Abaxis Reports Financial Performance for the Second Quarter of Fiscal 2016

27 Oct, 2015, 16:01 ET from Abaxis, Inc.

UNION CITY, Calif., Oct. 27, 2015 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a global diagnostics company manufacturing point-of-care blood analysis instruments and consumables for the medical and veterinary markets worldwide, today reported financial results for the second fiscal quarter ended September 30, 2015.

Second quarter overview:

  • Revenues from continuing operations of $56.0 million, up 11% over last year's comparable quarter.
  • Diluted EPS from continuing operations of $0.34, up 36% over last year's comparable quarter.
  • Diluted EPS, including discontinued operations, of $0.34, up 42% over last year's comparable quarter.

Revenues highlights:

  • North America revenues of $45.2 million, up 10% over last year's comparable quarter.
  • International revenues of $10.8 million, up 14% over last year's comparable quarter.
  • Medical market revenues of $8.6 million, up 13% over last year's comparable quarter.
  • Veterinary market revenues from continuing operations of $46.6 million, up 11% over last year's comparable quarter.
  • Total medical and veterinary instrument revenues of $11.6 million, up 15% over last year's comparable quarter.
  • Total medical and veterinary instrument sales of 1,505 units, up 5% over last year's comparable quarter.
  • Total medical and veterinary reagent disc revenues of $30.7 million, up 10% over last year's comparable quarter.
  • Total medical and veterinary reagent disc sales of 2.4 million units, up 12% over last year's comparable quarter.

Other financial highlights:

  • Gross profit from continuing operations of $32.0 million, up 14% over last year's comparable quarter.
  • Net income from continuing operations of $7.8 million, up 37% over last year's comparable quarter.
  • Cash, cash equivalents and investments of $155.2 million as of September 30, 2015.
  • Abaxis paid dividends of $2.5 million or $0.11 per share during the second quarter of fiscal 2016.

Clint Severson, chairman and chief executive officer of Abaxis, commented, "Our performance for the first half of fiscal year 2016 remains strong.  Revenues from continuing operations for the second quarter increased by 11% over last year's comparable quarter to $56.0 million, driven by double-digit revenue increases in North America and internationally.  Diluted earnings per share from continuing operations increased by 36% over last year's comparable quarter to $0.34.  Revenues in North America increased by 10%, while international revenues increased by 14% over last year's comparable quarter.  Our gross profit margin from continuing operations expanded to 57.1%, compared to 55.6% in last year's second quarter, and compared to 55.4% in the first quarter of fiscal 2016.  We remain pleased with the contributions of our sales team and our distribution partners, and the efforts of both have been important contributors to our growth."

Mr. Severson continued, "Looking ahead, we have a number of on-going research and development initiatives under way that we believe will make significant contributions to future operational results, which include the development of electronic connectivity technology as well as a number of high sensitivity immunoassay projects that are expected to expand our offerings to the veterinary and medical markets.  We are also executing on pilot projects in Canada through Jack Nathan Health in a number of Walmart Care Clinics throughout the country that we believe could lead to mutually beneficial partnerships.  On a more current basis, our partnership with Abbott is working very well, as evidenced by the reagent disc growth over the last several quarters.  We continue to operate the company very efficiently from internal cash flow, with a solid cash, cash equivalents and investments position of $155.2 million as of September 30, 2015.  We remain committed to driving continued revenue and income growth, while rewarding our shareholders with a quarterly cash dividend."

Results of Continuing Operations

Quarterly Results

For the fiscal quarter ended September 30, 2015, Abaxis reported revenues from continuing operations of $56.0 million, as compared with revenues of $50.5 million for the comparable period last year, an increase of 11 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers, increased by $1.5 million, or 15 percent, over the same period last year.  Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro specialty cartridges, i‑STAT cartridges and rapid tests, increased by $3.5 million, or 9 percent, over the same period last year.  Abaxis reported net income from continuing operations of $7.8 million for the fiscal quarter ended September 30, 2015, compared to $5.7 million for the fiscal quarter ended September 30, 2014.  Abaxis' effective tax rate in the quarter ended September 30, 2015 was 36 percent, compared to 36 percent for the same period last year.  Abaxis reported diluted net income per share from continuing operations of $0.34 (calculated based on 22,863,000 shares) for the fiscal quarter ended September 30, 2015, compared to $0.25 per share (calculated based on 22,690,000 shares) for the same period last year. 

Six-Month Results

For the six-month period ended September 30, 2015, Abaxis reported revenues from continuing operations of $109.1 million, as compared with revenues of $94.5 million for the comparable period last year, an increase of 15 percent.  Revenues from instrument sales increased by $2.6 million, or 15 percent, over the same period last year.  Revenues from consumables sales increased by $11.0 million, or 15 percent, over same period last year.  Abaxis reported net income from continuing operations of $14.8 million for the six-month period ended September 30, 2015, compared to $10.8 million for the same period last year.  Abaxis' effective tax rate in the six month-period ended September 30, 2015 was 36 percent, compared to 37 percent for the same period last year.  Abaxis reported diluted net income per share from continuing operations of $0.65 (calculated based on 22,876,000 shares) for the six-month period ended September 30, 2015, compared to $0.48 per share (calculated based on 22,678,000 shares) for the same period last year. 

Other Reported Information

Non-cash compensation expense recognized for share-based awards during the second quarter of fiscal 2016 was $3.0 million, compared to $2.5 million for the same period last year.  Abaxis paid $2.5 million in cash dividends to shareholders during the second quarter of fiscal 2016. 

Conference Call

Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Tuesday, October 27, 2015.  Participants can dial (877) 317-6789 or (412) 317-6789 to access the conference call, or can listen via a live Internet webcast, 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 10074428, through November 3, 2015.  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, Inc. is a worldwide developer, manufacturer and marketer of portable blood analysis systems that are used in a broad range of medical specialties in human or veterinary patient care to provide clinicians with rapid blood constituent measurements.  Our mission is to improve the efficiency of care delivery to and the quality of life of patients in the medical and veterinary markets.  We provide leading edge technology and tools that support best medical practices, enabling physicians and veterinarians to respond to the health needs of their clients at the point of care while operating economical and profitable practices.  For more information, visit http://www.abaxis.com.

Forward Looking Statements

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' research and development initiatives and their potential contribution to future operational results, ability of pilots to lead to mutually beneficial partnerships, payment of future cash dividends, financial resources and potential for future growth, market acceptance and penetration of new or expanded product offerings, and future revenues, income 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 risks related to Abaxis' manufacturing operations, including the vulnerability of its manufacturing operations to potential interruptions and delays and its ability to manufacture products free of defects, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results and difficulty in predicting future results, Abaxis' dependence on Abbott Point of Care, Inc. for its U.S. medical sales, the performance of Abaxis' independent distributors and Abaxis' ability to manage their inventory levels effectively, dependence on sole or limited source suppliers, the market acceptance of Abaxis' products, expansion of Abaxis' sales and marketing and distribution efforts, dependence on key personnel, the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, 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.  Readers should also refer to the section entitled "Risk Factors" in Abaxis' annual report on Form 10‑K, and subsequently filed quarterly reports on Form 10‑Q filed 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 to Follow

ABAXIS, INC.

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Six Months Ended

September 30,

September 30,

2015

2014

2015

2014

Revenues

$ 55,975

$ 50,471

$ 109,065

$ 94,525

Cost of revenues

24,013

22,395

47,711

42,746

  Gross profit

31,962

28,076

61,354

51,779

Operating expenses:

   Research and development 

4,689

4,232

9,412

8,179

   Sales and marketing 

10,785

10,619

21,371

19,451

   General and administrative

4,319

3,797

7,777

6,705

Total operating expenses

19,793

18,648

38,560

34,335

Income from operations

12,169

9,428

22,794

17,444

  Interest and other income (expense), net

126

(445)

485

(398)

Income from continuing operations before income tax provision

12,295

8,983

23,279

17,046

  Income tax provision

4,472

3,271

8,461

6,260

Income from continuing operations

7,823

5,712

14,818

10,786

Discontinued operations

  Loss from discontinued operations, net of tax

(7)

(312)

(7)

(671)

Net income

$   7,816

$   5,400

$   14,811

$ 10,115

Net income (loss) per share:

  Basic

    Continuing operations

$     0.34

$     0.25

$       0.65

$     0.48

    Discontinued operations

-

(0.01)

-

(0.03)

  Basic net income per share

$     0.34

$     0.24

$       0.65

$     0.45

  Diluted

    Continuing operations

$     0.34

$     0.25

$       0.65

$     0.48

    Discontinued operations

-

(0.01)

-

(0.03)

  Diluted net income per share

$     0.34

$     0.24

$       0.65

$     0.45

Shares used in the calculation of net income per share:

  Weighted average common shares outstanding - basic

22,701

22,507

22,663

22,458

  Weighted average common shares outstanding - diluted

22,863

22,690

22,876

22,678

Cash dividends declared per share

$     0.11

$     0.10

$       0.22

$     0.20

 

ABAXIS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)

September 30,

March 31,

2015

2015

Current assets:

 Cash and cash equivalents

$           83,633

$  107,015

 Short-term investments

49,508

26,109

 Receivables, net

30,398

29,015

 Inventories

34,450

36,179

 Prepaid expenses and other current assets

5,669

2,893

 Net deferred tax assets, current

6,576

6,575

 Current assets of discontinued operations

101

2,075

   Total current assets 

210,335

209,861

Long-term investments

22,088

24,181

Investment in unconsolidated affiliate

2,714

2,683

Property and equipment, net

27,260

27,316

Intangible assets, net

1,401

1,491

Net deferred tax assets, non-current

3,682

3,413

Non-current assets of discontinued operations

-

12

Other assets

661

107

   Total assets

$         268,141

$  269,064

Current liabilities:

 Accounts payable

$             7,710

$      7,277

 Accrued payroll and related expenses

9,262

11,094

 Accrued taxes

355

4,829

 Current liabilities of discontinued operations

245

5,536

 Other accrued liabilities

8,434

9,804

 Deferred revenue

1,464

1,322

 Warranty reserve

1,220

1,423

   Total current liabilities

28,690

41,285

Non-current liabilities:

 Deferred revenue

2,751

3,219

 Warranty reserve

1,604

1,733

 Net deferred tax liabilities

310

310

 Notes payable, less current portion

430

480

 Other non-current liabilities

1,833

1,843

   Total non-current liabilities

6,928

7,585

   Total liabilities

35,618

48,870

Shareholders' equity:

 Common stock

135,069

132,559

 Retained earnings 

97,461

87,643

 Accumulated other comprehensive loss

(7)

(8)

   Total shareholders' equity

232,523

220,194

   Total liabilities and shareholders' equity

$         268,141

$  269,064

 

Revenues by Geographic Region and Customer Group

(Unaudited and in thousands)

The following table presents our revenues by source for the three and six months ended September 30, 2015 and 2014.

Three Months Ended

Six Months Ended

September 30,

September 30,

Revenues by Geographic Region

2015

2014

2015

2014

North America

$ 45,176

$ 41,039

$   87,487

$ 75,956

International

10,799

9,432

21,578

18,569

Total revenues

$ 55,975

$ 50,471

$ 109,065

$ 94,525

Three Months Ended

Six Months Ended

September 30,

September 30,

Revenues by Customer Group

2015

2014

2015

2014

Medical Market

$   8,631

$   7,616

$   17,315

$ 14,861

Veterinary Market

46,599

42,096

90,188

78,040

Other

745

759

1,562

1,624

Total revenues

$ 55,975

$ 50,471

$ 109,065

$ 94,525

 

SOURCE Abaxis, Inc.



RELATED LINKS

http://www.abaxis.com