Abaxis Reports Financial Performance For The First Quarter Of Fiscal 2014

  Abaxis Reports Financial Performance For The First Quarter Of Fiscal 2014

PR Newswire

UNION CITY, Calif., July 25, 2013

UNION CITY, Calif., July 25, 2013 /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, 2013.

Quarterly highlights include:

  oTotal veterinary instrument sales of $7.6 million, up 14% over last year's
    comparable quarter.
  oTotal veterinary instrument sales of 1,103 units, up 13% over last year's
    comparable quarter.
  oTotal sales in the veterinary market of $36.4 million, up 12% over last
    year's comparable quarter.
  oNorth America revenues of $34.7 million, up 4% over last year's comparable
    quarter.
  oRevenues of $43.2 million, up 3% over last year's comparable quarter.
  oService revenues from Abaxis Veterinary Reference Laboratories (AVRL) of
    $2.2 million, up 157% over last year's comparable quarter.
  oDiluted EPS of $0.14, up 8% over last year's comparable quarter.
  oCash, cash equivalents and short- and long-term investments as of June 30,
    2013 of $103.8 million, an increase of $8.6 million from March 31, 2013.

Quarterly Results: For the fiscal quarter ended June 30, 2013, Abaxis
reported revenues of $43.2 million, as compared with revenues of $42.0 million
for the comparable period last year, an increase of 3 percent. Revenues from
sales of instruments, which include chemistry analyzers, hematology
instruments, VSpro specialty analyzers and i-STAT analyzers, decreased by $1.2
million or 12 percent, compared to 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
$1.1 million, or 4 percent, over the same period last year. Abaxis reported
net income of $3.2 million for the fiscal quarter ended June 30, 2013,
compared to $2.9 million for the same period last year, an increase of 13
percent. Abaxis' effective tax rate in the quarter ended June 30, 2013 was 36
percent, compared to 37 percent for the same period last year. Abaxis
reported diluted net income per share of $0.14 (calculated based on 22,571,000
shares) for the three-month period ended June 30, 2013, compared to $0.13 per
share (calculated based on 22,217,000 shares) for the same period last year.

Other Reported Information: Total sales in the medical market for the first
quarter of fiscal 2014 were $6.0 million, a decrease of 29 percent compared to
the same period last year. Medical sales worldwide, excluding sales to the
U.S. government, during the first quarter of fiscal 2014 were $5.7 million, a
decrease of 27 percent compared to the same period last year. Total sales in
the veterinary market for the first quarter of fiscal 2014 were $36.4 million,
an increase of 12 percent, compared to the same period last year. Total
medical and veterinary reagent disc sales for the first quarter of fiscal 2014
were $22.8 million, a decrease of 3 percent compared to the same period last
year. Total operating expenses decreased by $1.8 million,or 10 percent,
compared to the same period last year. Non-cash compensation expense
recognized for share-based awards during the first quarter of fiscal 2014 was
$2.2 million, compared to $1.8 million for the same period last year. Abaxis'
Board of Directors has approved approximately $12 million increase to its
existing share repurchase program, to a total of $67 million.

Clint Severson, chairman and chief executive officer of Abaxis, said, "The
results for the quarter continue to reflect the impact of our transition from
a direct sales model to strategically partnering with industry leading
distributors to sell our products into the expanded markets that these
partners have developed. In that regard, we are very pleased with the 12%
increase in our worldwide veterinary business versus the comparable quarter
last year. Our distribution partner in the veterinary business, MWI
Veterinary Supply, Inc., has done an outstanding job in placing Abaxis
products since they commenced their marketing and sales efforts. In the
medical market, our distributor, Abbott Point of Care, Inc., is making
progress in integrating the Piccolo analyzer and its consumables into their
sales process. While they are still in the early stages of their roll-out,
their sales are increasing, and we fully expect that Abbott will ultimately
surpass the historical medical market sales levels of our in-house sales
team."

"We continue to gain traction in attracting new customers, and serving our
existing customers at the AVRL. On a year-over-year basis, revenue at the
AVRL increased 157%. Additionally, sales of veterinary consumables other than
veterinary reagent discs, which represent an important component of our
recurring revenue stream, were up 32% compared to last year's first quarter.
Overall, we are pleased with the progress being achieved and expect improved
operational and financial results as we move through fiscal 2014 and beyond."

Mr. Severson concluded, "The financial condition of the company remains strong
with more than $100 million in cash, cash equivalents and short- and long-term
investments. The strength of our balance sheet continues to be very important
as we successfully operate in the challenging global economic environment."

Conference Call

Abaxis has scheduled a conference call to discuss its financial results at
4:15 p.m. Eastern Time on Thursday, July 25, 2013. 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 10031352,
through August 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. For more information, visit
http://www.abaxis.com.

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 risks related
to transitioning our medical sales to Abbott, 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, recent
quarterly reports 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
                                                 June 30,
                                                 2013           2012
Revenues                                         $   43,169   $   42,014
Cost of revenues                                 22,277         19,165
Gross profit                                     20,892         22,849
Operating expenses:
 Research and development                     3,173          2,965
 Sales and marketing                          10,028         11,769
 General and administrative                    3,055          3,322
Total operating expenses                         16,256         18,056
Income from operations                           4,636          4,793
Interest and other income (expense), net         404            (230)
Income before income tax provision               5,040          4,563
Income tax provision                             1,811          1,699
Net income                                       $    3,229  $    2,864
Net income per share:
 Basic net income per share                     $     0.15 $     0.13
 Diluted net income per share                   $     0.14 $     0.13
Shares used in the calculation of net income per
share:
 Weighted average common shares outstanding -   22,229         21,817
basic
 Weighted average common shares outstanding -   22,571         22,217
diluted



ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
                                              June 30,       March 31,
                                              2013           2013
Current assets:
Cash and cash equivalents                    $   67,786  $   54,910
Short-term investments                       17,755         23,354
Receivables, net                             32,265         40,005
Inventories                                  27,530         26,786
Prepaid expenses and other current assets    2,444          3,319
Net deferred tax assets, current             4,734          4,589
 Total current assets                      152,514        152,963
Long-term investments                         18,301         17,000
Investment in unconsolidated affiliate        2,643          2,613
Property and equipment, net                   25,600         25,330
Intangible assets, net                        2,747          3,122
Net deferred tax assets, non-current          652            643
Other assets                                  85             92
 Total assets                               $  202,542   $  201,763
Current liabilities:
Accounts payable                             $    6,166 $    8,123
Accrued payroll and related expenses         6,137          6,261
Accrued taxes                                338            440
Other accrued liabilities                    2,660          2,838
Deferred revenue                             1,256          1,362
Warranty reserve                             950            995
 Total current liabilities                  17,507         20,019
Non-current liabilities:
Deferred rent                                740            729
Deferred revenue                             3,850          3,750
Warranty reserve                             377            389
Notes payable, less current portion          657            682
 Total non-current liabilities              5,624          5,550
 Total liabilities                          23,131         25,569
Shareholders' equity:
Common stock                                 121,020        121,019
Retained earnings                           58,362         55,133
Accumulated other comprehensive income       29             42
 Total shareholders' equity                 179,411        176,194
 Total liabilities and shareholders' equity $  202,542   $  201,763

The following table presents our calculation of operating income per share for
the three months ended June 30, 2013 and 2012.

Operating Income Per Share
(In thousands, except per share data)
                                                       Three Months Ended
                                                       June 30,
                                                       2013        2012
Income from operations                                 $  4,636  $  4,793
Shares used in the calculation of operating income per
share:
 Weighted average common shares outstanding - basic   22,229      21,817
 Weighted average common shares outstanding - diluted 22,571      22,217
Operating income per share - basic                     $   0.21 $   0.22
Operating income per share - diluted                   $   0.21 $   0.22



The following table presents our revenues by source for the three months ended
June 30, 2013 and 2012.

Revenues by Geographic Region and Customer Group
(In thousands)
                                                 Three Months Ended
                                                 June 30,
                                                 2013          2012
Revenues by Geographic Region
North America                                    $   34,652  $   33,164
International                                    8,517         8,850
Total revenues                                   $   43,169  $   42,014
Revenues by Customer Group (1)
Medical Market                                   $    6,038 $    8,449
Veterinary Market                                36,371        32,591
Other                                            760           974
Total revenues                                   $   43,169  $   42,014

______________________________

(1) Reclassifications of prior period revenues amounts by customer group have
been made to conform to the current period presentation. Effective in the
fourth quarter of fiscal 2013, we reclassified certain revenues from our
unallocated category to its respective business segment, either medical market
or veterinary market.

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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