Exhibit 99.1
JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On March 20, 2015, Jazz Pharmaceuticals Public Limited Company (the “Company”) completed the sale (the “Disposition”) of certain products that the Company originally acquired as part of the Company’s acquisition of EUSA Pharma Inc. and the business related thereto (such products and the related business, the “Disposed Business”) to Essex Bidco Limited, a company controlled by Essex Woodlands (“Essex”). Pursuant to the agreement for the Disposition, the purchase price for the Disposed Business was $34 million, subject to certain adjustments. As of the closing, the Company was entitled to receive approximately $33 million in cash after purchase price adjustments were made prior to the closing. The purchase price is subject to potential further adjustments post-closing. Products in the Disposed Business sold to Essex in the Disposition included Caphosol® (supersaturated calcium phosphate rinse), Collatamp® (lyophilized collagen implant impregnated with the aminoglycoside antibiotic gentamicin), Fomepizole® (fomepizole), Xenazine® (tetrabenazine) and Custodiol® (solution HTK).
The unaudited pro forma condensed consolidated balance sheet at December 31, 2014 gives effect to the Disposition as if it had occurred on December 31, 2014.
The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2014 is presented as if the Disposition was consummated on January 1, 2014. The unaudited pro forma condensed consolidated financial statements presented herein are based on the historical financial statements of the Company after giving effect to the Disposition by applying the assumptions and adjustments described in the accompanying notes.
The Company’s consolidated balance sheet and statement of income information as of and for the year ended December 31, 2014 was derived from its audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed by the Company with the Securities and Exchange Commission (“SEC”) (Commission File No. 001-33500) (the “Form 10-K”).
Certain information and notes normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to the rules and regulations of the SEC governing pro forma information. The unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only, in accordance with the adjustments and estimates set forth below, and does not purport to represent the results of operations that actually would have been realized had the Disposition occurred on the respective dates assumed, nor is it necessarily indicative of the Company’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma condensed consolidated financial statements reflect estimates and assumptions that the Company’s management believes to be reasonable.
The unaudited pro forma condensed consolidated financial statements, including the notes thereto, should be read in conjunction with the historical audited consolidated financial statements of the Company for the year ended December 31, 2014 included in the Form10-K.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of December 31, 2014
(in thousands)
|
| | | | | | | | | | | | | |
| | Historical - Pre-Disposition | | Pro Forma
Adjustments for the Disposition | | Notes | | Pro Forma
As Adjusted for the Disposition |
| ASSETS | | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | $ | 684,042 |
| | $ | 32,833 |
| | (A) | | $ | 716,875 |
|
| Accounts receivable, net | 186,371 |
| | — |
| | | | 186,371 |
|
| Inventories | 30,037 |
| | — |
| | | | 30,037 |
|
| Prepaid expenses | 12,800 |
| | — |
| | | | 12,800 |
|
| Deferred tax assets, net | 48,440 |
| | — |
| | | | 48,440 |
|
| Other current assets | 21,322 |
| | — |
| | | | 21,322 |
|
| Assets held for sale | 32,833 |
| | (32,833 | ) | | (B) | | — |
|
| Total current assets | 1,015,845 |
| | — |
| | | | 1,015,845 |
|
| Property and equipment, net | 58,363 |
| | — |
| | | | 58,363 |
|
| Intangible assets, net | 1,437,435 |
| | — |
| | | | 1,437,435 |
|
| Goodwill | 702,713 |
| | — |
| | | | 702,713 |
|
| Deferred tax assets, net, non-current | 75,494 |
| | — |
| | | | 75,494 |
|
| Deferred financing costs | 33,174 |
| | — |
| | | | 33,174 |
|
| Other non-current assets | 15,931 |
| | — |
| | | | 15,931 |
|
| Total assets | $ | 3,338,955 |
| | $ | — |
| | | | $ | 3,338,955 |
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | $ | 25,126 |
| | $ | — |
| | | | $ | 25,126 |
|
| Accrued liabilities | 164,091 |
| | — |
| | | | 164,091 |
|
| Current portion of long-term debt | 9,428 |
| | — |
| | | | 9,428 |
|
| Income taxes payable | 7,588 |
| | 689 |
| | (B) | | 8,277 |
|
| Deferred tax liability, net | 9,430 |
| | — |
| | | | 9,430 |
|
| Deferred revenue | 1,138 |
| | — |
| | | | 1,138 |
|
| Total current liabilities | 216,801 |
| | 689 |
| | | | 217,490 |
|
| Deferred revenue, non-current | 4,499 |
| | — |
| | | | 4,499 |
|
| Long-term debt, less current portion | 1,333,000 |
| | — |
| | | | 1,333,000 |
|
| Deferred tax liability, net, non-current | 375,054 |
| | — |
| | | | 375,054 |
|
| Other non-current liabilities | 38,393 |
| | — |
| | | | 38,393 |
|
| Shareholders’ equity: | | | | | | |
|
|
| Ordinary shares | 6 |
| | — |
| | | | 6 |
|
| Non-voting euro deferred shares | 55 |
| | — |
| | | | 55 |
|
| Capital redemption reserve | 471 |
| | — |
| | | | 471 |
|
| Additional paid-in capital | 1,458,005 |
| | — |
| | | | 1,458,005 |
|
| Accumulated other comprehensive loss | (122,097 | ) | | — |
| | | | (122,097 | ) |
| Retained earnings | 34,704 |
| | (689 | ) | | (B) | | 34,015 |
|
| Total Jazz Pharmaceuticals plc shareholders' equity | 1,371,144 |
| | (689 | ) | | | | 1,370,455 |
|
| Noncontrolling interests | 64 |
| | — |
| | | | 64 |
|
| Total shareholders’ equity | 1,371,208 |
| | (689 | ) | | | | 1,370,519 |
|
| Total liabilities and shareholders’ equity | $ | 3,338,955 |
| | $ | — |
| | | | $ | 3,338,955 |
|
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the year ended December 31, 2014
(in thousands, except per share amounts) |
| | | | | | | | | | | | | |
| | Historical - Pre-Disposition | | Pro Forma
Adjustments for the Disposition | | Notes | | Pro Forma
As Adjusted for the Disposition |
| Revenues: | | | | | | | |
| Product sales, net | $ | 1,162,716 |
| | $ | (26,984 | ) | | (C) | | $ | 1,135,732 |
|
| Royalties and contract revenues | 10,159 |
| | (240 | ) | | (C) | | 9,919 |
|
| Total revenues | 1,172,875 |
| | (27,224 | ) | | | | 1,145,651 |
|
| Operating expenses: | | | | | | | |
| Cost of product sales (excluding amortization of acquired developed technologies and intangible asset impairment) | 117,418 |
| | (10,679 | ) | | (C) | | 106,739 |
|
| Selling, general and administrative | 406,114 |
| | (10,274 | ) | | (C) | | 395,840 |
|
| Research and development | 85,181 |
| | — |
| | | | 85,181 |
|
| Acquired in-process research and development | 202,626 |
| | — |
| | | | 202,626 |
|
| Intangible asset amortization | 126,584 |
| | (8,704 | ) | | (C) | | 117,880 |
|
| Impairment charges | 39,365 |
| | (39,365 | ) | | (C) | | — |
|
| Total operating expenses | 977,288 |
| | (69,022 | ) | | | | 908,266 |
|
| Income from operations | 195,587 |
| | 41,798 |
| | | | 237,385 |
|
| Interest expense, net | (52,713 | ) | | — |
| | | | (52,713 | ) |
| Foreign currency gain | 8,683 |
| | — |
| | | | 8,683 |
|
| Income before income tax provision | 151,557 |
| | 41,798 |
| | | | 193,355 |
|
| Income tax provision | 94,231 |
| | 12,828 |
| | (C) | | 107,059 |
|
| Net income | 57,326 |
| | 28,970 |
| | | | 86,296 |
|
| Net loss attributable to noncontrolling interests, net of tax | (1,061 | ) | | — |
| | | | (1,061 | ) |
| Net income attributable to Jazz Pharmaceuticals plc | $ | 58,387 |
| | $ | 28,970 |
| | | | $ | 87,357 |
|
| | | | | | | | |
| Net income per ordinary share attributable to Jazz Pharmaceuticals plc: | | | | | | | |
| Basic | $ | 0.98 |
| | | | | | $ | 1.46 |
|
| Diluted | $ | 0.93 |
| | | | | | $ | 1.40 |
|
| Weighted-average ordinary shares used in calculating net income per ordinary share attributable to Jazz Pharmaceuticals plc: | | | | | | | |
| Basic | 59,746 |
| | | | | | 59,746 |
|
| Diluted | 62,614 |
| | | | | | 62,614 |
|
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
On March 20, 2015, Jazz Pharmaceuticals Public Limited Company (the “Company”) completed the sale (the “Disposition”) of certain products that the Company originally acquired as part of the Company’s acquisition of EUSA Pharma Inc. and the business related thereto (such products and the related business, the “Disposed Business”) to Essex Bidco Limited, a company controlled by Essex Woodlands (“Essex”). Pursuant to the agreement for the Disposition, the purchase price for the Disposed Business was $34 million, subject to certain adjustments. As of the closing, the Company was entitled to receive approximately $33 million in cash after purchase price adjustments were made prior to the closing. The purchase price is subject to potential further adjustments post-closing. Products in the Disposed Business sold to Essex in the Disposition included Caphosol® (supersaturated calcium phosphate rinse), Collatamp® (lyophilized collagen implant impregnated with the aminoglycoside antibiotic gentamicin), Fomepizole® (fomepizole), Xenazine® (tetrabenazine) and Custodiol® (solution HTK).
The unaudited pro forma condensed consolidated balance sheet at December 31, 2014 gives effect to the Disposition as if it had occurred on December 31, 2014.
The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2014 is presented as if the Disposition was consummated on January 1, 2014. The unaudited pro forma condensed consolidated financial statements presented herein are based on the historical financial statements of the Company after giving effect to the Disposition by applying the assumptions and adjustments described below.
2. Pro Forma Adjustments
Pro forma adjustments are necessary to reflect the impact on the balance sheet as if the Disposition had been consummated as of December 31, 2014 and to reflect the impact on the statement of income as if the Disposition had been consummated on January 1, 2014. The pro forma adjustments included in the unaudited pro forma condensed consolidated financial statements are as follows:
| |
| (A) | To reflect the cash received from the Disposition, net of estimated selling costs. |
| |
| (B) | To remove assets related to the Disposition, which were classified as assets held for sale as of December 31, 2014, from the balance sheet and reflect taxes payable on the Disposition. |
| |
| (C) | To reflect the impact on operating results as if the Disposition had occurred on January 1, 2014. The adjustments include an impairment charge of $39.4 million that was incurred in 2014 to write the carrying value of assets associated with the Disposed Business down to fair value less costs to sell. The pro forma tax benefit adjustment primarily relates to the release of a deferred tax liability, recognized when the assets were initially acquired and recognized at fair value, on impairment. |
