Avid Bioservices(US:CDMO)2019-09-06 01:23Financial 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]