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
Abaxis Reports Financial Performance For The First Quarter Of Fiscal 2014
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