DUBLIN, Aug. 9, 2022
/CNW/ -- Endo International plc (NASDAQ: ENDP) today reported
financial results for the second-quarter ended June 30,
2022.
SECOND-QUARTER FINANCIAL PERFORMANCE
(in thousands, except per share amounts)
|
Three Months Ended
June 30,
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
Total Revenues,
Net
|
$
569,114
|
|
$
713,830
|
|
(20) %
|
|
$ 1,221,373
|
|
$ 1,431,749
|
|
(15) %
|
|
Reported (Loss) Income
from
Continuing Operations
|
$
(1,880,883)
|
|
$
(10,184)
|
|
NM
|
|
$
(1,946,183)
|
|
$
36,875
|
|
NM
|
|
Reported Diluted
Weighted Average
Shares
|
235,117
|
|
233,331
|
|
1 %
|
|
234,498
|
|
237,043
|
|
(1) %
|
|
Reported Diluted Net
(Loss) Income
per Share from Continuing Operations
|
$
(8.00)
|
|
$
(0.04)
|
|
NM
|
|
$
(8.30)
|
|
$
0.16
|
|
NM
|
|
Reported Net (Loss)
Income
|
$
(1,885,427)
|
|
$
(15,500)
|
|
NM
|
|
$
(1,957,401)
|
|
$
26,024
|
|
NM
|
|
Adjusted Income from
Continuing
Operations (2)(3)
|
$
6,532
|
|
$
147,121
|
|
(96) %
|
|
$
162,471
|
|
$
322,038
|
|
(50) %
|
|
Adjusted Diluted
Weighted Average
Shares (1)(2)
|
236,217
|
|
235,416
|
|
— %
|
|
236,466
|
|
237,043
|
|
— %
|
|
Adjusted Diluted Net
Income per
Share from Continuing Operations
(2)(3)
|
$
0.03
|
|
$
0.62
|
|
(95) %
|
|
$
0.69
|
|
$
1.36
|
|
(49) %
|
|
Adjusted EBITDA
(2)(3)
|
$
160,206
|
|
$
337,700
|
|
(53) %
|
|
$
471,132
|
|
$
702,415
|
|
(33) %
|
__________
|
(1)
|
Reported Diluted Net
(Loss) Income per Share from Continuing Operations is computed
based on weighted average shares outstanding and, if there is
income from continuing operations during the period, the dilutive
impact of ordinary share equivalents outstanding during the period.
In the case of
Adjusted Diluted Weighted Average Shares, Adjusted Income from
Continuing Operations is used in determining whether to include
such dilutive impact.
|
|
(2)
|
The information
presented in the table above includes non-GAAP financial measures
such as Adjusted Income from Continuing Operations, Adjusted
Diluted Weighted Average Shares, Adjusted Diluted Net Income per
Share from Continuing Operations and Adjusted EBITDA. Refer to
the
"Supplemental Financial Information" section below for
reconciliations of certain non-GAAP financial measures to the most
directly comparable GAAP
financial measures.
|
|
(3)
|
Effective January 1,
2022, these non-GAAP financial measures now include acquired
in-process research and development charges which were
previously
excluded under our legacy non-GAAP policy. This change has been
applied retrospectively to all periods presented. Refer to note
(14) in the "Notes to the
Reconciliations of GAAP and Non-GAAP Financial Measures" section
below for additional discussion.
|
CONSOLIDATED RESULTS
Total revenues were $569 million
in second-quarter 2022, a decrease of 20% compared to $714 million in second-quarter 2021. This
decrease was primarily attributable to decreased revenues from our
Sterile Injectables segment, partially offset by increased revenues
from our Generic Pharmaceuticals segment.
Reported loss from continuing operations in second-quarter 2022
was $1,881 million compared to
$10 million in second-quarter 2021.
This result was primarily due to higher asset impairment charges as
well as decreased revenues and increased acquired in-process
research and development charges related to the transactions
announced during the quarter to acquire six sterile injectable
product candidates and a Phase 3 injectable compound for the
treatment of osteoarthritis knee pain. Reported diluted net loss
per share from continuing operations in second-quarter 2022 was
$8.00 compared to $0.04 in second-quarter 2021.
Adjusted income from continuing operations in second-quarter
2022 was $7 million compared to
$147 million in second-quarter 2021.
Adjusted diluted net income per share from continuing operations in
second-quarter 2022 was $0.03
compared to $0.62 in second-quarter
2021. These results reflect decreased revenues and increased
acquired in-process research and development charges.
BRANDED PHARMACEUTICALS SEGMENT
Second-quarter 2022 Branded Pharmaceuticals segment revenues
were $219 million, a decrease of 4%
compared to $228 million during
second-quarter 2021.
Specialty Products revenues decreased 2% to $164 million in second-quarter 2022 compared to
$167 million in second-quarter 2021, with sales of
XIAFLEX® increasing 8% to $121 million compared to
$111 million in second-quarter 2021. Established Products
revenues decreased 10% to $55 million in second-quarter 2022
compared to $61 million in second-quarter 2021, driven
primarily by ongoing generic competition.
STERILE INJECTABLES SEGMENT
Second-quarter 2022 Sterile Injectables segment revenues were
$123 million, a decrease of 58% compared to $295 million
during second-quarter 2021. This was primarily attributable to
decreased VASOSTRICT® revenues due to lower price and
market share resulting from generic competition, channel inventory
destocking and lower overall market volumes as COVID-19 related
hospitalizations decline.
GENERIC PHARMACEUTICALS SEGMENT
Second-quarter 2022 Generic Pharmaceuticals segment revenues
were $203 million, an increase of 22% compared to
$167 million during second-quarter 2021. This increase was
primarily attributable to revenues from varenicline tablets, the
only FDA-approved generic version of Chantix®, which
launched during third-quarter 2021, partially offset by competitive
pressure on certain other generic products.
INTERNATIONAL PHARMACEUTICALS SEGMENT
Second-quarter 2022 International Pharmaceuticals segment
revenues were $24 million compared to $24 million during
second-quarter 2021.
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES
As of June 30, 2022, the Company had approximately
$1.2 billion in unrestricted cash;
$8.1 billion of debt; and a net debt
to adjusted EBITDA ratio of 5.6. These amounts reflect the
Company's payment of $35 million to
acquire 6 sterile injectable product candidates and a $30 million upfront payment related to a Phase 3
injectable compound for the treatment of osteoarthritis knee
pain.
Second-quarter 2022 net cash used in operating activities was
$133 million compared to $155 million provided by operating activities
during the second-quarter 2021. This change was primarily
attributable to decreased revenues.
The Company remains in constructive negotiations with an ad hoc
group of first lien creditors, among other parties. In light of the
progress to date, the Company expects that these negotiations will
likely result in a pre-arranged filing under Chapter 11 of the U.S.
Bankruptcy Code by Endo International plc and substantially all of
its subsidiaries, which could occur imminently.
Chantix® is a registered trademark of Pfizer Inc.
FINANCIAL SCHEDULES
The following table presents Endo's unaudited Total revenues,
net for the three and six months ended June
30, 2022 and 2021 (dollars in thousands):
|
Three Months Ended
June 30,
|
|
Percent
Growth
|
|
Six Months Ended
June 30,
|
|
Percent
Growth
|
|
2022
|
|
2021
|
|
|
2022
|
|
2021
|
|
|
Branded
Pharmaceuticals:
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
XIAFLEX®
|
$
120,878
|
|
$
111,487
|
|
8 %
|
|
$
220,362
|
|
$
206,757
|
|
7 %
|
|
SUPPRELIN®
LA
|
24,739
|
|
27,568
|
|
(10) %
|
|
53,569
|
|
55,596
|
|
(4) %
|
|
Other Specialty
(1)
|
18,246
|
|
28,036
|
|
(35) %
|
|
38,990
|
|
48,068
|
|
(19) %
|
|
Total Specialty
Products
|
$
163,863
|
|
$
167,091
|
|
(2) %
|
|
$
312,921
|
|
$
310,421
|
|
1 %
|
|
Established
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCOCET®
|
$
26,256
|
|
$
26,156
|
|
— %
|
|
$
52,431
|
|
$
51,781
|
|
1 %
|
|
TESTOPEL®
|
10,021
|
|
9,439
|
|
6 %
|
|
18,901
|
|
20,628
|
|
(8) %
|
|
Other
Established (2)
|
18,812
|
|
25,354
|
|
(26) %
|
|
39,560
|
|
51,845
|
|
(24) %
|
|
Total Established
Products
|
$
55,089
|
|
$
60,949
|
|
(10) %
|
|
$
110,892
|
|
$
124,254
|
|
(11) %
|
|
Total Branded
Pharmaceuticals (3)
|
$
218,952
|
|
$
228,040
|
|
(4) %
|
|
$
423,813
|
|
$
434,675
|
|
(2) %
|
|
Sterile
Injectables:
|
|
|
|
|
|
|
|
|
|
|
|
|
VASOSTRICT®
|
$
35,630
|
|
$
197,121
|
|
(82) %
|
|
$
191,520
|
|
$
421,067
|
|
(55) %
|
|
ADRENALIN®
|
26,774
|
|
29,977
|
|
(11) %
|
|
60,597
|
|
59,414
|
|
2 %
|
|
Other Sterile
Injectables (4)
|
60,767
|
|
67,502
|
|
(10) %
|
|
111,082
|
|
122,864
|
|
(10) %
|
|
Total Sterile
Injectables (3)
|
$
123,171
|
|
$
294,600
|
|
(58) %
|
|
$
363,199
|
|
$
603,345
|
|
(40) %
|
|
Total Generic
Pharmaceuticals (5)
|
$
203,377
|
|
$
167,272
|
|
22 %
|
|
$
389,321
|
|
$
348,145
|
|
12 %
|
|
Total International
Pharmaceuticals
(6)
|
$
23,614
|
|
$
23,918
|
|
(1) %
|
|
$
45,040
|
|
$
45,584
|
|
(1) %
|
|
Total revenues,
net
|
$
569,114
|
|
$
713,830
|
|
(20) %
|
|
$ 1,221,373
|
|
$ 1,431,749
|
|
(15) %
|
__________
|
(1)
|
Products included
within Other Specialty include NASCOBAL® Nasal Spray,
AVEED® and QWO®.
|
|
(2)
|
Products included
within Other Established include, but are not limited to,
EDEX®.
|
|
(3)
|
Individual products
presented above represent the top two performing products in each
product category for either the three or six months ended June
30,
2022 and/or any product having revenues in excess of $25 million
during any completed quarterly period in 2022 or 2021.
|
|
(4)
|
Products included
within Other Sterile Injectables include ertapenem for injection,
APLISOL® and others.
|
|
(5)
|
The Generic
Pharmaceuticals segment is comprised of a portfolio of products
that are generic versions of branded products, are distributed
primarily
through the same wholesalers, generally have no intellectual
property protection and are sold within the U.S. During the three
and six months ended June
30, 2022, varenicline tablets (our generic version of Pfizer Inc.'s
Chantix®), which launched in September 2021, made up 13%
and 12%, respectively, of
consolidated total revenues. No other individual product within
this segment has exceeded 5% of consolidated total revenues for the
periods presented.
|
|
(6)
|
The International
Pharmaceuticals segment, which accounted for less than 5% of
consolidated total revenues for each of the periods presented,
includes a
variety of specialty pharmaceutical products sold outside the U.S.,
primarily in Canada through our operating company Paladin Labs
Inc.
|
The following table presents unaudited Condensed Consolidated
Statement of Operations data for the three and six months ended
June 30, 2022 and 2021 (in thousands,
except per share data):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
TOTAL REVENUES,
NET
|
$
569,114
|
|
$
713,830
|
|
$ 1,221,373
|
|
$ 1,431,749
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
263,786
|
|
318,480
|
|
537,001
|
|
623,773
|
|
Selling, general and
administrative
|
180,830
|
|
177,619
|
|
407,991
|
|
364,793
|
|
Research and
development
|
29,788
|
|
29,669
|
|
65,918
|
|
59,408
|
|
Acquired in-process
research and development
|
65,000
|
|
5,000
|
|
67,900
|
|
5,000
|
|
Litigation-related and
other contingencies, net
|
208
|
|
35,195
|
|
25,362
|
|
35,832
|
|
Asset impairment
charges
|
1,781,063
|
|
4,929
|
|
1,801,016
|
|
8,238
|
|
Acquisition-related
and integration items, net
|
1,825
|
|
97
|
|
448
|
|
(4,925)
|
|
Interest expense,
net
|
139,784
|
|
141,553
|
|
274,733
|
|
275,894
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
13,753
|
|
Other (income)
expense, net
|
(19,438)
|
|
372
|
|
(18,149)
|
|
1,284
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
BEFORE INCOME TAX
|
$
(1,873,732)
|
|
$
916
|
|
$
(1,940,847)
|
|
$
48,699
|
|
INCOME TAX
EXPENSE
|
7,151
|
|
11,100
|
|
5,336
|
|
11,824
|
|
(LOSS) INCOME FROM
CONTINUING OPERATIONS
|
$
(1,880,883)
|
|
$
(10,184)
|
|
$
(1,946,183)
|
|
$
36,875
|
|
DISCONTINUED
OPERATIONS, NET OF TAX
|
(4,544)
|
|
(5,316)
|
|
(11,218)
|
|
(10,851)
|
|
NET (LOSS)
INCOME
|
$
(1,885,427)
|
|
$
(15,500)
|
|
$
(1,957,401)
|
|
$
26,024
|
|
NET (LOSS) INCOME PER
SHARE—BASIC:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(8.00)
|
|
$
(0.04)
|
|
$
(8.30)
|
|
$
0.16
|
|
Discontinued
operations
|
(0.02)
|
|
(0.03)
|
|
(0.05)
|
|
(0.05)
|
|
Basic
|
$
(8.02)
|
|
$
(0.07)
|
|
$
(8.35)
|
|
$
0.11
|
|
NET (LOSS) INCOME PER
SHARE—DILUTED:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(8.00)
|
|
$
(0.04)
|
|
$
(8.30)
|
|
$
0.16
|
|
Discontinued
operations
|
(0.02)
|
|
(0.03)
|
|
(0.05)
|
|
(0.05)
|
|
Diluted
|
$
(8.02)
|
|
$
(0.07)
|
|
$
(8.35)
|
|
$
0.11
|
|
WEIGHTED AVERAGE
SHARES:
|
|
|
|
|
|
|
|
|
Basic
|
235,117
|
|
233,331
|
|
234,498
|
|
231,941
|
|
Diluted
|
235,117
|
|
233,331
|
|
234,498
|
|
237,043
|
The following table presents unaudited Condensed Consolidated
Balance Sheet data at June 30, 2022 and December 31, 2021
(in thousands):
|
June 30,
2022
|
|
December 31,
2021
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$ 1,191,572
|
|
$ 1,507,196
|
|
Restricted cash and
cash equivalents
|
113,493
|
|
124,114
|
|
Accounts
receivable
|
491,492
|
|
592,019
|
|
Inventories,
net
|
287,756
|
|
283,552
|
|
Assets held for
sale
|
11,080
|
|
—
|
|
Other current
assets
|
104,511
|
|
207,705
|
|
Total current
assets
|
$ 2,199,904
|
|
$ 2,714,586
|
|
TOTAL NON-CURRENT
ASSETS
|
4,162,358
|
|
6,052,829
|
|
TOTAL ASSETS
|
$ 6,362,262
|
|
$ 8,767,415
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts payable and
accrued expenses, including legal settlement accruals
|
$ 1,140,654
|
|
$ 1,417,892
|
|
Other current
liabilities
|
41,018
|
|
212,070
|
|
Total current
liabilities
|
$ 1,181,672
|
|
$ 1,629,962
|
|
LONG-TERM DEBT, LESS
CURRENT PORTION, NET
|
8,039,178
|
|
8,048,980
|
|
OTHER
LIABILITIES
|
339,484
|
|
332,459
|
|
SHAREHOLDERS'
DEFICIT
|
(3,198,072)
|
|
(1,243,986)
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
$ 6,362,262
|
|
$ 8,767,415
|
The following table presents unaudited Condensed Consolidated
Statement of Cash Flow data for the six months ended June 30, 2022 and 2021 (in thousands):
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net (loss)
income
|
$
(1,957,401)
|
|
$
26,024
|
|
Adjustments to
reconcile Net (loss) income to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
206,224
|
|
237,703
|
|
Asset impairment
charges
|
1,801,016
|
|
8,238
|
|
Other, including cash
payments to claimants from Qualified Settlement Funds
|
18,064
|
|
126,851
|
|
Net cash provided by
operating activities
|
$
67,903
|
|
$
398,816
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital expenditures,
excluding capitalized interest
|
$
(47,559)
|
|
$
(41,345)
|
|
Acquisitions,
including in-process research and development, net of cash and
restricted
cash acquired
|
(89,520)
|
|
—
|
|
Proceeds from sale of
business and other assets, net
|
21,133
|
|
1,343
|
|
Other
|
4,200
|
|
(5,048)
|
|
Net cash used in
investing activities
|
$
(111,746)
|
|
$
(45,050)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Payments on
borrowings, net
|
$
(193,312)
|
|
$
(43,166)
|
|
Other
|
(3,638)
|
|
(22,581)
|
|
Net cash used in
financing activities
|
$
(196,950)
|
|
$
(65,747)
|
|
Effect of foreign
exchange rate
|
(452)
|
|
711
|
|
NET (DECREASE) INCREASE
IN CASH, CASH EQUIVALENTS, RESTRICTED CASH
AND RESTRICTED CASH EQUIVALENTS
|
$
(241,245)
|
|
$
288,730
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
1,631,310
|
|
1,385,000
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, END OF PERIOD
|
$ 1,390,065
|
|
$ 1,673,730
|
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.
As previously communicated, in response to views expressed by
the U.S. Securities and Exchange Commission, the Company has,
effective January 1, 2022, revised
its definition of its adjusted financial measures to no longer
exclude Acquired in-process research and development charges
(representing the research and development costs it had previously
labeled as "Upfront and milestone payments to partners"). As a
result of this change, the Company's adjusted financial measures
now reflect the impact of those transactions. The inclusion of the
impact of these transactions, which may occur from time to time,
could result in significant, but temporary, fluctuations in both
our GAAP and Non-GAAP financial measures in the period(s) in which
they are incurred. These charges also are not indicative of the
underlying performance of our operations during the period. This
change was applied retrospectively to all periods presented herein.
Refer to footnote (14) in the "Notes to the Reconciliations of GAAP
and Non-GAAP Financial Measures" section below for additional
discussion.
Reconciliation of EBITDA and Adjusted EBITDA
(non-GAAP)
The following table provides a reconciliation of Net (loss)
income (GAAP) to Adjusted EBITDA (non-GAAP) for the three and six
months ended June 30, 2022 and 2021
(in thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net (loss) income
(GAAP)
|
$
(1,885,427)
|
|
$
(15,500)
|
|
$
(1,957,401)
|
|
$
26,024
|
|
Income tax
expense
|
7,151
|
|
11,100
|
|
5,336
|
|
11,824
|
|
Interest expense,
net
|
139,784
|
|
141,553
|
|
274,733
|
|
275,894
|
|
Depreciation and
amortization (1)
|
99,762
|
|
110,145
|
|
202,400
|
|
221,724
|
|
EBITDA
(non-GAAP)
|
$
(1,638,730)
|
|
$
247,298
|
|
$
(1,474,932)
|
|
$
535,466
|
|
Amounts related to
continuity and separation benefits,
cost reductions and strategic review initiatives (2)
|
37,347
|
|
15,083
|
|
94,996
|
|
38,803
|
|
Certain
litigation-related and other contingencies, net (3)
|
208
|
|
35,195
|
|
25,362
|
|
35,832
|
|
Certain legal costs
(4)
|
(9,462)
|
|
24,843
|
|
23,270
|
|
44,119
|
|
Asset impairment
charges (5)
|
1,781,063
|
|
4,929
|
|
1,801,016
|
|
8,238
|
|
Acquisition-related and
integration costs (6)
|
—
|
|
(20)
|
|
—
|
|
411
|
|
Fair value of
contingent consideration (7)
|
1,825
|
|
117
|
|
448
|
|
(5,336)
|
|
Loss on extinguishment
of debt (8)
|
—
|
|
—
|
|
—
|
|
13,753
|
|
Share-based
compensation (1)
|
2,721
|
|
4,444
|
|
7,650
|
|
14,437
|
|
Other (income) expense,
net (9)
|
(19,438)
|
|
372
|
|
(18,149)
|
|
1,284
|
|
Other (10)
|
128
|
|
123
|
|
253
|
|
4,557
|
|
Discontinued
operations, net of tax (11)
|
4,544
|
|
5,316
|
|
11,218
|
|
10,851
|
|
Adjusted EBITDA
(non-GAAP) (14)
|
$
160,206
|
|
$
337,700
|
|
$
471,132
|
|
$
702,415
|
Reconciliation of Adjusted Income from Continuing Operations
(non-GAAP)
The following table provides a reconciliation of the Company's
(Loss) income from continuing operations (GAAP) to Adjusted income
from continuing operations (non-GAAP) for the three and six months
ended June 30, 2022 and 2021 (in
thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
(Loss) income from
continuing operations (GAAP)
|
$
(1,880,883)
|
|
$
(10,184)
|
|
$
(1,946,183)
|
|
$
36,875
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets (12)
|
87,568
|
|
94,070
|
|
177,802
|
|
189,200
|
|
Amounts related to
continuity and separation benefits,
cost reductions and strategic review initiatives (2)
|
37,347
|
|
15,083
|
|
94,996
|
|
38,803
|
|
Certain
litigation-related and other contingencies, net
(3)
|
208
|
|
35,195
|
|
25,362
|
|
35,832
|
|
Certain legal costs
(4)
|
(9,462)
|
|
24,843
|
|
23,270
|
|
44,119
|
|
Asset impairment
charges (5)
|
1,781,063
|
|
4,929
|
|
1,801,016
|
|
8,238
|
|
Acquisition-related
and integration costs (6)
|
—
|
|
(20)
|
|
—
|
|
411
|
|
Fair value of
contingent consideration (7)
|
1,825
|
|
117
|
|
448
|
|
(5,336)
|
|
Loss on extinguishment
of debt (8)
|
—
|
|
—
|
|
—
|
|
13,753
|
|
Other (10)
|
(19,170)
|
|
1,480
|
|
(17,847)
|
|
7,062
|
|
Tax adjustments
(13)
|
8,036
|
|
(18,392)
|
|
3,607
|
|
(46,919)
|
|
Adjusted income from
continuing operations (non-GAAP)
(14)
|
$
6,532
|
|
$
147,121
|
|
$
162,471
|
|
$
322,038
|
Reconciliation of Other Adjusted Income Statement Data
(non-GAAP)
The following tables provide detailed reconciliations of various
other income statement data between the GAAP and non-GAAP amounts
for the three and six months ended June 30,
2022 and 2021 (in thousands, except per share data):
|
Three Months Ended
June 30, 2022
|
|
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
(benefit)
|
|
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
(15)
|
|
Reported
(GAAP)
|
$
569,114
|
|
$
263,786
|
|
$
305,328
|
|
53.6 %
|
|
$
2,058,714
|
|
361.7 %
|
|
$
(1,753,386)
|
|
(308.1) %
|
|
$
120,346
|
|
$
(1,873,732)
|
|
$ 7,151
|
|
(0.4) %
|
|
$
(1,880,883)
|
|
$
(4,544)
|
|
$
(1,885,427)
|
|
$ (8.00)
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible
assets (12)
|
—
|
|
(87,568)
|
|
87,568
|
|
|
|
—
|
|
|
|
87,568
|
|
|
|
—
|
|
87,568
|
|
—
|
|
|
|
87,568
|
|
—
|
|
87,568
|
|
|
|
Amounts related to
continuity
and separation benefits, cost
reductions and strategic
review initiatives (2)
|
—
|
|
(5,107)
|
|
5,107
|
|
|
|
(32,240)
|
|
|
|
37,347
|
|
|
|
—
|
|
37,347
|
|
—
|
|
|
|
37,347
|
|
—
|
|
37,347
|
|
|
|
Certain
litigation-related and
other contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(208)
|
|
|
|
208
|
|
|
|
—
|
|
208
|
|
—
|
|
|
|
208
|
|
—
|
|
208
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
9,462
|
|
|
|
(9,462)
|
|
|
|
—
|
|
(9,462)
|
|
—
|
|
|
|
(9,462)
|
|
—
|
|
(9,462)
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(1,781,063)
|
|
|
|
1,781,063
|
|
|
|
—
|
|
1,781,063
|
|
—
|
|
|
|
1,781,063
|
|
—
|
|
1,781,063
|
|
|
|
Fair value of
contingent
consideration (7)
|
—
|
|
—
|
|
—
|
|
|
|
(1,825)
|
|
|
|
1,825
|
|
|
|
—
|
|
1,825
|
|
—
|
|
|
|
1,825
|
|
—
|
|
1,825
|
|
|
|
Other (10)
|
—
|
|
(125)
|
|
125
|
|
|
|
—
|
|
|
|
125
|
|
|
|
19,295
|
|
(19,170)
|
|
—
|
|
|
|
(19,170)
|
|
—
|
|
(19,170)
|
|
|
|
Tax adjustments
(13)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(8,036)
|
|
|
|
8,036
|
|
—
|
|
8,036
|
|
|
|
Discontinued
operations, net
of tax (11)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
4,544
|
|
4,544
|
|
|
|
After considering items
(non-
GAAP) (14)
|
$
569,114
|
|
$
170,986
|
|
$
398,128
|
|
70.0 %
|
|
$
252,840
|
|
44.4 %
|
|
$
145,288
|
|
25.5 %
|
|
$
139,641
|
|
$ 5,647
|
|
$
(885)
|
|
(15.7) %
|
|
$ 6,532
|
|
$
—
|
|
$ 6,532
|
|
$ 0.03
|
|
Three Months Ended
June 30, 2021
|
|
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
|
|
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
(15)
|
|
Reported
(GAAP)
|
$
713,830
|
|
$
318,480
|
|
$
395,350
|
|
55.4 %
|
|
$
252,509
|
|
35.4 %
|
|
$
142,841
|
|
20.0 %
|
|
$
141,925
|
|
$
916
|
|
$
11,100
|
|
1,211.8 %
|
|
$
(10,184)
|
|
$
(5,316)
|
|
$
(15,500)
|
|
$ (0.04)
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible
assets (12)
|
—
|
|
(94,070)
|
|
94,070
|
|
|
|
—
|
|
|
|
94,070
|
|
|
|
—
|
|
94,070
|
|
—
|
|
|
|
94,070
|
|
—
|
|
94,070
|
|
|
|
Amounts related to
continuity
and separation benefits, cost
reductions and strategic
review initiatives (2)
|
—
|
|
(4,970)
|
|
4,970
|
|
|
|
(10,113)
|
|
|
|
15,083
|
|
|
|
—
|
|
15,083
|
|
—
|
|
|
|
15,083
|
|
—
|
|
15,083
|
|
|
|
Certain
litigation-related and
other contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(35,195)
|
|
|
|
35,195
|
|
|
|
—
|
|
35,195
|
|
—
|
|
|
|
35,195
|
|
—
|
|
35,195
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(24,843)
|
|
|
|
24,843
|
|
|
|
—
|
|
24,843
|
|
—
|
|
|
|
24,843
|
|
—
|
|
24,843
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(4,929)
|
|
|
|
4,929
|
|
|
|
—
|
|
4,929
|
|
—
|
|
|
|
4,929
|
|
—
|
|
4,929
|
|
|
|
Acquisition-related
and
integration costs (6)
|
—
|
|
—
|
|
—
|
|
|
|
20
|
|
|
|
(20)
|
|
|
|
—
|
|
(20)
|
|
—
|
|
|
|
(20)
|
|
—
|
|
(20)
|
|
|
|
Fair value of
contingent
consideration (7)
|
—
|
|
—
|
|
—
|
|
|
|
(117)
|
|
|
|
117
|
|
|
|
—
|
|
117
|
|
—
|
|
|
|
117
|
|
—
|
|
117
|
|
|
|
Other (10)
|
—
|
|
(125)
|
|
125
|
|
|
|
—
|
|
|
|
125
|
|
|
|
(1,355)
|
|
1,480
|
|
—
|
|
|
|
1,480
|
|
—
|
|
1,480
|
|
|
|
Tax adjustments
(13)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
18,392
|
|
|
|
(18,392)
|
|
—
|
|
(18,392)
|
|
|
|
Discontinued
operations, net
of tax (11)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
5,316
|
|
5,316
|
|
|
|
After considering items
(non-
GAAP) (14)
|
$
713,830
|
|
$
219,315
|
|
$
494,515
|
|
69.3 %
|
|
$
177,332
|
|
24.8 %
|
|
$
317,183
|
|
44.4 %
|
|
$
140,570
|
|
$
176,613
|
|
$
29,492
|
|
16.7 %
|
|
$
147,121
|
|
$
—
|
|
$
147,121
|
|
$ 0.62
|
|
Six Months Ended
June 30, 2022
|
|
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
(15)
|
|
Reported
(GAAP)
|
$
1,221,373
|
|
$
537,001
|
|
$
684,372
|
|
56.0 %
|
|
$
2,368,635
|
|
193.9 %
|
|
$
(1,684,263)
|
|
(137.9) %
|
|
$
256,584
|
|
$
(1,940,847)
|
|
$ 5,336
|
|
(0.3) %
|
|
$
(1,946,183)
|
|
$ (11,218)
|
|
$
(1,957,401)
|
|
$ (8.30)
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible
assets (12)
|
—
|
|
(177,802)
|
|
177,802
|
|
|
|
—
|
|
|
|
177,802
|
|
|
|
—
|
|
177,802
|
|
—
|
|
|
|
177,802
|
|
—
|
|
177,802
|
|
|
|
Amounts related to
continuity
and separation benefits, cost
reductions and strategic
review initiatives (2)
|
—
|
|
(20,844)
|
|
20,844
|
|
|
|
(74,152)
|
|
|
|
94,996
|
|
|
|
—
|
|
94,996
|
|
—
|
|
|
|
94,996
|
|
—
|
|
94,996
|
|
|
|
Certain
litigation-related and
other contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(25,362)
|
|
|
|
25,362
|
|
|
|
—
|
|
25,362
|
|
—
|
|
|
|
25,362
|
|
—
|
|
25,362
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(23,270)
|
|
|
|
23,270
|
|
|
|
—
|
|
23,270
|
|
—
|
|
|
|
23,270
|
|
—
|
|
23,270
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(1,801,016)
|
|
|
|
1,801,016
|
|
|
|
—
|
|
1,801,016
|
|
—
|
|
|
|
1,801,016
|
|
—
|
|
1,801,016
|
|
|
|
Fair value of
contingent
consideration (7)
|
—
|
|
—
|
|
—
|
|
|
|
(448)
|
|
|
|
448
|
|
|
|
—
|
|
448
|
|
—
|
|
|
|
448
|
|
—
|
|
448
|
|
|
|
Other (10)
|
—
|
|
(250)
|
|
250
|
|
|
|
—
|
|
|
|
250
|
|
|
|
18,097
|
|
(17,847)
|
|
—
|
|
|
|
(17,847)
|
|
—
|
|
(17,847)
|
|
|
|
Tax adjustments
(13)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
(3,607)
|
|
|
|
3,607
|
|
—
|
|
3,607
|
|
|
|
Discontinued
operations, net
of tax (11)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
11,218
|
|
11,218
|
|
|
|
After considering items
(non-
GAAP) (14)
|
$
1,221,373
|
|
$
338,105
|
|
$
883,268
|
|
72.3 %
|
|
$
444,387
|
|
36.4 %
|
|
$
438,881
|
|
35.9 %
|
|
$
274,681
|
|
$
164,200
|
|
$ 1,729
|
|
1.1 %
|
|
$
162,471
|
|
$
—
|
|
$
162,471
|
|
$ 0.69
|
|
Six Months Ended
June 30, 2021
|
|
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
|
|
Income
from
continuing
operations
before
income tax
|
|
Income tax
expense
|
|
Effective
tax rate
|
|
Income
from
continuing
operations
|
|
Discontinued
operations,
net of tax
|
|
Net income
|
|
Diluted net
income per
share from
continuing
operations
(15)
|
|
Reported
(GAAP)
|
$
1,431,749
|
|
$
623,773
|
|
$
807,976
|
|
56.4 %
|
|
$
468,346
|
|
32.7 %
|
|
$
339,630
|
|
23.7 %
|
|
$
290,931
|
|
$
48,699
|
|
$
11,824
|
|
24.3 %
|
|
$
36,875
|
|
$ (10,851)
|
|
$
26,024
|
|
$ 0.16
|
|
Items impacting
comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible
assets (12)
|
—
|
|
(189,200)
|
|
189,200
|
|
|
|
—
|
|
|
|
189,200
|
|
|
|
—
|
|
189,200
|
|
—
|
|
|
|
189,200
|
|
—
|
|
189,200
|
|
|
|
Amounts related to
continuity
and separation benefits, cost
reductions and strategic
review initiatives (2)
|
—
|
|
(20,266)
|
|
20,266
|
|
|
|
(18,537)
|
|
|
|
38,803
|
|
|
|
—
|
|
38,803
|
|
—
|
|
|
|
38,803
|
|
—
|
|
38,803
|
|
|
|
Certain
litigation-related and
other contingencies, net (3)
|
—
|
|
—
|
|
—
|
|
|
|
(35,832)
|
|
|
|
35,832
|
|
|
|
—
|
|
35,832
|
|
—
|
|
|
|
35,832
|
|
—
|
|
35,832
|
|
|
|
Certain legal costs
(4)
|
—
|
|
—
|
|
—
|
|
|
|
(44,119)
|
|
|
|
44,119
|
|
|
|
—
|
|
44,119
|
|
—
|
|
|
|
44,119
|
|
—
|
|
44,119
|
|
|
|
Asset impairment
charges (5)
|
—
|
|
—
|
|
—
|
|
|
|
(8,238)
|
|
|
|
8,238
|
|
|
|
—
|
|
8,238
|
|
—
|
|
|
|
8,238
|
|
—
|
|
8,238
|
|
|
|
Acquisition-related
and
integration costs (6)
|
—
|
|
—
|
|
—
|
|
|
|
(411)
|
|
|
|
411
|
|
|
|
—
|
|
411
|
|
—
|
|
|
|
411
|
|
—
|
|
411
|
|
|
|
Fair value of
contingent
consideration (7)
|
—
|
|
—
|
|
—
|
|
|
|
5,336
|
|
|
|
(5,336)
|
|
|
|
—
|
|
(5,336)
|
|
—
|
|
|
|
(5,336)
|
|
—
|
|
(5,336)
|
|
|
|
Loss on extinguishment
of
debt (8)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,753)
|
|
13,753
|
|
—
|
|
|
|
13,753
|
|
—
|
|
13,753
|
|
|
|
Other (10)
|
—
|
|
(651)
|
|
651
|
|
|
|
(3,909)
|
|
|
|
4,560
|
|
|
|
(2,502)
|
|
7,062
|
|
—
|
|
|
|
7,062
|
|
—
|
|
7,062
|
|
|
|
Tax adjustments
(13)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
46,919
|
|
|
|
(46,919)
|
|
—
|
|
(46,919)
|
|
|
|
Discontinued
operations, net
of tax (11)
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
10,851
|
|
10,851
|
|
|
|
After considering items
(non-
GAAP) (14)
|
$
1,431,749
|
|
$
413,656
|
|
$
1,018,093
|
|
71.1 %
|
|
$
362,636
|
|
25.3 %
|
|
$
655,457
|
|
45.8 %
|
|
$
274,676
|
|
$
380,781
|
|
$
58,743
|
|
15.4 %
|
|
$
322,038
|
|
$
—
|
|
$
322,038
|
|
$ 1.36
|
Notes to the Reconciliations of GAAP and Non-GAAP Financial
Measures
Notes to certain line items included in the reconciliations of
the GAAP financial measures to the non-GAAP financial measures for
the three and six months ended June 30,
2022 and 2021 are as follows:
|
(1)
|
Depreciation and
amortization and Share-based compensation amounts per the Adjusted
EBITDA reconciliations do not include
amounts reflected in other lines of the reconciliations, including
Amounts related to continuity and separation benefits, cost
reductions
and strategic review initiatives.
|
|
|
|
(2)
|
Adjustments for amounts
related to continuity and separation benefits, cost reductions and
strategic review initiatives included the
following (in thousands):
|
|
Three Months Ended
June 30,
|
|
2022
|
|
2021
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
4,846
|
|
$
6,898
|
|
$
(2,913)
|
|
$
4,485
|
|
Accelerated
depreciation
|
—
|
|
147
|
|
7,140
|
|
1,932
|
|
Other, including
strategic review initiatives
|
261
|
|
25,195
|
|
743
|
|
3,696
|
|
Total
|
$
5,107
|
|
$
32,240
|
|
$
4,970
|
|
$
10,113
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Continuity and
separation benefits
|
$
10,098
|
|
$
33,973
|
|
$
2,279
|
|
$
7,837
|
|
Accelerated
depreciation
|
2,164
|
|
1,660
|
|
12,194
|
|
3,785
|
|
Other, including
strategic review initiatives
|
8,582
|
|
38,519
|
|
5,793
|
|
6,915
|
|
Total
|
$
20,844
|
|
$
74,152
|
|
$
20,266
|
|
$
18,537
|
|
The amounts in the
tables above include adjustments related to previously announced
restructuring activities, certain continuity and
transitional compensation arrangements, certain other cost
reduction initiatives and certain strategic review
initiatives.
|
|
|
|
(3)
|
To exclude adjustments
to accruals for litigation-related settlement charges.
|
|
|
|
(4)
|
To exclude amounts
related to opioid-related legal expenses. The amount during the
second quarter of 2022 reflects the recovery of
certain previously-incurred opioid-related legal
expenses.
|
|
|
|
(5)
|
Adjustments for asset
impairment charges included the following (in
thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Goodwill impairment
charges
|
$
1,748,000
|
|
$
—
|
|
$
1,748,000
|
|
$
—
|
|
Other intangible asset
impairment charges
|
30,000
|
|
4,929
|
|
49,953
|
|
7,811
|
|
Property, plant and
equipment impairment charges
|
3,063
|
|
—
|
|
3,063
|
|
427
|
|
Total
|
$
1,781,063
|
|
$
4,929
|
|
$
1,801,016
|
|
$
8,238
|
|
(6)
|
To exclude integration
costs.
|
|
|
|
(7)
|
To exclude the impact
of changes in the fair value of contingent consideration
liabilities resulting from changes to estimates regarding
the timing and amount of the future revenues of the underlying
products and changes in other assumptions impacting the probability
of
incurring, and extent to which the Company could incur, related
contingent obligations.
|
|
|
|
(8)
|
To exclude the loss on
the extinguishment of debt associated with the Company's March 2021
refinancing transactions.
|
|
|
|
(9)
|
To exclude Other
(income) expense, net per the Condensed Consolidated Statements of
Operations.
|
|
|
|
(10)
|
The "Other" rows
included in each of the above reconciliations of GAAP financial
measures to non-GAAP financial measures (except
for the reconciliations of Net (loss) income (GAAP) to Adjusted
EBITDA (non-GAAP)) include the following (in thousands):
|
|
Three Months Ended
June 30,
|
|
2022
|
|
2021
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact
related to the re-
measurement of
intercompany debt
instruments
|
$
—
|
|
$
—
|
|
$
(2,092)
|
|
$
—
|
|
$
—
|
|
$
1,355
|
|
Other
miscellaneous
|
125
|
|
—
|
|
(17,203)
|
|
125
|
|
—
|
|
—
|
|
Total
|
$
125
|
|
$
—
|
|
$
(19,295)
|
|
$
125
|
|
$
—
|
|
$
1,355
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Cost of
revenues
|
|
Operating
expenses
|
|
Other non-
operating
expenses
|
|
Foreign currency
impact
related to the re-
measurement of
intercompany debt
instruments
|
$
—
|
|
$
—
|
|
$
(894)
|
|
$
—
|
|
$
—
|
|
$
2,502
|
|
Debt modification
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
3,879
|
|
—
|
|
Other
miscellaneous
|
250
|
|
—
|
|
(17,203)
|
|
651
|
|
30
|
|
—
|
|
Total
|
$
250
|
|
$
—
|
|
$
(18,097)
|
|
$
651
|
|
$
3,909
|
|
$
2,502
|
|
The "Other" row
included in the reconciliations of Net (loss) income (GAAP) to
Adjusted EBITDA (non-GAAP) primarily relates to
the items enumerated in the foregoing "Cost of revenues" and
"Operating expenses" columns.
|
|
|
|
(11)
|
To exclude the results
of the businesses reported as discontinued operations, net of
tax.
|
|
|
|
(12)
|
To exclude amortization
expense related to intangible assets.
|
|
|
|
(13)
|
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.
|
|
|
|
(14)
|
Effective January 1,
2022, these non-GAAP financial measures now include acquired
in-process research and development charges
which were previously excluded under our legacy non-GAAP policy.
This change has been applied retrospectively to all periods
presented. Amounts of Acquired in-process research and development
charges included within these non-GAAP financial measures
are set forth in the table below (in thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Twelve Months
Ended June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
Acquired in-process
research and
development charges
|
$
65,000
|
|
$
5,000
|
|
$
67,900
|
|
$
5,000
|
|
$
88,020
|
|
(15)
|
Calculated as income or
loss from continuing operations divided by the applicable weighted
average share number. The applicable
weighted average share numbers are as follows (in
thousands):
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
GAAP
|
235,117
|
|
233,331
|
|
234,498
|
|
237,043
|
|
Non-GAAP
Adjusted
|
236,217
|
|
235,416
|
|
236,466
|
|
237,043
|
Reconciliation of Net Debt Leverage Ratio (non-GAAP)
The following table provides a reconciliation of Net loss (GAAP)
to Adjusted EBITDA (non-GAAP) for the twelve months ended
June 30, 2022 (in thousands) and the calculation of the
Company's Net Debt Leverage Ratio (non-GAAP):
|
Twelve Months
Ended June 30,
2022
|
|
Net loss
(GAAP)
|
$
(2,596,670)
|
|
Income tax
expense
|
15,990
|
|
Interest expense,
net
|
561,192
|
|
Depreciation and
amortization (1)
|
413,056
|
|
EBITDA
(non-GAAP)
|
$
(1,606,432)
|
|
Amounts related to
continuity and separation benefits, cost reductions and strategic
review initiatives
|
147,105
|
|
Certain
litigation-related and other contingencies, net
|
335,025
|
|
Certain legal
costs
|
115,299
|
|
Asset impairment
charges
|
2,207,755
|
|
Acquisition-related and
integration costs
|
3
|
|
Fair value of
contingent consideration
|
(3,009)
|
|
Share-based
compensation (1)
|
22,440
|
|
Other income,
net
|
(39,207)
|
|
Other
|
909
|
|
Discontinued
operations, net of tax
|
44,531
|
|
Adjusted EBITDA
(non-GAAP) (14)
|
$ 1,224,419
|
|
|
|
Calculation of Net
Debt:
|
|
|
Debt
|
$ 8,065,297
|
|
Cash (excluding
Restricted Cash)
|
1,191,572
|
|
Net Debt
(non-GAAP)
|
$ 6,873,725
|
|
|
|
Calculation of Net
Debt Leverage:
|
|
|
Net Debt Leverage Ratio
(non-GAAP) (a)
|
5.6
|
__________
|
(a)
|
As further discussed in
footnote (14) in the "Notes to the Reconciliations of GAAP and
Non-GAAP Financial Measures" section, effective January 1, 2022,
Adjusted EBITDA now includes acquired in-process research and
development charges which were previously excluded under our legacy
non-GAAP policy. The inclusion of these amounts resulted in an
increase of 0.4 to the Net Debt Leverage Ratio for the twelve-month
period ended June 30, 2022. To the extent we incur additional
acquired in-process research and development charges in the future,
it could result in further increases to this ratio.
|
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 passionate team members around the globe
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
Certain information in this press release may be considered
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation, including, but not limited to,
statements regarding Endo's discussions with creditors, its
evaluation of strategic alternatives, potential Chapter 11 filing
and any other statements that refer to our expected, estimated or
anticipated future results or that do not relate solely to
historical facts. Statements including words or phrases such as
"believe," "expect," "anticipate," "intend," "estimate," "plan,"
"will," "may," "look forward," "intend," "guidance," "future,"
"potential" 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: the outcome of our strategic review,
contingency planning and any potential restructuring or bankruptcy
filing; the timing, impact or results of any pending or future
litigation, investigations, proceedings or claims, including
opioid, tax and antitrust related matters; actual or contingent
liabilities; settlement discussions or negotiations; the impact of
competition, including the loss of exclusivity and generic
competition for VASOSTRICT®; our ability to satisfy
judgments or settlements or pursue appeals including bonding
requirements; our ability to adjust to changing market conditions;
our ability to attract and retain key personnel; our inability to
maintain compliance with financial covenants and operating
obligations which would expose us to potential events of default
under our outstanding indebtedness; our ability to incur additional
debt or equity financing for working capital, capital expenditures,
business development, debt service requirements, acquisitions or
general corporate or other purposes; our ability to refinance our
indebtedness; a significant reduction in our short-term or
long-term revenues which could cause us to be unable to fund our
operations and liquidity needs or repay indebtedness; supply chain
interruptions or difficulties; changes in competitive or market
conditions; changes in legislation or regulatory developments; our
ability to obtain and maintain adequate protection for our
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; our
ability to integrate any newly acquired products into our portfolio
and achieve any financial or commercial expectations; the impact
that known and unknown side effects may have on market perception
and consumer preference for our products; the effectiveness of
advertising and other promotional campaigns; the timely and
successful implementation of any strategic initiatives; unfavorable
publicity regarding the misuse of opioids; the uncertainty
associated with the identification of and successful consummation
and execution of external corporate development initiatives and
strategic partnering transactions; our ability to advance our
strategic priorities, develop our product pipeline and continue to
develop the market for QWO® and other products; and our
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 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, the impact of and
response to the ongoing COVID-19 pandemic and the impact of
continued economic volatility, can materially affect our results.
The occurrence or possibility of any such result has caused us to
engage, and may result in further engagement in strategic reviews
that ultimately may result in our pursuing one or more significant
corporate transactions or other remedial measures, including on a
preventative or proactive basis. Those remedial measures could
include a potential bankruptcy filing (which, if it occurred, would
subject us to additional risks and uncertainties that could
adversely affect our business prospects and ability to continue as
a going concern), corporate reorganization or restructuring
activities involving all or a portion of our business, asset sales
or other divestitures, cost-saving initiatives or other corporate
realignments, seeking strategic partnerships and exiting certain
product or geographic markets. Some of these measures could take
significant time to implement and others may require judicial or
other third-party approval. Any such actions may be complex, could
entail significant costs and charges or could otherwise negatively
impact shareholder value, and there can be no assurance that we
will be able to accomplish any of these alternatives on terms
acceptable to us, or at all, or that they will result in their
intended benefits. 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 risk factors, including those
referenced above, 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 at relations.investor@endo.com.
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SOURCE Endo International plc