In the course of making our assessment of the effectiveness of internal control over financial reporting as of December 31, 2022, we identified several material weaknesses. Material weaknesses were identified in relation to (i) inappropriately designed entity-level controls impacting the control environment, risk assessment, and monitoring activities to prevent or detect material misstatements to the consolidated financial statements attributed to an insufficient number of qualified resources and inadequate ...

Source: Alliance for Regenerative Medicine 1H 2022 Report Active Trials by Therapy 2022 H1 Phase 1 Phase 2 ● Phase 3 Cell therapies: 46% Gene therapies: 18% 15 Accelerator of CAR-T clinical adoption To meet the current and anticipated demand in regulatory reviews and audits, the FDA is hiring 132 new staff in FY 2023 and an additional 96 in FY 2024-27 Biopreservation Challenges Customer Reimbursement Environment 18 BioLife Solutions Analysts and Investors Day March 23,2023 Cell Processing Storage and Servic ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $44.3 million, representing a 19% increase and an 18% organic growth compared to Q4 2021, driven by a 35% increase in biopreservation media revenue [14][36] - Adjusted gross margin for Q4 2022 was 32%, up from 17% in Q4 2021, while for the full year 2022, it was 33% compared to 32% in 2021 [16][36] - GAAP operating expenses for Q4 2022 were $93.5 million, including a $40.5 million intangible impairment related to the Global Cooling acquisition, compared to $54.9 million in Q4 2021 [17][38] - Adjusted operating loss for Q4 2022 was $8.2 million, an improvement from a loss of $13.1 million in Q4 2021 [20] Business Line Data and Key Metrics Changes - Cell Processing platform revenue was $20.2 million, with total revenue increasing by 36% and organic revenue increasing by 35% over the same period in 2021 [15] - Freezers and Thaw Systems platform revenue was $17.4 million, with total and organic revenue up 5% over the same period in 2021 [15] - Storage and Storage Services platform revenue was $6.7 million, with both total and organic growth of 14% over the same period in 2021 [35] Market Data and Key Metrics Changes - The company sold and shipped products to 217 new unique customer sites across its three product and service platforms in Q4 2022 [27] - COVID-19-related revenue accounted for approximately 5% of total revenue in Q4 2022, down from 15% in Q4 2021 [14][35] - For the full year 2022, total revenue was $161.8 million, a 36% increase and an organic revenue increase of 38% over 2021 [36] Company Strategy and Development Direction - The company aims to increase recurring high-margin revenue to 70% or more by the end of 2025, currently at about 60% [6][40] - The focus remains on gaining new CGT and biopharma customers, driving adoption of cell processing and storage services platforms, and improving supply chain and quality in the freezers platform [5][8] - The company expects to continue to derive adoption of its solutions in the CGT space, with its cell processing offerings embedded in up to 10 additional candidates that could get approved this year and next [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2024 exit run rate aspirational financial goals of $250 million in revenue, 50 points of adjusted gross margin, and 30 points of adjusted EBITDA margin [57] - The management noted that demand for their portfolio of bioproduction tools and services remains strong, emphasizing that they are still in the early stages of CGT approvals [56] - Management acknowledged supply chain constraints but indicated that they do not expect these to significantly impact their revenue outlook for 2023 [71] Other Important Information - The company will be filing for an automatic extension with the SEC for their 10-K filing due to turnover at the corporate controller position [41] - The cash and marketable securities balance at December 31, 2022, was $64.1 million, compared to $61.7 million at September 30, 2022 [39] Q&A Session Summary Question: Can you help us bridge to the 50% gross margin by Q4 2024? - Management indicated that the bridge to margin aspirational goals is based on optimizing the supply chain, reducing waste, and improving productivity in the plant [46][47] Question: How does the opportunity for allogeneic therapy compare to autologous therapies? - Management believes there will be a significant shift to predominant allogeneic therapies as more biology is understood, which will be a meaningful catalyst for growth [49][50] Question: How much did supply chain constraints affect Q4 performance? - Management acknowledged that there were some supply chain constraints but did not expect them to significantly impact the revenue outlook for 2023 [71] Question: What are the steps being taken to increase higher margin recurring revenue streams? - Management highlighted that the growth will be driven by existing customers and new products and services related to accessories and other non-instrument product lines [87]

BioLife Solutions, Inc. (NASDAQ:BLFS) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants Troy Wichterman - Chief Financial Officer Mike Rice - Chairman & Chief Executive Officer Rod de Greef - President & Chief Operating Officer Conference Call Participants Paul Knight - KeyBanc Thomas Flaten - Lake Street Jacob Johnson - Stephens Stephanie Iannetta - Cowen and Company Yuan Zhi - B. Riley Securities Suraj Kalia - Oppenheimer Operator Good afternoon, ladies and gentlemen and th ...

Table of Contents Title of each class Trading symbol Name of exchange on which registered BioLife Solutions, Inc. Common Stock BLFS NASDAQ Capital Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission Fi ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $40.5 million, representing a 30% increase from Q2 2021, with organic revenue growth of 44% and Biopreservation media revenue growth of 46% [7][14] - Adjusted gross margin for Q2 2022 was 36%, down from 43% in Q2 2021, but improved from 33% in Q1 2022 [15] - GAAP operating expenses for Q2 2022 were $116.8 million, significantly higher than $35.8 million in Q2 2021, primarily due to a non-cash intangible impairment of $69.9 million related to the Global Cooling acquisition [15][16] - Adjusted EBITDA for Q2 2022 was positive $1.5 million, compared to positive $3.7 million in Q2 2021 [17] Business Line Data and Key Metrics Changes - Biopreservation media revenue was $14.1 million, up 46% from Q2 2021, with significant customer confirmations for clinical trials [14][10] - Cell processing platform revenue was $15.4 million, up 58% over the same period in 2021 [14] - Freezers and thaw systems platform revenue was $18.7 million, up 6% over the same period in 2021 [14] - Storage and cold chain services platform revenue was $6.5 million, representing a total and organic growth of 65% over the same period in 2021 [14] Market Data and Key Metrics Changes - COVID-19 related revenue accounted for approximately 9% of total revenue in Q2 2022 [14] - The storage and cold chain services platform saw a 100% increase in shipments compared to the same quarter last year, with expectations to exceed 8,000 shipments for the full year [13] Company Strategy and Development Direction - The company is focused on increasing capacity for Biopreservation media products and has plans to establish a new production suite in Indianapolis by mid-2023 [24] - The company aims to achieve aspirational financial goals of $250 million in revenue, 50% adjusted gross margin, and 30% adjusted EBITDA by Q4 2024 [20] - The company is tightening its full-year 2022 revenue guidance to a range of $160 million to $166 million, reflecting year-over-year growth of 34% to 39% [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of operations and the potential of the Sterling technology, despite recent non-cash accounting adjustments [9][20] - The management highlighted strong demand for their portfolio of bioproduction tools and services, expecting to meet or exceed revenue guidance for the year [26] Other Important Information - The company has shipped products to 202 new unique customer sites across its three product and service platforms in Q2 [9] - The company is experiencing strong growth in the cell and gene therapy space, with products embedded in numerous clinical applications [11] Q&A Session Summary Question: Can you provide more color on the guidance and the freezer business? - Management acknowledged that some customers have had to buy from competitors due to sales headwinds but expects a return to normal flow post-field updates [28] Question: Will gross margin improvements continue? - Management indicated that gross margin improvements are expected to moderate moving into Q3 and Q4 [29] Question: What is the status of the stock for cash compensation program? - Management has not publicly commented on whether the program will be extended [31] Question: How should we think about the timeline to get back to 30% margins for Stirling? - Management expects continued improvement in gross margins but did not provide a specific timeline for reaching 30% [34] Question: What are the cross-selling opportunities within the portfolio? - Management highlighted successful cross-selling between Biopreservation media and Sexton self-processing products [35] Question: What is driving non-COVID growth in storage and cold chain? - Management noted that biopharma companies are increasingly outsourcing storage needs to mitigate risks [38] Question: How comfortable is the company with its cash balance? - Management stated that they do not foresee the need to raise cash with current operations [44] Question: Was there a change in the long-term ULT revenue outlook? - Management confirmed a slight lowering of long-term ULT revenue outlook but remains confident in Biopreservation media growth [48] Question: Can you break down the growth in Biopreservation media? - Management indicated that growth is primarily driven by volume rather than price increases [56] Question: What is the growth potential for the evo platform? - Management expressed optimism about the evo platform's adoption and its differentiated offering in the market [57]

Business Operations - The company operates in the life sciences sector, focusing on bioproduction tools and services for the cell and gene therapy industry, aiming to improve quality and reduce risks in biologic manufacturing [170]. - The current product portfolio includes three revenue lines: cell processing, freezers and thaw systems, and storage services, with seven main offerings [171]. - Proprietary biopreservation media products, HypoThermosol® FRS and CryoStor®, are used in over 550 customer clinical applications, significantly extending shelf-life and improving post-thaw viability [175][179]. - Recent acquisitions include Sexton Biotechnologies, Global Cooling, and SciSafe, enhancing the company's capabilities in bioproduction tools and cold chain logistics [182][183][192]. - The evo® cloud-connected shipping containers allow real-time tracking of biologic products, improving logistics efficiency and customer monitoring capabilities [194]. - The company operates six storage facilities in the USA and one in the Netherlands, providing comprehensive storage solutions for biological and pharmaceutical materials [193]. - The automated thawing products from Astero Bio Corporation help reduce cell structure damage during thawing, enhancing the preservation process [188]. - The company utilizes partnerships with established couriers to scale sales and marketing efforts, reducing the need for specialized facilities globally [195]. Financial Performance - Total revenue for the three months ended June 30, 2022, was $40.5 million, representing a 30% increase compared to $31.2 million in the same period in 2021 [198]. - Product revenue for the three months ended June 30, 2022, was $34.2 million, an increase of $6.7 million or 24% compared to the same period in 2021 [200]. - Service revenue increased to $3.7 million for the three months ended June 30, 2022, reflecting an 88% increase compared to $1.96 million in the same period in 2021 [204]. - Rental revenue for the three months ended June 30, 2022, was $2.7 million, a 50% increase compared to $1.8 million in the same period in 2021 [205]. - Total operating expenses for the three months ended June 30, 2022, were $160.6 million, a 200% increase from $53.6 million in the same period in 2021 [208]. - General and administrative expenses increased by $4.2 million or 59% for the three months ended June 30, 2022, compared to the same period in 2021 [212]. - Sales and marketing expenses rose by $2.3 million or 72% for the three months ended June 30, 2022, compared to the same period in 2021 [215]. - Research and development expenses increased by $383,000 or 13% for the three months ended June 30, 2022, compared to the same period in 2021 [218]. - Intangible asset impairment charges were $69.9 million for the three months ended June 30, 2022, reflecting a significant non-cash write-down [220]. - Total other income, net for the six months ended June 30, 2022 was $(63,000), compared to $(259,000) for the same period in 2021, representing a 76% improvement [224]. Cash Flow and Capital Management - Net cash used by operating activities was $17.8 million for the six months ended June 30, 2022, an increase of $11.9 million compared to $5.9 million for the same period in 2021 [230]. - Net cash used in investing activities totaled $27.3 million for the six months ended June 30, 2022, compared to $8.6 million for the same period in 2021, reflecting significant investments in marketable securities [231]. - The company had $47.0 million in cash and cash equivalents as of June 30, 2022, down from $69.9 million at the end of 2021 [228]. - The net decrease in cash and cash equivalents was $45.7 million for the six months ended June 30, 2022, compared to a decrease of $14.2 million for the same period in 2021 [229]. - The company may seek additional capital through debt or equity financing to pursue acquisition or strategic investment opportunities [228]. Risk Management and Internal Controls - The company emphasizes the importance of critical accounting policies in portraying financial condition and results, requiring subjective judgments and estimates [196]. - The company plans to enhance its internal controls by hiring additional qualified personnel and implementing technology solutions to improve oversight and reduce risks of errors and fraud [241]. - As of June 30, 2022, the company did not have any off-balance sheet arrangements [233]. - There were no material changes to the risk factors described in the Annual Report on Form 10-K for the period ended December 31, 2021 [246]. - Interest expense, net increased due to debt acquired from the acquisition of Global Cooling and equipment financing [226].

Business Overview - The company develops bioproduction tools and services for the cell and gene therapy industry, focusing on improving quality and reducing risks in biologic manufacturing [158]. - The proprietary biopreservation media products, HypoThermosol® FRS and CryoStor®, have been incorporated in over 530 customer clinical applications, significantly extending shelf-life and improving post-thaw viability [163][167]. - Annual revenue from each customer application using the company's products could range from $500,000 to $2.0 million if approved for large-scale commercial manufacturing [169]. - The company acquired Sexton Biotechnologies in September 2021, enhancing its portfolio with human platelet lysate media and automated cell-processing machines [170]. - In May 2021, the company acquired Global Cooling, which manufactures ultra-low temperature freezers that are energy efficient, using as little as 2.8 kWh/day at -80°C [171]. - The company operates six storage facilities in the USA and one in the Netherlands, providing biological and pharmaceutical storage services [179]. - The evo® cloud-connected shipping containers allow real-time tracking of biologic products, enhancing cold chain management for cell and gene therapies [180]. - The company utilizes partnerships with established couriers to scale sales and marketing efforts, reducing the need for specialized facilities globally [181]. - The company continues to capitalize on opportunities for organic growth and acquisitions to maximize the value of its product platform [161]. Financial Performance - Total revenue for the three months ended March 31, 2022, was $36.2 million, an increase of $19.4 million, or 115%, compared to $16.8 million in the same period in 2021 [184]. - Product revenue was $30.4 million for the three months ended March 31, 2022, representing an increase of $16.6 million, or 121%, compared to the same period in 2021 [185]. - Revenue from freezer and thaw products increased by $10.5 million, or 216%, while organic revenue decreased by 3% due to supply chain disruptions [186]. - Revenue from cell processing products increased by $6.0 million, or 67%, with organic growth of 53% driven by customer adoption in the CGT market [187]. - Service revenue was $3.1 million, an increase of $886,000, or 40%, compared to the same period in 2021, primarily due to the Netherlands biorepository storage expansion [189]. - Rental revenue reached $2.7 million, an increase of $1.9 million, or 216%, attributed to increased rental volumes and leasing of dedicated storage spaces [190]. - Cost of revenue increased by $16.9 million, or 224%, primarily due to acquisitions and higher warranty expenses [191]. - Research and development expenses increased by $1.8 million, or 90%, reflecting the impact of acquisitions and ongoing product development efforts [196]. - General and administrative expenses rose by $6.4 million, or 132%, due to increased headcount and costs associated with acquisitions [200]. - Net cash used by operating activities was $7.9 million for the three months ended March 31, 2022, compared to net cash provided of $1.8 million in the same period in 2021 [213]. Internal Controls and Management - Management has fully remediated the material weakness related to information system logical access as of March 31, 2022 [223]. - The company plans to hire additional individuals with appropriate skills in technical accounting and internal control over financial reporting [224]. - Enhancements to reconciliations and management review controls will be implemented, including technology solutions for better visibility and enforcement [224]. - The company aims to develop processes to enhance the precision of management review of financial statement information [224]. - There are no material changes to the risk factors described in the Annual Report on Form 10-K for the period ended December 31, 2021 [229]. - Management continues to evaluate and test the remediation plan and may identify additional measures to address material weaknesses [225]. - The company does not currently anticipate any legal proceedings that would materially affect its business or financial condition [227]. - The internal control system provides reasonable assurance but cannot prevent all errors and fraud [222]. - The company has removed administrator access rights from accounting personnel as part of its remediation efforts [223]. - Management will continue to take necessary steps to reinforce the overall design and capability of the control environment [225]. Product Development and Quality - The company emphasizes the importance of maintaining appropriate low temperature ionic balances in its biopreservation media to minimize cell damage [165].

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $36.2 million, up 115% from Q1 2021, with organic growth of 45% and biopreservation media revenue growth of 53% [10][34] - Adjusted gross margin for Q1 2022 was 33%, compared to 55% in Q1 2021 and 18% in Q4 2021, with expectations for sequential improvements throughout the year [38] - Adjusted operating loss for Q1 2022 was $8 million, compared to adjusted operating income of $494,000 in Q1 2021 [40] - Cash balance at March 31, 2022, was $59.5 million, down from $69.9 million at December 31, 2021 [41] Business Line Data and Key Metrics Changes - Cell processing platform revenue was $14.9 million, up 67% over Q1 2021, with organic growth of 53% [35] - Freezers and thaw systems platform revenue was $15.3 million, up 216% over Q1 2021, with COVID-19-related revenue accounting for approximately 4% [35] - Storage and storage services platform revenue was $6 million, up 95% over Q1 2021, with COVID-19-related revenue accounting for approximately 52% [37] Market Data and Key Metrics Changes - The company gained at least 189 new customers across its three product and service platforms in Q1 [15] - Biopreservation media products have been incorporated in over 540 customer clinical applications, up from 450 at the end of 2020 [20] - The evo cold chain management platform saw a 60% increase in shipments year-over-year [29] Company Strategy and Development Direction - The company is focused on optimizing and scaling operations to meet anticipated demand for its tools and services, particularly in the cell and gene therapy space [11] - Management affirms full year 2022 revenue guidance in the range of $159.5 million to $171 million, reflecting year-over-year growth of 34% to 44% [42] - A new co-marketing agreement with the Coriell Institute for Medical Research aims to enhance service offerings and customer reach [27] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong execution from operations and engineering teams, with expectations for continued sequential improvements in gross margin and adjusted EBITDA throughout the year [14][58] - The company anticipates that the cell and gene therapy market will experience explosive growth over the next few years, positioning its portfolio as critical in reducing risk [11][60] Other Important Information - The company is implementing dual sourcing for components to mitigate supply chain risks [53] - A pilot program for a revenue-generating service offering has been initiated, generating approximately $79,000 in revenue in Q1 [55] - The company plans to hold a Global Innovation Summit to explore innovations in CGT manufacturing, storage, and distribution workflows [31] Q&A Session Summary Question: Confidence in stock for cash compensation - Management expressed confidence in the business and the decision to accept stock instead of cash compensation, indicating a belief in the company's growth potential despite current market conditions [65][91] Question: Details on the co-promotion agreement with Coriell - The agreement allows for cross-marketing and revenue sharing, with a focus on customers needing storage and cell analytics services [66][68] Question: Impact of operational issues on Stirling freezers sales - Management indicated that while there are operational challenges, they have not seen significant order cancellations and are confident in retaining most orders [74][75] Question: Growth in evo shipments - Most evo shipments are related to approved CAR T-cell therapies and early-stage clinical trials, indicating strong traction in the market [76][78] Question: Market share growth in biopreservation media - Management believes they are taking market share from home brew solutions, with increased awareness and adoption of their products in clinical settings [81][84] Question: Utilization of new facilities - New facilities are being utilized by both existing and new customers, indicating a positive trend in business growth [86]

Acquisitions - The company completed the acquisition of Sexton Biotechnologies, Inc. on September 1, 2021, issuing 530,502 shares of common stock as consideration, with a non-cash gain of $6.5 million recognized from the acquisition[190][191]. - The GCI Merger, completed on May 3, 2021, involved the issuance of 6,646,870 shares of common stock, with a fair value of net tangible assets acquired at $740,000 and intangible assets valued at $120.5 million[192][198]. - The SciSafe Acquisition closed on October 1, 2020, with the company issuing 611,683 shares valued at $29.29 per share and a cash payment of $15 million, including $1.5 million held in escrow[199][200]. - The CBS Acquisition, finalized on November 12, 2019, involved a total payment of $15 million, including $11 million in cash and shares valued at $4 million, with revenue targets for 2020 and 2021 not met[202][203]. - The acquisition of SAVSU involved 1,100,000 shares of unregistered common stock valued at $19.9 million, representing a 56% ownership stake[208]. - BioLife completed the acquisition of Astero Bio Corporation for a total base payment of $12.5 million, including an initial cash payment of $8.0 million and a deferred payment of $4.5 million[211]. - The company acquired Global Cooling, Inc. for approximately $234.9 million and Sexton Biotechnologies for approximately $39.9 million in 2021[320]. - The company recorded a contingent consideration liability of $9.9 million related to the acquisition of SciSafe, with a change in fair value of $3.0 million for the year ended December 31, 2021[314]. Financial Performance - Total revenue for the year ended December 31, 2021, was $119.2 million, representing an increase of $71.1 million, or 148%, from the previous year, with $40.9 million attributed to acquisitions[241]. - Freezer and thaw revenues increased by 318% to $56.6 million in 2021, driven by the acquisition of Global Cooling and growth in LN2 freezer sales[238]. - Total revenue, including product, service, and rental, was $119,156,000 in 2021, compared to $48,087,000 in 2020, marking an increase of 147.8%[332]. - Product revenue for 2021 reached $101,913,000, a significant increase from $44,540,000 in 2020, representing a growth of 128.7%[332]. - Service revenue from storage and cold chain services increased to $9.817 million in 2021, compared to $1.752 million in 2020, reflecting a growth of approximately 460%[364]. - The company reported a comprehensive loss of $(7,917,000) for 2021, compared to $2,667,000 in 2020[334]. - Net loss for the year 2021 was $7,635,000 compared to a net income of $2,667,000 in 2020, representing a significant decline[341]. Expenses - Total operating expenses for 2021 were $153.1 million, a 185% increase from $53.7 million in 2020[250]. - Research and development (R&D) expenses increased by $5.1 million, or 76%, in 2021 compared to 2020, primarily due to in-process R&D costs from the acquisition of Global Cooling[253]. - Sales and marketing (S&M) expenses rose by $7.6 million, or 118%, in 2021 compared to 2020, with $4.4 million attributed to Global Cooling[257]. - General and administrative (G&A) expenses increased by $17.8 million, or 122%, in 2021 compared to 2020, with significant costs related to stock-based compensation and increased headcount[261]. - The company expects R&D expenses to continue to rise as it expands and refines its product lines[255]. - The company anticipates an increase in S&M expenses as it expands its product offerings and market presence[259]. Assets and Liabilities - Total assets increased to $554.1 million as of December 31, 2021, compared to $234.8 million as of December 31, 2020, representing a growth of 135%[329]. - Total liabilities increased to $73.9 million in 2021 from $29.6 million in 2020, an increase of 149%[329]. - The Company reported an accumulated deficit of $105.0 million as of December 31, 2021, compared to $97.4 million in 2020[329]. - The Company’s total shareholders' equity increased to $480.1 million in 2021 from $205.2 million in 2020, a growth of 133%[329]. Cash Flow - Cash and cash equivalents decreased to $69.9 million as of December 31, 2021, from $90.4 million in 2020, mainly due to debt payoff and operational funding[278]. - Net cash used in operating activities was $(4,593,000) in 2021, a decrease from $6,645,000 provided in 2020[341]. - Cash flows from investing activities totaled $(13,192,000) in 2021, compared to $(24,715,000) in 2020, showing an improvement of 47%[341]. - The company reported a net decrease in cash and cash equivalents of $(20,563,000) for the year, down from an increase of $84,008,000 in 2020[342]. Tax and Regulatory - The effective tax rate for 2021 was 72%, significantly higher than the U.S. statutory rate of 21%, primarily due to windfall benefits on stock compensation[273]. - The company will continue to assess the realizability of its deferred tax assets and adjust the valuation allowance as needed[231]. - As of December 31, 2021, the amount of deferred social security tax payments was $297,000, with $135,000 paid in the year ended December 31, 2021[377]. Market and Operations - The company operates in the cell and gene therapy industry, providing tools and services designed to improve quality and reduce risks in biologic manufacturing[186][187]. - The company has a diversified portfolio of bioproduction tools and services, focusing on biopreservation, cell processing, and cold-chain transportation[186][188]. - The company continues to capitalize on opportunities for organic growth innovations and acquisitions in the bioproduction tools and services market[188]. - The company expects customer concentrations to diminish as revenues increase and its global market presence expands[239]. - The company experienced supply chain disruptions in 2021 due to COVID-19, which negatively impacted profitability due to increased supplier pricing and production stoppages[367].