Avid Bioservices Reports Financial Results for Third Quarter Fiscal 2021 and Recent Developments
March 08 2021 - 4:05PM
Avid Bioservices, Inc. (NASDAQ:CDMO) (NASDAQ:CDMOP), a
dedicated biologics contract development and manufacturing
organization (CDMO) working to improve patient lives by providing
high quality development and manufacturing services to
biotechnology and pharmaceutical companies, today announced
financial results for the third quarter and first nine months of
fiscal 2021, ended January 31, 2021.
Highlights Since October 31,
2020
“The third quarter was exceptional on all
fronts,” stated Nicholas Green, president and chief executive
officer of Avid Bioservices. “Top line revenues were strong,
contributing to a significant improvement in margins and other key
financial metrics, and we continued to generate cash from
operations during the quarter.
“Avid’s business development team signed
$74 million in new business during the quarter, resulting in a
backlog of $120 million, the largest in our
history. As a result, we are raising our revenue
guidance for the second time in fiscal 2021 to between $88 million
and $91 million.
“Finally, to support this increase in demand, we
are currently executing a two-phased expansion plan of our Myford
facility that, when complete, is expected to provide a total
revenue capacity of up to $270 million annually. During the quarter
we also raised funds to support this expansion. The expansions
represent critical developments in the business as we continue to
provide capacity to onboard new clients as well as capacity to
accommodate the successful clinical development and commercial
growth of our existing clients. Furthermore, we look forward to
incorporating a higher level of automation and digitization into
the second phase as we add further focus on commercial
manufacture.
“The team’s strong performance across all areas
of the business is not only driving growth today, but also
establishing the foundation necessary for continued growth in the
future.“
Financial Highlights and
Guidance
- The company is increasing revenue
guidance for the full fiscal year 2021 from between $84
million and $88 million to between $88 million and $91
million.
- Revenues for the third quarter of
fiscal 2021 were $21.8 million, a 61% increase compared to revenues
of $13.6 million recorded during the third quarter of fiscal 2020.
For the first nine months of fiscal 2021, revenues were $68.3
million, a 45% increase as compared to revenues of $47.2 million in
the prior year period. The increases in revenue for both the third
quarter and first nine months of fiscal 2021 were primarily
attributable to the growth in the number and scope
of in-process and/or completed manufacturing runs, as well as
an increase in process development projects. Additionally, as
previously disclosed, prior year manufacturing revenue for the
third quarter and first nine months was impacted by a production
interruption.
- As of January 31,
2021, revenue backlog was $120 million, an increase of 78%
compared to $67 million at the end of the second quarter of fiscal
2021, and an increase of 85% compared to $65 million at the end of
the prior fiscal year. The company expects to recognize most of
this backlog by the end of the next fiscal year.
- Gross margin for the third quarter
of fiscal 2021 was 28%, a significant increase compared
to a gross margin of 6% for the third quarter of fiscal
2020. Gross margin for the first nine months of fiscal
2021 was 31%, a significant increase compared to 11% in the prior
year period. The increase in the third quarter and first nine
months of fiscal 2021 was primarily due to the growth in
manufacturing and process development revenues. Additionally, the
prior year period gross profit was impacted by certain costs
associated with the production interruption noted above, which
costs were not incurred during the current year period.
- Selling, general and administrative
expenses (“SG&A”) for the third quarter of fiscal 2021 were
$4.0 million, an increase compared to $3.0 million recorded for the
third quarter of fiscal 2020. For the first nine months of fiscal
2021, SG&A expenses were $12.0 million, an increase compared to
$11.0 million recorded for the prior year period. The increases
during both the third quarter and first nine months of 2021 were
due primarily to increases in payroll related costs, including
stock-based compensation.
- For the third quarter of fiscal
2021, the company recorded a consolidated net income attributable
to common stockholders of $0.8 million or $0.01 per basic and
diluted share, as compared to a consolidated net loss attributable
to common stockholders of $3.5 million or $0.06 per basic and
diluted share, for the third quarter of fiscal 2020. For the first
nine months of fiscal 2021, the company recorded a consolidated net
income attributable to common stockholders of $5.6 million or $0.10
per basic and diluted share, compared to a consolidated net loss
attributable to common stockholders of $9.3 million or $0.17 per
basic and diluted share, for fiscal 2020.
- Avid reported $70.9
million in cash and cash equivalents as of January 31,
2021. This balance includes approximately $32.1
million in net proceeds raised in the third quarter
follow-on underwritten equity offering. This balance
represents an increase of $35.2 million from the end of
the second quarter and an increase of
$34.6 million compared to $36.3 million as
of the end of the prior fiscal year. The company
also generated cash flows from operating activities of $5.2 million
during the third quarter and $13.3 million during the nine months
ended January 31, 2021.
More detailed financial information and analysis
may be found in Avid Bioservices’ Quarterly Report on Form 10-Q,
which will be filed with the Securities and Exchange
Commission today.
Recent Corporate
Developments
- Signed orders for $74 million
during the quarter with new and existing customers, driving Avid’s
backlog to an all-time high.
- Completed a follow-on underwritten
public offering resulting in net proceeds of approximately $32.1
million, after deducting underwriting discounts and commissions and
other offering related expenses. The
company intends to use the net proceeds from the offering for
the expansion of its manufacturing capabilities.
- Continued to advance the two-phased
expansion of the Myford facility. The first phase of our expansion
plan, which was initiated during the second quarter of fiscal 2021,
expands the production capacity of the company’s existing Myford
North facility by adding a second downstream processing suite. The
second phase, which was initiated during February, will further
expand capacity through the build out of a second manufacturing
train, including both upstream and downstream processing suites
within Myford South.The company estimates the first phase will take
approximately 12 to 15 months to complete at an estimated cost of
approximately $15 million and may increase the company’s annual
revenue generating capacity by up to $50 million, bringing the
combined annual revenue generating capacity of our Franklin and
Myford North facilities to up to $170 million. The company
estimates that the Myford South expansion will take approximately
18 to 24 months to complete at a cost of approximately $45 to $55
million and may increase the company’s annual revenue generating
capacity by an additional $100 million for a total revenue
generating capacity of up to $270 million annually.
Conference Call
Avid will host a conference call and webcast
this afternoon, March 8, 2021, at 4:30 PM EST (1:30
PM PST).
To listen to the conference call, please dial
(877) 312-5443 or (253) 237-1126 and request the Avid
Bioservices conference call. To listen to the live webcast, or
access the archived webcast, please
visit: https://ir.avidbio.com/investor-events.
About Avid
Bioservices, Inc.
Avid Bioservices is a dedicated contract
development and manufacturing organization (CDMO) focused on
development and CGMP manufacturing of biopharmaceutical drug
substances derived from mammalian cell culture. The company
provides a comprehensive range of process development, CGMP
clinical and commercial manufacturing services for the
biotechnology and biopharmaceutical industries. With 28 years of
experience producing monoclonal antibodies and recombinant
proteins, Avid's services include CGMP clinical and commercial drug
substance manufacturing, bulk packaging, release and stability
testing and regulatory submissions support. For early-stage
programs the company provides a variety of process development
activities, including upstream and downstream development and
optimization, analytical methods development, testing and
characterization. The scope of our services ranges from standalone
process development projects to full development and manufacturing
programs through
commercialization. www.avidbio.com
Forward-Looking Statements
Statements in this press release, which are not
purely historical, including statements regarding Avid
Bioservices' intentions, hopes, beliefs, expectations,
representations, projections, plans or predictions of the future,
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements involve risks and uncertainties including, but not
limited to, the risk that the ongoing COVID-19 pandemic will
adversely affect our or our customers’ business and operations, the
risk the company may experience delays in engaging new clients, the
risk that the company may not be successful in executing client
projects, the risk that the company may experience technical
difficulties in completing client projects due to unanticipated
equipment and/or manufacturing facility issues which could result
in projects being terminated or delay delivery of products to
customers, revenue recognition and receipt of payment or result in
the loss of the customer, the risk that one or more existing
customers terminates its contract prior to completion or reduces or
delays its demand for development or manufacturing services, the
risk that the company may need to raise additional capital to fund
its contemplated expansion plans, and the risk that the completion
of one or both phases the of the Myford expansion may be delayed.
may cost more than anticipated or may not increase revenue
generating capacity by the amounts contemplated. Our business could
be affected by a number of other factors, including the risk
factors listed from time to time in our reports filed with
the Securities and Exchange Commission including, but not
limited to, our annual report on Form 10-K for the fiscal year
ended April 30, 2020, as well as any updates to these risk
factors filed from time to time in our other filings with
the Securities and Exchange Commission. We caution investors
not to place undue reliance on the forward-looking statements
contained in this press release, and we disclaim any obligation,
and do not undertake, to update or revise any forward-looking
statements in this press release except as may be required by
law.
AVID BIOSERVICES, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)(Unaudited) (In thousands, except per share
information)
|
|
Three Months EndedJanuary
31, |
|
Nine Months Ended January
31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
21,806 |
|
|
$ |
13,585 |
|
|
$ |
68,262 |
|
|
$ |
47,152 |
|
Cost of revenues |
|
15,604 |
|
|
|
12,800 |
|
|
|
47,098 |
|
|
|
41,921 |
|
Gross profit |
|
6,202 |
|
|
|
785 |
|
|
|
21,164 |
|
|
|
5,231 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative |
|
4,018 |
|
|
|
2,996 |
|
|
|
12,009 |
|
|
|
10,989 |
|
Loss on lease termination |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
355 |
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
4,018 |
|
|
|
2,996 |
|
|
|
12,009 |
|
|
|
11,344 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
2,184 |
|
|
|
(2,211 |
) |
|
|
9,155 |
|
|
|
(6,113 |
) |
Interest and other income,
net |
|
23 |
|
|
|
107 |
|
|
|
66 |
|
|
|
415 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
2,207 |
|
|
$ |
(2,104 |
) |
|
$ |
9,221 |
|
|
$ |
(5,698 |
) |
|
|
|
|
|
|
|
|
Comprehensive income
(loss) |
$ |
2,207 |
|
|
$ |
(2,104 |
) |
|
$ |
9,221 |
|
|
$ |
(5,698 |
) |
|
|
|
|
|
|
|
|
Series E preferred stock
accumulated dividends |
|
(1,442 |
) |
|
|
(1,442 |
) |
|
|
(3,604 |
) |
|
|
(3,604 |
) |
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common stockholders |
$ |
765 |
|
|
$ |
(3,546 |
) |
|
$ |
5,617 |
|
|
$ |
(9,302 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to common stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
(0.06 |
) |
|
$ |
0.10 |
|
|
$ |
(0.17 |
) |
Diluted |
$ |
0.01 |
|
|
$ |
(0.06 |
) |
|
$ |
0.10 |
|
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
58,865 |
|
|
|
56,404 |
|
|
|
57,349 |
|
|
|
56,275 |
|
Diluted |
|
60,097 |
|
|
|
56,404 |
|
|
|
58,058 |
|
|
|
56,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVID BIOSERVICES,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED) (IN THOUSANDS, EXCEPT PAR VALUE)
|
|
January 31,2021 |
|
April 30,2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
70,894 |
|
|
$ |
36,262 |
|
Accounts receivable |
|
27,113 |
|
|
|
8,606 |
|
Contract assets |
|
5,545 |
|
|
|
3,300 |
|
Inventory |
|
11,946 |
|
|
|
10,883 |
|
Prepaid expenses |
|
813 |
|
|
|
712 |
|
Total current assets |
|
116,311 |
|
|
|
59,763 |
|
Property and equipment, net |
|
32,162 |
|
|
|
27,105 |
|
Operating lease right-of-use
assets |
|
19,053 |
|
|
|
20,100 |
|
Restricted cash |
|
350 |
|
|
|
350 |
|
Other assets |
|
302 |
|
|
|
302 |
|
Total assets |
$ |
168,178 |
|
|
$ |
107,620 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
6,855 |
|
|
$ |
5,926 |
|
Accrued payroll and related costs |
|
6,500 |
|
|
|
3,019 |
|
Contract liabilities |
|
47,707 |
|
|
|
29,120 |
|
Current portion of operating lease liabilities |
|
1,334 |
|
|
|
1,228 |
|
Note payable |
|
— |
|
|
|
4,379 |
|
Other current liabilities |
|
179 |
|
|
|
808 |
|
Total current liabilities |
|
62,575 |
|
|
|
44,480 |
|
|
|
|
|
Operating lease liabilities, less
current portion |
|
20,233 |
|
|
|
21,244 |
|
Total liabilities |
|
82,808 |
|
|
|
65,724 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value; 5,000 shares authorized; 1,648
shares issued and outstanding at January 31, 2021 and April 30,
2020, respectively |
|
2 |
|
|
|
2 |
|
Common stock, $0.001 par value; 150,000 shares authorized; 60,827
and 56,483 shares issued and outstanding at January 31, 2021 and
April 30, 2020, respectively |
|
61 |
|
|
|
56 |
|
Additional paid-in capital |
|
647,157 |
|
|
|
612,909 |
|
Accumulated deficit |
|
(561,850 |
) |
|
|
(571,071 |
) |
Total stockholders’ equity |
|
85,370 |
|
|
|
41,896 |
|
Total liabilities and stockholders’ equity |
$ |
168,178 |
|
|
$ |
107,620 |
|
Contacts:
Stephanie Diaz (Investors)
Vida Strategic Partners
415-675-7401
sdiaz@vidasp.com
Tim Brons (Media)
Vida Strategic Partners
415-675-7402
tbrons@vidasp.com
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