Cord Blood Banking Leader Cryo-Cell Reports Fiscal Second Quarter 2023 Financial Results

Rhea-AI Summary

Cryo-Cell International, Inc. (NYSE American LLC: CCEL) reported a 2% increase in revenue for the fiscal second quarter of 2023 compared to the same period last year. Net income for the quarter was $220,976, down from $634,719 in the previous year. The increase in revenue was driven by higher processing and storage fee revenue, while the decrease in net income was primarily due to increased research and development expenses.

Positive

• Consolidated revenues for the second quarter of fiscal 2023 increased by 2% compared to the second quarter of fiscal 2022.
• Net income for the three months ended May 31, 2023 was $220,976, a decrease from $634,719 in the same period last year.
• The increase in revenue was driven by higher processing and storage fee revenue.
• Research and development expenses increased significantly, primarily due to the Clinical Study and Research Agreement with Duke and the development of a manufacturing laboratory.
• The Company entered into an interest rate SWAP agreement to manage exposure to interest rate risk.

Negative

• None.

OLDSMAR, Fla.--(BUSINESS WIRE)-- Cryo-Cell International, Inc. (NYSE American LLC: CCEL) (the “Company”), the world’s first private cord blood bank to separate and store stem cells in 1992, announced results for the fiscal second quarter ended May 31, 2023.

Financial Results

Revenue

Consolidated revenues for the second quarter of fiscal 2023 were $7.77 million compared to $7.63 million for the second quarter of fiscal 2022, a 2% increase. The revenues for the second quarter of fiscal 2023 consisted of $7.58 million in processing and storage fee revenue, $164,000 in public banking revenue and $27,000 in product revenue compared to $7.48 million in processing and storage fee revenue, $117,000 in public banking revenue and $36,000 in product revenue for the second quarter of fiscal 2022.

Net Income

The Company reported net income for the three months ended May 31, 2023 of $220,976, or $0.03 per basic and diluted shares, compared to net income of $634,719, or $0.08 per basic share and $0.07 per diluted share for the three months ended May 31, 2022. During the three months ended May 31, 2023, revenue increased by 2% and cost of sales decreased by 3%, which was offset by a 3% increase in selling, general and administrative expenses. For the three months ended May 31, 2023, the Company recorded $304,682 in research, development and relating engineering (“R&D”) expenses versus $80,896 for the three months ended May 31, 2022. The increase in R&D expenses as of the three months ended May 31, 2023 versus the same period in 2022 is due to the Clinical Study and Research Agreement the Company entered into with Duke to provide funding to complete the Duke IMPACT Study (as previously disclosed) and the expenses related to the development of a manufacturing laboratory related to the Duke License Agreement. During the second quarter of fiscal 2023, the Company entered into an interest rate SWAP agreement to manage exposure to interest rate risk related to its variable debt obligation under its Term Note (as previously disclosed). For the three months ended May 31, 2023 the Company recorded a loss on the change in the fair value of the derivative of $223,974. The fair value is based on prevailing market data and derived from proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions.

About Cryo-Cell International, Inc.

Founded in 1989, Cryo-Cell International, Inc. is the world’s first private cord blood bank. ‎More than 500,000 parents from 87 countries have entrusted Cryo-Cell International with ‎their baby’s cord blood and cord tissue stem cells. In addition to its private bank, Cryo-Cell ‎International has a public banking program in partnership with Duke University. Cryo-Cell’s ‎public bank has provided cord blood for more than 600 transplantations and operates cord ‎blood donation sites across the U.S in prominent hospitals such as Cedars–Sinai Hospital in ‎Los Angeles and Baptist Hospital in Miami. Cryo-Cell’s facility is FDA registered, cGMP-/cGTP-‎compliant and licensed in all states requiring licensure. Besides being AABB accredited as a ‎cord blood facility, Cryo-Cell was also the first U.S. (for private use only) cord blood bank to ‎receive FACT accreditation for adhering to the most stringent cord blood quality standards ‎set by any internationally recognized, independent accrediting organization. Cryo-Cell has ‎the exclusive rights ‎to PrepaCyte-CB, the industry’s most advanced cord blood processing ‎technology.‎

Cryo-Cell’s mission is to provide the premier cord blood and cord tissue cryopreservation services, to develop, manufacture and administer cellular therapies to significantly improve the lives of patients worldwide and to offer the highest quality and most cost effective biostorage solutions available. In February 2021, Cryo-Cell entered into a license agreement with Duke University ‎that the Company believes has allowed Cryo-Cell to begin its transformation into an autonomous, ‎‎vertically ‎integrated cellular therapy ‎company. ‎In March 2022, Cryo-Cell launched ExtraVault to offer its expertise in biostorage and distribution to biopharmaceutical companies and healthcare institutions. For more information, please visit (www.extravault.com).

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by terminology such as “will,” “may,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contain forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties and reflect only our current views, expectations and assumptions with respect to future events and our future performance. If risks or uncertainties materialize or assumptions prove incorrect, actual results or events could differ materially from those expressed or implied by such forward-looking statements. Risks that could cause actual results to differ from those expressed or implied by the forward-looking statements we make include, among others, risks related to: the impact of the COVID-19 pandemic on our sales, operations and supply chain, the success of the Company’s global expansion initiatives and product diversification, including its addition of the ExtraVault services, the Company’s actual future ownership stake in future therapies emerging from its collaborative research partnerships, the success related to its IP portfolio, the Company’s future competitive position in stem cell innovation, future success of its core business and the competitive impact of public cord blood banking on the Company’s business, the success of the Company’s initiative to expand its core business units to include biopharmaceutical manufacturing and operating clinics, the uncertainty of profitability from its biopharmaceutical manufacturing and operating clinics, the Company’s ability to minimize future costs to the Company related to R&D initiatives and collaborations and the success of such initiatives and collaborations and the success and enforceability of the Company’s umbilical cord blood and cord tissue license agreements, together with the associated intellectual property and their ability to provide the Company with royalty fees, along with the Risk Factors set forth in the Company’s Annual Report on Form 10-K filed on February 28, 2023.

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date hereof. Except as otherwise required by applicable law, we do not undertake and expressly disclaim any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments. All subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230714389664/en/

Irene Smith

813-749-2102

Ismith@cryo-cell.com

Source: Cryo-Cell International, Inc.

FAQ

What is the ticker symbol of Cryo-Cell International, Inc.?

The ticker symbol of Cryo-Cell International, Inc. is CCEL.

What was the revenue growth in the second quarter of fiscal 2023 compared to the previous year?

The revenue in the second quarter of fiscal 2023 increased by 2% compared to the second quarter of fiscal 2022.

What was the net income for the three months ended May 31, 2023?

The net income for the three months ended May 31, 2023 was $220,976.

Why did the net income decrease compared to the previous year?

The decrease in net income was primarily due to increased research and development expenses.

What were the main drivers of the revenue increase?

The increase in revenue was driven by higher processing and storage fee revenue.

Why did research and development expenses increase?

Research and development expenses increased significantly due to the Clinical Study and Research Agreement with Duke and the development of a manufacturing laboratory.

What risk management measure did the Company take?

The Company entered into an interest rate SWAP agreement to manage exposure to interest rate risk.