Emergent BioSolutions Inc. (NYSE: EBS) today reported selected
financial results for the third quarter ended September 30,
2023. The selected financial results reported include limited third
quarter and year-to-date results, as well as selected balance sheet
and cash flow information. As part of our quarterly review process,
the Company determined that its state deferred tax liability was
overstated as of December 31, 2022, resulting in an understatement
of the income tax benefits reflected on the Company’s income
statement. While these non-cash items do not have any impact on the
Company’s liquidity, cash flow, historical management compensation
or covenant compliance, we have concluded that it is appropriate to
delay the disclosure of full third quarter and year-to-date
earnings information and the filing of our Quarterly Report on Form
10-Q for the period ended September 30, 2023 while we work to
correct our prior period financial statements. We expect to
complete this work in the near future.
"As we work diligently toward filing our Form
10-Q, Emergent continues to strengthen its financial position and
streamline operations, which remains critical to the company’s
strategy to return to growth and preserve its unique capabilities
to help protect and enhance life,” said interim Chief Executive
Officer Haywood Miller. “We are proud of the progress we are making
across our core products business, including the recent
over-the-counter launch of NARCAN® Nasal Spray, which expands
access and awareness to help save more lives impacted by the
devastating opioid crisis. As we look ahead, we plan to continue
protecting against public health threats for years to come.”
FINANCIAL HIGHLIGHTS (1)
Quarter to Date (“QTD”) Q3
2023
($ in millions) |
Q3 2023 |
Total Revenues |
$ |
270.5 |
|
Loss before income taxes |
$ |
(265.9 |
) |
Adjusted EBITDA (2) |
$ |
19.8 |
|
Gross Margin % |
|
33 |
% |
Adjusted Gross Margin %
(2) |
|
38 |
% |
|
|
|
|
Year to Date (“YTD”) 2023
($ in millions) |
YTD 2023 |
Total
Revenues |
$ |
773.5 |
|
Loss before income taxes |
$ |
(677.0 |
) |
Adjusted EBITDA(2) |
$ |
(26.0 |
) |
Gross Margin % |
|
31 |
% |
Adjusted Gross Margin %(2) |
|
33 |
% |
|
|
|
|
SELECT Q3 2023 AND OTHER RECENT BUSINESS
UPDATES
- Announced U.S. Food and Drug Administration (“FDA”) approval of
CYFENDUSTM (Anthrax Vaccine Adsorbed, Adjuvanted), previously known
as AV7909, a two-dose anthrax vaccine for post-exposure prophylaxis
use
- Awarded a 10-year contract by the Biomedical Advanced Research
and Development Authority (“BARDA”) for advanced development,
manufacturing scale-up, and procurement of EbangaTM
(ansuvimab-zykl) product, a treatment for Ebola
- Launched NARCAN® Nasal Spray Over-The-Counter (“NARCAN® OTC”),
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
- 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 NARCAN® Nasal Spray and Medical Countermeasure (“MCM”)
products
Q3 2023 FINANCIAL
PERFORMANCE (1)
Revenues
Beginning in 2023, the Company revised the
categories used in discussing product/service level revenues. The
new categories are:
- Anthrax MCM — comprises potential
contributions from CYFENDUSTM , previously known as AV7909,
BioThrax®, Anthrasil® and Raxibacumab
- NARCAN® Nasal Spray —
comprises contributions from NARCAN® Nasal Spray
- Smallpox MCM — comprises potential
contributions from ACAM2000®, VIGIV and Tembexa®
- Other Products — comprises potential
contributions from BAT®, RSDL® and Trobigard®, as well as Vaxchora
and Vivotif, which we sold to Bavarian Nordic as part of our travel
health business.
- Contract development and manufacturing
(“CDMO”) — comprises service and lease revenues from the
contract development and manufacturing business
($ in millions) |
Q3 2023 |
Product sales, net(3): |
|
Anthrax MCM |
$ |
32.9 |
NARCAN® Nasal Spray |
|
142.1 |
Smallpox MCM |
|
24.7 |
Other Products |
|
50.1 |
Total product sales, net |
$ |
249.8 |
CDMO Revenues: |
|
Services |
$ |
13.2 |
Leases |
|
1.0 |
Total CDMO Revenues |
$ |
14.2 |
Contracts and grants |
$ |
6.5 |
Total revenues |
$ |
270.5 |
|
|
Operating Expenses
($ in millions) |
Q3 2023 |
Cost of
product sales, net |
$ |
132.5 |
Cost of CDMO |
|
44.3 |
Goodwill impairment |
|
218.2 |
Research and development (“R&D”) |
|
15.3 |
Selling, general and administrative (“SG&A”) |
|
86.0 |
Amortization of intangible assets |
|
16.3 |
Total operating expenses |
$ |
512.6 |
|
|
Restructuring Expenses
During Q3 2023, the Company incurred
restructuring expense in connection with an organizational
restructuring plan (the “August 2023 Plan”) announced on August 8,
2023. The Company incurred approximately $20.5 million in
charges in connection with the August 2023 Plan during Q3 2023.
These charges consisted primarily of charges related to severance
payments, transition services, and employee benefits. All
activities related to the August 2023 Plan were substantially
completed during the third quarter of 2023. Also during Q3 2023,
the Company made a $(0.2) million adjustment to the incurred
charges in connection with the organizational restructuring plan
announced on January 9, 2023. Restructuring costs are recognized as
an operating expense within the Condensed Consolidated Statement of
Operations and are classified based on the Company’s classification
policy for each category of operating expense.
ADDITIONAL FINANCIAL INFORMATION (1)
Capital Expenditures
($ in millions) |
Q3 2023 |
Capital expenditures |
$ |
12.6 |
|
Capital expenditures as a % of
total revenues |
|
5 |
% |
|
|
|
|
Segment Information
The Company manages the business with a focus on
two reportable segments: the Products segment, which includes the
Anthrax MCM products, NARCAN® Nasal Spray, Smallpox MCM products
and Other products; and the Services segment, which consists of
CDMO services. The Company evaluates the performance of these
reportable segments based on revenue and 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.
($ in
millions) |
Products |
Services |
Quarter Ended September 30, |
Quarter Ended September 30, |
|
2023 |
|
|
2023 |
|
Revenues |
$ |
249.8 |
|
$ |
14.2 |
|
|
|
|
Cost of sales |
$ |
132.5 |
|
$ |
44.3 |
|
Less: Changes in fair value of contingent consideration |
|
(1.1 |
) |
|
— |
|
Less: Restructuring costs |
|
5.0 |
|
|
8.1 |
|
Adjusted cost of sales ** |
$ |
128.6 |
|
$ |
36.2 |
|
|
|
|
Gross margin *** |
$ |
117.3 |
|
$ |
(30.1 |
) |
Gross margin % *** |
|
47 |
% |
(212 |
)% |
|
|
|
Adjusted gross margin
**** |
$ |
121.2 |
|
$ |
(22.0 |
) |
Adjusted gross margin % **** |
|
49 |
% |
(155 |
)% |
|
|
** Adjusted cost of sales, which is a non-GAAP financial measure,
is calculated as cost of sales less restructuring costs, and other
special items and non-cash items related to changes in fair value
of contingent consideration and inventory step-up provision. See
“Reconciliation of Non-GAAP Measures” for the reconciliation of
this non-GAAP measure to the most closely related GAAP financial
measure. |
*** Gross margin is calculated as revenues less cost of sales.
Gross margin % is calculated as gross margin divided by
revenues. |
**** Adjusted gross margin, which is a non-GAAP financial measure,
is calculated as revenues less Adjusted cost of sales. Adjusted
gross margin %, which is a non-GAAP financial measure, is
calculated as Adjusted gross margin divided by revenues. See
“Reconciliation of Non-GAAP Measures” for the reconciliation of
these non-GAAP measures to the most closely related GAAP financial
measures. |
($ in
millions) |
Products |
Services |
Nine Months Ended September 30, |
Nine Months Ended September 30, |
|
2023 |
|
|
2023 |
|
Revenues |
$ |
695.4 |
|
$ |
58.5 |
|
|
|
|
Cost of sales |
$ |
369.2 |
|
$ |
152.2 |
|
Less: Changes in fair value of contingent consideration |
|
(0.4 |
) |
|
— |
|
Less: Inventory step-up provision |
|
1.9 |
|
|
— |
|
Less: Restructuring costs |
|
7.0 |
|
|
8.1 |
|
Adjusted cost of sales ** |
$ |
360.7 |
|
$ |
144.1 |
|
|
|
|
Gross margin *** |
$ |
326.2 |
|
$ |
(93.7 |
) |
Gross margin % *** |
|
47 |
% |
(160 |
)% |
|
|
|
Adjusted gross margin **** |
$ |
334.7 |
|
$ |
(85.6 |
) |
Adjusted gross margin
% **** |
|
48 |
% |
(146 |
)% |
|
|
|
** Adjusted cost of
sales, which is a non-GAAP financial measure, is calculated as cost
of sales less restructuring costs, and other special items and
non-cash items related to changes in fair value of contingent
consideration and inventory step-up provision. See “Reconciliation
of Non-GAAP Measures” for the reconciliation of this non-GAAP
measure to the most closely related GAAP financial measure. |
*** Gross margin is
calculated as revenues less cost of sales. Gross margin % is
calculated as gross margin divided by revenues. |
**** Adjusted gross
margin, which is a non-GAAP financial measure, is calculated as
revenues less Adjusted cost of sales. Adjusted gross margin %,
which is a non-GAAP financial measure, is calculated as Adjusted
gross margin divided by revenues. See “Reconciliation of Non-GAAP
Measures” for the reconciliation of these non-GAAP measures to the
most closely related GAAP financial measures. |
|
2023 FINANCIAL FORECAST
The Company provides the following updated
financial forecast for the full year 2023, in both instances
reflecting management's expectations based on the most current
information available and taking into account the actual
performance in Q1, Q2 and Q3 2023.
Full Year 2023
($ in millions)METRIC |
Updated Range (as of 11/08/23) |
Action |
Previous Range(as of 8/08/23) |
Total Revenues |
$1,000 - $1,100 |
UNCHANGED |
$1,000 - $1,100 |
Loss before income taxes |
$(726)-$(626) |
NEW |
|
Adjusted EBITDA (2) |
$(25) - $75 |
REVISED |
$50 - $100 |
Adjusted Gross Margin %
(2) |
32% - 38% |
REVISED |
36% - 39% |
|
|
|
|
Product/Service Level
Revenue |
|
|
|
Anthrax MCM |
$145 - $215 |
REVISED |
$200 - $220 |
NARCAN® Nasal Spray |
$480 - $490 |
REVISED |
$425 - $445 |
Smallpox MCM |
$180 - $185 |
REVISED |
$180 - $200 |
Other Products |
$100 - $110 |
REVISED |
$100 - $120 |
CDMO |
$70 - $75 |
REVISED |
$60 - $80 |
|
|
|
|
The updated 2023 financial forecast as of
November 8, 2023 reflects the following key considerations.
- Total Revenues — Consistent with prior guidance, due to ongoing
strength in NARCAN® Nasal Spray, offset by potential procurement
timing for CYFENDUSTM in the near term.
- Anthrax MCM — Revised, reflecting delivery timing for
short-term CYFENDUSTM volume following FDA-approval as procurement
transitions from BARDA to the Strategic National Stockpile.
- NARCAN® Nasal Spray — Revised, reflecting continued robust
demand from the U.S. public interest channel, Canada, and launch of
NARCAN® OTC.
- Smallpox MCM — Revised, reflecting delivery of ACAM2000® and
guidance on procurement of VIGIV and Tembexa®
- Other Products — Revised, reflecting reduced expectations for
RSDL®.
- CDMO — Revised, reflecting expectations for remainder of the
year within prior guidance range.
FOOTNOTES
(1) All financial information included in this
release is unaudited. (2) See “Reconciliation of Non-GAAP
Measures” and the "Reconciliation of Loss before income taxes to
Adjusted EBITDA" and "Reconciliation of Total Revenues to
Adjusted Revenues, Cost of Sales to Adjusted Cost of Sales, and
Gross Margin and Gross Margin % to Adjusted Gross Margin and
Adjusted Gross Margin %" 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.
CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST
INFORMATION [OPEN]
Company management will host a conference call
at 5:00 pm eastern time today, November 8, 2023, to discuss these
financial results. The conference call and presentation supplement
can be accessed from the Company's website or through the
following:
By phone Advance registration is required.
Visit
https://register.vevent.com/register/BI4cd9000361334715a49ca2e60e002db6 to
register and receive an email with the dial-in number, passcode and
registrant ID.
By webcast
Visit https://edge.media-server.com/mmc/p/mrvgd2tc/
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’ve been at work
defending people from things we hope will never happen—so that
we’re 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.
RECONCILIATION OF NON-GAAP MEASURES
This press release contains financial measures
(Adjusted EBITDA, Adjusted Gross Margin, Adjusted Gross
Margin %, Adjusted Revenues, Adjusted Cost of Sales and Adjusted
Research and Development Expenses) that are considered
“non-GAAP” financial measures under applicable Securities and
Exchange Commission rules and regulations. These non-GAAP financial
measures should be considered supplemental to and not a substitute
for financial information prepared in accordance with generally
accepted accounting principles. The Company’s definition of these
non-GAAP measures may differ from similarly titled measures used by
others. For its non-GAAP measures, the Company adjusts for
specified items that can be highly variable or difficult to
predict, or reflect the non-cash impact of charges or accounting
changes. As needed, such adjustments are tax effected utilizing the
federal statutory tax rate for the U.S., except for changes in the
fair value of contingent consideration as the vast majority is
non-deductible for tax purposes. The Company views these non-GAAP
financial measures as a means to facilitate management’s financial
and operational decision-making, including evaluation of the
Company’s historical operating results and comparison to
competitors’ operating results. These non-GAAP financial measures
reflect an additional way of viewing aspects of the Company’s
operations that, when viewed with GAAP results and the
reconciliations to the corresponding GAAP financial measure, may
provide a more complete understanding of factors and trends
affecting the Company’s business. For more information on these
non-GAAP financial measures, please see the tables captioned
“Reconciliation of Loss before Income Taxes to Adjusted EBITDA,”
“Reconciliation of Total Revenues to Adjusted Revenues, Cost of
Sales to Adjusted Cost of Sales, and Gross Margin and Gross Margin
% to Adjusted Gross Margin and Adjusted Gross Margin %,” and
“Reconciliation of Research and Development Expenses to Adjusted
Research and Development Expenses” included at the end of this
release.
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. Because
non-GAAP financial measures exclude the effect of items that will
increase or decrease the Company’s reported results of operations,
management strongly encourages investors to review the Company’s
consolidated financial statements and publicly filed reports in
their entirety.
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 CYFENDUSTM (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 EbangaTM (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; the timing of our ability to correct our prior
period financial statements and file our Quarterly Report on Form
10-Q for the period ended September 30, 2023; our ability to
provide CDMO services 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 CDMO contracts; our ability to
collect reimbursement for raw materials and payment of services
fees from our CDMO 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®, CYFENDUS™ (Anthrax vaccine adsorbed),
BioThrax® (Anthrax Vaccine Adsorbed), RSDL® (Reactive Skin
Decontamination Lotion Kit), BAT® (Botulism Antitoxin Heptavalent
(A,B,C,D,E,F and G)-(Equine)), Anthrasil® (Anthrax Immune Globulin
Intravenous (Human)), VIGIV (Vaccinia Immune Globulin Intravenous
(Human)), Trobigard® (atropine sulfate, obidoxime chloride),
ACAM2000® (Smallpox (Vaccinia) Vaccine, Live), NARCAN® (naloxone
HCI) Nasal Spray, TEMBEXA® (brincidofovir) 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.EBANGA™ is a trademark of Ridgeback
Biotherapeutics L.P. 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 Hellmer Vice President, Communications
mediarelations@ebsi.com |
Emergent BioSolutions Inc.
Consolidated Statements of
Operations(unaudited, in millions)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
2023 |
|
|
|
2023 |
|
Revenues: |
|
|
|
Product sales, net |
$ |
249.8 |
|
|
$ |
695.4 |
|
Contract development and
manufacturing (“CDMO”): |
|
|
|
Services |
|
13.2 |
|
|
|
53.0 |
|
Leases |
|
1.0 |
|
|
|
5.5 |
|
Total CDMO revenues |
|
14.2 |
|
|
|
58.5 |
|
Contracts and grants |
|
6.5 |
|
|
|
19.6 |
|
Total revenues |
|
270.5 |
|
|
|
773.5 |
|
|
|
|
|
Operating
expenses: |
|
|
|
Cost of product sales |
|
132.5 |
|
|
|
369.2 |
|
Cost of CDMO |
|
44.3 |
|
|
|
152.2 |
|
Goodwill impairment |
|
218.2 |
|
|
|
218.2 |
|
Impairment of long-lived assets |
|
— |
|
|
|
306.7 |
|
Research and development |
|
15.3 |
|
|
|
82.0 |
|
Selling, general and administrative |
|
86.0 |
|
|
|
278.7 |
|
Amortization of intangible assets |
|
16.3 |
|
|
|
49.4 |
|
Total operating expenses |
|
512.6 |
|
|
|
1,456.4 |
|
|
|
|
|
Loss from
operations |
|
(242.1 |
) |
|
|
(682.9 |
) |
|
|
|
|
Other income
(expense): |
|
|
|
Interest expense |
|
(19.7 |
) |
|
|
(66.2 |
) |
Gain on sale of business |
|
(0.7 |
) |
|
|
74.2 |
|
Other, net |
|
(3.4 |
) |
|
|
(2.1 |
) |
Total other income (expense), net |
|
(23.8 |
) |
|
|
5.9 |
|
|
|
|
|
Loss before income
taxes |
|
(265.9 |
) |
|
|
(677.0 |
) |
|
|
|
|
|
|
|
|
Balance Sheet and Cash Flow Metrics
($ in
millions) |
As of September 30, |
|
2023 |
|
Balance
Sheet: |
|
Cash |
$ |
87.8 |
|
Accounts receivable, net |
|
216.5 |
|
Inventories, net |
|
354.1 |
|
Total debt1 |
|
866.3 |
|
Net debt2 |
|
778.5 |
|
|
|
($ in millions) |
Nine Months Ended September 30, 2023 |
Cash
Flow: |
|
Net cash used in operating activities |
$ |
(238.4 |
) |
Net cash provided by investing activities |
|
223.7 |
|
Capital expenditures |
|
40.2 |
|
Net cash used in financing activities |
|
(540.4 |
) |
|
1. Debt amount
indicated on the Company’s balance sheet is net of unamortized debt
issuance costs of $4.5 million. |
2. Net debt is
calculated as Total debt minus Cash. |
|
Reconciliation of Loss before Income Taxes to Adjusted
EBITDA (1)
($ in
millions) |
Three Months Ended September 30, |
|
2023 |
|
Loss before income taxes |
$ |
(265.9 |
) |
Adjustments: |
|
Depreciation & amortization |
$ |
27.9 |
|
Total interest expense, net |
|
19.4 |
|
Impairments |
|
218.2 |
|
Changes in fair value of contingent consideration |
|
(1.1 |
) |
Severance and restructuring costs |
|
20.6 |
|
Gain on sale of business |
|
0.7 |
|
Total adjustments |
$ |
285.7 |
|
Adjusted
EBITDA |
$ |
19.8 |
|
|
($ in
millions) |
Nine Months Ended September 30, |
|
2023 |
|
Loss before income taxes |
$ |
(677.0 |
) |
Adjustments: |
|
Depreciation & amortization |
$ |
95.5 |
|
Total interest expense, net |
|
59.9 |
|
Impairments |
|
524.9 |
|
Inventory step-up provision |
|
1.9 |
|
Changes in fair value of contingent consideration |
|
(0.4 |
) |
Severance and restructuring costs |
|
34.5 |
|
Exit and disposal costs |
|
6.1 |
|
Acquisition and divestiture costs |
|
2.8 |
|
Gain on sale of business |
|
(74.2 |
) |
Total adjustments |
$ |
651.0 |
|
Adjusted
EBITDA |
$ |
(26.0 |
) |
|
($ in millions) |
2023 Revised Full Year Forecast |
Loss before income
taxes |
$(726) - $(626) |
Adjustments: |
|
Depreciation & amortization |
$122 |
Total interest expense, net |
81 |
Impairments |
525 |
Inventory step-up provision |
2 |
Severance and restructuring costs |
34 |
All other |
(63) |
Total adjustments |
$701 |
Adjusted EBITDA |
$(25) - $75 |
|
|
Reconciliation of Total Revenues to Adjusted Revenues,
Cost of Sales to Adjusted Cost of Sales, and Gross Margin and Gross
Margin % to Adjusted Gross Margin and Adjusted
Gross Margin % (1)
($ in
millions) |
Three Months Ended September 30, |
|
2023 |
|
Total revenues |
$ |
270.5 |
|
Contract and grants revenues |
|
(6.5 |
) |
Adjusted
Revenues |
$ |
264.0 |
|
|
|
Cost of product sales |
$ |
132.5 |
|
Cost of contract development and manufacturing |
|
44.3 |
|
Total cost of
sales |
$ |
176.8 |
|
Less: Changes in fair value of contingent consideration |
|
(1.1 |
) |
Less: Restructuring costs |
|
13.1 |
|
Adjusted Cost of
Sales |
$ |
164.8 |
|
|
|
Gross margin (adjusted
revenues minus total cost of sales) |
$ |
87.2 |
|
Gross margin % (gross
margin divided by Adjusted Revenues) |
|
33 |
% |
|
|
Adjusted Gross Margin
(Adjusted Revenues minus Adjusted Cost of Sales) |
$ |
99.2 |
|
Adjusted Gross Margin
% (Adjusted Gross Margin divided by Adjusted
Revenues) |
|
38 |
% |
|
|
|
|
($ in
millions) |
Nine Months Ended September 30, |
|
2023 |
|
Total revenues |
$ |
773.5 |
|
Contract and grants revenues |
|
(19.6 |
) |
Adjusted
Revenues |
$ |
753.9 |
|
|
|
Cost of product sales |
$ |
369.2 |
|
Cost of CDMO |
|
152.2 |
|
Total cost of
sales |
$ |
521.4 |
|
Less: Changes in fair value of contingent consideration |
|
(0.4 |
) |
Less: Inventory step-up provision |
|
1.9 |
|
Less: Restructuring costs |
|
15.1 |
|
Adjusted Cost of
Sales |
$ |
504.8 |
|
|
|
Gross margin (Adjusted
Revenues minus total cost of sales) |
$ |
232.5 |
|
Gross margin % (gross
margin divided by Adjusted Revenues) |
|
31 |
% |
|
|
Adjusted Gross Margin
(Adjusted Revenues minus Adjusted Cost of Sales) |
$ |
249.1 |
|
Adjusted Gross Margin
% (Adjusted Gross Margin divided by Adjusted
Revenues) |
|
33 |
% |
|
|
|
|
($ in millions) |
2023 Revised Full Year Forecast |
Total
Revenues |
$1,000 - $1,100 |
Contracts and Grants
Revenues |
($25) |
Adjusted
Revenues |
$975 - $1,075 |
|
|
Total cost of
sales |
$680 - $685 |
Changes in fair value of
contingent consideration and restructuring |
($20) |
Adjusted cost of
sales |
$660 - $665 |
|
|
Gross margin (Adjusted
Revenues minus total cost of sales) |
$295 - $390 |
Gross margin % (gross
margin divided by Adjusted Revenues) |
30% - 36% |
|
|
Adjusted Gross Margin
(Adjusted Revenues minus Adjusted Cost of Sales) |
$315 - $410 |
Adjusted Gross Margin
% (Adjusted Gross Margin divided by Adjusted
Revenues) |
32% - 38% |
|
|
Reconciliation of R&D Expenses and Adjusted R&D
Expenses (1)
($ in
millions) |
Three Months Ended September 30, |
|
2023 |
|
R&D expenses |
$ |
15.3 |
|
Adjustments: |
|
Contracts and grants revenue |
$ |
(6.5 |
) |
Adjusted R&D
expenses |
$ |
8.8 |
|
Adjusted Revenue (Total
Revenue less Contracts and Grants Revenue) |
$ |
264.0 |
|
Adjusted R&D as % of
Adjusted Revenue |
|
3 |
% |
|
|
|
|
($ in
millions) |
Nine Months Ended September 30, |
|
2023 |
|
R&D expenses |
$ |
82.0 |
|
Adjustments: |
|
Contracts and grants revenue |
$ |
(19.6 |
) |
Adjusted R&D
expenses |
$ |
62.4 |
|
Adjusted Revenue (Total
Revenue less Contracts and Grants Revenue) |
$ |
753.9 |
|
Adjusted R&D as % of
Adjusted Revenue |
|
8 |
% |
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