Avid Bioservices(US:CDMO)2020-09-01 23:53Financial Data and Key Metrics Changes - Revenues for Q1 fiscal 2021 were $25.4 million, a 66% increase compared to $15.3 million in Q1 fiscal 2020, driven by increased manufacturing runs and fees from a customer [14][20] - Gross margin for Q1 fiscal 2021 was 34%, significantly up from 7% in Q1 fiscal 2020, attributed to increased manufacturing revenue and customer fees [15] - Consolidated net income for Q1 fiscal 2021 was $3.3 million, or $0.06 per share, compared to a net loss of $4.6 million, or $0.08 per share, in Q1 fiscal 2020 [17] - Cash and cash equivalents decreased to $28.2 million from $36.3 million due to loan repayments and changes in operating assets [19] Business Line Data and Key Metrics Changes - The company added three new customers during the quarter, contributing to a total of $20 million in new business [22] - The backlog at the end of Q1 fiscal 2021 was $60 million, down from $65 million at the end of fiscal 2020, but consistent when accounting for deferred batches [18] Market Data and Key Metrics Changes - The company is well-positioned to benefit from industry trends in biologics, which are growing faster than other sectors [7][8] - Despite the pandemic, there has been no interruption in operations or production programs, and employee health remains a priority [30] Company Strategy and Development Direction - The company is focused on expanding capacity to meet growing customer demand, with potential revenue capacity increasing from $100 million to $200 million with facility expansions [47] - Management is reviewing design plans for expansion, which typically takes up to 24 months to complete [33] - The company is exploring opportunities for both internal improvements and external service enhancements [50] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about continued revenue growth but cautions against using Q1 revenues as a new benchmark due to one-time factors [20] - The company expects to recognize the majority of its backlog in fiscal year 2021 [18] - There is a commitment to maintaining operational safety and productivity during the pandemic [30] Other Important Information - The company has entered into co-marketing agreements with Aragen Biosciences and Argonaut Manufacturing Services to enhance service offerings [26][27] - The management team is open to new ideas and strategies for future growth [50] Q&A Session Summary Question: Regarding the three new customer wins and pipeline opportunities - The new customers were acquired through typical business development activities, and the pipeline continues to grow with various opportunities [37][38] Question: Thoughts on gross margin for the remainder of the year - Gross margin is expected to track with revenue growth, with a target range of 20% to 24% in future quarters [39][40] Question: Capacity expansion and meeting projected demand - Current installed capacity can support over $100 million in revenue, with potential expansion to double that capacity [47][48] Question: High-level thoughts on Avid's strategy going forward - The management is in the process of developing a strategy and sees plenty of opportunities for growth [49][50] Question: Reason for not raising guidance despite strong Q1 performance - Guidance was reiterated due to uncertainties related to the pandemic and the seasonal maintenance shutdown in Q2 [51]