Endo Reports Third-Quarter 2018 Financial Results
08 Nov, 2018, 12:00 GMT
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 |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||||||||
U.S. Branded - Specialty & |
|||||||||||||||||||||
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 & |
$ |
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 |
$ |
(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, |
December 31, |
||||||
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 |
$ |
119,894 |
$ |
298,306 |
|||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH |
1,311,014 |
805,180 |
|||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH |
$ |
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 |
||||||||||||||||||||||||||||||||
Amortization of |
— |
(161,275) |
161,275 |
— |
161,275 |
— |
161,275 |
— |
161,275 |
— |
161,275 |
0.71 |
||||||||||||||||||||
Inventory step-up and |
— |
(71) |
71 |
— |
71 |
— |
71 |
— |
71 |
— |
71 |
— |
||||||||||||||||||||
Upfront and milestone-related |
— |
(745) |
745 |
(3,986) |
4,731 |
— |
4,731 |
— |
4,731 |
— |
4,731 |
0.02 |
||||||||||||||||||||
Inventory reserve |
— |
(207) |
207 |
— |
207 |
— |
207 |
— |
207 |
— |
207 |
— |
||||||||||||||||||||
Separation benefits |
— |
(3,626) |
3,626 |
(168) |
3,794 |
— |
3,794 |
— |
3,794 |
— |
3,794 |
0.02 |
||||||||||||||||||||
Certain litigation- |
— |
— |
— |
1,750 |
(1,750) |
— |
(1,750) |
— |
(1,750) |
— |
(1,750) |
(0.01) |
||||||||||||||||||||
Asset impairment |
— |
— |
— |
(142,217) |
142,217 |
— |
142,217 |
— |
142,217 |
— |
142,217 |
0.62 |
||||||||||||||||||||
Acquisition-related |
— |
— |
— |
(519) |
519 |
— |
519 |
— |
519 |
— |
519 |
— |
||||||||||||||||||||
Fair value of |
— |
— |
— |
(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 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
27,134 |
27,134 |
— |
||||||||||||||||||||
After considering items |
$ 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 |
||||||||||||||||||||||||||||||||
Amortization of |
— |
(161,413) |
161,413 |
— |
161,413 |
— |
161,413 |
— |
161,413 |
— |
161,413 |
0.73 |
||||||||||||||||||||
Inventory step-up and |
— |
(66) |
66 |
— |
66 |
— |
66 |
— |
66 |
— |
66 |
— |
||||||||||||||||||||
Upfront and |
— |
(688) |
688 |
(87) |
775 |
— |
775 |
— |
775 |
— |
775 |
— |
||||||||||||||||||||
Separation benefits |
— |
|||||||||||||||||||||||||||||||