Item 2.05. Costs Associated with Exit or Disposal Activities.
On January 25, 2021, the Board of Directors of Elanco Animal Health Incorporated
(the "Company") authorized a restructuring plan to improve operational
efficiency. The proposed actions are focused on streamlining processes and
delivering increased efficiency in functional areas while improving the
productivity of the Company's investments in innovation. The initiatives include
the consolidation of R&D activities to align capabilities to the newly combined
innovation portfolio to support the Company's Innovation, Portfolio and
Productivity (IPP) strategy.
The proposed restructuring is expected to lead to total restructuring charges of
approximately $58-77 million, with approximately $55-70 million in severance and
other cash charges and the balance in asset impairments and other non-cash
charges. The Company expects to recognize between $58 million to $70 million of
the total restructuring costs in the first quarter of 2021 with the remaining
amount recognized over the balance of 2021.
Cautionary Statement Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934 (the "Exchange Act"). Such statements
include, without limitation, statements concerning the anticipated charges and
timing thereof relating to the restructuring plan. Forward-looking statements
are based on the Company's current expectations and assumptions regarding its
business, the economy and other future conditions. Because forward-looking
statements relate to the future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are difficult to predict.
As a result, the Company's actual results may differ materially from those
contemplated by the forward-looking statements. Important factors that could
cause actual results to differ materially from those in the forward-looking
statements include regional, national, or global political, economic, business,
competitive, market, and regulatory conditions, and other factors described in
the "Risk Factors" section of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2019, the subsequent Quarterly Reports on Form
10-Q and the Company's other filings with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly update or to revise
any forward-looking statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Item 7.01. Regulation FD Disclosure.
On January 26, 2021, the Company issued a press release announcing the
restructuring program described under Item 2.05 above and updating its 2021
guidance. A copy of the press release is attached to this Current Report on
Form 8-K as Exhibit 99.1. The information contained in the accompanying
Exhibit 99.1 is being furnished pursuant to Item 7.01 of Form 8-K and shall not
be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or
otherwise subject to the liabilities of that section. The information contained
in the press release shall not be incorporated by reference into any filing
under the Securities Act or the Exchange Act, whether made before or after the
date hereof, except as shall be expressly set forth by specific reference in
such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
99.1 Press Release issued by Elanco Animal Health Incorporated, dated
January 26, 2021.
104.1 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
© Edgar Online, source Glimpses