ImmuCell(US:ICCC)2022-11-22 16:37Financial Data and Key Metrics Changes - Sales decreased by approximately $350,000 during the three-month period ended September 30, 2022, compared to the prior year, but increased by 24% or $935,000 over the second quarter of 2022 [8] - For the nine-month and twelve-month periods ended September 30, 2022, sales increased by 6% or $858,000 and 15% or $2.56 million, respectively, compared to the same periods in the prior year [9] - EBITDA decreased to approximately $1.3 million during the nine-month period ended September 30, 2022, from almost $2 million during the same period in 2021 [18] - Cash decreased to $8.8 million at September 30, 2022, from $10.2 million at December 31, 2021 [19] Business Line Data and Key Metrics Changes - The company is transitioning from a backlog situation to a buffer stock, complicated by contamination events and supply disruptions [10][12] - The installation of critical equipment to increase production capacity is on track to be operational by the end of the year, aiming for an annual production capacity of $35 million at 100% operating levels going into 2023 [14] Market Data and Key Metrics Changes - The company is preparing for a busy peak season in the first quarter, with a projected backlog of around $900,000 at year-end [32] Company Strategy and Development Direction - The company is investing in Project H to increase annual production capacity from $35 million to approximately $47 million by the second half of 2024, which includes improvements in facilities and additional storage [15][17] - The company aims to achieve FDA approval for Re-Tain, a product designed to treat subclinical mastitis, which is expected to revolutionize treatment in the dairy industry [20][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges faced due to contamination events but believes improvements have been implemented to avoid future occurrences [31] - The company is well-positioned with a blended debt rate of about 3.56%, having locked in rates before interest rates began to rise [42] Other Important Information - The company filed its Form 10-Q about five business days late to restate first and second quarter filings, which increased administrative expenses by approximately $222,000 without impacting cash position or product sales [6] Q&A Session Summary Question: Have the product challenges experienced in Q3 been solved? - Management stated that while contamination issues are always a risk in biological manufacturing, improvements have been made since the Q3 events, and no further contamination has been observed [29][31] Question: What is the size of the current backlog? - The projected backlog is expected to be around $900,000 at year-end, influenced by sales and new product releases [32][33] Question: Can you update on planned capital spending for this year and 2023? - Management indicated that approximately $5.7 million is set aside to complete current projects, leaving about $3.1 million for future initiatives [38] Question: How is the company positioned in the rising interest rate environment? - Management expressed confidence in their debt structure, with a blended rate of about 3.56%, which is fixed [42]