Emergent BioSolutions Inc. (NYSE: EBS) today reported financial
results for the quarter and year ended December 31, 2023.
"Emergent has a long history of helping protect
people around the world from opioid overdose emergencies and
chemical, biological and radiological threats. This commitment to
public health, together with Emergent's leadership, give me
confidence in the long-term future of the company," said Joe Papa,
President and CEO at Emergent. "Emergent faces some short-term
challenges, which we are addressing head on. At the same time, we
are making decisions and putting strategies in place for Emergent
to add value for customers, patients and investors. Emergent is a
company with a bright future, and I am excited to help lead it
forward."
FINANCIAL HIGHLIGHTS
(1)
Q4 2023 vs.
Q4 2022
($ in
millions, except per share amounts) |
Q4 2023 |
Q4 2022 |
% Change |
Total Revenues |
$ |
276.6 |
|
$ |
330.2 |
|
(16)% |
Net Loss |
$ |
(49.5 |
) |
$ |
(67.0 |
) |
26 |
% |
Net Loss per Diluted
Share |
$ |
(0.95 |
) |
$ |
(1.34 |
) |
29 |
% |
Adjusted Net Income (Loss)
(2) |
$ |
(40.0 |
) |
$ |
5.9 |
|
* |
Adjusted Net Income (Loss) per
Diluted Share (2) |
$ |
(0.77 |
) |
$ |
0.11 |
|
* |
Adjusted EBITDA (2) |
$ |
3.4 |
|
$ |
44.0 |
|
(92)% |
Total Segment Gross Margin %
(2) |
|
31 |
% |
|
32 |
% |
|
Total Segment Adjusted Gross
Margin % (2) |
|
32 |
% |
|
48 |
% |
|
|
|
|
|
* % change is greater than +/-
100% |
|
|
|
Full Year 2023 vs. Full Year 2022
($ in millions, except per share amounts) |
|
2023 |
|
|
2022 |
|
% Change |
Total Revenues |
$ |
1,049.3 |
|
$ |
1,117.5 |
|
(6)% |
Net Loss |
$ |
(760.5 |
) |
$ |
(211.6 |
) |
* |
Net Loss per Diluted
Share |
$ |
(14.85 |
) |
$ |
(4.22 |
) |
* |
Adjusted Net Loss (2) |
$ |
(319.0 |
) |
$ |
(99.7 |
) |
* |
Adjusted Net Loss per Diluted
Share (2) |
$ |
(6.23 |
) |
$ |
(1.98 |
) |
* |
Adjusted EBITDA (2) |
$ |
(22.3 |
) |
$ |
28.8 |
|
* |
Total Segment Gross Margin %
(2) |
|
31 |
% |
|
36 |
% |
|
Total Segment Adjusted Gross
Margin % (2) |
|
33 |
% |
|
41 |
% |
|
|
|
|
|
* % change is greater than +/-
100% |
|
|
|
SELECT Q4 2023
AND FULL YEAR BUSINESS UPDATES
- Launched NARCAN®
Naloxone HCl Nasal Spray 4 mg Over-The-Counter (“OTC NARCAN®”),
broadening our customer base and sales channels to retail
pharmacies and digital commerce websites as well as through
physician-directed or standing order prescriptions at retail
pharmacies, health departments, local law enforcement agencies,
community-based organizations, substance abuse centers and other
federal agencies
- Announced U.S.
Food and Drug Administration (“FDA”) approval of CYFENDUS® (Anthrax
Vaccine Adsorbed, Adjuvanted), previously known as AV7909, a
two-dose anthrax vaccine for post-exposure prophylaxis use
- Awarded a $75
million option to Emergent's existing contract for the acquisition
of the newly approved CYFENDUS®
- Awarded a
10-year contract by the Biomedical Advanced Research and
Development Authority (“BARDA”) for advanced development,
manufacturing scale-up, and procurement of
Ebanga™ (ansuvimab-zykl) product, a treatment for Ebola
- Awarded a $379.6
million U.S. Department of Defense contract for RSDL®
- The FDA closed
out its inspection of the Company’s Camden facility and issued a
“close-out letter” of its Warning Letter issued in August 2022
- Continued
progress on strengthening our fundamentals with key focus on our
Medical Countermeasure (“MCM”) and NARCAN® products
- Implemented
organizational and resource changes resulting in $160 million of
annual savings
- Amended and
extended maturity of our secured credit facility to May 2025
- Divested the
Travel Health business valued at $380 million
FOURTH QUARTER 2023 FINANCIAL
PERFORMANCE (1)
Revenues
Beginning in 2023, the Company revised the
categories used in discussing product/service level revenues. The
new categories are:
-
NARCAN® — comprises contributions from NARCAN®
Nasal Spray
- Other
Commercial Products - comprises contributions from
Vaxchora® and Vivotif®, which we sold to Bavarian Nordic as part of
our travel health business in May 2023
- Anthrax
MCM — comprises potential contributions from CYFENDUS®,
previously known as AV7909, BioThrax®, Anthrasil® and
Raxibacumab
- Smallpox
MCM — comprises potential contributions from ACAM2000®,
VIGIV and TEMBEXA®
- Other
Products — comprises potential contributions from BAT®,
RSDL® and Trobigard®
-
Bioservices — comprises service and lease revenues
from the Bioservices business
|
|
|
|
($ in
millions) |
Q4 2023 |
Q4 2022 |
% Change |
Product sales, net
(3): |
|
|
|
NARCAN® |
$ |
111.0 |
$ |
91.1 |
22 |
% |
Other Commercial Products |
|
— |
|
4.9 |
NM |
Anthrax MCM |
|
111.6 |
|
56.4 |
98 |
% |
Smallpox MCM |
|
11.5 |
|
144.6 |
(92)% |
Other Products |
|
15.0 |
|
8.7 |
72 |
% |
Total Product sales, net |
$ |
249.1 |
$ |
305.7 |
(19)% |
|
|
|
|
Bioservices: |
|
|
|
Services |
$ |
20.6 |
$ |
17.2 |
20 |
% |
Leases |
|
0.2 |
|
0.2 |
— |
% |
Total Bioservices revenues |
$ |
20.8 |
$ |
17.4 |
20 |
% |
|
|
|
|
Contracts and
grants |
$ |
6.7 |
$ |
7.1 |
(6)% |
|
|
|
|
Total revenues |
$ |
276.6 |
$ |
330.2 |
(16)% |
|
|
|
|
NM - Not
Meaningful |
Products Revenue, net
NARCAN®
For Q4 2023, revenues from NARCAN® (naloxone
HCl) Nasal Spray increased $19.9 million, or 22%, as compared
with Q4 2022. The increase was primarily driven by higher OTC
NARCAN® sales to U.S. public interest channels and retailers,
partially offset by a decrease in sales of prescription based
NARCAN® due to the launch of OTC NARCAN® in 2023 and the cessation
of authorized generic NARCAN® sales related to the termination of
the Company’s relationship with Sandoz.
Other Commercial Products
For Q4 2023, revenues from Other Commercial
Products decreased $4.9 million as compared with Q4 2022. The
decrease was driven by no sales of our Vaxchora® and Vivotif®
products during the current year quarter, which we sold to Bavarian
Nordic as part of our travel health business in May
2023.
Anthrax MCM
For Q4 2023, revenues from Anthrax MCM increased
$55.2 million, or 98%, as compared with Q4 2022. The increase
reflects the impact of timing of sales related to CYFENDUS®
(Anthrax Vaccine Adsorbed, Adjuvanted), Anthrasil® (Anthrax Immune
Globulin Intravenous (human)) and BioThrax® (Anthrax Vaccine
Adsorbed). Anthrax vaccine product sales are primarily made under
annual purchase options exercised by the U.S. Government ("USG").
Fluctuations in revenues result from the timing of the exercise of
annual purchase options, the timing and amount of USG purchases,
the availability of governmental funding and timing of Company
delivery of orders that follow.
Smallpox MCM
For Q4 2023, revenues from Smallpox MCM
decreased $133.1 million, or 92%, as compared with Q4 2022.
The decrease was due to no current quarter sales of TEMBEXA® and
timing of VIGIV deliveries. Fluctuations in revenues from Smallpox
MCM result from the timing of the exercise of annual purchase
options in existing procurement contracts, the timing of USG
purchases, the availability of governmental funding and timing of
Company delivery of orders that follow.
Other Products
For Q4 2023, revenues from other product sales
increased $6.3 million, or 72%, as compared with Q4 2022. The
increase was primarily due to higher BAT® product sales, partially
offset by lower sales of RSDL®.
Bioservices Revenues
Services
For Q4 2023, revenues from Bioservices services
increased $3.4 million, or 20%, as compared with Q4 2022. The
increase was primarily driven by resolution of a customer's
outstanding obligation at our Bayview facility and increased
production at our Camden facility, partially offset by a decrease
in production at our Winnipeg facility. In the prior year, there
was a reversal of revenue related to the halt in manufacturing
under the Janssen Agreement.
Leases
For Q4 2023, revenues from Bioservices leases
were consistent with Q4 2022.
Contracts and Grants
For Q4 2023, revenues from contracts and grants
decreased $0.4 million, or 6%, as compared with Q4 2022. The
decrease was primarily attributable to changes in the mix and
timing of various development initiatives.
Operating Expenses
($ in
millions) |
Q4 2023 |
Q4 2022 |
% Change |
Cost of Commercial product sales |
$ |
50.1 |
$ |
40.2 |
25 |
% |
Cost of MCM product sales |
|
97.2 |
|
127.6 |
(24)% |
Cost of Bioservices |
|
37.8 |
|
52.7 |
(28)% |
Goodwill impairment |
|
— |
|
6.7 |
NM |
Research and development
(“R&D”) |
|
29.4 |
|
47.0 |
(37)% |
Selling, general and
administrative (“SG&A”) |
|
89.7 |
|
93.4 |
(4)% |
Amortization of intangible
assets |
|
16.2 |
|
17.9 |
(9)% |
Total operating expenses |
$ |
320.4 |
$ |
385.5 |
(17)% |
|
|
|
|
NM - Not Meaningful |
|
|
|
Cost of Commercial Product Sales
For Q4 2023, cost of Commercial product sales
increased $9.9 million, or 25%, as compared with Q4 2022. The
increase was primarily due to higher sales of OTC NARCAN® and
Branded NARCAN®, partially offset by no sales of Vivotif® and
Vaxchora® or related expenses during the current quarter due to the
sale of our travel health business to Bavarian Nordic in May
2023.
Cost of MCM Product Sales
For Q4 2023, cost of MCM product sales decreased
$30.4 million, or 24%, as compared with Q4 2022. The decrease
was primarily due to lower sales of TEMBEXA® and lower shutdown
costs, partially offset by increases due to higher sales of
CYFENDUS®, Anthrasil® and BioThrax®, inventory write-offs and
additional allocations of cost of goods sold to MCM Products from
Bioservices.
Cost of Bioservices
For Q4 2023, cost of Bioservices decreased
$14.9 million, or 28%, as compared with Q4 2022. The decrease
was primarily due to higher allocations to MCM Product cost of
goods sold and reduced production activities related to the halt in
manufacturing under the Janssen Agreement at our Bayview facility,
coupled with decreases in production at the Company’s Camden and
Winnipeg facilities.
Research and Development Expenses
For Q4 2023, R&D expenses decreased
$17.6 million, or 37%, as compared with Q4 2022. The decrease
was primarily due to the sale of the Company’s development program
for CHIKV VLP to Bavarian Nordic, which was a significant
contributor to prior period R&D expense, as well as a decrease
in funded R&D across various development initiatives and
reduction in related overhead costs driven by headcount reductions,
partially offset by write-offs related to program terminations
during the period and an increase in Ebanga™ and TEMBEXA® funded
R&D.
Selling, General and Administrative Expenses
For Q4 2023, SG&A expenses decreased
$3.7 million, or 4%, as compared with Q4 2022. The decrease
was primarily due to decreases in consulting and contracted
services and decreases in compensation and other employee costs
related to the restructuring initiatives taken during 2023. The
decrease was partially offset by an increase in marketing expenses
related to the launch of OTC NARCAN® and higher professional
services fees related to legal remediation services.
Goodwill Impairment
For Q4 2023, goodwill impairment decreased
$6.7 million as compared with Q4 2022. The decrease was
related to the Q4 2022 $6.7 million non-cash impairment charge
to Goodwill in the Bioservices reporting unit, which reduced the
reporting unit's goodwill balance to zero.
ADDITIONAL FINANCIAL INFORMATION
(1)
Capital Expenditures
($ in
millions) |
Q4 2023 |
Q4 2022 |
% Change |
Capital expenditures |
$ |
11.4 |
|
$ |
23.6 |
|
(52)% |
Less: capital expenditures
reimbursed |
|
— |
|
|
2.5 |
|
NM |
Net capital expenditures |
$ |
11.4 |
|
$ |
21.1 |
|
(46)% |
Capital expenditures as a % of
total revenues |
|
4 |
% |
|
7 |
% |
|
Net capital expenditures as a
% of total revenues |
|
4 |
% |
|
6 |
% |
|
|
|
|
|
NM - Not
Meaningful |
For Q4 2023, capital expenditures decreased largely due to lower
product development activities across the Company’s facilities.
SEGMENT INFORMATION
In the fourth quarter of 2023, we realigned our
reportable operating segments to reflect recent changes in our
internal operating and reporting process. The Company now manages
the business with a focus on three reportable segments: (1) a
Commercial Products segment consisting of our NARCAN® and other
commercial products which were sold as part of our travel health
business in the second quarter of 2023; (2) a MCM Products segment
consisting of the Anthrax - MCM, Smallpox - MCM and Other products
and (3) a services segment (“Services”) consisting of our
Bioservices. The Company evaluates the performance of these
reportable segments based on revenue and segment adjusted gross
margin, which is a non-GAAP financial measure. Segment revenue
includes external customer sales, but does not include
inter-segment services. The Company does not allocate contracts and
grants, R&D, SG&A, amortization of intangible assets,
interest and other income (expense) or taxes to its evaluation of
the performance of these segments.
FOURTH QUARTER 2023 SEGMENT
RESULTS
($ in
millions) |
Commercial Products |
Quarter Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
111.0 |
|
$ |
96.0 |
|
$ |
15.0 |
16 |
% |
Cost of
sales |
|
50.1 |
|
|
40.2 |
|
|
9.9 |
25 |
% |
Gross margin
** |
$ |
60.9 |
|
$ |
55.8 |
|
$ |
5.1 |
9 |
% |
Gross margin %
** |
|
55 |
% |
|
58 |
% |
|
|
|
|
|
|
|
Segment adjusted gross
margin (2) |
$ |
60.9 |
|
$ |
55.8 |
|
$ |
5.1 |
9 |
% |
Segment adjusted gross
margin % (2) |
|
55 |
% |
|
58 |
% |
|
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
Commercial Products gross margin increased $5.1
million, or 9%, to $60.9 million in the quarter, as compared with
$55.8 million in the prior year quarter. Commercial Products gross
margin percentage decreased 3 percentage points to 55% for the
quarter ended December 31, 2023. The decrease was primarily due to
an increase in royalty expense on OTC NARCAN® compared to Q4 2022,
partially offset by a favorable change in product mix related to
the sale of our travel health products. Commercial Products segment
adjusted gross margin was consistent with gross margin.
($ in
millions) |
MCM Products |
Quarter Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
138.1 |
|
$ |
209.7 |
|
$ |
(71.6 |
) |
(34)% |
Cost of
sales |
|
97.2 |
|
|
127.6 |
|
|
(30.4 |
) |
(24)% |
Gross margin
** |
$ |
40.9 |
|
$ |
82.1 |
|
$ |
(41.2 |
) |
(50)% |
Gross margin %
** |
|
30 |
% |
|
39 |
% |
|
|
Add back: |
|
|
|
|
Changes in fair value of contingent consideration |
$ |
0.6 |
|
$ |
0.2 |
|
$ |
0.4 |
|
* |
Inventory step-up provision |
|
2.0 |
|
|
51.4 |
|
|
(49.4 |
) |
(96)% |
Restructuring costs |
|
(1.4 |
) |
|
— |
|
|
(1.4 |
) |
NM |
Segment adjusted gross
margin (2) |
$ |
42.1 |
|
$ |
133.7 |
|
$ |
(91.6 |
) |
(69)% |
Segment adjusted gross
margin % (2) |
|
30 |
% |
|
64 |
% |
|
|
|
|
|
|
|
* % change is greater than +/-
100% |
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
NM - Not Meaningful |
MCM Products gross margin decreased $41.2
million, or 50%, to $40.9 million in the quarter, as compared with
$82.1 million in the prior year quarter. MCM Products gross margin
percentage decreased 9 percentage points to 30% for the quarter
ended December 31, 2023. The decrease was largely due to lower
sales volumes and inventory write-offs, coupled with an unfavorable
product revenue mix which was weighted more heavily to lower margin
products compared with the prior year quarter. MCM Product segment
adjusted gross margin in the current year period excludes the
impact of non-cash items related to the changes in the fair value
of contingent consideration of $0.6 million, the inventory
step-up provision of $2.0 million and the impact of restructuring
costs of $(1.4) million.
($ in
millions) |
Services |
Quarter Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
20.8 |
|
$ |
17.4 |
|
$ |
3.4 |
|
20 |
% |
Cost of
services |
|
37.8 |
|
|
52.7 |
|
|
(14.9 |
) |
(28)% |
Gross margin
** |
$ |
(17.0 |
) |
$ |
(35.3 |
) |
$ |
18.3 |
|
52 |
% |
Gross margin %
** |
|
(82 |
)% |
|
(203 |
)% |
|
|
Add back: |
|
|
|
|
Restructuring costs |
$ |
0.3 |
|
$ |
— |
|
$ |
0.3 |
|
NM |
Segment adjusted gross
margin (2) |
$ |
(16.7 |
) |
$ |
(35.3 |
) |
$ |
18.6 |
|
53 |
% |
Segment adjusted gross
margin % (2) |
|
(80 |
)% |
|
(203 |
)% |
|
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
NM - Not Meaningful |
|
|
|
|
Services gross margin increased $18.3 million,
or 52%, to $(17.0) million in the quarter, as compared with $(35.3)
million in the prior year quarter. Services gross margin percentage
increased 121 percentage points to (82)% for the quarter ended
December 31, 2023. The increase was primarily due to the resolution
of a customer's outstanding obligation at our Bayview facility
coupled with one-time costs and reserves related to the Janssen
Agreement in the prior year quarter, partially offset by additional
investments in quality enhancement and improvement initiatives at
the Company's Camden facility and decreased production at the
Company's Winnipeg facility in the current year. Services segment
adjusted gross margin in the current year period excludes the
impact of restructuring costs of $0.3 million.
FULL YEAR 2023 SEGMENT
RESULTS
($ in
millions) |
Commercial Products |
Year Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
497.3 |
|
$ |
386.6 |
|
$ |
110.7 |
29 |
% |
Cost of
sales |
|
210.3 |
|
|
160.3 |
|
|
50.0 |
31 |
% |
Gross margin
** |
$ |
287.0 |
|
$ |
226.3 |
|
$ |
60.7 |
27 |
% |
Gross margin %
** |
|
58 |
% |
|
59 |
% |
|
|
|
|
|
|
|
Segment adjusted gross
margin (2) |
$ |
287.0 |
|
$ |
226.3 |
|
$ |
60.7 |
27 |
% |
Segment adjusted gross
margin % (2) |
|
58 |
% |
|
59 |
% |
|
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
Commercial Products gross margin increased $60.7
million, or 27%, to $287.0 million in 2023, as compared with $226.3
million in the prior year. Commercial Products gross margin
percentage decreased 1 percentage point to 58% in 2023. The
decrease was largely due to a decrease in the per unit selling
price in response to increased competition for generic NARCAN®,
partially offset by a decrease in royalty expense. Commercial
Products segment adjusted gross margin was consistent with gross
margin.
($ in
millions) |
MCM Products |
Year Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
447.2 |
|
$ |
579.6 |
|
$ |
(132.4 |
) |
(23)% |
Cost of sales |
|
305.6 |
|
|
264.3 |
|
|
41.3 |
|
16 |
% |
Gross margin
** |
$ |
141.6 |
|
$ |
315.3 |
|
$ |
(173.7 |
) |
(55)% |
Gross margin %
** |
|
32 |
% |
|
54 |
% |
|
|
Add back: |
|
|
|
|
Changes in fair value of contingent consideration |
$ |
0.2 |
|
$ |
2.6 |
|
$ |
(2.4 |
) |
(92)% |
Inventory step-up provision |
|
3.9 |
|
|
51.4 |
|
|
(47.5 |
) |
(92)% |
Restructuring costs |
|
5.6 |
|
|
— |
|
|
5.6 |
|
NM |
Segment adjusted gross
margin (2) |
$ |
151.3 |
|
$ |
369.3 |
|
$ |
(218.0 |
) |
(59)% |
Segment adjusted gross
margin % (2) |
|
34 |
% |
|
64 |
% |
|
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
NM - Not Meaningful |
MCM Products gross margin decreased $173.7
million, or 55%, to $141.6 million in 2023, as compared with $315.3
million in the prior year. MCM Products gross margin percentage
decreased 22 percentage points to 32% for the year ended December
31, 2023. The decrease was largely due to lower sales volumes and
higher shutdown related costs and inventory write-offs, coupled
with an unfavorable product revenue mix which was weighted more
heavily to lower margin products compared with the prior year. MCM
Product segment adjusted gross margin in 2023 excludes the impact
of restructuring costs of $5.6 million, non-cash items related to
the changes in the fair value of contingent consideration of $0.2
million and the inventory step-up provision of $3.9 million.
($ in
millions) |
Services |
Year Ended December 31, |
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
Revenues |
$ |
78.5 |
|
$ |
109.9 |
|
$ |
(31.4 |
) |
(29)% |
Cost of
services |
|
189.5 |
|
|
268.5 |
|
|
(79.0 |
) |
(29)% |
Gross margin ** |
$ |
(111.0 |
) |
$ |
(158.6 |
) |
$ |
47.6 |
|
30 |
% |
Gross margin %
** |
|
(141 |
)% |
|
(144 |
)% |
|
|
Add back: |
|
|
|
|
Restructuring costs |
$ |
8.4 |
|
$ |
— |
|
$ |
8.4 |
|
NM |
Segment adjusted gross
margin (2) |
$ |
(102.6 |
) |
$ |
(158.6 |
) |
$ |
56.0 |
|
35 |
% |
Segment adjusted gross
margin % (2) |
|
(131 |
)% |
|
(144 |
)% |
|
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
NM - Not Meaningful |
|
|
|
|
Services gross margin increased $47.6 million,
or 30%, to $(111.0) million in 2023, as compared with $(158.6)
million in the prior year. Services gross margin percentage
increased 3 percentage points to (141)% for the year ended December
31, 2023. The increase was primarily driven by one-time costs and
reserves related to the Janssen Agreement in the prior year.
Services segment adjusted gross margin in 2023 excludes the impact
of restructuring costs of $8.4 million.
2024 FINANCIAL FORECAST
The Company provides the following financial
forecast for full year 2024 and Q1 2024, in both instances
reflecting management's expectations based on the most current
information available.
Full Year 2024
($ in
millions)METRIC |
Full Year 2023 Actual |
|
Full Year 2024 Forecast |
Total
revenues |
$1,049.3 |
|
$900 - $1,100 |
Net loss |
$(760.5) |
|
$(183) - $(133) |
Adjusted net loss
(2) |
$(319.0) |
|
$(130) - $(80) |
Adjusted EBITDA
(2) |
$(22.3) |
|
$50 - $100 |
Total segment adjusted
gross margin % (2) |
33% |
|
40% - 45% |
|
|
|
|
Segment Level Revenue
(4) |
|
|
|
Commercial Products |
$497.3 |
|
$460 - $500 |
MCM Products |
$447.2 |
|
$340 - $490 |
Services |
$78.5 |
|
$70 - $80 |
Q1 2024
($ in
millions)METRIC |
Q1 2024 Forecast |
Total
revenues |
$200 - $250 |
FOOTNOTES
(1) All financial information included in this
release is unaudited.(2) See “Non-GAAP Financial Measures” and the
"Reconciliation of Non-GAAP Financial Measures" tables for the
definitions and reconciliations of these non-GAAP financial
measures to the most closely related GAAP financial measures.(3)
Product sales, net are reported net of variable consideration
including returns, rebates, wholesaler fees and prompt pay
discounts in accordance with U.S. generally accepted accounting
principles.(4) Other Commercial products, which includes Vivotif®
and Vaxchora®, which were sold to Bavarian Nordic as part of our
travel health business in May 2023, are not included in the 2024
forecast.
CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST
INFORMATION
Company management will host a conference call
at 5:00 pm eastern time today, March 6, 2024, to discuss these
financial results. The conference call and presentation supplement
can be accessed from the Company's website or through the
following:
By phoneAdvance registration is required. Visit
https://register.vevent.com/register/BI4568368bc7f24d88b225baf83e5fa29c
to register and receive an email with the dial-in number, passcode
and registrant ID.By webcastVisit
https://edge.media-server.com/mmc/p/zaanahs2. A replay of the call
can be accessed from the Emergent website.
ABOUT EMERGENT BIOSOLUTIONS INC.
At Emergent, our mission is to protect and
enhance life. We develop, manufacture, and deliver protections
against public health threats through a pipeline of innovative
vaccines and therapeutics. For over 20 years, we have been at work
defending people from things we hope will never happen—so that we
are prepared just in case they ever do. We do what we do because we
see the opportunity to create a better, more secure world. One
where preparedness empowers protection from the threats we face.
And peace of mind prevails. In working together, we envision
protecting or enhancing 1 billion lives by 2030. For more
information, visit our website and follow us on LinkedIn, Twitter,
and Instagram.
NON-GAAP FINANCIAL MEASURES
In the accompanying analysis of financial
information, we sometimes use information derived from consolidated
and segment financial information that may not be presented in our
financial statements or prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”).
Certain of these financial measures are considered not in
conformity with GAAP (“non-GAAP financial measures”) under the
United States Securities and Exchange Commission (“SEC”) rules.
Specifically, we have referred to the following non-GAAP financial
measures:
- Adjusted Net Income
(Loss)
- Adjusted Net Income (Loss)
per Diluted Share
- Adjusted
EBITDA
- Total Segment
Revenues
- Total Segment Gross
Margin
- Total Segment Gross Margin
%
- Total Segment Adjusted
Gross Margin
- Total Segment Adjusted
Gross Margin %
- Segment Adjusted Gross
Margin
- Segment Adjusted Gross
Margin %
We define Adjusted Net Income (Loss) and
Adjusted Net Income (Loss) per Diluted Share, which are non-GAAP
financial measures, as net loss and net loss per diluted share,
respectively, excluding the impact of changes in fair value of
contingent consideration, acquisition and divestiture-related
costs, goodwill and long-lived asset impairment charges, severance
and restructuring costs, exit and disposal costs, inventory step-up
provisions, and non-cash amortization charges. We use Adjusted Net
Income (Loss) for the purpose of calculating Adjusted Net Income
(Loss) per Diluted Share. Management uses Adjusted Net Income
(Loss) per Diluted Share to assess total Company operating
performance on a consistent basis. We believe that these non-GAAP
financial measures, when considered together with our GAAP
financial results and GAAP financial measures, provide management
and investors with an additional understanding of our business
operating results, including underlying trends.
We define Adjusted EBITDA, which is a non-GAAP
financial measure, as consolidated net loss before income tax
provision (benefit), interest expense, net, depreciation,
amortization of intangible assets, changes in fair value of
contingent consideration, goodwill and long-lived asset impairment
charges, severance and restructuring costs, exit and disposal
costs, acquisition and divestiture-related costs and inventory
step-up provisions. We believe that this non-GAAP financial
measure, when considered together with our GAAP financial results
and GAAP financial measures, provides management and investors with
a more complete understanding of our operating results, including
underlying trends. In addition, EBITDA is a common alternative
measure of operating performance used by many of our competitors.
It is used by investors, financial analysts, rating agencies and
others to value and compare the financial performance of companies
in our industry, although it may be defined differently by
different companies. Therefore, we also believe that this non-GAAP
financial measure, considered along with corresponding GAAP
financial measures, provides management and investors with
additional information for comparison of our operating results with
the operating results of other companies.
We have included the definitions of segment
gross margin and segment gross margin %, which are GAAP financial
measures, below in order to more fully define the components of
certain non-GAAP financial measures presented in this press
release. We define Segment Gross Margin, as a segment's revenues,
less a segment's cost of sales or services. We define Segment Gross
Margin %, as Segment Gross Margin as a percentage of a segments
revenues. We define Segment Adjusted Gross Margin, which is a
non-GAAP financial measure as Segment Gross Margin excluding the
impact of restructuring costs and non-cash items related to changes
in fair value of contingent consideration and inventory step-up
provision. We define Segment Adjusted Gross Margin %, which is a
non-GAAP financial measure, as Segment Adjusted Gross Margin as a
percentage of a segment's revenues.
We define Total Segment Revenues, which is a
non-GAAP financial measure, as our Total Revenues, less contracts
and grants revenue, which is also equal to the sum of the revenues
of our operating segments. We define Total Segment Gross Margin,
which is a non-GAAP financial measure, as Total Segment Revenues
less our aggregate cost of sales or services. We define Total
Segment Gross Margin %, which is a non-GAAP financial measure, as
Total Segment Gross Margin as a percentage of Total Segment
Revenues. We define Total Segment Adjusted Gross Margin, which is a
non-GAAP financial measure, as Total Segment Gross Margin,
excluding the impact of restructuring costs, inventory step-up
provision and the fair value of contingent consideration. We define
Total Segment Adjusted Gross Margin %, which is a non-GAAP
financial measure, as Total Segment Adjusted Gross Martin as a
percentage of Total Segment Revenues.
Non-GAAP financial measures are not defined in
the same manner by all companies and may not be comparable with
other similarly titled measures of other companies. The
determination of the amounts that are excluded from these non-GAAP
financial measures are a matter of management judgment and depend
upon, among other factors, the nature of the underlying expense or
income amounts. Non-GAAP financial measures should be considered in
addition to, but not as a substitute for or superior to, the
information contained in our Consolidated Statements of Operations
and Consolidated Statements of Cash Flows. Reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP
financial measures are included in the financial tables
accompanying this press release.
SAFE HARBOR STATEMENT
This press release includes forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of
historical fact, including statements regarding the future
performance of the Company or our business strategy, future
operations, future financial position, future revenues and
earnings, our ability to achieve the objectives of our
restructuring initiatives, including our future results, projected
costs, prospects, plans and objectives of management, are
forward-looking statements. We generally identify forward-looking
statements by using words like “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “forecast,” “future,” “goal,”
“intend,” “may,” “plan,” “position,” “possible,” “potential,”
“predict,” “project,” “should,” “target,” “will,” “would,” and
similar expressions or variations thereof, or the negative thereof,
but these terms are not the exclusive means of identifying such
statements. Forward-looking statements are based on our current
intentions, beliefs and expectations regarding future events based
on information that is currently available. We cannot guarantee
that any forward-looking statement will be accurate. Readers should
realize that if underlying assumptions prove inaccurate or if known
or unknown risks or uncertainties materialize, actual results could
differ materially from our expectations. Readers are, therefore,
cautioned not to place undue reliance on any forward-looking
statement. Any forward-looking statement speaks only as of the date
of this press release, and, except as required by law, we do not
undertake any obligation to update any forward-looking statement to
reflect new information, events or circumstances.
There are a number of important factors that
could cause our actual results to differ materially from those
indicated by such forward-looking statements, including, among
others, the availability of USG funding for contracts related to
procurement of our MCM products, including CYFENDUS® (Anthrax
Vaccine Adsorbed (AVA), Adjuvanted), BioThrax® (Anthrax Vaccine
Adsorbed), ACAM2000®, (Smallpox (Vaccinia) Vaccine, Live), among
others, as well as contracts related to development of medical
countermeasures; the availability of government funding for our
other commercialized products, including
Ebanga™ (ansuvimab-zykl), BAT® (Botulism Antitoxin
Heptavalent) and RSDL® (Reactive Skin Decontamination Lotion Kit);
our ability to meet our commitments to quality and compliance in
all of our manufacturing operations; our ability to negotiate
additional USG procurement or follow-on contracts for our MCM
products that have expired or will be expiring; the commercial
availability and acceptance of over-the-counter NARCAN® (naloxone
HCl) Nasal Spray; the impact of the generic marketplace on NARCAN®
(naloxone HCI) Nasal Spray and future NARCAN® sales; our ability to
perform under our contracts with the USG, including the timing of
and specifications relating to deliveries; our ability to provide
Bioservices for the development and/or manufacture of product
and/or product candidates of our customers at required levels and
on required timelines; the ability of our contractors and suppliers
to maintain compliance with current good manufacturing practices
and other regulatory obligations; our ability to negotiate further
commitments related to the collaboration and deployment of capacity
toward future commercial manufacturing under our existing
Bioservices contracts; our ability to collect reimbursement for raw
materials and payment of services fees from our Bioservices
customers; the results of pending stockholder litigation and
government investigations and their potential impact on our
business; our ability to comply with the operating and financial
covenants required by our senior secured credit facilities and the
amended and restated credit agreement relating to such facilities,
and our 3.875% Senior Unsecured Notes due 2028; our ability to
resolve the going concern qualification in our consolidated
financial statements and otherwise successfully manage our
liquidity in order to continue as a going concern; the procurement
of our product candidates by USG entities under regulatory
authorities that permit government procurement of certain medical
products prior to FDA marketing authorization, and corresponding
procurement by government entities outside of the United States;
our ability to realize the expected benefits of the sale of our
travel health business to Bavarian Nordic; the impact of the
organizational changes we announced in January 2023 and August
2023; our ability to identify and acquire companies, businesses,
products or product candidates that satisfy our selection criteria;
the impact of cyber security incidents, including the risks from
the unauthorized access interruption, failure or compromise of our
information systems or those of our business partners,
collaborators or other third parties; the success of our
commercialization, marketing and manufacturing capabilities and
strategy; and the accuracy of our estimates regarding future
revenues, expenses, capital requirements and needs for additional
financing. The foregoing sets forth many, but not all, of the
factors that could cause actual results to differ from our
expectations in any forward-looking statement. Readers should
consider this cautionary statement, as well as the risks identified
in our periodic reports filed with the Securities and Exchange
Commission, when evaluating our forward-looking statements.
Trademarks
Emergent®, BioThrax®, BaciThrax®, RSDL®, BAT®,
Trobigard®, Anthrasil®, CNJ-016®, ACAM2000®, NARCAN®, CYFENDUS®,
TEMBEXA® and any and all Emergent BioSolutions Inc. brands,
products, services and feature names, logos and slogans are
trademarks or registered trademarks of Emergent BioSolutions Inc.
or its subsidiaries in the United States or other countries. All
other brands, products, services and feature names or trademarks
are the property of their respective owners.
Investor ContactRich LindahlExecutive Vice
President, Chief Financial Officerlindahlr@ebsi.com |
Media ContactAssal HellmerVice President,
Communicationsmediarelations@ebsi.com |
|
Emergent BioSolutions Inc. Consolidated
Balance Sheets(unaudited, in millions, except per
share data) |
|
|
December 31, |
|
December 31, |
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
111.7 |
|
|
$ |
642.6 |
|
Accounts receivable, net |
|
191.0 |
|
|
|
159.2 |
|
Inventories, net |
|
328.9 |
|
|
|
350.7 |
|
Prepaid expenses and other current assets |
|
47.9 |
|
|
|
57.9 |
|
Total current assets |
|
679.5 |
|
|
|
1,210.4 |
|
|
|
|
|
Property, plant and equipment, net |
|
382.8 |
|
|
|
817.6 |
|
Intangible assets, net |
|
566.6 |
|
|
|
728.8 |
|
Goodwill |
|
— |
|
|
|
218.2 |
|
Other assets |
|
194.3 |
|
|
|
191.3 |
|
Total assets |
$ |
1,823.2 |
|
|
$ |
3,166.3 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
112.2 |
|
|
$ |
103.5 |
|
Accrued expenses |
|
18.6 |
|
|
|
34.9 |
|
Accrued compensation |
|
74.1 |
|
|
|
87.3 |
|
Debt, current portion |
|
413.7 |
|
|
|
957.3 |
|
Other current liabilities |
|
32.7 |
|
|
|
45.9 |
|
Total current liabilities |
|
651.3 |
|
|
|
1,228.9 |
|
|
|
|
|
Debt, net of current portion |
|
446.5 |
|
|
|
448.5 |
|
Deferred tax liability |
|
47.2 |
|
|
|
59.7 |
|
Other liabilities |
|
28.9 |
|
|
|
41.5 |
|
Total liabilities |
$ |
1,173.9 |
|
|
$ |
1,778.6 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, par value $0.001 per share; 15.0 shares
authorized, no shares issued and outstanding |
|
— |
|
|
|
— |
|
Common stock, par value $0.001 per share; 200.0 shares authorized,
57.8 and 55.7 shares issued; 52.2 and 50.1 shares outstanding,
respectively. |
|
0.1 |
|
|
|
0.1 |
|
Treasury stock, at cost, 5.6 and 5.6 common shares,
respectively |
|
(227.7 |
) |
|
|
(227.7 |
) |
Additional paid-in capital |
|
904.4 |
|
|
|
873.5 |
|
Accumulated other comprehensive income (loss), net |
|
(5.7 |
) |
|
|
3.1 |
|
Retained earnings (accumulated deficit) |
|
(21.8 |
) |
|
|
738.7 |
|
Total stockholders’ equity |
$ |
649.3 |
|
|
$ |
1,387.7 |
|
Total liabilities and stockholders’ equity |
$ |
1,823.2 |
|
|
$ |
3,166.3 |
|
|
Emergent BioSolutions Inc. Consolidated
Statements of Operations(unaudited, in millions,
except per share data) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
Commercial Product sales |
$ |
111.0 |
|
|
$ |
96.0 |
|
|
$ |
497.3 |
|
|
$ |
386.6 |
|
MCM Product sales |
|
138.1 |
|
|
|
209.7 |
|
|
|
447.2 |
|
|
|
579.6 |
|
Total Product sales, net |
|
249.1 |
|
|
|
305.7 |
|
|
|
944.5 |
|
|
|
966.2 |
|
Bioservices: |
|
|
|
|
|
|
|
Services |
|
20.6 |
|
|
|
17.2 |
|
|
|
72.8 |
|
|
|
105.0 |
|
Leases |
|
0.2 |
|
|
|
0.2 |
|
|
|
5.7 |
|
|
|
4.9 |
|
Total Bioservices revenues |
|
20.8 |
|
|
|
17.4 |
|
|
|
78.5 |
|
|
|
109.9 |
|
Contracts and grants |
|
6.7 |
|
|
|
7.1 |
|
|
|
26.3 |
|
|
|
41.4 |
|
Total revenues |
|
276.6 |
|
|
|
330.2 |
|
|
|
1,049.3 |
|
|
|
1,117.5 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Cost of Commercial Product sales |
|
50.1 |
|
|
|
40.2 |
|
|
|
210.3 |
|
|
|
160.3 |
|
Cost of MCM Product sales |
|
97.2 |
|
|
|
127.6 |
|
|
|
305.6 |
|
|
|
264.3 |
|
Cost of Bioservices |
|
37.8 |
|
|
|
52.7 |
|
|
|
189.5 |
|
|
|
268.5 |
|
Goodwill impairment |
|
— |
|
|
|
6.7 |
|
|
|
218.2 |
|
|
|
6.7 |
|
Impairment of long-lived assets |
|
— |
|
|
|
— |
|
|
|
306.7 |
|
|
|
— |
|
Research and development |
|
29.4 |
|
|
|
47.0 |
|
|
|
111.4 |
|
|
|
188.3 |
|
Selling, general and administrative |
|
89.7 |
|
|
|
93.4 |
|
|
|
368.4 |
|
|
|
339.5 |
|
Amortization of intangible assets |
|
16.2 |
|
|
|
17.9 |
|
|
|
65.6 |
|
|
|
59.9 |
|
Total operating expenses |
|
320.4 |
|
|
|
385.5 |
|
|
|
1,775.7 |
|
|
|
1,287.5 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(43.8 |
) |
|
|
(55.3 |
) |
|
|
(726.4 |
) |
|
|
(170.0 |
) |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest expense |
|
(21.7 |
) |
|
|
(12.8 |
) |
|
|
(87.9 |
) |
|
|
(37.3 |
) |
Gain on sale of business |
|
— |
|
|
|
— |
|
|
|
74.2 |
|
|
|
— |
|
Other, net |
|
11.0 |
|
|
|
6.7 |
|
|
|
8.9 |
|
|
|
(11.7 |
) |
Total other income (expense), net |
|
(10.7 |
) |
|
|
(6.1 |
) |
|
|
(4.8 |
) |
|
|
(49.0 |
) |
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
(54.5 |
) |
|
|
(61.4 |
) |
|
|
(731.2 |
) |
|
|
(219.0 |
) |
Income tax provision
(benefit) |
|
(5.0 |
) |
|
|
5.6 |
|
|
|
29.3 |
|
|
|
(7.4 |
) |
Net loss |
$ |
(49.5 |
) |
|
$ |
(67.0 |
) |
|
$ |
(760.5 |
) |
|
$ |
(211.6 |
) |
|
|
|
|
|
|
|
|
Net loss per common
share |
|
|
|
|
|
|
|
Basic |
$ |
(0.95 |
) |
|
$ |
(1.34 |
) |
|
$ |
(14.85 |
) |
|
$ |
(4.22 |
) |
Diluted |
$ |
(0.95 |
) |
|
$ |
(1.34 |
) |
|
$ |
(14.85 |
) |
|
$ |
(4.22 |
) |
|
|
|
|
|
|
|
|
Shares used in
computing net loss per common share |
|
|
|
|
|
|
|
Basic |
|
51.9 |
|
|
|
49.9 |
|
|
|
51.2 |
|
|
|
50.1 |
|
Diluted |
|
51.9 |
|
|
|
49.9 |
|
|
|
51.2 |
|
|
|
50.1 |
|
|
Emergent BioSolutions Inc.Consolidated
Statements of Cash Flows(unaudited, in
millions) |
|
|
Year Ended December 31, |
|
2023 |
|
|
|
2022 |
|
Operating Activities |
|
|
|
Net income (loss) |
$ |
(760.5 |
) |
|
$ |
(211.6 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Share-based compensation expense |
|
23.1 |
|
|
|
45.1 |
|
Depreciation and amortization |
|
125.1 |
|
|
|
143.3 |
|
Change in fair value of contingent obligations, net |
|
0.2 |
|
|
|
2.6 |
|
Amortization of deferred financing costs |
|
21.3 |
|
|
|
4.1 |
|
Deferred income taxes |
|
(8.9 |
) |
|
|
(28.6 |
) |
Gain on sale of travel health business |
|
(74.2 |
) |
|
|
— |
|
Goodwill impairment |
|
218.2 |
|
|
|
6.7 |
|
Impairment of long-lived assets |
|
306.7 |
|
|
|
— |
|
Other |
|
13.0 |
|
|
|
6.4 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(21.6 |
) |
|
|
118.1 |
|
Inventories |
|
0.6 |
|
|
|
(57.1 |
) |
Prepaid expenses and other assets |
|
11.7 |
|
|
|
(19.9 |
) |
Accounts payable |
|
10.6 |
|
|
|
(14.0 |
) |
Accrued expenses and other liabilities |
|
(55.7 |
) |
|
|
(66.7 |
) |
Accrued compensation |
|
(10.4 |
) |
|
|
(0.8 |
) |
Long-term incentive plan accrual |
|
4.8 |
|
|
|
— |
|
Income taxes receivable and payable, net |
|
(16.2 |
) |
|
|
28.7 |
|
Contract liabilities |
|
5.9 |
|
|
|
9.6 |
|
Net cash used in operating activities |
|
(206.3 |
) |
|
|
(34.1 |
) |
Investing
Activities |
|
|
|
Purchases of property, plant and equipment |
|
(51.6 |
) |
|
|
(115.8 |
) |
Royalty settlement payment |
|
— |
|
|
|
(21.8 |
) |
Milestone payment from prior asset acquisition |
|
(6.3 |
) |
|
|
— |
|
Asset acquisitions |
|
— |
|
|
|
(243.7 |
) |
Proceeds from sale of travel health business, net |
|
270.2 |
|
|
|
— |
|
Net cash provided by (used in) investing
activities |
|
212.3 |
|
|
|
(381.3 |
) |
Financing
Activities |
|
|
|
Purchases of treasury stock |
|
— |
|
|
|
(82.1 |
) |
Proceeds from revolving credit facility |
|
20.0 |
|
|
|
598.0 |
|
Principal payments on revolving credit facility |
|
(398.8 |
) |
|
|
— |
|
Principal payments on term loan facility |
|
(164.6 |
) |
|
|
(33.8 |
) |
Proceeds from stock-based compensation activity |
|
1.8 |
|
|
|
5.0 |
|
Taxes paid for stock-based compensation activity |
|
(2.5 |
) |
|
|
(5.9 |
) |
Proceeds from at-the-market sale of stock, net of commissions and
expenses |
|
8.4 |
|
|
|
— |
|
Net cash provided by (used in) financing
activities: |
|
(535.7 |
) |
|
|
481.2 |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(1.2 |
) |
|
|
0.5 |
|
Net change in cash, cash equivalents and restricted cash |
|
(530.9 |
) |
|
|
66.3 |
|
Cash, cash equivalents and
restricted cash, beginning of period |
|
642.6 |
|
|
|
576.3 |
|
Cash, cash equivalents and
restricted cash, end of period |
$ |
111.7 |
|
|
$ |
642.6 |
|
Supplemental cash flow
disclosures: |
|
|
|
Cash paid for interest |
$ |
68.3 |
|
|
$ |
33.0 |
|
Cash paid for income
taxes |
$ |
52.8 |
|
|
$ |
6.2 |
|
Non-cash investing and
financing activities: |
|
|
|
Purchases of property, plant and equipment unpaid at period
end |
$ |
5.7 |
|
|
$ |
9.4 |
|
Gain on extinguishment of debt |
$ |
2.5 |
|
|
$ |
— |
|
|
Emergent BioSolutions, Inc.Reconciliation
of Non-GAAP Financial MeasuresReconciliation of
Net Loss and Net Loss per Diluted Share to Adjusted Net Income
(Loss) and Adjusted Net Income (Loss) per Diluted
Share(1) |
|
($ in
millions, except per share value) |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Source |
Net loss |
$ |
(49.5 |
) |
$ |
(67.0 |
) |
|
$ |
(760.5 |
) |
$ |
(211.6 |
) |
|
Adjustments: |
|
|
|
|
|
|
Non-cash amortization charges |
$ |
22.0 |
|
$ |
18.8 |
|
|
$ |
86.8 |
|
$ |
64.0 |
|
Intangible Asset ("IA")
Amortization, Other Income |
Changes in fair value of contingent consideration |
|
0.6 |
|
|
0.2 |
|
|
|
0.2 |
|
|
2.6 |
|
MCM Product COGS |
Impairments |
|
— |
|
|
6.7 |
|
|
|
524.9 |
|
|
6.7 |
|
Goodwill and Long-lived Asset
Impairment |
Severance and restructuring costs |
|
(1.1 |
) |
|
— |
|
|
|
33.4 |
|
|
— |
|
COGS, SG&A and
R&D |
Inventory step-up provision |
|
2.0 |
|
|
51.4 |
|
|
|
3.9 |
|
|
51.4 |
|
MCM Product COGS |
Acquisition and divestiture costs |
|
1.9 |
|
|
0.7 |
|
|
|
4.7 |
|
|
1.8 |
|
SG&A |
Exit and disposal costs |
|
6.4 |
|
|
— |
|
|
|
12.5 |
|
|
— |
|
Other Income (Expense) |
Gain on sale of business |
|
— |
|
|
— |
|
|
|
(74.2 |
) |
|
— |
|
Other Income (Expense) |
Other income (expense), net item |
|
(2.5 |
) |
|
— |
|
|
|
(2.5 |
) |
|
— |
|
Other Income (Expense) |
Tax effect |
|
(19.8 |
) |
|
(4.9 |
) |
|
|
(148.2 |
) |
|
(14.6 |
) |
|
Total adjustments: |
$ |
9.5 |
|
$ |
72.9 |
|
|
$ |
441.5 |
|
$ |
111.9 |
|
|
Adjusted net income
(loss) |
$ |
(40.0 |
) |
$ |
5.9 |
|
|
$ |
(319.0 |
) |
$ |
(99.7 |
) |
|
Net loss per diluted
share |
$ |
(0.95 |
) |
$ |
(1.34 |
) |
|
$ |
(14.85 |
) |
$ |
(4.22 |
) |
|
Adjustments: |
|
|
|
|
|
|
Non-cash amortization charges |
$ |
0.42 |
|
$ |
0.38 |
|
|
$ |
1.70 |
|
$ |
1.28 |
|
IA Amortization, Other
Income |
Changes in fair value of contingent consideration |
|
0.01 |
|
|
— |
|
|
|
— |
|
|
0.05 |
|
MCM Product COGS |
Impairments |
|
— |
|
|
0.13 |
|
|
|
10.25 |
|
|
0.13 |
|
Goodwill and Long-lived Asset
Impairment |
Severance and restructuring costs |
|
(0.02 |
) |
|
— |
|
|
|
0.65 |
|
|
— |
|
COGS, SG&A and
R&D |
Inventory step-up provision |
|
0.04 |
|
|
1.03 |
|
|
|
0.08 |
|
|
1.03 |
|
MCM Product COGS |
Acquisition and divestiture costs |
|
0.04 |
|
|
0.01 |
|
|
|
0.09 |
|
|
0.04 |
|
SG&A |
Exit and disposal costs |
|
0.12 |
|
|
— |
|
|
|
0.24 |
|
|
— |
|
Other Income (Expense) |
Gain on sale of business |
|
— |
|
|
— |
|
|
|
(1.45 |
) |
|
— |
|
Other Income (Expense) |
Other income (expense), net item |
|
(0.05 |
) |
|
— |
|
|
|
(0.05 |
) |
|
— |
|
Other Income (Expense) |
Tax effect |
|
(0.38 |
) |
|
(0.10 |
) |
|
|
(2.89 |
) |
|
(0.29 |
) |
|
Total adjustments: |
$ |
0.18 |
|
$ |
1.45 |
|
|
$ |
8.62 |
|
$ |
2.24 |
|
|
Adjusted net income
(loss) per diluted share |
$ |
(0.77 |
) |
$ |
0.11 |
|
|
$ |
(6.23 |
) |
$ |
(1.98 |
) |
|
Diluted shares used in
computing Adjusted net income (loss) per diluted share |
|
51.9 |
|
|
49.9 |
|
|
|
51.2 |
|
|
50.1 |
|
|
|
Emergent BioSolutions, Inc.Reconciliation
of Net Loss to Adjusted EBITDA (1) |
|
($ in
millions) |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net loss |
$ |
(49.5 |
) |
$ |
(67.0 |
) |
|
$ |
(760.5 |
) |
$ |
(211.6 |
) |
Adjustments: |
|
|
|
|
|
Depreciation & amortization |
$ |
29.6 |
|
$ |
35.6 |
|
|
$ |
125.1 |
|
$ |
143.3 |
|
Income taxes |
|
(5.0 |
) |
|
5.6 |
|
|
|
29.3 |
|
|
(7.4 |
) |
Total interest expense, net |
|
21.0 |
|
|
10.8 |
|
|
|
80.9 |
|
|
34.0 |
|
Impairments |
|
— |
|
|
6.7 |
|
|
|
524.9 |
|
|
6.7 |
|
Inventory step-up provision |
|
2.0 |
|
|
51.4 |
|
|
|
3.9 |
|
|
51.4 |
|
Changes in fair value of contingent consideration |
|
0.6 |
|
|
0.2 |
|
|
|
0.2 |
|
|
2.6 |
|
Severance and restructuring costs |
|
(1.1 |
) |
|
— |
|
|
|
33.4 |
|
|
— |
|
Exit and disposal costs |
|
6.4 |
|
|
— |
|
|
|
12.5 |
|
|
— |
|
Acquisition and divestiture costs |
|
1.9 |
|
|
0.7 |
|
|
|
4.7 |
|
|
1.8 |
|
Gain on sale of business |
|
— |
|
|
— |
|
|
|
(74.2 |
) |
|
— |
|
Other income (expense), net item |
|
(2.5 |
) |
|
— |
|
|
|
(2.5 |
) |
|
8.0 |
|
Total adjustments |
$ |
52.9 |
|
$ |
111.0 |
|
|
$ |
738.2 |
|
$ |
240.4 |
|
Adjusted
EBITDA |
$ |
3.4 |
|
$ |
44.0 |
|
|
$ |
(22.3 |
) |
$ |
28.8 |
|
|
Emergent BioSolutions, Inc.Reconciliations
of Total Revenues to Total Segment Revenues and of
Segment and Total Segment Gross Margin and Gross Margin
%to Segment and Total Segment Adjusted Gross
Margin and Adjusted Gross Margin %
(1) |
|
Three Months Ended December 31, 2023(unaudited, in
millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
Revenues |
$ |
111.0 |
|
$ |
138.1 |
|
$ |
20.8 |
|
|
$ |
269.9 |
|
$ |
6.7 |
$ |
276.6 |
|
|
|
|
|
|
|
|
Cost of sales or
services |
|
50.1 |
|
|
97.2 |
|
|
37.8 |
|
|
|
185.1 |
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
$ |
60.9 |
|
$ |
40.9 |
|
$ |
(17.0 |
) |
|
$ |
84.8 |
|
|
|
Gross margin
% |
|
55 |
% |
|
30 |
% |
|
(82 |
)% |
|
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.6 |
|
$ |
— |
|
|
$ |
0.6 |
|
|
|
Inventory step-up provision |
|
— |
|
|
2.0 |
|
|
— |
|
|
|
2.0 |
|
|
|
Restructuring costs |
|
— |
|
|
(1.4 |
) |
|
0.3 |
|
|
|
(1.1 |
) |
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin |
$ |
60.9 |
|
$ |
42.1 |
|
$ |
(16.7 |
) |
|
$ |
86.3 |
|
|
|
Adjusted gross margin
% |
|
55 |
% |
|
30 |
% |
|
(80 |
)% |
|
|
32 |
% |
|
|
Three Months Ended December 31,
2022(unaudited, in millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
Revenues |
$ |
96.0 |
|
$ |
209.7 |
|
$ |
17.4 |
|
|
$ |
323.1 |
|
$ |
7.1 |
$ |
330.2 |
|
|
|
|
|
|
|
|
Cost of sales or
services |
|
40.2 |
|
|
127.6 |
|
|
52.7 |
|
|
|
220.5 |
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
$ |
55.8 |
|
$ |
82.1 |
|
$ |
(35.3 |
) |
|
$ |
102.6 |
|
|
|
Gross margin
% |
|
58 |
% |
|
39 |
% |
|
(203 |
)% |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.2 |
|
$ |
— |
|
|
$ |
0.2 |
|
|
|
Inventory step-up provision |
|
— |
|
|
51.4 |
|
|
— |
|
|
|
51.4 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin |
$ |
55.8 |
|
$ |
133.7 |
|
$ |
(35.3 |
) |
|
$ |
154.2 |
|
|
|
Adjusted gross margin
% |
|
58 |
% |
|
64 |
% |
|
(203 |
)% |
|
|
48 |
% |
|
|
|
Emergent BioSolutions, Inc.Reconciliations
of Total Revenues to Total Segment Revenues and of Segment and
Total Segment Gross Margin and Gross Margin %to
Segment and Total Segment Adjusted Gross Margin and Adjusted Gross
Margin % (1) |
|
Year Ended December 31, 2023(unaudited, in
millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
Revenues |
$ |
497.3 |
|
$ |
447.2 |
|
$ |
78.5 |
|
|
$ |
1,023.0 |
|
$ |
26.3 |
$ |
1,049.3 |
|
|
|
|
|
|
|
|
Cost of sales or
services |
|
210.3 |
|
|
305.6 |
|
|
189.5 |
|
|
|
705.4 |
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
$ |
287.0 |
|
$ |
141.6 |
|
$ |
(111.0 |
) |
|
$ |
317.6 |
|
|
|
Gross margin
% |
|
58 |
% |
|
32 |
% |
|
(141 |
)% |
|
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.2 |
|
$ |
— |
|
|
$ |
0.2 |
|
|
|
Inventory step-up provision |
|
— |
|
|
3.9 |
|
|
— |
|
|
|
3.9 |
|
|
|
Restructuring costs |
|
— |
|
|
5.6 |
|
|
8.4 |
|
|
|
14.0 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin |
$ |
287.0 |
|
$ |
151.3 |
|
$ |
(102.6 |
) |
|
$ |
335.7 |
|
|
|
Adjusted gross margin
% |
|
58 |
% |
|
34 |
% |
|
(131 |
)% |
|
|
33 |
% |
|
|
Year Ended December 31, 2022(in millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
Revenues |
$ |
386.6 |
|
$ |
579.6 |
|
$ |
109.9 |
|
|
$ |
1,076.1 |
|
$ |
41.4 |
$ |
1,117.5 |
|
|
|
|
|
|
|
|
Cost of sales or
services |
|
160.3 |
|
|
264.3 |
|
|
268.5 |
|
|
|
693.1 |
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
$ |
226.3 |
|
$ |
315.3 |
|
$ |
(158.6 |
) |
|
$ |
383.0 |
|
|
|
Gross margin
% |
|
59 |
% |
|
54 |
% |
|
(144 |
)% |
|
|
36 |
% |
|
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
2.6 |
|
$ |
— |
|
|
$ |
2.6 |
|
|
|
Inventory step-up provision |
|
— |
|
|
51.4 |
|
|
— |
|
|
|
51.4 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin |
$ |
226.3 |
|
$ |
369.3 |
|
$ |
(158.6 |
) |
|
$ |
437.0 |
|
|
|
Adjusted gross margin
% |
|
59 |
% |
|
64 |
% |
|
(144 |
)% |
|
|
41 |
% |
|
|
|
Emergent BioSolutions, Inc.Reconciliation
of Net Loss Forecast to Adjusted Net Loss Forecast |
|
($ in millions) |
2024 Full Year Forecast |
|
Source |
Net loss |
$(183) - $(133) |
|
|
Adjustments: |
|
|
|
Non-cash amortization charges |
$65 |
|
IA Amortization Other Income |
Changes in fair value of contingent consideration |
2 |
|
MCM Product COGS |
Tax effect |
(14) |
|
|
Total adjustments: |
$53 |
|
|
Adjusted net
loss |
$(130) - $(80) |
|
|
|
Reconciliation of Net Loss Forecast to Adjusted EBITDA
Forecast |
|
($ in millions) |
2024 Full Year Forecast |
Net loss |
$(183) - $(133) |
Adjustments: |
|
Depreciation & amortization |
$111 |
Income taxes |
59 |
Total interest expense, net |
61 |
Changes in fair value of contingent consideration |
2 |
Total adjustments |
$233 |
Adjusted
EBITDA |
$50 - $100 |
|
Reconciliations of Forecasted Total Revenues to Forecasted
Total Segment Revenues and of Forecasted Segment and Total Segment
Gross Margin and Gross Margin % to Forecasted Segment and Total
Segment Adjusted Gross Margin and Adjusted Gross Margin %
(1) |
|
(in millions) |
2024 Full Year Forecast |
Total revenues |
$900 - $1,100 |
Contracts & Grants |
(30) |
Total segment
revenues |
$870 - $1070 |
|
|
Cost of sales or
services |
$524 - $590 |
Total segment gross
margin |
$346 - $480 |
Total segment gross
margin % |
40% - 45% |
Add
back: |
|
Changes in fair value of contingent consideration |
$2 |
Total segment adjusted
gross margin |
$348 - $482 |
Total segment adjusted
gross margin % |
40% - 45% |
Emergent Biosolutions (NYSE:EBS)
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Emergent Biosolutions (NYSE:EBS)
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From Apr 2023 to Apr 2024