Societal CDMO Inc. Q1 2023 Earnings Call

Speaker 1: Good day, ladies and gentlemen, and welcome to the Societal CDMO First Quarter 2023 Financial Results Conference call. At this time, all participants are in a listen-only mode.

Speaker 1: Later, we welcome to the question and answer session. The instructions will follow at that time. As a reminder, this conference call may be recorded. I would now like to hand the conference over to Stephanie Diaz of Societals Investment Relations Group. Please go ahead.

Speaker 2: Thank you. Hello and thank you for joining us. On today's call, we have David and Lowe President and CEO and Ryan Legg, Chief Financial Officer.

Speaker 2: Today we will be providing an overview of societal contract development and manufacturing business, including updates on corporate activities and financial results for the quarter-end is March 31, 2023.

Speaker 2: After our prepared remarks, we will welcome your questions. Before we begin, I'd like to caution that comments made during this conference call today, May 10, 2023, will contain certain forward-looking statements within the meaning of the private security litigation reform after 1995, concerning the current beliefs of the company.

Speaker 2: which involve a number of assumptions, risks, and uncertainties.

Speaker 2: Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.

Speaker 2: Our earnings press release, MS Call, will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at societalcdmo.com.

Speaker 2: With that, I'll turn the call over to David Enlough, Societal's President and CEO .

Speaker 3: Thank you, Stephanie, and thank you to everyone participating today via Webcast.

Speaker 3: As reported during our March webcast, 2022 was a transformative year for societal, and we have been pleased to ride the momentum created into the first quarter of 2023, despite the overall headwinds our industry is experiencing.

Speaker 3: Since the beginning of 2023, we have announced multiple new business wins, including new customer wins, as well as the expansion of work with multiple existing clients.

Speaker 3: During the period, we were also very pleased to announce the FDA's approval of societal first commercially manufactured tablet product, an important expansion of our capabilities that extends beyond the company's longstanding expertise in commercial capsule production.

Speaker 3: I will provide a more detailed review of our Q1 2023 achievements following an overview of our financial results for the quarter-ended March 31, 2023. For that, I'll turn the call over to Ryan.

Speaker 3: Thank you, David. Good afternoon, everyone. Before I begin, in addition to the brief financial overview, I'll provide on the call today additional details on our financial results for the first quarter and at March 31st, 2023, or included in our press release issued prior to this call.

Speaker 3: and in our form, thank you, which is on file with the SEC.

Speaker 3: Revenues for the quarter ended March 31, 2023 were 21.5 million. This represents a slight increase compared to our revenues of 21.2 million recorded during the prior year period. The increase of 0.3 million was primarily driven by an increase in revenue from the company's largest commercial customer Tava.

Speaker 3: correlated with pull-through and demand resulting from market share gains against the sole competitor for the Verapimil SR products. These increases were partially offset by lower revenues from commercial product sales to Lynette due to timing of customer orders.

Speaker 3: Cost of sales for the quarter ended March 31st, 2023, was 19.3 million compared to 16.2 million for the comparable period of 2022. The increase at 3.1 million was primarily due to mixer revenue and related cost absorption, including increased cost associated with the new ASIP-DIC-FILF finish line.

Speaker 3: as we expand those capabilities and increase material costs.

Speaker 3: Selling General Administrative Expenses for the first quarter of 2023 were 4.6 million compared to 5.7 million recorded in the 2022 period.

Speaker 3: The decrease of 1.1 million was primarily related to lower public company costs and administrative costs than the prior year.

Speaker 3: Interest expense was 2.1 million for the three months ended March 31, 2023. The decrease compared to 3.4 million for the comparable period of 2022. The decrease of 1.3 million was primarily due to a significantly reduced amount of aggregate principle.

Speaker 3: and lower interest rates under the company's refinance debt as compared to borrowings outstanding during the period ended March 31st, 2022.

Speaker 3: For the quarter-ended March 31st, 2022, the company recorded a net loss of 4.7 million or 6 cents per diluted share as compared to a net loss of 4.3 million or 8 cents per diluted share for the comparable period of 2022.

Speaker 3: EBITDA as adjusted for the period was 0.6 million compared to 2.8 million in the prior year period. The 2.2 million decrease in EBITDA is primarily due to a mix of revenue and related cost absorption offset by reducing selling general and administrative costs.

Speaker 3: This concludes my financial overview. For those interested in reviewing our non-GAF reconciliations, please refer to our AP filing or the press release issued today. I'll now turn the call back over to David for an update on operations and achievements during the period. David? Please.

Speaker 3: Thanks, Ryan. Societals Achievements during 2022 positioned the company well for continued progress during the first quarter of 2023.

Speaker 3: Specific accomplishments in 2022 included enhancing the company's corporate identity and branding, and successful adoption of a segment-specific marketing strategy to best serve our customers.

Speaker 3: company signing over 170 new or expanded scope changes for projects with 33 different customers.

significantly expanded and diversified customer base compared to 2021 with more than three times the number of customers that we had just two years ago.

In addition to the progress recorded in 2022, many of our successes last year have laid the foundation for growth and increasing financial strength in the future.

Notably, last year, Societal launched new aseptic fill finish and lyophilization services to better serve the end-to-end needs of our clients. We have also recently hired new personnel with expertise in the injectables market to facilitate this important capabilities expansion in our West Coast facility. And looking forward, we continue to explore opportunities.

for growth through facilities and enhancement and expansion of our capabilities. But perhaps the 2022 achievement that will have the most influence on the company's progress in the future with the successful execution of a multi-step strategy designed to recast our capital structure, improve our balance sheet, and strengthen our overall financial profile.

This strategy was comprised of four separate transactions, including a sales and purchase agreement to sell approximately 121 acres of Lakefront land to a leading national home builder for approximately 9.1 million. The unused land is located adjacent to the Society's manufacturing facility in Gainesville, Georgia.

subject to completion of diligence, we expect the sale to close in the second half of 2023.

Second, a sale and lease back transaction for our Gainesville, Georgia manufacturing site and campus, which yielded $39 million in non-delutive gross proceeds.

Third, the successful closing of concurrent public offerings of common stock and preferred stock generating gross proceeds of approximately $35.6 million prior to deducting the underwriting discount to an estimated offering expenses.

As a result of these transactions, societal was able to repay and retire a $100 million debt facility and replace it with a $36.9 million term A loan that carries terms which are significantly more advantageous to societal. These transactions resulted.

In the significant improvement of the company's net debt leverage ratio from greater than 6 times EBITDA to just over 2 times EBITDA, immediately reducing our annual interest burden by an estimated $6 million with the potential to increase that number to approximately $7 million annually.

And we expect that our financial position will be further strengthened with the closing of the land sale, which is expected to generate gross proceeds of $9.1 million later this year. While it is not our intent to look too long into the rearview mirror, I believe it is important to restate these important achievements.

as they have removed certain financial burdens, placed societal in an overall stronger financial position, and paid the way for growth in 2023 and beyond.

Looking at 2023, we remain confident at this time and our ability to achieve our stated guidance for the year. This is based largely on the 12-month forecast we have seen from customers as well as the orders already booked through Q3 of this year. While our revenue during the period reflected only a slight increase,

as compared to the same 2022 period. It is important to acknowledge the period to period fluctuations or lumpiness that is commonplace in our business, caused largely by timing and type of production runs and cost absorption related to those runs.

We continue to closely monitor the plans of our capital market dependent plants. As discussed last quarter, financing challenges have impacted some of those customers' pipeline development plans.

However, given the overall level of activity we have seen in recent weeks and our ability to maintain our win rate that we have successfully improved during 2022, we remain confident for the remainder of the year.

During the first quarter, we won multiple key projects, including signing four new customers and expansions for 12 existing programs that will continue to feed our backlog, our manufacturing pipeline, and our capacity utilization during the year.

As a point of comparison, SIDLE signed a total of 15 new customers during the entirety of fiscal 22 placing us on track to potentially beat that measure in fiscal 2023.

Notable among our first quarter wins is the project recently announced with new customer Longboard Pharmaceuticals. This project will span a range of societal offerings including technology transfer and analytical method validation activities to support Longboard's lead asset.

LP352, a 5-HT2C receptor super agonist. The scope of work for this project highlights societal attractiveness to those customers requiring a broad range of services to advance their candidates through clinical development, spanning tech transfer, and through to CGMP manufacturing.

Subject quarter end, we also announced that the company had signed work order extensions with multiple existing customers that also span a range of the company's CDM of services. While securing new customers remains an important objective for the company, being awarded expansion projects by our existing customers is an equally important area of growth for the company.

During the first quarter, we saw multiple work expansion agreements spanning from analytical services to manufacturing, to product encapsulation and packaging. Another important event for societal during the first quarter was the approval by the FDA of the company as a manufacturer of the commercial tablet product.

disapproval is the first for societal for the manufacturer of a commercial tablet, reflecting both the company's ongoing expansion of capabilities, as well as our success in building society's reputation as a CMO of choice.

We are delighted to have been entrusted with the production of this important product, and we expect to begin manufacturing it later this year in our Gainesville, Georgia facility. In other product news, we would also like to comment on Lynette's announcement regarding this recently executed restructuring support agreement for RSA.

and bankruptcy filing.

As a reminder, societal CDMO owns the NDA and the drug master file for Berrapa Mill along a proof calcium channel blocker for the treatment of hypertension.

Lennet has served as the company's marketing partner for the Berapemel PM and Beryl and SR formulations since 2014. In July 2022, the company entered into an agreement to its license and supply agreement with Lennet, which provided societal CDMO with improved overall economics.

increases in manufacturing prices, and potential new GMP manufacturing agreements targeting injectable products for multiple additional lead-out development projects.

In addition, the agreement provided societal with options to engage with alternative marketing partners under certain conditions.

while reducing its debt burden and strengthening its balance sheet. Importantly, we believe this agreement will allow Lynette to continue to execute as a marketing partner to societal CDMO in the near term.

However, it's important to note that societal CDMO is first and foremost committed to protecting and expanding the distribution of our RAPAMIL PM and Beryl and SR products. For that reason, we have been carefully monitoring Lynette's circumstances over the past 12 months and expect that should it be necessary.

Any transition from Lynette to another marketing partner would take place with limited disruption to the sales of the RAPML, PM, and VIRL and SOAR.

In closing, we would first like to address the recent pressure on the company's stock price.

and we wish to assure you that no internal event or factor has triggered the decline in value. Our fundamentals are now stronger than ever, particularly given all the progress we have made the past couple of years diversifying our customer portfolio and addressing our debt position. And we began 2023 from a fortified position of strength.

that we believe will facilitate growth this year and for many years to come.

The steps taken last year and to date in 2023 have honed our business development and marketing strategies resulting in valuable new business and expansion Project WINS during the first quarter.

We continue to expand and enhance our capabilities, including making an investment in the high value injectables market, including biologics.

This concludes my prepared remarks for today. We can now open up the call for questions.

Operator. Thank you. To ask a question, please press star 11 or your telephone and wait for your name to be announced.

To withdraw your question, please press star 111 again. Please send by will we compile the Q&A roster? Our first question comes from the line of Matt Hewitt with Craig Hallum Capital Group. Congratulations on the strong start to the year. Maybe first up regarding the first commercial tablet. Maybe explain.

but certainly you know we see an active market on both the capsule side and the tablet side and having this commercial approval and the knowledge of the ability for us to successfully perform a technology transfer

in the way that we did is something that we're communicating to future customers. And, you know, we're engaged in discussions that will make us not just the producer of one commercial tablet in the future, but...

You know, that is certainly part of our business development effort right now is to leverage this new capability and if you will feather in our cap.

Got it, that's helpful. And then, you know, it seems like more so this quarter than maybe even the Q4 earnings season we've been hearing a lot about the challenging environment particularly for small farm and biotech companies, you know, maybe kind of reigning and spending kind of holding off yet. You put up a pretty strong quarter from a new window.

We spent a lot of time, as you know, in 2022, really...

focusing our targeting efforts, if you will, for clients that we're strong fits inside the set of capabilities that we offer. And we were able to increase our win rate by, you know,

somewhere between 2x and 3x. But Matt, I don't want to mislead either. I mean, we are seeing programs where there were going to be 2 and now there's 1. Or something's getting postponed. And so certainly, I would say we are not...

completely excluded from what we're seeing there. There were fewer opportunities, I'll say it that way. Particularly January , February , March, we're actually seeing a bit more traction now and uptick. But back to the real question you asked, I think we have a very experienced sales team.

into our efforts and it's been top of mind every day and every afternoon and I think as a result we're seeing some good traction here.

Got it, and maybe one quick one, and then I'll hop back into Q. Close margins in the quarter, you explained I think you was mixing a couple other factors, but does that bounce back here in the second quarter, or how should I be thinking about close margins over the remainder of the year? Thank you.

Hi Matt, thanks for the question. So Q2, we expect gross margins to be in a 20% range and then in the second half an improvement with margins close to the 30% range in that stdda higher expected revenue and mix.

Thanks for the question. So Q2, we expect gross margins to be in the 20% range and then in the second half an improvement with margins close to the 30% range and that's due to higher expected revenue and mix. Excellent. Thank you.

Thank you. Our next question comes from the line of Max Smock with William Blair. You know why it's not open. Hey, thanks for taking our question. Then we're just following up on one of your comments a second ago in terms of seeing more traction recently after January and February . Just wondering if you're going to walk us through.

how things have turned in month over month here in the second quarter and whether you seem to pick up that maybe it was a little bit better than you expected when we spoke a couple months ago during the fourth quarter earnings goal. Thank you. Yeah, thanks Max David here. I mean we we you know certainly track.

activity and I can't give you, I think people are settling into the new normal. I think also, you know, quite frankly, as you know, smaller companies aren't going to get to their next value inflection point by only sitting on their cash. And I think there was just a employees.

If I can overly generalize, I think there was a Q1 kind of a freeze and hunker down until next time.

people began to understand, we've all heard how the second half of 2023 is going to be so much better. And I think that that has waned down a little bit, and it might be a little bit more of a sustained level that the market is experiencing. So, you know, people are now kind of popping back up and saying, all right, this is what we have.

can up off to the races in terms of getting going on programs.

Got it. Make sense. Good to hear. Following up, there's been some major disruptions about the large employer in the space and we've heard about some of their smaller customers leaving actually and I wonder if you've actually seen that have an impact for you yet in terms of number of proposals written so far this year or win rate and what it can mean for your ability to win new business year moving forward in 2023.

Yeah, I mean, I certainly don't want to...

speak about a different company in our space, but I'll say that our value proposition all along.

Right, has been that we're not one of the big CDMOs. We are able to provide a more agile, flexible and bespoke approach to a, particularly to a smaller companies program where they're going to have access to the top of the organization anytime.

And, you know, it is more of a boutique-y type of offering. And right now, with the smaller companies being so careful, rightfully so, with their cash and wanting to have strong relationships with manufacturing partners they can trust, I think we're in a good position to step in and fill that void.

comment around whether or not the uptick or whether or not you've even seen any uptick in cancellations here in particular or if you have any concerns about some of your pre-commercial customers to pay. Thank you.

Hey, Max, this is Ryan. I would say, you know, generally speaking for the quarter, we added four million in that backlog, which is a positive sign. I also think that...

Hey, Max, this is Ryan. I would say, you know, generally speaking for the quarter, we added four million in that backlog, which is a positive sign. I also think that just from a

adding new customer perspective. We're playing in the right spaces, right? High-value areas, including high-potency, controlled substances, DEA regulated products, sterile fill finish.

high potency, all of those are very attractive spaces for our customers. So we haven't experienced or seen any impact. And I would generally say there's probably about half of our customers in that preclinical phase one part of our pipeline.

Okay, great. Thank you both.

And Max I'll this David again just a little bit of a pile on here is

Our strategy, if you recall,

Starting about a year and a half ago was to also really expend effort energy and

and resource on securing later stage tech transfer type programs that either did not have a presence in the U.S. or needed more of a presence in the U.S. and that strategy has proven to be, you know, very timely right now.

because those programs are far more likely to be funded and not dependent on the capital markets. So I think that's been an advantage for us recently.

Yeah, absolutely. Thank you for that, your comment there. Thank you. Our next question comes from the line of Sean Dodge with the RBC Capital Market. Sheerline is now open.

Hey, good afternoon. This is Thomas Keller on for Sean. Thanks for the questions and congrats on all the commercial momentum.

I just wanted to follow up on that 2080 tech transfer model. You said you've seen some good progress there. I guess should we expect any contribution to that in the next year or is that still kind of longer term? fingers?

Yeah, thanks for the question. This is David. You know, it's hard to say. I'll say that it is...

And offering designed for a company who is not fully budgeting a full second source alternative. And so we think about it in terms of either US-based or...

XUS based companies who want to make sure that they have an opportunity to be in position to pull the trigger. Should they have a situation where they need a second source, but they can't fund the whole thing. And I've said this before.

tsunami of activity, but it is something, it is one way that we can demonstrate that we understand what development companies are going through and what their constraints.

companies as well to try to be flexible during this the top market environment. All right, that's helpful. Thank you. And then let's look over the FDA inspection of the building and pangiergo back in January . There's more detail you can provide on observations there. And did you have any or are you expecting any associated remediation costs?

Yeah, good question. Thanks.

No, there's nothing else to be done. There were three points made, three observations. They were all at two of the three were addressed before the inspector left. The other one was addressed a handful of days later. We turned in our response early to it. And the most important part was...

of this inspection was we were blessed to have the same inspector that had been at that site prior to our acquisition and it served as the ultimate measuring stick of the progress we had made.

maturing those quality systems, regulatory, compliance systems, and just the overall quality mindset on that site. And we were very pleased with the comments that the inspector made of, you know, he was...

He remarked over and over about the commitment to quality, the progress, the level of compliance, and was very pleased. So there's nothing left to do there. And there's no such thing as an easy fix, but if there were, these were the ones. So we were very happy with the outcome of that inspection. Wendell,

All right, perfect. Good to hear. Thanks for the comments.

Perfect, good to hear. Thanks for the comments. Thank you.

Thank you. Our next question comes from the line of Jacob Johnson with Steven. She'll want to know up then. Good afternoon. This is Mack on for Jacob. Just a quick question on the event relationship. Appreciate the additional color that you all gave. But if you were to switch partners, just out of curiosity, how long might that take and would you potentially be able to achieve the same?

economics that you received in that revised relationship last year. Hi, Matt. It's Ryan. So, you know, what I would say is that we've gone through, you know, several scenario planning related to that and, you know, we would anticipate about a three month

would continue to receive profit sharing on that. And we would transition that to a new partner. And I think to answer your last part of the question, we would expect to be able to receive similar or better economics. Certainly we're having ongoing discussions with other.

partners or potential partners about that and these are very valuable assets and you know there's parties that are very interested in them and it's our job to make sure that you know we're doing everything we can to

really monetize that that wrap them all franchise and improve on the economics. Appreciate the additional color. Thanks for taking my question.

monetize that Barraft and Milfranchise and improve on the economics. I appreciate the additional color. Thanks for taking my question.

Monetize that that Barraff to mill franchise and improve on the economics. Appreciate the additional color. Thanks for taking my question. Thank you.

Our next question comes from the line of Marla Marin with Zach's. Your line is open. Thank you. So switching topics, I'm wondering if you can provide a little bit more color on the expansion of your capabilities now with the FDA approval on tablet manufacturing. How to think about the sales cycle there. First of all, is this something that you're expecting your existing sales capability can continue to negotiate for leverage?

you know, try to obtain more wins here. And how to think about the sales cycle, the length of time between initiating discussions and closing a sale. And if you think that that is going to get longer given the current.

business and economic environment. Thank you. Yeah, I'm Arla David here. I'll um, I think I'll go backwards on that. We certainly have seen, you know, to some of the points in the earlier questions around, you know, companies

now. You know, and then.

Of course, there's a little bit of a hurry up and wait thing that's happening too because once these clients get the green light, then they're ready to go, right? So we have seen some things drag out.

Longer than they would have a year ago or two years ago. So, so that that is an impact and it's something that we're staying on top of and working with these customers to help communicate with their management and board.

on what we can do to be helpful and flexible there. With respect to the commercial cabling, cabling has been a competency of the company, but not all the way through to a commercial product.

I don't want to say all this, but what this really represents is the proven ability to take something from beginning all the way through commercialization, not only for capsules, not only for modified release capsules, but now also for tablets.

Having that experience is just one more step of validation and another opportunity for us. Now, our current business development team can definitely support that and is. And it, quite frankly, it makes.

the team's job a bit easier because we have been through that process. And I need to also for color say that the approval did not require

and on-site inspection because of, we believe, the long, long history of success at the Gainesville, Georgia site commercially for other products that were not tabloids. So, you know, we have a great deal of confidence going forward that we can carry out more.

of those sorts of programs and we're engaging in those sorts of discussions to grow that part of our business. I think I answered everything that you asked, but I'm not sure. Tell me if I missed something. No, I think you did. Thank you.

and we're engaging in those sorts of discussions to grow that part of our business. I think I answered everything that you asked, but I'm not sure. Tell me if I missed something. No, I think you did. Thank you. Sure. Your welcome.

Thank you. I'd now like to turn the call back over to David Enlow for closing remarks. Many thanks to all of our clients, supply chain, and other service providers and partners, and particularly to our excellent societal team. We look forward to many great achievements in the months ahead, and thank you all again for participating.

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Good day, ladies and gentlemen, and welcome to the societal CDMO first quarter 2023 financial results conference call at this time. All participants are on the list. Later we welcome to the question and answer session. The instructions will follow at that time as a reminder. This conference call may be recorded.

I would now like to hand the conference over to Stephanie Diaz of Societals Investment Relations Group. Please go ahead.

Thank you. Hello and thank you for joining us. On today's call we have David and Lowe, President and CEO and Ryan Legg, Chief Financial Officer. Today we will be providing an overview of societal contract development and manufacturing business, including updates on corporate activities and financial results for the quarter-ended March 31, 2023.

After our prepared remarks, we will welcome your questions. Before we begin, I'd like to caution that comments made during this conference call today, May 10, 2023, will contain certain forward-looking statements within the meaning of the private security litigation reform act of 1995, concerning the current beliefs of the company, which involve a number of assumptions, risks, and uncertainties. Actual results could differ from these statements.

and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters. Our earnings press release and this call will include discussion of certain non-GAAP information.

You can find our earnings press release including relevant non-GAAP reconciliations on our corporate website at societalcdmo.com

was a transformative year for Societal and we have been pleased to ride the momentum created into the first quarter of 2023 despite the overall headwinds our industry is experiencing.

Since the beginning of 2023, we have announced multiple new business wins, including new customer wins, as well as the expansion of work with multiple existing clients.

During the period, we were also very pleased to announce the FDA's approval of Societals' first commercially manufactured tablet product, an important expansion of our capabilities that extends beyond the company's longstanding expertise in commercial capsule production. I will provide a more detailed review of our Q1 2023 achievements.

following an overview of our financial results for the quarter ended March 31, 2023. For that, I'll turn the call over to Ryan. Thank you, David. Good afternoon, everyone. Before I begin, in addition to the brief financial overview I'll provide on the call today, additional details on our financial results for the first quarter ended March 31, 2023.

are included in our press release issued prior to this call and in our forms in queue, which is on file with the SEC. Revenues for the quarter ended March 31, 2023, were $21.5 million. This represents a slight increase compared to our revenues of $21.2 million recorded during the prior year period.

The increase of 0.3 million was primarily driven by an increase in revenue from the company's largest commercial customer Tava correlated with pull-through and demand resulting from market share gains against the sole competitor for the Verapimil SR products. These increases were partially offset by lower revenues from commercial product sales to Lynette.

due to timing of customer orders. Cost of sales for the quarter ended March 31, 2023, was $19.3 million compared to $16.2 million for the comparable period of 2022. The increase of $3.1 million was primarily due to mix of revenue and related cost absorption.

including increased costs associated with the new ACIPTIC fill finish line as we expand those capabilities and increased material costs. Selling General Administrative Expenses for the first quarter of 2023 were 4.6 million compared to 5.7 million recorded in the 2022 period.

The decrease of $1.1 million was primarily related to lower public company costs and administrative costs than the prior year.

Interest expense was 2.1 million for the three months ended March 31, 2023. The decrease compared to 3.4 million for the comparable period of 2022. The decrease of 1.3 million was primarily due to a significantly reduced amount of aggregate principle.

and lower interest rates under the company's refinance debt as compared to borrowings outstanding during the period ended March 31, 2022.

For the quarter ended March 31, 2022, the company recorded a net loss of $4.7 million or $0.06 per diluted share as compared to a net loss of $4.3 million or $0.08 per diluted share for the comparable period of 2022. EBITDA, as adjusted for the period, was $0.06 million compared to $2.8 million and $2.3

please refer to our AP filing or the press release issue today. I'll now turn the call back over to David for an update on operations and achievements during the period.

Thanks, Brian . Societals achievements during 2022 positioned the company well for continued progress during the first quarter of 2023. Specific accomplishments in 2022 included enhancing the company's corporate identity and branding and successful adoption of a segment specific marketing strategy to best.

Services Business grew 58% in 2022 compared to the prior year. And we ended the year with a significantly expanded and diversified customer base compared to 2021 with more than three times the number of customers that we had just two years ago. In addition to the progress recorded in 2022.

Many of our successes last year have laid the foundation for growth and increasing financial strength in the future. Notably, last year, Societal launched new aseptic, filth finish, and lyophilization services to better serve the end-to-end needs of our clients. We have also recently hired new personnel with expertise in the...

22 achievement that will have the most influence on the company's progress in the future with the successful execution of a multi-step strategy designed to recast our capital structure, improve our balance sheet, and strengthen our overall financial profile.

This strategy was comprised of four separate transactions, including a sales and purchase agreement to sell approximately 121 acres of lakefront land to a leading national homebuilder for approximately $9.1 million. The unused land is located adjacent to societal's manufacturing facility and...

$39 million in non-dilutive gross proceeds.

Third, the successful closing of concurrent public offerings of common stock and preferred stock generating gross proceeds of approximately $35.6 million prior to deducting the underwriting discounts and estimated offering expenses. And finally, new

securing a new debt facility for $36.9 million from Royal Bank of Canada. As a result of these transactions, Societals was able to repay and retire a $100 million debt facility and replace it with a $36.9 million Term A loan that carries terms which are significantly more advantageous to Societal.

These transactions resulted in the significant improvement of the company's net debt leverage ratio from greater than six times EBITDA to just over two times EBITDA, immediately reducing our annual interest burden by an estimated $6 million with the potential to increase that number to approximately $7 million annually.

And, we expect that our financial position will be further strengthened with the closing of the land sale, which is expected to generate gross proceeds of $9.1 million later this year. While it is not our intent to look too long into the rearview mirror, I believe it is important to restate these important achievements as they have removed certain financial burdens.

placed societal in an overall stronger financial position, and paved the way for growth in 2023 and beyond. Looking at 2023, we remain confident at this time in our ability to achieve our stated guidance for the year. This is based largely on the 12-month forecast we have seen from customers.

as well as the orders already booked through Q3 of this year. While our revenue during the period reflected only a slight increase as compared to the same 2022 period, it is important to acknowledge the period to period fluctuations or lumpiness that is commonplace in our business.