Avid Bioservices(CDMO) - 2021 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements for the quarter ended July 31, 2020, covering balance sheets, operations, and cash flows - Avid Bioservices operates as a CDMO specializing in biopharmaceutical drug substances from mammalian cell culture[17] Condensed Consolidated Balance Sheets (in thousands) | Assets & Liabilities | July 31, 2020 | April 30, 2020 | | :--- | :--- | :--- | | Total Current Assets | $57,018 | $59,763 | | Total Assets | $105,561 | $107,620 | | Total Current Liabilities | $38,111 | $44,480 | | Total Liabilities | $59,022 | $65,724 | | Total Stockholders' Equity | $46,539 | $41,896 | | Total Liabilities and Stockholders' Equity | $105,561 | $107,620 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended July 31, 2020 | Three Months Ended July 31, 2019 | | :--- | :--- | :--- | | Revenues | $25,392 | $15,254 | | Gross Profit | $8,544 | $1,086 | | Operating Income (Loss) | $4,719 | $(3,373) | | Net Income (Loss) | $4,730 | $(3,164) | | Net Income (Loss) Attributable to Common Stockholders | $3,288 | $(4,606) | | Basic EPS | $0.06 | $(0.08) | | Diluted EPS | $0.06 | $(0.08) | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended July 31, 2020 | Three Months Ended July 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,273) | $(2,468) | | Net cash used in investing activities | $(489) | $(38) | | Net cash used in financing activities | $(5,289) | $(901) | | Net decrease in cash, cash equivalents and restricted cash | $(8,051) | $(3,407) | | Cash, cash equivalents and restricted cash, end of period | $28,561 | $30,094 | Revenue by Stream (in thousands) | Revenue Stream | Three Months Ended July 31, 2020 | Three Months Ended July 31, 2019 | | :--- | :--- | :--- | | Manufacturing revenues | $24,063 | $12,908 | | Process development revenues | $1,329 | $2,346 | | Total revenues | $25,392 | $15,254 | - The company received a $4.4 million PPP loan in April 2020, fully repaid in May 2020 following new SBA guidance[48][49] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 FY2021 financial performance, emphasizing a 66% revenue increase, return to profitability, and operational achievements - Key strategic objectives include investing in manufacturing capacity, broadening market awareness, expanding the customer base, and increasing operating profit margins[77] - First quarter highlights include a 66% revenue increase to $25.4 million, net income of $3.3 million, new CEO appointment, three new customers, and validated equipment remediation[79] Results of Operations Comparison (in thousands) | Metric | Three Months Ended July 31, 2020 | Three Months Ended July 31, 2019 | Change ($) | | :--- | :--- | :--- | :--- | | Revenues | $25,392 | $15,254 | $10,138 | | Gross Profit | $8,544 | $1,086 | $7,458 | | Operating Income (Loss) | $4,719 | $(3,373) | $8,092 | | Net Income (Loss) | $4,730 | $(3,164) | $7,894 | - Revenue increased by $10.1 million (66%), primarily from an $11.1 million rise in manufacturing revenues, including $3.1 million for unused capacity and $4.3 million from postponed runs[89][91] - Gross margin significantly improved to 34% from 7%, driven by higher revenues and $3.1 million in unused capacity fees[92] - SG&A expenses decreased by $0.6 million (14%) to $3.8 million, mainly due to a $0.8 million reduction in separation-related expenses[93] - Backlog was approximately $60 million as of July 31, 2020, down from $65 million as of April 30, 2020, with most expected to be recognized within 12 months[112] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes occurred in the company's market risks during the three months ended July 31, 2020, compared to prior disclosures - No material changes in market risks occurred during the quarter ended July 31, 2020[113] Item 4. Controls And Procedures Management concluded disclosure controls and procedures were effective as of July 31, 2020, with no significant changes in internal control over financial reporting - Disclosure controls and procedures were deemed effective as of July 31, 2020, by principal officers[116] - No significant changes in internal control over financial reporting occurred during the quarter ended July 31, 2020[117] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to materially impact its financial condition or operations - The company is not party to any legal proceedings expected to materially affect its financial condition or operations[120] Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported in this period - No material changes to risk factors were reported compared to the prior Annual Report on Form 10-K[121] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the CEO's employment agreement, officer certifications, and XBRL data files - Exhibits include the CEO's employment agreement, officer certifications, and XBRL data files[122]