We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mallinckrodt Plc | NYSE:MNK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.75 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ireland
|
|
98-1088325
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
(Title of each class)
|
(Trading Symbol(s))
|
(Name of each exchange on which registered)
|
Ordinary shares, par value $0.20 per share
|
MNK
|
New York Stock Exchange
|
Large Accelerated Filer
|
☒
|
Accelerated Filer
|
☐
|
Emerging Growth Company
|
☐
|
Non-accelerated Filer
|
☐
|
Smaller Reporting Company
|
☐
|
|
|
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
Item 1.
|
Financial Statements.
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
Cost of sales
|
382.0
|
|
|
455.5
|
|
||
Gross profit
|
283.8
|
|
|
335.1
|
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
231.1
|
|
|
230.2
|
|
||
Research and development expenses
|
77.4
|
|
|
85.3
|
|
||
Restructuring charges, net
|
(1.8
|
)
|
|
4.2
|
|
||
Losses on divestiture
|
0.2
|
|
|
—
|
|
||
Opioid-related litigation settlement (Note 11)
|
(16.8
|
)
|
|
—
|
|
||
Operating (loss) income
|
(6.3
|
)
|
|
15.4
|
|
||
|
|
|
|
||||
Interest expense
|
(74.5
|
)
|
|
(82.7
|
)
|
||
Interest income
|
3.5
|
|
|
1.5
|
|
||
Other income, net
|
1.7
|
|
|
16.3
|
|
||
Loss from continuing operations before income taxes
|
(75.6
|
)
|
|
(49.5
|
)
|
||
|
|
|
|
||||
Income tax benefit
|
(18.9
|
)
|
|
(204.7
|
)
|
||
(Loss) income from continuing operations
|
(56.7
|
)
|
|
155.2
|
|
||
|
|
|
|
||||
Income (loss) from discontinued operations, net of income taxes
|
6.5
|
|
|
(0.3
|
)
|
||
|
|
|
|
||||
Net (loss) income
|
$
|
(50.2
|
)
|
|
$
|
154.9
|
|
|
|
|
|
||||
Basic (loss) earnings per share (Note 5):
|
|
|
|
||||
(Loss) income from continuing operations
|
$
|
(0.67
|
)
|
|
$
|
1.86
|
|
Income (loss) from discontinued operations
|
0.08
|
|
|
—
|
|
||
Net (loss) income
|
$
|
(0.60
|
)
|
|
$
|
1.86
|
|
|
|
|
|
||||
Basic weighted-average shares outstanding
|
84.2
|
|
|
83.5
|
|
||
|
|
|
|
||||
Diluted (loss) earnings per share (Note 5):
|
|
|
|
||||
(Loss) income from continuing operations
|
$
|
(0.67
|
)
|
|
$
|
1.83
|
|
Income (loss) from discontinued operations
|
0.08
|
|
|
—
|
|
||
Net (loss) income
|
$
|
(0.60
|
)
|
|
$
|
1.83
|
|
|
|
|
|
||||
Diluted weighted-average shares outstanding
|
84.2
|
|
|
84.6
|
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Net (loss) income
|
$
|
(50.2
|
)
|
|
$
|
154.9
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Currency translation adjustments
|
(1.1
|
)
|
|
1.4
|
|
||
Derivatives, net of tax
|
—
|
|
|
0.2
|
|
||
Benefit plans, net of tax
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Total other comprehensive (loss) income, net of tax
|
(1.3
|
)
|
|
1.3
|
|
||
Comprehensive (loss) income
|
$
|
(51.5
|
)
|
|
$
|
156.2
|
|
|
March 27,
2020 |
|
December 27,
2019 |
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
808.0
|
|
|
$
|
790.9
|
|
Accounts receivable, less allowance for doubtful accounts of $4.0 and $4.0
|
527.2
|
|
|
577.5
|
|
||
Inventories
|
327.1
|
|
|
312.1
|
|
||
Prepaid expenses and other current assets
|
211.0
|
|
|
150.2
|
|
||
Total current assets
|
1,873.3
|
|
|
1,830.7
|
|
||
Property, plant and equipment, net
|
878.2
|
|
|
896.5
|
|
||
Intangible assets, net
|
6,820.4
|
|
|
7,018.0
|
|
||
Other assets
|
599.4
|
|
|
593.7
|
|
||
Total Assets
|
$
|
10,171.3
|
|
|
$
|
10,338.9
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
634.2
|
|
|
$
|
633.6
|
|
Accounts payable
|
110.2
|
|
|
139.8
|
|
||
Accrued payroll and payroll-related costs
|
63.0
|
|
|
105.2
|
|
||
Accrued interest
|
82.3
|
|
|
62.9
|
|
||
Accrued and other current liabilities
|
394.4
|
|
|
485.4
|
|
||
Total current liabilities
|
1,284.1
|
|
|
1,426.9
|
|
||
Long-term debt
|
4,739.1
|
|
|
4,741.2
|
|
||
Opioid-related litigation settlement liability (Note 11)
|
1,626.6
|
|
|
1,643.4
|
|
||
Pension and postretirement benefits
|
61.5
|
|
|
62.4
|
|
||
Environmental liabilities
|
60.6
|
|
|
60.0
|
|
||
Other income tax liabilities
|
291.3
|
|
|
227.1
|
|
||
Other liabilities
|
212.3
|
|
|
237.2
|
|
||
Total Liabilities
|
8,275.5
|
|
|
8,398.2
|
|
||
Shareholders' Equity:
|
|
|
|
||||
Preferred shares, $0.20 par value, 500,000,000 authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Ordinary A shares, €1.00 par value, 40,000 authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Ordinary shares, $0.20 par value, 500,000,000 authorized; 93,576,710, and 93,459,206 issued;
84,208,441 and 84,105,786 outstanding
|
18.7
|
|
|
18.7
|
|
||
Ordinary shares held in treasury at cost, 9,368,269 and 9,353,420
|
(1,615.7
|
)
|
|
(1,615.7
|
)
|
||
Additional paid-in capital
|
5,569.1
|
|
|
5,562.5
|
|
||
Retained deficit
|
(2,067.1
|
)
|
|
(2,016.9
|
)
|
||
Accumulated other comprehensive loss
|
(9.2
|
)
|
|
(7.9
|
)
|
||
Total Shareholders' Equity
|
1,895.8
|
|
|
1,940.7
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
10,171.3
|
|
|
$
|
10,338.9
|
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(50.2
|
)
|
|
$
|
154.9
|
|
Adjustments to reconcile net cash from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
223.1
|
|
|
247.6
|
|
||
Share-based compensation
|
6.7
|
|
|
10.0
|
|
||
Deferred income taxes
|
5.5
|
|
|
(243.2
|
)
|
||
Losses on divestiture
|
0.2
|
|
|
—
|
|
||
Other non-cash items
|
(19.6
|
)
|
|
2.6
|
|
||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
49.4
|
|
|
48.7
|
|
||
Inventories
|
(18.4
|
)
|
|
(0.7
|
)
|
||
Accounts payable
|
(22.9
|
)
|
|
(7.1
|
)
|
||
Income taxes
|
(34.9
|
)
|
|
19.8
|
|
||
Other
|
(85.2
|
)
|
|
(68.1
|
)
|
||
Net cash from operating activities
|
53.7
|
|
|
164.5
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(19.9
|
)
|
|
(39.8
|
)
|
||
Proceeds from divestitures, net of cash
|
(3.5
|
)
|
|
—
|
|
||
Other
|
6.7
|
|
|
0.4
|
|
||
Net cash from investing activities
|
(16.7
|
)
|
|
(39.4
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Issuance of external debt
|
—
|
|
|
200.0
|
|
||
Repayment of external debt
|
(4.9
|
)
|
|
(448.7
|
)
|
||
Debt financing costs
|
(4.0
|
)
|
|
—
|
|
||
Proceeds from exercise of share options
|
—
|
|
|
0.3
|
|
||
Repurchase of shares
|
—
|
|
|
(0.5
|
)
|
||
Other
|
—
|
|
|
0.5
|
|
||
Net cash from financing activities
|
(8.9
|
)
|
|
(248.4
|
)
|
||
Effect of currency rate changes on cash
|
(1.5
|
)
|
|
0.3
|
|
||
Net change in cash, cash equivalents and restricted cash
|
26.6
|
|
|
(123.0
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
822.6
|
|
|
367.5
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
849.2
|
|
|
$
|
244.5
|
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
808.0
|
|
|
$
|
225.8
|
|
Restricted cash included in other assets at end of period
|
41.2
|
|
|
18.7
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
849.2
|
|
|
$
|
244.5
|
|
|
Ordinary Shares
|
|
Treasury Shares
|
|
Additional
Paid-In Capital
|
|
Retained Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total
Shareholders'
Equity
|
||||||||||||||||||
|
Number
|
|
Par
Value
|
|
Number
|
|
Amount
|
|
|
||||||||||||||||||||
Balance as of December 28, 2018
|
92.7
|
|
|
$
|
18.5
|
|
|
9.4
|
|
|
$
|
(1,617.4
|
)
|
|
$
|
5,528.2
|
|
|
$
|
(1,017.7
|
)
|
|
$
|
(24.3
|
)
|
|
$
|
2,887.3
|
|
Impact of accounting standard adoptions, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
0.5
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154.9
|
|
|
—
|
|
|
154.9
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
||||||
Share options exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Vesting of restricted shares
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||||
Reissuance of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
0.5
|
|
||||||
Balance as of March 29, 2019
|
92.9
|
|
|
$
|
18.6
|
|
|
9.4
|
|
|
$
|
(1,617.0
|
)
|
|
$
|
5,538.5
|
|
|
$
|
(863.7
|
)
|
|
$
|
(22.5
|
)
|
|
$
|
3,053.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance as of December 27, 2019
|
93.5
|
|
|
$
|
18.7
|
|
|
9.4
|
|
|
$
|
(1,615.7
|
)
|
|
$
|
5,562.5
|
|
|
$
|
(2,016.9
|
)
|
|
$
|
(7.9
|
)
|
|
$
|
1,940.7
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.2
|
)
|
|
—
|
|
|
(50.2
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||||||
Vesting of restricted shares
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
||||||
Balance as of March 27, 2020
|
93.6
|
|
|
$
|
18.7
|
|
|
9.4
|
|
|
$
|
(1,615.7
|
)
|
|
$
|
5,569.1
|
|
|
$
|
(2,067.1
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
1,895.8
|
|
1.
|
Background and Basis of Presentation
|
•
|
Specialty Brands includes innovative specialty pharmaceutical brands; and
|
•
|
Specialty Generics includes niche specialty generic drugs and active pharmaceutical ingredients ("API(s)").
|
2.
|
Revenue from Contracts with Customers
|
|
Rebates and Chargebacks
|
|
Product Returns
|
|
Other Sales Deductions
|
|
Total
|
||||||||
Balance as of December 28, 2018
|
$
|
354.3
|
|
|
$
|
34.0
|
|
|
$
|
17.1
|
|
|
$
|
405.4
|
|
Provisions
|
602.9
|
|
|
6.2
|
|
|
17.7
|
|
|
626.8
|
|
||||
Payments or credits
|
(805.8
|
)
|
|
(8.2
|
)
|
|
(12.4
|
)
|
|
(826.4
|
)
|
||||
Balance as of March 29, 2019
|
$
|
151.4
|
|
|
$
|
32.0
|
|
|
$
|
22.4
|
|
|
$
|
205.8
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 27, 2019
|
$
|
295.8
|
|
|
$
|
28.4
|
|
|
$
|
13.2
|
|
|
$
|
337.4
|
|
Provisions
|
457.8
|
|
|
3.8
|
|
|
13.7
|
|
|
475.3
|
|
||||
Payments or credits
|
(498.8
|
)
|
|
(6.1
|
)
|
|
(15.9
|
)
|
|
(520.8
|
)
|
||||
Balance as of March 27, 2020
|
$
|
254.8
|
|
|
$
|
26.1
|
|
|
$
|
11.0
|
|
|
$
|
291.9
|
|
|
Three Months Ended
|
||||
|
March 27,
2020 |
|
March 29,
2019 |
||
Product sales transferred at a point in time
|
78.5
|
%
|
|
80.7
|
%
|
Product sales transferred over time
|
21.5
|
|
|
19.3
|
|
Remainder of Fiscal 2020
|
$
|
148.5
|
|
Fiscal 2021
|
102.7
|
|
|
Fiscal 2022
|
37.7
|
|
|
Fiscal 2023
|
8.1
|
|
|
Thereafter
|
0.3
|
|
|
March 27,
2020 |
|
December 27,
2019 |
||||
Accrued and other current liabilities
|
$
|
4.7
|
|
|
$
|
5.6
|
|
Other liabilities
|
0.6
|
|
|
0.6
|
|
||
Contract liabilities
|
$
|
5.3
|
|
|
$
|
6.2
|
|
3.
|
Restructuring and Related Charges
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Specialty Brands
|
$
|
—
|
|
|
$
|
0.5
|
|
Specialty Generics
|
0.1
|
|
|
3.5
|
|
||
Corporate
|
(1.9
|
)
|
|
0.2
|
|
||
Restructuring and related charges, net
|
(1.8
|
)
|
|
4.2
|
|
||
Less: accelerated depreciation
|
—
|
|
|
—
|
|
||
Restructuring charges, net
|
$
|
(1.8
|
)
|
|
$
|
4.2
|
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
2018 Program
|
$
|
0.1
|
|
|
$
|
3.5
|
|
2016 Program
|
—
|
|
|
0.7
|
|
||
Acquisition Programs
|
(1.9
|
)
|
|
—
|
|
||
Total charges expected to be settled in cash
|
$
|
(1.8
|
)
|
|
$
|
4.2
|
|
|
2018 Program
|
|
2016 Program
|
|
Acquisition Programs
|
|
Total
|
||||||||
Balance as of December 27, 2019
|
$
|
2.7
|
|
|
$
|
31.3
|
|
|
$
|
0.2
|
|
|
$
|
34.2
|
|
Charges
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Changes in estimate
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
||||
Cash payments
|
(2.5
|
)
|
|
(30.5
|
)
|
|
(0.2
|
)
|
|
(33.2
|
)
|
||||
Currency translation and other
|
—
|
|
|
—
|
|
|
1.9
|
|
|
1.9
|
|
||||
Balance as of March 27, 2020
|
$
|
0.3
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
2018 Program
|
|
2016 Program
|
||||
Specialty Brands
|
$
|
3.0
|
|
|
$
|
68.1
|
|
Specialty Generics
|
10.1
|
|
|
14.6
|
|
||
Corporate
|
2.0
|
|
|
28.9
|
|
||
|
$
|
15.1
|
|
|
$
|
111.6
|
|
4.
|
Income Taxes
|
5.
|
(Loss) Earnings per Share
|
|
Three Months Ended
|
||||
|
March 27,
2020 |
|
March 29,
2019 |
||
Basic
|
84.2
|
|
|
83.5
|
|
Dilutive impact of restricted share units and share options
|
—
|
|
|
1.1
|
|
Diluted
|
84.2
|
|
|
84.6
|
|
6.
|
Inventories
|
|
March 27,
2020 |
|
December 27,
2019 |
||||
Raw materials and supplies
|
$
|
56.5
|
|
|
$
|
62.7
|
|
Work in process
|
184.5
|
|
|
166.5
|
|
||
Finished goods
|
86.1
|
|
|
82.9
|
|
||
|
$
|
327.1
|
|
|
$
|
312.1
|
|
7.
|
Property, Plant and Equipment
|
|
March 27,
2020 |
|
December 27, 2019
|
||||
Property, plant and equipment, gross
|
$
|
1,902.7
|
|
|
$
|
1,900.1
|
|
Less: accumulated depreciation
|
(1,024.5
|
)
|
|
(1,003.6
|
)
|
||
Property, plant and equipment, net
|
$
|
878.2
|
|
|
$
|
896.5
|
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Depreciation expense
|
$
|
25.5
|
|
|
$
|
24.8
|
|
8.
|
Intangible Assets
|
|
March 27, 2020
|
|
December 27, 2019
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Amortizable:
|
|
|
|
|
|
|
|
||||||||
Completed technology
|
$
|
10,456.9
|
|
|
$
|
4,018.5
|
|
|
$
|
10,456.9
|
|
|
$
|
3,822.8
|
|
License agreements
|
120.1
|
|
|
75.1
|
|
|
120.1
|
|
|
74.1
|
|
||||
Trademarks
|
77.7
|
|
|
21.0
|
|
|
77.7
|
|
|
20.1
|
|
||||
Total
|
$
|
10,654.7
|
|
|
$
|
4,114.6
|
|
|
$
|
10,654.7
|
|
|
$
|
3,917.0
|
|
Non-Amortizable:
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
35.0
|
|
|
|
|
$
|
35.0
|
|
|
|
||||
In-process research and development
|
245.3
|
|
|
|
|
245.3
|
|
|
|
||||||
Total
|
$
|
280.3
|
|
|
|
|
$
|
280.3
|
|
|
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Amortization expense
|
$
|
197.6
|
|
|
$
|
222.8
|
|
Remainder of Fiscal 2020
|
$
|
556.6
|
|
Fiscal 2021
|
657.6
|
|
|
Fiscal 2022
|
585.1
|
|
|
Fiscal 2023
|
581.1
|
|
|
Fiscal 2024
|
581.1
|
|
9.
|
Debt
|
|
March 27, 2020
|
|
December 27, 2019
|
||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
||||||||
Current maturities of long-term debt:
|
|
|
|
|
|
|
|
||||||||
4.875% senior notes due April 2020
|
$
|
614.8
|
|
|
$
|
0.1
|
|
|
$
|
614.8
|
|
|
$
|
0.6
|
|
Term loan due September 2024
|
15.6
|
|
|
0.1
|
|
|
15.6
|
|
|
0.2
|
|
||||
Term loan due February 2025
|
4.1
|
|
|
0.1
|
|
|
4.1
|
|
|
0.1
|
|
||||
Total current debt
|
634.5
|
|
|
0.3
|
|
|
634.5
|
|
|
0.9
|
|
||||
Long-term debt:
|
|
|
|
|
|
|
|
||||||||
9.50% debentures due May 2022
|
10.4
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
||||
5.75% senior notes due August 2022
|
610.3
|
|
|
3.3
|
|
|
610.3
|
|
|
3.7
|
|
||||
8.00% debentures due March 2023
|
4.4
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
||||
4.75% senior notes due April 2023
|
133.7
|
|
|
0.8
|
|
|
133.7
|
|
|
0.8
|
|
||||
5.625% senior notes due October 2023
|
514.7
|
|
|
4.1
|
|
|
514.7
|
|
|
4.4
|
|
||||
Term loan due September 2024
|
1,501.3
|
|
|
14.7
|
|
|
1,505.2
|
|
|
15.5
|
|
||||
Term loan due February 2025
|
398.5
|
|
|
5.8
|
|
|
399.5
|
|
|
6.1
|
|
||||
5.50% senior notes due April 2025
|
387.2
|
|
|
3.5
|
|
|
387.2
|
|
|
3.6
|
|
||||
10.00% second lien senior notes due April 2025
|
322.9
|
|
|
9.4
|
|
|
322.9
|
|
|
9.9
|
|
||||
Revolving credit facility
|
900.0
|
|
|
2.7
|
|
|
900.0
|
|
|
3.1
|
|
||||
Total long-term debt
|
4,783.4
|
|
|
44.3
|
|
|
4,788.3
|
|
|
47.1
|
|
||||
Total debt
|
$
|
5,417.9
|
|
|
$
|
44.6
|
|
|
$
|
5,422.8
|
|
|
$
|
48.0
|
|
|
Applicable interest rate
|
|
Outstanding borrowings
|
|||
Term loan due September 2024
|
4.69
|
%
|
|
$
|
1,516.9
|
|
Term loan due February 2025
|
4.70
|
|
|
402.6
|
|
|
Revolving credit facility
|
3.86
|
|
|
900.0
|
|
10.
|
Guarantees
|
11.
|
Commitments and Contingencies
|
•
|
the payment of $300.0 million upon Specialty Generics' emergence from the completed Chapter 11 case;
|
•
|
the payment to the Opioid Claimant Trust of additional cash totaling $1,300.0 million, consisting of $200.0 million on each of the first and second anniversaries of emergence and $150.0 million on each of the third through eighth anniversaries of emergence; and
|
•
|
the issuance of warrants ("Settlement Warrants") upon emergence from the contemplated Chapter 11 process to the Opioid Claimant Trust to purchase ordinary shares of the Company with an eight year term at a strike price of $3.15 per ordinary share that would represent approximately 19.99% of the Company's fully diluted outstanding shares, including after giving effect to the exercise of the warrants, provided that such warrants may not be exercised during any calendar quarter in a quantity that would exceed 5.0% of the number of shares outstanding.
|
•
|
the exchange of the 4.875% senior unsecured notes that had a maturity date of April 15, 2020 (the "2020 Notes") and the 5.75% senior unsecured notes due August 2022 (the "2022 Notes") into new secured notes on terms reasonably satisfactory to the Company;
|
•
|
the coordination of the action filed by the State of New York against the Company to allow the Specialty Generics Subsidiaries sufficient time to arrange for pre-arranged filings under Chapter 11;
|
•
|
the support and participation of a supermajority of all claimants with opioid-related claims, including a future claims representative (if one is deemed necessary by the Company in consultation with an ad hoc committee of certain Supporting Claimants or their representatives (the "AHC")), against the Company on terms satisfactory to the Company;
|
•
|
the resolution of U.S. Department of Justice ("DOJ") civil and criminal claims against the Company on reasonable terms;
|
•
|
the agreement by and between the Company and the Supporting Claimants to an injunction governing the sale and distribution of opioids by the Specialty Generics Subsidiaries, compliance with which is expected to protect the Company from further opioid-related liability, on terms satisfactory to the Company, with such terms to be binding on the Specialty Generics Subsidiaries and any buyers thereof or successors thereto;
|
•
|
the treatment of potential indemnification claims of Covidien plc on terms satisfactory to the Company and the AHC;
|
•
|
the disclosure by the Company of a subset of its litigation documents to be made publicly available as part of an industry-wide document disclosure program, subject to scope and protocols to be negotiated by the parties’ informed representatives;
|
•
|
the entry of a judgment between the Company and the Centers for Medicare & Medicaid Services ("CMS") and the entry by the Company into any other legal judgments or settlements, each on such terms and at such levels as may be acceptable to the Company, such that the Company is able to make all payments required under the terms of the Litigation Settlement (such condition to the Litigation Settlement, the "Medicaid Lawsuit Condition");
|
•
|
the resolution and settlement of certain outstanding intercompany indebtedness between the Specialty Generics Subsidiaries and the Company’s other subsidiaries and the entry into a shared services agreement between the Specialty
|
•
|
a rights offering or a shareholder vote to satisfy any applicable legal requirements relating to the issuance of the warrants, in a manner reasonably acceptable to the Company and the AHC; and
|
•
|
the satisfaction such other conditions as may be mutually agreed to by the Company and the AHC.
|
12.
|
Financial Instruments and Fair Value Measurements
|
|
March 27,
2020 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|||||||
Debt and equity securities held in rabbi trusts
|
$
|
28.6
|
|
|
$
|
19.3
|
|
|
$
|
9.3
|
|
|
$
|
—
|
|
Equity securities
|
29.2
|
|
|
29.2
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
57.8
|
|
|
$
|
48.5
|
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation liabilities
|
$
|
27.5
|
|
|
$
|
—
|
|
|
$
|
27.5
|
|
|
$
|
—
|
|
Contingent consideration and acquired contingent liabilities
|
68.8
|
|
|
—
|
|
|
—
|
|
|
68.8
|
|
||||
Settlement Warrants
|
26.6
|
|
|
—
|
|
|
—
|
|
|
26.6
|
|
||||
|
$
|
122.9
|
|
|
$
|
—
|
|
|
$
|
27.5
|
|
|
$
|
95.4
|
|
|
December 27,
2019 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Debt and equity securities held in rabbi trusts
|
$
|
30.6
|
|
|
$
|
21.0
|
|
|
$
|
9.6
|
|
|
$
|
—
|
|
Equity securities
|
26.2
|
|
|
26.2
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
56.8
|
|
|
$
|
47.2
|
|
|
$
|
9.6
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation liabilities
|
$
|
39.2
|
|
|
$
|
—
|
|
|
$
|
39.2
|
|
|
$
|
—
|
|
Contingent consideration and acquired contingent liabilities
|
69.3
|
|
|
—
|
|
|
—
|
|
|
69.3
|
|
||||
Settlement Warrants
|
43.4
|
|
|
—
|
|
|
—
|
|
|
43.4
|
|
||||
|
$
|
151.9
|
|
|
$
|
—
|
|
|
$
|
39.2
|
|
|
$
|
112.7
|
|
Balance as of December 27, 2019
|
$
|
69.3
|
|
Accretion expense
|
0.3
|
|
|
Fair value adjustments
|
(0.8
|
)
|
|
Balance as of March 27, 2020
|
$
|
68.8
|
|
|
March 27, 2020
|
|
December 27, 2019
|
||||
Expected share price volatility
|
64.1
|
%
|
|
54.4
|
%
|
||
Weighted-average risk-free rate
|
0.6
|
%
|
|
1.8
|
%
|
||
Expected annual dividend per share
|
—
|
%
|
|
—
|
%
|
||
Weighted-average expected term (in years)
|
7.6
|
|
|
7.6
|
|
||
Share price
|
$
|
2.23
|
|
|
$
|
3.45
|
|
•
|
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and the majority of other current assets and liabilities approximate fair value because of their short-term nature. The Company classifies cash on hand and deposits in banks, including commercial paper, money market accounts and other investments it may hold from
|
•
|
The Company has received a portion of consideration as part of contingent earn-out payments related to the sale of the Nuclear Imaging business in the form of preferred equity certificates. These securities are classified as held-to-maturity and are carried at amortized cost, which approximates fair value (level 3), of $29.8 million and $18.9 million as of March 27, 2020 and December 27, 2019, respectively. These securities are included in other assets on the unaudited condensed consolidated balance sheets.
|
•
|
The Company's life insurance contracts are carried at cash surrender value, which is based on the present value of future cash flows under the terms of the contracts (level 3). Significant assumptions used in determining the cash surrender value include the amount and timing of future cash flows, interest rates and mortality charges. The fair value of these contracts approximates the carrying value of $51.0 million and $51.1 million as of March 27, 2020 and December 27, 2019, respectively. These contracts are included in other assets on the unaudited condensed consolidated balance sheets.
|
•
|
The carrying value of the Company's revolving credit facility approximates the fair value due to the short-term nature of this instrument, and is therefore classified as level 1. The Company's 4.875%, 5.75%, 4.75%, 5.625%, 5.50% and 10.00% senior notes are classified as level 1, as quoted prices are available in an active market for these notes. Since the quoted market prices for the Company's term loans and 9.50% and 8.00% debentures are not available in an active market, they are classified as level 2 for purposes of developing an estimate of fair value. The following table presents the carrying values and estimated fair values of the Company's debt as of the end of each period:
|
|
March 27, 2020
|
|
December 27, 2019
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Level 1:
|
|
|
|
|
|
|
|
||||||||
4.875% senior notes due April 2020
|
$
|
614.8
|
|
|
$
|
408.9
|
|
|
$
|
614.8
|
|
|
$
|
480.0
|
|
5.75% senior notes due August 2022
|
610.3
|
|
|
283.3
|
|
|
610.3
|
|
|
251.0
|
|
||||
4.75% senior notes due April 2023
|
133.7
|
|
|
28.8
|
|
|
133.7
|
|
|
53.7
|
|
||||
5.625% senior notes due October 2023
|
514.7
|
|
|
131.2
|
|
|
514.7
|
|
|
193.2
|
|
||||
5.50% senior notes due April 2025
|
387.2
|
|
|
76.1
|
|
|
387.2
|
|
|
135.5
|
|
||||
10.00% second lien senior notes due April 2025
|
322.9
|
|
|
221.9
|
|
|
322.9
|
|
|
253.8
|
|
||||
Revolving credit facility
|
900.0
|
|
|
900.0
|
|
|
900.0
|
|
|
900.0
|
|
||||
Level 2:
|
|
|
|
|
|
|
|
||||||||
9.50% debentures due May 2022
|
10.4
|
|
|
5.2
|
|
|
10.4
|
|
|
5.4
|
|
||||
8.00% debentures due March 2023
|
4.4
|
|
|
1.6
|
|
|
4.4
|
|
|
2.0
|
|
||||
Term loan due September 2024
|
1,516.9
|
|
|
1,026.3
|
|
|
1,520.8
|
|
|
1,240.0
|
|
||||
Term loan due February 2025
|
402.6
|
|
|
270.2
|
|
|
403.6
|
|
|
326.2
|
|
||||
Total Debt
|
$
|
5,417.9
|
|
|
$
|
3,353.5
|
|
|
$
|
5,422.8
|
|
|
$
|
3,840.8
|
|
|
March 27,
2020 |
|
December 27,
2019 |
||
AmerisourceBergen Corporation
|
31.1
|
%
|
|
31.3
|
%
|
McKesson Corporation
|
18.5
|
|
|
15.3
|
|
CuraScript, Inc.
|
*
|
|
|
12.1
|
|
|
Three Months Ended
|
||||
|
March 27,
2020 |
|
March 29,
2019 |
||
Acthar Gel
|
25.2
|
%
|
|
28.3
|
%
|
INOmax
|
21.3
|
|
|
19.1
|
|
Ofirmev
|
11.3
|
|
|
12.1
|
|
13.
|
Segment Data
|
•
|
Specialty Brands includes innovative specialty pharmaceutical brands; and
|
•
|
Specialty Generics includes niche specialty generic drugs and APIs.
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Net sales:
|
|
|
|
||||
Specialty Brands
|
$
|
490.6
|
|
|
$
|
604.2
|
|
Specialty Generics
|
175.2
|
|
|
186.4
|
|
||
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
Operating (loss) income:
|
|
|
|
||||
Specialty Brands
|
$
|
212.2
|
|
|
$
|
275.5
|
|
Specialty Generics
|
48.3
|
|
|
24.4
|
|
||
Segment operating income
|
260.5
|
|
|
299.9
|
|
||
Unallocated amounts:
|
|
|
|
||||
Corporate and unallocated expenses (1)
|
(66.5
|
)
|
|
(45.8
|
)
|
||
Intangible asset amortization
|
(197.6
|
)
|
|
(222.8
|
)
|
||
Restructuring and related charges, net
|
1.8
|
|
|
(4.2
|
)
|
||
Separation costs (2)
|
(21.3
|
)
|
|
(11.7
|
)
|
||
Opioid-related litigation settlement (3)
|
16.8
|
|
|
—
|
|
||
Operating (loss) income
|
$
|
(6.3
|
)
|
|
$
|
15.4
|
|
(1)
|
Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments.
|
(2)
|
These costs, which are included in SG&A expenses, primarily relate to professional fees, incremental costs incurred to build out the corporate infrastructure of the previously planned spin-off of the Company's Specialty Generics segment, costs incurred as the Company works to resolve opioid uncertainties, as well as rebranding initiatives associated with the Specialty Brands ongoing transformation.
|
(3)
|
Represents the change in the Settlement Warrants' fair value. Refer to Note 12 for further information regarding the valuations of the Settlement Warrants.
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Acthar Gel
|
$
|
167.6
|
|
|
$
|
223.9
|
|
INOmax
|
141.7
|
|
|
151.1
|
|
||
Ofirmev
|
74.9
|
|
|
95.6
|
|
||
Therakos
|
63.7
|
|
|
61.8
|
|
||
Amitiza (1)
|
41.1
|
|
|
53.0
|
|
||
Other (2)
|
1.6
|
|
|
18.8
|
|
||
Specialty Brands
|
490.6
|
|
|
604.2
|
|
||
|
|
|
|
||||
Hydrocodone (API) and hydrocodone-containing tablets
|
26.5
|
|
|
17.4
|
|
||
Oxycodone (API) and oxycodone-containing tablets
|
16.9
|
|
|
16.5
|
|
||
Acetaminophen (API)
|
44.1
|
|
|
46.2
|
|
||
Other controlled substances
|
83.6
|
|
|
94.2
|
|
||
Other
|
4.1
|
|
|
12.1
|
|
||
Specialty Generics
|
175.2
|
|
|
186.4
|
|
||
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
(1)
|
Amitiza consists of both product net sales and royalties. Refer to Note 2 for further details on Amitiza's revenues.
|
(2)
|
The three months ended March 29, 2019 includes $12.4 million of net sales related to BioVectra prior to the completion of the sale of this business in November 2019.
|
14.
|
Subsequent Events
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Specialty Brands includes innovative specialty pharmaceutical brands; and
|
•
|
Specialty Generics includes niche specialty generic drugs and active pharmaceutical ingredients ("API(s)").
|
|
Three Months Ended
|
|
|
|||||||
|
March 27,
2020 |
|
March 29,
2019 |
|
Percentage
Change |
|||||
U.S.
|
$
|
587.9
|
|
|
$
|
679.7
|
|
|
(13.5
|
)%
|
Europe, Middle East and Africa
|
60.6
|
|
|
74.8
|
|
|
(19.0
|
)
|
||
Other geographic areas
|
17.3
|
|
|
36.1
|
|
|
(52.1
|
)
|
||
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
|
(15.8
|
)
|
|
Three Months Ended
|
|
|
|||||||
|
March 27,
2020 |
|
March 29,
2019 |
|
Percentage
Change
|
|||||
Specialty Brands
|
$
|
490.6
|
|
|
$
|
604.2
|
|
|
(18.8
|
)%
|
Specialty Generics
|
175.2
|
|
|
186.4
|
|
|
(6.0
|
)
|
||
Net sales
|
$
|
665.8
|
|
|
$
|
790.6
|
|
|
(15.8
|
)
|
|
Three Months Ended
|
|
|
|||||||
|
March 27,
2020 |
|
March 29,
2019 |
|
Percentage
Change |
|||||
U.S.
|
$
|
444.7
|
|
|
$
|
531.2
|
|
|
(16.3
|
)%
|
Europe, Middle East and Africa
|
32.5
|
|
|
40.8
|
|
|
(20.3
|
)
|
||
Other
|
13.4
|
|
|
32.2
|
|
|
(58.4
|
)
|
||
Net sales
|
$
|
490.6
|
|
|
$
|
604.2
|
|
|
(18.8
|
)
|
|
Three Months Ended
|
|
|
|||||||
|
March 27,
2020 |
|
March 29,
2019 |
|
Percentage
Change
|
|||||
U.S.
|
$
|
143.2
|
|
|
$
|
148.5
|
|
|
(3.6
|
)%
|
Europe, Middle East and Africa
|
28.1
|
|
|
34.0
|
|
|
(17.4
|
)
|
||
Other
|
3.9
|
|
|
3.9
|
|
|
—
|
|
||
Net sales
|
$
|
175.2
|
|
|
$
|
186.4
|
|
|
(6.0
|
)
|
|
Three Months Ended
|
|
|
|||||||
|
March 27,
2020 |
|
March 29,
2019 |
|
Percentage Change
|
|||||
Hydrocodone (API) and hydrocodone-containing tablets
|
$
|
26.5
|
|
|
$
|
17.4
|
|
|
52.3
|
%
|
Oxycodone (API) and oxycodone-containing tablets
|
16.9
|
|
|
16.5
|
|
|
2.4
|
|
||
Acetaminophen (API)
|
44.1
|
|
|
46.2
|
|
|
(4.5
|
)
|
||
Other controlled substances
|
83.6
|
|
|
94.2
|
|
|
(11.3
|
)
|
||
Other
|
4.1
|
|
|
12.1
|
|
|
(66.1
|
)
|
||
Specialty Generics
|
$
|
175.2
|
|
|
$
|
186.4
|
|
|
(6.0
|
)
|
|
Three Months Ended
|
||||||||||||
|
March 27, 2020
|
|
March 29, 2019
|
||||||||||
Specialty Brands (1)
|
$
|
212.2
|
|
|
43.3
|
%
|
|
$
|
275.5
|
|
|
45.6
|
%
|
Specialty Generics
|
48.3
|
|
|
27.6
|
|
|
24.4
|
|
|
13.1
|
|
||
Segment operating income
|
260.5
|
|
|
39.1
|
|
|
299.9
|
|
|
37.9
|
|
||
Unallocated amounts:
|
|
|
|
|
|
|
|
||||||
Corporate and unallocated expenses
|
(66.5
|
)
|
|
|
|
(45.8
|
)
|
|
|
||||
Intangible asset amortization
|
(197.6
|
)
|
|
|
|
(222.8
|
)
|
|
|
||||
Restructuring and related charges, net
|
1.8
|
|
|
|
|
(4.2
|
)
|
|
|
||||
Separation costs
|
(21.3
|
)
|
|
|
|
(11.7
|
)
|
|
|
||||
Opioid-related litigation settlement (2)
|
16.8
|
|
|
|
|
—
|
|
|
|
||||
Total operating (loss) income
|
$
|
(6.3
|
)
|
|
|
|
$
|
15.4
|
|
|
|
(1)
|
Includes $10.0 million of inventory fair-value step up expense, primarily related to Amitiza, during the three months ended March 29, 2019.
|
(2)
|
Represents the change in the Settlement Warrants' fair value. Refer to Note 12 for further information regarding the valuations of the Settlement Warrants.
|
|
Three Months Ended
|
||||||
|
March 27,
2020 |
|
March 29,
2019 |
||||
Net cash from:
|
|
|
|
||||
Operating activities
|
$
|
53.7
|
|
|
$
|
164.5
|
|
Investing activities
|
(16.7
|
)
|
|
(39.4
|
)
|
||
Financing activities
|
(8.9
|
)
|
|
(248.4
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(1.5
|
)
|
|
0.3
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
26.6
|
|
|
$
|
(123.0
|
)
|
Variable-rate instruments:
|
|
||
Term loan due September 2024
|
$
|
1,516.9
|
|
Term loan due February 2025
|
402.6
|
|
|
Revolving credit facility
|
900.0
|
|
|
Fixed-rate instruments
|
2,598.4
|
|
|
Debt principal
|
$
|
5,417.9
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
Total Number of
Shares Purchased |
|
Average Price
Paid
Per Share
|
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under Plans or Programs
(in millions)
|
||||||
December 28, 2019 to January 24, 2020
|
13,009
|
|
|
$
|
3.33
|
|
|
—
|
|
|
$
|
564.2
|
|
January 25, 2020 to February 28, 2020
|
1,716
|
|
|
4.59
|
|
|
—
|
|
|
564.2
|
|
||
February 29, 2020 to March 27, 2020
|
124
|
|
|
4.28
|
|
|
—
|
|
|
564.2
|
|
||
December 28, 2019 to March 27, 2020
|
14,849
|
|
|
3.48
|
|
|
|
|
|
Item 6.
|
Exhibits.
|
Exhibit
Number
|
|
Exhibit
|
|
|
|
4.1
|
|
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101
|
|
Interactive Data File (Form 10-Q for the quarterly period ended March 27, 2020 filed in XBRL). The financial information contained in the XBRL-related documents is "unaudited" and "unreviewed." The instance document does not appear in the interactive file because its XBRL tags are embedded within the Inline XBRL document.
|
104
|
|
Cover Page Interactive Data File (embedded within the inline XBRL document).
|
|
MALLINCKRODT PLC
|
|
|
|
|
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
Executive Vice President and Chief Financial Officer
(principal financial officer)
|
1 Year Mallinckrodt Chart |
1 Month Mallinckrodt Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions