UNION CITY, Calif.,
Oct. 24, 2017 /PRNewswire/ -- Abaxis,
Inc. (Nasdaq: 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, 2017.
Second quarter results include:
- Revenues of $58.9 million, up 1%
over last year's comparable quarter.
- Veterinary market revenues of $48.5
million, up 1% over last year's comparable quarter.
- International revenues of $11.9
million, up 3% over last year's comparable quarter.
- Revenues from sales of consumables, which include reagent
discs, hematology reagent kits, VSpro specialty cartridges,
i-STAT cartridges, rapid tests and urinalysis strips, of
$46.4 million, up 2% over last year's
comparable quarter.
- Gross profit of $32.2 million,
compared to $32.3 million, in last
year's comparable quarter.
- Cash, cash equivalents and investments as of September 30, 2017 of $177.7 million.
- Abaxis paid dividends of $3.2
million, or $0.14 per share,
during the second quarter of fiscal 2018.
Management Discussion
Clint Severson, chairman and
chief executive officer of Abaxis, said, "There is no question that
the past number of quarters have been challenging. We are,
however, targeting an acceleration of our year-over-year growth in
the second half of fiscal year 2018. We anticipate growth
will be led by a number of new product introductions, including the
recently released VetScan UA, a hand held urine chemistry analyzer
that we started shipping in the last week of September 2017; and the recent launches of our
VetScan Phenobarbital Profile and our VetScan Canine Pancreatic
Lipase Rapid Test. In addition, we enhanced the capabilities
of our VetScan FUSE, a bi-directional connectivity system that
provides integration between Abaxis point-of-care analyzers and
veterinary practice management systems worldwide. We plan to
update the VetScan FUSE further in the third quarter of fiscal 2018
with functionality that will allow the VetScan FUSE to be installed
with the majority of new veterinary instrument placements. In
conjunction with the new product introductions, we continue to
expand our sales and marketing team to more fully support our
distribution channel partners with the goal of moving these new
products through the channel and generating increased sales."
Mr. Severson continued, "In support of our loyal shareholders
our Board of Directors expanded our share repurchase program by an
additional $21 million, bringing the
total available to $75 million.
The Board of Directors also increased our quarterly dividend to
shareholders by 14% to $0.16 per
share. We are committed to rewarding our shareholders and
providing value to them. We have a strong business that has
operated off its internally generated cash flow for many years.
We continue to manage our business conservatively and
maintain cash, cash equivalents and short- and long-term
investments of $177.7 million.
We are excited with the opportunities ahead in the coming
years."
Dividend Declared
Abaxis today announced that its Board of Directors declared a
quarterly cash dividend of $0.16 per
share of common stock, to be paid on December 15, 2017, to all shareholders of record
as of the close of business on December
1, 2017.
Share Repurchase Program
Abaxis' Board of Directors has approved a $21.0 million increase to its existing share
repurchase program, to a total of $75.0
million. As of September 30,
2017, Abaxis had $54.0 million
of its common stock available for repurchase under its share
repurchase program.
Results of Operations
Quarterly Results
For the fiscal quarter ended September
30, 2017, Abaxis reported revenues of $58.9 million, as compared with revenues of
$58.6 million for the comparable
period last year. Revenues from sales of instruments, which
include chemistry analyzers, hematology instruments, VSpro
specialty analyzers, i‑STAT analyzers and urinalysis instruments,
decreased by $0.7 million, or 7%,
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, rapid tests
and urinalysis tests, increased by $0.9
million, or 2%, over the same period last year.
Abaxis reported income from continuing operations of
$9.4 million and net income from
continuing operations of $6.6 million
for the fiscal quarter ended September 30,
2017, compared to $11.7
million and $11.5 million for
the fiscal quarter ended September 30,
2016, respectively. Net income from continuing
operations for the fiscal quarter ended September 30, 2016 includes a gain from sale of
an equity method investment of $3.8
million after tax.
Abaxis' effective tax rate in the fiscal quarter ended
September 30, 2017 was 35%, compared
to 36% for the same period last year. Abaxis reported diluted
net income per share of $0.29
(calculated based on 22,997,000 shares) for the fiscal quarter
ended September 30, 2017, compared to
$0.50 per share (calculated based on
22,745,000 shares) for the same period last year. Diluted net
income per share for the second quarter of fiscal 2017 includes the
effect of the gain from the sale of an equity method investment.
Excluding the effect of the gain, non-GAAP diluted net income
per share was $0.34 for the second
quarter of fiscal 2017.
Six-Month Results
For the six-month period ended September
30, 2017, Abaxis reported revenues of $117.1 million, as compared with revenues of
$116.2 million for the comparable
period last year. Revenues from instruments sales decreased
by $2.0 million, or 10%, compared to
the same period last year. Revenues from consumables sales
increased by $2.2 million, or 2%,
over the same period last year.
Abaxis reported income from continuing operations of
$17.9 million and net income from
continuing operations of $12.9
million for the six-month period ended September 30, 2017, compared to $22.5 million and $18.4
million for the six-month period ended September 30, 2016, respectively. Net
income from continuing operations for the six-month period ended
September 30, 2016 includes a gain
from sale of an equity method investment of $3.8 million after tax.
Abaxis' effective tax rate in the six-month period ended
September 30, 2017 was 35%, compared
to 36% for the same period last year. Abaxis reported diluted
net income per share of $0.56
(calculated based on 22,991,000 shares) for the fiscal quarter
ended September 30, 2017, compared to
$0.81 per share (calculated based on
22,720,000 shares) for the same period last year. Diluted net
income per share for the six month period ended September 30, 2016 includes the effect of the
gain from the sale of an equity method investment. Excluding
the effect of the gain, non-GAAP diluted net income per share was
$0.64 for the six month period ended
September 30, 2016.
Other Reported Information
Non-cash compensation expense recognized for share-based awards
during the three months ended September 30,
2017 and 2016 was $3.5 million
and $3.1 million, respectively.
Abaxis paid $3.2 million in cash
dividends to shareholders during the second quarter of fiscal
2018.
Conference Call
Abaxis has scheduled a conference call to discuss its financial
results at 4:15 p.m. Eastern Time on
Tuesday, October 24, 2017.
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 10113411, through October
31, 2017. 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 diluted 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 diluted net
income per share as net income per share on a diluted basis
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 diluted 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 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' ability
to accelerate its year-over-year growth in the second half of
fiscal year 2018, anticipated drivers of any such growth, Abaxis'
ability to implement product updates and the expected timing
thereof, long-term growth opportunities in the medical market, the
effects of Abaxis' investments in sales and marketing, Abaxis'
expansion of its product portfolio and its effect on Abaxis'
revenue growth, the expansion of Abaxis' sales and marketing team
and its ability to move new products through the channel and
generate increased sales and Abaxis' opportunities in the coming
years. 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.
Forward-looking statements contained in this press release may be
affected by risks and uncertainties that may cause actual results
to differ materially from those projected or implied in such
forward-looking statements, including, but not limited to, risks
and uncertainties 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,
|
|
2017
|
2016
|
|
2017
|
2016
|
Revenues
|
$
58,854
|
$
58,552
|
|
$
117,112
|
$
116,248
|
Cost of
revenues
|
26,693
|
26,294
|
|
53,007
|
51,989
|
Gross
profit
|
32,161
|
32,258
|
|
64,105
|
64,259
|
Operating
expenses:
|
|
|
|
|
|
Research
and development
|
6,075
|
4,906
|
|
12,507
|
10,139
|
Sales
and marketing
|
12,484
|
11,254
|
|
24,985
|
23,078
|
General
and administrative
|
4,167
|
4,353
|
|
8,717
|
8,555
|
Total operating
expenses
|
22,726
|
20,513
|
|
46,209
|
41,772
|
Income from
operations
|
9,435
|
11,745
|
|
17,896
|
22,487
|
Interest and other
income (expense), net
|
773
|
6,279
|
|
2,084
|
6,249
|
Income before income
tax provision
|
10,208
|
18,024
|
|
19,980
|
28,736
|
Income tax
provision
|
3,607
|
6,537
|
|
7,049
|
10,359
|
Income from
continuing operations
|
6,601
|
11,487
|
|
12,931
|
18,377
|
Discontinued
operations
|
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
-
|
(55)
|
|
-
|
(55)
|
Net income
|
$
6,601
|
$
11,432
|
|
$
12,931
|
$
18,322
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
Basic
|
|
|
|
|
|
Continuing operations
|
$
0.29
|
$
0.51
|
|
$
0.57
|
$
0.82
|
Discontinued operations
|
-
|
-
|
|
-
|
(0.01)
|
Basic net
income per share
|
$
0.29
|
$
0.51
|
|
$
0.57
|
$
0.81
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
Continuing operations
|
$
0.29
|
$
0.51
|
|
$
0.56
|
$
0.81
|
Discontinued operations
|
-
|
(0.01)
|
|
-
|
-
|
Diluted net
income per share
|
$
0.29
|
$
0.50
|
|
$
0.56
|
$
0.81
|
|
|
|
|
|
|
Shares used in the
calculation of net income per share:
|
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,679
|
22,522
|
|
22,648
|
22,494
|
Weighted
average common shares outstanding - diluted
|
22,997
|
22,745
|
|
22,991
|
22,720
|
|
|
|
|
|
|
Cash dividends
declared per share
|
$
0.14
|
$
0.12
|
|
$
0.28
|
$
0.24
|
ABAXIS,
INC.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited and in
thousands)
|
|
|
September
30,
|
March
31,
|
|
2017
|
2017
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
58,874
|
$
91,332
|
Short-term
investments
|
89,877
|
51,561
|
Receivables,
net
|
40,714
|
40,568
|
Inventories
|
39,050
|
39,010
|
Prepaid
expenses and other current assets
|
4,831
|
4,997
|
Net deferred
tax assets, current
|
-
|
5,644
|
Current assets
of discontinued operations
|
19
|
66
|
Total
current assets
|
233,365
|
233,178
|
Long-term
investments
|
28,951
|
22,171
|
Investment in
unconsolidated affiliates
|
2,778
|
2,850
|
Property and
equipment, net
|
34,384
|
34,260
|
Intangible assets,
net
|
1,094
|
1,171
|
Net deferred tax
assets, non-current
|
10,472
|
4,392
|
Other
assets
|
8,904
|
7,624
|
Total
assets
|
$
319,948
|
$ 305,646
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
8,393
|
$
7,517
|
Accrued payroll
and related expenses
|
10,101
|
9,606
|
Accrued
taxes
|
1,489
|
2,151
|
Current
liabilities of discontinued operations
|
29
|
85
|
Other accrued
liabilities
|
13,811
|
11,006
|
Deferred
revenue
|
1,043
|
1,415
|
Warranty
reserve
|
1,934
|
1,663
|
Total
current liabilities
|
36,800
|
33,443
|
Non-current
liabilities:
|
|
|
Deferred
revenue
|
1,290
|
1,460
|
Warranty
reserve
|
2,825
|
2,695
|
Net deferred
tax liabilities
|
219
|
234
|
Notes payable,
less current portion
|
227
|
278
|
Other
non-current liabilities
|
1,498
|
1,312
|
Total
non-current liabilities
|
6,059
|
5,979
|
Total
liabilities
|
42,859
|
39,422
|
Shareholders'
equity:
|
|
|
Common
stock
|
140,235
|
135,932
|
Retained
earnings
|
136,886
|
130,304
|
Accumulated
other comprehensive loss
|
(32)
|
(12)
|
Total
shareholders' equity
|
277,089
|
266,224
|
Total
liabilities and shareholders' equity
|
$
319,948
|
$ 305,646
|
Revenues by
Geographic Region and Customer Group
|
(Unaudited and in
thousands)
|
|
The following table
presents our revenues by source for the three and six months ended
September 30, 2017 and 2016.
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2017
|
2016
|
|
2017
|
2016
|
Revenues by
Geographic Region
|
|
|
|
|
|
North
America
|
$
46,920
|
$
47,017
|
|
$
93,889
|
$
93,790
|
International
|
11,934
|
11,535
|
|
23,223
|
22,458
|
Total
revenues
|
$
58,854
|
$
58,552
|
|
$
117,112
|
$
116,248
|
|
|
|
|
|
|
Revenues by
Customer Group
|
|
|
|
|
|
Medical
Market
|
$
9,282
|
$
9,381
|
|
$
18,144
|
$
18,478
|
Veterinary
Market
|
48,536
|
48,290
|
|
96,904
|
96,021
|
Other
|
1,036
|
881
|
|
2,064
|
1,749
|
Total
revenues
|
$
58,854
|
$
58,552
|
|
$
117,112
|
$
116,248
|
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 the gain
on sale of an equity method investment and related income tax
effect recorded in the three and six months ended September 30,
2016.
|
View original
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SOURCE Abaxis, Inc.