HERTFORDSHIRE, England and PITTSBURGH, Aug. 6, 2015 /PRNewswire/ -- Mylan N.V. (Nasdaq: MYL) today announced its financial results for the quarter ended June 30, 2015.
Second Quarter 2015 Highlights
- Total revenues of $2.37 billion, up 36% on a constant currency basis versus the prior year period. Excluding the impact of the acquisition of Abbott’s non-U.S. developed markets specialty and branded generics business (“EPD Business”), total revenues increased 14% on a constant currency basis, reflecting continued strength in the legacy business. Foreign currency exchange rates unfavorably impacted revenues in Q2 by $127 million.
- Generics segment third party net sales of $2.06 billion, up 43% on a constant currency basis, with positive growth across all regions inclusive of the impact of the EPD Business. Excluding the EPD Business, Generics segment third party net sales increased 16% on a constant currency basis.
- Specialty segment third party net sales of $301.9 million, up 5%
- Adjusted gross profit of $1.28 billion, up 39%; GAAP gross profit of $1.01 billion, up 25%
- Adjusted gross margin of 54%, up 400 basis points; GAAP gross margin of 43%, down 150 basis points
- Adjusted diluted earnings per ordinary share (“EPS”) of $0.91, up 32%; GAAP diluted EPS of $0.32, flat with the prior year period
Mylan CEO Heather Bresch commented, “Our exceptional second quarter results continue to underscore the underlying strength and diversity of our base business and our relentless focus on execution, even in the face of ongoing regulatory delays as well as external activity. Given the strength and momentum, as well as our outlook, for our business, we are raising our 2015 adjusted diluted EPS guidance range to $4.15 to $4.35, an increase of 19%, or 23% on a constant currency basis. Our guidance now excludes any contribution from generic Copaxone® and continues to include potential generic competition on EpiPen® Auto-Injector in the second half of the year. In addition, we see the potential for opportunities on the horizon and will provide any updates as appropriate.
“We remain steadfast in our commitment to acquire Perrigo, and we have now executed an amendment with the majority of our bridge credit facility lenders that gives us full discretion to lower the acceptance condition from 80% to greater than 50% of Perrigo ordinary shares. We look forward to the next step in the process to make our combination with Perrigo a reality, the vote by Mylan shareholders to support this transaction. Together, we will deliver to both the Mylan and Perrigo shareholders a one-of-a-kind global healthcare company with complementary businesses, unmatched scale in its operations, one of the industry’s broadest and most diversified portfolios, immense reach across distribution channels and a unique platform with the size and scale that allows us to continue to be a leading consolidator in our industry.”
Mylan CFO John Sheehan added, “Mylan’s outstanding second quarter results demonstrate double digit growth in our legacy business as well as enhanced double digit growth with the addition of the EPD Business. As of the end of the second quarter, our debt to adjusted EBITDA leverage was just 2.2 times. Mylan continues to have ample borrowing capacity and financial firepower to execute on compelling strategic endeavors while maintaining our commitment to an investment grade credit rating.”
Total Revenue
Three Months Ended | |||||||||
June 30, | |||||||||
(Unaudited; in millions) | 2015 | 2014 | Percent Change | ||||||
Total Revenues | $ | 2,371.7 | $ | 1,837.3 | 29% | ||||
Generics Third Party Net Sales | 2,055.1 | 1,528.5 | 34% | ||||||
North America | 937.4 | 736.6 | 27% | ||||||
Europe | 571.0 | 395.9 | 44% | ||||||
Rest of World | 546.7 | 396.0 | 38% | ||||||
Specialty Third Party Net Sales | 301.9 | 287.8 | 5% | ||||||
Other Revenue | 14.7 | 21.0 | (30)% | ||||||
Generics Segment Revenue
Genericssegment third party net sales were $2.06 billion for the quarter, an increase of 34% when compared to the prior year period. When translating third party net sales for the current quarter at prior year comparative period exchange rates (“constant currency”), third party net sales increased by 43%.
- Third party net sales from North America were $937.4 million for the quarter, an increase of 27% 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 acquisition of the EPD Business of approximately $41 million, as well as a favorable mix of volume 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 $571.0 million for the quarter, an increase of 44% when compared to the prior year period. Constant currency third party net sales increased by 62%. This increase was primarily driven by net sales from the acquisition of the EPD Business of approximately $251 million, and to a lesser extent, net sales from new products. Further contributing to this increase were higher volumes on existing products, primarily in Italy and France, which were offset by pricing pressure throughout Europe.
- Third party net sales from Rest of World were $546.7 million for the quarter, an increase of 38% when compared to the prior year period. Constant currency third party net sales increased by 51%. This increase was primarily driven by net sales from the acquisition of the EPD Business of approximately $110 million, new product launches in Australia and Japan and higher sales volumes in India, predominately from growth in our anti-retroviral (“ARV”) franchise.
Specialty Segment Revenue
Specialtysegment reported third party net sales of $301.9 million for the quarter, an increase of 5% when compared to the prior year period. This increase was primarily due to growth across the segment, including higher volumes of the EpiPen® Auto-Injector.
Total Gross Profit
Adjusted gross profit was $1.28 billion and adjusted gross margins were 54% for the quarter as compared to adjusted gross profit of $923.4 million and adjusted gross margins of 50% in the comparable prior year period. The current quarter increase was primarily due to net sales from the acquisition of the EPD Business and net sales from new products. GAAP gross profit for the quarter was $1.01 billion and GAAP gross margins were 43% as compared to GAAP gross profit of $808.8 million and GAAP gross margins of 44% in the comparable prior year period.
Total Profitability
Adjusted earnings from operations for the quarter were $610.8 million, up 49% from the comparable prior year period. R&D expense increased due to the impact of the acquisition of the EPD Business as well as the continued investment in our respiratory, insulin and biologics growth programs. SG&A expense increased from the prior year period as a result of the impact of the acquisition of the EPD Business as well as investments in infrastructure to support the growth of the company. GAAP earnings from operations were $276.6 million for the quarter, an increase of 22% from the comparable prior year period.
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 $558.3 million for the quarter and $371.8 million for the comparable prior year quarter. After adjusting for certain items as further detailed in the reconciliation below, adjusted EBITDA was $693.5 million for the quarter and $488.1 million for the comparable prior year period. Adjusted net earnings attributable to Mylan N.V. increased by $201.0 million to $474.3 million compared to $273.3 million for the prior year comparable period. Adjusted diluted EPS increased 32% to $0.91 compared to $0.69 in the prior year comparable period. GAAP net earningsattributable to Mylan N.V. increased by $42.6 million to $167.8 million as compared to $125.2 million for the prior year comparable period. GAAP diluted EPS remained flat at $0.32 when compared to the prior year comparable period due to the impact of ordinary shares issued in the acquisition of the EPD Business.
Cash Flow
Adjusted cash provided by operating activities was $490 million for the six months ended June 30, 2015 compared to $559 million for the comparable prior year period. On a GAAP basis, netcash provided by operating activities was $382 million for the six months ended June 30, 2015 compared to $448 million for the comparable prior year period. The decrease in net cash provided by operating activities was the result of the timing of customer remittances due to changes in contract terms in new agreements entered into in the current year. We expect the impact of this change to be mitigated in the third quarter. Capital expenditures were approximately $122 million for the six months ended June 30, 2015 as compared to approximately $153 million for the six months ended June 30, 2014. Adjusted free cash flow was $368 million for the six months ended June 30, 2015 compared to $411 million in the prior year period.
Full Year 2015 Financial Guidance
Mylan is increasing its 2015 adjusted diluted EPS guidance range to $4.15 to $4.35, an increase of 19% versus 2014, or 23% on a constant currency basis, using the midpoint of the updated guidance compared with the prior year. This range is up from previous guidance of $4.00 to $4.30 issued during Mylan’s Q4 2014 earnings on March 2, 2015.
Conference Call
Mylan will host a conference call and live webcast, today, August 6, 2015, at 10:00 am ET, in conjunction with the release of its financial results. 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 to begin to register and download or install any necessary software. A replay of the webcast will be available at www.mylan.com for a limited time.
Non-GAAP Financial Measures
This press release includes the presentation and discussion of certain financial information that differs from what is reported under accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures, including, but not limited to, adjusted diluted EPS, adjusted cash provided by operating activities, adjusted gross profit, adjusted gross margins, adjusted earnings from operations, adjusted net earnings attributable to Mylan N.V. (the “Company”), constant currency total revenue, constant currency third party net sales, EBITDA, adjusted EBITDA, debt to adjusted EBITDA leverage, and adjusted free cash flow, are presented in order to supplement investors’ and other readers’ understanding and assessment of the Company’s financial performance.
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