Increasing customer & laboratory numbers, growing pipeline, North American team expansion and quarterly sales and cash flow progression.
Record of interview:
openbriefing.com
The
MD
The growth in customers, laboratories serviced, orders received, and our expanding pipeline of opportunities is pleasing. As we grow the sales force, we expect to see the pipeline to keep growing and an acceleration in the conversion of the pipeline.
This customer base underpins our long-term, recurring revenues. Just to remind you, our business model is to install our Bluechiip Enabled Readers and Software solutions into customers sites and to see repeat sales of Bluechiip Enabled consumables to those customers. So, while we build our customer base the revenue numbers and cash receipts will be lumpy, however over time the revenue stream will become more consistent as it is increasingly driven by re-orders of consumables from our installed customer base.
Looking at the timing of the conversion of orders into cash, the typical cycle from pipeline lead to quote to receiving an order is 3 - 6 months, and the subsequent conversion from a sales order into cash is typically 60 - 90 days. Our current order book is consistent with this, primarily reflecting orders that are due for delivery in the next two to three months.
In terms of what our new orders look like, we are seeing two main types. The first is up-front orders that enable the customer to start operating with our Bluechiip Advanced Sample Management Solutions. These orders include equipment and installation, being our readers and our software, plus the initial orders of consumables, being Bluechiip Enabled cryolabels and cryovials. The second type of orders that we are now seeing is customers' ongoing and even forward-ordering consumables that we will deliver over time.
openbriefing.com
Looking at the pipeline, how does it compare to 3 - 6 months ago in terms of size and breakdown, including new customers and reorders?
MD
The pipeline is dramatically larger than 6 to 12 months ago, and that's come from building up the US sales team, attending more trade shows, and building presence in the market. This includes some reference sites which we can utilise to help us build that pipeline.
Our limiting factor for sales growth currently is that we do not have enough sales and implementation staff. Hence, we are expanding our
In the presentation that we released to the ASX last week, we highlighted that we have around a dozen quotes in the marketplace. That is dramatically higher than just 6 to 12 months ago and, as discussed earlier, the typical conversion time from a quote ranges from 3 - 6 months. We are working hard to shorten that cycle time.
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Can you walk us through the growth in your North American sales and implementation team, the opportunity they are addressing and how quickly you expect to see this reflected in pipeline conversion into sales?
MD
Currently, we have four people on the ground in
That small team has delivered strong growth in customers and sales. As we build the team out to 10, we expect to see an acceleration of the pipeline growth and subsequent conversion into sales.
Underpinning our confidence around near-term conversion is that we already have a solid pipeline for the new sales people to execute on, including a dozen quotes. We also expect our sales and implementation teams to become more efficient over time, with an upskilling timeframe of 3 - 6 months, which should see pipeline growth and conversion remain strong.
Looking at the make-up of the team, it comprises both sales people that directly target new customers, "landing" new accounts and laboratories, and
Importantly, we also now have reference sites, such as the
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Looking at BCT's recurring revenue base, you now have 25 labs as customers, almost double the 13 you had in
MD
Several labs have already re-ordered, some multiple times. A good example is a big pharma company, which we can't name, which is ordering
We are also seeing some customers re-ordering every 2 - 3 months.
The reorder cycle will become smoother and more predicable as customers get their
openbriefing.com
Where in terms of market segment and geography did the 92% increase in customer labs come from?
MD
In terms of geography, the focus is
We recently announced the partnership and order with
In terms of market verticals, we have a good toehold in the cell therapy market, with a number of customers. We are also seeing customers in the CRO, or Clinical Research Organizations, that are providing cell manufacturing capabilities and clinical trials. And there are pharma companies both as existing customers (one very large one) and in our pipeline.
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Andrew, during the quarter you also released a major update to the software that is an integral part of the
MD
We are continually building our customer offering, which also helps us to maintain momentum in uniquely meeting the needs of our customers.
This software update includes features that drive further productivity and quality improvements and is based on direct customer feedback. It is called the Bluechiip Stream Sample Manager '23 Platform.
Bluechiip Stream(TM) Sample Manager '23 Platform is an advancement of our underlying software platform. Stream(TM) Sample Manger operates across our Bluecube server and is accessible on both PC's and hand held devices, such as iPads, and it is also embedded within our readers to provide a seamless solution to our customers to identify their valuable samples, tracked using
The features include: optimised capacity and sample inventory management; increased reporting; Intuitive user interfaces; streamlined sample generation; integrated label generation; and integrated temperature reporting for complete temperature traceability. Some of these features are offered in modules that we package and sell as additional optional features.
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The FujiFilm Irvine Scientific licence and development agreement was executed in
MD
The FujiFilm Irvine Scientific project is progressing well. We are working closely with FujiFilm Irvine Scientific towards a product that is customized and branded for
We expect this project to convert to a supply agreement as the project progresses.
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Net cash burn for the quarter was
MD
Cash inflow for the quarter was a mixture of cash from customers, a drawdown on an R&D tax advance facility where we have a
An average quarterly net cash burn of around
As the customer base grows and those customers make repeat orders, be it monthly, quarterly etc, and we convert these laboratory customers to a consistent flow of orders, then we expect to see the cash burn decline and turn positive.
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Cash at the end of the quarter was
MD
In terms of the R&D tax refund we don't expect any receipts from that in the June quarter. We do expect that to come through in Q1 or Q2 of FY24. In terms of the Supply Chain Resilience Grant, we do expect some cash inflow in this quarter and of course we are seeing rising cash receipts from customers including some very recent deliveries which will be reflected in the June quarter numbers.
About
Contact:
Corporate enquiries
Managing Director - CEO
Ph: +61-457-823-470
andrew.mclellan@bluechiip.com
Media
Ph: +61-3-9915-6341
Oxygen Financial PR
richard@oxygenpr.com.au
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