Societal CDMO Inc (SCTL) Reports Q3 2023 Financial Results Amidst Strategic Reorganization
Societal CDMO Inc (NASDAQ:SCTL) records a revenue increase to $23.6 million in Q3 2023, up from $21.6 million in the same period last year.
The company has initiated a corporate restructuring expected to save approximately $5.5 million annually.
Societal CDMO Inc (NASDAQ:SCTL) renegotiated debt terms for greater financial flexibility and successfully closed a public offering raising approximately $8.3 million.
Adjusted EBITDA for Q3 2023 stands at $2.8 million, a decrease from $3.8 million in the prior year period.
On November 8, 2023, Societal CDMO Inc (NASDAQ:SCTL), a leading contract development and manufacturing organization, announced its financial results for the third quarter ended September 30, 2023. The company reported a notable revenue increase to $23.6 million, up from $21.6 million in the comparable period of 2022, marking a 9% year-over-year growth. This performance was driven by increased demand from their largest commercial customer, Teva, and the addition of new customer projects, including Societals first government contract with the National Institutes of Health (NIH).
Strategic Developments and Financial Highlights
CEO David Enloe highlighted the company's operational strength and the addition of multiple new and existing customer projects. Societal CDMO Inc (NASDAQ:SCTL) also secured a license to manufacture psychedelic drug products, leveraging its experience with controlled substances to enter this emerging market.
The company's strategic reorganization, aimed at generating millions in annual savings, included renegotiating debt terms to improve financial flexibility and closing a public offering in a challenging market. These efforts are expected to position Societal CDMO Inc (NASDAQ:SCTL) for long-term growth and financial stability, with a focus on reaching positive cash flow in 2025.
Financial Performance Analysis
For Q3 2023, Societal CDMO Inc (NASDAQ:SCTL) reported a gross margin of 16%, a decrease from 26% in the same period last year. The cost of sales rose to $19.9 million, up from $16.1 million in Q3 2022, primarily due to higher commercial manufacturing revenue and fixed costs associated with new capabilities. Selling, general, and administrative expenses remained relatively stable at $5.3 million.
Interest expense decreased to $3.0 million, down from $3.6 million in the prior year, mainly due to reduced principal and lower interest rates. The net loss for the quarter was $4.6 million, or $0.05 per diluted share, compared to a net loss of $3.3 million, or $0.06 per diluted share, in Q3 2022.
For the nine months ended September 30, 2023, revenue was $66.9 million, a slight increase from $65.9 million in 2022. The net loss for this period was $12.5 million, or $0.14 per diluted share, compared to a net loss of $10.7 million, or $0.19 per diluted share, in the previous year. Adjusted EBITDA for the first nine months was $6.3 million, a decrease from $10.6 million in the prior year period.
Outlook and Guidance
Societal CDMO Inc (NASDAQ:SCTL) is resetting its 2023 revenue guidance to between $92 million and $94 million, with an expected net loss of $12.1 million to $13.6 million. Adjusted EBITDA guidance for the full year is set between $11.5 million and $13 million.
The company's management will host a webcast to discuss these results and provide further insights into the company's performance and strategy. Investors and interested parties can access the webcast through the Investor section of Societal CDMO Inc (NASDAQ:SCTL)'s website.
For more detailed information on Societal CDMO Inc (NASDAQ:SCTL)'s financial results, including the reconciliation of GAAP to non-GAAP financial measures, please visit Societal CDMO's investor relations website.
Value investors and potential GuruFocus.com members seeking comprehensive analysis and insights into Societal CDMO Inc (NASDAQ:SCTL)'s financials are encouraged to visit GuruFocus.com for further details and investment considerations.
Explore the complete 8-K earnings release (here) from Societal CDMO Inc for further details.
This article first appeared on GuruFocus.
