Endo Health to Cut Jobs, To Explore Strategic Options (ENDP)

Endo Health Solutions Inc. (NASDAQ: ENDP) said on Wednesday that it will slash its global staff by 15% and look for strategic alternatives to sale part of its business (HealthTronics), in order to focus on its core businesses. The Malvern, Pennsylvania-based healthcare solutions provider also downwardly revised its full-year guidance. Endo Health now expects non-GAAP (adjusted) earnings of $4.10 to $4.40 a share on revenue of $2.65 billion to $2.8 billion down from its previous forecast for earnings of $4.40 to $4.70 a share on revenue of $2.8 billion to $2.95 billion. The Company said on Wednesday that it intends to save $325 million in annual operating expenses by cutting workforce, redeploying resources in low-risk and high -return research and development projects (generics) and by streamlining general and administrative expenses. Endo Health said that around $150 million will be saved in this year alone. The Company is expecting to book a onetime implementation charge of around $60 million in 2013; most of the charge will linked to severance payments. Meanwhile the Company also said that it was considering strategic options for its HealthTronics business. This business segment offers lithotripsy services, prostate treatment services, anatomical pathology services, medical products manufacturing, sales and maintenance, and information technology solutions. The Company said it wants to enhance its planning and implementation at its core business areas , which include: Qualitest business, Endo Pharmaceuticals and AMS (American Medical Systems). Speaking to analysts in a conference call, Chief Executive, Rajiv De Silva, said in a statement, “We believe these actions will leave Endo with the right cost structure, leadership and execution capabilities to drive sustainable cash flow and earnings growth over time.” Just last month, the Company reported that it swung into fiscal first quarter profit due to favorable comparables (fewer write-downs) and slight improvement in revenue growth which was aided by strong sales of generic medicines, offsetting weakness in other segments.