BioLife Solutions, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Amounts below are in U.S. dollars; financial statement figures are unaudited. BioLife develops and supplies bioproduction tools and services for cell and gene therapy and broader biopharma markets, including cell-processing products, freezers and thaw systems, storage services, and cold-chain shipping.
Financial performance
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Total revenue | $36.220 million | $16.847 million |
| Gross profit, calculated | $11.774 million | $9.297 million |
| Gross margin, calculated | 32.5% | 55.2% |
| Operating loss | $7.633 million | $0.981 million |
| Net loss | $7.066 million | $1.118 million |
| Basic and diluted loss per share | $0.17 | $0.03 |
| Operating cash flow | $(7.924) million | $1.820 million |
- Revenue mix: product revenue was $30.388 million, service revenue $3.090 million, and rental revenue $2.742 million.
- Cash and cash equivalents were $59.463 million at March 31, down from $69.860 million at December 31, 2021. Cash, cash equivalents, and restricted cash ended the quarter at $59.473 million.
- Investing cash outflow was $2.270 million; financing cash outflow was $0.181 million. Cash decreased by $10.375 million during the quarter.
- Total debt, net of issuance costs, was $6.870 million, including $0.557 million current and $6.313 million long-term. Current assets were $118.701 million and current liabilities $35.040 million.
Changes versus the prior comparable quarter
- Revenue increased 115%. Management reported 45% organic revenue growth, alongside contributions from the Global Cooling and Sexton acquisitions completed in 2021.
- Freezer and thaw product revenue rose 216% to $15.335 million overall, but organic freezer and thaw revenue declined 3%, with production delays attributed to supply-chain disruptions. Cell-processing product revenue rose 67% overall and 53% organically.
- Service revenue rose 40%, primarily reflecting the Netherlands storage expansion; rental revenue rose 216%, attributed to higher rental volumes and dedicated storage arrangements.
- Cost of revenue grew faster than revenue. The filing reports cost of revenue, excluding acquired-technology amortization, at 71% of revenue versus 48% a year earlier. Higher material costs, warranty expense, and a larger share of lower-margin acquired product lines contributed to margin pressure.
- Operating expenses increased 146% to $43.853 million. General and administrative expense rose 132%, sales and marketing 142%, and R&D 90%; management attributed much of the increases to acquisitions, added personnel, and higher stock-based compensation.
- Net loss widened to $7.066 million. Results included a $3.335 million non-cash benefit from a decrease in the fair value of contingent consideration, compared with a $0.491 million benefit in Q1 2021.
Outlook, risks, and other notable matters
- Management said available cash was expected to meet liquidity needs for at least 12 months from the filing date. The company may seek debt or equity financing for acquisitions or strategic investments; availability and terms are not assured.
- Management expects R&D, sales and marketing, and G&A expenses to increase as it develops acquired product lines and supports the larger business. No specific revenue or earnings guidance was provided.
- COVID-19-related supplier disruptions involving sheet metal and semiconductor-containing electronic components caused higher supplier pricing and production stoppages. Management warned that continued disruption could affect manufacturing, shipping, costs, and results.
- Two customers each accounted for at least 10% of Q1 revenue: one contributed 20% and another 11%. Two customers represented 16% and 14% of gross receivables at quarter-end.
- Disclosure controls and procedures were deemed ineffective because of material weaknesses in internal control over financial reporting. The company reported remediation of the logical-access weakness in certain financial systems, but the other identified weaknesses remained subject to planned remediation.
- The company reported no material changes to its previously disclosed risk factors, no significant pending or threatened litigation known to management, and no off-balance-sheet arrangements. It reported no subsequent events requiring recognition or disclosure.
Key investor verification points
- Assess whether organic growth can continue and whether acquired businesses can be integrated while improving gross margins.
- Track supply-chain constraints, production delays, material costs, and warranty expense, particularly for freezer and thaw products.
- Monitor operating cash use, working-capital movements, and cash needs against management’s stated 12-month liquidity outlook.
- Review progress in remediating the remaining material weaknesses and the effect of elevated stock-based compensation and acquisition-related amortization.
- Evaluate customer concentration and the assumptions underlying contingent-consideration fair values, including the reported $3.335 million quarterly remeasurement benefit.