Cryo-Cell International, Inc. (OTCBB:CCEL) (the "Company"), one of the world's largest and most established family cord blood banks, today announced results for the second quarter ended May 31, 2010. Consolidated revenues for the second quarter of fiscal 2010 were $4.3 million compared to $4.7 million for the second quarter of fiscal 2009. The revenues for the second quarter of fiscal 2010 consisted of $4.0 million in processing and storage revenue and $327,000 in licensee income compared to $4.2 million in processing and storage revenue and $483,000 in licensee income in the same period in fiscal 2009. Licensee income for the three months ended May 31, 2010 consisted entirely of $327,000 in royalty income earned on the processing and storage of cord blood stem cell specimens in geographic areas where the Company has license agreements. Licensee income for the 2009 period consisted of 408,000 in royalty income earned on the processing and storage of specimens in geographical areas where the Company has license agreements and $75,000 related to an installment payment of a non-refundable up-front license fee from the licensee of the Company's Célle program in India.
The Company reported net income in the second quarter of fiscal 2010 of $354,000, or $0.03 per basic common share, compared to net income of $769,000, or $0.07 per basic common share, in the second fiscal quarter of fiscal 2009. The decrease in net income for the three months ended May 31, 2010 principally resulted from a 9% decrease in revenue and a 3% increase in marketing, general and administrative expenses, which is partially offset by a 2% decrease in cost of sales. Although the Company experienced a 9% decrease in revenue, global affiliate revenue for specimens processed in the Company's facility in Florida increased 10%. The Company believes that certain economic trends in fiscal 2010 have continued to affect discretionary consumer spending such as the slow economic recovery and looming concerns about the prospect of a double-dip recession; high unemployment and decreased availability of consumer credit. These factors, coupled with the increasingly prevalent option of public cord blood banking, have contributed to the decrease of revenue and earnings during the second quarter of 2010.
During the second quarter, Cryo-Cell announced results of a study published in the cover article of Stem Cells and Development journal showing that stem cells harvested from menstrual blood may one day be a potential source for stem cell therapies in stroke and other central nervous system disorders. After injecting MenSCs into animals induced with simulated stroke, the data shows immediate behavioral recovery at an early period after transplantation; and those subjects who were exposed to MenSCs exhibited a significantly reduced death rate. Based on the continued success of MenSCs in the research setting, Cryo-Cell is actively expanding its portfolio of research collaborations with world renowned scientists committed to study this novel stem cell population for a broad range of regenerative therapeutic development. The Company believes that the emerging cellular therapeutics industry focused on the repair and regeneration of the human body to treat a broad range of diseases, in addition to the prospective development of cosmeceutical applications such as anti-aging therapies combined with the growing interest in development of personalized medicine, may potentially serve to drive exponential growth of the global stem cell industry in the coming years.
"We continue to be encouraged by Cryo-Cell's performance through the second quarter of fiscal 2010, which includes consecutive quarterly profitability and 10% revenue growth in Cryo-Cell's global affiliate processing revenue for specimens processed in the Company's facility in Florida," stated Mercedes A. Walton, Chairman and CEO. "Cryo-Cell's cord blood banking business is solid and continues to generate strong recurring revenues; global revenue growth and positive cash flow from operations." Walton continued, "Moving forward, we continue to believe that Cryo-Cell's highly differentiated growth strategy may possibly be significantly fueled by the Company's proprietary Célle menstrual stem cell (MenSC) technology and the potential revenues that may possibly be generated from Célle processing and storage services combined with potential revenues from future possible therapeutic development that may utilize Célle technology. With continuing profitability in Cryo-Cell's core business and revenue growth in the Company's global affiliate network, combined with the vast potential upside associated with the Company's expansive Célle technology portfolio, we believe that Cryo-Cell may be solidly well-positioned to continue to build shareholder value in both the coming periods and over the longer-term horizon."
As of May 31, 2010, the Company had $8.1 million in cash, cash equivalents, marketable securities and other investments. The Company had no long-term debt at the end of the quarter.
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