-- Recorded Third Quarter Revenue of $13.6 Million --
-- Signed New Customer and Project Expansion Orders with Current Customers for $20 Million --
-- Adjusting Fiscal 2020 Projected Revenue to $55 to $59 Million --
TUSTIN, Calif., March 10, 2020 (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 third quarter and first nine months of fiscal 2020 ended January 31, 2020.
Highlights Since October 31, 2019
“During the third quarter of 2020, Avid strengthened both its project pipeline and backlog, and the fundamentals of the business remained strong,” said Rick Hancock, interim president and chief executive officer of Avid. “However, the company faced production challenges during the period related to a problem with a specific piece of equipment which resulted in the termination of in-process manufacturing runs, and the postponement of several other manufacturing runs scheduled to commence during the third quarter. Though we are now implementing the necessary corrections, the temporary production interruption resulted in lower revenue and profits for the third quarter, and we expect it to also impact revenues and profits for the fourth quarter of fiscal 2020. For this reason, we are adjusting our revenue guidance for fiscal 2020 to $55 - $59 million versus our prior guidance of $64 - $67 million. It is our expectation that this problem will be behind us soon, and as such, we anticipate that the impact will be contained to fiscal 2020.
“While we are disappointed that this temporary operational setback will negatively impact our fiscal 2020 results, we anticipate that we will be able to recover those revenues in fiscal 2021. We remain optimistic about Avid’s growth potential.
“Critical to achieving this growth is the continued expansion of Avid’s customer and project base. To lead this effort, we recently welcomed Timothy Compton to the Avid team as our chief commercial officer. During the third quarter, Tim launched the first phase of an aggressive business development campaign. As a result, we signed agreements to add one new customer and multiple additional manufacturing campaigns with existing customers during the period.
“With respect to operations, we continue to make progress on projects to optimize our existing Myford facility while finalizing plans for its future expansion. We will continue to update you moving forward as these plans progress.”
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, March 10, 2020, at 4:30 PM EDT (1:30 PM PDT).
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 the production challenges experienced by the company during the third quarter of fiscal year 2020 may not be fully resolved during the fourth quarter of fiscal year 2020 or may reoccur in the future causing a negative impact on revenue and profits, the risk that the company is unable to recover during fiscal year 2021 the revenues lost or to be lost during fiscal year 2020 due to the terminated and postponed manufacturing runs, 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 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 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 January 31, | Nine Months Ended January 31, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Revenues | $ | 13,585 | $ | 13,781 | $ | 47,152 | $ | 36,548 | |||||||||||||
Cost of revenues | 12,800 | 11,731 | 41,921 | 32,972 | |||||||||||||||||
Gross profit | 785 | 2,050 | 5,231 | 3,576 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | 2,996 | 3,242 | 10,989 | 9,273 | |||||||||||||||||
Loss on lease termination | — | — | 355 | — | |||||||||||||||||
Total operating expenses | 2,996 | 3,242 | 11,344 | 9,273 | |||||||||||||||||
Operating loss | (2,211 | ) | (1,192 | ) | (6,113 | ) | (5,697 | ) | |||||||||||||
Interest and other income, net | 107 | 9 | 415 | 190 | |||||||||||||||||
Loss from continuing operations before income taxes | (2,104 | ) | (1,183 | ) | (5,698 | ) | (5,507 | ) | |||||||||||||
Income tax benefit | — | 44 | — | 217 | |||||||||||||||||
Loss from continuing operations, net of tax | (2,104 | ) | (1,139 | ) | (5,698 | ) | (5,290 | ) | |||||||||||||
Income from discontinued operations, net of tax | — | — | — | 739 | |||||||||||||||||
Net loss | $ | (2,104 | ) | $ | (1,139 | ) | $ | (5,698 | ) | $ | (4,551 | ) | |||||||||
Comprehensive loss | $ | (2,104 | ) | $ | (1,139 | ) | $ | (5,698 | ) | $ | (4,551 | ) | |||||||||
Series E preferred stock accumulated dividends | (1,442 | ) | (1,442 | ) | (3,604 | ) | (3,604 | ) | |||||||||||||
Net loss attributable to common stockholders | $ | (3,546 | ) | $ | (2,581 | ) | $ | (9,302 | ) | $ | (8,155 | ) | |||||||||
Basic and diluted net (loss) income per common share attributable to common stockholders: | |||||||||||||||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.17 | ) | $ | (0.16 | ) | |||||||||
Discontinued operations | — | — | — | 0.01 | |||||||||||||||||
Net loss per share attributable to common stockholders | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.17 | ) | $ | (0.15 | ) | |||||||||
Weighted average basic and diluted shares outstanding | 56,404 | 56,069 | 56,275 | 55,949 |
AVID BIOSERVICES, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited)(In thousands, except par value) | |||||||
January 31, 2020 | April 30, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 30,687 | $ | 32,351 | |||
Accounts receivable | 10,151 | 7,374 | |||||
Contract assets | 6,111 | 4,327 | |||||
Inventory | 9,565 | 6,557 | |||||
Prepaid expenses and other current assets | 763 | 709 | |||||
Total current assets | 57,277 | 51,318 | |||||
Property and equipment, net | 26,850 | 25,625 | |||||
Operating lease right-of-use assets | 20,437 | — | |||||
Restricted cash | 350 | 1,150 | |||||
Other assets | 302 | 302 | |||||
Total assets | $ | 105,216 | $ | 78,395 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,332 | $ | 4,352 | |||
Accrued payroll and related costs | 2,985 | 3,540 | |||||
Contract liabilities | 26,355 | 14,651 | |||||
Operating lease liabilities | 1,172 | — | |||||
Other current liabilities | 710 | 619 | |||||
Total current liabilities | 36,554 | 23,162 | |||||
Operating lease liabilities, less current portion | 21,584 | — | |||||
Deferred rent, less current portion | — | 2,072 | |||||
Other long-term liabilities | — | 93 | |||||
Total liabilities | 58,138 | 25,327 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value; 5,000 shares authorized; 1,648 shares issued and outstanding at January 31, 2020 and April 30, 2019, respectively | 2 | 2 | |||||
Common stock, $0.001 par value; 150,000 shares authorized; 56,479 and 56,136 shares issued and outstanding at January 31, 2020 and April 30, 2019, respectively | 56 | 56 | |||||
Additional paid-in capital | 613,323 | 613,615 | |||||
Accumulated deficit | (566,303 | ) | (560,605 | ) | |||
Total stockholders’ equity | 47,078 | 53,068 | |||||
Total liabilities and stockholders’ equity | $ | 105,216 | $ | 78,395 |