DUBLIN, Aug. 8, 2023
/PRNewswire/ -- Endo International plc (OTC: ENDPQ) today reported
financial results for the second-quarter ended June 30, 2023.
SECOND-QUARTER FINANCIAL PERFORMANCE
(in thousands, except per share amounts)
|
Three Months Ended
June 30,
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
2023
|
|
2022
|
|
Change
|
|
Total Revenues,
Net
|
$
546,852
|
|
$
569,114
|
|
(4) %
|
|
$ 1,062,119
|
|
$ 1,221,373
|
|
(13) %
|
|
Reported Income (Loss)
from
Continuing Operations
|
$
24,011
|
|
$
(1,880,883)
|
|
NM
|
|
$
21,188
|
|
$
(1,946,183)
|
|
NM
|
|
Reported Diluted
Weighted Average
Shares
|
235,220
|
|
235,117
|
|
— %
|
|
235,662
|
|
234,498
|
|
— %
|
|
Reported Diluted Net
Income (Loss)
per Share from Continuing Operations
|
$
0.10
|
|
$
(8.00)
|
|
NM
|
|
$
0.09
|
|
$
(8.30)
|
|
NM
|
|
Reported Net Income
(Loss)
|
$
23,438
|
|
$
(1,885,427)
|
|
NM
|
|
$
20,159
|
|
$
(1,957,401)
|
|
NM
|
|
Adjusted Income from
Continuing
Operations (2)(3)
|
$
230,705
|
|
$
6,532
|
|
NM
|
|
$
424,033
|
|
$
162,471
|
|
NM
|
|
Adjusted Diluted
Weighted Average
Shares (1)(2)
|
235,220
|
|
236,217
|
|
— %
|
|
235,662
|
|
236,466
|
|
— %
|
|
Adjusted Diluted Net
Income per
Share from Continuing Operations
(2)(3)
|
$
0.98
|
|
$
0.03
|
|
NM
|
|
$
1.80
|
|
$
0.69
|
|
NM
|
|
Adjusted EBITDA
(2)(3)
|
$
243,417
|
|
$
160,206
|
|
52 %
|
|
$
452,447
|
|
$
471,132
|
|
(4) %
|
|
__________
|
|
(1)
|
Reported Diluted Net
Income (Loss) per Share from Continuing Operations is computed
based on weighted average shares outstanding and, if there is
income from continuing operations during the period, the dilutive
impact of ordinary share equivalents outstanding during the period.
In the case of Adjusted Diluted Weighted Average Shares, Adjusted
Income from Continuing Operations is used in determining whether to
include such dilutive impact.
|
|
(2)
|
The information
presented in the table above includes non-GAAP financial measures
such as Adjusted Income from Continuing Operations, Adjusted
Diluted Weighted Average Shares, Adjusted Diluted Net Income per
Share from Continuing Operations and Adjusted EBITDA. Refer to the
"Supplemental Financial Information" section below for
reconciliations of certain non-GAAP financial measures to the most
directly comparable GAAP financial measures.
|
|
(3)
|
Effective January 1,
2022, these non-GAAP financial measures now include acquired
in-process research and development charges which were previously
excluded under Endo's legacy non-GAAP policy. Refer to note (13) in
the "Notes to the Reconciliations of GAAP and Non-GAAP Financial
Measures" section below for additional discussion.
|
CONSOLIDATED FINANCIAL RESULTS
Total revenues were $547 million
in second-quarter 2023, a decrease of 4% compared to $569 million in second-quarter 2022. This
decrease was primarily attributable to decreased revenues from the
Generic Pharmaceuticals segment.
Reported income from continuing operations in second-quarter
2023 was $24 million compared to
reported loss from continuing operations of $1,881 million in second-quarter 2022. This
change was primarily due to lower asset impairment charges and
lower interest expense as a result of the August 2022 Chapter 11 filing.
Adjusted income from continuing operations in second-quarter
2023 was $231 million compared to
$7 million in second-quarter 2022.
This change was primarily driven by lower interest and adjusted
operating expenses, including acquired in-process research and
development charges.
BRANDED PHARMACEUTICALS SEGMENT
Second-quarter 2023 Branded Pharmaceuticals segment revenues
were $212 million, a decrease of 3%
compared to $219 million during
second-quarter 2022.
Specialty Products revenues increased 1% to $165 million in second-quarter 2023 compared to
$164 million in second-quarter 2022. This change was primarily
due to an increase in SUPPRELIN® LA revenues mainly
driven by increased average net selling price as a result of
business mix. Second-quarter 2023 XIAFLEX® revenues were
$117 million, a 3% decrease compared to second-quarter 2022
driven by decreased net selling price partially offset by increased
volumes. XIAFLEX® second-quarter 2023 revenues
increased 21% compared to first-quarter 2023 primarily driven by
strong Peyronie's Disease volume growth.
Established Products revenues decreased 15% to $47 million in second-quarter 2023 compared to
$55 million in second-quarter 2022
due primarily to generic competition.
STERILE INJECTABLES SEGMENT
Second-quarter 2023 Sterile Injectables segment revenues were
$137 million, an increase of 11% compared to $123 million
during second-quarter 2022. This change was primarily attributable
to consideration received in connection with a settlement agreement
with Novavax, Inc. to resolve a dispute under a previous
manufacturing and services agreement. This was partially
offset by decreased VASOSTRICT® revenues due to lower price and
market share resulting from generic competition and lower overall
market volumes.
GENERIC PHARMACEUTICALS SEGMENT
Second-quarter 2023 Generic Pharmaceuticals segment revenues
were $179 million, a decrease of 12% compared to
$203 million during second-quarter 2022. This decrease was
primarily attributable to competitive pressure on lubiprostone
capsules, the authorized generic of Mallinckrodt's Amitiza®, and varenicline
tablets, the generic version of Chantix®, partially
offset by revenues from dexlansoprazole delayed release capsules,
the generic version of Dexilant® which launched during
fourth-quarter 2022.
During second-quarter 2023, another generic varenicline
competitor entered the market with additional competitors
anticipated in 2023.
INTERNATIONAL PHARMACEUTICALS SEGMENT
Second-quarter 2023 International Pharmaceuticals segment
revenues were $19 million, a decrease
of 20% compared to $24 million during
second-quarter 2022. This decrease was primarily attributable to a
2022 product discontinuation.
FINANCIAL EXPECTATIONS
Endo's second-quarter 2023 adjusted financial results exceeded
the expectations assumed in the low end of the prior outlook for
the full-year ending December 31,
2023, primarily driven by higher revenue from varenicline
and dexlansoprazole delayed release capsules due to fewer than
expected competitors and the recognition of the Novavax
settlement.
The current outlook for the full-year ending December 31, 2023 contemplates a range of
potential outcomes reflecting uncertainties in key assumptions
primarily related to the timing of varenicline and dexlansoprazole
competitive entrants. Endo does not currently anticipate a material
impact to its long-term financial outlook, previously provided on
February 14, 2023, beyond 2023.
The financial expectations reflect adjusted results. All
financial expectations provided by Endo are forward-looking, and
actual results may differ materially from such expectations, as
further discussed below under the heading "Cautionary Note
Regarding Forward-Looking Statements."
|
Full-Year 2023
Adjusted Results
|
|
($ in
millions)
|
Prior
Outlook
|
|
Current
Outlook
|
|
Total Revenues,
Net
|
$1,890 -
$2,075
|
|
$1,975 -
$2,035
|
|
EBITDA
|
$690 - $820
|
|
$750 - $790
|
|
Assumptions:
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
Branded
Pharmaceuticals
|
~$870
|
|
~$870
|
|
Sterile
Injectables
|
$400 - $430
|
|
~$430
|
|
Generic
Pharmaceuticals
|
$555 - $710
|
|
$610 - $670
|
|
International
Pharmaceuticals
|
~$65
|
|
~$65
|
|
Gross Margin as a
Percentage of Total Revenues, Net
|
~67%
|
|
~67%
|
|
Operating
Expenses
|
~$635
|
|
~$635
|
CASH, CASH FLOW AND OTHER UPDATES
As of June 30, 2023, the Company
had approximately $0.9 billion in
unrestricted cash and cash equivalents. Second-quarter 2023 net
cash provided by operating activities was approximately
$127 million compared to
approximately $133 million net cash
used in operating activities during second-quarter 2022. This
increase was primarily attributable to an increase in adjusted
EBITDA, coupled with decreases in net working capital, cash
interest payments and litigation related payments.
Amitiza® is a registered trademark of a Mallinckrodt company.
Dexilant® is a registered trademark of Takeda
Pharmaceutical U.S.A., Inc.
Chantix® is a registered trademark of Pfizer Inc.
FINANCIAL SCHEDULES
The following table presents Endo's unaudited Total revenues,
net for the three and six months ended June
30, 2023 and 2022 (dollars in thousands):
|
Three Months Ended
June 30,
|
|
Percent
Growth
|
|
Six Months Ended
June 30,
|
|
Percent
Growth
|
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
|
|
Branded
Pharmaceuticals:
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
XIAFLEX®
|
$
117,291
|
|
$
120,878
|
|
(3) %
|
|
$
214,201
|
|
$
220,362
|
|
(3) %
|
|
SUPPRELIN®
LA
|
28,223
|
|
24,739
|
|
14 %
|
|
51,800
|
|
53,569
|
|
(3) %
|
|
Other Specialty
(1)
|
19,839
|
|
18,246
|
|
9 %
|
|
41,533
|
|
38,990
|
|
7 %
|
|
Total Specialty
Products
|
$
165,353
|
|
$
163,863
|
|
1 %
|
|
$
307,534
|
|
$
312,921
|
|
(2) %
|
|
Established
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCOCET®
|
$
26,445
|
|
$
26,256
|
|
1 %
|
|
$
52,501
|
|
$
52,431
|
|
— %
|
|
TESTOPEL®
|
11,600
|
|
10,021
|
|
16 %
|
|
22,589
|
|
18,901
|
|
20 %
|
|
Other Established
(2)
|
8,979
|
|
18,812
|
|
(52) %
|
|
27,326
|
|
39,560
|
|
(31) %
|
|
Total Established
Products
|
$
47,024
|
|
$
55,089
|
|
(15) %
|
|
$
102,416
|
|
$
110,892
|
|
(8) %
|
|
Total Branded
Pharmaceuticals (3)
|
$
212,377
|
|
$
218,952
|
|
(3) %
|
|
$
409,950
|
|
$
423,813
|
|
(3) %
|
|
Sterile
Injectables:
|
|
|
|
|
|
|
|
|
|
|
|
|
ADRENALIN®
|
$
27,133
|
|
$
26,774
|
|
1 %
|
|
$
52,708
|
|
$
60,597
|
|
(13) %
|
|
VASOSTRICT®
|
24,419
|
|
35,630
|
|
(31) %
|
|
50,370
|
|
191,520
|
|
(74) %
|
|
Other Sterile
Injectables (4)
|
85,476
|
|
60,767
|
|
41 %
|
|
135,205
|
|
111,082
|
|
22 %
|
|
Total Sterile
Injectables (3)
|
$
137,028
|
|
$
123,171
|
|
11 %
|
|
$
238,283
|
|
$
363,199
|
|
(34) %
|
|
Total Generic
Pharmaceuticals (5)
|
$
178,579
|
|
$
203,377
|
|
(12) %
|
|
$
376,759
|
|
$
389,321
|
|
(3) %
|
|
Total International
Pharmaceuticals
(6)
|
$
18,868
|
|
$
23,614
|
|
(20) %
|
|
$
37,127
|
|
$
45,040
|
|
(18) %
|
|
Total revenues,
net
|
$
546,852
|
|
$
569,114
|
|
(4) %
|
|
$ 1,062,119
|
|
$ 1,221,373
|
|
(13) %
|
|
__________
|
|
(1)
|
Products included
within Other Specialty include AVEED®,
NASCOBAL® Nasal Spray and QWO®.
|
|
(2)
|
Products included
within Other Established include, but are not limited to,
EDEX®.
|
|
(3)
|
Individual products
presented above represent the top two performing products in each
product category for either the three or six months ended June 30,
2023 and/or any product having revenues in excess of $25 million
during any completed quarterly period in 2023 or 2022.
|
|
(4)
|
Products included
within Other Sterile Injectables include, but are not limited to,
APLISOL®. During the second quarter of 2023, the
Company executed a Settlement Agreement and Release of Claims with
Novavax, Inc. (the Novavax Settlement Agreement) to resolve a
dispute under a previous manufacturing and services agreement. For
the three months ended June 30, 2023, the cash and non-cash
consideration received in connection with the Novavax Settlement
Agreement made up 6% of consolidated total revenues. No other
individual product within Other Sterile Injectables has exceeded 5%
of consolidated total revenues for the periods
presented.
|
|
(5)
|
The Generic
Pharmaceuticals segment is comprised of a portfolio of products
that are generic versions of branded products, are distributed
primarily through the same wholesalers, generally have limited or
no intellectual property protection and are sold within the U.S.
Varenicline tablets (Endo's generic version of Pfizer Inc.'s
Chantix®), which launched in September 2021, made up 10%
and 13%, for the three and six months ended June 30, 2023,
respectively, and 13% and 12% for the three and six months ended
June 30, 2022, respectively, of consolidated total revenues. During
the six months ended June 30, 2023, dexlansoprazole delayed release
capsules (Endo's generic version of Takeda Pharmaceuticals USA,
Inc.'s Dexilant®), which launched in November 2022, made
up 5% of consolidated total revenues. No other individual product
within this segment has exceeded 5% of consolidated total revenues
for the periods presented.
|
|
(6)
|
The International
Pharmaceuticals segment, which accounted for less than 5% of
consolidated total revenues for each of the periods presented,
includes a variety of specialty pharmaceutical products sold
outside the U.S., primarily in Canada through Endo's operating
company Paladin Labs Inc.
|
The following table presents unaudited Condensed Consolidated
Statement of Operations data for the three and six months ended
June 30, 2023 and 2022 (in thousands,
except per share data):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
TOTAL REVENUES,
NET
|
$
546,852
|
|
$
569,114
|
|
$ 1,062,119
|
|
$ 1,221,373
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
233,852
|
|
263,786
|
|
466,594
|
|
537,001
|
|
Selling, general and
administrative
|
137,729
|
|
180,830
|
|
288,522
|
|
407,991
|
|
Research and
development
|
28,037
|
|
29,788
|
|
55,740
|
|
65,918
|
|
Acquired in-process
research and development
|
—
|
|
65,000
|
|
—
|
|
67,900
|
|
Litigation-related and
other contingencies, net
|
28,013
|
|
208
|
|
43,213
|
|
25,362
|
|
Asset impairment
charges
|
—
|
|
1,781,063
|
|
146
|
|
1,801,016
|
|
Acquisition-related
and integration items, net
|
365
|
|
1,825
|
|
762
|
|
448
|
|
Interest expense,
net
|
120
|
|
139,784
|
|
229
|
|
274,733
|
|
Reorganization items,
net
|
84,267
|
|
—
|
|
169,619
|
|
—
|
|
Other expense
(income), net
|
179
|
|
(19,438)
|
|
54
|
|
(18,149)
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAX
|
$
34,290
|
|
$
(1,873,732)
|
|
$
37,240
|
|
$
(1,940,847)
|
|
INCOME TAX
EXPENSE
|
10,279
|
|
7,151
|
|
16,052
|
|
5,336
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
|
$
24,011
|
|
$
(1,880,883)
|
|
$
21,188
|
|
$
(1,946,183)
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(573)
|
|
(4,544)
|
|
(1,029)
|
|
(11,218)
|
|
NET INCOME
(LOSS)
|
$
23,438
|
|
$
(1,885,427)
|
|
$
20,159
|
|
$
(1,957,401)
|
|
NET INCOME (LOSS) PER
SHARE—BASIC:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.10
|
|
$
(8.00)
|
|
$
0.09
|
|
$
(8.30)
|
|
Discontinued
operations
|
—
|
|
(0.02)
|
|
—
|
|
(0.05)
|
|
Basic
|
$
0.10
|
|
$
(8.02)
|
|
$
0.09
|
|
$
(8.35)
|
|
NET INCOME (LOSS) PER
SHARE—DILUTED:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.10
|
|
$
(8.00)
|
|
$
0.09
|
|
$
(8.30)
|
|
Discontinued
operations
|
—
|
|
(0.02)
|
|
—
|
|
(0.05)
|
|
Diluted
|
$
0.10
|
|
$
(8.02)
|
|
$
0.09
|
|
$
(8.35)
|
|
WEIGHTED AVERAGE
SHARES:
|
|
|
|
|
|
|
|
|
Basic
|
235,220
|
|
235,117
|
|
235,218
|
|
234,498
|
|
Diluted
|
235,220
|
|
235,117
|
|
235,662
|
|
234,498
|
The following table presents unaudited Condensed Consolidated
Balance Sheet data at June 30, 2023
and December 31, 2022 (in
thousands):
|
June 30,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$
865,918
|
|
$ 1,018,883
|
|
Restricted cash and
cash equivalents
|
159,707
|
|
145,358
|
|
Accounts
receivable
|
447,885
|
|
493,988
|
|
Inventories,
net
|
274,535
|
|
274,499
|
|
Other current
assets
|
114,867
|
|
144,040
|
|
Total current
assets
|
$ 1,862,912
|
|
$ 2,076,768
|
|
TOTAL NON-CURRENT
ASSETS
|
3,556,199
|
|
3,681,169
|
|
TOTAL ASSETS
|
$ 5,419,111
|
|
$ 5,757,937
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts payable and
accrued expenses, including legal settlement accruals
|
$
563,425
|
|
$
687,183
|
|
Other current
liabilities
|
1,457
|
|
2,444
|
|
Total current
liabilities
|
$
564,882
|
|
$
689,627
|
|
OTHER
LIABILITIES
|
56,634
|
|
61,700
|
|
LIABILITIES SUBJECT TO
COMPROMISE
|
8,924,870
|
|
9,168,782
|
|
SHAREHOLDERS'
DEFICIT
|
(4,127,275)
|
|
(4,162,172)
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
$ 5,419,111
|
|
$ 5,757,937
|
The following table presents unaudited Condensed Consolidated
Statement of Cash Flow data for the six months ended June 30, 2023 and 2022 (in thousands):
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
(loss)
|
$
20,159
|
|
$
(1,957,401)
|
|
Adjustments to
reconcile Net income (loss) to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
and amortization
|
155,003
|
|
206,224
|
|
Asset
impairment charges
|
146
|
|
1,801,016
|
|
Other,
including cash payments to claimants from Qualified Settlement
Funds
|
14,106
|
|
18,064
|
|
Net cash provided by
operating activities
|
$
189,414
|
|
$
67,903
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital expenditures,
excluding capitalized interest
|
$
(53,516)
|
|
$
(47,559)
|
|
Acquisitions,
including in-process research and development, net of cash and
restricted
cash acquired
|
—
|
|
(89,520)
|
|
Proceeds from sale of
business and other assets
|
2,259
|
|
21,133
|
|
Other
|
19,354
|
|
4,200
|
|
Net cash used in
investing activities
|
$
(31,903)
|
|
$
(111,746)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Payments on
borrowings, including certain adequate protection payments, net
(a)
|
$
(294,988)
|
|
$
(193,312)
|
|
Other
|
(2,083)
|
|
(3,638)
|
|
Net cash used in
financing activities
|
$
(297,071)
|
|
$
(196,950)
|
|
Effect of foreign
exchange rate
|
944
|
|
(452)
|
|
NET DECREASE IN CASH,
CASH EQUIVALENTS, RESTRICTED CASH AND
RESTRICTED CASH EQUIVALENTS
|
$
(138,616)
|
|
$
(241,245)
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
1,249,241
|
|
1,631,310
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, END OF PERIOD
|
$ 1,110,625
|
|
$ 1,390,065
|
|
__________
|
|
(a)
|
Beginning during the
third quarter of 2022, Endo became obligated to make certain
adequate protection payments as a result of the Chapter 11
proceedings, which are currently being accounted for as a reduction
of the carrying amount of the related debt instruments and
presented as financing cash outflows. Some or all of the adequate
protection payments may later be recharacterized as interest
expense and/or as operating cash outflows depending upon certain
developments in the Chapter 11 proceedings, which could result in
increases in interest expense and/or decreases in operating cash
flows in future periods that may be material.
|
SUPPLEMENTAL FINANCIAL INFORMATION
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses certain non-GAAP financial measures. For additional
information on the Company's use of such non-GAAP financial
measures, refer to Endo's Current Report on Form 8-K furnished
today to the U.S. Securities and Exchange Commission, which
includes an explanation of the Company's reasons for using non-GAAP
measures.
The tables below provide reconciliations of certain of the
Company's non-GAAP financial measures to their most directly
comparable GAAP amounts. Refer to the "Notes to the Reconciliations
of GAAP and Non-GAAP Financial Measures" section below for
additional details regarding the adjustments to the non-GAAP
financial measures detailed throughout this Supplemental Financial
Information section.
Reconciliation of EBITDA and Adjusted EBITDA
(non-GAAP)
The following table provides a reconciliation of Net income
(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the three and six
months ended June 30, 2023 and 2022
(in thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income (loss)
(GAAP)
|
$
23,438
|
|
$
(1,885,427)
|
|
$
20,159
|
|
$
(1,957,401)
|
|
Income tax
expense
|
10,279
|
|
7,151
|
|
16,052
|
|
5,336
|
|
Interest expense,
net
|
120
|
|
139,784
|
|
229
|
|
274,733
|
|
Depreciation and
amortization (1)
|
77,130
|
|
99,762
|
|
155,003
|
|
202,400
|
|
EBITDA
(non-GAAP)
|
$
110,967
|
|
$
(1,638,730)
|
|
$
191,443
|
|
$
(1,474,932)
|
|
Amounts related to
continuity and separation benefits,
cost reductions and strategic review initiatives (2)
|
14,281
|
|
37,347
|
|
25,954
|
|
94,996
|
|
Certain
litigation-related and other contingencies, net (3)
|
28,013
|
|
208
|
|
43,213
|
|
25,362
|
|
Certain legal costs
(4)
|
2,113
|
|
(9,462)
|
|
3,673
|
|
23,270
|
|
Asset impairment
charges (5)
|
—
|
|
1,781,063
|
|
146
|
|
1,801,016
|
|
Fair value of
contingent consideration (6)
|
365
|
|
1,825
|
|
762
|
|
448
|
|
Share-based
compensation (1)
|
—
|
|
2,721
|
|
2,091
|
|
7,650
|
|
Other expense (income),
net (7)
|
179
|
|
(19,438)
|
|
54
|
|
(18,149)
|
|
Reorganization items,
net (8)
|
84,267
|
|
—
|
|
169,619
|
|
—
|
|
Other (9)
|
2,659
|
|
128
|
|
14,463
|
|
253
|
|
Discontinued
operations, net of tax (10)
|
573
|
|
4,544
|
|
1,029
|
|
11,218
|
|
Adjusted EBITDA
(non-GAAP) (13)
|
$
243,417
|
|
$
160,206
|
|
$
452,447
|
|
$
471,132
|
Reconciliation of Adjusted Income from Continuing Operations
(non-GAAP)
The following table provides a reconciliation of the Company's
Income (loss) from continuing operations (GAAP) to Adjusted income
from continuing operations (non-GAAP) for the three and six months
ended June 30, 2023 and 2022 (in
thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Income (loss) from
continuing operations (GAAP)
|
$
24,011
|
|
$
(1,880,883)
|
|
$
21,188
|
|
$
(1,946,183)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (11)
|
64,425
|
|
87,568
|
|
129,681
|
|
177,802
|
|
Amounts related
to continuity and separation benefits,
cost reductions and strategic review initiatives
(2)
|
14,281
|
|
37,347
|
|
25,954
|
|
94,996
|
|
Certain
litigation-related and other contingencies, net (3)
|
28,013
|
|
208
|
|
43,213
|
|
25,362
|
|
Certain legal
costs (4)
|
2,113
|
|
(9,462)
|
|
3,673
|
|
23,270
|
|
Asset
impairment charges (5)
|
—
|
|
1,781,063
|
|
146
|
|
1,801,016
|
|
Fair value of
contingent consideration (6)
|
365
|
|
1,825
|
|
762
|
|
448
|
|
Reorganization
items, net (8)
|
84,267
|
|
—
|
|
169,619
|
|
—
|
|
Other
(9)
|
4,581
|
|
(19,170)
|
|
16,670
|
|
(17,847)
|
|
Tax adjustments
(12)
|
8,649
|
|
8,036
|
|
13,127
|
|
3,607
|
|
Adjusted income from
continuing operations (non-GAAP)
(13)
|
$
230,705
|
|
$
6,532
|
|
$
424,033
|
|
$
162,471
|
Reconciliation of Other Adjusted Income Statement Data
(non-GAAP)
The following tables provide detailed reconciliations of various
other income statement data between the GAAP and non-GAAP amounts
for the three and six months ended June 30,
2023 and 2022 (in thousands, except per share data):
|
Three Months Ended
June 30, 2023
|
|
Total
revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross
margin %
|
|
Total
operating
expenses
|
|
Operating
expense
to
revenue
%
|
|
Operating
income from
continuing
operations
|
|
Operating
margin %
|
|
Other non-
operating
expense
(income),
net
|
|
Income from
continuing
operations
before
income tax
|
|
Income tax
expense
|
|
Effective
tax rate
|
|
Income from
continuing
operations
|
|
Discontinued
operations,
net of tax
|
|
Net income
|
|
Diluted net
income per
share from
continuing
operations
(14)
|
|
Reported
(GAAP)
|
$
546,852
|
|
$
233,852
|
|
$
313,000
|
|
57.2 %
|
|
$
194,144
|
|
35.5 %
|
|
$ 118,856
|
|
21.7 %
|
|
$
84,566
|
|
$ 34,290
|
|
$
10,279
|
|
30.0 %
|
|
$ 24,011
|
|
$
(573)
|
|
$ 23,438
|
|
$ 0.10
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (11)
|
—
|
|
(64,425)
|
|
64,425
|
|
|
|
—
|
|
|
|
64,425
|
|
|
|
—
|
|
64,425
|
|
—
|
|
|
|
64,425
|
|
—
|
|
64,425
|
|
|
|
Amounts related
to continuity and
separation benefits,
cost reductions and
strategic review
initiatives (2)
|
—
|
|
(488)
|
|
488
|
|
|
|
(13,793)
|
|
|
|
14,281
|
|
|
|
—
|
|
14,281
|
|
—
|
|
|
|
14,281
|
|
—
|
|
14,281
|
|
|
|
Certain
litigation-
related and other
contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(28,013)
|
|
|
|
28,013
|
|
|
|
—
|
|
28,013
|
|
—
|
|
|
|
28,013
|
|
—
|
|
28,013
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(2,113)
|
|
|
|
2,113
|
|
|
|
—
|
|
2,113
|
|
—
|
|
|
|
2,113
|
|
—
|
|
2,113
|
|
|
|
Fair value of
contingent
consideration (6)
|
—
|
|
—
|
|
—
|
|
|
|
(365)
|
|
|
|
365
|
|
|
|
—
|
|
365
|
|
—
|
|
|
|
365
|
|
—
|
|
365
|
|
|
|
Reorganization
items,
net (8)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(84,267)
|
|
84,267
|
|
—
|
|
|
|
84,267
|
|
—
|
|
84,267
|
|
|
|
Other (9)
|
—
|
|
(125)
|
|
125
|
|
|
|
(2,534)
|
|
|
|
2,659
|
|
|
|
(1,922)
|
|
4,581
|
|
—
|
|
|
|
4,581
|
|
—
|
|
4,581
|
|
|
|
Tax adjustments
(12)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(8,649)
|
|
|
|
8,649
|
|
—
|
|
8,649
|
|
|
|
Discontinued
operations, net of tax
(10)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
573
|
|
573
|
|
|
|
After considering
items
(non-GAAP) (13)
|
$
546,852
|
|
$
168,814
|
|
$
378,038
|
|
69.1 %
|
|
$
147,326
|
|
26.9 %
|
|
$ 230,712
|
|
42.2 %
|
|
$
(1,623)
|
|
$ 232,335
|
|
$ 1,630
|
|
0.7 %
|
|
$ 230,705
|
|
$
—
|
|
$
230,705
|
|
$ 0.98
|
|
Three Months Ended
June 30, 2022
|
|
Total
revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross
margin %
|
|
Total
operating
expenses
|
|
Operating
expense
to
revenue %
|
|
Operating
(loss)
income from
continuing
operations
|
|
Operating
margin %
|
|
Other non-
operating
expense,
net
|
|
(Loss)
income from
continuing operations
before
income tax
|
|
Income tax
expense
(benefit)
|
|
Effective
tax rate
|
|
(Loss)
income from
continuing
operations
|
|
Discontinued
operations,
net of tax
|
|
Net (loss)
income
|
|
Diluted net
(loss)
income per
share from
continuing
operations
(14)
|
|
Reported
(GAAP)
|
$
569,114
|
|
$
263,786
|
|
$
305,328
|
|
53.6 %
|
|
$
2,058,714
|
|
361.7 %
|
|
$
(1,753,386)
|
|
(308.1) %
|
|
$
120,346
|
|
$
(1,873,732)
|
|
$ 7,151
|
|
(0.4) %
|
|
$
(1,880,883)
|
|
$
(4,544)
|
|
$
(1,885,427)
|
|
$ (8.00)
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (11)
|
—
|
|
(87,568)
|
|
87,568
|
|
|
|
—
|
|
|
|
87,568
|
|
|
|
—
|
|
87,568
|
|
—
|
|
|
|
87,568
|
|
—
|
|
87,568
|
|
|
|
Amounts related to
continuity and
separation benefits,
cost reductions and
strategic review
initiatives (2)
|
—
|
|
(5,107)
|
|
5,107
|
|
|
|
(32,240)
|
|
|
|
37,347
|
|
|
|
—
|
|
37,347
|
|
—
|
|
|
|
37,347
|
|
—
|
|
37,347
|
|
|
|
Certain
litigation-
related and other
contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(208)
|
|
|
|
208
|
|
|
|
—
|
|
208
|
|
—
|
|
|
|
208
|
|
—
|
|
208
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
9,462
|
|
|
|
(9,462)
|
|
|
|
—
|
|
(9,462)
|
|
—
|
|
|
|
(9,462)
|
|
—
|
|
(9,462)
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(1,781,063)
|
|
|
|
1,781,063
|
|
|
|
—
|
|
1,781,063
|
|
—
|
|
|
|
1,781,063
|
|
—
|
|
1,781,063
|
|
|
|
Fair value of
contingent
consideration (6)
|
—
|
|
—
|
|
—
|
|
|
|
(1,825)
|
|
|
|
1,825
|
|
|
|
—
|
|
1,825
|
|
—
|
|
|
|
1,825
|
|
—
|
|
1,825
|
|
|
|
Other (9)
|
—
|
|
(125)
|
|
125
|
|
|
|
—
|
|
|
|
125
|
|
|
|
19,295
|
|
(19,170)
|
|
—
|
|
|
|
(19,170)
|
|
—
|
|
(19,170)
|
|
|
|
Tax adjustments
(12)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(8,036)
|
|
|
|
8,036
|
|
—
|
|
8,036
|
|
|
|
Discontinued
operations, net of tax
(10)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
4,544
|
|
4,544
|
|
|
|
After considering
items
(non-GAAP) (13)
|
$
569,114
|
|
$
170,986
|
|
$
398,128
|
|
70.0 %
|
|
$
252,840
|
|
44.4 %
|
|
$ 145,288
|
|
25.5 %
|
|
$
139,641
|
|
$
5,647
|
|
$
(885)
|
|
(15.7) %
|
|
$
6,532
|
|
$
—
|
|
$
6,532
|
|
$ 0.03
|
|
Six Months Ended
June 30, 2023
|
|
Total
revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross
margin %
|
|
Total
operating
expenses
|
|
Operating
expense
to
revenue
%
|
|
Operating
income from
continuing
operations
|
|
Operating
margin %
|
|
Other non-
operating
expense
(income),
net
|
|
Income from
continuing
operations
before
income tax
|
|
Income tax
expense
|
|
Effective
tax rate
|
|
Income from
continuing
operations
|
|
Discontinued
operations,
net of tax
|
|
Net income
|
|
Diluted net
income per
share from
continuing
operations
(14)
|
|
Reported
(GAAP)
|
$
1,062,119
|
|
$
466,594
|
|
$
595,525
|
|
56.1 %
|
|
$
388,383
|
|
36.6 %
|
|
$ 207,142
|
|
19.5 %
|
|
$
169,902
|
|
$ 37,240
|
|
$
16,052
|
|
43.1 %
|
|
$ 21,188
|
|
$
(1,029)
|
|
$ 20,159
|
|
$ 0.09
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (11)
|
—
|
|
(129,681)
|
|
129,681
|
|
|
|
—
|
|
|
|
129,681
|
|
|
|
—
|
|
129,681
|
|
—
|
|
|
|
129,681
|
|
—
|
|
129,681
|
|
|
|
Amounts related to
continuity and
separation benefits,
cost reductions and
strategic review
initiatives (2)
|
—
|
|
(2,470)
|
|
2,470
|
|
|
|
(23,484)
|
|
|
|
25,954
|
|
|
|
—
|
|
25,954
|
|
—
|
|
|
|
25,954
|
|
—
|
|
25,954
|
|
|
|
Certain
litigation-
related and other
contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(43,213)
|
|
|
|
43,213
|
|
|
|
—
|
|
43,213
|
|
—
|
|
|
|
43,213
|
|
—
|
|
43,213
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(3,673)
|
|
|
|
3,673
|
|
|
|
—
|
|
3,673
|
|
—
|
|
|
|
3,673
|
|
—
|
|
3,673
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(146)
|
|
|
|
146
|
|
|
|
—
|
|
146
|
|
—
|
|
|
|
146
|
|
—
|
|
146
|
|
|
|
Fair value of
contingent
consideration (6)
|
—
|
|
—
|
|
—
|
|
|
|
(762)
|
|
|
|
762
|
|
|
|
—
|
|
762
|
|
—
|
|
|
|
762
|
|
—
|
|
762
|
|
|
|
Reorganization
items,
net (8)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(169,619)
|
|
169,619
|
|
—
|
|
|
|
169,619
|
|
—
|
|
169,619
|
|
|
|
Other (9)
|
—
|
|
(778)
|
|
778
|
|
|
|
(13,686)
|
|
|
|
14,464
|
|
|
|
(2,206)
|
|
16,670
|
|
—
|
|
|
|
16,670
|
|
—
|
|
16,670
|
|
|
|
Tax adjustments
(12)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(13,127)
|
|
|
|
13,127
|
|
—
|
|
13,127
|
|
|
|
Discontinued
operations, net of tax
(10)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
1,029
|
|
1,029
|
|
|
|
After considering
items
(non-GAAP) (13)
|
$
1,062,119
|
|
$
333,665
|
|
$
728,454
|
|
68.6 %
|
|
$
303,419
|
|
28.6 %
|
|
$ 425,035
|
|
40.0 %
|
|
$
(1,923)
|
|
$ 426,958
|
|
$ 2,925
|
|
0.7 %
|
|
$ 424,033
|
|
$
—
|
|
$ 424,033
|
|
$ 1.80
|
|
Six Months Ended
June 30, 2022
|
|
Total
revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross
margin %
|
|
Total
operating
expenses
|
|
Operating
expense to
revenue %
|
|
Operating
(loss) income
from
continuing
operations
|
|
Operating
margin %
|
|
Other non-
operating expense,
net
|
|
(Loss)
income from
continuing
operations
before
income tax
|
|
Income tax
expense
|
|
Effective
tax rate
|
|
(Loss)
income from
continuing
operations
|
|
Discontinued
operations,
net of tax
|
|
Net (loss)
income
|
|
Diluted net
(loss)
income per
share from
continuing
operations
(14)
|
|
Reported
(GAAP)
|
$
1,221,373
|
|
$
537,001
|
|
$
684,372
|
|
56.0 %
|
|
$
2,368,635
|
|
193.9 %
|
|
$
(1,684,263)
|
|
(137.9) %
|
|
$
256,584
|
|
$
(1,940,847)
|
|
$ 5,336
|
|
(0.3) %
|
|
$
(1,946,183)
|
|
$ (11,218)
|
|
$
(1,957,401)
|
|
$ (8.30)
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (11)
|
—
|
|
(177,802)
|
|
177,802
|
|
|
|
—
|
|
|
|
177,802
|
|
|
|
—
|
|
177,802
|
|
—
|
|
|
|
177,802
|
|
—
|
|
177,802
|
|
|
|
Amounts related to
continuity and
separation benefits,
cost reductions and
strategic review
initiatives (2)
|
—
|
|
(20,844)
|
|
20,844
|
|
|
|
(74,152)
|
|
|
|
94,996
|
|
|
|
—
|
|
94,996
|
|
—
|
|
|
|
94,996
|
|
—
|
|
94,996
|
|
|
|
Certain
litigation-
related and other
contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(25,362)
|
|
|
|
25,362
|
|
|
|
—
|
|
25,362
|
|
—
|
|
|
|
25,362
|
|
—
|
|
25,362
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(23,270)
|
|
|
|
23,270
|
|
|
|
—
|
|
23,270
|
|
—
|
|
|
|
23,270
|
|
—
|
|
23,270
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(1,801,016)
|
|
|
|
1,801,016
|
|
|
|
—
|
|
1,801,016
|
|
—
|
|
|
|
1,801,016
|
|
—
|
|
1,801,016
|
|
|
|
Fair value of
contingent
consideration (6)
|
—
|
|
—
|
|
—
|
|
|
|
(448)
|
|
|
|
448
|
|
|
|
—
|
|
448
|
|
—
|
|
|
|
448
|
|
—
|
|
448
|
|
|
|
Other (9)
|
—
|
|
(250)
|
|
250
|
|
|
|
—
|
|
|
|
250
|
|
|
|
18,097
|
|
(17,847)
|
|
—
|
|
|
|
(17,847)
|
|
—
|
|
(17,847)
|
|
|
|
Tax adjustments
(12)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(3,607)
|
|
|
|
3,607
|
|
—
|
|
3,607
|
|
|
|
Discontinued
operations, net of tax
(10)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
11,218
|
|
11,218
|
|
|
|
After considering
items
(non-GAAP) (13)
|
$
1,221,373
|
|
$
338,105
|
|
$
883,268
|
|
72.3 %
|
|
$
444,387
|
|
36.4 %
|
|
$ 438,881
|
|
35.9 %
|
|
$
274,681
|
|
$ 164,200
|
|
$ 1,729
|
|
1.1 %
|
|
$ 162,471
|
|
$
—
|
|
$ 162,471
|
|
$ 0.69
|
Notes to the Reconciliations of GAAP and Non-GAAP
Financial Measures
Notes to certain line items included in the reconciliations of
the GAAP financial measures to the non-GAAP financial measures for
the three and six months ended June 30,
2023 and 2022 are as follows:
|
(1)
|
Depreciation and
amortization and Share-based compensation amounts per the Adjusted
EBITDA reconciliations do not include amounts reflected in other
lines of the reconciliations, including Amounts related to
continuity and separation benefits, cost reductions and strategic
review initiatives.
|
|
|
|
(2)
|
Adjustments for amounts
related to continuity and separation benefits, cost reductions and
strategic review initiatives included the following (in
thousands):
|
|
Three Months Ended
June 30,
|
|
2023
|
|
2022
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
1,016
|
|
$
14,092
|
|
$
4,846
|
|
$
6,898
|
|
Accelerated
depreciation
|
—
|
|
—
|
|
—
|
|
147
|
|
Inventory
adjustments
|
(528)
|
|
(322)
|
|
261
|
|
904
|
|
Other, including
strategic review initiatives
|
—
|
|
23
|
|
—
|
|
24,291
|
|
Total
|
$
488
|
|
$
13,793
|
|
$
5,107
|
|
$
32,240
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
2,140
|
|
$
23,765
|
|
$
10,098
|
|
$
33,973
|
|
Accelerated
depreciation
|
—
|
|
—
|
|
2,164
|
|
1,660
|
|
Inventory
adjustments
|
(261)
|
|
(322)
|
|
1,027
|
|
2,461
|
|
Other, including
strategic review initiatives
|
591
|
|
41
|
|
7,555
|
|
36,058
|
|
Total
|
$
2,470
|
|
$
23,484
|
|
$
20,844
|
|
$
74,152
|
|
|
The amounts in the
tables above include adjustments related to previously announced
restructuring activities, certain continuity and transitional
compensation arrangements, certain other cost reduction initiatives
and certain strategic review initiatives.
|
|
(3)
|
To exclude adjustments
to accruals for litigation-related settlement charges.
|
|
|
|
(4)
|
To exclude amounts
related to opioid-related legal expenses.
|
|
|
|
(5)
|
Adjustments for asset
impairment charges included in the following (in
thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Goodwill impairment
charges
|
$
—
|
|
$
1,748,000
|
|
$
—
|
|
$
1,748,000
|
|
Other intangible asset
impairment charges
|
—
|
|
30,000
|
|
—
|
|
49,953
|
|
Property, plant and
equipment impairment charges
|
—
|
|
3,063
|
|
146
|
|
3,063
|
|
Total
|
$
—
|
|
$
1,781,063
|
|
$
146
|
|
$
1,801,016
|
|
(6)
|
To exclude the impact
of changes in the fair value of contingent consideration
liabilities resulting from changes to estimates regarding the
timing and amount of the future revenues of the underlying products
and changes in other assumptions impacting the probability of
incurring, and extent to which the Company could incur, related
contingent obligations.
|
|
|
|
(7)
|
To exclude Other
expense (income), net per the Condensed Consolidated Statements of
Operations.
|
|
|
|
(8)
|
Amounts relate to the
net expense or income recognized during Endo's bankruptcy
proceedings required to be presented as Reorganization items, net
under Accounting Standards Codification Topic 852,
Reorganizations.
|
|
|
|
(9)
|
The "Other" rows
included in each of the above reconciliations of GAAP financial
measures to non-GAAP financial measures (except for the
reconciliations of Net income (loss) (GAAP) to Adjusted EBITDA
(non-GAAP)) include the following (in thousands):
|
|
Three Months Ended
June 30,
|
|
2023
|
|
2022
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact
related to the re-
measurement of
intercompany debt
instruments
|
$
—
|
|
$
—
|
|
$
1,922
|
|
$
—
|
|
$
—
|
|
$
(2,092)
|
|
Other
miscellaneous
|
125
|
|
2,534
|
|
—
|
|
125
|
|
—
|
|
(17,203)
|
|
Total
|
$
125
|
|
$
2,534
|
|
$
1,922
|
|
$
125
|
|
$
—
|
|
$
(19,295)
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact
related to the re-
measurement of
intercompany debt
instruments
|
$
—
|
|
$
—
|
|
$
2,206
|
|
$
—
|
|
$
—
|
|
$
(894)
|
|
Other
miscellaneous
|
778
|
|
13,686
|
|
—
|
|
250
|
|
—
|
|
(17,203)
|
|
Total
|
$
778
|
|
$
13,686
|
|
$
2,206
|
|
$
250
|
|
$
—
|
|
$
(18,097)
|
|
|
The "Other" row
included in the reconciliations of Net income (loss) (GAAP) to
Adjusted EBITDA (non-GAAP) primarily relates to the items
enumerated in the foregoing "Cost of revenues" and "Operating
expenses" columns.
|
|
(10)
|
To exclude the results
of the businesses reported as discontinued operations, net of
tax.
|
|
|
|
(11)
|
To exclude amortization
expense related to intangible assets.
|
|
|
|
(12)
|
Adjusted income taxes
are calculated by tax effecting adjusted pre-tax income and
permanent book-tax differences at the applicable effective tax rate
that will be determined by reference to statutory tax rates in the
relevant jurisdictions in which the Company operates. Adjusted
income taxes include current and deferred income tax expense
commensurate with the non-GAAP measure of profitability.
|
|
|
|
(13)
|
Amounts of Acquired
in-process research and development charges included within these
non-GAAP financial measures are set forth in the table below (in
thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Acquired in-process
research and
development charges
|
$
—
|
|
$
65,000
|
|
$
—
|
|
$
67,900
|
|
(14)
|
Calculated as income or
loss from continuing operations divided by the applicable weighted
average share number. The applicable weighted average share numbers
are as follows (in thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
GAAP
|
235,220
|
|
235,117
|
|
235,662
|
|
234,498
|
|
Non-GAAP
Adjusted
|
235,220
|
|
236,217
|
|
235,662
|
|
236,466
|
Non-GAAP Financial Measures
The Company utilizes certain financial measures that are not
prescribed by or prepared in accordance with accounting principles
generally accepted in the U.S. (GAAP). These non-GAAP financial
measures are not, and should not be viewed as, substitutes for GAAP
net income and its components and diluted net income per share
amounts. Despite the importance of these measures to management in
goal setting and performance measurement, the company stresses that
these are non-GAAP financial measures that have no standardized
meaning prescribed by GAAP and, therefore, have limits in their
usefulness to investors. Because of the non-standardized
definitions, non-GAAP adjusted EBITDA and non-GAAP adjusted net
income from continuing operations and its components (unlike GAAP
net income from continuing operations 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.
Investors are encouraged to review the reconciliations of the
non-GAAP financial measures used in this press release to their
most directly comparable GAAP financial measures. However, the
Company does not provide reconciliations of projected non-GAAP
financial measures to GAAP financial measures, nor does it provide
comparable projected GAAP financial measures for such projected
non-GAAP financial measures. The Company is unable to provide such
reconciliations without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations, including adjustments that
could be made for asset impairments, contingent consideration
adjustments, legal settlements, gain / loss on extinguishment of
debt, adjustments to inventory and other charges reflected in the
reconciliation of historic numbers, the amounts of which could be
significant.
See Endo's Current Report on Form
8-K furnished today to the U.S. Securities and Exchange Commission
for an explanation of Endo's non-GAAP financial measures.
About Endo
Endo (OTC: ENDPQ) is a specialty pharmaceutical company
committed to helping everyone we serve live their best life through
the delivery of quality, life-enhancing therapies. Our decades of
proven success come from passionate team members around the globe
collaborating to bring treatments forward. Together, we boldly
transform insights into treatments benefiting those who need them,
when they need them. Learn more at www.endo.com or connect
with us on LinkedIn.
Cautionary Note Regarding Forward-Looking
Statements
Certain information in this press release may be
considered "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation, including, but not limited to,
statements with respect to financial guidance, expectations or
outlook, the restructuring support agreement and the sale
transaction, the Chapter 11 proceedings, and any other statements
that refer to Endo's expected, estimated or anticipated future
results or that do not relate solely to historical facts.
Statements including words or phrases such as "believe," "expect,"
"anticipate," "intend," "estimate," "plan," "will," "may," "look
forward," "guidance," "future," "potential" or similar expressions
are forward-looking statements. All forward-looking statements in
this communication reflect the Company's current views as of the
date of this communication about its plans, intentions,
expectations, strategies and prospects, which are based on the
information currently available to it and on assumptions it has
made. Actual results may differ materially and adversely from
current expectations based on a number of factors, including, among
other things, the following: the timing, impact or results of any
pending or future litigation (including any appeals or
injunctions), investigations, proceedings or claims, including
opioid, tax and antitrust related matters; actual or contingent
liabilities; settlement discussions or negotiations; the Company's
liquidity, financial performance, cash position and operations; the
Company's strategy; risks and uncertainties associated with Chapter
11 proceedings; the negative impacts on the Company's businesses as
a result of filing for and operating under Chapter 11 protection;
the time, terms and ability to confirm a sale of the Company's
businesses under Section 363 of the U.S. Bankruptcy Code; the
adequacy of the capital resources of the Company's businesses and
the difficulty in forecasting the liquidity requirements of the
operations of the Company's businesses; the unpredictability of the
Company's financial results while in Chapter 11 proceedings; the
Company's ability to discharge claims in Chapter 11 proceedings;
negotiations with the holders of the Company's indebtedness and its
trade creditors and other significant creditors; risks and
uncertainties with performing under the terms of the restructuring
support agreement and any other arrangement with lenders or
creditors while in Chapter 11 proceedings; the Company's ability to
conduct business as usual; the Company's ability to continue to
serve customers, suppliers and other business partners at the high
level of service and performance they have come to expect from the
Company; the Company's ability to continue to pay employees,
suppliers and vendors; the ability to control costs during Chapter
11 proceedings; adverse litigation; the risk that the Company's
Chapter 11 Cases may be converted to cases under Chapter 7 of the
Bankruptcy Code; the Company's ability to secure operating capital;
the Company's ability to take advantage of opportunities to acquire
assets with upside potential; the Company's ability to execute on
its strategic plan to pursue, evaluate and close an asset sale of
the Company's businesses pursuant to Section 363 of the U.S.
Bankruptcy Code; the impact of competition and the timing of
competitive entrants; Endo's ability to satisfy judgments or
settlements or pursue appeals including bonding requirements;
Endo's ability to adjust to changing market conditions; Endo's
ability to attract and retain key personnel; supply chain
interruptions or difficulties; changes in competitive or market
conditions; changes in legislation or regulatory developments;
Endo's ability to obtain and maintain adequate protection for
Endo's intellectual property rights; the timing and uncertainty of
the results of both the research and development and regulatory
processes, including regulatory decisions, product recalls,
withdrawals and other unusual items; domestic and foreign health
care and cost containment reforms, including government pricing,
tax and reimbursement policies; technological advances and patents
obtained by competitors; the performance, including the approval,
introduction, and consumer and physician acceptance of new products
and the continuing acceptance of currently marketed products;
Endo's ability to integrate any newly acquired products into Endo's
portfolio and achieve any financial or commercial expectations; the
impact that known and unknown side effects may have on market
perception and consumer preference for Endo's products; the
effectiveness of advertising and other promotional campaigns; the
timely and successful implementation of any strategic initiatives;
unfavorable publicity regarding the misuse of opioids; the
uncertainty associated with the identification of and successful
consummation and execution of external corporate development
initiatives and strategic partnering transactions; Endo's ability
to advance its strategic priorities, develop its product pipeline
and continue to develop the market for XIAFLEX® and
other branded and unbranded products; and Endo's ability to obtain
and successfully manufacture, maintain and distribute a sufficient
supply of products to meet market demand in a timely manner. In
addition, U.S. and international economic conditions, including
consumer confidence and debt levels, inflation, taxation, changes
in interest and currency exchange rates, international relations,
capital and credit availability, the status of financial markets
and institutions and the impact of continued economic volatility,
can materially affect Endo's results. Therefore, the reader is
cautioned not to rely on these forward-looking statements. Endo
expressly disclaims any intent or obligation to update these
forward-looking statements, except as required to do so by law.
Additional information concerning risk factors, including those
referenced above, can be found in press releases issued by Endo, as
well as Endo's public periodic filings with the U.S. Securities and
Exchange Commission and with securities regulators in Canada, including the discussion under the
heading "Risk Factors" in Endo's most recent Annual Report on Form
10-K and any subsequent Quarterly Reports on Form 10-Q or other
filings with the U.S. Securities and Exchange Commission. Copies of
Endo's press releases and additional information about Endo are
available at www.endo.com or you can contact the Endo Investor
Relations Department at relations.investor@endo.com.
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SOURCE Endo International plc