— Strong Operational Performance Led by
Year-over-Year Double-Digit-Percentage Revenue Growth in Sterile
Injectables Segment and in Specialty Products Portfolio of Branded
Pharmaceuticals Segment —
— Full-Year 2020 Financial Guidance Provided for
Revenue, Adjusted Diluted Net Income per Share from Continuing
Operations and Adjusted EBITDA —
DUBLIN, Feb. 26, 2020
/CNW/ -- Endo International plc (NASDAQ: ENDP) today reported
financial results for the fourth quarter and full year ended
December 31, 2019.
- Total revenues during the fourth quarter of 2019 were
$765 million, a decrease of 3%
compared to fourth-quarter 2018 revenues of $786 million.
- Revenues of the Specialty Products portfolio of Branded
Pharmaceuticals segment increased 15% in the fourth quarter of 2019
to $149 million compared to
fourth-quarter 2018 revenues of $130
million.
- Revenues of the Sterile Injectables segment increased 10% in
the fourth quarter of 2019 to $285
million compared to fourth-quarter 2018 revenues of
$259 million.
FINANCIAL PERFORMANCE
(in thousands, except per
share amounts)
|
Three months ended
December 31,
|
|
|
|
Year ended
December 31,
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
Total Revenues,
Net
|
$
|
764,800
|
|
|
$
|
786,389
|
|
|
(3)
|
%
|
|
$
|
2,914,364
|
|
|
$
|
2,947,078
|
|
|
(1)
|
%
|
Reported Loss from
Continuing Operations
|
$
|
(208,489)
|
|
|
$
|
(265,479)
|
|
|
(21)
|
%
|
|
$
|
(360,584)
|
|
|
$
|
(961,767)
|
|
|
(63)
|
%
|
Reported Diluted
Weighted Average Shares
|
226,787
|
|
|
224,353
|
|
|
1
|
%
|
|
226,050
|
|
|
223,960
|
|
|
1
|
%
|
Reported Diluted
Net Loss per Share from Continuing Operations
|
$
|
(0.92)
|
|
|
$
|
(1.18)
|
|
|
(22)
|
%
|
|
$
|
(1.60)
|
|
|
$
|
(4.29)
|
|
|
(63)
|
%
|
Reported Net
Loss
|
$
|
(218,643)
|
|
|
$
|
(291,908)
|
|
|
(25)
|
%
|
|
$
|
(422,636)
|
|
|
$
|
(1,031,469)
|
|
|
(59)
|
%
|
Adjusted Income
from Continuing Operations
|
$
|
170,907
|
|
|
$
|
175,383
|
|
|
(3)
|
%
|
|
$
|
551,524
|
|
|
$
|
663,206
|
|
|
(17)
|
%
|
Adjusted Diluted
Weighted Average Shares (1)
|
231,571
|
|
|
232,958
|
|
|
(1)
|
%
|
|
231,706
|
|
|
229,386
|
|
|
1
|
%
|
Adjusted Diluted
Net Income per Share from Continuing Operations
|
$
|
0.74
|
|
|
$
|
0.75
|
|
|
(1)
|
%
|
|
$
|
2.38
|
|
|
$
|
2.89
|
|
|
(18)
|
%
|
Adjusted
EBITDA
|
$
|
346,283
|
|
|
$
|
344,185
|
|
|
1
|
%
|
|
$
|
1,308,890
|
|
|
$
|
1,357,061
|
|
|
(4)
|
%
|
__________
|
(1)
|
Reported Diluted Net
Loss per Share from continuing operations is computed based on
weighted average shares outstanding and, if there is income from
continuing operations during the period, the dilutive impact of
ordinary share equivalents outstanding during the period. In the
case of Adjusted Diluted Weighted Average Shares, Adjusted Income
from Continuing Operations is used in determining whether to
include such dilutive impact.
|
"In 2019, Endo delivered stronger than expected performance
during the fourth quarter and for the full year, driven by
continued double-digit percentage revenue growth in our Sterile
Injectables segment and in the Specialty Products Portfolio of our
Branded Pharmaceuticals segment, and as a result of our dedication
to operational execution," said Paul
Campanelli, Chairman, President and Chief Executive Officer
at Endo. "For the full year, our Sterile Injectables segment
exceeded $1 billion in revenue and
our Specialty Products Portfolio exceeded $500 million in revenue, demonstrating progress
on our strategic priority of expanding and investing in these
businesses. Additionally, during the fourth quarter, the U.S. FDA
accepted our original Biologics License Application for our CCH for
Cellulite product and we launched five products."
"Looking ahead to 2020, Endo intends to build upon the success
of the past year. We are focused on continuing to invest in our
core areas of growth as part of our multi-year strategic plan,
while being responsive to the current external environment under
the leadership of Blaise Coleman,
Endo's new President and Chief Executive Officer."
CONSOLIDATED RESULTS
Total revenues were $765 million
in fourth-quarter 2019 compared to $786
million during the same period in 2018. This decrease was
primarily attributable to competitive pressures in the Generic
Pharmaceuticals segment and the Established Products portfolio of
the Branded Pharmaceuticals segment, partially offset by continued
strong growth in the Sterile Injectables segment and the Specialty
Products portfolio of the Branded Pharmaceuticals segment.
Reported loss from continuing operations in fourth-quarter 2019
was $208 million compared to reported
loss from continuing operations of $265
million during the same period in 2018. This result was
primarily attributable to a decrease in asset impairment charges.
Reported diluted net loss per share from continuing operations in
fourth-quarter 2019 was $0.92
compared to reported diluted net loss per share from continuing
operations of $1.18 in fourth-quarter
2018.
Adjusted income from continuing operations in fourth-quarter
2019 was $171 million compared to
$175 million in fourth-quarter 2018.
This decrease was primarily attributable to lower adjusted gross
margin due to lower sales. Adjusted diluted net income per share
from continuing operations in fourth-quarter 2019 was $0.74 compared to $0.75 in fourth-quarter 2018.
BRANDED PHARMACEUTICALS
Fourth-quarter 2019 Branded Pharmaceuticals revenues were
$226 million compared to $230 million in fourth-quarter 2018. This
decrease was primarily attributable to ongoing generic competition
in the Established Products portfolio, offset by continued strong
growth in the Specialty Products portfolio.
Specialty Products revenues increased 15% to $149 million in fourth-quarter 2019 compared to
$130 million in fourth-quarter 2018,
primarily driven by the continued strong performance of
XIAFLEX®. Sales of XIAFLEX® increased 27% to
$102 million compared to $80 million in fourth-quarter 2018, primarily
attributable to demand growth in both the Peyronie's Disease and
Dupuytren's Contracture indications driven by continued commercial
execution and investment in promotional activities.
In November 2019, the U.S. Food
and Drug Administration accepted the Company's original Biologics
License Application (BLA) for its Collagenase Clostridium
Histolyticum (CCH) product for the treatment of cellulite in the
buttocks. The Prescription Drug User Fee Act (PDUFA), or target
action date for the BLA, has been set for July 6, 2020.
STERILE INJECTABLES
Fourth-quarter 2019 Sterile Injectables revenues were
$285 million, an increase of 10%
compared to $259 million in
fourth-quarter 2018. This increase reflects the continued strong
growth of VASOSTRICT® and ADRENALIN®.
GENERIC PHARMACEUTICALS
Fourth-quarter 2019 Generic Pharmaceuticals revenues were
$226 million, a decrease of 14%
compared to $264 million in
fourth-quarter 2018. This performance was primarily attributable to
continued competitive pressure on commoditized generic products.
Partially offsetting the decrease were the impacts of certain
recent product launches. During fourth-quarter 2019, the Generic
Pharmaceuticals segment launched five products.
INTERNATIONAL PHARMACEUTICALS
Fourth-quarter 2019 International Pharmaceuticals revenues were
$29 million, a decrease of 16%
compared to fourth-quarter 2018. This decrease was primarily due to
ongoing generic competition.
2020 FINANCIAL GUIDANCE
Endo is providing guidance for the 12 months ending
December 31, 2020, at current exchange rates, for revenue,
adjusted diluted net income per share from continuing operations
and adjusted EBITDA. The Company estimates:
- Total revenues to be between $2.72
billion and $2.92
billion;
- Adjusted diluted net income per share from continuing
operations to be between $2.15 and
$2.40; and
- Adjusted EBITDA to be between $1.22
billion and $1.32
billion.
The Company's 2020 non-GAAP financial guidance is based on the
following assumptions:
- Adjusted gross margin of approximately 66.0% to 67.0%;
- Adjusted operating expenses as a percentage of revenue to be
approximately 25.0% to 25.5%;
- Adjusted interest expense of approximately $535 to $545
million;
- Adjusted effective tax rate of approximately 13.5% to 14.5%;
and
- Adjusted diluted weighted average shares outstanding of
approximately 236 million.
Guidance for Adjusted diluted net income per share from
continuing operations, Adjusted EBITDA and Adjusted operating
expenses exclude opioid-related legal expenses.
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES
As of December 31, 2019, the Company had approximately
$1.5 billion in unrestricted cash;
debt of $8.4 billion; net debt of
approximately $6.9 billion and a net
debt to adjusted EBITDA ratio of 5.3.
Fourth-quarter 2019 cash used in operating activities was
$21 million, compared to $70 million of net cash provided by operating
activities during fourth-quarter 2018.
CONFERENCE CALL INFORMATION
Endo will conduct a conference call with financial analysts to
discuss this press release today at 8:00
a.m. ET. The dial-in number to access the call is
U.S./Canada (866) 497-0462,
International (678) 509-7598, and the passcode is 4777677. Please
dial in 10 minutes prior to the scheduled start time.
A replay of the call will be available from February 26,
2020 at 11:00 a.m. ET until 11:00 a.m.
ET on March 4, 2020 by dialing U.S./Canada (800) 585-8367, International (404)
537-3406, and entering the passcode 4777677.
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 twelve months ended December 31, 2019 and 2018 (dollars in
thousands):
|
Three months ended
December 31,
|
|
Percent
Growth
|
|
Year ended
December 31,
|
|
Percent
Growth
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
Branded
Pharmaceuticals:
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Products:
|
|
|
|
|
|
|
|
|
|
|
|
XIAFLEX®
|
$
|
101,520
|
|
|
$
|
79,783
|
|
|
27
|
%
|
|
$
|
327,638
|
|
|
$
|
264,638
|
|
|
24
|
%
|
SUPPRELIN®
LA
|
20,255
|
|
|
20,759
|
|
|
(2)
|
%
|
|
86,797
|
|
|
81,707
|
|
|
6
|
%
|
Other Specialty
(1)
|
26,844
|
|
|
29,004
|
|
|
(7)
|
%
|
|
105,241
|
|
|
98,230
|
|
|
7
|
%
|
Total Specialty
Products
|
$
|
148,619
|
|
|
$
|
129,546
|
|
|
15
|
%
|
|
$
|
519,676
|
|
|
$
|
444,575
|
|
|
17
|
%
|
Established
Products:
|
|
|
|
|
|
|
|
|
|
|
|
PERCOCET®
|
$
|
27,813
|
|
|
$
|
29,362
|
|
|
(5)
|
%
|
|
$
|
116,012
|
|
|
$
|
122,901
|
|
|
(6)
|
%
|
TESTOPEL®
|
14,414
|
|
|
13,401
|
|
|
8
|
%
|
|
55,244
|
|
|
58,377
|
|
|
(5)
|
%
|
Other Established
(2)
|
34,705
|
|
|
57,551
|
|
|
(40)
|
%
|
|
164,470
|
|
|
236,979
|
|
|
(31)
|
%
|
Total Established
Products
|
$
|
76,932
|
|
|
$
|
100,314
|
|
|
(23)
|
%
|
|
$
|
335,726
|
|
|
$
|
418,257
|
|
|
(20)
|
%
|
Total Branded
Pharmaceuticals (3)
|
$
|
225,551
|
|
|
$
|
229,860
|
|
|
(2)
|
%
|
|
$
|
855,402
|
|
|
$
|
862,832
|
|
|
(1)
|
%
|
Sterile
Injectables:
|
|
|
|
|
|
|
|
|
|
|
|
VASOSTRICT®
|
$
|
146,883
|
|
|
$
|
121,380
|
|
|
21
|
%
|
|
$
|
531,737
|
|
|
$
|
453,767
|
|
|
17
|
%
|
ADRENALIN®
|
45,827
|
|
|
41,631
|
|
|
10
|
%
|
|
179,295
|
|
|
143,489
|
|
|
25
|
%
|
Ertapenem for
injection
|
25,060
|
|
|
31,870
|
|
|
(21)
|
%
|
|
104,679
|
|
|
57,668
|
|
|
82
|
%
|
APLISOL®
|
5,830
|
|
|
15,849
|
|
|
(63)
|
%
|
|
61,826
|
|
|
64,913
|
|
|
(5)
|
%
|
Other Sterile
Injectables (4)
|
61,568
|
|
|
47,989
|
|
|
28
|
%
|
|
185,594
|
|
|
209,729
|
|
|
(12)
|
%
|
Total Sterile
Injectables (3)
|
$
|
285,168
|
|
|
$
|
258,719
|
|
|
10
|
%
|
|
$
|
1,063,131
|
|
|
$
|
929,566
|
|
|
14
|
%
|
Total Generic
Pharmaceuticals
|
$
|
225,560
|
|
|
$
|
263,770
|
|
|
(14)
|
%
|
|
$
|
879,882
|
|
|
$
|
1,012,215
|
|
|
(13)
|
%
|
Total International
Pharmaceuticals
|
$
|
28,521
|
|
|
$
|
34,040
|
|
|
(16)
|
%
|
|
$
|
115,949
|
|
|
$
|
142,465
|
|
|
(19)
|
%
|
Total revenues,
net
|
$
|
764,800
|
|
|
$
|
786,389
|
|
|
(3)
|
%
|
|
$
|
2,914,364
|
|
|
$
|
2,947,078
|
|
|
(1)
|
%
|
__________
|
(1)
|
Products included
within Other Specialty are NASCOBAL® Nasal Spray and
AVEED®. Beginning with our first-quarter 2019 reporting,
TESTOPEL®, which was previously included in Other
Specialty, has been reclassified and is now included in the
Established Products portfolio for all periods
presented.
|
(2)
|
Products included
within Other Established include, but are not limited to,
LIDODERM®, EDEX® and VOLTAREN®
Gel.
|
(3)
|
Individual products
presented above represent the top two performing products in each
product category for the year ended December 31, 2019 and/or any
product having revenues in excess of $100 million during any of the
years ended December 31, 2019, 2018 or 2017 or $25 million during
any quarterly period in 2019 or 2018.
|
(4)
|
Products included
within Other Sterile Injectables include ephedrine sulfate
injection, treprostinil for injection and others.
|
The following table presents unaudited Condensed Consolidated
Statement of Operations data for the three and twelve months ended
December 31, 2019 and 2018 (in
thousands, except per share data):
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
TOTAL REVENUES,
NET
|
$
|
764,800
|
|
|
$
|
786,389
|
|
|
$
|
2,914,364
|
|
|
$
|
2,947,078
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
Cost of
revenues
|
400,056
|
|
|
433,214
|
|
|
1,569,338
|
|
|
1,631,682
|
|
Selling, general and
administrative
|
160,671
|
|
|
167,422
|
|
|
632,420
|
|
|
646,037
|
|
Research and
development
|
34,379
|
|
|
25,395
|
|
|
130,732
|
|
|
185,826
|
|
Litigation-related
and other contingencies, net
|
15,304
|
|
|
(1,561)
|
|
|
11,211
|
|
|
13,809
|
|
Asset impairment
charges
|
267,430
|
|
|
303,539
|
|
|
526,082
|
|
|
916,939
|
|
Acquisition-related
and integration items, net
|
(19,115)
|
|
|
8,630
|
|
|
(46,098)
|
|
|
21,914
|
|
Interest expense,
net
|
134,347
|
|
|
135,760
|
|
|
538,734
|
|
|
521,656
|
|
Gain on
extinguishment of debt
|
—
|
|
|
—
|
|
|
(119,828)
|
|
|
—
|
|
Other (income)
expense, net
|
(3,731)
|
|
|
(18,737)
|
|
|
16,677
|
|
|
(51,953)
|
|
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
|
$
|
(224,541)
|
|
|
$
|
(267,273)
|
|
|
$
|
(344,904)
|
|
|
$
|
(938,832)
|
|
INCOME TAX (BENEFIT)
EXPENSE
|
(16,052)
|
|
|
(1,794)
|
|
|
15,680
|
|
|
22,935
|
|
LOSS FROM CONTINUING
OPERATIONS
|
$
|
(208,489)
|
|
|
$
|
(265,479)
|
|
|
$
|
(360,584)
|
|
|
$
|
(961,767)
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(10,154)
|
|
|
(26,429)
|
|
|
(62,052)
|
|
|
(69,702)
|
|
NET LOSS
|
$
|
(218,643)
|
|
|
$
|
(291,908)
|
|
|
$
|
(422,636)
|
|
|
$
|
(1,031,469)
|
|
NET LOSS PER
SHARE—BASIC:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.92)
|
|
|
$
|
(1.18)
|
|
|
$
|
(1.60)
|
|
|
$
|
(4.29)
|
|
Discontinued
operations
|
(0.04)
|
|
|
(0.12)
|
|
|
(0.27)
|
|
|
(0.32)
|
|
Basic
|
$
|
(0.96)
|
|
|
$
|
(1.30)
|
|
|
$
|
(1.87)
|
|
|
$
|
(4.61)
|
|
NET LOSS PER
SHARE—DILUTED:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.92)
|
|
|
$
|
(1.18)
|
|
|
$
|
(1.60)
|
|
|
$
|
(4.29)
|
|
Discontinued
operations
|
(0.04)
|
|
|
(0.12)
|
|
|
(0.27)
|
|
|
(0.32)
|
|
Diluted
|
$
|
(0.96)
|
|
|
$
|
(1.30)
|
|
|
$
|
(1.87)
|
|
|
$
|
(4.61)
|
|
WEIGHTED AVERAGE
SHARES:
|
|
|
|
|
|
|
|
Basic
|
226,787
|
|
|
224,353
|
|
|
226,050
|
|
|
223,960
|
|
Diluted
|
226,787
|
|
|
224,353
|
|
|
226,050
|
|
|
223,960
|
|
The following table presents unaudited Condensed Consolidated
Balance Sheet data at December 31, 2019 and December 31,
2018 (in thousands):
|
December 31,
2019
|
|
December 31,
2018
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,454,531
|
|
|
$
|
1,149,113
|
|
Restricted cash and
cash equivalents
|
247,457
|
|
|
305,368
|
|
Accounts
receivable
|
467,953
|
|
|
470,570
|
|
Inventories,
net
|
327,865
|
|
|
322,179
|
|
Other current
assets
|
88,412
|
|
|
95,920
|
|
Total current
assets
|
$
|
2,586,218
|
|
|
$
|
2,343,150
|
|
TOTAL NON-CURRENT
ASSETS
|
6,803,309
|
|
|
7,789,243
|
|
TOTAL
ASSETS
|
$
|
9,389,527
|
|
|
$
|
10,132,393
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued expenses, including legal settlement accruals
|
$
|
1,412,954
|
|
|
$
|
1,914,285
|
|
Other current
liabilities
|
47,335
|
|
|
35,811
|
|
Total current
liabilities
|
$
|
1,460,289
|
|
|
$
|
1,950,096
|
|
LONG-TERM DEBT, LESS
CURRENT PORTION, NET
|
8,359,899
|
|
|
8,224,269
|
|
OTHER
LIABILITIES
|
435,883
|
|
|
456,311
|
|
SHAREHOLDERS'
DEFICIT
|
(866,544)
|
|
|
(498,283)
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
$
|
9,389,527
|
|
|
$
|
10,132,393
|
|
The following table presents unaudited Condensed Consolidated
Statement of Cash Flow data for the years ended December 31, 2019 and 2018 (in thousands):
|
Year ended
December 31,
|
|
2019
|
|
2018
|
OPERATING
ACTIVITIES:
|
|
|
|
Net loss
|
$
|
(422,636)
|
|
|
$
|
(1,031,469)
|
|
Adjustments to
reconcile Net loss to Net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
612,862
|
|
|
723,707
|
|
Asset impairment
charges
|
526,082
|
|
|
916,939
|
|
Other, including cash
payments to claimants from Qualified Settlement Funds
|
(618,256)
|
|
|
(341,907)
|
|
Net cash provided by
operating activities
|
$
|
98,052
|
|
|
$
|
267,270
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Purchases of
property, plant and equipment, excluding capitalized
interest
|
$
|
(63,854)
|
|
|
$
|
(83,398)
|
|
Proceeds from sale of
business and other assets, net
|
6,577
|
|
|
70,369
|
|
Other
|
(2,921)
|
|
|
(4,871)
|
|
Net cash used in
investing activities
|
$
|
(60,198)
|
|
|
$
|
(17,900)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Proceeds from
(payments on) borrowings, net
|
$
|
237,989
|
|
|
$
|
(39,372)
|
|
Other
|
(33,388)
|
|
|
(42,200)
|
|
Net cash provided by
(used in) financing activities
|
$
|
204,601
|
|
|
$
|
(81,572)
|
|
Effect of foreign
exchange rate
|
1,096
|
|
|
(1,975)
|
|
NET INCREASE IN CASH,
CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS
|
$
|
243,551
|
|
|
$
|
165,823
|
|
CASH, CASH
EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
1,476,837
|
|
|
1,311,014
|
|
CASH, CASH
EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END
OF PERIOD
|
$
|
1,720,388
|
|
|
$
|
1,476,837
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses certain non-GAAP financial measures. For additional
information on the Company's use of such non-GAAP financial
measures, refer to Endo's Current Report on Form 8-K furnished
today to the U.S. Securities and Exchange Commission, which
includes an explanation of the Company's reasons for using non-GAAP
measures.
The tables below provide reconciliations of certain of our
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 (GAAP)
to Adjusted EBITDA (non-GAAP) for the three and twelve months ended
December 31, 2019 and 2018 (in
thousands):
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net loss
(GAAP)
|
$
|
(218,643)
|
|
|
$
|
(291,908)
|
|
|
$
|
(422,636)
|
|
|
$
|
(1,031,469)
|
|
Income tax (benefit)
expense
|
(16,052)
|
|
|
(1,794)
|
|
|
15,680
|
|
|
22,935
|
|
Interest expense,
net
|
134,347
|
|
|
135,760
|
|
|
538,734
|
|
|
521,656
|
|
Depreciation and
amortization (15)
|
144,453
|
|
|
167,205
|
|
|
612,862
|
|
|
688,530
|
|
EBITDA
(non-GAAP)
|
$
|
44,105
|
|
|
$
|
9,263
|
|
|
$
|
744,640
|
|
|
$
|
201,652
|
|
|
|
|
|
|
|
|
|
Inventory step-up and
other cost savings (2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261
|
|
Upfront and
milestone-related payments (3)
|
2,568
|
|
|
2,081
|
|
|
6,623
|
|
|
45,108
|
|
Inventory reserve
increase from restructuring (4)
|
—
|
|
|
150
|
|
|
—
|
|
|
2,947
|
|
Retention and
separation benefits and other restructuring (5)
|
19,426
|
|
|
4,004
|
|
|
34,598
|
|
|
83,348
|
|
Certain
litigation-related and other contingencies, net (6)
|
15,304
|
|
|
(1,561)
|
|
|
11,211
|
|
|
13,809
|
|
Asset impairment
charges (7)
|
267,430
|
|
|
303,539
|
|
|
526,082
|
|
|
916,939
|
|
Acquisition-related
and integration costs (8)
|
—
|
|
|
451
|
|
|
—
|
|
|
2,004
|
|
Fair value of
contingent consideration (9)
|
(19,115)
|
|
|
8,179
|
|
|
(46,098)
|
|
|
19,910
|
|
Gain on
extinguishment of debt (10)
|
—
|
|
|
—
|
|
|
(119,828)
|
|
|
—
|
|
Share-based
compensation
|
10,233
|
|
|
10,349
|
|
|
59,142
|
|
|
54,071
|
|
Other (income)
expense, net (16)
|
(3,731)
|
|
|
(18,737)
|
|
|
16,677
|
|
|
(51,953)
|
|
Other
adjustments
|
(91)
|
|
|
38
|
|
|
13,791
|
|
|
(737)
|
|
Discontinued
operations, net of tax (13)
|
10,154
|
|
|
26,429
|
|
|
62,052
|
|
|
69,702
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
346,283
|
|
|
$
|
344,185
|
|
|
$
|
1,308,890
|
|
|
$
|
1,357,061
|
|
Reconciliation of Adjusted Income from Continuing Operations
(non-GAAP)
The following table provides a reconciliation of our Loss from
continuing operations (GAAP) to our Adjusted income from continuing
operations (non-GAAP) for the three and twelve months ended
December 31, 2019 and 2018 (in
thousands):
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Loss from continuing
operations (GAAP)
|
$
|
(208,489)
|
|
|
$
|
(265,479)
|
|
|
$
|
(360,584)
|
|
|
$
|
(961,767)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
125,913
|
|
|
150,677
|
|
|
543,862
|
|
|
622,339
|
|
Inventory step-up and
other cost savings (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
Upfront and
milestone-related payments (3)
|
2,568
|
|
|
2,081
|
|
|
6,623
|
|
|
45,108
|
|
Inventory reserve
increase from restructuring (4)
|
—
|
|
|
150
|
|
|
—
|
|
|
2,947
|
|
Retention and
separation benefits and other restructuring (5)
|
19,426
|
|
|
4,004
|
|
|
34,598
|
|
|
83,348
|
|
Certain
litigation-related and other contingencies, net (6)
|
15,304
|
|
|
(1,561)
|
|
|
11,211
|
|
|
13,809
|
|
Asset impairment
charges (7)
|
267,430
|
|
|
303,539
|
|
|
526,082
|
|
|
916,939
|
|
Acquisition-related
and integration costs (8)
|
—
|
|
|
451
|
|
|
—
|
|
|
2,004
|
|
Fair value of
contingent consideration (9)
|
(19,115)
|
|
|
8,179
|
|
|
(46,098)
|
|
|
19,910
|
|
Gain on
extinguishment of debt (10)
|
—
|
|
|
—
|
|
|
(119,828)
|
|
|
—
|
|
Other (11)
|
(2,002)
|
|
|
(19,034)
|
|
|
28,252
|
|
|
(48,942)
|
|
Tax adjustments
(12)
|
(30,128)
|
|
|
(7,624)
|
|
|
(72,594)
|
|
|
(32,750)
|
|
Adjusted income from
continuing operations (non-GAAP)
|
$
|
170,907
|
|
|
$
|
175,383
|
|
|
$
|
551,524
|
|
|
$
|
663,206
|
|
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 twelve months ended December 31, 2019 and 2018 (in thousands, except
per share data):
|
Three months ended
December 31, 2019
|
|
Total revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross margin
%
|
|
Total operating
expenses
|
|
Operating expense
to revenue %
|
|
Operating (loss)
income from continuing operations
|
|
Operating margin
%
|
|
Other
non-operating expense, net
|
|
(Loss) income from
continuing operations before income tax
|
|
Income tax
(benefit) expense
|
|
Effective tax
rate
|
|
(Loss) income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net (loss)
income
|
|
Diluted net (loss)
income per share from continuing operations (14)
|
Reported
(GAAP)
|
$
764,800
|
|
$
400,056
|
|
$
364,744
|
|
47.7 %
|
|
$
458,669
|
|
60.0 %
|
|
$
(93,925)
|
|
(12.3)%
|
|
$ 130,616
|
|
$
(224,541)
|
|
$ (16,052)
|
|
7.1 %
|
|
$
(208,489)
|
|
$
(10,154)
|
|
$
(218,643)
|
|
$
(0.92)
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(125,913)
|
|
125,913
|
|
|
|
-
|
|
|
|
125,913
|
|
|
|
-
|
|
125,913
|
|
-
|
|
|
|
125,913
|
|
-
|
|
125,913
|
|
|
Upfront and
milestone-related payments (3)
|
-
|
|
(542)
|
|
542
|
|
|
|
(2,026)
|
|
|
|
2,568
|
|
|
|
-
|
|
2,568
|
|
-
|
|
|
|
2,568
|
|
-
|
|
2,568
|
|
|
Retention and
separation benefits and other restructuring (5)
|
-
|
|
(4,689)
|
|
4,689
|
|
|
|
(14,737)
|
|
|
|
19,426
|
|
|
|
-
|
|
19,426
|
|
-
|
|
|
|
19,426
|
|
-
|
|
19,426
|
|
|
Certain
litigation-related and other contingencies, net (6)
|
-
|
|
-
|
|
-
|
|
|
|
(15,304)
|
|
|
|
15,304
|
|
|
|
-
|
|
15,304
|
|
-
|
|
|
|
15,304
|
|
-
|
|
15,304
|
|
|
Asset impairment
charges (7)
|
-
|
|
-
|
|
-
|
|
|
|
(267,430)
|
|
|
|
267,430
|
|
|
|
-
|
|
267,430
|
|
-
|
|
|
|
267,430
|
|
-
|
|
267,430
|
|
|
Fair value of
contingent consideration (9)
|
-
|
|
-
|
|
-
|
|
|
|
19,115
|
|
|
|
(19,115)
|
|
|
|
-
|
|
(19,115)
|
|
-
|
|
|
|
(19,115)
|
|
-
|
|
(19,115)
|
|
|
Other (11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,002
|
|
(2,002)
|
|
-
|
|
|
|
(2,002)
|
|
-
|
|
(2,002)
|
|
|
Tax adjustments
(12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
30,128
|
|
|
|
(30,128)
|
|
-
|
|
(30,128)
|
|
|
Exclude discontinued
operations, net of tax (13)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
10,154
|
|
10,154
|
|
|
After considering
items (non-GAAP)
|
$
764,800
|
|
$
268,912
|
|
$
495,888
|
|
64.8 %
|
|
$
178,287
|
|
23.3 %
|
|
$
317,601
|
|
41.5 %
|
|
$ 132,618
|
|
$
184,983
|
|
$
14,076
|
|
7.6 %
|
|
$
170,907
|
|
$
-
|
|
$
170,907
|
|
$
0.74
|
|
Three months ended
December 31, 2018
|
|
Total revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross margin
%
|
|
Total operating
expenses
|
|
Operating expense
to revenue %
|
|
Operating (loss)
income from continuing operations
|
|
Operating margin
%
|
|
Other
non-operating expense, net
|
|
(Loss) income from
continuing operations before income tax
|
|
Income tax
(benefit) expense
|
|
Effective tax
rate
|
|
(Loss) income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net (loss)
income
|
|
Diluted net (loss)
income per share from continuing operations (14)
|
Reported
(GAAP)
|
$
786,389
|
|
$
433,214
|
|
$
353,175
|
|
44.9 %
|
|
$
503,425
|
|
64.0 %
|
|
$
(150,250)
|
|
(19.1)%
|
|
$ 117,023
|
|
$
(267,273)
|
|
$
(1,794)
|
|
0.7 %
|
|
$
(265,479)
|
|
$
(26,429)
|
|
$
(291,908)
|
|
$
(1.18)
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(150,677)
|
|
150,677
|
|
|
|
-
|
|
|
|
150,677
|
|
|
|
-
|
|
150,677
|
|
-
|
|
|
|
150,677
|
|
-
|
|
150,677
|
|
|
Upfront and
milestone-related payments (3)
|
-
|
|
(741)
|
|
741
|
|
|
|
(1,340)
|
|
|
|
2,081
|
|
|
|
-
|
|
2,081
|
|
-
|
|
|
|
2,081
|
|
-
|
|
2,081
|
|
|
Inventory reserve
increase from restructuring (4)
|
-
|
|
(150)
|
|
150
|
|
|
|
-
|
|
|
|
150
|
|
|
|
-
|
|
150
|
|
-
|
|
|
|
150
|
|
-
|
|
150
|
|
|
Retention and
separation benefits and other restructuring (5)
|
-
|
|
(30)
|
|
30
|
|
|
|
(3,974)
|
|
|
|
4,004
|
|
|
|
-
|
|
4,004
|
|
-
|
|
|
|
4,004
|
|
-
|
|
4,004
|
|
|
Certain
litigation-related and other contingencies, net (6)
|
-
|
|
-
|
|
-
|
|
|
|
1,561
|
|
|
|
(1,561)
|
|
|
|
-
|
|
(1,561)
|
|
-
|
|
|
|
(1,561)
|
|
-
|
|
(1,561)
|
|
|
Asset impairment
charges (7)
|
-
|
|
-
|
|
-
|
|
|
|
(303,539)
|
|
|
|
303,539
|
|
|
|
-
|
|
303,539
|
|
-
|
|
|
|
303,539
|
|
-
|
|
303,539
|
|
|
Acquisition-related
and integration costs (8)
|
-
|
|
-
|
|
-
|
|
|
|
(451)
|
|
|
|
451
|
|
|
|
-
|
|
451
|
|
-
|
|
|
|
451
|
|
-
|
|
451
|
|
|
Fair value of
contingent consideration (9)
|
-
|
|
-
|
|
-
|
|
|
|
(8,179)
|
|
|
|
8,179
|
|
|
|
-
|
|
8,179
|
|
-
|
|
|
|
8,179
|
|
-
|
|
8,179
|
|
|
Other (11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19,034
|
|
(19,034)
|
|
-
|
|
|
|
(19,034)
|
|
-
|
|
(19,034)
|
|
|
Tax adjustments
(12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
7,624
|
|
|
|
(7,624)
|
|
-
|
|
(7,624)
|
|
|
Exclude discontinued
operations, net of tax (13)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
26,429
|
|
26,429
|
|
|
After considering
items (non-GAAP)
|
$
786,389
|
|
$
281,616
|
|
$
504,773
|
|
64.2 %
|
|
$
187,503
|
|
23.8 %
|
|
$
317,270
|
|
40.3 %
|
|
$ 136,057
|
|
$
181,213
|
|
$
5,830
|
|
3.2 %
|
|
$
175,383
|
|
$
-
|
|
$
175,383
|
|
$
0.75
|
|
Year Ended
December 31, 2019
|
|
Total revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross margin
%
|
|
Total operating
expenses
|
|
Operating expense
to revenue %
|
|
Operating income
from continuing operations
|
|
Operating margin
%
|
|
Other
non-operating expense, net
|
|
(Loss) income from
continuing operations before income tax
|
|
Income tax
expense
|
|
Effective tax
rate
|
|
(Loss) income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net (loss)
income
|
|
Diluted net (loss)
income per share from continuing operations (14)
|
Reported
(GAAP)
|
$2,914,364
|
|
$
1,569,338
|
|
$1,345,026
|
|
46.2 %
|
|
$
1,254,347
|
|
43.0 %
|
|
$
90,679
|
|
3.1 %
|
|
$ 435,583
|
|
$
(344,904)
|
|
$
15,680
|
|
(4.5)%
|
|
$
(360,584)
|
|
$
(62,052)
|
|
$
(422,636)
|
|
$
(1.60)
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(543,862)
|
|
543,862
|
|
|
|
-
|
|
|
|
543,862
|
|
|
|
-
|
|
543,862
|
|
-
|
|
|
|
543,862
|
|
-
|
|
543,862
|
|
|
Upfront and
milestone-related payments (3)
|
-
|
|
(2,484)
|
|
2,484
|
|
|
|
(4,139)
|
|
|
|
6,623
|
|
|
|
-
|
|
6,623
|
|
-
|
|
|
|
6,623
|
|
-
|
|
6,623
|
|
|
Retention and
separation benefits and other restructuring (5)
|
-
|
|
(5,693)
|
|
5,693
|
|
|
|
(28,905)
|
|
|
|
34,598
|
|
|
|
-
|
|
34,598
|
|
-
|
|
|
|
34,598
|
|
-
|
|
34,598
|
|
|
Certain
litigation-related and other contingencies, net (6)
|
-
|
|
-
|
|
-
|
|
|
|
(11,211)
|
|
|
|
11,211
|
|
|
|
-
|
|
11,211
|
|
-
|
|
|
|
11,211
|
|
-
|
|
11,211
|
|
|
Asset impairment
charges (7)
|
-
|
|
-
|
|
-
|
|
|
|
(526,082)
|
|
|
|
526,082
|
|
|
|
-
|
|
526,082
|
|
-
|
|
|
|
526,082
|
|
-
|
|
526,082
|
|
|
Fair value of
contingent consideration (9)
|
-
|
|
-
|
|
-
|
|
|
|
46,098
|
|
|
|
(46,098)
|
|
|
|
-
|
|
(46,098)
|
|
-
|
|
|
|
(46,098)
|
|
-
|
|
(46,098)
|
|
|
Gain on
extinguishment of debt (10)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
119,828
|
|
(119,828)
|
|
-
|
|
|
|
(119,828)
|
|
-
|
|
(119,828)
|
|
|
Other (11)
|
-
|
|
-
|
|
-
|
|
|
|
(13,878)
|
|
|
|
13,878
|
|
|
|
(14,374)
|
|
28,252
|
|
-
|
|
|
|
28,252
|
|
-
|
|
28,252
|
|
|
Tax adjustments
(12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
72,594
|
|
|
|
(72,594)
|
|
-
|
|
(72,594)
|
|
|
Exclude discontinued
operations, net of tax (13)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
62,052
|
|
62,052
|
|
|
After considering
items (non-GAAP)
|
$2,914,364
|
|
$
1,017,299
|
|
$1,897,065
|
|
65.1 %
|
|
$
716,230
|
|
24.6 %
|
|
$1,180,835
|
|
40.5 %
|
|
$ 541,037
|
|
$
639,798
|
|
$
88,274
|
|
13.8 %
|
|
$
551,524
|
|
$
-
|
|
$
551,524
|
|
$
2.38
|
|
Year Ended
December 31, 2018
|
|
Total revenues,
net
|
|
Cost of
revenues
|
|
Gross
margin
|
|
Gross margin
%
|
|
Total operating
expenses
|
|
Operating expense
to revenue %
|
|
Operating (loss)
income from continuing operations
|
|
Operating margin
%
|
|
Other
non-operating expense, net
|
|
(Loss) income from
continuing operations before income tax
|
|
Income tax
expense
|
|
Effective tax
rate
|
|
(Loss) income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net (loss)
income
|
|
Diluted net (loss)
income per share from continuing operations (14)
|
Reported
(GAAP)
|
$2,947,078
|
|
$
1,631,682
|
|
$1,315,396
|
|
44.6 %
|
|
$
1,784,525
|
|
60.6 %
|
|
$
(469,129)
|
|
(15.9)%
|
|
$ 469,703
|
|
$
(938,832)
|
|
$
22,935
|
|
(2.4)%
|
|
$
(961,767)
|
|
$
(69,702)
|
|
$(1,031,469)
|
|
$
(4.29)
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(622,339)
|
|
622,339
|
|
|
|
-
|
|
|
|
622,339
|
|
|
|
-
|
|
622,339
|
|
-
|
|
|
|
622,339
|
|
-
|
|
622,339
|
|
|
Inventory step-up and
other cost savings (2)
|
-
|
|
(261)
|
|
261
|
|
|
|
-
|
|
|
|
261
|
|
|
|
-
|
|
261
|
|
-
|
|
|
|
261
|
|
-
|
|
261
|
|
|
Upfront and
milestone-related payments (3)
|
-
|
|
(2,836)
|
|
2,836
|
|
|
|
(42,272)
|
|
|
|
45,108
|
|
|
|
-
|
|
45,108
|
|
-
|
|
|
|
45,108
|
|
-
|
|
45,108
|
|
|
Inventory reserve
increase from restructuring (4)
|
-
|
|
(2,947)
|
|
2,947
|
|
|
|
-
|
|
|
|
2,947
|
|
|
|
-
|
|
2,947
|
|
-
|
|
|
|
2,947
|
|
-
|
|
2,947
|
|
|
Retention and
separation benefits and other restructuring (5)
|
-
|
|
(57,487)
|
|
57,487
|
|
|
|
(25,861)
|
|
|
|
83,348
|
|
|
|
-
|
|
83,348
|
|
-
|
|
|
|
83,348
|
|
-
|
|
83,348
|
|
|
Certain
litigation-related and other contingencies, net (6)
|
-
|
|
-
|
|
-
|
|
|
|
(13,809)
|
|
|
|
13,809
|
|
|
|
-
|
|
13,809
|
|
-
|
|
|
|
13,809
|
|
-
|
|
13,809
|
|
|
Asset impairment
charges (7)
|
-
|
|
-
|
|
-
|
|
|
|
(916,939)
|
|
|
|
916,939
|
|
|
|
-
|
|
916,939
|
|
-
|
|
|
|
916,939
|
|
-
|
|
916,939
|
|
|
Acquisition-related
and integration costs (8)
|
-
|
|
-
|
|
-
|
|
|
|
(2,004)
|
|
|
|
2,004
|
|
|
|
-
|
|
2,004
|
|
-
|
|
|
|
2,004
|
|
-
|
|
2,004
|
|
|
Fair value of
contingent consideration (9)
|
-
|
|
-
|
|
-
|
|
|
|
(19,910)
|
|
|
|
19,910
|
|
|
|
-
|
|
19,910
|
|
-
|
|
|
|
19,910
|
|
-
|
|
19,910
|
|
|
Other (11)
|
-
|
|
-
|
|
-
|
|
|
|
630
|
|
|
|
(630)
|
|
|
|
48,312
|
|
(48,942)
|
|
-
|
|
|
|
(48,942)
|
|
-
|
|
(48,942)
|
|
|
Tax adjustments
(12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
32,750
|
|
|
|
(32,750)
|
|
-
|
|
(32,750)
|
|
|
Exclude discontinued
operations, net of tax (13)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
69,702
|
|
69,702
|
|
|
After considering
items (non-GAAP)
|
$2,947,078
|
|
$
945,812
|
|
$2,001,266
|
|
67.9 %
|
|
$
764,360
|
|
25.9 %
|
|
$1,236,906
|
|
42.0 %
|
|
$ 518,015
|
|
$
718,891
|
|
$
55,685
|
|
7.7 %
|
|
$
663,206
|
|
$
-
|
|
$
663,206
|
|
$
2.89
|
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 twelve months ended December
31, 2019 and 2018 are as follows:
(1)
|
Adjustments for
amortization of commercial intangible assets included the following
(in thousands):
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Amortization of
intangible assets excluding fair value step-up from contingent
consideration
|
$
|
123,669
|
|
|
$
|
141,917
|
|
|
$
|
523,872
|
|
|
$
|
587,932
|
|
|
Amortization of
intangible assets related to fair value step-up from contingent
consideration
|
2,244
|
|
|
8,760
|
|
|
19,990
|
|
|
34,407
|
|
|
Total
|
$
|
125,913
|
|
|
$
|
150,677
|
|
|
$
|
543,862
|
|
|
$
|
622,339
|
|
|
|
(2)
|
To exclude
adjustments for inventory step-up.
|
|
|
(3)
|
Adjustments for
upfront and milestone-related payments to partners included the
following (in thousands):
|
|
|
|
|
Three months ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Sales-based
|
$
|
542
|
|
|
$
|
—
|
|
|
$
|
741
|
|
|
$
|
—
|
|
|
Development-based
|
—
|
|
|
2,026
|
|
|
—
|
|
|
1,340
|
|
|
Total
|
$
|
542
|
|
|
$
|
2,026
|
|
|
$
|
741
|
|
|
$
|
1,340
|
|
|
|
|
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Sales-based
|
$
|
2,484
|
|
|
$
|
—
|
|
|
$
|
2,836
|
|
|
$
|
—
|
|
|
Development-based
|
—
|
|
|
4,139
|
|
|
—
|
|
|
42,272
|
|
|
Total
|
$
|
2,484
|
|
|
$
|
4,139
|
|
|
$
|
2,836
|
|
|
$
|
42,272
|
|
|
|
(4)
|
To exclude charges
reflecting adjustments to excess inventory reserves related to our
various restructuring initiatives.
|
|
|
(5)
|
Adjustments for
retention and separation benefits and other restructuring included
the following (in thousands):
|
|
|
|
|
Three months ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Retention and
separation benefits
|
$
|
4,689
|
|
|
$
|
9,997
|
|
|
$
|
17
|
|
|
$
|
(986)
|
|
|
Other
|
—
|
|
|
4,740
|
|
|
13
|
|
|
4,960
|
|
|
Total
|
$
|
4,689
|
|
|
$
|
14,737
|
|
|
$
|
30
|
|
|
$
|
3,974
|
|
|
|
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Retention and
separation benefits
|
$
|
5,693
|
|
|
$
|
17,881
|
|
|
$
|
15,496
|
|
|
$
|
16,229
|
|
|
Accelerated
depreciation and product discontinuation charges
|
—
|
|
|
—
|
|
|
35,177
|
|
|
—
|
|
|
Other
|
—
|
|
|
11,024
|
|
|
6,814
|
|
|
9,632
|
|
|
Total
|
$
|
5,693
|
|
|
$
|
28,905
|
|
|
$
|
57,487
|
|
|
$
|
25,861
|
|
|
|
(6)
|
To exclude
adjustments to our accruals for litigation-related settlement
charges and certain settlement proceeds related to suits filed by
our subsidiaries.
|
|
|
(7)
|
Adjustments for asset
impairment charges included the following (in
thousands):
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Goodwill impairment
charges
|
$
|
20,800
|
|
|
$
|
289,000
|
|
|
$
|
171,908
|
|
|
$
|
680,000
|
|
|
Other intangible
asset impairment charges
|
243,046
|
|
|
12,842
|
|
|
347,706
|
|
|
230,418
|
|
|
Property, plant and
equipment impairment charges
|
3,584
|
|
|
1,697
|
|
|
6,468
|
|
|
6,521
|
|
|
Total asset
impairment charges
|
$
|
267,430
|
|
|
$
|
303,539
|
|
|
$
|
526,082
|
|
|
$
|
916,939
|
|
|
|
(8)
|
Adjustments for
acquisition and integration items primarily relate to various
acquisitions.
|
|
|
(9)
|
To exclude the impact
of changes in the fair value of contingent consideration
liabilities resulting from changes to our 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 we could incur, related contingent
obligations.
|
|
|
(10)
|
To exclude the gain
on the extinguishment of debt associated with our March 2019
refinancing.
|
|
|
(11)
|
Other adjustments
included the following (in thousands):
|
|
|
|
|
Three months ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact related to the re-measurement of intercompany debt
instruments
|
$
|
—
|
|
|
$
|
1,488
|
|
|
$
|
—
|
|
|
$
|
(3,926)
|
|
|
(Gain) loss on sale
of business and other assets
|
—
|
|
|
(5,488)
|
|
|
—
|
|
|
(15,513)
|
|
|
Other
miscellaneous
|
—
|
|
|
1,998
|
|
|
—
|
|
|
405
|
|
|
Total
|
$
|
—
|
|
|
$
|
(2,002)
|
|
|
$
|
—
|
|
|
$
|
(19,034)
|
|
|
|
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact related to the re-measurement of intercompany debt
instruments
|
$
|
—
|
|
|
$
|
4,362
|
|
|
$
|
—
|
|
|
$
|
(5,486)
|
|
|
(Gain) loss on sale
of business and other assets
|
—
|
|
|
(7,488)
|
|
|
—
|
|
|
(39,527)
|
|
|
Other
miscellaneous
|
13,878
|
|
|
17,500
|
|
|
(630)
|
|
|
(3,299)
|
|
|
Total
|
$
|
13,878
|
|
|
$
|
14,374
|
|
|
$
|
(630)
|
|
|
$
|
(48,312)
|
|
|
|
|
Other miscellaneous
during the year ended December 31, 2019 includes $14.1 million in
Operating expenses for a premium associated with an extended
reporting period endorsement on an expiring insurance program and
$17.5 million in Other non-operating expenses for contract
termination costs incurred as a result of certain product
discontinuation activities in our International Pharmaceuticals
segment.
|
|
|
(12)
|
Adjusted income taxes
are calculated by tax effecting adjusted pre-tax income and
permanent book-tax differences at the applicable effective tax rate
that will be determined by reference to statutory tax rates in the
relevant jurisdictions in which the Company operates. Adjusted
income taxes include current and deferred income tax expense
commensurate with the non-GAAP measure of profitability.
|
|
|
(13)
|
To exclude the
results of the businesses reported as discontinued operations, net
of tax.
|
|
|
(14)
|
Calculated as Net
(loss) income 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
December 31,
|
|
Year ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
GAAP
|
226,787
|
|
|
224,353
|
|
|
226,050
|
|
|
223,960
|
|
|
Non-GAAP
Adjusted
|
231,571
|
|
|
232,958
|
|
|
231,706
|
|
|
229,386
|
|
|
|
(15)
|
Depreciation and
amortization per the Adjusted EBITDA reconciliations do not include
certain depreciation amounts reflected in other lines of the
reconciliations, including Acquisition-related and integration
costs and Retention and separation benefits and other
restructuring.
|
|
|
(16)
|
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 our Net loss
(GAAP) to our Adjusted EBITDA (non-GAAP) for the twelve months
ended December 31, 2019 (in thousands) and the calculation of
our Net Debt Leverage Ratio (non-GAAP):
|
Twelve Months
Ended
December 31,
2019
|
Net loss
(GAAP)
|
$
|
(422,636)
|
|
Income tax
expense
|
15,680
|
|
Interest expense,
net
|
538,734
|
|
Depreciation and
amortization (15)
|
612,862
|
|
EBITDA
(non-GAAP)
|
$
|
744,640
|
|
|
|
Upfront and
milestone-related payments
|
$
|
6,623
|
|
Retention and
separation benefits and other restructuring
|
34,598
|
|
Certain
litigation-related and other contingencies, net
|
11,211
|
|
Asset impairment
charges
|
526,082
|
|
Fair value of
contingent consideration
|
(46,098)
|
|
Gain on
extinguishment of debt
|
(119,828)
|
|
Share-based
compensation
|
59,142
|
|
Other expense,
net
|
16,677
|
|
Other
adjustments
|
13,791
|
|
Discontinued
operations, net of tax
|
62,052
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
1,308,890
|
|
|
|
Calculation of Net
Debt:
|
|
Debt
|
$
|
8,394,049
|
|
Cash (excluding
Restricted Cash)
|
1,454,531
|
|
Net Debt
(non-GAAP)
|
$
|
6,939,518
|
|
|
|
Calculation of Net
Debt Leverage:
|
|
Net Debt Leverage
Ratio (non-GAAP)
|
5.3
|
|
Non-GAAP Financial Measures
The Company utilizes certain financial measures that are not
prescribed by or prepared in accordance with accounting principles
generally accepted in the U.S. (GAAP). These Non-GAAP financial
measures are not, and should not be viewed as, substitutes for GAAP
net income and its components and diluted net income per share
amounts. Despite the importance of these measures to management in
goal setting and performance measurement, the company stresses that
these are Non-GAAP financial measures that have no standardized
meaning prescribed by GAAP and, therefore, have limits in their
usefulness to investors. Because of the non-standardized
definitions, Non-GAAP adjusted EBITDA and Non-GAAP adjusted net
income from continuing operations and its components (unlike GAAP
net income from continuing operations and its components) may not
be comparable to the calculation of similar measures of other
companies. These Non-GAAP financial measures are presented solely
to permit investors to more fully understand how management
assesses performance.
Investors are encouraged to review the reconciliations of the
non-GAAP financial measures used in this press release to their
most directly comparable GAAP financial measures. However, the
Company does not provide reconciliations of projected non-GAAP
financial measures to GAAP financial measures, nor does it provide
comparable projected GAAP financial measures for such projected
non-GAAP financial measures. The Company is unable to provide such
reconciliations without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations, including adjustments that
could be made for asset impairments, contingent consideration
adjustments, legal settlements, gain / loss on extinguishment of
debt, adjustments to inventory and other charges reflected in the
reconciliation of historic numbers, the amounts of which could be
significant.
See Endo's Current Report on Form
8-K furnished today to the U.S. Securities and Exchange Commission
for an explanation of Endo's non-GAAP financial measures.
About Endo International plc
Endo International plc (NASDAQ: ENDP) is a highly focused
specialty branded and generics pharmaceutical company delivering
quality medicines to patients in need through excellence in
development, manufacturing and commercialization. Endo has global
headquarters in Dublin, Ireland.
Learn more at www.endo.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements,
including but not limited to the statements by Mr. Campanelli, as
well as other statements regarding product development, market
potential, corporate strategy, optimization efforts and
restructurings, timing, closing and expected benefits and value
from any acquisition, expected growth and regulatory approvals,
together with Endo's net income per share from continuing
operations 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; changes in
legislation; 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 strategic
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; unfavorable publicity regarding the misuse of opioids;
timing and uncertainty of any acquisition, including the
possibility that various closing conditions may not be satisfied or
waived, uncertainty surrounding the successful integration of any
acquired business and failure to achieve the expected financial and
commercial results from such acquisition; 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.
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 most
recent 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
845-364-4833.
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SOURCE Endo International plc