ImmuCell Q2 Earnings Call Highlights
Key Points
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- Strong domestic growth drove results: Second-quarter product sales rose 11.5% year over year to $7.2 million, while net income increased to $1.8 million from $500,000. Domestic sales grew 27.7%, offsetting a 38.9% decline in international sales.
- First Defense continued gaining market share: First-half Tri-Shield sales grew 25.1%, while distributor volumes increased 24%. First Defense’s share of U.S. animals treated with biological scours preventatives rose to about 19% by June, from 15% in December 2025.
- Capacity expansion is planned through 2027: ImmuCell expects to invest approximately $8 million in freeze-drying and liquids-processing upgrades that should more than triple manufacturing capacity and reduce processing times. Near-term margins were pressured by lower production output, scrap costs and recurring expenses tied to the discontinued Re-Tain program.
ImmuCell (NASDAQ:ICCC) reported higher second-quarter sales and earnings as domestic demand for its calf scours prevention products increased, while the company outlined plans to invest about $8 million to more than triple manufacturing capacity by the end of 2027.
Product sales rose 11.5% year over year to $7.2 million in the second quarter of 2026. For the first six months of the year, product sales increased 20.9% to $17.5 million, according to Chief Financial Officer Timothy C. Fiori.
The company recorded second-quarter net income of $1.8 million, or $0.20 per share, compared with net income of $500,000, or $0.06 per share, a year earlier. Results included a previously announced $2 million settlement with ImmuCell’s former Re-Tain contract manufacturer. First-half net income totaled $3.8 million, compared with $1.9 million in the prior-year period.
Domestic Growth Offsets International Decline
Domestic second-quarter sales increased 27.7% to $6.2 million, while international sales declined 38.9% to about $1 million. Fiori said the international decrease was primarily attributable to sales in Canada, where prior-year results benefited from orders associated with clearing a backorder situation.
President and CEO Olivier te Boekhorst said the company’s strategic focus since late 2025 has been on its First Defense calf scours preventative portfolio. Tri-Shield, the company’s flagship product, posted 25.1% growth during the first half of 2026, he said.
The company’s Functional Feed line contributed approximately 20% of overall first-half growth. U.S. sales grew 32.5% in the first half compared with the same period in 2025.
ImmuCell said distributor out-the-door volumes, which it uses as an indicator of sales at the producer level, increased 21% in the first quarter and 28% in the second quarter, producing first-half volume growth of 24% year over year.
The company estimated that First Defense’s share of U.S. animals treated with a biological scours preventative increased from about 15% in December 2025 to about 19% at the end of June. Because First Defense is priced at roughly twice the level of competing products, ImmuCell said its share of producer spending increased from approximately 29% to 38% over that period.
Te Boekhorst attributed the gains in part to investments in the commercial team, including three new U.S. salespeople. He said the company sells through distribution partners while its commercial organization focuses on adding new producer customers.
Margins Affected by Production Changes and Re-Tain Costs
Gross margin was 33.9% of product sales in the second quarter, down from 43.7% a year earlier and 11.1 percentage points below the first quarter of 2026.
Fiori said the sequential decline reflected 7.5 percentage points from lower manufacturing output, 2.1 points from roughly $150,000 in scrap associated with a purchased material, and 1.9 points from a shift of costs formerly associated with the discontinued Re-Tain program into cost of goods sold.
The Re-Tain-related costs are recurring building-related expenses, including utilities, depreciation and maintenance, Fiori said during the question-and-answer session. While the dollar amount is relatively stable, its percentage impact can vary depending on revenue levels.
Te Boekhorst said production output averaged more than 450,000 units per month in the first quarter, a record level, before averaging about 350,000 units monthly in the second quarter. Much of the decrease occurred in June and was partly planned, he said, as the second quarter is seasonally the company’s lowest-revenue period and ImmuCell made process changes, maintenance investments and quality-related improvements intended to raise future yields.
Despite reduced production, the company met customer demand and increased finished-goods inventory during the quarter. Management said it remains focused on contamination risk, colostrum sourcing and yield improvements while pursuing its capacity expansion.
Capacity Expansion Planned Through 2027
ImmuCell recently announced a $3.5 million investment in freeze-drying capacity, expected to be completed in the first half of 2027. On the call, the company also announced plans to invest about $4.5 million in liquids processing capacity, with completion expected by the end of 2027.
The projects will use existing facilities and equipment associated with the former Re-Tain program. Management said the combined investment is designed to modernize manufacturing, reduce processing times from two to three months to less than one month, more than triple current capacity and improve long-term product costs.
The company has signed contracts with equipment suppliers and expects engineering and construction activities to begin shortly. ImmuCell intends to finance most of the expansion with cash on hand and cash from operations, with its credit line available as needed.
At June 30, ImmuCell had $8.9 million in cash, $9.1 million in inventory and $16.6 million in working capital, up from $13 million at the end of 2025. The $2 million legal settlement contributed to the increase in cash and working capital.
On Re-Tain, te Boekhorst said Michigan State University is conducting an investigational study of an additional potential use case for the product. He said the study is expected to conclude around late September or early October, after which the company expects to share the results and determine next steps.
About ImmuCell (NASDAQ:ICCC)
ImmuCell Corporation (NASDAQ: ICCC) is a biotechnology company that develops, manufactures, and markets immunological products and diagnostic assays designed to enhance animal health in dairy and beef cattle. Headquartered in Portland, Maine, the company focuses on supporting herd health management through its portfolio of passive immunology solutions and veterinary diagnostics.
The company's flagship offering, CalfGuard natural colostrum supplement, is formulated to promote the passive transfer of antibodies in newborn calves and reduce the incidence of neonatal diseases.
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