Q3 2024 Life Sciences Services revenue up 9% year-over-year, including BioStorage/BioServices revenue up 12% year-over-year Supported a record total of 691 global clinical trials as of September 30, 2024Company reaffirmed full year 2024 revenue guidance of $225 to $235 million

NASHVILLE, Tenn., Nov. 7, 2024 /PRNewswire/ — Cryoport, Inc. (NASDAQ: CYRX) (Cryoport), a global leader in supply chain solutions for the life sciences industry, today announced financial results for its third quarter (Q3) and first nine months (9M) of 2024. 

Jerrell Shelton, CEO of Cryoport, remarked, “Our Life Sciences Services business showed 9% growth during the third quarter, with BioStorage/BioServices revenue increasing by 12% compared to the third quarter of last year. The increase in our services revenue was coupled with a substantial improvement in gross margin to 46% for our services business.

“Reflecting on our performance through the third quarter, we are maintaining our full-year revenue forecast of $225 million to $235 million, anticipating continued growth in our services business while acknowledging the ongoing softness in product sales.

“We have been actively executing on our cost reduction and capital realignment strategies and we are currently on course to complete these adjustments by the year’s end. These actions are already showing positive results, as evidenced by the improvement in our gross margin, adjusted EBITDA and positive cash flow this quarter, moving us closer towards our objective of sustainable profitability. We believe that these measures will lead us to a return to positive adjusted EBITDA during 2025.

“We expect the macroeconomic and sector-specific challenges that have impacted many companies serving the life sciences industry to continue for the near future, so we plan to further sharpen our focus on profitable growth and maintaining a strong balance sheet. We continue to be optimistic about our long-term business growth trajectory. We believe that we are strategically positioned to leverage the anticipated long-term growth in the Life Sciences and the Cell & Gene Therapy market through our comprehensive and integrated supply chain solutions.

“In October, we launched our IntegriCell™ Cryopreservation Solution with a new state-of-the-art facility on our Houston campus. This offering addresses yet another critical aspect in optimizing the supply chain for the development and commercialization of cell-based therapies through high quality, standardized, cryopreserved starting material,” Mr. Shelton concluded.

In tabular form, Q3 2024 and 9M 2024 revenue compared to Q3 2023 and 9M 2023, respectively, was as follows:

BioStorage/BioServices revenue continues to grow double digits year-over-year, increasing 12%, as we continue to introduce our expanded capabilities to existing customers as well as add new customers into our global network, and as more allogeneic clinical and commercial therapies progress in the number of patients treated.

Revenue from commercially approved Cell & Gene therapies represented $6.1 million, or 11%, of total revenue for Q3 2024. During Q3 2024, one new therapy was approved by the Pharmaceuticals and Medical Devices Agency (PMDA) of Japan, which was SanBio’s AKUUGO, an allogeneic treatment for the indication of improving chronic motor paralysis resulting from traumatic brain injury. In addition, the FDA approved Adaptimmune’s Tecelra for the treatment of adults with unresectable or metastatic synovial sarcoma, the first cell therapy targeting a solid tumor. Our total commercial therapy count was seventeen (17) as of September 30, 2024.

As of September 30, 2024, Cryoport supported a total of 691 global clinical trials, a net increase of 21 clinical trials over September 30, 2023, with 79 trials in Phase 3. The number of trials by phase and region are as follows: 

During the third quarter, three (3) Biologics License Application (BLA)/Marketing Authorization Application (MAA) filings occurred, and one (1) BLA filing occurred in October. For the remainder of 2024, we anticipate up to an additional four (4) application filings and two (2) new therapy approvals, with another two (2) possible approvals of new therapies in January of 2025.

BioLogistics Solutions revenue rose 9% year over year during the third quarter as it continued to benefit from the ramp in temperature-controlled logistics revenue outside of the Cell & Gene therapy market, including biosimilars, antibodies, APIs and a growing number of Direct-to-Patient shipments.

Financial Highlights

Revenue

Total revenue for Q3 2024 was $56.7 million compared to $56.2 million for Q3 2023, a year-over-year increase of 1% or $0.5 million. Life Sciences Services revenue for Q3 2024 was $39.3 million compared to $36.0 million for Q3 2023, up 9.0% year-over-year and 3.3% sequentially, including BioStorage/BioServices revenue of $4.0 million, up 12.4% year-over-year and 12.9% sequentially. Life Sciences Products revenue for Q3 2024 was $17.4 million compared to $20.1 million for Q3 2023, down 13.7% year-over-year and 11.1% sequentially.Total revenue for 9M 2024 was $168.9 million compared to $176.0 million for 9M 2023. Life Sciences Services revenue for 9M 2024 was $114.1 million compared to $107.1 million for 9M 2023, including BioStorage/BioServices revenue of $11.0 million for 9M 2024 compared to $10.0 million for 9M 2023.Life Sciences Products revenue for 9M 2024 was $54.7 million compared to $68.9 million for 9M 2023.

Gross Margin

Total gross margin was 44.8% for Q3 2024 compared to 43.2% for Q3 2023. Gross margin for Life Sciences Services was 46.0% for Q3 2024 compared to 42.2% for Q3 2023. Gross margin for Life Sciences Products was 42.1% for Q3 2024 compared to 44.9% for Q3 2023.Total gross margin was 42.8% for 9M 2024 compared to 43.2% for 9M 2023. Gross margin for Life Sciences Services was 44.0% for 9M 2024 compared to 44.1% for 9M 2023. Gross margin for Life Sciences Products was 40.5% for 9M 2024 compared to 41.9% for 9M 2023.

Operating Costs and Expenses

Operating costs and expenses were $41.8 million for Q3 2024 compared to operating costs and expenses of $41.2 million for Q3 2023. Operating costs and expenses for 9M 2024 were $189.3 million compared to $121.4 million for 9M 2023. The operating costs and expenses for 9M 2024 include an impairment loss of $63.8 million recorded in Q2 2024, which is primarily related to the write off of remaining goodwill for MVE Biological Solutions.

Net Income (Loss)

Net income was $0.8 million for Q3 2024 compared to a net loss of $13.3 million for Q3 2023, which was primarily a result of increased gains on the extinguishment of debt. Net loss was $96.1 million for 9M 2024 compared to a net loss of $37.2 million for the same period in 2023, which was primarily a result of the impairment loss of $63.8 million recorded in Q2 2024.Net loss attributable to common stockholders was $1.2 million, or $0.02 per share, and $102.1 million, or $2.07 per share, for Q3 2024 and 9M 2024, respectively. This compares to a net loss attributable to common stockholders of $15.3 million, or $0.31 per share, and $43.2 million, or $0.89 per share, for Q3 2023 and 9M 2023, respectively.

Adjusted EBITDA

Adjusted EBITDA was a negative $2.4 million for Q3 2024, compared to a negative $3.1 million for Q3 2023. Adjusted EBITDA for 9M 2024 was a negative $13.9 million, compared to a negative $1.7 million for 9M 2023.

Cash, Cash equivalents, and Short-Term Investments

Cryoport held $272.7 million in cash, cash equivalents, and short-term investments as of September 30, 2024.

Convertible Debt repurchases

In Q3 2024, the Company announced that its Board of Directors had authorized a repurchase program to purchase up to $200.0 million of the Company’s common stock and/or convertible senior notes (the “2024 Repurchase Program”), which was in addition to the remaining amount under its 2022 repurchase program. The 2024 Repurchase Program became effective on August 1, 2024, and remains in effect through December 31, 2027. The Company has approximately $73.9 million in total of repurchase authorization available under its two Repurchase Programs as of September 30, 2024.During Q3 2024, the Company repurchased $175.0 million in aggregate principal amount of its Convertible Senior Notes due in 2026 for an aggregate repurchase price of $154.5 million.

Note: All reconciliations of GAAP to adjusted (non-GAAP) figures above are detailed in the reconciliation tables included later in the press release.

Outlook

The Company reaffirms full year 2024 revenue guidance in the range of $225 million – $235 million. The Company’s 2024 guidance is dependent on its current business and expectations, which may be further impacted by, among other things, factors that are outside of our control, such as the global macroeconomic and geopolitical environment, supply chain constraints, inflationary pressures, and the effects of foreign currency fluctuations, as well as the other factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” section of its most recently filed periodic reports on Form 10-K and Form 10-Q, as well as in its subsequent filings with the SEC.

Additional Information

Further information on Cryoport’s financial results is included in the attached condensed consolidated balance sheets and statements of operations, and additional explanations of Cryoport’s financial performance are provided in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2024, which is expected to be filed with the SEC on November 7, 2024. Additionally, the full report will be available in the SEC Filings section of the Investor Relations section of Cryoport’s website at www.cryoportinc.com.

Earnings Conference Call Information

IMPORTANT INFORMATION: In addition to the earnings release, a document titled “Cryoport Third Quarter 2024 in Review”, providing a review of Cryoport’s financial and operational performance and a general business update, will be issued at 4:05 p.m. ET on Thursday, November 7, 2024. The document is designed to be read in advance of the questions and answers conference call and will be accessible at https://ir.cryoportinc.com/news-events/ir-calendar.

Cryoport management will host a conference call at 5:00 p.m. ET on November 7, 2024. The conference call will be in the format of a questions and answers session and will address any queries investors have regarding the Company’s reported results. A slide deck will accompany the call.

Conference Call Information

Please allow 10 minutes prior to the call to visit this site to download and install any necessary audio software.

The questions and answers call will be recorded and available approximately three hours after completion of the live event in the Investor Relations section of the Company’s website at www.cryoportinc.com for a limited time. To access the replay of the questions and answers click here. A dial-in replay of the call will also be available to those interested, until November 14, 2024. To access the replay, dial 1-844-512-2921 (United States) or 1-412-317-6671 (International) and enter replay entry code: 1171580#.

About Cryoport, Inc.

Cryoport, Inc. (Nasdaq: CYRX), is a global leader in supply chain solutions for the Life Sciences with an emphasis on cell & gene therapies. Cryoport enables manufacturers, contract manufacturers (CDMOs), contract research organizations (CROs), developers, and researchers to conduct their respective business with products and services that are designed to derisk services and provide certainty. We provide a broad array of supply chain solutions for the life sciences industry. Through our platform of critical products and solutions including advanced temperature-controlled packaging, informatics, specialized bio-logistics services, bio-storage, bio-services, and cryogenic systems, we are “Enabling the Future of Medicine™” worldwide, through our innovative systems, compliant procedures, and agile approach to superior supply chain management.

Our corporate headquarters, located in Nashville, Tennessee, is complemented by over 50 global locations in 17 countries, with key sites in the United States, United Kingdom, France, the Netherlands, Belgium, Portugal, Germany, Japan, Australia, India, and China.

For more information, visit www.cryoportinc.com or follow via LinkedIn at https://www.linkedin.com/company/cryoportinc or @cryoport on X, formerly known as Twitter at www.x.com/cryoport for live updates.

Forward-Looking Statements
Statements in this press release which are not purely historical, including statements regarding Cryoport’s intentions, hopes, beliefs, expectations, representations, projections, plans, or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, those related to Cryoport’s industry, business, long-term growth prospects, plans, strategies, acquisitions, future financial results and financial condition, such as Cryoport’s outlook and guidance for full year 2024 revenue and the related assumptions and factors expected to drive revenue, projected growth trends in the markets in which the Cryoport operates, Cryoport’s plans and expectations regarding the launch of new products and services, such as the expected timing and benefits of such products and services launches, Cryoport’s expectations about future benefits of its acquisitions, and anticipated regulatory filings, approvals, label/geographic expansions or moves to earlier lines of treatment approved with respect to the products of Cryoport’s clients. Forward-looking statements also include those related to Cryoport’s anticipation of continued growth in its services business and ongoing softness in product sales; Cryoport’s plans and expectations relating to its previously announced cost reduction and capital realignment strategies, including Cryoport’s plans to complete these adjustments by the year’s end and Cryoport’s belief that these measures will lead to a return to positive adjusted EBITDA during 2025; Cryoport’s expectations that the macroeconomic and sector-specific challenges that have impacted many companies serving the life sciences industry to continue into the near future; and Cryoport’s belief that it is strategically positioned to leverage the anticipated long-term growth in the Cell & Gene therapy market through Cryoport’s comprehensive and integrated supply chain solutions. It is important to note that Cryoport’s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties associated with the effect of changing economic and geopolitical conditions, supply chain constraints, inflationary pressures, the effects of foreign currency fluctuations, trends in the products markets, variations in Cryoport’s cash flow, market acceptance risks, and technical development risks. Additional risks and uncertainties include difficulties, delays or Cryoport’s inability to successfully complete its planned cost reduction and capital realignment measures, which could reduce the benefits realized from such activities within the time periods currently anticipated. Cryoport’s business could be affected by other factors discussed in Cryoport’s SEC reports, including in the “Risk Factors” section of its most recently filed periodic reports on Form 10-K and Form 10-Q, as well as in its subsequent filings with the SEC. The forward-looking statements contained in this press release speak only as of the date hereof and Cryoport cautions investors not to place undue reliance on these forward-looking statements. Except as required by law, Cryoport disclaims any obligation, and does not undertake to update or revise any forward-looking statements in this press release.

Note Regarding Use of Non-GAAP Financial Measures

To supplement our financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance as defined in Regulation G of the Securities Exchange Act of 1934 are included in this release: revenue at constant currency, revenue growth rate at constant currency, operating costs and expenses, excluding impairment loss, net income, excluding impairment loss, and adjusted EBITDA. Non-GAAP financial measures are not calculated in accordance with GAAP, are not based on any comprehensive set of accounting rules or principles and may be different from non-GAAP financial measures presented by other companies. Non-GAAP financial measures, including revenue at constant currency, revenue growth rate at constant currency and adjusted EBITDA, should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

We believe that revenue growth is a key indicator of how Cryoport is progressing from period to period, and we believe that the non-GAAP financial measures, revenue at constant currency and revenue growth rate at constant currency, are useful to investors in analyzing the underlying trends in revenue. Under GAAP, revenue received in local (non-U.S. dollar) currency is translated into U.S. dollars at the average exchange rate for the period presented. As a result, fluctuations in foreign currency exchange rates affect the results of our operations and the value of our foreign assets and liabilities, which in turn may adversely affect results of operations and cash flows and the comparability of period-to-period results of operations. When we use the term “constant currency,” it means that we have translated local currency revenue for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenue into U.S. dollars that we used to translate local currency revenue for the comparable reporting period of the prior year. Revenue growth rate at constant currency refers to the measure of comparing the current reporting period revenue at constant currency with the reported GAAP revenue for the comparable reporting period of the prior year.

However, we also believe that data on constant currency period-over-period changes have limitations, particularly as the currency effects that are eliminated could constitute a significant element of our revenue and could significantly impact our performance. We therefore limit our use of constant currency period-over-period changes to a measure for the impact of currency fluctuations on the translation of local currency revenue into U.S. dollars. We do not evaluate our results and performance without considering both period-over-period changes in non-GAAP constant currency revenue on the one hand and changes in revenue prepared in accordance with GAAP on the other. We caution the readers of this press release to follow a similar approach by considering revenue on constant currency period-over-period changes only in addition to, and not as a substitute for, or superior to, changes in revenue prepared in accordance with GAAP.

Operating costs and expenses, excluding impairment loss, is defined as operating costs and expenses, excluding impairment losses, if any. Net loss, excluding impairment loss, is defined as net loss, excluding impairment losses, if any. Management believes these measures, when read in conjunction with, and as supplemental to, the corresponding GAAP financial measures, provide a useful measure of Cryoport’s expenses and operating results, a meaningful comparison with historical results, and insight into Cryoport’s operating performance.

Adjusted EBITDA is defined as net loss adjusted for interest expense, income taxes, depreciation and amortization expense, stock-based compensation expense, acquisition and integration costs, cost reduction initiatives, investment income, unrealized (gain)/loss on investments, foreign currency (gain)/loss, gain on insurance claim, net gain on extinguishment of debt, impairment loss, changes in fair value of contingent consideration and charges or gains resulting from non-recurring events, as applicable.

Management believes that adjusted EBITDA provides a useful measure of Cryoport’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into Cryoport’s ongoing operating performance. Further, management and the Company’s board of directors utilize adjusted EBITDA to gain a better understanding of Cryoport’s comparative operating performance from period to period and as a basis for planning and forecasting future periods. Adjusted EBITDA is also a significant performance measure used by Cryoport in connection with its incentive compensation programs. Management believes adjusted EBITDA, when read in conjunction with Cryoport’s GAAP financials, is useful to investors because it provides a basis for meaningful period-to-period comparisons of Cryoport’s ongoing operating results, including results of operations, against investor and analyst financial models, helps identify trends in Cryoport’s underlying business and in performing related trend analyses, and it provides a better understanding of how management plans and measures Cryoport’s underlying business.

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SOURCE Cryoport, Inc.

Reported sales increased 0.4% to $2.082 billion; organic sales increased 0.3%GAAP Earnings Per Share (EPS) of $0.70; adjusted EPS1 of $1.64Generated $169 million in cash from operations; free cash flow1 of $76 millionRaises full-year 2024 organic sales growth, adjusted EPS and free cash flow guidance

ST. PAUL, Minn., Nov. 7, 2024 /PRNewswire/ — Solventum (NYSE: SOLV) today reported financial results for the third quarter ended September 30, 2024.

“We have now delivered consecutive quarters of outperformance against our expectations, and based on these results, we are again raising our full-year guidance,” said Bryan Hanson, chief executive officer, Solventum. “It has been an exciting start, and we are confident that our three-phased approach will drive long-term growth and significant value creation.”

Third Quarter 2024 Financial Results

Reported and organic sales growth reflect the expected normalization of pricing. By segment, organic sales growth was primarily driven by the MedSurg and Health Information Systems segments, partially offset by the Dental Solutions and Purification and Filtration segments. 

GAAP and adjusted operating income margin declined due to lower gross margins, including the impact from the 3M supply agreement mark-up, and an increase in operating expenses related to public company stand-up costs and growth investments.

Full-Year 2024 Guidance
Solventum is raising its full-year 2024 guidance

Organic sales growth to the upper half of 0% to +1.0% (previously 0% to +1.0%)Adjusted EPS of $6.50 to $6.65 (previously $6.30 to $6.50)Free cash flow of $750M to $850M (previously $700M to $800M)

Organic sales, adjusted EPS and free cash flow amounts included in Solventum’s full-year guidance and additional considerations below are non-GAAP financial measures. Solventum does not provide reconciliations of the forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items, such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items. 

Solventum’s full-year 2024 guidance is based on Q1 2024 as a carve-out plus the remainder of the year as a stand-alone company starting April 1, 2024.

See the “Non-GAAP Financial Measures” section for explanations of our non-GAAP financial measures.

Earnings Conference Call
Solventum will host a conference call today, November 7, at 4:30 p.m. Eastern Time to discuss its third quarter financial results and provide an update on its business. The conference call can be accessed via audio webcast at investors.solventum.com or by dialing (800) 715-9871 within the U.S. or +1 (646) 307-1963 for international callers, using the conference ID 6342275.

A replay of the webcast, along with the earnings press release, slides highlighting the results, and supplemental financial disclosures, will also be available at the same link on the Investor Relations section of the company’s website.

Forward-Looking Statement
This news release contains forward-looking information about Solventum’s financial results and estimates and business prospects that involve substantial risks and uncertainties. In particular, statements regarding the future performance of Solventum, including guidance for 2024, are forward-looking statements. You can identify these statements by the use of words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic, political, regulatory, international, trade and geopolitical conditions, natural disasters, war, public health crises, and other events beyond Solventum’s control; (2) operational execution risks; (3) damage to Solventum’s reputation or its brands; (4) risks from acquisitions, strategic alliances, divestitures and other strategic events; (5) Solventum’s business dealings involving third-party partners in various markets; (6) Solventum’s ability to access the capital and credit markets and changes in Solventum’s credit ratings; (7) exposure to interest rate and currency risks; (8) the highly competitive environment in which Solventum operates and consolidation in the healthcare industry; (9) reduction in customers’ research budgets or government funding; (10) the timing and market acceptance of Solventum’s new product and service offerings; (11) ongoing working relationships with certain key healthcare professionals; (12) changes in reimbursement practices of governments or private payers or other cost containment measures; (13) Solventum’s ability to obtain components or raw materials supplied by third parties and other manufacturing and related supply chain difficulties, interruptions, and disruptive factors; (14) legal and regulatory proceedings and legal compliance risks (including third-party risks) with regards to antitrust, FCPA and other anti-bribery laws, environmental laws, anti-kickback and false claims laws, privacy laws, product liability claims, tax laws, and other laws and regulations in the United States and other countries in which Solventum operates; (15) potential liabilities related to per-and polyfluoroalkyl substances; (16) risks related to the highly regulated environment in which Solventum operates; (17) climate change and measures to address climate change; (18) security breaches and other disruptions to information technology infrastructure; (19) Solventum’s failure to obtain, maintain, protect, or effectively enforce its intellectual property rights; (20) pension and postretirement obligation liabilities; (21) any events that adversely affect the sale or profitability of one of Solventum’s key products or the revenue delivered from sales to its key customers; (22) any failure by 3M Company (“3M“) to perform any of its obligations under the various separation agreements entered into in connection with the separation of Solventum from 3M and distribution (the “Spin-Off”); (23) any failure to realize the expected benefits of the Spin-Off; (24) Solventum’s ability to execute its turnaround strategy; (25) a determination by the IRS or other tax authorities that the Separation or certain related transactions should be treated as taxable transactions; (26) indebtedness incurred in the financing transactions undertaken in connection with the Separation and risks associated with additional indebtedness; (27) the risk that incremental costs of operating on a standalone basis (including the loss of synergies), costs of restructuring transactions and other costs incurred in connection with the Spin-Off will exceed Solventum’s estimates; and (28) the impact of the Spin-Off on Solventum’s businesses and the risk that the separation from 3M may be more difficult, time-consuming or costly than expected, including the impact on Solventum’s resources, systems, procedures and controls, diversion of management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties.

Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Solventum’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Solventum assumes no obligation to update any forward-looking statements discussed herein as a result of new information or future events or developments.

Non-GAAP Financial Measures
In addition to reporting financial results in accordance with U.S. GAAP, Solventum also provides non-GAAP measures that we use, and plan to continue using, when monitoring and evaluating operating performance and measuring cash available to invest in our business. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP financial measures are supplemental measures of our performance and our liquidity that we believe help investors understand our underlying business performance and Solventum uses these measures as an indication of the strength of Solventum and its ability to generate cash.

Solventum calculates forward-looking non-GAAP financial measures, including organic sales growth, adjusted operating income, adjusted operating income margin, adjusted effective tax rate, adjusted earnings per share, and free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. Solventum does not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items. The timing and amounts of these items are uncertain and could have a material impact on Solventum’s results in accordance with GAAP. 

The Q3 2024 financial statements and financial information, including reconciliations of non-GAAP financial measures, are available on Solventum’s website: investors.solventum.com.

About Solventum
At Solventum, we enable better, smarter, safer healthcare to improve lives. As a new company with a long legacy of creating breakthrough solutions for our customers’ toughest challenges, we pioneer game-changing innovations at the intersection of health, material and data science that change patients’ lives for the better — while empowering healthcare professionals to perform at their best. See how at Solventum.com. 

Solventum Corporation and Subsidiaries
BUSINESS SEGMENTS
(Unaudited)

Operating segments include components of an enterprise where separate financial information is available that is evaluated regularly by the company’s Chief Operating Decision Maker (“CODM”) for the purpose of assessing performance and allocating resources. The company’s CODM is its Chief Executive Officer. The company’s operating activities are managed through four operating segments: MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration. There have been no changes to the composition of the segments or to financial information reported within each of the business segments. These segments have been identified based on the nature of the products sold and how the company manages its operations. Transactions among reportable segments are recorded at cost. No operating segments have been aggregated to form reportable segments.

Corporate and Unallocated includes amortization of acquired intangible assets, restructuring and related charges, benefits or costs related to capitalized manufacturing variances, spin-off and separation-related costs and other net costs that the company chose not to allocate directly to its business segments. Spin-off and separation-related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone company, including system implementations, manufacturing relocation, legal entity separation, certain equity awards granted as part of the spin-off, profit mark-ups on transition service arrangements with 3M and other one-time costs. 

Corporate and Unallocated also includes sales and cost of sales related to products supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at spin-off. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis. Business segment operating income is reconciled to total operating income below:

Solventum Corporation
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES
(Unaudited)

In addition to reporting financial results in accordance with U.S. GAAP, the company use non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. These include (1) Adjusted operating income, and adjusted operating income margin, (2) Adjusted earnings per share, and (3) Free cash flow. Management believes that these non-GAAP financial measures are useful in evaluating current performance and focusing management on our underlying operational results.

There are limitations to the use of the non-GAAP financial measures presented in this information statement. These non-GAAP financial measures are not prepared in accordance with U.S. GAAP nor do they have any standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. Management cautions you not to place undue reliance on these non-GAAP financial measures, but instead to consider them with the most directly comparable U.S. GAAP measure. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered supplements to, not substitutes for, or superior to, the corresponding financial measures calculated in accordance with U.S. GAAP.

The tables below reconcile our non-GAAP financial measures to the nearest financial measure that is in accordance with U.S. GAAP for the periods presented.

Adjusted Operating Income, Adjusted Operating Income Margin and Adjusted Earnings Per Share (Non-GAAP measures)

Adjusted operating income and adjusted operating income margin are not defined under U.S. GAAP. Therefore, they should not be considered a substitute for earnings data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Solventum defines adjusted operating income as operating income excluding the effects of amortization, restructuring costs, and spin-off and separation-related costs. Adjusted operating income margin is adjusted operating income divided by the U.S GAAP measure total net sales for the same period. The company believes adjusted operating income and adjusted operating income margin provide investors with visibility into the company’s unleveraged, pre-tax operating results and reflects underlying financial performance. However, adjusted operating income should not be construed as inferring that the company’s future results will be unaffected by the items for which the measure adjusts.

Adjusted earnings per share is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for earnings data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Solventum defines adjusted earnings per share as net income excluding the after-tax effects of amortization, restructuring costs, spin-off and separation-related costs, and legal entity restructuring costs. The company believes adjusted earnings per share provides investors with improved comparability of underlying operating results and a further understanding and additional transparency regarding how the company evaluate the business. However, adjusted earnings per share should not be construed as inferring that the company’s future results will be unaffected by the items for which the measure adjusts.

_________

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Free Cash Flow (non-GAAP measure):

Free cash flow is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is meaningful to investors as it is a useful measure of liquidity and the company uses these measures as an indication of the strength of the company and its ability to generate cash. Free cash flow varies across quarters throughout the year. Below find a recap of free cash flow.

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SOURCE Solventum

Acquisition deepens Serve’s offerings for the restaurant industry, helping partners improve efficiency and manage labor shortage challenges from kitchen to curb

SAN FRANCISCO, Nov. 7, 2024 /PRNewswire/ — Serve Robotics Inc. (“Serve”) (Nasdaq: SERV), a leading autonomous robotic delivery company, today announced its agreement to acquire the assets of Vebu Inc. (“Vebu”), a trailblazer in full-stack automation and robotics solutions for restaurant partners. Financial terms of the all-stock transaction were not disclosed.

The acquisition strengthens Serve’s strategic positioning by providing its restaurant partners with a suite of automation solutions and expanding Serve’s offering beyond delivery into back of house automation. Vebu will help Serve become a more integral partner to restaurants, accelerating partner adoption as Serve expands its geographic footprint in new cities across the U.S.

Vebu’s signature robotic product is the Autocado, the pioneering avocado-processing robot which eliminates the need for restaurant workers to spend hours cutting, coring and scooping avocados to prepare guacamole. The Autocado allows employees to load up to 25 pounds of avocados into the device and walk away to focus on serving customers and preparing other items. It is now in pilot testing in Chipotle’s Huntington Beach, Calif. restaurant.

In addition, the transaction is expected to unlock key synergies:

Expanding Partnerships: Vebu’s partnership with leading restaurant companies such as Chipotle will extend Serve’s existing business relationships, which include Shake Shack and 7-Eleven, among others.Expanding Serve’s Market Opportunity: This acquisition complements Serve’s recent expansion into delivery over all distances through its partnership with Alphabet’s Wing Aviation subsidiary, making Serve one of the most comprehensive automation providers in the restaurant industry.

Vebu’s founder and CEO Buck Jordan will join Serve Robotics as SVP of Kitchen Automation. He will continue to lead the Vebu team, overseeing Autocado’s continued development and driving additional innovations on the product roadmap. Mr. Jordan, a serial entrepreneur who previously founded Miso Robotics, brings deep expertise and connections in kitchen automation. His experience in the sector, combined with Vebu’s innovation, will bolster Serve’s ability to address the labor shortages faced by the restaurant industry.

“By adding Vebu’s pioneering kitchen automation capabilities to our autonomous delivery offering, we are uniquely positioned to utilize robotics and AI to solve the labor shortages plaguing the restaurant industry. This acquisition underscores our commitment to helping our partners operate more efficiently and to expanding our partnerships with national chain restaurants like Chipotle. We are thrilled to be joined by an accomplished team pioneering an innovative technology, operating as a separate business unit within our organization,” said Dr. Ali Kashani, CEO and co-founder of Serve Robotics.

Buck Jordan, founder and CEO of Vebu, commented, “I am thrilled to join the Serve Robotics team, which I have known and supported since the early days as an investor. This is an exciting opportunity to merge our expertise and bring groundbreaking automation to a wider audience. Together, we will provide a suite of automation solutions that will change the future of restaurant operations.”

Vebu joins Serve with a balance sheet that supports its operations to complete its pilot with Chipotle. This acquisition strengthens Serve’s core business and long-term strategy to be a leader in restaurant automation.

About Serve Robotics

Serve develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. The company has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.

For further information about Serve Robotics (Nasdaq:SERV), visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.

About Vebu Inc.

Vebu is a full stack Automation, Robotics, and Intelligence company focused on building technology solutions for and with the broad food industry. With a partner driven team of experts spanning engineering, robotics, artificial intelligence, and product development, Vebu is building products to help humans do more. For further information, visit vebulabs.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Serve intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. These forward-looking statements can be about future events, including statements regarding Serve’s intentions, objectives, plans, expectations, assumptions and beliefs about future events, including Serve’s expectations with respect to the financial and operating performance of its business, its capital position, and future growth. The words “anticipate”, “believe”, “expect”, “project”, “predict”, “will”, “forecast”, “estimate”, “likely”, “intend”, “outlook”, “should”, “could”, “may”, “target”, “plan” and other similar expressions can generally be used to identify forward-looking statements. Indications of, and guidance or outlook on, future earnings or financial position, performance, or outcomes from our planned acquisition described in this press release are also forward-looking statements. Any forward-looking statements in this press release are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. Risks that contribute to the uncertain nature of the forward-looking statements include those risks and uncertainties set forth in Serve’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission (the “SEC”) and in its subsequent filings filed with the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Serve undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Contact

Media
Aduke Thelwell, Head of Communications & Investor Relations
Serve Robotics
press@serverobotics.com

Investor Relations
investor.relations@serverobotics.com

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SOURCE Serve Robotics Inc.