ABAXIS Reports Record Revenues for the Fourth Quarter and Fiscal 2010
UNION CITY, Calif., April 29 /PRNewswire-FirstCall/ — ABAXIS, Inc. (Nasdaq: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the fiscal quarter and the fiscal year ended March 31, 2010.
Record quarterly and fiscal 2010 highlights include:
- Revenues of $33.7 million for the fourth quarter, up 28% over last year’s comparable quarter, and $124.6 million for fiscal 2010, up 18% year-over-year.
- North America revenues of $27.6 million for the fourth quarter, up 24% over last year’s comparable quarter, and $101.4 million for fiscal 2010, up 15% year-over-year.
- Veterinary market sales of $25.0 million for the fourth quarter, up 28% over last year’s comparable quarter, and $92.4 million for fiscal 2010, up 25% year-over-year.
- Total medical reagent disc sales of 582,000 units for the fourth quarter, up 41% over last year’s comparable quarter, and 1.9 million units for fiscal 2010, up 10% year-over-year.
- Total medical and veterinary reagent disc sales of 1.5 million units for the fourth quarter, up 14% over last year’s comparable quarter, and 5.7 million units for fiscal 2010, up 9% year-over-year.
- Total medical and veterinary reagent disc sales of $19.1 million for the fourth quarter, up 12% over last year’s comparable quarter, and $72.0 million for fiscal 2010, up 12% year-over-year.
Other quarterly and fiscal 2010 highlights include:
- Total medical and veterinary instrument sales of 1,065 units for the fourth quarter, up 49% over last year’s comparable quarter, and 4,036 units for fiscal 2010, up 29% year-over-year.
- Cash, cash equivalents and investments as of March 31, 2010 of $96.5 million, compared to $74.9 million as of March 31, 2009.
Quarterly Results: For the fiscal quarter ended March 31, 2010, Abaxis reported revenues of $33.7 million, as compared with revenues of $26.3 million for the comparable period last year, an increase of 28 percent. Revenues from instrument sales, which include chemistry analyzers, hematology instruments, coagulation analyzers and i-STAT analyzers, increased by an aggregate of $2.0 million, or 36 percent, over the same period last year. The company reported total medical and veterinary instrument sales of 1,065 units, up 49 percent over the same period last year. Revenues from consumables, which include reagent discs, hematology reagent kits, coagulation cartridges, i-STAT cartridges and heartworm rapid tests, increased by an aggregate of $5.1 million, or 27 percent, over the same period last year. The company reported net income of $2.6 million for the fiscal quarter ended March 31, 2010, which was flat in comparison to the same period last year. The company’s effective tax rate in the quarter ended March 31, 2010 was 41 percent, compared to 40 percent for the same period last year. The company reported diluted net income per share of $0.12 (calculated based on 22,725,000 shares) for the fourth quarter of fiscal 2010, compared to $0.12 per share (calculated based on 22,302,000 shares) for the same period last year.
Fiscal 2010 Results: For the fiscal year ended March 31, 2010, Abaxis reported revenues of $124.6 million, as compared with revenues of $105.6 million for the prior year, an increase of 18 percent. Revenues from instrument sales increased by an aggregate of $593,000, or 2 percent, over the prior year. The company reported total medical and veterinary instrument sales of 4,036 units, up 29 percent over the prior year. Revenues from consumables increased by an aggregate of $16.7 million, or 24 percent, over the prior year. The company reported net income of $13.0 million, compared to $12.0 million for the prior year. The company’s effective tax rate in the fiscal year ended March 31, 2010, was 39 percent, compared to 37 percent for the prior year. The company reported diluted net income per share of $0.58 (calculated based on 22,606,000 shares) for fiscal 2010, compared to $0.54 per share (calculated based on 22,324,000 shares) for fiscal 2009.
Other Reported Information: Consumables revenues for the fourth quarter of fiscal 2010 were $23.8 million, up 27 percent over the $18.7 million reported for the same period last year. Total sales in the medical market for the fourth quarter of fiscal 2010 were $6.9 million, an increase of 36 percent compared to the same period last year. Medical sales worldwide, excluding sales to the U.S. government, during the fourth quarter of fiscal 2010 were $6.3 million, an increase of 42 percent compared to the same period last year. Total sales in the veterinary market for the fourth quarter of fiscal 2010 were $25.0 million, an increase of 28 percent compared to the same period last year. Veterinary reagent disc sales for the fourth quarter of fiscal 2010 were $14.0 million, an increase of 6 percent compared to the same period last year.
Non-cash compensation expense recognized for share-based awards during the fourth quarter of fiscal 2010 was $1.6 million, compared to $443,000 for the same period last year. Non-cash compensation expense recognized for share-based awards in the fiscal year ended March 31, 2010 was $5.3 million, compared to $1.7 million for the same period last year.
Clint Severson, chairman and chief executive officer of Abaxis, commented, “Fiscal 2010 was another solid year for Abaxis. While macro-economic conditions continued to be challenging throughout the year, we achieved double-digit growth in revenues, expanded our installed instrument base in both our veterinary and medical markets and achieved record reagent discs sales. The fourth quarter was a solid contributor to the results for the fiscal year with strong double-digit growth in sales of all instrument categories as well as reagent discs sales. During the quarter, we did incur higher costs related to the introduction of new products in veterinary market. However, we believe that we will benefit in the coming years with a wider palette of products to serve our customers. All in all, we are very pleased with the financial and operational results for the fourth quarter and the fiscal year.”
Mr. Severson continued, “As we move into the new fiscal year, we are better positioned to operate even more efficiently going forward. Throughout fiscal 2010, we took a number of important steps to improve on the quality of our offerings and to support our customers at a world-class level. We believe that the instruments we produce today are the most accurate and reliable in the history of the company. Our customers, across all medical and veterinary practices, now benefit from the advanced engineering that is the hallmark of all Abaxis products, and they are better served by a sales, marketing and customer support regime that is second to none in the industry. We look forward to continue to grow our business and serve our customers in 2010 and beyond.”
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, April 29, 2010. Participants can dial (877) 317-6789 or (412) 317-6789 to access the conference call, or can listen via a live Internet web cast, which is available in the Investor Relations section of the company’s website at http://www.abaxis.com. A replay of the call is available by visiting http://www.abaxis.com for the next 30 days or by calling (877) 344-7529 or (412) 317-0088, access code 440020, through May 3, 2010. 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 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, 5.1 kilogram (11.2 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 12 minutes with the precision and accuracy equivalent to a clinical laboratory analyzer.
Use of Non-GAAP Financial Measures
To supplement the financial statements presented in accordance with United States generally accepted accounting principles (GAAP), Abaxis uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP net income per share and non-GAAP operating 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. For more information on these non-GAAP financial measures, refer to the tables captioned “Reconciliations of Non-GAAP Results of Net Income to GAAP Measures” and “Non-GAAP Operating Income Per Share” included at the end of this release.
Non-GAAP Net Income and Non-GAAP Net Income per Share. Abaxis defines non-GAAP net income and non-GAAP net income per share as net income plus share-based compensation. Abaxis uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Abaxis’ performance and liquidity by excluding certain expenses that may not be indicative of its recurring core business operating results or operating performance, by excluding non-cash charges, such as share-based compensation.
Non-GAAP Operating Income per Share. Abaxis defines non-GAAP operating income per share as operating income divided by the weighted average outstanding shares. Management uses this measure in comparing Abaxis’ operating results with historical performance and believes it provides 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, 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 Abaxis’ cash position, financial resources and potential for future growth, market acceptance of new or planned product offerings, process improvements and product manufacturing quality and efficiencies in future production of our products. 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. Specific forward-looking statements contained in this press release or in Abaxis’ conference call may be affected by risks and uncertainties, including, but not limited to, those related to the market acceptance of the company’s products and the continuing development of its products, required United States Food and Drug Administration 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 related to condition of the United States economy, risks involved in carrying of inventory and other risks detailed under “Risk Factors” in Abaxis’ Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2009 and Abaxis’ other periodic reports filed from time to time 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 on Following Pages
ABAXIS, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Twelve Months
Ended Ended
March 31, March 31,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
Revenues $33,665 $26,338 $124,557 $105,562
Cost of revenues 14,845 11,663 52,435 46,937
Gross profit 18,820 14,675 72,122 58,625
------ ------ ------ ------
Operating expenses:
Research and development 2,686 2,245 10,688 8,361
Sales and marketing 8,710 6,330 30,138 24,712
General and administrative 2,782 1,902 10,521 7,757
----- -----
Total operating expenses 14,178 10,477 51,347 40,830
------ ------ ------ ------
Income from operations 4,642 4,198 20,775 17,795
Interest and other income
(expense), net (165) 131 630 1,271
---- --- --- -----
Income before income tax
provision 4,477 4,329 21,405 19,066
Income tax provision 1,837 1,745 8,382 7,053
----- ----- ----- -----
Net income $2,640 $2,584 $13,023 $12,013
====== ====== ======= =======
Net income per share:
Basic net income per share $0.12 $0.12 $0.59 $0.55
===== ===== ===== =====
Diluted net income per share $0.12 $0.12 $0.58 $0.54
===== ===== ===== =====
Shares used in the calculation
of net income per share:
Weighted average common shares
outstanding -basic 22,081 21,912 22,021 21,826
Weighted average common shares
outstanding -diluted 22,725 22,302 22,606 22,324
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
March 31, March 31,
2010 2009
---- ----
Current assets:
Cash and cash equivalents $27,857 $49,237
Short-term investments 32,343 20,776
Receivables, net 23,962 21,983
Inventories 19,067 15,735
Prepaid expenses 1,340 957
Net deferred tax asset, current 3,773 4,676
Total current assets 108,342 113,364
Long-term investments 36,319 4,886
Property and equipment, net 15,544 14,798
Intangible assets, net 4,600 5,175
Net deferred tax asset, non-
current 2,935 2,464
Other assets 76 24
Total assets $167,816 $140,711
======== ========
Current liabilities:
Accounts payable $9,404 $3,963
Accrued payroll and related
expenses 5,615 3,698
Accrued taxes 400 34
Other accrued liabilities 1,256 1,116
Deferred revenue 1,157 1,024
Warranty reserve 1,183 1,714
Total current liabilities 19,015 11,549
------ ------
Non-current liabilities:
Deferred rent 163 137
Deferred revenue 1,359 1,550
Warranty reserve 160 583
Total non-current liabilities 1,682 2,270
----- -----
Shareholders' equity:
Common stock 125,050 117,846
Retained earnings 22,069 9,046
Total shareholders' equity 147,119 126,892
------- -------
Total liabilities and
shareholders' equity $167,816 $140,711
======== ========
ABAXIS, INC.
Reconciliations of Non-GAAP Results of Net Income to GAAP Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
2010
-----------------------------
GAAP Share-based Non-GAAP
Compensation
Results (1) Results
------- ------------- -------
Revenues $33,665 $- $33,665
Cost of revenues 14,845 (131) 14,714
Gross profit 18,820 131 18,951
------ --- ------
Operating expenses:
Research and development 2,686 (260) 2,426
Sales and marketing 8,710 (371) 8,339
General and administrative 2,782 (862) 1,920
-----
Total operating expenses 14,178 (1,493) 12,685
------ ------ ------
Income from operations 4,642 1,624 6,266
Interest and other income (expense),
net (165) - (165)
---- --- ----
Income before income tax provision 4,477 1,624 6,101
Income tax provision 1,837 530 2,367
----- --- -----
Net income $2,640 $1,094 $3,734
====== ====== ======
Net income per share:
Basic net income per share $0.12 $0.17
===== =====
Diluted net income per share $0.12 $0.16
===== =====
Shares used in the calculation of net
income per share:
Weighted average common shares
outstanding -basic 22,081 22,081
Weighted average common shares
outstanding -diluted 22,725 22,725
Three Months Ended March 31,
2009
-----------------------------
GAAP Share-based Non-GAAP
Compensation
Results (2) Results
------- ------------- -------
Revenues $26,338 $- $26,338
Cost of revenues 11,663 (44) 11,619
Gross profit 14,675 44 14,719
------ --- ------
Operating expenses:
Research and development 2,245 (62) 2,183
Sales and marketing 6,330 (107) 6,223
General and administrative 1,902 (230) 1,672
-----
Total operating expenses 10,477 (399) 10,078
------ ---- ------
Income from operations 4,198 443 4,641
Interest and other income (expense),
net 131 - 131
--- --- ---
Income before income tax provision 4,329 443 4,772
Income tax provision 1,745 179 1,924
----- --- -----
Net income $2,584 $264 $2,848
====== ==== ======
Net income per share:
Basic net income per share $0.12 $0.13
===== =====
Diluted net income per share $0.12 $0.13
===== =====
Shares used in the calculation of net
income per share:
Weighted average common shares
outstanding -basic 21,912 21,912
Weighted average common shares
outstanding -diluted 22,302 22,302
(1) To eliminate share-based compensation and related income tax
effect recorded in the three months ended March 31, 2010.
(2) To eliminate share-based compensation and related income tax
effect recorded in the three months ended March 31, 2009.
Year Ended March 31, 2010
-------------------------
GAAP Share-based Non-GAAP
Compensation
Results (3) Results
------- ------------- -------
Revenues $124,557 $- $124,557
Cost of revenues 52,435 (374) 52,061
Gross profit 72,122 374 72,496
------ --- ------
Operating expenses:
Research and development 10,688 (849) 9,839
Sales and marketing 30,138 (1,255) 28,883
General and administrative 10,521 (2,859) 7,662
Total operating expenses 51,347 (4,963) 46,384
------ ------ ------
Income from operations 20,775 5,337 26,112
Interest and other income (expense),
net 630 - 630
--- --- ---
Income before income tax provision 21,405 5,337 26,742
Income tax provision 8,382 1,741 10,123
----- ----- ------
Net income $13,023 $3,596 $16,619
======= ====== =======
Net income per share:
Basic net income per share $0.59 $0.75
===== =====
Diluted net income per share $0.58 $0.74
===== =====
Shares used in the calculation of net
income per share:
Weighted average common shares
outstanding -basic 22,021 22,021
Weighted average common shares
outstanding -diluted 22,606 22,606
Year Ended March 31, 2009
-------------------------
GAAP Share-based Non-GAAP
Compensation
Results (4) Results
------- ------------- -------
Revenues $105,562 $- $105,562
Cost of revenues 46,937 (152) 46,785
Gross profit 58,625 152 58,777
------ --- ------
Operating expenses:
Research and development 8,361 (240) 8,121
Sales and marketing 24,712 (508) 24,204
General and administrative 7,757 (843) 6,914
Total operating expenses 40,830 (1,591) 39,239
------ ------ ------
Income from operations 17,795 1,743 19,538
Interest and other income (expense),
net 1,271 - 1,271
----- --- -----
Income before income tax provision 19,066 1,743 20,809
Income tax provision 7,053 704 7,757
----- --- -----
Net income $12,013 $1,039 $13,052
======= ====== =======
Net income per share:
Basic net income per share $0.55 $0.60
===== =====
Diluted net income per share $0.54 $0.58
===== =====
Shares used in the calculation of net
income per share:
Weighted average common shares
outstanding -basic 21,826 21,826
Weighted average common shares
outstanding -diluted 22,324 22,324
(3) To eliminate share-based compensation and related income tax
effect recorded in the fiscal year ended March 31, 2010.
(4) To eliminate share-based compensation and related income tax
effect recorded in the fiscal year ended March 31, 2009.
Non-GAAP Operating Income Per Share
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
March 31, March 31,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
Shares used in the
calculation of operating
income per share (non-
GAAP):
Weighted average common
shares outstanding -
basic 22,081 21,912 22,021 21,826
Weighted average common
shares outstanding -
diluted 22,725 22,302 22,606 22,324
Non-GAAP operating
income per share -
basic $0.21 $0.19 $0.94 $0.82
===== ===== ===== =====
Non-GAAP operating
income per share -
diluted $0.20 $0.19 $0.92 $0.80
===== ===== ===== =====
Revenues by Geographic Region
(In thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
North America $27,599 $22,241 $101,391 $87,801
International 6,066 4,097 23,166 17,761
Total revenues $33,665 $26,338 $124,557 $105,562
======= ======= ======== ========
Revenues by Customer Group
(In thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
Medical Market $6,896 $5,077 $24,176 $24,796
Veterinary Market 25,015 19,581 92,411 74,046
Other 1,754 1,680 7,970 6,720
Total revenues $33,665 $26,338 $124,557 $105,562
======= ======= ======== ========
SOURCE Abaxis, Inc.