☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
The Netherlands | 98-1153534 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Herengracht 483 1017BT, Amsterdam The Netherlands | |
(Address of Registrant’s Principal Executive Offices and Zip Code) | |
+31 (0)20 622 3243 | |
Registrant's Telephone Number, including Area Code | |
Securities registered pursuant to Section 12(b) of the Act: | |
Ordinary Shares, par value €0.01 | New York Stock Exchange |
(Title of each class) | (Name of exchange on which registered) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | (Do not check if a smaller reporting company) | Smaller reporting company | ☐ |
• | DPS: We believe we are the clear drug manufacturing partner of choice for the pharmaceutical industry. Over the last decade, we have developed and manufactured 92 newly approved drugs, including 17 in 2015, which is more than twice the number of any other contract development and manufacturing organization, or CDMO and represents more than 20% of the total outsourced NDA approvals during those periods. We produce 23 billion solid doses and 146 million sterile doses annually, many of which address central nervous system, oncological and other life-threatening conditions. We believe we are among the largest providers of aseptic “fill-finish” services for finished dose biological drug products. In addition, based on market research, we developed or manufactured 27 of the top 100 selling drugs in 2015. |
• | PDS: We are the number one global provider of formulation development services. Our capabilities span the full breadth of advanced scientific services from discovery to regulatory approval, including formulation development across approximately 40 dosage forms, as well as analytical services, and life cycle management. |
• | DSS: We are a leading provider of complex small molecule API and flexible outsourced manufacturing solutions for large molecule biological API from early development through commercial scale production. We believe we are one of the top three outsourced manufacturers of highly complex biological drug substances through our four biological API facilities. |
• | Implementing operational excellence initiatives throughout the Company. Since 2011, we have implemented a series of continuous improvement projects as part of our company-wide operational excellence program, or OE Program, to enhance our manufacturing and operational processes. The program relies on several key levers, including Lean and Six Sigma principles, visual management tools and performance boards to monitor key indicators, and employee engagement and empowerment. Examples of actions that we have taken as a part of our OE Program include enhancing our labor productivity, improving our manufacturing yield through streamlining floor operations, consolidating procurement activities, and rationalizing facilities. Our OE Program is deeply ingrained in our corporate culture and significantly reduces production costs, improves productivity of our operating assets and employees, and drives an industry-leading customer experience. We rely on our OE Program to drive key customer metrics, such as right-first-time, or RFT, and on-time-delivery, or OTD, which improve efficiency, reduce costs, enhance execution of client projects, and support growth by increasing manufacturing capacity and throughput. Our organization-wide focus on RFT and OTD, coupled with our technical capabilities and regulatory and scientific expertise, provides substantial value to our customers, allowing them to bring better products to market faster while reducing their manufacturing costs. This, in turn, drives our customer retention, new business wins and higher profitability. We apply our OE Program to our entire existing manufacturing network, as well as to businesses that we acquire. |
• | Establishing a global end-to-end integrated platform by investing $1.4 billion in five M&A transactions to expand the range of development and manufacturing services offered to our customers. Since 2012, we have acquired and integrated five companies: Banner Pharmacaps (consisting of Sobel USA Inc. and Banner Pharmacaps Europe B.V.), DSM Pharmaceutical Products Group, Gallus BioPharmaceuticals LLC, Irix Pharmaceuticals, Inc. and Agere Pharmaceuticals, Inc. Through our acquisitions, we have added attractive and differentiated capabilities and technologies for developing and manufacturing a broad array of complex small molecule and large molecule biologics, including capabilities in softgel, development and commercial scale biological and small molecule API, North American sterile capacity, and low-solubility dispersion technology. We have developed a system for integrating acquisitions based on our OE Program capabilities that facilitates the seamless transition of acquired businesses into Patheon and the rapid realization of operating efficiencies, which translate into revenue and cost synergies. We believe our expertise in integrating acquisitions positions us to lead the consolidation of the fragmented CDMO industry and add capabilities to further strengthen our value proposition to our customers. |
• | Enhancing our sales and marketing strategy and management team to facilitate strategic, solutions-based relationships with customers across multiple molecules and spanning a drug’s entire life cycle. Our global sales force is deeply embedded with our current customers and brings to bear the full resources and expertise of the Patheon organization to expand existing customer relationships and generate sales with new customers. We engage our senior management in the sales and marketing process to build strategic relationships and to enhance our customers’ experience. As a result of these efforts and our expanded capabilities, the number and value of our new business proposals have grown, our win rates from 2012 to 2016 have increased from the mid-teens to the high-twenties, and we continuously generate new business. |
• | Our customers are facing growing pricing and competitive pressures, forcing them to reduce fixed costs, reduce time to market for their new drugs, simplify historically complex supply chains and streamline vendor management, while ensuring reliability and quality. |
• | Complex formulation challenges presented by many new products require expertise that is costly or impractical for pharmaceutical and biotechnology companies to build and operate in-house. For example, more than 60% of all new compounds entering development will need specialized manufacturing and/or molecular profile modification according to industry research in the American Pharmaceutical Review. |
• | The number of drugs developed by emerging and mid-size companies is growing and currently represents an estimated 80% of the drug pipeline. In 2015, approximately $48 billion of capital was raised to fund the development of drug pipelines of emerging biotechnology companies. For many of these companies, outsourcing to CDMOs such as Patheon is a critical component of their business model because they lack in-house formulation capabilities as well as the experience and infrastructure to manufacture the products themselves. |
• | The global pharmaceutical industry faces increasing regulatory complexity and compliance requirements, including oversight by the U.S. Food and Drug Administration, or FDA, and its counterparts globally. We believe this represents an opportunity for qualified and global CDMOs to expand market share as companies are looking for a partner such as Patheon with a track record of excellent product quality and deep regulatory capabilities, in order to avoid the consequences of manufacturing and quality issues and regulator-ordered shutdowns, such as drug shortages and lost revenue and earnings. |
• | Large pharmaceutical and biotechnology companies are actively reducing their fixed asset base and focusing on their core activities of research and development, or R&D, and sales and marketing. These companies are increasingly recognizing that formulation development and manufacturing are non-core activities for their businesses. As a result, they are outsourcing instead of investing substantial capital in building specialized capabilities in-house to address their increasingly complex pipelines. |
• | Mid-size or specialty pharmaceutical and biotechnology companies are increasingly focused on sales, marketing, and late stage clinical development, as opposed to establishing internal formulation capabilities and manufacturing capacity, and as a result are outsourcing significant portions of this value chain. |
• | Emerging pharmaceutical and biotechnology companies are being driven by venture and other investors to adopt virtual business models in which the Company identifies a promising drug candidate and then relies heavily on outsourcing all activities, including formulation development and manufacturing. Many of these drug candidates are ultimately licensed or sold to larger companies for late stage clinical development and commercialization. We believe companies such as Patheon are well-positioned to retain a molecule even if it is licensed or sold, due to the significant cost and time involved in switching service providers. |
• | Generic pharmaceutical companies increasingly seek to outsource development and manufacturing of complex products they cannot produce with their existing infrastructure to third parties that have such specialized capabilities given the importance of speed-to-market for these companies (for example, the 180-day marketing exclusivity period for generic companies that are “first-to-file” under a patent challenge). |
• | Sector-leading performance driven by continuous operational excellence improvement. Over the last five years we have implemented a major initiative to drive operational efficiencies across our global network of facilities and rapidly and effectively integrate acquisitions. Our OE Program, which is deeply embedded in our operations and culture, is aimed at aligning our operations and incentives around the key customer metrics of RFT and OTD. As a result, our on-time performance for delivering customer projects increased from 86% in 2011 to 95% in 2016, to which we believe our customers ascribe significant value. In addition, through efficiency gains we have increased capacity by 21% over this period without significant capital investments and generated substantial cost savings from improvements to both existing operations and acquired businesses. We believe these continuous efforts will continue to unlock capacity, reduce costs and help drive margin improvements annually. |
• | End-to-end integrated capabilities. We provide a comprehensive, integrated and highly customizable range of API and finished drug product services to customers, from formulation development to clinical and commercial-scale manufacturing, packaging, and life cycle management. Our services address both small molecule and large molecule biological drugs. We believe we are further differentiated by the wide range of formulation and manufacturing services we provide to our customers, which encompass 75% of all pharmaceutical dosage forms, and by providing specialized capabilities that our customers are increasingly seeking such as high potency, controlled substance, low-solubility, aseptic manufacturing, modified release and softgel formulations. Our breadth of technologies spanning development and manufacturing further support our end-to-end integrated platform, increasing product development speed and reducing costs for our customers by avoiding the time, regulatory burden and cost required to transfer a molecule to other service providers. |
• | Extensive and long-term relationships with our customers from development through commercial manufacturing driving a recurring, highly-visible revenue stream. Our end-to-end integrated platform allows us to capture customer molecules early in the development process and retain them through full-scale commercial manufacturing, while efficiently and reliably maintaining quality in a complex supply chain. Once won, this business is highly stable due to regulatory requirements, lengthy and costly product transfer processes, and customers’ need to ensure uninterrupted supply. For example, in 2015, a third of our commercial manufacturing new product launches originated from our formulation and development projects. Our drug product commercial manufacturing contracts generally extend five or more years and approximately 95% of the products we currently manufacture are under contract through 2017. Based on current signed contracts across all segments, approximately 85% of forecast revenue for 2017 will be associated with ongoing programs which have already been initiated. |
• | Industry-leading reputation for quality and reliability across our global network. We are an industry leader in product quality and regulatory compliance. We have a culture of continuous improvement in quality, with internal standards and targets that exceed regulatory rules and customers’ internal standards. As a result, we believe we have one of the best track records in the industry for both pharmaceutical companies and outsourced service providers. Increased regulatory scrutiny has resulted in industry supply disruptions or facility shutdowns, contributing to the recent record levels of drug shortages, including for numerous life-saving drugs. As regulatory requirements have increased, many pharmaceutical companies have migrated to CDMO providers with a demonstrated ability to consistently meet quality and compliance standards. We complement our industry-leading quality systems with a global network, which allows us to validate our customers’ products across multiple manufacturing lines within a facility and across multiple facilities within our network to ensure supply security. In addition, our focus on RFT and OTD metrics underpins our position as an industry leader for customer service. |
• | Proven management team. Our management team is highly experienced, possesses deep industry knowledge and is operationally focused. The senior team, including our Chief Executive Officer, Mr. Mullen, has incorporated the customer perspective from extensive careers in the pharmaceutical industry. Under Mr. Mullen’s leadership, we |
• | Leverage our end-to-end platform and global scale to extend our position as the leading integrated CDMO. The highly customizable services we provide throughout the product life cycle afford us significant opportunities to respond to growing customer demand for supply chain simplicity, development and manufacturing speed, and quality. Our PDS capabilities allow us to partner with our customers early in the development process of their molecules, providing a pipeline of molecules for our commercial manufacturing services as the molecules progress through the clinical phase and into commercial manufacturing. In fiscal 2016, we had PDS projects for 564 drugs in clinical development, including 221 Phase 1 projects, 109 Phase 2 projects and 234 Phase 3 projects. During our evolution over the past five years, we have aligned our sales, marketing and management functions, on all organizational levels, to cross-sell the breadth of our capabilities and market the “Patheon OneSource” service offering. We believe this strategy will continue to drive business across all customer segments, and represents a high-dollar value, high-margin growth opportunity. |
• | Continue our operational excellence initiatives to optimize capacity and efficiency, reduce costs and drive outstanding financial performance. Our organization-wide OE Program efforts focus on improving manufacturing efficiency and quality, driving cost savings, increasing capacity and creating value throughout the manufacturing chain. We intend to continue maximizing revenue growth and margin expansion through our resulting expanded capacity and facility utilization. For example, we have increased capacity by 21% since 2011, and our current utilization of 49% allows us to continue to launch new projects without significant investment in new facilities. We believe that this continuous focus on operational excellence will drive margin improvements and support robust revenue growth on an annual basis, which should result in significant operating leverage. |
• | Target high-growth, high-value areas of the pharmaceutical and biotechnology industries. Our customers increasingly seek complex drug formulations and delivery technologies that exceed their own in-house capabilities. We intend to use our broad range of specialized dosage and formulation solutions, which include high potency, softgel, controlled substance, modified release and sterile dosage forms, to serve this market segment. For example, our acquisition of Gallus BioPharmaceuticals provided us with capabilities for complex clinical and commercial scale biologics manufacturing in the key U.S. market. We believe our expertise in these areas and the breadth of services we provide are differentiators for Patheon. |
• | Selectively pursue strategic investments and acquisitions to support expanding customer needs and complement our existing platform. As a customer-driven company, we have invested in new specialized technologies, expanded capacity in high-demand capabilities, and broadened our capabilities in high value-added product and service offerings in response to market demand. For example, in response to growing demand for pre-filled syringes to deliver biological molecules, we completed construction of a new production line in a European sterile facility in late 2013. In addition, we have acquired five companies since 2012, including three acquisitions between September 2014 and March 2015, each of which provided new or expanded capabilities and scale for our end-to-end integrated offering. We plan to continue adding complementary, high-value technological and operational capabilities and service offerings to meet customer needs through investment, acquisitions and collaborations. We expect Patheon will continue to be an active, disciplined consolidator of the fragmented CDMO industry to complement our organic growth strategy. |
• | Labor savings driven by streamlining floor operations, optimizing shift structures and improving organizational design and improving site systems and processes; |
• | Yield improvement as a result of reduction in manufacturing losses related to quality, equipment readiness and continuously enhancing staff training; |
• | Energy savings driven by enhanced performance management (tracking, target setting and root-cause problem solving); and |
• | Improvements driven by reduction in direct labor, factory overhead and SG&A staff. |
• | Development of a manufacturing process for and production of the active pharmaceutical ingredient or biologic substance; |
• | Development of a suitable formulation; production at pilot scale; |
• | Technology transfer to scale up the manufacturing; and |
• | Commercial scale manufacturing and packaging. |
Solid Oral | Softgels |
Conventional | Liquid-filled capsules |
Immediate release tablets | Softgel capsules |
Powders/granules/coated beads | Twist off softgels |
Powder filled capsules | EnterCare Enteric softgels |
LiquiSoft Chewable Liquid Filled Softgels | |
Specialized | Versatrol Controlled Release Softgels |
Multi-layered tablets | Solvatrol Enhanced Solubility Softgels |
Fast dispersible tablets | Soflet Gelcaps |
Controlled release tablets | Chewels Chewable Gels |
Sterile | Highly Regulated Products |
Liquid Small Volume Parenteral (SVP) | Controlled Substances |
Liquid Large Volume Parenteral (LVP) | High Potency |
Lyophilized Vial | Unique Solutions |
Prefilled Syringes | |
Cartridges |
• | XD technology, a broad-based proprietary platform technology to significantly boost the upstream output of mammalian cell culture processes; |
• | Rhobust, a unique, proprietary capture/clarification technology, acquired to complement the value created by XD technology; and |
• | Kremer Method for purification in downstream processing and for supporting continuous manufacturing improvements |
• | Micro reactor - technology for integrating process development, production and downstream processing from laboratory to plant scale in multiproduct production environments under cGMP conditions; |
• | Ozonolysis - process for using ozone to create organic compounds such as alcohols, aldehydes or acids. Our capabilities extend from process development at laboratory scale to large-scale production |
• | Polymers - production, purification and finalization of polymers (hydrogels) for pharmaceutical application, including specialized equipment for cutting and drying; and |
• | Hazardous materials handling - experience in on-site-on-demand production and use of hazardous reagents for productions under cGMP conditions. |
• | Dedicated Capacity: For customers with multiple products in a similar dosage form launching within 18 months that need a dedicated facility or line to allow for a flexible schedule to match market demand. |
• | Fractional Capacity: For customers that do not have the budget or volume for a dedicated facility or line, we can provide a facility or line for two or three clients allowing for flexibility and a smaller expense. |
• | Flexible Network Access: For customers who would like to manufacture in multiple geographies or would like on-demand access to capacity without a preference for location. This model assures access to specific capacity within Patheon’s global network within a specific time period. |
• | Condominium/Customized Capacity: For customers with a unique product or delivery system that cannot be manufactured on a conventional line. Patheon provides the design services, procurement of equipment, validation and engineering expertise to build the line then provides manufacturing operations on behalf of the customer. |
• | Enterprise: For Customers who own facilities in need of operational improvements or repurposing of existing equipment, Patheon can manage these facilities to accomplish the goals of the customer. |
• | Changes to the regulatory approval process, including new data requirements, for product candidates in those jurisdictions, including the United States, in which we or our customers may be seeking approval; |
• | A product candidate may not be deemed to be safe or effective; |
• | The ability of the regulatory agency to provide timely responses as a result of its resource constraints; and |
• | The manufacturing processes or facilities may not meet the applicable requirements. |
• | the ability of our customers to publicly establish and demonstrate the efficacy and safety of such products, including favorably comparing such products to competing products; |
• | regulatory approval of, or regulatory actions taken with respect to, such products; |
• | the costs to potential consumers of using such products and the cost of competing products; |
• | marketing and distribution support for such products; and |
• | public perception of our customers and our customers’ industry. |
• | fluctuations in currency exchange rates; |
• | the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems; |
• | customers in certain foreign countries potentially having longer payment cycles; |
• | changes in local tax laws, tax rates in certain countries that may exceed those of the United States and lower earnings due to withholding requirements or the imposition of tariffs, exchange controls or other restrictions; |
• | seasonal reductions in business activity; |
• | the credit risk of local customers and distributors; |
• | unexpected changes in legal, regulatory or tax requirements; |
• | local laws related to, and relationships with, local labor unions and works councils; |
• | the risk that certain governments may adopt regulations or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including nationalization of private enterprise; |
• | a decline in world trade or a downturn in the economy of the United States or the European Union (including the impact of the proposed exit of the United Kingdom from the European Union); |
• | non-compliance with applicable currency exchange control regulations, transfer pricing regulations or other similar regulations; |
• | violations of the Foreign Corrupt Practices Act by acts of agents and other intermediaries over whom we have limited or no control; |
• | violations of regulations enforced by the U.S. Department of The Treasury’s Office of Foreign Asset Control, or OFAC; and |
• | general economic and political conditions. |
• | properly anticipate and satisfy customer needs, including increasing demand for lower cost services; |
• | enhance, innovate, develop and manufacture new offerings in an economical and timely manner; |
• | differentiate our offerings from competitors’ offerings; |
• | achieve positive clinical outcomes for our customers’ new products; |
• | meet quality requirements and other regulatory requirements of government agencies; |
• | obtain valid and enforceable intellectual property rights; and |
• | avoid infringing the proprietary rights of third parties. |
• | facilitate the manufacture and distribution of thousands of inventory items to and from our facilities; |
• | receive, process and ship orders on a timely basis; |
• | manage the accurate billing of, and collections from, our customers; |
• | manage the accurate accounting for, and payment to, our vendors; and |
• | schedule and operate our global network of manufacturing and development facilities. |
• | the diversion of management’s attention to negotiate the transaction and then integrate the acquired businesses or joint ventures; |
• | the possible adverse effects on our operating results during the negotiation and integration process; |
• | significant costs, charges or write-downs; |
• | the potential loss of customers or employees of the acquired business; |
• | delays or reduction in realizing expected synergies; |
• | unexpected liabilities relating to a joint venture or acquired business; and |
• | our potential inability to achieve our intended objectives for the transaction |
• | increasing our vulnerability to adverse economic, industry or competitive developments; |
• | exposing us to the risk of increased interest rates because certain of our borrowings are at variable rates of interest; |
• | exposing us to the risk of fluctuations in exchange rates because certain of our borrowings are denominated in Euros; |
• | making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the instruments governing our indebtedness; |
• | restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; |
• | limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and |
• | limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a disadvantage relative to our competitors with less debt and who, therefore, may be able to take advantage of opportunities that our indebtedness prevents us from exploiting. |
• | incur additional indebtedness; |
• | pay certain dividends on, repurchase or make distributions in respect of shares or make other restricted payments; |
• | issue or sell shares of restricted subsidiaries; |
• | guarantee certain indebtedness; |
• | make certain investments; |
• | sell or exchange assets; |
• | enter into certain transactions with affiliates; |
• | create certain liens; and |
• | consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis. |
• | the judgment was rendered by the foreign court that was (based on internationally accepted grounds) competent to take cognizance of the matter; |
• | the judgment is the outcome of a proper judicial procedure (behoorlijke rechtspleging); |
• | the judgment is not manifestly incompatible with the public policy (openbare orde) of The Netherlands; and |
• | the judgment is not irreconcilable with a judgment of a Dutch court or an earlier judgment of a foreign court that is capable of being recognized in The Netherlands. |
Location | Country | Segment | Square Footage per Property | Owned/Leased | |
Linz | Austria | DSS | 1,004,144 | Owned | |
Greenville, NC | United States | DPS / PDS | 1,451,527 | Owned | |
Manati | Puerto Rico | DPS | 546,872 | Owned | |
Cincinnati, OH | United States | DPS / PDS | 495,700 | Owned | |
Monza | Italy | DPS | 463,229 | Owned | |
Swindon | United Kingdom | DPS | 355,511 | Owned | |
Bourgoin - Jallieu | France | DPS / PDS | 355,228 | Owned | |
Ferentino | Italy | DPS / PDS | 290,473 | Owned | |
Mississauga | Canada | DPS / PDS | 285,570 | Owned | |
High Point, NC | United States | DPS / PDS | 243,000 | Owned | |
Whitby | Canada | DPS / PDS | 233,664 | Owned | |
St. Louis, MO | United States | DSS | 200,000 | Owned | |
Tilburg | The Netherlands | DPS / PDS | 97,000 | Owned | |
Brisbane | Australia | DSS | 86,400 | Leased | |
Regensburg | Germany | DSS | 72,000 | Leased | |
Greenville, SC | United States | DSS | 64,970 | Owned | |
Princeton, NJ | United States | DSS | 57,000 | Leased | |
Groningen, Zuiderweg | The Netherlands | DSS | 51,000 | Owned | |
Florence, SC | United States | DSS | 43,704 | Owned | |
Bend, OR | United States | PDS | 22,939 | Leased | |
Groningen, Rozenburglaan | The Netherlands | DSS | 19,500 | Leased | |
Milton Park | United Kingdom | PDS | 13,500 | Leased |
2016 | ||||||
High | Low | |||||
Third Quarter (July 21, 2016 - July 31, 2016) | $ | 26.58 | $ | 24.11 | ||
Fourth Quarter | $ | 31.02 | $ | 24.45 |
Year Ended October 31, | ||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | $ | $ | |||||
Statement of operations data: | ||||||||||
Revenues | 1,866.7 | 1,774.2 | 1,483.5 | 990.6 | 748.0 | |||||
Cost of goods sold (1) | 1,321.1 | 1,215.7 | 1,096.1 | 749.5 | 589.1 | |||||
Gross profit | 545.6 | 558.5 | 387.4 | 241.1 | 158.9 | |||||
Selling, general and administrative expenses | 322.6 | 309.0 | 238.7 | 156.6 | 128.6 | |||||
Research and development (2) | 2.1 | 14.8 | 13.7 | 9.7 | — | |||||
Repositioning expenses (3) | 7.3 | 25.1 | 51.7 | 15.8 | 6.1 | |||||
Acquisition and integration costs (4) | 16.6 | 19.3 | 60.3 | 9.9 | 3.2 | |||||
Impairment charges (5) | — | 4.1 | 9.7 | 13.1 | 57.9 | |||||
Other operating (income) loss (6) | (0.7 | ) | 4.6 | (0.1 | ) | (1.5 | ) | 0.4 | ||
Operating income (loss) | 197.7 | 181.6 | 13.4 | 37.5 | (37.3 | ) | ||||
Interest expense, net (7) | 160.4 | 141.8 | 90.5 | 47.9 | 26.5 | |||||
Foreign exchange loss, net | 5.7 | 17.8 | 8.6 | 0.6 | 0.5 | |||||
Refinancing expenses (8) | 21.6 | 3.7 | 28.2 | 27.3 | — | |||||
Gain on sale of third party investment (9) | — | (16.2 | ) | — | — | — | ||||
Other income, net | (0.8 | ) | (0.7 | ) | (1.1 | ) | (2.0 | ) | (1.3 | ) |
Income (loss) from continuing operations before income taxes | 10.8 | 35.2 | (112.8 | ) | (36.3 | ) | (63.0 | ) | ||
(Benefit from) provision for income taxes | (24.0 | ) | 0.3 | 4.3 | (3.7 | ) | 43.7 | |||
Net income (loss) from continuing operations | 34.8 | 34.9 | (117.1 | ) | (32.6 | ) | (106.7 | ) | ||
Net (loss) income from discontinued operations | (3.1 | ) | 103.5 | (2.1 | ) | (3.5 | ) | (0.3 | ) | |
Net income (loss) | 31.7 | 138.4 | (119.2 | ) | (36.1 | ) | (107.0 | ) | ||
Balance sheet data: | ||||||||||
Cash and cash equivalents | 165.0 | 328.7 | 73.4 | 56.8 | 39.4 | |||||
Total assets | 2,639.9 | 2,615.0 | 2,393.4 | 1,077.1 | 741.0 | |||||
Total liabilities | 2,988.3 | 3,479.2 | 2,785.8 | 952.5 | 618.3 | |||||
Total shareholders' / members’ (deficit) / equity | (348.4 | ) | (864.2 | ) | (392.4 | ) | 124.6 | 122.7 |
• | Drug Product Services, or DPS, which provides manufacturing and packaging for approved prescription, OTC, and nutritional products. |
• | Pharmaceutical Development Services, or PDS, which provides a wide spectrum of advanced formulation, production and technical services from the early stages of a product’s development to regulatory approval and beyond, as well as for new formulations of approved products for lifecycle extension. |
• | Drug Substance Services, or DSS, which provides complex small molecule API and flexible outsourced manufacturing solutions for large molecule biological API from early development through commercial scale production. |
• | On March 31, 2015, we acquired Irix Pharmaceuticals, Inc., or Irix, a company that specializes in difficult-to-manufacture active pharmaceutical ingredient needs for drugs from early and late development stages through |
• | On March 20, 2015, we acquired Agere Pharmaceuticals, Inc., or Agere, a recognized leader in complex solubility technology, to expand our early stage pharmaceutical development capabilities, which enhances our service offerings in the PDS segment, for an aggregate purchase price of approximately $27.1 million, which we refer to as the Agere Acquisition. We funded the purchase price through the use of available cash and equity. |
• | On September 29, 2014, we acquired Gallus BioPharmaceuticals, LLC, or Gallus, a leading contract manufacturing company specializing in biologics, which enhances our service offerings in the DSS segment, for a cash purchase price of $257.2 million, which we refer to as the Gallus Acquisition. The Gallus Acquisition is a strategic acquisition that will further support the needs of our customers by providing flexibility, leading technology solutions, commercial operations and an expanded footprint with two U.S. sites. We funded the purchase price through the raising of additional debt. |
• | On August 31, 2015, we sold our DPx Fine Chemicals business, or DFC, which provides synthesis services to customers in the agricultural chemical industry, maleic anhydride and many specialty esters used in a broad range of industries and specialty products. The DFC business is located in our Linz, Austria site and constituted our DFC reportable segment which is now a component of our discontinued operations. DFC was sold for a cash purchase price of €179.0 million, which includes an adjustment for working capital. |
• | On July 31, 2015, we sold our Biosolutions business, which produces a variety of microorganisms and anti-effective, enzyme, and pharmaceutical protein products, for approximately €0.3 million. |
• | On July 31, 2015, we spun-off BLS, our proprietary products business, into a separate legal entity. |
• | On May 12, 2015, we sold our Banner Pharmacaps entity in Mexico, which manufactures softgel OTC products, for approximately $36.4 million. |
• | In the first quarter of 2015, we began to outsource certain back-office support functions to an outsourced vendor and the project was completed by the end of fiscal 2016. |
• | On July 2, 2014, we closed our facility in Venlo, The Netherlands and transferred any remaining business to other DFC facilities. Because the business in the Venlo facility is being transferred within the existing site network, its results of operations will be included in continuing operations in the consolidated financial statements. |
• | We completed the consolidation of our Caguas operations into Manati during the first quarter of fiscal 2014 and vacated the Caguas facility as of January 31, 2014. Because the business in the Caguas facility transferred within the existing site network, its results of operations are included in continuing operations in the consolidated financial statements. |
• | Revenues for fiscal 2016 increased $92.5 million, or 5.2%, to $1,866.7 million from $1,774.2 million for fiscal 2015. On a constant currency basis, revenue would have increased $110.3 million, or 6.2%. |
• | Gross profit for fiscal 2016 decreased $12.9 million, or 2.3%, to $545.6 million from $558.5 million for fiscal 2015. |
• | Net income from continuing operations for fiscal 2016 was $34.8 million, compared to net income of $34.9 million for fiscal 2015. |
• | Adjusted EBITDA for fiscal 2016 increased $20.0 million to $394.6 million, from $374.6 million for fiscal 2015. |
Fiscal years ended October 31, | |||||||||||
2016 | 2015 | $ | % | ||||||||
(in millions of U.S. dollars) | $ | $ | Change | Change | |||||||
Revenues | 1,866.7 | 1,774.2 | 92.5 | 5.2 | |||||||
Cost of goods sold | 1,321.1 | 1,215.7 | 105.4 | 8.7 | |||||||
Gross profit | 545.6 | 558.5 | (12.9 | ) | (2.3 | ) | |||||
Selling, general and administrative expenses | 322.6 | 309.0 | 13.6 | 4.4 | |||||||
Research and development | 2.1 | 14.8 | (12.7 | ) | (85.8 | ) | |||||
Repositioning expenses | 7.3 | 25.1 | (17.8 | ) | (70.9 | ) | |||||
Acquisition and integration costs | 16.6 | 19.3 | (2.7 | ) | (14.0 | ) | |||||
Impairment charge | — | 4.1 | (4.1 | ) | — | ||||||
Other operating (income) loss | (0.7 | ) | 4.6 | (5.3 | ) | * | |||||
Operating income | 197.7 | 181.6 | 16.1 | 8.9 | |||||||
Interest expense, net | 160.4 | 141.8 | 18.6 | 13.1 | |||||||
Foreign exchange loss, net | 5.7 | 17.8 | (12.1 | ) | * | ||||||
Refinancing expenses | 21.6 | 3.7 | 17.9 | 483.8 | |||||||
Gain on sale of third party investment | — | (16.2 | ) | 16.2 | — | ||||||
Other income, net | (0.8 | ) | (0.7 | ) | (0.1 | ) | * | ||||
Income before income taxes | 10.8 | 35.2 | (24.4 | ) | (69.3 | ) | |||||
(Benefit from) provision for income taxes | (24.0 | ) | 0.3 | (24.3 | ) | * | |||||
Net income from continuing operations | 34.8 | 34.9 | (0.1 | ) | (0.3 | ) | |||||
Net (loss) income from discontinued operations | (3.1 | ) | 103.5 | (106.6 | ) | * | |||||
Net income | 31.7 | 138.4 | (106.7 | ) | (77.1 | ) |
• | DPS revenues for fiscal 2016 increased $8.7 million, or 0.8%, to $1,152.9 million, from $1,144.2 million for fiscal 2015 driven by strong volume activity, particularly in North America, offset by a negative impact on Italian revenues of $25.8 million due to remediation activities in our Ferentino, Italy plant as a result of a May 2015 FDA inspection, product portfolio rationalization of our fish oil business in fiscal 2015 and isolated weather and power related events in the fourth quarter of fiscal 2016 that impacted two sites. |
▪ | DPS revenues included approximately $64.3 million of inter-company revenue primarily with BLS for fiscal 2015. The Company did not have any significant inter-company activity for fiscal 2016 due to the spinoff of the BLS business on July 31, 2015. Any BLS revenue after the spinoff date is considered third party revenue. |
• | PDS revenues for fiscal 2016 increased $20.6 million, or 10.4%, to $219.3 million, from $198.7 million for fiscal 2015 primarily as a result of $6.3 million in growth from the Agere Acquisition, $6.3 million in growth in our DPS business at our Cincinnati site due to new projects and revenue growth across most other sites in our network. |
• | DSS revenues for fiscal 2016 increased $99.6 million, or 25.2%, to $494.9 million from $395.3 million for fiscal 2015 primarily as a result of $38.9 million in growth from the Irix acquisition, significant growth at our Biologics sites and the timing of API shipments. |
• | Other revenues for fiscal 2015 were $100.3 million and are attributable to revenue generated by the BLS business through the spinoff date of July 31, 2015. No revenue was recorded for fiscal 2016 due to the spinoff. After the spinoff date, the Other segment represents Corporate activity only. |
Fiscal years ended October 31, | |||||
2016 | 2015 | ||||
(in millions of U.S. dollars) | $ | $ | |||
Total Adjusted EBITDA | 394.6 | 374.6 | |||
Depreciation and amortization | (113.0 | ) | (107.8 | ) | |
Repositioning expenses (1) | (9.2 | ) | (25.1 | ) | |
Acquisition and integration costs (2) | (16.6 | ) | (22.3 | ) | |
Interest expense, net | (160.4 | ) | (141.8 | ) | |
Impairment charge | — | (4.1 | ) | ||
Benefit from (provision for) income taxes | 24.0 | (0.3 | ) | ||
Refinancing expenses | (21.6 | ) | (3.7 | ) | |
Operational initiatives related consulting costs | (4.2 | ) | (13.0 | ) | |
IPO costs | (2.0 | ) | (4.5 | ) | |
Acquisition-related litigation expenses | (4.0 | ) | (12.7 | ) | |
Stock-based compensation expense | (21.6 | ) | (13.9 | ) | |
Remediation costs | (32.8 | ) | (2.6 | ) | |
Gain on sale of investment | — | 16.2 | |||
Other | 1.6 | (4.1 | ) | ||
Net income from continuing operations | 34.8 | 34.9 |
Fiscal years ended October 31, | |||||||||||
2016 | 2015 | $ | % | ||||||||
(in millions of U.S. dollars) | $ | $ | Change | Change | |||||||
Revenues | |||||||||||
Drug Product Services | 1,152.9 | 1,144.2 | 8.7 | 0.8 | |||||||
Pharmaceutical Development Services | 219.3 | 198.7 | 20.6 | 10.4 | |||||||
Drug Substance Services | 494.9 | 395.3 | 99.6 | 25.2 | |||||||
Other | — | 100.3 | (100.3 | ) | — | ||||||
Inter-segment Revenue Eliminations | (0.4 | ) | (64.3 | ) | 63.9 | 99.4 | |||||
Total Revenues | 1,866.7 | 1,774.2 | 92.5 | 5.2 | |||||||
Adjusted EBITDA | |||||||||||
Drug Product Services | 295.9 | 295.1 | 0.8 | 0.3 | |||||||
Pharmaceutical Development Services | 73.2 | 68.5 | 4.7 | 6.9 | |||||||
Drug Substance Services | 125.8 | 83.0 | 42.8 | 51.6 | |||||||
Other | (100.3 | ) | (72.0 | ) | (28.3 | ) | (39.3 | ) | |||
Total Adjusted EBITDA | 394.6 | 374.6 | 20.0 | 5.3 |
Fiscal years ended October 31, | |||||||||||
2015 | 2014 | $ | % | ||||||||
(in millions of U.S. dollars) | $ | $ | Change | Change | |||||||
Revenues | 1,774.2 | 1,483.5 | 290.7 | 19.6 | |||||||
Cost of goods sold | 1,215.7 | 1,096.1 | 119.6 | 10.9 | |||||||
Gross profit | 558.5 | 387.4 | 171.1 | 44.2 | |||||||
Selling, general and administrative expenses | 309.0 | 238.7 | 70.3 | 29.5 | |||||||
Research and development | 14.8 | 13.7 | 1.1 | 8.0 | |||||||
Repositioning expenses | 25.1 | 51.7 | (26.6 | ) | (51.5 | ) | |||||
Acquisition and integration costs | 19.3 | 60.3 | (41.0 | ) | (68.0 | ) | |||||
Impairment charge | 4.1 | 9.7 | (5.6 | ) | (57.7 | ) | |||||
Other operating loss (income) | 4.6 | (0.1 | ) | 4.7 | * | ||||||
Operating income | 181.6 | 13.4 | 168.2 | 1,255.2 | |||||||
Interest expense, net | 141.8 | 90.5 | 51.3 | 56.7 | |||||||
Foreign exchange loss, net | 17.8 | 8.6 | 9.2 | * | |||||||
Refinancing expenses | 3.7 | 28.2 | (24.5 | ) | (86.9 | ) | |||||
Gain on sale of third party investment | (16.2 | ) | — | (16.2 | ) | — | |||||
Other income, net | (0.7 | ) | (1.1 | ) | 0.4 | * | |||||
Income (loss) before income taxes | 35.2 | (112.8 | ) | 148.0 | 131.2 | ||||||
Provision for income taxes | 0.3 | 4.3 | (4.0 | ) | * | ||||||
Net income (loss) from continuing operations | 34.9 | (117.1 | ) | 152.0 | 129.8 | ||||||
Net income (loss) from discontinued operations | 103.5 | (2.1 | ) | 105.6 | * | ||||||
Net income (loss) | 138.4 | (119.2 | ) | 257.6 | 216.1 |
• | DPS revenues for fiscal 2015 increased $55.6 million, or 5.1%, to $1,144.2 million, from $1,088.6 million for fiscal 2014 as a result of $84.1 million in growth from the DPP Acquisition, partially offset by weakness in our Puerto Rico and High Point, N.C. sites, and negative foreign exchange impacts across our European sites. Product portfolio rationalization of our fish oil business contributed to the weakness at our High Point, N.C. site. Additionally, remediation activities in our Ferentino, Italy plant as a result of the FDA inspection had a negative impact on revenues of $11.6 million. |
◦ | DPS revenues include approximately $64.3 million of inter-company revenue primarily between DPS and BLS in fiscal 2015, compared to $76.3 million in fiscal 2014. The decrease in inter-company revenue is primarily due to the spinoff of the BLS business on July 31, 2015, which resulted in nine months of activity for fiscal 2015 compared to twelve months of activity for fiscal 2014. |
• | PDS revenues for fiscal 2015 increased $33.5 million, or 20.3%, to $198.7 million, from $165.2 million for fiscal 2014 primarily as a result of $4.2 million in growth from the Agere Acquisition and the introduction of PDS services at our Greenville, North Carolina site that contributed an additional $19.7 million. |
• | DSS revenues for fiscal 2015 increased $206.4 million, or 109.3%, to $395.3 million, from $188.9 million for fiscal 2014 primarily as a result of the DPP, Gallus and Irix acquisitions, which added $71.1 million, $89.8 million and $45.5 million in growth, respectively. The acquisition impacts include $48.7 million in decreased revenues due to product portfolio rationalization. |
• | Other revenue for fiscal 2015, which includes our BLS business, decreased $16.8 million or 14.3% to $100.3 million from $117.1 million for fiscal 2014 as a result of the July 31, 2015 spinoff of our BLS business, which reflects nine months of activity in fiscal 2015 compared to twelve months of activity in fiscal 2014. |
Fiscal years ended October 31, | |||||
2015 | 2014 | ||||
(in millions of U.S. dollars) | $ | $ | |||
Total Adjusted EBITDA | 374.6 | 248.3 | |||
Depreciation and amortization | (107.8 | ) | (79.5 | ) | |
Repositioning expenses | (25.1 | ) | (51.7 | ) | |
Acquisition and integration costs (1) | (22.3 | ) | (60.3 | ) | |
Interest expense, net | (141.8 | ) | (90.5 | ) | |
Impairment charge | (4.1 | ) | (9.7 | ) | |
Provision for income taxes | (0.3 | ) | (4.3 | ) | |
Refinancing expenses | (3.7 | ) | (28.2 | ) | |
Operational initiatives related consulting costs | (13.0 | ) | (10.1 | ) | |
IPO costs | (4.5 | ) | — | ||
Acquisition-related litigation expenses | (12.7 | ) | (10.2 | ) | |
Stock-based compensation expense | (13.9 | ) | (10.0 | ) | |
Remediation costs | (2.6 | ) | — | ||
Purchase accounting adjustments | — | (11.4 | ) | ||
Gain on sale of investment | 16.2 | — | |||
Other | (4.1 | ) | 0.5 | ||
Net income (loss) from continuing operations | 34.9 | (117.1 | ) |
Fiscal years ended October 31, | |||||||||||
2015 | 2014 | $ | % | ||||||||
(in millions of U.S. dollars) | $ | $ | Change | Change | |||||||
Revenues | |||||||||||
Drug Product Services | 1,144.2 | 1,088.6 | 55.6 | 5.1 | |||||||
Pharmaceutical Development Services | 198.7 | 165.2 | 33.5 | 20.3 | |||||||
Drug Substance Services | 395.3 | 188.9 | 206.4 | 109.3 | |||||||
Other | 100.3 | 117.1 | (16.8 | ) | (14.3 | ) | |||||
Inter-segment Revenue Eliminations | (64.3 | ) | (76.3 | ) | 12.0 | 15.7 | |||||
Total Revenues | 1,774.2 | 1,483.5 | 290.7 | 19.6 | |||||||
Adjusted EBITDA | |||||||||||
Drug Product Services | 295.1 | 230.5 | 64.6 | 28.0 | |||||||
Pharmaceutical Development Services | 68.5 | 51.2 | 17.3 | 33.8 | |||||||
Drug Substance Services | 83.0 | 4.9 | 78.1 | 1,593.9 | |||||||
Other | (72.0 | ) | (38.3 | ) | (33.7 | ) | (88.0 | ) | |||
Total Adjusted EBITDA | 374.6 | 248.3 | 126.3 | 50.9 |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | |||||
Cash provided by (used in) operating activities of continuing operations | 60.8 | 141.8 | (24.9 | ) | ||||
Cash (used in) provided by operating activities of discontinued operations | (2.9 | ) | 43.2 | 49.9 | ||||
Cash provided by operating activities | 57.9 | 185.0 | 25.0 |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | |||||
Additions to capital assets | (205.8 | ) | (146.9 | ) | (81.5 | ) | ||
Proceeds from sale of capital assets | 0.1 | 6.5 | 4.6 | |||||
Equity investment in related party | — | (5.0 | ) | — | ||||
Proceeds on sale of third party investment | — | 21.4 | — | |||||
Return of capital from equity investment | 2.3 | — | 1.3 | |||||
Acquisitions, net of cash acquired | — | (170.2 | ) | (379.8 | ) | |||
Cash used in investing activities of continuing operations | (203.4 | ) | (294.2 | ) | (455.4 | ) | ||
Cash (used in) provided by investing activities of discontinued operations | (3.3 | ) | 205.9 | (11.1 | ) | |||
Cash used in investing activities | (206.7 | ) | (88.3 | ) | (466.5 | ) |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | |||||
Proceeds from long-term borrowings | 40.8 | 804.2 | 2,092.0 | |||||
Repayment of debt | (591.8 | ) | (92.9 | ) | (673.9 | ) | ||
Redemption of note payable issued as a distribution to member | (51.0 | ) | — | — | ||||
Increase in deferred financing costs | — | (19.5 | ) | (60.9 | ) | |||
Cash paid to acquire Patheon shares, net of amounts reinvested in Patheon Holdings | — | — | (889.2 | ) | ||||
Capital contribution | 1.2 | — | — | |||||
Proceeds on issuance of ordinary shares, net | 584.8 | — | — | |||||
Excess tax benefit from share-based payment arrangements | — | 7.8 | — | |||||
Cash distribution to members from proceeds obtained from the issuance of the Senior PIK Toggle Notes | — | (538.0 | ) | — | ||||
Cash distribution to members for spinoff of subsidiary | — | (12.4 | ) | — | ||||
Cash (used in) provided by financing activities of continuing operations | (16.0 | ) | 149.2 | 468.0 | ||||
Cash used in financing activities of discontinued operations | — | (1.0 | ) | (0.1 | ) | |||
Cash (used in) provided by financing activities | (16.0 | ) | 148.2 | 467.9 |
Testing Period Ending | Maximum Ratio |
April 30, 2014 through October 31, 2014 | 6.75 to 1.00 |
November 1, 2014 through October 31, 2015 | 6.50 to 1.00 |
November 1, 2015 through October 31, 2016 | 6.25 to 1.00 |
November 1, 2016 through October 31, 2017 | 6.00 to 1.00 |
November 1, 2017 and thereafter | 5.75 to 1.00 |
Twelve months ended | ||
October 31, 2016 | ||
(in millions of U.S. dollars) | $ | |
Consolidated EBITDA per Credit Agreement | 420.2 | |
Less: | ||
Pro forma cost savings | (24.8 | ) |
Other | (0.8 | ) |
Adjusted EBITDA | 394.6 | |
(Deduct) add: | ||
Depreciation and amortization | (113.0 | ) |
Repositioning expenses | (9.2 | ) |
Acquisition and integration costs | (16.6 | ) |
Interest expense, net | (160.4 | ) |
Benefit from income taxes | 24.0 | |
Refinancing expenses | (21.6 | ) |
Operational initiatives related consulting costs | (4.2 | ) |
IPO costs | (2.0 | ) |
Acquisition-related litigation expenses | (4.0 | ) |
Stock-based compensation expense | (21.6 | ) |
Remediation costs | (32.8 | ) |
Other | 1.6 | |
Income from continuing operations | 34.8 | |
Add (deduct): | ||
Depreciation and amortization | 113.0 | |
Stock-based compensation | 21.6 | |
Net change in non-cash working capital | (175.9 | ) |
Net change in deferred revenues | 92.7 | |
Non-cash interest | 25.3 | |
Gain on sale of investments | — | |
Other, primarily changes in long-term assets and liabilities and deferred taxes | (50.7 | ) |
Cash flows from operating activities of continuing operations | 60.8 | |
Cash flows from operating activities of discontinued operations | (2.9 | ) |
Cash flows from operating activities | 57.9 | |
Cash flows from investing activities | (206.7 | ) |
Cash flows from financing activities | (16.0 | ) |
Year | % |
2017 | 105.625 |
2018 | 103.750 |
2019 | 101.875 |
2020 and thereafter | 100.000 |
Long-term debt obligation as of October 31, 2016 | ||||||||||||||
(in millions of U.S. dollars) | Total | Year 1 | 2-3 Years | 4-5 Years | After 5 Years | |||||||||
$ | $ | $ | $ | $ | ||||||||||
Long-term debt (including capital leases) | 2,128.9 | 39.6 | 38.5 | 1,600.8 | 450.0 | |||||||||
Interest on long-term debt (1) | 477.3 | 105.9 | 209.4 | 162.0 | — | |||||||||
Operating leases | 25.9 | 6.4 | 10.1 | 7.2 | 2.2 | |||||||||
Purchase obligations (2) | 46.7 | 44.0 | 2.7 | — | — | |||||||||
Total contractual obligations (3) | 2,606.2 | 145.5 | 247.9 | 1,762.8 | 450.0 |
• | declines in the market value of inventory; |
• | changes in customer demand for inventory, such as cancellation of orders; and |
• | our purchases of inventory beyond customer needs that result in excess quantities on hand that we may not be able to return to the vendor, use to fulfill orders from other customers or charge back to the customer. |
Defined Benefit Plans | Other Benefit Plans | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Discount rate | 2.4 | % | 3.5 | % | 3.5 | % | 4.4 | % | |||
Rate of future compensation increases | 3.1 | % | 3.2 | % | — | % | — | % |
Defined Benefit Plans | Other Benefit Plans | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Discount rate | 1.9 | % | 2.6 | % | 4.0 | % | 4.4 | % | 4.2 | % | 4.6 | % | |||||
Expected long-term return on plan assets | 5.0 | % | 5.5 | % | 5.1 | % | — | % | — | % | — | % | |||||
Rate of future compensation increases | 2.9 | % | 3.0 | % | 2.8 | % | — | % | — | % | — | % |
(in millions of USD) | Benefit Obligation | Benefit Expense | |||
$ | $ | ||||
Impact of: | |||||
1% increase | 1.1 | — | |||
1% decrease | (0.9 | ) | — |
2016 | 2015 | 2014 | ||||
Expected time to liquidity (in years) | 4.5 | 5.5 | 6 | |||
Estimated equity volatility | 54 | % | 49 | % | 50 | % |
Risk free rate | 1.53 | % | 1.68 | % | 1.93 | % |
Dividend rate | — | % | — | % | — | % |
Risk free interest rate | 0.9 | % |
Expected volatility | 41.6 | % |
Estimated years to exit event | 3.0 |
Risk free interest rate | 1.3 | % |
Expected volatility | 39.4 | % |
Expected life of options (in years) | 6.0 | |
Dividend yield | — | % |
Fiscal years ended October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Foreign exchange gain for the period from net investment hedge | 1.1 | 42.1 | |||
Release of ineffective portion of net investment hedge to consolidated statement of operations | (0.3 | ) | (1.3 | ) | |
Net investment hedge gain from sale of Italian subsidiary reclassified to consolidated statement of operations | — | (3.9 | ) | ||
Net gain to other comprehensive income (loss) for the period related to net investment hedge | 0.8 | 36.9 |
As of October 31, | |||||
2016 | 2015 | ||||
(in millions of U.S. dollars, except share data) | $ | $ | |||
Assets | |||||
Current | |||||
Cash and cash equivalents | 165.0 | 328.7 | |||
Accounts receivable, net | 401.0 | 329.1 | |||
Inventories, net | 395.2 | 369.6 | |||
Income taxes receivable | 8.7 | 5.6 | |||
Prepaid expenses and other | 21.5 | 15.7 | |||
Total current assets | 991.4 | 1,048.7 | |||
Capital assets | 983.6 | 877.0 | |||
Intangible assets | 247.6 | 275.8 | |||
Deferred financing costs | 50.3 | 73.5 | |||
Deferred tax assets | 29.8 | 0.6 | |||
Goodwill | 281.6 | 284.4 | |||
Investments | 11.5 | 14.9 | |||
Other long-term assets | 44.1 | 40.1 | |||
Total assets | 2,639.9 | 2,615.0 | |||
Liabilities and shareholders' / members' deficit | |||||
Current | |||||
Short-term borrowings | — | 0.4 | |||
Accounts payable and accrued liabilities | 393.6 | 461.8 | |||
Income taxes payable | 6.6 | 9.0 | |||
Deferred revenues - current | 154.2 | 105.9 | |||
Current portion of long-term debt | 19.5 | 21.2 | |||
Total current liabilities | 573.9 | 598.3 | |||
Long-term debt | 2,099.5 | 2,646.7 | |||
Deferred revenues | 102.3 | 75.2 | |||
Deferred tax liabilities | 67.1 | 79.1 | |||
Other long-term liabilities | 145.5 | 79.9 | |||
Total liabilities | 2,988.3 | 3,479.2 | |||
Commitments and contingencies | |||||
Shareholders' / members' deficit: | |||||
Ordinary shares (500,000,000 shares authorized, 145,074,042 shares issued and outstanding, as of October 31, 2016, par value of €0.01 per share) | 1.6 | — | |||
Additional paid in capital | 591.4 | — | |||
Membership interests | — | 30.0 | |||
Accumulated deficit | (842.1 | ) | (820.5 | ) | |
Accumulated other comprehensive loss | (99.3 | ) | (73.7 | ) | |
Total shareholders' / members' deficit | (348.4 | ) | (864.2 | ) | |
Total liabilities and shareholders' / members' deficit | 2,639.9 | 2,615.0 |
Fiscal years ended October 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in millions of U.S. dollars, except share data) | $ | $ | $ | ||||||||
Revenues | 1,866.7 | 1,774.2 | 1,483.5 | ||||||||
Cost of goods sold | 1,321.1 | 1,215.7 | 1,096.1 | ||||||||
Gross profit | 545.6 | 558.5 | 387.4 | ||||||||
Selling, general and administrative expenses | 322.6 | 309.0 | 238.7 | ||||||||
Research and development | 2.1 | 14.8 | 13.7 | ||||||||
Repositioning expenses | 7.3 | 25.1 | 51.7 | ||||||||
Acquisition and integration costs | 16.6 | 19.3 | 60.3 | ||||||||
Impairment charge | — | 4.1 | 9.7 | ||||||||
Other operating (income) loss | (0.7 | ) | 4.6 | (0.1 | ) | ||||||
Operating income | 197.7 | 181.6 | 13.4 | ||||||||
Interest expense, net | 160.4 | 141.8 | 90.5 | ||||||||
Foreign exchange loss, net | 5.7 | 17.8 | 8.6 | ||||||||
Refinancing expenses | 21.6 | 3.7 | 28.2 | ||||||||
Gain on sale of third party investment | — | (16.2 | ) | — | |||||||
Other income, net | (0.8 | ) | (0.7 | ) | (1.1 | ) | |||||
Income (loss) before income taxes | 10.8 | 35.2 | (112.8 | ) | |||||||
Current | 17.3 | 10.3 | 19.5 | ||||||||
Deferred | (41.3 | ) | (10.0 | ) | (15.2 | ) | |||||
(Benefit from) provision for income taxes | (24.0 | ) | 0.3 | 4.3 | |||||||
Net income (loss) from continuing operations | 34.8 | 34.9 | (117.1 | ) | |||||||
Net (loss) income from discontinued operations | (3.1 | ) | 103.5 | (2.1 | ) | ||||||
Net income (loss) | 31.7 | 138.4 | (119.2 | ) | |||||||
Basic earnings (loss) per ordinary share | |||||||||||
From continuing operations | $ | 0.28 | $ | 0.30 | $ | (1.01 | ) | ||||
From discontinued operations | $ | (0.03 | ) | $ | 0.90 | $ | (0.02 | ) | |||
Diluted earnings (loss) per ordinary share | |||||||||||
From continuing operations | $ | 0.28 | $ | 0.30 | $ | (1.01 | ) | ||||
From discontinued operations | $ | (0.02 | ) | $ | 0.90 | $ | (0.02 | ) | |||
Weighted average number of ordinary shares outstanding (in thousands) | |||||||||||
Basic | 123,924 | 115,610 | 115,610 | ||||||||
Diluted | 124,304 | 115,610 | 115,610 |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | |||||
Net income (loss) | 31.7 | 138.4 | (119.2 | ) | ||||
Other comprehensive income (loss), net of income taxes: | ||||||||
Foreign currency translation adjustments | (3.3 | ) | (76.5 | ) | (56.5 | ) | ||
Net gain related to net investment hedge | 0.8 | 40.8 | 33.0 | |||||
Net loss on intra-entity foreign currency transactions | (0.1 | ) | (6.5 | ) | (4.8 | ) | ||
Foreign currency loss recognized in net income from sale of subsidiaries | — | 6.7 | — | |||||
Change in value of investments designated as available for sale | — | — | 0.1 | |||||
Change in value of derivatives designated as foreign currency cash flow hedges | (5.5 | ) | (14.6 | ) | (9.2 | ) | ||
Losses from foreign currency hedges reclassified to consolidated statement of operations (1) | 9.2 | 13.9 | 6.5 | |||||
Net change in minimum pension liability (2) | (26.7 | ) | 1.3 | (21.5 | ) | |||
Comprehensive income (loss) | 6.1 | 103.5 | (171.6 | ) |
Shares Issued | Restricted Voting Shares | Membership Interests | Contributed Surplus | Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Members'/ Shareholders' Deficit | ||||||||||||||||||
(in millions of U.S. dollars, except share data) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Balance at October 31, 2013 | 610.6 | — | 16.7 | — | — | (516.3 | ) | 13.6 | 124.6 | |||||||||||||||||
Patheon Inc. stock-based compensation | — | — | 5.3 | — | — | — | — | 5.3 | ||||||||||||||||||
Patheon Inc. share repurchase, net of amounts reinvested in Patheon Holdings | (610.6 | ) | — | (22.0 | ) | — | — | (256.6 | ) | — | (889.2 | ) | ||||||||||||||
Patheon Holdings membership interests issued | — | 533.8 | — | — | — | — | — | 533.8 | ||||||||||||||||||
Management equity incentive plan stock-based compensation | — | 4.7 | — | — | — | — | — | 4.7 | ||||||||||||||||||
Comprehensive income (loss): | — | |||||||||||||||||||||||||
Net loss | — | — | — | — | — | (119.2 | ) | — | (119.2 | ) | ||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (56.5 | ) | (56.5 | ) | ||||||||||||||||
Gain related to net investment hedge | — | — | — | — | — | — | 33.0 | 33.0 | ||||||||||||||||||
Loss on intra-entity foreign currency transactions | — | — | — | — | — | — | (4.8 | ) | (4.8 | ) | ||||||||||||||||
Change in value of derivatives designated as foreign currency cash flow hedges | — | — | — | — | — | — | (9.2 | ) | (9.2 | ) | ||||||||||||||||
Change in value of investments designated as available for sale | — | — | — | — | — | — | 0.1 | 0.1 | ||||||||||||||||||
Losses on foreign currency cash flow hedges reclassified to consolidated statements of operations | — | — | — | — | — | — | 6.5 | 6.5 | ||||||||||||||||||
Net change in minimum pension liability | — | — | — | — | — | — | (21.5 | ) | (21.5 | ) | ||||||||||||||||
Total comprehensive loss | — | — | — | — | — | (119.2 | ) | (52.4 | ) | (171.6 | ) | |||||||||||||||
Balance at October 31, 2014 | — | 538.5 | — | — | — | (892.1 | ) | (38.8 | ) | (392.4 | ) | |||||||||||||||
Stock-based compensation | — | 13.9 | — | — | — | — | — | 13.9 | ||||||||||||||||||
Partnership units issued in connection with Irix and Agere acquisitions | — | 7.8 | — | — | — | — | — | 7.8 | ||||||||||||||||||
Distributions to members | — | (538.0 | ) | — | — | — | — | — | (538.0 | ) | ||||||||||||||||
Tax benefit from share-based payment arrangements | — | 7.8 | — | — | — | — | — | 7.8 | ||||||||||||||||||
Spinoff of subsidiary | — | — | — | — | — | (66.8 | ) | — | (66.8 | ) | ||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | 138.4 | — | 138.4 | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (76.5 | ) | (76.5 | ) | ||||||||||||||||
Gain related to net investment hedge, net | — | — | — | — | — | — | 40.8 | 40.8 | ||||||||||||||||||
Loss on intra-entity foreign currency transactions | — | — | — | — | — | — | (6.5 | ) | (6.5 | ) | ||||||||||||||||
Foreign currency loss recognized in net income from sale of subsidiaries | — | — | — | — | — | — | 6.7 | 6.7 | ||||||||||||||||||
Change in value of derivatives designated as foreign currency cash flow hedges | — | — | — | — | — | — | (14.6 | ) | (14.6 | ) | ||||||||||||||||
Losses on foreign currency cash flow hedges reclassified to consolidated statements of operations | — | — | — | — | — | — | 13.9 | 13.9 | ||||||||||||||||||
Net change in minimum pension liability | — | — | — | — | — | — | 1.3 | 1.3 | ||||||||||||||||||
Total comprehensive income (loss) | — | — | — | — | — | 138.4 | (34.9 | ) | 103.5 | |||||||||||||||||
Balance at October 31, 2015 | — | 30.0 | — | — | — | (820.5 | ) | (73.7 | ) | (864.2 | ) | |||||||||||||||
Stock-based compensation | — | 3.7 | — | — | 17.9 | — | — | 21.6 | ||||||||||||||||||
Capital transactions | — | (33.7 | ) | — | — | — | (53.3 | ) | — | (87.0 | ) | |||||||||||||||
Capital contribution | — | — | — | 1.2 | — | — | — | 1.2 | ||||||||||||||||||
Issuance of ordinary shares | 145,074,042 | — | — | — | 0.4 | 573.5 | — | — | 573.9 | |||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | 31.7 | — | 31.7 | ||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | (3.3 | ) | (3.3 | ) | ||||||||||||||||
Gain related to net investment hedge, net | — | — | — | — | — | — | 0.8 | 0.8 | ||||||||||||||||||
Loss on intra-entity foreign currency transactions, net | — | — | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
Change in value of derivatives designated as foreign currency cash flow hedges | — | — | — | — | — | — | (5.5 | ) | (5.5 | ) | ||||||||||||||||
Losses from foreign currency hedges reclassified to consolidated statement of operations | — | — | — | — | — | — | 9.2 | 9.2 | ||||||||||||||||||
Net change in minimum pension liability | — | — | — | — | — | — | (26.7 | ) | (26.7 | ) | ||||||||||||||||
Total comprehensive income (loss) | — | — | — | — | — | 31.7 | (25.6 | ) | 6.1 | |||||||||||||||||
Balance at October 31, 2016 | 145,074,042 | — | — | — | 1.6 | 591.4 | (842.1 | ) | (99.3 | ) | (348.4 | ) |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(in millions of U.S. dollars) | $ | $ | $ | |||||
Operating activities | ||||||||
Net income (loss) from continuing operations | 34.8 | 34.9 | (117.1 | ) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 113.0 | 107.8 | 79.5 | |||||
Increase in deferred revenues | 356.5 | 262.7 | 82.8 | |||||
Amortization of deferred revenues | (263.8 | ) | (221.3 | ) | (44.4 | ) | ||
Non-cash interest | 25.3 | 16.6 | 24.8 | |||||
Change in other long-term assets and liabilities | (13.3 | ) | (19.3 | ) | (9.9 | ) | ||
Deferred income taxes | (37.0 | ) | (10.0 | ) | (15.2 | ) | ||
Stock-based compensation | 21.6 | 13.9 | 10.0 | |||||
Impairment | — | 4.1 | 9.7 | |||||
Payment of original issue discount | — | — | (17.3 | ) | ||||
Excess tax benefit from share-based payment arrangements | — | (7.8 | ) | — | ||||
Gain on sale of third party investment | — | (16.2 | ) | — | ||||
Return on capital from equity investment | 1.3 | — | — | |||||
Foreign exchange (gain) loss on debt | (0.3 | ) | (1.6 | ) | 0.3 | |||
Other | (1.4 | ) | 4.6 | (2.1 | ) | |||
Net change in non-cash working capital balances | (175.9 | ) | (26.6 | ) | (26.0 | ) | ||
Cash provided by (used in) operating activities of continuing operations | 60.8 | 141.8 | (24.9 | ) | ||||
Cash (used in) provided by operating activities of discontinued operations | (2.9 | ) | 43.2 | 49.9 | ||||
Cash provided by operating activities | 57.9 | 185.0 | 25.0 | |||||
Investing activities | ||||||||
Additions to capital assets | (205.8 | ) | (146.9 | ) | (81.5 | ) | ||
Proceeds from sale of capital assets | 0.1 | 6.5 | 4.6 | |||||
Equity investment in related party | — | (5.0 | ) | — | ||||
Proceeds on sale of third party investment | — | 21.4 | — | |||||
Return of capital from equity investment | 2.3 | — | 1.3 | |||||
Acquisitions, net of cash acquired | — | (170.2 | ) | (379.8 | ) | |||
Cash used in investing activities of continuing operations | (203.4 | ) | (294.2 | ) | (455.4 | ) | ||
Cash (used in) provided by investing activities of discontinued operations | (3.3 | ) | 205.9 | (11.1 | ) | |||
Cash used in investing activities | (206.7 | ) | (88.3 | ) | (466.5 | ) | ||
Financing activities | ||||||||
Proceeds from long-term borrowings | 40.8 | 804.2 | 2,092.0 | |||||
Repayment of debt | (591.8 | ) | (92.9 | ) | (673.9 | ) | ||
Redemption of note payable issued as a distribution to member | (51.0 | ) | — | — | ||||
Increase in deferred financing costs | — | (19.5 | ) | (60.9 | ) | |||
Cash paid to acquire Patheon shares, net of amounts reinvested in Patheon Holdings | — | — | (889.2 | ) | ||||
Capital contribution | 1.2 | — | — | |||||
Proceeds on issuance of ordinary shares, net | 584.8 | — | — | |||||
Excess tax benefit from share-based payment arrangements | — | 7.8 | — | |||||
Cash distribution to members from proceeds obtained from the issuance of the Senior PIK Toggle Notes | — | (538.0 | ) | — | ||||
Cash distribution to members for spinoff of subsidiary | — | (12.4 | ) | — | ||||
Cash (used in) provided by financing activities of continuing operations | (16.0 | ) | 149.2 | 468.0 | ||||
Cash used in financing activities of discontinued operations | — | (1.0 | ) | (0.1 | ) | |||
Cash (used in) provided by financing activities | (16.0 | ) | 148.2 | 467.9 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1.1 | (0.8 | ) | (3.4 | ) | |||
Net change in cash and cash equivalents during the period | (163.7 | ) | 244.1 | 23.0 | ||||
Cash and cash equivalents, beginning of period | 328.7 | 84.6 | 61.6 | |||||
Cash and cash equivalents, end of period | 165.0 | 328.7 | 84.6 | |||||
Less: Cash and cash equivalents of discontinued operations, end of period | — | — | 11.2 | |||||
Cash and cash equivalents of continuing operations, end of period | 165.0 | 328.7 | 73.4 | |||||
Supplemental cash flow information | ||||||||
Interest paid (including payment of original issue discount in fiscal 2014) | 168.1 | 109.9 | 81.5 | |||||
Income taxes paid, net of income taxes received | 14.5 | 17.6 | 19.7 |
Buildings | 10 – 50 years |
Building equipment | 10 – 15 years |
Machinery and equipment | 5 – 15 years |
Office equipment | 3 – 10 years |
Computer software | 3 – 10 years |
Furniture and fixtures | 7 – 10 years |
$ | ||
Cash and cash equivalents | 6.6 | |
Accounts receivable | 16.8 | |
Inventories | 8.9 | |
Income taxes receivable | 0.1 | |
Prepaid expenses and other | 0.2 | |
Deferred tax assets | 2.9 | |
Capital assets | 17.8 | |
Intangible assets | 67.8 | |
Goodwill | 83.3 | |
Other long-term assets | 0.3 | |
Accounts payable and accrued liabilities | (8.7 | ) |
Deferred revenue - short-term | (7.6 | ) |
Long-term debt | (0.2 | ) |
Deferred tax liabilities | (26.9 | ) |
Total purchase price | 161.3 |
Estimated Fair Value | Estimated Useful Life (in years) | |||
$ | ||||
Trade names (1) | 0.8 | 3.0 | ||
Trade secrets and patents (1) | 1.3 | 14.0 | ||
Customer relationships (2) | 65.7 | 14.3 | ||
Total | 67.8 |
April 1, 2015 to October 31, 2015 | ||
$ | ||
Revenues | 45.5 | |
Income from continuing operations | 10.5 |
$ | ||
Cash and cash equivalents | 1.7 | |
Accounts receivable | 1.3 | |
Prepaid expenses and other | 0.1 | |
Capital assets | 3.7 | |
Intangible assets | 2.1 | |
Goodwill | 20.7 | |
Accounts payable and accrued liabilities | (0.1 | ) |
Long-term debt | (0.1 | ) |
Deferred tax liabilities | (2.3 | ) |
Total purchase price | 27.1 |
Estimated Fair Value | Estimated Useful Life (in years) | |||
$ | ||||
Trade secrets and patents (1) | 1.2 | 15.0 | ||
Customer relationships (2) | 0.5 | 5.0 | ||
Non-compete agreements (3) | 0.4 | 3.0 | ||
Total | 2.1 |
March 21, 2015 to October 31, 2015 | ||
$ | ||
Revenues | 4.2 | |
Loss from continuing operations | (1.8 | ) |
$ | ||
Cash and cash equivalents | 0.9 | |
Accounts receivable | 17.7 | |
Inventories | 8.1 | |
Prepaid expenses and other | 2.0 | |
Capital assets | 72.5 | |
Intangible assets | 111.7 | |
Goodwill | 110.7 | |
Other long-term assets | 0.1 | |
Accounts payable and accrued liabilities | (13.2 | ) |
Deferred revenue - short-term | (22.5 | ) |
Deferred tax liabilities - short-term | (0.1 | ) |
Long-term debt - current portion | (2.0 | ) |
Long-term debt | (1.9 | ) |
Deferred revenue - long term | (1.8 | ) |
Other long-term liabilities | (0.8 | ) |
Deferred tax liabilities | (24.2 | ) |
Total purchase price | 257.2 |
Estimated Fair Value | Estimated Useful Life (in years) | |||
$ | ||||
Developed technology and know-how (1) | 2.3 | 15.0 | ||
Customer relationships (2) | 107.2 | 15.0 | ||
Non-compete agreements (3) | 2.2 | 3.0 | ||
Total | 111.7 |
September 29, 2014 to October 31, 2014 | ||
$ | ||
Revenues | 5.5 | |
Loss from continuing operations | (2.8 | ) |
$ | ||
DSM contribution of DPP for a 49% interest in Patheon | 480.4 | |
Preferred interest in the Partnership | 49.9 | |
DSM cash payment | 114.4 | |
Patheon reimbursement to DSM | 17.4 | |
Earnout to DSM related to Biologics business | 3.5 | |
Total purchase price | 665.6 |
$ | ||
Cash and cash equivalents | 10.2 | |
Accounts receivable | 137.5 | |
Inventories | 311.3 | |
Income taxes receivable | 1.5 | |
Prepaid expenses and other | 1.7 | |
Deferred tax assets - short-term | 2.7 | |
Capital assets | 397.1 | |
Intangible assets | 101.6 | |
Goodwill | 37.1 | |
Deferred tax assets - long-term | 1.1 | |
Investments | 9.1 | |
Other long-term assets | 10.3 | |
Accounts payable and accrued liabilities | (199.0 | ) |
Income tax payable | (0.9 | ) |
Deferred revenues - short-term | (34.2 | ) |
Current portion of long-term debt | (2.8 | ) |
Long-term debt | (9.2 | ) |
Deferred revenues - long term | (28.4 | ) |
Other long-term liabilities | (67.3 | ) |
Deferred tax liabilities - long-term | (13.8 | ) |
Total purchase price | 665.6 |
Estimated Fair Value | Estimated Useful Life (in years) | |||
$ | ||||
Favorable agreements (1) | 1.5 | 0.5 - 9 | ||
Trade names (1) | 0.7 | 8 - 9 | ||
Developed technology and know-how (1) | 23.5 | 7 - 14 | ||
Customer relationships (2) | 66.8 | 13 - 14 | ||
In-process research and development (2), (3) | 8.8 | Indefinite | ||
Regulatory permits | 0.3 | Indefinite | ||
Total | 101.6 |
March 11, 2014 to October 31, 2014 | ||
$ | ||
Revenues | 362.6 | |
Loss from continuing operations | (62.5 | ) |
Loss from discontinued operations | (0.4 | ) |
Net loss | (62.9 | ) |
Fiscal year ended October 31, 2014 | ||
$ | ||
Revenues | 1,723.8 | |
Loss from continuing operations | (276.9 | ) |
• | additional interest expense and amortization of deferred financing costs related to the long-term debt used to fund the acquisitions; |
• | refinancing expense not capitalized as a part of deferred financing costs and/or original issue discount has been removed; |
• | additional amortization expense related to the fair value of identifiable intangible assets acquired; |
• | additional cost of goods sold resulting from increases/decreases in depreciation expense relating to the fair values of acquired property and equipment; and |
• | removal of acquisition-related costs |
Fiscal years ended October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
$ | $ | $ | ||||||
Revenues | 2.1 | 213.2 | 221.3 | |||||
Cost of goods sold | 1.9 | 165.0 | 185.1 | |||||
Gross profit | 0.2 | 48.2 | 36.2 | |||||
Selling, general and administrative expenses | 0.4 | 21.0 | 22.8 | |||||
Research and development | — | 0.5 | 1.4 | |||||
Repositioning expenses | — | 2.2 | 1.8 | |||||
Acquisition and integration costs | — | 0.1 | 0.1 | |||||
Impairment charge | — | — | 12.4 | |||||
Loss (gain) on disposals, net | 2.8 | (88.3 | ) | — | ||||
Operating (loss) income | (3.0 | ) | 112.7 | (2.3 | ) | |||
Interest (income) expense, net | — | (0.6 | ) | 0.1 | ||||
Foreign exchange income, net | (0.1 | ) | — | (0.1 | ) | |||
Other income, net | — | (0.1 | ) | — | ||||
(Loss) income before income taxes | (2.9 | ) | 113.4 | (2.3 | ) | |||
Provision for (benefit from) income taxes | 0.2 | 9.9 | (0.2 | ) | ||||
Net (loss) income | (3.1 | ) | 103.5 | (2.1 | ) |
As of July 31, 2015 | ||
Assets | $ | |
Cash and cash equivalents | 12.4 | |
Accounts receivable, net | 26.1 | |
Inventories | 3.5 | |
Prepaid expenses and other | 0.2 | |
Total current assets | 42.2 | |
Capital assets | 2.5 | |
Intangible assets | 17.1 | |
Goodwill | 11.1 | |
Total assets | 72.9 | |
Liabilities | ||
Accounts payable and accrued liabilities | 19.3 | |
Deferred revenues - short-term | 0.7 | |
Total current liabilities | 20.0 | |
Deferred revenues | 0.4 | |
Deferred tax liabilities | 6.0 | |
Total liabilities | 26.4 | |
Net assets of subsidiary | 46.5 |
October 31, 2016 | October 31, 2015 | ||||
$ | $ | ||||
Raw materials, packaging components and spare parts | 192.1 | 160.2 | |||
Work-in-process | 80.9 | 63.5 | |||
Finished goods | 122.2 | 145.9 | |||
Balance, end of period | 395.2 | 369.6 |
October 31, 2016 | October 31, 2015 | ||||
$ | $ | ||||
Balance, beginning of period | (45.7 | ) | (30.3 | ) | |
Additions | (21.0 | ) | (20.1 | ) | |
Write-offs | 15.6 | 4.7 | |||
Balance, end of period | (51.1 | ) | (45.7 | ) |
October 31, 2016 | October 31, 2015 | ||||
$ | $ | ||||
Trade payables | 279.3 | 289.2 | |||
Interest payable | 14.0 | 36.2 | |||
Accrued salaries and related expenses | 81.8 | 89.5 | |||
Customer deposits | 4.3 | 7.3 | |||
Repositioning | 5.4 | 22.9 | |||
Other accruals | 8.8 | 16.7 | |||
Balance, end of period | 393.6 | 461.8 |
Definite-lived intangible assets | Gross carrying value | Accumulated amortization | Net carrying value | Weighted Average Useful Life (in Years) | |||||||
$ | $ | $ | |||||||||
Favorable agreements | 1.0 | (1.0 | ) | — | — | ||||||
Trade names | 1.6 | (0.7 | ) | 0.9 | 5.6 | ||||||
Developed technology | 54.1 | (16.8 | ) | 37.3 | 10.8 | ||||||
Trade secrets and patents | 2.5 | (0.3 | ) | 2.2 | 14.5 | ||||||
Customer relationships | 248.8 | (40.3 | ) | 208.5 | 14.2 | ||||||
Non-compete agreements | 2.6 | (1.7 | ) | 0.9 | 3.0 | ||||||
Subtotal | 310.6 | (60.8 | ) | 249.8 | |||||||
Foreign exchange | (3.5 | ) | |||||||||
Balance, end of period | 246.3 |
Indefinite-lived intangible assets | Gross carrying value | Accumulated impairment | Net carrying value | |||||
$ | $ | $ | ||||||
In-process research and development | 2.2 | (0.9 | ) | 1.3 | ||||
Regulatory permits | 0.2 | — | 0.2 | |||||
Subtotal | 2.4 | (0.9 | ) | 1.5 | ||||
Foreign exchange | (0.2 | ) | ||||||
Balance, end of period | 1.3 |
$ | ||
2017 | 24.3 | |
2018 | 22.7 | |
2019 | 22.0 | |
2020 | 22.0 | |
2021 | 21.6 | |
Thereafter | 133.7 | |
Total | 246.3 |
Total | ||
$ | ||
Balance at October 31, 2014 (1) | 192.0 | |
Spinoff of subsidiary | (11.1 | ) |
Measurement period adjustments (2) | 1.2 | |
Additions through acquisitions (3) | 104.5 | |
Foreign currency translation adjustments | (2.2 | ) |
Balance at October 31, 2015 | 284.4 | |
Measurement period adjustment (4) | (2.9 | ) |
Foreign currency translation adjustments | 0.1 | |
Balance at October 31, 2016 | 281.6 |
Total | ||
$ | ||
Balance at October 31, 2013 | 35.1 | |
Additions to deferred revenue | 82.8 | |
Amortization of deferred revenues | (44.4 | ) |
Additions from acquisitions | 76.6 | |
Foreign exchange | (3.9 | ) |
Other | (5.1 | ) |
Balance at October 31, 2014 | 141.1 | |
Additions to deferred revenue | 262.7 | |
Amortization of deferred revenues | (221.3 | ) |
Spinoff impact | (1.1 | ) |
Additions from acquisitions (including measurement period adjustments) | 8.6 | |
Foreign exchange | (8.9 | ) |
Balance at October 31, 2015 | 181.1 | |
Additions to deferred revenue | 356.5 | |
Amortization of deferred revenues | (263.8 | ) |
Foreign exchange | (8.2 | ) |
Other | (9.1 | ) |
Balance at October 31, 2016 | 256.5 |
As of October 31, | |||||||||||||||||
2016 | 2015 | ||||||||||||||||
Cost | Accumulated Depreciation | Net Book Value | Cost | Accumulated Depreciation | Net Book Value | ||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Land | 48.3 | — | 48.3 | 48.8 | — | 48.8 | |||||||||||
Buildings | 492.8 | 147.9 | 344.9 | 436.3 | 110.7 | 325.6 | |||||||||||
Machinery and equipment | 731.6 | 396.6 | 335.0 | 627.5 | 313.5 | 314.0 | |||||||||||
Office equipment (including software) | 98.9 | 62.2 | 36.7 | 87.8 | 51.1 | 36.7 | |||||||||||
Furniture and fixtures | 12.9 | 9.5 | 3.4 | 13.9 | 9.8 | 4.1 | |||||||||||
Construction in progress | 215.3 | — | 215.3 | 147.8 | — | 147.8 | |||||||||||
Balance, end of period | 1,599.8 | 616.2 | 983.6 | 1,362.1 | 485.1 | 877.0 |
As of October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Cost of assets under capital leases included in capital assets | 0.9 | 0.9 | |||
Accumulated depreciation relating to assets under capital leases | (0.1 | ) | (0.6 | ) | |
Net book value | 0.8 | 0.3 | |||
Annual depreciation of assets under capital leases | — | 0.3 |
As of October 31, 2016 | As of October 31, 2015 | ||||
$ | $ | ||||
USD Term Loan with a base rate plus 2.25% or LIBOR with a floor of 1% plus 3.25% rate (currently 4.25%), and maturity date of March 10, 2021 (the "Credit Agreement") | 1,138.9 | 1,150.6 | |||
Euro Term Loan with a base rate plus 2.50% or LIBOR with a floor of 1% plus 3.50% rate (currently 4.50%), and maturity date of March 10, 2021 (the "Credit Agreement") | 511.0 | 517.5 | |||
8.75% / 9.50% Senior PIK Toggle Notes due May 1, 2020 (the "Senior PIK Toggle Notes") | — | 550.0 | |||
7.50% Senior Notes due February 1, 2022 (the "Notes") | 450.0 | 450.0 | |||
Secured Revolving Facility balance at base rate plus 2.25% rate (currently 3.75%), and one month maturity terms on a rolling basis | 20.0 | — | |||
Seller financing incurred by Gallus, non-interest bearing with a maturity date of May 13, 2016 | — | 2.0 | |||
Government of Austria research and development loans with annual interest rates ranging from 1.56% to 3.16% and maturities through March 2020 | 3.5 | 4.7 | |||
Italian subsidized loan with annual interest rate of 0.5%, and maturity date of June 30, 2020 | 4.1 | 4.3 | |||
Italian bank loan with Euribor 6-month + 7.1% rate, and maturity date of June 30, 2020 | 0.7 | 0.7 | |||
Capital lease obligations | 0.7 | 0.1 | |||
Total long-term debt outstanding | 2,128.9 | 2,679.9 | |||
Less: | |||||
Original issue discount, net of accumulated amortization of $6.2 million and $4.1 million, respectively | (9.9 | ) | (12.0 | ) | |
Current portion | (19.5 | ) | (21.2 | ) | |
Ending balance | 2,099.5 | 2,646.7 |
Testing Period Ending | Maximum Ratio |
April 30, 2014 through October 31, 2014 | 6.75 to 1.00 |
November 1, 2014 through October 31, 2015 | 6.50 to 1.00 |
November 1, 2015 through October 31, 2016 | 6.25 to 1.00 |
November 1, 2016 through October 31, 2017 | 6.00 to 1.00 |
November 1, 2017 and thereafter | 5.75 to 1.00 |
Year | % |
2017 | 105.625 |
2018 | 103.750 |
2019 | 101.875 |
2020 and thereafter | 100.000 |
Long-term Debt | Capital Leases | ||||
$ | $ | ||||
2017 | 39.3 | 0.3 | |||
2018 | 19.3 | 0.3 | |||
2019 | 18.8 | 0.1 | |||
2020 | 18.3 | — | |||
2021 | 1,582.5 | — | |||
Thereafter | 450.0 | — | |||
Total payments | 2,128.2 | 0.7 |
As of October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Defined benefit pension plans | 79.2 | 59.2 | |||
Other post-employment benefits | 5.2 | 4.8 | |||
Unfunded termination indemnities | 3.7 | 3.9 | |||
Uncertain tax positions | 7.9 | — | |||
Other long-term liabilities | 49.5 | 12.0 | |||
145.5 | 79.9 |
2016 | 2015 | ||||||||||
Defined Benefit Pension Plans | Other Benefit Plans | Defined Benefit Pension Plans | Other Benefit Plans | ||||||||
$ | $ | $ | $ | ||||||||
Change in benefit obligation | |||||||||||
Benefit obligation, beginning of the year | 156.0 | 5.0 | 168.6 | 7.7 | |||||||
Current service cost | 1.9 | — | 2.1 | 0.1 | |||||||
Interest cost | 5.2 | 0.2 | 5.6 | 0.3 | |||||||
Benefits paid | (4.8 | ) | (0.1 | ) | (5.8 | ) | (0.2 | ) | |||
Actuarial loss (gain) | 33.3 | 0.4 | (1.1 | ) | (1.9 | ) | |||||
Currency translation | (21.9 | ) | (0.1 | ) | (13.4 | ) | (1.0 | ) | |||
Benefit obligation, end of the year | 169.7 | 5.4 | 156.0 | 5.0 | |||||||
Change in plan assets | |||||||||||
Market value of plan assets, beginning of year | 97.4 | — | 103.7 | — | |||||||
Actual return on plan assets | 7.3 | — | 1.6 | — | |||||||
Employer contributions | 5.1 | 0.1 | 5.0 | 0.2 | |||||||
Benefits paid | (4.8 | ) | (0.1 | ) | (5.8 | ) | (0.2 | ) | |||
Currency translation | (15.6 | ) | — | (7.1 | ) | — | |||||
Market value of plan assets, end of the year | 89.4 | — | 97.4 | — | |||||||
Unfunded status of plans, end of the year | (80.3 | ) | (5.4 | ) | (58.6 | ) | (5.0 | ) |
Defined Benefit Plans | Other Benefit Plans | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Discount rate | 2.4 | % | 3.5 | % | 3.5 | % | 4.4 | % | |||
Rate of future compensation increases | 3.1 | % | 3.2 | % | — | % | — | % |
Defined Benefit Plans | Other Benefit Plans | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Discount rate | 1.9 | % | 2.6 | % | 4.0 | % | 4.4 | % | 4.2 | % | 4.6 | % | |||||
Expected long-term return on plan assets | 5.0 | % | 5.5 | % | 5.1 | % | — | % | — | % | — | % | |||||
Rate of future compensation increases | 2.9 | % | 3.0 | % | 2.8 | % | — | % | — | % | — | % |
Benefit Obligation | Benefit Expense | ||||
Impact of: | $ | $ | |||
1% increase | 1.1 | — | |||
1% decrease | (0.9 | ) | — |
Fiscal years ended October 31, | |||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||
Defined Benefit Pension Plans | Other Benefit Plans | Defined Benefit Pension Plans | Other Benefit Plans | Defined Benefit Pension Plans | Other Benefit Plans | ||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Service cost | 1.9 | — | 2.1 | 0.1 | 1.8 | 0.1 | |||||||||||
Interest cost | 5.2 | 0.2 | 5.6 | 0.3 | 6.1 | 0.4 | |||||||||||
Expected return on plan assets | (4.9 | ) | — | (5.6 | ) | — | (6.3 | ) | — | ||||||||
Curtailment gain | — | — | — | — | (1.6 | ) | — | ||||||||||
Settlement loss | — | — | 1.0 | — | 1.2 | — | |||||||||||
Amortization of actuarial loss | 1.5 | — | 1.6 | — | 0.9 | — | |||||||||||
Net periodic benefit costs | 3.7 | 0.2 | 4.7 | 0.4 | 2.1 | 0.5 |
Defined Benefit Plans Canada | Defined Benefit Plans U.K. | |||
Equity securities | 55 | % | 22 | % |
Debt securities | 43 | % | 20 | % |
Other | 2 | % | 58 | % |
Total | Level 1 | Level 2 | Level 3 | ||||||||
$ | $ | $ | $ | ||||||||
Equity securities | 35.4 | — | 35.4 | — | |||||||
Debt securities | 21.7 | — | 21.7 | — | |||||||
Cash and other investments | 32.3 | 0.4 | 31.9 | — | |||||||
89.4 | 0.4 | 89.0 | — |
Total | Level 1 | Level 2 | Level 3 | ||||||||
$ | $ | $ | $ | ||||||||
Equity securities | 35.7 | — | 35.7 | — | |||||||
Debt securities | 25.0 | — | 25.0 | — | |||||||
Cash and other investments | 36.7 | 0.2 | 36.5 | — | |||||||
97.4 | 0.2 | 97.2 | — |
Total Defined Benefit Plan Payments | Total Other Benefit Plan Payments | ||||
$ | $ | ||||
2017 | 3.4 | 0.2 | |||
2018 | 3.6 | 0.2 | |||
2019 | 4.1 | 0.3 | |||
2020 | 4.7 | 0.3 | |||
2021 | 4.9 | 0.3 | |||
Thereafter | 29.5 | 1.8 | |||
50.2 | 3.1 |
Fiscal years ended October 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Numerator (in millions): | |||||||||||
Income (loss) from continuing operations | $ | 34.8 | $ | 34.9 | $ | (117.1 | ) | ||||
(Loss) income from discontinued operations | $ | (3.1 | ) | $ | 103.5 | $ | (2.1 | ) | |||
Denominator: | |||||||||||
Weighted-average number of shares of ordinary shares - basic | 123,924,335 | 115,609,756 | 115,609,756 | ||||||||
Effect of dilutive securities: | |||||||||||
Restricted stock units | 361,342 | — | — | ||||||||
Stock options | 18,300 | — | — | ||||||||
Weighted-average number of shares of ordinary shares - diluted | 124,303,977 | 115,609,756 | 115,609,756 | ||||||||
Earnings (loss) per ordinary share - basic: | |||||||||||
From continuing operations | $ | 0.28 | $ | 0.30 | $ | (1.01 | ) | ||||
From discontinued operations | $ | (0.03 | ) | $ | 0.90 | $ | (0.02 | ) | |||
Earnings (loss) per ordinary share - diluted: | |||||||||||
From continuing operations | $ | 0.28 | $ | 0.30 | $ | (1.01 | ) | ||||
From discontinued operations | $ | (0.02 | ) | $ | 0.90 | $ | (0.02 | ) |
As of October 31, | ||||||||
2016 | 2015 | 2014 | ||||||
$ | $ | $ | ||||||
Management Equity Incentive Plan (MEIP) | 18.0 | 13.8 | 4.7 | |||||
Restricted Stock Units | 2.9 | — | — | |||||
Stock Options | 0.6 | — | 5.3 | |||||
Other (1) | 0.1 | 0.1 | — | |||||
Stock Based Compensation Expense | 21.6 | 13.9 | 10.0 |
Class B | Class C | Class D | Class E | Total | Weighted Average Fair Value | |||||||||
Outstanding as of October 31, 2015 | 64,525 | 9,200 | 9,200 | 9,200 | 92,125 | $ | 684.36 | |||||||
Granted | 840 | 120 | 120 | 120 | 1,200 | $ | 855.40 | |||||||
Forfeited | (5,450 | ) | (850 | ) | (850 | ) | (850 | ) | (8,000 | ) | $ | 678.46 | ||
Converted into Partnership Shares | (625 | ) | — | — | — | (625 | ) | $ | 693.35 | |||||
Outstanding as of October 31, 2016 | 59,290 | 8,470 | 8,470 | 8,470 | 84,700 | $ | 687.27 |
2016 | 2015 | 2014 | ||||
Expected time to liquidity (in years) | 4.5 | 5.5 | 6 | |||
Estimated equity volatility | 54 | % | 49 | % | 50 | % |
Risk free rate | 1.53 | % | 1.68 | % | 1.93 | % |
Dividend rate | — | % | — | % | — | % |
Risk free interest rate | 0.9 | % |
Expected volatility | 41.6 | % |
Estimated years to exit event | 3.0 |
Restricted Share Units | Weighted Average Grant Date Fair Value | |||
$ | ||||
Outstanding as of October 31, 2015 | — | — | ||
Granted | 520,325 | 21.00 | ||
Forfeited | (70,141 | ) | (21.00 | ) |
Outstanding as of October 31, 2016 | 450,184 | 21.00 |
Risk free interest rate | 1.3 | % |
Expected volatility | 39.4 | % |
Expected life of options (in years) | 6.0 | |
Dividend yield | — | % |
Stock Options | Weighted Average Fair Value | |||
$ | ||||
Outstanding as of October 31, 2015 | — | — | ||
Granted | 1,145,338 | 8.29 | ||
Forfeited | (123,754 | ) | (8.29 | ) |
Outstanding as of October 31, 2016 | 1,021,584 | 8.29 |
Number of shares | Weighted- average exercise price | Aggregate intrinsic value | ||||||
$ | $ | |||||||
Outstanding, beginning of the year | 11,017,225 | 2.46 | 28,871,065 | |||||
Exercised | (6,677,225 | ) | 9.31 | 45,395,345 | ||||
Forfeited/Canceled | (4,340,000 | ) | 9.31 | 30,350,212 | ||||
Outstanding, end of the year | — | — | — |
As of October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Held-for-trading (1) | 166.4 | 330.4 | |||
Accounts receivable, net (2) | 401.0 | 329.1 | |||
Other financial liabilities (3) | 2,512.6 | 3,130.1 | |||
Derivatives designated as effective hedges (4) | 2.7 | 7.6 | |||
Earnout liability (5) | 33.8 | — | |||
Available-for-sale (6) | 1.4 | 1.4 |
Fair value measurement at October 31, 2016 | Fair value measurement at October 31, 2015 | ||||||||||||||||||||||
Assets measured at fair value | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Available-for-sale securities | 1.4 | — | — | 1.4 | 1.4 | — | — | 1.4 | |||||||||||||||
Held-for-trading securities | — | 1.4 | — | 1.4 | — | 1.7 | — | 1.7 | |||||||||||||||
Total assets | 1.4 | 1.4 | — | 2.8 | 1.4 | 1.7 | — | 3.1 |
Fair value measurement at October 31, 2016 | Fair value measurement at October 31, 2015 | ||||||||||||||||||||||
Liabilities measured at fair value | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Foreign exchange forward contracts | — | 2.7 | — | 2.7 | — | 7.6 | — | 7.6 | |||||||||||||||
Earnout liability | — | — | 33.8 | 33.8 | — | — | — | — | |||||||||||||||
Total liabilities | — | 2.7 | 33.8 | 36.5 | — | 7.6 | — | 7.6 |
Assets as of October 31, 2016 | Assets as of October 31, 2015 | ||||||
Balance sheet location | Fair value | Balance sheet location | Fair value | ||||
$ | $ | ||||||
Available-for-sale securities | Investments | 1.4 | Investments | 1.4 | |||
Held-for-trade securities | Investments | 1.4 | Investments | 1.7 | |||
Total | 2.8 | 3.1 |
Liabilities as of October 31, 2016 | Liabilities as of October 31, 2015 | ||||||
Balance sheet location | Fair value | Balance sheet location | Fair value | ||||
$ | $ | ||||||
Foreign exchange forward contracts | Accounts payable and accrued liabilities | 2.7 | Accounts payable and accrued liabilities | 7.0 | |||
Foreign exchange forward contracts | Other long-term liabilities | — | Other long-term liabilities | 0.6 | |||
Earnout liability | Other long-term liabilities | 33.8 | Other long-term liabilities | — | |||
Total | 36.5 | 7.6 |
Asset impairments | 2016 | 2015 | 2014 | Valuation Technique | Input levels | Reference | |||
$ | $ | $ | |||||||
In-process research and development | — | 0.9 | 9.7 | Income approach | Level 3 | Note 5 | |||
Land | — | 3.2 | — | Market approach | Level 3 | Note 6 | |||
Total | — | 4.1 | 9.7 |
Fair Value | |||||||||||
Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||
$ | $ | $ | $ | $ | |||||||
Long-term debt, including current portion | — | 2,156.8 | — | 2,156.8 | 2,119.0 |
Fair Value | |||||||||||
Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||
$ | $ | $ | $ | $ | |||||||
Long-term debt, including current portion | — | 2,675.8 | — | 2,675.8 | 2,667.9 |
Total | ||
$ | ||
Balance at October 31, 2015 | — | |
Liability assumed from parent | 36.0 | |
Total (gains) losses for the period: | ||
Gain from revised earnout definition | (4.9 | ) |
Change in fair value | 2.7 | |
Balance at October 31, 2016 | 33.8 |
Fiscal years ended October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Foreign exchange gain for the period from net investment hedge | 1.1 | 42.1 | |||
Release of ineffective portion of net investment hedge to consolidated statement of operations | (0.3 | ) | (1.3 | ) | |
Net investment hedge gain from sale of Italian subsidiary reclassified to consolidated statement of operations | — | (3.9 | ) | ||
Net gain to other comprehensive income (loss) for the period related to net investment hedge | 0.8 | 36.9 |
Fiscal years ended October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Foreign exchange gain (loss) for the period from long-term intercompany loan revaluation | 0.5 | (6.5 | ) | ||
Gains reclassified to consolidated statements of operations | (0.6 | ) | — | ||
Net loss to other comprehensive income (loss) for the period related to foreign exchange | (0.1 | ) | (6.5 | ) |
As of and for the year ended October 31, 2016 | |||||||||||||||||
DPS | PDS | DSS | Other | Intersegment Eliminations | Total | ||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Revenues | 1,152.9 | 219.3 | 494.9 | — | (0.4 | ) | 1,866.7 | ||||||||||
Adjusted EBITDA | 295.9 | 73.2 | 125.8 | (100.3 | ) | 394.6 | |||||||||||
Depreciation and amortization | 61.4 | 6.1 | 43.2 | 2.3 | 113.0 | ||||||||||||
Capital expenditures | 123.9 | 26.3 | 41.7 | 13.9 | 205.8 |
As of and for the year ended October 31, 2015 | |||||||||||||||||
DPS | PDS | DSS | Other | Intersegment Eliminations | Total | ||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Revenues | 1,144.2 | 198.7 | 395.3 | 100.3 | (64.3 | ) | 1,774.2 | ||||||||||
Adjusted EBITDA | 295.1 | 68.5 | 83.0 | (72.0 | ) | 374.6 | |||||||||||
Depreciation and amortization | 60.7 | 4.6 | 38.1 | 4.4 | 107.8 | ||||||||||||
Impairment charge | 0.9 | — | 3.2 | — | 4.1 | ||||||||||||
Capital expenditures | 98.6 | 20.2 | 24.5 | 3.6 | 146.9 |
As of and for the year ended October 31, 2014 | |||||||||||||||||
DPS | PDS | DSS | Other | Intersegment Eliminations | Total | ||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Revenues | 1,088.6 | 165.2 | 188.9 | 117.1 | (76.3 | ) | 1,483.5 | ||||||||||
Adjusted EBITDA | 230.5 | 51.2 | 4.9 | (38.3 | ) | 248.3 | |||||||||||
Depreciation and amortization | 54.7 | 4.0 | 16.0 | 4.8 | 79.5 | ||||||||||||
Impairment charge | 4.3 | — | — | 5.4 | 9.7 | ||||||||||||
Capital expenditures | 65.3 | 9.3 | 2.3 | 4.6 | 81.5 |
2016 | 2015 | 2014 | ||||||
$ | $ | $ | ||||||
Total Adjusted EBITDA | 394.6 | 374.6 | 248.3 | |||||
Depreciation and amortization | (113.0 | ) | (107.8 | ) | (79.5 | ) | ||
Repositioning expenses (1) | (9.2 | ) | (25.1 | ) | (51.7 | ) | ||
Acquisition and integration costs (2) | (16.6 | ) | (22.3 | ) | (60.3 | ) | ||
Interest expense, net | (160.4 | ) | (141.8 | ) | (90.5 | ) | ||
Impairment charge | — | (4.1 | ) | (9.7 | ) | |||
Benefit from (provision for) income taxes | 24.0 | (0.3 | ) | (4.3 | ) | |||
Refinancing expenses | (21.6 | ) | (3.7 | ) | (28.2 | ) | ||
Operational initiatives related consulting costs | (4.2 | ) | (13.0 | ) | (10.1 | ) | ||
IPO costs | (2.0 | ) | (4.5 | ) | — | |||
Acquisition-related litigation expenses | (4.0 | ) | (12.7 | ) | (10.2 | ) | ||
Stock-based compensation expense | (21.6 | ) | (13.9 | ) | (10.0 | ) | ||
Remediation costs | (32.8 | ) | (2.6 | ) | — | |||
Purchase accounting adjustments | — | — | (11.4 | ) | ||||
Gain on sale of investment | — | 16.2 | — | |||||
Other | 1.6 | (4.1 | ) | 0.5 | ||||
Net income (loss) from continuing operations | 34.8 | 34.9 | (117.1 | ) |
As of and for the year ended October 31, 2016 | ||||||||||||||
Canada | US* | Europe | Other** | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Revenues | 48.8 | 1,214.2 | 523.2 | 80.5 | 1,866.7 | |||||||||
Capital Assets | 100.3 | 511.4 | 356.7 | 15.2 | 983.6 | |||||||||
Goodwill | 2.6 | 269.4 | 7.4 | 2.2 | 281.6 | |||||||||
Intangible Assets | — | 231.6 | 15.4 | 0.6 | 247.6 |
As of and for the year ended October 31, 2015 | ||||||||||||||
Canada | US* | Europe | Other** | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Revenues | 39.7 | 1,127.6 | 497.4 | 109.5 | 1,774.2 | |||||||||
Capital Assets | 97.2 | 450.0 | 313.6 | 16.2 | 877.0 | |||||||||
Impairment | — | 0.9 | 3.2 | — | 4.1 | |||||||||
Goodwill | 2.6 | 272.4 | 7.4 | 2.0 | 284.4 | |||||||||
Intangible Assets | — | 257.2 | 17.9 | 0.7 | 275.8 |
As of and for the year ended October 31, 2014 | ||||||||||||||
Canada** | US* | Europe | Other** | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Revenues | 28.6 | 898.8 | 492.2 | 63.9 | 1,483.5 | |||||||||
Capital assets | 106.7 | 395.3 | 323.1 | 22.2 | 847.3 | |||||||||
Impairment | — | 9.7 | — | — | 9.7 | |||||||||
Goodwill | 3.1 | 179.9 | 6.5 | 2.5 | 192.0 | |||||||||
Intangible assets | — | 225.8 | 23.3 | 1.0 | 250.1 |
As of and for the year ended October 31, 2016 | ||||||||||||||
DPS | PDS | DSS | Other | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Total repositioning liability at October 31, 2015 | 22.9 | |||||||||||||
Employee-related expenses | 5.7 | — | (0.5 | ) | — | 5.2 | ||||||||
Contract termination costs | 1.8 | — | — | — | 1.8 | |||||||||
Other | 0.3 | — | — | — | 0.3 | |||||||||
Total expenses | 7.8 | — | (0.5 | ) | — | 7.3 | ||||||||
Repositioning expenses paid | (24.4 | ) | ||||||||||||
Foreign exchange | (0.4 | ) | ||||||||||||
Total repositioning liability at October 31, 2016 | 5.4 |
As of and for the year ended October 31, 2015 | ||||||||||||||
DPS | PDS | DSS | Other | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Total repositioning liability at October 31, 2014 | 46.6 | |||||||||||||
Employee-related expenses | 3.8 | — | 3.1 | (0.9 | ) | 6.0 | ||||||||
Consulting, professional and project management costs | 6.0 | — | 11.7 | 1.4 | 19.1 | |||||||||
Total expenses | 9.8 | — | 14.8 | 0.5 | 25.1 | |||||||||
Expenses capitalized in capital assets | 2.4 | |||||||||||||
Repositioning expenses paid | (45.5 | ) | ||||||||||||
Foreign exchange | (5.7 | ) | ||||||||||||
Total repositioning liability at October 31, 2015 | 22.9 |
As of and for the year ended October 31, 2014 | ||||||||||||||
DPS | PDS | DSS | Other | Total | ||||||||||
$ | $ | $ | $ | $ | ||||||||||
Total repositioning liability at October 31, 2013 | 7.7 | |||||||||||||
Employee-related expenses | 13.4 | 0.5 | 27.2 | 2.0 | 43.1 | |||||||||
Consulting, professional and project management costs | 1.5 | — | 6.8 | 0.3 | 8.6 | |||||||||
Total expenses | 14.9 | 0.5 | 34.0 | 2.3 | 51.7 | |||||||||
Repositioning expenses paid, net of liabilities acquired | (12.8 | ) | ||||||||||||
Total repositioning liability at October 31, 2014 | 46.6 |
$ | ||
2017 | 6.4 | |
2018 | 5.4 | |
2019 | 4.7 | |
2020 | 3.8 | |
2021 | 3.4 | |
Thereafter | 2.2 | |
Total payments | 25.9 |
Fiscal years ended October 31, | ||||||||
Revenues/Expenses | 2016 | 2015 | 2014 | |||||
$ | $ | $ | ||||||
JLL Partners Expenses | 0.3 | 0.3 | 0.6 | |||||
DSM Revenues | 3.7 | 0.1 | 1.3 | |||||
DSM Expenses | 8.3 | 25.3 | 30.3 | |||||
Banner Life Sciences Revenues | 10.4 | 17.6 | — |
Balance as of October 31, | ||||||||
Accounts Receivable/Payable Balances | 2016 | 2015 | 2014 | |||||
$ | $ | $ | ||||||
DSM Accounts Receivable | 0.4 | 2.7 | 11.7 | |||||
DSM Accounts Payable | 0.2 | 4.5 | 10.9 | |||||
Banner Life Sciences Accounts Receivable | 1.1 | 1.7 | 1.7 |
Values as of | |||||
Equity Method Investment Values | October 31, 2016 | October 31, 2015 | |||
$ | $ | ||||
Banner Life Sciences | 2.9 | 5.0 | |||
Percivia | 5.7 | 6.7 | |||
Chemiepark | 0.1 | 0.1 | |||
Total | 8.7 | 11.8 |
Fiscal years ended October 31, | |||||
Equity Method Gain/(Loss) | 2016 | 2015 | |||
$ | $ | ||||
Banner Life Sciences | 0.3 | — | |||
Percivia | 0.2 | 0.4 | |||
BSP Pharmaceuticals | — | 0.8 | |||
Total | 0.5 | 1.2 |
Fiscal years ended October 31, | ||||||||
Income (loss) from continuing operations before income taxes: | 2016 | 2015 | 2014 | |||||
$ | $ | $ | ||||||
Netherlands (domestic) | (75.8 | ) | (86.6 | ) | (83.2 | ) | ||
Europe | (22.9 | ) | 42.8 | (13.4 | ) | |||
North America | 108.9 | 78.3 | (15.8 | ) | ||||
Other | 0.6 | 0.7 | (0.4 | ) | ||||
10.8 | 35.2 | (112.8 | ) |
Fiscal years ended October 31, | ||||||||
(Benefit from) provision for income taxes: | 2016 | 2015 | 2014 | |||||
$ | $ | $ | ||||||
Current: | ||||||||
Netherlands (domestic) | 1.6 | 0.9 | 0.5 | |||||
Europe | 5.5 | 11.7 | 18.6 | |||||
North America | 9.7 | (3.0 | ) | 0.3 | ||||
Other | 0.5 | 0.7 | 0.1 | |||||
Total Current | 17.3 | 10.3 | 19.5 | |||||
Deferred: | ||||||||
Netherlands (domestic) | (0.3 | ) | (0.3 | ) | 0.3 | |||
Europe | (19.6 | ) | (4.6 | ) | (4.1 | ) | ||
North America | (21.2 | ) | (4.7 | ) | (11.3 | ) | ||
Other | (0.2 | ) | (0.4 | ) | (0.1 | ) | ||
Total Deferred | (41.3 | ) | (10.0 | ) | (15.2 | ) | ||
Total (benefit from) provision for income taxes | (24.0 | ) | 0.3 | 4.3 |
Fiscal years ended October 31, | |||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||
$ | % | $ | % | $ | % | ||||||||||||
Expected provision for (benefit from) income taxes | 2.7 | 25.0 | % | 8.8 | 25.0 | % | (28.2 | ) | 25.0 | % | |||||||
Foreign earnings taxed at rates different than statutory | (7.4 | ) | (68.5 | )% | 0.4 | 1.1 | % | (7.3 | ) | 6.5 | % | ||||||
Effect of foreign currency fluctuations | (1.3 | ) | (12.0 | )% | (33.5 | ) | (95.2 | )% | (14.9 | ) | 13.2 | % | |||||
State and local taxes | 3.8 | 35.2 | % | (10.0 | ) | (28.4 | )% | (0.8 | ) | 0.7 | % | ||||||
Uncertain tax positions | 3.2 | 29.6 | % | (1.1 | ) | (3.1 | )% | 6.5 | (5.8 | )% | |||||||
Tax credits | (3.8 | ) | (35.2 | )% | (2.9 | ) | (8.2 | )% | (4.5 | ) | 4.0 | % | |||||
Disallowed or tax exempt interest | 1.9 | 17.6 | % | 0.5 | 1.4 | % | 0.6 | (0.5 | )% | ||||||||
Share based payments | 4.6 | 42.6 | % | 3.5 | 9.9 | % | (0.5 | ) | 0.4 | % | |||||||
Net change in valuation allowance | (27.1 | ) | (250.9 | )% | 35.1 | 99.7 | % | 52.3 | (46.4 | )% | |||||||
Other | (0.6 | ) | (5.6 | )% | (0.5 | ) | (1.4 | )% | 1.1 | (1.0 | )% | ||||||
(Benefit from) provision for income taxes | (24.0 | ) | (222.2 | )% | 0.3 | 0.9 | % | 4.3 | (3.8 | )% |
As of October 31, | |||||
2016 | 2015 | ||||
$ | $ | ||||
Net operating loss carry-forward | 186.8 | 158.2 | |||
Accounting provisions not currently deductible for tax purposes | 42.3 | 30.0 | |||
Unrealized foreign exchange losses (gains) on debt | 35.5 | 37.6 | |||
Investment tax credits and other credits | 19.3 | 25.2 | |||
Deferred revenue | 12.5 | 10.3 | |||
Unclaimed research and development expenditures | 4.5 | 9.9 | |||
Deferred financing costs | 3.0 | 7.0 | |||
Partnership basis difference | (10.5 | ) | (13.3 | ) | |
Tax depreciation in excess of book depreciation | (49.5 | ) | (31.2 | ) | |
Purchased intangibles | (55.0 | ) | (59.1 | ) | |
Valuation allowance | (226.2 | ) | (253.1 | ) | |
(37.3 | ) | (78.5 | ) |
$ | ||
Balance at October 31, 2013 | 8.2 | |
Increase based on tax positions taken in the current year | 2.2 | |
Reductions related to lapse of applicable statute of limitations | (0.4 | ) |
Balance at October 31, 2014 | 10.0 | |
Increase based to tax positions taken in a prior year | 3.3 | |
Decrease based on tax positions taken in a prior year | (5.7 | ) |
Increase based on tax positions taken in the current year | 4.4 | |
Balance at October 31, 2015 | 12.0 | |
Increase based to tax positions taken in a prior year | 3.4 | |
Decrease based on tax positions taken in a prior year | (0.8 | ) |
Increase based on tax positions taken in the current year | 0.9 | |
Balance at October 31, 2016 | 15.5 |
2016 | 2015 | 2014 | ||||||
$ | $ | $ | ||||||
Accounts receivable | (87.6 | ) | (28.1 | ) | (47.9 | ) | ||
Inventories | (24.9 | ) | (25.8 | ) | 9.4 | |||
Prepaid expenses and other | (5.6 | ) | 2.4 | (2.0 | ) | |||
Accounts payable and accrued liabilities | (52.2 | ) | 30.5 | 15.7 | ||||
Income taxes receivable/payable | (5.6 | ) | (5.6 | ) | (1.2 | ) | ||
(175.9 | ) | (26.6 | ) | (26.0 | ) |
2016 | 2015 | 2014 | ||||||
$ | $ | $ | ||||||
Assumption of earnout liability from the Partnership | 36.0 | — | — | |||||
Distribution to member in the form of a note payable (1) | 51.0 | — | — | |||||
Increase in capital lease obligations (2) | 0.8 | — | 0.8 | |||||
Partnership units issued and value contributed to Patheon from the Irix acquisition | — | 1.0 | — | |||||
Spinoff of subsidiary | — | 34.1 | — | |||||
Partnership units issued and value contributed to Patheon from the Agere acquisition | — | 6.8 | — | |||||
DSM contribution of DPP for a 49% interest in Patheon | — | — | 480.4 | |||||
Contribution of DSM preferred interest in the Partnership, net | — | — | 49.9 | |||||
Contribution of earnout to DSM related to Biologics business | — | — | 3.5 | |||||
Management option awards canceled upon change in control and profit units issued (3) | — | — | 30.3 |
Quarter Ended | ||||||||||||||||
January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | January 31, 2016 | April 30, 2016 | July 31, 2016 | October 31, 2016 | |||||||||
(in millions of U.S. dollars) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||
Revenues | 426.0 | 437.9 | 448.3 | 462.0 | 405.9 | 468.6 | 482.0 | 510.2 | ||||||||
Gross profit | 120.9 | 138.3 | 150.1 | 149.2 | 98.9 | 138.3 | 149.2 | 159.2 | ||||||||
Net (loss) income from continuing operations | (13.6 | ) | 6.5 | 1.2 | 40.8 | (20.0 | ) | 1.9 | 8.8 | 44.1 | ||||||
Net income (loss) from discontinued operations | 7.4 | 12.3 | (22.8 | ) | 106.6 | (2.1 | ) | (1.0 | ) | — | — | |||||
Net (loss) income | (6.2 | ) | 18.8 | (21.6 | ) | 147.4 | (22.1 | ) | 0.9 | 8.8 | 44.1 | |||||
Adjusted EBITDA | 75.3 | 89 | 104.2 | 106.1 | 59 | 98 | 113.7 | 123.9 | ||||||||
Weighted Average Shares - Basic | 115.6 | 115.6 | 115.6 | 115.6 | 115.6 | 115.6 | 119.2 | 145.1 | ||||||||
Weighted Average Shares - Diluted | 115.6 | 115.6 | 115.6 | 115.6 | 115.6 | 115.6 | 120 | 145.8 | ||||||||
Basic (loss) income per share (1) | ||||||||||||||||
From continuing operations | (0.12 | ) | 0.06 | 0.01 | 0.35 | (0.17 | ) | 0.02 | 0.07 | 0.30 | ||||||
From discontinued operations | 0.06 | 0.11 | (0.20 | ) | 0.92 | (0.02 | ) | (0.01 | ) | — | — | |||||
Diluted (loss) income per share (1) | ||||||||||||||||
From continuing operations | (0.12 | ) | 0.06 | 0.01 | 0.35 | (0.17 | ) | 0.02 | 0.07 | 0.30 | ||||||
From discontinued operations | 0.06 | 0.11 | (0.20 | ) | 0.92 | (0.02 | ) | (0.01 | ) | — | — |
Exhibit | Incorporated by Reference | Filed | |||||
Number | Exhibit Description | Form | Exhibit | Filing Date | Herewith | ||
3.1 | Amended and Restated Articles of Association of Patheon N.V., dated as of July 26, 2016 | 8-K | 3.1 | 7/26/2016 | |||
10.1 | Indenture, dated as of February 5, 2014, between DPx Holdings B.V. and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.1 | 7/29/2016 | |||
10.2 | Second Supplemental Indenture, dated March 11, 2014, to the Indenture dated as of February 5, 2014, between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.3 | 7/29/2016 | |||
10.3 | Third Supplemental Indenture, dated November 17, 2014, to the Indenture dated as of February 5, 2014, between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.4 | 7/29/2016 | |||
10.4 | Fourth Supplemental Indenture, dated November 17, 2014, to the Indenture dated as of February 5, 2014, between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.5 | 7/29/2016 | |||
10.5 | Fifth Supplemental Indenture, dated March 31, 2015, to the Indenture dated as of February 5, 2014, between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.6 | 7/29/2016 | |||
10.6 | Sixth Supplemental Indenture, dated March 31, 2015, to the Indenture dated as of February 5, 2014, between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.7 | 7/29/2016 | |||
10.7 | Seventh Supplemental Indenture, dated January 14, 2016, to the Indenture dated as of February 5, 2014 between DPx Holdings B.V., the guarantors named therein and Wells Fargo Bank, National Association, as trustee | S-1/A | 10.8 | 2/5/2016 | |||
10.8 | Credit Agreement, dated as of March 11, 2014, among Patheon N.V., the lending institutions from time to time party thereto, UBS AG Stamford branch, as administrative agent, collateral agent, LC Issuer and Swing Line lender, JPMorgan Chase Bank, N.A, as syndication agent and an LC Issuer, Jeffries Finance LLC, KeyBank National Association and Morgan Stanley Senior Funding, Inc., as co-documentation agents, UBS AG Stamford branch, J.P. Morgan Securities LLC, Jeffries Finance LLC, KeyBank National Association and Morgan Stanley Senior Funding, Inc., as joint Lead-arrangers; UBS Securities LLC, J.P. Morgan Securities LLC, Barclays Bank PLC, Jeffries Finance LLC, KBCM Bridge LLC, Morgan Stanley Senior Funding, Inc. and Sumitomo Mitsui Banking Corp., as joint bookrunners | S-1/A | 10.9 | 9/3/2015 | |||
10.9 | First Amendment to the Credit Agreement, dated September 29, 2014 | S-1/A | 10.10 | 9/3/2015 | |||
10.10 | Second Amendment to the Credit Agreement, dated March 31, 2015 | S-1/A | 10.11 | 9/3/2015 | |||
10.11 | Third Amendment to the Credit Agreement, dated January 8, 2016 | S-1/A | 10.14 | 2/5/2016 | |||
10.12 | † | Amended and Restated Executive Employment Agreement dated February 7, 2011, between Patheon Inc. and James Mullen | S-1/A | 10.14 | 9/3/2015 | ||
10.13 | † | Executive Employment Agreement dated November 1, 2014, between Patheon Pharmaceutical Services Inc. and Eric Sherbet | S-1/A | 10.18 | 2/5/2016 | ||
10.14 | † | Executive Employment Agreement dated January 25, 2011, between Patheon Pharmaceutical Services Inc. and Stuart Grant | S-1/A | 10.17 | 9/3/2015 |
10.15 | † | Amendment to Executive Employment Agreement dated May 19, 2014, between Patheon Pharmaceutical Services Inc. and Stuart Grant | S-1/A | 10.18 | 9/3/2015 | ||
10.16 | † | Executive Employment Agreement dated July 24, 2013, between Patheon Pharmaceutical Services Inc.. and Lucas Utiger | S-1/A | 10.22 | 2/5/2016 | ||
10.17 | † | Amendment to Executive Employment Agreement dated March 4, 2014, between Patheon Pharmaceutical Services Inc. and Lucas Utiger | S-1/A | 10.23 | 2/5/2016 | ||
10.18 | Biologics Agreement, dated January 29, 2016, among Patheon N.V. and JLL Patheon Co-Investment L.P., Koninklijke DSM N.V. and JLL/Delta Patheon Holdings, L.P. | S-1/A | 10.25 | 2/5/2016 | |||
10.19 | Shareholders' Agreement, dated July 20, 2016, among the Company, JLL Patheon Co-Investment Fund, L.P., Koninklijke DSM N.V., JLL/Delta Patheon Holdings, L.P., Patheon Holdco Coöperatief U.A., JLL Associates V (Patheon), L.P., JLL Partners Fund V (New Patheon), L.P. and JLL Partners Fund VI (Patheon), L.P. | 8-K | 10.1 | 7/26/2016 | |||
10.20 | † | Patheon N.V. 2016 Omnibus Incentive Plan | 8-K | 10.2 | 7/26/2016 | ||
10.21 | † | Transition and Retirement Agreement, dated as of December 8, 2016, by and between Patheon Pharmaceutical Services, Inc., and Stuart Grant | 8-K | 10.1 | 12/14/2016 | ||
21.1 | Subsidiaries of Patheon N.V. | * | |||||
23.1 | Consent of Ernst & Young LLP, independent registered public accountants | * | |||||
31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | |||||
31.2 | Certification of Periodic Report by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | |||||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * | |||||
101.INS | XBRL Instance Document | * | |||||
101.SCH | XBRL Taxonomy Extension Schema Document | * | |||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | * | |||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | |||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | * | |||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | * |
/s/ Stuart Grant | Chief Financial Officer | December 23, 2016 |
Stuart Grant | Principal Financial Officer | |
/s/ Dean Wilson | Vice President, Corporate Controller | December 23, 2016 |
Dean Wilson | Principal Accounting Officer | |
/s/ Paul S. Levy | Chairman and Non-Executive Director | December 23, 2016 |
Paul S. Levy | ||
/s/ Daniel Agroskin | Non-Executive Director | December 23, 2016 |
Daniel Agroskin | ||
/s/ Stephan B. Tanda | Non-Executive Director | December 23, 2016 |
Stephan B. Tanda | ||
/s/ Hugh C. Welsh | Non-Executive Director | December 23, 2016 |
Hugh C. Welsh | ||
/s/ Philip Eykerman | Non-Executive Director | December 23, 2016 |
Philip Eykerman | ||
/s/ William B. Hayes | Non-Executive Director | December 23, 2016 |
William B. Hayes | ||
/s/ Hans Peter Hasler | Non-Executive Director | December 23, 2016 |
Hans Peter Hasler | ||
/s/ Pamela Daley | Non-Executive Director | December 23, 2016 |
Pamela Daley | ||
/s/ Jeffrey P. McMullen | Non-Executive Director | December 23, 2016 |
Jeffrey P. McMullen | ||
/s/ Gary P. Pisano | Non-Executive Director | December 23, 2016 |
Gary P. Pisano |
Legal Name | Jurisdiction of Incorporation | |
JLL/Delta Dutch Holdco II B.V. | Netherlands | |
JLL/Delta Dutch Pledgeco B.V. | Netherlands | |
DPx Holdings B.V. | Netherlands | |
JLL/Delta Dutch Sub B.V. | Netherlands | |
Patheon Inc. | Canada | |
Patheon Calculus Merger LLC | Delaware | |
Patheon U.S. Holdings Inc. | Delaware | |
Patheon Pharmaceuticals Services Inc. | Delaware | |
Patheon Pharmaceuticals Inc. | Delaware | |
Patheon Banner U.S. Holdings Inc. | Delaware | |
Banner Pharmacaps Inc. | Delaware | |
Pharmacaps Mexicana SA de CV | Mexico | |
Patheon Puerto Rico, Inc. | Puerto Rico | |
Patheon Puerto Rico Acquisitions Corporation | Puerto Rico | |
CEPH International Corporation | Puerto Rico | |
Patheon KK | Japan | |
Patheon U.S. Holdings LLC | Delaware | |
Patheon Finance LLC | Delaware | |
Patheon Cooperatief U.A. | Netherlands | |
Patheon Softgels B.V. | Netherlands | |
Patheon B.V. | Netherlands | |
Patheon UK Limited | England | |
Patheon Holdings SAS | France | |
Patheon France SAS | France | |
Patheon International AG | Switzerland | |
Patheon Italia S.p.A. | Italy | |
Patheon Holdings II B.V. | Netherlands | |
Patheon Biologics Australia Pty Ltd | Australia | |
Patheon Biologics B.V. | Netherlands | |
DPx Fine Chemicals Regensburg GmbH | Germany | |
DPx Life Science Products International GmbH | Austria | |
DPx Fine Chemicals GmbH | Austria | |
DPx Fine Chemicals Austria GmbH & CoKG | Austria | |
DSM Pharma Chemicals Venlo B.V. | Netherlands | |
DPI Newco LLC | Delaware | |
REP GBP I-B Blocker, Inc. | Delaware | |
Patheon Biologics LLC | Delaware | |
Patheon Biologics (NJ) LLC | Delaware | |
Patheon Development Services Inc. | Delaware | |
Patheon API Services Inc. | South Carolina | |
Patheon API Manufacturing Inc. | South Carolina | |
Patheon Manufacturing Services LLC | Delaware | |
DSM Pharmaceutical Products, Inc. | Delaware |
1. | I have reviewed this Annual Report on Form 10-K of Patheon N.V.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this Annual Report on Form 10-K of Patheon N.V.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Dec. 23, 2016 |
Apr. 29, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Patheon N.V. | ||
Entity Central Index Key | 0001643848 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 145,074,042 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets (Parenthetical) |
Oct. 31, 2016
€ / shares
shares
|
---|---|
Statement of Financial Position [Abstract] | |
Common stock, shares issued (in shares) | 145,074,042 |
Common stock, shares outstanding (in shares) | 145,074,042 |
Common stock, shares authorized (in shares) | 500,000,000 |
Common stock, par value (in dollars per share) | € / shares | € 0.01 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
||||||
Statement of Comprehensive Income [Abstract] | ||||||||||||||||
Net income (loss) | $ 44.1 | $ 8.8 | $ 0.9 | $ (22.1) | $ 147.4 | $ (21.6) | $ 18.8 | $ (6.2) | $ 31.7 | $ 138.4 | $ (119.2) | |||||
Other comprehensive income (loss), net of income taxes: | ||||||||||||||||
Foreign currency translation adjustments | (3.3) | (76.5) | (56.5) | |||||||||||||
Net gain related to net investment hedge | 0.8 | 40.8 | 33.0 | |||||||||||||
Net loss on intra-entity foreign currency transactions | (0.1) | (6.5) | (4.8) | |||||||||||||
Foreign currency loss recognized in net income from sale of subsidiaries | 0.0 | 6.7 | 0.0 | |||||||||||||
Change in value of investments designated as available for sale | 0.0 | 0.0 | 0.1 | |||||||||||||
Change in value of derivatives designated as foreign currency cash flow hedges | (5.5) | (14.6) | (9.2) | |||||||||||||
Losses from foreign currency hedges reclassified to consolidated statement of operations | [1] | 9.2 | 13.9 | 6.5 | ||||||||||||
Net change in minimum pension liability | [2] | (26.7) | 1.3 | (21.5) | ||||||||||||
Comprehensive income (loss) | $ 6.1 | $ 103.5 | $ (171.6) | |||||||||||||
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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) |
12 Months Ended | ||
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Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Income tax expense, foreign currency hedge reclassification | $ 1,200,000 | $ 0 | $ 0 |
Net change in minimum pension liability, tax | $ 1,000,000 | $ 100,000 | $ (100,000) |
Consolidated Statements of Cash Flows - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Operating activities | |||
Net income (loss) from continuing operations | $ 34.8 | $ 34.9 | $ (117.1) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 113.0 | 107.8 | 79.5 |
Increase in deferred revenues | 356.5 | 262.7 | 82.8 |
Amortization of deferred revenues | (263.8) | (221.3) | (44.4) |
Non-cash interest | 25.3 | 16.6 | 24.8 |
Change in other long-term assets and liabilities | (13.3) | (19.3) | (9.9) |
Deferred income taxes | (37.0) | (10.0) | (15.2) |
Stock-based compensation | 21.6 | 13.9 | 10.0 |
Impairment | 0.0 | 4.1 | 9.7 |
Payment of original issue discount | 0.0 | 0.0 | (17.3) |
Excess tax benefit from share-based payment arrangements | 0.0 | (7.8) | 0.0 |
Gain on sale of third party investment | 0.0 | (16.2) | 0.0 |
Return on capital from equity investment | 1.3 | 0.0 | 0.0 |
Foreign exchange (gain) loss on debt | (0.3) | (1.6) | 0.3 |
Other | (1.4) | 4.6 | (2.1) |
Net change in non-cash working capital balances | (175.9) | (26.6) | (26.0) |
Cash provided by (used in) operating activities of continuing operations | 60.8 | 141.8 | (24.9) |
Cash (used in) provided by operating activities of discontinued operations | (2.9) | 43.2 | 49.9 |
Cash provided by operating activities | 57.9 | 185.0 | 25.0 |
Investing activities | |||
Additions to capital assets | (205.8) | (146.9) | (81.5) |
Proceeds from sale of capital assets | 0.1 | 6.5 | 4.6 |
Equity investment in related party | 0.0 | (5.0) | 0.0 |
Proceeds on sale of third party investment | 0.0 | 21.4 | 0.0 |
Return of capital from equity investment | 2.3 | 0.0 | 1.3 |
Acquisitions, net of cash acquired | 0.0 | (170.2) | (379.8) |
Cash used in investing activities of continuing operations | (203.4) | (294.2) | (455.4) |
Cash (used in) provided by investing activities of discontinued operations | (3.3) | 205.9 | (11.1) |
Cash used in investing activities | (206.7) | (88.3) | (466.5) |
Financing activities | |||
Proceeds from long-term borrowings | 40.8 | 804.2 | 2,092.0 |
Repayment of debt | (591.8) | (92.9) | (673.9) |
Redemption of note payable issued as a distribution to member | (51.0) | 0.0 | 0.0 |
Increase in deferred financing costs | 0.0 | (19.5) | (60.9) |
Cash paid to acquire Patheon shares, net of amounts reinvested in Patheon Holdings | 0.0 | 0.0 | (889.2) |
Capital contribution | 1.2 | 0.0 | 0.0 |
Proceeds on issuance of ordinary shares, net | 584.8 | 0.0 | 0.0 |
Excess tax benefit from share-based payment arrangements | 0.0 | 7.8 | 0.0 |
Cash distribution to members from proceeds obtained from the issuance of the Senior PIK Toggle Notes | 0.0 | (538.0) | 0.0 |
Cash distribution to members for spinoff of subsidiary | 0.0 | (12.4) | 0.0 |
Cash (used in) provided by financing activities of continuing operations | (16.0) | 149.2 | 468.0 |
Cash used in financing activities of discontinued operations | 0.0 | (1.0) | (0.1) |
Cash (used in) provided by financing activities | (16.0) | 148.2 | 467.9 |
Effect of exchange rate changes on cash and cash equivalents | 1.1 | (0.8) | (3.4) |
Net change in cash and cash equivalents during the period | (163.7) | 244.1 | 23.0 |
Cash and cash equivalents, beginning of period | 328.7 | 84.6 | 61.6 |
Cash and cash equivalents, end of period | 165.0 | 328.7 | 84.6 |
Less: Cash and cash equivalents of discontinued operations, end of period | 0.0 | 0.0 | 11.2 |
Cash and cash equivalents of continuing operations, end of period | 165.0 | 328.7 | 73.4 |
Supplemental cash flow information | |||
Interest paid (including payment of original issue discount in fiscal 2014) | 168.1 | 109.9 | 81.5 |
Income taxes paid, net of income taxes received | $ 14.5 | $ 17.6 | $ 19.7 |
The Company |
12 Months Ended |
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Oct. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | THE COMPANY Patheon N.V. was formed on December 24, 2013, as Patheon Coöperatief U.A., a Dutch cooperative with excluded liability for its members (coöperative met uitgesloten aansparkelijkheid) and a wholly owned indirect subsidiary of JLL/Delta Patheon Holdings, L.P. (the “Partnership”), which in turn is owned 51% by JLL Patheon Co-Investment Fund L.P. ("JLL") and 49% by Koninklijke DSM N.V. ("DSM"). On June 3, 2016, the Company was converted into a Dutch limited liability company (naamloze vennootschap) and changed its name to Patheon N.V. Unless the context otherwise indicates, references to "we," "us," "our," "Patheon" and the "Company" refer to Patheon N.V. On July 26, 2016, we completed an initial public offering ("IPO") of 29,464,286 ordinary shares at a public offering price of $21.00 per share. In connection with the IPO, additional ordinary shares of the Company were distributed directly to JLL and DSM with respect to their interest in the Partnership, of which 4,761,905 ordinary shares were sold by DSM as part of the IPO. Ordinary shares owned by the public constitute approximately 24% of the outstanding ordinary shares. Through their ordinary shares, JLL, DSM and the Partnership own approximately 38%, 34% and 4% of the Company, respectively. The Partnership's ownership consists of shares held for the benefit of certain employees pursuant to a management incentive plan. See Note 10 for further discussion. We are a contract development and manufacturing organization ("CDMO") that offers a comprehensive range of services for pharmaceutical and biopharmaceutical companies. The Company utilizes a network of facilities across North America, Europe, Asia and Australia to offer a simplified, end-to-end supply chain solution. We operate three principal lines of business: Drug Product Services, Pharmaceutical Development Services and Drug Substance Services. Drug Product Services provides manufacturing and packaging for approved prescription, over-the-counter, and nutritional products. Pharmaceutical Development Services provides a wide spectrum of advanced formulation, production, and technical services from the early stages of a product's development to regulatory approval and beyond, as well as for new formulations of approved products for life cycle extension. Drug Substance Services provides |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect: the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the consolidated financial statements; and the reported amounts of revenue and expenses in the reporting period. Actual results could differ from those estimates. Segment information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as the components of an enterprise, with separate financial information available, that are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s four operating segments are: North America Drug Product Services, or North America DPS, Europe Drug Product Services, or Europe DPS, Pharmaceutical Development Services, or PDS, and Drug Substance Services, or DSS. The North America DPS and Europe DPS operating segments met the aggregation criteria to be presented as one reportable segment referred to as DPS. As a result, the Company has determined it has three reportable segments: DPS, PDS, and DSS. The Company previously operated under three additional operating segments. The Biosolutions segment was sold on July 31, 2015 and the DPx Fine Chemicals, or DFC, segment was sold on August 31, 2015. The Banner Life Sciences, or BLS, segment was spun-off during fiscal 2015, however, its results are included within continuing operations through the spinoff date of July 31, 2015 because the Company has continuing involvement with BLS pursuant to certain service agreements between the parties. Before the spinoff date, the Other segment includes BLS operations. After the spinoff date, the Other segment represents Corporate activity only. See Note 4 for further discussion. Cash and cash equivalents Cash and cash equivalents include cash in interest-bearing accounts and term deposits with remaining maturities of less than three months at the date the term deposit was acquired. Receivables and allowance for doubtful accounts Trade receivables are primarily comprised of amounts owed to the Company through its operating activities and are presented net of an allowance for doubtful accounts. The Company monitors past due accounts on an ongoing basis and establishes appropriate reserves, if required, to cover probable losses. An appropriate allowance is determined by considering a number of factors, including the length of time accounts receivable are past due, historical loss history, the specific customer’s ability to pay its obligation, and the condition of the general economy and the customer’s industry. Inventories Inventories consisting of raw materials, packaging components, spare parts, work-in-process, and finished goods are valued at the lower of cost and net realizable value. Cost approximates average cost, and includes cost of purchased materials, costs of conversion, namely labor and overhead, and other costs, such as freight in, necessary to bringing the inventories to their present location and condition. Capital assets Capital assets are carried at cost less accumulated depreciation. The cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss in the statement of operations. Depreciation is recorded on a straight-line basis. The Company uses the following ranges for estimated useful life:
Repairs and maintenance costs are charged to operations as incurred. Goodwill The Company accounts for goodwill in accordance with ASC 350 - Intangibles - Goodwill and Other. The Company tests goodwill for impairment annually in the fiscal fourth quarter, with additional testing performed during earlier quarters, when necessary, if indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. Testing is performed with respect to each of the Company's reporting units that have been allocated goodwill. The Company assesses goodwill for possible impairment by comparing the carrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative market information and other factors to corroborate the discounted cash flow results. Intangible assets As a result of acquisition activity, the Company recorded various intangible assets, including developed technology, favorable agreements, non-compete agreements, customer relationships and trade names which are amortized on a straight-line basis over their respective estimated useful lives. Impairment of capital assets and definite-lived intangible assets The Company tests for impairment of capital assets and definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indicators are present, the Company assesses the recoverability of the asset by determining whether the carrying value of the asset can be recovered through undiscounted future cash flows. If the sum of the undiscounted cash flows is less than the carrying amount, the excess of the carrying amount over the estimated fair value, based on the discounted cash flows, is recorded as impairment. Financial assets and liabilities All financial instruments, including derivatives, are included in the consolidated balance sheets and are measured at fair value except for loans, receivables and other financial liabilities, which are measured at amortized cost. Held-for-trading financial instruments are recorded at cost as they are initiated and are subsequently measured at fair value and all revaluation gains and losses are included in net income (loss) in the period in which they arise. Available-for-sale financial instruments are recorded at cost as they are initiated and are subsequently measured at fair value and all unrealized revaluation gains and losses are included in other comprehensive income (loss) in the period in which they arise, unless any such losses are determined to be other-than-temporary. Realized gains and losses are included in net income (loss) in the period in which they arise. All financial instrument transactions are recorded on the settlement date. See Note 13 for further information. The Company expenses all transaction costs as incurred, including fees paid to advisors and other related costs. Financing costs, including underwriting and arrangement fees paid to lenders, are deferred and carried as an asset on the consolidated balance sheets and amortized into interest expense over the terms of the related agreements. Derivatives and hedge accounting The Company enters into foreign exchange forward contracts to reduce its exposure to foreign currency denominated cash flows. In addition, the Company has designated certain Euro denominated debt as a hedge against its net investment in its subsidiaries in Austria, The Netherlands, Germany, France and Italy. All derivative instruments are recorded in the consolidated balance sheets at fair value unless exempted from derivative treatment as a normal purchase and sale. All changes in their fair value are recorded in income (loss) unless the cash flow hedge accounting criteria are met, in which case the changes in the fair value associated with the effective portions of the hedge are recorded in other comprehensive income (loss). See Note 13 for further information. Deferred revenues Customer agreements may provide reimbursements to the Company for the costs of certain capital assets used in the manufacturing process of their products. These reimbursements are recorded as deferred revenues and are recognized as revenue over the remaining minimum term of the agreements, including potential extensions. In certain instances, the Company receives prepayment for future services and these amounts are deferred and amortized into revenue when the required services have been provided. Revenue recognition The Company recognizes revenue when services are completed in accordance with specific agreements with its customers and when all costs connected with providing these services have been incurred, the price is fixed or determinable and collectability is reasonably assured. Customer deposits on services in progress are included in accounts payable and accrued liabilities. In the case of manufacturing services, revenue is recognized upon shipment, upon receipt of goods by the customer in line with the delivery terms outlined in the contract, or when products pass quality assurance testing, in all cases where the risk has been transferred, service obligations have been performed, and the Company is entitled to payment under the terms of the contract. In the case of development related services, revenue is recognized on the achievement of specific substantive milestones in accordance with the respective development service contracts when performance has been completed. In the case of certain active pharmaceutical ingredient services, revenue is recognized using the proportional performance method for services performed to date. The Company accepts returns from its customers only for defective products. The impact of returns from customers is not significant to the business or the consolidated financial statements as a whole. Employee benefit plans The Company provides a number of benefit plans to its employees including: (a) defined benefit pension plans; (b) post-employment benefit plans; (c) defined contribution plans; and (d) unfunded termination indemnities. The cost of defined benefit pension plans and other post-employment benefits, which include health care and dental benefits, relating to employees' current service is expensed annually. The cost is computed on an actuarial basis using the projected benefit method, pro-rated based on service and management's best estimates of various actuarial factors, including salary escalation, other cost escalation and retirement ages of employees. The valuation of defined benefit pension plan assets is at current market value. An actuarial valuation is performed to calculate the expected return on plan assets. Past service costs resulting from plan amendments are deferred and amortized on a straight-line basis over the remaining service life of employees active at the time of amendment. Actuarial gains and losses arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period, or from changes in actuarial assumptions used to determine the accrued benefit obligation. The excess of the net accumulated actuarial gain or loss over 10% of the greater of the benefit obligations and the fair value of plan assets is amortized over the average remaining service period of active employees. The average remaining service period of the active employees covered by the pension plans and the other retirement benefit plans at the measurement date of October 31, 2016 is 19 years. As of October 31, 2015, the average remaining service period was 18 years. When the restructuring of a benefit plan gives rise to both a curtailment and a settlement of obligations, the curtailment is accounted for prior to the settlement. The cost of defined contribution plans is expensed as funds are contributed by the Company. Unfunded termination indemnities for the employees of the Company's subsidiaries in Italy are accrued based on Italian severance pay statutes. The liability recorded is the amount the employees would be entitled to if the employees' employment with the Company ceased as of the balance sheet date. Income taxes The Company accounts for income taxes in accordance with ASC 740 - Income Taxes. The asset and liability method is used, which requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities. The Company measures deferred tax assets and liabilities using tax rates in the respective jurisdictions in which it operates. In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that the Company will be able to realize some or all of the deferred tax assets. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of potentially complex tax regulations. The Company utilizes the guidance in ASC 740 to determine the accounting for uncertain tax positions. Foreign exchange translation Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Translation gains and losses related to certain foreign currency denominated intercompany loans that are not expected to be settled in the foreseeable future are included as part of the net investment in certain foreign subsidiaries, and are included in accumulated other comprehensive income (loss) in stockholders' / members' deficit. Gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a component of accumulated other comprehensive (income) loss until either the sale or upon the complete or substantially complete liquidation by the Company of its investment in a foreign entity. Stock-based compensation The Company accounts for its stock-based compensation awards in accordance with ASC 718 - Compensation - Stock Compensation. ASC 718 requires companies to recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restricted stock units. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over the applicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies and the risk-free interest rate. Forfeitures are recognized as they occur. Earnings (loss) per share The Company reports net earnings (loss) per share in accordance with ASC 260 - Earnings per Share. Under ASC 260, basic earnings per share, which excludes dilution, is computed by dividing net earnings or loss available to common shareholders by the weighted average number of common average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution due to securities that could be exercised or converted into common shares, and is computed by dividing net earnings or loss available to common stockholders by the weighted average of common shares outstanding plus the dilutive potential common shares. Diluted earnings per share includes stock options and restricted stock units using the treasury stock method. During a loss period, the assumed exercise of stock options has an anti-dilutive effect and therefore, these instruments are excluded from the computation of diluted earnings per share in a loss period. Recently adopted accounting pronouncements In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The ASU states that disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component of an entity or group of components of an entity meets the criteria to be classified as held for sale, is disposed of by sale, or disposed of other than by sale. The guidance is effective for annual periods beginning on or after December 15, 2014, and is applied prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The Company adopted ASU No. 2014-08 on a prospective basis beginning on November 1, 2015, and such adoption did not have an impact on the Company's results of operations, financial condition and/or financial statement disclosures. Recently issued accounting pronouncements In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update provides specific guidance on a variety of cash flow classification issues. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied retrospectively for each period presented with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. Between March and May 2016, the FASB issued three Accounting Standards Updates relating to Revenue from Contracts with Customers (Topic 606). These updates, identified as No. 2016-08, No. 2016-10, and No. 2016-12, identified practical expedients and clarified various aspects of the new revenue recognition standard outlined in Accounting Standards Update 2014-09. The Company has reviewed these updates and does not believe they will materially impact the Company's future implementation of the standard. The effective date and transition requirements for ASU 2014-09 (and updated in ASU 2015-14) were not changed with these pronouncements. The Company is continuing to evaluate the overall impact of ASU 2014-9. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The impact on the consolidated financial statements from the adoption of this guidance is currently being evaluated by the Company. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Investments (Topic 323): Equity Method and Joint Ventures. This update eliminated the requirement to retrospectively adopt the equity method of accounting. Instead, the update requires the equity method investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified. This update also requires that an entity with an available-for-sale equity security that becomes qualified for equity method accounting to recognize the unrealized gain or loss in accumulated other comprehensive income through earnings at the date the investment becomes qualified for equity method accounting. The amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future transactions. In March 2016, the FASB issued Accounting Standards Update No. 2016-05, Derivatives and Hedging (Topic 815). This update clarifies that a change in the counterparty of a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future hedging activity. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). This update revised the overall guidance on leases, which includes the requirement to recognize a lease asset and a lease liability for leases previously classified as operating leases. As a result, all leases will create an asset and a liability for a lessee. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact of this pronouncement. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This update revised the overall guidance on financial instruments, including superseding the guidance to classify equity securities with readily determinable fair values into different categories and requiring equity securities to be measured at fair value with changes in the fair value recognized through income. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments and improves financial reporting by providing relevant information about an entity's equity investments and reducing the number of items that are recognized in other comprehensive income. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied using a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of a prospective application on the amendment relating to equity securities without readily determinable fair values. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This update eliminated the requirement to an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Instead, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. For public business entities, the amendment is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendment is applied prospectively with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This deferred the effective date of ASU 2014-09, which issued a converged standard on revenue recognition from contracts with customers with U.S. GAAP and IFRS. ASU 2014-09 was issued in May 2014 and the core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. For public business entities, the deferred effective date of the original amendment (ASU 2014-09) is for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. For all other entities, the deferred effective date of the original amendment (ASU 2014-09) is for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. Additionally, the pronouncement allowed early application for annual reporting periods beginning after December 15, 2016, the original effective date. There are two methods for adopting the standard amendment. The first method is to retrospectively adjust each reporting period presented. The second method is to retrospectively adjust with the cumulative effect recognized at the date of initial application along with additional disclosures in reporting periods that include the date of initial application. The Company is evaluating the impact of this new pronouncement along with the method of adoption. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330). An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this ASU more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The Board has amended some of the other guidance in Topic 330 to more clearly articulate the requirements for the measurement and disclosure of inventory. However, the Board does not intend for those clarifications to result in any changes in practice. Other than the change in the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value for inventory within the scope of this Update, there are no other substantive changes to the guidance on measurement of inventory. The ASU is effective to the Company for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2015-05 provides accounting guidance regarding fees paid as part of a cloud computing arrangement, which heretofore no such explicit guidelines existed. The guidance focuses on whether a cloud computing arrangement includes a software license element. If the agreement does include a software licensing element, that element should be accounted for in a manner consistent with the acquisition of other software licenses. This ASU is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt this amendment either: 1) prospectively to all arrangements entered into or materially modified after the effective date; or 2) retroactively. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU No. 2015-03 Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 provides accounting guidance regarding financial statement presentation of debt issuance costs related to a recognized debt liability. The guidance states that debt issuance costs related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with that of debt discounts. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This ASU is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, but only for financial statements which have not been previously issued. An entity should apply this guidance on a retrospective basis wherein the balance sheet of each individual period be adjusted to reflect the period-specific effect of the new guidance. Upon transition, an entity is required to comply with the appropriate disclosures associated with a change in accounting principle. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. |
Business Combinations |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | BUSINESS COMBINATIONS The acquisition activity referenced below has been accounted for using the acquisition method of accounting in accordance with ASC 805-10, Business Combinations, and the fair value concepts set forth in ASC 820-10, Fair Value Measurements and Disclosures. Under ASC 805-10, the total purchase price for each acquisition was allocated to the assets acquired and liabilities assumed based on their respective fair values as of the acquisition date. The allocation of the purchase price is based on estimates and assumptions that are subject to change within the measurement period. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed was recorded as goodwill. Goodwill largely consists of geographic expansion of product sales, manufacturing and other synergies of the combined companies, as well as the value of the assembled workforce. Irix Acquisition Background On March 31, 2015, the Company acquired Irix Pharmaceuticals (the "Irix Acquisition"), a Florence, South Carolina, USA, headquartered company specializing in producing difficult to manufacture active pharmaceutical ingredients ("API") for drugs ranging from early development to late development to commercial launch, for a purchase price of $161.3 million, of which $160.3 million was paid in cash and the remaining $1.0 million was paid in the form of equity issued in the Partnership. The Irix Acquisition provides the Company with a North American presence for comprehensive API development and manufacturing to address customers' most challenging needs for drugs in all development phases. The Irix Acquisition is included in the DSS segment. Purchase Price Allocation The final purchase price allocation for the Irix Acquisition is as follows:
The Company does not expect any of the goodwill to be tax deductible. Valuations of intangible assets acquired The weighted-average life of the acquired intangible assets is approximately 14.2 years. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. Financial results of the acquired business - Irix The revenues and income from continuing operations of Irix for the period from April 1, 2015 through October 31, 2015 included in the consolidated statement of operations are as follows:
Agere Acquisition Background On March 20, 2015, the Company acquired Agere Pharmaceuticals (the "Agere Acquisition"), a Bend, Oregon, USA headquartered company specializing in improving a medication's bioavailability, or absorption rate, for a purchase price of $27.1 million, of which $20.3 million was paid in cash and the remaining $6.8 million was paid in the form of equity issued in the Partnership. The Agere Acquisition is included in the PDS segment. Purchase Price Allocation The final purchase price allocation for the Agere Acquisition is as follows:
The Company does not expect any of the goodwill to be tax deductible. Valuations of intangible assets acquired The weighted-average life of the acquired intangible assets is approximately 10.3 years. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) Estimated using the with and without method under the income approach. Significant inputs were level 3 in nature. Financial results of the acquired business - Agere The revenues and loss from continuing operations of Agere for the period from March 21, 2015 through October 31, 2015 included in the consolidated statement of operations are as follows:
Gallus Acquisition Background On September 29, 2014, the Company acquired Gallus (the "Gallus Acquisition"), a leading contract manufacturing company specializing in biologics for a cash purchase price of $257.2 million. As a result of the Gallus Acquisition, the Company is better positioned to meet both small- and medium-scale biologic production needs. The business will also aim to support the needs of customers with biologics projects by providing flexibility, leading technology solutions, commercial operations and an expanded footprint. The Gallus Acquisition is included in the DSS segment. Purchase price allocation The final purchase price allocation for the Gallus Acquisition is as follows:
The Company does not expect any of the goodwill to be tax deductible. Valuations of intangible assets acquired The weighted-average life of the acquired intangible assets is approximately 14.8 years. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) Estimated using the with and without method under the income approach. Significant inputs were level 3 in nature. Financial results of the acquired business - Gallus The revenues and loss from continuing operations of Gallus from September 29, 2014 to October 31, 2014 included in the consolidated statement of operations are as follows:
DPP Acquisition Background On March 11, 2014, JLL contributed $500.0 million in cash for a 51.0% interest in Patheon and DSM contributed their existing pharmaceutical products business ("DPP") in exchange for a 49.0% interest in Patheon, a cash payment of $114.4 million, a preferred interest in the Partnership of $49.9 million (net of pension obligation purchase price adjustment of $25.1 million), and a potential earn-out on the Biologics business. DSM also received reimbursement for its transaction related expenses. Assets acquired in the acquisition and currently held by the Company are included in the DPS and DSS segments. The transaction included assets relating to the ESIM and Biosolutions businesses that the Company has since divested in fiscal 2015. See Note 4. Transaction related expenses incurred by Patheon were expensed as incurred and have been included within acquisition and integration costs in the consolidated statement of operations. Refer to the following table for a breakout of the consideration:
Purchase price allocation The final purchase price allocation for the DPP Acquisition is as follows:
The Company does not expect any of the goodwill to be tax deductible. Valuations of intangible assets acquired The weighted-average life of the acquired intangible assets is approximately 12.3 years. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) In process research and development is currently classified as indefinite-lived intangible assets and will either begin to be amortized upon product approval and commercialization or written-off if not approved. Financial results of the acquired business - DPP The revenues, loss from continuing operations, loss from discontinued operations and net loss of DPP from March 11, 2014 to October 31, 2014 included in the consolidated statement of operations are as follows:
Pro forma financial information - DPP and Gallus The following table presents pro forma results of operations and gives effect to the DPP Acquisition and Gallus Acquisition as if the transactions had been consummated on November 1, 2013, the start of fiscal 2014. The Irix Acquisition and Agere Acquisition have been excluded from these results as the results of their operations individually and in the aggregate were not material to the results of operations for the periods presented. This unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what the actual results of operations would have been had the DPP Acquisition and Gallus Acquisition taken place on November 1, 2013, nor is it indicative of the future consolidated results of operations of the combined companies. In addition, the discontinued operations outlined in Note 4 have been reclassified out of these amounts to show the impact on continuing operations.
The unaudited pro forma financial information was prepared using the acquisition method of accounting and is based on the historical financial information of the Company, DPP and Gallus, reflecting the Company’s, DPP’s and Gallus’ combined results of operations for the fiscal years ending 2014. The historical financial information has been adjusted to give effect to the pro forma events that are (i) directly attributable to the DPP Acquisition and Gallus Acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results of the Company, DPP and Gallus. The unaudited pro forma consolidated results reflect primarily the following pro forma adjustments:
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Discontinued Operations and Other Strategic Initiatives |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Other Strategic Initiatives | DISCONTINUED OPERATIONS AND OTHER STRATEGIC INITIATIVES Discontinued Operations Banner Pharmacaps On May 12, 2015, the Company sold its Banner Pharmacaps entity in Mexico, previously included within the DPS and BLS segments, to the Perrigo Company plc for approximately $36.4 million in cash. The Banner Pharmacaps entity in Mexico produced over-the-counter and nutritional products for consumption in Mexico. The Company acquired the entity in fiscal 2012 and subsequent to this acquisition, the Company shifted its business strategy, focusing more on technological innovation and research and development. The Company recognized a gain on sale of $2.6 million, which included adjustments in the second quarter of 2016 primarily related to working capital adjustments. Biosolutions Operations in Capua, Italy On July 31, 2015, the Company sold its Biosolutions facility in Capua, Italy, previously included within the Biosolutions segment, for approximately €0.3 million in cash. The sale occurred as a result of a strategic shift in the Company’s long term business strategy. The Company recognized a loss on sale of $24.0 million, which included an adjustment in the second quarter of 2016 for future retention bonuses at the facility. DPx Fine Chemicals On August 31, 2015, the Company sold its DPx Fine Chemicals ("DFC") division, which previously comprised the DFC operating segment. DFC was sold for a cash purchase price of €179.0 million, which included a €3.0 million working capital payment made in the first quarter of 2016. The Company recognized a gain on sale of $107.0 million, which included an adjustment in the first quarter of 2016 for estimated taxes on the sale. The DPx Fine Chemicals division, which was acquired through the DPP Acquisition, developed chemicals that are not in line with the Company’s long term business strategy. The results of the above dispositions have been recorded as discontinued operations, the results of which for the fiscal years ended October 31, 2016, 2015, and 2014 are as follows:
Strategic Initiatives BLS Spinoff On July 31, 2015, the Company completed a spinoff of its BLS business to the Company's investors. The first day of operations of BLS as a stand-alone from Patheon's operations was August 1, 2015. Each owner received the same ownership interest in the new entity in proportion to its existing ownership interest in the Company. The spinoff was effectuated on a pro-rata basis and, as such, the transaction was completed using the balance sheet carrying values with no resulting gain or loss recorded in connection with the transaction. The Company has a management services agreement with BLS to provide various management services. Accordingly, the Company has continuing involvement with BLS and therefore the financial results do not qualify as discontinued operations under current U.S. GAAP. As a result, BLS financial information through July 31, 2015 has been recorded within continuing operations in the accompanying consolidated statement of operations. Refer to Note 17 for related party transaction information. The carrying value of the assets and liabilities transferred to the Partnership are as follows:
Before the spinoff transaction, the Company had intercompany receivables from BLS, which were offset by intercompany payables within BLS. BLS intercompany payables are included within the $19.3 million of accounts payable and accrued liabilities transferred in the spinoff and as a result, $9.4 million of the Company's intercompany receivables from BLS became third-party receivables as of July 31, 2015, the date of the spinoff. See Note 17 for further information. Other Strategic Initiatives In February 2015, the Company closed its facility in Venlo, The Netherlands and transferred any remaining production to other Patheon facilities. Because the business in the Venlo facility was transferred within the existing site network, its results of operations are included in continuing operations in the consolidated financial statements. See Note 15 for further information. Additionally, a $3.2 million impairment charge was recognized in the third quarter of 2015 relating to the value of the land at the facility location. The land was subsequently sold for €3.5 million in September 2015. The Company completed the consolidation of its Caguas, Puerto Rico operations into its Manati, Puerto Rico operations during the first quarter of fiscal 2014 and vacated the Caguas facility as of January 31, 2014. Total project repositioning expenses were $14.9 million, of which an additional $1.1 million was recorded within repositioning expenses in the accompanying consolidated statement of operations for the twelve months ended October 31, 2014. Because the business in the Caguas facility transferred within the existing site network, its results of operations are included in continuing operations in the consolidated financial statements. |
Supplemental Balance Sheet Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION Inventories Inventories consisted of the following:
The following is a rollforward of the Company's inventory provisions for fiscal 2016 and 2015:
Accounts payable and accrued liabilities The following is the breakdown of accounts payable and accrued liabilities:
Intangible assets The following table summarizes gross carrying amounts, accumulated amortization, and accumulated impairments related to the Company's identifiable intangible assets as of October 31, 2016:
In-process research and development (“IPR&D”) is classified as definite-lived or indefinite-lived depending on whether the product has been approved and if commercialization has begun. IPR&D for products that have been approved is classified as a definite-lived intangible asset and is amortized over the life of the asset. IPR&D for products that have not been approved is classified as an indefinite-lived intangible asset and either begins to be amortized upon approval and product commercialization or is written-off if the product is not approved. In the first quarter of fiscal 2016, the Company sold an IPR&D asset to Banner Life Sciences for cash consideration equal to its net carrying value of $3.6 million. At the time of the sale, the asset had a gross carrying value of $7.9 million and had incurred $4.3 million in impairments. In fiscal 2015, as a result of the annual impairment testing of indefinite-lived intangible assets, the Company incurred an impairment loss of $0.9 million as a result of a decision to not move forward with a project. In fiscal 2014, as a result of the annual impairment testing of indefinite-lived intangible assets, the Company incurred impairment losses of $9.7 million due to changes in market factors and expected product commercialization timing. Amortization expense for the fiscal years ended October 31, 2016, 2015 and 2014 was $24.6 million, $22.7 million and $11.5 million, respectively. The definite-lived intangible asset amortization horizon is as follows:
Goodwill The following table summarizes the changes in the carrying amount of goodwill during the years ended October 31, 2016 and October 31, 2015:
(1) The opening cumulative goodwill balance is reflective of historical impairment charges of the full value of goodwill, which includes a $172.5 million impairment related to Puerto Rico operations, a $0.1 million impairment related to the Banner Canada operations, a $1.3 million impairment related to the Biosolutions business, and a disposition impact on the sale of Banner Mexico of $3.1 million. (2) Represents goodwill measurement period adjustments on the DPP, Gallus, Irix and Agere Acquisitions. (3) Represents goodwill from the Irix and Agere Acquisitions. (4) Represents a measurement period adjustment on the Irix Acquisition in the second quarter of fiscal 2016. Deferred revenues The following table summarizes the deferred revenue activity for fiscal 2016, 2015 and 2014:
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Capital Assets |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Assets | CAPITAL ASSETS
The increase in capital assets was primarily a result of purchasing capital assets to support investment in future growth across the Company. The amount of open purchase commitments related to authorized capital projects at October 31, 2016 and 2015 was approximately $46.7 million and $59.8 million, respectively. The expenditures related to the fiscal 2016 open purchase commitments are expected to be incurred through fiscal 2018. Assets under capital leases and included within capital assets for fiscal years 2016 and 2015 are as follows:
Depreciation expense for the fiscal years ended October 31, 2016, 2015 and 2014 was $88.4 million, $85.1 million and $68.0 million, respectively. |
Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | LONG-TERM DEBT Long-term debt in the accompanying consolidated balance sheets at October 31, 2016 and October 31, 2015 consists of the following:
2014 Term Loans and Revolving Line On March 11, 2014, the Company completed the refinancing of its existing credit facility (the "Refinancing"), pursuant to which it entered into a credit agreement (the "Credit Agreement") documenting a new credit facility (the "Credit Facility") for a USD denominated secured term loan in the amount of $985.0 million and a Euro denominated secured term loan in the amount of €250.0 million, or $345.0 million, (together, with the incremental term loans described below, the "Secured Term Loans") and a secured multi-currency revolving line in the amount of $200.0 million (the "Secured Revolving Facility"). Up to $75.0 million of the Secured Revolving Facility is available for letters of credit. The Secured Term Loans mature on March 10, 2021, and the Secured Revolving Facility matures on March 10, 2019. The USD denominated Secured Term Loan bears interest at a rate per annum equal to, at the option of the Company, a base rate plus 2.25% or LIBOR with a floor of 1% plus 3.25%. The Euro denominated Secured Term Loan bears interest at a rate per annum equal to, at the option of the Company, a base rate plus 2.50% or LIBOR with a floor of 1% plus 3.50%. Borrowings under the Secured Revolving Facility bear interest for Eurodollar loans at LIBOR with a floor of 1% plus 3.25%, Canadian prime rate loans at the Canadian prime rate plus 2.25%, and base rate loans at the base rate plus 2.25%. The Company will also pay a commitment fee of 0.50% per annum on the unused portion of the Secured Revolving Facility with a step down to 0.375% when the First Lien Leverage Ratio (as defined below) is less than or equal to 3.00 to 1.00. On September 29, 2014, the Company entered into Amendment No. 1 to the Credit Agreement which added two incremental term loans to the Credit Facility; a USD denominated term loan in the amount of $160.0 million and a Euro denominated term loan in the amount of €70.0 million, or $88.7 million at the time of the amendment. The Company used the proceeds from Amendment No. 1 to fund a portion of the purchase price of the Gallus Acquisition. The other material terms of the incremental term loans are identical to those of the initial term loans. On March 31, 2015 the Company entered into Amendment No. 2 to the Credit Agreement which added two incremental term loans to the Credit Facility; a Euro denominated term loan in the amount of €155.0 million, or $164.3 million at the time of the amendment, and a USD denominated term loan in the amount of $20.0 million. The Company used the proceeds from Amendment No. 2 to fund the purchase price of the Irix Acquisition. The other material terms of the incremental term loans are identical to those of the initial term loans. As of October 31, 2016, the Company held a $20.0 million balance on the Secured Revolving Facility. The facility has a rolling maturity date at the end of each calendar month and will automatically renew each month until the balance is paid. Under the Secured Revolving Facility, the Company is required to maintain a First Lien Leverage Ratio below a certain amount for each of the Testing Periods as set forth in the Credit Agreement if the Company has borrowed 25% of the available credit on the Secured Revolving Facility, or $50.0 million. For purposes of the Credit Agreement, a Testing Period means a single period consisting of the most recent four consecutive fiscal quarters ending on the covenant determination date. As of October 31, 2016, the Company was not required to calculate the First Lien Leverage Ratio as the Company has not borrowed 25% or $50.0 million under the Secured Revolving Facility. The following table discloses the maximum First Lien Leverage Ratios permitted under the Credit Agreement:
"First Lien Leverage Ratio" is generally defined in the Credit Agreement as the ratio of (i) the sum of the aggregate principal amount of the Company's and its restricted subsidiaries' indebtedness for borrowed money, principal amount of capital lease obligations and debt obligations evidenced by bonds, promissory notes, debentures or debt securities that is secured by a first priority lien on the collateral minus unrestricted cash and cash equivalents held by the Company and its restricted subsidiaries in each case set forth in the Credit Agreement to (ii) Consolidated EBITDA. Consolidated EBITDA is generally defined in the Credit Agreement as income (loss) from continuing operations before repositioning expenses, interest expense, foreign exchange losses reclassified from other comprehensive income (loss), refinancing expenses, acquisition-related costs, gains and losses on sale of capital assets, income taxes, asset impairment charges, depreciation and amortization, stock-based compensation expense, consulting costs related to the Company's operational initiatives, purchase accounting adjustments, other income and expenses, non-cash charges, expenses related to the DPP Acquisition, pro forma cost savings from operational excellence initiatives and plant consolidations, pro forma synergies from the DPP Acquisition, and proceeds from business interruption insurance, among other adjustments. Consolidated EBITDA is not equivalent to Adjusted EBITDA, which, as discussed in Note 14, is the Company's measure of segment performance. The Company is required to make the following mandatory prepayments in respect of the Secured Term Loans: (i) 50% of Excess Cash Flow (as defined in the Credit Agreement) when the Company maintains a First Lien Leverage Ratio of greater than 4.00 to 1.00, with step downs to (a) 25% when the Company maintains a First Lien Leverage Ratio of less than or equal to 4.00 to 1.00 but greater than 3.50 to 1.00 and (b) 0% when the Company maintains a First Lien Leverage Ratio of less than or equal to 3.50 to 1.00; (ii) 100% of the net cash proceeds of certain asset sales (including insurance and condemnation proceeds), subject to thresholds, reinvestment rights and certain other exceptions; and (iii) 100% of the net cash proceeds of issuances of debt obligations, subject to certain exceptions and thresholds. "Excess Cash Flow" is generally defined as Consolidated EBITDA (as defined in the Credit Agreement) plus, (i) decreases in working capital, (ii) extraordinary or nonrecurring income or gains and (iii) certain other adjustments, minus, (a) increases in working capital, (b) cash interest, (c) cash taxes, (d) cash capital expenditures (e) scheduled debt amortization and (f) certain other adjustments. No Excess Cash Flow payment was required for fiscal 2016. The Company may voluntarily repay borrowings under the Credit Facility at any time. If the Company has failed to maintain the applicable First Lien Leverage Ratio, it may nevertheless avoid a default by (i) repaying outstanding borrowings under the Revolving Line in an amount sufficient to avoid triggering the First Lien Leverage Ratio for that fiscal quarter or (ii) accepting a cash contribution of qualified equity in an amount which, if treated as Consolidated EBITDA, would bring the Company into compliance with the applicable First Lien Leverage Ratio for that fiscal quarter, in each case during the 11 business days following the deadline for delivery of the Company’s compliance certificate for that fiscal quarter. In addition, maintenance of the First Lien Leverage Ratio is required only with respect to the Revolving Line; the Term Loans do not directly benefit from the financial covenant and, until the Revolving Line is terminated and all outstanding borrowings thereunder are accelerated, will remain unaffected by a default under the Revolving Line that arises from the Company’s failure to maintain the applicable First Lien Coverage Ratio. The Credit Agreement contains other customary terms, including (i) representations, warranties and affirmative covenants, (ii) negative covenants (in addition to the limitation on distributions and the requirement to maintain the First Lien Leverage Ratio levels as described above), such as limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, prepayments of subordinated debt, and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (iii) events of default, such as for non-payment, breach of other covenants, misrepresentations, cross default to other debt, change in control, bankruptcy events, ERISA events, unsatisfied judgments and actual or asserted invalidity of guarantees or security documents. As of October 31, 2016, the Company was in compliance with the covenants in the Credit Facility. Provided that the Company is in compliance with the First Lien Leverage Ratio test and no default under the Credit Agreement is continuing or would result therefrom, the covenant in the Credit Agreement that limits the Company's ability to pay dividends or make other distributions to its shareholders generally permits (with certain exceptions and qualifications) the Company to pay dividends or make such distributions in an aggregate amount, when taken together with the aggregate amount of any prepayment, repurchase, redemption or defeasance of subordinated indebtedness, not to exceed the greater of (x) 3.00% of Consolidated Total Assets and (y) $65.0 million and (ii) in aggregate amount not to exceed the available amount (as defined in the Credit Agreement) at such time. The Credit Facility is guaranteed by the Company and certain subsidiaries, and is secured by a first priority pledge on substantially all of the assets of the Company and the subsidiary guarantors, in each case subject to certain exceptions. 2015 Senior PIK Toggle Notes In May 2015, the Company issued $550.0 million in aggregate principal amount of 8.75% / 9.50% Senior PIK Toggle Notes due May 1, 2020 (the ‘‘Senior PIK Toggle Notes’’) in a private placement, pursuant to which it entered into an indenture with a commercial bank acting as trustee. In August 2016, the Company redeemed all of its outstanding Senior PIK Toggle Notes using proceeds from the Company's IPO and additional cash on hand. The Senior PIK Toggle Notes included a repayment provision that allowed the Company to redeem the notes within 2016 at a redemption price of 102%. As a result, the Company paid a $11.0 million early redemption fee in addition to the principal balance. The total redemption payment for the Senior PIK Toggle Notes was $573.3 million, which also included $12.3 in accrued interest. 2014 Senior Unsecured Notes In February 2014, the Company issued $450.0 million in aggregate principal amount of 7.50% senior unsecured notes due February 1, 2022 (the "Notes") in a private placement, pursuant to which it entered into an indenture (the “Indenture”) with a commercial bank acting as trustee. Interest on the Notes accrues at a rate of 7.50% per annum and is payable semiannually in arrears on each February 1 and August 1, commencing on August 1, 2014. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. The Notes are generally required to be guaranteed by each of the Company’s restricted subsidiaries that guarantees the Credit Facility or that guarantees other material indebtedness of the Company or other Note guarantors. Except for offers to purchase Notes upon certain asset sales or a change in control of the Company, no mandatory redemption or sinking fund payment is required with respect to the Notes. Prior to February 1, 2017, the Company may redeem all or a portion of the Notes at a redemption price equal to the principal amount redeemed, plus unpaid interest accruing on the principal amount redeemed to (but excluding) the Redemption Date, plus a make whole premium equal to the greater of (a) 1% of the principal amount redeemed and (b) (i) 105.625% of the principal amount redeemed plus all required interest payments on that principal amount through February 1, 2017, discounted back to the Redemption Date, minus (ii) the principal amount redeemed. On and after February 1, 2017, the Company may redeem all or a portion of the Notes at the applicable redemption prices set forth below (expressed as percentages of principal amount redeemed), plus unpaid interest accruing on the principal amount redeemed to, but excluding, the Redemption Date:
In addition, the Company may redeem all of the Notes at a redemption price equal to the principal amount redeemed, plus unpaid interest accruing to (but excluding) the redemption, upon certain adverse changes in applicable tax laws. The Notes are guaranteed by the Company and the Indenture does not require the Company to maintain compliance with any financial covenants. The Indenture does contain customary affirmative and negative covenants, including with respect to mergers, asset sales, restricted payments, restricted investments, issuance of debt and equity, liens, and affiliate transactions, subject to baskets and other exceptions. However, the Company will be exempt from many of the negative covenants if the Notes receive investment grade ratings from both Moody’s and S&P. The Indenture also contains customary events of default, such as for non-payment, breach of other covenants, misrepresentation, cross default to other material debt, bankruptcy events, unsatisfied judgments, and actual or asserted invalidity of guarantees. As of October 31, 2016, the Company was in compliance with the covenants in the Indenture. Note Payable to DSM Newco B.V. In June 2016, the Company issued a $51.0 million promissory note as a distribution to one of its members, DSM Newco B.V., in order to provide funds for the Partnership to redeem and cancel the preferred interest in the Partnership held by DSM. The promissory note is callable at any time. The promissory note had an interest rate of 10.75% per annum. In August 2016, the Company redeemed the full balance of the note payable using proceeds from the Company's IPO and additional cash on hand. Other Financing Arrangements During the third quarter of fiscal 2013, the Company received assistance from the Italian government in the form of two loans. One loan is a subsidized loan for approximately €6.0 million, of which the Company received €5.4 million during the third quarter of fiscal 2013 and the remaining €0.6 million in the second quarter of fiscal 2016. The subsidized loan has an annual interest rate of 0.5%, a maturity date of June 30, 2020 and amortizes in fixed semi-annual installments. The second loan is a bank loan of approximately €0.7 million, of which the Company received €0.6 million during the third quarter of fiscal 2013 and the remaining €0.1 million in the second quarter of fiscal 2016. The bank loan bears interest at a 6-month Euribor rate plus 7.1%, has a maturity date of June 30, 2020 and amortizes in six variable semi-annual installments beginning in December 2017. The Company receives research and development loans from the Austrian government. The loans hold various interest rates and have maturity dates through March 31, 2020. The aggregate current balance of these loans as of October 31, 2016 is $3.5 million. In connection with the Gallus Acquisition in September 2014, the Company assumed $4.0 million in seller financing previously incurred by Gallus. The debt was non-interest bearing and matured in the third quarter of fiscal 2016. In May 2011, Gallus entered into an agreement with St. Louis County under the county's Chapter 100 program. Under the program, Gallus transferred title of the St. Louis location's buildings and property to St. Louis County in exchange for St. Louis County, Missouri Taxable Industrial Revenue Bonds (Chapter 100 Bonds) of equal value. Gallus then simultaneously leased back the land and facility to St. Louis County. The proceeds of principal and interest on the Chapter 100 Bonds are equal to the lease payment obligations on the Loan. This arrangement was acquired by the Company through the acquisition of Gallus Pharmaceuticals in September 2014. In August 2015, the agreement with St. Louis County was amended by the Company to extend through December 21, 2029 (originally December 21, 2021), which is consistent with the maturity date of the Chapter 100 Bonds. The Company has determined that it has a legal right of offset for the obligations under the lease agreement with the proceeds receivable from the Chapter 100 Bonds and intends to offset the balance. As a result, the offsetting amounts have not been recorded in the financial statements. The bonds require the Company to maintain a minimum level of employment throughout the term of the loan and an additional investment in the St. Louis facility of at least $47.0 million by December 31, 2019. In addition to the terms of the bonds indicated above, the Company also entered into an agreement under which it makes "Payments In Lieu Of Taxes" (PILOT) fee payments in lieu of property taxes, which is equal to 50% of the property taxes that would have otherwise been payable on the property. The PILOT fees will increase in years which the Company has not maintained the minimum number of employees as required by the agreement on a prospective basis. The Company has possessory and equitable title to the property, and at any time can purchase legal title for a nominal fee. In addition, as the holder of the bonds, the Company can waive any default on the lease payments. As the Company retains all benefits of ownership and can take title at any time, at which point the bonds it holds would be redeemed to settle its obligations under the lease agreement, the Company has concluded the land and personal property continue to be assets and are recorded on the consolidated balance sheets. Refinancing Expenses During fiscal 2016, the Company incurred $21.6 million of refinancing expenses as a result of redeeming all of the outstanding Senior PIK Toggle Notes on August 3, 2016. The expenses comprised of an $11.0 million early redemption fee and the write off of $10.6 million in deferred financing costs relating to the issuance of the Senior PIK Toggle Notes. During fiscal 2015, the Company incurred $3.7 millionof refinancing expenses as a result of the term loan amendment. These expenses included a $0.8 million write-off of the original issue discount on the previous term loan and a $2.5 million write-off of deferred financing costs on the previous term loans, as well as other related costs. In addition, new creditor and third party fees of $6.9 million were capitalized in long-term assets and an original issue discount of $0.1 million related to the new term loans was capitalized and recorded as a reduction to the carrying value of the related debt. Both the capitalized fees and the original issue discount are being amortized to interest expense. During fiscal 2014, the Company incurred $28.2 million of refinancing expenses comprised of the write-off of the original issue discount on the previous term loan of $7.0 million, payment of bridge financing fees of $7.5 million, $13.7 million related to the write-off of deferred financing costs on the previous term loans and revolving line, and other related charges. In addition, new creditor and third party fees of $60.9 million were capitalized in long-term assets and an original issue discount of $8.5 million related to the new term loans was capitalized and recorded as a reduction to the carrying value of the related debt. Both the capitalized fees and the original issue discount will be amortized to interest expense. Estimated Minimum Annual Payments Estimated minimum annual repayments of long-term debt and capital leases based on current exchange rates for the next five years are:
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Other Long-term Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-term Liabilities | OTHER LONG-TERM LIABILITIES
The unfunded termination indemnities relate to the employees of the Company's Italian subsidiaries. In accordance with Italian severance pay statutes, an employee benefit is accrued for service to date and is payable when the employee's employment with the Company ceases. The termination indemnity liability is calculated in accordance with local civil and labor laws based on each employee's length of service, employment category and remuneration. The Italian termination liability is adjusted annually by a cost-of-living index provided by the government. Although there is no vesting period, the Italian government has established private accounts for these benefits and has required the Company to contribute $3.4 million and $3.3 million in fiscal 2016 and 2015, respectively, to these accounts, with additional contributions in the future. The liability recorded in the consolidated balance sheets is the amount to which the employees would be entitled if their employment with the Company ceased. The related expenses for fiscal 2016, 2015 and 2014 amounted to $3.3 million, $2.9 million and $2.4 million, respectively. Other long-term liabilities at October 31, 2016 primarily includes the $33.8 million Biologics earnout liability, $4.8 million in an Austrian jubilee plan, $0.5 million of post-employment benefits, $1.4 million for a deferred compensation plan, $0.9 million of deferred rent liability and $4.8 million of long-term payables. Other long-term liabilities at October 31, 2015 primarily includes $4.4 million in an Austrian jubilee plan, $0.6 million in long-term foreign currency cash flow hedge liability, $0.5 million of post-employment benefits, $1.7 million for a deferred compensation plan and $0.9 million of deferred rent liability. |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Post-retirement Benefits | PENSION AND POST-RETIREMENT BENEFITS Background The Company has a number of defined benefit pension plans. In addition, it has other benefit plans that provide post-retirement healthcare and dental benefits. The Company measured the accrued benefit obligation and the fair value of plan assets for accounting purposes as of October 31, 2016 for the defined benefit pension and other benefit plans. Information about the Company's defined benefit pension and other benefit plans, in aggregate, is as follows:
As of October 31, 2016 and 2015, the Company had an accrued benefit liability of $85.7 million and $65.6 million, respectively, for the defined benefit pension plans and the other benefit plans, of which $84.4 million and $64.0 million were included in other long-term liabilities, respectively, with the remainder included in accounts payable and accrued liabilities. As of October 31, 2016 and 2015, other long-term assets included an accrued benefit asset of $0.0 million and $2.0 million, respectively. A total of $76.0 million and $48.7 million of combined net actuarial losses and unrecognized prior service costs are included in other comprehensive loss for fiscal 2016 and 2015, respectively, and have not yet been recognized as a component of net periodic pension costs. Pension plan assumptions The following weighted-average assumptions were used to determine the projected benefit obligation of the Company's defined benefit and other post retirement plans at the end of the respective fiscal year:
The following weighted-average assumptions were used to determine the net periodic benefit cost of the Company's defined benefit and other post retirement plans during the respective fiscal year:
The 2.4% weighted-average discount rate used to determine the projected benefit obligation of the Company's plans at the end of fiscal 2016 was derived by reference to appropriate benchmark yields on high quality corporate bonds, with terms which approximate the duration of the benefit payments and the relevant benchmark bond indices considering the individual plan's characteristics, to select a rate at which the Company believes the pension benefits could have been effectively settled. The rate of future compensation increases is an assumption used by the Company's actuarial consultants for pension accounting and is determined based on the Company's current expectation for such increases. The Company selects an expected long-term rate of return on its pension plan assets and, in doing so, considers a number of factors including, without limitation, recent and historical performance of plan assets, asset allocation and other third-party studies and surveys. The Company considered the pension plan portfolios' asset allocations over a variety of time periods and compared them with third-party studies and reviewed the performance of the capital markets in recent years and other factors and advice from various third parties, such as the pension plans' advisors, investment managers and actuaries. While the Company considered both the recent performance and the historical performance of pension plan assets, the Company's assumptions are based primarily on its estimates of long-term prospective rates of return. Using the aforementioned methodologies, the long-term rate of return on plan assets assumptions selected by the Company equaled a weighted average of 5.0% for fiscal 2016. Differences between actual and expected asset returns are recognized in the net periodic benefit cost over the remaining service period of the active participating employees. An approximate 8% annual rate of increase in the per capita cost of covered health care and dental benefits was assumed for fiscal 2016 through fiscal 2020. Thereafter, it is assumed that the annual rate will decrease to 5% and remain at that level. The following table outlines the effects of a one-percentage-point increase and decrease in the assumed health care and dental benefit trend rates.
The components of net periodic benefit cost from continuing operations for the defined benefit plans and other benefit plans for the respective fiscal years are as follows:
Based on current information available from actuarial estimates, the Company anticipates that contributions required under its defined benefit pension plans and other benefit plans for fiscal 2017 will be approximately $3.9 million compared to contributions of $5.2 million that were made in fiscal 2016. The decrease in the expected fiscal 2017 contributions compared to fiscal 2016 are primarily the result of decreased obligations on a pension plan for the Bourgoin, France facility due to a workforce reduction in fiscal 2016. Required contributions to defined benefit pension plans in future years may vary and will be dependent upon a number of variables, including the long-term rate of return on plan assets. The Company also provides retirement benefits for the majority of its employees at its Canadian, United States, United Kingdom, Netherlands and Puerto Rican sites under defined contribution plans. The total expense for the plans amounted to $10.9 million, $13.7 million and $10.4 million for fiscal 2016, 2015 and 2014, respectively. The Company terminated its Netherlands Pension Plan as of December 31, 2013 and replaced it with a defined contribution plan. All current and future employees in the Netherlands are eligible to participate in the defined contribution plan. The accrued benefits under the terminated pension plan were settled with non-participating annuity contracts. These events were accounted for as a curtailment and a settlement. The curtailment impact reduced the projected benefit obligation by $1.7 million. This resulting curtailment gain was applied first against the accumulated unrecognized net actuarial losses in other comprehensive (loss) income of $0.8 million and the remaining $0.9 million was recognized in the consolidated statement of operations. The settlement resulted in a loss of $1.2 million that was recorded in the consolidated statement of operations in fiscal 2014. Total cash payments for employee future benefits were $16.1 million, $18.9 million and $17.2 million for fiscal 2016, 2015 and 2014, respectively, consisting of cash contributed by the Company to its defined benefit pension plans of $5.1 million, $5.0 million and $6.6 million, cash payments directly to beneficiaries for its other benefit plans of $0.1 million, $0.2 million and $0.2 million, and cash contributed to its defined contribution plans of $10.9 million, $13.7 million and $10.4 million, respectively. Pension plan assets The pension committee for the Company's defined benefit plans (the "Pension Committee") has adopted (and revises from time to time) an investment policy for the Canadian and United Kingdom defined benefit plans with the objective of meeting or exceeding, over time, the expected long-term rate of return on plan assets assumption, weighed against a reasonable risk level. In connection with this objective, the Pension Committee retains professional investment managers that invest plan assets in the following asset classes: equity and fixed income securities and cash and other investments, which may include hedge funds and private equity and global balanced strategies. The Company's defined benefit plans currently have the following targets for these asset classes, which are intended to be flexible guidelines for allocating the plans' assets among various classes of assets, and are reviewed periodically and considered for readjustment when an asset class weighting is outside of its target (recognizing that these are flexible targets that may vary from time to time) with the objective of achieving the expected long-term rate of return on plan assets assumption, weighed against a reasonable risk level, as follows:
The fair value hierarchy must have the following levels: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (Level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The fair values of the defined benefit plans' assets at October 31, 2016, by asset categories were as follows:
The fair values of the defined benefit plans' assets at October 31, 2015, by asset categories were as follows:
Within the equity securities asset class, the investment policy adopted by the Pension Committee provides for investments in a broad range of publicly-traded securities ranging from domestic and international stocks and small to large capitalization stocks. Within the debt securities asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities, including domestic and international treasury issues, and corporate debt securities. In the cash and other investments asset class, investments may be in cash and cash equivalents and other investments, which may include hedge funds and private equity not covered in the classes listed above, provided that such investments are approved by the Pension Committee prior to their selection. The Pension Committee's investment policy does not allow the use of derivatives for speculative purposes, but such policy does allow its investment managers to use derivatives for the purpose of reducing risk exposures or to replicate exposures of a particular asset class. Estimated future benefit payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid out of the Company's defined benefit plans and other post-retirement benefit plans:
The Company expects to incur approximately $2.9 million of amortization from actuarial losses as part of its pension costs in fiscal 2017. |
Equity |
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Equity [Abstract] | |
Equity | EQUITY On June 3, 2016, the Company consummated a corporate conversion pursuant to which it converted from a Dutch cooperative with excluded liability for its members (coöperatie met uitgesloten aansprakelijkheid) into a Dutch limited liability company (naamloze vennootschap). As a result of this conversion, the Company's name was changed from Patheon Holdings Coöperatief U.A. to Patheon N.V. On July 21, 2016, the Company amended its articles of association, resulting in a split of the Company's ordinary shares and a $1.2 million contribution by the Partnership to the Company's equity capital in connection with the share split. This share split and capital contribution resulted in a total of 115,609,756 ordinary shares outstanding at a par value of €0.01 per share. Additionally, on July 21, 2016, the Company consummated an initial public offering ("IPO") of 34,226,191 ordinary shares at a public offering price of $21.00 per share, including 4,464,286 ordinary shares sold pursuant to the option granted to the underwriters to purchase additional ordinary shares from the Company. The amount also includes 4,761,905 ordinary shares sold by DSM as part of the IPO, of which the Company did not receive any proceeds. The IPO was completed on July 26, 2016. The Company received total net proceeds of approximately $584.8 million from the IPO, after deducting underwriting discounts and commissions, but before deducting estimated offering expenses. The shares offered and sold in the IPO were registered under the Securities Act pursuant to the Company's Registration Statement on Form S-1, which was declared effective by the SEC on July 18, 2016. The Company's ordinary shares began trading on the New York Stock Exchange under the symbol "PTHN" on July 21, 2016. As of October 31, 2016, the Company has 145,074,042 ordinary shares outstanding with a par value of €0.01 per share. In accordance with the Company's articles of association, each ordinary share shall have one vote in our general meeting. |
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Earnings (Loss) Per Share | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per ordinary share is computed by dividing net income (loss) available to the Company by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings (loss) per ordinary share is computed by dividing net income (loss) available to the Company by the weighted-average number of ordinary shares outstanding adjusted to give effect to potentially dilutive securities. The details of the computation of basic and diluted earnings (loss) per ordinary share are as follows:
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | STOCK BASED COMPENSATION A summary of equity based compensation expense recognized during fiscal 2016, 2015 and 2014 is as follows:
(1) Relates to Class A units granted to an executive of Agere Pharmaceuticals as part of the Agere Acquisition Management Equity Incentive Plan (MEIP) Prior to the IPO, the Company was a wholly-owned indirect subsidiary of the Partnership. The Partnership adopted the Management Equity Incentive Plan, or the MEIP, with an effective date of March 11, 2014. The purpose of the MEIP is to provide eligible participants with an opportunity to receive grants of profit interests in the Partnership designated as management units. The award of management units pursuant to this MEIP is intended to compensate employees of the Partnership and its subsidiaries, including the Company. The participants in the MEIP, as a group, are eligible to participate in the gain on the investment earned by JLL and DSM with respect to Patheon once certain specified distribution or return thresholds have been achieved. MEIP units are subject to certain forfeiture (vesting) provisions such that if a holder's employment with Patheon terminated prior to the satisfaction of the applicable provision, the unvested MEIP units would be forfeited and the vested MEIP units could be converted into Class A Units in the Partnership on a cashless basis or by making an additional cash contribution in order to receive additional Class A Units ("Partnership Shares"). The aggregate number, class and tranche of management units that were issued under the MEIP was determined by the JLL/Delta Patheon GP Ltd., the general partner of the Partnership. The Partnership last issued MEIP units on December 9, 2015. As a result of the IPO and the adoption of the Patheon N.V. 2016 Omnibus Incentive Plan (the “Omnibus Plan”) described below, the Partnership will no longer grant awards under the MEIP to our employees. The granted MEIP units consist of Class B, Class C, Class D, and Class E units. From June 24, 2014 to December 9, 2015, the Partnership granted units under five different valuation tranches, with each tranche issued at the most recent quarterly valuation of the Company at the time of the grant. 71.4% of the Class B units have a four year service-based component for vesting ("Service-based Class B units") and the remaining Class B units ("Exit Event Class B units") vest if the holder is employed upon the occurrence of an Exit Event. An Exit Event is defined as the earliest to occur of (i) a change of control and (ii) in connection with or following an initial public offering, the sale or disposition by JLL of equity securities such that, immediately following such sale or disposition, JLL and its affiliates either (A) own less than 20% of the equity securities then issued and outstanding, calculated on a fully diluted basis, or (B) have received, in the aggregate, distributions in respect of such sale or distribution (together with any sale or distribution occurring prior thereto) equal to or in excess of 250% of its aggregate capital contributions made in respect of such equity securities prior to such sale or distribution. Each of the Class C, D, and E units have a performance and service condition related to vesting. These units vest upon the earlier to occur of (i) JLL receiving distributions in the aggregate equal to return on capital thresholds of 2.0x, 2.5x and 3.0x, respectively, or (ii) an Exit Event, as defined above, does not occur prior to the fifth anniversary of an IPO and the return thresholds in (i) are met based on the average price of the Company's publicly traded shares for any twenty day period following the fifth anniversary of an IPO. If any employee is terminated for any reason prior the achievement of the above vesting conditions, all unvested units in any class are forfeited. A summary of the MEIP activity for fiscal 2016 is as follows:
The Company uses a Monte Carlo simulation model under the option pricing method to value the Units. This model incorporates various assumptions including equity value, volatility, time to liquidity, risk-free rates and expected dividends. The fair value of the Units for purposes of determining compensation expense was estimated on the grant date using the following weighted average assumptions:
In connection with the IPO, ordinary shares of the Company were distributed directly to JLL and DSM with respect to their interest in the Partnership. The value of these shares, together with the value of cash and in-kind distributions made by the Partnership prior to the IPO, constituted an aggregate return on capital of approximately 2.9x of JLL's and DSM's invested capital. In connection with the IPO, a total of 6,106,540 ordinary shares ("MEIP shares") were distributed to the Partnership to be held for the benefit of the MEIP participants until an Exit Event occurs or until MEIP participants are otherwise permitted to transfer such interests in accordance with the terms of the partnership agreement of the Partnership and respective MEIP unit award agreements, at which time MEIP participants will receive their allocable distribution of MEIP shares. These shares represent the value of the MEIP units, in the aggregate, as determined under the MEIP, as a result of the distribution of ordinary shares to the limited partners of the Partnership in connection with the IPO. MEIP shares were issued to the Partnership with respect to Class B, C and D units for the first three valuation tranches as the applicable distribution threshold was achieved. No MEIP shares were allocated to the Partnership with respect to the final two valuation tranches or the Class E units, as the distribution thresholds and the 3.0x capital return threshold, respectively, were not achieved as of the IPO. The MEIP shares issued with respect to the Class B Units remain subject to the same vesting conditions as the Class B Units. As a result, MEIP shares issued in relation to Service-based Class B units are vested to the extent of each original MEIP grant's four year vesting schedule. The MEIP shares issued in relation to Exit Event Class B units are still subject to the defined Exit Event and are not vested. Lastly, the MEIP shares issued in relation to Class C and D units are fully vested due to their respective return thresholds being achieved through the IPO. The fair value of the MEIP shares are $21.00, the price of the shares at the IPO. Because no additional MEIP awards will be granted and because the ordinary shares were distributed to JLL and DSM prior to an Exit Event, the MEIP awards will not benefit from further appreciation of those shares. As such, the Company issued a total of 3,388,481 Restricted Share Units ("MEIP RSUs") under the Omnibus Plan in order to provide the MEIP participants with the opportunity to participate in the additional appreciation the MEIP awards could have generated if the Partnership had not distributed ordinary shares of the Company to JLL and DSM. MEIP RSUs were issued in relation to all unit classes and valuation tranches. The MEIP RSUs are subject to the same time-based vesting criteria as the original MEIP awards as well as the achievement of performance criteria, which is measured by the Company’s stock price at the earlier to occur of (i) an Exit Event, as defined above, or (ii) the 5-year anniversary of the IPO, at which time all or a percentage of RSUs would settle based upon the attainment of an share price target, with the remaining percentage of RSUs (if any) forfeited. The share price target is $48.47 per share, at which 100% of the RSUs would settle on the applicable vesting date with the share price at or above the target. No RSUs would settle on the settlement date with the share price at or below the IPO price of $21.00, with the settlement amount for a share price between $21.00 and $48.47 calculated on a pro rata basis. The estimated fair value of the MEIP RSUs are $8.41 per unit and was estimated using a Monte Carlo simulation model. The model incorporated the following assumptions:
The Company previously expensed the service-based Class B units using the graded vesting attribution method and is continuing to do so after the allocation of MEIP shares. In addition, the allocation of MEIP shares and MEIP RSUs in respect to the MEIP units resulted in an increase in fair value from the value attributed to the service-based Class B units at the time of the IPO, which the Company will expense on a straight line basis over the five year period following the IPO date, which represents the requisite service period of the MEIP RSUs. In total, the Company recorded $6.6 million and $13.8 million of compensation expense for fiscal 2016 and 2015, respectively, relating to these units. The total unrecognized compensation expense for the Service-based Class B units is $12.1 million, which is expected to be recognized through fiscal 2021. For the Exit Event Class B units, the allocation of MEIP shares and MEIP RSUs resulted in an increased fair value which will serve as the basis for recognizing compensation expense for these units. The fair value of the MEIP RSUs will be expensed on a straight line basis over five years, starting with the IPO date. The Company recognized $0.2 million of compensation expense for fiscal 2016 relating to these units. The fair value of the MEIP shares issued in respect of the Exit Event Class B units will remain unrecognized until an Exit Event occurs. The total unrecognized compensation expense for the MEIP shares and MEIP RSUs issued in respect of the Exit Event Class B units is $32.5 million, of which $4.0 million is expected to be recognized through fiscal 2021 and the remaining amount expensed on the occurrence of an Exit Event. In the third quarter of fiscal 2016, the Company recorded two one time compensation expenses in relation to the allocation of MEIP shares and MEIP RSUs in respect of the C, D and E units. A $9.0 million expense was recorded to account for the fair value of MEIP units that fully vested as a result of their respective return thresholds being met through the IPO. Additionally, a $1.5 million expense was recorded to account for the unvested MEIP units that were allocated MEIP RSUs, in which requisite service requirements had already been partially met at the time of the IPO. In addition, the Company recognized $0.6 million of compensation expense for fiscal 2016 to account for the remaining fair value of the C, D and E MEIP units and the incremental fair value that resulted from the conversion to MEIP shares and MEIP RSUs. The compensation expense will be recorded on a straight line basis over five years. The total unrecognized compensation expense for the C, D, and E units is $10.9 million, which will be recognized through fiscal 2021. Patheon N.V. 2016 Omnibus Incentive Plan In July 2016, the Company adopted the Patheon N.V. 2016 Omnibus Incentive Plan (the "Omnibus Plan") in order to align the long-term financial interests of selected participants with those of our shareholders, strengthen the commitment of such persons to the Company and our affiliates, and attract and retain competent and dedicated persons whose efforts will result in our long-term growth and profitability. The Omnibus Plan provides for the issuance of options, share appreciation rights, restricted shares, restricted shares units, share bonuses, other share-based awards and cash awards to selected officers, employers, non-employee directors and consultants. The maximum number of ordinary shares reserved and available for issuance under the 2016 Plan is 12,226,935 ("Omnibus Pool"). Stock options can be settled through cash or by issuing additional shares from the Omnibus Pool. Restricted Share Units At the time of the IPO, the Company granted a total of (i) 460,801 restricted share units to certain members of management and (ii) 59,525 restricted share units to non-employee directors (collectively, the "Standard RSUs"), excluding the MEIP RSUs outlined above. The Standard RSUs granted to management vest in equal installments over three years and the Standard RSUs granted to non-employee directors vested on November 1, 2016. The Standard RSUs are not subject to performance based criteria and have a fair value of $21.00, the stock price at the date of grant. During fiscal 2016, $2.9 million of stock compensation expense was recognized in relation to the Standard RSUs. As of October 31, 2016, unrecognized stock compensation expense related to Standard RSUs was $6.6 million, which will be recognized through fiscal 2019. A summary of Standard RSUs activity for fiscal 2016 is as follows:
As of October 31, 2016, there were 450,184 Standard RSUs outstanding, of which none are exercisable. Stock Options At the time of the IPO, the Company granted 1,145,338 stock options to certain members of management. The stock options were granted with an exercise price of $21.00 per share, with 431,052 of the granted stock options ("Regular Options") vesting equally over three years. The remaining stock options ("EBITDA Options") were granted to a senior officer and vest based on performance based criteria, using Credit Agreement Adjusted EBITDA as the performance metric. Credit Agreement Adjusted EBITDA is defined as the Company's Adjusted EBITDA, as defined in Note 14, plus pro forma cost savings, synergies and pre-acquisition results. The estimated fair value of all stock options granted is $8.29 per option and was estimated using a Black-Scholes valuation model, using the following assumptions.
During fiscal 2016, $0.6 million of stock compensation expense was recognized in relation to stock options. No expense was recognized in relation to the EBITDA Options, as the performance based criteria is deemed not probable as of October 31, 2016. As of October 31, 2016, total unrecognized compensation expense related to unvested Regular Options was $2.0 million, which is expected to be recognized over the three year vesting period, and total unrecognized compensation expense for the unvested EBITDA Options was $6.0 million, which will be recognized over the requisite service period when the performance based criteria is deemed probable to occur. A summary of stock option activity for fiscal 2016 is as follows:
As of October 31, 2016, there were 1,021,584 stock options outstanding, of which none were exercisable. Incentive Stock Option Plan Prior to March 11, 2014, the Company had an incentive stock option plan in which directors, officers and key employees of the Company and its subsidiaries, as well as other persons engaged to provide ongoing management or consulting services to Patheon, were eligible to participate. As of March 10, 2014, the total number of restricted voting shares issuable under the plan was 15,500,151 shares, of which there were stock options outstanding to purchase 10,996,225 shares under the plan. The stock option program was canceled on March 11, 2014. No stock options were granted in fiscal 2014. For the purposes of calculating the stock-based compensation expense in connection with the Company's incentive stock option plan, the fair value of stock options was estimated at the date of the grant using the Black-Scholes option pricing model and the cost is amortized over the vesting period. The Company recorded stock-based compensation expense related to the incentive stock option plan in fiscal 2014 of $5.3 million. A summary of the plan activity during the fiscal year ended October 31, 2014 is as follows:
There was no unrecognized compensation cost at the end of fiscal 2014. |
Financial Instruments, Fair Value and Risk Management |
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Financial Instruments, Fair Value and Risk Management | FINANCIAL INSTRUMENTS, FAIR VALUE AND RISK MANAGEMENT Categories of financial assets and liabilities The carrying values of the Company's financial instruments, including those held for sale on the consolidated balance sheets are classified into the following categories:
(1) Includes cash and cash equivalents in bank accounts bearing interest rates up to 1% as well as held for trading investments of $1.4 million and $1.7 million related to the Company's US deferred compensation plan as of October 31, 2016 and 2015, respectively, which is invested in mutual funds and common/collective trusts measured at net asset value. (2) Includes accounts receivable, net of an allowance for doubtful accounts of $2.9 million and $3.9 million at October 31, 2016 and 2015, respectively. (3) Includes short-term borrowings, accounts payable, accrued liabilities and long-term debt. (4) Includes the Company's forward contracts in fiscal 2016 and fiscal 2015. (5) Represents the fair value of the Biologics earnout agreement. (6) Available-for-sale securities are in the form of bonds with the Austrian Government. The Company has determined the estimated fair values of its financial instruments based on appropriate valuation methodologies; however, considerable judgment is required to develop these estimates. The fair values of the Company's financial instruments are not materially different from their carrying values. Fair value measurements The Company classifies and discloses its fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (Level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The fair value is principally applied to financial assets and liabilities such as derivative instruments consisting of foreign exchange forward contracts, available-for-sale securities relating to Austrian Government bonds, held-for-trading securities relating to the Company's U.S. deferred compensation plan, and a liability relating to an earnout payment on future Biologics operating results. The following table provides a summary of the financial assets and liabilities that are measured at fair value as of October 31, 2016 and October 31, 2015:
Level 1 - Based on quoted market prices in active markets. Level 2 - Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3 - Unobservable inputs that are not corroborated by market data. The following table presents the fair value of the Company's derivative financial instruments and their classifications on the consolidated balance sheets as of October 31, 2016 and October 31, 2015:
The Company has the option to net settle its derivatives with the counter party under the terms of its contracts and as such any unrealized positions are recorded net. As of October 31, 2016, the Company had gross unrealized losses of $2.7 million and gross unrealized gains of less than $0.1 million under its derivative contracts. As of October 31, 2015, the Company had gross unrealized losses of $7.9 million and gross unrealized gains of $0.3 million under its derivative contracts. The following is a summary of asset impairments that were recorded in fiscal 2016, 2015 and 2014:
Long-term obligations As of October 31, 2016, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
As of October 31, 2015, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on the quoted market prices for the same issues or on the current rates offered for debt of similar remaining maturities. Foreign exchange forward contracts and other arrangements The Company utilizes financial instruments to manage the risk associated with fluctuations in foreign exchange and interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. As of October 31, 2016, the Company's Canadian operations had entered into foreign exchange forward contracts to sell a net aggregate amount of $97.2 million (USD). These contracts hedge the Canadian operations expected exposure to U.S. dollar denominated receivables and mature at the latest on October 25, 2017, at an average exchange rate of $1.3013 Canadian dollars per U.S. dollar. The mark-to-market value of these financial instruments as of October 31, 2016 was a net unrealized loss of $2.7 million, which has been recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax. As of October 31, 2015, the Company's Canadian operations had entered into foreign exchange forward contracts to sell a net aggregate amount of $146.7 million (USD). These contracts hedge the Canadian operations expected exposure to U.S. dollar denominated receivables and mature at the latest on January 4, 2017, at an average exchange rate of $1.2401 Canadian dollars per U.S. dollar. The mark-to-market value of these financial instruments as of October 31, 2015 was a net unrealized loss of $7.6 million, which has been recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax. As of October 31, 2016, the Company did not hold Euro related foreign exchange forward contracts. As of October 31, 2015, the Company’s Austrian operations had entered into foreign exchange forward contracts to sell an aggregate amount of €1.4 million. These contracts hedge the Austrian operations expected exposure to U.S. dollar denominated raw material purchases and mature at the latest on March 24, 2016, at an average exchange rate of $1.0594 U.S. dollars per Euro. The mark-to-market value of these financial instruments as of October 31, 2015 was an unrealized loss of less than $0.1 million, which has been recorded in accumulated other comprehensive income in shareholders’ deficit, net of associated income tax. On October 30, 2015, the Company entered into a spot buy to purchase $24.0 million (U.S. Dollars) for €21.8 million on November 2, 2015. The spot buy guaranteed the October 30, 2015 Euro to USD exchange rate for a November 2, 2015 interest payment due on the Senior PIK Toggle Notes. The settlement of the contract resulted in an unrealized gain of less than $0.1 million. Biologics Earnout The Company acquired a portion of its Biologics business from DSM through the DPP acquisition in March 2014. In connection with the DPP acquisition, DSM was entitled to receive certain additional future contingent payments based on the performance of the acquired biologics business (the "earnout"). Under the terms of the original contribution agreement, the earnout only related to the DSM biologics business acquired in March 2014 and the earnout liability was payable by the Partnership, the parent of the Company before the Company's IPO. The value of the earnout liability as of January 29, 2016 was $36.0 million. On January 29, 2016, the Company, the Partnership, JLL, and DSM entered into an agreement (the "Earnout Agreement") whereby the Partnership’s earnout liability was legally assigned to the Company. The assignment of the liability from the Partnership to the Company was deemed a capital transaction with the Partnership of $36.0 million. Concurrently, the calculation of the earnout consideration was revised to include the future earnings of the Company’s entire biologics business ("Biologics Adjusted EBITDA"), which includes biologics business acquired in connection with a September 2014 acquisition of Gallus Pharmaceuticals. As a result of executing this Earnout Agreement, the Company will pay additional consideration to DSM based on the achievement of certain Biologics Adjusted EBITDA targets, as defined in the Earnout Agreement, of the Company’s biologics business at the conclusion of the 2020 fiscal year. If the Company sells or disposes of the biologics business prior to the end of the 2020 fiscal year, Biologics Adjusted EBITDA will be calculated by applying a 10% compounded annual growth rate through the remaining period ending October 31, 2020 to the Biologics Adjusted EBITDA for the twelve-month period ended on the last day of the month immediately preceding the date of such sale or disposition. The Company's maximum and minimum payments to DSM under the terms of the Earnout Agreement is $60.0 million and $25.0 million, respectively. Using the revised earnout definition, the value of the earnout liability as of January 31, 2016 was $31.1 million and resulted in the Company recognizing income of $4.9 million in the first quarter of fiscal 2016. The Company estimated the value of the earnout by valuing the three payout tranches. The first tranche of the $25.0 million minimum earnout payment, which is not contingent to Biologics Adjusted EBITDA performance, was estimated by discounting the $25.0 million using cost of debt of the Company. The values of the remaining two tranches, (i) an additional $25.0 million earnout payment which will be realized gradually as Biologics Adjusted EBITDA reaches $98.0 million, and (ii) an additional $10.0 million earnout payment which will be achieved gradually as Biologics Adjusted EBITDA approaches $110.0 million, were estimated using an option pricing framework, where the Company used a modified Black-Scholes model. The Company adjusted the earnout value to its estimated fair value as of October 31, 2016 to $33.8 million. The Company has recorded $2.7 million in expense for fiscal 2016 relating to marking the liability to its estimated fair value. The October 31, 2016 earnout valuation applies an asset volatility of 30% and an asset beta of 1.0. A 1% change in asset volatility would have an impact on the value of approximately +/- $0.2 million while a 0.1 change in beta would have an impact on the value of approximately +/- $0.5 million. Assumptions are level 3 in nature. The earnout liability activity is summarized as follows for fiscal 2016:
Gain/loss activity relating to the earnout is recorded in other operating income on the consolidated statements of operations. Risks arising from financial instruments and risk management The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange and interest rate), credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. The Company does not purchase any derivative financial instruments for speculative purposes. Financial risk management is the responsibility of the Company's corporate treasury. The corporate treasury department works with the Company's operational personnel to identify, evaluate and, where appropriate, hedge financial risks. The Company's corporate treasury department also monitors material risks and discusses them with the Audit Committee of the Board of Directors. Foreign exchange risk As of October 31, 2016, the Company operated in Canada, the United States, Italy, France, the United Kingdom, the Netherlands, Australia, Germany, Austria, and Japan. Foreign exchange risk arises because the value of the local currency receivable or payable for transactions denominated in foreign currencies may vary due to changes in exchange rates ("transaction exposures") and because the non-U.S. dollar denominated financial statements of the Company may vary on consolidation into the reporting currency of U.S. dollars ("translation exposures"). The Company's most significant transaction exposure is from its Canadian operations. Approximately 90% of the cash receipts and 15% of the cash outflows relating to Canadian operations are transacted in U.S. dollars. As a result, the Company may experience transaction exposures because of volatility in the exchange rate between the Canadian and U.S. dollar. Based on the Company's current U.S. denominated net inflows, as of October 31, 2016, fluctuations of +/- 10% would, everything else being equal, have an effect on quarterly (loss) income before income taxes of approximately +/- $14.9 million, prior to hedging activities. The objective of the Company's foreign exchange risk management activities is to minimize transaction exposures and the resulting volatility of the Company's earnings. The Company manages this risk by entering into foreign exchange contracts. As of October 31, 2016, the Company has entered into foreign exchange contracts to cover approximately 76% of its Canadian-U.S. dollar cash flow exposures for the next twelve months. The amount of the Company's Euro denominated debt designated as a hedge against its net investment in its subsidiaries in Austria, The Netherlands, Germany, France and Italy, is €465.5 million as of October 31, 2016 (further discussed in Note 7). This hedge was originally designated in March 2014 as a part of the Company's acquisition of manufacturing sites from DSM and is re-designated on a quarterly basis. As of October 31, 2016, the balance of the net investment hedge was $70.7 million and is included in accumulated other comprehensive income (loss) in members' deficit. Any unrealized exchange losses are included in the consolidated statement of operations due to ineffectiveness. The following table summarizes the net investment hedge foreign exchange activity for the fiscal years ended October 31, 2016 and 2015:
Translation gains and losses related to certain foreign currency denominated intercompany loans are included as part of the net investment in certain foreign subsidiaries, and are included in accumulated other comprehensive income (loss) in shareholders' deficit. The following table summarizes the foreign currency activity on the intercompany loans that are included as part of the net investment in certain foreign subsidiaries for the fiscal years ended October 31, 2016 and 2015:
Credit risk Credit risk arises from cash and cash equivalents held with banks and financial institutions, derivative financial instruments (foreign exchange contracts with positive fair values), and credit exposure to customers, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company regularly assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors. Management also regularly monitors the utilization of credit limits. In cases where the credit quality of a customer does not meet the Company's requirements, a cash deposit is received before any services are provided. As of October 31, 2016 and October 31, 2015, the Company held deposits of $4.3 million and $7.3 million, respectively. Liquidity risk Liquidity risk arises when financial obligations exceed financial assets available at a particular point in time. The Company's objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at all times. The Company mitigates liquidity risk by maintaining cash and cash equivalents on-hand and through the availability of funding from credit facilities. As of October 31, 2016, the Company was holding cash and cash equivalents of $165.0 million and had undrawn lines of credit available to it of $182.4 million. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION An operating segment is a component of the Company (a) that engages in business activities from which it may earn revenues and incur expenses, (b) whose operating results are regularly reviewed by the Company’s chief operating decision maker (our Chief Executive Officer) to make decisions about resources to be allocated to the segment and to assess its performance, and (c) for which discrete financial information is available. The Company’s four operating segments are: North America Drug Product Services, or North America DPS, Europe Drug Product Services, or Europe DPS, Pharmaceutical Development Services, or PDS, and Drug Substance Services, or DSS. The North America DPS and Europe DPS operating segments met the aggregation criteria to be presented as one reportable segment referred to as DPS. As a result, the Company has determined it has three reportable segments: DPS, PDS, and DSS. The Company previously operated under three additional operating segments. The Biosolutions segment was sold on July 31, 2015 and the DPx Fine Chemicals, or DFC, segment was sold on August 31, 2015. The Banner Life Sciences, or BLS, segment was spun-off during fiscal 2015, however, its results are included within continuing operations through the spinoff date of July 31, 2015 because the Company has continuing involvement with BLS pursuant to certain service agreements between the parties. Before the spinoff date, the Other segment includes BLS operations. After the spinoff date, the Other segment represents Corporate activity only. See Note 4 for further discussion. The DPS segment includes commercial manufacturing outsourcing services, the PDS segment includes pharmaceutical development services, and the DSS segment includes active pharmaceutical ingredients and pharmaceutical intermediates. Corporate expenses primarily relate to general, administrative and sales and marketing expenses related to the corporate organization. These expenses are centrally directed and controlled and are not included in internal measures of segment operating performance. The CODM does not evaluate its operating segments using discrete asset information.
The Company accounted for inter-segment sales between DPS and BLS at cost plus a specified mark-up. Intersegment eliminations for fiscal 2015 and 2014 primarily represent inter-segment sales between DPS and BLS before the BLS spinoff on July 31, 2015. In fiscal 2015, as a result of the annual impairment testing of IPR&D, the Company incurred an impairment loss of $0.9 million as a result of a decision to no longer move forward with a project. Additionally, the company incurred an impairment loss of $3.2 million due to an updated valuation of land held by the Company at the divested Venlo facility. In fiscal 2014, as a result of the annual impairment testing of IPR&D, the Company incurred impairment losses of $9.7 million, stemming from changes in market factors and expected commercialization timing. The Company evaluates the performance of its segments based on segment Adjusted EBITDA. The Company's Adjusted EBITDA is income (loss) from continuing operations before repositioning expenses (including certain product returns and inventory write-offs recorded in gross profit), interest expense, foreign exchange losses reclassified from other comprehensive income (loss), refinancing expenses, acquisition and integration costs (including certain product returns and inventory write-offs recorded in gross profit), gains and losses on sale of capital assets, Biologics earnout income and expense, income taxes, impairment charges, remediation co sts, depreciation and amortization, stock-based compensation expense, consulting costs related to our operational initiatives, purchase accounting adjustments, acquisition-related litigation expenses and other income and expenses. Adjusted EBITDA is one of several metrics used to measure segment operating performance and is also used to determine executive compensation. "Adjusted EBITDA margin" is Adjusted EBITDA as a percentage of revenues. The Company's presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies and is not equivalent to "Consolidated EBITDA" as defined in the Credit Agreement (as discussed in Note 7). Below is a reconciliation of Adjusted EBITDA to its most comparable U.S. GAAP measure.
(1) Repositioning expenses for fiscal 2016 includes $1.9 million of inventory reserves related to the Swindon wind down recorded in cost of goods sold. See Note 15. (2) Acquisition and integration costs for fiscal 2015 includes $3.0 million of inventory reserves related to plant rationalization from the DPP acquisition recorded in cost of goods sold. As illustrated in the table below, revenues are attributed to countries based on the location of the customer's billing address, capital assets are attributed to the country in which they are located and goodwill is attributed to the country in which the entity to which the goodwill pertains is located:
* Includes Puerto Rico ** Primarily includes Japan
* Includes Puerto Rico ** Primarily includes Japan and other Asian countries
* Includes Puerto Rico ** Includes primarily Asia, Australia, and Latin America (excluding Mexico) During fiscal 2016, 2015 and 2014, the Company did not have any one customer that accounted for more than 10% of its total revenues. |
Repositioning Expenses |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repositioning Expenses | REPOSITIONING EXPENSES During fiscal 2016, the Company incurred $7.3 million in repositioning expenses, primarily from severance payments and contract cancellation costs resulting from a realignment of DPS operations and the final phase of the winding down of the older section of the Swindon facility ("Swindon wind down") to allow us to re-purpose that area. In addition, the Company recorded inventory reserves of $1.9 million for raw material and work in process inventory associated with the Swindon wind down, which was expensed through cost of goods sold. During fiscal 2015, the Company incurred $25.1 million in repositioning expenses, respectively, which related to DPP acquisition synergies, the termination of certain transition service agreements ("TSAs") with DSM and other operational initiatives. During fiscal 2014, the Company incurred $51.7 million in repositioning expenses, which related to DPP acquisition integration initiatives, the shutdown of the Venlo and Caguas facilities, outsourcing of certain back-office support functions and other operational initiatives. As part of the DPP acquisition, the Company executed TSAs with DSM, under which DSM performed certain shared services functions on behalf of the Company. During the first quarter of fiscal 2015, the Company notified DSM that it would not extend a majority of the services covered by these agreements beyond December 31, 2014. The Company reached a formal settlement with DSM relating to the termination of these services for €14.1 million in late fiscal 2015, which was paid in the first quarter of fiscal 2016. On July 2, 2014, the Company announced plans to close its DSS manufacturing facility in Venlo, The Netherlands. The Company ceased operations in February 2015 and transferred remaining production to other Patheon facilities. Because the business in the Venlo facility was transferred within the existing site network, its results of operations are included in continuing operations in the consolidated financial statements. The Company has completed the closure project and incurred €29.5 million in severance and other shut down related costs in fiscal 2015. The following is a summary of these expenses and other charges associated with operational improvements as of and for the fiscal years ended October 31, 2016, 2015 and 2014:
The balance of repositioning liabilities as of October 31, 2016 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company did not have any long-term repositioning liabilities as of October 31, 2016.
The balance of repositioning liabilities as of October 31, 2015 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company did not have any long-term repositioning liabilities as of October 31, 2015.
$46.5 million of the total repositioning liabilities as of October 31, 2014 was recorded in accounts payable and accrued liabilities while $0.1 million was recorded in other long-term liabilities on the consolidated balance sheet. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating leases The Company has entered into long-term rental agreements expiring at various dates until 2023. The future rental payments for the next five years and thereafter are estimated as follows:
The Company's total rental expenses related to its operating leases for fiscal 2016, 2015 and 2014 were $10.9 million, $11.6 million and $10.5 million, respectively. Management Incentive Plan On March 11, 2014, the Company adopted the Management Long-Term Incentive Plan (the "LTIP") to provide long-term incentives to select key management employees of Patheon and its subsidiaries who have contributed and are expected to contribute materially to the success of the Company, and to reward outstanding performance by such employees. Leadership, key positions or identified key talent may be invited to participate in the LTIP during an identified plan year. Compensation is payable under this plan upon an Exit Event by the controlling investors of the Company (JLL and DSM), if the participant is still employed by the Company, or a qualifying termination, as defined. An Exit Event is defined as the earlier of: (a) a change of control, and (b) in connection with or following an Initial Public Offering ("IPO"), the sale or disposition by JLL or any of its affiliates of equity securities such that, immediately following such sale or disposition, either (i) JLL and its affiliates own less than 20% of the outstanding equity securities of the Partnership or the Partnership offeror, calculated on a fully-diluted basis, or (ii) JLL and its affiliates have received, in the aggregate, distributions in respect of such sale or disposition (together with any sale or disposition occurring prior thereto) equal to or in excess of 250% of the initial capital contributions and any additional capital contributions made by JLL and its affiliates for all equity securities of the Partnership or the Partnership offeror held by JLL and its affiliates prior to such sale or disposition. Not later than 90 days following commencement of each applicable Company fiscal year that would end during the term of the LTIP, the compensation committee of the board of directors of the Company (the "Compensation Committee") will determine, in its sole and absolute discretion, with respect to such fiscal year, (i) the Participants (as defined in the LTIP) with respect to that fiscal year, (ii) the EBITDA Target (as defined in the LTIP), and (iii) the targeted amount of each Award. Each award shall be evidenced by a written notice and shall be deemed granted on the first day of the fiscal year with respect to which the Compensation Committee resolves to grant such award (the "Grant Date"). Awards are denominated as a percentage of the Participant’s base salary, with the target percentage based on the Participant’s level within the organization, as determined by the Compensation Committee in its sole and absolute discretion. All awards will be paid in the form of cash, or other property having a value equal to such cash payment, as determined by the Compensation Committee in its sole and absolute discretion. Under the LTIP, the Company has granted $10.1 million in outstanding awards from March 11, 2014 through October 31, 2016, all of which vest over a five-year period. The Company did not report any compensation expense for the LTIP during fiscal 2016 as this plan becomes payable only as a result of an event which is deemed to not be probable until the actual occurrence of the event. Contingencies Procaps Antitrust Matter On December 10, 2012, Procaps S.A. (‘‘Procaps’’) filed a complaint against the Company in the United States District Court for the Southern District of Florida (the ‘‘District Court’’) (Case No. 12-cv-24356-DLG). The complaint involves the Company’s collaboration agreement with Procaps, pursuant to which both companies agreed to work together with respect to the marketing of a line of certain prescription pharmaceutical soft-gel development and manufacturing services. Procaps alleges that the Company’s acquisition of Banner, a business that historically has generated less than 10% of its revenues from softgel services for prescription pharmaceuticals, transformed the collaboration agreement into an anticompetitive restraint of trade and an agreement between direct competitors to set prices, divide markets and/or allocate geographic territories. Procaps seeks (i) a declaratory judgment that the collaboration agreement must cease and/or terminate; (ii) an injunction requiring that Patheon divest all of Banner’s soft-gel manufacturing capabilities; and (iii) monetary damages under federal and state antitrust and unfair competition laws, including treble damages for violations of the Sherman Act. Patheon subsequently answered Procaps’ complaint and filed its affirmative defenses to the complaint. In July 2014, upon Motion for Summary Judgment by Patheon, the court dismissed Procaps’ unfair competition claims, leaving only the antitrust claims in dispute. In March 2015, the court ordered trial to commence on November 16, 2015. In October 2015, the court granted Patheon’s motion for summary judgment with respect to all of Procaps’ remaining claims in this matter. In November 2015, Procaps filed a notice of appeal with the United States Court of Appeals for the Eleventh Circuit (the ‘‘11th Circuit Court’’). Procaps filed its initial brief with the 11th Circuit Court in February 2016 and we filed our reply brief in May 2016. Procaps filed its reply to our reply brief in June 2016. The 11th Circuit Court heard oral argument in this matter in November 2016. In May 2016, Procaps filed a request for arbitration with the International Court of Arbitration of the International Chamber of Commerce. The request for arbitration involves the above-mentioned collaboration agreement. Procaps alleges that (i) Patheon’s acquisition of Banner violated the exclusivity provision of the collaboration agreement, (ii) Patheon failed to return or destroy confidential information of Procaps, (iii) Patheon was unjustly enriched by obtaining the benefit of such confidential information to which it was not entitled, and (iv) Patheon breached implied duties of good faith and fair dealing in carrying out the collaboration agreement. Procaps seeks (i) with respect to the alleged breaches, compensatory damages and (ii) with respect to the claim for unjust enrichment, (a) disgorgement of profits received by Patheon by using any confidential information of Procaps, (b) repayment for all payments made to Patheon pursuant to the collaboration agreement, and (c) payment for the value of any intellectual property associated with the collaboration agreement. The Company filed its answer to the request for arbitration with the International Court of Arbitration of the International Chamber of Commerce in June 2016. The arbitration hearing on the merits in this matter is currently scheduled for March 2017. The Company has not included any accrual in the consolidated financial statements as of October 31, 2016 related to these matters as a result of its assessment that the likelihood of a material loss in connection with these matters is not probable. However, an adverse outcome in this matter could have a material adverse effect on the Company’s business, results of operations and financial condition. Oral Contraceptive Litigation A civil action is pending in the Commonwealth of Pennsylvania against the Company and one of its customers in connection with the recall of certain lots of allegedly defective products manufactured by the Company for the customer. The customer has given the Company notice of its intent to seek indemnification from the Company for all damages, costs and expenses, pursuant to the manufacturing services agreement between the customer and the Company. The action was filed in Court of Common Pleas of Philadelphia Country, in Philadelphia, Pennsylvania in November 2015 on behalf of 113 plaintiffs who were originally part of a putative class action commenced in state court in Georgia in October 2011 on behalf of 115 plaintiffs and removed by defendants to the United States District Court for the Northern District of Georgia ("Georgia District Court") under the Class Action Fairness Act ("CAFA"). Defendants opposed class certification and class certification was denied. The Georgia action was ordered to proceed as a two-plaintiff action in the Georgia District Court on behalf of the two named plaintiffs, whereupon plaintiffs' lawyers commenced a new action in the Court of Common Pleas in Philadelphia on behalf of the remaining 113 plaintiffs. The two-plaintiff action was dismissed by the Georgia District Court on October 28, 2016 on a motion for summary judgment brought by defendants. Defendants removed the action to the United States District Court for the Eastern District of Pennsylvania ("Pennsylvania District Court"), where it remains under a stay of remand, pending the outcome of an application to the United States Court of Appeals for the Third Circuit, filed by the defendants, for permission to appeal an order remanding the action back to Court of Common Pleas in Philadelphia. The order under appeal by defendants was granted to the plaintiffs on the basis that the action was not properly removable by the defendants to the Pennsylvania District Court under CAFA and that the plaintiffs intended to file the action as a mass tort in Court of Common Pleas in Philadelphia for purposes of case management on a mass tort basis under the Pennsylvania Rules of Civil Procedure. As the litigation is at an early stage, the Company is unable to estimate the potential damages for which the Company may be directly or indirectly liable. Italian Client Dispute In November 2015, the largest client of Patheon Italia S.p.A.’s (‘‘Patheon Italia’’), Ferentino, Italy facility filed a motion for injunctive relief in a Milan court under Article 700 of the Italian Civil Code. The client claims that remediation actions implemented by the Ferentino facility in response to an FDA inspection in May 2015, including, among other things, the use of a third party to certify all production batches for release, caused a significant slowdown in the quality control testing and batch release processes for the client’s product, thereby impairing the client’s ability to supply product in the amounts needed to fulfill the client's needs. The client sought an injunction ordering the Ferentino facility to (i) deliver products set forth in an October 6-7, 2015 release plan discussed by the parties; (ii) transfer products and documentation to the client to enable the client to perform the necessary quality control testing and release the products; and (iii) continue manufacture of the products at the capacity levels set forth in the supply agreement between the parties. The client further asked the court to impose a penalty of €0.2 million per day for every day that the Ferentino facility failed to comply with the order. On December 7, 2015, Patheon Italia filed a response to the motion, denying all the claims set forth in the client’s motion and asserting several defenses. In particular, Patheon Italia informed the court that the parties had in fact executed an amendment to the existing quality agreement agreeing to transfer the testing and release responsibilities to the client, such amendment was executed prior to the filing of the motion by the client and should have been disclosed to the court in the client’s motion. On December 10, 2015, the court held a hearing in this matter and on December 18, 2015, denied the client’s motion. The client has filed an appeal to the court's decision, which was heard on February 11, 2016. On February 29, 2016, the appeals court denied the client's appeal. The supply agreement with the client includes an arbitration provision and in its initial motion, the client indicated its intention to file an arbitration claim seeking money damages in this matter. This matter is in the early stages and the Company is unable to estimate the potential damages for which Patheon Italia may be liable if the client files an arbitration claim and prevails in such proceeding. Other The Company may be subject to lawsuits, investigations and other claims, including environmental, labor, product, customer disputes and other matters in the normal course of operations and otherwise. The Company believes that adequate provisions have been recorded in its consolidated financial statements where required. Although it is not possible to estimate the extent of potential costs, if any, the Company believes that the ultimate resolution of such contingencies will not have a material adverse impact on its results of operations, financial position or liquidity. The Company's tax filings are subject to audit by taxation authorities. Although the Company believes that it has adequately provided for income taxes based on the information available, the outcome of audits cannot be known with certainty and the potential impact on the financial statements is not determinable. |
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Related Parties | RELATED PARTIES Related Party Transactions JLL Partners The Company has a service agreement with JLL Partners Inc., some JLL Partners affiliates and DSM whereby the Company will reimburse the parties for management, consulting, financial, and other business services provided under the agreement. The amounts spent on these services, as well as the amounts payable outstanding in relation to these services, are shown in the related party tables below. DSM The Company has transition service agreements ("TSAs") with DSM resulting from the DPP acquisition whereby DSM performs certain shared service functions on behalf of the Company. Additionally, the Company performs certain services on behalf of DSM. The revenue and expenses relating to these services, as well as the accounts receivable and payable outstanding in relation to these services, are shown in the related party tables below. The Company decided not to extend a majority of the service agreements covered by the TSA beyond December 31, 2014 and as such notified DSM in the first quarter of fiscal 2015. The Company reached a formal settlement with DSM relating to the termination of these services for €14.1 million in late fiscal 2015, which was paid in the first quarter of fiscal 2016. Banner Life Sciences The Company has a management service agreement with Banner Life Sciences whereby the Company will provide various management, financial, legal and other business services to Banner Life Sciences. Additionally, the Company has two service agreements with Banner Life Sciences whereby the Company is able to both provide and receive services from Banner Life Sciences. Both agreements were effective August 1, 2015. In the first quarter of fiscal 2016, Banner Life Sciences sold their commercial business to a third party. The future economic impact of the service agreements was transferred with the sale. The revenue and expenses relating to these services, as well as the accounts receivable and payable outstanding in relation to these services, are shown in the related party tables below.
Equity Method Investments Banner Life Sciences In October 2015, the Company invested $5.0 million in Banner Life Sciences. The investment resulted in Banner Life Sciences becoming a variable interest entity, but the entity is not consolidated as the Company does not have the ability to control the entity and therefore does not have the power to direct Banner Life Sciences' activities. The Company's maximum exposure to loss relating to this variable interest entity is limited to the carrying value of the investment. The investment is presented within investments in the consolidated balance sheets. In the second quarter of fiscal 2016, the Company received a $2.4 million cash distribution from Banner Life Sciences. Percivia The Company holds a 50.0% interest in Percivia, a limited liability company for the purpose of performing research and development activities and licensing certain technology. In the second quarter of fiscal 2016, the Company received a $1.2 million return of capital from Percivia in the form of a cash distribution. Chemiepark The Company holds a 47.5% interest in Chemiepark, a company tasked with providing fire protection for the chemicals site in Linz, Austria. BSP Pharmaceuticals The Company previously held an 18% interest in two Italian companies (collectively referred to as "BSP Pharmaceuticals"), whose largest investor was previously an officer of the Company until December 31, 2009. As a result of the shareholders’ agreement with the other investors in BSP Pharmaceuticals that provides the Company with significant influence over BSP Pharmaceuticals’ operations, the Company accounted for its investment in BSP Pharmaceuticals using the equity method. In September 2015, the Company sold its ownership interest in BSP Pharmaceuticals for €19.0 million ($21.4 million) in cash, resulting in a gain on sale of investment of $16.2 million in fiscal 2015.
Investment carrying values are presented within investments in the consolidated balance sheets.
Equity method earnings are presented within other (income) loss, net in the consolidated statement of operations. |
Income Taxes |
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Income Taxes | INCOME TAXES The Company is subject to income tax in every country in which it does business. While the Company is a Netherlands public company (naamloze vennootschap) and files a consolidated income tax return in the Netherlands, many factors impact our income tax expense and cash tax payments. The most significant factor is that we conduct business in approximately ten countries and more than 90% of our revenue is earned outside of the Netherlands. Foreign earnings are reinvested overseas to fund our active business operations. Our tax liability is also affected by various tax incentives designed to encourage certain investments, such as research and development, and by acquisitions, dispositions and tax law changes. Finally, our tax returns are routinely audited and settlements of issues raised in these audits sometimes affect our tax rates. Below is a breakout of the Company's income (loss) from continuing operations before income taxes and applicable provision for (benefit from) income taxes:
The Company's consolidated effective tax rate is lower than the Netherlands' statutory rate of 25% primarily due to benefits from lower-taxed global operations, including the use of global funding structures. We recognize a benefit from global operations as income is generated from operations outside of the Netherlands ("foreign earnings") is subject to effective tax rates less than the Netherlands' statutory rate. Foreign earnings are generally reinvested outside of the Netherlands and are not subject to current Netherlands income tax. A reconciliation between the Netherlands statutory tax rate of 25.0% and the Company's effective tax rate of (222.2)% were as follows:
The tax effects of significant items comprising the Company's net deferred income tax assets and liabilities are as follows:
The Company has tax effected net operating losses, consisting of domestic and foreign, of $190.1 million. Of the $190.1 million, $101.3 million of these losses have an indefinite life and $88.8 million have expiry dates ranging from October 31, 2018 to October 31, 2035. The Company is offsetting net operating losses by uncertain tax positions of $3.3 million. The Company has tax credits of $34.5 million with expiry dates beginning October 31, 2017. The Company is offsetting tax credits by uncertain tax positions of $5.1 million and indirect tax expenses of $5.6 million. In fiscal 2015, the Company realized certain deferred tax assets that arose directly from tax deductions related to equity compensation that were in excess of the compensation recognized for financial reporting. As a result, equity was increased by $7.8 million per ASC 740. In the second quarter of fiscal 2016, the Company's United Kingdom subsidiary ("UK subsidiary") released a $15.0 million valuation allowance on its deferred tax assets. The UK subsidiary's deferred tax assets were primarily the result of net operating losses from trading activities. The released allowance excluded the UK subsidiary's allowances attributable to unrealizable assets. The allowance was released on the basis of management's assessment that the deferred tax assets of the UK subsidiary are more likely than not to be realized. In the third quarter of fiscal 2016, the Company's Puerto Rican subsidiary ("PR subsidiary"), released a $4.8 million valuation allowance on its deferred tax assets. The PR subsidiary's deferred tax assets were primarily the result of net operating losses from trading activities and capital events. The released allowance excluded the PR subsidiary's allowances attributable to unrealizable assets. The allowance was released on the basis of management's assessment that the deferred tax assets of the PR subsidiary are more likely than not to be realized. In the fourth quarter of fiscal 2016, the Company's Canadian subsidiary ("CA subsidiary"), released a $27.4 million valuation allowance on its deferred tax assets. The CA subsidiary's deferred tax assets were primarily the result of investment tax credits from trading activities. The released allowance excluded the CA subsidiary's allowances attributable to unrealized assets. The allowance was released on the basis of management's assessment that the deferred tax assets of the CA subsidiary are more likely than not to be realized. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. Currently, the Company has determined that it is more likely than not that its assets in Austria, France, and Germany will not be realized and therefore required a full valuation allowance against them. In addition, the Company has determined that it is more likely than not that a portion of its assets in Canada, the Netherlands, Puerto Rico, United Kingdom and the United States will not be realized and therefore required a partial valuation allowance against them. The net effect was an increase to the valuation allowance, outside of valuation allowance releases, on the Company’s tax assets. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. The Company also accrues for potential interest and penalties related to unrecognized tax positions within provision for income taxes on the consolidated statement operations. Interest and penalties of $1.5 million was recorded for the year ended October 31, 2016, with less than $0.1 million in interest and penalties recorded for each of the years ended October 31, 2015 and 2014. As of October 31, 2016, 2015 and 2014, unrecognized tax benefit positions were $15.5 million, $12.0 million and $10.0 million, respectively. The increase in the current year is primarily related to the ongoing Italian audit and timing of certain deductions in various jurisdictions. If the unrecognized tax benefits were recognized, the result would increase the Company's income tax expense by $14.6 million, $11.2 million and $4.0 million, respectively. For fiscal 2017, the Company does not expect a material change in the total amount of unrecognized tax positions. A reconciliation of the Company's tax positions is below:
As a result of the Company’s debt service obligations, the Company is asserting under ASC 740-30 that unremitted foreign earnings of our Austrian and German operations are no longer permanently reinvested as of October 31, 2016. In addition, a portion of the earnings of certain United States operations are no longer permanently reinvested as of October 31, 2016. All other earnings of our foreign operations are permanently reinvested. The Company consider the following matters, among others, in evaluating our plans for indefinite reinvestment of a subsidiary’s earnings: (i) the forecasts, budgets and financial requirements of both the Company and our other foreign subsidiaries, both for the long term and for the short term; (ii) the tax consequences of any decision to reinvest earnings of each subsidiary, including any changes in local tax law relating to the treatment of these unremitted earnings; and (iii) any local and foreign government programs or regulations relating to the repatriation of these unremitted earnings. Accordingly, the Company did not record deferred tax liabilities on approximately $253.4 million of unremitted earnings of the aforementioned operations as any earnings distributions will be tax free under current tax laws and treaties of Austria, Germany, the Netherlands and the United States. The Company did not recognize deferred tax liabilities on approximately $282.3 million of unremitted foreign earnings of all other subsidiaries as these earnings are intended to be indefinitely reinvested in those operations. It is not practicable to estimate the amount of unrecognized deferred tax liabilities for these undistributed foreign earnings because of complexities in a hypothetical calculation. During fiscal 2013, the Canada Revenue Agency began an income tax audit of the CA subsidiary for the tax years 2011 and 2012. This audit is still ongoing as of October 31, 2016. During fiscal 2014, the Italian Revenue Service began an examination of the Company's Italian subsidiary’s ("IT subsidiary") 2010-2013 income tax returns. An assessment was received for the 2010 tax return and is under appeal. As of October 31, 2016, the audit for the remaining 2011-2013 tax returns has not been completed. In the second quarter of fiscal 2016, the Company recorded an unrecognized tax expense of $3.5 million, including penalties and interest, related to the Italian Revenue Service examination of the IT subsidiary's 2010-2013 income tax returns. During fiscal 2015, the Austrian Ministry of Finance began an audit of the Company's Austrian operations for tax years 2010-2014. This audit is still ongoing as of October 31, 2016. Statutes related to foreign and state jurisdictions are open from October 31, 2010 to October 31, 2016. Certain carry forward tax attributes generated in prior years remain subject to examination and adjustment. |
Other Information |
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Other Information | OTHER INFORMATION Foreign exchange During fiscal 2016, 2015 and 2014, the Company recorded a foreign exchange loss of $5.7 million, $17.8 million and $8.6 million, respectively. These amounts resulted from hedge and operating exposures. Net change in non-cash working capital balances related to continuing operations
Statements of cash flows non-cash investing and financing activities
(1) Refer to Note 13 for further information (2) Refer to Note 7 for further information (3) Refer to Note 12 for further information |
Quarterly Financial Data |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following is a summary of the Company's unaudited quarterly results of operations:
(1) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amount. |
Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On November 25, 2016, the Company entered into a definitive agreement to acquire an API facility in Florence, SC from Hoffman-La Roche Ltd. ("Roche") for $1.0 million in cash, plus a payment for certain associated inventory and spare parts. Roche has agreed to provide funds for certain accounts payable, capital expenditure and other liabilities of the facility. Additionally, the Company entered into a multi-year supply arrangement to manufacture certain products for Roche. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
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Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect: the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the consolidated financial statements; and the reported amounts of revenue and expenses in the reporting period. Actual results could differ from those estimates. |
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Segment information | Segment information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as the components of an enterprise, with separate financial information available, that are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s four operating segments are: North America Drug Product Services, or North America DPS, Europe Drug Product Services, or Europe DPS, Pharmaceutical Development Services, or PDS, and Drug Substance Services, or DSS. The North America DPS and Europe DPS operating segments met the aggregation criteria to be presented as one reportable segment referred to as DPS. As a result, the Company has determined it has three reportable segments: DPS, PDS, and DSS. The Company previously operated under three additional operating segments. The Biosolutions segment was sold on July 31, 2015 and the DPx Fine Chemicals, or DFC, segment was sold on August 31, 2015. The Banner Life Sciences, or BLS, segment was spun-off during fiscal 2015, however, its results are included within continuing operations through the spinoff date of July 31, 2015 because the Company has continuing involvement with BLS pursuant to certain service agreements between the parties. Before the spinoff date, the Other segment includes BLS operations. After the spinoff date, the Other segment represents Corporate activity only. |
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash in interest-bearing accounts and term deposits with remaining maturities of less than three months at the date the term deposit was acquired. |
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Receivables and allowance for doubtful accounts | Receivables and allowance for doubtful accounts Trade receivables are primarily comprised of amounts owed to the Company through its operating activities and are presented net of an allowance for doubtful accounts. The Company monitors past due accounts on an ongoing basis and establishes appropriate reserves, if required, to cover probable losses. An appropriate allowance is determined by considering a number of factors, including the length of time accounts receivable are past due, historical loss history, the specific customer’s ability to pay its obligation, and the condition of the general economy and the customer’s industry. |
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Inventories | Inventories Inventories consisting of raw materials, packaging components, spare parts, work-in-process, and finished goods are valued at the lower of cost and net realizable value. Cost approximates average cost, and includes cost of purchased materials, costs of conversion, namely labor and overhead, and other costs, such as freight in, necessary to bringing the inventories to their present location and condition. |
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Capital assets | Capital assets Capital assets are carried at cost less accumulated depreciation. The cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss in the statement of operations. Depreciation is recorded on a straight-line basis. The Company uses the following ranges for estimated useful life:
Repairs and maintenance costs are charged to operations as incurred. |
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Goodwill | Goodwill The Company accounts for goodwill in accordance with ASC 350 - Intangibles - Goodwill and Other. The Company tests goodwill for impairment annually in the fiscal fourth quarter, with additional testing performed during earlier quarters, when necessary, if indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. Testing is performed with respect to each of the Company's reporting units that have been allocated goodwill. The Company assesses goodwill for possible impairment by comparing the carrying value of its reporting units to their fair values. The Company determines the fair value of its reporting units utilizing estimated future discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. In addition, the Company uses comparative market information and other factors to corroborate the discounted cash flow results. |
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Intangible assets | Intangible assets As a result of acquisition activity, the Company recorded various intangible assets, including developed technology, favorable agreements, non-compete agreements, customer relationships and trade names which are amortized on a straight-line basis over their respective estimated useful lives. |
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Impairment of capital assets and definite-lived intangible assets | Impairment of capital assets and definite-lived intangible assets The Company tests for impairment of capital assets and definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indicators are present, the Company assesses the recoverability of the asset by determining whether the carrying value of the asset can be recovered through undiscounted future cash flows. If the sum of the undiscounted cash flows is less than the carrying amount, the excess of the carrying amount over the estimated fair value, based on the discounted cash flows, is recorded as impairment. |
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Financial assets and liabilities | Financial assets and liabilities All financial instruments, including derivatives, are included in the consolidated balance sheets and are measured at fair value except for loans, receivables and other financial liabilities, which are measured at amortized cost. Held-for-trading financial instruments are recorded at cost as they are initiated and are subsequently measured at fair value and all revaluation gains and losses are included in net income (loss) in the period in which they arise. Available-for-sale financial instruments are recorded at cost as they are initiated and are subsequently measured at fair value and all unrealized revaluation gains and losses are included in other comprehensive income (loss) in the period in which they arise, unless any such losses are determined to be other-than-temporary. Realized gains and losses are included in net income (loss) in the period in which they arise. All financial instrument transactions are recorded on the settlement date. See Note 13 for further information. |
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Deferred financing costs | The Company expenses all transaction costs as incurred, including fees paid to advisors and other related costs. Financing costs, including underwriting and arrangement fees paid to lenders, are deferred and carried as an asset on the consolidated balance sheets and amortized into interest expense over the terms of the related agreements. |
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Derivatives and hedge accounting | Derivatives and hedge accounting The Company enters into foreign exchange forward contracts to reduce its exposure to foreign currency denominated cash flows. In addition, the Company has designated certain Euro denominated debt as a hedge against its net investment in its subsidiaries in Austria, The Netherlands, Germany, France and Italy. All derivative instruments are recorded in the consolidated balance sheets at fair value unless exempted from derivative treatment as a normal purchase and sale. All changes in their fair value are recorded in income (loss) unless the cash flow hedge accounting criteria are met, in which case the changes in the fair value associated with the effective portions of the hedge are recorded in other comprehensive income (loss). |
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Deferred revenues | Deferred revenues Customer agreements may provide reimbursements to the Company for the costs of certain capital assets used in the manufacturing process of their products. These reimbursements are recorded as deferred revenues and are recognized as revenue over the remaining minimum term of the agreements, including potential extensions. In certain instances, the Company receives prepayment for future services and these amounts are deferred and amortized into revenue when the required services have been provided. |
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Revenue recognition | Revenue recognition The Company recognizes revenue when services are completed in accordance with specific agreements with its customers and when all costs connected with providing these services have been incurred, the price is fixed or determinable and collectability is reasonably assured. Customer deposits on services in progress are included in accounts payable and accrued liabilities. In the case of manufacturing services, revenue is recognized upon shipment, upon receipt of goods by the customer in line with the delivery terms outlined in the contract, or when products pass quality assurance testing, in all cases where the risk has been transferred, service obligations have been performed, and the Company is entitled to payment under the terms of the contract. In the case of development related services, revenue is recognized on the achievement of specific substantive milestones in accordance with the respective development service contracts when performance has been completed. In the case of certain active pharmaceutical ingredient services, revenue is recognized using the proportional performance method for services performed to date. The Company accepts returns from its customers only for defective products. The impact of returns from customers is not significant to the business or the consolidated financial statements as a whole. |
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Employee benefit plans | Employee benefit plans The Company provides a number of benefit plans to its employees including: (a) defined benefit pension plans; (b) post-employment benefit plans; (c) defined contribution plans; and (d) unfunded termination indemnities. The cost of defined benefit pension plans and other post-employment benefits, which include health care and dental benefits, relating to employees' current service is expensed annually. The cost is computed on an actuarial basis using the projected benefit method, pro-rated based on service and management's best estimates of various actuarial factors, including salary escalation, other cost escalation and retirement ages of employees. The valuation of defined benefit pension plan assets is at current market value. An actuarial valuation is performed to calculate the expected return on plan assets. Past service costs resulting from plan amendments are deferred and amortized on a straight-line basis over the remaining service life of employees active at the time of amendment. Actuarial gains and losses arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period, or from changes in actuarial assumptions used to determine the accrued benefit obligation. The excess of the net accumulated actuarial gain or loss over 10% of the greater of the benefit obligations and the fair value of plan assets is amortized over the average remaining service period of active employees. The average remaining service period of the active employees covered by the pension plans and the other retirement benefit plans at the measurement date of October 31, 2016 is 19 years. As of October 31, 2015, the average remaining service period was 18 years. When the restructuring of a benefit plan gives rise to both a curtailment and a settlement of obligations, the curtailment is accounted for prior to the settlement. The cost of defined contribution plans is expensed as funds are contributed by the Company. Unfunded termination indemnities for the employees of the Company's subsidiaries in Italy are accrued based on Italian severance pay statutes. The liability recorded is the amount the employees would be entitled to if the employees' employment with the Company ceased as of the balance sheet date. |
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Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740 - Income Taxes. The asset and liability method is used, which requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities. The Company measures deferred tax assets and liabilities using tax rates in the respective jurisdictions in which it operates. In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that the Company will be able to realize some or all of the deferred tax assets. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of potentially complex tax regulations. The Company utilizes the guidance in ASC 740 to determine the accounting for uncertain tax positions. |
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Foreign exchange translation | Foreign exchange translation Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Translation gains and losses related to certain foreign currency denominated intercompany loans that are not expected to be settled in the foreseeable future are included as part of the net investment in certain foreign subsidiaries, and are included in accumulated other comprehensive income (loss) in stockholders' / members' deficit. Gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a component of accumulated other comprehensive (income) loss until either the sale or upon the complete or substantially complete liquidation by the Company of its investment in a foreign entity. |
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Stock-based compensation | Stock-based compensation The Company accounts for its stock-based compensation awards in accordance with ASC 718 - Compensation - Stock Compensation. ASC 718 requires companies to recognize compensation expense using a fair value based method for costs related to share-based payments including stock options and restricted stock units. The expense is measured based on the grant date fair value of the awards that are expected to vest, and the expense is recorded over the applicable requisite service period. In the absence of an observable market price for a share-based award, the fair value is based upon a valuation methodology that takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies and the risk-free interest rate. Forfeitures are recognized as they occur. |
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Earnings (loss) per share | Earnings (loss) per share The Company reports net earnings (loss) per share in accordance with ASC 260 - Earnings per Share. Under ASC 260, basic earnings per share, which excludes dilution, is computed by dividing net earnings or loss available to common shareholders by the weighted average number of common average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution due to securities that could be exercised or converted into common shares, and is computed by dividing net earnings or loss available to common stockholders by the weighted average of common shares outstanding plus the dilutive potential common shares. Diluted earnings per share includes stock options and restricted stock units using the treasury stock method. During a loss period, the assumed exercise of stock options has an anti-dilutive effect and therefore, these instruments are excluded from the computation of diluted earnings per share in a loss period. |
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Recently adopted and issued accounting pronouncements | Recently adopted accounting pronouncements In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The ASU states that disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component of an entity or group of components of an entity meets the criteria to be classified as held for sale, is disposed of by sale, or disposed of other than by sale. The guidance is effective for annual periods beginning on or after December 15, 2014, and is applied prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The Company adopted ASU No. 2014-08 on a prospective basis beginning on November 1, 2015, and such adoption did not have an impact on the Company's results of operations, financial condition and/or financial statement disclosures. Recently issued accounting pronouncements In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update provides specific guidance on a variety of cash flow classification issues. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied retrospectively for each period presented with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. Between March and May 2016, the FASB issued three Accounting Standards Updates relating to Revenue from Contracts with Customers (Topic 606). These updates, identified as No. 2016-08, No. 2016-10, and No. 2016-12, identified practical expedients and clarified various aspects of the new revenue recognition standard outlined in Accounting Standards Update 2014-09. The Company has reviewed these updates and does not believe they will materially impact the Company's future implementation of the standard. The effective date and transition requirements for ASU 2014-09 (and updated in ASU 2015-14) were not changed with these pronouncements. The Company is continuing to evaluate the overall impact of ASU 2014-9. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The impact on the consolidated financial statements from the adoption of this guidance is currently being evaluated by the Company. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Investments (Topic 323): Equity Method and Joint Ventures. This update eliminated the requirement to retrospectively adopt the equity method of accounting. Instead, the update requires the equity method investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified. This update also requires that an entity with an available-for-sale equity security that becomes qualified for equity method accounting to recognize the unrealized gain or loss in accumulated other comprehensive income through earnings at the date the investment becomes qualified for equity method accounting. The amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendment is applied prospectively with earlier application permitted. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future transactions. In March 2016, the FASB issued Accounting Standards Update No. 2016-05, Derivatives and Hedging (Topic 815). This update clarifies that a change in the counterparty of a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendment is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The impact on the consolidated financial statements from the adoption of this guidance is dependent on future hedging activity. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). This update revised the overall guidance on leases, which includes the requirement to recognize a lease asset and a lease liability for leases previously classified as operating leases. As a result, all leases will create an asset and a liability for a lessee. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact of this pronouncement. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This update revised the overall guidance on financial instruments, including superseding the guidance to classify equity securities with readily determinable fair values into different categories and requiring equity securities to be measured at fair value with changes in the fair value recognized through income. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments and improves financial reporting by providing relevant information about an entity's equity investments and reducing the number of items that are recognized in other comprehensive income. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendment is applied using a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with the exception of a prospective application on the amendment relating to equity securities without readily determinable fair values. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This update eliminated the requirement to an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Instead, the update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. For public business entities, the amendment is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendment is applied prospectively with earlier application permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This deferred the effective date of ASU 2014-09, which issued a converged standard on revenue recognition from contracts with customers with U.S. GAAP and IFRS. ASU 2014-09 was issued in May 2014 and the core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. For public business entities, the deferred effective date of the original amendment (ASU 2014-09) is for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. For all other entities, the deferred effective date of the original amendment (ASU 2014-09) is for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. Additionally, the pronouncement allowed early application for annual reporting periods beginning after December 15, 2016, the original effective date. There are two methods for adopting the standard amendment. The first method is to retrospectively adjust each reporting period presented. The second method is to retrospectively adjust with the cumulative effect recognized at the date of initial application along with additional disclosures in reporting periods that include the date of initial application. The Company is evaluating the impact of this new pronouncement along with the method of adoption. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330). An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this ASU more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The Board has amended some of the other guidance in Topic 330 to more clearly articulate the requirements for the measurement and disclosure of inventory. However, the Board does not intend for those clarifications to result in any changes in practice. Other than the change in the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value for inventory within the scope of this Update, there are no other substantive changes to the guidance on measurement of inventory. The ASU is effective to the Company for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2015-05 provides accounting guidance regarding fees paid as part of a cloud computing arrangement, which heretofore no such explicit guidelines existed. The guidance focuses on whether a cloud computing arrangement includes a software license element. If the agreement does include a software licensing element, that element should be accounted for in a manner consistent with the acquisition of other software licenses. This ASU is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt this amendment either: 1) prospectively to all arrangements entered into or materially modified after the effective date; or 2) retroactively. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU No. 2015-03 Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 provides accounting guidance regarding financial statement presentation of debt issuance costs related to a recognized debt liability. The guidance states that debt issuance costs related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with that of debt discounts. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This ASU is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, but only for financial statements which have not been previously issued. An entity should apply this guidance on a retrospective basis wherein the balance sheet of each individual period be adjusted to reflect the period-specific effect of the new guidance. Upon transition, an entity is required to comply with the appropriate disclosures associated with a change in accounting principle. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Assets Depreciation Schedule | Depreciation is recorded on a straight-line basis. The Company uses the following ranges for estimated useful life:
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Business Combinations (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The final purchase price allocation for the Gallus Acquisition is as follows:
The final purchase price allocation for the Agere Acquisition is as follows:
The final purchase price allocation for the DPP Acquisition is as follows:
The final purchase price allocation for the Irix Acquisition is as follows:
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Valuations of Finite-lived Intangible Assets Acquired | The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) Estimated using the with and without method under the income approach. Significant inputs were level 3 in nature. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) Estimated using the with and without method under the income approach. Significant inputs were level 3 in nature. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) In process research and development is currently classified as indefinite-lived intangible assets and will either begin to be amortized upon product approval and commercialization or written-off if not approved. The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. |
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Valuations of Indefinite-lived Intangible Assets Acquired | The following table sets forth the components of the acquired intangible assets by type:
(1) Estimated using the relief from royalty method under the income approach. Significant inputs were level 3 in nature. (2) Estimated using the multi-period excess earnings method under the income approach. Significant inputs were level 3 in nature. (3) In process research and development is currently classified as indefinite-lived intangible assets and will either begin to be amortized upon product approval and commercialization or written-off if not approved. |
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Schedule of Business Acquisition | The revenues, loss from continuing operations, loss from discontinued operations and net loss of DPP from March 11, 2014 to October 31, 2014 included in the consolidated statement of operations are as follows:
The revenues and loss from continuing operations of Agere for the period from March 21, 2015 through October 31, 2015 included in the consolidated statement of operations are as follows:
Refer to the following table for a breakout of the consideration:
The revenues and loss from continuing operations of Gallus from September 29, 2014 to October 31, 2014 included in the consolidated statement of operations are as follows:
The revenues and income from continuing operations of Irix for the period from April 1, 2015 through October 31, 2015 included in the consolidated statement of operations are as follows:
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Pro Forma Financial Information | The following table presents pro forma results of operations and gives effect to the DPP Acquisition and Gallus Acquisition as if the transactions had been consummated on November 1, 2013, the start of fiscal 2014. The Irix Acquisition and Agere Acquisition have been excluded from these results as the results of their operations individually and in the aggregate were not material to the results of operations for the periods presented. This unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what the actual results of operations would have been had the DPP Acquisition and Gallus Acquisition taken place on November 1, 2013, nor is it indicative of the future consolidated results of operations of the combined companies. In addition, the discontinued operations outlined in Note 4 have been reclassified out of these amounts to show the impact on continuing operations.
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Discontinued Operations and Other Strategic Initiatives (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The carrying value of the assets and liabilities transferred to the Partnership are as follows:
The results of the above dispositions have been recorded as discontinued operations, the results of which for the fiscal years ended October 31, 2016, 2015, and 2014 are as follows:
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Supplemental Balance Sheet Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consisted of the following:
The following is a rollforward of the Company's inventory provisions for fiscal 2016 and 2015:
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Schedule of Accounts Payable and Accrued Liabilities | The following is the breakdown of accounts payable and accrued liabilities:
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Schedule of Finite-Lived Intangible Assets Acquired | The following table summarizes gross carrying amounts, accumulated amortization, and accumulated impairments related to the Company's identifiable intangible assets as of October 31, 2016:
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Schedule of Indefinite-Lived Intangible Assets Acquired |
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Schedule of Finite-Lived Intangible Assets Future Amortization Expense | The definite-lived intangible asset amortization horizon is as follows:
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Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill during the years ended October 31, 2016 and October 31, 2015:
(1) The opening cumulative goodwill balance is reflective of historical impairment charges of the full value of goodwill, which includes a $172.5 million impairment related to Puerto Rico operations, a $0.1 million impairment related to the Banner Canada operations, a $1.3 million impairment related to the Biosolutions business, and a disposition impact on the sale of Banner Mexico of $3.1 million. (2) Represents goodwill measurement period adjustments on the DPP, Gallus, Irix and Agere Acquisitions. (3) Represents goodwill from the Irix and Agere Acquisitions. (4) Represents a measurement period adjustment on the Irix Acquisition in the second quarter of fiscal 2016. |
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Deferred Revenue | The following table summarizes the deferred revenue activity for fiscal 2016, 2015 and 2014:
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Capital Assets (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capital Assets | Depreciation is recorded on a straight-line basis. The Company uses the following ranges for estimated useful life:
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Schedule of Assets Under Capital Leases | Assets under capital leases and included within capital assets for fiscal years 2016 and 2015 are as follows:
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Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt in the accompanying consolidated balance sheets at October 31, 2016 and October 31, 2015 consists of the following:
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Schedule of Maximum Leverage Ratio | The following table discloses the maximum First Lien Leverage Ratios permitted under the Credit Agreement:
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Schedule of Redemption Prices | On and after February 1, 2017, the Company may redeem all or a portion of the Notes at the applicable redemption prices set forth below (expressed as percentages of principal amount redeemed), plus unpaid interest accruing on the principal amount redeemed to, but excluding, the Redemption Date:
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Schedule of Maturities of Long-term Debt | Estimated minimum annual repayments of long-term debt and capital leases based on current exchange rates for the next five years are:
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Schedule of Future Minimum Lease Payments for Capital Leases | Estimated minimum annual repayments of long-term debt and capital leases based on current exchange rates for the next five years are:
Estimated minimum annual repayments of long-term debt and capital leases based on current exchange rates for the next five years are:
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Other Long-term Liabilities (Tables) |
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Long-term Liabilities |
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Pension and Post-retirement Benefits (Tables) |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans | Information about the Company's defined benefit pension and other benefit plans, in aggregate, is as follows:
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Schedule of Assumptions Used | The following weighted-average assumptions were used to determine the projected benefit obligation of the Company's defined benefit and other post retirement plans at the end of the respective fiscal year:
The following weighted-average assumptions were used to determine the net periodic benefit cost of the Company's defined benefit and other post retirement plans during the respective fiscal year:
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Schedule of Health Care Cost and Dental Trend Rates | The following table outlines the effects of a one-percentage-point increase and decrease in the assumed health care and dental benefit trend rates.
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Schedule of Net Periodic Benefit Cost | The components of net periodic benefit cost from continuing operations for the defined benefit plans and other benefit plans for the respective fiscal years are as follows:
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Fair Value of Plan Assets | The fair values of the defined benefit plans' assets at October 31, 2016, by asset categories were as follows:
The fair values of the defined benefit plans' assets at October 31, 2015, by asset categories were as follows:
The Company's defined benefit plans currently have the following targets for these asset classes, which are intended to be flexible guidelines for allocating the plans' assets among various classes of assets, and are reviewed periodically and considered for readjustment when an asset class weighting is outside of its target (recognizing that these are flexible targets that may vary from time to time) with the objective of achieving the expected long-term rate of return on plan assets assumption, weighed against a reasonable risk level, as follows:
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Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid out of the Company's defined benefit plans and other post-retirement benefit plans:
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Earnings (Loss) Per Share (Tables) |
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The details of the computation of basic and diluted earnings (loss) per ordinary share are as follows:
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Stock Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Based Compensation | A summary of equity based compensation expense recognized during fiscal 2016, 2015 and 2014 is as follows:
(1) Relates to Class A units granted to an executive of Agere Pharmaceuticals as part of the Agere Acquisition |
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Schedule of Plan Activity | A summary of the plan activity during the fiscal year ended October 31, 2014 is as follows:
A summary of stock option activity for fiscal 2016 is as follows:
A summary of the MEIP activity for fiscal 2016 is as follows:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the Units for purposes of determining compensation expense was estimated on the grant date using the following weighted average assumptions:
The estimated fair value of all stock options granted is $8.29 per option and was estimated using a Black-Scholes valuation model, using the following assumptions.
The model incorporated the following assumptions:
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Schedule of Standard RSUs Activity | A summary of Standard RSUs activity for fiscal 2016 is as follows:
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Financial Instruments, Fair Value and Risk Management (Tables) |
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Value of Financial Assets and Liabilities | The carrying values of the Company's financial instruments, including those held for sale on the consolidated balance sheets are classified into the following categories:
(1) Includes cash and cash equivalents in bank accounts bearing interest rates up to 1% as well as held for trading investments of $1.4 million and $1.7 million related to the Company's US deferred compensation plan as of October 31, 2016 and 2015, respectively, which is invested in mutual funds and common/collective trusts measured at net asset value. (2) Includes accounts receivable, net of an allowance for doubtful accounts of $2.9 million and $3.9 million at October 31, 2016 and 2015, respectively. (3) Includes short-term borrowings, accounts payable, accrued liabilities and long-term debt. (4) Includes the Company's forward contracts in fiscal 2016 and fiscal 2015. (5) Represents the fair value of the Biologics earnout agreement. (6) Available-for-sale securities are in the form of bonds with the Austrian Government. |
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Summary of Financial Assets and Liabilities Measured at Fair Value | The following table provides a summary of the financial assets and liabilities that are measured at fair value as of October 31, 2016 and October 31, 2015:
Level 1 - Based on quoted market prices in active markets. Level 2 - Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3 - Unobservable inputs that are not corroborated by market data. |
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Schedule of Derivative Instruments in Statement of Financial Position | The following table presents the fair value of the Company's derivative financial instruments and their classifications on the consolidated balance sheets as of October 31, 2016 and October 31, 2015:
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Summary of Asset Impairments | The following is a summary of asset impairments that were recorded in fiscal 2016, 2015 and 2014:
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Schedule of Fair Values and Carrying Values of Long-term Debt | As of October 31, 2016, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
As of October 31, 2015, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
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Schedule of Earnout Liability Activity | The earnout liability activity is summarized as follows for fiscal 2016:
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Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the foreign currency activity on the intercompany loans that are included as part of the net investment in certain foreign subsidiaries for the fiscal years ended October 31, 2016 and 2015:
The following table summarizes the net investment hedge foreign exchange activity for the fiscal years ended October 31, 2016 and 2015:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Results |
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Reconciliation of Adjusted EBITDA | Below is a reconciliation of Adjusted EBITDA to its most comparable U.S. GAAP measure.
(1) Repositioning expenses for fiscal 2016 includes $1.9 million of inventory reserves related to the Swindon wind down recorded in cost of goods sold. See Note 15. (2) Acquisition and integration costs for fiscal 2015 includes $3.0 million of inventory reserves related to plant rationalization from the DPP acquisition recorded in cost of goods sold. |
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Schedule of Revenue, Capital Assets and Goodwill, by Country | As illustrated in the table below, revenues are attributed to countries based on the location of the customer's billing address, capital assets are attributed to the country in which they are located and goodwill is attributed to the country in which the entity to which the goodwill pertains is located:
* Includes Puerto Rico ** Primarily includes Japan
* Includes Puerto Rico ** Primarily includes Japan and other Asian countries
* Includes Puerto Rico ** Includes primarily Asia, Australia, and Latin America (excluding Mexico) |
Repositioning Expenses (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The following is a summary of these expenses and other charges associated with operational improvements as of and for the fiscal years ended October 31, 2016, 2015 and 2014:
The balance of repositioning liabilities as of October 31, 2016 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company did not have any long-term repositioning liabilities as of October 31, 2016.
The balance of repositioning liabilities as of October 31, 2015 was recorded in accounts payable and accrued liabilities on the consolidated balance sheet. The Company did not have any long-term repositioning liabilities as of October 31, 2015.
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The future rental payments for the next five years and thereafter are estimated as follows:
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Related Parties (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The revenue and expenses relating to these services, as well as the accounts receivable and payable outstanding in relation to these services, are shown in the related party tables below.
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Schedule of Related Party Equity Method Investments |
Investment carrying values are presented within investments in the consolidated balance sheets.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Below is a breakout of the Company's income (loss) from continuing operations before income taxes and applicable provision for (benefit from) income taxes:
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Schedule of Components of Income Tax Provision (Benefit) |
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Schedule of Effective Tax Rate Reconciliation | 25.0% and the Company's effective tax rate of (222.2)% were as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of significant items comprising the Company's net deferred income tax assets and liabilities are as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the Company's tax positions is below:
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Other Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net change in non-cash working capital balances related to continuing operations | Net change in non-cash working capital balances related to continuing operations
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Statements of cash flows non-cash investing and financing activities | Statements of cash flows non-cash investing and financing activities
(1) Refer to Note 13 for further information (2) Refer to Note 7 for further information (3) Refer to Note 12 for further information |
Quarterly Financial Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Quarterly Financial Information | The following is a summary of the Company's unaudited quarterly results of operations:
(1) Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per share amounts may not equal annual basic and diluted earnings per share amount. |
The Company (Details) |
12 Months Ended | ||
---|---|---|---|
Jul. 26, 2016
$ / shares
shares
|
Dec. 24, 2013 |
Oct. 31, 2016
segment
|
|
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Number of reportable segments | segment | 3 | ||
IPO | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Issuance of ordinary shares (in shares) | 29,464,286 | ||
Share price (in USD per share) | $ / shares | $ 21.00 | ||
IPO | DSM | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Shares sold by shareholder in IPO (in shares) | 4,761,905 | ||
Patheon N.V. | IPO | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Percentage of voting stock owned by the public | 24.00% | ||
JLL | JLL/Delta Patheon Holdings, L.P. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Ownership interest percentage | 51.00% | ||
JLL | Patheon N.V. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Entity ownership percentage | 38.00% | ||
DSM | JLL/Delta Patheon Holdings, L.P. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Ownership interest percentage | 49.00% | ||
DSM | Patheon N.V. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Entity ownership percentage | 34.00% | ||
JLL/Delta Patheon Holdings | Patheon N.V. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Entity ownership percentage | 4.00% |
Summary of Significant Accounting Policies - Segment Information (Details) |
12 Months Ended |
---|---|
Oct. 31, 2016
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 4 |
DPS reportable segment | 1 |
Number of reportable segments | 3 |
Number of discontinued operating segments | 3 |
Summary of Significant Accounting Policies - Capital Assets (Details) |
12 Months Ended |
---|---|
Oct. 31, 2016 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 50 years |
Building equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Computer software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computer software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Summary of Significant Accounting Policies - Employee Benefit Plans (Details) |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Accounting Policies [Abstract] | ||
Average remaining service period | 19 years | 18 years |
Business Combinations - Background (Details) - USD ($) $ in Millions |
Mar. 31, 2015 |
Mar. 20, 2015 |
Sep. 29, 2014 |
Mar. 11, 2014 |
---|---|---|---|---|
Irix | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 161.3 | |||
Cash payment | 160.3 | |||
Equity issued in acquisition | $ 1.0 | |||
Agere | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 27.1 | |||
Cash payment | 20.3 | |||
Equity issued in acquisition | $ 6.8 | |||
Gallus | ||||
Business Acquisition [Line Items] | ||||
Cash payment | $ 257.2 | |||
DPP | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 665.6 | |||
Cash payment | 17.4 | |||
DPP | JLL | ||||
Business Acquisition [Line Items] | ||||
Cash payment | $ 500.0 | |||
Voting interest acquired | 51.00% | |||
DPP | DSM | ||||
Business Acquisition [Line Items] | ||||
Cash payment | $ 114.4 | |||
Voting interest acquired | 49.00% | |||
DPP | JLL/Delta Patheon Holdings | DSM | ||||
Business Acquisition [Line Items] | ||||
Equity issued in acquisition | $ 49.9 | |||
Pension plan adjustment | $ 25.1 |
Business Combinations - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Mar. 31, 2015 |
Mar. 20, 2015 |
Oct. 31, 2014 |
Sep. 29, 2014 |
Mar. 11, 2014 |
---|---|---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||||
Goodwill | $ 281.6 | $ 284.4 | $ 192.0 | ||||
Irix | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 6.6 | ||||||
Accounts receivable | 16.8 | ||||||
Inventories | 8.9 | ||||||
Income taxes receivable | 0.1 | ||||||
Prepaid expenses and other | 0.2 | ||||||
Deferred tax assets | 2.9 | ||||||
Capital assets | 17.8 | ||||||
Intangible assets | 67.8 | ||||||
Goodwill | 83.3 | ||||||
Other long-term assets | 0.3 | ||||||
Accounts payable and accrued liabilities | (8.7) | ||||||
Deferred revenue - short-term | (7.6) | ||||||
Long-term debt | (0.2) | ||||||
Deferred tax liabilities | (26.9) | ||||||
Total purchase price | $ 161.3 | ||||||
Agere | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 1.7 | ||||||
Accounts receivable | 1.3 | ||||||
Prepaid expenses and other | 0.1 | ||||||
Capital assets | 3.7 | ||||||
Intangible assets | 2.1 | ||||||
Goodwill | 20.7 | ||||||
Accounts payable and accrued liabilities | (0.1) | ||||||
Long-term debt | (0.1) | ||||||
Deferred tax liabilities | (2.3) | ||||||
Total purchase price | $ 27.1 | ||||||
Gallus | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 0.9 | ||||||
Accounts receivable | 17.7 | ||||||
Inventories | 8.1 | ||||||
Prepaid expenses and other | 2.0 | ||||||
Capital assets | 72.5 | ||||||
Intangible assets | 111.7 | ||||||
Goodwill | 110.7 | ||||||
Other long-term assets | 0.1 | ||||||
Accounts payable and accrued liabilities | (13.2) | ||||||
Deferred revenue - short-term | (22.5) | ||||||
Deferred tax liabilities - short-term | (0.1) | ||||||
Long-term debt - current portion | (2.0) | ||||||
Long-term debt | (1.9) | ||||||
Deferred revenue - long term | (1.8) | ||||||
Other long-term liabilities | (0.8) | ||||||
Deferred tax liabilities - long-term | (24.2) | ||||||
Total purchase price | $ 257.2 | ||||||
DPP | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 10.2 | ||||||
Accounts receivable | 137.5 | ||||||
Inventories | 311.3 | ||||||
Income taxes receivable | 1.5 | ||||||
Prepaid expenses and other | 1.7 | ||||||
Deferred tax assets - short-term | 2.7 | ||||||
Capital assets | 397.1 | ||||||
Intangible assets | 101.6 | ||||||
Goodwill | 37.1 | ||||||
Deferred tax assets - long-term | 1.1 | ||||||
Investments | 9.1 | ||||||
Other long-term assets | 10.3 | ||||||
Accounts payable and accrued liabilities | (199.0) | ||||||
Income tax payable | (0.9) | ||||||
Deferred revenue - short-term | (34.2) | ||||||
Long-term debt - current portion | (2.8) | ||||||
Long-term debt | (9.2) | ||||||
Deferred revenue - long term | (28.4) | ||||||
Other long-term liabilities | (67.3) | ||||||
Deferred tax liabilities - long-term | (13.8) | ||||||
Total purchase price | $ 665.6 |
Business Combinations - Valuations of Intangible Assets Acquired (Details) - USD ($) $ in Millions |
Mar. 31, 2015 |
Mar. 20, 2015 |
Sep. 29, 2014 |
Mar. 11, 2014 |
---|---|---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 12 years 3 months 18 days | |||
Irix | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years 2 months 12 days | |||
Estimated Fair Value | $ 67.8 | |||
Irix | Trade names | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 3 years | |||
Estimated Fair Value | $ 0.8 | |||
Irix | Trade secrets and patents | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years | |||
Estimated Fair Value | $ 1.3 | |||
Irix | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years 3 months 18 days | |||
Estimated Fair Value | $ 65.7 | |||
Agere | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 10 years 3 months 18 days | |||
Estimated Fair Value | $ 2.1 | |||
Agere | Trade secrets and patents | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 15 years | |||
Estimated Fair Value | $ 1.2 | |||
Agere | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 5 years | |||
Estimated Fair Value | $ 0.5 | |||
Agere | Non-compete agreements | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 3 years | |||
Estimated Fair Value | $ 0.4 | |||
Gallus | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years 9 months 18 days | |||
Estimated Fair Value | $ 111.7 | |||
Gallus | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 15 years | |||
Estimated Fair Value | $ 107.2 | |||
Gallus | Non-compete agreements | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 3 years | |||
Estimated Fair Value | $ 2.2 | |||
Gallus | Developed technology and know-how | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 15 years | |||
Estimated Fair Value | $ 2.3 | |||
DPP | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Fair Value, Finite-lived and Indefinite-lived Intangible Assets | $ 101.6 | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Estimated Fair Value, Finite-lived and Indefinite-lived Intangible Assets | 101.6 | |||
DPP | In-process research and development | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | 8.8 | |||
DPP | Regulatory permits | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | 0.3 | |||
DPP | Trade names | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | $ 0.7 | |||
DPP | Trade names | Minimum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 8 years | |||
DPP | Trade names | Maximum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 9 years | |||
DPP | Customer relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | $ 66.8 | |||
DPP | Customer relationships | Minimum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 13 years | |||
DPP | Customer relationships | Maximum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years | |||
DPP | Developed technology and know-how | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | $ 23.5 | |||
DPP | Developed technology and know-how | Minimum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 7 years | |||
DPP | Developed technology and know-how | Maximum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 14 years | |||
DPP | Favorable agreements | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Fair Value | $ 1.5 | |||
DPP | Favorable agreements | Minimum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 6 months | |||
DPP | Favorable agreements | Maximum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (in years) | 9 years |
Business Combinations - Financial Results of the Acquired Business (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 7 Months Ended | 8 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2014 |
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2015 |
Oct. 31, 2015 |
Oct. 31, 2014 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Business Acquisition [Line Items] | |||||||||||||||
Net income | $ 44.1 | $ 8.8 | $ 0.9 | $ (22.1) | $ 147.4 | $ (21.6) | $ 18.8 | $ (6.2) | $ 31.7 | $ 138.4 | $ (119.2) | ||||
Irix | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Revenues | $ 45.5 | ||||||||||||||
Loss from operations | $ 10.5 | ||||||||||||||
Agere | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Revenues | $ 4.2 | ||||||||||||||
Loss from operations | $ (1.8) | ||||||||||||||
Gallus | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Revenues | $ 5.5 | ||||||||||||||
Loss from operations | $ (2.8) | ||||||||||||||
DPP | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Revenues | $ 362.6 | ||||||||||||||
Net income | (62.9) | ||||||||||||||
DPP and Gallus | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Revenues | 1,723.8 | ||||||||||||||
Continuing operations | DPP | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Loss from operations | (62.5) | ||||||||||||||
Continuing operations | DPP and Gallus | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Loss from operations | $ (276.9) | ||||||||||||||
Discontinued operations | DPP | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Loss from operations | $ (0.4) |
Business Combinations - Schedule of Consideration Breakdown (Details) - DPP $ in Millions |
Mar. 11, 2014
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
DSM cash payment | $ 17.4 |
Earnout to DSM related to Biologics business | 3.5 |
Total purchase price | 665.6 |
DSM | |
Business Acquisition [Line Items] | |
DSM cash payment | 114.4 |
DSM | DPP | |
Business Acquisition [Line Items] | |
Equity issued in acquisition | 480.4 |
DSM | JLL/Delta Patheon Holdings | |
Business Acquisition [Line Items] | |
Equity issued in acquisition | $ 49.9 |
Discontinued Operations and Other Strategic Initiatives - Narrative (Details) € in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2015
EUR (€)
|
Jul. 31, 2015
USD ($)
|
May 12, 2015
USD ($)
|
Sep. 30, 2015
EUR (€)
|
Jan. 31, 2016
EUR (€)
|
Jan. 31, 2016
USD ($)
|
Jul. 31, 2015
USD ($)
|
Jan. 31, 2014
USD ($)
|
Oct. 31, 2014
USD ($)
|
Oct. 31, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale | $ 0.1 | $ 6.5 | $ 4.6 | |||||||||
Repositioning expenses | $ 7.3 | 25.1 | $ 51.7 | |||||||||
Venlo Facility | Facility closing | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale | € | € 3.5 | |||||||||||
Impairment charge | $ 3.2 | $ 3.2 | ||||||||||
Caguas Facility | Facility closing | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Repositioning expenses | $ 14.9 | $ 1.1 | ||||||||||
Banner Pharmacaps | Disposed of by sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale | $ 36.4 | |||||||||||
Gain (loss) on disposals | $ 2.6 | |||||||||||
Biosolutions Operations in Capua, Italy | Disposed of by sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale | € | € 0.3 | |||||||||||
Gain (loss) on disposals | $ (24.0) | |||||||||||
DPx Fine Chemicals | Disposed of by sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale | € | € 179.0 | |||||||||||
Gain (loss) on disposals | $ 107.0 | |||||||||||
Proceeds from working capital | € | € 3.0 | |||||||||||
BLS Spinoff | Spinoff | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Accounts payable and accrued liabilities transferred in the spinoff | 19.3 | $ 19.3 | ||||||||||
Decrease in intercompany receivables | $ 9.4 |
Discontinued Operations and Other Strategic Initiatives - Schedule of Results of Discontinued Operations (Details) - Disposed of by sale - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues | $ 2.1 | $ 213.2 | $ 221.3 |
Cost of goods sold | 1.9 | 165.0 | 185.1 |
Gross profit | 0.2 | 48.2 | 36.2 |
Selling, general and administrative expenses | 0.4 | 21.0 | 22.8 |
Research and development | 0.0 | 0.5 | 1.4 |
Repositioning expenses | 0.0 | 2.2 | 1.8 |
Acquisition and integration costs | 0.0 | 0.1 | 0.1 |
Impairment charge | 0.0 | 0.0 | 12.4 |
Loss (gain) on disposals, net | 2.8 | (88.3) | 0.0 |
Operating (loss) income | (3.0) | 112.7 | (2.3) |
Interest (income) expense, net | 0.0 | (0.6) | 0.1 |
Foreign exchange income, net | (0.1) | 0.0 | (0.1) |
Other income, net | 0.0 | (0.1) | 0.0 |
(Loss) income before income taxes | (2.9) | 113.4 | (2.3) |
Provision for (benefit from) income taxes | 0.2 | 9.9 | (0.2) |
Net (loss) income | $ (3.1) | $ 103.5 | $ (2.1) |
Discontinued Operations and Other Strategic Initiatives - Carrying Value of Assets and Liabilities Transferred to the Partnership (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|---|
Assets | ||||
Cash and cash equivalents | $ 0.0 | $ 0.0 | $ 11.2 | |
BLS Spinoff | Spinoff | ||||
Assets | ||||
Cash and cash equivalents | $ 12.4 | |||
Accounts receivable, net | 26.1 | |||
Inventories | 3.5 | |||
Prepaid expenses and other | 0.2 | |||
Total current assets | 42.2 | |||
Capital assets | 2.5 | |||
Intangible assets | 17.1 | |||
Goodwill | 11.1 | |||
Total assets | 72.9 | |||
Liabilities | ||||
Accounts payable and accrued liabilities | 19.3 | |||
Deferred revenues - short-term | 0.7 | |||
Total current liabilities | 20.0 | |||
Deferred revenues | 0.4 | |||
Deferred tax liabilities | 6.0 | |||
Total liabilities | 26.4 | |||
Net assets of subsidiary | $ 46.5 |
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials, packaging components and spare parts | $ 192.1 | $ 160.2 |
Work-in-process | 80.9 | 63.5 |
Finished goods | 122.2 | 145.9 |
Balance, end of period | 395.2 | 369.6 |
Inventory Valuation Reserve Rollforward [Roll Forward] | ||
Inventory provision, beginning of period | (45.7) | (30.3) |
Additions | (21.0) | (20.1) |
Write-offs | 15.6 | 4.7 |
Inventory provision, end of period | $ (51.1) | $ (45.7) |
Supplemental Balance Sheet Information - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Trade payables | $ 279.3 | $ 289.2 | |
Interest payable | 14.0 | 36.2 | |
Accrued salaries and related expenses | 81.8 | 89.5 | |
Customer deposits | 4.3 | 7.3 | |
Repositioning | 5.4 | 22.9 | $ 46.5 |
Other accruals | 8.8 | 16.7 | |
Balance, end of period | $ 393.6 | $ 461.8 |
Supplemental Balance Sheet Information - Finite-Lived Intangible Assets Acquired (Details) $ in Millions |
12 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 310.6 |
Accumulated amortization | (60.8) |
Net carrying value | 249.8 |
Foreign exchange | (3.5) |
Balance, end of period | 246.3 |
Favorable agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | 1.0 |
Accumulated amortization | (1.0) |
Net carrying value | $ 0.0 |
Weighted Average Useful Life (in Years) | 0 years |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 1.6 |
Accumulated amortization | (0.7) |
Net carrying value | $ 0.9 |
Weighted Average Useful Life (in Years) | 5 years 7 months 6 days |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 54.1 |
Accumulated amortization | (16.8) |
Net carrying value | $ 37.3 |
Weighted Average Useful Life (in Years) | 10 years 9 months 18 days |
Trade secrets and patents | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 2.5 |
Accumulated amortization | (0.3) |
Net carrying value | $ 2.2 |
Weighted Average Useful Life (in Years) | 14 years 6 months |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 248.8 |
Accumulated amortization | (40.3) |
Net carrying value | $ 208.5 |
Weighted Average Useful Life (in Years) | 14 years 2 months 12 days |
Non-compete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying value | $ 2.6 |
Accumulated amortization | (1.7) |
Net carrying value | $ 0.9 |
Weighted Average Useful Life (in Years) | 3 years |
Supplemental Balance Sheet Information - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
Jan. 31, 2016 |
|
Indefinite-lived Intangible Assets [Line Items] | ||||
Gross carrying value | $ 2.4 | |||
Accumulated impairment | (0.9) | |||
Net carrying value | 1.5 | |||
Foreign exchange | (0.2) | |||
Balance, end of period | 1.3 | |||
In-process research and development | $ 0.9 | $ 9.7 | ||
Amortization expense | 24.6 | 22.7 | 11.5 | |
In-process research and development | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Gross carrying value | 2.2 | |||
Accumulated impairment | (0.9) | |||
Net carrying value | 1.3 | |||
In-process research and development | $ 0.9 | $ 9.7 | ||
In-process research and development | Banner Life Sciences | Spinoff | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Gross carrying value | $ 7.9 | |||
Accumulated impairment | (4.3) | |||
Net carrying value | $ 3.6 | |||
Regulatory permits | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Gross carrying value | 0.2 | |||
Accumulated impairment | 0.0 | |||
Net carrying value | $ 0.2 |
Supplemental Balance Sheet Information - Finite-lived Intangible Assets Amortization Schedule (Details) $ in Millions |
Oct. 31, 2016
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2017 | $ 24.3 |
2018 | 22.7 |
2019 | 22.0 |
2020 | 22.0 |
2021 | 21.6 |
Thereafter | 133.7 |
Total | $ 246.3 |
Supplemental Balance Sheet Information - Goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2014 |
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | $ 284.4 | $ 192.0 | |
Spinoff of subsidiary | (11.1) | ||
Measurement period adjustment | (2.9) | 1.2 | |
Additions through acquisitions | 104.5 | ||
Foreign currency translation adjustments | 0.1 | (2.2) | |
Goodwill, end of period | $ 192.0 | 281.6 | 284.4 |
Banner Puerto Rico | |||
Goodwill [Line Items] | |||
Impairment loss | 172.5 | ||
Banner Canada | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 2.6 | 3.1 | |
Goodwill, end of period | 3.1 | $ 2.6 | $ 2.6 |
Banner Canada | Banner Pharmacaps | |||
Goodwill [Line Items] | |||
Impairment loss | 0.1 | ||
Banner Canada | Biosolutions | |||
Goodwill [Line Items] | |||
Impairment loss | 1.3 | ||
Banner Mexico | Banner Pharmacaps | |||
Goodwill [Line Items] | |||
Disposition impact | $ 3.1 |
Supplemental Balance Sheet Information - Deferred Revenue (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Movement in Deferred Revenue [Roll Forward] | |||
Deferred revenue, beginning balance | $ 181.1 | $ 141.1 | $ 35.1 |
Additions to deferred revenue | 356.5 | 262.7 | 82.8 |
Amortization of deferred revenues | (263.8) | (221.3) | (44.4) |
Additions from acquisitions | 8.6 | 76.6 | |
Spinoff impact | (1.1) | ||
Foreign exchange | (8.2) | (8.9) | (3.9) |
Other | (9.1) | (5.1) | |
Deferred revenue, ending balance | $ 256.5 | $ 181.1 | $ 141.1 |
Capital Assets - Schedule of Capital Assets (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|
Property, Plant and Equipment [Line Items] | |||
Cost | $ 1,599.8 | $ 1,362.1 | |
Accumulated Depreciation | 616.2 | 485.1 | |
Net Book Value | 983.6 | 877.0 | $ 847.3 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 48.3 | 48.8 | |
Accumulated Depreciation | 0.0 | 0.0 | |
Net Book Value | 48.3 | 48.8 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 492.8 | 436.3 | |
Accumulated Depreciation | 147.9 | 110.7 | |
Net Book Value | 344.9 | 325.6 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 731.6 | 627.5 | |
Accumulated Depreciation | 396.6 | 313.5 | |
Net Book Value | 335.0 | 314.0 | |
Office equipment (including software) | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 98.9 | 87.8 | |
Accumulated Depreciation | 62.2 | 51.1 | |
Net Book Value | 36.7 | 36.7 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 12.9 | 13.9 | |
Accumulated Depreciation | 9.5 | 9.8 | |
Net Book Value | 3.4 | 4.1 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 215.3 | 147.8 | |
Accumulated Depreciation | 0.0 | 0.0 | |
Net Book Value | $ 215.3 | $ 147.8 |
Capital Assets - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Long-term Purchase Commitment [Line Items] | |||
Depreciation | $ 88.4 | $ 85.1 | $ 68.0 |
Capital Addition Purchase Commitments | |||
Long-term Purchase Commitment [Line Items] | |||
Open purchase commitments | $ 46.7 | $ 59.8 |
Capital Assets - Schedule of Assets Under Capital Leases (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Property, Plant and Equipment [Abstract] | ||
Cost of assets under capital leases included in capital assets | $ 0.9 | $ 0.9 |
Accumulated depreciation relating to assets under capital leases | (0.1) | (0.6) |
Net book value | 0.8 | 0.3 |
Annual depreciation of assets under capital leases | $ 0.0 | $ 0.3 |
Long-term Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 11, 2014 |
Jul. 31, 2013 |
Oct. 31, 2016 |
Oct. 31, 2015 |
May 31, 2015 |
Sep. 30, 2014 |
Feb. 28, 2014 |
|
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 2,128.2 | ||||||
Total long-term debt outstanding | 2,128.9 | $ 2,679.9 | |||||
Less: | |||||||
Original issue discount, net of accumulated amortization of $6.2 million and $4.1 million, respectively | (9.9) | (12.0) | |||||
Current portion | (19.5) | (21.2) | |||||
Ending balance | 2,099.5 | 2,646.7 | |||||
Accumulated amortization | 6.2 | 4.1 | |||||
Secured Revolving Facility | Secured Revolving Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 20.0 | 0.0 | |||||
Less: | |||||||
Basis spread (as percent) | 2.25% | ||||||
Current interest rate (as percent) | 3.75% | ||||||
Government of Austria research and development loans due March 2020 | Minimum | |||||||
Less: | |||||||
Stated rate (as percent) | 1.56% | ||||||
Government of Austria research and development loans due March 2020 | Maximum | |||||||
Less: | |||||||
Stated rate (as percent) | 3.16% | ||||||
Domestic credit agreement | USD term loan due March 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 1,138.9 | 1,150.6 | |||||
Less: | |||||||
Current interest rate (as percent) | 4.25% | ||||||
Domestic credit agreement | USD term loan due March 2021 | Base rate | |||||||
Less: | |||||||
Basis spread (as percent) | 2.25% | ||||||
Domestic credit agreement | USD term loan due March 2021 | LIBOR | |||||||
Less: | |||||||
Basis spread (as percent) | 3.25% | ||||||
Variable interest rate floor (as percent) | 1.00% | ||||||
Domestic credit agreement | USD term loan due March 2021 | Secured Revolving Facility | Base rate | |||||||
Less: | |||||||
Basis spread (as percent) | 2.25% | ||||||
Domestic credit agreement | USD term loan due March 2021 | Secured Revolving Facility | LIBOR | |||||||
Less: | |||||||
Basis spread (as percent) | 3.25% | ||||||
Domestic credit agreement | USD term loan due March 2021 | Secured Revolving Facility | Minimum | LIBOR | |||||||
Less: | |||||||
Variable interest rate floor (as percent) | 1.00% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 511.0 | 517.5 | |||||
Less: | |||||||
Current interest rate (as percent) | 4.50% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | Base rate | |||||||
Less: | |||||||
Basis spread (as percent) | 2.50% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | LIBOR | |||||||
Less: | |||||||
Basis spread (as percent) | 3.50% | ||||||
Variable interest rate floor (as percent) | 1.00% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | Secured Revolving Facility | Base rate | |||||||
Less: | |||||||
Basis spread (as percent) | 2.50% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | Secured Revolving Facility | LIBOR | |||||||
Less: | |||||||
Basis spread (as percent) | 3.50% | ||||||
Foreign credit agreement | Euro term loan due March 2021 | Secured Revolving Facility | Minimum | LIBOR | |||||||
Less: | |||||||
Variable interest rate floor (as percent) | 1.00% | ||||||
Senior notes | Senior PIK Toggle Notes due May 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 0.0 | 550.0 | |||||
Less: | |||||||
Cash interest rate (as percent) | 8.75% | 8.75% | |||||
PIK interest rate (as percent) | 9.50% | 9.50% | |||||
Senior notes | 7.50% senior notes due February 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 450.0 | 450.0 | |||||
Less: | |||||||
Stated rate (as percent) | 7.50% | 7.50% | |||||
Seller financing | Seller financing, non-interest bearing loan Due May 2016 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 0.0 | 2.0 | $ 4.0 | ||||
Loan | Government of Austria research and development loans due March 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | 3.5 | 4.7 | |||||
Loan | Italian subsidized loan due June 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 4.1 | 4.3 | |||||
Less: | |||||||
Stated rate (as percent) | 0.50% | 0.50% | |||||
Loan | Italian bank loan due June 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt outstanding | $ 0.7 | 0.7 | |||||
Loan | Italian bank loan due June 2020 | Euribor rate | |||||||
Less: | |||||||
Basis spread (as percent) | 7.10% | 7.10% | |||||
Capital lease obligations | |||||||
Debt Instrument [Line Items] | |||||||
Capital lease obligations | $ 0.7 | $ 0.1 |
Long-term Debt - 2014 Term Loans and Revolving Line (Details) |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2015
EUR (€)
debt_instrument
|
Sep. 29, 2014
EUR (€)
debt_instrument
|
Mar. 11, 2014
USD ($)
|
Oct. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Sep. 29, 2014
USD ($)
|
Mar. 11, 2014
EUR (€)
|
Mar. 11, 2014
USD ($)
|
|
Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of incremental debt instruments | debt_instrument | 2 | |||||||
Secured term loan | Secured revolving facility due March 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Amount of borrowings outstanding | $ 20,000,000 | |||||||
Line of credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum percentage of consolidated total assets (as percent) | 3.00% | |||||||
Additional threshold amount for dividend distribution | $ 65,000,000.0 | |||||||
Line of credit | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of incremental debt instruments | debt_instrument | 2 | |||||||
Prepayment amount from net cash proceeds of certain asset sales including insurance and condemnation proceeds, percentage | 100.00% | |||||||
Prepayment amount from net cash proceeds of issuance of debt obligations, percentage | 100.00% | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Greater than 4.00 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 4.00 | 4.00 | ||||||
Prepayment amount of excess cash flows, percentage | 50.00% | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment amount of excess cash flows, percentage | 25.00% | |||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 3.50 | 3.50 | ||||||
Line of credit | Secured term loan | First Lien Leverage Ratio Less Than or Equal to 4.00 to 1.00 But Greater Than 3.50 to 1.00 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 4.00 | 4.00 | ||||||
Line of credit | Secured term loan | First Lien Leverage Ratio of Less Than or Equal to 3.50 to 1.00 | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage ratio (as percent) | 3.50 | 3.50 | ||||||
Prepayment amount of excess cash flows, percentage | 0.00% | |||||||
Line of credit | Secured revolving credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Minimum borrowing amount to maintain First Lien Leverage Ratio | $ 50,000,000.0 | $ 50,000,000.0 | ||||||
Number of business days following deadline to be in compliance with First Lien Leverage Ratio | 11 days | |||||||
Line of credit | Secured revolving credit facility | Secured revolving facility due March 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility amount | $ 200,000,000.0 | |||||||
Unused capacity, commitment fee percentage (as percent) | 0.50% | |||||||
Minimum borrowing amount to maintain First Lien Leverage Ratio, percentage | 25.00% | 25.00% | 25.00% | |||||
Line of credit | Secured revolving credit facility | Secured revolving facility due March 2019 | FIrst Lien Leverage Ratio is less than or equal to 3.00 to 1.00 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused capacity, commitment fee percentage (as percent) | 0.375% | |||||||
Leverage ratio (as percent) | 3.00 | 3.00 | ||||||
Line of credit | Secured revolving credit facility | Eurodollar | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Line of credit | Secured revolving credit facility | Eurodollar | Eurodollar | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Line of credit | Letter of credit | Secured revolving facility due March 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility amount | $ 75,000,000.0 | |||||||
Domestic credit agreement | USD term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Domestic credit agreement | USD term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Domestic credit agreement | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | $ 20,000,000.0 | $ 160,000,000.0 | ||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | 985,000,000.0 | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.25% | |||||||
Domestic credit agreement | Secured term loan | USD term loan due March 2021 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Euro term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.50% | |||||||
Foreign credit agreement | Euro term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.50% | |||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Secured term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | € 155,000,000.0 | € 70,000,000.0 | $ 164,300,000 | $ 88,700,000 | ||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of debt issued | € 250,000,000.0 | $ 345,000,000 | ||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.50% | |||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 3.50% | |||||||
Foreign credit agreement | Secured term loan | Euro term loan due March 2021 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate floor (as percent) | 1.00% | |||||||
Foreign credit agreement | Secured revolving credit facility | Canadian prime rate loans | Prime rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% | |||||||
Foreign credit agreement | Secured revolving credit facility | Canadian base rate loans | Base rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread (as percent) | 2.25% |
Long-term Debt - Schedule of Maximum Leverage Ratios (Details) - Line of credit - Secured revolving credit facility - Secured revolving facility due March 2019 |
Mar. 11, 2014 |
---|---|
April 30, 2014 through October 31, 2014 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.75 |
November 1, 2014 through October 31, 2015 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.50 |
November 1, 2015 through October 31, 2016 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.25 |
November 1, 2016 through October 31, 2017 | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 6.00 |
November 1, 2017 and thereafter | |
Line of Credit Facility [Line Items] | |
Maximum leverage ratio (as percent) | 5.75 |
Long-term Debt - 2015 Senior PIK Toggle Notes (Details) - Senior notes - Senior PIK Toggle Notes due May 2020 - USD ($) |
1 Months Ended | ||
---|---|---|---|
Aug. 31, 2016 |
Oct. 31, 2016 |
May 31, 2015 |
|
Debt Instrument [Line Items] | |||
Amount of debt issued | $ 550,000,000.0 | ||
Cash interest rate (as percent) | 8.75% | 8.75% | |
PIK interest rate (as percent) | 9.50% | 9.50% | |
Redemption price (as percent) | 102.00% | ||
Early redemption fee | $ 11,000,000 | ||
Total redemption payment | 573,300,000 | ||
Accrued interest | $ 12,300,000 |
Long-term Debt - 2014 Senior Unsecured Notes (Details) - Senior notes - 7.50% senior notes due February 2022 - USD ($) |
1 Months Ended | |
---|---|---|
Feb. 28, 2014 |
Oct. 31, 2016 |
|
Debt Instrument [Line Items] | ||
Amount of debt issued | $ 450,000,000.0 | |
Stated rate (as percent) | 7.50% | 7.50% |
Amounts prior to February 2017 | ||
Debt Instrument [Line Items] | ||
Percent of principal amount redeemed to make whole (as percent) | 1.00% | |
Redemption price (as percent) | 105.625% |
Long-term Debt - Schedule of Redemption Prices (Details) - Senior notes - 7.50% senior notes due February 2022 |
1 Months Ended |
---|---|
Feb. 28, 2014 | |
2017 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price (as percent) | 105.625% |
2018 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price (as percent) | 103.75% |
2019 | |
Debt Instrument, Redemption [Line Items] | |
Redemption price (as percent) | 101.875% |
2020 and thereafter | |
Debt Instrument, Redemption [Line Items] | |
Redemption price (as percent) | 100.00% |
Long-term Debt - Note Payable to DSM Newco B.V. (Details) - Promisorry Note - Note Payable to DSM Newco B.V. |
Jun. 30, 2016
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Amount of debt issued | $ 51,000,000.0 |
Stated rate (as percent) | 10.75% |
Long-term Debt - Other Financing Arrangements (Details) € in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Apr. 30, 2016
EUR (€)
|
Jul. 31, 2013
EUR (€)
payment
debt_instrument
|
Oct. 31, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
Aug. 31, 2015
USD ($)
|
Sep. 30, 2014
USD ($)
|
|
Debt Instrument [Line Items] | |||||||
Proceeds from long-term debt | $ 40.8 | $ 804.2 | $ 2,092.0 | ||||
Total long-term debt outstanding | $ 2,128.2 | ||||||
Investment in Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term investment commitment, minimum amount | $ 47.0 | ||||||
Loan | |||||||
Debt Instrument [Line Items] | |||||||
Number of incremental debt instruments | debt_instrument | 2 | ||||||
Loan | Italian subsidized loan due June 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Amount of debt issued | € | € 6.0 | ||||||
Proceeds from long-term debt | € | € 0.6 | € 5.4 | |||||
Stated rate (as percent) | 0.50% | 0.50% | |||||
Total long-term debt outstanding | $ 4.1 | 4.3 | |||||
Loan | Italian bank loan due June 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Amount of debt issued | € | € 0.7 | ||||||
Proceeds from long-term debt | € | € 0.1 | € 0.6 | |||||
Number of semi-annual installments | payment | 6 | ||||||
Total long-term debt outstanding | $ 0.7 | 0.7 | |||||
Loan | Italian bank loan due June 2020 | Euribor rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as percent) | 7.10% | 7.10% | |||||
Loan | Government of Austria research and development loans due March 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Total long-term debt outstanding | $ 3.5 | 4.7 | |||||
Seller financing | Seller financing, non-interest bearing loan Due May 2016 | |||||||
Debt Instrument [Line Items] | |||||||
Total long-term debt outstanding | $ 0.0 | $ 2.0 | $ 4.0 | ||||
Other Obligations | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of property tax payment due (as percent) | 50.00% |
Long-term Debt - Refinancing Expenses (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Extinguishment of Debt [Line Items] | |||
Refinancing expense | $ 21.6 | $ 3.7 | $ 28.2 |
Payment of original issue discount | 0.0 | 0.0 | (17.3) |
Senior notes | |||
Extinguishment of Debt [Line Items] | |||
Refinancing expense | 21.6 | ||
Early redemption fee | 11.0 | ||
Write off of deferred financing costs | $ 10.6 | ||
Term loans | |||
Extinguishment of Debt [Line Items] | |||
Refinancing expense | 3.7 | 28.2 | |
Early redemption fee | 7.5 | ||
Write off of deferred financing costs | 2.5 | 13.7 | |
Payment of original issue discount | 0.8 | 7.0 | |
Term loans | Long-term assets | |||
Extinguishment of Debt [Line Items] | |||
Capitalized fees | 6.9 | 60.9 | |
Term loans | Debt | |||
Extinguishment of Debt [Line Items] | |||
Capitalized fees | $ 0.1 | $ 8.5 |
Long-term Debt - Estimated Minimum Annual Payments (Details) $ in Millions |
Oct. 31, 2016
USD ($)
|
---|---|
Long-term Debt | |
2017 | $ 39.3 |
2018 | 19.3 |
2019 | 18.8 |
2020 | 18.3 |
2021 | 1,582.5 |
Thereafter | 450.0 |
Total payments | 2,128.2 |
Capital Leases | |
2017 | 0.3 |
2018 | 0.3 |
2019 | 0.1 |
2020 | 0.0 |
2021 | 0.0 |
Thereafter | 0.0 |
Total payments | $ 0.7 |
Other Long-term Liabilities - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Defined benefit pension plans | $ 79.2 | $ 59.2 |
Other post-employment benefits | 5.2 | 4.8 |
Unfunded termination indemnities | 3.7 | 3.9 |
Uncertain tax positions | 7.9 | 0.0 |
Other long-term liabilities | 49.5 | 12.0 |
Total other long-term liabilities | $ 145.5 | $ 79.9 |
Other Long-term Liabilities - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Earnout liability | $ 33.8 | ||
Austrian jubilee plan | 3.7 | $ 3.9 | |
Postemployment benefits | 0.5 | 0.5 | |
Deferred compensation | 1.4 | 1.7 | |
Deferred rent liability | 0.9 | 0.9 | |
Long term payables | 4.8 | ||
Foreign currency cash flow hedge liability | 0.6 | ||
Foreign postretirement plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Contributions to termination indemnity liability | 3.4 | 3.3 | |
Termination indemnity expense | 3.3 | 2.9 | $ 2.4 |
Australian Jubilee Plan | Foreign postretirement plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Austrian jubilee plan | $ 4.8 | $ 4.4 |
Pension and Post-retirement Benefits - Change in Benefit Plan Obligation and Plan Assets (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Change in plan assets | |||
Employer contributions | $ 5.2 | ||
Defined Benefit Pension Plans | |||
Change in benefit obligation | |||
Benefit obligation, beginning of the year | $ 156.0 | 168.6 | |
Current service cost | 1.9 | 2.1 | $ 1.8 |
Interest cost | 5.2 | 5.6 | 6.1 |
Benefits paid | (4.8) | (5.8) | |
Actuarial loss (gain) | 33.3 | (1.1) | |
Currency translation | (21.9) | (13.4) | |
Benefit obligation, end of the year | 169.7 | 156.0 | 168.6 |
Change in plan assets | |||
Market value of plan assets, beginning of year | 97.4 | 103.7 | |
Actual return on plan assets | 7.3 | 1.6 | |
Employer contributions | 5.1 | 5.0 | |
Benefits paid | (4.8) | (5.8) | |
Currency translation | (15.6) | (7.1) | |
Market value of plan assets, end of the year | 89.4 | 97.4 | 103.7 |
Unfunded status of plans, end of the year | (80.3) | (58.6) | |
Other Benefit Plans | |||
Change in benefit obligation | |||
Benefit obligation, beginning of the year | 5.0 | 7.7 | |
Current service cost | 0.0 | 0.1 | 0.1 |
Interest cost | 0.2 | 0.3 | 0.4 |
Benefits paid | (0.1) | (0.2) | |
Actuarial loss (gain) | 0.4 | (1.9) | |
Currency translation | (0.1) | (1.0) | |
Benefit obligation, end of the year | 5.4 | 5.0 | 7.7 |
Change in plan assets | |||
Market value of plan assets, beginning of year | 0.0 | 0.0 | |
Actual return on plan assets | 0.0 | 0.0 | |
Employer contributions | 0.1 | 0.2 | |
Benefits paid | (0.1) | (0.2) | |
Currency translation | 0.0 | 0.0 | |
Market value of plan assets, end of the year | 0.0 | 0.0 | $ 0.0 |
Unfunded status of plans, end of the year | $ (5.4) | $ (5.0) |
Pension and Post-retirement Benefits - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
Oct. 31, 2013 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Accrued benefit liability | $ 85.7 | $ 65.6 | ||
Accrued benefit liability included in other long-term liabilities | 84.4 | 64.0 | ||
Accrued benefit asset included in other long-term assets | 0.0 | 2.0 | ||
Combined actuarial loss and unrecognized prior service costs included in other comprehensive income | 76.0 | 48.7 | ||
Required contributions for next fiscal year | 3.9 | |||
Employer contributions | 5.2 | |||
Total cash payments for employee future benefits | 16.1 | 18.9 | $ 17.2 | |
Defined benefit pension contributions | 5.1 | 5.0 | 6.6 | |
Payments to beneficiaries for other benefit plans | 0.1 | 0.2 | 0.2 | |
Amortization from actuarial losses | 2.9 | |||
Foreign Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total expense for the plans | $ 10.9 | $ 13.7 | $ 10.4 | |
Defined benefit pension plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Weighted-average discount rate | 2.40% | 3.50% | ||
Long-term rate of return on plan assets | 5.00% | 5.50% | 5.10% | |
Employer contributions | $ 5.1 | $ 5.0 | ||
Curtailment loss | 0.0 | 0.0 | $ (1.6) | |
Settlement loss | $ 0.0 | $ 1.0 | $ 1.2 | |
Other benefit plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Weighted-average discount rate | 3.50% | 4.40% | ||
Long-term rate of return on plan assets | 0.00% | 0.00% | 0.00% | |
Annual rate of increase per capita of benefits | 8.00% | |||
Ultimate health care cost trend | 5.00% | |||
Employer contributions | $ 0.1 | $ 0.2 | ||
Curtailment loss | 0.0 | 0.0 | $ 0.0 | |
Settlement loss | $ 0.0 | $ 0.0 | 0.0 | |
Foreign Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailment loss | $ 1.7 | |||
Curtailment loss applied to accumulated unrecognized actuarial losses | (0.8) | |||
Curtailment loss recognized in statement of operations | $ 0.9 | |||
Settlement loss | $ 1.2 |
Pension and Post-retirement Benefits - Pension Plan Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Defined benefit pension plans | |||
Weighted-Average Assumptions Used in Calculating Projected Benefit Obligation | |||
Discount rate | 2.40% | 3.50% | |
Rate of future compensation increases | 3.10% | 3.20% | |
Weighted-Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 1.90% | 2.60% | 4.00% |
Expected long-term return on plan assets | 5.00% | 5.50% | 5.10% |
Rate of future compensation increases | 2.90% | 3.00% | 2.80% |
Other Benefit Plans | |||
Weighted-Average Assumptions Used in Calculating Projected Benefit Obligation | |||
Discount rate | 3.50% | 4.40% | |
Rate of future compensation increases | 0.00% | 0.00% | |
Weighted-Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 4.40% | 4.20% | 4.60% |
Expected long-term return on plan assets | 0.00% | 0.00% | 0.00% |
Rate of future compensation increases | 0.00% | 0.00% | 0.00% |
Pension and Post-retirement Benefits - Effects of a One-Percentage-Point Increase in Assumptions (Details) - Other benefit plans $ in Millions |
12 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Defined Benefit Plan Disclosure [Line Items] | |
1% increase on benefit obligation | $ 1.1 |
1% increase on benefit expense | 0.0 |
1% decrease on benefit obligation | (0.9) |
1% decrease on benefit expense | $ 0.0 |
Pension and Post-retirement Benefits - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Defined benefit pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 1.9 | $ 2.1 | $ 1.8 |
Interest cost | 5.2 | 5.6 | 6.1 |
Expected return on plan assets | (4.9) | (5.6) | (6.3) |
Curtailment gain | 0.0 | 0.0 | (1.6) |
Settlement loss | 0.0 | 1.0 | 1.2 |
Amortization of actuarial loss | 1.5 | 1.6 | 0.9 |
Net periodic benefit costs | 3.7 | 4.7 | 2.1 |
Other benefit plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 0.0 | 0.1 | 0.1 |
Interest cost | 0.2 | 0.3 | 0.4 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 |
Curtailment gain | 0.0 | 0.0 | 0.0 |
Settlement loss | 0.0 | 0.0 | 0.0 |
Amortization of actuarial loss | 0.0 | 0.0 | 0.0 |
Net periodic benefit costs | $ 0.2 | $ 0.4 | $ 0.5 |
Pension and Post-retirement Benefits - Asset Class Targets (Details) - Foreign Pension Plan |
12 Months Ended |
---|---|
Oct. 31, 2016 | |
Canada | Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 55.00% |
Canada | Debt securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 43.00% |
Canada | Other | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 2.00% |
UNITED KINGDOM | Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 22.00% |
UNITED KINGDOM | Debt securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 20.00% |
UNITED KINGDOM | Other | |
Defined Benefit Plan Disclosure [Line Items] | |
Target for asset classes | 58.00% |
Pension and Post-retirement Benefits - Fair Value of Plan Assets (Details) - Defined benefit pension plans - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | $ 89.4 | $ 97.4 | $ 103.7 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.4 | 0.2 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 89.0 | 97.2 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.0 | 0.0 | |
Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 35.4 | 35.7 | |
Equity securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.0 | 0.0 | |
Equity securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 35.4 | 35.7 | |
Equity securities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.0 | 0.0 | |
Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 21.7 | 25.0 | |
Debt securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.0 | 0.0 | |
Debt securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 21.7 | 25.0 | |
Debt securities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.0 | 0.0 | |
Cash and Cash Equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 32.3 | 36.7 | |
Cash and Cash Equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 0.4 | 0.2 | |
Cash and Cash Equivalents | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | 31.9 | 36.5 | |
Cash and Cash Equivalents | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets at fair value | $ 0.0 | $ 0.0 |
Pension and Post-retirement Benefits - Estimated Future Benefit Payments (Details) $ in Millions |
Oct. 31, 2016
USD ($)
|
---|---|
Defined Benefit Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | $ 3.4 |
2018 | 3.6 |
2019 | 4.1 |
2020 | 4.7 |
2021 | 4.9 |
Thereafter | 29.5 |
Total expected contributions | 50.2 |
Other Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | 0.2 |
2018 | 0.2 |
2019 | 0.3 |
2020 | 0.3 |
2021 | 0.3 |
Thereafter | 1.8 |
Total expected contributions | $ 3.1 |
Equity (Details) $ / shares in Units, $ in Millions |
Jul. 26, 2016
USD ($)
shares
|
Jul. 21, 2016
USD ($)
shares
|
Oct. 31, 2016
€ / shares
shares
|
Jul. 21, 2016
€ / shares
shares
|
Jul. 21, 2016
$ / shares
shares
|
---|---|---|---|---|---|
Class of Stock [Line Items] | |||||
Proceeds from partner contribution | $ | $ 1.2 | ||||
Common stock, shares outstanding (in shares) | 145,074,042 | 115,609,756 | 115,609,756 | ||
Common stock, par value (in euros per share) | € / shares | € 0.01 | € 0.01 | |||
Proceeds from IPO | $ | $ 584.8 | ||||
IPO | |||||
Class of Stock [Line Items] | |||||
Shares offered as part of IPO (in shares) | 34,226,191 | ||||
IPO price per shares (in USD per share) | $ / shares | $ 21.00 | ||||
Issuance of ordinary shares (in shares) | 29,464,286 | ||||
Over-Allotment Option [Member] | |||||
Class of Stock [Line Items] | |||||
Issuance of ordinary shares (in shares) | 4,464,286 | ||||
DSM | IPO | |||||
Class of Stock [Line Items] | |||||
Shares sold by shareholder in IPO (in shares) | 4,761,905 |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) from continuing operations | $ 44.1 | $ 8.8 | $ 1.9 | $ (20.0) | $ 40.8 | $ 1.2 | $ 6.5 | $ (13.6) | $ 34.8 | $ 34.9 | $ (117.1) |
Net (loss) income from discontinued operations | $ 0.0 | $ 0.0 | $ (1.0) | $ (2.1) | $ 106.6 | $ (22.8) | $ 12.3 | $ 7.4 | $ (3.1) | $ 103.5 | $ (2.1) |
Weighted-average number of shares of ordinary shares - basic (in shares) | 145,100,000 | 119,200,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 123,924,335 | 115,609,756 | 115,609,756 |
Effect of dilutive securities: | |||||||||||
Weighted-average number of shares of ordinary shares - diluted (in shares) | 145,800,000 | 120,000,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 124,303,977 | 115,609,756 | 115,609,756 |
Earnings (loss) per ordinary share - basic: | |||||||||||
From continuing operations (in USD per share) | $ 0.30 | $ 0.07 | $ 0.02 | $ (0.17) | $ 0.35 | $ 0.01 | $ 0.06 | $ (0.12) | $ 0.28 | $ 0.30 | $ (1.01) |
From discontinued operations (in USD per share) | 0.00 | 0.00 | (0.01) | (0.02) | 0.92 | (0.20) | 0.11 | 0.06 | (0.03) | 0.90 | (0.02) |
Earnings (loss) per ordinary share - diluted: | |||||||||||
From continuing operations (in USD per share) | 0.30 | 0.07 | 0.02 | (0.17) | 0.35 | 0.01 | 0.06 | (0.12) | 0.28 | 0.30 | (1.01) |
From discontinued operations (in USD per share) | $ 0.00 | $ 0.00 | $ (0.01) | $ (0.02) | $ 0.92 | $ (0.20) | $ 0.11 | $ 0.06 | $ (0.02) | $ 0.90 | $ (0.02) |
Restricted stock units | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities (in shares) | 361,342 | 0 | 0 | ||||||||
Stock options | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities (in shares) | 18,300 | 0 | 0 |
Stock Based Compensation - Schedule of Share Based Compensation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | $ 21.6 | $ 13.9 | $ 10.0 |
Class A units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | 0.1 | 0.1 | 0.0 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | 2.9 | 0.0 | 0.0 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | 0.6 | 0.0 | |
Management Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | $ 18.0 | $ 13.8 | 4.7 |
Incentive Stock Option Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Based Compensation Expense | $ 5.3 |
Stock Based Compensation - Management Equity Incentive Plan (MEIP) (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jul. 26, 2016
$ / shares
shares
|
Jul. 31, 2016
USD ($)
|
Oct. 31, 2016
USD ($)
tranche
$ / shares
shares
|
Oct. 31, 2015
USD ($)
shares
|
Oct. 31, 2014
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 21.6 | $ 13.9 | $ 10.0 | ||
IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price (in USD per share) | $ / shares | $ 21.00 | ||||
JLL | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Return on capital | 290.00% | ||||
DSM | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Return on capital | 290.00% | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted Share Units under the Omnibus Plan (in shares) | shares | 450,184 | 0 | |||
Shares granted (in USD per share) | $ / shares | $ 21.00 | ||||
Stock-based compensation expense | $ 2.9 | $ 0.0 | 0.0 | ||
Compensation costs not yet recognized | $ 6.6 | ||||
Restricted stock units | IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Share price (in USD per share) | $ / shares | $ 21.00 | ||||
Management Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of valuation tranches | tranche | 5 | ||||
Stock-based compensation expense | $ 18.0 | 13.8 | $ 4.7 | ||
Management Equity Incentive Plan | Class B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Threshold percentage of ownership of equity securities for Exit Event | 20.00% | ||||
Percentage of excess capital contributions received to trigger an Exit Event | 250.00% | ||||
Compensation costs not yet recognized | $ 32.5 | ||||
Compensation costs not yet recognized, to be recognized before Exit Event | $ 4.0 | ||||
Management Equity Incentive Plan | Class C | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting threshold | 200.00% | ||||
Management Equity Incentive Plan | Class D | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting threshold | 250.00% | ||||
Management Equity Incentive Plan | Class E | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting threshold | 300.00% | 300.00% | |||
Management Equity Incentive Plan | Common Class C, Class D, Class E Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 0.6 | ||||
Compensation costs not yet recognized | $ 10.9 | ||||
Management Equity Incentive Plan | Stock-based Compensation | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares distributed to be held for MEIP participants | shares | 6,106,540 | ||||
Management Equity Incentive Plan | Stock-based Compensation | IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price (in USD per share) | $ / shares | $ 21.00 | ||||
Management Equity Incentive Plan | Stock-based Compensation | Class B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of service-based units | 71.40% | ||||
Vesting period | 4 years | ||||
Stock-based compensation expense | $ 6.6 | $ 13.8 | |||
Compensation costs not yet recognized | $ 12.1 | ||||
Management Equity Incentive Plan | Stock-based Compensation | Common Class C, Class D, Class E Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 9.0 | ||||
Management Equity Incentive Plan | Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Restricted Share Units under the Omnibus Plan (in shares) | shares | 3,388,481 | ||||
Share price target (in USD per share) | $ / shares | $ 48.47 | ||||
Shares granted (in USD per share) | $ / shares | $ 8.41 | ||||
Management Equity Incentive Plan | Restricted stock units | Class B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 0.2 | ||||
Management Equity Incentive Plan | Restricted stock units | Common Class C, Class D, Class E Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1.5 |
Stock Based Compensation - Schedule of Option Activity (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2014 |
|
Patheon N.V. 2016 Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 0 | |
Granted (in shares) | 1,145,338 | |
Forfeited (in shares) | (123,754) | |
Outstanding, end of the year (in shares) | 1,021,584 | |
Weighted Average Fair Value | ||
Outstanding, beginning of year (in USD per share) | $ 0.00 | |
Granted (in USD per share) | 8.29 | |
Forfeited (in USD per share) | 8.29 | |
Outstanding, end of year (in USD per share) | $ 8.29 | |
Incentive Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 11,017,225 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (6,677,225) | |
Forfeited (in shares) | (4,340,000) | |
Outstanding, end of the year (in shares) | 0 | |
Weighted Average Fair Value | ||
Outstanding, beginning of year (in USD per share) | $ 2.46 | |
Exercised (in USD per share) | 9.31 | |
Forfeited (in USD per share) | 9.31 | |
Outstanding, end of year (in USD per share) | $ 0.00 | |
Aggregate intrinsic value | ||
Outstanding, beginning of the year | $ 28,871,065 | |
Exercised | 45,395,345 | |
Forfeited/Canceled | 30,350,212 | |
Outstanding, end of the year | $ 0 | |
Stock-based Compensation | Management Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 92,125 | |
Granted (in shares) | 1,200 | |
Forfeited (in shares) | (8,000) | |
Converted into Partnership Shares (in shares) | (625) | |
Outstanding, end of the year (in shares) | 84,700 | |
Weighted Average Fair Value | ||
Outstanding, beginning of year (in USD per share) | $ 684.36 | |
Granted (in USD per share) | 855.40 | |
Forfeited (in USD per share) | 678.46 | |
Converted into Partnership Shares (in USD per share) | 693.35 | |
Outstanding, end of year (in USD per share) | $ 687.27 | |
Stock-based Compensation | Management Equity Incentive Plan | Class B | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 64,525 | |
Granted (in shares) | 840 | |
Forfeited (in shares) | (5,450) | |
Converted into Partnership Shares (in shares) | (625) | |
Outstanding, end of the year (in shares) | 59,290 | |
Stock-based Compensation | Management Equity Incentive Plan | Class C | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 9,200 | |
Granted (in shares) | 120 | |
Forfeited (in shares) | (850) | |
Converted into Partnership Shares (in shares) | 0 | |
Outstanding, end of the year (in shares) | 8,470 | |
Stock-based Compensation | Management Equity Incentive Plan | Class D | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 9,200 | |
Granted (in shares) | 120 | |
Forfeited (in shares) | (850) | |
Converted into Partnership Shares (in shares) | 0 | |
Outstanding, end of the year (in shares) | 8,470 | |
Stock-based Compensation | Management Equity Incentive Plan | Class E | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning of the year (in shares) | 9,200 | |
Granted (in shares) | 120 | |
Forfeited (in shares) | (850) | |
Converted into Partnership Shares (in shares) | 0 | |
Outstanding, end of the year (in shares) | 8,470 |
Stock Based Compensation - Fair Value Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Management Equity Incentive Plan | Stock-based Compensation | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected time to liquidity (in years) | 4 years 6 months | 5 years 6 months | 6 years |
Estimated equity volatility | 54.00% | 49.00% | 50.00% |
Risk free rate | 1.53% | 1.68% | 1.93% |
Dividend rate | 0.00% | 0.00% | 0.00% |
Management Equity Incentive Plan | Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected time to liquidity (in years) | 3 years | ||
Estimated equity volatility | 41.60% | ||
Risk free rate | 0.90% | ||
Patheon N.V. 2016 Omnibus Incentive Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected time to liquidity (in years) | 6 years | ||
Estimated equity volatility | 39.40% | ||
Risk free rate | 1.30% | ||
Dividend rate | 0.00% |
Stock Based Compensation - Patheon N.V. 2016 Omnibus Incentive Plan (Details) |
Jul. 31, 2016
shares
|
---|---|
Patheon N.V. 2016 Omnibus Incentive Plan | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options issuable (in shares) | 12,226,935 |
Stock Based Compensation - Restricted Share Units (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jul. 26, 2016 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 21.6 | $ 13.9 | $ 10.0 | |
IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share price (in USD per share) | $ 21.00 | |||
Restricted share units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 520,325 | |||
Stock-based compensation expense | $ 2.9 | $ 0.0 | $ 0.0 | |
Compensation costs not yet recognized | $ 6.6 | |||
Restricted share units | IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Share price (in USD per share) | $ 21.00 | |||
Restricted share units | IPO | Management | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 460,801 | |||
Restricted share units | IPO | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSU's granted (in shares) | 59,525 |
Stock Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted stock units |
12 Months Ended |
---|---|
Oct. 31, 2016
$ / shares
shares
| |
Restricted Share Units | |
Outstanding as of October 31, 2015 (in shares) | shares | 0 |
Granted (in shares) | shares | 520,325 |
Forfeited (in shares) | shares | (70,141) |
Outstanding as of October 31, 2016 (in shares) | shares | 450,184 |
Weighted Average Grant Date Fair Value | |
Outstanding as of October 31, 2015 (in USD per share) | $ / shares | $ 0.00 |
Granted (in USD per share) | $ / shares | 21.00 |
Forfeited (in USD per share) | $ / shares | (21.00) |
Outstanding as of October 31, 2016 (in USD per share) | $ / shares | $ 21.00 |
Stock Based Compensation - Stock Options (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jul. 26, 2016 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 21,600,000 | $ 13,900,000 | $ 10,000,000 | |
Management Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 18,000,000 | 13,800,000 | $ 4,700,000 | |
IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share price (in USD per share) | $ 21.00 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Stock-based compensation expense | $ 600,000 | $ 0 | ||
Compensation costs not yet recognized | 2,000,000 | |||
Stock Options | EBITDA Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 0 | |||
Compensation costs not yet recognized | $ 6,000,000 | |||
Stock Options | IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 1,145,338 | |||
Share price (in USD per share) | $ 21.00 | |||
Estimate fair value of stock options (in USD per share) | $ 8.29 | |||
Stock Options | IPO | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option grants (in shares) | 431,052 | |||
Vesting period | 3 years |
Stock Based Compensation - Incentive Stock Option Plan (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
Mar. 10, 2014 |
Oct. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 21,600,000 | $ 13,900,000 | $ 10,000,000 | ||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 600,000 | $ 0 | |||
Compensation costs not yet recognized | $ 2,000,000 | ||||
Incentive Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding (in shares) | 0 | 10,996,225 | 11,017,225 | ||
Stock option grants (in shares) | 0 | ||||
Incentive Stock Option Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options issuable (in shares) | 15,500,151 | ||||
Stock-based compensation expense | $ 5,300,000 | ||||
Compensation costs not yet recognized | $ 0 |
Financial Instruments, Fair Value and Risk Management - Carrying Value of Financial Assets and Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other financial liabilities | $ 36.5 | $ 7.6 |
Earnout liability | 33.8 | |
Available-for-sale | $ 1.4 | 1.4 |
Interest rate | 1.00% | |
Trading securities | $ 1.4 | 1.7 |
Allowance for doubtful accounts | 2.9 | 3.9 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Held-for-trading | 166.4 | 330.4 |
Accounts receivable, net | 401.0 | 329.1 |
Other financial liabilities | 2,512.6 | 3,130.1 |
Foreign exchange forward contracts | 2.7 | 7.6 |
Earnout liability | 33.8 | 0.0 |
Available-for-sale | $ 1.4 | $ 1.4 |
Financial Instruments, Fair Value and Risk Management - Summary of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Assets measured at fair value | |||
Available-for-sale securities | $ 1.4 | $ 1.4 | |
Held-for-trading securities | 1.4 | 1.7 | |
Total assets | 2.8 | 3.1 | |
Liabilities measured at fair value | |||
Earnout liability | 33.8 | $ 31.1 | 0.0 |
Total liabilities | 36.5 | 7.6 | |
Foreign exchange forward contracts | |||
Liabilities measured at fair value | |||
Foreign exchange forward contracts | 2.7 | 7.6 | |
Level 1 | |||
Assets measured at fair value | |||
Available-for-sale securities | 1.4 | 1.4 | |
Held-for-trading securities | 0.0 | 0.0 | |
Total assets | 1.4 | 1.4 | |
Liabilities measured at fair value | |||
Earnout liability | 0.0 | 0.0 | |
Total liabilities | 0.0 | 0.0 | |
Level 1 | Foreign exchange forward contracts | |||
Liabilities measured at fair value | |||
Foreign exchange forward contracts | 0.0 | 0.0 | |
Level 2 | |||
Assets measured at fair value | |||
Available-for-sale securities | 0.0 | 0.0 | |
Held-for-trading securities | 1.4 | 1.7 | |
Total assets | 1.4 | 1.7 | |
Liabilities measured at fair value | |||
Earnout liability | 0.0 | 0.0 | |
Total liabilities | 2.7 | 7.6 | |
Level 2 | Foreign exchange forward contracts | |||
Liabilities measured at fair value | |||
Foreign exchange forward contracts | 2.7 | 7.6 | |
Level 3 | |||
Assets measured at fair value | |||
Available-for-sale securities | 0.0 | 0.0 | |
Held-for-trading securities | 0.0 | 0.0 | |
Total assets | 0.0 | 0.0 | |
Liabilities measured at fair value | |||
Earnout liability | 33.8 | 0.0 | |
Total liabilities | 33.8 | 0.0 | |
Level 3 | Foreign exchange forward contracts | |||
Liabilities measured at fair value | |||
Foreign exchange forward contracts | $ 0.0 | $ 0.0 |
Financial Instruments, Fair Value and Risk Management - Schedule of Derivative Financial Instruments and Investments Classification on Consolidated Balance Sheet (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Derivatives, Fair Value [Line Items] | |||
Available-for-sale securities | $ 1.4 | $ 1.4 | |
Held-for-trading securities | 1.4 | 1.7 | |
Total assets | 2.8 | 3.1 | |
Earnout liability | 33.8 | $ 31.1 | 0.0 |
Total liabilities | 36.5 | 7.6 | |
Foreign exchange forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Foreign exchange forward contracts | 2.7 | 7.6 | |
Investments | |||
Derivatives, Fair Value [Line Items] | |||
Available-for-sale securities | 1.4 | 1.4 | |
Held-for-trading securities | 1.4 | 1.7 | |
Accounts payable and accrued liabilities | Foreign exchange forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Foreign exchange forward contracts | 2.7 | 7.0 | |
Other long-term liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Earnout liability | 33.8 | 0.0 | |
Other long-term liabilities | Foreign exchange forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Foreign exchange forward contracts | $ 0.0 | $ 0.6 |
Financial Instruments, Fair Value and Risk Management - Fair Value Measurements Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Fair Value Disclosures [Abstract] | ||
Gross unrealized loss | $ 2.7 | $ 7.9 |
Gross unrealized gain | $ 0.1 | $ 0.3 |
Financial Instruments, Fair Value and Risk Management - Schedule of Asset Impairments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
In-process research and development | $ 0.9 | $ 9.7 | |
Total | $ 0.0 | 4.1 | 9.7 |
Income approach | Level 3 | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
In-process research and development | 0.0 | 0.9 | 9.7 |
Market approach | Level 3 | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Land | $ 0.0 | $ 3.2 | $ 0.0 |
Financial Instruments, Fair Value and Risk Management - Schedule of Fair Values and Carrying Values of Long-term Debt (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
---|---|---|
Fair Value | ||
Liabilities: | ||
Long-term debt, including current portion | $ 2,156.8 | $ 2,675.8 |
Fair Value | Level 1 | ||
Liabilities: | ||
Long-term debt, including current portion | 0.0 | 0.0 |
Fair Value | Level 2 | ||
Liabilities: | ||
Long-term debt, including current portion | 2,156.8 | 2,675.8 |
Fair Value | Level 3 | ||
Liabilities: | ||
Long-term debt, including current portion | 0.0 | 0.0 |
Carrying Value | ||
Liabilities: | ||
Long-term debt, including current portion | $ 2,119.0 | $ 2,667.9 |
Financial Instruments, Fair Value and Risk Management - Foreign Exchange Contracts and Other Arrangements Narrative (Details) € in Millions |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 29, 2016
USD ($)
tranche
|
Nov. 02, 2015
USD ($)
|
Jan. 31, 2016
USD ($)
|
Oct. 31, 2016
USD ($)
CAD / $
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2015
EUR (€)
$ / €
CAD / $
|
Oct. 31, 2015
USD ($)
$ / €
CAD / $
|
Oct. 30, 2015
EUR (€)
|
Oct. 30, 2015
USD ($)
|
|
Derivatives, Fair Value [Line Items] | |||||||||
Capital transaction | $ 36,000,000 | $ 87,000,000 | |||||||
Adjusted EBITDA growth rate (as percent) | 10.00% | ||||||||
Maximum payment under Earnout Agreement | 60,000,000.0 | ||||||||
Minimum payment under Earnout Agreement | $ 25,000,000.0 | ||||||||
Contingent consideration | $ 31,100,000 | $ 33,800,000 | $ 0 | ||||||
Income (expense) recognized from change in fair value in earnout liability | $ 4,900,000 | ||||||||
Number of tranches | tranche | 3 | ||||||||
Earnout | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Contingent consideration | 33,800,000 | ||||||||
Income (expense) recognized from change in fair value in earnout liability | (2,700,000) | ||||||||
Level 3 | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Contingent consideration | $ 33,800,000 | $ 0 | |||||||
Level 3 | Earnout | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Asset volatility rate (as percent) | 30.00% | ||||||||
Asset beta | 1.0 | ||||||||
Change in asset volatility (as percent) | 1.00% | ||||||||
Change in liability amount due to asset volatility change | $ 200,000 | ||||||||
Change in asset beta | 0.1 | ||||||||
Change in liability amount due to asset beta change | $ 500,000 | ||||||||
Tranche one | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Consideration transferred | $ 25,000,000 | ||||||||
Tranche two | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Contingent consideration | 25,000,000 | ||||||||
Adjusted EBITDA value | 98,000,000 | ||||||||
Tranche three | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Contingent consideration | 10,000,000 | ||||||||
Adjusted EBITDA value | $ 110,000,000 | ||||||||
Designated as hedging instruments | Foreign exchange forward contracts | Canada | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Average exchange rate | CAD / $ | 1.3013 | 1.2401 | 1.2401 | ||||||
Unrealized loss recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax | $ 2,700,000 | $ 7,600,000 | |||||||
Designated as hedging instruments | Foreign exchange forward contracts | Canada | Short | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Aggregate amount to sell | $ 97,200,000 | $ 146,700,000 | |||||||
Designated as hedging instruments | Foreign exchange forward contracts | Austria | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Average exchange rate | $ / € | 1.0594 | 1.0594 | |||||||
Unrealized loss recorded in accumulated other comprehensive income in shareholders' deficit, net of associated income tax | $ 100,000 | ||||||||
Designated as hedging instruments | Foreign exchange forward contracts | Austria | Short | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Aggregate amount to sell | € | € 1.4 | ||||||||
Designated as hedging instruments | Currency Swap | Long | |||||||||
Derivatives, Fair Value [Line Items] | |||||||||
Aggregate amount to sell | € 21.8 | $ 24,000,000 | |||||||
Unrealized gain on contract settlement | $ 100,000 |
Financial Instruments, Fair Value and Risk Management - Earnout Liability Activity (Details) - Earnout $ in Millions |
12 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Fair Value Inputs, Liabilities, Quantitative Information [Roll Forward] | |
Earnout liability, beginning balance | $ 0.0 |
Liability assumed from parent | 36.0 |
Gain from revised earnout definition | (4.9) |
Change in fair value | 2.7 |
Earnout liability, ending balance | $ 33.8 |
Financial Instruments, Fair Value and Risk Management - Foreign Exchange Risk Narrative (Details) € in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2016
EUR (€)
|
|
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Cumulative unrealized exchange gains | $ 0.1 | $ 0.3 | |
Foreign credit agreement | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Long-term debt, including current portion, carrying value | € | € 465.5 | ||
Cumulative unrealized exchange gains | $ 70.7 | ||
Canada | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Potential increase/decrease in exchange rate impacting operating income, percentage | 10.00% | ||
Potential increase/decrease in exchange rate impacting operating income, value | $ 14.9 | ||
Percent of cash flow exposures covered by hedges | 76.00% | ||
Geographic Concentration Risk | Canada | Cash receipts from operations in U.S. dollars | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage (as percent) | 90.00% | ||
Geographic Concentration Risk | Canada | Cash outflows in U.S. dollars | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage (as percent) | 15.00% |
Financial Instruments, Fair Value and Risk Management - Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) (Details) - Net investment hedge - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Intercompany loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains reclassified to consolidated statements of operations | $ (0.6) | $ 0.0 |
Net loss to other comprehensive income (loss) for the period related to foreign exchange | (0.1) | (6.5) |
Foreign exchange contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange gain for the period from net investment hedge | 1.1 | 42.1 |
Release of ineffective portion of net investment hedge to consolidated statement of operations | (0.3) | (1.3) |
Release of ineffective portion of net investment hedge to consolidated statement of operations | 0.0 | (3.9) |
Net gain to other comprehensive income (loss) for the period related to net investment hedge | 0.8 | 36.9 |
Foreign exchange contract | Intercompany loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange gain (loss) for the period from long-term intercompany loan revaluation | $ 0.5 | $ (6.5) |
Financial Instruments, Fair Value and Risk Management - Credit Risk (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Deposits held | $ 4.3 | $ 7.3 |
Financial Instruments, Fair Value and Risk Management - Liquidity Risk (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | $ 165.0 | $ 328.7 | $ 73.4 |
Liquidity risk | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 165.0 | ||
Liquidity risk | Line of credit | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Undrawn lines of credit available | $ 182.4 |
Segment Information - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2015
USD ($)
|
Oct. 31, 2016
segment
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
|
Segment Reporting [Abstract] | ||||
Number of operating segments | 4 | |||
DPS reportable segment | 1 | |||
Number of reportable segments | 3 | |||
Number of discontinued operating segments | 3 | |||
Segment Reporting Information [Line Items] | ||||
Impairment of in-process research and development | $ | $ 0.9 | $ 9.7 | ||
IPR&D | ||||
Segment Reporting Information [Line Items] | ||||
Impairment of in-process research and development | $ | 0.9 | $ 9.7 | ||
Facility closing | Venlo Facility | ||||
Segment Reporting Information [Line Items] | ||||
Impairment charge | $ | $ 3.2 | $ 3.2 |
Segment Information - Segment Results (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 510.2 | $ 482.0 | $ 468.6 | $ 405.9 | $ 462.0 | $ 448.3 | $ 437.9 | $ 426.0 | $ 1,866.7 | $ 1,774.2 | $ 1,483.5 |
Adjusted EBITDA | $ 123.9 | $ 113.7 | $ 98.0 | $ 59.0 | $ 106.1 | $ 104.2 | $ 89.0 | $ 75.3 | 394.6 | 374.6 | 248.3 |
Depreciation and amortization | 113.0 | 107.8 | 79.5 | ||||||||
Impairment charge | 0.0 | 4.1 | 9.7 | ||||||||
Capital expenditures | 205.8 | 146.9 | 81.5 | ||||||||
Operating Segments | DPS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 1,152.9 | 1,144.2 | 1,088.6 | ||||||||
Adjusted EBITDA | 295.9 | 295.1 | 230.5 | ||||||||
Depreciation and amortization | 61.4 | 60.7 | 54.7 | ||||||||
Impairment charge | 0.9 | 4.3 | |||||||||
Capital expenditures | 123.9 | 98.6 | 65.3 | ||||||||
Operating Segments | PDS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 219.3 | 198.7 | 165.2 | ||||||||
Adjusted EBITDA | 73.2 | 68.5 | 51.2 | ||||||||
Depreciation and amortization | 6.1 | 4.6 | 4.0 | ||||||||
Impairment charge | 0.0 | 0.0 | |||||||||
Capital expenditures | 26.3 | 20.2 | 9.3 | ||||||||
Operating Segments | DSS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 494.9 | 395.3 | 188.9 | ||||||||
Adjusted EBITDA | 125.8 | 83.0 | 4.9 | ||||||||
Depreciation and amortization | 43.2 | 38.1 | 16.0 | ||||||||
Impairment charge | 3.2 | 0.0 | |||||||||
Capital expenditures | 41.7 | 24.5 | 2.3 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 0.0 | ||||||||||
Adjusted EBITDA | (100.3) | ||||||||||
Depreciation and amortization | 2.3 | ||||||||||
Capital expenditures | 13.9 | ||||||||||
Other | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 117.1 | ||||||||||
Adjusted EBITDA | (38.3) | ||||||||||
Depreciation and amortization | 4.8 | ||||||||||
Impairment charge | 5.4 | ||||||||||
Capital expenditures | 4.6 | ||||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 100.3 | ||||||||||
Adjusted EBITDA | (72.0) | ||||||||||
Depreciation and amortization | 4.4 | ||||||||||
Impairment charge | 0.0 | ||||||||||
Capital expenditures | 3.6 | ||||||||||
Intersegment Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ (0.4) | $ (64.3) | $ (76.3) |
Segment Information - Reconciliation of Adjusted EBITDA (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Segment Reporting [Abstract] | |||||||||||
Total Adjusted EBITDA | $ 123.9 | $ 113.7 | $ 98.0 | $ 59.0 | $ 106.1 | $ 104.2 | $ 89.0 | $ 75.3 | $ 394.6 | $ 374.6 | $ 248.3 |
Depreciation and amortization | (113.0) | (107.8) | (79.5) | ||||||||
Repositioning expenses | (9.2) | (25.1) | (51.7) | ||||||||
Acquisition and integration costs | (16.6) | (22.3) | (60.3) | ||||||||
Interest expense, net | (160.4) | (141.8) | (90.5) | ||||||||
Impairment charge | 0.0 | (4.1) | (9.7) | ||||||||
Benefit from (provision for) income taxes | 24.0 | (0.3) | (4.3) | ||||||||
Refinancing expenses | (21.6) | (3.7) | (28.2) | ||||||||
Operational initiatives related consulting costs | (4.2) | (13.0) | (10.1) | ||||||||
IPO costs | (2.0) | (4.5) | 0.0 | ||||||||
Acquisition-related litigation expenses | (4.0) | (12.7) | (10.2) | ||||||||
Stock-based compensation expense | (21.6) | (13.9) | (10.0) | ||||||||
Remediation costs | (32.8) | (2.6) | 0.0 | ||||||||
Purchase accounting adjustments | 0.0 | 0.0 | (11.4) | ||||||||
Gain on sale of investment | 0.0 | 16.2 | 0.0 | ||||||||
Other | 1.6 | (4.1) | 0.5 | ||||||||
Net income (loss) from continuing operations | $ 44.1 | $ 8.8 | $ 1.9 | $ (20.0) | $ 40.8 | $ 1.2 | $ 6.5 | $ (13.6) | 34.8 | 34.9 | $ (117.1) |
DPP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Inventory reserves recorded in cost of goods sold | $ 3.0 | ||||||||||
Swindon Wind Down | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Inventory reserves recorded in cost of goods sold | $ 1.9 |
Segment Information - Schedule of Revenue, Capital Assets and Goodwill, by Country (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 510.2 | $ 482.0 | $ 468.6 | $ 405.9 | $ 462.0 | $ 448.3 | $ 437.9 | $ 426.0 | $ 1,866.7 | $ 1,774.2 | $ 1,483.5 |
Capital Assets | 983.6 | 877.0 | 983.6 | 877.0 | 847.3 | ||||||
Impairment charge | 0.0 | 4.1 | 9.7 | ||||||||
Goodwill | 281.6 | 284.4 | 281.6 | 284.4 | 192.0 | ||||||
Intangible Assets | 247.6 | 275.8 | 247.6 | 275.8 | 250.1 | ||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 48.8 | 39.7 | 28.6 | ||||||||
Capital Assets | 100.3 | 97.2 | 100.3 | 97.2 | 106.7 | ||||||
Impairment charge | 0.0 | 0.0 | |||||||||
Goodwill | 2.6 | 2.6 | 2.6 | 2.6 | 3.1 | ||||||
Intangible Assets | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,214.2 | 1,127.6 | 898.8 | ||||||||
Capital Assets | 511.4 | 450.0 | 511.4 | 450.0 | 395.3 | ||||||
Impairment charge | 0.9 | 9.7 | |||||||||
Goodwill | 269.4 | 272.4 | 269.4 | 272.4 | 179.9 | ||||||
Intangible Assets | 231.6 | 257.2 | 231.6 | 257.2 | 225.8 | ||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 523.2 | 497.4 | 492.2 | ||||||||
Capital Assets | 356.7 | 313.6 | 356.7 | 313.6 | 323.1 | ||||||
Impairment charge | 3.2 | 0.0 | |||||||||
Goodwill | 7.4 | 7.4 | 7.4 | 7.4 | 6.5 | ||||||
Intangible Assets | 15.4 | 17.9 | 15.4 | 17.9 | 23.3 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 80.5 | 109.5 | 63.9 | ||||||||
Capital Assets | 15.2 | 16.2 | 15.2 | 16.2 | 22.2 | ||||||
Impairment charge | 0.0 | 0.0 | |||||||||
Goodwill | 2.2 | 2.0 | 2.2 | 2.0 | 2.5 | ||||||
Intangible Assets | $ 0.6 | $ 0.7 | $ 0.6 | $ 0.7 | $ 1.0 |
Repositioning Expenses - Narrative (Details) € in Millions, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 31, 2016
USD ($)
|
Oct. 31, 2015
EUR (€)
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
Oct. 31, 2015
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Repositioning expenses | $ 7.3 | $ 25.1 | $ 51.7 | ||
Repositioning liabilities recorded in accounts payable and accrued liabilities | 5.4 | 46.5 | $ 22.9 | ||
Restructuring liabilities recorded in other long-term liabilities | $ 0.1 | ||||
DPS operations realignment | Shared Service Functions | Affiliated entity | DSM | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Payments due | € | € 14.1 | ||||
DSS manufacturing facility closing | Facility closing | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Repositioning expenses | € | € 29.5 | ||||
Swindon Wind Down | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Inventory reserves recorded in cost of goods sold | $ 1.9 |
Repositioning Expenses - Schedule of Repositioning Expenses and Charges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Restructuring Reserve [Roll Forward] | |||
Total repositioning liability at beginning of period | $ 22.9 | $ 46.6 | $ 7.7 |
Total expenses | 7.3 | 25.1 | 51.7 |
Expenses capitalized in capital assets | 2.4 | ||
Repositioning expenses paid | (24.4) | (45.5) | (12.8) |
Foreign exchange | (0.4) | (5.7) | |
Total repositioning liability at end of period | 5.4 | 22.9 | 46.6 |
Employee-related expenses | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 5.2 | 6.0 | 43.1 |
Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 1.8 | ||
Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.3 | ||
Consulting, professional and project management costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 19.1 | 8.6 | |
Operating Segments | DPS | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 7.8 | 9.8 | 14.9 |
Operating Segments | DPS | Employee-related expenses | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 5.7 | 3.8 | 13.4 |
Operating Segments | DPS | Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 1.8 | ||
Operating Segments | DPS | Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.3 | ||
Operating Segments | DPS | Consulting, professional and project management costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 6.0 | 1.5 | |
Operating Segments | PDS | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | 0.0 | 0.5 |
Operating Segments | PDS | Employee-related expenses | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | 0.0 | 0.5 |
Operating Segments | PDS | Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | ||
Operating Segments | PDS | Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | ||
Operating Segments | PDS | Consulting, professional and project management costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | 0.0 | |
Operating Segments | DSS | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | (0.5) | 14.8 | 34.0 |
Operating Segments | DSS | Employee-related expenses | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | (0.5) | 3.1 | 27.2 |
Operating Segments | DSS | Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | ||
Operating Segments | DSS | Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | ||
Operating Segments | DSS | Consulting, professional and project management costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 11.7 | 6.8 | |
Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | 0.5 | 2.3 |
Other | Employee-related expenses | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | (0.9) | 2.0 |
Other | Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | 0.0 | ||
Other | Other | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | $ 0.0 | ||
Other | Consulting, professional and project management costs | |||
Restructuring Reserve [Roll Forward] | |||
Total expenses | $ 1.4 | $ 0.3 |
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
2017 | $ 6.4 | ||
2018 | 5.4 | ||
2019 | 4.7 | ||
2020 | 3.8 | ||
2021 | 3.4 | ||
Thereafter | 2.2 | ||
Total payments | 25.9 | ||
Total rental expenses | $ 10.9 | $ 11.6 | $ 10.5 |
Commitments and Contingencies - Management Incentive Plan and Contingencies (Details) € in Millions, $ in Millions |
12 Months Ended | 32 Months Ended | |
---|---|---|---|
Mar. 11, 2014 |
Oct. 31, 2016
EUR (€)
|
Oct. 31, 2016
USD ($)
|
|
Italy | Italian Client Dispute | |||
Loss Contingencies [Line Items] | |||
Amount of penalty per day sought by client | € | € 0.2 | ||
Banner Acquisition | Product Concentration Risk | Softgel Services | Cash receipts from operations in U.S. dollars | |||
Loss Contingencies [Line Items] | |||
Concentration risk, percentage (as percent) | 10.00% | ||
Management Long-Term Incentive Plan | |||
Loss Contingencies [Line Items] | |||
Threshold percentage of ownership of equity securities for Exit Event | 20.00% | ||
Percentage of excess capital contributions received to trigger an Exit Event | 250.00% | ||
Number of days to determine plan details | 90 days | ||
Value of LTIP units granted | $ | $ 10.1 | ||
Vesting period | 5 years |
Related Parties - Narrative (Details) € in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2015
USD ($)
|
Sep. 30, 2015
EUR (€)
|
Sep. 30, 2015
USD ($)
|
Apr. 30, 2016
USD ($)
|
Jan. 31, 2016
EUR (€)
|
Oct. 31, 2016
USD ($)
agreement
company
|
Oct. 31, 2015
EUR (€)
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
|
Related Party Transaction [Line Items] | |||||||||
Payments for restructuring | $ 24.4 | $ 45.5 | $ 12.8 | ||||||
Equity method investments | 0.0 | 5.0 | 0.0 | ||||||
Return on capital from equity investment | 1.3 | 0.0 | 0.0 | ||||||
Return on capital | 2.3 | 0.0 | 1.3 | ||||||
Cash purchase price | 0.0 | 21.4 | 0.0 | ||||||
Gain on sale of investment | $ 0.0 | $ 16.2 | $ 0.0 | ||||||
Banner Life Sciences | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity method investments | $ 5.0 | ||||||||
Return on capital from equity investment | $ 2.4 | ||||||||
Percivia | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage (as percent) | 50.00% | ||||||||
Return on capital | $ 1.2 | ||||||||
ChemiePark | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage (as percent) | 47.50% | ||||||||
BSP Pharmaceuticals | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage (as percent) | 18.00% | ||||||||
Number of investments | company | 2 | ||||||||
Cash purchase price | € 19.0 | $ 21.4 | |||||||
Gain on sale of investment | € | € 16.2 | ||||||||
Equity Method Investee | Banner Life Sciences | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of service agreements | agreement | 2 | ||||||||
DPS operations realignment | Affiliated entity | DSM | Shared Service Functions | |||||||||
Related Party Transaction [Line Items] | |||||||||
Payments for restructuring | € | € 14.1 |
Related Parties - Revenues and Expenses (Details) - Affiliated entity - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
JLL Partners Inc. and DSM | Business services | |||
Related Party Transaction [Line Items] | |||
Expenses | $ 0.3 | $ 0.3 | $ 0.6 |
DSM | Shared Service Functions | |||
Related Party Transaction [Line Items] | |||
Expenses | 8.3 | 25.3 | 30.3 |
Revenues | 3.7 | 0.1 | 1.3 |
Banner Life Sciences | Shared Service Functions | |||
Related Party Transaction [Line Items] | |||
Revenues | $ 10.4 | $ 17.6 | $ 0.0 |
Related Parties - Accounts Receivable/Payable Balances (Details) - Affiliated entity - Shared Service Functions - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
---|---|---|---|
DSM | |||
Related Party Transaction [Line Items] | |||
Accounts Receivable | $ 0.4 | $ 2.7 | $ 11.7 |
Accounts Payable | 0.2 | 4.5 | 10.9 |
Banner Life Sciences | |||
Related Party Transaction [Line Items] | |||
Accounts Receivable | $ 1.1 | $ 1.7 | $ 1.7 |
Related Parties - Equity Method Investment Values (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
---|---|---|
Related Party Transaction [Line Items] | ||
Equity Method Investment Values | $ 8.7 | $ 11.8 |
Banner Life Sciences | ||
Related Party Transaction [Line Items] | ||
Equity Method Investment Values | 2.9 | 5.0 |
Percivia | ||
Related Party Transaction [Line Items] | ||
Equity Method Investment Values | 5.7 | 6.7 |
ChemiePark | ||
Related Party Transaction [Line Items] | ||
Equity Method Investment Values | $ 0.1 | $ 0.1 |
Related Parties - Equity Method Gain/(Loss) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
|
Related Party Transaction [Line Items] | ||
Equity Method Gain/(Loss) | $ 0.5 | $ 1.2 |
Banner Life Sciences | ||
Related Party Transaction [Line Items] | ||
Equity Method Gain/(Loss) | 0.3 | 0.0 |
Percivia | ||
Related Party Transaction [Line Items] | ||
Equity Method Gain/(Loss) | 0.2 | 0.4 |
BSP Pharmaceuticals | ||
Related Party Transaction [Line Items] | ||
Equity Method Gain/(Loss) | $ 0.0 | $ 0.8 |
Income Taxes - Narrative (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 31, 2016
USD ($)
country
|
Jul. 31, 2016
USD ($)
|
Apr. 30, 2016
USD ($)
|
Oct. 31, 2016
USD ($)
country
|
Oct. 31, 2015
USD ($)
|
Oct. 31, 2014
USD ($)
|
Oct. 31, 2013
USD ($)
|
|
Income Tax Disclosure [Abstract] | |||||||
Number of countries we conduct business | country | 10 | 10 | |||||
Valuation Allowance [Line Items] | |||||||
Netherlands' statutory rate | 25.00% | 25.00% | 25.00% | ||||
Effective tax rate | (222.20%) | 0.90% | (3.80%) | ||||
Tax effected net operating losses | $ 190.1 | $ 190.1 | |||||
Net operating loss carryforwards not subject to expirations | 101.3 | 101.3 | |||||
Net operating loss carryforward, subject to expiration | 88.8 | 88.8 | |||||
Uncertain tax positions | 3.3 | 3.3 | |||||
Tax credits | 34.5 | 34.5 | |||||
Uncertain tax position | 5.1 | 5.1 | |||||
Indirect tax expense | 5.6 | 5.6 | |||||
Tax benefit from share-based payment arrangements | $ 7.8 | ||||||
Release of valuation allowance | 27.4 | $ 4.8 | $ 15.0 | ||||
Interest and penalties accrued | 1.5 | 1.5 | 0.1 | $ 0.1 | |||
Unrecognized tax benefits | 15.5 | 15.5 | 12.0 | 10.0 | $ 8.2 | ||
Unrecognized tax benefits that would have an effect on the effective tax rate | 14.6 | 14.6 | 11.2 | $ 4.0 | |||
Italian Revenue Service | |||||||
Valuation Allowance [Line Items] | |||||||
Unrecognized tax expense including penalties and interest | $ 3.5 | ||||||
Membership Interests | |||||||
Valuation Allowance [Line Items] | |||||||
Tax benefit from share-based payment arrangements | $ 7.8 | ||||||
Austria, Germany, Netherlands, and United States | |||||||
Valuation Allowance [Line Items] | |||||||
Deferred tax liability not recorded | 253.4 | 253.4 | |||||
Other | |||||||
Valuation Allowance [Line Items] | |||||||
Deferred tax liability not recorded | $ 282.3 | $ 282.3 | |||||
Geographic Concentration Risk | Cash receipts from operations in U.S. dollars | Foreign Countries | |||||||
Valuation Allowance [Line Items] | |||||||
Concentration risk, percentage (as percent) | 90.00% |
Income Taxes - Schedule of Income Before Tax (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Income Tax Contingency [Line Items] | |||
Domestic | $ (75.8) | $ (86.6) | $ (83.2) |
Income (loss) before income taxes | 10.8 | 35.2 | (112.8) |
Europe | |||
Income Tax Contingency [Line Items] | |||
Foreign | (22.9) | 42.8 | (13.4) |
North America | |||
Income Tax Contingency [Line Items] | |||
Foreign | 108.9 | 78.3 | (15.8) |
Other | |||
Income Tax Contingency [Line Items] | |||
Foreign | $ 0.6 | $ 0.7 | $ (0.4) |
Income Taxes - Schedule of Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Current: | |||
Netherlands (domestic) | $ 1.6 | $ 0.9 | $ 0.5 |
Total Current | 17.3 | 10.3 | 19.5 |
Deferred: | |||
Netherlands (domestic) | (0.3) | (0.3) | 0.3 |
Total Deferred | (41.3) | (10.0) | (15.2) |
(Benefit from) provision for income taxes | (24.0) | 0.3 | 4.3 |
Europe | |||
Current: | |||
Foreign | 5.5 | 11.7 | 18.6 |
Deferred: | |||
Foreign - Deferred | (19.6) | (4.6) | (4.1) |
North America | |||
Current: | |||
Foreign | 9.7 | (3.0) | 0.3 |
Deferred: | |||
Foreign - Deferred | (21.2) | (4.7) | (11.3) |
Other | |||
Current: | |||
Foreign | 0.5 | 0.7 | 0.1 |
Deferred: | |||
Foreign - Deferred | $ (0.2) | $ (0.4) | $ (0.1) |
Income Taxes - Schedule of Effective Rate Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Effective Income Tax Rate Reconciliation, Amount | |||
Expected provision for (benefit from) income taxes | $ 2.7 | $ 8.8 | $ (28.2) |
Foreign earnings taxed at rates different than statutory | (7.4) | 0.4 | (7.3) |
Effect of foreign currency fluctuations | (1.3) | (33.5) | (14.9) |
State and local taxes | 3.8 | (10.0) | (0.8) |
Uncertain tax positions | 3.2 | (1.1) | 6.5 |
Tax credits | (3.8) | (2.9) | (4.5) |
Disallowed or tax exempt interest | 1.9 | 0.5 | 0.6 |
Share based payments | 4.6 | 3.5 | (0.5) |
Net change in valuation allowance | (27.1) | 35.1 | 52.3 |
Other | (0.6) | (0.5) | 1.1 |
(Benefit from) provision for income taxes | $ (24.0) | $ 0.3 | $ 4.3 |
Effective Income Tax Rate Reconciliation, Percent | |||
Expected provision for (benefit from) income taxes | 25.00% | 25.00% | 25.00% |
Foreign earnings taxed at rates different than statutory | (68.50%) | 1.10% | 6.50% |
Effect of foreign currency fluctuations | (12.00%) | (95.20%) | 13.20% |
State and local taxes | 35.20% | (28.40%) | 0.70% |
Uncertain tax positions | 29.60% | (3.10%) | (5.80%) |
Tax credits | (35.20%) | (8.20%) | 4.00% |
Disallowed or tax exempt interest | 17.60% | 1.40% | (0.50%) |
Share based payments | 42.60% | 9.90% | 0.40% |
Net change in valuation allowance | (250.90%) | 99.70% | (46.40%) |
Other | (5.60%) | (1.40%) | (1.00%) |
(Benefit from) provision for income taxes | (222.20%) | 0.90% | (3.80%) |
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Oct. 31, 2016 |
Oct. 31, 2015 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 186.8 | $ 158.2 |
Accounting provisions not currently deductible for tax purposes | 42.3 | 30.0 |
Unrealized foreign exchange losses (gains) on debt | 35.5 | 37.6 |
Investment tax credits and other credits | 19.3 | 25.2 |
Deferred revenue | 12.5 | 10.3 |
Unclaimed research and development expenditures | 4.5 | 9.9 |
Deferred revenue | 3.0 | 7.0 |
Partnership basis difference | (10.5) | (13.3) |
Tax depreciation in excess of book depreciation | (49.5) | (31.2) |
Purchased intangibles | (55.0) | (59.1) |
Valuation allowance | (226.2) | (253.1) |
Deferred tax liabilities | $ (37.3) | $ (78.5) |
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 12.0 | $ 10.0 | $ 8.2 |
Increase based on tax positions taken in the current year | 0.9 | 4.4 | 2.2 |
Reductions related to lapse of applicable statute of limitations | (0.4) | ||
Increase based to tax positions taken in a prior year | 3.4 | 3.3 | |
Decrease based on tax positions taken in a prior year | (0.8) | (5.7) | |
Unrecognized tax benefits, ending balance | $ 15.5 | $ 12.0 | $ 10.0 |
Other Information - Foreign Exchange (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Other Information [Abstract] | |||
Foreign exchange loss | $ (5.7) | $ (17.8) | $ (8.6) |
Other Information - Net Change in Non-Cash Working Capital Balances Related to Continuing Operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Other Information [Abstract] | |||
Accounts receivable | $ (87.6) | $ (28.1) | $ (47.9) |
Inventories | (24.9) | (25.8) | 9.4 |
Prepaid expenses and other | (5.6) | 2.4 | (2.0) |
Accounts payable and accrued liabilities | (52.2) | 30.5 | 15.7 |
Income taxes receivable/payable | (5.6) | (5.6) | (1.2) |
Net change in non-cash working capital related to continuing operations | $ (175.9) | $ (26.6) | $ (26.0) |
Other Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Assumption of earnout liability from the Partnership | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | $ 36.0 | $ 0.0 | $ 0.0 |
Distribution to member in the form of a note payable | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | 51.0 | 0.0 | 0.0 |
Increase in capital lease obligations | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | 0.8 | 0.0 | 0.8 |
Spinoff of subsidiary | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Partnership units issued and value contributed to Patheon from acquisition | 0.0 | 34.1 | 0.0 |
DSM contribution of DPP for a 49% interest in Patheon | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | 0.0 | 0.0 | 480.4 |
Contribution of DSM preferred interest in the Partnership, net | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | 0.0 | 0.0 | 49.9 |
Contribution of earnout to DSM related to Biologics business | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Assumption of earnout liability from the Partnership | 0.0 | 0.0 | 3.5 |
Management option awards canceled upon change in control and profit units issued | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Partnership units issued and value contributed to Patheon from acquisition | 0.0 | 0.0 | 30.3 |
Irix | Partnership units issued and value contributed to Patheon | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Partnership units issued and value contributed to Patheon from acquisition | 0.0 | 1.0 | 0.0 |
Agere | Partnership units issued and value contributed to Patheon | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Partnership units issued and value contributed to Patheon from acquisition | $ 0.0 | $ 6.8 | $ 0.0 |
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jan. 31, 2016 |
Oct. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Jan. 31, 2015 |
Oct. 31, 2016 |
Oct. 31, 2015 |
Oct. 31, 2014 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 510.2 | $ 482.0 | $ 468.6 | $ 405.9 | $ 462.0 | $ 448.3 | $ 437.9 | $ 426.0 | $ 1,866.7 | $ 1,774.2 | $ 1,483.5 |
Gross profit | 159.2 | 149.2 | 138.3 | 98.9 | 149.2 | 150.1 | 138.3 | 120.9 | 545.6 | 558.5 | 387.4 |
Net income (loss) from continuing operations | 44.1 | 8.8 | 1.9 | (20.0) | 40.8 | 1.2 | 6.5 | (13.6) | 34.8 | 34.9 | (117.1) |
Net income (loss) from discontinued operations | 0.0 | 0.0 | (1.0) | (2.1) | 106.6 | (22.8) | 12.3 | 7.4 | (3.1) | 103.5 | (2.1) |
Net income (loss) | 44.1 | 8.8 | 0.9 | (22.1) | 147.4 | (21.6) | 18.8 | (6.2) | 31.7 | 138.4 | (119.2) |
Adjusted EBITDA | $ 123.9 | $ 113.7 | $ 98.0 | $ 59.0 | $ 106.1 | $ 104.2 | $ 89.0 | $ 75.3 | $ 394.6 | $ 374.6 | $ 248.3 |
Weighted Average Shares - Basic (in shares) | 145,100,000 | 119,200,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 123,924,335 | 115,609,756 | 115,609,756 |
Weighted Average Shares - Diluted (in shares) | 145,800,000 | 120,000,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 115,600,000 | 124,303,977 | 115,609,756 | 115,609,756 |
Basic (loss) income per share | |||||||||||
From continuing operations (in USD per share) | $ 0.30 | $ 0.07 | $ 0.02 | $ (0.17) | $ 0.35 | $ 0.01 | $ 0.06 | $ (0.12) | $ 0.28 | $ 0.30 | $ (1.01) |
From discontinued operations (in USD per share) | 0.00 | 0.00 | (0.01) | (0.02) | 0.92 | (0.20) | 0.11 | 0.06 | (0.03) | 0.90 | (0.02) |
Diluted (loss) income per share | |||||||||||
From continuing operations (in USD per share) | 0.30 | 0.07 | 0.02 | (0.17) | 0.35 | 0.01 | 0.06 | (0.12) | 0.28 | 0.30 | (1.01) |
From discontinued operations (in USD per share) | $ 0.00 | $ 0.00 | $ (0.01) | $ (0.02) | $ 0.92 | $ (0.20) | $ 0.11 | $ 0.06 | $ (0.02) | $ 0.90 | $ (0.02) |
Subsequent Events (Details) $ in Millions |
Nov. 25, 2016
USD ($)
|
---|---|
Subsequent event | |
Subsequent Event [Line Items] | |
Cash payment | $ 1.0 |
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