ABAXIS INC 
By UNION CITY, Calif., Jan. 31, 2013 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the third fiscal quarter ended December 31, 2012.
Record quarterly highlights include:
-- Revenues of $49.8 million, up 32% over last year's comparable quarter.
-- North America revenues of $41.8 million, up 31% over last year's
comparable quarter.
-- Medical market revenues of $9.0 million, up 10% over last year's
comparable quarter.
-- Veterinary market revenues of $39.9 million, up 40% over last year's
comparable quarter.
-- Total medical and veterinary instrument revenues of $14.0 million, up
54% over last year's comparable quarter.
-- Total medical and veterinary instrument sales of 1,818 units, up 52%
over last year's comparable quarter.
-- Total medical and veterinary reagent disc sales of $26.7 million, up 31%
over last year's comparable quarter.
-- Total medical and veterinary reagent disc sales of 2.1 million units, up
29% over last year's comparable quarter.
Other quarterly highlights include:
-- International revenues of $8.0 million, up 33% over last year's
comparable quarter.
-- Service revenues from Abaxis Veterinary Reference Laboratories (AVRL) of
$1.4 million, up 28% over the second quarter of fiscal 2013.
-- Diluted net income per share of $0.22, compared to $0.13 per share for
the same period last year.
Quarterly Results: For the fiscal quarter ended December 31, 2012, Abaxis reported revenues of $49.8 million, as compared with revenues of $37.9 million for the comparable period last year, an increase of 32 percent. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i-STAT analyzers, increased by an aggregate of $4.9 million or 54 percent, over 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 an aggregate of $6.0 million, or 22 percent, over the same period last year. Abaxis reported net income of $5.0 million for the fiscal quarter ended December 31, 2012, compared to $2.9 million for the same period last year, an increase of 75 percent. Abaxis' effective tax rate in the quarter ended December 31, 2012 was 38 percent, compared to 37 percent for the same period last year. Abaxis reported diluted net income per share of $0.22 (calculated based on 22,341,000 shares) for the three-month period ended December 31, 2012, compared to $0.13 per share (calculated based on 21,990,000 shares) for the same period last year.
Nine-Month Results: For the nine-month period ended December 31, 2012, Abaxis reported revenues of $136.1 million, as compared with revenues of $113.9 million for the comparable period last year, an increase of 19 percent. Revenues from instrument sales increased by an aggregate of $10.1 million, or 40 percent, over the same period last year. Revenues from consumables increased by an aggregate of $8.7 million, or 10 percent, over the same period last year. The company reported net income of $20.8 million, including gain from the company's litigation settlement in the second quarter of fiscal 2013, compared to $8.4 million for the same period last year. The company's effective tax rate in the nine-month period ended December 31, 2012, was 38 percent, compared to 37 percent for the same period last year. The company reported diluted net income per share of $0.93 (calculated based on 22,316,000 shares) for the nine-month period ended December 31, 2012, compared to $0.37 per share (calculated based on 22,579,000 shares) for the same period last year.
Other Reported Information: Total sales in the medical market for the third quarter of fiscal 2013 were $9.0 million, an increase of 10 percent, compared to the same period last year. Medical sales worldwide, excluding sales to the U.S. government, during the third quarter of fiscal 2013 were $8.6 million, an increase of 15 percent, compared to the same period last year. Total sales in the veterinary market for the third quarter of fiscal 2013 were $39.9 million, an increase of 40 percent, compared to the same period last year. Total medical and veterinary reagent disc sales for the third quarter of fiscal 2013 were $26.7 million, an increase of 31 percent compared to the same period last year. Non-cash compensation expense recognized for share-based awards during the third quarter of fiscal 2013 was $1.8 million, compared to $1.5 million for the same period last year.
On December 6, 2012, the company's Board of Directors declared a special cash dividend of $1.00 per share on the company's outstanding common stock. The dividend payment totaling approximately $22.0 million was made on December 28, 2012.
Clint Severson, chairman and chief executive officer of Abaxis, said, "The financial results of the third quarter of fiscal 2013 were very strong. We are steadily executing on our strategic plan to drive sales and net income, as total revenues increased 32% and net income increased 75%, compared to last year's third quarter. Overall we achieved record quarterly reagent disc sales and instrument sales increased at solid double digit rates compared to third quarter of fiscal 2012. We are particularly pleased and encouraged with the development of our working relationships with our two new distributors, Abbott Point of Care, Inc. and MWI Veterinary Supply, Inc. These new distribution channels give us entry into markets to which we previously had very little access and expand the universe into which we can embed Abaxis technology. While we are still in the early stages of working together, we are developing the necessary chemistry between our respective organizations that will ensure long-term success."
"We are also pleased with the progress achieved in the international markets during the quarter," continued Mr. Severson. "Sales in both Europe and Asia continued to improve and grew at a 33% rate compared to last year's third quarter. Although macroeconomic conditions throughout the world continue to be challenging, our dedication to building these markets during these most difficult times is beginning to bear real fruit. All in all, we had a very solid quarter and we look to finish the year on a strong note in both our veterinary and medical markets."
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, January 31, 2013. Participants can dial (877) 317-6789 or (412) 317-6789 to access the conference call, or can listen via a live Internet web cast, 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 10024107, through February 7, 2013. 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 develop, 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.
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 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, its most recent Quarterly Report 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 Nine Months Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Revenues $49,802 $37,850 $136,074 $113,878
Cost of revenues 23,726 17,372 64,026 52,156
Gross profit 26,076 20,478 72,048 61,722
------ ------ ------ ------
Operating expenses:
Research and
development 3,802 2,634 10,348 9,096
Sales and marketing 12,373 9,927 35,647 28,414
General and
administrative 2,210 3,280 10,153 11,194
Gain from legal
settlement - - (17,250) -
Total operating
expenses 18,385 15,841 38,898 48,704
------ ------ ------ ------
Income from
operations 7,691 4,637 33,150 13,018
Interest and other
income (expense),
net 293 (91) 318 259
--- --- --- ---
Income before
income tax
provision 7,984 4,546 33,468 13,277
Income tax
provision 2,996 1,696 12,707 4,892
----- ----- ------ -----
Net income $4,988 $2,850 $20,761 $8,385
====== ====== ======= ======
Net income per
share:
Basic net income
per share $0.23 $0.13 $0.95 $0.38
===== ===== ===== =====
Diluted net income
per share $0.22 $0.13 $0.93 $0.37
===== ===== ===== =====
Shares used in the
calculation of net
income per share:
Weighted average
common shares
outstanding -
basic 21,968 21,672 21,902 22,213
====== ====== ====== ======
Weighted average
common shares
outstanding -
diluted 22,341 21,990 22,316 22,579
====== ====== ====== ======
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
December 31, March 31,
2012 2012
---- ----
Current assets:
Cash and cash equivalents $47,427 $45,843
Short-term investments 22,644 21,689
Receivables, net 36,094 30,694
Inventories 25,069 19,597
Prepaid expenses and other
current assets 7,067 5,423
Net deferred tax assets,
current 4,356 4,151
Total current assets 142,657 127,397
Long-term investments 21,712 23,442
Investment in
unconsolidated affiliate 2,613 2,626
Property and equipment, net 25,512 24,296
Intangible assets, net 3,515 3,990
Other assets 97 85
Total assets $196,106 $181,836
======== ========
Current liabilities:
Accounts payable $11,536 $6,381
Accrued payroll and related
expenses 8,380 6,336
Accrued taxes 229 266
Other accrued liabilities 2,314 1,991
Deferred revenue 1,388 1,212
Warranty reserve 993 1,245
Total current liabilities 24,840 17,431
------ ------
Non-current liabilities:
Deferred rent 712 641
Net deferred tax
liabilities 159 199
Deferred revenue 3,517 2,396
Warranty reserve 473 601
Notes payable, less current
portion 707 783
Total non-current
liabilities 5,568 4,620
----- -----
Total liabilities 30,408 22,051
Shareholders' equity:
Common stock 117,217 110,063
Retained earnings 48,435 49,697
Accumulated other
comprehensive income 46 25
Total shareholders' equity 165,698 159,785
------- -------
Total liabilities and
shareholders' equity $196,106 $181,836
======== ========
Operating Income Per Share
(In thousands, except per share data)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Shares used in the calculation of operating income per share:
Weighted average common shares outstanding - basic 21,968 21,672 21,902 22,213
Weighted average common shares outstanding - diluted 22,341 21,990 22,316 22,579
Operating income per share - basic $0.35 $0.21 $1.51 $0.59
===== ===== ===== =====
Operating income per share - diluted $0.34 $0.21 $1.49 $0.58
===== ===== ===== =====
Revenues by Geographic Region
(In thousands)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
North America $41,797 $31,847 $110,876 $93,540
International 8,005 6,003 25,198 20,338
Total revenues $49,802 $37,850 $136,074 $113,878
======= ======= ======== ========
Revenues by Customer Group
(In thousands)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Medical Market $8,977 $8,147 $25,267 $22,636
Veterinary Market 39,865 28,467 107,299 87,684
Other 960 1,236 3,508 3,558
Total revenues $49,802 $37,850 $136,074 $113,878
======= ======= ======== ========
SOURCE Abaxis, Inc.
