Endo Pharmaceuticals Reports Strong Fourth Quarter Financial Results; Provides 2012 Financial Guidance

- Total quarterly revenues of $803 million increase 57 percent versus prior year; branded pharmaceuticals revenues grow 16 percent, reflecting strong performance of OPANA® ER, Voltaren® Gel and LIDODERM®; Generics revenues grow 23 percent on a pro forma basis

- Reported quarterly diluted EPS of $0.30 versus $0.77 for prior year

- Adjusted diluted EPS of $1.40 reflecting growth of 32 percent from 2010

- Reported annual diluted EPS of $1.55, down 30 percent from prior year; adjusted diluted EPS of $4.69, reflecting growth of 35 percent from 2010

- Company issues 2012 guidance for revenue of $3.15 to $3.30 billion and adjusted diluted EPS of $5.00 to $5.20; expects reported or GAAP diluted EPS of $2.60 to $2.80

News provided by

Endo Pharmaceuticals

Feb 24, 2012, 07:00 ET

CHADDS FORD, Pa., Feb. 24, 2012 /PRNewswire/ -- Endo Pharmaceuticals (Nasdaq: ENDP) today reported financial results for the fourth quarter of 2011.

Total revenues during the fourth quarter of 2011 increased 57 percent to $803.4 million, compared with $511.2 million in the same quarter of 2010.  Net income for the three months ended Dec. 31, 2011, was $36.6 million, compared with $93.0 million in the comparable 2010 period.  

Additionally, adjusted net income for the three months ended Dec. 31, 2011, was $168.2 million, up 32 percent, compared with $127.6 million in the same period in 2010.  Reported diluted earnings per share for the quarter ended Dec. 31, 2011, were $0.30 compared with $0.77 reported in the fourth quarter of 2010. Adjusted diluted earnings per share for the same period were $1.40, up 32 percent from $1.06 reported in 2010.

"Endo has built a diversified platform of healthcare businesses that span branded pharmaceuticals, generics, medical devices and services, and our 2011 financial performance reinforces the execution of our growth strategy and evolution through acquisition, as well as the organic contributions and strengths of each of our business segments," said Dave Holveck, president and CEO of Endo. "We look forward to updating our investors on the sustainable growth story of our diversified business and how we are exploring new ways to deliver integrated solutions that create value for key constituencies."

FINANCIAL PERFORMANCE AT A GLANCE

($ in thousands, except per share amounts)

4th Quarter

Twelve Months Ended
December 31

2011

2010

Change

2011

2010

Change

Total Revenues

$803,406

$511,190

57%

$2,730,121

$1,716,229

59%

Reported Net Income

36,594

92,985

(61)%

187,613

259,006

(28)%

Reported Diluted EPS

0.30

0.77

(61)%

1.55

2.20

(30)%

Adjusted Net Income

168,186

127,641

32%

568,153

410,361

38%

Adjusted Diluted EPS

$1.40

$1.06

32%

$4.69

$3.48

35%

BRANDED PHARMACEUTICALS

Branded pharmaceutical sales of $458 million for the fourth quarter 2011 represented an increase of 16 percent versus the prior year.  The fourth quarter performance of OPANA ER, Voltaren Gel and LIDODERM contributed to a strong full year for Endo's branded pharmaceuticals segment, which grew 13 percent versus 2010.  In the fourth quarter, OPANA ER net sales grew 46 percent on prescription growth of 40 percent.  Voltaren Gel net sales grew 23 percent on prescription growth of 34 percent.  Net sales of LIDODERM grew 12 percent on flat prescription growth.  The increase in LIDODERM net sales reflects changes as of mid November 2011, with respect to royalty obligations among Endo, Hind Healthcare, Inc., and Teikoku Seiyaku Co., Ltd.; changes which have been previously described in our filings with the U.S. Securities and Exchange Commission.

On Dec. 12, 2011, we announced the receipt of U.S. Food and Drug Administration (FDA) approval of our new formulation of OPANA ER designed to be crush-resistant.  The approval represents a significant milestone for Endo's branded pharmaceuticals portfolio.  Endo believes that this new formulation of OPANA ER, coupled with our long-term commitment to awareness and education around the appropriate use of opioids, will benefit patients, physicians and payers.  Additionally, a new patent was issued during the 4th quarter, (U.S. patent number 8,075,872) covering the new formulation of OPANA ER and is expected to provide protection until November 2023 for the new formulation of Opana ER.  

On Jan. 6, 2012, Endo announced the signing of a worldwide license and development agreement with U.S.-based BioDelivery Sciences International for BEMA® Buprenorphine.  The addition of BEMA Buprenorphine reflects Endo's continued commitment to its Branded Pharmaceuticals pain franchise and will broaden Endo's portfolio of therapeutics, allowing it to offer an integrated suite of products that currently include OPANA ER, Voltaren Gel and LIDODERM, as well as a broad range of generic pain products.

GENERICS

Generics sales of $151 million for the fourth quarter 2011 represented an increase of 131 percent over last year, reflecting Endo's acquisition of Qualitest Pharmaceuticals in November 2010.  For the twelve months ended December 31, 2011, generic sales increased approximately $420 million, an increase of 287 percent, driven by the acquisition of Qualitest Pharmaceuticals.  On a pro forma basis, generics sales grew 21 percent in 2011, reflecting the ability to capitalize on new business opportunities in generic pharmaceuticals.  

DEVICES

Devices sales, driven by the June 2011 acquisition of American Medical Systems (AMS), were $142 million for the fourth quarter.  Men's Health, led by sales of the AMS 800® Artificial Urinary Sphincter, grew 7 percent on a pro forma basis in the fourth quarter of 2011, compared with same period last year.  Benign prostatic hyperplasia (BPH), led by the increasing share of procedural volumes for the GreenLight XPS™ console and the accompanying MoXy fiber, grew 1 percent on a pro forma basis in the fourth quarter of 2011.  Women's Health continued to experience pressure in the fourth quarter of 2011, following a September FDA Advisory Committee meeting, which met to discuss the use of surgical mesh products in the repair of pelvic organ prolapse and stress urinary incontinence.  

SERVICES

Services sales of $52 million for the fourth quarter 2011 represented an increase of 2 percent over last year, as a result of improved access to equipment for patients and physicians.  The Company expects improved top-line growth from the Services segment in 2012 and beyond from an expanding set of partnerships in our Endocare® cryoablation therapy as well as our pilot programs involving the sales of this device through the AMS channel.  In the fourth quarter of 2011, HealthTronics Inc., completed the strategic acquisitions of Intuitive Medical Software (IMS) and meridianEMR, Inc., two providers of electronic medical records for urologists, that provide access to approximately 1,850 urologists using data platforms that will enhance service offerings in urology practice management.  

Balance Sheet Update

During the fourth quarter of 2011, Endo made payments of approximately $140 million to reduce the outstanding principal of term-loan debt associated with the acquisition of AMS.  For the full year ending Dec. 31, 2011, Endo made payments of approximately $290 million to reduce the outstanding principal of term-loan debt associated with the acquisition of AMS.  At Dec. 31, 2011, the company's debt to adjusted EBITDA ratio is 3.0 times.  The company believes that it will achieve its objective of reducing its debt to adjusted EBITDA ratio to 2.0 to 2.5 times in 2013.

2012 FINANCIAL GUIDANCE

Endo's estimates are based on projected results for the twelve months ended Dec. 31, 2012.  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, certain separation benefits, asset impairment charges or for potential new corporate development transactions.  For the full year ended Dec. 31, 2012, Endo estimates:

  • Total revenue between $3.15 billion and $3.30 billion
  • Total Branded Pharmaceuticals segment revenue between $1.740 billion and $1.800 billion
  • Total Generics segment revenue between $635 million and $675 million
  • Total Devices segment revenue between $530 million and $570 million
  • Total Services segment revenue between $240 million and $260 million
  • Reported (GAAP) diluted earnings per share between $2.60 and $2.80
  • Adjusted diluted earnings per share between $5.00 and $5.20
  • Cash flow from operations between $750 million and $850 million
  • Capital expenditures to be approximately $100 million

Endo's 2012 guidance is based on certain current assumptions including:

  • Adjusted gross margin between 68 percent and 69 percent
  • Adjusted effective tax rate of between 30.5 percent and 31.5 percent
  • Weighted average number of common shares outstanding of 122 million shares for the year ended Dec. 31, 2012
  • Manufacturing of the new formulation of Opana ER to be at commercial scale by early Q2
  • Manufacturing of Voltaren Gel to an alternate Novartis location with product returning to market in limited capacity in early Q2, and returning to full capacity by end of Q2
  • Continued pressure in our AMS female surgical mesh business as a result of 2011 FDA Advisory Committee meeting
  • Strong business performance from our branded business portfolio of products and from Generics

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 800-561-2718 (domestic) or +1 617-614-3525 (international) and enter passcode 29896529.  Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from Feb. 24 at 10:30 p.m. ET until 12:00 p.m. ET on Mar. 9, 2012 by dialing 888-286-8010 (domestic) or +1 617-801-6888 (international) and entering passcode 35294180.

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 Mar. 9, 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 Dec. 31, 2011 and Dec. 31, 2010 (in thousands, except per share data):


Three Months Ended December 31, 2011 (unaudited)

Actual

Reported

(GAAP)


Adjustments

Adjusted

REVENUES                                               

$  803,406

$  —

$  803,406





COSTS AND EXPENSES:



 Cost of revenues                                       

294,781

(61,449)

(1)

233,332

 Selling, general and administrative                           

242,656

(17,225)

(2)

225,431

 Research and development                               

55,432

(752)

(3)

54,680

 Asset impairment charges                                 

93,398

(93,398)

(4)

—

 Acquisition-related items, net                               

4,121

(4,121)

(5)

—





OPERATING INCOME                                       

$  113,018

$  176,945

$  289,963





INTEREST EXPENSE, NET                                   

50,882

(4,938)

(6)

45,944

LOSS ON EXTINGUISHMENT OF DEBT, NET                     

3,371

(3,371)

(7)

—

OTHER INCOME, NET                                       

(491)

—

(491)





INCOME BEFORE INCOME TAX                               

$  59,256

$  185,254

$  244,510





INCOME TAX                                             

9,343

53,662

(8)

63,005





CONSOLIDATED NET INCOME                                

$  49,913

$  131,592

$  181,505





Less: Net income attributable to noncontrolling interests         

(13,319)

—

(13,319)





NET INCOME ATTRIBUTABLE TO ENDO PHARMACEUTICALS HOLDINGS INC.   

$  36,594

$  131,592

$  168,186










DILUTED EARNINGS PER SHARE                             

$  0.30

$  1.40

DILUTED WEIGHTED AVERAGE SHARES                       

120,418

120,418

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:


  1. To exclude amortization of commercial intangible assets related to marketed products of $51,925, the impact of inventory step-up recorded as part of acquisition accounting of $8,720, and certain integration costs and separation benefits incurred in connection with continued efforts to enhance the company's operations of $804.
  2. To exclude certain integration costs and separation benefits incurred in connection with continued efforts to enhance the company's operations of $3,419, amortization of customer relationships of $2,543 and the accrual of an unfavorable court decision and attorneys' fees in the matter of  Allmed Systems Inc. d/b/a Lisa Laser USA, Inc. and Lisa Laser Products OHG. vs. HealthTronics, Inc. of $11,263, which is currently pending appeal.
  3. To exclude milestone payments to partners.
  4. To exclude asset impairment charges.
  5. To exclude acquisition-related costs of $4,026 and a loss of $95 recorded to reflect the change in fair value of the contingent consideration associated with the Qualitest acquisition.
  6. To exclude additional interest expense as a result of adopting ASC 470-20.
  7. To exclude the unamortized debt issuance costs written off and recorded as a loss on extinguishment of debt upon our 2011 prepayments on our Term Loan indebtedness.
  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.


Three Months Ended December 31, 2010 (unaudited)

Actual

Reported

(GAAP)


Adjustments

Adjusted

REVENUES                                               

$  511,190

$  —

$  511,190





COSTS AND EXPENSES:



 Cost of revenues                                       

169,548

(35,119 )

(1)

134,429

 Selling, general and administrative                           

143,203

(675)

(2)

142,528

 Research and development                               

39,256

(4,650)

(3)

34,606

 Asset impairment charges                                 

22,000

(22,000)

(4)

—

 Acquisition-related items, net                               

(12,339)

12,339

(5)

—





OPERATING INCOME                                       

$  149,522

$  50,105

$  199,627





INTEREST EXPENSE, NET                                   

13,834

(4,476)

(6)

9,358

OTHER INCOME, NET                                       

(1,454)

—

(1,454)





INCOME BEFORE INCOME TAX                               

$  137,142

$  54,581

$  191,723





INCOME TAX                                             

31,409

19,925

(7)

51,334





CONSOLIDATED NET INCOME                                

$  105,733

$  34,656

$  140,389





Less: Net income attributable to noncontrolling interests         

(12,748)

—

(12,748)





NET INCOME ATTRIBUTABLE TO ENDO PHARMACEUTICALS HOLDINGS INC.   

$  92,985

$  34,656

$  127,641










DILUTED EARNINGS PER SHARE                             

$  0.77

$  1.06

DILUTED WEIGHTED AVERAGE SHARES                       

120,516

120,516

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:


  1. To exclude amortization of commercial intangible assets related to marketed products of $30,244 and the impact of inventory step-up recorded as part of acquisition accounting of $4,875.
  2. To exclude certain costs and separation benefits incurred in connection with continued efforts to enhance the Company's operations.
  3. To exclude milestone and upfront payments to partners.
  4. To exclude asset impairment charges.
  5. To exclude acquisition-related costs of $41,231 as well as the impact, under purchasing accounting, of a gain recorded to reflect the change in the company's current estimate of fair value, in accordance with GAAP, of the contingent consideration associated with the Indevus acquisition of ($53,570).
  6. To exclude additional interest expense as a result of adopting ASC 470-20 of $4,508 and to exclude amortization of the premium on debt acquired from Indevus of ($32).
  7. To reflect the cash tax savings resulting from the Indevus, HealthTronics, Penwest and Qualitest 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 twelve months ended Dec. 31, 2011 and Dec. 31, 2010 (in thousands, except per share data):


Twelve Months Ended December 31, 2011(unaudited)

Actual

Reported

(GAAP)


Adjustments

Adjusted

REVENUES                                               

$  2,730,121

$  —

$  2,730,121





COSTS AND EXPENSES:



 Cost of revenues                                       

1,065,208

(245,089)

(1)

820,119

 Selling, general and administrative                           

824,534

(37,402)

(2)

787,132

 Research and development                               

182,286

(19,098)

(3)

163,188

 Asset impairment charges                                 

116,089

(116,089)

(4)

—

 Acquisition-related items, net                               

33,638

(33,638)

(5)

—





OPERATING INCOME                                       

$  508,366

$  451,316

$  959,682





INTEREST EXPENSE, NET                                   

148,024

(18,952)

(6)

129,072

LOSS ON EXTINGUISHMENT OF DEBT, NET                     

11,919

(11,919)

(7)

—

OTHER INCOME, NET                                       

(3,268)

2,636

(8)

(632)





INCOME BEFORE INCOME TAX                               

$  351,691

$  479,551

$  831,242





INCOME TAX                                             

109,626

99,011

(9)

208,637





CONSOLIDATED NET INCOME                                

$  242,065

$  380,540

$  622,605





Less: Net income attributable to noncontrolling interests         

(54,452)

—

(54,452)





NET INCOME ATTRIBUTABLE TO ENDO PHARMACEUTICALS HOLDINGS INC.   

$  187,613

$  380,540

$  568,153










DILUTED EARNINGS PER SHARE                             

$  1.55

$  4.69

DILUTED WEIGHTED AVERAGE SHARES                       

121,178

121,178

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:


  1. To exclude amortization of commercial intangible assets related to marketed products of $184,496, the impact of inventory step-up recorded as part of acquisition accounting of $49,438, certain integration costs and separation benefits incurred in connection with continued efforts to enhance the company's operations of $2,155 and milestone payments to partners of $9,000.
  2. To exclude certain integration costs and separation benefits incurred in connection with continued efforts to enhance the company's operations of $19,666, amortization of customer relationships of $6,473 and the accrual of an unfavorable court decision and attorneys' fees in the matter of  Allmed Systems Inc. d/b/a Lisa Laser USA, Inc. and Lisa Laser Products OHG. vs. HealthTronics, Inc. of $11,263, which is currently pending appeal.
  3. To exclude milestone payments to partners.
  4. To exclude asset impairment charges.
  5. To exclude acquisition-related costs of $41,001 and a gain of $(7,363) 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 unamortized debt issuance costs written off and recorded as a loss on extinguishment of debt of $8,548 upon the early termination of our 2010 Credit Facility and $3,371 upon our 2011 prepayments on our Term Loan indebtedness.
  8. To exclude a 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.

Twelve Months Ended December 31, 2010 (unaudited)

Actual

Reported

(GAAP)


Adjustments

Adjusted

REVENUES       

$  1,716,229

$  —

$  1,716,229





COSTS AND EXPENSES:



       Cost of revenues 

504,757

(90,263)

(1)

414,494

       Selling, general and administrative

547,605

(16,733)

(2)

530,872

       Research and development

144,525

(24,362)

(3)

120,163

       Asset impairment charges

35,000

(35,000)

(4)

—

       Acquisition-related items, net

18,976

(18,976)

(5)

—





OPERATING INCOME       

$  465,366

$  185,334

$  650,700





INTEREST EXPENSE, NET   

46,601

(16,983)

(6)

29,618

OTHER INCOME, NET       

(1,933)

(239)

(7)

(2,172)





INCOME BEFORE INCOME TAX       

$  420,698

$  202,556

$  623,254





INCOME TAX     

133,678

51,201

(8)

184,879





CONSOLIDATED NET INCOME

$  287,020

$  151,355

$  438,375





Less: Net income attributable to noncontrolling interests 

(28,014)

—

(28,014)





NET INCOME ATTRIBUTABLE TO ENDO PHARMACEUTICALS HOLDINGS INC.   

$  259,006

$  151,355

$  410,361










DILUTED EARNINGS PER SHARE     

$  2.20

$  3.48

DILUTED WEIGHTED AVERAGE SHARES       

117,951

117,951

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:


  1. To exclude amortization of commercial intangible assets related to marketed products of $83,974 and the impact of inventory step-up recorded as part of acquisition accounting of $6,289.
  2. To exclude certain costs incurred with connection with continued efforts to enhance the Company's operations.
  3. To exclude a milestone-like payment and milestone and upfront payments to partners of $23,850 and certain costs incurred in connection with continued efforts to enhance the cost structure of the company of $512.
  4. To exclude asset impairment charges.
  5. To exclude acquisition-related costs of $70,396 as well as the impact, under purchase accounting, of a gain recorded to reflect the change in the company's current estimate of fair value, in accordance with GAAP, of the contingent consideration associated with the Indevus acquisition of ($51,420).
  6. To exclude additional interest expense as a result of adopting ASC 470-20 of $17,296 and to exclude amortization of the premium on debt acquired from Indevus of ($313).
  7. To exclude changes in fair value of financial instruments, net.
  8. To reflect the cash tax savings resulting from the Indevus, HealthTronics, Penwest and Qualitest 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 additional non-GAAP reconciliations and 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

$2.60

To

$2.80

Upfront and milestone-related payments to partners

$0.76

$0.76

Amortization of commercial intangible assets and inventory step-up

$1.89

$1.89

Acquisition and integration costs related to recent acquisitions.

$0.10

$0.10

Interest expense adjustment for ASC 470-20 and other treasury related items

$0.21

$0.21

Tax effect of pre-tax adjustments at the applicable tax rates and certain other expected cash tax savings as a result of recent acquisitions

($0.56)

($0.56)

Diluted adjusted income per common share guidance

$5.00

To

$5.20





The company's guidance is being issued based on certain assumptions including:
  • Certain of the above amounts are based on estimates and there can be no assurance that Endo will achieve these results.
  • Includes all completed business development transactions as of February 24, 2012.

About Endo

Endo Pharmaceuticals Holdings is a U.S.-based, specialty healthcare solutions company with a diversified business model, operating in three key business segments - branded pharmaceuticals, generics and devices and services. We deliver an innovative suite of complementary products and services to meet the needs of patients in areas such as pain management, pelvic health, urology, endocrinology and oncology. For more information about Endo Pharmaceuticals Holdings and its businesses Endo Pharmaceuticals Inc., American Medical Systems, HealthTronics and Qualitest Pharmaceuticals, please visit http://www.endo.com/.

(Tables Attached)

The following tables present Endo's unaudited Net Revenues for the three and twelve months ended Dec. 31, 2011 and 2010:

Endo Pharmaceuticals Holdings Inc.
Net Revenues (unaudited)
(in thousands)


Three Months Ended

December 31

Twelve Months Ended

December 31


2011

2010

Percent
Growth

2011

2010

Percent
Growth









Branded Pharmaceuticals
















LIDODERM®               

$   232,252

$        207,649

12%

$   825,181

$    782,609

5%

OPANA® ER               

109,118

74,734

46%

384,339

239,864

60%

Voltaren® Gel              

38,488

31,309

23%

142,701

104,941

36%

PERCOCET®               

21,835

30,919

(29)%

104,600

121,347

(14)%

FROVA®                 

15,994

15,401

4%

58,180

59,299

(2)%

SUPPRELIN® LA            

13,683

13,096

4%

50,115

46,910

7%

VANTAS®                 

8,366

4,001

109%

18,978

16,990

12%

VALSTAR®               

5,301

4,756

11%

21,521

14,120

52%

FORTESTA® Gel           

5,401

—

NM

14,869

—

NM









Other Branded Products(1)   

4,224

10,071

(58)%

21,751

68,599

(68)%

Royalty and Other Revenue   

3,813

3,274

16%

15,532

12,893

20%









Total Branded Pharmaceuticals

$   458,475

$       395,210

16%

$   1,657,767

$   1,467,572

13%









Total Generics            

$   151,423

$         65,522

131%

$      566,854

$      146,513

287%









Devices









Men's Health               

$   69,520

$                —

NM

$        145,836

$               —

NM

Women's Health             

39,482

—

NM

85,509

—

NM

BPH Therapy               

32,966

—

NM

68,954

—

NM









Total Devices             

$    141,968

$                —

NM

$    300,299

$               —

NM









Total Services            

$    51,540

$         50,458

2%

$    205,201

$      102,144

101%









Total Revenue            

$    803,406

$      511,190

57%

$    2,730,121

$ 1,716,229

59%










(1) To conform to current year presentation, net sales from our immediate-release formulation of OPANA have been reclassified and are now included within other branded product results.

The following table presents Endo's unaudited Pro forma Net Revenues for the eight quarters ended Dec. 31, 2011 giving effect to the  AMS acquisition, the Qualitest acquisition, the Penwest acquisition and the HealthTronics, Inc. acquisition as if they had occurred on Jan. 1, 2010:

Endo Pharmaceuticals Holdings Inc.
Net Pro Forma Revenues (unaudited)
(in thousands)

2010

2011

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4









Branded Pharmaceuticals
















LIDODERM®

$182,607

$196,090

$196,263

$207,649

$189,725

$195,840

$207,364

$232,252

OPANA® ER

49,766

56,555

58,809

74,734

84,615

92,853

97,753

109,118

Voltaren® Gel

20,362

26,323

26,947

31,309

31,298

36,655

36,260

38,488

PERCOCET®

28,673

31,805

29,950

30,919

26,960

27,675

28,130

21,835

FROVA®

15,082

14,680

14,136

15,401

13,208

14,163

14,815

15,994

SUPPRELIN® LA

10,587

12,209

11,018

13,096

11,222

12,515

12,695

13,683

VANTAS®

4,389

4,960

3,640

4,001

3,545

2,054

5,013

8,366

VALSTAR®

3,750

4,016

1,598

4,756

4,801

5,124

6,295

5,301

FORTESTA® Gel

—

—

—

—

(969)

2,028

8,409

5,401









Other Branded Products(1)

19,257

19,799

19,472

10,071

6,970

5,609

4,948

4,224

Royalty and Other Revenue

5,911

3,647

4,101

3,325

4,221

3,751

3,829

3,813









Total Branded Pharmaceuticals

$340,384

$370,084

$365,934

$395,261

$375,596

$398,267

$425,511

$458,475









Total Generics

$105,809

$112,075

$126,663

$122,791

$134,409

$133,047

$147,975

$151,423









Devices









Men's Health

$  64,480

$  61,361

$  55,177

$  65,221

$  67,407

$  47,790

$  66,548

$  69,520

Women's Health

42,748

44,491

41,192

48,816

45,325

46,689

38,240

39,482

BPH Therapy

25,911

29,176

26,890

32,615

28,054

29,784

26,731

32,966

Uterine Health(2)

1,787

1,340

770

341

—

—

—

—









Total Devices

$134,926

$136,368

$124,029

$146,993

$140,786

$124,263

$131,519

$141,968









Total Services(3)

$  48,389

$  50,300

$  51,686

$  50,458

$  50,103

$  49,485

$  54,073

$  51,540


















Total Revenue

$629,508

$668,827

$668,312

$715,503

$700,894

$705,062

$759,078

$803,406










(1) To conform to current year presentation, net sales from our immediate-release formulation of Opana have been reclassified and are now included within other branded product results.


(2) The uterine health product line, Her Option® was sold to a third party in February 2010.  Revenues for 2010 consist of end-customer revenue earned prior to the date of sale, in addition to revenue earned as part of the product supply agreement with CooperSurgical, Inc., which continued through the fourth quarter of 2010.


(3) The services 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 Dec. 31, 2011 and Dec. 31, 2010:



December 31,

2011

December 31,

2010

ASSETS

CURRENT ASSETS:

Cash and cash equivalents                                   

$  547,620

$  466,214

Accounts receivable, net                                     

733,222

547,807

Inventories, net                                             

262,419

178,805

Other assets                                               

244,835

166,708



Total current assets                                   

$1,788,096

$  1,359,534



PROPERTY, PLANT AND EQUIPMENT, NET                             

297,731

215,295

GOODWILL                                                     

2,558,041

715,005

OTHER INTANGIBLES, NET                                         

2,504,124

1,531,760

OTHER ASSETS                                                 

144,591

90,795



TOTAL ASSETS                                                 

$  7,292,583

$  3,912,389



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable and accrued expenses                       

$  993,216

$  710,835

Other current liabilities                                       

128,562

24,993



Total current liabilities                                   

$  1,121,778

$  735,828



DEFERRED INCOME TAXES                                         

617,677

217,334

LONG-TERM DEBT, LESS CURRENT PORTION, NET                      

3,424,329

1,045,801

OTHER LIABILITIES                                               

89,208

110,097



STOCKHOLDERS' EQUITY:

Total Endo Pharmaceuticals Holdings Inc. stockholders' equity             

$  1,977,690

$  1,741,591



Noncontrolling interests                                           

61,901

61,738



Total stockholders' equity                                          

$  2,039,591

$  1,803,329



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     

$  7,292,583

$  3,912,389




The following table presents unaudited condensed consolidated statement of cash flow data for the twelve months ended Dec. 31, 2011 and 2010:

2011

2010

OPERATING ACTIVITIES:

Consolidated net income                                             

$    242,065

$    287,020

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

Depreciation and amortization                                   

237,414

108,404

Stock-based compensation                                     

46,013

22,909

Amortization of debt issuance costs and premium / discount           

32,788

22,013

Asset impairment charges                                      

116,089

35,000

Other                                                       

(71,835)

(65,372)

Changes in assets and liabilities which provided cash:                     

99,581

43,672



Net cash provided by operating activities                     

702,115

453,646



INVESTING ACTIVITIES:

Purchases of property, plant and equipment, net                         

(59,383)

(19,891)

Proceeds from investments and sales of trading securities                 

85,025

231,125

Acquisition, net of cash acquired                                      

(2,393,397)

(1,105,040)

Other                                                            

(6,337)

(2,517)



Net cash used in investing activities                         

(2,374,092)

(896,323)



FINANCING ACTIVITIES:

Proceeds from debt, net of principal payments                           

1,891,584

279,955

Deferred financing fees                                             

(82,504)

(13,563)

Purchase of common stock                                           

(34,702)

(58,974)

Distributions to noncontrolling interests                                 

(53,997)

(28,870)

Other                                                            

32,300

21,881



Net cash provided by financing activities                     

1,752,681

200,429



Effect of foreign exchange rate                                             

702

-

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 

81,406

(242,248)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       

466,214

708,462



CASH AND CASH EQUIVALENTS, END OF PERIOD                             

$    547,620

$    466,214




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 Pharmaceuticals

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