BioLife Solutions Reports Eighth Straight Quarter of Record Revenue

BioLife Solutions (BLFS)

This morning, BioLife Solutions, Inc. (OTCBB: BLFS), reported results from operations for the second quarter ended June 30, 2012.  The Bothell, Washington-based developer, manufacturer and marketer of clinical grade hypothermic storage and cryopreservation freeze media for cells and tissues posted quarterly revenue in excess of $1 million for the first time in company history and notched its eighth straight sequential of quarterly growth.

Additionally, the company reiterated 2012 revenue guidance at $4.1 million and believes that it will achieve positive cash flow from operations by the end of 2012.

Other highlights for the quarter included completing the expansion of corporate offices and the build-out of its second current Good Manufacturing Practice clean room suite, hiring of additional staff to its production team and sales force and the commencement of deliveries to a new contract manufacturing customer.

Second Quarter Financial Results:

  • Total revenue for the second quarter of 2012 was $1.1 million, compared to $623,000 in the same period of 2011. The increase of 76% from 2011 to 2012 was due primarily to higher sales to customers in the drug discovery and regenerative medicine market segments, which were both up significantly over 2011, and the commencement of deliveries to the new contract manufacturing customer during the second quarter.
  • Sales to direct customers in the second quarter of 2012 increased 22% compared to the second quarter of 2011 and sales to distributors increased 79% compared to the second quarter of 2011.
  • Gross margin in the second quarter of 2012 was 41.5% compared to 53.6% in the second quarter of 2011. Gross margin was impacted this quarter by a combination of an increase in personnel costs included in cost of goods sold related to the ramp up of the production operation to facilitate the expected significant demand ramp from the contract manufacturing customer and by lower overall margin on contract manufacturing revenue. In addition, the Company incurred some one-time costs in the 2012 second quarter related to the facility expansion that was completed in early July.
  • Total operating expenses in the second quarter of 2012 were $762,000, compared to $594,000 in the second quarter of 2011. The primary driver for the increase in expenses was due to higher personnel costs in 2012 as the Company continues to strategically add to its sales and marketing team. This was offset somewhat by a reduction in consulting expenses due to the termination of a consulting agreement in the third quarter of 2011.
  • For the second quarter of 2012, the Company reported a net loss of $499,000, or $(0.01) per share, compared with a net loss of $437,000, or $(0.01) per share, for the second quarter of 2011. Loss from operations in the second quarter of 2012 was $307,000, compared to the $260,000 loss from operations in the second quarter of 2011.
  • The Company ended the second quarter with $155,000 in cash. During the six months ended June 30, 2012, the Company reported cash provided by operations of $686,000. Included in this amount was an increase of $785,000 in deferred rent, which represents the amount the Company’s landlord paid for certain tenant improvements related to the facility expansion. Excluding the increase in deferred rent, the Company used $99,000 in cash during the six months ended June 30, 2012, compared with $544,000 during the same period in 2011. The Company also recorded cash used in investing activities of $1.0 million, resulting primarily from purchases of property and equipment related. This is compared to purchases of equipment of $43,000 during the same period in 2011. Finally, during the six months ended June 30, 2012, the Company increased the total amount borrowed from investors by $475,000 compared to an increase of $620,000 during the same period in 2012. Of this amount, $300,000 was received in the second quarter of 2012.

Outlook for 2012:

  • Management reiterates its prior revenue guidance of $4.1 million, with significant sales to its contract-manufacturing customers. The Company also expects steady increases in revenue from existing and new direct customers, specifically in the regenerative medicine market segment, and continued growth through the Company’s distribution network.
  • The Company expects a rebound in gross margin from the second quarter, but expects gross margin to continue to be somewhat lower than 2011 as shipments to the contract manufacturing customer stabilize during the rest of 2012, with lower overall gross margin resulting from contract manufacturing revenue. Management also expects increased operating expenses associated with selling and product development activity for the remainder of 2012.

Mike Rice, Chief Executive Officer, commented: “Sales momentum continued to accelerate as we made significant investments in our infrastructure during the quarter that will position us for future growth, profitability and positive cash flows. Revenue in all of our channels was up over the same quarter last year, especially in the drug discovery and regenerative medicine segments. We also drove significant growth in our distribution channel with growing adoption of our flagship biopreservation media products. Overall, we are pleased that we are now well-positioned to capitalize on what could be substantial growth as some of our customers’ regenerative medicine therapies are approved in the future.”

BioLife Solutions (BLFS) Stock Quote and News:

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