UNION CITY, Calif.,
April 24, 2014 /PRNewswire/
-- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company
manufacturing point-of-care blood analysis systems, today reported
financial results for the fourth quarter and fiscal year ended
March 31, 2014.
Fourth quarter and fiscal 2014 results include:
- Medical reagent disc sales of 740,000 units for the fourth
quarter, up 37% over last year's comparable quarter, and 2.7
million units for fiscal 2014, up 10% year-over-year.
- Medical market revenues of $7.1
million for the fourth quarter, up 13% over last year's
comparable quarter, and $28.1 million
for fiscal 2014, down 11% year-over-year.
- International revenues of $9.2
million for the fourth quarter, up 14% over last year's
comparable quarter, and $35.3 million
for fiscal 2014, up 6% year-over-year.
- Service revenues from Abaxis Veterinary Reference Laboratories
(AVRL) of $2.8 million for the fourth
quarter, up 55% over last year's comparable quarter, and
$9.8 million for fiscal 2014, up 91%
year-over-year.
- Operating expenses of $15.2
million for the fourth quarter, down 12% compared to last
year's comparable quarter.
- Cash, cash equivalents and short- and long-term investments as
of March 31, 2014 of $121.2 million, an increase of $25.9 million from March
31, 2013.
Dividend Declared
Abaxis today announced that its Board of Directors declared a
quarterly dividend of $0.10 per
common share to be paid on June 17,
2014, to all shareholders of record as of the close of
business on June 3, 2014.
Abaxis anticipates paying quarterly dividends during fiscal 2015 in
June, September, December and March. Future declarations of
quarterly dividends and the establishment of future record and
payment dates are subject to the final determination of Abaxis'
Board of Directors.
Quarterly Results
For the fiscal quarter ended March 31,
2014, Abaxis reported revenues of $42.0 million, as compared with revenues of
$50.0 million for the comparable
period last year, a decrease of 16 percent. Revenues from
sales of instruments, which include chemistry analyzers, hematology
instruments, VSpro specialty analyzers and i-STAT analyzers,
decreased by $3.4 million, or 32
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, decreased by $5.7
million, or 16 percent, compared to the same period last
year. Abaxis reported net income of $3.7 million for the fiscal quarter ended
March 31, 2014, compared to
$6.7 million for the fiscal quarter
ended March 31, 2013. Abaxis'
effective tax rate in the quarter ended March 31, 2014 was 36 percent, compared to 25
percent for the same period last year. Abaxis reported
diluted net income per share of $0.17
(calculated based on 22,547,000 shares) for the three-month period
ended March 31, 2014, compared to
$0.30 per share (calculated based on
22,486,000 shares) for the same period last year.
Fiscal 2014 Results
For the fiscal year ended March 31,
2014, Abaxis reported revenues of $171.9 million, as compared with revenues of
$186.0 million for the prior year, a
decrease of 8 percent. Revenues from instrument sales
decreased by $8.5 million, or 18
percent, over the prior year. Revenues from consumables sales
decreased by $9.9 million, or 8
percent, over the prior year. The company reported net income
of $14.2 million, compared to
$27.5 million (which includes a gain
from legal settlement of $17.3
million) for fiscal 2013. The company's effective tax
rate in fiscal 2014 and 2013 was 35 percent. The company
reported diluted net income per share of $0.63 (calculated based on 22,575,000 shares) for
fiscal 2014, compared to $1.23 per
share (calculated based on 22,381,000 shares) for fiscal 2013.
Other Reported Information
Total sales in the medical market for the fourth quarter of
fiscal 2014 were $7.1 million, an
increase of 13 percent compared to the same period last year.
Total sales in the veterinary market for the fourth quarter of
fiscal 2014 were $34.2 million, a
decrease of 20 percent, compared to the same period last
year. Total medical and veterinary reagent disc sales for the
fourth quarter of fiscal 2014 were $23.5
million, a decrease of 13 percent compared to the same
period last year. Total unit sales of medical and veterinary
reagent discs for the fourth quarter of fiscal 2014 were 1.8
million units, a decrease of 8 percent, compared to the same period
last year. Total medical and veterinary instrument sales for
the fourth quarter of fiscal 2014 were $7.2
million, a decrease of 32 percent, compared to the same
period last year. Total unit sales of medical and veterinary
instruments for the fourth quarter of fiscal 2014 were 1,060 units,
a decrease of 29 percent, compared to the same period last
year. Non-cash compensation expense recognized for
share-based awards during the fourth quarter of fiscal 2014 was
$1.9 million, compared to
$1.8 million for the same period last
year.
Clint Severson, chairman,
president and chief executive officer of Abaxis, said, "We are
pleased with the progress made during the fourth quarter addressing
the inventory imbalances that have impacted our distribution
partners during the second half of fiscal 2014. We have
worked diligently with these distribution partners to address the
issues and firmly believe the company is now better positioned for
revenue growth. A solid indication of that progress shows up,
sequentially, in VetScan chemistry analyzer unit sales which were
up 29% in the fourth quarter compared to our third quarter and
veterinary reagent disc unit sales, which increased 6% in the
fourth quarter compared to our third quarter. Additionally,
revenue from consumables sales increased 7% in the fourth quarter
compared to our third quarter and accounted for 72% of total sales
for the quarter. Revenue from consumables is a very important
component of our revenue stream and we are pleased with the growth
during the fourth quarter. In addition, overall gross margin
for the quarter grew 260 basis points to 50% and the gross margin
on reagent discs increased 136 basis points to 69%, each over our
third quarter. We believe these are all very positive
indications of the measurable progress achieved during the fourth
quarter and should lead to improved operational and financial
results in fiscal 2015."
Mr. Severson added, "We are now gaining real traction on the
medical side of our business with fourth quarter revenue increasing
13% over the fourth quarter of fiscal 2013 to $7.1 million, driven by unit sales of medical
reagent disc sales increasing 37% during the quarter and bringing
us to a record 2.7 million medical reagent disc units sold during
the year. Also, as previously reported, the Food & Drug
Administration (FDA) granted CLIA waived status for capillary draw
for our lipid panel. We believe this action will drive
medical sales as healthcare professionals can diagnose, treat, and
monitor patients with abnormal lipid levels with a simple and quick
finger stick when used in conjunction with our Piccolo
point-of-care analyzer."
"We look forward to fiscal 2015 and beyond with great
anticipation. We have the financial wherewithal to
effectively grow our business going forward, with cash, cash
equivalents and short- and long-term investments of $121.2 million at March
31, 2014, up 27% from last year, and an aggressive team of
employees dedicated to driving value for all of our
stakeholders. With the Board's approval, we are paying a
quarterly dividend during fiscal 2015 and continuing our commitment
to effective and efficient use of our cash," Mr. Severson
concluded.
Conference Call
Abaxis has scheduled a conference call to discuss its financial
results at 4:15 p.m. Eastern Time on
Thursday, April 24, 2014.
Participants can dial (877) 317-6789 or (412) 317-6789 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 10044629, through April
30, 2014. 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, markets and sells 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. The veterinary
business also provides to the animal health and research market a
line of hematology instruments for point-of-care complete blood
counts (CBC), a specialty instrument to screen for and detect
clotting disorders and to measure equine fibrinogen levels, a
handheld instrument for the rapid assessment of certain critical
care tests and rapid point-of-care tests for Heartworm infections,
Parvovirus, Giardia and Lyme disease. Abaxis, through its
AVRL division, provides routine laboratory testing as well as
specialty testing for veterinarians nationwide. For more
information, visit http://www.abaxis.com.
Use of Financial Measures
To supplement the financial statements presented in accordance
with United States generally
accepted accounting principles (GAAP), Abaxis uses operating income
per share, a non-GAAP financial measure. The presentation of
this financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP.
For more information on this non-GAAP financial measure,
refer to the table captioned "Operating Income Per Share" included
at the end of this release. Abaxis defines operating income
per share as operating income divided by the weighted average
outstanding shares. 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.
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' cash position, financial resources and potential
for future growth, market acceptance and penetration of new or
planned product offerings, and future recurring revenues 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 the transition of its U.S.
medical sales to Abbott, potential excess inventory levels and
inventory imbalances at the company's distributors, losses or
system failures with respect to Abaxis' facilities or manufacturing
operations, fluctuations in quarterly operating results, dependence
on sole suppliers, the market acceptance of Abaxis' products and
services, 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 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 and risks related to condition
of the United States
economy. Readers should also refer to the section entitled
"Risk Factors" in Abaxis' annual report on Form 10-K, recent
quarterly reports on Form 10-Q and Abaxis' other 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 to Follow
ABAXIS,
INC.
|
Condensed
Consolidated Statements of Income
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
March
31,
|
March
31,
|
|
2014
|
2013
|
2014
|
2013
|
Revenues
|
$
42,040
|
$
49,951
|
$
171,870
|
$
186,025
|
Cost of
revenues
|
21,028
|
23,768
|
88,761
|
87,794
|
Gross
profit
|
21,012
|
26,183
|
83,109
|
98,231
|
Operating
expenses:
|
|
|
|
|
Research
and development
|
3,460
|
3,229
|
13,647
|
13,577
|
Sales
and marketing
|
8,694
|
11,296
|
37,330
|
46,943
|
General
and administrative
|
3,017
|
2,672
|
11,333
|
12,825
|
Gain
from legal settlement
|
-
|
-
|
-
|
(17,250)
|
Total operating
expenses
|
15,171
|
17,197
|
62,310
|
56,095
|
Income from
operations
|
5,841
|
8,986
|
20,799
|
42,136
|
Interest and other
income (expense), net
|
(2)
|
(65)
|
1,144
|
253
|
Income before income
tax provision
|
5,839
|
8,921
|
21,943
|
42,389
|
Income tax
provision
|
2,101
|
2,223
|
7,758
|
14,930
|
Net income
|
$
3,738
|
$
6,698
|
$
14,185
|
$
27,459
|
Net income per
share:
|
|
|
|
|
Basic net
income per share
|
$
0.17
|
$
0.30
|
$
0.64
|
$
1.25
|
Diluted net
income per share
|
$
0.17
|
$
0.30
|
$
0.63
|
$
1.23
|
|
|
|
|
|
Shares used in the
calculation of net income per share:
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,272
|
22,081
|
22,270
|
21,946
|
Weighted
average common shares outstanding - diluted
|
22,547
|
22,486
|
22,575
|
22,381
|
|
|
|
ABAXIS,
INC.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited and in
thousands)
|
|
|
|
|
March
31,
|
March
31,
|
|
2014
|
2013
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
73,589
|
$
54,910
|
Short-term
investments
|
29,102
|
23,354
|
Receivables,
net
|
28,833
|
40,005
|
Inventories
|
26,978
|
26,786
|
Prepaid
expenses and other current assets
|
2,452
|
3,319
|
Net deferred
tax assets, current
|
4,464
|
4,589
|
Total
current assets
|
165,418
|
152,963
|
Long-term
investments
|
18,491
|
17,000
|
Investment in
unconsolidated affiliate
|
2,646
|
2,613
|
Property and
equipment, net
|
27,176
|
25,330
|
Intangible assets,
net
|
1,624
|
3,122
|
Net deferred tax
assets, non-current
|
1,557
|
643
|
Other
assets
|
74
|
92
|
Total
assets
|
$
216,986
|
$
201,763
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
6,111
|
$
8,123
|
Accrued payroll
and related expenses
|
4,654
|
6,261
|
Accrued
taxes
|
1,144
|
440
|
Other accrued
liabilities
|
2,701
|
2,838
|
Deferred
revenue
|
1,208
|
1,362
|
Warranty
reserve
|
1,047
|
995
|
Total
current liabilities
|
16,865
|
20,019
|
Non-current
liabilities:
|
|
|
Deferred
rent
|
768
|
729
|
Deferred
revenue
|
4,035
|
3,750
|
Warranty
reserve
|
821
|
389
|
Notes payable,
less current portion
|
581
|
682
|
Total
non-current liabilities
|
6,205
|
5,550
|
Total
liabilities
|
23,070
|
25,569
|
Shareholders'
equity:
|
|
|
Common
stock
|
124,603
|
121,019
|
Retained
earnings
|
69,318
|
55,133
|
Accumulated
other comprehensive (loss) income
|
(5)
|
42
|
Total
shareholders' equity
|
193,916
|
176,194
|
Total
liabilities and shareholders' equity
|
$
216,986
|
$
201,763
|
The following table presents our calculation of operating income
per share for the three and twelve months ended March 31, 2014 and 2013.
Operating Income
Per Share
|
|
|
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
March
31,
|
March
31,
|
|
2014
|
2013
|
2014
|
2013
|
Income from
operations
|
$
5,841
|
$
8,986
|
$
20,799
|
$
42,136
|
|
|
|
|
|
Shares used in the
calculation of operating income per share:
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,272
|
22,081
|
22,270
|
21,946
|
Weighted
average common shares outstanding - diluted
|
22,547
|
22,486
|
22,575
|
22,381
|
|
|
|
|
|
Operating income per
share - basic
|
$
0.26
|
$
0.41
|
$
0.93
|
$
1.92
|
Operating income per
share - diluted
|
$
0.26
|
$
0.40
|
$
0.92
|
$
1.88
|
The following table presents our revenues by source for the
three and twelve months ended March 31,
2014 and 2013.
Revenues by
Geographic Region and Customer Group
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
March
31,
|
March
31,
|
|
2014
|
2013
|
2014
|
2013
|
Revenues by
Geographic Region
|
|
|
|
|
North
America
|
$
32,834
|
$
41,898
|
$
136,607
|
$
152,774
|
International
|
9,206
|
8,053
|
35,263
|
33,251
|
Total
revenues
|
$
42,040
|
$
49,951
|
$
171,870
|
$
186,025
|
|
|
|
|
|
Revenues by
Customer Group
|
|
|
|
|
Medical
Market
|
$
7,069
|
$
6,277
|
$
28,134
|
$
31,643
|
Veterinary
Market
|
34,205
|
42,916
|
140,698
|
150,510
|
Other
|
766
|
758
|
3,038
|
3,872
|
Total
revenues
|
$
42,040
|
$
49,951
|
$
171,870
|
$
186,025
|
SOURCE Abaxis, Inc.