ABAXIS Reports Record Sales for the First Quarter of Fiscal 2006
UNION CITY, Calif., July 28 /PRNewswire-FirstCall/ — ABAXIS, Inc. , a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the first fiscal quarter ended June 30, 2005. Highlights include:
* Record quarterly revenues: $14.3 million, up 8% year-over-year. * Record quarterly total reagent disc sales of 767,000 units, compared to 701,000 units in the same period last year, up 9% year-over-year. * Record quarterly veterinary reagent disc sales of 674,000 units, compared to 612,000 units in the same period last year, up 10% year- over-year. * Quarterly medical reagent disc sales, excluding sales to the U.S. Military, of 74,000 units, compared to 48,000 units in the same period last year, up 54% year-over-year. * Record quarterly medical sales in the United States, excluding sales to the U.S. Military: $1.1 million, up 11% year-over-year. * Cash and short-term investments as of June 30, 2005: $24.1 million, up 29% year-over-year.
Quarterly Results: For the first fiscal quarter ended June 30, 2005, ABAXIS reported revenues of $14.3 million, as compared with revenues of $13.2 million for the comparable period last year, an increase of 8 percent. Instrument revenue and recurring reagent disc and hematology reagent revenue increased by $775,000 or 6 percent over the same period last year. The Company reported net income attributable to common shareholders of $1.0 million, compared to $1.4 million for the same period last year. The Company’s effective tax rate in the quarter ended June 30, 2005 was 36 percent, compared to 39 percent for the same period last year. The Company reported diluted net income per share of $0.05 (calculated based on 21,120,000 shares), compared to $0.07 per share (calculated based on 21,901,000 shares) for the same period last year.
Other Reported Information: Recurring reagent disc and hematology reagent revenue for the first fiscal quarter was $9.4 million, up 12 percent over the $8.5 million reported in the same period last year. During the quarter, the Company sold 767,000 medical and veterinary reagent discs compared to 701,000 medical and veterinary reagent discs sold during the same period last year. The Company sold 3,392 veterinary hematology reagent kits during the quarter, up 14 percent compared to 2,974 hematology reagent kits sold for the same period last year. The Company ended the quarter with $24.1 million in cash, cash equivalents and short-term investments and no long-term debt.
Clint Severson, chairman and CEO of Abaxis, commented, “We are pleased to report our 11th consecutive profitable quarter. The veterinary business grew at 14% overall compared to last year’s first quarter and our European market grew at a 30% clip during the quarter. We are very pleased with that development. In the medical market, revenues from reagent disc sales, excluding sales to the U.S. military, grew by 52% compared to sales in the first quarter of last year. We are optimistic that the convenience and the reliability of our medical market products will continue to drive higher levels of adoption within the medical community in the coming years.”
Mr. Severson continued, “Challenges for the quarter included lower Piccolo sales to the U.S. Military and an increase in operating expenses. During this quarter, we invested in both sales and marketing as well as in research and development. We are expanding our sales force and marketing programs in both the veterinary and medical markets. The higher investments in research and development resulted in the completion of three new discs, Lipids Plus, Basic Metabolic Panel Plus, and Avian/Reptilian Plus with Bile Acids, and the submission to the FDA of ALT, AST and glucose for CLIA waived status. The results of this quarter were also impacted by costs attributed to the Sarbanes-Oxley compliance process. We think these are prudent investments that will provide a superior long term return to shareholders. We are off to a good start for the fiscal year and we look forward to the opportunities ahead in the next three quarters.”
Conference Call
ABAXIS has scheduled a conference call to discuss its financial results at 4:15 p.m. ET on July 28, 2005. 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 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 (800) 642-1687 or (706) 645-9291, access code 7859242, through August 4, 2005. This press release is also available prior to and after the call via ABAXIS’ website or the Securities 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, 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.
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 June 30, 2005 2004 Net revenues $14,273 $13,242 Costs and operating expenses: Cost of revenues 6,446 6,074 Selling, general and administrative 4,675 3,641 Research and development 1,632 1,237 Total costs and operating expenses 12,753 10,952 Income from operations 1,520 2,290 Interest and other income 66 60 Interest and other expense (13) (6) Net income before income taxes 1,573 2,344 Income tax provision 572 910 Net Income $1,001 $1,434 Basic net income per share $0.05 $0.07 Diluted net income per share $0.05 $0.07 Weighted average common shares outstanding – basic 19,897 19,575 Weighted average common shares outstanding – diluted 21,120 21,901 ABAXIS, Inc. Balance Sheet Data: (Unaudited and in thousands) June 30, March 31, 2005 2005 Current assets: Cash and cash equivalents $7,174 $5,776 Short-term investments 16,917 16,858 Trade receivables (net) 10,392 10,509 Inventories 8,846 8,355 Prepaid expenses 228 282 Net deferred tax asset – current 4,199 4,677 Total current assets 47,756 46,457 Property and equipment, net 8,992 8,824 Intangible assets, net 581 600 Deposits and other assets 90 96 Net deferred tax asset – non-current 15,032 15,032 Total assets $72,451 $71,009 Current liabilities: Accounts payable $3,573 $3,850 Accrued payroll and related expenses 2,249 1,867 Other accrued liabilities 1,030 657 Warranty reserve 318 245 Deferred revenue 789 907 Income tax payable 196 171 Current portion of capital lease obligations 11 16 Total current liabilities 8,166 7,713 Non-current liabilities: Deferred rent 469 462 Deferred revenue, less current portion 1,020 1,146 Commission obligation, less current portion 16 21 Total non-current liabilities 1,505 1,629 Shareholders’ equity: Common stock 94,667 94,614 Accumulated deficit (32,017) (33,018) Accumulated other comprehensive income 130 71 Total shareholders’ equity 62,780 61,667 Total liabilities and shareholders’ equity $72,451 $71,009 Customer and Geographic Information (in thousands) Three Months Ended June 30, 2005 2004 United States $12,087 $11,512 International 2,186 1,730 Total revenues $14,273 $13,242 Customer and Market Information (in thousands) Three Months Ended June 30, 2005 2004 Medical Market $1,674 $2,240 Veterinary Market 12,006 10,510 Other 593 492 Total revenues $14,273 $13,242
ABAXIS, Inc.
CONTACT: Clint Severson, Chief Executive Officer of ABAXIS, Inc.,+1-510-675-6500; or Joe Dorame, Robert Blum, Joe Diaz, all of The RCG Group,+1-480-675-0400, for ABAXIS, Inc.
Web site: http://www.abaxis.com/