Avid Bioservices Inc (CDMO) 2024 Q2 法說會逐字稿

Good day, ladies and gentlemen. And welcome to the Avid Bioservices' second-quarter fiscal 2024 financial results conference call. (Operator Instructions) As a reminder, this conference call may be recorded.

美好的一天，女士們先生們。歡迎參加 Avid Bioservices 2024 財政年度第二季財務業績電話會議。 （操作員說明）謹此提醒，本次電話會議可能會被錄音。

I would now like to hand the conference over to Tim Brons of Avid Investors Relations Group. Please go ahead, sir.

我現在想將會議交給 Avid 投資者關係集團的 Tim Brons。請繼續，先生。

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 Kwietniak, Avid's Chief Commercial Officer.

謝謝。下午好，感謝您加入我們。出席今天的電話會議的有總裁兼執行長尼克·格林 (Nick Green)；丹‧哈特，財務長；以及 Avid 商務長 Matt Kwietniak。

Today, we will be providing an overview of Avid Bioservices' contract development and manufacturing business, including updates on corporate activities and financial results for the quarter ended October 31, 2023. After our prepared remarks, we will welcome your questions.

今天，我們將概述 Avid Bioservices 的合約開發和製造業務，包括截至 2023 年 10 月 31 日的季度的公司活動和財務業績的最新情況。在我們準備好的發言後，我們將歡迎您提出問題。

Before we begin, I'd like to caution that comments made during this conference call today, December 7, 2023, will contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, concerning the current belief of the company, which involves a number of assumptions, risks, and uncertainties.

在我們開始之前，我想提醒大家，在今天（2023 年 12 月 7 日）的電話會議上發表的評論將包含 1995 年《私人證券訴訟改革法案》含義內的某些前瞻性陳述，涉及公司，其中涉及許多假設、風險和不確定性。

Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all the company's filings with the Securities and Exchange Commission concerning these and other matters.

實際結果可能與這些聲明有所不同，公司不承擔修改或更新今天所做的任何聲明的義務。我鼓勵您查看該公司向美國證券交易委員會提交的有關這些及其他事項的所有文件。

Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations on our corporate website at avidbio.com.

我們的收益新聞稿和本次電話會議將包括對某些非公認會計準則資訊的討論。您可以在我們的公司網站 avidbio.com 上找到我們的收益新聞稿，包括相關的非 GAAP 調整表。

With that, I will turn the call over to Nick Green, Avid's President and CEO.

接下來，我會將電話轉給 Avid 總裁兼執行長 Nick Green。

Thank you, Tim, and thank you to everybody participating today via webcast. Now, the second-quarter revenues were impacted by a number of factors. These are now behind us, and we are looking ahead to the second half of the year with some optimism.

謝謝蒂姆，也感謝今天透過網路直播參與的所有人。現在，第二季的收入受到多種因素的影響。現在這些都已成為過去，我們對下半年充滿樂觀。

We closed the quarter with an improved cash balance. We have now completed the expansion program started almost three years ago. Our backlog has achieved a new record high. And as we amend guidance, we expect significant growth over the first half with revenues approximating those achieved in the second half of fiscal-year 2023, the highest six months in the company's history to-date.

本季結束時，我們的現金餘額有所改善。我們現在已經完成了大約三年前開始的擴建計劃。我們的積壓訂單創下新高。隨著我們修改指引，我們預計上半年將顯著成長，營收接近 2023 財年下半年的收入，這是公司歷史上迄今為止最高的六個月。

During the second quarter, our team continued to execute on both business development and operational front. Despite the financial challenges faced by many of our current and prospective customers, important programs continue to advance.

在第二季度，我們的團隊繼續在業務開發和營運方面執行。儘管我們的許多現有和潛在客戶面臨財務挑戰，但重要的項目仍在繼續前進。

Avid's commercial team had another strong quarter, securing new business wins of approximately $35 million, resulting in a record backlog of $199 million. This work comes from both new and existing customers, and stabs our capabilities, including our new cell and gene therapy services or CGT services, as I will refer to them.

Avid 的商業團隊又迎來了一個強勁的季度，贏得了約 3500 萬美元的新業務，導致積壓訂單達到創紀錄的 1.99 億美元。這項工作來自新客戶和現有客戶，並增強了我們的能力，包括我們新的細胞和基因治療服務或 CGT 服務，我將提到它們。

As reported last quarter, while we continue to win more projects in the later phases of clinical development, we were pleased to see several early-stage programs advancing during the quarter. And we were delighted to see one of our customers receive FDA approval for a product which we are currently conducting a PPQ campaign to affect its transfer to Avid.

正如上季所報告的，雖然我們在臨床開發的後期階段繼續贏得更多項目，但我們很高興看到幾個早期項目在本季度取得進展。我們很高興看到我們的一位客戶的一款產品獲得 FDA 批准，我們目前正在進行 PPQ 活動以影響其向 Avid 的轉移。

In support of our new CGT services, the company was recently accepted into an industry partnership with the California Institute of Regenerative Medicine or CIRM, which we feel both validates our newest business, as well as increases our visibility in the industry.

為了支持我們新的 CGT 服務，該公司最近與加州再生醫學研究所 (CIRM) 建立了行業合作夥伴關係，我們認為這既驗證了我們的最新業務，也提高了我們在行業中的知名度。

CIRM is dedicated to the advancement of manufacturing of adeno-associated adenovirus, as well as other cell and gene therapy programs within the state of California, and Matt will provide a bit more information on this partnership shortly.

CIRM 致力於推進腺相關腺病毒的生產以及加州內的其他細胞和基因治療項目，Matt 很快就會提供有關此合作夥伴關係的更多資訊。

In operations, during the quarter, Avid successfully executed its planned annual major shutdown. Most important, we also completed construction of the company's CGMP manufacturing suites within our new world-class CGT development and manufacturing facility as scheduled.

在營運方面，本季 Avid 成功執行了計劃中的年度大停工。最重要的是，我們還在新的世界級 CGT 開發和製造工廠內按計劃完成了該公司 CGMP 製造套件的建造。

The newly launched manufacturing suites are currently undergoing final environmental monitoring and performance qualifications. And as we rapidly approach the start of calendar 2024, we are looking forward to being able to engage with potential customers with our offering complete. Matt and I will provide additional details on business development and operations for the period, following an overview of our second-quarter fiscal-2024 financial results.

新推出的製造套件目前正在進行最終的環境監測和性能鑑定。隨著 2024 年新年的臨近，我們期待透過我們完整的產品與潛在客戶互動。在概述 2024 財年第二季財務業績之後，我和馬特將提供有關該期間業務發展和營運的更多詳細資訊。

And for that, I'll turn the call over to Dan.

為此，我會將電話轉給丹。

Thank you, Nick. Before I begin, in addition to the brief financial overview I'll provide on the call today, additional details in 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.

謝謝你，尼克。在開始之前，除了我將在今天的電話會議上提供的簡要財務概述外，我們財務業績的其他詳細信息還包含在本次電話會議之前發布的新聞稿以及今天向我們提交的10-Q 表格中。美國證券交易委員會。

I'll now provide an overview of our financial results from operations for the quarter and six months into October 31, 2023. Revenues for the second quarter of fiscal '24 were $25.4 million, representing a 27% decrease as compared to revenues of $34.8 million recorded in the prior-year period.

現在，我將概述截至 2023 年 10 月 31 日的本季和六個月的營運財務表現。2024 財年第二季的收入為 2,540 萬美元，與 3,480 萬美元的收入相比下降了 27%記錄於上年期間。

For the first six months of fiscal '24, revenues were $63.1 million, a 12% decrease compared to $71.4 million in the prior-year period. The decrease in revenues for both periods as compared to the prior-year periods was primarily attributed to fewer manufacturing runs, the reduction in process development services from early-stage customers, and the reduction of revenue for changes in estimated variable considerations under a contract where some uncertainties have been resolved.

2024 財年的前六個月，營收為 6,310 萬美元，比去年同期的 7,140 萬美元下降了 12%。與上年同期相比，這兩個時期的收入均有所下降，主要是由於生產運行減少、早期客戶的工藝開發服務減少以及合約中估計變數考慮因素變化導致的收入減少，其中一些不確定因素已經得到解決。

Gross margin for the three months into October 31, 2023, was negative 18%, compared to 12% for the same period in the prior year. Gross margin for the first six months of fiscal '24 was negative 1%, compared to a gross margin of 19% for the same period during fiscal '23. The decrease in gross margin percentage for both periods as compared to the same prior-year periods was primarily driven by lower manufacturing volumes and costs related to expansions of both our capacity and our technical capabilities. This included adding staff and associated overhead, including depreciation expense, that will provide critical capacity for near- and medium-term growth.

截至 2023 年 10 月 31 日的三個月毛利率為負 18%，而去年同期為 12%。 24 財年前六個月的毛利率為負 1%，而 23 財年同期的毛利率為 19%。與去年同期相比，這兩個時期的毛利率百分比下降主要是由於與我們的產能和技術能力擴張相關的製造量和成本下降。這包括增加員工和相關管理費用，包括折舊費用，這將為近期和中期成長提供關鍵能力。

Margins during the three months and six months ended October 31, 2023, were also impacted by the decision to defer a customer's PPQ campaign until after our annual maintenance shut down, combined with a reduction of revenues for changes in estimated variable considerations under a contract where uncertainties have been resolved.

截至2023 年10 月31 日的三個月和六個月的利潤率也受到將客戶的PPQ 活動推遲到我們的年度維護關閉之後的決定的影響，以及合約項下估計變數考慮因素變化導致的收入減少，其中不確定性已經解決。

The decrease in gross margin for the first six months of fiscal '24 was further impacted by a terminated project relating to the insolvency of one of our smaller customers and a delay in our ability to recognize revenues of a customer product pending the implementation of a process change. Excluding all of these factors, our second quarter and year-to-date adjusted gross margin percentages would have been 2 percentage points and 1 percentage point lower than the reported gross margin percentages in the same prior year periods, respectively.

24財年前六個月毛利率的下降進一步受到與我們的一個較小客戶破產有關的終止項目的進一步影響，以及我們在執行流程之前確認客戶產品收入的能力的延遲改變。排除所有這些因素，我們第二季和年初至今的調整後毛利率百分比將分別比去年同期報告的毛利率百分比低2個百分點和1個百分點。

As disclosed previously, we expect the expansion-related costs will continue to affect near-term margins, especially the related increase in depreciation costs. Importantly, as we increase our capacity utilization, we will begin to absorb these increased costs, leading to improved gross profit.

如同先前所揭露的，我們預期與擴張相關的成本將繼續影響近期利潤率，特別是相關的折舊成本增加。重要的是，隨著我們提高產能利用率，我們將開始吸收這些增加的成本，從而提高毛利。

SG&A expenses for the second quarter of fiscal '24 were $6.6 million, a decrease of 4% compared to $6.8 million recorded in the second quarter of fiscal '23. The decrease in SG&A for the second quarter was primarily due to a decrease in payroll and benefit expenses, and other professional fees.

24 財年第二季的銷售、管理及行政費用為 660 萬美元，比 23 財年第二季的 680 萬美元下降了 4%。第二季銷售管理費用的減少主要是由於薪資和福利費用以及其他專業費用的減少。

SG&A expenses for the first six months of fiscal '24 were $12.8 million, a decrease of 3%, compared to $13.2 million recorded in the prior-year period. The decrease in SG&A for the six months was primarily due to decreases in legal, accounting, and other professional fees.

2024 財年前六個月的銷售、管理及行政費用為 1,280 萬美元，較上年同期的 1,320 萬美元下降了 3%。這六個月的銷售管理費用減少主要是由於法律、會計和其他專業費用的減少。

During the second quarter of fiscal '24, the company's net loss was $9.5 million or $0.15 per basic and diluted share, compared to a net loss of $1.2 million or $0.02 per basic and diluted share for the second quarter of fiscal '23.

在2024財年第二季度，該公司的淨虧損為950萬美元，或每股基本股和稀釋股0.15美元，而23財年第二季的淨虧損為120萬美元，或每股基本股和稀釋股0.02美元。

For the first six months of fiscal '24, the company recorded a net loss of $11.6 million or $0.18 per basic and diluted share, as compared to net income of approximately $400,000 or $0.01 per basic and diluted share during the same prior-year period.

在24 財年的前六個月，該公司錄得淨虧損1,160 萬美元，即每股基本股和稀釋股0.18 美元，而上年同期淨利潤約為40 萬美元，即每股基本股和稀釋股0.01 美元。

For the second quarter of fiscal '24, the company had an adjusted EBITDA of negative $6 million. For the first six months of fiscal '24, the company had an adjusted EBITDA of negative $3.2 million.

2024 財年第二季度，該公司調整後的 EBITDA 為負 600 萬美元。 2024 財年的前六個月，該公司調整後的 EBITDA 為負 320 萬美元。

Our cash and cash equivalents on October 31, 2023, were $31.4 million, compared to $38.5 million on April 30, 2023. The second-quarter cash and cash equivalents balance represents a 26% increase, compared to $24.9 million at the end of the first quarter of fiscal '24. As of the end of the second quarter, we estimate our remaining fiscal '24 expansion-related capital expenditures to be approximately $2 million.

截至2023 年10 月31 日，我們的現金及現金等價物餘額為3,140 萬美元，而2023 年4 月30 日為3,850 萬美元。第二季現金及現金等價物餘額增加了26%，而第一季末為2,490 萬美元。24 財年 季度。截至第二季末，我們估計 24 財年與擴張相關的剩餘資本支出約為 200 萬美元。

In other financial news, during the quarter, the company entered into an amendment to its revolving credit agreement with Bank of America. This credit facility was amended to extend the maturity date to October 2024, from the initial maturity of March 2024. This amendment also included an increase in the related interest rate applied to any borrowings under the revolver and increase the allowable amount of indebtedness the company can incur at any one time for fixed or capital assets.

在其他財經新聞中，該公司在本季度與美國銀行簽訂了循環信貸協議修正案。該信貸安排經過修訂，將到期日從2024 年3 月的初始到期日延長至2024 年10 月。該修訂還包括提高循環貸款項下任何借款的相關利率，並增加公司可允許的債務金額.固定資產或資本資產在任何時候發生。

The other material terms of the credit agreement remained unchanged. While the company has no current plans to draw down on this facility, Avid view this instrument as a valuable tool to ensure financial stability.

信貸協議的其他重要條款維持不變。雖然該公司目前沒有動用該貸款的計劃，但 Avid 認為該工具是確保財務穩定的寶貴工具。

This concludes my financial overview. I will now turn the call over to Matt for an update on commercial activities during the quarter.

我的財務概述到此結束。我現在將把電話轉給馬特，以了解本季商業活動的最新情況。

Thanks, Dan. I am pleased to report that our commercial team had another strong quarter. During the period, Avid recorded bookings of $35 million from new and existing customers, including a meaningful contract signed for the recently completed CGT facility. The company ended the quarter with a record backlog of $199 million, representing an increase of 35%, as compared to $147 million at the end of the second quarter of fiscal 2023.

謝謝，丹。我很高興地報告，我們的商業團隊又取得了強勁的季度業績。在此期間，Avid 來自新舊客戶的預訂額達 3500 萬美元，其中包括為最近竣工的 CGT 設施簽署的一份有意義的合約。該公司本季末的積壓訂單達到創紀錄的 1.99 億美元，較 2023 財年第二季末的 1.47 億美元成長 35%。

While certain early-stage projects in our pipeline remain on hold pending customer financing events, we continue to see growth in our later stage and commercial project portfolio during the quarter. As a reminder, later-stage projects are generally larger and take longer to complete as compared to earlier-stage programs.

雖然我們管道中的某些早期項目仍處於擱置狀態，等待客戶融資事件，但我們在本季繼續看到後期和商業項目組合的成長。提醒一下，與早期階段的專案相比，後期專案通常規模更大，完成時間更長。

For that reason, we expect that recognition of our backlog for these projects will extend beyond one year. As these later-stage programs have significantly higher probability of regulatory approval in a shorter timeframe, we believe they are more likely to generate the recurring and ramping commercial revenues associated with such approval. While there is no guarantee that regulatory approval will be achieved for any program, we do believe that our pipeline which remains weighted toward later-stage projects, offers enhanced opportunity for regulatory success, and ultimately, for stable growth in the medium to long term.

因此，我們預計對這些項目積壓的認可將持續一年以上。由於這些後期項目在更短的時間內獲得監管部門批准的可能性明顯更高，我們相信它們更有可能產生與此類批准相關的經常性和不斷增長的商業收入。雖然不能保證任何項目都會獲得監管部門的批准，但我們確實相信，我們的管道仍然側重於後期項目，為監管成功提供了更多機會，並最終為中長期穩定增長提供了更多機會。

We are pleased to see continued growth in this segment of our backlog and remain committed to pursuing and supporting projects at every stage of development and manufacturing. We are, in fact, seeing some improvement in our early-stage pipeline. We remain fully engaged with new and prospective customers at every phase and continue to build visibility for the Avid brand through consistent outreach and industry events.

我們很高興看到這部分積壓訂單持續成長，並繼續致力於在開發和製造的每個階段追求和支援專案。事實上，我們看到早期管道有所改善。我們在每個階段都與新客戶和潛在客戶充分互動，並透過持續的外展和行業活動繼續提高 Avid 品牌的知名度。

As Nick mentioned previously, Avid joined the CIRM Industry Resource Partner Program to provide development and CGMP manufacturing services to CIRM-funded programs. Currently, CIRM has $5.5 billion in funding from the State of California and has more than 161 active stem-cell programs in their portfolio. Avid will assist CIRM's partners in accelerating gene therapy development and manufacturing through its suite of CDMO services, which span process and analytical development, cell banking, virus banking, drug substance manufacturing, and cell finish activities.

正如 Nick 之前提到的，Avid 加入了 CIRM 行業資源合作夥伴計劃，為 CIRM 資助的專案提供開發和 CGMP 製造服務。目前，CIRM 擁有來自加州的 55 億美元資金，其投資組合中有超過 161 個活躍的幹細胞計畫。 Avid 將透過其 CDMO 服務套件協助 CIRM 的合作夥伴加速基因療法的開發和製造，這些服務涵蓋製程和分析開發、細胞庫、病毒庫、原料藥製造和細胞完成活動。

CIRM-funded programs will be offered access to Avid services in order to reduce the timelines required to advance through clinical development. All partnership activities will be performed at Avid's recently launched world-class CGT manufacturing facility. We are very pleased to have entered this validating partnership with CIRM, which we believe will further strengthen our presence broadly among CDMOs, and more specifically, as a manufacturer of CGT products.

CIRM 資助的計畫將能夠使用 Avid 服務，以縮短推進臨床開發所需的時間。所有合作活動都將在 Avid 最近推出的世界級 CGT 製造工廠進行。我們很高興與 CIRM 建立這種有效的合作夥伴關係，我們相信這將進一步加強我們在 CDMO 中的廣泛地位，更具體地說，作為 CGT 產品製造商。

In closing, I'd like to reiterate how pleased we are with the commercial team's performance during the second quarter, and we are looking ahead with optimism to the second half of the year.

最後，我想重申我們對商業團隊在第二季的表現感到非常滿意，並且我們對下半年充滿樂觀。

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 period.

我對商業活動的概述到此結束。我現在將把電話轉回給尼克，以了解該期間運營和其他成就的最新情況。

Thanks, Matt. I will provide an overview of the company's operational activities. First, Avid successfully executed its planned annual maintenance shutdown during the quarter. While this temporary shutdown contributes to the lower revenues for the period, and it has been in prices, it is an essential activity to ensure the efficiency of our systems. And we are very pleased to have this process complete for another year.

謝謝，馬特。我將概述公司的營運活動。首先，Avid 在本季度成功執行了計劃中的年度維護停機。雖然這種暫時關閉導致了這段時期的收入下降，並且影響了價格，但這是確保我們系統效率的重要活動。我們很高興這過程又持續了一年。

As we announced in October, we have completed the construction of our cell and gene therapy manufacturing suites on schedule. These newly launched suites which are housed within the company's new world-class CGT development and manufacturing facility, are currently undergoing final environmental monitoring and performance qualification.

正如我們在 10 月宣布的那樣，我們已按計劃完成了細胞和基因治療製造套件的建造。這些新推出的套件位於該公司新的世界級 CGT 開發和製造工廠內，目前正在進行最終的環境監測和性能鑑定。

With the completion of this latest expansion project, Avid has now completed all phases of a broad multi-year expansion and will have deployed upwards of approximately $180 million of capital from 2020 to 2023 into expansions of both revenue-generating capacity and technical capabilities. Looking ahead, we are now well positioned to meet the manufacturing needs of current and future customers, advancing both mammalian and CGT products.

隨著這項最新擴建項目的完成，Avid 現已完成了廣泛的多年期擴建的所有階段，並將在2020 年至2023 年期間部署約1.8 億美元以上的資本，用於擴大創收能力和技術能力。展望未來，我們現在已做好充分準備，可以滿足當前和未來客戶的製造需求，並推動哺乳動物和 CGT 產品的發展。

Today, we estimate that our combined facilities have the potential to bring our total revenue generating capacity to up to $400 million annually, more than triple the revenue generating capacity of our pre-expansion business. And while the operating costs associated with these facilities and service expansions have impacted our margins, we believe this new infrastructure has been a major contributor in attracting the later-phase projects currently in our backlog, as well as positioning Avid to serve a large pharma segment of the market previously underserved by the business.

如今，我們估計合併後的設施有潛力使我們的總創收能力達到每年 4 億美元，是我們擴張前業務創收能力的三倍多。雖然與這些設施和服務擴張相關的營運成本影響了我們的利潤，但我們相信，這項新的基礎設施是吸引目前積壓的後期項目以及使 Avid 服務於大型製藥領域的主要貢獻者以前業務服務不足的市場。

This strategy is already paying off, demonstrated by the increasing customers with whom we work, aligned with a strong weight towards later phase. Further, we are now beginning to onboard projects for utilizing the capabilities offered by our C&GT services. When we combine Avid's new capacity and services with decades of experience in biologics and commercial manufacturing, a track record that demonstrates our focus on quality and the talent spanning early-stage development through commercialization, we believe we have established an organization and brand that will continue to thrive in this growing and attractive market.

這項策略已經取得了成效，與我們合作的客戶數量不斷增加，並與後期階段保持一致，這證明了這一點。此外，我們現在開始啟動利用我們的 C&GT 服務提供的功能的專案。當我們將Avid 的新產能和服務與數十年的生物製劑和商業製造經驗（這一記錄證明了我們對品質的關注以及從早期開發到商業化的人才）相結合時，我們相信我們已經建立了一個將繼續發展的組織和品牌在這個不斷成長且有吸引力的市場中蓬勃發展。

Not only did the quarter see the completion of our current expansion program, it also saw the cessation of manufacturing in the company's legacy small-scale stainless steel facility. And while the effect of this impacted the second quarter, as we look forward, Avid now benefits from all its mammalian GMP manufacturing under a single roof, with one of the most modern and high-quality facilities available in the industry. This will further enhance the company's ability to improve margins as we continue the process of growing Avid and filling this capacity.

本季我們不僅完成了目前的擴張計劃，也停止了公司原有的小型不銹鋼工廠的生產。雖然這一影響影響了第二季度，但正如我們所期望的，Avid 現在受益於其所有哺乳動物 GMP 生產在一個屋簷下，並擁有業內最現代化和高品質的設施之一。隨著我們繼續發展 Avid 並填補這一產能，這將進一步增強公司提高利潤的能力。

As we are all more than aware, the downturn in the biotech funding has certainly impacted the business in the short. This, combined with other factors we have reported, has led to a disappointing first half of fiscal 2024. And as a result, we are compelled to amend guidance to $137 million to $147 million.

我們都非常清楚，生技融資的低迷肯定會在短期內影響業務。再加上我們報告的其他因素，導致 2024 財年上半年業績令人失望。因此，我們被迫將指導意見修改為 1.37 億美元至 1.47 億美元。

That being said, as we look forward, we have an improved cash position, we have seen an increase in our early phase signings during the second quarter, we have completed all our current expansion activities, enter the second half with our backlog at an all-time high, and one of the products in our late-stage pipeline has already received FDA approval. As we look more closely at the second half of the year, we anticipate revenues approximating half two of fiscal-year 2023, which represents the best half-year performance in our company's history.

話雖這麼說，正如我們展望的那樣，我們的現金狀況有所改善，我們看到第二季度的早期簽約有所增加，我們已經完成了當前所有的擴張活動，進入下半年，我們的積壓訂單全部增加。-創歷史新高，我們後期研發管線中的一款產品已經獲得 FDA 批准。當我們更仔細地觀察今年下半年時，我們預計收入約為 2023 財年下半年的收入，這代表了我們公司歷史上最好的半年業績。

As we approach the end of our 30th year, we are delighted to mark the completion of what has been a three-year program of increasing capacity, modernizing the asset base, as well as transforming the capabilities of the mammalian business, and at the same time, broadening the Avid offering to include the new C&GT capabilities in both process development and now, GMP manufacture. Also, during our 30th year, we look back at where we came from as we retire the old stainless reactors, which marked the start of our CDMO business and close to 20 years of commercial manufacture.

在我們成立 30 週年之際，我們很高興地宣布完成了一項為期三年的計劃，該計劃旨在提高產能、實現資產基礎現代化以及轉變哺乳動物業務的能力，同時時間，擴大了Avid 產品範圍，將新的C&GT 功能納入製程開發和現在的GMP 製造中。此外，在我們的第 30 個年頭，當我們淘汰舊的不銹鋼反應器時，我們回顧了我們的出發點，這標誌著我們 CDMO 業務的開始和近 20 年的商業製造。

While 2023 has had its challenges, the team has worked diligently in pursuit of our goal. As we enter calendar 2024, Avid is a company with 30 years in biologics manufacturing, a 21-year regulatory track record, and more than 200 commercial batches under our belt, operating out of a modern asset base with capacity to accommodate commercial needs of our late-phase clinical programs, some of which we hope will soon become commercial products and a business with an increasingly diverse customer base and pipeline. While there will be much of 2023 we will be happy to put behind us, it would not surprise me that we look back at this year as the start of a new phase, not only in how our company looks, but also in the market which we serve.

儘管 2023 年充滿挑戰，但團隊一直在努力實現我們的目標。當我們進入 2024 年時，Avid 是一家擁有 30 年生物製品製造經驗、21 年監管記錄和 200 多個商業批次的公司，其現代化資產基礎能夠滿足我們的商業需求。後期臨床項目，我們希望其中一些專案能夠很快成為商業產品，並成為擁有日益多樣化的客戶群和管道的業務。雖然2023 年的大部分時間我們都會很高興地拋在身後，但當我們回顧今年作為一個新階段的開始時，我並不感到驚訝，不僅是在我們公司的外觀上，而且在市場上也是如此。我們服務。

I feel genuinely blessed to work with a team that has shown the fortitude to undertake such a monumental task, and one that has not wavered one bit in the pursuit of the targets we set ourselves. And I look forward with a high level of excitement at the prospect of filling this capacity and continuing to guide the future development of Avid.

我真的很幸運能夠與一支表現出承擔如此艱鉅任務的毅力的團隊一起工作，並且在追求我們自己設定的目標的過程中沒有絲毫動搖。我對填補這一職位並繼續指導 Avid 未來發展的前景感到非常興奮。

This concludes my prepared remarks for today. We can now open up the call for questions. Operator?

我今天準備的發言到此結束。我們現在可以開始提問。操作員？

Certainly. (Operator Instructions) Jacob Johnson, Stephens Inc.

當然。 （操作員說明）Jacob Johnson，Stephens Inc.

Hey, thanks. Good afternoon. Maybe, Nick, leading off or starting off where you just left off. I guess, can you -- on the backlog and the Q2 revenue and the '24 outlook. So pretty good bookings in the quarter, record backlog, but revenues down year over year. Can you just help us square those two items?

嘿，謝謝。午安.也許，尼克，從你剛剛停下的地方開始。我想，你能——關於積壓訂單、第二季收入和 24 年前景嗎？本季的預訂量相當不錯，積壓創歷史新高，但營收年減。你能幫我們計算這兩項的平方嗎？

And I guess along those same lines, you keep pointing to the backlog extending beyond a year. Has that backlog lengthened, like extended even further? Is it taking even longer to close that, or are we just waiting for things like this PPQ campaign to hit? I know that's a lot, but I'll stop there with the first question.

我猜想，沿著同樣的思路，你一直指出積壓工作已經超過一年了。積壓的時間是否延長了，甚至進一步延長了？是否需要更長的時間才能結束，或者我們只是在等待像 PPQ 活動這樣的事情發生？我知道很多，但我就先說第一個問題。

No. Thanks very much, Jacob, and good question. First, to answer your last question, has the backlog extended? The answer to that is no. Pretty much, it's stable in terms of where it is, so certainly, no further spread.

不，非常感謝，雅各布，這是個好問題。先回答你的最後一個問題，積壓的時間是否延長了？答案是否定的。就其所在位置而言，它幾乎是穩定的，因此當然不會進一步傳播。

I think, at the end of the day, what we've seen here apart from some of the things that Dan highlighted in the earnings in the first half obviously, is the impact of the biotech defunding. But we'll continue to sign the business, and then, it really is a matter of bringing through those late-phase programs, which are just a lot bigger in size and take longer to execute and you've got to line them up.

我認為，歸根結底，除了丹在上半年收益中強調的一些事情之外，我們在這裡看到的顯然是生物技術撤資的影響。但我們將繼續簽署業務，然後，這確實是實施這些後期專案的問題，這些專案的規模更大，執行時間更長，你必須將它們排列起來。

So we've got -- I mean, I recently published on the website, our investor presentation, which shows you a good indication of the maturity of the pipeline that we have. And simply to put large volumes of material into that new asset, one has to, first of all, obviously, attract the customer. The second thing then is to execute on the PPQ campaign, which ultimately, will lead to a BLA filing, and then, the commercial volumes that come after that.

所以我們——我的意思是，我最近在網站上發布了我們的投資者演示文稿，它向您展示了我們現有管道的成熟度。為了將大量材料投入新資產中，顯然首先必須吸引客戶。第二件事是執行 PPQ 活動，最終將導致 BLA 備案，然後是隨後的商業量。

And I think that, for those of us that are in the market on a day-to-day basis, is that there's just unfortunately, a natural time phase that that takes to execute. And once you've completed the PPQ campaign, you have to file that data along with the clinical data to the FDA and get approval, and then, the commercial volumes come.

我認為，對於我們這些每天都在市場上工作的人來說，不幸的是，執行需要一個自然的時間階段。一旦完成 PPQ 活動，您必須將這些數據與臨床數據一起提交給 FDA 並獲得批准，然後，商業量就會到來。

And of course, one of the other issues is, of course, nobody's going to put a PPQ campaign together with a supplier that doesn't have that capacity to meet the commercial demand. So it's really just a transition of the business as we've been trying to highlight from what was originally a clinical company that was with a significant large commercial demand into one that's got a very much more diverse customer base with a significant number of late-phase programs, which we're just trying to get executed, get that data off, and then, obviously, I look forward to at least an industry average of commercial approvals that we can then execute against.

當然，其他問題之一是，沒有人會與沒有能力滿足商業需求的供應商一起進行 PPQ 活動。因此，這實際上只是業務的轉變，因為我們一直在努力強調，從最初是一家擁有大量商業需求的臨床公司，轉變為擁有更加多樣化的客戶群和大量後期客戶的公司。我們只是想執行階段計劃，獲取數據，然後，顯然，我期待至少獲得行業平均的商業批准，然後我們可以根據這些批准執行。

And actually, we couldn't have asked for a better situation than we've got right now, which is that as we're concerning one of those in, they've already got approval. So that's about as fast as it ever goes. So looking forward to that one.

事實上，我們不可能要求比現在更好的情況，那就是，當我們涉及其中之一時，他們已經獲得了批准。所以這幾乎是最快的。所以很期待那個。

Got it. Thanks for that, Nick. And then, maybe I guess for my follow up on what you just alluded to. I think in that deck, you suggest that these later-stage opportunities could be $100-million to $200-million revenue opportunities. I think the inevitable question is, what is the timeline for -- assuming all goes well, and I know that's impossible for any of us to handicap, but assuming all goes well, what -- is that a peak revenue that could be five years out? Or how should we think about the path to that revenue potential?

知道了。謝謝你，尼克。然後，也許我想跟進你剛才提到的內容。我認為在該套牌中，您建議這些後期機會可能是 1 億至 2 億美元的收入機會。我認為不可避免的問題是，假設一切順利的話，時間表是什麼，我知道我們任何人都不可能阻礙，但假設一切順利，那麼收入高峰可能是五年出去？或者我們該如何思考實現這收入潛力的途徑？

Well, again, without trying to get into each of the individual ones because they all have such different profiles, to be frank with you, in terms of the size of the market they serve and also the probability of success. So, I mean, you could have four out of eight, for example, getting approval. And if all four of those are small ones, then, the impact is not that great. If all four of those are the large ones, the impact is enormous, and then, there's all the different timelines. So that's a really difficult question to ask, but to answer rather.

好吧，再說一次，不要試圖深入了解每個單獨的公司，因為坦白說，就他們所服務的市場規模以及成功的可能性而言，他們都有不同的概況。所以，我的意思是，例如，八分之四可能會獲得批准。如果這四個都是小問題，那麼影響力就沒那麼大了。如果這四個都是大的，那麼影響是巨大的，然後，就有了所有不同的時間表。所以這是一個很難提出但很難回答的問題。

But I think in general terms, you look at the growth that we've seen in this business in the past, I don't see -- we know the growth in the marketplace going forward and we know the capacity we've got. And you draw those lines and -- anywhere between, I think on the fast side would be three years to fill that capacity. On the longer side, you're probably looking at somewhere like six years. But anywhere in that window, I think is not unreasonable.

但我認為總的來說，你看看我們過去在這項業務中看到的成長，我沒有看到——我們知道市場未來的成長，我們知道我們擁有的能力。你畫了這些線，我認為最快需要三年時間才能填補這個容量。從較長的角度來看，您可能會看到大約六年的時間。但在那個窗口的任何地方，我認為都不是沒有道理的。

Obviously, we're aiming for as quickly as we possibly could. But it's -- the fact that we've got so many is really, really a good strong indicator to us that we will be filling that capacity.

顯然，我們的目標是盡快完成。但事實是，我們擁有如此多的資源，這對我們來說確實是一個很好的強有力的指標，表明我們將填補這一能力。

Got it. I'll leave it there. Thanks for taking the question.

知道了。我會把它留在那裡。感謝您提出問題。

Thanks, Jacob.

謝謝，雅各。

Thank you. Matt Hewitt, Craig-Hallum Capital Group LLC.

謝謝。馬特‧休伊特 (Matt Hewitt)，克雷格-哈勒姆資本集團有限責任公司。

Good afternoon. Thank you for taking the question. Maybe the first one, I think, Matt, I think you mentioned in your prepared remarks that you did win a nice cell-gene therapy contractor in the quarter. I'm assuming that's on the manufacturing side? Or is that development? And did that come through the new CIRM relationship?

午安.感謝您提出問題。也許是第一個，我想，馬特，我想你在準備好的發言中提到你確實在本季度贏得了一個不錯的細胞基因治療承包商。我假設這是在製造業方面？或者說這就是發展？這是透過新的 CIRM 關係實現的嗎？

That is an early-stage project, yes. And it's in our PD group and that's where it's going to span currently. There's potential in the future for that to grow, obviously, but the only piece that they've contracted for at this point until further development is the early-phase work.

是的，這是一個早期項目。它在我們的 PD 小組中，也是目前它要跨越的地方。顯然，未來有成長的潛力，但在進一步開發之前，他們目前簽約的唯一部分是早期階段的工作。

Got it. Thank you. And then --

知道了。謝謝。進而 -

It didn't come through CIRM, Matt, either. It was independent of CIRM.

馬特，它也不是透過 CIRM 獲得的。它獨立於 CIRM。

That's right. That's right. Sorry.

這是正確的。這是正確的。對不起。

Okay. I was going to say that was really quick when it came through the new partnership. All right. And then, Nick, last quarter, I think you said that you had actually won a competitive displacement. Those are my words, but you had won some business from a competitor from a large pharma customer and I'm curious, how has that business progressed? Is that opening up doors for other opportunities?

好的。我想說的是，當新的合作夥伴關係達成時，這真的很快。好的。然後，尼克，上個季度，我想你說過你實際上已經贏得了競爭性的替代。這是我的話，但您從一家大型製藥客戶的競爭對手那裡贏得了一些業務，我很好奇，該業務進展如何？這是否為其他機會打開了大門？

I'm trying to remember a competitor. We've certainly won business from large pharma and from competitors, but I don't know that we've won a large pharma bid from a competitor. I'm trying to think what that might have been. But, no, so I don't remember it being from a big pharma, Matt. I think we've done both of those, but not together.

我正在努力記住一個競爭對手。我們當然從大型製藥公司和競爭對手那裡贏得了業務，但我不知道我們是否從競爭對手那裡贏得了大型製藥公司的投標。我正在努力思考那可能是什麼。但是，不，所以我不記得它來自一家大型製藥公司，馬特。我認為我們已經完成了這兩件事，但不是一起完成的。

Understood.

明白了。

All I can say is that all our business with the ones that we've been winning have continued to progress well. So no issues on any of those.

我只能說，我們與我們贏得的所有業務都繼續進展順利。所以這些都沒有問題。

Okay. Thank you.

好的。謝謝。

Thanks, Matt.

謝謝，馬特。

Thank you. Paul Knight, KeyBanc Capital Markets Inc.

謝謝。 Paul Knight，KeyBanc 資本市場公司

Yeah. Dan, did you mention $2 million of CapEx remaining in the fiscal year?

是的。 Dan，您是否提到本財年剩餘 200 萬美元的資本支出？

I did. Yes, Paul.

我做到了。是的，保羅。

Okay.

好的。

And if I can break that down for you. So in the first half, we've spent $21 million on CapEx and we've incurred $8 million, which has now been spent. But outside of those dollars, we have an additional too to incur.

如果我能為你解釋一下的話。因此，上半年，我們在資本支出上花費了 2,100 萬美元，並產生了 800 萬美元，現在已支出。但除了這些錢之外，我們還需要承擔額外的費用。

What's the maintenance CapEx after this fiscal year?

本財政年度之後的維護資本支出是多少？

It's going to be really low. There's going to be some systems that we're going to need to continue to invest into. But as far as the assets, most of the assets are brand new. So we would likely be 2% ish, maybe sub 2% of revenues.

它會非常低。我們將需要繼續投資一些系統。但就資產而言，大部分的資產都是全新。因此，我們可能佔收入的 2% 左右，甚至低於 2%。

And your line of credit, the size on that?

你的信用額度有多大？

The size of our line of credit is $50 million.

我們的信貸額度為 5000 萬美元。

Okay. And then, Nick, on the cell and gene therapy portion of the business, Alliance Regenerative Medicine is showing finally some sequential growth in trial activity. Are you seeing that?

好的。然後，尼克，在業務的細胞和基因治療部分，聯盟再生醫學最終顯示出試驗活動的一些連續增長。你看到了嗎？

Yeah. I mean, we literally have just opened the GMP assets, Paul. So it's probably a little early to say that we are seeing -- what we're seeing is reflective of the market. I think we've seen some good engagement, and I think probably a lot of that is because we're here now and we've got the assets as opposed to a market indication. But we certainly have seen a good flurry of activity.

是的。我的意思是，我們確實剛剛開放了 GMP 資產，Paul。因此，現在說我們所看到的情況可能還為時過早——我們所看到的是市場的反映。我認為我們已經看到了一些很好的參與，我認為這可能很大程度上是因為我們現在在這裡並且我們擁有資產而不是市場跡象。但我們確實看到了一系列的活動。

Obviously, signing another client there is a meaningful one. It's also quite encouraging as we come out of the gate. And we have an ongoing engagement with a number of clients, so I'm certainly hoping that that's not going to be the last in the near future. So we are encouraged by what we generally hear in the marketplace, but I think we're hoping to see a lot more of that as we go forward, for sure.

顯然，在那裡簽下另一位客戶是有意義的。當我們走出大門時，這也非常令人鼓舞。我們與許多客戶保持著持續的接觸，所以我當然希望這不會是在不久的將來的最後一次。因此，我們對市場上普遍聽到的消息感到鼓舞，但我認為，隨著我們的前進，我們肯定希望看到更多這樣的消息。

And, Nick, I think, obviously, the industry issue for Avid has been centered around the lower level of early-stage biotech financing. Are there any other features that stand out in a positive or a negative way? As the capacity opening up globally, is that bad for you or does it not matter?

而且，尼克，我認為，顯然，Avid 的行業問題一直集中在較低的早期生物技術融資上。還有其他突出的正面或負面特徵嗎？隨著全球產能開放，這對您來說是壞事還是無關緊要？

And we've got a lot of approvals this year. I mean, what are the other factors that -- and then, last thing I would like, I think we all think about is, is there more insuring? So excluding biotech financing, do you think the market dynamics are better or worse for you right now?

今年我們獲得了很多批准。我的意思是，還有哪些其他因素——然後，我想我們大家都想到的最後一件事是，是否有更多的保險？因此，排除生技融資，您認為目前的市場動態對您來說是好還是壞？

So it's interesting. That's a good question, and thanks for asking that one, Paul. But it's -- just trying to look at where, how I'm looking at the marketplace as we sit today.

所以這很有趣。這是一個很好的問題，謝謝你提出這個問題，保羅。但它只是想看看我們今天在哪裡、如何看待市場。

I remember a few -- six months ago, start there at the end of a really good year where we were feeling really positive about what we'd just done. And then, I was looking forward at what was going on in the marketplace. And obviously, I had to report lower guidance going forward for the following year for the first time.

我記得有一些——六個月前，從一個非常好的一年結束時開始，我們對剛剛所做的事情感到非常積極。然後，我很期待市場上發生的事情。顯然，我必須首次報告下一年的較低指導。

As I sit here today, we're clearly not happy with the last quarter. And I don't think anybody around here is going to make any other calls on that one. But contrary to that position that we had last year, at the beginning of the year, I actually feel more positive now about what's coming forward.

當我今天坐在這裡時，我們顯然對上個季度不滿意。我認為這裡的任何人都不會再對這個電話打任何其他電話。但與我們去年年初的立場相反，我現在對未來的情況實際上感到更加積極。

So we've captured a good number of late-phase programs. A lot of those are coming to us from other CDMOs, which says that we're doing the right things. We've got those because we've got the capacity.

所以我們已經捕獲了大量的後期項目。其中很多來自其他 CDMO，這表明我們正在做正確的事情。我們擁有這些是因為我們有能力。

I can't control what happens in terms of FDA approval, I only wish I could. So I wish I could sit here and tell you which ones of those are going to go forward. But the number of Phase-3 programs I've got is not a lot different from the number of Phase-1 programs. I don't -- in my 40 years, I've never known that happen, so we're very buoyed by that.

我無法控制 FDA 批准方面發生的事情，我只希望我可以。所以我希望我能坐在這裡告訴你們其中哪些會繼續進行。但我拿到的第三階段項目數量與第一階段項目數量相差不大。我不知道——在我 40 年的時間裡，我從來不知道會發生這種事，所以我們對此感到非常鼓舞。

Again, I think, Matt, highlighted that in our signings that we've said, that we'd seen some early phase signings which were completely devoid in quarter one, which is, again, another positive sign. And we have some leading indicators in the conversations and the pipeline that we see behind that, and we've started to see some positivity there.

我認為，馬特再次強調，在我們所說的簽約中，我們看到了一些早期階段的簽約，這些簽約在第一季完全沒有，這又是另一個積極的跡象。我們在對話和背後的管道中看到了一些領先指標，我們已經開始看到一些積極的一面。

I'm not going to turn around and tell you that there's a recovery and there's an enormous tidal wave coming, that's not the case. But I do think that we see a much more positive outlook going forward. And if we hit the guidance that we've just given, which we obviously would intend to do because that's what we've just provided, that would be similar to the back end of last year. And if we can hit the record revenues that we saw at the end of '23, and then, continue that, then, I think we're -- as I say at the beginning, we have a much more positive feeling to the business and the industry today than I did six months ago.

我不會轉身告訴你，經濟正在復甦，巨大的浪潮即將到來，事實並非如此。但我確實認為我們未來的前景會更加積極。如果我們達到剛剛給出的指導（我們顯然打算這樣做，因為這就是我們剛剛提供的），那將與去年年底類似。如果我們能夠達到 23 年底的創紀錄收入，然後繼續下去，那麼，我認為我們——正如我一開始所說的那樣，我們對業務有更積極的感覺和我六個月前相比，今天的行業。

All right. Thank you.

好的。謝謝。

Thank you. Max Smock, William Blair & Company, L.L.C.

謝謝。馬克斯‧斯莫克 (Max Smock)，威廉‧布萊爾公司有限責任公司

Hey. Good afternoon. Thanks for taking our questions. Maybe just starting off here, I was wondering if you can give some more detail around what exactly the change in estimated variable consideration under a contract where uncertainties have been resolved relates to? And what the impact was in the quarter?

嘿。午安.感謝您回答我們的問題。也許只是從這裡開始，我想知道您是否可以提供更多細節，以了解不確定性已解決的合約下估計可變對價的變化究竟與什麼相關？本季的影響是什麼？

And then, similarly, what was the impact of your customers' decision to defer that PPQ campaign until after annual maintenance shutdown? And is that campaign now ongoing?

然後，同樣，您的客戶決定將 PPQ 活動推遲到年度維護停機之後會產生什麼影響？該活動現在正在進行中嗎？

Sure, Max. I'll start off with that. So the change of variable consideration is another way to say that it was a change in estimate where the revenue recognized on certain programs was less than originally estimated at the beginning of that project. Under 606 revenue rec rules, were percentage of completion shops, so some of those estimates can change during the period.

當然，馬克斯。我將從這個開始。因此，可變對價的變化是另一種說法，即估計的變化，即某些項目確認的收入低於該項目開始時的最初估計。根據 606 收入記錄規則，是完工車間的百分比，因此其中一些估計值可能會在此期間發生變化。

So the impact of that in the quarter was roughly $2 million of gross profit, so around 8 percentage points. And as far as the deferral, deferral was a similar gross profit hit of roughly 8 percentage points, and as far as the batches themselves. Nick, I don't know if you want?

因此，本季毛利的影響約為 200 萬美元，即 8 個百分點左右。就延期而言，就批次本身而言，延期對毛利造成了類似的影響，約下降了 8 個百分點。尼克，不知道你願不願意？

Yeah. No. I mean, the decision was a mutual decision. PPQ campaigns are something where you're executing three batches identical. That's always a lot easier when you do them back to back to back. Where we were was that we would have had to split those across the shutdown, which we felt was better not to do that and keep them all in line, or otherwise, we would have had to move the shutdown, which again, was not an ideal situation.

是的。不，我的意思是，這個決定是一個共同的決定。 PPQ 活動是指您執行三批相同的活動。當你背對背地做這些事情時，這總是容易得多。我們當時的情況是，我們必須將關閉期間的這些分開，我們認為最好不要這樣做，並使它們全部保持一致，否則，我們將不得不移動關閉，這又不是一個理想的情況。

So it was a mutual decision between us and the customer. The program's now up and ongoing and going as planned. So again, not what we ideally would have wanted to do, but I would always prefer to run a PPQ with three batches literally back to back.

所以這是我們和客戶之間的共同決定。該計劃現已啟動並正在按計劃進行。再說一次，這不是我們理想中想要做的，但我總是更喜歡連續運行三批 PPQ。

Got it. That's helpful. Maybe just asking a follow up to Jacob's earlier in terms of the backlog. I'm just wondering how confident are you in the actual quality of that work that you have in backlog? If there's any detail you can provide around what portion of your backlog is currently on hold and how that relates to maybe last quarter when we spoke? And just in general, how you would characterize your visibility into whether or not that work is going to actually start to move forward here again, in the near future? Thank you.

知道了。這很有幫助。也許只是問雅各之前在積壓方面的後續情況。我只是想知道您對積壓工作的實際品質有多大信心？您是否可以提供任何詳細信息，說明您積壓的哪些部分目前處於擱置狀態，以及這與我們交談時的上個季度有何關係？總的來說，您如何描述您對這項工作是否會在不久的將來再次真正開始向前推進的可見性？謝謝。

Yeah. Our backlog typically converts at, I would say, north of 95%, and probably, closer towards 100% on that one. So we really -- it's firm business. There's none of it on hold as per se.

是的。我想說，我們的積壓訂單通常轉換率超過 95%，甚至可能更接近 100%。所以我們確實——這是一項堅定的業務。就其本身而言，沒有任何事情被擱置。

I do know -- I know of one program that I got news of last week that's actually been brought forward. So when Dan articulates that it's not getting any longer, in part, I might argue that there's a little bit of a pull in there. But there's always a little bit of switching, swell forward and backwards, but no material change. And certainly, from a conversion perspective, we expect the vast majority, as I said, more than 95%, if not closer to 100% of that to execute.

我確實知道——我知道上週我收到消息的一個項目實際上已經提前了。因此，當丹明確表示它不會再變長時，我可能會認為其中有一點吸引力。但總是有一點點的轉換，向前和向後膨脹，但沒有實質的變化。當然，從轉換的角度來看，正如我所說，我們預計絕大多數（如果不是接近 100%）都會被執行。

Okay. And then, if I could just sneak one more in here.

好的。然後，如果我能再偷偷溜進來一次就好了。

Yeah.

是的。

I think previously when we talked, Nick, you talked about holding backlog flat year over year as being a win here in fiscal '24. It's actually stepped up a little bit relative to where you're at, at the end of last year, just because revenue is a little bit light here in the quarter. But wondering how you're thinking about the outlook for bookings growth in the back half of the year, giving your commentary in particular around seeing a return of early-stage projects in the mix during the quarter? And whether or not you're still thinking about flat backlog year over year as the goal for fiscal 2024?

尼克，我想之前我們談話時，您談到將積壓訂單逐年持平是 24 財年的勝利。實際上，相對於去年年底的情況，它有所增加，只是因為本季的收入有點少。但想知道您如何看待下半年預訂量成長的前景，特別是對本季早期專案的回歸發表評論？您是否仍在考慮將積壓量逐年持平作為 2024 財年的目標？

Yeah. I mean, my crystal ball's a little cloudy on that one. The difficulty I have, Max, is that, signing from quarter to quarter as we've talked in the past, and I've mentioned also publicly, is its lumpy. We do -- we've seen 69 million signings in a quarter, and I think I've seen 29 million signings in a quarter. So it can be very erratic.

是的。我的意思是，我的水晶球在那一個上有點渾濁。麥克斯，我遇到的困難是，正如我們過去討論過的那樣，從一個季度到另一個季度簽約，而且我也公開提到過，它是不穩定的。我們確實做到了——我們在一個季度內簽下了 6900 萬份合同，我想我在一個季度內簽下了 2900 萬份合約。所以它可能非常不穩定。

I think, to be frank with you, if we can hold the backlog where we mentioned before, would be -- it would still be a reasonable result. I would say that there's a bit of optimism. But again, some of these are -- some of the opportunities that we're talking on and working on are quite significant, and they're binary.

坦白說，我認為，如果我們能夠控制我們之前提到的積壓，這仍然是一個合理的結果。我想說的是，有一點樂觀。但同樣，其中一些是——我們正在討論和正在努力的一些機會非常重要，而且它們是二元的。

When you come second, you don't get 30% or 60%, you get zero. 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.

當你獲得第二名時，你不會得到 30% 或 60%，你會得到零。因此，由於不穩定性，短期內預測情況總是有點困難，但我認為我們的觀點不一定會改變。但如果它要走向任何地方，它肯定會上升而不是下降，我會說。

Got it. Thank you again for taking our questions.

知道了。再次感謝您接受我們的提問。

No problem. Thanks for the questions.

沒問題。感謝您的提問。

Thank you. Sean Dodge, RBC Capital Markets

謝謝。肖恩道奇，加拿大皇家銀行資本市場

Hey, good afternoon. This is Thomas Kelliher, on for Sean. Thanks for taking the question. 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 are there one-time items we need to consider?

嘿，下午好。我是托馬斯·凱利赫（Thomas Kelliher），代表肖恩（Sean）。感謝您提出問題。只給我一個。在毛利率方面，我們該如何考慮今年剩餘時間的毛利率進展？您是否可以指出任何具體細節，或者是否有我們需要考慮的一次性項目？

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.

是的，托馬斯。因此，撇開上半年不談，下半年的收入水平仍然會達到指導中點，仍然與我們今年和上季度討論的類似。今年的額外成本和額外折舊將對毛利率產生影響，這將使其進入十幾歲左右的區域，我預計這將是加上或減去十幾歲左右的區域，因為你下半年達到了這一頂線。因此，這將在上半年稀釋。

All right. Appreciate it. Thanks, Dan. I'll leave it there.

好的。欣賞它。謝謝，丹。我會把它留在那裡。

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.

謝謝。今天節目的問答環節到此結束。我想將程序交還給尼克·格林以供進一步評論。

Yes. Thank you, Operator, and thank you to everybody participating on today's call. As we approach the end of calendar '23, 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 '24 will hold for the business.

是的。謝謝接線員，也謝謝參加今天電話會議的所有人。隨著 23 日曆年即將結束，我們對本財年下半年和 2024 年初持樂觀態度。抱歉，24 年初將對業務產生什麼影響。

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.

我們認為該業務處於有利位置，可以從營運中產生現金，並且在短期內可以實現可持續盈利。我們感謝客戶的信任和合作關係，感謝投資者的持續支持，並感謝繼續推動成功的傑出員工。再次感謝您今天的參與以及對 Avid Bioservices 的持續支持。

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

女士們、先生們，感謝你們參加今天的會議。這確實結束了該程式。您現在可以斷開連線。再會。