Good afternoon, and welcome to the Sidoti & Company August Investor Conference. The next company to present is Teknova. With us, we have their CFO, Matt Lowell. As always, this will be a 30-minute presentation. There should be some time at the end for questions, so if you do have a question, you can type it into the Q&A tab at the bottom of your screen. With that out of the way, Matt, it is all yours. Great. Thank you, Jim, and thank you to the rest of the Sidoti team for having us here today. We are enjoying meeting with folks, and please reach out afterwards if you did not get a chance to get on our schedule. Happy to talk about Teknova today. We are at an exciting point in our growth story and happy to share with you what that looks like and take your questions at the end. I will also be using some slides here, and I may move fast through a few of them given the time that we have, but they are provided here for conference attendees on the conference website or in the IR section of Teknova's website. A little bit about Teknova. We are a leading provider of critical reagents for the discovery, development, and commercialization of novel therapies and diagnostics. Reagents are liquids used in various lab workflows and bioprocessing workflows as well. We make a broad portfolio of products. Some would call this a picks and shovels type of business, and it is 100% consumable. We are excited to be where we are right now. We are 30 years in business. I will just mention that. It is a real milestone for the company. Five years as a public company, 30 years in business, and we are going strong. Just a little bit about that history. When we started in 1996, by a scientist from Genentech that left the company when he thought that he could do a better job of supplying these reagents to the company and to others in the industry. Started out with making catalog products, and selling those in a wide variety of formats. This business grew for a long time by word of mouth, largely, and now developed a strong brand for serving the research and discovery markets, and we have over 3,000 customers annually buying from us in this product category. Along the way, we added custom capabilities to our portfolio that was very much appreciated by the researchers, and those have helped shape the company that we are today, to the point that we also had companies coming to us, asking us to be able to serve them beyond discovery and into clinical phases. In 2018, we received our ISO 13485 certification, which allowed us to sell products under GMP grade, or Good Manufacturing Practices grade, quality standards to help support customers that were going through clinical trials and also eventually commercialization. This was an important milestone for the company, especially because it opened up a very significant and large addressable market, and one that we have been growing ever since. It also has a very attractive growth profile, especially as these novel therapies and diagnostics go through clinical trials and become commercialized products. In 2019, private equity firm Telegraph Hill Partners took majority control of the company and, in 2020, hired our CEO. He built out a leadership team that eventually took the company public in 2021. The purpose of that was to raise the capital to really develop the infrastructure to be able to serve this type of customer more effectively as they went through this process of clinical trials and getting towards commercialization. The idea was build it, and then build it so it could scale. That is what we have done. Those investments were made over the several years following the IPO, and we have been maintaining our expenses after making some cuts a few years back to keep this infrastructure in place as we start to grow again. That is what we have done since 2025. We had 7% revenue growth, and we just reported Q2 revenue growth of 18%. We had the largest revenue in the company's history in Q2 of $12.2 million, to the point where we raised guidance for the year from $42 million-$44 million to $45 million-$47 million, as you see on this slide, growing in that mid double digits teens growth rate. We are very excited about that and what the future holds as well. The other financial metrics have been improving alongside that, with less than $1 million in both adjusted EBITDA and free cash use in Q2. We also lowered our guidance for cash use in 2026 to less than $8 million from less than $10 million. Things are moving in the right direction. We expect to be adjusted EBITDA positive during 2027 between a revenue range of $52 million-$57 million annualized, or said differently, about $13 million-$14 million quarter in revenue, and cash flow positive shortly after that. We do have the capital that we need to execute on our organic strategy, and we are excited to be continuing down that path. So quick look at the type of products that we have. Agar plates, most people have probably seen those from their high school classes, and that is a base product for us, an entry product, often used in discovery work. We also support liquid microbial culture media and supplements. This is typically for cell growth, or also called upstream processes. Then we have a bunch of other products in this molecular biology reagents category that are used for various cell manipulations and is also referred to as downstream processing. These pictures here give you a flavor for what our products look like. Everything from, well, plated media, as you see there, but also broths in bags, in bottles, bioprocessing bags, as well as tubes, all types of formats, and that is one of our specialties. There are a couple of different ways to break down the revenue, and this one focuses on the end markets of our products, so you can see where the demand is coming from. Roughly half the business is from biopharma companies. That includes the contract manufacturing base that supports those companies, and this includes all types of products that we have. That is our largest single end market. 30% of our business is to life science tools and diagnostics companies. I think this is probably one of the more underappreciated aspects of our business. We have a very robust client base in this area, and there are some very interesting developments happening in that market right now that have seen that actually growing ahead of the biopharma at the moment. Although we expect that to change over future quarters, that is a very positive thing. Then there are 15% in other markets. Here you get a flavor for what those customers are, some examples of those, and the number of customers. We report revenues publicly in the following two categories: Lab Essentials and Clinical Solutions. The difference between those two is that Lab Essentials are a research-grade product, also called RUO, or research use only, and Clinical Solutions are called clinical grade, or GMP, good manufacturing practices. You can see in 2025, it was about 75% Lab Essentials and 20% Clinical Solutions. The thing to know here is that the majority of the revenue in the Lab Essentials in that research category is catalog products, and that is a very important foundation for us, and it is the reverse in the Clinical Solutions. It is mostly custom products when you have gotten to that phase. I will keep going here and talk a little bit about why we win. We get this question a lot, and what really makes us special is that we offer this broad range of catalog products with the ability to do customizations. We do that in smaller batch sizes, which is especially useful for certain applications, and fast turnaround times, which helps our customers accelerate their time to market. We do this all while being able to have research products to clinical products all within the same location and manufacturing environment. One of the things that is important to know is the differences to us in terms of customers who buy catalog-only products and those that also buy GMP products. You can see that the customers that buy GMP products buy 44 times as much as those that buy catalog-only. Even when you are just buying custom research products, that is still 25 times than just buying catalog. So, as customers move along this maturity with us from catalog customers into GMP, you can see the value from a revenue perspective grows considerably. Now, we are able to compete effectively against large companies in this space because we thrive in this smaller batch size world, which is, as I said, important for a number of different end customers, particularly those that are developing these emerging therapies and diagnostics where smaller batch sizes are what is needed. You do not need the large volumes of liquids for blockbuster types of drugs or diagnostics. So they are seeking those volumes, and we can provide them and do that profitably, whether they are big companies, it is not the type of business that they are typically interested in. Then there are the smaller companies that also can do smaller batches that we compete against, smaller than Teknova even, but they do not have the compliance and quality systems and the brand recognition that Teknova has when competing against those small companies. Another dimension that is important is this turnaround time. A lot of companies come to us because their current supplier is not able to deliver in time to their specifications, and that is one of the hallmarks of Teknova. You can see getting that product back to them in weeks from the time of order, compared to what is typical months amongst competitors in this market. Just a quick note, we did launch a new custom configurator that we announced in the last couple of weeks based upon an AI foundation here. This is a nice tool for customers to be able to move more quickly through the building a custom product phase, where we have kind of solved some bottlenecks and friction points with a very educated AI assistant based on Teknova's manufacturing experience over the last 30 years, and helps our customers get through that process faster and makes it easier for them to order custom from us. Very excited about what this can do. One thing I will just say about this business, having the catalog and custom business together is very important for our success and profitability. It allows us to kind of level load the demand through the factory. When we have a lot of custom orders come in, and those can be lumpy, we are able to route those into production and slow down the number of catalog work orders, which typically go into inventory and vice versa. If there is a slowdown in custom orders on that particular day, we can slot in some catalog products and build inventory, which has a long shelf life. It is a very nice combination. That also allows us to be able to do many batches per day. While we do not compete on the batch sizes of the large companies, because we do lots of small batches and have figured out a way to do that, which is very operationally complex, we can be competitive on costs and enjoy similar margins as an overall business as those kind of businesses once we are mature. That is not an easy thing to do. There is a lot that goes behind that. There is custom engineered equipment that is behind all this, IT systems being integrated, and custom applications on top of that. Supply chain nimbleness and making sure that we have raw materials on hand to be able to respond quickly to maintain those turnaround times, and all this know-how from having done this kind of business for many years. There are a couple things that are important to highlight, and I am going to go through these quickly, but we want to talk about this Clinical business and what it means for the future. The research business is a very strong foundation. It is not a slow grower or something that we are trying to milk as a business. We are investing there as well, and it is a very strong business for us. There's a lot of operating leverage going forward, which will drive profitability in the near term and attractive margins in the long term. Also there's some catalysts that are happening right now that we're very excited about. Just quickly, we have 60 customers as of the end of last year buying our clinical products. 50 of those are biopharma companies and the rest mostly diagnostic companies. You can see that that's grown considerably since we introduced this just before 2020. We've been growing those. It's a nice leading indicator for us. Of those 50 biopharma companies, they're supporting approximately 70 therapies in clinical trials. Meaning some customers have more than one in clinical right now. On the bottom, you can see where those stand as of the end of last year. Roughly five in later stage or phase II, phase III, 12 in phase I, and 55 or so in pre-clinical phase. Those are moving along each year and have grown since the previous year. Importantly, we're expecting our first commercial therapy to be supported by the end of next year, and that's an exciting development having started this business back in 2018. You can see on top, these are the typical spend for customers in each of these phases. I'll just highlight that the commercial customer is expected to spend roughly 30 times what they spent in phase I trial with us when they get there. There's also a multiplier effect for the other phases, and this provides a very significant compounding effect, all while keeping these customers as they go along. We have a 95% customer retention rate. I'll just say quickly that we do support diagnostics companies and life science tools companies with this Clinical Solutions product, and there's a lot of specialized services that we have for them, too, that are a little bit different than therapeutic, but just as important. On the research side, very diverse business. Again, the 3,000+ customers, the top five in this product category only represent 12% of our total revenue. You can have some views of the top customers specifically on the right-hand side and the type of businesses they're in, how long they've been with us, and what the growth rate has been. So a very attractive customer base here with not a lot of concentration. We also support this life sciences industry on the tools and diagnostic side, as I've mentioned before, in these various areas on the left, and we support the leading companies in each of those spaces, as well as many of the others in that space as well. These markets have been growing even more strongly than biopharma recently, with areas like liquid biopsy and sequencing being some notable ones. This business of research-grade products has been growing 11% since 2008. So over a very long time period, you can see relatively steady growth. It's a nice foundation for this business, even when adjusted for the pandemic, as you can see with the colors on this chart. From an operating leverage perspective, very important to highlight this, we have made these investments, which has made us fixed cost heavy as a percentage of our overall costs, and that is why we have the ability to drive significant margins as we move forward. Before I show you what that operating leverage looks like, I did just want to highlight that though the business has been flat through a very down market the last several years, we have significantly cut our costs to be able to get us on the verge of EBITDA profitability right now, as seen through this chart. Now the profitability should come quickly and we expect to be adjusted EBITDA positive by the end of 2027. Just quickly on gross margins with the 70% of revenue dropping through to the bottom line, that is because we have a high fixed cost base. We do not need to add much to that. Our variable costs are relatively small percentage of overall cost of goods, and therefore, as we grow revenue with the 70% type of drop through, we will see margins getting into the 50s at 2x, and then by 4x, we will be at the 65% or higher level. We have not a lot of capital to invest to be able to support that because we have capacity right now. We will need to add some personnel and perhaps some equipment along the way, but small investments relatively speaking. In terms of catalysts that are coming up, we started to see this market turning around with biopharma funding coming back towards the end of last year, and had also seen those life science tools and diagnostics markets recovering before that. We decided to invest another $2 million incrementally in our commercial capabilities in 2026, and this started at the beginning of the year. That is through field team additions, more brand awareness, going to additional trade shows and the like, and then launching some other new tools behind the scenes for lead generation and qualification that is already paying dividends. We are seeing good early metrics on these investments, and we will expect them to start impacting the business towards the end of this year or more likely into 2027. Those take some time to season, but we are very pleased about where those are headed. Also, biotech funding itself is a strong indicator for our business. We have typically seen a three to four quarter lag between when the funding goes up or down and how it impacts the purchases of custom products from biopharma customers, which is a significant part of our business. Now that biopharma funding has had three strong quarters, we also are expecting that to impact us as soon as the end of this year, more likely into 2027. We will see, but that is certainly a positive development. The other lever that is, one out there is not something that we need to do, but we could do it if we find the right opportunity, and it is something that we are spending some time looking at, is the possibility of making some acquisitions, some bolt-on type of acquisitions. You can see some of the categories that we are considering here. These would typically be in the $5 million-$25 million revenue range, bolt-on type of reagent type of companies that would utilize our infrastructure commercially, operationally or both. Also potential for geographic expansion if we are able to find the right target that does not push out our time to cash flow positive. That is quickly on it. I will just finish on this slide. We have got a great team. We have been working together for almost five years and a lot of experience working together, each with our own expertise and coming from different companies. It has been my pleasure to work with this group, and we are very excited about the future. I will stop on that one, Jim, and take questions if there are any. Thank you. Yes, there are, Matt. Thanks for presenting. A couple questions related to AI, so we will start with those. Could you talk about the reaction to Build-Tek and the future opportunities for AI? Yeah. We had very positive feedback to Build-Tek so far. Admittedly, it just launched officially two weeks ago. It was in beta testing prior to that, but that gave us the push to get this out the door, and of course, we will make continued improvements to it. We are finding that the AI tool has allowed us to do things we would not have been able to do before because we could not afford the investment or did not have the time, and it saved us on both. This is one example of that, and we are looking at other things internally where we can use AI to help with our own operational efficiency and effectiveness with our customers. But the early feedback, again, is positive. We are adding new things, and we expect it to make it a more, let us just say, customer-friendly process when you are looking for a custom product and skipping some of the back and forth that has slowed things down in the past. We are excited about it. Do you think your customers are using AI in the drug discovery process? Do you have any sense on what percentage of orders today are for the small volume orders to customers that are using AI for drug development? Yeah. We do believe our customers are using AI. It's hard to know specifically sometimes, but we have had conversations with customers about that. We do believe that the use of AI is going to be a positive for us. Nothing that we're quantifying or saying is going to be a huge impact necessarily, but we do think that the drug companies or our customers who can do things faster will make them do more of the work because they can do it faster. So we would expect a light tailwind, I guess, from that. Though we have no specific alliances or anything at this point, we do recognize that some of the work is headed in that direction. So we do believe it's an overall positive for us and the industry, generally speaking. You mentioned the biopharma funding is starting to improve, and that's been an overhang for you the past six, eight quarters. Now that that's finally starting to turn around, how long do you think it is before you start to see the tailwind from that? Right. Yeah. It's hard to pinpoint it exactly, but as I showed in the one chart, we've often seen about a three to four quarter shadow from when that funding comes in, and we'll start to see some impact from customers that have received funding. Of course, the funding isn't even across the industry. That's one thing too. We do have some customers that have been getting funded, and we've seen them obviously progressing very nicely through trials. There are others that are still fighting their way through, and some of the earlier stage stuff is still a little bit softer than the later stage. That's a clear trend as well. In general, as I mentioned, we would see a three to four quarter lag, which would suggest that maybe in the fourth quarter this year or into the beginning of next year, we would start to see some impact from that. As we have said in our earnings call, we have not really factored that into the guidance that we have and see that as a potential upside for this year, but that it may not be until 2027. That is why we did not factor it in. At the beginning of the year, you did make the investment to expand your commercial capabilities. Any sense on how that is paying off? Do you think you would continue to invest to expand that next year? Yeah. That is a great question. We do track a lot of different metrics related to our commercial efforts thanks to the systems that we have in place, number of leads coming in, qualifying leads and conversion from marketing qualified to sales qualified, and number of meetings that we are getting, and various other things that tell us how the activity level is going and the quality of leads that we are getting, and all those are pointing in the positive direction. There are some that are not as good, of course. I am not saying everything is perfect, but we are trying to figure out how to tweak the formula, if we can make things better by making adjustments. I think it is possible that we could increase the investment into the future. I do not think it will affect 2026 if we choose to do so. We will be making a more careful analysis and decisions later this year, probably as we are doing our 2027 budget, to see what the impact is at that point, a couple of months from now, and if we think we are ready to make that change and where we would make the change. We may only make it in certain areas and not others. Even if we do, Jim, I would say it is not going to be a massive number. We just do not need that much to effectively serve our target customer base, so it could be another $1 million or something like that maybe. We will have to see. It is not going to be suddenly we are going to spend $5 million doing this. It is money well spent that is driving leads that have a very significant lifetime value with these customers. I think we're in good shape, but we need to wait and see a little bit more before we make any decision on it. The business now is primarily in the U.S., right? Are there any plans to expand outside the U.S.? That's right. We've historically been domestic-focused. Our revenue has been roughly 95% in the U.S. for a long period of time. We do have some customers that find us from overseas, and we're happy to serve them, but we haven't made any effort to cultivate those customers and enter those markets. It is a costly and a time-taking endeavor. We're more likely to enter another geographic market through an acquisition. That would be the most likely case, and we're just being selective in how we do that and when we do that. But we have certainly plenty of opportunities here in the U.S., in the markets that we have, that can sustain us for a long time, so we're not going to bite off more than we can chew. But that is, nevertheless, still an attractive growth vector that we haven't tapped yet. The cash burn rate has steadily declined. I think last quarter was particularly- That's right. ...good in return of that. You think you hit cash flow neutral sometime next year? Yeah. I think by the end of the year. What we've given the most clarity around is adjusted EBITDA positive, and that would happen between $52 million and $57 million in annualized revenue. Or in other words, a $13 million or $14 million quarter. We just did $12 million this last quarter, so we're getting close there. I think it'll be 2027 before we hit that type of number. Cash flow positive, I think, will follow shortly thereafter. It's not a big leap from EBITDA positive to cash flow positive. But I'm guessing by the end of 2027-ish that'll occur. In the meantime, our cash use is rapidly going down, and we do believe we have that capital on hand to execute this organic strategy. So we're feeling pretty good right now. Final one from me, or final one from the audience, actually. Your share price has just done really well this year. It's up over 200%. What do you think is the reason for that, and do you think those factors continue? Yeah. I think it is a little bit of a guessing game, so we don't really have that answer. I would say, first of all, we were trading at a pretty depressed level for some time there earlier in the year. The whole sector was down quite a bit, so there was a bit of coming back from having gone down a bit. I do think that there is excitement about the Teknova story and that we're close to this inflection point where we have these Clinical customers that are moving towards that commercial stage and later stage, which is, as I've pointed out, is a catalyst. Of course, the market backdrop itself with biotech funding having been strong for the last three quarters and continuing as far as we can tell. The fact that we made this call to invest in the commercial side, which we have confidence will pay off, but having not paid off yet. The fact that we've not included that in our 2026 guidance, even though we just beat and raised this last quarter. So we see there could be upside. We're not ready to call it at this point. But I think there's a number of catalysts building and with the overall market sentiment improving too, I think that's helped. I know you made some major investments to build the factory and expand capacity. Are you at a point now where if demand does increase, that you have the capacity to fill it? Absolutely. We're very excited to be using some of the capacity we've built, where we believe we've got $200 million in revenue capacity through our current operational footprint. So at $40 million last year and $46 million at the midpoint this year, you can see we've got a long way to go before we need any facilities type investments. Of course, there'll be other smaller things along the way to get there. But yeah, that's the name of the game, is bring in the new business. If we can do it through acquisition, and bring some products into our factory that way, or just growing with these customers as their volume grows. We've got plenty of room here to do the work. So we're excited, and I think customers are too when they come by and they see that. That's another selling point for them, is like, "These guys can handle this." I think it's a positive for everyone. Great. We are at time, so I just want to say thank you again, Matt. I know you spent a lot of time today seeing folks for us and- Yeah. ...taking time to do the presentation. We appreciate it, and we hope to hear from you very soon to get an update on what's going on at Teknova. Great. Thank you, Jim, and thanks everyone for attending. Appreciate it. Thank you. Take care.