Emergent BioSolutions Inc. (NYSE: EBS) today reported financial
results for the second quarter ended June 30, 2024.
"In the first half of the year, we made great
progress to stabilize our financial position by strategically
divesting assets, resolving several legacy issues, and securing
operational cash flow and working capital improvements," said Joe
Papa, president and CEO at Emergent. “As a result, we expect to
exceed $200 million in debt reduction by the end of the year. With
a sharpened focus on our core products, operationalizing a leaner,
more flexible footprint with our customers and patients at the
center of our efforts, we are well positioned to enhance Emergent’s
leadership position in public health preparedness."
FINANCIAL HIGHLIGHTS(1)
Q2 2024 vs. Q2 2023
| ($ in millions, except per
share amounts) |
Q2 2024 |
Q2 2023 |
% Change |
|
|
Total Revenues |
$ |
254.7 |
|
$ |
337.9 |
|
(25 |
)% |
| Net Loss |
$ |
(283.1 |
) |
$ |
(261.4 |
) |
(8 |
)% |
| Net Loss per Diluted
Share |
$ |
(5.38 |
) |
$ |
(5.16 |
) |
(4 |
)% |
| Adjusted Net Loss(2) |
$ |
(122.0 |
) |
$ |
(53.3 |
) |
(129 |
)% |
| Adjusted Net Loss per Diluted
Share(2) |
$ |
(2.32 |
) |
$ |
(1.05 |
) |
(121 |
)% |
| Adjusted EBITDA(2) |
$ |
(10.1 |
) |
$ |
55.9 |
|
(118 |
)% |
| Total Segment Gross Margin
%(2) |
(19 |
)% |
|
42 |
% |
|
|
| Total Segment Adjusted Gross
Margin %(2) |
|
26 |
% |
|
43 |
% |
|
|
| |
|
|
|
|
|
|
|
|
Year to Date ("YTD") 2024 vs. YTD
2023
| ($ in millions, except per
share amounts) |
YTD 2024 |
YTD 2023 |
% Change |
|
Total Revenues |
$ |
555.1 |
|
$ |
502.2 |
|
11 |
% |
| Net Loss |
$ |
(274.1 |
) |
$ |
(447.6 |
) |
39 |
% |
| Net Loss per Diluted
Share |
$ |
(5.23 |
) |
$ |
(8.86 |
) |
41 |
% |
| Adjusted Net Loss(2) |
$ |
(90.9 |
) |
$ |
(216.8 |
) |
58 |
% |
| Adjusted Net Loss per Diluted
Share(2) |
$ |
(1.73 |
) |
$ |
(4.29 |
) |
60 |
% |
| Adjusted EBITDA(2) |
$ |
56.8 |
|
$ |
(45.6 |
) |
* |
| Total Segment Gross Margin
%(2) |
|
18 |
% |
|
30 |
% |
|
| Total Segment Adjusted Gross
Margin %(2) |
|
39 |
% |
|
31 |
% |
|
|
|
|
|
|
| * % change is greater than +/-
200% |
|
|
|
| |
|
|
|
SELECT Q2 2024 AND OTHER RECENT BUSINESS
UPDATES
- Secured $250 million in U.S. government contract award
modifications for four medical countermeasures
- Announced a $30 million definitive agreement to sell the
Baltimore-Camden manufacturing site, which is expected to close in
the third quarter of 2024, subject to the satisfaction or waiver of
customary closing conditions
- Received $50 million in the third quarter related to the
resolution of the contract dispute with Janssen Pharmaceuticals,
Inc.
- Received $7 million for sale of an unimproved, empty building
in Canton, Massachusetts
- Expected receipt of $10 million development milestone payment
in the third quarter of 2024 from Bavarian Nordic as part of the
sale of the Travel Health Business
- Received $75 million for the sale of our RSDL® (Reactive Skin
Decontamination Lotion) product to SERB Pharmaceuticals, subject to
customary adjustments based on inventory value at closing
SECOND QUARTER 2024 FINANCIAL
PERFORMANCE(1)
Revenues
The Company uses the following categories in
discussing product/service level revenues:
- NARCAN® — comprises contributions from NARCAN®
Nasal Spray
- Other Commercial Products - comprised former
contributions from Vaxchora® and Vivotif®, which we sold to
Bavarian Nordic as part of our travel health business in May
2023
- Anthrax MCM — comprises contributions from
CYFENDUS®, previously known as AV7909, BioThrax®, Anthrasil® and
Raxibacumab
- Smallpox MCM — comprises contributions from
ACAM2000®, VIGIV and TEMBEXA®
- Other Products — comprises contributions from
BAT® and RSDL®
- Bioservices — comprises service and lease
revenues from the Bioservices business
| ($ in millions) |
Q2 2024 |
Q2 2023 |
% Change |
| Product sales,
net:(3) |
|
|
|
|
NARCAN® |
$ |
120.0 |
|
$ |
133.9 |
|
(10 |
)% |
|
Other Commercial Products |
|
— |
|
|
4.0 |
|
|
NM |
|
Anthrax MCM |
|
38.7 |
|
|
21.1 |
|
83 |
% |
|
Smallpox MCM |
|
17.9 |
|
|
123.8 |
|
(86 |
)% |
|
Other Products |
|
6.8 |
|
|
19.4 |
|
(65 |
)% |
|
Total Product sales, net |
$ |
183.4 |
|
$ |
302.2 |
|
(39 |
)% |
| |
|
|
|
|
Bioservices: |
|
|
|
|
Services |
$ |
64.5 |
|
$ |
26.4 |
|
144 |
% |
|
Leases |
|
0.2 |
|
|
2.7 |
|
(93 |
)% |
|
Total Bioservices revenues |
$ |
64.7 |
|
$ |
29.1 |
|
122 |
% |
| |
|
|
|
| Contracts and
grants |
$ |
6.6 |
|
$ |
6.6 |
|
— |
% |
| |
|
|
|
|
Total revenues |
$ |
254.7 |
|
$ |
337.9 |
|
(25 |
)% |
| |
|
|
|
| NM - Not
Meaningful |
| |
Products Sales, net
NARCAN®
For Q2 2024, revenues from NARCAN® (naloxone
HCl) Nasal Spray decreased $13.9 million, or 10%, as compared
with Q2 2023. The decrease was primarily driven by an unfavorable
price and volume mix in 2024 to U.S. public interest channels and
lower Canadian market sales, partially offset by higher sales of
over-the-counter (“OTC”) NARCAN® through wholesaler channels, which
launched in the third quarter of 2023.
Other Commercial Products
For Q2 2024, we did not receive revenues from
Other Commercial Products, representing a decrease of
$4.0 million compared with Q2 2023. During the second quarter
of 2023, the Company sold Vivotif® and Vaxchora® to Bavarian Nordic
as part of our travel health business.
Anthrax MCM
For Q2 2024, revenues from Anthrax MCM increased
$17.6 million, or 83%, as compared with Q2 2023. The increase
reflects the impact of timing of sales related to CYFENDUS® and
BioThrax®, partially offset by a decrease in Anthrasil® sales, due
to timing. Anthrax vaccine product sales are primarily made under
annual purchase options exercised by the USG. Fluctuations in
revenues result from the timing of the exercise of annual purchase
options, the timing of USG purchases, the availability of
governmental funding and the Company's delivery of orders that
follow.
Smallpox MCM
For Q2 2024, revenues from Smallpox MCM
decreased $105.9 million, or 86%, as compared with Q2 2023.
The decrease was primarily due to timing of USG purchases of
ACAM2000® and VIGIV. Fluctuations in revenues from Smallpox MCM
result from the timing of the exercise of annual purchase options
in the existing procurement contracts, the timing of USG purchases,
the availability of governmental funding and the Company's delivery
of orders that follow.
Other Products
For Q2 2024, revenues from Other Product sales
decreased $12.6 million, or 65%, as compared with Q2 2023. The
decrease was due to lower BAT® and RSDL® product sales, due to
timing of deliveries.
Bioservices Revenues
Services
For Q2 2024, revenues from Bioservices services
increased $38.1 million, or 144%, as compared with Q2 2023.
The increase was primarily attributable to the $50.0 million
arbitration settlement (the "Settlement Agreement") with Janssen
Pharmaceuticals, Inc. (“Janssen”), one of the Janssen
Pharmaceutical Companies of Johnson & Johnson, related to the
2022 termination of the manufacturing services agreement with
Janssen (the “Janssen Agreement”), coupled with an increase in
production at our Camden facility. The increase was partially
offset by lower production at the Company's Canton and Winnipeg
facilities coupled with the prior year quarter recognition of
revenue related to the resolution of a customer’s outstanding
obligation.
Leases
For Q2 2024, revenues from Bioservices leases
decreased $2.5 million, or 93%, as compared with Q2 2023. The
decrease was related to the completion of a lease for a Bioservices
customer at our Canton facility.
Contracts and Grants
For Q2 2024, revenues from contracts and grants
was consistent with Q2 2023.
Operating Expenses
| ($ in millions) |
Q2 2024 |
Q2 2023 |
% Change |
|
Cost of Commercial product sales |
$ |
53.4 |
|
$ |
54.4 |
|
(2 |
)% |
| Cost of MCM product sales |
|
31.1 |
|
|
80.5 |
|
(61 |
)% |
| Cost of Bioservices |
|
211.6 |
|
|
55.7 |
|
|
* |
| Impairment of long-lived
assets |
|
27.2 |
|
|
306.7 |
|
(91 |
)% |
|
Research and development (“R&D”) |
|
32.7 |
|
|
26.0 |
|
26 |
% |
| Selling, general and
administrative (“SG&A”) |
|
85.9 |
|
|
91.4 |
|
(6 |
)% |
| Amortization of intangible
assets |
|
16.3 |
|
|
16.1 |
|
1 |
% |
|
Total operating expenses |
$ |
458.2 |
|
$ |
630.8 |
|
(27 |
)% |
|
|
|
|
|
| * % change is greater than +/-
200% |
|
|
|
| |
Cost of Commercial Product Sales
For Q2 2024, cost of Commercial Product sales
decreased $1.0 million, or 2%, as compared with Q2 2023. The
decrease was primarily due to no current period costs related to
Vivotif® and Vaxchora®, which were sold to Bavarian Nordic as part
of our travel health business, partially offset by higher NARCAN®
expense as a result of increased unit volume.
Cost of MCM Product Sales
For Q2 2024, cost of MCM Product sales decreased
$49.4 million, or 61%, as compared with Q2 2023. The decrease
was primarily due to lower sales of ACAM2000®, BAT®, RSDL® and
Anthrasil®, lower allocations to Cost of MCM Product sales at our
Bayview facility and a reduction in Trobigard® related costs, due
to the Belgium Federal Agency for Medicines and Health Products'
approval of the Company's request to revoke the Market
Authorization for Trobigard® (the "Trobigard® revocation"). This
decrease was partially offset by higher shutdown costs, Raxibacumab
inventory reserves and overhead allocations at our Winnipeg
facility.
Cost of Bioservices
For Q2 2024, cost of Bioservices increased
$155.9 million as compared with Q2 2023. The increase was
primarily due to the Settlement Agreement with Janssen and
resulting write-down of related assets to net realizable value,
partially offset by a decrease in production at the Company's
Canton facility and a decrease in overhead costs at our Maryland
facilities.
Impairment of Long-Lived Assets
For Q2 2024, Impairment of long-lived assets
decreased $279.5 million, or 91%, as compared with Q2 2023.
The decrease was due to a $27.2 million non-cash impairment
charge in the second quarter of 2024 related to our Bayview and
Rockville asset groups within the Bioservices reporting unit,
compared to a $306.7 million non-cash impairment charge
recorded in the second quarter of 2023 related to our Camden,
Bayview and Rockville asset groups within the Bioservices reporting
unit.
Research and Development Expenses
For Q2 2024, R&D expenses increased
$6.7 million, or 26%, as compared with Q2 2023. The increase
was primarily due to write-offs related to program terminations
during the period and an increase in R&D overhead and severance
costs. The increase was partially offset by the sale of our
development program for CHIKV VLP to Bavarian Nordic and reduction
in related overhead costs driven by the headcount reductions and an
overall decrease in spend for funded projects.
Selling, General and Administrative Expenses
For Q2 2024, SG&A expenses decreased
$5.5 million, or 6%, as compared with Q2 2023. The decrease
was primarily due to lower employee related expenses and
compensation as a result of restructuring initiatives during 2023,
coupled with a decrease in marketing expense. The decrease was
partially offset by higher legal services fees for disputes and
other corporate initiatives, as well as higher restructuring
costs.
ADDITIONAL FINANCIAL INFORMATION(1)
Capital Expenditures
| ($ in millions) |
Q2 2024 |
Q2 2023 |
% Change |
|
Capital expenditures |
$ |
4.6 |
|
$ |
12.5 |
|
(63 |
)% |
| Capital expenditures as a % of
total revenues |
|
2 |
% |
|
4 |
% |
|
|
For Q2 2024, capital expenditures decreased
largely due to lower product development activities across the
Company’s facilities.
SEGMENT INFORMATION
In the fourth quarter of 2023, we realigned our
reportable operating segments to reflect recent changes in our
internal operating and reporting process. The Company now manages
the business with a focus on three reportable segments: (1) 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. The Company evaluates the performance of these
reportable segments based on revenue and segment adjusted gross
margin, which is a non-GAAP financial measure. Segment revenue
includes external customer sales, but does not include
inter-segment services. The Company does not allocate contracts and
grants, R&D, SG&A, amortization of intangible assets,
interest and other income (expense) or taxes to its evaluation of
the performance of these segments.
SECOND QUARTER 2024 SEGMENT
RESULTS
| ($ in
millions) |
Commercial Products |
|
|
Quarter Ended June 30, |
|
2024 |
2023 |
$ Change |
% Change |
|
Revenues |
$ |
120.0 |
|
$ |
137.9 |
|
$ |
(17.9 |
) |
(13 |
)% |
| Cost of
sales |
|
53.4 |
|
|
54.4 |
|
|
(1.0 |
) |
(2 |
)% |
| Gross
margin** |
$ |
66.6 |
|
$ |
83.5 |
|
$ |
(16.9 |
) |
(20 |
)% |
| Gross margin
%** |
|
56 |
% |
|
61 |
% |
|
|
|
| |
|
|
|
|
|
| Segment adjusted gross
margin(2) |
$ |
66.6 |
|
$ |
83.5 |
|
$ |
(16.9 |
) |
(20 |
)% |
| Segment adjusted gross
margin %(2) |
|
56 |
% |
|
61 |
% |
|
|
|
| |
|
|
|
|
|
|
** 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 $16.9
million, or 20%, to $66.6 million in the quarter, as compared with
$83.5 million in the prior year quarter. Commercial Products gross
margin percentage decreased 5 percentage points to 56% for the
quarter ended June 30, 2024. The decrease was largely due to an
unfavorable price and volume mix in 2024 for NARCAN® products,
partially offset by the sale of the products associated with our
travel health business to Bavarian Nordic. Commercial Products
segment adjusted gross margin is consistent with gross margin.
| ($ in
millions) |
MCM Products |
|
|
Quarter Ended June 30, |
|
2024 |
2023 |
$ Change |
% Change |
|
Revenues |
$ |
63.4 |
|
$ |
164.3 |
|
$ |
(100.9 |
) |
(61 |
)% |
| Cost of
sales |
|
31.1 |
|
|
80.5 |
|
|
(49.4 |
) |
(61 |
)% |
| Gross
margin** |
$ |
32.3 |
|
$ |
83.8 |
|
$ |
(51.5 |
) |
(61 |
)% |
| Gross margin
%** |
|
51 |
% |
|
51 |
% |
|
|
|
| Add back: |
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
0.1 |
|
$ |
0.4 |
|
$ |
(0.3 |
) |
(75 |
)% |
|
Restructuring costs |
|
2.7 |
|
|
— |
|
|
2.7 |
|
|
NM |
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
(1.9 |
) |
|
NM |
| Segment adjusted gross
margin(2) |
$ |
35.1 |
|
$ |
86.1 |
|
$ |
(51.0 |
) |
(59 |
)% |
| Segment adjusted gross
margin %(2) |
|
55 |
% |
|
52 |
% |
|
|
|
| |
|
|
|
|
|
|
** Gross margin is calculated as revenues less cost of sales. Gross
margin % is calculated as gross margin divided by revenues. |
|
|
NM - Not Meaningful |
|
|
|
|
MCM Products gross margin decreased $51.5
million, or 61%, to $32.3 million in the quarter, as compared with
$83.8 million in the prior year quarter. MCM Products gross
margin percentage was consistent at 51% for the quarter ended June
30, 2024. MCM Product segment adjusted gross margin in the current
year period excludes the impact of non-cash items related to the
impact of restructuring costs of $2.7 million and the changes
in the fair value of contingent consideration of $0.1 million.
| ($ in
millions) |
Services |
|
Quarter Ended June 30, |
|
2024 |
2023 |
$ Change |
% Change |
|
Revenues |
$ |
64.7 |
|
$ |
29.1 |
|
$ |
35.6 |
|
122 |
% |
| Cost of
services |
|
211.6 |
|
|
55.7 |
|
|
155.9 |
|
|
* |
| Gross
margin** |
$ |
(146.9 |
) |
$ |
(26.6 |
) |
$ |
(120.3 |
) |
|
* |
| Gross margin
%** |
(227 |
)% |
(91 |
)% |
|
|
| Add back: |
|
|
|
|
|
Settlement charge, net |
$ |
110.2 |
|
$ |
— |
|
|
110.2 |
|
|
NM |
|
Restructuring costs |
|
0.4 |
|
|
— |
|
|
0.4 |
|
|
NM |
| Segment adjusted gross
margin(2) |
$ |
(36.3 |
) |
$ |
(26.6 |
) |
$ |
(9.7 |
) |
(36 |
)% |
| Segment adjusted gross
margin %(2) |
(56 |
)% |
(91 |
)% |
|
|
|
|
|
|
|
|
| * % change is greater than +/-
200% |
|
|
|
|
|
** 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 $120.3 million
to $(146.9) million in the quarter, as compared with $(26.6)
million in the prior year quarter. Services gross margin percentage
decreased 136 percentage points to (227)% for the quarter ended
June 30, 2024. The decrease was primarily due to the Settlement
Agreement with Janssen and resulting revenue and write-down of
related assets, coupled with lower production at the Company's
Canton and Winnipeg facilities, partially offset by an increase in
production at the Company’s Camden facility and a decrease in
overhead costs at our Maryland facilities. Services segment
adjusted gross margin in the current year period excludes the
impact of the settlement charge, net of $110.2 million and
restructuring costs of $0.4 million.
YTD 2024 SEGMENT
RESULTS
| ($ in
millions) |
Commercial Products |
|
Six Months Ended June 30, |
|
2024 |
|
2023 |
$ Change |
% Change |
| Revenues |
$ |
238.5 |
|
$ |
244.1 |
|
$ |
(5.6 |
) |
(2 |
)% |
|
Cost of sales |
|
105.5 |
|
|
100.2 |
|
|
5.3 |
|
5 |
% |
| Gross
margin** |
$ |
133.0 |
|
$ |
143.9 |
|
$ |
(10.9 |
) |
(8 |
)% |
| Gross margin
%** |
|
56 |
% |
|
59 |
% |
|
|
| |
|
|
|
|
| Segment adjusted gross
margin(2) |
$ |
133.0 |
|
$ |
143.9 |
|
$ |
(10.9 |
) |
(8 |
)% |
| Segment adjusted gross
margin %(2) |
|
56 |
% |
|
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 $10.9
million, or 8%, to $133.0 million for the six months ended June 30,
2024, as compared with $143.9 million for the six months ended June
30, 2023. Commercial Products gross margin percentage decreased 3
percentage points to 56% in 2024. The decrease was largely due to
an unfavorable price and volume mix in 2024 for NARCAN® products,
partially offset by the sale of the products associated with our
travel health business to Bavarian Nordic. Commercial Products
segment adjusted gross margin is consistent with gross margin.
| ($ in
millions) |
MCM Products |
|
Six Months Ended June 30, |
|
2024 |
|
2023 |
$ Change |
% Change |
|
Revenues |
$ |
218.8 |
|
$ |
201.5 |
|
$ |
17.3 |
|
9 |
% |
| Cost of
sales |
|
93.3 |
|
|
135.9 |
|
|
(42.6 |
) |
(31 |
)% |
| Gross
margin** |
$ |
125.5 |
|
$ |
65.6 |
|
$ |
59.9 |
|
91 |
% |
| Gross margin
%** |
|
57 |
% |
|
33 |
% |
|
|
| Add back: |
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
0.6 |
|
$ |
0.7 |
|
$ |
(0.1 |
) |
(14 |
)% |
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
(1.9 |
) |
|
NM |
|
Restructuring costs |
|
2.6 |
|
|
2.0 |
|
|
0.6 |
|
30 |
% |
| Segment adjusted gross
margin(2) |
$ |
128.7 |
|
$ |
70.2 |
|
$ |
58.5 |
|
83 |
% |
| Segment adjusted gross
margin %(2) |
|
59 |
% |
|
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 $59.9
million, or 91%, to $125.5 million for the six months ended June
30, 2024, as compared with $65.6 million for the six months ended
June 30, 2023. MCM Products gross margin percentage increased 24
percentage points to 57% for the six months ended June 30, 2024.
The increase was largely due to overall higher sales volumes with a
favorable product mix that was weighted more heavily to higher
margin products coupled with lower allocations to Cost of MCM
Product sales at our Bayview facility and lower shutdown related
costs, a reduction in Trobigard® related costs, due to the
Trobigard® revocation, and realization of previously adjusted
inventory values. MCM Product segment adjusted gross margin
excludes the impact of restructuring costs of $2.6 million and
changes in the fair value of contingent consideration of $0.6
million.
| ($ in
millions) |
Services |
|
Six Months Ended June 30, |
|
2024 |
2023 |
$ Change |
% Change |
|
Revenues |
$ |
83.2 |
|
$ |
43.5 |
|
$ |
39.7 |
|
91 |
% |
| Cost of
services |
|
241.9 |
|
|
107.4 |
|
|
134.5 |
|
125 |
% |
| Gross
margin** |
$ |
(158.7 |
) |
$ |
(63.9 |
) |
$ |
(94.8 |
) |
(148 |
)% |
| Gross margin
%** |
(191 |
)% |
(147 |
)% |
|
|
| Add back: |
|
|
|
|
|
Settlement charge, net |
$ |
110.2 |
|
$ |
— |
|
$ |
110.2 |
|
|
NM |
|
Restructuring costs |
|
0.2 |
|
|
— |
|
|
0.2 |
|
|
NM |
| Segment adjusted gross
margin(2) |
$ |
(48.3 |
) |
$ |
(63.9 |
) |
$ |
15.6 |
|
24 |
% |
| Segment adjusted gross
margin %(2) |
(58 |
)% |
(147 |
)% |
|
|
| |
|
|
|
|
|
** 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 $94.8 million,
or 148%, to ($158.7) million for the six months ended June 30,
2024, as compared with ($63.9) million for the six months ended
June 30, 2023. Services gross margin percentage decreased 44
percentage points to (191)% for the six months ended June 30, 2024.
The decrease was primarily due to the Settlement Agreement with
Janssen and resulting revenue and write-down of related assets,
partially offset by higher production at the Company’s Camden
Facility. Services segment adjusted gross margin in the current
year period excludes the impact of settlement charge, net of $110.2
million and restructuring costs of $0.2 million.
2024 FINANCIAL FORECAST
The Company provides the following updated
financial forecast for full year 2024 and initial forecast for Q3
2024, in both instances reflecting management's expectations based
on the most current information available.
Full Year 2024
|
METRIC($ in
millions) |
Updated Range(as of
08/06/2024) |
Previous Range(as of
05/01/2024) |
Previous Range(as of
03/06/2024) |
| Total
revenues |
$1,050 - $1,125 |
$1,000 - $1,100 |
$900 - $1,100 |
| Net loss |
$(314) - $(274) |
$(148) - $(98) |
$(183) - $(133) |
| Adjusted net
loss(2) |
$(115) - $(75) |
$(65) - $(15) |
$(130) - $(80) |
| Adjusted
EBITDA(2) |
$140 - $180 |
$125 - $175 |
$50 - $100 |
| Total segment adjusted
gross margin %(2) |
42% - 45% |
44% - 47% |
40% - 45% |
| |
|
|
|
| Segment Level
Revenue(4) |
|
|
|
|
Commercial Products |
$450 - $480 |
$460 - $500 |
$460 - $500 |
|
MCM Products |
$455 - $490 |
$440 - $490 |
$340 - $490 |
|
Services(5) |
$120 - $130 |
$70 - $80 |
$70 - $80 |
|
Key Assumptions($ and shares in millions) |
Updated Range(as of
08/06/2024) |
| Interest expense |
~$82 |
| R&D |
~7% of Revenue |
| Weighted avg. fully diluted
share count |
~53 |
| Capex |
~$30 |
| Depreciation &
amortization |
~$111 |
| |
|
Q3 2024
|
METRIC($ in
millions) |
Q3 2024 Forecast |
| Total
revenues |
$265 - $315 |
| |
|
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
$50.0 million related to the Settlement Agreement with
Janssen.
CONFERENCE CALL, PRESENTATION SUPPLEMENT AND WEBCAST
INFORMATION
Company management will host a conference call
at 5:00 pm eastern time today, August 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 Advance registration is required.
Visit
https://register.vevent.com/register/BI59bc8013f2c54ef296711d52848b0d4d
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/p7f4ooy9 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 Loss
- Adjusted Net 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 Loss and Adjusted Net
Loss per Diluted Share, which are non-GAAP financial measures, as
net loss and net loss per diluted share, respectively, excluding
the impact of changes in fair value of contingent consideration,
acquisition and divestiture-related costs, severance and
restructuring costs, other income (expense) items, settlement
charge, net, exit and disposal costs, impairment charges, gain
(loss) on sale of business and assets held for sale and non-cash
amortization charges. We use Adjusted Net Loss for the purpose of
calculating Adjusted Net Loss per Diluted Share. Management uses
Adjusted Net 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, changes in fair value of
contingent consideration, severance and restructuring costs, other
income (expense) items, settlement charge, net, impairments, gain
(loss) on sale of business and assets held for sale and acquisition
and divestiture-related costs. We believe that this non-GAAP
financial measure, when considered together with our GAAP financial
results and GAAP financial measures, provides management and
investors with a more complete understanding of our operating
results, including underlying trends. In addition, EBITDA is a
common alternative measure of operating performance used by many of
our competitors. It is used by investors, financial analysts,
rating agencies and others to value and compare the financial
performance of companies in our industry, although it may be
defined differently by different companies. Therefore, we also
believe that this non-GAAP financial measure, considered along with
corresponding GAAP financial measures, provides management and
investors with additional information for comparison of our
operating results with the operating results of other
companies.
We have included the definitions of Segment
Gross Margin and Segment Gross Margin %, which are GAAP financial
measures, below in order to more fully define the components of
certain non-GAAP financial measures presented in this press
release. We define Segment Gross Margin, as a segment's revenues,
less a segment's cost of sales or services. We define Segment Gross
Margin %, as Segment Gross Margin as a percentage of a segments
revenues. We define Segment Adjusted Gross Margin, which is a
non-GAAP financial measure as Segment Gross Margin excluding the
impact of restructuring costs and non-cash items related to changes
in the fair value of contingent consideration, settlement charge,
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 and changes in
the fair value of contingent consideration. We define Total Segment
Adjusted Gross Margin %, which is a non-GAAP financial measure, as
Total Segment Adjusted Gross 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 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 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 EbangaTM (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 services fees from our Bioservices customers; the results of
pending stockholder litigation and government investigations and
their potential impact on our business; our ability to comply with
the operating and financial covenants and the capital raise
requirements by the stated deadline required by our revolving
credit facility and our term loan facility under a senior secured
credit agreement, dated October 15, 2018, between the Company and
multiple lending institutions, as amended from time to time, as
well as our 3.875% Senior Unsecured Notes due 2028; our ability to
maintain adequate internal control over financial reporting and to
prepare accurate financial statements in a timely manner; 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 sale of
RSDL® to SERB Pharmaceuticals and the pending sale of our drug
product facility in Baltimore-Camden to Bora Pharmaceuticals
Injectibles Inc.; the impact of the organizational changes we
announced in January 2023, August 2023 and May 2024; our ability to
identify and acquire companies, businesses, products or product
candidates that satisfy our selection criteria; the impact of cyber
security incidents, including the risks from the unauthorized
access, interruption, failure or compromise of our information
systems or those of our business partners, collaborators or other
third parties; the success of our commercialization, marketing and
manufacturing capabilities and strategy; and the accuracy of our
estimates regarding future revenues, expenses, capital requirements
and needs for additional financing. The foregoing sets forth many,
but not all, of the factors that could cause actual results to
differ from our expectations in any forward-looking statement.
Readers should consider this cautionary statement, as well as the
risks identified in our periodic reports filed with the Securities
and Exchange Commission, when evaluating our forward-looking
statements.
Trademarks
Emergent®, BioThrax®, BaciThrax®, 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 ContactRich LindahlExecutive Vice
President, Chief Financial Officerlindahlr@ebsi.com |
Media ContactAssal HellmerVice President,
Communicationsmediarelations@ebsi.com |
|
Emergent BioSolutions Inc. Consolidated
Balance Sheets(unaudited, in millions, except per
share data) |
| |
| |
June 30, |
|
December 31, |
|
|
2024 |
|
|
|
2023 |
|
| ASSETS |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
69.7 |
|
|
$ |
111.7 |
|
|
Restricted cash |
|
1.3 |
|
|
|
— |
|
|
Accounts receivable, net |
|
196.3 |
|
|
|
191.0 |
|
|
Inventories, net |
|
317.5 |
|
|
|
328.9 |
|
|
Prepaid expenses and other current assets |
|
36.0 |
|
|
|
47.9 |
|
|
Assets held for sale |
|
33.7 |
|
|
|
— |
|
|
Total current assets |
|
654.5 |
|
|
|
679.5 |
|
| |
|
|
|
|
Property, plant and equipment, net |
|
306.2 |
|
|
|
382.8 |
|
|
Intangible assets, net |
|
534.1 |
|
|
|
566.6 |
|
|
Other assets |
|
18.7 |
|
|
|
194.3 |
|
|
Total assets |
$ |
1,513.5 |
|
|
$ |
1,823.2 |
|
| |
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
95.9 |
|
|
$ |
112.2 |
|
|
Accrued expenses |
|
17.2 |
|
|
|
18.6 |
|
|
Accrued compensation |
|
66.7 |
|
|
|
74.1 |
|
|
Debt, current portion |
|
415.2 |
|
|
|
413.7 |
|
|
Other current liabilities |
|
14.6 |
|
|
|
32.7 |
|
|
Liabilities held for sale |
|
10.1 |
|
|
|
— |
|
|
Total current liabilities |
|
619.7 |
|
|
|
651.3 |
|
| |
|
|
|
|
Debt, net of current portion |
|
447.0 |
|
|
|
446.5 |
|
|
Deferred tax liability |
|
34.8 |
|
|
|
47.2 |
|
|
Other liabilities |
|
25.7 |
|
|
|
28.9 |
|
|
Total liabilities |
$ |
1,127.2 |
|
|
$ |
1,173.9 |
|
| |
|
|
|
| Stockholders’ equity: |
|
|
|
|
Preferred stock, $0.001 par value per share; 15.0 shares
authorized, no shares issued and outstanding |
|
— |
|
|
|
— |
|
|
Common stock, $0.001 par value per share; 200.0 shares authorized,
58.5 and 57.8 shares issued; 52.9 and 52.2 shares outstanding,
respectively. |
|
0.1 |
|
|
|
0.1 |
|
|
Treasury stock, at cost, 5.6 and 5.6 common shares,
respectively |
|
(227.7 |
) |
|
|
(227.7 |
) |
|
Additional paid-in capital |
|
915.3 |
|
|
|
904.4 |
|
|
Accumulated other comprehensive loss, net |
|
(5.5 |
) |
|
|
(5.7 |
) |
|
Accumulated deficit |
|
(295.9 |
) |
|
|
(21.8 |
) |
|
Total stockholders’ equity |
$ |
386.3 |
|
|
$ |
649.3 |
|
|
Total liabilities and stockholders’ equity |
$ |
1,513.5 |
|
|
$ |
1,823.2 |
|
|
|
|
Emergent BioSolutions Inc. Consolidated
Statements of Operations(unaudited, in millions,
except per share data) |
|
|
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
Commercial Product sales |
$ |
120.0 |
|
|
$ |
137.9 |
|
|
$ |
238.5 |
|
|
$ |
244.1 |
|
| MCM Product sales |
|
63.4 |
|
|
|
164.3 |
|
|
|
218.8 |
|
|
|
201.5 |
|
|
Total Product sales, net |
|
183.4 |
|
|
|
302.2 |
|
|
|
457.3 |
|
|
|
445.6 |
|
| Bioservices: |
|
|
|
|
|
|
|
|
Services |
|
64.5 |
|
|
|
26.4 |
|
|
|
82.8 |
|
|
|
39.0 |
|
|
Leases |
|
0.2 |
|
|
|
2.7 |
|
|
|
0.4 |
|
|
|
4.5 |
|
|
Total Bioservices revenues |
|
64.7 |
|
|
|
29.1 |
|
|
|
83.2 |
|
|
|
43.5 |
|
| Contracts and grants |
|
6.6 |
|
|
|
6.6 |
|
|
|
14.6 |
|
|
|
13.1 |
|
|
Total revenues |
|
254.7 |
|
|
|
337.9 |
|
|
|
555.1 |
|
|
|
502.2 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
Cost of Commercial Product sales |
|
53.4 |
|
|
|
54.4 |
|
|
|
105.5 |
|
|
|
100.2 |
|
|
Cost of MCM Product sales |
|
31.1 |
|
|
|
80.5 |
|
|
|
93.3 |
|
|
|
135.9 |
|
|
Cost of Bioservices |
|
211.6 |
|
|
|
55.7 |
|
|
|
241.9 |
|
|
|
107.4 |
|
|
Impairment of long-lived assets |
|
27.2 |
|
|
|
306.7 |
|
|
|
27.2 |
|
|
|
306.7 |
|
|
Research and development |
|
32.7 |
|
|
|
26.0 |
|
|
|
47.8 |
|
|
|
66.7 |
|
|
Selling, general and administrative |
|
85.9 |
|
|
|
91.4 |
|
|
|
170.6 |
|
|
|
192.7 |
|
|
Amortization of intangible assets |
|
16.3 |
|
|
|
16.1 |
|
|
|
32.5 |
|
|
|
33.1 |
|
|
Total operating expenses |
|
458.2 |
|
|
|
630.8 |
|
|
|
718.8 |
|
|
|
942.7 |
|
| |
|
|
|
|
|
|
|
| Loss from
operations |
|
(203.5 |
) |
|
|
(292.9 |
) |
|
|
(163.7 |
) |
|
|
(440.5 |
) |
| |
|
|
|
|
|
|
|
| Other income
(expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
(23.6 |
) |
|
|
(28.6 |
) |
|
|
(47.9 |
) |
|
|
(46.5 |
) |
|
Gain (loss) on sale of business and assets held for sale |
|
(40.0 |
) |
|
|
74.9 |
|
|
|
(40.0 |
) |
|
|
74.9 |
|
|
Other, net |
|
(2.7 |
) |
|
|
(3.6 |
) |
|
|
(6.1 |
) |
|
|
1.3 |
|
|
Total other income (expense), net |
|
(66.3 |
) |
|
|
42.7 |
|
|
|
(94.0 |
) |
|
|
29.7 |
|
| |
|
|
|
|
|
|
|
| Loss before income
taxes |
|
(269.8 |
) |
|
|
(250.2 |
) |
|
|
(257.7 |
) |
|
|
(410.8 |
) |
| Income tax
provision |
|
13.3 |
|
|
|
11.2 |
|
|
|
16.4 |
|
|
|
36.8 |
|
|
Net loss |
$ |
(283.1 |
) |
|
$ |
(261.4 |
) |
|
$ |
(274.1 |
) |
|
$ |
(447.6 |
) |
| |
|
|
|
|
|
|
|
| Net loss per common
share |
|
|
|
|
|
|
|
|
Basic |
$ |
(5.38 |
) |
|
$ |
(5.16 |
) |
|
$ |
(5.23 |
) |
|
$ |
(8.86 |
) |
|
Diluted |
$ |
(5.38 |
) |
|
$ |
(5.16 |
) |
|
$ |
(5.23 |
) |
|
$ |
(8.86 |
) |
| |
|
|
|
|
|
|
|
| Shares used in
computing net loss per common share |
|
|
|
|
|
|
|
|
Basic |
|
52.6 |
|
|
|
50.7 |
|
|
|
52.4 |
|
|
|
50.5 |
|
|
Diluted |
|
52.6 |
|
|
|
50.7 |
|
|
|
52.4 |
|
|
|
50.5 |
|
|
Emergent BioSolutions Inc.Consolidated
Statements of Cash Flowsunaudited, in
millions) |
|
|
| |
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
| Operating
Activities |
|
|
|
|
Net loss |
$ |
(274.1 |
) |
|
$ |
(447.6 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Share-based compensation expense |
|
11.4 |
|
|
|
15.1 |
|
|
Depreciation and amortization |
|
56.4 |
|
|
|
67.5 |
|
|
Change in fair value of contingent obligations, net |
|
0.6 |
|
|
|
0.7 |
|
|
Amortization of deferred financing costs |
|
11.9 |
|
|
|
9.9 |
|
|
Deferred income taxes |
|
(12.4 |
) |
|
|
(6.4 |
) |
|
Loss (gain) on sale of business and assets held for sale |
|
40.0 |
|
|
|
(74.9 |
) |
|
Impairment of long-lived assets |
|
27.2 |
|
|
|
306.7 |
|
|
Other |
|
15.5 |
|
|
|
9.5 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(29.6 |
) |
|
|
(129.8 |
) |
|
Inventories |
|
(17.5 |
) |
|
|
(24.9 |
) |
|
Prepaid expenses and other assets |
|
160.0 |
|
|
|
(17.8 |
) |
|
Accounts payable |
|
0.2 |
|
|
|
10.9 |
|
|
Accrued expenses and other liabilities |
|
3.8 |
|
|
|
(13.8 |
) |
|
Long-term incentive plan accrual |
|
1.9 |
|
|
|
2.4 |
|
|
Accrued compensation |
|
(7.0 |
) |
|
|
(12.4 |
) |
|
Income taxes receivable and payable, net |
|
16.1 |
|
|
|
14.2 |
|
|
Contract liabilities |
|
(19.5 |
) |
|
|
(7.7 |
) |
|
Net cash used in operating activities |
|
(15.1 |
) |
|
|
(298.4 |
) |
| Investing
Activities |
|
|
|
|
Purchases of property, plant and equipment |
|
(15.4 |
) |
|
|
(27.6 |
) |
|
Proceeds from sale of business, net |
|
— |
|
|
|
270.2 |
|
|
Net cash provided by (used in) investing
activities |
|
(15.4 |
) |
|
|
242.6 |
|
| Financing
Activities |
|
|
|
|
Proceeds from revolving credit facility |
|
65.0 |
|
|
|
— |
|
|
Principal payments on revolving credit facility |
|
(61.5 |
) |
|
|
(347.8 |
) |
|
Principal payments on term loan facility |
|
(7.9 |
) |
|
|
(156.8 |
) |
|
Proceeds from share-based compensation activity |
|
0.7 |
|
|
|
1.3 |
|
|
Taxes paid for share-based compensation activity |
|
(0.6 |
) |
|
|
(2.3 |
) |
|
Debt issuance costs |
|
(5.9 |
) |
|
|
— |
|
|
Proceeds from at-the-market sale of stock, net of commissions and
expenses |
|
— |
|
|
|
8.2 |
|
|
Net cash used in financing activities: |
|
(10.2 |
) |
|
|
(497.4 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
— |
|
|
|
(0.8 |
) |
|
Net change in cash, cash equivalents and restricted cash |
|
(40.7 |
) |
|
|
(554.0 |
) |
| Cash, cash equivalents and
restricted cash, beginning of period |
|
111.7 |
|
|
|
642.6 |
|
| Cash, cash equivalents and
restricted cash, end of period |
$ |
71.0 |
|
|
$ |
88.6 |
|
| Supplemental cash flow
disclosures: |
|
|
|
| Cash paid for interest |
$ |
36.0 |
|
|
$ |
38.8 |
|
| Cash paid for income
taxes |
$ |
25.9 |
|
|
$ |
26.9 |
|
| Non-cash investing and
financing activities: |
|
|
|
|
Purchases of property, plant and equipment unpaid at period
end |
$ |
2.9 |
|
|
$ |
7.7 |
|
|
Gain on extinguishment of debt |
$ |
0.3 |
|
|
$ |
— |
|
| Reconciliation of cash
and cash equivalents and restricted cash: |
|
|
|
|
Cash and cash equivalents |
$ |
69.7 |
|
|
$ |
88.6 |
|
|
Restricted cash |
|
1.3 |
|
|
|
— |
|
|
Total |
$ |
71.0 |
|
|
$ |
88.6 |
|
|
|
|
Emergent BioSolutions, Inc.Reconciliation
of Non-GAAP Financial MeasuresReconciliation of
Net Loss and Net Loss per Diluted Share to Adjusted Net Loss and
Adjusted Net Loss per Diluted Share(1) |
| |
| ($ in millions,
except per share value) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Source |
|
Net loss |
$ |
(283.1 |
) |
$ |
(261.4 |
) |
|
$ |
(274.1 |
) |
$ |
(447.6 |
) |
|
| Adjustments: |
|
|
|
|
|
|
|
Non-cash amortization charges |
$ |
21.1 |
|
$ |
25.0 |
|
|
$ |
44.3 |
|
$ |
43.0 |
|
Amortization of intangible
assets, Other Income |
|
Changes in fair value of contingent consideration |
|
0.1 |
|
|
0.4 |
|
|
|
0.6 |
|
|
0.7 |
|
Cost of MCM Products |
|
Impairments |
|
27.2 |
|
|
306.7 |
|
|
|
27.2 |
|
|
306.7 |
|
Impairment of long-lived
assets |
|
Severance and restructuring costs |
|
17.1 |
|
|
4.1 |
|
|
|
16.6 |
|
|
13.8 |
|
Cost of MCM Products, Cost of
Services, SG&A and R&D |
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
|
— |
|
|
1.9 |
|
Cost of MCM Products |
|
Acquisition and divestiture costs |
|
— |
|
|
1.8 |
|
|
|
— |
|
|
2.9 |
|
SG&A |
|
Exit and disposal costs |
|
13.3 |
|
|
6.1 |
|
|
|
13.3 |
|
|
6.1 |
|
R&D |
|
Loss (gain) on sale of business and assets held for sale |
|
40.0 |
|
|
(74.9 |
) |
|
|
40.0 |
|
|
(74.9 |
) |
Other Income (Expense) |
|
Settlement charge, net |
|
110.2 |
|
|
— |
|
|
|
110.2 |
|
|
— |
|
Cost of Services |
|
Other income (expense), net item |
|
— |
|
|
— |
|
|
|
3.1 |
|
|
— |
|
Other Income (Expense) |
|
Tax effect |
|
(67.9 |
) |
|
(63.0 |
) |
|
|
(72.1 |
) |
|
(69.4 |
) |
|
| Total adjustments: |
$ |
161.1 |
|
$ |
208.1 |
|
|
$ |
183.2 |
|
$ |
230.8 |
|
|
| Adjusted net
loss |
$ |
(122.0 |
) |
$ |
(53.3 |
) |
|
$ |
(90.9 |
) |
$ |
(216.8 |
) |
|
| Net loss per diluted
share |
$ |
(5.38 |
) |
$ |
(5.16 |
) |
|
$ |
(5.23 |
) |
$ |
(8.86 |
) |
|
| Adjustments: |
|
|
|
|
|
|
|
Non-cash amortization charges |
$ |
0.40 |
|
$ |
0.49 |
|
|
$ |
0.86 |
|
$ |
0.85 |
|
Amortization of intangible
assets, Other Income |
|
Changes in fair value of contingent consideration |
|
— |
|
|
0.01 |
|
|
|
0.01 |
|
|
0.01 |
|
Cost of MCM Products |
|
Impairments |
|
0.52 |
|
|
6.05 |
|
|
|
0.52 |
|
|
6.07 |
|
Impairment of long-lived
assets |
|
Severance and restructuring costs |
|
0.32 |
|
|
0.08 |
|
|
|
0.32 |
|
|
0.27 |
|
Cost of MCM Products, Cost of
Services, SG&A and R&D |
|
Inventory step-up provision |
|
— |
|
|
0.04 |
|
|
|
— |
|
|
0.04 |
|
Cost of MCM Products |
|
Acquisition and divestiture costs |
|
— |
|
|
0.04 |
|
|
|
— |
|
|
0.06 |
|
SG&A |
|
Exit and disposal costs |
|
0.25 |
|
|
0.12 |
|
|
|
0.25 |
|
|
0.12 |
|
R&D |
|
Loss (gain) on sale of business and assets held for sale |
|
0.76 |
|
|
(1.48 |
) |
|
|
0.76 |
|
|
(1.48 |
) |
Other Income (Expense) |
|
Settlement charge, net |
|
2.10 |
|
|
— |
|
|
|
2.10 |
|
|
— |
|
Cost of Services |
|
Other income (expense), net item |
|
— |
|
|
— |
|
|
|
0.06 |
|
|
— |
|
Other Income (Expense) |
|
Tax effect |
|
(1.29 |
) |
|
(1.24 |
) |
|
|
(1.38 |
) |
|
(1.37 |
) |
|
| Total adjustments: |
$ |
3.06 |
|
$ |
4.11 |
|
|
$ |
3.50 |
|
$ |
4.57 |
|
|
| Adjusted net loss per
diluted share |
$ |
(2.32 |
) |
$ |
(1.05 |
) |
|
$ |
(1.73 |
) |
$ |
(4.29 |
) |
|
| Diluted shares used in
computing Adjusted net loss per diluted share |
|
52.6 |
|
|
50.7 |
|
|
|
52.4 |
|
|
50.5 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emergent BioSolutions, Inc.Reconciliation
of Net Loss to Adjusted EBITDA(1) |
|
|
| ($ in
millions) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
Net loss |
$ |
(283.1 |
) |
$ |
(261.4 |
) |
|
$ |
(274.1 |
) |
$ |
(447.6 |
) |
| Adjustments: |
|
|
|
|
|
|
Depreciation & amortization |
$ |
28.5 |
|
$ |
32.9 |
|
|
$ |
56.4 |
|
$ |
67.5 |
|
|
Income taxes |
|
13.3 |
|
|
11.2 |
|
|
|
16.4 |
|
|
36.8 |
|
|
Total interest expense, net |
|
23.3 |
|
|
27.1 |
|
|
|
47.1 |
|
|
40.5 |
|
|
Impairments |
|
27.2 |
|
|
306.7 |
|
|
|
27.2 |
|
|
306.7 |
|
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
|
— |
|
|
1.9 |
|
|
Changes in fair value of contingent consideration |
|
0.1 |
|
|
0.4 |
|
|
|
0.6 |
|
|
0.7 |
|
|
Severance and restructuring costs |
|
17.1 |
|
|
4.1 |
|
|
|
16.6 |
|
|
13.8 |
|
|
Exit and disposal costs |
|
13.3 |
|
|
6.1 |
|
|
|
13.3 |
|
|
6.1 |
|
|
Acquisition and divestiture costs |
|
— |
|
|
1.8 |
|
|
|
— |
|
|
2.9 |
|
|
Loss (gain) on sale of business and assets held for sale |
|
40.0 |
|
|
(74.9 |
) |
|
|
40.0 |
|
|
(74.9 |
) |
|
Settlement charge, net |
|
110.2 |
|
|
— |
|
|
|
110.2 |
|
|
— |
|
|
Other income (expense), net item |
|
— |
|
|
— |
|
|
|
3.1 |
|
|
— |
|
| Total adjustments |
$ |
273.0 |
|
$ |
317.3 |
|
|
$ |
330.9 |
|
$ |
402.0 |
|
| Adjusted
EBITDA |
$ |
(10.1 |
) |
$ |
55.9 |
|
|
$ |
56.8 |
|
$ |
(45.6 |
) |
| |
|
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
June 30, 2024(unaudited, in millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
|
Revenues |
$ |
120.0 |
|
$ |
63.4 |
|
$ |
64.7 |
|
|
$ |
248.1 |
|
$ |
6.6 |
|
$ |
254.7 |
|
| |
|
|
|
|
|
|
|
| Cost of sales or
services |
|
53.4 |
|
|
31.1 |
|
|
211.6 |
|
|
|
296.1 |
|
|
|
| |
|
|
|
|
|
|
|
| Gross
margin |
$ |
66.6 |
|
$ |
32.3 |
|
$ |
(146.9 |
) |
|
$ |
(48.0 |
) |
|
|
| Gross margin
% |
|
56 |
% |
|
51 |
% |
(227 |
)% |
|
(19 |
)% |
|
|
| |
|
|
|
|
|
|
|
| Add
back: |
|
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.1 |
|
$ |
— |
|
|
$ |
0.1 |
|
|
|
|
Settlement charge, net |
|
— |
|
|
— |
|
|
110.2 |
|
|
|
110.2 |
|
|
|
|
Restructuring costs |
|
— |
|
|
2.7 |
|
|
0.4 |
|
|
|
3.1 |
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted gross
margin |
$ |
66.6 |
|
$ |
35.1 |
|
$ |
(36.3 |
) |
|
$ |
65.4 |
|
|
|
| Adjusted gross margin
%(1) |
|
56 |
% |
|
55 |
% |
(56 |
)% |
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total Segment results for the three months ended June 30, 2024
includes $50.0 million attributable to the Settlement
Agreement with Janssen. The revenue and cost of services is related
to raw materials purchased for the Janssen Agreement which Janssen
had not reimbursed. Excluding the revenue and cost of services
impacts of the Settlement Agreement, Total Segment Adjusted Gross
Margin % would have been 7% higher for the three months ended June
30, 2024. |
| Three Months Ended
June 30, 2023(unaudited, in millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
|
Revenues |
$ |
137.9 |
|
$ |
164.3 |
|
$ |
29.1 |
|
|
$ |
331.3 |
|
$ |
6.6 |
|
$ |
337.9 |
|
| |
|
|
|
|
|
|
|
| Cost of sales or
services |
|
54.4 |
|
|
80.5 |
|
|
55.7 |
|
|
|
190.6 |
|
|
|
| |
|
|
|
|
|
|
|
| Gross
margin |
$ |
83.5 |
|
$ |
83.8 |
|
$ |
(26.6 |
) |
|
$ |
140.7 |
|
|
|
| Gross margin
% |
|
61 |
% |
|
51 |
% |
(91 |
)% |
|
|
42 |
% |
|
|
| |
|
|
|
|
|
|
|
| Add
back: |
|
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.4 |
|
$ |
— |
|
|
$ |
0.4 |
|
|
|
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
— |
|
|
|
1.9 |
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted gross
margin |
$ |
83.5 |
|
$ |
86.1 |
|
$ |
(26.6 |
) |
|
$ |
143.0 |
|
|
|
| Adjusted gross margin
% |
|
61 |
% |
|
52 |
% |
(91 |
)% |
|
|
43 |
% |
|
|
| |
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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) |
| |
| Six Months Ended June
30, 2024(unaudited, in millions) |
Commercial Products |
MCM Products |
Services1 |
|
Total Segment |
Contracts & Grants |
Total Revenues |
|
Revenues |
$ |
238.5 |
|
$ |
218.8 |
|
$ |
83.2 |
|
|
$ |
540.5 |
|
$ |
14.6 |
|
$ |
555.1 |
|
| |
|
|
|
|
|
|
|
| Cost of sales or
services |
|
105.5 |
|
|
93.3 |
|
|
241.9 |
|
|
|
440.7 |
|
|
|
| |
|
|
|
|
|
|
|
| Gross
margin |
$ |
133.0 |
|
$ |
125.5 |
|
$ |
(158.7 |
) |
|
$ |
99.8 |
|
|
|
| Gross margin
% |
|
56 |
% |
|
57 |
% |
(191 |
)% |
|
|
18 |
% |
|
|
| |
|
|
|
|
|
|
|
| Add
back: |
|
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.6 |
|
|
— |
|
|
$ |
0.6 |
|
|
|
|
Settlement charge, net |
|
— |
|
|
— |
|
$ |
110.2 |
|
|
|
110.2 |
|
|
|
|
Restructuring costs |
|
— |
|
|
2.6 |
|
|
0.2 |
|
|
|
2.8 |
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted gross
margin |
$ |
133.0 |
|
$ |
128.7 |
|
$ |
(48.3 |
) |
|
$ |
213.4 |
|
|
|
| Adjusted gross margin
%(1) |
|
56 |
% |
|
59 |
% |
(58 |
)% |
|
|
39 |
% |
|
|
| |
|
|
|
|
|
|
|
|
(1) Total Segment results for the six months ended June 30, 2024
includes $50.0 million attributable to the Settlement
Agreement with Janssen. The revenue and cost of services is related
to raw materials purchased for the Janssen Agreement which Janssen
had not reimbursed. Excluding the impacts of the Settlement
Agreement, Total Segment Adjusted Gross Margin % would have been 4%
higher for the six months ended June 30, 2024. |
| Six Months Ended June
30, 2023(in millions) |
Commercial Products |
MCM Products |
Services |
|
Total Segment |
Contracts & Grants |
Total Revenues |
|
Revenues |
$ |
244.1 |
|
$ |
201.5 |
|
$ |
43.5 |
|
|
$ |
489.1 |
|
$ |
13.1 |
|
$ |
502.2 |
|
| |
|
|
|
|
|
|
|
| Cost of sales or
services |
|
100.2 |
|
|
135.9 |
|
|
107.4 |
|
|
|
343.5 |
|
|
|
| |
|
|
|
|
|
|
|
| Gross
margin |
$ |
143.9 |
|
$ |
65.6 |
|
$ |
(63.9 |
) |
|
$ |
145.6 |
|
|
|
| Gross margin
% |
|
59 |
% |
|
33 |
% |
(147 |
)% |
|
|
30 |
% |
|
|
| |
|
|
|
|
|
|
|
| Add
back: |
|
|
|
|
|
|
|
|
Changes in fair value of contingent consideration |
$ |
— |
|
$ |
0.7 |
|
$ |
— |
|
|
$ |
0.7 |
|
|
|
|
Inventory step-up provision |
|
— |
|
|
1.9 |
|
|
— |
|
|
|
1.9 |
|
|
|
|
Restructuring costs |
|
— |
|
|
2.0 |
|
|
— |
|
|
|
2.0 |
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted gross
margin |
$ |
143.9 |
|
$ |
70.2 |
|
$ |
(63.9 |
) |
|
$ |
150.2 |
|
|
|
| Adjusted gross margin
% |
|
59 |
% |
|
35 |
% |
(147 |
)% |
|
|
31 |
% |
|
|
|
Emergent BioSolutions, Inc.Reconciliation
of Net Loss Forecast to Adjusted Net Loss Forecast |
|
|
|
($ in millions) |
2024 Full Year Forecast |
Source |
| Net loss |
$(314) - $(274) |
|
|
Adjustments: |
|
|
|
Non-cash amortization charges |
$65 |
Amortization of intangible
assets, Other Income |
|
Changes in fair value of contingent consideration |
1 |
Cost of MCM Products |
|
Impairments |
27 |
Impairment of long-lived
assets |
|
Severance and restructuring costs |
21 |
Cost of MCM Products, Cost of
Services, SG&A and R&D |
|
Exit and disposal costs |
13 |
R&D |
|
Loss (gain) on sale of business and assets held for sale |
40 |
Other Income (Expense) |
|
Settlement charge, net |
110 |
Cost of Services |
|
Other income (expense), net item |
3 |
Other Income (Expense) |
| Tax effect |
(81) |
|
| Total adjustments: |
$199 |
|
| Adjusted net
loss |
$(115) - $(75) |
|
|
Reconciliation of Net Loss Forecast to Adjusted EBITDA
Forecast |
| |
|
($ in millions) |
2024 Full Year Forecast |
| Net loss |
$(314) - $(274) |
| Adjustments: |
|
|
Depreciation & amortization |
$111 |
|
Income taxes |
46 |
|
Total interest expense, net |
82 |
|
Impairments |
27 |
|
Changes in fair value of contingent consideration |
1 |
|
Severance and restructuring costs |
21 |
|
Exit and disposal costs |
13 |
|
Loss (gain) on sale of business and assets held for sale |
40 |
|
Settlement charge, net |
110 |
|
Other income (expense), net item |
3 |
|
Total adjustments |
$454 |
| Adjusted
EBITDA |
$140 - $180 |
|
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 |
$1,050 - $1,125 |
|
Contracts & Grants |
(25) |
| Total segment
revenues |
$1,025 - $1,100 |
| |
|
| Cost of sales or
services |
$707 - $719 |
| Total segment gross
margin |
$318 - $381 |
| Total segment gross
margin % |
31% - 35% |
| Add
back: |
|
|
Changes in fair value of contingent consideration |
$1 |
|
Settlement charge, net |
$110 |
|
Restructuring costs |
$3 |
| Total segment adjusted
gross margin |
$432 - $495 |
| Total segment adjusted
gross margin % |
42% - 45% |
Emergent Biosolutions (NYSE:EBS)
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From Dec 2024 to Jan 2025
Emergent Biosolutions (NYSE:EBS)
Historical Stock Chart
From Jan 2024 to Jan 2025
