Q1 2024 BioLife Solutions Inc Earnings Call

Okay.

Welcome to the Biolife solutions first quarter 2024 financial results and business update.

Operator: Welcome to the BioLife Solutions First Quarter 2024 Financial Results and Business Update. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host, Troy Wichterman, Chief Financial Officer. Troy, you may begin.

Operator: At this time all participants are in a listen only mode.

Troy Wichterman: Later, we will conduct a question and answer session I would now like to turn the call over to your host Troy Lichterman Chief Financial Officer, Troy you may begin.

Troy Wichterman: Thank you, Operator. Good afternoon, everyone, and thank you for joining the BioLife Solutions 2024 First Quarter Earnings Conference Call. On this call, we will cover business highlights and financial performance for the quarter and reiterate our previous comments on full-year 2024 revenue guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the first quarter of 2024, which is available at BioLifeSolutions.com. As a reminder, during this call, we will make forward-looking statements.

Troy Wichterman: Thank you operator, good afternoon, everyone and thank you for joining the Biolife solutions 2024, our first quarter earnings conference call on this call, we will cover business highlights and financial performance for the quarter and reiterate our previous comments on full year 2024, our revenue guidance.

Troy Wichterman: Earlier today, we issued a press release announcing our financial results and operational highlights for the first quarter of 2024, which is available at Biolife solutions dotcom.

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

Troy Wichterman: These statements are subject to risk 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 DeGrief, Chairman and CEO of BioLife.

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

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

Roderick de Greef: We will also speak to non-GAAP or adjusted results reconcile.

Roderick de Greef: Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in our press release, we issued this afternoon.

Roderick de Greef: Now I'd like to turn the call over to Rod degrees, Chairman and CEO of Biolife.

Roderick de Greef: Thanks, Troy. Good afternoon, and thank you for joining us for BioLife's first quarter 2024 earnings call. In addition to Troy Wichterman, our CFO, I've invited Gary Richardson, our chief revenue officer, who will provide additional granularity on our Q1 revenue numbers and end market dynamics. He will also speak to our expertise and our strategy to continue to grow our market-leading franchise in biopreservation. To begin, I'm pleased to report another quarter of sequential revenue growth in our core cell processing business and increased confidence in our full-year outlook of $95.5 to $100 million in revenue. While early in the year, it's an encouraging start and helps substantiate our belief that we are now beginning to experience an easing macro environment, particularly in the bioproduction subsector we operate in.

Roderick de Greef: Thanks, Roy Good afternoon, and thank you for joining us for Biologics first quarter 2024 earnings call.

Roderick de Greef: In addition to Troy with German our CFO I've invited Gary Richardson, our Chief revenue Officer, who will provide additional granularity on our Q1 revenue numbers and end market dynamics, you will also speak to our expertise and our strategy to continue to grow our market, leading franchise and bio preservation.

Roderick de Greef: To begin I am pleased to report another quarter of sequential revenue growth in our core cell processing business and increased confidence in our full year outlook of 95 $5 million to $100 million in revenue.

Roderick de Greef: While early in the year, it's an encouraging start and help substantiate our belief that we are now beginning to experience an easing macro environment, particularly in the bio production sub sector, we operate in.

Roderick de Greef: With the strategic shift away from our legacy freezer products largely behind us, going forward, our revenues will be primarily from our high-margin cell processing platform and our bio storage and services platform, and our full year guidance does not include any revenue from the freezer product lines. Our strategic return to focus on recurring revenue was a thoughtful one, as navigating a capital-constrained market like this one is hard to do with low-margin capital equipment and working capital-intensive products.

Gary Richardson: With the strategic shift away from our legacy freezer products largely behind us going forward, our revenues will be primarily from our high margin cell processing platform and our bio storage and services platform and our full year guidance does not include any revenue from premium product lines.

Roderick de Greef: Our strategic returned to focus on recurring revenue was a thoughtful way as navigating a capital constrained market. Like this one is hard to do with low margin capital equipment and working capital intensive products.

Roderick de Greef: Further, with this renewed focus, we have set out streamlining our operations, freeing up resources to apply in areas in which we win and where we are the clear market leader, which is at the forefront of the fast-evolving CGT industry with a critical enabling consumable. As a reminder, this April, we announced the divestiture of our GCI freezer unit, also known to many as Sterling.

Roderick de Greef: Further with this renewed focus we have set out streamlining our operations freeing up resources to apply in areas in which we win and where we are the clear market leader, which is at the forefront of the fast evolving CGT industry with a critical enabling consumable.

Roderick de Greef: As a reminder, this April we announced the divestiture of our GCI freezer unit also known to many as Sterling.

Roderick de Greef: This divestiture was a substantial endeavor that required considerable time and effort to complete, but it is strategic and immediately enhances the financial profile and operations of the company. First quarter pro forma results, excluding GCI, clearly illustrate that by demonstrating an almost instant and significantly positive impact on our financial metrics. Specifically, excluding GCI from BioLife in Q1, our adjusted gross margin would have been 53% instead of 40%, and our adjusted EBITDA in absolute terms would have been a positive $3.6 million instead of a negative $1.2 million.

Roderick de Greef: This divestiture was a substantial endeavor that required considerable time and effort to complete.

Roderick de Greef: It is strategic and immediately enhances the financial profile and operations of the company.

Roderick de Greef: First quarter pro forma results, excluding GCI, clearly illustrate that by demonstrating an almost instant and significantly positive impact on our financial metrics.

Roderick de Greef: Specifically, excluding GCI from Biolife in Q1, our adjusted gross margin would have been 53% instead of 40% and our adjusted EBITDA in absolute terms would have been a positive $3 6 million instead of negative $1 2 million.

Roderick de Greef: Furthermore, these pro forma results set a new baseline from which we anticipate further margin expansion throughout the year based on operating leverage realized as our high-margin cell processing platform continues to grow as a percentage of total sales. Turning to the last of the freezer assets, CBS, which represented approximately 11% of Q1 sales and has been a historical drag on our profitability, we remain fully committed to exiting this business as swiftly and efficiently as possible.

Roderick de Greef: And further these pro forma results set a new baseline from which we anticipate further margin expansion throughout the year based on operating leverage realized as our high margin cell processing platform continues to grow as a percentage of total sales.

Roderick de Greef: Turning to the last of the freezer assets, Cvs, which represented approximately 11% of Q1 sales and has been a historical drag on our profitability. We remain fully committed to exiting this business as swiftly and efficiently as possible.

Roderick de Greef: We are in the middle of this process, and given the sensitivities around the transaction, we are unable to share further details at this time, but we will provide an update as soon as it becomes appropriate to do so. As we work through this process, we recently implemented a reduction in cash operating expenses at CBS, totaling $1.2 million per year.

Roderick de Greef: We are in the middle of this process.

Roderick de Greef: And given the sensitivities around the transaction we are unable to share further details at this time, but we will provide an update as soon as it becomes appropriate to do so.

Roderick de Greef: As we work through this process, we recently implemented a reduction in cash operating expenses at CBS totaling $1 $2 million per year, assuming CBS revenue remains relatively constant which we do these cuts immediately allows CBS to generate positive adjusted EBITDA.

Roderick de Greef: Assuming CBS revenue remains relatively constant, which we do, these cuts immediately allow CBS to generate positive adjusted EBITDA. While I'll let Gary speak to Q1 revenue in more detail, I'll briefly address what we're seeing on a more macro level. The initial easing of industry-wide headwinds that began to emerge in Q4 of last year continued into Q1.

Speaker Change: While I'll, let Garry speak to Q1 revenue in more detail I'll briefly address what we're seeing on a more macro level.

Roderick de Greef: The initial easing of industry wide headwinds that began to emerge in Q4 of last year continued into Q1.

Roderick de Greef: For BioLife, this meant less inventory destocking pressure from our larger direct customers and continued improvement in sequential distributor revenue, which we view as a proxy for the earlier stage research-focused market segment. As mentioned earlier, this allowed us to post a 10% sequential increase in our cell processing revenue, which followed the 11% increase we saw from Q3 to Q4 of last year. Our bio, storage, and services platform also realized sequential improvement, posting 7% revenue growth over Q4 of last year. Overall, we expect to see these trends continue to some degree throughout the remainder of this year.

Roderick de Greef: For Biolife this meant less inventory destocking pressure from our larger direct customers and continued improvement in sequential distributor revenue, which we view as a proxy for the earlier stage research focused market segment.

Roderick de Greef: As mentioned earlier this allowed us to post a 10% sequential increase in our cell processing revenue, which followed on the 11% increase we saw from Q3 to Q4 of last year.

Roderick de Greef: <unk> bio storage and services platform also realized sequential improvement posting 7% revenue growth over Q4 of last year.

Roderick de Greef: Overall, we expect to see these trends continue to some degree throughout the remainder of this year.

Roderick de Greef: The fundamental drivers for our cell processing revenue growth specifically, our bio preservation media revenue include our market leading share of commercially sponsored clinical trials and the overall regulatory environment for CTG.

Roderick de Greef: Fundamental drivers for our cell processing revenue growth, specifically our biopreservation media revenue, include our market-leading share of commercially-sponsored clinical trials and the overall regulatory environment for CGT. We believe that we have a market share in excess of 70% of the relevant commercially-sponsored clinical trials in the U.S., with approximately 45 Phase II and Phase III trials utilizing CryoSTOR. In Q1, the CGT regulatory environment continued to carry forward the momentum that started last year with our biopreservation media embedded in two newly approved therapies, bringing the total number of approved commercial therapies we support to 15 at the end of the quarter.

Roderick de Greef: We believe that we have a market share in excess of 70% of the relevant commercially sponsored clinical trials in the U S. With approximately 45 phase II and phase III trials utilizing cryo store.

Roderick de Greef: In Q1, the CGT regulatory environment continued to carry forward the momentum that started last year with our bio preservation media embedded in two newly approved therapies, bringing the total approved commercial therapies, we support to 15 at the end of the quarter.

Roderick de Greef: In addition, and equally important relative to driving biopreservation media revenue in the future, there were two new indications, one new geographic area, and four earlier lines of treatment approved for BioLife-supported therapies. We see an additional 11 similar approval opportunities over the next 12 months. The above market share clearly confirms that BioLife has evolved into the industry standard in biopreservation media and has established itself as a leading provider of premium bioproduction tools and services, the critical picks and shovels that need to be frequently replenished and which support the fast-growing CGT industry.

Roderick de Greef: In addition, and equally important relative to driving bio preservation media revenue in the future. There were two new indications one new geographic area and for earlier lines of treatment approved for Biolife supportive therapies, we see an additional 11 similar approval opportunities over the next.

Roderick de Greef: 12 months.

Roderick de Greef: The above market share clearly confirms that biolife has evolved into the industry standard in bio preservation media and has established itself as a leading provider of premium bio production tools and services the critical picks and shovels that need to be frequently replenished and which support the fast growing CGT industry.

Roderick de Greef: <unk>.

Roderick de Greef: As we continue to take the steps necessary to optimize our business to focus on our cell processing platform, I'm convinced more than ever that BioLife is in a pole position to benefit as industry headwinds continue to ease and this space further matures, expanding upon our already dominant share of the market and offering diversified exposure to this nascent industry, which has an expected CAGR of 20-25% through 2033. Now I'll turn the call over to Gary, who will provide some additional insight on Q1 revenue as well as our sales organization and go-to-market strategy. Thanks.

Roderick de Greef: As we continue to take the steps necessary to optimize our business to focus on our cell processing platform <unk>.

Gary: I am convinced more than ever that Biolife is in pole position to benefit as industry headwinds continued to ease and this space further matures expanding upon our already dominant share of the market and offering diversified exposure to this nascent industry, which has an expected CAGR of 20% to 25%.

Gary: <unk> through 2033.

Roderick de Greef: Now I'll turn the call over to Gary who will provide some additional insight on Q1 revenue as well as our sales organization and go to market strategy.

Gary Richardson: Thanks Rod, and it's a pleasure to participate in my first earnings call. By way of background, I have over 25 years of business development, sales, and marketing experience, with 18 years of that spent in the biopharmaceutical sector.

Gary: Thanks, Rod and it's a pleasure to participate in my first earnings call.

Gary Richardson: By way of background I have over 25 years of business development sales and marketing experience with 18 years of that spend and the biopharma sector.

Gary Richardson: I've been with BioLife for three and a half years since it acquired SciSafe, a bio-storage company I founded in 2010, growing it to $7.1 million in revenue in 2020. Post acquisition, I joined BioLife to continue operating our biorepository business and working with a broader sales and marketing team until last October when I stepped into the Chief Revenue Officer role. As detailed in our press release, although both of our product platforms were down against difficult prior year comps, our cell processing and biostorage services platforms each delivered continued sequential growth in Q1, and I'd like to provide a little more color on each platform.

Gary Richardson: I've been with Biolife for three and a half years since that acquired site safe in late 2020. So I think there's a bio storage company I founded in 2010 growing to $7 $1 million of revenue in 2020.

Gary Richardson: Post acquisition I joined Biolife to continue operating our powerful street business and working with a broader sales and marketing team until last October when I stepped into the chief revenue officer role.

Gary Richardson: As detailed in our press release, although both of our product platforms were down against difficult prior year comps all cell processing and bio storage services platform. Each delivered continued sequential growth in Q1, and I'd like to provide a little more color on each platform.

Gary Richardson: For our self-processing platform, our biopreservation media accounts for the vast majority of revenue, and there are several metrics we track quarterly. For example, our top 20 customers provided approximately 80% of total media revenue in Q1, and sales to direct customers having approved therapies totaled approximately 40% of direct media revenue. All of these metrics are in line with recent historical evidence.

Gary Richardson: For our cell processing platform, our bio preservation media account for the vast majority of revenue and there are several metrics we track quarterly.

Gary Richardson: Our top 20 customers provided approximately 80% of total media revenue in Q1, the sales to direct customers, having a proof therapies totaled approximately 40% of direct media revenue.

Gary Richardson: All of these metrics are in line with recent historical levels.

Gary Richardson: I would also like to note that revenue provided by our other cell processing tools increased compared to the prior year and sequentially, which for me is an indication that we are beginning to see some early results from our recent focus on cross-selling into our key media accounts, which positively impacted our closed fluid management system sales. Both Storage and Evo grew sequentially, and we continue to add new customers and gain additional revenue from existing relationships on the bio-storage side of things. The Evo business is somewhat lumpier in that onboarding new clients drives revenue growth, and we do expect to see some of that occur in the second half of this year.

Gary Richardson: I would also like to note that revenue provided by our other cell processing tools increased compared to prior year and sequentially.

Gary Richardson: Which for me is an indication that we are beginning to see some early results from our recent focus on cross selling into our key media accounts, which positively impacted close fluid management system sales.

Gary Richardson: Both storage and Evo grew sequentially and we continued to add new customers and gain additional revenue from existing relationships on the bio storage side of things.

Gary Richardson: The EBA business is somewhat lumpy and that Onboarding, new clients drive revenue growth and we do expect to see some of that occur in the second half of this year.

Gary Richardson: I'd like to turn to our commercial team and summarize our go-forward strategy. Our team consists of eight experienced sales individuals who have a high degree of technical expertise in the CGT space. Of note is the strength and depth of our team's existing relationships with many of the world's leading biopharma companies. Our commercial strategy is based on leveraging the technical expertise of the commercial team and the strength of their existing media relationships to introduce our other sales processing solutions, also known simply as cross-selling.

Gary Richardson: I'd like to turn to our commercial team and summarize our go forward strategy. Our team consists of eight experienced sales individuals who have a high degree of technical expertise and the CGT space.

Gary Richardson: Of note is the strength and depth of our teams existing relationships with many of the world's leading biopharma companies.

Gary Richardson: Our commercial strategy is based on leveraging the technical expertise of the commercial team and the strength of their existing media relationships to introduce our other cell processing solutions also known simply as cross selling.

Gary Richardson: On the media side, the focus is on exploiting our leadership position in biopreservation so that any new or early-stage CGT participants are aware of our media and will evaluate it, and also to ensure that the relationship with our more mature customers remains robust so that we remain the key biopreservation supplier for their next-generation therapy. We have several initiatives underway, which we will deploy in the near term, which will broaden and solidify the definition of our market prominence beyond media market share to driving best practices in cell and gene therapy bioproduction.

Gary Richardson: On the media side, the focus is on exploiting our leadership position in bio preservation, so that any new or early stage CGT participants are aware of all media and we'll evaluate it I also have to ensure that the relationship with our more mature customers remains robust so that we remain the key bio preservation supplier.

Gary Richardson: For their next generation therapies.

Gary Richardson: We have several initiatives underway, which we will deploy in the near term, which will broaden and solidify the definition of a market prominence beyond the media market share to driving best practices and cell and gene therapy by production.

Gary Richardson: In closing, I am really excited to assume this role. I inherited a solid foundation with an excellent technical and passionate team, and I look forward to applying my energy and expertise to this role. Now, I'll turn the call over to Troy.

Gary Richardson: In closing I am really excited to assume this role I inherited a solid foundation with an excellent technical and passionate team I'd like to forward to applying by energy and expertise to this role.

Gary Richardson: Now I'll turn the call over to Troy.

Troy Wichterman: Thank you Gary.

Troy Wichterman: We reported Q1 revenue of $31.7 million, representing a decrease of 16% year-over-year. The decrease was primarily related to a 35% decrease in revenue from our freezers and thaw platform and a 15% decrease in our cell processing platform, partially offset by a 25% increase in our biostorage services platform. Total revenue was down sequentially from Q4 2023 by $1 million, or 3%. The sequential decrease was due to a $2.9 million decrease in our freezer sales, partially offset by a $1.4 million or 10% increase in self-processing, and $500,000 or 7% increase in bio-storage services.

Troy Wichterman: We reported Q1 revenue of $31 7 million, representing a decrease of 16% year over year.

Troy Wichterman: The year over year decrease was primarily related to a 35% decrease in revenue from our freezers and thought platform and a 15% decrease in our cell processing platform, partially offset by a 25% increase in our bio storage services platform.

Troy Wichterman: Total revenue was down sequentially from Q4, 2023 by $1 million or.

Troy Wichterman: Four 3%.

Troy Wichterman: The sequential decrease was due to a $2 $9 million decrease in our freezer sales, partially offset by a $1 4 million or 10% increase in cell processing, and 500000 or 7% increase in bio storage services.

Troy Wichterman: On April 17th, we successfully divested our global cooling business, or GCI. The transaction required $7 million of cash to remain on the balance sheet of GCI and the repayment of $2.6 million in GCI long-term debt. We also implemented a RIF at GCI prior to closing.

Troy Wichterman: On April 17th we successfully divested our global cooling business or GCI.

Troy Wichterman: The transaction required $7 million of cash to remain on the balance sheet of GCI and the repayment of $2 6 million and GCI long term debt.

Troy Wichterman: We also implemented a risk at GCI prior to closing.

Troy Wichterman: As a result of this transaction, we will significantly reduce cash burn related to GCI, improve our financial profile, and remove a $7.5 million warranty liability. As disclosed in our 8K filed on April 23rd, GCI had negative gross margins in 2023, in addition to approximately $18 million in SG&A and R&D gap operating expenses. As a result of the divestiture of GCI, we are presenting certain financial metrics without the results of GCI to provide context to our expected future results for this year.

Troy Wichterman: As a result of this transaction, we will significantly reduce cash burn related to GCI improve our financial profile and remove a $7 5 million dollar warranty liability.

Troy Wichterman: As disclosed in our 8-K filed on April 23rd GCE.

Troy Wichterman: <unk> had negative gross margins in 2023 in addition to approximately $18 million in SG&A and R&D GAAP operating expenses.

Troy Wichterman: As a result of the divestiture of GCI, we are presenting certain financial metrics without the results of GCI to provide context to our expected future results for this year.

Troy Wichterman: All results presented in this manner are non-GAAP. Adjusted gross margin for the first quarter was 40% compared with 37% in the prior year. The increase was primarily due to a more favorable product mix and better utilization at our biorepository facilities.

Troy Wichterman: Our results presented in this manner our non-GAAP.

Troy Wichterman: Adjusted gross margin for the first quarter was 40% compared with 37% in the prior year.

Troy Wichterman: The increase was primarily due to fit more favorable product mix and better utilization at our bio repository facilities.

Troy Wichterman: Adjusted gross margin excluding GCI was 53%. App operating expenses for Q1 2024 were $41.9 million versus $51.3 million in Q1 2023. The decrease compared to the prior year was largely due to a reduction in headcount that took place at the end of Q3 2023. Adjusted operating expenses for Q1 2024 totaled $21.6 million, compared with $24.6 million in the prior year. Our adjusted operating loss for the first quarter of 2024 was $9.1 million, compared with $10.6 million in Q1 2023. Our gap net loss was $10.2 million in Q1, compared to $13.7 million in the prior year. The decrease in net loss was primarily due to lower personnel expenses.

Troy Wichterman: Adjusted gross margin, excluding GCI was 53%.

Troy Wichterman: GAAP operating expenses for Q1, 2024 were $41 9 million versus $51 3 million in Q1 2023.

Troy Wichterman: The decrease compared to the prior year was largely due to reduction in head count that took place at the end of Q3 2023.

Troy Wichterman: Adjusted operating expenses for Q1, 2024 totaled $21 6 million compared with $24 6 million in the prior year.

Troy Wichterman: Our adjusted operating loss for the first quarter of 2024, it was $9 1 million compared with $10 6 million in Q1 2023.

Troy Wichterman: Our GAAP net loss was $10 2 million in Q1 compared to $13 7 million in the prior year. The decrease in net loss was primarily due to lower personnel expenses.

Troy Wichterman: Adjusted EBITDA for the first quarter of 2024 was negative $1.2 million compared with negative $1.1 million in the prior year. Adjusted EBITDA remained flat from the prior year due to lower personnel costs, partially offset by lower revenue from our cell processing platform. Our adjusted EBITDA decreased $1.9 million sequentially from Q4 2023, primarily due to an indirect tax true-up and a 2024 bonus accrual. Adjusted EBITDA excluding GCI was positive $3.6 million, or 13% of revenues excluding GCI for the quarter.

Troy Wichterman: Adjusted EBITDA for the first quarter of 2024, it was negative $1 2 million compared with negative $1 1 million in the prior year adjusted.

Troy Wichterman: Adjusted EBITDA remained flat from the prior year due to lower personnel costs.

Troy Wichterman: Partially offset by lower revenue from our cell processing platform.

Troy Wichterman: Our adjusted EBITDA decreased $1 9 million sequentially from Q4, 2023, primarily due to an indirect tax true up and a 2020 for bonus accrual.

Troy Wichterman: Adjusted EBITDA, excluding GCI was positive $3 6 million or 13% of revenues.

Troy Wichterman: Including GCI for the quarter.

Troy Wichterman: Turning to our balance sheet, our cash and marketable securities balance at March 31st, 2024 was $46.1 million, compared with $52.3 million at December 31st, 2023. Taking into consideration our adjusted EBITDA of negative $1.2 million, cash use in Q1 2024 was primarily related to working capital of $2.6 million, financing payments of $1 million, and capital expenditures of $900,000. Our SBB long-term debt balance was $20 million, which is interest-only through Q2 2024, with quarterly repayments of $2.5 million beginning in Q3 2024.

Troy Wichterman: Turning to our balance sheet, our cash and marketable securities balance at March 31, 2024 was $46 1 million compared with $52 3 million at December 31 2023.

Troy Wichterman: Taking into consideration our adjusted EBITDA of negative $1 2 million cash used in Q1, 2024 was primarily related to working capital of $2 6 million financing payments of $1 million and capital expenditures of 900000.

Troy Wichterman: Our SCB of long term debt balance was $20 million, which is interest only through Q2 2024 with quarterly repayments of $2 5 million beginning in Q3 2024.

Troy Wichterman: Turning to 2024 Revenue Guidance. We are affirming our previous guidance, which is based on expectations for a self-processing and bio-storage services platform and does not include any revenue from the freezer product lines. The Biostorage Service Platform now includes the FastR Automated Filing Devices product.

Troy Wichterman: Turning to 2020 for revenue guidance we.

Troy Wichterman: We're affirming our previous guidance, which is based on the expectations for our cell processing and bio storage services platform and does not include any revenue from freezer product lines.

Troy Wichterman: The bio storage service platform now includes the <unk> automated thawing devices product line.

Troy Wichterman: Total revenue is expected to be $95.5 million to $100 million, reflecting an overall growth of 2% to 7%. Our self-processing platform is expected to contribute $66 million to $68.5 million, or flat to 4% growth over 2023. Our Biostorage Services Platform is expected to contribute $29.5 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, growth margin, and adjusted EBITDA growth throughout 2024.

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

Troy Wichterman: Our cell processing platform is expected to contribute 66 million to $68 5 million or flat to 4% growth over 2023.

Troy Wichterman: Our bio storage services platform is expected to contribute $29 five to.

Troy Wichterman: To $31 5 million or 5% to 12% growth over 2023.

Troy Wichterman: On a like for like basis growth of 10% to 16%.

Troy Wichterman: In addition, we expect revenue gross margin and adjusted EBITDA growth throughout 2024.

Troy Wichterman: Finally, in terms of our share count, as of May 3rd, we had 46 million shares issued in outstanding and 48.7 million shares on a fully diluted basis. Now, I'll turn the call back to the operator to open up for questions.

Troy Wichterman: Finally in terms of our share count as of May three we had 46 million shares issued and outstanding and $48 7 million shares on a fully diluted basis.

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

Operator: At this time, we will conduct the question and answer session. If you would like to ask a question, please press star 1 on your phone now, and you will be placed in the queue in the order received. Once again, to ask a question, please press star 1 on your phone now. And the first question comes from Paul from KeyBank. Please go ahead, Paul.

Troy Wichterman: At this time, we will conduct a question and answer session.

Paul: If you would like to ask a question. Please press star one on your phone now and you'll be placed in the queue. In the order received once again to ask a question. Please press star one on your phone now.

Operator: And our first question comes from Paul from Keybanc. Please go ahead Paul.

Paul: Hi Rod. Could you see the result of higher biotechnology financing in 4Q? And specifically, there seemed to be a big uptick sequentially in cellogene as well. But did you see that yet? Hey Paul.

Paul: Hi, Rod.

Paul: Could you see the result of a higher.

Paul: Technology financing and <unk>.

Paul: And specifically there seemed to be a big uptick sequentially in cell and gene as well, but do you see that yet.

Speaker Change: Yeah, Hey, Paul I think if we were going to see that we would see it.

Roderick de Greef: Hey, Paul. I think if we were going to see that, we would see it in the sequential increase from our largest distributor, which we look at as a proxy for sort of that academic early stage biotech market segment, if you will. So we did see an uptick there sequentially. So to the extent that they raised capital, it flowed through, and it allowed them to, you know, start or continue their operations.

Roderick de Greef: In the sequential increase.

Roderick de Greef: From our largest distributor, which we look at as a proxy for sort of that academic early stage biotech.

Roderick de Greef: Market segment, if you will so we did see an uptick there sequentially. So to the extent that they raised capital that flowed through it allowed them to start or continue their operations clinically.

Paul: And what's your view on, I think you would have mentioned in the past exiting Q4 at a 20% EBITDA margin. Are you still thinking that's possible? And what do you think the business really drives at in the long term EBITDA margin?

Roderick de Greef: And what's your view on I think you would in the past had mentioned exiting.

Paul: Q4.

Paul: 20% EBITDA margin are you still thinking that's possible.

Paul: What do you think the business really drive that long term on EBITDA margin.

Roderick de Greef: Yeah, well, we're certainly committed to that goal, Paul, of hitting adjusted EBITDA with the two in front of it by the end of next year. Clearly, that's going to be driven and dependent upon the overall media, in particular, media revenue growth between now and the end of the year because that's really the financial engine. You know, longer term, it's all about the growth in media, and the flow-through of that revenue stream is outstanding. So, could we get to adjusted EBITDA with a three in front of it for the end of 2025, early 2026? I think that it's achievable.

Paul: Yes, well, we are certainly committed to that goal.

Roderick de Greef: Paul of hitting our adjusted EBITDA with a two in front of it by the end of next year, clearly that's going to be driven and dependent upon the overall media in particular, the media revenue growth between now and the end of the year, because thats really the financial engine.

Roderick de Greef: Longer term, it's all about the growth on the media and the flow through of that of that revenue stream is outstanding so could we get to our adjusted EBITDA with a three in front of it toward the end of 'twenty five early 26, I think thats thats achievable.

Roderick de Greef: And lastly, as Goodyear Gary on the call Gary.

Gary Richardson: Lastly, it's good to hear Gary on the call.

Speaker Change: What do you see on the competitive front is it still a homebrew or others trying to enter it.

Paul: What do you see on the competitive front? Is it still homebrew, or are others trying to enter it? What's the nature of competition? Good you've seen it.

Paul: What is the nature of competition.

Speaker Change: You've seen.

Gary Richardson: Yeah, Paul, nice to meet you. So I think our strategy is really primarily around protecting, growing, and leveraging our biopreservation media. And I think that is the focus, and making sure that we do protect that position long term. So I think we're committed to making sure that we remain the primary leader in this space. So, I think, as far as I'm concerned, that's, that's my primary objective to keep us exactly where we are today.

Gary Richardson: Yes, Paul Nice to meet you. So I think I think our strategy is is really primarily around protecting growing and leveraging our bio preservation media and I think that is the focus and making sure that we do protect that position long term. So I think we're committed to making sure that we remain the primary leader in this space. So.

Gary Richardson: I think as far as I'm concerned that's that's my primary objective to to keep us exactly where we are today.

Speaker Change: Okay. Thanks.

Jacob: And our next question comes from Jacob from Steve and Zink. Please go ahead, Jacob.

Gary Richardson: And our next question comes from Jacob from Stephens, Inc. Please go ahead Jacob.

Hannah: Hi, good afternoon. This is actually Hannah on behalf of Jacob.

Jacob: Hi, Good afternoon. This is actually Hannah on for Jacob Thanks for taking my question.

Hannah: And is there any update on the sale of CBS.

Hannah: Back to complete this transaction in the near term and do you still expect cash proceeds.

Roderick de Greef: Thanks for taking my question. Is there any update on the sale of CVS? Do you still expect to complete this transaction in the near term? And do you still expect cash?

Hannah: Yeah Hannah.

Speaker Change: Thanks for the question, we're right in the middle of.

Speaker Change: This process of divesting CBS and because we're right in the middle of it I'm going to be fairly circumspect in what I say, which is not a lot.

Hannah: Yeah, Hannah, thanks for the question. We're right in the middle of this process of divesting CBS, and because we're right in the middle of it, I'm going to be fairly circumspect in what I say, which is not a lot. We do expect cash proceeds from it, albeit modest. With respect to timing, I think it's fair to say that I've been overly optimistic when it comes to trying to, you know, define what the timelines are for these divestitures.

Hannah: We do expect cash.

Hannah: Cash proceeds from it albeit modest.

Hannah: Sure.

Hannah: With respect to timing I think it's fair to say that I have been overly optimistic when it comes to trying to.

Hannah: Define what the timelines are with these divestitures, but what I will say is what's important that we did recently is to reduce operating expenses at CBS by $1 $2 million per year, which immediately makes CBS slightly.

Hannah: But what I will say is that what's important that we did recently is to reduce operating expenses at CBS by $1.2 million per year, which immediately makes CBS slightly positive from an adjusted EBITDA perspective. So to the extent that it takes us a little bit longer than we originally anticipated, it will not be that cash burden that we've seen in the past.

Hannah: Positive from an adjusted EBITDA perspective, so to the extent that it takes us a little bit longer than we originally anticipated it will not be that cash burden that we've seen in the past.

Roderick de Greef: Great, thanks. And then some of the traditional bioprocessing players have pointed to a pickup in orders. Is there any way to speak to what you're seeing in the order book as we think about the potential for a back half recovery?

Speaker Change: Great. Thanks.

Roderick de Greef: And then Tim the traditional bio processing players have pointed to a pick up in orders is there any way to speak to what youre seeing in the order book as we think about the potential for a back half recovery.

Hannah: I think, look, the sequential increase is what we've been focused on and what we've talked about for the last couple of quarters here. The feedback that we have from our customers that are providing us with the rolling four-quarter projection is that the second half of the year continues to be more positive, which is what they've been telling us for the last two quarters, so nothing has really changed in that regard.

Roderick de Greef: Yes, I think look the sequential increase is what we've been focused on and what we've talked about for the last couple of quarters here.

Hannah: The feedback that we have from our customers that are providing us with the rolling four quarter projection is that the second half of the year continues to be more positive, which is what they've been telling us for the last two quarters. So nothing has really changed in that regard.

Hannah: Okay, great. Thanks. I'll leave it there.

Speaker Change: Okay, great. Thanks, I'll leave it there.

Speaker Change: Thanks Anna.

Matt: And our next question comes from Matt from Jefferies. Please go ahead, Matt.

Hannah: And our next question comes from Matt <unk> from Jefferies. Please go ahead, Matt.

Matt: Hey, thanks. Maybe one for you, Troy.

Matt: Hey, Thanks, maybe one for you as you think about the EBITDA margins in the back half of 2004, I think you guys had prior.

Matt: 16% to 18% range in the back half.

Matt: Made sense is that still the case and I guess could you just kind of help us bridge from.

Matt: From the 13% pro forma we saw on <unk> to the 16% to 18% in the back half is that entirely just mixed dynamics tied to media.

Troy Wichterman: Yeah, there are two aspects to that 16 to 18 percent we previously disclosed. One is that ELSO excluded CBS. So CBS is a financial drag, not to nearly the same extent as GCI, but it still drags down our margin percentages. That's one reason. And the other reason is what you pointed out, lower media sales in Q1 versus the first half of 2023. And then, as far as your question is concerned, too, is that a good number looking at the second half? Yeah, it would definitely be XCBS as well, which, as Rod mentioned, we're in the middle of that divestiture process, and our goal is to hit a 20 percent margin at the end.

Troy Wichterman: As you think about the EBITDA margins in the back half of 24, I think you guys had previously said that, you know, the 16 to 18% range in the back half made sense. Is that still the case? And I guess, can you just kind of help us bridge from the 13% pro forma we saw in 1Q to the 16 to 18% in the back half? Is that entirely just mixed dynamics tied to media? Thanks. Yeah.

Matt: Yes, there is two aspects to that 16% to 18%.

Troy Wichterman: Previously disclose one is that also excluded CBS CBS as a financial drag not to the nearly the same extent as GCI, but its still drags down our margin percentages. That's one reason and the other reason is what you pointed out lower media sales in Q1 versus that first half of 2023.

Speaker Change: And then as far as your question two is that a good number looking at the second half, yes, it would be definitely X GC or sorry, ex CBS as well, which as Rod mentioned, we're in the middle of that divestiture process and our goal is to hit a 20% margin at the end of Q4.

Speaker Change: Okay, great. Thanks, and then Rob maybe one for you just higher level with Sterling in the rearview now took a lot of time and energy that went into that deal would love to just hear a bit more about what youre focused on or excited from here, maybe some of the areas Youll look to spend some time on going forward. Thanks.

Roderick de Greef: Okay, great. Thanks. And then Rod, maybe one for you, you know, just a higher level with Sterling in the rear view now, you know, took a lot of time and energy that went into that deal. We'd love to just hear a bit more about what you're focused on or excited about from here. Maybe some of the areas you'll look to spend some time on going forward. Thanks. Yeah, you bet. I think we still need to finish.

Roderick de Greef: Yeah, you bet. I think clearly we still need to finish the divestiture of CBS. We are in the process of a pretty comprehensive strategic review of our product portfolio internally, so we're having some fun going through that process. I look forward to working with Gary and the marketing team on the initiatives that he mentioned, which, you know, market share is one measurement of our leadership position in biopreservation. But we have some things in mind that we're going to let loose here in the next quarter or two, which will sort of redefine that...the definition of leadership, it'll expand the scope of that. So I look forward to being involved in that too.

Rod: Yeah, you bet I think clearly we still need to finish the divestiture of CBS.

Roderick de Greef: In the process of a pretty comprehensive strategic review of our product portfolio internally. So we're having some fun going through that process.

Roderick de Greef: I look forward to working with Gary and the marketing team on the initiatives that he mentioned, which you know.

Roderick de Greef: Market share is one measurement of our our leadership position in bio preservation, but we have some things in mind that we're going to let let loose here in the next quarter or two which will sort of put that the definition of leadership. It will it will expand the scope of that so I look forward.

Roderick de Greef: Being involved in that too.

Speaker Change: Super Thank you.

Roderick de Greef: Beth.

Matt: And our next question comes from Matt from Craig Hallam Capital Group. Please go ahead, Matt.

Roderick de Greef: And our next question comes from Matt from Craig Hallum Capital Group. Please go ahead Matt.

Matt: Good afternoon. Thanks for taking the questions.

Matt: Good afternoon, thanks for taking the questions, maybe first up to extrapolate a little bit on the funding environment.

Matt: Obviously, there was an improvement in Q1 and I'm just curious historically, how long of a lag is it between when your.

Matt: Your customers and partners are seeing or <unk>.

Matt: Increased funding are feeling better about their balance sheets to win you know Charles are kicking off when you start to see those orders is it one quarter is it two quarters just help us think through the lag there.

Matt: Maybe first off, to extrapolate a little bit on the funding environment. Obviously, there was an improvement in Q1, and I'm just curious, historically, how long of a lag is it between when your customers and partners are seeing or increasing funding or feeling better about their balance sheets to when trials are kicking off, when you start to see those orders? Is it one quarter? Is it two quarters? Just help us think through the lag there.

Roderick de Greef: Yeah, it's a very tough question to answer with any level of specificity, but I would say that, and again, this is this market segment that would be coming through distribution, so I would say that it's probably two to three quarters. I think that's when we will see it really start to flow through, and that, you know, that's consistent with what our largest distributor is telling us with respect to a stronger second half of the year versus the first half of the year.

Matt: Yes.

Roderick de Greef: It's a.

Roderick de Greef: It's a very tough question to answer with any level of specificity, but I.

Roderick de Greef: I would say that and again. This is this is this market segment that would be coming through distribution. So I would say that it's probably two to three quarters.

Roderick de Greef: <unk>.

Roderick de Greef: That's when we see it really start to flow through in that.

Roderick de Greef: That's consistent with what our largest distributors, telling us with respect to a stronger second half of the year versus first half of the year.

Matt: Got it. And then, regarding the two new, um... Approvals. Here in the first quarter, customers are getting those therapies approved. How should we be thinking about the ramp from those products? I know at least one of the two has been pretty guarded in how they're talking about it, but how do you plan for that ramp? Is it something that you're... You have a little bit better visibility, and therefore, as you look out, whether it's later this year or next year, you start to anticipate that, or how should we as analysts be thinking about that ramp? Thank you.

Speaker Change: Got it and then regarding the two new.

Matt: Approvals here in the first quarter customers getting those therapies approved how should we be thinking about the ramp from those products I know at least one of the two has been pretty guarded on how they're talking about it but do you. How do you plan for for that ramp is it something that you are.

Matt: You have a little bit better visibility and therefore as you look out whether it's later this year or next year, you start to anticipate that or how should we as analysts be thinking about that ramp. Thank you.

Roderick de Greef: Yep. I mean, by definition, the ramp is built into not only our actual results, right, but what we are saying about what the future looks like. So the one you're speaking of specifically, you know, we talked about that one last quarter, and they definitely ramped up purchases at the end of 2023 in anticipation of what I believe they knew to be their approval coming down the pipe. And the visibility that we have is a rolling four-quarter forecast, non-binding, and that gives us a sense of how they think they're going to do.

Speaker Change: Yep I mean by definition the ramp is built into not only are our actual results right, but but what we are saying about what the future looks like so the one you're speaking of specifically.

Roderick de Greef: We talked about that one last quarter and they definitely ramped up purchases at the end of 'twenty three in anticipation of what I believe they they knew to be their approval coming down the pipe.

Roderick de Greef: And the visibility that we have as a rolling four quarter forecast non binding and that gives us a sense of how they think theyre going to do and so I can say with that particular customer as I did last quarter that the forecast is better than it was for 'twenty. Three so that suggests that you can kind of uptake or adoption of <unk>.

Roderick de Greef: And so I can say with that particular customer, as I did last quarter, that the forecast is better than it was for 2023. So that suggests some kind of uptake or adoption of their therapy. That's the best visibility we have.

Roderick de Greef: Their therapy, that's the best visibility we have.

Matt: Got it. All right. Thank you very much.

Speaker Change: Got it alright, thank you very much.

Speaker Change: You bet.

Thomas: And our next question comes from Thomas from Lake Street Capital. Please go ahead, Thomas.

Matt: And our next question comes from Thomas from Lake Street Capital. Please go ahead Thomas.

Thomas: And hey guys, appreciate you taking the questions. Rod, I think on the last call you mentioned that SciSafe facilities were running about 70-80% capacity, something like that. How do you guys think about not just when to pull the trigger on the next facility but what that trigger would be?

Thomas: Hey, guys I appreciate you taking the questions Brian I think on the last call you mentioned that south state facilities were running about 70% to 80% capacity or something like that how do you guys think about not just when to pull the trigger on the next facility, but what that trigger would be.

Roderick de Greef: Yeah, it's a good question. So, I think that with respect to the Boston facility, it's really a consolidation and increasing our capacity there by basically putting a mezzanine level into that building and not quite doubling capacity there, but certainly having a strong impact. The other is reviewing the New Jersey sites, which we have four of, which really do need to be consolidated into one larger facility. And I think we're in the process of working through what that could look like.

Rod: Yeah. It's a good question. So I think that with respect to the Boston facility, it's really a consolidation and increasing our capacity there by basically putting in mezzanine level in to that building and.

Roderick de Greef: <unk> not quite doubling capacity, there, but certainly having a strong impact. The other is reviewing the new Jersey sites that we have four of them, which really do need to be consolidated into one larger.

Roderick de Greef: Facility and I think we're in the process of working through what that could look like I'm, just going to pick some numbers, but let's say that currently we're utilizing 80000 square feet, we would be looking to perhaps least one building that would have 100 or 120000 square feet available. So therefore, thereby.

Roderick de Greef: I'm just gonna pick some numbers, but let's say that currently we're utilizing eighty thousand square feet. We would be looking to perhaps lease one building that would have a hundred or a hundred and twenty thousand square feet available. So, therefore, thereby taking up the existing capacity that we have, but allowing us to have a good, you know, forty or fifty percent more available.

Roderick de Greef: <unk> up the existing <unk>.

Roderick de Greef: Capacity that we have but allowing us to have a good 40 or 50% more available.

Thomas: Got it. And I apologize if I missed this, but, and I know Fostar is a very small product, but it has a disproportionate drag on the growth rate of your biostorage services unit or revenue line. Sorry. Any thoughts on what to do with that to maybe make it less of a drag?

Speaker Change: Got it and I apologize I apologize if I missed this but and I know <unk>, a very small product, but it has a disproportionate drag on the growth rate in your bio storage services unit.

Thomas: Revenue line, sorry, any thoughts on what to do with that to maybe make it less of a drag.

Roderick de Greef: Well, I think the drag ultimately comes from the fact that there are two varieties of that product. One is for vials, and one is for cryo bags. In October of last year, we made a decision to stop shipping the bag version of the device based on some quality issues that we had that we're working through. We didn't want to dig the hole deeper. We believe it has to do with the shipping of the units and the inability of the units to handle that transportation cycle.

Thomas: Well I think the drag ultimately comes from the fact that there are two varieties of that product. One is for vials and one is for cryo bags in October of last year, we made a decision to stop shipping the bag version of the device based on some quality issues that we had that were worth.

Roderick de Greef: <unk> through we Didnt want to dig the hole deeper we believe it has to do with with the shipping of the units and the inability of the unit to handle that transportation cycle.

Roderick de Greef: Nevertheless, I think longer term, what we're exploring is the idea that that technology would be unique to both the Celsio vials that we have and also the new, soon to be introduced LVC cassette that is an extension of the Celsio product line. And have it be dedicated to thawing those so it becomes more of a razor, razor blade model, as opposed to a standalone device that will thaw any cryogenic bag, which presents its own difficulties and challenges from a technological standpoint.

Roderick de Greef: Nevertheless, I think longer term, what we're exploring is the idea that.

Roderick de Greef: That technology would be unique to both the Celsius vials that we have and also the new soon to be introduced LDC cassette.

Roderick de Greef: An extension to the Celsius product line and have it be dedicated to find those so it becomes more of a razor razorblade model as opposed to a standalone device that will soar any cryo bag, which presents its own difficulties and challenges from a technology standpoint.

Thomas: Great, I appreciate you taking the questions. Thank you.

Speaker Change: Great I appreciate you taking the questions. Thank you.

Operator: And as a reminder, if you would like to ask a question, please press star 1 on your phone now. At this time, there appear to be no further questions. I'd like to turn the call back over to Rod for closing remarks. Thank you, Ross.

Speaker Change: You bet.

Thomas: As a reminder, if you would like to ask a question. Please press star one on your phone now.

Operator: Okay.

Operator: At this time there appears to be no further questions I'd like to turn the call back over to Rod for closing remarks.

Roderick de Greef: Thank you, Ross. I'd like to close by saying that, with the divestiture of Sterling and the growing strength of the fundamentals underlying the CGT industry, BioLife is in an excellent position to deliver strong financial results this year and into the future. We plan on leveraging our market-leading position in biopreservation to drive the adoption of the other high-margin, recurring revenue cell processing tools and services in our portfolio and expect those to provide an increasing amount of revenue and profitability in the future. Thank you for your time today, and we look forward to updating you on future calls and meeting with some of you at the upcoming investor conferences we'll be participating in during the coming months.

Rod: Thank you Ross I'd like to close by saying that with the divestiture of Sterling and the growing strength of the fundamentals underlying the CGT industry Biolife is in an excellent position to deliver strong financial results this year and into the future.

Roderick de Greef: We plan on leveraging our market leading position in bio preservation to drive the adoption of the other high margin.

Roderick de Greef: Recurring revenue cell processing tools and services in our portfolio and expect those to provide an increasing amount of revenue and profitability in the future. Thank.

Roderick de Greef: Thank you for your time today, and we look forward to updating you on future calls and meeting with some of you at the upcoming Investor conferences, we will be participating in during the coming months.

Speaker Change: Thank you.

Speaker Change: This concludes today's conference call. Thank you for attending.

Operator: This concludes today's conference call. Thank you for attending. The host has ended this call. Goodbye.

Operator: The host has ended this call.