- 2019 revenue is expected to be
between $3.10 billion and $3.16 billion.
- Earnings per share (EPS) for 2019
are expected to be in the range of $0.36 to $0.48 on a reported
basis and $1.02 to $1.12 on an adjusted basis.
- The company now expects 2018 EPS to
be in the range of $0.15 to $0.17 on a reported basis. On an
adjusted basis, the company reaffirms its expectation for 2018 EPS
to be in the range of $1.14 to $1.16.
Elanco Animal Health Incorporated (NYSE: ELAN) today announced
its updated 2018 and initial 2019 financial guidance, including
2019 revenue expectations in the range of $3.10 billion to $3.16
billion.
Elanco expects earnings per share (EPS) in 2019 of $0.36 to
$0.48 on a reported basis and $1.02 to $1.12 on an adjusted
basis.
Revenue in 2018 is still expected to be between $3.05 billion to
$3.08 billion. EPS in 2018 are being adjusted to $0.15 to $0.17
(from $0.31 to $0.33) on a reported basis due to restructuring
actions as part of the company’s productivity agenda and a charge
due to an increase in contingent consideration liability. Adjusted
EPS are still expected to be in the range of $1.14 to $1.16.
“Our financial expectations for 2019 build on the momentum we
established in 2018, thanks to our targeted, value-generating
strategy focused on Portfolio, Innovation and Productivity,” said
Jeff Simmons, President and Chief Executive Officer of Elanco. “As
we close out 2018 and look forward to our first full-year as a
public company, we are well positioned to grow top line revenue
through innovation and our targeted growth categories, while we
expect our productivity agenda to continue to expand our operating
margin.”
“Entering 2019, Elanco is positioned to capitalize on the
positive fundamentals across the animal health industry, primarily
the increasing pet ownership and spend, aging pets, and increasing
global demand for protein,” said Todd Young, Executive Vice
President and Chief Financial Officer. “In addition to executing on
our commercial strategy, we are undertaking the steps to operate as
a stand-alone entity, including creating the necessary back-office
and governance structures. We also continue to drive efficiencies
and productivity, as evidenced by our recently announced
restructuring which eliminates direct presence in 16 countries and
creates a flatter, leaner, and more focused organization that
positions leaders closer to the customer.”
2018 Financial Guidance
Revenue is still expected to be between $3.05 billion to $3.08
billion.
Full-Year 2018 Guidance GAAP EPS
$0.15 to $0.17 Cost of
sales(1)
0.11
Amortization of intangible assets
0.54
Asset impairments, restructuring and other special charges(2)
0.38
Other-net, (income) expense(3)
0.10
Income before taxes $1.28 to
$1.30 Tax impact of adjustments
(0.14)
Adjusted EPS $1.14 to
$1.16
Adjustments to GAAP EPS include the following:
(1) Excludes charges primarily associated with inventory
adjustments related to the suspension of commercial activities for
Imrestor, as well as the exit of the Larchwood, IA facility. (2)
Excludes charges primarily associated with impairment and exit
costs related to other facility closures as well as restructuring
charges related to integration activities, organizational changes
and the transition from affiliate presence to distribution models
in a number of countries, impairment related to the suspension of
commercial activities for Imrestor and costs associated with
establishing stand-alone capabilities. (3) Excludes adjustments of
contingent consideration related to Aratana.
2019 Financial Guidance
Elanco expects 2019 revenue of $3.10 billion to $3.16 billion.
Core Revenue, which excludes Strategic Exits is expected to be
$3.04 billion to $3.10 billion. Revenue from Strategic Exits is
expected to be approximately $0.06 billion.
Elanco expects earnings per share for 2019 in the range of $0.36
to $0.48 on a reported basis and $1.02 to $1.12 on a non-GAAP
basis. Non-GAAP earnings per share for 2019 exclude amortization of
intangible assets and the costs associated with establishing
stand-alone capabilities.
Full-Year 2019 Guidance GAAP EPS
$0.36 to $0.48
Amortization of intangible assets 0.53 Expenses associated
with establishing stand-alone capabilities 0.28
to
0.26
Income before taxes $1.17
to
$1.27 Tax impact of adjustments (0.15)
Adjusted EPS $1.02
to
$1.12
WEBCAST & CONFERENCE CALL
DETAILS
As previously announced, Elanco will host a webcast and
conference call at 8:00 a.m. eastern today to discuss 2018 and 2019
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/investors/events-and-presentations/events-calendar/event-details/2018/Elanco-2019-Guidance-Call/default.aspx
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 and 2019
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 and adjusted EPS, to assess and analyze our
operational results and trends as explained in more detail in the
reconciliation tables 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) all such
measures may not exclude all unusual or no-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 Elanco. We
encourage investors to consult our website regularly for important
information about Elanco.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181218005135/en/
Investor Contact:Jim Greffet(317)
383-9935greffet_james_f@elanco.com
Media Contact:Colleen Parr Dekker(317)
989-7011colleen_parr_dekker@elanco.com
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