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Adjustments to quarterly financial data

9 Months Ended

Sep. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Adjustments to quarterly financial data

Adjustments to quarterly financial data

As part of the Company's quarterly review process related to the preparation of its unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023, the Company determined that its net state deferred tax liability was overstated as of December 31, 2022, resulting in an understatement of the income tax benefits reflected on the Company's consolidated statement of operations. This material error was associated with the use of incorrect state tax rates in the calculation of state deferred tax assets and related valuation allowances, which are non-cash items that resulted in an understatement of the Company's income tax benefit. Refer to Amendment No. 1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on December 11, 2023 for more information regarding the restatement of the consolidated financial statements for the fiscal year ended December 31, 2022, contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Original Form 10-K”). Due to the use of incorrect state tax rates in the calculation of state deferred tax assets and related valuation allowances along with other individually immaterial adjustments affecting the period, the Company understated the income tax provision by $8.1 million and $1.7 million for the three and nine months ended September 30, 2022. As a result, the Company determined to restate its interim financial statements for the three and nine months ended September 30, 2022. In addition to adjustments that impacted the Company’s financial statements for the fiscal year ended December 31, 2022, and interim financial statements as of and for the three and nine months ended September 30, 2022, there were other immaterial adjustments, both individually and in the aggregate, that impacted the Company’s 2023 quarterly filings for the periods ended March 31, 2023 and June 30, 2023.

The tables below present the impact of the financial statement adjustments on the Company's previously reported Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2022, the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022 and the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2022. The "Previously Reported" amounts in the following tables are amounts derived from the Original Form 10-K or the Quarterly Report on Form 10-Q for the applicable period. The amounts in the columns labeled "Tax Adjustments" represent the effect of adjustments resulting from the correction of the misstatement of the Company’s net state deferred tax liability and the income tax benefits and includes the tax impact of all other individually immaterial non-tax adjustments. The amounts in the columns labeled "Other Adjustments" represent the effect of correcting other unrelated errors that were previously recognized as out-of-period adjustments in previously filed financial statements that were not material, individually or in the aggregate, to those financial statements. The effects of the restatement and immaterial revisions have been corrected in all impacted tables and footnotes throughout these condensed consolidated financial statements. consolidated financial statements.

The following tables present the impact of the financial statement adjustments on the Company's previously reported Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2022:

						As of
						September 30, 2022
						Previously Reported						Tax Adjustments						Other Adjustments						As Restated
ASSETS
Current assets:
Cash and cash equivalents						$	240.9					$	—					$	—					$	240.9
Restricted cash						0.1						—						—						0.1
Accounts receivable, net						191.3						—						(2.1)						189.2
Inventories, net						546.3						—						(18.1)						528.2
Prepaid expenses and other current assets						139.9						—						—						139.9
Total current assets						1,118.5						—						(20.2)						1,098.3
Property, plant and equipment, net						806.7						—						0.1						806.8
Intangible assets, net						722.7						—						2.2						724.9
Goodwill						224.9						—						—						224.9
Other assets						35.7						—						5.1						40.8
Total assets						$	2,908.5					$	—					$	(12.8)					$	2,895.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable						$	103.8					$	—					$	(2.8)					$	101.0
Accrued expenses						35.9						—						(0.2)						35.7
Accrued compensation						82.5						—						—						82.5
Debt, current portion						21.2						—						—						21.2
Other current liabilities						25.0						(0.7)						(0.3)						24.0
Total current liabilities						268.4						(0.7)						(3.3)						264.4
Debt, net of current portion						1,032.1						—						—						1,032.1
Deferred tax liability						113.8						0.1						—						113.9
Other liabilities						44.9						6.5						0.9						52.3
Total liabilities						1,459.2						5.9						(2.4)						1,462.7
Stockholders’ equity:
Preferred stock, $0.001 par value; 15.0 shares authorized, no shares issued and outstanding						—						—						—						—
Common stock, $0.001 par value; 200.0 shares authorized, 55.5 shares issued; 49.9 shares outstanding						0.1						—						—						0.1
Treasury stock, at cost, 5.6 common shares						(227.7)						—						—						(227.7)
Additional paid-in capital						860.1						—						—						860.1
Accumulated other comprehensive income (loss), net						(5.2)						—						—						(5.2)
Retained earnings						822.0						(5.9)						(10.4)						805.7
Total stockholders’ equity						1,449.3						(5.9)						(10.4)						1,433.0
Total liabilities and stockholders’ equity						$	2,908.5					$	—					$	(12.8)					$	2,895.7

						As of
						December 31, 2022
						Previously Reported						Tax Adjustments						Other Adjustments						As Restated
ASSETS
Current assets:
Cash and cash equivalents						$	642.6					$	—					$	—					$	642.6
Restricted cash						—						—						—						—
Accounts receivable, net						158.4						—						0.8						159.2
Inventories, net						351.8						—						(1.1)						350.7
Prepaid expenses and other current assets						57.9						—						—						57.9
Total current assets						1,210.7						—						(0.3)						1,210.4
Property, plant and equipment, net						817.6						—						—						817.6
Intangible assets, net						728.8						—						—						728.8
Goodwill						218.2						—						—						218.2
Other assets						191.3						—						—						191.3
Total assets						$	3,166.6					$	—					$	(0.3)					$	3,166.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable						$	103.5					$	—					$	—					$	103.5
Accrued expenses						34.9						—						—						34.9
Accrued compensation						88.3						—						(1.0)						87.3
Debt, current portion						957.3						—						—						957.3
Other current liabilities						45.9						(0.3)						0.3						45.9
Total current liabilities						1,229.9						(0.3)						(0.7)						1,228.9
Debt, net of current portion						448.5						—						—						448.5
Deferred tax liability						71.8						(12.1)						—						59.7
Other liabilities						33.4						7.1						1.0						41.5
Total liabilities						1,783.6						(5.3)						0.3						1,778.6
Stockholders’ equity:
Preferred stock, $0.001 par value; 15.0 shares authorized, no shares issued and outstanding						—						—						—						—
Common stock, $0.001 par value; 200.0 shares authorized, 55.7 shares issued; 50.1 shares outstanding						0.1						—						—						0.1
Treasury stock, at cost, 5.6 common shares						(227.7)						—						—						(227.7)
Additional paid-in capital						873.5						—						—						873.5
Accumulated other comprehensive income (loss), net						3.1						—						—						3.1
Retained earnings						734.0						5.3						(0.6)						738.7
Total stockholders’ equity						1,383.0						5.3						(0.6)						1,387.7
Total liabilities and stockholders’ equity						$	3,166.6					$	—					$	(0.3)					$	3,166.3

The following tables present the impact of the financial statement adjustments on the Company's previously reported Quarterly Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022:

			Three Months Ended
			September 30, 2022
			Previously Reported						Tax Adjustments						Other Adjustments						As Restated
Revenues:
Product sales, net			$	186.2					$	—					$	—					$	186.2
CDMO:
Services			36.2						—						(0.1)						36.1
Leases			0.2						—						—						0.2
Total CDMO revenues			36.4						—						(0.1)						36.3
Contracts and grants			17.4						—						—						17.4
Total revenues			240.0						—						(0.1)						239.9
Operating expenses:
Cost of product sales			85.5						—						(0.3)						85.2
Cost of CDMO			63.1						—						(1.1)						62.0
Research and development			39.2						—						3.0						42.2
Selling, general and administrative			80.2						—						1.6						81.8
Amortization of intangible assets			14.0						—						—						14.0
Total operating expenses			282.0						—						3.2						285.2
Loss from operations			(42.0)						—						(3.3)						(45.3)
Other income (expense):
Interest expense			(8.5)						—						—						(8.5)
Other, net			(13.4)						—						—						(13.4)
Total other income (expense), net			(21.9)												—						(21.9)
Loss before income taxes			(63.9)						—						(3.3)						(67.2)
Income tax provision (benefit)			11.8						8.1						—						19.9
Net loss			$	(75.7)					$	(8.1)					$	(3.3)					$	(87.1)
Net loss per common share
Basic			$	(1.52)					$	(0.16)					$	(0.07)					$	(1.75)
Diluted			$	(1.52)					$	(0.16)					$	(0.07)					$	(1.75)
Weighted average shares outstanding
Basic			49.9						—						—						49.9
Diluted			49.9						—						—						49.9

			Nine Months Ended
			September 30, 2022
			Previously Reported						Tax Adjustments						Other Adjustments						As Restated
Revenues:
Product sales, net			$	660.5					$	—					$	—					$	660.5
CDMO:
Services			90.7						—						(2.9)						87.8
Leases			4.7						—						—						4.7
Total CDMO revenues			95.4						—						(2.9)						92.5
Contracts and grants			34.3						—						—						34.3
Total revenues			790.2						—						(2.9)						787.3
Operating expenses:
Cost of product sales			256.8						—						—						256.8
Cost of CDMO			217.5						—						(1.7)						215.8
Research and development			135.4						—						5.9						141.3
Selling, general and administrative			246.1						—						—						246.1
Amortization of intangible assets			42.0						—						—						42.0
Total operating expenses			897.8						—						4.2						902.0
Loss from operations			(107.6)						—						(7.1)						(114.7)
Other income (expense):
Interest expense			(24.5)												—						(24.5)
Other, net			(18.4)												—						(18.4)
Total other income (expense), net			(42.9)						—						—						(42.9)
Loss before income taxes			(150.5)						—						(7.1)						(157.6)
Income tax provision (benefit)			(14.7)						1.7						—						(13.0)
Net loss			$	(135.8)					$	(1.7)					$	(7.1)					$	(144.6)
Net loss per common share
Basic			$	(2.71)					$	(0.03)					$	(0.14)					$	(2.88)
Diluted			$	(2.71)					$	(0.03)					$	(0.14)					$	(2.88)
Weighted average shares outstanding
Basic			50.2						—						—						50.2
Diluted			50.2						—						—						50.2

The following table presents the impact of the financial statement adjustments on the Company's previously reported Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022:

						Nine Months Ended
						September 30, 2022
						Previously Reported						Tax Adjustments						Other Adjustments						As Restated
Operating Activities
Net loss						$	(135.8)					$	(1.7)					$	(7.1)					$	(144.6)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense						33.4						—						—						33.4
Depreciation and amortization						107.7						—						(0.1)						107.6
Change in fair value of contingent obligations, net						2.4						—						—						2.4
Amortization of deferred financing costs						3.1						—						—						3.1
Deferred income taxes						23.0						2.5						—						25.5
Other						13.0						—						—						13.0
Changes in operating assets and liabilities:
Accounts receivable						76.2						—						6.3						82.5
Inventories						(112.2)						—						9.4						(102.8)
Prepaid expenses and other assets						(29.2)						—						(5.1)						(34.3)
Accounts payable						(9.0)						—						(2.8)						(11.8)
Accrued expenses and other liabilities						(47.8)						—						(0.6)						(48.4)
Accrued compensation						(5.7)						—						—						(5.7)
Income taxes receivable and payable, net						(50.2)						(0.8)						—						(51.0)
Contract liabilities						4.2						—						—						4.2
Net cash used in operating activities						(126.9)						—						—						(126.9)
Investing Activities
Purchases of property, plant and equipment						(92.2)						—						—						(92.2)
Asset acquisitions						(243.7)						—						—						(243.7)
Net cash used in investing activities						(335.9)						—						—						(335.9)
Financing Activities
Purchases of treasury stock						(81.9)						—						—						(81.9)
Proceeds from revolving credit facility						238.0						—						—						238.0
Principal payments on term loan facility						(25.3)						—						—						(25.3)
Proceeds from stock-based compensation activity						3.0						—						—						3.0
Taxes paid for stock-based compensation activity						(5.7)						—						—						(5.7)
Net cash provided by financing activities:						128.1						—						—						128.1
Effect of exchange rate changes on cash, cash equivalents and restricted cash						(0.6)						—						—						(0.6)
Net change in cash, cash equivalents and restricted cash						(335.3)						—						—						(335.3)
Cash, cash equivalents and restricted cash, beginning of period						576.3						—						—						576.3
Cash, cash equivalents and restricted cash, end of period						$	241.0					$	—					$	—					$	241.0
Supplemental disclosure of cash flow information:
Cash paid for interest						$	26.7					$	—					$	—					$	26.7
Cash paid for income taxes						$	23.9					$	—					$	—					$	23.9
Supplemental information on non-cash investing and financing activities:
Purchases of property, plant and equipment unpaid at period end						$	10.0					$	—					$	—					$	10.0
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents						$	240.9					$	—					$	—					$	240.9
Restricted cash						0.1						—						—						0.1
Total						$	241.0					$	—					$	—					$	241.0

The following table presents the impact of the financial statement adjustments on the Company's previously reported Quarterly Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and June 30, 2022:

						Three Months Ended																								Three Months Ended
						March 31, 2022																								June 30, 2022
						Previously Reported						Tax Adjustments						Other Adjustments						As Revised						Previously Reported						Tax Adjustments						Other Adjustments						As Revised
Total revenues						$	307.5					$	—					$	(2.7)					$	304.8					$	242.7					$	—					$	(0.1)					$	242.6
Cost of product sales						$	80.3					$	—					$	(0.9)					$	79.4					$	91.0					$	—					$	1.2					$	92.2
Cost of CDMO						$	75.6					$	—					$	(1.6)					$	74.0					$	78.8					$	—					$	1.0					$	79.8
Income (loss) from operations						$	6.4					$	—					$	0.5					$	6.9					$	(72.0)					$	—					$	(4.3)					$	(76.3)
Net income (loss)						$	(3.7)					$	(1.4)					$	0.5					$	(4.6)					$	(56.4)					$	7.8					$	(4.3)					$	(52.9)
Net income (loss) per common share:
Basic						$	(0.07)					$	(0.03)					$	0.01					$	(0.09)					$	(1.13)					$	0.16					$	(0.09)					$	(1.06)
Diluted						$	(0.07)					$	(0.03)					$	0.01					$	(0.09)					$	(1.13)					$	0.16					$	(0.09)					$	(1.06)

The following table presents the impact of the financial statement adjustments on the Company's previously reported Quarterly Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and June 30, 2023:

						Three Months Ended																								Three Months Ended
						March 31, 2023																								June 30, 2023
						Previously Reported						Tax Adjustments						Other Adjustments						As Revised						Previously Reported						Tax Adjustments						Other Adjustments						As Revised
Total revenues						$	165.1					$	—					$	(0.8)					$	164.3					$	337.9					$	—					$	—					$	337.9
Cost of product sales						$	102.9					$	—					$	(1.7)					$	101.2					$	134.9					$	—					$	—					$	134.9
Cost of CDMO						$	52.2					$	—					$	(0.5)					$	51.7					$	55.7					$	—					$	—					$	55.7
Income (loss) from operations						$	(148.1)					$	—					$	0.5					$	(147.6)					$	(292.9)					$	—					$	—					$	(292.9)
Net income (loss)						$	(183.0)					$	(3.7)					$	0.5					$	(186.2)					$	(261.3)					$	(0.1)					$	—					$	(261.4)
Net income (loss) per common share:
Basic						$	(3.65)					$	(0.07)					$	0.01					$	(3.71)					$	(5.15)					$	(0.01)					$	—					$	(5.16)
Diluted						$	(3.65)					$	(0.07)					$	0.01					$	(3.71)					$	(5.15)					$	(0.01)					$	—					$	(5.16)

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The entire disclosure for reporting error correction.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-7

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