ABAX Abaxis, Inc. (delisted)

ABAXIS Reports Financial Results With Record Sales for the Second Quarter of Fiscal 2005 Record Quarterly Reagent Disc Sales of 706,000 Units as Total Quarterly Revenues up 18% From Prior Year Period UNION CITY, Calif., Oct. 18 /PRNewswire-FirstCall/ -- ABAXIS, Inc. (NASDAQ:ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported record financial results for the second fiscal quarter ended September 30, 2004. Highlights for the second quarter of fiscal 2005 include: -- Quarterly revenues of $13.6 million, an 18% increase over the same period last year. -- Quarterly diluted EPS: $0.06 versus $0.05 in the same period last year. -- Quarterly U.S. sales of $11.7 million, a 19% increase over the same period last year. -- Quarterly international sales of $1.9 million, a 13% increase, compared to the same period last year. -- Quarterly medical sales: up 23%, compared to the same period last year, to $2.0 million, representing 15% of total revenues. -- Quarterly recurring reagent disc and hematology reagent revenue of $8.8 million, a 31% increase over the same period last year. -- Quarterly total reagent disc sales of 706,000 units, a 29% increase over the same period last year. -- Quarterly medical reagent disc sales of 110,000 units, an increase of 67,000 units or 158% over the same period last year. -- Quarterly veterinary reagent disc sales of 596,000 units, an 18% increase over the same period last year. Quarterly Results: For the second fiscal quarter, ABAXIS reported record revenues of $13.6 million, compared with revenues of $11.5 million for the comparable period last year, an increase of 18 percent. Recurring reagent disc and hematology reagent revenue increased by $2.1 million or 31 percent over the same period last year. The Company reported net income attributable to common shareholders of $1.3 million, compared to $879,000 for the same period last year; an increase of 53 percent. Net income for the quarter benefited from the conversion, in October 2003, of Series D and E Preferred Stock into common shares; thereby eliminating the Company's obligation to distribute preferred dividends in the quarter ended September 30, 2004. The Company's effective tax rate in the quarter ended September 30, 2004 was 40% compared to 3% in the same period last year, reflecting the elimination of the valuation allowance on deferred tax assets in fiscal 2004. The Company reported diluted net income per share of $0.06 (calculated based on 21,663,000 shares), compared to $0.05 per share (calculated based on 18,933,000 shares) for the same period last year. Six Months Results: For the six-month period ended September 30, 2004, ABAXIS reported total revenues of $26.9 million, compared with revenues of $21.8 million for the comparable period last year, an increase of 23 percent. During the six-month period, the Company sold 1.4 million units of reagent discs, up 30 percent compared to the same period last year. Net income attributable to common shareholders for the first six months of fiscal 2005 was $2.8 million, as compared to $1.5 million for the same period last year; an increase of 80 percent. The Company reported diluted net income per share of $0.13 (calculated based on 21,796,000 shares), compared to $0.08 per share (calculated based on 18,170,000 shares) for the same period last year. Other Reported Information: Recurring reagent disc and hematology reagent revenue for the second fiscal quarter was $8.8 million, up 31 percent over the $6.7 million reported in the same period last year. During the quarter, the Company sold 706,000 medical and veterinary reagent discs, an increase of 29 percent compared to 549,000 medical and veterinary reagent discs sold during the same period last year. The Company sold 3,873 veterinary hematology reagent kits during the quarter, up 42 percent compared to 2,729 hematology reagent kits sold for the same period last year. The Company ended the quarter with $20.0 million in cash, cash equivalents and short-term investments and no long-term debt. "We are pleased to report positive operating results for the 14th consecutive quarter, particularly in light of the fact that the second quarter of our fiscal year is historically our weakest," said Clint Severson, chairman and CEO of ABAXIS, Inc. Reagent disc sales in all of our segments continued to grow at strong double-digit rates. We are particularly pleased with the results of the quarter as we addressed the typical issues associated with the introduction of a new product; in this case our new VetScan HMII hematology analysis system. Additionally, our senior sales management team is commencing a new marketing initiative and study to help us better understand the needs of the medical market and how we might be even more responsive with leading-edge blood analysis solutions. There are great opportunities ahead and we look forward to capitalizing on those opportunities." Conference Call ABAXIS has scheduled a conference call to discuss its financial results at 4:15 p.m. ET Monday, October 18, 2004. 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 can be found 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 1430756, through October 21, 2004. This press release is also available prior to and after the call via ABAXIS' website or the Securities 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, 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. 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"). 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," or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this press release 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 ("FDA") 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 Six Months Ended September 30 September 30 2004 2003 2004 2003 Net revenues $13,635 $11,523 $26,877 $21,849 Costs and operating expenses: Cost of revenues 6,268 5,641 12,342 10,861 Selling, general and administrative 3,955 3,567 7,596 6,784 Research and development 1,231 1,218 2,468 2,250 Total costs and operating expenses 11,454 10,426 22,406 19,895 Income from operations 2,181 1,097 4,471 1,954 Interest and other income 70 37 130 85 Interest and other expense (19) (30) (25) (48) Net income before income taxes 2,232 1,104 4,576 1,991 Income tax provision 891 38 1,801 62 Net Income $1,341 $1,066 $2,775 $1,929 Basic net income per share (a) $0.07 $0.05 $0.14 $0.09 Diluted net income per share (a) $0.06 $0.05 $0.13 $0.08 Weighted average common shares outstanding - basic 19,646 17,149 19,611 17,036 Weighted average common shares outstanding - diluted 21,663 18,933 21,796 18,170 (a) Net income attributable to common shareholders used in the computation of diluted net income per share for the three and six months ended September 30, 2004 was $1,341,000 and $2,775,000 respectively. Net income attributable to common shareholders used in the computation of diluted net income per share for the three months ended September 30, 2003 was $879,000, which includes dividends of $187,000. Net income attributable to common shareholders used in the computation of diluted net income per share for the six months ended September 30, 2003 was $1,538,000, which includes dividends of $391,000. ABAXIS, Inc. Balance Sheet Data: (Unaudited and in thousands) September 30, March 31, 2004 2004 Current assets: Cash and cash equivalents $11,989 $9,324 Short-term investments 7,998 7,998 Trade receivables (net) 9,924 8,202 Inventories 6,873 5,736 Prepaid expenses 210 384 Net deferred tax asset - current 840 609 Total current assets 37,834 32,253 Property and equipment, net 8,650 8,191 Intangible assets, net 638 675 Deposits and other assets 120 155 Net deferred tax asset - non-current 19,198 20,624 Total assets $66,440 $61,898 Current liabilities: Accounts payable $3,174 $2,721 Dividends payable -- 28 Accrued payroll and related expenses 2,329 2,853 Other accrued liabilities 773 319 Warranty reserve 189 181 Deferred revenue 298 264 Current portion of capital lease obligations 22 22 Total current liabilities 6,785 6,388 Non-current liabilities: Capital lease obligations, less current portion 6 16 Deferred rent 440 409 Deferred revenue, less current portion 603 474 Commission obligation, less current portion 33 39 Total non-current liabilities 1,082 938 Shareholders' equity: Common stock 93,667 92,441 Accumulated deficit (35,094) (37,869) Total shareholders' equity 58,573 54,572 Total liabilities and shareholders' equity $66,440 $61,898 Reconciliation of Net Income to Net Income Attributable to Common Shareholders (in thousands) Three Months Ended Six Months Ended September 30 September 30 2004 2003 2004 2003 Net income $1,341 $1,066 $2,775 $1,929 Preferred dividends -- (187) -- (391) Net income attributable to common shareholders $1,341 $879 $2,775 $1,538 Customer and Geographic Information (in thousands) Three Months Ended Six Months Ended September 30 September 30 2004 2003 2004 2003 United States $11,731 $9,844 $23,243 $18,932 International 1,904 1,679 3,634 2,917 Total revenues $13,635 $11,523 $26,877 $21,849 Customer and Market Information (in thousands) Three Months Ended Six Months Ended September 30 September 30 2004 2003 2004 2003 Medical Market $1,985 $1,618 $4,225 $3,225 Veterinary Market 11,233 9,374 21,743 17,620 Other 417 531 909 1,004 Total revenues $13,635 $11,523 $26,877 $21,849 DATASOURCE: ABAXIS, Inc. CONTACT: Clint Severson, Chief Executive Officer of ABAXIS, Inc., +1-510-675-6500; or Retail, Joe Dorame, or Institutional/Analysts, Joe Diaz, both of RCG Capital Markets Group, +1-480-675-0400, for ABAXIS, Inc. Web site: http://www.abaxis.com/

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