Abaxis Reports Financial Performance For The Fourth Quarter And Fiscal 2013

 Abaxis Reports Financial Performance For The Fourth Quarter And Fiscal 2013

PR Newswire

UNION CITY, Calif., April 25, 2013

UNION CITY, Calif., April 25, 2013 /PRNewswire/ --Abaxis, Inc. (NasdaqGS:
ABAX), a medical products company manufacturing point-of-care blood analysis
systems, today reported financial results for the fourth quarter and fiscal
year ended March 31, 2013.

Record fourth quarter and fiscal 2013 results include:

  oRevenues of $50.0 million for the fourth quarter, up 17% over last year's
    comparable quarter, and $186.0 million for fiscal 2013, up 19%
    year-over-year.
  oNorth America revenues of $41.9 million for the fourth quarter, up 18%
    over last year's comparable quarter, and $152.8 million for fiscal 2013,
    up 18% year-over-year.
  oVeterinary market revenues of $42.9 million for the fourth quarter, up 25%
    over last year's comparable quarter, and $150.5 million for fiscal 2013,
    up 23% year-over-year.
  oTotal medical and veterinary reagent disc sales of $27.0 million for the
    fourth quarter, up 14% over last year's comparable quarter, and $99.3
    million for fiscal 2013, up 13% year-over-year.

Other fourth quarter and fiscal 2013 highlights include:

  oInternational revenues of $8.1 million for the fourth quarter, up 10% over
    last year's comparable quarter, and $33.3 million for fiscal 2013, up 20%
    year-over-year.
  oTotal medical and veterinary instrument revenues of $10.6 million for the
    fourth quarter, up 8% over last year's comparable quarter, and $46.0
    million for fiscal 2013, up 31% year-over-year.
  oTotal medical and veterinary instrument sales of 1,485 units for the
    fourth quarter, up 13% over last year's comparable quarter, and 6,173
    units for fiscal 2013, up 30% year-over-year.
  oTotal medical and veterinary reagent disc sales of 2.0 million units for
    the fourth quarter, up 11% over last year's comparable quarter, and 7.5
    million units for fiscal 2013, up 11% year-over-year.
  oDiluted net income per share of $0.30 for the fourth quarter, up 43% over
    last year's comparable quarter.
  oService revenues from Abaxis Veterinary Reference Laboratories (AVRL) of
    $1.8 million for the fourth quarter, up 31% over the third quarter of
    fiscal 2013.

Quarterly Results: For the fiscal quarter ended March 31, 2013, Abaxis
reported revenues of $50.0 million, as compared with revenues of $42.7 million
for the comparable period last year, an increase of 17 percent. Revenues from
sales of instruments, which include chemistry analyzers, hematology
instruments, VSpro specialty analyzers and i-STAT analyzers, increased by an
aggregate of $0.8 million or 8 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 $5.0 million, or 16 percent, over the same period
last year. Abaxis reported net income of $6.7 million for the fiscal quarter
ended March 31, 2013, compared to $4.7 million for the same period last year,
an increase of 42 percent. Abaxis' effective tax rate in the quarter ended
March 31, 2013 was 25 percent, compared to 32 percent for the same period last
year. Abaxis reported diluted net income per share of $0.30 (calculated based
on 22,486,000 shares) for the three-month period ended March 31, 2013,
compared to $0.21 per share (calculated based on 22,070,000 shares) for the
same period last year.

Fiscal 2013 Results: For the fiscal year ended March 31, 2013, Abaxis
reported revenues of $186.0 million, as compared with revenues of $156.6
million for the prior year, an increase of 19 percent. Revenues from
instruments increased by an aggregate of $10.9 million, or 31 percent, over
the prior year. Revenues from consumables increased by an aggregate of $13.7
million, or 12 percent, over the prior year. The company reported net income
of $27.5 million, including gain from the company's litigation settlement in
the second quarter of fiscal 2013, compared to $13.1 million for the prior
year. The company's effective tax rate in fiscal 2013 and 2012 was 35
percent. The company reported diluted net income per share of $1.23
(calculated based on 22,381,000 shares) for fiscal 2013, compared to $0.58 per
share (calculated based on 22,462,000 shares) for fiscal 2012.

Other Reported Information: Total sales in the medical market for the fourth
quarter of fiscal 2013 were $6.3 million, a decrease of 18 percent compared to
the same period last year. Medical sales worldwide, excluding sales to the
U.S. government, during the fourth quarter of fiscal 2013 were $5.7 million, a
decrease of 20 percent compared to the same period last year. Total sales in
the veterinary market for the fourth quarter of fiscal 2013 were $42.9
million, an increase of 25 percent, compared to the same period last year.
Total medical and veterinary reagent disc sales for the fourth quarter of
fiscal 2013 were $27.0 million, an increase of 14 percent compared to the same
period last year. Non-cash compensation expense recognized for share-based
awards during the fourth quarter of fiscal 2013 was $1.8 million, compared to
$1.5 million for the same period last year.

Clint Severson, chairman and chief executive officer of Abaxis, said, "We are
pleased with the operating results achieved in the fourth quarter and fiscal
year 2013. Instrument sales across the board, including both the veterinary
and the medical markets, were up 31 percent for the year. Reagent disc unit
sales for the year were up 11 percent to a record 7.5 million units.
Additionally, we are gratified that the ten-year compounded annual growth
rate in our total reagent disc unit sales is greater than 15 percent. Sales
in North America and internationally were up 18 percent and 20 percent,
respectively. One of the key strengths of the company is our higher margin
consumable sales, which increased 16 percent in the fourth quarter and
represented 72 percent of total fourth quarter revenue. We remain firmly
focused on maximizing this core component of our business which constitutes
our recurring revenue stream."

"Fiscal year 2013 marks the 12th consecutive year of profitability for Abaxis.
Given the challenging global macroeconomic conditions of the past five years,
we are extremely proud of our ability to operate effectively and profitably in
uncertain times," continued Mr. Severson. "The financial underpinnings of the
company are very strong. We maintain a solid cash position, which provides us
a level of stability during these difficult times. During fiscal year 2013,
we paid a special one-time dividend to our loyal shareholders. Looking ahead,
we are excited about our strategic initiatives and the opportunities with our
new distributors, Abbott Point of Care, Inc. for medical products and MWI
Veterinary Supply, Inc. for animal health products. Our expectation is that
as the medical market distribution channel becomes more developed in the
coming quarters, medical market products will also become consistent
double-digit growers. We are excited with the possibilities ahead."

Conference Call

Abaxis has scheduled a conference call to discuss its results at 4:15 p.m.
Eastern Time on Thursday, April 25, 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 10027780, through
May 1, 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 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.

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 transitioning our medical sales to Abbott, 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      Twelve Months Ended
                           March 31,               March 31,
                           2013        2012        2013          2012
Revenues                   $        $      $         $    
                           49,951     42,718     186,025      156,596
Cost of revenues           23,768      19,337      87,794        71,493
Gross profit               26,183      23,381      98,231        85,103
Operating expenses:
 Research and            3,229       3,150       13,577        12,246
development
 Sales and marketing    11,296      11,204      46,943        39,618
 General and             2,672       2,588       12,825        13,782
administrative
 Gain from legal         -           -           (17,250)      -
settlement
Total operating expenses   17,197      16,942      56,095        65,646
Income from operations     8,986       6,439       42,136        19,457
Interest and other income  (65)        451         253           710
(expense), net
Income before income tax   8,921       6,890       42,389        20,167
provision
Income tax provision       2,223       2,184       14,930        7,076
Net income                 $       $      $        $     
                           6,698       4,706    27,459       13,091
Net income per share:
 Basic net income per     $      $      $       $      
share                      0.30         0.22    1.25        0.59
 Diluted net income per   $      $      $       $      
share                      0.30         0.21    1.23        0.58
Shares used in the
calculation of net income
per share:
 Weighted average common  22,081      21,693      21,946        22,084
shares outstanding - basic
 Weighted average common
shares outstanding -       22,486      22,070      22,381        22,462
diluted



ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
                                         March 31,             March 31,
                                         2013                  2012
Current assets:
Cash and cash equivalents               $       54,910  $    45,843
Short-term investments                  23,354                21,689
Receivables, net                        40,005                30,694
Inventories                             26,786                19,597
Prepaid expenses and other current      3,319                 5,423
assets
Net deferred tax assets, current        4,589                 4,151
 Total current assets                 152,963               127,397
Long-term investments                    17,000                23,442
Investment in unconsolidated affiliate   2,613                 2,626
Property and equipment, net              25,330                24,296
Intangible assets, net                   3,122                 3,990
Net deferred tax assets, non-current     643                   -
Other assets                             92                    85
 Total assets                          $      201,763   $   181,836
Current liabilities:
Accounts payable                        $        8,123 $     6,381
Accrued payroll and related expenses    6,261                 6,336
Accrued taxes                           440                   266
Other accrued liabilities               2,838                 1,991
Deferred revenue                        1,362                 1,212
Warranty reserve                        995                   1,245
 Total current liabilities             20,019                17,431
Non-current liabilities:
Deferred rent                           729                   641
Net deferred tax liabilities            -                     199
Deferred revenue                        3,750                 2,396
Warranty reserve                        389                   601
Notes payable, less current portion     682                   783
 Total non-current liabilities         5,550                 4,620
 Total liabilities                     25,569                22,051
Shareholders' equity:
Common stock                            121,019               110,063
Retained earnings                      55,133                49,697
Accumulated other comprehensive income  42                    25
 Total shareholders' equity            176,194               159,785
 Total liabilities and shareholders'   $      201,763   $   181,836
equity



Operating Income Per Share
(In thousands, except per share data)
                                 Three Months Ended    Twelve Months Ended
                                 March 31,             March 31,
                                 2013        2012      2013        2012
Shares used in the calculation
of operating income per share:
 Weighted average common shares 22,081      21,693    21,946      22,084
outstanding - basic
 Weighted average common shares 22,486      22,070    22,381      22,462
outstanding - diluted
Operating income per share -     $      $     $      $     
basic                            0.41       0.30     1.92       0.88
Operating income per share -     $      $     $      $     
diluted                          0.40       0.29     1.88       0.87
Revenues by Geographic Region
(In thousands)
                                 Three Months Ended    Twelve Months Ended
                                 March 31,             March 31,
                                 2013        2012      2013        2012
North America                    $        $       $         $  
                                 41,898     35,429   152,774    128,969
International                    8,053       7,289     33,251      27,627
Total revenues                   $        $       $         $  
                                 49,951     42,718   186,025    156,596
Revenues by Customer Group
(In thousands)
                                 Three Months Ended    Twelve Months Ended
                                 March 31,             March 31,
                                 2013        2012      2013        2012
Medical Market                   $       $      $        $   
                                 6,277      7,682    31,643     30,404
Veterinary Market                42,916      34,256    150,510     122,253
Other                            758         780       3,872       3,939
Total revenues                   $        $       $         $  
                                 49,951     42,718   186,025    156,596





SOURCE Abaxis, Inc.

Website: http://www.abaxis.com
Contact: Abaxis, Inc., Clint Severson, Chief Executive Officer, 510-675-6500;
Lytham Partners, LLC, Joe Dorame, Robert Blum and Joe Diaz, 602-889-9700
 
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