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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Endo Pharmaceuticals Holdings Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 29, 2011 01:24PM
Endo Pharmaceuticals Holdings Inc. (ENDP) filed Quarterly Report for the period ended 2011-03-31. Highlight of Business Operations:Revenues. Revenues for the three months ended March 31, 2011 increased 54% to $560.0 million from $364.4 million in the comparable 2010 period. This increase in revenues is primarily driven by organic growth in our branded pharmaceuticals product portfolio, including Lidoderm®, Opana® ER, and Voltaren® Gel, as well as incremental revenues from our 2010 acquisitions, including $50.1 million in revenues from HealthTronics and $106.4 million in revenues from Qualitest, which we acquired during the second and fourth quarters of 2010, respectively. For the three months ended March 31, 2011, sales growth was essentially volume driven, while price fluctuations had no material impact. Generics. Net sales of our generic products for the three months ended March 31, 2011 increased by $108.5 million, or 419% from the comparable 2010 period. This increase was largely attributable to our acquisition of Qualitest on November 30, 2010, which contributed $106.4 million of net sales of generic products during the three months ended March 31, 2011. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended March 31, 2011 increased to $159.4 million from $133.3 million in the comparable 2010 period. The increase in Selling, general and administrative expenses for the three months ended March 31, 2011 compared to 2010 is primarily attributable to increased expenses as a resulting from our second half 2010 acquisitions of $21.6 million as well as $3.5 million of certain costs incurred in connection with continued efforts to enhance the cost structure of the Company. Research and Development Expenses. Research and development expenses for the three months ended March 31, 2011 increased to $42.1 million from $29.2 million in the comparable 2010 period. This increase was primarily driven by the addition of Qualitest’s research and development portfolio to our existing programs, the progress of our branded pharmaceutical portfolio’s development, and the expansion of our efforts in the pharmaceutical discovery and device research and development areas. Additionally, during the three months ended March 31, 2011, we incurred $11.0 million in expense related to milestones compared to $3.0 million in the comparable 2010 period. Acquisition Related Items. Acquisition-related items for the three months ended March 31, 2011 were $6.1 million in expense compared to $1.5 million in expense in the comparable 2010 period. Acquisition-related items for the three months ended March 31, 2011 primarily consisted of transaction fees of $6.8 million, including legal, separation, integration, and other expenses for our recent and pending acquisitions, partially offset by favorable changes in the fair value of the acquisition-related contingent consideration of $0.7 million, which was recorded as a gain. The change in the fair value of the acquisition-related contingent consideration primarily reflects changes of our present value assumptions associated with our valuation models. This compares to $1.5 million in expense in the comparable 2010 period resulting from changes in the fair value of the acquisition-related contingent consideration and other miscellaneous integration costs associated with our 2009 acquisition of Indevus. 2011 Outlook. We continue to estimate that our 2011 total revenues will be between $2.35 billion and $2.45 billion. Our estimate is based on the continued growth of both our generic and branded product portfolios, driven by ongoing prescription demand for our key inline products, including Lidoderm®, Opana® ER, and Voltaren® Gel, and by new revenues from launching FortestaTM Gel as well as the full-year effect of our acquisitions of Qualitest and HealthTronics. Cost of revenues as a percent of total revenues is expected to increase when compared to 2010. This increase is expected due to a full year of amortization expense associated with the intangible assets acquired with Qualitest and HealthTronics as well as a full year’s change in mix of revenues as a result of the Qualitest, Penwest, and HealthTronics acquisitions. Selling, general and administrative expenses, as a percentage of revenu
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