IMMUCELL CORP /DE/ Q4 FY2025 earnings call

• 2025 was a successful year with hiring a new management team, increasing manufacturing capacity to meet demand and resolving a multiyear backorder situation. • Pivoted to a strategy focused on maximizing shareholder value from the First Defense franchise. • Compete in a large growing market for calf health solutions with First Defense products, which protect against 3 common pathogens causing scours, have unique characteristics like being colostrum-derived and higher antibody content than competitors. • Grew manufacturing capacity from 3 million units in 2023 to 4.6 million units in 2025. • Identified opportunities to further increase capacity to between 5 million and 6 million units per year. • Hired senior international market development leader, added sales manager in US and actively recruiting for third commercial position, implemented new standardized sales approach.

For the fourth quarter of 2025, product sales were $7.6 million, a decrease of 1.6% compared to the fourth quarter of 2024. Domestic sales for Q4 grew 8.7% to $7 million, while international sales declined to about $600,000, mainly driven by order timing in Canada, accounting for approximately 8% of total sales for Q4 2025. For the full year 2025, total product sales were $27.6 million, a 4.3% increase compared to 2024. Gross margin as a percentage of product sales increased to 38% during Q4 of 2025 compared to 37% during Q4 of 2024. The full year results showed gross margin increased to 41% in 2025 compared to 30% in 2024.

• Confident of meeting demand in 2026 and 2027 by implementing yield improvements while working on next major capacity expansion. • Focus on First Defense and repurposing assets previously for subclinical mastitis product to First Defense. • Stepping up commercial activities with proactive outreach to gain new customers.

• Noncash inventory write-downs in Q3 and Q4 of 2025, mainly work-in-process colostrum inventory, which was approximately $650,000, affecting Q4 2025 revenue and full year 2025 revenue. • Increase in operating expenses, primarily due to G&A increases, and other expense changes related to Re-Tain shift. • Uncertainty in reevaluating specific Re-Tain-related assets over time.

Q: Looking ahead into '26 and '27, what are the biggest challenges ahead to achieve goals?

A: First is planned increase in yield and then increase in capacity through more major investments; second is stepping up commercial activities from proactive outreach to gain new customers.

Q: Will you be expecting any additional Re-Tain write-downs in 2026?

A: Don't anticipate large write-downs for former Re-Tain assets, evaluating best way to roll out capacity expansion using former Re-Tain plan and assets, with modest salvage value booked and no large reevaluation currently.

Q: As it relates to 2025 revenue, how much do you consider to be recurring and will that be the case in '26 and '27?

A: Customers have high loyalty and satisfaction due to product impact on operations, but due to past backorder situation, exact calculation of recurring revenue is complex, but high degree of loyalty and satisfaction observed from personal visits and sales team input