IMMUCELL CORP /DE/ Q4 FY2024 earnings call

• Sales growth of 52% was seen in both the fourth quarter of 2024 and the full year 2024 compared to prior periods. - Production contamination events in 2023 and the first 9 months of 2024 limited output, but no contamination has occurred since April 2024, indicating effective remediation. - Gross margin improved due to increased sales and better production post-remediation. - Re-Tain product is in the process of seeking FDA approval for limited distribution control launch, with ongoing discussions for expedited review. - Exploration of strategic options to offset Re-Tain product development expenses. - Focus on First Defense commercial opportunity and plan to file Form 10-K by end of March.

In the fourth quarter of 2024, sales were $7.8 million. For the full year 2024, sales grew by 52% compared to the prior year. The gross margin in the fourth quarter of 2024 was $2.8 million, which was a 125% increase ($1.6 million) from the fourth quarter of 2023. The full year 2024 gross margin was $7.9 million, a 105% increase ($4.1 million) from 2023. The company achieved its goal of increasing annual production capacity to $30 million or more per year as indicated by the $7.8 million sales in the fourth quarter of 2024.

• The 2024 results position the company strongly for 2025, with sales in Q4 2024 indicating production capacity target reached. - Plan to use 2025 price increase to aid gross margin and focus on yield and throughput to reach over 40% gross margin. - Re-Tain's regulatory approval and limited distribution control launch strategy are ongoing with progress towards FDA clearance.

• Past production contamination events that affected output and supply. - Uncertainties related to FDA approval of Re-Tain and potential delays or issues in the regulatory review process.

Q: Regarding gross margin, what factors account for the difference from previous years and what's needed to reach over 40%?

A: Factors include product mix (Tri-Shield being more expensive to produce), 2025 price increase, and yield/throughput. Need to continue improving yield and throughput, building on the 37% gross margin in Q4 2024.

Q: About inventory, how did the inventory situation arise and what's the plan for the new product format?

A: Inventory increase was due to expanding colostrum collection ahead of production growth, but contamination events led to unused milk being frozen. The new product format is a spray-dried bulk product for a different market segment, with work in 2025 to inform 2026 and beyond, no regulatory hurdles for this new format