Alpha Teknova, Inc.

Hello and welcome to Alpha Tech Nova Inc third quarter 2023 financial results conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask the question during this session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press r11 again I will now like to hand the conference over to Jennifer Henry, Senior Vice President of Marketing. You may begin.

Thank you, Operator. Welcome to Technova's third quarter of 2023 earnings conference call. With me on today's call are Stephen Gunstream, Technova's President and Chief Executive Officer, and Matt Lowell, Technova's Chief Financial Officer, who will make prepared remarks and then take your questions. As a reminder, the forward-looking statements that we make during this call, including those regarding business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ. Additional information concerning these risk factors is included in the press release the company issued earlier today, and they are more fully described in the company's various filings with the SEC. Today's comments reflect the company's current views, which could change as a result of new information, future events, or other factors, and the company does not obligate or commit itself to update its forward-looking statements except as required by law. The company's management believes that, in addition to GAAP results, non-GAAP financial measures can provide meaningful insight when evaluating the company's financial performance and the effectiveness of its business strategies. We will therefore use non-GAAP financial measures of certain of our results during this call. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted to Technova's website and at www.sec.gov.edgar. Non-GAAP financial measures should always be considered only as a supplement to and not as a substitute for or as superior to financial measures prepared in accordance with GAAP. The non-GAAP financial measures in this presentation may differ from similarly named non-GAAP financial measures used by other companies. Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks. It can be accessed on the investor relations section of Technova's website and on today's webcast. And now I will turn the call over to Stephen.

Thank you, Jen. Good afternoon, and thank you, everyone, for joining us for our third quarter of 2023 earnings call. Technova is a leading producer of critical reagents for the life sciences industry to accelerate the introduction of novel therapies, vaccines, and molecular diagnostics that will help people live longer, healthier lives. We manufacture high quality customer agents with short turnaround times and are positioned to scale with our customers as they advance their products from discovery to commercialization. We had a solid third quarter, both financially and operationally, against the backdrop of a difficult market. Our ability to deliver in these challenging conditions is a testament to the dedication of our very talented team and the diversity of our market segments. Also, during the third quarter, we raised 22.9 million of capital through a registered direct offering and concurrent private placement, and we paid down 10 million of long-term debt. We remain optimistic about the potential of our target markets and are pleased with the progress we've made executing our growth strategy in the third quarter. As we reported during our Q2 update, our new facility has been certified for GMP-grade production. We are enthusiastic about the potential this multi-year investment will unlock for the business. During Q3, we extended the types of products available for both research and clinical grade production, which now include single use bags and an assortment of bottles, giving us the ability to serve nearly all bioprocessing and diagnostic customers in our target market segments. In addition, since the beginning of June, we have been qualified by 12 high profile customers eight of which are companies involved in cell and gene therapy development. We have been very encouraged by their reaction to our new GMP facility and Technova's transformation. The response to the qualification audits and our conversations with these customers have increased our confidence that the facility investments we have made will begin to bear fruit in mid to late 2024. As a reminder, We believe this new facility, plus our existing operating infrastructure, will give us the capacity to deliver approximately $200 million in annual product revenue when fully utilized. Next, on the R&D front, I'm pleased to say our new product introductions are progressing ahead of schedule. In September, we added the third serotype of our AEX buffer screening kit by extending the portfolio to include AAV6. we launched a suite of reagents to support the plasmid bioproduction workflow. Our AAV product pipeline, which we just introduced earlier this spring, now encompasses more than 60 total reagents, simplifying and streamlining AAV-related workflows for process development scientists. In late October, we presented three posters at the European Society of Gene and Cell Therapy, including data for a new reagent kit to streamline PCR analytics for empty full capsid analysis. The full launch of this kit is expected in Q4. Through our new product offerings, we expect to become an even more valued supplier to our customers as they advance their therapies towards commercialization. Needless to say, along with many others in the life sciences, we found ourselves confronting a challenging and dynamic market environment in Q3. I'm proud to note we continue to deliver against our operational plan during the quarter and successfully managed our expenses. Our total employee count at the end of the third quarter was 216 associates reduced from our high of more than 300 last year. I'm very grateful for the effort of our past and present employees who worked tirelessly to put us in a position for success going forward. In the near term, We continue to see emerging biotech, historically one of our larger growth segments, focused on conserving capital by delaying, reducing, or canceling clinical trials. That said, we have seen an increase in the total number of clinical customers purchasing from us annually. Combined with our recent auto qualifications and new product launches, we are cautiously optimistic as we look into 2024. As we turn to our revenue outlook for the remainder of 2023, we expect the market conditions we observed in Q3 to persist and therefore expect to finish at the low end of our revenue guidance of $37 to $40 million. Even so, we believe we will outperform our previously communicated free cash outflow target and now expect free cash outflow of less than $30 million for fiscal 2023. I will now hand the call over to Matt for a discussion of the financials.