Societal CDMO, Inc.

Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters. Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at SocietalCDMO.com. With that, I will turn the call over to David Enlow, Societal's President and CEO.

Thank you, Stephanie, and thank you to everyone participating today via webcast. During the third quarter, the company made important advancements across the business. Notably, we signed an agreement to sell the company's excess land in Georgia to a residential home developer, the proceeds of which will allow us to bring down our current debt balance and strengthen our overall financial position. During the quarter, the company also secured the highest number of new business wins for any quarter in our history, both with existing and new clients, further transforming our pipeline and enhancing our customer base. And finally, we successfully renegotiated the agreement with our marketing partner, Lynette, providing the company with improved economics with respect to sales of our legacy Verapamil PM product. as well as potential manufacturing projects in the future. We are extremely pleased with the progress during the period, and I will provide a more detailed review of our Q3 2022 achievements following an overview of our financial results for the quarter and the nine months ended September 30th, 2022. For that, I'll turn the call over to Ryan.

Thank you, David. Good afternoon, everyone. Before I begin, in addition to the brief financial overview I'll provide on the call today, Additional details on our financial results for the third quarter and nine months ended September 30th, 2022 are included in our press release issued prior to this call and in our Form 10-Q, which is on file with the SEC. I'll begin with an overview of our financial results for the third quarter. Revenue for the quarter ended September 30th, 2022 were $21.6 million. This represents a 19% increase compared to revenues of $18.2 million recorded during the prior year period and marks one year since the irises acquisition. So going forward, financial results will represent organic growth in the business. The increase of $3.4 million was primarily driven by an increase in European Ritalin LA demand from the company's new customer, Infectifarm. Revenue resulting from the acquisition of irises as well as higher revenues from the company's clinical trial materials business. These increases were partially offset by declining revenues from Lynette's commercial sales of Verapamil PM products compared to the prior year, albeit improved due to better economics from our renegotiated agreement for Verapamil PM and a return of volumes post the rebalancing of inventory within the trade during Q4 of 2021 and Q1 of 2022. Cost of sales for the quarter ended September 30, 2022, was $16.1 million compared to $13.2 million for the comparable period of 2021. The increase of $2.9 million was primarily due to costs associated with operating the San Diego facility acquired from IRASIS and increased costs tied to increased manufacturing revenue during the quarter. In addition, in 2021, the company received certain employment incentive tax credits that were not repeated in 2022, resulting in increased expense in 2022. These increases were partially offset by the reallocation of expenses reflecting the post-acquisition organizational structure. Selling general and administrative expenses for the third quarter were $5.1 million compared to $4.6 million recorded in the 2021 period. The increase of 0.5 million was primarily related to increased personnel costs tied to the reallocation of expenses and integration costs associated with the IRIS's integration. Specifically, effective October 1st, 2021, certain employees who previously supported the company's plan operations now support the company's multi-site organization structure and operations. Accordingly, expenses associated with these employees have been reclassified from cost of sales to selling general and administrative expenses. Interest expense was $3.5 million for the three months ended September 30, 2022, a decrease compared to $3.8 million for the comparable period of 2021. The decrease of $0.3 million was primarily due to increased capitalized interest and the extension of the maturity date of our term loans, which deferred some of the non-cash amortization of financing expenses to future periods. These decreases were partially offset by an increase in the variable LIBOR component of interest on our term loans. For the quarter ended September 30, 2022, the company recorded a net loss of $3.3 million or $0.06 per diluted share as compared to a net loss of $3.5 million or $0.07 per diluted share for the comparable period of 2021. EBITDA as adjusted for the period was $4.8 million compared to $5.3 million in the prior year period. During the period, lower sales of Arapa Mill PM by Lynette negatively impacted EBITDA as adjusted by $0.8 million as compared to the 2021 period. I'll now provide an overview of our financial results for the first nine months of 2022. Revenue for the nine months ended September 30th, 2022 was $65.9 million compared to $53.1 million for 2021. The increase of $12.8 million in revenue was primarily driven by revenue resulting from the acquisition of irises, as well as higher revenues from the company's clinical trial materials business. In addition, there was an increase in European Ritalin LA demand from our company's new customer, Infectifarm, as well as an increase in revenue from the company's largest commercial customer, Teva. correlated with pull-through in demand resulting from market share gains against the sole competitor for the Verapamil SR products. The increase in revenue was partially offset by a decline in revenue from Lynette's commercial sales of the Verapamil PM products. Cost of sales for the nine months ended September 30, 2022 was $49.6 million compared to $39.8 million in 2021. The cost of sales increase of $9.8 million was primarily due to the acquisition of the San Diego facility and certain 2021 employment incentive tax credits that were not repeated in 2022, resulting in an increase of expenses in 2022. These increases were partially offset by the reallocation of expenses reflecting the post-acquisition organizational structure. Selling, general, and administrative expenses for the nine months ended September 30, 2022, were $15.9 million compared to $13.1 million in 2021. The increase of $2.8 million was primarily related to increased personnel costs tied to the reallocation of expenses and integration costs associated with the IRISIS integration. These increases were offset by lower IRISIS acquisition expenses and lower stock-based compensation expenses. Interest expense was $10.4 million and $11.7 million for the first nine months of 2022 and 2021, respectively. The decrease of $1.3 million was primarily due to the extension of the maturity date of our term loans, which deferred some of the non-cash amortization of financing expenses to future periods and increased capitalized interest. These decreases were partially offset by a full period of interest on the debt portion of the IRS's acquisition purchase price and an increase in the variable LIBOR component of interest on our term loans. For the nine-month end of September 30, 2022, societal reported a net loss of $10.7 million or $0.19 per diluted share compared to a net loss of $9 million or $0.22 per diluted share for 2021. EBITDA as adjusted for the nine months was $10.9 million compared to $13.4 million in the prior year period. During the nine-month period, lower sales of Arapamil PM by Lynette negatively impacted EBITDA as adjusted by approximately $2.8 million as compared to the 2021 period. Our cash and cash equivalents as of September 30, 2022, were $11.6 million compared to $25.2 million as of the end of the prior fiscal year. Before turning the call back over to David, I'd like to provide an overview of the company's recent real estate transactions. During the third quarter, the company signed an agreement to sell approximately 121 acres of land to David Weekly Homes, a nationally recognized home builder. This land, which is adjacent to our manufacturing facility in Gainesville, Georgia, is unused by the company and as such represents a highly valuable and monetizable asset. Under the terms of the agreement, we expect to receive approximately $9.1 million in proceeds from this sale. The closing of the transaction is subject to completion of standard due diligence and other customary conditions, and it is our expectation that the sale will close in the second half of 2023. This concludes my financial overview. For those interested in reviewing our non-GAAP reconciliations, please refer to our 8K filing or the press release issued today. I'll now turn the call back over to David for an update on operations and achievements during the period. David.