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Abaxis Reports Financial Performance for the Fourth Quarter and Fiscal 2009
Date:4/29/2009

UNION CITY, Calif., April 29 /PRNewswire-FirstCall/ -- ABAXIS, Inc. (Nasdaq: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the fiscal quarter and the fiscal year ended March 31, 2009.

Highlights for the fourth quarter and fiscal 2009 include:

  • Revenues of $26.3 million for the fourth quarter, down 1% over last year's comparable quarter, and $105.6 million for fiscal 2009, up 5% year-over-year.
  • Veterinary sales in North America of $16.5 million for the fourth quarter, up 13% over last year's comparable quarter, and $60.3 million for fiscal 2009, up 5% year-over-year.
  • Total sales in the veterinary market of $19.6 million for the fourth quarter, up 5% over last year's comparable quarter, and $74.0 million for fiscal 2009, up 4% year-over-year.
  • Total sales in North America of $22.2 million for the fourth quarter, up 1% over last year's comparable quarter, and $87.8 million for fiscal 2009, up 5% year-over-year.
  • Medical reagent disc sales of 412,000 units for the fourth quarter, up 11% over last year's comparable quarter, and 1.7 million units for fiscal 2009, up 32% year-over-year.
  • Medical and veterinary reagent disc sales of 1.4 million units for the fourth quarter, compared to 1.3 million units in the same period last year, up 1% over last year's comparable quarter, and 5.3 million units for fiscal 2009, up 7% year-over-year.
  • Medical and veterinary reagent disc sales of $17.0 million for the fourth quarter, compared to $15.7 million in the same period last year, up 8% over last year's comparable quarter, and $64.1 million for fiscal 2009, up 10% year-over-year.
  • Gross profit of 55.7% for the fourth quarter, up 120 basis points over last year's comparable quarter, and 55.5% for fiscal 2009, up 80 basis points year-over-year.
  • Improvement of 3% in average unit cost of medical and veterinary reagent discs from fiscal 2008 to fiscal 2009.
  • Diluted EPS of $0.12 for the fourth quarter versus $0.15 in the same period last year, and $0.54 for fiscal 2009, compared to $0.56 for fiscal 2008.
  • Cash, cash equivalents and short- and long-term investments as of March 31, 2009 of $74.9 million, compared to $59.7 million as of March 31, 2008.

Quarterly Results: For the fiscal quarter ended March 31, 2009, Abaxis reported revenues of $26.3 million, as compared with revenues of $26.7 million for the comparable period last year, a decrease of 1 percent. Revenue from instrument sales, which include chemistry analyzers, hematology instruments and coagulation analyzers, decreased by an aggregate of $2.2 million, or 28 percent, over the same period last year. Revenue from consumables, which include reagent discs, hematology reagent kits, coagulation reagents and heartworm rapid tests, increased by an aggregate of $2.0 million, or 12 percent, over the same period last year. The company reported net income of $2.6 million, compared to $3.3 million for the same period last year. The company's effective tax rate in the quarter ended March 31, 2009 was 40 percent, compared to 37 percent for the same period last year. The company reported diluted net income per share of $0.12 (calculated based on 22,302,000 shares) for the fourth quarter of fiscal 2009, compared to $0.15 per share (calculated based on 22,393,000 shares) for the same period last year.

Fiscal 2009 Results: For the year ended March 31, 2009, Abaxis reported revenues of $105.6 million, as compared with revenues of $100.6 million for the comparable period last year, an increase of 5 percent. Instrument revenue decreased $1.8 million, or 6 percent, over the same period last year. Consumable revenue increased by an aggregate of $7.1 million, or 12 percent, over the same period last year. The company reported net income of $12.0 million, compared to $12.5 million for the prior year. The company's effective tax rate in the 12-month periods of both fiscal 2009 and 2008 was 37 percent. The company reported diluted net income per share of $0.54 (calculated based on 22,324,000 shares) for fiscal 2009, compared to $0.56 per share (calculated based on 22,261,000 shares) for fiscal 2008.

Other Reported Information: Consumable revenue for the fourth quarter of fiscal 2009 was $18.7 million, up 12 percent over the $16.7 million reported in the same period last year. During the quarter, the company sold a total of 1.4 million units of medical and veterinary reagent discs, an increase of 1 percent compared to a total of 1.3 million units of medical and veterinary reagent discs sold during the same period last year. Total sales in the medical market for the fourth quarter of fiscal 2009 were $5.1 million, a decrease of 20 percent over last year's comparable quarter. Medical sales in North America, excluding sales to the U.S. government, during the fourth quarter of fiscal 2009 were $3.4 million, a decrease of 24 percent over last year's comparable quarter. Total sales in the veterinary market for the fourth quarter of fiscal 2009 were $19.6 million, up 5 percent over last year's comparable quarter. Veterinary reagent disc sales for the fourth quarter of fiscal 2009 were $13.2 million, an increase of 7 percent compared to the same period last year.

The company ended the quarter with $74.9 million in cash, cash equivalents and investments. As of March 31, 2009, the company had a total of $20.8 million in short-term investments and $4.9 million in long-term investments.

Clint Severson, chairman and chief executive officer of Abaxis, commented, "While the impact of the weak economy took its toll during the quarter, we are pleased with the overall results for the year and we look forward to fiscal 2010. Given current economic conditions we are pleased with the solid double-digit (12 percent) annual growth in the recurring revenue component of our business, maintaining solid gross margins and selling more than 5 million reagent discs during the fiscal year, a milestone for the company. We are also gratified with the initial market acceptance of our recently introduced VetScan Canine Heartworm Rapid Tests."

"With regards to the financial condition of the company, Abaxis is in a very strong position with cash and investments approaching $75 million and a balance sheet with no long-term debt. Our dedication over the years to operating this company on a conservative financial basis has served us well in the past and particularly so during the current global macro-economic downturn. We believe that as the economy works its way through the recession, Abaxis is well positioned to resume a strong growth trajectory."

"An important contributor to that growth trajectory will be the process improvements and product manufacturing quality that have been achieved in the past 18 months across our entire manufacturing platform under the watchful eye of Don Wood, our vice president of operations. Don has reshaped our manufacturing processes and has focused the energy and innovative spirit of our team to achieve significant efficiencies in the production of leading-edge point-of-care technology. The Board of Directors have elected to promote Don Wood to the position of Chief Operations Officer, effective April 22, 2009, and he will be an integral part of the executive management team of Abaxis. We appreciate all of Don's efforts to this point and we expect even greater contributions going forward," concluded Mr. Severson.

Conference Call

Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on April 29, 2009. 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 is available in the Investor Relations section of the company's website 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 93292011, through May 2, 2009. 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 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, 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.

Use of Non-GAAP Financial Measures

To supplement its financial statements presented in accordance with United States generally accepted accounting principles (GAAP), Abaxis uses operating income per share. This non-GAAP financial presentation is not a measurement of performance under GAAP in the United States of America. 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.

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, process improvements and product manufacturing quality and efficiencies in future production of our products. 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 the market acceptance of the company's products and 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 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 related to condition of the United States economy, risks involved in carrying of inventory and other risks detailed under "Risk Factors" in Abaxis' Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 and Abaxis' other periodic reports filed from time to time 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 on Following Pages

    ABAXIS, INC.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share data)
    (Unaudited)

                                     Three Months Ended  Twelve Months Ended
                                          March 31,           March 31,
                                       2009      2008      2009      2008

    Revenues                         $26,338   $26,738  $105,562  $100,551
    Cost of revenues                  11,663    12,176    46,937    45,507
    Gross profit                      14,675    14,562    58,625    55,044

    Operating expenses:
         Research and development      2,245     1,862     8,361     6,966
         Sales and marketing           6,330     6,023    24,712    23,689
         General and administrative    1,902     1,921     7,757     6,681
    Total operating expenses          10,477     9,806    40,830    37,336

    Income from operations             4,198     4,756    17,795    17,708
    Interest and other income
     (expense), net                      131       516     1,271     2,096
    Income before income taxes         4,329     5,272    19,066    19,804
    Income tax provision               1,745     1,960     7,053     7,301
    Net income                        $2,584    $3,312   $12,013   $12,503

    Net income per share:
      Basic net income per share       $0.12     $0.15     $0.55    $ 0.58
      Diluted net income per share     $0.12     $0.15     $0.54    $ 0.56

    Shares used in the calculation
     of net income per share:
       Weighted average common
        shares outstanding - basic    21,912    21,674    21,826    21,499
       Weighted average common
        shares outstanding - diluted  22,302    22,393    22,324    22,261



    ABAXIS, INC.
    Condensed Consolidated Balance Sheets
    (Unaudited and in thousands)

                                                March 31,         March 31,
                                                  2009              2008
    Current assets:
      Cash and cash equivalents                 $49,237           $17,219
      Short-term investments                     20,776             6,991
      Trade receivables, net                     21,983            20,873
      Inventories, net                           15,735            18,657
      Prepaid expenses                              957               427
      Net deferred tax asset - current            4,676             2,426
        Total current assets                    113,364            66,593
      Long-term investments                       4,886            35,463
      Property and equipment, net                14,798            14,599
      Intangible assets, net                      5,175               375
      Other assets                                   24                 5
      Net deferred tax asset - non-current        2,464             3,868
        Total assets                           $140,711          $120,903

    Current liabilities:
      Accounts payable                           $3,963            $6,421
      Accrued payroll and related expenses        3,698             4,277
      Other accrued liabilities                   1,150             1,369
      Deferred revenue                            1,024               807
      Warranty reserve                            1,714             1,219
        Total current liabilities                11,549            14,093

    Non-current liabilities:
      Deferred rent                                 137               286
      Deferred revenue                            1,550             1,146
      Warranty reserve                              583               729
        Total non-current liabilities             2,270             2,161

    Shareholders' equity:
      Common stock                              117,846           109,031
      Retained earnings (accumulated deficit)     9,046            (2,967)
      Accumulated other comprehensive loss            -            (1,415)
        Total shareholders' equity              126,892           104,649
        Total liabilities and shareholders'
         equity                                $140,711          $120,903



    Non-GAAP Operating Income Per Share
    (In thousands, except per share data)

                                      Three Months Ended   Twelve Months Ended
                                            March 31,           March 31,
                                         2009      2008      2009      2008
    Shares used in the calculation
    of operating income per share
     (non-GAAP):
       Weighted average common
        Shares outstanding - basic      21,912    21,674    21,826    21,499
       Weighted average common
        Shares outstanding - diluted    22,302    22,393    22,324    22,261

    Non-GAAP operating income per
     share - basic                       $0.19     $0.22     $0.82     $0.82
    Non-GAAP operating income per
     share - diluted                     $0.19     $0.21     $0.80     $0.80



    Revenues by Geographic Region
    (In thousands)

                                      Three Months Ended   Twelve Months Ended
                                            March 31,           March 31,
                                         2009      2008      2009      2008
    North America                      $22,241   $21,962   $87,801   $83,830
    International                        4,097     4,776    17,761    16,721
    Total revenues                     $26,338   $26,738  $105,562  $100,551



    Revenues by Customer Group
    (In thousands)

                                      Three Months Ended   Twelve Months Ended
                                            March 31,           March 31,
                                         2009      2008      2009      2008
    Medical Market                      $5,077    $6,309   $24,796   $22,764
    Veterinary Market                   19,581    18,593    74,046    71,091
    Other                                1,680     1,836     6,720     6,696
    Total revenues                     $26,338   $26,738  $105,562  $100,551


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SOURCE Abaxis, Inc.
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