Endo Reports Third-Quarter 2019 Financial Results
- Operating Performance Led by Year-over-Year Double-Digit-Percentage Revenue Growth in Sterile Injectables and in Specialty Products Portfolio of
- Full-Year 2019 Financial Guidance Updated to Narrow Expected Ranges for Revenue, Adjusted Diluted Net Income per Share from Continuing Operations and Adjusted EBITDA -
- Revenues of
$729 million decreased 2% compared to third-quarter 2018 revenues of$745 million . Branded Pharmaceuticals - Specialty Products revenues increased 18% to$132 million compared to third-quarter 2018 revenues of$112 million .- Sterile Injectables revenues increased 11% to
$264 million compared to third-quarter 2018 revenues of$237 million . - Reported loss from continuing operations of
$41 million compared to third-quarter 2018 reported loss from continuing operations of$146 million . - Reported diluted net loss per share from continuing operations of
$0.18 compared to third-quarter 2018 reported diluted net loss per share from continuing operations of$0.65 . - Adjusted income from continuing operations of
$138 million compared to third-quarter 2018 adjusted income from continuing operations of$165 million . - Adjusted diluted net income per share from continuing operations of
$0.60 compared to third-quarter 2018 adjusted diluted net income per share from continuing operations of$0.71 . - Adjusted EBITDA of
$321 million compared to third-quarter 2018 adjusted EBITDA of$328 million .
"Endo generated strong operating performance in the third quarter, which was led by continued year-over-year double-digit percentage revenue growth in our Sterile Injectables segment and in the Specialty Products portfolio of our
FINANCIAL PERFORMANCE |
|||||||||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||
Total Revenues, Net |
$ |
729,426 |
$ |
745,466 |
(2) |
% |
$ |
2,149,564 |
$ |
2,160,689 |
(1) |
% |
|||||||||
Reported Loss from Continuing Operations |
$ |
(41,431) |
$ |
(146,071) |
(72) |
% |
$ |
(152,095) |
$ |
(696,288) |
(78) |
% |
|||||||||
Reported Diluted Weighted Average Shares |
226,598 |
224,132 |
1 |
% |
225,804 |
223,829 |
1 |
% |
|||||||||||||
Reported Diluted Net Loss per Share from Continuing Operations |
$ |
(0.18) |
$ |
(0.65) |
(72) |
% |
$ |
(0.67) |
$ |
(3.11) |
(78) |
% |
|||||||||
Adjusted Income from Continuing Operations |
$ |
138,129 |
$ |
164,845 |
(16) |
% |
$ |
380,617 |
$ |
487,823 |
(22) |
% |
|||||||||
Adjusted Diluted Weighted Average Shares (1) |
230,907 |
232,358 |
(1) |
% |
231,751 |
228,195 |
2 |
% |
|||||||||||||
Adjusted Diluted Net Income per Share from Continuing Operations |
$ |
0.60 |
$ |
0.71 |
(15) |
% |
$ |
1.64 |
$ |
2.14 |
(23) |
% |
__________
(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. |
CONSOLIDATED RESULTS
Total revenues were
GAAP loss from continuing operations in third-quarter 2019 was
Adjusted income from continuing operations in third-quarter 2019 was
BRANDED PHARMACEUTICALS
Third-quarter 2019
Specialty Products revenues increased 18% to
During third-quarter 2019, Endo also submitted a Biologics License Application to the U.S. Food and Drug Administration for its Collagenase Clostridium Histolyticum (CCH) product for the treatment of cellulite.
STERILE INJECTABLES
Third-quarter 2019 Sterile Injectables revenues were
GENERIC PHARMACEUTICALS
Third-quarter 2019
INTERNATIONAL PHARMACEUTICALS
Third-quarter 2019
2019 FINANCIAL GUIDANCE
Endo is updating its financial guidance for the 12 months ending December 31, 2019, narrowing the expected ranges regarding revenue, adjusted diluted net income per share from continuing operations, and Adjusted EBITDA. The Company now estimates:
- Total revenues to be between
$2.86 billion and $2.89 billion compared to previous guidance of$2.76 billion to $2.96 billion ; - Adjusted diluted net income per share from continuing operations to be between
$2.10 and $2.25 compared to previous guidance of$2.00 to $2.25 ; and - Adjusted EBITDA to be between
$1.26 billion and $1.30 billion compared to previous guidance of$1.24 billion to $1.34 billion .
The Company's 2019 non-GAAP financial guidance is based on the following assumptions:
- Adjusted gross margin of approximately 64.7% to 65.7% compared to previous guidance of 65.0% to 66.0%;
- Adjusted operating expenses as a percentage of revenue to be approximately 25.0% compared to 24.5% to 25.0%;
- Adjusted interest expense of approximately
$540 million compared to$550 million to $560 million ; - Adjusted effective tax rate of approximately 16.5% compared to 17.5% to 18.5%; and
- Adjusted diluted weighted average shares outstanding of approximately 234 million.
BALANCE SHEET, LIQUIDITY AND OTHER UPDATES
As of September 30, 2019, the Company had approximately
Third-quarter 2019 cash provided by operating activities was
CONFERENCE CALL INFORMATION
Endo will conduct a conference call with financial analysts to discuss this press release on
A replay of the call will be available from November 5, 2019 at
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.
FINANCIAL SCHEDULES
The following table presents Endo's unaudited Total revenues, net for the three and nine months ended
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||
Branded Pharmaceuticals: |
|||||||||||||||||||||
Specialty Products: |
|||||||||||||||||||||
XIAFLEX® |
$ |
82,756 |
$ |
64,214 |
29 |
% |
$ |
226,118 |
$ |
184,855 |
22 |
% |
|||||||||
SUPPRELIN® LA |
20,772 |
20,408 |
2 |
% |
66,542 |
60,948 |
9 |
% |
|||||||||||||
Other Specialty (1) |
28,470 |
27,614 |
3 |
% |
78,397 |
69,226 |
13 |
% |
|||||||||||||
Total Specialty Products |
$ |
131,998 |
$ |
112,236 |
18 |
% |
$ |
371,057 |
$ |
315,029 |
18 |
% |
|||||||||
Established Products: |
|||||||||||||||||||||
PERCOCET® |
$ |
28,561 |
$ |
30,730 |
(7) |
% |
$ |
88,199 |
$ |
93,539 |
(6) |
% |
|||||||||
TESTOPEL® |
13,236 |
15,962 |
(17) |
% |
40,830 |
44,976 |
(9) |
% |
|||||||||||||
Other Established (2) |
43,518 |
61,172 |
(29) |
% |
129,765 |
179,428 |
(28) |
% |
|||||||||||||
Total Established Products |
$ |
85,315 |
$ |
107,864 |
(21) |
% |
$ |
258,794 |
$ |
317,943 |
(19) |
% |
|||||||||
Total Branded Pharmaceuticals (3) |
$ |
217,313 |
$ |
220,100 |
(1) |
% |
$ |
629,851 |
$ |
632,972 |
— |
% |
|||||||||
Sterile Injectables: |
|||||||||||||||||||||
VASOSTRICT® |
$ |
129,691 |
$ |
112,333 |
15 |
% |
$ |
384,854 |
$ |
332,387 |
16 |
% |
|||||||||
ADRENALIN® |
40,311 |
35,460 |
14 |
% |
133,468 |
101,858 |
31 |
% |
|||||||||||||
APLISOL® |
28,085 |
15,992 |
76 |
% |
55,996 |
49,064 |
14 |
% |
|||||||||||||
Ertapenem for injection |
21,853 |
25,798 |
(15) |
% |
79,619 |
25,798 |
NM |
||||||||||||||
Other Sterile Injectables (4) |
43,695 |
47,567 |
(8) |
% |
124,026 |
161,740 |
(23) |
% |
|||||||||||||
Total Sterile Injectables (3) |
$ |
263,635 |
$ |
237,150 |
11 |
% |
$ |
777,963 |
$ |
670,847 |
16 |
% |
|||||||||
Total Generic Pharmaceuticals |
$ |
218,012 |
$ |
257,969 |
(15) |
% |
$ |
654,322 |
$ |
748,445 |
(13) |
% |
|||||||||
Total International Pharmaceuticals |
$ |
30,466 |
$ |
30,247 |
1 |
% |
$ |
87,428 |
$ |
108,425 |
(19) |
% |
|||||||||
Total revenues, net |
$ |
729,426 |
$ |
745,466 |
(2) |
% |
$ |
2,149,564 |
$ |
2,160,689 |
(1) |
% |
__________
(1) |
Products included within Other Specialty are NASCOBAL® Nasal Spray and AVEED®. Beginning with our first-quarter 2019 reporting, TESTOPEL®, which was previously included in Other Specialty, has been reclassified and is now included in the Established Products portfolio for all periods presented. |
(2) |
Products included within Other Established include, but are not limited to, LIDODERM®, VOLTAREN® Gel, EDEX®, FORTESTA® Gel and TESTIM®, including the authorized generics of FORTESTA® Gel and TESTIM®. |
(3) |
Individual products presented above represent the top two performing products in each product category for either the three or nine months ended September 30, 2019 and/or any product having revenues in excess of $25 million during any quarterly period in 2019 or 2018. |
(4) |
Products included within Other Sterile Injectables include ephedrine sulfate injection and others. |
The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and nine months ended
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
TOTAL REVENUES, NET |
$ |
729,426 |
$ |
745,466 |
$ |
2,149,564 |
$ |
2,160,689 |
|||||||
COSTS AND EXPENSES: |
|||||||||||||||
Cost of revenues |
389,165 |
412,965 |
1,169,282 |
1,198,468 |
|||||||||||
Selling, general and administrative |
168,329 |
163,791 |
471,749 |
478,615 |
|||||||||||
Research and development |
36,519 |
39,683 |
96,353 |
160,431 |
|||||||||||
Litigation-related and other contingencies, net |
(14,414) |
(1,750) |
(4,093) |
15,370 |
|||||||||||
Asset impairment charges |
4,766 |
142,217 |
258,652 |
613,400 |
|||||||||||
Acquisition-related and integration items |
16,025 |
1,288 |
(26,983) |
13,284 |
|||||||||||
Interest expense, net |
136,903 |
131,847 |
404,387 |
385,896 |
|||||||||||
Gain on extinguishment of debt |
— |
— |
(119,828) |
— |
|||||||||||
Other expense (income), net |
16,203 |
(1,507) |
20,408 |
(33,216) |
|||||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX |
$ |
(24,070) |
$ |
(143,068) |
$ |
(120,363) |
$ |
(671,559) |
|||||||
INCOME TAX EXPENSE |
17,361 |
3,003 |
31,732 |
24,729 |
|||||||||||
LOSS FROM CONTINUING OPERATIONS |
$ |
(41,431) |
$ |
(146,071) |
$ |
(152,095) |
$ |
(696,288) |
|||||||
DISCONTINUED OPERATIONS, NET OF TAX |
(37,984) |
(27,134) |
(51,898) |
(43,273) |
|||||||||||
NET LOSS |
$ |
(79,415) |
$ |
(173,205) |
$ |
(203,993) |
$ |
(739,561) |
|||||||
NET LOSS PER SHARE—BASIC: |
|||||||||||||||
Continuing operations |
$ |
(0.18) |
$ |
(0.65) |
$ |
(0.67) |
$ |
(3.11) |
|||||||
Discontinued operations |
(0.17) |
(0.12) |
(0.23) |
(0.19) |
|||||||||||
Basic |
$ |
(0.35) |
$ |
(0.77) |
$ |
(0.90) |
$ |
(3.30) |
|||||||
NET LOSS PER SHARE—DILUTED: |
|||||||||||||||
Continuing operations |
$ |
(0.18) |
$ |
(0.65) |
$ |
(0.67) |
$ |
(3.11) |
|||||||
Discontinued operations |
(0.17) |
(0.12) |
(0.23) |
(0.19) |
|||||||||||
Diluted |
$ |
(0.35) |
$ |
(0.77) |
$ |
(0.90) |
$ |
(3.30) |
|||||||
WEIGHTED AVERAGE SHARES: |
|||||||||||||||
Basic |
226,598 |
224,132 |
225,804 |
223,829 |
|||||||||||
Diluted |
226,598 |
224,132 |
225,804 |
223,829 |
The following table presents unaudited Condensed Consolidated Balance Sheet data at September 30, 2019 and December 31, 2018 (in thousands):
September 30, |
December 31, |
||||||
ASSETS |
|||||||
CURRENT ASSETS: |
|||||||
Cash and cash equivalents |
$ |
1,526,250 |
$ |
1,149,113 |
|||
Restricted cash and cash equivalents |
222,491 |
305,368 |
|||||
Accounts receivable |
420,195 |
470,570 |
|||||
Inventories, net |
338,513 |
322,179 |
|||||
Other current assets |
141,686 |
95,920 |
|||||
Total current assets |
$ |
2,649,135 |
$ |
2,343,150 |
|||
TOTAL NON-CURRENT ASSETS |
7,185,731 |
7,789,243 |
|||||
TOTAL ASSETS |
$ |
9,834,866 |
$ |
10,132,393 |
|||
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
CURRENT LIABILITIES: |
|||||||
Accounts payable and accrued expenses, including legal settlement accruals |
$ |
1,612,124 |
$ |
1,914,285 |
|||
Other current liabilities |
55,603 |
35,811 |
|||||
Total current liabilities |
$ |
1,667,727 |
$ |
1,950,096 |
|||
LONG-TERM DEBT, LESS CURRENT PORTION, NET |
8,364,911 |
8,224,269 |
|||||
OTHER LIABILITIES |
463,705 |
456,311 |
|||||
SHAREHOLDERS' DEFICIT |
(661,477) |
(498,283) |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
$ |
9,834,866 |
$ |
10,132,393 |
The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the nine months ended
Nine Months Ended September 30, |
|||||||
2019 |
2018 |
||||||
OPERATING ACTIVITIES: |
|||||||
Net loss |
$ |
(203,993) |
$ |
(739,561) |
|||
Adjustments to reconcile Net loss to Net cash provided by operating activities: |
|||||||
Depreciation and amortization |
468,409 |
556,503 |
|||||
Asset impairment charges |
258,652 |
613,400 |
|||||
Other, including cash payments to claimants from Qualified Settlement Funds |
(403,824) |
(233,350) |
|||||
Net cash provided by operating activities |
$ |
119,244 |
$ |
196,992 |
|||
INVESTING ACTIVITIES: |
|||||||
Purchases of property, plant and equipment, excluding capitalized interest |
$ |
(47,812) |
$ |
(56,544) |
|||
Proceeds from sale of business and other assets, net |
4,780 |
43,753 |
|||||
Other |
(2,295) |
(891) |
|||||
Net cash used in investing activities |
$ |
(45,327) |
$ |
(13,682) |
|||
FINANCING ACTIVITIES: |
|||||||
Proceeds from (payments on) borrowings, net |
$ |
247,897 |
$ |
(29,535) |
|||
Other |
(28,333) |
(33,273) |
|||||
Net cash provided by (used in) financing activities |
$ |
219,564 |
$ |
(62,808) |
|||
Effect of foreign exchange rate |
780 |
(608) |
|||||
NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS |
$ |
294,261 |
$ |
119,894 |
|||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD |
1,476,837 |
1,311,014 |
|||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD |
$ |
1,771,098 |
$ |
1,430,908 |
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
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
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net loss (GAAP) |
$ |
(79,415) |
$ |
(173,205) |
$ |
(203,993) |
$ |
(739,561) |
|||||||
Income tax expense |
17,361 |
3,003 |
31,732 |
24,729 |
|||||||||||
Interest expense, net |
136,903 |
131,847 |
404,387 |
385,896 |
|||||||||||
Depreciation and amortization (15) |
147,621 |
176,856 |
468,409 |
521,325 |
|||||||||||
EBITDA (non-GAAP) |
$ |
222,470 |
$ |
138,501 |
$ |
700,535 |
$ |
192,389 |
|||||||
Inventory step-up and other cost savings (2) |
$ |
— |
$ |
71 |
$ |
— |
$ |
261 |
|||||||
Upfront and milestone-related payments (3) |
1,672 |
4,731 |
4,055 |
43,027 |
|||||||||||
Inventory reserve increase from restructuring (4) |
— |
207 |
— |
2,797 |
|||||||||||
Retention and separation benefits and other restructuring (5) |
11,023 |
3,794 |
15,172 |
79,344 |
|||||||||||
Certain litigation-related and other contingencies, net (6) |
(14,414) |
(1,750) |
(4,093) |
15,370 |
|||||||||||
Asset impairment charges (7) |
4,766 |
142,217 |
258,652 |
613,400 |
|||||||||||
Acquisition-related and integration costs (8) |
— |
519 |
— |
1,553 |
|||||||||||
Fair value of contingent consideration (9) |
16,025 |
769 |
(26,983) |
11,731 |
|||||||||||
Gain on extinguishment of debt (10) |
— |
— |
(119,828) |
— |
|||||||||||
Share-based compensation |
11,576 |
13,736 |
48,909 |
43,722 |
|||||||||||
Other expense (income), net (16) |
16,203 |
(1,507) |
20,408 |
(33,216) |
|||||||||||
Other adjustments |
13,795 |
(67) |
13,882 |
(775) |
|||||||||||
Discontinued operations, net of tax (13) |
37,984 |
27,134 |
51,898 |
43,273 |
|||||||||||
Adjusted EBITDA (non-GAAP) |
$ |
321,100 |
$ |
328,355 |
$ |
962,607 |
$ |
1,012,876 |
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
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Loss from continuing operations (GAAP) |
$ |
(41,431) |
$ |
(146,071) |
$ |
(152,095) |
$ |
(696,288) |
|||||||
Non-GAAP adjustments: |
|||||||||||||||
Amortization of intangible assets (1) |
131,932 |
161,275 |
417,949 |
471,662 |
|||||||||||
Inventory step-up and other cost savings (2) |
— |
71 |
— |
261 |
|||||||||||
Upfront and milestone-related payments (3) |
1,672 |
4,731 |
4,055 |
43,027 |
|||||||||||
Inventory reserve increase from restructuring (4) |
— |
207 |
— |
2,797 |
|||||||||||
Retention and separation benefits and other restructuring (5) |
11,023 |
3,794 |
15,172 |
79,344 |
|||||||||||
Certain litigation-related and other contingencies, net (6) |
(14,414) |
(1,750) |
(4,093) |
15,370 |
|||||||||||
Asset impairment charges (7) |
4,766 |
142,217 |
258,652 |
613,400 |
|||||||||||
Acquisition-related and integration costs (8) |
— |
519 |
— |
1,553 |
|||||||||||
Fair value of contingent consideration (9) |
16,025 |
769 |
(26,983) |
11,731 |
|||||||||||
Gain on extinguishment of debt (10) |
— |
— |
(119,828) |
— |
|||||||||||
Other (11) |
28,634 |
1,353 |
30,254 |
(29,908) |
|||||||||||
Tax adjustments (12) |
(78) |
(2,270) |
(42,466) |
(25,126) |
|||||||||||
Adjusted income from continuing operations (non-GAAP) |
$ |
138,129 |
$ |
164,845 |
$ |
380,617 |
$ |
487,823 |
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
Three Months Ended September 30, 2019 |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other |
(Loss) |
Income |
Effective |
(Loss) |
Discontinued |
Net (loss) |
Diluted |
||||||||||||||||
Reported (GAAP) |
$ 729,426 |
$ 389,165 |
$ 340,261 |
46.6 % |
$ 211,225 |
29.0 % |
$ 129,036 |
17.7 % |
$ 153,106 |
$ (24,070) |
$ 17,361 |
(72.1)% |
$ (41,431) |
$ (37,984) |
$ (79,415) |
$ (0.18) |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(131,932) |
131,932 |
- |
131,932 |
- |
131,932 |
- |
131,932 |
- |
131,932 |
||||||||||||||||||||
Upfront and milestone-related payments (3) |
- |
(542) |
542 |
(1,130) |
1,672 |
- |
1,672 |
- |
1,672 |
- |
1,672 |
||||||||||||||||||||
Retention and separation benefits and other restructuring (5) |
- |
(1,004) |
1,004 |
(10,019) |
11,023 |
- |
11,023 |
- |
11,023 |
- |
11,023 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (6) |
- |
- |
- |
14,414 |
(14,414) |
- |
(14,414) |
- |
(14,414) |
- |
(14,414) |
||||||||||||||||||||
Asset impairment charges (7) |
- |
- |
- |
(4,766) |
4,766 |
- |
4,766 |
- |
4,766 |
- |
4,766 |
||||||||||||||||||||
Fair value of contingent consideration (9) |
- |
- |
- |
(16,025) |
16,025 |
- |
16,025 |
- |
16,025 |
- |
16,025 |
||||||||||||||||||||
Other (11) |
- |
- |
- |
(14,053) |
14,053 |
(14,581) |
28,634 |
- |
28,634 |
- |
28,634 |
||||||||||||||||||||
Tax adjustments (12) |
- |
- |
- |
- |
- |
- |
- |
78 |
(78) |
- |
(78) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (13) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
37,984 |
37,984 |
||||||||||||||||||||
After considering items (non-GAAP) |
$ 729,426 |
$ 255,687 |
$ 473,739 |
64.9 % |
$ 179,646 |
24.6 % |
$ 294,093 |
40.3 % |
$ 138,525 |
$ 155,568 |
$ 17,439 |
11.2 % |
$ 138,129 |
$ - |
$ 138,129 |
$ 0.60 |
Three Months Ended September 30, 2018 |
|||||||||||||||||||||||||||||||
Total |
Cost of |
Gross |
Gross |
Total |
Operating |
Operating |
Operating |
Other |
(Loss) |
Income |
Effective |
(Loss) |
Discontinued |
Net (loss) |
Diluted |
||||||||||||||||
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 |
||||||||||||||||||||
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 |
||||||||||||||||||||
Inventory reserve increase from restructuring (4) |
- |
(207) |
207 |
- |
207 |
- |
207 |
- |
207 |
- |
207 |
||||||||||||||||||||
Retention and separation benefits and other restructuring (5) |
- |
(3,626) |
3,626 |
(168) |
3,794 |
- |
3,794 |
- |
3,794 |
- |
3,794 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (6) |
- |
- |
- |
1,750 |
(1,750) |
- |
(1,750) |
- |
(1,750) |
- |
(1,750) |
||||||||||||||||||||
Asset impairment charges (7) |
- |
- |
- |
(142,217) |
142,217 |
- |
142,217 |
- |
142,217 |
- |
142,217 |
||||||||||||||||||||
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 |
||||||||||||||||||||
Tax adjustments (12) |
- |
- |
- |
- |
- |
- |
- |
2,270 |
(2,270) |
- |
(2,270) |
||||||||||||||||||||
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 |
Nine Months Ended September 30, 2019 |
|||||||||||||||||||||||||||||||
Total revenues, net |
Cost of revenues |
Gross margin |
Gross margin % |
Total operating expenses |
Operating |
Operating 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 net (loss) income per share from continuing operations (14) |
||||||||||||||||
Reported (GAAP) |
$ 2,149,564 |
$ 1,169,282 |
$ 980,282 |
45.6 % |
$ 795,678 |
37.0 % |
$ 184,604 |
8.6 % |
$ 304,967 |
$ (120,363) |
$ 31,732 |
(26.4)% |
$ (152,095) |
$ (51,898) |
$ (203,993) |
$ (0.67) |
|||||||||||||||
Items impacting comparability: |
|||||||||||||||||||||||||||||||
Amortization of intangible assets (1) |
- |
(417,949) |
417,949 |
- |
417,949 |
- |
417,949 |
- |
417,949 |
- |
417,949 |
||||||||||||||||||||
Upfront and milestone-related payments (3) |
- |
(1,942) |
1,942 |
(2,113) |
4,055 |
- |
4,055 |
- |
4,055 |
- |
4,055 |
||||||||||||||||||||
Retention and separation benefits and other restructuring (5) |
- |
(1,004) |
1,004 |
(14,168) |
15,172 |
- |
15,172 |
- |
15,172 |
- |
15,172 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (6) |
- |
- |
- |
4,093 |
(4,093) |
- |
(4,093) |
- |
(4,093) |
- |
(4,093) |
||||||||||||||||||||
Asset impairment charges (7) |
- |
- |
- |
(258,652) |
258,652 |
- |
258,652 |
- |
258,652 |
- |
258,652 |
||||||||||||||||||||
Fair value of contingent consideration (9) |
- |
- |
- |
26,983 |
(26,983) |
- |
(26,983) |
- |
(26,983) |
- |
(26,983) |
||||||||||||||||||||
Gain on extinguishment of debt (10) |
- |
- |
- |
- |
- |
119,828 |
(119,828) |
- |
(119,828) |
- |
(119,828) |
||||||||||||||||||||
Other (11) |
- |
- |
- |
(13,878) |
13,878 |
(16,376) |
30,254 |
- |
30,254 |
- |
30,254 |
||||||||||||||||||||
Tax adjustments (12) |
- |
- |
- |
- |
- |
- |
- |
42,466 |
(42,466) |
- |
(42,466) |
||||||||||||||||||||
Exclude discontinued operations, net of tax (13) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
51,898 |
51,898 |
||||||||||||||||||||
After considering items (non-GAAP) |
$ 2,149,564 |
$ 748,387 |
$ 1,401,177 |
65.2 % |
$ 537,943 |
25.0 % |
$ 863,234 |
40.2 % |
$ 408,419 |
$ 454,815 |
$ 74,198 |
16.3 % |
$ 380,617 |
$ - |
$ 380,617 |
$ 1.64 |
Nine Months Ended September 30, 2018 |
|||||||||||||||||||||||||||||||
Total revenues, net |
Cost of revenues |
Gross margin |
Gross margin % |
Total operating expenses |
Operating |
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 net (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 |
||||||||||||||||||||
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 |
||||||||||||||||||||
Inventory reserve increase from restructuring (4) |
- |
(2,797) |
2,797 |
- |
2,797 |
- |
2,797 |
- |
2,797 |
- |
2,797 |
||||||||||||||||||||
Retention and separation benefits and other restructuring (5) |
- |
(57,457) |
57,457 |
(21,887) |
79,344 |
- |
79,344 |
- |
79,344 |
- |
79,344 |
||||||||||||||||||||
Certain litigation-related and other contingencies, net (6) |
- |
- |
- |
(15,370) |
15,370 |
- |
15,370 |
- |
15,370 |
- |
15,370 |
||||||||||||||||||||
Asset impairment charges (7) |
- |
- |
- |
(613,400) |
613,400 |
- |
613,400 |
- |
613,400 |
- |
613,400 |
||||||||||||||||||||
Acquisition-related and integration costs (8) |
- |
- |
- |
(1,553) |
1,553 |
- |
1,553 |
- |
1,553 |
- |
1,553 |
||||||||||||||||||||
Fair value of contingent consideration (9) |
- |
- |
- |
(11,731) |
11,731 |
- |
11,731 |
- |
11,731 |
- |
11,731 |
||||||||||||||||||||
Other (11) |
- |
- |
- |
630 |
(630) |
29,278 |
(29,908) |
- |
(29,908) |
- |
(29,908) |
||||||||||||||||||||
Tax adjustments (12) |
- |
- |
- |
- |
- |
- |
- |
25,126 |
(25,126) |
- |
(25,126) |
||||||||||||||||||||
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 |
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 and nine months ended
(1) |
Adjustments for amortization of commercial intangible assets included the following (in thousands): |
|||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Amortization of intangible assets excluding fair value |
$ |
128,865 |
$ |
149,249 |
$ |
400,203 |
$ |
446,015 |
||||||||
Amortization of intangible assets related to fair value |
3,067 |
12,026 |
17,746 |
25,647 |
||||||||||||
Total |
$ |
131,932 |
$ |
161,275 |
$ |
417,949 |
$ |
471,662 |
||||||||
(2) |
To exclude adjustments for inventory step-up. |
|||||||||||||||
(3) |
Adjustments for upfront and milestone-related payments to partners included the following (in thousands): |
|||||||||||||||
Three Months Ended September 30, |
||||||||||||||||
2019 |
2018 |
|||||||||||||||
Cost of revenues |
Operating |
Cost of |
Operating |
|||||||||||||
Sales-based |
$ |
542 |
$ |
— |
$ |
745 |
$ |
— |
||||||||
Development-based |
— |
1,130 |
— |
3,986 |
||||||||||||
Total |
$ |
542 |
$ |
1,130 |