- Q4'23 net revenue of $1.07 billion decreased (17)% as
reported, or (17)% in constant currency, compared to Q4'22.
Organic, constant-currency net revenue decreased (19)%, compared to
Q4'22.
- Fiscal 2023 net revenue of $4.28 billion decreased (11)% as
reported, or (9)% in constant currency, compared to fiscal 2022.
Organic, constant-currency net revenue decreased (11)% compared to
FY'22.
- Q4'23 net loss of $(86) million and fiscal 2023 net loss of
$(232) million.
- Q4'23 Adjusted EBITDA(1) of $139 million decreased (61)% as
reported, or (61)% in constant currency, compared to
Q4'22.
- Fiscal 2023 Adjusted EBITDA(1) of $714 million decreased
(43)% as reported, or (42)% in constant currency, compared to
FY'22.
- FY'24 financial guidance includes net revenue of $4.3
billion to $4.5 billion and Adjusted EBITDA of $680 million to $760
million.
- Plans to file Form 12b-25 to extend filing date of its Form
10-K.
(1) See "Non-GAAP Financial Measures" below and the GAAP to
non-GAAP reconciliation provided later in this release.
Catalent, Inc. (NYSE: CTLT), the leader in enabling the
development and supply of better treatments for patients worldwide,
today announced preliminary financial results for the fourth
quarter of fiscal 2023, which ended June 30, 2023.
“We continue to make progress in improving our operational
performance and continue to win new business with new and existing
customers, including in some of the industry’s most exciting areas,
leading us on a path toward more sustainable, profitable growth and
to exit fiscal 2024 in a much stronger operational and financial
position,” said Alessandro Maselli, President and Chief Executive
Officer of Catalent, Inc. “We are also executing on our previously
announced, company-wide cost initiatives intended to right-size our
business to current levels of market demand and deliver value for
our shareholders. We remain confident in our leading market
position as well as our long-term opportunities, and are committed
to delivering the industry’s most complex manufacturing solutions
and innovative medicines for the benefit of our healthcare partners
and patients.”
Fourth Quarter 2023 Consolidated Results
Net revenue of $1.07 billion decreased 17% as reported, or 17%
in constant currency, from the $1.29 billion reported for the
fourth quarter a year ago. Overall organic net revenue (i.e.,
excluding the effect of acquisitions, divestitures, and currency
translation) decreased by 19% over the same periods.
Net loss and loss per basic and diluted share was $86 million,
or $0.48, respectively, compared to net earnings attributable to
common shareholders of $168 million, or $0.94 per basic share,
$0.93 per diluted share, in the fourth quarter a year ago.
EBITDA from operations(1) was $18 million, a decrease of $299
million from $317 million in the fourth quarter a year ago. Fourth
quarter fiscal 2023 Adjusted EBITDA(1) was $139 million, or 13% of
net revenue, compared to $358 million, or 28% of net revenue, in
the fourth quarter a year ago. This represents a decrease of 61% as
reported and on a constant-currency basis, compared to the fiscal
2022 fourth quarter.
Adjusted Net Income(1) was $16 million, or $0.09 per diluted
share, compared to Adjusted Net Income of $195 million, or $1.08
per diluted share, in the fourth quarter a year ago.
(1) See "Non-GAAP Financial Measures" below and the GAAP to
non-GAAP reconciliation provided later in this release.
Fourth Quarter 2023 Segment
Review
(Dollars in millions)
Three Months Ended June
30,
Constant Currency
2023
2022
Change %
Biologics
Net revenue
$
406
$
645
(37) %
Segment EBITDA
(12)
194
(106) %
Segment EBITDA margin
(2.9) %
30.0 %
Pharma and Consumer Health
Net revenue
662
643
3 %
Segment EBITDA
187
198
(6) %
Segment EBITDA margin
28.2 %
30.8 %
Inter-segment revenue
elimination
—
(1)
17 %
Unallocated costs
(157)
(75)
107 %
Combined totals
Net revenue
$
1,068
$
1,287
(17) %
EBITDA from operations
$
18
$
317
(94) %
Fiscal Year 2023 Segment Review
(Dollars in millions)
Fiscal Year Ended June
30,
FX Impact
Constant Currency
Increase (Decrease)
2023
2022
Change $
Change %
Biologics
Net revenue
$
1,984
$
2,534
$
(30)
$
(520)
(21) %
Segment EBITDA
287
777
(4)
(486)
(63) %
Segment EBITDA margin
14.5 %
30.7 %
Pharma and Consumer Health
Net revenue
2,294
2,271
(78)
101
4 %
Segment EBITDA
555
589
(23)
(11)
(2) %
Segment EBITDA margin
24.2 %
25.9 %
Inter-segment revenue
elimination
(2)
(3)
—
1
*
Unallocated Costs
(551)
(286)
9
(274)
97 %
Combined totals
Net revenue
$
4,276
$
4,802
$
(108)
$
(418)
(9) %
EBITDA from operations
$
291
$
1,080
$
(18)
$
(771)
(71) %
Biologics segment
2023 vs. 2022
2023 vs. 2022
Year-Over-Year Change
Three Months Ended
June 30,
Fiscal Year Ended
June 30,
Net Revenue
Segment EBITDA
Net Revenue
Segment EBITDA
Organic
(37) %
(105) %
(21) %
(61) %
Impact of acquisitions
— %
(1) %
— %
(2) %
Constant-currency change
(37) %
(106) %
(21) %
(63) %
Foreign exchange translation impact on
reporting
— %
— %
(1) %
— %
Total % change
(37) %
(106) %
(22) %
(63) %
Pharma and Consumer Health
segment
2023 vs. 2022
2023 vs. 2022
Year-Over-Year Change
Three Months Ended
June 30,
Fiscal Year Ended
June 30,
Net Revenue
Segment EBITDA
Net Revenue
Segment EBITDA
Organic
(1) %
(11) %
(1) %
(8) %
Impact of acquisitions
4 %
5 %
5 %
6 %
Constant-currency change
3 %
(6) %
4 %
4 %
(2) %
Foreign currency translation impact on
reporting
— %
— %
(3) %
(4) %
Total % change
3 %
(6) %
1 %
(6) %
Segment Net Revenue as a % of Total Net
Revenue
Three Months Ended
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
Biologics
38 %
46 %
50 %
51 %
50 %
Pharma and Consumer Health
62 %
54 %
50 %
49 %
50 %
Net Revenue
100 %
100 %
100 %
100 %
100 %
Balance Sheet and Liquidity
As of June 30, 2023, Catalent had $4.85 billion in total debt,
and $4.57 billion in total debt net of cash, cash equivalents, and
marketable securities, compared to $4.60 billion in total net debt
as of March 31, 2023.
Catalent's ratio of Net First Lien Debt over LTM Adjusted EBITDA
was 2.8x at June 30, 2023. Catalent's senior secured credit
agreement requires that this ratio remain below 6.5x.
Catalent’s net leverage ratio(1) as of June 30, 2023 was 6.4x,
compared to 4.9x at March 31, 2023 and 2.9x at June 30, 2022.
(1) Net Leverage Ratio is a non-GAAP measure that represents the
ratio of Net Debt (total principal amount of debt outstanding, net
of amortized discount and debt issuance costs, less cash and cash
equivalents and marketable securities) to Adjusted EBITDA for each
applicable period. For a reconciliation of Adjusted EBITDA, which
is subject to important limitations, to net earnings see our
reconciliation of Adjusted EBITDA provided later in this
release.
Fiscal Year 2024 Outlook
FY'24
Initial Full-Year Guidance
Net revenue
$4,300 million - $4,500
million
Adjusted EBITDA
$680 million - $760 million
Adjusted net income
$113 million - $175 million
Weighted average shares outstanding -
diluted
181 million - 183 million
Earnings Webcast
The Company’s management will host a webcast to discuss the
results at 8:15 a.m. ET today. Catalent invites all interested
parties to listen to the webcast, which will be accessible through
Catalent’s website at http://investor.catalent.com. A supplemental
slide presentation will also be available in the “Investors”
section of Catalent’s website prior to the start of the webcast.
The webcast replay, along with the supplemental slides, will be
available for 90 days in the “Investors” section of Catalent’s
website at www.catalent.com.
Late Filing on Form 12b-25
Tomorrow, the Company expects to file with the SEC a
Notification of Late Filing on Form 12b-25, as it determined it
would be unable to file its Annual Report on Form 10-K (the “Annual
Report”) by its original due date of August 29, 2023. The Company
requires additional time to complete procedures related to
management’s assessment of the effectiveness of its internal
controls and other closing procedures. Based on currently available
information and subject to the completion of the preparation of the
Company's financial statements and assessment of the Company’s
internal controls over financial reporting and completion of the
audits thereof, the Company does not expect any material change to
the financial results included in the Form 10-K compared to the
financial information reported in this earnings release. The
Company expects to file its Annual Report within the extension
period of 15 calendar days provided by Rule 12b-25 of the
Securities Exchange Act of 1934, as amended.
About Catalent, Inc.
Catalent, Inc., is the global leader in enabling pharma,
biotech, and consumer health partners to optimize product
development, launch, and full life-cycle supply for patients around
the world. With broad and deep scale and expertise in development
sciences, delivery technologies, and multi-modality manufacturing,
Catalent is a preferred industry partner for personalized
medicines, consumer health brand extensions, and blockbuster drugs.
Catalent helps accelerate over 1,500 partner programs and launch
over 150 new products every year. Its flexible manufacturing
platforms at over 50 global sites supply approximately 70 billion
doses of nearly 8,000 products annually. Catalent’s expert
workforce of approximately 17,800 includes more than 3,000
scientists and technicians. Headquartered in Somerset, New Jersey,
the company generated nearly $4.3 billion in revenue in its 2023
fiscal year. For more information, visit www.catalent.com.
Non-GAAP Financial Measures
Use of EBITDA from operations, Adjusted EBITDA, Adjusted Net
Income and Segment EBITDA
Management measures operating performance based on consolidated
earnings from operations before interest expense, expense (benefit)
for income taxes, and depreciation and amortization, adjusted for
the income or loss attributable to non-controlling interests
(“EBITDA from operations”). EBITDA from operations is not defined
under U.S. GAAP, is not a measure of operating income, operating
performance, or liquidity presented in accordance with U.S. GAAP,
and is subject to important limitations.
Catalent believes that the presentation of EBITDA from
operations enhances an investor’s understanding of its financial
performance. Catalent believes this measure is a useful financial
metric to assess its operating performance across periods by
excluding certain items that it believes are not representative of
its core business and uses this measure for business planning
purposes.
In addition, given the significant investments that Catalent has
made in the past in property, plant and equipment, depreciation and
amortization expenses represent a meaningful portion of its cost
structure. Catalent believes that EBITDA from operations will
provide investors with a useful tool for assessing the
comparability between periods of Catalent's ability to generate
cash from operations sufficient to pay taxes, to service debt and
to undertake capital expenditures because it eliminates
depreciation and amortization expense. Catalent presents EBITDA
from operations in order to provide supplemental information that
it considers relevant for the readers of its consolidated financial
statements, and such information is not meant to replace or
supersede U.S. GAAP measures. Catalent’s definition of EBITDA from
operations may not be the same as similarly titled measures used by
other companies.
Catalent evaluates the performance of its segments based on
segment earnings before non-controlling interest, other (income)
expense, impairments, restructuring costs, interest expense, income
tax expense (benefit), and depreciation and amortization (“segment
EBITDA”). Moreover, under Catalent’s credit agreement, its ability
to engage in certain activities, such as incurring certain
additional indebtedness, making certain investments and paying
certain dividends, is tied to ratios based on Adjusted EBITDA,
which is not defined under U.S. GAAP, is not a measure of operating
income, operating performance, or liquidity presented in accordance
with U.S. GAAP, and is subject to important limitations. Adjusted
EBITDA is the covenant compliance measure used in the credit
agreement governing debt incurrence and restricted payments.
Because not all companies use identical calculations, Catalent’s
presentation of Adjusted EBITDA may not be comparable to similarly
titled measures of other companies.
Management also measures operating performance based on Adjusted
Net Income and Adjusted Net Income per share. Adjusted Net Income
is not defined under U.S. GAAP, is not a measure of operating
income, operating performance, or liquidity presented in accordance
with U.S. GAAP and is subject to important limitations. Catalent
believes that the presentation of Adjusted Net Income and Adjusted
Net Income per share enhances an investor’s understanding of its
financial performance. Catalent believes these measures are a
useful financial metric to assess its operating performance across
periods by excluding certain items that it believes are not
representative of its core business and Catalent uses these
measures for business planning purposes. Catalent defines Adjusted
Net Income as net earnings adjusted for amortization attributable
to purchase accounting and adjustments for other cash and non-cash
items included in the table below, partially offset by its estimate
of the tax effects of such cash and non-cash items. Catalent
believes that Adjusted Net Income and Adjusted Net Income per share
provides investors with a useful tool for assessing the
comparability between periods of its ability to generate cash from
operations available to its stockholders. Catalent’s definition of
Adjusted Net Income may not be the same as similarly titled
measures used by other companies. Adjusted Net Income per share is
computed by dividing Adjusted Net Income by the weighted average
diluted shares outstanding.
The most directly comparable U.S. GAAP measure to EBITDA from
operations, Adjusted EBITDA, and Adjusted Net Income is net
earnings. Included in this release is a reconciliation of net
earnings to EBITDA from operations, Adjusted EBITDA and Adjusted
Net Income.
Catalent does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable U.S. GAAP financial
measures because it could not do so without unreasonable effort due
to the unavailability of the information needed to calculate
reconciling items and due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from the non-GAAP financial measures in future periods. When
planning, forecasting, and analyzing future periods, Catalent does
so primarily on a non-GAAP basis without preparing a U.S. GAAP
analysis as that would require estimates for various cash and
non-cash reconciling items that would be difficult to predict with
reasonable accuracy. For example, equity compensation expense would
be difficult to estimate because it depends on Catalent’s future
hiring and retention needs, as well as the future fair market value
of its common stock, all of which are difficult to predict and
subject to constant change. It is equally difficult to anticipate
the need for or magnitude of a presently unforeseen one-time
restructuring expense or the values of end-of-period foreign
currency exchange rates. As a result, Catalent does not believe
that a U.S. GAAP reconciliation would provide meaningful
supplemental information about its outlook.
Use of Constant Currency
As changes in exchange rates are an important factor in
understanding period-to-period comparisons, Catalent believes the
presentation of results on a constant-currency basis in addition to
reported results helps improve investors’ ability to understand its
operating results and evaluate its performance in comparison to
prior periods. Constant-currency information compares results
between periods as if exchange rates had remained constant period
over period. Catalent uses results on a constant-currency basis as
one measure to evaluate its performance. Catalent calculates
constant currency by calculating current-year results using
prior-year foreign currency exchange rates. Catalent generally
refers to such amounts calculated on a constant-currency basis as
excluding the impact of foreign exchange or being on a
constant-currency basis. These results should be considered in
addition to, not as a substitute for, results reported in
accordance with U.S. GAAP. Results on a constant-currency basis, as
Catalent presents them, may not be comparable to similarly titled
measures used by other companies and are not measures of
performance presented in accordance with U.S. GAAP.
Forward-Looking Statements
This release contains both historical and forward-looking
statements and guidance. All statements other than statements of
historical fact, are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements generally can
be identified by the use of statements that include phrases such as
“believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,”
“project,” “predict,” “hope,” “foresee,” “likely,” “may,” “could,”
“target,” “will,” “would,” or other words or phrases with similar
meanings. Similarly, statements that describe Catalent’s
objectives, plans, or goals are, or may be, forward-looking
statements. These statements are based on current expectations of
future events. If underlying assumptions prove inaccurate or
unknown risks or uncertainties materialize, actual results could
vary materially from Catalent’s expectations, projections, and
guidance. Some of the factors that could cause actual results to
differ include, but are not limited to, the following: the
finalization of Catalent's fiscal 2023 financial statements, the
completion of Catalent's closing procedures, including without
limitation its evaluation of the effectiveness of its internal
controls over financial reporting, the final timing of filing
Catalent's Annual Report on Form 10-K for the fiscal year ended
June 30, 2023; Catalent’s ability to resolve productivity issues at
three of its manufacturing facilities, the impact of such issues on
product made at these facilities, the timing of recovering
unproduced batches and resumption of normal activities at these
facilities, and the impact of such issues on Catalent’s results of
operations and financial condition; the declining demand for
various vaccines and treatments for the SARS-Co-V-2 strain of
coronavirus and its variants (“COVID-19”) from both patients and
governments around the world may affect sales of the COVID-19
products Catalent manufactures; participation in a highly
competitive market and increased competition that may adversely
affect Catalent’s business; demand for its offerings, which depends
in part on its customers’ research and development and the clinical
and market success of their products; product and other liability
risks that could adversely affect Catalent’s results of operations,
financial condition, liquidity and cash flows; failure to comply
with existing and future regulatory requirements; failure to
provide quality offerings to customers could have an adverse effect
on Catalent’s business and subject it to regulatory actions and
costly litigation; problems providing the highly exacting and
complex services or support required; global economic, political
and regulatory risks to Catalent’s operations, including risks from
inflation, disruptions to global supply chains, or from the
Ukrainian-Russian war; inability to enhance existing or introduce
new technology or service offerings in a timely manner; inadequate
patents, copyrights, trademarks and other forms of intellectual
property protections; fluctuations in the costs, availability, and
suitability of the components of the products Catalent
manufactures, including active pharmaceutical ingredients,
excipients, purchased components and raw materials; changes in
market access or healthcare reimbursement in the United States or
internationally; fluctuations in the exchange rate of the U.S.
dollar against other currencies; adverse tax legislative or
regulatory initiatives or challenges or adjustments to Catalent’s
tax positions; loss of key personnel; risks generally associated
with information systems; inability to complete any future
acquisition or other transaction that may complement or expand its
business or divest of non-strategic businesses or assets and
difficulties in successfully integrating acquired businesses and
realizing anticipated benefits of such acquisitions; risks
associated with timely and successfully completing, and correctly
anticipating the future demand predicted for, capital expansion
projects at existing facilities; offerings and customers’ products
that may infringe on the intellectual property rights of third
parties; environmental, health, and safety laws and regulations,
which could increase costs and restrict operations; labor and
employment laws and regulations or labor difficulties, which could
increase costs or result in operational disruptions; additional
cash contributions required to fund Catalent’s existing pension
plans; substantial leverage that may limit its ability to raise
additional capital to fund operations and react to changes in the
economy or in the industry; exposure to interest-rate risk to the
extent of its variable-rate debt preventing it from meeting its
obligations under its indebtedness; and the Company’s ability to
file the Annual Report within the time period permitted by Rule
12b-25 of the Securities Exchange Act of 1934, amended; and the
Company’s 2023 fiscal year fourth quarter final results differing
materially from the preliminary, unaudited 2023 fiscal year fourth
quarter results set forth herein. . For a more detailed discussion
of these and other factors, see the information under the caption
“Risk Factors” in Catalent’s Annual Report on Form 10-K for the
fiscal year ended June 30, 2022, as amended by its Annual Report on
Form 10-K/A for the same fiscal year, and its Quarterly Report on
Form 10-Q for the three and nine months ended March 31, 2023. All
forward-looking statements speak only as of the date of this
release or as of the date they are made, and Catalent does not
undertake to update any forward-looking statement, including
without limitation, any financial projection or guidance, as a
result of new information, future events, developments, or
otherwise, except to the extent required by law.
More products. Better treatments. Reliably
supplied.™
Catalent, Inc.
Consolidated Statements of
Operations
(Unaudited; dollars and shares
in millions, except per share data)
Three Months Ended
June 30,
FX Impact
Constant Currency
Increase (Decrease)
2023
2022
Change $
Change %
Net revenue
$
1,068
$
1,287
$
3
$
(222)
(17) %
Cost of sales
833
825
2
6
1 %
Gross margin
235
462
1
(228)
(49) %
Selling, general, and administrative
expenses
219
226
1
(8)
(3) %
Other operating expense, net
116
16
2
98
661 %
Operating (loss) earnings
(100)
220
(2)
(318)
(144) %
Interest expense, net
54
32
—
22
67 %
Other (income) expense, net
(4)
3
1
(8)
(238) %
(Loss) earnings before income taxes
(150)
185
(3)
(332)
(179) %
Income tax (benefit) expense
(64)
17
(2)
(79)
(458) %
Net (loss) earnings
$
(86)
$
168
$
(1)
$
(253)
(150) %
Weighted average shares outstanding -
basic
181
180
Weighted average shares outstanding -
diluted
181
181
Earnings per share:
Basic
Net (loss) earnings
$
(0.48)
$
0.94
Diluted
Net (loss) earnings
$
(0.48)
$
0.93
Catalent, Inc.
Consolidated Statements of
Operations
(Unaudited; dollars and shares
in millions, except per share data)
Fiscal Year Ended
June 30,
FX impact
Constant Currency Increase
(Decrease)
2023
2022
Change $
Change %
Net revenue
$
4,276
$
4,802
$
(108)
$
(418)
(9) %
Cost of sales
3,216
3,188
(79)
107
3 %
Gross margin
1,060
1,614
(29)
(525)
(33) %
Selling, general and administrative
expenses
831
844
(12)
(1)
— %
Gain on sale of subsidiary
—
(1)
—
1
*
Goodwill impairment charges
210
—
—
210
*
Other operating expense, net
156
41
2
113
277 %
Operating (loss) earnings
(137)
730
(19)
(848)
(116) %
Interest expense, net
184
123
(3)
64
51 %
Other (income) expense, net
(6)
28
(8)
(26)
(93) %
(Loss) earnings before taxes
(315)
579
(8)
(886)
(153) %
Income tax (benefit) expense
(83)
80
(5)
(158)
(197) %
Net (loss) earnings
$
(232)
$
499
$
(3)
$
(728)
(146) %
Less: Net earnings attributable to
preferred shareholders
—
(16)
Net (loss) earnings attributable to common
shareholders
$
(232)
$
483
Weighted average shares outstanding -
basic
181
176
Weighted average shares outstanding -
diluted
181
178
Earnings per share:
Basic
Net (loss) earnings
$
(1.29)
$
2.74
Diluted
Net (loss) earnings
$
(1.29)
$
2.73
Catalent, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited; dollars in
millions)
June 30, 2023
June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
280
$
449
Trade receivables, net
977
1,051
Inventories
764
702
Prepaid expenses and other
658
626
Marketable securities
—
89
Total current assets
2,679
2,917
Property, plant, and equipment, net
3,699
3,127
Other non-current assets, including
intangible assets
4,404
4,464
Total assets
$
10,782
$
10,508
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term obligations
and other short-term borrowings
$
536
$
31
Accounts payable
427
421
Other accrued liabilities
544
646
Total current liabilities
1,507
1,098
Long-term obligations, less current
portion
4,313
4,171
Other non-current liabilities
327
464
Total shareholders' equity
4,635
4,775
Total liabilities and shareholders'
equity
$
10,782
$
10,508
Catalent, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited; dollars in
millions)
Fiscal Year Ended
June 30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash provided by operating
activities
$
261
$
439
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of property, equipment, and
other productive assets
(583)
(660)
Proceeds from maturity (purchases) of
marketable securities
89
(20)
Proceeds from sale of property and
equipment
8
—
Settlement on sale of subsidiaries,
net
—
(3)
Payment for acquisitions, net of cash
acquired
(474)
(1,199)
Payments for investments
(2)
(2)
Net cash used in investing activities
(962)
(1,884)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from borrowing
715
1,100
Payments related to long-term
obligations
(230)
(78)
Financing fees paid
(4)
(15)
Dividends paid
—
(4)
Cash paid, in lieu of equity, for tax
withholding obligations
—
(10)
Exercise of stock options
4
26
Other financing activities
36
12
Net cash provided by financing
activities
521
1,031
Effect of foreign currency exchange on
cash and cash equivalents
11
(33)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(169)
(447)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
449
896
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
280
$
449
Catalent, Inc.
Reconciliation of Net Earnings
(Loss) to EBITDA from Operations and Adjusted EBITDA*
(Unaudited; dollars in
millions)
Three months ended
June 30, 2022(1)
September 30,
2022
December 31, 2022
March 31, 2023
June 30, 2023
Net earnings (loss)
$
168
$
—
$
81
$
(227)
$
(86)
Interest expense, net
32
32
47
51
54
Income tax expense (benefit)
17
3
33
(55)
(64)
Depreciation and amortization
100
99
103
106
114
EBITDA (loss) from operations
317
134
264
(125)
18
Goodwill impairment charges
—
—
—
210
—
Stock-based compensation
12
19
10
6
—
Impairment charges and gain/loss on sale
of assets
10
(2)
1
6
85
Restructuring costs
5
4
23
9
30
Acquisition, integration, and other
special items
8
5
9
8
9
Foreign exchange (gain) loss
6
27
(26)
(8)
(4)
Other adjustments
—
—
2
(1)
1
Adjusted EBITDA
$
358
$
187
$
283
$
105
$
139
Favorable (unfavorable) FX impact
—
Adjusted EBITDA at constant currency
$
139
* Refer to Catalent's description of
non-GAAP measures, including EBITDA from operations and Adjusted
EBITDA as referenced above.
(1) Balances reflect correction of
prior-period error.
Catalent, Inc.
Reconciliation of Net Earnings
to Adjusted Net Income*
(Unaudited; dollars in
millions, except per share data)
Three months ended
June 30, 2022(9)
September 30, 2022
December 31, 2022
March 31, 2023
June 30, 2023
Net earnings (loss)
$
168
$
—
$
81
$
(227)
$
(86)
Amortization (1)
33
33
34
34
35
Goodwill impairment charges (2)
—
—
—
210
—
Stock-based compensation
12
19
10
6
—
Impairment charges and gain/loss on sale
of assets (3)
10
(2)
1
6
85
Restructuring costs (4)
5
4
23
9
30
Acquisition, integration, and other
special items (5)
8
5
9
8
9
Foreign exchange loss (gain)
6
27
(26)
(8)
(4)
Other adjustments
(1)
—
2
—
—
Estimated tax effect of adjustments
(6)
(18)
(19)
(12)
(12)
(81)
Discrete income tax benefit items (7)
(28)
(6)
—
(43)
28
Adjusted net income (loss) (ANI)
$
195
$
61
$
122
$
(17)
$
16
Weighted average shares outstanding -
basic
180
181
Weighted average shares outstanding -
diluted
181
182
Earnings per share:
Net earnings (loss) per share - basic
$
0.94
$
(0.48)
Net earnings (loss) per share -
diluted
$
0.93
$
(0.48)
ANI per share:
ANI per share - basic
$
1.09
$
0.09
ANI per share - diluted (8)
$
1.08
$
0.09
* Refer to Catalent's description of
non-GAAP measures, including Adjusted Net Income as referenced
above.
(1) Represents the amortization
attributable to purchase accounting for previously completed
business combinations.
(2) Goodwill impairment charges during the
three months ended March 31, 2023 were associated with the
Company's Consumer Health reporting unit.
(3) For the three months ended June 30,
2023, represents fixed asset impairment charges primarily
associated with an idle facility in the Biologics segment and
obsolete equipment that could not be sold or repurposed in the
Pharma and Consumer Health segment. For the three months ended June
30, 2022, represents fixed asset impairment charges primarily
associated with obsolete equipment in the Biologics segment.
(4) Restructuring costs during the three
months ended March 31, 2023 and December 31, 2022 represent
restructuring charges associated with Catalent's plans to reduce
costs, consolidate facilities, and optimize its infrastructure
across the organization.
(5) Acquisition, integration and other
special items during the three months ended December 31, 2022
include costs associated with its October 2022 acquisition of
Metrics Contract Services.
(6) The tax effect of adjustments to
Adjusted Net (Loss) Income is computed by applying the statutory
tax rate in the jurisdictions to the income or expense items that
are adjusted in the period presented; if a valuation allowance
exists, the rate applied is zero.
(7) Discrete period income tax expense
items are unusual or infrequently occurring items, primarily
including: changes in judgment related to the realizability of
deferred tax assets in future years, changes in measurement of a
prior-year tax position, deferred tax impact of changes in tax law,
and purchase accounting.
(8) For the three months ended June 30,
2023 and 2022, represents Adjusted Net (Loss) Income divided by the
weighted average sum of fully diluted shares outstanding, which is
equal to (a) the number of shares of common stock outstanding, plus
(b) the number of shares of its common stock that would be issued
assuming exercise or vesting of all potentially dilutive
instruments. For the three months ended June 30, 2023 and 2022, the
weighted average number of shares was 182 million and 181 million,
respectively.
(9) Balances reflect correction of
prior-period error.
Catalent, Inc.
Reconciliation of Segment
EBITDA to Net (Loss) Earnings
(Unaudited; dollars in
millions, except per share data)
Three Months Ended
June 30,
Fiscal Year Ended
June 30,
2023
2022
2023
2022
Biologics Segment EBITDA
$
(12)
$
194
$
287
$
777
Pharma and Consumer Health Segment
EBITDA
187
198
555
589
Sub-Total
$
175
$
392
$
842
$
1,366
Reconciling items to net earnings
Unallocated costs (1)
(157)
(75)
(551)
(286)
Depreciation and amortization
(114)
(100)
(422)
(378)
Interest expense, net
(54)
(32)
(184)
(123)
Income tax expense
64
(17)
83
(80)
Net (loss) earnings
$
(86)
$
168
$
(232)
$
499
(1) Unallocated costs include
restructuring and special items, stock-based compensation,
impairment charges, gain/loss on sale of subsidiary, certain other
corporate directed costs, and other costs that are not allocated to
the segments.
Catalent, Inc.
Calculation of Net Leverage
Ratio
(Unaudited; dollars in
millions)
June 30, 2022(1)
September 30, 2022(1)
December 31, 2022(1)
March 31, 2023(1)
June 30, 2023
Incremental Term Loan, due 2028
$
1,433
$
1,429
$
1,426
$
1,422
$
1,418
Revolving credit facility
—
75
600
550
500
Unamortized discount and debt issuance
costs
(9)
(7)
(13)
(12)
(11)
Total Secured Debt
1,424
1,497
2,013
1,960
1,907
Senior Notes, due 2027, 5.000%
500
500
500
500
500
Senior Notes, due 2028 (EUR), 2.375%
874
794
879
895
904
Senior Notes, due 2029, 3.125%
550
550
550
550
550
Senior Notes due 2030, 3.500%
650
650
650
650
650
Finance Leases / Other
234
245
291
323
366
Unamortized discount and debt issuance
costs
(30)
(32)
(30)
(29)
(28)
Total Unsecured Debt
2,778
2,707
2,840
2,889
2,942
Total Debt
4,202
4,204
4,853
4,849
4,849
Cash and Cash Equivalents
449
281
442
252
280
Marketable Securities
89
64
28
—
—
Total Net Debt
$
3,664
$
3,859
$
4,383
$
4,597
$
4,569
Adjusted EBITDA
Q1 2022
252
Q2 2022
310
310
Q3 2022
339
339
339
Q4 2022
358
358
358
358
Q1 2023
187
187
187
187
Q2 2023
283
283
283
Q3 2023
105
105
Q4 2023
139
LTM Adjusted EBITDA
$
1,259
$
1,194
$
1,167
$
933
$
714
Net First Lien Debt / LTM Adj. EBITDA
(2)
0.9x
1.2x
1.6x
2.2x
2.8x
Net Debt / LTM Adj. EBITDA
2.9x
3.2x
3.8x
4.9x
6.4x
(1) Balances reflect correction of
prior-period error.
(2) Net First Lien Debt ratio represents
gross secured debt and finance leases/other outstanding, less cash
and cash equivalents and marketable securities, divided by LTM
Adjusted EBITDA.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230829687407/en/
Investor: Catalent, Inc. Paul Surdez 732-537-6325
investors@catalent.com
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