Avid Bioservices Inc (CDMO)

[jbainseky]

It isn't the sales to profit ratio, it is execution to profit ratio. The backlog keeps growing so they are growing sales, but the backlog is commitments to execute, not the execution itself. AVID is probably staffed to execute substantially more than they currently do in preparation of a client giving the order to execute (say upon a drug's approval) When that happens, costs do not go up but revenue increases. I doubt they are staffed to run full up, but highly likely they are technically "overstaffed" right now leading to operating losses. I would love for an analyst to ask such questions in the CC. Backlog is also made up of the first order for after a drug is approved, so once approved, the backlog AND EXECUTION grows quickly.

FFTT
JBAIN