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BASi (BASI) Reports Fiscal 2012 Second Quarter Results


5/11/2012 9:31:28 AM

WEST LAFAYETTE, IN--(Marketwire - May 11, 2012) - Bioanalytical Systems, Inc. (NASDAQ: BASI) (BASi) today announced financial results for the second quarter and first half of fiscal 2012.

"BASi's second quarter results are not indicative of the performance we expect from the company. We are taking a variety of actions on the revenue and cost sides of our business that are designed to position the company for future success, and we are confident that our operating results will improve as a result," said President and CEO Tony Chilton.

"We are committed to our strategy to build on BASi's more than three decades of contract research experience to expand our business with the growing population of small biotech and pharmaceutical companies that have become a major force in new drug discovery, while continuing to develop our historically close relationships with major pharmaceutical clients. Pharmacological services and instrument sales were up in April and early May compared to their run rates at the end of the second quarter, and our marketing initiatives in support of our clients' drug discovery efforts, including the recently launched Discovery Center located in our headquarters facility in West Lafayette, appear to be gaining traction. Demand for toxicology services appears to have bottomed, as we are seeing an increase in requests for quotes for these services, an encouraging and long overdue sign of nascent recovery from the recession that has affected the CRO industry so severely these past few years," Chilton said.

Jacqueline Lemke, who was named Vice President of Finance & CFO in April, said, "We are moving forward as rapidly as possible on the restructuring of our bioanalytical laboratory operations announced in March. The decommissioning of our laboratory in McMinnville, Oregon will be completed this month, and the operations consolidated into our West Lafayette facility. We expect to book a $450,000 charge associated with these actions in the current quarter. We also are evaluating several options to improve the financial performance of our laboratory in Warwickshire, UK, and expect to announce a final decision and an estimate of associated costs, if any, in the next few weeks. We continue to expect this laboratory restructuring program to reduce operating costs by more than $2 million annually.

"Separately, over the next three or four months we are planning to take a variety of steps to reduce operating costs at our West Lafayette and Evansville facilities. We believe we will realize savings of approximately $2.5 million annually from this effort, on top of the savings we anticipate from the laboratory restructuring.

"All told, within the next few months we expect to reduce operating costs by at least $4.5 million annually, bringing costs into proper alignment with the current pace of our business while enhancing productivity and customer service through improved capacity utilization and more efficient workflow. Together with the improved outlook for revenue Tony mentioned, we expect these cost reductions to position BASi to deliver the growth and consistent profitability we are confident the company is capable of delivering."

Financial Results

For the three months ended March 31, 2012, revenue decreased 17.3% to $6,966,000 compared to $8,423,000 for the second quarter of fiscal 2011. The net loss for the second quarter of fiscal 2012 was $1,884,000, or $0.27 per share, which included pre-tax restructuring charges of $64,000. This compares to net income of $483,000, or $0.10 per share, for the second quarter of fiscal 2011.

For the six months ended March 31, 2012, revenue decreased 12.3% to $14,482,000 from $16,513,000 for the first six months of fiscal 2011. The net loss for the first six months of fiscal 2012 was $3,375,000, or $0.48 per share, which included pre-tax restructuring charges of $64,000. This compares to net income for the first six months of fiscal 2011 of $793,000, or $0.16 per diluted share.

Cash used in operations was $361,000 for this year's first six months compared to cash provided by operations of $1,785,000 for the first six months of fiscal 2011.

At March 31, 2012, BASi reported cash and cash equivalents of $853,000, total long-term obligations of $1,051,000, and shareholders' equity of $12,395,000, or $1.74 per outstanding share. Current liabilities at March 31, 2012 included mortgage debt of $6,170,000 that matures in November 2012. The Company intends to refinance this amount in lieu of making balloon payments for the remaining principal balances. At September 30, 2011, cash and cash equivalents were $2,963,000, working capital was $526,000, total long-term obligations were $6,913,000, and shareholders' equity was $15,586,000, or $2.25 per outstanding share.

Earnings Conference Call

BASi has scheduled a conference call at 11:00 a.m. EDT this morning to discuss its results for the quarter. To participate in the call, dial 866.825.3209, passcode #35250387 five minutes before the start of the call. A simultaneous webcast may be accessed from the Investors tab at www.BASInc.com. The webcast will be available for replay after 2:00 p.m. EDT at this same Internet address. For a telephone replay, dial 888.286.8010, passcode #71559788 after 2:00 p.m. EDT.

About Bioanalytical Systems, Inc.

BASi is a pharmaceutical development company providing contract research services and monitoring instruments to the world's leading drug development companies and medical research organizations. The company focuses on developing innovative services and products that increase efficiency and reduce the cost of taking a new drug to market. Visit www.BASinc.com for more about BASi.

This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, risks and uncertainties related to changes in the market and demand for our products and services, the development, marketing and sales of products and services, changes in technology, industry standards and regulatory standards, and various market and operating risks detailed in the company's filings with the Securities and Exchange Commission.

[SEE BELOW FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS]

                                                                            
                                                                            
                        BIOANALYTICAL SYSTEMS, INC.                         
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  
                                   (LOSS)                                   
            (In thousands, except per share amounts) (Unaudited)            
                                                                            
                                  Three Months Ended     Six Months Ended   
                                       March 31,             March 31,      
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Service revenue                  $   5,279  $   6,446  $  10,890  $  12,589 
Product revenue                      1,687      1,977      3,592      3,924 
                                 ---------  ---------  ---------  --------- 
    Total revenue                    6,966      8,423     14,482     16,513 
                                                                            
Cost of service revenue              5,066      4,833     10,322      9,501 
Cost of product revenue                757        793      1,535      1,499 
                                 ---------  ---------  ---------  --------- 
    Total cost of revenue            5,823      5,626     11,857     11,000 
                                                                            
Gross profit                         1,143      2,797      2,625      5,513 
                                                                            
Operating expenses:                                                         
  Selling                              996        774      1,994      1,459 
  Research and development             162        111        340        223 
  General and administrative         1,626      1,262      3,234      2,643 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses         2,784      2,147      5,568      4,325 
                                                                            
Restructuring charges                   64         --         64         -- 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating income (loss)             (1,705)       650     (3,007)     1,188 
                                                                            
  Interest expense                    (179)      (168)      (368)      (403)
  Other income                          --          1         --          8 
                                 ---------  ---------  ---------  --------- 
Income (loss) before income                                                 
 taxes                              (1,884)       483     (3,375)       793 
                                                                            
Income taxes                            --         --         --         -- 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income (loss)                $  (1,884) $     483  $  (3,375) $     793 
                                                                            
Other comprehensive income                                                  
 (loss):                                                                    
  Foreign currency translation                                              
   adjustment                           23         29         22         13 
                                 ---------  ---------  ---------  --------- 
                                                                            
Comprehensive income (loss)      $  (1,861) $     512  $  (3,353) $     806 
                                 =========  =========  =========  ========= 
                                                                            
Basic net income (loss) per                                                 
 share                           $   (0.27) $    0.10  $   (0.48) $    0.16 
Diluted net income (loss) per                                               
 share                           $   (0.27) $    0.10  $   (0.48) $    0.16 
                                                                            
Weighted common shares                                                      
 outstanding:                                                               
  Basic                              7,034      4,915      6,989      4,915 
  Diluted                            7,034      5,080      6,989      5,025 
                                                                            
                                                                            
                                                                            
                                                                            
                        BIOANALYTICAL SYSTEMS, INC.                         
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                    (In thousands, except share amounts)                    
                                                                            
                                                     Mar. 31,     Sep. 30,  
                                                       2012         2011    
                                                   -----------  ----------- 
                                                   (Unaudited)              
                      Assets                                                
Current assets:                                                             
Cash and cash equivalents                          $       853  $     2,963 
  Accounts receivable                                                       
  Trade                                                  3,333        4,073 
  Unbilled revenues and other                            1,315        1,116 
  Inventories                                            1,854        1,636 
  Refundable income taxes                                    6           -- 
  Prepaid expenses                                         429          585 
                                                   -----------  ----------- 
                                                                            
        Total current assets                             7,790       10,373 
                                                                            
Property and equipment, net                             20,329       20,399 
Goodwill                                                 1,383        1,383 
Intangible assets, net                                      38           54 
Debt issue costs                                            80           75 
Other assets                                               581           62 
                                                   -----------  ----------- 
                                                                            
        Total assets                               $    29,678  $    32,346 
                                                   ===========  =========== 
                                                                            
       Liabilities and Shareholders' Equity                                 
                                                                            
Current liabilities:                                                        
  Accounts payable                                 $     2,560  $     1,764 
  Accrued expenses                                       2,134        1,762 
  Customer advances                                      3,678        3,571 
  Income tax accruals                                       16           56 
  Revolving line of credit                               1,100        1,346 
  Current portion of capital lease obligation              545          613 
  Current portion of long-term debt                      6,199          735 
                                                   -----------  ----------- 
                                                                            
        Total current liabilities                       16,232        9,847 
                                                                            
Capital lease obligation, less current portion           1,051        1,071 
Long-term debt, less current portion                        --        5,842 
                                                                            
Shareholders' equity:                                                       
  Preferred shares, authorized 1,000,000 shares,                            
   no par value:                                                            
    1,935 Series A shares at 1,000 stated value                             
     issued and outstanding at March 31, 2012 and                           
     2,135 at September 30, 2011                         1,935        2,135 
  Common shares, no par value:                                              
    Authorized 19,000,000 shares; 7,124,404 issued                          
     and outstanding at March 31, 2012 and                                  
     6,945,631 at September 30, 2011                     1,743        1,698 
  Additional paid-in capital                            19,725       19,408 
  Accumulated deficit                                  (11,081)      (7,706)
  Accumulated other comprehensive income                    73           51 
                                                   -----------  ----------- 
                                                                            
        Total shareholders' equity                      12,395       15,586 
                                                   -----------  ----------- 
                                                                            
        Total liabilities and shareholders' equity $    29,678  $    32,346 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            


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