Avantor Reports Third Quarter 2019 Results

- Net sales of $1.50 billion, net income of $22.1 million, adjusted EBITDA of $250.8 million

Published

RADNOR, Pa., Nov. 5, 2019 /PRNewswire/ -- Avantor, Inc. (NYSE: AVTR), a leading global provider of mission critical products and services to customers in the life sciences and advanced technologies & applied materials industries, today reported financial results for the quarter ended September 30, 2019.

"We are pleased to report another quarter of good growth, strong cash generation and deleveraging," said Michael Stubblefield, Chief Executive Officer of Avantor. "While a one-time item in the prior-year quarter diluted top line growth by approximately 2%, we achieved mid-single-digit growth in our core business, which continues to reflect the strength of our model. Importantly, biopharma growth in the quarter was strong and overall we exited September with high-single-digit growth." 

"Our operating performance continues to benefit from the efficiencies and synergies from the VWR integration, and we remain on track to expand margins approximately 100 basis points in 2019.  Additionally, our outstanding cash generation and continued reduction in our interest expense enabled us to lower our leverage another quarter turn to 4.8X," said Stubblefield.

"We have momentum to finish the year strong and are well positioned to enable the innovation and breakthroughs that help our life science customers dramatically improve patient outcomes," Stubblefield concluded.

Third Quarter 2019

For the three months ended September 30, 2019, net sales were $1.504 billion, an increase of 0.6% compared to the third quarter of 2018. Foreign currency translation negatively impacted revenue by 1.8%, and organic revenue growth was 2.4%, reflecting volume growth and improved pricing, offset by discrete, non-recurring volume in the Americas in 2018, which adversely affected global growth in the quarter by approximately 200 basis points.

Adjusted EBITDA decreased 1.6% to $250.8 million but was flat excluding adverse foreign exchange translation impact.  Product pricing relative to cost inflation was favorable, and our productivity and VWR integration synergies continued to deliver. These benefits were offset by adverse sales mix and additional growth investments.

Third Quarter 2019 - Segment Results

Management uses Management EBITDA (as highlighted below) to measure and evaluate the internal operating performance of the Company's business segments. Management EBITDA is also our segment reporting profitability measure under generally accepted accounting principles.

Americas

In the Americas, net sales were $918.2 million, up 0.6% from the third quarter of 2018 and up 0.7% on an organic basis, reflecting improved pricing that was partially offset by a one-time item in the prior year, absent which the organic growth in the Americas would have approximated 4%. Sales to biopharma, our largest customer group, grew in the mid-single digits organically, with biopharma production sales up low-double digits.

Management EBITDA was $187.7 million, up 3.2% from the third quarter of 2018, which reflected modest sales growth and stable gross margin. Strong growth in biopharma and SG&A savings, driven primarily by synergies generated from our global restructuring program, was tempered by lower levels of higher-margin healthcare and education & government product sales.

Europe

In Europe, net sales declined slightly to $501.1 million, -0.4% versus the third quarter of 2018, but increased 4.5% on an organic basis due in equal parts to price increases and volume growth.  We experienced growth across all of our customer end markets, including high-single-digit growth in biopharma, driven by broad-based strength across strategic customer accounts and new customer wins. Growth was moderated by a low-single-digit decline in capital-related purchases of equipment and instruments.

Management EBITDA was $85.1 million, flat versus the third quarter of 2018.  Performance was driven by SG&A savings and favorable product mix due to strong sales of proprietary healthcare materials and contraction in sales of lower-margin equipment & instrumentation. These benefits were substantially offset by unfavorable foreign currency transaction and translation impact. 

AMEA

In AMEA, net sales increased 8.1% and were up 8.2% on an organic basis to $84.5 million, driven by volume growth in the biopharma and advanced technologies & applied materials businesses, our two largest end markets in this geographic region. We exited the quarter with over 30% growth for the month of September. 

Management EBITDA of $16.9 million, down 10.6%, was favorably impacted by an increase in gross profit, driven by sales growth. However, this improvement was more than offset by a higher investment in customer-facing sales and marketing functions to support the growth in this strategic region and the opening of new supply chain facilities to better serve our customers. 

Full-Year 2019 Outlook

The Company expects net sales in the range of $6.02-6.08 million, representing growth of 2.7-3.7%, or 5.0%-6.0% on an organic basis.  Adjusted EBITDA is expected to be in the range of $1.025-1.035 billion, or an increase of 8.4-9.4%. Guidance for full-year Adjusted EPS is $0.55-0.58, up 52%-60%.

Our outlook assumes:

  • Current foreign exchange rates
  • Adjusted shares outstanding of 642.7 million
  • Annual effective tax rate of 30-31%

A quantitative reconciliation of adjusted EBITDA and adjusted EPS outlook to the corresponding GAAP information is not provided because the GAAP measures that are excluded from such outlook are difficult to predict and are primarily dependent on future uncertainties.  Items with future uncertainties include the timing and cost of future restructuring activities, charges related to the early retirement of debt, changes in tax rates and other non-recurring items.

Conference call

Avantor will host a conference call to discuss its quarterly results today, November 5, at 8:30 am ET.  To hear the live webcast, please see the Investors section of the Company's website at www.avantorsciences.com.  Or you may listen to the call by dialing (866) 211-4132 (domestic) or (647) 689-6615 (international) and use the conference code 3917679.  Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the Company's website.

Following the live webcast, an audio archive of the webcast and the slide presentation will be available under https://ir.avantorsciences.com/investors/events-and-presentations/.

About Avantor

Avantor is a leading global provider of mission critical products and services to customers in the life sciences and advanced technologies & applied materials industries. We operate in more than 30 countries and deliver an extensive portfolio of products and services. We set science in motion to create a better world.

Use of non-GAAP Financial Measures

To evaluate our performance, we monitor a number of key indicators.  As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles ("GAAP") with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly-titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in reports filed with the SEC in their entirety and not rely solely on any one, single financial measurement or communication.

The non-GAAP financial measures used in this press release are organic sales, Adjusted EBITDA, Adjusted Net Income, pro forma Adjusted EPS, net leverage and unlevered free cash flow.

  • Organic sales eliminates the impact of changes in foreign currency exchange rates from our reported net sales. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason.
  • Adjusted EBITDA is used by investors to measure and evaluate our operating performance exclusive of interest expense, income tax expense, depreciation, amortization and certain infrequently occurring items. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business consistently across the periods presented.
  • Adjusted Net Income is used by investors to measure and evaluate our operating performance exclusive of amortization and certain infrequent occurring items. We believe that this measurement is useful to investors as a way to analyze the underlying trends in our core business consistently across the periods and includes of income tax expense, interest expense and depreciation.
  • Adjusted EPS is our diluted earnings per share adjusted to normalize the number of shares outstanding and to exclude amortization and various infrequently occurring items on an after-tax basis. The normalization of shares reflect for all periods (i) the total number of shares of common stock outstanding following our initial public offering, as well as (ii) the dilutive effect, if any, of the assumed exercise or conversion of instruments (including our 6.250% Series A mandatory convertible preferred stock) into common stock. We believe that this measurement is useful to investors as an additional way to analyze the underlying trends in our business consistently across the periods presented. This measurement is used by our management for the same reason.
  • Adjusted net leverage is equal to our gross debt, reduced by our cash and cash equivalents, divided by our trailing twelve-month Adjusted EBITDA (excluding stock-based compensation expense and including the run rate effect of synergies). We believe that this measurement is useful to investors as a way to evaluate and measure the Company's capital allocation strategies and the underlying trends in the business. This measurement is used by our management for the same reason.
  • Unlevered free cash flow is equal to our cash flow from operating activities, excluding capital expenditures and including our cash interest net of tax. We believe that this measurement is useful to investors as it provides a view on the Company's ability to generate cash for use in financing or other investment activities. This measurement is used by management for the same reason.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements. All statements other than statements of historical fact included in this press release, including our full-year 2019 outlook, are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "intend," "likely," "outlook," "plan," "potential," "project," "projection," "seek," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. Factors that could contribute to these risks, uncertainties and assumptions include, but are not limited to, the factors described in "Risk Factors" in our Registration Statement on Form S-1 (File No. 333-229578) and our Form 10-Q for the quarterly period ended June 30, 2019, as such risk factors may be updated from time to time in our periodic filings with the SEC.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations
(in millions, except per share data) Three months ended September 30, Nine months ended September 30,
2019 2018 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4
Gross profit 474.0 478.7 1,440.3 1,387.0
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8
Operating income 143.2 132.2 399.9 314.2
Interest expense (98.3) (130.2) (342.0) (388.7)
Loss on extinguishment of debt (70.2)
Other (expense) income, net (7.6) (0.9) 2.9 7.0
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5)
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9
Net income (loss) 22.1 34.5 (32.8) (33.6)
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4)
Accretion of make whole premium on series A preferred stock (220.4)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0)
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75)
Weighted average shares outstanding:
Basic 570.0 132.8 343.7 132.7
Diluted 580.7 132.8 343.7 132.7

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018
2019 2018 2019 2018 Assets
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets:
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6
Accretion of make whole premium on series A preferred stock (220.4)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0)
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75)
Weighted average shares outstanding:
Basic 570.0 132.8 343.7 132.7
Diluted 580.7 132.8 343.7 132.7

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities:
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity:
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3
Weighted average shares outstanding: Stockholders' equity (deficit):
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8)
Accumulated deficit (274.3) (238.4)
Accumulated other comprehensive loss (127.5) (66.5)
Total stockholders' equity (deficit) 2,355.6 (3,051.7)
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30,
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities:
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6)
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments:
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7)
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities:
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7)
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1)
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities:
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3)
Accumulated deficit (274.3) (238.4) Other 8.8 9.1
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2)
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities:
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4)
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30, (in millions) Three months ended September 30, Nine months ended September 30, Trailing twelve months ended 9/30/2019
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018 2019 2018 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities: Net income (loss) $ 22.1 $ 34.5 $ (32.8) $ (33.6) $ (86.1)
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6) Amortization 77.9 79.4 234.8 242.5 313.6
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments: Loss on extinguishment of debt 70.2 70.2
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5 Other share-based compensation (benefit) expense (9.2) 33.5 32.8
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 6.4
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0 Restructuring and severance charges 13.4 16.7 19.8 57.1 43.9
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5 Purchase accounting adjustments (3.1) (4.1) (7.2) 2.8 (11.0)
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7) VWR transaction and integration expenses 5.4 5.1 16.8 19.4 33.6
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1 Other 0.2 1.2 0.2 5.4 3.3
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2 Adjustment for U.S. tax reform act (48.8) (48.8) 21.5
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities: Income tax benefit applicable to pretax adjustments (21.1) (24.6) (81.8) (77.5) (109.2)
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7) Adjusted Net Income 93.8 62.8 253.6 167.5 319.0
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8) Interest expense 98.3 130.2 342.0 388.7 477.1
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1) Depreciation 22.4 21.9 66.8 61.0 89.1
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4 Income tax provision applicable to Adjusted Net Income 36.3 40.0 105.2 92.4 118.1
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5 Adjusted EBITDA 250.8 254.9 767.6 709.6 $ 1,003.3
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6 Business performance improvement programs 0.4 3.1 2.2 6.4
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities: Ongoing share-based compensation expense 10.9 5.8 23.9 14.5
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3) Write-offs of working capital and other assets 5.5 0.2 19.9 0.2
Accumulated deficit (274.3) (238.4) Other 8.8 9.1 Long-term incentive plan 0.5 2.7 5.1 8.1
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2) Other 1.1 1.5 2.8 4.2
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities: Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4)
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures (continued)
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30, (in millions) Three months ended September 30, Nine months ended September 30, Trailing twelve months ended 9/30/2019 (shares in millions) Three months ended September 30,
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018 2019 2018 2019 2018 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities: Net income (loss) $ 22.1 $ 34.5 $ (32.8) $ (33.6) $ (86.1) Diluted earnings (loss) per share (GAAP) $ 0.01 $ (0.26)
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6) Amortization 77.9 79.4 234.8 242.5 313.6 Dilutive impact of convertible instruments 0.02 0.39
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments: Loss on extinguishment of debt 70.2 70.2 Normalization for shares issued in IPO (0.08)
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5 Other share-based compensation (benefit) expense (9.2) 33.5 32.8 Fully diluted earnings per share (non-GAAP) 0.03 0.05
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 6.4 Adjustments to reconcile fully diluted earnings per share to Adjusted EPS:
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0 Restructuring and severance charges 13.4 16.7 19.8 57.1 43.9 Amortization 0.12 0.12
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5 Purchase accounting adjustments (3.1) (4.1) (7.2) 2.8 (11.0) Net foreign currency loss from financing activities 0.01 0.01
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7) VWR transaction and integration expenses 5.4 5.1 16.8 19.4 33.6 Other share-based compensation benefit (0.01)
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1 Other 0.2 1.2 0.2 5.4 3.3 Restructuring and severance charges 0.02 0.03
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2 Adjustment for U.S. tax reform act (48.8) (48.8) 21.5 Purchase accounting adjustments (0.01)
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities: Income tax benefit applicable to pretax adjustments (21.1) (24.6) (81.8) (77.5) (109.2) VWR transaction, integration and planning expenses 0.01 0.01
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7) Adjusted Net Income 93.8 62.8 253.6 167.5 319.0 Adjustment for U.S. tax reform act (0.07)
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8) Interest expense 98.3 130.2 342.0 388.7 477.1 Income tax benefit applicable to pretax adjustments (0.03) (0.04)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1) Depreciation 22.4 21.9 66.8 61.0 89.1 Adjusted EPS (non-GAAP) $ 0.15 $ 0.10
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4 Income tax provision applicable to Adjusted Net Income 36.3 40.0 105.2 92.4 118.1
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5 Adjusted EBITDA 250.8 254.9 767.6 709.6 $ 1,003.3 Diluted weighted average shares outstanding (GAAP) 580.7 132.8
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6 Business performance improvement programs 0.4 3.1 2.2 6.4 Dilutive shares excluded for GAAP 62.0 130.2
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities: Ongoing share-based compensation expense 10.9 5.8 23.9 14.5 Fully diluted weighted average shares outstanding (non-GAAP) 642.7 263.0
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3) Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Normalization for shares issued in IPO 379.7
Accumulated deficit (274.3) (238.4) Other 8.8 9.1 Long-term incentive plan 0.5 2.7 5.1 8.1 Pro forma adjusted fully diluted share count (non-GAAP) 642.7 642.7
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2) Other 1.1 1.5 2.8 4.2
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities: Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4)
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

 

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures (continued) Avantor, Inc. and subsidiaries Unaudited reconciliation of non-GAAP measures (continued)
Net leverage
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30, (in millions) Three months ended September 30, Nine months ended September 30, Trailing twelve months ended 9/30/2019 (shares in millions) Three months ended September 30,
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018 2019 2018 2019 2018 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities: Net income (loss) $ 22.1 $ 34.5 $ (32.8) $ (33.6) $ (86.1) Diluted earnings (loss) per share (GAAP) $ 0.01 $ (0.26) (dollars in millions) September 30, 2019
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6) Amortization 77.9 79.4 234.8 242.5 313.6 Dilutive impact of convertible instruments 0.02 0.39 Total debt, gross $ 5,272.9
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments: Loss on extinguishment of debt 70.2 70.2 Normalization for shares issued in IPO (0.08) Less cash and cash equivalents (173.9)
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5 Other share-based compensation (benefit) expense (9.2) 33.5 32.8 Fully diluted earnings per share (non-GAAP) 0.03 0.05 $ 5,099.0
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 6.4 Adjustments to reconcile fully diluted earnings per share to Adjusted EPS:
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0 Restructuring and severance charges 13.4 16.7 19.8 57.1 43.9 Amortization 0.12 0.12 Trailing twelve months Adjusted EBITDA $ 1,003.3
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5 Purchase accounting adjustments (3.1) (4.1) (7.2) 2.8 (11.0) Net foreign currency loss from financing activities 0.01 0.01 Trailing twelve months ongoing share-based compensation expense 28.3
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7) VWR transaction and integration expenses 5.4 5.1 16.8 19.4 33.6 Other share-based compensation benefit (0.01) Pro forma adjustment for projected synergies 36.2
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1 Other 0.2 1.2 0.2 5.4 3.3 Restructuring and severance charges 0.02 0.03 $ 1,067.8
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2 Adjustment for U.S. tax reform act (48.8) (48.8) 21.5 Purchase accounting adjustments (0.01)
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities: Income tax benefit applicable to pretax adjustments (21.1) (24.6) (81.8) (77.5) (109.2) VWR transaction, integration and planning expenses 0.01 0.01 Net leverage (non-GAAP) 4.8 x
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7) Adjusted Net Income 93.8 62.8 253.6 167.5 319.0 Adjustment for U.S. tax reform act (0.07)
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8) Interest expense 98.3 130.2 342.0 388.7 477.1 Income tax benefit applicable to pretax adjustments (0.03) (0.04)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1) Depreciation 22.4 21.9 66.8 61.0 89.1 Adjusted EPS (non-GAAP) $ 0.15 $ 0.10 Free cash flow and unlevered free cash flow
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4 Income tax provision applicable to Adjusted Net Income 36.3 40.0 105.2 92.4 118.1
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5 Adjusted EBITDA 250.8 254.9 767.6 709.6 $ 1,003.3 Diluted weighted average shares outstanding (GAAP) 580.7 132.8
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6 Business performance improvement programs 0.4 3.1 2.2 6.4 Dilutive shares excluded for GAAP 62.0 130.2 (in millions) Three months ended September 30,
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities: Ongoing share-based compensation expense 10.9 5.8 23.9 14.5 Fully diluted weighted average shares outstanding (non-GAAP) 642.7 263.0 2019 2018
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3) Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Normalization for shares issued in IPO 379.7 Net cash provided by operating activities $ 197.9 $ 108.2
Accumulated deficit (274.3) (238.4) Other 8.8 9.1 Long-term incentive plan 0.5 2.7 5.1 8.1 Pro forma adjusted fully diluted share count (non-GAAP) 642.7 642.7 Capital expenditures (13.1) (9.2)
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2) Other 1.1 1.5 2.8 4.2 Free cash flow (non-GAAP) 184.8 99.0
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities: Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0 Cash interest (net of tax)1 21.3 40.2
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4) Unlevered free cash flow (non-GAAP) $ 206.1 $ 139.2
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures (continued) Avantor, Inc. and subsidiaries Unaudited reconciliation of non-GAAP measures (continued)
______________
Net leverage 1    Cash interest tax-effected using a 30% and 32% tax rate for the three months ended September 30, 2019 and 2018, respectively.
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30, (in millions) Three months ended September 30, Nine months ended September 30, Trailing twelve months ended 9/30/2019 (shares in millions) Three months ended September 30,
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018 2019 2018 2019 2018 2019 2018
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities: Net income (loss) $ 22.1 $ 34.5 $ (32.8) $ (33.6) $ (86.1) Diluted earnings (loss) per share (GAAP) $ 0.01 $ (0.26) (dollars in millions) September 30, 2019
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6) Amortization 77.9 79.4 234.8 242.5 313.6 Dilutive impact of convertible instruments 0.02 0.39 Total debt, gross $ 5,272.9
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments: Loss on extinguishment of debt 70.2 70.2 Normalization for shares issued in IPO (0.08) Less cash and cash equivalents (173.9)
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5 Other share-based compensation (benefit) expense (9.2) 33.5 32.8 Fully diluted earnings per share (non-GAAP) 0.03 0.05 $ 5,099.0
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 6.4 Adjustments to reconcile fully diluted earnings per share to Adjusted EPS:
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0 Restructuring and severance charges 13.4 16.7 19.8 57.1 43.9 Amortization 0.12 0.12 Trailing twelve months Adjusted EBITDA $ 1,003.3
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5 Purchase accounting adjustments (3.1) (4.1) (7.2) 2.8 (11.0) Net foreign currency loss from financing activities 0.01 0.01 Trailing twelve months ongoing share-based compensation expense 28.3
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7) VWR transaction and integration expenses 5.4 5.1 16.8 19.4 33.6 Other share-based compensation benefit (0.01) Pro forma adjustment for projected synergies 36.2
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1 Other 0.2 1.2 0.2 5.4 3.3 Restructuring and severance charges 0.02 0.03 $ 1,067.8
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2 Adjustment for U.S. tax reform act (48.8) (48.8) 21.5 Purchase accounting adjustments (0.01)
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities: Income tax benefit applicable to pretax adjustments (21.1) (24.6) (81.8) (77.5) (109.2) VWR transaction, integration and planning expenses 0.01 0.01 Net leverage (non-GAAP) 4.8 x
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7) Adjusted Net Income 93.8 62.8 253.6 167.5 319.0 Adjustment for U.S. tax reform act (0.07)
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8) Interest expense 98.3 130.2 342.0 388.7 477.1 Income tax benefit applicable to pretax adjustments (0.03) (0.04)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1) Depreciation 22.4 21.9 66.8 61.0 89.1 Adjusted EPS (non-GAAP) $ 0.15 $ 0.10 Free cash flow and unlevered free cash flow
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4 Income tax provision applicable to Adjusted Net Income 36.3 40.0 105.2 92.4 118.1
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5 Adjusted EBITDA 250.8 254.9 767.6 709.6 $ 1,003.3 Diluted weighted average shares outstanding (GAAP) 580.7 132.8
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6 Business performance improvement programs 0.4 3.1 2.2 6.4 Dilutive shares excluded for GAAP 62.0 130.2 (in millions) Three months ended September 30,
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities: Ongoing share-based compensation expense 10.9 5.8 23.9 14.5 Fully diluted weighted average shares outstanding (non-GAAP) 642.7 263.0 2019 2018
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3) Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Normalization for shares issued in IPO 379.7 Net cash provided by operating activities $ 197.9 $ 108.2
Accumulated deficit (274.3) (238.4) Other 8.8 9.1 Long-term incentive plan 0.5 2.7 5.1 8.1 Pro forma adjusted fully diluted share count (non-GAAP) 642.7 642.7 Capital expenditures (13.1) (9.2)
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2) Other 1.1 1.5 2.8 4.2 Free cash flow (non-GAAP) 184.8 99.0
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities: Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0 Cash interest (net of tax)1 21.3 40.2
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4) Unlevered free cash flow (non-GAAP) $ 206.1 $ 139.2
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

 

 

Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of operations Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated balance sheets Avantor, Inc. and subsidiaries Unaudited condensed consolidated statements of cash flows Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures Avantor, Inc. and subsidiaries Unaudited reconciliations of non-GAAP measures (continued) Avantor, Inc. and subsidiaries Unaudited reconciliation of non-GAAP measures (continued) Avantor, Inc. and subsidiaries Unaudited supplemental financial information
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Net leverage 1    Cash interest tax-effected using a 30% and 32% tax rate for the three months ended September 30, 2019 and 2018, respectively. Net sales
(in millions, except per share data) Three months ended September 30, Nine months ended September 30, (in millions) September 30, 2019 December 31, 2018 (in millions) September 30, 2019 December 31, 2018 (in millions) Nine months ended September 30, (in millions) Three months ended September 30, Nine months ended September 30, Trailing twelve months ended 9/30/2019 (shares in millions) Three months ended September 30,
2019 2018 2019 2018 Assets Liabilities, redeemable equity and stockholders' equity or deficit 2019 2018 2019 2018 2019 2018 2019 2018 Three months ended September 30, Reconciliation of reported change to organic change
Net sales $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Current assets: Current liabilities: Cash flows from operating activities: Net income (loss) $ 22.1 $ 34.5 $ (32.8) $ (33.6) $ (86.1) Diluted earnings (loss) per share (GAAP) $ 0.01 $ (0.26) (dollars in millions) September 30, 2019
Cost of sales 1,029.8 1,015.5 3,076.0 3,003.4 Cash and cash equivalents $ 173.9 $ 184.7 Current portion of debt $ 41.4 $ 142.4 Net loss $ (32.8) $ (33.6) Amortization 77.9 79.4 234.8 242.5 313.6 Dilutive impact of convertible instruments 0.02 0.39 Total debt, gross $ 5,272.9 (in millions) 2019 2018 Reported change Foreign currency impact Organic change
Gross profit 474.0 478.7 1,440.3 1,387.0 Accounts receivable, net 983.3 931.2 Accounts payable 556.3 557.4 Reconciling adjustments: Loss on extinguishment of debt 70.2 70.2 Normalization for shares issued in IPO (0.08) Less cash and cash equivalents (173.9) Americas $ 918.2 $ 912.9 $ 5.3 $ (1.2) $ 6.5
Selling, general and administrative expenses 330.8 346.5 1,040.4 1,072.8 Inventory 714.5 671.1 Employee-related liabilities 118.9 144.9 Depreciation and amortization 301.6 303.5 Other share-based compensation (benefit) expense (9.2) 33.5 32.8 Fully diluted earnings per share (non-GAAP) 0.03 0.05 $ 5,099.0 Europe 501.1 503.1 (2.0) (24.7) 22.7
Operating income 143.2 132.2 399.9 314.2 Other current assets 147.0 112.6 Accrued interest 135.1 76.6 Share-based compensation expense 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 6.4 Adjustments to reconcile fully diluted earnings per share to Adjusted EPS: AMEA 84.5 78.2 6.3 (0.1) 6.4
Interest expense (98.3) (130.2) (342.0) (388.7) Total current assets 2,018.7 1,899.6 Other current liabilities 227.0 174.9 Other restructuring charges 10.0 Restructuring and severance charges 13.4 16.7 19.8 57.1 43.9 Amortization 0.12 0.12 Trailing twelve months Adjusted EBITDA $ 1,003.3 Total $ 1,503.8 $ 1,494.2 $ 9.6 $ (26.0) $ 35.6
Loss on extinguishment of debt (70.2) Property, plant and equipment, net of accumulated depreciation of $290.4      and $225.8 559.4 598.6 Total current liabilities 1,078.7 1,096.2 Provision for accounts receivable and inventory 22.9 19.5 Purchase accounting adjustments (3.1) (4.1) (7.2) 2.8 (11.0) Net foreign currency loss from financing activities 0.01 0.01 Trailing twelve months ongoing share-based compensation expense 28.3
Other (expense) income, net (7.6) (0.9) 2.9 7.0 Customer relationships, net of accumulated amortization of $578.7 and      $412.5 3,917.0 4,159.8 Debt, net of current portion 5,088.7 6,782.3 Deferred income tax benefit (67.5) (135.7) VWR transaction and integration expenses 5.4 5.1 16.8 19.4 33.6 Other share-based compensation benefit (0.01) Pro forma adjustment for projected synergies 36.2
Income (loss) before income taxes 37.3 1.1 (9.4) (67.5) Other intangible assets, net of accumulated amortization of $203.2 and      $146.7 331.2 405.9 Deferred income tax liabilities 832.8 907.5 Amortization of deferred financing costs 26.5 31.1 Other 0.2 1.2 0.2 5.4 3.3 Restructuring and severance charges 0.02 0.03 $ 1,067.8
Income tax (expense) benefit (15.2) 33.4 (23.4) 33.9 Goodwill 2,736.0 2,784.7 Other liabilities 407.3 318.0 Loss on extinguishment of debt 70.2 Adjustment for U.S. tax reform act (48.8) (48.8) 21.5 Purchase accounting adjustments (0.01)
Net income (loss) 22.1 34.5 (32.8) (33.6) Other assets 200.8 63.0 Total liabilities 7,407.5 9,104.0 Changes in assets and liabilities: Income tax benefit applicable to pretax adjustments (21.1) (24.6) (81.8) (77.5) (109.2) VWR transaction, integration and planning expenses 0.01 0.01 Net leverage (non-GAAP) 4.8 x
Accumulation of yield on preferred stock (16.4) (68.9) (136.4) (198.4) Total assets $ 9,763.1 $ 9,911.6 Commitments and contingencies Accounts receivable (76.9) (86.7) Adjusted Net Income 93.8 62.8 253.6 167.5 319.0 Adjustment for U.S. tax reform act (0.07)
Accretion of make whole premium on series A preferred stock (220.4) Redeemable equity: Inventory (74.1) (19.8) Interest expense 98.3 130.2 342.0 388.7 477.1 Income tax benefit applicable to pretax adjustments (0.03) (0.04)
Net income (loss) available to common stockholders $ 5.7 $ (34.4) $ (389.6) $ (232.0) Series A preferred stock at redemption value, zero and 2.3 shares      outstanding 2,297.3 Accounts payable 7.9 (28.1) Depreciation 22.4 21.9 66.8 61.0 89.1 Adjusted EPS (non-GAAP) $ 0.15 $ 0.10 Free cash flow and unlevered free cash flow
Junior convertible preferred stock, zero and 1.7 shares outstanding 1,562.0 Other assets and liabilities 22.2 48.4 Income tax provision applicable to Adjusted Net Income 36.3 40.0 105.2 92.4 118.1
Earnings (loss) per share, basic and diluted $ 0.01 $ (0.26) $ (1.13) $ (1.75) Total redeemable equity 3,859.3 Other, net (0.4) 17.5 Adjusted EBITDA 250.8 254.9 767.6 709.6 $ 1,003.3 Diluted weighted average shares outstanding (GAAP) 580.7 132.8
Weighted average shares outstanding: Stockholders' equity (deficit): Net cash provided by operating activities 267.0 130.6 Business performance improvement programs 0.4 3.1 2.2 6.4 Dilutive shares excluded for GAAP 62.0 130.2 (in millions) Three months ended September 30,
Basic 570.0 132.8 343.7 132.7 Mandatory convertible preferred stock including paid-in capital, 20.7 and zero      shares outstanding 1,003.7 Cash flows from investing activities: Ongoing share-based compensation expense 10.9 5.8 23.9 14.5 Fully diluted weighted average shares outstanding (non-GAAP) 642.7 263.0 2019 2018
Diluted 580.7 132.8 343.7 132.7 Common stock including paid-in capital, 571.4 and 132.8 shares outstanding 1,753.7 (2,746.8) Capital expenditures (39.5) (32.3) Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Normalization for shares issued in IPO 379.7 Net cash provided by operating activities $ 197.9 $ 108.2
Accumulated deficit (274.3) (238.4) Other 8.8 9.1 Long-term incentive plan 0.5 2.7 5.1 8.1 Pro forma adjusted fully diluted share count (non-GAAP) 642.7 642.7 Capital expenditures (13.1) (9.2)
Accumulated other comprehensive loss (127.5) (66.5) Net cash used in investing activities (30.7) (23.2) Other 1.1 1.5 2.8 4.2 Free cash flow (non-GAAP) 184.8 99.0
Total stockholders' equity (deficit) 2,355.6 (3,051.7) Cash flows from financing activities: Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0 Cash interest (net of tax)1 21.3 40.2
Total liabilities, redeemable equity and stockholders' equity or deficit $ 9,763.1 $ 9,911.6 Debt repayments (1,825.4) (95.4) Unlevered free cash flow (non-GAAP) $ 206.1 $ 139.2
Dividend payment (15.1)
Payments of contingent consideration (4.6) (20.5)
Proceeds from issuance of stock, net of issuance costs 4,235.6
Redemption of series A preferred stock (2,630.9)
Net cash used in financing activities (240.4) (115.9)
Effect of currency rate changes on cash, restricted cash and equivalents (6.7) (5.3)
Net change in cash, restricted cash and equivalents (10.8) (13.8)
Cash, restricted cash and equivalents, beginning of period 187.7 188.5
Cash, restricted cash and equivalents, end of period $ 176.9 $ 174.7

 

 

Media ContactAllison HosakSenior Vice President, Global CommunicationsAvantor+1 610-573-2661Allison.Hosak@Avantorsciences.com

Investor Relations ContactHelen O'DonnellManaging DirectorSolebury Trout+1-203-428-3213Hodonnell@soleburytrout.com

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