Bioanalytical Systems, Inc. Delivers Revenue and Earnings Growth for the Third Quarter and First Nine Months of Fiscal 2011

WEST LAFAYETTE, IN--(Marketwire - August 09, 2011) - Bioanalytical Systems, Inc. (NASDAQ: BASI) (BASi) announced today that revenue for the third quarter of fiscal 2011 ended June 30, 2011 increased 5.1% to $8,478,000 from $8,064,000 for the third quarter of fiscal 2010. Net income for this year's third quarter increased 45.1% to $418,000 compared to $288,000 a year ago. For the nine months ended June 30, 2011, revenue increased 16.9% to $24,991,000 from $21,376,000 for the first nine months of fiscal 2010. Net income for this year's first nine months increased to $1,211,000. This compares to a net loss for the first nine months of fiscal 2010 of $2,411,000.

In May 2011, BASi closed an oversubscribed public offering for $5,506,000 of units consisting of convertible preferred shares and warrants to purchase common shares. Accounting for the value of the warrants and the preferred stock in the third quarter and first nine months of fiscal 2011 resulted in a one-time deemed dividend to preferred stockholders of $3,277,000, which was deducted from net earnings to compute GAAP earnings per share. Additionally, we immediately charged $991,080, the dividends payable to the preferred stockholders, against net earnings to compute GAAP earnings per share. This resulted in a GAAP loss per share of $0.65 and $0.58 for the third quarter and first nine months of fiscal 2011, respectively. Excluding the deemed dividend to preferred stockholders, pro-forma diluted net income per share was $0.06 for this year's third quarter and $0.22 for this year's first nine months. This compares to net income per diluted share of $0.06 for the third quarter of fiscal 2010 and a loss per share of $0.49 for the first nine months of fiscal 2010. We consider the pro-forma diluted earnings per share to be a useful measure in comparing operating results of BASi because it removes the theoretical calculation for the deemed dividend. A reconciliation of GAAP to non-GAAP financial measures is provided in the table attached to this press release.

At June 30, 2011, BASi reported cash and cash equivalents of $4,632,000, working capital of $1,802,000, total long-term obligations of $7,296,000, and shareholders' equity of $16,253,000, or $2.35 per outstanding share. At September 30, 2010, cash and cash equivalents were $1,422,000, the working capital deficiency was $3,342,000, total long-term obligations were $7,100,000, and shareholders' equity was $10,667,000, or $2.17 per outstanding share.

Anthony Chilton, President and Chief Executive Officer, said, "R&D outsourcing and 'single molecule' biotech companies are increasingly significant factors in new drug development, which are trends we expect to continue. So in addition to building our longstanding relationships with large pharmaceutical companies, we are promoting our services to smaller drug development companies which generally do not have the desire or the resources to build laboratory facilities or assemble staffs with the scientific and regulatory capabilities required to bring a drug candidate through the approval process. We recently launched our Enhanced Drug Discovery services to further this strategy, using our proprietary Culex® automated in vivo sampling and dosing technology to provide early experiments in our laboratories that previously would have been conducted in the sponsor's facilities.

"Pricing is improving, although it still lags pre-recession levels, and the volume of studies and number of samples to assay have increased steadily for us so far this year. We also have experienced an increase in proposal opportunities and in new orders accepted, especially in our toxicology group. These are encouraging signs that our stepped-up investment in sales and marketing is setting the stage for further growth in the years ahead."

Chilton said that based on results through the first nine months of fiscal 2011, management now expects revenue for the current fiscal year in the range of $33-34 million, compared to prior guidance of $35 million, and net earnings of $1.4 to $1.5 million, compared to prior guidance of $1.6 million.

Earnings Conference Call
BASi has scheduled a conference call at 11:00 a.m. EDT this morning. To participate, dial 800.573.4754, passcode #85887155 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 #77991616 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               
            (In thousands, except per share amounts)(Unaudited)             
                                                                            
                                                                            
                            Three Months Ended         Nine Months Ended    
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2011         2010         2011         2010    
                         -----------  -----------  -----------  ----------- 
Service revenue          $     6,737  $     6,034  $    19,326  $    16,092 
Product revenue                1,741        2,030        5,665        5,284 
                         -----------  -----------  -----------  ----------- 
    Total revenue              8,478        8,064       24,991       21,376 
                                                                            
Cost of service revenue        5,043        4,538       14,544       13,863 
Cost of product revenue          690          855        2,189        2,161 
                         -----------  -----------  -----------  ----------- 
    Total cost of                                                           
     revenue                   5,733        5,393       16,733       16,024 
                                                                            
Gross profit                   2,745        2,671        8,258        5,352 
Operating expenses:                                                         
  Selling                        816          589        2,275        2,057 
  Research and                                                              
   development                   127          124          350          434 
  General and                                                               
   administrative              1,321        1,400        3,964        4,830 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                  2,264        2,113        6,589        7,321 
                                                                            
Operating income (loss)          481          558        1,669       (1,969)
                                                                            
Interest expense                 (70)        (270)        (473)        (786)
Other income                       7           --           15           -- 
                         -----------  -----------  -----------  ----------- 
                                                                            
Income (loss) before                                                        
 income taxes                    418          288        1,211       (2,755)
                                                                            
Income tax benefit                --           --           --         (344)
                         -----------  -----------  -----------  ----------- 
                                                                            
Net income (loss)        $       418  $       288  $     1,211  $    (2,411)
                                                                            
  Less: Deemed dividend                                                     
   on Series A preferred                                                    
   shares                     (3,277)          --       (3,277)          -- 
                                                                            
  Less: Preferred stock                                                     
   dividends                    (991)          --         (991)          -- 
                                                                            
                         -----------  -----------  -----------  ----------- 
Net income (loss)                                                           
 attributable to common                                                     
 shareholders            $    (3,850) $       288  $    (3,057) $    (2,411)
                         ===========  ===========  ===========  =========== 
                                                                            
Basic net income (loss)                                                     
 per share               $     (0.65) $      0.06  $     (0.58) $     (0.49)
                         ===========  ===========  ===========  =========== 
Diluted net income                                                          
 (loss) per share        $     (0.65) $      0.06  $     (0.58) $     (0.49)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted common shares                                                      
 outstanding:                                                               
  Basic                        5,911        4,915        5,247        4,915 
  Diluted                      5,911        4,915        5,247        4,915 
                                                                            
                                                                            
                        BIOANALYTICAL SYSTEMS, INC.                         
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                    (In thousands, except share amounts)                    
                                                                            
                                                                            
                                                 June 30,     September 30, 
                                                   2011            2010     
                                              -------------   ------------- 
Assets                                         (Unaudited)                  
                                                                            
Current assets:                                                             
  Cash and cash equivalents                   $       4,632   $       1,422 
  Accounts receivable                                                       
    Trade                                             3,712           3,670 
    Unbilled revenues and other                       1,520           1,298 
  Inventories                                         1,647           1,673 
  Refundable income taxes                                16              16 
  Prepaid expenses                                      652             555 
                                              -------------   ------------- 
                                                                            
      Total current assets                           12,179           8,634 
                                                                            
Property and equipment, net                          20,517          19,439 
Goodwill                                              1,383           1,383 
Intangible assets, net                                   61              84 
Debt issue costs                                        106             123 
Other assets                                            641              80 
                                              -------------   ------------- 
                                                                            
      Total assets                            $      34,310   $      29,743 
                                              =============   ============= 
                                                                            
                                                                            
Liabilities and shareholders' equity                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                            $       1,696   $       1,911 
  Accrued expenses                                    1,752           1,848 
  Customer advances                                   4,432           4,582 
  Income tax accruals                                    22              30 
  Revolving line of credit                            1,501           1,195 
  Fair value of interest rate swaps                      --              31 
  Current portion of capital lease obligation           608             524 
  Current portion of long-term debt                     750           1,855 
                                              -------------   ------------- 
                                                                            
      Total current liabilities                      10,761          11,976 
                                                                            
Capital lease obligation, less current                                      
 portion                                              1,286             623 
Long-term debt, less current portion                  6,010           6,477 
                                                                            
Shareholders' equity:                                                       
  Preferred shares, authorized 1,000,000                                    
   shares, no par value: 2,135 Series A                                     
   shares at 1,000 stated value issued and                                  
   outstanding at June 30, 2011 and none at                                 
   September 30, 2010                                 2,135              -- 
  Common shares, no par value: Authorized                                   
   19,000,000; shares issued and outstanding                                
   6,912,511 at June 30, 2011 and 4,915,318                                 
   at September 30, 2010                              1,690           1,191 
  Additional paid-in capital                         19,370          13,357 
  Accumulated deficit                                (7,038)         (3,981)
  Accumulated other comprehensive income                 96             100 
                                              -------------   ------------- 
                                                                            
      Total shareholders' equity                     16,253          10,667 
                                              -------------   ------------- 
                                                                            
      Total liabilities and shareholders'                                   
       equity                                 $      34,310   $      29,743 
                                              =============   ============= 
                                                                            
                                                                            
                        BIOANALYTICAL SYSTEMS, INC.                         
                       PRO-FORMA NET INCOME PER SHARE                       
                    (In thousands, except share amounts)                    
                                                                            
                                                                            
                                               Three Months    Nine Months  
                                                  Ended           Ended     
                                                 June 30,        June 30,   
                                                   2011            2011     
                                              -------------   ------------- 
                                                                            
Basic net income (loss):                                                    
                                                                            
Net income                                    $         418   $       1,211 
Less: Deemed dividend for Series A Preferred                                
 Shares                                              (3,277)         (3,277)
Less: Preferred dividends                              (991)           (991)
                                              -------------   ------------- 
  Net loss applicable to common shareholders  $      (3,850)  $      (3,057)
                                              -------------   ------------- 
                                                                            
                                                                            
Pro forma basic net income per share:                                       
                                                                            
GAAP net loss applicable to common                                          
 shareholders                                 $      (3,850)  $      (3,057)
Plus: Deemed dividend for Series A Preferred                                
 Shares                                               3,277           3,277 
                                              -------------   ------------- 
  Pro forma net income (loss) applicable to                                 
   common shareholders                        $        (573)  $         220 
                                              -------------   ------------- 
                                                                            
GAAP weighted average common shares                                         
 outstanding                                          5,911           5,247 
                                                                            
                                              -------------   ------------- 
  Pro forma basic net income (loss) per share $       (0.10)  $        0.04 
                                              =============   ============= 
                                                                            
                                                                            
Pro forma diluted net income per share:                                     
                                                                            
Pro forma net income (loss) applicable to                                   
 common shareholders                          $        (573)  $         220 
Plus: Preferred dividends                               991             991 
                                              -------------   ------------- 
    Total                                     $         418   $       1,211 
                                              =============   ============= 
                                                                            
GAAP diluted weighted average common shares                                 
 outstanding                                          5,911           5,247 
                                                                            
Plus: Incremental shares from assumed                                       
 conversions                                                                
  Series A preferred shares                             841             280 
  Warrants                                              124              -- 
  Stock options                                          92              90 
                                              -------------   ------------- 
                                                                            
Pro forma diluted weighted average common                                   
 shares outstanding                                   6,968           5,617 
                                              -------------   ------------- 
                                                                            
  Pro forma diluted net income per share      $        0.06   $        0.22 
                                              =============   ============= 
                                                                            

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