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Biolife Solutions Inc (NASDAQ:BLFS)
Q1 2021 Earnings Call
May 13, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Q1 2021 BioLife Solutions Earnings Conference Call. [Operator Instructions] Thank you.

Now I would like to turn it over to Mr. Roderick de Greef, BioLife CFO. You may begin the conference sir.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Thank you, John. Good afternoon, everyone and thank you for joining us for the BioLife Solutions conference call to review the operating and financial results for the first quarter of 2021. Earlier this afternoon, we issued a press release which summarizes our financial results for the three months ended March 31. As a reminder, during this call we may make certain projections and other forward-looking statements regarding future events or the future financial performance of the Company. These statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations. For a detailed discussion of the risks and uncertainties that affect the Company's business and that qualify as forward-looking statements, I refer you to our periodic and other public filings filed with the SEC.

Company projections and forward-looking statements are based on factors that are subject to change and therefore these statements speak only as of the date they are given. The Company assumes no obligation to update any projections or forward-looking statements except as required by law. During the call, we will speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon. These non-GAAP or adjusted financial metrics should not be viewed as an alternative to GAAP. However in light of our continued M&A activity, we believe that the use of non-GAAP or adjusted metrics provide investors with a clear view of our current financial results.

Now I'd like to turn the call over to Mike Rice, BioLife's CEO.

Michael Rice -- President and Chief Executive Officer

Thanks, Rod and good afternoon, everyone. Thank you for joining our call. Joining Rod and me today is Dusty Tenney, President and Chief Operating Officer. We're off to a strong start to 2021, so I'll get right to it. In Q1 we booked record revenue of nearly $17 million, a 40% increase over Q1 last year. We gained 80 new customers compared with the full year 2020 strong count of 213 new customers. The team executed to drive product adoption across the portfolio and to set the stage for a stellar 2021. We're making an initial increase to our revenue guidance for the full year 2021 which Rod will speak to in a few minutes. We also expanded our leadership team with the promotions of Marcus Schulz to Chief Revenue Officer and Sarah Aebersold as VP, Global Human Resources. Lastly, we strengthened our Board with the addition of new directors, Amy DuRoss and Rachel Ellingson.

I'll make some comments about our three revenue platforms starting with media. In Q1 we booked record media revenue of nearly $9 million, which was up 3% over the same period in 2020, a tough comp when we booked about $1.5 million in COVID-19-related safety stock orders for our biopreservation media. We gained 16 new media customers including Celsius Therapeutics, Galvanize Therapeutics, [Indecipherable]. We also received confirmation that our media products will be used in an additional 13 clinical trials for new cell and gene therapies from customers including Allogene, Janssen, Mustang Bio, InCarda, Takeda and [Indecipherable]. We estimate that our biopreservation media products have incorporated into nearly 500 customer clinical applications. Of these, our media is used in five approved therapies. Yescarta and decarta [Phonetic] from Kite. from Celgene and [Indecipherable] from bluebird. [Indecipherable] was also used in four new therapies that could get approved in the next few quarters. These include [Indecipherable] from Celgene, [Indecipherable] from bluebird.

We continue to believe that our media franchise a sticky, marquee customers is the engine that we can leverage to market our bioproduction tools and services portfolio to our frequent thought platform performed well in Q1. We booked nearly $5 million in revenue, a 60% increase over the same period in 2020. We gained 39 new freezer & thaw customers and completed the development of our new high-capacity control rate freezer family, the first of which was shipped in mid-April to a current to a fast [Phonetic] thaw customer.

And our final three revenue platforms, BioStorage which includes evo cold chain and SciSafe storage services, we booked revenue of $3.1 million, increase of $2.6 million over Q1 2020. We gained 25 new customers in the platform including 16 new evo cold chain users. Demand for SciSafe storage services continues to increase.

Regarding M&A, we continue to be active and believe our strategy can accelerate growth and further solidify our position as a leading supplier of class-defining bioproduction tools and services. I would like to give an update on our acquisition of Stirling Ultracold. So I'll ask Dusty to provide some comments on how we are continuing to integrate all the companies we acquired by focusing on revenue and cost synergies, system upgrades and organizational efficiencies. Dusty?

Dusty Tenney -- President and Chief Operating Officer

Thanks, Mike. Stirling Ultracold continues to realize significant market traction adding 29 new customers during the quarter totaling over 450 ULT freezer systems globally. Within these new customer footprints, Catalent recently announced the global strategic partnership with Stirling Ultracold to establish energy efficient cold chain capabilities for biologics and emerging modalities including cell and gene therapies.

Stirling's ultra low temperature freezer system is unique in the market. It's the only ULT to provide the full range of ultra-low temperatures between minus 20 and minus 86c in a single system that can operate within any global location by simply changing a power cord. This is ideal for companies that have multiple biological storage temperature requirements enabling ultimate flexibility to deploy these systems virtually anywhere in the world. Additionally Stirling has the smallest footprint, highest capacity freezes on the market that are extremely reliable given the application of the proprietary Stirling engine which has only two moving parts. The combination of these attributes also culminates in Stirling freezers being rated ENERGY STAR having both the lowest use of energy of all freezer systems within its class and lowest heat output of any new UKT on the market delivering superior environmental sustainability benefits.

We also recently completed a proof of concept testing of our proprietary Stirling engine technology which demonstrated an ability to achieve cryo temperatures at minus 160c. If commercialized, this potentially disruptive intellectual property to provide even more flexibility to support the expanding cell and gene therapy market. Building off a strong finish to 2020, Stirling delivered its strongest quarter on record with unaudited revenues of $17.5 million leveraging substantive capacity increases within our operations. Approximately 20% to 25% of these sales can be attributed to the support of COVID vaccine storage and distribution. The balance of sales falls into a similar historic pattern with roughly 60% of sales within pharma biotech, 20% within academic and government research, and 20% supporting clinical and bio-banking applications.

For the balance of the year, the Stirling business does experience some level of seasonality during Q3, given EU summer holidays slightly offset by US government fiscal year end spending during the quarter. In Q4, we have historically experienced a slight pickup as customer spend their year end capital budgets. These calendar factors are built into the aggregate guidance that Rod will share with you later in the call.

As I've assumed the role as integration leader for the business, we have begun to identify clear growth synergies in the business that include, but are not limited to cross selling products, expanding distribution networks and geographic reach across the portfolio, notwithstanding the opportunities that we have in the launch of new products across the portfolio in the second half. Given the complementary nature of Stirling into the BioLife portfolio, our focus on cost synergies has targeted supply chain optimization and rationalization of expand, recognizing that there were some duplicative discretionary expenses in the area of sales and marketing, information technology and G&A that can be reduced or eliminated to improve our cost structure. Across the BioLife enterprise, we have already identified several best practices that will be shared to improve our operational performance and further enhance our productivity and efficiency critical in the near to mid-term. These initial synergy opportunities have been factored into our second half outlook and guidance.

Now I'll turn the call over to Rod.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Thanks, Dusty. As we mentioned on our last call, for 2021, we have streamlined our revenue reporting into three categories, biopreservation media, which consists of all media sales; freezers & thaw platform revenue, which includes the freezer and automated thaw saw product lines; and the biostorage platform, which includes evo rental revenue as well as biostorage revenue resulting from our acquisition of SciSafe last October.

Revenue for the first quarter totaled $16.8 million representing a 39% increase over last year's first quarter revenue of $12.2 million. Sequentially, total revenue was up 14% over last quarter. Media revenue totaled $8.9 million, which represents a modest 3% increase over the prior year. However, as we have previously discussed, we believe, last year's Q1 media revenue included approximately $1.5 million of COVID-related demand pull forward. So we estimate that a normalized year-over-year growth rate for media this quarter was approximately 25%.

Revenue from the freezer & thaw platform totaled $4.8 million this quarter or an increase of 59% compared to 2020 driven by strong freezer sales including the shipment of our first high capacity rate freezer which had a sales price slightly below $500,000. Our BioStorage platform revenue totaled $3.1 million compared to $438,000 last year. The increase in this revenue is primarily attributable to sales generated by our acquisition of SciSafe, which occurred in Q4 of last year. Our adjusted gross margin for the first quarter of this year was 55% compared with 64% last year. The decrease in adjusted gross margin for the quarter reflects the lower margin profile of the acquired product lines, which accounted for 47% of revenue this quarter compared with 29% of revenue in Q1 of 2020. Adjusted operating expenses for Q1 of 2021 totaled $8.8 million compared with $6.4 million in Q1 last year. The increase was primarily attributable to the inclusion of SciSafe operating cost this quarter, not in place in 2020 and secondarily to increased headcount and stock-based compensation expense necessary to support our overall growth.

Our adjusted net income for the first quarter of 2021 was $478,000 or $0.01 per share compared with adjusted net income of $1.4 million or $0.06 per diluted share in the same period last year. Adjusted EBITDA for the first quarter was $2.8 million, which was basically flat compared with $2.9 million in the same period last year. It should be noted that both adjusted net income and adjusted EBITDA for Q1 of last year were positively impacted by approximately $1 million based on the flow through of the COVID-related media demand pull forward. Our cash balance on March 31 totaled $89 million. An inclusive of the 6.6 million shares issued to shareholders of Stirling on May 3, we currently have 40.4 million shares issued and outstanding and 42.7 million shares on a fully diluted basis.

On our last call, we provided full year 2021 revenue guidance of between $101 million to $110 million, inclusive of an expected contribution of $35 million to $37 million from the Stirling acquisition. Based on continued strong demand at Stirling, we now expect that the 2021 revenue contribution from Stirling will come in $5 million higher than originally expected, or $40 million to $42 million and we are increasing our full year 2021 guidance accordingly to $106 million to $115 million.

Now I'd like to call -- turn the call back over to Mike.

Michael Rice -- President and Chief Executive Officer

Thanks, Rod. I'd like to summarize the key takeaways in Q1 and our rest of year outlook. We're off to a great start across the portfolio. Travel restrictions are lifting and we're back on the road visiting customers and our sites to meet with team members. We expect 2021 to be an inflection year based on our Q1 results, a very strong Q2 so far and our confidence in customer demand for our products and services throughout the rest of the year. The Stirling team continues to crush it from accounting on Dusty to play a critical role in integrating Stirling into BioLife.

Now I'll turn the call back over to the operator to take your questions. John?

Questions and Answers:

Operator

Thank you. [Operator Instructions] First question is coming from the line of Chris Lin from Cowen.

Chris Lin -- Cowen and Company -- Analyst

Hi, thanks for taking my questions.

Michael Rice -- President and Chief Executive Officer

Hi, Chris.

Chris Lin -- Cowen and Company -- Analyst

Mike -- hey, Mike. So Mike and Dusty, the number 1 question I received from investors today concerning Stirling, specifically investors are asking how differentiated ultra low temperature technology is? And how difficult it will be for a competitor to enter this space? I know this was addressed that point during the last call and on this call, but any incremental details you can provide would be appreciated?

Michael Rice -- President and Chief Executive Officer

Dusty, why don't you take that one.

Dusty Tenney -- President and Chief Operating Officer

Okay. Chris, thanks for the question and the representation of the share base there. I think there's a couple of things that I think are meaningful. One is really around the market, when you take a look at the ULT market, it's definitely growing mid to high-single-digit, which is from our standpoint, a key attribute in terms of the investments that we're making to expand the portfolio. I think we're also taking share in the market, our brand recognition through the COVID period has really exacerbated the visibility of Stirling ultracold in the market and the flexibility of a tool that can be used at multiple different touch points throughout the markets that we're addressing.

And I think the third is an opportunity in relationship to the geographic reach. And right now as I start to think about the opportunities in that particular space clearly China comes to mind, we're clearly underpenetrated in that respective market, and by virtue of that, that's probably the highest growth market that's out there today in terms of ULTs. So I think it's those three things. I think it's the market growth. I think it's the fact that we're taking some share and the opportunities that we have in a market that we're not playing in today.

Chris Lin -- Cowen and Company -- Analyst

Okay, thank you. Maybe, could you also just address how difficult would it be for a competitor to enter the space. Really, just how long would it take to develop this technology for, I guess a larger competitor?

Dusty Tenney -- President and Chief Operating Officer

Well, one is a realization that the technology that we have which leverages Stirling is well protected with patents. There's patents have been brought into the BioLife portfolio for someone to getting into the space and establish themselves, especially with the breadth of sales and distribution that we have on a global basis, that's a real tough part Chris to be quite honest. And by virtue of that, the ability to get into the market to be successful is a real challenge, especially with the entrenchment that we have with a number of critical customers. One nice highlight of course was Catalent, with the -- with the global relationship that we recently just established.

Chris Lin -- Cowen and Company -- Analyst

Great. Very helpful. Just two more questions from me. And apologies if I missed this, but I think you increased Stirling revenue guidance by $5 million for the full year. What's driving that upside?

Michael Rice -- President and Chief Executive Officer

It's just, Chris, the fundamentally continued strong demand that we see coming down both in Q2 in the near-term versus when we put out our guidance back in March. It's been stronger than expected, and that's expected to continue throughout the rest of the year.

Chris Lin -- Cowen and Company -- Analyst

Okay, great. And last question, Mike, could you just help us unpack the media strength in a bit more detail? Is the growth there being driven by addition of new customers or is it the existing customers increasing utilization as they progress through clinical trials?

Michael Rice -- President and Chief Executive Officer

Yeah. Thanks, Chris. Great question. I'm glad to provide some detail It's both, but seriously, the impact comes from existing customers that progress through clinical trials, they need more media, and we're also acquiring new media customers and continue to do sort of really fast clip. They don't buy very much in the early phases, or even in the preclinical phase, but we're capturing the market really well, but it's clearly the biggest factor is existing customers progressing through and needing more as their enrollment increases as they advance to later stages of development.

Chris Lin -- Cowen and Company -- Analyst

Great, thanks for taking my question.

Michael Rice -- President and Chief Executive Officer

Sure.

Operator

[Operator Instructions] Next question is coming from the line of Jacob Johnson from Stephens.

Jacob Johnson -- Stephens -- Analyst

Hey, good afternoon, Mike, Rod and Dusty.

Michael Rice -- President and Chief Executive Officer

Hi, Jacob.

Jacob Johnson -- Stephens -- Analyst

Hey, I guess first question, maybe just on the sequential growth in the services segment, it looks like evo revenues picked up nicely sequentially, maybe just confirm if that was the case and any kind of color you want to talk about the growth in that segment?

Michael Rice -- President and Chief Executive Officer

Yeah. So as per my comments early on, Jacob, we are trying to streamline the revenue categories, because when you look at both thaw and evo, right now, they're representing somewhere around less than 5% of total revenue. And when we plug Stirling into the mix next quarter, it's going to even be smaller, more like 2% or 3% of revenue. So to call that out as a separate line item is not something we're going to do, but what I can say, is that there was some sequential growth on the evo side, but the bulk of the increase is the -- is BioStorage revenue from SciSafe. That had a nice bump up and we are seeing some strong growth and we have some pretty decent visibility as that unfolds, because, typically there is -- there are contracts and pretty large ones that are signed with some pretty specific timelines associated with them in terms of when that revenue starts to kick in. So we're pretty confident and optimistic about that contribution this year.

Jacob Johnson -- Stephens -- Analyst

Okay, got it. Thanks for that, Rod. And maybe one other question for you Rod, just if I look at the freezer & thaw segment, you did just shy of $5 million of revenues during the quarter. I think if I back out, Stirling, you're doing, you're guiding to something like $15 million to $17 million for that segment for the year. Was there any kind of one-time benefit in the quarter or does, I know you don't want to talk about specific product lines, but is there similar seasonality in this segment to the seasonality that outlined at Stirling.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Yeah, I think we're going to see something similar in Q3 that Dusty highlighted. I think relative to Q1 here, certainly, we had a strong quarter with just the core product line that the Company has been selling now for some time, but as I mentioned, we introduced the high capacity rate freezer which has a very high ASP nearing $0.5 million and that's certainly you don't want to sell many of those to have that positive impact on the revenue line.

Jacob Johnson -- Stephens -- Analyst

Okay, got it, Rod. And then maybe just one big picture question for whoever wants to tackle it. Just you've put out this $250 million revenue goal in the next three or four years. Can you maybe talk about, and now you have these new newly defined segments, how should we think about the growth profile of each of those segments to get to the $250 million goal? Should we assume they're all kinds of growing similarly or should we expect one or two of these segments to be kind of more important growth drivers as we look out three or four.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Years. Rather get specific around growth rates. What I would say is this Jacob that when you look at the $250 million, right, we would expect just slightly over 50% now that we have Stirling on board, coming from the freezer & thaw product platform. About 30% would come from media and 20% we would expect to go from -- to come in from storage that storage line.

Jacob Johnson -- Stephens -- Analyst

Got it. I should ask the question that way. Thanks for that, Rod, and congrats on the quarter.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

You bet. Thank you, Jacob.

Michael Rice -- President and Chief Executive Officer

Thanks, Jacob.

Operator

Next question is from Mr. Flaten from Lake Street Capital.

Thomas Flaten -- Lake Street Capital -- Analyst

Good afternoon, guys. Thanks for taking the questions.

Michael Rice -- President and Chief Executive Officer

Hi, Thomas.

Thomas Flaten -- Lake Street Capital -- Analyst

Just, I might be pushing a little bit here, but I know Mike, you've said that you'd likely see expansion in the commercial products in the 12 to 24 month window. You've got a couple of products that meet that criteria. Do you, is it too early from a small number of events to really see if that thesis is bearing out in terms of multiple expansion in terms of product that you're selling to those commercial products.

Michael Rice -- President and Chief Executive Officer

A bit still too early, Thomas. Sure. I mean we're in five CryoStor using five approved therapies. Now, I mentioned for more who could get approved in the next several quarters. I think the takeaway and our thesis there is that you know, CryoStor or HypoThermosol, they're used in so many customer clinical applications. And let's be fair about it. We know it's going to be probably serious attrition. If we're in several 100, we're not going to have 20 CAR-Ts all targeting the same specific form of cancer, right. The market can't support that. But nevertheless, we have so many shots on goal that we believe that over the next three to five years, if the FDA is doing what they say they're going to do, staff up into fast track applications, review and that, then we could see -- we could actually see 10 to 20 new approvals each year starting in 2025. And we're in a such a big number of those where there is tremendous upside for us on the media side alone.

Thomas Flaten -- Lake Street Capital -- Analyst

Great. And then to use someone else's phrase, a slightly bigger picture question. As you look out at the universe of potential acquisition opportunities, is there a SKU product versus service or do you have a, do you have a preference there or are you opportunistic across the board?

Michael Rice -- President and Chief Executive Officer

Well, I think the immediate response is certainly opportunistic. If we can find consumable with disposable revenues with media like margins, of course, we're going to try to find those first. Those aren't growing or falling off treaties and there aren't that many of those that are left. Nevertheless, we do have some targets that could be meaningful for us and we're active. So...

Thomas Flaten -- Lake Street Capital -- Analyst

Great. And then just one final one. I was caught up in taking notes. I was wondering if, Dusty, if you could repeat the seasonality comments that you made in the prepared comments. I'm not sure I caught those properly.

Dusty Tenney -- President and Chief Operating Officer

Yeah. So Thomas, the phraseology that I used there was really centered around the fact that in Q3, there is some level of slight downward turn in the business, slight, driven by the European summer holidays, but slightly offset by the US government fiscal year end spend. The second reference was really in Q4 and that's normally where we experienced a slight pickup just by virtue of the year end capital spending.

Thomas Flaten -- Lake Street Capital -- Analyst

Excellent. Thanks so much. Congrats on the quarter, guys. Thank you.

Michael Rice -- President and Chief Executive Officer

Thank you.

Operator

[Operator Instructions] Next question is from Mike Goeke [Phonetic] from KeyBanc Capital Markets.

Mike Goeke -- KeyBanc Capital Markets -- Analyst

Two on the media, any commercial stocking revenue in 1Q that was in preparation of two commercial launches that were approved in 1Q? And then looking forward, baked in the guidance, you're implying a pretty significant step up in growth in media, can you just talk to the visibility of that? And I guess any numbers baked into the potential commercial approvals that you mentioned earlier on the call?

Michael Rice -- President and Chief Executive Officer

Thanks, Mike. This is Mike. I'll take the first one. Yeah. So we would expect the company that recently got approved to be meaningful customers for us in this calendar year. Whether or not we're going to -- we can attribute their order flow for stocking or gearing up for commercialization. We're not going to get into that. But I would just leave my remarks to say that they should be meaningful customers, meaningful revenue contributions with media. Rod, you want to take the second part?

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Yeah, sure. So yeah, Mike, as we've talked about in the past, we have a pretty significant revenue concentration in the media business. And so the bulk of those customers we have supply agreements with and they provide us with forecasts, which gives us some decent visibility. It's getting a little choppier over the last, say, 24 months versus what it was before that. But nevertheless, it gives us some decent visibility and then also customers are starting to get in the habit of actually some of the larger ones placing POs out through the balance of the year which correspond to that forecast. So that we have pretty good visibility on a chunk of that media business, why we're pretty confident about where it is.

Mike Goeke -- KeyBanc Capital Markets -- Analyst

Great, thanks. And then Dusty, on the, Stirling side, I guess maybe run rate in the first quarter revenue of $17.5 million, that kind of gets you to $70 million for the full year, but the overall guidance, I think, implies about $60 million, once it's run into the BioLife mix. Can you kind of talk to the dynamics of that? And then incrementally how much revenue was baked into new Catalent announcement as well. Thanks, guys.

Dusty Tenney -- President and Chief Operating Officer

Yeah. So Mike, if you take a look at the business profile, I've provided a little bit of guidance, that's sort of laid right into what Rod had provided to you on a linear basis. And I think the upside that we're seeing inside the business is a byproduct of the fact that we did see very strong demand in Q1. One would say that things were over from a COVID perspective and I share some some observations and relationship to what that looks like in relationship to the total revenue. So given that as a construct and continued effort in terms of build-out of capabilities both in the research side, some level of COVID dynamics that is continuing to spillover and we're seeing that benefit come through by virtue of the bookings that we're seeing inside the business.

And as a result, and that's again supported by the guidance of, Rod, shared with the team. If you do linear extrapolate the Q1 even though, again, we expect to see a little bit of a slight downturn just by virtue of the conversation in Q3, on a linear basis, there's -- we're operating in that $60 million to $70 million range that you just noted.

Mike Goeke -- KeyBanc Capital Markets -- Analyst

And was the driver of the upside of the guide on the Italian [Phonetic] announcement. Can you for provide any color around that? Thanks.

Michael Rice -- President and Chief Executive Officer

So from a Catalent perspective that was baked in, as part of the guidance. They are expanding globally and we've got an incredible relationship that has been a byproduct of some of the work that we've done over the last two or three years in building that relationship.

Mike Goeke -- KeyBanc Capital Markets -- Analyst

Perfect, thanks for the time guys.

Michael Rice -- President and Chief Executive Officer

Thanks, Mike.

Operator

Next question is from Carl Byrnes from Northland Capital Markets.

Carl Byrnes -- Northland Capital Markets -- Analyst

Question, and also congratulations on your progress.

Michael Rice -- President and Chief Executive Officer

Thanks, Carl.

Carl Byrnes -- Northland Capital Markets -- Analyst

I was looking at media sales at $8.9 million, up 3% and I think $1.5 million was related to COVID safety purchases. In 2020, you had mentioned the normalized number would have been approximately 25% in the year-over-year basis. So my question here is, has the impact from the COVID safety purchases in 2020 baked off at this point? And then I have a follow-up question.

Michael Rice -- President and Chief Executive Officer

Yeah, I think that what we saw early on last year, when it happened, you might recall, Carl, that we were of two minds. We didn't know if it was a permanent safety stock that our customers were putting in place or if was simply demand pull forward, that would be result in reduced revenue throughout the rest of the year. I think at this point, we feel pretty confident to say that it was really demand pull forward and they used it throughout 2020 and the balance of 2020 was probably a little bit lower based on that pull forward. So we think that there is zero impact in Q1 of this issue of Q1 of this year. So from our perspective, it's behind us, but it does create this lumpiness and we've talked about in the past that as we go forward through the year. In our view, the best way to try to calibrate the media growth rate is to look at the year-to-date number as again as we go through 2021. And I think that's going to be a better reflection, because it will smooth out the sort of bumps that we've had in 2020.

Carl Byrnes -- Northland Capital Markets -- Analyst

Got it. That's very helpful. And then also just to follow up on the Catalent expanded agreement, if I recall correctly, there was a commitment in addition to being preferred vendor of 100 freezers. I'm wondering if you're able to quantify that spend and over what timeframe you would expect to garner it. Thanks.

Dusty Tenney -- President and Chief Operating Officer

Yeah. So we've, got an agreement with Catalent and the specifics around the 100 is a byproduct of them actually getting their facilities in place. And at the time that their facilities are ready, we will be deploying those system. So those have been earmarked and again baked into our outlook. But most likely that will take place here over the back half of the year.

Carl Byrnes -- Northland Capital Markets -- Analyst

Excellent, thanks so much and congrats again.

Michael Rice -- President and Chief Executive Officer

Thanks, Carl.

Dusty Tenney -- President and Chief Operating Officer

Thanks, Carl.

Operator

Next question is from Suraj Kalia from Oppenheimer.

Suraj Kalia -- Oppenheimer -- Analyst

Good afternoon, everyone.

Michael Rice -- President and Chief Executive Officer

Hi, Suraj.

Suraj Kalia -- Oppenheimer -- Analyst

Hey, Dusty, so I just want to make sure for Stirling, we understand the incremental COVID-related business, if I remember correctly, from the last call that was something between $10 million to $20 million was COVID related. Help us sort of get our arms around so that we can normalize on an ex-COVID basis once we come out of this.

Dusty Tenney -- President and Chief Operating Officer

Yeah, so, Suraj, the framework, and I'll just speak relative to my comments during the call here today as a framework roughly about I'd say about 20% to 25% of what we saw in the $17.5 million, we directly attributed to revenues that were targeted for COVID. So the math there and the dynamics is roughly about $3 million to $4 million of that is what we experienced in Q1. As I mentioned before, there is sort of declining focus now on COVID. So most of the bookings that we've experienced in Q1, we're actually outside the COVID environment, we're actually seeing the market come back in critical areas, in the pharma and biotech. Some of the bio-banking dynamics that are taking place in the business, in the market, as well as even in clinical trials and studies where our products play an extremely important part.

So, at least from a guidance perspective, I can at least share with you some perspectives on what we have reported here, but we are seeing a decline in that dynamic that it's actually being picked up by all the other specific market areas that we have targeted within the business.

Suraj Kalia -- Oppenheimer -- Analyst

And specifically for Stirling, Dusty, would I be off in terms of directional [Technical Issues] range was, that's still the incremental COVID contribution. And I'm specifically asking about Stirling.

Dusty Tenney -- President and Chief Operating Officer

Suraj, just a little bit, Suraj, it looked like you were about to say a number or a percent or something and we lost the line right then.

Suraj Kalia -- Oppenheimer -- Analyst

Gentlemen, sorry if my line is bad. Can you hear me all right?

Dusty Tenney -- President and Chief Operating Officer

Yeah.

Suraj Kalia -- Oppenheimer -- Analyst

I was just asking about 10 to 20 [Phonetic] really.

Dusty Tenney -- President and Chief Operating Officer

What's the context?

Suraj Kalia -- Oppenheimer -- Analyst

Yeah. Hello.

Dusty Tenney -- President and Chief Operating Officer

Yeah. Suraj, could you...Suraj, could you repeat?

Suraj Kalia -- Oppenheimer -- Analyst

I'm sorry gentlemen. It looks like my line is bad. Mike, I'll take this offline. Mike, big picture, and I hope you all can hear me all right on the call. How should Mike, revenues per customer is one of the metrics that we have always talked about in the past and I think that has driven to a large part, your acquisition strategy. Mike, can you give us directionally where we are in terms of this specific metric and where we are headed, just given the cross-selling efforts. Again, I hope you guys heard me or my question, all right.

Michael Rice -- President and Chief Executive Officer

Yeah, we have the question right on, Suraj. Well, now it's more complicate, because we have more and more stuff to sell. We're still working to get much better visibility on how many customers in any given quarter by one, two, three, four or all five of the solutions. We had some modest increases sequentially from Q4 to Q1, not ready to start to publish it yet, because we're still refining the database and how we're going to present that or illustrate it, index or speak to it on conference calls, but it is working. And I think the thing I'm most pleased about, Suraj, is that we have that sequential increase, even in the Q1 in our COVID related travel restriction environment where we weren't seeing customers face to face. So we're obviously much more optimistic that now we can get on the road and visit customers that will accelerate the cross selling leverage and will capitalize on this core media customer base and be able to transact with them for the other parts of the portfolio.

Suraj Kalia -- Oppenheimer -- Analyst

Got it. And Rod, last question for you, and I'll hop back in the queue. Gross margins, obviously there was a step up in SciSafe contribution and gross margins took a take-down, when Stirling starts flowing through, in Q2 and beyond, how would you advise we modeled, again from a P&L perspective. Gentlemen, thank you for taking my questions.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Thanks, Suraj. You bet. On an adjusted basis, Suraj, there is going to be some dilution to the gross margin just based on the fact that the Stirling operation has been running somewhere in the 32% to 34% range. So if you were to take our current blend and then apply the percentage of revenue, we expect from them, then you'd be -- you'd be getting an adjusted gross margin then that is lower than what it was. I think that we have talked about the fact that both at CBS, and that CBS, we had a strong gross margin, probably a record gross margin in Q1, in large part, thanks to the shipment of that one very large freezer that has significantly better margins than the rest of the product line and on Dusty side, at Stirling, there is a path laid out to where there is going to be some significant margin improvement as we march down through the year, particularly in Q4 and then further out into 2022. So our expectations for margins returning on an adjusted basis back into sort of the $5 million -- with a $5 million in front of it, we feel very confident that we'll get there. Still there, Suraj.

Michael Rice -- President and Chief Executive Officer

John, why don't you queue up the call for the question from Marc Wiesenberger.

Operator

Certainly. We have Marc Wiesenberger from B. Riley Securities.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Thanks, good afternoon. Appreciate you taking my question. Hi. Over the medium term, can you talk about the growth expectations for the liquid nitrogen freezers from CBS versus the Stirling product line and maybe how the go-to-market strategies might differ? And as Stirling looks to kind of get into the much lower temperatures around 180 degree Celsius, how would that impact the Stirling or the CBS freezer demand potentially?

Michael Rice -- President and Chief Executive Officer

Sure, Marc, really insightful questions. Thanks. So, Dusty, why don't you speak to our integrated freezer platform sales team. Now that we've stitched these together, and all these folks now have an opportunity to tweet for really any opportunity.

Dusty Tenney -- President and Chief Operating Officer

Sure. Marc, so one of the biggest attributes Stirling came on to as part of the BioLife business is that we have roughly about 15 direct selling resources complement of course with a strong distribution network that now is overlaid on top of all freezer sales. So those respective key stakeholders that we have within our sales organization and now going to be selling both the Stirling line as well as the CBS line. The key thing here that I think you need to understand is that most of these customers are dealing with several different modalities in relationship to the research, they are doing, our freezers clearly focus on targeted therapies using blood, urine as an example, typically in the minus 80 regime, and the business to CBS is really focused on cells and tissues.

And that's why those respective modalities ultimately offer up a very, very complementary approach in terms of how we think about our customers, because most of those customers are doing research now on all those various biologic materials and that gives us a natural extension to be talking with very similar customers that we either have business with inside Stirling or business within CBS and the natural combination that exist. And as Mike sort of noted earlier on, I want to footnote that now we have opportunities to actually sell to customers that are buying media, customers that are also buying some of the thaw and evo related products. So it really opens up some doors, but by virtue of having some critical mass, now we can really get after it from a market penetration standpoint and the leverage that -- leverage that go to market as a pathway to really strengthen the capabilities that we have in serving both ends of the biological spectrum between minus 20 and minus 1.96.

Michael Rice -- President and Chief Executive Officer

And then Dusty, let's take part 2, I think, Marc, the inference is, if in fact Stirling running at minus 1.60, can it be commercialized? Will that displace LN2 and I think the short answer is, in situations where there is no LN2 infrastructure, certainly not. But we'll have basically everything the portfolio to offer, whatever the customer needs. That's correct.

Dusty Tenney -- President and Chief Operating Officer

Yeah, I think, actually it's complementary, it's not as if it would take away from the opportunities at CBS, there are places in the world today, Marc that have difficulty in getting LN2. I mean, it's not a renewable type of resource and because of that, that opens up the opportunities and to be quite honest in that particular space in the mechanical space, there really isn't a level of competition that we believe it would create any challenges in terms of us taking the Stirling technology into cryogenic temperatures.

Michael Rice -- President and Chief Executive Officer

And then part 3 of Marc's question was, are we prepared guys to speak to the various growth rates of LN2 versus mechanical? and we're not Marc, not at this time, we have the freezer platform now, it's also including thaw. So we're not going to speak to the growth rates of the three portfolio platform, so can't do that one.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Got it. That was a lot of information. Very helpful, very nice announcement with the Catalent partnership. As CDMOs kind of continue to play a more prominent role in cell and gene therapy development and manufacture. I'm wondering, can you talk to how you expect your relationship to evolve with the Catalent and maybe more broadly, kind of what percentage of sales in the past did CDMOs maybe represent and over time, what percentage of sales could they could they come to represent?

Michael Rice -- President and Chief Executive Officer

Yeah. Good questions, Marc. If we were talking a couple of years ago, only about media, I could put my finger right in that number, and I can tell you media revenue from the various 10 or less CDMOs that were out there and in play at the time, but now it's a lot more complicated. But we'll do a little research and maybe we could follow-up with the call with you later on and we've got scheduled if we can get our hands on it, if not, maybe some other time. But I think the takeaway is that we fully expect to be able to replicate to some degree the success we've had with this large CDMO. We're already selling at least one solution in the portfolio to all the CMOs in the CGD space right now. And by dint of those relationships and our ability to leverage our customer service and corporate reputations, we would expect to try to replicate that to some degree, if not, realize another CDMO that uses everything in the portfolio like Catalent does.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Great, thanks. And then one last one, could you potentially quantify the duplicative costs that will be taken out of the system throughout the year and kind of maybe the timeline for those rationalizations? Thank you.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

No, I don't think we want to go there, yet, we still have a lot of work to do and Dusty is really all over that. What I can say no, as a concrete example of a synergy from a capex perspective is on the SciSafe side, Gary [Phonetic] is a user of the Stirling freezers, and so this year alone in order to outfit, the new location in Europe that's being opened up right now, we're going to be saving approximately $2 million in capex by moving Stirling freezers in there versus buying from some other vendor.

Marc Wiesenberger -- B. Riley Securities -- Analyst

Very helpful, Rod. Thanks. Thank you.

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

You bet.

Operator

We don't have any questions at this time. Presenters, you may continue.

Michael Rice -- President and Chief Executive Officer

Thanks, John. Thanks everyone for your interest in BioLife. It's clear we've built a very special culture here that we're extending to our acquired companies. This team is totally customer-focused and that dedication is paying off as evidenced by our operating results. We're looking forward to sharing our Q2 results with you. Good night.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Roderick de Greef -- Chief Financial Officer and Chief Operating Officer

Michael Rice -- President and Chief Executive Officer

Dusty Tenney -- President and Chief Operating Officer

Chris Lin -- Cowen and Company -- Analyst

Jacob Johnson -- Stephens -- Analyst

Thomas Flaten -- Lake Street Capital -- Analyst

Mike Goeke -- KeyBanc Capital Markets -- Analyst

Carl Byrnes -- Northland Capital Markets -- Analyst

Suraj Kalia -- Oppenheimer -- Analyst

Marc Wiesenberger -- B. Riley Securities -- Analyst

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