BioLife Solutions (BLFS) 16 Mar 232022 Q4 Earnings call transcript

Good day, and welcome to the BioLife Solutions’ Fourth Quarter 2022 and Full Year Earnings Call. Today’s call is being recorded.

I would now like to turn the conference over to Troy Wichterman, Chief Financial Officer. Please go ahead.

Thank you, operator. thank joining and everyone, afternoon, you us. for Good is Chairman and me on Executive Rice, call today’s With Chief Mike Officer. fourth operational Earlier release today, at for biolifesolutions.com. and is announcing press full the highlights our preliminary XXXX, we unaudited financial available issued which quarter and a year results

that projections These risks or As financial the during certain performance we cause statements statements to forward-looking may of will call, reminder, other to uncertainties regarding from company. are results future and subject a expectations. make the differ this and actual future events materially

and For that a detailed uncertainties I periodic discussion that forward-looking filings as other the of refer and SEC. the filed business and to the our risks reports company’s statements, you affect qualify public with

are are required except they date to no forward-looking factors these update on or therefore, and any and assumes subject statements change, given. speak projections only as of that statements projections obligation by The law. company Company statements as to are the based forward-looking

this included should During non-GAAP an metrics adjusted These metrics speak financial or adjusted viewed or be release adjusted or GAAP non-GAAP are Reconciliations non-GAAP to of alternative the issued results. to this to press financial we afternoon. we as GAAP. not in call, will

our historic financial the activity, adjusted of to that a results in or light However, when of our of current periods. use with prior view M&A clearer non-GAAP we believe metrics investors compared provides

Mike call the to turn Rice, and to over like BioLife I’d CEO Chairman Now of Solutions.

storage the XXXX. CGT our improvements that everyone. questions. XXXX to delivered noting and present with on performance financials freezers new call. our storage my I’ll glad the key making will After meaningful and off and year take team our good to our driving in After conclude quality by services in initiatives chain biopharma supply cell afternoon, and QX and start customers, continued of remarks, processing Thanks, you of and platforms Thank our be gaining continued your and joining adoption for our Troy, strong QX we’ll execution for Troy platform. full

the highlights, any peers science Turning customer experience the segment we and part, negative didn’t some was XX% revenue tool revenue to most impact headwinds, QX platform some the of with key growth $XX.X revenue in revenue processing significant Total QX cell highlight in XX%. for quarter. XXXX, up of XX%. space life QX from million, of while cited was organic of A our growth

QX, recurring our on fundamentals streams Our point growth high-margin margin remain of rest. total with high-growth, revenue recurring was and revenue differentiation catalysts about business in revenue the comprising for XX% To make intact. the instruments high

a we to this reminder, XX% by XXXX. the increase or end expect to of As more

products In early-stage customers Most and three future provided existing to solutions our comes of services XXXX, of platforms. QX, we will for from across their and pitch integrated to the new building revenue and that In to manufacturing, of of sold services and storage growth. share we about four quarters new customer services. a phenomenal our support sites sites more XXX products distribution tools penetrate to our as we drive and customer each customers we gained spend take unique pipeline shipped and XXX of deeper nurture

management storage freezers three and of liquid cell cold processing our you remind services, freezers which comprised second cryogenic and platform thaw evo finally, Sexton I’ll SciSafe our includes includes products; processing, mechanical ULT and offering. our what automated first, and biopreservation and thawing and storage now storage nitrogen which Sterling our media services platforms are: chain Instruments; systems freezers cell and is

ULT and using Processing products. using new accessory cold chain freezer new evo biopreservation Stirling included customers, end XX product now and by ThawSTAR New users, accessory QX freezers new Cell XX Sexton new new BioStorage users, sites X customers and new line now XX customers cryogenic X media, customers, XX XXX customer

QX, we our cell estimate products be are clinical We Processes that have to that over gene our Cell been used therapies. and For clinical in additional biopreservation received for solutions applications. at confirmation in or trials will new in least used XX XXX customer media be in used planned

use used therapies biopreservation from of date, CryoStor which Carteyva For JW annual also three approved the million. all in if clinical confident BioLife Sexton remain are Bios we approved could our these media, our products Cell $X customer in of also include that and Note approved Possessing therapies media. Media generate Therapeutics. to BMS, Breyanzi To approved of range and in use application, therapies, $XXX,XXX including solutions [indiscernible] each and from revenue being XX biopreservation

media in approvals least also biopreservation anticipated at XXXX. products are XX Our end the of embedded by additional

autologous I and development. by CAR the allogeneic developers in products of will currently Biopreservation clinical base our media the of T-cell platforms embedded conclude majority our saying customer most includes in the that with proprietary

therapies in able group to to that share be preservation to growth of for commercial our commercial of approvals from the shift catalysts treatment, CGT approvals These to gene first cell engineered of that play existing role eventual therapies therapies total expect new cocktails the finally, existing home second-line for risk allogeneic embedded media can support and approvals new our are therapies. approval We continue doses companies. of indications, increasing strong solutions as grows an reducing geographies, in. five and commercial existing awareness formulations as or We in our take manufactured estimates critical additional of are by see therapies,

and using our Media, and two XX CellSeal using vials, Sexton cell includes XX our HPL machines. using other automated film customer the For of products adoption platform, part applications clinical processing

drive annual to in and HPL reagents also for of can running ranges biopreservation playbook from approved products. estimate adoption used our therapies Sexton million see we’re $XXX,XXX you media to customer So for that both and consumables $X Sexton We Media. revenue CellSeal

their these to our ULT negative evo environmental proposition rentals offering pollution sites freezer orders we products Turning XXX either platforms, chain includes support tight evo. on SciSafe and first-time reduced heat use engaged QX, reduced services as cold storage based and Thaw initial operations. services, consumption, services in power new of impact sites. and see shipped storage and their and temperature value to Freezers first shipped revenue for our the In continue goal XX XX customer reducing or customer we to three final storage services, Stirling of our generation XX for regulation, Customers less platform, the storage of for new noise systems with which

estimate revenue year. and same we evo specialty our that Of full now the World through shipments now nearly gene these, clinical over for and continue and With quarter We Total International, Biocare. of Courier, our become evo Thermo were includes XX% year partner QX doubling and for cell approved profit XXXX. have over Fisher, to access class believe contributor. XXXX our a XX,XXX, to trials. were courier meaningful platform, Quick platform shipments last network SciSafe, were the the expanded to chain companies evo therapies cold for our a therapy XXX% brought were can drive defining management over X,XXX well Marken approximately evo we over offering up rest again,

of of cloud transport innovation amount huge and information evo IS and our shaping containers shipment development a collecting that app. We’re is our

We more even risk. reduce giving actionable data end on to courier are customers focused our and CGT partners

leading by on therapies. related companies. force the be validations platform CGT continue CGT to we courier shipping believe approved multiplying a the our will selected and additional evo defining app temperature network, by support companies cloud increasingly controlled as Based We that with class container

include up management, XXX XX wrap XXXX, for To for full new by XX XX and Systems. acquired Freezers, Sexton biopreservation service for media, XX chain Storage estimates Services, customers for solutions, cell Cryogenic for ULT year processing and Thaw XX cold in for evo line XX the for product Freezers, SciSafe

sold more X,XXX products. cell XXXX, and reach largest first to Additionally, our to XXX our distributors time more these in and stem unique media than illustrate of the our technologies shipped users, were than end products users of of they

chain and approving continued operations, on optimization, on things team size the Turning now to in is an first update and the supply scrap, a producing time. done at right work to Stirling, efficiency right plant with focus improve to focused our workforce our the margin on getting quality

We’re shipping an all-time at metrics our and high are level. quality from inventory

Now, to QX Troy for over the financials present back call and turn our to Troy? the full I’ll year XXXX.

of driven accounted media the revenue. versus you, for quarter the total million, Thank record total increase XXXX fourth XXXX. XX% X% a of XX% in for QX quarter increase totaled in a of in increase Total and XX% QX of XX% revenue organic Mike. biopreservation by a COVID-XX-related representing revenue $XX.X revenue of approximately over XXXX,

revenue the the revenue was same $XX.X revenue Processing Total million. Cell was in and same XX% Thaw Systems million, XXXX. and X% revenue platform XXXX. revenue over and was increased total in period Freezers up period over organic organic increased $XX.X platform XX%,

and XX% QX with total XX% platform Systems accounted platform the for in $X.X accounted same revenue revenue platform Storage and approximately XXXX. Storage of million COVID-XX-related COVID-XX-related and Storage approximately period the the XX% XXXX. Freezers versus Thaw growth in revenue was organic versus for Storage XX% XXXX. both over revenue revenue and in Services of Services QX X% of

XXXX COVID-XX-related with for XX% was XX%, XXXX. revenue revenue XX% was compared XXXX. increased Total and revenue approximately organic approximately full year $XXX.X X% the Total in million. increased revenue over

the of with of XXXX Adjusted fourth for compared XXXX. the quarter fourth gross margin for was XX% quarter XX%

gross margin compared adjusted was XXXX. with XX% XX% the year For of full XXXX, in

gross The operational of adjusted XXXX late XXXX grant increased impacted a to percentage over or stock $X was QX the X.X team, XXXX XXXX which revenue. points QX margin QX million by QX approximately

unfavorable associated inventory charges, COVID-XX-related our we decrease at product an and costs. of infrastructure decrease and a revenue customer mix line, in LNX addition, had In SciSafe freezer write-off without

in gross XXXX. XXXX We versus to expect margin adjusted improve

QX $XX.X for to million, million $XX.X XXXX related GAAP of which XXXX. versus Global operating $XX.X impairment acquisition an Cooling million expenses in QX intangible the were includes

capital to assets QX longer impairment intangible changes Cooling materials. The QX assumptions expected to spending the environment revenue as due non-cash in by and of updated estimates on macroeconomic in customer pressures from QX and the our Global primarily raw noted inflationary competitors our resulted current of than for some in in XXXX

the $XXX.X XXXX, the GAAP with impairments non-cash million, and full $XXX.X year related year compared of totaling were acquisition, QX XXXX to For includes expenses GAAP of of Cooling Global expenses million QX intangible operating million. full operating $XXX.X XXXX which in

compared million with $XX.X QX Adjusted XXXX. $XX.X XXXX for QX million, in operating were expenses

of year million, adjusted year Sexton. full XXXX, the XXXX operating acquisitions the due $XX.X XXXX. in For increased compared to operating and expenses expenses million adjusted with of $XX.X Cooling Full Global XXXX were

fourth accounting addition, compared loss our fourth loss In to for XXXX adjusted growth. of operating and and the costs headcount Adjusted million operating of operating in higher the quarter due with increased expenses in full XXXX. $XX.X year was QX of XXXX quarter to increased support $X.X million

of XXXX with with adjusted XXXX. $XX.X million year Adjusted full operating million in was XXXX million the adjusted totaled million XXXX. for quarter Our of for $XX.X of $X.X loss the for EBITDA positive operating compared of the loss fourth compared quarter fourth negative $X.X

For the XXXX. XXXX, EBITDA full year positive with of million, $X.X positive compared $X.X million in was adjusted

million, balance $XX.X September Our million XXXX. was December cash compared XXXX and securities with $XX.X at marketable XX, at XX,

XX% Now expected range to be we half XX% and press XXXX revenue of of XX%. reaffirming COVID-XX-related turning year XXXX the XX% in to revenue reflecting revenue January year of million to growth to which and to excluding release. XX% the in growth are our the $XXX X, is preliminary guidance, XX% Full of $XXX and our organic year-over-year half, first million from split revenue an in second year-over-year of expected the

Freezers XXXX platform XX% any to an the to increase to Cell COVID-XX-related following of growth XX%. guidance for XX% excluding of revenue revenue XX% year-over-year platform does platform include million, include million, Systems Processing expectations $XX.X XXXX, $XX and XXXX contributions, of million X% for Total $XX XXXX. COVID-XX-related million an to $XX revenue. XX% Thaw over over increase to Revenue not

and Services to an $XX.X $XX increase platform million of to XX% million, Storage over XXXX. X% Storage

XX%. related Excluding growth XX% year-over-year of COVID-XX to revenue,

Although the in in to provide XXXX does EBITDA line, margin XXXX. company not gross improvements compared and revenue adjusted we expect guidance the below

million XX.X diluted our basis. of March of and a had fully XXXX, terms count outstanding In issued on XX, XX.X an shares million shares as share we

I’d XXbX-X Next, about like talk plans. to

As you in may be paid in several lieu to stock of recall, salary XXXX. executives requested in

back personal outlook and business based sales in sales plans Some the QX in to These on and related XXbX-X executives plans can’t BioLife. changed planned upcoming with XXXX. be reasons of are XXXX not entered

position controller year. Lastly, and address Due be we to extension like our in corporate scope turnover for filing. this requirements XX-K entities Cooling to I’d Global in our and additional QX late Sexton, filing at SOX an will

of with us calendar to the XX an the We file still will be be extension timely. XX-K extension SEC, considered automatic which for our gives days filing from today and

file We extended the period. expect within to

call the to I’ll Now, Mike. turn

Thanks, Troy.

I’ll for XXXX. summarize our takeaways Now key

trusted a Solutions of and increase provider services reducing a critical, cell likelihood is can manufacturing, highly by gene BioLife to First, and valuable stores CGT built industry. developers and portfolio of that distribution success tools help We the risk workflows. their therapy the in solutions

portfolio in CGT we Number all services of shots the our two, strong for still and and of tools of classifying and demand let’s goal. we’re approvals on remember have that innings remain hundreds early bioproduction

continue We mix processing high to a to and margin by platforms. anchored cell revenue storage shift derive services recurring our

we and year. improvements this do so quality and in three, significant will chain made continue supply Number XXXX to

this will XX to the next in approved points adjusted candidates to space $XXX revenue, derive XXXX margin XXXX, and exit with to CGT processing our could achieve year. continue we expect confident that Turning points we embedded solutions gross our get aspirational year of up goals in that cell offerings million to additional of our XX in and of run EBITDA We rate margin. of remain XX adjusted financial adoption

turn I’ll the to back the call over operator. Now,

Thank Jacob with from Johnson question you. take our first We’ll [Operator Instructions] Stephens.

first Hey, maybe on Troy, everybody. good evening, just gross…

Jacob. Hey,

there. Hey, Mike. Good afternoon Hey.

us for sequentially. by appreciate that guide with I called XXXX. understanding Just the bridge you to you, but gross key Troy and XX% margin below like? on XQ or appreciate you to And of gross in items margin what the or help declines you realize look pull XXXX Thanks. for the margin you that? and Mike, XX% much could you maybe could just can help first could gross Can then levers how line, the achieve don’t kind that us out you the also I

much ULT use of take I’ll goals but things look three speak on and to the line, And aspirational about and improve Jacob. the revenue on the to for and view but top Jacob, about reduce a more better to bridge in that’s also the is products your are from margin our to last to a margin you significant want the those detail, speak improvements? about where we we And are ULT surely the Troy, levers service freezers. little again, will. meaningful term, Thanks, relates plant, opportunities waste, longer fairly based streams about XXXX, step year can it expect at as more new in chunk maybe term again, chain margin so to speak all related Troy are that really we productivity that to do new and the optimize to of meaningful. this as when more continue revenue, supply can

Yes.

mix we In what COVID higher year, more a of which to that, has on in than had dropping at utilization, half gross throughout SciSafe scrap, again, margin the SciSafe impact then, remarks product unfavorable the that an said, and of light too, first addition the second the the the revenue I higher be LNX In expect had overall And facilities to off gross at margin. we Mike on year expect impact expansion expected our the mentioned we versus pretty my big in half. as margin. our too, line weighted

I media, to key lines? for as allogeneic freezers. How an But specifically, allogeneic think therapy Got Okay. you on your big Thanks across does autologous maybe I growth those and offerings I for about obviously, follow-up, some the forward. highlighting of therapies a and this, industry. And I may opportunity just but about for that. opportunity an guess, don’t compare of Mike, kind the forgot then, for kind of I’m it. kind maybe the going – my levers just allogeneic remember curious evo that’s like of we

be allogeneic unrelated Super all Thanks, the out significant donor biology It Yes. in can will infrastructure an administered firmly predominant flushed eventual that therapies the shift be Jacob. the question. will to as production system. support be we that gets there more understood. to And is relative and massive doses believe to recipients of to

meaningful. So think an that to we catalyst be is certainly for lever going a that’s upside and us

approval in good listeners crystal we that’s ball, the Nobody And as that but a remind happen. cell what so I’ll cell developers going we’re best mentioned skyrocket we heard are at names timeframe, current our then support so manufactured those again, leading number dose lever global of for are at us autologous count right. there, really And those, get the in allogeneic to today. some goal some going just you’ve least meaningful production a far to going when as therapy the of involved and going to those continue see therapies the we relative have of to to on has the to some shots customers. point, we’re total And and combined number is that

the Got it. Mike. Thanks taking questions, for

Thank you, Jacob.

our with next Zhi B. take We’ll question from Yuan Riley.

Good Thank questions. Maybe you Mike Jacob’s on afternoon, follow-up our and for taking Troy. question. one

we how improvement can the some that in by XXXX you color Just will improvements it per XX% very quarter? Thank So XX% mean year-end average adjusted you. points should achieve additional another two Does be of path understand XXXX? margin helpful. and

Yes. encourage from okay. happen, thinking four apiece. annualize give the points down quarterly just obviously some of services. linearize that large will try revenue Yuan. the improvement be of guidance new that’s that to people new we not discourage would two And we products it step but and internally don’t here, in on people changes we Good we’re of into terms those when And and about question, it new not based break streams, That’s because to things going trying so margin to would to then chunks way

you the XQ And of Got chart acquisition it. XXXX. putting new the customer growth in out then XXXX Yes. for thank for your

growth new of to acquisition from your to existing demand versus hear, customers want customers? XXXX do growing Just you attribute

good Yuan. Yes, question,

So fixed existing that growth more as weighted book that is of out overhead amongst that toward customers, revenue with that. supports spread

There but seeds of planted, until they’re not early that meaningful they development. to get their customers new So years those stages being later are are great. in

we to get our nurturing of and ball revenue from sell existing most obviously taking their with commercialized. all existing can those comes customers the while are off eye the to the to own to obviously year the doing to which next going be customers therapies So not as it nascent deeper we’re line of are more those meaningful the customers, make across they grow of in and tomorrow up some customers goal

last And it. one from question Got Yes. us.

you seen their to each launch of year providers Does have product. CAR-T XXXX may how revenue. would post want chain different understand to their to have exposure & impact different Johnson As hear XXXX supply full revenue, the your two – Legend and and XQ Johnson therapy product UK service CAR-T gene stress, due and cell this

of we forecasts. only course, from in impacted be Of a XQ few are might so terms away days XQ, less

Yes, that Legend going just basis. out. Yuan. we revenue customers it’s question, But I year’s I’ll leave to will a particular okay. that turn fair how speak not just view I’ll and Johnson, impacting on that say generally of news this from But our at don’t that, about say it

taking Thanks our Yes. for questions.

from We’ll Cowen. Masucci TD with take next our question Max

is for Thanks year. a on this questions taking congrats great Hi, my Max. for and Stephanie on

So starting off…

Hi Stephanie. Thank you.

course. of Yes,

you performance and expectations for quarter in starting affect QX last and are your XXXX? in the chain So both constraints freezers what segment. these How some segments chain much constraints processing constraints in off your supply did supply cell indicated

Yes.

in we hopefully made several bag first. in side scrap supplier last processing company, been as bag certified some cell significant row a particularly part the improvements now. media reduce the is new the also free. which itself We experiencing class not sourcing a for on I but last the currently for is in think freezers, will supplier tanks I’ll have but bag particulate the that we’ve quarters The world a answer

completely own to in robust supplier’s having inspection throw the And amount a is internal we’re because so of away and obviously bags rigid despite do that. about have particulates best fair And our efforts. they them,

certainly then will already the line, we But there’s gross it’s had line in think in a Troy there’s impact within – far margin quarter, coming as self-processing scrap had some evil mentioned freezer and the well. talking was some QX, high improving or whether we online as the some new margin scrap we certainly that’s line as in scrap the that about reducing then in scrap in supplier have had bags And itself. meaningful

XXXX. then upside guided growth cell Got XXXX, it. you decent to the helpful a compares to baked sources to can in processing XX% XX% of for amount there that for in XX% any potential grow color. there the are highlight year? That’s and Is here And year-over-year, revenues conservatism you which of you saw

indeed, Yes, an That’s appreciate we side. you on our noticing And conservative nature. by are question that. yes anticipated

some to that say meet surprises could and and specific regard. Our not just goal would in and but about I’ll speak have is or not generally upside beat to, speak slightly customers we bad be there that

close attention a obviously year We’re forecasts inventory customers paying got make the eye plenty keeping really procurement them. on, sure of year of and approvals to really their teams care take we’ve working and good this next for with five that and to to the five and anticipated those

it. That’s one just Never more. Got squeeze could in helpful.

a higher be taking high margin catalyst to the monitor recurring for in You’ve steps revenues you’re are looking that goal and progress? increase we to indicated – so what previously of to that XXXX. should revenue margin revenues reach What your XX% you recurring stream total

good Yes, question.

becoming be driven additional novo from growth then that self-processing customers and at then obviously time. we’ve the the some and that and stage it high and in got we’ll those late service now, or services for disposable approved customers there, we’re are recurring tell products of it’s about in fire between XX development right will relates that and de competitive until revenue that to lot other hold now it the points want. And to also current have now. at what it’s contributors. call so into product getting And So, margin to of everybody already kicking XX% but But reasons, call consumable, percentage a of details, non-instrument you accessories love we XX and just get to as of some lines meaningful this the from them new and and we’ll improvement obviously

Thanks it. my taking for questions. Got again

welcome. You’re

We’ll from Flaten Thomas take our next Street. with question Lake

the you appreciate I guys. Hey questions. taking

kind anticipate any exiting revenues. Do XXXX, of As significant being the you from look, curious distributed the there we shift the you’re Mike, about distribution of I’m as revenues are today? geographic way

really Thomas. good Yes, question,

yes now, that So would to for meaningful Asia much Pacific relatively would is contribution Yes. where say look a speaking. it I we compared more from

And it’s the talk you to can a business over to shift little bit or about, of that Asia? what parts contribute will maybe all

just then and and fluent about make got and modest to productive in network our number I’ll from channels, the speak the to a efforts we’ve And on right, most a technically distributors lot APAC sure productive, of that to compared of rationalize sales perspective, in most most our about street carrying have distributors very solutions. mostly direct distributors. feet indirect we of of what a terms the today

on. the focused stuff that’s we’re So

a us? And one freezer which customers particular bit little Is there curious it’s it. just characterize if media buying from or you freezers for it customers media? quick direction could Got cross-selling meaningful? that a buying then cross-selling. maybe on one Is most just I’m been has

place platform. film media affinity Well, the it’s the is kind obvious try. hands because call biopreservation today’s that benefit because of them and can processing, walk their a storage that a [ph] and in Sexton those or delayed, the parts capital for our to just where would freezers freezers as between in well, facilities with services same our machines are highest within then being point equipment okay, up offer prospect to opportunities in and call same to it’s me we the I exact opposed those their your if to we material of draw store the maker, the order the environment two that conversation give saying, is I’ll freed and decision away Yes, with vials freezers. and customer caskets some and parallels have having our some can for the to biological hat the between our you And now cell media one and based projects amongst influencer

one another focused So that’s that we’re on. really

questions. taking Thank Got Appreciate you the you. it.

Thomas. Thank you,

[Operator the to Instructions] any questions. turn like All right. over Mike or back Rice further And for call I there to additional closing no would are comments.

Thanks everyone forward BioLife. to week Day for of interest in Boston. have you night. seeing next great Lisa. again Investor and at you your you, a our Thank many we look evening Analyst hope Good in We

And that for and conclude now may does today’s your you presentation. disconnect. Thank you participation