Endo Reports Second-Quarter 2021 Financial Results And Updates 2021 Financial Guidance
"Our second-quarter 2021 results reflect strong sequential growth in our
SECOND-QUARTER FINANCIAL PERFORMANCE
(in thousands, except per share amounts)
Three Months Ended |
Six Months Ended |
||||||||||||||||||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||||||||||||
Total Revenues, Net |
$ |
713,830 |
$ |
687,588 |
4 |
% |
$ |
1,431,749 |
$ |
1,507,993 |
(5) |
% |
|||||||||
Reported (Loss) Income from Continuing Operations |
$ |
(10,184) |
$ |
17,610 |
NM |
$ |
36,875 |
$ |
175,191 |
(79) |
% |
||||||||||
Reported Diluted Weighted Average Shares |
233,331 |
233,681 |
— |
% |
237,043 |
233,348 |
2 |
% |
|||||||||||||
Reported Diluted Net (Loss) Income per Share from Continuing Operations |
$ |
(0.04) |
$ |
0.08 |
NM |
$ |
0.16 |
$ |
0.75 |
(79) |
% |
||||||||||
Reported Net (Loss) Income |
$ |
(15,500) |
$ |
10,558 |
NM |
$ |
26,024 |
$ |
140,488 |
(81) |
% |
||||||||||
Adjusted Income from Continuing Operations (2) |
$ |
152,121 |
$ |
151,700 |
— |
% |
$ |
327,038 |
$ |
372,100 |
(12) |
% |
|||||||||
Adjusted Diluted Weighted Average Shares (1)(2) |
235,416 |
233,681 |
1 |
% |
237,043 |
233,348 |
2 |
% |
|||||||||||||
Adjusted Diluted Net Income per Share from Continuing Operations (2) |
$ |
0.65 |
$ |
0.65 |
— |
% |
$ |
1.38 |
$ |
1.59 |
(13) |
% |
|||||||||
Adjusted EBITDA (2) |
$ |
342,700 |
$ |
336,481 |
2 |
% |
$ |
707,415 |
$ |
757,607 |
(7) |
% |
__________ |
|
(1) |
Reported Diluted Net (Loss) Income 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. |
CONSOLIDATED RESULTS
Total revenues were
Reported loss from continuing operations in second-quarter 2021 was
Adjusted income from continuing operations in second-quarter 2021 was
BRANDED PHARMACEUTICALS SEGMENT
Second-quarter 2021
Specialty Products revenues increased to
STERILE INJECTABLES SEGMENT
Second-quarter 2021 Sterile Injectables segment revenues were
GENERIC PHARMACEUTICALS SEGMENT
Second-quarter 2021
INTERNATIONAL PHARMACEUTICALS SEGMENT
Second-quarter 2021
2021 FINANCIAL GUIDANCE
Endo is updating its financial guidance for the full-year ending
Full-Year 2021 |
|||
Prior |
Current |
||
Total Revenues, Net |
|
|
|
Adjusted EBITDA |
|
|
|
Adjusted Diluted Net Income per Share from Continuing Operations |
|
|
|
Assumptions: |
|||
Adjusted Gross Margin |
~70.0% - 71.0% |
~70.0% - 71.0% |
|
Adjusted Operating Expenses as a Percentage of Total Revenues, Net |
~28.5% - 29.0% |
~28.5% |
|
Adjusted Interest Expense |
|
|
|
Adjusted Effective Tax Rate |
~11.0% - 12.0% |
~11.0% - 12.0% |
|
Adjusted Diluted Weighted Average Shares |
~239M |
~239M |
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES
As of
Second-quarter 2021 net cash provided by operating activities was
Additionally, the Company recently entered into definitive agreements to sell the Company's manufacturing site in
CONFERENCE CALL INFORMATION
Endo will conduct a conference call with financial analysts to discuss this press release tomorrow,
A replay of the call will be available from
A simultaneous webcast of the call can be accessed by visiting http://investor.endo.com/events-and-presentations. In addition, a replay of the webcast will be available on the Company website for one year following the event.
FINANCIAL SCHEDULES
The following table presents Endo's unaudited Total revenues, net for the three and six months ended
Three Months Ended |
Percent |
Six Months Ended |
Percent |
||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||||||||
|
|||||||||||||||||||||
Specialty Products: |
|||||||||||||||||||||
XIAFLEX® |
$ |
111,487 |
$ |
33,783 |
NM |
$ |
206,757 |
$ |
122,855 |
68 |
% |
||||||||||
SUPPRELIN® LA |
27,568 |
15,395 |
79 |
% |
55,596 |
35,115 |
58 |
% |
|||||||||||||
Other Specialty (1) |
28,036 |
19,566 |
43 |
% |
48,068 |
45,071 |
7 |
% |
|||||||||||||
Total Specialty Products |
$ |
167,091 |
$ |
68,744 |
NM |
$ |
310,421 |
$ |
203,041 |
53 |
% |
||||||||||
Established Products: |
|||||||||||||||||||||
PERCOCET® |
$ |
26,156 |
$ |
27,578 |
(5) |
% |
$ |
51,781 |
$ |
55,281 |
(6) |
% |
|||||||||
TESTOPEL® |
9,439 |
617 |
NM |
20,628 |
8,809 |
NM |
|||||||||||||||
Other Established (2) |
25,354 |
32,582 |
(22) |
% |
51,845 |
66,463 |
(22) |
% |
|||||||||||||
Total Established Products |
$ |
60,949 |
$ |
60,777 |
— |
% |
$ |
124,254 |
$ |
130,553 |
(5) |
% |
|||||||||
|
$ |
228,040 |
$ |
129,521 |
76 |
% |
$ |
434,675 |
$ |
333,594 |
30 |
% |
|||||||||
Sterile Injectables: |
|||||||||||||||||||||
VASOSTRICT® |
$ |
197,121 |
$ |
214,214 |
(8) |
% |
$ |
421,067 |
$ |
417,118 |
1 |
% |
|||||||||
ADRENALIN® |
29,977 |
33,161 |
(10) |
% |
59,414 |
89,673 |
(34) |
% |
|||||||||||||
Other Sterile Injectables (4) |
67,502 |
71,839 |
(6) |
% |
122,864 |
148,813 |
(17) |
% |
|||||||||||||
Total Sterile Injectables (3) |
$ |
294,600 |
$ |
319,214 |
(8) |
% |
$ |
603,345 |
$ |
655,604 |
(8) |
% |
|||||||||
|
$ |
167,272 |
$ |
215,879 |
(23) |
% |
$ |
348,145 |
$ |
467,162 |
(25) |
% |
|||||||||
|
$ |
23,918 |
$ |
22,974 |
4 |
% |
$ |
45,584 |
$ |
51,633 |
(12) |
% |
|||||||||
Total revenues, net |
$ |
713,830 |
$ |
687,588 |
4 |
% |
$ |
1,431,749 |
$ |
1,507,993 |
(5) |
% |
__________ |
|
(1) |
Products included within Other Specialty include NASCOBAL® Nasal Spray, AVEED® and QWO®. |
(2) |
Products included within Other Established include, but are not limited to, EDEX® and LIDODERM®. |
(3) |
Individual products presented above represent the top two performing products in each product category for either the three or six months ended |
(4) |
Products included within Other Sterile Injectables include ertapenem for injection, APLISOL® and others. |
The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and six months ended
Three Months Ended |
Six Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
TOTAL REVENUES, NET |
$ |
713,830 |
$ |
687,588 |
$ |
1,431,749 |
$ |
1,507,993 |
|||||||
COSTS AND EXPENSES: |
|||||||||||||||
Cost of revenues |
318,480 |
336,096 |
623,773 |
724,895 |
|||||||||||
Selling, general and administrative |
177,619 |
173,258 |
364,793 |
340,026 |
|||||||||||
Research and development |
34,669 |
30,495 |
64,408 |
62,110 |
|||||||||||
Litigation-related and other contingencies, net |
35,195 |
(8,572) |
35,832 |
(25,748) |
|||||||||||
Asset impairment charges |
4,929 |
— |
8,238 |
97,785 |
|||||||||||
Acquisition-related and integration items, net |
97 |
6,045 |
(4,925) |
18,507 |
|||||||||||
Interest expense, net |
141,553 |
129,164 |
275,894 |
262,041 |
|||||||||||
Loss on extinguishment of debt |
— |
— |
13,753 |
— |
|||||||||||
Other expense (income), net |
372 |
(4,150) |
1,284 |
(18,124) |
|||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX |
$ |
916 |
$ |
25,252 |
$ |
48,699 |
$ |
46,501 |
|||||||
INCOME TAX EXPENSE (BENEFIT) |
11,100 |
7,642 |
11,824 |
(128,690) |
|||||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS |
$ |
(10,184) |
$ |
17,610 |
$ |
36,875 |
$ |
175,191 |
|||||||
DISCONTINUED OPERATIONS, NET OF TAX |
(5,316) |
(7,052) |
(10,851) |
(34,703) |
|||||||||||
NET (LOSS) INCOME |
$ |
(15,500) |
$ |
10,558 |
$ |
26,024 |
$ |
140,488 |
|||||||
NET (LOSS) INCOME PER SHARE—BASIC: |
|||||||||||||||
Continuing operations |
$ |
(0.04) |
$ |
0.08 |
$ |
0.16 |
$ |
0.77 |
|||||||
Discontinued operations |
(0.03) |
(0.03) |
(0.05) |
(0.16) |
|||||||||||
Basic |
$ |
(0.07) |
$ |
0.05 |
$ |
0.11 |
$ |
0.61 |
|||||||
NET (LOSS) INCOME PER SHARE—DILUTED: |
|||||||||||||||
Continuing operations |
$ |
(0.04) |
$ |
0.08 |
$ |
0.16 |
$ |
0.75 |
|||||||
Discontinued operations |
(0.03) |
(0.03) |
(0.05) |
(0.15) |
|||||||||||
Diluted |
$ |
(0.07) |
$ |
0.05 |
$ |
0.11 |
$ |
0.60 |
|||||||
WEIGHTED AVERAGE SHARES: |
|||||||||||||||
Basic |
233,331 |
229,716 |
231,941 |
228,457 |
|||||||||||
Diluted |
233,331 |
233,681 |
237,043 |
233,348 |
The following table presents unaudited Condensed Consolidated Balance Sheet data at
|
|
||||||
ASSETS |
|||||||
CURRENT ASSETS: |
|||||||
Cash and cash equivalents |
$ |
1,545,172 |
$ |
1,213,437 |
|||
Restricted cash and cash equivalents |
128,558 |
171,563 |
|||||
Accounts receivable |
458,138 |
511,262 |
|||||
Inventories, net |
338,456 |
352,260 |
|||||
Other current assets |
99,005 |
164,736 |
|||||
Total current assets |
$ |
2,569,329 |
$ |
2,413,258 |
|||
TOTAL NON-CURRENT ASSETS |
6,636,928 |
6,851,379 |
|||||
TOTAL ASSETS |
$ |
9,206,257 |
$ |
9,264,637 |
|||
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
CURRENT LIABILITIES: |
|||||||
Accounts payable and accrued expenses, including legal settlement accruals |
$ |
1,174,178 |
$ |
1,208,061 |
|||
Other current liabilities |
235,034 |
45,763 |
|||||
Total current liabilities |
$ |
1,409,212 |
$ |
1,253,824 |
|||
LONG-TERM DEBT, LESS CURRENT PORTION, NET |
8,052,815 |
8,280,578 |
|||||
OTHER LIABILITIES |
361,272 |
378,174 |
|||||
SHAREHOLDERS' DEFICIT |
(617,042) |
(647,939) |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
$ |
9,206,257 |
$ |
9,264,637 |
The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the six months ended
Six Months Ended |
|||||||
2021 |
2020 |
||||||
OPERATING ACTIVITIES: |
|||||||
Net income |
$ |
26,024 |
$ |
140,488 |
|||
Adjustments to reconcile Net income to Net cash provided by operating activities: |
|||||||
Depreciation and amortization |
237,703 |
264,198 |
|||||
Asset impairment charges |
8,238 |
97,785 |
|||||
Other, including cash payments to claimants from Qualified Settlement Funds |
126,851 |
(135,583) |
|||||
Net cash provided by operating activities |
$ |
398,816 |
$ |
366,888 |
|||
INVESTING ACTIVITIES: |
|||||||
Capital expenditures, excluding capitalized interest |
$ |
(41,345) |
$ |
(36,305) |
|||
Proceeds from sale of business and other assets, net |
1,343 |
6,017 |
|||||
Other |
(5,048) |
(1,125) |
|||||
Net cash used in investing activities |
$ |
(45,050) |
$ |
(31,413) |
|||
FINANCING ACTIVITIES: |
|||||||
Payments on borrowings, net |
$ |
(43,166) |
$ |
(66,685) |
|||
Other |
(22,581) |
(9,046) |
|||||
Net cash used in financing activities |
$ |
(65,747) |
$ |
(75,731) |
|||
Effect of foreign exchange rate |
711 |
(915) |
|||||
NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS |
$ |
288,730 |
$ |
258,829 |
|||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD |
1,385,000 |
1,720,388 |
|||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD |
$ |
1,673,730 |
$ |
1,979,217 |
SUPPLEMENTAL FINANCIAL INFORMATION
To supplement the financial measures prepared in accordance with
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 (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) for the three and six months ended
Three Months Ended |
Six Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net (loss) income (GAAP) |
$ |
(15,500) |
$ |
10,558 |
$ |
26,024 |
$ |
140,488 |
|||||||
Income tax expense (benefit) |
11,100 |
7,642 |
11,824 |
(128,690) |
|||||||||||
Interest expense, net |
141,553 |
129,164 |
275,894 |
262,041 |
|||||||||||
Depreciation and amortization (14) |
110,145 |
120,855 |
221,724 |
255,813 |
|||||||||||
EBITDA (non-GAAP) |
$ |
247,298 |
$ |
268,219 |
$ |
535,466 |
$ |
529,652 |
|||||||
Upfront and milestone-related payments (2) |
5,125 |
444 |
5,681 |
2,194 |
|||||||||||
Continuity and separation benefits and other cost reductions (3) |
15,083 |
9,444 |
38,803 |
32,664 |
|||||||||||
Certain litigation-related and other contingencies, net (4) |
35,195 |
(8,572) |
35,832 |
(25,748) |
|||||||||||
Certain legal costs (5) |
24,843 |
18,005 |
44,119 |
33,541 |
|||||||||||
Asset impairment charges (6) |
4,929 |
— |
8,238 |
97,785 |
|||||||||||
Acquisition-related and integration costs (7) |
(20) |
— |
411 |
— |
|||||||||||
Fair value of contingent consideration (8) |
117 |
6,045 |
(5,336) |
18,507 |
|||||||||||
Loss on extinguishment of debt (9) |
— |
— |
13,753 |
— |
|||||||||||
Share-based compensation (14) |
4,444 |
9,222 |
14,437 |
21,677 |
|||||||||||
Other expense (income), net (15) |
372 |
(4,150) |
1,284 |
(18,124) |
|||||||||||
Other (10) |
(2) |
30,772 |
3,876 |
30,756 |
|||||||||||
Discontinued operations, net of tax (12) |
5,316 |
7,052 |
10,851 |
34,703 |
|||||||||||
Adjusted EBITDA (non-GAAP) |
$ |
342,700 |
$ |
336,481 |
$ |
707,415 |
$ |
757,607 |
Reconciliation of Adjusted Income from Continuing Operations (non-GAAP)
The following table provides a reconciliation of the Company's (Loss) income from continuing operations (GAAP) to Adjusted income from continuing operations (non-GAAP) for the three and six months ended
Three Months Ended |
Six Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
(Loss) income from continuing operations (GAAP) |
$ |
(10,184) |
$ |
17,610 |
$ |
36,875 |
$ |
175,191 |
|||||||
Non-GAAP adjustments: |
|||||||||||||||
Amortization of intangible assets (1) |
94,070 |
104,498 |
189,200 |
221,735 |
|||||||||||
Upfront and milestone-related payments (2) |
5,125 |
444 |
5,681 |
2,194 |
|||||||||||
Continuity and separation benefits and other cost reductions (3) |
15,083 |
9,444 |
38,803 |
32,664 |
|||||||||||
Certain litigation-related and other contingencies, net (4) |
35,195 |
(8,572) |
35,832 |
(25,748) |
|||||||||||
Certain legal costs (5) |
24,843 |
18,005 |
44,119 |
33,541 |
|||||||||||
Asset impairment charges (6) |
4,929 |
— |
8,238 |
97,785 |
|||||||||||
Acquisition-related and integration costs (7) |
(20) |
— |
411 |
— |
|||||||||||
Fair value of contingent consideration (8) |
117 |
6,045 |
(5,336) |
18,507 |
|||||||||||
Loss on extinguishment of debt (9) |
— |
— |
13,753 |
— |
|||||||||||
Other (10) |
1,355 |
29,755 |
6,381 |
15,335 |
|||||||||||
Tax adjustments (11) |
(18,392) |
(25,529) |
(46,919) |
(199,104) |
|||||||||||
Adjusted income from continuing operations (non-GAAP) |
$ |
152,121 |
$ |
151,700 |
$ |
327,038 |
$ |
372,100 |
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
Three Months Ended |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other non- |
Income from |
Income |
Effective |
(Loss) |
Discontinued |
Net (loss) |
Diluted net |
||||||||||||||||
Reported (GAAP) |
$ 713,830 |
$ 318,480 |
$ 395,350 |
55.4 % |
$ 252,509 |
35.4 % |
$ 142,841 |
20.0 % |
|
$ 916 |
$ 11,100 |
1,211.8 % |
$ (10,184) |
$ (5,316) |
$ (15,500) |
$ (0.04) |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(94,070) |
94,070 |
- |
94,070 |
- |
94,070 |
- |
94,070 |
- |
94,070 |
||||||||||||||||||||
Upfront and milestone-related payments (2) |
- |
(125) |
125 |
(5,000) |
5,125 |
- |
5,125 |
- |
5,125 |
- |
5,125 |
||||||||||||||||||||
Continuity and separation benefits and other cost reductions (3) |
- |
(4,970) |
4,970 |
(10,113) |
15,083 |
- |
15,083 |
- |
15,083 |
- |
15,083 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (4) |
- |
- |
- |
(35,195) |
35,195 |
- |
35,195 |
- |
35,195 |
- |
35,195 |
||||||||||||||||||||
Certain legal costs (5) |
- |
- |
- |
(24,843) |
24,843 |
- |
24,843 |
- |
24,843 |
- |
24,843 |
||||||||||||||||||||
Asset impairment charges (6) |
- |
- |
- |
(4,929) |
4,929 |
- |
4,929 |
- |
4,929 |
- |
4,929 |
||||||||||||||||||||
Acquisition-related and integration costs (7) |
- |
- |
- |
20 |
(20) |
- |
(20) |
- |
(20) |
- |
(20) |
||||||||||||||||||||
Fair value of contingent consideration (8) |
- |
- |
- |
(117) |
117 |
- |
117 |
- |
117 |
- |
117 |
||||||||||||||||||||
Other (10) |
- |
- |
- |
- |
- |
(1,355) |
1,355 |
- |
1,355 |
- |
1,355 |
||||||||||||||||||||
Tax adjustments (11) |
- |
- |
- |
- |
- |
- |
- |
18,392 |
(18,392) |
- |
(18,392) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (12) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5,316 |
5,316 |
||||||||||||||||||||
After considering items (non-GAAP) |
$ 713,830 |
$ 219,315 |
$ 494,515 |
69.3 % |
$ 172,332 |
24.1 % |
$ 322,183 |
45.1 % |
|
$ 181,613 |
$ 29,492 |
16.2 % |
$ 152,121 |
$ - |
$ 152,121 |
$ 0.65 |
Three Months Ended |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other non- |
Income from |
Income |
Effective |
Income |
Discontinued |
Net |
Diluted net |
||||||||||||||||
Reported (GAAP) |
$ 687,588 |
$ 336,096 |
$ 351,492 |
51.1 % |
$ 201,226 |
29.3 % |
$ 150,266 |
21.9 % |
|
$ 25,252 |
$ 7,642 |
30.3 % |
$ 17,610 |
$ (7,052) |
$ 10,558 |
$ 0.08 |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(104,498) |
104,498 |
- |
104,498 |
- |
104,498 |
- |
104,498 |
- |
104,498 |
||||||||||||||||||||
Upfront and milestone-related payments (2) |
- |
(125) |
125 |
(319) |
444 |
- |
444 |
- |
444 |
- |
444 |
||||||||||||||||||||
Continuity and separation benefits and other cost reductions (3) |
- |
(904) |
904 |
(8,540) |
9,444 |
- |
9,444 |
- |
9,444 |
- |
9,444 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (4) |
- |
- |
- |
8,572 |
(8,572) |
- |
(8,572) |
- |
(8,572) |
- |
(8,572) |
||||||||||||||||||||
Certain legal costs (5) |
- |
- |
- |
(18,005) |
18,005 |
- |
18,005 |
- |
18,005 |
- |
18,005 |
||||||||||||||||||||
Fair value of contingent consideration (8) |
- |
- |
- |
(6,045) |
6,045 |
- |
6,045 |
- |
6,045 |
- |
6,045 |
||||||||||||||||||||
Other (10) |
- |
- |
- |
(30,749) |
30,749 |
994 |
29,755 |
- |
29,755 |
- |
29,755 |
||||||||||||||||||||
Tax adjustments (11) |
- |
- |
- |
- |
- |
- |
- |
25,529 |
(25,529) |
- |
(25,529) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (12) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7,052 |
7,052 |
||||||||||||||||||||
After considering items (non-GAAP) |
$ 687,588 |
$ 230,569 |
$ 457,019 |
66.5 % |
$ 146,140 |
21.3 % |
$ 310,879 |
45.2 % |
|
$ 184,871 |
$ 33,171 |
17.9 % |
$ 151,700 |
$ - |
$ 151,700 |
$ 0.65 |
Six Months Ended |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other non- |
Income from |
Income |
Effective |
Income |
Discontinued |
Net |
Diluted net |
||||||||||||||||
Reported (GAAP) |
|
$ 623,773 |
$ 807,976 |
56.4 % |
$ 468,346 |
32.7 % |
$ 339,630 |
23.7 % |
|
$ 48,699 |
$ 11,824 |
24.3 % |
$ 36,875 |
$ (10,851) |
$ 26,024 |
$ 0.16 |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(189,200) |
189,200 |
- |
189,200 |
- |
189,200 |
- |
189,200 |
- |
189,200 |
||||||||||||||||||||
Upfront and milestone-related payments (2) |
- |
(651) |
651 |
(5,030) |
5,681 |
- |
5,681 |
- |
5,681 |
- |
5,681 |
||||||||||||||||||||
Continuity and separation benefits and other cost reductions (3) |
- |
(20,266) |
20,266 |
(18,537) |
38,803 |
- |
38,803 |
- |
38,803 |
- |
38,803 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (4) |
- |
- |
- |
(35,832) |
35,832 |
- |
35,832 |
- |
35,832 |
- |
35,832 |
||||||||||||||||||||
Certain legal costs (5) |
- |
- |
- |
(44,119) |
44,119 |
- |
44,119 |
- |
44,119 |
- |
44,119 |
||||||||||||||||||||
Asset impairment charges (6) |
- |
- |
- |
(8,238) |
8,238 |
- |
8,238 |
- |
8,238 |
- |
8,238 |
||||||||||||||||||||
Acquisition-related and integration costs (7) |
- |
- |
- |
(411) |
411 |
- |
411 |
- |
411 |
- |
411 |
||||||||||||||||||||
Fair value of contingent consideration (8) |
- |
- |
- |
5,336 |
(5,336) |
- |
(5,336) |
- |
(5,336) |
- |
(5,336) |
||||||||||||||||||||
Loss on extinguishment of debt (9) |
- |
- |
- |
- |
- |
(13,753) |
13,753 |
- |
13,753 |
- |
13,753 |
||||||||||||||||||||
Other (10) |
- |
- |
- |
(3,879) |
3,879 |
(2,502) |
6,381 |
- |
6,381 |
- |
6,381 |
||||||||||||||||||||
Tax adjustments (11) |
- |
- |
- |
- |
- |
- |
- |
46,919 |
(46,919) |
- |
(46,919) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (12) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
10,851 |
10,851 |
||||||||||||||||||||
After considering items (non-GAAP) |
|
$ 413,656 |
|
71.1 % |
$ 357,636 |
25.0 % |
$ 660,457 |
46.1 % |
|
$ 385,781 |
$ 58,743 |
15.2 % |
$ 327,038 |
$ - |
$ 327,038 |
$ 1.38 |
Six Months Ended |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other non- |
Income from |
Income |
Effective |
Income |
Discontinued |
Net |
Diluted net |
||||||||||||||||
Reported (GAAP) |
|
$ 724,895 |
$ 783,098 |
51.9 % |
$ 492,680 |
32.7 % |
$ 290,418 |
19.3 % |
|
$ 46,501 |
|
(276.7)% |
$ 175,191 |
$ (34,703) |
$ 140,488 |
$ 0.75 |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(221,735) |
221,735 |
- |
221,735 |
- |
221,735 |
- |
221,735 |
- |
221,735 |
||||||||||||||||||||
Upfront and milestone-related payments (2) |
- |
(667) |
667 |
(1,527) |
2,194 |
- |
2,194 |
- |
2,194 |
- |
2,194 |
||||||||||||||||||||
Continuity and separation benefits and other cost reductions (3) |
- |
(7,142) |
7,142 |
(25,522) |
32,664 |
- |
32,664 |
- |
32,664 |
- |
32,664 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (4) |
- |
- |
- |
25,748 |
(25,748) |
- |
(25,748) |
- |
(25,748) |
- |
(25,748) |
||||||||||||||||||||
Certain legal costs (5) |
- |
- |
- |
(33,541) |
33,541 |
- |
33,541 |
- |
33,541 |
- |
33,541 |
||||||||||||||||||||
Asset impairment charges (6) |
- |
- |
- |
(97,785) |
97,785 |
- |
97,785 |
- |
97,785 |
- |
97,785 |
||||||||||||||||||||
Fair value of contingent consideration (8) |
- |
- |
- |
(18,507) |
18,507 |
- |
18,507 |
- |
18,507 |
- |
18,507 |
||||||||||||||||||||
Other (10) |
- |
- |
- |
(30,749) |
30,749 |
15,414 |
15,335 |
- |
15,335 |
- |
15,335 |
||||||||||||||||||||
Tax adjustments (11) |
- |
- |
- |
- |
- |
- |
- |
199,104 |
(199,104) |
- |
(199,104) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (12) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
34,703 |
34,703 |
||||||||||||||||||||
After considering items (non-GAAP) |
|
$ 495,351 |
|
67.2 % |
$ 310,797 |
20.6 % |
$ 701,845 |
46.5 % |
|
$ 442,514 |
$ 70,414 |
15.9 % |
$ 372,100 |
$ - |
$ 372,100 |
$ 1.59 |
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
(1) |
To exclude amortization expense related to intangible assets. |
(2) |
Adjustments for upfront and milestone-related payments to partners included the following (in thousands): |
Three Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Cost of revenues |
Operating |
Cost of revenues |
Operating |
||||||||||||
Sales-based |
$ |
125 |
$ |
— |
$ |
125 |
$ |
— |
|||||||
Development-based |
— |
5,000 |
— |
319 |
|||||||||||
Total |
$ |
125 |
$ |
5,000 |
$ |
125 |
$ |
319 |
|||||||
Six Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Cost of revenues |
Operating |
Cost of revenues |
Operating |
||||||||||||
Sales-based |
$ |
651 |
$ |
— |
$ |
667 |
$ |
— |
|||||||
Development-based |
— |
5,030 |
— |
1,527 |
|||||||||||
Total |
$ |
651 |
$ |
5,030 |
$ |
667 |
$ |
1,527 |
(3) |
Adjustments for continuity and separation benefits and other cost reductions included the following (in thousands): |
Three Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Cost of revenues |
Operating |
Cost of revenues |
Operating |
||||||||||||
Continuity and separation benefits |
$ |
(2,913) |
$ |
4,485 |
$ |
515 |
$ |
3,606 |
|||||||
Accelerated depreciation charges |
7,140 |
1,932 |
1,347 |
408 |
|||||||||||
Other |
743 |
3,696 |
(958) |
4,526 |
|||||||||||
Total |
$ |
4,970 |
$ |
10,113 |
$ |
904 |
$ |
8,540 |
|||||||
Six Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Cost of revenues |
Operating |
Cost of revenues |
Operating |
||||||||||||
Continuity and separation benefits |
$ |
2,279 |
$ |
7,837 |
$ |
1,142 |
$ |
16,775 |
|||||||
Accelerated depreciation charges |
12,194 |
3,785 |
6,026 |
2,359 |
|||||||||||
Other |
5,793 |
6,915 |
(26) |
6,388 |
|||||||||||
Total |
$ |
20,266 |
$ |
18,537 |
$ |
7,142 |
$ |
25,522 |
Included within the Continuity and separation benefits line are costs associated with certain continuity and transitional compensation arrangements for certain senior management of the Company. Additionally, amounts include adjustments related to previously announced restructurings and other strategic initiatives to further optimize Endo's operations. |
(4) |
To exclude adjustments to accruals for litigation-related settlement charges and certain settlement proceeds related to suits filed by subsidiaries. |
(5) |
To exclude opioid-related legal expenses. |
(6) |
Adjustments for asset impairment charges included the following (in thousands): |
Three Months Ended |
Six Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
|
$ |
— |
$ |
— |
$ |
— |
$ |
32,786 |
|||||||
Other intangible asset impairment charges |
4,929 |
— |
7,811 |
63,751 |
|||||||||||
Property, plant and equipment impairment charges |
— |
— |
427 |
1,248 |
|||||||||||
Total |
$ |
4,929 |
$ |
— |
$ |
8,238 |
$ |
97,785 |
(7) |
To exclude integration costs. |
(8) |
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. |
(9) |
To exclude the loss on the extinguishment of debt associated with the Company's |
(10) |
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 (loss) income (GAAP) to Adjusted EBITDA (non-GAAP)) include the following (in thousands): |
Three Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Operating |
Other non- |
Operating |
Other non- |
||||||||||||
Foreign currency impact related to the re-measurement of intercompany debt instruments |
$ |
— |
$ |
1,355 |
$ |
— |
$ |
3,005 |
|||||||
(Gain) loss on sale of business and other assets |
— |
— |
— |
(3,999) |
|||||||||||
Debt modification costs |
— |
— |
30,749 |
— |
|||||||||||
Total |
$ |
— |
$ |
1,355 |
$ |
30,749 |
$ |
(994) |
|||||||
Six Months Ended |
|||||||||||||||
2021 |
2020 |
||||||||||||||
Operating |
Other non- |
Operating |
Other non- |
||||||||||||
Foreign currency impact related to the re-measurement of intercompany debt instruments |
$ |
— |
$ |
2,502 |
$ |
— |
$ |
(4,089) |
|||||||
Gain on sale of business and other assets |
— |
— |
— |
(11,325) |
|||||||||||
Debt modification costs |
3,879 |
— |
30,749 |
— |
|||||||||||
Total |
$ |
3,879 |
$ |
2,502 |
$ |
30,749 |
$ |
(15,414) |
The Other row included in the reconciliations of Net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) primarily relates to the items enumerated in the foregoing "Operating expenses" columns. |
(11) |
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. |
(12) |
To exclude the results of the businesses reported as discontinued operations, net of tax. |
(13) |
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 |
Six Months Ended |
||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||
GAAP |
233,331 |
233,681 |
237,043 |
233,348 |
|||||||
Non-GAAP Adjusted |
235,416 |
233,681 |
237,043 |
233,348 |
(14) |
Depreciation and amortization and Share-based compensation per the Adjusted EBITDA reconciliations do not include amounts reflected in other lines of the reconciliations, including Continuity and separation benefits and other cost reductions. |
(15) |
To exclude Other expense (income), net per the Condensed Consolidated Statements of Operations. |
Reconciliation of Net Debt Leverage Ratio (non-GAAP)
The following table provides a reconciliation of the Company's Net income (GAAP) to Adjusted EBITDA (non-GAAP) for the twelve months ended
Twelve Months Ended 2021 |
|||
Net income (GAAP) |
$ |
69,480 |
|
Income tax benefit |
(133,468) |
||
Interest expense, net |
546,792 |
||
Depreciation and amortization (14) |
462,260 |
||
EBITDA (non-GAAP) |
$ |
945,064 |
|
Upfront and milestone-related payments |
$ |
38,562 |
|
Continuity and separation benefits and other cost reductions |
132,421 |
||
Certain litigation-related and other contingencies, net |
42,531 |
||
Certain legal costs |
78,397 |
||
Asset impairment charges |
30,797 |
||
Acquisition-related and integration costs |
607 |
||
Fair value of contingent consideration |
(7,490) |
||
Loss on extinguishment of debt |
13,753 |
||
Share-based compensation (14) |
28,927 |
||
Other income, net |
(1,702) |
||
Other |
4,215 |
||
Discontinued operations, net of tax |
39,668 |
||
Adjusted EBITDA (non-GAAP) |
$ |
1,345,750 |
|
Calculation of Net Debt: |
|||
Debt |
$ |
8,275,957 |
|
Cash (excluding Restricted Cash) |
1,545,172 |
||
Net Debt (non-GAAP) |
$ |
6,730,785 |
|
Calculation of Net Debt Leverage: |
|||
Net Debt Leverage Ratio (non-GAAP) |
5.0 |
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
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
About
Endo (NASDAQ: ENDP) 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 a global team of passionate employees collaborating to bring the best 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
This press release contains forward-looking statements, including, but not limited to, the statements by
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 and adversely 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; changes in legislation and regulatory developments; 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, 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; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of any strategic and/or optimization initiatives; the timing or results of any pending or future litigation, investigations or claims or actual or contingent liabilities, settlement discussions, negotiations or other adverse proceedings, including pending and future opioid-related matters, pending tax matters with the
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
View original content:https://www.prnewswire.com/news-releases/endo-reports-second-quarter-2021-financial-results-and-updates-2021-financial-guidance-301349815.html
SOURCE
Media: Heather Zoumas-Lubeski, (484) 216-6829; Investors: Pravesh Khandelwal, (845) 364-4833