BioLife Solutions(US:BLFS)2023-11-10 03:27Financial Data and Key Metrics Changes - Adjusted operating expenses for Q3 2023 totaled $24.4 million, an increase from $20.8 million in the prior year, primarily due to $2.9 million in severance costs [1] - Adjusted EBITDA for Q3 2023 was negative $3.1 million compared to positive $1.8 million in the prior year, primarily due to lower biopreservation media revenue [79] - GAAP net loss was $29.1 million in Q3 2023, compared to $10.3 million in the prior year [54] Business Line Data and Key Metrics Changes - Revenue for the cell processing platform decreased by 26% year-over-year, with a 29% sequential decrease compared to Q2 [75][45] - Biostorage services platform revenue for Q3 was $6.6 million, a decrease of 10% year-over-year, but excluding COVID-related revenue from Q3 2022, revenue increased by 50% [76] - Freezers and Thaw Systems platform revenue for Q3 was $13.4 million, a decrease of 13% over the same period in 2022 [52] Market Data and Key Metrics Changes - The company expects to come in at the low end of its revenue guidance for 2023, projecting total revenue of approximately $144 million [3] - The company noted that macro headwinds and global economic uncertainties, including pharma destocking and a constrained biotech funding environment, have persisted throughout the third quarter [65] Company Strategy and Development Direction - The company is focused on divesting its freezer business to refocus on high-margin cell processing products and biostorage services [48] - The company aims to expand its biostorage capacity in existing locations and explore new strategic sites for further growth [72] - Management is optimistic about the growth potential in the cell and gene therapy market, with a focus on profitable growth [40][42] Management's Comments on Operating Environment and Future Outlook - Management believes that the challenges faced are transient and anticipates a recovery in customer orders as inventory levels normalize [111] - The company is confident that it will emerge stronger and more agile post-divestiture of the freezer business [30] - Management expressed enthusiasm about the opportunities ahead, particularly in the cell and gene therapy market [40] Other Important Information - The company reduced its corporate non-freeze operations headcount by 10% in anticipation of the divestiture [53] - Cash and marketable securities balance at September 30, 2023, was $42.2 million, down from $48.1 million at June 30, 2023 [55] Q&A Session Summary Question: What is the outlook for the fourth quarter? - Management indicated that they feel good about Q4 performance relative to guidance, with expectations for larger distributors and direct customers to recover [82] Question: Can you elaborate on the go-to-market strategy post-freezer sale? - The sales team will focus on scientifically oriented sales strategies for cell processing tools, differing from the capital equipment focus of the freezer sales team [83] Question: How is the freezer divestiture process progressing? - Management stated that the divestiture is likely to close in early 2024, with ongoing discussions with multiple parties [49][114] Question: What is the impact of the current biotech environment on long-term opportunities? - Management believes that the current challenges will not significantly impact their long-term opportunities in cell and gene therapy [139] Question: How will capital be deployed post-divestiture? - The focus will be on investing in product lines that are expected to drive profitable growth [140]