
Withholding tax and other foreign taxes | 1.1 | 1.3 | (0.2) | ||||||||||||||||||||||||||
Change in tax rate | 0.8 | (3.6) | (0.3) | ||||||||||||||||||||||||||
R&D tax credit | (2.3) | (2.4) | (1.2) | ||||||||||||||||||||||||||
Impact of U.S. tax reform | — | 42.5 | — | ||||||||||||||||||||||||||
Other | (1.0) | (1.7) | (0.7) | ||||||||||||||||||||||||||
$ | 22.9 | $ | 68.4 | $ | 25.8 |
Fiscal Year Ended
June 30, |
|||||||||||||||||
(Dollars in millions) | 2019 | 2018 | |||||||||||||||
Deferred income tax assets: | |||||||||||||||||
Accrued liabilities | $ | 23.3 | $ | 19.9 | |||||||||||||
Equity compensation | 35.9 | 12.9 | |||||||||||||||
Loss and tax credit carryforwards | 150.0 | 118.9 | |||||||||||||||
Foreign currency | 10.8 | 9.5 | |||||||||||||||
Pension | 30.7 | 29.4 | |||||||||||||||
Property-related | 9.7 | 9.7 | |||||||||||||||
Intangibles | 16.6 | 22.5 | |||||||||||||||
Other | 7.3 | 1.9 | |||||||||||||||
Euro-denominated debt | 6.0 | 11.5 | |||||||||||||||
Total deferred income tax assets | $ | 290.3 | $ | 236.2 | |||||||||||||
Valuation allowance | (76.3) | (86.2) | |||||||||||||||
Net deferred income tax assets | $ | 214.0 | $ | 150.0 | |||||||||||||
Fiscal Year Ended
June 30, |
|||||||||||||||||
(Dollars in millions) | 2019 | 2018 | |||||||||||||||
Deferred income tax liabilities: | |||||||||||||||||
Accrued liabilities | $ | (1.2) | $ | (0.8) | |||||||||||||
Foreign currency | (0.8) | (0.9) | |||||||||||||||
Property-related | (47.4) | (50.2) | |||||||||||||||
Goodwill and other intangibles | (194.6) | (95.6) | |||||||||||||||
Other | (5.8) | (2.1) | |||||||||||||||
Total deferred income tax liabilities | $ | (249.8) | $ | (149.6) | |||||||||||||
Net deferred tax asset/(liability) | $ | (35.8) | $ | 0.4 |
Fiscal Year Ended
June 30, |
|||||||||||||||||
(Dollars in millions) | 2019 | 2018 | |||||||||||||||
Non-current deferred tax asset | $ | 38.6 | $ | 32.9 | |||||||||||||
Non-current deferred tax liability | 74.4 | 32.5 | |||||||||||||||
Net deferred tax asset/(liability) | $ | (35.8) | $ | 0.4 |
Retirement Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
Accumulated Benefit Obligation | $ | 341.7 | $ | 322.7 | $ | 2.9 | $ | 2.8 | |||||||||||||||||||||||||||
Change in Benefit Obligation | |||||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | 331.1 | 330.6 | 2.8 | 2.8 | |||||||||||||||||||||||||||||||
Company service cost | 3.6 | 3.5 | — | — | |||||||||||||||||||||||||||||||
Interest cost | 7.5 | 7.3 | 0.1 | — | |||||||||||||||||||||||||||||||
Employee contributions | 0.3 | 0.3 | — | — | |||||||||||||||||||||||||||||||
Plan amendments | — | — | — | — | |||||||||||||||||||||||||||||||
Curtailments | — | — | — | — | |||||||||||||||||||||||||||||||
Settlements | — | (0.2) | — | — | |||||||||||||||||||||||||||||||
Special termination benefits | — | — | — | — | |||||||||||||||||||||||||||||||
Divestitures | — | — | — | — | |||||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||||
Benefits paid | (11.5) | (14.8) | (0.2) | (0.2) | |||||||||||||||||||||||||||||||
Actual expenses | (0.1) | — | — | — | |||||||||||||||||||||||||||||||
Actuarial (gain)/loss | 27.5 | (4.5) | 0.2 | 0.2 | |||||||||||||||||||||||||||||||
Exchange rate gain/(loss) | (8.7) | 8.9 | — | — | |||||||||||||||||||||||||||||||
Benefit obligation at end of year | $ | 349.7 | $ | 331.1 | $ | 2.9 | $ | 2.8 | |||||||||||||||||||||||||||
Change in Plan Assets | |||||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 258.1 | 244.6 | — | — | |||||||||||||||||||||||||||||||
Actual return on plan assets | 23.2 | 10.6 | — | — | |||||||||||||||||||||||||||||||
Company contributions | 9.7 | 11.2 | 0.2 | 0.2 | |||||||||||||||||||||||||||||||
Employee contributions | 0.3 | 0.3 | — | — | |||||||||||||||||||||||||||||||
Settlements | — | (0.2) | — | — | |||||||||||||||||||||||||||||||
Special company contributions to fund termination benefits | — | — | — | — | |||||||||||||||||||||||||||||||
Divestitures | — | — | — | — | |||||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||||
Benefits paid | (11.5) | (14.8) | (0.2) | (0.2) | |||||||||||||||||||||||||||||||
Actual expenses | (0.1) | — | — | — | |||||||||||||||||||||||||||||||
Exchange rate gain/(loss) | (7.4) | 6.4 | — | — | |||||||||||||||||||||||||||||||
Fair value of plan assets at end of year | $ | 272.3 | $ | 258.1 | $ | — | $ | — | |||||||||||||||||||||||||||
Funded Status | |||||||||||||||||||||||||||||||||||
Funded status at end of year | (77.4) | (73.0) | (2.9) | (2.8) | |||||||||||||||||||||||||||||||
Employer contributions between measurement date and reporting date | — | — | — | — | |||||||||||||||||||||||||||||||
Net pension asset (liability) | $ | (77.4) | $ | (73.0) | $ | (2.9) | $ | (2.8) |
Retirement Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
Amounts Recognized in Statement of Financial Position | |||||||||||||||||||||||||||||||||||
Noncurrent assets | $ | 25.8 | $ | 18.0 | $ | — | $ | — | |||||||||||||||||||||||||||
Current liabilities | (0.8) | (0.8) | (0.3) | (0.3) | |||||||||||||||||||||||||||||||
Noncurrent liabilities | (102.4) | (90.2) | (2.6) | (2.5) | |||||||||||||||||||||||||||||||
Total asset/(liability) | (77.4) | (73.0) | (2.9) | (2.8) | |||||||||||||||||||||||||||||||
Amounts Recognized in Accumulated Other Comprehensive Income | |||||||||||||||||||||||||||||||||||
Transition (asset)/obligation | — | — | — | — | |||||||||||||||||||||||||||||||
Prior service cost | (0.5) | (0.5) | — | — | |||||||||||||||||||||||||||||||
Net (gain)/loss | 65.7 | 53.0 | (0.8) | (1.1) | |||||||||||||||||||||||||||||||
Total accumulated other comprehensive income at the end of the year | 65.2 | 52.5 | (0.8) | (1.1) | |||||||||||||||||||||||||||||||
Additional Information for Plan with ABO in Excess of Plan Assets | |||||||||||||||||||||||||||||||||||
Projected benefit obligation | 174.6 | 157.8 | 2.9 | 2.8 | |||||||||||||||||||||||||||||||
Accumulated benefit obligation | 168.4 | 152.1 | 2.9 | 2.8 | |||||||||||||||||||||||||||||||
Fair value of plan assets | 71.5 | 66.7 | — | — | |||||||||||||||||||||||||||||||
Additional Information for Plan with PBO in Excess of Plan Assets | |||||||||||||||||||||||||||||||||||
Projected benefit obligation | 174.6 | 157.8 | 2.9 | 2.8 | |||||||||||||||||||||||||||||||
Accumulated benefit obligation | 168.4 | 152.1 | 2.9 | 2.8 | |||||||||||||||||||||||||||||||
Fair value of plan assets | 71.5 | 66.7 | — | — | |||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | |||||||||||||||||||||||||||||||||||
Service cost | 3.6 | 3.5 | — | — | |||||||||||||||||||||||||||||||
Interest cost | 7.5 | 7.3 | 0.1 | — | |||||||||||||||||||||||||||||||
Expected return on plan assets | (11.5) | (11.9) | — | — | |||||||||||||||||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||||||||||||||
Transition (asset)/obligation
|
— | — | — | — | |||||||||||||||||||||||||||||||
Prior service cost | — | — | — | — | |||||||||||||||||||||||||||||||
Net (gain)/loss | 2.5 | 2.4 | (0.1) | (0.1) | |||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 2.1 | $ | 1.3 | $ | — | $ | (0.1) |
Retirement Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||||||||||||||||||||||||||||||||||
Net (gain)/loss arising during the year | $ | 15.8 | $ | (3.1) | $ | 0.2 | $ | 0.2 | |||||||||||||||||||||||||||
Prior service cost (credit) during the year | — | — | — | — | |||||||||||||||||||||||||||||||
Transition asset/(obligation) recognized during the year | — | — | — | — | |||||||||||||||||||||||||||||||
Prior service cost recognized during the year | — | — | — | — | |||||||||||||||||||||||||||||||
Net gain/(loss) recognized during the year | (2.5) | (2.4) | 0.1 | 0.1 | |||||||||||||||||||||||||||||||
Exchange rate gain/(loss) recognized during the year | (0.6) | 0.3 | — | — | |||||||||||||||||||||||||||||||
Total recognized in other comprehensive income | $ | 12.7 | $ | (5.2) | $ | 0.3 | $ | 0.3 | |||||||||||||||||||||||||||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | |||||||||||||||||||||||||||||||||||
Total recognized in net periodic benefit cost and other comprehensive income | $ | 14.8 | $ | (3.9) | $ | 0.3 | $ | 0.3 | |||||||||||||||||||||||||||
Estimated Amounts to be Amortized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost | |||||||||||||||||||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||||||||||||
Transition (asset)/obligation | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
Prior service cost/(credit) | — | — | — | — | |||||||||||||||||||||||||||||||
Net (gain)/loss | 4.5 | 2.6 | (0.1) | (0.1) | |||||||||||||||||||||||||||||||
Financial Assumptions Used to Determine Benefit Obligations at the Balance Sheet Date | |||||||||||||||||||||||||||||||||||
Discount rate (%) | 1.90 | % | 2.50 | % | 2.96 | % | 3.79 | % | |||||||||||||||||||||||||||
Rate of compensation increases (%) | 2.03 | % | 2.03 | % | n/a | n/a | |||||||||||||||||||||||||||||
Financial Assumptions Used to Determine Net Periodic Benefit Cost for Financial Year | |||||||||||||||||||||||||||||||||||
Discount rate (%) | 2.50 | % | 2.49 | % | 3.79 | % | 3.28 | % | |||||||||||||||||||||||||||
Rate of compensation increases (%) | 2.03 | % | 2.04 | % | n/a | n/a | |||||||||||||||||||||||||||||
Expected long-term rate of return (%) | 4.70 | % | 5.09 | % | n/a | n/a | |||||||||||||||||||||||||||||
Expected Future Contributions | |||||||||||||||||||||||||||||||||||
Fiscal year 2020 | $ | 11.3 | $ | 9.4 | $ | 0.3 | $ | 0.3 |
Retirement Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
Expected Future Benefit Payments | |||||||||||||||||||||||||||||||||||
Financial year | |||||||||||||||||||||||||||||||||||
2020 | $ | 12.8 | $ | 11.0 | $ | 0.3 | $ | 0.3 | |||||||||||||||||||||||||||
2021 | 12.1 | 12.2 | 0.3 | 0.3 | |||||||||||||||||||||||||||||||
2022 | 12.4 | 11.8 | 0.3 | 0.3 | |||||||||||||||||||||||||||||||
2023 | 13.3 | 12.3 | 0.3 | 0.3 | |||||||||||||||||||||||||||||||
2024 | 14.1 | 13.2 | 0.2 | 0.2 | |||||||||||||||||||||||||||||||
2025-2029 | 77.5 | 77.7 | 1.0 | 1.0 | |||||||||||||||||||||||||||||||
Actual Asset Allocation (%) | |||||||||||||||||||||||||||||||||||
Equities | 17.6 | % | 22.7 | % | — | % | — | % | |||||||||||||||||||||||||||
Government bonds | 29.8 | % | 28.9 | % | — | % | — | % | |||||||||||||||||||||||||||
Corporate bonds | 15.2 | % | 14.1 | % | — | % | — | % | |||||||||||||||||||||||||||
Property | 2.6 | % | 2.4 | % | — | % | — | % | |||||||||||||||||||||||||||
Insurance contracts | 11.0 | % | 9.3 | % | — | % | — | % | |||||||||||||||||||||||||||
Other | 23.8 | % | 22.6 | % | — | % | — | % | |||||||||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | — | % | — | % | |||||||||||||||||||||||||||
Actual Asset Allocation (Amount) | |||||||||||||||||||||||||||||||||||
Equities | $ | 47.9 | $ | 58.7 | $ | — | $ | — | |||||||||||||||||||||||||||
Government bonds | 80.8 | 74.5 | — | — | |||||||||||||||||||||||||||||||
Corporate bonds | 41.4 | 36.4 | — | — | |||||||||||||||||||||||||||||||
Property | 7.2 | 6.2 | — | — | |||||||||||||||||||||||||||||||
Insurance contracts | 30.0 | 24.0 | — | — | |||||||||||||||||||||||||||||||
Other | 65.0 | 58.3 | — | — | |||||||||||||||||||||||||||||||
Total | $ | 272.3 | $ | 258.1 | $ | — | $ | — | |||||||||||||||||||||||||||
Target Asset Allocation (%) | |||||||||||||||||||||||||||||||||||
Equities | 21.4 | % | 22.8 | % | — | % | — | % | |||||||||||||||||||||||||||
Government bonds | 30.2 | % | 29.7 | % | — | % | — | % | |||||||||||||||||||||||||||
Corporate bonds | 13.8 | % | 13.6 | % | — | % | — | % | |||||||||||||||||||||||||||
Property | 2.9 | % | 2.9 | % | — | % | — | % | |||||||||||||||||||||||||||
Insurance contracts | 11.2 | % | 10.1 | % | — | % | — | % | |||||||||||||||||||||||||||
Other | 20.5 | % | 20.9 | % | — | % | — | % | |||||||||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | — | % | — | % |
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Investments Measured at Net Asset Value | Total Assets | ||||||||||||||||||||||||
Equity securities | $ | 1.8 | $ | 46.0 | $ | — | $ | — | $ | 47.8 | |||||||||||||||||||
Debt securities | 0.1 | 122.2 | — | — | 122.3 | ||||||||||||||||||||||||
Real estate | 0.4 | 4.9 | — | 1.9 | 7.2 | ||||||||||||||||||||||||
Other | 0.6 | 73.4 | 21.0 | — | 95.0 | ||||||||||||||||||||||||
Total | $ | 2.9 | $ | 246.5 | $ | 21.0 | $ | 1.9 | $ | 272.3 |
(Dollars in millions) | Level 1 | Level 2 |
Level 3
|
Investments Measured at Net Asset Value
|
Total Assets
|
||||||||||||||||||||||||
Equity securities | $ | 1.8 | $ | 56.9 | $ | — | $ | — | $ | 58.7 | |||||||||||||||||||
Debt securities | 0.1 | 110.8 | — | — | 110.9 | ||||||||||||||||||||||||
Real estate | 0.4 | 3.9 | — | 1.9 | 6.2 | ||||||||||||||||||||||||
Other | 0.7 | 60.7 | 20.9 | — | 82.3 | ||||||||||||||||||||||||
Total | $ | 3.0 | $ | 232.3 | $ | 20.9 | $ | 1.9 | $ | 258.1 |
Fair Value Measurement Using Significant Unobservable Inputs Total (Level 3) | Fair Value Measurement Using Significant Unobservable Inputs Insurance Contracts | Fair Value Measurement Using Significant Unobservable Inputs Other | |||||||||||||||
Total (Level 3) | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Beginning Balance at June 30, 2018 | $ | 20.9 | $ | 2.9 | $ | 18.0 | |||||||||||
Actual return on plan assets: | |||||||||||||||||
Relating to assets still held at the reporting date | 0.8 | 0.4 | 0.4 | ||||||||||||||
Relating to assets sold during the period | — | — | — | ||||||||||||||
Purchases, sales, settlements, contributions and benefits paid | (1.8) | (0.2) | (1.6) | ||||||||||||||
Transfers in and/or out of Level 3 | 1.1 | — | 1.1 | ||||||||||||||
Ending Balance at June 30, 2019 | $ | 21.0 | $ | 3.1 | $ | 17.9 |
Other Post-Retirement Benefits | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Assumed Healthcare Cost Trend Rates at the Balance Sheet Date | |||||||||||||||||
Healthcare cost trend rate – initial (%) | |||||||||||||||||
Pre-65 | n/a | n/a | |||||||||||||||
Post-65 | 19.86 | % | (1.42) | % | |||||||||||||
Healthcare cost trend rate – ultimate (%) | |||||||||||||||||
Pre-65 | n/a | n/a | |||||||||||||||
Post-65 | 4.83 | % | 4.83 | % | |||||||||||||
Year in which ultimate rates are reached | |||||||||||||||||
Pre-65 | n/a | n/a | |||||||||||||||
Post-65 | 2026 | 2026 | |||||||||||||||
Effect of 1% Change in Healthcare Cost Trend Rate | |||||||||||||||||
Healthcare cost trend rate up 1% | |||||||||||||||||
on APBO at balance sheet date | $ | 117,555 | $ | 120,821 | |||||||||||||
on total service and interest cost | 3,640 | 3,118 | |||||||||||||||
Effect of 1% Change in Healthcare Cost Trend Rate | |||||||||||||||||
Healthcare cost trend rate down 1% | |||||||||||||||||
on APBO at balance sheet date | $ | (106,088) | $ | (108,873) | |||||||||||||
on total service and interest cost | (3,284) | (2,804) | |||||||||||||||
Expected Future Contributions | |||||||||||||||||
Fiscal year 2020 | $ | 319,469 | $ | 311,318 |
(Dollars in millions) | Foreign Currency Translation Adjustment | Available for Sale Investment Adjustments | Pension Liability Adjustments | Other Comprehensive Income/(Loss) | |||||||||||||||||||||||||
Balance at June 30, 2016 | $ | (248.8) | $ | — | $ | (56.9) | $ | (305.7) | |||||||||||||||||||||
Activity, net of tax | (31.9) | 10.5 | 13.0 | (8.4) | |||||||||||||||||||||||||
Balance at June 30, 2017 | (280.7) | 10.5 | (43.9) | (314.1) | |||||||||||||||||||||||||
Activity, net of tax | (4.4) | (11.6) | 4.3 | (11.7) | |||||||||||||||||||||||||
Balance at June 30, 2018 | (285.1) | (1.1) | (39.6) | (325.8) | |||||||||||||||||||||||||
Activity, net of tax | (18.6) | — | (9.5) | (28.1) | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | (303.7) | $ | (1.1) | $ | (49.1) | $ | (353.9) |
Year Ended June 30, | |||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Foreign currency translation adjustments: | |||||||||||||||||||||||||||||
Net investment hedge | $ | 12.2 | $ | (12.5) | $ | (21.3) | |||||||||||||||||||||||
Long term inter-company loans | (12.8) | 9.3 | (14.3) | ||||||||||||||||||||||||||
Translation adjustments | (15.8) | (10.1) | (3.8) | ||||||||||||||||||||||||||
Total foreign currency translation adjustments, pretax | $ | (16.4) | $ | (13.3) | $ | (39.4) | |||||||||||||||||||||||
Tax expense/(benefit) | 2.2 | (8.9) | (7.5) | ||||||||||||||||||||||||||
Total foreign currency translation adjustments, net of tax | $ | (18.6) | $ | (4.4) | $ | (31.9) | |||||||||||||||||||||||
Net change in minimum pension liability | |||||||||||||||||||||||||||||
Net gain/(loss) arising during the year | $ | 16.0 | $ | 2.9 | $ | 13.9 | |||||||||||||||||||||||
Net (gain)/loss recognized during the year | (2.4) | 2.3 | 4.3 | ||||||||||||||||||||||||||
Foreign exchange translation and other | (0.6) | (0.3) | 0.5 | ||||||||||||||||||||||||||
Total minimum pension liability, pretax | $ | 13.0 | $ | 4.9 | $ | 18.7 | |||||||||||||||||||||||
Tax expense/(benefit) | 3.5 | 0.6 | 5.7 | ||||||||||||||||||||||||||
Net change in minimum pension liability, net of tax | $ | 9.5 | $ | 4.3 | $ | 13.0 | |||||||||||||||||||||||
Net change in available for sale investment: | |||||||||||||||||||||||||||||
Net gain/(loss) arising during the year | $ | — | $ | (16.2) | $ | 16.2 | |||||||||||||||||||||||
Net (gain)/loss recognized during the year | — | — | — | ||||||||||||||||||||||||||
Foreign exchange translation and other | — | — | — | ||||||||||||||||||||||||||
Total change in available for sale investment, pretax | $ | — | $ | (16.2) | $ | 16.2 | |||||||||||||||||||||||
Tax expense/(benefit) | (4.6) | 5.7 | |||||||||||||||||||||||||||
Net change in available for sale investment, net of tax | $ | — | $ | (11.6) | $ | 10.5 |
Year Ended June 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Expected volatility | 22% - 24% | 24% - 27% | 25% - 27% | ||||||||||||||||||||||||||
Expected life (in years) | 6.25 | 6.25 | 6.25 | ||||||||||||||||||||||||||
Risk-free interest rates | 2.2% - 2.8% | 1.9% - 2.1% | 1.2% - 1.3% | ||||||||||||||||||||||||||
Dividend yield | None | None | None |
Time | Performance | Market | ||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Exercise Price | Number of Shares | Weighted Average Contractual Term | Aggregate Intrinsic Value | Number of Shares | Weighted Average Contractual Term | Aggregate Intrinsic Value | Number of Shares | Weighted Average Contractual Term | Aggregate Intrinsic Value | |||||||||||||||||||||||||||||||||||||||||
Outstanding as of June 30, 2018 | $ | 23.57 | 1,712,836 | 7.01 | $ | 27,418,051 | 550,623 | 4.79 | $ | 13,052,439 | 117,467 | 3.35 | $ | 3,154,413 | ||||||||||||||||||||||||||||||||||||
Granted | $ | 33.38 | 1,096,501 | — | — | 82,990 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Exercised | $ | 19.14 | (576,259) | — | 13,210,249 | (205,621) | — | 5,533,365 | (80,065) | — | 2,301,861 | |||||||||||||||||||||||||||||||||||||||
Forfeited | $ | 21.03 | (53,264) | — | — | (300,258) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Expired / Canceled | $ | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Outstanding as of June 30, 2019 | $ | 30.55 | 2,179,814 | 7.56 | 51,739,617 | 127,734 | 7.68 | 2,369,291 | 37,402 | 3.52 | 1,373,525 | |||||||||||||||||||||||||||||||||||||||
Vest and expected to vest as of June 30, 2019 | $ | 30.37 | 2,179,814 | 7.56 | 22,851,430 | 127,734 | 7.68 | 2,369,291 | 37,402 | 3.52 | 1,373,525 | |||||||||||||||||||||||||||||||||||||||
Vested and exercisable as of June 30, 2019 | $ | 18.63 | 780,875 | 5.61 | $ | 27,741,047 | 44,744 | 1.26 | $ | 1,635,659 | 37,402 | 3.52 | $ | 1,373,525 |
Time-Based Units and Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested as of June 30, 2018 | 1,004,236 | $ | 31.81 | ||||||||
Granted | 681,702 | 44.16 | |||||||||
Vested | 196,973 | 31.90 | |||||||||
Forfeited | 94,115 | 36.32 | |||||||||
Unvested as of June 30, 2019 | 1,394,850 | $ | 37.53 |
Performance-Based Units and Shares
Performance-Based Units and Shares |
Weighted Average Grant-Date Fair Value | ||||||||||
Unvested as of June 30, 2018 | 577,856 | $ | 30.30 | ||||||||
Granted | 213,730 | 43.81 | |||||||||
Vested | 93,082 | 31.77 | |||||||||
Forfeited | 54,049 | 40.68 | |||||||||
Unvested as of June 30, 2019 | 644,455 | $ | 33.70 |
Year Ended June 30, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Expected volatility | 30% - 33% | 32% - 33% | |||||||||||||||
Expected life (in years) | 2.4 - 3.0 | 2.4 - 2.9 | |||||||||||||||
Risk-free interest rates | 2.5% - 3.0% | 1.4% - 2.1% | |||||||||||||||
Dividend yield | None | None |
RTSR Units and Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested as of June 30, 2018 | 483,097 | $ | 32.47 | ||||||||
Granted | 170,969 | 47.64 | |||||||||
Vested | 98,373 | 40.01 | |||||||||
Forfeited | 30,437 | 36.76 | |||||||||
Unvested as of June 30, 2019 | 525,256 | $ | 35.75 |
Twelve Months Ended
June 30, |
|||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
Other (income)/expense, net | |||||||||||||||||||||||||||||||||||||||||
Debt refinancing costs (1)
|
$ | 15.8 | $ | 11.8 | $ | 4.3 | |||||||||||||||||||||||||||||||||||
Foreign currency (gains) and losses (2)
|
(0.5) | (4.6) | 4.2 | ||||||||||||||||||||||||||||||||||||||
Other (3)
|
(12.6) | (1.7) | — | ||||||||||||||||||||||||||||||||||||||
Total other (income)/expense | $ | 2.7 | $ | 5.5 | $ | 8.5 |
(Dollars in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||
Minimum rental payments | $ | 12.2 | $ | 10.0 | $ | 9.2 | $ | 8.5 | $ | 7.4 | $ | 10.9 | $ | 58.2 |
(Dollars in millions) | Fiscal Year Ended June 30, | ||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||
Softgel Technologies | $ | 872.1 | $ | 917.3 | $ | 855.3 | |||||||||||||||||||||||
Biologics and Specialty Drug Delivery | 742.1 | 601.9 | 350.8 | ||||||||||||||||||||||||||
Oral Drug Delivery | 619.9 | 573.9 | 561.6 | ||||||||||||||||||||||||||
Clinical Supply Services | 321.4 | 430.4 | 348.8 | ||||||||||||||||||||||||||
Inter-segment revenue elimination | (37.5) | (60.1) | (41.1) | ||||||||||||||||||||||||||
Net revenue | $ | 2,518.0 | $ | 2,463.4 | $ | 2,075.4 |
(Dollars in millions) |
Fiscal Year Ended
June 30, |
||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Segment EBITDA reconciled to earnings from operations: | |||||||||||||||||||||||||||||
Softgel Technologies | $ | 191.2 | $ | 196.4 | $ | 190.5 | |||||||||||||||||||||||
Biologics and Specialty Drug Delivery | 180.4 | 146.8 | 63.4 | ||||||||||||||||||||||||||
Oral Drug Delivery | 186.7 | 172.9 | 179.0 | ||||||||||||||||||||||||||
Clinical Supply Services | 84.4 | 76.2 | 54.9 | ||||||||||||||||||||||||||
Sub-Total | $ | 642.7 | $ | 592.3 | $ | 487.8 | |||||||||||||||||||||||
Reconciling items to earnings from operations | |||||||||||||||||||||||||||||
Unallocated costs (1)
|
(142.9) | (138.8) | (115.6) | ||||||||||||||||||||||||||
Depreciation and amortization | (228.6) | (190.1) | (146.5) | ||||||||||||||||||||||||||
Interest expense, net | (110.9) | (111.4) | (90.1) | ||||||||||||||||||||||||||
Income tax expense | (22.9) | (68.4) | (25.8) | ||||||||||||||||||||||||||
Earnings from operations | $ | 137.4 | $ | 83.6 | $ | 109.8 |
(Dollars in millions) |
Fiscal Year Ended
June 30, |
||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Impairment charges and gain/(loss) on sale of assets | $ | (5.1) | $ | (8.7) | $ | (9.8) | |||||||||||||||||||||||
Equity compensation | (33.3) | (27.2) | (20.9) | ||||||||||||||||||||||||||
Restructuring and other special items (a)
|
(57.7) | (54.4) | (33.5) | ||||||||||||||||||||||||||
Other income/(expense), net (b)
|
(2.7) | (5.5) | (8.5) | ||||||||||||||||||||||||||
Non-allocated corporate costs, net | (44.1) | (43.0) | (42.9) | ||||||||||||||||||||||||||
Total unallocated costs | $ | (142.9) | $ | (138.8) | $ | (115.6) |
(Dollars in millions) | June 30, 2019 | June 30, 2018 | |||||||||
Softgel Technologies | $ | 1,196.1 | $ | 1,139.8 | |||||||
Biologics and Specialty Drug Delivery | 3,104.8 | 1,615.4 | |||||||||
Oral Drug Delivery | 1,210.0 | 999.5 | |||||||||
Clinical Supply Services | 463.2 | 452.7 | |||||||||
Corporate and eliminations | 209.9 | 323.7 | |||||||||
Total assets | $ | 6,184.0 | $ | 4,531.1 |
(Dollars in millions) |
Fiscal Year Ended
June 30, |
||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Softgel Technologies | $ | 39.0 | $ | 43.9 | $ | 38.4 | |||||||||||||||||||||||
Biologics and Specialty Drug Delivery | 76.7 | 54.7 | 25.2 | ||||||||||||||||||||||||||
Oral Drug Delivery | 73.5 | 54.4 | 50.1 | ||||||||||||||||||||||||||
Clinical Supply Services | 18.8 | 19.5 | 18.7 | ||||||||||||||||||||||||||
Corporate | 20.6 | 17.6 | 14.1 | ||||||||||||||||||||||||||
Total depreciation and amortization expense | $ | 228.6 | $ | 190.1 | $ | 146.5 |
(Dollars in millions) |
Fiscal Year Ended
June 30, |
||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Softgel Technologies | $ | 50.6 | $ | 41.3 | $ | 27.6 | |||||||||||||||||||||||
Biologics and Specialty Drug Delivery | 88.9 | 55.2 | 40.8 | ||||||||||||||||||||||||||
Oral Drug Delivery | 51.5 | 40.2 | 42.7 | ||||||||||||||||||||||||||
Clinical Supply Services | 2.9 | 11.5 | 7.2 | ||||||||||||||||||||||||||
Corporate | 24.2 | 28.3 | 21.5 | ||||||||||||||||||||||||||
Total capital expenditures | $ | 218.1 | $ | 176.5 | $ | 139.8 |
(Dollars in millions) | June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||||||
United States | $ | 1,066.0 | $ | 849.9 | |||||||||||||||||||||||||
Europe | 344.4 | 304.9 | |||||||||||||||||||||||||||
International Other | 126.3 | 115.8 | |||||||||||||||||||||||||||
Total | $ | 1,536.7 | $ | 1,270.6 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
|||||||||
Raw materials and supplies | $ | 161.6 | $ | 137.1 | |||||||
Work-in-process & finished goods | 115.0 | 90.6 | |||||||||
Total inventory, gross | 276.6 | 227.7 | |||||||||
Inventory cost adjustment | (19.4) | (18.6) | |||||||||
Inventories | $ | 257.2 | $ | 209.1 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
|||||||||
Prepaid expenses | $ | 18.7 | $ | 19.2 | |||||||
Spare parts supplies | 8.1 | 11.1 | |||||||||
Prepaid income tax | 10.0 | 7.2 | |||||||||
Non-U.S. value-added tax | 16.4 | 12.5 | |||||||||
Other current assets | 23.6 | 15.2 | |||||||||
Prepaid expenses and other | $ | 76.8 | $ | 65.2 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
|||||||||
Land, buildings, and improvements | $ | 1,049.4 | $ | 928.1 | |||||||
Machinery, equipment, and capitalized software | 1,104.9 | 988.1 | |||||||||
Furniture and fixtures | 16.9 | 14.9 | |||||||||
Construction in progress | 278.9 | 166.8 | |||||||||
Property and equipment, at cost | 2,450.1 | 2,097.9 | |||||||||
Accumulated depreciation | (913.4) | (827.3) | |||||||||
Property, plant, and equipment, net | $ | 1,536.7 | $ | 1,270.6 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
|||||||||
Deferred compensation investments | $ | 21.9 | $ | 20.1 | |||||||
Pension asset | 25.8 | 18.0 | |||||||||
Deferred long-term debt financing costs | 3.0 | 1.1 | |||||||||
Other | 10.5 | 6.0 | |||||||||
Total other assets | $ | 61.2 | $ | 45.2 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
|||||||||
Accrued employee-related expenses | $ | 103.9 | $ | 104.3 | |||||||
Restructuring accrual | 8.2 | 9.4 | |||||||||
Accrued interest | 11.7 | 16.5 | |||||||||
Deferred revenue and fees | 155.2 | 100.9 | |||||||||
Accrued income tax | 8.5 | 25.9 | |||||||||
Other accrued liabilities and expenses | 50.9 | 55.9 | |||||||||
Other accrued liabilities | $ | 338.4 | $ | 312.9 |
(Dollars in millions) |
June 30,
2019 |
June 30,
2018 |
June 30,
2017 |
||||||||||||||
Beginning balance | $ | 6.0 | $ | 4.0 | $ | 3.9 | |||||||||||
Charged to cost and expenses (recoveries) | 3.1 | 1.7 | 1.0 | ||||||||||||||
Deductions | (3.0) | 0.3 | (0.9) | ||||||||||||||
Impact of foreign exchange | — | — | |||||||||||||||
Closing balance | $ | 6.1 | $ | 6.0 | $ | 4.0 |
(Dollars in millions, except per share data) | Fiscal 2019, By Quarters | ||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 551.8 | $ | 623.0 | $ | 617.5 | $ | 725.7 | |||||||||||||||||||||||||||||||||
Gross margin | 148.5 | 201.4 | 198.7 | 256.5 | |||||||||||||||||||||||||||||||||||||
Net earnings/(loss) | $ | (14.4) | $ | 49.0 | $ | 31.7 | $ | 71.1 | |||||||||||||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||||||||||||||
Basic | |||||||||||||||||||||||||||||||||||||||||
Net earnings/(loss) | $ | (0.10) | $ | 0.34 | $ | 0.22 | $ | 0.45 | |||||||||||||||||||||||||||||||||
Diluted | |||||||||||||||||||||||||||||||||||||||||
Net earnings/(loss) | $ | (0.10) | $ | 0.33 | $ | 0.22 | $ | 0.44 |
(Dollars in millions, except per share data) | Fiscal 2018, By Quarters | ||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 543.9 | $ | 606.3 | $ | 627.9 | $ | 685.3 | |||||||||||||||||||||||||||||||||
Gross margin | 140.1 | 187.4 | 191.7 | 233.4 | |||||||||||||||||||||||||||||||||||||
Net earnings | $ | 3.8 | $ | (21.9) | $ | 19.0 | $ | 82.7 | |||||||||||||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||||||||||||||
Basic | |||||||||||||||||||||||||||||||||||||||||
Net earnings | $ | 0.03 | $ | (0.16) | $ | 0.14 | $ | 0.62 | |||||||||||||||||||||||||||||||||
Diluted | |||||||||||||||||||||||||||||||||||||||||
Net earnings | $ | 0.03 | $ | (0.16) | $ | 0.14 | $ | 0.61 |
(Dollars in millions) | Beginning Balance | Current Period (Charge) / Benefit | Deductions and Other | Ending Balance | |||||||||||||||||||
Year ended June 30, 2017 | |||||||||||||||||||||||
Tax valuation allowance | $ | (69.9) | $ | (9.4) | $ | 0.5 | $ | (78.8) | |||||||||||||||
Year ended June 30, 2018 | |||||||||||||||||||||||
Tax valuation allowance | $ | (78.8) | $ | (13.8) | $ | 6.4 | $ | (86.2) | |||||||||||||||
Year ended June 30, 2019 | |||||||||||||||||||||||
Tax valuation allowance | $ | (86.2) | $ | 11.3 | $ | (1.4) | $ | (76.3) |
Exhibit No. | Description | ||||||||||||||||
Interest Purchase Agreement, dated September 18, 2017, by and among Catalent Pharma Solutions, Inc., Cook Pharmica LLC, and Cook Group Incorporated. Disclosure schedules and exhibits have been omitted. The Interest Purchase Agreement as filed identifies such schedules and exhibits, including the general nature of their contents. Catalent, Inc. agrees to furnish a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request (incorporated by reference to exhibit 2.1 to the Company's Current Report on Form 8-K filed on September 19, 2017). | |||||||||||||||||
Agreement and Plan of Merger, dated as of July 2, 2018, among Catalent Pharma Solutions, Inc., Catalent Boston, Inc., and Juniper Pharmaceuticals, Inc. (incorporated by reference to exhibit 2.1 to the Company's Current Report on Form 8-K filed on July 3, 2018). | |||||||||||||||||
Agreement and Plan of Merger, dated April 14, 2019, by and among Catalent Pharma Solutions, Inc., Paragon Bioservices, Inc., solely for purposes of Section 4.12 (solely with respect to the Equity Financing (as defined therein)) and Section 8.19, Catalent, Inc., and Pearl Shareholder Representative, LLC. Disclosure schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Merger Agreement as filed identifies such schedules and exhibits, including the general nature of their contents. The Company agrees to furnish a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request (incorporated by reference to exhibit 2.1 to the Company's Current Report on Form 8-K filed on April 17, 2019). | |||||||||||||||||
First Amendment to Agreement and Plan of Merger, dated as of May 9, 2019, by and between Catalent Pharma Solutions, Inc. and Paragon Bioservices, Inc. *
|
|||||||||||||||||
Third Amended and Restated Certificate of Incorporation of Catalent, Inc., as filed with the Secretary of State of the State of Delaware on October 31, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 6, 2018). | |||||||||||||||||
Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, Par Value $0.01 Per Share, of Catalent, Inc. (incorporated by reference to exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 22, 2019). |
Bylaws of Catalent, Inc., effective October 31, 2018 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on November 6, 2018). | |||||||||||||||||
Indenture dated December 9, 2016, by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as principal paying agent, and Deutsche Bank Luxembourg S.A., as transfer agent and registrar (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 12, 2016). | |||||||||||||||||
Form of 4.750% Senior Notes due 2024 (included as part of Exhibit 4.1 above). | |||||||||||||||||
Indenture, dated October 18, 2017, by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 18, 2017). | |||||||||||||||||
Form of 4.875% Senior Notes due 2026 (included as part of Exhibit 4.3 above). | |||||||||||||||||
Indenture, dated June 27, 2019, by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 27, 2019). | |||||||||||||||||
Form of 5.00% Senior Notes due 2027 (included as part of Exhibit 4.5 above). | |||||||||||||||||
Description of the Company’s Common Stock, par value $0.01. * | |||||||||||||||||
Form of Severance Agreement between named executive officers and Catalent Pharma Solutions, Inc. (incorporated by reference to Exhibit 10.3 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010). †
|
|||||||||||||||||
Form of Unit Subscription Agreement (incorporated by reference to Exhibit 10.12 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008). † | |||||||||||||||||
Form of Management Equity Subscription Agreement (incorporated by reference to Exhibit 10.13 to Catalent Pharma Solutions, Inc.’s Amendment No. 1 to the Registration Statement on Form S-4/A filed on March 3, 2008). †
|
|||||||||||||||||
2007 PTS Holdings Corp. Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to Catalent Pharma Solutions, Inc.’s Registration Statement on Form S-4 filed on December 6, 2007). †
|
|||||||||||||||||
Amendment No. 1 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated September 8, 2010 (incorporated by reference to Exhibit 10.16 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 17, 2010). †
|
|||||||||||||||||
Amendment No. 2 to the 2007 PTS Holdings Corp. Stock Incentive Plan, dated June 25, 2013 (incorporated by reference to Exhibit 10.45 to Catalent, Inc.’s Amendment No. 1 to the Registration Statement on Form S-1/A as filed on September 28, 2014). †
|
|||||||||||||||||
Form of Nonqualified Stock Option Agreement (executives) approved June 25, 2013 (incorporated by reference to Exhibit 10.45 of Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 10, 2013). † | |||||||||||||||||
Form of Nonqualified Stock Option Agreement (Chief Executive Officer) approved June 25, 2013 (incorporated by reference to Exhibit 10.46 of Catalent Pharma Solutions Inc.’s Annual Report on Form 10-K filed on September 10, 2013). †
|
|||||||||||||||||
Catalent, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Form of Stock Option Agreement for U.S. Employees (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Form of Stock Option Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Form of Restricted Stock Unit Agreement for U.S. Employees (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Form of Restricted Stock Unit Agreement for Non-U.S. Employees (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Form of Restricted Stock Unit Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on August 5, 2014). †
|
|||||||||||||||||
Amended and Restated Credit Agreement, dated as of May 20, 2014, relating to the Credit Agreement, dated as of April 10, 2007, as amended, among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as the administrative agent, collateral agent and swing line lender and other lenders as parties thereto (incorporated by reference to Exhibit 10.1 to Catalent Pharma Solutions, Inc.’s Current Report on Form 8-K filed on May 27, 2014). | |||||||||||||||||
Intellectual Property Security Agreement, dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc., PTS Intermediate Holdings LLC, Certain Subsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit 10.21 to Catalent Pharma Solutions, Inc.’s Registration Statement on Form S-4 filed on December 6, 2007). | |||||||||||||||||
Intellectual Property Security Agreement Supplement, dated as of July 1, 2008, to the Intellectual Property Security Agreement, dated as of April 10, 2007, among PTS Acquisition Corp., Cardinal Health 409, Inc., PTS Intermediate Holdings LLC, Certain Subsidiaries of Holdings Identified Therein and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit 10.28 to Catalent Pharma Solutions, Inc.’s Annual Report on Form 10-K filed on September 29, 2008). | |||||||||||||||||
Amendment No. 1, dated December 1, 2014 to Amended and Restated Credit Agreement, dated as of May 20, 2014 among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as the administrative agent, collateral agent and swing line lender and other lenders as parties thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 2, 2014). | |||||||||||||||||
Employment Agreement, dated October 22, 2014 by and among Catalent, Inc. and John R. Chiminski (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 24, 2014). † | |||||||||||||||||
|
Catalent Pharma Solutions, Inc. Deferred Compensation Plan as amended and restated effective January 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2017). †
|
||||||||||||||||
|
|||||||||||||||||
|
Amendment to the Catalent Pharma Solutions, Inc. Deferred Compensation Plan effective January 1, 2017 (incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K filed on August 28, 2017). † | ||||||||||||||||
Amendment No. 2 to Amended and Restated Credit Agreement, dated as of December 9, 2016, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc. as administrative agent, collateral agent and swing line lender and the lenders party thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc. PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc. and JP Morgan Chase Bank, N.A. as L/C Issuers, the other lenders party thereto and the other agents party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 12, 2016). | |||||||||||||||||
Form of Performance Share Unit Agreement for U.S. Employees for the performance period July 1, 2016 through June 30, 2019 (incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K filed on August 28, 2017). † | |||||||||||||||||
Form of Performance Share Unit Agreement for Non-U.S. Employees for the performance period July 1, 2016 through June 30, 2019 (incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-K filed on August 28, 2017). † | |||||||||||||||||
Amendment to Employment Agreement, dated August 23, 2017, by and between Catalent, Inc. and John R. Chiminski (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 28, 2017). † | |||||||||||||||||
Form of Restricted Stock Agreement for U.S. Employees (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 28, 2017). †
|
|||||||||||||||||
Amendment No. 2 to the Catalent Pharma Solutions, Inc. Deferred Compensation Plan effective October 16, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2017). †
|
|||||||||||||||||
Amendment No. 3 to Amended and Restated Credit Agreement, dated as of October 18, 2017, by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc., as administrative agent, collateral agent and swing line lender and the lenders party thereto, which amends that certain Amended and Restated Credit Agreement, dated as of May 20, 2014 (as amended), by and among Catalent Pharma Solutions, Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding, Inc. and JPMorgan Chase Bank, N.A., as L/C Issuers, the other lenders party thereto and the other agents party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 18, 2017). | ||||||||||||||
Form of the Performance Share Unit Agreement for U.S. Employees for the performance period July 1, 2017 through June 30, 2020 (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2017). †
|
||||||||||||||
Form of the Performance Share Unit Agreement for Non-U.S. Employees for the performance period July 1, 2017 through June 30, 2020 (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2017). †
|
||||||||||||||
Offer letter, dated January 31, 2018, between Wetteny Joseph and Catalent Pharma Solutions, LLC (incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K filed on February 5, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for U.S. Employees (for the performance period July 1, 2016 through June 30, 2019) (incorporated by reference to Exhibit 10.40 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for Non-U.S. Employees (for the performance period July 1, 2016 through June 30, 2019) (incorporated by reference to Exhibit 10.41 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for U.S. Employees (for the performance period July 1, 2017 through June 30, 2020) (incorporated by reference to Exhibit 10.42 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for Non-U.S. Employees (for the performance period July 1, 2017 through June 30, 2020) (incorporated by reference to Exhibit 10.43 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of the Performance Share Unit Agreement for U.S. Employees (for the performance period July 1, 2018 through June 30, 2021) (incorporated by reference to Exhibit 10.44 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of the Performance Share Unit Agreement for Non-U.S. Employees (for the performance period July 1, 2018 through June 30, 2021) (incorporated by reference to Exhibit 10.45 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for U.S. Employees (for the performance period July 1, 2018 through June 30, 2021) (incorporated by reference to Exhibit 10.46 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Form of Performance Restricted Stock Agreement for Non-U.S. Employees (for the performance period July 1, 2018 through June 30, 2021) (incorporated by reference to Exhibit 10.47 to the Company's annual report on Form 10-K filed on August 28, 2018). † | ||||||||||||||
Offer letter, dated January 31, 2019, between Alessandro Maselli and Catalent Pharma Solutions. † * | ||||||||||||||
Terms and Conditions of Employment Statement, dated February 1, 2018, between Alessandro Maselli and Catalent Pharma Solutions. † * | ||||||||||||||
Equity Commitment and Investment Agreement, dated as of April 14, 2019, by and among Catalent, Inc., Green Equity Investors VII, L.P. and Green Equity Investors Side VII, L.P. Disclosure schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Investment Agreement as filed identifies such schedules, including the general nature of their contents. The Company agrees to furnish a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request (incorporated by reference to exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 17, 2019). | ||||||||||||||
Stockholders’ Agreement, dated as of May 17, 2019, by and among Catalent, Inc., Green Equity Investors VII, L.P., Green Equity Investors Side VII, L.P., LGP Associates VII-A LLC and LGP Associates VII-B LLC (incorporated by reference to exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 22, 2019). | ||||||||||||||
Registration Rights Agreement, dated as of May 17, 2019, by and among Catalent, Inc., Green Equity Investors VII, L.P., Green Equity Investors Side VII, L.P., LGP Associates VII-A LLC and LGP Associates VII-B LLC (incorporated by reference to exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 22, 2019). | ||||||||||||||
Amendment No. 4 to Amended and Restated Credit Agreement by and among /Catalent Pharma Solutions, Inc., as Borrower, PTS Intermediate Holdings LLC, as Holdings, the subsidiaries of Holdings party thereto, JP Morgan Chase Bank, N.A., as the administrative agent, collateral agent, swing line lender, and letter of credit issuer, and the lenders and other parties thereto (incorporated by reference to exhibit 10.4 to the Company's Current Report on Form 8-K filed on May 22, 2019). | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Restricted Stock Unit Agreement for U.S. Employees (incorporated by reference to exhibit 10.40 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Restricted Stock Unit Agreement for non-U.S. Employees (incorporated by reference to exhibit 10.41 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Performance Share Unit Agreement for U.S. Employees (three-year performance period) (incorporated by reference to exhibit 10.42 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Performance Share Unit Agreement for non-U.S. Employees (three-year performance period) (incorporated by reference to exhibit 10.43 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Option Agreement for U.S. Employees (incorporated by reference to exhibit 10.44 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Form of 2018 Omnibus Incentive Plan Option Agreement for non-U.S. Employees (incorporated by reference to exhibit 10.45 to the Company's Quarterly Report on Form 10-Q filed on May 7, 2019). † | ||||||||||||||
Offer letter, dated March 13, 2018, between Steven Fasman and Catalent Pharma Solutions Inc. † * | ||||||||||||||
Rollover Agreement, dated as of May 9, 2019, between Pete Buzy and Catalent, Inc. † * | ||||||||||||||
Offer letter, dated May 14, 2019, between Pete Buzy and Catalent Pharma Solutions Inc. † * | ||||||||||||||
Option Grant Notice, dated May 17, 2019, to Pete Buzy (retention grant) † * | ||||||||||||||
Substitute Option Grant Notice and Agreement, dated May 17, 2019, between Pete Buzy and Catalent, Inc. † * | ||||||||||||||
Summary of Management Incentive Plan for the fiscal year ended June 30, 2019. † * | ||||||||||||||
Subsidiaries of the Registrant. * | ||||||||||||||
Consent of Ernst & Young LLP. * | ||||||||||||||
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. * | ||||||||||||||
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. * | ||||||||||||||
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | ||||||||||||||
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** | ||||||||||||||
101.1 | The following materials are formatted in inline XBRL (inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statement of Changes in Shareholders’ Equity (Deficit), (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. * | |||||||||||||
CATALENT, INC. | ||||||||||||||||||||
Date: | August 27, 2019 | By: | /s/ STEVEN L. FASMAN | |||||||||||||||||
Steven L. Fasman | ||||||||||||||||||||
Senior Vice President, General Counsel
and Secretary
|
Signature | Title | Date | |||||||||
/s/ JOHN R. CHIMINSKI | Chief Executive Officer (Principal Executive Officer) and Director | 8/27/2019 | |||||||||
John R. Chiminski | |||||||||||
/s/ MADHAVAN BALACHANDRAN | Director | 8/27/2019 | |||||||||
Madhavan Balachandran | |||||||||||
/s/ J. MARTIN CARROLL | Director | 8/27/2019 | |||||||||
J. Martin Carroll | |||||||||||
/s/ ROLF CLASSON | Director | 8/27/2019 | |||||||||
Rolf Classon | |||||||||||
/s/ ROSEMARY A. CRANE | Director | 8/27/2019 | |||||||||
Rosemary A. Crane | |||||||||||
/s/ JOHN J. GREISCH | Director | 8/27/2019 | |||||||||
John J. Greisch | |||||||||||
/s/ CHRISTA KREUZBURG | Director | 8/27/2019 | |||||||||
Christa Kreuzburg | |||||||||||
/s/ GREGORY T. LUCIER | Director | 8/27/2019 | |||||||||
Gregory T. Lucier | |||||||||||
/s/ DONALD E. MOREL, JR. | Director | 8/27/2019 | |||||||||
Donald E. Morel, Jr. | |||||||||||
/s/ JACK STAHL | Director | 8/27/2019 | |||||||||
Jack Stahl | |||||||||||
/s/ PETER ZIPPELIUS | Director | 8/27/2019 | |||||||||
Peter Zippelius | |||||||||||
/s/ WETTENY JOSEPH | Senior Vice President & Chief Financial Officer | 8/27/2019 | |||||||||
Wetteny Joseph
|
(Principal Financial Officer and Principal Accounting Officer) |
Business Performance Factors Weighting | |||||||||||||||||
Position Category (1)
|
Overall
Catalent |
Business
Unit |
Site/
Region (3)
|
||||||||||||||
ELT and Corporate | 100% | ||||||||||||||||
BU Functional Leaders (2)
|
50% | 50% | |||||||||||||||
Site/Region-Based Leaders | 30% | 30% | 40% | ||||||||||||||
Site-Based Participants | 0% | 40% | 60% |
% of Target Achieved | Achievement Factor Assigned | Comment | ||||||
>115% | 187.50% | |||||||
115% | 187.50% | Maximum performance @ 187.5% | ||||||
114% | 182.50% | |||||||
113% | 177.50% | |||||||
112% | 172.50% | |||||||
111% | 167.50% | |||||||
110% | 162.50% | |||||||
109% | 155.00% | |||||||
108% | 147.50% | |||||||
107% | 140.00% | |||||||
106% | 132.50% | |||||||
105% | 125.00% | |||||||
104% | 120.00% | |||||||
103% | 115.00% | |||||||
102% | 110.00% | |||||||
101% | 105.00% | |||||||
100% | 100.00% | Target | ||||||
99% | 95.00% | |||||||
98% | 90.00% | |||||||
97% | 85.00% | |||||||
96% | 80.00% | |||||||
95% | 75.00% | |||||||
94% | 70.00% | |||||||
93% | 65.00% | |||||||
92% | 60.00% | |||||||
91% | 55.00% | |||||||
90% | 50.00% | Threshold performance @ 50% | ||||||
< 90% | Zero | Any payout at Committee discretion |
Improvement in Annual Capital Deployed | Target Payout % | Comment | ||||||
-1.15% | 170% | Maximum | ||||||
-1.05% | 145% | |||||||
-0.80% | 125% | |||||||
-0.65% | 110% | |||||||
-0.50% | 100% | Target | ||||||
-0.35% | 90% | |||||||
-0.20% | 75% | |||||||
-0.10% | 50% | Minimum |
Event |
Occurring prior to April 1, 2019
|
Occurring between April 1, 2019 and MIP payment (scheduled for Sept. 2019)
|
||||||||||||
Voluntary termination (including resignation and job abandonment) | Not eligible for payout | |||||||||||||
Involuntary termination for cause* or for other than reduction-in-force/restructure/divestiture
|
Not eligible for payout | |||||||||||||
Involuntary termination due to reduction-in-force/restructure/divestiture | Not eligible for payout | Employees with continuous MIP-eligible service through the date of termination, where at least 90 days of that service occurred in fiscal 2019, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated) | ||||||||||||
Death | Employees with continuous MIP-eligible service through the date of death, where at least 90 days of that service occurred in fiscal 2019, will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated) | |||||||||||||
Retirement**
|
Not eligible for payout | Employees with at least 90 days of MIP-eligible service in fiscal 2019 will be eligible for payout at the normal payout date based on actual company/BU/site results (pro-rated for the portion of the year in service) and IPF as determined by the employees’ manager (similarly pro-rated) | ||||||||||||
Certain leaves of absence (LOA) may affect eligibility. Applicable LOA policies should be consulted on a regional basis. |
1 | ACN 093 794 104 Pty Ltd (AUSTRALIA) | ||||
2 | Catalent Argentina S.A.I.C. (ARGENTINA) | ||||
3 | Catalent Australia Holding Pty Ltd (AUSTRALIA) | ||||
4 | Catalent Australia Pty Ltd (AUSTRALIA) | ||||
5 | Catalent Belgium Holding S.A. (BELGIUM) | ||||
6 | Catalent Belgium S.A. (BELGIUM) | ||||
7 | Catalent Brasil Ltda (BRAZIL) | ||||
8 | Catalent China Holdings Limited (CAYMAN ISLANDS) | ||||
9 | Catalent Cosmetics AG (SWITZERLAND) | ||||
10 | Catalent CTS (Edinburgh) Limited (UNITED KINGDOM) | ||||
11 | Catalent CTS (Kansas City), LLC (DELAWARE) | ||||
12 | Catalent CTS (Singapore) Pvt Ltd (SINGAPORE) | ||||
13 | Catalent CTS (Wales) Limited (UNITED KINGDOM) | ||||
14 | Catalent CTS UK Holding Limited (UNITED KINGDOM) | ||||
15 | Catalent CTS, LLC (DELAWARE) | ||||
16 | Catalent France Beinheim S.A. (FRANCE) (99.85%) | ||||
17 | Catalent France Limoges Holding S.A.S. (FRANCE) | ||||
18 | Catalent France Limoges S.A.S. (FRANCE) | ||||
19 | Catalent Germany Eberbach GmbH (GERMANY) | ||||
20 | Catalent Germany Holding II GmbH (GERMANY) | ||||
21 | Catalent Germany Holding III GmbH (GERMANY) | ||||
22 | Catalent Germany Schorndorf GmbH (GERMANY) | ||||
23 | Catalent Holdco II, LLC (DELAWARE) | ||||
24 | Catalent Holdco III, LLC (DELAWARE) | ||||
25 | Catalent Holdco IV, LLC (DELAWARE) | ||||
26 | Catalent Indiana Holdings, LLC (DELAWARE) | ||||
27 | Catalent Indiana, LLC (INDIANA) | ||||
28 | Catalent Italy Holding Srl (ITALY) | ||||
29 | Catalent Italy S.p.A. (ITALY) | ||||
30 | Catalent Japan K.K. (JAPAN) | ||||
31 | Catalent Micron Technologies Limited (UNITED KINGDOM) | ||||
32 | Catalent Micron Technologies, Inc. (PENNSYLVANIA) | ||||
33 | Catalent MTI Pharma Solutions Limited (UNITED KINGDOM) | ||||
34 | Catalent MTI Pharma Solutions, Inc. (DELAWARE) | ||||
35 | Catalent Netherlands Holding B.V. (NETHERLANDS) | ||||
36 | Catalent Nottingham Limited (UNITED KINGDOM) | ||||
37 | Catalent Ontario Limited (CANADA) | ||||
38 | Catalent Pharma Solutions GmbH (SWITZERLAND) | ||||
39 | Catalent Pharma Solutions Limited (UNITED KINGDOM) |
40 | Catalent Pharma Solutions, Inc. (DELAWARE) | ||||
41 | Catalent Pharma Solutions, LLC (DELAWARE) | ||||
42 | Catalent Pharmaceutical Consulting (Shanghai) Co., Ltd. (CHINA) | ||||
43 | Catalent PR Humacao, Inc. (PUERTO RICO) | ||||
44 | Catalent San Diego Inc. (CALIFORNIA) | ||||
45 | Catalent (Shanghai) Clinical Trial Supplies Co Ltd. (CHINA) | ||||
46 | Catalent Singapore Holdings Pte. Ltd. (SINGAPORE) | ||||
47 | Catalent U.K. Packaging Limited (UNITED KINGDOM) | ||||
48 | Catalent U.K. Swindon Encaps Limited (UNITED KINGDOM) | ||||
49 | Catalent U.K. Swindon Holding II Limited (UNITED KINGDOM) | ||||
50 | Catalent U.K. Swindon Zydis Limited (UNITED KINGDOM) | ||||
51 | Catalent UK Supply Chain Limited (UNITED KINGDOM) | ||||
52 | Catalent Uruguay S.A. (URUGUAY) | ||||
53 | Catalent US Holding I, LLC (DELAWARE) | ||||
54 | Catalent USA Packaging, LLC (DELAWARE) | ||||
55 | Catalent USA Woodstock, Inc. (ILLINOIS) | ||||
56 | Columbia Laboratories (Bermuda) Ltd. (BERMUDA) | ||||
57 | Columbia Labs UK Ltd (UNITED KINGDOM) | ||||
58 | Juniper Pharmaceuticals (France) SARL (FRANCE) | ||||
59 | Juniper Pharmaceuticals, Inc. (DELAWARE) | ||||
60 | Molecular Profiles Ltd (UNITED KINGDOM) | ||||
61 | Paragon Bioservices, Inc. (DELAWARE) | ||||
62 | PTS Intermediate Holdings LLC (DELAWARE) | ||||
63 | R.P. Scherer DDS B.V. (NETHERLANDS) | ||||
64 | R.P. Scherer Technologies, LLC (NEVADA) | ||||
65 | Raritan Valley Insurance Company (NEW JERSEY) | ||||
66 | Redwood Bioscience Inc. (DELAWARE) |
/s/ JOHN R. CHIMINSKI | ||
John R. Chiminski | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
/s/ WETTENY JOSEPH | ||
Wetteny Joseph | ||
Senior Vice President and | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ JOHN R. CHIMINSKI | ||
John R. Chiminski | ||
Chief Executive Officer |
/s/ WETTENY JOSEPH | ||
Wetteny Joseph | ||
Senior Vice President and | ||
Chief Financial Officer |