COVID-19 pandemic causes company to update business and financial position
Elanco Animal Health has withdrawn its previously announced 2020 revenue and earnings per share guidance, as a result of the effects of the new coronavirus (COVID-19) pandemic.
“I remain confident in Elanco’s long-term strategy and our ability to deliver on the commitments to our stakeholders,” said Elanco President and CEO Jeff Simmons in a statement on Tuesday. “The underlying industry fundamentals remain strong and the diversity of the global Elanco business across farm animals and pets provides durability and balance. We are resolute in our acquisition of Bayer AG’s animal health business as it adds to our leadership position in animal health for the long term.”
The company said it is “monitoring several global dynamics, from changing foreign currency rates and a dynamic animal protein market to declining veterinary clinic visits, the growing use of direct-to-consumer shipping, and sales through ecommerce and other alternative channels. The company is confident in its working capital and liquidity levels, while continuing to actively monitor the changing environment across the world.”
Elanco, based in Greenfield, Indiana, said much of its employee base has transitioned to remote work. Indiana Gov. Eric Holcomb issued a “stay-at-home” order that went into effect today and lasts until April 7. Indiana has more than 450 reported cases of COVID-19.
Elanco’s manufacturing plants and research and development laboratories are operating and the company said it is closely monitoring distribution logistics.
“At this time, Elanco has not experienced any supply disruption and critical projects in the pipeline continue to advance,” the company said, noting that the U.S. Department of Homeland Security, in its guidance released last week, have deemed manufacturing and distribution of animal medicines as essential critical infrastructure and workforce. Other countries around the world have done the same.
“However, in an effort to support public health and slow the spread of the disease, Elanco moved its non-business-critical workforce to remote working globally, with the exception of China, which has begun to return to work. Elanco also removed sales representatives from the field in many countries, including the U.S. along with its companion animal distribution partners. However, the Elanco team continues to collaborate with customers via webinars, teleconference and video conferences and other remote options,” it said.
Regarding the pending acquisition of Bayer, the deal continues to advance to a midyear 2020 closing, the announcement said.
Elanco said it will provide an update on its first quarter earnings call in early May, based on information available at that time.
