Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions' Q4 2024 Shareholder and Analyst Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's call is being recorded. I would now like to turn the conference call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining the BioLife Solutions' 2024 fourth quarter earnings conference call. On this call, we will cover business highlights, financial performance for the quarter and full year 2024, and present 2025 revenue guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the fourth quarter and full year of 2024 and 2025 revenue guidance, which is available at biolifesolutions.com. As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC 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 de Greef, Chairman and CEO of BioLife.

Thanks, Troy. Good morning, and thank you for joining us for BioLife's fourth quarter and full year 2024 conference call. 2024 was a pivotal year for BioLife. Over the last 12 months, we strategically reshaped our portfolio, establishing BioLife as a leading pure-play enabler of cell and gene therapies, strengthening our long-term growth trajectory and unleashing the attractive financial profile of our streamlined operations. We executed in our core business evidenced by quarterly sequential Cell Processing revenue growth including Q4, bringing us to five consecutive quarters of growth and exceeding the high end of our already raised full year guidance for that platform. In parallel, we repositioned the company and optimized our portfolio, divesting non-core product lines to drive gross margin and adjusted EBITDA margin expansion. By completing the sale of two freezer product lines and our biostorage business, we not only emerged much more focused operationally, but also with a stronger and cleaner balance sheet, which when combined with positive cash flow from operations, makes us self-sufficient. I believe we are better-positioned today than at any other time in our long history. A summary look at our 2024 results, from continuing operations, when compared with our as-reported results in 2023 highlights the positive and material impact to our go-forward financial profile these divestitures have had. Although total revenue in 2024 was $82 million, compared with $143 million in 2023, due to divestitures, our GAAP gross margin doubled from 31% in '23 to 62% in '24, which generated absolute GAAP gross margin dollars of $51 million compared with $44 million in 2023. Our adjusted EBITDA in 2024 was positive $16 million or 19% of revenue, compared with negative $5 million in 2023. We also doubled our cash balance with the sale of non-core assets, ending 2024 with $109 million in…

Thank you, Rod. Today, we will be reviewing current and prior period financials from continuing operations for Q4 2024, which excludes financial results from Sterling, SciSafe and CBS. We reported total Q4 revenue of $22.7 million, representing an increase of 31% year-over-year. The year-over-year increase was primarily related to a 37% increase in our Cell Processing platform. Evo and Thaw platform revenue for Q4 was $2.4 million, a decrease of $200,000 or 8% from the same period in 2023. GAAP gross margins for Q4 2024 was 60% compared with 53% in Q4 2023. Adjusted gross margins for the fourth quarter was 63% compared with 63% in the prior year. Adjusted gross margin was in line with prior year, due to an increase in revenues offset by product and customer mix. GAAP operating expenses for Q4 2024 were $24.8 million versus $24.4 million in Q4 2023. Adjusted operating expenses for Q4 '24 totaled $15 million compared with $15.4 million in the prior year. GAAP operating loss for Q4 '24 was $2.1 million versus $7.6 million in the prior year. Our adjusted operating loss for the fourth quarter of 2024 was $0.7 million compared with $5.1 million in Q4 2023. Our GAAP net loss was $2 million in Q4 or $0.04 per share compared to $7.2 million or $0.16 per share in the prior year. The decrease in operating loss and GAAP net loss was primarily due to increased revenue and decreased personnel costs, including stock-based comp. This was partially offset by an increase in performance-based bonus accrual, in addition to increased accounting fees related to divestitures and SOX. Adjusted EBITDA for the fourth quarter of 2024 was $4 million compared with $3.7 million in the prior year. Our adjusted EBITDA increased primarily due to higher revenue, partially offset by $900,000 increase…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And today's first question comes from Matt Stanton at Jefferies. Please go ahead.

Hey, thanks. Maybe first one just on the margins, particularly the EBITDA margins. Any kind of finer point you can put around the continued expansion? I think you talked about the improving topline and mix dynamics there, but also some investment dollars into R&D. So, can you just talk a little bit about the pacing of that continued expansion through the year? And then any color maybe where we might look to exit the year here in '25 on the EBITDA margins? Thanks.

Yes, sure, Matt. I'll take that one. So, if you look at some of the commentary we made in the earnings call, there was an abnormal, I'd say, more one-time in nature-type cost in G&A being related to SOX and the divestiture accounting costs thereof, which we'll see some leakage of that in Q1. But if you take that Q4 number as a good jumping-off point for 2025 for SG&A, that would be a good jumping-off point. And then, for R&D, we didn't mention some development projects we're working on. So, if you take that Q4 2023 baseline for R&D, that would be a better baseline than Q4 2024 due to those development projects. And then as far as EBITDA margin expansion, yes, we would expect that, that pretty steady throughout 2025 as far as increasing compared to 2024 into that mid-20s that we mentioned.

Okay. Thanks. That's helpful. And then Rod you talked about the revenue opportunity to increase 2x to 3x by cross-selling the portfolio beyond just Media. Obviously, that doesn't happen overnight. It sounds like it's a big focus in '25. Can you just kind of talk about either the products or the customers where you're seeing the most potential to do that? And when we can maybe start to see some of the benefits of that cross-selling of the portfolio over time here? Thanks.

Sure. Well, thanks for recognizing that, it definitely takes some time, right, because our Media market position is so strong and so large that for us to start to come close to that is going to take multiple years. That said, we have a commercial customer, large company, that utilizes both CryoStor and our CellSeal vials in their approved therapy. And that's to us the poster child of what something should look like. On top of that, they are evaluating our automated fill system as they're focused on automating in a closed system, their manufacturing process, they're looking at that piece of hardware, which really drives a lot of consumables as well. So it's really about targeting the clinical trial customers that we have, directing the half a dozen sales force -- salespeople that we have to those accounts and put a focused push on introducing those products. We do have opportunity in our later stage commercial customers and the one I mentioned is one example, there's another one where we have a good traction on a CryoCase evaluation, which again was introduced last year, not for their commercial product, because as with the Media, as you get further down the clinical development chain to a commercial product, then you end up making it extremely difficult and costly to make a switch like that, particularly on a container for the end product, for the final drug product. So we are in discussions with them about introducing CryoStor into their commercial, into their clinical pipeline, which is not insignificant. So we're going to attack it from both sides, the early stage where it's less expense -- or less expensive and easier to switch and on the pipeline for the commercial therapy customers.

And just to clarify, Rod, meant to say CryoCase not CryoStor for the --

Thank you. CryoCase, yes.

Okay. Thank you.

Does that make sense?

Yes, that's helpful. Appreciate it guys.

Great.

Thank you. And our next question comes from Anna Snopkowski with KeyBanc Capital Markets. Please go ahead.

Hi. This is Anna on for Paul Knight. I want to ask on the momentum you are seeing in Cell Processing platform, you mentioned that this is the fifth quarter of consecutive growth. So, maybe just a little bit into what is driving this growth and increased visibility. Is it any one specific approved therapy or is it the overall health of the industry improving? Thanks.

You bet, Anna. Thanks. So we're seeing on the -- start with the non-approved therapy. So the clinical trial group of customers is slightly ahead and we expect slight growth there. Distribution, we expect to see some growth, but the fundamental driver we see for Biopreservation Media and Cell Processing general in '25 is that group of 17 commercial customers that we have in our base. That's where the bulk of the revenue growth is going to come from in '25.

Perfect. And then, could we get an update on your outlook over the long-term in terms of adjusted EBITDA margins, now that we've moved past certain product lines and the pro-forma business is coming into focus?

Yeah, sure. So, like we said, for the full year in 2025, we'd expect mid '20s for adjusted EBITDA. And then going outward, it's really highly dependent on Media Growth, as you know, there's a tremendous flow-through on the revenue for Media. So, we could model out Media growth at certain percentage points with that flow through of, call it, 65% on revenue to get to an expanded EBITDA margin with not huge increases in OpEx. So if you do model that out, you can get to the '30s, call it, in 2026 time frame towards end of '26, middle of '26.

Thank you.

Thank you. And our next question comes from Chad Wiatrowski with TD Cowen. Please go ahead.

Hey, guys. Yes, I just wanted to dig in on sort of Media growth and maybe less so for 2025 as it's mentioning it's going to be approved therapies driving growth. But just like at a higher level, when you look at like catalysts and clinical trials as some of these newer modalities are expanding into larger indications, could you just speak to maybe how Media is used differently between like a gene therapy, a CAR-T or like a TIL-based therapy, and kind of how BioLife is positioned to benefit respectively?

Yes. It's a good question. I think that really the product works across most cell types, in some instances better in some than others. That said, I think that the difference between the modalities and the cell type really comes down to the amount of CryoStor used per dose. And so when you look at Iovance's AMTAGVI which I think specifically states that they use CryoStor, I would say, that they are the largest user per dose of CryoStor versus a CAR-T, which would use less. So, it really comes down to the volume per dose and we're -- many of our customers seem to think that that's really confidential information. So, it's sometimes difficult to get exactly how much of our products is used per dose, which is why I made the comments I did there earlier whereas, AMTAGVI, for instance, in their FDA insert pretty well you could back into how much CryoStor is used very clearly.

Got it. And then, just on the Non-Media Cell Processing tools that you're trying to cross-sell, if home-brew is really the only alternative for Media, which has just created this dominant brand, could you speak to sort of the competitive profile of some of these other products? And what dynamics do you expect to come across, just trying to cross-sell? Thanks for the questions, guys.

Sure. I think on the -- let's talk about CellSeal vials. So the vials -- there are competitive vials out there. West comes to mind, they're a larger company. Our vials have certain attributes with respect to the materials used, the freezing profile, et cetera, when you have that frozen down with the final therapy. On the CryoCase side, that's clearly a direct competitor to cryobags, and they are very well-established and no doubt the most used final dose container. And in that regard, it comes down to the benefits of our CryoCase, which include an easier to work with form factor, particularly prior to freezing and the reduction or mitigation of shattering the dose if it's dropped in a frozen state. So there's no question that we're up against some well-entrenched, I guess, products, product lines and we feel pretty comfortable that the benefits that our products yield in combination with the push toward automation, which is another nice benefit that the CryoCase has relative to automating versus a bag. We think that those things over-time will drive adoption in addition to the fact that we are a credible supplier to these large commercial therapy companies as well as a lot of earlier stage companies.

Thank you. And our next question today comes from Matt Hewitt at Craig-Hallum Capital Group. Please go ahead.

Good morning, and congratulations on a strong finish to the year. Maybe first up, when you're talking about the growth this year, how much of that, if any, is related to some price increases? We've heard several companies here report over the past couple of weeks talk about implementing some price increases, call it, CPI adjustments, whatever. Are you including some of that into your model?

Yes. We do have our base price increase, which is, sort of, mid-single-digits, lower than previous years baked into that. And in addition to that, we've been on a push to alter some of the distribution and direct relationships that we have from a pricing standpoint given that they're legacy. Those won't really kick-in until the back half of the year into '26. So, pricing is definitely a factor, but the bulk of it is coming from the demand side in terms of volume.

That's great. And then maybe kind of a follow-up to that. As you look to grow the vials and the rest of the product portfolio, given your strength with the Media products, is there a way for you from a pricing perspective to kind of bundle the whole portfolio together and maybe you're giving a little bit here, but you're taking more there and ultimately, it's a win-win for everybody?

Yes. It's a good question as well. I think that those opportunities exist. I think that the decisions around for example, utilizing CryoCase, it really goes beyond just the price, because the benefits of using it would outweigh any kind of real price increase. And the fact of the matter is it may even be equal to or lower ASP per, let's say, per final dose on the container by switching to us. So we don't really feel the need to be discounting. In fact, what we're trying to do is go the other way and have the pricing that we have on our product line reflect the premium products that they truly are.

That makes complete sense. Congratulations again on the strong year and you must feel good looking out to this year and not necessarily having some of the distractions you were dealing with last year. So congratulations.

Thank you, Matt.

Thanks, Matt.

Thank you. And our next question today comes from Thomas Flaten at Lake Street. Please go ahead.

Hey, guys. Appreciate you taking the questions. Rod, just keeping in mind all the things you've noted about potential growth opportunities, particularly with the cross-selling, if you were to look at that 18% to 20% growth rate you've guided for 2025, where do you think that can go kind of in -- maybe not in an ideal world, but do you see that accelerating beyond that 21%?

I think over time, it can. It's going to depend, again, given that Media represents approximately 90% of the Cell Processing line at this point in time, it really is going to be driven for the next few years at least, the bulk of the growth is going to be driven by Biopreservation Media. And that really is dependent on the cadence of approvals and the overall demand for these therapies down the road. So that's number one, and that's really not in our control. What's in our control is to make sure that we're in as many clinical trials as we can be as they come online. I think with respect to Sexton, the growth there will be higher over time, and really it is going to take us, I would say, 24 months to 36 months to get well established to the point where as these therapies move through the clinical journey and the volume increases, not just for Media, but for these other tools, then you're going to start to see an acceleration of revenue growth rates beyond, I think where we are today. So I still -- I think we're about 24 months to 36 months away from kind of any material change in growth rate would be what I would say.

Got it. I appreciate that. And then just on the business itself, now that you've been -- you're a couple of months past the deals you've did in November, any more changes to the middle of the P&L that we should anticipate either positively or negatively?

No, the comments I made earlier still stand, Thomas, because those financials, as you know, are all continuing basis, right? So, that does strip out any of the divestiture entities from those financials as well as some people that went with those divestitures. So, it's a good baseline, as I mentioned for Q4 '24 annualized for SG&A. And then R&D, we will be putting more money into R&D this year compared to 2024.

Got it. Appreciate it. Thank you.

Thanks, Thomas.

Thank you. And our next question comes from Yi Chen at H.C. Wainwright. Please go ahead.

Good morning. This is Eduardo on for Yi. I guess, related to customer expansion, I had a question regarding any potential catalysts from your clients. Naturally, they get massive approvals or label expansions, that would be really relevant for your guys' projections.

Correct. It's really from a -- from the clinical trial customer base that we have, it's movement through the -- from Phase I to Phase II, et cetera, right? On the commercial side, once they're commercial, it's both time in terms of adoption, let's just say, in the United States, but then there are those other factors, geographic expansion around the world, movement up the line of treatments, those things are equally important to us in terms of the overall growth rate and adoption of those therapies as time goes by. Also a lot of the therapies end up several years later getting additional indications using the same drug, and that also opens up that pool of patients.

Right. And do you guys have visibility on whether or not any of those milestones or inflection points are happening in 2025 for your clients?

Yes. We think right now that we're -- we have visibility to what we believe are about eight of those of any one of those things happening in 2025. We track that as well as we can. The information is a bit opaque and we're actually working with a third-party consultant to try to more formalize a review of that on an every six month basis as opposed to trying to track it internally, which I think has given us less than fulsome data. So, I think we'll get better at that. But right now, what we're seeing is about eight over the next 12 months or the year of '25, I should say.

Got it. That's really helpful. And I know the clinical trial component of revenue isn't that significant, but just curious if you guys anticipate any complications with grant funding freezes potentially. I don't know if any of the clinical trials that your customers are running are dependent on government funding, but if you anticipate any complications associated with funding freezes?

Yes, not at this point. We're aware of the uncertainty around NIH funding. I think that to the extent that there could be an impact of that, I would say that it shows up on the distribution side of our business. We have two large distributors. I think they're very much focused on academic institution, early research. Those folks might have -- might be impacted by all of this. But in terms of our overall revenue, when we talk to our -- those two distributors, we don't get any sense that they're concerned about it at this point. That may change throughout the year. But right now I think it would come from a bit of a softening of demand on the distribution side versus the direct side. Most of our direct customers are privately funded.

Got it. That's helpful. And then finally, I'm curious strategy for Evo and Thaw, and if there's any potential if you have bundling products, you talked a little bit previously about kind of bundling packages with Cell Processing. I'm curious if these two would also fit into a strategy there to kind of increase your footprint with those products and services as well?

Yes. So on the Evo -- on the Thaw side, our Thaw device definitely could be viewed as almost a reverse razor-razorblade in the sense that it is designed now and has been modified to accept a CellSeal vial our product-line, our own product line for our [Technical Difficulty]. So you could look at it almost as a, you know, it's a nice add-on if you're using our CellSeal vials, it could be yet another just benefit of doing so. And it could also you -- be thought of as a razor-razorblade scenario in terms of if it gets placed, it can drive in some way, although I would say it's a pretty soft indirect way the utilization or the adoption of the [CryoSeal] (ph). On the Evo side of things, very little chance. The people that are making decisions around utilizing Evo are very different than the people that would be utilizing the CellSeal or other products, including Thaw. The decision makers are very different. So, there's very little opportunity to do that.

Got it. That's really helpful. Thanks.

Okay.

Thank you. And our next question comes from Michael Okunewitch with Maxim Group. Please go ahead.

Hey, guys. Thank you so much for taking my questions today and congratulations on all the progress.

Thank you.

I just would like to see if we could drill down a little bit. You mentioned that you're looking at a bit more R&D spend going forward versus the fourth quarter. So could you provide just a little bit more color on how you're planning to allocate additional spend? Is this more -- is this for new products or more just continued improvements on your existing product line?

Yes. It's really about expanding the consumable set of products that we have and acquired from Sexton. That would be the CryoCase to do some additional work on that relative to some customer feedback. It would be modifying the CryoCase for our own internal use on the front-end, in other words, shipping our CryoStor product out in a CryoCase. There are various benefits to that. It's about increasing the consumable line of products that are associated with our CT5 automated fill device. So, it's really, I would say, product line expansion as opposed to new products per se.

Okay. Thank you for that. And then just I want to see if you could remind us of your involvement with any mesenchymal stem cell-based products? I know that Mesoblast historically hasn't been a customer, but there has been a lot of gains of traction in that space. So, any additional color with your involvement could be helpful here.

Yes. I don't know if I can give you any in real time, but I can certainly follow-up with you on that after the fact, I'll sit with our folks that have managed the clinical trial side of things and have a chat with them and come back to you on that, Michael.

Certainly. Thank you very much for taking my questions, and once again, congrats on the progress.

Thanks very much.

And this concludes our question-and-answer session. I'd like to turn the conference back over to Rod de Greef for closing remarks.

Thank you, Rocco. In closing, 2024 was a year of strategic transformation and solid operational execution for BioLife. We see 2025 as an opportunity to solidify and leverage our market-leading position as an enabler of CGT therapies and position the company for long-term sustainable growth in both revenue and profitability. Thank you for your time this morning and we look forward to updating you as we move through the year as well as seeing some of you at the Cowen conference this week and other conferences throughout the year. Thank you.

Thank you. This concludes today's presentation. You may now disconnect your lines and have a wonderful day.