UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 10, 2014 (June 10, 2014)
ENDO INTERNATIONAL PLC
(Exact Name of Registrant as Specified in Its Charter)
| Ireland | 001-36326 | Not Applicable | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 33 Fitzwilliam Square, Dublin 2 Ireland | Not Applicable | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 011-353-1-669-6634
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.07. | Submission of Matters to a Vote of Security Holders. |
| (a) | On June 10, 2014, the Company held its Annual General Meeting of Shareholders in Dublin, Ireland. |
| (b) | Shareholders voted on the matters set forth below. |
| 1. | The proposal to elect nine directors, representing all of the members of the Board of Directors of the Company, to serve until the next Annual General Meeting of Shareholders or until their successors are duly elected and qualified was approved based upon the following votes: |
| Nominee | Votes For Approval |
Votes Against |
Abstentions | Broker Non-Votes |
||||||||||||
| Roger H. Kimmel |
132,064,324 | 613,057 | 32,414 | 5,443,035 | ||||||||||||
| Rajiv De Silva |
132,627,489 | 50,638 | 31,668 | 5,443,035 | ||||||||||||
| John J. Delucca |
132,533,547 | 143,934 | 32,314 | 5,443,035 | ||||||||||||
| Arthur J. Higgins |
132,632,646 | 44,268 | 32,881 | 5,443,035 | ||||||||||||
| Nancy J. Hutson, Ph.D. |
132,630,674 | 47,807 | 31,314 | 5,443,035 | ||||||||||||
| Michael Hyatt |
132,013,858 | 662,406 | 33,531 | 5,443,035 | ||||||||||||
| William P. Montague |
132,526,067 | 151,314 | 32,414 | 5,443,035 | ||||||||||||
| Jill D. Smith |
132,627,593 | 50,788 | 31,414 | 5,443,035 | ||||||||||||
| William F. Spengler |
132,531,997 | 144,383 | 33,415 | 5,443,035 | ||||||||||||
| 2. | The proposal to approve the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2014 and to authorize the Audit Committee of the Board of Directors to determine the Auditors’ remuneration was approved based upon the following votes: |
| Votes for approval |
137,228,684 | |||
| Votes against |
854,371 | |||
| Abstentions |
69,775 |
| 3. | The proposal to approve, by advisory vote, named executive officer compensation was approved based upon the following votes: |
| Votes for approval |
131,285,375 | |||
| Votes against |
1,275,803 | |||
| Abstentions |
148,617 | |||
| Broker non-votes |
5,443,035 |
| 4. | The proposal to approve the Amended and Restated Employee Stock Purchase Plan was approved based upon the following votes: |
| Votes for approval |
131,645,368 | |||
| Votes against |
251,607 | |||
| Abstentions |
812,820 | |||
| Broker non-votes |
5,443,035 |
| 5. | Such other matters as may properly come before the Annual General Meeting of Shareholders or any adjournment or postponement thereof: |
None.
| (c) | Not applicable. |
| (d) | Not applicable. |
| Item 8.01. | Other Events. |
On June 10, 2014, the Registrant prepared a slide presentation for its Annual General Meeting of Shareholders, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
This slide presentation includes financial measures that are not in conformity with accounting principles generally accepted in the United States. We refer to these as non-GAAP financial measures. Specifically, the release refers to statements of operations amounts, including adjusted diluted earnings per share, adjusted gross margin, adjusted operating expenses and adjusted effective tax rate.
We define adjusted diluted earnings per share (“EPS”) as diluted earnings per share, adjusted for certain upfront and milestone payments to partners; acquisition-related and integration items, net; cost reduction and integration-related initiatives; asset impairment charges; amortization of intangible assets related to marketed products and customer relationships; inventory step-up recorded as part of our acquisitions; non-cash interest expense; litigation-related and other contingent matters; certain other items that the we believe do not reflect our core operating performance; the cash tax savings resulting from our recent acquisitions; and the tax effect of the pre-tax adjustments above at applicable tax rates.
We define adjusted gross margin as total revenues, less cost of revenues, adjusted for amortization of intangible assets related to marketed products; certain upfront and milestone payments to partners; cost reduction and integration-related initiatives; inventory step-up recorded as part of our acquisitions; and certain other items that we believe do not reflect our core operating performance.
We define adjusted operating expense as operating expenses, adjusted for amortization of intangible assets related to marketed products and customer relationships; certain upfront and milestone payments to partners; acquisition-related and integration items, net; cost reduction and integration-related initiatives; asset impairment charges; inventory step-up recorded as part of our acquisitions; litigation-related and other contingent matters; and certain other items that we believe do not reflect our core operating performance.
We define adjusted effective tax rate as the effective tax rate, adjusted for certain upfront and milestone payments to partners; acquisition-related and integration items, net; cost reduction and integration-related initiatives; asset impairment charges; amortization of intangible assets related to marketed products and customer relationships; inventory step-up recorded as part of our acquisitions; non-cash interest expense; litigation-related and other contingent matters; certain other items that the we believe do not reflect our core operating performance; the cash tax savings resulting from our recent acquisitions; and the tax effect of the pre-tax adjustments above at applicable tax rates.
Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in the slide presentation to their most directly comparable GAAP financial measures as provided within this slide presentation.
However, with the exception of projected adjusted diluted earnings per share, we have not provided a quantitative reconciliation of projected non-GAAP measures including adjusted gross margin, adjusted operating expenses and adjusted effective tax rate. Not all of the information necessary for quantitative reconciliation is available to us at this time without unreasonable efforts. This is due primarily to variability and difficulty in making accurate detailed forecasts and projections. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.
| Item 9.01. | Financial Statements and Exhibits. |
| (a) | Financial Statements of Business Acquired. |
Not applicable.
| (b) | Pro Forma Financial Information. |
Not applicable.
| (c) | Shell Company Transactions. |
Not applicable.
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Slide Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ENDO INTERNATIONAL PLC | ||
| (Registrant) | ||
| By: | /s/ CAROLINE B. MANOGUE | |
| Name: | Caroline B. Manogue | |
| Title: | Executive Vice President, Chief Legal Officer & Company Secretary | |
Dated: June 10, 2014
INDEX TO EXHIBITS
| Exhibit |
Description | |
| 99.1 | Slide Presentation | |
| Exhibit 99.1
|
Exhibit 99.1
Endo International plc
Annual General Meeting of Shareholders
June 10, 2014
©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Forward Looking Statements; Non GAAP Financial Measures
This presentation 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 our 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 and EHSI’s Form 10 K, Form 10 Q and Form 8 K filings, as applicable, 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 EHSI’s Annual Report on Form 10 K. The forward looking statements in this presentation are qualified by these risk factors. These are factors that, individually or in the aggregate,
could cause our 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.
This presentation may refer to non GAAP financial measures, including adjusted diluted EPS, that are not prepared in accordance with accounting principles generally
accepted in the United States and that may be different from non GAAP financial measures used by other companies. Investors are encouraged to review Endo’s current report on Form 8 K filed with the SEC for Endo’s reasons for including those non GAAP financial measures in this presentation. Reconciliation of non GAAP financial measures to the nearest comparable GAAP amounts have been provided within the appendix at the end of this
presentation.
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Today’s Agenda
Company Strategy
First Year Progress
Near Term Objectives and Progress 2014 Financial Guidance Summary and Q&A
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Endo’s strategic direction
Build a leading global specialty healthcare company
Focus on maximizing the value of each of our core businesses
Participate in specialty areas offering above average growth and favorable margins
Transform operating model to maximize growth potential and cash flow generation
Continue our commitment to serving our patients and customers
Maximize shareholder value by adapting to market realities and customer changes
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@2014 Endo Pharmaceuticals Inc. All rights reserved.
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Endo Operating Model
Lean, efficient operating model
Performance metrics aligned with shareholder interests
M&A an important component of building & growing the business long term Agnostic on therapeutic areas, but with focus in specialty areas Focused, de risked R&D
Streamlined and diversified organization with quick decision making
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Delivering Our Strategy – A Year in Review
Strengthened talent and organization
Implemented a Lean Operating Model to achieve $325 million in savings Completed/initiated multiple accretive, value creating transactions
Closed Boca Pharmacal, Paladin Labs and Sumavel® DosePro® deals Announced acquisition of Somar
Increased strategic focus
Completed the divestiture of HealthTronics
Agreements in principle to settle substantial majority of mesh liability Sharpened R&D focus on near term priorities
Enhanced capital structure flexibility Delivering on our financial targets
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Near Term Priorities
Meet Financial Targets
Drive Organic Growth Through Our Core Business Establish New Corporate Structure Implement Lean Operating Model
Complete 2 3 Near term Accretive, Value creating Transactions Increase Value of Pipeline and Launch Products Maximize Balance Sheet Flexibility Develop Organization and Culture Aligned with New Strategy Enhance Continued Focus on Quality, Compliance and Risk
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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2014 Financial Guidance
Measure 2014 Guidance
Revenues $2.55B $2.64B
Adjusted Gross Margin 63% to 65%
Adjusted Operating Expenses Year over year low double digit percentage decrease Adjusted Interest Expenses ~$205M
Reported (GAAP) Earnings (Loss) per share ($1.35) to ($1.10) Adjusted Diluted EPS $3.60 to $3.85 Adjusted Effective Tax Rate 23% to 25% Weighted Average Diluted Shares Outstanding Approximately 158M
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Summary Wrap up
Executing strategy announced in June 2013 Reducing impact of historical challenges
Convertible Notes Mesh liability
LIDODERM® loss of exclusivity
Deploying capital to accretive, value creating opportunities
Sale of HealthTronics
Boca Pharmacal, Paladin Labs and Sumavel® DosePro® (completed) Grupo Farmaceutico Somar (announced)
Enhancing operational focus on organic growth drivers Sharpening R&D focus on near term opportunities Meeting our Financial Targets
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Appendix
©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Reconciliation of Non GAAP Measures
For an explanation of Endo’s reasons for using non GAAP measures, see Endo’s Current Report on Form 8 K filed today with the Securities and Exchange Commission
Reconciliation of Projected GAAP Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share Guidance for the Year
Ending December 31, 2014
Lower End of Range Upper End of Range
Projected GAAP diluted income per common share ($1.35) ($1.10)
Upfront and milestone related payments to partners $0.14 $0.14 Amortization of commercial intangible assets and inventory step up $1.51 $1.51 Acquisition Related, Integration and Restructuring Charges $0.76 $0.76 Basic to Diluted weighted average share count effect $0.08 $0.08 Charges for Litigation and other legal matters $4.35 $4.35 Interest expense adjustment for ASC 470 20 and other treasury items $0.12 $0.12 Tax effect of pre tax adjustments at the applicable tax rates and certain other ($2.01) ($2.01) expected cash tax savings as a result of recent acquisitions
$3.60 $3.85 Diluted adjusted income per common share guidance
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 May 1, 2014
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©2014 Endo Pharmaceuticals Inc. All rights reserved.
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Endo International plc
Annual General Meeting of Shareholders
June 10, 2014
©2014 Endo Pharmaceuticals Inc. All rights reserved.