Good day and welcome to the Cryoport Fiscal Second Quarter 2016 Financial Results Conference. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Garth Russell with KCSA Strategic Communications. Please go ahead, sir.

Thank you, operator. Good morning everyone and thank you for joining Cryoport's fiscal second quarter conference call. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate to occur in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experiences and our present expectations or projections. These risks and uncertainties include but are not limited to those described in Item 1A risk factors and elsewhere in our annual report on Form 10-K and those described from time to time in other reports which we file with the Securities and Exchange Commission. Now, I'd like to turn over the call over to Mr. Jerry Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Garth. Good morning, ladies and gentlemen. Thank you for joining us today. Joining me on this morning's call is our, Chief Financial Officer, Robert Stefanovich, who will present our financials later in this call. Over these recent past, month and quarters, we have seen the hard work of our growing sales team and newly appointed marketing team begin to transform prospects into an impressive pipeline of client relationships. We of course have outstanding cooperation and support from our strategic partners DHL, FedEx and UPS, who are doing a lot of work laying the groundwork for the future. The escalating market demand for our solutions is clearly reflected in our financials for the quarter, as we are reporting a 74% increase in revenue year-over-year to $1.4 million for the quarter ended September 30. This extraordinary growth was partially driven by 75% increase in revenue from the reproductive medicine segment as well as new client engagements. It is also wroth mentioning that a couple of headwinds for the second quarter. First, while we are reporting a strong financial performance, year-over-year, the second quarter presents certain seasonality challenges. Secondly, a number of our clients are data driven for clinical trial purposes. And in this particular quarter some of our forecast orders slowed up than scheduled considering these factors, we are even more pleased with our growth metrics for the quarter. However, the real excitement for Cryoport in a nutshell, it is not limited to our current growth rate because the significant embedded growth in our markets and our expanding client base. As the world leader of advanced biogenic logistic solutions for life sciences industry. We have approximately 550 clients to engage our solutions today. Even more noteworthy is the fact that more than 160 of these clients joined us within the…

Thank you, Jerry. Good morning, everyone. I'll run through our quarterly and six month financial results then turn the call back over to Jerry. As a reminder our fiscal year ends March 31, 2016, so we are reporting for our second fiscal quarter and first six months of our fiscal quarter 2016. Our net revenues for the six month period ended September 30, 2015 were $2.9 million an increase of 62.8% or $1.1 million as compared to $1.8 million reported for the same period last year. As Jerry mentioned, we added a significant number of customers and generated revenue in all of our target life sciences market such as biotech and diagnostic companies, pharmaceutical companies, central labs, contract research organizations, reproductive medicine markets and research institutions. Revenues in the reproductive medicine market increased by 70.9% over the prior year $0.7 million for the six months ended September 30, 2015 driven by continued success of our target sales and marketing campaign and an increased awareness of our cryogenic logistics solutions in this market. Our revenues from the animal health market were $0.5 million for the six months ended September 30, 2015 representing a 4.8 seasonal decrease for the same period in the prior year. With the increase in our customer base, customer concentration was further reduced and only one of our customers in animal health accounted for approximately 16% of total revenues during the three month ended September 30, 2015 compared to 27.4% in the same period of 2014. Gross margin for the period was 32.2%, $4.9 million as compared to 32% or $0.6 million compared to the same period last year. Our gross margin target continues to be 60%, which can be expected as we reach cash flow breakeven. Note that our cost of revenue are merely comprised of freight…

Thank you, Robert. So in conclusion, it is our view that we are now in a position to make real progress in scaling on sales and marketing efforts, which is of course crucial to the scaling of our business. Our progress is being built on our growing reputation in the life sciences industry and our solid performance in ensuring the shipments are delivered on-time and without compromise. In other words the market is recognizing that we are uniquely the solution for cryogenic logistics requirement of today's life sciences industry. We believe that Cryoport is on the right pathway at the right time. We have a clear vision and the management is working hard to execute at all level and as a result and based on what we know at this point in time, we are confirming our revenue guidance for fiscal year 2016 of $10 million to $12 million in revenue. Thank you for joining the call this morning and for your support and for your interest. At this time, I would like to ask Garth to open the call for questions. Garth?

[Operator Instructions] And we'll take our first question from Brian Marckx with Zacks Investment Research.

Good morning, guys, and congratulation on the continued great progress. Jerry, if I could on the revenue guidance that was reiterated. The earnings release says its based on client business that you have visibility on. I was wondering if you could provide a little bit more clarity on exactly what that means?

Well, Brian, I can't go into specific clients, but what I can tell you is this. The way we go about looking at our forecast is, as we look at the current base and we predict on that current base and that's based on not just looking at the numbers but conversations with clients and their plans. And the second part of that is prediction and that's based on the new clients that we -- we have no historic base, but we do have conversations and we are basing our forecast on those conversations. And based on everything that we see at this particular time, we are in a position to reconfirm that guidance.

Okay. So it sounds like that does not include any potential future conversations with potential future clients that may come in between now and the end of the year. So essentially, it doesn't include anything that you may talk to a client that you haven't talked to yet, correct?

No. It does not Brian. And look this is a forecast that you can have surprises both way, you can have upside surprises then you have downside surprises. So but at this point, we feel confident enough to give you -- to give the market or to give the folks on this call, our shareholder base, they got it.

Okay. Yes. Fair enough.

But it does not include anyone we have not talked, no.

Okay, great. And it sounds like in Q2, some of the -- I guess assumed revenue that was going to come in Q2 may have slept until Q3, so the current quarter, so we -- I know you're not going to give me guidance for Q3, but it sounds like just based on those comments that Q3 should see a pretty nice up tick from Q2, is that fair?

That's fair, Brian. We think so.

Okay. On the Q1 call, Jerry, you mentioned that you had a client that had a pipeline product that was in, I think Phase 3 and you expected that may launch in 2016, and that -- if that happens that would most likely support the commercialization. So is that client still in Phase 3 assuming -- essentially is the clinical trial still successful, whereas we could assume that may still launch in 2016?

Yes. It's not our fiscal year 2016, it's the calendar year 2016 and that could be 2016, it could be early 2017 but as I mentioned earlier, we are in conversation with three client, that particular client is still in trial in Phase 3, things are going along well. So it will be either calendar 2016 or early 2017, and then, we have two others that we are in recession with. As you may know, I mean, and I was trying to allude to this during the -- my presentation; it does take time for all of these various stages to take place. And so because logistics is now so important to these immunotherapies, the planning starts -- starts early. At the CAR-T cell conference for example, we saw at the strategic level cryogenic logistic mentioned more than I have ever seen it mentioned before because of its importance in getting product to the patient with efficacy. So, yes, we are in discussion not only with that client with two others as well for commercialization.

Great. Can you talk about the status of the current the sales force -- the size of the current sales force? And is there any plans to expand that over the next say 12-month?

Yes. We are continuing to expand our sales force. We have three or four open requisitions right now. We have -- the two folks on the West Coast and Northwest and the Southwest, we have a person in the Southeast and we have a person in the Northeast and we have an opening in two territories, in the Midwest and Mid-Atlantic. And we have an opening in Europe. And we have two openings in IVF in the United States and we actually need to open up an IVF office in Europe shortly. So we got a number of open requisitions and it depends on how you look at it for outside versus inside sales. But we absolutely will continue to expand our sales force and our sales effort.

Okay. Last one on animal health, it sounds like revenue from that is relatively insignificant today, is there an opportunity do you believe to increase the presence in the animal health and the increase of the related revenue, I guess?

Animal health will be one of our -- it will be a very significant segment for us. It's not that its insignificant, it's just that -- it let us all into that category and they had some adjustments built in their company and in their processing. We have a pipeline that is definitely targeted to the animal health area. We can play a significant role there. That's an important area for us for sure.

All right. All right, great. Thanks Jerry.

That does conclude today's question-and-answer portion, as well as today's conference. We thank you for your participation. You may now disconnect.