Emergent BioSolutions (EBS) Prelim. FY14 Revenue Outlook Relatively Flat

Emergent BioSolutions (NYSE: EBS) announced preliminary unaudited 2014 financial results and provided guidance for 2015.

(I) Preliminary Full Year 2014 Results (unaudited)

Revenue

For full year 2014, the company anticipates total revenues of $445 to $450 million, the midpoint of which represents a 43% increase over 2013. This growth is driven by continued robust BioThrax sales, accounting for approximately $246 million, an expansion of the Biodefense division, initial revenues from the Biosciences product portfolio resulting from the Cangene acquisition, and success in partnering one of the Biosciences preclinical assets.

*** The Street sees FY14 revenue of $450 million.

Net Income (GAAP and Non-GAAP)

For full year 2014, the company anticipates GAAP net income of $36 to $38 million, or $0.97 to $1.02 per basic share, the midpoint of which represents a 19% increase over 2013. On a non-GAAP basis, the company anticipates full year 2014 adjusted net income of $53 to $55 million, or $1.42 to $1.47 per basic share, the midpoint of which represents a 49% increase over 2013 (see "Reconciliation of GAAP to Non-GAAP Net Income" for a definition of terms and a reconciliation table). This growth reflects the continued strength and contribution from BioThrax sales as well as ongoing initiatives to control spending and increase operating efficiencies across the Biodefense and Biosciences divisions.

Cash and Cash Equivalents

For the full year 2014, the company anticipates cash and cash equivalents at year end of approximately $280 million.

Note

The preliminary 2014 financial results are subject to revision and will be finalized upon the completion of the Company's external audit, which is anticipated in early March 2015. Once the external audit is completed, the Company may report financial results that could differ, and the differences could be material.

(II) 2015 Financial Outlook

Full Year 2015

For the full year of 2015, the company forecasts total revenues of $510 to $540 million, driven by growth in BioThrax sales which are anticipated to be between $270 to $285 million, continued domestic and international sales of the other Biodefense division products, incremental growth in product sales and services revenues from the Biosciences division and continued robust development funding through contracts, grants and collaborations revenues. The company also forecasts full year 2015 GAAP net income of $50 to $60 million and non-GAAP adjusted net income of $60 to $70 million (see "Reconciliation of GAAP to Non-GAAP Net Income" for a definition of terms and a reconciliation table).

The company's outlook for 2015 does not include any estimates for potential new corporate development or other M&A transactions.

Q1 2015

For the first quarter of 2015, the company anticipates total revenues of $90 to $105 million.

(III) Reconciliation of GAAP to Non-GAAP Net Income

This press release contains a financial measure, adjusted net income, which is considered a "non-GAAP" financial measure under applicable Securities & Exchange Commission rules and regulations. This non-GAAP financial measure should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The company's definition of this non-GAAP measure may differ from similarly titled measures used by others. The non-GAAP financial measure used in this press release adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. The company views this non-GAAP financial measure as a means to facilitate management's financial and operational decision-making, including evaluation of the company's historical operating results and comparison to competitors' operating results. This non-GAAP financial measure reflects an additional way of viewing aspects of the company's operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the company's business.

The determination of the amounts that are excluded from this non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. The company is likely to exclude the following items from its non-GAAP adjusted net income (loss) in the future, the effect of which is uncertain but may be significant in amount:

• Expenses related to completed and future acquisitions of other businesses, including transaction costs and integration costs;
• Amortization of intangible assets;
• Non-cash charges related to the impairment of intangible or tangible assets;
• Expenses associated with restructuring activities, including but not limited to, accelerated depreciation, severance costs and lease abandonment charges; and
• Other non-recurring charges.

Because non-GAAP financial measures exclude the effect of items that will increase or decrease the company's reported results of operations, management strongly encourages investors to review the company's consolidated financial statements and publicly filed reports in their entirety.

The following table provides a reconciliation of GAAP to Non-GAAP net income for the twelve months ended December 31, 2015, 2014 and 2013.

You May Also Be Interested In

• T-Mobile posts mixed Q1 top and bottom line, expects more subscribers in 2024
• L3Harris Technologies (LHX) Tops Q1 EPS by 15c; raises guidance
• VinFast Auto (VFS) Appoints Tham Chee Soon to its Board, Ngan Wan Sing Winston Resigns