Avid Bioservices Inc (CDMO) Adjusts Fiscal 2024 Revenue Guidance Amidst Second Quarter Challenges
Avid Bioservices Inc (NASDAQ:CDMO) reports a second-quarter revenue of $25.4 million, a decrease from the previous year.
The company has signed $35 million in net new business orders, resulting in a $199 million backlog.
Adjustment of fiscal 2024 revenue guidance to $137 to $147 million, reflecting recent challenges.
Completion of construction for a new Cell and Gene Therapy facility, with a grand opening scheduled for January 2024.
On December 7, 2023, Avid Bioservices Inc (NASDAQ:CDMO) released its 8-K filing, detailing the financial outcomes for the second quarter ended October 31, 2023. The company faced several challenges during the quarter, leading to a decrease in revenue compared to the previous year and an adjustment in revenue guidance for fiscal 2024. Despite these hurdles, Avid Bioservices Inc (NASDAQ:CDMO) remains optimistic about the future, citing a significant backlog and new partnerships as indicators of potential growth.
Financial Performance Overview
Avid Bioservices Inc (NASDAQ:CDMO) experienced a decline in revenue, reporting $25.4 million for the second quarter, compared to $34.7 million in the same period of the previous year. The company's cost of revenues also increased slightly to $30.1 million, resulting in a gross loss of $4.7 million. Operating expenses amounted to $6.6 million, with total operating losses reaching $11.2 million. Interest expenses and other income netted to a loss before income taxes of $11.9 million, with an income tax benefit of $2.4 million, leading to a net loss of $9.5 million for the quarter.
Balance Sheet and Cash Flow Highlights
The balance sheet of Avid Bioservices Inc (NASDAQ:CDMO) shows a cash and cash equivalents balance of $31.4 million, a decrease from $38.5 million at the end of the previous fiscal year. Accounts receivable and contract assets also saw a decline, while inventory levels decreased to $38.6 million. The company's total assets stood at $454.6 million, with total liabilities at $270.9 million, and stockholders' equity at $183.7 million.
From an operational cash flow perspective, Avid Bioservices Inc (NASDAQ:CDMO) generated $6.1 million in cash from operations but had a free cash flow of negative $1.2 million after accounting for the purchase of property and equipment.
Strategic Developments and Future Outlook
Avid Bioservices Inc (NASDAQ:CDMO) has completed the construction of its Cell and Gene Therapy facility, with the grand opening scheduled for January 2024. The company has also entered into a partnership with the California Institute of Regenerative Medicine (CIRM) to advance the manufacturing of Adeno-Associated Adenovirus and other cell and gene therapy programs. These developments are expected to contribute to the company's future growth.
Despite the challenges faced in the first half of fiscal 2024, Avid Bioservices Inc (NASDAQ:CDMO) is adjusting its revenue guidance to $137 to $147 million. The company's president and CEO, Nick Green, expressed optimism for the second half of the fiscal year, citing the $35 million in new business bookings and a record high backlog of $199 million as positive indicators.
Despite the challenges of the first half of fiscal 2024, our current backlog and pipeline position us well to generate cash from operations in the near term, and significant growth in the medium-term and beyond. For these reasons, we believe the second half of the year holds great promise and opportunity for Avid."
Avid Bioservices Inc (NASDAQ:CDMO) is poised to capitalize on its expanded manufacturing capacity, which can support revenue generation of up to approximately $400 million. The company's strategic focus remains on converting its backlog into revenue and leveraging its expanded capabilities to meet the manufacturing needs of its clients.
For a more detailed analysis of Avid Bioservices Inc (NASDAQ:CDMO)'s financials, readers are encouraged to review the company's Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission.
Explore the complete 8-K earnings release (here) from Avid Bioservices Inc for further details.
This article first appeared on GuruFocus.
