Endo Reports First-Quarter 2018 Financial

Endo Reports First-Quarter 2018 Financial Results

https://finance.yahoo.com/news/endo-reports-f...00913.html

DUBLIN, May 8, 2018 /PRNewswire/ --

First-quarter 2018 revenues of $701 million
First-quarter 2018 Branded Specialty Products revenues increased 7 percent versus first-quarter 2017 to $112 million
First-quarter 2018 XIAFLEX® franchise revenues increased 15 percent versus first-quarter 2017 to $57 million
First-quarter 2018 Sterile Injectables revenues increased 25 percent versus first-quarter 2017 to $216 million
First-quarter 2018 reported (GAAP) net loss of $505 million driven by pre-tax, non-cash asset impairment charges of $448 million
First-quarter 2018 adjusted EBITDA of $334 million
Company affirms 2018 full-year revenues, adjusted EBITDA and adjusted EPS guidance
Endo International plc (ENDP) today reported first-quarter 2018 financial results, including:

Revenues of $701 million, a 32 percent decrease compared to first-quarter 2017 revenues of $1,038 million.
Reported net loss from continuing operations of $498 million compared to first-quarter 2017 reported net loss from continuing operations of $165 million.
Reported diluted loss per share from continuing operations of $2.23 compared to first-quarter 2017 reported diluted loss per share from continuing operations of $0.74.
Adjusted income from continuing operations of $151 million compared to first-quarter 2017 adjusted income from continuing operations of $275 million.
Adjusted diluted EPS from continuing operations of $0.67 compared to first-quarter 2017 adjusted diluted EPS from continuing operations of $1.23.
Adjusted EBITDA of $334 million compared to first-quarter 2017 adjusted EBITDA of $478 million.
"Endo delivered strong first-quarter operating results in our core focus areas as revenue growth accelerated for both our XIAFLEX® franchise and Sterile Injectable business. We are currently on target to meet the full-year financial guidance we provided earlier this year," said Paul Campanelli, President and CEO of Endo. "Importantly, we continue to execute our multi-year turnaround plan and build our portfolio for the future by advancing our CCH cellulite treatment development program with the initiation of and recruitment for two pivotal Phase 3 trials. In addition, as we recently announced, we expect to significantly enhance our Sterile Injectables pipeline through the acquisition of Somerset Therapeutics."

Diluted per share data is computed based on weighted average shares outstanding and, if there is income from continuing operations during the period, the dilutive impact of 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.

First-quarter 2018 U.S. Generic Pharmaceuticals results include:

Revenues of $249 million, a 55 percent decrease compared to first-quarter 2017; this decline was primarily attributable to the loss of marketing exclusivity in the first half of 2017 for the first-to-file products ezetimibe tablets and quetiapine ER tablets. Also contributing to the decline was the annualization of the impact from 2017 competitive entries and previously announced product discontinuances.
INTERNATIONAL PHARMACEUTICALS

First-quarter 2018 International Pharmaceuticals revenues were $35 million, compared to $65 million in the same period in 2017. The decline is primarily attributable to the sales of Litha and Somar in the second-half of 2017.

2018 FINANCIAL GUIDANCE

For the full twelve months ending December 31, 2018, at current exchange rates, Endo affirms its previously provided guidance on revenue, adjusted diluted EPS from continuing operations and adjusted EBITDA from continuing operations. The Company estimates:

Total revenues to be between $2.6 billion and $2.8 billion;
Adjusted diluted EPS from continuing operations to be between $2.15 and $2.55; and
Adjusted EBITDA from continuing operations to be between $1.2 billion and $1.3 billion.
The Company's 2018 non-GAAP financial guidance is based on the following assumptions:

Adjusted gross margin of approximately 67.0% to 68.0%;
Adjusted operating expenses as a percentage of revenues of approximately 25.5% to 26.5%;
Adjusted interest expense of approximately $530 million to $540 million;
Adjusted effective tax rate of approximately 11.0% to 12.0%; and
Adjusted diluted weighted average shares outstanding of approximately 226 million.
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES

As of March 31, 2018, the Company had $980 million in unrestricted cash; debt of $8.3 billion; net debt of approximately $7.3 billion and a net debt to adjusted EBITDA ratio of 5.1.

First-quarter 2018 cash provided by operating activities was $49 million, compared to $168 million of net cash provided by operating activities in the comparable 2017 period. The 2017 period included the impact of cash receipts for ezetimibe tablets and quetiapine ER tablets, which did not reoccur during the 2018 period, and higher payments related to U.S. mesh product liability claims.

During first-quarter 2018, the Company recorded pre-tax, non-cash asset impairment charges of $448 million, $391 million of which related to goodwill and $54 million of which related to other intangible assets.

CONFERENCE CALL INFORMATION

Endo will conduct a conference call with financial analysts to discuss this press release today at 7:30 a.m. ET. The dial-in number to access the call is U.S./Canada (866) 497-0462, International (678) 509-7598, and the passcode is 4839597. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from May 8, 2018 at 10:30 a.m. ET until 10:30 a.m. ET on May 11, 2018 by dialing U.S./Canada (855) 859-2056, International (404) 537-3406, and entering the passcode 4839597.

A simultaneous webcast of the call can be accessed by visiting http://investor.endo.com/events-and-presentations. In addition, a replay of the webcast will be available on the Company website for one year following the event.

CONSOLIDATED RESULTS

As anticipated, total revenues decreased by 32 percent to $701 million in first-quarter 2018 compared to the same period in 2017. The decline was primarily due to the loss of marketing exclusivity in the first half of 2017 for the first-to-file U.S. Generic Pharmaceuticals products ezetimibe tablets, the generic version of ZETIA®, and quetiapine extended-release (ER) tablets, the generic version of SEROQUEL XR®, both of which launched in fourth-quarter 2016. Also contributing to the decline in total revenues were the annualization of the impact from 2017 competitive entries and product discontinuances in the U.S. Generic Pharmaceuticals segment, the divestitures of the Company's South African and Mexican businesses, Litha and Somar, and the voluntary withdrawal of OPANA® ER.

GAAP net loss from continuing operations in first-quarter 2018 was $498 million compared to GAAP net loss from continuing operations of $165 million during the same period in 2017. This increase was primarily due to an increase of $244 million in pre-tax, non-cash asset impairment charges in first-quarter 2018. GAAP diluted net loss per share from continuing operations for first-quarter 2018 was $2.23, compared to GAAP diluted net loss per share from continuing operations of $0.74 in first-quarter 2017.

Adjusted income from continuing operations in first-quarter 2018 was $151 million compared to $275 million in first-quarter 2017. This decrease resulted primarily from lower revenues of ezetimibe tablets and quetiapine ER tablets, the divestitures of Litha and Somar, the voluntary withdrawal of OPANA® ER and an increase of $12 million in net interest expense. Adjusted diluted EPS from continuing operations in first-quarter 2018 was $0.67 compared to $1.23 in first-quarter 2017.

U.S. BRANDED - SPECIALTY & ESTABLISHED PHARMACEUTICALS

During the first-quarter, Endo advanced its cellulite treatment development program. In February, the Company initiated two Phase 3 clinical trials of collagenase clostridium histolyticum (or "CCH" for the treatment of cellulite. In April, CCH for the treatment of cellulite was presented during the Hot Topics Symposium, a highlight of The Aesthetics Meeting 2018, the annual meeting of the American Society for Aesthetic Plastic Surgery.

First-quarter 2018 U.S. Branded - Specialty & Established Pharmaceuticals results include:

Revenues of $200 million, a 20 percent decrease compared to first-quarter 2017; this decrease was primarily attributable to the voluntary cessation of OPANA® ER shipments in the third-quarter of 2017.
Specialty Products revenues increased 7 percent in first-quarter 2018 compared to the same period in 2017, driven by strong performance from XIAFLEX® and other products within our Specialty Products portfolio. Sales of XIAFLEX® increased 15 percent compared to first-quarter 2017; this increase was primarily attributable to volume growth in both Dupuytren's Contracture and Peyronie's Disease.
U.S. BRANDED - STERILE INJECTABLES

In April, Endo announced that it entered into definitive agreements to acquire Somerset Therapeutics, LLC, a specialty pharmaceutical company that develops and markets sterile injectable and ophthalmic drugs for the U.S. marketplace, and the business of its affiliate Wintac Limited, which operates as Somerset Therapeutics' contract developer and manufacturer, for approximately $190 million. Somerset Therapeutics' portfolio includes 8 commercial products and a pipeline of more than 40 products, of which over 25 have been filed with the U.S. Food and Drug Administration. In May, the Company launched glycopyrrolate injection, the generic version of ROBINUL®, as Somerset Therapeutics' exclusive distributor.

First-quarter 2018 U.S. Branded - Sterile Injectables results include:

Revenues of $216 million, a 25 percent increase compared to first-quarter 2017; this increase was primarily attributable to strong growth of ADRENALIN® and VASOSTRICT®.
U.S. GENERIC PHARMACEUTICALS

During first-quarter 2018, the U.S. Generic Pharmaceuticals segment launched two products and submitted two regulatory filings. In April, the segment launched praziquantel tablets, the first-to-market generic version of BILTRICIDE®.