Mallinckrodt plc

05/03/2022 | Press release | Distributed by Public on 05/03/2022 14:41

First Quarter Financial Results - Form 8-K



MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended
April 1,
2022 		Percent of
Net sales 		March 26,
2021 		Percent of
Net sales
Net sales
$ 490.9 100.0 % $ 558.0 100.0 %
Cost of sales 315.2 64.2 307.6 55.1
Gross profit 175.7 35.8 250.4 44.9
Selling, general and administrative expenses 152.5 31.1 136.0 24.4
Research and development expenses 37.2 7.6 66.2 11.9
Restructuring charges, net 6.8 1.4 0.4 0.1
Non-restructuring impairment charges - - 64.5 11.6
Losses on divestiture - - 0.8 0.1
Operating loss (20.8) (4.2) (17.5) (3.1)
Interest expense (58.2) (11.9) (59.6) (10.7)
Interest income 0.4 0.1 1.9 0.3
Other (expense) income, net (4.1) (0.8) 8.1 1.5
Reorganization items, net (43.4) (8.8) (93.5) (16.8)
Loss from continuing operations before income taxes (126.1) (25.7) (160.6) (28.8)
Income tax benefit (5.9) (1.2) (16.4) (2.9)
Loss from continuing operations (120.2) (24.5) (144.2) (25.8)
Income from discontinued operations, net of income taxes 0.6 0.1 0.3 0.1
Net loss $ (119.6) (24.4) % $ (143.9) (25.8) %
Basic loss per share:
Loss from continuing operations $ (1.42) $ (1.70)
Income from discontinued operations 0.01 -
Net loss $ (1.41) $ (1.70)
Diluted loss per share:
Loss from continuing operations $ (1.42) $ (1.70)
Income from discontinued operations 0.01 -
Net loss $ (1.41) $ (1.70)
Weighted-average number of shares outstanding
Basic 84.7 84.6
Diluted 84.7 84.6

1

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONSOLIDATED ADJUSTED EBITDA
(unaudited, in millions)
Three Months Ended
April 1, 2022 March 26, 2021
Gross Profit SG&A R&D Adjusted EBITDA Gross Profit SG&A R&D Adjusted EBITDA
Net loss $ 175.7 $ 152.5 $ 37.2 $ (119.6) $ 250.4 $ 136.0 $ 66.2 $ (143.9)
Adjustments:
Interest expense, net - - - 57.8 - - - 57.7
Income taxes - - - (5.9) - - - (16.4)
Depreciation 18.1 (3.1) (0.9) 22.1 17.9 (4.8) (1.6) 24.3
Amortization 154.2 (0.9) - 155.1 144.4 (0.9) - 145.3
Restructuring charges, net - - - 6.8 - - - 0.4
Non-restructuring impairment charge - - - - - - - 64.5
Income from discontinued operations - - - (0.6) - - - (0.3)
Change in contingent consideration fair value - 0.1 - (0.1) - 10.8 - (10.8)
Significant legal and environmental charges - (11.1) - 11.1 - - - -
Losses on divestiture - - - - - - - 0.8
Separation costs (1)
- (2.0) - 2.0 - (0.6) - 0.6
Unrealized loss (gain) on equity investment - - - 3.7 - - - (6.9)
Reorganization items, net - - - 43.4 - - - 93.5
Share-based compensation 0.1 (1.0) (0.1) 1.2 0.2 (2.8) (0.6) 3.6
As adjusted: $ 348.1 $ 134.5 $ 36.2 $ 177.0 $ 412.9 $ 137.7 $ 64.0 $ 212.4
(1) Represents costs included in selling, general and administrative (SG&A) expenses, primarily related to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence.

2

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT OPERATING INCOME
(unaudited, in millions)
Three Months Ended
April 1,
2022 		March 26,
2021
Specialty Brands $ 164.8 $ 212.1
Specialty Generics 34.4 31.7
Segment operating income 199.2 243.8
Unallocated amounts:
Corporate and unallocated expenses (1)
(32.8) (22.6)
Depreciation and amortization (177.2) (169.6)
Share-based compensation (1.2) (3.6)
Restructuring charges, net (6.8) (0.4)
Non-restructuring impairment charge - (64.5)
Separation costs (2)
(2.0) (0.6)
Operating loss $ (20.8) $ (17.5)
(1)Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments.
(2)Represents costs included in SG&A expenses, primarily related to professional fees and costs incurred as the Company explores potential sales of non-core assets to enable further deleveraging post-emergence.
3

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Three Months Ended
April 1,
2022 		March 26,
2021 		Percent
change 		Currency impact Constant-currency growth
Specialty Brands $ 339.4 $ 408.4 (16.9) % (0.3) % (16.6) %
Specialty Generics 151.5 149.6 1.3 - 1.3
Net sales $ 490.9 $ 558.0 (12.0) % (0.2) % (11.8) %

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SELECT PRODUCT LINE NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Three Months Ended
April 1,
2022 		March 26,
2021 		Percent
change 		Currency impact Constant-currency growth
Specialty Brands
Acthar Gel $ 127.7 $ 129.0 (1.0) % - % (1.0) %
INOmax 99.0 134.0 (26.1) (0.1) (26.0)
Ofirmev 2.6 12.8 (79.7) - (79.7)
Therakos 59.9 66.8 (10.3) (1.8) (8.5)
Amitiza 47.7 61.4 (22.3) - (22.3)
Other 2.5 4.4 (43.2) - (43.2)
Specialty Brands Total 339.4 408.4 (16.9) (0.3) (16.6)
Specialty Generics
Hydrocodone (API) and hydrocodone-containing tablets 19.0 23.3 (18.5) - (18.5)
Oxycodone (API) and oxycodone-containing tablets 16.6 17.2 (3.5) - (3.5)
Acetaminophen (API) 46.3 45.5 1.8 - 1.8
Other controlled substances 64.1 58.1 10.3 - 10.3
Other 5.5 5.5 - - -
Specialty Generics Total 151.5 149.6 1.3 - 1.3
Net sales $ 490.9 $ 558.0 (12.0) % (0.2) % (11.8) %

4

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
April 1,
2022 		December 31,
2021
Assets
Current Assets:
Cash and cash equivalents $ 1,365.3 $ 1,345.0
Accounts receivable, net 364.4 439.1
Inventories 371.5 347.2
Prepaid expenses and other current assets 179.4 178.3
Total current assets 2,280.6 2,309.6
Property, plant and equipment, net 758.5 776.0
Intangible assets, net 5,293.4 5,448.4
Other assets 372.4 382.3
Total Assets $ 8,704.9 $ 8,916.3
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt $ 1,389.5 $ 1,388.9
Accounts payable 107.5 123.0
Accrued payroll and payroll-related costs 63.0 84.6
Accrued interest 17.4 17.0
Accrued and other current liabilities 269.9 328.7
Total current liabilities 1,847.3 1,942.2
Pension and postretirement benefits 29.5 30.1
Environmental liabilities 37.7 43.0
Deferred income taxes 20.1 20.9
Other income tax liabilities 77.5 83.2
Other liabilities 64.6 85.8
Liabilities subject to compromise 6,433.2 6,397.7
Total Liabilities 8,509.9 8,602.9
Shareholders' Equity:
Preferred shares - -
Ordinary shares
18.9 18.9
Ordinary shares held in treasury at cost (1,616.1) (1,616.1)
Additional paid-in capital 5,599.0 5,597.8
Retained deficit (3,798.5) (3,678.9)
Accumulated other comprehensive loss (8.3) (8.3)
Total Shareholders' Equity 195.0 313.4
Total Liabilities and Shareholders' Equity $ 8,704.9 $ 8,916.3

5

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Three Months Ended
April 1,
2022 		March 26,
2021
Cash Flows From Operating Activities:
Net loss $ (119.6) $ (143.9)
Adjustments to reconcile net cash from operating activities:
Depreciation and amortization 177.2 169.6
Share-based compensation 1.2 3.6
Deferred income taxes (0.9) (3.4)
Non-cash impairment charges - 64.5
Reorganization items, net 2.9 15.7
Other non-cash items 12.3 (11.9)
Changes in assets and liabilities:
Accounts receivable, net 73.8 61.8
Inventories (27.0) (22.8)
Accounts payable 0.4 0.5
Income taxes (7.8) (21.2)
Other (63.3) 38.9
Net cash from operating activities 49.2 151.4
Cash Flows From Investing Activities:
Capital expenditures (23.6) (20.9)
Other 0.2 (0.7)
Net cash from investing activities (23.4) (21.6)
Cash Flows From Financing Activities:
Repayment of external debt (4.6) (118.9)
Net cash from financing activities (4.6) (118.9)
Effect of currency rate changes on cash (0.7) (0.4)
Net change in cash, cash equivalents and restricted cash 20.5 10.5
Cash, cash equivalents and restricted cash at beginning of period 1,405.2 1,127.0
Cash, cash equivalents and restricted cash at end of period $ 1,425.7 $ 1,137.5
Cash and cash equivalents at end of period $ 1,365.3 $ 1,077.9
Restricted cash included in prepaid expenses and other current assets at end of period 24.0 23.4
Restricted cash included in other long-term assets at end of period 36.4 36.2
Cash, cash equivalents and restricted cash at end of period $ 1,425.7 $ 1,137.5

6