Emergent BioSolutions Reports Third Quarter 2024 Financial Results
Emergent BioSolutions (EBS) reported strong Q3 2024 financial results with total revenues of $293.8 million, up 9% year-over-year. Net income reached $114.8 million, a 144% increase, while Adjusted EBITDA grew 432% to $105.3 million. The company secured significant financing through a $250 million Term Loan and $100 million asset-backed facility. Notable transactions included the $75 million sale of RSDL®, $35 million from Baltimore-Camden site sale, and receipt of $50 million from Janssen dispute resolution. Based on strong performance, EBS raised its FY 2024 guidance, projecting revenues of $1,065-$1,125 million.
Emergent BioSolutions (EBS) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un fatturato totale di 293,8 milioni di dollari, in aumento del 9% rispetto all'anno precedente. L'utile netto ha raggiunto 114,8 milioni di dollari, con un aumento del 144%, mentre l'EBITDA rettificato è cresciuto del 432% a 105,3 milioni di dollari. L'azienda ha ottenuto un finanziamento significativo tramite un prestito a termine di 250 milioni di dollari e una struttura garantita da asset di 100 milioni di dollari. Tra le transazioni significative ci sono stati la vendita di RSDL® per 75 milioni di dollari, 35 milioni dalla vendita del sito di Baltimore-Camden e il ricevimento di 50 milioni dal risarcimento della controversia con Janssen. Sulla base delle solide performance, EBS ha aumentato la sua guida per l'anno fiscale 2024, prevedendo ricavi tra 1.065 e 1.125 milioni di dollari.
Emergent BioSolutions (EBS) reportó resultados financieros sólidos para el tercer trimestre de 2024, con ingresos totales de 293,8 millones de dólares, un aumento del 9% en comparación con el año anterior. El ingreso neto alcanzó 114,8 millones de dólares, un incremento del 144%, mientras que el EBITDA ajustado creció un 432%, alcanzando 105,3 millones de dólares. La compañía aseguró un financiamiento significativo a través de un préstamo a plazo de 250 millones de dólares y una línea de crédito respaldada por activos de 100 millones de dólares. Las transacciones notables incluyeron la venta de RSDL® por 75 millones de dólares, 35 millones provenientes de la venta del sitio de Baltimore-Camden, y 50 millones recibidos por la resolución de disputas con Janssen. Basándose en un rendimiento sólido, EBS elevó sus pronósticos para el año fiscal 2024, proyectando ingresos de entre 1.065 y 1.125 millones de dólares.
Emergent BioSolutions (EBS)는 2024년 3분기 강력한 재무 성과를 보고했으며, 총 수익은 2억 9,380만 달러로, 전년 대비 9% 증가했습니다. 순이익은 1억 1,480만 달러에 도달해 144% 증가했으며, 조정 EBITDA는 1억 5,300만 달러로 432% 증가했습니다. 회사는 2억 5천만 달러 규모의 만기 대출과 1억 달러의 자산 담보 시설을 통해 중요한 자금을 확보했습니다. 주목할 만한 거래로는 RSDL® 판매로 인한 7,500만 달러, 볼티모어-캠든 부지 매각으로 인한 3,500만 달러, 그리고 Janssen 분쟁 해결로부터 받은 5천만 달러가 포함됩니다. EBS는 강력한 성과를 바탕으로 2024 회계연도 가이던스를 상향 조정하여 매출을 10억 6,500만에서 11억 2,500만 달러로 예상하고 있습니다.
Emergent BioSolutions (EBS) a rapporté de solides résultats financiers pour le troisième trimestre 2024, avec des revenus totaux de 293,8 millions de dollars, en hausse de 9 % par rapport à l'année précédente. Le résultat net a atteint 114,8 millions de dollars, ce qui représente une augmentation de 144 %, tandis que l'EBITDA ajusté a crû de 432 % pour atteindre 105,3 millions de dollars. L'entreprise a sécurisé un financement significatif grâce à un prêt à terme de 250 millions de dollars et à une facilité de crédit garantie par des actifs de 100 millions de dollars. Les transactions notables comprenaient la vente de RSDL® pour 75 millions de dollars, 35 millions provenant de la vente du site de Baltimore-Camden, et la réception de 50 millions de dollars suite à la résolution d'un litige avec Janssen. Sur la base de ces performances solides, EBS a relevé ses prévisions pour l'exercice 2024, projetant des revenus compris entre 1.065 et 1.125 millions de dollars.
Emergent BioSolutions (EBS) berichtete über starke Finanzzahlen für das dritte Quartal 2024 mit Gesamterlösen von 293,8 Millionen US-Dollar, was einem Anstieg von 9 % im Vergleich zum Vorjahreszeitraum entspricht. Der Nettogewinn erreichte 114,8 Millionen US-Dollar, ein Anstieg um 144 %, während das bereinigte EBITDA um 432 % auf 105,3 Millionen US-Dollar zunahm. Das Unternehmen sicherte sich bedeutende Finanzierungen durch einen 250 Millionen US-Dollar umfassenden Terminkredit und eine 100 Millionen US-Dollar umfassende durch Vermögenswerte gesicherte Finanzierung. Zu den bemerkenswerten Transaktionen gehörten der Verkauf von RSDL® für 75 Millionen US-Dollar, 35 Millionen US-Dollar aus dem Verkauf des Standorts Baltimore-Camden und der Erhalt von 50 Millionen US-Dollar aus der Streitbeilegung mit Janssen. Basierend auf der starken Performance erhöhte EBS seine Prognose für das Geschäftsjahr 2024 und erwartet Einnahmen zwischen 1.065 und 1.125 Millionen US-Dollar.
- Revenue increased 9% to $293.8 million in Q3 2024
- Net income grew 144% to $114.8 million
- Adjusted EBITDA increased 432% to $105.3 million
- Secured $350 million in new financing
- Generated $167 million from asset sales and settlements
- Raised full-year 2024 guidance
- NARCAN® sales declined 33% to $95.3 million
- Anthrax MCM revenues decreased 65% to $11.4 million
- Services segment reported negative gross margins of -50%
Insights
Strong Q3 2024 performance shows significant improvement with
- NARCAN® sales declined
33% due to prescription-to-OTC transition, but remains core revenue driver - Smallpox MCM revenue surged
437% to$132.7M - Successful debt refinancing with
$250M term loan and$100M asset-backed facility - Asset sales generated
$117M (RSDL®, Baltimore-Camden site, Canton warehouse)
The raised FY2024 guidance and improved margins demonstrate successful execution of the turnaround strategy. Balance sheet strengthening and operational efficiency initiatives position EBS well for sustainable growth.
- Third Quarter 2024 Total Revenues of
$293.8 million , increase of9% versus prior year - Third Quarter 2024 Net Income of
$114.8 million , increase of144% versus prior year - Third Quarter 2024 Adjusted EBITDA of
$105.3 million , increase of432% versus prior year - Raises FY 2024 guidance
GAITHERSBURG, Md., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Emergent BioSolutions Inc. (NYSE: EBS) today reported financial results for the third quarter ended September 30, 2024.
"Through disciplined execution and steady, measurable progress, Emergent's financial position is the strongest it has been since 2021 as evidenced by our favorable third-quarter results," said CEO Joe Papa. "We have successfully improved efficiencies and refocused our operations related to customer demand, generated value in our core medical countermeasures and NARCAN® Nasal Spray businesses and refinanced our debt leading to increased revenue and cash flow."
Papa continued, "Based on the success of our efforts since the beginning of this year, we are officially entering the turnaround phase of our multi-year transformation plan, and we will be focused on driving profitable growth, continued operational improvements and the generation of sustainable value for shareholders. We believe ongoing public health crises like the opioid overdose epidemic and mpox outbreak underscore the need for Emergent's capabilities and expertise. It is not if, but when, the next public health threat emerges, and we believe we are uniquely qualified to help respond to protect, enhance and save lives."
FINANCIAL HIGHLIGHTS(1)
Q3 2024 vs. Q3 2023
($ in millions, except per share amounts) | Q3 2024 | Q3 2023 | % Change | |||||
Total Revenues | $ | 293.8 | $ | 270.5 | 9 | % | ||
Net Income (Loss) | $ | 114.8 | $ | (263.4 | ) | 144 | % | |
Net Income (Loss) per Diluted Share | $ | 2.06 | $ | (5.08 | ) | 141 | % | |
Adjusted Net Income (Loss)(2) | $ | 76.2 | $ | (56.2 | ) | 236 | % | |
Adjusted Net Income (Loss) per Diluted Share(2) | $ | 1.37 | $ | (1.09 | ) | 226 | % | |
Adjusted EBITDA(2) | $ | 105.3 | $ | 19.8 | 432 | % | ||
Total Segment Gross Margin %(2) | 57 | % | 33 | % | ||||
Total Segment Adjusted Gross Margin %(2) | 59 | % | 38 | % | ||||
Year to Date (“YTD”) 2024 vs. YTD 2023
($ in millions, except per share amounts) | YTD 2024 | YTD 2023 | % Change | |||||
Total Revenues | $ | 848.9 | $ | 772.7 | 10 | % | ||
Net Loss | $ | (159.3 | ) | $ | (711.0 | ) | 78 | % |
Net Loss per Diluted Share | $ | (3.03 | ) | $ | (13.97 | ) | 78 | % |
Adjusted Net Loss(2) | $ | (14.7 | ) | $ | (273.0 | ) | 95 | % |
Adjusted Net Loss per Diluted Share(2) | $ | (0.28 | ) | $ | (5.36 | ) | 95 | % |
Adjusted EBITDA(2) | $ | 162.1 | $ | (25.7 | ) | 731 | % | |
Total Segment Gross Margin %(2) | 32 | % | 31 | % | ||||
Total Segment Adjusted Gross Margin %(2) | 46 | % | 33 | % | ||||
SELECT Q3 2024 BUSINESS UPDATES
- Secured a new Term Loan for
$250 million with OHA Agency, LLC as administrative agent. - Closed on a new asset backed loan facility for
$100 million with Wells Fargo Bank, National Association. - Received
$75 million for the sale of our RSDL® (Reactive Skin Decontamination Lotion) product to a subsidiary of SERB Pharmaceuticals ("SERB"), subject to customary adjustments based on inventory value at closing - Completed the sale of the Baltimore-Camden manufacturing site for
$35 million , including customary post-closing adjustments - Sold an underutilized warehouse at our Canton, MA facility for
$7 million - Received
$50 million in the third quarter related to the resolution of the contractual dispute with Janssen Pharmaceuticals, Inc. - Earned
$30 million development milestone payments from Bavarian Nordic as part of the sale of the Travel Health Business
THIRD QUARTER 2024 FINANCIAL PERFORMANCE(1)
Revenues
The Company uses the following categories in discussing product/service level revenues:
- NARCAN® — comprises contributions from NARCAN® Nasal Spray
- Anthrax MCM — comprises contributions from CYFENDUS®, previously known as AV7909, BioThrax®, Anthrasil® and Raxibacumab
- Smallpox MCM — comprises contributions from ACAM2000®, VIGIV and TEMBEXA®
- Other Products — comprises contributions from BAT® and RSDL®
- Bioservices — comprises service and lease revenues from the Bioservices business
($ in millions) | Q3 2024 | Q3 2023 | % Change | ||
Product sales, net:(3) | |||||
NARCAN® | $ | 95.3 | $ | 142.1 | (33)% |
Anthrax MCM | 11.4 | 32.9 | (65)% | ||
Smallpox MCM | 132.7 | 24.7 | |||
Other Products | 30.1 | 50.1 | (40)% | ||
Total Product sales, net | $ | 269.5 | $ | 249.8 | |
Bioservices: | |||||
Services | $ | 13.9 | $ | 13.2 | |
Leases | 0.4 | 1.0 | (60)% | ||
Total Bioservices revenues | $ | 14.3 | $ | 14.2 | |
Contracts and grants | $ | 10.0 | $ | 6.5 | |
Total revenues | $ | 293.8 | $ | 270.5 |
Products Sales, net
NARCAN®
For Q3 2024, revenues from NARCAN® (naloxone HCl) Nasal Spray decreased
Anthrax MCM
For Q3 2024, revenues from Anthrax MCM products decreased
Smallpox MCM
For Q3 2024, revenues from Smallpox MCM products increased
Other Products
For Q3 2024, revenues from Other Product sales decreased
Bioservices Revenues
Services
For Q3 2024, revenues from Bioservices services increased
Leases
For Q3 2024, revenues from Bioservices leases decreased
Contracts and Grants
For Q3 2024, revenues from contracts and grants increased
Operating Expenses
($ in millions) | Q3 2024 | Q3 2023 | % Change | |||
Cost of Commercial product sales | $ | 47.2 | $ | 60.0 | (21)% | |
Cost of MCM product sales | 54.0 | 72.5 | (26)% | |||
Cost of Bioservices | 21.4 | 44.3 | (52)% | |||
Research and development (“R&D”) | 13.8 | 15.3 | (10)% | |||
Selling, general and administrative (“SG&A”) | 76.6 | 86.0 | (11)% | |||
Amortization of intangible assets | 16.3 | 16.3 | —% | |||
Goodwill impairment | — | 218.2 | (100)% | |||
Total operating expenses | $ | 229.3 | $ | 512.6 | (55)% |
Cost of Commercial Product Sales
For Q3 2024, cost of Commercial Product sales decreased
Cost of MCM Product Sales
For Q3 2024, cost of MCM Product sales decreased
Cost of Bioservices
For Q3 2024, cost of Bioservices decreased
Research and Development Expenses
For Q3 2024, R&D expenses decreased
Selling, General and Administrative Expenses
For Q3 2024, SG&A expenses decreased
Goodwill Impairment
For Q3 2024, Goodwill impairment decreased
ADDITIONAL FINANCIAL INFORMATION(1)
Capital Expenditures
($ in millions) | Q3 2024 | Q3 2023 | % Change | ||||
Capital expenditures | $ | 5.8 | $ | 12.6 | (54)% | ||
Capital expenditures as a % of total revenues | 2 | % | 5 | % | |||
For Q3 2024, capital expenditures decreased largely due to lower product development activities across the Company’s facilities.
SEGMENT INFORMATION
The Company manages the business with a focus on three reportable segments: (1) the Commercial Products segment consisting of our NARCAN® and other commercial products that were sold as part of our travel health business in the second quarter of 2023; (2) the MCM Products segment consisting of the Anthrax - MCM, Smallpox - MCM and Other products and (3) the services segment (“Services”) consisting of our Bioservices business. The Company evaluates the performance of these reportable segments based on revenues 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 revenue, R&D, SG&A, amortization of intangible assets, interest and other income (expense) or taxes to its evaluation of the performance of these segments.
THIRD QUARTER 2024 SEGMENT RESULTS
($ in millions) | Commercial Products | |||||||||
Quarter Ended September 30, | ||||||||||
2024 | 2023 | $ Change | % Change | |||||||
Revenues | $ | 95.3 | $ | 142.1 | $ | (46.8 | ) | (33)% | ||
Cost of sales | 47.2 | 60.0 | (12.8 | ) | (21)% | |||||
Gross margin** | $ | 48.1 | $ | 82.1 | $ | (34.0 | ) | (41)% | ||
Gross margin %** | 50 | % | 58 | % | ||||||
Segment adjusted gross margin(2) | $ | 48.1 | $ | 82.1 | $ | (34.0 | ) | (41)% | ||
Segment adjusted gross margin %(2) | 50 | % | 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 decreased
($ in millions) | MCM Products | ||||||||||
Quarter Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % Change | ||||||||
Revenues | $ | 174.2 | $ | 107.7 | $ | 66.5 | |||||
Cost of sales | 54.0 | 72.5 | (18.5 | ) | (26)% | ||||||
Gross margin** | $ | 120.2 | $ | 35.2 | $ | 85.0 | |||||
Gross margin %** | 69 | % | 33 | % | |||||||
Add back: | |||||||||||
Changes in fair value of financial instruments | $ | — | $ | (1.1 | ) | $ | 1.1 | ||||
Restructuring costs | 4.9 | 5.0 | (0.1 | ) | (2)% | ||||||
Inventory step-up provision | 1.2 | — | 1.2 | NM | |||||||
Segment adjusted gross margin(2) | $ | 126.3 | $ | 39.1 | $ | 87.2 | |||||
Segment adjusted gross margin %(2) | 73 | % | 36 | % | |||||||
** 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 increased
($ in millions) | Services | ||||||||||
Quarter Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % Change | ||||||||
Revenues | $ | 14.3 | $ | 14.2 | $ | 0.1 | 1 | % | |||
Cost of services | 21.4 | 44.3 | (22.9 | ) | (52 | )% | |||||
Gross margin** | $ | (7.1 | ) | $ | (30.1 | ) | $ | 23.0 | 76 | % | |
Gross margin %** | (50 | )% | (212 | )% | |||||||
Add back: | |||||||||||
Restructuring costs | 0.1 | 8.1 | (8.0 | ) | (99 | )% | |||||
Segment adjusted gross margin(2) | $ | (7.0 | ) | $ | (22.0 | ) | $ | 15.0 | 68 | % | |
Segment adjusted gross margin %(2) | (49 | )% | (155 | )% | |||||||
** Gross margin is calculated as revenues less cost of services. Gross margin % is calculated as gross margin divided by revenues. |
Services gross margin increased
YTD 2024 SEGMENT RESULTS
Commercial Products | |||||||||||
Nine Months Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % Change | ||||||||
Revenues | $ | 333.8 | $ | 386.2 | $ | (52.4 | ) | (14 | )% | ||
Cost of sales | 152.7 | 160.2 | (7.5 | ) | (5 | )% | |||||
Gross margin** | $ | 181.1 | $ | 226.0 | $ | (44.9 | ) | (20 | )% | ||
Gross margin %** | 54 | % | 59 | % | |||||||
Segment adjusted gross margin(2) | $ | 181.1 | $ | 226.0 | $ | (44.9 | ) | (20 | )% | ||
Segment adjusted gross margin %(2) | 54 | % | 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 decreased
($ in millions) | MCM Products | ||||||||||
Nine Months Ended September 30, | |||||||||||
2024 | 2023 | $ Change | % Change | ||||||||
Revenues | $ | 393.0 | $ | 309.2 | $ | 83.8 | 27 | % | |||
Cost of sales | 147.3 | 208.4 | (61.1 | ) | (29 | )% | |||||
Gross margin** | $ | 245.7 | $ | 100.8 | $ | 144.9 | 144 | % | |||
Gross margin %** | 63 | % | 33 | % | |||||||
Add back: | |||||||||||
Changes in fair value of financial instruments | $ | 0.6 | $ | (0.4 | ) | $ | 1.0 | 250 | % | ||
Inventory step-up provision | 1.2 | 1.9 | (0.7 | ) | (37 | )% | |||||
Restructuring costs | 7.5 | 7.0 | 0.5 | 7 | % | ||||||
Segment adjusted gross margin(2) | $ | 255.0 | $ | 109.3 | $ | 145.7 | 133 | % | |||
Segment adjusted gross margin %(2) | 65 | % | 35 | % | |||||||
** 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 increased
($ in millions) | Services | |||||||||
Nine Months Ended September 30, | ||||||||||
2024 | 2023 | $ Change | % Change | |||||||
Revenues | $ | 97.5 | $ | 57.7 | $ | 39.8 | ||||
Cost of services | 263.3 | 151.7 | 111.6 | |||||||
Gross margin** | $ | (165.8 | ) | $ | (94.0 | ) | $ | (71.8 | ) | (76)% |
Gross margin %** | (170 | )% | (163 | )% | ||||||
Add back: | ||||||||||
Settlement charges, net | $ | 110.2 | $ | — | $ | 110.2 | NM | |||
Restructuring costs | 0.3 | 8.1 | (7.8 | ) | (96)% | |||||
Segment adjusted gross margin(2) | $ | (55.3 | ) | $ | (85.9 | ) | $ | 30.6 | ||
Segment adjusted gross margin %(2) | (57 | )% | (149 | )% | ||||||
** 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 decreased
2024 FINANCIAL FORECAST
The Company provides the following updated financial forecast for full year 2024, reflecting management's expectations based on the most current information available.
Full Year 2024
METRIC ($ in millions) | Updated Range (as of 11/6/2024) | Previous Range (as of 08/06/2024) | Previous Range (as of 05/01/2024) | Previous Range (as of 03/06/2024) |
Total revenues | ||||
Net loss | ||||
Adjusted net loss(2) | ||||
Adjusted EBITDA(2) | ||||
Total segment adjusted gross margin %(2) | ||||
Segment Level Revenue(4) | ||||
Commercial Products | ||||
MCM Products | ||||
Services(5) |
Key Assumptions ($ and shares in millions) | Updated Range (as of 11/6/2024) | |
Interest expense | ~ | |
R&D | ~ | |
Weighted avg. fully diluted share count | ~53 | |
Capex | ~ | |
Depreciation & amortization | ~ | |
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) Our Commercial Products forecast consists solely of NARCAN® Nasal Spray, as our Other Commercial Products, including Vivotif® and Vaxchora®, were sold to Bavarian Nordic as part of our travel health business in May 2023.
(5) Our Services revenue forecast includes
CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST INFORMATION
Company management will host a conference call at 5:00 pm eastern time today, November 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 phone
To join via telephone, please use the following dial-in details:
U.S. / New York: +1-646-968-2525
U.S. & Canada (Toll Free): +1-888-596-4144
Conference ID: 5259189
By webcast
Visit https://edge.media-server.com/mmc/p/nm3oj8g9
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 25 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 income (loss) and net income (loss) per diluted share, respectively, excluding the impact of changes in fair value of financial instruments, acquisition and divestiture-related costs, severance and restructuring costs, settlement charges, net, exit and disposal costs, impairment charges, gain (loss) on sale of business, non-cash amortization charges, contingent consideration milestones, and other income (expense) items. 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 income (loss) before income tax provision (benefit), interest expense, net, depreciation, amortization of intangible assets, excluding the impact of changes in fair value of financial instruments, acquisition and divestiture-related costs, severance and restructuring costs, settlement charges, net, exit and disposal costs, impairment charges, gain (loss) on sale of business, non-cash amortization charges, contingent consideration milestones and other income (expense) items. 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, changes in the fair value of financial instruments, settlement charges, net 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 reportable 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, settlement charges, net, changes in the fair value of financial instruments and inventory step-up provision. We define Total Segment Adjusted Gross Margin %, which is a non-GAAP financial measure, as Total Segment Adjusted Gross Margin 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 any of our businesses, our business strategy, future operations, future financial position, future revenues and earnings, our ability to achieve the objectives of our restructuring initiatives and divestitures, 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, assumptions and expectations regarding future events based on information that is currently available. Readers should realize that if underlying assumptions prove inaccurate 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 contained herein. Any such 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 medical countermeasure ("MCM") products, including CYFENDUS® (Anthrax Vaccine Adsorbed (AVA) Adjuvanted), previously known as AV7909, BioThrax® (Anthrax Vaccine Adsorbed), and 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) and BAT® (Botulism Antitoxin Heptavalent (A,B,C,D,E,F,G)-(Equine)); 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 a generic and competitive marketplace on NARCAN® Nasal Spray and future NARCAN® Nasal Spray 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 (as defined below) 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 service fees from our Bioservices customers; the results of pending government investigations and their potential impact on our business; our ability to obtain final court approval of the proposed settlement agreement relating to the stockholder litigation, including our ability to satisfy the conditions of the proposed settlement, and the source of funds to be used to resolve the litigation, and the potential impact of the settlement agreement, if approved, on our business; our ability to comply with the operating and financial covenants required by our term loan facility under a credit agreement, dated August 30, 2024, our revolving credit facility under a credit agreement, dated September 30, 2024, and our
Trademarks
Emergent®, BioThrax®, BaciThrax®, 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, including RSDL® (Reactive Skin Decontamination Lotion), which was acquired by SERB on July 31, 2024.
Investor Contact Rich Lindahl Executive Vice President, Chief Financial Officer lindahlr@ebsi.com | Media Contact Assal Hellmer Vice President, Communications mediarelations@ebsi.com |
Emergent BioSolutions Inc. Consolidated Balance Sheets (unaudited, in millions, except per share data) | |||||||
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 149.9 | $ | 111.7 | |||
Restricted cash | 6.5 | — | |||||
Accounts receivable, net | 121.3 | 191.0 | |||||
Inventories, net | 322.7 | 328.9 | |||||
Prepaid expenses and other current assets | 61.0 | 47.9 | |||||
Total current assets | 661.4 | 679.5 | |||||
Property, plant and equipment, net | 278.1 | 382.8 | |||||
Intangible assets, net | 517.8 | 566.6 | |||||
Other assets | 20.5 | 194.3 | |||||
Total assets | $ | 1,477.8 | $ | 1,823.2 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 82.1 | $ | 112.2 | |||
Accrued expenses | 16.1 | 18.6 | |||||
Accrued compensation | 63.3 | 74.1 | |||||
Debt, current portion | 0.8 | 413.7 | |||||
Other current liabilities | 67.6 | 32.7 | |||||
Total current liabilities | 229.9 | 651.3 | |||||
Debt, net of current portion | 661.8 | 446.5 | |||||
Deferred tax liability | 41.9 | 47.2 | |||||
Other liabilities | 35.8 | 28.9 | |||||
Total liabilities | $ | 969.4 | $ | 1,173.9 | |||
Stockholders’ equity: | |||||||
Preferred stock, | — | — | |||||
Common stock, | 0.1 | 0.1 | |||||
Treasury stock, at cost, 5.6 and 5.6 common shares, respectively | (227.7 | ) | (227.7 | ) | |||
Additional paid-in capital | 924.4 | 904.4 | |||||
Accumulated other comprehensive loss, net | (7.3 | ) | (5.7 | ) | |||
Accumulated deficit | (181.1 | ) | (21.8 | ) | |||
Total stockholders’ equity | $ | 508.4 | $ | 649.3 | |||
Total liabilities and stockholders’ equity | $ | 1,477.8 | $ | 1,823.2 |
Emergent BioSolutions Inc. Consolidated Statements of Operations (unaudited, in millions, except per share data) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues: | |||||||||||||||
Commercial Product sales | $ | 95.3 | $ | 142.1 | $ | 333.8 | $ | 386.2 | |||||||
MCM Product sales | 174.2 | 107.7 | 393.0 | 309.2 | |||||||||||
Total Product sales, net | 269.5 | 249.8 | 726.8 | 695.4 | |||||||||||
Bioservices: | |||||||||||||||
Services | 13.9 | 13.2 | 96.7 | 52.2 | |||||||||||
Leases | 0.4 | 1.0 | 0.8 | 5.5 | |||||||||||
Total Bioservices revenues | 14.3 | 14.2 | 97.5 | 57.7 | |||||||||||
Contracts and grants | 10.0 | 6.5 | 24.6 | 19.6 | |||||||||||
Total revenues | 293.8 | 270.5 | 848.9 | 772.7 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of Commercial Product sales | 47.2 | 60.0 | 152.7 | 160.2 | |||||||||||
Cost of MCM Product sales | 54.0 | 72.5 | 147.3 | 208.4 | |||||||||||
Cost of Bioservices | 21.4 | 44.3 | 263.3 | 151.7 | |||||||||||
Research and development | 13.8 | 15.3 | 61.6 | 82.0 | |||||||||||
Selling, general and administrative | 76.6 | 86.0 | 247.2 | 278.7 | |||||||||||
Amortization of intangible assets | 16.3 | 16.3 | 48.8 | 49.4 | |||||||||||
Goodwill impairment | — | 218.2 | — | 218.2 | |||||||||||
Impairment of long-lived assets | — | — | 27.2 | 306.7 | |||||||||||
Total operating expenses | 229.3 | 512.6 | 948.1 | 1,455.3 | |||||||||||
Income (loss) from operations | 64.5 | (242.1 | ) | (99.2 | ) | (682.6 | ) | ||||||||
Other income (expense): | |||||||||||||||
Interest expense | (8.3 | ) | (19.7 | ) | (56.2 | ) | (66.2 | ) | |||||||
Gain (loss) on sale of business | 64.3 | (0.7 | ) | 24.3 | 74.2 | ||||||||||
Other, net | 21.9 | (3.4 | ) | 15.8 | (2.1 | ) | |||||||||
Total other income (expense), net | 77.9 | (23.8 | ) | (16.1 | ) | 5.9 | |||||||||
Income (loss) before income taxes | 142.4 | (265.9 | ) | (115.3 | ) | (676.7 | ) | ||||||||
Income tax provision (benefit) | 27.6 | (2.5 | ) | 44.0 | 34.3 | ||||||||||
Net income (loss) | $ | 114.8 | $ | (263.4 | ) | $ | (159.3 | ) | $ | (711.0 | ) | ||||
Earnings (loss) per common share | |||||||||||||||
Basic | $ | 2.16 | $ | (5.08 | ) | $ | (3.03 | ) | $ | (13.97 | ) | ||||
Diluted | $ | 2.06 | $ | (5.08 | ) | $ | (3.03 | ) | $ | (13.97 | ) | ||||
Shares used in computing earnings (loss) per common share | |||||||||||||||
Basic | 53.1 | 51.8 | 52.6 | 50.9 | |||||||||||
Diluted | 55.6 | 51.8 | 52.6 | 50.9 |
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
Operating Activities | |||||||
Net loss | $ | (159.3 | ) | $ | (711.0 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Share-based compensation expense | 13.7 | 19.1 | |||||
Depreciation and amortization | 82.8 | 95.5 | |||||
Change in fair value of contingent obligations, net | 0.6 | (0.4 | ) | ||||
Amortization of deferred financing costs | 5.2 | 15.6 | |||||
Deferred income taxes | (5.1 | ) | (3.7 | ) | |||
Noncash gain on sale of business | (32.2 | ) | (74.2 | ) | |||
Change in fair value of warrant and forward liabilities | (1.1 | ) | — | ||||
Goodwill impairment | — | 218.2 | |||||
Impairment of long-lived assets | 27.2 | 306.7 | |||||
Loss on disposal of assets | 28.9 | 13.9 | |||||
Other | 3.9 | (5.0 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 52.7 | (58.5 | ) | ||||
Inventories | (35.5 | ) | (25.0 | ) | |||
Prepaid expenses and other assets | 146.3 | (18.3 | ) | ||||
Accounts payable | (22.8 | ) | 17.7 | ||||
Accrued expenses and other liabilities | 32.9 | (30.2 | ) | ||||
Long-term incentive plan accrual | 2.5 | 3.7 | |||||
Accrued compensation | (9.9 | ) | (0.8 | ) | |||
Income taxes receivable and payable, net | 26.6 | (3.5 | ) | ||||
Contract liabilities | (18.8 | ) | 1.8 | ||||
Net cash provided by (used in) operating activities | 138.6 | (238.4 | ) | ||||
Investing Activities | |||||||
Purchases of property, plant and equipment | (21.2 | ) | (40.2 | ) | |||
Proceeds from sale of property, plant and equipment | 7.6 | — | |||||
Milestone payment from prior asset acquisition | — | (6.3 | ) | ||||
Proceeds from sale of business | 110.2 | 270.2 | |||||
Net cash provided by investing activities | 96.6 | 223.7 | |||||
Financing Activities | |||||||
Proceeds from the issuance of debt, net of lender fees | 219.0 | — | |||||
Proceeds allocated to warrants issued in conjunction with debt | 13.4 | — | |||||
Proceeds allocated to common stock issued in conjunction with debt | 9.3 | — | |||||
Principal payments on term loan facility | (198.2 | ) | (160.7 | ) | |||
Proceeds from revolving credit facility | 65.0 | — | |||||
Principal payments on revolving credit facility | (284.2 | ) | (386.8 | ) | |||
Debt issuance costs | (14.6 | ) | — | ||||
Proceeds from share-based compensation activity | 0.7 | 1.3 | |||||
Taxes paid for share-based compensation activity | (0.9 | ) | (2.4 | ) | |||
Proceeds from at-the-market sale of stock, net of commissions and expenses | — | 8.2 | |||||
Net cash used in financing activities: | (190.5 | ) | (540.4 | ) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | — | 0.3 | |||||
Net change in cash, cash equivalents and restricted cash | 44.7 | (554.8 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 111.7 | 642.6 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 156.4 | $ | 87.8 | |||
Supplemental cash flow disclosures: | |||||||
Cash paid for interest | $ | 55.8 | $ | 56.5 | |||
Cash paid for income taxes | $ | 35.5 | $ | 38.3 | |||
Non-cash investing and financing activities: | |||||||
Purchases of property, plant and equipment unpaid at period end | $ | 1.6 | $ | 9.2 | |||
Gain on extinguishments of debt | $ | 0.6 | $ | — | |||
Issuance of common stock in conjunction with debt | 7.7 | — | |||||
Reconciliation of cash and cash equivalents and restricted cash: | |||||||
Cash and cash equivalents | $ | 149.9 | $ | 87.8 | |||
Restricted cash | 6.5 | — | |||||
Total | $ | 156.4 | $ | 87.8 |
Emergent BioSolutions, Inc. Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income (Loss) and Net Income (Loss) per Diluted Share to Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share(1) | ||||||||||||||
($ in millions, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2024 | 2023 | 2024 | 2023 | Source | ||||||||||
Net income (loss) | $ | 114.8 | $ | (263.4 | ) | $ | (159.3 | ) | $ | (711.0 | ) | |||
Adjustments: | ||||||||||||||
Non-cash amortization charges | $ | 9.7 | $ | 21.9 | $ | 54.0 | $ | 65.0 | Amortization of intangible assets (IA), Other Income | |||||
Impairments | — | 218.2 | 27.2 | 524.9 | Impairment of long-lived assets and goodwill | |||||||||
Severance and restructuring costs | 6.3 | 20.6 | 22.9 | 34.5 | Cost of MCM Products, Cost of Services, SG&A and R&D | |||||||||
Inventory step-up provision | 1.2 | — | 1.2 | 1.9 | Cost of MCM Products | |||||||||
Acquisition and divestiture costs | — | — | — | 2.8 | SG&A | |||||||||
Exit and disposal costs | — | — | 13.3 | 6.1 | R&D | |||||||||
Loss (gain) on sale of business | (64.3 | ) | 0.7 | (24.3 | ) | (74.2 | ) | Other Income (Expense) | ||||||
Settlement charges, net | 10.0 | — | 120.2 | — | Cost of Services and SG&A | |||||||||
Contingent consideration milestones | (30.0 | ) | — | (30.0 | ) | — | Other Income (Expense) | |||||||
Changes in fair value of financial instruments | (1.1 | ) | (1.1 | ) | (0.5 | ) | (0.4 | ) | Cost of MCM Products and Other Income (Expense) | |||||
Other expense (income), net items | 6.7 | — | 9.8 | — | Other Income (Expense) | |||||||||
Tax effect | 22.9 | (53.1 | ) | (49.2 | ) | (122.6 | ) | |||||||
Total adjustments: | $ | (38.6 | ) | $ | 207.2 | $ | 144.6 | $ | 438.0 | |||||
Adjusted net income (loss) | $ | 76.2 | $ | (56.2 | ) | $ | (14.7 | ) | $ | (273.0 | ) | |||
Net income (loss) per diluted share | $ | 2.06 | $ | (5.08 | ) | $ | (3.03 | ) | $ | (13.97 | ) | |||
Adjustments: | ||||||||||||||
Non-cash amortization charges | $ | 0.17 | $ | 0.42 | $ | 1.03 | $ | 1.28 | Amortization of IA, Other Income (Expense) | |||||
Impairments | — | 4.21 | 0.52 | 10.31 | Impairment of long-lived assets | |||||||||
Severance and restructuring costs | 0.12 | 0.40 | 0.44 | 0.68 | Cost of MCM Products, Cost of Services, SG&A and R&D | |||||||||
Inventory step-up provision | 0.02 | — | 0.02 | 0.04 | Cost of MCM Products | |||||||||
Acquisition and divestiture costs | — | — | — | 0.06 | SG&A | |||||||||
Exit and disposal costs | — | — | 0.25 | 0.12 | R&D | |||||||||
Loss (gain) on sale of business | (1.16 | ) | 0.01 | (0.46 | ) | (1.46 | ) | Other Income (Expense) | ||||||
Settlement charges, net | 0.18 | — | 2.29 | — | Cost of Services and SG&A | |||||||||
Contingent consideration milestones | (0.54 | ) | — | (0.57 | ) | — | Other Income (Expense) | |||||||
Changes in fair value of financial instruments | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | Cost of MCM Products and Other Income (Expense) | |||||
Other expense (income), net items | 0.12 | — | 0.19 | — | Other Income (Expense) | |||||||||
Tax effect | 0.42 | (1.03 | ) | (0.95 | ) | (2.41 | ) | |||||||
Total adjustments: | $ | (0.69 | ) | $ | 3.99 | $ | 2.75 | $ | 8.61 | |||||
Adjusted net income (loss) per diluted share | $ | 1.37 | $ | (1.09 | ) | $ | (0.28 | ) | $ | (5.36 | ) | |||
Diluted shares used in computing Adjusted net income (loss) per diluted share | 55.6 | 51.8 | 52.6 | 50.9 |
Emergent BioSolutions, Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA(1) | |||||||||||||
($ in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
Net income (loss) | $ | 114.8 | $ | (263.4 | ) | $ | (159.3 | ) | $ | (711.0 | ) | ||
Adjustments: | |||||||||||||
Depreciation & amortization | $ | 26.4 | $ | 27.9 | $ | 82.8 | $ | 95.5 | |||||
Income taxes | 27.6 | (2.5 | ) | 44.0 | 34.3 | ||||||||
Total interest expense, net | 7.7 | 19.4 | 54.8 | 59.9 | |||||||||
Impairments | — | 218.2 | 27.2 | 524.9 | |||||||||
Inventory step-up provision | 1.2 | — | 1.2 | 1.9 | |||||||||
Changes in fair value of financial instruments | (1.1 | ) | (1.1 | ) | (0.5 | ) | (0.4 | ) | |||||
Severance and restructuring costs | 6.3 | 20.6 | 22.9 | 34.5 | |||||||||
Exit and disposal costs | — | — | 13.3 | 6.1 | |||||||||
Acquisition and divestiture costs | — | — | — | 2.8 | |||||||||
Loss (gain) on sale of business | (64.3 | ) | 0.7 | (24.3 | ) | (74.2 | ) | ||||||
Settlement charges, net | 10.0 | — | 120.2 | — | |||||||||
Contingent consideration milestones | (30.0 | ) | — | (30.0 | ) | — | |||||||
Other expense (income), net items | 6.7 | — | 9.8 | — | |||||||||
Total adjustments | $ | (9.5 | ) | $ | 283.2 | $ | 321.4 | $ | 685.3 | ||||
Adjusted EBITDA | $ | 105.3 | $ | 19.8 | $ | 162.1 | $ | (25.7 | ) |
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 September 30, 2024 (unaudited, in millions) | Commercial Products | MCM Products | Services | Total Segment | Contracts & Grants | Total Revenues | |||||||||||
Revenues | $ | 95.3 | $ | 174.2 | $ | 14.3 | $ | 283.8 | $ | 10.0 | $ | 293.8 | |||||
Cost of sales or services | 47.2 | 54.0 | 21.4 | 122.6 | |||||||||||||
Gross margin | $ | 48.1 | $ | 120.2 | $ | (7.1 | ) | $ | 161.2 | ||||||||
Gross margin % | 50 | % | 69 | % | (50 | )% | 57 | % | |||||||||
Add back: | |||||||||||||||||
Inventory step-up provision | $ | — | $ | 1.2 | $ | — | $ | 1.2 | |||||||||
Restructuring costs | — | 4.9 | 0.1 | 5.0 | |||||||||||||
Adjusted gross margin | $ | 48.1 | $ | 126.3 | $ | (7.0 | ) | $ | 167.4 | ||||||||
Adjusted gross margin % | 50 | % | 73 | % | (49 | )% | 59 | % |
Three Months Ended September 30, 2023 (unaudited, in millions) | Commercial Products | MCM Products | Services | Total Segment | Contracts & Grants | Total Revenues | |||||||||||
Revenues | $ | 142.1 | $ | 107.7 | $ | 14.2 | $ | 264.0 | $ | 6.5 | $ | 270.5 | |||||
Cost of sales or services | 60.0 | 72.5 | 44.3 | 176.8 | |||||||||||||
Gross margin | $ | 82.1 | $ | 35.2 | $ | (30.1 | ) | $ | 87.2 | ||||||||
Gross margin % | 58 | % | 33 | % | (212 | )% | 33 | % | |||||||||
Add back: | |||||||||||||||||
Changes in fair value of financial instruments | $ | — | $ | (1.1 | ) | $ | — | $ | (1.1 | ) | |||||||
Restructuring costs | — | 5.0 | 8.1 | 13.1 | |||||||||||||
Adjusted gross margin | $ | 82.1 | $ | 39.1 | $ | (22.0 | ) | $ | 99.2 | ||||||||
Adjusted gross margin % | 58 | % | 36 | % | (155 | )% | 38 | % |
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) | |||||||||||||||||
Nine Months Ended September 30, 2024 (unaudited, in millions) | Commercial Products | MCM Products | Services1 | Total Segment | Contracts & Grants | Total Revenues | |||||||||||
Revenues | $ | 333.8 | $ | 393.0 | $ | 97.5 | $ | 824.3 | $ | 24.6 | $ | 848.9 | |||||
Cost of sales or services | 152.7 | 147.3 | 263.3 | 563.3 | |||||||||||||
Gross margin | $ | 181.1 | $ | 245.7 | $ | (165.8 | ) | $ | 261.0 | ||||||||
Gross margin % | 54 | % | 63 | % | (170 | )% | 32 | % | |||||||||
Add back: | |||||||||||||||||
Changes in fair value of financial instruments | $ | — | $ | 0.6 | $ | — | $ | 0.6 | |||||||||
Inventory step-up provision | — | 1.2 | — | 1.2 | |||||||||||||
Settlement charges, net | — | — | 110.2 | 110.2 | |||||||||||||
Restructuring costs | — | 7.5 | 0.3 | 7.8 | |||||||||||||
Adjusted gross margin | $ | 181.1 | $ | 255.0 | $ | (55.3 | ) | $ | 380.8 | ||||||||
Adjusted gross margin %(1) | 54 | % | 65 | % | (57 | )% | 46 | % | |||||||||
(1) Total Segment results for the nine months ended September 30, 2024 includes |
Nine Months Ended September 30, 2023 (in millions) | Commercial Products | MCM Products | Services | Total Segment | Contracts & Grants | Total Revenues | |||||||||||
Revenues | $ | 386.2 | $ | 309.2 | $ | 57.7 | $ | 753.1 | $ | 19.6 | $ | 772.7 | |||||
Cost of sales or services | 160.2 | 208.4 | 151.7 | 520.3 | |||||||||||||
Gross margin | $ | 226.0 | $ | 100.8 | $ | (94.0 | ) | $ | 232.8 | ||||||||
Gross margin % | 59 | % | 33 | % | (163 | )% | 31 | % | |||||||||
Add back: | |||||||||||||||||
Changes in fair value of financial instruments | $ | — | $ | (0.4 | ) | $ | — | $ | (0.4 | ) | |||||||
Inventory step-up provision | — | 1.9 | — | 1.9 | |||||||||||||
Restructuring costs | — | 7.0 | 8.1 | 15.1 | |||||||||||||
Adjusted gross margin | $ | 226.0 | $ | 109.3 | $ | (85.9 | ) | $ | 249.4 | ||||||||
Adjusted gross margin % | 59 | % | 35 | % | (149 | )% | 33 | % |
Emergent BioSolutions, Inc. Reconciliation of Net Loss Forecast to Adjusted Net Income (Loss) Forecast | ||
($ in millions) | 2024 Full Year Forecast | Source |
Net loss | ||
Adjustments: | ||
Non-cash amortization charges | Amortization of intangible assets and Other Income (Expense) | |
Changes in fair value of financial instruments | (1) | Other Income (Expense) |
Impairments | 27 | Impairment of long-lived assets |
Severance and restructuring costs | 23 | Cost of MCM Products, Cost of Services, SG&A and R&D |
Inventory step-up provision | 1 | Cost of MCM Products |
Exit and disposal costs | 13 | R&D |
Loss (gain) on sale of business | (24) | Other Income (Expense) |
Settlement charges, net | 120 | Cost of Services and SG&A |
Contingent consideration milestones | (30) | Other Income (Expense) |
Other expense (income), net items | 10 | Other Income (Expense) |
Tax effect | (51) | |
Total adjustments: | ||
Adjusted net loss |
Reconciliation of Net Loss Forecast to Adjusted EBITDA Forecast | |
($ in millions) | 2024 Full Year Forecast |
Net loss | |
Adjustments: | |
Depreciation & amortization | |
Income taxes | 60 |
Total interest expense, net | 75 |
Impairments | 27 |
Inventory step-up provision | 1 |
Changes in fair value of financial instruments | (1) |
Severance and restructuring costs | 23 |
Exit and disposal costs | 13 |
Loss (gain) on sale of business | (24) |
Settlement charges, net | 120 |
Contingent consideration milestones | (30) |
Other expense (income), net items | 10 |
Total adjustments | |
Adjusted EBITDA |
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 | |
Contracts & Grants | (30) - (35) |
Total segment revenues | |
Cost of sales or services | |
Total segment gross margin | |
Total segment gross margin % | |
Add back: | |
Changes in fair value of financial instruments | |
Inventory step-up provision | 1 |
Settlement charges, net | 110 |
Restructuring costs | 8 |
Total segment adjusted gross margin | |
Total segment adjusted gross margin % |
FAQ
What were Emergent BioSolutions (EBS) Q3 2024 revenue and earnings?
How much did EBS NARCAN sales decline in Q3 2024?