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Viatris 8-K Report, Financial Results (Nov 7, 2024)

Reports
Earnings & Results·Other Events·Exhibits & Filings
Filing Date
Filed November 7, 2024
Period End
November 7, 2024
Security
VTRS
In the record · 2020–202610-K1210-Q208-K72

VTRS filed 12 annual reports (10-K), 20 quarterly reports (10-Q) and 72 current reports (8-K) between 2020 and 2026.

  1. Restructuring8-K · Feb ’21Feb ’21
  2. Deal closed8-K · Nov ’22Nov ’22
  3. Material agreement8-K · Jan ’24Jan ’24
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Viatris Inc. (Nasdaq: VTRS) reported third-quarter 2024 results for the period ended September 30, 2024, per Exhibit 99.1 to this Form 8-K.

Total revenues were $3.8 billiona ($3,751.2 million), with net sales of $3,738.0 million, and the company described divestiture-adjusted operational net sales growth of 3% for the quarter. U.S. GAAP net earnings were $94.8 million, or $0.08 per diluted share, compared with $331.6 million and $0.27 per share in the prior-year quarter. Adjusted EBITDA was $1,284.6 million and adjusted EPS was $0.75, which management said grew about 4% and about 6%, respectively, on a divestiture-adjusted operational basis.

Management highlighted new product revenues of $133 millionb in the quarter, the repayment of approximately $1.9 billion of debt including a make-whole call on 2025 Euro Senior Notes, and an exclusive licensing agreement with Lexicon Pharmaceuticals for sotagliflozin outside the U.S. and Europe. The company reaffirmed its 2024 full-year outlook, with U.S. GAAP total revenues estimated at $14.60 to $15.10 billion and adjusted EBITDA guidance of $4,575 to $4,845 million, and it stated it expects to reach a long-term gross leverage target of about 3.0x by year end. The company's gross debt to adjusted EBITDA ratio was 3.1x as of September 30, 2024.

For investors, the filing shows a quarter with reported GAAP earnings sharply lower year over year, driven in part by a $107.4 millionc loss on divestitures and $207.5 million of restructuring, acquisition, divestiture-related and other special items in the adjusted EBITDA reconciliation, while adjusted metrics and free cash flow of $749.5 million were more stable. Under the item 8.01 disclosure, the conference call and webcast were scheduled for 8:30 a.m. ET on the filing date.

02—Key points

Key Highlights

  1. Total revenues of $3,751.2 million for Q3 2024; net sales of $3,738.0 million, down about 5% on a U.S. GAAP basis but up about 3% on a divestiture-adjusted operational basis.
  2. U.S. GAAP net earnings of $94.8 million ($0.08 per diluted share) versus $331.6 million ($0.27 per share) in Q3 2023.
  3. Adjusted EBITDA of $1,284.6 million and adjusted EPS of $0.75, with management citing divestiture-adjusted operational growth of about 4% and about 6%, respectively.
  4. New product revenues of approximately $133 million in the quarter; the company expects $500 million to $600 million in 2024.
  5. Repaid approximately $1.9 billion of debt; gross debt to adjusted EBITDA was 3.1x, with a long-term gross leverage target of about 3.0x that management expects to reach by year end.
  6. 2024 guidance reaffirmed: total revenues of $14.60 to $15.10 billion, adjusted EBITDA of $4,575 to $4,845 million, free cash flow of $2,170 to $2,570 million, and adjusted EPS of $2.56 to $2.71.
  7. Exclusive licensing agreement with Lexicon Pharmaceuticals for sotagliflozin in markets outside the U.S. and Europe, with an acquired IPR&D impact of ($0.02) on adjusted EPS guidance.

03—Questions

Frequently Asked Questions

  1. How did Viatris perform in the third quarter of 2024?

    Total revenues were $3,751.2 million and net sales were $3,738.0 million. On a U.S. GAAP basis, net sales declined about 5%, while divestiture-adjusted operational net sales grew about 3%. Adjusted EBITDA was $1,284.6 million and adjusted EPS was $0.75.

  2. Why were U.S. GAAP earnings much lower than in the prior-year quarter?

    U.S. GAAP net earnings were $94.8 million versus $331.6 million a year earlier. The reconciliation includes items such as a $107.4 million loss on divestitures, $98.2 million of acquisition and divestiture-related costs, $105.4 million of restructuring-related costs, and $586.0 million of purchase accounting amortization.

  3. What did Viatris say about its debt and leverage?

    The company repaid approximately $1.9 billion of debt, including a make-whole call of €292 million (about $325 million) on its remaining 2025 Euro Senior Notes on October 16, 2024. Its gross debt to adjusted EBITDA ratio was 3.1x, and it expects to achieve its long-term gross leverage target of about 3.0x by year end.

  4. Did Viatris change its 2024 outlook?

    Viatris reaffirmed its 2024 guidance. It estimates total revenues of $14.60 to $15.10 billion, adjusted EBITDA of $4,575 to $4,845 million, free cash flow of $2,170 to $2,570 million, and adjusted EPS of $2.56 to $2.71, and expects to be at the midpoint of these ranges.

  5. What is the sotagliflozin licensing agreement?

    Viatris entered into an exclusive licensing agreement with Lexicon Pharmaceuticals for sotagliflozin in all markets outside the U.S. and Europe. Sotagliflozin was approved by the FDA in May 2023 for certain cardiovascular and heart failure indications. The company estimates an acquired IPR&D impact of ($0.02) on 2024 adjusted EPS guidance.

04—Continue

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