ENDO REPORTS FOURTH-QUARTER 2023 FINANCIAL RESULTS
- 10% decrease in total revenues for the fourth quarter of 2023 compared to 2022
- Reported loss from continuing operations increased to $2.44 billion in Q4 2023
- Adjusted income from continuing operations decreased by 20% in Q4 2023
- Branded Pharmaceuticals segment saw revenue increase driven by Specialty Products
- Sterile Injectables and Generic Pharmaceuticals segments experienced revenue declines
- Financial guidance for 2024 with uncertainties related to competitive assumptions
- Significant increase in reported loss from continuing operations
- 20% decrease in adjusted income from continuing operations in Q4 2023
- Revenue declines in Sterile Injectables and Generic Pharmaceuticals segments
FOURTH-QUARTER FINANCIAL PERFORMANCE | |||||||||||
(in thousands, except per share amounts) | |||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Total Revenues, Net | $ 497,734 | $ 555,812 | (10) % | $ 2,011,518 | $ 2,318,875 | (13) % | |||||
Reported Loss from Continuing Operations | $ (2,441,038) | $ (245,163) | NM | $ (2,447,786) | $ (2,909,618) | (16) % | |||||
Reported Diluted Weighted Average Shares | 235,220 | 235,205 | — % | 235,219 | 234,840 | — % | |||||
Reported Diluted Net Loss per Share from Continuing Operations (1) | $ (10.38) | $ (1.04) | NM | $ (10.41) | $ (12.39) | (16) % | |||||
Reported Net Loss | $ (2,441,483) | $ (243,535) | NM | $ (2,449,807) | $ (2,923,105) | (16) % | |||||
Adjusted Income from Continuing Operations (2)(3) | $ 151,060 | $ 189,529 | (20) % | $ 706,534 | $ 463,858 | 52 % | |||||
Adjusted Diluted Weighted Average Shares (1)(2) | 235,220 | 236,500 | (1) % | 235,441 | 236,404 | — % | |||||
Adjusted Diluted Net Income per Share from Continuing Operations (2)(3) | $ 0.64 | $ 0.80 | (20) % | $ 3.00 | $ 1.96 | 53 % | |||||
Adjusted EBITDA (2)(3) | $ 166,341 | $ 210,102 | (21) % | $ 761,838 | $ 892,050 | (15) % |
__________
(1) | Reported Diluted Net Loss per Share from Continuing Operations is computed based on weighted average shares outstanding and, if there is income from continuing operations during the period, the dilutive impact of ordinary share equivalents outstanding during the period. In the case of Adjusted Diluted Weighted Average Shares, Adjusted Income from Continuing Operations is used in determining whether to include such dilutive impact. |
(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 Endo's legacy non-GAAP policy. Refer to note (13) in the "Notes to the Reconciliations of GAAP and Non-GAAP Financial Measures" section below for additional discussion. |
CONSOLIDATED FINANCIAL RESULTS
Total revenues were
Reported loss from continuing operations in fourth-quarter 2023 was
Adjusted income from continuing operations in fourth-quarter 2023 was
BRANDED PHARMACEUTICALS SEGMENT
Fourth-quarter 2023 Branded Pharmaceuticals segment revenues were
Specialty Products revenues increased
STERILE INJECTABLES SEGMENT
Fourth-quarter 2023 Sterile Injectables segment revenues were
GENERIC PHARMACEUTICALS SEGMENT
Fourth-quarter 2023 Generic Pharmaceuticals segment revenues were
INTERNATIONAL PHARMACEUTICALS SEGMENT
Fourth-quarter 2023 International Pharmaceuticals segment revenues were
2024 FINANCIAL EXPECTATIONS
Endo is providing financial guidance for the full-year ending December 31, 2024, which contemplates key uncertainties, including competitive assumptions related to VASOSTRICT® ready-to-use, ADRENALIN ® and generic Dexilant ® products. All financial expectations provided by Endo are forward-looking, and actual results may differ materially from such expectations, as further discussed below under the heading "Cautionary Note Regarding Forward-Looking Statements."
Full-Year 2024 | |||
($ in millions) | |||
Total Revenues, Net | |||
EBITDA | |||
Assumptions: | |||
Segment Revenues: | |||
Branded Pharmaceuticals | |||
Sterile Injectables | |||
Generic Pharmaceuticals | |||
International Pharmaceuticals | |||
Gross Margin as a Percentage of Total Revenues, Net | ~ | ||
Operating Expenses |
CASH, CASH FLOW AND OTHER UPDATES
As of December 31, 2023, the Company had approximately
Amitiza® is a registered trademark of a Mallinckrodt company.
Dexilant® is a registered trademark of Takeda Pharmaceutical
Chantix® is a registered trademark of Pfizer Inc.
FINANCIAL SCHEDULES | |||||||||||
The following table presents Endo's unaudited Total revenues, net for the three months and years ended December 31, 2023 and 2022 (dollars in thousands): | |||||||||||
Three Months Ended December 31, | Percent | Year Ended December 31, | Percent | ||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Branded Pharmaceuticals: | |||||||||||
Specialty Products: | |||||||||||
XIAFLEX® | $ 147,760 | $ 114,304 | 29 % | $ 475,014 | $ 438,680 | 8 % | |||||
SUPPRELIN® LA | 23,459 | 28,159 | (17) % | 96,849 | 113,011 | (14) % | |||||
Other Specialty (1) | 16,515 | 19,986 | (17) % | 73,797 | 70,009 | 5 % | |||||
Total Specialty Products | $ 187,734 | $ 162,449 | 16 % | $ 645,660 | $ 621,700 | 4 % | |||||
Established Products: | |||||||||||
PERCOCET® | $ 27,584 | $ 26,460 | 4 % | $ 106,375 | $ 103,943 | 2 % | |||||
TESTOPEL® | 10,265 | 10,396 | (1) % | 42,464 | 38,727 | 10 % | |||||
Other Established (2) | 20,186 | 24,523 | (18) % | 64,588 | 86,772 | (26) % | |||||
Total Established Products | $ 58,035 | $ 61,379 | (5) % | $ 213,427 | $ 229,442 | (7) % | |||||
Total Branded Pharmaceuticals (3) | $ 245,769 | $ 223,828 | 10 % | $ 859,087 | $ 851,142 | 1 % | |||||
Sterile Injectables: | |||||||||||
ADRENALIN® | $ 24,329 | $ 28,790 | (15) % | $ 99,910 | $ 114,304 | (13) % | |||||
VASOSTRICT® | 21,983 | 28,479 | (23) % | 93,180 | 253,696 | (63) % | |||||
Other Sterile Injectables (4) | 49,587 | 50,472 | (2) % | 236,473 | 221,633 | 7 % | |||||
Total Sterile Injectables (3) | $ 95,899 | $ 107,741 | (11) % | $ 429,563 | $ 589,633 | (27) % | |||||
Total Generic Pharmaceuticals (5) | $ 139,211 | $ 204,701 | (32) % | $ 650,352 | $ 795,457 | (18) % | |||||
Total International Pharmaceuticals (6) | $ 16,855 | $ 19,542 | (14) % | $ 72,516 | $ 82,643 | (12) % | |||||
Total revenues, net | $ 497,734 | $ 555,812 | (10) % | $ 2,011,518 | $ 2,318,875 | (13) % |
__________
(1) | Products included within Other Specialty include AVEED®, NASCOBAL® Nasal Spray 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 the year ended December 31, 2023 and/or any product having revenues in excess of and/or any product having revenues in excess of |
(4) | No individual product within Other Sterile Injectables has exceeded |
(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 limited or no intellectual property protection and are sold within the U.S. Varenicline tablets (Endo's generic version of Pfizer Inc.'s Chantix®), which launched in September 2021, made up less than |
(6) | The International Pharmaceuticals segment, which accounted for less than |
The following table presents unaudited Condensed Consolidated Statement of Operations data for the three months and years ended December 31, 2023 and 2022 (in thousands, except per share data): | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
TOTAL REVENUES, NET | $ 497,734 | $ 555,812 | $ 2,011,518 | $ 2,318,875 | |||
COSTS AND EXPENSES: | |||||||
Cost of revenues | 249,535 | 294,266 | 946,415 | 1,092,499 | |||
Selling, general and administrative | 140,433 | 176,957 | 567,727 | 777,169 | |||
Research and development | 28,140 | 30,230 | 115,462 | 128,033 | |||
Acquired in-process research and development | — | — | — | 68,700 | |||
Litigation-related and other contingencies, net | 1,556,773 | 33,984 | 1,611,090 | 478,722 | |||
Asset impairment charges | 357 | 191,530 | 503 | 2,142,746 | |||
Acquisition-related and integration items, net | 148 | 1,359 | 1,972 | 408 | |||
Interest (income) expense, net | (239) | 290 | — | 349,776 | |||
Reorganization items, net | 942,382 | 78,766 | 1,169,961 | 202,978 | |||
Other income, net | (7,525) | (11,907) | (9,688) | (34,054) | |||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | $ (2,412,270) | $ (239,663) | $ (2,391,924) | $ (2,888,102) | |||
INCOME TAX EXPENSE | 28,768 | 5,500 | 55,862 | 21,516 | |||
LOSS FROM CONTINUING OPERATIONS | $ (2,441,038) | $ (245,163) | $ (2,447,786) | $ (2,909,618) | |||
DISCONTINUED OPERATIONS, NET OF TAX | (445) | 1,628 | (2,021) | (13,487) | |||
NET LOSS | $ (2,441,483) | $ (243,535) | $ (2,449,807) | $ (2,923,105) | |||
NET LOSS PER SHARE—BASIC: | |||||||
Continuing operations | $ (10.38) | $ (1.04) | $ (10.41) | $ (12.39) | |||
Discontinued operations | — | — | (0.01) | (0.06) | |||
Basic | $ (10.38) | $ (1.04) | $ (10.42) | $ (12.45) | |||
NET LOSS PER SHARE—DILUTED: | |||||||
Continuing operations | $ (10.38) | $ (1.04) | $ (10.41) | $ (12.39) | |||
Discontinued operations | — | — | (0.01) | (0.06) | |||
Diluted | $ (10.38) | $ (1.04) | $ (10.42) | $ (12.45) | |||
WEIGHTED AVERAGE SHARES: | |||||||
Basic | 235,220 | 235,205 | 235,219 | 234,840 | |||
Diluted | 235,220 | 235,205 | 235,219 | 234,840 |
The following table presents unaudited Condensed Consolidated Balance Sheet data at December 31, 2023 and December 31, 2022 (in thousands): | |||
December 31, | December 31, | ||
ASSETS | |||
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 777,919 | $ 1,018,883 | |
Restricted cash and cash equivalents | 167,702 | 145,358 | |
Accounts receivable | 386,919 | 493,988 | |
Inventories, net | 246,017 | 274,499 | |
Other current assets | 89,944 | 144,040 | |
Total current assets | $ 1,668,501 | $ 2,076,768 | |
TOTAL NON-CURRENT ASSETS | 3,468,793 | 3,681,169 | |
TOTAL ASSETS | $ 5,137,294 | $ 5,757,937 | |
LIABILITIES AND SHAREHOLDERS' DEFICIT | |||
CURRENT LIABILITIES: | |||
Accounts payable and accrued expenses, including legal settlement accruals | $ 537,736 | $ 687,183 | |
Other current liabilities | 1,058 | 2,444 | |
Total current liabilities | $ 538,794 | $ 689,627 | |
OTHER LIABILITIES | 100,192 | 61,700 | |
LIABILITIES SUBJECT TO COMPROMISE | 11,095,868 | 9,168,782 | |
SHAREHOLDERS' DEFICIT | (6,597,560) | (4,162,172) | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 5,137,294 | $ 5,757,937 |
The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the years ended December 31, 2023 and 2022 (in thousands): | |||
Year Ended December 31, | |||
2023 | 2022 | ||
OPERATING ACTIVITIES: | |||
Net loss | $ (2,449,807) | $ (2,923,105) | |
Adjustments to reconcile Net loss to Net cash provided by operating activities: | |||
Depreciation and amortization | 306,448 | 391,629 | |
Asset impairment charges | 503 | 2,142,746 | |
Non-cash reorganization items, net | 905,868 | 89,197 | |
Other, including cash payments to claimants from Qualified Settlement Funds | 1,672,086 | 568,726 | |
Net cash provided by operating activities | $ 435,098 | $ 269,193 | |
INVESTING ACTIVITIES: | |||
Capital expenditures, excluding capitalized interest | $ (94,325) | $ (99,722) | |
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | — | (90,320) | |
Proceeds from sale of business and other assets | 5,134 | 41,400 | |
Other | 39,397 | 15,495 | |
Net cash used in investing activities | $ (49,794) | $ (133,147) | |
FINANCING ACTIVITIES: | |||
Payments on borrowings, including certain adequate protection payments, net (a) | $ (599,492) | $ (509,513) | |
Other | (5,136) | (4,360) | |
Net cash used in financing activities | $ (604,628) | $ (513,873) | |
Effect of foreign exchange rate | 704 | (4,242) | |
NET DECREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | $ (218,620) | $ (382,069) | |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,249,241 | 1,631,310 | |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ 1,030,621 | $ 1,249,241 |
__________
(a) | Beginning during the third quarter of 2022, Endo became obligated to make certain adequate protection payments as a result of the Chapter 11 proceedings, which are currently being accounted for as a reduction of the carrying amount of the related debt instruments and presented as financing cash outflows. Some or all of the adequate protection payments may later be recharacterized as interest expense and/or as operating cash outflows depending upon certain developments in the Chapter 11 proceedings, which could result in increases in interest expense and/or decreases in operating cash flows in future periods that may be material. |
SUPPLEMENTAL FINANCIAL INFORMATION
To supplement the financial measures prepared in accordance with
The tables below provide reconciliations of certain of the Company's non-GAAP financial measures to their most directly comparable GAAP amounts. Refer to the "Notes to the Reconciliations of GAAP and Non-GAAP Financial Measures" section below for additional details regarding the adjustments to the non-GAAP financial measures detailed throughout this Supplemental Financial Information section.
Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP) | |||||||
The following table provides a reconciliation of Net loss (GAAP) to Adjusted EBITDA (non-GAAP) for the three months and years ended December 31, 2023 and 2022 (in thousands): | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net loss (GAAP) | $ (2,441,483) | $ (243,535) | $ (2,449,807) | $ (2,923,105) | |||
Income tax expense | 28,768 | 5,500 | 55,862 | 21,516 | |||
Interest (income) expense, net | (239) | 290 | — | 349,776 | |||
Depreciation and amortization (1) | 74,358 | 89,342 | 306,448 | 387,856 | |||
EBITDA (non-GAAP) | $ (2,338,596) | $ (148,403) | $ (2,087,497) | $ (2,163,957) | |||
Amounts related to continuity and separation benefits, cost reductions and strategic review initiatives (2) | 7,380 | 59,356 | 44,098 | 198,381 | |||
Certain litigation-related and other contingencies, net (3) | 1,556,773 | 33,984 | 1,611,090 | 478,722 | |||
Certain legal costs (4) | 2,069 | 434 | 7,256 | 31,756 | |||
Asset impairment charges (5) | 357 | 191,530 | 503 | 2,142,746 | |||
Fair value of contingent consideration (6) | 148 | 1,359 | 1,972 | 408 | |||
Share-based compensation (1) | — | 4,124 | 2,091 | 17,145 | |||
Other income, net (7) | (7,525) | (11,907) | (9,688) | (34,054) | |||
Reorganization items, net (8) | 942,382 | 78,766 | 1,169,961 | 202,978 | |||
Other (9) | 2,908 | 2,487 | 20,031 | 4,438 | |||
Discontinued operations, net of tax (10) | 445 | (1,628) | 2,021 | 13,487 | |||
Adjusted EBITDA (non-GAAP) (13) | $ 166,341 | $ 210,102 | $ 761,838 | $ 892,050 |
Reconciliation of Adjusted Income from Continuing Operations (non-GAAP) | |||||||
The following table provides a reconciliation of the Company's Loss from continuing operations (GAAP) to Adjusted income from continuing operations (non-GAAP) for the three months and years ended December 31, 2023 and 2022 (in thousands): | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Loss from continuing operations (GAAP) | $ (2,441,038) | $ (245,163) | $ (2,447,786) | $ (2,909,618) | |||
Non-GAAP adjustments: | |||||||
Amortization of intangible assets (11) | 61,823 | 75,467 | 255,933 | 337,311 | |||
Amounts related to continuity and separation benefits, cost reductions and strategic review initiatives (2) | 7,380 | 59,356 | 44,098 | 198,381 | |||
Certain litigation-related and other contingencies, net (3) | 1,556,773 | 33,984 | 1,611,090 | 478,722 | |||
Certain legal costs (4) | 2,069 | 434 | 7,256 | 31,756 | |||
Asset impairment charges (5) | 357 | 191,530 | 503 | 2,142,746 | |||
Fair value of contingent consideration (6) | 148 | 1,359 | 1,972 | 408 | |||
Reorganization items, net (8) | 942,382 | 78,766 | 1,169,961 | 202,978 | |||
Other (9) | (3,641) | (10,022) | 13,485 | (32,980) | |||
Tax adjustments (12) | 24,807 | 3,818 | 50,022 | 14,154 | |||
Adjusted income from continuing operations (non-GAAP) (13) | $ 151,060 | $ 189,529 | $ 706,534 | $ 463,858 |
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, 2023 and 2022 (in thousands, except per share data): | |||||||||||||||||||||||||||||||
Three Months Ended December 31, 2023 | |||||||||||||||||||||||||||||||
Total | Cost of | Gross | Gross | Total | Operating | Operating | Operating | Other non- | (Loss) | Income tax | Effective | (Loss) | Discontinued | Net (loss) | Diluted net | ||||||||||||||||
Reported (GAAP) | $ 497,734 | $ 249,535 | $ 248,199 | 49.9 % | 346.7 % | (296.9) % | $ 934,618 | $ 28,768 | (1.2) % | $ (445) | $ (10.38) | ||||||||||||||||||||
Items impacting | |||||||||||||||||||||||||||||||
Amortization of | — | (61,823) | 61,823 | — | 61,823 | — | 61,823 | — | 61,823 | — | 61,823 | ||||||||||||||||||||
Amounts related to | — | (702) | 702 | (6,678) | 7,380 | — | 7,380 | — | 7,380 | — | 7,380 | ||||||||||||||||||||
Certain litigation- | — | — | — | (1,556,773) | 1,556,773 | — | 1,556,773 | — | 1,556,773 | — | 1,556,773 | ||||||||||||||||||||
Certain legal costs (4) | — | — | — | (2,069) | 2,069 | — | 2,069 | — | 2,069 | — | 2,069 | ||||||||||||||||||||
Asset impairment | — | — | — | (357) | 357 | — | 357 | — | 357 | — | 357 | ||||||||||||||||||||
Fair value of | — | — | — | (148) | 148 | — | 148 | — | 148 | — | 148 | ||||||||||||||||||||
Reorganization items, | — | — | — | — | — | (942,382) | 942,382 | — | 942,382 | — | 942,382 | ||||||||||||||||||||
Other (9) | — | (375) | 375 | (2,533) | 2,908 | 6,549 | (3,641) | — | (3,641) | — | (3,641) | ||||||||||||||||||||
Tax adjustments (12) | — | — | — | — | — | — | — | (24,807) | 24,807 | — | 24,807 | ||||||||||||||||||||
Discontinued | — | — | — | — | — | — | — | — | — | 445 | 445 | ||||||||||||||||||||
After considering items | $ 497,734 | $ 186,635 | $ 311,099 | 62.5 % | $ 157,293 | 31.6 % | $ 153,806 | 30.9 % | $ (1,215) | $ 155,021 | $ 3,961 | 2.6 % | $ 151,060 | $ — | $ 151,060 | $ 0.64 |
Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||||||
Total | Cost of | Gross | Gross | Total | Operating | Operating | Operating | Other non- | (Loss) | Income tax | Effective | (Loss) | Discontinued | Net (loss) | Diluted net | ||||||||||||||||
Reported (GAAP) | $ 555,812 | $ 294,266 | $ 261,546 | 47.1 % | $ 434,060 | 78.1 % | $ (172,514) | (31.0) % | $ 67,149 | $ (239,663) | $ 5,500 | (2.3) % | $ (245,163) | $ 1,628 | $ (243,535) | $ (1.04) | |||||||||||||||
Items impacting | |||||||||||||||||||||||||||||||
Amortization of | — | (75,467) | 75,467 | — | 75,467 | — | 75,467 | — | 75,467 | — | 75,467 | ||||||||||||||||||||
Amounts related to | — | (38,153) | 38,153 | (21,203) | 59,356 | — | 59,356 | — | 59,356 | — | 59,356 | ||||||||||||||||||||
Certain litigation- | — | — | — | (33,984) | 33,984 | — | 33,984 | — | 33,984 | — | 33,984 | ||||||||||||||||||||
Certain legal costs (4) | — | — | — | (434) | 434 | — | 434 | — | 434 | — | 434 | ||||||||||||||||||||
Asset impairment | — | — | — | (191,530) | 191,530 | — | 191,530 | — | 191,530 | — | 191,530 | ||||||||||||||||||||
Fair value of | — | — | — | (1,359) | 1,359 | — | 1,359 | — | 1,359 | — | 1,359 | ||||||||||||||||||||
Reorganization items, | — | — | — | — | — | (78,766) | 78,766 | — | 78,766 | — | 78,766 | ||||||||||||||||||||
Other (9) | — | (125) | 125 | (2,355) | 2,480 | 12,502 | (10,022) | — | (10,022) | — | (10,022) | ||||||||||||||||||||
Tax adjustments (12) | — | — | — | — | — | — | — | (3,818) | 3,818 | — | 3,818 | ||||||||||||||||||||
Discontinued | — | — | — | — | — | — | — | — | — | (1,628) | (1,628) | ||||||||||||||||||||
After considering items | $ 555,812 | $ 180,521 | $ 375,291 | 67.5 % | $ 183,195 | 33.0 % | $ 192,096 | 34.6 % | $ 885 | $ 191,211 | $ 1,682 | 0.9 % | $ 189,529 | $ — | $ 189,529 | $ 0.80 |
Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||
Total | Cost of | Gross | Gross | Total | Operating | Operating | Operating | Other non- | (Loss) | Income tax | Effective | (Loss) | Discontinued | Net (loss) | Diluted net | ||||||||||||||||
Reported (GAAP) | $ 2,011,518 | $ 946,415 | $ 1,065,103 | 53.0 % | 114.2 % | (61.2) % | $ 55,862 | (2.3) % | $ (2,021) | $ (10.41) | |||||||||||||||||||||
Items impacting | |||||||||||||||||||||||||||||||
Amortization of | — | (255,933) | 255,933 | — | 255,933 | — | 255,933 | — | 255,933 | — | 255,933 | ||||||||||||||||||||
Amounts related to | — | (4,514) | 4,514 | (39,584) | 44,098 | — | 44,098 | — | 44,098 | — | 44,098 | ||||||||||||||||||||
Certain litigation- | — | — | — | (1,611,090) | 1,611,090 | — | 1,611,090 | — | 1,611,090 | — | 1,611,090 | ||||||||||||||||||||
Certain legal costs (4) | — | — | — | (7,256) | 7,256 | — | 7,256 | — | 7,256 | — | 7,256 | ||||||||||||||||||||
Asset impairment | — | — | — | (503) | 503 | — | 503 | — | 503 | — | 503 | ||||||||||||||||||||
Fair value of | — | — | — | (1,972) | 1,972 | — | 1,972 | — | 1,972 | — | 1,972 | ||||||||||||||||||||
Reorganization items, | — | — | — | — | — | (1,169,961) | 1,169,961 | — | 1,169,961 | — | 1,169,961 | ||||||||||||||||||||
Other (9) | — | (1,278) | 1,278 | (18,753) | 20,031 | 6,546 | 13,485 | — | 13,485 | — | 13,485 | ||||||||||||||||||||
Tax adjustments (12) | — | — | — | — | — | — | — | (50,022) | 50,022 | — | 50,022 | ||||||||||||||||||||
Discontinued | — | — | — | — | — | — | — | — | — | 2,021 | 2,021 | ||||||||||||||||||||
After considering items | $ 2,011,518 | $ 684,690 | $ 1,326,828 | 66.0 % | $ 617,596 | 30.7 % | $ 709,232 | 35.3 % | $ (3,142) | $ 712,374 | $ 5,840 | 0.8 % | $ 706,534 | $ — | $ 706,534 | $ 3.00 |
Year Ended December 31, 2022 | |||||||||||||||||||||||||||||||
Total | Cost of | Gross | Gross | Total | Operating | Operating | Operating | Other non- | (Loss) | Income tax | Effective | (Loss) | Discontinued | Net (loss) | Diluted net | ||||||||||||||||
Reported (GAAP) | $ 2,318,875 | $ 1,092,499 | $ 1,226,376 | 52.9 % | $ 3,595,778 | 155.1 % | $ (2,369,402) | (102.2) % | $ 518,700 | $ (2,888,102) | $ 21,516 | (0.7) % | $ (2,909,618) | $ (13,487) | $ (2,923,105) | $ (12.39) | |||||||||||||||
Items impacting | |||||||||||||||||||||||||||||||
Amortization of | — | (337,311) | 337,311 | — | 337,311 | — | 337,311 | — | 337,311 | — | 337,311 | ||||||||||||||||||||
Amounts related to | — | (61,806) | 61,806 | (136,575) | 198,381 | — | 198,381 | — | 198,381 | — | 198,381 | ||||||||||||||||||||
Certain litigation- | — | — | — | (478,722) | 478,722 | — | 478,722 | — | 478,722 | — | 478,722 | ||||||||||||||||||||
Certain legal costs (4) | — | — | — | (31,756) | 31,756 | — | 31,756 | — | 31,756 | — | 31,756 | ||||||||||||||||||||
Asset impairment | — | — | — | (2,142,746) | 2,142,746 | — | 2,142,746 | — | 2,142,746 | — | 2,142,746 | ||||||||||||||||||||
Fair value of | — | — | — | (408) | 408 | — | 408 | — | 408 | — | 408 | ||||||||||||||||||||
Reorganization items, | — | — | — | — | — | (202,978) | 202,978 | — | 202,978 | — | 202,978 | ||||||||||||||||||||
Other (9) | — | (500) | 500 | (3,925) | 4,425 | 37,405 | (32,980) | — | (32,980) | — | (32,980) | ||||||||||||||||||||
Tax adjustments (12) | — | — | — | — | — | — | — | (14,154) | 14,154 | — | 14,154 | ||||||||||||||||||||
Discontinued | — | — | — | — | — | — | — | — | — | 13,487 | 13,487 | ||||||||||||||||||||
After considering items | $ 2,318,875 | $ 692,882 | $ 1,625,993 | 70.1 % | $ 801,646 | 34.6 % | $ 824,347 | 35.5 % | $ 353,127 | $ 471,220 | $ 7,362 | 1.6 % | $ 463,858 | $ — | $ 463,858 | $ 1.96 |
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, 2023 and 2022 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 December 31, | |||||||
2023 | 2022 | ||||||
Cost of revenues | Operating | Cost of revenues | Operating | ||||
Continuity and separation benefits | $ 693 | $ 6,677 | $ 5,802 | $ 21,642 | |||
Inventory adjustments | 9 | 1 | 32,351 | 116 | |||
Other, including strategic review initiatives | — | — | — | (555) | |||
Total | $ 702 | $ 6,678 | $ 38,153 | $ 21,203 |
Year Ended December 31, | |||||||
2023 | 2022 | ||||||
Cost of revenues | Operating | Cost of revenues | Operating | ||||
Continuity and separation benefits | $ 3,833 | $ 39,866 | $ 18,301 | $ 67,277 | |||
Accelerated depreciation | — | — | 2,164 | 1,660 | |||
Inventory adjustments | 90 | (323) | 33,785 | 2,577 | |||
Other, including strategic review initiatives | 591 | 41 | 7,556 | 65,061 | |||
Total | $ 4,514 | $ 39,584 | $ 61,806 | $ 136,575 |
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. |
(5) | Adjustments for asset impairment charges included in the following (in thousands): |
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Goodwill impairment charges | $ — | $ — | $ — | $ 1,845,000 | |||
Other intangible asset impairment charges | — | 185,548 | — | 288,701 | |||
Property, plant and equipment impairmentcharges | 357 | 5,982 | 503 | 9,045 | |||
Total | $ 357 | $ 191,530 | $ 503 | $ 2,142,746 |
(6) | 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. |
(7) | To exclude Other income, net per the Consolidated Statements of Operations. |
(8) | Amounts relate to the net expense or income recognized during Endo's bankruptcy proceedings required to be presented as Reorganization items, net under Accounting Standards Codification Topic 852, Reorganizations. |
(9) | 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 (GAAP) to Adjusted EBITDA (non-GAAP)) include the following (in thousands): |
Three Months Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cost of revenues | Operating | Other non- | Cost of revenues | Operating | Other non- | ||||||
Foreign currency impact related to the | $ — | $ — | $ 2,156 | $ — | $ — | $ 1,786 | |||||
Gain on sale of business and other assets | — | — | (8,705) | — | — | (14,288) | |||||
Other miscellaneous | 375 | 2,533 | — | 125 | 2,355 | — | |||||
Total | $ 375 | $ 2,533 | $ (6,549) | $ 125 | $ 2,355 | $ (12,502) |
Year Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cost of revenues | Operating | Other non- | Cost of revenues | Operating | Other non- | ||||||
Foreign currency impact related to the | $ — | $ — | $ 2,159 | $ — | $ — | $ (5,328) | |||||
Gain on sale of business and other assets | — | — | (8,705) | — | — | (26,508) | |||||
Other miscellaneous | 1,278 | 18,753 | — | 500 | 3,925 | (5,569) | |||||
Total | $ 1,278 | $ 18,753 | $ (6,546) | $ 500 | $ 3,925 | $ (37,405) |
The "Other" row included in the reconciliations of Net loss (GAAP) to Adjusted EBITDA (non-GAAP) primarily relates to the items enumerated in the foregoing "Cost of revenues" and "Operating expenses" columns. | |
(10) | To exclude the results of the businesses reported as discontinued operations, net of tax. |
(11) | To exclude amortization expense related to intangible assets. |
(12) | Adjusted income taxes are calculated by tax effecting adjusted pre-tax income and permanent book-tax differences at the applicable effective tax rate that will be determined by reference to statutory tax rates in the relevant jurisdictions in which the Company operates. Adjusted income taxes include current and deferred income tax expense commensurate with the non-GAAP measure of profitability. |
(13) | 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 December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Acquired in-process research and development charges | $ — | $ — | $ — | $ 68,700 |
(14) | 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 December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
GAAP | 235,220 | 235,205 | 235,219 | 234,840 | |||
Non-GAAP Adjusted | 235,220 | 236,500 | 235,441 | 236,404 |
Non-GAAP Financial Measures
The Company utilizes certain financial measures that are not prescribed by or prepared in accordance with accounting principles generally accepted in the
Investors are encouraged to review the reconciliations of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures. However, the Company does not provide reconciliations of projected non-GAAP financial measures to GAAP financial measures, nor does it provide comparable projected GAAP financial measures for such projected non-GAAP financial measures. The Company is unable to provide such reconciliations without unreasonable efforts due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for asset impairments, contingent consideration adjustments, legal settlements, gain / loss on extinguishment of debt, adjustments to inventory and other charges reflected in the reconciliation of historic numbers, the amounts of which could be significant.
See Endo's Current Report on Form 8-K furnished today to the
About Endo
Endo (OTC: ENDPQ) 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 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 with respect to financial guidance, expectations or outlook, bankruptcy court hearings or approvals, Chapter 11 emergence, and any other statements that refer to 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," "outlook," "guidance," "future," "potential" or similar expressions are forward-looking statements. All forward-looking statements in this communication reflect the Company's current views as of the date of this communication about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to it and on assumptions it has made. Actual results may differ materially and adversely from current expectations based on a number of factors, including, among other things, the following: the Company's restructuring activities; 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 Company's liquidity, financial performance, cash position and operations; the Company's strategy; risks and uncertainties associated with Chapter 11 proceedings; the negative impacts on the Company's businesses as a result of filing for and operating under Chapter 11 protection; the time, terms and ability to obtain approval and consummate the proposed Plan or Reorganization or a sale under Section 363 of the
Additional information concerning risk factors, including those referenced above, can be found in press releases issued by the Company, as well as public periodic filings with the
SOURCE Endo International plc
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