Ladies and gentlemen, welcome to the Avid Bioservices first quarter fiscal 2023 financial results conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session and instructions will follow at that time. As a reminder, this call may be recorded. I would like to hand the conference over to Tim Brons of Avid Investor Relations Group. Please go ahead. 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. 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 July 31, 2022. After our prepared remarks, we will welcome your questions. Before we begin, I'd like to caution that comments made during this conference call today, September 6, 2022, 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. 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 of the company's filings with the Securities and Exchange Commission concerning these and other matters. Our earnings press release in 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. With that, I will turn the call over to Nick Green, Avid's President and CEO. Thank you, Tim, and thank you to everyone who has dialed in and to those who are participating today via webcast. I am pleased to report that the momentum and growth achieved during fiscal 2022 continued into the first quarter of fiscal 2023. During the period, we achieved the highest quarterly revenue in the company's history. In connection with this achievement, our commercial team had another exceptional quarter, signing multiple new project agreements, and as a result, pushed our backlog to a new record level. With respect to our facilities, our expansion work continues to progress according to schedule. During the first quarter, we initiated equipment validation in our Myford South facility and continued to advance construction of our cell and gene therapy facility, which included launching our analytical and process development capabilities for this business. During the period, we also announced the expansion of our process development capabilities for the mammalian cell business, which we expect to come online in quarter 1 of calendar 2023. Matt and I will provide additional details on the business development and operations for the period following an overview of our first quarter fiscal 2023 financial results. For that, I'll turn the call over to Dan. Thank you, Nick. Before I begin, in addition to the brief financial overview I'll provide on the call today, additional details on our first quarter fiscal 2023 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. I'll now provide an overview of our financial results from operations for the first quarter ended July 31, 2022. Revenues for the first quarter of fiscal 2023 were $36.7 million, representing a 19% increase compared to $30.8 million recorded in the prior year period. The increase in revenues for the quarter can primarily be attributed to an increase in manufacturing revenues as compared to the prior year period. Gross margin for the first quarter of fiscal 2023 was 25% compared to a gross margin of 37% for the first quarter of fiscal 2022, which benefited from the receipt of unutilized capacity fees of $3.3 million. Factors impacting the gross margin for the first quarter of fiscal 2023 were primarily from increases in costs associated with the growth of our business and our facility expansions, including compensation and benefit expenses, as well as increases in facility and related expenses, partially offset by higher revenues during the period. Given our ongoing expansions, we believe that margins may continue to be affected in the coming quarters. Excluding the prior year's margin benefit from unutilized capacity fees and the current quarter's increase in costs associated with the establishment of our cell and gene therapy business and ahead of our mammalian capacity expansion, including the company's increasing headcount and incremental depreciation from recently released facility expansions, our first quarter gross margin was on par with the same period the prior year. Total SG&A expenses for the first quarter of fiscal 2023 were $6.4 million, an increase of 42% compared to $4.5 million recorded in the first quarter of fiscal 2022. The increase in SG&A for the quarter was primarily due to compensation and benefit expenses, facility-related expenses, and legal and accounting fees. For the first quarter of fiscal 2023, the company recorded net income of $1.6 million or $0.03 per basic and $0.02 per diluted share, which for the first time starting in fiscal 2023, includes a provision for income taxes as recorded within the company's income statement, as compared to a net income of $6.3 million or $0.10 per basic and diluted share for the first quarter of fiscal 2022. For the first quarter, the company achieved an adjusted EBITDA of $6.2 million. The adjusted EBITDA increased 5% sequentially over the fourth quarter of fiscal 2022. Our cash and cash equivalents on July 31, 2022 were $115.1 million compared to $126.2 million on April 30, 2022. This concludes my financial overview. I'll now turn the call over to Matt for an update on commercial activities during the quarter. Thanks, Dan. Dan. I am pleased to report that during the first quarter, our commercial team continued to be highly productive. As discussed during the last call, over the last few months, we have made substantial changes to our commercial organization, including the doubling of the size of our sales team, with additions in both our mammalian and our cell and gene therapy businesses. This new team is working exceptionally well together and focusing on ensuring Avid's continued growth and success. During the quarter, our team signed $41 million in new project orders, with a significant portion coming from new customers. As a result of this performance, Avid's backlog again reached a new company high, ending the quarter at $157 million. This backlog represents a 43% increase compared to the backlog of $110 million at the end of the first quarter of fiscal 2022. We expect to recognize most of our current backlog over the next 12 months, and notably, this backlog contains no COVID-related business. We believe that our success in bringing multiple new customers to Avid during the quarter validates both the investment in our new team and the execution of our commercial plan. Our strategy prioritizes the leading biotechnology regions in North America, and we continue to expand our outreach and presence in these key markets. Our team is active at conferences and is working to promote our industry experience with single-use technology, regulatory matters, as well as clinical and commercial manufacturing. In summary, I am very pleased with the commercial results for the quarter. Our new business wins were strong, further expanding and diversifying our client base, and the company ended the quarter with its highest backlog to date. We believe this showcases the talent of our team and the promise of our strategy, which we expect to continue to drive the company's growth. This concludes my overview of commercial activities for the quarter. I will now turn the call back over to Nick for an update on operations and other achievements during the period. Thanks, Matt. Following a very strong fiscal 2022, the first quarter of fiscal 2023 established a new high. As outlined by Dan and Matt, during the period, we achieved both the highest quarterly revenue and the highest backlog ever in the company history. This was driven by our commercial team's success in attracting new business, as well as the exceptional performance of our manufacturing and operations teams in consistently delivering high-quality products on time to our customers. As most of you are aware, the company is midstream in a broad expansion of our facilities and capabilities. This new capacity is intended to attract new customers as well as support existing customers as their programs continue to mature. During the period, the expansion work for both our mammalian and our cell and gene therapy businesses advanced according to plan. During the first quarter, the company achieved an important milestone with respect to our cell and gene therapy expansion with the launch of our analytical and process development capabilities for this business. This opening marks the first of our cell and gene therapy capabilities to come online, and we believe it positions us well to begin engaging with prospective customers who are now able to see this exciting business come to life. Construction of our cell and gene therapy GMP suites continues on schedule, and we expect them to be completed in mid-calendar 2023. Given our current discussions with prospective customers, we believe the opening of these suites will be well-timed, given the analytical and process development work that we are now anticipating and the potential for these programs to advance to GMP suites shortly after they are completed. Turning now to our mammalian cell business. We are very pleased to announce the recent appointment of Prem Patel as Vice President, Process Development. Dr. Patel is an accomplished biopharmaceutical executive with more than 30 years of experience and a track record of success in developing manufacturing processes for clinical material and commercial supplies. His career is highlighted by extended tenures supporting research, development, and manufacturing activities at GSK and Bristol Myers Squibb. We are delighted to have Prem join our team, and in addition to his technical acumen, we are excited to have, as a new member of our senior team, someone with intimate knowledge of how our customers see Avid's offering. We believe this perspective can only further enhance our customer-centric offering and the behaviors that support that goal. With respect to our mammalian cell business facilities, we have come a long way and are fast approaching the finishing line with respect to our ongoing expansions. The second phase of this project is ongoing, and we remain on track to have Myford South expansion complete by the end of quarter one, calendar 2023. The manufacturing suites in Myford South are nearing completion, and equipment has already been put in place. In fact, as we speak, much of the downstream equipment has been located in the facility, and validation of this equipment is already underway. During quarter two, we expect to receive much, if not all, of the upstream equipment, which will in turn be added to the schedule in terms of getting it ready for operational release. A few weeks ago, we also announced another expansion of our process development capacity to provide additional space to onboard future clients, ultimately seeking to utilize the new Myford capacity. This expansion is now underway, and we anticipate both of these expansions to be complete somewhere during the first quarter of calendar 2023. Undertaking this scale of expansion has been no small feat. It has and continues to require close coordination and execution by numerous vendors, partners, local agencies, as well as our internal team. I would again like to mention that despite all of the potential for disruption, our team has continued to perform diligently and are now not only delivering these state-of-the-art facilities on time, but are also maintaining the delivery of product to the highest standards with respect to quality, yield, and schedule, which is something our clients have come to expect. I continue to be impressed by our incredible employees across all areas of the business, and I am grateful for their dedication and reliably excellent performance. As we continue to expand, so too will our team. We anticipate continuing to increase our headcount through fiscal year-end to both stand up and appropriately staff our new capabilities and capacities. As Dan stated earlier, these expenses, current and future, continue to place pressure on our margins. However, we do believe that this downward pressure is temporary Importantly, we are delighted to be in a position to bring online new capacity to support the continued growth of the business. As we start to fill this capacity, we believe that our margins will be restored and further strengthened as the capacity utilization increases. In the near term, it is also important to note that as usual in fiscal quarter two, we will undertake the company's annual maintenance shutdowns, which will result in reduced available capacity for the quarter. Once complete, this will of course, be restored throughout the rest of the year. I am also pleased to report that during this month, we will be vacating the Michelle corporate office and relocating personnel to the new office space in the Myford facility. This space is larger than our current location, and I'm excited at the prospect of being able to bring most of our operations and administrative teams together in a single location. In closing, I wish to reiterate how pleased I am with the progress achieved on all fronts during this quarter. Both top-line revenues and backlogs hit new company highs. A clear extension of the growth trajectory established in fiscal 2022. Our commercial development team continues to execute, signing new orders for $41 million during the quarter and expanding our organizational outreach and visibility throughout North America. Finally, our facilities and capabilities expansions continue to advance according to the schedule. As a result, we feel optimistic about the future and look forward to delivering value to our clients and in turn, filling the new capacity we will soon have available. This concludes my prepared remarks for today, and we can now open up the call for questions. Operator? Yeah. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your touch-tone telephone. Again, to ask a question, please press star one one. Our first question comes from Sean Dodge of RBC Capital Markets. Mr. Dodge, your line is open. Hey, good afternoon. This is Thomas Kelliher on for Sean. Thanks for taking the questions. Starting off on bookings, and congrats to the commercial team on another strong quarter. It doesn't appear that you all are being materially impacted by a slowdown in biotech funding. Is this an accurate assessment, or have you seen any changes in selling activity or timelines or anything like that since the close of the quarter? This is Matt. I'll take that. We're seeing a little bit of a blip in the summer, but I think the positive around that is it's actually a higher rate of issuance versus prior year. I guess to answer the question, a typical summer slowdown, but improved performance over prior years. I think we're encouraged, you know, really in the last few months, issuance has consistently been strong, both in count as well as dollars. Okay. That's helpful. Thank you. Can you guys talk a little bit about the visibility you have on the fiscal 2023 guidance? I know you reiterated the revenue. Have there been any changes in terms of like quarterly cadence or maybe mix of revenue coming out of backlog versus your initial outlook? Hello? Hello? Can you hear me, Matt? Matt? Yeah, go ahead. Hello, can you hear me, Matt? Yeah. Nick, we can hear you. Sorry about that. We've had some technical difficulties there. I apologize for that. Can you just reiterate the question again there? Sorry. Yeah, sure. I was just wondering if you could talk a little bit more about some of the visibility you have on the 2023 revenue guidance, and if there were any changes you'd like to note, you know, around quarterly cadence or how much of the revenue is coming out of backlog versus the previous outlook Yeah, I think, the outlook for the full year remains pretty much where we were last quarter or the beginning of this financial year. Obviously, we've had a good start to the year, which is not totally uncommon. We've seen, I've just heard Matt allude to, a good uptick in comparison with last year in terms of over the same period, in terms of the proposals. Obviously we've seen an increase in backlog over both the last quarter and quite a significant one over the prior year. All of those remain on track for affirming the guidance that we had. I think as I mentioned at the beginning of the year, obviously there's a lot of turmoil in the world. We've obviously seen reduced investment into biotech and the like, and that always provides some degree of concern for the whole year. What we've seen so far is that at least in the case of Avid, the value proposition seems to be maintaining its attraction to the marketplace and continuing the interest. You know, as I mentioned, obviously during my prepared remarks, we do have the shutdown coming up this year, this next quarter, which obviously means our capacity is lower for the quarter, which typically we end up with a lower revenue in the second quarter. Obviously pick our way back up to complete the full year in quarters three and four. At the moment, no reason to have any concerns over where we feel the year will end up as we were from three months ago. All right, great. Thank you very much. That's all for me. Thank you. Thank you. Our next question comes from Jacob Johnson of Stephens. Your line is open. Maybe a question on the cell and gene therapy side. With the PD lab there now online, and we started thinking about the cGMP manufacturing coming online next year, one, latest thoughts on business development trends now that the PD lab's open. Two, kind of any thoughts around the business model here. You know, are customers coming to you already looking to book suites? Would you be interested in suite reservation fees or something like that? Just kind of thoughts around the business model for cell and gene therapy and business development trends there. Yeah. Hi, Jacob. It's obviously a brand new business for us and we literally brought on the AD and PD capacity, you know, literally a few weeks ago. I am delighted to say that we actually have already signed our first client. So that's, I think, in any new business, finding your first client is always the hardest. We've already completed that one, so hats off to the team in achieving that. Again, that kind of, we're all in numerous discussions with other parties. I think as I mentioned again last quarter is that it's always good to have the facility there, even if it's not all of it, to actually be able to showcase what we've got and obviously the people that are employed in delivering those services. You know, with our reservation fees, I mean, our business always has a form of reservation fees in the structure of our agreements. Yes, we you know we will be looking to start to sign new business and for the want of a better word, re-reservation fees or deposits against that. And start building some analytical and process development capabilities ahead of bringing the GMP suites on at the middle of next calendar year. Got it. Thanks, Nick. Just follow up on the expense side of things. Nick, you mentioned, you know, you're continuing to hire, continuing to add the headcount. You know, as we think about that, certainly some of that headcount's gonna go to the actual manufacturing facilities, and I think impact gross margins. But maybe kind of comments on increasing headcount as it relates to gross margin impact. On the SG&A side of things. Yeah. I mean, I'll hand it over to Dan in a second, but if he wants to add anything. I mean, very simply, we're bringing on quite a significant amount of capacity, the analytical development and process development we just talked about in cell and gene therapy. Obviously, in order to attract a client, you just having an empty building is not gonna cut it. We obviously brought on the staffing that we're able to to win that business and obviously are in discussions and preparing proposals for other business. Those are some of the costs that come online and equally in the mammalian business. We've got a significant rollouts of capacity coming online in January or quarter one rather of calendar 2023. We've got to start staffing up to ensure that we can utilize that capacity. Again, very encouraging signs with quarter-over-quarter backlog up 40% I think it was with that Matt alluded to. I think, you know, in terms of the no surprise to anybody, I don't think that the margins are tighter as a result of bringing that capability online and the people to run it. What was very encouraging was the comment that Dan had made, I think, which is that if you take off the capacity fees from last year and the cost associated with that, then our margins are continuing to remain pretty much on a par. You know, as we've always felt, I think the business model we proved last year and the year before quite clearly works. You know, you can't build new capacity and not staff it without spending some money. That's exactly what we've done. We built it because we felt we could find new customers. Again, our backlog is ahead of quite significantly from where it was last year. Again, all in line with what we were hoping to see. Dan, anything? No. Thank you. Our next question comes from Matt Hewitt of Craig-Hallum. Your line is open. On the strong quarter. Maybe this is, I guess, maybe a little bit more high level, but what do you think is the driving force behind the success that you're having with new customer wins? Is it the excess capacity that you're bringing online? Is it your, you know, process and analytical development teams and the ability to kinda work hand in hand with those teams? You know, what is the driving force there? Hi, Matt. I think it's a number of factors. I think, you know, there's no question about it. I think investing ahead of time, I've said this all along, is that most of our clients, I believe timeline is a critical success factor for them. You know, you can have all the best offerings in the world, but if you haven't got a bioreactor available for them, it's not much use in maintaining timeline. You know, we've proactively gone and invested in that capacity to make sure that our existing clients don't have to. I don't have to turn around to an existing client and let them know that we're gonna delay their next clinical phase because we haven't got a bioreactor available. In fact, quite the opposite, we always have. That's one critical one. I think another fundamental, which for me is paramount in this industry, is the quality track record and the GMP and manufacturing experience. Avid's got 18 years of manufacturing commercial drug substance, and that's one of the longest out there. And the quality team do a super job of ensuring we manufacture that commercial product to the highest standards. I think that's another, you know, significant attribute. Then there's that really sort of boring but essential thing, which is delivering product on time, in full, in spec, day in, day out. You know, internally, we have a phrase, "We're only as good as the last batch," and we continue to focus on making every single batch the best we possibly can. I think the teams have been doing a super job in execution. Ultimately, you know, clients like their product delivering on time, in full, in spec. Word gets around that that's what you get when you come to Avid. We could do that. It's a combination of a whole host of factors, and I could probably go on with at least half a dozen other elements that make that. The guys are just doing a really good job of delivering on their promise. That's really helpful. Maybe a follow-up question for Matt. I think you mentioned in your prepared remarks that you've doubled the size of the sales team. Could you remind us what the size of that team is today and whether or not you plan to add any more headcount to that group, like, say, over the remainder of the year? Yeah. I think we're right-sized for now. Currently, we have three in the mammalian side and then another one focused on the cell and gene therapy. Got it. All right. Thank you so much. Thank you. Our next question comes from Paul Knight of KeyBanc Capital Markets. Your line is open. Question's kind of been asked around a bit, but the analytical and process development expansion that you're talking about, is that necessary to win business, or does that make the likelihood of winning business higher? I mean, I think it's an essential element. Most projects requires a large component of analytical in that space. Obviously process development as well. There's a lot of people are building projects for or coming with projects for preclinical, clinical manufacture. Developing the process and refining the process is a key element of that. That's kind of the onboarding component of the business where things normally start. Obviously as one hones down the process and has something that you can scale up to GMP, it moves into the GMP suites. It's an essential component of the business that where clients come on board, Paul. Lastly, did the experience that customers went through during COVID create more demand for single-use technology? That's a good question. I'm not. I think it's a difficult one to. I mean, there was certainly an increased demand for single-use technology during COVID. I'd put that as much based on the fact that, you know, finding the disposable components throughout the industry during the last two years has been extremely tight, considering the. That's just about in every component of disposable at some point during that period. So it had to have an enormous impact. In terms of the search for our mammalian cell requirements in the disposable, I don't think it's as big as, you know, one might look at, for example, fill finish. Every vial, no matter what the therapy, was probably put. Every product, no matter what the therapy, was put into a vial during COVID. Not every therapy required mammalian cell culture to manufacture it. In fact, very few. Relatively speaking to the amount of vaccine that was actually delivered out there. Yes, a large increase in the demand for disposable, but not so much in the same demand for mammalian activities as it was on the equipment. Okay, thanks. Thank you. Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Nick Green, CEO, for any closing remarks. Thank you, operator, and thank you to everybody participating on today's call. In closing, I'd like to thank Avid's customers, partners, and investors for their ongoing collaboration. As always, I would like once again to acknowledge Avid's extraordinary employees, who together are driving the company's success. Thank you again for participating on the call, and thank you for your continued support of Avid Bioservices. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.