Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2017 | Feb. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Patheon N.V. | |
Entity Central Index Key | 1,643,848 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 145,136,214 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Current | ||
Cash and cash equivalents | $ 89 | $ 165 |
Accounts receivable, net | 410.3 | 401 |
Inventories, net | 407.2 | 395.2 |
Income taxes receivable | 12.3 | 8.7 |
Prepaid expenses and other | 30.2 | 21.5 |
Total current assets | 949 | 991.4 |
Capital assets | 1,004.2 | 983.6 |
Intangible assets | 241.2 | 247.6 |
Deferred financing costs | 47.5 | 50.3 |
Deferred tax assets | 59.4 | 29.8 |
Goodwill | 281.5 | 281.6 |
Investments | 11.3 | 11.5 |
Other long-term assets | 44.4 | 44.1 |
Total assets | 2,638.5 | 2,639.9 |
Current | ||
Accounts payable and accrued liabilities | 354.5 | 393.6 |
Income taxes payable | 9.1 | 6.6 |
Deferred revenues - current | 158.8 | 154.2 |
Current portion of long-term debt | 19.6 | 19.5 |
Total current liabilities | 542 | 573.9 |
Long-term debt | 2,086.6 | 2,099.5 |
Deferred revenues | 98.9 | 102.3 |
Deferred tax liabilities | 69.8 | 67.1 |
Other long-term liabilities | 147 | 145.5 |
Total liabilities | 2,944.3 | 2,988.3 |
Commitments and contingencies | ||
Shareholders' deficit: | ||
Ordinary shares (par value of €0.01 per share, 500,000,000 shares authorized, 145,133,567 and 145,074,042 shares issued as of January 31, 2017 and October 31, 2016) | 1.6 | 1.6 |
Additional paid in capital | 595.4 | 591.4 |
Treasury shares (at cost, 4,915 ordinary shares as of January 31, 2017) | (0.1) | 0 |
Accumulated deficit | (813.8) | (842.1) |
Accumulated other comprehensive loss | (88.9) | (99.3) |
Total shareholders' deficit | (305.8) | (348.4) |
Total liabilities and shareholders' deficit | $ 2,638.5 | $ 2,639.9 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - € / shares | Jan. 31, 2017 | Oct. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued (in shares) | 145,133,567 | 145,074,042 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, par value (in euros per share) | € 0.01 | € 0.01 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 457.4 | $ 405.9 |
Cost of goods sold | 327.7 | 307 |
Gross profit | 129.7 | 98.9 |
Selling, general and administrative expenses | 81.1 | 73.7 |
Research and development | 0.7 | 0.7 |
Repositioning expenses | 0.6 | 1.2 |
Acquisition and integration costs | 3.5 | 2.6 |
Other operating expense (income) | 3.6 | (4.9) |
Operating income | 40.2 | 25.6 |
Interest expense, net | 28.2 | 43.8 |
Foreign exchange loss, net | 4.8 | 4.3 |
Other loss (income), net | 0.2 | (1.8) |
Income (loss) before income taxes | 7 | (20.7) |
Benefit from income taxes | (21.3) | (0.7) |
Net income (loss) from continuing operations | 28.3 | (20) |
Net loss from discontinued operations | 0 | (2.1) |
Net income (loss) | $ 28.3 | $ (22.1) |
Basic earnings (loss) per ordinary share | ||
From continuing operations (in USD per share) | $ 0.19 | $ (0.17) |
From discontinued operations (in USD per share) | 0 | (0.02) |
Diluted earnings (loss) per ordinary share | ||
From continuing operations (in USD per share) | 0.19 | (0.17) |
From discontinued operations (in USD per share) | $ 0 | $ (0.02) |
Average number of ordinary shares outstanding | ||
Basic (in shares) | 145,128,652 | 115,609,756 |
Diluted (in shares) | 146,285,740 | 115,609,756 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 28.3 | $ (22.1) | |
Other comprehensive income (loss), net of income taxes: | |||
Foreign currency translation adjustments | (2.6) | (9.3) | |
Net gain related to net investment hedge | 8.6 | 6.9 | |
Net loss on intra-entity foreign currency transactions | 0 | (0.8) | |
Change in value of derivatives designated as foreign currency cash flow hedges | 2.3 | (7.9) | |
Losses from foreign currency hedges reclassified to consolidated statement of operations (1) | [1] | 1.4 | 4.6 |
Net change in minimum pension liability | [2] | 0.7 | 0.4 |
Comprehensive income (loss) | $ 38.7 | $ (28.2) | |
[1] | 1 Net of an income tax expense of $0.0 million for the three months ended January 31, 2017. Income tax expense is not applicable for the three months ended January 31, 2016 as these amounts are from the Company's Canadian operations which were under a full valuation allowance in the prior period. The valuation allowance was released during the fourth quarter of fiscal 2016. Amounts, gross of tax, have been reclassified to foreign exchange loss, net on the consolidated statements of operations. | ||
[2] | 2 Net of an income tax expense of $0.0 million for the three months ended January 31, 2017 and 2016, which is included as a component of provision for income taxes on the consolidated statements of operations. Amounts, gross of tax, have been reclassified to cost of goods sold and selling, general and administrative expenses in the consolidated statements of operations. See Note 8 for further information. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Losses from foreign currency hedges reclassified to consolidated statement of operations, net of income tax expense | $ 0 | |
Net change in minimum pension liability, net of income tax benefit | $ 0 | $ 0 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT (Unaudited) - 3 months ended Jan. 31, 2017 - USD ($) $ in Millions | Total | Ordinary Shares | Additional Paid-in Capital | Treasury Shares | Accumulated Deficit | Accumulated Other Comprehensive Loss | |
Stockholders' equity, beginning of period (shares) at Oct. 31, 2016 | 145,074,042 | ||||||
Stockholders' equity, beginning of period at Oct. 31, 2016 | $ (348.4) | $ 1.6 | $ 591.4 | $ 0 | $ (842.1) | $ (99.3) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Ordinary share issuances related to stock based compensation (in shares) | 59,525 | ||||||
Ordinary share issuances related to stock based compensation | 0 | ||||||
Stock based compensation | 4 | 4 | |||||
Treasury shares acquired, at cost (in shares) | (4,915) | ||||||
Treasury shares acquired, at cost | (0.1) | (0.1) | |||||
Comprehensive income (loss): | |||||||
Net income | 28.3 | 28.3 | |||||
Foreign currency translation adjustments | (2.6) | (2.6) | |||||
Net gain related to net investment hedge | 8.6 | 8.6 | |||||
Change in value of derivatives designated as foreign currency cash flow hedges | 2.3 | 2.3 | |||||
Losses from foreign currency hedges reclassified to consolidated statement of operations | 1.4 | [1] | 1.4 | ||||
Net change in minimum pension liability | 0.7 | [2] | 0.7 | ||||
Comprehensive income (loss) | 38.7 | 28.3 | 10.4 | ||||
Stockholders' equity, end of period (shares) at Jan. 31, 2017 | 145,128,652 | ||||||
Stockholders' equity, end of period at Jan. 31, 2017 | $ (305.8) | $ 1.6 | $ 595.4 | $ (0.1) | $ (813.8) | $ (88.9) | |
[1] | 1 Net of an income tax expense of $0.0 million for the three months ended January 31, 2017. Income tax expense is not applicable for the three months ended January 31, 2016 as these amounts are from the Company's Canadian operations which were under a full valuation allowance in the prior period. The valuation allowance was released during the fourth quarter of fiscal 2016. Amounts, gross of tax, have been reclassified to foreign exchange loss, net on the consolidated statements of operations. | ||||||
[2] | 2 Net of an income tax expense of $0.0 million for the three months ended January 31, 2017 and 2016, which is included as a component of provision for income taxes on the consolidated statements of operations. Amounts, gross of tax, have been reclassified to cost of goods sold and selling, general and administrative expenses in the consolidated statements of operations. See Note 8 for further information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Operating activities | ||
Net income (loss) from continuing operations | $ 28.3 | $ (20) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 27.6 | 26.4 |
Increase in deferred revenues | 73.1 | 80.4 |
Amortization of deferred revenues | (70.6) | (43.1) |
Non-cash interest | 3.3 | 3.9 |
Change in other long-term assets and liabilities | 0.3 | 6.7 |
Deferred income taxes | (22.1) | 0.1 |
Stock based compensation expense | 4 | 1 |
Foreign exchange gain on debt | 0 | (1.1) |
Other | 3.7 | (6.7) |
Net change in non-cash working capital balances | (59.3) | (116.4) |
Cash used in operating activities of continuing operations | (11.7) | (68.8) |
Cash used in operating activities of discontinued operations | 0 | (0.4) |
Cash used in operating activities | (11.7) | (69.2) |
Investing activities | ||
Additions to capital assets | (59) | (64.2) |
Cash used in investing activities of continuing operations | (59) | (64.2) |
Cash used in investing activities of discontinued operations | 0 | (3.3) |
Cash used in investing activities | (59) | (67.5) |
Financing activities | ||
Repayment of debt | (5.2) | (5.2) |
Treasury share purchases to satisfy certain tax withholdings | (0.1) | 0 |
Cash used in financing activities | (5.3) | (5.2) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 1.2 |
Net change in cash and cash equivalents during the period | (76) | (140.7) |
Cash and cash equivalents, beginning of period | 165 | 328.7 |
Cash and cash equivalents, end of period | $ 89 | $ 188 |
THE COMPANY
THE COMPANY | 3 Months Ended |
Jan. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | THE COMPANY Patheon N.V. (“Patheon” or "the Company") was formed on December 24, 2013, as Patheon Coöperatief U.A., a Dutch cooperative with excluded liability for its members ( coöperative met uitgesloten aansparkelijkheid ) and a wholly owned indirect subsidiary of JLL/Delta Patheon Holdings, L.P. (the “Partnership”), which in turn is owned 51% by JLL Patheon Co-Investment Fund L.P. ("JLL") and 49% by Koninklijke DSM N.V. ("DSM"). On June 3, 2016, the Company was converted into a Dutch limited liability company ( naamloze vennootschap ) and changed its name to Patheon N.V. On July 21, 2016, the Company amended its articles of association, resulting in a split of the Company's ordinary shares and a $1.2 million contribution by the Partnership to the Company's equity capital in connection with the share split. This share split and capital contribution resulted in a total of 115,609,756 ordinary shares outstanding at a par value of €0.01 per share. On July 21, 2016, the Company commenced an initial public offering ("IPO") of an additional 29,464,286 ordinary shares at a public offering price of $21.00 per share, which included 4,464,286 ordinary shares sold pursuant to the option granted to the underwriters to purchase additional ordinary shares from the Company. As part of the IPO, DSM sold 4,761,905 ordinary shares to the public that were distributed to them in connection to their ownership in the Partnership. A total of 34,226,191 ordinary shares were sold in connection to the IPO. The Company did not receive any proceeds from the ordinary shares sold by DSM. The IPO was completed on July 26, 2016. The Company received total net proceeds of approximately $584.8 million from the IPO, after deducting underwriting discounts and commissions, but before deducting estimated offering expenses. 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, which was declared effective by the SEC on July 18, 2016. The Company's ordinary shares began trading on the New York Stock Exchange under the symbol "PTHN" as of July 21, 2016. As of January 31, 2017 , the Company had 145,128,652 ordinary shares outstanding with a par value of €0.01 per share. Ordinary shares owned by the public constitute approximately 24% of the outstanding ordinary shares. JLL, DSM and the Partnership own approximately 38% , 34% and 4% of the Company through their ownership of outstanding ordinary shares, respectively. In accordance with the Company's articles of association, each ordinary share shall have one vote in the Company's general meeting. The Partnership's ownership comprises of shares held for the benefit of certain employees. See Note 8 for further discussion. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation Patheon consists of three reportable segments: Drug Product Services ("DPS"), Pharmaceutical Development Services ("PDS"), and Drug Substance Services ("DSS"). Drug Product Services provides manufacturing and packaging for approved prescription, over-the-counter, and nutritional products. Pharmaceutical Development Services provides a wide spectrum of advanced formulation, production, and technical services from the early stages of a product's development to regulatory approval and beyond, as well as for new formulations of approved products for life cycle extension. Drug Substance Services provides development and manufacturing for the biologically active component of a pharmaceutical product from early development through commercial production. The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Operating results for the three months ended January 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2017 ("fiscal 2017 "). These consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and notes for the fiscal year ended October 31, 2016 ("fiscal 2016 "). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect: the reported amounts of assets and liabilities; the disclosure of contingent assets and liabilities at the date of the consolidated financial statements; and the reported amounts of revenue and expenses in the reporting period. Management believes that the estimates and assumptions used in preparing its consolidated financial statements are reasonable and prudent; however, actual results could differ from those estimates. Changes in significant accounting policies There have been no significant changes in accounting policies. Segment information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income (loss) based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s four operating segments are: North America Drug Product Services, or North America DPS, Europe Drug Product Services, or Europe DPS, Pharmaceutical Development Services, or PDS and Drug Substance Services, or DSS. The North America DPS and Europe DPS operating segments meet the aggregation criteria to be presented as one reportable segment referred to as DPS. As a result, the Company has determined it has three reportable segments: DPS, PDS, and DSS. Corporate is not an individually reportable segment because the quantitative thresholds have not been met and as such has been reported in Other. Recently adopted accounting pronouncements In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This update eliminated the requirement to an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Instead, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company adopted this pronouncement at the start of fiscal 2017 and the impact will be dependent on future transactions. Recently issued accounting pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplified the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This update narrows the definition of outputs and aligns it with how outputs are described in Topic 606. The amendment also provides a more robust framework to use in determining when a set of assets and activities is a business. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future business combinations. Between March and December 2016, the FASB issued four Accounting Standards Updates relating to Revenue from Contracts with Customers (Topic 606). These updates, identified as No. 2016-08, No. 2016-10, No. 2016-12, and No.2016-20 identified practical expedients and clarified various aspects of the new revenue recognition standard outlined in Accounting Standards Update 2014-09. The effective date and transition requirements for ASU 2014-09 (and updated in ASU 2015-14) were not changed with these pronouncements. The Company will be required to implement the new revenue recognition standard starting in fiscal 2019 and is continuing to evaluate the overall impact. From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date or, in some cases where early adoption is permitted, in advance of the specified effective date. The Company has assessed the recently issued standards that are not yet effective and, unless otherwise discussed above or in our audited consolidated financial statements and notes for fiscal 2016 , believes these standards will not have a material impact on the Company’s results of operations, cash flows, or financial position. A more detailed listing of recently issued accounting pronouncements are included in our audited consolidated financial statements and notes for fiscal 2016 . |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Jan. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS Discontinued Operations Banner Pharmacaps On May 12, 2015, the Company sold its Banner Pharmacaps entity in Mexico, previously included within the DPS and BLS segments, to the Perrigo Company plc for approximately $36.4 million in cash. The Banner Pharmacaps entity in Mexico produced over-the-counter and nutritional products for consumption in Mexico. The Company acquired the entity in fiscal 2012 and subsequent to this acquisition, the Company shifted its business strategy, focusing more on technological innovation and R&D. The Company recognized a gain on sale of $ 2.6 million , which included adjustments in the second quarter of 2016 primarily related to working capital adjustments. Biosolutions Operations in Capua, Italy On July 31, 2015, the Company sold its Biosolutions facility in Capua, Italy, previously included within the Biosolutions segment, for approximately €0.3 million in cash. The sale occurred as a result of a strategic shift in the Company’s long term business strategy. The Company recognized a loss on sale of $ 24.0 million , which included an adjustment in the second quarter of 2016 for future retention bonuses at the facility. DPx Fine Chemicals On August 31, 2015, the Company sold its DPx Fine Chemicals ("DFC") division, which previously comprised the DFC operating segment. DFC was sold for a cash purchase price of €179.0 million , which included a €3.0 million working capital payment made in the first quarter of 2016. The Company recognized a gain on sale of $ 107.0 million , which included an adjustment in the first quarter of 2016 for estimated taxes on the sale. The DPx Fine Chemicals division, which was acquired through the DPP Acquisition, developed chemicals that are not in line with the Company’s long term business strategy. The results of the above dispositions have been recorded as discontinued operations, the results of which for the three months ended January 31, 2016 are as follows: Three months ended January 31, 2016 $ Revenues 2.1 Cost of goods sold 1.9 Gross profit 0.2 Selling, general and administrative expenses 0.4 Loss on disposals, net 1.9 Loss before income taxes (2.1 ) Provision for income taxes — Net loss (2.1 ) The Company did not record any discontinued operations activity for the three months ended January 31, 2017. |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 3 Months Ended |
Jan. 31, 2017 | |
Supplemental Balance Sheet Information [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION Inventories Inventories consisted of the following: January 31, 2017 October 31, 2016 $ $ Raw materials, packaging components and spare parts 203.7 192.1 Work-in-process 76.7 80.9 Finished goods 126.8 122.2 Balance, end of period 407.2 395.2 Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following: January 31, 2017 October 31, 2016 $ $ Trade payables 248.2 279.3 Interest payable 20.9 14.0 Accrued salaries and related expenses 71.0 81.8 Customer deposits 4.9 4.3 Repositioning 4.6 5.4 Other accruals 4.9 8.8 Balance, end of period 354.5 393.6 Intangible assets The following table summarizes gross carrying amounts, accumulated amortization, and accumulated impairments related to the Company's identifiable intangible assets as of January 31, 2017 : Definite-lived intangible assets Gross carrying value Accumulated amortization Net carrying value Weighted Average Useful Life (in Years) $ $ $ Favorable agreements 1.0 (1.0 ) — — Trade names 1.6 (0.8 ) 0.8 5.6 Developed technology 54.1 (18.1 ) 36.0 10.8 Trade secrets and patents 2.5 (0.3 ) 2.2 14.5 Customer relationships 248.8 (44.9 ) 203.9 14.2 Non-compete agreements 2.6 (2.0 ) 0.6 3.0 Subtotal 310.6 (67.1 ) 243.5 Foreign exchange (3.6 ) Balance, end of period 239.9 Indefinite-lived intangible assets Gross carrying value Accumulated impairment Net carrying value $ $ $ In-process research and development 2.2 (0.9 ) 1.3 Regulatory permits 0.2 — 0.2 Subtotal 2.4 (0.9 ) 1.5 Foreign exchange (0.2 ) Balance, end of period 1.3 In-process research and development (“IPR&D”) is classified as definite-lived or indefinite-lived depending on whether the product has been approved and if commercialization has begun. IPR&D for products that have been approved is classified as a definite-lived intangible asset and is amortized over the life of the asset. IPR&D for products that have not been approved is classified as an indefinite-lived intangible asset and either begins to be amortized upon approval and product commercialization or is written-off if the product is not approved. In the first quarter of fiscal 2016, the Company sold an IPR&D asset to Banner Life Sciences for cash consideration equal to its net carrying value of $3.6 million . At the time of the sale, the asset had a gross carrying value of $7.9 million and had incurred $4.3 million in impairments. Goodwill The following table summarizes the changes in the carrying amount of goodwill for the three months ended January 31, 2017 : Total $ Balance at October 31, 2016 (1) 281.6 Foreign currency translation adjustments (0.1 ) Balance at January 31, 2017 281.5 (1) The opening cumulative goodwill balance is reflective of historical impairment charges of the full value of goodwill. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Jan. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt in the accompanying consolidated balance sheets at January 31, 2017 and October 31, 2016 consists of the following: As of January 31, 2017 As of October 31, 2016 $ $ USD Term Loan with a base rate plus 2.25% or LIBOR with a floor of 1% plus 3.25% rate, (currently 4.25%), and maturity date of March 10, 2021 (the "Credit Agreement") 1,136.0 1,138.9 Euro Term Loan with a base rate plus 2.50% or LIBOR with a floor of 1% plus 3.50% rate, (currently 4.50%), and maturity date of March 10, 2021 (the "Credit Agreement") 501.2 511.0 7.50% Senior Notes due February 1, 2022 (the "Notes") 450.0 450.0 Secured Revolving Facility balance at base rate plus 2.25% rate (currently 4.00%), and maturity terms on a rolling basis (currently monthly) 20.0 20.0 Government of Austria research and development loans with annual interest rates ranging from 1.56% to 2.00% and maturities through March 2020 3.0 3.5 Italian subsidized loan with annual interest rate of 0.5%, and maturity date of June 30, 2020 3.5 4.1 Italian bank loan with Euribor 6-month + 7.1% rate, and maturity date of June 30, 2020 0.7 0.7 Capital lease obligations 1.2 0.7 Total long-term debt outstanding 2,115.6 2,128.9 Less original issue discount, net of accumulated amortization of $6.7 million and $6.2 million, respectively (9.4 ) (9.9 ) Less current portion (19.6 ) (19.5 ) Balance, end of the period 2,086.6 2,099.5 2014 Term Loans and Revolving Line On March 11, 2014, the Company completed the refinancing of its existing credit facility (the "Refinancing"), pursuant to which it entered into a credit agreement (the "Credit Agreement") documenting a new credit facility (the "Credit Facility") for a USD denominated secured term loan in the amount of $985.0 million and a Euro denominated secured term loan in the amount of €250.0 million , or $345.0 million , (together, with the incremental term loans described below, the "Secured Term Loans") and a secured multi-currency revolving line in the amount of $200.0 million (the "Secured Revolving Facility"). Up to $75.0 million of the Secured Revolving Facility is available for letters of credit. The Secured Term Loans mature on March 10, 2021, and the Secured Revolving Facility matures on March 10, 2019. The USD denominated Secured Term Loan bears interest at a rate per annum equal to, at the option of the Company, a base rate plus 2.25% or LIBOR with a floor of 1% plus 3.25% . The Euro denominated Secured Term Loan bears interest at a rate per annum equal to, at the option of the Company, a base rate plus 2.50% or LIBOR with a floor of 1% plus 3.50% . Borrowings under the Secured Revolving Facility bear interest for euro dollar loans at LIBOR plus 3.25% , Canadian prime rate loans at the Canadian prime rate plus 2.25% , and base rate loans at the base rate plus 2.25% . The Company will also pay a commitment fee of 0.50% per annum on the unused portion of the Secured Revolving Facility with a step down to 0.375% when the First Lien Leverage Ratio (as defined below) is less than or equal to 3.00 to 1.00. On September 29, 2014, the Company entered into Amendment No. 1 to the Credit Agreement which added two incremental term loans to the Credit Facility; a USD denominated term loan in the amount of $160.0 million , and a Euro denominated term loan in the amount of €70.0 million , or $88.7 million . The Company used the proceeds for these two incremental term loans to fund a portion of the purchase price for the Gallus Acquisition. The other material terms of the incremental term loans are identical to those of the initial term loans. On March 31, 2015, the Company entered into Amendment No. 2 to the Credit Agreement which added two incremental term loans to the Credit Facility; a Euro denominated term loan in the amount of €155.0 million , or $164.3 million and a USD denominated term loan in the amount of $20.0 million . The Company used the proceeds for these two incremental term loans to fund the purchase price of the Irix Acquisition. The other material terms of the incremental term loans are identical to those of the initial term loans. As of January 31, 2017 , the Company held a $20.0 million balance on the Secured Revolving Facility. The facility has a rolling maturity date and the balance will renew until paid. Under the Secured Revolving Facility, the Company is required to maintain a First Lien Leverage Ratio below a certain amount for each of the Testing Periods as set forth in the Credit Agreement if the Company has borrowed 25% of the available credit on the Secured Revolving Facility, or $50.0 million . For purposes of the Credit Agreement, a Testing Period means a single period consisting of the most recent four consecutive fiscal quarters ending on the covenant determination date. As of January 31, 2017 , the Company was not required to calculate the First Lien Leverage Ratio as the Company has not borrowed 25% or $50.0 million under the Secured Revolving Facility. The following table discloses the maximum First Lien Leverage Ratios permitted under the Credit Agreement: Testing Period Ending Maximum Ratio April 30, 2014 through October 31, 2014 6.75 to 1.00 November 1, 2014 through October 31, 2015 6.50 to 1.00 November 1, 2015 through October 31, 2016 6.25 to 1.00 November 1, 2016 through October 31, 2017 6.00 to 1.00 November 1, 2017 and thereafter 5.75 to 1.00 "First Lien Leverage Ratio" is generally defined in the Credit Agreement as the ratio of (i) the sum of the aggregate principal amount of the Company's and its restricted subsidiaries' indebtedness for borrowed money, principal amount of capital lease obligations and debt obligations evidenced by bonds, promissory notes, debentures or debt securities that is secured by a first priority lien on the collateral minus unrestricted cash and cash equivalents held by the Company and its restricted subsidiaries in each case set forth in the Credit Agreement to (ii) Consolidated EBITDA. Consolidated EBITDA is generally defined in the Credit Agreement as income (loss) from continuing operations before repositioning expenses, interest expense, foreign exchange losses reclassified from other comprehensive income (loss), refinancing expenses, acquisition-related costs, gains and losses on sale of capital assets, income taxes, asset impairment charges, depreciation and amortization, stock-based compensation expense, consulting costs related to the Company's operational initiatives, purchase accounting adjustments, other income and expenses, non-cash charges, expenses related to the DPP Acquisition, pro forma cost savings from operational excellence initiatives and plant consolidations, pro forma synergies from the DPP Acquisition, and proceeds from business interruption insurance, among other adjustments. Consolidated EBITDA is not equivalent to Adjusted EBITDA, which as discussed in Note 10, is the Company's measure of segment performance. The Company is required to make the following mandatory prepayments in respect of the Secured Term Loans: (i) 50% of Excess Cash Flow (as defined in the Credit Agreement) when the Company maintains a First Lien Leverage Ratio of greater than 4.00 to 1.00, with step downs to (a) 25% when the Company maintains a First Lien Leverage Ratio of less than or equal to 4.00 to 1.00 but greater than 3.50 to 1.00 and (b) 0% when the Company maintains a First Lien Leverage Ratio of less than or equal to 3.50 to 1.00; (ii) 100% of the net cash proceeds of certain asset sales (including insurance and condemnation proceeds), subject to thresholds, reinvestment rights and certain other exceptions; and (iii) 100% of the net cash proceeds of issuances of debt obligations, subject to certain exceptions and thresholds. "Excess Cash Flow" is generally defined as Consolidated EBITDA (as defined in the Credit Agreement) plus, (i) decreases in working capital, (ii) extraordinary or nonrecurring income or gains and (iii) certain other adjustments, minus, (a) increases in working capital, (b) cash interest, (c) cash taxes, (d) cash capital expenditures (e) scheduled debt amortization and (f) certain other adjustments. As the Excess Cash Flow calculation is performed annually, no payment is due for the three months ended January 31, 2017 . No Excess Cash Flow payment was required for fiscal 2016. The Company may voluntarily repay borrowings under the Credit Facility at any time. If the Company has failed to maintain the applicable First Lien Leverage Ratio, it may nevertheless avoid a default by (i) repaying outstanding borrowings under the Revolving Line in an amount sufficient to avoid triggering the First Lien Leverage Ratio for that fiscal quarter or (ii) accepting a cash contribution of qualified equity in an amount which, if treated as Consolidated EBITDA, would bring the Company into compliance with the applicable First Lien Leverage Ratio for that fiscal quarter, in each case during the 11 business days following the deadline for delivery of the Company’s compliance certificate for that fiscal quarter. In addition, maintenance of the First Lien Leverage Ratio is required only with respect to the Revolving Line; the Term Loans do not directly benefit from the financial covenant and, until the Revolving Line is terminated and all outstanding borrowings thereunder are accelerated, will remain unaffected by a default under the Revolving Line that arises from the Company’s failure to maintain the applicable First Lien Coverage Ratio. The Credit Agreement contains other customary terms, including (i) representations, warranties and affirmative covenants, (ii) negative covenants (in addition to the limitation on distributions and the requirement to maintain the First Lien Leverage Ratio levels as described above), such as limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, prepayments of subordinated debt, and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (iii) events of default, such as for non-payment, breach of other covenants, misrepresentations, cross default to other debt, change in control, bankruptcy events, ERISA events, unsatisfied judgments and actual or asserted invalidity of guarantees or security documents. As of January 31, 2017 , the Company was in compliance with the covenants in the Credit Facility. Provided that the Company is in compliance with the First Lien Leverage Ratio test and no default under the Credit Agreement is continuing or would result therefrom, the covenant in the Credit Agreement that limits the Company's ability to pay dividends or make other distributions to its shareholders generally permits (with certain exceptions and qualifications) the Company to pay dividends or make such distributions in an aggregate amount, when taken together with the aggregate amount of any prepayment, repurchase, redemption or defeasance of subordinated indebtedness, not to exceed the greater of (x) 3.00% of Consolidated Total Assets and (y) $65.0 million and (ii) in aggregate amount not to exceed the available amount (as defined in the Credit Agreement) at such time. Other than the return of capital discussed in Note 5, the Company historically has not paid dividends on its membership interests. The Credit Facility is guaranteed by the Company and certain subsidiaries, and is secured by a first priority pledge on substantially all of the assets of the Company and the subsidiary guarantors, in each case subject to certain exceptions. 2014 Senior Unsecured Notes In February 2014, the Company issued $450.0 million in aggregate principal amount of 7.50% senior unsecured notes due February 1, 2022 (the "Notes") in a private placement, pursuant to which it entered into an indenture (the “Indenture”) with a commercial bank acting as trustee. Interest on the Notes accrues at a rate of 7.50% per annum and is payable semiannually in arrears on each February 1 and August 1, commencing on August 1, 2014. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. The Notes are generally required to be guaranteed by each of the Company’s restricted subsidiaries that guarantees the Credit Facility or that guarantees other material indebtedness of the Company or other Note guarantors. Except for offers to purchase Notes upon certain asset sales or a change in control of the Company, no mandatory redemption or sinking fund payment is required with respect to the Notes. On and after February 1, 2017, the Company may redeem all or a portion of the Notes at the applicable redemption prices set forth below (expressed as percentages of principal amount redeemed), plus unpaid interest accruing on the principal amount redeemed to the Redemption Date: Year % 2017 105.625 2018 103.750 2019 101.875 2020 and thereafter 100.000 In addition, we may redeem all of the Notes at a redemption price equal to the principal amount redeemed, plus unpaid interest accruing to the Redemption Date, upon certain adverse changes in applicable tax laws. The Notes are guaranteed by the Company and the Indenture does not require the Company to maintain compliance with any financial covenants. The Indenture does contain customary affirmative and negative covenants, including with respect to mergers, asset sales, restricted payments, restricted investments, issuance of debt and equity, liens, and affiliate transactions, subject to baskets and other exceptions. However, the Company will be exempt from many of the negative covenants if the Notes receive investment grade ratings from both Moody’s and S&P. The Indenture also contains customary events of default, such as for non-payment, breach of other covenants, misrepresentation, cross default to other material debt, bankruptcy events, unsatisfied judgments, and actual or asserted invalidity of guarantees. As of January 31, 2017 , the Company was in compliance with the covenants in the Indenture. Other Financing Arrangements During the third quarter of fiscal 2013, the Company received assistance from the Italian government in the form of two loans. One loan is a subsidized loan for approximately €6.0 million , of which the Company received €5.4 million during the third quarter of 2013 and the remaining €0.6 million in the second quarter of 2016. The subsidized loan has an annual interest rate of 0.5% , a maturity date of June 30, 2020 and amortizes in fixed semi-annual installments. The second loan is a bank loan of approximately €0.7 million , of which the Company received €0.6 million during the third quarter of 2013 and the remaining €0.1 million in the second quarter of 2016. The bank loan bears interest at a 6-month Euribor rate plus 7.1% , has a maturity date of June 30, 2020 and amortizes in six variable semi-annual installments beginning in December 2017. The Company receives research and development loans from the Austrian government. The loans hold various interest rates and have maturity dates through March 31, 2020. The aggregate current balance of these loans as of January 31, 2017 is $ 3.0 million . In May 2011, Gallus entered into an agreement with St. Louis County under the county's Chapter 100 program. Under the program, Gallus transferred title of the St. Louis location's buildings and property to St. Louis County in exchange for St. Louis County, Missouri Taxable Industrial Revenue Bonds (Chapter 100 Bonds) of equal value. Gallus then simultaneously leased back the land and facility from St. Louis County. The proceeds of principal and interest on the Chapter 100 Bonds are equal to the lease payment obligations on the Loan. This arrangement was acquired by the Company through the acquisition of Gallus Pharmaceuticals in September 2014. In August 2015, the agreement with St. Louis County was amended by the Company to extend through December 21, 2029 (originally December 21, 2021), which is consistent with the maturity date of the Chapter 100 Bonds. The Company has determined that it has a legal right of offset for the obligations under the lease agreement with the proceeds receivable from the Chapter 100 Bonds and intends to offset the balance. As a result, the offsetting amounts have not been recorded in the financial statements. The bonds require the Company to maintain a minimum level of employment throughout the term of the loan and an additional investment in the St. Louis facility of at least $47.0 million by December 31, 2019. In addition to the terms of the bonds indicated above, the Company also entered into an agreement under which it makes "Payments In Lieu Of Taxes" (PILOT) fee payments in lieu of property taxes, which is equal to 50% of the property taxes that would have otherwise been payable on the property. The PILOT fees will increase in years which the Company has not maintained the minimum number of employees as required by the agreement on a prospective basis. The Company has possessory and equitable title to the property, and at any time can purchase legal title for a nominal fee. In addition, as the holder of the bonds, the Company can waive any default on the lease payments. As the Company retains all benefits of ownership and can take title at any time, at which point the bonds it holds would be redeemed to settle its obligations under the lease agreement, the Company has concluded the land and personal property continue to be assets and are recorded on the consolidated balance sheets. |
PENSION AND POST-RETIREMENT BEN
PENSION AND POST-RETIREMENT BENEFITS | 3 Months Ended |
Jan. 31, 2017 | |
Postemployment Benefits [Abstract] | |
PENSION AND POST-RETIREMENT BENEFITS | PENSION AND POST-RETIREMENT BENEFITS Employee future benefits The components of net periodic benefit cost from continuing operations for the defined benefit plans and other benefit plans for the three months ended January 31, 2017 and 2016 were as follows: Three months ended January 31, 2017 2016 Defined benefit pension plans Other benefit plans Defined benefit pension plans Other benefit plans $ $ $ $ Service cost 0.6 — 0.5 — Interest cost 1.0 0.1 1.3 0.1 Expected return on plan assets (1.0 ) — (1.3 ) — Amortization of actuarial loss 0.7 — 0.4 — Net periodic benefit costs 1.3 0.1 0.9 0.1 Based on current information available from actuarial estimates, the Company anticipates that contributions required under its defined benefit pension plans and other benefit plans for fiscal 2017 will be approximately $ 3.9 million compared to contributions of $5.2 million that were made in fiscal 2016 . The decrease in the expected fiscal 2017 contributions compared to fiscal 2016 are primarily the result of decreased obligations on a pension plan for the Bourgoin, France facility due to a workforce reduction in fiscal 2016. Required contributions to defined benefit pension plans in future years may vary and will be dependent upon a number of variables, including the long-term rate of return on plan assets. The Company recognizes a termination liability for the Company's Italy operations. In accordance with Italian severance pay statutes, an employee benefit is accrued for service to date and is payable when the employee's employment with the Company ceases. The termination indemnity liability is calculated in accordance with local civil and labor laws based on each employee's length of service, employment category and remuneration. The Italian termination liability is adjusted annually by a cost-of-living index provided by the Italian government. Although there is no vesting period, the Italian government has established private accounts for these benefits and has required the Company to contribute $3.9 million and $3.4 million in fiscal 2017 and 2016 , respectively, to these accounts, with additional contributions in the future. The liability recorded in the consolidated balance sheets is the amount to which the employees would be entitled if their employment with the Company ceased. The related expenses for the three months ended January 31, 2017 and 2016 was $ 0.9 million and $0.7 million , respectively. The employee future benefit expense recorded in continuing operations in connection with defined benefit pension plans, other post-retirement benefit plans and the unfunded termination indemnities for the three months ended January 31, 2017 and 2016 was $ 2.3 million and $ 1.7 million , respectively. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Jan. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per ordinary share is computed by dividing net income (loss) available to the Company by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings (loss) per ordinary share is computed by dividing net income (loss) available to the Company by the weighted-average number of ordinary shares outstanding adjusted to give effect to potentially dilutive securities. The details of the computation of basic and diluted earnings (loss) per ordinary share are as follows: Three months ended January 31, 2017 2016 Numerator (in millions): Income (loss) from continuing operations $ 28.3 $ (20.0 ) Loss from discontinued operations $ — $ (2.1 ) Denominator: Weighted-average number of shares of ordinary shares - basic 145,128,652 115,609,756 Effect of dilutive securities: Restricted stock units 1,139,918 — Stock options 17,170 — Weighted-average number of shares of ordinary shares - diluted 146,285,740 115,609,756 Earnings (loss) per ordinary share - basic: From continuing operations $ 0.19 $ (0.17 ) From discontinued operations $ — $ (0.02 ) Earnings (loss) per ordinary share - diluted: From continuing operations $ 0.19 $ (0.17 ) From discontinued operations $ — $ (0.02 ) |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 3 Months Ended |
Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION A summary of equity based compensation expense recognized during the three months ended January 31, 2017 and 2016 is as follows: Three months ended January 31, 2017 2016 $ $ Management Equity Incentive Plan (MEIP) 2.3 1.0 Restricted Stock Units 1.3 — Stock Options 0.4 — Stock Based Compensation Expense 4.0 1.0 Management Equity Incentive Plan (MEIP) Prior to the IPO, the Company was a wholly-owned indirect subsidiary of the Partnership. The Partnership adopted the Management Equity Incentive Plan, or the MEIP, with an effective date of March 11, 2014. The purpose of the MEIP is to provide eligible participants with an opportunity to receive grants of profit interests in the Partnership designated as management units. The award of management units pursuant to this MEIP is intended to compensate employees of the Partnership and its subsidiaries, including the Company. The participants in the MEIP, as a group, are eligible to participate in the gain on the investment earned by JLL and DSM with respect to Patheon once certain specified distribution or return thresholds have been achieved. Upon issuance, MEIP units were subject to certain forfeiture (vesting) provisions which meant that if a holder's employment with Patheon terminated prior to the satisfaction of the applicable provision, the unvested MEIP units would be forfeited and the vested MEIP units could be converted into Class A Units in the Partnership on a cashless basis or by making an additional cash contribution in order to receive additional Class A Units ("Partnership Shares"). The aggregate number, class and tranche of management units that were issued under the MEIP was determined by the JLL/Delta Patheon GP Ltd., the general partner of the Partnership. The Partnership last issued MEIP units on December 9, 2015. As a result of the IPO and the adoption of the Patheon N.V. 2016 Omnibus Incentive Plan (the “Omnibus Plan”) described below, the Partnership will no longer grant awards under the MEIP to our employees. The granted MEIP units consist of Class B, Class C, Class D, and Class E units. From June 24, 2014 to December 9, 2015, the Partnership granted units under five different valuation tranches, with each tranche issued at the most recent quarterly valuation of the Company at the time of the grant. 71.4% of the Class B units have a four year service-based component for vesting ("Service-based Class B units") and the remaining Class B units ("Exit Event Class B units") vest if the holder is employed upon the occurrence of an Exit Event. An Exit Event is defined as the earliest to occur of (i) a change of control and (ii) in connection with or following an initial public offering, the sale or disposition by JLL of equity securities such that, immediately following such sale or disposition, JLL and its affiliates either (A) own less than 20% of the equity securities then issued and outstanding, calculated on a fully diluted basis, or (B) have received, in the aggregate, distributions in respect of such sale or distribution (together with any sale or distribution occurring prior thereto) equal to or in excess of 250% of its aggregate capital contributions made in respect of such equity securities prior to such sale or distribution. Each of the Class C, D, and E units have a performance and service condition related to vesting. These units vest upon the earlier to occur of (i) JLL receiving distributions in the aggregate equal to return on capital thresholds of 2.0 x, 2.5 x and 3.0 x, respectively, or (ii) an Exit Event, as defined above, does not occur prior to the fifth anniversary of an IPO and the return thresholds in (i) are met based on the average price of the Company's publicly traded shares for any twenty day period following the fifth anniversary of an IPO. If any employee is terminated for any reason prior the achievement of the above vesting conditions, all unvested units in any class are forfeited. A summary of the MEIP activity for the three months ended January 31, 2017 is as follows: Class B Class C Class D Class E Total Weighted Average Fair Value Outstanding as of October 31, 2016 59,290 8,470 8,470 8,470 84,700 $ 687.27 Forfeited (288 ) (50 ) (50 ) (50 ) (438 ) $ 870.09 Outstanding as of January 31, 2017 59,002 8,420 8,420 8,420 84,262 $ 686.32 Through the IPO, JLL and DSM received an aggregate return on capital of approximately 2.9x their invested capital, based on the value of ordinary shares of Patheon distributed by the Partnership to JLL and DSM at the IPO price and the value of cash and in-kind distributions made by the Partnership prior to the IPO. In connection with the IPO, a total of 6,106,540 ordinary shares ("MEIP shares") were distributed to the Partnership to be held for the benefit of the MEIP participants until an Exit Event occurs or until MEIP participants are otherwise permitted to transfer such interests in accordance with the terms of the partnership agreement of the Partnership and respective MEIP unit award agreements, at which time MEIP participants will receive their allocable distribution of MEIP shares. These shares represent the value of the MEIP units, in the aggregate, as determined under the MEIP, as a result of the distribution of ordinary shares to the limited partners of the Partnership in connection with the IPO. MEIP shares were issued to the Partnership with respect to Class B, C and D units for the first three valuation tranches as the applicable distribution threshold was achieved. No MEIP shares were allocated to the Partnership with respect to the final two valuation tranches or the Class E units, as the distribution thresholds and the 3.0x capital return threshold, respectively, were not achieved as of the IPO. Because no additional MEIP awards will be granted and because the ordinary shares were distributed to JLL and DSM prior to an Exit Event, the MEIP awards will not benefit from further appreciation of those shares. As such, the Company issued a total of 3,388,481 Restricted Share Units ("MEIP RSUs") under the Omnibus Plan in order to provide the MEIP participants with the opportunity to participate in the additional appreciation the MEIP awards could have generated if the Partnership had not distributed ordinary shares of the Company to JLL and DSM. MEIP RSUs were issued in relation to all unit classes and valuation tranches. The MEIP shares issued with respect to the Class B Units remain subject to the same vesting conditions as the Class B Units. As a result, MEIP shares issued in relation to Service-based Class B units are vested to the extent of each original MEIP grant's four year vesting schedule. The MEIP shares issued in relation to Exit Event Class B units are still subject to the defined Exit Event and are not vested. Lastly, the MEIP shares issued in relation to Class C and D units are fully vested due to their respective return thresholds being achieved through the IPO. The fair value of the MEIP shares are $21.00 , the price of the shares at the IPO. The MEIP RSUs are subject to the same time-based vesting criteria as the original MEIP awards as well as the achievement of performance criteria, which is measured by the Company’s stock price at the earlier to occur of (i) an Exit Event, as defined above, or (ii) the 5-year anniversary of the IPO, at which time all or a percentage of RSUs would settle based upon the attainment of an share price target, with the remaining percentage of RSUs (if any) forfeited. The share price target is $48.47 per share, at which 100% of the RSUs would settle on the applicable vesting date with the share price at or above the target. No RSUs would settle on the vesting date with the share price at or below the IPO price of $21.00 , with the settlement amount for a share price between $21.00 and $48.47 calculated on a pro rata basis. The estimated fair value of the MEIP RSUs are $8.41 per unit and was estimated using a Monte Carlo simulation model. The model incorporated the following assumptions: Risk free interest rate 0.9 % Expected volatility 41.6 % Estimated years to exit event 3.0 The Company previously expensed the service-based Class B units using the graded vesting attribution method and is continuing to do so after the allocation of MEIP shares. In addition, the allocation of MEIP shares and MEIP RSUs in respect to the MEIP units resulted in an increase in fair value from the value attributed to the service-based Class B units at the time of the IPO, which the Company will expense on a straight line basis over the five year period following the IPO date, which represents the requisite service period of the MEIP RSUs. In total, the Company recorded $1.5 million and $1.0 million of compensation expense for the three months ended January 31, 2017 and 2016, respectively, relating to these units. The total unrecognized compensation expense for the Service-based Class B units is $10.5 million , which is expected to be recognized through fiscal 2021. For the Exit Event Class B units, the allocation of MEIP shares and MEIP RSUs resulted in an increased fair value which will serve as the basis for recognizing compensation expense for these units. The fair value of the MEIP RSUs will be expensed on a straight line basis over five years, starting with the IPO date. The Company recognized $0.2 million of compensation expense for the three months ended January 31, 2017 . The fair value of the MEIP shares issued in respect of the Exit Event Class B units will remain unrecognized until an Exit Event occurs. The total unrecognized compensation expense for the MEIP shares and MEIP RSUs issued in respect of the Exit Event Class B units is $32.3 million , of which $3.8 million is expected to be recognized through fiscal 2021 and the remaining amount expensed on the occurrence of an Exit Event. In the third quarter of fiscal 2016, the Company recorded two one time compensation expenses in relation to the allocation of MEIP shares and MEIP RSUs in respect of the C, D and E units. A $9.0 million expense was recorded to account for the fair value of MEIP units that fully vested as a result of their respective return thresholds being met through the IPO. Additionally, a $1.5 million expense was recorded to account for the unvested MEIP units that were allocated MEIP RSUs, in which requisite service requirements had already been partially met at the time of the IPO. In addition, the Company recognized $0.6 million of compensation expense for the three months ended January 31, 2017 to account for the remaining fair value of the C, D and E MEIP units and the incremental fair value that resulted from the conversion to MEIP shares and MEIP RSUs. The compensation expense will be recorded on a straight line basis over five years. The total unrecognized compensation expense for the C, D, and E units is $10.2 million , which will be recognized through fiscal 2021. Patheon N.V. 2016 Omnibus Incentive Plan In July 2016, the Company adopted the Omnibus Plan in order to align the long-term financial interests of selected participants with those of our shareholders, strengthen the commitment of such persons to the Company and our affiliates, and attract and retain competent and dedicated persons whose efforts will result in our long-term growth and profitability. The Omnibus Plan provides for the issuance of options, share appreciation rights, restricted shares, restricted shares units, share bonuses, other share-based awards and cash awards to selected officers, employers, non-employee directors and consultants. Restricted Stock Units At the time of the IPO, the Company granted a total of (i) 460,801 restricted stock units to certain members of management and (ii) 59,525 restricted stock units to non-employee directors (collectively, the "Standard RSUs"), excluding the MEIP RSUs outlined above. The Standard RSUs granted to management vest in equal installments over three years and the Standard RSUs granted to non-employee directors vested on November 1, 2016. The Standard RSUs are not subject to performance based criteria and have a fair value of $21.00 , the stock price at the date of grant. On November 1, 2016, the Company granted 6,000 additional Standard RSUs to members of management, which vest in equal installments over three years. These Standard RSUs have a fair value of $25.61 , the stock price at the date of the grant. In the first quarter of fiscal 2017, the Company issued 59,525 ordinary shares for the vested restricted stock units granted to non-employee directors. To satisfy certain tax withholding requirements, the Company purchased 4,915 of these shares at the vesting date fair value of $25.61 . These shares are currently being held at cost as treasury shares on the balance sheet. During the three months ended January 31, 2017 , $1.3 million of stock compensation expense was recognized in relation to the Standard RSUs. As of January 31, 2017 , unrecognized stock compensation expense related to Standard RSUs was $5.5 million , which will be recognized through fiscal 2019. A summary of Standard RSUs activity for the three months ended January 31, 2017 is as follows: Restricted Share Units Weighted Average Grant Date Fair Value $ Outstanding as of October 31, 2016 450,184 21.00 Granted 6,000 25.61 Vested (59,525 ) 21.00 Outstanding as of January 31, 2017 396,659 21.07 As of January 31, 2017 , no Standard RSUs have been forfeited. Stock Options At the time of the IPO, the Company granted 1,145,338 stock options to certain members of management. The stock options were granted with an exercise price of $21.00 per share, with 431,052 of the granted stock options ("Regular Options") vesting equally over three years. The remaining stock options ("EBITDA Options") were granted to a senior officer and vest based on performance based criteria, using Credit Agreement Adjusted EBITDA as the performance metric. Credit Agreement Adjusted EBITDA is defined as the Company's Adjusted EBITDA, as defined in Note 10, plus pro forma cost savings, synergies and pre-acquisition results. The estimated fair value of stock options granted at the time of the IPO is $8.29 per option and was estimated using a Black-Scholes valuation model, using the following assumptions: Risk free interest rate 1.3 % Expected volatility 39.4 % Expected life of options (in years) 6.0 Dividend yield — % On November 1, 2016, the Company granted 9,000 additional Regular Options to members of management. The options were granted with an exercise price of $25.61 and vest equally over three years. The estimated fair value of these options is $9.69 and was estimated using a Black Scholes valuation model, using the same assumptions as used for the options awarded as part of the IPO. During the three months ended January 31, 2017 , $0.4 million of stock compensation expense was recognized in relation to stock options. No expense was recognized in relation to the EBITDA Options, as the performance based criteria is deemed not probable as of January 31, 2017 . As of January 31, 2017 , total unrecognized compensation expense related to unvested Regular Options was $1.6 million , which is expected to be recognized through fiscal 2019, and total unrecognized compensation expense for the unvested EBITDA Options was $5.9 million , which will be recognized over the requisite service period when the performance based criteria is deemed probable to occur. A summary of stock option activity for the three months ended January 31, 2017 is as follows: Stock Options Weighted Average Fair Value $ Outstanding as of October 31, 2016 1,021,584 8.29 Granted 9,000 9.69 Outstanding as of January 31, 2017 1,030,584 8.30 As of January 31, 2017 , no stock options have been forfeited or exercised. |
FINANCIAL INSTRUMENTS, FAIR VAL
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT | 3 Months Ended |
Jan. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT | FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT The Company has determined the estimated fair values of its financial instruments based on appropriate valuation methodologies; however, considerable judgment is required to develop these estimates. The fair values of the Company's financial instruments are not materially different from their carrying values. Fair value measurements The Company classifies and discloses its fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (Level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The fair value is principally applied to financial assets and liabilities such as derivative instruments consisting of foreign exchange forward contracts, available-for-sale securities relating to Republic of Austria bonds, held-for-trading securities relating to the Company's U.S. deferred compensation plan, and a liability relating to an earnout payment on future Biologics operating results. The following table provides a summary of the financial assets and liabilities that are measured at fair value as of January 31, 2017 and October 31, 2016 : Fair value measurement at January 31, 2017 Fair value measurement at October 31, 2016 Assets measured at fair value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ $ $ $ $ $ $ $ Foreign exchange forward contracts — 1.0 — 1.0 — — — — Available-for-sale securities 1.4 — — 1.4 1.4 — — 1.4 Held-for-trading securities — 1.4 — 1.4 — 1.4 — 1.4 Total assets 1.4 2.4 — 3.8 1.4 1.4 — 2.8 Fair value measurement at January 31, 2017 Fair value measurement at October 31, 2016 Liabilities measured at fair value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ $ $ $ $ $ $ $ Foreign exchange forward contracts — — — — — 2.7 — 2.7 Earnout liability — — 37.4 37.4 — — 33.8 33.8 Total liabilities — — 37.4 37.4 — 2.7 33.8 36.5 Level 1 - Based on quoted market prices in active markets. Level 2 - Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3 - Unobservable inputs that are not corroborated by market data. The following table presents the fair value of the Company's derivative financial instruments and their classifications on the consolidated balance sheets as of January 31, 2017 and October 31, 2016 : Assets as of January 31, 2017 Assets as of October 31, 2016 Balance sheet location Fair value Balance sheet location Fair value $ $ Foreign exchange forward contracts Prepaid expenses and other 1.0 Prepaid expenses and other — Available-for-sale securities Investments 1.4 Investments 1.4 Held-for-trade securities Investments 1.4 Investments 1.4 Total 3.8 2.8 Liabilities as of January 31, 2017 Liabilities as of October 31, 2016 Balance sheet location Fair value Balance sheet location Fair value $ $ Foreign exchange forward contracts Accounts payable and accrued liabilities — Accounts payable and accrued liabilities 2.7 Earnout liability Other long-term liabilities 37.4 Other long-term liabilities 33.8 Total 37.4 36.5 The Company has the option to net settle its derivatives with the counter party under the terms of its contracts and as such any unrealized positions are recorded net. As of January 31, 2017 , the Company had gross unrealized gains of $1.5 million and gross unrealized losses of $0.5 million under its derivative contracts. As of October 31, 2016 , the Company had gross unrealized losses of $2.7 million and gross unrealized gains of less than $0.1 million under its derivative contracts. Long-term obligations As of January 31, 2017 , the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below: Fair Value Level 1 Level 2 Level 3 Total Carrying Value $ $ $ $ $ Long-term debt, including current portion — 2,154.2 — 2,154.2 2,106.2 As of October 31, 2016 , the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below: Fair Value Level 1 Level 2 Level 3 Total Carrying Value $ $ $ $ $ Long-term debt, including current portion — 2,156.8 — 2,156.8 2,119.0 The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on the quoted market prices for the same issues or on the current rates offered for debt of similar remaining maturities. Foreign exchange forward contracts and other arrangements The Company utilizes financial instruments to manage the risk associated with fluctuations in foreign exchange and interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. As of January 31, 2017 , the Company's Canadian operations had entered into foreign exchange forward contracts to sell a net aggregate amount of $ 72.7 million (USD). These contracts hedge the Canadian operations expected exposure to U.S. dollar denominated receivables and mature at the latest on December 22, 2017 , at an average exchange rate of $ 1.3180 Canadian dollars per U.S. dollar. The mark-to-market value of these financial instruments as of January 31, 2017 was a net unrealized gain of $ 1.0 million , which has been recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax. The Company acquired a portion of its Biologics business from DSM ("the DPP acquisition") in March 2014. In connection with the DPP acquisition, DSM was entitled to receive certain additional future contingent payments based on the performance of the acquired biologics business (the "earnout"). Under the terms of the original contribution agreement, the earnout only related to the DSM biologics business acquired in March 2014 and the earnout liability was payable by the Partnership, the parent of the Company before the Company's IPO on July 21, 2016. The value of the earnout liability as of January 29, 2016 was $36.0 million . On January 29, 2016, the Company, the Partnership, JLL, and DSM entered into an agreement (the "Earnout Agreement") whereby the Partnership’s earnout liability was legally assigned to the Company. The assignment of the liability from the Partnership to the Company was deemed a capital transaction with the Partnership of $36.0 million . Concurrently, the calculation of the earnout consideration was revised to include the future earnings of the Company’s entire biologics business ("Biologics Adjusted EBITDA"), which includes biologics business acquired in connection with a September 2014 acquisition of Gallus Pharmaceuticals. As a result of executing this Earnout Agreement, the Company will pay additional consideration to DSM based on the achievement of certain Biologics Adjusted EBITDA targets, as defined in the Earnout Agreement, of the Company’s biologics business at the conclusion of the 2020 fiscal year. If the Company sells or disposes of the biologics business prior to the end of the 2020 fiscal year, Biologics Adjusted EBITDA will be calculated by applying a 10% compounded annual growth rate through the remaining period ending October 31, 2020 to the Biologics Adjusted EBITDA for the twelve-month period ended on the last day of the month immediately preceding the date of such sale or disposition. The Company's maximum and minimum payments to DSM under the terms of the Earnout Agreement is $60.0 million and $25.0 million , respectively. Using the revised earnout definition, the value of the earnout liability as of January 31, 2016 was $31.1 million and resulted in the Company recognizing income of $ 4.9 million in the first quarter of fiscal 2016. The Company estimated the value of the earnout by valuing the three payout tranches. The first tranche of the $25.0 million minimum earnout payment, which is not contingent to Biologics Adjusted EBITDA performance, was estimated by discounting the $25.0 million using cost of debt of the Company. The values of the remaining two tranches, (i) an additional $25.0 million earnout payment which will be realized gradually as Biologics Adjusted EBITDA reaches $98.0 million , and (ii) an additional $10.0 million earnout payment which will be achieved gradually as Biologics Adjusted EBITDA approaches $110.0 million , were estimated using an option pricing framework, where the Company used a modified Black-Scholes model. The Company adjusted the earnout value to its estimated fair value as of January 31, 2017 to $37.4 million . The Company recorded $ 3.6 million of expense and $4.9 million of income in the three months ended January 31, 2017 and 2016, respectively, relating to marking the liability to its estimated fair value. The January 31, 2017 earnout valuation applies an asset volatility of 30% and an asset beta of 0.9 . A 1% change in asset volatility would have an impact on the value of +/- $0.2 million while a 0.1 change in beta would have an impact on the value of +/- $0.4 million . Assumptions are Level 3 in nature. The earnout liability activity is summarized as follows for the three months ended January 31, 2017 : Total $ Balance at October 31, 2016 33.8 Change in fair value 3.6 Balance at January 31, 2017 37.4 The change in fair value relating to the earnout is recorded in other operating income on the consolidated statements of operations. Risks arising from financial instruments and risk management The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange and interest rate), credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. The Company does not purchase any derivative financial instruments for speculative purposes. Financial risk management is the responsibility of the Company's corporate treasury. The corporate treasury works with the Company's operational personnel to identify, evaluate and, where appropriate, hedge financial risks. The Company's corporate treasury also monitors material risks and discusses them with the Audit Committee of the Board of Directors. Foreign exchange risk As of January 31, 2017 , the Company operated in Canada, the United States, Italy, France, the United Kingdom, The Netherlands, Australia, Germany, Austria, and Japan. Foreign exchange risk arises because the value of the local currency receivable or payable for transactions denominated in foreign currencies may vary due to changes in exchange rates ("transaction exposures") and because the non-U.S. dollar denominated financial statements of the Company may vary on consolidation into the reporting currency of U.S. dollars ("translation exposures"). The Company's most significant transaction exposure is from its Canadian operations. Approximately 90% of the cash receipts and 15% of the cash outflows relating to Canadian operations are transacted in U.S. dollars. As a result, the Company may experience transaction exposures because of volatility in the exchange rate between the Canadian and U.S. dollar. Based on the Company's current U.S. denominated net inflows, as of January 31, 2017 , fluctuations of +/- 10% would, everything else being equal, have an effect on quarterly (loss) income before income taxes of approximately +/- $3.0 million , prior to hedging activities. The objective of the Company's foreign exchange risk management activities is to minimize transaction exposures and the resulting volatility of the Company's earnings. The Company manages this risk by entering into foreign exchange contracts. As of January 31, 2017 , the Company has entered into foreign exchange contracts to cover approximately 71% of its Canadian-U.S. dollar cash flow exposures for the next twelve months. The amount of the Company's Euro denominated debt designated as a hedge against its net investment in its subsidiaries in Austria, The Netherlands, Germany, France and Italy, is €464.3 million as of January 31, 2017 . This hedge was originally designated in March 2014 as a part of the Company's acquisition of manufacturing sites from DSM and is re-designated on a quarterly basis. As of January 31, 2017 , the balance of the net investment hedge was $ 79.3 million and is included in accumulated other comprehensive income (loss) in members' deficit. Any unrealized exchange losses are included in the consolidated statement of operations due to ineffectiveness. The following table summarizes the net investment hedge foreign exchange activity for the three months ended January 31, 2017 and 2016 since net investment hedge inception: Three months ended January 31, 2017 2016 $ $ Foreign exchange gain for the period from net investment hedge 8.6 8.0 Release of ineffective portion of net investment hedge to consolidated statement of operations — (1.1 ) Net gain to other comprehensive income (loss) for the period related to net investment hedge 8.6 6.9 Translation gains and losses related to certain foreign currency denominated intercompany loans are included as part of the net investment in certain foreign subsidiaries, and are included in accumulated other comprehensive income (loss) in shareholders' deficit. The following table summarizes the foreign currency activity on the intercompany loans that are included as part of the net investment in certain foreign subsidiaries for the three months ended January 31, 2017 and 2016 since net investment hedge inception: Three months ended January 31, 2017 2016 $ $ Foreign exchange loss for the period from long-term intercompany loan revaluation — (0.8 ) Credit risk Credit risk arises from cash and cash equivalents held with banks and financial institutions, derivative financial instruments (foreign exchange contracts with positive fair values), and credit exposure to customers, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company regularly assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors. Management also regularly monitors the utilization of credit limits. In cases where the credit quality of a customer does not meet the Company's requirements, a cash deposit is received before any services are provided. As of January 31, 2017 and October 31, 2016 , the Company held deposits of $ 4.9 million and $ 4.3 million , respectively. Liquidity risk Liquidity risk arises when financial obligations exceed financial assets available at a particular point in time. The Company's objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at all times. The Company mitigates liquidity risk by maintaining cash and cash equivalents on-hand and through the availability of funding from credit facilities. As of January 31, 2017 , the Company was holding cash and cash equivalents of $ 89.0 million and had undrawn lines of credit available to it of $188.9 million . |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s four operating segments are: North America DPS, Europe DPS, PDS and DSS. The North America DPS and Europe DPS operating segments meet the aggregation criteria to be presented as one DPS reportable segment. As a result, the Company has three reportable segments: DPS, PDS and DSS. Costs relating to Corporate operations are classified as Other. The DPS segment includes commercial manufacturing outsourcing services, the PDS segment includes pharmaceutical development services, and the DSS segment includes active pharmaceutical ingredients and pharmaceutical intermediates. Corporate expenses primarily relate to general, administrative and sales and marketing expenses related to the corporate organization. These expenses are centrally directed and controlled and are not included in internal measures of segment operating performance. The CODM does not evaluate its operating segments using discrete asset information. Three months ended January 31, 2017 DPS PDS DSS Other Total $ $ $ $ $ Revenues 275.2 52.3 129.9 — 457.4 Adjusted EBITDA 61.4 16.3 32.0 (27.2 ) 82.5 Depreciation and amortization 15.3 1.8 9.7 0.8 27.6 Capital expenditures 36.9 1.4 17.9 2.8 59.0 Three months ended January 31, 2016 DPS PDS DSS Other Total $ $ $ $ $ Revenues 258.5 48.5 98.9 — 405.9 Adjusted EBITDA 55.1 13.8 14.8 (24.7 ) 59.0 Depreciation and amortization 14.8 1.2 9.9 0.5 26.4 Capital expenditures 45.0 9.7 7.3 2.2 64.2 The Company evaluates the performance of its segments based on segment Adjusted EBITDA. The Company's Adjusted EBITDA is income (loss) from continuing operations before repositioning expenses (including certain product returns and inventory write-offs recorded in gross profit), interest expense, foreign exchange losses reclassified from other comprehensive income (loss), refinancing expenses, acquisition and integration costs (including certain product returns and inventory write-offs recorded in gross profit), gains and losses on sale of capital assets, Biologics earnout income and expense, income taxes, impairment charges, remediation costs, depreciation and amortization, stock-based compensation expense, consulting costs related to our operational initiatives, purchase accounting adjustments, acquisition-related litigation expenses and other income and expenses. Adjusted EBITDA is one of several metrics used to measure segment operating performance and is also used to determine executive compensation. "Adjusted EBITDA margin" is Adjusted EBITDA as a percentage of revenues. The Company's presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies and is not equivalent to "Consolidated EBITDA" as defined in the Credit Agreement (as discussed in Note 5). Below is a reconciliation of Adjusted EBITDA to its most comparable U.S. GAAP measure. Three months ended January 31, 2017 2016 $ $ Total Adjusted EBITDA 82.5 59.0 Depreciation and amortization (27.6 ) (26.4 ) Repositioning expenses (1) (1.3 ) (1.2 ) Acquisition and integration costs (3.5 ) (2.6 ) Interest expense, net (28.2 ) (43.8 ) Benefit from income taxes 21.3 0.7 Operational initiatives related consulting costs (1.1 ) (1.4 ) IPO costs — (0.4 ) Acquisition related litigation expenses (2.3 ) (1.0 ) Stock based compensation expense (4.0 ) (1.0 ) FDA remediation costs — (8.4 ) Environmental remediation costs (3.7 ) — Other (3.8 ) 6.5 Net income (loss) from continuing operations 28.3 (20.0 ) (1) Repositioning expenses for the three months ended January 31, 2017 includes $0.7 million of inventory reserves related to the Swindon wind down recorded in cost of goods sold. As illustrated in the table below, revenues are attributed to countries based on the location of the customer's billing address, capital assets are attributed to the country in which they are located and goodwill is attributed to the country in which the entity to which the goodwill pertains is located: As of and for the three months ended January 31, 2017 Canada US* Europe Other** Total $ $ $ $ $ Revenues 7.0 301.1 132.7 16.6 457.4 Capital Assets 104.3 528.9 356.2 14.8 1,004.2 Goodwill 2.6 269.4 7.3 2.2 281.5 * Includes Puerto Rico ** Primarily includes Japan As of and for the three months ended January 31, 2016 Canada US* Europe Other** Total $ $ $ $ $ Revenues 7.3 271.8 111.9 14.9 405.9 Capital Assets 91.6 466.6 314.5 15.5 888.2 Goodwill 2.5 272.3 7.3 2.0 284.1 * Includes Puerto Rico ** Primarily includes Bermuda, Japan and other Asian countries |
REPOSITIONING EXPENSES
REPOSITIONING EXPENSES | 3 Months Ended |
Jan. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
REPOSITIONING EXPENSES | REPOSITIONING EXPENSES During the three months ended January 31, 2017 , the Company incurred $0.6 million in repositioning expenses, respectively, primarily from severance payments resulting from operational initiatives. In addition, the Company recorded inventory reserves of $0.7 million for raw material and work in process inventory associated with the final phase of the winding down of the older section of the Swindon facility ("Swindon wind down") to allow us to re-purpose that area, which was expensed through cost of goods sold. During the three months ended January 31, 2016 , the Company incurred $1.2 million in repositioning expenses, primarily from severance payments resulting from a realignment of DPS operations. The following is a summary of these expenses and other charges associated with operational improvements as of and for the three months ended January 31, 2017 and 2016 : As of and for the three months ended January 31, 2017 DPS PDS DSS Other Total $ $ $ $ $ Total repositioning liability at October 31, 2016 5.4 Employee-related expenses 0.2 — — 0.4 0.6 Repositioning expenses paid (1.5 ) Foreign exchange 0.1 Total repositioning liability at January 31, 2017 4.6 The balance of repositioning liabilities as of January 31, 2017 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company does not have any long-term repositioning liabilities as of January 31, 2017 . As of and for the three months ended January 31, 2016 DPS PDS DSS Other Total $ $ $ $ $ Total repositioning liability at October 31, 2015 22.9 Employee-related expenses 1.1 — 0.1 — 1.2 Repositioning expenses paid (18.7 ) Foreign exchange (0.5 ) Total repositioning liability at January 31, 2016 4.9 The balance of repositioning liabilities as of January 31, 2016 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company does not have any long-term repositioning liabilities as of January 31, 2016 . |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Jan. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES Related Party Transactions JLL Partners The Company has a service agreement with JLL Partners Inc. and some JLL Partners affiliates whereby the Company will reimburse the parties for management, consulting, financial, and other business services provided under the agreement. The amounts spent on these services, as well as the amounts payable outstanding in relation to these services, are shown in the tables below. DSM The Company has transition service agreements ("TSAs") with DSM resulting from the DPP Acquisition whereby DSM performs certain shared service functions on behalf of the Company. Additionally, the Company performs certain services on behalf of DSM. The revenue and expenses relating to these services, as well as the accounts receivable and payable outstanding in relation to these services, are shown in the tables below. BLS The Company has a management service agreement with BLS whereby the Company will provide various management, financial, legal and other business services to BLS. The expenses relating to these services are charged to BLS and the related accounts receivable outstanding in relation to these services are shown in the tables below. We performed production services for BLS in the first quarter of fiscal 2016 before BLS sold their commercial business to a third party. Three months ended January 31, Revenues/Expenses 2017 2016 $ $ JLL Partners Expenses — 0.1 DSM Revenues 0.2 0.1 DSM Expenses 3.2 2.7 Banner Life Sciences Revenues — 6.5 Balances as of Accounts Receivable/Payable Balances January 31, 2017 October 31, 2016 $ $ DSM Accounts Receivable 0.4 0.4 DSM Accounts Payable 0.2 0.2 Banner Life Sciences Accounts Receivable 0.7 1.1 Equity Method Investments Banner Life Sciences In October 2015, the Company invested $5.0 million in Banner Life Sciences. The investment resulted in Banner Life Sciences becoming a variable interest entity, but the entity is not consolidated as the Company does not have the ability to control the entity and therefore does not have the power to direct Banner Life Sciences' activities. The Company's maximum exposure to loss relating to this variable interest entity is limited to the carrying value of the investment. The investment is presented within investments in the consolidated balance sheets. In March 2016, the Company received a $2.4 million cash distribution from Banner Life Sciences. Percivia The Company holds a 50.0% interest in Percivia, a limited liability company for the purpose of performing research and development activities and licensing certain technology. In February 2016, the Company received a $1.2 million return of capital from Percivia in the form of a cash distribution. Chemiepark The Company holds a 47.5% interest in Chemiepark, a company tasked with providing fire protection for the chemicals site in Linz, Austria. Values as of Equity Method Investment Values January 31, 2017 October 31, 2016 $ $ Banner Life Sciences 2.7 2.9 Percivia 5.7 5.7 Chemiepark 0.1 0.1 Total 8.5 8.7 Investment carrying values are presented within investments in the consolidated balance sheets. Three months ended January 31, Equity Method (Loss)/Gain 2017 2016 $ $ Banner Life Sciences (0.1 ) 1.8 Percivia — 0.1 Total (0.1 ) 1.9 Equity method earnings are presented within other income in the consolidated statement of operations. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes under FASB ASC 740, Income Taxes ("ASC 740"). The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book (loss) income. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective rate, including factors such as the valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, or changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. The Company has recorded valuation allowances against certain Netherlands and other foreign jurisdictions due to insufficient evidence supporting the Company's ability to use these assets in the future. For the three months ended January 31, 2017 and 2016 , the Company recorded a benefit from income taxes in continuing operations of $ 21.3 million and $ 0.7 million , respectively. The increase in tax benefit for the three months ended January 31, 2017 was primarily attributable to changes in the Company’s jurisdictional combination of pre-tax income, the Company’s change in tax classification of a United States subsidiary ("US subsidiary") and changes to other discrete tax items, which may have unique tax implications, depending on the nature of the item. In the first quarter of fiscal 2017, the Company filed an election to change the tax classification of a US subsidiary from a partnership to an association taxable as a corporation. As a result of the change in tax classification, the Company recognized a $28.3 million deferred tax benefit related to the change in its deferred tax assets and liabilities. The Company previously accounted for the deferred tax basis difference using outside basis of the partnership's investments. The Company derecognized the deferred tax liability for the outside basis difference and recognized deferred tax assets and liabilities for existing temporary differences between the tax basis and financial reporting basis of the assets and liabilities of the subsidiary. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. As of January 31, 2017, the Company has multiple subsidiaries that continue to maintain either full or a partial valuation allowances on its deferred tax assets as there is not sufficient evidence to support the reversal of all or some portion of these allowances. However, given current and anticipated future earnings in the Company's Austrian subsidiaries, the Company believes that within the next twelve months there is a reasonable possibility positive evidence will become available that would allow the release of all or a portion of the valuation allowance recorded at the Company’s Austrian subsidiaries. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. The Company also accrues for potential interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statement operations. As of January 31, 2017, the Company did not have a material change in the total amount of unrecognized tax positions and does not expect a material change over the next twelve months. |
OTHER INFORMATION
OTHER INFORMATION | 3 Months Ended |
Jan. 31, 2017 | |
Other Information [Abstract] | |
OTHER INFORMATION | OTHER INFORMATION Foreign exchange During the three months ended January 31, 2017 and 2016 , the Company recorded a foreign exchange loss of $4.8 million and $ 4.3 million , respectively. These amounts resulted from hedge and operating exposures. Management Incentive Plan On March 11, 2014, the Company adopted the Management Long-Term Incentive Plan (the "LTIP") to provide long-term incentives to select key management employees of Patheon and its subsidiaries who have contributed and are expected to contribute materially to the success of the Company, and to reward outstanding performance by such employees. Leadership, key positions or identified key talent may be invited to participate in the LTIP during an identified plan year. Compensation is payable under this plan upon an Exit Event by the controlling investors of the Company (JLL and DSM), if the participant is still employed by the Company, or a qualifying termination, as defined. An Exit Event is defined as the earlier of: (a) a change of control, and (b) in connection with or following an Initial Public Offering ("IPO"), the sale or disposition by JLL or any of its affiliates of equity securities such that, immediately following such sale or disposition, either (i) JLL and its affiliates own less than 20% of the outstanding equity securities of the Partnership or the Partnership offeror, calculated on a fully-diluted basis, or (ii) JLL and its affiliates have received, in the aggregate, distributions in respect of such sale or disposition (together with any sale or disposition occurring prior thereto) equal to or in excess of 250% of the initial capital contributions and any additional capital contributions made by JLL and its affiliates for all equity securities of the Partnership or the Partnership offeror held by JLL and its affiliates prior to such sale or disposition. Not later than 90 days following commencement of each applicable Company fiscal year that would end during the term of the LTIP, the compensation committee of the board of directors of the Company (the "Compensation Committee") will determine, in its sole and absolute discretion, with respect to such fiscal year, (i) the Participants (as defined in the LTIP) with respect to that fiscal year, (ii) the EBITDA Target (as defined in the LTIP), and (iii) the targeted amount of each Award. Each award shall be evidenced by a written notice and shall be deemed granted on the first day of the fiscal year with respect to which the Compensation Committee resolves to grant such award (the "Grant Date"). Awards are denominated as a percentage of the Participant’s base salary, with the target percentage based on the Participant’s level within the organization, as determined by the Compensation Committee in its sole and absolute discretion. All awards will be paid in the form of cash, or other property having a value equal to such cash payment, as determined by the Compensation Committee in its sole and absolute discretion. Under the LTIP, the Company has granted $9.6 million in outstanding awards from March 11, 2014 through January 31, 2017 , all of which vest over a five -year period. Through January 31, 2017 , the Company has paid out $0.1 million in payments due to qualified terminations. The Company does not accrue for the overall payout as the Exit Event is deemed to not be probable until the actual occurrence of the event. Contingencies Procaps Antitrust Matter On December 10, 2012, Procaps S.A. (‘‘Procaps’’) filed a complaint against the Company in the United States District Court for the Southern District of Florida (the ‘‘District Court’’) (Case No. 12-cv-24356-DLG). The complaint involves the Company’s collaboration agreement with Procaps, pursuant to which both companies agreed to work together with respect to the marketing of a line of certain prescription pharmaceutical soft-gel development and manufacturing services. Procaps alleges that the Company’s acquisition of Banner, a business that historically has generated less than 10% of its revenues from softgel services for prescription pharmaceuticals, transformed the collaboration agreement into an anticompetitive restraint of trade and an agreement between direct competitors to set prices, divide markets and/or allocate geographic territories. Procaps seeks (i) a declaratory judgment that the collaboration agreement must cease and/or terminate; (ii) an injunction requiring that Patheon divest all of Banner’s soft-gel manufacturing capabilities; and (iii) monetary damages under federal and state antitrust and unfair competition laws, including treble damages for violations of the Sherman Act. Patheon subsequently answered Procaps’ complaint and filed its affirmative defenses to the complaint. In July 2014, upon Motion for Summary Judgment by Patheon, the court dismissed Procaps’ unfair competition claims, leaving only the antitrust claims in dispute. In March 2015, the court ordered trial to commence on November 16, 2015. In October 2015, the court granted Patheon’s motion for summary judgment with respect to all of Procaps’ remaining claims in this matter. In November 2015, Procaps filed a notice of appeal with the United States Court of Appeals for the Eleventh Circuit (the ‘‘11th Circuit Court’’). Procaps filed its initial brief with the 11th Circuit Court in February 2016 and we filed our reply brief in May 2016. Procaps filed its reply to our reply brief in June 2016. The 11th Circuit Court heard oral argument in this matter in November 2016 and in December 2016 affirmed the District Court's decision in favor of Patheon. In May 2016, Procaps filed a request for arbitration with the International Court of Arbitration of the International Chamber of Commerce. The request for arbitration involves the above-mentioned collaboration agreement. Procaps alleges that (i) Patheon’s acquisition of Banner violated the exclusivity provision of the collaboration agreement, (ii) Patheon failed to return or destroy confidential information of Procaps, (iii) Patheon was unjustly enriched by obtaining the benefit of such confidential information to which it was not entitled, and (iv) Patheon breached implied duties of good faith and fair dealing in carrying out the collaboration agreement. Procaps seeks (i) with respect to the alleged breaches, compensatory damages and (ii) with respect to the claim for unjust enrichment, (a) disgorgement of profits received by Patheon by using any confidential information of Procaps, (b) repayment for all payments made to Patheon pursuant to the collaboration agreement, and (c) payment for the value of any intellectual property associated with the collaboration agreement. The Company filed its answer to the request for arbitration with the International Court of Arbitration of the International Chamber of Commerce in June 2016. The arbitration hearing on the merits in this matter is currently scheduled for March 2017. The Company has not included any accrual in the consolidated financial statements as of January 31, 2017 related to these matters as a result of its assessment that the likelihood of a material loss in connection with these matters is not probable. However, an adverse outcome in this matter could have a material adverse effect on the Company’s business, results of operations and financial condition. Oral Contraceptive Litigation A civil action is pending in the Commonwealth of Pennsylvania against the Company and one of its customers in connection with the recall of certain lots of allegedly defective products manufactured by the Company for the customer. The customer has given the Company notice of its intent to seek indemnification from the Company for all damages, costs and expenses, pursuant to the manufacturing services agreement between the customer and the Company. The action was filed in Court of Common Pleas of Philadelphia Country, in Philadelphia, Pennsylvania in November 2015 on behalf of 113 plaintiffs who were originally part of a putative class action commenced in state court in Georgia in October 2011 on behalf of 115 plaintiffs and removed by defendants to the United States District Court for the Northern District of Georgia ("Georgia District Court") under the Class Action Fairness Act ("CAFA"). Defendants opposed class certification and class certification was denied. The Georgia action was ordered to proceed as a two -plaintiff action in the Georgia District Court on behalf of the two named plaintiffs, whereupon plaintiffs' lawyers commenced a new action in the Court of Common Pleas in Philadelphia on behalf of the remaining 113 plaintiffs. The two -plaintiff action was dismissed by the Georgia District Court on October 28, 2016 on a motion for summary judgment brought by defendants. Defendants removed the action to the United States District Court for the Eastern District of Pennsylvania ("Pennsylvania District Court"). In September 2016, the Pennsylvania District Court remanded the action back to the Court of Common Pleas in Philadelphia. Defendants appealed the order of remand and, in February 2017, the United States Court of Appeals for the Third Circuit reversed and vacated the Pennsylvania District Court's remand order and remanded the matter to the Pennsylvania District Court for further proceedings. As the litigation is at an early stage, the Company is unable to estimate the potential damages for which the Company may be directly or indirectly liable. Italian Client Dispute In November 2015, the largest client of Patheon Italia S.p.A.’s (‘‘Patheon Italia’’), Ferentino, Italy facility filed a motion for injunctive relief in a Milan court under Article 700 of the Italian Civil Code. The client claims that remediation actions implemented by the Ferentino facility in response to an FDA inspection in May 2015, including, among other things, the use of a third party to certify all production batches for release, caused a significant slowdown in the quality control testing and batch release processes for the client’s product, thereby impairing the client’s ability to supply product in the amounts needed to fulfill the client's needs. The client sought an injunction ordering the Ferentino facility to (i) deliver products set forth in an October 6-7, 2015 release plan discussed by the parties; (ii) transfer products and documentation to the client to enable the client to perform the necessary quality control testing and release the products; and (iii) continue manufacture of the products at the capacity levels set forth in the supply agreement between the parties. The client further asked the court to impose a penalty of €0.2 million per day for every day that the Ferentino facility failed to comply with the order. On December 7, 2015, Patheon Italia filed a response to the motion, denying all the claims set forth in the client’s motion and asserting several defenses. In particular, Patheon Italia informed the court that the parties had in fact executed an amendment to the existing quality agreement agreeing to transfer the testing and release responsibilities to the client, such amendment was executed prior to the filing of the motion by the client and should have been disclosed to the court in the client’s motion. On December 10, 2015, the court held a hearing in this matter and on December 18, 2015, denied the client’s motion. The client has filed an appeal to the court's decision, which was heard on February 11, 2016. On February 29, 2016, the appeals court denied the client's appeal. The supply agreement with the client includes an arbitration provision and in its initial motion, the client indicated its intention to file an arbitration claim seeking money damages in this matter. This matter is in the early stages and the Company is unable to estimate the potential damages for which Patheon Italia may be liable if the client files an arbitration claim and prevails in such proceeding. Statements of cash flows non-cash investing and financing activities Three months ended January 31, 2017 2016 Non-cash financing activities: $ $ Assumption of earnout liability from the Partnership (1) — 36.0 Increase in capital lease obligations 0.6 — (1) Refer to Note 9 for further information |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jan. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On February 1, 2017, the Company completed its acquisition ("Roche Acquisition") of an API facility in Florence, SC from Hoffman-La Roche Ltd. ("Roche") for $1.0 million in cash, plus a payment for certain associated inventory and spare parts. Roche has agreed to provide funds for certain accounts payable, capital expenditures and other liabilities of the facility. Additionally, the Company entered into a multi-year supply arrangement to manufacture certain products for Roche. |
BASIS OF PRESENTATION AND SUM24
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation Patheon consists of three reportable segments: Drug Product Services ("DPS"), Pharmaceutical Development Services ("PDS"), and Drug Substance Services ("DSS"). Drug Product Services provides manufacturing and packaging for approved prescription, over-the-counter, and nutritional products. Pharmaceutical Development Services provides a wide spectrum of advanced formulation, production, and technical services from the early stages of a product's development to regulatory approval and beyond, as well as for new formulations of approved products for life cycle extension. Drug Substance Services provides development and manufacturing for the biologically active component of a pharmaceutical product from early development through commercial production. The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Operating results for the three months ended January 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2017 ("fiscal 2017 "). These consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for annual financial statements and therefore should be read in conjunction with the audited consolidated financial statements and notes for the fiscal year ended October 31, 2016 ("fiscal 2016 "). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect: the reported amounts of assets and liabilities; the disclosure of contingent assets and liabilities at the date of the consolidated financial statements; and the reported amounts of revenue and expenses in the reporting period. Management believes that the estimates and assumptions used in preparing its consolidated financial statements are reasonable and prudent; however, actual results could differ from those estimates. |
Segment information | Segment information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income (loss) based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s four operating segments are: North America Drug Product Services, or North America DPS, Europe Drug Product Services, or Europe DPS, Pharmaceutical Development Services, or PDS and Drug Substance Services, or DSS. The North America DPS and Europe DPS operating segments meet the aggregation criteria to be presented as one reportable segment referred to as DPS. As a result, the Company has determined it has three reportable segments: DPS, PDS, and DSS. Corporate is not an individually reportable segment because the quantitative thresholds have not been met and as such has been reported in Other. |
Recently adopted and issued accounting pronouncements | Recently adopted accounting pronouncements In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This update eliminated the requirement to an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Instead, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company adopted this pronouncement at the start of fiscal 2017 and the impact will be dependent on future transactions. Recently issued accounting pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplified the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This update narrows the definition of outputs and aligns it with how outputs are described in Topic 606. The amendment also provides a more robust framework to use in determining when a set of assets and activities is a business. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future business combinations. Between March and December 2016, the FASB issued four Accounting Standards Updates relating to Revenue from Contracts with Customers (Topic 606). These updates, identified as No. 2016-08, No. 2016-10, No. 2016-12, and No.2016-20 identified practical expedients and clarified various aspects of the new revenue recognition standard outlined in Accounting Standards Update 2014-09. The effective date and transition requirements for ASU 2014-09 (and updated in ASU 2015-14) were not changed with these pronouncements. The Company will be required to implement the new revenue recognition standard starting in fiscal 2019 and is continuing to evaluate the overall impact. From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date or, in some cases where early adoption is permitted, in advance of the specified effective date. The Company has assessed the recently issued standards that are not yet effective and, unless otherwise discussed above or in our audited consolidated financial statements and notes for fiscal 2016 , believes these standards will not have a material impact on the Company’s results of operations, cash flows, or financial position. A more detailed listing of recently issued accounting pronouncements are included in our audited consolidated financial statements and notes for fiscal 2016 . |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Results of Discontinued Operations | The results of the above dispositions have been recorded as discontinued operations, the results of which for the three months ended January 31, 2016 are as follows: Three months ended January 31, 2016 $ Revenues 2.1 Cost of goods sold 1.9 Gross profit 0.2 Selling, general and administrative expenses 0.4 Loss on disposals, net 1.9 Loss before income taxes (2.1 ) Provision for income taxes — Net loss (2.1 ) |
SUPPLEMENTAL BALANCE SHEET IN26
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Supplemental Balance Sheet Information [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: January 31, 2017 October 31, 2016 $ $ Raw materials, packaging components and spare parts 203.7 192.1 Work-in-process 76.7 80.9 Finished goods 126.8 122.2 Balance, end of period 407.2 395.2 |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: January 31, 2017 October 31, 2016 $ $ Trade payables 248.2 279.3 Interest payable 20.9 14.0 Accrued salaries and related expenses 71.0 81.8 Customer deposits 4.9 4.3 Repositioning 4.6 5.4 Other accruals 4.9 8.8 Balance, end of period 354.5 393.6 |
Schedule of Finite-Lived Intangible Assets Acquired | The following table summarizes gross carrying amounts, accumulated amortization, and accumulated impairments related to the Company's identifiable intangible assets as of January 31, 2017 : Definite-lived intangible assets Gross carrying value Accumulated amortization Net carrying value Weighted Average Useful Life (in Years) $ $ $ Favorable agreements 1.0 (1.0 ) — — Trade names 1.6 (0.8 ) 0.8 5.6 Developed technology 54.1 (18.1 ) 36.0 10.8 Trade secrets and patents 2.5 (0.3 ) 2.2 14.5 Customer relationships 248.8 (44.9 ) 203.9 14.2 Non-compete agreements 2.6 (2.0 ) 0.6 3.0 Subtotal 310.6 (67.1 ) 243.5 Foreign exchange (3.6 ) Balance, end of period 239.9 |
Schedule of Indefinite-Lived Intangible Assets Acquired | Indefinite-lived intangible assets Gross carrying value Accumulated impairment Net carrying value $ $ $ In-process research and development 2.2 (0.9 ) 1.3 Regulatory permits 0.2 — 0.2 Subtotal 2.4 (0.9 ) 1.5 Foreign exchange (0.2 ) Balance, end of period 1.3 |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the three months ended January 31, 2017 : Total $ Balance at October 31, 2016 (1) 281.6 Foreign currency translation adjustments (0.1 ) Balance at January 31, 2017 281.5 (1) The opening cumulative goodwill balance is reflective of historical impairment charges of the full value of goodwill. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt in the accompanying consolidated balance sheets at January 31, 2017 and October 31, 2016 consists of the following: As of January 31, 2017 As of October 31, 2016 $ $ USD Term Loan with a base rate plus 2.25% or LIBOR with a floor of 1% plus 3.25% rate, (currently 4.25%), and maturity date of March 10, 2021 (the "Credit Agreement") 1,136.0 1,138.9 Euro Term Loan with a base rate plus 2.50% or LIBOR with a floor of 1% plus 3.50% rate, (currently 4.50%), and maturity date of March 10, 2021 (the "Credit Agreement") 501.2 511.0 7.50% Senior Notes due February 1, 2022 (the "Notes") 450.0 450.0 Secured Revolving Facility balance at base rate plus 2.25% rate (currently 4.00%), and maturity terms on a rolling basis (currently monthly) 20.0 20.0 Government of Austria research and development loans with annual interest rates ranging from 1.56% to 2.00% and maturities through March 2020 3.0 3.5 Italian subsidized loan with annual interest rate of 0.5%, and maturity date of June 30, 2020 3.5 4.1 Italian bank loan with Euribor 6-month + 7.1% rate, and maturity date of June 30, 2020 0.7 0.7 Capital lease obligations 1.2 0.7 Total long-term debt outstanding 2,115.6 2,128.9 Less original issue discount, net of accumulated amortization of $6.7 million and $6.2 million, respectively (9.4 ) (9.9 ) Less current portion (19.6 ) (19.5 ) Balance, end of the period 2,086.6 2,099.5 |
Schedule of Maximum Leverage Ratio | The following table discloses the maximum First Lien Leverage Ratios permitted under the Credit Agreement: Testing Period Ending Maximum Ratio April 30, 2014 through October 31, 2014 6.75 to 1.00 November 1, 2014 through October 31, 2015 6.50 to 1.00 November 1, 2015 through October 31, 2016 6.25 to 1.00 November 1, 2016 through October 31, 2017 6.00 to 1.00 November 1, 2017 and thereafter 5.75 to 1.00 |
Schedule of Redemption Prices | On and after February 1, 2017, the Company may redeem all or a portion of the Notes at the applicable redemption prices set forth below (expressed as percentages of principal amount redeemed), plus unpaid interest accruing on the principal amount redeemed to the Redemption Date: Year % 2017 105.625 2018 103.750 2019 101.875 2020 and thereafter 100.000 |
PENSION AND POST-RETIREMENT B28
PENSION AND POST-RETIREMENT BENEFITS (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Postemployment Benefits [Abstract] | |
Schedule of Net Periodic Benefit Cost | The components of net periodic benefit cost from continuing operations for the defined benefit plans and other benefit plans for the three months ended January 31, 2017 and 2016 were as follows: Three months ended January 31, 2017 2016 Defined benefit pension plans Other benefit plans Defined benefit pension plans Other benefit plans $ $ $ $ Service cost 0.6 — 0.5 — Interest cost 1.0 0.1 1.3 0.1 Expected return on plan assets (1.0 ) — (1.3 ) — Amortization of actuarial loss 0.7 — 0.4 — Net periodic benefit costs 1.3 0.1 0.9 0.1 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The details of the computation of basic and diluted earnings (loss) per ordinary share are as follows: Three months ended January 31, 2017 2016 Numerator (in millions): Income (loss) from continuing operations $ 28.3 $ (20.0 ) Loss from discontinued operations $ — $ (2.1 ) Denominator: Weighted-average number of shares of ordinary shares - basic 145,128,652 115,609,756 Effect of dilutive securities: Restricted stock units 1,139,918 — Stock options 17,170 — Weighted-average number of shares of ordinary shares - diluted 146,285,740 115,609,756 Earnings (loss) per ordinary share - basic: From continuing operations $ 0.19 $ (0.17 ) From discontinued operations $ — $ (0.02 ) Earnings (loss) per ordinary share - diluted: From continuing operations $ 0.19 $ (0.17 ) From discontinued operations $ — $ (0.02 ) |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Based Compensation | A summary of equity based compensation expense recognized during the three months ended January 31, 2017 and 2016 is as follows: Three months ended January 31, 2017 2016 $ $ Management Equity Incentive Plan (MEIP) 2.3 1.0 Restricted Stock Units 1.3 — Stock Options 0.4 — Stock Based Compensation Expense 4.0 1.0 A summary of Standard RSUs activity for the three months ended January 31, 2017 is as follows: Restricted Share Units Weighted Average Grant Date Fair Value $ Outstanding as of October 31, 2016 450,184 21.00 Granted 6,000 25.61 Vested (59,525 ) 21.00 Outstanding as of January 31, 2017 396,659 21.07 A summary of stock option activity for the three months ended January 31, 2017 is as follows: Stock Options Weighted Average Fair Value $ Outstanding as of October 31, 2016 1,021,584 8.29 Granted 9,000 9.69 Outstanding as of January 31, 2017 1,030,584 8.30 |
Schedule of Plan Activity | A summary of the MEIP activity for the three months ended January 31, 2017 is as follows: Class B Class C Class D Class E Total Weighted Average Fair Value Outstanding as of October 31, 2016 59,290 8,470 8,470 8,470 84,700 $ 687.27 Forfeited (288 ) (50 ) (50 ) (50 ) (438 ) $ 870.09 Outstanding as of January 31, 2017 59,002 8,420 8,420 8,420 84,262 $ 686.32 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The model incorporated the following assumptions: Risk free interest rate 0.9 % Expected volatility 41.6 % Estimated years to exit event 3.0 The estimated fair value of stock options granted at the time of the IPO is $8.29 per option and was estimated using a Black-Scholes valuation model, using the following assumptions: Risk free interest rate 1.3 % Expected volatility 39.4 % Expected life of options (in years) 6.0 Dividend yield — % |
FINANCIAL INSTRUMENTS, FAIR V31
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT(Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value | The following table provides a summary of the financial assets and liabilities that are measured at fair value as of January 31, 2017 and October 31, 2016 : Fair value measurement at January 31, 2017 Fair value measurement at October 31, 2016 Assets measured at fair value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ $ $ $ $ $ $ $ Foreign exchange forward contracts — 1.0 — 1.0 — — — — Available-for-sale securities 1.4 — — 1.4 1.4 — — 1.4 Held-for-trading securities — 1.4 — 1.4 — 1.4 — 1.4 Total assets 1.4 2.4 — 3.8 1.4 1.4 — 2.8 Fair value measurement at January 31, 2017 Fair value measurement at October 31, 2016 Liabilities measured at fair value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ $ $ $ $ $ $ $ Foreign exchange forward contracts — — — — — 2.7 — 2.7 Earnout liability — — 37.4 37.4 — — 33.8 33.8 Total liabilities — — 37.4 37.4 — 2.7 33.8 36.5 Level 1 - Based on quoted market prices in active markets. Level 2 - Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3 - Unobservable inputs that are not corroborated by market data. |
Schedule of Derivative Financial Instruments and Investments Classification on Consolidated Balance Sheet | The following table presents the fair value of the Company's derivative financial instruments and their classifications on the consolidated balance sheets as of January 31, 2017 and October 31, 2016 : Assets as of January 31, 2017 Assets as of October 31, 2016 Balance sheet location Fair value Balance sheet location Fair value $ $ Foreign exchange forward contracts Prepaid expenses and other 1.0 Prepaid expenses and other — Available-for-sale securities Investments 1.4 Investments 1.4 Held-for-trade securities Investments 1.4 Investments 1.4 Total 3.8 2.8 Liabilities as of January 31, 2017 Liabilities as of October 31, 2016 Balance sheet location Fair value Balance sheet location Fair value $ $ Foreign exchange forward contracts Accounts payable and accrued liabilities — Accounts payable and accrued liabilities 2.7 Earnout liability Other long-term liabilities 37.4 Other long-term liabilities 33.8 Total 37.4 36.5 |
Schedule of Fair Values and Carrying Values of Long-term Debt | As of January 31, 2017 , the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below: Fair Value Level 1 Level 2 Level 3 Total Carrying Value $ $ $ $ $ Long-term debt, including current portion — 2,154.2 — 2,154.2 2,106.2 As of October 31, 2016 , the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below: Fair Value Level 1 Level 2 Level 3 Total Carrying Value $ $ $ $ $ Long-term debt, including current portion — 2,156.8 — 2,156.8 2,119.0 |
Schedule of Earnout Liability Activity | The earnout liability activity is summarized as follows for the three months ended January 31, 2017 : Total $ Balance at October 31, 2016 33.8 Change in fair value 3.6 Balance at January 31, 2017 37.4 |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the foreign currency activity on the intercompany loans that are included as part of the net investment in certain foreign subsidiaries for the three months ended January 31, 2017 and 2016 since net investment hedge inception: Three months ended January 31, 2017 2016 $ $ Foreign exchange loss for the period from long-term intercompany loan revaluation — (0.8 ) The following table summarizes the net investment hedge foreign exchange activity for the three months ended January 31, 2017 and 2016 since net investment hedge inception: Three months ended January 31, 2017 2016 $ $ Foreign exchange gain for the period from net investment hedge 8.6 8.0 Release of ineffective portion of net investment hedge to consolidated statement of operations — (1.1 ) Net gain to other comprehensive income (loss) for the period related to net investment hedge 8.6 6.9 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Three months ended January 31, 2017 DPS PDS DSS Other Total $ $ $ $ $ Revenues 275.2 52.3 129.9 — 457.4 Adjusted EBITDA 61.4 16.3 32.0 (27.2 ) 82.5 Depreciation and amortization 15.3 1.8 9.7 0.8 27.6 Capital expenditures 36.9 1.4 17.9 2.8 59.0 Three months ended January 31, 2016 DPS PDS DSS Other Total $ $ $ $ $ Revenues 258.5 48.5 98.9 — 405.9 Adjusted EBITDA 55.1 13.8 14.8 (24.7 ) 59.0 Depreciation and amortization 14.8 1.2 9.9 0.5 26.4 Capital expenditures 45.0 9.7 7.3 2.2 64.2 |
Reconciliation of Adjusted EBITDA | Below is a reconciliation of Adjusted EBITDA to its most comparable U.S. GAAP measure. Three months ended January 31, 2017 2016 $ $ Total Adjusted EBITDA 82.5 59.0 Depreciation and amortization (27.6 ) (26.4 ) Repositioning expenses (1) (1.3 ) (1.2 ) Acquisition and integration costs (3.5 ) (2.6 ) Interest expense, net (28.2 ) (43.8 ) Benefit from income taxes 21.3 0.7 Operational initiatives related consulting costs (1.1 ) (1.4 ) IPO costs — (0.4 ) Acquisition related litigation expenses (2.3 ) (1.0 ) Stock based compensation expense (4.0 ) (1.0 ) FDA remediation costs — (8.4 ) Environmental remediation costs (3.7 ) — Other (3.8 ) 6.5 Net income (loss) from continuing operations 28.3 (20.0 ) (1) Repositioning expenses for the three months ended January 31, 2017 includes $0.7 million of inventory reserves related to the Swindon wind down recorded in cost of goods sold. |
Schedule of Revenue, Capital Assets and Goodwill, by Country | As illustrated in the table below, revenues are attributed to countries based on the location of the customer's billing address, capital assets are attributed to the country in which they are located and goodwill is attributed to the country in which the entity to which the goodwill pertains is located: As of and for the three months ended January 31, 2017 Canada US* Europe Other** Total $ $ $ $ $ Revenues 7.0 301.1 132.7 16.6 457.4 Capital Assets 104.3 528.9 356.2 14.8 1,004.2 Goodwill 2.6 269.4 7.3 2.2 281.5 * Includes Puerto Rico ** Primarily includes Japan As of and for the three months ended January 31, 2016 Canada US* Europe Other** Total $ $ $ $ $ Revenues 7.3 271.8 111.9 14.9 405.9 Capital Assets 91.6 466.6 314.5 15.5 888.2 Goodwill 2.5 272.3 7.3 2.0 284.1 * Includes Puerto Rico ** Primarily includes Bermuda, Japan and other Asian countries |
REPOSITIONING EXPENSES (Tables)
REPOSITIONING EXPENSES (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following is a summary of these expenses and other charges associated with operational improvements as of and for the three months ended January 31, 2017 and 2016 : As of and for the three months ended January 31, 2017 DPS PDS DSS Other Total $ $ $ $ $ Total repositioning liability at October 31, 2016 5.4 Employee-related expenses 0.2 — — 0.4 0.6 Repositioning expenses paid (1.5 ) Foreign exchange 0.1 Total repositioning liability at January 31, 2017 4.6 The balance of repositioning liabilities as of January 31, 2017 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company does not have any long-term repositioning liabilities as of January 31, 2017 . As of and for the three months ended January 31, 2016 DPS PDS DSS Other Total $ $ $ $ $ Total repositioning liability at October 31, 2015 22.9 Employee-related expenses 1.1 — 0.1 — 1.2 Repositioning expenses paid (18.7 ) Foreign exchange (0.5 ) Total repositioning liability at January 31, 2016 4.9 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Values as of Equity Method Investment Values January 31, 2017 October 31, 2016 $ $ Banner Life Sciences 2.7 2.9 Percivia 5.7 5.7 Chemiepark 0.1 0.1 Total 8.5 8.7 The expenses relating to these services are charged to BLS and the related accounts receivable outstanding in relation to these services are shown in the tables below. We performed production services for BLS in the first quarter of fiscal 2016 before BLS sold their commercial business to a third party. Three months ended January 31, Revenues/Expenses 2017 2016 $ $ JLL Partners Expenses — 0.1 DSM Revenues 0.2 0.1 DSM Expenses 3.2 2.7 Banner Life Sciences Revenues — 6.5 Balances as of Accounts Receivable/Payable Balances January 31, 2017 October 31, 2016 $ $ DSM Accounts Receivable 0.4 0.4 DSM Accounts Payable 0.2 0.2 Banner Life Sciences Accounts Receivable 0.7 1.1 Three months ended January 31, Equity Method (Loss)/Gain 2017 2016 $ $ Banner Life Sciences (0.1 ) 1.8 Percivia — 0.1 Total (0.1 ) 1.9 |
OTHER INFORMATION (Tables)
OTHER INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2017 | |
Other Information [Abstract] | |
Statements of Cash Flows Non-cash Investing and Financing Activities | Statements of cash flows non-cash investing and financing activities Three months ended January 31, 2017 2016 Non-cash financing activities: $ $ Assumption of earnout liability from the Partnership (1) — 36.0 Increase in capital lease obligations 0.6 — (1) Refer to Note 9 for further information |
THE COMPANY - Narrative (Detail
THE COMPANY - Narrative (Details) $ / shares in Units, $ in Millions | Jul. 26, 2016USD ($) | Jul. 21, 2016USD ($)shares | Jan. 31, 2017vote€ / sharesshares | Oct. 31, 2016€ / shares | Jul. 21, 2016€ / sharesshares | Jul. 21, 2016$ / sharesshares | Dec. 24, 2013 |
Other Ownership Interests [Line Items] | |||||||
Proceeds from partner contribution | $ | $ 1.2 | ||||||
Common stock, shares outstanding (in shares) | 145,128,652 | 115,609,756 | 115,609,756 | ||||
Common stock, par value (in euros per share) | € / shares | € 0.01 | € 0.01 | € 0.01 | ||||
Proceeds from IPO | $ | $ 584.8 | ||||||
Number of voting rights | vote | 1 | ||||||
JLL Patheon Co-Investment Fund L.P. | |||||||
Other Ownership Interests [Line Items] | |||||||
Ownership percentage by parent | 38.00% | 51.00% | |||||
Koninklijke DSM | |||||||
Other Ownership Interests [Line Items] | |||||||
Ownership percentage by parent | 34.00% | 49.00% | |||||
JLL/Delta Patheon Holdings | |||||||
Other Ownership Interests [Line Items] | |||||||
Ownership percentage by parent | 4.00% | ||||||
IPO | |||||||
Other Ownership Interests [Line Items] | |||||||
Issuance of ordinary shares (in shares) | 29,464,286 | ||||||
IPO price per shares (in USD per share) | $ / shares | $ 21 | ||||||
Rights to purchase addition ordinary shares (in shares) | 4,464,286 | ||||||
Total number of ordinary shares sold in connection with IPO (in shares) | 34,226,191 | ||||||
Percentage of voting stock publicly owned | 24.00% | ||||||
IPO | Koninklijke DSM | |||||||
Other Ownership Interests [Line Items] | |||||||
Issuance of ordinary shares (in shares) | 4,761,905 |
BASIS OF PRESENTATION AND SUM37
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended |
Jan. 31, 2017segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 4 |
DPS reportable segment | 1 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - Disposed of by sale € in Millions, $ in Millions | Jul. 31, 2015USD ($) | May 12, 2015USD ($) | Jan. 31, 2016EUR (€) | Jan. 31, 2016USD ($) | Aug. 31, 2015EUR (€) | Jul. 31, 2015EUR (€) |
Banner Pharmacaps | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash purchase price | $ 36.4 | |||||
Gain (loss) on disposals | $ 2.6 | |||||
Biosolutions | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash purchase price | € | € 0.3 | |||||
Gain (loss) on disposals | $ (24) | |||||
DPx Fine Chemicals | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash purchase price | € | € 179 | |||||
Gain (loss) on disposals | $ 107 | |||||
Proceeds from working capital | € | € 3 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Dispositions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss | $ 0 | $ (2.1) |
DPx Fine Chemicals | Disposed of by sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | 2.1 | |
Cost of goods sold | 1.9 | |
Gross profit | 0.2 | |
Selling, general and administrative expenses | 0.4 | |
Loss on disposals, net | 1.9 | |
Loss before income taxes | (2.1) | |
Provision for income taxes | 0 | |
Net loss | $ (2.1) |
SUPPLEMENTAL BALANCE SHEET IN40
SUPPLEMENTAL BALANCE SHEET INFORMATION - Inventories (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Supplemental Balance Sheet Information [Abstract] | ||
Raw materials, packaging components and spare parts | $ 203.7 | $ 192.1 |
Work-in-process | 76.7 | 80.9 |
Finished goods | 126.8 | 122.2 |
Balance, end of period | $ 407.2 | $ 395.2 |
SUPPLEMENTAL BALANCE SHEET IN41
SUPPLEMENTAL BALANCE SHEET INFORMATION - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Supplemental Balance Sheet Information [Abstract] | ||
Trade payables | $ 248.2 | $ 279.3 |
Interest payable | 20.9 | 14 |
Accrued salaries and related expenses | 71 | 81.8 |
Customer deposits | 4.9 | 4.3 |
Repositioning | 4.6 | 5.4 |
Other accruals | 4.9 | 8.8 |
Balance, end of period | $ 354.5 | $ 393.6 |
SUPPLEMENTAL BALANCE SHEET IN42
SUPPLEMENTAL BALANCE SHEET INFORMATION - Finite-Lived Intangible Assets Acquired (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 310.6 |
Accumulated amortization | (67.1) |
Net carrying value | 243.5 |
Foreign exchange | (3.6) |
Balance, end of period | 239.9 |
Favorable agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | 1 |
Accumulated amortization | (1) |
Net carrying value | $ 0 |
Weighted Average Useful Life (in Years) | 0 years |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 1.6 |
Accumulated amortization | (0.8) |
Net carrying value | $ 0.8 |
Weighted Average Useful Life (in Years) | 5 years 7 months 6 days |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 54.1 |
Accumulated amortization | (18.1) |
Net carrying value | $ 36 |
Weighted Average Useful Life (in Years) | 10 years 9 months 18 days |
Trade secrets and patents | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 2.5 |
Accumulated amortization | (0.3) |
Net carrying value | $ 2.2 |
Weighted Average Useful Life (in Years) | 14 years 6 months |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 248.8 |
Accumulated amortization | (44.9) |
Net carrying value | $ 203.9 |
Weighted Average Useful Life (in Years) | 14 years 2 months 12 days |
Non-compete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 2.6 |
Accumulated amortization | (2) |
Net carrying value | $ 0.6 |
Weighted Average Useful Life (in Years) | 3 years |
SUPPLEMENTAL BALANCE SHEET IN43
SUPPLEMENTAL BALANCE SHEET INFORMATION - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 2.4 | |
Accumulated impairment | (0.9) | |
Net carrying value | 1.5 | |
Foreign exchange | (0.2) | |
Balance, end of period | 1.3 | |
In-process research and development | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying value | 2.2 | |
Accumulated impairment | (0.9) | |
Net carrying value | 1.3 | |
In-process research and development | BLS | Spinoff | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 7.9 | |
Net carrying value | $ 3.6 | |
Regulatory permits | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying value | 0.2 | |
Accumulated impairment | 0 | |
Net carrying value | $ 0.2 |
SUPPLEMENTAL BALANCE SHEET IN44
SUPPLEMENTAL BALANCE SHEET INFORMATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying value | $ 1.5 | |
Gross carrying value | 2.4 | |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying value | 1.3 | |
Gross carrying value | $ 2.2 | |
In-process research and development | BLS | Spinoff | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying value | $ 3.6 | |
Gross carrying value | 7.9 | |
Impairment losses | $ 4.3 |
SUPPLEMENTAL BALANCE SHEET IN45
SUPPLEMENTAL BALANCE SHEET INFORMATION - Goodwill (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 281.6 |
Foreign currency translation adjustments | (0.1) |
Goodwill, end of period | $ 281.5 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt in Accompanying balance Sheet (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Jan. 31, 2017 | Jul. 31, 2013 | Oct. 31, 2016 | Oct. 31, 2015 | Feb. 28, 2014 | |
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 2,115.6 | $ 2,128.9 | |||
Less original issue discount, net of accumulated amortization of $6.7 million and $6.2 million, respectively | (9.4) | (9.9) | |||
Less current portion | (19.6) | $ (19.5) | (19.5) | ||
Balance, end of the period | 2,086.6 | $ 2,099.5 | 2,099.5 | ||
Accumulated amortization | 6.7 | 6.2 | |||
Domestic credit agreement | USD term loan due March 2021 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 1,136 | 1,138.9 | |||
Current interest rate (as percent) | 4.25% | ||||
Domestic credit agreement | USD term loan due March 2021 | Base rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 2.25% | ||||
Domestic credit agreement | USD term loan due March 2021 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 3.25% | ||||
Variable interest rate floor (as percent) | 1.00% | ||||
Foreign credit agreement | Euro term loan due March 2021 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 501.2 | 511 | |||
Current interest rate (as percent) | 4.50% | ||||
Foreign credit agreement | Euro term loan due March 2021 | Base rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 2.50% | ||||
Foreign credit agreement | Euro term loan due March 2021 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 3.50% | ||||
Variable interest rate floor (as percent) | 1.00% | ||||
Senior notes | 7.50% senior notes due February 2022 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 450 | 450 | |||
Stated rate (as percent) | 7.50% | 7.50% | |||
Loan | Government of Austria research and development loans due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 3 | 3.5 | |||
Loan | Italian subsidized loan due June 2020 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 3.5 | 4.1 | |||
Stated rate (as percent) | 0.50% | 0.50% | |||
Loan | Italian bank loan due June 2020 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 0.7 | 0.7 | |||
Loan | Italian bank loan due June 2020 | Euribor rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 7.10% | 7.10% | |||
Capital lease obligations | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 1.2 | 0.7 | |||
Minimum | Government of Austria research and development loans due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Stated rate (as percent) | 1.56% | ||||
Maximum | Government of Austria research and development loans due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Stated rate (as percent) | 2.00% | ||||
Secured revolving credit facility | Seller financing, non-Interest Bearing Loan Due May 2016 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 20 | $ 20 | |||
Basis spread (as percent) | 2.25% | ||||
Current interest rate (as percent) | 4.00% |
LONG-TERM DEBT - 2014 Term Loan
LONG-TERM DEBT - 2014 Term Loans and Revolving Line (Details) | Mar. 31, 2015EUR (€)debt_instrument | Sep. 29, 2014EUR (€)debt_instrument | Mar. 11, 2014USD ($) | Jan. 31, 2017USD ($) | Mar. 31, 2015USD ($) | Sep. 29, 2014USD ($) | Mar. 11, 2014EUR (€) | Mar. 11, 2014USD ($) |
Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of incremental debt instruments | debt_instrument | 2 | |||||||
Line of credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum percentage of consolidated total assets (as percent) | 3.00% | |||||||
Additional threshold amount for dividend distribution | $ 65,000,000 | |||||||
Line of credit | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of incremental debt instruments | debt_instrument | 2 | |||||||
Prepayment amount from net cash proceeds of certain asset sales including insurance and condemnation proceeds, percentage | 100.00% | |||||||
Prepayment amount from net cash proceeds of issuance of debt obligations, percentage | 100.00% | |||||||
Prepayment amount from excess cash flows, value | $ 0 | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Greater than 4.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 4 | 4 | ||||||
Prepayment amount of excess cash flows, percentage | 50.00% | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment amount of excess cash flows, percentage | 25.00% | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 3.50 | 3.50 | ||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 4 | 4 | ||||||
Line of credit | Secured term loan | First Lien Leverage Ratio of Less Than or Equal to 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 3.50 | 3.50 | ||||||
Prepayment amount of excess cash flows, percentage | 0.00% | |||||||
Line of credit | Secured revolving credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of business days following deadline to be in compliance with First Lien Leverage Ratio | 11 days | |||||||
Line of credit | Secured revolving credit facility | Secured revolving facility due March 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility amount | $ 200,000,000 | |||||||
Unused capacity, commitment fee percentage (as percent) | 0.50% | |||||||
Minimum borrowing amount to maintain First Lien Leverage Ratio, percentage | 25.00% | 25.00% | 25.00% | |||||
Minimum borrowing amount to maintain First Lien Leverage Ratio | $ 50,000,000 | $ 50,000,000 | ||||||
Line of credit | Secured revolving credit facility | Secured revolving facility due March 2019 | FIrst Lien Leverage Ratio is less than or equal to 3.00 to 1.00 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused capacity, commitment fee percentage (as percent) | 0.375% | |||||||
Leverage ratio (as percent) | 3 | 3 | ||||||
Line of credit | Secured revolving credit facility | Eurodollar | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Line of credit | Letter of credit | Secured revolving facility due March 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility amount | $ 75,000,000 | |||||||
Domestic credit agreement | USD term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Domestic credit agreement | USD term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Domestic credit agreement | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | $ 20,000,000 | $ 160,000,000 | ||||||
Amount of borrowings outstanding | $ 20,000,000 | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | 985,000,000 | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Euro term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.50% | |||||||
Foreign credit agreement | Euro term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.50% | |||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | € 155,000,000 | € 70,000,000 | $ 164,300,000 | $ 88,700,000 | ||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | € 250,000,000 | $ 345,000,000 | ||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.50% | |||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.50% | |||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Secured revolving credit facility | Canadian prime rate loans | Prime rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Foreign credit agreement | Secured revolving credit facility | Canadian base rate loans | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% |
LONG-TERM DEBT - Schedule of Ma
LONG-TERM DEBT - Schedule of Maximum Leverage Ratios (Details) - Line of credit - Secured revolving credit facility - Secured revolving facility due March 2019 | Mar. 11, 2014 |
April 30, 2014 through October 31, 2014 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.75 |
November 1, 2014 through October 31, 2015 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.50 |
November 1, 2015 through October 31, 2016 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.25 |
November 1, 2016 through October 31, 2017 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6 |
November 1, 2017 and thereafter | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 5.75 |
LONG-TERM DEBT - 2014 Senior Un
LONG-TERM DEBT - 2014 Senior Unsecured Notes (Details) - Senior notes - 7.50% senior notes due February 2022 - USD ($) | Jan. 31, 2017 | Feb. 28, 2014 |
Debt Instrument [Line Items] | ||
Amount of debt issued | $ 450,000,000 | |
Stated rate (as percent) | 7.50% | 7.50% |
LONG-TERM DEBT - Schedule of Re
LONG-TERM DEBT - Schedule of Redemption Rates (Details) - Senior notes - 7.50% senior notes due February 2022 | 1 Months Ended |
Feb. 28, 2014 | |
2,017 | |
Debt Instrument [Line Items] | |
Redemption price (as percent) | 105.625% |
2,018 | |
Debt Instrument [Line Items] | |
Redemption price (as percent) | 103.75% |
2,019 | |
Debt Instrument [Line Items] | |
Redemption price (as percent) | 101.875% |
2020 and thereafter | |
Debt Instrument [Line Items] | |
Redemption price (as percent) | 100.00% |
LONG-TERM DEBT - Other Financin
LONG-TERM DEBT - Other Financing Arrangements (Details) $ in Millions | 3 Months Ended | ||||
Jan. 31, 2017USD ($) | Apr. 30, 2016EUR (€) | Jul. 31, 2013EUR (€)paymentdebt_instrument | Oct. 31, 2015USD ($) | Aug. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 2,115.6 | $ 2,128.9 | |||
Investment in Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term investment commitment, minimum amount | $ 47 | ||||
Loan | |||||
Debt Instrument [Line Items] | |||||
Number of incremental debt instruments | debt_instrument | 2 | ||||
Loan | Italian subsidized loan due June 2020 | |||||
Debt Instrument [Line Items] | |||||
Amount of debt issued | € | € 6,000,000 | ||||
Proceeds from long-term debt | € | € 600,000 | € 5,400,000 | |||
Stated rate (as percent) | 0.50% | 0.50% | |||
Total long-term debt outstanding | $ 3.5 | 4.1 | |||
Loan | Italian bank loan due June 2020 | |||||
Debt Instrument [Line Items] | |||||
Amount of debt issued | € | € 700,000 | ||||
Proceeds from long-term debt | € | € 100,000 | € 600,000 | |||
Number of semi-annual installments | payment | 6 | ||||
Total long-term debt outstanding | $ 0.7 | 0.7 | |||
Loan | Italian bank loan due June 2020 | Euribor rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread (as percent) | 7.10% | 7.10% | |||
Loan | Government of Austria research and development loans due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt outstanding | $ 3 | $ 3.5 | |||
Other Obligations | |||||
Debt Instrument [Line Items] | |||||
Percentage of property tax payment due (as percent) | 50.00% |
PENSION AND POST-RETIREMENT B52
PENSION AND POST-RETIREMENT BENEFITS - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Defined benefit pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0.6 | $ 0.5 |
Interest cost | 1 | 1.3 |
Expected return on plan assets | (1) | (1.3) |
Amortization of actuarial loss | 0.7 | 0.4 |
Net periodic benefit costs | 1.3 | 0.9 |
Other benefit plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 0.1 | 0.1 |
Expected return on plan assets | 0 | 0 |
Amortization of actuarial loss | 0 | 0 |
Net periodic benefit costs | $ 0.1 | $ 0.1 |
PENSION AND POST-RETIREMENT B53
PENSION AND POST-RETIREMENT BENEFITS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | Oct. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Anticipated contributions required under the defined benefit pension plans and other benefit plans | $ 3.9 | ||
Contributions made under the defined benefit pension plans and other benefit plans | $ 5.2 | ||
Employee future benefit expense | 2.3 | $ 1.7 | |
Italy | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred compensation arrangement employer contribution | 3.9 | $ 3.4 | |
Deferred compensation arrangement employer contribution related expenses | $ 0.9 | $ 0.7 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Income (loss) from continuing operations | $ 28.3 | $ (20) |
Loss from discontinued operations | $ 0 | $ (2.1) |
Weighted-average number of shares of ordinary shares - basic | 145,128,652 | 115,609,756 |
Effect of dilutive securities: | ||
Weighted-average number of shares of ordinary shares - diluted (in shares) | 146,285,740 | 115,609,756 |
Earnings (loss) per ordinary share - basic: | ||
From continuing operations (in USD per share) | $ 0.19 | $ (0.17) |
From discontinued operations (in USD per share) | 0 | (0.02) |
Earnings (loss) per ordinary share - diluted: | ||
From continuing operations (in USD per share) | 0.19 | (0.17) |
From discontinued operations (in USD per share) | $ 0 | $ (0.02) |
Restricted Stock Units | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 1,139,918 | 0 |
Stock Options | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 17,170 | 0 |
STOCK BASED COMPENSATION - Sche
STOCK BASED COMPENSATION - Schedule of Share Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Based Compensation Expense | $ 4 | $ 1 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Based Compensation Expense | 1.3 | 0 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Based Compensation Expense | 0.4 | 0 |
Management Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Based Compensation Expense | $ 2.3 | $ 1 |
STOCK BASED COMPENSATION - Mana
STOCK BASED COMPENSATION - Management Equity Incentive Plan (MEIP) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Jan. 31, 2017USD ($)tranche$ / sharesshares | Jan. 31, 2016USD ($) | Oct. 31, 2016shares | Jul. 26, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4 | $ 1 | ||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted share units under the omnibus Plan (in shares) | shares | 396,659 | 450,184 | ||
Estimated fair value of MEIP RSU's (in USD per share) | $ / shares | $ 25.61 | |||
Stock-based compensation expense | $ 1.3 | 0 | ||
Compensation costs not yet recognized | $ 5.5 | |||
IPO | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share price (in USD per share) | $ / shares | $ 21 | |||
Management Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of valuation tranches | tranche | 5 | |||
Stock-based compensation expense | $ 2.3 | 1 | ||
Management Equity Incentive Plan | Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares distributed to be held for MEIP participants (in shares) | shares | 6,106,540 | |||
Management Equity Incentive Plan | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Restricted share units under the omnibus Plan (in shares) | shares | 3,388,481 | |||
Share price target (in USD per share) | $ / shares | $ 48.47 | |||
Estimated fair value of MEIP RSU's (in USD per share) | $ / shares | $ 8.41 | |||
Management Equity Incentive Plan | IPO | Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share price (in USD per share) | $ / shares | $ 21 | |||
Management Equity Incentive Plan | Class B | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Threshold percentage of ownership of equity securities for exit event (less than) | 20.00% | |||
Percentage of excess capital contributions received to trigger an Exit Event | 250.00% | |||
Compensation costs not yet recognized | $ 32.3 | |||
Compensation costs not yet recognized, to be recognized before Exit Event | $ 3.8 | |||
Management Equity Incentive Plan | Class B | Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percent of service-based units | 71.40% | |||
Vesting period | 4 years | |||
Stock-based compensation expense | $ 1.5 | $ 1 | ||
Compensation costs not yet recognized | 10.5 | |||
Management Equity Incentive Plan | Class B | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0.2 | |||
Management Equity Incentive Plan | Class C | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Class C, class D, and class E vesting thresholds | 200.00% | |||
Management Equity Incentive Plan | Class D | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Class C, class D, and class E vesting thresholds | 250.00% | |||
Management Equity Incentive Plan | Class E | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Class C, class D, and class E vesting thresholds | 300.00% | |||
Management Equity Incentive Plan | Common Class C, Class D, Class E Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0.6 | |||
Compensation costs not yet recognized | 10.2 | |||
Management Equity Incentive Plan | Common Class C, Class D, Class E Stock | Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 9 | |||
Management Equity Incentive Plan | Common Class C, Class D, Class E Stock | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1.5 |
STOCK BASED COMPENSATION - Sc57
STOCK BASED COMPENSATION - Schedule of Plan Activity (Details) - Stock-based Compensation - Management Equity Incentive Plan | 3 Months Ended |
Jan. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | 84,700 |
Forfeited (in shares) | (438) |
Ending balance (in shares) | 84,262 |
Weighted Average Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 687.27 |
Forfeited (in USD per share) | $ / shares | 870.09 |
Ending balance (in USD per share) | $ / shares | $ 686.32 |
Class B | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | 59,290 |
Forfeited (in shares) | (288) |
Ending balance (in shares) | 59,002 |
Class C | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | 8,470 |
Forfeited (in shares) | (50) |
Ending balance (in shares) | 8,420 |
Class D | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | 8,470 |
Forfeited (in shares) | (50) |
Ending balance (in shares) | 8,420 |
Class E | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | 8,470 |
Forfeited (in shares) | (50) |
Ending balance (in shares) | 8,420 |
STOCK BASED COMPENSATION - Fair
STOCK BASED COMPENSATION - Fair Value Assumptions (Details) - Management Equity Incentive Plan | 3 Months Ended |
Jan. 31, 2017 | |
Stock-based Compensation | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate (in percent) | 0.90% |
Expected volatility (in percent) | 41.60% |
Estimated years to exit event | 3 years |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate (in percent) | 1.30% |
Expected volatility (in percent) | 39.40% |
Estimated years to exit event | 6 years |
Dividend yield (in percent) | 0.00% |
STOCK BASED COMPENSATION - Rest
STOCK BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 01, 2016 | Jul. 26, 2016 | Jan. 31, 2017 | Jan. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4 | $ 1 | ||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 6,000 | |||
Stock-based compensation expense | $ 1.3 | $ 0 | ||
Compensation costs not yet recognized | $ 5.5 | |||
IPO | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share price (in USD per share) | $ 21 | |||
Management | IPO | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 6,000 | 460,801 | ||
Share price (in USD per share) | $ 25.61 | |||
Director | IPO | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 59,525 | 59,525 | ||
Vesting period | 3 years | |||
Share price (in USD per share) | $ 25.61 | |||
Purchases in period (in shares) | 4,915 |
STOCK BASED COMPENSATION - Summ
STOCK BASED COMPENSATION - Summary of Restricted Stock Units (Details) - Restricted Stock Units | 3 Months Ended |
Jan. 31, 2017$ / sharesshares | |
Restricted Share Units | |
Beginning balance (in shares) | 450,184 |
Granted (in shares) | 6,000 |
Vested (in shares) | (59,525) |
Forfeitures (in shares) | 0 |
Ending balance (in shares) | 396,659 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 21 |
Granted (in USD per share) | $ / shares | 25.61 |
Vested (in USD per share) | $ / shares | 21 |
Ending balance (in USD per share) | $ / shares | $ 21.07 |
STOCK BASED COMPENSATION - Stoc
STOCK BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 01, 2016 | Jul. 26, 2016 | Jan. 31, 2017 | Jan. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4 | $ 1 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 9,000 | |||
Exercised (in shares) | $ 9.69 | |||
Stock-based compensation expense | $ 0.4 | $ 0 | ||
Compensation costs not yet recognized | 1.6 | |||
Stock Options | EBITDA Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation costs not yet recognized | $ 5.9 | |||
IPO | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 1,145,338 | |||
Share price (in USD per share) | $ 21 | |||
Estimate fair value of stock options (in USD per share)) | $ 8.29 | |||
IPO | Stock Options | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 431,052 | |||
Vesting period | 3 years | |||
Management | IPO | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 9,000 | |||
Share price (in USD per share) | $ 9.69 | |||
Exercised (in shares) | $ 25.61 |
STOCK BASED COMPENSATION - Sc62
STOCK BASED COMPENSATION - Schedule of Stock Options (Details) - Stock Options | 3 Months Ended |
Jan. 31, 2017$ / sharesshares | |
Stock Options | |
Beginning balance (in shares) | 1,021,584 |
Granted (in shares) | 9,000 |
Forfeited (in shares) | 0 |
Exercised (in shares) | 0 |
Ending balance (in shares) | 1,030,584 |
Weighted Average Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 8.29 |
Granted (in USD per share) | $ / shares | 9.69 |
Ending balance (in USD per share) | $ / shares | $ 8.30 |
FINANCIAL INSTRUMENTS, FAIR V63
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Summary of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2016 | Jan. 29, 2016 |
Assets measured at fair value | ||||
Available-for-sale securities | $ 1.4 | $ 1.4 | ||
Held-for-trading securities | 1.4 | 1.4 | ||
Total assets | 3.8 | 2.8 | ||
Liabilities measured at fair value | ||||
Earnout liability | 37.4 | 33.8 | $ 31.1 | $ 36 |
Total liabilities | 37.4 | 36.5 | ||
Foreign exchange forward contracts | ||||
Assets measured at fair value | ||||
Foreign exchange forward contracts | 1 | 0 | ||
Liabilities measured at fair value | ||||
Foreign exchange forward contracts | 0 | 2.7 | ||
Level 1 | ||||
Assets measured at fair value | ||||
Available-for-sale securities | 1.4 | 1.4 | ||
Held-for-trading securities | 0 | 0 | ||
Total assets | 1.4 | 1.4 | ||
Liabilities measured at fair value | ||||
Earnout liability | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Level 1 | Foreign exchange forward contracts | ||||
Assets measured at fair value | ||||
Foreign exchange forward contracts | 0 | 0 | ||
Liabilities measured at fair value | ||||
Foreign exchange forward contracts | 0 | 0 | ||
Level 2 | ||||
Assets measured at fair value | ||||
Available-for-sale securities | 0 | 0 | ||
Held-for-trading securities | 1.4 | 1.4 | ||
Total assets | 2.4 | 1.4 | ||
Liabilities measured at fair value | ||||
Earnout liability | 0 | 0 | ||
Total liabilities | 0 | 2.7 | ||
Level 2 | Foreign exchange forward contracts | ||||
Assets measured at fair value | ||||
Foreign exchange forward contracts | 1 | 0 | ||
Liabilities measured at fair value | ||||
Foreign exchange forward contracts | 0 | 2.7 | ||
Level 3 | ||||
Assets measured at fair value | ||||
Available-for-sale securities | 0 | 0 | ||
Held-for-trading securities | 0 | 0 | ||
Total assets | 0 | 0 | ||
Liabilities measured at fair value | ||||
Earnout liability | 37.4 | 33.8 | ||
Total liabilities | 37.4 | 33.8 | ||
Level 3 | Foreign exchange forward contracts | ||||
Assets measured at fair value | ||||
Foreign exchange forward contracts | 0 | 0 | ||
Liabilities measured at fair value | ||||
Foreign exchange forward contracts | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS, FAIR V64
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Schedule of Derivative Financial Instruments and Investments Classification on Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Available-for-sale securities | $ 1.4 | $ 1.4 |
Held-for-trading securities | 1.4 | 1.4 |
Total assets | 3.8 | 2.8 |
Total liabilities | 37.4 | 36.5 |
Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (Derivative assets) | 1 | 0 |
Foreign exchange forward contracts (Derivative liabilities) | 0 | 2.7 |
Prepaid expenses and other | Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (Derivative assets) | 1 | 0 |
Investments | ||
Derivatives, Fair Value [Line Items] | ||
Available-for-sale securities | 1.4 | 1.4 |
Held-for-trading securities | 1.4 | 1.4 |
Accounts payable and accrued liabilities | Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange forward contracts (Derivative liabilities) | 0 | 2.7 |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Earnout liability | $ 37.4 | $ 33.8 |
FINANCIAL INSTRUMENTS, FAIR V65
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Fair Value Measurements Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jan. 31, 2017 | Oct. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Gross unrealized gain | $ 1.5 | $ 0.1 |
Gross unrealized loss | $ 0.5 | $ 2.7 |
FINANCIAL INSTRUMENTS, FAIR V66
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Schedule of Fair Values and Carrying Values of Long-term Debt (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Fair Value | ||
Liabilities: | ||
Long-term debt, including current portion | $ 2,154.2 | $ 2,156.8 |
Fair Value | Level 1 | ||
Liabilities: | ||
Long-term debt, including current portion | 0 | 0 |
Fair Value | Level 2 | ||
Liabilities: | ||
Long-term debt, including current portion | 2,154.2 | 2,156.8 |
Fair Value | Level 3 | ||
Liabilities: | ||
Long-term debt, including current portion | 0 | 0 |
Carrying Value | ||
Liabilities: | ||
Long-term debt, including current portion | $ 2,106.2 | $ 2,119 |
FINANCIAL INSTRUMENTS, FAIR V67
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Foreign Exchange Contracts and Other Arrangements Narrative (Details) $ in Millions | Jan. 29, 2016USD ($)tranche | Jan. 31, 2017USD ($)CAD / $ | Jan. 31, 2016USD ($) | Oct. 31, 2016USD ($) |
Derivatives, Fair Value [Line Items] | ||||
Contingent consideration | $ 36 | $ 37.4 | $ 31.1 | $ 33.8 |
Capital transaction | 36 | |||
Adjusted EBITDA growth rate (as percent) | 10.00% | |||
Maximum payment under Earnout Agreement | 60 | |||
Minimum payment under Earnout Agreement | $ 25 | |||
Income recognized from change in fair value in earnout liability | 4.9 | |||
Number of tranches | tranche | 3 | |||
Level 3 | ||||
Derivatives, Fair Value [Line Items] | ||||
Contingent consideration | $ 37.4 | 33.8 | ||
Tranche one | ||||
Derivatives, Fair Value [Line Items] | ||||
Consideration transferred | $ 25 | |||
Tranche two | ||||
Derivatives, Fair Value [Line Items] | ||||
Contingent consideration | 25 | |||
Adjusted EBITDA value | 98 | |||
Tranche three | ||||
Derivatives, Fair Value [Line Items] | ||||
Contingent consideration | 10 | |||
Adjusted EBITDA value | $ 110 | |||
Designated as hedging instruments | Foreign Exchange Forward Issued January 2017 | Canada | ||||
Derivatives, Fair Value [Line Items] | ||||
Average exchange rate | CAD / $ | 1.3180 | |||
Unrealized loss recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax | $ 1 | |||
Designated as hedging instruments | Foreign Exchange Forward Issued January 2017 | Canada | Short | ||||
Derivatives, Fair Value [Line Items] | ||||
Aggregate amount to sell | 72.7 | |||
Earnout | Level 3 | ||||
Derivatives, Fair Value [Line Items] | ||||
Earnout liability | 37.4 | $ 33.8 | ||
Income (expense) recognized from change in fair value earn out liability | $ (3.6) | $ 4.9 | ||
Asset volatility rate (as percent) | 30.00% | |||
Asset beta | 0.9 | |||
Change in asset volatility (as percent) | 1.00% | |||
Change in liability amount due to asset volatility change | $ 0.2 | |||
Change in asset beta | 0.1 | |||
Change in liability amount due to asset beta change | $ 0.4 |
FINANCIAL INSTRUMENTS, FAIR V68
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Earnout Liability Activity (Details) - Level 3 - Earnout - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Fair Value Inputs, Liabilities, Quantitative Information [Roll Forward] | ||
Earnout liability, beginning balance | $ 33.8 | |
Change in fair value | 3.6 | $ (4.9) |
Earnout liability, ending balance | $ 37.4 |
FINANCIAL INSTRUMENTS, FAIR V69
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Foreign Exchange Risk Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Jan. 31, 2017EUR (€) | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Cumulative unrealized exchange gains | $ 1.5 | $ 0.1 | |
Foreign credit agreement | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Long-term debt, including current portion, carrying value | € | € 464.3 | ||
Cumulative unrealized exchange gains | $ 79.3 | ||
Canada | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Potential increase/decrease in exchange rate impacting operating income, percentage | 10.00% | ||
Potential increase/decrease in exchange rate impacting operating income, value | $ 3 | ||
Percent of cash flow exposures covered by hedges | 71.00% | ||
Geographic Concentration Risk | Canada | Cash receipts from operations in U.S. dollars | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage (as percent) | 90.00% | ||
Geographic Concentration Risk | Canada | Cash outflows in U.S. dollars | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage (as percent) | 15.00% |
FINANCIAL INSTRUMENTS, FAIR V70
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) (Details) - Net investment hedge - Foreign exchange contract - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange gain for the period from net investment hedge | $ 8.6 | $ 8 |
Release of ineffective portion of net investment hedge to consolidated statement of operations | 0 | (1.1) |
Net gain to other comprehensive income (loss) for the period related to net investment hedge | 8.6 | 6.9 |
Intercompany loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loss to other comprehensive income (loss) for the period related to foreign exchange | $ 0 | $ (0.8) |
FINANCIAL INSTRUMENTS, FAIR V71
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Credit Risk (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Deposits held | $ 4.9 | $ 4.3 |
FINANCIAL INSTRUMENTS, FAIR V72
FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT - Liquidity Risk (Details) - USD ($) $ in Millions | Jan. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2016 | Oct. 31, 2015 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | $ 89 | $ 165 | $ 188 | $ 328.7 |
Liquidity risk | ||||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 89 | |||
Liquidity risk | Line of credit | ||||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||||
Undrawn lines of credit available | $ 188.9 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Jan. 31, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Number of reportable segments | 3 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 457.4 | $ 405.9 |
Adjusted EBITDA | 82.5 | 59 |
Depreciation and amortization | 27.6 | 26.4 |
Capital expenditures | 59 | 64.2 |
Operating Segments | DPS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 275.2 | 258.5 |
Adjusted EBITDA | 61.4 | 55.1 |
Depreciation and amortization | 15.3 | 14.8 |
Capital expenditures | 36.9 | 45 |
Operating Segments | PDS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 52.3 | 48.5 |
Adjusted EBITDA | 16.3 | 13.8 |
Depreciation and amortization | 1.8 | 1.2 |
Capital expenditures | 1.4 | 9.7 |
Operating Segments | DSS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 129.9 | 98.9 |
Adjusted EBITDA | 32 | 14.8 |
Depreciation and amortization | 9.7 | 9.9 |
Capital expenditures | 17.9 | 7.3 |
Other | Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Adjusted EBITDA | (27.2) | (24.7) |
Depreciation and amortization | 0.8 | 0.5 |
Capital expenditures | $ 2.8 | $ 2.2 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total Adjusted EBITDA | $ 82.5 | $ 59 |
Depreciation and amortization | (27.6) | (26.4) |
Repositioning expenses | 1.3 | 1.2 |
Acquisition and integration costs | (3.5) | (2.6) |
Interest expense, net | (28.2) | (43.8) |
Benefit from income taxes | 21.3 | 0.7 |
Operational initiatives related consulting costs | (1.1) | (1.4) |
IPO costs | 0 | (0.4) |
Acquisition related litigation expenses | (2.3) | (1) |
Stock based compensation expense | (4) | (1) |
FDA remediation costs | 0 | (8.4) |
Environmental remediation costs | (3.7) | 0 |
Other | (3.8) | 6.5 |
Net income (loss) from continuing operations | 28.3 | $ (20) |
Swindon Wind Down | ||
Segment Reporting Information [Line Items] | ||
Inventory Write-down | $ 0.7 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Revenue, Capital Assets and Goodwill, by Country (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jan. 31, 2017 | Jan. 31, 2016 | Oct. 31, 2016 | Jul. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 457.4 | $ 405.9 | ||
Capital Assets | 1,004.2 | $ 983.6 | $ 888.2 | |
Goodwill | 281.5 | $ 281.6 | 284.1 | |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 7 | 7.3 | ||
Capital Assets | 104.3 | 91.6 | ||
Goodwill | 2.6 | 2.5 | ||
U.S. | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 301.1 | 271.8 | ||
Capital Assets | 528.9 | 466.6 | ||
Goodwill | 269.4 | 272.3 | ||
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 132.7 | 111.9 | ||
Capital Assets | 356.2 | 314.5 | ||
Goodwill | 7.3 | 7.3 | ||
Other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 16.6 | $ 14.9 | ||
Capital Assets | 14.8 | 15.5 | ||
Goodwill | $ 2.2 | $ 2 |
REPOSITIONING EXPENSES - Narrat
REPOSITIONING EXPENSES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jan. 31, 2017 | Jan. 31, 2016 | Oct. 31, 2016 | Oct. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Repositioning expenses | $ 0.6 | $ 1.2 | ||
Restructuring reserve | 4.6 | 4.9 | $ 5.4 | $ 22.9 |
Swindon Wind Down | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Repositioning expenses | 0.6 | $ 1.2 | ||
Restructuring reserve | $ 0.7 |
REPOSITIONING EXPENSES - Schedu
REPOSITIONING EXPENSES - Schedule of Repositioning Expenses and Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Total repositioning liability at beginning of period | $ 5.4 | $ 22.9 |
Repositioning expenses | 0.6 | 1.2 |
Repositioning expenses paid | (1.5) | (18.7) |
Foreign exchange | 0.1 | (0.5) |
Total repositioning liability at end of period | 4.6 | 4.9 |
Employee-related expenses | ||
Restructuring Reserve [Roll Forward] | ||
Repositioning expenses | 0.6 | 1.2 |
Operating Segments | DPS | Employee-related expenses | ||
Restructuring Reserve [Roll Forward] | ||
Repositioning expenses | 0.2 | 1.1 |
Operating Segments | PDS | Employee-related expenses | ||
Restructuring Reserve [Roll Forward] | ||
Repositioning expenses | 0 | 0 |
Operating Segments | DSS | Employee-related expenses | ||
Restructuring Reserve [Roll Forward] | ||
Repositioning expenses | 0 | 0.1 |
Other | Other | Employee-related expenses | ||
Restructuring Reserve [Roll Forward] | ||
Repositioning expenses | $ 0.4 | $ 0 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | Oct. 31, 2016 | Oct. 31, 2015 | |
Affiliated entity | JLL Partners Inc. and DSM | Business Services | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 0 | $ 0.1 | ||||
Affiliated entity | Koninklijke DSM | Shared Service Functions | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 3.2 | 2.7 | ||||
Revenue for services from related parties | 0.2 | 0.1 | ||||
Accounts payable, related parties | 0.2 | $ 0.2 | ||||
Accounts receivable, related parties | 0.4 | 0.4 | ||||
Affiliated entity | Banner Life Sciences | Shared Service Functions | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue for services from related parties | 0 | 6.5 | ||||
Accounts receivable, related parties | 0.7 | 1.1 | ||||
Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment values | 8.5 | 8.7 | ||||
Equity method gain/(loss) | (0.1) | 1.9 | ||||
Equity Method Investee | Banner Life Sciences | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment values | 2.7 | 2.9 | $ 5 | |||
Cash distribution from Banner Life Services | $ 2.4 | |||||
Equity method gain/(loss) | (0.1) | 1.8 | ||||
Equity Method Investee | Percivia | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment values | $ 5.7 | 5.7 | ||||
Ownership percentage (as percent) | 50.00% | |||||
Return on capital | $ 1.2 | |||||
Equity method gain/(loss) | $ 0 | $ 0.1 | ||||
Equity Method Investee | ChemiePark | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment values | $ 0.1 | $ 0.1 | ||||
Ownership percentage (as percent) | 47.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Valuation Allowance [Line Items] | ||
Provision for (benefit from) income taxes | $ (21.3) | $ (0.7) |
Deferred income taxes | 22.1 | $ (0.1) |
Patheon Biologics LLC | ||
Valuation Allowance [Line Items] | ||
Deferred income taxes | $ 28.3 |
OTHER INFORMATION - Foreign Exc
OTHER INFORMATION - Foreign Exchange (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Other Information [Abstract] | ||
Foreign exchange loss, net | $ 4.8 | $ 4.3 |
OTHER INFORMATION - Management
OTHER INFORMATION - Management Incentive Plan (Details) - Management Long-Term Incentive Plan - USD ($) $ in Millions | Mar. 11, 2014 | Jan. 31, 2017 | Jan. 31, 2017 |
Loss Contingencies [Line Items] | |||
Threshold percentage of ownership of equity securities for exit event | 20.00% | ||
Percentage of excess capital contributions received to trigger an Exit Event | 250.00% | ||
Number of days to determine plan details | 90 days | ||
Value of LTIP units granted | $ 9.6 | ||
Vesting period | 5 years | ||
Payments made due to qualified terminations | $ 0.1 |
OTHER INFORMATION - Contingenci
OTHER INFORMATION - Contingencies (Details) € in Millions | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2015EUR (€)plaintiff | Oct. 31, 2011plaintiff | Jan. 31, 2017 | |
Loss Contingencies [Line Items] | |||
Number of plaintiffs | 113 | 115 | |
Number of plaintiff actions | 2 | ||
Number of named plaintiffs | 2 | ||
Italy | Italian client dispute | |||
Loss Contingencies [Line Items] | |||
Amount of penalty per day sought by client | € | € 0.2 | ||
Banner Acquisition | Softgel Services | Service concentration risk | Sales revenue | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage (generally less than) (as percent) | 10.00% |
OTHER INFORMATION - Supplementa
OTHER INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Other Information [Abstract] | ||
Assumption of earnout liability from the Partnership | $ 0 | $ 36 |
Increase in capital lease obligations | $ 0.6 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Feb. 01, 2017USD ($) |
Roche Acquisition | Subsequent event | |
Subsequent Event [Line Items] | |
Amount of cash and associated inventory and spare parts transferred | $ 1 |