- Third quarter revenue grew 9 percent
to $761.1 million.
- Revenue, excluding strategic exits,
grew 13 percent to $733.4 million; removing the impact of foreign
currency exchange rates, growth was 15 percent.
- Reported net income grew $80.9
million in the third quarter to $60.2 million, which represents
$0.16 per diluted share and $0.29 per diluted share on an adjusted
basis.
- Delivered Innovation, including
launching Prevacent® PRRS, a swine vaccine, and
CorrelinkTM, a nutritional health product for
poultry, as well as signing a licensing agreement with Novozymes to
develop nutritional health products for cattle.
- Continued progress on the
Productivity agenda, including finalizing the sale of a
manufacturing facility in Larchwood, Iowa.
- 2018 revenue is expected to be
between $3.05 billion and $3.08 billion. Earnings per share (EPS)
for 2018 are expected to be in the range of $0.31 to $0.33 on a
reported basis and $1.14 to $1.16 on an adjusted basis.
Elanco Animal Health Incorporated (NYSE: ELAN), substantially
all of the animal health business of Eli Lilly and Company (Lilly),
today reported financial results for the third quarter of 2018, its
first after completing a successful initial public offering during
the quarter.
“We are pleased to have met our expectations in our first
quarter as a publicly traded company. Our results reflect the
broad-based momentum established as we have executed against our
strategy,” said Jeff Simmons, President and Chief Executive Officer
of Elanco. “Looking back at the last nine months, Elanco has
accelerated growth by delivering on our commitment to innovation
and continuing progress on our aggressive margin expansion agenda
to increase profitability and unlock value for shareholders.”
Third Quarter Key Events:
Innovation
- A portfolio of innovation launched
since 2015 accounted for $67.9 million in revenue, up $30.4 million
or 81 percent over the same quarter last year.
- Prevacent PRRS: The company
launched Prevacent PRRS, a vaccine to prevent porcine reproductive
and respiratory syndrome in piglets two weeks or older.
- Correlink: The Company launched
Correlink, a nutritional health product for poultry in Asia. This
product provides a tailored blend of probiotics designed to meet
the assessed disease challenges within a specific poultry flock or
operation. This innovation furthers the company's commitment to
advance alternatives to medically important antibiotics.
- Credelio: The European Medicines
Agency approved, and the company has launched, CredelioTM for cats,
for the treatment of flea and tick infestations. This key line
extension, which is an introduction of an existing product into a
new species, represents the first combined flea and tick product
for cats to be offered in an oral formulation.
- Imvixa: The Norwegian Medicines
Agency has requested additional data on ImvixaTM. Upon review,
Elanco has decided to withdraw the application for marketing
authorization of Imvixa in Norway while we collaborate with the
Agency on continued efforts to register the product. Our full year
2018 guidance reflects the impact of this event.
- Novozymes: Elanco entered into a
global research and development and commercialization collaboration
with Novozymes to develop nutritional health products for
cattle.
Portfolio
- As a group, the Targeted Growth
Categories in Elanco's portfolio - Companion Animal Disease
Prevention, Companion Animal Therapeutics and Food Animal Future
Protein & Health grew 19 percent on a constant currency basis
in the quarter.
- The company re-introduced the
Galliprant® 100mg presentation, providing a more convenient dosing
option for large dogs.
- In the U.S., more clinics dispensed at
least one dose of Galliprant than any other branded Nonsteroidal
Anti-Inflammatory Drug (NSAID).
Productivity
- The company completed the sale of the
Larchwood, Iowa manufacturing facility.
Third Quarter Reported Results:
In the third quarter of 2018, global revenue was $761.1 million,
an increase of 9 percent compared to the third quarter of 2017.
Revenue, excluding strategic exits, increased 13 percent to $733.4
million. Gross margin, as a percent of revenue, increased 500 basis
points to 51 percent. The effective tax rate was 23.6 percent in
the third quarter 2018. Net income for the quarter increased $80.9
million to $60.2 million, or $0.16 per diluted share.
Companion Animal Disease Prevention revenue increased 34
percent for the quarter, primarily driven by volume and increased
price partially offset by an unfavorable impact from foreign
exchange. Growth was primarily driven by higher realized price on
Trifexis®, as well as a favorable comparison to prior year related
to an anticipated stock-out in the third quarter of 2017, which
shifted sales to the second quarter of 2017. Growth was also driven
by the continued uptake of Interceptor® Plus and Credelio, as well
as increased sales of certain vaccines from new customer
agreements.
Companion Animal Therapeutics revenue increased 27
percent for the quarter, driven both by volume and increased price,
partially offset by an unfavorable impact from foreign exchange.
Growth was primarily due to the re-introduction of the 100mg dosage
of Galliprant, continued uptake of the product and realized price
increases across the category.
Food Animal Future Protein & Health revenue decreased
1 percent for the quarter, as a result of an unfavorable impact
from foreign exchange and a decline in volume, partially offset by
increased price. Volume growth in aqua, vaccines and nutritional
health products was more than offset by international purchasing
patterns in the current year for poultry.
Food Animal Ruminants & Swine revenue increased 8
percent for the quarter, driven by volume, partially offset by an
unfavorable impact from foreign exchange. Growth was driven mainly
by U.S. and international purchasing patterns in both the current
and prior year.
Strategic Exits are businesses Elanco has exited or has
made the decision to exit. Revenue from Strategic Exits decreased
42 percent for the quarter.
Gross profit increased 22 percent, to $391.3 million, in the
third quarter of 2018 compared with the third quarter of 2017.
Gross margin, as a percent of revenue, was 51 percent, an increase
of 500 basis points period over period. The gross margin increase
was primarily due to favorable net realized prices and product mix,
the result of the manufacturing productivity agenda and
non-recurring costs in 2017 associated with purchase accounting
charges related to the fair value adjustments of acquired inventory
that was subsequently sold, partially offset by various cost
increases.
Operating expenses, defined as the sum of research and
development and marketing, selling and administrative expenses,
decreased 7 percent to $237.9 million. Research and development
expenses decreased 5 percent, to $58.9 million, or 8 percent of
revenue. This decrease was primarily driven by normal project spend
fluctuations and restructuring savings. Marketing, selling and
administrative expenses decreased 8 percent, to $179.0 million,
primarily driven by productivity initiatives and cost control
measures across these functions.
Amortization of intangibles decreased 6 percent to $48.7 million
primarily driven by the acceleration of amortization related to
certain product exits in 2017.
Asset impairments, restructuring, and other special charges
decreased 48 percent to $12.4 million primarily due to a decrease
in severance, integration and exit costs partially offset by an
increase in asset impairments.
Other-net, (income) expense was expense of $13.5 million in the
third quarter of 2018, compared with income of $1.9 million in the
third quarter of 2017. The increase in expense was driven by
current year interest expense and foreign currency losses related
to hyper-inflationary markets.
Year-to-Date Results
For the first nine months of 2018, global revenue increased 6
percent, to $2.3 billion, compared with $2.1 billion in the same
period in 2017. Reported net income and earnings per share were
$70.1 million and $0.19, respectively.
Third Quarter Consolidated non-GAAP
Results:
For the quarter, reported net income (loss) before interest,
taxes, depreciation and amortization (EBITDA) as a percent of
revenue (EBITDA margin) was 21 percent. Adjusted EBITDA margin was
22 percent, which increased 9 percentage points due to increased
revenue and expense improvements from operations. Adjusted net
income for the quarter increased 108 percent to $107.4 million,
which excludes the net impact of $47.2 million for restructuring
and integration costs and other special charges and the
amortization of intangible assets, net of the impact from taxes.
Adjusted EPS for the quarter was $0.29 per diluted share.
Adjusted gross profit increased 19 percent, to $389.7 million,
in the third quarter of 2018 compared with the prior year period.
Adjusted gross margin as a percent of revenue was 51 percent.
For further detail of non-GAAP measures, see the Reconciliation
of GAAP Reported to Selected Non-GAAP Adjusted Information table
later in this press release.
Year-to-Date Non-GAAP Measures
For the first nine months of 2018, net income and earnings per
share, on a non-GAAP basis, were $326.4 million and $0.89 per
diluted share, respectively.
For further detail of non-GAAP measures, see the Reconciliation
of GAAP Reported to Selected Non-GAAP Adjusted Information table
later in this press release.
FINANCIAL GUIDANCE
Elanco is providing initial guidance on earnings expectations
for the full year 2018, which includes:
Full Year2018 Guidance (dollars in billions,
except per share amounts) Revenue $ 3.05 to $ 3.08
GAAP EPS $ 0.31 to $ 0.33 Cost of sales 0.11 Amortization of
intangible assets 0.54 Asset impairments, restructuring and other
special charges 0.25 Other-net, (income) expense 0.02 Income before
taxes $ 1.23 to $ 1.25 Provision for tax on income $(0.09) Adjusted
EPS $ 1.14 to $ 1.16
“As we enter the fourth quarter, we have confidence in our
ability to continue delivering results in line with our
expectations for the year,” said Simmons.
WEBCAST & CONFERENCE CALL
DETAILS
Elanco will host a webcast and conference call at 8:00 a.m.
eastern today, during which company executives will review third
quarter financial and operational results, discuss 2018 financial
guidance, and respond to questions from financial analysts.
Investors, analysts, members of the media and the public may access
the live webcast and accompanying slides by visiting the Elanco
website at https://investor.elanco.com and selecting Events and
Presentations. A replay of the webcast will be archived and made
available a few hours after the event on the company's website, at
https://investor.elanco.com/investor/events-and-presentations.
ABOUT ELANCO
Elanco (NYSE: ELAN) is a global animal health company that
develops products and knowledge services to prevent and treat
disease in food animals and pets in more than 90 countries. With a
64-year heritage, we rigorously innovate to improve the health of
animals and benefit our customers, while fostering an inclusive,
cause-driven culture for more than 5,800 employees. At Elanco,
we’re driven by our vision of food and companionship enriching life
- all to advance the health of animals, people and the planet.
Learn more at www.elanco.com.
Cautionary Statement Regarding
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (Exchange Act).
This press release contains forward-looking statements, including,
without limitation, statements concerning our 2018 guidance, our
industry and our operations, performance and financial condition,
including in particular, statements relating to our business,
growth strategies, product development efforts and future
expenses.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, our actual results may differ
materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include regional, national, or global political, economic,
business, competitive, market, and regulatory conditions including,
but not limited to the following:
- heightened competition, including from
new innovation or generics;
- the impact of disruptive innovations
and advances in veterinary medical practices, animal health
technologies and alternatives to animal-derived protein;
- changes in regulatory restrictions on
the use of antibiotics in food animals, as well as changing market
demand regarding the use of antibiotics and productivity
products;
- our ability to implement our business
strategies or achieve targeted cost efficiencies and gross margin
improvements;
- consolidation of our customers and
distributors;
- the success of our R&D and
licensing efforts;
- our ability to successfully acquire
target companies and integrate them into our existing
operations;
- unanticipated safety, quality or
efficacy concerns associated with our products;
- the impact of weather conditions and
the availability of natural resources;
- changes in U.S. foreign trade policy,
imposition of tariffs or trade disputes;
- the impact of global macroeconomic
conditions; and
- the effect of the transactions
involving the separation of our business from that of Lilly and
distribution of Lilly's interest in us to its shareholders, if
consummated, on our business.
See "Risk Factors" in our prospectus relating to our initial
public offering filed on September 21, 2018 with the Securities and
Exchange Commission for a further description of these and other
factors. Although we have attempted to identify important risk
factors, there may be other risk factors not presently known to us
or that we presently believe are not material that could cause
actual results and developments to differ materially from those
made in or suggested by the forward-looking statements contained in
this quarterly report. If any of these risks materialize, or if any
of the above assumptions underlying forward-looking statements
prove incorrect, actual results and developments may differ
materially from those made in or suggested by the forward-looking
statements contained in this quarterly report. For the reasons
described above, we caution you against relying on any
forward-looking statements, which should also be read in
conjunction with the other cautionary statements that are included
elsewhere in this press release. Any forward-looking statement made
by us in this press release speaks only as of the date thereof.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update or to
revise any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by law. Comparisons of results for current and any prior
periods are not intended to express any future trends or
indications of future performance, unless specifically expressed as
such, and should be viewed as historical data.
Use of Non-GAAP Financial
Measures:
We use non-GAAP financial measures, such as revenues excluding
strategic exits, EBITDA, EBITDA margin, adjusted EBITDA, adjusted
EBITDA margin, adjusted net (income) loss, adjusted EPS, adjusted
gross profit and adjusted gross margin to assess and analyze our
operational results and trends as explained in more detail in the
reconciliation tables later in this release.
We believe these non-GAAP financial measures are also useful to
investors because they provide greater transparency regarding our
operating performance. Reconciliation of non-GAAP financial
measures and reported GAAP financial measures are included in the
tables accompanying this press release and are posted on our
website at www.elanco.com. The primary material limitations
associated with the use of such non-GAAP measures as compared to
U.S. GAAP results include the following: (i) they may not be
comparable to similarly titled measures used by other companies,
including those in our industry, (ii) they exclude financial
information and events, such as the effects of an acquisition or
amortization of intangible assets, that some may consider important
in evaluating our performance, value or prospects for the future,
(iii) they exclude items or types of items that may continue to
occur from period to period in the future and (iv) they may not
exclude all unusual or non-recurring items, which could increase or
decrease these measures, which investors may consider to be
unrelated to our long-term operations, such as Strategic Exits.
These non-GAAP measures are not, and should not be viewed as,
substitutes for U.S. GAAP reported measures. We encourage investors
to review our unaudited condensed consolidated and combined
financial statements in their entirety and caution investors to use
U.S. GAAP measures as the primary means of evaluating our
performance, value and prospects for the future, and non-GAAP
measures as supplemental measures.
Availability of Certain Information
We use our website to disclose important company information to
investors, customers, employees and others interested in the
Elanco. We encourage investors to consult our website regularly for
important information about Elanco.
Elanco Animal Health
Incorporated
Unaudited Condensed Consolidated and
Combined Statements of Operations
(Dollars and shares in millions, except
per share data)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2018 2017 2018 2017 Revenue $ 761.1 $ 697.1 $ 2,267.5
$ 2,134.7 Costs, expenses, and other: Cost of sales 369.8 376.2
1,161.3 1,088.9 Research and development 58.9 61.9 185.5 189.7
Marketing, selling, and administrative 179.0 194.7 550.1 583.0
Amortization of intangible assets 48.7 51.6 147.3 161.0 Asset
impairments, restructuring, and other special charges 12.4 23.7
82.8 189.3 Other–net, (income) expense 13.5 (1.9 ) 24.2
— Income (loss) before income taxes $ 78.8 $ (9.1 ) $
116.3 $ (77.2 ) Income taxes 18.6 11.6 46.2
72.0 Net income (loss) $ 60.2 $ (20.7 ) $ 70.1
$ (149.2 ) Earnings (loss) per share: Basic and diluted $ 0.16 $
(0.06 ) $ 0.19 $ (0.41 ) Weighted average shares outstanding: Basic
and diluted 365.6 365.6 365.6 365.6
Elanco Animal Health
IncorporatedReconciliation of GAAP Reported to Selected
Non-GAAP Adjusted Information(Unaudited)(Dollars in
millions, except per share data)
We define Adjusted Net Income as net income (loss) excluding
amortization of intangible assets, purchase accounting adjustments
to inventory, integration costs of acquisitions, severance, asset
impairment, gain on sale of assets, facility exit costs and other
specified significant items, such as unusual or non-recurring items
that are unrelated to our long-term operations adjusted for income
tax expense associated with the excluded financial items.
We define adjusted EBITDA as net income (loss) adjusted for
interest expense (income), income tax expense (benefit) and
depreciation and amortization, further adjusted to exclude purchase
accounting adjustments to inventory, integration costs of
acquisitions, severance, asset impairment, gain on sale of assets,
facility exit costs and other specified significant items, such as
unusual or non-recurring items that are unrelated to our long-term
operations adjusted for income tax expense associated with the
excluded financial items.
We define Adjusted EPS as adjusted net income divided by the
number of weighted average shares outstanding as of September 30,
2018.
The following is a reconciliation of GAAP Reported for the three
months ended September 30, 2018 and 2017 to Selected Non-GAAP
Adjusted information:
Three months ended September30, 2018
Three months ended September30, 2017
GAAPReported
AdjustedItems (b)
Non-GAAP (a)
GAAPReported
AdjustedItems (b)
Non-GAAP (a)
Cost of sales (1) (2) $ 369.8 $ (1.6 ) $ 371.4 $ 376.2 $ 5.8
$ 370.4 Amortization of intangible assets $ 48.7 48.7 — $
51.6 51.6 — Asset impairments, restructuring and other special
charges (3) (4) $ 12.4 12.4 — $ 23.7 23.7 — Other-net, (income)
expense (5) $ 13.5 — 13.5 $ (1.9 ) (2.8 ) $
0.9 Income (loss) before taxes $ 78.8 $ 59.5 $ 138.3 $ (9.1 ) $
78.3 $ 69.2 Provision for taxes (6) $ 18.6 (12.3 ) 30.9
$ 11.6 (6.0 ) 17.6 Net income (loss) $ 60.2 $ 47.2 $
107.4 $ (20.7 ) $ 72.3 $ 51.6 Earnings per share basic and diluted
(7) $ 0.16 $ 0.13 $ 0.29 $ (0.06 ) $ 0.20 $ 0.14
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP
adjustments.
(a) The company uses non-GAAP financial measures that differ
from financial statements reported in conformity with U.S.
generally accepted accounting principles (GAAP). The company’s
non-GAAP measures adjust reported results to exclude amortization
of intangibles and items that are typically highly variable,
difficult to predict, and/or of a size that could have a
substantial impact on the company’s reported operations for a
period. The company believes that these non-GAAP measures provide
useful information to investors. Among other things, they may help
investors evaluate the company’s ongoing operations. They can
assist in making meaningful period-over-period comparisons and in
identifying operating trends that would otherwise be masked or
distorted by the items subject to the adjustments. Management uses
these non-GAAP measures internally to evaluate the performance of
the business, including to allocate resources. Investors should
consider these non-GAAP measures in addition to, not as a
substitute for or superior to, measures of financial performance
prepared in accordance with GAAP. (b) Adjustments to certain GAAP
reported measures for the three months ended September 30, 2018 and
2017 include the following: (1) 2018 excludes
inventory adjustments related to the suspension of commercial
activities for Imrestor ($0.9 million), as well as the closure of
the Larchwood, IA facility ($0.7 million). (2) 2017 excludes
charges entirely associated with the incremental purchase
accounting charges related to inventory valuation due to inventory
that was subsequently sold. (3) 2018 excludes charges primarily
associated with impairment expenses largely associated with the
closure of the site at Larchwood, IA and other facilities ($7.5
million) as well as restructuring charges ($4.9 million) related to
integration and other activities. (4) 2017 excludes charges
primarily associated with restructuring charges ($12.2 million)
related to integration and severance costs as well as exit costs
primarily associated with facility closures ($11.5 million). (5)
2017 excludes contingent consideration related to Aratana. (6) 2018
and 2017 represent the income tax expense associated with the
adjusted items. (7) Reconciliation of each adjustment to earnings
(loss) per share by line item is shown in the table below.
Q3 2018 Q3
2017 As Reported EPS $ 0.16 $ (0.06 ) Cost of
sales — 0.03 Amortization of intangible assets 0.13 0.14 Asset
impairments, restructuring and other special charges 0.03 0.06
Other-net, (income) expense — (0.01 ) Income before taxes $
0.16 $ 0.22 Provision for tax on income (0.03 ) (0.02 ) Total
Adjustments to EPS $ 0.13 $ 0.20 Adjusted EPS $ 0.29 $ 0.14
The following is a reconciliation of GAAP Reported for the nine
months ended September 30, 2018 and 2017 to Select Non-GAAP
Adjusted information.
Nine months ended September 30,2018
Nine months ended September 30,2017
GAAPReported
AdjustedItems (b)
Non-GAAP (a)
GAAPReported
AdjustedItems (b)
Non-GAAP (a)
Cost of sales (1) (2) $ 1,161.3 $ 38.6 $ 1,122.7 $ 1,088.9 $
32.3 $ 1,056.6 Amortization of intangible assets $ 147.3
147.3 $ — 161.0 161.0 — Asset impairments, restructuring and other
special charges (3) (4) $ 82.8 82.8 $ — 189.3 189.3 — Other-net,
(income) expense (5) $ 24.2 8.5 $ 15.7 —
(4.6 ) 4.6 Income (loss) before taxes $ 116.3 277.2 $ 393.5
(77.2 ) 378.0 300.8 Provision for taxes (6) $ 46.2 (20.9 ) $
67.1 72.0 (20.8 ) 92.8 Net income (loss) $ 70.1 256.3
$ 326.4 (149.2 ) 357.2 208.0 Earnings per share basic and diluted
(7) $ 0.19 0.70 $ 0.89 (0.41 ) 0.98 0.57
Numbers may not add due to rounding.
The table above reflects only line items with non-GAAP
adjustments.
(a) The company uses non-GAAP financial measures that differ
from financial statements reported in conformity with U.S.
generally accepted accounting principles (GAAP). The company’s
non-GAAP measures adjust reported results to exclude amortization
of intangibles and items that are typically highly variable,
difficult to predict, and/or of a size that could have a
substantial impact on the company’s reported operations for a
period. The company believes that these non-GAAP measures provide
useful information to investors. Among other things, they may help
investors evaluate the company’s ongoing operations. They can
assist in making meaningful period-over-period comparisons and in
identifying operating trends that would otherwise be masked or
distorted by the items subject to the adjustments. Management uses
these non-GAAP measures internally to evaluate the performance of
the business, including to allocate resources. Investors should
consider these non-GAAP measures in addition to, not as a
substitute for or superior to, measures of financial performance
prepared in accordance with GAAP. (b) Adjustments to certain GAAP
reported measures for the nine months ended September 30, 2018 and
2017 include the following: (1) 2018 excludes
charges primarily associated with inventory adjustments related to
the suspension of commercial activities for Imrestor ($34.7
million), as well as the closure of the Larchwood, IA facility
($3.9 million). (2) 2017 excludes charges entirely associated with
the incremental purchase accounting charges related to inventory
valuation due to inventory that was subsequently sold. (3) 2018
excludes charges primarily associated with impairment and exit
costs related to other facility closures ($75.1 million) as well as
restructuring charges ($7.7 million) related to integration
activities and impairment related to the suspension of commercial
activities for Imrestor. (4) 2017 excludes charges primarily
associated with restructuring charges ($137.2 million) related to
severance and integration activities as well as exit costs
primarily associated with facility closures ($24.3 million) and
impairments on in-process research and development ($43.8 million)
partially offset by the gain on sale of an asset ($16.0 million).
(5) 2018 and 2017 excludes adjustments of contingent consideration
related to Aratana. (6) 2018 and 2017 represent the income tax
expense associated with the adjusted items. (7) Reconciliation of
each adjustment to earnings (loss) per share by line item is shown
in the table below.
Year-to-Date Q3 2018 Q3
2017 As Reported $ 0.19 $ (0.41 ) Cost of
sales 0.11 0.09 Amortization of intangible assets 0.40 0.44 Asset
Impairments, restructuring and other certain charges 0.23 0.52
Other-net, (income) expense 0.02 (0.01 ) Income before taxes
0.76 1.03 Provision for tax on income (0.06 ) (0.05 ) Total
Adjustments to EPS $ 0.70 $ 0.98 Adjusted EPS $ 0.89 $ 0.57
For the periods presented, we have not made adjustments for all
items that may be considered unrelated to our long-term operations.
We believe adjusted EBITDA, when used in conjunction with our
results presented in accordance with U.S. GAAP and its
reconciliation to net income (loss), enhances investors'
understanding of our performance, valuation and prospects for the
future. We also believe adjusted EBITDA is a measure used in the
animal health industry by analysts as a valuable performance metric
for investors.
The following is a reconciliation of U.S. GAAP Net Income (loss)
for the three and nine months ended September 30, 2018 and 2017 to
EBIT, EBITDA and adjusted EBITDA for the respective periods:
Three Months Ended September 30, Nine
Months Ended September 30, 2018 2017 2018 2017
Reported Net Income (Loss) $ 60.2 $ (20.7 ) $ 70.1 $ (149.2 ) Net
interest expense 8.6 — 8.6 — Income tax expense 18.6 11.6
46.2 72.0 EBIT 87.4 (9.1 ) 124.9
(77.2 ) Depreciation and amortization 72.7 75.2 222.3
231.3 EBITDA $ 160.1 $ 66.1 $ 347.2 $ 154.1
Non-GAAP Adjustments: Cost of sales $ (1.6 ) $ 5.8 $ 38.6 $ 32.3
Asset impairment, restructuring and other special charges 12.4 23.7
82.8 189.3 Other-net, (income) expense — (2.8 ) 8.5
(4.6 ) Adjusted EBITDA $ 170.9 $ 92.8 $ 477.1
$ 371.1
For a reconciliation of our revenue excluding Strategic Exits to
total GAAP revenue reported, please see the table below, which is a
breakdown of revenue by category and the respective percent of
total revenue for the same period (in millions):
For the three months ended September 30, 2018
2017 Companion Animal Disease
Prevention $ 188.6 25 % $ 140.4 20 % Therapeutics 80.5 10 %
63.5 9 % Total Companion Animal $ 269.1 35 % $ 203.9 29 %
Food Animal Future Protein & Health $ 162.8 21 % $ 164.5 24 %
Ruminants and Swine 301.5 40 % 280.4 40 % Total Food
Animal $ 464.3 61 % $ 444.9 64 % Revenue Subtotal $ 733.4 $
648.8 Strategic Exits $ 27.7 4 % $ 48.3 7 %
Total Revenue $ 761.1 100 % $ 697.1 100 %
For the nine months ended September 30, 2018
2017 Companion Animal Disease
Prevention $ 603.9 27 % $ 519.7 24 % Therapeutics 211.1 9 %
181.8 9 % Total Companion Animal $ 815.0 36 % $ 701.5 33 %
Food Animal Future Protein & Health $ 502.1 22 % $ 456.0 21 %
Ruminants and Swine 881.1 39 % 857.3 40 % Total Food
Animal $ 1,383.2 61 % $ 1,313.3 61 % Revenue Subtotal $ 2,198.2
$ 2,014.8 Strategic Exits $ 69.3 3 % $ 119.9
6 % Total Revenue $ 2,267.5 100 % $ 2,134.7
100 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181106005244/en/
Elanco Animal Health IncorporatedInvestors:Jim Greffet,
317-383-9935orMedia:Colleen Parr Dekker,
317-989-7011colleen_parr_dekker@elanco.com
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