Earnings Call Transcript - BLFS Q4 2021

Operator, Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 and Full Year 2021 BioLife Solutions, Inc. Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Troy Wichterman. Please go ahead, sir.

Troy Wichterman, CFO

Thank you, Grace. Good afternoon, everyone, and thank you for joining this call. Joining me on today's call are Mike Rice, Chairman and Chief Executive Officer; and Rod de Greef, President and Chief Operating Officer. Earlier today, we issued a press release announcing our financial results and operational highlights for the fourth quarter and full year of 2021. 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 or its acquisitions. 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 this 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 M&A activity, we believe that the use of non-GAAP or adjusted metrics provides investors with a clearer view of our current financial results when compared to prior periods. Now I'd like to turn the call over to Mike Rice, Chairman and CEO of BioLife Solutions.

Mike Rice, Chairman & CEO

Thanks, Troy, and good afternoon, everyone. Thank you for joining our call. After my remarks, Troy will present our financials for Q4 and the full year of 2021 and our initial revenue guidance for 2022. Then Rod will provide an update on key operational initiatives he is managing targeting gross margin improvements, specifically for our Stirling ULT freezer platform. After that, we'll be glad to take your questions. Turning to Q4 revenue and customer highlights. It's clear that our acquisitions of fast-growing assets are complementing stellar growth in biopreservation media revenue. Top line total revenue was $37 million in Q4; this was up 153% year-over-year and 10% sequentially. Organic revenue growth in the fourth quarter was 64% year-over-year driven by biopreservation media revenue growth of 64% compared to Q4 of 2020. Starting in Q4, one large distributor began increasing their inventory par levels to get to a 90-day stock in response to strong downstream demand. We believe this will continue in Q1 2022 and then level off. In Q4, we gained at least 235 new customers across our three product and services platforms, and I'll remind you now what those are. First, cell processing, which includes biopreservation media and Sexton products. Second is our freezers and thaw systems platform comprised of CBS liquid nitrogen freezers and Stirling mechanical freezers and ThawSTAR systems; and finally, storage and cold chain services, which includes our SciSafe storage services and our evo Cold Chain management offering. New Q4 customers by product line included 15 now using biopreservation media, 7 new ThawSTAR users, 11 new evo Cold Chain end users, 17 new cryogenic freezer customers, 159 new Stirling freezer customers, 14 new biostorage customers, and 12 new cell processing customers now using Sexton products. These 235 new customers in Q4 compared to 213 in all of 2020. For the full year 2021, we gained at least 700 new direct customers and we also benefited from very productive distributors, our two largest having sold and shipped our biopreservation media products to more than 4,200 unique end customers in 2021. This is really impressive and should help continue to build brand awareness of BioLife, CryoStor and HypoThermosol. Based on order volumes so far this year, we expect another stellar year for our direct team and indirect distribution partners in driving much broader adoption of our portfolio of bioproduction tools and services. Cross-selling to capture revenue synergies is a key focus for us. During 2021, 46 customers purchased at least one additional portfolio solution than they were previously using. We expect to continue to capture revenue synergies by driving broader adoption of our portfolio components at our strategic accounts. Now I'll make some qualitative comments about our three revenue platforms and let Troy speak to revenue for each. For cell processing in Q4, we received confirmation that our cell processing media products will be used in at least 17 additional clinical trials for new cell or gene therapies. We estimate that our biopreservation media products have been incorporated into more than 530 customer clinical applications, up from 450 at the end of 2020. For biopreservation media, we also remain confident that each customer clinical application, if approved, could generate annual revenue in a range of $500,000 to $2 million, based on the estimated number of doses our customers would manufacture in a year, the volume of our media in each dose in milliliters and the average selling price per milliliter. To date, our biopreservation media is used in 8 approved therapies and our Sexton cell processing media and vials are used in 3 approved therapies. Our biopreservation media products are also embedded in at least 10 additional CGT applications for which BLA or other regulatory approval filings are expected to be submitted this year and next year. I'll conclude by saying that our biopreservation media clinical customer base includes most of the CAR T-cell developers with our products embedded in the majority of the autologous and allogeneic platforms currently in development. We expect to be able to continue to take share from home-brew preservation cocktails as awareness grows with the critical role our engineered media formulations play in reducing risk for CGT companies. Turning to our freezers and Thaw systems platform. As noted, we're hyper focused on improving quality and reducing cost of our Stirling ULT freezer products. The growing pains we're experiencing are a result of customer demand that saw our ULT team more than double unit production in 2021 compared to 2020. We shipped nearly 8,000 freezers last year and this demand surge strained our supply chain and exposed some latent quality issues that we inherited. Rod will speak in more detail on our recovery and mitigation activities. I can say that while a few ULT customers had to order from our competitors, overall, demand remains strong, and we're working nearly around the clock to fulfill customer orders. Additionally, we're in discussion with one of our largest ULT freezer distributors to add our CBS liquid nitrogen freezer platform to their BioLife offering. We expect to finalize this amendment to our distribution agreement in the next few months. Specific to our ThawSTAR product family, one of our largest biopreservation media customers, a distributor, is expected to add our cryobag format for their BioLife offering this year. In our third revenue platform, storage and cold chain services, which includes evo Cold Chain rentals and SciSafe storage services, we gained 25 new customers in Q4, 14 for storage services and 11 for evo. Our SciSafe storage services platform continues to grow rapidly, and we remain very optimistic about our ability to profitably scale this platform to meet demand. Our opportunities list to potential new storage services customers is long and robust. With our evo Cold Chain management platform, cell and gene therapy companies now have full optionality to access our class-defining offering through our expanded specialty courier partner network that now includes World Courier, Quick International, Patheon, Thermo Fisher, Marken and Biocare. We expect to onboard another marquee courier partner for our evo network in the next few months. Total 2021 evo shipments were nearly 4,000 to more than 600 unique destinations. Shipment volume was up 81% over 2020. Another highlight for our evo platform is an ongoing evaluation and validation by a second global pharma company that, if successful, will support their adoption of the evo platform for shipping their two existing approved CAR T-cell therapies. This and the earlier approved customer we announced have traditionally been served solely by a legacy cold chain logistics services provider. As I mentioned before, we believe most CGT companies will move to validate and approve more than one shipping container and logistics partner over the next few years, and that our evo platform will emerge as a leading selection. We also recently deployed a new 4G cellular radio across our courier partners' fleets of evo shippers and can report very solid performance so far in supporting our couriers and end users in the transition from the sunsetting 3G cell towers to the new 4G system. We're also well engaged in our new product development roadmap for the evo platform and look forward to sharing details when we can. But I can say we're committed to defining the class through innovation, both internal and external. Now I'll turn the call over to Troy to present our financials for Q4 and the full year 2021. Troy?

Troy Wichterman, CFO

Thank you, Mike. I'll start off with a review of our financial results for Q4 and full year 2021 and then provide a summary of our 2022 revenue guidance. Revenue for the fourth quarter totaled $37.3 million, representing a 153% increase over 2020's fourth quarter revenue. Organic revenue increased 64% in Q4 2021 compared to Q4 2020. This was driven by biopreservation media revenue of $13.4 million, which was up 64% in Q4 2021 compared to 2020. COVID-19 related revenue accounted for approximately 15% of our total revenue in the fourth quarter. Cell processing platform revenue was $14.8 million, up 81% over the same period in 2020. Organic growth was 64%. Freezers and Thaw systems platform revenue was $16.6 million, up 285% over the same period in 2020. COVID-19 related revenue accounted for approximately 15% of the freezer and Thaw systems platform revenue. Organic growth was 13%. Storage and storage services platform revenue was $5.9 million, up 164% over the same period in 2020. COVID-19 related revenue accounted for approximately 50% of the storage and storage services platform revenue. Organic growth was 164%. Revenue for the full year ended December 31, 2021, totaled $119.2 million, representing a 148% increase over 2020. Organic revenue increased 37% in 2021 compared to 2020, driven by biopreservation media revenue of $43.1 million, which was up 39%. COVID-19-related revenue accounted for approximately 15% of total revenue for full year 2021. Cell processing platform revenue was $45 million, up 45% over 2020. Organic growth was 39%. Freezers and Thaw systems platform revenue was $56.6 million, up 318% over 2020. COVID-19-related revenue accounted for approximately 20% of the freezer and Thaw systems platform revenue. Organic growth was 30%. Storage and storage services platform revenue was $17.6 million, up 389% over 2020. COVID-19 related revenue accounted for approximately 40% of the storage and storage services platform revenue. Organic growth was 54%. Our adjusted gross margin for the fourth quarter of 2021 was 18% compared to 54% for the fourth quarter of 2020. For the full year of 2021, adjusted gross margin was 33% compared to 58% in 2020. In Q4, we had $6.5 million of unusual cost of sales charges related to the Stirling product line, primarily due to a change in warranty estimate in Q4 due to higher-than-expected warranty utilization in Q4. This resulted in a warranty expense that was $4.9 million above our expected Q4 expense. In addition, we had $1.3 million in charges related to abnormal scrap and purchase price variances and $300,000 in labor variances related to operational issues at Stirling. In addition, we experienced abnormal scrap in other product lines of approximately $700,000 and a channel mix impact to margin of approximately $750,000. Without these charges or impacts, our adjusted gross margin for Q4 would have been approximately 39%. We believe we will see a positive impact on margin throughout 2022 due to an increase in average selling prices, leveraging operational overhead, a decrease in warranty expense for ULT freezers and realizing the benefits of our vendor efforts. Adjusted operating expenses for Q4 of 2021 totaled $20.1 million compared with $8.2 million in Q4 of 2020. For the full year 2021, adjusted operating expenses totaled $59.6 million compared with $27.6 million in 2020. Given the M&A activity, which makes it difficult to look at operating expenses on a year-over-year basis, I'd like to note our 2021 budgeted operating expenses came within 5% of our plan on a same-store basis, which excludes the Stirling and Sexton acquisitions. The increase in operating expenses was primarily driven by the absorption of operating costs related to our SciSafe, Stirling and Sexton acquisitions. In addition, operating expenses increased due to the opening of three biorepository facilities throughout the year, increased accounting costs associated with large accelerated filer status as well as headcount and stock-based compensation expense necessary to support our overall growth objectives. Our adjusted operating loss for the fourth quarter of 2021 was $13.2 million compared with an operating loss of $255,000 in Q4 2020. Our adjusted operating loss for the full year 2021 totaled $20.7 million, compared to adjusted operating income of $293,000 in 2020. Adjusted EBITDA for the fourth quarter of 2021 was negative $5.5 million which does not back out the $8.1 million of the unusual costs and margin impacts mentioned earlier compared with positive $2.5 million in the fourth quarter of 2020. For the full year 2021, adjusted EBITDA was negative $1.1 million compared with positive $8.3 million in the same period in 2020. Our cash balance at December 31, 2021, was $69.9 million compared to $90.5 million at December 31, 2020. Taking into consideration our adjusted EBITDA of negative $1.1 million, cash use in 2021 was primarily related to paying off $4.2 million of acquired debt in the Stirling acquisition; $14.6 million to purchase equipment, including $9.2 million to build out biorepository facilities and an increase of working capital of $5.1 million. Now, I'll review the 2022 revenue guidance issued today in our press release. Total revenue for 2022 is expected to be in the range of $159.5 million to $171 million, reflecting year-over-year revenue growth of 34% to 44% and organic growth of 28% to 39%. Cell processing platform revenue is expected to be between $64 million and $67.5 million accounting for approximately 40% of total revenue. Freezers and Thaw system revenue is expected to be between $74 million and $77.5 million, accounting for approximately 45% of total revenue. Storage and storage services revenue is expected to be between $21.5 million and $26 million, accounting for approximately 15% of total revenue. While we don't give guidance below the revenue line, we expect positive full-year 2022 adjusted EBITDA. Finally, in terms of our new share count, as of today, we have 42.3 million shares issued and outstanding and 44.5 million shares on a fully diluted basis. Now, I'll turn the call over to Rod.

Rod de Greef, President & COO

Thanks, Troy. Since the time of our last call in mid-November, I was in my current role for about one and a half weeks. And over the last 90 days, we've gained a much better understanding of the operational dynamics related to the Stirling product line. As we identified and drilled down on the most critical items, it's clear that the root cause of the operational issues is the increase in unit production, which exceeded 100% between 2020 and 2021. This rapid and unexpected growth exposed certain weaknesses in product design, manufacturing processes, supply chain and organization. As I mentioned on the last call, we believe the design and manufacturing issues impacting quality have largely been mitigated over the last 12 months through the implementation of a number of engineering improvements, significant changes to the manufacturing workflow on the factory floor, and the development of a more robust quality program. The incremental warranty accrual we took in Q4 reflects a change in estimate related to the scope and scale of the historical quality issues. And we believe that more recent production will not have the same warranty costs as evidenced by increased first pass yield metrics and lower 90-day field failure rates over the last several months. The doubling of units produced also exposed the weakness in our supply chain in two ways. First, many of our critical components were sole-sourced. Second, a number of those sole-source vendors simply could not scale fast enough with the level of quality we needed. We've largely completed the key vendor transition we spoke about on the last call, and we have re-engaged an original vendor to support our dual-source approach going forward. We have identified a number of other critical sole-sourced components and are in the process of securing and qualifying secondary sources for those items. While we're focused on the supply chain issues at Stirling, some of the other product lines are also being impacted by the general global supply chain constraints and the dual-source approach is being pursued across all product platforms as well. With respect to the operations organization at Stirling, we have made several key management changes to ensure that the right people are in the right positions, which was not necessarily the case previously. We've added another senior operations team member at the Athens facility and have also reorganized that supply chain team. We have consolidated the management of all critical vendor relationships company-wide, including those at Stirling under our VP of Manufacturing, who has been with the company since 2019, and who has been tasked with implementing the dual-source strategy as well as leveraging larger purchasing volumes to target cost savings. As I mentioned on the last call, the key operations objective for this year is to establish a revenue-generating service offering. And while our customer service team is primarily focused on supporting customer issues, we do have a pilot service offering being tested on two product lines. We'll speak to that opportunity in further detail on future calls. Finally, ERP implementation continues to progress largely according to plan. We expect to go live on the accounting modules of NetSuite on the non-freezer platforms by the end of this month, which is generally in alignment with the initial plan. We have reprioritized the freezer platform and the overall implementation schedule to better support those manufacturing operations sooner rather than later. At this point, we still see a full company-wide deployment by year-end or early Q1 of next year as an achievable target. Finally, I'll close by saying that while the gross margin impact of the one-time and transitory issues at Stirling last year has been disappointing, I believe we've identified the critical issues and have a plan in place to execute against it. We believe that absent these issues, the Stirling product line should have a normalized gross margin in the low to mid-30s, and with increasing volume and new product introduction, we expect that to move into the low to mid-40s by the end of next year. That said, we also expect gross margin improvement this year, particularly in the back half of the year, and I look forward to sharing that progress as we move throughout the year. Now I'll turn the call back over to Mike.

Mike Rice, Chairman & CEO

Thanks, Rod. I'd like to summarize two key takeaways from Q4 and the full year 2021. First, it's clear that demand for our bioproduction tools and services portfolio continues to grow as more CGT and biopharma companies realize the value our solutions can provide in reducing risk. We built a phenomenal customer base and can see great potential in cross-selling to capture revenue synergies. We have very high-trust, sticky customer relationships and are determined to provide stellar experiences with all of our products and services. Second, while performance at Stirling is clearly disappointing, our Stirling ULT freezer platform is differentiated. And I'm confident that our leadership team and rank-and-file team members will continue to resolve the issues to position our ULT freezer platform as truly class-defining. All of the other platforms of the business are performing well. Finally, I'm pleased to say that overall, product demand so far in Q1 is strong, and we're looking forward to sharing our results on our next earnings call. Now I'll turn the call back over to the operator to take your questions. Grace?

Operator, Operator

Now we'll open the call for questions. Our first question comes from Max Masucci.

Max Masucci, Analyst

Just maybe to start, I think it would be great to — if there's any way for us to frame expectations for the margins, whether it's in Q1 based on what you're seeing so far or even from a first half versus second half perspective. I think it would be great to hear how — if your visibility has changed into what those incremental warranty accrual estimate surcharges and write-offs could look like going forward compared to your visibility at the time of the Q3 call.

Troy Wichterman, CFO

Yes. Thanks for the question, Max. So we do not give margin guidance by quarter. However, what I can tell you for the full year of 2022, assuming our improvement initiatives are completed as we expect, overall gross margin should continue to improve throughout the year. We still believe we will obtain our three-year financial goal metric of 50% gross margins through the combination of supply chain improvements, leveraging product volumes, and new product introductions. So I think what you're going to see through 2022 is more of an improvement throughout the year versus a one-time improvement in Q1.

Rod de Greef, President & COO

And Max, it's Rod here. To add to that, I think that with respect to warranty, everything we know is out today. So we don't anticipate any sort of additional one-off or incremental warranty accruals at this point in time, and we're about halfway through the quarter. So nothing has changed from our perspective when we took a look at the Q4 numbers.

Max Masucci, Analyst

Okay. Got it. And you added a solid 159 new customers for Stirling in Q4. It would be great to hear, is there a backlog building in that segment of the freezer business? How does current manufacturing capacity for Stirling match up with your demand at this point? And how could that play out during the year?

Mike Rice, Chairman & CEO

Yes. Max, Mike here. There is a backlog building. We don't quantify it or report on it. But Rod, maybe you could just speak to capacity.

Rod de Greef, President & COO

Yes. I think the capacity is well there. I think the challenges that we've had, Max, over the last couple of quarters really have to do with supplier issues impacting factory flow production levels. That has gotten better, for sure, and Q4 was better than Q3. And so far in Q1, it's been better as well. But I would not say it's completely where it needs to be. But we're eating into the backlog, and our objective is to make sure that our lead times are no more than two weeks for any particular model that we have on the Stirling side.

Operator, Operator

Next up, we have Paul Knight from KeyBanc.

Paul Knight, Analyst

Could you — if you look at the contributors to the impact on EBITDA and specifically operating income, you mentioned SciSafe, Stirling, public costs, biostorage sites. Would it be fair to say the significant factor is Stirling in that operating income impact?

Troy Wichterman, CFO

Paul, it's Troy. Yes. I would say that's a fair statement.

Paul Knight, Analyst

Okay. And then where — you added three biostorage sites. Where are those being added?

Troy Wichterman, CFO

They're added in the Netherlands, Massachusetts and New Jersey.

Paul Knight, Analyst

And then lastly, it looks like your customer count went up a lot; 700 versus 218 in 2020. What are the factors behind that? Is it the direct sales force you've added via Stirling? Or what is it behind that large increase?

Mike Rice, Chairman & CEO

Paul, Mike here. Yes, you hit it on the head, for sure. Having the new integrated freezer sales team, which is comprised mostly of the folks that came over from Stirling, has been great. They and the other folks can now speak fluidly enough to identify opportunities across the platforms, particularly with large accounts where we already have relationships. So it's really a combination of their efforts, our marketing, and the uplift in awareness of the BioLife brand, particularly that these new companies are now part of BioLife. So as you can imagine, we're maximizing that and exploiting that in every way possible through social media and our direct marketing and what the sellers have in their arsenal as far as talking points. So all of the above.

Operator, Operator

Next up, we have Jacob Johnson from Stephens.

Jacob Johnson, Analyst

Maybe just following up on Max's questions about gross margins. Troy, I certainly appreciate the improving throughout 2022. But maybe just kind of as a starting point, you talked about 39% gross margins kind of excluding the one-time items. So if we use that as a starting point, are there any kind of these charges related to Stirling that we should assume continue into Q1 and then roll off and then you can maybe improve from that 39%? Just using that 39% as a bridge would be helpful as we think about 2022.

Rod de Greef, President & COO

Yes. Jacob, it's Rod here. I think that we are going to continue to have some not immaterial purchase price variances as we go through at least the first and second quarters, which is why I referenced the second half of the year versus the first half. So I know that's not giving you a specific number, but I do think that Stirling is going to be a drag for the first quarter here and then into the second quarter. I think at that point in time, a number of sources suggest that the supply chain will ease a bit. At that point in time also, we'll have the benefit of having a number of critical components with second sources so that we are not held hostage, so to speak, by one company who can feel like they can do what they want to do. So I think those things will all be in play by the second half of the year.

Troy Wichterman, CFO

And one thing to add there, too, Jacob. Mike mentioned, too, that we have a distributor that is increasing their par value, and that's going to continue into Q1 and Q2, which has a few percentage points impact on gross margin.

Jacob Johnson, Analyst

Okay. And then on the media side, I mean, a really strong Q4, really strong outlook into 2022. I guess two questions. One, can you just talk about the strength here between commercial customers, maybe clinical customers and then distributors? And then, Mike, I think you mentioned a large distributor building inventory. Can you just give us some more color around that dynamic? It sounds like it'll play out in Q1 and then maybe taper off after that.

Mike Rice, Chairman & CEO

Glad to, Jacob. So this distributor is one of the two that I cited that, in combination with the other one, found more than 4,200 homes for our media products. So they're just completely wired in. They've got dedicated marketing resources for the BioLife portfolio. We're in constant communication with them. It's also the distributor that I mentioned that is distributing the ThawSTAR vial thaw and soon to add the cryobag or the cryobag format. So they're just a fantastic partner. Now they do enjoy a pretty hefty discount. And so because their revenue is significant, to Troy's point, that does have a margin impact. But it's nothing we would ever try to engineer ourselves out of there. They're productive. They're finding many homes for the products, several of which are end users that will become clinical applications and eventually commercial customers. We know that based on communications to us where we can provide better scientific and regulatory support through Dr. Matthew and some other folks. So that's just a fantastic relationship. I think that the other distributor, while not as productive, is still doing a really good job but is more focused on the research use-only market. Now with respect to commercial applications, as I count up from industry data, we're in perhaps 10 of the roughly 23 applications that are listed in 2022 and 2023 for which regulatory filings or approvals will be made. So it's really strong. The inbound inquiries to use media continue at a very strong pace. Dr. Matthew and now Dr. Sean Werner from Sexton, who is also helping support customers on the clinical-regulatory scientific side, are really busy, to put it mildly. They're handling many customer inquiries. And I'll say with pride and kudos to what AB has been able to do here in the last year: he's supported our media use in applications outside the U.S., which has been quite complex to navigate, and he's done it masterfully, particularly where the initial inquiries from those customers and/or their in-country regulatory bodies ask for the formula. We don't provide the proprietary formula. The proprietary media is proprietary. Nobody knows the formula other than the appropriate regulatory bodies as required. AB has done a masterful job helping those customers adopt and us seeing the media being incorporated into approved products. So it's really phenomenal. That tide is lifting the media business for us, and we would expect that to continue over the next several years.

Jacob Johnson, Analyst

Got it. And then just two quick last questions. I appreciate the COVID disclosure around the storage business. But I think inevitably, we'll get questions around the duration of it. So I'll ask you how should we think about the durability of those revenues. And then another quick follow-up. I had a question around the 10-K being delayed. I figured I'd give you the forum to maybe comment on what's going on there.

Troy Wichterman, CFO

I'll start with the COVID question and duration there, Jacob. The duration depends on the facility and the customer we're serving. As you noticed in our guidance for the storage and storage services, which includes the SciSafe business, it's a wide range. Part of the reason is because there is a U.S. COVID contract that tails off in Q2. So if that customer renews their contract, that would be another tailwind of revenue for BioLife. So that's why you see the wider range in the storage and storage services business. Regarding the late filing, we do pride ourselves on filing on time and realize this is important. It's really just a simple fact that our auditors have not completed the audit report yet. This is primarily driven by the 2021 acquisitions. And now that BioLife is an accelerated filer, a large accelerated filer, this compressed the timeline by 30 days. So those are the primary reasons.

Operator, Operator

Next question comes from Thomas Flaten from Lake Street Capital.

Thomas Flaten, Analyst

Interesting to see the positive impact or the more positive impact that the distributors are having. As you guys build the business out with new product lines, how should we think about the impact that distributors will have maybe over the medium-term horizon? How do you guys think about integrating product lines into them? And will they become a lesser force in terms of revenue growth there? I'm just wondering if you guys could put some color around there.

Mike Rice, Chairman & CEO

Thomas, good question. I think the early evidence is, as I mentioned on the call, one of our largest media distributors is carrying ThawSTAR formats and will likely add the cryobag format this year. That will be very helpful. One of our other largest ULT freezer distributors is going to be adding the liquid nitrogen freezers as well. So we've got full leverage there to expand those relationships and to do it in a smart way where it makes sense, where we can reduce overlap and leverage the strengths of those particular groups. So more to come on that, for sure.

Thomas Flaten, Analyst

Great. And then you guys provided overall growth, organic growth and also COVID-related revenue. Can you just walk us through how those are related? What are the differences from overall to organic, given that most of your acquisitions have been on board for a while? I would have expected to see those align maybe a little bit more. Can you just walk us through how we should think about those numbers?

Troy Wichterman, CFO

Sure. Organic is a same-store comparable, meaning the business must have been owned by us for the full comparison period. SciSafe was acquired in Q4 of 2020, so they're a comparable for Q4 2021 but not a comparable for full year-over-year. The Stirling and Sexton acquisitions were acquired in 2021 and therefore do not factor into the organic growth that we're disclosing for full year comparisons.

Operator, Operator

Next up, we have Yuan Zhi from Riley Securities.

Yuan Zhi, Analyst

So I have two questions. The first is across the cell therapy supply chain, where do you guys see the market opportunities in 2022? For example, you guys have cell processing, freezers, storage and logistics. Just want to hear your thoughts and even beyond your product portfolios. Second, can you comment on what's your competitive edge on your evo system? Is it because of pricing, compatibility? And can you comment on which regions are those two customers testing to get evo online?

Mike Rice, Chairman & CEO

Yuan, great questions. We see tremendous lift and opportunities for us throughout the portions of the workflow where we participate, whether it's preservation media, storage, distribution, or cell processing. We fully intend to be a dominant supplier of products and services in those particular workflow segments. Storage is going to boom, media is going to boom, and cell processing with our Sexton team is doing very well. As for evo, I can give some detail. The evo platform is differentiated by a number of approved patented and patent-pending features that translate directly into benefits for customers, which are all about reducing risk. The number one differentiator is thermal hold time—the ability for the evo container to maintain interior payload temperature much longer than competing systems, particularly in dynamic environments, such as when a shipper is tipped on its side or even upside down. When that happens with liquid nitrogen shippers that vent, LN2 gas can escape and the internal payload cavity can warm. Temperature excursions are critical issues for cell and gene therapies because those products are highly sensitive and can lose viability with temperature cycling. The evo container helps protect payloads and maintain temperature, reducing the risk of delivering a nonviable dose. Also, our go-to-market strategy for evo is to supply the containers and provide deep technical and scientific support to our courier partners rather than transacting directly with every therapy company. This approach is working well. As I mentioned earlier, evo shipments were nearly 4,000 to more than 600 unique destinations, and evo is already deployed in various developed regions around the globe. The current approved CAR T-cell company using evo has deployed evo in Western European countries and in the U.S., and we would expect expansion as more clinical centers are trained. The second approved CAR T-cell therapy company I referenced has U.S. approvals and soon-to-be European activity. So adoption is global and continuing to grow. The evo cloud applications also have differentiated features that are meaningful for customers, though too detailed to go into here.

Yuan Zhi, Analyst

And maybe a quick follow-up: which region or continent has the evo system being tested—America, Europe, or Asia Pacific? Just want to hear your comments there.

Mike Rice, Chairman & CEO

The evo platform is currently in use in all developed continents. Of those nearly 4,000 shipments to roughly 600 unique destinations, those are distributed globally. The approved CAR T provider currently using evo has deployed evo in Western Europe and the U.S., and we expect use to increase as more clinical centers come online. The second approved CAR T therapy customer I mentioned is U.S.-based and active in Europe as well. So we see adoption across the globe continuing this year and beyond.

Operator, Operator

Next question comes from Jason McCarthy; on the line is Mike Okunewitch for Jason McCarthy from Maxim.

Mike Okunewitch, Analyst

I wanted to see if you had any data on the total number of new cell and gene therapy applications that entered clinical studies in 2021. My reason for asking is it looks like you had something like 63 new master file references over the past year. There has to be some significant percentage of the total number that are entering clinical studies. Could you give any additional color on that?

Mike Rice, Chairman & CEO

I can't cite the exact number from memory, but if you look at industry association data from recent state-of-the-industry presentations and compare year-to-year, you'll see the count is up materially. Our master files are one component of the increase because we also have outside-U.S. applications that don't use the U.S. master file mechanism. So our master file growth is an indicator, but it's not a complete view of all global clinical applications.

Mike Okunewitch, Analyst

One more on Stirling. How does the relationship look with a customer after a unit is placed? Are there any significant recurring revenues, or is that more of a one-time capital expense? And how often would customers replace one of those freezers?

Mike Rice, Chairman & CEO

Good questions. For the most part, once the freezer is bought it's largely a capital purchase and there isn't significant recurring revenue associated with the unit itself. That said, Rod is working on building a profitable service offering adjacent to product sales, and we see service as a meaningful opportunity. There are some accessory and consumable sales, but they are limited. Typical useful life for a freezer is in the range of roughly five to nine years, depending on use and maintenance.

Operator, Operator

Next question comes from Mike Ott from Oppenheimer.

Mike Ott, Analyst

Rod, curious if you can share any additional specifics around the Stirling issues. Beyond the scale-up in volumes and staffing issues you cited, was anything design-related or broadly manufacturing-related? And did you know of those issues at the time of acquisition?

Rod de Greef, President & COO

I think the issue of what we knew and didn't know is something we'll be careful about discussing publicly. But in terms of specifics, there are three broad categories. First, there were some design limitations, particularly around the engine manufacturing process, that had to be revamped substantially when going from a couple thousand freezers to nearly 8,000. Second, and probably the biggest impact on overall quality, was that a handful of critical vendors could not scale to meet the needed quality and volume. That created significant problems in the last half of the year. We're largely through that but not completely done. Third, we're now facing broader component availability issues common across many industries, which is why our second-source strategy is so important—not only geographically but also by leveraging other parts of our company or contract manufacturers to source compatible electronic components and boards. Consolidating procurement and leveraging internal capabilities has helped address these issues in real time.

Operator, Operator

I'm showing no further questions at this time. I would now like to turn the conference back to Mike Rice for closing remarks.

Mike Rice, Chairman & CEO

Thank you, Grace, and thanks again, everyone, for your interest in BioLife. 2022 will be another inflection year as we capture demand and realize the benefits of the quality and margin improvement initiatives currently underway. We remain confident in reaching our stated midterm financial goals. Thank you for your support of BioLife, and good evening.

Operator, Operator

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.