Abaxis Reports Financial Performance For The First Quarter Of Fiscal 2013

UNION CITY, Calif., July 26, 2012 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the first fiscal quarter ended June 30, 2012.

Quarterly highlights include:

  • Revenues of $42.0 million, up 17% over last year's comparable quarter.
  • North America revenues of $33.2 million, up 12% over last year's comparable quarter.
  • Medical market revenues of $8.4 million, up 18% over last year's comparable quarter.
  • Veterinary market revenues of $32.5 million, up 17% over last year's comparable quarter.
  • International revenues of $8.8 million, up 41% over last year's comparable quarter.
  • Total medical and veterinary instrument revenues of $9.9 million, up 31% over last year's comparable quarter.
  • Total medical and veterinary instrument sales of 1,303 units, up 28% over last year's comparable quarter.
  • Total medical and veterinary reagent disc sales of $23.6 million, up 14% over last year's comparable quarter.
  • Total medical and veterinary reagent disc sales of 1.7 million units, up 9% over last year's comparable quarter.
  • Service revenues from Abaxis Veterinary Reference Laboratories (AVRL) of $861,000, up 83% over fourth quarter of fiscal 2012.
  • Diluted net income per share of $0.13, up 30% over last year's comparable quarter.

Quarterly Results:  For the fiscal quarter ended June 30, 2012, Abaxis reported revenues of $42.0 million, as compared with revenues of $36.0 million for the comparable period last year, an increase of 17 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro coagulation and specialty analyzers and i-STAT analyzers, increased by an aggregate of $2.4 million or 31 percent, over the same period last year.  Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro coagulation and specialty cartridges, i-STAT cartridges and rapid tests, increased by an aggregate of $2.8 million, or 10 percent, over the same period last year.  Abaxis reported net income of $2.9 million for the fiscal quarter ended June 30, 2012, compared to $2.2 million for the same period last year, an increase of 29 percent.  Abaxis' effective tax rate in both three-month periods was 37 percent.  Abaxis reported diluted net income per share of $0.13 (calculated based on 22,217,000 shares) for the three-month period ended June 30, 2012, compared to $0.10 per share (calculated based on 23,095,000 shares) for the same period last year.

Other Reported Information:  Total sales in the medical market for the first quarter of fiscal 2013 were $8.4 million, an increase of 18 percent, compared to the same period last year.  Medical sales worldwide, excluding sales to the U.S. government, during the first quarter of fiscal 2013 were $7.8 million, an increase of 27 percent, compared to the same period last year.  Total sales in the veterinary market for the first quarter of fiscal 2013 were $32.5 million, an increase of 17 percent, compared to the same period last year.  Veterinary reagent disc sales for the first quarter of fiscal 2013 were $18.7 million, an increase of 20 percent compared to the same period last year.  Non-cash compensation expense recognized for share-based awards during the first quarter of fiscal 2013 was $1.8 million, compared to $1.1 million for the same period last year.    

Clint Severson, chairman and chief executive officer of Abaxis, commented, "We achieved solid performance in the first quarter, highlighted by a 17% increase in revenues compared to last fiscal year's comparable quarter.  We had solid double-digit growth across virtually all product categories, as well as geographic markets.  Compared to last fiscal year's comparable quarter, medical market revenues were up 18%; veterinary market revenues were up 17%; and total medical and veterinary market instruments revenues were up 31%.  Geographically, North America revenues were up 12% and international revenues were up 41%, driven by improved performance in Europe.  The financial underpinnings of the business continue to be very strong with approximately $98.2 million in cash, cash equivalents and investments. All in all, it was a very solid quarter."

"During the quarter," Mr. Severson continued, "we were particularly pleased with our medical diagnostics business, which received initial orders for Piccolo Xpress units to support a four-year worldwide drug clinical trial.  In the past year we have been actively working with leading clinical research organizations (CROs) and biotechnology companies to incorporate real-time testing into drug clinical trials.  We believe that our point-of-care diagnostic testing is ideally suited for real-time monitoring to insure study participant safety and to drive cost efficiencies in the clinical trials process.  We believe that the drug clinical trials market represents an important new market for Abaxis and we will continue to work diligently to more fully develop this new opportunity."

Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, July 26, 2012.  Participants can dial (877) 317-6789 or (412) 317-6789 to access the conference call, or can listen via a live Internet web cast, which is available in the Investor Relations section of the company's website at http://www.abaxis.com.  A replay of the call will be available by visiting http://www.abaxis.com for the next 30 days or by calling (877) 344-7529 or (412) 317-0088, confirmation code 10016194, through July 31, 2012.  This press release is also available prior to and after the call via Abaxis' website or the Securities and Exchange Commission's website at http://www.sec.gov

About Abaxis
Abaxis develops, manufactures, markets and sells portable blood analysis systems for use in any veterinary or human patient-care setting to provide clinicians with rapid blood constituent measurements.  The system consists of a compact, 5.1 kilogram (11.2 pounds), portable analyzer and a series of single-use plastic discs, called reagent discs that contain all the chemicals required to perform a panel of up to 13 tests on veterinary patients and 14 tests on human patients.  The system can be operated with minimal training and performs multiple routine tests on whole blood, serum or plasma samples.  The system provides test results in less than 12 minutes with the precision and accuracy equivalent to a clinical laboratory analyzer.  The veterinary business also provides to the animal health and research market a line of hematology instruments for point-of-care complete blood counts (CBC), a specialty instrument to screen for and detect clotting disorders and to measure equine fibrinogen levels, a handheld instrument for the rapid assessment of certain critical care tests and rapid point-of-care tests for Heartworm infections, Parvovirus, Giardia and Lyme disease.  Abaxis, through its AVRL division, provides routine laboratory testing as well as specialty testing for veterinarians nationwide.

Use of Financial Measures
To supplement the financial statements presented in accordance with United States generally accepted accounting principles (GAAP), Abaxis uses operating income per share, a non-GAAP financial measure.  The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.  For more information on this non-GAAP financial measure, refer to the table captioned "Operating Income Per Share" included at the end of this release.  Abaxis defines operating income per share as operating income divided by the weighted average outstanding shares.  Management uses this measure in comparing Abaxis' operating results with historical performance and believes it provides meaningful and comparable information to management and investors to assist in their review of Abaxis' performance relative to prior periods and its competitors.

This press release includes, and our conference call will include, statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), including but not limited to statements related to Abaxis' cash position, financial resources and potential for future growth, market acceptance and penetration of new or planned product offerings, and future recurring revenues and results of operations.  Abaxis claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act.  These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," "anticipates," or words of similar import, and do not reflect historical facts.  Specific forward-looking statements contained in this press release or in Abaxis' conference call may be affected by risks and uncertainties, including, but not limited to, those related to losses or system failures with respect to Abaxis' facilities or manufacturing operations, fluctuations in quarterly operating results, dependence on sole suppliers, the market acceptance of Abaxis' products and services, the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, risks associated with manufacturing and distributing its products on a commercial scale free of defects, risks related to the introduction of new instruments manufactured by third parties, risks associated with competing in the human diagnostic market, risks related to the protection of Abaxis' intellectual property or claims of infringement of intellectual property asserted by third parties, risks related to condition of the United States economy and other risks detailed under "Risk Factors" in Abaxis' Annual Report on Form 10-K for the fiscal year ended March 31, 2012 and Abaxis' other periodic reports filed from time to time with the United States Securities and Exchange Commission.  Forward-looking statements speak only as of the date the statements were made.  Abaxis does not undertake and specifically disclaims any obligation to update any forward-looking statements.

Financial Tables on Following Pages

ABAXIS, INC.



Condensed Consolidated Statements of Income



(In thousands, except per share data)



(Unaudited)







Three Months Ended


June 30,


2012

2011

Revenues

$     42,014

$      36,003

Cost of revenues

19,165

16,780

Gross profit

22,849

19,223

Operating expenses:



   Research and development 

2,965

3,454

   Sales and marketing 

11,769

9,152

   General and administrative

3,322

3,419

Total operating expenses

18,056

16,025

Income from operations

4,793

3,198

Interest and other income (expense), net

(230)

294

Income before income tax provision

4,563

3,492

Income tax provision

1,699

1,278

Net income

$       2,864

$        2,214

Net income per share:



  Basic net income per share

$         0.13

$          0.10

  Diluted net income per share

$         0.13

$          0.10




Shares used in the calculation of net income per share:



  Weighted average common shares outstanding - basic

21,817

22,681

  Weighted average common shares outstanding - diluted

22,217

23,095

 

ABAXIS, INC.



Condensed Consolidated Balance Sheets

(Unaudited and in thousands)





June 30,

March 31,


2012

2012

Current assets:



 Cash and cash equivalents

$       56,151

$       45,843

 Short-term investments

21,912

21,689

 Receivables, net

29,038

30,694

 Inventories

20,940

19,597

 Prepaid expenses and other current assets

3,670

5,423

 Net deferred tax assets, current

4,328

4,151

   Total current assets 

136,039

127,397

 Long-term investments

20,129

23,442

 Investment in unconsolidated affiliate

2,643

2,626

 Property and equipment, net

25,165

24,296

 Intangible assets, net

3,832

3,990

 Other assets

109

85

    Total assets

$     187,917

$     181,836




Current liabilities:



 Accounts payable

$         7,553

$         6,381

 Accrued payroll and related expenses

6,821

6,336

 Accrued taxes

144

266

 Other accrued liabilities

1,806

1,991

 Deferred revenue

1,307

1,212

 Warranty reserve

1,012

1,245

   Total current liabilities

18,643

17,431

Non-current liabilities:



 Deferred rent

669

641

 Net deferred tax liabilities

197

199

 Deferred revenue

2,708

2,396

 Warranty reserve

482

601

 Notes payable, less current portion

758

783

   Total non-current liabilities

4,814

4,620

   Total liabilities

23,457

22,051

Shareholders' equity:



 Common stock

111,878

110,063

 Retained earnings 

52,561

49,697

 Accumulated other comprehensive income

21

25

   Total shareholders' equity

164,460

159,785

   Total liabilities and shareholders' equity

$     187,917

$     181,836

Operating Income Per Share



(In thousands, except per share data)




Three Months Ended


June 30,


2012

2011

Shares used in the calculation of operating income per share:



  Weighted average common shares outstanding - basic

21,817

22,681

  Weighted average common shares outstanding - diluted

22,217

23,095




Operating income per share - basic

$         0.22

$          0.14

Operating income per share - diluted

$         0.22

$          0.14







Revenues by Geographic Region



(In thousands)




Three Months Ended


June 30,


2012

2011

North America

$     33,164

$      29,708

International

8,850

6,295

Total revenues

$     42,014

$      36,003







Revenues by Customer Group



(In thousands)




Three Months Ended


June 30,


2012

2011

Medical Market

$       8,416

$        7,156

Veterinary Market

32,495

27,669

Other

1,103

1,178

Total revenues

$     42,014

$      36,003

 

SOURCE Abaxis, Inc.



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