Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the
“Company”, “We” or “Our”) today announced financial
results for the three months ended December 31, 2018.
Robert Leasure, Jr., BASi’s President and Chief
Executive Officer commented, “In only six months, we have
accomplished much as a Company. We acquired the business of
Seventh Wave Laboratories, LLC, commenced the expansion of our
facilities in Evansville, Indiana, obtained funding to support
these initiatives and enhanced our scientific capabilities and
client service offerings. We are excited to report revenue growth
during the first quarter of fiscal 2019 as compared to fiscal 2018
and proud of the foundation we continue to build for future
growth.”
Mr. Leasure continued, “We are beginning to see
our services backlog grow as we promote our combined brand and
vision for our future. We will continue to focus on and
invest in business development and marketing efforts to drive
revenue growth in the current year and beyond. Additionally,
we will also continue to invest in our business, equipment and
people while delivering excellent data and results for our
clients. As we focus on these organic growth initiatives, we
will continue to evaluate other options to grow the company.”
“Through all of our efforts, we continue to
emphasize and maintain a positive culture for which we can recruit
and retain our talented team. It is with the whole team’s
talent and dedication to the Company and to our clients that we
will succeed with our initiatives,” Mr. Leasure concluded.
First Quarter Results
For the quarter, revenue amounted to $8,625,000,
a 60.4% increase from $5,377,000 in the first quarter of fiscal
2018. Revenue growth was mainly driven by the incremental
sales associated with the Seventh Wave acquisition plus increased
sales in both the Services and Products segments.
Net loss for the first quarter of fiscal 2019
amounted to $85,000, or $0.01 per diluted share, compared to net
income of $26,000, or $0.00 per diluted share for the first quarter
of fiscal 2018.
Net income and earnings per share were impacted
by the mix of revenues and 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 first quarter of fiscal
2019, amounted to $900,000, compared to Adjusted EBITDA for the
first quarter of fiscal 2018 of $446,000.
First Quarter Segment
Results
Service revenue for the first quarter of fiscal
2019 increased 71% to $7,735,000 compared to $4,525,000 for the
same period in fiscal 2018. Nonclinical services revenues increased
$2,478,000 due to an overall increase in the number of studies from
the prior year and additional revenues attributable to the Seventh
Wave Laboratories acquisition of $1,926,000 in the first fiscal
quarter of 2019. Bioanalytical analysis revenues increased by
$662,000 in the first quarter of fiscal 2019, mainly due to
additional revenues attributable to the Seventh Wave Laboratories
acquisition. Other laboratory services revenues were
positively impacted by higher pharmaceutical analysis revenues in
the first quarter of fiscal 2019 versus the comparable period in
fiscal 2018.
Cost of Service revenue as a percentage of
Service revenue increased to 72.4% during the first quarter of
fiscal 2019 from 72.3% in the comparable period in fiscal
2018. The principal cause of this increase was due to the mix
of services provided in the current quarter.
Sales in our Products segment increased 4.5% in
the first quarter of fiscal 2019 from $852,000 to $890,000 when
compared to the same period in the prior fiscal year. The
majority of the increase stems from higher sales of our analytical
instruments and consumables in the current quarter as compared to
the prior year quarter.
Cost of Products revenue as a percentage of
Products revenue in the first quarter of fiscal 2019 increased to
68.4% from 61.4% in the comparable prior-year period. This
increase is mainly due to higher material costs and the mix of
product sales during the first quarter of fiscal 2019.
Cash Provided by Operating
Activities
Cash provided by operating activities was
$907,000 for the first quarter of fiscal 2019 compared to $760,000
for the same period in fiscal 2018.
As of December 31, 2018, the Company had
$723,000 in cash and cash equivalents and $3,500,000 available on
its general line of credit. The Company had a zero balance on
its $4,445,000 construction line of credit and a zero balance on
its $1,429,250 equipment line of credit. During fiscal 2019,
cash from operations funded capital expenditures for the expansion
of our Evansville facility in addition to laboratory equipment and
building improvements as well as computer equipment and software of
approximately $684,000.
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 month
periods ended December 31, 2018 and 2017. 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, 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(In thousands, except per share amounts)
|
Three Months EndedDecember 31, (Unaudited) |
|
|
2018 |
|
|
2017 |
|
|
|
|
Service revenue |
$ |
7,735 |
|
$ |
4,525 |
|
Product revenue |
|
890 |
|
|
852 |
|
Total
revenue |
|
8,625 |
|
|
5,377 |
|
|
|
|
Cost of service
revenue |
|
5,597 |
|
|
3,273 |
|
Cost of product
revenue |
|
609 |
|
|
523 |
|
Total
cost of revenue |
|
6,206 |
|
|
3,796 |
|
|
|
|
Gross profit |
|
2,419 |
|
|
1,581 |
|
Operating
expenses: |
|
|
Selling |
|
653 |
|
|
294 |
|
Research
and development |
|
124 |
|
|
139 |
|
General
and administrative |
|
1,601 |
|
|
1,137 |
|
Total
operating expenses |
|
2,378 |
|
|
1,570 |
|
|
|
|
Operating income |
|
41 |
|
|
11 |
|
|
|
|
Interest
expense |
|
(126 |
) |
|
(52 |
) |
Other
income |
|
1 |
|
|
— |
|
Net income (loss)
before income taxes |
|
(84 |
) |
|
(41 |
) |
|
|
|
Income tax expense
(benefit) |
|
1 |
|
|
(67 |
) |
|
|
|
Net income (loss) |
$ |
(85 |
) |
$ |
26 |
|
|
|
|
Other comprehensive
income (loss): |
|
— |
|
|
— |
|
|
|
|
Comprehensive income
(loss) |
$ |
(85 |
) |
$ |
26 |
|
|
|
|
|
|
|
Basic net income (loss)
per share |
$ |
(0.01 |
) |
$ |
0.00 |
|
Diluted net income
(loss) per share |
$ |
(0.01 |
) |
$ |
0.00 |
|
|
|
|
Weighted common shares
outstanding: |
|
|
Basic |
|
10,245 |
|
|
8,244 |
|
Diluted |
|
10,245 |
|
|
8,795 |
|
BIOANALYTICAL SYSTEMS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except share amounts)
|
|
December 31,2018 |
September 30,2018 |
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
723 |
|
|
$ |
773 |
|
Accounts receivable |
|
|
|
Trade, net of allowance of $1,950 at December 31, 2018 and
$1,948 at September 30, 2018 |
|
3,665 |
|
|
|
4,128 |
|
Unbilled revenues and other |
|
984 |
|
|
|
1,012 |
|
Inventories, net |
|
1,171 |
|
|
|
1,182 |
|
Prepaid expenses |
|
1,194 |
|
|
|
966 |
|
Total current assets |
|
7,737 |
|
|
|
8,061 |
|
|
|
|
|
Property
and equipment, net |
|
16,761 |
|
|
|
16,610 |
|
Goodwill |
|
3,072 |
|
|
|
3,072 |
|
Other
intangible assets, net |
|
3,154 |
|
|
|
3,318 |
|
Lease rent
receivable |
|
121 |
|
|
|
115 |
|
Deferred
tax asset |
|
31 |
|
|
|
62 |
|
Other
assets |
|
27 |
|
|
|
30 |
|
Total assets |
$ |
30,903 |
|
|
$ |
31,268 |
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
3,073 |
|
|
$ |
3,192 |
|
Restructuring liability |
|
558 |
|
|
|
1,117 |
|
Accrued expenses |
|
1,888 |
|
|
|
1,571 |
|
Customer advances |
|
5,320 |
|
|
|
4,925 |
|
Current portion of capital lease obligation |
|
54 |
|
|
|
87 |
|
Current portion of long-term debt |
|
920 |
|
|
|
909 |
|
Total current liabilities |
|
11,813 |
|
|
|
11,801 |
|
|
|
|
|
|
|
|
|
Capital
lease obligation, less current portion |
|
32 |
|
|
|
37 |
|
Long-term
debt, less current portion, net of debt issuance costs |
|
8,310 |
|
|
|
8,546 |
|
Total liabilities |
|
20,155 |
|
|
|
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 December 31, 2018 and at September 30, 2018 |
|
35 |
|
|
|
35 |
|
Common shares, no par value: |
|
|
|
Authorized 19,000,000 shares; 10,245,277 issued and outstanding
at December 31, 2018 and 10,245,277 at September 30, 2018 |
|
2,523 |
|
|
|
2,523 |
|
Additional paid‑in capital |
|
24,582 |
|
|
|
24,557 |
|
Accumulated deficit |
|
(16,392 |
) |
|
|
(16,231 |
) |
Total shareholders’ equity |
|
10,748 |
|
|
|
10,884 |
|
Total liabilities and shareholders’ equity |
$ |
30,903 |
|
|
$ |
31,268 |
|
BIOANALYTICAL SYSTEMS, INC. |
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS |
(In thousands) (Unaudited) |
|
|
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income (loss) |
$ |
(85 |
) |
|
$ |
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
Interest expense |
|
126 |
|
|
|
52 |
|
|
|
|
|
|
Income taxes
(benefit) expense |
|
1 |
|
|
|
(67 |
) |
|
|
|
|
|
Depreciation and
amortization |
|
703 |
|
|
|
401 |
|
|
|
|
|
|
Stock option (benefit) expense |
|
25 |
|
|
|
34 |
|
|
|
|
|
|
Acquisition and
integration costs |
|
130 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
900 |
|
|
$ |
446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA - Earnings before interest expense, income taxes
(benefit) expense, depreciation and amortization, stock option
(benefit) 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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