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Endo Health Solutions Announces Actions To Streamline Operations And Expand Platform For Sustainable Cash Flow And Earnings

 Endo Health Solutions Announces Actions To Streamline Operations And Expand
            Platform For Sustainable Cash Flow And Earnings Growth

-- Restructuring Expected To Reduce Annual Operating Expenses By $325 Million

-- Exploring Strategic Alternatives For HealthTronics Business and Branded
Pharmaceutical Discovery Platform

-- Will Focus On Organic Growth, More Efficient R&D Spend, Disciplined Capital
Allocation

-- Company Updates 2013 Guidance: Expects Revenues Of $2.65 Billion To $2.80
Billion; Adjusted Diluted EPS Of $4.10 To $4.40; GAAP EPS Of $1.49 To $1.79

PR Newswire

MALVERN, Pa., June 5, 2013

MALVERN, Pa., June 5, 2013 /PRNewswire/ -- Endo Health Solutions (Nasdaq:
ENDP) today outlined the strategic, operational and organizational steps it is
taking to refocus the Company and drive shareholder value. These actions are
the result of a comprehensive assessment of Endo's strengths and challenges,
its cost structure and execution capabilities, and its most promising
opportunities to drive future cash flow and earnings growth. Specifically,
the Company announced plans to:

  oReduce annual operating expenses by $325 million
  oExplore strategic alternatives for its HealthTronics business and branded
    pharmaceutical discovery platform
  oImprove R&D efficiency and effectiveness, with a focus on development
    capabilities and near-term revenue generating assets
  oEnhance organic growth drivers across business lines through more
    effective execution
  oPursue accretive acquisitions within a disciplined capital allocation
    framework
  oAttract, retain and develop talent across the organization within the
    context of a lean operating model

Rajiv De Silva, Chief Executive Officer of Endo, said, "The changes we are
announcing today are designed to bring sharper focus to Endo's strategic
growth priorities while right-sizing the organization. We believe these
actions will leave Endo with the right cost structure, leadership and
execution capabilities to drive sustainable cash flow and earnings growth over
time. Since joining Endo in March of this year, I have worked closely with
the Board and leadership team and solicited input from a wide array of
constituents from strategic partners to shareholders to gain a better
understanding of Endo's unique portfolio. I am convinced that through more
focused execution and discipline Endo can and will deliver on our commitments
to customers, employees, and shareholders, while continuing to innovate
products that make a difference in the lives of our patients. While our work
is just beginning, we believe the foundation we are putting in place will
provide the framework for more consistent, profitable growth within an
evolving healthcare landscape."

Cost Reductions

The Company has identified annual cost savings totaling approximately $325
million, which includes reducing headcount by approximately 15% worldwide,
streamlining general and administrative expenses, optimizing commercial spend
and refocusing R&D onto lower-risk projects and higher-return investments in
generics. Approximately $150 million of these savings are expected to be
realized in calendar year 2013, with the full $325 million run-rate achieved
by mid-2014, when compared with full year 2012. In 2013, Endo expects to
record certain cash implementation charges of approximately $60 million
associated with these savings, primarily resulting from severance payments.

Portfolio Optimization

In keeping with its more disciplined capital allocation framework, the Company
is evaluating strategic alternatives for its HealthTronics business, which
provides urological services, products and support systems to various
healthcare providers in the U.S. Endo also announced plans to explore
alternatives for its branded pharmaceutical early stage discovery platform,
which is made up of several drug discovery candidates in multiple therapeutic
areas. The Company will continue to evaluate the performance of its remaining
businesses so that their respective cash flows and returns are consistent with
Endo's investment criteria.

Growth Investments

Endo is committed to improving execution at its core businesses, optimizing
cash flow, and leveraging its strong market position and a streamlined cost
structure to generate organic growth at attractive margins. Specific areas of
focus include:

  oQualitest: Capitalizing on encouraging demand trends for its
    differentiated portfolio of controlled substances and liquids, and more
    effective R&D investment by targeting low-risk, high-return opportunities
    in generics.
  oBranded Pharmaceuticals: Enhancing performance of organic growth drivers,
    increasing profitability from the Company's mature brands while investing
    in key late-stage pipeline opportunities.
  oAmerican Medical Systems: Utilizing its leading position in urology to
    enhance demand for its unique products and services in attractive growth
    markets.

In addition, Endo remains committed to R&D across each business unit with a
particular focus on development capabilities and near-term revenue generating
assets. The Company will also identify additional incremental growth
opportunities through product licensing and development. At the same time, the
Company will pursue accretive acquisitions that offer attractive cost
synergies and enhance Endo's strategic positioning.

Financial Guidance

In conjunction with today's announcement and reflecting a recent FDA decision
with regard to Opana ER^®, Endo is revising its 2013 financial guidance as
follows:

  oTotal revenue to be between $2.65 billion and $2.80 billion
  oReported (GAAP) diluted earnings per share to be between $1.49 and $1.79
  oAdjusted diluted earnings per share to be between $4.10 and $4.40

The Company's 2013 guidance is based on certain assumptions including:

  oAdjusted gross margin of between 64 percent and 66 percent
  oAdjusted effective tax rate of between 27.5 percent and 28.5 percent
  oAdjusted operating expenses to be reduced by approximately $150 million
    when compared with full year 2012
  oThe company continues to expect a single generic competitor for Lidoderm^®
    in September 2013

Endo's guidance is based on estimated results for the twelve months ended Dec.
31, 2013 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 potential new corporate development transactions
or future divestments.

Conference Call and Webcast

Endo will host a conference call and webcast at 5:30 ET today. Investors and
other interested parties may call 877-280-4961 (domestic) or +1 857-244-7318
(international) and enter passcode 30553938. Please dial in 10 minutes prior
to the scheduled start time.

A replay of the call will be available from June 5, 2013 at 8:00 p.m. ET until
11:59 p.m. ET on June 19, 2013 by dialing 888-286-8010 (domestic) or +1
617-801-6888 (international) and entering passcode 47349640.

A simultaneous webcast of the call may be accessed by visiting www.endo.com.
In addition, a replay of the webcast will be available until 11:59 p.m. ET on
June 19, 2013. The replay can be accessed by clicking on "Events" in the
Investor Relations section of the website.



Reconciliation of Projected GAAP Diluted Earnings Per Share to Adjusted
Diluted
Earnings Per Share Guidance for 2013
                                                            Year Ending
                                                            December31, 2013
Projected GAAP diluted income per common share              $ 1.49  To $ 1.79
Upfront and milestone-related payments to partners          0.17       0.17
Amortization of commercial intangible assets and inventory  1.65       1.65
step-up
Integration and restructuring and other cost reduction      0.81       0.81
implementation charges
Charges for litigation and other legal matters              0.75       0.75
Actavis (Watson) litigation settlement                      (0.38)     (0.38)
Interest expense adjustment for ASC 470-20 and other        0.30       0.30
treasury related items
Tax effect of pre-tax adjustments at the applicable tax
rates and certain other expected cash tax savings as a      (0.69)     (0.69)
result of recent acquisitions
Diluted adjusted income per common share guidance           $ 4.10  To $ 4.40

The company's guidance is being issued based on certain assumptions
including:

  oCertain of the above amounts are based on estimates and there can be no
    assurance that Endo will achieve these results
  oIncludes all completed business development transactions as of June 6,
    2013

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. Through our operating companies: AMS, Endo Pharmaceuticals,
HealthTronics and Qualitest, Endo is dedicated to improving care through a
combination of branded products, generics, devices, technology and services
that creates value for patients, providers and payers alike. Learn more at
www.endo.com.

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, (484) 216-7158, or Investors, Jonathan
Neely (484) 216-6645
 
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