Teva Reports Second Quarter 2023 Financial Results
-
Revenues of
$3.9 billion -
GAAP loss per share of
$0.77 -
Non-GAAP diluted EPS of
$0.56 -
Cash flow generated from operating activities of
$324 million -
Free cash flow of
$632 million -
AUSTEDO®
U.S. revenues of$308 million -
2023 revenues outlook revised to
from$15.0 -$15.4 billion ; all other key components reaffirmed:$14.8 -$15.4 billion -
Non-GAAP operating Income of
–$4.0 $4.4 billion -
Adjusted EBITDA of
-$4.5 $4.9 billion -
Non-GAAP diluted EPS of
-$2.25 $2.55 -
Free cash flow of
-$1.7 $2.1 billion
-
Non-GAAP operating Income of
Mr. Richard Francis, Teva's President and CEO, said, “Teva continued to deliver solid performance this quarter, with revenues coming in at
Mr. Francis continued, "As we remain determined to execute on our growth strategy, we are continuing to focus on our late-stage innovative pipeline delivery and early-stage pipeline development, both organically and through collaborations."
Pivot to Growth Strategy
In May 2023, we introduced our new “Pivot to Growth” strategy, which is based on four key pillars: (I) delivering on our growth engines, mainly AUSTEDO, UZEDYTM and our late-stage pipeline of biosimilars; (ii) stepping up innovation through delivering on our late-stage innovative pipeline assets as well as building up our early-stage pipeline organically and potentially through business development activities; (iii) sustaining our generics medicines powerhouse with a global commercial footprint, focused portfolio, pipeline and manufacturing footprint; and (iv) focusing our business by optimizing our portfolio and global manufacturing footprint to enable strategic capital deployment to accelerate our near and long-term growth engines and reorganizing certain of our business units to a more optimal structure, while also reorganizing key business units to enhance operational efficiency.
Second Quarter 2023 Consolidated Results
Revenues in the second quarter of 2023 were
Exchange rate movements during the second quarter of 2023, including hedging effects, negatively impacted our revenues by
Gross profit was
Research and Development (R&D) expenses in the second quarter of 2023 were
Selling and Marketing (S&M) expenses in the second quarter of 2023 were
General and Administrative (G&A) expenses in the second quarter of 2023 were
Other income in the second quarter of 2023 was
Operating loss in the second quarter of 2023 was
Adjusted EBITDA was
Financial expenses, net in the second quarter of 2023 were
In the second quarter of 2023, we recognized a tax benefit of
Non-GAAP tax rate in the second quarter of 2023 was
We expect our annual non-GAAP tax rate for 2023 to be between
Net loss attributable to Teva and loss per share in the second quarter of 2023 were
As of June 30, 2023 and 2022, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,157 million and 1,144 million, respectively.
Non-GAAP information: net non-GAAP adjustments in the second quarter of 2023 were
-
Amortization of purchased intangible assets of
, of which$162 million is included in cost of sales and the remaining$145 million in S&M expenses;$16 million -
Impairment of long-lived assets of
;$74 million -
Goodwill impairment of
;$700 million -
Legal settlements and loss contingencies of
;$462 million -
Contingent consideration expenses of
;$70 million -
Equity compensation expenses of
;$30 million -
Restructuring expenses of
;$10 million -
Accelerated depreciation of
;$24 million -
Financial expenses of
;$16 million -
Costs related to regulatory actions taken in facilities of
;$1 million -
Other non-GAAP items of
;$123 million -
Items attributable to non-controlling interests of
; and$49 million -
Corresponding tax effects and unusual tax items of
.$131 million
We believe that excluding such items facilitates investors’ understanding of our business including underlying performance trends, thereby improving the comparability of our business performance results between reporting periods.
For further information, see the tables below for a reconciliation of the
Cash flow generated from operating activities during the second quarter of 2023 was
During the second quarter of 2023, we generated free cash flow of
As of June 30, 2023, our debt was
Segment Results for the Second Quarter of 2023
North America Segment
Our
The following table presents revenues, expenses and profit for our
|
|
|
|
|
|
|
||||
|
Three months ended June 30, |
|||||||||
|
2023 |
|
2022 |
|||||||
|
( |
|||||||||
Revenues |
$ |
1,991 |
|
$ |
1,904 |
|
||||
Gross profit |
|
1,046 |
|
|
1,010 |
|
||||
R&D expenses |
|
159 |
|
|
147 |
|
||||
S&M expenses |
|
264 |
|
|
256 |
|
||||
G&A expenses |
|
106 |
|
|
127 |
|
||||
Other income |
|
(4) |
§ |
|
(1) |
§ |
||||
Segment profit* |
$ |
520 |
|
$ |
481 |
|
||||
* Segment profit does not include amortization and certain other items. |
||||||||||
§ Represents an amount less than |
Revenues from our
Revenues in
Revenues by Major Products and Activities
The following table presents revenues for our
|
|
Three months ended June 30, |
|
Percentage Change |
||||
|
|
2023 |
|
2022 |
|
2023-2022 |
||
|
|
( |
|
|
||||
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
969 |
|
$ |
1,026 |
|
( |
AJOVY |
|
|
57 |
|
|
49 |
|
|
AUSTEDO |
|
|
308 |
|
|
204 |
|
|
BENDEKA and TREANDA |
|
|
69 |
|
|
83 |
|
( |
COPAXONE |
|
|
64 |
|
|
94 |
|
( |
Anda |
|
|
392 |
|
|
308 |
|
|
Other |
|
|
133 |
|
|
139 |
|
( |
Total |
|
$ |
1,991 |
|
$ |
1,904 |
|
|
Generic products revenues in our
In the second quarter of 2023, our total prescriptions were approximately 319 million (based on trailing twelve months), representing
AJOVY revenues in our
AUSTEDO revenues in our
AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023, and became commercially available in the
UZEDY (risperidone) extended-release injectable suspension was approved by the FDA on April 28, 2023 for the treatment of schizophrenia in adults, and was launched in the
BENDEKA and TREANDA combined revenues in our
COPAXONE revenues in our
Anda revenues from third-party products in our
North America Gross Profit
Gross profit from our
Gross profit margin for our
North America Profit
Profit from our
Profit from our
Europe Segment
Our
The following table presents revenues, expenses and profit for our
|
Three months ended June 30, |
|||||||||
|
2023 |
|
2022 |
|||||||
|
( |
|||||||||
Revenues |
$ |
1,163 |
|
$ |
1,171 |
|
||||
Gross profit |
|
640 |
|
|
703 |
|
||||
R&D expenses |
|
53 |
|
|
56 |
|
||||
S&M expenses |
|
194 |
|
|
196 |
|
||||
G&A expenses |
|
61 |
|
|
63 |
|
||||
Other income |
|
(1) |
§ |
|
(1) |
§ |
||||
Segment profit* |
$ |
334 |
|
$ |
389 |
|
||||
|
|
|
|
|
|
|||||
* Segment profit does not include amortization and certain other items. |
||||||||||
§ Represents an amount less than |
Revenues from our
Revenues by Major Products and Activities
The following table presents revenues for our
|
|
Three months ended June 30, |
|
Percentage Change |
||||
|
|
2023 |
|
2022 |
|
2023-2022 |
||
|
|
( |
|
|
||||
Generic products |
|
$ |
909 |
|
$ |
873 |
|
|
AJOVY |
|
|
39 |
|
|
29 |
|
|
COPAXONE |
|
|
60 |
|
|
72 |
|
( |
Respiratory products |
|
|
66 |
|
|
65 |
|
|
Other |
|
|
89 |
|
|
131 |
|
( |
Total |
|
$ |
1,163 |
|
$ |
1,171 |
|
( |
Generic products revenues (including OTC and biosimilar products) in our
AJOVY revenues in our
COPAXONE revenues in our
Respiratory products revenues in our
Europe Gross Profit
Gross profit from our
Gross profit margin for our
Europe Profit
Profit from our
Profit from our
International Markets Segment
Our International Markets segment includes all countries in which we operate other than those in our
The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2023 and 2022:
|
Three months ended June 30, |
|||||||||
|
2023 |
|
2022 |
|||||||
|
( |
|||||||||
Revenues |
$ |
479 |
|
$ |
454 |
|
||||
Gross profit |
|
254 |
|
|
242 |
|
||||
R&D expenses |
|
21 |
|
|
19 |
|
||||
S&M expenses |
|
110 |
|
|
99 |
|
||||
G&A expenses |
|
29 |
|
|
30 |
|
||||
Other income |
|
(28) |
( |
|
(1) |
§ |
||||
Segment profit* |
$ |
124 |
|
$ |
95 |
|
||||
|
|
|
|
|
|
|||||
* Segment profit does not include amortization and certain other items. |
||||||||||
§ Represents an amount less than |
Revenues from our International Markets segment in the second quarter of 2023 were
In the second quarter of 2023, revenues were negatively impacted by exchange rate fluctuations of
Revenues by Major Products and Activities
The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2023 and 2022:
|
|
|
|
|
||||
|
|
Three months ended June 30, |
|
Percentage Change |
||||
|
|
2023 |
|
2022 |
|
2023-2022 |
||
|
|
( |
|
|
||||
Generic products |
|
$ |
394 |
|
$ |
394 |
|
§ |
AJOVY |
|
|
9 |
|
|
10 |
|
( |
COPAXONE |
|
|
10 |
|
|
9 |
|
|
Other |
|
|
67 |
|
|
40 |
|
|
Total |
|
$ |
479 |
|
$ |
454 |
|
|
§ Represents an amount less than |
Generic products revenues in our International Markets segment in the second quarter of 2023, which include OTC products, were flat compared to the second quarter of 2022. In local currency terms, revenues increased by
AJOVY was launched in certain markets in our International Markets segment, including in
COPAXONE revenues in our International Markets segment in the second quarter of 2023 were
AUSTEDO was launched in
International Markets Gross Profit
Gross profit from our International Markets segment in the second quarter of 2023 was
Gross profit margin for our International Markets segment in the second quarter of 2023 decreased to
International Markets Profit
Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.
Profit from our International Markets segment in the second quarter of 2023 was
Other Activities
We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our
Revenues from other activities in the second quarter of 2023 were
API sales to third parties in the second quarter of 2023 were
Outlook for 2023 Non-GAAP Results
$ billions, except EPS or as noted |
August 2023 Outlook |
February 2023 Outlook |
2022 Actual |
|||
Revenues* |
|
|
|
|||
COPAXONE ($m)* |
~500 |
~500 |
691 |
|||
AUSTEDO ($m)* |
~1,200 |
~1,200 |
971 |
|||
AJOVY ($m)* |
~400 |
~400 |
377 |
|||
Operating Income |
4.0 – 4.4 |
4.0 – 4.4 |
4.1 |
|||
Adjusted EBITDA |
4.5 – 4.9 |
4.5 – 4.9 |
4.6 |
|||
Finance Expenses ($m) |
~1,000 |
~1,000 |
904 |
|||
Tax Rate |
|
|
|
|||
Diluted EPS ($) |
2.25 – 2.55 1,123 million shares |
2.25 – 2.55 1,123 million shares |
2.52 1,115 million shares |
|||
Free Cash Flow** |
1.7 – 2.1 |
1.7 – 2.1 |
2.2 |
|||
CAPEX* |
0.5 |
0.5 |
0.5 |
|||
Foreign Exchange |
Volatile swings in FX can negatively impact revenue and income |
|||||
* Revenues and CAPEX presented on a GAAP basis. |
||||||
** Free Cash Flow includes cash flow generated from operating activities net of capital expenditures and deferred purchase price cash component collected for securitized trade receivables |
Conference Call
Teva will host a conference call and live webcast including a slide presentation on Wednesday, August 2, 2023, at 8:00 a.m. ET to discuss its second quarter 2023 results and overall business environment. A question & answer session will follow.
In order to participate, please register in advance here to obtain a local or toll-free phone number and your personal pin.
A live webcast of the call will be available on Teva’s website at: ir.tevapharm.com.
Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva's website.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has been developing and producing medicines to improve people’s lives for more than a century. We are a global leader in generic and innovative medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. Around 200 million people around the world take a Teva medicine every day, and are served by one of the largest and most complex supply chains in the pharmaceutical industry. Along with our established presence in generics, we have significant innovative research and operations supporting our growing portfolio of innovative medicines and biopharmaceutical products. Learn more at http://www.tevapharm.com.
Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.
Non-GAAP Financial Measures
This press release contains certain financial information that differs from what is reported under accounting principles generally accepted in
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. You can identify these forward-looking statements by the use of words such as “should,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. Important factors that could cause or contribute to such differences include risks relating to:
- our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; concentration of our customer base and commercial alliances among our customers; delays in launches of new generic products; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; our ability to develop and commercialize biopharmaceutical products; competition for our innovative medicines, including AUSTEDO, AJOVY and COPAXONE; our ability to achieve expected results from investments in our product pipeline; our ability to develop and commercialize additional pharmaceutical products; our ability to successfully launch and execute our new strategy, including to expand our innovative and biosimilar medicines pipeline and profitably commercialize the innovative medicines and biosimilar portfolio, whether organically or through business development, and to sustain and focus our portfolio of generics medicines; and the effectiveness of our patents and other measures to protect our intellectual property rights;
- our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us;
- our business and operations in general, including: the impact of global economic conditions and other macroeconomic developments and the governmental and societal responses thereto; the widespread outbreak of an illness or any other communicable disease, or any other public health crisis; effectiveness of our optimization efforts; our ability to attract, hire, integrate and retain highly skilled personnel; manufacturing or quality control problems; interruptions in our supply chain; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; challenges associated with conducting business globally, including political or economic instability, major hostilities or terrorism; costs and delays resulting from the extensive pharmaceutical regulation to which we are subject; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; and our prospects and opportunities for growth if we sell assets;
-
compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory environments; increased legal and regulatory action in connection with public concern over the abuse of opioid medications; our ability to timely make payments required under our nationwide opioids settlement agreement and provide our generic version of Narcan® (naloxone hydrochloride nasal spray) in the amounts and at the times required under the terms of such agreement; scrutiny from competition and pricing authorities around the world, including our ability to successfully defend against the
U.S. Department of Justice criminal charges of Sherman Act violations; potential liability for intellectual property right infringement; product liability claims; failure to comply with complex Medicare and Medicaid reporting and payment obligations; compliance with anti-corruption, sanctions and trade control laws; environmental risks; and the impact of ESG issues; -
other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our long-lived assets; the impact of geopolitical conflicts including the ongoing conflict between
Russia andUkraine ; potential significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;
and other factors discussed in this press release, in our Quarterly Report on Form 10-Q for the second quarter of 2023 and in our Annual Report on Form 10-K for the year ended December 31, 2022, including in the sections captioned "Risk Factors” and “Forward Looking Statements.” Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.
CONSOLIDATED BALANCE SHEETS |
||||||
( |
||||||
(Unaudited) |
||||||
June 30, |
December 31, |
|||||
2023 |
2022 |
|||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ |
2,669 |
$ |
2,801 |
||
Accounts receivables, net of allowance for credit losses of |
|
3,539 |
|
3,696 |
||
Inventories |
|
4,109 |
|
3,833 |
||
Prepaid expenses |
|
1,228 |
|
1,162 |
||
Other current assets |
|
486 |
|
549 |
||
Assets held for sale |
|
56 |
|
10 |
||
Total current assets |
|
12,088 |
|
12,051 |
||
Deferred income taxes |
|
1,578 |
|
1,453 |
||
Other non-current assets |
|
443 |
|
441 |
||
Property, plant and equipment, net |
|
5,712 |
|
5,739 |
||
Operating lease right-of-use assets, net |
|
418 |
|
419 |
||
Identifiable intangible assets, net |
|
5,738 |
|
6,270 |
||
Goodwill |
|
17,118 |
|
17,633 |
||
Total assets | $ |
43,095 |
$ |
44,006 |
||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Short-term debt | $ |
1,980 |
$ |
2,109 |
||
Sales reserves and allowances |
|
3,433 |
|
3,750 |
||
Accounts payables |
|
2,508 |
|
1,887 |
||
Employee-related obligations |
|
451 |
|
566 |
||
Accrued expenses |
|
2,498 |
|
2,151 |
||
Other current liabilities |
|
973 |
|
1,005 |
||
Total current liabilities |
|
11,843 |
|
11,469 |
||
Deferred income taxes |
|
534 |
|
548 |
||
Other taxes and long-term liabilities |
|
3,973 |
|
3,847 |
||
Senior notes and loans |
|
18,698 |
|
19,103 |
||
Operating lease liabilities |
|
338 |
|
349 |
||
Total long-term liabilities |
|
23,543 |
|
23,846 |
||
Equity: | ||||||
Teva shareholders’ equity: |
|
7,052 |
|
7,897 |
||
Non-controlling interests |
|
656 |
|
794 |
||
Total equity |
|
7,708 |
|
8,691 |
||
Total liabilities and equity | $ |
43,095 |
$ |
44,006 |
||
Amounts may not add up due to rounding. |
||||||
Consolidated Statements of Income (loss) | |||||||||||||||
( |
|||||||||||||||
(Unaudited) |
|||||||||||||||
Three months ended |
Six months ended |
||||||||||||||
June 30, |
June 30, |
||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Net revenues |
3,878 |
|
3,786 |
|
7,539 |
|
7,447 |
|
|||||||
Cost of sales |
2,082 |
|
1,992 |
|
4,161 |
|
3,913 |
|
|||||||
Gross profit |
1,796 |
|
1,794 |
|
3,378 |
|
3,534 |
|
|||||||
Research and development expenses |
240 |
|
228 |
|
473 |
|
453 |
|
|||||||
Selling and marketing expenses |
603 |
|
594 |
|
1,149 |
|
1,178 |
|
|||||||
General and administrative expenses |
307 |
|
313 |
|
602 |
|
609 |
|
|||||||
Intangible assets impairments |
63 |
|
51 |
|
241 |
|
199 |
|
|||||||
Goodwill impairment |
700 |
|
745 |
|
700 |
|
745 |
|
|||||||
Other asset impairments, restructuring and other items |
100 |
|
118 |
|
195 |
|
246 |
|
|||||||
Legal settlements and loss contingencies |
462 |
|
729 |
|
695 |
|
1,854 |
|
|||||||
Other income |
(33 |
) |
(34 |
) |
(34 |
) |
(87 |
) |
|||||||
Operating income (loss) |
(646 |
) |
(949 |
) |
(644 |
) |
(1,662 |
) |
|||||||
Financial expenses, net |
268 |
|
211 |
|
528 |
|
468 |
|
|||||||
Income (loss) before income taxes |
(914 |
) |
(1,160 |
) |
(1,172 |
) |
(2,131 |
) |
|||||||
Income taxes (benefit) |
(16 |
) |
(900 |
) |
(35 |
) |
(899 |
) |
|||||||
Share in (profits) losses of associated companies, net |
(1 |
) |
- |
|
(1 |
) |
(21 |
) |
|||||||
Net income (loss) |
(898 |
) |
(259 |
) |
(1,136 |
) |
(1,211 |
) |
|||||||
Net income (loss) attributable to non-controlling interests |
(35 |
) |
(27 |
) |
(68 |
) |
(24 |
) |
|||||||
Net income (loss) attributable to Teva |
(863 |
) |
(232 |
) |
(1,068 |
) |
(1,187 |
) |
|||||||
Earnings (loss) per share attributable to ordinary shareholders: |
Basic ($) |
(0.77 |
) |
(0.21 |
) |
(0.96 |
) |
(1.07 |
) |
||||||
Diluted ($) |
(0.77 |
) |
(0.21 |
) |
(0.96 |
) |
(1.07 |
) |
|||||||
Weighted average number of shares (in millions): |
Basic |
1,120 |
|
1,110 |
|
1,118 |
|
1,109 |
|
||||||
Diluted |
1,120 |
|
1,110 |
|
1,118 |
|
1,109 |
|
|||||||
Non-GAAP net income attributable to Teva for diluted earnings per share:* |
629 |
|
754 |
|
1,085 |
|
1,363 |
|
|||||||
Non-GAAP earnings per share attributable to Teva:* |
Diluted ($) |
0.56 |
|
0.68 |
|
0.96 |
|
1.22 |
|
||||||
Non-GAAP average number of shares (in millions): |
Diluted |
1,129 |
|
1,114 |
|
1,127 |
|
1,116 |
|
||||||
Amounts may not add up due to rounding. |
|||||||||||||||
* See reconciliation attached. |
|||||||||||||||
TEVA PHARMACEUTICAL INDUSTRIES LIMITED | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||
( |
||||||||||||||
(Unaudited) |
||||||||||||||
Three months ended |
Six months ended |
|||||||||||||
June 30, |
June 30, |
|||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||
Operating activities: | ||||||||||||||
Net income (loss) | $ | (898 |
) |
(259 |
) |
$ | (1,136 |
) |
(1,211 |
) |
||||
Adjustments to reconcile net income (loss) to net cash provided by operations: | ||||||||||||||
Depreciation and amortization | 300 |
|
358 |
|
604 |
|
681 |
|
||||||
Impairment of goodwill, long-lived assets and assets held for sale | 774 |
|
810 |
|
962 |
|
975 |
|
||||||
Net change in operating assets and liabilities | 204 |
|
354 |
|
(160 |
) |
913 |
|
||||||
Deferred income taxes – net and uncertain tax positions | (44 |
) |
(1,083 |
) |
(150 |
) |
(1,258 |
) |
||||||
Stock-based compensation | 30 |
|
39 |
|
62 |
|
63 |
|
||||||
Other items | (12 |
) |
(107 |
) |
23 |
|
(77 |
) |
||||||
Net loss (gain) from investments and from sale of long lived assets | (30 |
) |
11 |
|
(26 |
) |
(12 |
) |
||||||
Net cash provided by (used in) operating activities | 324 |
|
123 |
|
179 |
|
74 |
|
||||||
Investing activities: | ||||||||||||||
Beneficial interest collected in exchange for securitized trade receivables | 371 |
|
287 |
|
694 |
|
592 |
|
||||||
Purchases of property, plant and equipment | (119 |
) |
(127 |
) |
(258 |
) |
(284 |
) |
||||||
Proceeds from sale of business and long lived assets | 56 |
|
18 |
|
58 |
|
43 |
|
||||||
Acquisition of businesses, net of cash acquired | - |
|
- |
|
- |
|
(7 |
) |
||||||
Purchases of investments and other assets | (2 |
) |
- |
|
(6 |
) |
(4 |
) |
||||||
Proceeds from sale of investments | - |
|
3 |
|
- |
|
3 |
|
||||||
Other investing activities | (4 |
) |
(2 |
) |
(5 |
) |
(2 |
) |
||||||
Net cash provided by (used in) investing activities | 302 |
|
179 |
|
483 |
|
341.3 |
|
||||||
Financing activities: | ||||||||||||||
Repayment of senior notes and loans and other long term liabilities | - |
|
(296 |
) |
(3,152 |
) |
(296 |
) |
||||||
Proceeds from senior notes, net of issuance costs | - |
|
- |
|
2,451 |
|
- |
|
||||||
Other financing activities | (55 |
) |
(42 |
) |
(60 |
) |
(40 |
) |
||||||
Net cash provided by (used in) financing activities | (55 |
) |
(338 |
) |
(761 |
) |
(336 |
) |
||||||
Translation adjustment on cash and cash equivalents | (77 |
) |
(123 |
) |
(65 |
) |
(185 |
) |
||||||
Net change in cash, cash equivalents and restricted cash | 494 |
|
(159 |
) |
(164 |
) |
(107 |
) |
||||||
Balance of cash, cash equivalents and restricted cash at beginning of period | 2,176 |
|
2,250 |
|
2,834 |
|
2,198 |
|
||||||
Balance of cash, cash equivalents and restricted cash at end of period | $ | 2,670 |
|
2,091 |
|
2,670 |
|
2,091 |
|
|||||
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: |
||||||||||||||
Cash and cash equivalents | 2,669 |
|
2,058 |
|
2,669 |
|
2,058 |
|
||||||
Restricted cash included in other current assets | 1 |
|
33 |
|
1 |
|
33 |
|
||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 2,670 |
|
2,091 |
|
2,670 |
|
2,091 |
|
||||||
Non-cash financing and investing activities: | ||||||||||||||
Beneficial interest obtained in exchange for securitized accounts receivables | $ | 380 |
|
291 |
|
714 |
|
590 |
|
|||||
Amounts may not add up due to rounding. |
||||||||||||||
Reconciliation of gross profit to non-GAAP gross profit | |||||||||||
(Unaudited) |
|||||||||||
Three months ended |
Six months ended |
||||||||||
June 30, |
June 30, |
||||||||||
($ in millions) | 2023 |
2022 |
2023 |
2022 |
|||||||
Gross profit | $ | 1,796 |
1,794 |
$ | 3,378 |
3,534 |
|||||
Gross profit margin |
|
|
|
|
|||||||
Increase (decrease) for excluded items: | |||||||||||
Amortization of purchased intangible assets | 145 |
191 |
290 |
368 |
|||||||
Costs related to regulatory actions taken in facilities | 1 |
3 |
2 |
4 |
|||||||
Equity compensation | 5 |
6 |
10 |
11 |
|||||||
Accelerated depreciation | 24 |
32 |
49 |
33 |
|||||||
Other non-GAAP items* | 51 |
34 |
89 |
95 |
|||||||
Non-GAAP gross profit | $ | 2,023 |
2,059 |
$ | 3,819 |
4,045 |
|||||
Non-GAAP gross profit margin** |
|
|
|
|
* |
Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs and other unusual events. |
|||||||
** |
Non-GAAP gross profit margin is non-GAAP gross profit as a percentage of revenue. |
|||||||
Reconciliation of operating income (loss) to non-GAAP operating income (loss) | ||||||||||||||
(Unaudited) | ||||||||||||||
Three months ended |
Six months ended |
|||||||||||||
June 30, |
June 30, |
|||||||||||||
($ in millions) | 2023 |
2022 |
2023 |
2022 |
||||||||||
Operating income (loss) | ($) |
(646 |
) |
(949 |
) |
($) |
(644 |
) |
(1,662 |
) |
||||
Operating margin | (16.7 |
%) |
(25.1 |
%) |
(8.5 |
%) |
(22.3 |
%) |
||||||
Increase (decrease) for excluded items: | ||||||||||||||
Amortization of purchased intangible assets | 162 |
|
212 |
|
326 |
|
412 |
|
||||||
Legal settlements and loss contingencies | 462 |
|
729 |
|
695 |
|
1,854 |
|
||||||
Goodwill impairment | 700 |
|
745 |
|
700 |
|
745 |
|
||||||
Impairment of long-lived assets | 74 |
|
65 |
|
262 |
|
230 |
|
||||||
Restructuring costs | 10 |
|
35 |
|
66 |
|
92 |
|
||||||
Costs related to regulatory actions taken in facilities | 1 |
|
3 |
|
2 |
|
4 |
|
||||||
Equity compensation | 30 |
|
39 |
|
62 |
|
62 |
|
||||||
Contingent consideration | 70 |
|
61 |
|
90 |
|
94 |
|
||||||
Loss (gain) on sale of business | 1 |
|
(31 |
) |
1 |
|
(31 |
) |
||||||
Accelerated depreciation | 24 |
|
32 |
|
49 |
|
33 |
|
||||||
Other non-GAAP items* | 123 |
|
80 |
|
186 |
|
201 |
|
||||||
Non-GAAP operating income (loss) | ($) |
1,011 |
|
1,019 |
|
($) |
1,796 |
|
2,032 |
|
||||
Non-GAAP operating margin** | ($) | 26.1 |
% |
26.9 |
% |
($) | 23.8 |
% |
27.3 |
% |
* |
Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events. |
||||||||
** |
Non-GAAP operating margin is non-GAAP operating income as a percentage of revenues. |
||||||||
Reconciliation of net income (loss) attributable to Teva to non-GAAP net income (loss) attributable to Teva | ||||||||||||||
(Unaudited) | ||||||||||||||
Three months ended |
Six months ended |
|||||||||||||
June 30, |
June 30, |
|||||||||||||
($ in millions except per share amounts) | 2023 |
2022 |
2023 |
2022 |
||||||||||
Net income (Loss) attributable to Teva | ($) |
(863 |
) |
(232 |
) |
($) |
(1,068 |
) |
(1,187 |
) |
||||
Increase (decrease) for excluded items: | ||||||||||||||
Amortization of purchased intangible assets | 162 |
|
212 |
|
326 |
|
412 |
|
||||||
Legal settlements and loss contingencies | 462 |
|
729 |
|
695 |
|
1,854 |
|
||||||
Goodwill impairment | 700 |
|
745 |
|
700 |
|
745 |
|
||||||
Impairment of long-lived assets | 74 |
|
65 |
|
262 |
|
230 |
|
||||||
Restructuring costs | 10 |
|
35 |
|
66 |
|
92 |
|
||||||
Costs related to regulatory actions taken in facilities | 1 |
|
3 |
|
2 |
|
4 |
|
||||||
Equity compensation | 30 |
|
39 |
|
62 |
|
63 |
|
||||||
Contingent consideration | 70 |
|
61 |
|
90 |
|
94 |
|
||||||
Loss (Gain) on sale of business | 1 |
|
(31 |
) |
1 |
|
(31 |
) |
||||||
Accelerated depreciation | 24 |
|
32 |
|
49 |
|
33 |
|
||||||
Financial expenses | 16 |
|
23 |
|
39 |
|
33 |
|
||||||
Share in profits (losses) of associated companies – net | - |
|
- |
|
- |
|
(22 |
) |
||||||
Items attributable to non-controlling interests | (49 |
) |
(39 |
) |
(90 |
) |
(50 |
) |
||||||
Other non-GAAP items* | 123 |
|
80 |
|
186 |
|
201 |
|
||||||
Corresponding tax effects and unusual tax items | (131 |
) |
(965 |
) |
(235 |
) |
(1,105 |
) |
||||||
Non-GAAP net income attributable to Teva | ($) |
629 |
|
754 |
|
($) |
1,085 |
|
1,363 |
|
||||
Non-GAAP tax rate** | 15.2 |
% |
7.7 |
% |
15.3 |
% |
12.9 |
% |
||||||
GAAP diluted earnings (loss) per share attributable to Teva | ($) |
(0.77 |
) |
(0.21 |
) |
($) |
(0.96 |
) |
(1.07 |
) |
||||
EPS difference*** | 1.33 |
|
0.89 |
|
1.92 |
|
2.29 |
|
||||||
Non-GAAP diluted earning (loss) per share attributable to Teva*** | ($) |
0.56 |
|
0.68 |
|
($) |
0.96 |
|
1.22 |
|
||||
Non-GAAP average number of shares (in millions)*** | 1,129 |
|
1,114 |
|
1,127 |
|
1,116 |
|
* |
Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events. |
||||||||
** |
Non-GAAP tax rate is tax expenses (benefit) excluding the impact of non-GAAP tax adjustments presented above as a percentage of income (loss) before income taxes excluding the impact of non-GAAP adjustments presented above. |
||||||||
*** |
EPS difference and diluted non-GAAP EPS are calculated by dividing our non-GAAP net income attributable to Teva by our non-GAAP diluted weighted average number of shares. |
||||||||
Reconciliation of net income (loss) to adjusted EBITDA | ||||||||||||||
(Unaudited) | ||||||||||||||
Three months ended |
Six months ended |
|||||||||||||
June 30, |
June 30, |
|||||||||||||
($ in millions) | $ |
2023 |
2022 |
2023 |
2022 |
|||||||||
Net income (loss) | (898 |
) |
(259 |
) |
$ |
(1,136 |
) |
(1,211 |
) |
|||||
Increase (decrease) for excluded items: | ||||||||||||||
Financial expenses | 268 |
|
211 |
|
528 |
|
468 |
|
||||||
Income taxes | (16 |
) |
(900 |
) |
(35 |
) |
(899 |
) |
||||||
Share in profits (losses) of associated companies –net | (1 |
) |
§ |
(1 |
) |
(21 |
) |
|||||||
Depreciation | 138 |
|
147 |
|
278 |
|
270 |
|
||||||
Amortization | 162 |
|
212 |
|
326 |
|
412 |
|
||||||
EBITDA | (346 |
) |
(590 |
) |
(40 |
) |
(981 |
) |
||||||
Legal settlements and loss contingencies | 462 |
|
729 |
|
695 |
|
1,854 |
|
||||||
Goodwill impairment | 700 |
|
745 |
|
700 |
|
745 |
|
||||||
Impairment of long lived assets | 74 |
|
65 |
|
262 |
|
230 |
|
||||||
Restructuring costs | 10 |
|
35 |
|
66 |
|
92 |
|
||||||
Costs related to regulatory actions taken in facilities | 1 |
|
3 |
|
2 |
|
4 |
|
||||||
Equity compensation | 30 |
|
39 |
|
62 |
|
63 |
|
||||||
Contingent consideration | 70 |
|
61 |
|
90 |
|
94 |
|
||||||
Loss (gain) on sale of business | 1 |
|
(31 |
) |
1 |
|
(31 |
) |
||||||
Other non-GAAP items * | 123 |
|
80 |
|
186 |
|
201 |
|
||||||
Adjusted EBITDA | $ |
1,125 |
|
1,134 |
|
$ |
2,024 |
|
2,269 |
|
* |
Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events. |
||||||||
Segment Information | ||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
|
|
International Markets |
||||||||||||||||||||||
Three months ended June 30, |
Three months ended June 30, |
Three months ended June 30, |
||||||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||||||
( |
( |
( |
||||||||||||||||||||||
Revenues | $ | 1,991 |
|
$ | 1,904 |
|
$ | 1,163 |
|
$ | 1,171 |
|
$ | 479 |
|
$ | 454 |
|
||||||
Gross profit | 1,046 |
|
1,010 |
|
640 |
|
703 |
|
254 |
|
242 |
|
||||||||||||
R&D expenses | 159 |
|
147 |
|
53 |
|
56 |
|
21 |
|
19 |
|
||||||||||||
S&M expenses | 264 |
|
256 |
|
194 |
|
196 |
|
110 |
|
99 |
|
||||||||||||
G&A expenses | 106 |
|
127 |
|
61 |
|
63 |
|
29 |
|
30 |
|
||||||||||||
Other income | (4 |
) |
(1 |
) |
(1 |
) |
(1 |
) |
(28 |
) |
(1 |
) |
||||||||||||
Segment profit | $ | 520 |
|
$ | 481 |
|
$ | 334 |
|
$ | 389 |
|
$ | 124 |
|
$ | 95 |
|
||||||
Segment Information | ||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
|
|
International Markets |
||||||||||||||||||||||
Six months ended June 30, |
Six months ended June 30, |
Six months ended June 30, |
||||||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||||||
( |
( |
( |
||||||||||||||||||||||
Revenues | $ | 3,757 |
|
$ | 3,641 |
|
$ | 2,347 |
|
$ | 2,327 |
|
$ | 971 |
|
$ | 946 |
|
||||||
Gross profit | 1,857 |
|
1,899 |
|
1,294 |
|
1,397 |
|
517 |
|
528 |
|
||||||||||||
R&D expenses | 315 |
|
289 |
|
106 |
|
114 |
|
40 |
|
39 |
|
||||||||||||
S&M expenses | 487 |
|
501 |
|
381 |
|
393 |
|
208 |
|
196 |
|
||||||||||||
G&A expenses | 208 |
|
239 |
|
130 |
|
122 |
|
60 |
|
60 |
|
||||||||||||
Other income | (5 |
) |
(12 |
) |
(1 |
) |
(1 |
) |
(29 |
) |
(41 |
) |
||||||||||||
Segment profit | $ | 852 |
|
$ | 883 |
|
$ | 679 |
|
$ | 769 |
|
$ | 237 |
|
$ | 274 |
|
||||||
Reconciliation of our segment profit to consolidated income before income taxes | ||||||||
(Unaudited) |
||||||||
Three months ended |
||||||||
June 30, |
||||||||
2023 |
2022 |
|||||||
(U.S.$ in millions) |
||||||||
$ | 520 |
|
$ | 481 |
|
|||
334 |
|
389 |
|
|||||
International Markets profit | 124 |
|
95 |
|
||||
Total reportable segment profit | 977 |
|
964 |
|
||||
Profit of other activities | 33 |
|
55 |
|
||||
Total segments profit | 1,011 |
|
1,019 |
|
||||
Amounts not allocated to segments: | ||||||||
Amortization | 162 |
|
212 |
|
||||
Other asset impairments, restructuring and other items | 100 |
|
118 |
|
||||
Goodwill impairment | 700 |
|
745 |
|
||||
Intangible asset impairments | 63 |
|
51 |
|
||||
Legal settlements and loss contingencies | 462 |
|
729 |
|
||||
Other unallocated amounts | 170 |
|
113 |
|
||||
Consolidated operating income (loss) | (646 |
) |
(949 |
) |
||||
Financial expenses - net | 268 |
|
211 |
|
||||
Consolidated income (loss) before income taxes | $ | (914 |
) |
$ | (1,160 |
) |
||
Reconciliation of our segment profit to consolidated income before income taxes | ||||||||
(Unaudited) |
||||||||
Six months ended |
||||||||
June 30, |
||||||||
2023 |
2022 |
|||||||
(U.S.$ in millions) |
||||||||
$ | 852 |
|
$ | 883 |
|
|||
679 |
|
769 |
|
|||||
International Markets profit | 237 |
|
274 |
|
||||
Total reportable segment profit | 1,769 |
|
1,926 |
|
||||
Profit of other activities | 27 |
|
107 |
|
||||
Total segments profit | 1,796 |
|
2,032 |
|
||||
Amounts not allocated to segments: | ||||||||
Amortization | 326 |
|
412 |
|
||||
Other asset impairments, restructuring and other items | 195 |
|
246 |
|
||||
Goodwill impairment | 700 |
|
745 |
|
||||
Intangible asset impairments | 241 |
|
199 |
|
||||
Legal settlements and loss contingencies | 695 |
|
1,854 |
|
||||
Other unallocated amounts | 282 |
|
240 |
|
||||
Consolidated operating income (loss) | (644 |
) |
(1,662 |
) |
||||
Financial expenses - net | 528 |
|
468 |
|
||||
Consolidated income (loss) before income taxes | $ | (1,172 |
) |
$ | (2,131 |
) |
||
Segment revenues by major products and activities | ||||||||
(Unaudited) |
||||||||
Three months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
Generic products | $ | 969 |
$ | 1,026 |
( |
|||
AJOVY | 57 |
49 |
|
|||||
AUSTEDO | 308 |
204 |
|
|||||
BENDEKA/TREANDA | 69 |
83 |
( |
|||||
COPAXONE | 64 |
94 |
( |
|||||
Anda | 392 |
308 |
|
|||||
Other | 133 |
139 |
( |
|||||
Total | 1,991 |
1,904 |
|
|||||
Three months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
Generic products | $ | 909 |
$ | 873 |
|
|||
AJOVY | 39 |
29 |
|
|||||
COPAXONE | 60 |
72 |
( |
|||||
Respiratory products | 66 |
65 |
|
|||||
Other | 89 |
131 |
( |
|||||
Total | 1,163 |
1,171 |
( |
|||||
Three months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
International Markets segment | ||||||||
Generic products | $ | 394 |
$ | 394 |
§ |
|||
AJOVY | 9 |
10 |
( |
|||||
COPAXONE | 10 |
9 |
|
|||||
Other | 67 |
40 |
|
|||||
Total | 479 |
454 |
|
|||||
Revenues by Activity and Geographical Area | ||||||||
(Unaudited) |
||||||||
Six months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
Generic products | $ | 1,793 |
$ | 1,925 |
( |
|||
AJOVY | 107 |
86 |
|
|||||
AUSTEDO | 478 |
358 |
|
|||||
BENDEKA / TREANDA | 131 |
165 |
( |
|||||
COPAXONE | 139 |
180 |
( |
|||||
Anda | 816 |
650 |
|
|||||
Other | 293 |
278 |
|
|||||
Total | 3,757 |
3,641 |
|
|||||
Six months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
Generic products | $ | 1,841 |
$ | 1,749 |
|
|||
AJOVY | 74 |
60 |
|
|||||
COPAXONE | 119 |
144 |
( |
|||||
Respiratory products | 134 |
137 |
( |
|||||
Other | 178 |
238 |
( |
|||||
Total | 2,347 |
2,327 |
|
|||||
Six months ended |
||||||||
June 30, |
Percentage Change |
|||||||
2023 |
2022 |
2022-2023 |
||||||
(U.S.$ in millions) |
||||||||
International Markets segment | ||||||||
Generic products | $ | 793 |
$ | 782 |
|
|||
AJOVY | 19 |
16 |
|
|||||
COPAXONE | 22 |
20 |
|
|||||
Other | 137 |
128 |
|
|||||
Total | 971 |
946 |
|
|||||
Free cash flow reconciliation | ||||||||
(Unaudited) |
||||||||
Three months ended June 30, |
||||||||
2023 |
2022 |
|||||||
( |
||||||||
Net cash provided by (used in) operating activities | 324 |
|
123 |
|
||||
Beneficial interest collected in exchange for securitized trade receivables | 371 |
|
287 |
|
||||
Purchases of property, plant and equipment | (119 |
) |
(127 |
) |
||||
Proceeds from sale of business and long lived assets | 56 |
|
18 |
|
||||
Free cash flow | $ | 632 |
|
$ | 301 |
|
||
Free cash flow reconciliation | ||||||||
(Unaudited) |
||||||||
Six months ended June 30, |
||||||||
2023 |
2022 |
|||||||
( |
||||||||
Net cash provided by (used in) operating activities | 179 |
|
74 |
|
||||
Beneficial interest collected in exchange for securitized accounts receivables | 694 |
|
592 |
|
||||
Purchases of property, plant and equipment | (258 |
) |
(284 |
) |
||||
Proceeds from sale of business and long lived assets | 58 |
|
43 |
|
||||
Free cash flow | $ | 673 |
|
$ | 425 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802325185/en/
IR Contacts
Ran Meir (267) 468-4475
Yael Ashman +972 (3) 914 8262
Sanjeev Sharma (267) 658-2700
PR Contacts
Kelley Dougherty (973) 832-2810
Eden Klein +972 (3) 906 2645
Source: Teva Pharmaceutical Industries Limited