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BioLife Solutions(BLFS) - 2024 Q3 - Earnings Call Transcript
BLFSBioLife Solutions(BLFS)2024-11-13 01:41
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Financial Data and Key Metrics Changes - BioLife Solutions reported Q3 2024 revenue from continuing operations of 30.6million,a3030.6 million, a 30% increase year-over-year, primarily driven by a 43% increase in cell processing platform revenue [20][21] - Adjusted gross margin for Q3 2024 was 54%, up from 44% in the prior year, while GAAP gross margin increased to 51% from 48% [21][25] - Adjusted EBITDA for Q3 2024 was 6.1 million, or 20% of revenue, compared to 1.4million,or61.4 million, or 6% of revenue, in the prior year [26][25] Business Line Data and Key Metrics Changes - Cell Processing platform revenue totaled 19 million, reflecting a sequential increase of 6% and a year-over-year increase of 43% [8][20] - Biopreservation media products, which account for the majority of cell processing revenue, showed strong quarter-over-quarter growth, although there was a decline in other products due to timing [12][20] Market Data and Key Metrics Changes - The top 20 customers accounted for approximately 80% of biopreservation media revenue, with 60% of this revenue coming from direct customers, and 40% from customers with approved therapies [12][20] - BioLife's biopreservation media products are embedded in over 70% of relevant, commercially sponsored CGT clinical trials, indicating strong future growth potential [13] Company Strategy and Development Direction - The company announced the strategic divestiture of its SciSafe bio storage business for 73million,markingapivotalsteptowardsbecomingapure−playCGTtoolsprovider[10][14]−Futurefocuswillbeonhigh−growth,high−margincellprocessingproducts,withplanstoallocatecapitaltowardsexpandingthebiopreservationmediaproductline[14][16]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheimprovingmacroenvironmentforthebioproductionsubsector,highlightingfourconsecutivequartersofsequentialrevenuegrowth[7][11]−Thecompanyanticipatescontinuedgrowthin2025,withdestockingissueslargelybehindthem[36][52]OtherImportantInformation−Thecompanyupdatedits2024revenueguidanceto73 million, marking a pivotal step towards becoming a pure-play CGT tools provider [10][14] - Future focus will be on high-growth, high-margin cell processing products, with plans to allocate capital towards expanding the biopreservation media product line [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving macro environment for the bioproduction subsector, highlighting four consecutive quarters of sequential revenue growth [7][11] - The company anticipates continued growth in 2025, with destocking issues largely behind them [36][52] Other Important Information - The company updated its 2024 revenue guidance to 98 million to 100million,reflectinganincreaseincellprocessingplatformguidanceoffsetbyadecreaseinexpectedstoragerevenueduetothesaleofSciSafe[31][32]−CashandmarketablesecuritiesbalanceasofSeptember30,2024,was100 million, reflecting an increase in cell processing platform guidance offset by a decrease in expected storage revenue due to the sale of SciSafe [31][32] - Cash and marketable securities balance as of September 30, 2024, was 39.3 million, an increase from $36.9 million as of June 30, 2024 [29] Q&A Session Summary Question: Can you frame up what pro forma gross margins look like post SciSafe sale? - The adjusted gross margin without SciSafe for the first half of 2024 was 60%, with minimal impact expected on adjusted EBITDA profile going forward [34] Question: How should we think about long-term growth from here? - Management indicated that formal guidance for 2025 will be provided in early January, but they expect growth to continue [36] Question: What will be the focus post SciSafe sale? - The focus will be on the cell processing product line, particularly biopreservation media and Sexton tools, with potential for capacity expansion [38][39] Question: Can you expand on specific levers within the cell processing platform for growth? - Key factors include deepening relationships with distributors, pricing opportunities, and cross-selling Sexton tool products [47][48] Question: How is the demand from smaller customers and academia? - Demand from smaller customers is improving, with good sequential growth observed from distributors representing these segments [58] Question: What is the relevance of Asia for long-term growth? - Less than 5% of revenue comes from China, indicating that while Asia is important, it is not material for immediate growth [59]