UNION CITY, Calif.,
Jan. 26, 2017 /PRNewswire/ -- Abaxis,
Inc. (NasdaqGS: ABAX), a global diagnostics company manufacturing
point-of-care blood analysis instruments and consumables for the
medical and veterinary markets worldwide, today reported financial
results for the third fiscal quarter ended December 31, 2016.
Third quarter results include:
- Revenues from continuing operations of $52.8 million, flat compared to last year's
comparable quarter and consistent with the company's
previously-announced estimate for the quarter.
- Veterinary market revenues of $43.2
million, up 6% over last year's comparable quarter.
- Revenues from sales of consumables, which include reagent
discs, hematology reagent kits, VSpro specialty cartridges,
i-STAT cartridges and rapid tests, of $40.4
million, up 5% over last year's comparable quarter.
- Revenues attributable to customers in Europe, including sales from our United Kingdom subsidiary, of $8.0 million, up 6% over last year's comparable
quarter. Revenues from our United
Kingdom subsidiary of $2.4
million, flat, compared to last year's comparable quarter,
and up 22% on a constant currency basis compared to last year's
comparable quarter.
- Gross margin of 56%, consistent with the company's
previously-announced estimate for the quarter.
- Income from continuing operations before income tax provision
of $10.8 million, consistent with the
company's previously-announced estimate for the quarter.
- Cash, cash equivalents and investments as of December 31, 2016 of $159.7 million.
- Dividends of $3.2 million, or
$0.14 per share, paid during the
third quarter of fiscal 2017.
Management Discussion
Clint Severson, chairman and
chief executive officer of Abaxis, said, "As previously announced,
revenues for the quarter were essentially flat at $52.8 million compared to last year's third
quarter, and increased 4% for the nine-month period ended
December 31, 2016 as compared to last
year's comparable period. Results for the quarter were
negatively impacted by many factors, including foreign currency
exchange rates, which reduced revenues by approximately
$0.7 million and the reduction of
medical and veterinary orders from distributors including
Abbott Point of Care, Inc. and a
difficult comparison for the medical business due to a large sale
of Piccolo Xpress instruments in the
People's Republic of China in the prior year quarter.
On the positive side, we are pleased our consumable revenues
increased by 5% and accounted for 76% of total revenues in the
third quarter as compared to last year's comparable quarter.
As a result, veterinary sales increased 6% and medical sales were
down 21% for the third quarter of fiscal 2017 compared to last
year's comparable quarter."
Despite these challenges, our business model has continued to
generate strong cash flow, which has allowed us to continue to
invest and work on a number of key initiatives to drive future
medical and veterinary sales. Importantly, as part of our
product portfolio expansion strategies, we plan to showcase several
new products for our animal health business at the upcoming North
American Veterinary Conference in early February 2017. Among these will be a new
point-of-care urine sediment analyzer that we expect to launch into
the veterinary market within twelve months, as well as a new
point-of-care urine chemistry analyzer that we expect to launch
before mid-year. We view both of these as significant
additions to our product portfolio that have the potential to
benefit our long-term growth."
Mr. Severson concluded, "I am pleased our strong financial
foundation allowed us to reward our shareholders with a quarterly
cash dividend of $0.14 per common
share during the third quarter. We had $159.7 million in cash, cash equivalents and
short- and long-term investments at December
31, 2016. Looking forward, we are highly focused on
driving operational efficiencies, investing in key growth
initiatives and driving both top and bottom line growth."
Dividend Declared
Abaxis today announced that its Board of Directors declared a
quarterly cash dividend of $0.14 per
common share, to be paid on March 15,
2017, to all shareholders of record as of the close of
business on March 1, 2017.
Results of Operations
Quarterly Results
For the fiscal quarter ended December 31,
2016, Abaxis reported revenues from continuing operations of
$52.8 million, as compared with
revenues of $52.9 million for the
comparable period last year. Revenues from sales of
instruments, which include chemistry analyzers, hematology
instruments, VSpro specialty analyzers and i‑STAT analyzers,
decreased by $2.3 million, or 19%,
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, increased by $1.9 million, or
5%, over the same period last year. Abaxis reported income
from continuing operations of $10.8
million and net income from continuing operations of
$6.9 million for the fiscal quarter
ended December 31, 2016, compared to
$11.3 million and $8.0 million for the fiscal quarter ended
December 31, 2015,
respectively. Abaxis' effective tax rate in the fiscal
quarter ended December 31, 2016 was
36%, compared to 31% for the same period last year. Abaxis
reported diluted net income per share of $0.30 (calculated based on 22,789,000 shares) for
the fiscal quarter ended December 31,
2016, compared to $0.35 per
share (calculated based on 22,889,000 shares) for the same period
last year.
Nine-Month Results
For the nine-month period ended December
31, 2016, Abaxis reported revenues from continuing
operations of $169.0 million, as
compared with revenues of $161.9
million for the comparable period last year, an increase of
4%. Revenues from instrument sales decreased by $2.6 million, or 8%, compared to the same period
last year. Revenues from consumables sales, increased by
$8.6 million, or 7%, over the same
period last year. Abaxis reported income from continuing
operations of $33.3 million and net
income from continuing operations of $25.2
million (which includes a gain from sale of an equity method
investment of $3.8 million after tax)
for the nine-month period ended December 31,
2016, compared to $34.0
million and $22.8 million for
the nine-month period ended December 31,
2015, respectively. Abaxis' effective tax rate in the
nine-month period ended December 31,
2016 was 36%, compared to 34% for the same period last
year. Abaxis reported diluted net income per share of
$1.11 (calculated based on 22,753,000
shares) for the nine-month period ended December 31, 2016, compared to $1.00 per share (calculated based on 22,884,000
shares) for the same period last year.
Other Reported Information
Non-cash compensation expense recognized for share-based awards
during the three-months ended December 31,
2016 and 2015 was $2.4 million
and $2.4 million, respectively.
Abaxis paid $3.2 million in cash
dividends to shareholders during the third quarter of fiscal
2017.
Conference Call
Abaxis has scheduled a conference call to discuss its financial
results at 4:15 p.m. Eastern Time on
Thursday, January 26, 2017.
Participants can dial (844) 855-9498 or (412) 317-5496 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 10099901, through February
2, 2017. 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, Inc. is a worldwide developer, manufacturer and marketer
of portable blood analysis systems that are used in a broad range
of medical specialties in human or veterinary patient care to
provide clinicians with rapid blood constituent measurements.
Our mission is to improve the efficiency of care delivery to and
the quality of life of patients in the medical and veterinary
markets. We provide leading edge technology and tools that
support best medical practices, enabling physicians and
veterinarians to respond to the health needs of their clients at
the point of care while operating economical and profitable
practices. For more information, visit
http://www.abaxis.com.
Non-GAAP Financial Measures
The non-GAAP measure of revenue growth on a constant currency
basis is calculated by translating the revenues for the quarter
ended December 31, 2016 at the
average exchange rates in effect during the quarter ended
December 31, 2015 rather than the
actual exchange rates in effect for the quarter ended December 31, 2016. We believe that
presenting the percentage change in revenues on a constant currency
basis assists in the understanding of actual revenue fluctuations
by excluding the impact of foreign currency fluctuations. A
reconciliation from U.S. GAAP revenues to non-GAAP revenues from
Abaxis' United Kingdom subsidiary
on a constant currency basis has been provided in the financial
statement tables included below in this press release.
Forward Looking Statements
This press release includes 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' ability
to drive future medical and veterinary sales, drive operational
efficiencies, invest in key growth initiatives and drive both top
and bottom line growth, Abaxis' plan to showcase new products for
its animal health business at the North American Veterinary
Conference in early February 2017,
the expected launch timing for new point-of-care urine sediment and
chemistry analyzers, the ability of new products to benefit Abaxis'
long-term growth, payment of future cash dividends, and future
revenues, income 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. Forward-looking statements
contained in this press release may be affected by risks and
uncertainties that may cause actual results to differ materially
from those projected or implied in such forward-looking statements,
including, but not limited to, risks and uncertainties related to
Abaxis' manufacturing operations, including the vulnerability of
its manufacturing operations to potential interruptions and delays
and its ability to manufacture products free of defects, Abaxis'
ability to compete effectively, market acceptance of Abaxis'
products, fluctuations in quarterly operating results and
difficulty in predicting future results, the performance of Abaxis'
independent distributors and Abaxis' ability to manage their
inventory levels effectively, expansion of Abaxis' sales and
marketing and distribution efforts, Abaxis' dependence on Abbott
Point of Care, Inc. for its U.S. medical sales, dependence on sole
or limited source suppliers, the effect of exchange rate
fluctuations on international operations, dependence on key
personnel, risks related to the protection of Abaxis' intellectual
property or claims of infringement of intellectual property
asserted by third parties. Readers should also refer to the
section entitled "Risk Factors" in Abaxis' Annual Report on Form
10-K, and subsequently filed quarterly reports on Form 10-Q 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
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
December
31,
|
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
Revenues
|
$
52,772
|
$
52,876
|
$
169,020
|
$
161,941
|
Cost of
revenues
|
23,368
|
23,274
|
75,357
|
70,985
|
Gross
profit
|
29,404
|
29,602
|
93,663
|
90,956
|
Operating
expenses:
|
|
|
|
|
Research
and development
|
4,776
|
4,428
|
14,915
|
13,840
|
Sales
and marketing
|
10,629
|
10,395
|
33,707
|
31,766
|
General
and administrative
|
3,159
|
3,524
|
11,714
|
11,301
|
Total operating
expenses
|
18,564
|
18,347
|
60,336
|
56,907
|
Income from
operations
|
10,840
|
11,255
|
33,327
|
34,049
|
Interest and other
income (expense), net
|
(52)
|
231
|
6,197
|
716
|
Income from
continuing operations before income tax provision
|
10,788
|
11,486
|
39,524
|
34,765
|
Income tax
provision
|
3,929
|
3,532
|
14,288
|
11,993
|
Income from
continuing operations
|
6,859
|
7,954
|
25,236
|
22,772
|
Discontinued
operations
|
|
|
|
|
Income (loss)
from discontinued operations, net of tax
|
(15)
|
4
|
(70)
|
(3)
|
Net income
|
$
6,844
|
$
7,958
|
$
25,166
|
$
22,769
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
|
|
|
|
Continuing operations
|
$
0.30
|
$
0.35
|
$
1.12
|
$
1.00
|
Discontinued operations
|
-
|
-
|
-
|
-
|
Basic net
income per share
|
$
0.30
|
$
0.35
|
$
1.12
|
$
1.00
|
Diluted
|
|
|
|
|
Continuing operations
|
$
0.30
|
$
0.35
|
$
1.11
|
$
1.00
|
Discontinued operations
|
-
|
-
|
-
|
-
|
Diluted net
income per share
|
$
0.30
|
$
0.35
|
$
1.11
|
$
1.00
|
|
|
|
|
|
Shares used in the
calculation of net income per share:
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
22,535
|
22,725
|
22,508
|
22,684
|
Weighted
average common shares outstanding - diluted
|
22,789
|
22,889
|
22,753
|
22,884
|
Cash dividends
declared per share
|
$
0.14
|
$
0.11
|
$
0.38
|
$
0.33
|
ABAXIS,
INC.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited and in
thousands)
|
|
|
|
|
December
31,
|
March
31,
|
|
2016
|
2016
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
85,653
|
$
88,323
|
Short-term
investments
|
52,291
|
41,474
|
Receivables,
net
|
35,245
|
35,148
|
Inventories
|
39,192
|
35,131
|
Prepaid
expenses and other current assets
|
6,225
|
6,351
|
Net deferred
tax assets, current
|
4,881
|
4,810
|
Current assets
of discontinued operations
|
66
|
961
|
Total
current assets
|
223,553
|
212,198
|
Long-term
investments
|
21,738
|
22,458
|
Investment in
unconsolidated affiliates
|
3,000
|
2,705
|
Property and
equipment, net
|
33,709
|
26,842
|
Intangible assets,
net
|
1,209
|
1,324
|
Net deferred tax
assets, non-current
|
4,492
|
3,903
|
Other
assets
|
6,290
|
1,950
|
Total
assets
|
$
293,991
|
$
271,380
|
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
8,922
|
$
7,292
|
Accrued payroll
and related expenses
|
6,184
|
8,349
|
Accrued
taxes
|
477
|
1,145
|
Current
liabilities of discontinued operations
|
87
|
112
|
Other accrued
liabilities
|
10,091
|
9,393
|
Deferred
revenue
|
1,560
|
1,600
|
Warranty
reserve
|
1,577
|
1,281
|
Total
current liabilities
|
28,898
|
29,172
|
Non-current
liabilities:
|
|
|
Deferred
revenue
|
1,601
|
2,274
|
Warranty
reserve
|
2,616
|
1,927
|
Net deferred
tax liabilities
|
242
|
384
|
Notes payable,
less current portion
|
303
|
379
|
Other
non-current liabilities
|
1,170
|
932
|
Total
non-current liabilities
|
5,932
|
5,896
|
Total
liabilities
|
34,830
|
35,068
|
Shareholders'
equity:
|
|
|
Common
stock
|
133,262
|
127,016
|
Retained
earnings
|
125,910
|
109,303
|
Accumulated
other comprehensive loss
|
(11)
|
(7)
|
Total
shareholders' equity
|
259,161
|
236,312
|
Total
liabilities and shareholders' equity
|
$
293,991
|
$
271,380
|
The following table presents our revenues by source for the
three and nine months ended December 31,
2016 and 2015.
Revenues by
Geographic Region and Customer Group
|
(Unaudited and in
thousands)
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
December
31,
|
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
Revenues by
Geographic Region
|
|
|
|
|
North
America
|
$
41,538
|
$
41,109
|
$
135,328
|
$
128,596
|
International
|
11,234
|
11,767
|
33,692
|
33,345
|
Total
revenues
|
$
52,772
|
$
52,876
|
$
169,020
|
$
161,941
|
|
|
|
|
|
Revenues by
Customer Group
|
|
|
|
|
Medical
Market
|
$
8,652
|
$
11,002
|
$
27,130
|
$
28,317
|
Veterinary
Market
|
43,198
|
40,896
|
139,219
|
131,084
|
Other
|
922
|
978
|
2,671
|
2,540
|
Total
revenues
|
$
52,772
|
$
52,876
|
$
169,020
|
$
161,941
|
Reconciliation
from GAAP Revenues to Non-GAAP Constant Currency Revenues for
United Kingdom Subsidiary
|
(Unaudited and in
thousands)
|
|
|
|
United Kingdom
Subsidiary
|
GAAP Revenues for
Three Months Ended December 31, 2016
|
$2,405
|
Foreign exchange
impact on revenues (1)
|
$530
|
Non-GAAP Constant
Currency Revenues for Three Months Ended December 31,
2016
|
$2,935
|
GAAP Revenues for
Three Months Ended December 31, 2015
|
$2,414
|
Non-GAAP Constant
Currency Revenue Growth from Three Months Ended December 31, 2015
to Three Months Ended December 31, 2016
|
22%
|
|
(1) This measure
represents the change in revenue resulting from translating the
revenues for the quarter ended December 31, 2016 at the average
exchange rates in effect during the quarter ended December 31, 2015
rather than the actual exchange rates in effect for the quarter
ended December 31, 2016.
|
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SOURCE Abaxis, Inc.