BioLife Solutions(US:BLFS)2024-05-10 00:36Financial Data and Key Metrics Changes - The company reported Q1 revenue of $31.7 million, a decrease of 16% year-over-year, primarily due to a 35% decrease in revenue from freezer products and a 15% decrease in the cell processing platform, partially offset by a 25% increase in the biostorage services platform [13][27] - Adjusted gross margin for Q1 was 40%, up from 37% in the prior year, attributed to a more favorable product mix and better utilization at biorepository facilities [27] - Adjusted EBITDA for Q1 was negative $1.2 million, compared to negative $1.1 million in the prior year, with a pro forma adjusted EBITDA excluding GCI being positive $3.6 million [28][18] Business Line Data and Key Metrics Changes - The cell processing revenue saw a sequential increase of 10%, following an 11% increase from Q3 to Q4 of the previous year [7] - The biostorage and services platform posted a 7% revenue growth over Q4 of the previous year [7] - The freezer assets, specifically CBS, represented approximately 11% of Q1 sales and have been a historical drag on profitability, with plans to exit this business [6] Market Data and Key Metrics Changes - The CGT regulatory environment showed momentum with biopreservation media embedded in two newly-approved therapies, bringing the total to 15 approved therapies supported by the company [20] - The company has a market share exceeding 70% in commercially-sponsored clinical trials in the U.S., with approximately 45 Phase 2 and Phase 3 trials utilizing its CryoStor product [42] Company Strategy and Development Direction - The company is focusing on high-margin cell processing and biostorage services, moving away from low-margin freezer products [4] - The divestiture of the GCI freezer unit is expected to enhance the financial profile and operations of the company [5] - The company aims to leverage its market-leading position in biopreservation to drive the adoption of high-margin recurring revenue tools and services [83] Management's Comments on Operating Environment and Future Outlook - Management expressed increased confidence in the full-year revenue outlook of $95.5 million to $100 million, indicating an easing macro environment in the bioproduction subsector [16] - The company anticipates continued revenue growth and margin expansion throughout 2024, driven by its cell processing and biostorage services platforms [52] Other Important Information - The company’s cash and marketable securities balance at March 31, 2024, was $46.1 million, down from $52.3 million at the end of 2023 [51] - The company expects to achieve adjusted EBITDA with a two in front of it by the end of next year, with potential for a three in front of it by early 2026 [56] Q&A Session Summary Question: Is there any update on the sale of CBS? - Management confirmed they are in the middle of the divestiture process and expect modest cash proceeds, with reduced operating expenses at CBS making it slightly positive from an adjusted EBITDA perspective [59] Question: What do you see on the competitive front? - The focus is on protecting and growing the biopreservation media position, ensuring the company remains a leader in this space [57] Question: How do you plan for the ramp of newly approved therapies? - The ramp is built into actual results and future forecasts, with better visibility indicating an improved forecast for customer adoption of therapies [66] Question: What is the expected lag between increased funding for customers and order flow? - The expected lag is approximately two to three quarters for orders to start flowing through after customers see increased funding [76] Question: What are the plans for future facility expansions? - The company is considering consolidating existing facilities to increase capacity, particularly in Boston and New Jersey [68]