Cryoport, Inc. — FY2022 Form 10-K
Business and reporting period. Cryoport provides temperature-controlled logistics, packaging, storage, cryogenic equipment, and related services to life sciences customers in biopharma/pharma, animal health, and reproductive medicine. This annual report covers the year ended December 31, 2022; fiscal Q4 ended December 31, 2022. The company reported one operating segment.
Financial performance
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue | $237.3 million | $222.6 million | +6.6% |
| Gross profit / margin | $103.9 million / 43.8% | $96.6 million / 43.4% | Margin +0.4 percentage points |
| Operating loss | $31.9 million | $17.8 million | Loss widened |
| Net loss | $37.3 million | $275.5 million | Improved; FY2021 included a $251.8 million debt-extinguishment loss |
| Net loss attributable to common stockholders | $45.3 million, or $0.93 per share | $283.7 million, or $6.18 per share | Improved substantially |
| Adjusted EBITDA, non-GAAP | $13.7 million | $21.2 million | Declined |
| Cash from operating activities | Use of $1.9 million | Provided $8.1 million | Decreased $10.0 million |
Service revenue rose 12.4% to $133.9 million; product revenue was essentially flat at $103.4 million. By market, biopharma/pharma revenue increased 7.6% to $193.9 million, animal health was nearly flat at $33.5 million, and reproductive medicine increased 9.7% to $9.9 million.
In Q4 2022, revenue was $60.4 million, gross profit was $26.3 million, operating loss was $11.0 million, and net loss attributable to common stockholders was $11.4 million, or $0.24 per share. Adjusted EBITDA was $0.7 million.
Liquidity, debt, and capital
- At December 31, 2022, cash and cash equivalents were $36.6 million, short-term investments were $486.7 million, and working capital was $563.3 million. Management said these resources and projected cash flows were expected to meet operational and capital requirements for at least 12 months.
- Operating cash use was affected in part by a $14.2 million increase in inventory, as the company secured stock amid supply-chain risks. Investing activities used $59.7 million; financing activities used $39.2 million, including $38.0 million for share repurchases.
- Total liabilities were $482.9 million. Convertible senior notes had a $406.7 million carrying value; principal outstanding was $402.5 million of 0.75% notes due 2026 and $14.3 million of 3.00% notes due 2025. The filing’s broader indebtedness-and-liabilities disclosure also includes trade payables and other obligations.
- The company repurchased 1.6 million shares for $38.0 million under a program authorizing up to $100 million in common-stock and/or convertible-note repurchases through 2025. It paid no common-stock dividends and does not expect to do so in the foreseeable future.
Changes, outlook, and material items
- Revenue growth reflected continued demand for services, partly offset by the New Prague manufacturing-site fire, foreign-exchange effects, and macroeconomic pressures. Management estimated the fire reduced 2022 revenue by about $9.4 million, mainly in Q1; production resumed in February and ramped up by late Q1. The company had received $12.9 million in insurance proceeds by year-end and recognized $4.8 million in insurance-related gains.
- Foreign currency reduced reported revenue by approximately $8.1 million, or 3.4%; revenue at constant currency was $245.3 million. Inflation and supply-chain constraints affected costs and product margins. Product gross margin declined to 43.7% from 45.2%, while service gross margin increased to 43.8% from 41.8%.
- SG&A increased 23.1% to $120.1 million, reflecting increased staffing, infrastructure, facility start-up, acquisition integration, and other growth investments. The company completed acquisitions of Cell&Co, Polar Expres, and Cell Matters in 2022.
- Management expects continued significant spending and near-term operating losses as it invests in supply-chain initiatives, geographic expansion, and technology. It anticipates that advancing clinical trials and commercialization of cell and gene therapies can support future growth, but the filing gives no specific 2023 revenue or earnings guidance.
- At year-end the company supported 654 clinical trials, including 79 in Phase 3, and ten commercial therapies. It identified risks including acquisition integration, component shortages, customer demand and commercialization timing, competition, cyber incidents, regulation, foreign-exchange volatility, inflation, COVID-related disruptions, and the Russia-Ukraine conflict.
- Management reported effective disclosure controls and internal control over financial reporting; the independent auditor gave unqualified opinions on the financial statements and internal controls. The auditor identified impairment testing of goodwill and intangible assets as a critical audit matter; no impairment was recorded for 2022.
Most important facts for investors to verify
- How the large short-term investment balance is invested, its liquidity and maturity profile, and the effects of interest-rate movements; available-for-sale debt securities had $24.7 million of gross unrealized losses at year-end.
- Whether operating cash flow improves as inventory builds, acquisitions, and expansion spending continue; assess the gap between positive adjusted EBITDA and operating cash use.
- Debt maturity, conversion, and potential dilution exposure, including the Series C preferred stock’s 4% paid-in-kind dividend and conversion rights.
- Progress in recovering MVE product revenue and margins after the fire, and the effect of ongoing supply constraints, foreign exchange, and customer caution.
- Whether clinical-trial activity converts into commercial therapy revenue and whether new facilities and acquisitions deliver expected growth and returns.