Endo Reports Third Quarter Financial Results And Updates 2012 Financial Guidance
Endo Reports Third Quarter Financial Results And Updates 2012 Financial
Guidance
PR Newswire
CHADDS FORD, Pa., Nov. 5, 2012
CHADDS FORD, Pa., Nov. 5, 2012 /PRNewswire/ --
o Total quarterly revenues of $750 million, decreased 1 percent versus prior
year
o Qualitest quarterly net sales increase by 12 percent versus prior year
o Reformulated Version of OPANA^® ER with INTAC^® Technology Designed to be
Crush-Resistant Accounts for more than 90 Percent of OPANA ER Total
Prescription Volume
o Company now expects adjusted diluted EPS in the range of $5.00 to $5.10;
Now expects reported diluted (GAAP) EPS in the range of $0.87 to $0.97
o Company now expects revenues of approximately $3.05 billion in 2012
Endo Health Solutions (Nasdaq: ENDP) today reported a 1 percent decrease in
total revenues during the third quarter of 2012 to $750 million, compared with
$759 million in the same quarter of 2011. Net income for the three months
ended September 30, 2012 was $54 million, compared with net income of $41
million reported in the comparable 2011 period.
Reported net income includes a benefit of $46 million to reduce a previous
non-cash charge associated with the company's LIDODERM^® license and
settlement agreement with Watson Laboratories, Inc. in accordance with the
terms of that agreement. Reported net income also includes the effect of
charges in the amount of $83 million for the period reflecting the settlement
of certain legal matters relating to price reporting that were disclosed
previously as well as an estimated minimum amount to resolve the ongoing
investigation by the government focused primarily on the sale, marketing and
promotion of LIDODERM^®, which has been disclosed previously.
As detailed in the supplemental financial information below, adjusted net
income for the three months ended September 30, 2012 was $153 million,
compared with $151 million in the same period in 2011. Reported diluted
earnings per share for the quarter ended September 30, 2012 were $0.45,
compared with $0.34 in the third quarter of 2011. Adjusted diluted earnings
per share for the same period were $1.28 compared with $1.25 reported in 2011.
"Endo had a solid third quarter," said Dave Holveck, president and CEO of
Endo. "As the team and I outlined at our Investor Day on October 4th, we
believe the assets that Endo has assembled to offset the potential loss of
exclusivity for LIDODERM provide us with multiple opportunities for growth,
the potential for long-term expansion and produce a durable set of cash
flows."
FINANCIAL PERFORMANCE
AT A GLANCE
($ in
thousands,
except per
share
amounts)
3rd Quarter Nine Months Ended
September 30,
2012 2011 Change 2012 2011 Change
Total $ 750,482 $ 759,078 (1) % $ 2,226,303 $ 1,926,715 16 %
Revenues
Reported $ 53,809 $ 40,649 32 % $ (24,071) $ 151,019 NM
Net Income
Reported $ 0.45 $ 0.34 32 % $ (0.21) $ 1.24 NM
Diluted EPS
Adjusted $ 153,093 $ 151,089 1 % $ 413,546 $ 399,967 3 %
Net Income
Adjusted $ 1.28 $ 1.25 2 % $ 3.42 $ 3.29 4 %
Diluted EPS
ENDO PHARMACEUTICALS
Branded pharmaceutical sales of $417 million for the third quarter represented
a decrease of 2 percent versus the prior year. Net sales of Opana ER
decreased 36 percent for the third quarter on 33 percent lower prescriptions.
The decrease in Opana ER net sales is primarily a result of the first quarter
supply disruption due to the Novartis plant closure in Lincoln, Neb., and a
slower return to growth for Opana ER.
Net sales of LIDODERM increased 15 percent for the third quarter on 5 percent
prescription growth. The increase in LIDODERM net sales is primarily a result
of changes with respect to royalty obligations among Endo Pharmaceuticals,
Hind Healthcare Inc., and Teikoku Seiyaku Co. Ltd.; changes that began in
November 2011 and have been previously described in our filings with the U.S.
Securities and Exchange Commission.
During third quarter 2012, Watson announced it had received approval of its
ANDA for its lidocaine 5% patch. Endo anticipates Watson will launch its
lidocaine 5% patch in September 2013 pursuant to the terms of the settlement
and license agreement resolving all ongoing patent litigation among the
parties related to Watson's generic version of LIDODERM. The agreement
resolved the inherent uncertainties of this litigation and reflects the
uncertainty created by the regulatory challenges facing generic manufacturers
seeking to market a generic version of LIDODERM.
During the third quarter of 2012, Endo announced that according to IMS data
estimates, the reformulated OPANA ER (oxymorphone HCI) designed to be
crush-resistant incorporating Grunenthal's INTAC Technology accounts for more
than 90 percent of the OPANA ER total prescription volume.
Additionally, Endo Pharmaceuticals has submitted two Citizen Petitions
encouraging the FDA to partner with the company in an effort to employ
standards that will better manage patient access to vital pain management
medications like OPANA ER while also helping drive appropriate use of the
products.
In August 2012, BioDelivery Sciences International, Inc. and Endo announced
the initiation of the Phase 3 clinical program for BEMA^® Buprenorphine for
the treatment of moderate to severe chronic pain. This Phase 3 program will
consist of two efficacy studies, one in opioid naive and one in opioid
experienced subjects. Both studies are anticipated to be completed by late
2013 or early 2014.
As a result of recent discussions with the FDA regarding the current
Urocidin^™ phase III clinical trial Endo has decided to end the study before
its scheduled completion. Endo, and its partner Bioniche Life Sciences Inc.,
are considering potential next steps for the program.
QUALITEST
Generic product net sales of $166 million for the third quarter 2012
represented an increase of 12 percent over the same period last year. The
increase was driven by strong demand for our subsidiary Qualitest's
diversified product portfolio and favorable pricing, resulting in gross profit
of approximately 40 percent. Strong net sales growth is expected for
Qualitest for the remainder of 2012. Net sales growth is expected to be
driven by strong demand for Qualitest's commercial products and a stable
pricing environment. Qualitest remains focused on process improvements and
increased efficiencies in order to enhance manufacturing capacity.
In August 2012, Qualitest announced its launch of a generic version of
Singulair^® (montelukast sodium) Tablets and Chewable Tablets. Total combined
branded and generic sales for Montelukast Sodium Tablets and Chewables in the
U.S. for the 12 months ended June 30, 2012 were approximately $4.9 billion,
according to IMS Health.
In October 2012, Qualitest received through its partner, Alembic
Pharmaceuticals Limited, FDA approval of three products, Irbesartan Tablets,
Irbesartan/HCTZ Tablets and Modafinil Tablets. Total combined branded and
generic sales for Irbesartan Tablets, Irbesartan/HCTZ Tablets and Modafinil
Tablets in the U.S. for the 12 months ended June 30, 2012 were approximately
$1.7 billion, according to IMS Health. For Qualitest, new product approvals
supplement growth and the continued optimization of Qualitest's commercial
portfolio.
AMS
Devices sales, driven by our June 2011 acquisition of AMS, were $113 million
for the third quarter 2012. Men's Health, led by sales of the AMS 800^®
Artificial Urinary Sphincter, decreased 12 percent in the third quarter of
2012, compared with same period last year. This declining sales rate for the
period reflects the temporary withdrawal of the AMS 800 Artificial Urinary
Sphincter from the market during second quarter 2011 and subsequent rebound in
third quarter 2011. On a year-to-date pro forma basis, net sales for Men's
Health products increased 6 percent, which is more indicative and in-line with
the company's expectations for mid-to-high single digit growth. AMS's benign
prostatic hyperplasia (BPH) business, led by the decreasing share of
procedural volumes for the GreenLight XPS^™ console and the accompanying
MoXy^® fiber, decreased 4 percent in the third quarter of 2012. Women's
Health sales decreased 23 percent in the third quarter of 2012, compared with
same period last year. Net sales declines in Women's Health were driven by
year-over-year declines in procedural volumes reflecting recent industry
shifts following the FDA's advisory committee meeting regarding the use of
surgical mesh in pelvic organ prolapse. AMS remains focused on physician and
patient education activities as part of an overall effort to continue to
encourage physicians and patients to discuss the risks and benefits of AMS's
surgical mesh devices as an important treatment option for patients who suffer
from stress urinary incontinence and pelvic organ prolapse.
HEALTHTRONICS
Services sales of $54 million for the third quarter 2012 represented an
increase of 1 percent over the same period last year. Third quarter growth
for HealthTronics' was driven by the increasing sales of lab services and the
strategic addition of electronic medical records to HealthTronics' offerings.
The company expects enhanced top-line growth from its Services segment in 2012
and beyond from the recent addition of HealthTronics' electronic medical
records offering that is focused on practices specializing in urology and an
expanding set of partnerships in HealthTronics' Endocare^® cryoablation
therapy business.
2012 Financial Guidance
Endo's estimates are based on actual results for the nine months ended
September 30, 2012 and management's current belief about prescription trends,
pricing levels, inventory levels and the anticipated timing of future product
launches and events. The company's guidance for reported (GAAP) earnings per
share does not include any estimates for the potential future changes in the
fair value of contingent consideration or for potential new corporate
development transactions. For the full year ended Dec 31, 2012, Endo
estimates:
o Total revenue of approximately $3.05 billion
o Total Endo Pharmaceuticals segment revenue of approximately $1.665
billion
o Total Qualitest segment revenue of approximately $660 million
o Total AMS segment revenue of approximately $510 million
o Total HealthTronics segment revenue of approximately $220 million
o Reported (GAAP) diluted earnings per share to be between $0.87 and $0.97
o Adjusted diluted earnings per share to be between $5.00 and $5.10
o Cash flow from operations of at least $600 million
o Capital expenditures to be approximately $120 million
The company's 2012 guidance is based on certain assumptions including:
o Adjusted gross margin of between 68 percent and 69 percent
o Adjusted effective tax rate of between 30.5 percent and 31.5 percent
o Weighted average number of common shares outstanding of approximately 120
million shares for the year ended Dec 31, 2012
Balance Sheet Update
During the third quarter of 2012, Endo made mandatory payments of
approximately $28 million and voluntary prepayments of approximately $73
million to reduce the outstanding principal of term loan debt associated with
the acquisition of AMS. This brings the total repayments on this debt to
approximately $624 million, inclusive of $538 million in cumulative voluntary
prepayments, through third quarter 2012.
Additionally, during the third quarter of 2012, Endo repurchased approximately
$100 million of its common stock following the Board of Directors'
authorization to repurchase up to $450 million of its common stock through
March 2015. Additional repurchases may vary based on market conditions,
securities law limitations and other factors.
Conference Call Information
Endo will conduct a conference call with financial analysts to discuss this
news release today at 8:30 a.m. ET. Investors and other interested parties
may call 866-711-8198 (domestic) or +1 617-597-5327 (international) and enter
passcode 82681027. Please dial in 10 minutes prior to the scheduled start
time.
A replay of the call will be available from Nov 5 at 10:30 a.m. ET until 12:00
p.m. ET on Nov. 19, 2012 by dialing 888-286-8010 (domestic) or +1 617-801-6888
(international) and entering passcode 66955070.
A simultaneous webcast of the call can be accessed by visiting www.endo.com.
In addition, a replay of the webcast will be available until 12:00 p.m. ET on
Nov. 19, 2012. The replay can be accessed by clicking on "Events" in the
Investor Relations section of the website.
Supplemental Financial Information
The following tables provide a reconciliation of our reported (GAAP)
statements of operations to our adjusted statements of operations for each of
the three months ended September 30, 2012 and 2011 (in thousands, except per
share data):
Three Months Ended September 30, Actual
2012 (unaudited) Reported Adjustments Adjusted
(GAAP)
REVENUES $ 750,482 $ — $ 750,482
COSTS AND EXPENSES:
Cost of revenues 294,267 (52,762) (1) 241,505
Selling, general and administrative 210,446 (10,480) (2) 199,966
Research and development 48,952 (6,421) (3) 42,531
Patent litigation settlement items, (46,238) 46,238 (4) —
net
Litigation-related contingencies 82,600 (82,600) (5) —
Asset impairment charges 11,163 (11,163) (6) —
Acquisition-related and integration 5,776 (5,776) (7) —
items, net
OPERATING INCOME $ 143,516 $ 122,964 $ 266,480
INTEREST EXPENSE, NET 45,505 (5,209) (8) 40,296
NET LOSS ON EXTINGUISHMENT OF DEBT 1,789 (1,789) (9) —
OTHER EXPENSE (INCOME), NET (250) — (250)
INCOME BEFORE INCOME TAX $ 96,472 $ 129,962 $ 226,434
INCOME TAX 28,287 30,678 (10) 58,965
CONSOLIDATED NET INCOME $ 68,185 $ 99,284 $ 167,469
Less: Net income attributable to 14,376 — 14,376
noncontrolling interests
NET INCOME ATTRIBUTABLE TO ENDO
HEALTH $ 53,809 $ 99,284 $ 153,093
SOLUTIONS INC.
DILUTED (LOSS) EARNINGS PER SHARE $ 0.45 $ 1.28
DILUTED WEIGHTED AVERAGE SHARES 119,579 119,579
Notes to reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
To exclude amortization of commercial intangible assets related to
marketed products of $55,999, net milestone payments of $1,440, an
(1) adjustment to the accrual for the payment to Impax related to sales of
OPANA ER of $(6,000) and certain integration costs and separation
benefits incurred in connection with continued efforts to enhance the
company's operations of $1,323.
To exclude certain integration costs and separation benefits incurred in
(2) connection with continued efforts to enhance the company's operations of
$7,744 and amortization of customer relationships of $2,736.
To exclude milestone payments to partners of $3,898 and certain
(3) integration costs and separation benefits incurred in connection with
continued efforts to enhance the company's operations of $2,523.
(4) To exclude the net impact of the Watson litigation settlement.
(5) To exclude the net impact of accruals for litigation-related
contingencies.
(6) To exclude asset impairment charges.
To exclude acquisition-related and integration costs of $5,680 and a
(7) loss of $96 recorded to reflect the change in fair value of the
contingent consideration associated with the Qualitest acquisition.
(8) To exclude additional interest expense as a result of adopting ASC
470-20.
To exclude the unamortized debt issuance costs written off and recorded
(9) as a loss on extinguishment of debt upon our third quarter 2012
prepayments on our Term Loan indebtedness.
To reflect the cash tax savings results from our recent acquisitions and
(10) the tax effect of the pre-tax adjustments above at applicable tax
rates.
Three Months Ended September 30, Actual
2011 (unaudited) Reported Adjustments Adjusted
(GAAP)
REVENUES $ 759,078 $ — $ 759,078
COSTS AND EXPENSES:
Cost of revenues 302,172 (80,625) (1) 221,547
Selling, general and administrative 244,359 (15,761) (2) 228,598
Research and development 43,884 (2,355) (3) 41,529
Asset impairment charges 22,691 (22,691) (4) —
Acquisition-related and integration 5,818 (5,818) (5) —
items, net
OPERATING INCOME $ 140,154 $ 127,250 $ 267,404
INTEREST EXPENSE, NET 52,792 (4,754) (6) 48,038
OTHER INCOME, NET (3,000) 2,636 (7) (364)
INCOME BEFORE INCOME TAX $ 90,362 $ 129,368 $ 219,730
INCOME TAX 34,057 18,928 (8) 52,985
CONSOLIDATED NET INCOME $ 56,305 $ 110,440 $ 166,745
Less: Net income attributable to 15,656 — 15,656
noncontrolling interests
NET INCOME ATTRIBUTABLE TO ENDO
HEALTH $ 40,649 $ 110,440 $ 151,089
SOLUTIONS INC.
DILUTED (LOSS) EARNINGS PER SHARE $ 0.34 $ 1.25
DILUTED WEIGHTED AVERAGE SHARES 120,847 120,847
Notes to reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
To exclude amortization of commercial intangible assets related to
marketed products of $55,337, the impact of inventory step-up recorded as
(1) part of acquisition accounting of $23,937 and certain integration costs
and separation benefits incurred in connection with continued efforts to
enhance the company's operations of $1,351.
To exclude certain integration costs and separation benefits incurred in
(2) connection with continued efforts to enhance the company's operations of
$12,252 and amortization of customer relationships of $3,509.
(3) To exclude milestone and upfront payments to partners.
(4) To exclude asset impairment charges.
To exclude acquisition-related and integration costs of $6,046 and a gain
(5) of $(228) recorded to reflect the change in fair value of the contingent
consideration associated with the Indevus and Qualitest acquisitions.
(6) To exclude additional interest expense as a result of adopting ASC 470-20.
(7) To exclude the gain on hedging activities for foreign currencies.
(8) To reflect the cash tax savings results from our recent acquisitions and
the tax effect of the pre-tax adjustments above at applicable tax rates.
The following tables provide a reconciliation of our reported (GAAP)
statements of operations to our adjusted statements of operations for each of
the nine months ended September 30, 2012 and 2011 (in thousands, except per
share data):
Nine Months Ended September 30, Actual
2012 (unaudited) Reported Adjustments Adjusted
(GAAP)
REVENUES $ 2,226,303 $ — $ 2,226,303
COSTS AND EXPENSES:
Cost of revenues 953,657 (272,857) (1) 680,800
Selling, general and 698,522 (30,044) (2) 668,478
administrative
Research and development 183,067 (56,201) (3) 126,866
Patent litigation settlement 85,123 (85,123) (4) —
items, net
Litigation-related 82,600 (82,600) (5) —
contingencies
Asset impairment charges 54,163 (54,163) (6) —
Acquisition-related and 16,580 (16,580) (7) —
integration items, net
OPERATING INCOME $ 152,591 $ 597,568 $ 750,159
INTEREST EXPENSE, NET 138,386 (15,354) (8) 123,032
NET LOSS ON EXTINGUISHMENT OF 7,215 (7,215) (9) —
DEBT
OTHER EXPENSE, NET 498 (300) (10) 198
(LOSS) INCOME BEFORE INCOME TAX $ 6,492 $ 620,437 $ 626,929
INCOME TAX (9,263) 182,820 (11) 173,557
CONSOLIDATED NET (LOSS) INCOME $ 15,755 $ 437,617 $ 453,372
Less: Net income attributable 39,826 — 39,826
to noncontrolling interests
NET (LOSS) INCOME ATTRIBUTABLE $ (24,071) $ 437,617 $ 413,546
TO ENDO HEALTH SOLUTIONS INC.
DILUTED (LOSS) EARNINGS PER $ (0.21) $ 3.42
SHARE
DILUTED WEIGHTED AVERAGE SHARES 116,688 121,083
Notes to reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
To exclude amortization of commercial intangible assets related to
marketed products of $162,414, the impact of inventory step-up recorded
as part of acquisition accounting of $880, the accrual for the payment to
(1) Impax related to sales of OPANA ER of $104,000, net milestone payments of
$2,927 and certain integration costs and separation benefits incurred in
connection with continued efforts to enhance the company's operations of
$2,636.
To exclude certain integration costs and separation benefits incurred in
(2) connection with continued efforts to enhance the company's operations of
$21,799 and amortization of customer relationships of $8,245.
To exclude milestone payments to partners of $53,678 and certain
(3) integration costs and separation benefits incurred in connection with
continued efforts to enhance the company's operations of $2,523.
(4) To exclude the net impact of the Watson litigation settlement.
(5) To exclude the net impact of accruals for litigation-related
contingencies.
(6) To exclude asset impairment charges.
To exclude acquisition-related and integration costs of $16,552 and a
(7) loss of $28 recorded to reflect the change in fair value of the
contingent consideration associated with the Qualitest acquisition.
(8) To exclude additional interest expense as a result of adopting ASC
470-20.
To exclude the unamortized debt issuance costs written off and recorded
(9) as a loss on extinguishment of debt upon our 2012 prepayments on our Term
Loan indebtedness.
(10) To exclude milestone payments to partners.
(11) To reflect the cash tax savings results from our recent acquisitions and
the tax effect of the pre-tax adjustments above at applicable tax rates.
Nine Months Ended September 30, Actual
2011 (unaudited) Reported Adjustments Adjusted
(GAAP)
REVENUES $ 1,926,715 $ — $ 1,926,715
COSTS AND EXPENSES:
Cost of revenues 770,427 (183,640) (1) 586,787
Selling, general and 581,878 (20,177) (2) 561,701
administrative
Research and development 126,854 (18,346) (3) 108,508
Asset impairment charges 22,691 (22,691) (4) —
Acquisition-related and 29,517 (29,517) (5) —
integration items, net
OPERATING INCOME $ 395,348 $ 274,371 $ 669,719
INTEREST EXPENSE, NET 97,142 (14,014) (6) 83,128
NET LOSS ON EXTINGUISHMENT OF 8,548 (8,548) (7) —
DEBT
OTHER INCOME, NET (2,777) 2,636 (8) (141)
INCOME BEFORE INCOME TAX $ 292,435 $ 294,297 $ 586,732
INCOME TAX 100,283 45,349 (9) 145,632
CONSOLIDATED NET INCOME $ 192,152 $ 248,948 $ 441,100
Less: Net income attributable to 41,133 — 41,133
noncontrolling interests
NET INCOME ATTRIBUTABLE TO ENDO
HEALTH $ 151,019 $ 248,948 $ 399,967
SOLUTIONS INC.
DILUTED (LOSS) EARNINGS PER $ 1.24 $ 3.29
SHARE
DILUTED WEIGHTED AVERAGE SHARES 121,432 121,432
Notes to reconciliation of our GAAP statements of operations to our adjusted
statements of operations:
To exclude amortization of commercial intangible assets related to
marketed products of $132,571, the impact of inventory step-up recorded as
(1) part of acquisition accounting of $40,718, certain integration costs and
separation benefits incurred in connection with continued efforts to
enhance the company's operations of $1,351 and milestone payments to
partners of $9,000.
To exclude certain integration costs and separation benefits incurred in
(2) connection with continued efforts to enhance the company's operations of
$16,247 and amortization of customer relationships of $3,930.
(3) To exclude milestone and upfront payments to partners.
(4) To exclude asset impairment charges.
To exclude acquisition-related and integration costs of $36,975 and a gain
(5) of $(7,458) recorded to reflect the change in fair value of the contingent
consideration associated with the Indevus and Qualitest acquisitions.
(6) To exclude additional interest expense as a result of adopting ASC 470-20.
To exclude the unamortized debt issuance costs written off and recorded as
(7) a loss on extinguishment of debt upon the early termination of our 2010
Credit Facility.
(8) To exclude the gain on hedging activities for foreign currencies.
(9) To reflect the cash tax savings results from our recent acquisitions and
the tax effect of the pre-tax adjustments above at applicable tax rates.
See Endo's Current Report on Form 8-K filed today with the Securities and
Exchange Commission for an explanation of Endo's reasons for using non-GAAP
measures.
Reconciliation of Projected GAAP Diluted Earnings Per Share to Adjusted
Diluted Earnings Per Share Guidance for 2012
Year Ending
December 31, 2012
Projected GAAP diluted income per common share $ 0.87 To $ 0.97
Upfront and milestone-related payments to partners 0.52 0.52
Amortization of commercial intangible assets and 1.90 1.90
inventory step-up
Acquisition and integration costs related to 0.42 0.42
recent acquisitions.
One-time payment now expected to be made to Impax 0.87 0.87
Labs
Litigation-related contingencies 0.69 0.69
Watson litigation settlement 0.71 0.71
Impairment of long-lived assets 0.45 0.45
Interest expense adjustment for ASC 470-20 and 0.23 0.23
other treasury related items
Tax effect of pre-tax adjustments at the
applicable tax rates and certain other
(1.66) (1.66)
expected cash tax savings as a result of recent
acquisitions
Diluted adjusted income per common share guidance $ 5.00 To $ 5.10
The company's guidance is being issued based on certain assumptions including:
o Certain of the above amounts are based on estimates and there can be no
assurance that Endo will achieve these results.
o Includes all completed business development transactions as of Nov 5,
2012.
About Endo
Endo Health Solutions Inc. (Endo) is a US-based diversified healthcare company
that is redefining healthcare value by finding solutions for the unmet needs
of patients along care pathways for pain management, pelvic health, urology,
endocrinology and oncology. Through our operating companies: Endo
Pharmaceuticals, Qualitest, AMS and HealthTronics, Endo is dedicated to
improving care through a combination of branded products, generics, devices,
technology and services that creates maximum value for patients, providers and
payers alike. Learn more at www.endo.com.
(Tables Attached)
The following tables present Endo's unaudited Net Revenues for the three and
nine months ended September 30, 2012 and 2011:
Endo Health Solutions Inc.
Net Revenues (unaudited)
(in thousands)
Three Months Ended September Percent Nine Months Ended September 30, Percent
30, Growth Growth
2012 2011 2012 2011
Endo
Pharmaceuticals:
LIDODERM® $ 238,282 $ 207,364 15 % $ 676,302 $ 592,929 14 %
OPANA® ER 62,232 97,753 (36 % 236,731 275,221 (14) %
Voltaren® Gel 35,483 36,260 (2) % 79,173 104,213 (24) %
PERCOCET® 24,209 28,130 (14) % 73,413 82,765 (11) %
FROVA® 15,706 14,815 6 % 45,352 42,186 8 %
SUPPRELIN® LA 14,534 12,695 14 % 42,777 36,432 17 %
VANTAS® 4,114 5,013 (18) % 12,352 10,612 16 %
VALSTAR® 8,394 6,295 33 % 20,717 16,220 28 %
FORTESTA® Gel 8,823 8,409 5 % 21,526 9,468 127 %
Other Branded 933 4,948 (81) % 1,788 17,527 (90) %
Products
Royalty and 3,935 3,829 3 % 12,874 11,719 10 %
Other Revenue
Total Endo $ 416,645 $ 425,511 (2) % $ 1,223,005 $ 1,199,292 2 %
Pharmaceuticals
Total Qualitest $ 166,070 $ 147,975 12 % $ 471,310 $ 415,431 13 %
American Medical
Systems:
Men's Health 58,316 66,548 (12) % 192,728 76,316 153 %
Women's Health 29,399 38,240 (23) % 95,763 46,027 108 %
BPH Therapy 25,589 26,731 (4) % 83,110 35,988 131 %
Total AMS 113,304 131,519 (14) % 371,601 158,331 135 %
HealthTronics 54,463 54,073 1 % 160,387 153,661 4 %
Total Revenue 750,482 759,078 (1) % 2,226,303 1,926,715 16 %
The following table presents Endo's unaudited Pro forma Net Revenues for the
seven quarters ended September 30, 2012 giving effect to the AMS acquisition
as if it had occurred on January 1, 2011:
Endo Health Solutions Inc.
Net Pro Forma Revenues (unaudited)
(in thousands)
2011 2012
Endo Q1 Q2 Q3 Q4 Q1 Q2 Q3
Pharmaceuticals:
LIDODERM® $ 189,725 $ 195,840 $ 207,364 $ 232,252 $ 210,014 $ 228,006 $ 238,282
OPANA® ER 84,615 92,853 97,753 109,118 81,086 93,413 62,232
Voltaren® Gel 31,298 36,655 36,260 38,488 — 43,690 35,483
PERCOCET® 26,960 27,675 28,130 21,835 23,380 25,824 24,209
FROVA® 13,208 14,163 14,815 15,994 15,644 14,002 15,706
SUPPRELIN® LA 11,222 12,515 12,695 13,683 13,446 14,797 14,534
VANTAS® 3,545 2,054 5,013 8,366 3,892 4,346 4,114
VALSTAR® 4,801 5,124 6,295 5,301 6,236 6,087 8,394
FORTESTA® Gel (969) 2,028 8,409 5,401 5,822 6,881 8,823
Other Branded 6,970 5,609 4,948 4,224 (265) 1,120 933
Products
Royalty and 4,221 3,751 3,829 3,813 4,319 4,620 3,935
Other Revenue
Total Endo $ 375,596 $ 398,267 $ 425,511 $ 458,475 $ 363,574 $ 442,786 $ 416,645
Pharmaceuticals
Total Qualitest $ 134,409 $ 133,047 $ 147,975 $ 151,423 $ 145,345 $ 159,895 $ 166,070
American Medical
Systems:
Men's Health 67,407 47,790 66,548 69,520 67,440 66,972 58,316
Women's Health 45,325 46,689 38,240 39,482 33,898 32,466 29,399
BPH Therapy 28,054 29,784 26,731 32,966 28,828 28,693 25,589
Total AMS $ 140,786 $ 124,263 $ 131,519 $ 141,968 $ 130,166 $ 128,131 $ 113,304
HealthTronics(1) 50,103 49,485 54,073 51,540 51,548 54,376 54,463
Total Revenue $ 700,894 $ 705,062 $ 759,078 $ 803,406 $ 690,633 $ 785,188 $ 750,482
(1) The HealthTronics segment does not include the pro forma impact of pre-acquisition revenues from the
recently acquired electronic medical records providers, Intuitive Medical Software (IMS) and meridianEMR,
Inc.
The following table presents unaudited condensed consolidated Balance Sheet
data at September 30, 2012 and December 31, 2011:
September 30, December 31,
2012 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 256,917 $ 547,620
Accounts receivable, net 759,594 733,222
Inventories, net 363,747 262,419
Other assets 332,241 244,835
Total current assets $ 1,712,499 $ 1,788,096
PROPERTY, PLANT AND EQUIPMENT, NET 333,119 297,731
GOODWILL 2,569,288 2,558,041
OTHER INTANGIBLES, NET 2,285,187 2,504,124
OTHER ASSETS 120,698 144,591
TOTAL ASSETS $ 7,020,791 $ 7,292,583
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,224,658 $ 993,216
Other current liabilities 130,974 128,562
Total current liabilities $ 1,355,632 $ 1,121,778
DEFERRED INCOME TAXES 581,975 617,677
LONG-TERM DEBT, LESS CURRENT PORTION, NET 3,069,518 3,424,329
OTHER LIABILITIES 83,149 89,208
STOCKHOLDERS' EQUITY:
Total Endo Health Solutions Inc. stockholders' $ 1,868,200 $ 1,977,690
equity
Noncontrolling interests 62,317 61,901
Total stockholders' equity $ 1,930,517 $ 2,039,591
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,020,791 $ 7,292,583
The following table presents unaudited condensed consolidated Statement of
Cash Flow data for the nine months ended September 30, 2012 and 2011:
Nine Months Ended September 30,
2012 2011
OPERATING ACTIVITIES:
Consolidated net income $ 15,755 $ 192,152
Adjustments to reconcile consolidated net
income to Net cash provided by
operating activities
Depreciation and amortization 211,780 169,187
Stock-based compensation 44,532 34,224
Amortization of debt issuance costs and 27,101 24,283
premium / discount
Other (25,771) 10,433
Changes in assets and liabilities which 23,735 (11,748)
provided (used) cash:
Net cash provided by operating activities 297,132 418,531
INVESTING ACTIVITIES:
Purchases of property, plant and equipment, (89,047) (38,462)
net
Acquisitions, net of cash acquired (3,210) (2,368,357)
Other 13,100) 39,631
Net cash used in investing activities (79,157) (2,367,188)
FINANCING ACTIVITIES:
Purchase of common stock, net of issuance of (151,394) (34,702)
common stock from treasury
Cash distributions to noncontrolling interests (39,234) (39,392)
Principal (payments) on indebtedness, net of (334,701) 2,030,449
proceeds
Exercise of Endo Health Solutions Inc. stock 15,317 21,780
options
Other 1,239 (76,418)
Net cash (used in) provided by financing (508,773) 1,901,717
activities
Effect of foreign exchange rate 95 397
NET DECREASE IN CASH AND CASH EQUIVALENTS (290,703) (46,543)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 547,620 466,214
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 256,917 $ 419,671
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements including
words such as "believes," "expects," "anticipates," "intends," "estimates,"
"plan," "will," "may," "look forward," "intend," "guidance," "future" or
similar expressions are forward-looking statements. Because these statements
reflect our current views, expectations and beliefs concerning future events,
these forward-looking statements involve risks and uncertainties. Investors
should note that many factors, as more fully described under the caption "Risk
Factors" in our Form 10-K, Form 10-Q and Form 8-K filings with the Securities
and Exchange Commission and as otherwise enumerated herein or therein, could
affect our future financial results and could cause our actual results to
differ materially from those expressed in forward-looking statements contained
in our Annual Report on Form 10-K. The forward-looking statements in this
press release are qualified by these risk factors. These are factors that,
individually or in the aggregate, could cause our actual results to differ
materially from expected and historical results. We assume no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future developments or otherwise.
SOURCE Endo Health Solutions
Website: http://www.endo.com
Contact: Investors/Media, Blaine Davis, +1-610-459-7158; Investors, Jonathan
Neely, +1-610-459-6645; Media, Kevin Wiggins, +1-610-459-7281
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