Form 8-K BIOLIFE SOLUTIONS INC For: Aug 09
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 2018
BIOLIFE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-36362 |
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94-3076866 |
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(State or other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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3303 Monte Villa Parkway, Bothell, WA |
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98021 |
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(Address of Principal Executive Offices) |
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Registrant’s telephone number, including area code: (425) 402-1400
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 9, 2018, BioLife Solutions, Inc. (the “Company”) issued a press release announcing the financial results and operational highlights for the second quarter 2018. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K.
Item 8.01 Other Events.
On August 9, 2018, the Company issued a press release announcing that Casdin Capital LLC, a New York-based, life science-focused investment firm and current stockholder of the Company, has agreed to invest $20 million in the Company to support the Company’s growth strategy of acquiring synergistic cell and gene therapy manufacturing tools and services or technologies. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
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Description |
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99.1 |
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| 99.2 | Press release, dated August 9, 2018 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Biolife Solutions, Inc. |
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Date: August 9, 2018 |
By: |
/s/ Roderick de Greef |
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Name: Roderick de Greef Title: Chief Financial Officer |
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Exhibit 99.1
BioLife Solutions Announces Second Quarter 2018 Financial Results
Revenue increases 102% to $5.2 million. Net income of $1.0 million achieved
Full-year 2018 GAAP net income expected
Conference call and webcast begin at 10:00 a.m. Eastern time today
BOTHELL, Washington — August 9, 2018 —BioLife Solutions, Inc. (NASDAQ: BLFS) (“BioLife”), the leading developer, manufacturer and marketer of proprietary clinical grade cell and tissue hypothermic storage and cryopreservation freeze media, today reported financial results and operational highlights for the three and six months ended June 30, 2018.
Revenue from biopreservation media product sales for the second quarter of 2018 reached a new record of $5.2 million, an increase of 102% from the second quarter of 2017, and an increase of 36% from the first quarter of 2018. Revenue from biopreservation media product sales for the first half of 2018 totaled $9.0 million, an increase of 83% compared with the prior-year period. Product revenue growth for both periods was driven by sales of CryoStor® and HypoThermosol® clinical-grade biopreservation media to the high-growth cell and gene therapy segment, and to BioLife’s worldwide distributor network.
Second Quarter 2018 Financial Results
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Gross margin for the second quarter of 2018 increased to 70% from 63% in the second quarter of 2017, due to higher average selling prices per liter, and reduced COGS per liter resulting from higher production volume driven by increased sales of CryoStor to the regenerative medicine market segment. |
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Operating expenses for the second quarter of 2018 were $2.4 million, compared with $1.9 million for the second quarter of 2017, reflecting higher performance-based compensation expense and increased expenditures related to enhancing our quality management system. |
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Operating profit for the second quarter of 2018 was $1.3 million, compared with an operating loss of $341,000 for the second quarter of 2017. |
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Net income attributable to common stockholders for the second quarter of 2018 was $1.0 million, or $0.05 per diluted share, compared with a net loss attributable to common stockholders of $768,000, or $0.06 per share, for the second quarter of 2017. |
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EBITDA for the second quarter of 2018 was positive $1.2 million compared with negative $514,000 for the second quarter of 2017. |
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Adjusted EBITDA for the second quarter of 2018 was $1.7 million compared with $59,000 for the second quarter of 2017. |
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Cash provided by operations for the second quarter of 2018 was $562,000, compared with cash used by operations of $103,000 for the prior-year period. |
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Cash balance at June 30, 2018 was $14.2 million compared with $2.3 million at June 30, 2017, and $6.7 million at December 31, 2017. |
Mike Rice, BioLife President & CEO, commented, “In Q2, we demonstrated our ability to efficiently manage the business during a sustained high-growth phase. We continued to see strong demand for our proprietary products in the cell and gene therapy segment, and expect this to continue for the next several quarters based on awareness of our products in this market segment and the number of new clinical trials in process by our customers.”
Q2 2018 Market Segment & Channel Highlights
Regenerative Medicine (cell therapy, tissue engineering, stem cell transplant)
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Product revenue: $3.0 million; 58% of total revenue, with 176% growth over Q2 2017 and 42% growth over Q1 2018. |
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Gained 37 new cell and gene therapy companies in the regenerative medicine market segment. |
Distributors
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Product revenue: $1.7 million; 33% of total revenue with 144% growth over Q2 2017 and 63% growth over Q1 2018. |
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Key worldwide distributors: STEMCELL Technologies, MilliporeSigma, Thermo Fisher and VWR. |
Six Month Financial Results
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Gross margin for the six months ended June 30, 2018 increased to 68% from 62% in the same period last year, due to higher average selling prices per liter, and reduced COGS per liter resulting from higher production volume, driven by increased sales of CryoStor to the regenerative medicine market segment. |
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Operating expenses for the first six months of 2018 were $4.7 million, compared with $3.8 million for the same period in 2017, reflecting higher performance-based compensation expense and increased expenditures related to enhancing our quality management system. |
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Operating profit for the first half of 2018 was $1.4 million, compared with an operating loss of $805,000 for the first half of 2017. |
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Net income attributable to common stockholders for the six months ended June 30, 2018 was $943,000, or $0.05 per diluted share, compared with a net loss attributable to common stockholders of $1.6 million, or $0.13 per share, for the same period in 2017. |
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EBITDA for the first six months of 2018 was positive $1.3 million compared with negative $1.1 million for same period in 2017. |
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Adjusted EBITDA for the six months ended June 30, 2018 was $2.3 million compared with $15,000 for the prior year period. |
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Cash provided by operations for first six months of 2018 was $953,000, compared with cash used by operations of $272,000 for the prior-year period. |
Roderick de Greef, BioLife Chief Financial Officer, remarked, “Our second quarter financial results mark the first time since inception that BioLife has achieved positive net income, underscoring the operating leverage we can realize on higher revenue levels. Given our strong financial results for the first half of 2018 and our outlook for the remainder of the year, we now expect 2018 to be our first full year of profitability.”
2018 Financial Guidance
Management provided 2018 financial guidance as follows:
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Affirmed guidance for biopreservation media revenue to be between $18.5 million and $20.0 million, representing growth of 68% to 82% over 2017. |
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Revised guidance for gross margin to be between 68% and 70%, up from prior guidance of 63% to 65% and up from 61% in 2017. |
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Revised guidance for operating expenses to between $9.5 million to $10.0 million, up from $9.0 million to $9.5 million and compared with $7.8 million in 2017. |
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Affirmed guidance for full-year GAAP operating profit, with proportional increases in EBITDA, adjusted EBITDA and cash flow from operations. |
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Anticipate full-year 2018 GAAP net income. |
Conference Call & Webcast
The Company will host a conference call and live webcast at 10:00 a.m. ET this morning. To access the live webcast, please go to www.biolifesolutions.com and click on the top banner, or directly at www.biolifesolutions.com/earnings/. Alternatively, you may access the live conference call by dialing (844) 825-0512 (U.S. & Canada) or (315) 625-6880 (International) with the following Conference ID: 4968357. A webcast replay will be available approximately two hours after the call and will be archived on www.biolifesolutions.com for 90 days.
About BioLife Solutions
BioLife Solutions is the leading developer, manufacturer and supplier of proprietary clinical grade cell and tissue hypothermic storage and cryopreservation freeze media for cells and tissues. Our proprietary HypoThermosol® and CryoStor® platform of solutions are highly valued in the regenerative medicine, biobanking and drug discovery markets. Our biopreservation media products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced cell damage and death; offering commercial companies and clinical researchers significant improvement in shelf life and post-preservation viability and function.
For more information please visit www.biolifesolutions.com, and follow BioLife on Twitter.
Cautions Regarding Forward Looking Statements
Except for historical information contained herein, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements concerning the company's anticipated future growth strategy, including the acquisition of synergistic cell and gene therapy manufacturing tools and services or technologies, anticipated business and operations, guidance for financial results in 2018, including achieving GAAP operating profit, net income, EBITDA, adjusted EBITDA and cash flow from operations, the potential utility of and market for its products and services, potential revenue growth and market expansion, regulatory approvals and/or commercial manufacturing of our customers' products, and potential customer revenue. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including among other things, uncertainty regarding market adoption of products; uncertainty regarding third-party market projections; market volatility; competition; litigation; and those other factors described in our risk factors set forth in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof, other than as may be required by applicable law.
Discussion of Non-GAAP Financial Measures
BioLife’s management believes that the non-GAAP measure of “EBITDA” and “Adjusted EBITDA” enhances an investor’s understanding of the Company’s financial and operating performance and its future prospects by being more reflective of core operating performance. BioLife’s management uses this financial metric for strategic decision making, forecasting future financial results, and evaluating current period financial and operating performance. The presentation of non-GAAP financial information is not intended to be reviewed in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables in this press release.
EBITDA and Adjusted EBITDA Definitions:
“EBITDA” is a non-GAAP measure defined by BioLife Solutions, Inc., as net income/(loss) excluding interest expense/(income), income tax expense, depreciation expense, and amortization expense. “Adjusted EBITDA” is a non-GAAP measure defined by BioLife Solutions, Inc., as net income/(loss) excluding interest expense/(income), income tax expense, depreciation expense, amortization expense, stock-based compensation expense and the loss/(gain) on equity method investments.
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Media & Investor Relations |
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Roderick de Greef |
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Chief Financial Officer |
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(425) 686-6002 |
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BIoLife Solutions, Inc.
Unaudited Condensed Statements of Operations
(In thousands, except per share amounts)
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Three Months Ended |
Six Months Ended |
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June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
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Revenue |
$ | 5,178 | $ | 2,558 | $ | 8,993 | $ | 4,924 | ||||||||
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Cost of product sales |
1,537 | 957 | 2,901 | 1,885 | ||||||||||||
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Gross profit |
3,641 | 1,601 | 6,092 | 3,039 | ||||||||||||
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Gross margin % |
70 | % | 63 | % | 68 | % | 62 | % | ||||||||
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Operating expenses |
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Research and development |
325 | 319 | 671 | 605 | ||||||||||||
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Sales and marketing |
641 | 546 | 1,253 | 1,059 | ||||||||||||
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General and administrative |
1,390 | 1,077 | 2,744 | 2,180 | ||||||||||||
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Total operating expenses |
2,356 | 1,942 | 4,668 | 3,844 | ||||||||||||
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Operating income (loss) |
1,285 | (341 | ) | 1,424 | (805 | ) | ||||||||||
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Total other income (expenses) |
(146 |
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(427 | ) | (281 |
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(834 | ) | ||||||||
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Net income (loss) |
1,139 | (768 |
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1,143 | (1,639 | ) | ||||||||||
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Income taxes |
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Net income (loss) after provision for taxes |
1,139 | (768 |
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1,143 | (1,639 | ) | ||||||||||
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Preferred stock dividends |
(93 |
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(200 |
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Net income (loss) attributable to common shares |
$ | 1,046 | $ | (768 |
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$ | 943 | $ | (1,639 | ) | ||||||
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Basic net income (loss) per common share |
$ | 0.07 | $ | (0.06 | ) | $ | 0.06 | $ | (0.13 | ) | ||||||
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Diluted net income (loss) per common share |
$ | 0.05 | $ | (0.06 | ) | $ | 0.05 | $ | (0.13 | ) | ||||||
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Basic shares used to compute earnings per share |
15,180 | 13,101 | 14,642 | 13,033 | ||||||||||||
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Diluted shares used to compute earnings per share |
20,374 | 13,101 | 19,064 | 13,033 | ||||||||||||
Non-GAAP Reconciliation:
(In thousands)
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Three Months Ended |
Six Months Ended |
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June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
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Net income (loss) after tax provision |
$ | 1,139 | $ | (768 | ) | $ | 1,143 | $ | (1,639 | ) | ||||||
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Interest expense/(income), net |
(31 | ) | 105 | (39 | ) | 188 | ||||||||||
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Depreciation expense |
84 | 87 | 161 | 177 | ||||||||||||
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Amortization of debt discount |
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62 |
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156 | ||||||||||||
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EBITDA |
1,192 | (514 |
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1,265 | (1,118 | ) | ||||||||||
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Share-based compensation (non-cash) |
374 | 313 | 748 | 644 | ||||||||||||
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Loss from equity-method investment in SAVSU (non-cash) |
177 | 260 | 320 | 489 | ||||||||||||
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Adjusted EBITDA |
$ | 1,743 | $ | 59 | $ | 2,333 | $ | 15 | ||||||||
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BIoLife Solutions, Inc. Unaudited Condensed Balance Sheet Information (In thousands) |
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June 30, 2018 |
December 31, 2017 |
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Cash and cash equivalents |
$ | 14,167 | $ | 6,663 | ||||
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Accounts receivable |
2,166 | 1,021 | ||||||
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Inventories |
2,122 | 1,847 | ||||||
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Total current assets |
18,807 | 9,931 | ||||||
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Total assets |
21,787 | 12,143 | ||||||
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Total current liabilities |
1,664 | 1,513 | ||||||
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Total liabilities |
2,132 | 2,051 | ||||||
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Total Shareholders' equity |
19,655 | 10,092 | ||||||
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BIoLife Solutions, Inc. Unaudited Condensed Statement of Cash Flows Information (In thousands) |
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Six Months Ended |
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June 30, 2018 |
June 30, 2017 |
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Cash provided/(used) by operating activities |
$ | 953 | $ | (272 | ) | |||
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Cash (used) by investing activities |
(1,061 | ) | (78 | ) | ||||
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Cash provided by financing activities |
7,611 | 1,259 | ||||||
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Net increase in cash and equivalents |
$ | 7,503 | $ | 909 | ||||
Exhibit 99.2
Casdin Capital Invests $20 Million in BioLife Solutions to Support Strategic Growth Opportunities
M&A Activities to Focus on Cell and Gene Manufacturing Tools
BOTHELL, Washington — August 9, 2018 — BioLife Solutions, Inc. (NASDAQ: BLFS), the leading developer, manufacturer and marketer of proprietary clinical grade biopreservation media, (“BioLife” or the “Company”), today announced that Casdin Capital LLC, (“Casdin”) a New York-based, life science-focused investment firm and current stockholder of BioLife, has agreed to invest $20 million in BioLife to support the Company’s growth strategy of acquiring synergistic cell and gene therapy manufacturing tools and services or technologies.
Casdin’s private purchase of an additional 1,428,571 shares of common stock at $14.00 per share includes a restriction on the resale of these shares for 12 months. The share issuance will increase the Company’s fully diluted shares outstanding by 5.8%, to approximately 26.0 million shares, and 17.9 million on an issued and outstanding basis.
Mike Rice, BioLife President & CEO commented, “Now that BioLife has achieved profitability and is generating consistent cash flow from operations we can expand our focus to include external growth opportunities to drive shareholder value. This $20 million investment by Casdin Capital in combination with our cash balance of approximately $15 million, allows us the financial flexibility to initiate our strategy of acquiring complementary revenue-generating companies or technologies that will enable BioLife to increase our share of the expenditures being made for cell and gene therapy manufacturing tools and services.”
Eli Casdin, Managing Director of Casdin Capital, remarked, “As active investors in cellular therapy companies and across the life science continuum, we recognize that the supplier side of the industry is critical but highly fragmented. There exists now a tremendous investment opportunity to consolidate and integrate these businesses, creating a broad and trusted platform partner for therapeutic developers. The most critical component of this strategy is the team executing it, and our due diligence and research confirms BioLife is that right team and this is the right time.”
About Casdin Capital
Casdin Capital LLC (“Casdin”), a NYC-based investment firm founded in 2012, brings a deep understanding, expertise and long-term perspective to financing the next generation of life science innovation. For more information please visit https://www.casdincapital.com.
About BioLife Solutions
BioLife Solutions is the leading developer, manufacturer and supplier of proprietary, clinical-grade biopreservation media for cells and tissues. Our HypoThermosol® hypothermic storage and CryoStor® cryopreservation freeze media are highly valued in the regenerative medicine, biobanking and drug discovery markets. These novel biopreservation media products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced cell damage and death; offering commercial companies and clinical researchers significant improvement in shelf life and post-preservation viability and function. For more information please visit www.biolifesolutions.com, and follow BioLife on Twitter.
Except for historical information contained herein, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements concerning the company's anticipated future growth strategy, including the acquisition of synergistic cell and gene therapy manufacturing tools and services or technologies, anticipated business and operations, guidance for financial results in 2018, including achieving GAAP operating profit, net income, EBITDA, adjusted EBITDA and cash flow from operations, the potential utility of and market for its products and services, potential revenue growth and market expansion, regulatory approvals and/or commercial manufacturing of our customers' products, and potential customer revenue. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including among other things, uncertainty regarding market adoption of products; uncertainty regarding third-party market projections; market volatility; competition; litigation; and those other factors described in our risk factors set forth in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof, other than as may be required by applicable law.
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Media & Investor Relations |
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Roderick de Greef |
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Chief Financial Officer |
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(425) 686-6003 |