| Contact: | Clint Severson | | Lytham Partners, LLC |
| | Chief Executive Officer | | Joe Dorame, Robert Blum and Joe Diaz |
| | Abaxis, Inc. | | 602-889-9700 |
| | 510-675-6500 | | |
ABAXIS REPORTS FINANCIAL PERFORMANCE FOR
THE FIRST QUARTER OF FISCAL 2009
Union City, California - July 24, 2008 - Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the first fiscal quarter ended June 30, 2008.
Quarterly highlights include:
| · | Revenues of $24.6 million, up 7% over last year’s comparable quarter. |
| · | Total sales of chemistry and hematology analyzers of 804 units, up 127 units or 19% over last year’s comparable quarter. |
| · | Vetscan chemistry analyzer sales of 415 units, up 25% over last year’s comparable quarter. |
| · | Medical chemistry analyzer sales of 208 units, up 18% over last year’s comparable quarter. |
| · | Medical reagent disc sales of 404,000 units, up 47% over last year’s comparable quarter. |
| · | Average selling price of medical and veterinary reagent discs of $11.90, a new record, up $0.08 over last year’s comparable quarter. |
| · | Medical market sales of $6.5 million, up 36% over last year’s comparable quarter. |
| · | U.S. government sales of $1.4 million, up 105% over last year’s comparable quarter. |
| · | Total sales in Asia of $892,000, up 27% over last year’s comparable quarter. |
| · | Cash, cash equivalents and short- and long-term investments as of June 30, 2008 of $61.6 million, compared to $49.5 million as of June 30, 2007. |
Quarterly Results: For the fiscal quarter ended June 30, 2008, Abaxis reported revenues of $24.6 million, as compared with revenues of $22.9 million for the comparable period last year, an increase of 7 percent. Instrument, reagent disc and hematology reagent revenues increased by an aggregate of $1.9 million, or 10 percent over the same period last year. The company reported net income of $2.8 million, compared to $3.1 million for the same period last year. The company’s effective tax rate in the first quarter of both fiscal 2008 and 2009 was 38 percent. The company reported diluted net income per share of $0.12 (calculated based on 22,398,000 shares) in the first quarter of fiscal 2009, compared to $0.14 per share (calculated based on 22,102,000 shares) for the same period last year.
Other Reported Information: Reagent disc and hematology reagent revenues for the first quarter of fiscal 2009 were $14.9 million, up 4 percent over the $14.3 million reported in the same period last year. During the quarter, the company sold a total of 1.2 million units of medical and veterinary reagent discs, an increase of 4 percent compared to a total of 1.1 million units of medical and veterinary reagent discs sold during the same period last year. Medical sales in North America, excluding sales to the U.S. government, during the first quarter of fiscal 2009 were $4.4 million, an increase of 19 percent over last year’s comparable quarter. Total sales in the medical market for the first quarter of fiscal 2009 were $6.5 million, an increase of 36 percent over last year’s comparable quarter. Total sales in the veterinary market for the first quarter of fiscal 2009 were $16.6 million, substantially the same as in the comparable period last year. Additionally, veterinary reagent disc sales for the first quarter of fiscal 2009 were $10.4 million, a decrease of 6 percent compared to the same period last year.
The company ended the quarter with $61.6 million in cash, cash equivalents and investments. As of June 30, 2008, the company had a total of $7.0 million in short-term investments and $31.6 million in long-term investments, which long-term investments consisted of investments in auction rate securities. Unrealized gains and losses, net of related income taxes of $1.3 million, are temporary and reported as a component of accumulated other comprehensive loss.
Clint Severson, chairman and chief executive officer of Abaxis, commented, “The slow economy did have a negative effect on our veterinary reagent disc business. While the comparisons over the first fiscal quarter last year were difficult due to increased veterinary reagent disc sales because of the pet food scare and the fact we announced a price increase in the last quarter of fiscal 2008, clearly the economy has been a drag on our veterinary consumable sales. The good news is that our Vetscan chemistry analyzer sales increased by 83 units or 25% over last year’s comparable quarter. Improving product quality and the fact that a Vetscan chemistry analyzer can make a veterinary practice more efficient in a difficult economy are two reasons for the increase.”
Mr. Severson continued, “Our medical business continues on a strong growth path. In conjunction with our distribution partners, we are seeing enthusiastic acceptance of our products on a nationwide basis throughout the medical community. With our veterinary business poised to resume its more historical sales track, we look forward to improved operating and financial results in the coming quarters.”
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on July 24, 2008. 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 50736212, through July 27, 2008. 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 its 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 GAAP 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 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”). 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 associated with liquidity concerns related to our auction rate securities, risks related to the protection of the company’s intellectual property or claims of infringement of intellectual property asserted by third parties, predictions related to growth in the United States economy, risks involved in carrying of inventory 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 statements were made. Abaxis does not undertake and specifically disclaims any obligation to update any forward-looking statements.
Financial Tables on Following Pages
ABAXIS, INC. |
Condensed Statements of Operations |
(In thousands, except per share data) |
(Unaudited) |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2008 | | 2007 | |
| | | | | | |
| Revenues | | $ | 24,572 | | $ | 22,931 | |
| Cost of revenues | | | 11,069 | | | 9,915 | |
| Gross profit | | | 13,503 | | | 13,016 | |
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Research and development | | | 1,997 | | | 1,653 | |
| Sales and marketing | | | 5,827 | | | 5,229 | |
| General and administrative | | | 1,662 | | | 1,651 | |
| Total operating expenses | | | 9,486 | | | 8,533 | |
| | | | | | | | |
| Income from operations | | | 4,017 | | | 4,483 | |
| Interest and other income (expense), net | | | 462 | | | 499 | |
| Income before income taxes | | | 4,479 | | | 4,982 | |
| Income tax provision | | | 1,703 | | | 1,884 | |
| Net income | | $ | 2,776 | | $ | 3,098 | |
| | | | | | | | |
| Net income per share: | | | | | | | |
| Basic net income per share | | $ | 0.13 | | $ | 0.15 | |
| Diluted net income per share | | $ | 0.12 | | $ | 0.14 | |
| | | | | | | | |
| Shares used in the calculation of net income per share: | | | | | | | |
| Weighted average common shares outstanding - basic | | | 21,735 | | | 21,311 | |
| Weighted average common shares outstanding - diluted | | | 22,398 | | | 22,102 | |
ABAXIS, INC. |
Condensed Balance Sheets |
(Unaudited and in thousands) |
| | | June 30, | | March 31, | |
| | | 2008 | | 2008 | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 23,031 | | $ | 17,219 | |
| Short-term investments | | | 6,991 | | | 6,991 | |
| Trade receivables, net | | | 20,952 | | | 20,873 | |
| Inventories, net | | | 18,358 | | | 18,657 | |
| Prepaid expenses | | | 1,190 | | | 427 | |
| Net deferred tax asset - current | | | 2,760 | | | 2,426 | |
| Total current assets | | | 73,282 | | | 66,593 | |
| Long-term investments | | | 31,559 | | | 35,463 | |
| Property and equipment, net | | | 14,727 | | | 14,599 | |
| Intangible assets, net | | | 356 | | | 375 | |
| Other assets | | | - | | | 5 | |
| Net deferred tax asset - non-current | | | 3,855 | | | 3,868 | |
| Total assets | | $ | 123,779 | | $ | 120,903 | |
| | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 4,808 | | $ | 6,421 | |
| Accrued payroll and related expenses | | | 3,447 | | | 4,277 | |
| Other accrued liabilities | | | 1,209 | | | 1,369 | |
| Deferred revenue | | | 875 | | | 807 | |
| Warranty reserve | | | 1,108 | | | 1,219 | |
| Total current liabilities | | | 11,447 | | | 14,093 | |
| | | | | | | | |
| Non-current liabilities: | | | | | | | |
| Deferred rent | | | 251 | | | 286 | |
| Deferred revenue | | | 1,409 | | | 1,146 | |
| Warranty reserve | | | 1,007 | | | 729 | |
| Total non-current liabilities | | | 2,667 | | | 2,161 | |
| | | | | | | | |
| Shareholders' equity: | | | | | | | |
| Common stock | | | 111,188 | | | 109,031 | |
| Accumulated deficit | | | (191 | ) | | (2,967 | ) |
| Accumulated other comprehensive loss | | | (1,332 | ) | | (1,415 | ) |
| Total shareholders' equity | | | 109,665 | | | 104,649 | |
| Total liabilities and shareholders' equity | | $ | 123,779 | | $ | 120,903 | |
Non-GAAP Operating Income Per Share |
(In thousands, except per share data) |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2008 | | 2007 | |
| Shares used in the calculation of operating income per share (non-GAAP): | | | | | | | |
| Weighted average common shares outstanding - basic | | | 21,735 | | | 21,311 | |
| Weighted average common shares outstanding - diluted | | | 22,398 | | | 22,102 | |
| | | | | | | | |
| Non-GAAP operating income per share - basic | | $ | 0.18 | | $ | 0.21 | |
| Non-GAAP operating income per share - diluted | | $ | 0.18 | | $ | 0.20 | |
Revenues by Geographic Region |
(In thousands) |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2008 | | 2007 | |
| North America | | $ | 20,295 | | $ | 19,169 | |
| International | | | 4,277 | | | 3,762 | |
| Total revenues | | $ | 24,572 | | $ | 22,931 | |
Revenues by Customer Group |
(In thousands) |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2008 | | 2007 | |
| Medical Market | | $ | 6,529 | | $ | 4,807 | |
| Veterinary Market | | | 16,613 | | | 16,436 | |
| Other | | | 1,430 | | | 1,688 | |
| Total revenues | | $ | 24,572 | | $ | 22,931 | |
