Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Scientific Industries Inc successfully raised $7 million in financing, enabling the launch of the new SBI DOTS multiparameter sensor platform.
- The company reported a 42% sales growth compared to the same period last year, driven by high demand for legacy CGQ products.
- Introduction of subscription plans for DOTS 2.0 software, expected to generate recurring revenue and enhance user experience with smart email notifications.
- Significant cost-saving measures implemented, including a 23% reduction in staffing and a voluntary salary cut program, projected to save around $1.5 million over the next 12 months.
- Strong pipeline development with over 200 new leads generated in Q1, setting the stage for potential aggressive growth in customer base and sales.
Negative Points
- Despite successful financing, the company incurred higher Q1 cash costs due to severance payments, financing expenses, and costs associated with the DOTS multiparameter sensor launch.
- The company had to implement significant cost-cutting measures, including a 23% reduction in staff, which could impact operational efficiency and employee morale.
- Reliance on the success of newly launched products like the SBI DOTS multiparameter sensor platform, which brings inherent risks if the products do not perform as expected.
- The need for continuous investment in marketing and product development to maintain growth and competitiveness in a rapidly evolving industry.
- Potential challenges in scaling up operations and managing a larger customer base effectively, especially given the recent rightsizing of the organization.
Q & A Highlights
Q: Can you provide more color on the customers that bought your MPS, sight unseen, as you mentioned in the press release? Why did they choose to go with your product?
A: (John Moore - Chairman of the Board, Chairman of SBI) Customers found the dissolved oxygen-based feeding feature a breakthrough, allowing monitoring and control in smaller scale experiments which are usually costlier. The pharmaceutical company, a repeat customer, expanded use in their labs, indicating strong traction within their network. The world's largest yeast manufacturer is expected to further integrate our systems across their global labs, presenting significant expansion opportunities. A prominent strain engineering company also showed interest, suggesting potential for widespread adoption and peer recommendations.
: Can you help us understand what you're seeing in customer behavior in the bioprocessing segment, specifically with customer growth year over year?
A: (John Moore - Chairman of the Board, Chairman of SBI) There's a growing preference for real-time monitoring to avoid contamination risks and achieve more with less, especially as capital costs rise. Customers are increasingly considering alternatives like shake flasks for achieving results comparable to more expensive systems. The shift towards more cost-effective solutions is evident, and our new device supports this trend.
Q: Any commentary across the customer types like pharma or CDMOs, that you're seeing in your pipeline?
A: (John Moore - Chairman of the Board, Chairman of SBI) The sales process involves creating awareness and converting it into interest and action. Our aggressive marketing and presence at trade shows have built significant awareness, now translating into active interest and inclusion in customer budgets. This indicates a robust pipeline with potential for significant conversions and demonstrations.
Q: Now that things seem to be normalizing more, how do you see the competitive dynamics shifting in bioprocessing?
A: (John Moore - Chairman of the Board, Chairman of SBI) The bioprocessing field has seen limited innovation, particularly in tools, with major manufacturers focusing on existing products and acquisitions rather than innovation. Our breakthrough in affordable monitoring and control in common bioreactors like shake flasks positions us uniquely in the market, with substantial technological and intellectual property advantages. This innovation is likely to benefit shareholders significantly in the long term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
