UNION CITY, Calif., Jan. 26 /PRNewswire-FirstCall/ -- ABAXIS, Inc. , a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the third fiscal quarter ended December 31, 2005. Highlights include:
* Quarterly revenues: $17.4 million, up 45% year-over-year. * Quarterly diluted EPS: $0.09 versus $0.04 in the same period last year. * Operating earnings of $2.8 million, up 170% year-over-year. * Quarterly Piccolo instrument sales of 105 units, up 110% year-over-year. * Quarterly medical sales of $2.9 million, up 52% year-over-year. * Quarterly medical sales in the United States, excluding sales to the U.S. Military: $2.1 million, up 167% year-over-year and 16% quarter-over-quarter. * Quarterly total reagent disc sales of 797,000 units, compared to 592,000 units in the same period last year, up 35% year-over-year. * Quarterly medical reagent disc sales, excluding sales to the U.S. Military, of 104,000 units, compared to 55,000 units in the same period last year, up 89% year-over-year. * Quarterly veterinary reagent disc sales of 655,000 units, compared to 477,000 units in the same period last year, up 37% year-over-year. * Cash and short-term investments as of December 31, 2005: $28.6 million, up 35% year-over-year.
Quarterly Results: For the third fiscal quarter ended December 31, 2005, ABAXIS reported revenues of $17.4 million, as compared with revenues of $12.1 million for the comparable period last year, an increase of 45 percent. Instrument revenue and recurring reagent disc and hematology reagent revenue increased by $4.7 million or 41 percent over the same period last year. The Company reported net income attributable to common shareholders of $1.9 million, compared to $770,000 for the same period last year. The Company’s effective tax rate in the quarter ended December 31, 2005 was 37 percent, compared to 32 percent for the same period last year. The Company reported diluted net income per share of $0.09 (calculated based on 21,585,000 shares), compared to $0.04 per share (calculated based on 21,550,000 shares) for the same period last year.
Nine Months Results: For the nine-month period ended December 31, 2005, ABAXIS reported total revenues of $49.1 million, compared with revenues of $38.9 million for the comparable period last year, an increase of 26 percent. During the nine-month period, the Company sold 2.4 million units of reagent discs, up 22 percent compared to the same period last year. Net income attributable to common shareholders for the nine-month period ended December 31, 2005 was $5.2 million, as compared to $3.5 million for the same period last year, an increase of 45 percent. The Company reported diluted net income per share of $0.24 (calculated based on 21,374,000 shares), compared to $0.16 per share (calculated based on 21,726,000 shares) for the same period last year.
Other Reported Information: Recurring reagent disc and hematology reagent revenue for the third fiscal quarter was $9.8 million, up 31 percent over the $7.5 million reported in the same period last year. During the quarter, the Company sold 797,000 medical and veterinary reagent discs compared to 592,000 medical and veterinary reagent discs sold during the same period last year. The Company ended the quarter with $28.6 million in cash, cash equivalents and short-term investments.
Clint Severson, chairman, president and chief executive officer of ABAXIS, said, “Both markets of our business continued to operate at a high level during the quarter. Strong instrument sales in both our veterinary and medical markets characterized the quarter. We sold 671 VetScan and hematology instruments and 105 Piccolo units during the quarter. In addition to the revenue generated from these sales, our expectation is that our recurring revenue component will continue to grow via increased reagent disc sales in both markets in the quarters to come. We are particularly pleased that our domestic medical market sales, excluding sales to the military, were up 167%, compared to last year. We believe this is indicative of the traction that we are beginning to develop in this important market. Additionally, we were pleased that we experienced an increase in our international business of 33% compared to last year. The opening of the market in Japan was a major catalyst in driving our international results. All in all, we are very pleased with the strong performance during the quarter, which marked our 13th consecutive profitable quarter.”
Mr. Severson continued, “We were also very pleased to formalize our Piccolo distribution agreement with PSS World Medical during the quarter. Of the 105 Piccolo units placed during the quarter, PSS’ sales efforts generated the majority of the units placed in medical facilities. We think this is a great start to our partnership and we look forward to working closely with PSS World Medical in the years to come. Also during the quarter we completed all of the necessary work to successfully launch the VetScan VS2, the next generation of veterinary blood analysis systems. The VS2 is equipped with a number of new features that enhance a veterinarian’s ability to properly diagnose conditions and determine a treatment regime on a very timely basis in a single visit.”
Conference Call
ABAXIS has scheduled a conference call to discuss its financial results at 4:15 p.m. ET on January 26, 2006. 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 can be found at www.abaxis.com. A replay of the call is available by visiting www.abaxis.com for the next 30 days or by calling (800) 642-1687 or (706) 645-9291, access code 3988903, through January 30, 2006. This press release is also available prior to and after the call via ABAXIS’ website or the Securities Exchange Commission’s website at 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, 6.9 kilogram (15 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 14 minutes with the precision and accuracy equivalent to a clinical laboratory analyzer.
Use of Non-GAAP Financial Measures
This earnings release presents ABAXIS’ income from operations and net income attributable to common shareholders. To supplement the financial statements presented in accordance with GAAP, ABAXIS uses non-GAAP measures of operating income per share on a pro forma basis, which is not a measurement of performance under accounting principles generally accepted in the United States of America. Management uses these measures in comparing ABAXIS’ historical performance and believes that these measures provide 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 statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). 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”, or “anticipates”, and do not reflect historical facts. Specific forward-looking statements contained in this press release include, but are not limited to, risks and uncertainties related to fluctuations in the Company’s share price, the market acceptance of the Company’s products and the continuing development of its products, required United States Food and Drug Administration (“FDA”) 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 involved in carrying of inventory, risks associated with the ability to attract, train and retain competent sales personnel, general market conditions, competition and other risks detailed from time to time in ABAXIS’ periodic reports filed with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made. ABAXIS does not undertake and specifically disclaims any obligation to update any forward-looking statements.
ABAXIS, Inc. Summary of Financial Information (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 Net revenues $17,444 $12,063 $49,130 $38,940 Costs and operating expenses: Cost of revenues 7,605 5,994 21,372 18,336 Selling, general and administrative 5,537 3,716 15,404 11,312 Research and development 1,491 1,311 4,554 3,779 Total costs and operating expenses 14,633 11,021 41,330 33,427 Income from operations 2,811 1,042 7,800 5,513 Interest and other income 119 94 366 224 Interest and other expense (7) (4) (20) (29) Net income before income taxes 2,923 1,132 8,146 5,708 Income tax provision 1,072 362 2,996 2,163 Net Income $1,851 $770 $5,150 $3,545 Basic net income per share $0.09 $0.04 $0.26 $0.18 Diluted net income per share $0.09 $0.04 $0.24 $0.16 Weighted average common shares outstanding - basic 20,027 19,745 19,948 19,656 Weighted average common shares outstanding - diluted 21,585 21,550 21,374 21,726 ABAXIS, Inc. Balance Sheet Data: (Unaudited and in thousands) December 31, March 31, 2005 2005 Current assets: Cash and cash equivalents $7,389 $5,776 Short-term investments 21,193 16,858 Trade receivables (net) 13,667 10,509 Inventories 10,020 8,355 Prepaid expenses 377 282 Net deferred tax asset - current 2,336 4,677 Total current assets 54,982 46,457 Property and equipment, net 9,644 8,824 Intangible assets, net 544 600 Deposits and other assets 78 96 Net deferred tax asset - non-current 15,043 15,032 Total assets $80,291 $71,009 Current liabilities: Accounts payable $5,486 $3,850 Accrued payroll and related expenses 2,822 1,867 Other accrued liabilities 1,078 657 Warranty reserve 393 245 Deferred revenue 830 907 Income tax payable 131 171 Current portion of capital lease obligations -- 16 Total current liabilities 10,740 7,713 Non-current liabilities: Deferred rent 481 462 Deferred revenue, less current portion 864 1,146 Commission obligation, less current portion 16 21 Total non-current liabilities 1,361 1,629 Shareholders’ equity: Common stock 95,791 94,614 Accumulated deficit (27,868) (33,018) Accumulated other comprehensive income 267 71 Total shareholders’ equity 68,190 61,667 Total liabilities and shareholders’ equity $80,291 $71,009 Pro Forma Effect of Operating Income Per Share (in thousands) Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 Income from operations, as reported $2,811 $1,042 $7,800 $5,513 Pro forma operating income per share: As reported - basic $0.09 $0.04 $0.26 $0.18 Pro forma - basic $0.14 $0.05 $0.39 $0.28 As reported - diluted $0.09 $0.04 $0.24 $0.16 Pro forma - diluted $0.13 $0.05 $0.36 $0.25 Customer and Geographic Information (in thousands) Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 United States $14,777 $10,062 $41,815 $33,305 International 2,667 2,001 7,315 5,635 Total revenues $17,444 $12,063 $49,130 $38,940 Customer and Market Information (in thousands) Three Months Ended Nine Months Ended December 31, December 31, 2005 2004 2005 2004 Medical Market $2,858 $1,877 $7,879 $6,100 Veterinary Market 13,735 9,909 38,454 31,619 Other 851 277 2,797 1,221 Total revenues $17,444 $12,063 $49,130 $38,940
ABAXIS, Inc.
CONTACT: Clint Severson, Chief Executive Officer of ABAXIS, Inc.,+1-510-675-6500; or Joe Dorame, Robert Blum, or Joe Diaz, all of LythamPartners, LLC, +1-602-889-9700, for ABAXIS, Inc.
Web site: http://www.abaxis.com/
