Avid Bioservices, Inc. (NASDAQ:CDMO) Q2 2024 Earnings Call Transcript

So it’s always a little difficult in the short-term to predict where that will be due to the lumpiness. But I don’t think necessarily our opinions changed. But if it was going to go anywhere, it would certainly be going up and not down, I would have said.

Max Smock: Got it. Thank you again for taking our questions.

Nick Green: No problem. Thanks for the answer — questions.

Operator: Thank you. One moment for our final question for today. And our final question comes to the line of Sean Dodge from RBC Capital Markets. Your question please.

Thomas Kelliher: Hey. Good afternoon. This is Thomas Kelliher on for Sean. Thanks for taking the questions. Just one for me on gross margins, how should we think about progression there with the balance of the year? Are there any specifics you can point to or other kind of one-time items we need to consider?

Dan Hart: Yeah, Thomas. So taking the first half aside, it’s still the second half at the revenue levels to hit, call it, the midpoint of guide, is still similar to what we’ve talked about going into this year and last quarter and that — there’s going to be a gross margin impact for the additional cost and the additional depreciation that we have this year that would put it into the mid-teens area, which I would expect to be plus or minus that mid-teens area as you hit that topline for the second half of the year. So that’s going to be diluted by the first half.

Thomas Kelliher: All right. Appreciate it. Thanks, Dan. I’ll leave it there.

Operator: Thank you. This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Nick Green for any further remarks.

Nick Green: Yes. Thank you, Operator, and thank you to everybody participating on today’s call. As we approach the end of calendar 2023, we look forward with some optimism to the second half of our fiscal year and the beginning of 2024 and what, sorry, and what the beginning of 2024 will hold for the business. We feel that the business is well positioned to generate cash from operations and in the near-term with sustainable profitability within reach. We thank our customers for their trust and partnership, our investors for their continued support and we wish to recognize our exceptional employees who continue to drive the success. Thank you again for participating today and for your continued support of Avid Bioservices.

Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.