Avid Bioservices Reports Financial Results for Second Quarter Ended October 31, 2024

TUSTIN, Calif., Dec. 10, 2024 (GLOBE NEWSWIRE) -- 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 second quarter and six months ended October 31, 2024.

Highlights from the Quarter Ended October 31, 2024:

"We delivered solid results in a competitive environment, with increased revenues and backlog offset by increased costs," stated Nick Green, president and CEO of Avid Bioservices. "We are pleased to reach the separately announced agreement with GHO and Ampersand, which will provide our stockholders with significant, immediate and certain cash value for their shares. The transaction also provides us with partners who are committed to leveraging their deep industry experience, focused strategy, and collaborative approach to drive growth beyond the Company's standalone plan."

Financial Highlights for the Second Quarter and Six Months Ended October 31, 2024

   -- Revenues for the second quarter were $33.5 million, an increase of 32% as 
      compared to revenues of $25.4 million recorded in the same prior year 
      period.   For the first six months of fiscal 2025, revenues were $73.7 
      million, an increase of 17% as compared to revenues of $63.1 million in 
      the same prior year period. The revenue increase for the second quarter 
      and six months ended October 31, 2024, was attributed to increases in 
      manufacturing and process development revenues. 
 
   -- As of October 31, 2024, backlog was $220 million an increase of 11% 
      compared to $199 million at the end of the same quarter last year. The 
      company anticipates a significant amount of its backlog will be 
      recognized as revenue over the next five fiscal quarters. 
 
   -- Gross loss for the second quarter was $2.0 million compared to a gross 
      loss of $4.7 million for the same prior year period. Gross profit for the 
      first six months of fiscal 2025 was $3.7 million compared to a gross loss 
      of $0.6 million for the same prior year period. The increase in gross 
      profit for the second quarter and six months ended October 31, 2024, 
      compared to the same prior year period was primarily driven by increased 
      revenues, partially offset by increases in compensation and benefit 
      related expenses, facility, manufacturing and other related expenses, and 
      depreciation expense. 
 
   -- SG&A expenses for the second quarter were $10.6 million, an increase of 
      61% compared to $6.6 million recorded in the same prior year period. 
      The increase in SG&A for the second quarter ended October 31, 2024, 
      compared to the same prior year period was primarily due to increases in 
      compensation and benefit related expenses and legal fees.   SG&A expenses 
      for the first six months of fiscal 2025 were $18.8 million, an increase 
      of 46% compared to $12.8 million recorded in the prior year period. The 
      increase in SG&A for the second quarter and six months ended October 31, 
      2024, compared to the same prior year period was primarily due to 
      increases in compensation and benefit related expenses and audit, legal 
      and other consulting fees. 
 
   -- Net loss for the second quarter was $17.4 million or $0.27 per basic and 
      diluted share, compared to a net loss of $9.5 million or $0.15 per basic 
      and diluted share for the same prior year period. For the first six 
      months of fiscal 2025, the company recorded a net loss of $22.9 million 
      or $0.36 per basic and diluted share, compared to a net loss of $11.6 
      million or $0.18 per basic and diluted share during the same prior year 
      period. 
 
   -- On October 31, 2024, the company reported cash and cash equivalents of 
      $33.4 million, compared to $38.1 million on April 30, 2024. 
 
   -- During the second quarter of fiscal 2025, the company's revolving line of 
      credit expired. 

More detailed financial information and analysis may be found in Avid Bioservices' Quarterly Report on Form 10-Q, which is being filed with the Securities and Exchange Commission today.

Acquisition of Avid Bioservices by GHO Capital Partners and Ampersand Capital Partners

   -- On November 6, 2024, the company announced that Avid, GHO Capital 
      Partners LLP ("GHO") and Ampersand Capital Partners ("Ampersand") have 
      entered into a definitive merger agreement for Avid to be acquired by 
      funds managed by GHO and Ampersand in an all-cash transaction valued at 
      approximately $1.1 billion. Under the terms of the merger agreement, GHO 
      and Ampersand would acquire all the outstanding shares held by Avid's 
      stockholders for $12.50 per share in cash. The per share purchase price 
      represents a 13.8% premium to Avid's closing share price of $10.98 
      on November 6, 2024, the last full trading day prior to the transaction 
      announcement, and a 21.9% premium to the company's 20-day volume-weighted 
      average share price for the period ended November 6, 2024. This 
      transaction equates to an enterprise value of approximately $1.1 billion, 
      a 6.3x multiple to consensus FY2025E revenue.The transaction, which was 
      unanimously approved by the Avid Board of Directors, is currently 
      expected to close in the first quarter of 2025, subject to customary 
      closing conditions, including approval by Avid's stockholders and receipt 
      of required regulatory approvals. The transaction is not subject to a 
      financing condition. The companies will continue to operate independently 
      until the proposed transaction is finalized. Upon completion of the 
      transaction, Avid common stock will no longer be listed on any public 
      stock exchange. The company will continue to operate under the Avid name 
      and brand.In light of the proposed transaction, Avid will not host an 
      earnings conference call and is suspending its practice of providing 
      financial guidance. 

About Avid Bioservices, Inc.

Avid Bioservices (NASDAQ: CDMO) is a dedicated contract development and manufacturing organization (CDMO) focused on development and CGMP manufacturing of biologics. The company provides a comprehensive range of process development, CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With more than 30 years of experience producing biologics, 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 cell line development, 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 the company's projected revenue ramp and expected continued momentum, expected future sustained profitability, the estimated annual revenue-generating capacity of the company's facilities, the expected benefits to the company's business from customers with later stage programs, the anticipated timing for recognizing revenue from the company's backlog, the realization of the company's strategic objectives, the company's revenue guidance, and other statements relating to the company's 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 that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to, the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction that could delay the consummation of the proposed transaction or cause the parties to abandon the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the proposed transaction; the possibility that the company's stockholders may not approve the proposed transaction; the risk that the parties to the merger agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the company's common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the company to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, stockholders and other business relationships and on its operating results and business generally, the risk the company may experience delays in engaging new customers, the risk that the company may not be successful in executing customers projects, the risk that changing economic conditions may delay or otherwise adversely impact the realization of the company's backlog, the risk that the company may not be able to convert its backlog into revenue

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December 10, 2024 16:05 ET (21:05 GMT)