BLFS - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 BioLife Solutions Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Roderick de Greef, Chief Financial Officer. begin. may you Sir,

Roderick de Greef

release issued of XX. Good results the and to September BioLife for financial third summarizes operating Grace. joining we review you of biolifesolutions.com. is release available us and and afternoon, quarter the for for Investor which Solutions months our Relations at three page nine our results Earlier afternoon, press a you, ended This this thank everyone, for the the XXXX. on Thank the conference website call

As this on through days. reminder, will of call a XX and is available broadcast our the being live the be replay for recorded same link website. A webcast

Before performance to many this actual materially future These statements we everyone regarding results subject would will of remind statements or differ are other to that call, future the could the forward-looking get events during that cause to company. expectations. financial started, make I risks like we projections uncertainties and from and

the that discussion and this a statements are and statements of except that subject are any qualifies you therefore, forward-looking or assumes projections required update of projections I statements with and The made are SEC. other filings the based no affect and business forward-looking only filed as to risks that refer public these law. company the For to the on speak given. call, change periodic on statements Company’s Company and they forward-looking factors detailed as of date obligation by to our uncertainties

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

Mike Rice

quarter med continued QX. sequentially XXX% XX% same from increase from regen and high consecutive we our revenue the nearly are and interest your record QX financial revenues Most reached year. a revenue In results QX, appreciate over million the very for last reached almost We BioLife Total importantly, $X.X everyone. segment afternoon, and Good last pleased revenue. XX% grew $X report to operating Rod. we strong year. ninth of quarter new Thanks, of million, in

record from international a had our also of distributors. network We revenue

XXXX QX performance positive grow outlook, achieved Based a continued to growth flow guidance and ability for expanded few margin guidance a both continued performance on and we customers discipline will minutes. gain the in from segment, med our XXXX business in new manage providing a in In biotech QX, initial direct segment. our company a Our operations. new which of to we for are XX including and to in gain this manner. high gross provide XX We cash regen record in the demonstrate sales, the updating customers in Rod

clinical that of few now therapy several our a frozen and full, if companies the that types and Yescarta leading cell we’re trials. our their from release us have convert are shipping XXX report to dollar customers saw leverage. international network gene throughout Korea These size significant initial our expectations. in for cell support approval. technologies, storage commercial I respect enable and for our Denali, of with basis Sciences shipped we to HypoThermosol the scale growth marquee BioLife can process customer next cell approvals a have It’s manufacturing Neurona, providing regulatory received process in soon Invossa, the manufacturing frequency of regenerative as therapy excellent Life Batu in long-term track Kolon as product than Kite shows from to proprietary applications. CryoStor adoption Biotech, Both approval estimate Nohla, to proprietary CryoStor customers pleased freeze annual they and CAR form the the our Group, through that Yescarta. space Invossa and media our and our significant estimate customer and clinic. and approved QX, been embedding our Gilead any In by Biologics, a revenue including Science, their that knee and are in certain mediated received than or are osteoarthritis, revenue was proprietary into with the our embedded With remind increase CRISPR, at validation that media orders directly for product value, supplying I’m we and converging gene small you Pharma cell key announced more approvals also revenue that Unum. of we these SQZ distribution and past as for operating we timing Osiris, technical This we customer a Today in and previously first the guide too scientific approvals, and funding, are application for evaluation press are to part large the medicine represents X,XXX wave all progress record more in through Cellular are And media storage position While are quarters, freeze market. in keep and strong Biomedicine customer to a million, two we Semma, of T-cell region $X range we customers customers very therapies therapy Torque and in in the funnel acquisitions milestones startups and $XXX,XXX therapy but base, over a October enabling to to of is to B-Cell ability product lymphoma. distributors. encouraged

and our Now provide I’ll turn the guidance XXXX call for Rod review back results over to to XXXX. and financial

Roderick de Greef

Mike. Thanks,

record media last million, increase the third a third our quarter over reached the revenue you’ve year. quarter biopreservation representing for $X XXXX of XX% a of As noted

to our nine increased percentage $X months of of to periods For sales result the points distribution to space September for to nine regen months in compared the of last to XX% channel. revenue quarter third and The XX% the quarter for revenue the med margin from indirect up The our both was X customers XXXX for year. grew gross last primarily XX% direct in ended third XX, million the in period year. $X.X increase higher the million,

was For of months margin of compared primarily compared efficiencies margin increased manufacturing months year, this in of by The XXXX million, periods nine XX% driven in in in product and $X.X XX% for the XXXX. first both XXXX. the blended decrease expenses gross $X.X to gross XX% higher QX to million first totaled increase QX Operating of ASPs. was compared nine a to

both nine the from result first XXXX. expenses joint of loss nine XXXX, a For is million of third the $X.X in our million, of the $X.X for which expenses at quarter The periods which totaled a million primarily the XX% XXXX. months in last venture, operating months for was from of restructuring occurred operating of quarter decrease end year. XX% the of decrease a The was the in decrease $X.X operating $XX,XXX,

shareholders per net $XXX,XXX last share, to year. operating the was common a was period, for quarter XX% below nine-month million. $X.XX $X.X last loss which the third was loss months our operating to or represents equal like preferred attributable the includes X% to million attributable stock our the nine share For period XX% to payable improvement, $XXX,XXX for and The share, approximately the the calculation nine-month attributable three for common holder loss per shareholders or Series and of or to third redeemable to year’s nine-month $X.X to per or a loss for net compared $XXX,XXX Net quarter of compared for XXXX for point or would share million loss preferred per I to $X.XX out shareholders common stock. EPS of $XXX,XXX nine-month dividends $X.X share XXXX. the that per $X.XX charge in A $X.XX

quarterly to Adjusted we begin as end going forward, on over four-year year. of $XXX,XXX, to the dividend for quarter XX% continue we compared ratably year the to quarter this will net preferred decrease at incur although negative cash a permit. the was $XXX,XXX third to resources income horizon next third We last EBITDA as positive charge for stock redeem basis a the

XXXX. in was nine the negative compared months EBITDA million nine $XXX,XXX For $X.X first adjusted months the positive of to

that achieved of of cash by very positive flow the to of compares year. in we’re announce used the $XX,XXX quarter operations pleased Finally, to cash in $XXX,XXX we third which last quarter, third from operations

used months, million operations by to nine in was $XXX,XXX cash $X.X XXXX. this year compared the For

now to positive now expect the million, the over of exercise nine and flow compares results from As $X.X million and our margin full from at a gross of outlook growth We to XX% of XX% year between improvement of gross we With full the proceeds full in and in XX% on between to to the we in $X media year $X.X the previously and revenue additional $XX.X the $X.X We to of expect XXXX. million $X.X adjusted our XXXX. quarter. for full respect same to right months, growth Based XX% the year revenue Since of revenue operations achieving just in of our $XX to range expectation last result the realizing XX, of year the million XX% outstanding period our and proceeds excess original now $XXX,XXX received cash of quarter million, the to in proceeds revenue expectation to $X.X the million. warrants. range expenses for have an are million $XX and ended of XXXX, And compared cash guidance third the of warrants an maintain of the This and operating balance exercise quarter provided representing for to the in of year our of second compared we a margin XX% XX% September million million. EBITDA for bringing under XX%. $X.X narrowing from million. additional $X positive total expect previous first come we to million, range biopreservation from with

have our provide preliminary and Now at next for would like process largely we point, some XXXX to this guidance year. planning completed

in margin year continued the expect of We range between XX%. to gross margin revenue expansion full We media expect biopreservation over between gross XXXX million, anticipate and and increase which $XX.X $XX.X to and XX% a XXXX. XX% XXXX XX% throughout represents for million

we profit Importantly, achieve with a along to operating EBITDA in year results. expect GAAP full increase a our adjusted proportional

an our on provide XXXX earnings additional of will operating range expenses on expected next guidance We call.

Mike. to like turn back to I’d the over Now, call

Mike Rice

so accomplished pleased again, we far really all this Thanks with In closing, year. Rod. I’m

We proprietary high in a proven, great broad role with team customer our that sustained the business. BioLife has level it can at space, regen execute our and and med have grow products a huge plays a base.

We’re continued setting finishing BioLife this the even XXXX. positioned growth stage Solutions. and interest year your Thanks again are strong for better in on for an for well focused

operator Grace? Now questions. we’ll your take turn the call over to to the

Operator

Instructions] Montgomery. [Operator comes you. our question And Thank Janney first with Knight Paul from

is line Your open. now

Paul Knight

Hi, Mike.

Mike Rice

Paul. Hi,

Paul Knight

ramp to in have orders On Invossa quickly those and Phase And do how X, how Yescarta, then do you also that. customers on are up. think expect you many you estimate

Mike Rice

Paul. questions. Yes. Thanks, Good

still as great. patient the So Invossa, the to and Yescarta, learned try so it’s I was with revenue. yesterday Herald that’s regard first model again we with both to to early too can’t through say Invossa that we that injected said Korean

We’re we are with increase too encouraged doing again physician by prescribing so what Kite, adjust say, Kolon behavior early that. to With to and where adoption is to forth. there and that’s

many In they’re between how count Paul terms because XX on still really visibility. and have as difficult X a we we and also any in and is customers customers I many Phase although estimate calls, to accurate we mentioned don’t XX, have to to probably clinical get products we distributors again shipping sell previous of it it’s trials,

Paul Knight

And competition, as regarding competition question basically home would grow. be second then

Mike Rice

That’s right, Paul.

that products don’t compete. really have commercial that pre-formulated really We’re we fortunate any

on for ocean, of grown and traditional this up to them actually those is them this commercial use and grown companies. gone it’s training of these cocktails it work – people they obtained their as gone education So their to with of the with and lab transfer home to

that’s we’ve do paradigm so continue far shifting been can very think that the so. So and to we I successful

Paul Knight

And then last, regarding guidance.

feels year. in occur. You’re and the they were looking where at It gross we’re investing business next investment margin to like, a at XX% XX%

Roderick de Greef

built investment some it’s margin that here. Rod Paul, is assumption. into There

than our make to at be moving what with less in in to investing we we’re to trying think also we see there. respect system, commercial. which the to historically, given where be of would clients we’re enhance levels, looking in to has still bit One number impact COGS increasing variability I three that wanting money, our a in been With to from really conservative clinical areas. management sure that much early is quality production are but particular respect the stage does any at We’re XXXX, quarter. little conservative this it some It’s

The invest we second products place third our of then safety if stock issue would outside that for key will here. we redundant warehouse be And is with to factory have in make was there customers of an our the sure that area finally, equipment. here

make we given no equipment or production failure. quarter sure way impacted negatively that form So be shape with in in that some by any

are the mitigate the areas those overall that So looking business to risk. we’re at

Paul Knight

Okay, thank congratulations. and you

Roderick de Greef

Thank you.

Mike Rice

Thanks, Paul.

Operator

you. our Jason from next Maxim. And Thank question McCarthy comes with

is now open. Your line

Jason McCarthy

you? [indiscernible] like? my what sense you broad, your numbers but be may and lot T as when in XXXX, and get look ramp questions you I’m covered what a like There’s project Congratulations of are Yescarta. revenue the of, of we can quarter. BioLife. where sense on be can in space to if Can go we terms is revenue, CAR going T for are like they Definitely internally manufacture your CAR CAR How sure, guys. a give us it look may general. Hi, around for thinking to what more a space to Not ramp of look on that can could the own it guys signals T. a you question relates the in of mix is good not

Mike Rice

And CMO. Yes. scale, our All to their rely generalities, and some the I is companies it really Jason, here. whether manufacturing each to right. our parts. using draw their with our the because that They a Mike of It and – of forecast try to it’s hard customers our question, or on customers and try internally relationships can all really key using own own have to are that we are we current customers doing handful get. they’re schemes think to plans then

so And bullish been about what really we’re do so about far. able size and to good frequency feeling they’ve far, order order and

be is how So think position in space we do. to want the about try I to prognosticate don��t to going general

Jason McCarthy

where forward. little Okay, is fair of going bit enough. going on, how into the update T with And can Savsu an CAR you give that’s us and fit a to launch JV

Mike Rice

Sure.

is respect impact With JV has with still changer to over up are Dewars. the financials. and the restructuring talked the last it new launch as and which to. a liquid you of significant doubt, seen of nitrogen the colleagues So remember year at what Savsu end we’ve that about No as our is obviously Shipper, Dry EVO advantages the been, Vapor of we traditional positive revolutionary. It’s game our

that many You the EVO to or seen Dry version X-XC version. either press liquid platform, may customers the release have the that nitrogen about with of UCSF using EVO the Ice their interest use interest in and or media other CRT the part we are have albeit have

good forward tell adoption looking really able continued So news stories to EVO. with to about product being

Jason McCarthy

partnership a region the T know CBMG of the medicine, with opens of and again question, – more which of see are cell of the a whole one How into general, just broad, And players of significantly the seeing China on focus market, kind have lot Europe. can therapy CAR just but BioLife? companies Right. cell not CAR sort do we is lot I China. in regenerative all the and you fitting space through that just U.S. in China T not vertical therapy up you larger future be that in

Mike Rice

question really pivotal. a insightful I it’s and think It’s

was office grand for CBMG it’s and at I the and Just impressive. week And of very their opening corporate last in facility. Shanghai manufacturing

has And new of other the in China are XX from diagnosed go of this, And cancer every on speakers their the patients also I perhaps really a some there so in short pretty structure to management things And so period been in cost able some year. we’re like time. accomplish of impressed heard forth. facility there million of the a CBMG and with what

to we’re China. broaden still out footprint sorting So exactly, going we’re how in our

have relationships to there. We sell distributors direct have we

the CBMG. We with have great relationship

So the but more company. it that, to come is to strategically important on

Jason McCarthy

for bit on question guidance extends flow exchange some you turned saw one give have little little a where just you Can warrant that the cash. maybe Rod, of a how positive. And extra cash the bit and does company runway? raised And as us the Right. well, we quick did you that –

Roderick de Greef

$XX,XXX I this flow generated quarter think, we Well, from as Jason from mentioned I operations. cash

is that borrowing So the positive company flow from and flow bucking from the we’re we’re that expecting trends perspective, and cash XXXX. of my cash continue. seeing expect I to operations some that into positive

So million that bank the $X we number in positive. cash the would year compare cash the round perhaps expect with of as to that fact flow we are a end of

minimal Our CapEx are fairly XXXX. requirements in

don’t do cash future a runway the in we’re in good in for really the have of near the position and with matter. to financing sort pretty or any So I that and think plans future any respect foreseeable

Jason McCarthy

Thank for Great. you, guys quarter. questions, great the taking

Mike Rice

Thank you.

Operator

you. at like further not questions further remarks. I’d time. Thank the to any turn showing to Mike now this I’m for back call Rice

Mike Rice

All afternoon right. you everyone, Thanks again, and good Grace. evening. good Thank

Operator

Ladies thank concludes conference. today’s program. in and This participating you gentlemen, for today’s

You great have may disconnect. Everyone day. all a

BioLife Solutions (BLFS) 10 Nov 172017 Q3 Earnings call transcript