ImmuCell(US:ICCC)2021-03-30 11:56Financial Performance - Total assets increased by 176% from $14.6 million in 2015 to $40.4 million in 2020[17]. - Stockholders' equity rose by 166% from $10.6 million in 2015 to $28.3 million in 2020[17]. - Market capitalization grew by 86% from $23.0 million in 2015 to $43.0 million in 2020[17]. - Net working capital increased by 41% from $7.1 million in 2015 to $9.9 million in 2020[17]. - The company recorded a full valuation allowance against net deferred tax assets in Q2 2018, which significantly increased net loss, but this could be reversed if future profitability improves[75]. - The company recorded an income tax benefit of ($10,000) for the year ended December 31, 2020, compared to an expense of $28,000 in 2019[178]. - The net operating loss increased by 45% to $1.4 million for the year ended December 31, 2020, primarily due to a $667,000 increase in product development expenses[174]. - Loss before income taxes decreased by 19%, or $235,000, to $1 million for the year ended December 31, 2020, compared to a loss of $1.3 million in 2019[176]. - Net loss for the year ended December 31, 2020, was $1 million, or $0.14 per share, compared to a net loss of $1.3 million, or $0.19 per share, in 2019[178]. - The company anticipates that cash and cash equivalents, along with gross margin from ongoing product sales, will be sufficient for at least twelve months[127]. Product Development and Sales - ImmuCell Corporation's First Defense product line has achieved cumulative sales exceeding 26 million doses since its inception in 1991[20]. - The estimated first-year sales potential for the new product Re-Tain™ is approximately $5.8 million, potentially growing to about $36.1 million by the fifth year post-launch[40]. - The company aims to increase annual product sales from just over $15 million to approximately $23 million through growth in the First Defense product line and the launch of Re-Tain™[43]. - Sales of the First Defense product line accounted for 98% and 97% of total product sales in 2020 and 2019, respectively, indicating a high concentration risk[78]. - Domestic sales increased by 12% and international sales increased by 11% compared to the year ended December 31, 2019, with international sales accounting for 11% of total sales in both years[141]. - The company expects to fulfill the remaining backlog and meet ongoing strong demand as increased production capacity comes online in the second quarter of 2021[146]. - The company plans to build inventory in preparation for a potential limited market launch of Re-Tain™ in Q4 2021, while continuing to bridge supply from contractors to in-house services[166]. Market and Competitive Landscape - The total U.S. market for scours preventative products for newborn calves is estimated at approximately $23.4 million per year, with the total domestic addressable market (including both calf and dam levels) estimated at approximately $68.1 million per year[31]. - The U.S. dairy industry incurs approximately $2 billion in economic harm annually due to mastitis, making it the most costly disease affecting the industry[34]. - The company leads in sales dollars and calves treated in the U.S. market for calf-level scours preventatives, with a competitive advantage in providing protection against E. coli, coronavirus, and rotavirus[58]. - The company faces competition from larger firms like Merck and Zoetis, which have more extensive resources and lower-priced products[94]. - The company is focused on expanding its product development pipeline, particularly in bacteriocins as alternatives to traditional antibiotics[169]. Regulatory and Compliance - The Tri-Shield First Defense product achieved USDA approval in Q4 2017 and is designed to provide Immediate Immunity against E. coli, coronavirus, and rotavirus[22]. - The introduction of Re-Tain™ is positioned favorably against new FDA regulations aimed at reducing antibiotic use in livestock, as it does not require milk discard during treatment[39]. - The FDA approval timeline for Re-Tain™ is projected between Q4 2021 and Q2 2022, with four out of five required Technical Sections already approved[83]. - The FDA issued a Technical Section Incomplete Letter regarding the first-phased DS submission in Q3 2019, with a follow-up inspection anticipated in the first half of 2021[168]. Investments and Capital Expenditures - The company has made significant capital investments to increase production capacity for the First Defense product line and develop Re-Tain™[17]. - The production facility for Re-Tain™ was constructed at a cost of approximately $20.8 million, with an initial capacity to support at least $10 million in sales[41]. - The company invested approximately $20.8 million in the construction of a Drug Substance production facility, which is critical for achieving FDA approval of the Re-Tain™ product[72]. - The company is investing approximately $4 million to construct its own Drug Product formulation and aseptic filling capability, expected to be operational by late 2022 or early 2023[93]. - The company has made capital expenditures totaling approximately $33.1 million from 2014 to 2020, with significant investments in production capacity and facility improvements[132]. Operational Metrics - The company employs 61 employees, an increase from 54 employees a year ago, with approximately 35.9 full-time equivalent employees engaged in manufacturing operations[65]. - The backlog of orders was approximately $1.8 million as of December 31, 2020, posing a risk of losing customers if production capacity does not meet demand[79]. - The company has increased the number of farms supplying colostrum for its First Defense product line, but faces risks related to supply chain disruptions and regulatory compliance[105]. - The company has not paid dividends on its common stock and does not have any present plan or expectation to pay dividends[120]. Financial Ratios and Debt Management - The company refinanced its bank debt to fixed-rate notes at 3.5% per annum in Q1 2020, which has increased its debt service costs significantly[69]. - The bank debt refinancing in Q4 2020 allowed the company to reduce the outstanding mortgage loan balance to 80% of the most recent appraisal value, with a debt service coverage ratio of 2.03 for 2020 and 1.57 for 2019, but there is a risk of not meeting the minimum requirement of 1.35 for 2021[70]. - Outstanding bank debt totaled approximately $9.5 million as of December 31, 2020, with a fixed interest rate of 3.5% per annum[185]. - The company’s debt service coverage ratio was 2.03 for the year ended December 31, 2020, compared to 1.57 for 2019, but may not meet the minimum requirement of 1.35 for 2021[129]. Management and Governance - Elizabeth L. Williams has been with the company since April 2016, previously serving as Vice President of Global Manufacturing and Supply at Zoetis[200]. - The company plans to file its 2021 Proxy Statement with the SEC within 120 days after December 31, 2020, detailing executive compensation and director elections[201][202]. - Information regarding stock ownership by certain beneficial owners and management will also be included in the upcoming Proxy Statement[204]. - The company has made multiple amendments to its Certificate of Incorporation, with the latest effective June 11, 2020[209].