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): July 18, 2017
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ENDO INTERNATIONAL PLC
(Exact Name of Registrant as Specified in Its Charter)
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Ireland | 001-36326 | 68-0683755 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.05. Costs Associated with Exit or Disposal Activities.
On July 21, 2017, the Registrant announced that after completing a comprehensive review of its manufacturing network, the Registrant will be ceasing operations and closing its manufacturing and distribution facilities in Huntsville, Alabama (the “2017 U.S. Generic Pharmaceuticals restructuring initiative”). The closure of the facilities is expected to take place over the next 12 to 18 months. The Registrant’s Board of Directors approved the 2017 U.S. Generic Pharmaceuticals restructuring initiative on July 18, 2017. The Huntsville locations have been impacted by declining volumes of commoditized products and these restructuring actions are intended to better match manufacturing capacity to projected future demand.
As a result of the 2017 U.S. Generic Pharmaceuticals restructuring initiative, the Registrant's workforce is expected to be reduced by approximately 875 positions, including approximately 35 open positions, and the Registrant expects to incur total pre-tax restructuring-related expenses of approximately $325 million, including total estimated cash outlays of approximately $60 million, substantially all of which will be paid by the end of 2018. The estimated restructuring charges consist of accelerated depreciation charges of approximately $165 million, asset impairment charges related to identifiable intangible assets and certain property, plant and equipment of approximately $90 million, charges to increase excess inventory reserves of approximately $10 million, employee separation, retention and other benefit-related costs of approximately $40 million and certain other charges of approximately $20 million. The Registrant expects to realize approximately $55 million to $65 million in annual net run rate pre-tax cost savings by the fourth quarter of 2018.
Any charges associated with the 2017 U.S. Generic Pharmaceuticals restructuring initiative will be included in the U.S. Generic Pharmaceuticals segment. Associated impairment charges, charges to increase excess inventory reserves and certain other charges will be recorded during the second quarter of 2017 and reported in the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, expected to be filed no later than August 9, 2017. Employee separation, retention and certain other employee benefit-related costs will be expensed ratably over the requisite service period. Other costs that will be incurred including, but not limited to, contract termination fees and product technology transfer costs, will be expensed as incurred.
The estimated expenses, charges, costs and savings noted above are subject to a number of assumptions. Actual results may differ materially as a result of various important factors, including the risks and uncertainties described under the heading “Cautionary Note Regarding Forward-Looking Statements” in the copy of the press release included as Exhibit 99.1 to this Current Report on Form 8-K, which are incorporated by reference herein.
Item 2.06. Material Impairments.
The information required by this Item 2.06 is included under Item 2.05 of this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
No. | Description | |
99.1 | ||
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 | |
By: | /s/ Matthew J. Maletta |
Name: | Matthew J. Maletta |
Title: | Executive Vice President, Chief Legal Officer |
Dated: July 21, 2017
INDEX TO EXHIBITS
No. | Description | |
99.1 | ||
Exhibit 99.1
Endo to Restructure Manufacturing Network
DUBLIN, July 21, 2017 -- Endo International plc (NASDAQ: ENDP) today announced that after completing a comprehensive review of its manufacturing network, the Company will be ceasing operations and closing its manufacturing and distribution facilities in Huntsville, Alabama. The closure of the facilities is expected to take place over the next 12 to 18 months. The Huntsville location has been impacted by declining volumes of commoditized products and these restructuring actions are intended to better match manufacturing capacity to projected future demand.
“Endo’s key priorities include building our product portfolio and technological capabilities for the future. Today’s announced action enables a redeployment of investment from commoditized products to more differentiated capabilities and products that represent our core areas of future growth,” said Paul Campanelli, President and CEO of Endo.
“I would like to recognize the efforts and hard work of those who have been impacted by this difficult decision and thank them for their valuable contributions to our Company,” Mr. Campanelli added.
These restructuring actions are expected to reduce Endo’s workforce by approximately 875 positions (including approximately 35 open positions) and to result in pre-tax restructuring charges of approximately $325 million, including approximately $60 million of cash charges. The remaining estimated non-cash charges consist primarily of accelerated depreciation of approximately $165 million and intangible asset and property, plant and equipment impairment charges of approximately $90 million. Endo expects to realize approximately $55 million to $65 million in annual net run rate pre-tax cost savings by the fourth quarter of 2018.
About Endo International plc
Endo International plc (NASDAQ: ENDP) is a highly focused generics and specialty branded pharmaceutical company delivering quality medicines to patients in need through excellence in development, manufacturing and commercialization. Endo has global headquarters in Dublin, Ireland, and U.S. headquarters in Malvern, PA. Learn more at www.endo.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements," including, but not limited to, statements by Mr. Campanelli and statements regarding the restructuring, including the expected closing of the Huntsville manufacturing and distribution facilities and the potential impact of the restructuring, expected cost savings and anticipated use of such cost savings on the Company's business and future results. Because forecasts are inherently estimates that cannot be made with precision, the Company’s performance may differ materially from its expectations, estimates and targets, and the Company often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, the Company 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 the Company. All forward-looking statements in this press release reflect the Company’s current analysis of information and represent the Company’s judgment only as of the date of this press release. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations. Risks and uncertainties include, among other things, general industry and market conditions; technological advances and patents attained by competitors; challenges inherent in the research and development and regulatory processes, including regulatory decisions, product recalls, withdrawals and other unusual items; challenges related to product marketing, such as the unpredictability of market acceptance for new products and/or the acceptance of new indications for such products; inconsistency of treatment results among patients; potential difficulties in manufacturing; the outcome of litigation, settlement discussions or other adverse proceedings; general economic conditions; and governmental laws and regulations affecting domestic and foreign operations. The Company expressly disclaims any intent or obligation to update these forward-looking statements except as
This press release contains "forward-looking statements," including, but not limited to, statements by Mr. Campanelli and statements regarding the restructuring, including the expected closing of the Huntsville manufacturing and distribution facilities and the potential impact of the restructuring, expected cost savings and anticipated use of such cost savings on the Company's business and future results. Because forecasts are inherently estimates that cannot be made with precision, the Company’s performance may differ materially from its expectations, estimates and targets, and the Company often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, the Company 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 the Company. All forward-looking statements in this press release reflect the Company’s current analysis of information and represent the Company’s judgment only as of the date of this press release. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations. Risks and uncertainties include, among other things, general industry and market conditions; technological advances and patents attained by competitors; challenges inherent in the research and development and regulatory processes, including regulatory decisions, product recalls, withdrawals and other unusual items; challenges related to product marketing, such as the unpredictability of market acceptance for new products and/or the acceptance of new indications for such products; inconsistency of treatment results among patients; potential difficulties in manufacturing; the outcome of litigation, settlement discussions or other adverse proceedings; general economic conditions; and governmental laws and regulations affecting domestic and foreign operations. The Company expressly disclaims any intent or obligation to update these forward-looking statements except as
required by law. Additional information concerning these and other risk factors can be found in the Company’s periodic reports filed with the U.S. Securities and Exchange Commission and in Canada on the System for Electronic Data Analysis and Retrieval (“SEDAR”), including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K.
Endo International plc:
Investors/Media: | Media: | Investors: |
Stephen Mock | Heather Zoumas-Lubeski | Nina Goworek |
(845) 364-4833 | (484) 216-6829 | (484) 216-6657 |
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