Release Date: December 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you quantify the impact of higher-cost inventory on gross margins for NHPs in the quarter? A: Bob Leisure, CEO: We estimate that our gross margins were about half of what we would normally achieve. It was crucial to move the higher-cost inventory to make room for new, lower-cost inventory due to space constraints.
Q: How does the outlook for the NHP business in 2025 compare to 2024? A: Bob Leisure, CEO: We have pre-sold more NHPs going into 2025 than we did for 2024, including to multiple new customers. Our colony management services have been growing at about 20-25% annually, providing recurring revenue. We expect a more consistent demand cycle in 2025.
Q: Do you still see the adjusted EBITDA margin target of 18-22% as achievable in the mid-term? A: Bob Leisure, CEO: Yes, we believe it's achievable, especially with improvements from site optimizations and cost reductions. However, reaching the higher end of that range would require some recovery in the industry.
Q: Should we expect growth in 2025 compared to 2024? A: Bob Leisure, CEO: Yes, we anticipate growth in 2025, particularly in the NHP business, diet bedding, enrichment, and potentially in discovery services as well.
Q: How are you handling pricing pressures in the market? A: Bob Leisure, CEO: Pricing has come down due to reduced NHP costs and some margin compression, particularly in the DSA business. We are focusing on maintaining strong customer relationships and service quality to retain and grow market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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