Avid Bioservices, Inc. (NASDAQ:CDMO) Q4 2020 Earnings Conference Call June 30, 2020 4:30 PM ET Company Participants Tim Brons - IR Richard Hancock - Interim President and CEO Daniel Hart - CFO Timothy Compton - Chief Commercial Officer Conference Call Participants Matt Hewitt - Craig-Hallum Capital Group Joe Pantginis - H.C. Wainwright Jacob Johnson - Stephens Operator Good day, ladies and gentlemen and welcome to the Avid Bioservices' Fourth Quarter and Year-End 2020 Financial Results Conference Call. At t ...

Part I [ITEM 1. BUSINESS](index=5&type=section&id=ITEM%201.%20BUSINESS) Avid Bioservices is a dedicated CDMO for biopharmaceutical drug substances, expanding capacity and market presence - Avid is a dedicated CDMO providing a comprehensive range of services from process development to CGMP clinical and commercial manufacturing for biopharmaceutical drug substances derived from mammalian cell culture[20](index=20&type=chunk) - In fiscal 2018, the company transitioned to a dedicated CDMO, changing its name to Avid Bioservices, Inc., selling its R&D technologies, and ceasing research and development activities[21](index=21&type=chunk) - The company's growth strategy includes investing in additional manufacturing capacity, expanding its customer base, and increasing operating profit margins[22](index=22&type=chunk) Customer Revenue Concentration | Fiscal Year | Revenue from Top 3 Customers | | :--- | :--- | | 2020 | 63% | | 2019 | 64% | | 2018 | 86% | Backlog Growth | Date | Backlog (approx.) | | :--- | :--- | | April 30, 2020 | $65 million | | April 30, 2019 | $46 million | [ITEM 1A. RISK FACTORS](index=10&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces risks from historical losses, customer concentration, operational complexities, and potential stock dilution - The company has a history of losses, incurring a net loss of **$10.5 million** in fiscal 2020 and having an accumulated deficit of **$571.1 million** as of April 30, 2020[64](index=64&type=chunk) - A significant portion of revenue comes from a limited number of customers, with the top three customers accounting for approximately **63%** of revenues in fiscal 2020[66](index=66&type=chunk) - The business is exposed to risks from global health epidemics, such as the COVID-19 pandemic, which could disrupt customer operations, supply chains, and clinical trials[61](index=61&type=chunk) - The company relies on third parties for most necessary raw materials, and an inability to obtain these supplies, particularly from single-source suppliers, could adversely impact operations[92](index=92&type=chunk)[93](index=93&type=chunk) - Ownership of common stock is subject to risks including dilution from the potential issuance of up to **6.8 million** shares upon conversion of Series E Preferred Stock and **6.9 million** shares under equity plans[117](index=117&type=chunk)[118](index=118&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=20&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments - Not applicable[131](index=131&type=chunk) [ITEM 2. PROPERTIES](index=20&type=section&id=ITEM%202.%20PROPERTIES) Avid leases 158,000 square feet of office and manufacturing space in Tustin, California - The company leases a total of approximately **158,000 square feet** of office, manufacturing, laboratory, and warehouse space in Tustin, California[132](index=132&type=chunk) - The leases are non-cancellable operating leases with termination dates in 2023 and 2027, all containing options to extend[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=20&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) No material legal proceedings are currently pending against the company - The company is not currently a party to any legal proceedings expected to have a material adverse effect on its financial condition or operations[136](index=136&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=20&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company has no mine safety disclosures - Not applicable[137](index=137&type=chunk) Part II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=21&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Common stock trades on NASDAQ with no dividends, while Series E Preferred Stock pays a 10.50% cumulative cash dividend - The company's common stock is listed on The NASDAQ Capital Market under the trading symbol **"CDMO"**[140](index=140&type=chunk) - No cash dividends have ever been declared or paid on common stock, and none are anticipated in the foreseeable future[142](index=142&type=chunk) - Holders of Series E Preferred Stock are entitled to cumulative cash dividends at **10.50%** per annum, with approximately **$4.3 million** paid each year in fiscal 2018-2020[143](index=143&type=chunk)[145](index=145&type=chunk) [ITEM 6. SELECTED FINANCIAL DATA](index=23&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section summarizes five years of financial data, including fiscal 2020 revenues of $59.7 million and a net loss of $10.5 million Selected Financial Data (in thousands) | Metric | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | Revenues | $59,702 | $53,603 | $53,621 | | (Loss) income from continuing operations | $(10,466) | $(5,056) | $(20,563) | | Net loss | $(10,466) | $(4,215) | $(21,813) | | Net loss attributable to common stockholders | $(15,152) | $(8,901) | $(26,499) | | Cash and cash equivalents | $36,262 | $32,351 | $42,265 | | Total assets | $107,620 | $78,395 | $95,760 | [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Fiscal 2020 revenues reached $59.7 million, up 11%, but gross profit declined to $3.9 million due to production issues Fiscal Year 2020 vs. 2019 Results (in millions) | Metric | FY 2020 | FY 2019 | Change | | :--- | :--- | :--- | :--- | | Revenues | $59.7 | $53.6 | +11% | | Gross Profit | $3.9 | $7.2 | -46% | | Gross Margin | 7% | 13% | -6 p.p. | | Operating Loss | $(10.9) | $(5.6) | +95% | - The increase in FY 2020 revenue was driven by an **$8.6 million** increase in manufacturing revenue, partially offset by a **$2.5 million** decrease in process development revenue[178](index=178&type=chunk) - The decrease in gross profit was primarily due to higher costs related to a production interruption, planned growth in payroll, and increased depreciation[179](index=179&type=chunk) - As of April 30, 2020, the company had **$36.3 million** in cash and cash equivalents and believes it has sufficient liquidity for at least the next 12 months[201](index=201&type=chunk)[202](index=202&type=chunk) - The company received a **$4.4 million** PPP loan in April 2020, which it subsequently repaid in full in May 2020[201](index=201&type=chunk)[213](index=213&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risk is credit exposure from cash at one bank, with no material interest rate impact expected - Cash and cash equivalents are primarily held in money market funds at one major commercial bank, creating credit risk as deposits exceed government insurance limits[223](index=223&type=chunk) - The company does not believe that changes in U.S. interest rates would materially affect its financial condition or results of operations[223](index=223&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=34&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for fiscal 2020 and the independent auditor's unqualified report [Report of Independent Registered Public Accounting Firm](index=35&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements and internal control over financial reporting - The auditor, Ernst & Young LLP, expressed an unqualified opinion on the consolidated financial statements for the three years ended April 30, 2020[228](index=228&type=chunk) - The auditor also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of April 30, 2020[229](index=229&type=chunk) [Consolidated Financial Statements](index=36&type=section&id=Consolidated%20Financial%20Statements) Fiscal 2020 statements show total assets of $107.6 million, liabilities of $65.7 million, and a net loss of $10.5 million Consolidated Balance Sheet Highlights (in thousands) | As of April 30, | 2020 | 2019 | | :--- | :--- | :--- | | Total Current Assets | $59,763 | $51,318 | | Total Assets | $107,620 | $78,395 | | Total Current Liabilities | $44,480 | $23,162 | | Total Liabilities | $65,724 | $25,327 | | Total Stockholders' Equity | $41,896 | $53,068 | Consolidated Statement of Operations Highlights (in thousands) | For Year Ended April 30, | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Revenues | $59,702 | $53,603 | $53,621 | | Gross Profit (Loss) | $3,932 | $7,224 | $(2,924) | | Operating Loss | $(10,940) | $(5,622) | $(20,638) | | Net Loss | $(10,466) | $(4,215) | $(21,813) | [Notes to Consolidated Financial Statements](index=40&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, customer concentration, lease obligations, the $4.4 million PPP loan, and significant NOL carryforwards - The company adopted new lease accounting standard ASC 842 on May 1, 2019, recognizing right-of-use assets of **$23.3 million** and lease liabilities of **$25.5 million**[291](index=291&type=chunk) Customers Accounting for ≥10% of Revenue | Customer | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | Halozyme Therapeutics, Inc. | 28% | 30% | 55% | | Gilead Sciences, Inc. | 24% | – | – | | Acumen Pharmaceuticals, Inc. | 11% | * | – | | IGM Biosciences, Inc. | 11% | * | – | | Coherus BioSciences, Inc. | 10% | 13% | 22% | | ADC Therapeutics America Inc. | * | 21% | * | - In April 2020, the company received a **$4.4 million** PPP loan, which it repaid in full in May 2020 after new SBA guidance created uncertainty about qualification[298](index=298&type=chunk)[299](index=299&type=chunk) - As of April 30, 2020, the company had federal and state net operating loss (NOL) carryforwards of approximately **$427 million** and **$277 million**, respectively[349](index=349&type=chunk) - The company sold its PS-targeting and r84 R&D assets in fiscal 2018 and 2019, respectively, and is eligible for future milestone payments and royalties[362](index=362&type=chunk)[364](index=364&type=chunk)[367](index=367&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES](index=64&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURES) The company reported no changes or disagreements with its accountants on financial matters - None[375](index=375&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=64&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management and auditors affirmed the effectiveness of the company's disclosure controls and internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of April 30, 2020[376](index=376&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of April 30, 2020, based on the COSO 2013 framework[380](index=380&type=chunk) - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of April 30, 2020[385](index=385&type=chunk) [ITEM 9B. OTHER INFORMATION](index=65&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reported no information for this item - None[392](index=392&type=chunk) Part III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=67&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2020 Definitive Proxy Statement[395](index=395&type=chunk)[396](index=396&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=67&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation information is incorporated by reference from the 2020 Definitive Proxy Statement - Information regarding executive compensation is incorporated by reference from the 2020 Definitive Proxy Statement[397](index=397&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=67&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details equity compensation plans, showing 3.2 million securities for issuance and 4.9 million shares available for future grants Equity Compensation Plan Information as of April 30, 2020 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Shares Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 3,193,204 | $6.17 | 3,738,015 | | Employee Stock Purchase Plan approved by stockholders | – | – | 1,148,735 | | Total | 3,203,034 | $6.20 | 4,886,750 | [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=69&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Related party transactions and director independence information is incorporated by reference from the 2020 Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2020 Definitive Proxy Statement[402](index=402&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](index=69&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Principal accounting fees and services information is incorporated by reference from the 2020 Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the 2020 Definitive Proxy Statement[403](index=403&type=chunk) Part IV [ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](index=70&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all documents filed as part of the Form 10-K, including financial statements and an exhibit index - This item contains the index to the Consolidated Financial Statements and lists all exhibits filed with the Form 10-K[406](index=406&type=chunk)[407](index=407&type=chunk) [ITEM 16. FORM 10-K SUMMARY](index=70&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company provided no summary for this item - None[408](index=408&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q3 2020 was $13.6 million, slightly lower than the anticipated figure but consistent with $13.8 million in Q3 2019, primarily due to production interruptions [8][11] - Gross margin decreased to 6% in Q3 2020 from 15% in the prior year, attributed to production interruptions and increased depreciation expenses [9] - Consolidated net loss attributable to common stockholders was $3.5 million or $0.06 per share, compared to a loss of $2.6 million or $0.05 per share in Q3 2019 [11] - For the first nine months of fiscal 2020, revenues increased by 29% to $47.2 million from $36.5 million in the prior year [13] - Cash and cash equivalents as of January 31, 2020, were $30.7 million, down from $32.4 million at the end of the previous fiscal year [16] Business Line Data and Key Metrics Changes - The backlog at the end of Q3 2020 was $58 million, a 12% increase from $52 million at the end of Q2 2020 and a 26% increase from $46 million at the end of the last fiscal year [12] - Total SG&A expenses for Q3 2020 were $3 million, down from $3.2 million in Q3 2019, primarily due to decreased accrued bonuses [10][14] Market Data and Key Metrics Changes - The company faced production challenges due to a specific piece of equipment, impacting revenues and profits for Q3 and expected to affect Q4 as well [4][5] - Despite the challenges, the company reported progress in operational projects and business development activities [5][6] Company Strategy and Development Direction - The company is focused on enhancing its project pipeline and backlog while addressing production challenges [4][5] - A new Chief Commercial Officer has been appointed to strengthen business development efforts and improve customer engagement [6][18] - Plans for facility expansion and upgrades are in place to support anticipated growth in fiscal 2021 and beyond [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth potential despite the operational setbacks in Q3 [26][29] - The company anticipates recovering lost revenue in fiscal 2021 and is taking steps to resolve production issues [28][29] - The health of the biologic CDMO industry is described as robust and growing, with strong client relationships [58] Other Important Information - The company is actively searching for a permanent CEO and hopes to fill the position within the next few months [25][57] - The company has launched a new website to enhance visibility and generate qualified sales leads [21] Q&A Session All Questions and Answers Question: Can you provide more details on the production issue? - The production issue is related to a specific piece of equipment, and the company is working closely with clients to resolve it, ensuring that no work has been canceled and will be made up once repairs are completed [32] Question: How is the company addressing the impact of the coronavirus? - The company has seen cancellations of planned conferences but maintains contact with clients and has not experienced significant disruptions in supply chain or client orders [35][37] Question: What is the anticipated timeline for recovering lost revenue? - The company expects to hit production runs early in the year and be through them by the first half of the next year [52] Question: How did the new customer come on board? - The new customer was in the queue prior to the new Chief Commercial Officer's arrival, and various avenues such as trade shows and the company's website contributed to landing the customer [56]

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value per share CDMO The NASDAQ Stock Market LLC 10.50% Series E Convertible Preferred Stock, $0.001 par value per share CDMOP The NASDAQ Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ...

Financial Data and Key Metrics Changes - Revenue for Q2 2020 was $18.3 million, an increase of 80% compared to $10.2 million in the same period last year, marking the highest revenue recorded in the last two years [11][7] - Gross margin for Q2 2020 was 18%, significantly up from 3% in the prior-year period, attributed to increased manufacturing runs [12] - Consolidated net loss attributable to common stockholders was $1.9 million or $0.03 per share, an improvement from a loss of $2.9 million or $0.05 per share in Q2 2019 [16] - Backlog at the end of Q2 2020 was $52 million, a decrease of 16% from $61 million at the end of Q1 2020 but an increase of 13% from $46 million at the end of the last fiscal year [17] Business Line Data and Key Metrics Changes - Total SG&A expenses for Q2 2020 were $3.5 million, up from $2.8 million in Q2 2019, primarily due to payroll-related expenses and stock-based compensation [13] - For the first six months of fiscal 2020, revenues were $33.6 million, a 47% increase compared to $22.8 million in the prior year [18] Market Data and Key Metrics Changes - The company continues to maintain a strong presence in the market, focusing on attracting new business and expanding work with current customers [8][25] - The company hosted several industry events to increase visibility and attract potential new clients [26] Company Strategy and Development Direction - The company is focused on enhancing its services and offerings to contribute to continued growth, including the launch of a new process development facility [41] - The company is preparing to expand its Myford facility as demand solidifies, with plans to utilize the available 42,000 square feet of space [53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving operational breakeven and sustainable profitability, with expectations for continued positive financial performance [24][50] - The company is actively engaged with clients regarding their future plans, indicating a positive outlook for commercial production [60] Other Important Information - The company reaffirmed its revenue guidance for fiscal 2020 of $64 million to $67 million, supported by a strong backlog and customer projections [23] - A new pharmaceutical grade water system is being installed to enhance manufacturing efficiencies [43] Q&A Session Summary Question: Regarding the new water system at Myford, how should costs be viewed going forward? - Management indicated that the water-for-injection system is an enhancement and the overall operational costs for such systems would be around $2 million to $3 million [52] Question: How does the company view the scope of work for opening new facilities? - Management stated that they are preparing contingency plans to build out the 42,000 square feet of space in Myford based on demand visibility [53] Question: How is the company prepared to handle volatility from major clients? - Management confirmed that there would be no negative impact from Halozyme's product discontinuation, as they remain focused on their ENHANZE platform [54] Question: Can you elaborate on the dynamics that led to the increase in revenue and the decrease in backlog? - Management explained that efficiencies allowed for the acceleration of manufacturing projects, leading to increased revenue despite the natural ebb and flow of backlog [57][58] Question: What is the expected impact of the new water treatment capabilities on gross margin? - Management noted that while the new system would not significantly boost gross margin, it would enhance overall productivity and efficiency [67] Question: Will the new process development lab contribute to business development efforts? - Management affirmed that the lab would allow for earlier stage projects and standalone process development, which typically has healthy margins [70]

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value per share CDMO The NASDAQ Stock Market LLC 10.50% Series E Convertible Preferred Stock, $0.001 par value per share CDMOP The NASDAQ Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2019 or o TRANSITIO ...

Financial Data and Key Metrics Changes - Revenue for Q1 2020 was $15.3 million, an increase of 21% compared to $12.6 million in the same period last year [8] - Gross margin decreased to 7% from 9% in the prior year, impacted by hiring, compensation realignment, and equipment repairs [9] - Consolidated net loss attributable to common stockholders was $4.6 million or $0.08 per share, compared to a loss of $3.4 million or $0.06 per share in Q1 2019 [12] - Backlog at the end of Q1 2020 was approximately $61 million, a 34% increase from $46 million at the end of fiscal 2019 [13] - Cash and cash equivalents as of July 31, 2019, were $28.9 million, down from $32.4 million at the end of the prior fiscal year [14] Business Line Data and Key Metrics Changes - Two new contract manufacturing service agreements were signed during the quarter, indicating robust business development activities [6][18] - Avid completed a process validation campaign for a scaled-up manufacturing process for an existing customer, marking a significant operational achievement [22] Market Data and Key Metrics Changes - The company participated in several industry events to enhance visibility and attract new customers, including BIO International and The Bioprocessing Summit [15] - Avid's strategy includes expanding relationships with existing customers, which is expected to lead to new project opportunities [20] Company Strategy and Development Direction - The company is focused on optimizing its facilities and processes to maintain its position as a leading Contract Development and Manufacturing Organization (CDMO) [25] - Plans for incremental capacity expansion are in place, particularly in the Myford facility, to enhance efficiency and meet growing demand [37] Management's Comments on Operating Environment and Future Outlook - Management expects expanding production demand to improve margins despite current challenges [10] - The company is committed to providing high-quality products and customer experiences to drive future growth [32] Other Important Information - Avid is in the process of searching for a new permanent CEO to guide future strategy and vision [29] - The company anticipates anomalies in revenue and margins during Q2 due to annual maintenance but does not expect this to impact overall revenue guidance for the year [28] Q&A Session Summary Question: Pricing environment with strong backlog - Management indicated that while they are not the lowest price provider, they are competitive due to their unique capabilities [36] Question: Capacity expansion plans - Management has tentative plans for building out the Myford facility and is in discussions with clients regarding timing and capabilities [37] Question: Backlog flow through revenue - Management explained that backlog can fluctuate based on new business signed and revenue recognized, and they reaffirmed their revenue guidance for the year [41][43] Question: Headcount expectations - Management stated that they do not expect significant increases in headcount, with additions primarily in revenue-producing positions [44] Question: Compensation structure and gross margin - Management clarified that the commentary on compensation relates to wage growth and aligning the compensation structure for the existing workforce [46]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2019 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ | --- | |---------------------------------------------------------------------------------------------------| | | | | | Commission file n ...

Avid Bioservices, Inc. (NASDAQ:CDMO) Q4 2019 Results Conference Call June 27, 2019 4:30 PM ET Company Participants Tim Brons - Investor Relations Rick Hancock - Interim President and CEO Dan Hart - Chief Financial Officer Tracy Kinjerski - Vice President of Business Operations Conference Call Participants Joe Pantginis - H.C. Wainwright Paul Knight - Janney Montgomery Steve Schwartz - First Analyst Operator Good day, ladies and gentlemen. And welcome to the Avid Bioservices' Fourth Quarter and Year-End 2019 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-32839 AVID BIOSERVICES, INC. (Exact name of Registrant as specified in its charter) Delaware ...