Emergent BioSolutions Reports Financial Results for Fourth Quarter and Full Year 2020
Emergent BioSolutions reported exceptional financial results for Q4 and full year 2020, with total revenues of $583.0 million for Q4, up 62% year-on-year, and $1,555.4 million for the full year, a 41% increase. Net income for Q4 surged to $185.4 million, improving net income per diluted share to $3.44. The company reaffirmed its 2021 revenue forecast of $1,950 - $2,050 million, citing robust CDMO services and product sales growth, particularly in response to COVID-19. Notable initiatives included expanding manufacturing capacity and signing new agreements for drug product manufacturing.
- Total Q4 revenues increased by 62% YoY to $583.0 million.
- Net income for Q4 reached $185.4 million, up significantly from prior year.
- Reaffirmed revenue forecast for 2021 at $1,950 - $2,050 million.
- CDMO services revenue for Q4 increased by $173.6 million compared to Q4 2019.
- Operating cash flow rose to $536.0 million, up $348 million from 2019.
- Other product sales declined due to reduced demand for certain vaccines.
- R&D expenses decreased for Q4 but were offset by increased costs associated with COVID-19 product candidates.
- Reports record fourth quarter and year to date 2020 performance, in line with prior guidance
- Reaffirms full year 2021 forecast
GAITHERSBURG, Md., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Emergent BioSolutions Inc. (NYSE: EBS) today reported financial results for the quarter and year ended December 31, 2020. The Company also reaffirmed its full year 2021 forecast.
“Emergent’s financial and operational performance in 2020 reflects the impact we are making in addressing the growing public health threat landscape and meeting our mission to protect and enhance the lives of patients,” said Robert G. Kramer, president and CEO of Emergent BioSolutions. “We look forward to continuing to execute on our strategy with vaccines, therapeutics, devices, and contract development and manufacturing services. Our strong core business, robust development pipeline, and innovator and public-private partnership opportunities position us to remain leaders in the market and create long-term shareholder value.”
FINANCIAL HIGHLIGHTS (1)
| (in millions, except per share data) | Q4 2020 | Q4 2019 | % Change | |||
| Total Revenues | $ | 583.0 | $ | 360.4 | 62 | % |
| Net Income | $ | 185.4 | $ | 46.9 | * | |
| Net Income Per Diluted Share | $ | 3.44 | $ | 0.90 | * | |
| Adjusted Net Income (2) | $ | 198.8 | $ | 82.7 | * | |
| Adjusted Net Income Per Diluted Share (2) | $ | 3.67 | $ | 1.57 | * | |
| Adjusted EBITDA (2) | $ | 290.9 | $ | 134.3 | * | |
| (in millions, except per share data) | Full Year 2020 | Full Year 2019 | % Change | |||
| Total Revenues | $ | 1,555.4 | $ | 1,106.0 | 41 | % |
| Net Income | $ | 305.1 | $ | 54.5 | * | |
| Net Income Per Diluted Share | $ | 5.67 | $ | 1.04 | * | |
| Adjusted Net Income (2) | $ | 423.9 | $ | 152.3 | * | |
| Adjusted Net Income Per Diluted Share (2) | $ | 7.88 | $ | 2.91 | * | |
| Adjusted EBITDA (2) | $ | 630.4 | $ | 279.7 | * | |
| * % change greater than | ||||||
SELECT Q4 2020 AND RECENT BUSINESS ACCOMPLISHMENTS
- Completed three-year,
$50 million expansion at the Company's Baltimore Camden drug product facility, including a new state-of-the-art fill/finish line that became operational in January 2021, intended to significantly increase contract development and manufacturing (CDMO) capacity and capability. - Signed a CDMO services agreement with Providence Therapeutics to provide drug product manufacturing services for their mRNA PTX-COVID19-B vaccine candidate at the Company's Winnipeg, Manitoba facility.
- Signed a CDMO services agreement for drug product manufacturing of Humanigen's COVID-19 therapeutic candidate, lenzilumab™, at the Company's Baltimore Camden facility.
- Initiated a Phase 3 clinical trial with the National Institutes of Health to evaluate hyperimmune globulins, including the Company's COVID-19 human hyperimmune globulin (COVID-HIG) product candidate, as a potential treatment in adult patients hospitalized with COVID-19.
- Initiated a clinical program to evaluate COVID-HIG to support its use for potential post-exposure prophylaxis in individuals at high risk of exposure to SARS-CoV-2 such as front-line health care workers and military personnel.
2020 FINANCIAL PERFORMANCE (1)
(I) Quarter Ended December 31, 2020
Revenues
Total Revenues
For Q4 2020, total revenues were
Product Sales
For Q4 2020, total product sales were
| Three Months Ended December 31, | ||||||
| (in millions) | 2020 | 2019 | % Change | |||
| Product Sales: | ||||||
| ACAM2000® | $ | 129.3 | $ | 78.5 | 65 | % |
| Anthrax Vaccines | $ | 115.7 | $ | 92.9 | 25 | % |
| NARCAN® Nasal Spray | $ | 77.4 | $ | 66.9 | 16 | % |
| Other | $ | 18.5 | $ | 72.5 | (74 | )% |
| Total Product Sales | $ | 340.9 | $ | 310.8 | 10 | % |
Contract Development and Manufacturing (CDMO) Services
For Q4 2020, revenue from CDMO services was
Contracts and Grants
For Q4 2020, revenue from development-based contracts and grants was
Operating Expenses
Cost of Product Sales and Contract Development and Manufacturing (CDMO) Services
For Q4 2020, cost of product sales and CDMO services was
Research and Development (Gross and Net) (2)
For Q4 2020, gross R&D expenses were
For Q4 2020, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners, was
Selling, General and Administrative
For Q4 2020, selling, general and administrative expenses were
Additional Financial Information
Gross Margin (2)
For Q4 2020, gross margin was
CDMO Backlog and Opportunity Funnel
CDMO backlog, defined as estimated future services revenues for 2021 and beyond under signed contracts, was
The CDMO opportunity funnel, defined as the initial contract value to potentially be realized in 2021 and beyond based on issued proposals as well as the value of extensions associated with existing contracts, was approximately
(II) Full Year 2020
Revenues
Total Revenues
For the full year 2020, total revenues were
Product Sales
For the full year 2020, product sales were
| Year Ended December 31, | ||||||
| (in millions) | 2020 | 2019 | % Change | |||
| Product Sales: | ||||||
| Anthrax Vaccines | $ | 373.8 | $ | 172.8 | * | |
| NARCAN® Nasal Spray | $ | 311.2 | $ | 280.4 | 11 | % |
| ACAM2000® | $ | 200.3 | $ | 242.6 | (17 | )% |
| Other | $ | 104.5 | $ | 207.7 | (50 | )% |
| Total Product Sales | $ | 989.8 | $ | 903.5 | 10 | % |
Contract Development and Manufacturing (CDMO) Services
For the full year 2020, revenue from CDMO services was
Contracts and Grants
For the full year 2020, revenue from development-based contracts and grants was
Operating Expenses
Cost of Product Sales and Contract Development and Manufacturing Services
For the full year 2020, cost of product sales and CDMO services was
Research and Development (Gross and Net) (2)
For the full year 2020, gross R&D expenses were
For the full year 2020, net R&D expense was
Selling, General and Administrative
For the full year 2020, selling, general and administrative expenses were
Additional Financial Information
Gross Margin (2)
For the full year 2020, gross margin was
Operating Cash Flow
For the full year 2020, operating cash flow was
Capital Expenditures
For the full year 2020, capital expenditures were
2021 FINANCIAL FORECAST
For full year 2021, the Company reaffirms its forecast of the following financial metrics, originally announced on January 10, 2021:
| (in millions) | 2021 Forecast (As of 2/18/2021) |
| Total Revenues | |
| • NARCAN® Nasal Spray | |
| • Anthrax Vaccines | |
| • ACAM2000® | |
| • CDMO | |
| Adjusted EBITDA (2) | |
| Adjusted Net Income (2) | |
| Gross Margin (2) | |
The Company's financial forecast for 2021 includes the following additional considerations:
- Anthrax vaccine revenues are expected at a more normalized annual level and continue to primarily reflect procurement of AV7909 (Anthrax Vaccine Adsorbed, adjuvanted) under the Company’s existing contract with the Biomedical Advanced Research and Development Authority (BARDA).
- ACAM2000® (Smallpox (Vaccinia) Vaccine, Live) vaccine deliveries are expected to continue under the terms of the Company’s existing contract with the U.S. Department of Health and Human Services (HHS) at unit volume levels consistent with 2020 deliveries.
- Narcan® (naloxone HCl) Nasal Spray revenues assume an appellate decision related to its pending patent litigation in the second half of 2021 followed by the entry of at least one competitor.
- CDMO Services assume continued performance of contracted services for Development Services (DVS), Drug Substance (DS) manufacturing, and Drug Product (DP) manufacturing and Packaging for both clinical- and commercial-stage projects on behalf of a growing list of pharmaceutical and biotechnology innovators and government/NGO customers.
- Pipeline progress is expected across the vaccines, therapeutics, and devices portfolios, anticipating at least one Phase 3 launch and one Biologics License Application (BLA)/Emergency Use Authorization (EUA) filing.
- Capital expenditures, net of reimbursement, are expected to be in a range of
8% to9% of total revenues, reflecting ongoing investments in capacity and capability expansions in support of the Company's CDMO services business and product portfolio.
Q1 2021 REVENUE FORECAST
For Q1 2021, the Company expects total revenues of
FOOTNOTES
(1) All financial information incorporated within this release is unaudited
(2) See "Reconciliation of Net Income to Adjusted Net Income and Adjusted EBITDA, Gross Margin and Adjusted Gross Margin and Net Research and Development Expenses" for a definition of terms and reconciliation tables.
CONFERENCE CALL AND WEBCAST INFORMATION
Company management will host a conference call at 5:00 pm (Eastern Time) today, February 18, 2021, to discuss these financial results. The conference call can be accessed from the Company's website or through the following:
| Live Teleconference Information: Dial in: [US] (855) 766-6521; [International] (262) 912-6157 Conference ID: 3948196 Live Webcast Information: Visit https://edge.media-server.com/mmc/p/hmesjhe3 for the webcast. |
A replay of the call can be accessed at www.emergentbiosolutions.com under “Investors.”
ABOUT EMERGENT BIOSOLUTIONS INC.
Emergent BioSolutions is a global life sciences company whose mission is to protect and enhance life. Through our specialty products and contract development and manufacturing services, we are dedicated to providing solutions that address public health threats. Through social responsibility, we aim to build healthier and safer communities. We aspire to deliver peace of mind to our patients and customers so they can focus on what’s most important in their lives. In working together, we envision protecting or enhancing 1 billion lives by 2030. For more information, visit www.emergentbiosolutions.com. Find us on LinkedIn and follow us on Twitter @emergentbiosolu and Instagram @life_at_emergent.
RECONCILIATION OF NON-GAAP MEASURES
This press release contains financial measures (Adjusted Net Income, Adjusted EBITDA (Earnings Before Depreciation and Amortization, Interest and Taxes, Gross Margin, Adjusted Gross Margin and Net 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. Adjusted net income adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges. All adjustments are tax effected utilizing the federal statutory tax rate for the US, except for changes in the fair value of contingent consideration as the vast majority is non-deductible for tax purposes. Adjusted net income margin is defined as adjusted net income divided by total revenues. Adjusted EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and income tax provision (benefit), excluding specified items that can be highly variable and the non-cash impact of certain accounting adjustments. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenues. Gross margin reflects adjusted revenues minus cost of product sales and contract development and manufacturing services (COGS). Adjusted revenues is calculated as total revenues minus contracts and grants revenues. Gross margin percentage is calculated as gross margin divided by adjusted revenues. Adjusted gross margin adjusts COGS for specified items that can be highly variable or difficult to predict, or to reflect the non-cash impacts of charges (Adjusted COGS). Adjusted gross margin is calculated as adjusted revenues minus adjusted COGS. Adjusted gross margin percentage is calculated as adjusted gross margin divided by adjusted revenues. Net research and development expenses reflects research and development expenses adjusted to reflect expenses which are funded (contracts and grants revenue) and non-cash impairment of IPR&D charges. Net research and development margin is calculated as net research and development divided by adjusted revenue. 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.
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. Any statements, other than statements of historical fact, including, without limitation, our financial guidance and related projections and statements regarding our ability to meet such projections in the anticipated timeframe, if at all; statements regarding continuing to execute on our strategy across all four of our business units; remaining leaders in the market and creating long-term shareholder value; the effectiveness of COVID-HIG at treating adult patients hospitalized with COVID-19 and its effectiveness as potential post-exposure prophylaxis in individuals at high risk of exposure to COVID-19, such as front-line health care workers and military personnel; normalized annual anthrax vaccine revenue levels and continued procurement under the Company’s existing contract with BARDA; continued ACAM2000 vaccine deliveries consistent with 2020 deliveries; the results of the appellate decision related to pending patent litigation followed by the entry of at least one competitor for NARCAN® Nasal Spray 4mg/spray; continued performance of CDMO services for both clinical- and commercial-stage projects on behalf of a growing list of pharmaceutical and biotechnology innovators and government/NGO customers; pipeline progress and at least one BLA or EUA submission in 2021; the percentage of capital expenditures as a percentage of total revenues (net of reimbursement), ongoing investments in capacity and capability expansions in support of the Company's CDMO services business and product portfolio; our CDMO backlog and opportunity funnel and any other statements containing the words “will,” “believes,” “expects,” “anticipates,” “intends” “plans,” “targets,” “forecasts,” “estimates” and similar expressions in conjunction with, among other things, discussions of the Company’s outlook, financial performance or financial condition, financial and operation goals, strategic goals, growth strategy, product sales, government development or procurement contracts or awards, government appropriations, manufacturing capabilities, and the timing of certain regulatory approvals or expenditures are forward-looking statements. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate.
Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statements speak only as of the date of this press release, and, except as required by law, we do not undertake 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 the impact of global economic conditions and public health crises and epidemics, such as the global pandemic that arose from COVID-19, on the markets, our operations, and employees as well as those of our customers and suppliers; availability of U.S. government funding for procurement for our products and certain product candidates and the future exercise of options under contracts related to such procurement; the negotiation of further commitments or contracts related to the collaboration and deployment of capacity toward future commercial manufacturing under our CDMO contracts; our ability to perform under our contracts with the U.S. government and our CDMO clients, including the timing of and specifications relating to deliveries; the continued exercise of discretion by BARDA to procure additional doses of AV7909 prior to approval by the FDA; our ability to secure licensure of AV7909 from the FDA within the anticipated timeframe, if at all; our ability to secure follow-on procurement contracts for our solutions to public health threats that are under procurement contracts that have expired or will be expiring; our ability to successfully appeal the patent litigation decision related to NARCAN® Nasal Spray 4mg/spray; our ability and the ability of our collaborators to enforce patents related to NARCAN® Nasal Spray against potential generic entrants; our ability to identify and acquire companies, businesses, products or product candidates that satisfy our selection criteria; our ability and the ability of our contractors and suppliers to maintain compliance with Current Good Manufacturing Practices and other regulatory obligations; our ability to obtain or maintain FDA approval or authorization for emergency or broader patient use of our COVID-19 treatment candidates and their actual safety and effectiveness; timing of and results of clinical trials; our ability to comply with the operating and financial covenants required by our senior secured credit facilities and the indenture governing our senior unsecured notes due 2028; our ability to obtain and maintain regulatory approvals for our other product candidates and the timing of any such approvals; the procurement of products by U.S. government entities under regulatory exemptions prior to approval by the FDA and corresponding procurement by government entities outside of the United States under regulatory exemptions prior to approval by the corresponding regulatory authorities in the applicable country; the success of our commercialization, marketing and manufacturing capabilities and strategy; and the accuracy of our estimates regarding future revenues, expenses, and 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. Investors should consider this cautionary statement as well as the risk factors identified in our periodic reports filed with the Securities and Exchange Commission when evaluating our forward-looking statements.
| Investor Contact Robert Burrows Vice President, Investor Relations (o) 240/631-3280; (m) 240/413-1917 burrowsr@ebsi.com | Media Contact Nina DeLorenzo SVP, Global Communications & Public Affairs mediarelations@ebsi.com | |
Emergent BioSolutions Inc.
Consolidated Balance Sheets
(unaudited in millions, except per share data)
| December 31, | ||||||
| 2020 | 2019 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 621.3 | $ | 167.8 | ||
| Restricted cash | 0.2 | 0.2 | ||||
| Accounts receivable, net | 230.9 | 270.7 | ||||
| Inventories | 307.0 | 222.5 | ||||
| Prepaid expenses and other current assets | 36.5 | 25.0 | ||||
| Total current assets | 1,195.9 | 686.2 | ||||
| Property, plant and equipment, net | 644.1 | 542.3 | ||||
| Intangible assets, net | 663.1 | 712.9 | ||||
| In-process research and development | — | 29.0 | ||||
| Goodwill | 266.7 | 266.6 | ||||
| Other assets | 113.4 | 90.3 | ||||
| Total assets | $ | 2,883.2 | $ | 2,327.3 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | 136.1 | 94.8 | ||||
| Accrued expenses | 46.9 | 39.5 | ||||
| Accrued compensation | 84.6 | 62.4 | ||||
| Debt, current portion | 33.8 | 12.9 | ||||
| Other current liabilities | 83.1 | 6.7 | ||||
| Total current liabilities | 384.5 | 216.3 | ||||
| Contingent consideration, net of current portion | 34.2 | 26.0 | ||||
| Debt, net of current portion | 841.0 | 798.4 | ||||
| Deferred tax liability | 53.2 | 63.9 | ||||
| Contract liabilities, net of current portion | 55.5 | 85.6 | ||||
| Other liabilities | 67.8 | 48.6 | ||||
| Total liabilities | $ | 1,436.2 | $ | 1,238.8 | ||
| Stockholders’ equity: | ||||||
| Preferred stock, | — | — | ||||
| Common stock, | 0.1 | 0.1 | ||||
| Treasury stock, at cost, 1.2 common shares | (39.6 | ) | (39.6 | ) | ||
| Additional paid-in capital | 784.9 | 716.1 | ||||
| Accumulated other comprehensive loss, net | (25.3 | ) | (9.9 | ) | ||
| Retained earnings | 726.9 | 421.8 | ||||
| Total stockholders’ equity | 1,447.0 | 1,088.5 | ||||
| Total liabilities and stockholders’ equity | $ | 2,883.2 | $ | 2,327.3 | ||
Emergent BioSolutions Inc.
Consolidated Statements of Operations
(unaudited in millions, except per share data)
| Three Months Ended December 31, | ||||||
| 2020 | 2019 | |||||
| Revenues: | ||||||
| Product sales, net | $ | 340.9 | $ | 310.8 | ||
| Contract development and manufacturing services | 199.1 | 25.5 | ||||
| Contracts and grants | 43.0 | 24.1 | ||||
| Total revenues | 583.0 | 360.4 | ||||
| Operating expenses: | ||||||
| Cost of product sales and contract development and manufacturing services | 168.3 | 132.8 | ||||
| Research and development | 59.5 | 62.8 | ||||
| Selling, general and administrative | 82.1 | 72.2 | ||||
| Amortization of intangible assets | 15.0 | 14.8 | ||||
| Total operating expenses | 324.9 | 282.6 | ||||
| Income from operations | 258.1 | 77.8 | ||||
| Other income (expense): | ||||||
| Interest expense | (8.7 | ) | (9.1 | ) | ||
| Other, net | 3.4 | 2.8 | ||||
| Total other income (expense), net | (5.3 | ) | (6.3 | ) | ||
| Income before income taxes | 252.8 | 71.5 | ||||
| Income taxes | 67.4 | 24.6 | ||||
| Net income | $ | 185.4 | $ | 46.9 | ||
| Net Income per common share | ||||||
| Basic | $ | 3.51 | $ | 0.91 | ||
| Diluted | $ | 3.44 | $ | 0.90 | ||
| Shares used in computing income per share | ||||||
| Basic | 53.1 | 51.7 | ||||
| Diluted | 54.2 | 52.6 | ||||
Emergent BioSolutions Inc.
Consolidated Statements of Operations
(unaudited in millions, except per share data)
| Year Ended December 31, | ||||||
| 2020 | 2019 | |||||
| Revenues: | ||||||
| Product sales, net | $ | 989.8 | $ | 903.5 | ||
| Contract development and manufacturing services | 450.5 | 80.0 | ||||
| Contracts and grants | 115.1 | 122.5 | ||||
| Total revenues | 1,555.4 | 1,106.0 | ||||
| Operating expenses: | ||||||
| Cost of product sales and contract development and manufacturing services | 524.0 | 433.5 | ||||
| Research and development | 234.5 | 226.2 | ||||
| Selling, general and administrative | 303.3 | 273.5 | ||||
| Amortization of intangible assets | 59.8 | 58.7 | ||||
| Total operating expenses | 1,121.6 | 991.9 | ||||
| Income from operations | 433.8 | 114.1 | ||||
| Other income (expense): | ||||||
| Interest expense | (31.3 | ) | (38.4 | ) | ||
| Other, net | 4.7 | 1.7 | ||||
| Total other income (expense), net | (26.6 | ) | (36.7 | ) | ||
| Income before income taxes | 407.2 | 77.4 | ||||
| Income taxes | 102.1 | 22.9 | ||||
| Net income | $ | 305.1 | $ | 54.5 | ||
| Net Income per common share | ||||||
| Basic | $ | 5.79 | $ | 1.06 | ||
| Diluted | $ | 5.67 | $ | 1.04 | ||
| Shares used in computing income per share | ||||||
| Basic | 52.7 | 51.5 | ||||
| Diluted | 53.8 | 52.4 | ||||
Emergent BioSolutions Inc.
Consolidated Statements of Cash Flows
(unaudited in millions)
| Year Ended December 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 305.1 | $ | 54.5 | ||||
| Adjustments to reconcile to net cash provided by operating activities: | ||||||||
| Stock-based compensation expense | 51.0 | 26.7 | ||||||
| Depreciation and amortization | 114.5 | 110.7 | ||||||
| Impairment of intangible asset | 29.0 | 12.0 | ||||||
| Change in fair value of contingent obligations, net | 31.7 | 24.8 | ||||||
| Amortization of deferred financing costs | 3.5 | 3.0 | ||||||
| Deferred income taxes | (2.4 | ) | (1.1 | ) | ||||
| Other | (5.2 | ) | (0.2 | ) | ||||
| Changes in operating assets and liabilities, net of business acquisitions: | ||||||||
| Accounts receivable | 49.0 | (8.2 | ) | |||||
| Inventories | (83.2 | ) | (16.7 | ) | ||||
| Prepaid expenses and other assets | (29.2 | ) | (39.1 | ) | ||||
| Accounts payable | 19.8 | 16.5 | ||||||
| Accrued expenses and other liabilities | 19.4 | (15.1 | ) | |||||
| Accrued compensation | 21.8 | 4.2 | ||||||
| Contract liabilities | 11.2 | 16.0 | ||||||
| Net cash provided by operating activities | 536.0 | 188.0 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment and other | (141.0 | ) | (86.9 | ) | ||||
| Milestone payment from asset acquisition | (10.0 | ) | (10.0 | ) | ||||
| Net cash used in investing activities | (151.0 | ) | (96.9 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from revolving credit facility | — | 130.0 | ||||||
| Principal payments on revolving credit facility | (373.0 | ) | (105.0 | ) | ||||
| Proceeds from term loan facility | — | — | ||||||
| Principal payments on term loan facility | (14.1 | ) | (11.3 | ) | ||||
| Proceeds from senior unsecured notes | 450.0 | — | ||||||
| Debt issuance costs | (8.4 | ) | — | |||||
| Proceeds from share-based compensation activity | 31.6 | 8.2 | ||||||
| Taxes paid for share-based compensation activity | (13.8 | ) | (7.4 | ) | ||||
| Contingent consideration payments | (2.8 | ) | (50.4 | ) | ||||
| Net cash (used in) provided by financing activities | 69.5 | (35.9 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1.0 | ) | 0.4 | |||||
| Net change in cash and cash equivalents and restricted cash | 453.5 | 55.6 | ||||||
| Cash and cash equivalents and restricted cash at beginning of year | 168.0 | 112.4 | ||||||
| Cash and cash equivalents and restricted cash at end of year | $ | 621.5 | $ | 168.0 | ||||
Reconciliation of Net Income to Adjusted Net Income
| Three Months Ended December 31, | |||||||
| (in millions, except per share value) | 2020 | 2019 | Source | ||||
| Net Income | $ | 185.4 | $ | 46.9 | |||
| Adjustments: | |||||||
| + Non-cash amortization charges | 16.2 | 15.6 | Intangible Asset Amortization, Other Income | ||||
| + Changes in fair value of contingent consideration | 0.4 | 12.4 | COGS | ||||
| + Exit and disposal costs | 0.1 | — | COGS, SG&A, Other Income | ||||
| + Acquisition-related costs (transaction & integration) | 0.1 | 2.0 | SG&A | ||||
| + Impairment of IPR&D intangible asset | — | 12.0 | R&D | ||||
| Tax effect | (3.4 | ) | (6.2 | ) | |||
| Total Adjustments: | 13.4 | 35.8 | |||||
| Adjusted Net Income | $ | 198.8 | $ | 82.7 | |||
| Adjusted Net Income Per Diluted Share | $ | 3.67 | $ | 1.57 | |||
| Year Ended December 31, | |||||||
| (in millions, except per share value) | 2020 | 2019 | Source | ||||
| Net Income | $ | 305.1 | $ | 54.5 | |||
| Adjustments: | |||||||
| + Non-cash amortization charges | 63.4 | 61.7 | Intangible Asset Amortization, Other Income | ||||
| + Change in fair value of contingent consideration | 31.7 | 24.8 | COGS | ||||
| + Impairment of IPR&D | 29.0 | 12.0 | R&D | ||||
| + Exit and disposal costs | 17.2 | — | COGS, SG&A, Other Income | ||||
| + Acquisition-related costs (transaction & integration) | 0.6 | 12.6 | SG&A | ||||
| + Impact of purchase accounting on inventory step-up | — | 6.1 | COGS | ||||
| Tax effect | (23.1 | ) | (19.4 | ) | |||
| Total Adjustments: | 118.8 | 97.8 | |||||
| Adjusted Net Income | $ | 423.9 | $ | 152.3 | |||
| Adjusted Net Income Per Diluted Share | $ | 7.88 | $ | 2.91 | |||
| Full Year Forecast | |||
| (in millions) | 2021F | Source | |
| Net Income | |||
| Adjustments: | |||
| + Non-cash amortization charges | 64.0 | Intangible Asset Amortization, Other Income | |
| + Changes in fair value of contingent consideration | 3.0 | COGS | |
| + Acquisition-related costs (transaction & integration) | 2.0 | SG&A | |
| Tax effect | (14.0 | ) | |
| Total Adjustments: | 55.0 | ||
| Adjusted Net Income | |||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| Three Months Ended December 31, | ||||
| (in millions) | 2020 | 2019 | ||
| Net Income | $ | 185.4 | $ | 46.9 |
| Adjustments: | ||||
| + Depreciation & amortization | 28.9 | 27.9 | ||
| + Income Taxes | 67.4 | 24.6 | ||
| + Total interest expense, net* | 8.6 | 8.5 | ||
| + Change in fair value of contingent consideration | 0.4 | 12.4 | ||
| + Exit and disposal costs* | 0.1 | — | ||
| + Acquisition-related costs (transaction & integration) | 0.1 | 2.0 | ||
| + Impairment of IPR&D intangible asset | — | 12.0 | ||
| Total Adjustments | 105.5 | 87.4 | ||
| Adjusted EBITDA | $ | 290.9 | $ | 134.3 |
| * Includes interest income of | ||||
| Year Ended December 31, | ||||
| (in millions) | 2020 | 2019 | ||
| Net Income | $ | 305.1 | $ | 54.5 |
| Adjustments: | ||||
| + Depreciation & amortization | 114.5 | 110.7 | ||
| + Total interest expense, net* | 30.2 | 36.1 | ||
| + Income tax expense | 102.1 | 22.9 | ||
| + Change in fair value of contingent consideration | 31.7 | 24.8 | ||
| + Impairment of IPR&D intangible asset | 29.0 | 12.0 | ||
| + Exit and disposal costs | 17.2 | — | ||
| + Acquisition-related costs (transaction & integration) | 0.6 | 12.6 | ||
| + Impact of purchase accounting on inventory step-up | — | 6.1 | ||
| Total Adjustments | 325.3 | 225.2 | ||
| Adjusted EBITDA | $ | 630.4 | $ | 279.7 |
| * Includes interest income of | ||||
(in millions) | Full Year Forecast |
| 2021F | |
| Net Income | |
| Adjustments: | |
| + Depreciation & amortization | 133.0 |
| + Income taxes | 161.0 - 171.0 |
| + Total interest expense | 31.0 |
| + Acquisition-related costs (transaction & integration) | 2.0 |
| + Change in fair value of contingent consideration | 3.0 |
| Total Adjustments | 330.0 - 340.0 |
| Adjusted EBITDA | |
Reconciliation of Gross Margin and Adjusted Gross Margin
| (in millions) | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Total revenues | $ | 583.0 | $ | 360.4 | $ | 1,555.4 | $ | 1,106.0 | ||||
| Less: Contract and grants revenues | (43.0 | ) | (24.1 | ) | (115.1 | ) | (122.5 | ) | ||||
| Adjusted revenues | $ | 540.0 | $ | 336.3 | $ | 1440.3 | $ | 983.5 | ||||
| Cost of product sales and contract development and manufacturing services ("COGS") | $ | 168.3 | $ | 132.8 | $ | 524.0 | $ | 433.5 | ||||
| - Changes in fair value of contingent consideration | (0.4 | ) | (12.4 | ) | (31.7 | ) | (24.8 | ) | ||||
| - Inventory reserves related to Travel Health vaccines | 1.5 | — | (12.6 | ) | — | |||||||
| Adjusted COGS | $ | 169.4 | $ | 120.4 | $ | 479.7 | $ | 408.7 | ||||
| Gross margin (adjusted revenues minus COGS) | $ | 371.7 | $ | 203.5 | $ | 916.3 | $ | 550.0 | ||||
| Gross margin % (gross margin divided by adjusted revenues) | 69 | % | 61 | % | 64 | % | 56 | % | ||||
| Adjusted gross margin (adjusted revenues minus adjusted COGS) | $ | 370.6 | $ | 215.9 | $ | 960.6 | $ | 574.8 | ||||
| Adjusted gross margin % (adjusted gross margin divided by adjusted revenues) | 69 | % | 64 | % | 67 | % | 58 | % | ||||
Reconciliation of Net Research and Development Expenses
| (in millions) | Three Months Ended December 31, | |||||||
| 2020 | 2019 | % Change | ||||||
| Research and Development Expenses | $ | 59.5 | $ | 62.8 | (5 | )% | ||
| Adjustments: | ||||||||
| Less: Contracts and Grants Revenue | 43.0 | 24.1 | 78 | % | ||||
| Less: Impairment of IPR&D | — | 12.0 | * | |||||
| Net Research and Development Expenses | 16.5 | 26.7 | (38 | )% | ||||
| Adjusted Revenue (Total Revenue less Contracts and Grants Revenue) | $ | 540.0 | $ | 336.3 | 61 | % | ||
| Net R&D as % of Adjusted Revenue (Net R&D Margin) | 3 | % | 8 | % | (63 | )% | ||
| (in millions) | Year Ended December 31, | |||||||
| 2020 | 2019 | % Change | ||||||
| Research and Development Expenses | $ | 234.5 | $ | 226.2 | 4 | % | ||
| Adjustments: | ||||||||
| Less: Contracts and Grants Revenue | 115.1 | 122.5 | (6 | )% | ||||
| Less: Impairment of IPR&D | 29.0 | 12.0 | * | |||||
| Net Research and Development Expenses | 90.4 | 91.7 | (1 | )% | ||||
| Adjusted Revenue (Total Revenue less Contracts and Grants Revenue) | $ | 1,440.3 | $ | 983.5 | 46 | % | ||
| Net R&D as % of Adjusted Revenue (Net R&D Margin) | 6 | % | 9 | % | (33 | )% | ||
FAQ
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