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Endo Reports Third-Quarter 2018 Financial Results

November 8, 2018

DUBLIN, Nov. 8, 2018 /PRNewswire/ -- 

  • Third-quarter 2018 revenues of $745 million compared to third-quarter 2017 revenues of $787 million
  • Third-quarter 2018 XIAFLEX® franchise revenues increased 22 percent versus third-quarter 2017 to $64 million
  • Third-quarter 2018 Sterile Injectables revenues increased 17 percent versus third-quarter 2017 to $237 million
  • Company raises 2018 financial guidance

Endo International plc (NASDAQ: ENDP) today reported third-quarter 2018 financial results, including:

  • Revenues of $745 million, a decrease of 5 percent compared to third-quarter 2017 revenues of $787 million; revenues increased 4 percent compared to second-quarter 2018.
  • Reported net loss from continuing operations of $146 million compared to third-quarter 2017 reported net loss from continuing operations of $100 million.
  • Reported diluted loss per share from continuing operations of $0.65 compared to third-quarter 2017 reported diluted loss per share from continuing operations of $0.45.
  • Adjusted income from continuing operations of $165 million compared to third-quarter 2017 adjusted income from continuing operations of $204 million.
  • Adjusted diluted EPS from continuing operations of $0.71 compared to third-quarter 2017 adjusted diluted EPS from continuing operations of $0.91.
  • Adjusted EBITDA of $328 million compared to third-quarter 2017 adjusted EBITDA of $375 million.

"We had strong operational performance in the quarter, delivering double-digit growth in our U.S. Branded Sterile Injectables business and in the Specialty Products portfolio of our U.S. Branded - Specialty & Established Pharmaceuticals business," said Paul Campanelli, President and Chief Executive Officer of Endo. "We are focused on enhancing our capabilities in these businesses through the Somerset/Wintac acquisition, which we anticipate will close during the first quarter of 2019, and on our planned expansion into the medical aesthetics market. On that front, I am extremely pleased with the previously reported positive results from the Phase 3 CCH for cellulite clinical trials and I look forward to taking the next steps to bring this treatment to patients."

FINANCIAL PERFORMANCE

 

(in thousands, except per share amounts)

 
 

Three Months Ended September 30,

     

Nine Months Ended September 30,

   
 

2018

 

2017

 

Change

 

2018

 

2017

 

Change

Total Revenues

$

745,466

   

$

786,887

   

(5)

%

 

$

2,160,689

   

$

2,700,218

   

(20)

%

Reported Loss from Continuing Operations

$

(146,071)

   

$

(99,687)

   

47

%

 

$

(696,288)

   

$

(961,130)

   

(28)

%

Reported Diluted Weighted Average Shares

224,132

   

223,299

   

%

 

223,829

   

223,157

   

%

Reported Diluted Loss per Share from Continuing Operations

$

(0.65)

   

$

(0.45)

   

44

%

 

$

(3.11)

   

$

(4.31)

   

(28)

%

Adjusted Income from Continuing Operations

$

164,845

   

$

204,052

   

(19)

%

 

$

487,823

   

$

686,498

   

(29)

%

Adjusted Diluted Weighted Average Shares1

232,358

   

224,216

   

4

%

 

228,195

   

223,779

   

2

%

Adjusted Diluted EPS from Continuing Operations

$

0.71

   

$

0.91

   

(22)

%

 

$

2.14

   

$

3.07

   

(30)

%

__________

(1)

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.

 

CONSOLIDATED RESULTS

Total revenues were $745 million in third-quarter 2018 compared to $787 million in the same period in 2017. This performance was primarily attributable to competitive pressures and product discontinuations in the U.S. Generic Pharmaceutical segment, the divestiture of the Company's Mexican business, Somar, and the voluntary market withdrawal of OPANA® ER. These factors were partially offset by the launch of ertapenem for injection, the authorized generic of INVANZ®, and continued strong growth in the U.S. Branded - Sterile Injectables segment.

GAAP net loss from continuing operations in third-quarter 2018 was $146 million compared to GAAP net loss from continuing operations of $100 million during the same period in 2017. This result was primarily attributable to the gross margin impact of the quarter's revenue reduction and increased asset impairment charges. GAAP diluted net loss per share from continuing operations for third-quarter 2018 was $0.65 compared to GAAP diluted net loss per share from continuing operations of $0.45 in third-quarter 2017.

Adjusted income from continuing operations in third-quarter 2018 was $165 million compared to $204 million in third-quarter 2017. This performance was primarily attributable to the divestiture of Somar and the voluntary market withdrawal of OPANA® ER. Adjusted diluted EPS from continuing operations in third-quarter 2018 was $0.71 compared to $0.91 in third-quarter 2017.

U.S. BRANDED - SPECIALTY & ESTABLISHED PHARMACEUTICALS

In November 2018, the Company reported positive results from two Phase 3 clinical trials of collagenase clostridium histolyticum (or "CCH") for the treatment of cellulite in the buttocks. Trial subjects receiving CCH showed highly statistically significant levels of improvement in the appearance of cellulite with treatment, as measured by the trial's primary endpoint.

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

  • Revenues of $220 million compared to $234 million in third-quarter 2017; this performance was primarily attributable to the voluntary cessation of OPANA® ER shipments in third-quarter 2017. Excluding the impact of OPANA® ER, revenues were consistent with third-quarter 2017.
  • Specialty Products revenues increased 13 percent in third-quarter 2018 compared to third-quarter 2017, primarily driven by the continued strong performance from XIAFLEX®. Sales of XIAFLEX® increased 22 percent compared to third-quarter 2017; this increase was primarily attributable to volume growth in both Peyronie's Disease and Dupuytren's Contracture indications.

U.S. BRANDED - STERILE INJECTABLES

During third-quarter 2018, the U.S. Branded Sterile Injectables segment launched ertapenem for injection, the authorized generic of INVANZ®.

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

  • Revenues of $237 million, an increase of 17 percent compared to third-quarter 2017. This increase was primarily attributable to the launch of ertapenem for injection and the continued strong growth of ADRENALIN® and VASOSTRICT®.

U.S. GENERIC PHARMACEUTICALS

During third-quarter 2018, the U.S. Generic Pharmaceuticals segment launched 3 products, including colchicine tablets, the authorized generic of COLCRYS®, which was the result of a first-to-file paragraph four settlement agreement.

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

  • Revenues of $258 million compared to $295 million in third-quarter 2017; this performance was primarily attributable to competitive pressures in the generic business and previously announced product discontinuations, partially offset by the launch of colchicine tablets.

INTERNATIONAL PHARMACEUTICALS

Third-quarter 2018 International Pharmaceuticals revenues were $30 million, compared to $56 million in the same period in 2017. This performance is primarily attributable to the Somar divestiture in the fourth-quarter of 2017.

2018 FINANCIAL GUIDANCE

For the full twelve months ending December 31, 2018, at current exchange rates, Endo is raising its financial guidance. The Company now estimates:

  • Total revenues to be between $2.87 billion and $2.92 billion;
  • Adjusted diluted EPS from continuing operations to be between $2.65 and $2.75; and
  • Adjusted EBITDA from continuing operations to be between $1.32 billion and $1.34 billion.

The Company's 2018 non-GAAP financial guidance is based on the following assumptions:

  • Adjusted gross margin of approximately 68.5%;
  • Adjusted operating expenses as a percentage of revenues of approximately 27.0%;
  • Adjusted interest expense of approximately $525 million;
  • Adjusted effective tax rate of approximately 8.5% to 9.5%; and
  • Adjusted diluted weighted average shares outstanding of approximately 230 million.

BALANCE SHEET, LIQUIDITY AND OTHER UPDATES

As of September 30, 2018, the Company had $1.1 billion in unrestricted cash; debt of $8.3 billion; net debt of approximately $7.1 billion and a net debt to adjusted EBITDA ratio of 5.3.

Third-quarter 2018 cash used in operating activities was $22 million, compared to $83 million of net cash provided by operating activities in the comparable 2017 period.

CONFERENCE CALL INFORMATION

Endo will conduct a conference call with financial analysts to discuss this press release today at 8:00 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 6154109. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from November 8, 2018 at 11:00 a.m. ET until 11:00 a.m. ET on November 11, 2018 by dialing U.S./Canada (855) 859-2056, International (404) 537-3406, and entering the passcode 6154109.

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.

VOLTAREN is a registered trademark of Novartis Corporation
COLCRYS is a registered trademark of Takeda Pharmaceuticals U.S.A., Inc.
INVANZ is a registered trademark of Merck Sharp & Dohme Corp.

 

FINANCIAL SCHEDULES

 

The following table presents Endo's unaudited Total Revenues for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands):

 
 

Three Months Ended September 30,

 

Percent
Growth

 

Nine Months Ended September 30,

 

Percent
Growth

 

2018

 

2017

   

2018

 

2017

 

U.S. Branded - Specialty &
Established Pharmaceuticals:

                     

Specialty Products:

                     

XIAFLEX®

$

64,214

   

$

52,511

   

22

%

 

$

184,855

   

$

152,113

   

22

%

SUPPRELIN® LA

20,408

   

20,638

   

(1)

%

 

60,948

   

63,468

   

(4)

%

Other Specialty (1)

43,576

   

40,634

   

7

%

 

114,202

   

113,407

   

1

%

Total Specialty Products

$

128,198

   

$

113,783

   

13

%

 

$

360,005

   

$

328,988

   

9

%

Established Products:

                     

PERCOCET®

$

30,730

   

$

31,349

   

(2)

%

 

$

93,539

   

$

93,183

   

%

VOLTAREN® Gel

15,057

   

19,102

   

(21)

%

 

44,185

   

53,646

   

(18)

%

OPANA® ER

   

14,756

   

(100)

%

 

   

82,056

   

(100)

%

Other Established (2)

46,115

   

54,813

   

(16)

%

 

135,243

   

171,277

   

(21)

%

Total Established Products

$

91,902

   

$

120,020

   

(23)

%

 

$

272,967

   

$

400,162

   

(32)

%

Total U.S. Branded - Specialty &
Established Pharmaceuticals (3)

$

220,100

   

$

233,803

   

(6)

%

 

$

632,972

   

$

729,150

   

(13)

%

U.S. Branded - Sterile Injectables:

                     

VASOSTRICT®

$

112,333

   

$

105,741

   

6

%

 

$

332,387

   

$

300,649

   

11

%

ADRENALIN®

35,460

   

25,335

   

40

%

 

101,858

   

50,464

   

NM

Ertapenem for injection

25,798

   

   

NM

 

25,798

   

   

NM

Other Sterile Injectables (4)

63,559

   

70,829

   

(10)

%

 

210,804

   

203,252

   

4

%

Total U.S. Branded - Sterile Injectables (3)

$

237,150

   

$

201,905

   

17

%

 

$

670,847

   

$

554,365

   

21

%

Total U.S. Generic Pharmaceuticals

$

257,969

   

$

294,749

   

(12)

%

 

$

748,445

   

$

1,227,584

   

(39)

%

Total International Pharmaceuticals

$

30,247

   

$

56,430

   

(46)

%

 

$

108,425

   

$

189,119

   

(43)

%

Total Revenues

$

745,466

   

$

786,887

   

(5)

%

 

$

2,160,689

   

$

2,700,218

   

(20)

%

__________

(1)

Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray and AVEED®.

(2)

Products included within Other Established include, but are not limited to, LIDODERM®, EDEX®, TESTIM® and FORTESTA® Gel, including the authorized generics.

(3)

Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2018 or 2017.

(4)

Products included within Other Sterile Injectables include, but are not limited to, APLISOL® and ephedrine sulfate injection.

 

 

 

The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data):

 
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2018

 

2017

 

2018

 

2017

TOTAL REVENUES

$

745,466

   

$

786,887

   

$

2,160,689

   

$

2,700,218

 

COSTS AND EXPENSES:

             

Cost of revenues

412,965

   

514,522

   

1,198,468

   

1,722,885

 

Selling, general and administrative

163,791

   

135,880

   

478,615

   

468,675

 

Research and development

39,683

   

39,644

   

160,431

   

123,522

 

Litigation-related and other contingencies, net

(1,750)

   

(12,352)

   

15,370

   

(14,016)

 

Asset impairment charges

142,217

   

94,924

   

613,400

   

1,023,930

 

Acquisition-related and integration items

1,288

   

16,641

   

13,284

   

31,711

 

OPERATING LOSS FROM CONTINUING OPERATIONS

$

(12,728)

   

$

(2,372)

   

$

(318,879)

   

$

(656,489)

 

INTEREST EXPENSE, NET

131,847

   

127,521

   

385,896

   

361,267

 

LOSS ON EXTINGUISHMENT OF DEBT

   

   

   

51,734

 

OTHER INCOME, NET

(1,507)

   

(2,097)

   

(33,216)

   

(10,843)

 

LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME TAX

$

(143,068)

   

$

(127,796)

   

$

(671,559)

   

$

(1,058,647)

 

INCOME TAX EXPENSE (BENEFIT)

3,003

   

(28,109)

   

24,729

   

(97,517)

 

LOSS FROM CONTINUING OPERATIONS

$

(146,071)

   

$

(99,687)

   

$

(696,288)

   

$

(961,130)

 

DISCONTINUED OPERATIONS, NET OF TAX

(27,134)

   

3,017

   

(43,273)

   

(705,886)

 

NET LOSS

$

(173,205)

   

$

(96,670)

   

$

(739,561)

   

$

(1,667,016)

 

NET (LOSS) INCOME PER SHARE—BASIC:

             

Continuing operations

$

(0.65)

   

$

(0.45)

   

$

(3.11)

   

$

(4.31)

 

Discontinued operations

(0.12)

   

0.02

   

(0.19)

   

(3.16)

 

Basic

$

(0.77)

   

$

(0.43)

   

$

(3.30)

   

$

(7.47)

 

NET (LOSS) INCOME PER SHARE—DILUTED:

             

Continuing operations

$

(0.65)

   

$

(0.45)

   

$

(3.11)

   

$

(4.31)

 

Discontinued operations

(0.12)

   

0.02

   

(0.19)

   

(3.16)

 

Diluted

$

(0.77)

   

$

(0.43)

   

$

(3.30)

   

$

(7.47)

 

WEIGHTED AVERAGE SHARES:

             

Basic

224,132

   

223,299

   

223,829

   

223,157

 

Diluted

224,132

   

223,299

   

223,829

   

223,157

 
 

 

 

The following table presents unaudited Condensed Consolidated Balance Sheet data at September 30, 2018 and December 31, 2017 (in thousands):

 
 

September 30,
2018

 

December 31,
2017

ASSETS

     

CURRENT ASSETS:

     

Cash and cash equivalents

$

1,118,885

   

$

986,605

 

Restricted cash and cash equivalents

289,667

   

320,453

 

Accounts receivable

467,156

   

517,436

 

Inventories, net

332,787

   

391,437

 

Other current assets

67,104

   

55,146

 

Total current assets

$

2,275,599

   

$

2,271,077

 

TOTAL NON-CURRENT ASSETS

8,246,063

   

9,364,503

 

TOTAL ASSETS

$

10,521,662

   

$

11,635,580

 

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

     

CURRENT LIABILITIES:

     

Accounts payable and accrued expenses, including legal settlement accruals

$

1,985,637

   

$

2,184,618

 

Other current liabilities

35,831

   

36,291

 

Total current liabilities

$

2,021,468

   

$

2,220,909

 

LONG-TERM DEBT, LESS CURRENT PORTION, NET

8,228,612

   

8,242,032

 

OTHER LIABILITIES

491,041

   

687,759

 

SHAREHOLDERS' (DEFICIT) EQUITY

(219,459)

   

484,880

 

TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

$

10,521,662

   

$

11,635,580

 
 

 

 

The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the nine months ended September 30, 2018 and 2017 (in thousands):

 
 

Nine Months Ended September 30,

 

2018

 

2017

OPERATING ACTIVITIES:

     

Net loss

$

(739,561)

   

$

(1,667,016)

 

Adjustments to reconcile Net loss to Net cash provided by operating activities:

     

Depreciation and amortization

556,503

   

742,936

 

Asset impairment charges

613,400

   

1,023,930

 

Other, including cash payments to claimants from Qualified Settlement Funds

(233,350)

   

322,312

 

Net cash provided by operating activities

$

196,992

   

$

422,162

 

INVESTING ACTIVITIES:

     

Purchases of property, plant and equipment, excluding capitalized interest

$

(56,544)

   

$

(94,102)

 

Proceeds from sale of business and other assets, net

43,753

   

96,066

 

Other

(891)

   

7,000

 

Net cash (used in) provided by investing activities

$

(13,682)

   

$

8,964

 

FINANCING ACTIVITIES:

     

Payments on borrowings, net

$

(29,535)

   

$

(12,325)

 

Other

(33,273)

   

(123,028)

 

Net cash used in financing activities

$

(62,808)

   

$

(135,353)

 

Effect of foreign exchange rate

(608)

   

3,983

 

Movement in cash held for sale

   

(1,450)

 

NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND
RESTRICTED CASH EQUIVALENTS

$

119,894

   

$

298,306

 

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, BEGINNING OF PERIOD

1,311,014

   

805,180

 

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, END OF PERIOD

$

1,430,908

   

$

1,103,486

 
 

 

SUPPLEMENTAL FINANCIAL INFORMATION

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures. For additional information on the Company's use of such non-GAAP financial measures, refer to Endo's Current Report on Form 8-K furnished today to the U.S. Securities and Exchange Commission, which includes an explanation of the Company's reasons for using non-GAAP measures.

The tables below provide reconciliations of certain of our 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 and nine months ended September 30, 2018 and 2017 (in thousands):

 
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2018

 

2017

 

2018

 

2017

Net loss (GAAP)

$

(173,205)

   

$

(96,670)

   

$

(739,561)

   

$

(1,667,016)

 

Income tax expense (benefit)

3,003

   

(28,109)

   

24,729

   

(97,517)

 

Interest expense, net

131,847

   

127,521

   

385,896

   

361,267

 

Depreciation and amortization (15)

176,856

   

183,475

   

521,325

   

680,385

 

EBITDA (non-GAAP)

$

138,501

   

$

186,217

   

$

192,389

   

$

(722,881)

 
               

Inventory step-up and other cost savings (2)

$

71

   

$

66

   

$

261

   

$

281

 

Upfront and milestone-related payments (3)

4,731

   

775

   

43,027

   

6,952

 

Inventory reserve increase from restructuring (4)

207

   

   

2,797

   

7,899

 

Separation benefits and other restructuring (5)

3,794

   

80,693

   

79,344

   

120,078

 

Certain litigation-related and other contingencies, net (6)

(1,750)

   

(12,352)

   

15,370

   

(14,016)

 

Asset impairment charges (7)

142,217

   

94,924

   

613,400

   

1,023,930

 

Acquisition-related and integration costs (8)

519

   

1,201

   

1,553

   

8,137

 

Fair value of contingent consideration (9)

769

   

15,440

   

11,731

   

23,574

 

Loss on extinguishment of debt (10)

   

   

   

51,734

 

Share-based compensation

13,736

   

13,247

   

43,722

   

40,252

 

Other income, net (16)

(1,507)

   

(2,097)

   

(33,216)

   

(10,843)

 

Other adjustments

(67)

   

(58)

   

(775)

   

(75)

 

Discontinued operations, net of tax (13)

27,134

   

(3,017)

   

43,273

   

705,886

 

Adjusted EBITDA (non-GAAP)

$

328,355

   

$

375,039

   

$

1,012,876

   

$

1,240,908

 
 

 

 

Reconciliation of Adjusted Income from Continuing Operations (non-GAAP)

 

The following table provides a reconciliation of our Loss from continuing operations (GAAP) to our Adjusted income from continuing operations (non-GAAP) for the three and nine months ended September 30, 2018 and 2017 (in thousands):

 
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2018

 

2017

 

2018

 

2017

Loss from continuing operations (GAAP)

$

(146,071)

   

$

(99,687)

   

$

(696,288)

   

$

(961,130)

 

Non-GAAP adjustments:

             

Amortization of intangible assets (1)

161,275

   

161,413

   

471,662

   

615,490

 

Inventory step-up and other cost savings (2)

71

   

66

   

261

   

281

 

Upfront and milestone-related payments (3)

4,731

   

775

   

43,027

   

6,952

 

Inventory reserve increase from restructuring (4)

207

   

   

2,797

   

7,899

 

Separation benefits and other restructuring (5)

3,794

   

80,693

   

79,344

   

120,078

 

Certain litigation-related and other contingencies, net (6)

(1,750)

   

(12,352)

   

15,370

   

(14,016)

 

Asset impairment charges (7)

142,217

   

94,924

   

613,400

   

1,023,930

 

Acquisition-related and integration costs (8)

519

   

1,201

   

1,553

   

8,137

 

Fair value of contingent consideration (9)

769

   

15,440

   

11,731

   

23,574

 

Loss on extinguishment of debt (10)

   

   

   

51,734

 

Other (11)

1,353

   

3,035

   

(29,908)

   

(1,133)

 

Tax adjustments (12)

(2,270)

   

(41,456)

   

(25,126)

   

(195,298)

 

Adjusted income from continuing operations (non-GAAP)

$

164,845

   

$

204,052

   

$

487,823

   

$

686,498

 
 

 

 

Reconciliation of Other Adjusted Income Statement Data (non-GAAP)

 

The following tables provide detailed reconciliations of various other income statement data between the GAAP and non-GAAP amounts for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data):

 
   

Three Months Ended September 30, 2018

   

Total revenues

 

Cost of revenues

 

Gross margin

 

Gross margin %

 

Total operating expenses

 

Operating expense to revenue %

 

Operating (loss) income from continuing operations

 

Operating margin %

 

Other non-operating expense, net

 

(Loss) income from continuing operations before income tax

 

Income tax expense

 

Effective tax rate

 

(Loss) income from continuing operations

 

Discontinued operations, net of tax

 

Net (loss) income

 

Diluted (loss) income per share from continuing operations (14)

Reported (GAAP)

 

$    745,466

 

$    412,965

 

$    332,501

 

44.6 %

 

$    345,229

 

46.3 %

 

$    (12,728)

 

(1.7)%

 

$ 130,340

 

$    (143,068)

 

$    3,003

 

(2.1)%

 

$ (146,071)

 

$    (27,134)

 

$    (173,205)

 

$        (0.65)

Items impacting
comparability:

                                                               

Amortization of
intangible assets (1)

 

 

(161,275)

 

161,275

     

     

161,275

     

 

161,275

 

     

161,275

 

 

161,275

 

0.71

Inventory step-up and
other cost savings (2)

 

 

(71)

 

71

     

     

71

     

 

71

 

     

71

 

 

71

 

Upfront and

milestone-related
payments (3)

 

 

(745)

 

745

     

(3,986)

     

4,731

     

 

4,731

 

     

4,731

 

 

4,731

 

0.02

Inventory reserve
increase from
restructuring (4)

 

 

(207)

 

207

     

     

207

     

 

207

 

     

207

 

 

207

 

Separation benefits
and other
restructuring (5)

 

 

(3,626)

 

3,626

     

(168)

     

3,794

     

 

3,794

 

     

3,794

 

 

3,794

 

0.02

Certain litigation-
related and other
contingencies, net (6)

 

 

 

     

1,750

     

(1,750)

     

 

(1,750)

 

     

(1,750)

 

 

(1,750)

 

(0.01)

Asset impairment
charges (7)

 

 

 

     

(142,217)

     

142,217

     

 

142,217

 

     

142,217

 

 

142,217

 

0.62

Acquisition-related
and integration costs (8)

 

 

 

     

(519)

     

519

     

 

519

 

     

519

 

 

519

 

Fair value of
contingent
consideration (9)

 

 

 

     

(769)

     

769

     

 

769

 

     

769

 

 

769

 

Other (11)

 

 

 

     

     

     

(1,353)

 

1,353

 

     

1,353

 

 

1,353

 

0.01

Tax adjustments (12)

 

 

 

     

     

     

 

 

2,270

     

(2,270)

 

 

(2,270)

 

(0.01)

Exclude discontinued
operations, net of tax (13)

 

 

 

     

     

     

 

 

     

 

27,134

 

27,134

 

After considering items
(non-GAAP)

 

$    745,466

 

$    247,041

 

$    498,425

 

66.9 %

 

$    199,320

 

26.7 %

 

$    299,105

 

40.1 %

 

$ 128,987

 

$     170,118

 

$    5,273

 

3.1 %

 

$  164,845

 

$             —

 

$     164,845

 

$          0.71

                                                                 
   

Three Months Ended September 30, 2017

   

Total revenues

 

Cost of revenues

 

Gross margin

 

Gross margin %

 

Total operating expenses

 

Operating expense to revenue %

 

Operating (loss) income from continuing operations

 

Operating margin %

 

Other non-operating expense, net

 

(Loss) income from continuing operations before income tax

 

Income tax (benefit) expense

 

Effective tax rate

 

(Loss) income from continuing operations

 

Discontinued operations, net of tax

 

Net (loss) income

 

Diluted (loss) income per share from continuing operations (14)

Reported (GAAP)

 

$    786,887

 

$    514,522

 

$    272,365

 

34.6 %

 

$    274,737

 

34.9 %

 

$      (2,372)

 

(0.3)%

 

$ 125,424

 

$    (127,796)

 

$ (28,109)

 

22.0 %

 

$   (99,687)

 

$        3,017

 

$      (96,670)

 

$        (0.45)

Items impacting
comparability:

                                                               

Amortization of
intangible assets (1)

 

 

(161,413)

 

161,413

     

     

161,413

     

 

161,413

 

     

161,413

 

 

161,413

 

0.73

Inventory step-up and
other cost savings (2)

 

 

(66)

 

66

     

     

66

     

 

66

 

     

66

 

 

66

 

Upfront and
milestone-related
payments (3)

 

 

(688)

 

688

     

(87)

     

775

     

 

775

 

     

775

 

 

775

 

Separation benefits
and other
restructuring (5)

 

 

(78,680)

 

78,680

     

(2,013)

     

80,693

     

 

80,693

 

     

80,693

 

 

80,693

 

0.36

Certain litigation-
related and other
contingencies, net (6)

 

 

 

     

12,352

     

(12,352)

     

 

(12,352)

 

     

(12,352)

 

 

(12,352)

 

(0.06)

Asset impairment
charges (7)

 

 

 

     

(94,924)

     

94,924

     

 

94,924

 

     

94,924

 

 

94,924

 

0.43

Acquisition-related
and integration
costs (8)

 

 

 

     

(1,201)

     

1,201

     

 

1,201

 

     

1,201

 

 

1,201

 

0.01

Fair value of
contingent
consideration (9)

 

 

 

     

(15,440)

     

15,440

     

 

15,440

 

     

15,440

 

 

15,440

 

0.07

Other (11)

 

 

 

     

     

     

(3,035)

 

3,035

 

     

3,035

 

 

3,035

 

0.01

Tax adjustments (12)

 

 

 

     

     

     

 

 

41,456

     

(41,456)

 

 

(41,456)

 

(0.19)

Exclude discontinued
operations, net of tax (13)

 

 

 

     

     

     

 

 

     

 

(3,017)

 

(3,017)

 

After considering items
(non-GAAP)

 

$    786,887

 

$    273,675

 

$    513,212

 

65.2 %

 

$    173,424

 

22.0 %

 

$    339,788

 

43.2 %

 

$ 122,389

 

$     217,399

 

$  13,347

 

6.1 %

 

$  204,052

 

$             —

 

$     204,052

 

$          0.91

                                                                 
   

Nine Months Ended September 30, 2018

   

Total revenues

 

Cost of revenues

 

Gross margin

 

Gross margin %

 

Total operating expenses

 

Operating expense to revenue %

 

Operating (loss) income from continuing operations

 

Operating margin %

 

Other non-operating expense, net

 

(Loss) income from continuing operations before income tax

 

Income tax expense

 

Effective tax rate

 

(Loss) income from continuing operations

 

Discontinued operations, net of tax

 

Net (loss) income

 

Diluted (loss) income per share from continuing operations (14)

Reported (GAAP)

 

$ 2,160,689

 

$ 1,198,468

 

$    962,221

 

44.5 %

 

$ 1,281,100

 

59.3 %

 

$  (318,879)

 

(14.8)%

 

$ 352,680

 

$    (671,559)

 

$  24,729

 

(3.7)%

 

$ (696,288)

 

$    (43,273)

 

$    (739,561)

 

$        (3.11)

Items impacting
comparability:

                                                               

Amortization of
intangible assets (1)

 

 

(471,662)

 

471,662

     

     

471,662

     

 

471,662

 

     

471,662

 

 

471,662

 

2.10

Inventory step-up and
other cost savings (2)

 

 

(261)

 

261

     

     

261

     

 

261

 

     

261

 

 

261

 

Upfront and
milestone-related
payments (3)

 

 

(2,095)

 

2,095

     

(40,932)

     

43,027

     

 

43,027

 

     

43,027

 

 

43,027

 

0.19

Inventory reserve
increase from
restructuring (4)

 

 

(2,797)

 

2,797

     

     

2,797

     

 

2,797

 

     

2,797

 

 

2,797

 

0.01

Separation benefits
and other
restructuring (5)

 

 

(57,457)

 

57,457

     

(21,887)

     

79,344

     

 

79,344

 

     

79,344

 

 

79,344

 

0.34

Certain litigation-
related and other
contingencies, net (6)

 

 

 

     

(15,370)

     

15,370

     

 

15,370

 

     

15,370

 

 

15,370

 

0.07

Asset impairment
charges (7)

 

 

 

     

(613,400)

     

613,400

     

 

613,400

 

     

613,400

 

 

613,400

 

2.73

Acquisition-related
and integration costs (8)

 

 

 

     

(1,553)

     

1,553

     

 

1,553

 

     

1,553

 

 

1,553

 

0.01

Fair value of
contingent
consideration (9)

 

 

 

     

(11,731)

     

11,731

     

 

11,731

 

     

11,731

 

 

11,731

 

0.05

Other (11)

 

 

 

     

630

     

(630)

     

29,278

 

(29,908)

 

     

(29,908)

 

 

(29,908)

 

(0.13)

Tax adjustments (12)

 

 

 

     

     

     

 

 

25,126

     

(25,126)

 

 

(25,126)

 

(0.12)

Exclude discontinued
operations, net of tax (13)

 

 

 

     

     

     

 

 

     

 

43,273

 

43,273

 

After considering items
(non-GAAP)

 

$ 2,160,689

 

$    664,196

 

$ 1,496,493

 

69.3 %

 

$    576,857

 

26.7 %

 

$    919,636

 

42.6 %

 

$ 381,958

 

$     537,678

 

$  49,855

 

9.3 %

 

$  487,823

 

$             —

 

$     487,823

 

$          2.14

                                                                 
   

Nine Months Ended September 30, 2017

   

Total revenues

 

Cost of revenues

 

Gross margin

 

Gross margin %

 

Total operating expenses

 

Operating expense to revenue %

 

Operating (loss) income from continuing operations

 

Operating margin %

 

Other non-operating expense, net

 

(Loss) income from continuing operations before income tax

 

Income tax (benefit) expense

 

Effective tax rate

 

(Loss) income from continuing operations

 

Discontinued operations, net of tax

 

Net (loss) income

 

Diluted (loss) income per share from continuing operations (14)

Reported (GAAP)

 

$ 2,700,218

 

$ 1,722,885

 

$    977,333

 

36.2 %

 

$ 1,633,822

 

60.5 %

 

$  (656,489)

 

(24.3)%

 

$ 402,158

 

$ (1,058,647)

 

$ (97,517)

 

9.2 %

 

$ (961,130)

 

$  (705,886)

 

$ (1,667,016)

 

$        (4.31)

Items impacting
comparability:

                                                               

Amortization of
intangible assets (1)

 

 

(615,490)

 

615,490

     

     

615,490

     

 

615,490

 

     

615,490

 

 

615,490

 

2.75

Inventory step-up and
other cost savings (2)

 

 

(281)

 

281

     

     

281

     

 

281

 

     

281

 

 

281

 

Upfront and
milestone-related
payments (3)

 

 

(2,039)

 

2,039

     

(4,913)

     

6,952

     

 

6,952

 

     

6,952

 

 

6,952

 

0.03

Inventory reserve
increase from
restructuring (4)

 

 

(7,899)

 

7,899

     

     

7,899

     

 

7,899

 

     

7,899

 

 

7,899

 

0.04

Separation benefits
and other
restructuring (5)

 

 

(85,367)

 

85,367

     

(34,711)

     

120,078

     

 

120,078

 

     

120,078

 

 

120,078

 

0.54

Certain litigation-
related and other
contingencies, net (6)

 

 

 

     

14,016

     

(14,016)

     

 

(14,016)

 

     

(14,016)

 

 

(14,016)

 

(0.06)

Asset impairment
charges (7)

 

 

 

     

(1,023,930)

     

1,023,930

     

 

1,023,930

 

     

1,023,930

 

 

1,023,930

 

4.59

Acquisition-related
and integration costs (8)

 

 

 

     

(8,137)

     

8,137

     

 

8,137

 

     

8,137

 

 

8,137

 

0.04

Fair value of
contingent
consideration (9)

 

 

 

     

(23,574)

     

23,574

     

 

23,574

 

     

23,574

 

 

23,574

 

0.11

Loss on
extinguishment
of debt (10)

 

 

 

     

     

     

(51,734)

 

51,734

 

     

51,734

 

 

51,734

 

0.23

Other (11)

 

 

 

     

     

     

1,133

 

(1,133)

 

     

(1,133)