Avid Bioservices(US:CDMO)2021-09-09 01:44Financial Data and Key Metrics Changes - Revenues for Q1 fiscal 2022 were $30.8 million, a 21% increase from $25.4 million in the prior year period, driven by growth in manufacturing runs and process development projects [10][6] - Gross margin improved to 37% from 34% in Q1 fiscal 2021, aided by higher revenues and a $3.3 million fee for unutilized reserved capacity [11][12] - Net income attributable to common stockholders was approximately $6.3 million or $0.10 per share, compared to $3.3 million or $0.06 per share in the prior year [15] - Adjusted EBITDA for the quarter was approximately $9.7 million, representing 32% of revenues [16] - Cash and cash equivalents as of July 31, 2021, were $159.7 million, down from $169.9 million at the end of the prior fiscal year [17] Business Line Data and Key Metrics Changes - The company signed new project orders totaling approximately $23 million during the first quarter, including commercial manufacturing of ZYNLONTA [24] - The backlog at quarter-end was approximately $110 million, with expectations to recognize most of it over the next 12 months [26] Market Data and Key Metrics Changes - The company is focused on expanding its client base and enhancing its manufacturing capacity to meet growing demand [33] - The company has not experienced pandemic-related supply chain delays but remains cautious about future uncertainties [20] Company Strategy and Development Direction - The company is on track with its expansion projects, with Phase 1 expected to be mechanically complete by January [29] - The company aims to achieve full-year revenue guidance of $115 million to $117 million, reflecting a year-over-year growth rate of approximately 20% to 22% [31] - The company is exploring both organic and inorganic growth opportunities while maintaining a focus on biologics [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue guidance despite annual shutdowns and emphasized the importance of capacity availability for onboarding new clients [28][31] - The company is well-capitalized with approximately $160 million in cash, supporting expansion and growth initiatives [32] Other Important Information - The company appointed Dr. Esther Alegria to its Board, bringing extensive biopharmaceutical experience [19] - The Chief Commercial Officer left the company, and the search for a replacement is ongoing [22][23] Q&A Session Summary Question: Updates on expansion and revenue ramp-up - Management indicated that projects are already being booked into the new expansion space, with potential to reach a $50 million run rate [36] Question: Revenue visibility from Halozyme - Management refrained from commenting on Halozyme's business but expressed a desire to see it grow while reducing its percentage of overall business [38][39] Question: Timing for CCO replacement - Management stated that while there is no urgent rush to fill the CCO position, they are looking for a suitable candidate [41][42] Question: Supply chain management strategies - Management highlighted proactive measures in pre-ordering materials and building strategic stock to mitigate supply chain risks [47][50] Question: Gross margin expectations - Management expects gross margins to stabilize around 30% as capacity is filled, with potential for higher margins as operations ramp up [53][54] Question: Backlog growth expectations - Management acknowledged the challenge of increasing backlog but expressed optimism based on current opportunities [56][57] Question: Technology and market share - Management emphasized the company's strong track record in biologics and the importance of speed to market as key factors driving competitive advantage [62]