Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the
“Company”, “We” or “Our”) today announced financial
results for the three and nine months ended June 30, 2019.
Robert Leasure, Jr., BASi’s President and Chief
Executive Officer commented, “Our financial results for the third
quarter met our expectations and we are pleased with our momentum.
We saw revenue growth of 16% over the 2nd quarter of 2019 and
overall revenue growth of 66.1% over the first nine months of 2018,
including growth attributable to both the Seventh Wave acquisition
and the Smithers Avanza acquisition. Even though the third
fiscal quarter included over $200,000 in acquisition related cost,
net income improved as compared to the second quarter. Our quoting
activity and services backlog continue to grow as a result of the
acquisitions and investments in sales and marketing. We are
beginning to see the results we envisioned from our strategic
initiatives and the extraordinary hard work across the
company.”
Mr. Leasure continued, “During this recent
quarter, we completed the acquisition of Smithers Avanza’s
toxicology facility in Gaithersburg, Maryland, our second
acquisition within one year. We have taken, and continue to
anticipate taking, advantage of immediate capacity and further
capitalizing on the assets and broadened scientific expertise
acquired via the Smithers Avanza acquisition to reach additional
clients. The Evansville new building expansion and facility
improvements continue to move forward. We obtained funding to
support our acquisitions and expansion, and other improvements to
our facilities and equipment, to allow for continued growth and to
enhance our scientific capabilities and client experiences. We
continue to invest in further integrating our facilities to develop
existing facilities and services into “Centers of Excellence” to
distinguish our services in the industry, and will continue to
evaluate additional opportunities for internal and external
growth.”
“Our team at BASi is very proud of what we have
accomplished over the last year and we look forward to the future
that we are building together,” Mr. Leasure concluded.
Third Quarter Results
For the quarter, revenue amounted to
$10,861,000, a 79.8% increase from $6,039,000 in the third quarter
of fiscal 2018. Revenue growth was mainly driven by the incremental
sales associated with the Seventh Wave and Smithers Avanza
acquisitions, plus increased organic sales in the Services
segment.
Net loss for the third quarter of fiscal 2019
amounted to $426,000, or $0.04 per diluted share, compared to a net
loss of $75,000, or $0.01 per diluted share for the third quarter
of fiscal 2018.
Net income and earnings per share were impacted
by, among other factors, the mix of revenues, recruiting and
relocation of management and scientific teams and growing the
employee base, acquisition related costs, as well as higher sales
and marketing expenses. The higher sales and marketing expenses are
driven by our focus on promoting our combined brand and revenue
growth.
Adjusted EBITDA for the third quarter of fiscal
2019 amounted to $772,000, compared to Adjusted EBITDA for the
third quarter of fiscal 2018 of $376,000.
Third Quarter Segment
Results
Service revenue for the third quarter of fiscal
2019 increased 99.1% to $9,689,000 compared to $4,866,000 for the
same period in fiscal 2018. Nonclinical services revenues increased
$4,521,000 in the third quarter of fiscal 2019 due to additional
revenues attributable to the Seventh Wave Laboratories acquisition
of $2,845,000 and the Smithers Avanza acquisition of $1,421,000 in
the third quarter of fiscal 2019, as well as an overall increase in
the number and mix of studies compared to the prior year period.
Bioanalytical analysis revenues increased by $373,000 in the third
quarter of fiscal 2019, mainly due to additional revenues
attributable to the Seventh Wave Laboratories acquisition. Other
laboratory services revenues were negatively impacted by lower
archive revenues in the second quarter of fiscal 2019 versus the
comparable period in fiscal 2018.
Cost of Service revenue as a percentage of
Service revenue decreased to 72.3% during the third quarter of
fiscal 2019 from 75.7% in the comparable period in fiscal 2018. The
principal cause of this decrease was the increase in the
nonclinical service revenues that facilitated a higher absorption
of fixed cost in the current quarter.
Sales in our Products segment remained
essentially flat in the third quarter of fiscal 2019 from
$1,172,000 to $1,173,000 when compared to the same period in the
prior fiscal year.
Cost of Products revenue as a percentage of
Products revenue in the third quarter of fiscal 2019 decreased to
62.1% from 62.3% in the comparable prior-year period mainly due to
the mix of products sold.
First Nine Months’ Results
For the first nine months of fiscal 2019,
revenue amounted to $28,830,000, a 66.1% increase from $17,360,000
in the first nine months of fiscal 2018. Revenue growth was mainly
driven by incremental sales associated with the Seventh Wave
acquisition plus increased sales in both the Services and Products
segments.
Net loss for the first nine months of fiscal
2019 amounted to $1,080,000, or $0.10 per diluted share, compared
to net income of $6,000, or $0.00 per diluted share for the first
nine months of fiscal 2018.
Net income and earnings per share were impacted
by, among other factors, the mix of revenues, recruiting and
relocation of management and scientific teams and growing the
employee base, acquisition related costs, as well as increased
sales and marketing expenses.
Adjusted EBITDA for the first nine months of
fiscal 2019, amounted to $1,945,000, compared to Adjusted EBITDA
for the first nine months of fiscal 2018 of $1,345,000.
First Nine Months’ Segment
Results
Service revenue for the first nine months of
fiscal 2019 increased 77.2% to $25,555,000 compared to $14,421,000
for the same period in fiscal 2018. Nonclinical services revenues
increased $9,485,000 in the first nine months of fiscal 2019 due to
additional revenues attributable to the Seventh Wave Laboratories
and Smithers Avanza acquisitions of $7,736,000 and $1,421,000,
respectively, as well as an overall increase in the number of
studies compared to the prior year period. Bioanalytical
analysis revenues increased by $1,687,000 in the first nine months
of fiscal 2019, mainly due to additional revenues attributable to
the Seventh Wave Laboratories acquisition.
Cost of Service revenue as a percentage of
Service revenue decreased to 72.6% during the first nine months of
fiscal 2019 from 73.6% in the comparable period in fiscal 2018. The
principal cause of this decrease was due to the mix of services
provided in the first nine months of fiscal 2019.
Sales in our Products segment increased 11.4% in
the first nine months of fiscal 2019 from $2,939,000 to $3,275,000
when compared to the same period in the prior fiscal year. The
majority of the increase stems from higher sales of our Culex
automated in vivo sampling systems and analytical instruments in
the current period as compared to the prior year period.
Cost of Products revenue as a percentage of
Products revenue in the first nine months of fiscal 2019 increased
to 66.2% from 61.1% in the comparable prior-year period. This
increase is mainly due to higher material costs and the mix of
product sales during the first nine months of fiscal 2019.
Cash Provided by Operating
Activities
Cash provided by operating activities was
$1,567,000 for the first nine months of fiscal 2019 compared to
$2,210,000 for the same period in fiscal 2018.
As of June 30, 2019, the Company had $506,000 in
cash and cash equivalents, a $572,000 balance on its general line
of credit, a $2,012,000 balance on its $4,445,000 construction line
of credit, a $499,000 balance on its $1,429,250 equipment line of
credit and a $460,000 balance on its capex line of credit. During
fiscal 2019, cash from operations, cash on hand and financing
activities funded capital expenditures of approximately $4,530,000
for the expansion of our Evansville facility in addition to
laboratory equipment and building improvements as well as computer
equipment and software.
Acquisition
On May 1, 2019, the Company acquired from
Smithers Avanza Toxicology Services LLC (“Seller”), a
consulting-based contract research laboratory located in
Gaithersburg, Maryland, substantially all of the assets used by the
Seller in connection with the performance of in-vivo mammalian
toxicology CRO services for pharmaceuticals (small molecules and
biologics), vaccines, agro and industrial chemicals. The
consideration for the acquisition consisted of $1,270,646 in cash,
subject to certain adjustments, 200,000 of the Company’s common
shares and an unsecured promissory note in the initial principal
amount of $810,000. The Company funded the cash portion of the
purchase price for the acquisition with cash on hand and the net
proceeds from the refinancing of its credit arrangements with First
Internet Bank.
Non-GAAP to GAAP
Reconciliation
This press release contains financial measures
that are not calculated in accordance with generally accepted
accounting principles in the United States (GAAP). The non-GAAP
financial measures are Adjusted EBITDA for the three and nine month
periods ended June 30, 2019 and 2018. Adjusted EBITDA as reported
herein refers to a financial performance measure that excludes from
net income (loss) income statement line items interest expense and
income taxes (benefit) expense, as well as non-cash charges for
depreciation and amortization, stock option (benefit) expense and
non-recurring acquisition and integration costs.
The non-GAAP financial information should be
considered supplemental to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
Management, however, believes that Adjusted EBITDA, when used in
conjunction with the results presented in accordance with GAAP, may
provide a more complete understanding of the Company's results and
may facilitate a fuller analysis of the Company's results,
particularly in evaluating performance from one period to
another.
Management has chosen to provide this
supplemental information to investors, analysts, and other
interested parties to enable them to perform additional analyses of
our results and to illustrate our results giving effect to the
non-GAAP adjustments shown in the reconciliation. Management
strongly encourages investors to review the Company's consolidated
financial statements and publicly filed reports in their entirety
and cautions investors that the non-GAAP measures used by the
Company may differ from similar measures used by other companies,
even when similar terms are used to identify such measures.
About Bioanalytical Systems,
Inc.
BASi is a pharmaceutical development company
providing contract research services and monitoring instruments to
emerging pharmaceutical companies and the world's leading drug
development companies and medical research organizations. The
Company focuses on developing innovative services supporting its
clients’ discovery and development objectives for improved
decision-making and accelerated goal attainment. BASi products
focus on increasing efficiency, improving data, and reducing the
cost of taking new drugs to market.
Visit www.BASinc.com for more
information about BASi.
This release contains forward-looking statements
that are subject to risks and uncertainties including, but not
limited to, risks and uncertainties related to our financial
condition, changes in the market and demand for our products and
services, the development, marketing and sales of products and
services, changes in technology, industry standards and regulatory
standards, the successful closing, integration and financial impact
of acquisitions and various market and operating risks detailed in
the Company's filings with the Securities and Exchange
Commission. BASi assumes no obligation to update any
forward-looking statement except as may be required by law. Actual
results may vary, and could differ materially, from those
anticipated, estimated, projected or expected in these
forward-looking statements for a number of reasons, including,
among others, the risk factors disclosed in the Company's most
recent Annual Report, as filed, with the Securities and Exchange
Commission.
(SEE BELOW FOR CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS)
BIOANALYTICAL SYSTEMS,
INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSAND COMPREHENSIVE INCOME
(LOSS)(In thousands, except per share
amounts)(Unaudited)
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
Service revenue |
$ |
9,689 |
|
$ |
4,866 |
|
|
$ |
25,555 |
|
$ |
14,421 |
|
Product revenue |
|
1,172 |
|
|
1,173 |
|
|
|
3,275 |
|
|
2,939 |
|
Total revenue |
|
10,861 |
|
|
6,039 |
|
|
|
28,830 |
|
|
17,360 |
|
|
|
|
|
|
|
Cost of service revenue |
|
7,004 |
|
|
3,684 |
|
|
|
18,552 |
|
|
10,619 |
|
Cost of product revenue |
|
728 |
|
|
730 |
|
|
|
2,168 |
|
|
1,795 |
|
Total cost of revenue |
|
7,732 |
|
|
4,414 |
|
|
|
20,720 |
|
|
12,414 |
|
|
|
|
|
|
|
Gross profit |
|
3,129 |
|
|
1,625 |
|
|
|
8,110 |
|
|
4,946 |
|
Operating expenses: |
|
|
|
|
|
Selling |
|
730 |
|
|
320 |
|
|
|
2,038 |
|
|
917 |
|
Research and development |
|
128 |
|
|
142 |
|
|
|
397 |
|
|
430 |
|
General and administrative |
|
2,521 |
|
|
1,195 |
|
|
|
6,332 |
|
|
3,510 |
|
Total operating expenses |
|
3,379 |
|
|
1,657 |
|
|
|
8,767 |
|
|
4,857 |
|
|
|
|
|
|
|
Operating income (loss) |
|
(250 |
) |
|
(32 |
) |
|
|
(657 |
) |
|
89 |
|
|
|
|
|
|
|
Interest expense |
|
(178 |
) |
|
(49 |
) |
|
|
(426 |
) |
|
(149 |
) |
Other income |
|
2 |
|
|
1 |
|
|
|
5 |
|
|
5 |
|
Net loss before income
taxes |
|
(426 |
) |
|
(80 |
) |
|
|
(1,078 |
) |
|
(55 |
) |
|
|
|
|
|
|
Income taxes (benefit)
expense |
|
- |
|
|
(5 |
) |
|
|
2 |
|
|
(61 |
) |
|
|
|
|
|
|
Net income (loss) |
$ |
(426 |
) |
$ |
(75 |
) |
|
$ |
(1,080 |
) |
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) |
$ |
(426 |
) |
$ |
(75 |
) |
|
$ |
(1,080 |
) |
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
share |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
$ |
0.00 |
|
Diluted net income (loss) per
share |
$ |
(0.04 |
) |
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
$ |
0.00 |
|
|
|
|
|
|
|
Weighted common shares
outstanding: |
|
|
|
|
|
Basic |
|
10,493 |
|
|
8,273 |
|
|
|
10,343 |
|
|
8,274 |
|
Diluted |
|
10,493 |
|
|
8,273 |
|
|
|
10,343 |
|
|
8,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIOANALYTICAL SYSTEMS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except share amounts)
|
June 30,2019 |
|
September 30,2018 |
|
(Unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
506 |
|
|
$ |
773 |
|
Accounts receivable |
|
|
|
Trade, net of allowance of $1,783 at June 30, 2019 and
$1,948 at September 30, 2018 |
|
6,261 |
|
|
|
4,128 |
|
Unbilled revenues and other |
|
1,639 |
|
|
|
1,012 |
|
Inventories, net |
|
1,119 |
|
|
|
1,182 |
|
Prepaid expenses |
|
1,293 |
|
|
|
966 |
|
Total current assets |
|
10,818 |
|
|
|
8,061 |
|
|
|
|
|
Property and equipment,
net |
|
21,056 |
|
|
|
16,610 |
|
Goodwill |
|
3,617 |
|
|
|
3,072 |
|
Other intangible assets,
net |
|
2,967 |
|
|
|
3,318 |
|
Lease rent receivable |
|
127 |
|
|
|
115 |
|
Deferred tax asset |
|
31 |
|
|
|
62 |
|
Other assets |
|
28 |
|
|
|
30 |
|
|
|
|
|
Total assets |
$ |
38,644 |
|
|
$ |
31,268 |
|
|
|
|
|
Liabilities and
shareholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
4,488 |
|
|
$ |
3,192 |
|
Restructuring liability |
|
425 |
|
|
|
1,117 |
|
Accrued expenses |
|
2,499 |
|
|
|
1,571 |
|
Customer advances |
|
6,516 |
|
|
|
4,925 |
|
Revolving line of credit |
|
572 |
|
|
|
- |
|
Capex line of credit |
|
460 |
|
|
|
- |
|
Current portion of capital lease obligation |
|
18 |
|
|
|
87 |
|
Current portion of long-term debt |
|
1,050 |
|
|
|
909 |
|
Total current liabilities |
|
16,028 |
|
|
|
11,801 |
|
Capital lease obligation, less
current portion |
|
23 |
|
|
|
37 |
|
Long-term debt, less current
portion, net of debt issuance costs |
|
12,259 |
|
|
|
8,546 |
|
Total liabilities |
|
28,310 |
|
|
|
20,384 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
Preferred shares, authorized 1,000,000 shares, no par
value: |
|
|
|
35 Series A shares at $1,000 stated value issued andoutstanding at
June 30, 2019 and at September 30, 2018 |
|
35 |
|
|
|
35 |
|
Common shares, no par value: |
|
|
|
Authorized 19,000,000 shares; 10,496,669 issued and outstanding at
June 30, 2019 and 10,245,277at September 30, 2018 |
|
2,586 |
|
|
|
2,523 |
|
Additional paid‑in capital |
|
25,100 |
|
|
|
24,557 |
|
Accumulated deficit |
|
(17,387 |
) |
|
|
(16,231 |
) |
Total shareholders’ equity |
|
10,334 |
|
|
|
10,884 |
|
Total liabilities and shareholders’ equity |
$ |
38,644 |
|
|
$ |
31,268 |
|
|
|
|
|
BIOANALYTICAL SYSTEMS, INC. |
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS |
(In thousands) (Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
June 30, |
|
June 30, |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
GAAP Net income (loss) |
$ |
(426 |
) |
|
$ |
(75 |
) |
|
$ |
(1,080 |
) |
|
$ |
6 |
|
|
|
|
|
|
|
|
|
Add back: Interest expense |
|
178 |
|
|
|
49 |
|
|
|
426 |
|
|
|
149 |
|
Income taxes (benefit) expense |
|
- |
|
|
|
(5 |
) |
|
|
2 |
|
|
|
(61 |
) |
Depreciation and amortization |
|
702 |
|
|
|
374 |
|
|
|
2,007 |
|
|
|
1,149 |
|
Stock option expense |
|
72 |
|
|
|
33 |
|
|
|
196 |
|
|
|
102 |
|
Acquisition and integration costs |
|
246 |
|
|
|
- |
|
|
|
394 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
772 |
|
|
$ |
376 |
|
|
$ |
1,945 |
|
|
$ |
1,345 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA - Earnings before interest expense, income taxes
(benefit) expense, depreciation and amortization, stock option
expense and non-recurring acquisition and integration costs. |
|
FOR MORE INFORMATION: |
Company Contact: |
|
Jill
Blumhoff |
|
Chief
Financial Officer & Vice President of Finance |
|
Phone: 765.497.8381 |
|
jblumhoff@BASinc.com |
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