0000704562 false 0000704562 2021-09-08 2021-09-08 iso4217:USD xbrli:shares iso4217:USD xbrli:shares



Washington, DC 20549










Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): September 8, 2021





(Exact name of registrant as specified in its charter)


Delaware 001-32839 95-3698422
(State of other jurisdiction
of incorporation)
File Number)
(IRS Employer
Identification No.)


2642 Michelle Drive, Suite 200, Tustin, California 92780

(Address of Principal Executive Offices)


Registrant’s telephone number, including area code: (714) 508-6100



(Former name or former address, if changed since last report)




Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each Class Trading Symbol Name of each exchange on which registered
Common Stock, $0.001 par value per share CDMO The NASDAQ Stock Market LLC


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

   Emerging growth company


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐








On September 8, 2021, Avid Bioservices, Inc. (the “Company”) issued a press release to report the Company’s financial results for the first quarter ended July 31, 2021. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1. No additional information is included in this Current Report on Form 8-K.


The information included in this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed “filed” for purposes of, nor shall it be deemed incorporated by reference in, any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.




On September 8, 2021, at 4:30 p.m. EDT/1:30 p.m. PDT, the Company will host a conference call to discuss its first quarter ended July 31, 2021 financial results. The webcast of the conference call will be archived on the Company’s website for approximately 30 days.




(d) Exhibits. The following material is filed as an exhibit to this Current Report on Form 8-K:





99.1 Press Release issued September 8, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).










Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: September 8, 2021 By: /s/ Daniel R. Hart
    Daniel R. Hart
    Chief Financial Officer











Number Description
99.1 Press Release issued September 8, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).










Exhibit 99.1

Logo no tagline


Stephanie Diaz (Investors) Tim Brons (Media)  
Vida Strategic Partners Vida Strategic Partners  
415-675-7401 415-675-7402  
sdiaz@vidasp.com tbrons@vidasp.com  



Avid Bioservices Reports Financial Results for First Quarter Ended July 31, 2021 and Recent Developments


-- Recorded First Quarter Revenue of $30.8 Million --


-- Achieved Fifth Consecutive Quarter of Operational Profitability --


-- Signed $23 Million in New Business Orders and Ended the Quarter with a Backlog of $110 Million --


-- Phase 1 and Phase 2 Expansion Efforts Advancing as Planned --


TUSTIN, Calif., September 8, 2021 -- Avid Bioservices, Inc. (NASDAQ:CDMO), 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 first quarter of fiscal 2022, ended July 31, 2021.


Highlights Since April 30, 2021


“We are pleased to announce another strong quarter. During the first quarter of fiscal 2022, we recorded an increase in revenues compared to the prior year period. Our margins significantly improved during the first quarter, reflecting the efficiencies of our business model and our ability to strategically leverage our existing fixed costs. In business development, we continued to expand and diversify our pipeline. And, as always, our business development team remains highly engaged in pursuit of multiple new business opportunities. Finally, with respect to operations, both Phase 1 and Phase 2 of our buildout remain on track as work continues to enhance our high throughput capabilities for upstream, downstream and analytical services, and we expect the Phase 1 expansion to be online in January of 2022,” stated Nicholas Green, president and chief executive officer of Avid Bioservices.


“As we now have the first quarter behind us, and we are well into the second quarter, we believe we are on track to achieve our stated full year fiscal 2022 revenue guidance of between $115 million and $117 million. This represents a year-over-year growth rate of between 20% and 22%. Multiple factors contribute to our confidence in reaching this milestone, including an increase in existing customer demand, a growing pool of new customer projects, and our substantial backlog. Having said that, we remain keenly aware of the supply chain challenges that many companies continue to face due to the COVID-19 pandemic. While we have not experienced any material delays or shortages to date, it is important to recognize that uncertainty remains in the supply market, and we are cognizant of the impact it may have on timing and pricing of materials. As of today, we are aware of no supply related factors affecting our business.


“Having completed two successful fundraisings in December 2020 and March 2021, the company is very well capitalized, with approximately $160 million of cash on hand. These proceeds support our expansion and enhancement efforts, and will allow the company to explore value-creating opportunities for organic and inorganic growth in the future.”






Financial Highlights and Guidance


·The company is confirming revenue guidance for the full fiscal year 2022 of $115 million to $117 million.


·Revenues for the first quarter of fiscal 2022 were $30.8 million, representing a 21% increase compared to $25.4 million recorded in the prior year period. The increase in revenues can be attributed to an increase in process development revenues primarily associated with services provided to new customers combined with an increase in manufacturing revenues primarily due to an increase in the number and scale of manufacturing runs in-process and/or completed in the current year period compared to the prior year period.


·As of July 31, 2021, revenue backlog was $110 million, an increase of 83% compared to $60 million at the end of the same quarter last year. The company expects to recognize the majority of this backlog over the next twelve months.


·Gross margin for the first quarter of fiscal 2022 was 37% compared to a gross margin of 34% for the first quarter of fiscal 2021. The increase in gross margin was primarily due to higher manufacturing and process development revenues during the period, as well as the receipt of a $3.3 million fee for unutilized reserved capacity from a customer during the quarter, similar to the $3.1 million fee from a customer received during the first quarter of fiscal 2021. The gross margin percentages for both the current-year and the prior-year periods were strengthened by approximately 7% and 9%, respectively, from these unused reserved capacity fees. While we believe the positive trend in our margins demonstrates the growing efficiencies of our business model, we do expect to increase hiring in the coming months to support our growing manufacturing capacity, and this may impact margins in future quarters.


·Selling, general and administrative expenses (“SG&A”) for the first quarter of fiscal 2022 were $4.5 million, an increase of 17% compared to $3.8 million recorded for the first quarter of fiscal 2021. The increase in SG&A during the quarter was primarily due to increases in stock-based compensation and consulting fees, partially offset by a decrease in payroll and benefit related expenses.


·For the first quarter of fiscal 2022, the company recorded net income attributable to common stockholders of approximately $6.3 million or $0.10 per basic and diluted share, as compared to a consolidated net income attributable to common stockholders of $3.3 million or $0.06 per basic and diluted share, for the first quarter of fiscal 2021. The increase in net income attributable to common stockholders during the fiscal 2022 period is partially due to preferred stock accumulated dividends of $1.4 million included during the prior year period.


·Avid reported $159.7 million in cash and cash equivalents as of July 31, 2021 compared to $169.9 million as of the prior fiscal year ended April 30, 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


·Appointed Esther M. Alegria, Ph.D. to the Avid board of directors. Dr. Alegria joins the Avid board bringing nearly 30 years of biopharmaceutical industry experience spanning research and development, manufacturing, quality control, assurance and compliance, technology transfer and regulatory submissions supporting the development and commercialization of small and large molecule therapeutics and vaccines.


·Signed multiple new orders during the first quarter, totaling approximately $23 million.  These projects span all areas of the business, from process development to commercial manufacturing. 


·The two-part expansion of the Myford facility continues to progress according to plan.  The first phase of the expansion, 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 the fourth quarter of fiscal 2021, is designed to further expand capacity through the build out of a second manufacturing train, including both upstream and downstream processing suites within Myford South.


Combined, the company estimates that the first and second phases of this expansion will result in a total revenue generating capacity of up to approximately $270 million annually.  While the company believes that this expansion is critical to its ability to service the future needs of its customers, Avid presently has adequate capacity to accommodate current demand. 






Statement Regarding Use of Non-GAAP Financial Measures


The company uses certain non-GAAP financial measures such as non-GAAP adjusted net income, free cash flow, as well as adjusted EBITDA. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by management in our financial and operational decision making. These non-GAAP financial measures exclude amounts that the company does not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization and our senior management. The company computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year, and may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.


The company reports non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. The company believes that non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures, and encourages investors to carefully consider our results under GAAP, as well as the supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business.


Non-GAAP net income excludes stock-based compensation; business transition and related costs including corporate initiatives into new business activities such as consulting and other costs directly associated with such activities, and severance and related expenses; and non-cash interest expense on senior convertible notes for the accretion of the debt issuance costs associated with our senior convertible notes. Adjusted EBITDA excludes non-cash operating charges for stock-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes certain business transition and related costs. The company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital.


Additionally, non-GAAP net income and adjusted EBITDA are key components of the financial metrics utilized by the company’s compensation committee to measure, in part, management’s performance and determine significant elements of management’s compensation. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP financial measures included at the end of this press release.


Conference Call


Avid will host a conference call and webcast this afternoon, September 8, 2021, 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: 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 which could adversely affect guided fiscal 2022 revenues, 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, 2021, 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.


(Unaudited) (In thousands, except per share information)



Three Months Ended

July 31,

   2021   2020 
Revenues  $30,754   $25,392 
Cost of revenues   19,363    16,848 
Gross profit
   11,391    8,544 
Operating expenses:          
Selling, general and administrative   4,460    3,825 
Operating income   6,931    4,719 
Interest income   76    15 
Interest expense   (703)   (4)
Net income  $6,304   $4,730 
Comprehensive income  $6,304   $4,730 
Series E preferred stock accumulated dividends       (1,442)
Net income attributable to common stockholders  $6,304   $3,288 
Net income per share attributable to common stockholders:          
Basic  $0.10   $0.06 
Diluted  $0.10   $0.06 
Weighted average common shares outstanding:
Basic   61,137    56,523 
Diluted   63,571    56,892 




- Continued -






avid bioservices, INC.


(Unaudited) (In thousands, except par value)




July 31,



April 30,


Current assets:          
Cash and cash equivalents  $159,692   $169,915 
Accounts receivable   18,354    18,842 
Contract assets   5,956    6,112 
Inventory   15,242    11,871 
Prepaid expenses   1,536    1,064 
Total current assets   200,780    207,804 
Property and equipment, net   44,569    37,455 
Operating lease right-of-use assets   22,877    18,691 
Other assets   1,955    1,210 
Restricted cash   350    350 
Total assets  $270,531   $265,510 
Current liabilities:          
Accounts payable  $9,611   $9,257 
Accrued payroll and related costs   4,114    8,794 
Contract liabilities   46,262    50,769 
Current portion of operating lease liabilities   1,630    1,355 
Other current liabilities   1,631    761 
Total current liabilities   63,248    70,936 
Convertible senior notes, net   138,812    96,949 
Operating lease liabilities, less current portion   23,835    19,889 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock, $0.001 par value; 5,000 shares authorized;
no shares issued and outstanding at July 31, 2021 and April 30, 2021, respectively
Common stock, $0.001 par value; 150,000 shares authorized;
61,341 and 61,069 shares issued and outstanding at July 31, 2021 and April 30, 2021, respectively
   61    61 
Additional paid-in capital   597,320    637,534 
Accumulated deficit   (552,745)   (559,859)
Total stockholders’ equity   44,636    77,736 
Total liabilities and stockholders’ equity  $270,531   $265,510 



- Continued -





avid bioservices, INC.


(Unaudited) (In thousands)



   Three Months Ended July 31, 
   2021   2020 
GAAP net income attributable to common stockholders  $6,304   $3,288 
Stock-based compensation   1,299    730 
Business transition and related costs   486    208 
Non-cash interest expense   254     
Preferred stock accumulated dividends       1,442 
Adjusted net income  $8,343   $5,668 
GAAP net income attributable to common stockholders  $6,304   $3,288 
Depreciation and amortization   1,009    830 
Interest expense and interest income   627    (11)
Stock-based compensation   1,299    730 
Business transition and related costs   486    208 
Preferred stock accumulated dividends       1,442 
Adjusted EBITDA  $9,725   $6,487 
GAAP net cash used in operating activities  $(6,942)  $(2,273)
Purchase of property and equipment   (4,199)   (489)
Free cash flow  $(11,141)  $(2,762)