Mylan (MYL) Reports Q1 Revenues Miss; Reaffirms FY20 Revenue Mid-Point Guidance Above Consensus

Mylan (NASDAQ: MYL) reported Q1 revenue for the quarter came in at $2.62 billion versus the consensus estimate of $2.65 billion.

First Quarter 2020 Financial Highlights

• Total revenues of $2.62 billion, up 5%, up 8% on a constant currency basis, compared to the prior year period.
• Revenue Highlights:
  • North America segment net sales of $955.5 million, up 4% on an actual and constant currency basis.
  • Europe segment net sales of $1.02 billion, up 14%, up 18% on a constant currency basis.
  • Rest of World segment net sales of $610.8 million, down 5%, flat on a constant currency basis.
• U.S. GAAP net earnings of $20.8 million, compared to U.S. GAAP net loss of $(25.0) million in the prior year period.
• Adjusted net earnings of $467.2 million, compared to adjusted net earnings of $421.9 million in the prior year period.
• Adjusted EBITDA of $750.7 million, compared to adjusted EBITDA of $710.2 million in the prior year period.
• U.S. GAAP net cash provided by operating activities for the three months ended March 31, 2020 of $291.1 million, compared to cash used in operating activities of $(39.7) million in the prior year period, and adjusted free cash flow for the three months ended March 31, 2020 of $357.1 million, compared to $27.1 million in the prior year period, driven in each case primarily by working capital velocity and timing of certain other payments.
• Mylan is not providing forward-looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information.

Mylan CEO Heather Bresch commented, "As we navigate the COVID-19 environment, our hearts and thoughts are with those who have been affected by COVID-19, and all of the healthcare workers and first responders who continue to go above and beyond to help save lives across the globe. I also would like to extend a special message of gratitude to our own Mylan family around the world. Thanks to their commitment, we have been able to continue meeting patient needs, even amid the challenges of a global pandemic."

Bresch continued, "These efforts are reflected in our first quarter results, which came in with total revenues growing 5 percent, or 8 percent on a constant currency basis. We're also reaffirming revenue guidance to be in the range of $11.5 billion and $12.5 billion, absorbing approximately $200 million of foreign exchange headwinds versus our previous expectations, and adjusted EBITDA to be in the range of $3.2 billion to $3.9 billion, absorbing approximately $50 million of foreign exchange headwinds versus our previous expectations. These ranges account for COVID-19 impacts forecasted through the second quarter. Looking ahead, we remain on track to close the pending combination with Pfizer's Upjohn Business in the second half of the year and continue to have great confidence that Viatris will be well positioned to deliver value for all of our stakeholders as a true partner of choice."

Mylan President Rajiv Malik added, "During these trying times, I am especially inspired by the dedication of Mylan's manufacturing colleagues who, with the support of their families, are continuing to work on-site to respond to the need for critical medicines."

Malik continued: "As a result of the Mylan team's efforts, our broad and diverse manufacturing footprint of more than 40 manufacturing facilities, which is spread across 12 countries, has maintained supply continuity. The strategic locations of our plants have enabled Mylan to avoid disruptions due to logistical challenges in any one part of the world. We have further mitigated risk by having multiple API and finished dose sources where possible, and we are continuously monitoring the inventory levels of our raw materials and the finished dosage form of our products. At this time, we do not foresee any supply disruptions, which we believe is a result of our geographic spread and supplier diversity."

Mylan CFO Ken Parks added, "During the first quarter, we generated $357 million of adjusted free cash flow, an increase of $330 million over the prior year, primarily driven by working capital velocity and timing of certain other payments. As evidenced by our strong first quarter cash flow, we are pleased with our liquidity position despite the COVID-19 pandemic and anticipate full year adjusted free cash flow generation to be consistent with 2019 levels. We continue to target approximately $1 billion of debt repayment during 2020 and remain fully committed to our investment grade credit rating."

GUIDANCE:

Mylan sees FY2020 revenue of $11.5-12.5 billion, versus the consensus of $11.74 billion.

For earnings history and earnings-related data on Mylan (MYL) click here.

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