DUBLIN, Nov. 6, 2023 /PRNewswire/ -- Endo International plc (OTC: ENDPQ) today reported financial results for the third-quarter ended September 30, 2023.

THIRD-QUARTER FINANCIAL PERFORMANCE

(in thousands, except per share amounts)

                                                        Three Months Ended September                             Nine Months Ended September
                                                              30,                                        30,


                                                   2023              2022              Change       2023            2022                     Change



     Total Revenues, Net                      $451,665          $541,690              (17) % $1,513,784      $1,763,063                     (14) %



     Reported Loss from Continuing           $(27,936)       $(718,272)             (96) %   $(6,748)   $(2,664,455)                        NM


     Operations



     Reported Diluted Weighted Average         235,220           235,160                 - %   235,219         234,719                        - %


     Shares



     Reported Diluted Net Loss per Share       $(0.12)          $(3.05)             (96) %    $(0.03)       $(11.35)                        NM


     from Continuing Operations



     Reported Net Loss                       $(28,483)       $(722,169)             (96) %   $(8,324)   $(2,679,570)                        NM



     Adjusted Income from Continuing          $131,441          $111,858                18 %   $555,474        $274,329                         NM


     Operations (2)(3)



     Adjusted Diluted Weighted Average         235,220           236,183                 - %   235,515         236,372                        - %


     Shares (1)(2)



     Adjusted Diluted Net Income per             $0.56             $0.47                19 %      $2.36           $1.16                         NM


     Share from Continuing Operations (2)(3)



     Adjusted EBITDA (2)(3)                   $143,050          $210,816              (32) %   $595,497        $681,948                     (13) %

__________


     (1) Reported Diluted Net Loss per Share from Continuing Operations is computed based on weighted average shares outstanding and, if there is 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.



     (2) 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 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.



     (3) Effective January 1, 2022, these non-GAAP financial measures now include acquired in-process research and development charges which were previously excluded
            under Endo's legacy non-GAAP policy. Refer to note (13) in the "Notes to the Reconciliations of GAAP and Non-GAAP Financial Measures" section below for
            additional discussion.

CONSOLIDATED FINANCIAL RESULTS

Total revenues were $452 million in third-quarter 2023, a decrease of 17% compared to $542 million in third-quarter 2022. This decrease was primarily attributable to decreased revenues from the Generic Pharmaceuticals and Sterile Injectables segments.

Reported loss from continuing operations in third-quarter 2023 was $28 million compared to reported loss from continuing operations of $718 million in third-quarter 2022. This change was primarily due to lower litigation-related and asset impairment charges and lower interest expense as a result of the August 2022 Chapter 11 filing.

Adjusted income from continuing operations in third-quarter 2023 was $131 million compared to $112 million in third-quarter 2022. This change was primarily driven by lower interest and adjusted operating expenses which were partially offset by decreased revenues.

BRANDED PHARMACEUTICALS SEGMENT

Third-quarter 2023 Branded Pharmaceuticals segment revenues were $203 million compared to $204 million during third-quarter 2022.

Specialty Products revenues increased 3% to $150 million in third-quarter 2023 compared to $146 million in third-quarter 2022. This change was primarily due to an increase in XIAFLEX^® and Other Specialty revenues, partially offset by a decrease in SUPPRELIN^® LA revenues mainly driven by lower average net selling price as a result of business mix and lower overall market volumes. Third-quarter 2023 XIAFLEX^® revenues were $113 million, a 9% increase compared to third-quarter 2022 driven by increased net selling price and increased volumes.

Established Products revenues decreased 7% to $53 million in third-quarter 2023 compared to $57 million in third-quarter 2022 due primarily to product discontinuations.

STERILE INJECTABLES SEGMENT

Third-quarter 2023 Sterile Injectables segment revenues were $95 million, a decrease of 20% compared to $119 million during third-quarter 2022. This change was primarily attributable to decreased VASOSTRICT^® revenues due to lower price resulting from generic competition.

GENERIC PHARMACEUTICALS SEGMENT

Third-quarter 2023 Generic Pharmaceuticals segment revenues were $134 million, a decrease of 33% compared to $201 million during third-quarter 2022. This decrease was primarily attributable to competitive pressure on varenicline tablets, the generic version of Chantix^®, and lubiprostone capsules, the authorized generic of Mallinckrodt's Amitiza^®, partially offset by revenue from dexlansoprazole delayed release capsules, the generic version of Dexilant^®, which launched during fourth-quarter 2022.

During third-quarter 2023, two additional generic varenicline competitors entered the market, and an additional competitor entered in early fourth-quarter 2023.

INTERNATIONAL PHARMACEUTICALS SEGMENT

Third-quarter 2023 International Pharmaceuticals segment revenues were $19 million, essentially unchanged compared to $18 million during third-quarter 2022.

FINANCIAL EXPECTATIONS

Endo's third-quarter 2023 adjusted financial results exceeded the expectations assumed in the low end of the prior outlook for the full-year ending December 31, 2023, primarily driven by higher revenue from dexlansoprazole delayed release capsules due to fewer than expected competitors, partially offset by lower varenicline revenues due to increased competition. Additionally, expected full-year 2023 adjusted financial results reflect lower-than-expected XIAFLEX^® demand and SUPPRELIN^® LA net selling price as well as better than expected Sterile Injectables performance.

The financial expectations reflect adjusted results. All financial expectations provided by Endo are forward-looking, and actual results may differ materially from such expectations, as further discussed below under the heading "Cautionary Note Regarding Forward-Looking Statements."

                                                                             Full-Year 2023 Adjusted
                                                                                     Results



     
                ($ in millions)                              Prior Outlook                              Current
                                                                                                            Outlook



     Total Revenues, Net                                 
       $1,975 - $2,035                        ~$1,990



     EBITDA                                                
         $750 - $790                         ~$750



     
                Assumptions:



     Segment Revenues:



     Branded Pharmaceuticals                                 ~$870                                   ~$845



     Sterile Injectables                                     ~$430                                   ~$440



     Generic Pharmaceuticals                               
         $610 - $670                         ~$635



     International Pharmaceuticals                           ~$65                                     ~$70



     Gross Margin as a Percentage of Total Revenues, Net                ~67%                                 ~66%



     Operating Expenses                                      ~$635                                   ~$625

CASH, CASH FLOW AND OTHER UPDATES

As of September 30, 2023, the Company had approximately $823 million in unrestricted cash and cash equivalents. Third-quarter 2023 net cash provided by operating activities was approximately $131 million compared to approximately $92 million net cash provided by operating activities during third-quarter 2022. This increase was primarily attributable to a decrease in cash interest payments and certain one-time payments made in third-quarter 2022 but not in third-quarter 2023, partially offset by a decrease in adjusted EBITDA.

Amitiza^® is a registered trademark of a Mallinckrodt company.
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 Endo's unaudited Total revenues, net for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):

                                                       Three Months Ended September
                                                           30,                      Percent                       Nine Months Ended September 30,               Percent

                                                                                      Growth                                                      Growth


                                                  2023          2022                            2023            2022



     
                Branded Pharmaceuticals:



     
                Specialty Products:



       XIAFLEX(R)                            $113,053      $104,014                        9 %        $327,254              $324,376                       1 %



       SUPPRELIN(R) LA                         21,590        31,283                     (31) %          73,390                84,852                    (14) %



       Other Specialty (1)                     15,749        11,033                       43 %          57,282                50,023                      15 %



     Total Specialty Products                $150,392      $146,330                        3 %        $457,926              $459,251                       - %



     
                Established Products:



       PERCOCET(R)                            $26,290       $25,052                        5 %         $78,791               $77,483                       2 %



       TESTOPEL(R)                              9,610         9,430                        2 %          32,199                28,331                      14 %



       Other Established (2)                   17,076        22,689                     (25) %          44,402                62,249                    (29) %



     Total Established Products               $52,976       $57,171                      (7) %        $155,392              $168,063                     (8) %



     Total Branded Pharmaceuticals (3)       $203,368      $203,501                        - %       $613,318              $627,314                     (2) %



     
                Sterile Injectables:



       ADRENALIN(R)                           $22,873       $24,917                      (8) %         $75,581               $85,514                    (12) %



       VASOSTRICT(R)                           20,827        33,697                     (38) %          71,197               225,217                    (68) %



       Other Sterile Injectables (4)           51,681        60,079                     (14) %         186,886               171,161                       9 %



     Total Sterile Injectables (3)            $95,381      $118,693                     (20) %        $333,664              $481,892                    (31) %



     Total Generic Pharmaceuticals (5)       $134,382      $201,435                     (33) %        $511,141              $590,756                    (13) %



     Total International Pharmaceuticals (6)  $18,534       $18,061                        3 %         $55,661               $63,101                    (12) %



     Total revenues, net                     $451,665      $541,690                     (17) %      $1,513,784            $1,763,063                    (14) %

__________


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



     (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 three or nine months ended September 30,
              2023 and/or any product having revenues in excess of $25 million during any completed quarterly period in 2023 or 2022.



     (4)   Products included within Other Sterile Injectables include, but are not limited to, APLISOL(R). No individual product within Other Sterile Injectables has
              exceeded 5% of consolidated total revenues for the periods presented.



     (5)   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. Varenicline tablets (Endo's generic version of
              Pfizer Inc.'s Chantix(R)), which launched in September 2021, made up 10% for the nine months ended September 30, 2023, and 15% and 13% for the three and nine
              months ended September 30, 2022, respectively, of consolidated total revenues. During the three and nine months ended September 30, 2023, Dexlansoprazole
              delayed release capsules (Endo's generic version of Takeda Pharmaceuticals USA, Inc.'s Dexilant(R)), which launched in November 2022, made up 7% and 6%,
              respectively, of consolidated total revenues. During the three months ended September 30, 2022, lubiprostone capsules (the authorized generic of Mallinckrodt
              plc's Amitiza(R)), which launched in January 2021, made up 5% of consolidated total revenues. No other individual product within this segment has exceeded 5% of
              consolidated total revenues for the periods presented.



     (6)   The International Pharmaceuticals segment, which accounted for less than 5% of consolidated total revenues for each of the periods presented, includes a variety
              of specialty pharmaceutical products sold outside the U.S., primarily in Canada through Endo's operating company Paladin Labs Inc.

The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and nine months ended September 30, 2023 and 2022 (in thousands, except per share data):

                                                                           Three Months Ended September                        Nine Months Ended September
                                                                               30,                                30,


                                                                      2023          2022                  2023            2022



     TOTAL REVENUES, NET                                         $451,665      $541,690            $1,513,784      $1,763,063



     COSTS AND EXPENSES:



     Cost of revenues                                             230,286       261,232               696,880         798,233



     Selling, general and administrative                          138,772       192,221               427,294         600,212



     Research and development                                      31,582        31,885                87,322          97,803



     Acquired in-process research and development                                  800                               68,700



     Litigation-related and other contingencies, net               11,104       419,376                54,317         444,738



     Asset impairment charges                                                  150,200                   146       1,951,216



     Acquisition-related and integration items, net                 1,062       (1,399)                1,824           (951)



     Interest expense, net                                             10        74,753                   239         349,486



     Reorganization items, net                                     57,960       124,212               227,579         124,212



     Other income, net                                            (2,217)      (3,998)              (2,163)       (22,147)



     (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX $(16,894)   $(707,592)              $20,346    $(2,648,439)



     INCOME TAX EXPENSE                                            11,042        10,680                27,094          16,016



     LOSS FROM CONTINUING OPERATIONS                            $(27,936)   $(718,272)             $(6,748)   $(2,664,455)



     DISCONTINUED OPERATIONS, NET OF TAX                            (547)      (3,897)              (1,576)       (15,115)



     NET LOSS                                                   $(28,483)   $(722,169)             $(8,324)   $(2,679,570)



     NET (LOSS) INCOME PER SHARE-BASIC:



     Continuing operations                                        $(0.12)      $(3.05)              $(0.03)       $(11.35)



     Discontinued operations                                                    (0.02)               (0.01)         (0.07)



     Basic                                                        $(0.12)      $(3.07)              $(0.04)       $(11.42)



     NET (LOSS) INCOME PER SHARE-DILUTED:



     Continuing operations                                        $(0.12)      $(3.05)              $(0.03)       $(11.35)



     Discontinued operations                                                    (0.02)               (0.01)         (0.07)



     Diluted                                                      $(0.12)      $(3.07)              $(0.04)       $(11.42)



     WEIGHTED AVERAGE SHARES:



     Basic                                                        235,220       235,160               235,219         234,719



     Diluted                                                      235,220       235,160               235,219         234,719

The following table presents unaudited Condensed Consolidated Balance Sheet data at September 30, 2023 and December 31, 2022 (in thousands):

                                                                                 September 30, December 31,

                                                                                          2023          2022



     
                ASSETS



     CURRENT ASSETS:



     Cash and cash equivalents                                                       $823,305    $1,018,883



     Restricted cash and cash equivalents                                             167,939       145,358



     Accounts receivable                                                              387,485       493,988



     Inventories, net                                                                 273,831       274,499



     Other current assets                                                             100,716       144,040



       Total current assets                                                        $1,753,276    $2,076,768



     TOTAL NON-CURRENT ASSETS                                                       3,502,519     3,681,169



     TOTAL ASSETS                                                                  $5,255,795    $5,757,937



     
                LIABILITIES AND SHAREHOLDERS' DEFICIT



     CURRENT LIABILITIES:



     Accounts payable and accrued expenses, including legal settlement accruals      $562,628      $687,183



     Other current liabilities                                                          2,004         2,444



       Total current liabilities                                                     $564,632      $689,627



     OTHER LIABILITIES                                                                 63,786        61,700



     LIABILITIES SUBJECT TO COMPROMISE                                              8,786,571     9,168,782



     SHAREHOLDERS' DEFICIT                                                        (4,159,194)  (4,162,172)



     TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                                   $5,255,795    $5,757,937

The following table presents unaudited Condensed Consolidated Statement of Cash Flow data for the nine months ended September 30, 2023 and 2022 (in thousands):

                                                                                                          Nine Months Ended September
                                                                                                              30,


                                                                                                    2023          2022



     OPERATING ACTIVITIES:



     Net loss                                                                                  $(8,324) $(2,679,570)



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



       Depreciation and amortization                                                            232,090       302,338



       Asset impairment charges                                                                     146     1,951,216



       Non-cash reorganization items, net                                                                     89,197



       Other, including cash payments to claimants from Qualified Settlement Funds               96,129       496,430



       Net cash provided by operating activities                                               $320,041      $159,611



     INVESTING ACTIVITIES:



     Capital expenditures, excluding capitalized interest                                     $(74,245)    $(77,865)



     Acquisitions, including in-process research and development, net of cash and restricted                (89,520)


     cash acquired



     Proceeds from sale of business and other assets                                              3,538        22,378



     Other                                                                                       32,560        10,461



       Net cash used in investing activities                                                  $(38,147)   $(134,546)



     FINANCING ACTIVITIES:



     Payments on borrowings, including certain adequate protection payments, net (a)         $(450,518)   $(363,486)



     Other                                                                                      (4,353)      (3,837)



       Net cash used in financing activities                                                 $(454,871)   $(367,323)



     Effect of foreign exchange rate                                                               (20)      (4,674)



     NET DECREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND                             $(172,997)   $(346,932)


     RESTRICTED CASH EQUIVALENTS



     CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH                              1,249,241     1,631,310


     EQUIVALENTS, BEGINNING OF PERIOD



     CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH                             $1,076,244    $1,284,378


     EQUIVALENTS, END OF PERIOD

__________

     (a) Beginning during the third quarter of 2022, Endo became obligated to make certain adequate protection payments as a result of the Chapter 11 proceedings, which
          are currently being accounted for as a reduction of the carrying amount of the related debt instruments and presented as financing cash outflows. Some or all of
          the adequate protection payments may later be recharacterized as interest expense and/or as operating cash outflows depending upon certain developments in the
          Chapter 11 proceedings, which could result in increases in interest expense and/or decreases in operating cash flows in future periods that may be material.

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 (GAAP) to Adjusted EBITDA (non-GAAP) for the three and nine months ended September 30, 2023 and 2022 (in thousands):

                                                                            Three Months Ended September                       Nine Months Ended September
                                                                                30,                               30,


                                                                       2023         2022                  2023            2022



     Net loss (GAAP)                                             $(28,483)  $(722,169)             $(8,324)   $(2,679,570)



     Income tax expense                                             11,042       10,680                27,094          16,016



     Interest expense, net                                              10       74,753                   239         349,486



     Depreciation and amortization (1)                              77,087       96,114               232,090         298,514



     EBITDA (non-GAAP)                                             $59,656   $(540,622)             $251,099    $(2,015,554)



     Amounts related to continuity and separation benefits,         10,764       44,029                36,718         139,025


     cost reductions and strategic review initiatives (2)



     Certain litigation-related and other contingencies, net (3)    11,104      419,376                54,317         444,738



     Certain legal costs (4)                                         1,514        8,052                 5,187          31,322



     Asset impairment charges (5)                                              150,200                   146       1,951,216



     Fair value of contingent consideration (6)                      1,062      (1,399)                1,824           (951)



     Share-based compensation (1)                                                5,371                 2,091          13,021



     Other income, net (7)                                         (2,217)     (3,998)              (2,163)       (22,147)



     Reorganization items, net (8)                                  57,960      124,212               227,579         124,212



     Other (9)                                                       2,660        1,698                17,123           1,951



     Discontinued operations, net of tax (10)                          547        3,897                 1,576          15,115



     Adjusted EBITDA (non-GAAP) (13)                              $143,050     $210,816              $595,497        $681,948

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

The following table provides a reconciliation of the Company's Loss from continuing operations (GAAP) to Adjusted income from continuing operations (non-GAAP) for the three and nine months ended September 30, 2023 and 2022 (in thousands):

                                                                          Three Months Ended September                       Nine Months Ended September
                                                                              30,                               30,


                                                                     2023         2022                  2023            2022



     Loss from continuing operations (GAAP)                    $(27,936)  $(718,272)             $(6,748)   $(2,664,455)



     Non-GAAP adjustments:



       Amortization of intangible assets (11)                     64,429       84,042               194,110         261,844



       Amounts related to continuity and separation benefits,     10,764       44,029                36,718         139,025


       cost reductions and strategic review initiatives (2)



       Certain litigation-related and other contingencies, net    11,104      419,376                54,317         444,738


        (3)



       Certain legal costs (4)                                     1,514        8,052                 5,187          31,322



       Asset impairment charges (5)                                          150,200                   146       1,951,216



       Fair value of contingent consideration (6)                  1,062      (1,399)                1,824           (951)



       Reorganization items, net (8)                              57,960      124,212               227,579         124,212



       Other (9)                                                     456      (5,111)               17,126        (22,958)



       Tax adjustments (12)                                       12,088        6,729                25,215          10,336



     Adjusted income from continuing operations (non-GAAP)      $131,441     $111,858              $555,474        $274,329


     (13)

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 nine months ended September 30, 2023 and 2022 (in thousands, except per share data):

                                                                                  
      
           Three Months Ended September 30, 2023


                                Total   Cost of   Gross       Gross       Total        Operating                    Operating      Operating        Other non-           (Loss)         Income tax       Effective           (Loss)            Discontinued         Net (loss)        Diluted net

                              revenues, revenues  margin   margin %    operating       expense                    income from      margin %       operating         income from         expense
                                                                                                                                                                                         (benefit)       tax rate         income from          operations,            income             (loss)

                                 net                                    expenses           to                      continuing                         expense         continuing                                          continuing            net of tax                            income per

                                                                                        revenue                    operations                       (income),         operations                                          operations                                                  share from

                                                                                           %                                                            net              before                                                                                                       continuing

                                                                                                                                                                      income tax                                                                                                      operations

                                                                                                                                                                                                                                                                                             (14)



     Reported (GAAP)          $451,665  $230,286 $221,379      49.0 %      $182,520          40.4 %                       $38,859          8.6 %           $55,753           $(16,894)          $11,042         (65.4) %          $(27,936)                 $(547)         $(28,483)            $(0.12)



     Items impacting


     comparability:



     Amortization of                   (64,429)  64,429                                                                 64,429                                              64,429                                               64,429                                    64,429


     intangible assets (11)



     Amounts related to                 (1,342)   1,342                   (9,422)                                       10,764                                              10,764                                               10,764                                    10,764


     continuity and


     separation benefits,


     cost reductions and


     strategic review


     initiatives (2)



     Certain litigation-                                                (11,104)                                       11,104                                              11,104                                               11,104                                    11,104


     related and other


     contingencies, net (3)


      Certain legal costs (4)                                             (1,514)                                        1,514                                               1,514                                                1,514                                     1,514



     Fair value of                                                       (1,062)                                        1,062                                               1,062                                                1,062                                     1,062


     contingent


     consideration (6)



     Reorganization items,                                                                                                                           (57,960)             57,960                                               57,960                                    57,960


     net (8)



     Other (9)                            (125)     125                   (2,534)                                        2,659                            2,203                 456                                                  456                                       456



     Tax adjustments (12)                                                                                                                                                                (12,088)                             12,088                                    12,088



     Discontinued                                                                                                                                                                                                                                       547                547


     operations, net of tax


     (10)


      After considering items  $451,665  $164,390 $287,275      63.6 %      $156,884          34.7 %                      $130,391         28.9 %              $(4)           $130,395          $(1,046)         (0.8) %           $131,441  
          $             -          $131,441               $0.56


     (non-GAAP) (13)

                                                                                   
     
            Three Months Ended September 30, 2022


                                Total   Cost of   Gross       Gross       Total        Operating                    Operating       Operating        Other non-           (Loss)         Income tax          Effective              (Loss)               Discontinued          Net (loss)            Diluted
                                                                                                                                                                                                                                                                                                       net

                              revenues, revenues  margin   margin %    operating       expense                       (loss)         margin %       operating         income from         expense           tax rate            income from             operations,             income              (loss)

                                 net                                    expenses           to                      income from                        expense,         continuing                                                continuing               net of tax                               income per

                                                                                        revenue                    continuing                            net           operations                                                operations                                                        share from

                                                                                           %                       operations                                             before                                                                                                                   continuing

                                                                                                                                                                       income tax                                                                                                                  operations

                                                                                                                                                                                                                                                                                                         (14)



     Reported (GAAP)          $541,690  $261,232 $280,458      51.8 %      $793,083         146.4 %                    $(512,625)       (94.6) %          $194,967          $(707,592)          $10,680             (1.5) %            $(718,272)                  $(3,897)         $(722,169)             $(3.05)



     Items impacting


     comparability:



     Amortization of                   (84,042)  84,042                                                                 84,042                                               84,042                                                     84,042                                        84,042


     intangible assets (11)



     Amounts related to                 (2,809)   2,809                  (41,220)                                       44,029                                               44,029                                                     44,029                                        44,029


     continuity and


     separation benefits,


     cost reductions and


     strategic review


     initiatives (2)



     Certain litigation-                                               (419,376)                                      419,376                                              419,376                                                    419,376                                       419,376


     related and other


     contingencies, net (3)


      Certain legal costs (4)                                             (8,052)                                        8,052                                                8,052                                                      8,052                                         8,052



     Asset impairment                                                  (150,200)                                      150,200                                              150,200                                                    150,200                                       150,200


     charges (5)



     Fair value of                                                         1,399                                       (1,399)                                             (1,399)                                                   (1,399)                                      (1,399)


     contingent


     consideration (6)



     Reorganization items,                                                                                                                           (124,212)            124,212                                                    124,212                                       124,212


     net (8)



     Other (9)                            (125)     125                   (1,570)                                        1,695                             6,806             (5,111)                                                   (5,111)                                      (5,111)



     Tax adjustments (12)                                                                                                                                                                  (6,729)                                    6,729                                         6,729



     Discontinued                                                                                                                                                                                                                                               3,897               3,897


     operations, net of tax


     (10)


      After considering items  $541,690  $174,256 $367,434      67.8 %      $174,064          32.1 %                      $193,370          35.7 %           $77,561            $115,809            $3,951               3.4 %              $111,858 
              $            -            $111,858                $0.47


     (non-GAAP) (13)

                                                                                       
     
            Nine Months Ended September 30, 2023


                                 Total    Cost of     Gross       Gross       Total        Operating                    Operating      Operating        Other non-        Income from       Income tax          Effective              (Loss)               Discontinued          Net (loss)         Diluted net

                               revenues,  revenues    margin   margin %    operating       expense                    income from      margin %       operating         continuing          expense           tax rate            income from             operations,             income              (loss)

                                  net                                       expenses           to                      continuing                         expense         operations                                                continuing               net of tax                              income per

                                                                                            revenue                    operations                       (income),            before                                                 operations                                                       share from

                                                                                               %                                                            net           income tax                                                                                                                 continuing

                                                                                                                                                                                                                                                                                                     operations

                                                                                                                                                                                                                                                                                                            (14)



     Reported (GAAP)         $1,513,784   $696,880   $816,904      54.0 %      $570,903          37.7 %                      $246,001         16.3 %          $225,655             $20,346           $27,094             133.2 %              $(6,748)                  $(1,576)           $(8,324)             $(0.03)



     Items impacting


     comparability:



     Amortization of                    (194,110)   194,110                                                                194,110                                             194,110                                                    194,110                                       194,110


     intangible assets (11)



     Amounts related to                   (3,812)     3,812                  (32,906)                                       36,718                                              36,718                                                     36,718                                        36,718


     continuity and


     separation benefits,


     cost reductions and


     strategic review


     initiatives (2)



     Certain litigation-                                                    (54,317)                                       54,317                                              54,317                                                     54,317                                        54,317


     related and other


     contingencies, net (3)


      Certain legal costs (4)                                                 (5,187)                                        5,187                                               5,187                                                      5,187                                         5,187



     Asset impairment                                                          (146)                                          146                                                 146                                                        146                                           146


     charges (5)



     Fair value of                                                           (1,824)                                        1,824                                               1,824                                                      1,824                                         1,824


     contingent


     consideration (6)



     Reorganization items,                                                                                                                              (227,579)            227,579                                                    227,579                                       227,579


     net (8)



     Other (9)                              (903)       903                  (16,220)                                       17,123                              (3)             17,126                                                     17,126                                        17,126



     Tax adjustments (12)                                                                                                                                                                    (25,215)                                   25,215                                        25,215



     Discontinued                                                                                                                                                                                                                                                  1,576               1,576


     operations, net of tax


     (10)


      After considering items $1,513,784   $498,055 $1,015,729      67.1 %      $460,303          30.4 %                      $555,426         36.7 %          $(1,927)           $557,353            $1,879               0.3 %              $555,474  
             $             -           $555,474                $2.36


     (non-GAAP) (13)

                                                                                        
     
             Nine Months Ended September 30, 2022


                                 Total    Cost of     Gross       Gross        Total         Operating                    Operating      Operating       Other non-          (Loss)         Income tax         Effective             (Loss)              Discontinued          Net (loss)             Diluted
                                                                                                                                                                                                                                                                                                        net

                               revenues,  revenues    margin   margin %     operating       expense to                     (loss)
                                                                                                                             income       margin %      operating        income from         expense          tax rate           income from            operations,             income               (loss)

                                  net                                        expenses         revenue %                     from                         expense,        continuing                                              continuing              net of tax                                income per

                                                                                                                          continuing                         net          operations                                              operations                                                        share from

                                                                                                                          operations                                         before                                                                                                                 continuing

                                                                                                                                                                          income tax                                                                                                                operations

                                                                                                                                                                                                                                                                                                          (14)



     Reported (GAAP)         $1,763,063   $798,233   $964,830      54.7 %     $3,161,718           179.3 %                 $(2,196,888)     (124.6) %         $451,551       $(2,648,439)          $16,016            (0.6) %         $(2,664,455)                $(15,115)       $(2,679,570)             $(11.35)



     Items impacting


     comparability:



     Amortization of                    (261,844)   261,844                                                                  261,844                                           261,844                                                  261,844                                      261,844


     intangible assets (11)



     Amounts related to                  (23,653)    23,653                  (115,372)                                       139,025                                           139,025                                                  139,025                                      139,025


     continuity and


     separation benefits,


     cost reductions and


     strategic review


     initiatives (2)



     Certain litigation-                                                    (444,738)                                       444,738                                           444,738                                                  444,738                                      444,738


     related and other


     contingencies, net (3)


      Certain legal costs (4)                                                 (31,322)                                        31,322                                            31,322                                                   31,322                                       31,322



     Asset impairment                                                     (1,951,216)                                     1,951,216                                         1,951,216                                                1,951,216                                    1,951,216


     charges (5)



     Fair value of                                                                951                                          (951)                                            (951)                                                   (951)                                       (951)


     contingent


     consideration (6)



     Reorganization items,                                                                                                                               (124,212)           124,212                                                  124,212                                      124,212


     net (8)



     Other (9)                              (375)       375                    (1,570)                                         1,945                          24,903           (22,958)                                                (22,958)                                    (22,958)



     Tax adjustments (12)                                                                                                                                                                    (10,336)                                 10,336                                       10,336



     Discontinued                                                                                                                                                                                                                                              15,115              15,115


     operations,


     net of tax (10)


      After considering items $1,763,063   $512,361 $1,250,702      70.9 %       $618,451            35.1 %                     $632,251         35.9 %         $352,242           $280,009            $5,680              2.0 %             $274,329 
             $            -            $274,329                 $1.16


     (non-GAAP) (13)

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 nine months ended September 30, 2023 and 2022 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 continuity and separation benefits, cost reductions and strategic review initiatives.





     (2) Adjustments for amounts related to continuity and separation benefits, cost reductions and strategic review initiatives included the following (in thousands):

                                                             
     
              Three Months Ended September 30,


                                                                   2023                                                     2022


                                                    Cost of      Operating                                 Cost of
                                                    revenues

                                                                                                                 revenues   Operating

                                                                 expenses                                                   expenses



     Continuity and separation benefits              $1,000         $9,424                                          $2,401      $11,662



     Inventory adjustments                              342            (2)                                            408



     Other, including strategic review initiatives                                                                            29,558



     Total                                           $1,342         $9,422                                          $2,809      $41,220

                                                             
     
        Nine Months Ended September 30,


                                                                   2023                                        2022


                                                    Cost of      Operating                          Cost of
                                                    revenues                                        revenues   Operating

                                                                 expenses                                      expenses



     Continuity and separation benefits              $3,140        $33,189                            $12,499      $45,635



     Accelerated depreciation                                                                         2,164        1,660



     Inventory adjustments                               81          (324)                             1,435        2,461



     Other, including strategic review initiatives      591             41                              7,555       65,616



     Total                                           $3,812        $32,906                            $23,653     $115,372

             The amounts in the tables above include adjustments related to previously announced restructuring activities, certain continuity and transitional compensation
              arrangements, certain other cost reduction initiatives and certain strategic review initiatives.





     (3) 
     To exclude adjustments to accruals for litigation-related settlement charges.





     (4) 
     To exclude amounts related to opioid-related legal expenses.





     (5) 
     Adjustments for asset impairment charges included in the following (in thousands):

                                                           Three Months Ended September         Nine Months Ended September
                                                                         30,                                   30,


                                                                2023                   2022               2023                  2022



     Goodwill impairment charges                      
     $         -               $97,000  
     $             -           $1,845,000



     Other intangible asset impairment charges                                     53,200                                 103,153



     Property, plant and equipment impairment charges                                                   146                 3,063



     Total                                            
     $         -              $150,200               $146            $1,951,216


     (6)   To exclude the impact of changes in the fair value of contingent consideration liabilities resulting from changes to estimates regarding 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.





     (7) 
     To exclude Other income, net per the Condensed Consolidated Statements of Operations.





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





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

                                                          
     
     Three Months Ended September 30,


                                                               2023                                                        2022


                                  Cost of      Operating      Other non-                       Cost of
                                  revenues                                                     revenues       Operating       Other non-

                                               expenses       operating                                       expenses        operating

                                                               expenses                                                        expenses



     Foreign currency impact 
     $        - 
     $         -        $(2,203)       
              $           -   
     $         -         $(6,220)


     related to the re-


     measurement of


     intercompany debt


     instruments



     Other miscellaneous              125          2,534                                             125            1,570             (586)



     Total                           $125         $2,534         $(2,203)                           $125           $1,570          $(6,806)

                                                          
     
     Nine Months Ended September 30,


                                                               2023                                                         2022


                                  Cost of      Operating      Other non-                      Cost of
                                  revenues                                                    revenues        Operating        Other non-

                                               expenses       operating                                       expenses         operating

                                                               expenses                                                         expenses



     Foreign currency impact 
     $        - 
     $         -              $3        
              $          -   
     $          -          $(7,114)


     related to the re-


     measurement of


     intercompany debt


     instruments



     Other miscellaneous              903         16,220                                            375             1,570           (17,789)



     Total                           $903        $16,220               $3                           $375            $1,570          $(24,903)

              The "Other" row included in the reconciliations of Net loss (GAAP) to Adjusted EBITDA (non-GAAP) primarily relates to the items enumerated in the foregoing
               "Cost of revenues" and "Operating expenses" columns.





     (10) 
     To exclude the results of the businesses reported as discontinued operations, net of tax.





     (11) 
     To exclude amortization expense related to intangible assets.





     (12)   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 the Company operates. Adjusted income taxes include current and
               deferred income tax expense commensurate with the non-GAAP measure of profitability.





     (13)   Amounts of Acquired in-process research and development charges included within these non-GAAP financial measures are set forth in the table below (in
               thousands):

                                                               Three Months Ended September         Nine Months Ended September
                                                                             30,                                   30,


                                                                    2023                   2022               2023                  2022



     Acquired in-process research and development charges 
     $         -                  $800  
     $             -              $68,700


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

                       Three Months Ended September                    Nine Months Ended September
                           30,                             30,


                  2023          2022                  2023        2022


     GAAP      235,220       235,160               235,219     234,719


     Non-
      GAAP
      Adjusted 235,220       236,183               235,515     236,372

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

Endo (OTC: ENDPQ) 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 passionate team members around the globe collaborating to bring 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
Certain information in this press release may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation, including, but not limited to, statements with respect to financial guidance, expectations or outlook, the restructuring support agreement and the sale transaction, the Chapter 11 proceedings, and any other statements that refer to Endo's expected, estimated or anticipated future results or that do not relate solely to historical facts. Statements including words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "plan," "will," "may," "look forward," "outlook," "guidance," "future," "potential" or similar expressions are forward-looking statements. All forward-looking statements in this communication reflect the Company's current views as of the date of this communication about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to it and on assumptions it has made. Actual results may differ materially and adversely from current expectations based on a number of factors, including, among other things, the following: the timing, impact or results of any pending or future litigation (including any appeals or injunctions), investigations, proceedings or claims, including opioid, tax and antitrust related matters; actual or contingent liabilities; settlement discussions or negotiations; the Company's liquidity, financial performance, cash position and operations; the Company's strategy; risks and uncertainties associated with Chapter 11 proceedings; the negative impacts on the Company's businesses as a result of filing for and operating under Chapter 11 protection; the time, terms and ability to confirm a sale of the Company's businesses under Section 363 of the U.S. Bankruptcy Code; the adequacy of the capital resources of the Company's businesses and the difficulty in forecasting the liquidity requirements of the operations of the Company's businesses; the unpredictability of the Company's financial results while in Chapter 11 proceedings; the Company's ability to discharge claims in Chapter 11 proceedings; negotiations with the holders of the Company's indebtedness and its trade creditors and other significant creditors; risks and uncertainties with performing under the terms of the restructuring support agreement and any other arrangement with lenders or creditors while in Chapter 11 proceedings; the Company's ability to conduct business as usual; the Company's ability to continue to serve customers, suppliers and other business partners at the high level of service and performance they have come to expect from the Company; the Company's ability to continue to pay employees, suppliers and vendors; the ability to control costs during Chapter 11 proceedings; adverse litigation; the risk that the Company's Chapter 11 Cases may be converted to cases under Chapter 7 of the Bankruptcy Code; the Company's ability to secure operating capital; the Company's ability to take advantage of opportunities to acquire assets with upside potential; the Company's ability to execute on its strategic plan to pursue, evaluate and close an asset sale of the Company's businesses pursuant to Section 363 of the U.S. Bankruptcy Code; the impact of competition and the timing of competitive entrants; Endo's ability to satisfy judgments or settlements or pursue appeals including bonding requirements; Endo's ability to adjust to changing market conditions; Endo's ability to attract and retain key personnel; supply chain interruptions or difficulties; changes in competitive or market conditions; changes in legislation or regulatory developments; Endo's ability to obtain and maintain adequate protection for Endo's 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; Endo's ability to integrate any newly acquired products into Endo's portfolio and achieve any financial or commercial expectations; the impact that known and unknown side effects may have on market perception and consumer preference for Endo's products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of any strategic initiatives; 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, develop its product pipeline and continue to develop the market for XIAFLEX^® and other branded and unbranded 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 consumer confidence and debt levels, inflation, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions 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 risk factors, including those referenced above, 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 at relations.investor@endo.com.

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