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3.31.2015 Earnings Release 8-K Shell


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): May 11, 2015 (May 11, 2015)

_______________________________
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.)
First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland
Not Applicable
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code 011-353-1-268-2000
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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 




Item 2.02. Results of Operation and Financial Condition.
On May 11, 2015, the Registrant issued an earnings release announcing its financial results for the three months ended March 31, 2015 (the "Earnings Release"). A copy of the Earnings Release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The Earnings Release includes financial measures that are not in conformity with accounting principles generally accepted in the United States. We refer to these measures as non-GAAP financial measures. Specifically, the Earnings Release refers to statements of operations amounts, including adjusted diluted earnings per share amounts, adjusted gross margin, adjusted operating expenses and adjusted effective tax rate. The Earnings Release also refers to Net cash provided by (used in) operating activities, excluding the impact of certain legal settlements.
We define adjusted diluted earnings per share (“EPS”) amounts as diluted EPS amounts, adjusted for certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company's operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; non-cash interest expense; litigation-related and other contingent matters; gains or losses from early termination of debt and hedging activities; foreign currency gains or losses on intercompany financing arrangements; and certain other items that the we believe do not reflect our core operating performance; the cash tax savings from acquired tax attributes; the tax effect of the pre-tax adjustments above at applicable tax rates and certain other tax items.
We define adjusted gross margin as total revenues, less cost of revenues, adjusted for amortization of intangible assets; certain upfront and milestone payments to partners; certain cost reduction and integration-related initiatives; inventory step-up recorded as part of our acquisitions; certain excess costs that will be eliminated pursuant to integration plans and certain other items that we believe do not reflect our core operating performance.
We define adjusted operating expense as operating expenses, adjusted for certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company's operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; 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, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company's operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; non-cash interest expense; litigation-related and other contingent matters; gains or losses from early termination of debt and hedging activities; foreign currency gains or losses on intercompany financing arrangements; and certain other items that the we believe do not reflect our core operating performance; the cash tax savings from acquired tax attributes; the tax effect of the pre-tax adjustments above at applicable tax rates and certain other tax items.
We define Net cash provided by (used in) operating activities, excluding the impact of certain legal settlements as Net cash used in operating activities, as reported, adjusted for certain legal settlements, which primarily relate to mesh and the Department of Justice settlement related to the sale, marketing and promotion of Lidoderm®.
These non-GAAP financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. We refer to these non-GAAP financial measures in making operating decisions because we believe they provide meaningful supplemental information regarding our operational performance. For instance, we believe that these measures facilitate internal comparisons to our historical operating results and comparisons to competitors’ results. We believe these measures are useful to investors in allowing for greater transparency related to supplemental information used in our financial and operational decision-making. In addition, we have historically reported similar financial measures to our investors and believe that the inclusion of comparative numbers provides consistency in our current financial reporting. Further, we believe that these measures may be useful to investors as we are aware that certain of our significant stockholders utilize these measures to evaluate our financial performance. Finally, adjusted diluted EPS is used by the Compensation Committee of our Board of Directors in assessing the performance and compensation of substantially all of our employees, including our executive officers.




Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in the Earnings Release to their most directly comparable GAAP financial measures as provided with the financial statements included in the Earnings Release.
However, with the exception of projected adjusted diluted EPS and Net cash provided by (used in) operating activities, excluding the impact of certain legal settlements, 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.
The information in this Item 2.02 and in Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information contained in this Item 2.02 and in Exhibit 99.1 attached hereto shall not be incorporated into any registration statement or other document filed by the Registrant with the U.S. Securities and Exchange Commission under the Securities Act of 1933, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
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 Number
Description
99.1
Press Release of Endo International plc dated May 11, 2015, reporting the Registrant's financial results for the three months ended March 31, 2015





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/ Matthew J. Maletta
Name:
Matthew J. Maletta
Title:
Executive Vice President, Chief Legal Officer
Dated: May 11, 2015




INDEX TO EXHIBITS
 
Exhibit Number
Description
99.1
Press Release of Endo International plc dated May 11, 2015, reporting the Registrant's financial results for the three months ended March 31, 2015



Ex99.1-3.31.2015-Earnings Release


Exhibit 99.1

ENDO REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS

•
First quarter revenues of $714 million
•
First quarter reported $0.85 diluted (GAAP) EPS from continuing operations and $1.17 adjusted diluted EPS from continuing operations
•
U.S. Branded Pharmaceuticals first quarter revenues increase of 21 percent primarily attributable to the acquisition of Auxilium Pharmaceuticals
•
U.S. Generic Pharmaceuticals continues strong growth in first quarter with 68 percent revenue increase over first quarter 2014
•
International Pharmaceuticals first quarter results on-track and aligned with Company expectations
•
Affirms revenue guidance from continuing operations and raises adjusted diluted EPS from continuing operations guidance for full year 2015
DUBLIN, May 11, 2015-- Endo International plc (NASDAQ: ENDP) (TSX: ENL) today reported first quarter 2015 financial results, including:
•
Revenues of $714 million, a 52 percent increase compared to first quarter 2014 revenues of $471 million, including new product revenue from 2014 and 2015 strategic M&A transactions.
•
Reported income from continuing operations of $150 million compared to a first quarter 2014 reported loss from continuing operations of $47 million.
•
Adjusted income from continuing operations of $207 million, a 91 percent increase compared to first quarter 2014 adjusted income from continuing operations of $108 million.
•
Reported diluted EPS from continuing operations of $0.85 compared to first quarter 2014 reported loss per share from continuing operations of $0.37.
•
Adjusted diluted earnings per share from continuing operations of $1.17 compared to first quarter 2014 adjusted diluted earnings per share from continuing operations of $0.75.
“We continued to make progress during the first quarter towards achieving a number of our strategic priorities for the year,” said Rajiv De Silva, President and CEO of Endo. “Our diversified business helped us deliver strong financial results for the quarter and helps provide the flexibility to re-invest and re-deploy capital to drive growth. We are excited about our new commercial opportunities in U.S. Branded Pharmaceuticals with the recent addition of the Auxilium portfolio and the launch of NatestoTM Testosterone Nasal Gel. We also believe that we have attractive development opportunities to support further organic growth across each of our business units.”

1

FINANCIAL PERFORMANCE
($ in thousands, except per share amounts)
 
1st Quarter
 
 
 
2015
 
2014
 
Change
Total Revenues
$
714,128

 
$
470,842

 
52
%
Reported Income (Loss) from Continuing Operations
$
150,492

 
$
(47,401
)
 
NM

Reported Diluted Income (Loss) per Share from Continuing Operations
$
0.85

 
$
(0.37
)
 
NM

Adjusted Income from Continuing Operations
$
207,360

 
$
108,477

 
91
%
Adjusted Diluted Weighted Average Shares
176,825

 
145,361

 
22
%
Adjusted Diluted EPS from Continuing Operations
$
1.17

 
$
0.75

 
56
%
U.S. BRANDED PHARMACEUTICALS
During first quarter 2015 the U.S. Branded Pharmaceuticals business unit largely completed the integration of Auxilium Pharmaceuticals. The Company believes that the addition of Auxilium's approved products and substantial research and development (R&D) portfolio will support the segment's near-term organic growth objectives.

First quarter 2015 U.S. Branded Pharmaceuticals results include:
•
Revenues of $285 million, a 21 percent increase compared to first quarter 2014, primarily attributable to the strategic addition of Auxilium Pharmaceuticals.
•
Net sales of OPANA® ER decreased less than 1 percent compared to first quarter 2014, attributable to lower brand demand due to generic competition that was largely offset by improved pricing.
•
Net sales of Voltaren® Gel increased 21 percent compared to first quarter 2014, primarily attributable to demand growth.
U.S. GENERIC PHARMACEUTICALS
The U.S. Generic Pharmaceuticals business unit remains focused on manufacturing, quality and R&D to support its organic growth objectives. For full-year 2015 Endo continues to expect strong double-digit revenue growth for this segment compared to 2014 results.

First quarter 2015 U.S. Generic Pharmaceuticals results include:
•
Product net sales of $357 million, a 68 percent increase compared to first quarter 2014, primarily attributable to underlying growth of 39 percent in the existing business. Underlying growth

2

excludes revenues from acquisitions for the first twelve months after closing, as well as sales of the Authorized Generic (AG) version of LIDODERM®. Total growth benefited from the addition of sales from Boca Pharmacal and DAVA Pharmaceuticals following the close of those acquisitions in February 2014 and August 2014, respectively, as well as sales of the AG version of LIDODERM®, which launched in May 2014.
INTERNATIONAL PHARMACEUTICALS
Endo is focused on expanding its International Pharmaceuticals business unit and further diversifying the Company's financial profile.

First quarter 2015 International Pharmaceuticals results include:
•
Sales of $73 million, attributable to Paladin Labs, inclusive of Litha Group, acquired February 2014 and product sales by Grupo Farmaceutico Somar, acquired July 2014.

2015 Financial Guidance
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 earnings per share (EPS) from continuing operations now expected to be between $1.70 and $1.90 compared to $2.73 and $2.93 previously; and
•
Adjusted diluted EPS from continuing operations now expected to be between $4.40 and $4.60 compared to $4.35 and $4.55 previously.
The Company’s 2015 financial guidance is based on the following assumptions:
•
Adjusted gross margin of between 64 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 13 percent and 14 percent; and
•
Adjusted diluted earnings per share from continuing operations assume full year adjusted diluted shares outstanding of approximately 180 million.

3


Conference Call Information
Endo will conduct a conference call with financial analysts to discuss this press release today at 9:00 a.m. ET. The dial-in number to access the call is U.S./Canada (866) 497-0462, International (678) 509-7598, and the conference number is 34236444. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from May 11, 2015 at 12:00 p.m. ET until 11:59 p.m. ET on May 25, 2015 by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International) and entering the conference number is 34236444.

A simultaneous webcast of the call may be accessed by visiting www.endo.com. In addition, a replay of the webcast will be available until 11:59 p.m. ET on May 25, 2015. The replay may be accessed by clicking on “Events” in the Investor Relations section of the website.


4

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 March 31, 2015 and 2014 (in thousands, except per share data):
Three Months Ended March 31, 2015 (unaudited)
 Actual Reported
(GAAP)
 
Adjustments

 
 
Non-GAAP Adjusted
 REVENUES
$
714,128

 
$
—


 
$
714,128

 
 
 
 

 
 
 COSTS AND EXPENSES:
 
 
 

 
 
Cost of revenues
384,266

 
(135,789
)
(1)
 
248,477

Selling, general and administrative
211,578

 
(79,410
)
(2)
 
132,168

Research and development
17,897

 
(2,063
)
(3)
 
15,834

Litigation-related and other contingencies, net
13,000

 
(13,000
)
(4)
 
—

Asset impairment charges
7,000

 
(7,000
)
(5)
 
—

Acquisition-related and integration items
34,640

 
(34,640
)
(6)
 
—

 OPERATING INCOME
$
45,747

 
$
271,902


 
$
317,649

 INTEREST EXPENSE, NET
73,139

 
(1,379
)
(7)
 
71,760

 LOSS ON EXTINGUISHMENT OF DEBT
980

 
(980
)
(8)
 
—

 OTHER INCOME, NET
(11,995
)
 
10,134

(9)
 
(1,861
)
 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX
$
(16,377
)
 
$
264,127


 
$
247,750

 INCOME TAX (BENEFIT) EXPENSE
(166,869
)
 
207,259

(10)
 
40,390

 INCOME FROM CONTINUING OPERATIONS
$
150,492

 
$
56,868


 
$
207,360

 DISCONTINUED OPERATIONS, NET OF TAX
(226,210
)
 
246,865

(11)
 
20,655

 CONSOLIDATED NET (LOSS) INCOME
$
(75,718
)
 
$
303,733


 
$
228,015

 Less: Net income attributable to noncontrolling interests
—

 
—


 
—

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL PLC
$
(75,718
)
 
$
303,733


 
$
228,015

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
 
 
 

 
 
 Continuing operations
$
0.85

 
 

 
$
1.17

 Discontinued operations
(1.28
)
 
 

 
0.12

 DILUTED (LOSS) EARNINGS PER SHARE
$
(0.43
)
 
 

 
$
1.29

 DILUTED WEIGHTED AVERAGE SHARES
176,825

 
 

 
176,825

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 $95,269, a fair value step-up in inventory of $37,554, certain excess costs that will be eliminated pursuant to integration plans of $2,362 and accruals for milestone payments to partners of $604.
(2)
To exclude certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $41,807 and a charge of $37,603 related to the acceleration of Auxilium employee equity awards at closing.
(3)
To exclude milestone payments to partners of $2,063.
(4)
To exclude the impact of certain net litigation charges.
(5)
To exclude asset impairment charges.
(6)
To exclude acquisition and integration costs, primarily associated with the Auxilium acquisition.
(7)
To exclude additional non-cash interest expense related to our 1.75% Convertible Senior Subordinated Notes.
(8)
To exclude a net loss on extinguishment of debt in connection with note repurchase activity.
(9)
To exclude the foreign currency impact related to the re-measurement of intercompany debt instruments of $(21,090), costs associated with unused financing commitments of $11,810 and other miscellaneous income of $(854).
(10)
Primarily to reflect the tax savings from acquired tax attributes and the effect of the pre-tax adjustments above at applicable rates. Additionally, included within this amount is an adjustment to exclude approximately $159,700 of tax benefit resulting from the expected realization of deferred tax assets in the foreseeable future related to certain components of our AMS business, which was listed as held for sale during the first quarter of 2015.
(11)
Primarily to exclude certain items related to the AMS businesses, reported as Discontinued operations, net of tax, including an impairment charge of $222,753 based on the estimated fair values of the underlying businesses being sold, less the costs to sell.

5

Three Months Ended March 31, 2014 (unaudited)
 Actual Reported
(GAAP)
 
Adjustments

 
 
Non-GAAP Adjusted
 REVENUES
$
470,842

 
$
—


 
$
470,842

 
 
 
 

 
 
 COSTS AND EXPENSES:
 
 
 

 
 
Cost of revenues
212,679

 
(43,406
)
(1)
 
169,273

Selling, general and administrative
160,066

 
(58,994
)
(2)
 
101,072

Research and development
30,946

 
(10,076
)
(3)
 
20,870

Acquisition-related and integration items
45,269

 
(45,269
)
(4)
 
—

 OPERATING INCOME
$
21,882

 
$
157,745


 
$
179,627

 INTEREST EXPENSE, NET
53,392

 
(5,969
)
(5)
 
47,423

 LOSS ON EXTINGUISHMENT OF DEBT
9,596

 
(9,596
)
(6)
 
—

 OTHER INCOME, NET
(6,408
)
 
—


 
(6,408
)
 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX
$
(34,698
)
 
$
173,310


 
$
138,612

 INCOME TAX EXPENSE
12,703

 
17,432

(7)
 
30,135

 (LOSS) INCOME FROM CONTINUING OPERATIONS
$
(47,401
)
 
$
155,878


 
$
108,477

 DISCONTINUED OPERATIONS, NET OF TAX
(385,877
)
 
415,099

(8)
 
29,222

 CONSOLIDATED NET (LOSS) INCOME
$
(433,278
)
 
$
570,977


 
$
137,699

 Less: Net income attributable to noncontrolling interests
3,634

 
—


 
3,634

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL PLC
$
(436,912
)
 
$
570,977


 
$
134,065

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO INTERNATIONAL PLC ORDINARY SHAREHOLDERS:
 
 
 

 
 
 Continuing operations
$
(0.37
)
 
 

 
$
0.75

 Discontinued operations
(3.04
)
 
 

 
0.17

 DILUTED (LOSS) EARNINGS PER SHARE
$
(3.41
)
 
 

 
$
0.92

 DILUTED WEIGHTED AVERAGE SHARES
128,135

 
 

 
145,361

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 $39,670, a step-up in inventory of $3,581 and accruals for milestone payments to partners of $155.
(2)
To exclude adjustments to accruals for certain separation benefits and other costs incurred in connection with continued efforts to enhance the company’s operations of $(1,006) and accruals for excise tax payments of $60,000.
(3)
To exclude milestone payments to partners of $11,000 and adjustments to accruals for certain separation benefits and other costs incurred in connection with continued efforts to enhance the company’s operations of $(924).
(4)
To exclude acquisition and integration costs, primarily associated with the Paladin and Boca acquisitions.
(5)
To exclude additional non-cash interest expense related to our 1.75% Convertible Senior Subordinated Notes.
(6)
To exclude the unamortized debt issuance costs written off and recorded as a net loss on extinguishment of debt upon our refinancing of our term loan indebtedness.
(7)
Primarily to reflect the cash tax savings from our acquisitions and dispositions and the tax effect of the pre-tax adjustments above at applicable tax rates.
(8)
To exclude certain items related to the AMS and HealthTronics businesses, reported as Discontinued operations, net of tax.

6


Non-GAAP adjusted net income and its components and Non-GAAP adjusted diluted earnings per share amounts are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted earnings per share amounts. 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 furnished today to 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 ordinary share
$
1.70

To
$
1.90

Upfront and milestone-related payments to partners
0.34

 
0.34

Amortization of commercial intangible assets, fair value inventory step-up and certain excess costs that will be eliminated pursuant to integration plans
3.37

 
3.37

Acquisition related, integration and restructuring charges and certain excess costs that will be eliminated pursuant to integration plans
0.83

 
0.83

Charges for litigation and other legal matters
0.07

 
0.07

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
(1.92
)
 
(1.92
)
Diluted adjusted income per ordinary share guidance
$
4.40

To
$
4.60

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 11, 2015.

About Endo International plc
Endo International plc is a global specialty pharmaceutical company focused on improving patients' lives while creating shareholder value. Endo develops, manufactures, markets and distributes quality branded pharmaceutical and generic pharmaceutical products as well as over-the-counter medications though its operating companies. Endo has global headquarters in Dublin, Ireland, and U.S. headquarters in Malvern, PA. Learn more at www.endo.com.




7

(Tables Attached)
The following tables present Endo's unaudited Net Revenues for the three months ended March 31, 2015 and 2014:
Endo International plc
Net Revenues (unaudited)
(in thousands)
 
Three Months Ended March 31,
 
Percent Growth
 
2015
 
2014
 
U.S. Branded Pharmaceuticals:
 
 
 
 
 
Pain:
 
 
 
 
 
LIDODERM®
$
25,160

 
$
33,080

 
(24
)%
OPANA® ER
46,859

 
46,953

 
—
 %
PERCOCET®
36,299

 
28,980

 
25
 %
Voltaren® Gel
45,471

 
37,559

 
21
 %
 
$
153,789

 
$
146,572

 
5
 %
Urology Retail:
 
 
 
 
 
FORTESTA® GEL, including Authorized Generic
$
14,490

 
$
11,143

 
30
 %
TESTIM®, including Authorized Generic
9,429

 
—

 
NM

 
$
23,919

 
$
11,143

 
115
 %
Specialty:
 
 
 
 
 
SUPPRELIN® LA
$
16,282

 
$
13,757

 
18
 %
XIAFLEX®
27,966

 
—

 
NM

 
$
44,248

 
$
13,757

 
222
 %
Branded Other Revenues
62,026

 
22,933

 
170
 %
Royalty and Other Revenues
525

 
39,760

 
(99
)%
Total U.S. Branded Pharmaceuticals
$
284,507

 
$
234,165

 
21
 %
Total U.S. Generic Pharmaceuticals
356,962

 
211,855

 
68
 %
Total International Pharmaceuticals
72,659

 
24,822

 
193
 %
Total Revenue
$
714,128

 
$
470,842

 
52
 %

8

The following table presents unaudited condensed consolidated Balance Sheet data at March 31, 2015 and December 31, 2014:
 
March 31,
2015
 
December 31,
2014
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
377,461

 
$
408,753

Restricted cash and cash equivalents
534,162

 
530,930

Accounts receivable
1,235,383

 
1,126,078

Inventories, net
611,401

 
423,321

Assets held for sale
1,693,594

 
1,937,864

Other assets
875,868

 
653,315

Total current assets
$
5,327,869

 
$
5,080,261

TOTAL NON-CURRENT ASSETS
8,817,808

 
5,829,355

TOTAL ASSETS
$
14,145,677

 
$
10,909,616

LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

CURRENT LIABILITIES:
 

 
 

Accounts payable and accrued expenses
$
3,139,392

 
$
2,890,143

Liabilities held for sale
99,112

 
103,024

Other current liabilities
203,516

 
155,959

Total current liabilities
$
3,442,020

 
$
3,149,126

LONG-TERM DEBT, LESS CURRENT PORTION, NET
5,386,547

 
4,202,356

OTHER LIABILITIES
1,177,394

 
1,149,921

STOCKHOLDERS' EQUITY:
 
 
 
Total Endo International plc shareholders’ equity
$
4,139,598

 
$
2,374,757

Noncontrolling interests
118

 
33,456

Total shareholders’ equity
$
4,139,716

 
$
2,408,213

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
14,145,677

 
$
10,909,616


9

The following table presents unaudited condensed consolidated Statement of Cash Flow data for the three months ended March 31, 2015 and 2014:
 
Three Months Ended March 31,
 
2015
 
2014
OPERATING ACTIVITIES:
 
 
 
Consolidated net loss
$
(75,718
)
 
$
(433,278
)
Adjustments to reconcile consolidated Net loss to Net cash used in operating activities
 
 
 
Depreciation and amortization
119,590

 
74,588

Other
123,820

 
(155,393
)
Changes in assets and liabilities which (used) provided cash
(257,500
)
 
267,140

Net cash used in operating activities
(89,808
)
 
(246,943
)
INVESTING ACTIVITIES:
 
 
 
Purchases of property, plant and equipment, net
(17,189
)
 
(20,818
)
Acquisitions, net of cash acquired
(911,892
)
 
(113,464
)
Proceeds from sale of business, net
4,712

 
55,271

Proceeds from settlement escrow
—

 
3,148

Increase in restricted cash and cash equivalents
(172,900
)
 
—

Decrease in restricted cash and cash equivalents
166,768

 
702,495

Other
17

 
15,167

Net cash (used in) provided by investing activities
(930,484
)
 
641,799

FINANCING ACTIVITIES:
 
 
 
Borrowings (payments) on indebtedness, net
1,039,287

 
125,847

Other
(42,426
)
 
(23,445
)
Net cash provided by financing activities
996,861

 
102,402

Effect of foreign exchange rate
(7,861
)
 
12

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(31,292
)
 
497,270

LESS: NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS
—

 
(17,413
)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS
(31,292
)
 
514,683

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
408,753

 
526,597

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
377,461

 
$
1,041,280

Our Net cash used in 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 used in operating activities for the three months ended March 31, 2015 and 2014:
 
Three Months Ended March 31,
 
2015
 
2014
Net cash used in operating activities, as reported
$
(89,808
)
 
$
(246,943
)
Payments for certain legal settlements
130,975

 
198,748

Net cash provided by (used in) operating activities, excluding the impact of certain legal settlements
41,167

 
(48,195
)

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Safe Harbor Statement
This press release contains forward-looking statements, including but not limited to the statements by Mr. De Silva and other statements regarding product development, market potential, expected growth and regulatory approvals, as well as Endo’s earnings per share amounts, product net sales, revenue forecasts and any other statements that refer to Endo’s expected, estimated or anticipated future results. Because forecasts are inherently estimates that cannot be made with precision, Endo’s performance at times differs materially from its estimates and targets, and Endo often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, Endo will not report or comment on its progress during a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Endo.
All forward-looking statements in this press release reflect Endo’s current analysis of existing trends and information and represent Endo’s judgment only as of the date of this press release. Actual results may differ materially from current expectations based on a number of factors affecting Endo’s businesses, including, among other things, the following: changing competitive, market and regulatory conditions; Endo’s ability to obtain and maintain adequate protection for its intellectual property rights; the timing and uncertainty of the results of both the research and development and regulatory processes; 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; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; the results of any pending or future litigation, investigations or claims; the uncertainty associated with the identification of and successful consummation and execution of external corporate development initiatives and strategic partnering transactions; and Endo’s ability to obtain and successfully maintain a sufficient supply of products to meet market demand in a timely manner. In addition, U.S. and international economic conditions, including higher unemployment, political instability, financial hardship, consumer confidence and debt levels, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions, fluctuations or devaluations in the value of sovereign government debt, as well as the general 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.

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Additional information concerning the above-referenced risk factors and other risk factors 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 2014 Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. 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 by calling 484-216-0000.

SOURCE Endo International plc

Investors/Media: Keri P. Mattox, (484) 216-7912; Investors: Jonathan Neely, (484) 216-6645; Media: Heather Zoumas-Lubeski, (484) 216-6829
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