UNION CITY, Calif.,
Oct. 25, 2016 /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, 2016.
Second quarter overview:
- Revenues of $58.6 million, up 5%
over last year's comparable quarter.
- Diluted net income per share from continuing operations of
$0.51, compared to $0.34 from last year, up 50%. Diluted net income
per share for the second quarter includes the effect of the gain
from the sale of an equity method investment. Excluding the effect
of this gain, non-GAAP net income per share from continuing
operations was $0.34 for the second
quarter of fiscal 2017.
Revenues highlights:
- Medical market revenues of $9.4
million, up 9% over last year's comparable quarter.
- Veterinary market revenues of $48.3
million, up 4% over last year's comparable quarter.
- Revenues from sales of consumables, which include reagent
discs, hematology reagent kits, VSpro specialty cartridges,
i-STAT cartridges and rapid tests, of $45.5
million, up 9% over last year's comparable quarter.
- Total medical and veterinary reagent disc revenues of
$31.7 million, up 3% over last year's
comparable quarter.
- Total medical and veterinary reagent disc sales of 2.6 million
units, up 8% over last year's comparable quarter.
- Total medical and veterinary instrument revenues of
$9.8 million, down 15% compared to
last year's comparable quarter.
- Total medical and veterinary instrument sales of 1,443 units,
down 4% compared to last year's comparable quarter.
- North America revenues of
$47.0 million, up 4% over last year's
comparable quarter.
- International revenues of $11.5
million, up 7% over last year's comparable quarter.
Other financial highlights:
- Gross profit of $32.3 million, up
1% over last year's comparable quarter.
- Cash, cash equivalents and investments as of September 30, 2016 of $161.1 million.
- Abaxis paid dividends of $2.7
million, or $0.12 per share
during the second quarter of fiscal 2017.
Management Discussion
Clint Severson, chairman and
chief executive officer of Abaxis, said, "The results of the second
quarter of fiscal 2017 continued to build on the progress achieved
in the first quarter of the year. Medical market revenues
increased nine percent and veterinary market revenues grew by four
percent, compared to the same period last year. Consumables
sales accounted for 78% of total revenues and increased by nine
percent during the quarter, compared to the same period last year.
Additionally, we achieved international sales growth of seven
percent over the same period last year. We were particularly
pleased with revenue growth of 19% in medical reagent discs over
the same period last year and unit sales of medical reagent discs
now account for 40% of total reagent disc unit sales. We have
made consistent progress in building our medical business, which we
believe has significant growth prospects in the coming years.
Our business model has generated consistent growth as we have
continued to invest and work on a number of new initiatives that we
believe will move us to the next level of our development.
"During the second quarter, we achieved some key milestones with
the successful completion of development of our FUSE web-based
integration system that provides connectivity between our
point-of-care diagnostic instruments and the veterinary practice
management systems, which we refer to as PMS. We believe the
seamless connectivity between PMS and our leading edge
point-of-care diagnostic instruments is a significant advantage in
the market place. We have successfully completed the rollout
of our VetScan hematology instruments into Banfield Pet
Hospitals. We are pleased with positive feedback on the
instrument performance and our level of service.
Additionally, our VetScan VUE, an app-based automated rapid assay
test reader released last quarter, continued to gain positive
traction, as our rapid test revenues grew 37% during the quarter,
compared to the same period last year."
Mr. Severson concluded, "All of this is done against the
backdrop of the strong financial foundation of the company.
At the end of the quarter, cash, cash equivalents and short-
and long-term investments totaled $161.1
million. We continued to manage the company
conservatively and fund operations, as well as our quarterly
dividend, from internally generated cash flow."
Results of Operations
Quarterly Results
For the fiscal quarter ended September
30, 2016, Abaxis reported revenues from continuing
operations of $58.6 million, as
compared with revenues of $56.0
million for the comparable period last year, an increase of
5%. Revenues from sales of instruments, which include
chemistry analyzers, hematology instruments, VSpro specialty
analyzers and i‑STAT analyzers, decreased by $1.8 million, or 15%, 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
$3.8 million, or 9%, over the same
period last year. Abaxis reported net income from continuing
operations of $11.5 million (which
includes a gain from sale of an equity method investment of
$3.8 million after tax) for the
fiscal quarter ended September 30,
2016, compared to $7.8 million
for the fiscal quarter ended September
30, 2015. Abaxis' effective tax rate in the fiscal
quarter ended September 30, 2016 was
36%, compared to 36% for the same period last year. Abaxis
reported diluted net income per share of $0.50 (calculated based on 22,745,000 shares) for
the fiscal quarter ended September 30,
2016, compared to $0.34 per
share (calculated based on 22,863,000 shares) for the same period
last year.
Six-Month Results
For the six-month period ended September
30, 2016, Abaxis reported revenues from continuing
operations of $116.2 million, as
compared with revenues of $109.1
million for the comparable period last year, an increase of
7%. Revenues from instrument sales decreased by $0.4 million, or 2%, compared to the same period
last year. Revenues from consumables sales, increased by
$6.7 million, or 8%, over the same
period last year. Abaxis reported net income from continuing
operations of $18.4 million (which
includes a gain from sale of an equity method investment of
$3.8 million after tax) for the
six-month period ended September 30,
2016, compared to $14.8
million for the six month period ended September 30, 2015. Abaxis' effective tax
rate in the six-month period ended September
30, 2016 was 36%, compared to 36% for the same period last
year. Abaxis reported diluted net income per share of
$0.81 (calculated based on 22,720,000
shares) for the six-month period ended September 30, 2016, compared to $0.65 per share (calculated based on 22,876,000
shares) for the same period last year.
Other Reported Information
In August 2016, Abaxis sold its
15% equity ownership interest in Scandinavian Micro Biodevices APS
("SMB") as a result of Zoetis Inc.'s acquisition of SMB. The
total purchase price for Abaxis' equity method investment in SMB
was approximately $9.7 million in
cash, subject to a holdback for certain adjustments that may
occur. The holdback payment is expected to be released 18
months following the closing date. In connection with the
sale, Abaxis received a cash payment of $8.5
million and recorded a pre-tax gain of $6.1 million ($3.8
million after tax) on the sale of its equity method
investment during the three and six months ended September 30, 2016.
Non-cash compensation expense recognized for share-based awards
during the three months ended September 30,
2016 and 2015 was $3.1 million
and $3.0 million, respectively.
Abaxis paid $2.7 million in cash
dividends to shareholders during the second quarter of fiscal
2017.
Conference Call
Abaxis has scheduled a conference call to discuss its financial
results at 4:15 p.m. Eastern Time on
Tuesday, October 25, 2016.
Participants can dial (844) 855-9498 or (412) 317-5496 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 10094876, through November
1, 2016. 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.
Non-GAAP Financial Measures
To supplement the financial statements presented in accordance
with United States generally
accepted accounting principles (GAAP), Abaxis uses the non-GAAP
financial measures of non-GAAP net income per share. 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. Abaxis defines non-GAAP net income per share as net
income per share excluding from net income the recognized gain from
the sale of an equity method investment and related costs,
including the portion of our income tax provision associated with
such gain. Abaxis uses this non-GAAP financial measure for
financial and operational decision making and as a means to
evaluate period-to-period comparisons. Management believes
that this non-GAAP financial measure provides meaningful
supplemental information regarding Abaxis' performance and
liquidity by excluding certain income, such as gain from sale of an
equity method investment and related costs, that may not be
indicative of recurring core business operating results or
operating performance. A reconciliation from GAAP net income
per share to non-GAAP net income per share has been provided in the
financial statement tables included below in this press
release.
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' growth prospects in the coming years, the
ability of Abaxis' investments and work on new initiatives to move
Abaxis to the next level of development, the advantage that
seamless connectivity between PMS and Abaxis' leading edge
point-of-care diagnostics instruments provides in the market place,
the strength of Abaxis' performance in future periods and payment
of future cash dividends. 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, Abaxis' ability to compete
effectively, market acceptance of Abaxis' products, fluctuations in
quarterly operating results and difficulty in predicting future
results, the performance of Abaxis' independent distributors and
Abaxis' ability to manage their inventory levels effectively,
expansion of Abaxis' sales and marketing and distribution efforts,
Abaxis' dependence on Abbott Point of Care, Inc. for its U.S.
medical sales, dependence on sole or limited source suppliers, the
effect of exchange rate fluctuations on international operations,
dependence on key personnel, 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,
|
|
2016
|
2015
|
2016
|
2015
|
Revenues
|
$
58,552
|
$
55,975
|
$
116,248
|
$
109,065
|
Cost of
revenues
|
26,294
|
24,013
|
51,989
|
47,711
|
Gross
profit
|
32,258
|
31,962
|
64,259
|
61,354
|
Operating
expenses:
|
|
|
|
|
Research
and development
|
4,906
|
4,689
|
10,139
|
9,412
|
Sales
and marketing
|
11,254
|
10,785
|
23,078
|
21,371
|
General
and administrative
|
4,353
|
4,319
|
8,555
|
7,777
|
Total operating
expenses
|
20,513
|
19,793
|
41,772
|
38,560
|
Income from
operations
|
11,745
|
12,169
|
22,487
|
22,794
|
Interest and other
income (expense), net
|
6,279
|
126
|
6,249
|
485
|
Income from
continuing operations before income tax provision
|
18,024
|
12,295
|
28,736
|
23,279
|
Income tax
provision
|
6,537
|
4,472
|
10,359
|
8,461
|
Income from
continuing operations
|
11,487
|
7,823
|
18,377
|
14,818
|
Discontinued
operations
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(55)
|
(7)
|
(55)
|
(7)
|
Net income
|
$
11,432
|
$
7,816
|
$
18,322
|
$
14,811
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
|
|
|
|
Continuing operations
|
$
0.51
|
$
0.34
|
$
0.82
|
$
0.65
|
Discontinued operations
|
-
|
-
|
(0.01)
|
-
|
Basic net
income per share
|
$
0.51
|
$
0.34
|
$
0.81
|
$
0.65
|
Diluted
|
|
|
|
|
Continuing operations
|
$
0.51
|
$
0.34
|
$
0.81
|
$
0.65
|
Discontinued operations
|
(0.01)
|
-
|
-
|
-
|
Diluted net
income per share
|
$
0.50
|
$
0.34
|
$
0.81
|
$
0.65
|
|
|
|
|
|
Shares used in the
calculation of net income per share:
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,522
|
22,701
|
22,494
|
22,663
|
Weighted
average common shares outstanding - diluted
|
22,745
|
22,863
|
22,720
|
22,876
|
|
|
|
|
|
|
ABAXIS,
INC.
Condensed
Consolidated Balance Sheets
(Unaudited and in
thousands)
|
|
|
September
30,
|
March
31,
|
|
2016
|
2016
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
90,393
|
$
88,323
|
Short-term
investments
|
55,120
|
41,474
|
Receivables,
net
|
35,269
|
35,148
|
Inventories
|
36,233
|
35,131
|
Prepaid
expenses and other current assets
|
4,795
|
6,351
|
Net deferred
tax assets, current
|
4,811
|
4,810
|
Current assets
of discontinued operations
|
48
|
961
|
Total
current assets
|
226,669
|
212,198
|
Long-term
investments
|
15,584
|
22,458
|
Investment in
unconsolidated affiliate
|
3,000
|
2,705
|
Property and
equipment, net
|
32,452
|
26,842
|
Intangible assets,
net
|
1,248
|
1,324
|
Net deferred tax
assets, non-current
|
4,508
|
3,903
|
Other
assets
|
4,978
|
1,950
|
Total
assets
|
$
288,439
|
$
271,380
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
7,270
|
$
7,292
|
Accrued payroll
and related expenses
|
9,238
|
8,349
|
Accrued
taxes
|
31
|
1,145
|
Current
liabilities of discontinued operations
|
76
|
112
|
Other accrued
liabilities
|
9,629
|
9,393
|
Deferred
revenue
|
1,634
|
1,600
|
Warranty
reserve
|
1,539
|
1,281
|
Total
current liabilities
|
29,417
|
29,172
|
Non-current
liabilities:
|
|
|
Deferred
revenue
|
1,790
|
2,274
|
Warranty
reserve
|
2,411
|
1,927
|
Net deferred
tax liabilities
|
277
|
384
|
Notes payable,
less current portion
|
328
|
379
|
Other
non-current liabilities
|
1,089
|
932
|
Total
non-current liabilities
|
5,895
|
5,896
|
Total
liabilities
|
35,312
|
35,068
|
Shareholders'
equity:
|
|
|
Common
stock
|
130,906
|
127,016
|
Retained
earnings
|
122,222
|
109,303
|
Accumulated
other comprehensive loss
|
(1)
|
(7)
|
Total
shareholders' equity
|
253,127
|
236,312
|
Total
liabilities and shareholders' equity
|
$
288,439
|
$
271,380
|
|
|
|
The following table presents our revenues by source for the
three and six months ended September 30,
2016 and 2015.
|
Revenues by
Geographic Region and Customer Group
|
|
|
|
|
(Unaudited and in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
September
30,
|
September
30,
|
|
2016
|
2015
|
2016
|
2015
|
Revenues by
Geographic Region
|
|
|
|
|
North
America
|
$
47,017
|
$
45,176
|
$
93,790
|
$
87,487
|
International
|
11,535
|
10,799
|
22,458
|
21,578
|
Total
revenues
|
$
58,552
|
$
55,975
|
$
116,248
|
$
109,065
|
|
|
|
|
|
Revenues by
Customer Group
|
|
|
|
|
Medical
Market
|
$
9,381
|
$
8,631
|
$
18,478
|
$
17,315
|
Veterinary
Market
|
48,290
|
46,599
|
96,021
|
90,188
|
Other
|
881
|
745
|
1,749
|
1,562
|
Total
revenues
|
$
58,552
|
$
55,975
|
$
116,248
|
$
109,065
|
|
|
|
|
|
The following table presents our calculation of non-GAAP net
income and non-GAAP net income per share to exclude from net income
the recognized gain from the sale of an equity method investment
and related costs, including the portion of our income tax
provision associated with such gain in the three and six months
ended September 30, 2016.
Non-GAAP Net
Income and Non-GAAP Net Income Per Share
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
September 30,
2016
|
|
September 30,
2016
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
Results
|
Adjustments
(1)
|
Results
|
|
Results
|
Adjustments
(1)
|
Results
|
Income from
operations
|
$ 11,745
|
$
-
|
$
11,745
|
|
$ 22,487
|
$
-
|
$
22,487
|
Interest and other
income (expense), net
|
6,279
|
(6,054)
|
225
|
|
6,249
|
(6,054)
|
195
|
Income from
continuing operations before income tax provision
|
18,024
|
(6,054)
|
11,970
|
|
28,736
|
(6,054)
|
22,682
|
Income tax
provision
|
6,537
|
(2,292)
|
4,245
|
|
10,359
|
(2,292)
|
8,067
|
Income from
continuing operations
|
11,487
|
(3,762)
|
7,725
|
|
18,377
|
(3,762)
|
14,615
|
Discontinued
operations
|
|
|
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(55)
|
-
|
(55)
|
|
(55)
|
-
|
(55)
|
Net income
|
$ 11,432
|
$
(3,762)
|
$
7,670
|
|
$ 18,322
|
$
(3,762)
|
$
14,560
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.51
|
|
$
0.34
|
|
$
0.82
|
|
$
0.65
|
Discontinued operations
|
-
|
|
-
|
|
(0.01)
|
|
-
|
Basic net
income per share
|
$
0.51
|
|
$
0.34
|
|
$
0.81
|
|
$
0.65
|
Diluted
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.51
|
|
$
0.34
|
|
$
0.81
|
|
$
0.64
|
Discontinued operations
|
(0.01)
|
|
-
|
|
-
|
|
-
|
Diluted net
income per share
|
$
0.50
|
|
$
0.34
|
|
$
0.81
|
|
$
0.64
|
|
|
|
|
|
|
|
|
Shares used in the
calculation of net income per share:
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,522
|
|
22,522
|
|
22,494
|
|
22,494
|
Weighted
average common shares outstanding - diluted
|
22,745
|
|
22,745
|
|
22,720
|
|
22,720
|
|
|
|
|
|
|
|
|
(1) To eliminate adjustments for gain on sale of an equity
method investment and related income tax effect recorded in the
three and six months ended September 30,
2016.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/abaxis-reports-financial-performance-for-the-second-quarter-of-fiscal-2017-300350937.html
SOURCE Abaxis, Inc.