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Abaxis Reports Financial Performance for the First Quarter of Fiscal 2015
Date:7/24/2014

UNION CITY, Calif., July 24, 2014 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the first fiscal quarter ended June 30, 2014.

First quarter overview:

  • Revenues of $47.5 million, up 10% over last year's comparable quarter.
  • Diluted EPS of $0.21, up 50% over last year's comparable quarter.
  • Revenues highlights:

  • Medical market revenues of $7.2 million, up 20% over last year's comparable quarter.
  • Veterinary market revenues of $39.4 million, up 8% over last year's comparable quarter.
  • North America revenues of $38.3 million, up 11% over last year's comparable quarter.
  • International revenues of $9.1 million, up 7% over last year's comparable quarter.
  • Total medical and veterinary reagent disc revenues of $26.9 million, up 18% over last year's comparable quarter.
  • Service revenues from Abaxis Veterinary Reference Laboratories (AVRL) of $3.4 million, up 55% over last year's comparable quarter.
  • Other financial highlights:

  • Income from operations of $7.4 million, up 60% over last year's comparable quarter.
  • Cash, cash equivalents and investments as of June 30, 2014 of $125.7 million, an increase of $4.5 million from March 31, 2014.
  • Cash dividend of $0.10 per share paid during the first quarter of fiscal 2015.
  • Dividend DeclaredAbaxis today announced that its Board of Directors declared a quarterly dividend of $0.10 per common share to be paid on September 17, 2014, to all shareholders of record as of the close of business on September 3, 2014. 

    Quarterly ResultsFor the fiscal quarter ended June 30, 2014, Abaxis reported revenues of $47.5 million, as compared with revenues of $43.2 million for the comparable period last year, an increase of 10 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i-STAT analyzers, decreased by $1.1 million, or 12 percent, 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 $3.7 million, or 12 percent, compared to the same period last year.  Abaxis reported net income of $4.7 million for the fiscal quarter ended June 30, 2014, compared to $3.2 million for the fiscal quarter ended June 30, 2013.  Abaxis' effective tax rate in the quarter ended June 30, 2014 was 37 percent, compared to 36 percent for the same period last year.  Abaxis reported diluted net income per share of $0.21 (calculated based on 22,637,000 shares) for the three-month period ended June 30, 2014, compared to $0.14 per share (calculated based on 22,571,000 shares) for the same period last year. 

    Other Reported InformationTotal sales in the medical market for the first quarter of fiscal 2015 were $7.2 million, an increase of 20 percent compared to the same period last year.  Total sales in the veterinary market for the first quarter of fiscal 2015 were $39.4 million, an increase of 8 percent, compared to the same period last year.  Total medical and veterinary reagent disc sales for the first quarter of fiscal 2015 were $26.9 million, an increase of 18 percent compared to the same period last year.  Total unit sales of medical and veterinary reagent discs for the first quarter of fiscal 2015 were 2.1 million units, an increase of 18 percent, compared to the same period last year.  Total medical and veterinary instrument sales for the first quarter of fiscal 2015 were $7.6 million, a decrease of 12 percent, compared to the same period last year.  Total unit sales of medical and veterinary instruments for the first quarter of fiscal 2015 were 1,077 units, a decrease of 12 percent, compared to the same period last year.  Non-cash compensation expense recognized for share-based awards during the first quarter of fiscal 2015 was $2.0 million, compared to $2.2 million for the same period last year.  Abaxis paid $2.2 million in cash dividends to shareholders during the first quarter of fiscal 2015. 

    Clint Severson, chairman, president and chief executive officer of Abaxis, said, "We are pleased with the strong financial results achieved in both the veterinary and medical markets during the first quarter of fiscal 2015.  As a result of our strategic initiatives to work more closely with our distribution partners, we were able to produce strong revenue growth for the first quarter, led by 20% growth in medical sales and a solid 8% growth in veterinary sales.  We had strong unit sales of chemistry analyzers, with sales of VetScan VS2s increasing 30% and Piccolo Xpress increasing 20% during the quarter over last year's comparable quarter.  Additionally, revenues from consumable sales, the core strength of our business, increased 12% in the first quarter and 14% sequentially; accounting for 72% of total revenues for the quarter.  With an expanded installed base of chemistry analyzers and increased customer utilization of diagnostic reagent discs, we sold 2.1 million units during the first quarter.  Our improved operating performance allowed gross margin to grow 188 basis points to 50% over last year's comparable quarter.  The measurable success during the first quarter gives us confidence we will achieve improved operating results and return to growth in fiscal 2015."

    "We enter fiscal 2015 focused on executing on organic growth, improving operating efficiencies, leveraging our distribution partnerships and capitalizing on opportunities with our recently announced supply and co-marketing agreement with VCA Inc.  We have the financial wherewithal to effectively grow our business going forward, with cash, cash equivalents and investments of $125.7 million at June 30, 2014.  Due to our strong cash flow profile and our positive outlook for the year, the Board of Directors has again approved a quarterly dividend in the amount of $0.10 per share of common stock, which we expect will be paid in September 2014.  We look forward to building momentum as we advance through fiscal 2015 and beyond," Mr. Severson concluded.

    Conference CallAbaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, July 24, 2014.  Participants can dial (877) 317-6789 or (412) 317-6789 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 10049800, through July 30, 2014.  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 AbaxisAbaxis 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.  For more information, visit http://www.abaxis.com.

    Use of Financial MeasuresTo 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 StatementsThis 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 risks related to the transition of its U.S. medical sales to Abbott, potential excess inventory levels and inventory imbalances at the company's distributors, 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, recent quarterly reports 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 EndedJune 30,2014

    2013Revenues

    $
    47,477

    $
    43,169
    Cost of revenues

    23,605

    22,277Gross profit

    23,872

    20,892Operating expenses:Research and development 

    3,947

    3,173Sales and marketing 

    9,578

    10,028General and administrative

    2,908

    3,055Total operating expenses

    16,433

    16,256Income from operations

    7,439

    4,636Interest and other income (expense), net

    47

    404Income before income tax provision

    7,486

    5,040Income tax provision

    2,771

    1,811Net income

    $
    4,715

    $
    3,229
    Net income per share:  Basic net income per share

    $
    .21

    $
    .15
      Diluted net income per share

    $
    .21

    $
    .14
    Shares used in the calculation of net income per share:  Weighted average common shares outstanding - basic

    22,408

    22,229  Weighted average common shares outstanding - diluted

    22,637

    22,571Cash dividends declared per share

    $
    .10

    $
    -
     ABAXIS, INC.Condensed Consolidated Balance Sheets(Unaudited and in thousands)June 30, March 31,2014

    2014Current assets: Cash and cash equivalents

    $
    87,103

    $
    73,589
     Short-term investments

    20,139

    29,102 Receivables, net

    33,252

    29,227 Inventories

    27,553

    26,978 Prepaid expenses and other current assets

    1,719

    2,452 Net deferred tax assets, current

    5,190

    4,464Total current assets 

    174,956

    165,812Long-term investments

    18,411

    18,491Investment in unconsolidated affiliate

    2,597

    2,646Property and equipment, net

    27,720

    27,176Intangible assets, net

    1,249

    1,624Net deferred tax assets, non-current

    1,549

    1,557Other assets

    129

    74Total assets

    $
    226,611

    $
    217,380
    Current liabilities: Accounts payable

    $
    7,050

    $
    ,111
     Accrued payroll and related expenses

    6,877

    4,654 Accrued taxes

    3,525

    1,144 Other accrued liabilities

    3,849

    3,095 Deferred revenue

    1,188

    1,208 Warranty reserve

    961

    1,047Total current liabilities

    23,450

    17,259Non-current liabilities: Deferred rent

    768

    768 Deferred revenue

    3,833

    4,035 Warranty reserve

    912

    821 Notes payable, less current portion

    556

    581Total non-current liabilities

    6,069

    6,205Total liabilities

    29,519

    23,464Shareholders' equity: Common stock

    125,306

    124,603 Retained earnings 

    71,787

    69,318 Accumulated other comprehensive loss

    (1)

    (5)Total shareholders' equity

    197,092

    193,916Total liabilities and shareholders' equity

    $
    226,611

    $
    217,380
    The following table presents our calculation of operating income per share for the three months ended June 30, 2014 and 2013.

     Operating Income Per Share(In thousands, except per share data)Three Months EndedJune 30,2014

    2013Income from operations

    $
    7,439

    $
    4,636
    Shares used in the calculation of operating income per share:  Weighted average common shares outstanding - basic

    22,408

    22,229  Weighted average common shares outstanding - diluted

    22,637

    22,571Operating income per share - basic

    $
    .33

    $
    .21
    Operating income per share - diluted

    $
    .33

    $
    .21
    The following table presents our revenues by source for the three months ended June 30, 2014 and 2013.

     Revenues by Geographic Region and Customer Group(In thousands)Three Months EndedJune 30,Revenues by Geographic Region2014

    2013North America

    $
    38,340

    $
    34,652
    International

    9,137

    8,517Total revenues

    $
    47,477

    $
    43,169
    Three Months EndedJune 30,Revenues by Customer Group2014

    2013Medical Market

    $
    7,245

    $
    ,038
    Veterinary Market

    39,367

    36,371Other

    865

    760Total revenues

    $
    47,477

    $
    43,169
     


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    SOURCE Abaxis, Inc.
    Copyright©2014 PR Newswire.
    All rights reserved


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