Exhibit 99.1
Abaxis Reports Record Sales for the Second Quarter of Fiscal 2007
Year-to-Date Revenues Increased 31% and Net Income Increased 37% Over Fiscal 2006
UNION CITY, Calif., Oct. 25 /PRNewswire-FirstCall/ -- ABAXIS, Inc. (Nasdaq: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the second fiscal quarter ended September 30, 2006.
Second Quarter Highlights include:
| -- | Record revenues of $21.0 million, up 21% over last year’s comparable quarter. |
| -- | Record Piccolo instruments sales of 173 units. |
| -- | Record total reagent disc sales of 1.0 million units, compared to 871,000 units sold during the same period last year. |
| -- | Record medical reagent disc sales in North America, excluding sales to the U.S. Military, of 161,000 units, compared to 84,000 units in the same period last year. |
| -- | North America revenues of $17.7 million, up 18% over last year’s comparable quarter. |
| -- | International revenues of $3.4 million, up 37% over last year’s comparable quarter. |
| -- | Cash, cash equivalents and short-term investments as of September 30, 2006: $40.1 million, up 48% compared to September 30, 2005. |
Quarterly Results: For the second fiscal quarter ended September 30, 2006, Abaxis reported revenues of $21.0 million, as compared with revenues of $17.4 million for the comparable period last year, an increase of 21 percent. Instrument revenues and reagent disc and hematology reagent revenues increased by $3.1 million, or 20 percent over the same period last year. The Company reported net income attributable to common shareholders of $2.1 million, compared to $2.3 million for the same period last year. The Company’s effective tax rate in the quarter ended September 30, 2006 was 39 percent, compared to 37 percent for the same period last year. The Company reported diluted net income per share of $0.10 (calculated based on 21,968,000 shares), compared to $0.11 per share (calculated based on 21,321,000 shares) for the same period last year.
Six Month Results: For the six-month period ended September 30, 2006, Abaxis reported revenues of $41.4 million, as compared with revenues of $31.7 million for the comparable period last year, an increase of 31 percent. Instrument revenues and reagent disc and hematology reagent revenues increased by $8.6 million, or 29 percent over the same period last year. The Company reported net income attributable to common shareholders of $4.5 million, compared to $3.3 million for the same period last year. The Company’s effective tax rate in the six months ended September 30, 2006 was 40 percent, compared to 37 percent for the same period last year. The Company reported diluted net income per share of $0.21 (calculated based on 21,890,000 shares), compared to $0.16 per share (calculated based on 21,235,000 shares) for the same period last year.
Other Reported Information: Reagent disc and hematology reagent revenues for the second quarter of fiscal 2007 were $12.3 million, up 16 percent over the $10.6 million reported in the same period last year. During the quarter, the Company sold 1,007,000 medical and veterinary reagent discs, an increase of 16 percent, compared to 871,000 medical and veterinary reagent discs sold during the same period last year. Quarterly total medical sales were $4.1 million, an increase of 23 percent over last year’s comparable quarter. Medical sales in North America, excluding sales to the U.S. Military, were $2.9 million, an increase of 60% over last year’s comparable quarter. Total veterinary sales were $15.2 million, up 19 percent over last year’s comparable quarter. Additionally, veterinary reagent disc sales were $9.2 million, an increase of 9 percent, compared to the same period last year. The Company ended the quarter with $40.1 million in cash, cash equivalents and short-term investments.
Clint Severson, president and chief executive officer of Abaxis, stated, “We are pleased with the continued growth in both the medical and veterinary markets. Year to date our medical market revenues are up 56% and our veterinary market revenues are up 24%. We are particularly pleased with the 50% year-to-date revenue growth in our international markets. This is a strong indication that there are robust markets outside of the U.S. that can drive substantial future growth for our company.”
“We are also very pleased with the 37% net income growth that we have achieved in the first half of the fiscal year compared with the same period last year,” Mr. Severson continued. “Although results for the just completed quarter were impacted by start-up expenses associated with the introduction of the new VS2 product line, our first half results were very strong.”
Mr. Severson concluded, “During the quarter we crossed a major threshold by selling more than 1 million reagent discs, of which 24% were sold into the medical market. Our point-of-care approach to provide medical professionals with blood analysis tools that permit real-time diagnostic capabilities continue to gain increasing market acceptance. Additionally, the financial condition of the company is very strong with a solid cash position and no long-term debt. We look forward with great anticipation to the future opportunities ahead of us.”
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. ET on October 25, 2006. To access the conference call, participants can dial (877) 707-9628 or (785) 832-2422 and reference conference ID: 7ABAXIS, or listen via a live Internet web cast, which can be found at www.abaxis.com . A replay of the call is available by visiting www.abaxis.com for the next 30 days or by calling (888) 562-2847 or (402) 220-7358 through October 28, 2006. This press release is also available prior to and after the call via Abaxis’ website or the Securities Exchange Commission’s website at 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, 6.9 kilogram (15 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 14 minutes with the precision and accuracy equivalent to a clinical laboratory analyzer.
Use of Non-GAAP Financial Measures
This earnings release presents Abaxis’ income from operations and net income attributable to common shareholders. To supplement the financial statements presented in accordance with GAAP included as part of this release, Abaxis uses non-GAAP measures of operating income per share on a pro forma basis, which is not a measurement of performance under generally accepted accounting principles in the United States of America. Management uses these measures in comparing Abaxis’ historical performance and believes that these measures provide 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 include, but are not limited to, risks and uncertainties related to fluctuations in the Company’s share price, 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, general market conditions, 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.
Summary of Financial Information
(In thousands, except per share data)
(Unaudited)
| | Three Months Ended
September 30, | | Six Months Ended
September 30, | |
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| | 2006 | | 2005 | | 2006 | | 2005 | |
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Revenues | | $ | 21,037 | | $ | 17,413 | | $ | 41,395 | | $ | 31,686 | |
Cost of revenues | | | 9,479 | | | 7,321 | | | 18,400 | | | 13,767 | |
Gross profit | | | 11,558 | | | 10,092 | | | 22,995 | | | 17,919 | |
Operating expenses: | | | | | | | | | | | | | |
Research and development | | | 1,519 | | | 1,431 | | | 3,236 | | | 3,063 | |
Sales and marketing | | | 5,533 | | | 3,814 | | | 10,004 | | | 7,035 | |
General and administrative | | | 1,386 | | | 1,378 | | | 2,970 | | | 2,832 | |
Total operating expenses | | | 8,438 | | | 6,623 | | | 16,210 | | | 12,930 | |
Income from operations | | | 3,120 | | | 3,469 | | | 6,785 | | | 4,989 | |
Interest and other income | | | 394 | | | 181 | | | 734 | | | 247 | |
Interest and other expense | | | (27 | ) | | — | | | (31 | ) | | (13 | ) |
Income before income taxes | | | 3,487 | | | 3,650 | | | 7,488 | | | 5,223 | |
Income tax provision | | | 1,373 | | | 1,352 | | | 2,973 | | | 1,924 | |
Net income | | $ | 2,114 | | $ | 2,298 | | $ | 4,515 | | $ | 3,299 | |
Net income per share: | | | | | | | | | | | | | |
Basic net income per share | | $ | 0.10 | | $ | 0.12 | | $ | 0.22 | | $ | 0.17 | |
Diluted net income per share | | $ | 0.10 | | $ | 0.11 | | $ | 0.21 | | $ | 0.16 | |
Shares used in the calculation of net income per share: | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 20,605 | | | 19,920 | | | 20,437 | | | 19,909 | |
Weighted average common shares outstanding - diluted | | | 21,968 | | | 21,321 | | | 21,890 | | | 21,235 | |
ABAXIS, Inc.
Balance Sheet Data:
(Unaudited and in thousands)
| | September 30,
2006 | | March 31,
2006 | |
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Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 13,227 | | $ | 10,164 | |
Short-term investments | | | 26,870 | | | 20,372 | |
Trade receivables (net) | | | 14,800 | | | 14,638 | |
Inventories | | | 11,455 | | | 10,396 | |
Prepaid expenses | | | 680 | | | 446 | |
Net deferred tax asset - current | | | 4,254 | | | 4,294 | |
Total current assets | | | 71,286 | | | 60,310 | |
Property and equipment, net | | | 11,286 | | | 10,038 | |
Intangible assets, net | | | 487 | | | 525 | |
Deposits and other assets | | | 60 | | | 80 | |
Net deferred tax asset - non-current | | | 9,395 | | | 12,125 | |
Total assets | | $ | 92,514 | | $ | 83,078 | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 6,064 | | $ | 4,614 | |
Accrued payroll and related expenses | | | 3,644 | | | 3,890 | |
Other accrued liabilities | | | 989 | | | 705 | |
Warranty reserve | | | 313 | | | 213 | |
Deferred revenue | | | 846 | | | 939 | |
Total current liabilities | | | 11,856 | | | 10,361 | |
Non-current liabilities: | | | | | | | |
Deferred rent | | | 428 | | | 478 | |
Deferred revenue, less current portion | | | 936 | | | 938 | |
Other long-term liabilities | | | 265 | | | 263 | |
Total non-current liabilities | | | 1,629 | | | 1,679 | |
Shareholders’ equity: | | | | | | | |
Common stock | | | 99,922 | | | 96,506 | |
Accumulated deficit | | | (21,028 | ) | | (25,543 | ) |
Accumulated other comprehensive income | | | 135 | | | 75 | |
Total shareholders’ equity | | | 79,029 | | | 71,038 | |
Total liabilities and shareholders’ equity | | $ | 92,514 | | $ | 83,078 | |
Non-GAAP Operating Income Per Share
(In thousands, except per share data)
| | Three Months Ended
September 30, | | Six Months Ended
September 30, | |
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| | 2006 | | 2005 | | 2006 | | 2005 | |
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Shares used in the calculation of operating income per share (non- GAAP): | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 20,605 | | | 19,920 | | | 20,437 | | | 19,909 | |
Weighted average common shares outstanding - diluted | | | 21,968 | | | 21,321 | | | 21,890 | | | 21,235 | |
Non-GAAP operating income per share - basic | | $ | 0.15 | | $ | 0.17 | | $ | 0.33 | | $ | 0.25 | |
Non-GAAP operating income per share - diluted | | $ | 0.14 | | $ | 0.16 | | $ | 0.31 | | $ | 0.23 | |
Customer and Geographic Information
(in thousands)
| | Three Months Ended
September 30, | | Six Months Ended
September 30, | |
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| | 2006 | | 2005 | | 2006 | | 2005 | |
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North America | | $ | 17,668 | | $ | 14,951 | | $ | 34,431 | | $ | 27,038 | |
International | | | 3,369 | | | 2,462 | | | 6,964 | | | 4,648 | |
Total revenues | | $ | 21,037 | | $ | 17,413 | | $ | 41,395 | | $ | 31,686 | |
Customer and Market Information
(in thousands)
| | Three Months Ended
September 30, | | Six Months Ended
September 30, | |
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| | 2006 | | 2005 | | 2006 | | 2005 | |
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Medical Market | | $ | 4,120 | | $ | 3,347 | | $ | 7,850 | | $ | 5,021 | |
Veterinary Market | | | 15,160 | | | 12,713 | | | 30,701 | | | 24,719 | |
Other | | | 1,757 | | | 1,353 | | | 2,844 | | | 1,946 | |
Total revenues | | $ | 21,037 | | $ | 17,413 | | $ | 41,395 | | $ | 31,686 | |
SOURCE Abaxis, Inc.
-0- 10/25/2006
/CONTACT: Clint Severson, Chief Executive Officer, Abaxis, Inc., +1-510-675-6500; or Joe Dorame, or Robert Blum, or Joe Diaz, all of Lytham Partners, LLC, +1-602-889-9700, for Abaxis, Inc./
/Web site: http://www.abaxis.com /
