Mylan Full Year Adjusted Diluted EPS Up 21% To $4.30

HERTFORDSHIRE, England and PITTSBURGH, Feb. 10, 2016 /PRNewswire/ -- Mylan N.V. (NASDAQ, TASE: MYL) today announced its financial results for the quarter and year ended December 31, 2015.

Financial Highlights

• Full year adjusted total revenues of $9.45 billion, up 28% on a constant currency basis versus the prior year; GAAP total revenues of $9.43 billion. Excluding the impact of the acquisition of Abbott Laboratories' non-U.S. developed markets specialty and branded generics business (the "EPD Business"), full year adjusted total revenues increased 9% on a constant currency basis.
  • Generics segment adjusted third party net sales of $8.17 billion, up 33% on a constant currency basis. GAAP Generics segment third party net sales of $8.16 billion. Excluding the EPD Business, Generics segment adjusted third party net sales increased 11% on a constant currency basis. Both including and excluding the EPD Business, all regions in the Generics segment showed positive full year growth.
  • Specialty segment third party net sales of $1.20 billion, up 1%
• Full year adjusted diluted EPS of $4.30, up 21% and at the high end of our previously communicated guidance range; GAAP diluted EPS of $1.70, down 27%
• Full year adjusted cash provided by operating activities of $2.22 billion, up 83%; GAAP net cash provided by operating activities of $2.01 billion, up 98%
• Full year adjusted free cash flow of $1.85 billion, up 107%
• 2016 total revenues guidance of $10.5 billion to $11.5 billion, with or without Meda, the midpoint of which represents an increase of 16% versus 2015; 2016 adjusted diluted EPS guidance range of $4.85 to $5.15, with or without Meda, the midpoint of which represents an increase of 16% versus 2015

Mylan CEO Heather Bresch commented, "Our exceptional 2015 results were highlighted by year-over-year constant currency adjusted total revenues growth of 28% and adjusted diluted EPS growth of 21%. This strong performance is again a testament to the strength and diversity of our global platform and our unwavering focus on execution. In addition to our solid financial performance, with growth across all of our segments and regions, we also closed and integrated two key acquisitions in 2015, the EPD Business and certain female healthcare businesses from Famy Care Limited, all while continuing to make meaningful progress against our strategic growth drivers. For instance, we submitted our Abbreviated New Drug Application (ANDA) for generic Advair® to the U.S. Food and Drug Administration (FDA), and we advanced many of our Biocon-partnered biosimilars/insulin programs, as well as recently announced our worldwide collaboration with Momenta to jointly develop and commercialize up to six biosimilar products, positioning us as a worldwide leader in this exciting area.

"We are off to a great start in 2016. We anticipate year-over-year total revenues growing 16% and adjusted diluted EPS growing 16%, and we are excited about our announcement today of our offer to acquire Meda. We have assumed the closing of Meda by the end of the third quarter, and we have incorporated one quarter of Meda in our 2016 guidance. However, we are committed to our 2016 guidance ranges with or without Meda. Looking ahead, the Meda transaction creates the opportunity to accelerate achievement of our $6.00 adjusted diluted EPS target to 2017 versus 2018⁽¹⁾."

Mylan CFO John Sheehan added, "Mylan's exceptional 2015 results reflect strong growth in our legacy business, enhanced by the addition of the EPD Business, demonstrating our ability to drive organic growth as well as execute on value-enhancing transactions. We also had a record year with respect to cash, as our adjusted free cash flow in 2015 grew an outstanding 107% to $1.85 billion. As we enter 2016, we have the most financial flexibility that we have ever had in our history. With full access to our balance sheet cash in excess of $1.2 billion, and net debt to adjusted EBITDA of less than 2.0 times at year end, we have the opportunity to continue to invest for growth, both organically and inorganically."

Adjusted Total Revenues

*For the three months ended December 31, 2015 and 2014, GAAP total revenues, GAAP Generics segment third party net sales and GAAP third party net sales from Europe were the same as the corresponding adjusted measures above. For the year ended December 31, 2015, GAAP total revenues were $9,429.3 million, GAAP Generics segment third party net sales were $8,157.8 million and GAAP third party net sales from Europe were $2,205.6 million. For the year ended December 31, 2014, GAAP total revenues, GAAP Generics segment third party net sales and GAAP third party net sales from Europe were the same as the corresponding adjusted measures above. Refer to the non-GAAP reconciliations for reconciliations of adjusted third party net sales from Europe, Generics segment adjusted third party net sales and adjusted total revenues to the most directly comparable GAAP financial measures.

Fourth Quarter 2015 Financial Results

Generics Segment Revenues

Genericssegment third party net sales were $2.22 billion for the quarter, an increase of 22% when compared to the prior year period. When translating adjusted third party net sales for the current quarter at prior year comparative period exchange rates ("constant currency"), adjusted third party net sales increased by 27%.

• Third party net sales from North America were $1.03 billion for the quarter, an increase of 3% when compared to the prior year period. This increase was primarily driven by net sales from new products, and to a lesser extent, net sales from the acquired EPD Business of approximately $47 million. During the fourth quarter of 2014, North America benefited from market disruption with respect to certain products. Factors offsetting this increase were lower volumes and pricing on existing products. The effect of foreign currency translation on third party net sales was insignificant in North America.
• Third party net sales from Europe were $616.4 million for the quarter, an increase of 65% when compared to the prior year period. This increase was primarily driven by net sales from the acquired EPD Business of approximately $286 million, and to a lesser extent, net sales from new products. Factors offsetting this increase were slightly lower volumes on existing products and lower pricing throughout Europe. Constant currency third party net sales increased by 77%.
• Third party net sales from Rest of World were $570.5 million for the quarter, an increase of 29% when compared to the prior year period. This increase was primarily driven by net sales from the acquired EPD Business of approximately $123 million, new product launches in Japan and Australia and higher third party net sales volumes in India, predominately from growth in our anti-retroviral franchise. These increases were partially offset by lower pricing throughout this region. Constant currency third party net sales increased by 39%.

Specialty Segment Revenues

Specialtysegment reported third party net sales were $254.1 million for the quarter, an increase of 5% when compared to the prior year period. This increase was primarily due to higher net sales of the EpiPen® Auto-Injector due to higher volumes, but with the same net payor pricing dynamics that existed throughout 2015.

Total Gross Profit

Adjusted gross profit was $1.40 billion and adjusted gross margins were 56% for the quarter as compared to adjusted gross profit of $1.12 billion and adjusted gross margins of 54% in the comparable prior year period. The current quarter increase was primarily due to net sales from the acquired EPD Business and new product introductions, partially offset by pricing reductions. GAAP gross profit was $1.06 billion and $969.0 million for the fourth quarter of 2015 and 2014, respectively. GAAP gross margins were 43% and 47% in the fourth quarter of 2015 and 2014, respectively.

Total Profitability

Adjusted earnings from operations for the quarter were $746.6 million, up 23% from the comparable prior year period. GAAP earnings from operations were $423.9 million for the quarter, an increase of 8% from the comparable prior year period. GAAPR&D expense and GAAP SG&A expense increased due to the impact of the acquired EPD Business.

EBITDA, which is defined as net earnings (excluding the non-controlling interest and losses from equity method investees) plus income taxes, interest expense, depreciation and amortization, was $657.5 million for the quarter and $548.8 million for the comparable prior year quarter. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $827.2 million for the quarter and $682.1 million for the comparable prior year period. Adjusted net earnings attributable to Mylan N.V. increased by $200.4 million to $620.2 million compared to $419.8 million for the prior year comparable period. Adjusted diluted EPS increased 16% to $1.22 compared to $1.05 in the prior year comparable period.

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