DUBLIN, Feb. 25, 2021 /PRNewswire/ -- Endo
International plc (NASDAQ: ENDP) today reported financial results
for the fourth-quarter and full-year ended December 31, 2020
and introduced 2021 financial guidance.
"I am proud of all that the Endo team achieved in a very
challenging year. We made significant progress in advancing our
strategic priorities, delivered solid financial performance,
rapidly responded to the COVID-19 pandemic and advanced our
ESG-related actions," said Blaise
Coleman, President and Chief Executive Officer at Endo.
"Looking ahead, we remain committed to expanding and enhancing
our portfolio through focused investments, including the
anticipated spring 2021 launch of QWO®, the first and
only FDA approved injectable treatment for cellulite. Together with
our previously announced business transformation initiatives, we
are confident that continuing to execute on our strategic
priorities will enable us to deliver sustainable value over the
long-term."
FINANCIAL
PERFORMANCE
(in thousands,
except per share amounts)
|
|
|
Three Months Ended
December 31,
|
|
|
|
Year Ended
December 31,
|
|
|
|
2020
|
|
2019
(1)
|
|
Change
|
|
2020
|
|
2019
(1)
|
|
Change
|
Total Revenues,
Net
|
$
|
760,221
|
|
|
$
|
764,800
|
|
|
(1)
|
%
|
|
$
|
2,903,074
|
|
|
$
|
2,914,364
|
|
|
—
|
%
|
Reported Income
(Loss) from Continuing Operations
|
$
|
141,247
|
|
|
$
|
(208,489)
|
|
|
NM
|
|
|
$
|
247,464
|
|
|
$
|
(360,584)
|
|
|
NM
|
|
Reported Diluted
Weighted Average Shares
|
234,474
|
|
|
226,787
|
|
|
3
|
%
|
|
233,653
|
|
|
226,050
|
|
|
3
|
%
|
Reported Diluted Net
Income (Loss) per Share from Continuing Operations
|
$
|
0.60
|
|
|
$
|
(0.92)
|
|
|
NM
|
|
|
$
|
1.06
|
|
|
$
|
(1.60)
|
|
|
NM
|
|
Reported Net Income
(Loss)
|
$
|
119,343
|
|
|
$
|
(218,643)
|
|
|
NM
|
|
|
$
|
183,944
|
|
|
$
|
(422,636)
|
|
|
NM
|
|
Adjusted Income from
Continuing Operations (3)
|
$
|
175,995
|
|
|
$
|
185,231
|
|
|
(5)
|
%
|
|
$
|
670,370
|
|
|
$
|
616,078
|
|
|
9
|
%
|
Adjusted Diluted
Weighted Average Shares (2)(3)
|
234,474
|
|
|
231,571
|
|
|
1
|
%
|
|
233,653
|
|
|
231,706
|
|
|
1
|
%
|
Adjusted Diluted Net
Income per Share from Continuing Operations (3)
|
$
|
0.75
|
|
|
$
|
0.80
|
|
|
(6)
|
%
|
|
$
|
2.87
|
|
|
$
|
2.66
|
|
|
8
|
%
|
Adjusted EBITDA
(3)
|
$
|
351,635
|
|
|
$
|
361,336
|
|
|
(3)
|
%
|
|
$
|
1,395,942
|
|
|
$
|
1,374,172
|
|
|
2
|
%
|
__________
|
(1)
|
Certain prior period
adjusted amounts have been revised as a result of a change in the
Company's definition of its adjusted financial metrics. Refer to
the "Supplemental Financial Information" section below for
additional discussion.
|
(2)
|
Reported Diluted Net
Income (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.
|
(3)
|
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 $760 million
in fourth-quarter 2020, a decrease of 1% compared to $765 million during the same period in 2019. This
result was primarily attributable to decreased Generic
Pharmaceuticals segment revenues which were largely offset by
increased Sterile Injectables segment revenues.
Reported income from continuing operations in fourth-quarter
2020 was $141 million compared to a
reported loss from continuing operations of $208 million during the same period in 2019. This
result was primarily attributable to decreased asset impairment
charges and a non-cash income tax benefit resulting from a change
in deferred tax liabilities following the BioSpecifics Technologies
Corp. (BioSpecifics) acquisition in fourth-quarter 2020. Reported
diluted net income per share from continuing operations in
fourth-quarter 2020 was $0.60
compared to reported diluted net loss per share from continuing
operations in fourth-quarter 2019 of $0.92.
Adjusted income from continuing operations in fourth-quarter
2020 was $176 million compared to
$185 million in fourth-quarter 2019.
Adjusted diluted net income per share from continuing operations in
fourth-quarter 2020 was $0.75
compared to $0.80 in fourth-quarter
2019. These decreases were primarily attributable to higher
adjusted operating expenses.
BRANDED PHARMACEUTICALS SEGMENT
Fourth-quarter 2020 Branded Pharmaceuticals segment revenues
were $225 million and were comparable
to revenues of $226 million during
fourth-quarter 2019.
Specialty Products revenues increased 4% to $154 million in fourth-quarter 2020 compared to
$149 million in fourth-quarter 2019,
with sales of XIAFLEX® increasing 4% to $105 million compared to sales of $102 million in fourth-quarter 2019. Established
Products revenues decreased 8% to $71
million in fourth-quarter 2020 compared to $77 million in fourth-quarter 2019, driven
primarily by TESTOPEL® supply normalization.
STERILE INJECTABLES SEGMENT
Fourth-quarter 2020 Sterile Injectables segment revenues were
$332 million, an increase of 16%
compared to $285 million during
fourth-quarter 2019. This increase was primarily driven by higher
VASOSTRICT® revenues.
GENERIC PHARMACEUTICALS SEGMENT
Fourth-quarter 2020 Generic Pharmaceuticals segment revenues
were $180 million, a decrease of 20%
compared to $226 million during
fourth-quarter 2019. This decrease was primarily attributable to
continued competitive pressures on certain key products.
INTERNATIONAL PHARMACEUTICALS SEGMENT
Fourth-quarter 2020 International Pharmaceuticals segment
revenues decreased 18% to $23 million
compared to $29 million during
fourth-quarter 2019. This decrease was primarily attributable to
continued competitive pressures on certain key products.
2021 FINANCIAL GUIDANCE
Endo is providing financial guidance for the first-quarter and
full-year ending December 31, 2021.
The guidance below contemplates a range of potential outcomes that
reflect uncertainties in certain key assumptions including, among
other things, uncertainties related to the COVID-19 pandemic. These
statements are forward-looking, and actual results may differ
materially from Endo's expectations, as further discussed below
under the heading "Cautionary Note Regarding Forward-Looking
Statements."
|
First-Quarter
2021
|
|
Full-Year
2021
|
|
|
|
|
Total Revenues,
Net
|
$620M -
$680M
|
|
$2.55B -
$2.79B
|
Adjusted
EBITDA
|
$270M -
$300M
|
|
$1.12B -
$1.28B
|
Adjusted Diluted Net
Income per Share from Continuing Operations
|
$0.40 -
$0.50
|
|
$1.80 -
$2.30
|
|
|
|
|
Assumptions:
|
|
|
|
Adjusted Gross
Margin
|
~70.5%
|
|
~70.0% -
71.0%
|
Adjusted Operating
Expenses as a Percentage of Total Revenues, Net
|
~30.5%
|
|
~28.5% -
29.5%
|
Adjusted Interest
Expense
|
~$135M
|
|
~$540M
|
Adjusted Effective
Tax Rate
|
~16.5%
|
|
~13.0% -
14.0%
|
Adjusted Diluted
Weighted Average Shares
|
~237M
|
|
~239M
|
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES
As of December 31, 2020, the Company had approximately
$1.2 billion in unrestricted cash;
$8.3 billion of debt; and a net debt
to adjusted EBITDA ratio of 5.1.
Fourth-quarter 2020 net cash provided by operating activities
was $108 million, compared to
$21 million of net cash used in
operating activities during fourth-quarter 2019.
On December 2, 2020, the Company
completed the previously announced acquisition of BioSpecifics, a
commercial-stage biopharmaceutical company, for $88.50 per share in an all-cash transaction. We
paid approximately $560 million in
cash, net of cash, cash equivalents and investments acquired, to
acquire BioSpecifics.
CONFERENCE CALL INFORMATION
Endo will conduct a conference call with financial analysts to
discuss this press release tomorrow, February 26, 2021, at 7:30
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 8387347. Please
dial in 10 minutes prior to the scheduled start time.
A replay of the call will be available from February 26, 2021 at 10:30
a.m. ET until 10:30 a.m. ET on March
5, 2021 by dialing U.S./Canada (855) 859-2056; International (404)
537-3406, and entering the passcode 8387347.
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 months and years ended December 31, 2020 and 2019 (dollars in
thousands):
|
Three Months Ended
December 31,
|
|
Percent
Growth
|
|
Year Ended
December 31,
|
|
Percent
Growth
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
Branded
Pharmaceuticals:
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Products:
|
|
|
|
|
|
|
|
|
|
|
|
XIAFLEX®
|
$
|
105,212
|
|
|
$
|
101,520
|
|
|
4
|
%
|
|
$
|
316,234
|
|
|
$
|
327,638
|
|
|
(3)
|
%
|
SUPPRELIN®
LA
|
24,838
|
|
|
20,255
|
|
|
23
|
%
|
|
88,182
|
|
|
86,797
|
|
|
2
|
%
|
Other Specialty
(1)
|
23,867
|
|
|
26,844
|
|
|
(11)
|
%
|
|
92,662
|
|
|
105,241
|
|
|
(12)
|
%
|
Total Specialty
Products
|
$
|
153,917
|
|
|
$
|
148,619
|
|
|
4
|
%
|
|
$
|
497,078
|
|
|
$
|
519,676
|
|
|
(4)
|
%
|
Established
Products:
|
|
|
|
|
|
|
|
|
|
|
|
PERCOCET®
|
$
|
27,323
|
|
|
$
|
27,813
|
|
|
(2)
|
%
|
|
$
|
110,112
|
|
|
$
|
116,012
|
|
|
(5)
|
%
|
TESTOPEL®
|
8,357
|
|
|
14,414
|
|
|
(42)
|
%
|
|
35,234
|
|
|
55,244
|
|
|
(36)
|
%
|
Other Established
(2)
|
34,907
|
|
|
34,705
|
|
|
1
|
%
|
|
139,356
|
|
|
164,470
|
|
|
(15)
|
%
|
Total Established
Products
|
$
|
70,587
|
|
|
$
|
76,932
|
|
|
(8)
|
%
|
|
$
|
284,702
|
|
|
$
|
335,726
|
|
|
(15)
|
%
|
Total Branded
Pharmaceuticals (3)
|
$
|
224,504
|
|
|
$
|
225,551
|
|
|
—
|
%
|
|
$
|
781,780
|
|
|
$
|
855,402
|
|
|
(9)
|
%
|
Sterile
Injectables:
|
|
|
|
|
|
|
|
|
|
|
|
VASOSTRICT®
|
$
|
213,116
|
|
|
$
|
146,883
|
|
|
45
|
%
|
|
$
|
785,646
|
|
|
$
|
531,737
|
|
|
48
|
%
|
ADRENALIN®
|
31,739
|
|
|
45,827
|
|
|
(31)
|
%
|
|
152,074
|
|
|
179,295
|
|
|
(15)
|
%
|
Ertapenem for
injection
|
18,959
|
|
|
25,060
|
|
|
(24)
|
%
|
|
65,607
|
|
|
104,679
|
|
|
(37)
|
%
|
APLISOL®
|
10,399
|
|
|
5,830
|
|
|
78
|
%
|
|
36,220
|
|
|
61,826
|
|
|
(41)
|
%
|
Other Sterile
Injectables (4)
|
57,637
|
|
|
61,568
|
|
|
(6)
|
%
|
|
199,300
|
|
|
185,594
|
|
|
7
|
%
|
Total Sterile
Injectables (3)
|
$
|
331,850
|
|
|
$
|
285,168
|
|
|
16
|
%
|
|
$
|
1,238,847
|
|
|
$
|
1,063,131
|
|
|
17
|
%
|
Total Generic
Pharmaceuticals
|
$
|
180,440
|
|
|
$
|
225,560
|
|
|
(20)
|
%
|
|
$
|
783,110
|
|
|
$
|
879,882
|
|
|
(11)
|
%
|
Total International
Pharmaceuticals
|
$
|
23,427
|
|
|
$
|
28,521
|
|
|
(18)
|
%
|
|
$
|
99,337
|
|
|
$
|
115,949
|
|
|
(14)
|
%
|
Total revenues,
net
|
$
|
760,221
|
|
|
$
|
764,800
|
|
|
(1)
|
%
|
|
$
|
2,903,074
|
|
|
$
|
2,914,364
|
|
|
—
|
%
|
__________
|
(1)
|
Products included
within Other Specialty are NASCOBAL® Nasal Spray and
AVEED®.
|
(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 the year ended December 31, 2020 and/or any
product having revenues in excess of $100 million during any of the
years ended December 31, 2020, 2019 or 2018 or $25 million during
any quarterly period in 2020 or 2019.
|
(4)
|
Products included
within Other Sterile Injectables include ephedrine sulfate
injection and others.
|
The following table presents unaudited Condensed Consolidated
Statement of Operations data for the three months and years ended
December 31, 2020 and 2019 (in
thousands, except per share data):
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
TOTAL REVENUES,
NET
|
$
|
760,221
|
|
|
$
|
764,800
|
|
|
$
|
2,903,074
|
|
|
$
|
2,914,364
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
Cost of
revenues
|
369,539
|
|
|
400,056
|
|
|
1,442,511
|
|
|
1,569,338
|
|
Selling, general and
administrative
|
176,221
|
|
|
160,671
|
|
|
698,506
|
|
|
632,420
|
|
Research and
development
|
64,737
|
|
|
34,379
|
|
|
158,902
|
|
|
130,732
|
|
Litigation-related and
other contingencies, net
|
4,889
|
|
|
15,304
|
|
|
(19,049)
|
|
|
11,211
|
|
Asset impairment
charges
|
14,147
|
|
|
267,430
|
|
|
120,344
|
|
|
526,082
|
|
Acquisition-related
and integration items, net
|
(551)
|
|
|
(19,115)
|
|
|
16,549
|
|
|
(46,098)
|
|
Interest expense,
net
|
135,250
|
|
|
134,347
|
|
|
532,939
|
|
|
538,734
|
|
Gain on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,828)
|
|
Other expense
(income), net
|
4,208
|
|
|
(3,731)
|
|
|
(21,110)
|
|
|
16,677
|
|
LOSS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAX
|
$
|
(8,219)
|
|
|
$
|
(224,541)
|
|
|
$
|
(26,518)
|
|
|
$
|
(344,904)
|
|
INCOME TAX (BENEFIT)
EXPENSE
|
(149,466)
|
|
|
(16,052)
|
|
|
(273,982)
|
|
|
15,680
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS
|
$
|
141,247
|
|
|
$
|
(208,489)
|
|
|
$
|
247,464
|
|
|
$
|
(360,584)
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(21,904)
|
|
|
(10,154)
|
|
|
(63,520)
|
|
|
(62,052)
|
|
NET INCOME
(LOSS)
|
$
|
119,343
|
|
|
$
|
(218,643)
|
|
|
$
|
183,944
|
|
|
$
|
(422,636)
|
|
NET INCOME (LOSS) PER
SHARE—BASIC:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.61
|
|
|
$
|
(0.92)
|
|
|
$
|
1.08
|
|
|
$
|
(1.60)
|
|
Discontinued
operations
|
(0.09)
|
|
|
(0.04)
|
|
|
(0.28)
|
|
|
(0.27)
|
|
Basic
|
$
|
0.52
|
|
|
$
|
(0.96)
|
|
|
$
|
0.80
|
|
|
$
|
(1.87)
|
|
NET INCOME (LOSS) PER
SHARE—DILUTED:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.60
|
|
|
$
|
(0.92)
|
|
|
$
|
1.06
|
|
|
$
|
(1.60)
|
|
Discontinued
operations
|
(0.09)
|
|
|
(0.04)
|
|
|
(0.27)
|
|
|
(0.27)
|
|
Diluted
|
$
|
0.51
|
|
|
$
|
(0.96)
|
|
|
$
|
0.79
|
|
|
$
|
(1.87)
|
|
WEIGHTED AVERAGE
SHARES:
|
|
|
|
|
|
|
|
Basic
|
230,301
|
|
|
226,787
|
|
|
229,314
|
|
|
226,050
|
|
Diluted
|
234,474
|
|
|
226,787
|
|
|
233,653
|
|
|
226,050
|
|
The following table presents unaudited Condensed Consolidated
Balance Sheet data at December 31, 2020 and December 31,
2019 (in thousands):
|
December 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,213,437
|
|
|
$
|
1,454,531
|
|
Restricted cash and
cash equivalents
|
171,563
|
|
|
247,457
|
|
Accounts
receivable
|
511,262
|
|
|
467,953
|
|
Inventories,
net
|
352,260
|
|
|
327,865
|
|
Other current
assets
|
164,736
|
|
|
88,412
|
|
Total current
assets
|
$
|
2,413,258
|
|
|
$
|
2,586,218
|
|
TOTAL NON-CURRENT
ASSETS
|
6,851,379
|
|
|
6,803,309
|
|
TOTAL
ASSETS
|
$
|
9,264,637
|
|
|
$
|
9,389,527
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued expenses, including legal settlement accruals
|
$
|
1,208,061
|
|
|
$
|
1,412,954
|
|
Other current
liabilities
|
45,763
|
|
|
47,335
|
|
Total current
liabilities
|
$
|
1,253,824
|
|
|
$
|
1,460,289
|
|
LONG-TERM DEBT, LESS
CURRENT PORTION, NET
|
8,280,578
|
|
|
8,359,899
|
|
OTHER
LIABILITIES
|
378,174
|
|
|
435,883
|
|
SHAREHOLDERS'
DEFICIT
|
(647,939)
|
|
|
(866,544)
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
$
|
9,264,637
|
|
|
$
|
9,389,527
|
|
The following table presents unaudited Condensed Consolidated
Statement of Cash Flow data for the years ended December 31, 2020 and 2019 (in thousands):
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
OPERATING
ACTIVITIES:
|
|
|
|
Net income
(loss)
|
$
|
183,944
|
|
|
$
|
(422,636)
|
|
Adjustments to
reconcile Net income (loss) to Net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
518,807
|
|
|
612,862
|
|
Asset impairment
charges
|
120,344
|
|
|
526,082
|
|
Other, including cash
payments to claimants from Qualified Settlement Funds
|
(425,703)
|
|
|
(618,256)
|
|
Net cash provided by
operating activities
|
$
|
397,392
|
|
|
$
|
98,052
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Capital expenditures,
excluding capitalized interest
|
$
|
(69,971)
|
|
|
$
|
(63,854)
|
|
Acquisitions,
including in-process research and development, net of cash and
restricted cash acquired
|
(649,504)
|
|
|
—
|
|
Proceeds from sales
and maturities of investments
|
92,763
|
|
|
—
|
|
Proceeds from sale of
business and other assets, net
|
6,737
|
|
|
6,577
|
|
Other
|
(4,892)
|
|
|
(2,921)
|
|
Net cash used in
investing activities
|
$
|
(624,867)
|
|
|
$
|
(60,198)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
(Payments on) proceeds
from borrowings, net
|
$
|
(96,683)
|
|
|
$
|
237,989
|
|
Other
|
(11,884)
|
|
|
(33,388)
|
|
Net cash (used in)
provided by financing activities
|
$
|
(108,567)
|
|
|
$
|
204,601
|
|
Effect of foreign
exchange rate
|
654
|
|
|
1,096
|
|
NET (DECREASE)
INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED
CASH EQUIVALENTS
|
$
|
(335,388)
|
|
|
$
|
243,551
|
|
CASH, CASH
EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
1,720,388
|
|
|
1,476,837
|
|
CASH, CASH
EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END
OF PERIOD
|
$
|
1,385,000
|
|
|
$
|
1,720,388
|
|
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 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.
Effective January 1, 2020, the
Company revised its definition of its adjusted financial metrics to
exclude certain legal costs. The Company believes that such costs
are not indicative of business performance and that excluding them
more accurately reflects the Company's results and better enables
management to compare financial results between periods. As a
result of this change, the Company's adjusted financial metrics now
exclude opioid-related legal expenses. Prior period adjusted
results throughout this document have also been adjusted to reflect
this change. The impact of excluding these costs during the three
months and years ended December 31,
2020 and 2019 is reflected in the Certain legal costs lines
of each of the following reconciliation tables.
Reconciliation of EBITDA and Adjusted EBITDA
(non-GAAP)
The following table provides a reconciliation of Net income
(loss) (GAAP) to Adjusted EBITDA (non-GAAP) for the three months
and years ended December 31, 2020 and
2019 (in thousands):
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income (loss)
(GAAP)
|
$
|
119,343
|
|
|
$
|
(218,643)
|
|
|
$
|
183,944
|
|
|
$
|
(422,636)
|
|
Income tax (benefit)
expense
|
(149,466)
|
|
|
(16,052)
|
|
|
(273,982)
|
|
|
15,680
|
|
Interest expense,
net
|
135,250
|
|
|
134,347
|
|
|
532,939
|
|
|
538,734
|
|
Depreciation and
amortization (14)
|
119,562
|
|
|
144,453
|
|
|
496,349
|
|
|
612,862
|
|
EBITDA
(non-GAAP)
|
$
|
224,689
|
|
|
$
|
44,105
|
|
|
$
|
939,250
|
|
|
$
|
744,640
|
|
|
|
|
|
|
|
|
|
Upfront and
milestone-related payments (2)
|
32,606
|
|
|
2,568
|
|
|
35,075
|
|
|
6,623
|
|
Continuity and
separation benefits and other cost reductions (3)
|
25,926
|
|
|
19,426
|
|
|
126,282
|
|
|
34,598
|
|
Certain
litigation-related and other contingencies, net (4)
|
4,889
|
|
|
15,304
|
|
|
(19,049)
|
|
|
11,211
|
|
Certain legal costs
(5)
|
15,935
|
|
|
15,053
|
|
|
67,819
|
|
|
65,282
|
|
Asset impairment
charges (6)
|
14,147
|
|
|
267,430
|
|
|
120,344
|
|
|
526,082
|
|
Acquisition-related
and integration costs (7)
|
196
|
|
|
—
|
|
|
196
|
|
|
—
|
|
Fair value of
contingent consideration (8)
|
(747)
|
|
|
(19,115)
|
|
|
16,353
|
|
|
(46,098)
|
|
Gain on
extinguishment of debt (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,828)
|
|
Share-based
compensation (14)
|
7,905
|
|
|
10,233
|
|
|
36,167
|
|
|
59,142
|
|
Other expense
(income), net (15)
|
4,208
|
|
|
(3,731)
|
|
|
(21,110)
|
|
|
16,677
|
|
Other (10)
|
(23)
|
|
|
(91)
|
|
|
31,095
|
|
|
13,791
|
|
Discontinued
operations, net of tax (12)
|
21,904
|
|
|
10,154
|
|
|
63,520
|
|
|
62,052
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
351,635
|
|
|
$
|
361,336
|
|
|
$
|
1,395,942
|
|
|
$
|
1,374,172
|
|
Reconciliation of Adjusted Income from Continuing Operations
(non-GAAP)
The following table provides a reconciliation of the Company's
Income (loss) from continuing operations (GAAP) to Adjusted income
from continuing operations (non-GAAP) for the three months and
years ended December 31, 2020 and
2019 (in thousands):
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Income (loss) from
continuing operations (GAAP)
|
$
|
141,247
|
|
|
$
|
(208,489)
|
|
|
$
|
247,464
|
|
|
$
|
(360,584)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
101,742
|
|
|
125,913
|
|
|
427,543
|
|
|
543,862
|
|
Upfront and
milestone-related payments (2)
|
32,606
|
|
|
2,568
|
|
|
35,075
|
|
|
6,623
|
|
Continuity and
separation benefits and other cost reductions (3)
|
25,926
|
|
|
19,426
|
|
|
126,282
|
|
|
34,598
|
|
Certain
litigation-related and other contingencies, net (4)
|
4,889
|
|
|
15,304
|
|
|
(19,049)
|
|
|
11,211
|
|
Certain legal costs
(5)
|
15,935
|
|
|
15,053
|
|
|
67,819
|
|
|
65,282
|
|
Asset impairment
charges (6)
|
14,147
|
|
|
267,430
|
|
|
120,344
|
|
|
526,082
|
|
Acquisition-related
and integration costs (7)
|
196
|
|
|
—
|
|
|
196
|
|
|
—
|
|
Fair value of
contingent consideration (8)
|
(747)
|
|
|
(19,115)
|
|
|
16,353
|
|
|
(46,098)
|
|
Gain on extinguishment
of debt (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,828)
|
|
Other (10)
|
3,727
|
|
|
(2,002)
|
|
|
17,164
|
|
|
28,252
|
|
Tax adjustments
(11)
|
(163,673)
|
|
|
(30,857)
|
|
|
(368,821)
|
|
|
(73,322)
|
|
Adjusted income from
continuing operations (non-GAAP)
|
$
|
175,995
|
|
|
$
|
185,231
|
|
|
$
|
670,370
|
|
|
$
|
616,078
|
|
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 months and years ended December 31, 2020 and 2019 (in thousands, except
per share data):
|
Three Months Ended
December 31, 2020
|
|
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
(benefit) expense
|
|
Effective tax
rate
|
|
Income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net
income
|
|
Diluted net income
per share from continuing operations (13)
|
Reported
(GAAP)
|
$
760,221
|
|
$
369,539
|
|
$
390,682
|
|
51.4 %
|
|
$
259,443
|
|
34.1 %
|
|
$
131,239
|
|
17.3 %
|
|
$ 139,458
|
|
$
(8,219)
|
|
$(149,466)
|
|
1,818.5 %
|
|
$
141,247
|
|
$
(21,904)
|
|
$
119,343
|
|
$
0.60
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(101,742)
|
|
101,742
|
|
|
|
-
|
|
|
|
101,742
|
|
|
|
-
|
|
101,742
|
|
-
|
|
|
|
101,742
|
|
-
|
|
101,742
|
|
|
Upfront and
milestone-related payments (2)
|
-
|
|
(925)
|
|
925
|
|
|
|
(31,681)
|
|
|
|
32,606
|
|
|
|
-
|
|
32,606
|
|
-
|
|
|
|
32,606
|
|
-
|
|
32,606
|
|
|
Continuity and
separation benefits and other cost reductions (3)
|
-
|
|
(11,721)
|
|
11,721
|
|
|
|
(14,205)
|
|
|
|
25,926
|
|
|
|
-
|
|
25,926
|
|
-
|
|
|
|
25,926
|
|
-
|
|
25,926
|
|
|
Certain
litigation-related and other contingencies, net (4)
|
-
|
|
-
|
|
-
|
|
|
|
(4,889)
|
|
|
|
4,889
|
|
|
|
-
|
|
4,889
|
|
-
|
|
|
|
4,889
|
|
-
|
|
4,889
|
|
|
Certain legal costs
(5)
|
-
|
|
-
|
|
-
|
|
|
|
(15,935)
|
|
|
|
15,935
|
|
|
|
-
|
|
15,935
|
|
-
|
|
|
|
15,935
|
|
-
|
|
15,935
|
|
|
Asset impairment
charges (6)
|
-
|
|
-
|
|
-
|
|
|
|
(14,147)
|
|
|
|
14,147
|
|
|
|
-
|
|
14,147
|
|
-
|
|
|
|
14,147
|
|
-
|
|
14,147
|
|
|
Acquisition-related
and integration costs (7)
|
-
|
|
-
|
|
-
|
|
|
|
(196)
|
|
|
|
196
|
|
|
|
-
|
|
196
|
|
-
|
|
|
|
196
|
|
-
|
|
196
|
|
|
Fair value of
contingent consideration (8)
|
-
|
|
-
|
|
-
|
|
|
|
747
|
|
|
|
(747)
|
|
|
|
-
|
|
(747)
|
|
-
|
|
|
|
(747)
|
|
-
|
|
(747)
|
|
|
Other (10)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,727)
|
|
3,727
|
|
-
|
|
|
|
3,727
|
|
-
|
|
3,727
|
|
|
Tax adjustments
(11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
163,673
|
|
|
|
(163,673)
|
|
-
|
|
(163,673)
|
|
|
Exclude discontinued
operations, net of tax (12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
21,904
|
|
21,904
|
|
|
After considering
items (non-GAAP)
|
$
760,221
|
|
$
255,151
|
|
$
505,070
|
|
66.4 %
|
|
$
179,137
|
|
23.6 %
|
|
$
325,933
|
|
42.9 %
|
|
$ 135,731
|
|
$
190,202
|
|
$
14,207
|
|
7.5 %
|
|
$
175,995
|
|
$
-
|
|
$
175,995
|
|
$
0.75
|
|
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 (13)
|
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 (2)
|
-
|
|
(542)
|
|
542
|
|
|
|
(2,026)
|
|
|
|
2,568
|
|
|
|
-
|
|
2,568
|
|
-
|
|
|
|
2,568
|
|
-
|
|
2,568
|
|
|
Continuity and
separation benefits and other cost reductions (3)
|
-
|
|
(4,689)
|
|
4,689
|
|
|
|
(14,737)
|
|
|
|
19,426
|
|
|
|
-
|
|
19,426
|
|
-
|
|
|
|
19,426
|
|
-
|
|
19,426
|
|
|
Certain
litigation-related and other contingencies, net (4)
|
-
|
|
-
|
|
-
|
|
|
|
(15,304)
|
|
|
|
15,304
|
|
|
|
-
|
|
15,304
|
|
-
|
|
|
|
15,304
|
|
-
|
|
15,304
|
|
|
Certain legal costs
(5)
|
-
|
|
-
|
|
-
|
|
|
|
(15,053)
|
|
|
|
15,053
|
|
|
|
-
|
|
15,053
|
|
-
|
|
|
|
15,053
|
|
-
|
|
15,053
|
|
|
Asset impairment
charges (6)
|
-
|
|
-
|
|
-
|
|
|
|
(267,430)
|
|
|
|
267,430
|
|
|
|
-
|
|
267,430
|
|
-
|
|
|
|
267,430
|
|
-
|
|
267,430
|
|
|
Fair value of
contingent consideration (8)
|
-
|
|
-
|
|
-
|
|
|
|
19,115
|
|
|
|
(19,115)
|
|
|
|
-
|
|
(19,115)
|
|
-
|
|
|
|
(19,115)
|
|
-
|
|
(19,115)
|
|
|
Other (10)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,002
|
|
(2,002)
|
|
-
|
|
|
|
(2,002)
|
|
-
|
|
(2,002)
|
|
|
Tax adjustments
(11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
30,857
|
|
|
|
(30,857)
|
|
-
|
|
(30,857)
|
|
|
Exclude discontinued
operations, net of tax (12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
10,154
|
|
10,154
|
|
|
After considering
items (non-GAAP)
|
$
764,800
|
|
$
268,912
|
|
$
495,888
|
|
64.8 %
|
|
$
163,234
|
|
21.3 %
|
|
$
332,654
|
|
43.5 %
|
|
$ 132,618
|
|
$
200,036
|
|
$
14,805
|
|
7.4 %
|
|
$
185,231
|
|
$
-
|
|
$
185,231
|
|
$
0.80
|
|
Year Ended
December 31, 2020
|
|
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
(benefit) expense
|
|
Effective tax
rate
|
|
Income from
continuing operations
|
|
Discontinued
operations, net of tax
|
|
Net
income
|
|
Diluted net income
per share from continuing operations (13)
|
Reported
(GAAP)
|
$2,903,074
|
|
$
1,442,511
|
|
$1,460,563
|
|
50.3 %
|
|
$
975,252
|
|
33.6 %
|
|
$
485,311
|
|
16.7 %
|
|
$ 511,829
|
|
$
(26,518)
|
|
$(273,982)
|
|
1,033.2 %
|
|
$
247,464
|
|
$
(63,520)
|
|
$
183,944
|
|
$
1.06
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
-
|
|
(427,543)
|
|
427,543
|
|
|
|
-
|
|
|
|
427,543
|
|
|
|
-
|
|
427,543
|
|
-
|
|
|
|
427,543
|
|
-
|
|
427,543
|
|
|
Upfront and
milestone-related payments (2)
|
-
|
|
(1,717)
|
|
1,717
|
|
|
|
(33,358)
|
|
|
|
35,075
|
|
|
|
-
|
|
35,075
|
|
-
|
|
|
|
35,075
|
|
-
|
|
35,075
|
|
|
Continuity and
separation benefits and other cost reductions (3)
|
-
|
|
(55,413)
|
|
55,413
|
|
|
|
(70,869)
|
|
|
|
126,282
|
|
|
|
-
|
|
126,282
|
|
-
|
|
|
|
126,282
|
|
-
|
|
126,282
|
|
|
Certain
litigation-related and other contingencies, net (4)
|
-
|
|
-
|
|
-
|
|
|
|
19,049
|
|
|
|
(19,049)
|
|
|
|
-
|
|
(19,049)
|
|
-
|
|
|
|
(19,049)
|
|
-
|
|
(19,049)
|
|
|
Certain legal costs
(5)
|
-
|
|
-
|
|
-
|
|
|
|
(67,819)
|
|
|
|
67,819
|
|
|
|
-
|
|
67,819
|
|
-
|
|
|
|
67,819
|
|
-
|
|
67,819
|
|
|
Asset impairment
charges (6)
|
-
|
|
-
|
|
-
|
|
|
|
(120,344)
|
|
|
|
120,344
|
|
|
|
-
|
|
120,344
|
|
-
|
|
|
|
120,344
|
|
-
|
|
120,344
|
|
|
Acquisition-related
and integration costs (7)
|
-
|
|
-
|
|
-
|
|
|
|
(196)
|
|
|
|
196
|
|
|
|
-
|
|
196
|
|
-
|
|
|
|
196
|
|
-
|
|
196
|
|
|
Fair value of
contingent consideration (8)
|
-
|
|
-
|
|
-
|
|
|
|
(16,353)
|
|
|
|
16,353
|
|
|
|
-
|
|
16,353
|
|
-
|
|
|
|
16,353
|
|
-
|
|
16,353
|
|
|
Other (10)
|
-
|
|
-
|
|
-
|
|
|
|
(31,118)
|
|
|
|
31,118
|
|
|
|
13,954
|
|
17,164
|
|
-
|
|
|
|
17,164
|
|
-
|
|
17,164
|
|
|
Tax adjustments
(11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
368,821
|
|
|
|
(368,821)
|
|
-
|
|
(368,821)
|
|
|
Exclude discontinued
operations, net of tax (12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
63,520
|
|
63,520
|
|
|
After considering
items (non-GAAP)
|
$2,903,074
|
|
$
957,838
|
|
$1,945,236
|
|
67.0 %
|
|
$
654,244
|
|
22.5 %
|
|
$1,290,992
|
|
44.5 %
|
|
$ 525,783
|
|
$
765,209
|
|
$
94,839
|
|
12.4 %
|
|
$
670,370
|
|
$
-
|
|
$
670,370
|
|
$
2.87
|
|
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 (13)
|
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 (2)
|
-
|
|
(2,484)
|
|
2,484
|
|
|
|
(4,139)
|
|
|
|
6,623
|
|
|
|
-
|
|
6,623
|
|
-
|
|
|
|
6,623
|
|
-
|
|
6,623
|
|
|
Continuity and
separation benefits and other cost reductions (3)
|
-
|
|
(5,693)
|
|
5,693
|
|
|
|
(28,905)
|
|
|
|
34,598
|
|
|
|
-
|
|
34,598
|
|
-
|
|
|
|
34,598
|
|
-
|
|
34,598
|
|
|
Certain
litigation-related and other contingencies, net (4)
|
-
|
|
-
|
|
-
|
|
|
|
(11,211)
|
|
|
|
11,211
|
|
|
|
-
|
|
11,211
|
|
-
|
|
|
|
11,211
|
|
-
|
|
11,211
|
|
|
Certain legal costs
(5)
|
-
|
|
-
|
|
-
|
|
|
|
(65,282)
|
|
|
|
65,282
|
|
|
|
-
|
|
65,282
|
|
-
|
|
|
|
65,282
|
|
-
|
|
65,282
|
|
|
Asset impairment
charges (6)
|
-
|
|
-
|
|
-
|
|
|
|
(526,082)
|
|
|
|
526,082
|
|
|
|
-
|
|
526,082
|
|
-
|
|
|
|
526,082
|
|
-
|
|
526,082
|
|
|
Fair value of
contingent consideration (8)
|
-
|
|
-
|
|
-
|
|
|
|
46,098
|
|
|
|
(46,098)
|
|
|
|
-
|
|
(46,098)
|
|
-
|
|
|
|
(46,098)
|
|
-
|
|
(46,098)
|
|
|
Gain on
extinguishment of debt (9)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
119,828
|
|
(119,828)
|
|
-
|
|
|
|
(119,828)
|
|
-
|
|
(119,828)
|
|
|
Other (10)
|
-
|
|
-
|
|
-
|
|
|
|
(13,878)
|
|
|
|
13,878
|
|
|
|
(14,374)
|
|
28,252
|
|
-
|
|
|
|
28,252
|
|
-
|
|
28,252
|
|
|
Tax adjustments
(11)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
73,322
|
|
|
|
(73,322)
|
|
-
|
|
(73,322)
|
|
|
Exclude discontinued
operations, net of tax (12)
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
62,052
|
|
62,052
|
|
|
After considering
items (non-GAAP)
|
$2,914,364
|
|
$
1,017,299
|
|
$1,897,065
|
|
65.1 %
|
|
$
650,948
|
|
22.3 %
|
|
$1,246,117
|
|
42.8 %
|
|
$ 541,037
|
|
$
705,080
|
|
$
89,002
|
|
12.6 %
|
|
$
616,078
|
|
$
-
|
|
$
616,078
|
|
$
2.66
|
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 months and years ended December
31, 2020 and 2019 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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Amortization of
intangible assets excluding fair value step-up from contingent
consideration
|
$
|
100,926
|
|
|
$
|
123,669
|
|
|
$
|
424,276
|
|
|
$
|
523,872
|
|
|
Amortization of
intangible assets related to fair value step-up from contingent
consideration
|
816
|
|
|
2,244
|
|
|
3,267
|
|
|
19,990
|
|
|
Total
|
$
|
101,742
|
|
|
$
|
125,913
|
|
|
$
|
427,543
|
|
|
$
|
543,862
|
|
|
|
(2)
|
Adjustments for
upfront and milestone-related payments to partners included the
following (in thousands):
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Sales-based
|
$
|
925
|
|
|
$
|
—
|
|
|
$
|
542
|
|
|
$
|
—
|
|
|
Development-based
|
—
|
|
|
31,681
|
|
|
—
|
|
|
2,026
|
|
|
Total
|
$
|
925
|
|
|
$
|
31,681
|
|
|
$
|
542
|
|
|
$
|
2,026
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Sales-based
|
$
|
1,717
|
|
|
$
|
—
|
|
|
$
|
2,484
|
|
|
$
|
—
|
|
|
Development-based
|
—
|
|
|
33,358
|
|
|
—
|
|
|
4,139
|
|
|
Total
|
$
|
1,717
|
|
|
$
|
33,358
|
|
|
$
|
2,484
|
|
|
$
|
4,139
|
|
|
|
|
The amounts included
in Development-based payments included a fourth-quarter 2020 charge
of $28.6 million related to in-process research and development
assets expensed in connection with the acquisition of
BioSpecifics.
|
|
|
(3)
|
Adjustments for
continuity and separation benefits and other cost reductions
included the following (in thousands):
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
|
3,585
|
|
|
$
|
7,451
|
|
|
$
|
4,689
|
|
|
$
|
9,997
|
|
|
Accelerated
depreciation charges
|
5,039
|
|
|
2,744
|
|
|
—
|
|
|
—
|
|
|
Other
|
3,097
|
|
|
4,010
|
|
|
—
|
|
|
4,740
|
|
|
Total
|
$
|
11,721
|
|
|
$
|
14,205
|
|
|
$
|
4,689
|
|
|
$
|
14,737
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
|
36,775
|
|
|
$
|
50,132
|
|
|
$
|
5,693
|
|
|
$
|
17,881
|
|
|
Accelerated
depreciation charges
|
15,567
|
|
|
6,892
|
|
|
—
|
|
|
—
|
|
|
Other
|
3,071
|
|
|
13,845
|
|
|
—
|
|
|
11,024
|
|
|
Total
|
$
|
55,413
|
|
|
$
|
70,869
|
|
|
$
|
5,693
|
|
|
$
|
28,905
|
|
|
|
|
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
during the three months and year ended December 31, 2020 include
severance and other restructuring charges related to the previously
announced 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
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Goodwill impairment
charges
|
$
|
—
|
|
|
$
|
20,800
|
|
|
$
|
32,786
|
|
|
$
|
171,908
|
|
|
Other intangible
asset impairment charges
|
14,146
|
|
|
243,046
|
|
|
79,917
|
|
|
347,706
|
|
|
Property, plant and
equipment impairment charges
|
1
|
|
|
3,584
|
|
|
1,249
|
|
|
6,468
|
|
|
Operating lease
right-of-use asset impairment charges
|
—
|
|
|
—
|
|
|
6,392
|
|
|
—
|
|
|
Total
|
$
|
14,147
|
|
|
$
|
267,430
|
|
|
$
|
120,344
|
|
|
$
|
526,082
|
|
|
|
(7)
|
To exclude
integration costs.
|
|
|
(8)
|
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 the Company could incur, related
contingent obligations.
|
|
|
(9)
|
To exclude the gain
on the extinguishment of debt associated with the Company's March
2019 refinancing.
|
|
|
(10)
|
The Other row
included in each of the above reconciliations of GAAP financial
measures to non-GAAP financial measures (except for the
reconciliations of Net income (loss) (GAAP) to Adjusted EBITDA
(non-GAAP)) includes the following (in thousands):
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact related to the re-measurement of intercompany debt
instruments
|
$
|
—
|
|
|
$
|
4,345
|
|
|
$
|
—
|
|
|
$
|
1,488
|
|
|
(Gain) loss on sale
of business and other assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,488)
|
|
|
Other
miscellaneous
|
—
|
|
|
(618)
|
|
|
—
|
|
|
1,998
|
|
|
Total
|
$
|
—
|
|
|
$
|
3,727
|
|
|
$
|
—
|
|
|
$
|
(2,002)
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact related to the re-measurement of intercompany debt
instruments
|
$
|
—
|
|
|
$
|
1,919
|
|
|
$
|
—
|
|
|
$
|
4,362
|
|
|
(Gain) loss on sale
of business and other assets
|
—
|
|
|
(11,325)
|
|
|
—
|
|
|
(7,488)
|
|
|
Debt modification
costs
|
31,118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
miscellaneous
|
—
|
|
|
(4,548)
|
|
|
13,878
|
|
|
17,500
|
|
|
Total
|
$
|
31,118
|
|
|
$
|
(13,954)
|
|
|
$
|
13,878
|
|
|
$
|
14,374
|
|
|
|
|
The Other row
included in the reconciliations of Net income (loss) (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 net
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
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
GAAP
|
234,474
|
|
|
226,787
|
|
|
233,653
|
|
|
226,050
|
|
|
Non-GAAP
Adjusted
|
234,474
|
|
|
231,571
|
|
|
233,653
|
|
|
231,706
|
|
|
|
(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 December 31, 2020 (in thousands) and the
calculation of the Company's Net Debt Leverage Ratio
(non-GAAP):
|
Twelve Months
Ended December
31, 2020
|
Net income
(GAAP)
|
$
|
183,944
|
|
Income tax
benefit
|
(273,982)
|
|
Interest expense,
net
|
532,939
|
|
Depreciation and
amortization (14)
|
496,349
|
|
EBITDA
(non-GAAP)
|
$
|
939,250
|
|
|
|
Upfront and
milestone-related payments
|
$
|
35,075
|
|
Continuity and
separation benefits and other cost reductions
|
126,282
|
|
Certain
litigation-related and other contingencies, net
|
(19,049)
|
|
Certain legal
costs
|
67,819
|
|
Asset impairment
charges
|
120,344
|
|
Acquisition-related
and integration costs
|
196
|
|
Fair value of
contingent consideration
|
16,353
|
|
Share-based
compensation (14)
|
36,167
|
|
Other income,
net
|
(21,110)
|
|
Other
|
31,095
|
|
Discontinued
operations, net of tax
|
63,520
|
|
Adjusted EBITDA
(non-GAAP)
|
$
|
1,395,942
|
|
|
|
Calculation of Net
Debt:
|
|
Debt
|
$
|
8,314,728
|
|
Cash (excluding
Restricted Cash)
|
1,213,437
|
|
Net Debt
(non-GAAP)
|
$
|
7,101,291
|
|
|
|
Calculation of Net
Debt Leverage:
|
|
Net Debt Leverage
Ratio (non-GAAP)
|
5.1
|
|
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 (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 Mr. Coleman, as
well as other statements regarding product development, market
potential, corporate strategy and optimization efforts, together
with Endo's net income per share from continuing operations
amounts, product net sales, revenue forecasts and other financial
guidance for the first-quarter and full-year 2021, the impact of
and response to the COVID-19 pandemic and any other statements that
refer to Endo's expected, estimated or anticipated future results.
Statements including words such as "believes," "expects,"
"anticipates," "intends," "estimates," "plan," "will," "may," "look
forward," "intend," "guidance," "future" or similar expressions are
forward-looking statements. Because 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 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 IRS and proceedings that involve or
may involve key products such as VASOSTRICT®; unfavorable publicity
regarding the misuse of opioids; the 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 (such as our
recently completed acquisition of BioSpecifics) 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 manufacture, maintain and
distribute 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, the impact of and response to the
ongoing COVID-19 pandemic and the 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 or other filings with the U.S. Securities and
Exchange Commission. 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.