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Endo Int'l. 8-K Shows Reductions To Previously-Issued Financial Metrics Including Adj. EBITDA, Adj. EPS

In response to views expressed by members of the staff of the U.S. Securities and Exchange Commission (the “Staff”) in comment letters issued to, and conversations with, pharmaceutical industry participants,

Benzinga · 04/29/2022 07:08

In response to views expressed by members of the staff of the U.S. Securities and Exchange Commission (the “Staff”) in comment letters issued to, and conversations with, pharmaceutical industry participants, Endo International plc (the “Company”) will, beginning with its first-quarter 2022 financial reporting, no longer exclude Acquired in-process research and development charges (previously labeled as “Upfront and milestone payments to partners”) from the non-GAAP performance measures utilized in connection with its quarterly financial reporting. The impacts of this change are not expected to be material for the three months ended March 31, 2022; however, results for this period have not yet been finalized and remain subject to the Company’s financial statement closing procedures. There can be no assurance that the Company’s final results for this period will not be materially affected by these changes. Prior comparative periods will be recast to conform to the new presentation when presented.

The following table summarizes the impact this change will have on select previously-reported non-GAAP financial measures compared to amounts previously reported (in thousands, except per share amounts):

                                                                                               
  Reductions to Previously-Reported Amounts for the:
  Quarter-to-Date Periods Ended:   Year-to-Date Periods Ended:
  March 31, 2021   June 30, 2021   September 30, 2021   December 31, 2021   March 31, 2021   June 30, 2021   September 30, 2021   December 31, 2021
Adjusted EBITDA $ —      $ (5,000)     $ —      $ (20,120)     $ —      $ (5,000)     $ (5,000)     $ (25,120)  
Adjusted Income from Continuing Operations $ —      $ (5,000)     $ —      $ (20,120)     $ —      $ (5,000)     $ (5,000)     $ (25,120)  
Adjusted Diluted Net Income per Share from Continuing Operations $ —      $ (0.02)     $ —      $ (0.08)     $ —      $ (0.02)     $ (0.02)     $ (0.11)  

In addition, beginning with the first quarter 2022, these charges will be presented in a new financial statement line item labeled Acquired in-process research and development. Similar charges incurred in prior periods will be reclassified to this new line item for comparability.

Finally, beginning with the financial guidance provided in connection with its first-quarter 2022 financial reporting, the Company will begin to include in its forward-looking financial guidance the impact of Acquired in-process research and development charges already incurred in the relevant period, or expected to be incurred for transactions signed through a certain date, but will not include any impact for costs which may be incurred in connection with potential business development activities entered after such date.

The information in this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information contained in this Item 2.02 shall not be incorporated into any registration statement or other document filed by the Registrant with the U.S. Securities and Exchange Commission under the Securities Act of 1933, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.