IMMUCELL CORP /DE/ Q1 FY2025 earnings call

• Strategic perspective: Business is growing larger, more diverse, and complex. Focus on First Defense sales growth, with recent sales growth positive. Completed production capacity expansion over $30 million per year, achieved gross margin expansion, increased cash balance to ~$4.6 million as of March 31, 2025. Traction with new product formats for First Defense, initiating investigational product use of Re-Tain to collect market feedback and explore strategic options for novel technology.
• Financial highlights: Product sales growth, reduced order backlog from $4.4 million as of December 31, 2024, to $4 million as of March 31, 2025, and further to $3.4 million as of May 6, 2025. Adjusted EBITDA improvements compared to prior periods, and encouragement to review corporate presentation for business strategy and financial results.

Product sales in the first quarter of 2025 increased 11% or $810,000 over the first quarter of 2024 to a record $8.1 million. The 12-month period ended March 31, 2025, saw product sales increase by 28% or $6 million to $27.3 million compared to the prior 12-month period. The gross margin in the first quarter of 2025 was 42%, an improvement from 37% in the fourth quarter of 2024. Adjusted EBITDA for the three-month, six-month, and 12-month periods ended March 31, 2025, was $2.3 million, $3.7 million, and $3.3 million respectively, compared to $458,000, $247,000, and negative $280,000 for the same periods in 2024.

• Management aims to clear the order backlog and bring back lost customers, while finding new business with existing and expanded product lines. Seasonality is noted with Q1 being a seasonal high, but backlog mix mitigates some of the seasonal bump. EBITDA full-year estimates consider seasonality and backlog progress.

• Risk of significant contamination events and equipment breakdowns that could impact production yields and gross margin performance.

Q: George Melas asked about product mix, specifically Tri-Shield being 71% of sales in the quarter, the contribution of the new bulk powder product to the end of 2025 and 2026, and the impact of product mix on gross margin.

A: Michael Brigham responded that Tri-Shield has been a key driver of growth, the bulk powder product is in development with no sales yet, and product pricing and volume growth contribute to gross margin improvement despite product format differences.

Q: Russ Tolander inquired about EBITDA erosion from past contamination events, core business EBITDA run rate, product development spend, seasonality, and Re-Tain investigational use.

A: Michael Brigham discussed the impact of past contamination events on EBITDA, core business EBITDA potential being higher than reported, product development spend on new product approval, seasonality with Q1 being a high season, and progress on Re-Tain investigational use with market feedback collection planned for the second half of 2025.

Q: Bruce asked about future projections, Re-Tain approval, and analyst collaboration.

A: Michael Brigham stated that projecting future performance is difficult due to uncertainty, but the company aims for timely top-line announcements, and collaboration with financial analysts is desired but currently missing.