EX-99.1 2 mnk991q42021er.htm EX-99.1 Document

Exhibit 99.1

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Three Months Ended 1
December 31,
2021		Percent of
Net sales		December 25,
2020		Percent of
Net sales
Net sales
$597.2 100.0 %$682.8 100.0 %
Cost of sales358.7 60.1 372.3 54.5 
Gross profit238.5 39.9 310.5 45.5 
Selling, general and administrative expenses173.5 29.1 200.9 29.4 
Research and development expenses38.9 6.5 65.0 9.5 
Restructuring charges, net9.4 1.6 21.7 3.2 
Non-restructuring impairment charges90.4 15.1 — — 
Gains on divestiture— — (6.5)(1.0)
Opioid-related litigation settlement gain— — (9.3)(1.4)
Operating (loss) income(73.7)(12.3)38.7 5.7 
Interest expense(61.9)(10.4)(60.2)(8.8)
Interest income— — 0.5 0.1 
Other income, net6.1 1.0 6.3 0.9 
Reorganization items, net(99.0)(16.6)(61.4)(9.0)
Loss from continuing operations before income taxes(228.5)(38.3)(76.1)(11.1)
Income tax (benefit) expense(24.4)(4.1)78.1 11.4 
Loss from continuing operations(204.1)(34.2)(154.2)(22.6)
Income from discontinued operations, net of income taxes0.1 — 1.3 0.2 
Net loss$(204.0)(34.2)%$(152.9)(22.4)%
Basic loss per share:
Loss from continuing operations$(2.41)$(1.82)
Income from discontinued operations— 0.02 
Net loss$(2.41)$(1.81)
Diluted loss per share:
Loss from continuing operations$(2.41)$(1.82)
Income from discontinued operations— 0.02 
Net loss$(2.41)$(1.81)
Weighted-average number of shares outstanding
Basic weighted-average shares outstanding84.784.6
Diluted weighted-average shares outstanding84.784.6
(1)The Company reports its results based on a "52-53 week" year ending on the last Friday of December. The three months ended December 31, 2021 refers to the fourteen week period ended December 31, 2021 and the three months ended December 25, 2020 refers to the thirteen week period ended December 25, 2020.



1

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
CONSOLIDATED ADJUSTED EBITDA
(unaudited, in millions)
Three Months Ended
December 31, 2021December 25, 2020
Gross ProfitSG&AR&DAdjusted EBITDAGross ProfitSG&AR&DAdjusted EBITDA
Net loss$238.5 $173.5 $38.9 $(204.0)$310.5 $200.9 $65.0 $(152.9)
Adjustments:
Interest expense, net— — — 61.9 — — — 59.7 
Income taxes— — — (24.4)— — — 78.1 
Depreciation(1)
18.1 (4.2)(2.1)24.4 17.7 (18.8)(1.8)38.3 
Amortization144.4 (0.9)— 145.3 170.6 (0.8)— 171.4 
Restructuring charges, net— — — 9.4 — — — 21.7 
Non-restructuring impairment charge— — — 90.4 — — — — 
Income from discontinued operations— — — (0.1)— — — (1.3)
Change in contingent consideration fair value— (0.2)— 0.2 — (7.5)— 7.5 
Significant legal and environmental charges (2)
— (34.3)— 34.3 0.9 (2.6)— (5.8)
Gains on divestiture— — — — — — — (6.5)
Separation costs— (0.2)— 0.2 — (18.4)— 18.4 
Unrealized gain on equity investment— — — 0.1 — — — (1.6)
Reorganization items, net— — — 99.0 — — — 61.4 
Share-based compensation 0.1 (1.5)(0.2)1.8 0.4 (6.0)(1.3)7.7 
Japanese consumption tax credit— — — (6.8)— — — — 
As adjusted:$401.1 $132.2 $36.6 $231.7 $500.1 $146.8 $61.9 $296.1 
(1)Includes $0.1 million and $12.3 million of accelerated depreciation in selling general and administrative expenses ("SG&A") related to restructuring charges incurred during the three months ended December 31, 2021 and December 25, 2020, respectively.
(2)Represents an increase in environmental liabilities during the three months ended December 31, 2021. The three months ended December 25, 2020 includes a $9.3 million decrease in the fair value of the opioid settlement warrants, partially offset by $2.6 million in opioid defense costs and a $0.9 million change to the retrospective Medicaid lawsuit liability.



2

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT OPERATING INCOME
(unaudited, in millions)
Three Months Ended
December 31,
2021		December 25,
2020
Specialty Brands$224.2 $250.7 
Specialty Generics34.1 50.9 
Segment operating income258.3 301.6 
Unallocated amounts:
Corporate and unallocated expenses (1)
(60.5)(13.8)
Depreciation and amortization(169.7)(209.7)
Share-based compensation(1.8)(7.7)
Restructuring charges, net(9.4)(21.7)
Non-restructuring impairment charges(90.4)— 
Separation costs(0.2)(18.4)
Opioid-related litigation settlement gain— 9.3 
Medicaid lawsuit— (0.9)
Operating (loss) income$(73.7)$38.7 
(1)Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments.
3

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Three Months Ended
December 31,
2021		December 25,
2020		Percent
change		Currency impactConstant-currency growth
Specialty Brands$397.4 $506.6 (21.6)%(0.1)%(21.5)%
Specialty Generics199.8 177.1 12.8 0.1 12.7 
Segment net sales597.2 683.7 (12.7)(0.1)(12.6)
Medicaid lawsuit— (0.9)***
Net sales$597.2 $682.8 (12.5)%(0.1)%(12.4)%
*Not meaningful
MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SELECT PRODUCT LINE NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Three Months Ended
December 31,
2021		December 25,
2020		Percent
change		Currency impactConstant-currency growth
Specialty Brands
Acthar Gel$169.7 $191.3 (11.3)%— %(11.3)%
INOmax110.2 135.6 (18.7)— (18.7)
Ofirmev4.9 60.5 (91.9)— (91.9)
Therakos68.7 64.5 6.5 (0.9)7.4 
Amitiza41.1 50.6 (18.8)— (18.8)
Other2.8 4.1 (31.7)— (31.7)
Specialty Brands Total397.4 506.6 (21.6)(0.1)(21.5)
Specialty Generics
Hydrocodone (API) and hydrocodone-containing tablets22.0 26.1 (15.7)— (15.7)
Oxycodone (API) and oxycodone-containing tablets19.0 20.4 (6.9)— (6.9)
Acetaminophen (API)69.1 58.5 18.1 — 18.1 
Other controlled substances84.8 66.1 28.3 0.2 28.1 
Other4.9 6.0 (18.3)— (18.3)
Specialty Generics Total199.8 177.1 12.8 0.1 12.7 
Segment net sales597.2 683.7 (12.7)(0.1)(12.6)
Medicaid lawsuit— (0.9)***
Net sales$597.2 $682.8 (12.5)%(0.1)%(12.4)%
*Not meaningful



4

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share data)
Fiscal Year 1
December 31,
2021		Percent of
Net sales		December 25,
2020		Percent of
Net sales
Net sales (includes refined estimate of the retrospective one-time charge of $536.0 related to the Medicaid lawsuit for the fiscal year ended December 25, 2020)
$2,208.8 100.0 %$2,213.4 100.0 %
Cost of sales1,317.1 59.6 1,544.0 69.8 
Gross profit891.7 40.4 669.4 30.2 
Selling, general and administrative expenses581.8 26.3 884.1 39.9 
Research and development expenses205.2 9.3 290.8 13.1 
Restructuring charges, net26.9 1.2 37.5 1.7 
Non-restructuring impairment charges154.9 7.0 63.5 2.9 
Losses (gains) on divestiture0.8 — (16.6)(0.7)
Opioid-related litigation settlement loss (gain)125.0 5.7 (43.4)(2.0)
Medicaid lawsuit— — 105.1 4.7 
Operating loss(202.9)(9.2)(651.6)(29.4)
Interest expense(222.6)(10.1)(261.1)(11.8)
Interest income1.9 0.1 5.9 0.3 
Other income, net22.0 1.0 7.4 0.3 
Reorganization items, net(428.2)(19.4)(61.4)(2.8)
Loss from continuing operations before income taxes
(829.8)(37.6)(960.8)(43.4)
Income tax (benefit) expense(106.3)(4.8)8.9 0.4 
Loss from continuing operations(723.5)(32.8)(969.7)(43.8)
Income from discontinued operations, net of income taxes
6.1 0.3 25.1 1.1 
Net loss$(717.4)(32.5)%$(944.6)(42.7)%
Basic loss per share:
Loss from continuing operations$(8.54)$(11.48)
Income from discontinued operations0.07 0.30 
Net loss$(8.47)$(11.18)
Diluted loss per share:
Loss from continuing operations$(8.54)$(11.48)
Income from discontinued operations0.07 0.30 
Net loss$(8.47)$(11.18)
Weighted-average number of shares outstanding:
Basic84.784.5
Diluted84.784.5
(1)The Company reports its results based on a "52-53 week" year ending on the last Friday of December. Fiscal 2021 consisted of 53 weeks and fiscal 2020 consisted of 52 weeks.
5

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONSOLIDATED ADJUSTED EBITDA
(unaudited, in millions)
Fiscal Year
December 31, 2021December 25, 2020
Gross ProfitSG&AR&DAdjusted EBITDAGross ProfitSG&AR&DAdjusted EBITDA
Net loss$891.7 $581.8 $205.2 $(717.4)$669.4 $884.1 $290.8 $(944.6)
Adjustments:
Interest expense, net— — — 220.7 — — — 255.2 
Income taxes— — — (106.3)— — — 8.9 
Depreciation(1)
70.3 (17.6)(6.8)94.7 71.9 (35.1)(7.0)114.0 
Amortization577.7 (3.4)— 581.1 767.8 (3.4)— 771.2 
Restructuring charges, net— — — 26.9 — — — 37.5 
Non-restructuring impairment charge— — — 154.9 — — — 63.5 
Income from discontinued operations— — — (6.1)— — — (25.1)
Change in contingent consideration fair value— 7.4 — (7.4)— (9.9)— 9.9 
Significant legal and environmental charges (2)
— (34.3)— 159.3 536.0 (55.7)— 653.4 
Losses (gains) on divestiture— — — 0.8 — — — (16.6)
Separation costs— (1.2)— 1.2 — (93.4)— 93.4 
Unrealized gain on equity investment— — — (4.7)— — — (3.8)
R&D upfront payment— — — — — — (5.0)5.0 
Reorganization items, net— — — 428.2 — — — 61.4 
Share-based compensation0.5 (8.1)(1.6)10.2 1.3 (19.9)(4.1)25.3 
Japanese consumption tax credit— — — (6.8)— — — — 
As adjusted:$1,540.2 $524.6 $196.8 $829.3 $2,046.4 $666.7 $274.7 $1,108.6 
(1)Includes $2.1 million and $12.3 million of accelerated depreciation in SG&A related to restructuring charges incurred during fiscal 2021 and 2020, respectively.
(2)Fiscal 2021 includes a $125.0 million charge related to the opioid-related litigation settlement liability and a $34.3 million increase in environmental liabilities. Fiscal 2020 includes a retrospective one-time charge of $641.1 million (the "Acthar Gel Medicaid Retrospective Rebate"), of which $536.0 million and $105.1 million have been reflected as a component of net sales and operating expenses, respectively, in the condensed consolidated statement of operations. The $105.1 million reflected as a component of operating expenses represents a pre-acquisition contingency related to the portion of the Acthar Gel Medicaid Retrospective Rebate that arose from sales of Acthar Gel prior to the Company’s acquisition of Questcor Pharmaceuticals, Inc. in August 2014. Fiscal 2020 also includes $55.7 million of opioid defense costs, partially offset by a $43.4 million decrease in the fair value of the opioid settlement warrants.

6

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT OPERATING INCOME
(unaudited, in millions)
Fiscal Year
December 31,
2021		December 25,
2020
Specialty Brands$812.8 $1,015.7 
Specialty Generics107.9 206.4 
Segment operating income920.7 1,222.1 
Unallocated amounts:
Corporate and unallocated expenses (1)
(129.6)(166.1)
Depreciation and amortization(675.8)(885.2)
Share-based compensation(10.2)(25.3)
Restructuring charges, net(26.9)(37.5)
Non-restructuring impairment charges(154.9)(63.5)
Separation costs(1.2)(93.4)
R&D upfront payment— (5.0)
Opioid-related litigation settlement (loss) gain(125.0)43.4 
Medicaid lawsuit— (641.1)
Operating loss$(202.9)$(651.6)
(1)Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments.

7

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SEGMENT NET SALES AND CONSTANT-CURRENCY GROWTH
(unaudited, in millions)
Fiscal Year
December 31,
2021		December 25,
2020		Percent
change		Currency impactConstant-currency growth
Specialty Brands$1,547.0 $2,059.6 (24.9)%0.2 %(25.1)%
Specialty Generics661.8 689.8 (4.1)0.1 (4.2)
Segment net sales2,208.8 2,749.4 (19.7)0.2 (19.9)
Medicaid lawsuit— (536.0)***
Net sales$2,208.8 $2,213.4 (0.2)%0.2 %(0.4)%
*Not meaningful
MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
SELECT PRODUCT LINE NET SALES
(unaudited, in millions)
Fiscal Year
December 31,
2021		December 25,
2020		Percent
change		Currency impactConstant-currency growth
Specialty Brands
Acthar$593.6 $767.9 (22.7)%— %(22.7)%
INOmax448.5 574.1 (21.9)0.1 (22.0)
Ofirmev28.9 276.5 (89.5)— (89.5)
Therakos266.5 238.6 11.7 1.3 10.4 
Amitiza196.9 188.8 4.3 — 4.3 
Other12.6 13.7 (8.0)— (8.0)
Specialty Brands Total1,547.0 2,059.6 (24.9)0.2 (25.1)
Specialty Generics
Hydrocodone (API) and hydrocodone-containing tablets82.7 98.0 (15.6)— (15.6)
Oxycodone (API) and oxycodone-containing tablets68.5 68.4 0.1 — 0.1 
Acetaminophen (API)215.9 213.0 1.4 — 1.4 
Other controlled substances272.7 289.9 (5.9)0.3 (6.2)
Other22.0 20.5 7.3 — 7.3 
Specialty Generics Total661.8 689.8 (4.1)0.1 (4.2)
Segment net sales2,208.8 2,749.4 (19.7)0.2 (19.9)
Medicaid lawsuit— (536.0)***
Net sales$2,208.8 $2,213.4 (0.2)%0.2 %(0.4)%
*Not meaningful
8

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
December 31,
2021		December 25,
2020
Assets
Current Assets:
Cash and cash equivalents$1,345.0 $1,070.6 
Accounts receivable, net439.1 538.8 
Inventories347.2 344.9 
Prepaid expenses and other current assets178.3 350.0 
Total current assets2,309.6 2,304.3 
Property, plant and equipment, net776.0 833.1 
Intangible assets, net5,448.4 6,184.5 
Other assets382.3 393.5 
Total Assets$8,916.3 $9,715.4 
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt$1,388.9 $3,587.9 
Accounts payable123.0 93.3 
Accrued payroll and payroll-related costs84.6 79.4 
Accrued interest17.0 26.9 
Accrued and other current liabilities328.7 331.2 
Total current liabilities1,942.2 4,118.7 
Pension and postretirement benefits30.1 34.6 
Environmental liabilities43.0 59.8 
Deferred income taxes20.9 80.6 
Other income tax liabilities83.2 100.1 
Other liabilities85.8 109.8 
Liabilities subject to compromise6,397.7 4,192.6 
Total Liabilities8,602.9 8,696.2 
Shareholders' Equity:
Preferred shares— — 
Ordinary shares
18.9 18.8 
Ordinary shares held in treasury at cost(1,616.1)(1,616.1)
Additional paid-in capital5,597.8 5,587.6 
Retained deficit(3,678.9)(2,961.5)
Accumulated other comprehensive loss(8.3)(9.6)
Total Shareholders' Equity313.4 1,019.2 
Total Liabilities and Shareholders' Equity$8,916.3 $9,715.4 


9

MALLINCKRODT PLC
(DEBTOR-IN-POSSESSION)
(IN EXAMINATION UNDER PART 10 OF THE IRISH COMPANIES ACT 2014)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Fiscal Year
December 31,
2021		December 25,
2020
Cash Flows From Operating Activities:
Net loss$(717.4)$(944.6)
Adjustments to reconcile net cash from operating activities:
Depreciation and amortization675.8 885.2 
Share-based compensation10.2 25.3 
Deferred income taxes(59.9)385.3 
Non-cash impairment charges154.9 63.5 
Inventory provisions11.5 18.5 
Losses (gains) on divestiture0.8 (16.6)
Other non-cash items(13.1)(40.2)
Reorganization items, net22.5 10.2 
Changes in assets and liabilities:
Accounts receivable, net98.2 37.9 
Inventories(14.0)(51.1)
Accounts payable(1.1)15.7 
Income taxes108.5 (433.8)
Opioid-related litigation settlement liability125.0 — 
Medicaid lawsuit(4.2)638.9 
Other57.7 (95.3)
Net cash from operating activities455.4 498.9 
Cash Flows From Investing Activities:
Capital expenditures(55.3)(47.7)
Proceeds (payments) related to divestiture, net of cash15.7 (0.7)
Other1.8 37.2 
Net cash from investing activities(37.8)(11.2)
Cash Flows From Financing Activities:
Repayment of external debt(137.5)(139.5)
Debt financing costs— (9.4)
Repurchase of shares— (0.4)
Other— (36.3)
Net cash from financing activities(137.5)(185.6)
Effect of currency rate changes on cash(1.9)2.3 
Net change in cash, cash equivalents and restricted cash278.2 304.4 
Cash, cash equivalents and restricted cash at beginning of period1,127.0 822.6 
Cash, cash equivalents and restricted cash at end of period$1,405.2 $1,127.0 
Cash and cash equivalents at end of period$1,345.0 $1,070.6 
Restricted cash included in prepaid expenses and other assets at end of period24.0 20.2 
Restricted cash included in other long-term assets at end of period36.2 36.2 
Cash, cash equivalents and restricted cash at end of period$1,405.2 $1,127.0 
10