West Announces First-Quarter 2020 Results
First-Quarter 2020 Summary (comparisons to prior-year period)
- Net sales of
$491.5 million grew 10.8%; organic sales growth was 12.7%. - Reported-diluted EPS of
$0.99 increased 36%. - Adjusted-diluted EPS of
$1.01 increased 36%. - The Company is maintaining full-year 2020 net sales guidance and is updating full-year 2020 adjusted-diluted EPS guidance to a new range of
$3.52 to$3.62 , compared to a prior range of$3.45 to$3.55 .
"Adjusted-diluted EPS" and "organic sales growth" are Non-
"During these unprecedented times, our priorities are focused on the well-being and safety of our team members as well as ensuring the supply of critical, high-quality components and solutions to our customers," said
Proprietary Products Segment
Net sales grew by 9.7% to
The Biologics market unit had strong double-digit organic sales growth. The Generics market unit had high-single digit organic sales growth, and the Pharma market unit had mid-single digit organic sales growth.
Contract-Manufactured Products Segment
Net sales grew by 14.5% to
Financial Highlights
Operating cash flow was
During the quarter, the Company repurchased 761,500 shares for
Our capital and financial resources, including overall liquidity, remain strong. We believe that cash on hand and cash generated from operations, together with availability under our Credit Facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our business operations, capital expenditures and scheduled payments of debt obligations.
Full-Year 2020 Financial Guidance
- Full-year 2020 net sales guidance continues to be in a range of
$1.95 billion to$1.97 billion . - Organic sales growth is expected to be approximately 8%, compared to a prior guidance range of 7% to 8%.
- Net sales guidance includes an estimated full-year headwind of
$26 million for the full-year 2020 based on current foreign exchange rates, compared to prior guidance of$15 million .
- Full-year 2020 adjusted-diluted EPS is expected to be in a range of
$3.52 to$3.62 , compared to prior guidance range of$3.45 to$3.55 . - Full-year adjusted-diluted EPS guidance includes an estimated headwind of approximately
$0.07 based on current foreign currency exchange rates, compared to prior guidance of approximately$0.04 . - The revised guidance includes a
$0.07 EPS impact from first-quarter tax benefits from stock-based compensation. - For the remainder of the year, our EPS guidance range assumes a tax rate of 24% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first-quarter 2020 would provide a positive adjustment to our full-year EPS guidance.
First-Quarter 2020 Conference Call
The Company will host a conference call to discuss the results and business expectations at
A live broadcast of the conference call will be available at the Company's website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company's website.
An online archive of the broadcast will be available at the website three hours after the live call and will be available through
Forward-Looking Statements
Certain forward-looking statements appear in this release and include such words as "maintaining," "updating," "ensuring," "remain," "to be," "expected," "includes," "assumes," "provide," "believe," "continues," "will be," and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this release. There is no certainty that actual results will be achieved in-line with current expectations. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements: the duration and severity of the global COVID-19 pandemic, including prevailing economic conditions and general uncertainties relating thereto that may be unknown and unforeseeable; customers' changing inventory requirements and manufacturing plans and customer decisions to move forward with our new products and product categories, including any re-prioritization of product needs due to COVID-19; other potential impacts from COVID-19, including interruptions or weaknesses in our supply chain, illness in our workforce and access to transport for our products; average profitability, or mix, of the products we sell; dependence on third-party suppliers and partners; increased raw material costs; fluctuations in currency exchange; and the ability to meet development milestones with key customers. This list of important factors is not all inclusive. For a description of certain additional factors that could cause the Company's future results to differ from those expressed in any such forward-looking statements, see Item 1A, entitled "Risk Factors," in the Company's Annual Report on Form 10-K for the year ended
Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-
For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates. Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in millions, except per share data) |
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Three Months Ended |
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2020 |
2019 |
|||
Net sales |
|
100% |
|
100% |
Cost of goods and services sold |
324.5 |
66 |
296.7 |
67 |
Gross profit |
167.0 |
34 |
146.8 |
33 |
Research and development |
10.7 |
2 |
9.8 |
2 |
Selling, general and administrative expenses |
71.8 |
14 |
68.6 |
15 |
Other income |
(3.5) |
- |
(2.3) |
- |
Operating profit |
88.0 |
18 |
70.7 |
16 |
Interest expense, net |
1.2 |
- |
1.4 |
- |
Other nonoperating expense (income) |
0.3 |
- |
(0.6) |
- |
Income before income taxes |
86.5 |
18 |
69.9 |
16 |
Income tax expense |
15.0 |
3 |
16.1 |
4 |
Equity in net income of affiliated companies |
(2.8) |
- |
(1.6) |
- |
Net income |
|
15% |
|
12% |
Net income per share: |
||||
Basic |
|
|
||
Diluted |
|
|
||
Average common shares outstanding |
73.9 |
74.1 |
||
Average shares assuming dilution |
75.5 |
75.3 |
REPORTING SEGMENT INFORMATION (UNAUDITED) (in millions) |
||
Three Months Ended |
||
|
||
|
2020 |
2019 |
Proprietary Products |
|
|
Contract-Manufactured Products |
118.1 |
103.1 |
Eliminations |
(0.1) |
- |
Consolidated Total |
|
|
Gross Profit: |
||
Proprietary Products |
|
|
Contract-Manufactured Products |
16.9 |
14.5 |
Gross Profit |
|
|
Gross Profit Margin |
34.0% |
33.1% |
Operating Profit (Loss): |
||
Proprietary Products |
|
|
Contract-Manufactured Products |
12.8 |
10.5 |
Stock-based compensation expense |
(5.4) |
(6.2) |
General corporate costs |
(12.6) |
(10.0) |
Adjusted Operating Profit |
|
|
Adjusted Operating Profit Margin |
17.9% |
16.1% |
Other unallocated items |
- |
(0.6) |
Reported Operating Profit |
|
|
Reported Operating Profit Margin |
17.9% |
15.9% |
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) Please refer to "Non- (in millions, except per share data) |
||||
Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS |
||||
Three months ended |
Operating |
Income |
Net |
Diluted |
Reported ( |
|
|
|
|
Pension Settlement (1) |
- |
0.3 |
1.1 |
0.01 |
Amortization of Acquisition-related Intangible Assets (2) |
- |
- |
1.0 |
0.01 |
Adjusted (Non- |
|
|
|
|
Three months ended |
Operating |
Income |
Net |
Diluted |
Reported ( |
|
|
|
|
Restructuring and related charges (3) |
0.6 |
0.2 |
0.4 |
0.01 |
Adjusted (Non- |
|
|
|
|
(1) |
During the three months ended |
(2) |
During the three months ended |
(3) |
During the three months ended |
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) Please refer to "Non- (in millions, except per share data) |
||||
Reconciliation of |
||||
Three months ended |
Proprietary |
CM |
Eliminations |
Total |
Reported net sales ( |
|
|
|
|
Effect of acquisitions and/or divestitures |
(1.2) |
- |
- |
(1.2) |
Effect of changes in currency translation rates |
8.3 |
1.4 |
- |
9.7 |
Organic net sales (Non- |
|
|
|
|
(4) |
Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the |
|
|||
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) |
|||
Please refer to "Non- |
|||
(in millions, except per share data) |
|||
Reconciliation of Reported-Diluted EPS Guidance to Adjusted-Diluted EPS Guidance |
|||
2019 Actual |
2020 Guidance |
% Change |
|
Reported-diluted EPS ( |
|
|
8.1% to 11.2% |
Restructuring and related charges |
0.04 |
- |
- |
Gain on restructuring-related sales of |
(0.02) |
- |
- |
Pension settlement |
0.04 |
0.01 |
- |
Amortization of acquisition-related |
- |
0.04 |
- |
|
0.01 |
- |
- |
Tax recovery |
(0.04) |
- |
- |
Adjusted-diluted EPS (Non- |
|
|
8.6% to 11.7% |
Notes: |
|
See "Full-year 2020 Financial Guidance" and "Non- |
|
(5) |
In 2019, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by |
CASH FLOW ITEMS (UNAUDITED) (in millions) |
||
Three Months Ended |
||
2020 |
2019 |
|
Depreciation and amortization |
|
|
Operating cash flow |
|
|
Capital expenditures |
|
|
FINANCIAL CONDITION (UNAUDITED) (in millions) |
||
As of |
As of |
|
Cash and cash equivalents |
|
|
Accounts receivable, net |
|
|
Inventories |
|
|
Accounts payable |
|
|
Debt |
|
|
Equity |
|
|
Working capital |
|
|
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SOURCE
Investor Contact: Quintin Lai, Vice President, Investor Relations, (610) 594-3318, Quintin.Lai@westpharma.com or Media Contact: Michele Pelkowski, Sr. Director, Global Communications, (610) 594-3054, Michele.Pelkowski@westpharma.com