ABAXIS INC UNION CITY, Calif., April 30, 2015 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the fourth quarter and fiscal year ended March 31, 2015.
Fourth quarter and fiscal 2015 overview:
-- Revenues from continuing operations of $52.0 million for the fourth
quarter, up 33% over last year's comparable quarter, and $202.6 million
for fiscal 2015, up 25% year-over-year.
-- Diluted EPS of $0.50 for the fourth quarter, up 194% over last year's
comparable quarter, and $1.20 for fiscal 2015, up 90% year-over-year.
Diluted EPS for the fourth quarter and full fiscal year ended March 31,
2015 includes the effect of the gain on sale of Abaxis' AVRL business
unit, as further described in "Discontinued Operations" below.
Revenues highlights:
-- North America revenues from continuing operations for the fourth quarter
of $41.8 million, up 39% over last year's comparable quarter, and $163.3
million for fiscal 2015, up 29% year-over-year.
-- International revenues for the fourth quarter of $10.2 million, up 11%
over last year's comparable quarter, and $39.3 million for fiscal 2015,
up 11% year-over-year.
-- Medical market revenues for the fourth quarter of $8.7 million, up 22%
over last year's comparable quarter, and $35.4 million for fiscal 2015,
up 26% year-over-year.
-- Veterinary market revenues for the fourth quarter of $42.6 million, up
36% over last year's comparable quarter, and $164.0 million for fiscal
2015, up 25% year-over-year.
-- Total medical and veterinary instrument revenues for the fourth quarter
of $11.7 million, up 63% over last year's comparable quarter, and $48.6
million for fiscal 2015, up 30% year-over-year.
-- Total medical and veterinary instrument sales of 1,536 units for the
fourth quarter, up 45% over last year's comparable quarter, and 6,791
units for fiscal 2015, up 28% year-over-year.
-- Total medical and veterinary reagent disc revenues for the fourth
quarter of $29.3 million, up 24% over last year's comparable quarter,
and $111.1 million for fiscal 2015, up 24% year-over-year.
-- Total medical and veterinary reagent disc sales of 2.3 million units for
the fourth quarter, up 23% over last year's comparable quarter, and 8.5
million units for fiscal 2015, up 22% year-over-year.
Other financial highlights:
-- Gross profit from continuing operations of $28.4 million for the fourth
quarter, up 35% over last year's comparable quarter, and $109.0 million
for fiscal 2015, up 30% year-over-year.
-- Cash, cash equivalents and investments as of March 31, 2015 of $157.3
million, an increase of $36.1 million from March 31, 2014.
-- Abaxis paid dividends of $9.0 million in fiscal 2015.
Clint Severson, chairman and chief executive officer of Abaxis, added, "The fourth quarter was strong and continued the trend of the previous three quarters of the year, making fiscal 2015 an excellent year for Abaxis. We generated strong revenue growth, culminating in record revenues from continuing operations for the fiscal year of $202.6 million. In our veterinary market segment, the growth was driven in North America as revenues from sales of our VetScan VS2 instruments and consumables increased by 56% and 32%, respectively, year-over-year. In our medical market segment, revenues from sales of Piccolo products continued to gain traction with strong double-digit growth in the fourth quarter and the fiscal year. Although in the European market, unit sales of our Piccolo and VetScan VS2 products increased, we faced challenges from global economic uncertainties, especially from the effect of a strong U.S. dollar on the remeasurement of foreign-denominated sales into dollars as we recorded a loss on foreign currency of $1.8 million during fiscal 2015."
"The operational and financial results generated this year are a testament to the focus and dedication of the entire Abaxis team," continued Mr. Severson. "We have initiated a number of strategic changes over the past few years to make Abaxis more efficient and more responsive to our markets. Our employees have stepped up to the challenge and the results are beginning to reflect those efforts. As a result, we successfully obtained regulatory clearance on a number of rapid tests and expanded our national distribution network in the veterinary market. Additionally, our distribution partners have also responded positively by penetrating the market to a greater extent as they have become increasingly more aware of the features and benefits of our diagnostic products."
"In fiscal 2015, we invested in research and development to develop new products to lead us into the future. At the end of fiscal 2015, we continue to maintain a strong financial base with cash, cash equivalents and investments of $157.3 million. As we move into fiscal 2016, we believe we are well positioned to continue to build on this positive trend and leverage our strategic partnerships to drive growth and market share. "
Dividend Declared
Abaxis today announced that its Board of Directors declared an increase in the quarterly dividend from $0.10 to $0.11 per common share, to be paid on June 18, 2015, to all shareholders of record as of the close of business on June 4, 2015. This represents a 10% increase compared to the prior quarterly dividend.
Results of Continuing Operations
Quarterly Results
For the fiscal quarter ended March 31, 2015, Abaxis reported revenues from continuing operations of $52.0 million, as compared with revenues of $39.2 million for the comparable period last year, an increase of 33 percent. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i?STAT analyzers, increased by $4.5 million, or 63 percent, 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 and rapid tests, increased by $7.7 million, or 25 percent, compared to the same period last year. Abaxis reported net income from continuing operations of $3.8 million for the fiscal quarter ended March 31, 2015, compared to $4.1 million for the fiscal quarter ended March 31, 2014. Abaxis' effective tax rate in the quarter ended March 31, 2015 was 42 percent, compared to 36 percent for the same period last year. The effective tax rate for the fourth quarter of fiscal 2015 was negatively impacted in part from non-recurring non-deductible expenses incurred during the period. Abaxis reported diluted net income per share from continuing operations of $0.17 (calculated based on 22,870,000 shares) for the three-month period ended March 31, 2015, compared to $0.19 per share (calculated based on 22,547,000 shares) for the same period last year.
Fiscal 2015 Results
For the fiscal year ended March 31, 2015, Abaxis reported revenues from continuing operations of $202.6 million, as compared with revenues of $162.0 million for the prior year, an increase of 25 percent. Revenues from instrument sales increased by $11.1 million, or 30 percent, over the prior year. Revenues from sales of consumables increased by $26.9 million, or 23 percent, over the prior year. The company reported net income from continuing operations of $20.8 million for fiscal 2015, compared to $16.2 million for the prior year. The company's effective tax rate in fiscal 2015 was 37 percent, compared to 36 percent for the prior year. The company reported diluted net income per share from continuing operations of $0.91 (calculated based on 22,787,000 shares) for fiscal 2015, compared to $0.72 per share (calculated based on 22,575,000 shares) for fiscal 2014.
Other Reported Information
Non-cash compensation expense recognized for share-based awards during the fourth quarter of fiscal 2015 was $2.6 million, compared to $1.9 million for the same period last year. Abaxis paid $2.3 million in cash dividends to shareholders during the fourth quarter of fiscal 2015.
Discontinued Operations
On March 18, 2015, we entered into an Asset Purchase Agreement with Antech Diagnostics, Inc. pursuant to which we sold substantially all of the assets of our Abaxis Veterinary Reference Laboratories ("AVRL") business. The transaction closed on March 31, 2015. The total purchase price under the Agreement is $21.0 million in cash. We received $20.1 million in cash proceeds during the fourth quarter of fiscal 2015, while the remaining $0.9 million is being held in escrow until certain conditions are met, upon which proceeds may be released on the one year anniversary of the closing.
The sale of our AVRL business unit, which was previously reported within our veterinary market segment, resulted in a pre-tax gain of $12.3 million ($7.7 million after-tax) for the fiscal year ended March 31, 2015. The pre-tax gain on this sale reflects the excess of the sum of the cash proceeds received over the costs incurred in connection with the sale of AVRL. During the fourth quarter of fiscal 2015, we recorded costs of $7.8 million related to cash payments for employee-related costs, including costs for severance, contract termination and other associated costs, and a non-cash charge for the impairment of fixed assets and other assets. These costs partially offsets the cash proceeds that the Company received in accordance with the terms of the Agreement.
Conference Call
Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, April 30, 2015. Participants can dial (877) 317-6789 or (412) 317-6789 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 10064238, through May 6, 2015. 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, tools and services 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.
Forward Looking Statements
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 and penetration of new or planned product offerings, and future recurring revenues and results of operations. 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 risks related to the transition of its U.S. medical sales to Abbott, potential excess inventory levels and inventory imbalances at the company's distributors, losses or system failures with respect to Abaxis' facilities or manufacturing operations, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results, dependence on sole suppliers, the market acceptance of Abaxis' products and services, 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 competing in the human diagnostic market, risks related to the protection of Abaxis' intellectual property or claims of infringement of intellectual property asserted by third parties and risks related to condition of the United States economy. 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)
(All prior periods have been recast to reflect AVRL business unit as discontinued operations.)
Three Months Ended Twelve Months Ended
March 31, March 31,
--------- ---------
2015 2014 2015 2014
---- ---- ---- ----
Revenues $52,017 $39,216 $202,593 $162,031
Cost of revenues 23,609 18,227 93,623 78,081
Gross profit 28,408 20,989 108,970 83,950
------ ------ ------- ------
Operating expenses:
Research and
development 4,563 3,460 16,327 13,647
Sales and marketing 11,954 8,036 42,147 34,742
General and
administrative 4,717 3,017 16,192 11,333
Total operating
expenses 21,234 14,513 74,666 59,722
------ ------ ------ ------
Income from
operations 7,174 6,476 34,304 24,228
Interest and other
income (expense),
net (667) (2) (1,262) 994
---- --- ------ ---
Income from
continuing
operations before
income tax
provision 6,507 6,474 33,042 25,222
Income tax
provision 2,705 2,340 12,239 8,993
----- ----- ------ -----
Income from
continuing
operations 3,802 4,134 20,803 16,229
----- ----- ------ ------
Discontinued operations:
Loss from
discontinued
operations, net of
tax (1) (153) (396) (1,154) (2,044)
Gain on sale of
discontinued
operations, net of
tax (1) 7,682 - 7,682 -
----- --- -----
Net income $11,331 $3,738 $27,331 $14,185
======= ====== ======= =======
Net income (loss) per share
Basic
Continuing
operations $0.17 $0.19 $0.92 $0.73
Discontinued
operations 0.33 (0.02) 0.29 (0.09)
---- ----
Basic net income
per share $0.50 $0.17 $1.21 $0.64
===== ===== ===== =====
Diluted
Continuing
operations $0.17 $0.19 $0.91 $0.72
Discontinued
operations 0.33 (0.02) 0.29 (0.09)
---- ----
Diluted net income
per share $0.50 $0.17 $1.20 $0.63
===== ===== ===== =====
Weighted average shares outstanding
Basic 22,538 22,272 22,497 22,270
====== ====== ====== ======
Diluted 22,870 22,547 22,787 22,575
====== ====== ====== ======
Cash dividends
declared per share $0.10 $ - $0.40 $ -
===== ============== ===== =================
(1) Represents the AVRL business
within our veterinary market
segment, which was sold
during the fourth quarter of
fiscal 2015.
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
March 31, March 31,
2015 2014
---- ----
Current assets:
Cash and cash equivalents $107,015 $73,589
Short-term investments 26,109 29,102
Receivables, net 29,015 27,253
Inventories 36,179 26,583
Prepaid expenses and other current
assets 2,893 2,347
Net deferred tax assets, current 6,575 4,464
Current assets of discontinued
operations 2,075 2,474
Total current assets 209,861 165,812
Long-term investments 24,181 18,491
Investment in unconsolidated
affiliate 2,683 2,646
Property and equipment, net 27,316 24,191
Intangible assets, net 1,491 1,200
Net deferred tax assets, non-current 3,413 1,557
Long-term assets of discontinued
operations 12 3,431
Other assets 107 52
Total assets $269,064 $217,380
======== ========
Current liabilities:
Accounts payable $7,277 $5,525
Accrued payroll and related expenses 11,094 4,372
Accrued taxes 4,829 1,144
Current liabilities of discontinued
operations 5,536 879
Other accrued liabilities 9,804 3,084
Deferred revenue 1,322 1,208
Warranty reserve 1,423 1,047
Total current liabilities 41,285 17,259
------ ------
Non-current liabilities:
Deferred revenue 3,219 4,035
Warranty reserve 1,733 821
Net deferred tax liabilities 310 -
Non-current liabilities of
discontinued operations - 16
Notes payable, less current portion 480 581
Other non-current liabilities 1,843 752
Total non-current liabilities 7,585 6,205
----- -----
Total liabilities 48,870 23,464
Shareholders' equity:
Common stock 132,559 124,603
Retained earnings 87,643 69,318
Accumulated other comprehensive loss (8) (5)
Total shareholders' equity 220,194 193,916
------- -------
Total liabilities and shareholders'
equity $269,064 $217,380
======== ========
Revenues by Geographic Region and Customer Group
(Unaudited)
(In thousands)
The following table presents our revenues by source for the three and twelve months ended March 31, 2015 and
2014.
Three Months
Ended Twelve Months Ended
March 31, March 31,
--------- ---------
Revenues by
Geographic
Region 2015 2014 2015 2014
----------- ---- ---- ---- ----
North America $41,776 $30,010 $163,308 $126,768
International 10,241 9,206 39,285 35,263
Total revenues $52,017 $39,216 $202,593 $162,031
======= ======= ======== ========
Three Months
Ended Twelve Months Ended
March 31, March 31,
--------- ---------
Revenues by
Customer Group 2015 2014 2015 2014
--------------- ---- ---- ---- ----
Medical Market $8,657 $7,069 $35,364 $28,134
Veterinary Market 42,564 31,381 164,018 130,859
Other 796 766 3,211 3,038
Total revenues $52,017 $39,216 $202,593 $162,031
======= ======= ======== ========
The following schedules present certain financial information to reflect the reclassification of the AVRL business unit within our veterinary market segment as discontinued operations:
Quarterly Reclassification of Fiscal Year 2015 for Discontinued Operations
(Unaudited)
(In thousands, except per share data)
First Second Third Fourth Fiscal 2015
Revenues $44,054 $50,471 $56,051 $52,017 $202,593
Cost of revenues 20,351 22,395 27,268 23,609 93,623
Gross profit 23,703 28,076 28,783 28,408 108,970
------ ------ ------ ------ -------
Operating expenses:
Research and
development 3,947 4,232 3,585 4,563 16,327
Sales and marketing 8,832 10,619 10,742 11,954 42,147
General and
administrative 2,908 3,797 4,770 4,717 16,192
Total operating
expenses 15,687 18,648 19,097 21,234 74,666
------ ------ ------ ------ ------
Income from
operations 8,016 9,428 9,686 7,174 34,304
Interest and other
income (expense),
net 47 (445) (197) (667) (1,262)
--- ---- ---- ---- ------
Income from
continuing
operations before
income tax
provision 8,063 8,983 9,489 6,507 33,042
Income tax
provision 2,989 3,271 3,274 2,705 12,239
----- ----- ----- ----- ------
Income from
continuing
operations 5,074 5,712 6,215 3,802 20,803
----- ----- ----- ----- ------
Discontinued operations:
Loss from
discontinued
operations, net of
tax (359) (312) (330) (153) (1,154)
Gain on sale of
discontinued
operations, net of
tax - - - 7,682 7,682
Net income $4,715 $5,400 $5,885 $1,331 $27,331
====== ====== ====== ====== =======
Net income (loss) per share
Basic
Continuing
operations $0.23 $0.25 $0.27 $0.17 $0.92
Discontinued
operations (0.02) (0.01) (0.01) 0.33 0.29
Basic net income
per share $0.21 $0.24 $0.26 $0.50 $1.21
===== ===== ===== ===== =====
Diluted
Continuing
operations $0.23 $0.25 $0.27 $0.17 $0.91
Discontinued
operations (0.02) (0.01) (0.01) 0.33 0.29
Diluted net income
per share $0.21 $0.24 $0.26 $0.50 $1.20
===== ===== ===== ===== =====
Weighted average shares outstanding
Basic 22,408 22,507 22,533 22,538 22,497
====== ====== ====== ====== ======
Diluted 22,637 22,690 22,756 22,870 22,787
====== ====== ====== ====== ======
Cash dividends
declared per share $0.10 $0.10 $0.10 $0.10 $0.40
===== ===== ===== ===== =====
Revenues by Customer Group
Medical Market $7,245 $7,616 $11,846 $8,657 $35,364
Veterinary Market 35,944 42,096 43,414 42,564 164,018
Other 865 759 791 796 3,211
Total revenues $44,054 $50,471 $56,051 $52,017 $202,593
======= ======= ======= ======= ========
Revenues by Product Category
Instruments $7,594 $10,105 $19,242 $11,708 $48,649
Consumables 34,286 38,138 34,232 37,790 144,446
Other products 2,137 2,191 2,539 2,481 9,348
----- ----- ----- ----- -----
Product revenues,
net 44,017 50,434 56,013 51,979 202,443
Development and
licensing revenue 37 37 38 38 150
--- --- --- --- ---
Total revenues $44,054 $50,471 $56,051 $52,017 $202,593
======= ======= ======= ======= ========
Quarterly Reclassification of Fiscal Year 2014 for Discontinued Operations
(Unaudited)
(In thousands, except per share data)
First Second Third Fourth Fiscal 2014
Revenues $40,956 $43,541 $38,318 $39,216 $162,031
Cost of revenues 19,586 21,365 18,903 18,227 78,081
Gross profit 21,370 22,176 19,415 20,989 83,950
------ ------ ------ ------ ------
Operating expenses:
Research and
development 3,173 3,418 3,596 3,460 13,647
Sales and marketing 9,378 9,276 8,052 8,036 34,742
General and
administrative 3,055 2,853 2,408 3,017 11,333
Total operating
expenses 15,606 15,547 14,056 14,513 59,722
------ ------ ------ ------ ------
Income from
operations 5,764 6,629 5,359 6,476 24,228
Interest and other
income (expense),
net 404 357 235 (2) 994
--- --- --- --- ---
Income from
continuing
operations before
income tax
provision 6,168 6,986 5,594 6,474 25,222
Income tax
provision 2,236 2,504 1,913 2,340 8,993
----- ----- ----- ----- -----
Income from
continuing
operations 3,932 4,482 3,681 4,134 16,229
----- ----- ----- ----- ------
Discontinued operations:
Loss from
discontinued
operations, net of
tax (703) (486) (459) (396) (2,044)
Gain on sale of
discontinued
operations, net of
tax - - - - -
Net income $3,229 $3,996 $3,222 $3,738 $14,185
====== ====== ====== ====== =======
Net income (loss) per share
Basic
Continuing
operations $0.18 $0.20 $0.16 $0.19 $0.73
Discontinued
operations (0.03) (0.02) (0.02) (0.02) (0.09)
Basic net income
per share $0.15 $0.18 $0.14 $0.17 $0.64
===== ===== ===== ===== =====
Diluted
Continuing
operations $0.17 $0.20 $0.16 $0.19 $0.72
Discontinued
operations (0.03) (0.02) (0.02) (0.02) (0.09)
Diluted net income
per share $0.14 $0.18 $0.14 $0.17 $0.63
===== ===== ===== ===== =====
Weighted average shares outstanding
Basic 22,229 22,306 22,271 22,272 22,270
====== ====== ====== ====== ======
Diluted 22,571 22,574 22,500 22,547 22,575
====== ====== ====== ====== ======
Revenues by Customer Group
Medical Market $6,038 $7,177 $7,850 $7,069 $28,134
Veterinary Market 34,158 35,605 29,715 31,381 130,859
Other 760 759 753 766 3,038
Total revenues $40,956 $43,541 $38,318 $39,216 $162,031
======= ======= ======= ======= ========
Revenues by Product Category
Instruments $8,675 $13,537 $8,161 $7,166 $37,539
Consumables 30,599 28,699 28,096 30,139 117,533
Other products 1,645 1,267 2,023 1,874 6,809
----- ----- ----- ----- -----
Product revenues,
net 40,919 43,503 38,280 39,179 161,881
Development and
licensing revenue 37 38 38 37 150
--- --- --- --- ---
Total revenues $40,956 $43,541 $38,318 $39,216 $162,031
======= ======= ======= ======= ========
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SOURCE Abaxis, Inc.
