Emergent BioSolutions Inc.

Good day and thank you for standing by. Welcome to Emergent Biosolutions Inc. fourth quarter 2024 earnings 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 a question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I would like to turn the call over to Frank Bargo, VP Assistant Treasurer. Please go ahead.

Good afternoon, everyone. Thank you for joining today as Emergent discusses their operational and financial results for the fourth quarter and full year of 2024. As is customary, today's call is open to all participants, and the call is being recorded and is copyrighted by Emergent BioSolutions. In addition to today's press release, there's a series of slides accompanying this webcast available to all webcast participants. Turning to slide two. During today's call, emergent may make projections and other forward-looking statements related to their business, future events, their prospects, or future performance. These forward-looking statements are based on their current intentions, beliefs, and expectations regarding future events. Any forward-looking statement speaks only as of the date of this conference call. And as required by law, emergent does not undertake to update any forward-looking statement to reflect new information, events, or circumstances. Investors should consider this cautionary statement as well as the risk factors identified in emergent's periodic reports filed with the FCC when evaluating their forward-looking statements. During today's call, emergent may also discuss certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding emergent's operating performance. Please refer to the tables found in today's press release. Turning to slide three, the agenda for today's call will include Joe Papa President and Chief Executive Officer, who will comment on our multi-year transformation progress, and Rich Lindahl, EVP and Chief Financial Officer, who will speak to the financials for the fourth quarter and full year of 2024, as well as provide full-year guidance for 2025. Joe Papa will conclude by discussing the 2025 business outlook and key growth drivers, followed by Q&A. Finally, for the benefit of those who may be listening to the replay of this webcast, This call was held and recorded on March 3rd, 2025. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would now like to turn the call over to Joe Papa for opening remarks. Joe?

Thank you, Frank. Hello, everyone, and thank you for joining us to discuss our fourth quarter and full year of 2024 earnings. I'm joined today by Rich Lindahl, our Chief Financial Officer. I'm pleased to be here today to share with you updates on our business, including our contributions to protecting public health, as well as the opportunities in front of us. Following my opening remarks, Rich will detail our fourth quarter and full year of 2024 results, as well as provide 2025 full year guidance. I will close the call with a discussion of our business outlook and our path forward into 2025 as we look ahead to continue the significant progress on our turnaround efforts. Then we'll open up the call for Q&A. I'll now begin on slide five. I joined Emergent and this leadership team one year ago to turn around the business and focus on our company's mission to protect and save lives. For more than 25 years, Emergent has responded with solutions to complex and urgent public health threats with preparedness efforts and active responses. However, the company needed to reduce its debt, improve profitability, and pursue future growth in a rapidly evolving landscape. Turning to slide six, our team immediately went to work developing and implementing a multi-year transformational plan to stabilize, turn around, and ultimately transform the emerging business. Executing on this plan required making difficult but necessary decisions, including divesting sites and assets to improve our profitability. Through the great efforts of the entire team, we completed our first phase of the plan, the stabilization phase, marked by a reduction in debt, a stronger balance sheet, and a renewed focus on our mission. We are delighted to have completed this first phase ahead of schedule. In 2025, we'll be executing our turnaround phase in transforming the company to generate long-term profitable growth. On slide seven, we highlight our important accomplishments since we reported fiscal year 2023 results last year. In 2024, we dramatically improved our financial position. This, we believe, gives us operating flexibility and the ability to focus on driving growth. Among those key actions, we delivered on our plan to stabilize the company and secure commitments, including reducing net debt, refinancing, and extending the debt maturity to 2029. We improved profitability and operating cash flow. We strategically divested assets and streamlined our site network while meeting internal product delivery commitments for customers and significantly improving operating margins. We reduced operating expenditures by $130 million while delivering on our core product commitments. We refocused our core business segments to medical countermeasures and Narcan nasal spray. Of note, we have continued to combat the opioid epidemic with Narcan nasal spray, and in 2024, we distributed 11 million two-dose cartons, or 22 million doses, across the U.S. and Canada. We continue to be the market leader in a growing Naloxone nasal spray market. We've been on the frontline supporting public health preparedness with the U.S. and other allied government customers to address threats like anthrax, smallpox, mpox, and botulism, and secured $550 million in MCM contract awards. And lastly, we resolved legacy legal and quality issues and improved our quality and compliance systems company-wide. I want to underscore that we treat critical stabilization priority while ensuring the highest standards of patient safety, quality, and compliance. Progressing to slide 8, our success in 2024 allows us to focus on the following five key critical areas and goals for our 2025 plan. Strong profit follow-through from 2024 with a focus on higher net income, increased growth margin percentage, and an increased adjusted EBITDA margin percentage. Operating cash flow growth versus 2024 and strong positive free cash flow. Rebuilding our product pipeline, our CMO and head of R&D, Dr. Simon Lowry, will be driving these efforts. Further optimization of manufacturing operations and partnerships, potentially taking additional steps to streamline our manufacturing footprint. And lastly, strategic capital deployments for business development. These will be the right size investments that we see clear value and potential to harness our expertise and capabilities similar to our Cloxado business development transaction. For Organics Rich, I went for a more detailed financial review. I'd like to set the stage for our 2025 guidance. We view guidance as a commitment to our stakeholders. Heading into 2025, we believe there are dynamics and factors that lead us to take a more conservative approach to guidance. The onboarding of a new administration may cause shifts in the timing of product delivery or may cause uncertainty due to staff transitions. Over the course of more than 25 years serving and partnering with government customers, We are very familiar with adaptability shifts. Our products are mission critical, a belief and an understanding we believe that have been shared by many administrations, and today enjoy bipartisan support for the importance of biodefense and decreasing opioid overdose deaths. Notwithstanding our conservative full-year guidance, we believe we will have a strong first quarter. As standard practice, we plan to update our guidance every quarter as we have in the past years. Following Rich's comments, I'll spend some time elaborating on these areas. I'll now hand the call over to Rich.