Exhibit 99.1
ABATIX CORP. REPORTS OPERATING RESULTS FOR SECOND QUARTER 2006
DALLAS, Aug. 8 /PRNewswire-FirstCall/ -- ABATIX CORP. (Nasdaq: ABIX) today
announced net sales of $16,956,000 for the second quarter of 2006 increased 6%
from net sales of $16,028,000 in 2005 and net earnings of $384,000 or $.22 per
share for the second quarter of 2006 compared to net earnings of $350,000 or
$.20 per share in 2005. Sales in the first six months of 2006 of $33,562,000
increased 9% from 2005 net sales of $30,754,000 and net earnings of $604,000 or
$.35 per share for the first six months of 2006 compared to net earnings of
$548,000 or $.32 per share in 2005. The increase in sales for 2006 is primarily
attributable to sales in the construction, industrial safety and environmental
markets as the U.S. economy remains strong. The earnings for both the second
quarter and first six months include a change in an accounting estimate related
to health care costs. Based on improved data, the Company reduced its liability
for health care costs in June 2006, increasing net earnings by approximately
$81,000, net of tax of $53,000. In addition to health care costs, the net
earnings were positively impacted by higher gross profits, lower bad debt
expense and lower legal fees. The net earnings were negatively impacted by
higher labor costs related to the increased volume, higher freight costs caused
by increased volume and fuel costs, higher rent primarily related to the
temporary facility and our Dallas operations, costs related to our
Sarbanes-Oxley compliance work and higher interest expense.
Mr. Terry Shaver, CEO, stated, "As the economy continues to grow or remain
stable, we should continue to see strength and opportunity for growth in our
markets. In addition to top line growth, we also continue to focus on
streamlining our operations and controlling costs. Although there are several
factors that will affect our cost structure in the second half of this year,
most of these factors provide the platform for continued growth beyond 2006."
Mr. Shaver continued, "As part of our long-term growth strategy, we will be
opening a new facility in Jacksonville, Florida in August. Although this
facility is not expected to be profitable this year, we are excited about our
ability to service the customers in the Southeastern United States on a
permanent basis. Additionally, we moved our Dallas operations, including our
corporate office and the operations of our wholly-owned subsidiary, to a new
facility in July 2006. While there are significant costs related to a move,
including, but not limited to, upgrade of office equipment, new material
handling equipment, and moving expenses, this new facility provides us the room
to grow and to make certain productivity improvements in our warehouse
operations. Finally, the revenue stream in Louisiana does not support the costs
of maintaining our facility. Therefore, we are not renewing the lease for our
temporary facility that expires in early September. We currently estimate the
costs related to closing that facility will not exceed approximately $50,000.
These costs will be expensed in the third quarter 2006."
This news release contains, among other things, certain statements of a
forward-looking nature relating to future events or the future business
performance of ABATIX CORP. Such statements involve a number of risks and
uncertainties including, without limitation, the occurrence, timing and property
devastation from disasters; global, national and local economic and political
conditions; changes in laws and regulations relating to the Company's products
and the import of such products; market acceptance of new products; existence or
development of competitive products that outperform current product lines or are
priced more competitively; inability to hire and train quality people or retain
current employees; changes in interest rates; the financial status of and
relationships with key customers and vendors; efforts to control and/or reduce
costs; fluctuations in oil prices; or the Company's success in the process of
management's assessment and auditor attestation of internal controls, as
required by the Sarbanes-Oxley Act of 2002. We do not undertake any obligation
to publicly update forward-looking statements to reflect events or circumstances
after the date on which the statement is made or to reflect the occurrence of
unanticipated events, except as required by law or regulation.
ABATIX CORP. is a full line supplier to the construction tool, industrial
safety, environmental and homeland security industries. The Company currently
has eight distribution centers in Dallas and Houston, Texas, in San Francisco
and Los Angeles, California, in Phoenix, Arizona, in Seattle, Washington, in Las
Vegas, Nevada and in Jacksonville, Florida. These distribution centers serve
customers throughout the Southeast, Southwest, Midwest, Pacific Coast, Alaska
and Hawaii. More information about the Company can be found on the Abatix web
site at http://www.abatix.com and on the IESI website at
http://www.buy-iesi.com.
ABATIX CORP.
SELECTED FINANCIAL INFORMATION
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $ 16,955,806 $ 16,027,711 $ 33,562,136 $ 30,754,476
Cost of sales (12,056,394) (11,638,261) (24,023,361) (22,223,281)
Gross profit 4,899,412 4,389,450 9,538,775 8,531,195
Selling, general
and administrative
expenses (4,125,112) (3,739,536) (8,277,997) (7,492,249)
Operating profit 774,300 649,914 1,260,778 1,038,946
Other expense, net (136,115) (74,649) (261,831) (135,165)
Earnings before
income taxes 638,185 575,265 998,947 903,781
Income tax expense (254,223) (225,552) (394,988) (355,753)
Net earnings $ 383,962 $ 349,713 $ 603,959 $ 548,028
Basic and diluted
earnings per share $ .22 $ .20 $ .35 $ .32
Basic and diluted
weighted average
shares outstanding 1,711,148 1,711,148 1,711,148 1,711,148
As of:
---------------------------
June 30, December 31,
2006 2005
------------ ------------
Current assets $ 22,483,379 $ 24,965,759
Total assets $ 24,059,089 $ 26,431,723
Current liabilities $ 12,381,099 $ 15,347,550
Total liabilities $ 12,404,654 $ 15,381,247
Total stockholders' equity $ 11,654,435 $ 11,050,476
SOURCE ABATIX CORP.
-0- 08/08/2006
/CONTACT: Frank Cinatl of ABATIX CORP., +1-888-ABATIX-X, or
+1-888-222-8499, or fcinatl@abatix.com /
/Web site: http://www.abatix.com
http://www.buy-iesi.com