Abaxis, Inc. Reports Financial Performance For The First Quarter Of Fiscal 2017 And Declares A Quarterly Cash Dividend

UNION CITY, Calif., July 21, 2016 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a global diagnostics company manufacturing point-of-care blood analysis instruments and consumables for the medical and veterinary markets worldwide, today reported financial results for the first fiscal quarter ended June 30, 2016.

First quarter overview:

• Record revenues of $57.7 million, up 9% over last year's comparable quarter.
• Diluted net income per share of $0.30, down 3% from last year's comparable quarter, resulting from an increase of 2 percentage points in operating expenses as a percentage of revenues, due to initiatives to increase investments in research and development and international sales and marketing.

Revenues highlights:

• Medical market revenues of $9.1 million, up 5% over last year's comparable quarter.
• Veterinary market revenues of $47.7 million, up 10% over last year's comparable quarter.
• Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro specialty cartridges, i-STAT cartridges and rapid tests, of $44.7 million, up 7% over last year's comparable quarter.
• Total medical and veterinary reagent disc revenues of $31.3 million, up 3% over last year's comparable quarter.
• Total medical and veterinary reagent disc sales of 2.5 million units, up 5% over last year's comparable quarter.
• Total medical and veterinary instrument revenues of $10.1 million, up 16% over last year's comparable quarter.
• Total medical and veterinary instrument sales of 1,533 units, up 16% over last year's comparable quarter.
• North America revenues of $46.8 million, up 11% over last year's comparable quarter.
• International revenues of $10.9 million, flat compared to $10.8 million for last year's comparable quarter.

Other financial highlights:

• Gross profit of $32.0 million, up 9% over last year's comparable quarter.
• Cash, cash equivalents and investments as of June 30, 2016 of $153.3 million.
• Abaxis paid dividends of $2.7 million, or $0.12 per share during the first quarter of fiscal 2017.

Management Discussion

Clint Severson, chairman and chief executive officer of Abaxis, commented, "We are off to a solid start in the first quarter of fiscal 2017 with record total revenues and 10% growth in veterinary sales.  Total revenues for the quarter increased by 9% over last year's first quarter, driven by 16% growth in instrument sales year over year, which sets the stage for future consumable revenue growth in the coming quarters and years.  Revenues from our consumables portfolio grew 7% year over year and continued to drive consistent financial results, and revenues from consumables amounted to 77% of total revenues in the first quarter of fiscal 2017.  We are particularly pleased to have gained additional traction in the medical market, with medical reagent disc sales generating a quarterly unit sales record with an increase of 15% during the first quarter of fiscal year 2017 over last year's first quarter.  We significantly increased our investment in research and development and international sales and marketing expenses during the quarter, as planned, which resulted in flat operating income in the quarter.  However, these investments are intended to drive long-term revenues and income growth for the company."

Mr. Severson concluded, "The financial condition of the company continued to be strong with cash, cash equivalents and short- and long-term investments of $153.3 million.  We continued to manage the company conservatively and fund operations, as well as our quarterly dividend, from internally generated cash flow.  We are excited with the opportunities ahead of us in the remaining three quarters of fiscal 2017 and beyond."

Dividend Declared

Abaxis today announced that its Board of Directors declared a quarterly cash dividend of $0.12 per common share, to be paid on September 15, 2016, to all shareholders of record as of the close of business on September 1, 2016.  

Share Repurchase Program

Abaxis' Board of Directors has approved a $30 million increase to its existing share repurchase program, to a total of $54 million.  As of June 30, 2016, Abaxis had $24.0 million of its common stock available for repurchase under its share repurchase program.

Results of Operations

Quarterly Results

For the fiscal quarter ended June 30, 2016, Abaxis reported revenues of $57.7 million, as compared with revenues of $53.1 million for the comparable period last year, an increase of 9%.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and iSTAT analyzers, increased by $1.4 million, or 16%, compared to the same period last year.  Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro specialty cartridges, iSTAT cartridges and rapid tests, increased by $2.9 million, or 7%, over the same period last year.  Abaxis reported net income of $6.9 million for the fiscal quarter ended June 30, 2016, compared to $7.0 million for the fiscal quarter ended June 30, 2015.  Abaxis' effective tax rate in the fiscal quarter ended June 30, 2016 was 36%, compared to 36% for the same period last year.  Abaxis reported diluted net income per share of $0.30 (calculated based on 22,685,000 shares) for the three-month period ended June 30, 2016, compared to $0.31 per share (calculated based on 22,879,000 shares) for the same period last year. 

Other Reported Information

Non-cash compensation expense recognized for share-based awards during each of the first quarter of fiscal 2017 and the first quarter of fiscal 2016 was $2.8 million.  Abaxis paid $2.7 million in cash dividends to shareholders during the first quarter of fiscal 2017. 

Conference Call

Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, July 21, 2016.  Participants can dial (844) 855-9498 or (412) 317-5496 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 10089674, through July 28, 2016.  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, Inc. is a worldwide developer, manufacturer and marketer of portable blood analysis systems that are used in a broad range of medical specialties in human or veterinary patient care to provide clinicians with rapid blood constituent measurements.  Our mission is to improve the efficiency of care delivery to and the quality of life of patients in the medical and veterinary markets.  We provide leading edge technology and tools that support best medical practices, enabling physicians and veterinarians to respond to the health needs of their clients at the point of care while operating economical and profitable practices.  For more information, visit http://www.abaxis.com.

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 the opportunities ahead of Abaxis in the remaining three quarters of fiscal year 2017 and beyond, Abaxis' ability to obtain future consumable revenue growth in the coming quarters and years driven by its growth in instrument sales, the ability of Abaxis to derive long-term revenue and income growth from its investments in research and development and international sales and marketing, Abaxis' beliefs regarding its ability to perform at a high level, generate significant cash flow, maintain the strong financial foundation of Abaxis and enable Abaxis to take advantage of opportunities, the continued success of Abaxis, payment of future cash dividends, financial resources and potential for future growth, market acceptance and penetration of product offerings, and future revenues, income and results of operations.  Abaxis claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. 

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