-- 18% Growth in Net Sales Driven by Demand for Branded Products
-- Adjusted EPS of $0.64 From Operations, Up 39% From 2007
-- Raises 2008 Adjusted EPS Guidance Range to $2.26 - $2.30
CHADDS FORD, PA -- (Marketwire) -- 10/30/08 -- Endo Pharmaceuticals (NASDAQ: ENDP) today
reported double-digit growth in net sales and adjusted earnings for the
third quarter of 2008.
Net sales during the third quarter of 2008 increased 18% to $316.8 million
compared with $269.5 million in the third quarter of 2007. Net income for
the three months ended September 30, 2008 was $68.2 million compared with
$59.1 million in the comparable 2007 period. As detailed in the
Supplemental Financial Information below, adjusted net income for the three
months ended September 30, 2008 was $76.1 million compared with $61.6
million in the same period in 2007.
Diluted earnings per share for the three months ended September 30, 2008
were $0.57 compared with $0.44 in the third quarter of 2007. Adjusted
diluted earnings per share for the three months ended September 30, 2008
were $0.64 compared with $0.46 in the same period in 2007.
Net sales for the nine months ended September 30, 2008 were $913.2 million
compared with $781.0 million in the comparable 2007 period. Diluted
earnings per share for the nine months ended September 30, 2008 were $1.48
compared with $1.31 in the comparable 2007 period. Adjusted diluted
earnings per share for the nine months ended September 30, 2008 were $1.70
compared with $1.40 in the same period in 2007.
Selected Product Review
LIDODERM®: For the quarter ended September 30, 2008, net sales of
LIDODERM increased 11% to $194.1 million compared with $174.3 million in
the same period a year ago. Prescription volume for LIDODERM increased 7%
in the third quarter of 2008 versus the comparable 2007 period. For the
nine months ended September 30, 2008, net sales of LIDODERM increased 13%
to $559.7 million compared with $496.9 million in the same period a year
ago. Prescription volume for LIDODERM increased 8% in the nine months of
2008 versus the comparable 2007 period.
OPANA® ER and OPANA®: Combined net sales for the OPANA franchise
increased 73% to $41.5 million for the third quarter 2008 compared with
$24.0 million in the same period a year ago. Prescription volume for
OPANA ER and OPANA increased 80% in the third quarter 2008 versus the
comparable 2007 period. For the nine months ended September 30, 2008, net
sales for the OPANA franchise increased 64% to $128.2 million compared with
$78.3 million in the same period a year ago. The 2007 nine month results
include the recognition of $13.8 million in deferred revenue for commercial
shipments of OPANA ER and OPANA made to customers in 2006.
PERCOCET®: Net sales of PERCOCET were $31.4 million for the three months
ended September 30, 2008 compared with $31.6 million in the same period in
2007. Net sales of PERCOCET were $96.6 million for the nine months ended
September 30, 2008 compared with $91.2 million in the same period in 2007.
FROVA®: Net sales of FROVA were $14.3 million for the three months ended
September 30, 2008 compared with $13.5 million for the same period in 2007.
Prescription volume increased 11% for the first nine months of 2008 versus
the comparable 2007 period. For the nine months ended September 30, 2008,
net sales of FROVA were $41.2 million compared with $38.4 million in the
same period in 2007.
VOLTAREN® GEL: Net sales of VOLTAREN GEL were $11.3 million for the nine
months ended September 30, 2008.
Generic Products: For the third quarter of 2008, net sales from the
company's generic products were $22.4 million compared with $23.3 million
in the same period in 2007. For the nine months ended September 30, 2008,
net sales of the company's generic products were $68.2 million compared
with $68.4 million in the same period in 2007.
Share Repurchase Program: Under the company's authorized share repurchase
program approved in April 2008 by Endo's board of directors, the company
has repurchased 17.7 million shares.
2008 Financial Guidance
Endo Pharmaceuticals raises its adjusted full-year 2008 earnings guidance
range for fully diluted earnings per share from $2.15-$2.19 to $2.26-$2.30.
The company reiterates guidance for 2008 annual net sales to be between
$1.245 billion and $1.280 billion. The financial guidance for 2008
excludes the impact of any future business development transactions or
acquisitions, estimated milestone payments to partners, certain contract
termination costs, the expensing of stock-based compensation charges,
certain separation benefits, and any asset impairment charges.
Note to Investors
Endo will conduct a conference call with financial analysts to discuss this
news release today at 10:00 a.m. ET. Investors and other interested
parties may call 800-591-6930 (domestic) or 617-614-4908 (international)
and enter code 75851962. Please dial in 10 minutes prior to the scheduled
start time.
A replay of the call will be available from October 30 at 1:00 p.m. ET
until 12:00 a.m. ET on November 6 by dialing 888-286-8010 (domestic) or
617-801-6888 (international), passcode 83201262. A simultaneous webcast of
the call may be accessed by visiting www.endo.com. In addition, a replay
of the webcast will be available until 12:00 a.m. ET on November 6. 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 GAAP statements of
operations to our Adjusted statements of operations for each of the three
months ended September 30, 2008 and September 30, 2007 (Certain prior
period amounts have been reclassified to conform to the current period
presentation) (in thousands, except per share data):
Three Months Ended September 30, 2008
(Unaudited)
Upfront
and
Stock- mile- Impair-
based stone Contract ment of
compen- payments Separa- termina- long-
Actual sation to tion tion lived
(GAAP) expense partners benefits costs assets Adjusted
-------- ------- -------- -------- -------- -------- --------
Net sales $316,768 -- -- -- -- -- $316,768
Costs and
expenses:
Costs of
sales 71,027 -- -- -- -- -- 71,027
Selling,
general
and
administ-
rative 116,249 (4,388) -- (1,561) (540) (1,482) 108,278
Research &
develop-
ment 22,165 (367) -- -- (4,551) -- 17,247
-------- ------- -------- -------- -------- -------- --------
Operating
income 107,327 4,755 -- 1,561 5,091 1,482 120,216
Interest
expense 2,830 -- -- -- -- -- 2,830
Interest
and other
income (5,017) -- -- -- -- -- (5,017)
-------- ------- -------- -------- -------- -------- --------
Income
before
income
taxes 109,514 4,755 -- 1,561 5,091 1,482 122,403
Income
taxes 41,268 46,264
-------- --------
Net income $ 68,246 $ 76,139
======== ========
Diluted
earnings
per share $ 0.57 $ 0.64
Diluted
weighted
average
shares 119,954 119,794
Three Months Ended September 30, 2007
(Unaudited)
Upfront
and
Stock- mile- Impair-
based stone Contract ment of
compen- payments Separa- termina- long-
Actual sation to tion tion lived
(GAAP) expense partners benefits costs assets Adjusted
-------- ------- -------- -------- -------- -------- --------
Net sales $269,470 -- -- -- -- -- $269,470
Costs and
expenses:
Costs of
sales 51,009 -- -- -- -- -- 51,009
Selling,
general
and
adminis-
trative 109,833 (3,320) -- -- -- -- 106,513
Research
&
develop-
ment 28,290 (387) (439) -- -- -- 27,464
-------- ------- -------- -------- -------- -------- --------
Operating
income 80,338 3,707 439 -- -- -- 84,484
Interest
expense 43 -- -- -- -- -- 43
Interest
and
other
income (9,776) -- -- -- -- -- (9,776)
-------- ------- -------- -------- -------- -------- --------
Income
before
income
taxes 90,071 3,707 439 -- -- -- 94,217
Income
taxes 30,924 32,582
-------- --------
Net income $ 59,147 $ 61,635
======== ========
Diluted
earnings
per share $ 0.44 $ 0.46
Diluted
weighted
average
shares 134,611 134,621
The following tables provide a reconciliation of our GAAP statements of
operations to our Adjusted statements of operations for each of the nine
months ended September 30, 2008 and September 30, 2007 (Certain prior
period amounts have been reclassified to conform to the current period
presentation) (in thousands, except per share data):
Nine Months Ended September 30, 2008
(Unaudited)
Upfront
and
Stock- mile- Impair-
based stone Contract ment of
compen- payments Separa- termina- long-
Actual sation to tion tion lived
(GAAP) expense partners benefits costs assets Adjusted
-------- ------- -------- -------- -------- -------- --------
Net sales $913,200 -- -- -- -- -- $913,200
Costs and
expenses:
Costs of
sales 190,554 -- -- -- -- -- 190,554
Selling,
general
and
administ-
rative 357,775 (12,642) -- (10,459) (540) (1,482) 332,652
Research &
develop-
ment 82,244 (1,071) (2,000) (825) (4,551) (3,115) 70,682
Impairment
of other
intangib-
le assets 8,083 -- -- -- -- (8,083) --
-------- ------- -------- -------- -------- -------- --------
Operating
income 274,544 13,713 2,000 11,284 5,091 12,680 319,312
Interest
expense 5,549 -- -- -- -- -- 5,549
Interest
and other
income (21,295) -- -- -- -- -- (21,295)
-------- ------- -------- -------- -------- -------- --------
Income
before
income
taxes 290,290 13,713 2,000 11,284 5,091 12,680 335,058
Income
taxes 103,491 120,571
-------- --------
Net income $186,799 $214,487
======== ========
Diluted
earnings
per share $ 1.48 $ 1.70
Diluted
weighted
average
shares 126,012 125,886
Nine Months Ended September 30, 2007
(Unaudited)
Upfront
and
Stock- mile- Impair-
based stone Contract ment of
compen- payments Separa- termina- long-
Actual sation to tion tion lived
(GAAP) expense partners benefits costs assets Adjusted
-------- ------- -------- -------- -------- -------- --------
Net sales $781,026 -- -- -- -- -- 781,026
Costs and
expenses:
Costs of
sales 155,324 -- -- -- -- -- 155,324
Selling,
general
and
adminis-
trative 292,419 (9,694) -- -- -- -- 282,725
Research
&
develop-
ment 83,663 (1,246) (8,070) -- -- -- 74,347
Impair-
ment of
other
intangi-
ble
assets -- -- -- -- -- -- --
-------- ------- -------- -------- -------- -------- --------
Operating
income 249,620 10,940 8,070 -- -- -- 268,630
Interest
expense 90 -- -- -- -- -- 90
Interest
and
other
income (25,105) -- -- -- -- -- (25,105)
-------- ------- -------- -------- -------- -------- --------
Income
before
income
taxes 274,635 10,940 8,070 -- -- -- 293,645
Income
taxes 97,793 105,154
-------- --------
Net income $176,842 $188,491
======== ========
Diluted
earnings
per share $ 1.31 $ 1.40
Diluted
weighted
average
shares 134,491 134,566
For an explanation of Endo's reasons for using non-GAAP measures, see
Endo's Current Report on Form 8-K filed today with the Securities and
Exchange Commission.
About Endo
Endo Pharmaceuticals is a specialty pharmaceutical company engaged in the
research, development, sale and marketing of branded and generic
prescription pharmaceuticals used primarily to treat and manage pain. More
information, including this and past press releases of Endo Pharmaceuticals
Holdings Inc., is available at www.endo.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 regarding, among
other things, the company's financial position, results of operations,
market position, product development and business strategy, as well as
estimates of future net sales, future expenses, future net income and
future earnings per share. Statements including words such as "believes,"
"expects," "anticipates," "intends," "estimates," "plan," "will," "may,"
"intend," "guidance" 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 could
affect our future financial results and could cause our actual results to
differ materially from those expressed in forward-looking statements
contained in this press release. These factors include, but are not limited
to: the inherent uncertainty of the timing and success of, and expense
associated with, research, development, regulatory approval and
commercialization of our products and pipeline products; competition in our
industry, including for branded and generic products, and in connection
with our acquisition of rights to assets, including intellectual property;
government regulation of the pharmaceutical industry; our dependence on a
small number of products and on outside manufacturers for the manufacture
of our products; our dependence on third parties to supply raw materials
and to provide services for certain core aspects of our business; new
regulatory action or lawsuits relating to our use of controlled substances
in many of our core products; our exposure to product liability claims and
product recalls and the possibility that we may not be able to adequately
insure ourselves; our ability to protect our proprietary technology; our
ability to successfully implement our in-licensing and acquisition
strategy; the availability of third-party reimbursement for our products;
the outcome of any pending or future litigation or claims by the
government; our dependence on sales to a limited number of large pharmacy
chains and wholesale drug distributors for a large portion of our total net
sales; a determination by a regulatory agency that we are engaging in
inappropriate sales or marketing activities, including promoting the
"off-label" use of our products; the loss of branded product exclusivity
periods and related intellectual property; and exposure to securities that
are subject to market risk including auction-rate securities the market for
which is currently illiquid; and other risks and uncertainties, including
those detailed from time to time in our periodic reports filed with the
Securities and Exchange Commission, including our current reports on Form
8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K,
particularly the discussion under the caption "Item 1A, RISK FACTORS" in
our annual report on Form 10-K/A for the year ended December 31, 2007,
which was filed with the Securities and Exchange Commission on April 29,
2008. The forward-looking statements in this press release and on the
related conference call are qualified by these risk factors. These are
factors that, individually or in the aggregate, we think 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.
The following tables present Endo's unaudited net sales for the three
months ended September 30, 2008 and September 30, 2007:
Endo Pharmaceuticals Holdings Inc.
Net Sales (unaudited)
(in thousands)
Three Months Ended
September 30,
2008 2007
--------- ---------
LIDODERM® $ 194,138 $ 174,326
OPANA® ER AND OPANA® 41,496 23,998
PERCOCET® 31,371 31,644
FROVA® 14,306 13,465
VOLTAREN® GEL 10,299 -
Other Brands 2,748 2,707
--------- ---------
Total Brands $ 294,358 $ 246,140
Total Generics $ 22,410 $ 23,330
--------- ---------
Total Net Sales $ 316,768 $ 269,470
========= =========
The following tables present Endo's unaudited net sales for the nine months
ended September 30, 2008 and September 30, 2007:
Endo Pharmaceuticals Holdings Inc.
Net Sales (unaudited)
(in thousands)
Nine Months Ended
September 30,
2008 2007
--------- ---------
LIDODERM® $ 559,712 $ 496,926
OPANA® ER AND OPANA® 128,171 78,274
PERCOCET® 96,553 91,183
FROVA® 41,247 38,365
VOLTAREN® GEL 11,296 -
Other Brands 8,031 7,837
--------- ---------
Total Brands $ 845,010 $ 712,585
Total Generics $ 68,190 $ 68,441
--------- ---------
Total Net Sales $ 913,200 $ 781,026
========= =========
The following table presents condensed consolidated cash flow data for the
nine months ended September 30, 2008 and September 30, 2007:
Endo Pharmaceuticals Holdings Inc.
Condensed Consolidated Cash Flow Data (unaudited)
(in thousands)
Nine Months Ended
September 30,
2008 2007
--------- ---------
Net cash provided by operating activities $ 228,109 $ 287,431
Net cash provided by (used in) investing activities 153,486 (630,624)
Net cash used in financing activities (98,961) (10,008)
--------- ---------
Net increase (decrease) in cash and cash equivalents $ 282,634 $(353,201)
--------- ---------
Cash and cash equivalents, beginning of period $ 350,325 $ 628,085
Cash and cash equivalents, end of period $ 632,959 $ 274,884
========= =========
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CONTACT:
Blaine Davis
(610) 459-7158
