Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the
“Company”, “We” or “Our”) doing business as Inotiv, a
leading provider of nonclinical and analytical contract research
services, today announced financial results for the three and
twelve months ended September 30, 2019.
Robert Leasure, Jr., BASi’s President and Chief
Executive Officer commented, “In the fourth Quarter of 2019 we have
started to see the financial results of many of the improvements
and acquisitions over the last 18 months. In fiscal 2019, we
continued the integration of the Seventh Wave acquisition,
completed in July 2018, and completed the acquisition of Smithers
Avanza’s toxicology facility in Gaithersburg, Maryland, in May
2019. We have been able to take advantage of increases in capacity
and broadened scientific expertise acquired to reach additional
clients. The Evansville new building expansion and facility
improvements are substantially complete and are expected to be
available for operations the second half of fiscal 2020. In recent
weeks, we finalized the acquisition of Pre-Clinical Research
Services, Inc., further adding to our capabilities and strong
scientific expertise. We have also seen improvements and internal
growth in developing our Discovery and DMPK business models. We
obtained funding to support our acquisitions, expansion, and other
improvements to our facilities and equipment. We have been able to
recruit and retain a significant group of talented people. We
continue to invest in further integrating our laboratories in our
effort to develop existing facilities and services into “Centers of
Excellence” in order to distinguish our services within the
industry, and will continue to evaluate additional opportunities
for internal and external growth. We have also invested in
developing improved internal systems. Our services backlog and
quoting activities are growing as a result of the acquisitions and
investments in sales and marketing, including our recent launch of
our new brand, “Inotiv,” and our unwavering focus on the customer
experience.”
Mr. Leasure further commented, “We saw revenue
growth of 36.1% compared to the third quarter of 2019 and overall
revenue growth of 65.6% compared to fiscal 2018, including growth
attributable to internal growth and our acquisitions. We
reported net income of nearly $290,000 in the fourth quarter as
compared to a net loss in each prior quarter of fiscal 2019. The
fourth quarter of 2019 did include $174,000 in acquisition related
expenses. Adjusted EBITDA for the fourth quarter of fiscal 2019
amounted to $1,425,000, compared to Adjusted EBITDA for the fourth
quarter of fiscal 2018 of $1,029,000.”
“I am very proud of our team, what we have
accomplished and what we are building. We have much more we can
accomplish in the years ahead. The transactions, facility
improvements and focus on recruiting talented people in 2019 were
part of a strategic, focused plan. We believe many of these
investments should allow us to provide enhanced service offerings
and sustained growth into 2020. Together, we continue to build a
bright future,” Mr. Leasure concluded.
Fourth Quarter Results
For the quarter, revenue amounted to
$14,786,000, a 64.5% increase from $8,986,000 in the fourth quarter
of fiscal 2018. Revenue growth was driven by the incremental sales
associated with the Seventh Wave and Smithers Avanza acquisitions,
plus increased organic sales in the Services segment.
Net income for the fourth quarter of fiscal 2019
amounted to $290,000, or $0.03 per diluted share, compared to a net
loss of $200,000, or $0.02 per diluted share for the fourth quarter
of fiscal 2018.
Net income and earnings per share were impacted
by, among other factors, the increase in revenues and
acquisition-related and integration-related costs, as well as
higher sales and marketing expenses and bringing on board
additional employees. The higher sales and marketing expenses are
driven by our focus on promoting our combined brand and revenue
growth.
Adjusted EBITDA for the fourth quarter of fiscal
2019 amounted to $1,430,000, compared to Adjusted EBITDA for the
fourth quarter of fiscal 2018 of $1,029,000.
Fourth Quarter Segment
Results
Service revenue for the fourth quarter of fiscal
2019 increased 68.3% to $13,493,000 compared to $8,019,000 for the
same period in fiscal 2018. Nonclinical services revenues increased
nearly $4,943,000 in the fourth quarter of fiscal 2019. Included in
the growth was $2,846,000 of revenue related to the acquisition of
Smithers Avanza. Bioanalytical analysis and other laboratory
revenues also increased by $269,000 and $263,000, respectively, in
the fourth quarter of fiscal 2019.
Cost of Service revenue as a percentage of
Service revenue increased slightly to 67.8% during the fourth
quarter of fiscal 2019 from 65.9% in the comparable period in
fiscal 2018. The principal cause of this increase was the mix of
service revenues favoring nonclinical revenues versus bioanalytical
service revenues.
Sales in our Products segment increased in the
fourth quarter of fiscal 2019 from $967,000 to $1,293,000 when
compared to the same period in the prior fiscal year.
Cost of Products revenue as a percentage of
Products revenue in the fourth quarter of fiscal 2019 increased to
63.7% from 54.9% in the comparable prior-year period mainly due to
the mix of products sold and the increased cost of a few raw
materials.
Fiscal Year Results
For fiscal 2019, revenue amounted to
$43,616,000, a 65.6% increase from $26,346,000 in fiscal 2018.
Revenue growth was driven by incremental sales associated with the
Seventh Wave and Smithers Avanza acquisitions in addition to
increases in existing services. In addition there were increased
sales in the Products segments.
Net loss for fiscal 2019 amounted to $790,000,
or $0.08 per diluted share, compared to net loss of $194,000, or
$0.02 per diluted share for fiscal 2018.
Despite the increase in revenues, net loss was
impacted by, among other factors, acquisition and integration
related costs, recruiting and bringing on board additional people,
as well as increased sales and marketing expenses.
Adjusted EBITDA for fiscal 2019 amounted to
$3,375,000, compared to Adjusted EBITDA for fiscal 2018 of
$2,424,000.
Fiscal Year Segment Results
Service revenue for fiscal 2019 increased 74.0%
to $39,048,000 compared to $22,440,000 for fiscal 2018. Nonclinical
services revenues increased $14,378,000 in fiscal 2019 due to
additional revenues attributable to the full-year performance of
Seventh Wave Laboratories and the revenues attributable to the
Smithers Avanza acquisition of $7,060,000 and $4,267,000,
respectively, as well as an overall increase in the number of
studies compared to the prior year period. Bioanalytical
analysis revenues increased by $2,137,000 in fiscal 2019, both from
additional revenues attributable to the full-year performance of
the Seventh Wave Laboratories acquisition of $1,889,000 and from an
increase in samples received and analyzed.
Cost of Service revenue as a percentage of
Service revenue remained flat at 70.9% during fiscal 2019 as
compared to fiscal 2018.
Sales in our Products segment increased 16.9% in
fiscal 2019 from $3,906,000 to $4,568,000 when compared to the
prior fiscal year.
Cost of Products revenue as a percentage of
Products revenue in fiscal 2019 increased to 65.5% from 59.5% in
fiscal 2018. This increase is mainly due to higher material costs
during fiscal 2019.
Cash Provided by Operating
Activities
Cash provided by operating activities was
$1,777,000 for fiscal 2019 compared to $3,487,000 for fiscal
2018.
As of September 30, 2019, the Company had
$606,000 in cash and cash equivalents, a $1,063,000 balance on its
general line of credit, a $3,158,000 balance on its $4,445,000
construction line of credit, a $1,143,000 balance on its $1,429,250
equipment line of credit and a $655,000 balance on its capex line
of credit. During fiscal 2019, cash from operations, cash on hand
and financing activities funded capital expenditures of
approximately $6,878,000 for the expansion of our Evansville
facility in addition to laboratory equipment and building
improvements as well as computer equipment and software.
Acquisition
On December 1, 2019, the Company acquired from
Pre-Clinical Research Services, Inc. (“Seller”) substantially all
of the assets used by the Seller in connection with the performance
of surgical and medical device in-vivo mammalian toxicology CRO
services. The Company also purchased a building and real estate in
Fort Collins used in the Seller’s business. The consideration for
the acquisition consisted of $1,500,000 in cash, subject to certain
adjustments, 240,000 of the Company’s common shares and an
unsecured promissory note in the initial principal amount of
$800,000 and the consideration for the related building and real
estate amounted to $2,500,000. 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 twelve
month periods ended September 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., operating as
Inotiv
BASi, operating as Inotiv, 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’s products focus on increasing efficiency,
improving data, and reducing the cost of taking new drugs to
market. Visit inotivco.com for more information about BASi,
operating as Inotiv.
This release may contain forward-looking
statements that are subject to risks and uncertainties including,
but not limited to, risks and uncertainties related to changes in
the market and demand for our products and services, the
development, marketing and sales of products and services, changes
in technology, industry and regulatory standards, the timing of
acquisitions and the successful closing, integration and business
and financial impact thereof, and various market and operating
risks, including those detailed in the Company's filings with the
U.S. 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) |
|
|
Three Months Ended September 30, |
|
Fiscal Year Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Service revenue |
$ |
13,493 |
|
$ |
8,019 |
|
|
$ |
39,048 |
|
$ |
22,440 |
|
Product revenue |
|
1,293 |
|
|
967 |
|
|
|
4,568 |
|
|
3,906 |
|
Total revenue |
|
14,786 |
|
|
8,986 |
|
|
|
43,616 |
|
|
26,346 |
|
|
|
|
|
|
|
Cost of service revenue |
|
9,152 |
|
|
5,285 |
|
|
|
27,704 |
|
|
15,904 |
|
Cost of product revenue |
|
823 |
|
|
531 |
|
|
|
2,991 |
|
|
2,326 |
|
Total cost of revenue |
|
9,975 |
|
|
5,816 |
|
|
|
30,695 |
|
|
18,230 |
|
|
|
|
|
|
|
Gross profit |
|
4,811 |
|
|
3,170 |
|
|
|
12,921 |
|
|
8,116 |
|
Operating expenses: |
|
|
|
|
|
Selling |
|
876 |
|
|
624 |
|
|
|
2,914 |
|
|
1,541 |
|
Research and development |
|
230 |
|
|
166 |
|
|
|
627 |
|
|
596 |
|
General and administrative |
|
3,201 |
|
|
2,455 |
|
|
|
9,533 |
|
|
5,965 |
|
Total operating expenses |
|
4,307 |
|
|
3,245 |
|
|
|
13,074 |
|
|
8,102 |
|
|
|
|
|
|
|
Operating income (loss) |
|
504 |
|
|
(75 |
) |
|
|
(153 |
) |
|
14 |
|
|
|
|
|
|
|
Interest expense |
|
(216 |
) |
|
(125 |
) |
|
|
(642 |
) |
|
(274 |
) |
Other income |
|
4 |
|
|
1 |
|
|
|
9 |
|
|
6 |
|
Net income (loss) before
income taxes |
|
292 |
|
|
(199 |
) |
|
|
(786 |
) |
|
(254 |
) |
|
|
|
|
|
|
Income taxes (benefit)
expense |
|
2 |
|
|
1 |
|
|
|
4 |
|
|
(60 |
) |
|
|
|
|
|
|
Net income (loss) |
$ |
290 |
|
$ |
(200 |
) |
|
$ |
(790 |
) |
$ |
(194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) |
$ |
290 |
|
$ |
(200 |
) |
|
$ |
(790 |
) |
$ |
(194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
share |
$ |
0.03 |
|
$ |
|
|
(0.02 |
) |
|
$ |
(0.08 |
) |
$ |
(0.02 |
) |
Diluted net income (loss) per
share |
$ |
0.03 |
|
$ |
(0.02 |
) |
|
$ |
(0.08 |
) |
$ |
(0.02 |
) |
|
|
|
|
|
|
Weighted common shares
outstanding: |
|
|
|
|
|
Basic |
|
10,503 |
|
|
10,229 |
|
|
|
10,383 |
|
|
8,771 |
|
Diluted |
|
10,647 |
|
|
10,229 |
|
|
|
10,383 |
|
|
8,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIOANALYTICAL SYSTEMS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands, except share amounts) |
|
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
606 |
|
|
$ |
773 |
|
|
Accounts receivable |
|
|
|
|
|
|
|
Trade, net of allowance of $1,770 at September 30, 2019 and $1,948
at September 30, 2018 |
|
7,178 |
|
|
|
4,128 |
|
|
Unbilled revenues and other |
|
2,342 |
|
|
|
1,012 |
|
|
Inventories, net |
|
1,095 |
|
|
|
1,182 |
|
|
Prepaid expenses |
|
1,200 |
|
|
|
966 |
|
|
Total current assets |
|
12,421 |
|
|
|
8,061 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
22,828 |
|
|
|
16,610 |
|
|
Goodwill |
|
3,617 |
|
|
|
3,072 |
|
|
Other intangible assets, net |
|
2,874 |
|
|
|
3,318 |
|
|
Lease rent receivable |
|
130 |
|
|
|
115 |
|
|
Deferred tax asset |
|
31 |
|
|
|
62 |
|
|
Other assets |
|
79 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
41,980 |
|
|
$ |
31,268 |
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
4,941 |
|
|
$ |
3,192 |
|
|
Restructuring liability |
|
349 |
|
|
|
1,117 |
|
|
Accrued expenses |
|
2,620 |
|
|
|
1,571 |
|
|
Customer advances |
|
6,726 |
|
|
|
4,925 |
|
|
Revolving line of credit |
|
1,063 |
|
|
|
- |
|
|
Capex line of credit |
|
655 |
|
|
|
- |
|
|
Current portion of capital lease obligation |
|
18 |
|
|
|
87 |
|
|
Current portion of long-term debt |
|
1,109 |
|
|
|
909 |
|
|
Total current liabilities |
|
17,481 |
|
|
|
11,801 |
|
|
Capital lease obligation, less current portion |
|
18 |
|
|
|
37 |
|
|
Long-term debt, less current portion, net of debt issuance
costs |
|
13,771 |
|
|
|
8,546 |
|
|
Total liabilities |
|
31,270 |
|
|
|
20,384 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
Preferred shares, authorized 1,000,000 shares, no par value: |
|
|
|
|
|
|
|
35 Series A shares at $1,000 stated value issued and outstanding at
September 30, 2019 and at September 30, 2018 |
|
35 |
|
|
|
35 |
|
|
Common shares, no par value: |
|
|
|
|
|
|
|
Authorized 19,000,000 shares; 10,510,694 issued
and outstanding at September 30, 2019 and 10,245,277 at
September 30, 2018 |
|
2,589 |
|
|
|
2523 |
|
|
Additional paid‑in capital |
|
25,183 |
|
|
|
24557 |
|
|
Accumulated deficit |
|
(17,097 |
) |
|
|
(16,231 |
) |
|
Total shareholders’ equity |
|
10,710 |
|
|
|
10,884 |
|
|
Total liabilities and shareholders’ equity |
$ |
41,980 |
|
|
$ |
31,268 |
|
|
|
|
|
|
|
|
|
|
|
BIOANALYTICAL SYSTEMS, INC. |
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year
Ended |
September 30, |
|
September 30, |
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
GAAP Net income (loss) |
$ |
290 |
|
$ |
(200 |
) |
|
$ |
(790 |
) |
|
$ |
(194 |
) |
|
|
|
|
|
|
|
|
Add back: Interest expense |
|
216 |
|
|
125 |
|
|
|
642 |
|
|
|
274 |
|
Income taxes (benefit) expense |
|
2 |
|
|
1 |
|
|
|
4 |
|
|
|
(60 |
) |
Depreciation and amortization |
|
666 |
|
|
726 |
|
|
|
2,673 |
|
|
|
1,875 |
|
Stock option expense |
|
82 |
|
|
32 |
|
|
|
278 |
|
|
|
134 |
|
Acquisition and integration costs |
|
174 |
|
|
345 |
|
|
|
568 |
|
|
|
395 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
1,430 |
|
$ |
1,029 |
|
|
$ |
3,375 |
|
|
$ |
2,424 |
|
|
|
|
|
|
|
|
|
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 C. Blumhoff |
|
Chief Financial Officer |
|
Phone: 765.497.8381 |
|
jblumhoff@inotivco.com |
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