Q4 2023 BioLife Solutions Inc Earnings Call

Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions Q4 2023 Shareholder and Analyst Conference. At this time, all participants are in a listen-only mode.

Good afternoon, ladies and gentlemen, and thank you for standing by and welcome to the Biolife solutions Q4, 2023 shareholder and Analyst Conference call.

At this time, all participants are our neighbors to the only mode.

Operator: After the speaker's presentation, there will be a question and answer session. Please also note that today's event is being recorded. I would now like to turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions. Please go ahead.

After the speaker's presentation, there will be a question and answer session.

Also note todays event is being recorded.

I would now like to turn the call over to Troy Westerman, Chief Financial Officer of Biolife solutions. Please go ahead.

Troy Wichterman: Thank you, Operator. Good afternoon, everyone, and thank you for joining the BioLife Solutions 2023 Fourth Quarter Earnings Conference Call. On this call, we will cover business highlights, financial performance for the quarter, and 2024 revenue guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the fourth quarter of 2023 and 2024 revenue guidance, which is available at biolifesolutions.com. As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC filing. These statements speak only as of the date given, and we undertake no obligation to update them. We will also 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. Now, I'd like to turn the call over to Roderick Greef, Chairman and CEO of BioLife. Thanks, Troy.

Thank you operator, good afternoon, everyone and thank you for joining the Biolife solutions 2023 fourth quarter earnings Conference call.

On this call we will cover business highlights financial performance for the quarter and 2020 for revenue guidance.

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

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

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.

We will also 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.

Now I'd like to turn the call over to Rod degree chairman and CEO of Biolife.

Thanks, Troy and good afternoon, and thank you for joining us for Biolife as fourth quarter and full year 2023 conference call.

Roderick de Greef: Good afternoon, and thank you for joining us for BioLife's fourth quarter and full year 2023 conference call. It has been a busy four months since rejoining the company as CEO, and I'm encouraged by our team's ability to navigate one of the more challenging environments for the life sciences industry in recent memory, not to mention their consistent execution throughout the organizational changes related to our strategic refocusing on higher-margin recurring revenue streams. Over time,

It's been a busy four months since rejoining the company as CEO and I am encouraged by our team's ability to navigate one of the more challenging environment for the life Sciences industry in recent memory.

Not to mention their consistent execution throughout the organizational changes related to our strategic refocusing on higher margin recurring revenue streams.

Overtime.

Roderick de Greef: BioLife has become the industry standard in terms of biopreservation media and has established itself as a leading provider of premium bioproduction tools and services, the critical picks and shovels that support the fast-growing cell and gene therapy industry. This is our mission, and I'm convinced more than ever that BioLife is in an excellent position to benefit as this space matures, expanding upon our already dominant share of the market, and offering diversified exposure to the nascent industry, which we expect to grow at a 20 to 25 percent CAGR through 2033. As we look back on an undeniably challenging year for the CGT industry, we recognize that BioLife was not alone as companies large and small felt the impact of inventory destocking, a constrained funding environment, and weaknesses in China.

Biolife has become the industry standard in terms of bio preservation media and has established itself as a leading provider of premium brought bio production tools and services the critical picks and shovels that support the fast growing cell and gene therapy industry.

This is our mission and I'm convinced more than ever that Biolife is in an excellent position to benefit as the space matures expanding upon our already dominant share of the market and offering diversified exposure to the nascent industry, which we expect to grow at a 20% to 25% CAGR through 2033.

As we look back on and undeniably challenging year for the CGT industry, we recognize that Biolife was not alone as companies large and small felt the impact of inventory destocking, a constrained funding environment and weaknesses in China. Our full year results were certainly impacted by these.

Roderick de Greef: Our full-year results were certainly impacted by these challenges, but our initiatives to divest the freezer product lines and refocus helped us exit the year with positive momentum. With encouraging early signs that the macro headwinds facing the industry may have begun to subside, we similarly saw evidence of stabilization and momentum in the CGT industry and our business, as demonstrated by our fourth-quarter cell processing platform revenue growing 11% sequentially over Q3, and across our top 50 biopreservation media customers, who account for 90 percent of total media revenue, growing 14 percent compared to the third quarter. It is early, and as we have said, we will need to continue to work closely with our customers to manage inventory at normalized levels, which we believe positions us well for what could be a sustained recovery as 2024 progresses. With that in mind... Let's take a closer look at our full year 2023 results. Total revenue for 23 was $143.3 million, an 11% decrease compared to 22.

But our initiatives to divest a freezer product lines and refocus helped us exit the year with positive momentum.

With encouraging early signs that the macro headwinds facing the industry may have begun to subside. We similarly saw evidence of stabilization and momentum into C. G T industry and our business as demonstrated by our fourth quarter cell processing platform revenue growing 11% sequentially over Q.

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And across our top 50, bio preservation media customers, who account for 90% of total media revenue growing 14% compared to the third quarter.

It is early and as we have said, we will need to continue to work closely with our customers to manage inventory to normalized levels, which we believe positions us well for what could be a sustained recovery F. 'twenty 'twenty four progresses.

With that.

Let's take a closer look at our full year 2023 results.

Total revenue for 23 was $143 3 million, an 11% decrease compared to 22.

Roderick de Greef: Ex-COVID, revenue decreased 4% for the year, as there was no COVID-related revenue in 2023. Looking across our platforms, for the full year of 2019, our cell processing platform revenue declined 4% to $65.8 million from 2022, due to a 6% decrease in our biopreservation media revenue, which was partially offset by a 9% increase in our other cell processing tools, which include our CellSeal, HPL, In 23, our top 20 media customers accounted for 78% of media revenue and were up slightly year over year by 1%, and our all other category decreased by a total of 26%. In 23, distributors accounted for 40% of total media revenue compared to 38% in 22.

Ex Covid revenue decreased 4% for the year as there was no COVID-19 related revenue in 'twenty three.

Looking across our platforms for the full year of 'twenty three our cell processing platform revenue declined 4% to $65 8 million from 2022 due to a 6% decrease in our bio preservation media revenue, which was partially offset by a 9% increase in our other.

Cell processing tools, which include our cell C O H P L and C T automated fill product lines.

23, our top 20 media customers accounted for 78% of media revenue and were up slightly year over year by 1% and our all other category decreased by a total of 26%.

In 'twenty three distributors accounted for 40% of total media revenue compared to 38% and 22.

Roderick de Greef: Customers with commercially approved therapies accounted for an estimated 52% of direct media revenue in 23 compared with 49% in 22, keeping in mind that some of this revenue is related to validation, R&D, and other clinical work in addition to patient dosing. Our full year 23 bio storage and services platform revenue decreased 2% to $25.9 million. However, excluding prior year COVID-related revenue, this platform grew a strong 61% as Garrie Richardson's team did an excellent job of replacing the lost COVID revenue. We are currently in the process of consolidating our two Boston area facilities, which we expect will save approximately half a million in annual operating costs and which should be completed early in the third quarter. Our 23 Freezer and Thaw platform revenue declined 23% or $15.1 million from 2022, primarily due to a difficult capital equipment environment and the competitive disadvantage generated by the divestiture process.

Customers with commercially approved therapies accounted for an estimated 52% of direct media revenue and 23, compared with 49% and 22 keeping in mind that some of this revenue is related to validation R&D and other clinical work in addition to patient dosing.

Our full year twenty-three bio storage and services platform revenue decreased 2% to $25 9 million. However, excluding prior year Covid related revenue. This platform grew a strong 61% as Gary Richardson team did an excellent job of replacing the lost Covid revenue.

We are currently in the process of consolidating our two Boston area facilities, which we expect will save approximately half a million dollars in annual operating costs and which should be completed early in the third quarter.

Our twenty-three freezer and thought platform revenue declined 23% or $15 1 million for 2022, primarily due to a difficult capital equipment environment and the competitive disadvantage generated by the divestiture process.

Roderick de Greef: As you know, we have been in the process of divesting the CBS and Sterling freezer entities since August of last year. We recently signed two separate LOIs for the sale of these freezer product lines, and our goal is to close these transactions within the next 45 to 60 days. All in all, this has been a difficult and time-consuming process, and we expect no net proceeds and, in fact, will realize an initial cash outflow.

As you know we have been in the process of divesting the C. B S. In Sterling freezer entities since August of last year.

We recently signed two separate LOI for the sale of these freezer product lines and our goal is to close these transactions within the next 45 to 60 days.

All in all this has been a difficult and time consuming process and we expect no net proceeds and in fact, we'll realize in an initial cash outflow.

Roderick de Greef: This initial cash outflow will be offset by the elimination of future cash burn and certain long-term debt, as well as future product warranty liabilities, while materially improving our overall 24 financial performance and margin profile. On a more macro industry note, 2023 was a breakthrough year for CGT approvals in the U.S. This momentum continued into the first quarter of 2024 with the recent approval of Iovance's groundbreaking till-based therapy, Amtagvi, an industry first, which we support with two of our biopreservation media products. This brings us to a total of 14 unique approved therapies that have our biopreservation media embedded.

This initial cash outflow will be offset by the elimination of future cash burn and certain long term debt as well as future product warranty liabilities, while materially improving our overall 24 financial performance and margin profile.

On a more macro industry note.

2023 was a breakthrough year for C. G T approvals in the U S. This.

This momentum continued into the first quarter of 'twenty four with the recent approval of Io advances groundbreaking til based therapy and tag be an industry first which we support with two of our bio preservation media products.

This brings us to a total of 14 unique approved therapies, which have our bio preservation media embedded and three of these unique approved therapies also utilize ourselves seal vials.

Roderick de Greef: And three of these unique approved therapies also utilize our cell seal vials. In the next 12 months, we believe there could be up to 10 additional unique therapy approvals, expanded indications, or geographic expansions, which include our proprietary product. In addition to our strong market position in approved therapies, we believe there are currently more than 230 active U.S. commercially sponsored clinical trials and estimate that our biopreservation media is embedded in more than 70% of those trials. Looking at these statistics, it's evident that BioLife is the clear industry standard when it comes to biopreservation, and as the industry grows, so will we. We have amassed a class-defining portfolio of products to improve quality and reduce risk in the manufacture and delivery of these novel therapies.

In the next 12 months, we believe there could be up to 10 additional unique therapy approvals expanded indications or geographic expansions, which include our proprietary products in.

In addition to our strong market position and approved therapies. We believe there are currently more than 230 active U S. Commercially sponsored clinical trials and estimate that our bio preservation media is embedded in more than 70% of those trials.

Looking at the statistics, it's evident that biolife as the clear industry standard when it comes to bio preservation and as the industry grows so do we.

We have amassed a class defining portfolio of products to improve quality and reduce risk in the manufacture and delivery of these novel therapies. We have earned a high level of trust with our marquee customer base and operate in an environment with limited credible competition, specifically in the area of bio preservation.

Roderick de Greef: We have earned a high level of trust with our marquee customer base and operate in an environment with limited credible competition, specifically in the area of biopreservation. As we look ahead, we're taking a cautious approach toward our 2024 revenue guidance, despite certain customer conversations that suggest some growing optimism around improving market conditions in the second half of the year. At this point, we are expecting 2024 revenue, excluding freezers, to range from $95.5 million to $100 million, with our cell processing platform generating between $66 million and $68.5 million, and our biostorage and services platform, which now includes our thaw product line, to range from $29.5 million to $31.5 million. While the total year-over-year growth rate of 2% to 7% may seem modest, I would point out that against an annualized second-half 23 run rate, which we believe is a more appropriate baseline given the industry challenges of last year, our guidance for total revenue growth is 13% to 18%, with cell processing growing at 17% to 22% and biostorage and services at 4% to 11%. As we progress through 24, we're committed to delivering increases in revenue, gross margin, and adjusted EBITDA both in absolute terms and as a percent of revenue. At this point, I'll turn the call over to Troy to provide a more detailed review of our financial results. Troy said:

As we look ahead, we are taking a cautious approach toward our 2020 for revenue guidance, despite certain customer conversations which suggests some growing optimism around improving market conditions in the second half of the year.

At this point, we are expecting 2024 revenue, excluding freezers to range from 95.5 to 100 million with our cell processing platform generating between 66 at $68 5 million and our bio storage and services platform, which now includes our thought product line to rain.

From 29.5 to 31 5 million.

While the total year over year growth rate of 2% to 7% may seem modest I would point out that against an annualized second half 'twenty three run rate, which we believe is a more appropriate baseline given the industry challenges of last year.

Our guidance for total revenue growth is 13% to 18% with cell processing growing at 17% to 22% and bio storage and services at 4% to 11%.

As we progressed through 'twenty four we're committed to delivering increases in revenue gross margin and adjusted EBITDA, both in absolute terms and as a percent of revenue.

At this point I'll turn the call over to Troy to provide a more detailed review of our financial results Troy.

Troy Wichterman: Thank you, Rod. We reported Q4 revenue of $32.7 million, representing a decrease of 26% year-over-year and excluding COVID-related revenue from Q4 of 2022. The decline was 23%. The year-over-year decrease was primarily related to a $6.1 million decrease, or 35%, in our freezers and thaw systems platform and a $5.4 million, or 27%, decrease in our cell processing platform, reflecting the industry headwinds in destocking in 2023. However, our sequential growth in Q4 from Q3 for the cell processing platform was 11%. As Rod mentioned, we are starting to see positive indicators for future revenue growth for the cell processing platform. Turning to our BioStorage and Services platform

Thank you Rod we reported Q4 revenue of $32 7 million, representing a decrease of 26% year over year and excluding COVID-19 related revenue from Q4 of 2022 the decline was 23%.

The year over year decrease was primarily related to a $6 1 million dollar decrease or 35% in our freezers and thought systems platform and.

A $5 $4 million or 27% decrease in our cell processing platform, reflecting the industry headwinds and destocking in 2023.

However, our sequential growth in Q4 from Q3 for the cell processing platform was 11%.

As Rob mentioned, we are starting to see positive indicators for future revenue growth for the cell processing platform.

Turning to our bio storage and services platform revenue for the fourth quarter was $6 6 million a decrease of 1% over the same period in 2022.

Troy Wichterman: Revenue for the fourth quarter was $6.6 million, a decrease of 1% over the same period in 2022. Excluding COVID-related revenue from Q4 of 2022, revenue in Q4 2023 increased 26 percent as COVID-related revenue was backfilled. Freezers and thought systems platform revenue for the fourth quarter was $11.4 million, a decrease of 35% over the same period in 2022, excluding COVID-related revenue from Q4 2022. Revenue in Q4 23 decreased 32%.

Excluding COVID-19 related revenue from Q4 of 2022 revenue in Q4, 2023 increased 26% as the Covid related revenue was backfill.

<unk> and processing platform revenue for the fourth quarter was $11 4 million a decrease of 35% over the same period in 2022.

Excluding COVID-19 related revenue from Q4 2022 revenue in Q4, 'twenty three decreased 32%.

Troy Wichterman: Adjusted gross margin for the fourth quarter was 35% compared with 32% in the prior year. The increase in adjusted gross margin was primarily due to product mix related to decreased revenue from our freezer business and lower warranty and scrap expense from our ULT product. Adjusted gross margin increased approximately 450 basis points sequentially, largely due to increased self-processing revenue and product value. Gap operating expenses for Q4 2023 were $45.9 million versus $93.5 million in Q4 2022. The decrease was largely due to the non-cash asset impairment charge we took during Q4 2022 in the freezer businesses of $40.5 million. Adjusted operating expenses for Q4 2023 totaled $20.4 million, compared with $22.1 million in the prior year.

Adjusted gross margin for the fourth quarter was 35% compared with 32% in the prior year.

The increase in adjusted gross margin was primarily due to product mix related to decreased revenue from our freezer business and lower warranty and scrap expense from our <unk> product line.

Adjusted gross margin increased approximately 450 basis points sequentially, largely due to increased cell processing revenue and product mix.

GAAP operating expenses for Q4 2023.

Were $45 9 million versus $93 5 million in Q4 2022.

The decrease was largely due to the noncash asset impairment charge. We took during Q4 2022 in the freezer businesses of $40 5 million.

Adjusted operating expenses for Q4, 2023 totaled $20 4 million compared with $22 1 million in the prior year.

Troy Wichterman: The decrease was largely due to reduced personnel expenses from the reduction in force in Q3 2023, decreased consulting costs, and a reduction in travel expenses. Our adjusted operating loss for the fourth quarter of 2023 was $9.3 million compared with $8.2 million in Q4 2022. Our gap net loss was $13.4 million in Q4 compared with $49.2 million in the prior year.

The decrease was largely due to reduced personnel expenses from the reduction in force in Q3 2023 <unk>.

Decreased consulting cost and a reduction in travel expenses.

Our adjusted operating loss for the fourth quarter of 2023 was $9 3 million compared with $8 2 million in Q4 2022.

Our GAAP net loss was $13 4 million in Q4, compared with $49 2 million in the prior year.

Troy Wichterman: The decrease in net loss was primarily due to the $40.5 million non-cash intangible asset impairment charge related to Sterling and CBS taking during Q4 2022. Adjusted EBITDA for the fourth quarter of 2023 was $700,000 compared with $1.7 million in the prior year. Our adjusted EBITDA decreased primarily due to lower biopreservation media revenue.

The decrease in net loss was primarily due to the $40 5 million noncash intangible asset impairment charge related to Sterling and CBS, taking during Q4 2022.

Adjusted EBITDA for the fourth quarter of 2023 was 700000 compared with $1 7 million in the prior year.

Our adjusted EBITDA decreased primarily due to lower bio preservation media revenue.

Troy Wichterman: Adjusted EBITDA for Q4 increased sequentially by $3.8 million from Q3, largely due to higher revenue from our cell processing platform, reduced freezer R&D costs, and decreased personnel costs. Now, turning to our balance sheet. Our cash and marketable securities balance at December 31st, 2023 was $52.3 million compared with $42.2 million at September 30th, 2023, taking into consideration our adjusted EBITDA of $700,000. Our increase in cash during Q4 2023 was primarily related to a $10.4 million pipeline that closed on October 19, 2023 with an existing shareholder. Our SVB long-term debt balance was $20 million, which was interest only through Q2 2024 with quarterly repayments of $2.5 million beginning in Q3 2024.

Adjusted EBITDA for Q4 increased sequentially by $3 8 million from Q3, largely due to higher revenue from our salt processing platform reduce freezer R&D costs and decreased personnel costs.

And was the first positive quarterly adjusted EBITDA for the year.

Turning to our balance sheet.

Our cash and marketable securities balance at December 31, 2023 was $52 3 million compared with $42 2 million at September 30th 2023.

Taking into consideration, our adjusted EBITDA of 700000 or.

Our increase in cash during Q4, 2023 was primarily related to a $10 4 million dollar pipe that closed on October 19th 2023 with an existing shareholder.

Our SBB long term debt balance was $20 million.

Is interest only through Q2 2024 with quarterly repayments of $2 5 million beginning in Q3 2024.

Troy Wichterman: Turning to 2024 Revenue Guidance. Our 2024 guidance is based on expectations for our cell processing and biostorage and services platform, which now includes the ThaStar Automated Thawing Devices product line and does not include any revenue from freezer product lines which are in the process of being divested. Total revenue is expected to be between $95.5 million and $100 million, reflecting an overall growth of 2% to 7%.

Turning to 2020 for revenue guidance.

Our 2024, our guidance is based on the expectations for <unk>.

Cell processing and bio storage and services platform, which now includes the softer automated thawing devices product line and does not include any revenue from freezer product lines, which are in the process of being divested.

Total revenue is expected to be $95 5 million to $100 million, reflecting an overall growth of 2% to 7%.

Troy Wichterman: Our self-processing platform is expected to contribute $66 million to $68.5 million, for flat to 4% growth over 2023. The BioStorage and Services Platform is expected to contribute $29.5 million to $31.5 million, or 5% to 12% growth over 2023. And on a like-for-like basis, growth of 10% to 16%. In addition, we expect revenue, gross margin, and adjusted EBITDA growth in 2024. Finally, in terms of our share count, as of February 22nd, 2024, we had 45.3 million shares issued and outstanding and 48.2 million shares on a fully diluted basis.

Our salt processing platform is expected to contribute 66 million to $68 5 million.

Our flat to 4% growth over 2023.

Our bio storage and services platform is expected to contribute $29 5 million to $31 5 million or 5% to 12% growth over 2023.

And on a like for like basis growth of 10% to 16%.

In addition, we expect revenue gross margin and adjusted EBITDA growth in 2024.

Finally in terms of our share count as of February 22024, we had $45 3 million shares issued and outstanding and $48 2 million shares on a fully diluted basis.

Operator: Now, I'll turn the call back to the operator to open up for questions. Thank you. If you would like to ask a question, please press star then 1 on your telephone. If you're using a speakerphone, we ask that you please pick up your handset. To submit your question, please press star- Our first question comes from Paul Knight. Hi, Ron and Troy.

Now I'll turn the call back to the operator to open up for questions.

Thank you.

I ask a question. Please press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

The first question comes from Paul Knight with Keybanc. Please go ahead.

Hi, Ron and drawing the LOI allows you to move the.

Roderick de Greef: Does the LOI allow you to move the freezer assets to discontinued operations for the statement? Unfortunately... Paul, what we need to do is actually have a signed document, then we can move them into discontinued operations. Obviously, we are, you know, working through the final diligence and, in parallel, the legal guys are drafting the documents. So, we're hoping 30 to 60 days from today, these things will be done. And if we can get it done by the end of March, then they will be considered discontinued operations for the full quarter. Assigning LOI gets you to move them to discontinued. No, it does not do so by itself.

Freezer assets to discontinued ops for.

The statements.

Unfortunately.

Well, what we need to do is actually have a signed document then we can move them into discontinued ops. Obviously, we are working.

Working through the final diligence and in parallel a.

Crafting the legal guys are crafting the documents so we're hoping 30 to 60.

Days from today these things will be done and if we can get it done by the end of March then they will be considered.

Discontinued operations for the full quarter.

Oh fine Elmo why it gives you a mood in the discontinued.

No. It does not by itself a deal a deal does.

Roderick de Greef: A deal, a deal does. Okay, but you have LOIs signed at this juncture and are waiting on LOIs. We have two signed LOIs, one for each of the entities, clear terms spelled out, final diligence is in process with the buyers, and the lawyers are working on the security purchase agreement and, in the other case, an asset purchase agreement.

Okay, but you have LOI signed at this juncture or waiting on LOI.

We have two signed LOI is one for each of the entities.

Clear terms spelled out.

Final diligence is in process with the buyers and the lawyers are working on the security purchase agreement and in the other case an asset purchase agreement.

Roderick de Greef: And then, you know, you had positive EBITDA in the quarter, Rod. Could you talk about the steps taken to get to positive EBITDA? Yeah, I'll let Troy deal with that, Paul.

And then you know you had positive EBITDA in the quarter, a rod could you talk to.

Steps taken to get to positive EBITDA.

Yeah, I'll, let Troy deal with that Paul Yeah, Paul So as you recall, we did a reduction in force towards the end of Q3, so that reduction expenses flowed through Q4.

Troy Wichterman: Yeah, Paul, so as you recall, we did a reduction in force towards the end of Q3, so that reduction in expenses flowed through Q4. In addition, as I remarked in my script, we had an increase in self-processing revenue, and then we did a control on discretionary expenses such as consulting costs and travel. Okay, and then the last question on my side is the... Ten more potential cell and gene therapies coming in 2024 relative to 13 last year.

In addition, as remarked in my script, we had the increase in cell processing revenue and then we did a control on discretionary expenses, such as consulting costs and travel.

Okay and then last question on my side is the.

10, more potential cell and gene therapies cutting in 2024 relative to our 13 excuse me, yes, 13 last year.

Roderick de Greef: Um, I know it's probably not correct, but why not almost double the level of revenue from approved customers that you gave in the call to get to the potential revenue run rate on these approvals? Or what kind of qualifications would you put around that saying, I can't just double my commercial revenue off CGT's approval?

I know, it's not probably correct, but why not almost doubled in the level of revenue from approved customers that you gave in the call.

Get to potential revenue run rate on these approvals or what kind of qualifications would you put around that saying I can't just double my commercial revenue walk Cgt's approved.

Roderick de Greef: Yeah, so a couple things there. When you're talking about a new, unique approved therapy, there's definitely a ramp up, right? And if you have followed the I-Advanced conference call, as I did, they were very studious in not saying how many patients they expected to be able to dose over any kind of near-term timeframe. So there's a ramp, that's one thing.

Yeah. So a couple of things there when you're talking about a new unique approved therapy, there's definitely a ramp up right and if you have followed the eye advanced conference call as I did they were very studious and not saying how many patients they expect it to be able to dose over any kind of near term timeframe. So there's a ramp that's one thing.

Roderick de Greef: The other thing, Paul, is that we have refined the methodology by which we look at what we call approved therapies, and especially as we look forward to that 12-month number, which is 10. That 10 includes the potential for three unique therapies, three new indications from an existing therapy, as well as four new geographic indications, so, or sorry, geographic regions. So that means that those are the drivers that actually increase the number of patients that could be dosed, right? So, for instance, Brionzi could have three new indications in 2024. That's not necessarily a new approval in the way that we're looking at things now. So each one of these three aspects, whether it's indication and expansion of indication, whether it's a geographic region expansion, or whether it's actually a unique approval, in addition to whether a therapy moves from, say, a fourth-line treatment to a second-line treatment. Those are the variables that make up the patient count, ultimately in terms of those being dosed. So it's not a like-for-like comparison.

The other thing Paul is that.

We have refined the methodology by which we look at what we call approved therapies and especially as we look forward to that 12 month number which is 10.

That 10 includes the potential for three unique therapies.

Three new indications from an existing therapy.

As well as four new geographic indications, so or sorry geographic regions. So that means that those are the drivers that actually increase the number of patients that could be dose right. So.

For instance, <unk> Z could have three new indications in 2024, that's not necessarily a new approval in the way that we're looking at things now so each one of these three aspects whether it's a <unk>.

Indication and expansion of indication.

Whether it's a geographic region expansion or whether it's actually a unique.

Approval in addition to whether a therapy moves from say a fourth line treatment to second line treatment. Those are the variables that make up the patient count ultimately in terms of those being dose. So it's not a like for like.

Last thing promise as the.

Roderick de Greef: The last thing, promise, is as you get these events happening in the year... I would assume they would do some additional stocking in front of it. Are you seeing that at this juncture? Um, it's difficult to say. What I would say is when we look at a customer like Iovance, who probably had a pretty good heads-up that things were going their way, their 23 purchases were nicely above 22. And their projected 24 is also nicely above 23.

As you get these events happening in the year.

I would assume they would do some additional stocking in front of it are you seeing that at this juncture.

It's difficult to say what I would say is when we look at a customer like I advance you probably had a pretty good heads up that things were going their way.

They're 23 purchases were nicely above 22, and there are projected 'twenty four is also nicely above 23.

Roderick de Greef: Okay, thanks. Yep. Thank you. And our next question today comes from Jacob Johnson. Hey, thanks. Good afternoon.

Okay. Thanks.

Yep.

Thank you and our next question today comes from Jacob Johnson with Stephens. Please go ahead.

Hey, Thanks, good afternoon.

Roderick de Greef: Maybe, Rod, just first on the freezer sale, I appreciate the commentary and the prepared comments. I appreciate kind of what you just outlined for Paul's question, but I guess kind of how confident you've got two LOIs. It sounds like this will all hopefully be over in two months, but just how confident are you that this will all be concluded in the next couple of months? And then I heard you mention some possible outlays related to these transactions. Is there any way to quantify that? Yeah, so I'm not going to get into any details about the specific terms because they're not done yet. With respect to confidence, you know, I'm at 70 to 80 percent. One of them, the buyer for Sterling, knows the business extremely well. So it's not, we don't believe anything's going to pop out of the woodwork that would be a showstopper for them.

Maybe Rob just just first on the freezer sale I appreciate the commentary in the prepared comments I appreciate kind of what you just outlined to Paul's question, but I guess kind of how confident you have got two LOI.

It sounds like this all hopefully be over in two months, which is how confident are you.

This will all be concluded.

And the next couple of months and then I heard you mention some maybe outlays related to this transaction is there any way to quantify that.

Yeah, so I'm not going to get into any any details around the specific terms because theyre not done yet.

With respect to confidence.

I'm at 70% to 80% one of them.

The buyer for Sterling knows the business extremely well. So it's not we don't believe anything is going to come a pop out of the woodwork that would be a showstopper for them a little less so on the CBS side of things, but again, that's a cleaner business at some level. So we don't expect and it's a sophisticated buyer. So we.

Roderick de Greef: A little less so on the CBS side of things, but again, that's a cleaner business at some level. So we don't expect, and it's a sophisticated buyer, so we don't expect anything to pop up out of there. So I'd say, you know, 75 to 80 percent confidence that we'll get it done in that kind of a timeframe. In terms of the cash outlay, again, I'm not going to get specific about it, but what I will say, Jacob, is that the size of it will not impact our ability to operate the company with the cash that we have going. Got it. That's helpful, Rod.

Don't expect anything to pop out of there. So I'd say you know.

75% to 80%.

The confidence that that will get it done in that kind of a timeframe.

In terms of the cash outlay again, I'm not going to get specific about it but what I will say Jacob is that there is not.

The size of it will not impact our ability to operate the company with the cash that we have going forward.

Okay.

Got it that's helpful and then on the media side of things, it's good to see it pick up sequentially, you're guiding to kind of single digit growth year over year, but obviously much better growth versus kind of that second half trends.

Roderick de Greef: And then on the media side of things, it's good to see it pick up sequentially, you know, you're guiding single-digit growth year over year, but obviously, much better growth versus the second half trends. I'm just kind of curious, is there any way to kind of quantify how much media what media looks like in the first half of the year versus kind of the back half and kind of the run rate you'll be exiting the year at? Or maybe alternatively, kind of how you're thinking about some of the headwinds from last year sustaining into this year, just as we try to think about 24 and beyond.

Just kind of curious is there any way to kind.

Kind of quantify how much media what media looks like in the first half of the year versus kind of the back half and kind of the run rate you'll be exiting the year at.

Or maybe alternatively kind of how youre thinking about some of the headwinds last year sustained sustaining into this year.

It's a we try to think about 'twenty four and beyond.

Roderick de Greef: Yeah. So, you know, we had a conversation with our largest distributor customer. Literally, they were in our facility here a week ago.

Yeah. So you know we had a conversation with our largest distributor customer literally there were in our our facility here a week ago and they definitely expressed some confidence and the second half of the year and I look at them based on the almost 6000 customers that they sell our media too.

Roderick de Greef: And they definitely expressed some confidence in the second half of the year. And I look at them based on the almost 6,000 customers that they sell our media to as sort of a proxy for just the small commercial, maybe even preclinical, customer base. So, I think there's good news there that the first half of the year might be a bit flat compared to the second half of last year, but there could be an uptake there. Our commercial customers, based on the projections that we're receiving from them and our larger clinical customers, let's say our top 20, are also suggesting that, you know, the first half is going to be maybe 45% of the total for the year with the back half You know, admittedly, Jacob, our guidance is a bit cautious because it's early in the year, and last year was a tough year.

As sort of a proxy for just the small commercial maybe even preclinical customer base. So I think there's there's good news there that the.

The first half of the year might be a bit flat compared to the second half of last year, but that there could be an uptake there.

Our commercial customers based on the projections that were receiving from them and our larger clinical customers, let's say our top 20. They are also suggesting that the first half is going to be maybe 45% of the total for the year with the back half coming in at 55%.

Admittedly.

Lee Jacob are our guidance is a bit cautious because it's early in the year and last year was a tough year and I don't want to get ahead of you know out in front of our ski tips too much.

Roderick de Greef: And I don't want to get ahead of, you know, out in front of our ski tips too much. And we'll be looking throughout the year, every quarter as things change. And our customers give us a forecast, a rolling forecast every three months. And as those changes and, hopefully, become more positive, then we'll share that. And that would also be, you know, shown in our guidance going forward. Got it. I'll leave it at two and get back in the queue.

And we will be looking throughout the year every quarter as things change and our customers give us a forecast rolling forecast every three months and as those change and hopefully become more positive then we will share that and that would be.

Also.

Shown in our guidance going forward.

Got it I'll leave it at two and get back in queue. Thanks for taking the question Suraj.

Roderick de Greef: Thanks for taking the questions, Rob. Thanks, Jacob. And our next question today comes from Stephen Ma with PDK News. So let's go, huh?

Jacob.

And our next question today comes from Steven Mah with TD Cowen. Please go ahead.

Roderick de Greef: Great. Thanks for taking the questions. Could you comment on what you're seeing in terms of your comments about macro headwinds potentially subsiding?

Great. Thanks for taking the questions.

Could you comment on what Youre seeing in terms of your comments of macro headwinds potentially subsiding.

Roderick de Greef: I know you had 11% sequential growth in Q4 for cell processing. Any sense on how you can share how Q1 is shaping up, and then also any comments on how inventory and destocking trends are looking? Yeah, let me address the last one first, Stephen. I think that, you know, when we looked at Q3 and Q4, we had four and five large customers requesting that we push their orders out. And we're talking about seven-figure orders, right? Which was the major reason or half the reason that we had such a cliff drop from Q2 to Q3 last year.

I know you had a 11% sequential growth in Q4 in cell processing.

And any sense.

You can share on how Q1 is shaping up and then also any comment on how the inventory and.

Destocking trends are looking like.

Let me let me address the last one first Steven I think that when we looked at Q3 and Q4, we had four and five large customers requesting that we push.

Their orders out and we're talking about seven figure orders right, which was the major reason or perhaps the reason that we had such a cliff drop from Q2 to Q3 last year and in fact back even in Q4, we still had that.

Roderick de Greef: And in fact, even in Q4, we still had three customers asking us to do that. In Q1, so far, we've just had the one customer that has asked us to push things into Q2. And so we feel pretty good that that's an indication that from an inventory destocking perspective, things have kind of normalized with respect to the larger customers. Again, that customer that we just had a meeting with that has sort of 6,000, I would say, smaller customers, they are indicating that what they're seeing is a flattening from the second half of last year and, again, have expressed some optimism toward the back half of this year. Okay, yeah. Oh, no. I appreciate that. And Rob.

Three customers asking us to do that in Q1, so far we've just had the one customer that has asked us to push things into Q2, and so we feel pretty good that that's an indication that from an inventory destocking perspective things have kind of normalized.

With respect to the larger customer again that customer that we just had a meeting with that has sort of 6000, I would say smaller customers.

They are indicating that what they're seeing is a flattening.

From the second half of last year, and again have expressed some optimism towards the back half of this year.

Okay, Yeah, no I appreciate that.

Talking about the Q4, you know the 11% sequential growth in cell processing.

Troy Wichterman: Talking about Q4, you know, the 11% sequential growth in cell processing, can you provide any color on the gross margins in Q4? It seemed a bit lighter than we'd expect, and also in light of the growth in cell processing? Yeah, so on the gross margin, it did increase about, you know, 450 basis points sequentially. We're not speaking specifically to product line gross margin, but that would be in line with our expectations at those revenue levels and on a consolidated basis, including the freezer businesses. Okay. All right. Thanks. And then, let me sneak one more in.

Can you provide any color on the gross margins in Q4, it seemed a bit lighter than we would expect and also in light of the b.

The growth in cell processing.

Yeah. So on the gross margin it did increase about 450 basis points basis points sequentially.

We're not speaking specifically to the product line gross margin, but that would be in line with our expectations at those revenue levels in a consolidated basis, including the freezer businesses.

Okay, Alright, Thanks, and then.

Let me sneak one more in any more cost cutting efforts contemplated or do you think the company has a right sized.

Roderick de Greef: Any more cost-cutting efforts contemplated? Or do you think the company is right-sized? Yeah, good question. I think, generally speaking, we're right-sized.

Yeah. Good question I think generally speaking we're right sized I think that there are things on the edges that.

Roderick de Greef: I think that there are things on the edges that we can still take advantage of. Clearly, we're really focused on any kind of discretionary spending, particularly travel, and putting a pretty fine filter on who goes where and why. And so I think we have some opportunities there throughout the year, but nothing like the sort of RIF that we did in Q3. Okay, great. Thank you. Thank you. And our next question comes from Thomas Flaten with Lake Street Capital Markets. Hey, good afternoon, guys.

That we can still take advantage of clearly we're really focused on any kind of.

Discretionary spending, particularly travel.

And putting a pretty fine filter on who goes where and why.

And so it's I think we have we have some opportunities there throughout the year, but nothing like the sort of risk that we did in in Q3.

Okay, great. Thank you.

Thank you and our next question comes from Thomas Layton with Lake Street Capital markets. Please go ahead.

Hey, good afternoon, guys. Thanks for taking the questions Troy in in the guidance you made mention of positive adjusted EBITDA for 2024.

Thomas Flaten: Thanks for taking the questions. Troy, in the guidance, you made mention of positive adjusted EBITDA for 2024. Can you quantify that?

Can you can you quantify that I know you'd laid out that 16% to 18% adjusted EBITDA margin post freezer in the middle of last year, but it is that is that a number that is reasonable for us to think about for the second half of the year or is it should it be lighter than that.

Troy Wichterman: I know you laid out that 16 to 18% adjusted EBITDA margin post-freezer in the middle of last year, but is that a number that's reasonable for us to think about for the second half of the year? Or should it be lower than that?

Roderick de Greef: Yeah, Thomas, that's a good way to think about it, right? When you keep in mind the levels of revenue from media in the first half versus the second half, right in our guidance of what we're saying, we're so comfortable with those pro forma numbers that we put out once the media revenue grows in the second half. I would add, Thomas, that... I would add that once the freezers are divested, we will be in a position to speak to gross margin and adjusted EBITDA ranges for the balance of the year. We're constrained by certain gap requirements in doing that right now, but as soon as those things are gone, we will address that. Got it. And then?

Yeah, Thomas that's a good way to think about it right. When you keep in mind the media lab levels of revenue in the first half versus second half right in our guidance with what we're saying we're still comfortable with those pro forma numbers that we put out once the media revenue grows in the second half I would add to that.

I would add that once the freezers are divested we will be in a position to speak to.

Gross margin and adjusted EBITDA ranges for the balance of the year, we're constrained by certain GAAP requirements and doing that right now, but as soon as those things are gone we will we will address that.

Got it and then.

Roderick de Greef: Given that Garrie's been in post for a little while now, could you just describe a little bit about some of the initiatives he's had ongoing to kind of up your revenue game? Sure. I think, you know, the reality is around media revenue that the opportunity to drive revenue with existing customers is very limited as it relates to media revenue because they're going to use what they're going to use.

Given that Gary has been in post for a little while now could you just.

Can you just describe a little bit about some of the initiatives He's had I'm going to kind of up your up your your revenue game.

Sure I think I think.

The reality is around media revenue.

The opportunity to drive revenue with existing customers is very limited as it relates to media revenue because theyre going to use what theyre going to use so the opportunity on the media revenue is to understand where we are not which when you look at a 70% market share on commercially sponsored clinical trials as I mentioned.

Roderick de Greef: So the opportunity for media revenue is to understand where we are not, which when you look at a 70% market share for commercially sponsored clinical trials, as I mentioned, there's some place to go there, right? And we are going there to understand what, if anything, they're using. Do they even have a cryopreservation interval at this time, or are they using fresh product?

Theres some place to go there right and we are going there to understand what if anything they are using do they even have a cryopreservation interval at this time or are they using fresh product. So that theres, an exploratory phase going on there I think where we do have the opportunity to actually move the needle from a revenue perspective.

Roderick de Greef: So there's an exploratory phase going on there. I think where we do have the opportunity to actually move the needle from a revenue perspective is by cross-selling the tools that we acquired from the Sexson acquisition and layering those into the market position that we have on the media side. So there is definitely that going on where there are a handful of scientifically oriented salesmen taking those products and starting to set up meetings with those media customers to show them, basically introduce them to the Sexson product line, whether it's HPL, whether it's the CellSeal, Vial line. And I think we're starting to get some traction just based on some meetings that I'm seeing on the calendar, et ce So that's an opportunity for growth here as we go through the year. And then, one quick final one, if I might, would you be willing to comment on, you know, across the SciSAFE facilities, what level of capacity you're currently at? Yeah, I'd say if you blended them, we're probably in the 75 or 80% kind of range.

Is the cross selling of the tools that we acquired from the <unk> acquisition and layering those into the market position that we have on the media side. So there is definitely that going on where there is a handful of scientifically oriented salesman.

Taking those products and starting to set up meetings with those media customers to show them basically introduce them to the <unk> product line, whether it's <unk>, whether it's the self seal via wine and I think we're starting to get some traction just based on some meetings that I'm seeing on the calendar et cetera with <unk>.

Some of our larger customers. So that's an opportunity for growth here as we go through the year.

And then one quick final one if I might it would you be willing to comment on you know across the site safe facilities what level of capacity you're currently at.

Yeah, I'd say, if you blended it we're probably in the $75 to 80% kind of range.

Roderick de Greef: Got it. Appreciate you taking the questions. Thank you. You bet, Thomas.

Got it I appreciate you taking the questions. Thank you.

Roderick de Greef: Thank you. And our next question comes from Matt Hewitt with Craig Hallam. Hi guys, this is Jack on behalf of Matt.

You bet.

Thank you and our next question comes from Matt Hewitt with Craig Hallum. Please go ahead.

Hi, guys. This is Jack on for Matt. So you recently received two approvals in Q4 and I received two more so far this year, how should we think about the ramp of utilization of the bio preservation media customers have inventory on hand in anticipation of the launch or do they typically wait for largest commence and then take out additional product.

Roderick de Greef: So you recently received two approvals in Q4 and received two more so far this year. How should we think about the ramp-up of utilization of the file preservation media? Do customers have inventory on hand in anticipation of the launch? Or do they typically wait for the launch to commence and then take on additional products? No, I think they definitely buy in advance of the approval.

I think they definitely buy in advance of the approval I think we saw that just using <unk> as an example, where I mentioned earlier that there are 23 purchases were up above 22, not just around the clinical trials, but in anticipation of an approval. We believe we think that what we see from them projection wise for <unk>.

Roderick de Greef: I think we saw that just using Iovance as an example, where I mentioned earlier that their 23 purchases were up above 22, not just around the clinical trials but in anticipation of an approval, we believe. We think that what we see from them projection-wise for 24 is more reflective of what they think the patient dosing numbers are going to be. It's interesting that when we look at the dosing volume product used per patient, let's say, for sure, this particular application, this therapy, uses the most of anything we have, but they don't give us projections. They've, again, specifically not provided the investment community with any projections about the numbers of patients dosed.

24 is more reflective of what they think the patient patient dosing numbers are going to be.

It's interesting that when we look at the dosing volume product used per patient, let's say.

For sure. This particular application. This therapy uses the most of anything we have.

But they don't give us projections.

Again, specifically not provided the investment community with any projections about numbers of patients dose, but I would say that they keep a safety stock on hand, generally speaking of between three and six months on the outside and I think what we saw late last year was a movement from six months to more like a three.

Roderick de Greef: But I would say that they keep a safety stock on hand, generally speaking, of between three and six months on the outside, and I think what we saw late last year was a movement from six months to more like a three-month safety stock. You bet. Thank you. And ladies and gentlemen, as a reminder, if you'd like to ask a question, please press start at the... Our next question comes from Michael Okunewitch from... Hey guys, thank you for taking my questions today. So, I guess one of the things that I do want to ask is, as you get towards the removal of the freezer business and returning to EBITDA positive on a full year basis, and with a decent cash pile, do you start the process of looking into additional product lines that you could bring in? Or do you look more towards letting things settle and kind of waiting for better clarity on the direction of the market environment?

<unk> safety stock.

Understood. Thank you.

You bet.

Thank you, ladies and gentlemen, as a reminder, if you'd like to ask a question. Please press Star then one our next question comes from Michael Lewis from <unk>.

Please go ahead.

Hey, guys. Thank you for taking my questions today.

So.

I guess one of the things that I do want to ask is as you get towards the removal of the freezer business and returning to EBITDA positive on a full year basis.

And with a decent cash pile do you start the process of looking into additional product lines that you could bring in or do you look more towards letting things settle in kind of waiting for better clarity on the direction of the market environment.

Roderick de Greef: I think we should start by looking at the product line that we have right now, both in terms of products and services, and understand the investment required to drive those products forward. Clearly, there are certain external opportunities that we would take a look at, but we're going to be very selective. And just to be general, I would say we're early to be looking at those things, and unless something very special comes across our desk, that's probably, from a standpoint outside, something we would do more in 2025 versus this year.

I think we start by looking at the product line that we have right now both in terms of products and services understand the investment required to drive those.

Those products forward.

Clearly there are certain external opportunities that we would take a look at but we're going to be very selective and just to be general about it I would say we're early to be looking at those things.

And unless something very special comes across our desk, that's probably from a looking outside standpoint, something we would do more in 2025 versus this year. We have a lot of work to do this year both in understanding how to drive adoption of the current product line as well as implement system. So that the business runs more smooth.

Roderick de Greef: We have a lot of work to do this year, both in understanding how to drive adoption of the current product line, as well as implementing systems so that the business runs more smoothly. All right, thank you for that. And then just one more, and you did touch on this a little bit in one of the prior questions, but I'd like to see if you could provide a bit more color on what the impact of the freezer business looked like on adjusted EBITDA this past quarter. Yeah, unfortunately, we're a one segment reporting company. So we don't provide that information.

<unk>.

Alright. Thank you for that and then just one more on you did touch on this a little bit on the on one of the prior questions, but I'd like to see if you could provide a bit more.

Color on what the impact of the free their business looked like on adjusted EBITDA This past quarter.

Yeah. Unfortunately, we are a one segment reporting company. So we don't provide that information, but as Rod mentioned, we do look forward to providing further clarity once the divestiture process is complete.

Troy Wichterman: But as Rod mentioned, we do look forward to providing further clarity once the divestiture process is complete. Fair enough. Thank you for taking my question.

Fair enough. Thank you for taking my questions.

You bet.

Roderick de Greef: And our next question is a follow-up from Paul Knight at KeyBank; please go ahead. Hey, Ron, I got to give a shout out to the services group and the 26% growth rate x COVID. How is this happening? And why can't this go on, like, for a long time?

Our next question is a follow up from Paul Knight of Keybanc. Please go ahead.

Hey, Ron I got to give a shout out to the services group.

And the 26% growth rate ex Covid, how is this happening and.

Why can't just go on like for a long time.

Roderick de Greef: Yeah, I think some of it had to do with expansion from one of our very large customers and some business that they had and that we were able to get. Not to diminish the other activity that Garrie and his team did, but that was a bit of a one-off that I would say accounts for probably half of that growth. It's one of our larger customers on the storage side. We have an excellent relationship with them and are kind of their go-to when it comes to expanded storage. Okay, thanks. I'll bet.

Yeah, I think some of it Paul.

Paul has to do with expansion from one of our very large customers and some business that they had and that we were able to get.

Not to diminish the other activity that Gary and his team did but that was a bit of a one off that I would say accounts for probably half of that growth.

It's one of our larger customers on the storage side, we have an excellent relationship with them and are kind of their go to when it comes to expanded storage needs. Okay.

Okay.

Operator: Thank you. And ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to the management team for any closing remarks...

Thank you and ladies and gentlemen. This concludes our question and answer session I would like to turn the conference back over to the management team for any closing remarks.

Roderick de Greef: Thank you, Rocco. So in closing, I'd like to say that despite the relatively cautious outlook for 2024 that we're providing at this stage, we do strongly believe that the fundamental thesis remains intact and that the company is very well positioned to take advantage of the underlying growth drivers of what is still a very nascent CGT market to drive revenue and profitability not only this year but in years to come. We believe our biopreservation media is the industry standard and intend to leverage that market position to drive adoption of the other tools and services in our portfolio. Thank you for your time today, and we look forward to updating you on future calls and meeting with some of you at the Cowen Conference in Boston next week. Thank you. This concludes today's conference. Thank you all for attending today's presentation. You may now disconnect your lines and have a... See you on our next adventure!

Thank you Rocco so in closing I'd like to say that despite the relatively cautious outlook for 2024 that we're providing at this stage. We do strongly believe that the fundamental thesis remains intact and that the company is very well positioned to take advantage of the underlying growth drivers of what is still a very new.

<unk> CGT market to drive revenue and profitability not only this year, but in years to come.

We believe our bio preservation media is the industry standard and intend to leverage that market position to drive adoption of the other tools and services in our portfolio.

Thank you for your time today, and we look forward to updating you on future calls and meeting with some of you at the Cowen Conference in Boston next week.

Thank you. This concludes today's conference call.

Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

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