What happened
Shares of BioLife Solutions (BLFS 3.97%) were down by more than 27% as of 1:15 p.m. on Wednesday after the healthcare company posted its second-quarter earnings report. The stock is down more than 28% this year.
So what
BioLife makes bio preservation tools for cells and tissues for the gene therapy market. Along with its second-quarter earnings report, it said it plans to divest itself of its Stirling Ultracold and CBS freezer assets by the end of 2023, allowing it to focus on higher-margin assets.
In the report, it said it had $39.5 million in revenue, down 3% year over year. It also said it had a net loss of $10.3 million, or $0.23 per share, compared to a loss of $76.6 million, or $1.72 per share, in the same period a year ago.
"While near-term results are disappointing, we remain confident in the mid- and long-term growth potential for BioLife and our ability to generate cash flows from operations post our freezer divestitures," chief financial officer Troy Wichterman said.
What really drove the stock down was BioLife's guidance. Management now expects yearly revenue to be between $144 million and $158 million, meaning a drop of between 2% and 11% over 2022.
Now what
The company operates in three platforms: cell processing, freezers and thaw systems, and storage and storage services. All three saw declines in guidance, but the biggest drop is expected to be in freezers and thaw systems, with the company predicting between $53 million and $56 million in revenue this year, down 16% to 21%.
That explains why the company is divesting itself of its freezer assets, with the demand for COVID vaccine cold storage declining. While BioLife has been able to grow annual revenue, it hasn't been consistently profitable.
