Endo Health Solutions ($ENDP) ended 2013 very much a company in transition. The Pennsylvania device and pharmaceutical operation experienced a fourth-quarter sales drop and sizable net losses, but those results stemmed, in part, from the sale of one division and costs related to an M&A deal. Endo's chief scientific officer also announced he would be moving on--a key position as reorganization continues.
The company said it generated $585 million in revenue during its 2013 fourth quarter, down sharply from $750 million in the 2012 fourth quarter. Some of that drop came from the company's move to pare down its HealthTronics' products. Last summer, Endo sold off its HealthTronics radiation therapy and pathology lab divisions to Metamark Genetics in Massachusetts for $25 million. Last month, Endo disclosed it will sell its HealthTronics urology device business to Altaris Capital Partners for up to $130 million. CEO Rajiv De Silva has also slashed staffing levels and spending and focused on reorganizing through much of 2013.
Endo said it booked a $776 million net loss during the quarter, versus a $716 million net loss over the same period a year ago. Reported loss per diluted share hit $6.74 during the 2013 fourth quarter, versus a $6.35 per share loss in the 2012 fourth quarter. That's largely from one-time charges associated with Endo's acquisition of American Medical Systems in 2011, a company whose vaginal implant legal problems have begun to dog Endo. Extra costs include a $316 million pretax charge at the end of 2013 designed to help bolster Endo's reserves to support lawsuits alleging its vaginal mesh devices caused pain and injury. Endo has a $520 million stash overall devoted to the legal fallout and said it may even have to grow that pile higher depending on how legal issues continue for the AMS unit.
AMS sales hit $132 million during the fourth quarter, a tiny drop over last year due to fewer women's health procedures. But men's health sales for the division soared, thanks to a demand growth for its male continence products, Endo said.
Endo expects overall revenue for 2014 to hit between $2.50 billion and $2.62 billion, flat or lower than the $2.6 billion in revenue generated through 2013. Reported diluted earnings per share will hit between $1.36 and $1.81, Endo said.
In a related matter, the company said that Ivan Gergel, its executive vice president for research and development and Endo's CSO, will leave as of March 31, 2014, after 6 years with the company. Endo said it will re-domicile in Ireland and move its R&D lead role there, which led Gergel to decide to move on.
- read the earnings release
- here's the CSO departure announcement