Catalent(US:CTLT)2020-11-03 20:41Financial Data and Key Metrics Changes - The company reported a constant currency revenue growth of 26% year-over-year, with 20% being organic growth [9] - Adjusted EBITDA for the first quarter was $174 million, representing a constant currency growth of 35% compared to the first quarter of fiscal 2020 [9] - Adjusted net income for the first quarter was $78 million or $0.43 per diluted share, up from $0.26 per share in the first quarter of fiscal 2020 [9][45] Business Segment Performance - The Biologics segment saw net revenue double compared to the first quarter of fiscal 2020, with 83% organic growth and margin expansion of over 900 basis points to 28.2% [10] - The Clinical Supply Services segment posted revenue of $92.7 million, an increase of 8% over the prior year, driven by increased clinical trial activity [42] - The Softgel and Oral Technologies segment experienced a revenue decline of 17% compared to the first quarter of 2020, attributed to reduced volumes in prescription products and consumer health products [33] Market Data and Key Metrics Changes - The backlog for the Clinical Supply Services segment was $428 million, slightly higher than the previous quarter and up 14% from the prior year [43] - Development revenue across both small and large molecule products was $372.5 million, which is 84% above the development revenue recorded in the first quarter of fiscal 2020 [40] Company Strategy and Industry Competition - The company is focusing on strategic investments in biologics capabilities and capacity, including a $200 million capital addition to U.S. drug product and drug substance capacity [15] - Catalent is expanding its gene therapy campus with an investment of approximately $130 million to add five additional manufacturing suites [19] - The company is actively pursuing M&A opportunities to enhance its capabilities and capacity, particularly in Europe [70] Management's Comments on Operating Environment and Future Outlook - Management raised fiscal 2021 revenue expectations by $130 million to $180 million, and adjusted EBITDA expectations by $40 million to $60 million due to higher net demand [8] - The company expects strong growth in the Biologics segment for the remainder of the fiscal year [32] - Management noted that the first quarter is typically the lightest quarter, with expectations for increased performance in the second half of the fiscal year [53] Other Important Information - Catalent was added to the S&P 500 Index in September, reflecting substantial progress in executing its growth strategy since its IPO in 2014 [27] - The company is experiencing elevated operating costs related to the pandemic, impacting margins across all segments [35] Q&A Session Summary Question: Breakdown of Biologics growth - Management confirmed that more than half of the organic growth in the Biologics segment was from non-COVID-related activities, with significant contributions from gene therapy and cell therapy [57][58] Question: Impact of take-or-pay agreements on guidance - Management stated that take-or-pay agreements were included in guidance but did not factor in any approvals, with expectations for these agreements to impact the second half of the fiscal year [62][63] Question: Update on MaSTherCell performance - Management expressed optimism about MaSTherCell's growth potential, highlighting investments in facilities and capabilities to support future revenue growth [90]