Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BioLife Solutions Inc (NASDAQ:BLFS) reported its fourth consecutive quarter of sequential revenue growth, with a 43% year-over-year increase in cell processing platform revenue.

• The company achieved a significant improvement in adjusted gross margin, reaching 54% in Q3 2024, up from 44% in the same period last year.

• BioLife Solutions Inc (NASDAQ:BLFS) announced the strategic divestiture of its biostorage business, which is expected to streamline operations and fortify the balance sheet.

• The company increased its cell processing revenue guidance for the full year 2024, reflecting strong performance and positive market trends.

• BioLife Solutions Inc (NASDAQ:BLFS) has a strong market position, with its biopreservation media products embedded in more than 70% of relevant commercially sponsored CGT clinical trials.

Negative Points

• The company reported a GAAP operating loss of $1.6 million for Q3 2024, although this was an improvement from the previous year.

• Despite the sale of the biostorage business, BioLife Solutions Inc (NASDAQ:BLFS) still faces challenges with its freezer business, which is considered a drag on long-term margins.

• The company's total revenue guidance for 2024 was slightly reduced due to a decrease in expected storage revenue following the sale of the biostorage business.

• BioLife Solutions Inc (NASDAQ:BLFS) is still in the process of exiting its remaining freezer business, which represents less than 13% of sales but impacts long-term profitability.

• The company faces potential risks from macroeconomic factors and industry-wide issues that could affect future demand and growth.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with BLFS.

Q: Can you frame up what pro forma gross margins look like post the sale of SSAE, and how should we think about any OpEx savings and depreciation going forward? A: We issued an 8-K earlier today that lays out all the details for different prior periods. For the six months of 2024, adjusted gross margin sans SSAE was 60% and an adjusted EBITDA margin of 13%. Going forward, we expect minimal impact on our adjusted EBITDA profile.

Q: With the destocking, we've seen some swings in revenue and growth over the last year. Can you frame up how we should think about long-term growth from here? A: We expect growth in 2025 and believe the destocking is behind us. We will provide formal guidance in early January.

Q: Post SSAE sale, what are the areas of focus, whether it be additional deals or capacity ads around the media business? A: The focus is on our cell processing product line, including biopreservation media and Sexton tools. We have capacity needs for biopreservation, and the sale of SSAE provides capital for this. Any M&A will focus on maintaining or expanding our market leadership in cell processing tools without negatively impacting our margin expansion trajectory.