Cryoport, Inc. — 2021 Form 10-K Summary
Business context and reporting period
Annual report for the fiscal year ended December 31, 2021; quarterly figures below cover the three months ended December 31, 2021. Cryoport provides temperature-controlled logistics, storage, packaging, and related equipment for life sciences, including biopharma, animal health, and reproductive medicine. Following the 2020 MVE and CRYOPDP acquisitions, the company reports as one operating segment. It supported 602 clinical trials and eight commercial regenerative-medicine therapies at year-end.
Financial performance and liquidity
Amounts are in millions of dollars unless stated otherwise.
| Metric | FY 2021 | FY 2020 |
|---|---|---|
| Revenue | $222.6 | $78.7 |
| Gross profit / gross margin | $96.6 / 43.4% | $36.3 / 46.2% |
| Operating loss | $(17.8) | $(30.0) |
| Net loss | $(275.5) | $(32.7) |
| Net loss attributable to common stockholders | $(283.7) | $(75.0) |
| Adjusted EBITDA (non-GAAP) | $19.3 | $(0.04) |
| Cash from operating activities | $8.1 | $(14.9) |
- Revenue rose 182.9%; management attributed the increase principally to the MVE and CRYOPDP acquisitions, with organic revenue up $17.1 million, or 39.9%. Biopharma/pharma revenue was $180.2 million, animal health $33.4 million, and reproductive medicine $9.1 million.
- Q4 revenue was $56.4 million versus $48.4 million in Q4 2020. Q4 gross profit was $23.1 million versus $19.9 million; operating loss was $8.4 million versus $9.8 million. Q4 net loss attributable to common stockholders was $262.1 million, including the debt-extinguishment charge described below. Q4 adjusted EBITDA was $0.8 million versus $3.9 million.
- Gross margin declined year over year, reflecting the acquired businesses’ margin profiles and, during Q3, growth investment and supply-chain cost pressures. Full-year service gross margin was 41.8%, versus 46.6%; product gross margin was 45.2%, versus 45.1%.
- At year-end, cash and cash equivalents were $139.1 million, short-term investments $489.7 million, and working capital $650.9 million. Operating cash flow was positive despite the GAAP net loss, which included substantial non-cash charges.
- Total liabilities were $471.1 million. Convertible notes had a net carrying value of $404.2 million: $402.5 million principal of 0.75% notes due 2026 and $14.3 million principal remaining on 3.00% notes due 2025. Management stated available cash and short-term investments should fund operations and capital expenditures for at least three years, assuming no acquisitions.
Material changes, outlook, and risks
- Unusual debt transaction: In November 2021, Cryoport issued $402.5 million of 2026 convertible notes and completed a $248.9 million net-proceeds common-stock placement. It used proceeds to repurchase $100.7 million principal of 2025 notes for approximately $351.1 million. The transaction generated a $251.8 million GAAP loss on debt extinguishment, driving much of the reported annual and Q4 net loss.
- Acquisitions and expansion: 2021 acquisitions of CTSA in Australia and F-airGate in Belgium expanded the logistics network. Management planned to open purpose-built supply-chain centers in Houston and New Jersey and launch ELITE shipper products during the first half of 2022.
- Outlook: Management anticipated up to 19 Cryoport-supported BLA/MAA submissions during 2022 and described demand from advancing clinical trials and commercial therapy launches as a long-term growth opportunity. The filing provides no quantified revenue or earnings guidance.
- Subsequent event: A January 25, 2022 fire curtailed production temporarily at MVE’s New Prague facility. Production resumed the week of February 14; the company estimated a $4–$5 million revenue impact limited to Q1 2022 and expected insurance to cover most restoration and business-interruption costs.
- Key risks: Semiconductor and other component shortages, freight and inflationary costs, retirement of 2G/3G networks requiring equipment upgrades, COVID-19 disruption, acquisition integration, international and regulatory exposure, and product or shipment failures. The company also cited cybersecurity exposure and stated it does not carry cyber insurance.
- Ernst & Young issued an unqualified opinion on the financial statements and internal controls; management reported internal control over financial reporting was effective at year-end. No legal proceedings were identified as likely to have a material adverse effect.
Important facts for investors to verify
- Separate recurring operating trends from the $251.8 million debt-extinguishment loss and check the transaction economics, including the repurchase premium and remaining note terms.
- Review the composition, maturity, and market-value sensitivity of the $489.7 million short-term investment balance, and reconcile liquidity claims with planned investment and acquisition needs.
- Assess organic growth and margins independently of acquisitions, particularly service margins, product demand, and the impact of supply constraints and inflation.
- Track dilution and potential conversion of the 2026 and remaining 2025 notes, Series C preferred stock, options, and other share-based awards.
- Monitor the New Prague facility’s production recovery and the actual insurance proceeds and Q1 2022 impact against management’s estimate.