BioLife Solutions(US:BLFS)2023-05-10 16:00PART I. FINANCIAL INFORMATION Item 1. Financial Statements BioLife Solutions reported a 4% revenue increase to $37.7 million, but net loss widened to $13.7 million due to higher operating expenses, impacting overall financial position Unaudited Condensed Consolidated Balance Sheets Total assets decreased slightly to $446.5 million, while total liabilities increased and shareholders' equity declined to $358.1 million, reflecting the period's net loss Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $132,789 | $138,452 | | Total Assets | $446,470 | $450,229 | | Total Current Liabilities | $47,319 | $44,582 | | Total Liabilities | $88,363 | $86,041 | | Total Shareholders' Equity | $358,107 | $364,188 | | Total Liabilities and Shareholders' Equity | $446,470 | $450,229 | Unaudited Condensed Consolidated Statements of Operations Total revenue increased 4% to $37.7 million, but operating loss widened to $13.6 million and net loss to $13.7 million due to higher operating expenses Q1 2023 vs Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $37,703 | $36,220 | | Total Operating Expenses | $51,308 | $44,187 | | Operating Loss | $(13,605) | $(7,967) | | Net Loss | $(13,714) | $(7,421) | | Net Loss Per Share (Basic & Diluted) | $(0.32) | $(0.18) | Unaudited Condensed Consolidated Statements of Comprehensive Loss Comprehensive loss for Q1 2023 was $13.6 million, primarily driven by the net loss, partially offset by other comprehensive income Comprehensive Loss Summary (in thousands) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss | $(13,714) | $(7,421) | | Other comprehensive income (loss) | $145 | $(156) | | Comprehensive loss | $(13,569) | $(7,577) | Unaudited Condensed Consolidated Statements of Shareholders' Equity Shareholders' equity decreased to $358.1 million, primarily due to the $13.7 million net loss, partially offset by stock-based compensation - The primary driver for the decrease in shareholders' equity was the net loss of $13.7 million incurred during the quarter57 - Stock-based compensation of $7.4 million partially offset the reduction in equity caused by the net loss57 Unaudited Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $2.7 million, while investing activities provided $2.9 million, resulting in a net cash decrease of $0.3 million Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,712) | $(7,924) | | Net cash provided by (used in) investing activities | $2,926 | $(2,270) | | Net cash used in financing activities | $(562) | $(181) | | Net decrease in cash | $(348) | $(10,375) | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail accounting policies and key disclosures, including an immaterial error correction, contingent consideration, debt, and stock-based compensation, confirming sufficient liquidity - The company corrected an immaterial error from prior periods related to uncollected sales taxes, adjusting the March 31, 2022 balance sheet and income statement107117 - The fair value of the contingent consideration liability related to the SciSafe acquisition increased to $5.0 million as of March 31, 2023, from $4.3 million at year-end 202215 - Total debt stood at $24.9 million as of March 31, 2023, primarily from a term loan agreement entered into in September 202266133 - Total stock-based compensation expense for Q1 2023 was $7.4 million, a notable increase from $5.4 million in Q1 2022176 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 4% revenue growth to cell processing products, offset by freezer/thaw declines, while increased operating expenses led to a wider loss, though liquidity remains sufficient Results of Operations Total revenue increased 4% to $37.7 million, driven by cell processing products, while operating expenses rose significantly due to higher personnel and stock-based compensation costs Revenue by Product Line (in thousands) | Product Line | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Freezer and thaw | $12,381 | $15,335 | $(2,954) | (19)% | | Cell processing | $18,993 | $14,899 | $4,094 | 27% | | Storage and storage services (Product) | $219 | $154 | $65 | 42% | | Storage and storage services (Service) | $3,825 | $3,090 | $735 | 24% | | Storage and storage services (Rental) | $1,639 | $2,742 | $(1,103) | (40)% | | Total Revenue | $37,703 | $36,220 | $1,483 | 4% | - General & Administrative expenses increased by $3.3 million (29%) due to increased headcount and professional services fees219 - Sales & Marketing expenses rose by $1.6 million (32%) primarily from increased personnel expenses including stock-based compensation221 Liquidity and Capital Resources The company held $56.9 million in liquid assets, with improved operating cash flow and positive investing cash flow, asserting sufficient liquidity for the next twelve months - The company possessed $56.9 million in cash, cash equivalents, and available-for-sale securities as of March 31, 202323193 - The decrease in cash used by operating activities was primarily due to favorable timing in the collection and disbursement of working capital, particularly in accounts receivable, inventories, and accounts payable232 - The company has the ability to borrow up to an additional $30 million under its 2022 term loan agreement23193 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure from interest rates is not material due to fixed-rate debt and an interest rate ceiling, with no material changes in foreign currency risk - Interest rate risk from long-term debt is not considered material due to fixed rates and an interest rate ceiling on the variable component240 - There were no material changes in foreign currency exchange risk during the quarter241 Item 4. Controls and Procedures Disclosure controls and procedures were deemed ineffective due to ongoing material weaknesses in internal controls over financial reporting, with remediation plans still in progress - Disclosure controls and procedures were deemed ineffective as of the end of the quarter due to ongoing material weaknesses in internal controls242 - The identified material weaknesses relate to the control environment, risk assessment, IT logical access, accounting for complex transactions, and indirect tax liabilities242 - Remediation plans outlined in the 2022 Form 10-K are still being implemented245 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any legal proceedings or claims expected to have a material adverse effect on its operations or financial condition - There are no material legal proceedings pending against the company247 Item 1A. Risk Factors No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were reported - No material changes to risk factors were reported for the quarter248 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None249 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and interactive data files - The exhibits include certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act254255