HERTFORDSHIRE, England and PITTSBURGH, May 10, 2017 /PRNewswire/ -- Mylan N.V. (NASDAQ, TASE: MYL) today announced its financial results for the quarter ended March 31, 2017.
Financial Highlights
- Total revenues of $2.72 billion, up 24% compared to the prior year period
- North America segment third party net sales of $1.21 billion, up 5%; and up approximately 20% excluding the impact of EpiPen® Auto-Injector, which was anticipated
- Europe segment third party net sales of $892.0 million, up 53%
- Rest of World segment third party net sales of $580.5 million, up 34%
- U.S. GAAP diluted earnings per ordinary share (“U.S. GAAP EPS”) of $0.12, up 300% compared to U.S. GAAP EPS of $0.03 in the prior year period
- Adjusted diluted earnings per ordinary share (“adjusted EPS”) of $0.93, up 22% compared to $0.76 in the prior year period
- U.S. GAAP cash provided by operating activities of $452.9 million, up 463% compared to $80.5 million in the prior year period
- Mylan is not providing forward looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information.
Mylan CEO Heather Bresch commented, “Mylan’s results during the first quarter marked a great start to what we believe will be another year of strong financial performance, and continue to reflect the strength and diversity of our global business and demonstrate our resilience and ability to absorb both our industry’s natural volatility, as well as additional headwinds, related to particular products and/or markets. We delivered year-over-year revenue growth of 24%, adjusted EPS growth of 22%, and expanded segment profitability in all three segments. These results are a true reflection of all of the great assets we have integrated, with significant contributions from acquisitions completed last year, as well as from new product launches across our business. We remain confident in our guidance and our business outlook for the full year 2017, including our adjusted EPS guidance range.”
Mylan President Rajiv Malik said, “We continued to benefit from the successful execution of the integration of our global platform, with strong double-digit revenue growth in Europe and Rest of World and a solid performance in North America. We also continue to execute on our key pipeline programs, as outlined during our March investor day. Our overall expectations for the global pricing environment are unchanged and we are still predicting mid-single digit price erosion globally for the year.”
Mylan CFO Ken Parks added, “We are pleased with our strong operating cash flow generation in the quarter, and we remain committed to deleveraging in 2017. With our financial flexibility, we continue to execute on our business plan, including business development activities, while maintaining our commitment to an investment grade credit rating.”
Total Revenues
Three Months Ended | |||||||||
March 31, | |||||||||
(Unaudited; in millions) | 2017 | 2016 | Percent | ||||||
Total Revenues | $ | 2,719.5 | $ | 2,191.3 | 24% | ||||
North America (1) | 1,214.9 | 1,157.5 | 5% | ||||||
Europe (1) | 892.0 | 584.3 | 53% | ||||||
Rest of World (1) | 580.5 | 434.3 | 34% | ||||||
Other Revenues | 32.1 | 15.2 | 111% | ||||||
(1) | As previously reported, effective October 1, 2016, we expanded our reportable segments as follows: North America, Europe and Rest of |
First Quarter 2017 Financial Results
Total Revenues
Total revenues were $2.72 billion in the first quarter of 2017, compared to $2.19 billion in the prior year period. Third party net sales for the current quarter were $2.69 billion compared to $2.18 billion for the prior year period, representing an increase of $511.3 million, or 23%. In the first quarter of 2017, net sales from the acquisitions of Meda AB (publ) (“Meda”) and the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, LLC (the “Topicals Business”) contributed approximately $606.6 million. These increases were partially offset by a net decrease in net sales from new products and existing products of approximately $85.8 million. The decrease from existing products was due to a combination of lower pricing and volumes in the current quarter. Other third party revenues for the current quarter were $32.1 million compared to $15.2 million in the prior year period, an increase of $16.9 million primarily as a result of an increase in royalty income, including the impact of the acquired businesses. The unfavorable impact of foreign currency translation on current quarter revenues was approximately $10 million or less than 1%. Below is a summary of third party net sales in each of our segments for the three months ended March 31, 2017:
Third party net sales from North America were $1.21 billion for the quarter, an increase of 5% when compared to the prior year period. This increase was principally due to net sales from the acquisitions of Meda and the Topicals Business which totaled approximately $182.1 million. Partially offsetting this increase was a net decrease in net sales from new products and lower volume and pricing on existing products. In addition, sales of the EpiPen® Auto-Injector declined in the current quarter as a result of increased competition and the impact of the launch of the authorized generic. The impact of foreign currency translation was less than 1% within North America.
Third party net sales from Europe were $892.0 million for the quarter, an increase of 53% when compared to the prior year period. This increase was primarily the result of net sales from the acquisition of Meda which totaled approximately $337.8 million. This increase was partially offset by a net decrease in net sales from new products and lower volume and pricing on existing products. The unfavorable impact of foreign currency translation on current period third party net sales was approximately $24 million, or 4% within Europe.
- Third party net sales from Rest of World were $580.5 million for the quarter, an increase of 34% when compared to the prior year period. This increase was primarily due to net sales from the acquisition of Meda which totaled approximately $86.7 million. In addition, net sales from existing products increased principally as a result of higher sales from our anti-retroviral franchise. Throughout the segment, sales from new products and higher volumes on existing products more than offset lower pricing. The favorable impact of foreign currency translation on current period third party net sales was approximately $13 million, or 3% within Rest of World.
Total Gross Profit
Gross profit was $1.09 billion and $907.0 million for the first quarter of 2017 and 2016, respectively. Gross margins were 40% and 41% in the first quarter of 2017 and 2016, respectively. Gross margins were negatively impacted in the current quarter due to increased amortization expense as a result of the acquisitions of Meda and the Topicals Business, lower gross profit from the sales of existing products in North America, including the EpiPen® Auto-Injector, partially offset by the contributions from the acquired businesses noted above. Adjusted gross profit was $1.45 billion and adjusted gross margins were 53% for the first quarter of 2017 compared to adjusted gross profit of $1.18 billion and adjusted gross margins of 54% in the prior year period. Adjusted gross margins were negatively impacted in the current quarter as a result of lower gross profit from the sales of existing products in North America, including the EpiPen® Auto-Injector, partially offset by the contributions from the acquired businesses.
Total Profitability
Earnings from operations increased $121.6 million from the comparable prior year period primarily due to the increase in gross profit, partially offset by higher SG&A expense related to the acquired businesses.
R&D expense decreased from the comparable prior year period due to lower expenditures principally related to the Company’s respiratory and biologics programs due to the timing of clinical activities when compared to the prior year period. Partially offsetting these decreases was the additional R&D expense due to the impact of acquisitions. SG&A expense increased from the comparable prior year period primarily due to the additional expense related to the acquired businesses, partially offset by lower acquisition related costs, including consulting and legal costs.
U.S. GAAP net earnings increased by $52.5 million to $66.4 million for the three months ended March 31, 2017, compared to $13.9 million for the prior year period. First quarter 2017 U.S. GAAP net earnings were positively impacted by the increase in earnings from operations. Partially offsetting this increase were higher non-operating expenses including interest expense in the current quarter. U.S. GAAP EPS increased from $0.03 to $0.12 in the current quarter. Adjusted net earnings increased by $113.5 million to $499.8 million compared to $386.3 million for the prior year period. Adjusted EPS increased 22% to $0.93 compared to $0.76 in the prior year period.
EBITDA, which is defined as net earnings (excluding the losses from equity method investees) plus income taxes, interest expense, depreciation and amortization, was $658.5 million for the quarter ended March 31, 2017 and $417.3 million for the comparable prior year quarter. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $812.7 million for the quarter ended March 31, 2017 and $583.7 million for the comparable prior year quarter.
Cash Flow
Net cash provided by operating activities was $452.9 million for the three months ended March 31, 2017 compared to $80.5 million for the prior year period. Capital expenditures were approximately $58.4 million for the three months ended March 31, 2017 compared to approximately $51.8 million for the comparable prior year. Adjusted cash provided by operating activities was $536.0 million for the three months ended March 31, 2017 compared to $202.0 million for the prior year period. Adjusted free cash flow, defined as adjusted cash provided by operating activities less capital expenditures, was $477.6 million for the three months ended March 31, 2017, compared to $150.2 million in the prior year.
Conference Call
Mylan N.V. will host a conference call and live webcast, today at 10:00 a.m. ET, to review the company’s financial results for the first quarter ended March 31, 2017. The dial-in number to access the call is 800.514.4861 or 678.809.2405 for international callers. To access the live webcast, please log onto Mylan’s website (www.mylan.com) at least 15 minutes before the event is scheduled to begin to register and download or install any necessary software. A replay of the webcast will be available will be available at www.mylan.com/investors, for a limited time.
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