Avid Bioservices(CDMO)2023-06-20 16:00Financial Performance - For fiscal year 2023, total revenues increased by $29.7 million, with manufacturing revenues up by $26.1 million and process development revenues up by $3.6 million compared to fiscal year 2022[303]. - Operating income decreased to $3.6 million in fiscal 2023, down from $15.4 million in fiscal 2022, primarily due to a $5.2 million decrease in gross profit and a $6.7 million increase in SG&A expenses[307]. - Income tax expense for fiscal 2023 was $1.4 million, compared to a benefit of $115.0 million in fiscal 2022, reflecting the first year of income tax expense[310]. - Other income (expense), net was $1.0 million for fiscal 2023, an increase of $1.1 million from an expense of $0.1 million in fiscal 2022, mainly due to increased interest income[309]. Expenses - Selling, general and administrative (SG&A) expenses rose to $27.9 million in fiscal 2023, an increase of 31% from $21.2 million in fiscal 2022[278]. - SG&A expenses as a percentage of revenues were 19% in fiscal 2023, compared to 18% in fiscal 2022[306]. - The company expects gross profit to be impacted in the near term due to increased fixed costs from recent hiring and facility expansions[277]. Cash Flow - Net cash used in operating activities for fiscal year 2023 was $(12.9) million, a decrease of $(22.4) million compared to $9.5 million in fiscal year 2022[322]. - Net cash used in investing activities was $(77.6) million, primarily for the acquisition of property and equipment related to the expansion of the Myford facility and the construction of the CGT Facility[323]. - Net cash provided by financing activities was $2.9 million, a decrease of $(296) thousand compared to $3.2 million in the previous year[322]. Assets and Liabilities - As of April 30, 2023, the company had cash and cash equivalents of $38.5 million, which is expected to be sufficient to fund operations for at least the next 12 months[290]. - The company is in compliance with its Credit Agreement's financial covenant, which requires maintenance of a minimum consolidated EBITDA of $15 million[296]. Facility and Capacity - The company completed facility expansions in April 2023, which are expected to increase total revenue-generating capacity to approximately $400 million annually[269]. Equity and Compensation - The company maintains equity compensation plans that allow for stock options and restricted stock units, with expenses recognized over the requisite service periods[319]. - The Convertible Notes have a fixed interest rate of 1.25% per annum, maturing on March 15, 2026, and are convertible into cash, shares, or a combination thereof[325]. Revenue Recognition - Cancellation or postponement fees from customer contracts are recognized as revenue upon the cancellation or postponement date, subject to variable consideration[317]. - The company allocates transaction prices for contracts with multiple performance obligations based on relative standalone selling prices[316].