BioLife Solutions Inc. Q1 2023 Earnings Call

Speaker 1: to welcome everyone to the Q1 2023 BioLife Solutions Inc. earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during the Q&A session, simply press star then the number one on your telephone keypad.

Speaker 2: With me on today's call is Mike Rice, Chairman and Chief Executive Officer.

Speaker 2: Earlier today, we issued a press release announcing our financial results and operational highlights for the first quarter of 2023, which is available at BiolifeSolutions.com.

Speaker 2: As a reminder, during this call we will make certain projections and other forward-looking statements regarding future events or the future financial performance of the company.

Speaker 2: These statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations.

Speaker 2: For a detailed discussion of the risks and uncertainties that affect the company's business and that qualifies forward-looking statements, I refer you to our periodic reports and other public filings filed with the SEC.

Speaker 2: Company projections and forward-looking statements are based on factors that are subject to change, and therefore these statements speak only as of the date they are made.

Speaker 2: The company assumes no obligation to update any projections or forward-looking statements except as required by law.

Speaker 2: During this call, we will speak to non-GAP for adjusted results. Reconciliation of GAP to non-GAP for adjusted financial metrics are included in the press release we issued this afternoon. These non-GAP for adjusted financial metrics should not be viewed as an alternative to GAP. Reconciliation of GAP for adjusted financial metrics are included in the press release we issued this afternoon.

Speaker 2: However, in light of our historic M&A activity, we believe that the use of non-GAP or adjustment metrics provide investors with a clear view of our current financial results when compared to prior periods.

Speaker 2: Now, I'd like to turn the call over to Mike Rice, Chairman and CEO of Biolife Solutions. Thank you, Troy.

Speaker 3: I'd like to begin our call by discussing our announcement today, that we are actively exploring strategic alternatives for our sterling ULT and custom biogenic systems, cryogenic freezer businesses, which could include out licensing our proprietary IP.

Speaker 3: changing our go-to-market approach and outright divest in these assets. As you know, we had I expectations for the benefits of scale the acquisitions could bring to my life and for the potential to cross sell our core high margin by our preservation media solutions with CBS and sterling differentiated freezers.

Speaker 3: We built by our life organically and inorganically with acquisitions like Sterling and CBS .

Speaker 3: And while we certainly realize many benefits of scale, after much analysis and consultation with external advisors, we've now come to a decision to explore our options for these businesses.

Speaker 3: The capital intensity in a lower margin, volatile sales cycle business has not been beneficial to our core growth rate and corporate profitability and has not placed us in the peer group where we belong. With the global supply chain negative impact still ongoing and the volatile market dynamics has aggressors remain on to cities front.

Speaker 3: The expected merits of these two acquisitions have failed to materialize to the extent we expected. I take my job responsibility to create shareholder value very seriously, and I'm supportive of the board and our leadership teams collect the decision to explore a course change. To support these explorations, we've engaged a strategic advisory firm to manage outreach to and inbound inquiries from new leadership firms devam on

Speaker 3: parties interested in licensing our IP and or acquiring these businesses. To be clear, our strategic decision is to explore options, one of which is to potentially put our innovative CBS and Sterling businesses in the hands of other parties that can better leverage their operations, supply chain, and cost structure to maximize their business model.

Speaker 3: If divesting is ultimately the best option, and we complete both, we will have returned BioLife to a higher multiple peer group with a portfolio of leading high-margin, high-growth, recurring revenue products and services that are class-defining.

Speaker 3: We believe any potential divestitures will preserve and enhance the synergies among our biopreservation media products, sext and self-processing tools, EVO cold chain management service, and SciSafe biologic storage services.

Speaker 3: This potential portfolio optimization will help us to return to an enhanced gross and EBITDA margin company with industry leading growth.

Speaker 3: It will also importantly and significantly reduce working capital cash burn, providing more flexibility to invest in and build upon our potent complimentary offering where everything fits. It's clear when we look at these assets on a go-forward basis that our exploration of cheated alternatives is the right decision at the right time.

Speaker 3: for the right reasons for the company and for shareholders. We recognize that it's frustrating when strategy and tax expel to produce anticipated results. But as business people, we work for you, the shareholders, and we must be thoughtful and decisive.

Speaker 3: In our view, looking at the key financial metrics, we've built an incredibly powerful company. Going forward, acquiring additional high margin, recurring revenue businesses still make strategic and economic sense, and our learnings from these two deals will be applied in the future so that we focus only on high margin, high growth businesses that can deliver at a correct return revenue.

Speaker 3: To conclude, I'd like to acknowledge the sustained improvement efforts of our leadership team, middle management, and line workers at CBS and Sterling, who have put these assets in the best shape ever from the perspectives of quality, operations, supply chain, financial accounting, CRM, HR systems, and sales and marketing.

Speaker 3: The R&D activities have been focused and well managed through a rigorous stage gate review and approval process.

Speaker 3: Without this work, we would not be in a strong position to explore strategic alternatives. We appreciate and recognize it, operating through a potential divestiture process. It leads to uncertainty for our team members and customers, and I'm proud and grateful for their dedication and support.

Speaker 3: Our team can count on us to retain talent and reward loyalty and results. Our customers can count on us to continue to produce and deliver high quality products.

Speaker 3: Now let's switch back to discussing our Q1 performance. The team continue to gain new CGT and biopharmacustomers.

Speaker 3: Driving continued adoption of our self-processing and stores and storage services platforms.

Speaker 3: While our freezer platform experienced similar disruptions that others reported in recent quarters.

Speaker 3: Turning to Q1 revenue and customer highlights, total revenue was $37.7 million, representing a 4% increase over Q1 2022, excluding COVID-related revenue from Q1 last year. Total revenue growth was 16%, driven by a 28% increase in biopreservation media revenue.

Speaker 3: In Q1, we sold and shipped products or provided services to 197 new unique customer sites across our three products and services platforms.

Speaker 3: A large portion of our total revenue continues to come from existing customers as we penetrate deeper and pitch our integrated solutions to take more share of their spend for manufacturing storage and distribution products and services.

Speaker 3: In each of the last five quarters, we gained over 150 new customer sites, building a phenomenal pipeline of early stage users that we will carefully nurture and support to drive future growth.

Speaker 3: New Q1 customer sites by Product and Service Line included nine more now using by Preservation Media, five new Fostar users, 17 new EVO, Coltschain and users, 15 new crowd genic freezer and accessory customer sites, 121 new Sterling UL2 freezer and accessory customer sites,

Speaker 3: 22 new bio storage customers and eight new cell processing customers now using sexton products. For our cell processing platformer Q1, we receive confirmation that our solutions will be used in at least 20 additional clinical trials for new cell hygiene therapies.

Speaker 3: We estimate that our by-preservation media products have been used in or are planned to be used in over 630 customer clinical applications, and our sext-in-cell processing tools are in about 140.

Speaker 3: For both our preservation media and sextant products, we also remain confident that each customer clinical application, if approved, could generate annual revenue in a range of 500,000 to 2 million.

Speaker 3: To date, our self-processing solutions are used in 14 approved therapies, including the recently approved Omasurge by Gimita Cell.

Speaker 3: relations play in reducing risk for CGT companies.

Speaker 3: I'll reiterate the five strong catalysts we expect to support our growth estimates, since each will increase the number of manufactured doses and hence the demand for our preservation media, section cell processing solutions, EVO cold chain rentals, and size safe storage services. Number one, new DNOVO CGT approvals.

Speaker 3: two, approvals of existing commercial therapies in new geographies, three, approvals of existing commercial therapies in new indications, four, approvals of existing commercial therapies as first or second line treatment, and five, the eventual shift to allergenic therapies.

Speaker 3: Turning to our storage and storage services platform, which includes EVO, cold chain rentals and size-safe storage services, began 39 new customer sites in Q1, 22 for biologic storage services, and 17 for EVO. On the size-safe side of the platform, we also continue to penetrate further in existing customers.

Speaker 3: and have a very strong pipeline of high value, long-term contract opportunities, and we expect another banner year for size-safe.

Speaker 3: On the evil coal chain management side of the platform, we continue to drive the business as evidenced by 135 percent increase in quarterly shipments.

Speaker 3: On the evil coal chain management side of the platform, we continue to drive the business as evidenced by 135 percent increase in quarterly shipments, specifically of approved self-therapy products.

Speaker 3: As we reported before, evaluations and validation shipments by leading CGT companies are ongoing, and we expect continued adoption. One global pharma company has confirmed that upon a completed successful validation, they intend to switch up to 100% of both of their approved cell therapy shipments.

Speaker 3: from the leading provider over to our EVO platform early next year. This is excellent market validation. As internally, we modestly model a 50-50 split of shipments between EVO and the incumbent.

Speaker 3: And finally, our freezes and thought systems platform. We ship first time orders to 141 new customer sites, including 121 now using sterling products.

Speaker 3: Customers continue to recognize the value proposition of our freezer offerings based on tight temperature regulation, reduce power consumption, reduce heat generation, and less noise pollution as these support their goals of reducing the negative environmental impact of their operations.

Speaker 3: Q1 revenue was lumpy and off-pace due to the now well-understood tightening biotech capital equipment funding and delayed purchase decisions due to economic uncertainty. On a positive note, we have a strong opportunity pipeline of potential sterling freezer orders for our passive to close this year.

Speaker 2: Now I'll turn the call back over to Troy to present our financials for Q1. Troy? Thank you, Mike. Total revenue for the first quarter of 2023 was 37.7 million, representing a 4% increase over Q1 of 2022, and excluding COVID-related revenue from Q1 2022.

Speaker 2: growth was 16%, which was driven by a 28% increase in biopreservation media revenue.

Speaker 2: There was no COVID-related revenue in Q1 2023 compared to 10% of total revenue in Q1 2022. Cell processing platform revenue was 19 million up 27% over the same period in 2022.

Speaker 2: Storage and storage services platform revenue was 5.7 million, down 5% over the same period in 2022.

Speaker 2: Excluding COVID-related revenue from Q1 2022, revenue in Q1 2023 increased 98%.

Speaker 2: Freezers and Thaw Systems Platform Revenue was 13 million down 15% over the same period in 2022.

Speaker 2: excluding COVID-19-related revenue from Q1, 2022, revenue and Q1, 2023, decreased 12%.

Speaker 2: Adjusted gross margin for the first quarter of 2023 was 37%, compared with 33% for the first quarter of 2022 and 32% for the fourth quarter of 2022. The positive impact, sequentially, and compared to prior year.

Speaker 2: was primarily due to product mix and lower inventory write-off charges.

Speaker 2: Partially offset by lower gross margins at size-safe due to the decrease in COVID-related revenue without an associated decrease of infrastructure costs.

Speaker 2: GAP operating expenses for Q1 2023 were 51.3 million versus 44.2 million in Q1 2022. Adjusted operating expenses for Q1 2023 total of 25.5 million compared with 20.1 million in Q1 2022.

Speaker 2: The increase in operating expenses was primarily driven by increased head count, consulting fees, and infrastructure costs to support a long-term growth objectives.

Speaker 2: Our adjusted operating loss for the first quarter of 2023 was 11.4 million compared with 8.3 million in Q1 2022. Adjusted EBITDA for the first quarter of 2023 was negative 1.9 million compared with negative 1.1 million for the first quarter of 2022.

Speaker 2: In Q1, 2023, we had non-recurring expenses of approximately $3 million, consisting of strategic consulting fees, a planned severance payment for our former COO, indirect taxes, and a discrete bad debt write-off. Excluding these non-curring expenses,

Speaker 2: adjusted EBITDA would have been positive 1.1 million. We expected just the EBITDA improvement throughout the year, resulting in four full year 2023 positive adjusted EBITDA. Our cash and marketable securities balance at March 31, 2023 was 56.9 million compared with 64.1 million at December 31, 2022. Taking into consideration our adjusted EBITDA of negative 1.9 million.

Speaker 2: Cash use in Q1 2023 was primarily related to unfavorable working capital adjustments of 840,000 largely due to the timing of raw material deliveries related to bio-preservation media, capital expenditures of 3.3 million, and purchases of assets held per rent of 1 million.

Speaker 2: Turning to 2023 revenue guidance, management is reaffirming full year guidance is expected to be in the range of $188 million to $202 million, reflecting year-over-year and organic growth of 16% to 25%, excluding COVID-related revenue year-over-year growth of 26% to 35%. Revenue guidance for 2023 does not include any COVID-related revenue.

Speaker 2: Total revenue expectations for 2023 include the following platform contributions.

Speaker 2: Total revenue expectations for 2023 include the following platform contributions. Cell processing platform.

Speaker 2: 89 to 93 million, an increase of 30 to 35% over 2022, storage and storage services platform, 26.5 million to 30 million, an increase of 0% to 13% over 2022, excluding co-related revenue, year-over growth of 64% to 86%.

Speaker 2: Freezers and thought systems platform, 72.5 million to 79 million, an increase of 9% to 18% over 2022. It's quoting COVID-19 related revenue year over year growth of 13% to 23%. Finally, in terms of our share count, as of May 10th, we had 43.5 million shares issued enough standing.

Speaker 2: and 46.3 million shares on a fully diluted basis.

Speaker 2: Now I'll turn the call to Mike. Thanks Troy.

Speaker 3: I'd like to summarize four key takeaways from Q1 and today's call. First,

Speaker 3: Wildlife Solutions is a critical, highly trusted tools and services provider to the saline gene therapy industry. We've built a valuable portfolio of solutions that help CDT developers increase their likelihood of success by reducing risk in their manufacturing, storage, and distribution workflows. Number two,

Speaker 3: Demand for our portfolio of class-defining and buyer production tools and services remains strong. It's important to remember that we're still in the early phase of CGT approvals and the growth of the exciting industry. We are very well entrenched in intense and securing and maintaining a position as a premier enabling CGT tools and services provider. Number three, artisans to explore strategic alternatives for our two freezer businesses. We are very well entrenched in intense and securing and maintaining a position as a premier.

Speaker 3: as we made carefully after much analysis and consultation with our board and external advisors.

Speaker 3: We're keenly focused on options to reposition our portfolio only on the high margin high growth recurring revenue streams that define us

Speaker 3: and number four, order volume to date so far in Q2 is strong across our portfolio. For the rest of 2023, we will focus on running the business efficiently and managing the exploration of strategic alternatives for our freezer businesses.

Speaker 1: Now I'll turn the call back over to the operator to take your questions, Mallard. At this time I would like to remind everyone in order to ask a question, press star 1 with your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from Jacob Johnson with Stevens. Hey, Mike and Troy. Good afternoon.

Speaker 4: thoughts on the timeline around that.

Speaker 3: Yeah, thanks, Jacob. Well, I want to be really clear that it's not a foregone conclusion that divesting is the only thing we're looking at or the only outcome that could materialize. We have a number of things we're looking at and it's still pretty early, but we've got a great advisory firm helping us navigate this and for us, it's just early and we're all about, you know, obviously picking the best option that creates the most shareholder value. Bye bye.

Speaker 4: Too soon to tell you a trace of a timeline so it could win something might happen. Yeah, fair enough. Thanks Mike. And then maybe the other question just around that. Given the press release, you've reiterated that the 250 million Arab and the 50% gross margin, 30% of the EBITDA targets. Obviously, if you were to dive out the freezer business, that would be a chunk of.

Speaker 3: If we were to invest one or both, we'd have to issue some updated, not only guidance, but also submit to long-term financial aspirations of goals, which we would do once we had a clearer vision of how things would shake out. To the last comment that you made, to the extent that freezers are weighing down the profitability, it is material. I mean, I'll just say that with full potency. It's a material way down.

Speaker 4: relative to the other parts of the business. Okay, and then Mike, maybe it's last question. You know, some other companies have reported this early season. Obviously, the macro has been ahead when you talked about that with regards to freezers. But is it pertains to China? I think that's an area where maybe...

Speaker 4: You saw some traction from on the distributor side of things. Have you seen anything from your distributors that would suggest any weakness out of China? Is it maybe related to the media business? Not at all yet. In fact, if I just think about the last...

Speaker 4: from the distributor side of things. Have you seen anything from your distributors that suggest any weakness out of China as it may be related to the media business? Not at all yet. In fact, if I just think about the last, I don't know, a couple of...

Speaker 3: clinical support engagements that Dr. Matthew R. C. S. O. is involved in. They are from China. And so I don't have any read-throughs from Marcus or the sales team that the indirect sales in that part of the world and A.P. are soft sequentially or year-to-year, so no to the contrary.

Speaker 2: Got it. Thanks for saying the questions. Thanks Jacob. Thanks for the question. Comes from Thomas Flatten with Lake Street Capital Markets. Thank you. Good afternoon guys. I appreciate you taking the questions. I'm thinking with the concept of the macro, given the softness in freezer sales in the first quarter, just wanted to get, or maybe you can help us contextualize.

Speaker 3: that just to expand a little bit of comment I made on my prepared remarks that when we look at the pipeline of mostly ULT freezers that are classified as high confidence to close this year it's a significant number I mean it's a big big number it's much bigger than I thought

Speaker 3: And that's not all the opportunities. Those are just the ones that have made it to the stage where it's considered high confidence to close. And we're not even halfway done through the year. So on the basis of that with one soft quarter, it would not have been prudent for us to cut the guide in the freezes and enhance the overall guide. So as we stand here right now in this call in May 10th, I'm confident we're going to hit that number. And we're going to come into the range of the total revenue. But yeah, if...

Speaker 3: Not for the latter, if that not had materialized, we'd probably be having a different conversation. Got it. And I don't know how much you can say about the large form of customer that you guys highlighted in the press release. But I'm curious maybe you could walk us through kind of some of the, I guess the winds you had, I'm sure there was more than one factor that allowed them to flip.

Speaker 3: went through a couple years ago with the other leading CGT company with a couple of fruit therapies, but yeah, this one is pretty intense and we're at the right place in the organization in terms of the decision-makers on their side. And we've got, as you can imagine, an army of folks on our side who are meeting with this customer not weekly, but almost.

Speaker 3: And there's a project plan that's being marched against in a series of go-no-go sort of eval validation steps But when pressed specifically And I asked our team hey if this does go well in our way What would you what would we expect in terms of the split of shipments and the direct feedback from the customer was up to 100%

Speaker 3: which is much higher than we anticipate, as I mentioned a few minutes ago, we just, we model 50-50, is sort of a modest assumption, but if this goes, that's going to be very meaningful for us, and now obviously very meaningful for the incumbent in terms of the impact on them.

Speaker 2: Got it. And then one quick final one for me. Now that you're, and I think you said 14 approved cell and gene therapies now that you guys are involved with, has that allowed you to validate the revenue range of the 500 to 2 million that we've talked about for a few years? Any suggestion that that might not be the right range of revenues for commercial products?

Speaker 3: Well, appreciate you asking. I still think it's probably a little low on the high end, but it's still early because again, the ones we're in, they're really, with a couple of exceptions, they're pretty recently approved. So we just need a few quarters of their track record to see what's going to happen.

Speaker 2: Great, appreciate taking the questions. Thank you.

Speaker 5: Thank you, Thomas.

Speaker 1: Our next question comes from Chad Wotrowski with TD Cohen. Hi, guys. Thanks for the question. Jeff, one on OpEx. How do we think about OpEx sort of the cadence throughout the rest of the year and maybe how the strategic alternatives of...

Speaker 2: the freezer business could impact that. Yeah, so as far as OpEx for the rest of the year, I did mention some non-recurring charges in Q1. If you were to back those out and then grow it, not quite in line with the revenue growth, but again growing to support our revenue growth, that's a good way to look at the OpEx.

Speaker 6: and then it's y'all is stuck

Speaker 7: Go ahead. Yep. Just on the macro headwinds, again, obviously seeing sort of the capex issues from biotech and pharma. But on the R&D side, are you seeing any delays in clinical trial timelines or potential headwinds on that front?

Speaker 3: You know, fair question, Chattano. And I can't speak specifically to it, but I would certainly support that we are seeing some of that. But the thing to remember is, in the early stages, these aren't meaningful revenue contributors, so it's just not really an impact. They don't buy that much in the early days, because the trial and enrollment is pretty small, right? Thank you.

Speaker 5: Thanks for the questions, appreciate it. You're welcome.

Speaker 1: Your next question comes from Paul Knight with Q. Mark. Paul, go ahead with your question.

Speaker 3: Hey Mike, hey Troy, how are you? Hey Paul, good to hear you. Now I know with Sterling and CBS , one of the intentions was to create some cross-selling synergy. What are your thoughts now? Are you changing, will you change the way the...

Speaker 3: sell processing platform products and the services products are sold. So what do you plan to do on any channel marketing modifications? That's my first question.

Speaker 3: Good place to start, Paul. Yeah, well I think what we've learned, one of the key learning takeaways is that, despite our deep contacts in the C-suite in that there are different decision makers, folks who buy capital equipment, particularly downstream to the folks that we're closer to, which are in the processing upstream side of the house. And our assumption was that we could leverage those relationships, but the...

Speaker 3: My sense is now just to be practical about it. Freezers are seen maybe inappropriately, but they're large of seen as commodities. And then those are sort of relegated in the domain of the procurement people as opposed to technical buyers or scientific buyers. And that just kind of is what it is. So with respect to what we do to change it, well, we really have to think about the current distributors, how productive they are, where are their strengths, where do they lie?

Speaker 3: services side seem to have exceeded your expectations here over the last couple of years. Can you talk to Sexton and the potential there, specifically per therapy again? And what's the magic sauce at services? Yeah, sure. Well, with Sexton,

Speaker 3: therapy is just like it is for biopreservation media. It's a half a million to two million dollars each annually and we're in about a hundred and forty customer clinical applications with Sexton and in three approved therapies already. So that just fits perfectly, it really does and I just got a text from Sean Werner, Dr. Werner who was running Sexton

you know, works for AB and he's the CTO of that platform. We've just got a great piece of good news from a large current customer about how they're going to greatly exceed their forecast for this year. So it just could not have come in a better time and again, section's going to have a banner year of all things hold really, really strong. As far as the secret sauce, well, the cell C of Ireland is for priority design and has its own unique benefits.

ease of use and filling and the proprietary vent. And it just really lends itself for small volume doses where you have a great alternative versus putting a little bit of fluid in a big bag and everything that goes wrong with that or could go wrong with that. On the HPL media side at Sexton, there are some quality and scientific differentiation relative to the other HPL products that are out there.

that degree of automation. And I think just to put the bar on the whole Sextant thing, you've heard us talk about tooling up or starting up a media manufacturing line in India at Sextant for our non-core, current BAPA-produced media products, and that's going really well. And all in all, just the whole team at Sextant is the perfect fit.

can't say enough good about how that one's really worked out. Okay, and will a sterile bio be part of freeze and thaw? Yes, but not to the vest, or potentially the vest. No, thaw stays with us regardless. Yeah, thaw stays with us. Okay, thanks Mike.

Your final question cuts from Janze with B. Riley. Good afternoon. Thank you for taking our questions. Mike and I are going to try it. Hi guys. Can you guys clarify what was the internal guidance on media, freezer and other being news settlements?

and can you elaborate on what are the factors causing the difference between reporting number and prior guidance or internal guidance in terms of what both revenue and growth margin.

Sorry, you're just to clarify. Are you asking me to tell you what our internal plan was for that platform? Internal guidance for media, freezer, and other business segments. Thanks.

by platform which you've seen which Torrey reiterated on the call just a few minutes ago and as it relates to the shortfall in freezer revenue that's all the factors we've been talking about. There is this macro very well understood now well appreciated slowdown in biotech funding hitting capital equipment much harder than disposable or recurring revenue streams and that

in concert with just the general global economic uncertainty is causing these large global farmer companies to really take a look at and in many cases pause their purchases for large capex pieces of gear. Those two things alone, it's clearly how we speak to that missed their own freezes and Q1. But I have to say, as I did a few minutes ago, on balance, the opportunity pipeline that we have for freezers for the rest of the year, the high confidence deals, it's a big number. And if that materializes and then we sort of...

kind of replicate that for the last six months of the year, then we're going to be in good shape. Got it. Thanks for that clarification. And assuming you guys continue to keep freezer business at the moment, are you still on track to reach 50% adjusted gross margin? And can you clarify which factor had an effect on the market?

in the last quarter and what is the growth margin in one queue without freezer business. Yeah, we don't do that kind of modeling externally. You want to clearly, we know that, but we speak to revenue and we on a platform basis and then we speak to the midterm aspirational goals. So I think I would just, um,

I would constrain remarks to what I just said about the downturn in capital equipment funding coupled with the economic uncertainty that's causing some orders to get delayed. Now with respect to our confidence to hit our midterm aspirational goals, well so far as we sit here with just one quarter in the books, yes, but as I mentioned earlier, if we do go down the path and actually consummate the divestiture of one of both of these businesses, then obviously we're going to remodel internally and remodel guides externally and reach

high-growth, high-margin segments as you had done very successfully prior to the Sterling acquisition. Thanks. Yeah, thanks, Karl. Hello, and a really good question. You're getting to sort of a key dynamic going on here. First of all, I'd say, again, just to remind everybody, the vesting is the only option. It's one of several.

But if we were to go down that road and complete those from a management bandwidth free up perspective, you got it full stop. We would be, we would be much less encumbered and we'd be focusing on, you know, external acquisition targets. I was the internal already that's going on. The products that fit would be preserved, but we would certainly have more bandwidth.

to go look for other things that look like the way we are now and what we're traditionally really, really good at and what we really understand. So, sure, you bet. Excellent. Thanks so much. You're welcome, Carl. We have no further questions at this time. I would now like to turn the call back over to Mike Rice, Chief Executive Officer, for closing remarks.

things that look like the way we are now and what we're traditionally really, really good at and what we really understand. So sure, you bet. That's one. Thanks so much. We're welcome, Carl. We have no further questions at this time. I would now like to turn the call back over to Mike Rice, Chief Executive Officer for closing remarks. Thanks, Mallory. Thank you.

I want to thank everyone for your interest in BioLife and your support and we do look forward to sharing our Q2 numbers and our results with you. Good evening. This concludes today's conference call. Thank you for joining. You may now disconnect.

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