ImmuCell(US:ICCC)2020-11-13 18:43Financial Data and Key Metrics Changes - Product sales increased by 25% in Q3 2020, following a 9% increase in Q2 2020 and an 11% increase in Q1 2020 [8][9] - For the nine-month period ended September 30, 2020, product sales were up 15%, and up 17% for the trailing 12 months [8] - Gross margin improved to 46% in Q3 2020, a 3-point increase from Q2 2020 [13] Business Line Data and Key Metrics Changes - The sales team is focused on disrupting the traditional scour vaccine market with preformed antibodies, leading to consistent market share gains [9] - A backlog of orders was reduced from approximately $945,000 as of June 30 to about $130,000 as of September 30 [10] Market Data and Key Metrics Changes - The dairy industry is experiencing strong economic measures, positively impacting customer demand for products [33] Company Strategy and Development Direction - The company plans to increase production capacity to $23 million per year, and later to $30 million per year, with renovations to the new facility completed [11] - The expansion of liquid processing capacity by 100% and freeze-drying capacity by 50% is underway, expected to be realized by Q2 2021 [12] - The company is preparing for the market launch of Re-Tain in Q1 2022, pending FDA approval [24] Management's Comments on Operating Environment and Future Outlook - The COVID-19 pandemic has disrupted operations but has not significantly impacted production time [17] - The Paycheck Protection Program loan of nearly $938,000 has been fully forgiven, aiding in operational continuity [16] - Management remains optimistic about future sales growth and market demand [33] Other Important Information - Non-cash expenses, including depreciation and stock-based compensation, comprised about 38% of product development expenses for the nine-month period [19] - The company is on track to submit the Chemistry Manufacturing and Controls (CMC) technical section to the FDA before year-end [23] Q&A Session Summary Question: Is there any need to submit earlier than December 31 for FDA approval? - Management indicated that while there is a need, the submission will only occur when ready, focusing on product stability [29] Question: Can sales increase in the current quarter based on demand? - Management confirmed that demand for products remains strong, and they expect to report results early in January [33] Question: Are there plans for international sales of First Defense and Tri-Shield? - Management stated that they will focus on clearing the backlog in North America before expanding into new international markets [35] Question: How does a farmer identify subclinical mastitis in cows? - Farmers monitor somatic cell counts and cow behavior to identify health issues [45] Question: How does the farmer obtain the product? - The product is delivered similarly to existing antibiotics, making it familiar and easy for farmers to use [48] Question: What role do major suppliers play in the product launch? - Major suppliers will play a significant role in distribution, similar to the existing network for First Defense [50]