PR Newswire | Aug 5, 2021 04:16PM EDT

Guidance

08/05 15:15 CDT

Endo Reports Second-Quarter 2021 Financial Results And Updates 2021 Financial Guidance DUBLIN, Aug. 5, 2021

DUBLIN, Aug. 5, 2021 /PRNewswire/ -- Endo International plc (NASDAQ: ENDP) today reported financial results for the second-quarter ended June 30, 2021.

"Our second-quarter 2021 results reflect strong sequential growth in our Branded Pharmaceuticals segment driven by XIAFLEX(r), and better than expected performance of our Sterile Injectables and Generic Pharmaceuticals segments," said Blaise Coleman, President and Chief Executive Officer at Endo. "Moving forward, we remain committed to further advancing our strategic priorities by delivering on our business transformation initiatives and investing in the on-going launch of QWO(r), the growth of XIAFLEX(r) and the progression of our product pipeline."

SECOND-QUARTER FINANCIAL PERFORMANCE

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 Change 2021 2020 Change

Total Revenues, $ 713,830 $ 687,588 4 % $1,431,749$1,507,993(5) %Net

Reported (Loss) Income $ (10,184)$ 17,610 NM $36,875 $175,191 (79)%from Continuing Operations

Reported Diluted Weighted 233,331 233,681 - % 237,043 233,348 2 %Average Shares

Reported Diluted Net (Loss) Income per$ (0.04) $ 0.08 NM $0.16 $0.75 (79)%Share from Continuing Operations

Reported Net (Loss)$ (15,500)$ 10,558 NM $26,024 $140,488 (81)%Income

Adjusted Income from $ 152,121 $ 151,700 - % $327,038 $372,100 (12)%Continuing Operations (2)

Adjusted Diluted Weighted 235,416 233,681 1 % 237,043 233,348 2 %Average Shares (1) (2)

Adjusted Diluted Net Income per Share $ 0.65 $ 0.65 - % $1.38 $1.59 (13)%from Continuing Operations (2)

Adjusted $ 342,700 $ 336,481 2 % $707,415 $757,607 (7) %EBITDA (2)

__________

Reported Diluted Net (Loss) Income per Share from Continuing Operations is computed based on weighted average shares outstanding and, if there is(1) income from continuing operations during the period, the dilutive impact of ordinary 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.

The information presented in the table above includes non-GAAP financial measures such as "Adjusted Income from Continuing Operations," "Adjusted Diluted Weighted Average Shares," "Adjusted Diluted Net Income per Share(2) from Continuing Operations" and "Adjusted EBITDA." Refer to the "Supplemental Financial Information" section below for reconciliations of certain non-GAAP financial measures to the most directly comparable GAAP financial measures.

CONSOLIDATED RESULTS

Total revenues were $714 million in second-quarter 2021, an increase of 4% compared to $688 million during the same period in 2020. This result was primarily attributable to increased revenues from the Specialty Products portfolio of our Branded Pharmaceuticals segment, partially offset by decreased revenues from our Generic Pharmaceuticals and Sterile Injectables segments.

Reported loss from continuing operations in second-quarter 2021 was $10 million compared to reported income from continuing operations of $18 million during the same period in 2020. This result was attributable to higher litigation-related costs which were partially offset by increased revenues and favorable product mix changes. Reported diluted net loss per share from continuing operations in second-quarter 2021 was $0.04 compared to reported diluted net income per share from continuing operations in second-quarter 2020 of $0.08.

Adjusted income from continuing operations in second-quarter 2021 was $152 million equal to second-quarter 2020. Adjusted diluted net income per share from continuing operations in second-quarter 2021 was $0.65 equal to second-quarter 2020.

BRANDED PHARMACEUTICALS SEGMENT

Second-quarter 2021 Branded Pharmaceuticals segment revenues were $228 million, an increase of 76% compared to $130 million during second-quarter 2020.

Specialty Products revenues increased to $167 million in second-quarter 2021 compared to $69 million in second-quarter 2020. XIAFLEX(r) revenues increased to $111 million compared to $34 million in second-quarter 2020 primarily driven by demand growth due to increased physician office activity and patient office visits coupled with commercial execution. Established Products revenues were essentially flat at $61 million in the second-quarter 2021 and the second-quarter 2020.

STERILE INJECTABLES SEGMENT

Second-quarter 2021 Sterile Injectables segment revenues were $295 million, a decrease of 8% compared to $319 million during second-quarter 2020. This was primarily driven by a decrease in VASOSTRICT(r) revenues due to anticipated lower volumes as COVID-19 related hospitalizations decreased.

GENERIC PHARMACEUTICALS SEGMENT

Second-quarter 2021 Generic Pharmaceuticals segment revenues were $167 million, a decrease of 23% compared to $216 million during second-quarter 2020. This decrease was primarily attributable to continued competitive pressures on certain products, partially offset by the January 2021 launch of lubiprostone capsules, the first authorized generic of Mallinckrodt's Amitiza(r).

INTERNATIONAL PHARMACEUTICALS SEGMENT

Second-quarter 2021 International Pharmaceuticals segment revenues increased 4% to $24 million compared to $23 million during second-quarter 2020.

2021 FINANCIAL GUIDANCE

Endo is updating its financial guidance for the full-year ending December 31, 2021 by narrowing the expected ranges regarding revenues, adjusted diluted net income per share from continuing operations and adjusted EBITDA. The guidance below contemplates a range of potential outcomes that reflect uncertainties in certain key assumptions including, among other things, uncertainties related to the COVID-19 pandemic. These statements are forward-looking, and actual results may differ materially from Endo's expectations, as further discussed below under the heading "Cautionary Note Regarding Forward-Looking Statements."

Full-Year 2021

Prior Current

Total Revenues, Net $2.65B - $2.79B$2.73B - $2.79B

Adjusted EBITDA $1.18B - $1.28B$1.23B - $1.28B

Adjusted Diluted Net Income per Share from Continuing Operations $1.95 - $2.30 $2.15 - $2.30

Assumptions:

Adjusted Gross Margin ~70.0% - 71.0% ~70.0% - 71.0%

Adjusted Operating Expenses as a Percentage of Total Revenues, Net~28.5% - 29.0% ~28.5%

Adjusted Interest Expense ~$560M ~$560M

Adjusted Effective Tax Rate ~11.0% - 12.0% ~11.0% - 12.0%

Adjusted Diluted Weighted Average Shares ~239M ~239M

BALANCE SHEET, LIQUIDITY AND OTHER UPDATES

As of June 30, 2021, the Company had approximately $1.5 billion in unrestricted cash; $8.3 billion of debt; and a net debt to adjusted EBITDA ratio of 5.0.

Second-quarter 2021 net cash provided by operating activities was $155 million compared to $304 million during the second-quarter 2020. This decrease was primarily due to a decrease in cash flow from the change in net working capital.

Additionally, the Company recently entered into definitive agreements to sell the Company's manufacturing site in Chestnut Ridge, New York, as well as an undisclosed number of U.S. product regulatory approvals and related product inventory to subsidiaries of Strides Pharma Science Limited for approximately $24 million in cash, as well as certain other non-cash considerations. The exit of this site was included in a series of business transformation initiatives that the Company announced in late 2020, including further optimizing of the Company's generic retail business cost structure. The sale is expected to close in the second-half of 2021.

CONFERENCE CALL INFORMATION

Endo will conduct a conference call with financial analysts to discuss this press release tomorrow, August 6, 2021, at 7:30 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 9749734. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from August 6, 2021 at 10:30 a.m. ET until 10:30 a.m. ET on August 16, 2021 by dialing U.S./Canada (855) 859-2056 International (404) 537-3406, and entering the passcode 9749734.

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.

FINANCIAL SCHEDULES

The following table presents Endo's unaudited Total revenues, net for the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

Three Months Ended June 30, PercentSix Months Ended June 30, PercentGrowth Growth 2021 2020 2021 2020

Branded Pharmaceuticals:

Specialty Products:

XIAFLEX(r) $111,487 $33,783 NM $206,757 $122,855 68 %

SUPPRELIN(r) LA 27,568 15,395 79 %55,596 35,115 58 %

Other Specialty 28,036 19,566 43 %48,068 45,071 7 %(1)

Total Specialty $167,091 $68,744 NM $310,421 $203,041 53 %Products

Established Products:

PERCOCET(r) $26,156 $27,578 (5) %$51,781 $55,281 (6) %

TESTOPEL(r) 9,439 617 NM 20,628 8,809 NM

Other Established 25,354 32,582 (22) %51,845 66,463 (22) %(2)

Total Established $60,949 $60,777 - %$124,254 $130,553 (5) %Products

Total Branded Pharmaceuticals $228,040 $129,521 76 %$434,675 $333,594 30 %(3)

Sterile Injectables:

VASOSTRICT(r) $197,121 $214,214 (8) %$421,067 $417,118 1 %

ADRENALIN(r) 29,977 33,161 (10) %59,414 89,673 (34) %

Other Sterile 67,502 71,839 (6) %122,864 148,813 (17) %Injectables (4)

Total Sterile $294,600 $319,214 (8) %$603,345 $655,604 (8) %Injectables (3)

Total Generic $167,272 $215,879 (23) %$348,145 $467,162 (25) %Pharmaceuticals

Total International $23,918 $22,974 4 %$45,584 $51,633 (12) %Pharmaceuticals

Total revenues, $713,830 $687,588 4 %$1,431,749$1,507,993(5) %net

__________

(1) Products included within Other Specialty include NASCOBAL^(r) Nasal Spray, AVEED^(r) and QWO^(r).

(2) Products included within Other Established include, but are not limited to, EDEX^(r) and LIDODERM^(r).

Individual products presented above represent the top two performing(3) products in each product category for either the three or six months ended June 30, 2021 and/or any product having revenues in excess of $25 million during any quarterly period in 2021 or 2020.

(4) Products included within Other Sterile Injectables include ertapenem for injection, APLISOL^(r) and others.

The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data):

Three Months Ended June 30,Six Months Ended June 30,

2021 2020 2021 2020

TOTAL REVENUES, NET $ 713,830 $ 687,588 $1,431,749$1,507,993

COSTS AND EXPENSES:

Cost of revenues 318,480 336,096 623,773 724,895

Selling, general and 177,619 173,258 364,793 340,026 administrative

Research and 34,669 30,495 64,408 62,110 development

Litigation-related and other 35,195 (8,572) 35,832 (25,748) contingencies, net

Asset impairment 4,929 - 8,238 97,785 charges

Acquisition-related and integration 97 6,045 (4,925) 18,507 items, net

Interest expense, net141,553 129,164 275,894 262,041

Loss on extinguishment of - - 13,753 - debt

Other expense 372 (4,150) 1,284 (18,124) (income), net

INCOME FROM CONTINUING OPERATIONS$ 916 $ 25,252 $48,699 $46,501 BEFORE INCOME TAX

INCOME TAX EXPENSE 11,100 7,642 11,824 (128,690) (BENEFIT)

(LOSS) INCOME FROM $ (10,184)$ 17,610 $36,875 $175,191 CONTINUING OPERATIONS

DISCONTINUED OPERATIONS, NET OF (5,316) (7,052) (10,851) (34,703) TAX

NET (LOSS) INCOME $ (15,500)$ 10,558 $26,024 $140,488

NET (LOSS) INCOME PER SHARE-BASIC:

Continuing operations$ (0.04) $ 0.08 $0.16 $0.77

Discontinued (0.03) (0.03) (0.05) (0.16) operations

Basic $ (0.07) $ 0.05 $0.11 $0.61

NET (LOSS) INCOME PER SHARE-DILUTED:

Continuing operations$ (0.04) $ 0.08 $0.16 $0.75

Discontinued (0.03) (0.03) (0.05) (0.15) operations

Diluted $ (0.07) $ 0.05 $0.11 $0.60

WEIGHTED AVERAGE SHARES:

Basic 233,331 229,716 231,941 228,457

Diluted 233,331 233,681 237,043 233,348

The following table presents unaudited Condensed Consolidated Balance Sheet data at June 30, 2021 and December 31, 2020 (in thousands):

June 30, 2021December 31, 2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 1,545,172$1,213,437

Restricted cash and cash equivalents 128,558 171,563

Accounts receivable 458,138 511,262

Inventories, net 338,456 352,260

Other current assets 99,005 164,736

Total current assets $ 2,569,329$2,413,258

TOTAL NON-CURRENT ASSETS 6,636,928 6,851,379

TOTAL ASSETS $ 9,206,257$9,264,637

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:

Accounts payable and accrued expenses, including $ 1,174,178$1,208,061legal settlement accruals

Other current liabilities 235,034 45,763

Total current liabilities $ 1,409,212$1,253,824

LONG-TERM DEBT, LESS CURRENT PORTION, NET 8,052,815 8,280,578

OTHER LIABILITIES 361,272 378,174

SHAREHOLDERS' DEFICIT (617,042) (647,939)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 9,206,257$9,264,637

The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

2021 2020

OPERATING ACTIVITIES:

Net income $26,024 $140,488

Adjustments to reconcile Net income to Net cash provided by operating activities:

Depreciation and amortization 237,703 264,198

Asset impairment charges 8,238 97,785

Other, including cash payments to claimants from 126,851 (135,583) Qualified Settlement Funds

Net cash provided by operating activities $398,816 $366,888

INVESTING ACTIVITIES:

Capital expenditures, excluding capitalized $(41,345) $(36,305) interest

Proceeds from sale of business and other assets, 1,343 6,017 net

Other (5,048) (1,125)

Net cash used in investing activities $(45,050) $(31,413)

FINANCING ACTIVITIES:

Payments on borrowings, net $(43,166) $(66,685)

Other (22,581) (9,046)

Net cash used in financing activities $(65,747) $(75,731)

Effect of foreign exchange rate 711 (915)

NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED $288,730 $258,829 CASH AND RESTRICTED CASH EQUIVALENTS

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND 1,385,000 1,720,388 RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND $1,673,730$1,979,217RESTRICTED CASH EQUIVALENTS, END OF PERIOD

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 the Company's 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) income (GAAP) to Adjusted EBITDA (non-GAAP) for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,

2021 2020 2021 2020

Net (loss) income (GAAP) $ (15,500) $10,558 $26,024 $140,488

Income tax expense (benefit) 11,100 7,642 11,824 (128,690)

Interest expense, net 141,553 129,164 275,894 262,041

Depreciation and amortization (14) 110,145 120,855 221,724 255,813

EBITDA (non-GAAP) $ 247,298 $268,219 $535,466 $529,652



Upfront and milestone-related payments (2) 5,125 444 5,681 2,194

Continuity and separation benefits and other cost reductions (3)15,083 9,444 38,803 32,664

Certain litigation-related and other contingencies, net (4) 35,195 (8,572) 35,832 (25,748)

Certain legal costs (5) 24,843 18,005 44,119 33,541

Asset impairment charges (6) 4,929 - 8,238 97,785

Acquisition-related and integration costs (7) (20) - 411 -

Fair value of contingent consideration (8) 117 6,045 (5,336) 18,507

Loss on extinguishment of debt (9) - - 13,753 -

Share-based compensation (14) 4,444 9,222 14,437 21,677

Other expense (income), net (15) 372 (4,150) 1,284 (18,124)

Other (10) (2) 30,772 3,876 30,756

Discontinued operations, net of tax (12) 5,316 7,052 10,851 34,703

Adjusted EBITDA (non-GAAP) $ 342,700 $336,481 $707,415 $757,607

Reconciliation of Adjusted Income from Continuing Operations (non-GAAP)

The following table provides a reconciliation of the Company's (Loss) income from continuing operations (GAAP) to Adjusted income from continuing operations (non-GAAP) for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,

2021 2020 2021 2020

(Loss) income from continuing operations (GAAP) $ (10,184) $17,610 $36,875 $175,191

Non-GAAP adjustments:

Amortization of intangible assets (1) 94,070 104,498 189,200 221,735

Upfront and milestone-related payments (2) 5,125 444 5,681 2,194

Continuity and separation benefits and other cost reductions (3)15,083 9,444 38,803 32,664

Certain litigation-related and other contingencies, net (4) 35,195 (8,572) 35,832 (25,748)

Certain legal costs (5) 24,843 18,005 44,119 33,541

Asset impairment charges (6) 4,929 - 8,238 97,785

Acquisition-related and integration costs (7) (20) - 411 -

Fair value of contingent consideration (8) 117 6,045 (5,336) 18,507

Loss on extinguishment of debt (9) - - 13,753 -

Other (10) 1,355 29,755 6,381 15,335

Tax adjustments (11) (18,392) (25,529) (46,919) (199,104)

Adjusted income from continuing operations (non-GAAP) $ 152,121 $151,700 $327,038 $372,100

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 six months ended June 30, 2021 and 2020 (in thousands, except per share data):

Three Months Ended June 30, 2021

Income from Diluted net Operating Other non- continuing (Loss) (loss) income Total Cost of Gross Gross Total Operating income Operating operating operations Income Effective income Discontinued Net (loss) per share revenues, revenues margin margin operating expense to from margin % expense, before tax tax rate from operations, income from net % expenses revenue % continuing net income expense continuing net of tax continuing operations tax operations operations (13)

Reported (GAAP) $ 713,830 $ 318,480 $ 395,350 55.4 % $ 252,509 35.4 % $ 142,841 20.0 % $ 141,925 $ 916 $ 11,100 1,211.8 % $ (10,184) $ (5,316) $ (15,500) $ (0.04)

Items impacting comparability:

Amortization of intangible assets (1) - (94,070) 94,070 - 94,070 - 94,070 - 94,070 - 94,070

Upfront and milestone-related payments (2) - (125) 125 (5,000) 5,125 - 5,125 - 5,125 - 5,125

Continuity and separation benefits and other cost reductions (3) - (4,970) 4,970 (10,113) 15,083 - 15,083 - 15,083 - 15,083

Certain litigation-related and other contingencies, net (4) - - - (35,195) 35,195 - 35,195 - 35,195 - 35,195

Certain legal costs (5) - - - (24,843) 24,843 - 24,843 - 24,843 - 24,843

Asset impairment charges (6) - - - (4,929) 4,929 - 4,929 - 4,929 - 4,929

Acquisition-related and integration costs (7) - - - 20 (20) - (20) - (20) - (20)

Fair value of contingent consideration (8) - - - (117) 117 - 117 - 117 - 117

Other (10) - - - - - (1,355) 1,355 - 1,355 - 1,355

Tax adjustments (11) - - - - - - - 18,392 (18,392) - (18,392)

Exclude discontinued operations, net of tax (12) - - - - - - - - - 5,316 5,316

After considering items (non-GAAP) $ 713,830 $ 219,315 $ 494,515 69.3 % $ 172,332 24.1 % $ 322,183 45.1 % $ 140,570 $ 181,613 $ 29,492 16.2 % $ 152,121 $ - $ 152,121 $ 0.65

Three Months Ended June 30, 2020

Income from Diluted net Total Gross Total Operating Operating Other non- continuing Income Income Discontinued income per revenues, Cost of Gross margin operating expense to income from Operating operating operations tax Effective from operations, Net share from net revenues margin % expenses revenue % continuing margin % expense, before expense tax rate continuing net of tax income continuing operations net income tax operations operations (13)

Reported (GAAP) $ 687,588 $ 336,096 $ 351,492 51.1 % $ 201,226 29.3 % $ 150,266 21.9 % $ 125,014 $ 25,252 $ 7,642 30.3 % $ 17,610 $ (7,052) $ 10,558 $ 0.08

Items impacting comparability:

Amortization of intangible assets (1) - (104,498) 104,498 - 104,498 - 104,498 - 104,498 - 104,498

Upfront and milestone-related payments (2) - (125) 125 (319) 444 - 444 - 444 - 444

Continuity and separation benefits and other cost reductions (3) - (904) 904 (8,540) 9,444 - 9,444 - 9,444 - 9,444

Certain litigation-related and other contingencies, net (4) - - - 8,572 (8,572) - (8,572) - (8,572) - (8,572)

Certain legal costs (5) - - - (18,005) 18,005 - 18,005 - 18,005 - 18,005

Fair value of contingent consideration (8) - - - (6,045) 6,045 - 6,045 - 6,045 - 6,045

Other (10) - - - (30,749) 30,749 994 29,755 - 29,755 - 29,755

Tax adjustments (11) - - - - - - - 25,529 (25,529) - (25,529)

Exclude discontinued operations, net of tax (12) - - - - - - - - - 7,052 7,052

After considering items (non-GAAP) $ 687,588 $ 230,569 $ 457,019 66.5 % $ 146,140 21.3 % $ 310,879 45.2 % $ 126,008 $ 184,871 $ 33,171 17.9 % $ 151,700 $ - $ 151,700 $ 0.65

Six Months Ended June 30, 2021

Operating Income from Diluted net Total Gross Total Operating income Other non- continuing Income Income Discontinued income per revenues, Cost of Gross margin operating expense to from Operating operating operations tax Effective from operations, Net share from net revenues margin % expenses revenue % continuing margin % expense, before expense tax rate continuing net of tax income continuing operations net income tax operations operations (13)

Reported (GAAP) $1,431,749 $ 623,773 $ 807,976 56.4 % $ 468,346 32.7 % $ 339,630 23.7 % $ 290,931 $ 48,699 $ 11,824 24.3 % $ 36,875 $ (10,851) $ 26,024 $ 0.16

Items impacting comparability:

Amortization of intangible assets (1) - (189,200) 189,200 - 189,200 - 189,200 - 189,200 - 189,200

Upfront and milestone-related payments (2) - (651) 651 (5,030) 5,681 - 5,681 - 5,681 - 5,681

Continuity and separation benefits and other cost reductions (3) - (20,266) 20,266 (18,537) 38,803 - 38,803 - 38,803 - 38,803

Certain litigation-related and other contingencies, net (4) - - - (35,832) 35,832 - 35,832 - 35,832 - 35,832

Certain legal costs (5) - - - (44,119) 44,119 - 44,119 - 44,119 - 44,119

Asset impairment charges (6) - - - (8,238) 8,238 - 8,238 - 8,238 - 8,238

Acquisition-related and integration costs (7) - - - (411) 411 - 411 - 411 - 411

Fair value of contingent consideration (8) - - - 5,336 (5,336) - (5,336) - (5,336) - (5,336)

Loss on extinguishment of debt (9) - - - - - (13,753) 13,753 - 13,753 - 13,753

Other (10) - - - (3,879) 3,879 (2,502) 6,381 - 6,381 - 6,381

Tax adjustments (11) - - - - - - - 46,919 (46,919) - (46,919)

Exclude discontinued operations, net of tax (12) - - - - - - - - - 10,851 10,851

After considering items (non-GAAP) $1,431,749 $ 413,656 $1,018,093 71.1 % $ 357,636 25.0 % $ 660,457 46.1 % $ 274,676 $ 385,781 $ 58,743 15.2 % $ 327,038 $ - $ 327,038 $ 1.38

Six Months Ended June 30, 2020

Operating Income from Diluted net Total Gross Total Operating income Other non- continuing Income Income Discontinued income per revenues, Cost of Gross margin operating expense to from Operating operating operations tax Effective from operations, Net share from net revenues margin % expenses revenue % continuing margin % expense, before (benefit) tax rate continuing net of tax income continuing operations net income tax expense operations operations (13)

Reported (GAAP) $1,507,993 $ 724,895 $ 783,098 51.9 % $ 492,680 32.7 % $ 290,418 19.3 % $ 243,917 $ 46,501 $(128,690) (276.7)% $ 175,191 $ (34,703) $ 140,488 $ 0.75

Items impacting comparability:

Amortization of intangible assets (1) - (221,735) 221,735 - 221,735 - 221,735 - 221,735 - 221,735

Upfront and milestone-related payments (2) - (667) 667 (1,527) 2,194 - 2,194 - 2,194 - 2,194

Continuity and separation benefits and other cost reductions (3) - (7,142) 7,142 (25,522) 32,664 - 32,664 - 32,664 - 32,664

Certain litigation-related and other contingencies, net (4) - - - 25,748 (25,748) - (25,748) - (25,748) - (25,748)

Certain legal costs (5) - - - (33,541) 33,541 - 33,541 - 33,541 - 33,541

Asset impairment charges (6) - - - (97,785) 97,785 - 97,785 - 97,785 - 97,785

Fair value of contingent consideration (8) - - - (18,507) 18,507 - 18,507 - 18,507 - 18,507

Other (10) - - - (30,749) 30,749 15,414 15,335 - 15,335 - 15,335

Tax adjustments (11) - - - - - - - 199,104 (199,104) - (199,104)

Exclude discontinued operations, net of tax (12) - - - - - - - - - 34,703 34,703

After considering items (non-GAAP) $1,507,993 $ 495,351 $1,012,642 67.2 % $ 310,797 20.6 % $ 701,845 46.5 % $ 259,331 $ 442,514 $ 70,414 15.9 % $ 372,100 $ - $ 372,100 $ 1.59

Notes to the Reconciliations of GAAP and Non-GAAP Financial Measures

Notes to certain line items included in the reconciliations of the GAAP financial measures to the non-GAAP financial measures for the three and six months ended June 30, 2021 and 2020 are as follows:

(1) To exclude amortization expense related to intangible assets.

(2) Adjustments for upfront and milestone-related payments to partners included the following (in thousands):

Three Months Ended June 30,

2021 2020

Cost of revenuesOperatingCost of revenuesOperating expenses expenses

Sales-based $ 125 $- $ 125 $-

Development-based- 5,000 - 319

Total $ 125 $5,000 $ 125 $319



Six Months Ended June 30,

2021 2020

Cost of revenuesOperatingCost of revenuesOperating expenses expenses

Sales-based $ 651 $- $ 667 $-

Development-based- 5,030 - 1,527

Total $ 651 $5,030 $ 667 $1,527

(3) Adjustments for continuity and separation benefits and other cost reductions included the following (in thousands):

Three Months Ended June 30,

2021 2020

Cost of revenuesOperatingCost of revenuesOperating expenses expenses

Continuity and $(2,913) $4,485 $515 $3,606 separation benefits

Accelerated 7,140 1,932 1,347 408 depreciation charges

Other 743 3,696 (958) 4,526

Total $4,970 $10,113$904 $8,540



Six Months Ended June 30,

2021 2020

Cost of revenuesOperatingCost of revenuesOperating expenses expenses

Continuity and $2,279 $7,837 $1,142 $16,775separation benefits

Accelerated 12,194 3,785 6,026 2,359 depreciation charges

Other 5,793 6,915 (26) 6,388

Total $20,266 $18,537$7,142 $25,522

Included within the Continuity and separation benefits line are costsassociated with certain continuity and transitional compensation arrangementsfor certain senior management of the Company. Additionally, amounts includeadjustments related to previously announced restructurings and other strategicinitiatives to further optimize Endo's operations.

To exclude adjustments to accruals for litigation-related settlement(4) charges and certain settlement proceeds related to suits filed by subsidiaries.

(5) To exclude opioid-related legal expenses.

(6) Adjustments for asset impairment charges included the following (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 20202021 2020

Goodwill impairment $- $-$ - $ 32,786 charges

Other intangible asset4,929 - 7,811 63,751 impairment charges

Property, plant and equipment impairment - - 427 1,248 charges

Total $4,929 $-$ 8,238$ 97,785

(7) To exclude integration costs.

To exclude the impact of changes in the fair value of contingent consideration liabilities resulting from changes to estimates regarding(8) the timing and amount of the future revenues of the underlying products and changes in other assumptions impacting the probability of incurring, and extent to which the Company could incur, related contingent obligations.

(9) To exclude the loss on the extinguishment of debt associated with the Company's March 2021 refinancing transactions.

The Other rows included in each of the above reconciliations of GAAP(10) financial measures to non-GAAP financial measures (except for the reconciliations of Net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP)) include the following (in thousands):

Three Months Ended June 30,

2021 2020

OperatingOther non-OperatingOther non- expenses operating expenses operating expenses expenses

Foreign currency impact related to the re-measurement of $ - $1,355 $- $3,005 intercompany debt instruments

(Gain) loss on sale of business- - - (3,999) and other assets

Debt modification costs - - 30,749 -

Total $ - $1,355 $30,749$(994)



Six Months Ended June 30,

2021 2020

OperatingOther non-OperatingOther non- expenses operating expenses operating expenses expenses

Foreign currency impact related to the re-measurement of $ - $2,502 $- $(4,089) intercompany debt instruments

Gain on sale of business and - - - (11,325) other assets

Debt modification costs 3,879 - 30,749 -

Total $ 3,879$2,502 $30,749$(15,414)

The Other row included in the reconciliations of Net (loss) income (GAAP) toAdjusted EBITDA (non-GAAP) primarily relates to the items enumerated in theforegoing "Operating expenses" columns.

Adjusted income taxes are calculated by tax effecting adjusted pre-tax income and permanent book-tax differences at the applicable effective tax(11) rate that will be determined by reference to statutory tax rates in the relevant jurisdictions in which the Company operates. Adjusted income taxes include current and deferred income tax expense commensurate with the non-GAAP measure of profitability.

(12) To exclude the results of the businesses reported as discontinued operations, net of tax.

Calculated as income or loss from continuing operations divided by the(13) applicable weighted average share number. The applicable weighted average share numbers are as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

GAAP 233,331 233,681 237,043 233,348

Non-GAAP Adjusted235,416 233,681 237,043 233,348

Depreciation and amortization and Share-based compensation per the(14) Adjusted EBITDA reconciliations do not include amounts reflected in other lines of the reconciliations, including Continuity and separation benefits and other cost reductions.

(15) To exclude Other expense (income), net per the Condensed Consolidated Statements of Operations.

Reconciliation of Net Debt Leverage Ratio (non-GAAP)

The following table provides a reconciliation of the Company's Net income (GAAP) to Adjusted EBITDA (non-GAAP) for the twelve months ended June 30, 2021 (in thousands) and the calculation of the Company's Net Debt Leverage Ratio (non-GAAP):

Twelve Months Ended June 30, 2021

Net income (GAAP) $69,480

Income tax benefit (133,468)

Interest expense, net 546,792

Depreciation and amortization (14) 462,260

EBITDA (non-GAAP) $945,064



Upfront and milestone-related payments $38,562

Continuity and separation benefits and other cost reductions132,421

Certain litigation-related and other contingencies, net 42,531

Certain legal costs 78,397

Asset impairment charges 30,797

Acquisition-related and integration costs 607

Fair value of contingent consideration (7,490)

Loss on extinguishment of debt 13,753

Share-based compensation (14) 28,927

Other income, net (1,702)

Other 4,215

Discontinued operations, net of tax 39,668

Adjusted EBITDA (non-GAAP) $1,345,750



Calculation of Net Debt:

Debt $8,275,957

Cash (excluding Restricted Cash) 1,545,172

Net Debt (non-GAAP) $6,730,785



Calculation of Net Debt Leverage:

Net Debt Leverage Ratio (non-GAAP) 5.0

Non-GAAP Financial Measures

The Company utilizes certain financial measures that are not prescribed by or prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP financial measures are not, and should not be viewed as, substitutes for GAAP net income and its components and diluted net income per share amounts. Despite the importance of these measures to management in goal setting and performance measurement, the company stresses that these are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, non-GAAP adjusted EBITDA and non-GAAP adjusted net income from continuing operations and its components (unlike GAAP net income from continuing operations and its components) may not be comparable to the calculation of similar measures of other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses performance.

Investors are encouraged to review the reconciliations of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measures. However, the Company does not provide reconciliations of projected non-GAAP financial measures to GAAP financial measures, nor does it provide comparable projected GAAP financial measures for such projected non-GAAP financial measures. The Company is unable to provide such reconciliations without unreasonable efforts due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for asset impairments, contingent consideration adjustments, legal settlements, gain / loss on extinguishment of debt, adjustments to inventory and other charges reflected in the reconciliation of historic numbers, the amounts of which could be significant.

See Endo's Current Report on Form 8-K furnished today to the U.S. Securities and Exchange Commission for an explanation of Endo's non-GAAP financial measures.

About Endo International plc

Endo (NASDAQ: ENDP) is a specialty pharmaceutical company committed to helping everyone we serve live their best life through the delivery of quality, life-enhancing therapies. Our decades of proven success come from a global team of passionate employees collaborating to bring the best treatments forward. Together, we boldly transform insights into treatments benefiting those who need them, when they need them. Learn more at www.endo.com or connect with us on LinkedIn.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, the statements by Mr. Coleman, as well as other statements regarding product development, product launches, product investments, product pipeline, product demand, market potential, advancement of strategic priorities, transformation initiatives, corporate strategy and optimization efforts, together with Endo's net income per share from continuing operations amounts, product net sales, revenue forecasts and other financial guidance for full-year 2021 or any other future period, the impact of and response to the COVID-19 pandemic and any other statements that refer to Endo's expected, estimated or anticipated future results. 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 forecasts are inherently estimates that cannot be made with precision, Endo's performance at times differs materially from its estimates and targets, and Endo often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, Endo will not report or comment on its progress during a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Endo.

All forward-looking statements in this press release reflect Endo's current analysis of existing trends and information and represent Endo's judgment only as of the date of this press release. Actual results may differ materially and adversely from current expectations based on a number of factors affecting Endo's businesses, including, among other things, the following: changing competitive, market and regulatory conditions; changes in legislation and regulatory developments; Endo's ability to obtain and maintain adequate protection for its intellectual property rights; the timing and uncertainty of the results of both the research and development and regulatory processes, including regulatory decisions, product recalls, withdrawals and other unusual items; domestic and foreign health care and cost containment reforms, including government pricing, tax and reimbursement policies; technological advances and patents obtained by competitors; the performance, including the approval, introduction, and consumer and physician acceptance of new products and the continuing acceptance of currently marketed products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of any strategic and/or optimization initiatives; the timing or results of any pending or future litigation, investigations or claims or actual or contingent liabilities, settlement discussions, negotiations or other adverse proceedings, including pending and future opioid-related matters, pending tax matters with the IRS and proceedings that involve or may involve key products such as VASOSTRICT(r); the ability to satisfy judgments or settlements or pursue appeals including bonding requirements; the ability to maintain compliance with debt obligations; unfavorable publicity regarding the misuse of opioids; the uncertainty associated with the identification of and successful consummation and execution of external corporate development initiatives and strategic partnering transactions; Endo's ability to advance its strategic priorities and business transformation initiatives, develop its product pipeline and successfully launch QWO(r) and other products; and Endo's ability to obtain and successfully manufacture, maintain and distribute a sufficient supply of products to meet market demand in a timely manner. In addition, U.S. and international economic conditions, including higher unemployment, political instability, financial hardship, consumer confidence and debt levels, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions, fluctuations or devaluations in the value of sovereign government debt, the impact of and response to the ongoing COVID-19 pandemic and the impact of continued economic volatility, can materially affect Endo's results. Therefore, the reader is cautioned not to rely on these forward-looking statements. Endo expressly disclaims any intent or obligation to update these forward-looking statements except as required to do so by law.

Additional information concerning the above-referenced risk factors and other risk factors can be found in press releases issued by Endo, as well as Endo's public periodic filings with the U.S. Securities and Exchange Commission and with securities regulators in Canada, including the discussion under the heading "Risk Factors" in Endo's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or other filings with the U.S. Securities and Exchange Commission. Copies of Endo's press releases and additional information about Endo are available at www.endo.com or you can contact the Endo Investor Relations Department by calling 845-364-4833.

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SOURCE Endo International plc