Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sequential revenue improvement in Q4 2024, with a 12% increase from Q3.
- Positive book-to-bill ratio indicating strong demand.
- Successful launch and adoption of new products like the SoHo telemetry devices and MeshMEA systems.
- Expansion of distribution agreements with major distributors like Fisher and VWR to include North America.
- Strong growth in European revenues due to new product introductions.
Negative Points
- Q4 2024 revenue was 13% below the same quarter last year.
- Operating income was break-even on a GAAP basis.
- Non-compliance with the net leverage ratio covenant in the existing credit agreement.
- Significant decline in APAC revenue, down 24% compared to the prior year.
- Uncertainty around NIH funding affecting visibility and future revenue projections.
Q & A Highlights
Q: What was the issue with the debt financing, and what metric was not met?
A: James Green, CEO, explained that the company faced three to four quarters of reduced revenue starting in early 2024, which impacted their net leverage ratio. This ratio, which compares current debt to trailing 12-month EBITDA, was affected despite positive EBITDA. The company had been close to breaching this covenant for some time and is now focused on establishing a new debt facility.
Q: What interest rate were you paying, and what do you expect with the new transaction?
A: James Green, CEO, stated that the previous rate was SOFR plus 3.75%, totaling around 8%. New private debt facilities are expected to have rates 2 to 4 points higher, potentially exceeding 10%, but they will offer more flexibility for growth investments.
Q: How are the new product introductions, like MeshMEA and BTX, performing in terms of revenue growth?
A: James Green, CEO, noted that new products, particularly MeshMEA systems, have shown significant growth, especially in Europe. The MEA business grew from 5% to 7% of total revenue in one year. Bioproduction is also a promising area, though it requires longer sales cycles.
Q: Can you provide more details on the ERP implementation and expected operational efficiencies in 2025?
A: James Green, CEO, mentioned that the ERP system is now in place, and while there may be initial inefficiencies, it is expected to improve inventory management, supply chain efficiency, and gross margins over time.
Q: How do you see the business with the large biotech using your technology for Car-T therapy unfolding this year?
A: James Green, CEO, indicated that while it's hard to predict due to long cycles, the BTX electroporation technology is crucial for new drug development. The focus is on being part of more drug pipelines, which should generate business across various applications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
