ENDO REPORTS SECOND-QUARTER 2024 FINANCIAL RESULTS

Contributed by: PR Newswire

PR Newswire associated0

Raises 2024 Financial Expectations
Provides 2025 Financial Expectations

MALVERN, Pa., Aug. 27, 2024 /PRNewswire/ -- Endo, Inc. ("Endo" or the "Company") (OTCQX: NDOI), a diversified specialty pharmaceutical company transforming insights into life-enhancing therapies, today reported financial results for the second-quarter ended June 30, 2024[1]. Endo acquired substantially all of the assets of Endo International plc ("EIP") on April 23, 2024, as contemplated by EIP's plan of reorganization (the "Plan").

The Company continues executing its strategy of becoming a vibrant growth company. With second-quarter results which exceeded internal expectations, the Company is raising 2024 full-year financial expectations and is also providing 2025 financial expectations, which represent a return to growth.

ENDO SECOND-QUARTER FINANCIAL PERFORMANCE

(in thousands)

                                               Successor             Predecessor              Non-GAAP               Predecessor         Non-GAAP


                                             Three Months            Period From           Combined Three            Three Months        % Change
                                    Ended June             April 1, 2024           Months Ended             Ended June               2024 vs.
                                                              through                                                                  2023
                                                 30, 2024 April 23, 2024          June 30, 2024                          30, 2023



     Branded Pharmaceuticals                    $146,151                 $78,918                  $225,069                 $212,377              6 %



     Sterile Injectables                         $56,474                 $34,297                   $90,771                 $137,028           (34) %



     Generic Pharmaceuticals                     $69,722                 $40,360                  $110,082                 $178,579           (38) %



     International Pharmaceuticals               $11,816                  $8,892                   $20,708                  $18,868             10 %



     Total Revenues, Net                        $284,163                $162,467                  $446,630                 $546,852           (18) %



     Reported Net (Loss) Income               $(148,776)             $6,527,549                $6,378,773                  $23,438      
            NM



     Adjusted Net Income (a)                     $28,122                 $76,571                  $104,693                 $230,705           (55) %



     Adjusted EBITDA (a)                         $89,691                 $86,090                  $175,781                 $243,417           (28) %

__________

     (a) The information presented in the table above includes non-GAAP financial measures such as Adjusted Net Income and Adjusted
          EBITDA. Please refer to the "Supplemental Financial Information" section below for reconciliations of certain non-GAAP
          financial measures to the most directly comparable GAAP financial measures.

     
     (1) As required by GAAP, due to the application of Fresh Start Accounting, results for the quarter must be presented separately for
              the predecessor period from April 1, 2024 through April 23, 2024 (the "Predecessor" period) and the successor three months ended
              June 30, 2024 (the "Successor" period). However, to facilitate comparison of our operating results against the relevant prior
              periods the Company has combined the results of the Predecessor and Successor periods as non-GAAP measures ("combined" results).

ENDO CONSOLIDATED FINANCIAL RESULTS

Total revenues in the combined second-quarter 2024 (as defined below under "Supplemental Financial Information - Non-GAAP Financial Measures") were $447 million, a decrease of 18% compared to $547 million in second-quarter 2023. This decrease was primarily attributable to decreased revenues from the Generic Pharmaceuticals and Sterile Injectables segments, partially offset by increased revenues from the Branded Pharmaceuticals segment.

Net Income in the combined second-quarter 2024 was $6,379 million compared to $23 million in second-quarter 2023. This change was primarily due to gains arising from the Plan's implementation and the application of fresh start accounting.

Adjusted Net Income in the combined second-quarter 2024 was $105 million compared to $231 million in second-quarter 2023. This change was primarily due to decreased revenues.

BRANDED PHARMACEUTICALS SEGMENT

Branded Pharmaceuticals segment revenues were $225 million in the combined second-quarter 2024, representing a 6% increase compared to $212 million in second-quarter 2023.

Specialty Products revenues were $162 million in the combined second-quarter 2024, representing a 2% decrease compared to $165 million in second-quarter 2023. This change was primarily due to a decrease in SUPPRELIN® LA revenues due to lower volumes and a decrease in NASCOBAL® Nasal Spray revenues due to generic competition, partially offset by an increase in XIAFLEX® revenues.

XIAFLEX® revenues were $127 million in the combined second-quarter 2024, representing an 8% increase compared to $117 million in second-quarter 2023. This increase was driven by increased net selling price and underlying demand growth that was in-line with internal expectations. XIAFLEX® volume increased 8% compared to first quarter 2024 and decreased slightly compared to second-quarter 2023 due to changes in channel inventory.

Established Products revenues were $63 million in the combined second-quarter 2024, representing a 33% increase compared to $47 million in second-quarter 2023. This increase was primarily due to an approximately $10 million favorable change in non-recurring, non-cash adjustments between the second-quarter 2024 and second-quarter 2023 related to previously discontinued products as well as increased revenues related to products that experienced temporary supply disruptions in 2023.

STERILE INJECTABLES SEGMENT

Sterile Injectables segment revenues were $91 million in the combined second-quarter of 2024, representing a 34% decrease compared to $137 million in second-quarter 2023. This decrease was primarily attributable to a non-recurring payment of $33 million received from Novavax, Inc. in second-quarter 2023 to settle a dispute related to a previous manufacturing and services agreement and competitive pressures, partially offset by revenues from 2023 new product launches.

GENERIC PHARMACEUTICALS SEGMENT

Generic Pharmaceuticals segment revenues were $110 million in the combined second-quarter 2024, representing a 38% decrease compared to $179 million in second-quarter 2023. This decrease was primarily attributable to competitive pressure across multiple products including varenicline tablets, the generic version of Chantix®, and dexlansoprazole delayed release capsules, the generic version of Dexilant®, partially offset by increased revenues from lidocaine patch 5%, the generic version of LIDODERM®.

INTERNATIONAL PHARMACEUTICALS SEGMENT

International Pharmaceuticals segment revenues were $21 million in the combined second-quarter 2024 compared to $19 million during second-quarter 2023.

BALANCE SHEET AND LIQUIDITY

As of June 30, 2024, Endo had approximately $294 million in unrestricted cash and cash equivalents.

Combined second-quarter 2024 net cash used in operating activities was approximately $698 million compared to approximately $127 million net cash provided by operating activities during second-quarter 2023. This change was primarily driven by the settlement of certain claims during the predecessor period in connection with the Plan.

During second-quarter 2024, the Company used the proceeds from the issuance of a $1.5 billion senior secured term loan facility and $1.0 billion senior secured notes due in 2031, along with the proceeds from a $500 million equity rights offering, to acquire substantially all of EIP's assets in connection with the Plan.

FINANCIAL EXPECTATIONS

Endo is updating its financial expectations for the full-year ending December 31, 2024, inclusive of the predecessor and successor periods.

                                                                         Prior Outlook        Current Outlook



     
                ($ in millions)



     Total Revenues, Net                                          
       $1,685 - $1,770   
         $1,720- $1,780



     Adjusted EBITDA                                                
         $615 - $645     
          $635 - $655



     
                Assumptions:



     Segment Revenues:



     Branded Pharmaceuticals                                        
         $860 - $905     
          $875 - $905



     Sterile Injectables                                            
         $370 - $390     
          $370 - $390



     Generic Pharmaceuticals                                        
         $395 - $415     
          $410 - $420



     International Pharmaceuticals                                    ~$60            
         ~$65



     Adjusted Gross Margin as a Percentage of Total Revenues, Net                ~67%                  ~67%



     Adjusted Operating Expenses                                    
         $585 - $605     
          $595 - $615

In light of recent developments related to the expected timing of certain new product launches included in long term projections disclosed by EIP in connection with its Chapter 11 process, Endo is providing financial expectations for the full-year ending December 31, 2025, compared to mid-point of full-year 2024 expectations.

                                              Full-year 2025



     
                ($ in millions)



     Total Revenues, Net           Low-single digit % growth



     Adjusted EBITDA               Mid to high-single digit
                                             % growth



     
                Assumptions:



     Segment Revenues:



     Branded Pharmaceuticals       Low to mid-single digit %
                                              growth



     Sterile Injectables           Low to mid-single digit %
                                              growth



     Generic Pharmaceuticals       Flat to mid-single digit
                                             % decline



     International Pharmaceuticals 
              Flat



The foregoing information includes financial guidance, expectations and other forward-looking statements based on Endo's current views, beliefs, estimates and assumptions, and it updates and supersedes all guidance, projections, forecasts, plans, expectations and other forward-looking statements for any time period(s) previously provided by EIP or Endo. Endo expressly disclaims any intent or obligation to update such forward-looking statements whether as a result of new information, future developments or otherwise and will not do so except as required by law. Actual results may differ materially and adversely from these and any other forward-looking statements, as further discussed below under the heading "Cautionary Note Regarding Forward-Looking Statements."

CONFERENCE CALL INFORMATION

Endo will host a conference call to discuss this press release later today, August 27, 2024, at 8:00 a.m. ET.

To participate in the call, please dial 800-836-8184 (U.S. and Canada toll-free) or 646-357-8785 (outside the U.S.) or join the live webcast at this link. Please join 10 minutes prior to the scheduled start time.

A replay of the webcast will be available within 24 hours at investor.endo.com.

LIDODERM® is a U.S. registered trademark of Teikoku Pharma USA, Inc.

Dexilant® is a registered trademark of Takeda Pharmaceutical U.S.A., Inc.

Chantix® is a registered trademark of Pfizer Inc.

FINANCIAL SCHEDULES

The following table presents unaudited Total revenues, net (dollars in thousands):

                                                             Successor               Predecessor               Non-GAAP                   Predecessor     Non-GAAP


                                                           Three Months              Period From            Combined Three                Three Months    % Change
                                              Ended June 30,            April 1, 2024             Months Ended               Ended June 30,
                                                                   2024  through April            June 30, 2024                                    2023     2024 vs.
                                                                              23,                                                                             2023
                                                                                            2024



     
                Specialty Products:



     XIAFLEX(R)                                                $87,054                   $39,588                   $126,642                     $117,291          8 %



     SUPPRELIN(R) LA                                            14,518                     6,078                     20,596                       28,223       (27) %



     Other Specialty (1)                                         9,339                     5,902                     15,241                       19,839       (23) %



     Total Specialty Products                                 $110,911                   $51,568                   $162,479                     $165,353        (2) %



     
                Established Products:



     PERCOCET(R)                                               $13,910                    $9,348                    $23,258                      $26,445       (12) %



     TESTOPEL(R)                                                 8,382                     2,734                     11,116                       11,600        (4) %



     Other Established (2)                                      12,948                    15,268                     28,216                        8,979           NM



     Total Established Products                                $35,240                   $27,350                    $62,590                      $47,024         33 %



     Total Branded Pharmaceuticals (3)                        $146,151                   $78,918                   $225,069                     $212,377          6 %



     
                Sterile Injectables:



     ADRENALIN(R)                                              $14,642                   $11,233                    $25,875                      $27,133        (5) %



     VASOSTRICT(R)                                               7,926                     7,356                     15,282                       24,419       (37) %



     Other Sterile Injectables (4)                              33,906                    15,708                     49,614                       85,476       (42) %



     Total Sterile Injectables (3)                             $56,474                   $34,297                    $90,771                     $137,028       (34) %



     Total Generic Pharmaceuticals (5)                         $69,722                   $40,360                   $110,082                     $178,579       (38) %



     Total International Pharmaceuticals (6)                   $11,816                    $8,892                    $20,708                      $18,868         10 %



     Total revenues, net                                      $284,163                  $162,467                   $446,630                     $546,852       (18) %

__________

     (1) 
     Products included within Other Specialty include AVEED(R) and NASCOBAL(R) Nasal Spray.



     (2) 
     Products included within Other Established include, but are not limited to, EDEX(R).



     (3)   Individual products presented above represent the top two performing products in each product category for either the combined
              three months ended June 30, 2024 and/or any product having revenues in excess of $25 million during any period presented for
              2024 or 2023.


            Products included within Other Sterile Injectables include, but are not limited to, APLISOL(R). During the second quarter of
              2023, Endo International plc and/or certain of its subsidiaries executed a Settlement Agreement and Release of Claims with
              Novavax, Inc. (the Novavax Settlement Agreement) to resolve a dispute under a previous manufacturing services agreement. For
              the three months ended June 30, 2023, the cash and non-cash consideration received in connection with the Novavax Settlement
              Agreement made up approximately 7% of consolidated total revenue. No individual product within Other Sterile Injectables has

     (4)    exceeded 5% of consolidated total revenues for the periods presented.


            The Generic Pharmaceuticals segment is comprised of a portfolio of products that are generic versions of branded products, are
              distributed primarily through the same wholesalers, generally have limited or no intellectual property protection and are sold
              within the U.S. Lidocaine patch 5% (the generic version of LIDODERM(R)), made up approximately 8%, for the combined three
              months ended June 2024, of consolidated revenues. Varenicline tablets (Endo's generic version of Pfizer Inc.'s Chantix(R)),

     (5)    which launched in September 2021, made up 10%, for the three months ended June 30, 2023, of consolidated total revenues.



     (6)   No individual product within the International Pharmaceuticals segment accounted for more than 5% of consolidated total revenues
              for any of the periods presented.

The following table presents the unaudited Condensed Consolidated Statement of Operations (in thousands):

                                                                                Successor                            Predecessor


                                                                              Three Months              Period From                        Three Months
                                                                 Ended June 30,            April 1, 2024                      Ended June 30,
                                                                                      2024  through April
                                                                                                 23,                                                2023
                                                                                                               2024



     TOTAL REVENUES, NET                                                         $284,163                  $162,467                             $546,852



     COSTS AND EXPENSES:



     Cost of revenues                                                             333,695                    60,539                              233,852



     Selling, general and administrative                                           95,992                    28,323                              137,729



     Research and development                                                      22,448                     6,120                               28,037



     Acquired in-process research and development



     Litigation-related and other contingencies, net                                                           200                               28,013



     Asset impairment charges                                                                                1,799



     Acquisition-related and integration items, net                                 (130)                    (817)                                 365



     Interest expense (income), net                                                44,669                       (2)                                 120



     Reorganization items, net                                                                         (6,328,145)                              84,267



     Other expense (income), net                                                      246                     (493)                                 179



     (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX                $(212,757)               $6,394,943                              $34,290



     INCOME TAX (BENEFIT) EXPENSE                                                (63,981)                   50,629                               10,279



     (LOSS) INCOME FROM CONTINUING OPERATIONS                                  $(148,776)               $6,344,314                              $24,011



     DISCONTINUED OPERATIONS, NET OF TAX                                                                   183,234                                (573)



     NET (LOSS) INCOME                                                         $(148,776)               $6,527,548                              $23,438



     NET (LOSS) INCOME PER SHARE-BASIC:



     Continuing operations                                                        $(1.95)                   $26.97                                $0.10



     Discontinued operations                                                                                  0.78



     Basic                                                                        $(1.95)                   $27.75                                $0.10



     NET (LOSS) INCOME PER SHARE-DILUTED:



     Continuing operations                                                        $(1.95)                   $26.97                                $0.10



     Discontinued operations                                                                                  0.78



     Diluted                                                                      $(1.95)                   $27.75                                $0.10



     WEIGHTED AVERAGE SHARES:



     Basic                                                                         76,156                   235,220                              235,220



     Diluted                                                                       76,156                   235,220                              235,220

The following table presents unaudited Total revenues, net (dollars in thousands):

                                                            Successor                Predecessor                Non-GAAP                  Predecessor    Non-GAAP


                                                            Six Months               Period From              Combined Six                Six Months     % Change
                                              Ended June 30,           January 1, 2024            Months Ended               Ended June 30,
                                                                  2024   through April            June 30, 2024                                   2023     2024 vs.
                                                                              23,                                                                            2023
                                                                                            2024



     
                Specialty Products:



     XIAFLEX(R)                                               $87,054                   $152,638                   $239,692                    $214,201         12 %



     SUPPRELIN(R) LA                                           14,518                     26,213                     40,731                      51,800       (21) %



     Other Specialty (1)                                        9,339                     21,120                     30,459                      41,533       (27) %



     Total Specialty Products                                $110,911                   $199,971                   $310,882                    $307,534          1 %



     
                Established Products:



     PERCOCET(R)                                              $13,910                    $33,892                    $47,802                     $52,501        (9) %



     TESTOPEL(R)                                                8,382                     13,225                     21,607                      22,589        (4) %



     Other Established (2)                                     12,948                     32,626                     45,574                      27,326         67 %



     Total Established Products                               $35,240                    $79,743                   $114,983                    $102,416         12 %



     Total Branded Pharmaceuticals (3)                       $146,151                   $279,714                   $425,865                    $409,950          4 %



     
                Sterile Injectables:



     ADRENALIN(R)                                             $14,642                    $38,601                    $53,243                     $52,708          1 %



     VASOSTRICT(R)                                              7,926                     34,309                     42,235                      50,370       (16) %



     Other Sterile Injectables (4)                             33,906                     59,621                     93,527                     135,205       (31) %



     Total Sterile Injectables (3)                            $56,474                   $132,531                   $189,005                    $238,283       (21) %



     Total Generic Pharmaceuticals (5)                        $69,722                   $143,677                   $213,399                    $376,759       (43) %



     Total International Pharmaceuticals (6)                  $11,816                    $26,052                    $37,868                     $37,127          2 %



     Total revenues, net                                     $284,163                   $581,974                   $866,137                  $1,062,119       (18) %

__________

     (1) 
     Products included within Other Specialty include AVEED(R) and NASCOBAL(R) Nasal Spray.



     (2) 
     Products included within Other Established include, but are not limited to, EDEX(R).



     (3)   Individual products presented above represent the top two performing products in each product category for the combined six
              months ended June 30, 2024 and/or any product having revenues in excess of $25 million during any completed quarterly period
              for 2024 or 2023.



     (4)   No individual product within Other Sterile Injectables has exceeded 5% of consolidated total revenues for the periods presented.


            For the combined six months ended June 30, 2024, lidocaine patch 5% (the generic version of LIDODERM(R)), made up approximately
              8% of consolidated total revenues. For the six months ended June 30, 2023, varenicline tablets (Endo's generic version of
              Pfizer Inc.'s Chantix(R)), which launched in September 2021, made up 13% of consolidated total revenues. For the six months
              ended June 30, 2023, dexlansoprazole delayed release capsules (Endo's generic version of Takeda Pharmaceuticals USA, Inc.'s

     (5)    Dexilant(R)), which launched in November 2022, made up 5% of consolidated total revenues.



     (6)   No individual product within the International Pharmaceuticals segment accounted for more than 5% of consolidated total revenues
              for any of the periods presented.

The following table presents the unaudited Condensed Consolidated Statement of Operations (in thousands):

                                                                               Successor                             Predecessor


                                                                               Six Months               Period From                         Six Months
                                                                 Ended June 30,           January 1, 2024                     Ended June 30,
                                                                                     2024   through April
                                                                                                 23,                                               2023
                                                                                                               2024



     TOTAL REVENUES, NET                                                        $284,163                   $581,974                          $1,062,119



     COSTS AND EXPENSES:



     Cost of revenues                                                            333,695                    259,552                             466,594



     Selling, general and administrative                                          95,992                    158,391                             288,522



     Research and development                                                     22,448                     32,022                              55,740



     Acquired in-process research and development                                                              750



     Litigation-related and other contingencies, net                                                           200                              43,213



     Asset impairment charges                                                                                2,103                                 146



     Acquisition-related and integration items, net                                (130)                     (196)                                762



     Interest expense (income), net                                               44,669                        (2)                                229



     Reorganization items, net                                                                         (6,125,099)                            169,619



     Other expense, net                                                              246                      5,262                                  54



     (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX               $(212,757)                $6,248,991                             $37,240



     INCOME TAX (BENEFIT) EXPENSE                                               (63,981)                    58,512                              16,052



     (LOSS) INCOME FROM CONTINUING OPERATIONS                                 $(148,776)                $6,190,479                             $21,188



     DISCONTINUED OPERATIONS, NET OF TAX                                                                   182,839                             (1,029)



     NET (LOSS) INCOME                                                        $(148,776)                $6,373,318                             $20,159



     NET (LOSS) INCOME PER SHARE-BASIC:



     Continuing operations                                                       $(1.95)                    $26.32                               $0.09



     Discontinued operations                                                                                  0.78



     Basic                                                                       $(1.95)                    $27.10                               $0.09



     NET (LOSS) INCOME PER SHARE-DILUTED:



     Continuing operations                                                       $(1.95)                    $26.32                               $0.09



     Discontinued operations                                                                                  0.78



     Diluted                                                                     $(1.95)                    $27.10                               $0.09



     WEIGHTED AVERAGE SHARES:



     Basic                                                                        76,156                    235,220                             235,218



     Diluted                                                                      76,156                    235,220                             235,662

The following table presents the unaudited Condensed Consolidated Balance Sheet (in thousands):

                                                                                   Successor   Predecessor


                                                                                 June 30, 2024 December 31,
                                                                                                       2023



     
                ASSETS



     CURRENT ASSETS:



     Cash and cash equivalents                                                       $293,536      $777,919



     Restricted cash and cash equivalents                                             166,851       167,702



     Accounts receivable                                                              365,778       386,919



     Inventories, net                                                                 659,027       246,017



     Other current assets                                                              85,421        89,944



     Total current assets                                                          $1,570,613    $1,668,501



     TOTAL NON-CURRENT ASSETS                                                       3,385,427     3,468,793



     TOTAL ASSETS                                                                  $4,956,040    $5,137,294



     
                LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)



     CURRENT LIABILITIES:



     Accounts payable and accrued expenses, including legal settlement accruals      $516,232      $537,736



     Other current liabilities                                                         83,326         1,058



     Total current liabilities                                                       $599,558      $538,794



     LONG-TERM DEBT, LESS CURRENT PORTION, NET                                      2,426,503



     OTHER LIABILITIES                                                                 97,022       100,192



     LIABILITIES SUBJECT TO COMPROMISE                                                          11,095,868



     SHAREHOLDERS' EQUITY (DEFICIT)                                                 1,832,957   (6,597,560)



     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                          $4,956,040    $5,137,294

The following table presents the unaudited Condensed Consolidated Statement of Cash Flow data (in thousands):

                                                                                                                          Successor                             Predecessor


                                                                                                                          Six Months               Period From                         Six Months
                                                                                                            Ended June 30,           January 1, 2024                     Ended June 30,
                                                                                                                                2024   through April
                                                                                                                                            23,                                               2023
                                                                                                                                                          2024



     OPERATING ACTIVITIES:



     Net (loss) income                                                                                                   $(148,776)                $6,373,318                             $20,159



     Adjustments to reconcile Net (loss) income to Net cash provided by (used in) operating activities                      220,615                (7,117,959)                            169,255



     Net cash provided by (used in) operating activities                                                                    $71,839                 $(744,641)                           $189,414



     INVESTING ACTIVITIES:



     Capital expenditures, excluding capitalized interest                                                                   (8,921)                  (19,751)                           (53,516)



     Acquisitions, including in-process research and development, net of cash and restricted cash acquired                                              (750)



     Proceeds from sale of business and other assets                                                                          1,631                      2,188                               2,259



     Proceeds from the U.S. Government Agreement                                                                              1,161                      7,728                              19,354



     Net cash used in investing activities                                                                                 $(6,129)                 $(10,585)                          $(31,903)



     FINANCING ACTIVITIES:



     Payments on borrowings, including certain adequate protection payments, net (a)                                                              (2,783,950)                          (291,689)



     Proceeds from issuance of debt and equity, net of other payments                                                       (2,767)                 2,907,558                             (5,382)



     Net cash (used in) provided by financing activities                                                                   $(2,767)                  $123,608                          $(297,071)



     Effect of foreign exchange rate                                                                                            439                    (1,998)                                944



     NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS                     $63,382                 $(633,616)                         $(138,616)



     CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD                           397,005                  1,030,621                           1,249,241



     CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD                                $460,387                   $397,005                          $1,110,625

__________

     (a) Beginning during the third quarter of 2022, EIP became obligated to make certain adequate protection payments as a result of its
          previously disclosed Chapter 11 proceedings.

SUPPLEMENTAL FINANCIAL INFORMATION

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides certain financial information of Endo, Inc. in this release that are not prescribed by or prepared in accordance with GAAP. The Company utilizes these non-GAAP financial measures as supplements to financial measures determined in accordance with GAAP when evaluating operating performance and the Company believes that these measures will be used by certain investors to evaluate operating results. The Company believes that presenting these non-GAAP financial measures provides useful information about performance across reporting periods on a consistent basis by excluding certain items, which may be favorable or unfavorable, as more fully described in the reconciliation tables below.

As required by GAAP, results for the quarter must be presented separately for the predecessor period from April 1, 2024 through April 23, 2024 (the "Predecessor" period) and the successor three months ended June 30, 2024 (the "Successor" period). However, to facilitate comparison of our operating results against the relevant prior periods the Company has combined the results of the Predecessor and Successor periods as non-GAAP measures ("combined" results).

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 (unlike GAAP net income and its components) may differ from, and 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.

These non-GAAP financial measures should not be viewed in isolation or as substitutes for, or superior to, financial measures calculated in accordance with GAAP. 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.

The tables below provide reconciliations of certain of the non-GAAP financial measures included in this release to their most directly comparable GAAP metrics. 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 Net Loss (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP)

The following table provides a reconciliation of Net (loss) income (GAAP) to Adjusted EBITDA (non-GAAP) (in thousands):

                                                               Successor                            Predecessor (a)


                                                             Three Months              Period From                          Three Months
                                                Ended June 30,            April 1, 2024                        Ended June 30,
                                                                     2024  through April
                                                                                23,                                                  2023
                                                                                              2024



     Net (loss) income (GAAP)                                 $(148,776)               $6,527,548                                $23,438



     Income tax (benefit) expense, net                          (63,981)                   50,630                                 10,279



     Interest expense (income), net                               44,669                       (3)                                   120



     Depreciation and amortization (1)                            60,352                    18,030                                $77,130



     EBITDA (non-GAAP)                                        $(107,736)               $6,596,205                               $110,967



     Asset impairment charges (2)                                                           1,799



     Acquisition & Divestitures (3)                              191,857                     (817)                                   365



     Restructuring or similar transactions (4)                     5,324                                                          14,281



     Reorganization items, net (5)                                                    (6,328,145)                                84,267



     Other (6)                                                       246                       282                                 32,964



     Discontinued Operations (8)                                                        (183,234)                                   573



     Adjusted EBITDA (non-GAAP)                                  $89,691                   $86,090                               $243,417

__________

     (a) Certain prior period non-GAAP adjustments have been reclassified to conform to the current period presentation. Unless
          otherwise noted in the footnotes below, there have been no changes to the adjustment amounts.

Reconciliation of Net (Loss) Income (GAAP) to Adjusted Net Income (non-GAAP)

The following table provides a reconciliation of Endo's Net (Loss) income (GAAP) to Adjusted Net Income (non-GAAP) (in thousands):

                                                               Successor                            Predecessor (a)


                                                             Three Months              Period From                          Three Months
                                                Ended June 30,            April 1, 2024                        Ended June 30,
                                                                     2024  through April
                                                                                23,                                                  2023
                                                                                              2024



     Net (Loss) income (GAAP)                                 $(148,776)               $6,527,548                                $23,438



     Non-GAAP adjustments:



     Asset impairment charges (2)                                                           1,799



     Acquisition & Divestitures (3)                              240,938                    14,264                                 64,915



     Restructuring or similar transactions (4)                     5,324                         1                                 14,281



     Reorganization items, net (5)                                                    (6,328,145)                                84,267



     Other (6)                                                       246                        32                                 34,582



     Tax adjustments (7)                                        (69,610)                   44,307                                  8,649



     Discontinued Operations (8)                                                        (183,234)                                   573



     Adjusted Net Income (non-GAAP)                              $28,122                   $76,572                               $230,705

__________

     (a) Certain prior period non-GAAP adjustments have been reclassified to conform to the current period presentation. Unless
          otherwise noted in the footnotes below, there have been no changes to the adjustment amounts.

Reconciliation of Select Other Adjusted Income Statement Data (non-GAAP)

The following tables provide detailed reconciliations of select other income statement data for Endo, Inc. between the GAAP and non-GAAP measure (in thousands):

                                                              
           
                Three Months Ended June 30, 2024 (Successor)


                                     Cost of Gross profit
                                                  (a)               Gross margin                                Total operating                       Reorganization                 Other expense,                                 Income tax
                          revenues                              (a)                                   expenses (b)                           items, net                        net                               (benefit)
                                                                                                                                                                                                                  expense


      Reported (GAAP)               $333,695     $(49,532)               (17.4) %                                       $118,310          
            $                 -                           $246                 $(63,981)


      Items impacting
       comparability:


      Acquisition &
       Divestitures (3)            (241,068)      241,068                                                                    130


      Restructuring or
       similar
       transactions (4)                  (7)            7                                                                (5,317)



     Other (6)                                                                                                                                                                               (246)


      Tax adjustments (7)                                                                                                                                                                                         69,610



     Non-GAAP                       $92,620      $191,543                  67.4 %                                       $113,123          
            $                 - 
              $                 -               $5,629






                                                           
     
             Period From April 1, 2024 through April 23, 2024 (Predecessor) (c)


                                     Cost of Gross profit
                                                  (a)               Gross margin                                Total operating                       Reorganization                 Other (income)                       Income tax
                          revenues                              (a)                                   expenses (b)                           items, net                   expense, net                 expense


      Reported (GAAP)                $60,539      $101,928                  62.7 %                                        $35,624                          $(6,328,145)                         $(492)          $50,629


      Items impacting
       comparability:


      Asset impairment
       charges (2)                                                                                                      (1,799)


      Acquisition &
       Divestitures (3)             (15,081)       15,081                                                                    818


      Restructuring or
       similar
       transactions (4)                  (1)            1


      Reorganization
       items, net (5)                                                                                                                                      6,328,145



     Other (6)                                                                                                           (778)                                                                 746


      Tax adjustments (7)                                                                                                                                                                                    (44,309)



     Non-GAAP                       $45,457      $117,010                  72.0 %                                        $33,865          
            $                 -                           $254            $6,320




                                                               
              
      Three Months Ended June 30, 2023 (c)


                                    Cost of Gross profit
                                                 (a)          Gross margin                      Total operating              Reorganization                Other expense             Income tax
                          revenues                        (a)                         expenses (b)                  items, net                 (income), net                 expense


      Reported (GAAP)              $233,852      $313,000             57.2 %                             $194,144                      $84,267                          $299                 $10,279


      Items impacting
       comparability:


      Acquisition &
       Divestitures (3)            (64,550)       64,550                                                   (365)


      Restructuring or
       similar
       transactions (4)               (489)          488                                                (13,793)


      Reorganization
       items, net (5)                                                                                                              (84,267)



     Other (6)                                                                                        (32,660)                                                  (1,922)


      Tax adjustments (7)                                                                                                                                                               (8,649)



     Non-GAAP                     $168,813      $378,038             69.1 %                             $147,326 
            $                 -                     $(1,623)                 $1,630

__________

     (a) Gross profit is calculated as total revenues less cost of revenues. Gross margin is calculated as gross profit divided by total
          revenues. Adjusted gross profit is calculated as total revenues less adjusted cost of sales. Adjusted gross margin is
          calculated as adjusted gross profit divided by total revenues.


     (b) Total operating expenses is calculated as the total of: (i) Selling, general and administrative; (ii) Research and development;
          (iii) Acquired in-process research and development; (iv) Litigation-related and other contingencies, net; (v) Asset
          impairment charges; and (vi) Acquisition related and integration items, net.


     (c) Certain prior period non-GAAP adjustments have been reclassified to conform to the current period presentation. Unless
          otherwise noted in the footnotes below, there have been no changes to the adjustment amounts.

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 are as follows:





     (1)                                                                                                                                             Depreciation and amortization and Share-based compensation amounts per the Adjusted EBITDA reconciliations do not include
                                                                                                                                                        amounts reflected in other lines of the reconciliations, including amounts related to restructuring or other transactions.



     (2)                                                                                                                                           
     Adjustments for asset impairment charges included the following (in thousands):


                                                                        Successor                             Predecessor


                                                                      Three Months             April 1, 2024                          Three Months
                                                         Ended June 30,            through April
                                                                                         23,                              Ended June 30,
                                                                              2024                       2024                                   2023



     Property, plant and equipment impairment charges 
        $                    -                    $1,799      
              $                    -



     Total                                            
        $                    -                    $1,799      
              $                    -

     (3) Adjustments for acquisitions and divestitures included the
            following (in thousands):



                                                                       Successor                                                       
              
              Predecessor


                                                                Three Months Ended June                                April 1, 2024 through                                         Three Months Ended June
                                                                            30,                                                 April 23,                                                          30,
                                                                                            2024                                                    2024                                                              2023


                                                        Cost of                           Operating             Cost of                             Operating                      Cost of                              Operating
                                              revenues                           expenses              revenues                            expenses                       revenues                           expenses



     Amortization of inventory step-up                $191,987           
              $             - 
        $            -            
              $             -          
        $            -            
             $               -



     Fair value of contingent consideration                                                  (130)                                                     (818)                                                                 365



     Amortization of intangible assets (a)              49,081                                    0               15,081                                                              64,425



     Other acquisition and divestiture items                                                                                                                                          125



     Total                                            $241,068                               $(130)             $15,081                                 $(818)                      $64,550                                    $365

__________

     (a) For the purposes of calculating Adjusted EBITDA (non-GAAP), amortization of intangible assets is excluded from the adjustments
          for acquisitions and divestitures as it is included as an adjustment to arrive at EBITDA (non-GAAP). Amortization of
          intangible assets is an adjustment included in the acquisitions and divestitures line item for the purposes calculating
          Adjusted Net Income (non-GAAP).

     (4) Adjustments for Restructuring or similar transactions included the
            following (in thousands):



                                                               Successor                                             
            
      Predecessor


                                                   Three Months Ended June 30, 2024              April 1, 2024 through April
                                                                                                               23, 2024                            Three Months Ended June 30, 2023


                                             Cost of                                Operating              Cost of revenues                  Cost of
                                             revenues                                                                                        revenues                               Operating
                                                                         expenses                                                                                        expenses



     Continuity and separation benefits 
     $        -       
              $                    -  
              $                  -                 $1,016                                  $14,092



     Inventory adjustments                                                                                                                     (528)                                   (322)



     Other                                         7                                    5,317                                 1                                                              23



     Total                                        $7                                   $5,317                                $1                    $488                                  $13,793

     (5) Amounts relate to the net expense or income recognized during Endo International plc's bankruptcy proceedings required to be
            presented as Reorganization items, net under Accounting Standards Codification Topic 852, Reorganizations.



     (6) The "Other" row included in the above reconciliation of Net (Loss) Income (GAAP) to Adjusted Net Income (non-GAAP) includes the
            following adjustments:



                                                           Successor                                                               
              
                Predecessor


                                                         Three Months                       April 1, 2024 through April 23, 2024                                                             Three Months Ended June 30, 2023
                                            Ended June 30,
                                                                 2024


                                                             Other             Operating                      Other                            Discontinued                     Operating                            Other                  Discontinued
                                           (Income)/Expense           expenses               (Income)/Expense                       Operations                         expenses                     (Income)/Expense             Operations



     Certain Legal Costs                
         $                    -               $578  
           $                -             
            $                -                        $2,114     
              $                -   
            $                -



     Legal Settlements                                                              200                                                                                            28,013


      Foreign currency impact related to
       the re-measurement of
       intercompany debt instruments                              246                                          (746)                                                                                                  1,923



     Other                                                                                                                                         137,578                          2,535                                                           (573)



     Total                                                      $246                $778                      $(746)                                $137,578                        $32,662                            $1,923                         $(573)



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



     (8) To exclude from the results of the Predecessor reported as discontinued operations. No portion of Endo, Inc.'s business is
            currently reported as a discontinued operation.

About Endo

Endo is a diversified specialty pharmaceutical company boldly transforming insights into life-enhancing therapies. Our passionate team members collaborate to develop and deliver these essential medicines. Together, we are committed to helping everyone we serve live their best life. Learn more at www.endo.com or connect with us on LinkedIn.

Predecessor and Successor Periods

As contemplated in the Plan, on April 23, 2024 (the "Effective Date"), Endo, Inc. acquired substantially all of the assets and certain equity interests of EIP. While the terms of the Plan were deemed to be effective as of 12:01 a.m. on April 23, 2024, the Company has used an accounting convenience date of 11:59 p.m. on April 23, 2024. The Company selected this date/time to align with the cash movements contemplated by the Plan that occurred throughout the day on the Effective Date. The cashflows associated with the Company's ongoing operations that occurred on April 23, 2024, are included in the Successor period. The Company evaluated and concluded that the operational activity on April 23, 2024, unrelated to the Plan transactions, was immaterial and use of an accounting convenience date/time of the end of day on April 23, 2024 was appropriate.

The second-quarter financial statements reflect the application of fresh start accounting, which resulted in Endo becoming a new reporting entity for accounting and financial reporting purposes. Accordingly, our financial statements and notes following the Effective Date are not comparable to EIP's financial statements prior to that date. Refer to the "Non-GAAP Financial Measures" section for additional information about the discrete Predecessor and Successor presentation in accordance with GAAP.

Endo, Inc. was incorporated as a Delaware corporation on December 5, 2023 and (i) from its formation on December 5, 2023 through the Effective Date, Endo, Inc. had no operations or business transactions or activities other than those taken in contemplation of the Plan including in connection with the incurrence of the Exit Financing Debt and those incidental to the preparation of its registration statement. All incidental charges have been capitalized in the Successor Condensed Consolidated Balance Sheet as incurred, primarily concentrated in the lead up to, or on, the Effective Date. As of the Effective Date, Endo, Inc. is a holding company and all of its business is conducted through its subsidiaries, and the financial results of such subsidiaries are consolidated in its financial statements.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to any statements relating to financial guidance, expectations, plans or projections and any other statements that refer to expected, estimated, predicted or anticipated future results or that do not relate solely to historical facts. Statements including words such as "believes," "expects," "anticipates," "intends," "estimates," "plan," "will," "may," "look forward," "intends," "guidance," "future," "potential" or similar expressions are examples of forward-looking statements. Because these statements reflect Endo's current views, expectations and beliefs concerning future events, they involve risks and uncertainties, some of which Endo may not currently be able to predict. Although Endo believes that these forward-looking statements and other information are based upon reasonable assumptions and expectations, readers should not place undue reliance on these or any other forward-looking statements and information. Actual results may differ materially and adversely from current expectations based on a number of factors, including, among other things, the following: the effects of the emergence of EIP's operating assets from the Chapter 11 financial restructuring process, including as it relates to the accounting for the effects of the Plan and the application of fresh start accounting; changes in competitive, market or regulatory conditions; changes in legislation or regulations; the ability to obtain and maintain adequate protection for intellectual property rights; the impacts of competition such as those related to XIAFLEX®; the timing and uncertainty of the results of both the research and development and regulatory processes; health care and cost containment reforms, including government pricing, tax and reimbursement policies; litigation; the performance including the approval, introduction and consumer and physician acceptance of current and new products; the performance of third parties upon whom we rely for goods and services; issues associated with our supply chain; our ability to develop and expand our product pipeline and to launch new products and to continue to develop the market for XIAFLEX® and other branded, sterile injectable or unbranded products; the effectiveness of advertising and other promotional campaigns; and the timely and successful implementation of business development opportunities and/or any other strategic priorities. Endo assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required under applicable securities laws. Additional information concerning risk factors, including those referenced above, can be found in press releases issued by Endo and in Endo's public filings with the U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Endo's final prospectus pursuant to Rule 424(b) under the Securities Act of 1933, as amended, in connection with Endo's Form S-1/A.

Copies of the Company's press releases and additional information about the Company are available at www.endo.com or you can contact the Company's Investor Relations Department at investor.relations@endo.com.

SOURCE Endo, Inc.

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