Avid Bioservices(US:CDMO)2023-09-08 02:03Financial Data and Key Metrics Changes - Revenues for Q1 fiscal 2024 were $37.7 million, a 3% increase from $36.7 million in the prior year [4] - The net loss for Q1 was approximately $2.1 million or $0.03 per share, compared to net income of $1.6 million or $0.03 per share in Q1 fiscal 2023 [5] - Adjusted EBITDA for Q1 was $2.8 million, with cash and cash equivalents at $24.9 million, down from $38.5 million on April 30, 2023 [5] Business Line Data and Key Metrics Changes - Bookings for the quarter were $36 million, with a backlog of $189 million, representing a 20% increase from $157 million at the end of Q1 fiscal 2023 [6] - Gross profit for Q1 was $4.1 million, with an 11% gross margin, down from $9.1 million and a 25% gross margin in the same period last year [55] Market Data and Key Metrics Changes - The company is experiencing increased interest in later-stage and commercial projects, which are generally larger and take longer to complete [57] - The new capabilities and capacities are expected to attract customers seeking clinical manufacturing and support through the approval process [60] Company Strategy and Development Direction - The company aims to establish a larger, more diversified, and predictable revenue base [7] - Avid is on track to launch its GMP manufacturing suites by the end of Q3 2023, with a potential total revenue-generating capacity of $400 million annually [9][61] - The strategy focuses on building capabilities for clients throughout the entire product lifecycle, which is already yielding results with multiple clients utilizing new capacities [38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the financing environment, noting an uptick in interest and engagement from clients [67] - The company anticipates that the recognition of backlog will extend beyond one year due to the focus on later-stage projects [57] - Management acknowledged that expansion-related costs will continue to impact near-term margins but expect improved gross margins as capacity utilization increases [33] Other Important Information - The company has made substantial progress in recent years, marking its 30th year in business [25] - The operational build-out of the cell and gene therapy facility is progressing, with expectations to bring it online by the end of Q3 2023 [61] Q&A Session Summary Question: What is the expected revenue contribution from the new cell and gene therapy facility? - Management indicated that revenue recognition from the new facility is expected within the fiscal year, but it is too early to provide specific guidance [13][65] Question: How should the market expect the cadence of growth throughout the year? - Management noted that typical seasonal shutdowns could lead to a 15% drop from Q1 to Q2, but they expect to ramp back up towards the end of the year [45] Question: What is the impact of the current financing environment on new business? - Management reported that while the environment remains challenging, there are signs of improvement, and they are actively engaging with clients to prepare for a potential recovery [66][67]