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DATE
Friday, May 15, 2026 at 9 a.m. ET
CALL PARTICIPANTS
- President and Chief Executive Officer — F. Olivier Te Boekhorst
- Chief Financial Officer — Timothy C. Fiori
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TAKEAWAYS
- Product sales -- $10.4 million, an increase of 28.4% year over year, establishing a new quarterly record.
- Gross Margin -- 45%, up from 41.6% a year ago, despite a 2.4% headwind from reallocated Re-Tain-related costs to cost of goods sold.
- Net Income -- $1.9 million, representing $0.21 per share, up 34% from $1.4 million or $0.16 per share in the prior-year period.
- Domestic Sales -- $9.7 million, an increase of 35.7% year over year; international sales declined 30.2% to approximately $600 thousand.
- Tri-Shield Sales Growth -- Sales of Tri-Shield rose 38.5%, with management noting it is the flagship product showing the most growth.
- Operating Expenses -- Increased to $2.7 million from $2.2 million due to higher G&A and sales expense, partially offset by lower product development costs.
- EBITDA (non-GAAP) -- Improved to $2.6 million versus $2.3 million year over year.
- Cash and Inventory -- Ended the quarter with $6.8 million in cash and $8.7 million in inventory; working capital rose from $13 million to $15 million since year end.
- First Defense Share Expansion -- Management noted U.S. category spend share for First Defense grew from 29.1% to 35.2%, and share of animals treated increased from 15% to 18.1% from 2021 to 2026.
- Manufacturing Output -- Exceeded 450,000 units per month compared to 380,000 in the prior year and 144,000 in 2024, as a result of coordinated yield improvements and incremental capital investment.
- Capacity Investment Plans -- Announced a $2 million settlement from a former contract manufacturer, to be deployed towards a colostrum processing plant capacity expansion.
- Sales Force Expansion -- U.S. territories expanded by three (instead of two), driven by momentum and efforts to target both the dairy and beef segments nationwide.
- First Defense Vault Launch -- Recently launched functional feed product positioned at a lower price point, not requiring individual calf administration; early in launch phase with a different manufacturing cost structure.
- Governance Update -- Corporate governance changes implemented, resulting in a smaller, more independent board with three new members with animal health and functional expertise.
SUMMARY
ImmuCell Corporation (ICCC +4.96%) achieved all-time high quarterly revenues and profitable growth after a year defined by strategic focus on First Defense, substantial increases in manufacturing output, and successful execution of its domestic commercial strategy. Management revealed that price realization and output gains contributed to margin enhancement, and that domestic demand was particularly robust, notably for premium products. The company is deploying settlement proceeds into added production capacity, intends to prioritize sustainable international expansion, and has continued to enhance its leadership and market coverage infrastructure.
- Management reported, "first defense accelerated and accounted for what we estimated was nearly 80% of total category dollar expansion in the quarter," highlighting its central role in market growth.
- "High and rapidly increasing calf values have driven an increased appetite to invest in premium prevention products," according to the CEO, suggesting pricing power in the target market.
- Output gains were enabled by "improving our planning," adding overtime, reducing waste, and targeted capital investments to relieve bottlenecks, according to commentary during Q&A.
- The First Defense Vault product targets customers preferring group administration and is manufactured at lower cost, aimed at expanding reach but still in early launch stages.
- International business development initiatives now follow "a rigorous process involving management and the board to understand market opportunities and product requirements," indicating more disciplined international execution.
INDUSTRY GLOSSARY
- Calf scours: Infectious diarrhea in newborn calves, a major cause of pre-weaning mortality and economic loss.
- Colostrum: The first form of milk produced by mammals, rich in antibodies and bioactives, used in ImmuCell’s product formulations.
- Tri-Shield: ImmuCell's flagship oral antibody-based product preventing E. coli, coronavirus, and rotavirus in calves.
- First Defense Vault: ImmuCell’s non-USDA-approved, lower-cost functional feed product for group administration to calves.
Full Conference Call Transcript
F. Olivier Te Boekhorst president and CEO of ImmuCell Corporation. for opening remarks. Olivier?
F. Olivier Te Boekhorst: Thanks, Joe, and good morning, everyone. it is my pleasure to welcome you to today's discussion of ImmuCell's results for the 2026. Starting this quarter, our discussion of results will be accompanied by a few slides that are part of our new investor presentation. You can find that on our investor page, immucell.com/investors. In 2025, the company made significant changes to better position itself for success. Including a strategic focus on the calf scours market and investments in leadership and in manufacturing yield improvement. In the 2026, we are starting to see the results of this focus. We achieved our first-ever $10 million revenue quarter, which is an exciting milestone for our commercial team and our manufacturing team.
And we also achieved 45% gross margins after absorbing legacy retain related costs that shifted from product development to gross to cost of goods sold and reduced gross margins by 2.4% during the quarter. We also grew net income 34% compared to the 2025. In previous calls, we explained the rationale behind our new strategy to focus on First Defense. Our leading calf scours preventative product. Since 2 thousand ImmuCell has competed successfully in the large growing market for calf scours prevention with a highly differentiated product portfolio that we believe has considerable runway for further expansion domestically and internationally.
As we will discuss later in the call, we believe we are gaining share in this market, competing against the world's largest animal health companies. Historically, ImmuCell's challenges have centered less around market demand and more on manufacturing capacity and product availability. And for a company our size, it makes a lot of sense to focus on our successful on market product and solve those challenges and we are well underway to do that. Our results in the first quarter give us confidence in this decision. I will review some of these drivers in more detail and share some of our market observations after Timothy C.
Fiori, our Chief Financial Officer, completes a deeper review of the financials for the 2026. I now turn the call over to him. Timothy.
Timothy C. Fiori: Thank you, Olivier. I will start with a short recap of product sales results, which are unchanged from our April 8 press release. All the numbers I will speak to are approximate and rounded. Product sales for the 2026 came in at $10.4 million an increase of 28.4% compared to what had been a record breaking 2025. Domestic sales for the first quarter grew 35.7% compared to the 2025, $9.7 million while international sales for the first quarter declined 30.2% to about $600 thousand in the same period. In terms of product specifics, we continue to be pleased with strong relative sales of Tri-Shield, our flagship product. Which grew 38.5% in the 2026 compared to the 2025.
We realized gross margin improvement in the first quarter compared to prior year. Gross margin as a percentage of product sales increased to 45% during the 2026 compared to 41.6% during the 2025. We achieved this improvement despite a headwind of 2.4% in the 2026 coming from costs associated with former retained assets, year-over-year have shifted the cost of goods sold from product development expense. Year over year gross margin expansion in the 2026 is coming from both price and manufacturing performance, partially offset by the aforementioned shift of former retain related costs. Operating expenses increased to $2.7 million in the 2026 compared to $2.2 million during the 2025.
This was driven by increases in G&A mostly related to investments in leadership, and higher sales expense related to expanded commercial activities resuming a more normal pace following the back order management period in the 2025. Operating expenses were partially offset by lower product development expenses due to the previously mentioned shift of former retain related expenses to cost of goods sold. Other expense decreased to $15 thousand in the 2026 compared to $330 thousand of other income in the 2025. This was driven by a nonrecurring insurance payment in the 2025.
To wrap up our income statement discussion, our net income was $1.9 million or $0.21 per share during the 2026 compared to $1.4 million or $0.16 per share during the 2025. As Oliver mentioned, this is a 34% increase in net income year over year. As usual, we provided EBITDA figures in yesterday's earnings release, We believe looking at EBITDA assists management and investors by looking at our performance across reporting periods on a consistent basis excluding certain charges from our reported income. Before income taxes. EBITDA improved to $2.6 million in the 2020 from $2.3 million in the 2025. To wrap up with financials, let me highlight a few key balance sheet items.
Our balance sheet as of 03/31/2026 is in a strong position with improvements versus year end 2025 driven by the robust performance in product sales that we discussed previously. We ended the 2026 with $6.8 million of cash on hand and $8.7 million of inventory. Working capital increased from $13 million at the end of 2025 to $15 million at the end of the 2020. We will continue to closely monitor and manage cash and our other assets as we balance long term investment with near term operational needs. With that, I will turn the call back to Olivier. Olivier?
F. Olivier Te Boekhorst: Thanks, Timothy. Congratulations to the team for the excellent results in the 2026. As I mentioned in my initial remarks, ImmuCell made the decision to focus on our scours preventative products called First Defense. In late 2025. In the first quarter of this year, we achieved the record $10 million product sales, and price yield particularly has showed very strong growth. It is the most advanced protection against scours that we offer in the market. Our focus on first defense makes a lot of sense when you consider calf values have increased almost sevenfold in the past 3 years.
And scours is a condition that affects up to 15% of pre weaning calves and is the leading cause of death in these calves. We believe it causes up to $1 billion of economic burden in The US due to treatment costs, performance losses, and mortality. High and rapidly increasing calf values have driven an increased appetite to invest in premium prevention products and scours is top of mind for many producers due to prevalence, morbidity, and mortality. In 2025, we estimate US farmers spent approximately $93 million on 14% year-over-year growth. In Q1 2026, we saw a slightly moderated 11% year-to-year growth for the overall scours biologics category.
But ImmuCell's first defense accelerated and accounted for what we estimated was nearly 80% of total category dollar expansion in the quarter. This is based on revenues to end customers as reported by distribution partners and market research firms. We are excited to report that our share of US category spend expanded from 29.1% to 35.2%, and our share of animals treated increased from 15% to 18.1% between 2021 and the 2026. We believe this performance is driven by an increase in sales activity that started last quarter and the market's increasing confidence in our product availability. Another driver is our premium pricing and positioning in the market.
Premium pricing explains why our share of spend is higher than our share of animals treated. When I visited with our customers this quarter, they told me that first Defense products have several advantages that create a premium value proposition for them. Specifically, First Defense provides immediate protection for immune incompetent newborn calves against the 3 common pathogens that cause scours. And in addition, it also offers a lot of other bioactives that help calves stay healthy as a result of being derived from colostrum. So our sales activities are now pivoting to winning new customers, since about 55% of calves are still not getting any biological treatments at all.
We believe the addressable market in The US is more than $200 million and internationally, the TAM is at least 5x as large. We will focus on these opportunities. As I discussed in previous calls, the key part of our strategy given the tailwind from the macro environment and our excellent value proposition for customers to ensure we have product available. This has been challenging for ImmuCell, and we are working hard every day to ensure we maximize yield and increase our output to keep up with demand. We made decisions in late 2025 to address manufacturing capacity constraints.
And as you can see, we had an excellent 2026, reaching a record of more than 450 thousand manufacturing units of output per month. And this compares to 380 thousand units per month we achieved in 2025, 144 thousand in 2024, and 252 thousand in 2023. This expansion of output helped improve our gross margin, in addition to the price realization that Timothy mentioned. Yield improvement is challenging. And comes from doing a lot of different things really well every single day. there is no magic bullet or single big lever. The team got together, and committed to ensuring availability. And then we improved our planning, which allowed for more preventative maintenance and balanced workflows.
We reduced waste and scrap events, and we increased utilization by deploying some overtime and making incremental investments in various equipment. to increase throughput. I cannot thank the team enough for their efforts. Just a note about manufacturing units, they do not line up with revenue because of the different and changing price points of our products and the different number of units used for different products in our portfolio. There is still a lot of work to do, to stay ahead of demand for the remainder of 2026. We have to stay focused on managing and mitigating contamination risk. We have to keep providing great service to our colostrum supplying farms.
We have to manage yield improvement while we execute a major capacity expansion at our colostrum processing plant. We are pleased to announce that we reached a $2 million settlement with a former contract and we plan to deploy this cash to expand capacity to meet long term demand. We plan to use more advanced process flows, state-of-the-art drying equipment, and assets previously purchased to manufacture retain the subclinical mastitis product that we have been developing until we focused on first defense in December 2025. We are finalizing these expansion plans, and we will communicate more information on future earnings calls. In previous calls, we discussed other investments we are making aligned with our new growth strategy.
We hired an international business development executive with decades of dairy industry experience, and he is helping us transition from a reactive approach to international opportunities. To a planful strategic approach. We are using a rigorous process involving management and the board to understand market opportunities and product requirements, go to market investments, regulatory activity and timelines, and our capacity expansion timelines as well. While we believe the international opportunity is significant, success will require disciplined market prioritization and time to prepare for and execute successfully. And our efforts are focused on building the right foundation for sustainable global expansion.
In the meantime, we have expanded our sales territories in The US by 3 instead of the previously announced 2 territories since we see so much momentum in the domestic market. Finally, I will repeat what I have communicated on each call. Our top priority at ImmuCell is solid execution across the organization. From sales to farm management to vaccine manufacturing and colostrum processing, including all the support functions that make future profitable growth possible. In the first quarter of the year, we announced changes to our corporate governance that supports this focus. We now have a smaller independent board with 3 new board members who bring extensive animal health and functional expertise.
I look forward to working with the new board on executing our focused strategy to deliver for today while we secure the future. With that said, we will be happy to take your questions. Let's have the operator open up the lines.
Operator: Thank you. We will now begin the question and answer session. As a reminder, please limit yourself to 1 question. To ask a question, you may press star then the number 1. If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star then the number 2. At this time, we will pause momentarily to assemble our roster. And as a reminder, if you do have a question, please press star then the number 1. And today's first question comes from Frank Gasca, a Private Investor. Please go ahead. And Frank, your line is open.
Analyst (Frank Gasca): Yes, outstanding quarter. And congratulations to the team on that performance. Could you talk a little bit about your first defense vault product? And its seasonality, its target market. Whether or not it competes with existing products.
F. Olivier Te Boekhorst: Thank you for that question. Let me see if I can give you a little bit more detail. So our functional feed product is a non USDA approved product that uses a different manufacturing process, so that we use a different process to make it. But it essentially has our first defense technology inside that uses the same colostrum. And it is reduces our cost to manufacture, and it is offered to the market at a lower price point. And it is particularly useful for those operations that do not want to feed each calf individually, but can add this to either water or colostrum or milk that they are providing to the calves as a group.
And so it has a different dynamic in that regard. We launched it late last year, second half of last year. Essentially, the new formulations of this product. And so we are, it is still in a product launch phase, for us. Thank you.
Operator: And the next question comes from George Melas with MKH Management. Please proceed.
Analyst (George Melas-Kyriazi): Thank you. Yeah, totally outstanding quarter. Congratulations on a fantastic start. I want to ask a few questions about production capacity. You said that there is no magic bullet to improving production and yield that there is so many different levels. Can you tell us a little bit more about what were some of the key improvement that led to the yield improvement. And also, with your current capacity and your 4 freezers, what do you see is your maximum capacity at this point?
F. Olivier Te Boekhorst: Thank you, George. For your question. The there are some primary levers that we use in the last quarter, and there is some others that we are planning for that will hopefully yield more in the future. So the primary levers in the past 4 to 6 months have been, improving our planning So aligning our sales forecast with our production forecast on a very kind of SKU-level and then planning our workflows so that it is balanced. So that 1 part of the team is not waiting for another part of the team and with this planning, we also added some overtime capacity to some critical steps in the manufacturing process.
And if you do that in a planned way, it is manageable and you know, it ties in back to the planning point that I made. We also reduced waste in our process. There are parts of our process where we are not using everything that we could. And so reusing and just focus on that waste and reducing that increases output. Finally, there were a couple of steps in the process where minor, I would say, investments in capital, and a bigger tank, some extra membranes, I mean, some things like that. Really helped increase the throughput of a step in the process that was either a bottleneck or about to become a bottleneck.
And so those were the key things that we have done. To further improve yields, and we are looking at them a continuous basis. We have a program in place that we are all focused on to get to a higher yield. And we review that program more several times a week. Actually, we are working on it. And so we do not know and have a specific number in mind of what is our maximum. We are just improving yield kind of on a percentage basis, if you will, on a continuous basis. And at the same time, as I mentioned in my comments, it is time to think about a major capacity expansion.
And so we are very fortunate or that we have the payment from our contract manufacturer that we can deploy towards that. And we are we are in the midst of actively planning a capacity expansion for our plant.
Analyst (George Melas-Kyriazi): Okay. Great. Thank you for that. If I look at slide number 5, where you have basically the product mix over the last 3 years. Help us understand the trajectory of Tri-Shield how it dipped during 2025 and has had a huge rebound. What drove that? Was that demand driven? I imagine you have some ability to influence demand. But and it is a puzzling it seems to peak in the first quarter, but and it is maybe-- help us understand that. If you can.
F. Olivier Te Boekhorst: Yeah. Hi, George. Good to hear from you. I this is Sam here. I think that the thing that is challenging about some of the trends in the past few years even, you know, there is the back order dynamics, so it really a lot of time depended on what was available to sell to customers. And I think that creates some different dynamics that, you know, may not be intuitive. So that could be what you are seeing. I mean, overall, the trend is that more customers seem to be shifting to Tri-Shield.
That seems to be really where we are growing. it is our flagship product and, you know, that is that is the trend that we are focused on.
Analyst (George Melas-Kyriazi): Okay. Great. Thank you very much.
F. Olivier Te Boekhorst: I think. Sure. George, the other thing that I would add to that is that Tri-Shield is a premium priced product also compared to Dual-Force, our other products. And in the calving season, you know, that we just had, it is the least price sensitive segment that had a lot of demand in the last quarter or 2. And so that helps explain some of the uptake on Tri-Shield as well.
Analyst (George Melas-Kyriazi): Okay. Yeah.
Operator: And again, as a reminder, if you do have a question, please press star then the number 1. And the next question is a follow-up from Frank Gasca, a private investor. Please go ahead.
Analyst (Frank Gasca): Yes. Thanks for taking my questions. Your increase in sales force again that you just mentioned, curious as to what the main drivers of that is? And as far as regionality and the target market for those regions. Could you get into that? Because it is my understanding that the market is divided into dairy and beef, Where is your growth headed? Where is your sales directed? Thank you.
F. Olivier Te Boekhorst: Thank you, Frank. We have expanded our sales team to essentially cover the entire country where there are calves, whether they are beef or dairy because both industries use our product. Although traditionally more on the dairy segment, we are seeing significant increases in the beef as well. Because beef calves are also increasing in value. And so with the increase in value of the calf, investing in a preventative like First Defense makes a lot of sense for producers where they really get a really good return on investment. So our goal is that, we understand, and I understand from my personal visits to customers, but the sales team sees this, of course, every day.
Is that the more contact you have with customers to explain how our product works, the differences between our product and some of our competitors, which are vaccines, and the differentiation that our product provides, it really, you know, really helps close the deal. Helps educate the customer, and they appreciate the investment in them. So our strategy around Salesforce expansion is that more customer contact equals more revenue. We have been seeing that now for a couple of quarters. So we decided that it makes sense to add a third territory or territory in the West of the US that had been frankly open for almost a year now. We decided to accelerate the hiring for that.
For that for that region. So I hope that gives you some color. We are really looking at in each region of the country, what are the number of calves that are out there, what percentage of them are getting any treatment at all, and what is the sales cycle look like? We have some experience in that because in some regions, if you can close a deal faster than others, so we are looking at kind of the fastest, highest return of our investment when we when we talk about adding commercial people to our team.
Analyst (Frank Gasca): That was great. Thank you very much.
Operator: Thank you. And at this time, this concludes our question and answer session.
Joe Diaz: I would now like to turn the conference back over to Joe Diaz with Lytham Partners for any closing remarks. Thank you, Chris, and thank all of you for participating on today's call. We look forward to talking with you again to review the results for the quarter ended 06/30/2026. During the week of 08/10/2026. Thanks again, and have a great day.
Operator: And the conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
