BioLife Solutions Announces the Divestiture of its Stirling Freezer Business

Rhea-AI Summary

BioLife Solutions, Inc. (NASDAQ: BLFS) has announced the divestiture of its subsidiary Global Cooling, Inc. (

Insights

Financial Analyst

Dissecting the financial health of BioLife Solutions post-divestiture reveals a strategic pivot aimed at optimizing the company's core operations. The immediate alleviation of the quarterly cash burn is notable; this implies a streamlined expense structure going forward. Additionally, the extinguishing of $7.5 million in product warranty liabilities is expected to fortify the balance sheet.

However, investors should weigh the potential risks inherent in such transactions. While the divestiture is poised to enhance EBITDA and gross margins, the removal of an entire business line could also signal a narrowing of future revenue streams. The retention of $7 million in cash on GCI's balance sheet and the repayment of $2.6 million in long-term debt as part of the transaction are critical details that may affect the company's liquidity and leverage metrics in the short term.

Market Research Analyst

The divestiture of the Stirling freezer business by BioLife Solutions can be seen as a calculated move to concentrate on higher-margin sectors, such as bioproduction products and services for cell and gene therapies. This decision likely reflects market research findings which pinpoint the CGT space as a high-growth area. The removal of ancillary businesses, like the freezer segment, can serve to bolster investor confidence by showcasing commitment to core competencies and market demands.

The impact on the company's market positioning should be monitored closely. The anticipated increase in growth rates and gross margin expansion suggests that BioLife Solutions is aligning its resources to capitalize on market trends. This strategic realignment could potentially attract new partnerships and customer segments, further driving organic growth.

BOTHELL, Wash., April 18, 2024 /PRNewswire/ -- BioLife Solutions, Inc. (NASDAQ: BLFS) ("BioLife" or the "Company"), a leading developer and supplier of bioproduction products and services for the cell and gene therapy ("CGT") and the broader biopharma markets, today announced that it has completed the divestiture of its wholly owned subsidiary Global Cooling, Inc. ("GCI" or "Stirling").

Roderick de Greef, Chairman and CEO, commented, "After a thorough and extensive process, we're pleased to have completed the divestiture of the Stirling freezer business. The sale is expected to immediately eliminate several million dollars of quarterly cash burn and removes product warranty liabilities, which totaled $7.5 million as of December 31, 2023. Most importantly, we anticipate that this transaction will result in higher growth rates in total revenue and adjusted EBITDA, as well as gross margin expansion."

The transaction, which is structured as a stock sale, required $7 million in cash to remain on the balance sheet of GCI and the repayment of $2.6 million in GCI long-term debt. BioLife Solutions intends to file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission containing the definitive agreement along with certain pro forma financial information.

About BioLife Solutions

BioLife Solutions is a leading supplier of cell processing tools and services for the CGT and broader biopharma markets. Our expertise facilitates the commercialization of new therapies by supplying solutions that maintain the health and function of biologic materials during collection, development, storage and distribution. For more information, please visit www.biolifesolutions.com, and follow BioLife on LinkedIn and X.

Cautions Regarding Forward-Looking Statements

Certain statements contained in this press release are not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "plans," "expects," "believes," "anticipates," "designed" and similar words are intended to identify forward-looking statements. Forward-looking statements are based on our current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. A description of certain of these risks, uncertainties and other matters can be found in filings we make with the U.S. Securities and Exchange Commission, all of which are available at www.sec.gov. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by us. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in its expectations with regard to these forward-looking statements or the occurrence of unanticipated events.

Contact:

Troy Wichterman 
Chief Financial Officer
(425) 402-1400
twichterman@biolifesolutions.com

 

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SOURCE BioLife Solutions, Inc.

FAQ

What did BioLife Solutions announce regarding its Stirling Freezer Business?

BioLife Solutions plans to file a Form 8-K with the SEC to disclose the details of the agreement and pro forma financial information.