Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Feb. 02, 2015 | |
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Catalent, Inc. | |
Entity Central Index Key | 1596783 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding (shares) | 123,817,981 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||||
Net revenue | $455.80 | $440.70 | $874.10 | $855 |
Cost of sales | 299.7 | 303.3 | 592.7 | 598.4 |
Gross margin | 156.1 | 137.4 | 281.4 | 256.6 |
Selling, general and administrative expenses | 88.1 | 87.5 | 169.5 | 168.6 |
Impairment Charges And Gain Loss On Sale Of Assets | 3.5 | 0 | 3.5 | 0 |
Restructuring and other | 2.1 | 5.4 | 3.5 | 8.4 |
Operating earnings/(loss) | 62.4 | 44.5 | 104.9 | 79.6 |
Interest expense, net | 23.9 | 41.5 | 59.4 | 82.4 |
Nonoperating Income (Expense) | 3.6 | 1.4 | -37.7 | 2.4 |
Earnings/(loss) from continuing operations before income taxes | 42.1 | 4.4 | 7.8 | -0.4 |
Income tax expense/(benefit) | -4.1 | 23.3 | -18.1 | 16.7 |
Earnings/(loss) from continuing operations | 46.2 | -18.9 | 25.9 | -17.1 |
Net earnings/(loss) from discontinued operations, net of tax | -0.2 | -0.6 | 0.2 | -1 |
Net earnings/(loss) | 46 | -19.5 | 26.1 | -18.1 |
Less: Net earnings/(loss) attributable to noncontrolling interest, net of tax | -0.5 | -0.3 | -0.9 | -0.4 |
Net earnings/(loss) attributable to Catalent | 46.5 | -19.2 | 27 | -17.7 |
Earnings/(loss) from continuing operations less net earnings (loss) attributable to noncontrolling interest | $46.70 | ($18.60) | $26.80 | ($16.70) |
Income (Loss) from Continuing Operations, Per Basic Share | $0.38 | ($0.25) | $0.23 | ($0.22) |
Earnings Per Share, Basic | $0.37 | ($0.26) | $0.24 | ($0.24) |
Income (Loss) from Continuing Operations, Per Diluted Share | $0.37 | ($0.25) | $0.23 | ($0.22) |
Earnings Per Share, Diluted | $0.37 | ($0.26) | $0.23 | ($0.24) |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income / (Loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Other comprehensive income/(loss), net of tax | ||||
Net earnings/(loss) | $46 | ($19.50) | $26.10 | ($18.10) |
Foreign currency translation adjustments | -59.8 | -10.2 | -113.6 | 10.2 |
Pension and Other Post-Retirement adjustments | 0.3 | 0.2 | 0.7 | 0.4 |
Deferred compensation | 0.4 | 0.7 | 0.2 | 1.2 |
Net current period other comprehensive income (loss) | -59.1 | -9.3 | -112.7 | 11.8 |
Comprehensive income/(loss) | -13.1 | -28.8 | -86.6 | -6.3 |
Comprehensive income/(loss) attributable to noncontrolling interest | -0.5 | -0.3 | -0.9 | -0.4 |
Comprehensive income/(loss) attributable to Catalent | ($12.60) | ($28.50) | ($85.70) | ($5.90) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | |
In Millions, unless otherwise specified | |||
Current assets: | |||
Cash and cash equivalents | $84.10 | $74.40 | |
Trade receivables, net | 336.4 | 403.7 | |
Inventories | 144.3 | 134.8 | |
Prepaid expenses and other | 72.7 | 74.6 | |
Total current assets | 637.5 | 687.5 | |
Property, plant, and equipment, net | 865.1 | 873 | |
Other assets: | |||
Goodwill | 1,082.40 | 1,097.10 | [1] |
Other intangibles, net | 392.7 | 357.6 | |
Deferred income taxes | 30.9 | 26.3 | |
Other | 29.5 | 48.7 | |
Total assets | 3,038.10 | 3,090.20 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY/(DEFICIT) | |||
Current portion of long-term obligations and other short-term borrowings | 28.8 | 25.2 | |
Accounts payable | 118.4 | 148.1 | |
Other accrued liabilities | 199.3 | 279.7 | |
Total current liabilities | 346.5 | 453 | |
Long-term Debt and Capital Lease Obligations | 1,905.40 | 2,685.40 | |
Pension liability | 143.4 | 154.7 | |
Deferred income taxes | 104.4 | 103.2 | |
Other liabilities | 42.1 | 61.2 | |
Commitment and contingencies (see Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 3.9 | 4.5 | |
Common stock | 1.2 | 0.7 | |
Preferred Stock, Value, Outstanding | 0 | 0 | |
Additional paid in capital | 1,981.10 | 1,031.40 | |
Accumulated deficit | -1,352.10 | -1,379.10 | |
Accumulated other comprehensive income/(loss) | -136.9 | -24.2 | |
Total Shareholders' equity/(deficit) | 493.3 | -371.2 | |
Noncontrolling interest | -0.9 | -0.6 | |
Total Catalent Shareholders' equity/(deficit) | 492.4 | -371.8 | |
Total liabilities, redeemable noncontrolling interest and Shareholders' equity/(deficit) | $3,038.10 | $3,090.20 | |
[1] | The opening balance is reflective of historical impairment charges related to the Medication Delivery Solutions segment of approximately $158.0 million. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $0.01 | $0.01 |
Common Stock, Shares Authorized | 1,000,000,000 | 84,000,000 |
Common stock, shares issued (shares) | 123,813,644 | 74,821,348 |
Preferred Stock, Shares Authorized | 100,000,000 | 0 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Shareholder's Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] |
In Millions, except Share data, unless otherwise specified | ||||||
Beginning Balance at Jun. 30, 2014 | ($371.80) | $0.70 | $1,031.40 | ($1,379.10) | ($24.20) | ($0.60) |
Common Stock, Shares, Outstanding at Jun. 30, 2014 | 74,821,300 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity Contribution, Number of Shares | 48,992,300 | |||||
Equity contribution | 945.9 | 0.5 | 945.4 | |||
Equity compensation | 4.3 | 4.3 | ||||
Net Income (Loss) Attributable to Parent | 27 | 27 | ||||
Net Income (Loss) Attributable to Noncontrolling Interest | -0.3 | |||||
Net earnings/(loss) | 26.7 | |||||
Other comprehensive income/(loss), net of tax | -112.7 | -112.7 | ||||
Ending Balance at Dec. 31, 2014 | $492.40 | $1.20 | $1,981.10 | ($1,352.10) | ($136.90) | ($0.90) |
Common Stock, Shares, Outstanding at Dec. 31, 2014 | 123,813,600 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net earnings/(loss) | $26.10 | ($18.10) | ||
Net earnings/(loss) from discontinued operations | 0.2 | -1 | ||
Earnings/(loss) from continuing operations | 25.9 | -17.1 | ||
Adjustments to reconcile (loss)/earnings from continued operations to net cash from operations: | ||||
Depreciation and amortization | 70.2 | 73.8 | ||
Non-cash foreign currency transaction (gain)/loss, net | -12.4 | -7.8 | ||
Amortization and write off of debt financing costs | 13.8 | 6.1 | ||
Asset Impairment Charges And Gain Loss On Sale Of Assets | 3.5 | 0 | ||
Business Combination, Bargain Purchase, Gain Recognized, Amount Net of Tax | 10.2 | [1] | 0 | [1] |
Reclassification Of Call Premium Payment | 12.6 | 0 | ||
Equity compensation | 4.3 | 2.3 | ||
Increase (Decrease) in Deferred Income Taxes | 25.7 | 3.9 | ||
Provision for bad debts and inventory | 7.2 | 3.9 | ||
Change in operating assets and liabilities: | ||||
Decrease/(increase) in trade receivables | 49.8 | 47.7 | ||
Decrease/(increase) in inventories | -25.2 | -10.9 | ||
Increase/(decrease) in accounts payable | -21.5 | -35.5 | ||
Other accrued liabilities and operating items, net | -92.1 | -17.1 | ||
Net cash provided by/(used in) operating activities from continuing operations | 0.2 | 41.5 | ||
Net cash provided by/(used in) operating activities from discontinued operations | 0.2 | -1.1 | ||
Net cash provided by/(used in) operating activities | 0.4 | 40.4 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Acquisition of property and equipment and other productive assets | -71.3 | -39.8 | ||
Proceeds from sale of property and equipment | 0 | 0.8 | ||
Payment for acquisitions, net | -125.1 | -51 | ||
Net cash provided by/(used in) investing activities from continuing operations | -196.4 | -90 | ||
Net cash provided by/(used in) investing activities from discontinued operations | 0 | 4 | ||
Net cash provided by/(used in) investing activities | -196.4 | -86 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Net change in short-term borrowings | 6 | 15 | ||
Proceeds from borrowing, net | 150.4 | 0.7 | ||
Payments related to long-term obligations | -869.3 | -15.2 | ||
Call Premium Paid For Redemption Of Debt | 12.6 | 0 | ||
Equity contribution/(redemption) | 948.8 | 0.2 | ||
Payments for Repurchase of Common Stock | -0.7 | 0 | ||
Net cash (used in)/provided by financing activities from continuing operations | 222.6 | 0.7 | ||
Net cash (used in)/provided by financing activities from discontinued operations | 0 | 0 | ||
Net cash (used in)/provided by financing activities | 222.6 | 0.7 | ||
Effect of foreign currency on cash | -16.9 | 2.7 | ||
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS | 9.7 | -42.2 | ||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 74.4 | 106.4 | ||
CASH AND EQUIVALENTS AT END OF PERIOD | 84.1 | 64.2 | ||
SUPPLEMENTARY CASH FLOW INFORMATION: | ||||
Interest paid | 67 | 77.7 | ||
Income taxes paid, net | $18.10 | $12.40 | ||
[1] | Included within Other (income) / expense are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company's core operating results. During the three month period ended December 31, 2014, the Company recorded a gain of $3.2 million on the re-measurement of a cost investment in an entity which is now a wholly owned subsidiary. During the six month period ended December 31, 2014, the Company recorded the aforementioned gain and a $7.0 million bargain purchase gain for an acquisition completed in July 2014. |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Business | |
Catalent, Inc. (“Catalent” or the “Company”) directly and wholly owns PTS Intermediate Holdings LLC (“Intermediate Holdings”). Intermediate Holdings directly and wholly owns Catalent Pharma Solutions, Inc. (“Operating Company”). The financial results of Catalent are solely comprised of the financial results of Operating Company and its subsidiaries on a consolidated basis. | |
In July 2014, the Company’s board of directors and holders of the requisite number of outstanding shares of its capital stock approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 70-for-1 stock split of its outstanding common stock (the “stock split”). The stock split became effective on July 17, 2014 upon the filing of the Company’s Certificate of Amendment of the Amended and Restated Certificate of Incorporation with the Delaware Secretary of State. On the effective date of the stock split, (i) each outstanding share of common stock was increased to seventy shares of common stock, (ii) the number of shares of common stock issuable under each outstanding option to purchase common stock was proportionately increased on a one-to-seventy basis, (iii) the exercise price of each outstanding option to purchase common stock was proportionately decreased on a one-to-seventy basis, and (iv) the number of shares underlying each restricted stock unit was proportionately increased on a one-to-seventy basis. All of the share and per share information referenced throughout the financial statements and notes to the financial statements have been retroactively adjusted to reflect this stock split. | |
On August 5, 2014, the Company completed an initial public offering (the "IPO") of 42.5 million shares of its common stock for an initial price of $20.50 per share for total proceeds, before underwriting discounts and commissions and other offering expenses of approximately $871.3 million and proceeds net of underwriters discount and commissions of approximately $828 million. The shares offered and sold in the IPO were registered under the Securities Act pursuant to the Company's Registration Statement on Form S-1 (File No. 333-193542), which was declared effective by the SEC on July 30, 2014. The proceeds raised were used to pay an advisory agreement termination fee of $29.8 million to Blackstone and certain other existing owners recorded within other (income)/expense, net on the Consolidated Statements of Operations, redeem the outstanding Senior Subordinated Notes, and redeem the outstanding Senior Notes. The remaining proceeds were used to repay portions of the unsecured term loan. The Company's common stock began trading on the New York Stock Exchange under the symbol "CTLT" as of July 31, 2014. On September 9, 2014, Morgan Stanley and J.P. Morgan, as representatives of the underwriters of Catalent’s IPO, purchased an additional 6.4 million shares of Catalent’s common stock from Catalent at the initial public offering price of $20.50 per share less the underwriting discount pursuant to an option granted to the underwriters at the time of the IPO. The net proceeds received by the Company were $124.2 million and were subsequently used for debt reduction and general corporate purposes. Refer to Note 5 for further discussion regarding debt repayments. | |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending June 30, 2015. The consolidated balance sheet at June 30, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014 filed with the Securities and Exchange Commission. | |
Noncontrolling interest is included within the equity section in the consolidated balance sheets. Redeemable noncontrolling interest has been classified as temporary equity and is therefore reported outside of permanent equity on the consolidated balance sheets at the greater of the initial carrying amount adjusted for the noncontrolling interest's share of net earnings/(loss) or its redemption value. The Company presents the amount of consolidated net earnings/(loss) that is attributable to Catalent and the noncontrolling interest in the consolidated statements of operations. Furthermore, the Company discloses the amount of comprehensive income that is attributable to Catalent and the noncontrolling interest in the consolidated statements of comprehensive income/(loss). | |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, inventory and long-lived asset valuation, goodwill and other intangible asset valuation and impairment, equity-based compensation, income taxes, derivative financial instruments and pension plan asset and liability valuation. Actual amounts may differ from these estimated amounts. | |
Foreign Currency Translation | |
The financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizing period-end exchange rates. The currency fluctuations related to certain long-term inter-company loans deemed to not be repayable in the foreseeable future have been recorded within cumulative translation adjustment, a component of other comprehensive income/(loss). In addition, the currency fluctuation associated with the portion of the Company’s euro-denominated debt designated as a net investment hedge is included as a component of other comprehensive income/(loss). Foreign currency transaction gains and losses calculated by utilizing weighted average exchange rates for the period are included in the consolidated statements of operations in the other (income) expense, net line item. Foreign currency translation gains and losses generated from inter-company loans that are long-term in nature, but may be repayable in the foreseeable future, are also recorded within the other (income)/expense, net line item on the consolidated statements of operations. | |
Revenue Recognition | |
In accordance with Codification Standard ASC 605 Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. In cases where the Company has multiple contracts with the same customer, the Company evaluates those contracts to assess if the contracts are linked or are separate arrangements. Factors the Company considers include the timing of negotiation, interdependency with other contracts or elements and payment terms. The Company and its customers generally view each contract discussion as a separate arrangement. | |
Manufacturing and packaging service revenue is recognized upon delivery of the product in accordance with the terms of the contract, which specify when transfer of title and risk of loss occurs. Some of the Company’s manufacturing contracts with its customers have annual minimum purchase requirements. At the end of the contract year, revenue is recognized for the unfilled purchase obligation in accordance with the contract terms. Development service contracts generally take the form of a fee-for-service arrangement. After the Company has evidence of an arrangement, the price is determinable and there is a reasonable expectation regarding payment, the Company recognizes revenue at the point in time the service obligation is completed and accepted by the customer. Examples of output measures include a formulation report, analytical and stability testing, clinical batch production or packaging and the storage and distribution of a customer’s clinical trial material. Development service revenue is primarily driven by the Company’s Development and Clinical Services segment. | |
Arrangements containing multiple elements, including service arrangements, are accounted for in accordance with the provisions of ASC 605-25 Revenue Recognition: Multiple-Element Arrangements. The Company determines the separate units of account in accordance with ASC 605-25. If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price. In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price. | |
Goodwill | |
The Company accounts for purchased goodwill and intangible assets with indefinite lives in accordance with ASC 350 Goodwill, Intangible and Other Assets. Under ASC 350, goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment at least annually. The Company's annual goodwill impairment test was conducted as of April 1, 2014. The Company assesses goodwill for possible impairment by comparing the carrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative market information and other factors to corroborate the discounted cash flow results. | |
Property and Equipment and Other Definite Lived Intangible Assets | |
Property and equipment are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, including capital lease assets that are amortized over the shorter of their useful lives or the terms of the respective leases. The Company generally uses the following ranges of useful lives for its property and equipment categories: buildings and improvements - 5 to 50 years; machinery and equipment - 3 to 10 years; and furniture and fixtures - 3 to 7 years. Depreciation expense was $23.6 million and $47.3 million for the three and six months ended December 31, 2014 and $26.8 million and $53.0 million for the three and six months ended December 31, 2013. Depreciation expense includes amortization of assets related to capital leases. The Company charges repairs and maintenance costs to expense as incurred. The amount of capitalized interest was immaterial for all periods presented. | |
Intangible assets with finite lives, primarily including customer relationships and patents and trademarks continue to be amortized over their useful lives. The Company evaluates the recoverability of its other long-lived assets, including amortizing intangible assets, if circumstances indicate impairment may have occurred pursuant to ASC 360 Property, Plant and Equipment. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an un-discounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value through a charge to the consolidated statements of operations. Fair value is determined based on assumptions the Company believes marketplace participants would utilize and comparable marketplace information in similar arm's length transactions. The Company recorded an impairment charge of $3.5 million for the three and six months ended December 31, 2014. The Company did not record an impairment charge for the three and six months ended December 31, 2013. | |
Research and Development Costs | |
The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general and administrative expenses. Such research and development costs included in selling, general and administrative expenses amounted to $2.9 million and $5.7 million for the three and six months ended December 31, 2014 and $4.5 million and $7.9 million for the three and six months ended December 31, 2013. Costs incurred in connection with research and development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $10.5 million and $19.3 million for the three and six months ended December 31, 2014 and $8.4 million and $15.8 million for the three and six months ended December 31, 2013. | |
Earnings / (Loss) Per Share | |
The Company reports net earnings/(loss) per share pursuant to ASC 260 Earnings per Share. Under ASC 260, basic earnings per share, which excludes dilution, is computed by dividing net earnings or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could be exercised or converted into common shares, and is computed by dividing net earnings or loss available to common stockholders by the weighted average of common shares outstanding plus the dilutive potential common shares. Diluted earnings per share includes in-the-money stock options, restricted stock units, and restricted stock using the treasury stock method. During a loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect and therefore, these instruments are excluded from the computation of dilutive earnings per share. | |
Equity-Based Compensation | |
The Company accounts for its equity-based compensation awards pursuant to ASC 718 Compensation-Stock Compensation. ASC 718 requires companies to recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restricted stock units. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over the applicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, the expected dividends on the underlying shares and the risk-free interest rate. | |
The terms of the Company’s equity-based compensation plans permit shares that are issued upon an employee's exercise of an option to be withheld through a net settlement transaction as a means of meeting tax withholding requirements. | |
Recent Financial Accounting Standards | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). The new standard will supersede nearly all existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the standard creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevant facts and circumstances. The five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations and recognize revenue when each performance obligation is satisfied. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. The standard allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoption where the standard is applied only to the most current period presented in the financial statements. Early adoption is not permitted. Catalent is currently evaluating the impact of this standard on the Company's consolidated results of operations and financial position. |
Business_Combination_Business_
Business Combination Business Combination | 6 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | BUSINESS COMBINATIONS |
During the three month period ended December 31, 2014, the Company completed two acquisitions which were immaterial, individually and in the aggregate, to the overall consolidated financial position and results of operations of the Company. In October 2014, the Company acquired the remaining shares of Redwood Bioscience Inc., and the SMARTag Antibody-Drug Conjugate (ADC) technology platform. The acquired business is based in the U.S. and will be included in the Medication Delivery Solutions segment. Additionally, in November 2014, the Company acquired 100% of the shares of MTI Pharma Solutions, Inc. (Micron Technologies), a company specializing in particle size reduction (micronization), milling and analytical contract services. The acquired business is based in the U.S. and the U.K and will be included in the Developmental and Clinical services segment. | |
The Company's consolidated balance sheet as of December 31, 2014 included a preliminary fair value allocation for these acquisitions as the Company is in the process of finalizing the valuation of the individual assets acquired and liabilities assumed. The preliminary fair value allocation was based on the best estimate by management. The fair value allocation is expected to be completed upon finalization of an independent appraisal over the next several months, but no later than one year from the acquisition dates. Aggregate purchase consideration for both acquisitions totaled $111.6 million. As a result of the preliminary fair value allocation, the Company recognized intangible assets of $60 million; which was comprised of $38 million of Customer Relationships and $22 million of Core Technology. The remainder of fair value was allocated to tangible assets acquired and goodwill. |
Goodwill
Goodwill | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill Disclosure [Abstract] | ||||||||||||||||
Goodwill | GOODWILL | |||||||||||||||
The following table summarizes the changes between June 30, 2014 and December 31, 2014 in the carrying amount of goodwill in total and by reporting segment: | ||||||||||||||||
(Dollars in millions) | Oral | Medication | Development | Total | ||||||||||||
Technologies | Delivery | & Clinical | ||||||||||||||
Solutions | Services | |||||||||||||||
Balance at June 30, 2014 (1) | $ | 891.8 | $ | — | $ | 205.3 | $ | 1,097.10 | ||||||||
Additions/(impairments) (2) | — | 20 | 41.7 | 61.7 | ||||||||||||
Foreign currency translation adjustments | (61.2 | ) | — | (15.2 | ) | (76.4 | ) | |||||||||
Balance at December 31, 2014 | $ | 830.6 | $ | 20 | $ | 231.8 | $ | 1,082.40 | ||||||||
-1 | The opening balance is reflective of historical impairment charges related to the Medication Delivery Solutions segment of approximately $158.0 million. | |||||||||||||||
-2 | Acquired goodwill of $61.7 million was generated from acquisitions in the Medication Delivery Solutions and Development and Clinical Services segments. | |||||||||||||||
No goodwill impairment charges were required during the current or comparable prior year period. When required, impairment charges are recorded within the consolidated statements of operations as impairment charges and (gain)/loss on sale of assets. |
Definite_Lived_LongLived_Asset
Definite Lived Long-Lived Assets | 6 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Definite Lived Long-Lived Assets | DEFINITE LIVED LONG-LIVED ASSETS | |||||||||||||||||||||||
The Company’s definite lived long-lived assets include property, plant and equipment as well as other intangible assets with definite lives. Refer to Note 17 Supplemental Balance Sheet Information for details related to property, plant and equipment. | ||||||||||||||||||||||||
The details of other intangible assets subject to amortization as of December 31, 2014 and June 30, 2014, are as follows: | ||||||||||||||||||||||||
(Dollars in millions) | Weighted Average Life | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | ||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Amortized intangibles: | ||||||||||||||||||||||||
Core technology | 18 years | $ | 182.1 | $ | (53.7 | ) | $ | 128.4 | ||||||||||||||||
Customer relationships | 14 years | 258 | (72.8 | ) | 185.2 | |||||||||||||||||||
Product relationships | 12 years | 223.1 | (144.0 | ) | 79.1 | |||||||||||||||||||
Total intangible assets | $ | 663.2 | $ | (270.5 | ) | $ | 392.7 | |||||||||||||||||
(Dollars in millions) | Weighted Average Life | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | ||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
30-Jun-14 | ||||||||||||||||||||||||
Amortized intangibles: | ||||||||||||||||||||||||
Core technology | 20 years | $ | 150.2 | $ | (53.3 | ) | $ | 96.9 | ||||||||||||||||
Customer relationships | 14 years | 234.6 | (68.0 | ) | 166.6 | |||||||||||||||||||
Product relationships | 12 years | 237.6 | (143.5 | ) | 94.1 | |||||||||||||||||||
Total intangible assets | $ | 622.4 | $ | (264.8 | ) | $ | 357.6 | |||||||||||||||||
Amortization expense was $11.6 million and $22.9 million for the three and six months ended December 31, 2014 and $10.5 million and $20.8 million for the three and six months ended December 31, 2013, respectively. Future amortization expense is estimated to be: | ||||||||||||||||||||||||
(Dollars in millions) | Remainder | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||
Fiscal 2015 | ||||||||||||||||||||||||
Amortization expense | $ | 23.7 | $ | 47.4 | $ | 46.7 | $ | 46.6 | $ | 41.2 | $ | 26.3 | ||||||||||||
The Company recorded an impairment charge of $3.5 million for the three and six months ended December 31, 2014. The Company did not record an impairment charge for the three and six months ended December 31, 2013. |
LongTerm_Obligations_and_Other
Long-Term Obligations and Other Short-Term Borrowings | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Long-Term Obligations and Other Short-Term Borrowings | LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS | |||||||||||||||
Long-term obligations and other short-term borrowings consist of the following at December 31, 2014 and June 30, 2014: | ||||||||||||||||
(Dollars in millions) | Maturity | December 31, | June 30, | |||||||||||||
2014 | 2014 | |||||||||||||||
Senior Secured Credit Facilities | ||||||||||||||||
Term loan facility dollar-denominated | May-21 | 1,477.30 | 1,383.90 | |||||||||||||
Term loan facility euro-denominated | May-21 | 389.1 | 338.6 | |||||||||||||
9 3/4 % Senior Subordinated euro-denominated Notes | Apr-17 | — | 293.9 | |||||||||||||
7 7/8 % Senior Notes | Oct-18 | — | 348.7 | |||||||||||||
Senior Unsecured Term Loan Facility | Dec-17 | — | 274.3 | |||||||||||||
$200.0 million Revolving Credit Facility | May-19 | — | — | |||||||||||||
Capital lease obligations | 2015 to 2032 | 59 | 64 | |||||||||||||
Other obligations | 2015 to 2018 | 8.8 | 7.2 | |||||||||||||
Total | 1,934.20 | 2,710.60 | ||||||||||||||
Less: Current portion of long-term obligations and other short-term borrowings | 28.8 | 25.2 | ||||||||||||||
Long-term obligations, less current portion | $ | 1,905.40 | $ | 2,685.40 | ||||||||||||
Redemption of Notes and Unsecured Term Loan Prepayment | ||||||||||||||||
On July 29, 2014, the Company provided notice of its election to redeem the entire $350.0 million aggregate principal amount outstanding of the Senior Notes. The Senior Notes were redeemed on August 28, 2014 at a redemption price of 101.5% of their principal amount plus accrued and unpaid interest. The redemption was funded with proceeds from the IPO. In connection with the redemption the Company recorded $5.3 million in expense related to the call premium and expensed $5.9 million of unamortized debt discount and deferred financing costs, both in other (income) / expense, net in the consolidated statements of operations. | ||||||||||||||||
On August 5, 2014, the Company provided notice of its election to redeem the entire €225.0 million aggregate principal amount outstanding of the Senior Subordinated Notes. The Senior Subordinated Notes were redeemed on September 4, 2014 at a redemption price of 101.625% of their principal amount plus accrued and unpaid interest. The redemption was funded with proceeds from the IPO. In connection with the redemption the Company recorded $4.5 million in expense related to the call premium and expensed $4.0 million of unamortized debt discount and deferred financing costs, both in other (income) / expense, net in the consolidated statements of operations. | ||||||||||||||||
On August 6, 2014, the Company paid $114.5 million of the outstanding borrowings under the unsecured term loans with proceeds from the IPO. On September 12, 2014, the Company repaid $120.0 million of the outstanding borrowings under the unsecured term loans with proceeds from the additional shares purchased by the representatives of the underwriters in connection with the IPO. In connection with the debt payments, the Company expensed $0.9 million of unamortized debt discount and deferred financing costs in other (income) / expense, net in the consolidated statements of operations. | ||||||||||||||||
On December 1, 2014, the Company entered into Amendment No. 1 to the Amended and Restated Credit Agreement, originally dated May 20, 2014 to provide additional senior secured financing of incremental Dollar and Euro denominated term loan facilities of $100 million and €72.8 million ($91 million), respectively. The incremental term loans have substantially similar terms as Catalent's existing term loan facilities. The proceeds of the borrowing were primarily used to pay the remaining $40.5 million outstanding on the unsecured term loans, fund acquisitions completed in the second quarter of $111.6 million and general corporate purposes. The Company incurred approximately $2.8 million in financing costs, of which $1.2 million was recorded in other (income) / expense, net in the consolidated statement of operations. | ||||||||||||||||
Debt Covenants | ||||||||||||||||
The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s (and the Company’s restricted subsidiaries’) ability to incur additional indebtedness or issue certain preferred shares; create liens on assets; engage in mergers and consolidations; sell assets; pay dividends and distributions or repurchase capital stock; repay subordinated indebtedness; engage in certain transactions with affiliates; make investments, loans or advances; make certain acquisitions; and in the case of the Company’s Credit Agreement, enter into sale and leaseback transactions, amend material agreements governing the Company’s subordinated indebtedness and change the Company’s lines of business. | ||||||||||||||||
The Credit Agreement also contains change of control provisions and certain customary affirmative covenants and events of default. The revolving credit facility requires compliance with a Net Leverage covenant when there is a 30% or more draw outstanding at a period end. As of December 31, 2014, the Company was in compliance with all material covenants related to its long-term obligations. | ||||||||||||||||
Fair Value of Debt Measurements | ||||||||||||||||
The estimated fair value of the long-term debt, which is considered a Level 2 liability, is based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities and considers collateral, if any. The carrying amounts and the estimated fair values of financial instruments as of December 31, 2014 and June 30, 2014, are as follows: | ||||||||||||||||
31-Dec-14 | 30-Jun-14 | |||||||||||||||
(Dollars in millions) | Carrying | Estimated Fair | Carrying | Estimated Fair | ||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt and other | $ | 1,934.20 | $ | 1,976.50 | $ | 2,710.60 | $ | 2,680.20 | ||||||||
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE | |||||||||||||||
The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, 2014 and 2013 are as follows (in millions, except per share data): | ||||||||||||||||
Three months ended December 31, | Six months ended December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Earnings / (loss) from continuing operations less net income / (loss) attributable to noncontrolling interest | $ | 46.7 | $ | (18.6 | ) | $ | 26.8 | $ | (16.7 | ) | ||||||
Earnings / (loss) from discontinued operations | (0.2 | ) | (0.6 | ) | 0.2 | (1.0 | ) | |||||||||
Net earnings / (loss) attributable to Catalent | $ | 46.5 | $ | (19.2 | ) | $ | 27 | $ | (17.7 | ) | ||||||
Weighted average shares outstanding | 124,102,662 | 75,039,060 | 114,819,023 | 75,027,142 | ||||||||||||
Dilutive securities issuable-stock plans | 1,851,584 | — | 1,851,584 | — | ||||||||||||
Total weighted average diluted shares outstanding | 125,954,246 | 75,039,060 | 116,670,607 | 75,027,142 | ||||||||||||
Basic earnings per share of common stock: | ||||||||||||||||
Earnings / (loss) from continuing operations | $ | 0.38 | $ | (0.25 | ) | $ | 0.23 | $ | (0.22 | ) | ||||||
Earnings / (loss) from discontinued operations | (0.01 | ) | (0.01 | ) | 0.01 | (0.02 | ) | |||||||||
Net earnings / (loss) attributable to Catalent | $ | 0.37 | $ | (0.26 | ) | $ | 0.24 | $ | (0.24 | ) | ||||||
Diluted earnings per share of common stock-assuming dilution: | ||||||||||||||||
Earnings / (loss) from continuing operations | $ | 0.37 | $ | (0.25 | ) | $ | 0.23 | $ | (0.22 | ) | ||||||
Earnings / (loss) from discontinued operations | — | (0.01 | ) | — | (0.02 | ) | ||||||||||
Net earnings / (loss) attributable to Catalent | $ | 0.37 | $ | (0.26 | ) | $ | 0.23 | $ | (0.24 | ) | ||||||
The computation of diluted earnings per share for the three and six months ended December 31, 2014 excludes the effect of 2.2 million shares potentially issuable pursuant to awards granted under the 2007 Stock Incentive Plan and the 2014 Omnibus Incentive Plan, because the vesting provisions of those awards specify performance or market-based conditions that had not been met as of the period end. The computation of diluted earnings per share for the three months ended December 31, 2013 excludes the maximum effect of the potential common shares issuable under the 2007 Stock Incentive Plan of approximately 6.6 million shares, and excludes restricted share awards of 0.2 million shares, because the Company had a net loss for the period and the effect would therefore be anti-dilutive. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 6 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
Risk Management Objective of Using Derivatives | |
The Company is exposed to fluctuations in the applicable exchange rate on its investments in foreign operations. While the Company does not actively hedge against changes in foreign currency, the Company has mitigated the exposure of its investments in its European operations by denominating a portion of its debt in euros. At December 31, 2014, the Company had euro-denominated debt outstanding of $389.1 million that qualifies as a hedge of a net investment in foreign operations. For non-derivatives designated and qualifying as net investment hedges, the effective portion of the translation gains or losses are reported in accumulated other comprehensive income/(loss) as part of the cumulative translation adjustment. For the three and six months ended December 31, 2014, the Company recorded an unrealized foreign exchange gain of $4.4 million and an unrealized foreign exchange gain of $15.2 million, respectively, within cumulative translation adjustment. For the three and six months ended December 31, 2013, the Company recorded an unrealized foreign exchange loss of $4.0 million and an unrealized foreign exchange loss of $15.4 million, respectively, within cumulative translation adjustment. The net accumulated gain of this net investment as of December 31, 2014 included within other comprehensive income/(loss) was approximately $64.7 million. | |
For the three and six months ended December 31, 2014, the Company recognized an unrealized foreign exchange gain of $9.6 million and an unrealized foreign exchange gain of $30.8 million, respectively, in the consolidated statement of operations related to a portion of its euro-denominated debt not designated as a net investment hedge. For the three and six months ended December 31, 2013, the Company recorded an unrealized foreign exchange loss of $2.6 million and an unrealized foreign exchange loss of $10.3 million, respectively. | |
Amounts are reclassified out of accumulated other comprehensive income/(loss) into earnings when the entity to which the gains and losses reside is either sold or substantially liquidated. |
Income_Taxes
Income Taxes | 6 Months Ended | |||
Dec. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ||||
Income Taxes | INCOME TAXES | |||
The Company accounts for income taxes in accordance with the provision of ASC 740 Income Taxes. Generally, fluctuations in the effective tax rate are primarily due to changes in U.S. and non-U.S. pretax income resulting from the Company’s business mix and changes in the tax impact of special items and other discrete tax items, which may have unique tax implications depending on the nature of the item. Such discrete items include, but are not limited to, changes in foreign statutory tax rates, the amortization of certain assets and the tax impact of changes in its ASC 740 unrecognized tax benefit reserves. In the normal course of business, the Company is subject to examination by various taxing authorities throughout the world, including such major jurisdictions as the United States, Germany, France, and the United Kingdom. The Company is no longer subject to non-U.S. income tax examinations for years prior to 2005. Under the terms of the purchase agreement related to the 2007 acquisition, the Company is indemnified by its former owner for tax liabilities that may arise in the future that relate to tax periods prior to April 10, 2007. The indemnification agreement includes, among other taxes, any and all federal, state and international income-based taxes as well as related interest and penalties. As of December 31, 2014 and June 30, 2014, approximately $2.2 million and $2.4 million, respectively, of unrecognized tax benefit is subject to indemnification by the Company's former owner. | ||||
ASC 740 includes guidance on the accounting for uncertainty in income taxes recognized in the financial statements. This standard also provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeal or litigation process, based on the technical merits. As of December 31, 2014, the Company had a total of $54.6 million of unrecognized tax benefits. A reconciliation of its reserves for uncertain tax positions, excluding accrued interest and penalties, for December 31, 2014 is as follows: | ||||
(Dollars in millions) | ||||
Balance at June 30, 2014 | $ | 60.6 | ||
Additions for tax positions of prior years | 0.5 | |||
Reductions for tax positions of prior years | (6.5 | ) | ||
Balance at December 31, 2014 | $ | 54.6 | ||
As of December 31, 2014 and June 30, 2014, the Company had a total of $59.6 million and $65.7 million, respectively, of uncertain tax positions (including accrued interest and penalties). As of these dates, $39.5 million and $41.4 million, respectively, represent the amount of unrecognized tax benefits, which, if recognized, would favorably affect the effective income tax rate. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2014 and June 30, 2014, the Company has approximately $5.0 million and $5.1 million, respectively, of accrued interest and penalties related to uncertain tax positions. As of these dates, the portion of such interest and penalties subject to indemnification by its former owner is $2.1 million and $2.0 million, respectively. |
Employee_Retirement_Benefit_Pl
Employee Retirement Benefit Plans | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||||||||||||||
Employee Retirement Benefit Plans | EMPLOYEE RETIREMENT BENEFIT PLANS | |||||||||||||||
Components of the Company’s net periodic benefit costs are as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||
Service cost | $ | 0.7 | $ | 0.7 | $ | 1.4 | $ | 1.4 | ||||||||
Interest cost | 2.9 | 3.1 | 6 | 6.1 | ||||||||||||
Expected return on plan assets | (2.7 | ) | (2.6 | ) | (5.4 | ) | (5.1 | ) | ||||||||
Amortization (1) | 0.5 | 0.3 | 1 | 0.6 | ||||||||||||
Net amount recognized | $ | 1.4 | $ | 1.5 | $ | 3 | $ | 3 | ||||||||
-1 | Amount represents the amortization of unrecognized actuarial gains/(losses). | |||||||||||||||
The Company recorded $39.5 million in obligations related to its withdrawal from a multi-employer pension plan related to a former commercial packaging site, a clinical services site and a former printed components operation. The estimated discounted value of the projected contributions related to these plans is $39.6 million as of December 31, 2014 and $39.6 million as of June 30, 2014. The annual cash impact associated with the Company's long-term obligation approximates $1.7 million per year. Refer to Note 15 to the Consolidated Financial Statements for further discussion. |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS |
Advisor Transaction and Management Fees | |
The Company entered into a transaction and advisory fee agreement with affiliates of Blackstone and certain other investors in BHP PTS Holdings L.L.C. (the “Investors”), the investment entity controlled by affiliates of Blackstone that was formed in connection with the Investors' investment in Catalent. The Company historically paid an annual sponsor advisory fee to Blackstone and the Investors for certain monitoring, advisory and consulting services to the Company prior to the IPO. In connection with the IPO, the Company paid the Investors an advisory agreement termination fee of $29.8 million in August 2014 recorded which was within other (income)/expense, net in the consolidated statements of operations. As a result, the Company did not have management fees for the three months and six months ended December 31, 2014. For the three months and six months ended December 31, 2013, this management fee was approximately $3.2 million and $6.4 million, respectively. This fee was recorded as expense within selling, general and administrative expenses in the Consolidated Statements of Operations. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) | |||||||||||||||
Description of Capital Stock and Initial Public Offering | ||||||||||||||||
The Company is authorized to issue 1,000,000,000 shares of common stock, with a par value of $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. In accordance with the Company's amended and restated certificate of incorporation, each share of common stock shall have one vote, and the common stock shall vote together as a single class. In July 2014, the Company’s board of directors and holders of the requisite number of outstanding shares of its capital stock have approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 70-for-1 stock split. The stock split became effective on July 17, 2014 upon the filing with the Delaware Secretary of State of an amendment to the Company's amended and restated certificate of incorporation. Refer to Note 1 to the Consolidated Financial Statements for further discussion. | ||||||||||||||||
On August 5, 2014, the Company completed an IPO of 42.5 million shares of its common stock for an initial price of $20.50 per share for total proceeds, before underwriting discounts and commissions and other offering expenses, of approximately $871.3 million and proceeds net of underwriters discount and commissions of approximately $828.0 million. The shares offered and sold in the IPO were registered under the Securities Act pursuant to the Company's Registration Statement on Form S-1 (File No. 333-193542), which was declared effective by the SEC on July 30, 2014. The Company's common stock began trading on the New York Stock Exchange under the symbol "CTLT" as of July 31, 2014. On September 9, 2014, Morgan Stanley and J.P. Morgan, as representatives of the underwriters of Catalent’s IPO of its common stock, purchased an additional 6.4 million shares of Catalent’s common stock from Catalent at the IPO price of $20.50 per share less the underwriting discount for net proceeds of approximately $124.2 million pursuant to an option granted to the underwriters at the time of the IPO. | ||||||||||||||||
Accumulated other comprehensive income/(loss) | ||||||||||||||||
The components of the changes in the cumulative translation adjustment and minimum pension liability for the three and six months ended December 31, 2014 and December 31, 2013 are presented below. | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||
Net investment hedge | $ | 4.4 | $ | (4.0 | ) | $ | 15.2 | $ | (15.4 | ) | ||||||
Long term intercompany loans | (13.8 | ) | 6.1 | (23.4 | ) | 18.3 | ||||||||||
Translation adjustments | (50.2 | ) | (12.3 | ) | (105.6 | ) | 7.3 | |||||||||
Total foreign currency translation adjustment, pre tax | (59.6 | ) | (10.2 | ) | (113.8 | ) | 10.2 | |||||||||
Tax expense/(benefit) | 0.2 | — | (0.2 | ) | — | |||||||||||
Total foreign currency translation adjustment, net of tax | $ | (59.8 | ) | $ | (10.2 | ) | $ | (113.6 | ) | $ | 10.2 | |||||
Net change in minimum pension liability | ||||||||||||||||
Net gain/(loss) recognized during the period | 0.4 | 0.3 | 0.9 | 0.6 | ||||||||||||
Total pension, pretax | 0.4 | 0.3 | 0.9 | 0.6 | ||||||||||||
Tax expense/(benefit) | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||
Net change in minimum pension liability, net of tax | $ | 0.3 | $ | 0.2 | $ | 0.7 | $ | 0.4 | ||||||||
Changes in Accumulated Other Comprehensive Income/(Loss) by Component | ||||||||||||||||
For the three months ended December 31, 2014 the changes in accumulated other comprehensive income net of tax by component are as follows: | ||||||||||||||||
(Dollars in millions) | Foreign Exchange Translation Adjustments | Pension and Other Post-Retirement Adjustments | Deferred Compensation | Total | ||||||||||||
Balance at September 30, 2014 | $ | (39.8 | ) | $ | (41.0 | ) | $ | 3 | $ | (77.8 | ) | |||||
Other comprehensive income/(loss) before reclassifications | (59.8 | ) | — | 0.4 | (59.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.3 | — | 0.3 | ||||||||||||
Net current period other comprehensive income (loss) | (59.8 | ) | 0.3 | 0.4 | (59.1 | ) | ||||||||||
Balance at December 31, 2014 | $ | (99.6 | ) | $ | (40.7 | ) | $ | 3.4 | $ | (136.9 | ) | |||||
For the six months ended December 31, 2014 the changes in accumulated other comprehensive income net of tax by component are as follows: | ||||||||||||||||
(Dollars in millions) | Foreign Exchange Translation Adjustments | Pension and Other Post-Retirement Adjustments | Deferred Compensation | Total | ||||||||||||
Balance at June 30, 2014 | $ | 14 | $ | (41.4 | ) | $ | 3.2 | $ | (24.2 | ) | ||||||
Other comprehensive income/(loss) before reclassifications | (113.6 | ) | — | 0.2 | (113.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.7 | — | 0.7 | ||||||||||||
Net current period other comprehensive income (loss) | (113.6 | ) | 0.7 | 0.2 | (112.7 | ) | ||||||||||
Balance at December 31, 2014 | $ | (99.6 | ) | $ | (40.7 | ) | $ | 3.4 | $ | (136.9 | ) | |||||
Equity_Based_Compensation
Equity Based Compensation | 6 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Based Compensation | EQUITY-BASED COMPENSATION |
2007 Stock Incentive Plan | |
The Company’s stock-based compensation is comprised of stock options and restricted stock units. Awards issued under the 2007 PTS Holdings Corp. Stock Incentive Plan, as amended (the “2007 Plan”) were generally issued for the purpose of retaining key employees and directors. The Company has adopted two forms of non-qualified stock option agreements (the “Form Option Agreement”) for awards granted under the 2007 Plan. Under the Company's Form Option Agreement adopted in 2009, a portion of the stock option awards vest in equal annual installments over a five-year period contingent solely upon the participant’s continued employment with the Company, or one of its subsidiaries, another portion of the stock option awards vest over a specified performance period upon achievement of pre-determined operating performance targets over time and the remaining portion of the stock option awards vest upon realization of certain internal rates of return or multiple of investment goals. Under the Company's other Form Option Agreement, adopted in 2013, a portion of the stock option awards vest over a specified performance period upon achievement of pre-determined operating performance targets over time while the other portion of the stock option awards vest upon realization of a specified multiple of investment goal. The Form Option Agreements include certain forfeiture provisions upon a participant’s separation from service with the Company. Following the IPO, the Company decided not to grant any further awards under the 2007 Plan; however, all outstanding awards granted prior to the IPO remained outstanding in accordance with the terms of the 2007 Plan. | |
2014 Omnibus Incentive Plan | |
In connection with the IPO, the Company's Board of Directors adopted the 2014 Omnibus Incentive Plan effective July 30, 2014. The 2014 Plan provides certain members of management, employees and directors of the Company and its subsidiaries with various incentives, including grants of stock options and restricted stock units. A maximum of 6,700,000 shares of common stock may be issued under this plan. | |
Restricted stock units under the 2014 Plan may be granted to members of management and directors. At the IPO, the Company granted to members of management restricted stock units that had certain performance-related vesting requirements ("performance stock units"). These performance stock units had a grant date fair value of $14.7 million, which represents approximately 692,000 shares of common stock. Under the 2014 Plan, the performance share units vest based on achieving Company financial performance metrics established at the outset of each three-year performance period. The metrics are a mix of cumulative revenue growth and cumulative EBITDA growth targets. The performance share units vest following the end of the three-year performance period based on achievement of the targets. The restricted stock awards vest on the third anniversary of the date of grant subject to the participant's continued employment with the Company. | |
Stock options were also granted as part of the IPO under the 2014 Plan for selected executives of the Company with an aggregate intrinsic value of $2.3 million, which represents approximately 509,000 shares of common stock. Each stock option vests in equal annual installments over a four-year period from the date of grant, contingent solely upon the participant's continued employment with the Company. | |
The Company recognized equity-based compensation expense of $2.7 million and $4.3 million for the three and six months ended December 31, 2014, respectively, and $1.1 million and $2.3 million for the three and six months ended December 31, 2013, respectively. |
Other_Income_Expense
Other Income / Expense | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||||
Other Income and Other Expense Disclosure | OTHER (INCOME) / EXPENSE, NET | |||||||||||||||
The components of Other (Income) / Expense for the three months ended December 31, 2014 and 2013 are as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Other (Income) / Expense | ||||||||||||||||
Debt extinguishment costs | $ | 1.2 | $ | — | $ | 21.8 | $ | — | ||||||||
Gain on acquisition (1) | (3.2 | ) | — | (10.2 | ) | — | ||||||||||
Sponsor advisory agreement termination fee (2) | — | — | 29.8 | — | ||||||||||||
Foreign currency (gains) and losses | (1.9 | ) | (1.9 | ) | (5.0 | ) | (3.0 | ) | ||||||||
Other | 0.3 | 0.5 | 1.3 | 0.6 | ||||||||||||
Total Other (Income) / Expense | $ | (3.6 | ) | $ | (1.4 | ) | $ | 37.7 | $ | (2.4 | ) | |||||
-1 | Included within Other (income) / expense are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company's core operating results. During the three month period ended December 31, 2014, the Company recorded a gain of $3.2 million on the re-measurement of a cost investment in an entity which is now a wholly owned subsidiary. During the six month period ended December 31, 2014, the Company recorded the aforementioned gain and a $7.0 million bargain purchase gain for an acquisition completed in July 2014. | |||||||||||||||
-2 | The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO. |
Redeemable_noncontrolling_inte
Redeemable noncontrolling interest | 6 Months Ended |
Dec. 31, 2014 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Noncontrolling Interest | REDEEMABLE NONCONTROLLING INTEREST |
In July 2013, the Company acquired a 67% controlling interest in a softgel manufacturing facility located in Haining, China. The noncontrolling interest shareholders have the right to jointly sell the remaining 33% interest to Catalent during the 30-day period following the third anniversary of closing for a price based on the greater of (1) an amount that would provide the noncontrolling interest shareholders a return on their investment of a predetermined amount per annum on their pro rata share of the initial valuation or (2) a multiple of the sum of the target's earnings before interest, taxes, depreciation and amortization and amortization less net debt for the four quarters immediately preceding such sale. Noncontrolling interest with redemption features, such as the arrangement described above, that are not solely within the Company's control are considered redeemable noncontrolling interests, which is considered temporary equity and is therefore reported outside of permanent equity on the Company's consolidated balance sheet at the greater of the initial carrying amount adjusted for the noncontrolling interest's share of net income/(loss) or its redemption value. As of December 31, 2014, the redemption value of the redeemable noncontrolling interest approximated the carrying value. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
As previously disclosed with regard to the Company’s participation in a multi-employer pension plan, the Company notified the plan trustees of its withdrawal from such plan in fiscal 2012. The withdrawal from the plan resulted in the recognition of liabilities associated with the Company’s long-term obligations in both the prior and current year periods, which were primarily recorded as an expense within discontinued operations. The actuarial review process, which is administered by the plan trustees, is ongoing and the Company awaits final determination as to the Company’s ultimate liability. The annual cash impact associated with the Company's long-term obligation approximates $1.7 million per year. Refer to Note 9 to the Consolidated Financial Statements for further discussion. | |
Beginning in November 2006, the Company, along with several pharmaceutical companies, has been named in approximately 380 civil lawsuits filed by individuals allegedly injured by their use of the prescription acne medication Amnesteem®, a branded generic form of isotretinoin, and in some instances of isotretinoin products made and/or sold by other firms as well. All of these lawsuits have been dismissed or settled. | |
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business, including, without limitation, inquiries and claims concerning environmental contamination as well as litigation and allegations in connection with acquisitions, product liability, manufacturing or packaging defects and claims for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of which could be significant. The Company intends to vigorously defend itself against such other litigation and does not currently believe that the outcome of any such other litigation will have a material adverse effect on the Company’s financial statements. In addition, the healthcare industry is highly regulated and government agencies continue to scrutinize certain practices affecting government programs and otherwise. | |
From time to time, the Company receives subpoenas or requests for information from various government agencies, including from state attorneys general and the U.S. Department of Justice relating to the business practices of customers or suppliers. The Company generally responds to such subpoenas and requests in a timely and thorough manner, which responses sometimes require considerable time and effort and can result in considerable costs being incurred. The Company expects to incur costs in future periods in connection with existing and future requests. |
Segment_Information
Segment Information | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Information | SEGMENT INFORMATION | |||||||||||||||
The Company conducts its business within the following operating segments: Softgel Technologies, Modified Release Technologies, Medication Delivery Solutions and Development & Clinical Services. The Softgel Technologies and Modified Release Technologies segments are aggregated into one reportable operating segment – Oral Technologies. The Company evaluates the performance of its segments based on segment earnings before noncontrolling interest, other (income) expense, impairments, restructuring costs, interest expense, income tax (benefit)/expense, and depreciation and amortization (“Segment EBITDA”). EBITDA from continuing operations is consolidated earnings from continuing operations before interest expense, income tax (benefit)/expense, depreciation and amortization and is adjusted for the income or loss attributable to noncontrolling interest. The Company’s presentation of Segment EBITDA and EBITDA from continuing operations may not be comparable to similarly-titled measures used by other companies. | ||||||||||||||||
The following tables include net revenue and Segment EBITDA during the three and six months ended December 31, 2014 and December 31, 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Oral Technologies | ||||||||||||||||
Net revenue | $ | 277.2 | $ | 285.8 | $ | 538.3 | $ | 544.7 | ||||||||
Segment EBITDA | 74.7 | 74.6 | 132.4 | 135 | ||||||||||||
Medication Delivery Solutions | ||||||||||||||||
Net revenue | 73.7 | 55.3 | 130.6 | 111.8 | ||||||||||||
Segment EBITDA | 18.1 | 7 | 28 | 15.2 | ||||||||||||
Development and Clinical Services | ||||||||||||||||
Net revenue | 107.8 | 102.1 | 210.9 | 203.1 | ||||||||||||
Segment EBITDA | 21.9 | 18.5 | 43.3 | 34.2 | ||||||||||||
Inter-segment revenue elimination | (2.9 | ) | (2.5 | ) | (5.7 | ) | (4.6 | ) | ||||||||
Unallocated Costs (1) | (13.0 | ) | (16.6 | ) | (65.4 | ) | (28.2 | ) | ||||||||
Combined Totals: | ||||||||||||||||
Net revenue | $ | 455.8 | $ | 440.7 | $ | 874.1 | $ | 855 | ||||||||
EBITDA from continuing operations | $ | 101.7 | $ | 83.5 | $ | 138.3 | $ | 156.2 | ||||||||
-1 | Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Impairment charges and gain/(loss) on sale of assets | $ | (3.5 | ) | $ | — | $ | (3.5 | ) | $ | — | ||||||
Equity compensation | $ | (2.7 | ) | $ | (1.1 | ) | (4.3 | ) | (2.3 | ) | ||||||
Restructuring and other special items (2) | (6.8 | ) | (8.1 | ) | (11.2 | ) | (14.8 | ) | ||||||||
Sponsor advisory fee | — | (3.2 | ) | — | (6.4 | ) | ||||||||||
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 | ||||||||||||
Other income/(expense), net (3) | 3.6 | 1.4 | (37.7 | ) | 2.4 | |||||||||||
Non-allocated corporate costs, net | (4.1 | ) | (5.9 | ) | (9.6 | ) | (7.5 | ) | ||||||||
Total unallocated costs | $ | (13.0 | ) | $ | (16.6 | ) | $ | (65.4 | ) | $ | (28.2 | ) | ||||
-2 | Segment results do not include restructuring and certain acquisition-related costs. | |||||||||||||||
-3 | Amounts primarily relate to the expense associated with the termination of the sponsor advisory services agreement of $29.8 million in connection with the IPO, expenses related to financing transactions of $21.8 million and acquisition-related gains of $10.2 million, all during the current year; and foreign currency translation gains and losses during all periods presented. | |||||||||||||||
Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Earnings/(loss) from continuing operations | $ | 46.2 | $ | (18.9 | ) | $ | 25.9 | $ | (17.1 | ) | ||||||
Depreciation and amortization | 35.2 | 37.3 | 70.2 | 73.8 | ||||||||||||
Interest expense, net | 23.9 | 41.5 | 59.4 | 82.4 | ||||||||||||
Income tax (benefit)/expense | (4.1 | ) | 23.3 | (18.1 | ) | 16.7 | ||||||||||
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 | ||||||||||||
EBITDA from continuing operations | $ | 101.7 | $ | 83.5 | $ | 138.3 | $ | 156.2 | ||||||||
The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the Consolidated Financial Statements: | ||||||||||||||||
(Dollars in millions) | December 31, | June 30, | ||||||||||||||
2014 | 2014 | |||||||||||||||
Assets | ||||||||||||||||
Oral Technologies | $ | 2,447.80 | $ | 2,585.60 | ||||||||||||
Medication Delivery Solutions | 323.7 | 292.8 | ||||||||||||||
Development and Clinical Services | 727.7 | 672.1 | ||||||||||||||
Corporate and eliminations | (461.1 | ) | (460.3 | ) | ||||||||||||
Total assets | $ | 3,038.10 | $ | 3,090.20 | ||||||||||||
Supplemental_Balance_Sheet_Inf
Supplemental Balance Sheet Information | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION | |||||||
Supplementary balance sheet information at December 31, 2014 and June 30, 2014 is detailed in the following tables. | ||||||||
Inventories | ||||||||
Work-in-process and finished goods inventories include raw materials, labor, and overhead. Total inventories consist of the following: | ||||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Raw materials and supplies | $ | 86 | $ | 84.1 | ||||
Work-in-process | 23.7 | 23.8 | ||||||
Finished goods | 50.2 | 39.8 | ||||||
Total inventories, gross | 159.9 | 147.7 | ||||||
Inventory reserve | (15.6 | ) | (12.9 | ) | ||||
Inventories | $ | 144.3 | $ | 134.8 | ||||
Prepaid expenses and other | ||||||||
Prepaid expenses and other current assets consist of the following: | ||||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Prepaid expenses | $ | 30.3 | $ | 16.6 | ||||
Spare parts supplies | 12 | 12.5 | ||||||
Deferred taxes | 4.1 | 12.7 | ||||||
Other current assets | 26.3 | 32.8 | ||||||
Prepaid expenses and other | $ | 72.7 | $ | 74.6 | ||||
Property, plant, and equipment, net | ||||||||
Property, plant, and equipment, net consist of the following: | ||||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Land, buildings, and improvements | $ | 599.4 | $ | 619 | ||||
Machinery, equipment, and capitalized software | 695.4 | 683.6 | ||||||
Furniture and fixtures | 9 | 8.1 | ||||||
Construction in progress | 123.6 | 110.9 | ||||||
Property, plant, and equipment, at cost | 1,427.40 | 1,421.60 | ||||||
Accumulated depreciation | (562.3 | ) | (548.6 | ) | ||||
Property, plant, and equipment, net | $ | 865.1 | $ | 873 | ||||
Other assets | ||||||||
Other assets consist of the following: | ||||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Deferred long term debt financing costs | $ | 10.4 | $ | 19.7 | ||||
Other | 19.1 | 29 | ||||||
Total other assets | $ | 29.5 | $ | 48.7 | ||||
Other accrued liabilities | ||||||||
Other accrued liabilities consist of the following: | ||||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Accrued employee-related expenses | $ | 65.3 | $ | 86.7 | ||||
Restructuring accrual | 4.2 | 10.3 | ||||||
Deferred income tax | 1 | 1 | ||||||
Accrued interest | 0.1 | 12.2 | ||||||
Deferred revenue and fees | 39.7 | 47.1 | ||||||
Accrued income tax | 38.3 | 61.5 | ||||||
Other accrued liabilities and expenses | 50.7 | 60.9 | ||||||
Other accrued liabilities | $ | 199.3 | $ | 279.7 | ||||
Subsequent_Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS |
In the preparation of its consolidated financial statements, the Company completed an evaluation of the impact of subsequent events and determined there was no subsequent event requiring disclosure in or adjustment to these financial statements. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending June 30, 2015. The consolidated balance sheet at June 30, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014 filed with the Securities and Exchange Commission. | |
Noncontrolling interest is included within the equity section in the consolidated balance sheets. Redeemable noncontrolling interest has been classified as temporary equity and is therefore reported outside of permanent equity on the consolidated balance sheets at the greater of the initial carrying amount adjusted for the noncontrolling interest's share of net earnings/(loss) or its redemption value. The Company presents the amount of consolidated net earnings/(loss) that is attributable to Catalent and the noncontrolling interest in the consolidated statements of operations. Furthermore, the Company discloses the amount of comprehensive income that is attributable to Catalent and the noncontrolling interest in the consolidated statements of comprehensive income/(loss). | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, inventory and long-lived asset valuation, goodwill and other intangible asset valuation and impairment, equity-based compensation, income taxes, derivative financial instruments and pension plan asset and liability valuation. Actual amounts may differ from these estimated amounts. | |
Translation and Transaction of Foreign Currencies | Foreign Currency Translation |
The financial statements of the Company’s operations outside the U.S. are generally measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive income/(loss) utilizing period-end exchange rates. The currency fluctuations related to certain long-term inter-company loans deemed to not be repayable in the foreseeable future have been recorded within cumulative translation adjustment, a component of other comprehensive income/(loss). In addition, the currency fluctuation associated with the portion of the Company’s euro-denominated debt designated as a net investment hedge is included as a component of other comprehensive income/(loss). Foreign currency transaction gains and losses calculated by utilizing weighted average exchange rates for the period are included in the consolidated statements of operations in the other (income) expense, net line item. Foreign currency translation gains and losses generated from inter-company loans that are long-term in nature, but may be repayable in the foreseeable future, are also recorded within the other (income)/expense, net line item on the consolidated statements of operations. | |
Revenue Recognition | Revenue Recognition |
In accordance with Codification Standard ASC 605 Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. In cases where the Company has multiple contracts with the same customer, the Company evaluates those contracts to assess if the contracts are linked or are separate arrangements. Factors the Company considers include the timing of negotiation, interdependency with other contracts or elements and payment terms. The Company and its customers generally view each contract discussion as a separate arrangement. | |
Manufacturing and packaging service revenue is recognized upon delivery of the product in accordance with the terms of the contract, which specify when transfer of title and risk of loss occurs. Some of the Company’s manufacturing contracts with its customers have annual minimum purchase requirements. At the end of the contract year, revenue is recognized for the unfilled purchase obligation in accordance with the contract terms. Development service contracts generally take the form of a fee-for-service arrangement. After the Company has evidence of an arrangement, the price is determinable and there is a reasonable expectation regarding payment, the Company recognizes revenue at the point in time the service obligation is completed and accepted by the customer. Examples of output measures include a formulation report, analytical and stability testing, clinical batch production or packaging and the storage and distribution of a customer’s clinical trial material. Development service revenue is primarily driven by the Company’s Development and Clinical Services segment. | |
Arrangements containing multiple elements, including service arrangements, are accounted for in accordance with the provisions of ASC 605-25 Revenue Recognition: Multiple-Element Arrangements. The Company determines the separate units of account in accordance with ASC 605-25. If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price. In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price. | |
Goodwill | Goodwill |
The Company accounts for purchased goodwill and intangible assets with indefinite lives in accordance with ASC 350 Goodwill, Intangible and Other Assets. Under ASC 350, goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment at least annually. The Company's annual goodwill impairment test was conducted as of April 1, 2014. The Company assesses goodwill for possible impairment by comparing the carrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative market information and other factors to corroborate the discounted cash flow results. | |
Property and Equipment and Other Definite Lived Intangible Assets | Property and equipment are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, including capital lease assets that are amortized over the shorter of their useful lives or the terms of the respective leases. The Company generally uses the following ranges of useful lives for its property and equipment categories: buildings and improvements - 5 to 50 years; machinery and equipment - 3 to 10 years; and furniture and fixtures - 3 to 7 years. Depreciation expense was $23.6 million and $47.3 million for the three and six months ended December 31, 2014 and $26.8 million and $53.0 million for the three and six months ended December 31, 2013. Depreciation expense includes amortization of assets related to capital leases. The Company charges repairs and maintenance costs to expense as incurred. The amount of capitalized interest was immaterial for all periods presented. |
Intangible Assets, Finite-Lived, Policy | Intangible assets with finite lives, primarily including customer relationships and patents and trademarks continue to be amortized over their useful lives. The Company evaluates the recoverability of its other long-lived assets, including amortizing intangible assets, if circumstances indicate impairment may have occurred pursuant to ASC 360 Property, Plant and Equipment. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an un-discounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value through a charge to the consolidated statements of operations. Fair value is determined based on assumptions the Company believes marketplace participants would utilize and comparable marketplace information in similar arm's length transactions. |
Research and Development Expense, Policy | Research and Development Costs |
The Company expenses research and development costs as incurred. Costs incurred in connection with the development of new offerings and manufacturing process improvements are recorded within selling, general and administrative expenses. Such research and development costs included in selling, general and administrative expenses amounted to $2.9 million and $5.7 million for the three and six months ended December 31, 2014 and $4.5 million and $7.9 million for the three and six months ended December 31, 2013. Costs incurred in connection with research and development services the Company provides to customers and services performed in support of the commercial manufacturing process for customers are recorded within cost of sales. Such research and development costs included in cost of sales amounted to $10.5 million and $19.3 million for the three and six months ended December 31, 2014 and $8.4 million and $15.8 million for the three and six months ended December 31, 2013. | |
Earnings Per Share, Policy | Earnings / (Loss) Per Share |
The Company reports net earnings/(loss) per share pursuant to ASC 260 Earnings per Share. Under ASC 260, basic earnings per share, which excludes dilution, is computed by dividing net earnings or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could be exercised or converted into common shares, and is computed by dividing net earnings or loss available to common stockholders by the weighted average of common shares outstanding plus the dilutive potential common shares. Diluted earnings per share includes in-the-money stock options, restricted stock units, and restricted stock using the treasury stock method. During a loss period, the assumed exercise of in-the-money stock options has an anti-dilutive effect and therefore, these instruments are excluded from the computation of dilutive earnings per share. | |
Share-based Compensation, Option and Incentive Plans Policy | Equity-Based Compensation |
The Company accounts for its equity-based compensation awards pursuant to ASC 718 Compensation-Stock Compensation. ASC 718 requires companies to recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restricted stock units. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over the applicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, the expected dividends on the underlying shares and the risk-free interest rate. | |
The terms of the Company’s equity-based compensation plans permit shares that are issued upon an employee's exercise of an option to be withheld through a net settlement transaction as a means of meeting tax withholding requirements. | |
Recent Financial Accounting Standards | Recent Financial Accounting Standards |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). The new standard will supersede nearly all existing revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, the standard creates a five-step model that requires a company to exercise judgment when considering the terms of the contracts and all relevant facts and circumstances. The five steps require a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations and recognize revenue when each performance obligation is satisfied. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. The standard allows for either full retrospective adoption, where the standard is applied to all periods presented, or modified retrospective adoption where the standard is applied only to the most current period presented in the financial statements. Early adoption is not permitted. Catalent is currently evaluating the impact of this standard on the Company's consolidated results of operations and financial position. |
Goodwill_Tables
Goodwill (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill Disclosure [Abstract] | ||||||||||||||||
Goodwill - Rollforward | The following table summarizes the changes between June 30, 2014 and December 31, 2014 in the carrying amount of goodwill in total and by reporting segment: | |||||||||||||||
(Dollars in millions) | Oral | Medication | Development | Total | ||||||||||||
Technologies | Delivery | & Clinical | ||||||||||||||
Solutions | Services | |||||||||||||||
Balance at June 30, 2014 (1) | $ | 891.8 | $ | — | $ | 205.3 | $ | 1,097.10 | ||||||||
Additions/(impairments) (2) | — | 20 | 41.7 | 61.7 | ||||||||||||
Foreign currency translation adjustments | (61.2 | ) | — | (15.2 | ) | (76.4 | ) | |||||||||
Balance at December 31, 2014 | $ | 830.6 | $ | 20 | $ | 231.8 | $ | 1,082.40 | ||||||||
-1 | The opening balance is reflective of historical impairment charges related to the Medication Delivery Solutions segment of approximately $158.0 million. | |||||||||||||||
-2 | Acquired goodwill of $61.7 million was generated from acquisitions in the Medication Delivery Solutions and Development and Clinical Services segments. |
Definite_Lived_LongLived_Asset1
Definite Lived Long-Lived Assets (Tables) | 6 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Other Intangible Assets Subject to Amortization | The details of other intangible assets subject to amortization as of December 31, 2014 and June 30, 2014, are as follows: | |||||||||||||||||||||||
(Dollars in millions) | Weighted Average Life | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | ||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Amortized intangibles: | ||||||||||||||||||||||||
Core technology | 18 years | $ | 182.1 | $ | (53.7 | ) | $ | 128.4 | ||||||||||||||||
Customer relationships | 14 years | 258 | (72.8 | ) | 185.2 | |||||||||||||||||||
Product relationships | 12 years | 223.1 | (144.0 | ) | 79.1 | |||||||||||||||||||
Total intangible assets | $ | 663.2 | $ | (270.5 | ) | $ | 392.7 | |||||||||||||||||
(Dollars in millions) | Weighted Average Life | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Carrying | ||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||
30-Jun-14 | ||||||||||||||||||||||||
Amortized intangibles: | ||||||||||||||||||||||||
Core technology | 20 years | $ | 150.2 | $ | (53.3 | ) | $ | 96.9 | ||||||||||||||||
Customer relationships | 14 years | 234.6 | (68.0 | ) | 166.6 | |||||||||||||||||||
Product relationships | 12 years | 237.6 | (143.5 | ) | 94.1 | |||||||||||||||||||
Total intangible assets | $ | 622.4 | $ | (264.8 | ) | $ | 357.6 | |||||||||||||||||
Future Amortization Expense | ||||||||||||||||||||||||
(Dollars in millions) | Remainder | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||
Fiscal 2015 | ||||||||||||||||||||||||
Amortization expense | $ | 23.7 | $ | 47.4 | $ | 46.7 | $ | 46.6 | $ | 41.2 | $ | 26.3 | ||||||||||||
LongTerm_Obligations_and_Other1
Long-Term Obligations and Other Short-Term Borrowings (Tables) | 6 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Debt Disclosure [Abstract] | ||||||||||
Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings | Long-term obligations and other short-term borrowings consist of the following at December 31, 2014 and June 30, 2014: | |||||||||
(Dollars in millions) | Maturity | December 31, | June 30, | |||||||
2014 | 2014 | |||||||||
Senior Secured Credit Facilities | ||||||||||
Term loan facility dollar-denominated | May-21 | 1,477.30 | 1,383.90 | |||||||
Term loan facility euro-denominated | May-21 | 389.1 | 338.6 | |||||||
9 3/4 % Senior Subordinated euro-denominated Notes | Apr-17 | — | 293.9 | |||||||
7 7/8 % Senior Notes | Oct-18 | — | 348.7 | |||||||
Senior Unsecured Term Loan Facility | Dec-17 | — | 274.3 | |||||||
$200.0 million Revolving Credit Facility | May-19 | — | — | |||||||
Capital lease obligations | 2015 to 2032 | 59 | 64 | |||||||
Other obligations | 2015 to 2018 | 8.8 | 7.2 | |||||||
Total | 1,934.20 | 2,710.60 | ||||||||
Less: Current portion of long-term obligations and other short-term borrowings | 28.8 | 25.2 | ||||||||
Long-term obligations, less current portion | $ | 1,905.40 | $ | 2,685.40 | ||||||
LongTerm_Obligations_and_Other2
Long-Term Obligations and Other Short-Term Borrowings Fair Value of Financial Instruments (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Schedule Of Carrying And Fair Value Of Financial Instruments Table [Text Block] | The carrying amounts and the estimated fair values of financial instruments as of December 31, 2014 and June 30, 2014, are as follows: | |||||||||||||||
31-Dec-14 | 30-Jun-14 | |||||||||||||||
(Dollars in millions) | Carrying | Estimated Fair | Carrying | Estimated Fair | ||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt and other | $ | 1,934.20 | $ | 1,976.50 | $ | 2,710.60 | $ | 2,680.20 | ||||||||
Earnings_Per_Share_Earnings_Pe
Earnings Per Share Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The reconciliations between basic and diluted earnings per share attributable to Catalent common shareholders for the three and six months ended December 31, 2014 and 2013 are as follows (in millions, except per share data): | |||||||||||||||
Three months ended December 31, | Six months ended December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Earnings / (loss) from continuing operations less net income / (loss) attributable to noncontrolling interest | $ | 46.7 | $ | (18.6 | ) | $ | 26.8 | $ | (16.7 | ) | ||||||
Earnings / (loss) from discontinued operations | (0.2 | ) | (0.6 | ) | 0.2 | (1.0 | ) | |||||||||
Net earnings / (loss) attributable to Catalent | $ | 46.5 | $ | (19.2 | ) | $ | 27 | $ | (17.7 | ) | ||||||
Weighted average shares outstanding | 124,102,662 | 75,039,060 | 114,819,023 | 75,027,142 | ||||||||||||
Dilutive securities issuable-stock plans | 1,851,584 | — | 1,851,584 | — | ||||||||||||
Total weighted average diluted shares outstanding | 125,954,246 | 75,039,060 | 116,670,607 | 75,027,142 | ||||||||||||
Basic earnings per share of common stock: | ||||||||||||||||
Earnings / (loss) from continuing operations | $ | 0.38 | $ | (0.25 | ) | $ | 0.23 | $ | (0.22 | ) | ||||||
Earnings / (loss) from discontinued operations | (0.01 | ) | (0.01 | ) | 0.01 | (0.02 | ) | |||||||||
Net earnings / (loss) attributable to Catalent | $ | 0.37 | $ | (0.26 | ) | $ | 0.24 | $ | (0.24 | ) | ||||||
Diluted earnings per share of common stock-assuming dilution: | ||||||||||||||||
Earnings / (loss) from continuing operations | $ | 0.37 | $ | (0.25 | ) | $ | 0.23 | $ | (0.22 | ) | ||||||
Earnings / (loss) from discontinued operations | — | (0.01 | ) | — | (0.02 | ) | ||||||||||
Net earnings / (loss) attributable to Catalent | $ | 0.37 | $ | (0.26 | ) | $ | 0.23 | $ | (0.24 | ) | ||||||
Income_Taxes_Income_Taxes_Tabl
Income Taxes Income Taxes (Tables) | 6 Months Ended | |||
Dec. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ||||
Schedule of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns Roll Forward | A reconciliation of its reserves for uncertain tax positions, excluding accrued interest and penalties, for December 31, 2014 is as follows: | |||
(Dollars in millions) | ||||
Balance at June 30, 2014 | $ | 60.6 | ||
Additions for tax positions of prior years | 0.5 | |||
Reductions for tax positions of prior years | (6.5 | ) | ||
Balance at December 31, 2014 | $ | 54.6 | ||
Employee_Retirement_Benefit_Pl1
Employee Retirement Benefit Plans (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||||||||||||||
Components of Company's Net Periodic Benefit Costs | Components of the Company’s net periodic benefit costs are as follows: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||
Service cost | $ | 0.7 | $ | 0.7 | $ | 1.4 | $ | 1.4 | ||||||||
Interest cost | 2.9 | 3.1 | 6 | 6.1 | ||||||||||||
Expected return on plan assets | (2.7 | ) | (2.6 | ) | (5.4 | ) | (5.1 | ) | ||||||||
Amortization (1) | 0.5 | 0.3 | 1 | 0.6 | ||||||||||||
Net amount recognized | $ | 1.4 | $ | 1.5 | $ | 3 | $ | 3 | ||||||||
-1 | Amount represents the amortization of unrecognized actuarial gains/(losses). |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||
Schedule of Comprehensive Income (Loss) | The components of the changes in the cumulative translation adjustment and minimum pension liability for the three and six months ended December 31, 2014 and December 31, 2013 are presented below. | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||
Net investment hedge | $ | 4.4 | $ | (4.0 | ) | $ | 15.2 | $ | (15.4 | ) | ||||||
Long term intercompany loans | (13.8 | ) | 6.1 | (23.4 | ) | 18.3 | ||||||||||
Translation adjustments | (50.2 | ) | (12.3 | ) | (105.6 | ) | 7.3 | |||||||||
Total foreign currency translation adjustment, pre tax | (59.6 | ) | (10.2 | ) | (113.8 | ) | 10.2 | |||||||||
Tax expense/(benefit) | 0.2 | — | (0.2 | ) | — | |||||||||||
Total foreign currency translation adjustment, net of tax | $ | (59.8 | ) | $ | (10.2 | ) | $ | (113.6 | ) | $ | 10.2 | |||||
Net change in minimum pension liability | ||||||||||||||||
Net gain/(loss) recognized during the period | 0.4 | 0.3 | 0.9 | 0.6 | ||||||||||||
Total pension, pretax | 0.4 | 0.3 | 0.9 | 0.6 | ||||||||||||
Tax expense/(benefit) | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||
Net change in minimum pension liability, net of tax | $ | 0.3 | $ | 0.2 | $ | 0.7 | $ | 0.4 | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | For the three months ended December 31, 2014 the changes in accumulated other comprehensive income net of tax by component are as follows: | |||||||||||||||
(Dollars in millions) | Foreign Exchange Translation Adjustments | Pension and Other Post-Retirement Adjustments | Deferred Compensation | Total | ||||||||||||
Balance at September 30, 2014 | $ | (39.8 | ) | $ | (41.0 | ) | $ | 3 | $ | (77.8 | ) | |||||
Other comprehensive income/(loss) before reclassifications | (59.8 | ) | — | 0.4 | (59.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.3 | — | 0.3 | ||||||||||||
Net current period other comprehensive income (loss) | (59.8 | ) | 0.3 | 0.4 | (59.1 | ) | ||||||||||
Balance at December 31, 2014 | $ | (99.6 | ) | $ | (40.7 | ) | $ | 3.4 | $ | (136.9 | ) | |||||
For the six months ended December 31, 2014 the changes in accumulated other comprehensive income net of tax by component are as follows: | ||||||||||||||||
(Dollars in millions) | Foreign Exchange Translation Adjustments | Pension and Other Post-Retirement Adjustments | Deferred Compensation | Total | ||||||||||||
Balance at June 30, 2014 | $ | 14 | $ | (41.4 | ) | $ | 3.2 | $ | (24.2 | ) | ||||||
Other comprehensive income/(loss) before reclassifications | (113.6 | ) | — | 0.2 | (113.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.7 | — | 0.7 | ||||||||||||
Net current period other comprehensive income (loss) | (113.6 | ) | 0.7 | 0.2 | (112.7 | ) | ||||||||||
Balance at December 31, 2014 | $ | (99.6 | ) | $ | (40.7 | ) | $ | 3.4 | $ | (136.9 | ) | |||||
Other_Income_Expense_Tables
Other Income / Expense (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||||
Schedule of Other Nonoperating (Income) Expense | The components of Other (Income) / Expense for the three months ended December 31, 2014 and 2013 are as follows: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Other (Income) / Expense | ||||||||||||||||
Debt extinguishment costs | $ | 1.2 | $ | — | $ | 21.8 | $ | — | ||||||||
Gain on acquisition (1) | (3.2 | ) | — | (10.2 | ) | — | ||||||||||
Sponsor advisory agreement termination fee (2) | — | — | 29.8 | — | ||||||||||||
Foreign currency (gains) and losses | (1.9 | ) | (1.9 | ) | (5.0 | ) | (3.0 | ) | ||||||||
Other | 0.3 | 0.5 | 1.3 | 0.6 | ||||||||||||
Total Other (Income) / Expense | $ | (3.6 | ) | $ | (1.4 | ) | $ | 37.7 | $ | (2.4 | ) | |||||
-1 | Included within Other (income) / expense are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company's core operating results. During the three month period ended December 31, 2014, the Company recorded a gain of $3.2 million on the re-measurement of a cost investment in an entity which is now a wholly owned subsidiary. During the six month period ended December 31, 2014, the Company recorded the aforementioned gain and a $7.0 million bargain purchase gain for an acquisition completed in July 2014. | |||||||||||||||
-2 | The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO. |
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Net Revenue and Segment EBITDA | The following tables include net revenue and Segment EBITDA during the three and six months ended December 31, 2014 and December 31, 2013: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Oral Technologies | ||||||||||||||||
Net revenue | $ | 277.2 | $ | 285.8 | $ | 538.3 | $ | 544.7 | ||||||||
Segment EBITDA | 74.7 | 74.6 | 132.4 | 135 | ||||||||||||
Medication Delivery Solutions | ||||||||||||||||
Net revenue | 73.7 | 55.3 | 130.6 | 111.8 | ||||||||||||
Segment EBITDA | 18.1 | 7 | 28 | 15.2 | ||||||||||||
Development and Clinical Services | ||||||||||||||||
Net revenue | 107.8 | 102.1 | 210.9 | 203.1 | ||||||||||||
Segment EBITDA | 21.9 | 18.5 | 43.3 | 34.2 | ||||||||||||
Inter-segment revenue elimination | (2.9 | ) | (2.5 | ) | (5.7 | ) | (4.6 | ) | ||||||||
Unallocated Costs (1) | (13.0 | ) | (16.6 | ) | (65.4 | ) | (28.2 | ) | ||||||||
Combined Totals: | ||||||||||||||||
Net revenue | $ | 455.8 | $ | 440.7 | $ | 874.1 | $ | 855 | ||||||||
EBITDA from continuing operations | $ | 101.7 | $ | 83.5 | $ | 138.3 | $ | 156.2 | ||||||||
-1 | Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Impairment charges and gain/(loss) on sale of assets | $ | (3.5 | ) | $ | — | $ | (3.5 | ) | $ | — | ||||||
Equity compensation | $ | (2.7 | ) | $ | (1.1 | ) | (4.3 | ) | (2.3 | ) | ||||||
Restructuring and other special items (2) | (6.8 | ) | (8.1 | ) | (11.2 | ) | (14.8 | ) | ||||||||
Sponsor advisory fee | — | (3.2 | ) | — | (6.4 | ) | ||||||||||
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 | ||||||||||||
Other income/(expense), net (3) | 3.6 | 1.4 | (37.7 | ) | 2.4 | |||||||||||
Non-allocated corporate costs, net | (4.1 | ) | (5.9 | ) | (9.6 | ) | (7.5 | ) | ||||||||
Total unallocated costs | $ | (13.0 | ) | $ | (16.6 | ) | $ | (65.4 | ) | $ | (28.2 | ) | ||||
-2 | Segment results do not include restructuring and certain acquisition-related costs. | |||||||||||||||
-3 | Amounts primarily relate to the expense associated with the termination of the sponsor advisory services agreement of $29.8 million in connection with the IPO, expenses related to financing transactions of $21.8 million and acquisition-related gains of $10.2 million, all during the current year; and foreign currency translation gains and losses during all periods presented. | |||||||||||||||
Reconciliation of Earnings/(Loss) from Continuing Operations to EBITDA | Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations: | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Dollars in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Earnings/(loss) from continuing operations | $ | 46.2 | $ | (18.9 | ) | $ | 25.9 | $ | (17.1 | ) | ||||||
Depreciation and amortization | 35.2 | 37.3 | 70.2 | 73.8 | ||||||||||||
Interest expense, net | 23.9 | 41.5 | 59.4 | 82.4 | ||||||||||||
Income tax (benefit)/expense | (4.1 | ) | 23.3 | (18.1 | ) | 16.7 | ||||||||||
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 | ||||||||||||
EBITDA from continuing operations | $ | 101.7 | $ | 83.5 | $ | 138.3 | $ | 156.2 | ||||||||
Total Assets for Each Segment and Reconciling in Consolidated Financial Statements | The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the Consolidated Financial Statements: | |||||||||||||||
(Dollars in millions) | December 31, | June 30, | ||||||||||||||
2014 | 2014 | |||||||||||||||
Assets | ||||||||||||||||
Oral Technologies | $ | 2,447.80 | $ | 2,585.60 | ||||||||||||
Medication Delivery Solutions | 323.7 | 292.8 | ||||||||||||||
Development and Clinical Services | 727.7 | 672.1 | ||||||||||||||
Corporate and eliminations | (461.1 | ) | (460.3 | ) | ||||||||||||
Total assets | $ | 3,038.10 | $ | 3,090.20 | ||||||||||||
Supplemental_Balance_Sheet_Inf1
Supplemental Balance Sheet Information (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Inventory | Work-in-process and finished goods inventories include raw materials, labor, and overhead. Total inventories consist of the following: | |||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Raw materials and supplies | $ | 86 | $ | 84.1 | ||||
Work-in-process | 23.7 | 23.8 | ||||||
Finished goods | 50.2 | 39.8 | ||||||
Total inventories, gross | 159.9 | 147.7 | ||||||
Inventory reserve | (15.6 | ) | (12.9 | ) | ||||
Inventories | $ | 144.3 | $ | 134.8 | ||||
Prepaid and Other Assets | Prepaid expenses and other current assets consist of the following: | |||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Prepaid expenses | $ | 30.3 | $ | 16.6 | ||||
Spare parts supplies | 12 | 12.5 | ||||||
Deferred taxes | 4.1 | 12.7 | ||||||
Other current assets | 26.3 | 32.8 | ||||||
Prepaid expenses and other | $ | 72.7 | $ | 74.6 | ||||
Property and Equipment | Property, plant, and equipment, net consist of the following: | |||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Land, buildings, and improvements | $ | 599.4 | $ | 619 | ||||
Machinery, equipment, and capitalized software | 695.4 | 683.6 | ||||||
Furniture and fixtures | 9 | 8.1 | ||||||
Construction in progress | 123.6 | 110.9 | ||||||
Property, plant, and equipment, at cost | 1,427.40 | 1,421.60 | ||||||
Accumulated depreciation | (562.3 | ) | (548.6 | ) | ||||
Property, plant, and equipment, net | $ | 865.1 | $ | 873 | ||||
Other Assets Non Current | Other assets consist of the following: | |||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Deferred long term debt financing costs | $ | 10.4 | $ | 19.7 | ||||
Other | 19.1 | 29 | ||||||
Total other assets | $ | 29.5 | $ | 48.7 | ||||
Other Accrued Liabilities | Other accrued liabilities consist of the following: | |||||||
(Dollars in millions) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Accrued employee-related expenses | $ | 65.3 | $ | 86.7 | ||||
Restructuring accrual | 4.2 | 10.3 | ||||||
Deferred income tax | 1 | 1 | ||||||
Accrued interest | 0.1 | 12.2 | ||||||
Deferred revenue and fees | 39.7 | 47.1 | ||||||
Accrued income tax | 38.3 | 61.5 | ||||||
Other accrued liabilities and expenses | 50.7 | 60.9 | ||||||
Other accrued liabilities | $ | 199.3 | $ | 279.7 | ||||
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies - Business (Details) (USD $) | 0 Months Ended | 1 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 09, 2014 | Aug. 05, 2014 | Jul. 17, 2014 | Aug. 31, 2014 |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 70 | |||
Stock Issued During Period, Shares, New Issues | 6.4 | 42.5 | ||
Share Price | $20.50 | $20.50 | ||
Proceeds from Issuance Initial Public Offering, Gross | $871.30 | |||
Proceeds from Issuance Initial Public Offering | 124.2 | 828 | ||
Investor [Member] | ||||
Loss on Contract Termination | $29.80 |
Basis_of_Presentation_and_Summ3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $23.60 | $26.80 | $47.30 | $53 |
Building And Improvements [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 5 years | |||
Building And Improvements [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 50 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 10 years | |||
Furniture and Fixtures [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 3 years | |||
Furniture and Fixtures [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment | 7 years |
Basis_of_Presentation_and_Summ4
Basis of Presentation and Summary of Significant Accounting Policies Intangible Assets (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets [Abstract] | ||||
Impairment Charges And Gain Loss On Sale Of Assets | $3.50 | $0 | $3.50 | $0 |
Basis_of_Presentation_and_Summ5
Basis of Presentation and Summary of Significant Accounting Policies Research and Development Expense (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Selling, General and Administrative Expenses [Member] | ||||
Research and Development Expense [Line Items] | ||||
Research and Development Expense | $2.90 | $4.50 | $5.70 | $7.90 |
Cost of Sales [Member] | ||||
Research and Development Expense [Line Items] | ||||
Research and Development Expense | $10.50 | $8.40 | $19.30 | $15.80 |
Business_Combination_Business_1
Business Combination Business Combination (Details) (USD $) | 6 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | $125.10 | $51 | |
Series of Individually Immaterial Business Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Net of Cash Acquired | 111.6 | ||
Finite-lived Intangible Assets Acquired | 60 | ||
Customer relationships [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | 38 | ||
Core technology [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $22 |
Goodwill_Rollforward_Detail
Goodwill - Rollforward (Detail) (USD $) | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | |
Goodwill [Roll Forward] | |||
Beginning balance | $1,097.10 | [1] | |
Additions/(impairments) (2) | 61.7 | ||
Foreign currency translation adjustments | -76.4 | ||
Ending balance | 1,082.40 | ||
Oral Technologies [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 891.8 | [1] | |
Additions/(impairments) (2) | 0 | [2] | |
Foreign currency translation adjustments | -61.2 | ||
Ending balance | 830.6 | ||
Medication Delivery Solutions [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | 158 | ||
Goodwill [Roll Forward] | |||
Beginning balance | 0 | [1] | |
Additions/(impairments) (2) | 20 | ||
Foreign currency translation adjustments | 0 | ||
Ending balance | 20 | ||
Development and Clinical Services [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 205.3 | [1] | |
Additions/(impairments) (2) | 41.7 | ||
Foreign currency translation adjustments | -15.2 | ||
Ending balance | $231.80 | ||
[1] | The opening balance is reflective of historical impairment charges related to the Medication Delivery Solutions segment of approximately $158.0 million. | ||
[2] | Acquired goodwill of $61.7 million was generated from acquisitions in the Medication Delivery Solutions and Development and Clinical Services segments. |
Definite_Lived_LongLived_Asset2
Definite Lived Long-Lived Assets - Other Intangible Assets Subject to Amortization (Detail) (USD $) | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $663.20 | $622.40 |
Accumulated Amortization | -270.5 | -264.8 |
Net Carrying Value | 392.7 | 357.6 |
Core technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 18 years | 20 years |
Gross Carrying Value | 182.1 | 150.2 |
Accumulated Amortization | -53.7 | -53.3 |
Net Carrying Value | 128.4 | 96.9 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years | 14 years |
Gross Carrying Value | 258 | 234.6 |
Accumulated Amortization | -72.8 | -68 |
Net Carrying Value | 185.2 | 166.6 |
Product relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | 12 years |
Gross Carrying Value | 223.1 | 237.6 |
Accumulated Amortization | -144 | -143.5 |
Net Carrying Value | $79.10 | $94.10 |
Definite_Lived_LongLived_Asset3
Definite Lived Long-Lived Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $11.60 | $10.50 | $22.90 | $20.80 |
Impairment Charges And Gain Loss On Sale Of Assets | $3.50 | $0 | $3.50 | $0 |
Definite_Lived_LongLived_Asset4
Definite Lived Long-Lived Assets - Future Amortization Expense (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Intangible Assets Disclosure [Abstract] | |
Remainder Fiscal 2015 | $23.70 |
2016 | 47.4 |
2017 | 46.7 |
2018 | 46.6 |
2019 | 41.2 |
2020 | $26.30 |
LongTerm_Obligations_and_Other3
Long-Term Obligations and Other Short-Term Borrowings - Long-Term Obligations, Presented Net of Issue Discounts and Fees Paid to Lenders, and Other Short-Term Borrowings (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Schedule Of Debt [Line Items] | ||
Debt, Current | $28.80 | $25.20 |
Long-term Debt and Capital Lease Obligations | 1,905.40 | 2,685.40 |
Term Loan Three Facility Dollar Denominated [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 1,477.30 | 1,383.90 |
Term Loan Three Facility Euro Denominated [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 389.1 | 338.6 |
Nine Point Seven Five Percent Senior Subordinated Euro Denominated Notes [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 0 | 293.9 |
Seven Point Eight Seven Five Percent Senior Notes [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 0 | 348.7 |
Senior Unsecured Term Loan Facility [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 0 | 274.3 |
Revolving Credit Facility [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 0 | 0 |
Capital Lease Obligations [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | 59 | 64 |
Other Obligations [Member] | ||
Schedule Of Debt [Line Items] | ||
Debt and Capital Lease Obligations | $8.80 | $7.20 |
LongTerm_Obligations_and_Other4
Long-Term Obligations and Other Short-Term Borrowings Long-Term Obligations and Other Short-Term Borrowings (Details) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 28, 2014 | Sep. 04, 2014 | Sep. 04, 2014 | Sep. 12, 2014 | Aug. 06, 2014 | Sep. 12, 2014 | Dec. 01, 2014 | Dec. 01, 2014 | Dec. 01, 2014 | Dec. 01, 2014 | Dec. 31, 2014 |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Seven Point Eight Seven Five Percent Senior Notes [Member] | Nine Point Seven Five Percent Senior Subordinated Euro Denominated Notes [Member] | Nine Point Seven Five Percent Senior Subordinated Euro Denominated Notes [Member] | Other Obligations [Member] | Other Obligations [Member] | Other Obligations [Member] | Term Loan Three Facility Dollar Denominated [Member] | Term Loan Three Facility Euro Denominated [Member] | Term Loan Three Facility Euro Denominated [Member] | Senior Unsecured Term Loan Facility [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |
USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | ||||||
Proceeds from (Payments for) Deposits Applied to Debt Retirements | $350 | € 225 | $120 | $114.50 | ||||||||||||
Debt Instrument, Redemption Price, Percentage | 101.50% | 101.63% | 101.63% | |||||||||||||
Call Premium Paid For Redemption Of Debt | 12.6 | 0 | 5.3 | 4.5 | ||||||||||||
Unamortized Deferred Financing Costs Written Off | 5.9 | 4 | 0.9 | |||||||||||||
Line of Credit Facility, Increase (Decrease), Net | 100 | 91 | 72.8 | |||||||||||||
Repayments of Long-term Debt | 869.3 | 15.2 | 40.5 | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 125.1 | 51 | 111.6 | |||||||||||||
Debt Issuance Cost | 2.8 | |||||||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | ($1.20) | ($1.20) | $0 | ($21.80) | $0 |
LongTerm_Obligations_and_Other5
Long-Term Obligations and Other Short-Term Borrowings Fair Value Measurements of Financial Instruments - Carrying Amounts and Estimated Fair Value of FInancial Instruments (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Estimate of Fair Value Measurement [Member] | ||
Fair Value Measurements Of Financial Instruments [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $1,976.50 | $2,680.20 |
Carrying Value [Member] | ||
Fair Value Measurements Of Financial Instruments [Line Items] | ||
Debt and Capital Lease Obligations | $1,934.20 | $2,710.60 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Earnings Per Share [Abstract] | ||||
Earnings/(loss) from continuing operations less net earnings (loss) attributable to noncontrolling interest | $46.70 | ($18.60) | $26.80 | ($16.70) |
Net earnings/(loss) from discontinued operations, net of tax | -0.2 | -0.6 | 0.2 | -1 |
Net Income (Loss) Attributable to Parent | $46.50 | ($19.20) | $27 | ($17.70) |
Weighted Average Number of Shares Outstanding, Basic | 124,102,662 | 75,039,060 | 114,819,023 | 75,027,142 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 1,851,584 | 0 | 1,851,584 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 125,954,246 | 75,039,060 | 116,670,607 | 75,027,142 |
Income (Loss) from Continuing Operations, Per Basic Share | $0.38 | ($0.25) | $0.23 | ($0.22) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic Share | ($0.01) | ($0.01) | $0.01 | ($0.02) |
Earnings Per Share, Basic | $0.37 | ($0.26) | $0.24 | ($0.24) |
Income (Loss) from Continuing Operations, Per Diluted Share | $0.37 | ($0.25) | $0.23 | ($0.22) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share | $0 | ($0.01) | $0 | ($0.02) |
Earnings Per Share, Diluted | $0.37 | ($0.26) | $0.23 | ($0.24) |
Earnings_Per_Share_Earnings_Pe1
Earnings Per Share Earnings Per Share - Additional Details (Details) (Stock Compensation Plan [Member]) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6.6 | 2.2 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Derivative [Line Items] | ||||
Derivatives used in Net Investment Hedge, Net of Tax, Period Increase (Decrease) | $4.40 | ($4) | $15.20 | ($15.40) |
Net accumulated gain related to investment hedges | 64.7 | |||
Unrealized foreign exchange gain(loss) | 9.6 | -2.6 | 30.8 | -10.3 |
Designated as Hedging Instrument [Member] | ||||
Derivative [Line Items] | ||||
Total long-term debt | $389.10 | $389.10 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Income Tax Contingency [Line Items] | ||
Unrecognized Tax Benefits | $54.60 | $60.60 |
Unrecognized Tax Benefits, Including Income Tax Penalties and Interest Accrued | 59.6 | 65.7 |
Unrecognized tax benefits that impact the effective income tax rate | 39.5 | 41.4 |
Accrued interest related to uncertain tax positions | 5 | 5.1 |
Interest and penalties subject to indemnification | 2.1 | 2 |
Former Owner [Member] | ||
Income Tax Contingency [Line Items] | ||
Unrecognized Tax Benefits | $2.20 | $2.40 |
Income_Taxes_Income_Tax_Disclo
Income Taxes Income Tax Disclosure (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning Balance | $60.60 |
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | 0.5 |
Unrecognized Tax Benefits, Decreases Resulting from Prior Period Tax Positions | -6.5 |
Ending Balance | $54.60 |
Employee_Retirement_Benefit_Pl2
Employee Retirement Benefit Plans - Components of Company's Net Periodic Benefit Costs (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | ||
Components of net periodic benefit cost: | |||||||
Service cost | $0.70 | $0.70 | $1.40 | $1.40 | |||
Interest cost | 2.9 | 3.1 | 6 | 6.1 | |||
Expected return on plan assets | -2.7 | -2.6 | -5.4 | -5.1 | |||
Amortization | 0.5 | [1] | 0.3 | [1] | 1 | 0.6 | |
Net amount recognized | 1.4 | 1.5 | 3 | 3 | |||
Withdrawal obligation | 39.5 | 39.5 | |||||
Estimated discounted value of future employer contributions | 39.6 | 39.6 | 39.6 | ||||
Estimated annual cash contribution | $1.70 | $1.70 | |||||
[1] | Amount represents the amortization of unrecognized actuarial gains/(losses). |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
(Gain) / Loss on Contract Termination | $0 | [1] | $0 | [1] | $29.80 | [1] | $0 | [1] |
Management Fee Expense | $0 | $3.20 | $0 | $6.40 | ||||
[1] | The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO. |
Equity_and_Accumulated_Other_C
Equity and Accumulated Other Comprehensive Income (Loss) Equity (Details) (USD $) | 0 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Sep. 09, 2014 | Aug. 05, 2014 | Dec. 31, 2014 | Sep. 09, 2014 | Aug. 05, 2014 | Jun. 30, 2014 |
vote | ||||||
Equity [Abstract] | ||||||
Common Stock, Shares Authorized | 1,000,000,000 | 84,000,000 | ||||
Common Stock, Par or Stated Value Per Share | $0.01 | $0.01 | ||||
Preferred Stock, Shares Authorized | 100,000,000 | 0 | ||||
Preferred Stock, Par or Stated Value Per Share | $0.01 | |||||
Common Stock, Number of Votes per Share | 1 | |||||
Stock Issued During Period, Shares, New Issues | 6,400,000 | 42,500,000 | ||||
Share Price | $20.50 | $20.50 | ||||
Proceeds from Issuance Initial Public Offering, Gross | $871.30 | |||||
Proceeds from Issuance Initial Public Offering | $124.20 | $828 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Foreign currency translation adjustments: | ||||
Derivatives used in Net Investment Hedge, Net of Tax, Period Increase (Decrease) | $4.40 | ($4) | $15.20 | ($15.40) |
Long term intercompany loans | -13.8 | 6.1 | -23.4 | 18.3 |
Translation Adjustment Functional to Reporting Currency, Net of Tax, Period Increase (Decrease) | -50.2 | -12.3 | -105.6 | 7.3 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | -59.6 | -10.2 | -113.8 | 10.2 |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 0.2 | 0 | -0.2 | 0 |
Total foreign currency translation adjustment, pre tax | -59.8 | -10.2 | -113.6 | 10.2 |
Net change in minimum pension liability | ||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | 0.4 | 0.3 | 0.9 | 0.6 |
Total pension, pretax | 0.4 | 0.3 | 0.9 | 0.6 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | -0.1 | -0.1 | -0.2 | -0.2 |
Net change in minimum pension liability, net of tax | $0.30 | $0.20 | $0.70 | $0.40 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Loss)-Rollforward (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | ($77.80) | ($24.20) | ||
Other comprehensive income/(loss) before reclassifications | -59.4 | -113.4 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | -0.3 | -0.7 | ||
Net current period other comprehensive income (loss) | -59.1 | -9.3 | -112.7 | 11.8 |
Ending Balance | -136.9 | -136.9 | ||
Accumulated Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | -39.8 | 14 | ||
Other comprehensive income/(loss) before reclassifications | -59.8 | -113.6 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | ||
Net current period other comprehensive income (loss) | -59.8 | -113.6 | ||
Ending Balance | -99.6 | -99.6 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | -41 | -41.4 | ||
Other comprehensive income/(loss) before reclassifications | 0 | 0 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | -0.3 | -0.7 | ||
Net current period other comprehensive income (loss) | 0.3 | 0.7 | ||
Ending Balance | -40.7 | -40.7 | ||
Accumulated Deferred Compensation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | 3 | 3.2 | ||
Other comprehensive income/(loss) before reclassifications | 0.4 | 0.2 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | ||
Net current period other comprehensive income (loss) | 0.4 | 0.2 | ||
Ending Balance | $3.40 | $3.40 |
Equity_Based_Compensation_Deta
Equity Based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||||
Equity compensation | $2.70 | $1.10 | $4.30 | $2.30 | |
Stock Compensation Plan - Omnibus [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 6,700,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value of Granted Shares | 14.7 | 14.7 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 692,000 | 692,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $2.30 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 509,000 |
Other_Income_Expense_Other_Inc
Other Income / Expense Other Income / Expense (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 01, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Other Income and Expenses [Abstract] | |||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | ($1.20) | ($1.20) | $0 | ($21.80) | $0 | ||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount Net of Tax | 3.2 | [1] | -7 | [1] | 0 | [1] | 10.2 | [1] | 0 | [1] | |
(Gain) / Loss on Contract Termination | 0 | [2] | 0 | [2] | 29.8 | [2] | 0 | [2] | |||
Foreign Currency Transaction (Gain) / Loss, Unrealized | -1.9 | -1.9 | -5 | -3 | |||||||
Other Nonoperating (Income) Expense | 0.3 | 0.5 | 1.3 | 0.6 | |||||||
Nonoperating Income (Expense) | $3.60 | $1.40 | ($37.70) | $2.40 | |||||||
[1] | Included within Other (income) / expense are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company's core operating results. During the three month period ended December 31, 2014, the Company recorded a gain of $3.2 million on the re-measurement of a cost investment in an entity which is now a wholly owned subsidiary. During the six month period ended December 31, 2014, the Company recorded the aforementioned gain and a $7.0 million bargain purchase gain for an acquisition completed in July 2014. | ||||||||||
[2] | The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO. |
Redeemable_noncontrolling_inte1
Redeemable noncontrolling interest (Details) (Softgel Manufacturing Facility [Member]) | Jul. 31, 2013 |
Softgel Manufacturing Facility [Member] | |
Business Acquisition [Line Items] | |
Equity interest in acquiree (percent) | 67.00% |
Ownership percentage by noncontrolling owners (percent) | 33.00% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | Cases |
Commitments and Contingencies Disclosure [Abstract] | |
Estimated annual cash contribution | $1.70 |
Loss contingency, dismissed or settled claims (cases) | 380 |
Segment_Information_Net_Revenu
Segment Information - Net Revenue and Segment Ebitda (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 01, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | $455.80 | $440.70 | $874.10 | $855 | |||||||
Segment EBITDA | 101.7 | 83.5 | 138.3 | 156.2 | |||||||
Inter-segment revenue elimination | -2.9 | -2.5 | -5.7 | -4.6 | |||||||
Unallocated Costs | -13 | [1] | -16.6 | [1] | -65.4 | -28.2 | |||||
Impairment Charges And Gain Loss On Sale Of Assets | 3.5 | 0 | 3.5 | 0 | |||||||
Equity compensation | -2.7 | -1.1 | -4.3 | -2.3 | |||||||
Restructuring and other special items (2) | -6.8 | [2] | -8.1 | [2] | -11.2 | -14.8 | |||||
Management Fee Expense | 0 | 3.2 | 0 | 6.4 | |||||||
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 | |||||||
Other income (expense), net | 3.6 | [3] | 1.4 | [3] | -37.7 | 2.4 | |||||
Non-allocated corporate costs, net | -4.1 | -5.9 | -9.6 | -7.5 | |||||||
Total unallocated costs | -13 | [1] | -16.6 | [1] | -65.4 | -28.2 | |||||
(Gain) / Loss on Contract Termination | 0 | [4] | 0 | [4] | -29.8 | [4] | 0 | [4] | |||
Extinguishment of Debt, Gain (Loss), Net of Tax | -1.2 | -1.2 | 0 | -21.8 | 0 | ||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount Net of Tax | 3.2 | [5] | -7 | [5] | 0 | [5] | 10.2 | [5] | 0 | [5] | |
Oral Technologies [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | 277.2 | 285.8 | 538.3 | 544.7 | |||||||
Segment EBITDA | 74.7 | 74.6 | 132.4 | 135 | |||||||
Medication Delivery Solutions [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | 73.7 | 55.3 | 130.6 | 111.8 | |||||||
Segment EBITDA | 18.1 | 7 | 28 | 15.2 | |||||||
Development and Clinical Services [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net revenue | 107.8 | 102.1 | 210.9 | 203.1 | |||||||
Segment EBITDA | $21.90 | $18.50 | $43.30 | $34.20 | |||||||
[1] | Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: | ||||||||||
[2] | Segment results do not include restructuring and certain acquisition-related costs | ||||||||||
[3] | Amounts primarily relate to the expense associated with the termination of the sponsor advisory services agreement of $29.8 million in connection with the IPO, expenses related to financing transactions of $21.8 million and acquisition-related gains of $10.2 million, all during the current year; and foreign currency translation gains and losses during all periods presented. | ||||||||||
[4] | The Company paid a sponsor advisory agreement termination fee of $29.8 million in connection with its IPO. | ||||||||||
[5] | Included within Other (income) / expense are gains associated with acquisitions completed during the respective periods. Such income events are non-standard in nature and not reflective of the Company's core operating results. During the three month period ended December 31, 2014, the Company recorded a gain of $3.2 million on the re-measurement of a cost investment in an entity which is now a wholly owned subsidiary. During the six month period ended December 31, 2014, the Company recorded the aforementioned gain and a $7.0 million bargain purchase gain for an acquisition completed in July 2014. |
Segment_Information_Reconcilia
Segment Information - Reconciliation of Earnings / (Loss) from Continuing Operations to Ebitda (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Segment Reporting [Abstract] | ||||
Earnings/(loss) from continuing operations | $46.20 | ($18.90) | $25.90 | ($17.10) |
Depreciation and amortization | 35.2 | 37.3 | 70.2 | 73.8 |
Interest expense, net | 23.9 | 41.5 | 59.4 | 82.4 |
Income tax (benefit)/expense | -4.1 | 23.3 | -18.1 | 16.7 |
Noncontrolling interest | 0.5 | 0.3 | 0.9 | 0.4 |
EBITDA from continuing operations | $101.70 | $83.50 | $138.30 | $156.20 |
Segment_Information_Total_Asse
Segment Information - Total Assets for Each Segment and Reconciling in Consolidated Financial Statements (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $3,038.10 | $3,090.20 |
Oral Technologies [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 2,447.80 | 2,585.60 |
Medication Delivery Solutions [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 323.7 | 292.8 |
Development and Clinical Services [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 727.7 | 672.1 |
Corporate and Eliminations [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | ($461.10) | ($460.30) |
Supplemental_Balance_Sheet_Inf2
Supplemental Balance Sheet Information - Inventory (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Inventory, Net [Abstract] | ||
Raw materials and supplies | $86 | $84.10 |
Work-in-process | 23.7 | 23.8 |
Finished goods | 50.2 | 39.8 |
Total inventories, gross | 159.9 | 147.7 |
Inventory reserve | -15.6 | -12.9 |
Inventories | $144.30 | $134.80 |
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Supplemental Balance Sheet Information - Prepaid and Other Assets (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid Expense, Current | $30.30 | $16.60 |
Spare parts supplies | 12 | 12.5 |
Deferred taxes | 4.1 | 12.7 |
Other current assets | 26.3 | 32.8 |
Prepaid expenses and other | $72.70 | $74.60 |
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Supplemental Balance Sheet Information - Property and Equipment (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment, Net [Abstract] | ||
Land Buildings And Improvements | $599.40 | $619 |
Machinery, equipment, and capitalized software | 695.4 | 683.6 |
Furniture and fixtures | 9 | 8.1 |
Construction in progress | 123.6 | 110.9 |
Property, plant, and equipment, at cost | 1,427.40 | 1,421.60 |
Accumulated depreciation | -562.3 | -548.6 |
Property, plant, and equipment, net | $865.10 | $873 |
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Supplemental Balance Sheet Information - Other Assets Non Current (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Other Assets, Noncurrent [Abstract] | ||
Deferred long term debt financing costs | $10.40 | $19.70 |
Other Assets, Miscellaneous, Noncurrent | 19.1 | 29 |
Other Assets, Noncurrent | $29.50 | $48.70 |
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Supplemental Balance Sheet Information - Other Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Balance Sheet Related Disclosures [Abstract] | ||
Accrued employee-related expenses | $65.30 | $86.70 |
Restructuring accrual | 4.2 | 10.3 |
Deferred income tax | 1 | 1 |
Accrued interest | 0.1 | 12.2 |
Deferred revenue and fees | 39.7 | 47.1 |
Accrued income tax | 38.3 | 61.5 |
Other accrued liabilities and expenses | 50.7 | 60.9 |
Other accrued liabilities | $199.30 | $279.70 |