Summary of ImmuCell Corporation Conference Call Company Overview - **Company**: ImmuCell Corporation (Ticker: ICCC) - **Industry**: Animal Health, specifically focusing on products that reduce antibiotic use in livestock [1][2] Core Products and Market Position - **First Defense**: A USDA licensed product aimed at providing immediate immunity to newborn calves, reducing the need for traditional antibiotics [3][5][17] - **Retain**: A novel alternative to traditional antibiotics for treating mastitis, currently in the investigational phase due to FDA approval delays [6][38] - **Market Dynamics**: The company positions itself against competitors by emphasizing immediate immunity rather than delayed responses typical of vaccines [17][19] Sales and Financial Performance - **Historical Growth**: From 2011 to 2018, the company experienced an 11.6% CAGR, which accelerated to 15.8% CAGR from 2018 to 2024 following the launch of Tri Shield [12][14] - **Recent Sales Data**: Q1 2024 revenue was $8.1 million, with trailing twelve-month growth reaching $27.3 million, indicating strong recovery from previous production issues [14][15] - **Production Capacity**: The company has successfully doubled its production capacity to over $30 million annually and has been operating without contamination issues since April 2024 [16][15] Operational Challenges and Strategies - **Contamination Issues**: The company faced contamination problems during capacity expansion in late 2022 and throughout 2023, which limited supply [15][16] - **Backlog Management**: The backlog of orders was reduced from over $4 million to just over $3 million, with expectations to clear it in the upcoming quarters [27][28] - **Capital Expenditures**: Plans to increase production capacity from 30 million to 40 million annually, requiring approximately $3 million in capital expenditures [29][30] Product Development and Future Outlook - **First Defense Product Suite**: The product line has evolved since its initial approval in 1991, with the introduction of new formulations to enhance efficacy [34][35] - **Retain Investigational Use**: The company is initiating investigational use of Retain to gather field data, which is crucial for future strategic decisions [39][40] - **Gross Margin Improvement**: Gross margins improved from 22% during contamination issues to 42% in Q1 2025, with a target of reaching 45% [42][45] Strategic Financial Tools - **At-the-Market (ATM) Offering**: The company has utilized the ATM offering judiciously, with significant activity in 2024 but minimal in 2025, allowing for flexibility in financing [31][33] Conclusion - **Optimistic Outlook**: The management expresses optimism for the latter half of 2025, focusing on growth in First Defense and resolving strategic options for Retain [45]

Financial Data and Key Metrics Changes - Product sales for the first quarter of 2025 increased by 11% or $810,000 to a record $8,100,000 compared to the first quarter of 2024 [9] - The twelve-month period ended 03/31/2025 saw a 28% increase in product sales, amounting to $27,300,000 compared to the previous year [10] - Adjusted EBITDA for the three, six, and twelve-month periods ended 03/31/2025 was $2,300,000, $3,700,000, and $3,300,000 respectively, showing significant improvement from the previous year [12] Business Line Data and Key Metrics Changes - The sales mix for Tri Shield constituted 71% of total sales in the latest quarter, up from 55% in the previous quarter [17] - The company is developing a new bulk powder product, expected to be launched in the latter half of 2025, which will serve as a seed additive for large ranches [20] Market Data and Key Metrics Changes - The order backlog decreased from $4,400,000 as of 12/31/2024 to $4,000,000 as of 03/31/2025, and further reduced to $3,400,000 by 05/06/2025 [9] Company Strategy and Development Direction - The company is focused on expanding its product offerings and increasing production capacity, with investments exceeding $30,000,000 to enhance production facilities [6] - Management emphasizes the importance of avoiding contamination events and maintaining strong production yields to drive cash flows [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory for the remainder of 2025, highlighting the positive sales growth and improved cash balance [6] - The company is currently in a recovery phase, with expectations for continued growth driven by increased production capacity and backlog clearance [39] Other Important Information - The company has not experienced any contamination events for over a year, which is crucial for maintaining production efficiency [6] - The introduction of investigational product use for Repayne aims to gather market feedback while minimizing product development costs [7] Q&A Session Summary Question: Inquiry about product mix and its impact on gross margin - Management confirmed that Tri Shield has been a significant driver of growth due to its broader claims and efficacy, and while the bulk powder product is still in development, it is expected to contribute positively in the future [19][20] Question: Clarification on EBITDA erosion from past contamination events - Management indicated that the last contamination event occurred in April 2024, affecting primarily the first quarter of that year, with a revenue rebound starting in the fourth quarter of 2024 [30][35] Question: Expectations for future revenue and EBITDA - Management suggested that the core business EBITDA run rate is expected to be higher than the reported figures due to improved operational conditions and backlog clearance [40][41] Question: Discussion on product development expenses and their impact on EBITDA - Management acknowledged that significant investments in product development are impacting current EBITDA but are necessary for future growth and product approvals [45][50] Question: Difference between investigational use and commercial approval - Management explained that investigational use allows for product testing and data collection without generating revenue, while awaiting full FDA approval [61][62]

Financial Data and Key Metrics Changes - Product sales for the first quarter of 2025 increased by 11% or $810,000 to a record $8,100,000 compared to the first quarter of 2024, surpassing the previous record set in the fourth quarter of 2024 [9] - The gross margin improved to 42% in the first quarter of 2025, up from 37% in the fourth quarter of 2024, although the target remains at 45% or more [11] - Adjusted EBITDA for the three months ended 03/31/2025 was $2,300,000, a significant increase from $705,000 in the same period of 2024 [12] Business Line Data and Key Metrics Changes - The sales mix for Tri Shield constituted 71% of total sales in the latest quarter, up from 55% in the previous quarter, indicating strong demand for this product [17] - The company is developing a new bulk powder product, expected to be launched in the latter half of 2025, which will target large ranches [20] Market Data and Key Metrics Changes - The order backlog decreased from $4,400,000 as of 12/31/2024 to $4,000,000 as of 03/31/2025, and further reduced to $3,400,000 as of 05/06/2025, indicating improved sales performance [9] Company Strategy and Development Direction - The company is focused on expanding its product offerings and increasing production capacity, having completed investments to boost production capacity to over $30,000,000 per year [6] - Management emphasized the importance of avoiding contamination events and maintaining strong production yields to drive cash flows [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory for the remainder of 2025, highlighting the complexity of managing a growing and diverse business [8] - The company is currently utilizing investigational product use of Repayne to gather market feedback while minimizing product development costs [7] Other Important Information - The company has not experienced any contamination events for over a year, which has positively impacted production and sales [6] - The new CFO, Tim Fiori, brings extensive experience from IDEXX Laboratories, which is expected to enhance financial operations [8] Q&A Session Summary Question: Inquiry about product mix and Tri Shield sales - Management confirmed that Tri Shield has been a significant driver of growth due to its broader claims and efficacy [19] Question: Expectations for new bulk powder product - The bulk powder product is still in development, with no sales reported yet, but is expected to launch in the second half of 2025 [20] Question: Clarification on EBITDA erosion from past contamination events - Management indicated that the last contamination event occurred in April 2024, affecting the previous year's EBITDA, but strong sales have rebounded since then [32][34] Question: Future revenue expectations - Management noted that the second quarter is expected to benefit from clearing the backlog and increased production capacity, although specific revenue projections were not provided [38] Question: Investigational product use versus commercial approval - The investigational use allows the company to gather data without generating revenue, while awaiting full FDA approval [58] Question: Impact of profitability on share sales - Management acknowledged that profitability is a factor in share sales, but capital needs for growth and obligations remain considerations [59] Question: Future projections for the company - Management expressed caution in providing specific projections due to the variability in sales and market conditions, emphasizing the importance of tracking performance [67]