Cryo-Cell International(CCEL) - 2023 Q3 - Quarterly Report

Financial Performance - Total net revenue for the three months ended August 31, 2023, was $7,869,875, up from $7,680,959 for the same period in 2022, representing a growth of approximately 2.5%[174] - Revenue for the nine months ended August 31, 2023, was $23,466,980, a 4% increase from $22,572,707 in the same period of 2022[200] - Revenue for the three months ended August 31, 2023, was $7,869,875, a 2% increase from $7,680,959 in 2022[210] - Public cord blood banking revenue for the three months ended August 31, 2023, was $4,383, down from $137,825 in the same period of 2022[212] - Revenue from public cord blood banking sales for the nine months ended August 31, 2023, was $398,896, an increase of 18.2% compared to $337,405 for the same period in 2022[225] Expenses and Costs - Total cost of sales decreased to $2,156,187 for the three months ended August 31, 2023, from $2,348,755 in the prior year, a reduction of about 8%[174] - Cost of sales for the nine months ended August 31, 2023, was $6,366,737, representing a 4% decrease from $6,653,497 in 2022[202] - Selling, general and administrative expenses increased by 8% to $11,722,435 for the nine months ended August 31, 2023, compared to $10,891,951 in 2022[203] - Selling, general, and administrative expenses for the three months ended August 31, 2023, were $3,804,564, representing a 6% increase from $3,603,411 in the prior year[229] - Research, development, and related engineering expenses for the three months ended August 31, 2023, were $344,132, significantly higher than $80,272 in 2022[214] - Research, development, and related engineering expenses for the nine months ended August 31, 2023, were $727,648, significantly higher than $308,388 for the 2022 period, with $324,442 allocated to the Clinical Study and Research Agreement with Duke University[226] Cash and Securities - As of August 31, 2023, the company reported total marketable securities valued at $623,489,000[146] - Cash and cash equivalents decreased to $583,996,000 as of August 31, 2023, down from $1,703,958,000 at November 30, 2022[162] - The company utilized $5,124,056 for equipment purchases in the nine months ended August 31, 2023[162] Assets and Liabilities - Contract assets increased to $675,652 as of August 31, 2023, from $615,628 on November 30, 2022, reflecting a growth of approximately 9.7%[167] - Accounts receivable rose to $6,437,644 as of August 31, 2023, compared to $6,043,941, marking an increase of about 6.5%[167] - The company reported a total of 49,662,680 in contract liabilities (deferred revenue) as of August 31, 2023, up from 45,586,386, reflecting an increase of about 9.1%[168] Financing and Credit Facilities - The company has entered into a revolving credit facility of up to $10,000,000 and a term loan facility of $8,960,000 with Susser Bank[159] - Interest expense for the nine months ended August 31, 2023, was $1,405,825, up from $947,968 in the same period of 2022[205] - Interest expense during the three months ended August 31, 2023, was $469,642, up from $365,349 in the comparable period in 2022[232] Derivatives and Contingent Consideration - The company recorded a gain of $282,731 on derivatives for the three months ended August 31, 2023[148] - The estimated fair value of contingent consideration is $1,030,050,000, reflecting the earnout from the sale of Public Cord Blood Inventory[146] - The change in the fair value of contingent consideration for the nine months ended August 31, 2023, was a decrease of $65,154, compared to an increase of $259,769 for the same period in 2022[227] - The fair value of contingent consideration as of August 31, 2023, was remeasured using a Monte Carlo analysis, capturing the risk associated with the payout structure[227] - The ending balance of contingent consideration as of August 31, 2023, was $1,030,050, down from the beginning balance of $1,162,704 as of November 30, 2022[222] - Gain on the change in the fair value of a derivative for the three months ended August 31, 2023, was $282,731, compared to $62,835 in the 2022 period[234] Business Operations and Market Position - The company is organized into three reportable segments, including cellular processing and cryogenic storage for family and public use[154][156] - The company has a 100% viability rate of its specimens upon thaw for therapeutic use since inception[163] - The company completed the acquisition of a 56,000 square foot facility in July 2022, which will expand its cryopreservation and cold storage business through the new service, ExtraVault[180][181] - The company anticipates that the ExtraVault service will provide cost-effective solutions for biopharmaceutical companies and healthcare institutions, leveraging over 30 years of experience in handling biological specimens[181] - A significant portion of new enrollments in cord blood banking services is generated from returning customers and referrals, indicating strong customer loyalty[223] - The company markets its services through various healthcare professionals, resulting in high levels of customer satisfaction and referrals[182]