April 25, 2013 at 16:00 PM EDT
Abaxis Reports Financial Performance For The Fourth Quarter And Fiscal 2013

UNION CITY, Calif., April 25, 2013 /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, 2013.

Record fourth quarter and fiscal 2013 results include:

  • Revenues of $50.0 million for the fourth quarter, up 17% over last year's comparable quarter, and $186.0 million for fiscal 2013, up 19% year-over-year.
  • North America revenues of $41.9 million for the fourth quarter, up 18% over last year's comparable quarter, and $152.8 million for fiscal 2013, up 18% year-over-year.
  • Veterinary market revenues of $42.9 million for the fourth quarter, up 25% over last year's comparable quarter, and $150.5 million for fiscal 2013, up 23% year-over-year.
  • Total medical and veterinary reagent disc sales of $27.0 million for the fourth quarter, up 14% over last year's comparable quarter, and $99.3 million for fiscal 2013, up 13% year-over-year.

Other fourth quarter and fiscal 2013 highlights include:

  • International revenues of $8.1 million for the fourth quarter, up 10% over last year's comparable quarter, and $33.3 million for fiscal 2013, up 20% year-over-year.
  • Total medical and veterinary instrument revenues of $10.6 million for the fourth quarter, up 8% over last year's comparable quarter, and $46.0 million for fiscal 2013, up 31% year-over-year.
  • Total medical and veterinary instrument sales of 1,485 units for the fourth quarter, up 13% over last year's comparable quarter, and 6,173 units for fiscal 2013, up 30% year-over-year.
  • Total medical and veterinary reagent disc sales of 2.0 million units for the fourth quarter, up 11% over last year's comparable quarter, and 7.5 million units for fiscal 2013, up 11% year-over-year.
  • Diluted net income per share of $0.30 for the fourth quarter, up 43% over last year's comparable quarter.
  • Service revenues from Abaxis Veterinary Reference Laboratories (AVRL) of $1.8 million for the fourth quarter, up 31% over the third quarter of fiscal 2013.

Quarterly Results:  For the fiscal quarter ended March 31, 2013, Abaxis reported revenues of $50.0 million, as compared with revenues of $42.7 million for the comparable period last year, an increase of 17 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i-STAT analyzers, increased by an aggregate of $0.8 million or 8 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 $5.0 million, or 16 percent, over the same period last year.  Abaxis reported net income of $6.7 million for the fiscal quarter ended March 31, 2013, compared to $4.7 million for the same period last year, an increase of 42 percent.  Abaxis' effective tax rate in the quarter ended March 31, 2013 was 25 percent, compared to 32 percent for the same period last year.  Abaxis reported diluted net income per share of $0.30 (calculated based on 22,486,000 shares) for the three-month period ended March 31, 2013, compared to $0.21 per share (calculated based on 22,070,000 shares) for the same period last year. 

Fiscal 2013 Results:  For the fiscal year ended March 31, 2013, Abaxis reported revenues of $186.0 million, as compared with revenues of $156.6 million for the prior year, an increase of 19 percent.  Revenues from instruments increased by an aggregate of $10.9 million, or 31 percent, over the prior year.  Revenues from consumables increased by an aggregate of $13.7 million, or 12 percent, over the prior year.  The company reported net income of $27.5 million, including gain from the company's litigation settlement in the second quarter of fiscal 2013, compared to $13.1 million for the prior year.  The company's effective tax rate in fiscal 2013 and 2012 was 35 percent.  The company reported diluted net income per share of $1.23 (calculated based on 22,381,000 shares) for fiscal 2013, compared to $0.58 per share (calculated based on 22,462,000 shares) for fiscal 2012. 

Other Reported Information:  Total sales in the medical market for the fourth quarter of fiscal 2013 were $6.3 million, a decrease of 18 percent compared to the same period last year.  Medical sales worldwide, excluding sales to the U.S. government, during the fourth quarter of fiscal 2013 were $5.7 million, a decrease of 20 percent compared to the same period last year.  Total sales in the veterinary market for the fourth quarter of fiscal 2013 were $42.9 million, an increase of 25 percent, compared to the same period last year.  Total medical and veterinary reagent disc sales for the fourth quarter of fiscal 2013 were $27.0 million, an increase of 14 percent compared to the same period last year.  Non-cash compensation expense recognized for share-based awards during the fourth quarter of fiscal 2013 was $1.8 million, compared to $1.5 million for the same period last year.

Clint Severson, chairman and chief executive officer of Abaxis, said, "We are pleased with the operating results achieved in the fourth quarter and fiscal year 2013.  Instrument sales across the board, including both the veterinary and the medical markets, were up 31 percent for the year.  Reagent disc unit sales for the year were up 11 percent to a record 7.5 million units.  Additionally, we are gratified that the ten-year compounded annual growth rate in our total reagent disc unit sales is greater than 15 percent.  Sales in North America and internationally were up 18 percent and 20 percent, respectively.  One of the key strengths of the company is our higher margin consumable sales, which increased 16 percent in the fourth quarter and represented 72 percent of total fourth quarter revenue.  We remain firmly focused on maximizing this core component of our business which constitutes our recurring revenue stream."

"Fiscal year 2013 marks the 12th consecutive year of profitability for Abaxis.  Given the challenging global macroeconomic conditions of the past five years, we are extremely proud of our ability to operate effectively and profitably in uncertain times," continued Mr. Severson.  "The financial underpinnings of the company are very strong.  We maintain a solid cash position, which provides us a level of stability during these difficult times.  During fiscal year 2013, we paid a special one-time dividend to our loyal shareholders.  Looking ahead, we are excited about our strategic initiatives and the opportunities with our new distributors, Abbott Point of Care, Inc. for medical products and MWI Veterinary Supply, Inc. for animal health products.  Our expectation is that as the medical market distribution channel becomes more developed in the coming quarters, medical market products will also become consistent double-digit growers.  We are excited with the possibilities ahead."

Conference Call

Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, April 25, 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 10027780, through May 1, 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 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.

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 transitioning our medical sales to Abbott, 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

Twelve Months Ended


March 31,

March 31,


2013

2012

2013

2012

Revenues

$        49,951

$            42,718

$          186,025

$          156,596

Cost of revenues

23,768

19,337

87,794

71,493

Gross profit

26,183

23,381

98,231

85,103

Operating expenses:





   Research and development 

3,229

3,150

13,577

12,246

   Sales and marketing 

11,296

11,204

46,943

39,618

   General and administrative

2,672

2,588

12,825

13,782

   Gain from legal settlement

-

-

(17,250)

-

Total operating expenses

17,197

16,942

56,095

65,646

Income from operations

8,986

6,439

42,136

19,457

Interest and other income (expense), net

(65)

451

253

710

Income before income tax provision

8,921

6,890

42,389

20,167

Income tax provision

2,223

2,184

14,930

7,076

Net income

$          6,698

$              4,706

$            27,459

$            13,091

Net income per share:





  Basic net income per share

$            0.30

$                0.22

$                1.25

$                0.59

  Diluted net income per share

$            0.30

$                0.21

$                1.23

$                0.58






Shares used in the calculation of net income per share:





  Weighted average common shares outstanding - basic

22,081

21,693

21,946

22,084

  Weighted average common shares outstanding - diluted

22,486

22,070

22,381

22,462

 

ABAXIS, INC.

Condensed Consolidated Balance Sheets

(Unaudited and in thousands)



March 31,

March 31,


2013

2012

Current assets:



 Cash and cash equivalents

$             54,910

$       45,843

 Short-term investments

23,354

21,689

 Receivables, net

40,005

30,694

 Inventories

26,786

19,597

 Prepaid expenses and other current assets

3,319

5,423

 Net deferred tax assets, current

4,589

4,151

   Total current assets 

152,963

127,397

Long-term investments

17,000

23,442

Investment in unconsolidated affiliate

2,613

2,626

Property and equipment, net

25,330

24,296

Intangible assets, net

3,122

3,990

Net deferred tax assets, non-current

643

-

Other assets

92

85

   Total assets

$           201,763

$     181,836




Current liabilities:



 Accounts payable

$               8,123

$         6,381

 Accrued payroll and related expenses

6,261

6,336

 Accrued taxes

440

266

 Other accrued liabilities

2,838

1,991

 Deferred revenue

1,362

1,212

 Warranty reserve

995

1,245

   Total current liabilities

20,019

17,431

Non-current liabilities:



 Deferred rent

729

641

 Net deferred tax liabilities

-

199

 Deferred revenue

3,750

2,396

 Warranty reserve

389

601

 Notes payable, less current portion

682

783

   Total non-current liabilities

5,550

4,620

   Total liabilities

25,569

22,051

Shareholders' equity:



 Common stock

121,019

110,063

 Retained earnings 

55,133

49,697

 Accumulated other comprehensive income

42

25

   Total shareholders' equity

176,194

159,785

   Total liabilities and shareholders' equity

$           201,763

$     181,836

 

Operating Income Per Share

(In thousands, except per share data)


Three Months Ended

Twelve Months Ended


March 31,

March 31,


2013

2012

2013

2012

Shares used in the calculation of operating income per share:





  Weighted average common shares outstanding - basic

22,081

21,693

21,946

22,084

  Weighted average common shares outstanding - diluted

22,486

22,070

22,381

22,462






Operating income per share - basic

$            0.41

$          0.30

$            1.92

$            0.88

Operating income per share - diluted

$            0.40

$          0.29

$            1.88

$            0.87











Revenues by Geographic Region





(In thousands)






Three Months Ended

Twelve Months Ended


March 31,

March 31,


2013

2012

2013

2012

North America

$        41,898

$      35,429

$      152,774

$      128,969

International

8,053

7,289

33,251

27,627

Total revenues

$        49,951

$      42,718

$      186,025

$      156,596











Revenues by Customer Group





(In thousands)






Three Months Ended

Twelve Months Ended


March 31,

March 31,


2013

2012

2013

2012

Medical Market

$          6,277

$        7,682

$        31,643

$        30,404

Veterinary Market

42,916

34,256

150,510

122,253

Other

758

780

3,872

3,939

Total revenues

$        49,951

$      42,718

$      186,025

$      156,596

 

 

SOURCE Abaxis, Inc.

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