Replies to post #304875 on Avid Bioservices Inc (CDMO)

[Protector]

cj, thanks. I didn't see the 4 new customers (I thought it was only 1).

However, we believe this to be temporary delay in revenue growth during FY18 and have recently secured 4 new customers and are continuing to focus on securing addl. customer business in order to better diversify our customer base. Our goal is to maintain profitability for Avid over the short term while positioning the business for long-term growth and attracting the resources necessary to continue to advance our promising research and development efforts.”

SO :
- 1 biggest customer
- 1 second biggest customer
- 3 other customers that achieved FDA approval for their Avid line tests.
- 4 new customers

So we are at AT LEAST 9 customers (if there would be any others) and I see now that the 10-K formulates it as it "MIGHT" affect and not as it "WILL" affect profitability as expected in JUN 2018.

Pg33: “Excluding any future potential new business, we expect Avid revs for FY18 to slightly decline vs. FY17. Part of this decline is due to lower anticipated commitments from Halozyme (our largest customer) based on their most recent committed forecast (covering the 3 qtrs ending March 2018), which amount is expected to be partially offset by $10mm revenue that was expected to be recognized in FY17, but has been shifted to FY18 due to a delay in shipping product that was complete and ready for shipment as of fye 4-30-17.”

Also this paragraph reads better in the 10-K. PPHM says that if there would NOT be any new business in FY 2018 (we are only in Q1 of FY 2018 because PPHM does MAY-APRIL FY's) then and only then they expect SLIGHTLY DECLINE. This requires Avid not to find one single new client in the next 9.5 months in a market with rising demand and with a 2+6 award winning manufactures and with references such as HALO in their brochure!

The fact that PPHM Maximises current facilities first and delays Avid III building (it is designed because they were ready to build and said they signed a renting contract) is a good think. They have the location and can use it as non-cool storage or move their distilled water production in their. Brings also 150K$ per batch. The more batches the run the more times they safe the margin on the 150K$ if they would have ordered it by 3rd party. And they can start to STORE distilled water because they need it ALL THE TIME and in LARGE QUANTITIES, certainly now that they operate 2 extra 2000L reactors.


Thanks for bring the 10-K passage to our attention.

[corporalagarn]

"Part of this decline is due to lower anticipated commitments from Halozyme (our largest customer) based on their most recent committed forecast (covering the 3 qtrs ending March 2018), which amount is expected to be partially offset by $10mm revenue that was expected to be recognized in FY17"

YIKES! The $10m "shift" in revenue is only going to partially offset the decrease in Halozyme revenue.

The going concern is making more sense. Lowering forecasts for sure going forward.