BLFS - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 2018 BioLife Solutions Incorporated Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Roderick de Greef, Chief Financial Officer.

You may begin.

Roderick de Greef

Thank you, Sonia. of thank call joining and to for second and BioLife for financial everyone, the conference Solutions review quarter morning, you us for the results Good XXXX. the operating a Earlier this for three six and release summarizes ended XX. our the June press months morning, results which issued we

website announcing page a available biolifesolutions.com. growth investment strategy. at releases $XX are in of to BioLife also issued a capital our We by the support Relations Investor on our press release million cash and Both

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

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

directly alliance hospital our the and medicine domestic and most cell source network and best medicine indirectly through to we of of the yet results. contract the proprietary appreciate and for international are media XXXX nearly million. increased is with data call. to just market. total revenue regenerative cell and was this strong as million year Product published for you cell growth based revenue manufacturing To to our second segment the from we such with transplant and growth revenue excellent over sole cell and last X.X comprised position XXX% its report in market this stem in in a supplying Thank space segment, The centers XX% investments direct bio-preservation organizations therapy QX supplier year your our customers XXXX everyone. the medicine customers quarter regenerative XX morning Good pleased Rod. gene interest X we In our distributors. QX development [indiscernible]. growth of was the of therapy BioLife companies, in over is strategic very you, customers as QX. thousands gene report products We recap X market to are gained solidified QX quarter invested XX bottom over therapy billion top XX% regenerative and regenerative Thank joining QX medicine continued In new XXX% and new In QX gene with Today high year which segment. of over this year-to-date. demand drove and cites with of segment million X.X this and

used largest Refuge in trials bio-preservation media and early customer [ph], Therapeutics, proprietary have our stage included than higher that distributors therapy To-date is more we gene clinical AgenTus this listeners to several each Cell BioReliance, so Senti to XXX approved on BioSystems, especially their that cell $X million direct our a distributors. our range we our likely getting distributors at customer scale case of our annual greatly success products visibility most have customers reach. due imbedded and that manufacturing number full This Biosciences. exceed New believe with revenue We the Aduru remind and Orca $XXX,XXX distribute we to clinical Stem ship outliers I'll of application annual two in range. estimate demonstrated applications. with and potential revenue and bulk if and in the represents this we don't clinical have is products Biotechnologies been the and complete in end they users have MilliporeSigma, Technologies

two from revenue total XX% in distributor sales Fisher bio-banking that customer Over expect gene we leading flat proprietary relationships, commercial cell and limited that base, loop distributors to expect XXXX. talk contributed X% I'd revenue than clear are and last phenomenal channel established competition for compared additional discovery from and from and therapy the marquee our we for a Technologies, the To our year and last manufacturing successful growth X.X our customers the drug channel forecast agents more to approvals Based less lower VWR. segment on expect distribution our Key very throughout opportunity. or QX three revenue each sales contributed partners. and regulatory grew end leverage XXXX. have position several significant with with close XXXX partners of five strong XX% and international by and it's worldwide to the total of full distributors. of the in-direct year Stem a and continued Cell In Thermo critical in-direct channel about sales QX strong domestic the years MilliporeSigma, as our filings by possibility of of XXX% we on year. the marketing supplier year QX to growth additional this include [ph] like million we over This now we sticky sales revenue

earlier in talk Before our Capital Casdin share investment press will Rod announcing ask QX Rod? issued of to first about a by I today highlights release we $XX financial for the half I XXXX. million the

Roderick de Greef

Mike. Thanks,

of bio-preservation the noted a $X.X second revenue a last year. you increase reached XXX% the media representing quarter for As of million, record second XXXX over quarter

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

totaled the by The six to and both months primarily gross sold compared For margin XX% first cost compared for to QX $X.X we to higher in first on of of can in this blended of months million, million related gross operating margin higher leverage the year, XXXX. demonstrates for ASPs. revenue gross was $X.X The XXXX. reductions periods the margin compared XXXX driven volume goods in the achieve Operating expenses and QX XX% quarter of was product six second for levels. increase

six for management related primarily in of The of million performance to both totaled For million is operating months X.X the higher six to XXXX expense compensation enhancing periods X.X increase compared in expenses systems. increased the operating the first of our XXXX. months quality based first result costs and expense

second was $XXX,XXX in $X.X compared to operating quarter's XXXX. operating quarter The million the of an profit second loss of

that compared GAAP we $X.X for XXXX. profit really loss For to in time for full history the report the same have of company's the to six-month operating the an I'm first in period achieved operating profitability. $XXX,XXX pleased million totaled period,

common the to $X quarter or quarter million the for a share per this second attributable share. compares of to loss For shareholders $X.XX income $XXX,XXX per common of shareholders XXXX net net was attributable or diluted second $X.XX to

the of net For XXXX share loss quarter $XXX,XXX to per second $X.XX the compared first of last was a $X.X for diluted negative common months six shareholders positive same to $X.XX period year. attributable share or million in to $X.X the income net per $XXX,XXX last EBITDA was or year. compared million

by $X.X in XXXX. positive the Cash for months first XXXX. to compared totaled from of in operations $XXX,XXX $XXX,XXX negative the compared six second $X.X million flow of six For million cash the to quarter operations EBITDA was months used

six flow of million warrants months operations full XX and cash million release outlook early operations noted year. combination flow at from XXXX same was period June growth cash $XXX,XXX expect at compared our revenue used compared the from of last in bio-preservation the time in of resulted to million for The cash same to to year. proceeds the the cash XX.X preliminary respect X.X ending media this operations XXXX, representing outstanding exercise our now in we we With XX% XX.X and million July as of for year XX, year the between an to $XXX,XXX revenue by XX% last XXXX. range from to balance over For

primarily on XX year from our Given our the our gross increasing hiring this expectation to revised of of XX% plans range for to results to the months XX six year compared our earlier full operating million XX% we now EBITDA. between the flow X.X up we and to our Based previous XX% year. to from revenue margin year for last are to guidance X profitability and full to handle expectation first accelerated million our and expectations, operations for in to We expenses maintain corresponding of continued and fall full expect cash year compared increases XX million. operating million X.X for

We also expect to full the of for XXXX. year income achieve net

this fully our Casdin standard to share to per other underscores lock represent this and on were $XX proceeds fees diluted have of related investment or for of an less legal into Capital to share shares these million. the than to long a there up Other sell entered Casdin count X.X a issued term fundamental earlier enter strategy. increase fees agreement in morning we than at Finally placement, willingness million X% one year $XX as shares disclosed total into shares no Casdin expenses their

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

Mike Rice

Rod. Thanks,

revenues more our to to vision outline would create a take to to an enterprise. few back like even Turning to-date, minutes valuable I

time therapies. cell various The manufacturing opportunities and region bio-preservation fragmented. growth. Today to and supplier accelerate continuum cell material and a highly is and gene For therapy tools space in workflow side companies been media or manufacturing therapy acquire technologies the additional to some cell manufactured gene of now tool and offer source the preserve to we've services gene evaluating used we med

forward the growth. dose $XXX. share consolidation of new dose complimentary could scale update can we're times. confident leverage, tools our believe Executing share thank $XXX and opportunities efficiently and a We revenue to of synergies this to ability reaffirm per acquisition team several progress and tool including was Collectively like sustained cost initial our or out our Our process in We're and my million experience and shareholder of negotiated acquire have turn feel board of of growth increases, of and of and marketing of term support high our appropriate mentioned sales to optimistic Rod confident the on to this on benefits and significant We spend management in XXXX Capital increase the and to the XX the would will manufacturing technologies Solutions. in execute call to evaluating to long spend this combination fund evidence and with us We strategy allows BioLife the and the balance as operational approximately strategy To investment of Casdin by look and million million we to for strategy M&A sharing drive interest a negotiation second XX additional excited We're strategy. Casdin continued our $XX our that cash help companies success $XX the ranges potential about our and at strategy so business announcements from scale. opportunities In an flexibility provide our period our support M&A initiate XXX. financial manage per company. half could closing to your growth guidance. the QX Rod financial members we our to several the about shareholders phase in profit you with value. heard integration

I turn to to the take call your will Operator over questions. Now

Sonia?

Operator

Instructions]. [Operator

first Janney comes question of Our Paul Montgomery. from Knight

now line open. Your is

Paul Knight

count about in Mike, the in and additionally what direct XX your of there quarter, mentioned then channel, customers what direct your the could new year? was first you distributor the had quarter versus the channel you talk that visibility is

Mike Rice

all and for example indirect are products distributors So their don't are on going customers distributors shipped number there to or calendar those the technology year of partners so shipped most most distribute Stem have of distributors we I I customers that they've where end our to those cases more updated to the although products than Stem Cell say again the unique XXXX and us large Cell our users. Technologies bulk know in and Sigma customers with product unique are will and in who own XXXX in mentioned as the four buy

for leverage, to with great reach, unique great their Additionally so it's forced products Sigma just XXX that's sales it's shipped teams our more a than multiplier users sure.

in direct goes and tech On reference gene on in therapy space validations these quarterly customer of and their and sure products, so to and how know results scientific side course we're the products know cell customers everything of where engaged our how use the interpret in and and intensive actually of make we support support to and so to use the their [ph] our forth. filings the

customers. terms in but the number of is total in perhaps QX the specifically fourth or the of cell in XX been new more believe could in say of In have last customers I and trend, therapy new quarter and importantly it XX year and that I'll over more gene so

XX that year customers awareness customers were in performance the gene so and evidenced quarter of in trade marketing, it's done, our and our products. accelerating the show of data we products were is for our of customers publishing cell the in XX efforts So therapy in and our cell rate on just quarter new activities, the the customers of and concluded those therapy XX gene QX first this

So it's working.

Paul Knight

cell wonder they And capital, Could companies Are are these on of talk is you've the typical market. Mike? size you lastly raised million? size businesses what million, gene XX they the obviously therapy in revenue to X then and

Mike Rice

Sure.

more short foremost that revenue to to a clearly see generating our on the and path companies be first mid-term can is outlier So in terms and focus to at going the revenues least in a or companies we revenue million of could million sure someone of companies on greater than are or X to these the there which XX be for side much that.

envision could you and evaluating. run know number that hits we're of opportunities you home solid a So there a base few

Operator

Thank you.

of comes Our next Maxim Jason McCarthy from Group. question

Your now line open. is

Jason McCarthy

in see therapy accelerate like I'd to would first expect you for this Do the how and growth to keys [ph] space, the cell traction. are you the and how approvals gaining So slowly view card steadily to translate space BioLife?

Mike Rice

who this the track know a proven encouraging. in which cell data of with new therapy go follow but we space Phase approval with GSK of Strimvelis first and Luxturna, basis for and a all those us few years compared witnessing of gene fast Spark wave tracked to [indiscernible] clearly previous with you at way So fast development that relatively the of was sort several that were the so Therapeutics' that the least really X remember were is

the friendly Europe so implemented in well only now remarks Conference So in you Gottlieb's we have see more I of be Commissioner starting we're to he of tracked may that and FDA is pathway months regulatory heard the you Bio now that so for know fast some think help outlining new extent. as mechanisms seeing a will in just and U.S. sure few approval the same where was at Japan some certainly a of ago to

Jason McCarthy

acquisitions if question quick best can kind another know just then detail you so before, on to the little and help technologies And model or us that would you. forward? I assets mentioned more view just a what these going business on complementing the growth Thank current like drive how you could of Okay. give potential you as for

Mike Rice

Sure.

that or minute speaking in we're but getting we to a coming because it's in other a too the through with patient therapy whether dose caveat without allogeneic or of the whether it's broadly cell a the administration patient. of transportation gene some source that's tool all [indiscernible] shouldn't manufacturing autologous that the little broadly about competition starting therapies service material biological the any specific make it's or material interested and I'll of early to acquisition and used and way in from So or because speaking the collection

be be that very high So those be sticky. and could reagents, could that those could from some are there are value those also suppliers ancillary be containers, services devices high impact could and

after synergies us a engaged of in companies do get growth if to into identify we increase then and through is share with is some space and do marketing then least there, an in successful appropriate strategic so gene at M&A and regen same which to can for complemented this eye smart and now It's cost per are want sales correctly are we're their space, at we will that dose space fact the if an is that side out the activities, times for selling strategy right we think teams, leverage our therapy we market the tools we supplier again we spend very fragmented what cell So the activity. who basis. products opportunity get the toward the there's

Operator

comes Kalia of Our Suraj question from Northland first Securities.

Your open. is line

Suraj Kalia

was So the increase in what ASP?

Roderick de Greef

It small sequentially. very and was about X% increase year-over-year

Suraj Kalia

articulated customer the this increasing Mike, some you where that Can your your customer markers us currently XXx of how M&A to strategy. how we give so M&A Xx strategies overtime. what through revenues per you've strategy and of per gauge can revenues customer, shapes per revenues stand

Mike Rice

to Suraj. Happy Sure.

the range that how pay simple do it's or the a of dose what price $XXX,XXX So the per manufactured of customers the there, we it's source material a just used the about math is times of volume really mil. given product BioLife current piece included $XXX,XXX preservation so to in it's get in

organic that were for to Xx to could to easy there a evaluating that are we that the a expand really about So range. again current and of us products be XXx in with some opportunity identified think to of terms real and our companies

Suraj Kalia

Got give [indiscernible] it. trial? did update it Mike, ID an on but maybe I you missed

Mike Rice

in patients in and say that of is knee I the that a Colen trial for again the [ph] around somewhere not the I Suraj Phase XXXX initiation I so. Phase X of but patients recently FDA osteoarthritis that or colon enrollment of X believe the estimated VAS did dosing can approved

So underway clinical and just to enrolled believe different number now the be not perhaps I XX and at patients where be will they're centers if in I'm maybe getting able centers. of than U.S. the more mistaken as XX

Suraj Kalia

ownership Got level you morning? it. Thank of my what Casdin's the finally is announcement for this this Rod, And after questions. taking

Roderick de Greef

I they're XX%. think right or XX% around

Operator

[Operator Instructions].

Our Dupuis from question of B. FBR. comes Riley first Dylan

Your line open. is now

Dylan Dupuis

obviously those strategy, it using stage products opportunity guys to later how see products are question stage [ph] going of resources do commercial just products opposed as low go terms quite maybe and fruits general C&G more earlier research stage as in is one there products stage after use but you not after your whether as versus early about So the the you products hanging a to later resources being better of of protocols stage rigid? economic are

Mike Rice

So us at X have that most therapy and for those it's impossible baked development the while we for the it's of perhaps of Phase after capture some therapy Dylan services and been to of not is stage the go cell difficult. tools and into gene way look later or example protocol process

You sponsors making can those changes submission. final BLA a you imagine about know leading trial up any are to nervous

aim our preservation for So versa. the carried competing be really to as stage much vice later group as to our products they're many early into baked their a easier us than through as catch to get as media in displace all possible can way. protocols home media and would It and trial our is so we products try current preservation

so products, with think and the we FDAs be very the just other our I believe ultimately a to and why so data familiar the one and pressure direct pre-formulated here's will preservation, forth composition, the indirect that. preservation the world around move regulatory the and of example that to and efficacy there So optimized formula, chemical are

cure reimbursements of paid. be these So where a doesn't I get to call and paradigm with gene on we're blunt pay respond companies patient or don't what the cured per not about, cell negotiated the the situation really based efficacy would have really if hasn’t political therapies present to companies

the make So aware that BioLife? as be cancer trip otherwise these tools are for patient media they whether make infused can that and to to clinic as therapeutic cells whatever the to cure or dead means achieve response That to many using sure don't what or really possible right to the for does they that companies it's sure cells actually that containers mean are and example need or they're so sensitive survive after. the

quarters make the out best to the So years over next and there come going have and I several using really think customers platform pressure sure tools drive adoption. to preservation best is that we the to that help are

Roderick de Greef

with respect on Dylan, or negatively definitely profitability BioLife pretty to achieve worked profitability I'd focus that for earlier progress the to potential so to we've when products that versus transactions companies hard look stage know and like to from add we impact you to made that not perspective. your sensitive know stage a later we're you at we've

generating bias versus towards revenue science So there's projects. definitely a opportunities

Dylan Dupuis

then for is And pops of at much of margin then leverage numbers, of of see to your gross of by one price advantage costs some versus you been or at other in this XX% variable how driven able the mid-XXs? your out is of question say average gross certainly kind the peaking me, increase page guys kind margin of and is the looking where you take the that out operating all the sales affecting reduction

Mike Rice

the which being it's produced increased to the demand definitely so product. is function support the increased of Yes for a volume

we're levels these have production but that say opportunity margin I we of would now fair million for and year's hit think if that based in forward. we that get have million, right we to going want increase XX% really go about them the So revenue the margins annualized in that that. flows low that perhaps know XX through where XXs for so stated double see you of to the I we the to see how on want time expansion past were see at terms first mid-XXs would even the into as that in XX we significant of I last don't few can to we we next quarters to and Dylan, maintain margin

Operator

a Montgomery. Knight question Thank Janney from you. follow-up have And of do Paul we

is line open. now Your

Paul Knight

margin the in to Rod a look invest at op this Mike the want get when know impression and Hey, I etcetera. XX% I you distribution you quarter in little bit

effectively manage you around below at? that So trying are to where to slightly we're

Mike Rice

we have to for specific resources increase se they see the utilizing a think I revenue at if we sales constantly in if don't is can marketing Paul, that's instance going Well and we look to what per resources target if increase line.

we're number. what making focused is manage a sure versus to trying more particular positive to that So we any on going spend to have impact

Paul Knight

And investments make Okay. that that op to are line? trying what you you raised X.X expense million on

Mike Rice

include does increased revenue includes start looking it a we marketing sales additional to little effort the bit. and support it out organic area, some Well the and on a actually some based maybe different on creative ways QC some build to ways people in customer people activity are at the basis then

trade So activities certainly that. show increased like things

Paul Knight

you are one manufacturing juncture like today? where right? Are with capacity And running you shift this at

Mike Rice

That’s and correct. one one clean We're shifts room. running

into third capacity. room clean process the associated that to there second would fourth that up that the we're definitely are costs a full of fall We of with I that XX% running say the and are opening at XX% out will roughly and in but quarters

So is coming I down that from line. production to we of standpoint the a demand there's meet plenty think the feel runway

Operator

call Thank any to answer now conclude our would remarks. this further question to session. the for Ladies Mike turn Rice you. does gentlemen over like and I back and

Mike Rice

Thank day. everyone. you, Sonia and thanks Good

Operator

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

disconnect. have day. You a all great Everyone may

BioLife Solutions (BLFS) 10 Aug 182018 Q2 Earnings call transcript