DUBLIN, March 2, 2015 /PRNewswire/ --
- Full year 2014 adjusted diluted EPS exceeds top end of
guidance by $0.06
- Total quarterly revenues of $800
million brings full year revenues to top end of
guidance
- Fourth quarter reported $0.35 diluted (GAAP) loss per share and
$1.16 adjusted diluted
EPS
- Company announced separately today an agreement with
Boston Scientific for the sale of American Medical Systems' (AMS)
Men's Health and Prostate Health businesses as part of plan to
fully divest the AMS business
- Company expects 2015 revenues, excluding AMS, to range
from $2.90 billion to $3.00
billion
- Company expects 2015 reported diluted (GAAP) earnings per
share, excluding AMS, to range from $2.73 to
$2.93
- Company expects 2015 adjusted diluted earnings per share,
excluding AMS, to range from $4.35 to $4.55
Endo International plc (NASDAQ: ENDP) (TSX: ENL) today reported
fourth quarter 2014 revenues of $800
million, an increase of 37 percent compared to fourth
quarter 2013 revenues of $585
million, including new product revenue from 2014 strategic
M&A transactions. Endo reported a fourth quarter 2014 net loss
of $53 million compared to a fourth
quarter 2013 net loss of $776
million.
As detailed in the supplemental financial information below,
adjusted net income for the three months ended December 31, 2014 increased 49 percent to
$185 million, compared to adjusted
net income of $124 million for the
fourth quarter of 2013.
Reported diluted loss per share for the fourth quarter of 2014
was $0.35, compared to the fourth
quarter 2013 reported loss per share of $6.74. Adjusted diluted earnings per share
increased 21 percent to $1.16 for the
fourth quarter of 2014 compared to $0.96 for the same period in 2013.
"We are proud of the progress Endo made in rebuilding our
business in 2014. This was achieved through multiple strategic
transactions, a focus on organic growth and building our R&D
pipeline. These efforts, along with the announcement that we will
divest our AMS Men's Health and Prostate Health businesses, have
helped us continue to transform the company into a leading global
specialty pharmaceuticals company and, in the process, deliver
strong financial performance," said Rajiv
De Silva, President and CEO of Endo. "We look forward to
continuing to invest in sustainable organic growth drivers in our
existing commercial portfolio as well as our R&D pipeline and
deploying capital to value-creating M&A. The sale of AMS
increases our financial flexibility to support those objectives in
our core pharmaceuticals businesses. We believe the recently closed
acquisition of Auxilium Pharmaceuticals significantly expands the
organic growth profile for our U.S. Branded Pharmaceuticals and
more broadly supports a company objective to deliver high-single to
low-double digit organic growth for revenues over the
mid-term."
|
FINANCIAL
PERFORMANCE
|
|
($ in thousands,
except per share amounts)
|
|
|
4th
Quarter
|
|
|
|
|
Twelve Months
Ended
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
Total
Revenues
|
$
|
799,957
|
|
|
$
|
584,946
|
|
|
37
|
%
|
|
$
|
2,877,188
|
|
|
$
|
2,616,907
|
|
|
10
|
%
|
Reported Net
Income
|
$
|
(53,483)
|
|
|
$
|
(775,910)
|
|
|
(93)
|
%
|
|
$
|
(721,319)
|
|
|
$
|
(685,339)
|
|
|
5
|
%
|
Reported Diluted
EPS
|
$
|
(0.35)
|
|
|
$
|
(6.74)
|
|
|
(95)
|
%
|
|
$
|
(4.91)
|
|
|
$
|
(6.05)
|
|
|
(19)
|
%
|
Adjusted Net
Income
|
$
|
184,884
|
|
|
$
|
123,697
|
|
|
49
|
%
|
|
$
|
674,898
|
|
|
$
|
573,996
|
|
|
18
|
%
|
Adjusted Diluted
Weighted
Average Shares
|
159,213
|
|
|
128,644
|
|
|
24
|
%
|
|
156,730
|
|
|
119,829
|
|
|
31
|
%
|
Adjusted Diluted
EPS
|
$
|
1.16
|
|
|
$
|
0.96
|
|
|
21
|
%
|
|
$
|
4.31
|
|
|
$
|
4.79
|
|
|
(10)
|
%
|
|
U.S. BRANDED PHARMACEUTICALS
On January 29, 2015 Endo announced
that it had completed the acquisition of Auxilium Pharmaceuticals,
Inc. The combined company is expected to provide an expanded
platform to accelerate the evolution and growth of Endo's U.S.
Branded Pharmaceuticals business. As a result of the acquisition,
Endo's portfolio has a broader offering of urology and orthopedic
products, including XIAFLEX®, TESTOPEL® and
STENDRA®, which are natural complements to its men's
health and pain products.
Fourth quarter 2014 U.S. branded pharmaceutical revenues were
$246 million, a 3 percent decrease
when compared to the fourth quarter 2013 U.S. branded
pharmaceutical revenues. This decrease was primarily attributable
to competition from Actavis' generic lidocaine patch.
Fourth quarter 2014 net sales of OPANA® ER decreased
13 percent when compared to the fourth quarter 2013. This decrease
is primarily attributable to a year-over-year decrease in demand
due to generic competition. According to IMS Health, total
prescriptions for OPANA ER decreased by 11 percent in the fourth
quarter of 2014 when compared to the fourth quarter of 2013.
Fourth quarter 2014 net sales of Voltaren® Gel
increased 7 percent when compared to fourth quarter 2013 net sales.
This increase is attributable to demand growth. According to IMS
Health, total prescriptions for Voltaren Gel increased 12 percent
in the fourth quarter 2014 when compared to the fourth quarter
2013.
U.S. GENERIC PHARMACEUTICALS
Fourth quarter 2014 U.S. generic product net sales of
$337 million increased 70 percent
when compared to fourth quarter 2013 U.S. generic product net
sales. This increase is primarily attributable to the addition of
sales from Boca Pharmacal and DAVA Pharmaceuticals following the
close of those acquisitions in February
2014 and August 2014,
respectively, and sales of the AG version of LIDODERM following the
launch of that product by the U.S. Generics business in
May 2014.
On November 20, 2014 Endo
announced that its Qualitest subsidiary launched a generic version
of Hoffmann-La Roche, Inc.'s Valcyte® (Valganciclovir
Tablets USP, 450 mg). When launched, it was the first generic
version of Valcyte available in the U.S. For the 12 months ending
September 30, 2014, branded Valcyte
had total U.S. sales of approximately $440
million, according to IMS Health data.
INTERNATIONAL PHARMACEUTICALS
In the fourth quarter 2014, the International Pharmaceuticals
segment reported sales of $79.7
million which were attributable to the Paladin Labs
business, acquired February 2014, and
sales of products by Grupo Farmaceutico Somar, acquired
July 2014.
DEVICES
In a separate press release today, Endo announced it has entered
into a definitive agreement to sell its American Medical Systems'
(AMS) Men's Health and Prostate Health businesses to Boston
Scientific for up to $1.65 billion,
with $1.6 billion in upfront cash.
The transaction is expected to close in the third quarter of 2015.
In addition, Endo is currently evaluating strategic alternatives
for the AMS Women's Health business.
In the fourth quarter 2014, Endo reported device sales of
$137 million compared to fourth
quarter 2013 sales of $132 million.
Full year 2014 sales for the Devices segment increased 1 percent
compared to full year 2013 sales which met the company's previously
stated expectation for a return to sales growth for the
segment.
Sales for AMS' benign prostatic hyperplasia (BPH) products
increased 14 percent in the fourth quarter of 2014 when compared to
the fourth quarter of 2013. This increase is attributable to
increased sales of GreenLight™ fiber and sales of StoneLight™ and
Aura XP™ consoles.
In the fourth quarter 2014, worldwide Men's Health sales
increased 2 percent compared to the fourth quarter 2013.
In the fourth quarter 2014 Women's Health sales decreased by 4
percent compared to the same period last year. The decrease in
Women's Health sales is attributable to year-over-year declines in
U.S.-based procedural volumes.
2015 Financial Guidance
Endo's estimates are based on projected results for the twelve
months ended December 31, 2015 and
reflect management's current beliefs about prescription and
procedure trends, pricing levels, inventory levels and the
anticipated timing of future product launches and events. The
company's guidance for reported (GAAP) earnings per share does not
include any estimates for potential new corporate development
transactions. The company's guidance assumes that results from AMS
will be reported as Discontinued Operations.
For the full twelve months ended December
31, 2015, at current exchange rates, Endo estimates:
- Total revenue to be between $2.90
billion and $3.00 billion
- Reported (GAAP) diluted EPS from continuing operations to be
between $2.73 and $2.93
- Adjusted diluted earnings per share from continuing operations
to be between $4.35 and $4.55
- Adjusted diluted earnings per share assume full year adjusted
diluted shares outstanding of 180 million
The company's 2015 guidance is based on certain assumptions
including:
- Adjusted gross margin of between 63 percent and 65 percent
- Adjusted Operating Expenses as a percentage of revenues to be
between 23 percent and 24 percent
- Adjusted interest expense of approximately $310 million
- Adjusted effective tax rate of between 15 percent and 17
percent
Balance Sheet Update
On January 21, 2015 the company
announced that on January 20, 2015,
Endo Limited, Endo Finance LLC and Endo Finco Inc., its
wholly-owned subsidiaries, priced $1.2
billion aggregate principal amount of 6.00% senior notes due
February 2025 at an issue price of
$1,000 per $1,000 principal amount in connection with their
previously announced private offering.
Endo used the net proceeds from the offering and cash on hand to
finance its acquisition of Auxilium Pharmaceuticals, refinance
certain indebtedness of Auxilium and pay related fees and
expenses.
During 2014 AMS distributed $585
million of cash to Qualified Settlement Funds (QSF) related
to settlement agreements that it reached by means of compromise to
resolve vaginal mesh product liability claims. Cash distributions
from QSF to plaintiffs' counsel following full release and
dismissal of actions or claims were $111
million during 2014. The balance remaining in QSF as of
December 31, 2014 was $485 million, which is shown as part of the total
for restricted cash and cash equivalents on the Unaudited Condensed
Consolidated Balance Sheet in this press release.
Conference Call Information
Endo will conduct a conference call with financial analysts to
discuss this news release today at 8:30 a.m.
ET. The dial-in number to access the call is
U.S./Canada (877) 415-3812,
International (857) 244-7325, and the passcode is 81514356. Please
dial in 10 minutes prior to the scheduled start time.
A replay of the call will be available from March 2, 2015 at 12:30
p.m. ET until 11:59 p.m. ET on March
10, 2015 by dialing (888)-286-8010 (U.S./Canada) or (617)-801-6888 (international) and
entering the passcode 23071815.
A simultaneous webcast of the call can be accessed by visiting
www.endo.com. In addition, a replay of the webcast will be
available until 11:59 p.m. ET on
March 10, 2015. The replay can be
accessed by clicking on "Events" in the Investor Relations section
of the website.
|
Supplemental
Financial Information
|
|
The following tables
provide a reconciliation of our reported (GAAP) statements of
operations to our adjusted statements of operations (Non-GAAP) for
each of the three months ended December 31, 2014 and 2013 (in
thousands, except per share data):
|
|
Three Months Ended
December 31, 2014 (unaudited)
|
Actual
Reported
(GAAP)
|
|
Adjustments
|
|
|
Non-GAAP
Adjusted
|
REVENUES
|
$
|
799,957
|
|
|
$
|
—
|
|
|
|
$
|
799,957
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
423,656
|
|
|
(113,988)
|
|
(1)
|
|
309,668
|
|
Selling, general and
administrative
|
192,282
|
|
|
(20,363)
|
|
(2)
|
|
171,919
|
|
Research and
development
|
40,431
|
|
|
(12,402)
|
|
(3)
|
|
28,029
|
|
Litigation-related
and other contingencies, net
|
179,999
|
|
|
(179,999)
|
|
(4)
|
|
—
|
|
Asset impairment
charges
|
22,542
|
|
|
(22,542)
|
|
(5)
|
|
—
|
|
Acquisition-related
and integration items
|
13,715
|
|
|
(13,715)
|
|
(6)
|
|
—
|
|
OPERATING (LOSS)
INCOME
|
$
|
(72,668)
|
|
|
$
|
363,009
|
|
|
|
$
|
290,341
|
|
INTEREST EXPENSE,
NET
|
59,587
|
|
|
(885)
|
|
(7)
|
|
58,702
|
|
LOSS ON
EXTINGUISHMENT OF DEBT
|
105
|
|
|
(105)
|
|
(8)
|
|
—
|
|
OTHER INCOME,
NET
|
(12,443)
|
|
|
8,613
|
|
(9)
|
|
(3,830)
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS BEFORE
INCOME TAX
|
$
|
(119,917)
|
|
|
$
|
355,386
|
|
|
|
$
|
235,469
|
|
INCOME TAX
|
(63,248)
|
|
|
114,035
|
|
(10)
|
|
50,787
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
$
|
(56,669)
|
|
|
$
|
241,351
|
|
|
|
$
|
184,682
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
3,426
|
|
|
(2,742)
|
|
(11)
|
|
684
|
|
CONSOLIDATED NET
(LOSS) INCOME
|
$
|
(53,243)
|
|
|
$
|
238,609
|
|
|
|
$
|
185,366
|
|
Less: Net income
attributable to noncontrolling interests
|
240
|
|
|
242
|
|
(12)
|
|
482
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO ENDO INTERNATIONAL
PLC
|
$
|
(53,483)
|
|
|
$
|
238,367
|
|
|
|
$
|
184,884
|
|
DILUTED EARNINGS PER
SHARE DATA ATTRIBUTABLE TO ENDO
INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.37)
|
|
|
|
|
|
|
$
|
1.16
|
|
Discontinued
operations
|
0.02
|
|
|
|
|
|
|
—
|
|
DILUTED (LOSS)
EARNINGS PER SHARE
|
$
|
(0.35)
|
|
|
|
|
|
|
$
|
1.16
|
|
DILUTED WEIGHTED
AVERAGE SHARES
|
153,772
|
|
|
|
|
|
|
159,213
|
|
|
|
|
Notes to
reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
|
|
(1)
|
To exclude
amortization of commercial intangible assets related to developed
technology of $83,839, a fair value step-up in inventory of $25,493
and accruals for milestone payments to partners of
$4,656.
|
|
(2)
|
To exclude certain
separation benefits and other costs incurred in connection with
continued efforts to enhance the company's operations of $9,318,
amortization of intangible assets of $2,485 and mesh
litigation-related defense costs of $8,560.
|
|
(3)
|
To exclude milestone
payments to partners of $12,165 and adjustments to accruals for
other costs incurred in connection with continued efforts to
enhance the company's operations of $237.
|
|
(4)
|
To exclude the impact
of net charges primarily for mesh-related and other product
liability.
|
|
(5)
|
To exclude asset
impairment charges.
|
|
(6)
|
To exclude
acquisition and integration costs associated with the Paladin,
Boca, Somar, DAVA, Auxilium and other acquisitions.
|
|
(7)
|
To exclude additional
non-cash interest expense related to our 1.75% Convertible Senior
Subordinated Notes.
|
|
(8)
|
To exclude the net
loss on extinguishment of debt in connection with various
refinancing and note repurchase activity.
|
|
(9)
|
To exclude
adjustments to the gain on sale of certain early-stage drug
discovery and development assets of $1,200 and foreign currency
impact related to the remeasurement of intercompany debt
instruments of $7,413.
|
|
(10)
|
Primarily to reflect
the tax savings from acquired tax attributes and the effect of the
pre-tax adjustments above at applicable rates.
|
|
(11)
|
Primarily to exclude
the after-tax adjustment to the previously recorded gain on sale of
the HealthTronics business and certain other sale-related
costs.
|
|
(12)
|
To exclude the impact
of the portion of certain of the above adjustments attributable to
noncontrolling interests.
|
Three Months Ended
December 31, 2013 (unaudited)
|
Actual
Reported
(GAAP)
|
|
Adjustments
|
|
|
Non-GAAP
Adjusted
|
REVENUES
|
$
|
584,946
|
|
|
$
|
—
|
|
|
|
$
|
584,946
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
253,886
|
|
|
(51,825)
|
|
(1)
|
|
202,061
|
|
Selling, general and
administrative
|
186,443
|
|
|
(34,705)
|
|
(2)
|
|
151,738
|
|
Research and
development
|
33,623
|
|
|
(7,029)
|
|
(3)
|
|
26,594
|
|
Litigation-related
and other contingencies
|
325,144
|
|
|
(325,144)
|
|
(4)
|
|
—
|
|
Asset impairment
charges
|
514,255
|
|
|
(514,255)
|
|
(5)
|
|
—
|
|
Acquisition-related
and integration items
|
4,076
|
|
|
(4,076)
|
|
(6)
|
|
—
|
|
OPERATING (LOSS)
INCOME
|
$
|
(732,481)
|
|
|
$
|
937,034
|
|
|
|
$
|
204,553
|
|
INTEREST EXPENSE,
NET
|
43,910
|
|
|
(5,926)
|
|
(7)
|
|
37,984
|
|
OTHER INCOME,
NET
|
(1,330)
|
|
|
—
|
|
|
|
(1,330)
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS BEFORE
INCOME TAX
|
$
|
(775,061)
|
|
|
$
|
942,960
|
|
|
|
$
|
167,899
|
|
INCOME TAX
|
(106,984)
|
|
|
148,994
|
|
(8)
|
|
42,010
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
$
|
(668,077)
|
|
|
$
|
793,966
|
|
|
|
$
|
125,889
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(93,666)
|
|
|
105,641
|
|
(9)
|
|
11,975
|
|
CONSOLIDATED NET
(LOSS) INCOME
|
$
|
(761,743)
|
|
|
$
|
899,607
|
|
|
|
$
|
137,864
|
|
Less: Net income
attributable to noncontrolling interests
|
14,167
|
|
|
—
|
|
|
|
14,167
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO ENDO INTERNATIONAL
PLC
|
$
|
(775,910)
|
|
|
$
|
899,607
|
|
|
|
$
|
123,697
|
|
DILUTED EARNINGS PER
SHARE DATA ATTRIBUTABLE TO ENDO
INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(5.80)
|
|
|
|
|
|
|
$
|
0.98
|
|
Discontinued
operations
|
(0.94)
|
|
|
|
|
|
|
(0.02)
|
|
DILUTED (LOSS)
EARNINGS PER SHARE
|
$
|
(6.74)
|
|
|
|
|
|
|
$
|
0.96
|
|
DILUTED WEIGHTED
AVERAGE SHARES
|
115,105
|
|
|
|
|
|
|
128,644
|
|
|
Notes to
reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
|
|
(1)
|
To exclude
amortization of commercial intangible assets related to marketed
products of $39,493 and accruals for milestone payments to partners
of $12,332.
|
|
(2)
|
To exclude certain
separation benefits and other costs incurred in connection with
continued efforts to enhance the company's operations of $13,602,
amortization of customer relationships of $2,515 and mesh
litigation-related defense costs of $18,588.
|
|
(3)
|
To exclude milestone
payments to partners of $6,307 and certain separation benefits and
other costs incurred in connection with continued efforts to
enhance the company's operations of $722.
|
|
(4)
|
To exclude the impact
of charges primarily for mesh-related product liability.
|
|
(5)
|
To exclude asset
impairment charges.
|
|
(6)
|
Primarily to exclude
integration costs associated with prior acquisitions.
|
|
(7)
|
To exclude additional
interest expense as a result of the prior adoption of ASC
470-20.
|
|
(8)
|
Primarily to reflect
the tax savings from acquired tax attributes and the effect of the
pre-tax adjustments above at applicable rates.
|
|
(9)
|
To exclude certain
items related to the HealthTronics business, which is reported as
Discontinued operations, net of tax.
|
The following tables
provide a reconciliation of our reported (GAAP) statements of
operations to our adjusted statements of operations (Non-GAAP) for
each of the twelve months ended December 31, 2014 and 2013 (in
thousands, except per share data):
|
|
Twelve Months
Ended December 31, 2014 (unaudited)
|
Actual
Reported
(GAAP)
|
|
Adjustments
|
|
|
Non-GAAP
Adjusted
|
REVENUES
|
$
|
2,877,188
|
|
|
$
|
—
|
|
|
|
$
|
2,877,188
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
1,400,555
|
|
|
(350,053)
|
|
(1)
|
|
1,050,502
|
|
Selling, general and
administrative
|
795,855
|
|
|
(160,275)
|
|
(2)
|
|
635,580
|
|
Research and
development
|
154,203
|
|
|
(37,424)
|
|
(3)
|
|
116,779
|
|
Litigation-related
and other contingencies, net
|
1,315,442
|
|
|
(1,315,442)
|
|
(4)
|
|
—
|
|
Asset impairment
charges
|
22,542
|
|
|
(22,542)
|
|
(5)
|
|
—
|
|
Acquisition-related
and integration items
|
85,534
|
|
|
(85,534)
|
|
(6)
|
|
—
|
|
OPERATING (LOSS)
INCOME
|
$
|
(896,943)
|
|
|
$
|
1,971,270
|
|
|
|
$
|
1,074,327
|
|
INTEREST EXPENSE,
NET
|
227,115
|
|
|
(12,192)
|
|
(7)
|
|
214,923
|
|
LOSS ON
EXTINGUISHMENT OF DEBT
|
31,817
|
|
|
(31,817)
|
|
(8)
|
|
—
|
|
OTHER INCOME,
NET
|
(30,174)
|
|
|
18,192
|
|
(9)
|
|
(11,982)
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS BEFORE
INCOME TAX
|
$
|
(1,125,701)
|
|
|
$
|
1,997,087
|
|
|
|
$
|
871,386
|
|
INCOME TAX
|
(401,840)
|
|
|
597,005
|
|
(10)
|
|
195,165
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
$
|
(723,861)
|
|
|
$
|
1,400,082
|
|
|
|
$
|
676,221
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
5,677
|
|
|
(2,048)
|
|
(11)
|
|
3,629
|
|
CONSOLIDATED NET
(LOSS) INCOME
|
$
|
(718,184)
|
|
|
$
|
1,398,034
|
|
|
|
$
|
679,850
|
|
Less: Net income
attributable to noncontrolling interests
|
3,135
|
|
|
1,817
|
|
(12)
|
|
4,952
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO ENDO INTERNATIONAL
PLC
|
$
|
(721,319)
|
|
|
$
|
1,396,217
|
|
|
|
$
|
674,898
|
|
DILUTED EARNINGS PER
SHARE DATA ATTRIBUTABLE TO ENDO
INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(4.92)
|
|
|
|
|
|
|
$
|
4.31
|
|
Discontinued
operations
|
0.01
|
|
|
|
|
|
|
—
|
|
DILUTED (LOSS)
EARNINGS PER SHARE
|
$
|
(4.91)
|
|
|
|
|
|
|
$
|
4.31
|
|
DILUTED WEIGHTED
AVERAGE SHARES
|
146,896
|
|
|
|
|
|
|
156,730
|
|
|
Notes to
reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
|
|
(1)
|
To exclude
amortization of commercial intangible assets related to developed
technology of $270,566, a fair value step-up in inventory of
$65,582 and accruals for milestone payments to partners of
$13,905.
|
|
(2)
|
To exclude certain
separation benefits and other costs incurred in connection with
continued efforts to enhance the company's operations of $29,970,
amortization of intangible assets of $10,031, mesh
litigation-related defense costs of $53,002, offset by insurance
recoveries of $(22,000), a charge for an additional year of the
branded prescription drug fee in accordance with IRS regulations
issued in the third quarter of 2014 of $24,972, accruals for excise
tax payments of $54,300 and a charge of $10,000 related to the
non-recoverability of certain non-trade receivables that did not
relate to our core operating activities.
|
|
(3)
|
To exclude milestone
payments to partners of $37,869 and adjustments to accruals for
other costs incurred in connection with continued efforts to
enhance the company's operations of $(445).
|
|
(4)
|
To exclude the impact
of net charges primarily for mesh-related and other product
liability.
|
|
(5)
|
To exclude asset
impairment charges.
|
|
(6)
|
To exclude
acquisition and integration costs associated with the Paladin,
Boca, Somar, DAVA, Auxilium and other acquisitions.
|
|
(7)
|
To exclude additional
non-cash interest expense related to our 1.75% Convertible Senior
Subordinated Notes.
|
|
(8)
|
To exclude the net
loss on extinguishment of debt in connection with various
refinancing and note repurchase activity.
|
|
(9)
|
To exclude the net
gain on sale of certain early-stage drug discovery and development
assets of $(5,200), foreign currency impact related to the
remeasurement of intercompany debt instruments of $(13,153) and
other miscellaneous expense of $161.
|
|
(10)
|
Primarily to reflect
the tax savings from acquired tax attributes and the effect of the
pre-tax adjustments above at applicable rates.
|
|
(11)
|
Primarily to exclude
the after-tax adjustment to the previously recorded gain on sale of
the HealthTronics business and certain other sale-related
costs.
|
|
(12)
|
To exclude the impact
of the portion of certain of the above adjustments attributable to
noncontrolling interests.
|
Twelve Months
Ended December 31, 2013 (unaudited)
|
Actual
Reported
(GAAP)
|
|
Adjustments
|
|
|
Non-GAAP
Adjusted
|
REVENUES
|
$
|
2,616,907
|
|
|
$
|
—
|
|
|
|
$
|
2,616,907
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
1,039,516
|
|
|
(194,748)
|
|
(1)
|
|
844,768
|
|
Selling, general and
administrative
|
849,339
|
|
|
(147,785)
|
|
(2)
|
|
701,554
|
|
Research and
development
|
142,472
|
|
|
(26,216)
|
|
(3)
|
|
116,256
|
|
Litigation-related
and other contingencies
|
484,242
|
|
|
(484,242)
|
|
(4)
|
|
—
|
|
Asset impairment
charges
|
519,011
|
|
|
(519,011)
|
|
(5)
|
|
—
|
|
Acquisition-related
and integration items
|
7,952
|
|
|
(7,952)
|
|
(6)
|
|
—
|
|
OPERATING (LOSS)
INCOME
|
$
|
(425,625)
|
|
|
$
|
1,379,954
|
|
|
|
$
|
954,329
|
|
INTEREST EXPENSE,
NET
|
173,601
|
|
|
(22,742)
|
|
(7)
|
|
150,859
|
|
LOSS ON
EXTINGUISHMENT OF DEBT
|
11,312
|
|
|
(11,312)
|
|
(8)
|
|
—
|
|
OTHER (INCOME)
EXPENSE, NET
|
(50,971)
|
|
|
51,448
|
|
(9)
|
|
477
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS BEFORE
INCOME TAX
|
$
|
(559,567)
|
|
|
$
|
1,362,560
|
|
|
|
$
|
802,993
|
|
INCOME TAX
|
(24,067)
|
|
|
253,130
|
|
(10)
|
|
229,063
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
$
|
(535,500)
|
|
|
$
|
1,109,430
|
|
|
|
$
|
573,930
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(96,914)
|
|
|
149,905
|
|
(11)
|
|
52,991
|
|
CONSOLIDATED NET
(LOSS) INCOME
|
$
|
(632,414)
|
|
|
$
|
1,259,335
|
|
|
|
$
|
626,921
|
|
Less: Net income
attributable to noncontrolling interests
|
52,925
|
|
|
—
|
|
|
|
52,925
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO ENDO INTERNATIONAL
PLC
|
$
|
(685,339)
|
|
|
$
|
1,259,335
|
|
|
|
$
|
573,996
|
|
DILUTED EARNINGS PER
SHARE DATA ATTRIBUTABLE TO ENDO
INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(4.73)
|
|
|
|
|
|
|
$
|
4.79
|
|
Discontinued
operations
|
(1.32)
|
|
|
|
|
|
|
—
|
|
DILUTED (LOSS)
EARNINGS PER SHARE
|
$
|
(6.05)
|
|
|
|
|
|
|
$
|
4.79
|
|
DILUTED WEIGHTED
AVERAGE SHARES
|
113,295
|
|
|
|
|
|
|
119,829
|
|
|
|
|
Notes to
reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
|
|
(1)
|
To exclude
amortization of commercial intangible assets related to marketed
products of $175,298, certain separation benefits and other costs
incurred in connection with continued efforts to enhance the
company's operations of $1,118 and accruals for milestone payments
to partners of $18,332.
|
|
(2)
|
To exclude certain
separation benefits and other costs incurred in connection with
continued efforts to enhance the company's operations of $84,290,
amortization of customer relationships of $10,036 and mesh
litigation-related defense costs of $53,459.
|
|
(3)
|
To exclude milestone
payments to partners of $11,371 and certain separation benefits and
other costs incurred in connection with continued efforts to
enhance the company's operations of $14,845.
|
|
(4)
|
To exclude the impact
of charges primarily for mesh-related product liability.
|
|
(5)
|
To exclude asset
impairment charges.
|
|
(6)
|
Primarily to exclude
integration costs associated with prior acquisitions.
|
|
(7)
|
To exclude additional
interest expense as a result of the prior adoption of ASC
470-20.
|
|
(8)
|
To exclude the
unamortized debt issuance costs written off and recorded as a loss
on extinguishment of debt upon our March 2013 prepayment on our
Term Loan indebtedness as well as upon the amendment and
restatement of our existing credit facility.
|
|
(9)
|
To exclude $50,400
related to patent litigation settlement income and other income of
$1,048.
|
|
(10)
|
Primarily to reflect
the tax savings from acquired tax attributes and the effect of the
pre-tax adjustments above at applicable rates.
|
|
(11)
|
To exclude certain
items related to the HealthTronics business, which is reported as
Discontinued operations, net of tax.
|
Non-GAAP Adjusted net
income and its components and Non-GAAP Adjusted diluted EPS are
not, and should not be viewed as, substitutes for U.S. GAAP net
income and its components and diluted EPS. Despite the importance
of these measures to management in goal setting and performance
measurement, we stress that these are Non-GAAP financial measures
that have no standardized meaning prescribed by U.S. GAAP and,
therefore, have limits in their usefulness to investors. Because of
the non-standardized definitions, Non-GAAP Adjusted net income and
its components (unlike U.S. GAAP net income and its components) may
not be comparable to the calculation of similar measures of other
companies. These Non-GAAP financial measures are presented solely
to permit investors to more fully understand how management
assesses performance. See Endo's Current Report on Form 8-K filed
today with the Securities and Exchange Commission for an
explanation of Endo's reasons for using non-GAAP
measures.
|
|
Reconciliation of
Projected GAAP Diluted Earnings Per Share to Adjusted Diluted
Earnings Per Share Guidance for 2015
|
|
|
Year
Ending
December 31,
2015
|
Projected GAAP
diluted income per common share
|
$
|
2.73
|
To
|
$
|
2.93
|
Upfront and
milestone-related payments to partners
|
|
0.40
|
|
|
0.40
|
Amortization of
commercial intangible assets and fair value inventory
step-up
|
|
1.02
|
|
|
1.02
|
Acquisition related,
integration and restructuring charges
|
|
0.16
|
|
|
0.16
|
Interest expense
adjustment for non-cash interest related to our 1.75% Convertible
Senior Subordinated Notes and other treasury related
items
|
|
0.01
|
|
|
0.01
|
Tax effect of pre-tax
adjustments at the applicable tax rates and certain other expected
cash tax savings as a result of acquisitions
|
|
0.03
|
|
|
0.03
|
Diluted adjusted
income per common share guidance
|
$
|
4.35
|
To
|
$
|
4.55
|
|
|
|
|
|
|
|
|
|
The company's
guidance is being issued based on certain assumptions
including:
- Certain of the above amounts are based on estimates and there
can be no assurance that Endo will achieve these results.
- Includes all completed business development transactions as of
March 2, 2015.
|
|
|
|
|
About Endo
Endo International plc is a global
specialty healthcare company focused on improving patients' lives
while creating shareholder value. Endo develops, manufactures,
markets, and distributes quality branded pharmaceutical, generic
pharmaceutical, over the counter medications and device products
through its operating companies. Endo has global headquarters in
Dublin, Ireland, and U.S.
headquarters in Malvern, PA. Learn
more at www.endo.com.
|
(Tables
Attached)
|
|
The following tables
present Endo's unaudited Net Revenues for the three and twelve
months ended December 31, 2014 and 2013:
|
|
Endo International
plc
Net Revenues
(unaudited)
(in
thousands)
|
|
|
Three Months Ended
December 31,
|
|
Percent
Growth
|
|
Twelve Months
Ended December 31,
|
|
Percent
Growth
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
U.S. Branded
Pharmaceuticals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIDODERM®
|
$
|
39,807
|
|
|
$
|
36,372
|
|
|
9
|
%
|
|
$
|
157,491
|
|
|
$
|
602,998
|
|
|
(74)
|
%
|
OPANA® ER
|
46,927
|
|
|
53,664
|
|
|
(13)
|
%
|
|
197,789
|
|
|
227,878
|
|
|
(13)
|
%
|
Voltaren®
Gel
|
50,158
|
|
|
46,904
|
|
|
7
|
%
|
|
179,816
|
|
|
170,841
|
|
|
5
|
%
|
PERCOCET®
|
31,123
|
|
|
26,996
|
|
|
15
|
%
|
|
122,355
|
|
|
105,814
|
|
|
16
|
%
|
FORTESTA®
Gel
|
5,299
|
|
|
18,704
|
|
|
(72)
|
%
|
|
39,971
|
|
|
65,860
|
|
|
(39)
|
%
|
FORTESTA® Gel
Authorized Generic
|
12,642
|
|
|
—
|
|
|
NM
|
|
|
18,690
|
|
|
—
|
|
|
NM
|
|
FROVA®
|
20,648
|
|
|
16,811
|
|
|
23
|
%
|
|
73,065
|
|
|
60,927
|
|
|
20
|
%
|
SUPPRELIN®
LA
|
18,142
|
|
|
14,206
|
|
|
28
|
%
|
|
66,710
|
|
|
58,334
|
|
|
14
|
%
|
VALSTAR®
|
6,965
|
|
|
7,330
|
|
|
(5)
|
%
|
|
25,372
|
|
|
23,657
|
|
|
7
|
%
|
VANTAS®
|
1,887
|
|
|
3,228
|
|
|
(42)
|
%
|
|
8,199
|
|
|
13,241
|
|
|
(38)
|
%
|
SUMAVEL®
|
7,855
|
|
|
—
|
|
|
NM
|
|
|
18,521
|
|
|
—
|
|
|
NM
|
|
AVEED®
|
2,587
|
|
|
—
|
|
|
NM
|
|
|
4,199
|
|
|
—
|
|
|
NM
|
|
Other Branded
Products
|
1,256
|
|
|
(133)
|
|
|
NM
|
|
|
2,789
|
|
|
1,700
|
|
|
64
|
%
|
Royalty and Other
Revenue
|
498
|
|
|
30,561
|
|
|
(98)
|
%
|
|
54,470
|
|
|
62,765
|
|
|
(13)
|
%
|
Total U.S. Branded
Pharmaceuticals
|
$
|
245,794
|
|
|
$
|
254,643
|
|
|
(3)
|
%
|
|
$
|
969,437
|
|
|
$
|
1,394,015
|
|
|
(30)
|
%
|
Total U.S. Generic
Pharmaceuticals
|
$
|
337,354
|
|
|
$
|
197,944
|
|
|
70
|
%
|
|
$
|
1,140,821
|
|
|
$
|
730,666
|
|
|
56
|
%
|
Total
International Pharmaceuticals
|
79,729
|
|
|
—
|
|
|
NM
|
|
|
270,425
|
|
|
—
|
|
|
NM
|
|
Devices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Men's
Health
|
74,955
|
|
|
73,158
|
|
|
2
|
%
|
|
273,929
|
|
|
270,343
|
|
|
1
|
%
|
Women's
Health
|
27,355
|
|
|
28,628
|
|
|
(4)
|
%
|
|
101,274
|
|
|
109,098
|
|
|
(7)
|
%
|
BPH
Therapy
|
34,770
|
|
|
30,573
|
|
|
14
|
%
|
|
121,302
|
|
|
112,785
|
|
|
8
|
%
|
Total
Devices
|
137,080
|
|
|
132,359
|
|
|
4
|
%
|
|
496,505
|
|
|
492,226
|
|
|
1
|
%
|
Total
Revenue
|
$
|
799,957
|
|
|
$
|
584,946
|
|
|
37
|
%
|
|
$
|
2,877,188
|
|
|
$
|
2,616,907
|
|
|
10
|
%
|
The following table
presents unaudited condensed consolidated Balance Sheet data at
December 31, 2014 and December 31, 2013:
|
|
|
December 31,
2014
|
|
December 31,
2013
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
408,753
|
|
|
$
|
526,597
|
|
Restricted cash and
cash equivalents
|
530,930
|
|
|
770,000
|
|
Marketable
securities
|
815
|
|
|
—
|
|
Accounts
receivable
|
1,234,728
|
|
|
725,827
|
|
Inventories,
net
|
472,215
|
|
|
374,439
|
|
Assets held for
sale
|
—
|
|
|
160,257
|
|
Other
assets
|
660,031
|
|
|
297,387
|
|
Total current
assets
|
$
|
3,307,472
|
|
|
$
|
2,854,507
|
|
TOTAL NON-CURRENT
ASSETS
|
7,602,144
|
|
|
3,717,349
|
|
TOTAL
ASSETS
|
$
|
10,909,616
|
|
|
$
|
6,571,856
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
2,943,286
|
|
|
$
|
1,247,083
|
|
Liabilities related
to assets held for sale
|
—
|
|
|
31,571
|
|
Other current
liabilities
|
155,959
|
|
|
418,018
|
|
Total current
liabilities
|
$
|
3,099,245
|
|
|
$
|
1,696,672
|
|
LONG-TERM DEBT, LESS
CURRENT PORTION, NET
|
4,202,356
|
|
|
3,323,844
|
|
OTHER
LIABILITIES
|
1,199,802
|
|
|
966,124
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
Total Endo
International plc shareholders' equity
|
$
|
2,374,757
|
|
|
$
|
526,018
|
|
Noncontrolling
interests
|
33,456
|
|
|
59,198
|
|
Total shareholders'
equity
|
$
|
2,408,213
|
|
|
$
|
585,216
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
10,909,616
|
|
|
$
|
6,571,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
presents unaudited condensed consolidated Statement of Cash Flow
data for the twelve months ended December 31, 2014 and
2013:
|
|
|
Twelve Months
Ended December 31,
|
|
2014
|
|
2013
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
Consolidated net
loss
|
$
|
(718,184)
|
|
|
$
|
(632,414)
|
|
Adjustments to
reconcile consolidated Net loss to Net cash provided by operating
activities
|
|
|
|
|
|
Depreciation and
amortization
|
331,651
|
|
|
255,663
|
|
Share-based
compensation
|
32,671
|
|
|
38,998
|
|
Amortization of debt
issuance costs and premium / discount
|
29,086
|
|
|
36,264
|
|
Other
|
(161,171)
|
|
|
539,184
|
|
Changes in assets and
liabilities which provided cash
|
823,723
|
|
|
60,822
|
|
Net cash provided by
operating activities
|
337,776
|
|
|
298,517
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
Purchases of
property, plant and equipment, net
|
(80,251)
|
|
|
(94,626)
|
|
Acquisitions, net of
cash acquired
|
(1,086,510)
|
|
|
(3,645)
|
|
Proceeds from sale of
business, net
|
54,521
|
|
|
8,150
|
|
Proceeds from /
(payments to) settlement escrow
|
11,518
|
|
|
(11,518)
|
|
Increase in
restricted cash and cash equivalents
|
(633,173)
|
|
|
(770,000)
|
|
Decrease in
restricted cash and cash equivalents
|
869,936
|
|
|
—
|
|
Other
|
92,106
|
|
|
(12,000)
|
|
Net cash used in
investing activities
|
(771,853)
|
|
|
(883,639)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
Cash distributions to
noncontrolling interests
|
(5,291)
|
|
|
(52,711)
|
|
Borrowings (payments)
on indebtedness, net
|
321,276
|
|
|
544,521
|
|
Exercise of
options
|
41,392
|
|
|
97,129
|
|
Other
|
(54,520)
|
|
|
(9,414)
|
|
Net cash provided by
(used in) financing activities
|
302,857
|
|
|
579,525
|
|
Effect of foreign
exchange rate
|
(4,037)
|
|
|
1,692
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
(135,257)
|
|
|
(3,905)
|
|
LESS: NET DECREASE IN
CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS
|
(17,413)
|
|
|
(813)
|
|
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS OF CONTINUING
OPERATIONS
|
(117,844)
|
|
|
(3,092)
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
526,597
|
|
|
529,689
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
$
|
408,753
|
|
|
$
|
526,597
|
|
|
Our Net cash provided
by operating activities includes the impact of certain payments for
legal settlements, primarily related to mesh and the Department of
Justice settlement related to the sale, marketing and promotion of
Lidoderm. The following schedule presents the unaudited impact of
these payments on our Net cash provided by operating activities for
the twelve months ended December 31, 2014 and 2013:
|
|
|
Twelve Months
Ended December 31,
|
|
2014
|
|
2013
|
Net cash provided by
operating activities, as reported
|
$
|
337,776
|
|
|
$
|
298,517
|
|
Payments for certain
legal settlements
|
333,763
|
|
|
42,982
|
|
Net cash provided by
operating activities, excluding the impact of certain legal
settlements
|
671,539
|
|
|
341,499
|
|
|
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and Canadian securities legislation. Statements including words
such as "believes," "expects," "anticipates," "intends,"
"estimates," "plan," "will," "may," "look forward," "intend,"
"guidance," "future" or similar expressions are forward-looking
statements. Because these statements reflect Endo's current views,
expectations and beliefs concerning future events, these
forward-looking statements involve risks and uncertainties.
Although Endo believes that these forward-looking statements and
information are based upon reasonable assumptions and expectations,
readers should not place undue reliance on them, or any other
forward-looking statements or information in this news release.
Investors should note that many factors, as more fully described in
the documents filed by Endo with securities regulators in
the United States and Canada including under the caption "Risk
Factors" in Endo's Form 10-K, Form 10-Q and Form 8-K filings with
the Securities and Exchange Commission and with securities
regulators in Canada on System for
Electronic Document Analysis and Retrieval ("SEDAR") and as
otherwise enumerated herein or therein, could affect Endo's future
financial results and could cause Endo's actual results to differ
materially from those expressed in forward-looking statements
contained in Endo's Annual Report on Form 10-K. The forward-looking
statements in this press release are qualified by these risk
factors. These are factors that, individually or in the aggregate,
could cause Endo's actual results to differ materially from
expected and historical results. Endo assumes no obligation to
publicly update any forward-looking statements, whether as a result
of new information, future developments or otherwise, except as may
be required under applicable securities law.