Q2 2023 BioLife Solutions Inc Earnings Call

Good afternoon, ladies and gentlemen, and thank you for standing by.

Speaker 1: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions second quarter, 2023 shareholders and analyst conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. I will now turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions.

Welcome to the Biolife solutions second quarter, 2023 shareholders.

And analyst Conference call.

This time, all participants are in a listen only mode.

The speaker's presentation, there will be a question and answer session I will now turn the call over Detroit Westerman, Chief Financial Officer.

A lot of solutions.

Speaker 2: Thank you, Sabi. Good afternoon, everyone, and thank you for joining us. With me on today's call is Mike Rice, Chairman and Chief Executive Officer.

Thank you Savi good afternoon, everyone and thank you for joining US with me on today's call as Mike <unk>, Chairman and Chief Executive Officer.

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

Earlier today, we issued a press release announcing our financial results and operational highlights for the second quarter of 2023, which is available at Biolife solutions dotcom.

As a reminder, during this call we will make forward looking statements.

Speaker 2: As a reminder, during this call, we will make forward-looking statements.

Speaker 2: These statements are subject to risks and uncertainties that can be found in our SEC file.

These statements are subject to risks and uncertainties that can be found in our SEC filings.

These statements speak only as of the date, given and we undertake no obligation to update them.

Speaker 2: These statements speak only as of the date given and we undertake no obligation to update.

During this call we will speak to non-GAAP or adjusted results reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release, we issued this afternoon.

Speaker 2: During this call, we will speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon.

Speaker 2: Now, I'd like to turn the call over to Mike Rice, Chairman and CEO of Biola.

Now I'd like to turn the call over to Mike Rice, Chairman and CEO of BIOLASE.

Okay.

Speaker 3: Thanks, Troy. Thanks, everyone, for joining our call. We have several updates to report and discuss in the near term, but our business fundamentals and mid to long term growth rates remain intact, and we remain confident in our end market.

Thanks, Troy and thanks, everyone for joining our call we have several updates to report and discuss in the near term, but our business fundamentals and mid to long term growth rates remain intact, and we remain confident in our end markets.

Speaker 3: Our consumables portfolio includes critical inputs for cell and gene therapy viral production.

Our consumables portfolio includes critical inputs for cell and gene therapy borrow production in.

Speaker 3: And these high margin solutions, so that the customers with whom we have very sticky relationships, can create enduring shareholder value.

And these high margin solutions, so what the customers with whom we have very sticky relationships can create enduring shareholder value.

Speaker 3: I'll let Troy speak to the numbers, but on a high level, the macro headwinds and the global economic uncertainty now being experienced across the bioprocessing industry have not just constrained biotech funding and capital equipment purchases, freezers in our world, but also more recently led to a noticeable de-stocking and temporary slowdown in demand for our self-processing consumables.

I'll, let troy speak to the numbers, but on a high level the macro headwinds in the global economic uncertainty now being experienced across the bio processing industry have not just constrained biotech funding and capital equipment purchases freezers in our world, but also more recently led to a noticeable destocking and temporary slowdown.

Demand for our cell processing consumables, our largest distributor also reported slower growth in China consistent with the comments by several of our peers.

Speaker 3: Our largest distributor also reported slower growth in China, consistent with the comments by several of our peers.

As a result of this inventory destocking and broad Lumpiness, we are adjusting our near term forecast for demand and reducing 2023 guidance in line with that of others. In this space to be clear, we don't view this environment as a new normal for bio processing and bar production, but a temporary period of customer disruption to remind you.

Speaker 3: As a result of this inventory de-stocking and broad lumpiness, we are adjusting our near-term forecast for demand and reducing 2023 guidance in line with that of others in the space. To be clear, we don't view this environment as a new normal for viral processing and viral production, but a temporary period of customer disruption.

Speaker 2: To remind you, our products are critical consumable components required to delivering cell and gene therapies. FireLife is a leading supplier of these solutions and we count the vast majority of commercial and clinical stage CGT players as our core customers.

Our products are critical consumable components required to delivering cell and gene therapies biolife as a leading supplier of these solutions and we count the vast majority of commercial and clinical stage CDG players as our core customers.

Before discussing our Q2 results and updated outlook for the rest of this year I'll begin with an update to our Q1 announcement regarding strategic alternatives for our Sterling U L T and custom biogenic systems cryogenic freezer businesses.

Speaker 2: Before discussing our Q2 results and updated outlook for the rest of this year, I'll begin with an update to our Q1 announcement regarding strategic alternatives for our Sterling ULT and Custom Biogenic Systems Cryogenic Freezer business.

Speaker 2: Post June 30th, after considering all strategic alternatives, management and the board of directors have concluded that divesting our Sterling and CBS freezer assets will optimize the growth and profitability of our consumable product portfolio and allow the company to focus exclusively on our recurring higher margin stream.

Post June 30th after considering all strategic alternatives management and the board of directors have concluded that divesting, our sterling and CBS freezer assets will optimize the growth and profitability of our consumable product portfolio and allow the company to focus exclusively on a recurring higher margin streams.

Speaker 2: It is the right decision for the business, our customers, and you, our shareholders.

It is the right decision for the business, our customers and you our shareholders.

Speaker 2: To this end, and based on the interest and feedback we've received so far, we are now able to fully commit to starting 2024 without the freezer product lines and the impact these have had on our margins, working capital requirements and revenue lumping.

To this end and based on the interest and feedback we received so far we are now able to fully commit to starting 2024 without the freezer product lines and the impact. These have had on our margins working capital requirements and revenue Lumpiness we.

Speaker 2: We appreciate the value of the related IP products and teams and expect a new owner to be better able to provide global access to these innovative products.

We appreciate the value of the related IP products and teams and expect a new owner to be better able to provide global access to these innovative products.

Speaker 2: In our earnings release issue today, we provided a pro-former illustration of our first half 2023 results, excluding the freezer businesses and other one-time charges.

In our earnings release issued today, we provided a pro forma illustration of our first half 2023 results, excluding the freezer businesses and other one time charges.

Speaker 2: This clearly and strongly reinforces our commitment to diversity's assets, and we are keenly focused on managing the process to meet our year-end completion goals.

This clearly and strongly reinforces our commitment to divest these assets and we are keenly focused on managing the process to meet our year end completion goal.

Speaker 2: 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.

I'd like to acknowledge the sustained improvement efforts of our leadership team Middle management and line workers at Cvs in Sterling.

We will 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 2: We appreciate and recognize that operating through a divestiture process can lead to uncertainty for our team members and customers. And I'm proud of and grateful for their dedication and support. We'll proactively communicate updates internally and externally as best we can as the process continues. Now we're bound to the...

We appreciate and recognize that operating through a divestiture process can lead to uncertainty for our team members and customers.

I'm proud of and grateful for their dedication and support.

Proactively communicate updates internally and externally as best we can as the process continues.

Now I'll move on to discussing our Q2 performance.

To some specifics in Q2, we sold and shipped products or provided services to 188, new unique customer sites across our three products and services platforms.

Speaker 2: To some specifics, in Q2, we sold and shipped products to provider services to 188 new unique customer sites across our three products and services platforms. A large portion of our total revenue continues to come from existing customers as we penetrate deeper and pitch our integrated solutions to take an increased share of their spend for manufacturing, storage and distribution products and services.

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

And each of the last six quarters, we gained over 150, new customer sites and have a strong pipeline of early stage users that we will carefully nurture and support to drive future growth.

Speaker 2: In each of the last six quarters, we gained over 150 new customer sites and have a strong pipeline of early stage users that we will carefully nurture and support to drive future growth.

Now estimate that our biolife in Sexton cell processing products have been used in or are planned to be used in over 800 customer clinical applications and we remain confident that each customer a clinical application if approved will generate annual revenue in a range of 501000 to $2 million, we expect to be able to continue to take share from homebrew.

Speaker 2: We now estimate that our biolife and sextant cell processing products have been used in or planned to be used in over 800 customer clinical applications. And we remain confident that each customer clinical application, if approved, will generate annual revenue and arrange your 500,000 to 2 million. We expect to be able to continue to take share from home brew preservation cocktails as awareness grows of the critical role our engineered media formulations play in reducing risk for CGT companies.

Preservation cocktails as awareness grows of the critical role our engineered media formulations play in reducing risk for CGT companies.

New Q2 customer sites by product and service line included 19, now using bio preservation media six new thoughts star users 17, New Evo cold chain end users 13, new cryogenic freezer and accessory customer sites 102, new Sterling <unk> freezer and accessory customer sites <unk>.

Speaker 2: New Q2 customer sites by product and service line included 19 now using bio preservation media, 6 new THAUSTAR users, 17 new EVO cold chain end users, 13 new cryogenic freezer and accessory customer sites, 102 new Sterling ULT freezer and accessory customer sites, 21 new bio storage customers, and 10 new cell processing customers now using Sexton products.

One new bio storage customers and 10, new cell processing customers now using sexton products for our cell processing platform. In Q2, we received confirmation that our solutions will be used in at least 24 additional clinical trials for new cell and gene therapies <unk> for Biolife bio preservation media and for <unk>.

Speaker 2: for our cell processing platform in Q2, we received confirmation that our solutions will be used in at least 24 additional clinical trials for new cell or gene therapies. 20 for BioLife BioPreservation Media and 4 for Sexton Cell Processing Tool.

And cell processing tools.

In our stores and storage services platform, which includes Evo cold chain rentals and <unk> storage services. We gained 38, new customer sites in Q2, 'twenty one for biological storage services at 17 for Evo.

Speaker 2: In our stores and storage services platform, which includes Evo Coltrane rentals and size-afe storage services, we gained 38 new customer sites in Q2, 21 for biological storage services and 17 for Evo. Evo shipments continue to grow as more and customers are onboarded by our courier partners.

Evo shipments continued to grow as more end customers are on boarded by our carrier partners. It's.

Speaker 2: It's clear that late-stage and approved CGT companies will continue to de-risk their reliance on the long-term and incumbent competitor.

It's clear that late stage and approved CTG companies will continue to de risk their reliance on the long term an incumbent competitor.

Speaker 2: Specific to that, the global pharma company with two approved therapies continues to work through their evaluation and validation of the EVO platform and now anticipates starting to ramp in the last half of 2024. There are conveyed demand for EVO if fully realized what significantly increase our fleet size and total revenue for the platform.

Specific to that the global pharma company with two approved therapies continues to work through their evaluation and validation of the Evo platform and now anticipate starting to ramp in the last half of 2020 for their convey demand for Evo if fully realized would significantly increase our fleet size and total revenue for the platform.

Speaker 2: On the Sysafe side of the platform, we also continue to penetrate further in existing customers and have a very strong pipeline of high value, long-term contract opportunities, and we expect another banner year for Sysafe.

On the <unk> side of the platform. We also continue to penetrate further in existing customers and have a very strong pipeline of high value long term contract opportunities and we expect another banner year for <unk>.

Speaker 2: We continue to evaluate a list of potential expansion locations to increase our global buyer storage capacity footprint. Of course, we look for potential synergies to co-locate a buyer repository within our plans new GMP Media Manufacturing Center of Excellence.

We continue to evaluate a list of potential expansion locations to increase our global bio storage capacity footprint.

Of course, we look for potential synergies to co locate our bio repository with our within our plans new GMP media manufacturing center of excellence.

On that point to support this anticipated mid long term growth with two leading commercial real estate advisory firms that specialize in life Sciences expansions. We've made progress on our initial assessment of potential locations to build and validate a de novo self processing media production facility.

Speaker 2: On that point, to support this anticipated bidding-long term growth, with two leading commercial real estate advisory firms that specialize in life science as expansions, we made progress on our initial assessment of potential locations to build and validate a denovo self-processing media production facility.

Speaker 2: The objective of this initiative is to de-risk potential environmental disruptions to our Bothell and Indy facilities, but also to build sufficient additional capacity to meet anticipated demand for our proprietary high margin recurring revenue media products. While the timeline is not yet locked, it's likely this new facility will come online toward the end of 2025.

The objective of this initiative is to Derisk potential environmental disruptions to our Basel and India facilities, but also to build sufficient additional capacity to meet anticipated demand for our proprietary high margin recurring revenue media products, while the timeline is not yet locked it's likely this new facility will come online towards the end of 2012.

Five.

I'll wrap up my comments with this we self critical CGT bar production tools that are sole sourced from Biolife is are not one time buys, but rather consumables that need to be replenished, we have a strong brand and the track record with limited competitive substitutes, our CTG customers participate in an emerging class of therapeutic modalities.

Speaker 2: I'll wrap my comments with this. We sell critical CGT bioproduction tools that are sole source from BioLife. These are not one-time buys, but rather consumables that need to be replenished. We have a strong brand in the track record with limited competitive subs.

Speaker 2: Our CGT customers participate in emerging class of therapeutic modalities that are just now becoming real. And we naturally expect demand for our products to increase as they progress their programs.

That are just now becoming real and we naturally expect demand for our products to increase as they progress their programs. The reality is that right now the economy is tighter and the participants in this ecosystem all want to reduce cash burn and are holding less inventory than previously.

Speaker 2: The reality is that right now, the economy is tighter, and the participants in this ecosystem all want to reduce cash burn and are holding less inventory than previously.

Speaker 2: Growing demand will offset this, but for now we must weather this moment and with the help of the plan of vestitures will make thoughtful adjustments to our operations. They become leaner, less complex, and a significantly more profitable business starting in 2024.

Demand will offset this but for now we.

Whether this moment and with the help of the planned divestitures will make thoughtful adjustments to our operations to become leaner less complex and a significantly more profitable business starting in 2024.

Now I'll turn the call back over to Troy to present, our financials for Q2 in the first half of 2023.

Speaker 2: Now I'll turn the call back over to Troy to present our financials for Q2 in the first half of 2023. Troy.

Speaker 4: Thank you, Mike. Total revenue for the second quarter of 2023 was 39.5 million, representing a 3% decrease from Q2 2022.

Thank you Mike total revenue for the second quarter of 2023 was $39 5 million, representing a 3% decrease from Q2 2022.

Speaker 4: And excluding COVID-related revenue from Q2 2022, growth was 7%.

And excluding Covid related revenue from Q2 2022 growth was 7%.

Speaker 2: Revenue growth was driven by a 22% increase in our cell processing platform, offset by a 26% decline in our freezers and thaw systems platform.

Revenue growth was driven by a 22% increase in our cell processing platform.

Set by a 26% decline in our freezers in Das systems platform.

There was no COVID-19 related revenue in Q2, 2023 compared to 9% of covered related revenue in Q2 2022.

Speaker 2: There was no COVID-related revenue in Q2 2023 compared to 9% of COVID-related revenue in Q2 2022.

Speaker 2: Cell processing platform revenue for the second quarter of 2023 was 18.7 million, up 22% over the same period in 2020.

Cell processing platform revenue for the second quarter of 2023 was $18 7 million up 22% over the same period in 2022.

Freezers and Das systems platform revenue for the second quarter was $13 9 million down 26% over the same period in 2022.

Speaker 2: Freezers and Thos Systems platform revenue for the second quarter was 13.9 million down 26% over the same period in 2022.

Speaker 2: excluding COVID-related revenue from Q2 2022, revenue in Q2 2023 decreased 23%.

Excluding COVID-19 related revenue from Q2 2022 revenue in Q2 2023 decreased 23%.

Storage and storage services platform revenue for the second quarter was $6 9 million up 7% over the same period in 2022.

Speaker 2: Storage and storage services platform revenue for the second quarter was $6.9 million, up 7% over the same period in 2022.

Speaker 2: Excluding COVID-related revenue from Q2 2022, revenue in Q2 2023 increased 94%.

Excluding COVID-19 related revenue from Q2 2022 revenue in Q2 2023 increased 94%.

Speaker 2: Total revenue for the six months ended June 30, 2023, with $77.2 million, representing a 1% increase over the same period in 2022. And excluding COVID-related revenue from this period, growth was 11%, which was driven by a 24% increase in self-processing revenue.

Total revenue for the six months ended June 32023 was $77 2 million, representing a 1% increase over the same period in 2022.

And excluding Covid related revenue from this period growth was 11%, which was driven by a 24% increase in cell processing revenue.

Speaker 2: There was no COVID-related revenue during 2023 compared to 9% of COVID-related revenue in the six months ended June 30, 2020.

There was no COVID-19 related revenue during 2023 compared to 9% of Covid related revenue in the six months ended June 32022.

Cell processing platform revenue for the six months ended was $37 7 million up 24% over the same period in 2022.

Speaker 2: Cell processing platform revenue for the six months ended was 37.7 million up 24% over the same period in 2022.

Freezers and Das systems platform revenue for the six months ended was $26 9 million down 21% over the same period in 2022.

Speaker 2: free users and thought systems platform revenue for the six months ended with 26.9 million down 21% over the same period in 2020.

Excluding COVID-19 related revenue from the same period in 2022 revenue decreased 18%.

Speaker 2: If good and co-related revenue from this same period in 2022, revenue decreased 18%.

Speaker 2: Storage and storage services platform revenue for the six months ended was 12.6 million, up 1% over the same period in 2022.

Storage and storage services platform revenue for the six months ended was $12 6 million up 1% over the same period in 2022 <unk>.

Speaker 2: excluding COVID-related revenue from the same period in 2022, revenue increased 96%.

Excluding COVID-19 related revenue from the same period in 2022 revenue increased 96%.

Adjusted gross margin for the second quarter of 2023, it was 35% compared with 36% for the second quarter of 2022.

Speaker 2: Adjust the gross margin for the second quarter of 2023 was 35% compared with 36% for the second quarter of 2022.

Speaker 2: A just a gross margin for the six months ended June 30th, 2023 was 36%, compared with 34% from the same period in 2022.

Adjusted gross margin for the six months ended June 32023 was 36% compared with 34% from the same period in 2022.

Speaker 2: GAAP operating expenses for Q2 2023 were $54.8 million versus $117.1 million in Q2 2020.

GAAP operating expenses for Q2, 2023, or $54 8 million versus $117 1 million in Q2 2022.

Speaker 2: For the six months ended, gap operating expenses were 106.1 million versus 151.3 million for the same period in 2022.

For the six months ended GAAP operating expenses were $106 1 million versus $161 3 million for the same period in 2022.

Adjusted operating expenses for Q2, 2023 totaled $22 2 million compared with $20 3 million in Q2 2022.

Speaker 2: Adjusted operating expenses for Q2 2023 total 22.2 million compared with 20.3 million in Q2 2022.

Speaker 2: Adjusted operating expenses for the six months ended where 46.8 million compared with 40.4 million for the same period in 2020.

Adjusted operating expenses for the six months ended were $46 8 million compared with $40 4 million for the same period in 2022.

The increase in operating expenses was primarily driven by increased head count and infrastructure costs to support our long term growth objectives.

Speaker 2: The increase in operating expenses was primarily driven by increased headcount and infrastructure costs to support our long-term growth objectives.

Our adjusted operating loss for the second quarter of 'twenty, three was $10 4 million compared with $5 7 million in Q2 'twenty two.

Speaker 2: are adjusted operating loss for the second quarter of 23 with 10.4 million compared with 5.7 million in Q2 20.

Speaker 2: But the six months ended, adjusted operating loss was 21 million versus 14.1 million for the same period in 20.

For the six months ended adjusted operating loss was 21 million versus $14 1 million for the same period in 2002.

Adjusted EBITDA for the second quarter of 'twenty, three was negative $1 2 million compared with positive $1 2 million for the second quarter of 2022.

Speaker 2: Adjusted EBITDA for the second quarter of 23 was negative 1.2 million compared with positive 1.2 million for the second quarter of 2020.

Speaker 2: The six months ended, the Justin EBITDA was negative 2.2 million compared with positive 44,000 for the same period in 2022.

For the six months ended adjusted EBITDA was negative $2 2 million compared with positive <unk> 44000 for the same period in 2022.

Next I would like to turn to our pro forma first half 2023 financial profile, excluding Sterling and CBS .

Speaker 2: Next, I would like to turn to our pro forma first half 2023 financial profile, excluding Sterling and CBS .

Speaker 2: Our revenue for the first half of 2023 would have been $51.5 million.

Our revenue for the first half of 2023 would have been $51 5 million.

With a 52% adjusted gross margin and approximately 16% to 18% of adjusted EBITDA.

Speaker 2: with a 52% adjusted gross margin and approximately 16 to 18% of adjusted EBITDA.

Our cash and marketable securities balance at June 32023 was $48 1 million compared with $56 9 million at March 31 2023.

Speaker 2: Our cash and marketable securities balance at June 30th, 2023 was $48.1 million compared with $56.9 million at March 31st, 2023.

Taking into consideration our adjusted EBITDA of negative $1 2 million cash used in Q2, 2023 was primarily related to unfavorable working capital adjustments of $4 7 million largely due to the timing of raw material deliveries related to media and capital.

Speaker 2: Taking into consideration our adjusted EBITDA of negative 1.2 million cash use in Q2 2023 was primarily related to unfavorable working capital adjustments of 4.7 million largely due to the timing of raw material deliveries related to media and capital expenditures of 2.2 million.

<unk> of $2 2 million.

Turning to 2023 revenue guidance.

Speaker 2: Management is updating for your guidance. Reflect expectations for its existing business.

Management is updating full year guidance to reflect expectations for its existing business.

Speaker 2: Polo revenue for the year is now expected to be in the range from $144 million to $158 million. You're selecting a year-over-year decrease of 11% to 2%.

Total revenue for the year is now expected to be in the range from $144 million to $158 million, reflecting a year over year decrease of 11% to 2%.

Speaker 2: quoting COVID-19 related revenue, this would represent a year over your decrease of 3% to an increase of 6%.

Excluding COVID-19 related revenue this would represent a year over year decrease of 3% to an increase of 6%.

Speaker 2: Revenue guidance for 2023 does not include any COVID-19 related revenues.

Revenue guidance for 2023 does not include any COVID-19 related revenue.

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 65 million to $74 million, a decrease of 5% to an increase of 8% over 2022.

Speaker 2: $65 million to $74 million, a decrease of 5% to an increase of 8% over 2022.

Previous guidance was platform was estimated to be 89 million to $93 million.

Speaker 2: Previous guidance to this platform was estimated to be $89 million to $93 million.

Speaker 2: Based on our customers' update forecasts, we expect a quarterly sequential decrease of approximately 30% in Q3, followed by a 40% sequential improvement in Q4.

Based on our customer's updated forecast, we expect quarterly sequential decrease of approximately 30% in Q3, followed by a 40% sequential improvement in Q4.

Freezers in power systems platform.

Speaker 2: $53 million to $56 million, a decrease of 21% to 16% compared with 2022.

53 million to $56 million, a decrease of 21% to 16% compared with 2022.

Speaker 2: Go to COVID-19 related revenue, year over year decrease of 18% to 13%.

Let's go to COVID-19 related revenue year over year decrease of 18% to 13%.

Speaker 2: Previous guidance for this platform was estimated to be 72.5 million to 79 million.

Previous guidance for this platform is estimated to be $72 5 million to $79 million.

Storage and storage service platform.

26 million to $28 million, a decrease of 2% to an increase of 6% over 2022.

Speaker 2: 26 million to 28 million a decrease of 2% to an increase of 6% over 2022.

Excluding COVID-19 related revenue year over year growth of 61% to 74%.

Speaker 2: Escoding COVID-19 related revenue, year over year growth of 61% to 74%.

Speaker 2: Previous guidance for this platform was estimated to be 26.5 to 30 million.

Previous guidance for this platform was estimated to be 26 $5 million to $30 million.

The updated forecast reflects the macroeconomic issues seen by our peers and a significant decrease in anticipated 2023 sales from our largest bio preservation media direct customer.

Speaker 2: The updated forecast reflects the macroeconomic issues seen by our peers, and a significant decrease in anticipated 2023 stales from our largest bio-preservation media direct customer.

While the updated forecast from our customers are disappointing we remain confident in the mid and long term growth potential for Biolife.

Speaker 2: Well, the updated forecasts from our customers are disappointing. We remain confident in the mid and long-term growth potential for biolife.

Speaker 2: I would like to note, revenue from Biopreservation Media from 2020 to our anticipated 2023 forecast would be over a 35% compounded annual growth rate.

I'd like to note revenue from bio preservation media from 2022, our anticipated 2023 forecast would be over a 35% compounded annual growth rate.

Finally in terms of our share count as of today, we had $43 5 million shares issued and outstanding and 46 million shares on a fully diluted basis.

Speaker 2: Finally, in terms of our share count, as of today, we had 43.5 million shares issued in outstanding and 46 million shares on a fully diluted basis. Now,

Now I will turn the call to Mike.

Thanks Troy.

Speaker 3: Thanks Troy. I'll summarize two key takeaways from Q2 and today's call. First, we are committed investing, sterling, and CBS by the end of the year.

I'll summarize two key takeaways from Q2 and today's call first we.

We're committed to divesting Sterling and Cvs by the end of the year.

Speaker 3: First half, 2023 financial performance without freezers, again, clearly and strongly reinforces our decision to divest these assets, and we are keenly focused on managing these process to meet our year in completion goal. We're committed to starting 2024 with a rationalized portfolio comprised of recurring higher margin streams to create the most shareholder value.

First half 2023 financial pro forma without freezers again, clearly in strongly reinforces our decision to divest these assets and we are keenly focused on managing these process to meet our year end completion goal.

We're committed to starting 2024 with a rationalized portfolio comprised of recurring higher margin streams to create the most shareholder value.

And to demand for our portfolio of class defining bio production tools and services in the exciting CDG market. These modulate by customer production throughput and their inventory management strategies.

Speaker 3: And two, demand for our portfolio of class-defining by our production tools and services and the exciting CDD market is modulated by customer production throughput and their inventory management strategy.

We remain confident in the mid and long term growth rates, but demand softened in Q2, and we expect this to persist for the rest of the year, we are very well entrenched and intent on maintaining our position as a premier enabling CGT tools and services provider we.

Speaker 3: We remain confident in the mid- and long-term growth rates, but demand softened Q2, and we expect this to persist for the rest of the year. We're very well entrenched in intent on maintaining our position as a premier, enabling CGT tools and services provider. We anticipate a recovery of sub-magnitude in 2024, and for the rest of this year, we will continue to focus on getting closer to our key customers, running the business efficiently, and completing the vestitures of Sterling and CBS .

We anticipate a recovery of some magnitude in 2024 and for the rest of this year, we will continue to focus on getting closer to our key customers running the business efficiently and completing divestitures of Sterling and Cvs.

Now I'll turn the call back over to the operator to take your questions Savi.

Speaker 3: Now I'll turn the call back over to the operatives to take your questions. Savi?

Speaker 5: All right, the floor is now open for questions. To ask a question at this time, please press star 1 on your telephone.

Alright. The floor is now open for questions to ask a question at this time. Please press star one on your telephone keypad.

Speaker 1: If at any point you would like to whiff your off from the queue, please press star 1 again. I will take a moment to now...

If at any point, you would like to withdraw from the queue. Please press star one again.

I will take a moment to allow compile our roster.

Our first question comes from Jacob Johnson with Stephens.

Speaker 1: Our first question comes from Jacob Johnson with Stephen.

Hey.

Speaker 6: Hey, good afternoon, Mike and Troy. Hey, first, hey, on the cell processing segment, I guess just kind of qualitatively.

Good afternoon, Mike and Troy.

Hi, Jamie first hey.

Hey.

The cell processing segment, I guess, just kind of qualitatively.

Investors have been worried about destocking for some time in the industry I'm, just curious kind of why you're seeing it now why didn't you see it earlier and then just on the China piece is there any way to frame up how much exposure you have to.

Speaker 6: The investors have been worried about the stocking for some time in the industry. I'm just curious kind of why you're seeing it now. Why didn't you see it earlier? And then to just on the China piece. Is there any way to frame up how much exposure? You have to check to China the district.

To China.

Distributors Lasalle start there, yes, great great question, Jacob well, I guess I would say as it relates to destocking, while several customers are probably experiencing thats its really one customer and it's a top 10 customer who has gone through an inventory.

Speaker 2: I'll start there. Yeah, great, great question, Jacob. Well, I guess I'd say as it relates to destocking, while several customers are probably experiencing this, it's really one customer. And it's a top 10 customer who's gone through an inventory.

Speaker 2: sort of management rationalization strategy and that's kind of where they've ended. But I have to say, not to blame our customers for our

Management rationalization strategy, and Thats kind of where they've ended but I have to say not to blame our customers for our relative level of precision and forecasting but they're undergoing as you can imagine.

Speaker 2: relative level of precision and forecasting, but they're undergoing, as you can imagine, a dynamic sort of chaotic time, and it's not uncommon for us to get

Dynamic sort of chaotic time, and it's not uncommon for us to get updates to demand, which are vastly different from what may have been communicated even as recently as a couple of weeks. So we're doing the best we can do to get our arms around that but as I mentioned, we have to get closer to them. So we can do.

Speaker 2: Updates to demand which are vastly different from what may have been communicated even as recently as a couple of weeks So we're doing the best we can to get our arms around that But as I mentioned we have to get closer to them so we can you know

Speaker 2: Just have a tighter, more real time update is to what they're seeing for demand and then.

Just have a tighter more real time update as to what they're seeing for demand and then.

Speaker 2: you know, hopefully they'll be consistent and their order flow will, you know, will follow the most recent, you know, projections that've given us. So that's the story there. It's really one customer.

Hopefully there'll be consistent in their order flow will will follow the most recent projections that have given us. So that's the story there it's really one customer.

Speaker 2: Now, to the second party of question on China, I'll say that

Now to the second part of your question on China, I will say that.

Speaker 2: This large distributor has conveyed to us that they're demand for our products in China through their second or interstitial distributors, and maybe there's some direct in there, but it's flat year over year. Now, they're not on our calendar year, so things are a little bit misaligned in terms of looking at quarters, but that's pretty significant because they are our largest indirect customer, and so that's meaningful. As far as trying to quantify those in dollars, we're not ready to do that right now, but it's not meaningless, it's material.

This large distributor has conveyed to us that their demand for our products in China through their secondary tertiary distributors and maybe there's some direct in there, but its flat year over year now theyre not on our calendar year. So things are a little bit misaligned in terms of looking at quarters, but that's pretty significant because they are our largest.

Indirect customer and so thats meaningful as far as trying to quantify those in dollars, we're not ready to do that right now, but it is not meaningless it's material yet.

Speaker 6: Okay, fair enough. And then maybe just on the guidance for self-processing, if I heard Troy write, I mean, I think we're looking at revenues there being down.

Okay Fair.

Fair enough and then maybe just on the guidance for cell processing, if I heard Troy right I mean, I think we're looking at.

Revenues they are being done.

Speaker 6: maybe 30% next quarter and then maybe a little bit down the cycle digits in the fourth quarter. I guess the question there is on the de-stocking, how long could this play out? Is this a one quarter phenomenon or kind of a two quarter phenomenon or is there any risk that spills in to 2024? And I guess similar question, how confident are you in returning cell processing to growth in 2020?

Maybe 30% next quarter, and then maybe a little bit down mid single digits in the fourth quarter.

So the question there is on the Destocking how long could this play out is this a one quarter phenomenon or kind of a two quarter phenomenon or is there any risk that spills in to 2024 and I guess similar question. How confident are you in returning.

Cell processing to growth in 2024.

Yes, yes, Jacob I'd, just like to reiterate what I said in my script and that was a sequential decline from Q2 to Q3, a 30% decline and then a sequential increase from Q3 to Q4 of 40%.

Speaker 4: Yeah, Jacob, I'd just like to reiterate what I said in my script. And that was a sequential decline. So from Q2 to Q3, 30% decline. And then a sequential increase from Q3 to Q4 of 40%. And then I'll let Mike.

And then I'll, let Mike handle the Destocking question Yep.

Speaker 2: Yep. So as it relates to the persistence of this Jacob, our sense is that this is getting worked through right now and we've got better visibility now.

So as it relates to the persistence of this Jacob our sense is that.

This is getting worked through right now and we've got better visibility visibility now and.

Speaker 2: And we don't believe that. You know, we're going to have swings, destocking swings of this magnitude that we're going to have to talk about in the future quarters.

And we don't believe that we're going to have.

Swings destocking swings of this magnitude that we're going to have to talk about in the future quarters. Okay.

Okay got it and then just last question, Mike I think in the press release and in your prepared comments. You said you don't plan to enter 2024 with the freeze of our business.

Speaker 6: Okay, got it. And then just last question, Mike, having in the press release, is it near prepare comments? He said, you don't plan to enter 2024 with a freezer business. Does that mean the freezers will be, you expect those businesses to be sold by the end of this year, or is that just referring to the discontinued operations troops?

Does that mean, the freezers will be when you expect those businesses to be sold by the end of this year or is that just referring to that discontinued operations treatment.

It means that we based on the interest level received to date and where we are with the pitch books and the parties. We would expect that we can complete both divestitures by the end of the year.

Speaker 2: It means that we based on the interest level received the date and where we are with the pitch books and the parties, we were expecting we can complete both the vestures by the end of the year.

Got it okay. Thanks for taking the questions.

Youre welcome.

Our next question comes from Chad, We had trials from TD Cowen.

Speaker 1: Our next question comes from Chad Wietowski from TD Cow.

Hey, Chad will address Jan first Steven Ma.

Speaker 7: Hey, you have Chavad Rostion for Stephen Law. When it comes to the new facility, could you just speak sort of to how you're rationalizing that if you can reduce the working capital burn by exiting the freezer business? How do you prioritize a new facility versus investing in doubling down in your current portfolio?

When it comes to the new Xiaomi.

Could you just speak sort of to how youre rationalizing that if you can.

The working capital burn by exiting the freeze your business.

How do you prioritize new facility versus investing and doubling down on your current portfolio.

Yes, good question and maybe we Werent crystal clear about this but this what we'd like people to take away is that the fundamentals of demand for the salt processing business, while softened as a two to three quarter trough so to speak not a new normal that's not they will review it. So we know based on the marquee customer list.

Speaker 2: Yeah Chad, good question. And maybe we weren't crystal clear about this, but this, what we like people to take away is that the fundamentals of demand for the self-processing business.

Speaker 2: while soften, you know, as a two to three quarter trough, so to speak, not a new normal. That's not the way we view it. So we know based on the marquee customer list, we have the number of commercial therapies we're supporting.

Have the number of commercial therapies, we're supporting those particular customers outlooks for their own increase of doses over time as driven by the five catalysts that we've been talking about every quarter all of which can increase the number of doses that we have to be ready, which means we have to start right now looking at the current capacity in Basel in India and be planning to meet that demand.

Speaker 2: Those particular customers outlooks for their own increase of doses over time, as driven by the five catalysts that we've been talking about every quarter, all the which can increase the number of doses that

Speaker 2: We have to be ready, which means we have to start right now, looking at the current capacity in Bothlin, Indy, and be planning to meet that demand, and have room for further demand in addition to the new facilities. So this is all about portfolio rationalization and CAPEX going work can actually provide the biggest impact, and that's really all about...

And then have room for further demand. In addition in the new facility. So this is all about portfolio rationalization and capex going where it can actually provide the biggest impact and that's really all about meat.

Speaker 2: Media production and bio storage capacity in the form of new size safe facilities.

Media production and bio storage capacity in the form of new <unk> facilities.

Speaker 7: understood and on the freezer business are you able to quantify or just give an update on some of the improvements that you've made And over the past few months and how has that sort of impacted the ongoing derchage?

Understood on the freezer business are you able to quantify or just give an update on some of the improvements that you've made over.

Over the past few months and how does that sort of impacted the ongoing negotiations.

You bet yeah, thanks for asking.

Speaker 2: You bet. Yeah, thanks for asking. You know, in the, in the pitch books, we have a lot of data and slides that speak to...

In the in the pitch books, we have a lot of data and slides that speak to.

Speaker 2: As you can imagine would be of interest to prospective buyers. So what is the state of quality in this freezer operation? I'm speaking primarily about sterling, to a much lesser extent about CBS . But guys, give us some color on. So what did you inherit? What did you do to fix it? And what are the results in terms of fewer, initial at the line failures? And then obviously fewer out of box failures. And fewer first 30, 69-day customer negative experiences. In all of those instances.

As you can imagine will be of interest to perspective buyers. So what is the state of quality in this freezer operation and I'm speaking, primarily about sterling to a much lesser extent about CBS , but guys give us some give us some color on so what did you inherit when you do to fix it and what are the results in terms of fewer <unk>.

Initial at the line failures, and then obviously fewer out of box failures and fewer first 30, 60 90 day customer.

Negative experiences.

And all of those metrics are going much better they are all <unk>.

Speaker 2: drastically reduced from even a few quarters ago. So we've done a tremendous lift here and you know that the shout out clearly goes to our quality engineering teams to look at all those failures, find the root causes, implement sustainable fixes and get at that. That was not that was not a light undertaking. But as I mentioned in my my comments earlier, the products in those portfolios have never been in better shape from all those dimensions that I mentioned quality being the very first one.

Drastically reduced from even a few quarters ago. So we've done a tremendous lift here in the shoutout clearly goes to our quality engineering teams to look at all of those failures find the root causes implement sustainable fixes it and get at that that was not that was not a light undertaking but as I mentioned in my comments earlier.

The products in those portfolios have never been in better shape from all of those dimensions that I mentioned quality being the very first one so it was a ton of that work, including supply chain initiatives, but we're really looking at what are we going to do as people are putting things together, making sure that we're getting material in and doing things right. The first time and not passing along.

Speaker 2: So it was a ton of that work, including some supply chain initiatives, but really looking at.

Speaker 2: What are we going to do as people are putting things together, making sure that we're getting material in and doing things right the first time and not passing along defects as a product moved on the production line. So that was a tremendous intensive exercise with a lot of people in the company, both there and Athens, but also generally amongst our quality, outstanding engineering teams. And the results speak for themselves.

<unk> is a product moves down the production line. So that was a tremendous intensive exercise with a lot of people in the company, both there and Athens, but also generally amongst our quality ops engineering teams and the results speak for themselves.

Speaker 2: Clearly, whoever ends up as the emergent winner in these divesture process is gonna be able to recognize that. And I'm sure they'll value that.

Clearly.

Whoever ends up as the emergent winter in these.

These divestiture processes are going to be able to recognize that and im sure theyre value of that.

Appreciate the color and thanks for the questions.

Youre welcome.

Our next question comes from Amanda Yao with Keybanc capital markets.

Speaker 1: Our next question comes from Amanda Young with Cuban Capital More.

Hi, guys. This is Amanda young on for Paul Knight from Keybanc. My first question would you be able to update us on the cell and gene therapy landscape. Previously your peers have talked around 10 BLA approvals in 2023, Im just kind of curious how the approval landscape shaking out.

Speaker 8: Hi guys, this is Amanda Young on for Paul Knight from Keybank. My first question is would you be able to update us on the Salon Jean Therapy landscape? Previously your peers have talked around 10 BLA approvals in 2023, I'm just kind of curious how the approval landscape is shaping out.

Sure we can give some qualitative response that Amanda thanks for the question well I think it's no surprise. If you were to hear us say that particularly for earlier stage CDG companies Theyre in a challenging environment right. Now. This is all about how do they keep powder dry, but the onus is really on them to have a very well done.

Speaker 2: Sure, we can give some qualitative response to the matter. Thanks for the question.

Speaker 2: Well, I think it's no surprise if you were to hear us say that, particularly for earlier stage, CGT companies, they're in a challenging environment right now. This is all about how do they keep powder dry? But, you know, the onus is not, it's really in them to have very well designed clinical trials that have, you know, really rational inclusion and exclusion criteria. So they get just the right patients and they can get data that's meaningful. They just can't afford ever footfall because it might not have enough powders to...

<unk> clinical trials that have really rational inclusion and exclusion criteria. So they get just the right patients and they can get data that's meaningful they just can't afford to have a foot fault because they might not have enough powder to to start over so we do watch that and while that certainly impacted some of our early stage companies.

Speaker 2: So we do watch that and while that's certainly impacted, you know, some of our early stage companies that we're engaged with, I think generally

That we're engaged with I think generally.

Not so much about the number of approvals because we don't really have a crystal ball there, but there is just its just clear that the manufacturing bottlenecks at some of our key customers are experiencing whether they make stuff directly or are they have CD. Most do that for them. Those bottlenecks are having an impact whether it's related to that.

Speaker 2: Not so much about the number of approvals because we don't really have a crystal ball there. But it's just clear that the manufacturing bottlenecks that some of our key customers are experiencing, whether they make stuff directly or they have CDMOs do that for them, those bottlenecks are having an impact, whether it's related to that old planning, or whether they rely on some other component that they just can't get, which means they just can't complete a final dose. So there's some of that going on as well. That manufacturing throughput is a real issue.

That'll planning or whether they are relying on some other component that they just can't get which means they just cant complete a final dose. So theres some of that going on as well that manufacturing throughput is a real issue.

Speaker 2: However, having said all that, you know, we know the customer concentration from the customers who have approved therapies have a decent sense of the revenue that comes from the therapy, production versus the other clinical trials or validation work, things like that, not total precision, but a decent assumption that we can get to. And all those metrics are going the right way. So, you know, we remain completely of the mindset that.

However, having said all of that.

We know the customer concentration from the customers who have approved therapies, we have a decent sense of the revenue that comes from the therapy production versus their other clinical trials or validation work things like that not total precision, but a decent assumption that we can get to.

All of those metrics are going the right way. So we remain completely of the mindset that.

Speaker 2: over time and what I say over time I mean in the midterm that Selangene there is will become the primary

Over time, and when I say over time, I mean in the midterm that cell and gene therapies will become the primary.

Speaker 2: first line treatment modality for these large disease states and not just blood cancers and cell tumors but these really big patient populations including vision loss, movement disorders, stroke, you name it. So you know it's still early that's what we have to keep reminding ourselves right we have to keep thinking that there will be fits and starts and the macro behind all this is certainly not helpful but fundamentally we believe in the science and we believe that we're engaged with the customers will be the winners because these are global global biopharma companies who are.

First line treatment modality for these large disease states and not just blood cancers, and solid tumors, but these really big patient populations, including vision loss movement disorders stroke, you name. It. So it's still early that's what we have to keep reminding ourselves right. We have to keep thinking that there will be fits and starts in the macro behind all this is certainly not helpful.

But fundamentally we believe in the science and we believe that we are engaged with the customers who will be the winners because these are global global Biopharma companies, who are again very smart and they obviously know all realize that cell and gene therapies are not pills that can stay on the shelf at room temperature Theres, a whole cold chain infrastructure and other things that you have.

Speaker 2: very smart and they've obviously now all realized that cell and gene therapies are not pills that can stay on a shelf at room temperature. There's a whole cold chain infrastructure and other things that you have to do so you can best take care of these very sensitive time and temperature sensitive doses.

To do so you can best take care of these very sensitive time of temperature sensitive doses. So you don't ruin them, along the way and that's clearly where our process where our products come in this is about risk mitigation, giving them the best chance to have the most viable cells, which obviously impacts dose potency, which can then be the decision between whether or not the patient's response leads.

Speaker 2: So you don't ruin them along the way, and that's clearly where our products come in. This is about risk mitigation.

Speaker 2: giving them the best chance to have the most viable cells, which obviously impacts those potency, which can then be the decision between whether or not the patient's response leads to reimbursement or not. So we're in a good spot, but it is early.

To reimbursement or not so we're in a good spot, but it is early.

Absolutely that makes a ton of sense and then just one follow up question.

Speaker 8: Absolutely, that makes a ton of sense. And then just one follow-up question. How is the funding environment looking from your perspective as of today?

How is the funding environment looking from your perspective as of today.

Well I think.

Without.

Without realizing this.

Speaker 2: without realizing the specific reason you're asking, I'll just try to presume that. If you're talking about companies who need to raise funds to fund operations.

The specific reason, you're asking I will just try to presume that if you're talking about.

Companies, who need to raise funds to fund operations, that's challenging if you're talking about the ability to raise funds to make a strategic acquisition that would fit there is a lot of interest for that and I'm not going to give any more color comments about what we might be looking at or not but just suffice to say that it really depends on the reason for the question. There are certainly funds.

Speaker 2: That's challenging. If you're talking about the ability to raise funds to make a strategic acquisition that would fit, there's a lot of interest for that. And I'm not going to give any more color comments about what we might be looking at or not, but just suffice to say that it really depends on the reason for the question. There are certainly funds around if folks are interested to do something strategic where it makes sense.

<unk>.

Folks are interested to do something strategic where it makes sense.

Absolutely appreciate your time, guys and thanks for the questions.

Welcome Amanda.

Our next question comes from Matt Hewitt with Craig Hallum.

Speaker 1: Our next question comes from Max Hewitt with Craig Hellum.

Speaker 9: Hi, this is Jack on from Matt. Thanks for taking our questions. Just a day a little bit deeper in the funding environment. Have you been seeing increase in order delays in relation to that tightening biotech capital funding environment?

Hi, This is Jack on for Matt Thanks for taking our questions.

Just to dig a little bit deeper in the funding environment have you been seeing an increase in order delays in relation in relation to the tightening biotech capital funding environment.

Well.

Speaker 2: I have to be careful here Jack, to not make general statements because...

I have to be careful here.

Jack do not make general statements, because we sort of bifurcate the CDG customers into two buckets those that have approved therapies and those are the global biopharma companies and while Theres certainly tightening their belt they.

Speaker 2: we sort of bifurcate the CGT customers in the two buckets.

Speaker 2: Those that have approved therapies and those are the global biopharmacompanies. And while they're certainly tightening their belt, they need this stuff. They need our stuff because if they can't get our stuff because of

They need this stuff they need our stuff because if they can't get our stuff because of poor inventory management or other decisions, which would lead them to not have enough of our stuff in their plant then they're done and they can't make a dose and have kept megadose again get paid for it to state the obvious right.

Speaker 2: poor inventory management or other decisions which would lead them to not have enough of our stuff in their plant, then they're done. And they can't make a dose, and if can't make a dose, they can't get paid for it to stay the obvious, right? And those, with again, with the one exception of the one customer whose destocking was really a result of them...

Those with again with the one exception of the one customer who is Destocking was really a result of them.

Speaker 2: implementing a maybe an more austere, inventory management strategy and however they chose to communicate that to us. I'll be it with a bunch of changes that are very dynamic. That's that thing. Now for everybody else, you know, the non-approved companies who are still in the clinical trial phase, it depends on the size. We've got a lot of those at our early stage and so you bet they're slowing down. There are reasons why they're delaying enrollment or they're reducing enrollment.

Speaker 2: whether it's not so much access to beds, but it's more about access to funds so they can keep going and do what they need to. So we are seeing some of that, for sure. But again, we try to focus on the, you know, the 2080 rule, particularly as it relates to how concentrated our customer revenue is, and we just have to get better to understand what they're going through and to try to navigate through what they're telling us with the hope that they don't tell us something drastically different a week or 10 days later or two weeks later, which can be obviously seen as...

Speaker 2: a bit of a curve ball which makes not only our production planning really difficult, but it certainly makes the extent to which we inform our internal plan and our guidance based on those inputs from key customers,

Speaker 2: And you know, we're not alone in that regard. We're not blaming our customers. We're just trying to say that we've got to do everything we can to make sure we're as close as we can and we get really consistent information from them to the extent that they can behave in a more consistent way. That's going to be better for all of us.

To do everything we can to make sure we're as close as we can and we get really consistent information from them to the extent that they can behave in a more consistent way that's going to be better for all of us.

Okay. That's helpful. I appreciate the color.

Youre welcome Jack.

And our last question comes from Thomas Flaten with Lake Street.

Speaker 1: And our last question comes from Thomas Flatten with Leigh.

Hey, good afternoon, guys I appreciate you taking the questions.

Speaker 10: Hey, good afternoon guys. I appreciate you taking the questions. Hi, Tom. So that were, hey guys, just to make sure I'm not miss attributing the sequential down tick in the third quarter, that's, I'm assuming, due to more than the destocking by the one customer, it's more of a kind of a blended macro impact, or is I just wanna make sure I understand that, because it's a pretty significant, like almost six million bucks, down in the third quarter, relative to the first quarter for the cell processing revenue.

Hi, touches so that hey, guys just to make sure I'm not miss attributing the sequential downtick in the third quarter, that's I'm, assuming due to more than the destocking by the one customer it's more of a kind of a blended macro impact or is I just want to make sure I understand that because it's a pretty significant like almost 6 million bucks down in the third quarter.

Relative to the first quarter for the cell processing revenues.

Speaker 2: Yeah, right on time. I was pretty sure you're asking. You know, a couple of customers are quite a bit of that. So it's not just one and it's based on.

Yeah right on Thomas I appreciate you asking.

A couple of customers are quite a bit of that so it's not just one and it's based on you know asbestos we have right now from our customer forecast and other.

Speaker 2: You know, as best as we have right now, from customer forecast and other, you know, analysis of all other bucket and those ordering patterns against the macro backdrop, that's what we're forecasting right now. So that's what we're guiding to. And we certainly are not sandbagging, nor are we being overly exuberant. We're really trying to use the best information we have right now to both make sure that everybody in the call realizes.

Analysis of the all other bucket and those ordering patterns against the macro backdrop, that's what we're forecasting right now so that's what we're guiding to and we certainly are not sandbagging, nor are we being overly overly exuberant, we're really trying to use the best information we have right now to both make sure that everybody in the call realizes what we.

Speaker 2: What we would not want you to do is take the difference between the first half results against the guidance and just split that up equally amongst Q3 and Q4. We've got some empirical data to say that's not the right way to look at the business. That's what we're giving the specificity around. A Q3 over Q2 sequential cliff, if you want to call it a cliff, with more than a modest recovery in Q4, which ultimately combined with the first half results will get us to that updated guidance.

Would not want you to do is take the difference between the first half results against the guidance and just split it up equally amongst Q3 and Q4, we've got some empirical data to say that's not the right way to look at the business. That's why we're giving the specifics around our Q3 over Q2 sequential cliff if you want to call it a cliff with AR.

More than a modest recovery in Q4, which ultimately combined with our first half results will get us to that that updated guidance picture.

And then going back to a discussion that occurred at the analyst day, a few months ago, given the capex spend.

Speaker 10: And then going back to a discussion that occurred at the analyst day a few months ago, given the CapEx of defending constraints, are you seeing increased demand for storage services and if so, how do you feel about capacity to take that demand on board at this?

Spending constraints are you seeing an increased demand for storage services in and if so how do you feel about capacity to take that demand onboard at this point.

Speaker 2: That's a really intuitive question, Thomas. Yeah, and thanks for reminding everybody about that. We have a really robust opportunity pipeline. We're sort of okay for now, but we do have to. And again, obviously divesting the freezers puts the company in a much better position, both from a cash perspective, less complex business, less distractions, and so on and so forth. We're gonna have to be very intentional in 2024 as we look to... The requirement of a career and the providers for a certain ability to run the company ahead of their automation.

That's a really intuitive question Thomas Yeah, and thanks for reminding everybody about that we have a really robust opportunity pipeline or sort of okay for now, but we do have two and again, obviously divesting the freezers puts the company in a much better position both from a cash perspective.

A less complex business less distraction, so on and so forth, where we're going to have to be very intentional in 2024, as we look to giving Gary and our entire storage services team the space they need because they've got folks who want to fill it up.

Speaker 2: Giving Gary and our entire storage services team the space they need because they've got folks who want to fill it up.

And then if I may one final one.

Speaker 10: And then if I may one final one, Troy, any thoughts on on EBITDAF for 2023, just to help us in the middle of the P&L?

Any thoughts on on EBITDA for 2023, just to help us in the middle of the P&L.

Speaker 4: I'm not at this time. Thomas, if you just look at our current EBITDA for the quarter, I would say that the given the dynamics here, right, with the high-grows margin media.

Not at this time Thomas if you just look at our current EBITDA for the quarter I.

I would say that the given the dynamics here right with the high gross margin media.

Speaker 4: and the product mix shift away from that in the short term. I think you can see that that EBITDA margin and gross dollar number probably's not going to improve significantly throughout the year. Until the future. Appreciate it. Appreciate it. Our digusted. Got it.

And the product mix shift away from that in the short term I think you can see that that EBITDA margin and our gross dollar number probably is not going to improve significantly throughout the year.

Until the credit I appreciate it takes our divested.

I appreciate you guys taking the question. Thank you.

Thanks, Thomas Thomas.

Since there are no other questions in queue is now closed I will turn the call back over to Mike Rice for closing remarks.

Speaker 1: Since there are no other questions, the two is now closed. I will turn the call back over to my grise for closing remarks.

Thanks, Savi and thanks again, everyone for your interest in Biolife, we certainly look forward to providing updates throughout the rest of the year on our progress and we are intent on setting the stage for a banner 2024 good evening.

Speaker 2: Thanks, Sabby, and thanks again everyone for your interest in bio life. We certainly look forward to providing updates throughout the rest of the year on our progress, and we are intent on setting the stage for Banner 2024. Good evening.

Okay.

Yeah.

This concludes the meeting you may now disconnect.

[music].