Abaxis Reports Record Revenues For The Third Quarter Of Fiscal 2013

UNION CITY, Calif., Jan. 31, 2013 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the third fiscal quarter ended December 31, 2012.

Record quarterly highlights include:

  • Revenues of $49.8 million, up 32% over last year's comparable quarter.
  • North America revenues of $41.8 million, up 31% over last year's comparable quarter.
  • Medical market revenues of $9.0 million, up 10% over last year's comparable quarter.
  • Veterinary market revenues of $39.9 million, up 40% over last year's comparable quarter.
  • Total medical and veterinary instrument revenues of $14.0 million, up 54% over last year's comparable quarter.
  • Total medical and veterinary instrument sales of 1,818 units, up 52% over last year's comparable quarter.
  • Total medical and veterinary reagent disc sales of $26.7 million, up 31% over last year's comparable quarter.
  • Total medical and veterinary reagent disc sales of 2.1 million units, up 29% over last year's comparable quarter.

Other quarterly highlights include:

  • International revenues of $8.0 million, up 33% over last year's comparable quarter.
  • Service revenues from Abaxis Veterinary Reference Laboratories (AVRL) of $1.4 million, up 28% over the second quarter of fiscal 2013.
  • Diluted net income per share of $0.22, compared to $0.13 per share for the same period last year.

Quarterly Results:  For the fiscal quarter ended December 31, 2012, Abaxis reported revenues of $49.8 million, as compared with revenues of $37.9 million for the comparable period last year, an increase of 32 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i-STAT analyzers, increased by an aggregate of $4.9 million or 54 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 an aggregate of $6.0 million, or 22 percent, over the same period last year.  Abaxis reported net income of $5.0 million for the fiscal quarter ended December 31, 2012, compared to $2.9 million for the same period last year, an increase of 75 percent.  Abaxis' effective tax rate in the quarter ended December 31, 2012 was 38 percent, compared to 37 percent for the same period last year.  Abaxis reported diluted net income per share of $0.22 (calculated based on 22,341,000 shares) for the three-month period ended December 31, 2012, compared to $0.13 per share (calculated based on 21,990,000 shares) for the same period last year. 

Nine-Month Results:  For the nine-month period ended December 31, 2012, Abaxis reported revenues of $136.1 million, as compared with revenues of $113.9 million for the comparable period last year, an increase of 19 percent.  Revenues from instrument sales increased by an aggregate of $10.1 million, or 40 percent, over the same period last year.  Revenues from consumables increased by an aggregate of $8.7 million, or 10 percent, over the same period last year.  The company reported net income of $20.8 million, including gain from the company's litigation settlement in the second quarter of fiscal 2013, compared to $8.4 million for the same period last year.  The company's effective tax rate in the nine-month period ended December 31, 2012, was 38 percent, compared to 37 percent for the same period last year.  The company reported diluted net income per share of $0.93 (calculated based on 22,316,000 shares) for the nine-month period ended December 31, 2012, compared to $0.37 per share (calculated based on 22,579,000 shares) for the same period last year. 

Other Reported Information:  Total sales in the medical market for the third quarter of fiscal 2013 were $9.0 million, an increase of 10 percent, compared to the same period last year.  Medical sales worldwide, excluding sales to the U.S. government, during the third quarter of fiscal 2013 were $8.6 million, an increase of 15 percent, compared to the same period last year.  Total sales in the veterinary market for the third quarter of fiscal 2013 were $39.9 million, an increase of 40 percent, compared to the same period last year.  Total medical and veterinary reagent disc sales for the third quarter of fiscal 2013 were $26.7 million, an increase of 31 percent compared to the same period last year.  Non-cash compensation expense recognized for share-based awards during the third quarter of fiscal 2013 was $1.8 million, compared to $1.5 million for the same period last year.  

On December 6, 2012, the company's Board of Directors declared a special cash dividend of $1.00 per share on the company's outstanding common stock.  The dividend payment totaling approximately $22.0 million was made on December 28, 2012.

Clint Severson, chairman and chief executive officer of Abaxis, said, "The financial results of the third quarter of fiscal 2013 were very strong.  We are steadily executing on our strategic plan to drive sales and net income, as total revenues increased 32% and net income increased 75%, compared to last year's third quarter.  Overall we achieved record quarterly reagent disc sales and instrument sales increased at solid double digit rates compared to third quarter of fiscal 2012.  We are particularly pleased and encouraged with the development of our working relationships with our two new distributors, Abbott Point of Care, Inc. and MWI Veterinary Supply, Inc.  These new distribution channels give us entry into markets to which we previously had very little access and expand the universe into which we can embed Abaxis technology.  While we are still in the early stages of working together, we are developing the necessary chemistry between our respective organizations that will ensure long-term success."

"We are also pleased with the progress achieved in the international markets during the quarter," continued Mr. Severson.  "Sales in both Europe and Asia continued to improve and grew at a 33% rate compared to last year's third quarter.  Although macroeconomic conditions throughout the world continue to be challenging, our dedication to building these markets during these most difficult times is beginning to bear real fruit.  All in all, we had a very solid quarter and we look to finish the year on a strong note in both our veterinary and medical markets."

Conference Call

Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, January 31, 2013.  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 10024107, through February 7, 2013.  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 develop, 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.

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' 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 and risks related to condition of the United States economy.  Readers should also refer to the section entitled "Risk Factors" in Abaxis' Annual Report on Form 10-K, its most recent Quarterly Report on Form 10-Q and Abaxis' other periodic reports 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

(In thousands, except per share data)

(Unaudited)







Three Months Ended

Nine Months Ended


December 31,

December 31,


2012

2011

2012

2011

Revenues

$            49,802

$            37,850

$          136,074

$          113,878

Cost of revenues

23,726

17,372

64,026

52,156

Gross profit

26,076

20,478

72,048

61,722

Operating expenses:





   Research and development 

3,802

2,634

10,348

9,096

   Sales and marketing 

12,373

9,927

35,647

28,414

   General and administrative

2,210

3,280

10,153

11,194

   Gain from legal settlement

-

-

(17,250)

-

Total operating expenses

18,385

15,841

38,898

48,704

Income from operations

7,691

4,637

33,150

13,018

Interest and other income (expense), net

293

(91)

318

259

Income before income tax provision

7,984

4,546

33,468

13,277

Income tax provision

2,996

1,696

12,707

4,892

Net income

$              4,988

$              2,850

$            20,761

$              8,385

Net income per share:





  Basic net income per share

$                0.23

$                0.13

$                0.95

$                0.38

  Diluted net income per share

$                0.22

$                0.13

$                0.93

$                0.37






Shares used in the calculation of net income per share:





  Weighted average common shares outstanding - basic

21,968

21,672

21,902

22,213

  Weighted average common shares outstanding - diluted

22,341

21,990

22,316

22,579


ABAXIS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)





December 31,

March 31,


2012

2012

Current assets:



 Cash and cash equivalents

$             47,427

$             45,843

 Short-term investments

22,644

21,689

 Receivables, net

36,094

30,694

 Inventories

25,069

19,597

 Prepaid expenses and other current assets

7,067

5,423

 Net deferred tax assets, current

4,356

4,151

   Total current assets 

142,657

127,397

Long-term investments

21,712

23,442

Investment in unconsolidated affiliate

2,613

2,626

Property and equipment, net

25,512

24,296

Intangible assets, net

3,515

3,990

Other assets

97

85

   Total assets

$           196,106

$           181,836




Current liabilities:



 Accounts payable

$             11,536

$               6,381

 Accrued payroll and related expenses

8,380

6,336

 Accrued taxes

229

266

 Other accrued liabilities

2,314

1,991

 Deferred revenue

1,388

1,212

 Warranty reserve

993

1,245

   Total current liabilities

24,840

17,431

Non-current liabilities:



 Deferred rent

712

641

 Net deferred tax liabilities

159

199

 Deferred revenue

3,517

2,396

 Warranty reserve

473

601

 Notes payable, less current portion

707

783

   Total non-current liabilities

5,568

4,620

   Total liabilities

30,408

22,051

Shareholders' equity:



 Common stock

117,217

110,063

 Retained earnings 

48,435

49,697

 Accumulated other comprehensive income

46

25

   Total shareholders' equity

165,698

159,785

   Total liabilities and shareholders' equity

$           196,106

$           181,836











Operating Income Per Share





(In thousands, except per share data)






Three Months Ended

Nine Months Ended


December 31,

December 31,


2012

2011

2012

2011

Shares used in the calculation of operating income per share:





  Weighted average common shares outstanding - basic

21,968

21,672

21,902

22,213

  Weighted average common shares outstanding - diluted

22,341

21,990

22,316

22,579






Operating income per share - basic

$            0.35

$            0.21

$            1.51

$            0.59

Operating income per share - diluted

$            0.34

$            0.21

$            1.49

$            0.58











Revenues by Geographic Region





(In thousands)






Three Months Ended

Nine Months Ended


December 31,

December 31,


2012

2011

2012

2011

North America

$        41,797

$        31,847

$      110,876

$        93,540

International

8,005

6,003

25,198

20,338

Total revenues

$        49,802

$        37,850

$      136,074

$      113,878











Revenues by Customer Group





(In thousands)






Three Months Ended

Nine Months Ended


December 31,

December 31,


2012

2011

2012

2011

Medical Market

$          8,977

$          8,147

$        25,267

$        22,636

Veterinary Market

39,865

28,467

107,299

87,684

Other

960

1,236

3,508

3,558

Total revenues

$        49,802

$        37,850

$      136,074

$      113,878

 

 

SOURCE Abaxis, Inc.



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