Q1 2025 Avid Bioservices Inc Earnings Call
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Please be advised that today's conference is being recorded.
Speaker Change: I'd now like to turn the conference over to your speaker for today Jim.
Speaker Change: Tim Please go ahead.
Speaker Change: Thank you good afternoon, and thank you for joining us on today's call, we have Nick Green, President and CEO, Dan Hart, Chief Financial Officer, and Matt Kodiak, Abbott's Chief commercial officer.
Today, we will be providing an overview of avid bio services contract development and manufacturing business, including updates on corporate activities and financial results for the quarter ended July 31 2024.
Speaker Change: After our prepared remarks, we will welcome your questions.
Speaker Change: Before we begin I would like to caution that comments made during this conference call. Today September nine 2024 will contain certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.
Speaker Change: Concerning the current belief of the company, which involves a number of assumptions risks and uncertainties actual results could differ from these statements and the company undertakes no obligation to revise or update any statements made today.
Encourage you to review all the Companys filings with the Securities and Exchange Commission concerning these and other matters.
Speaker Change: Our earnings press release includes discussion of certain non-GAAP information.
Speaker Change: Can find our earnings press release, including relevant non-GAAP reconciliations on our corporate website at <unk> Dot com.
Speaker Change: With that I will turn the call over to Nick Green Abbott's, President and CEO.
Thank you Tim and thank you for everybody participating today via webcast.
Speaker Change: Building on the momentum from quarter four of fiscal 'twenty five is off to a good start and we are delighted to be reporting what I can only describe as a solid first quarter.
Speaker Change: We are encouraged by the strong revenues and new business signings, which continued to build our backlog and improve our margins.
Speaker Change: Martin and I will provide additional details on business development and operations for the period. Following an overview of our first quarter fiscal 2020 financial results.
Speaker Change: And for that I will turn the call over to Doug.
Thank you Nick before I begin in addition to the brief financial overview I'll provide on the call today.
Doug: Additional details on our financial results are included in our press release issued prior to this call.
And in our Form 10-Q, which was filed today with the SEC.
Doug: I will now provide an overview of our financial results from operations for the quarter ended July 31 2024.
Speaker Change: Revenues for the first quarter of fiscal 2025 were $40 2 million, representing a 6% increase as compared to revenues of $37 $7 million recorded in the same prior year period.
Speaker Change: The increase was primarily attributed to an increase in process development revenues during the period.
Speaker Change: Gross profit for the first quarter of fiscal 2025 was $5 $7 million, 14% gross margin compared.
Speaker Change: Compared to $4 1 million or.
Speaker Change: Our 11% gross margin in the first quarter of fiscal 2024.
The increase in gross profit for the first quarter ended July 31, 2024 compared to the same prior year period was primarily driven by the increased revenues.
Speaker Change: And lower material costs used for customer programs.
Speaker Change: We offset by increases in compensation and benefit related expenses facility manufacturing and other related expenses and depreciation expense.
Speaker Change: SG&A expenses for the first quarter of fiscal 2025.
Speaker Change: Were $8 2 million, an increase of 30% compared to $6 3 million recorded in the first quarter of fiscal 2024.
Speaker Change: The increase in SG&A for the first quarter ended July 31, 2024 compared to the same prior year period was primarily due to increases in compensation and benefit related expenses.
Speaker Change: Audit legal and other consulting fees.
Speaker Change: During the first quarter of fiscal 2025, the company's net loss was $5 5 million or <unk> <unk> per basic and diluted share.
Compared to a net loss of $2 1 million or <unk> <unk> per basic and diluted share for the first quarter of fiscal 2024.
Speaker Change: For the first quarter of fiscal 2025.
Speaker Change: The company had an adjusted EBITDA of $3 million.
Speaker Change: Our cash and cash equivalents on July 31, 2024.
Speaker Change: Were $33 4 million compared to $38 1 million on April 32024.
Speaker Change: This concludes my financial overview I'll now turn the call over to Matt for an update on our commercial activities during the quarter.
Speaker Change: Thanks, Dan.
Speaker Change: Q1, 2025 was a highly productive quarter for our team as we signed $66 million net new project agreements and ended the quarter with a backlog of $219 million.
Backlog sets another record high for the company.
Matt Kodiak: And the net new wins are the highest since the third quarter of fiscal 2023.
Matt Kodiak: We are also pleased with the composition of these signings as a significant majority are projects with new customers, including the addition of another large pharma customer.
Speaker Change: As we've discussed previously the sales cycle with Big pharma companies is generally long and involved.
Speaker Change: I am very proud of our team and the professionalism they showed and showcasing avid has exceptional service skill and quality throughout this process.
Speaker Change: As we deliver for our new large pharma clients.
Speaker Change: To capitalize on the reputation we build and increase our exposure to more large pharma over time.
Speaker Change: Our new signings also have a good mix of early and late stage programs, though we continue to be weighted more towards late stage. During the first quarter. We were successful in bringing in programs at both ends of the development spectrum.
As we've discussed on prior earnings calls a mix of early and late stage programs provide the balance between near and longer term revenues as well as the opportunity to grow with new and existing customers.
Speaker Change: With respect to our newest late stage programs. We are very pleased to report that to our <unk> programs, one of which is a phase III program advancing towards commercialization.
Speaker Change: And the other is a commercially approved product currently on the market.
Speaker Change: As we've discussed in the past <unk> programs are particularly attractive as they are a pre commercialization requirement.
Speaker Change: And while we caution that the execution of our <unk> campaign is only the beginning of a one to two year journey toward a potential commercial approval and subsequent manufacturer we cannot underestimate the importance that we believe such programs may have on our growth now and in the future as we expect they will drive an increase in revenues capacity utilization.
And ultimately our margins.
Speaker Change: In conclusion, I am extremely pleased with our performance during the first quarter of fiscal 2025.
Speaker Change: We're looking forward to the balance of the year with great optimism.
Speaker Change: This concludes my overview of commercial activities I will now turn the call back over to Nick for an update on operations and other achievements during the quarter.
Nick Green: Thanks, Matt.
Speaker Change: During the quarter, we achieved several important high marks for the company.
Nick Green: Including strong revenues, new business signings, both of which continue to drive a robust backlog and improving margins.
Speaker Change: The investments of the last few years in infrastructure facilities capacity and the expansion of our capabilities continue to attract new business and a wider range of opportunities.
Speaker Change: New infrastructure and organization and now better equipped to support the needs of large pharma with the same excellent and agility that we provide to smaller biotech companies and we look forward to the continued diversification of our customer base and our project pipeline with key programs from early stage to commercialization.
Speaker Change: <unk>.
Speaker Change: We are excited that our stone has continued to unfold just as we have led out in the past and I would like to thank all my colleagues at avid biosciences for their part in executing this strategy.
Speaker Change: Looking ahead, our primary focus is on filling our remaining capacity.
As we continue to sign new business and execute on our backlog, we expect revenues and capacity utilization to increase generating stronger margins and positioning us to achieve strong growth going forward.
Speaker Change: This concludes my prepared remarks for today and we can now open the call for questions operator.
Speaker Change: Thank you.
Speaker Change: As a reminder, if you would like to ask a question. Please press star one on your telephone.
Speaker Change: We also ask that you wait for your name and company to be announced before proceeding with your question one moment for the first question.
Speaker Change: Yes.
Okay.
Speaker Change: And our first question today will be coming from Sean Dodge of RBC capital markets. Your line is open.
Speaker Change: Yes. Thanks, good afternoon, congratulations on the strong bookings quarter.
Speaker Change: On those bookings so Matt mentioned lots of different contributors there new customers early stage stuff late stage.
Speaker Change: Then some stuff progressing towards commercial.
Speaker Change: I guess, if we think about the mix there and compare it to your current backlog, including the $66 million.
Will this accelerate or decelerate in your backlog burn rate over the next.
Speaker Change: Call it four or five quarters or is the makeup of this pretty similar to what's already in backlog, so really shouldn't affect.
Speaker Change: Backlog conversion.
Speaker Change: Makes sense.
Speaker Change: Yeah sure it does makes sense.
Speaker Change: I don't think its going to have a dramatic effect, but it is going to be probably slightly more accelerating and decelerating just due to the fact that we've got I think.
Speaker Change: A better proportion of early phase clients in the core in the quarter.
Then we have in prior quarters.
Speaker Change: The prior quarters went to high watermark so.
Speaker Change: But I think there is it was nice to see is I think not.
Speaker Change: Articulate that to see a sort of a nice balance to the to the signings.
Speaker Change: Slightly accelerating but I wouldn't say it was worth.
Speaker Change: With.
Speaker Change: Being notably in that regard.
Speaker Change: Okay, Great and then.
You mentioned two <unk> campaigns, you won in the quarter.
Speaker Change: And any more detail you can share on those are these something you took.
Speaker Change: Took away from another CMO are you going to be serving as a secondary supplier in those cases.
Speaker Change: And then any detail or bookends you can share on.
Speaker Change: Once these things.
Speaker Change: Get fully ramped what they could contribute kind of roughly in terms of annual revenue.
Speaker Change: Yes, we don't really go forward too much in terms of.
Speaker Change: Forecasting the future revenues, but in terms of.
Speaker Change: Where they came from interestingly one of them actually as a commercial product is being outsourced some internal manufacture so its already approved which is quite exciting.
Speaker Change: So.
That one Paul.
Speaker Change: A little a little more advanced the most in regard as I would say it's already on the market.
Speaker Change: The other one by virtue of the fact that it is coming and it's coming in from another.
Speaker Change: The CMO.
Speaker Change: And phase three obviously stages, one and two have been manufactured somewhere else.
Speaker Change: So that's kind of a I guess a win.
Speaker Change: To some degree.
Speaker Change: No.
Speaker Change: No second suppliers as far as I'm aware.
Speaker Change: Okay got it.
Speaker Change: Thanks, and congratulations again.
Speaker Change: Thanks, very much I appreciate it.
Speaker Change: Thank you one moment for the next question.
And our next question will be coming from Jacob Johnson of <unk>.
Speaker Change: Your line is open.
Good afternoon. This is Matt on for Jacob.
Speaker Change: A few quick questions for me just on the large pharma strategy I know you called out.
Speaker Change: Another addition, there but.
Speaker Change: Given there's been some noise around large pharma pruning some earlier stage pipelines in recent months I guess, there's two questions here.
Speaker Change: Is there any update on how your large pharma strategy is progressing as compared to your internal expectations as to any changes in demand from these customers as of late.
Speaker Change: I'll answer your second question first no changes from.
From them as late so I think getting to your point of whether the strategies our issues have changed there.
Speaker Change: <unk>.
Speaker Change: The demand for most personally then that wouldn't seem to be the case.
Speaker Change: I think.
In terms of the strategy as a whole.
Speaker Change: It's one of those strategies is long.
Speaker Change: As alluded to.
It's very involved there's a lot of.
Audits.
Speaker Change: Publishing your reputation et cetera.
Speaker Change: We're on track for where we where wed like to be in general I think the.
Speaker Change: But in some areas, we'd like to have moved a little bit quicker symptom some accounts for their accounts.
Speaker Change: Have developed that we didn't necessarily expect to develop as quake. So on the whole roughly in line.
Speaker Change: Being in it rather than patient individual, though I would say I'd always wanted to be faster if we could be.
Speaker Change: I can assure you, though however that speed is not down to anything that we're we're not trying to do ourselves.
Speaker Change: I appreciate the color there and then.
Speaker Change: Just quickly on the cell and gene therapy side of things I think you mentioned last quarter. This was a bit behind traditional biologics demand in terms of coming back in.
Given your early phase comments is this still the case or what are you seeing in those markets.
Speaker Change: Yes, I think so.
Speaker Change: <unk> is the case I certainly don't see it.
<unk> seen a catch up in any way shape or form at the moment I do think the vast majority of the drive is in the <unk>.
Speaker Change: Mammalian conversations continue to be.
Pretty.
Speaker Change: Nicely developing in the LNG and therapy area, but I wouldn't say that the activity of the funding or what have you is it.
Speaker Change: Going back into that sector yet.
So mammalian ahead for sure.
Speaker Change: I don't think it said <unk> code if anything on from where we were last quarter.
Speaker Change: We do have some interesting conversations and hopefully in the next.
Speaker Change: Two we can start to come the conversations into orders, but thats kind of where we are at the moment.
Speaker Change: Thank you I appreciate you taking the questions.
Speaker Change: Thank you next question.
Speaker Change: And our next question will be coming from Matt Hewitt of.
Matt Hewitt: Craig Hallum capital.
Speaker Change: Your line is open.
Good afternoon, congratulations on the strong quarter, maybe first up and I apologize.
Speaker Change: The vote was happening right as we were coming out, but the bio secure act made it to the house floor.
Speaker Change: I did not hear but im just curious whats your thoughts are.
Speaker Change: And I know that your customers don't always call in and say hey, because of this potential law, we're going to sign up but I'm just curious if youre seeing any change or any.
Speaker Change: Any increase in conversations that could possibly be tied.
Speaker Change: To that act.
Speaker Change: Yes.
Speaker Change: And a very high level.
Speaker Change: <unk>.
Speaker Change: We obviously compete in that marketplace and we compete against.
Speaker Change: Asian competitors in Chinese competitors in particular on.
On a regular day to day basis, I would say that.
The pipeline that we get from the numbers that we've managed to scratch to do and be able to try to get some definition.
Speaker Change: About half of the ones that we see from from China are probably by our secured associated to date.
Speaker Change: There is an element of that some of them.
Speaker Change: That we've already won.
Speaker Change: Been in progress.
Speaker Change: Prior to any via a secure conversation that they initiated so I think it's fairly safe to say the other half with nothing to do with that.
Speaker Change: How that builds up is going to be interesting.
Speaker Change: To fund the fundamental elements is that while there is no definition about it there is obviously concern than peers, so that can drive decision making.
Speaker Change: Although I do think there is also in the absence of the law. There's also people who feel that.
Speaker Change: Can we get in and out or can we can we progress as we might do in the past until it's more defined so it's going to be interesting to see how that actually pans out I mean, it's difficult to say that it is it is.
Speaker Change: As a bad thing for a U S based CMO with capacity like we are so.
Speaker Change: So it will be interesting to see how that pans out over the.
Speaker Change: The near term.
Got it and then.
Speaker Change: Second question regarding seasonality. Obviously this is the quarter. We're currently in is normally the quarter youre shutdown and kind of going through some cleaning and all that but given the newness of the facilities and the equipment is it safe to expect that that shutdown period will be lighter this year.
Speaker Change: Then then you witnessed the last few years and if Thats. The case, you just may be that normal seasonality isn't as big of a.
Speaker Change: A deal this year is that am I thinking about that right.
Speaker Change: I mean in general terms I think you all what I would say for this year is I wouldn't be I wouldn't be looking at it that way right off the bat. We've got a we've just got the new facility is online so.
Speaker Change: We do still need to maintain those facilities, we still do need to do certain activities.
Make sure everything's up to date.
Speaker Change: Any calibrations and things like that are all done.
So we are trying a few things that we think will be able to in the longer term reduce the scope of that shutdown, but I.
On the basis that it's our first year.
Speaker Change: Sure.
Speaker Change: The new facilities I would I wouldn't be building in too much to that effect. If you know what I mean.
Got it understood alright, thank you.
Speaker Change: Okay.
Speaker Change: Thank you one moment for the next question. Please.
Speaker Change: And our next question is coming from Paul Knight of Keybanc capital markets. Your line is open.
Speaker Change: Hi, Nick.
Speaker Change: Did you spell out how much of the new orders, maybe Matt we're in this LNG therapy area.
Small propulsion Paul.
Speaker Change: We don't break that one out, but it's certainly not material in the overall scheme of things so.
Speaker Change: We don't we don't segment those two just yet but.
Speaker Change: Nothing homes.
Speaker Change: Yeah.
Speaker Change: The company in the not kind of kind of in the media market is that they expect a four quarter lag on.
Speaker Change: On cell therapy funding do you think that's kind of in the ballpark.
Speaker Change: I'm not sure I go quiet as far as four quarters it depends on.
Speaker Change: It's a difficult way to look at we've seen some pickup.
Speaker Change: I think if I look if I am looking buckets.
Speaker Change: <unk> side I think November was the low from.
Speaker Change: October beginning of November was below.
Speaker Change: So we're not gone full four quarters, I think I've seen some pickup in certainly our activity in terms of the cell and gene therapy, but I wouldn't say, it's accelerating at the level that we saw from November in.
Speaker Change: And the mammalian side.
Speaker Change: Even in the mammalian side, we are getting some some.
Speaker Change: Some sort of conflicting data I think Charles River has indicated that they were seeing a reduction in early phase so.
Speaker Change: I think its coming through I think I'd be a probably a little more optimistic from what we've seen but we're certainly no bellwether for the overall industry. So I'm not going to argue with somebody else Ccs four quarters, and where you might see it two or three but.
Speaker Change: That's where we are at the moment I think.
And Nick you had previously.
Speaker Change: <unk> indicated that sometimes the backlog now would be extend beyond a year.
Speaker Change: Im assuming that Thats still the case.
Speaker Change: It stretched even more in terms of duration of a project or is it kind of similar to what you've been seeing no I think that was kind of the crux of Sean's question at the beginning was that.
Speaker Change: I think the mix of those signings that we've got this this quarter.
Speaker Change: A little richer in the early phase than than traditionally still still the majority of them are late phase.
Speaker Change: There is a higher proportion of higher number of early phase than we had seen in the last two or three quarters.
Speaker Change: Last year so.
Speaker Change: If anything it's slightly accelerating it and maybe reducing it from <unk> to a little bit less but it's not material. So I would say, it's a definite not extending as it were.
Speaker Change: And then lastly, I know there's <unk> here in the United States, but is there anything new on the regulatory front in Europe that puts you in a bit better of a position.
Speaker Change: No I mean I heard some rumblings.
People might believe.
Speaker Change: Believing that they may be it may take similar actions in Europe, I haven't seen anything.
Speaker Change: <unk> that suggest that that's going to be the case.
Speaker Change: So really all we have today as far as I can see in the.
Speaker Change: The immediate horizon as the as the Biosecurity here in the U S.
Speaker Change: Okay. Thanks.
Thanks, Paul.
Speaker Change: Thank you and one moment for the next question.
Speaker Change: Yes.
And our next question will be coming from Max Smart William Blair. Your line is open.
Max Smart: Hey, guys. Good afternoon, and thanks for taking our questions to start just echo John's commentary I mean say congrats on the nice bookings quarter here in the first quarter I wanted to ask a follow up on Matt's question on <unk>.
Speaker Change: And it sounds like you have some customers that are still waiting to see how it plays out before moving away from China, but is it fair to say that most of the companies Youre talking about they are already committed to changing their behavior and moving away from China kind of regardless of what happens with the Doe here near term and in your conversations that you're picking up on any material differences in terms of how small biotech and large pharma are currently reacting or.
Speaker Change: Dwayne and to react to the Biosecurity.
Speaker Change: Good questions Matt.
Yes.
Speaker Change: When people are talking to us, we obviously get a I guess a more biased view of the.
Speaker Change: The impact of bio secure because if you are in China, and you're coming to Davita and you're talking to me about it and that suggests that you've already caused the problems of the first new isn't looking to move won't even call me. So I won't even hear their voice. So that one is always a little bit difficult to judge.
Speaker Change: On the total pipeline of customers.
Speaker Change: What we're seeing obviously, you're thinking of moving are all moving.
Speaker Change: So I'm not sure how much I would actually.
Speaker Change: Rely on that as a data point, but I think we certainly seen an increasing number of conversations around that area.
Big pharma to emerging pharma.
Speaker Change: I think.
Speaker Change: <unk> is not necessarily the easiest one again I don't deal with all big pharma, but I.
Speaker Change: I would say that we've seen interest in avid interest in avid more because they are looking at like getting rid of somebody else or looking at other alternatives that may be backups at.
Speaker Change: Could well be.
Speaker Change: I think also it depends on what phase that you're in and the and.
Speaker Change: The biotech phase I think if you are in the early phase then maybe it is the view that you could get in and out before that occurs in which case then you could still source from from that region are those people.
Speaker Change: In the case of late.
Speaker Change: Later phase then that obviously becomes a little bit more concerning because you may have a regulatory filing.
Speaker Change: That could get caught up in.
And the outcome of whatever the outcome ends up being.
Speaker Change: So I think I would say the larger concern from what we can see.
Speaker Change: Would be probably the later phase clinical candidates, probably getting more attention than anybody else, but I do hasten to point out that we are not the bellwether of the whole industry. So it's a microcosm that we'd see.
Speaker Change: Yes, fair enough and thanks for that comment there's a lot of good stuff in there maybe.
Maybe following up on an unrelated one I wanted to ask about halos on which.
Speaker Change: Obviously, a key customer was over half of our revenue in fiscal 'twenty, three but that was down to about a third in fiscal 2024 can you just give us an update around what exactly happened there in fiscal 2023.
Speaker Change: <unk> revenues trended, so far or trended so far here in the first quarter and kind of what youre baking in for <unk> revenue here in fiscal 2025, and just your overall level of visibility into revenue. This year from this key customer.
Speaker Change: Yes again.
Speaker Change: I, obviously do know what went on between ourselves and <unk> I don't think any of us negative in any way shape or form.
Speaker Change: I tried to avoid commenting on somebody else's business, particularly in the public environment.
Speaker Change: Click company, but rather sorry.
Speaker Change: So I think that.
Speaker Change: I'll leave that one is as is but what I can say is I think the relationship remains strong I think that what's been going on over the last few years is nothing but positive as far as I can say.
Speaker Change: We continue to be the best supplier, we possibly can be in and.
Speaker Change: Service.
Speaker Change: As well as our other clients to the highest possible standard that we can.
Speaker Change: I've said it publicly in the past I'd love to see the handlers I'm revenues continued to grow and I'd love to see them become a smaller proportion of our business as we continue to grow ourselves and diverse diversify our customer base.
Speaker Change: And we remain pretty much the same so I think the.
Speaker Change: What I would take out of the last year.
Speaker Change: We're still growing compared to where we went over the last few years and it is becoming a smaller number over the long term and that's.
Speaker Change: In the direction that we've been articulating.
Speaker Change: And again I, just hope that we can continue to grow along with Amazon.
Yes, understood and again not necessarily a bad thing rates think it speaks to the strength of the rest of your customer base there.
Speaker Change: Can you just sneak in a final one in here from me wanted to ask about the margins and just whether or not there is any color you can give us in terms of expectations for adjusted EBITDA or adjusted EBITDA margin here in fiscal 2025 and from a modeling perspective is it reasonable to think about this quarter is going to be in a good jumping off point for the rest of the year and assuming something like 40.
The 60% drop through rate on incremental revenue that you pointed to in the past.
Speaker Change: Hey, Matt Good question.
Speaker Change: It was nice to see that we built off the momentum of where we're coming off of Q2 of last year looking into Q3 and Q4 increases we can see where we ended up for for Q4 as far as all through overall gross margins break down the EBITDA margin.
Speaker Change: As we continue to grow and approach the guide for this year I would like to see.
Speaker Change: EBITDA continue to grow.
But as we always say that.
Speaker Change: Orders can be lumpy.
So we will have some pluses and minuses as we grow but.
Speaker Change: I would like to see something similar.
Speaker Change: Continue to grow as we go forward.
So thanks again for taking my questions.
Speaker Change: Thanks, Bob.
Speaker Change: Thank you and that does conclude today's Q&A session I would like to turn the call back over to next closing remarks. Please go ahead.
Speaker Change: Thank you operator, and thank you to everyone participating on today's call.
Speaker Change: We are highly encouraged by the progress during the first quarter and we look ahead to the remainder of fiscal 2025 with some optimism.
Speaker Change: We thank our customers for their trust and partnership our investors for their continued support and we wish to recognize the exceptional employees, who continue to drive the success.
Speaker Change #100: Thank you again for participating today and for your continued support of avid biosynthesis.
Speaker Change #100: This does conclude today's conference call you may all disconnect.
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Speaker Change #101: Good day, and thank you for standing by and welcome to the avid bio services first quarter fiscal year 2025 financial results Conference call. At this time, all participants are in a listen only mode.
Speaker Change #102: After the speaker's presentation, there will be a question and answer session.
Speaker Change #103: I'll ask a question during the session you will need to press star one on your telephone.
Speaker Change #103: You will then hear an automated message advising your hand is raised.
Speaker Change #103: Your question. Please press star one again please.
Speaker Change #103: Please be advised that today's conference is being recorded.
I would now like to turn the conference over to your speaker for today Ken.
Speaker Change #104: Ken Please go ahead.
Ken: Thank you good afternoon, and thank you for joining us on today's call, we have Nick Green, President and CEO, Dan Hart, Chief Financial Officer, and Matt Kodiak, Abbott's Chief commercial officer.
Speaker Change #106: Today, we will be providing an overview of avid bio services contract development and manufacturing business, including updates on corporate activities and financial results for the quarter ended July 31 2024.
Speaker Change #106: After our prepared remarks, we will welcome your questions.
Speaker Change #107: <unk>, we begin I would like to caution that comments made during this conference call. Today September nine 2024 will contain certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker Change #107: Concerning the current belief of the company, which involves a number of assumptions risks and uncertainties actual results could differ from these statements and the company undertakes no obligation to revise or update any statements made today.
Speaker Change #107: Encourage you to review all the company's filings with the Securities and Exchange Commission concerning these and other matters.
Speaker Change #107: Our earnings press release includes discussion of certain non-GAAP information.
Speaker Change #108: Can find our earnings press release, including relevant non-GAAP reconciliations on our corporate website at <unk> Dot com.
Speaker Change #109: With that I will turn the call over to Nick Green Abbott's, President and CEO.
Speaker Change #110: Thank you Tim and thank you for everybody participating today via webcast.
Speaker Change #111: Building on the momentum from quarter four of fiscal 'twenty five is off to a good start and we are delighted to be reporting what I can only describe as a solid first quarter.
Speaker Change #111: We are encouraged by the strong revenues and new business signings, which continued to build our backlog and improve our margins.
Martin and I will provide additional details on business development and operations for the period. Following an overview of our first quarter fiscal 'twenty five financial results.
Speaker Change #111: And for that I'll turn the call over to Doug.
Doug: Thank you Nick before I begin in addition to the brief financial overview I'll provide on the call today.
Doug: Additional details on our financial results are included in our press release issued prior to this call and in our Form 10-Q, which was filed today with the SEC.
Speaker Change #112: I will now provide an overview of our financial results from operations for the quarter ended July 31 2024.
Speaker Change #112: Revenues for the first quarter of fiscal 2025 were $40 2 million.
Speaker Change #112: Representing a 6% increase as compared to revenues of $37 7 million recorded.
Speaker Change #112: <unk> recorded in the same prior year period.
Speaker Change #112: The increase was primarily attributed to an increase in process development revenues during the period.
Speaker Change #112: Gross profit for the first quarter of fiscal 2025 was $5 7 million, 14% gross margin.
Speaker Change #112: <unk> to $4 1 million or.
Speaker Change #112: Our 11% gross margin in the first quarter of fiscal 2024.
Speaker Change #112: The increase in gross profit for the first quarter ended July 31, 2024 compared to the same prior year period was primarily driven by the increased revenues.
Speaker Change #112: And lower material costs used for customer programs.
Really offset by increases in compensation and benefit related expenses facility manufacturing and other related expenses and depreciation expense.
Speaker Change #112: SG&A expenses for the first quarter of fiscal 2025.
Speaker Change #112: Were $8 2 million.
Speaker Change #112: An increase of 30% compared to $6 3 million recorded in the first quarter of fiscal 2024.
Speaker Change #112: The increase in SG&A for the first quarter ended July 31, 2024 compared to the same prior year period was primarily due to increases in compensation and benefit related expenses.
Speaker Change #112: Audit legal and other consulting fees.
Speaker Change #112: During the first quarter of fiscal 2025, the company's net loss was $5 5 million or <unk> <unk> per basic and diluted share.
Speaker Change #112: Compared to a net loss of $2 1 million or <unk> <unk> per basic and diluted share for the first quarter of fiscal 2024.
Speaker Change #112: For the first quarter of fiscal 2025, the company had an adjusted EBITDA of $3 million.
Speaker Change #112: Our cash and cash equivalents on July 31, 2024.
Speaker Change #112: Were $33 4 million compared to $38 1 million on April 32024.
Speaker Change #112: This concludes my financial overview I'll now turn the call over to Matt for an update on our commercial activities during the quarter.
Speaker Change #113: Thanks, Dan.
Matt: Q1, 2025 was a highly productive quarter for our team as we signed $66 million net and new project agreements and ended the quarter with a backlog of $219 million.
Matt: Backlog sets another record high for the company.
Matt: And the net new wins are the highest since the third quarter of fiscal 2023.
Matt: We are also pleased with the composition of these signings as a significant majority are projects with new customers, including the addition of another large pharma customer.
Matt: As we've discussed previously the sales cycle with Big pharma companies is generally long and involved.
Matt: I am very proud of our team and the professionalism they showed and showcasing avid has exceptional service skill and quality throughout this process.
Matt: As we deliver for our new large pharma clients.
Matt: To capitalize on the reputation rebuild and increase our exposure to more large pharma over time.
Matt: Our new signings also have a good mix of early and late stage programs, though we continue to be weighted more towards late stage. During the first quarter. We were successful in bringing in programs at both ends of the development spectrum.
Matt: As we've discussed on prior earnings calls a mix of early and late stage programs provides a balanced between near and longer term revenues as well as the opportunity to grow with new and existing customers.
Speaker Change #115: With respect to our newest late stage programs. We are very pleased to report that to our <unk> programs, one of which is the phase III program advancing towards commercialization.
The other is a commercially approved product currently on the market.
Speaker Change #115: As we've discussed in the past <unk> programs are particularly attractive as they are a pre commercialization requirement.
Speaker Change #115: And while we caution that the execution of our <unk> campaign is only the beginning of a one to two year journey toward a potential commercial approval and subsequent manufacturer we cannot underestimate the importance that we believe such programs may have on our growth now and in the future as we expect they will drive an increase in revenues capacity utilization.
Speaker Change #115: And ultimately our markets.
Speaker Change #115: In conclusion, I am extremely pleased with our performance during the first quarter of fiscal 2025.
Speaker Change #115: We're looking forward to the balance of the year with great optimism.
Speaker Change #115: This concludes my overview of commercial activities I will now turn the call back over to Nick for an update on operations and other achievements during the quarter.
Nick Green: Thanks, Matt.
Nick Green: During the quarter, we achieved several important high marks for the company.
Nick Green: Including strong revenues, new business signings, both of which continue to drive a robust backlog and improving margins.
Nick Green: The investments of the last few years in infrastructure.
Speaker Change #116: <unk> capacity and the expansion of our capabilities continue to attract new business and a wider range of opportunities.