EX-99.1 2 ex991-9302018xearningsrele.htm EXHIBIT 99.1 9.30.18 EARNINGS RELEASE Ex 99.1 - 9.30.2018-Earnings Release


Exhibit 99.1
endologoa17.jpg
ENDO REPORTS THIRD-QUARTER 2018 FINANCIAL RESULTS

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
DUBLIN, November 8, 2018 -- 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."

1


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.

2


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.

3


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.

4


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.


5


FINANCIAL SCHEDULES
The following table presents Endo's unaudited Total Revenues for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands):
 
Three Months Ended September 30,
 
Percent Growth
 
Nine Months Ended September 30,
 
Percent Growth
 
2018
 
2017
 
 
2018
 
2017
 
U.S. Branded - Specialty & Established Pharmaceuticals:
 
 
 
 
 
 
 
 
 
 
 
Specialty Products:


 


 


 
 
 
 
 
 
XIAFLEX®
$
64,214

 
$
52,511

 
22
 %
 
$
184,855

 
$
152,113

 
22
 %
SUPPRELIN® LA
20,408

 
20,638

 
(1
)%
 
60,948

 
63,468

 
(4
)%
Other Specialty (1)
43,576

 
40,634

 
7
 %
 
114,202

 
113,407

 
1
 %
Total Specialty Products
$
128,198

 
$
113,783

 
13
 %
 
$
360,005

 
$
328,988

 
9
 %
Established Products:


 


 


 
 
 
 
 
 
PERCOCET®
$
30,730

 
$
31,349

 
(2
)%
 
$
93,539

 
$
93,183

 
 %
VOLTAREN® Gel
15,057

 
19,102

 
(21
)%
 
44,185

 
53,646

 
(18
)%
OPANA® ER

 
14,756

 
(100
)%
 

 
82,056

 
(100
)%
Other Established (2)
46,115

 
54,813

 
(16
)%
 
135,243

 
171,277

 
(21
)%
Total Established Products
$
91,902

 
$
120,020

 
(23
)%
 
$
272,967

 
$
400,162

 
(32
)%
Total U.S. Branded - Specialty & Established Pharmaceuticals (3)
$
220,100

 
$
233,803

 
(6
)%
 
$
632,972

 
$
729,150

 
(13
)%
U.S. Branded - Sterile Injectables:
 
 
 
 
 
 
 
 
 
 
 
VASOSTRICT®
$
112,333

 
$
105,741

 
6
 %
 
$
332,387

 
$
300,649

 
11
 %
ADRENALIN®
35,460

 
25,335

 
40
 %
 
101,858

 
50,464

 
NM

Ertapenem for injection
25,798

 

 
NM

 
25,798

 

 
NM

Other Sterile Injectables (4)
63,559

 
70,829

 
(10
)%
 
210,804

 
203,252

 
4
 %
Total U.S. Branded - Sterile Injectables (3)
$
237,150

 
$
201,905

 
17
 %
 
$
670,847

 
$
554,365

 
21
 %
Total U.S. Generic Pharmaceuticals
$
257,969

 
$
294,749

 
(12
)%
 
$
748,445

 
$
1,227,584

 
(39
)%
Total International Pharmaceuticals
$
30,247

 
$
56,430

 
(46
)%
 
$
108,425

 
$
189,119

 
(43
)%
Total Revenues
$
745,466

 
$
786,887

 
(5
)%
 
$
2,160,689

 
$
2,700,218

 
(20
)%
__________
(1)
Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray and AVEED®.
(2)
Products included within Other Established include, but are not limited to, LIDODERM®, EDEX®, TESTIM® and FORTESTA® Gel, including the authorized generics.
(3)
Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2018 or 2017.
(4)
Products included within Other Sterile Injectables include, but are not limited to, APLISOL® and ephedrine sulfate injection.

6


The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
TOTAL REVENUES
$
745,466

 
$
786,887

 
$
2,160,689

 
$
2,700,218

COSTS AND EXPENSES:
 
 
 
 
 
 
 
Cost of revenues
412,965

 
514,522

 
1,198,468

 
1,722,885

Selling, general and administrative
163,791

 
135,880

 
478,615

 
468,675

Research and development
39,683

 
39,644

 
160,431

 
123,522

Litigation-related and other contingencies, net
(1,750
)
 
(12,352
)
 
15,370

 
(14,016
)
Asset impairment charges
142,217

 
94,924

 
613,400

 
1,023,930

Acquisition-related and integration items
1,288

 
16,641

 
13,284

 
31,711

OPERATING LOSS FROM CONTINUING OPERATIONS
$
(12,728
)
 
$
(2,372
)
 
$
(318,879
)
 
$
(656,489
)
INTEREST EXPENSE, NET
131,847

 
127,521

 
385,896

 
361,267

LOSS ON EXTINGUISHMENT OF DEBT

 

 

 
51,734

OTHER INCOME, NET
(1,507
)
 
(2,097
)
 
(33,216
)
 
(10,843
)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX
$
(143,068
)
 
$
(127,796
)
 
$
(671,559
)
 
$
(1,058,647
)
INCOME TAX EXPENSE (BENEFIT)
3,003

 
(28,109
)
 
24,729

 
(97,517
)
LOSS FROM CONTINUING OPERATIONS
$
(146,071
)
 
$
(99,687
)
 
$
(696,288
)
 
$
(961,130
)
DISCONTINUED OPERATIONS, NET OF TAX
(27,134
)
 
3,017

 
(43,273
)
 
(705,886
)
NET LOSS
$
(173,205
)
 
$
(96,670
)
 
$
(739,561
)
 
$
(1,667,016
)
NET (LOSS) INCOME PER SHARE—BASIC:
 
 
 
 
 
 
 
Continuing operations
$
(0.65
)
 
$
(0.45
)
 
$
(3.11
)
 
$
(4.31
)
Discontinued operations
(0.12
)
 
0.02

 
(0.19
)
 
(3.16
)
Basic
$
(0.77
)
 
$
(0.43
)
 
$
(3.30
)
 
$
(7.47
)
NET (LOSS) INCOME PER SHARE—DILUTED:
 
 
 
 
 
 
 
Continuing operations
$
(0.65
)
 
$
(0.45
)
 
$
(3.11
)
 
$
(4.31
)
Discontinued operations
(0.12
)
 
0.02

 
(0.19
)
 
(3.16
)
Diluted
$
(0.77
)
 
$
(0.43
)
 
$
(3.30
)
 
$
(7.47
)
WEIGHTED AVERAGE SHARES:
 
 
 
 
 
 
 
Basic
224,132

 
223,299

 
223,829

 
223,157

Diluted
224,132

 
223,299

 
223,829

 
223,157


7


The following table presents unaudited Condensed Consolidated Balance Sheet data at September 30, 2018 and December 31, 2017 (in thousands):
 
September 30, 2018
 
December 31, 2017
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
1,118,885

 
$
986,605

Restricted cash and cash equivalents
289,667

 
320,453

Accounts receivable
467,156

 
517,436

Inventories, net
332,787

 
391,437

Other current assets
67,104

 
55,146

Total current assets
$
2,275,599

 
$
2,271,077

TOTAL NON-CURRENT ASSETS
8,246,063

 
9,364,503

TOTAL ASSETS
$
10,521,662

 
$
11,635,580

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Accounts payable and accrued expenses, including legal settlement accruals
$
1,985,637

 
$
2,184,618

Other current liabilities
35,831

 
36,291

Total current liabilities
$
2,021,468

 
$
2,220,909

LONG-TERM DEBT, LESS CURRENT PORTION, NET
8,228,612

 
8,242,032

OTHER LIABILITIES
491,041

 
687,759

SHAREHOLDERS' (DEFICIT) EQUITY
(219,459
)
 
484,880

TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
$
10,521,662

 
$
11,635,580


8


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

2017
OPERATING ACTIVITIES:
 
 
 
Net loss
$
(739,561
)
 
$
(1,667,016
)
Adjustments to reconcile Net loss to Net cash provided by operating activities:
 
 
 
Depreciation and amortization
556,503

 
742,936

Asset impairment charges
613,400

 
1,023,930

Other, including cash payments to claimants from Qualified Settlement Funds
(233,350
)
 
322,312

Net cash provided by operating activities
$
196,992

 
$
422,162

INVESTING ACTIVITIES:
 
 
 
Purchases of property, plant and equipment, excluding capitalized interest
$
(56,544
)
 
$
(94,102
)
Proceeds from sale of business and other assets, net
43,753

 
96,066

Other
(891
)
 
7,000

Net cash (used in) provided by investing activities
$
(13,682
)
 
$
8,964

FINANCING ACTIVITIES:
 
 
 
Payments on borrowings, net
$
(29,535
)
 
$
(12,325
)
Other
(33,273
)
 
(123,028
)
Net cash used in financing activities
$
(62,808
)
 
$
(135,353
)
Effect of foreign exchange rate
(608
)
 
3,983

Movement in cash held for sale

 
(1,450
)
NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS
$
119,894

 
$
298,306

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD
1,311,014

 
805,180

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD
$
1,430,908

 
$
1,103,486


9


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


10


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


11


Reconciliation of Other Adjusted Income Statement Data (non-GAAP)
The following tables provide detailed reconciliations of various other income statement data between the GAAP and non-GAAP amounts for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data):
Three Months Ended September 30, 2018
 
Total revenues
 
Cost of revenues
 
Gross margin
 
Gross margin %
 
Total operating expenses
 
Operating expense to revenue %
 
Operating (loss) income from continuing operations
 
Operating margin %
 
Other non-operating expense, net
 
(Loss) income from continuing operations before income tax
 
Income tax expense
 
Effective tax rate
 
(Loss) income from continuing operations
 
Discontinued operations, net of tax
 
Net (loss) income
 
Diluted (loss) income per share from continuing operations (14)
Reported (GAAP)
$
745,466

 
$
412,965

 
$
332,501

 
44.6
%
 
$
345,229

 
46.3
%
 
$
(12,728
)
 
(1.7
)%
 
$
130,340

 
$
(143,068
)
 
$
3,003

 
(2.1
)%
 
$
(146,071
)
 
$
(27,134
)
 
$
(173,205
)
 
$
(0.65
)
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets (1)

 
(161,275
)
 
161,275

 
 
 

 
 
 
161,275

 
 
 

 
161,275

 

 
 
 
161,275

 

 
161,275

 
0.71

Inventory step-up and other cost savings (2)

 
(71
)
 
71

 
 
 

 
 
 
71

 
 
 

 
71

 

 
 
 
71

 

 
71

 

Upfront and milestone-related payments (3)

 
(745
)
 
745

 
 
 
(3,986
)
 
 
 
4,731

 
 
 

 
4,731

 

 
 
 
4,731

 

 
4,731

 
0.02

Inventory reserve increase from restructuring (4)

 
(207
)
 
207

 
 
 

 
 
 
207

 
 
 

 
207

 

 
 
 
207

 

 
207

 

Separation benefits and other restructuring (5)

 
(3,626
)
 
3,626

 
 
 
(168
)
 
 
 
3,794

 
 
 

 
3,794

 

 
 
 
3,794

 

 
3,794

 
0.02

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

 

 

 
 
 
1,750

 
 
 
(1,750
)
 
 
 

 
(1,750
)
 

 
 
 
(1,750
)
 

 
(1,750
)
 
(0.01
)
Asset impairment charges (7)

 

 

 
 
 
(142,217
)
 
 
 
142,217

 
 
 

 
142,217

 

 
 
 
142,217

 

 
142,217

 
0.62

Acquisition-related and integration costs (8)

 

 

 
 
 
(519
)
 
 
 
519

 
 
 

 
519

 

 
 
 
519

 

 
519

 

Fair value of contingent consideration (9)

 

 

 
 
 
(769
)
 
 
 
769

 
 
 

 
769

 

 
 
 
769

 

 
769

 

Other (11)

 

 

 
 
 

 
 
 

 
 
 
(1,353
)
 
1,353

 

 
 
 
1,353

 

 
1,353

 
0.01

Tax adjustments (12)

 

 

 
 
 

 
 
 

 
 
 

 

 
2,270

 
 
 
(2,270
)
 

 
(2,270
)
 
(0.01
)
Exclude discontinued operations, net of tax (13)

 

 

 
 
 

 
 
 

 
 
 

 

 

 
 
 

 
27,134

 
27,134

 

After considering items (non-GAAP)
$
745,466

 
$
247,041

 
$
498,425

 
66.9
%
 
$
199,320

 
26.7
%
 
$
299,105

 
40.1
 %
 
$
128,987

 
$
170,118

 
$
5,273

 
3.1
 %
 
$
164,845

 
$

 
$
164,845

 
$
0.71

Three Months Ended September 30, 2017
 
Total revenues
 
Cost of revenues
 
Gross margin
 
Gross margin %
 
Total operating expenses
 
Operating expense to revenue %
 
Operating (loss) income from continuing operations
 
Operating margin %
 
Other non-operating expense, net
 
(Loss) income from continuing operations before income tax
 
Income tax (benefit) expense
 
Effective tax rate
 
(Loss) income from continuing operations
 
Discontinued operations, net of tax
 
Net (loss) income
 
Diluted (loss) income per share from continuing operations (14)
Reported (GAAP)
$
786,887

 
$
514,522

 
$
272,365

 
34.6
%
 
$
274,737

 
34.9
%
 
$
(2,372
)
 
(0.3
)%
 
$
125,424

 
$
(127,796
)
 
$
(28,109
)
 
22.0
%
 
$
(99,687
)
 
$
3,017

 
$
(96,670
)
 
$
(0.45
)
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets (1)

 
(161,413
)
 
161,413

 
 
 

 
 
 
161,413

 
 
 

 
161,413

 

 
 
 
161,413

 

 
161,413

 
0.73

Inventory step-up and other cost savings (2)

 
(66
)
 
66

 
 
 

 
 
 
66

 
 
 

 
66

 

 
 
 
66

 

 
66

 

Upfront and milestone-related payments (3)

 
(688
)
 
688

 
 
 
(87
)
 
 
 
775

 
 
 

 
775

 

 
 
 
775

 

 
775

 

Separation benefits and other restructuring (5)

 
(78,680
)
 
78,680

 
 
 
(2,013
)
 
 
 
80,693

 
 
 

 
80,693

 

 
 
 
80,693

 

 
80,693

 
0.36

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

 

 

 
 
 
12,352

 
 
 
(12,352
)
 
 
 

 
(12,352
)
 

 
 
 
(12,352
)
 

 
(12,352
)
 
(0.06
)
Asset impairment charges (7)

 

 

 
 
 
(94,924
)
 
 
 
94,924

 
 
 

 
94,924

 

 
 
 
94,924

 

 
94,924

 
0.43

Acquisition-related and integration costs (8)

 

 

 
 
 
(1,201
)
 
 
 
1,201

 
 
 

 
1,201

 

 
 
 
1,201

 

 
1,201

 
0.01

Fair value of contingent consideration (9)

 

 

 
 
 
(15,440
)
 
 
 
15,440

 
 
 

 
15,440

 

 
 
 
15,440

 

 
15,440

 
0.07

Other (11)

 

 

 
 
 

 
 
 

 
 
 
(3,035
)
 
3,035

 

 
 
 
3,035

 

 
3,035

 
0.01

Tax adjustments (12)

 

 

 
 
 

 
 
 

 
 
 

 

 
41,456

 
 
 
(41,456
)
 

 
(41,456
)
 
(0.19
)
Exclude discontinued operations, net of tax (13)

 

 

 
 
 

 
 
 

 
 
 

 

 

 
 
 

 
(3,017
)
 
(3,017
)
 

After considering items (non-GAAP)
$
786,887

 
$
273,675

 
$
513,212

 
65.2
%
 
$
173,424

 
22.0
%
 
$
339,788

 
43.2
 %
 
$
122,389

 
$
217,399

 
$
13,347

 
6.1
%
 
$
204,052

 
$

 
$
204,052

 
$
0.91


12


Nine Months Ended September 30, 2018
 
Total revenues
 
Cost of revenues
 
Gross margin
 
Gross margin %
 
Total operating expenses
 
Operating expense to revenue %
 
Operating (loss) income from continuing operations
 
Operating margin %
 
Other non-operating expense, net
 
(Loss) income from continuing operations before income tax
 
Income tax expense
 
Effective tax rate
 
(Loss) income from continuing operations
 
Discontinued operations, net of tax
 
Net (loss) income
 
Diluted (loss) income per share from continuing operations (14)
Reported (GAAP)
$
2,160,689

 
$
1,198,468

 
$
962,221

 
44.5
%
 
$
1,281,100

 
59.3
%
 
$
(318,879
)
 
(14.8
)%
 
$
352,680

 
$
(671,559
)
 
$
24,729

 
(3.7
)%
 
$
(696,288
)
 
$
(43,273
)
 
$
(739,561
)
 
$
(3.11
)
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets (1)

 
(471,662
)
 
471,662

 
 
 

 
 
 
471,662

 
 
 

 
471,662

 

 
 
 
471,662

 

 
471,662

 
2.10

Inventory step-up and other cost savings (2)

 
(261
)
 
261

 
 
 

 
 
 
261

 
 
 

 
261

 

 
 
 
261

 

 
261

 

Upfront and milestone-related payments (3)

 
(2,095
)
 
2,095

 
 
 
(40,932
)
 
 
 
43,027

 
 
 

 
43,027

 

 
 
 
43,027

 

 
43,027

 
0.19

Inventory reserve increase from restructuring (4)

 
(2,797
)
 
2,797

 
 
 

 
 
 
2,797

 
 
 

 
2,797

 

 
 
 
2,797

 

 
2,797

 
0.01

Separation benefits and other restructuring (5)

 
(57,457
)
 
57,457

 
 
 
(21,887
)
 
 
 
79,344

 
 
 

 
79,344

 

 
 
 
79,344

 

 
79,344

 
0.34

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

 

 

 
 
 
(15,370
)
 
 
 
15,370

 
 
 

 
15,370

 

 
 
 
15,370

 

 
15,370

 
0.07

Asset impairment charges (7)

 

 

 
 
 
(613,400
)
 
 
 
613,400

 
 
 

 
613,400

 

 
 
 
613,400

 

 
613,400

 
2.73

Acquisition-related and integration costs (8)

 

 

 
 
 
(1,553
)
 
 
 
1,553

 
 
 

 
1,553

 

 
 
 
1,553

 

 
1,553

 
0.01

Fair value of contingent consideration (9)

 

 

 
 
 
(11,731
)
 
 
 
11,731

 
 
 

 
11,731

 

 
 
 
11,731

 

 
11,731

 
0.05

Other (11)

 

 

 
 
 
630

 
 
 
(630
)
 
 
 
29,278

 
(29,908
)
 

 
 
 
(29,908
)
 

 
(29,908
)
 
(0.13
)
Tax adjustments (12)

 

 

 
 
 

 
 
 

 
 
 

 

 
25,126

 
 
 
(25,126
)
 

 
(25,126
)
 
(0.12
)
Exclude discontinued operations, net of tax (13)

 

 

 
 
 

 
 
 

 
 
 

 

 

 
 
 

 
43,273

 
43,273

 

After considering items (non-GAAP)
$
2,160,689

 
$
664,196

 
$
1,496,493

 
69.3
%
 
$
576,857

 
26.7
%
 
$
919,636

 
42.6
 %
 
$
381,958

 
$
537,678

 
$
49,855

 
9.3
 %
 
$
487,823

 
$

 
$
487,823

 
$
2.14

Nine Months Ended September 30, 2017
 
Total revenues
 
Cost of revenues
 
Gross margin
 
Gross margin %
 
Total operating expenses
 
Operating expense to revenue %
 
Operating (loss) income from continuing operations
 
Operating margin %
 
Other non-operating expense, net
 
(Loss) income from continuing operations before income tax
 
Income tax (benefit) expense
 
Effective tax rate
 
(Loss) income from continuing operations
 
Discontinued operations, net of tax
 
Net (loss) income
 
Diluted (loss) income per share from continuing operations (14)
Reported (GAAP)
$
2,700,218

 
$
1,722,885

 
$
977,333

 
36.2
%
 
$
1,633,822

 
60.5
%
 
$
(656,489
)
 
(24.3
)%
 
$
402,158

 
$
(1,058,647
)
 
$
(97,517
)
 
9.2
%
 
$
(961,130
)
 
$
(705,886
)
 
$
(1,667,016
)
 
$
(4.31
)
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets (1)

 
(615,490
)
 
615,490

 
 
 

 
 
 
615,490

 
 
 

 
615,490

 

 
 
 
615,490

 

 
615,490

 
2.75

Inventory step-up and other cost savings (2)

 
(281
)
 
281

 
 
 

 
 
 
281

 
 
 

 
281

 

 
 
 
281

 

 
281

 

Upfront and milestone-related payments (3)

 
(2,039
)
 
2,039

 
 
 
(4,913
)
 
 
 
6,952

 
 
 

 
6,952

 

 
 
 
6,952

 

 
6,952

 
0.03

Inventory reserve increase from restructuring (4)

 
(7,899
)
 
7,899

 
 
 

 
 
 
7,899

 
 
 

 
7,899

 

 
 
 
7,899

 

 
7,899

 
0.04

Separation benefits and other restructuring (5)

 
(85,367
)
 
85,367

 
 
 
(34,711
)
 
 
 
120,078

 
 
 

 
120,078

 

 
 
 
120,078

 

 
120,078

 
0.54

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

 

 

 
 
 
14,016

 
 
 
(14,016
)
 
 
 

 
(14,016
)
 

 
 
 
(14,016
)
 

 
(14,016
)
 
(0.06
)
Asset impairment charges (7)

 

 

 
 
 
(1,023,930
)
 
 
 
1,023,930