Abaxis today reported financial results for the third fiscal quarter ended December 31, 2017.
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UNION CITY, Calif., Jan. 25, 2018 /PRNewswire/ -- Abaxis, Inc. (Nasdaq: 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 third fiscal quarter ended December 31, 2017. Third quarter results include:
Revenues highlights:
Other financial highlights:
Management Discussion Clint Severson, chairman and chief executive officer of Abaxis, said, "We are very pleased to achieve revenues of $59.7 million in the third quarter, an increase of 13% compared to the same period last year. Driven by a strong growth in instrument and consumable sales during the third quarter, revenues in our medical and veterinary market segments increased by 18% and 12%, respectively, compared to the same period last year. Year-over-year revenue growth of medical and veterinary reagent discs was 17% and 12%, respectively, in the third quarter, over the same period last year." Mr. Severson continued, "Our new VetScan UA, a urine chemistry analyzer, had a tremendous launch, as we sold over 1,300 instruments since its introduction in late September 2017. Additionally, during the third quarter of fiscal 2018, we placed over 100 units of the VetScan FUSE, a bi-directional connectivity system that provides integration between Abaxis point-of-care analyzers and veterinary practice management systems worldwide. "We are excited about our outlook for the fourth quarter of fiscal 2018 based on our expectations for growth in the core business and several important new product launches. For example, we plan to launch our new urine sediment analyzer which targets a large veterinary market segment later this quarter. Furthermore, the USDA, Center for Veterinary Biologics, recently approved our VetScan FLEX4 Rapid Test, a combination test for heartworm, lyme, ehrlichia and anaplasma. We are excited to introduce and sell this product to veterinarians at the VMX conference in early February 2018." Mr. Severson concluded, "Looking to the future, we anticipate making additional investments in new product development. With our focus on innovation and an expanding field sales force we are optimistic about our future." Dividend Declared Abaxis today announced that its Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock, to be paid on March 15, 2018, to all shareholders of record as of the close of business on March 1, 2018. Results of Operations Quarterly Results For the fiscal quarter ended December 31, 2017, Abaxis reported revenues of $59.7 million, as compared with revenues of $52.8 million for the comparable period last year. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers, i?STAT analyzers and urinalysis instruments, increased by $1.1 million, or 12%, 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, rapid tests and urinalysis tests, increased by $5.1 million, or 13%, over the same period last year. Abaxis reported income from continuing operations before income tax provision of $9.5 million and net income from continuing operations of $4.2 million for the fiscal quarter ended December 31, 2017, compared to $10.8 million and $6.9 million for the fiscal quarter ended December 31, 2016, respectively. Abaxis' effective tax rate in the fiscal quarter ended December 31, 2017 was 55%, compared to 36% for the same period last year. During the third quarter of fiscal 2018, Abaxis recorded a one-time non-cash charge of $2.9 million due to a reduction in deferred tax assets as a result of the reduction of the federal tax rate from 35% to 21% effective January 1, 2018. Abaxis reported diluted net income per share of $0.18 (calculated based on 23,044,000 shares) for the fiscal quarter ended December 31, 2017, compared to $0.30 per share (calculated based on 22,789,000 shares) for the same period last year. Excluding the effect of the non-cash charge of $2.9 million, non-GAAP diluted net income per share was $0.31 for the third quarter of fiscal 2018. Nine-Month Results For the nine-month period ended December 31, 2017, Abaxis reported revenues of $176.8 million, as compared with revenues of $169.0 million for the comparable period last year. Revenues from instruments sales decreased by $0.9 million, or 3%, compared to the same period last year. Revenues from consumables sales increased by $7.3 million, or 6%, over the same period last year. Abaxis reported income from continuing operations before income tax provision of $29.4 million and net income from continuing operations of $17.2 million for the nine-month period ended December 31, 2017, compared to $39.5 million and $25.2 million for the nine-month period ended December 31, 2016, respectively. Abaxis' effective tax rate in the nine-month period ended December 31, 2017 was 42%, compared to 36% for the same period last year. During the nine-month period ended December 31, 2017, Abaxis recorded a one-time non-cash charge of $2.9 million due to a reduction in deferred tax assets as a result of the reduction of the federal tax rate from 35% to 21% effective January 1, 2018. Abaxis reported diluted net income per share of $0.75 (calculated based on 23,021,000 shares) for the fiscal period ended December 31, 2017, compared to $1.11 per share (calculated based on 22,753,000 shares) for the same period last year. Excluding the effect of the non-cash charge of $2.9 million, non-GAAP diluted net income per share was $0.87 for the nine month period ended December 31, 2017. Other Reported Information Non-cash compensation expense recognized for share-based awards during the three months ended December 31, 2017 and 2016 was $3.6 million and $2.4 million, respectively. Abaxis paid $3.6 million in cash dividends to shareholders during the third quarter of fiscal 2018. Following the recent enactment of the TCJA on December 22, 2017, Abaxis expects its effective income tax rate to decline by 200 to 300 basis points in fiscal 2018 compared to fiscal 2017, excluding a one-time non-cash charge described above. Abaxis estimates its effective income tax rate in fiscal 2019 will be lower by 1,000 to 1,200 basis points compared to fiscal 2017. The actual impact of the TCJA on the Company's effective income tax rates may differ from the estimates due to changes in interpretations and assumptions made by the Company. The Company anticipates subsequent regulations associated with the TCJA will be forthcoming and will continue to analyze the tax legislation to determine the full effects of the new law on Abaxis' consolidated financial statements. Conference Call Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, January 25, 2018. 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 10116166, through February 1, 2018. 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. Non-GAAP Financial Measure To supplement the financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Abaxis uses the non-GAAP financial measure of non-GAAP diluted net income per share. 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. Abaxis defines non-GAAP diluted net income per share as net income per share on a diluted basis excluding from net income the one-time non-cash charge due to a reduction in deferred tax assets as a result of the TCJA enacted on December 22, 2017. Abaxis uses this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding Abaxis' performance and liquidity by excluding a one-time non-cash charge resulting from changes to tax laws, that may not be indicative of recurring core business operating results or operating performance. A reconciliation from GAAP net income and GAAP diluted net income per share to non-GAAP net income and non-GAAP diluted net income per share, respectively, has been provided in the financial statement tables included below in this press release. Forward Looking Statements 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"), including but not limited to statements related to Abaxis' outlook for the fourth quarter of fiscal 2018, Abaxis' expected effective income tax rates in fiscal 2018 and fiscal 2019, the launch of Abaxis' urine sediment analyzer, estimated timing of introduction of the FLEX4 Rapid Test to the market, Abaxis' anticipated additional investments, further innovation and expansion of sales force and their impact on Abaxis' future and Abaxis' payment of quarterly dividends. 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. Forward-looking statements contained in this press release may be affected by risks and uncertainties that may cause actual results to differ materially from those projected or implied in such forward-looking statements, including, but not limited to, risks and uncertainties related to Abaxis' manufacturing operations, including the vulnerability of its manufacturing operations to potential interruptions and delays and its ability to manufacture products free of defects, Abaxis' ability to compete effectively, market acceptance of Abaxis' products, fluctuations in quarterly operating results and difficulty in predicting future results, the performance of Abaxis' independent distributors and Abaxis' ability to manage their inventory levels effectively, expansion of Abaxis' sales and marketing and distribution efforts, Abaxis' dependence on Abbott Point of Care, Inc. for its U.S. medical sales, dependence on sole or limited source suppliers, the effect of exchange rate fluctuations on international operations, dependence on key personnel, risks related to the protection of Abaxis' intellectual property or claims of infringement of intellectual property asserted by third parties. Readers should also refer to the section entitled "Risk Factors" in Abaxis' Annual Report on Form 10-K, and subsequently filed quarterly reports on Form 10-Q 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
(Unaudited)
(In thousands, except per share
data)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
Revenues $59,670 $52,772 $176,782 $169,020
Cost of
revenues 27,494 23,368 80,501 75,357
Gross profit 32,176 29,404 96,281 93,663
------ ------ ------ ------
Operating
expenses:
Research and
development 5,165 4,776 17,672 14,915
Sales and
marketing 13,657 10,629 38,642 33,707
General and
administrative 4,777 3,159 13,494 11,714
Total
operating
expenses 23,599 18,564 69,808 60,336
------ ------ ------ ------
Income from
operations 8,577 10,840 26,473 33,327
Interest and
other
income
(expense),
net 878 (52) 2,962 6,197
--- --- ----- -----
Income from
continuing
operations
before
income tax
provision 9,455 10,788 29,435 39,524
Income tax
provision 5,229 3,929 12,278 14,288
----- ----- ------ ------
Income from
continuing
operations 4,226 6,859 17,157 25,236
Discontinued
operations
Loss from
discontinued
operations,
net of tax - (15) - (70)
Net income $4,226 $6,844 $17,157 $25,166
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Net income
per share:
Basic
Continuing
operations $0.19 $0.30 $0.76 $1.12
Discontinued
operations - - - -
--- --- --- ---
Basic net
income per
share $0.19 $0.30 $0.76 $1.12
===== ===== ===== =====
Diluted
Continuing
operations $0.18 $0.30 $0.75 $1.11
Discontinued
operations - - - -
--- --- --- ---
Diluted net
income per
share $0.18 $0.30 $0.75 $1.11
===== ===== ===== =====
Shares used
in the
calculation
of net
income per
share:
Weighted
average
common
shares
outstanding
-basic 22,695 22,535 22,663 22,508
====== ====== ====== ======
Weighted
average
common
shares
outstanding
-diluted 23,044 22,789 23,021 22,753
====== ====== ====== ======
Cash
dividends
declared
per share $0.16 $0.14 $0.44 $0.38
===== ===== ===== =====
ABAXIS, INC.
Condensed Consolidated Balance
Sheets
(Unaudited and in thousands)
December 31, March 31,
2017 2017
---- ----
Current assets:
Cash and cash equivalents $71,902 $91,332
Short-term investments 89,717 51,561
Receivables, net 40,391 40,568
Inventories 42,498 39,010
Prepaid expenses and other
current assets 6,250 4,997
Net deferred tax assets,
current - 5,644
Current assets of
discontinued operations 45 66
Total current assets 250,803 233,178
Long-term investments 23,333 22,171
Investment in
unconsolidated affiliates 2,732 2,850
Property and equipment, net 34,902 34,260
Intangible assets, net 1,056 1,171
Net deferred tax assets,
non-current 7,489 4,392
Other assets 9,224 7,624
Total assets $329,539 $305,646
======== ========
Current liabilities:
Accounts payable $13,170 $7,517
Accrued payroll and related
expenses 10,285 9,606
Accrued taxes 47 2,151
Current liabilities of
discontinued operations 50 85
Other accrued liabilities 15,648 11,006
Deferred revenue 1,054 1,415
Warranty reserve 2,129 1,663
Total current liabilities 42,383 33,443
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Non-current liabilities:
Deferred revenue 1,278 1,460
Warranty reserve 2,864 2,695
Net deferred tax
liabilities 211 234
Notes payable, less current
portion 202 278
Other non-current
liabilities 1,544 1,312
Total non-current
liabilities 6,099 5,979
----- -----
Total liabilities 48,482 39,422
------ ------
Shareholders' equity:
Common stock 143,640 135,932
Retained earnings 137,481 130,304
Accumulated other
comprehensive loss (64) (12)
Total shareholders' equity 281,057 266,224
------- -------
Total liabilities and
shareholders' equity $329,539 $305,646
======== ========
Revenues by Geographic Region
and Customer Group
(Unaudited and in thousands)
The following table presents our revenues by source for the three and nine months ended December 31, 2017 and 2016. Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
Revenues by
Geographic
Region
North America $46,442 $41,538 $140,331 $135,328
International 13,228 11,234 36,451 33,692
Total revenues $59,670 $52,772 $176,782 $169,020
======= ======= ======== ========
Revenues by
Customer Group
Medical Market $10,193 $8,652 $28,337 $27,130
Veterinary Market 48,424 43,198 145,328 139,219
Other 1,053 922 3,117 2,671
Total revenues $59,670 $52,772 $176,782 $169,020
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The following table presents our calculation of non-GAAP net income and non-GAAP diluted net income per share to exclude a one-time non-cash charge of $2.9 million in the three and nine months ended December 31, 2017 due to a reduction in deferred tax assets as a result of the TCJA enacted on December 22, 2017. Reconciliation from GAAP Net Income to Non-GAAP Net Income and GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, 2017 December 31, 2017
----------------- -----------------
GAAP Non-GAAP GAAP Non-GAAP
Results Adjustments (1) Results Results Adjustments (1) Results
------- -------------- ------- ------- -------------- -------
Income from continuing operations before income tax provision $9,455 $ - $9,455 $29,435 $ - $29,435
Income tax provision 5,229 (2,939) 2,290 12,278 (2,939) 9,339
----- ------ ----- ------ ------ -----
Income from continuing operations 4,226 2,939 7,165 17,157 2,939 20,096
Discontinued operations
Loss from discontinued operations, net of tax - - - - - -
Net income $4,226 $2,939 $7,165 $17,157 $2,939 $20,096
====== ====== ====== ======= ====== =======
Net income per share:
Basic
Continuing operations $0.19 $0.32 $0.76 $0.89
Discontinued operations - - - -
Basic net income per share $0.19 $0.32 $0.76 $0.89
===== ===== ===== =====
Diluted
Continuing operations $0.18 $0.31 $0.75 $0.87
Discontinued operations - - - -
Diluted net income per share $0.18 $0.31 $0.75 $0.87
===== ===== ===== =====
Shares used in the calculation of net income per share:
Weighted average common shares outstanding - basic 22,695 22,695 22,663 22,663
====== ====== ====== ======
Weighted average common shares outstanding - diluted 23,044 23,044 23,021 23,021
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(1) To exclude the effect of a
one-time non-cash charge
of $2.9 million in the
three and nine months
ended December 31, 2017
due to a reduction in
deferred tax assets as a
result of the TCJA enacted
on December 22, 2017.
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Company Codes: NASDAQ-NMS:ABAX |
