Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BioLife Solutions Inc (BLFS, Financial) reported an 11% sequential increase in cell processing revenue and a 6% sequential increase in total revenue for Q2 2024.
- The company has increased its full-year revenue guidance to $99 million to $101 million, reflecting an overall growth of 5% to 8%.
- Adjusted gross margin improved to 52% in Q2 2024, up from 45% in the prior year, due to product mix, operational efficiencies, and higher capacity utilization.
- BioLife Solutions Inc (BLFS) has a market share exceeding 70% in commercially sponsored clinical trials in the US, with significant involvement in Phase 2 and Phase 3 trials.
- The company is well-positioned to benefit from easing industry headwinds and the maturation of the cell and gene therapy (CGT) industry, with strong relationships with commercial therapy customers.
Negative Points
- Q2 2024 revenue from continuing operations decreased by 3% year-over-year, primarily due to a 4% decrease in the cell processing platform.
- The company's GAAP net loss increased to $7.1 million in Q2 2024, compared to $5.5 million in the prior year, partly due to a $4.1 million write-off of an investment.
- BioLife Solutions Inc (BLFS) experienced a sequential cash decrease of $9.2 million, driven by cash outflows related to the divestiture of Global Cooling.
- The biostorage services platform guidance was adjusted to the lower end of the prior range, indicating potential challenges in achieving higher growth.
- The company is still in the process of divesting its Custom BioGenic Systems (CBS) unit, which is a drag on margins despite generating positive adjusted EBITDA.
Q & A Highlights
Q: Any one-time benefits in cell processing in Q2 that might not repeat in the second half of the year? Why shouldn't we see more of a pickup in cell processing demand in the back half of the year?
A: Roderick de Greef, CEO, noted that the strong performance in HPL growth media was a significant factor in Q2, which may not repeat in the latter half. The guidance reflects a 5% to 8% increase in the second half over the first half, and the company has articulated its expectations for the rest of the year as accurately as possible.
Q: Are there any updates on the internal review of the product portfolio?
A: Roderick de Greef, CEO, mentioned that the focus has been on streamlining the cell processing platform and divesting freezer lines. More clarity on the strategic review process is expected in the next earnings call.
Q: Can you elaborate on the cross-selling efforts with direct customers and distributors?
A: Garrie Richardson, Chief Revenue Officer, explained that leveraging strong relationships with legacy clients has been effective, particularly with the Sexton product line and biopreservation media. The CryoCase product is an example of innovation being pushed through these relationships.
Q: Have you seen any impact from the improved funding environment on your business?
A: Roderick de Greef, CEO, stated that direct customers with commercial therapies are well-funded and not impacted by the funding environment. Growth has been observed in distribution revenue, particularly with larger partners focusing on early-stage and research accounts.
Q: Are you still comfortable with the 20% plus EBITDA margin exit rate target?
A: Roderick de Greef, CEO, confirmed the commitment to the target, emphasizing media growth and the expected divestiture of CBS as factors that will help achieve this goal.
Q: Can you provide more details on the CryoCase launch and its potential impact?
A: Garrie Richardson, Chief Revenue Officer, noted early-stage interest in CryoCase due to market challenges with particulates. The product is in the hands of clients for validation, and there is ongoing outreach to regulatory authorities.
Q: Can you quantify the impact of destocking pressures easing versus new clinical activity?
A: Roderick de Greef, CEO, mentioned it's difficult to quantify precisely, but noted a significant reduction in the number of customers pushing out orders compared to last year.
Q: Is the CryoCase compatible with ThawSTAR products?
A: Roderick de Greef, CEO, stated that CryoCase is not currently compatible with ThawSTAR products, but there are plans to make it compatible with the cassette device in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
