Hot Stock under Review: Endo International plc (NASDAQ: ENDP)

On Tuesday, Shares of Endo International plc (NASDAQ: ENDP) rose 3.31% to $11.22. The stock recorded $10.59 as its minimum price and hit the max level of $11.39, during its most recent trading session. It traded total volume of 8M shares higher than the average volume of 6.45M shares.

Endo International plc (ENDP) recently stated first-quarter 2018 financial results.

CONSOLIDATED RESULTS:

As anticipated, total revenues reduced by 32 percent to $701.0M in first-quarter 2018 contrast to the same period in 2017. The decline was mainly because of the loss of marketing exclusivity in the first half of 2017 for the first-to-file U.S. Generic Pharmaceuticals products ezetimibe tablets, the generic version of ZETIA®, and quetiapine extended-release (ER) tablets, the generic version of SEROQUEL XR®, both of which launched in fourth-quarter 2016. Also contributing to the decline in total revenues were the annualization of the impact from 2017 competitive entries and product discontinuances in the U.S. Generic Pharmaceuticals segment, the divestitures of the Company’s South African and Mexican businesses, Litha and Somar, and the voluntary withdrawal of OPANA® ER.

GAAP net loss from continuing operations in first-quarter 2018 was $498.0M contrast to GAAP net loss from continuing operations of $165.0M during the same period in 2017. This increase was mainly because of a boost of $244.0M in pre-tax, non-cash asset impairment charges in first-quarter 2018. GAAP diluted net loss per share from continuing operations for first-quarter 2018 was $2.23, contrast to GAAP diluted net loss per share from continuing operations of $0.74 in first-quarter 2017.

Adjusted income from continuing operations in first-quarter 2018 was $151.0M contrast to $275.0M in first-quarter 2017. This decrease resulted mainly from lower revenues of ezetimibe tablets and quetiapine ER tablets, the divestitures of Litha and Somar, the voluntary withdrawal of OPANA® ER and a boost of $12.0M in net interest expense. Adjusted diluted EPS from continuing operations in first-quarter 2018 was $0.67 contrast to $1.23 in first-quarter 2017.

2018 FINANCIAL GUIDANCE

For the full twelve months ending December 31, 2018, at current exchange rates, Endo affirms its formerly offered guidance on revenue, adjusted diluted EPS from continuing operations and adjusted EBITDA from continuing operations. The Company estimates:

  • Total revenues to be between $2.60B and $2.80B;
  • Adjusted diluted EPS from continuing operations to be between $2.15 and $2.55; and
  • Adjusted EBITDA from continuing operations to be between $1.20B and $1.30B.

The Company’s 2018 non-GAAP financial guidance is based on the following assumptions:

  • Adjusted gross margin of about 67.0% to 68.0%;
  • Adjusted operating expenses as a percentage of revenues of about 25.5% to 26.5%;
  • Adjusted interest expense of about $530.0M to $540.0M;
  • Adjusted effective tax rate of about 11.0% to 12.0%; and
  • Adjusted diluted weighted average shares outstanding of about 226.0M.

BALANCE SHEET, LIQUIDITY AND OTHER UPDATES:

As of March 31, 2018, the Company had $980.0M in unrestricted cash; debt of $8.30B; net debt of about $7.30B and a net debt to adjusted EBITDA ratio of 5.1.

First-quarter 2018 cash offered by operating activities was $49.0M, contrast to $168.0M of net cash offered by operating activities in the comparable 2017 period. The 2017 period included the impact of cash receipts for ezetimibe tablets and quetiapine ER tablets, which did not reoccur during the 2018 period, and higher payments related to U.S. mesh product liability claims.

During first-quarter 2018, the Company recorded pre-tax, non-cash asset impairment charges of $448.0M, $391.0M of which related to goodwill and $54.0M of which related to other intangible assets.

ENDP has the market capitalization of $2.51B and its EPS growth ratio for the past five years was 1.10%. The return on assets ratio of the Company was -20.30% while its return on investment ratio stands at -9.10%. Price to sales ratio was 0.80.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.