-- Achieved Strong Second Quarter Revenue of $18.3 Million and Gross Margin of 18% --
-- Fiscal 2020 Projected Revenue of $64 to $67 Million Reaffirmed --
-- Launched Expanded Process Development Facility and Services --
TUSTIN, Calif., Dec. 09, 2019 (GLOBE NEWSWIRE) -- 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 second quarter of fiscal 2020 ended October 31, 2019.
Highlights Since July 31, 2019
“During the second quarter of 2020, we strengthened multiple core areas of our business,” said Rick Hancock, interim president and chief executive officer of Avid. “Our business development effort continues to be wide reaching and robust. Our reputation in the industry for quality and regulatory success continues to grow allowing us to engage with a broadening pool of potential new customers and expand our relationships with existing customers.
“Operationally, we continue to improve and enhance our equipment, facilities and systems. The opening of our new process development lab, the successful completion of our annual maintenance overhaul, and the planned installation of a new pharmaceutical grade water system in calendar 2020 all reflect the dedication we have to maintaining the highest standards possible.
“The revenues for this quarter were the highest since Avid transitioned to a pure-play CDMO in January 2018, and we achieved 18% gross margin, which represents a significant increase year-over-year as well as quarter-over-quarter. Expenses remained in line with expectations and our backlog continues to be strong. Also important, during the quarter we approached breakeven income from operations.
“Productivity and efficiency contributed significantly to Avid’s strong second quarter results, and we expect that our financial performance will continue to track positively with these factors. We believe that Avid has turned an important corner, creating a stronger platform from which to achieve sustainable profitability.”
Financial Highlights and Guidance
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
Conference Call
Avid will host a conference call and webcast this afternoon, December 9, 2019, at 4:30 PM ET (1:30 PM PT).
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: http://ir.avidbio.com/events.cfm.
About Avid Bioservices, Inc.
Avid Bioservices is a dedicated contract development and manufacturing organization (CDMO) focused on development and CGMP manufacturing of biopharmaceutical products derived from mammalian cell culture. The company provides a comprehensive range of process development, high quality CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With 25 years of experience producing monoclonal antibodies and recombinant proteins in batch, fed-batch and perfusion modes, Avid's services include CGMP clinical and commercial product manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission and support. The company also provides a variety of process development activities, including cell line development and optimization, cell culture and feed optimization, analytical methods development and product characterization. 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 the company may not achieve positive cash flow or EBITDA, 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 clients for whom the company has completed process validation campaigns may not receive regulatory approval to market their products, the risk that the company may experience technical difficulties in completing client projects which could delay delivery of products to customers, revenue recognition and receipt of payment or 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 experience delays in the installation of the pharmaceutical grade water system in the Myford facility, and the risk that the company may need to use the majority of its cash to fund operations, thereby delaying the in-process upgrades to its process development capabilities and contemplated expansion plans. 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, 2019, 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 LOSS
(Unaudited) (In thousands, except per share information)
| Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | $ | 18,313 | $ | 10,178 | $ | 33,567 | $ | 22,767 | |||||||
Cost of revenues | 14,953 | 9,844 | 29,121 | 21,241 | |||||||||||
Gross profit | 3,360 | 334 | 4,446 | 1,526 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 3,534 | 2,816 | 7,993 | 6,031 | |||||||||||
Loss on lease termination | 355 | — | 355 | — | |||||||||||
Total operating expenses | 3,889 | 2,816 | 8,348 | 6,031 | |||||||||||
Operating loss | (529 | ) | (2,482 | ) | (3,902 | ) | (4,505 | ) | |||||||
Interest and other income, net | 99 | 119 | 308 | 181 | |||||||||||
Loss from continuing operations before income taxes | (430 | ) | (2,363 | ) | (3,594 | ) | (4,324 | ) | |||||||
Income tax benefit | — | 173 | — | 173 | |||||||||||
Loss from continuing operations, net of tax | (430 | ) | (2,190 | ) | (3,594 | ) | (4,151 | ) | |||||||
Income from discontinued operations, net of tax | — | 739 | — | 739 | |||||||||||
Net loss | $ | (430 | ) | $ | (1,451 | ) | $ | (3,594 | ) | $ | (3,412 | ) | |||
Comprehensive loss | $ | (430 | ) | $ | (1,451 | ) | $ | (3,594 | ) | $ | (3,412 | ) | |||
Series E preferred stock accumulated dividends | (1,442 | ) | (1,442 | ) | (2,523 | ) | (2,523 | ) | |||||||
Net loss attributable to common stockholders | $ | (1,872 | ) | $ | (2,893 | ) | $ | (6,117 | ) | $ | (5,935 | ) | |||
Basic and diluted net (loss) income per common share attributable to common stockholders: | |||||||||||||||
Continuing operations | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.12 | ) | |||
Discontinued operations | — | 0.01 | — | 0.01 | |||||||||||
Net loss per share attributable to common stockholders | $ | (0.03 | ) | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.11 | ) | |||
Weighted average basic and diluted shares outstanding | 56,253 | 56,009 | 56,210 | 55,889 | |||||||||||
AVID BIOSERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
October 31, 2019 | April 30, 2019 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 33,960 | $ | 32,351 | |||
Accounts receivable | 7,422 | 7,374 | |||||
Contract assets | 6,110 | 4,327 | |||||
Inventory | 7,809 | 6,557 | |||||
Prepaid expenses and other current assets | 926 | 709 | |||||
Total current assets | 56,227 | 51,318 | |||||
Property and equipment, net | 26,990 | 25,625 | |||||
Operating lease right-of-use assets | 21,381 | — | |||||
Restricted cash | 350 | 1,150 | |||||
Other assets | 302 | 302 | |||||
Total assets | $ | 105,250 | $ | 78,395 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 6,126 | $ | 4,352 | |||
Accrued payroll and related costs | 3,360 | 3,540 | |||||
Contract liabilities | 22,199 | 14,651 | |||||
Operating lease liabilities | 1,241 | — | |||||
Other current liabilities | 746 | 619 | |||||
Total current liabilities | 33,672 | 23,162 | |||||
Operating lease liabilities, less current portion | 22,394 | — | |||||
Deferred rent, less current portion | — | 2,072 | |||||
Other long-term liabilities | — | 93 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value; 5,000 shares authorized;1,648 shares issued and outstanding at October 31, 2019 and April 30, 2019, respectively | 2 | 2 | |||||
Common stock, $0.001 par value; 150,000 shares authorized; 56,338 and 56,136 shares issued and outstanding at October 31, 2019 and April 30, 2019, respectively | 56 | 56 | |||||
Additional paid-in capital | 613,325 | 613,615 | |||||
Accumulated deficit | (564,199 | ) | (560,605 | ) | |||
Total stockholders’ equity | 49,184 | 53,068 | |||||
Total liabilities and stockholders’ equity | $ | 105,250 | $ | 78,395 | |||
Contacts:
Stephanie Diaz (Investors) Tim Brons (Media)
Vida Strategic Partners Vida Strategic Partners
415-675-7401 415-675-7402
sdiaz@vidasp.com tbrons@vidasp.com