Executive Summary

ABMC’s Q2 2021 net sales fell sharply to $0.529M, down 69.9% year-over-year, returning to operating loss as Covid-19 test sales normalized; EPS was $(0.01) versus $(0.00) in Q2 2020 .
Management cited unexpected longer raw-material lead times (shared with Covid lateral-flow tests and plastics) and ongoing budget constraints at customers; open orders for ABMC drug tests totaled $0.128M at quarter-end, pointing to near-term fulfillment as supply eases .
Contract manufacturing revenue improved year-over-year for the second consecutive quarter; shipments against 2020 POs continued, with a new April 2021 order expected to ship in Q3 2021, and increased RSV private-label orders starting in Q3 .
The SBA set PPP forgiveness to the full $0.332M loan amount, with formal forgiveness notice expected shortly—supporting liquidity amidst working-capital constraints and higher current debt maturities .
No Wall Street consensus estimates were available via S&P Global for ABMC’s Q2 2021, and no earnings call transcript was found; near-term stock reaction likely hinges on proof of backlog conversion, contract manufacturing visibility, and PPP forgiveness execution .

What Went Well and What Went Wrong

What Went Well

Contract manufacturing sales increased for the second straight quarter versus prior-year; shipments from 2020 open purchase orders continued and are set to ramp in Q3, with added RSV test orders starting in Q3 .
Expense discipline: operating expenses declined 32.9% year-over-year in Q2 2021, aligning spend to sales levels, aiding cash preservation amid weaker demand .
Liquidity relief: PPP forgiveness set to the full $0.332M, providing near-term support and mitigating debt-service strain .
- “Operating expenses declined 32.9% in the second quarter of 2021 compared to the second quarter of 2020…”
- “We also applied for forgiveness of the $332,000 PPP loan… the SBA has… set the amount of forgiveness to the full amount of the loan.”

What Went Wrong

Core demand pressure and supply constraints: net sales decreased $1.229M YoY in Q2 2021; longer lead times for materials (shared with Covid tests and plastics) produced backorders and delayed revenue recognition .
Covid-19 test sales normalized substantially from 2020’s elevated levels; mix shift away from high-volume Covid antibody distribution compressed revenue versus last year .
Elevated current maturities and working-capital strain: cash fell to $0.030M; current portion of debt increased to $1.29M, with total current liabilities at $3.107M and stockholders’ deficit widening .

Financial Results

Metric	Q2 2020	Q1 2021	Q2 2021
Net Sales ($USD Millions)	$1.758	$0.566	$0.529
Gross Profit ($USD Millions)	$0.582	$0.105	$0.136
Gross Margin (%)	33.1%	18.6%	25.7%
Operating Expenses ($USD Millions)	$0.566	$0.614	$0.380
Operating Income (Loss) ($USD Millions)	$0.016	$(0.509)	$(0.244)
Net Income (Loss) ($USD Millions)	$(0.021)	$(0.556)	$(0.245)
EPS (Basic & Diluted) ($USD)	$(0.00)	$(0.01)	$(0.01)
Weighted Avg Shares (Millions)	35.906	38.859	40.951

Balance Sheet Highlights (Period-End):

Metric	Dec 31, 2020	Mar 31, 2021	Jun 30, 2021
Cash & Equivalents ($USD Millions)	$0.098	$0.063	$0.030
Accounts Receivable, Net ($USD Millions)	$0.407	$0.337	$0.387
Inventory, Net ($USD Millions)	$0.536	$0.507	$0.475
Line of Credit ($USD Millions)	$0.277	$0.245	$0.287
PPP Loan ($USD Millions)	$0.332	$0.332	$0.332
Current Portion of LT Debt ($USD Millions)	$0.075	$1.290	$1.290
Total Current Liabilities ($USD Millions)	$2.021	$3.167	$3.107
Stockholders’ Deficit ($USD Millions)	$(1.256)	$(1.431)	$(1.493)

Segment/KPI Detail:

Category	Q2 2021 Detail	Prior Quarter/Year Context
Drug Testing Sales	Decreased $0.112M YoY; open sales orders $0.128M at 6/30/21 due to longer lead times; purchasing adjusted	Q1 2021: sporadic improvement; markets uncertain; customers recovering budgets
Covid-19 Tests	Vast majority of YoY decline due to lower Covid test sales; new antigen/antibody offerings began late April/early May, too early to gauge	Q1 2021: original antigen offering restricted; pivoted to antigen/flu combo and alternative antibody test under EUA
Contract Manufacturing	Increased for second consecutive quarter YoY; shipped in Q2; more shipments in Q3; new April order to ship Q3; increased RSV orders in Q3	Q1 2021: resumed discussions; open POs from 2020 to ship in Q2; new order in April; pilot with potential new customer

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Covid-19 test revenue	FY/Q3 2021	No formal guidance	New antigen/antibody offerings launched; impact uncertain; not expecting 2020’s extraordinary levels	Maintained qualitative; no numeric guidance
Contract manufacturing shipments	Q3 2021	Existing open POs from 2020; discussions ongoing	Shipping continued in Q3; new April order shipping Q3; increased RSV orders in Q3	Raised qualitative visibility
Operating expenses	Near term	Expense increase in G&A in Q1 due to debt fees and audit	Operating expenses down 32.9% YoY in Q2; continued cost management	Lowered run-rate
PPP forgiveness	2021	Applying for forgiveness	SBA set forgiveness to full $0.332M; expecting formal notice	Confirmed forgiveness outcome
Formal revenue/EPS guidance	2021	Not provided	Not provided	Maintained (no guidance)

Earnings Call Themes & Trends

No earnings call transcript was found for Q2 2021; themes are derived from management press releases.

Topic	Previous Mentions (Q4 2020 / Q1 2021)	Current Period (Q2 2021)	Trend
Covid-19 testing mix	Antibody sales drove 2020 growth; expected decline in 2021 as vaccines roll out	New Covid antigen/antibody offerings launched; impact uncertain; not expecting 2020 level	Normalizing/downshift
Core drug testing demand	Markets uncertain; some rebound late 2020; budgets recovering	Demand returning to some normalcy; reduced tests due to budgets/telecommuting; backorders from material lead times	Gradual recovery with supply constraints
Supply chain constraints	Not highlighted	Longer lead times for materials shared with Covid lateral flow and plastics; purchasing adjusted	Emerging headwind
Contract manufacturing	New orders in early 2021; pilot planned	YoY up for second quarter; shipments in Q2 and Q3; RSV orders rising	Improving trajectory
Cost discipline	Operating loss persisted; plan to control costs	Operating expenses down 32.9% YoY; maintaining alignment with sales	Improving

Management Commentary

“Drug test sales decreased $112,000 in the second quarter of 2021… at June 30, 2021, we had open sales orders… $128,000… due to unexpected longer lead times for certain raw materials; particularly with materials that are also used in Covid-19 lateral flow tests and plastic components.”
“The vast majority of the decline… was due to lower Covid-19 test sales; however, we are starting to see some positive impact from the new Covid-19 tests we started distributing in late April/early May 2021.”
“Contract manufacturing sales increased for the second consecutive quarter… we shipped products in the second quarter… shipping more in the third quarter… increased orders of the RSV test… in the third quarter.”
“Operating expenses declined 32.9% in the second quarter of 2021 compared to the second quarter of 2020… we also applied for forgiveness of the $332,000 PPP loan… SBA… set the amount of forgiveness to the full amount.”

Q&A Highlights

No Q2 2021 earnings call transcript was available; therefore, no Q&A themes can be reported for the period .

Estimates Context

S&P Global/Capital IQ consensus estimates for ABMC Q2 2021 (EPS and revenue) were unavailable; as a result, beats/misses versus Street were not determinable for this quarter [GetEstimates error].

Key Takeaways for Investors

Revenue normalization post-2020’s Covid antibody surge and raw material lead-time constraints drove a steep YoY decline; near-term upside depends on converting $0.128M drug test backorders and easing supply chain bottlenecks .
Contract manufacturing is a relative bright spot with visible shipments in Q3 and rising RSV orders—monitor order inflow and customer mix to gauge sustainability .
Expense control is tangible (opex down 32.9% YoY), but liquidity remains tight (cash $30K; current debt $1.29M); PPP forgiveness should provide modest relief—watch debt refinancing or equity usage to bridge working capital .
Covid-19 product portfolio pivot adds optionality, but management does not expect a repeat of 2020’s extraordinary sales—investors should recalibrate expectations to core drug testing and contract manufacturing run-rates .
Absence of formal guidance and limited external coverage increases execution risk; focus on quarterly cadence of shipments, backlog, and supply chain normalization as primary stock catalysts .
Year-over-year gross margin compression relative to 2020’s mix highlights importance of product mix and manufacturing efficiency recovery; margin stabilization could provide leverage to profits as volumes return .
Without a call transcript, monitor subsequent 10-Q and disclosures for operational detail and any balance-sheet actions (line of credit, debt maturities) impacting solvency and growth investment capacity .

AMERICAN BIO MEDICA CORP (ABMC)·Q2 2021 Earnings Summary