Exhibit 99.1
Contact:
| Abaxis, Inc. | Lytham Partners, LLC |
| Clint Severson, Chief Executive Officer | Joe Dorame, Robert Blum and Joe Diaz |
| 510-675-6500 | 602-889-9700 |
Abaxis Reports Financial Performance for the Fourth Quarter and Fiscal 2016 and
Declares a 9% Increase in Quarterly Cash Dividend
Union City, California – April 28, 2016 - 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 fourth quarter and fiscal year ended March 31, 2016.
Fourth quarter and fiscal 2016 overview:
| • | Revenues from continuing operations of $57.0 million for the fourth quarter, up 10% over last year’s comparable quarter, and $218.9 million for fiscal 2016, up 8% year-over-year. |
| • | Diluted EPS from continuing operations of $0.36 for the fourth quarter, up 112% over last year’s comparable quarter, and $1.36 for fiscal 2016, up 49% year-over-year. |
| • | Diluted EPS, including discontinued operations, of $0.39 for the fourth quarter, down 22% over last year’s comparable quarter, and $1.38 for fiscal 2016, up 15% year-over-year. |
Revenues highlights:
| • | Medical market revenues for the fourth quarter of $9.5 million, up 10% over last year’s comparable quarter, and $37.8 million for fiscal 2016, up 7% year-over-year. |
| • | Veterinary market revenues for the fourth quarter of $46.6 million, up 9% over last year’s comparable quarter, and $177.7 million for fiscal 2016, up 8% year-over-year. |
| • | Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro specialty cartridges, i-STAT cartridges and rapid tests, for the fourth quarter of $43.1 million, up 14% over last year’s comparable quarter, and $165.0 million for fiscal 2016, up 14% year-over year. |
| • | Total medical and veterinary reagent disc revenues for the fourth quarter of $31.5 million, up 8% over last year’s comparable quarter, and $121.1 million for fiscal 2016, up 9% year-over-year. |
| • | Total medical and veterinary reagent disc sales of 2.5 million units for the fourth quarter, up 9% over last year’s comparable quarter, and 9.5 million units for fiscal 2016, up 12% year-over-year. |
| • | Total medical and veterinary instrument revenues for the fourth quarter of $11.1 million, down 5% over last year’s comparable quarter, and $43.0 million for fiscal 2016, down 12% year-over-year. |
| • | Total medical and veterinary instrument sales of 1,594 units for the fourth quarter, up 4% over last year’s comparable quarter, and 6,078 units for fiscal 2016, down 10% year-over-year. |
| • | North America revenues for the fourth quarter of $46.4 million, up 11% over last year’s comparable quarter, and $175.0 million for fiscal 2016, up 7% year-over-year. |
| • | International revenues for the fourth quarter of $10.5 million, up 3% over last year’s comparable quarter, and $43.9 million for fiscal 2016, up 12% year-over-year. |
Other financial highlights:
| • | Gross profit from continuing operations of $32.3 million for the fourth quarter, up 14% over last year’s comparable quarter, and $123.3 million for fiscal 2016, up 13% year-over-year. |
| • | Cash, cash equivalents and investments as of March 31, 2016 of $152.3 million. |
| • | Abaxis paid dividends of $10.0 million in fiscal 2016. |
| • | Abaxis repurchased 0.3 million shares of common stock at a total purchase price of $13.0 million in fiscal 2016. |
Management Discussion
Clint Severson, chairman and chief executive officer of Abaxis, commented, “We are pleased with the Company’s financial performance in the fourth quarter and the fiscal year as we achieved our 15th consecutive year of profitability. For both the quarter and the year we achieved records in total revenues, revenues from consumables sales and medical market revenues. We are particularly pleased with annual revenues from our VetScan Rapid Tests increasing by 81% year-over-year. This is a relatively new business that complements our VetScan reagent discs. We believe that our menu of expanded lateral flow tests has great potential in the coming years. Our strong portfolio of consumable products has continued to perform at a high level generating significant cash flow, maintaining the strong financial foundation of Abaxis and enabling us to take advantage of opportunities that may present themselves.”
“We continued to have a sharp focus on process and manufacturing improvements in fiscal 2016 and generated a gross margin increase of 252 basis points from fiscal year 2015. We set a record of 9.5 million unit sales of our reagent discs in fiscal 2016. Total operating expenses decreased by 6% during the fourth quarter and had a positive impact on income from operations in both the fourth quarter and fiscal year 2016 with increases of 72% and 35%, respectively, over last year. We concluded the fiscal year with $152.3 million in cash, cash equivalents and investments.”
“The continued success of Abaxis is due to the hard work and dedication of our employees to drive operational efficiencies throughout the company and deliver reliable diagnostic solutions to our customers. I greatly appreciate their efforts. Our point-of-care diagnostic solutions play a critically important role in accurately diagnosing the conditions of our customer’s patients in both the medical and veterinary markets. We are proud of the speed, accuracy and reliability of our products. We remain dedicated to developing new innovative diagnostic products, leveraging our strategic partnerships and operating the business in a prudent manner to enhance our market share globally.”
Dividend Declared
Abaxis today announced that its Board of Directors declared a quarterly cash dividend of $0.12 per common share, to be paid on June 17, 2016, to all shareholders of record as of the close of business on June 3, 2016. This represents a 9% increase compared to the prior quarterly dividend of $0.11 per common share.
Results of Continuing Operations
Quarterly Results
For the fiscal quarter ended March 31, 2016, Abaxis reported revenues from continuing operations of $57.0 million, as compared with revenues of $52.0 million for the comparable period last year, an increase of 10 percent. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers, decreased by $0.6 million, or 5 percent, 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 $5.3 million, or 14 percent, over the same period last year. Abaxis reported net income from continuing operations of $8.3 million for the fiscal quarter ended March 31, 2016, compared to $3.8 million for the fiscal quarter ended March 31, 2015. Abaxis’ effective tax rate in the fiscal quarter ended March 31, 2016 was 33 percent, compared to 42 percent for the same period last year. Abaxis reported diluted net income per share from continuing operations of $0.36 (calculated based on 22,810,000 shares) for the three-month period ended March 31, 2016, compared to $0.17 per share (calculated based on 22,870,000 shares) for the same period last year.
Fiscal 2016 Results
For the fiscal year ended March 31, 2016, Abaxis reported revenues from continuing operations of $218.9 million, as compared with revenues of $202.6 million for the comparable period last year, an increase of 8 percent. Revenues from instrument sales decreased by $5.6 million, or 12 percent, compared to the prior year. Revenues from consumables sales increased by $20.6 million, or 14 percent, over the prior year. Abaxis reported net income from continuing operations of $31.1 million for the fiscal year ended March 31, 2016, compared to $20.8 million for the prior year. Abaxis’ effective tax rate in the fiscal year ended March 31, 2016 was 34 percent, compared to 37 percent for the prior year. Abaxis reported diluted net income per share from continuing operations of $1.36 (calculated based on 22,883,000 shares) for fiscal 2016, compared to $0.91 per share (calculated based on 22,787,000 shares) for fiscal 2015.
Other Reported Information
During the fourth quarter of fiscal 2016, Abaxis repurchased 0.3 million shares of common stock at a total purchase price of $13.0 million and an average per share price of $40.18. Abaxis declared and paid a cash dividend of $0.11 per common share, or $2.5 million, to shareholders in the fourth quarter of fiscal 2016.
In March 2015, we sold our Abaxis Veterinary Reference Laboratories (“AVRL”) business to Antech Diagnostics, Inc. The sale transaction closed on March 31, 2015. The total purchase price under the Asset Purchase Agreement was $21.0 million in cash. We received $20.1 million in cash proceeds during the fourth quarter of fiscal 2015, while the remaining $0.9 million ($0.6 million after-tax) was realized in the fourth quarter of fiscal 2016, upon meeting certain conditions on the one year anniversary of the closing.
Non-cash compensation expense recognized for share-based awards during the fourth quarter of fiscal 2016 was $2.9 million, compared to $2.6 million for the same period last year.
Conference Call
Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, April 28, 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 10083984, through May 5, 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.
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’ beliefs regarding the potential of its products in the coming years and their ability to perform at a high level, generate significant cash flow, maintain the strong financial foundation of Abaxis and enable Abaxis to take advantage of opportunities, the continued success of Abaxis, plans to develop new innovative diagnostic products, leverage strategic partnerships and operate the business in a prudent manner to enhance global market share, payment of future cash dividends, financial resources and potential for future growth, market acceptance and penetration of product offerings, and future revenues, income and results of operations. 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, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results and difficulty in predicting future results, Abaxis’ dependence on Abbott Point of Care, Inc. for its U.S. medical sales, the performance of Abaxis’ independent distributors and Abaxis’ ability to manage their inventory levels effectively, dependence on sole or limited source suppliers, the market acceptance of Abaxis’ products, expansion of Abaxis’ sales and marketing and distribution efforts, dependence on key personnel, the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, risks related to the introduction of new instruments manufactured by third parties, risks associated with competing in the human diagnostic market, 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 March 31, | | | Twelve Months Ended March 31, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| Revenues | | $ | 56,960 | | | $ | 52,017 | | | $ | 218,901 | | | $ | 202,593 | |
| Cost of revenues | | | 24,664 | | | | 23,609 | | | | 95,649 | | | | 93,623 | |
| Gross profit | | | 32,296 | | | | 28,408 | | | | 123,252 | | | | 108,970 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Research and development | | | 4,548 | | | | 4,563 | | | | 18,388 | | | | 16,327 | |
| Sales and marketing | | | 10,760 | | | | 11,954 | | | | 42,526 | | | | 42,147 | |
| General and administrative | | | 4,683 | | | | 4,717 | | | | 15,984 | | | | 16,192 | |
| Total operating expenses | | | 19,991 | | | | 21,234 | | | | 76,898 | | | | 74,666 | |
| Income from operations | | | 12,305 | | | | 7,174 | | | | 46,354 | | | | 34,304 | |
| Interest and other income (expense), net | | | 77 | | | | (667 | ) | | | 793 | | | | (1,262 | ) |
| Income from continuing operations before income tax provision | | | 12,382 | | | | 6,507 | | | | 47,147 | | | | 33,042 | |
| Income tax provision | | | 4,080 | | | | 2,705 | | | | 16,073 | | | | 12,239 | |
| Income from continuing operations | | | 8,302 | | | | 3,802 | | | | 31,074 | | | | 20,803 | |
| Discontinued operations: | | | | | | | | | | | | | | | | |
| Loss from discontinued operations, net of tax (1) | | | - | | | | (153 | ) | | | (3 | ) | | | (1,154 | ) |
| Gain on sale of discontinued operations, net of tax (1) | | | 559 | | | | 7,682 | | | | 559 | | | | 7,682 | |
| Net income | | $ | 8,861 | | | $ | 11,331 | | | $ | 31,630 | | | $ | 27,331 | |
| | | | | | | | | | | | | | | | | |
| Net income per share: | | | | | | | | | | | | | | | | |
| Basic | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.37 | | | $ | 0.17 | | | $ | 1.37 | | | $ | 0.92 | |
| Discontinued operations | | | 0.02 | | | | 0.33 | | | | 0.03 | | | | 0.29 | |
| Basic net income per share | | $ | 0.39 | | | $ | 0.50 | | | $ | 1.40 | | | $ | 1.21 | |
| Diluted | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.36 | | | $ | 0.17 | | | $ | 1.36 | | | $ | 0.91 | |
| Discontinued operations | | | 0.03 | | | | 0.33 | | | | 0.02 | | | | 0.29 | |
| Diluted net income per share | | $ | 0.39 | | | $ | 0.50 | | | $ | 1.38 | | | $ | 1.20 | |
| Shares used in the calculation of net income per share: | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding - basic | | | 22,593 | | | | 22,538 | | | | 22,661 | | | | 22,497 | |
| Weighted average common shares outstanding - diluted | | | 22,810 | | | | 22,870 | | | | 22,883 | | | | 22,787 | |
| Cash dividends declared per share | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.44 | | | $ | 0.40 | |
| (1) | Represents the AVRL business within our veterinary market segment, which was sold during the fourth quarter of fiscal 2015. |
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
| | | March 31, 2016 | | | March 31, 2015 | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 88,323 | | | $ | 107,015 | |
| Short-term investments | | | 41,474 | | | | 26,109 | |
| Receivables, net | | | 35,148 | | | | 29,015 | |
| Inventories | | | 35,131 | | | | 36,179 | |
| Prepaid expenses and other current assets | | | 6,351 | | | | 2,893 | |
| Net deferred tax assets, current | | | 4,810 | | | | 6,575 | |
| Current assets of discontinued operations | | | 961 | | | | 2,075 | |
| Total current assets | | | 212,198 | | | | 209,861 | |
| Long-term investments | | | 22,458 | | | | 24,181 | |
| Investment in unconsolidated affiliate | | | 2,705 | | | | 2,683 | |
| Property and equipment, net | | | 26,842 | | | | 27,316 | |
| Intangible assets, net | | | 1,324 | | | | 1,491 | |
| Net deferred tax assets, non-current | | | 3,903 | | | | 3,413 | |
| Non-current assets of discontinued operations | | | - | | | | 12 | |
| Other assets | | | 1,950 | | | | 107 | |
| Total assets | | $ | 271,380 | | | $ | 269,064 | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 7,292 | | | $ | 7,277 | |
| Accrued payroll and related expenses | | | 8,349 | | | | 11,094 | |
| Accrued taxes | | | 1,145 | | | | 4,829 | |
| Current liabilities of discontinued operations | | | 112 | | | | 5,536 | |
| Other accrued liabilities | | | 9,393 | | | | 9,804 | |
| Deferred revenue | | | 1,600 | | | | 1,322 | |
| Warranty reserve | | | 1,281 | | | | 1,423 | |
| Total current liabilities | | | 29,172 | | | | 41,285 | |
| Non-current liabilities: | | | | | | | | |
| Deferred revenue | | | 2,274 | | | | 3,219 | |
| Warranty reserve | | | 1,927 | | | | 1,733 | |
| Net deferred tax liabilities | | | 384 | | | | 310 | |
| Notes payable, less current portion | | | 379 | | | | 480 | |
| Other non-current liabilities | | | 932 | | | | 1,843 | |
| Total non-current liabilities | | | 5,896 | | | | 7,585 | |
| Total liabilities | | | 35,068 | | | | 48,870 | |
| Shareholders' equity: | | | | | | | | |
| Common stock | | | 127,016 | | | | 132,559 | |
| Retained earnings | | | 109,303 | | | | 87,643 | |
| Accumulated other comprehensive loss | | | (7 | ) | | | (8 | ) |
| Total shareholders' equity | | | 236,312 | | | | 220,194 | |
| Total liabilities and shareholders' equity | | $ | 271,380 | | | $ | 269,064 | |
Revenues by Geographic Region and Customer Group
(Unaudited and in thousands)
The following table presents our revenues by source for the three and twelve months ended March 31, 2016 and 2015.
| | | Three Months Ended March 31, | | | Twelve Months Ended March 31, | |
| Revenues by Geographic Region | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| North America | | $ | 46,423 | | | $ | 41,776 | | | $ | 175,019 | | | $ | 163,308 | |
| International | | | 10,537 | | | | 10,241 | | | | 43,882 | | | | 39,285 | |
| Total revenues | | $ | 56,960 | | | $ | 52,017 | | | $ | 218,901 | | | $ | 202,593 | |
| | | Three Months Ended March 31, | | | Twelve Months Ended March 31, | |
| Revenues by Customer Group | | | 2016 | | | | 2015 | | | | 2016 | | | | 2015 | |
| Medical Market | | $ | 9,528 | | | $ | 8,657 | | | $ | 37,845 | | | $ | 35,364 | |
| Veterinary Market | | | 46,583 | | | | 42,564 | | | | 177,667 | | | | 164,018 | |
| Other | | | 849 | | | | 796 | | | | 3,389 | | | | 3,211 | |
| Total revenues | | $ | 56,960 | | | $ | 52,017 | | | $ | 218,901 | | | $ | 202,593 | |
