BioLife Solutions(BLFS) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $44.3 million, representing a 19% increase and an 18% organic growth compared to Q4 2021, driven by a 35% increase in biopreservation media revenue [14][36] - Adjusted gross margin for Q4 2022 was 32%, up from 17% in Q4 2021, while for the full year 2022, it was 33% compared to 32% in 2021 [16][36] - GAAP operating expenses for Q4 2022 were$ 93.5 million, including a $40.5 million intangible impairment related to the Global Cooling acquisition, compared to$ 54.9 million in Q4 2021 [17][38] - Adjusted operating loss for Q4 2022 was $8.2 million, an improvement from a loss of$ 13.1 million in Q4 2021 [20] Business Line Data and Key Metrics Changes - Cell Processing platform revenue was $20.2 million, with total revenue increasing by 36% and organic revenue increasing by 35% over the same period in 2021 [15] - Freezers and Thaw Systems platform revenue was$ 17.4 million, with total and organic revenue up 5% over the same period in 2021 [15] - Storage and Storage Services platform revenue was $6.7 million, with both total and organic growth of 14% over the same period in 2021 [35] Market Data and Key Metrics Changes - The company sold and shipped products to 217 new unique customer sites across its three product and service platforms in Q4 2022 [27] - COVID-19-related revenue accounted for approximately 5% of total revenue in Q4 2022, down from 15% in Q4 2021 [14][35] - For the full year 2022, total revenue was$ 161.8 million, a 36% increase and an organic revenue increase of 38% over 2021 [36] Company Strategy and Development Direction - The company aims to increase recurring high-margin revenue to 70% or more by the end of 2025, currently at about 60% [6][40] - The focus remains on gaining new CGT and biopharma customers, driving adoption of cell processing and storage services platforms, and improving supply chain and quality in the freezers platform [5][8] - The company expects to continue to derive adoption of its solutions in the CGT space, with its cell processing offerings embedded in up to 10 additional candidates that could get approved this year and next [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2024 exit run rate aspirational financial goals of $250 million in revenue, 50 points of adjusted gross margin, and 30 points of adjusted EBITDA margin [57] - The management noted that demand for their portfolio of bioproduction tools and services remains strong, emphasizing that they are still in the early stages of CGT approvals [56] - Management acknowledged supply chain constraints but indicated that they do not expect these to significantly impact their revenue outlook for 2023 [71] Other Important Information - The company will be filing for an automatic extension with the SEC for their 10-K filing due to turnover at the corporate controller position [41] - The cash and marketable securities balance at December 31, 2022, was$ 64.1 million, compared to $61.7 million at September 30, 2022 [39] Q&A Session Summary Question: Can you help us bridge to the 50% gross margin by Q4 2024? - Management indicated that the bridge to margin aspirational goals is based on optimizing the supply chain, reducing waste, and improving productivity in the plant [46][47] Question: How does the opportunity for allogeneic therapy compare to autologous therapies? - Management believes there will be a significant shift to predominant allogeneic therapies as more biology is understood, which will be a meaningful catalyst for growth [49][50] Question: How much did supply chain constraints affect Q4 performance? - Management acknowledged that there were some supply chain constraints but did not expect them to significantly impact the revenue outlook for 2023 [71] Question: What are the steps being taken to increase higher margin recurring revenue streams? - Management highlighted that the growth will be driven by existing customers and new products and services related to accessories and other non-instrument product lines [87]