Mallinckrodt is ‘in a really good spot’ after debt, revolver paydowns

By Devika Patel

Knoxville, Tenn., Dec. 14 – Mallinckrodt plc is proud of its balance sheet, which is actually a bit better than it has reported, despite paying off some debt and completing two acquisitions in the last year.

“I think our balance sheet distinguishes itself when compared with some of our industry brethren,” executive vice president and chief financial officer Matthew Harbaugh said at the BMO Capital Markets 2016 Prescriptions for Success Healthcare Conference in New York on Wednesday.

“If you were to include the proceeds from the nuclear divestiture, which we hope to finalize in the first half of 2017, our net debt leverage would actually be around 3.3x. On our web site it’s 3.6x, because we took the operating income out but didn’t get the proceeds.

“We have a balance sheet that we can certainly exercise,” Harbaugh said.

Harbaugh also pointed out that the company has paid off a significant amount of debt recently but remains in a solid financial position despite spending some cash.

“We paid down our debt, we paid off our revolver in the last quarter and we did two acquisitions over the last year as well.

“Despite all that activity, we’re still in a really good spot,” Harbaugh said.

Nuclear divestiture

On Aug. 24, Mallinckrodt announced that it would sell its nuclear imaging division to IBA Molecular for about $690 million.

Mallinckrodt's nuclear imaging business was comprised a portfolio of diagnostic imaging products. The division is a global producer of the key medical isotope molybdenum-99, from which technetium-99m is derived; technetium-99m is used in roughly 80% of all nuclear medicine procedures worldwide.

Starting in the fourth quarter of fiscal 2016, ending Sept. 30, the company began reporting the nuclear imaging business as a discontinued operation. Closing is expected in the first half of calendar 2017.

Mallinckrodt is a Chesterfield, United Kingdom-based specialty biopharmaceutical company with U.S. headquarters in St. Louis.

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