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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
_______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of Earliest Event Reported): March 6,
2023
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Endo International plc
(Exact name of registrant as specified in its charter)
_______________________________
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Ireland
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001-36326
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68-0683755
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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First Floor, Minerva House, Simmonscourt Road
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Ballsbridge, Dublin 4,
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Ireland
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Not Applicable
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code
011-353-1-268-2000
Not Applicable
(Former name or former address, if changed since last
report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐ Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐ Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: None
(1)
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(1) |
On August 26, 2022, Endo International plc’s ordinary shares, which
previously traded on the Nasdaq Global Select Market under the
symbol ENDP, began trading exclusively on the over-the-counter
market under the symbol ENDPQ. On September 14, 2022, Nasdaq filed
a Form 25-NSE with the United States Securities and Exchange
Commission and Endo International plc’s ordinary shares were
subsequently delisted from the Nasdaq Global Select Market. On
December 13, 2022, Endo International plc’s ordinary shares were
deregistered under Section 12(b) of the Securities Exchange Act of
1934, as amended. |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
☐ Emerging
growth company
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02. Results of Operations and
Financial Condition.
On March 6, 2023, Endo International plc (the “Company,”
“Endo,” or “we”) issued an earnings release announcing its
financial results for the three and twelve months ended December
31, 2022 and 2021 (the “Earnings Release”). A copy of the Earnings
Release is attached as Exhibit 99.1 hereto and is incorporated
herein by reference.
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”). The Company utilizes these
financial measures, commonly referred to as “non-GAAP,” as
supplements to financial measures determined in accordance with
GAAP when evaluating the Company’s operating performance and the
Company believes that they will be used by certain investors to
measure the Company’s operating results. The Company believes that
presenting these non-GAAP financial measures provides useful
information about the Company’s performance across reporting
periods on a consistent basis by excluding certain items, which may
be favorable or unfavorable, pursuant to the procedure described in
the succeeding paragraph.
The initial identification and review of the adjustments necessary
to arrive at these non-GAAP financial measures are performed by a
team of finance professionals that include the Chief Accounting
Officer and segment finance leaders in accordance with the
Company’s Adjusted Income Statement Policy, which is reviewed and
approved annually by the Audit & Finance Committee of the
Company’s Board of Directors. Company tax professionals review and
determine the tax effect of adjusted pre-tax income at applicable
tax rates and other tax adjustments as described below. Proposed
adjustments, along with any items considered but excluded, are
presented to the Chief Accounting Officer, Chief Executive Officer
and/or the Chief Financial Officer for their consideration. In
turn, the non-GAAP adjustments are presented to the Audit &
Finance Committee on a quarterly basis as part of the Company’s
standard procedures for preparation and review of the earnings
release and other quarterly materials.
These non-GAAP financial measures should be considered supplemental
to and not a substitute for financial information prepared in
accordance with GAAP. The Company’s definition of these non-GAAP
financial measures may differ from similarly titled measures used
by others. The definitions of the most commonly used non-GAAP
financial measures are presented below.
Adjusted income from continuing operations
Adjusted income from continuing operations represents Loss from
continuing operations prepared in accordance with GAAP and adjusted
for certain items. Adjustments to GAAP amounts may include, but are
not limited to, acquisition-related and integration items,
including transaction costs and changes in the fair value of
contingent consideration; cost reduction and integration-related
initiatives such as separation benefits, continuity payments, other
exit costs and certain costs associated with integrating an
acquired company’s operations; certain amounts related to strategic
review initiatives; asset impairment charges; amortization of
intangible assets; inventory step-up recorded as part of our
acquisitions; litigation-related and other contingent matters;
certain legal costs; gains or losses from early termination of
debt; debt modification costs; gains or losses from the sales of
businesses and other assets; foreign currency gains or losses on
intercompany financing arrangements; reorganization items, net; the
tax effect of adjusted pre-tax income at applicable tax rates and
other tax adjustments; and certain other items.
Adjusted diluted net income per share from continuing operations
and Adjusted diluted weighted average shares
Adjusted diluted net income per share from continuing operations
represents Adjusted income from continuing operations divided by
the number of Adjusted diluted weighted average
shares.
Both GAAP and non-GAAP diluted Net income (loss) per share data is
computed based on weighted average shares outstanding and, if there
is net income from continuing operations (rather than net loss)
during the period, the dilutive impact of share equivalents
outstanding during the period. Diluted weighted average shares
outstanding and Adjusted diluted weighted average shares
outstanding are calculated on the same basis except for the net
income or loss figure used in determining whether to include such
dilutive impact.
Adjusted gross margin
Adjusted gross margin represents total revenues less cost of
revenues prepared in accordance with GAAP and adjusted for the
items enumerated above under the heading “Adjusted income from
continuing operations,” to the extent such items relate to cost of
revenues. Such items may include, but are not limited to, cost
reduction and integration-related initiatives such as separation
benefits, continuity payments, other exit costs and certain costs
associated with integrating an acquired company’s operations;
certain amounts related to strategic review initiatives;
amortization of intangible assets; inventory step-up recorded as
part of our acquisitions; and certain other items.
Adjusted operating expenses
Adjusted operating expenses represent operating expenses prepared
in accordance with GAAP and adjusted for the items enumerated above
under the heading “Adjusted income from continuing operations,” to
the extent such items relate to operating expenses. Such items may
include, but are not limited to, acquisition-related and
integration items, including transaction costs and changes in the
fair value of contingent consideration; cost reduction and
integration-related initiatives such as separation benefits,
continuity payments, other exit costs and certain costs associated
with integrating an acquired company’s operations; certain amounts
related to strategic review initiatives; asset impairment charges;
amortization of intangible assets; inventory step-up recorded as
part of our acquisitions; litigation-related and other contingent
matters; certain legal costs; debt modification costs; and certain
other items.
Adjusted interest expense
Adjusted interest expense represents interest expense, net,
prepared in accordance with GAAP, adjusted for certain non-cash
interest expense.
Adjusted income taxes and Adjusted effective tax rate
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. Adjustments are then made for certain items
relating to prior years and for tax planning actions that are
expected to be distortive to the underlying effective tax rate and
trend in the effective tax rate. The most directly comparable GAAP
financial measure for Adjusted income taxes is Income tax expense,
prepared in accordance with GAAP. The Adjusted effective tax rate
represents the rate generated when dividing Adjusted income taxes
by the amount of adjusted pre-tax income.
EBITDA and Adjusted EBITDA
EBITDA represents Net income (loss) before Interest expense, net;
Income tax expense; Depreciation; and Amortization, each prepared
in accordance with GAAP. Adjusted EBITDA further adjusts EBITDA by
excluding other (income) expense, net; share-based compensation;
acquisition-related and integration items, including transaction
costs and changes in the fair value of contingent consideration;
cost reduction and integration-related initiatives such as
separation benefits, continuity payments, other exit costs and
certain costs associated with integrating an acquired company’s
operations; certain amounts related to strategic review
initiatives; asset impairment charges; inventory step-up recorded
as part of our acquisitions; litigation-related and other
contingent matters; certain legal costs; debt modification costs;
reorganization items, net; discontinued operations, net of tax; and
certain other items.
The Company’s Adjusted income from continuing operations, Adjusted
diluted net income per share from continuing operations, Adjusted
operating expenses and Adjusted EBITDA exclude opioid-related legal
expenses. 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.
Because adjusted financial measures exclude the effect of items
that will increase or decrease the Company’s reported results of
operations, the Company strongly encourages investors to review the
Company’s consolidated financial statements and publicly filed
reports in their entirety. Investors are also encouraged to review
the reconciliation of the non-GAAP financial measures used in the
Earnings Release to their most directly comparable GAAP financial
measures as included in the Earnings Release. 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, gains or losses on extinguishment
of debt, adjustments to inventory and other charges reflected in
the reconciliation of historic numbers, the amount of which could
be significant.
The information in this Item 2.02 and in Exhibit 99.1 attached
hereto shall not be deemed to be “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section. The information
contained in this Item 2.02 and in Exhibit 99.1 attached hereto
shall not be incorporated into any registration statement or other
document filed by the Registrant with the U.S. Securities and
Exchange Commission under the Securities Act of 1933, whether made
before or after the date hereof, regardless of any general
incorporation language in such filing, except as shall be expressly
set forth by specific reference in such filing.
Item 9.01. Financial
Statements and Exhibits.
(d) Exhibits.
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Description |
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99.1 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL
document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly
authorized.
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ENDO INTERNATIONAL PLC |
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By: |
/s/ Matthew J. Maletta |
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Name: |
Matthew J. Maletta |
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Title: |
Executive Vice President,
Chief Legal Officer and Company Secretary |
Dated: March 6, 2023
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