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IC

IMMUCELL CORP /DE/ (ICCC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 marked continued operational recovery: revenue $6.45M (+18% YoY), gross margin 44% (vs 22% YoY), and net income $0.50M (vs loss of $1.53M YoY); sequentially softer vs Q1’s seasonal high and pipeline-rebuild tailwind .
  • Management eliminated the order backlog by quarter-end and refilled distributor inventories, cautioning that the one-time pipeline replenishment may lead to softer sales in 2H 2025; focus shifts to winning back end customers and new business .
  • Re-Tain entered Investigational Product use in 2H 2025–Q1 2026 (no revenue expected); full commercial launch awaits FDA approval, validated aseptic fill, and adequate cash; product development spend is being reduced and strategic options explored .
  • Balance sheet improved: cash rose to ~$6.0M; debt was refinanced to reduce rates and eliminate a ~$2M 2026 balloon via a new 5-year note to 2030; working capital and equity increased .

What Went Well and What Went Wrong

What Went Well

  • Eliminated backlog and refilled distribution, enabling a pivot back to growth selling: “We effectively eliminated the backlog of orders as of June 30, 2025…We have re-filled distributors with the inventory that they would like to hold” .
  • Margin recovery: gross margin reached 44% in Q2 (vs 22% YoY), driving net income of ~$0.50M and Adjusted EBITDA of ~$1.36M .
  • First Defense momentum and new format traction: initial sales of the spray-dried format in Q2; sales force “energized” now that supply is ample .

What Went Wrong

  • Near-term revenue headwind: management warned that pipeline refill provided a temporary boost and sales may soften in 2H 2025 .
  • Re-Tain approval timing remains constrained by CMO FDA inspection observations; investigational use will not generate revenue, and existing Re-Tain inventory will be used (already expensed) .
  • Capacity expansion to ~$40M annual revenue remains on hold pending cash flow evaluation and demand visibility .

Financial Results

P&L and Profitability Trend

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$7.75M $8.07M $6.45M
Gross Margin ($USD)$2.83M $3.35M $2.82M
Gross Margin (%)37% 42% 44%
Net Income ($USD)$0.52M $1.45M $0.50M
Diluted EPS ($USD)$0.06 $0.16 $0.06
Adjusted EBITDA ($USD)$1.331M $2.305M $1.364M

Why the moves:

  • YoY strength driven by higher production output, improved yields, and pricing; sequential Q2 softer given seasonality and the non-repeatable distributor pipeline refill .

Balance Sheet Snapshot

MetricAs of Dec 31, 2024As of Mar 31, 2025As of Jun 30, 2025
Cash & Equivalents ($USD)$3.76M $4.60M $5.998M
Net Working Capital ($USD)$10.63M $12.05M $12.69M
Stockholders’ Equity ($USD)$27.52M $28.99M $29.87M
Total Assets ($USD)$45.10M $45.62M $46.72M

Operational KPIs

KPIQ4 2024Q1 2025Q2 2025
Backlog ($USD)$4.4M (12/31/24) $4.0M (3/31/25) < $0.1M (6/30/25)
Distribution shipping cadence——Back to shipping within one week of order receipt
First Defense mix (Tri‑Shield of sales)—70% (quarter), 64% (TTM) —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue cadence2H 2025N/ASoftening expected as pipeline rebuild is non-repeatable New caution
Gross Margin TargetOngoing45%+ target (reaffirmed) Q2 at 44%; continued work toward target Maintained target
Re-Tain2H 2025–Q1 2026Controlled launch pending FDA/CMO clearance Initiated Investigational Product use; no revenue expected; commercial launch requires FDA approval, validated aseptic fill, and adequate cash Shift to investigational, expense prudence, strategic options
Capacity expansion2025+Evaluating move from ~$30M to ~$40M output Project on hold; timing dependent on cash flow/demand Maintained hold
Debt/interest2026–2030~$2M balloon payment due in 2026 Refinanced to 5-year note through 2030; reduced interest; eliminated balloon Improved terms
Dividends—None disclosedNone disclosedNo change

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Supply chain/backlogRecovery started; backlog still elevated; contamination remediated Backlog eliminated; distributors refilled; shipping within one week Improving
Margins/yieldsGM 37% in Q4; target >40%; pricing + throughput/yield gains needed GM 44%; ongoing yield focus; target maintained Improving
SeasonalityQ1 is seasonal high; backlog mitigates seasonality Expect softer sales in 2H 2025 as refill fades Cautious
Re-Tain regulatoryNon-admin NADA filed Jan; CMO FDA observations pending Investigational use; CMO 483 remains final hurdle; no revenue; strategic options Mixed (progress in field data; approval risk persists)
Product innovationBulk/spray-dried format in development for calf ranches First Q2 sales of spray-dried; disclosure breakout likely in Q3 Building
FinancingATM used in 2024 to bolster cash Debt refinanced; eliminated 2026 balloon; lower rate Strengthened

Management Commentary

  • “We effectively eliminated the backlog of orders as of June 30, 2025…We have re-filled distributors…We are now building inventory to meet customer demand going into the peak selling season” — Michael Brigham, CEO .
  • “Gross margin…increased to 44%…This gross margin improvement helped us generate net income of approximately $502,000…” — Tim Fiori, CFO .
  • “We have initiated Investigational Product use [for Re‑Tain]…reducing product development expenses and exploring potential strategic options…” — Michael Brigham, CEO .
  • “We were able to reduce our interest rate and avoid large balloon payments…with a new five-year note payable through 2030.” — Tim Fiori, CFO .
  • “The sales team…is fired up…we are ready to ship every day going forward.” — Michael Brigham, CEO .

Q&A Highlights

  • Backlog dynamics and organic growth: backlog was ~$4.0M at 3/31/25 and worked down in Q2; management refrained from quantifying “organic” excluding refill effects .
  • Re-Tain regulatory path: ImmuCell’s facility passed inspection; CMO must resolve FDA 483s; timing remains uncertain and outside ICCC’s control .
  • Investigational use and inventory: all existing Re-Tain inventory will be used in investigational studies; already expensed, so no future P&L impact .
  • Strategic options: seeking a partner to provide financial and market-launch support for Re‑Tain; a distributor alone unlikely to fill that role .
  • Capacity expansion: evaluation to move from ~$30M to ~$40M remains on hold; decision depends on cash flow and demand trajectory .
  • New product format: first sales of spray-dried format occurred in Q2; likely to break out disclosure in Q3 as it becomes material .

Estimates Context

  • S&P Global consensus estimates for ICCC appear unavailable for Q2 2025 EPS and revenue; therefore, no Street beat/miss determination can be made. Values retrieved from S&P Global.*
  • Actuals used for comparison are sourced from company filings/press releases above; forward narrative relies on management commentary .

Key Takeaways for Investors

  • Backlog elimination and distributor refill signal supply normalization; expect near-term demand digestion as the one-time pipeline effect fades in 2H 2025 .
  • Margin trajectory is positive (44% in Q2 vs 22% YoY); management continues to target ≥45% via yield and throughput improvements plus pricing .
  • Re‑Tain remains a strategic optionality asset; investigational use provides field data, but revenue is unlikely until regulatory/CMO hurdles are cleared and launch conditions are met .
  • New spray‑dried First Defense format opened additional market niches (e.g., large calf ranches); early Q2 sales with potential disclosure breakout in Q3 .
  • Balance sheet resiliency improved: cash ~$6.0M; refinancing removed a 2026 balloon and reduced rate risk; no line-of-credit draw outstanding .
  • Capacity expansion beyond ~$30M output remains on hold; watch H2 sales cadence and margin sustainability before committing to ~$40M scaling .
  • With limited sell-side coverage and no Street consensus, trading may key off operational prints (gross margin, backlog normalization) and regulatory milestones on Re‑Tain .

*Values retrieved from S&P Global.