Abaxis Reports Financial Performance for
the Second Quarter of Fiscal 2008
UNION CITY, Calif., Oct. 24 /PRNewswire-FirstCall/ -- ABAXIS, Inc. (Nasdaq: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the fiscal quarter ended September 30, 2007.
Highlights for the second quarter of fiscal 2008 include:
-- Revenues of $25.2 million, up 20% over last year's comparable quarter.
-- Medical market sales of $5.6 million, up 37% over last year's comparable quarter.
-- Medical reagent disc sales of 338,000 units, up 43% over last year's comparable quarter.
-- Total medical and veterinary reagent disc sales of 1,244,000 units, compared to 1,007,000 units in the same period last year, up 24% over last year's comparable quarter.
-- Introduction of the new VetScan HM5 analyzer in the final 2 weeks of the quarter with sales of 134 units.
-- Operating income of $4.1 million, up 32% over last year's comparable quarter.
-- Net income of $2.9 million, up 37% over last year's comparable quarter.
-- Diluted EPS: $0.13 versus $0.10 in the same period last year.
-- Cash, cash equivalents and short-term investments as of September 30, 2007 of $51.7 million, up 29% compared to September 30, 2006.
Quarterly Results: For the fiscal quarter ended September 30, 2007, Abaxis reported revenues of $25.2 million, as compared with revenues of $21.0 million for the comparable period last year, an increase of 20 percent. Instrument, reagent disc and hematology reagent revenues increased by $4.3 million, or 23 percent over the same period last year. The company reported net income of $2.9 million, compared to $2.1 million for the same period last year. The company's effective tax rate in the quarter ended September 30, 2007 was 38 percent, compared to 39 percent for the same period last year. The company reported diluted net income per share of $0.13 (calculated based on 22,110,000 shares) in the second quarter of fiscal 2008, compared to $0.10 per share (calculated based on 21,968,000 shares) for the same period last year.
Six Month Results: For the six-month period ended September 30, 2007, Abaxis reported revenues of $48.1 million, as compared with revenues of $41.4 million for the comparable period last year, an increase of 16 percent. Instrument revenues and reagent disc and hematology reagent revenues increased by $6.2 million, or 16 percent over the same period last year. The company reported net income of $6.0 million, compared to $4.5 million for the same period last year. The company's effective tax rate in the six months ended September 30, 2007 was 38 percent, compared to 40 percent for the same period last year. The company reported diluted net income per share of $0.27 (calculated based on 22,103,000 shares), compared to $0.21 per share (calculated based on 21,890,000 shares) for the same period last year.
Other Reported Information: Reagent disc and hematology reagent revenues for the second quarter of fiscal 2008 were $15.7 million, up 28 percent over the $12.3 million reported in the same period last year. During the quarter, the company sold a total of 1,244,000 medical and veterinary reagent discs, an increase of 24 percent compared to 1,007,000 medical and veterinary reagent discs sold during the same period last year. Total medical sales for the second quarter of fiscal 2008 were $5.6 million, an increase of 37 percent over last year's comparable quarter. Medical sales in North America, excluding sales to the U.S. government, during the second quarter of fiscal 2008 were $4.1 million, an increase of 42 percent over last year's comparable quarter. Total veterinary sales for the second quarter of fiscal 2008 were $18.0 million, up 19 percent over last year's comparable quarter. Additionally, veterinary reagent disc sales for the second quarter of fiscal 2008 were $11.6 million, an increase of 25 percent compared to the same period last year. The company ended the quarter with $51.7 million in cash, cash equivalents and short-term investments.
Clint Severson, Chairman and Chief Executive Officer of Abaxis, commented, "During the quarter, we sold 771 total instruments in both the medical and veterinary segments of the business resulting in strong double digit revenue growth rates. As it relates to manufacturing, we have made a number of adjustments to our manufacturing operations to improve efficiencies with an eye toward enhancing operating margins in fiscal 2009 and beyond."
Mr. Severson continued, "We also introduced the new VetScan HM5 hematology instrument during the final two weeks of the quarter. I would like to recognize our sales and marketing team for an outstanding job in selling 134 of these units during those final two weeks. We are pleased with this strong indication of market acceptance of our five-part hematology analyzers, and we look to introduce this leading-edge product throughout our veterinary client base. All in all, we are pleased with the results of the quarter and we look forward to the rest of fiscal year 2008."
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. ET on October 24, 2007. Participants can dial (877) 356-5706 or (706) 643-0580 to access the conference call, or can listen via a live Internet web cast, which is available in the Investor Relations section of the company's website at http://www.abaxis.com. A replay of the call is available by visiting http://www.abaxis.com for the next 30 days or by calling (800) 642-1687 or (706) 645-9291, access code 19672265, through October 27, 2007. 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 develops, manufactures and markets portable blood analysis systems for use in any veterinary or human patient-care setting to provide clinicians with rapid blood constituent measurements. The system consists of a compact, 5.1 kilogram (11.2 pounds), portable analyzer and a series of single-use plastic discs, called reagent discs that contain all the chemicals required to perform a panel of up to 13 tests on veterinary patients and 14 tests on human patients. The system can be operated with minimal training and performs multiple routine tests on whole blood, serum or plasma samples. The system provides test results in less than 12 minutes with the precision and accuracy equivalent to a clinical laboratory analyzer.
Use of Non-GAAP Financial Measures
To supplement the financial statements presented in accordance with United States generally accepted accounting principles (GAAP), Abaxis uses operating income per share. This non-GAAP financial presentation is not a measurement of performance under generally accepted accounting principles in the United States of America. Management uses this measure in comparing Abaxis' operating results with historical performance and believes it provides meaningful and comparable information to management and investors to assist in their review of Abaxis' performance relative to prior periods and its competitors.
This press release 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"). 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 our conference call may be affected by risks and uncertainties, including, but not limited to, those related to the market acceptance of the company's products and the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, risks associated with manufacturing and distributing its products on a commercial scale free of defects, risks related to the introduction of new instruments manufactured by third parties, risks associated with entering the human diagnostic market on a larger scale, risks related to the protection of the company's intellectual property or claims of infringement of intellectual property asserted by third parties, risks involved in carrying of inventory, risks associated with the ability to attract, train and retain competent sales personnel, competition and other risks detailed from time to time in Abaxis' periodic reports filed with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made. Abaxis does not undertake and specifically disclaims any obligation to update any forward-looking statements.
ABAXIS, INC.
Condensed Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | Three Months Ended | | Six Months Ended | |
| | | September 30, | | September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
| Revenues | | $ | 25,192 | | $ | 21,037 | | $ | 48,123 | | $ | 41,395 | |
| Cost of revenues | | | 11,335 | | | 9,479 | | | 21,250 | | | 18,400 | |
| Gross profit | | | 13,857 | | | 11,558 | | | 26,873 | | | 22,995 | |
| | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | |
| Research and development | | | 1,822 | | | 1,519 | | | 3,475 | | | 3,236 | |
| Sales and marketing | | | 6,381 | | | 5,533 | | | 11,610 | | | 10,004 | |
| General and administrative | | | 1,538 | | | 1,386 | | | 3,189 | | | 2,970 | |
| Total operating expenses | | | 9,741 | | | 8,438 | | | 18,274 | | | 16,210 | |
| | | | | | | | | | | | | | |
| Income from operations | | | 4,116 | | | 3,120 | | | 8,599 | | | 6,785 | |
| Interest and other income (expense), net | | | 529 | | | 367 | | | 1,028 | | | 703 | |
| Income before income taxes | | | 4,645 | | | 3,487 | | | 9,627 | | | 7,488 | |
| Income tax provision | | | 1,757 | | | 1,373 | | | 3,641 | | | 2,973 | |
| Net income | | $ | 2,888 | | $ | 2,114 | | $ | 5,986 | | $ | 4,515 | |
| | | | | | | | | | | | | | |
| Net income per share: | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.13 | | $ | 0.10 | | $ | 0.28 | | $ | 0.22 | |
| Diluted net income per share | | $ | 0.13 | | $ | 0.10 | | $ | 0.27 | | $ | 0.21 | |
| | | | | | | | | | | | | | |
| Shares used in the calculation of net | | | | | | | | | | | | | |
| income per share: | | | | | | | | | | | | | |
| Weighted average common shares | | | | | | | | | | | | | |
| outstanding - basic | | | 21,448 | | | 20,605 | | | 21,380 | | | 20,437 | |
| Weighted average common shares | | | | | | | | | | | | | |
| outstanding - diluted | | | 22,110 | | | 21,968 | | | 22,103 | | | 21,890 | |
ABAXIS, INC.
Condensed Balance Sheets
(Unaudited and in thousands)
| | | September 30, | | March 31, | |
| | | 2007 | | 2007 | |
| | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 10,820 | | $ | 10,183 | |
| Short-term investments | | | 40,911 | | | 35,028 | |
| Trade receivables, net | | | 19,346 | | | 16,929 | |
| Inventories, net | | | 15,912 | | | 14,813 | |
| Prepaid expenses | | | 958 | | | 1,321 | |
| Net deferred tax asset - current | | | 5,851 | | | 8,979 | |
| Total current assets | | | 93,798 | | | 87,253 | |
| Property and equipment, net | | | 13,603 | | | 12,662 | |
| Intangible assets, net | | | 412 | | | 450 | |
| Other assets | | | 24 | | | 38 | |
| Net deferred tax asset - non-current | | | 2,312 | | | 2,312 | |
| Total assets | | $ | 110,149 | | $ | 102,715 | |
| | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 5,251 | | $ | 6,505 | |
| Accrued payroll and related expenses | | | 4,162 | | | 3,830 | |
| Other accrued liabilities | | | 1,096 | | | 1,169 | |
| Deferred revenue | | | 811 | | | 917 | |
| Warranty reserve | | | 948 | | | 315 | |
| Total current liabilities | | | 12,268 | | | 12,736 | |
| | | | | | | | |
| Non-current liabilities: | | | | | | | |
| Deferred rent | | | 344 | | | 391 | |
| Deferred revenue | | | 1,184 | | | 1,244 | |
| Warranty reserve | | | 346 | | | 532 | |
| Total non-current liabilities | | | 1,874 | | | 2,167 | |
| | | | | | | | |
| Shareholders' equity: | | | | | | | |
| Common stock | | | 105,491 | | | 103,282 | |
| Accumulated deficit | | | (9,484 | ) | | (15,470 | ) |
| Total shareholders' equity | | | 96,007 | | | 87,812 | |
| Total liabilities and shareholders' equity | | $ | 110,149 | | $ | 102,715 | |
Non-GAAP Operating Income Per Share
(In thousands, except per share data)
| | | Three Months Ended September 30, | | Six Months Ended September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| Shares used in the calculation of | | | | | | | | | | | | | |
| operating income per share (non-GAAP): | | | | | | | | | | | | | |
| Weighted average common shares | | | | | | | | | | | | | |
| outstanding - basic | | | 21,448 | | | 20,605 | | | 21,380 | | | 20,437 | |
| Weighted average common shares | | | | | | | | | | | | | |
| outstanding - diluted | | | 22,110 | | | 21,968 | | | 22,103 | | | 21,890 | |
| | | | | | | | | | | | | | |
| Non-GAAP operating income per share - | | | | | | | | | | | | | |
| basic | | $ | 0.19 | | $ | 0.15 | | $ | 0.40 | | $ | 0.33 | |
| Non-GAAP operating income per share - | | | | | | | | | | | | | |
| diluted | | $ | 0.19 | | $ | 0.14 | | $ | 0.39 | | $ | 0.31 | |
Revenues by Geographic Region
(In thousands)
| | | Three Months Ended September 30, | | Six Months Ended September 30, | |
| | | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| North America | | $ | 21,071 | | $ | 17,668 | | $ | 40,240 | | $ | 34,431 | |
| International | | | 4,121 | | | 3,369 | | | 7,883 | | | 6,964 | |
| Total revenues | | $ | 25,192 | | $ | 21,037 | | $ | 48,123 | | $ | 41,395 | |
Revenues by Customer Group
(In thousands)
| | | Three Months Ended September 30, | | Six Months Ended September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| Medical Market | | $ | 5,643 | | $ | 4,120 | | $ | 10,450 | | $ | 7,850 | |
| Veterinary Market | | | 17,989 | | | 15,160 | | | 34,425 | | | 30,701 | |
| Other | | | 1,560 | | | 1,757 | | | 3,248 | | | 2,844 | |
| Total revenues | | $ | 25,192 | | $ | 21,037 | | $ | 48,123 | | $ | 41,395 | |
SOURCE ABAXIS, Inc.
-0- 10/24/2007
/CONTACT: Clint Severson, Chief Executive Officer of ABAXIS, Inc.,
+1-510-675-6500; or Joe Dorame, Robert Blum and Joe Diaz, all of Lytham Partners, LLC, +1-602-889-9700, for ABAXIS, Inc./
/First Call Analyst: /
/FCMN Contact: alsantaines@abaxis.com /
/Web site: http://www.abaxis.com /
(ABAX)
