Bridgewater College

TRENTON, N.J., Oct. 7, 2024 /PRNewswire/ -- BioNJ is hosting its C-Suite Summit this Thursday, October 10, 2024, at the Bridgewater Marriott. In its twelfth year, the C-Suite Summit convenes executives from across the life sciences sector, representing a diverse array of companies — from early stage start-ups to established industry leaders, spanning both public and private sectors, as well as revenue-generating and pre-revenue enterprises. Together, they engage in insightful discussions on the critical issues shaping C-Suite decision-making as the industry strives to bring groundbreaking treatments to market. In the face of unprecedented change, the biopharmaceutical industry stands at a pivotal juncture. With the next wave of innovation on the horizon, this Summit offers a unique opportunity to reflect on the current landscape of life sciences and explore how companies can successfully navigate this dynamic era of transformation. "As shifts in policy and fluctuations in biopharma investment continue, the future of innovation in our industry continues to be closely scrutinized," said BioNJ President and CEO Debbie Hart. "The C-Suite Summit offers a vital platform for industry leaders to engage in open dialogue, exploring where the most promising opportunities exist and how to collectively navigate and shape the next frontier in life sciences and medical breakthroughs." The speaker roster, featuring world-class leaders, includes: Britt Byers, Sr. Vice President, Human Resources NA, Kyowa Kirin Jan Campbell, Managing Partner, Pharmaceuticals & Biotechnology, Korn Ferry Donna Conroy, Founder & CEO, SciMar ONE Vikki Conway, Sr. Vice President & Head, Human Resources US, Teva Pharmaceuticals Kiran Dattani, Customer Success, Transformation, Strategy & Architecture, Google Cloud Healthcare & Life Sciences, Google Tom Evegan, Principal, Strategy & Management Consulting; National Consulting Leader Life Sciences, RSM Hon. Jim Greenwood, Former Congressman & Former President & CEO, BIO Hisham Hamadeh , Ph.D., Sr. Vice President & Global Head, Data Science & AI, Genmab John Harlow, Chief Commercial Officer, Melinta Therapeutics Debbie Hart, President & CEO, BioNJ Paul Hunter, Vice President, Market Access & Commercial Operations, Halozyme Garrett Ingram, President & CEO, Cipla Therapeutics Christopher Jackson, Managing Member, The Law Office of Christopher S. Jackson Haripriya Jain, MS, MBA, Executive Director, Global Value & Access Consulting, Evidera, part of Thermo Fisher Scientific Rohan Jain, General Manager, Commercial, Nusano Harriet Keane, Partner, McKinsey & Company Sydney Klein, Chief Information Security Officer & Head, IT Core Services, Bristol Myers Squibb Keith Koharski, Executive Director, Global Development IT, Regeneron Emer Leahy, Ph.D., MBA, President & CEO, PsychoGenics & Chair, BioNJ Lisa LeCointe-Cephas, J.D., Partner, Compliance & Investigations & Global Chair, Life Sciences Sector, DLA Piper Will Lewis, J.D., MBA, Chair & CEO, Insmed Husseini Manji, M.D., F.R.C.P.C., Professor, Oxford University; Co-Chair, UK Govt MH Mission; Former Global Head, Neuroscience, Janssen/Johnson & Johnson Jake McDowell, Vice President & Head, Market Access, Pricing & Value, Partner Therapeutics Clive Meanwell, M.D., Chairman & Partner, Population Health Partners Aamir Mecklai, Managing Director, Healthcare Investment Banking, Bank of America Heather Meade, J.D., Principal, EY Christopher Mortko, Ph.D., MBA, Vice President, Business Development & Licensing, Merck Gina Murdoch, MBA, President & CEO, Multiple Sclerosis Association of America Brandon Parry, Sr. Partner, McKinsey & Company Tarek Rabah, President & CEO, Otsuka Pharmaceuticals Deiva Ramachandran, Ph.D., Partner, Generative AI-Automation Practice Leader, Healthcare, Life Sciences, State & Local Govt., IBM Arda Ural, Ph.D., Partner & Americas Industry Market Leader for Life Sciences and Healthcare, EY Monika Vnuk, M.D., Sr. Vice President, Global Partnering & Business Development, Sanofi Scott White, MBA, Chief Operations Officer, NA Innovative Medicine, Johnson & Johnson The action-packed agenda includes these topics: The Next Wave of Innovation in Life Sciences Harnessing Change to Deliver Impactful Innovation Policy Uncertainties in an Election Year Market Access & Reimbursement Topics in Talent: Attraction, Retention & Diversity Research & Development in Mental Health Continued Evolutions in Go-to-Market Models Including Patient Services Evolving Capital Markets & Implications for Innovation The Digital & AI Era in the Biopharma Industry: How Can Companies Across Functions Transition from Hype Into Reality? Click here for the full agenda. "From access, regulation and policy to talent and AI, our experts will dive into what the industry should be doing ― and how we can work together ― to foster medical innovation and ensure Patient access," added Hart. "We hope all stakeholders will join us for this very important discussion." Click here to register. Registration is $695 for BioNJ Members and $895 for future BioNJ Members. The C-Suite Summit is closed to media. Contact Randi Bromberg Sr. Vice President, Communications and Marketing O) 609-890-3185 C) 609-955-1067 [email protected] SOURCE BioNJ WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In GET STARTED

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)-- SurModics, Inc. (Nasdaq: SRDX), a leading provider of medical device and in vitro diagnostic technologies to the healthcare industry, today reported financial results for its first quarter ended December 31, 2022, and updated its financial outlook for its fiscal year ending September 30, 2023. First Quarter Fiscal 2023 Financial Summary Total Revenue of $24.9 million, an increase of 8% year-over-year GAAP Diluted EPS of $(0.56), compared to $(0.20) in the prior-year period Non-GAAP Diluted EPS of $(0.50), compared to $(0.13) in the prior-year period First Quarter and Recent Business Highlights On October 13, 2022, Surmodics submitted a complete response to U.S. Food and Drug Administration (“FDA” or the “Agency”) comments on its application for premarket approval (“PMA”) of the SurVeil™ drug-coated balloon (“DCB”). On October 17, 2022, Surmodics announced that it has entered into a new, five-year credit agreement with MidCap Financial (“MidCap”), consisting of up to $100 million in term loans and a $25 million revolving credit facility. On November 2, 2022, Surmodics announced that 24-month data from its TRANSCEND clinical trial of the SurVeil DCB was presented at the Vascular InterVentional Advances (“VIVA”) conference, with the SurVeil DCB demonstrating sustained durability of the trial’s safety and efficacy endpoints. On November 17, 2022 and January 19, 2023, Surmodics announced that 12-month data from its SWING first-in-human study of the Company’s Sundance™ Sirolimus DCB was presented at the Symposium on Vascular and Endovascular Issues (“VEITHsymposium”) and the International Symposium on Endovascular Therapy (“ISET”), respectively, with primary efficacy data indicating that the large luminal gain achieved immediately after the procedure was sustained post procedure. On January 19, 2023, Surmodics announced it received a letter from the FDA related to its PMA application for the SurVeil DCB. In the letter, the FDA indicated that the application is not currently approvable, while providing guidance as to a path forward. “We were pleased to achieve total revenue growth that exceeded our expectations for the first quarter, driven by strong revenue performance within our Medical Device business which grew 12% year-over-year,” said Gary Maharaj, President and CEO of Surmodics, Inc. “On January 19th, we announced the receipt of an FDA letter related to our PMA application for the SurVeil DCB. We remain focused on making progress with respect to our regulatory strategy for the SurVeil DCB and are preparing to engage with the FDA to evaluate the appropriate path forward. In light of this development, we have implemented a spending reduction plan to preserve capital and more closely align our capital allocation priorities with our strategic objectives, which includes a restructuring to reduce our workforce by approximately 13% and additional cost saving measures. This spending reduction plan is expected to reduce our planned use of cash by an estimated $10 million to $11 million over the remainder of fiscal 2023, prior to restructuring charges.” Mr. Maharaj continued, “We are updating our guidance today to reflect our financial performance in the first quarter, as well as our revised expectations for the remaining nine months of fiscal 2023. Looking ahead, we remain focused on pursuing our three key strategic objectives for 2023 as efficiently as possible, with the goal of achieving strong, sustainable, long-term growth. Specifically, we will continue to make progress with respect to our regulatory strategy for the SurVeil DCB, while advancing the initial commercialization of our Sublime™ radial and Pounce™ arterial thrombectomy platforms and driving revenue and cash flow growth from our Medical Device performance coating offerings and In Vitro Diagnostics business. With a recently enhanced balance sheet and access to approximately $60 million in incremental debt financing, a disciplined approach to spending and capital allocation, strong and stable core businesses and a portfolio of innovative vascular intervention technologies, we believe we are well-positioned for the future as we progress through fiscal 2023.” First Quarter Fiscal 2023 Financial Results Three Months Ended December 31, Increase (Decrease) 2022 2021 $ % Revenue: Medical Device $ 19,018 $ 16,908 $ 2,110 12 % In Vitro Diagnostics 5,915 6,095 (180 ) (3 )% Total revenue $ 24,933 $ 23,003 $ 1,930 8 % Total revenue increased $1.9 million, or 8%, to $24.9 million, compared to $23.0 million in the first quarter of fiscal 2022. Medical Device revenue increased $2.1 million, or 12%, to $19.0 million, compared to $16.9 million in the first quarter of fiscal 2022, driven by growth in sales of performance coating reagent and device products, as well as higher performance coating royalties revenue. Medical Device revenue in the first quarter of fiscal 2023 included $1.3 million from the Company’s Development and Distribution Agreement with Abbott Vascular, Inc. (“Abbott”) for the SurVeil DCB, compared to $1.2 million in the prior-year period. In Vitro Diagnostics (“IVD”) revenue decreased $0.2 million, or 3%, to $5.9 million, compared to $6.1 million in the first quarter of fiscal 2022, as growth in product sales was offset by lower research and development and other revenue due to the completion of a customer development program. Product gross profit (defined as product sales less product costs) increased $1.1 million, or 14%, to $9.0 million, compared to $7.8 million in the first quarter of fiscal 2022. Product gross margin (defined as product gross profit as a percentage of product sales) was 63.0%, compared to 63.6% in the first quarter of fiscal 2022. Product gross margin in the first quarter of fiscal 2023 was adversely impacted relative to the prior year by certain manufacturing inefficiencies associated with ramp up of production of new products, which was partly offset by the favorable impact of product mix. Operating costs and expenses, excluding product costs, increased $5.0 million, or 23%, to $26.9 million, compared to $21.9 million in the first quarter of fiscal 2022. The increase was driven primarily by higher selling, general and administrative expenses associated with the expansion of the Company’s direct medical device salesforce in fiscal 2022. GAAP net loss was $(7.8) million, or $(0.56) per diluted share, compared to $(2.8) million, or $(0.20) per diluted share in the first quarter of fiscal 2022. Non-GAAP net loss was $(7.0) million, or $(0.50) per diluted share, compared to $(1.8) million, or $(0.13) per diluted share in the first quarter of fiscal 2022. Adjusted EBITDA loss was $(3.3) million, compared to Adjusted EBITDA of $0.6 million in the first quarter of fiscal 2022. Balance Sheet Summary On October 17, 2022, Surmodics entered into a new, five-year credit agreement with MidCap, comprised of up to $100.0 million in term loans and a $25.0 million revolving credit facility. The Company drew $25.0 million on the term loan and $5.0 million on the revolving credit facility at close. These proceeds were partially used to retire the Company’s existing $25.0 million revolving credit facility with Bridgewater Bank, of which $10.0 million was outstanding. As of December 31, 2022, Surmodics reported $26.4 million in cash, $5.0 million in outstanding borrowings on its $25.0 million revolving credit facility, and $25.0 million in outstanding borrowings on its term loan facility. Additional draws on the term loan facility may be made in $10.0 million minimum increments, up to a total of $75.0 million through December 31, 2024. A second tranche of up to $25.0 million on the term loan facility may be available through December 31, 2024 at MidCap’s option. Surmodics reported $10.8 million of cash used in operating activities and $1.0 million in capital expenditures in the first quarter of fiscal 2023. Fiscal Year 2023 Financial Guidance Surmodics now expects fiscal year 2023 total revenue to range from $102 million to $106 million, representing an increase of 2% to 6% compared to the prior year. The Company’s prior guidance called for fiscal year 2023 total revenue to range from $103 million to $107 million, representing an increase of 3% to 7% compared to the prior year. The Company now expects fiscal 2023 GAAP diluted loss per share to range from $(2.40) to $(2.00). The Company’s prior guidance called for fiscal 2023 GAAP diluted loss per share to range from $(2.80) to $(2.40). Non-GAAP diluted loss per share in fiscal 2023 is expected to range from $(2.09) to $(1.69). The Company’s prior guidance called for fiscal 2023 Non-GAAP diluted loss per share in fiscal 2023 to range from $(2.54) to $(2.14). As has been the Company’s practice with past guidance, revenue from regulatory-related milestones, such as upon receipt of PMA for the SurVeil DCB, is not included in guidance until after they are achieved. Conference Call Today at 4:00 p.m. CT (5:00 p.m. ET) Surmodics is hosting a live webcast at 4:00 p.m. CT (5:00 p.m. ET) today to discuss the first quarter fiscal 2023 financial results and accomplishments and host a question-and-answer session. To access the webcast, please go to “Events & Presentations” under the “Investors” section of the Company’s website at , and click on the webcast icon under “Upcoming Events.” To listen to the live teleconference, dial 877-407-8293 (international callers may dial 201-689-8349) and provide access ID: 13735326. An audio replay of the conference call will be available beginning at 8:00 p.m. CT on Monday, February 6, until 8:00 p.m. CT on Monday, February 20, and can be accessed by dialing 877-660-6853 (international callers may dial 201-612-7415) and entering access ID: 13735326. In addition, the webcast and transcript will be archived on the Company’s website following the call. About Surmodics, Inc. Surmodics, Inc. is a leading provider of performance coating technologies for intravascular medical devices and chemical and biological components for in vitro diagnostic immunoassay tests and microarrays. Surmodics also develops and commercializes highly differentiated vascular intervention medical devices that are designed to address unmet clinical needs and engineered to the most demanding requirements. This key growth strategy leverages the combination of the Company’s expertise in proprietary surface modification and drug-delivery coating technologies, along with its device design, development and manufacturing capabilities. The Company’s mission is to improve the detection and treatment of disease. Surmodics is headquartered in Eden Prairie, Minnesota. Safe Harbor for Forward-looking Statements This press release, and disclosures related to it, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements regarding: engaging with the FDA in order to evaluate the appropriate path forward for the PMA application for our SurVeil DCB, including requesting feedback through the FDA’s Q-submission process; anticipated timing of FDA feedback; obtaining additional clarity from the FDA on what is required for an amended PMA application to receive an approval decision; determining an appropriate path forward and making progress with respect to our regulatory strategy for the SurVeil DCB; providing additional details on our strategy as we obtain additional information from the FDA and determine our path forward for the SurVeil DCB; our future prospects; achieving strong, sustainable long-term growth; advancing the initial commercialization of our Sublime radial and Pounce arterial thrombectomy platforms; driving revenue and cash flow growth from our Medical Device performance coating offerings and In Vitro Diagnostics business; our fiscal 2023 financial guidance and related assumptions, including assumptions in our revenue guidance provided for modeling purposes, expected product gross margins for the remainder of fiscal 2023 and factors that we expect to impact product gross margins, expected operating expenses, expected severance costs, expected interest expense, expected tax benefit, expected cash use for fiscal 2023 and the assumptions behind our expected cash use; our expected cash balance at the end of fiscal 2023; our expectation regarding borrowings on our revolving credit facility and term loans; being well-positioned for the future and strong future growth; our intent to streamline and refocus the teams in several areas of our business, including manufacturing and operations, R&D and clinical, sales operations, and our direct salesforce, so that we can execute our growth strategy more efficiently in fiscal 2023; the expected reduction in planned cash use for the remainder of fiscal 2023 from our spending reduction plan, and the sources of the expected spending reduction; whether the spending reduction plan will impact our ability to serve our customers and our ability to respond to the FDA; reductions in our planned capital expenditures and changes in our hiring plan for fiscal 2023; the future focus of our product development efforts; our fiscal 2023 strategic objectives and their ability to achieve strong, sustainable growth and creating long-term shareholder value; the potential and timing of receipt of a PMA milestone payment from Abbott; continued engagement with the FDA and Abbott regarding the SurVeil DCB; the promise of our Sundance DCB; our plan to use the experience we gain from the SurVeil product PMA application process to develop our commercial and regulatory strategies for our other DCB products; our availability of debt capital, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including, without limitation: (1) our ability to successfully develop and commercialize our SurVeil DCB (including realization of the full potential benefits of our agreement with Abbott), Avess™ DCB, Sundance DCB, and other proprietary products; (2) whether and when the FDA grants PMA to the SurVeil DCB; (3) our reliance on third parties (including our customers and licensees) and their failure to successfully develop, obtain regulatory approval for, market, and sell products incorporating our technologies; (4) possible adverse market conditions and possible adverse impacts on our cash flows; (5) our ability to successfully and profitably commercialize our vascular intervention products; (6) current and future supply chain constraints; (7) whether our operating expenses are effective in generating profitable revenues; and (8) the factors identified under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 and subsequent SEC filings. These reports are available in the Investors section of our website at and at the SEC website at . Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events. Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Surmodics is reporting non-GAAP financial results including EBITDA and Adjusted EBITDA, non-GAAP operating loss, non-GAAP operating loss percentage, non-GAAP loss before income taxes, non-GAAP net loss, and non-GAAP loss per diluted share. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financial statements, provide meaningful insight into our operating performance excluding certain event-specific matters, and provide an alternative perspective of our results of operations. We use non-GAAP measures, including those set forth in this release, to assess our operating performance and to determine payouts under our executive compensation programs. We also are providing guidance on a range of non-GAAP loss per diluted share for fiscal 2023. We believe that presentation of certain non-GAAP measures allows investors to review our results of operations from the same perspective as management and our board of directors and facilitates comparisons of our current results of operations. The method we use to produce non-GAAP results is not in accordance with GAAP and may differ from the methods used by other companies. Non-GAAP results should not be regarded as a substitute for corresponding GAAP measures but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations in that they do not reflect certain items that may have a material impact on our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both our financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP results provided for the specific periods presented, which are attached to this release. Surmodics, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended December 31, 2022 2021 Revenue: Product sales $ 14,234 $ 12,344 Royalties and license fees 8,765 8,099 Research, development and other 1,934 2,560 Total revenue 24,933 23,003 Operating costs and expenses: Product costs 5,267 4,497 Research and development 12,743 11,663 Selling, general and administrative 13,239 9,195 Acquired intangible asset amortization 913 1,089 Total operating costs and expenses 32,162 26,444 Operating loss (7,229 ) (3,441 ) Other expense, net (779 ) (77 ) Loss before income taxes (8,008 ) (3,518 ) Income tax benefit 165 706 Net loss $ (7,843 ) $ (2,812 ) Basic net loss per share $ (0.56 ) $ (0.20 ) Diluted net loss per share $ (0.56 ) $ (0.20 ) Weighted average number of shares outstanding: Basic 13,983 13,878 Diluted 13,983 13,878 Surmodics, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) December 31, September 30, 2022 2022 Assets (Unaudited) (See Note) Current Assets: Cash and cash equivalents $ 26,430 $ 18,998 Accounts receivable, net 10,068 10,452 Contract assets — royalties and license fees 7,047 7,116 Inventories, net 12,724 11,819 Prepaids and other 8,193 9,202 Total Current Assets 64,462 57,587 Property and equipment, net 27,717 27,148 Intangible assets, net 29,262 28,145 Goodwill 43,308 40,710 Other assets 5,006 4,769 Total Assets $ 169,755 $ 158,359 Liabilities and Stockholders’ Equity Current Liabilities: Short-term borrowings $ — $ 10,000 Deferred revenue 3,771 4,160 Other current liabilities 13,493 17,919 Total Current Liabilities 17,264 32,079 Long-term debt, net 29,495 — Deferred revenue 4,115 5,088 Other long-term liabilities 11,620 12,800 Total Liabilities 62,494 49,967 Total Stockholders’ Equity 107,261 108,392 Total Liabilities and Stockholders’ Equity $ 169,755 $ 158,359 Note: Derived from audited financial statements as of the date indicated. Surmodics, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended December 31, 2022 2021 Operating Activities: Net loss $ (7,843 ) $ (2,812 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,122 2,376 Stock-based compensation 1,965 1,680 Deferred taxes (107 ) (640 ) Other 374 172 Change in operating assets and liabilities: Accounts receivable and contract assets 546 1,547 Inventories (905 ) (1,570 ) Prepaids and other (1,857 ) (1,432 ) Accounts payable (1,254 ) 200 Accrued liabilities (4,700 ) (5,227 ) Income taxes 2,218 (95 ) Deferred revenue (1,361 ) (1,225 ) Net cash used in operating activities (10,802 ) (7,026 ) Investing Activities: Purchases of property and equipment (977 ) (782 ) Maturities of available-for-sale securities — 4,000 Net cash (used in) provided by investing activities (977 ) 3,218 Financing Activities: Payments of short-term borrowings (10,000 ) — Proceeds from issuance of long-term debt 29,664 — Payments of debt issuance costs (353 ) — Issuance of common stock 347 230 Payments for taxes related to net share settlement of equity awards (858 ) (853 ) Net cash provided by (used in) financing activities 18,800 (623 ) Effect of exchange rate changes on cash 411 (72 ) Net change in cash and cash equivalents 7,432 (4,503 ) Cash and Cash Equivalents: Beginning of year 18,998 31,153 End of year $ 26,430 $ 26,650 Surmodics, Inc. and Subsidiaries Supplemental Segment Information (in thousands) (Unaudited) Three Months Ended December 31, 2022 2021 Medical Device Revenue Product sales $ 8,380 $ 6,788 Royalties 7,409 6,886 License fees 1,356 1,213 Research, development and other 1,873 2,021 Medical Device revenue 19,018 16,908 In Vitro Diagnostics Revenue Product sales 5,854 5,556 Research, development and other 61 539 In Vitro Diagnostics revenue 5,915 6,095 Total Revenue $ 24,933 $ 23,003 Three Months Ended December 31, 2022 2021 Operating (loss) income: Medical Device $ (7,235 ) $ (3,792 ) In Vitro Diagnostics 2,948 3,155 Total segment operating (loss) income (4,287 ) (637 ) Corporate (2,942 ) (2,804 ) Total operating (loss) income $ (7,229 ) $ (3,441 ) Surmodics, Inc. and Subsidiaries Reconciliation of GAAP Measures to Non-GAAP Amounts Schedule of EBITDA and Adjusted EBITDA (in thousands) (Unaudited) Three Months Ended December 31, 2022 2021 Net loss $ (7,843 ) $ (2,812 ) Income tax benefit (165 ) (706 ) Depreciation and amortization 2,122 2,376 Interest expense, net 826 136 Investment income, net (172 ) (26 ) EBITDA (5,232 ) (1,032 ) Adjustments: Stock-based compensation expense 1,965 1,680 Adjusted EBITDA $ (3,267 ) $ 648 Surmodics, Inc. and Subsidiaries Guidance Reconciliation: Estimated Non-GAAP Diluted EPS For the Fiscal Year Ending September 30, 2023 (Unaudited) Fiscal 2023 Full-Year Estimate Low High GAAP Diluted EPS $ (2.40 ) $ (2.00 ) Amortization of acquired intangibles per diluted share (1) 0.23 0.23 Restructuring expense (2) 0.08 0.08 Non-GAAP Diluted EPS $ (2.09 ) $ (1.69 ) Diluted weighted average shares outstanding 14,030 Surmodics, Inc. and Subsidiaries Net Loss and Diluted EPS GAAP to Non-GAAP Reconciliation (in thousands, except per share data) (Unaudited) Three Months Ended December 31, 2022 Revenue Operating Loss Loss Before Income Taxes Net Loss (3) Diluted EPS GAAP $ 24,933 $ (7,229 ) (29.0 )% $ (8,008 ) $ (7,843 ) $ (0.56 ) Adjustments: Amortization of acquired intangible assets (1) — 913 3.7 % 913 851 0.06 Non-GAAP $ 24,933 $ (6,316 ) (25.3 )% $ (7,095 ) $ (6,992 ) $ (0.50 ) Diluted weighted average shares outstanding (4) 13,983 Three Months Ended December 31, 2021 Revenue Operating Loss Loss Before Income Taxes Net Loss (3) Diluted EPS GAAP $ 23,003 $ (3,441 ) (15.0 )% $ (3,518 ) $ (2,812 ) $ (0.20 ) Adjustments: Amortization of acquired intangible assets (1) — 1,089 4.8 % 1,089 990 0.07 Non-GAAP $ 23,003 $ (2,352 ) (10.2 )% $ (2,429 ) $ (1,822 ) $ (0.13 ) Diluted weighted average shares outstanding (4) 13,878 (1) Represents amortization of business acquisition-related intangible assets and associated tax impact. A significant portion of the business acquisition-related amortization is not tax deductible. (2) Restructuring expense consists of costs specifically associated with the workforce reduction in the second quarter of fiscal 2023. Income tax impacts were estimated using the applicable statutory rate (21% in the U.S. and 12.5% in Ireland). (3) Net loss includes the effect of the above adjustments on income tax benefit, taking into account deferred taxes and non-deductible items. Income tax impacts were estimated using the applicable statutory rate (21% in the U.S. and 12.5% in Ireland). (4) Diluted weighted average shares outstanding used in the calculation of EPS was the same for GAAP EPS and Non-GAAP EPS. Potentially dilutive common shares resulting from dilutive common stock options and non-vested stock relating to restricted stock awards and restricted stock units have been excluded from the calculation of EPS as their effect was antidilutive for the three months ended December 31, 2022 and 2021 as a result of the net loss for these periods.

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)-- SurModics, Inc. (Nasdaq: SRDX), a leading provider of medical device and in vitro diagnostic technologies to the healthcare industry, today reported financial results for its fourth quarter and fiscal year ended September 30, 2022, and introduced its financial outlook for the fiscal year ending September 30, 2023. Fourth Quarter 2022 Financial Summary Total Revenue of $26.0 million, an increase of 8% year-over-year GAAP Diluted EPS of $(1.06), including $(0.73) deferred tax valuation reserve, compared to $(0.02) in the prior-year period Non-GAAP Diluted EPS of $(0.26), compared to $(0.10) in the prior-year period Fiscal Year 2022 Financial Summary Total Revenue of $100.0 million, a decrease of 5% year-over-year GAAP Diluted EPS of $(1.96), including $(0.73) deferred tax valuation reserve, compared to $0.30 in the prior-year period Non-GAAP Diluted EPS of $(0.95), compared to $0.37 in the prior-year period Business Highlights On October 11, 2022, Surmodics announced that six-month data from its SWING first-in-human study of the Company’s Sundance™ Sirolimus drug-coated balloon was presented at the Amputation Prevention Symposium (AMP) in Lugano, Switzerland, with Sundance demonstrating an excellent safety pro the lowest binary restenosis at six months, compared to relevant below-the-knee trials. On October 13, 2022, Surmodics submitted a complete response to FDA comments on its application for premarket approval of the SurVeil™ drug-coated balloon. On October 17, 2022, Surmodics announced that it has entered into a new, five-year credit agreement with MidCap Financial, consisting of up to $100 million in term loans and a $25 million revolving credit facility. On November 2, 2022, Surmodics announced that 24-month data from its TRANSCEND clinical trial of the Company’s SurVeil™ drug-coated balloon was presented at the Vascular InterVentional Advances (VIVA) annual conference in Las Vegas, Nevada, with SurVeil demonstrating sustained durability of safety and efficacy endpoints. “We are pleased to bring fiscal 2022 to a strong conclusion, delivering revenue performance that exceeded our expectations for the fourth quarter, while continuing to invest in our business and make progress on our strategic objectives,” said Gary Maharaj, President and CEO of Surmodics, Inc. “Our fourth quarter revenue performance was exclusively driven by Medical Device revenue, which increased 12% year-over-year, with stronger-than-anticipated product sales – including sales of our Pounce™ and Sublime™ products – and licensing fee revenue. From an operational standpoint, our regulatory team worked diligently to prepare a complete response to FDA comments on the PMA application for our SurVeil drug-coated balloon, which we are pleased to announce was submitted to the Agency on October 13th. We also made important progress with respect to the initial commercialization of our Pounce arterial thrombectomy and Sublime radial platforms, onboarding and training our recently hired territory managers, building our customer base, and generating early commercial traction.” Mr. Maharaj continued, “With an established direct sales team, recent progress with respect to our SurVeil, Pounce and Sublime products, and an enhanced balance sheet to support our operations and growth initiatives, we are excited about our future prospects as we enter fiscal 2023. Looking ahead, we aim to build upon the momentum gained this past year by remaining focused on driving continued execution with respect to our strategic objectives. In doing so, we will position Surmodics to achieve strong, sustainable, long-term growth and generate enhanced future value for our shareholders.” Fourth Quarter Fiscal 2022 Financial Results Three Months Ended September 30, Increase (Decrease) 2022 $ % Revenue: Medical Device $ 19,500 $ 17,395 $ 2,105 12 % In Vitro Diagnostics 6,488 6,576 (88 ) (1 )% Total revenue $ 25,988 $ 23,971 $ 2,017 8 % Total revenue increased $2.0 million, or 8%, to $26.0 million, compared to $24.0 million in the fourth quarter of fiscal 2021. Medical Device revenue increased $2.1 million, or 12%, to $19.5 million, compared to $17.4 million in the fourth quarter of fiscal 2021, driven by device product sales, as well as higher license fee revenue. Medical Device revenue in the fourth quarter of fiscal 2022 included $2.1 million from the Company’s Development and Distribution Agreement with Abbott Vascular, Inc. (“Abbott”) for the SurVeil drug-coated balloon (“DCB”), compared to $1.2 million in the prior-year period. In Vitro Diagnostics revenue decreased $0.1 million, or 1%, to $6.5 million, compared to $6.6 million in the fourth quarter of fiscal 2021, driven primarily by strong product sales offset by unfavorable order timing for distributed antigen products. Product gross profit (defined as product sales less product costs) increased $0.4 million, or 5%, to $8.8 million, compared to $8.4 million in the fourth quarter of fiscal 2021. Product gross margin (defined as product gross profit as a percentage of product sales) was 61.1%, compared to 66.8% in the fourth quarter of fiscal 2021. Product gross margin in the fourth quarter of fiscal 2021 included a $0.5 million benefit associated with the employee retention credit under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). Product gross margin in the fourth quarter of fiscal 2022 was adversely impacted relative to the prior year by a higher mix of recent product introductions, which have lower product gross margins due to low production volumes. Operating costs and expenses, excluding product costs, increased $6.7 million, or 33%, to $27.0 million, compared to $20.3 million in the fourth quarter of fiscal 2021. The increase was driven primarily by higher selling, general and administrative expenses associated with the expansion of the Company’s direct medical device salesforce. Operating costs and expenses in the fourth quarter of fiscal 2021 included a $3.1 million benefit associated with the employee retention credit under the CARES Act. GAAP net loss was $(14.7) million, or $(1.06) per diluted share, compared to $(0.3) million, or $(0.02) per diluted share in the fourth quarter of fiscal 2021. GAAP net loss in the quarter included a non-cash tax expense of $(10.2) million, or $(0.73) per diluted share, from a full valuation reserve against the Company’s U.S. deferred tax assets. The availability of the deferred tax assets to offset future U.S. tax liabilities was unaffected by the reserve. Non-GAAP net loss was $(3.7) million, or $(0.26) per diluted share, compared to $(1.3) million, or $(0.10) per diluted share in the fourth quarter of fiscal 2021. Adjusted EBITDA loss was $(2.5) million, compared to Adjusted EBITDA of $0.5 million in the fourth quarter of fiscal 2021. Fiscal Year 2022 Financial Results Fiscal Year Ended September 30, Increase (Decrease) 2022 2021 $ % Revenue: Medical Device $ 72,389 $ 78,253 $ (5,864 ) (7 )% In Vitro Diagnostics 27,562 26,883 679 3 % Total revenue $ 99,951 $ 105,136 $ (5,185 ) (5 )% Total revenue decreased $5.2 million, or 5%, to $100.0 million, compared to $105.1 million in fiscal 2021. Medical Device revenue decreased $5.9 million, or 7%, to $72.4 million, compared to $78.3 million in fiscal 2021, driven primarily by lower license fee revenue, partly offset by broad-based product sales growth. Medical Device license fee revenue in fiscal 2022 included $5.7 million from the Company’s Development and Distribution Agreement with Abbott for the SurVeil DCB, compared to $16.0 million in the prior year. In Vitro Diagnostics revenue increased $0.7 million, or 3%, to $27.6 million, compared to $26.9 million in fiscal 2021, driven by broad-based product sales growth. GAAP net loss was $(27.3) million, or $(1.96) per diluted share, compared to GAAP net income of $4.2 million, or $0.30 per diluted share in fiscal 2021. GAAP net loss in fiscal 2022 included a non-cash tax expense of $(10.2) million, or $(0.73) per diluted share, from a full valuation reserve against the Company’s U.S. deferred tax assets. Non-GAAP net loss was $(13.2) million, or $(0.95) per diluted share, compared to Non-GAAP net income of $5.2 million, or $0.37 per diluted share in fiscal 2021. Adjusted EBITDA loss was $(5.8) million, compared to Adjusted EBITDA of $17.9 million in fiscal 2021. Balance Sheet Summary As of September 30, 2022, Surmodics reported cash and investments totaling $19.0 million and $10 million in outstanding borrowings on its $25 million line of credit. Surmodics reported $2.5 million of cash used in operating activities and $0.6 million in capital expenditures in the fourth quarter of fiscal 2022. On October 17, 2022, Surmodics entered into a new, five-year credit agreement with MidCap Financial (“MidCap”), comprised of up to $100 million in term loans and a $25 million revolving credit facility. The Company drew $25 million on the term loan and $5 million on the revolving credit facility at close. These proceeds were partially used to retire the Company’s existing $25 million revolving credit facility with Bridgewater Bank, of which $10 million was outstanding. Upon closing, the Company’s cash balance increased by $19.5 million. Fiscal Year 2023 Financial Guidance Surmodics expects fiscal year 2023 total revenue to range from $103 million to $107 million, representing an increase of 3% to 7% compared to the prior year. The Company expects fiscal 2023 GAAP diluted loss per share to range from $(2.80) to $(2.40). Non-GAAP diluted loss per share in fiscal 2023 is expected to range from $(2.54) to $(2.14), which reflects continued investment to support the commercialization of the Company’s Pounce thrombectomy and Sublime radial access products. Surmodics has the potential to receive up to a $30 million milestone payment during fiscal 2023 pursuant to the Abbott Development and Distribution Agreement related to premarket approval (“PMA”) by the U.S. Food and Drug Administration (“FDA”) of the SurVeil DCB. The milestone payment is reduced to $27 million if PMA is received after December 31, 2022, but before June 30, 2023, and to $24 million if PMA is received on or after June 30, 2023. The Company does not expect to receive the PMA prior to January 1, 2023. The potential revenue during fiscal 2023 associated with the $30 million, $27 million or $24 million milestone payment would be approximately $27 million, $25 million or $22 million, respectively. As has been the Company’s practice with past guidance, revenue from regulatory-related milestones is not included in guidance until after they are achieved. Conference Call Today at 7:00 a.m. CT (8:00 a.m. ET) Surmodics is hosting a live webcast at 7:00 a.m. CT (8:00 a.m. ET) today to discuss the fourth quarter and fiscal 2022 financial results and accomplishments and host a question-and-answer session. To access the webcast, navigate to upcoming events under the ‘events and presentations’ tab within the investor relations portion of the Company’s website at . To listen to the live teleconference, dial 888-428-7458 (international callers may dial 862-298-0702) and provide access ID: 13733806. An audio replay of the conference call will be available beginning at 11:00 a.m. CT on Wednesday, November 9th until 11:00 a.m. CT on Wednesday, November 23rd and can be accessed by dialing 877-660-6853 (international callers may dial 201-612-7415) and entering access ID: 13733806. In addition, the webcast and transcript will be archived on the Company’s website following the call. About Surmodics, Inc. Surmodics is a leading provider of surface modification technologies for intravascular medical devices and chemical components for in vitro diagnostic immunoassay tests and microarrays. Surmodics is pursuing development and commercialization of highly differentiated medical devices that are designed to address unmet clinical needs and engineered to the most demanding requirements. This key growth strategy leverages the combination of the Company’s expertise in proprietary surface technologies, along with enhanced device design, development, and manufacturing capabilities. The Company mission remains to improve the detection and treatment of disease. Surmodics is headquartered in Eden Prairie, Minnesota. For more information, visit . The content of Surmodics’ website is not part of this press release or part of any filings that the Company makes with the Securities and Exchange Commission (“SEC”). Safe Harbor for Forward-looking Statements This press release, and disclosures related to it, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements regarding our future prospects; statements regarding position Surmodics to achieve strong, sustainable long-term growth and generate enhanced future value for our shareholders; our revenue, expense and loss expectations for fiscal 2023 and beyond, including our fiscal 2023 financial guidance and related assumptions; our fiscal 2023 strategic objectives; the potential for receiving FDA approval of the PMA for our SurVeil DCB and the potential timing of that approval; the potential receipt of a PMA milestone payment from Abbott and the amount of revenue that would be recognized in fiscal 2023 on such a milestone payment; expectations regarding Abbott’s commercialization plans, and the U.S. commercialization prospect, for the SurVeil DCB; expectation regarding the conduct, and anticipated benefits of, limited evaluations for the Pounce venous thrombectomy platform, as well as plans to complete process and manufacturing validation efforts to support broader commercialization efforts for the product; expectations regarding our Medical Device coating offerings and our IVD business continuing to generate meaningful operating income and support our growth initiatives in fiscal 2023; the ability of our credit facility with MidCap Financial to ensure we have the financial flexibility to support our long-term growth strategy, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including, without limitation: (1) our ability to successfully develop and commercialize our SurVeil DCB (including realization of the full potential benefits of our agreement with Abbott), Avess™ DCB, Sundance DCB, and other proprietary products; (2) whether and when the FDA grants PMA to the SurVeil DCB; (3) our reliance on third parties (including our customers and licensees) and their failure to successfully develop, obtain regulatory approval for, market, and sell products incorporating our technologies; (4) possible adverse market conditions and possible adverse impacts on our cash flows; (5) our ability to successfully and profitably commercialize the Pounce arterial thrombectomy system; (6) current and future supply chain constraints; (7) whether our increased operating expenses are effective in generating profitable revenues; and (8) the factors identified under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 and subsequent SEC filings. These reports are available in the Investors section of our website at and at the SEC website at . Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events. Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Surmodics is reporting non-GAAP financial results including EBITDA and Adjusted EBITDA, non-GAAP operating (loss) income, non-GAAP operating (loss) income percentage, non-GAAP (loss) income before income taxes, non-GAAP net (loss) income, and non-GAAP diluted (loss) earnings per diluted share. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financial statements, provide meaningful insight into our operating performance excluding certain event-specific matters, and provide an alternative perspective of our results of operations. We use non-GAAP measures, including those set forth in this release, to assess our operating performance and to determine payouts under our executive compensation programs. We also are providing guidance on a range of non-GAAP diluted loss per diluted share for fiscal 2023. We believe that presentation of certain non-GAAP measures allows investors to review our results of operations from the same perspective as management and our board of directors and facilitates comparisons of our current results of operations. The method we use to produce non-GAAP results is not in accordance with GAAP and may differ from the methods used by other companies. Non-GAAP results should not be regarded as a substitute for corresponding GAAP measures but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations in that they do not reflect certain items that may have a material impact on our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both our financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP results provided for the specific periods presented, which are attached to this release. Surmodics, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended September 30, Fiscal Year Ended September 30, 2022 2021 2022 2021 Revenue: Product sales $ 14,394 $ 12,509 $ 54,621 $ 46,478 Royalties and license fees 9,510 8,874 36,248 47,056 Research, development and other 2,084 2,588 9,082 11,602 Total revenue 25,988 23,971 99,951 105,136 Operating costs and expenses: Product costs 5,597 4,159 20,342 17,177 Research and development 12,259 10,731 50,609 46,734 Selling, general and administrative 13,779 7,865 46,947 30,680 Acquired intangible asset amortization 966 1,117 4,150 2,793 Acquisition transaction, integration and other costs — 588 — 1,049 Total operating costs and expenses 32,601 24,460 122,048 98,433 Operating (loss) income (6,613 ) (489 ) (22,097 ) 6,703 Other expense, net (179 ) (73 ) (396 ) (357 ) (Loss) income before income taxes (6,792 ) (562 ) (22,493 ) 6,346 Income tax (expense) benefit (7,936 ) 273 (4,781 ) (2,109 ) Net (loss) income $ (14,728 ) $ (289 ) $ (27,274 ) $ 4,237 Basic (loss) income per share $ (1.06 ) $ (0.02 ) $ (1.96 ) $ 0.31 Diluted (loss) income per share $ (1.06 ) $ (0.02 ) $ (1.96 ) $ 0.30 Weighted average number of shares outstanding: Basic 13,944 13,851 13,916 13,765 Diluted 13,944 13,851 13,916 13,989 Surmodics, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (Unaudited) September 30, 2022 2021 Assets Current Assets: Cash and cash equivalents $ 18,998 $ 31,153 Available-for-sale securities — 7,717 Accounts receivable, net 10,452 9,169 Contract assets — royalties and license fees 7,116 7,091 Inventories, net 11,819 6,760 Prepaids and other 9,202 8,365 Total Current Assets 57,587 70,255 Property and equipment, net 27,148 30,090 Available-for-sale securities — 2,002 Deferred income taxes — 5,867 Intangible assets, net 28,145 37,054 Goodwill 40,710 45,606 Other assets 4,769 3,718 Total Assets $ 158,359 $ 194,592 Liabilities and Stockholders’ Equity Current Liabilities: Short-term borrowings 10,000 10,000 Deferred revenue 4,160 4,647 Other current liabilities 17,919 15,168 Total Current Liabilities 32,079 29,815 Deferred revenue 5,088 10,301 Other long-term liabilities 12,800 14,391 Total Liabilities 49,967 54,507 Total Stockholders’ Equity 108,392 140,085 Total Liabilities and Stockholders’ Equity $ 158,359 $ 194,592 Surmodics, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Fiscal Year Ended September 30, 2022 2021 Operating Activities: Net (loss) income $ (27,274 ) $ 4,237 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation and amortization 9,142 8,017 Stock-based compensation 7,057 5,863 Deferred taxes 5,268 1,651 Other 860 478 Change in operating assets and liabilities: Accounts receivable and contract assets (1,522 ) (2,480 ) Inventories (5,060 ) (818 ) Prepaids and other (665 ) (2,391 ) Accounts payable 1,608 264 Accrued liabilities 132 1,406 Income taxes (1,069 ) 210 Deferred revenue (5,700 ) (1,048 ) Net cash (used in) provided by operating activities (17,223 ) 15,389 Investing Activities: Purchases of property and equipment (3,370 ) (5,279 ) Payment for acquisition of intangible assets — (1,000 ) Purchases of available-for-sale securities — (22,723 ) Sales and maturities of available-for-sale securities 9,600 43,317 Purchase of business, net of acquired cash — (39,553 ) Net cash provided by (used in) investing activities 6,230 (25,238 ) Financing Activities: Proceeds from short-term borrowings — 10,000 Issuance of common stock 1,246 3,128 Payments for taxes related to net share settlement of equity awards (1,121 ) (2,751 ) Payments for acquisition of in-process research and development (500 ) (150 ) Net cash (used in) provided by financing activities (375 ) 10,227 Effect of exchange rate changes on cash (787 ) (10 ) Net change in cash and cash equivalents (12,155 ) 368 Cash and Cash Equivalents: Beginning of year 31,153 30,785 End of year $ 18,998 $ 31,153 Surmodics, Inc. and Subsidiaries Supplemental Segment Information (in thousands) (Unaudited) Three Months Ended September 30, Fiscal Year Ended September 30, 2022 2021 2022 2021 Medical Device Revenue Product sales $ 7,960 $ 6,313 $ 27,930 $ 21,777 Royalties 7,252 7,646 30,267 30,781 License fees 2,258 1,228 5,981 16,275 Research, development and other 2,030 2,208 8,211 9,420 Medical Device revenue 19,500 17,395 72,389 78,253 In Vitro Diagnostics Revenue Product sales 6,434 6,196 26,691 24,701 Research, development and other 54 380 871 2,182 In Vitro Diagnostics revenue 6,488 6,576 27,562 26,883 Total Revenue $ 25,988 $ 23,971 $ 99,951 $ 105,136 Three Months Ended September 30, Fiscal Year Ended September 30, 2022 2021 2022 2021 Operating (Loss) Income: Medical Device $ (6,211 ) $ (797 ) $ (22,923 ) $ 4,683 In Vitro Diagnostics 2,811 3,363 13,073 13,770 Total segment operating (loss) income (3,400 ) 2,566 (9,850 ) 18,453 Corporate (3,213 ) (3,055 ) (12,247 ) (11,750 ) Total (Loss) Income from Operations $ (6,613 ) $ (489 ) $ (22,097 ) $ 6,703 Surmodics, Inc. and Subsidiaries Reconciliation of GAAP Measures to Non-GAAP Amounts Schedule of EBITDA and Adjusted EBITDA (in thousands) (Unaudited) Three Months Ended September 30, Fiscal Year Ended September 30, 2022 2021 2022 2021 Net (Loss) Income $ (14,728 ) $ (289 ) $ (27,274 ) $ 4,237 Income tax expense (benefit) 7,936 (273 ) 4,781 2,109 Depreciation and amortization 2,240 2,407 9,142 8,017 Investment income, net (26 ) (28 ) (99 ) (123 ) Interest expense 188 132 598 310 EBITDA (4,390 ) 1,949 (12,852 ) 14,550 Adjustments: Stock-based compensation expense 1,859 1,545 7,057 5,863 Acquisition transaction, integration and other costs (1) — 588 — 1,049 CARES Act Employee Retention Credit (2) — (3,577 ) — (3,577 ) Adjusted EBITDA $ (2,531 ) $ 505 $ (5,795 ) $ 17,885 Surmodics, Inc. and Subsidiaries Guidance Reconciliation: Estimated Non-GAAP Diluted EPS For the Fiscal Year Ending September 30, 2023 (Unaudited) Fiscal 2023 Full-Year Estimate Low High GAAP Diluted EPS $ (2.80 ) $ (2.40 ) Amortization of acquired intangibles per diluted share (3) 0.26 0.26 Non-GAAP Diluted EPS $ (2.54 ) $ (2.14 ) Diluted weighted average shares outstanding 14,030 Surmodics, Inc. and Subsidiaries Net (Loss) Income and Diluted EPS GAAP to Non-GAAP Reconciliation (in thousands, except per share data) (Unaudited) For the Three Months Ended September 30, 2022 Revenue Operating Loss Loss Before Income Taxes Net Loss (5) Diluted EPS GAAP $ 25,988 $ (6,613 ) (25.4 )% $ (6,792 ) $ (14,728 ) $ (1.06 ) Adjustments: Amortization of acquired intangible assets (3) — 966 3.7 % 966 906 0.07 Tax expense from full valuation allowance against U.S. deferred tax assets (4) — — — — 10,151 0.73 Non-GAAP $ 25,988 $ (5,647 ) (21.7 )% $ (5,826 ) $ (3,671 ) $ (0.26 ) Diluted weighted average shares outstanding (6) 13,944 For the Three Months Ended September 30, 2021 Revenue Operating Loss Loss Before Income Taxes Net Loss (5) Diluted EPS GAAP $ 23,971 $ (489 ) (2.0 )% $ (562 ) $ (289 ) $ (0.02 ) Adjustments: Amortization of acquired intangible assets (3) — 1,117 4.7 % 1,117 1,014 0.07 Acquisition transaction, integration and other costs (1) — 588 2.4 % 588 554 0.04 CARES Act Employee Retention Credit (2) — (3,577 ) (14.9 )% (3,577 ) (2,617 ) (0.19 ) Non-GAAP $ 23,971 $ (2,361 ) (9.8 )% $ (2,434 ) $ (1,338 ) $ (0.10 ) Diluted weighted average shares outstanding (6) 13,851 Surmodics, Inc. and Subsidiaries Net (Loss) Income and Diluted EPS GAAP to Non-GAAP Reconciliation (Continued) (in thousands, except per share data) (Unaudited) Fiscal Year Ended September 30, 2022 Revenue Operating Loss Loss Before Income Taxes Net Loss (5) Diluted EPS GAAP $ 99,951 $ (22,097 ) (22.1 )% $ (22,493 ) $ (27,274 ) $ (1.96 ) Adjustments: Amortization of acquired intangible assets (3) — 4,150 4.1 % 4,150 3,888 0.28 Tax expense from full valuation allowance against U.S. deferred tax assets (4) — — — — 10,151 0.73 Non-GAAP $ 99,951 $ (17,947 ) (18.0 )% $ (18,343 ) $ (13,235 ) $ (0.95 ) Diluted weighted average shares outstanding (6) 13,916 Fiscal Year Ended September 30, 2021 Revenue Operating Income Income Before Income Taxes Net Income (5) Diluted EPS GAAP $ 105,136 $ 6,703 6.4 % $ 6,346 $ 4,237 $ 0.30 Adjustments: Amortization of acquired intangible assets (3) — 2,793 2.7 % 2,793 2,600 0.19 Acquisition transaction, integration and other costs (1) — 1,049 1.0 % 1,049 1,015 0.07 CARES Act Employee Retention Credit (2) — (3,577 ) (3.5 )% (3,577 ) (2,617 ) (0.19 ) Non-GAAP $ 105,136 $ 6,968 6.6 % $ 6,611 $ 5,235 $ 0.37 Diluted weighted average shares outstanding (6) 13,989 (1) Represents expenses specifically associated with the fiscal 2021 business acquisition of Vetex Medical Limited and associated tax impact. A significant proportion of the acquisition expenses were not tax deductible. (2) Represents the benefit recorded as a result of the employee retention credit that the Company filed for under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted in March 2020. The estimated tax impact reflected the combined impact of the statutory tax rate of 21% and a reduction in research and development tax credits. (3) Represents amortization of business acquisition-related intangible assets and associated tax impact. A significant portion of the business acquisition-related amortization is not tax deductible. (4) Represents the non-cash charge to income tax expense that resulted from the establishment of a full valuation allowance against U.S. net deferred tax assets in the fourth quarter of fiscal 2022. A valuation allowance is required to be recognized against deferred tax assets if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50%) that all or a portion of such assets will not be realized. The relevant guidance weighs available evidence such as historical cumulative taxable losses more heavily than future profitability. The valuation allowance has no impact on the availability of U.S. net deferred tax assets to offset future tax liabilities. (5) Net (loss) income includes the effect of the above adjustments on the income tax (expense) benefit, taking into account deferred taxes and non-deductible items. Income tax impacts were estimated using the applicable statutory rate (21% in the U.S. and 12.5% in Ireland). (6) Diluted weighted average shares outstanding used in the calculation of EPS was the same for GAAP EPS and Non-GAAP EPS. Potentially dilutive common shares resulting from dilutive common stock options and non-vested stock relating to restricted stock awards and restricted stock units have been excluded from the calculation of EPS as their effect was antidilutive for the three months ended September 30, 2022 and 2021 and for the fiscal year ended September 30, 2022 as a result of the net loss for these periods.