ABAXIS INC 
By UNION CITY, Calif., Jan. 27, 2011 /PRNewswire/ -- Abaxis, Inc. (Nasdaq: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the fiscal quarter ended December 31, 2010.
Record quarterly highlights include:
-- Revenues of $35.9 million, up 16% over last year's comparable quarter.
-- North America revenues of $30.1 million, up 21% over last year's
comparable quarter.
-- Medical market sales of $8.1 million, up 57% over last year's comparable
quarter.
-- Total medical and veterinary instrument sales of $9.3 million, up 10%
over last year's comparable quarter.
Other quarterly highlights include:
-- Net income of $3.8 million, up 12% over last year's comparable quarter.
-- Veterinary market sales of $26.3 million, up 10% over last year's
comparable quarter.
-- Total medical and veterinary reagent disc sales of $19.5 million, up 20%
over last year's comparable quarter.
-- Total medical and veterinary reagent disc sales of 1.5 million units, up
21% over last year's comparable quarter.
-- Total medical and veterinary instrument sales of 1,261 units, up 4% over
last year's comparable quarter.
-- Cash, cash equivalents and investments as of December 31, 2010 of $104.6
million, compared to $93.2 million as of December 31, 2009.
Quarterly Results: For the fiscal quarter ended December 31, 2010, Abaxis reported revenues of $35.9 million, as compared with revenues of $31.0 million for the comparable period last year, an increase of 16 percent. Revenues from instrument sales, which include chemistry analyzers, hematology instruments, VSpro coagulation and specialty analyzers and i-STAT analyzers, increased by an aggregate of $828,000, or 10 percent, over the same period last year. Total medical and veterinary instrument sales were 1,261 units, up 4 percent over the same period last year. Revenues from consumables, which include reagent discs, hematology reagent kits, VSpro coagulation and specialty cartridges, i-STAT cartridges and heartworm rapid tests, increased by an aggregate of $4.4 million, or 22 percent, over the same period last year. Abaxis reported net income of $3.8 million for the fiscal quarter ended December 31, 2010, compared to $3.4 million for the same period last year. Abaxis' effective tax rate in the quarter ended December 31, 2010 was 35 percent, compared to 37 percent for the same period last year. Abaxis reported diluted net income per share of $0.17 (calculated based on 22,872,000 shares) for the three-month period ended December 31, 2010, compared to $0.15 per share (calculated based on 22,617,000 shares) for the same period last year.
Nine-Month Results: For the nine-month period ended December 31, 2010, Abaxis reported revenues of $106.1 million, as compared with revenues of $90.9 million for the comparable period last year, an increase of 17 percent. Revenues from instrument sales increased by an aggregate of $3.0 million, or 14 percent, over the same period last year. Total medical and veterinary instrument sales were 3,274 units, up 10 percent over the same period last year. Revenues from consumables increased by an aggregate of $13.1 million, or 21 percent, over the same period last year. Abaxis reported net income of $11.2 million, compared to $10.4 million for the same period last year. Abaxis' effective tax rate in the nine-month period ended December 31, 2010, was 38 percent, compared to 39 percent for the same period last year. Abaxis reported diluted net income per share of $0.49 (calculated based on 22,795,000 shares) for the nine-month period ended December 31, 2010, compared to $0.46 per share (calculated based on 22,549,000 shares) for the same period last year.
Other Reported Information: Total sales in the medical market for the third quarter of fiscal 2011 were $8.1 million, an increase of 57 percent compared to the same period last year. Medical sales worldwide, excluding sales to the U.S. government, during the third quarter of fiscal 2011 were $6.5 million, an increase of 36 percent compared to the same period last year. Total sales in the veterinary market for the third quarter of fiscal 2011 were $26.3 million, an increase of 10 percent compared to the same period last year. Veterinary reagent disc sales for the third quarter of fiscal 2011 were $14.3 million, an increase of 12 percent compared to the same period last year. Non-cash compensation expense recognized for share-based awards during the third quarter of fiscal 2011 was $1.3 million, compared to $1.4 million for the same period last year.
Clint Severson, chairman and chief executive officer of Abaxis, commented, "We are very pleased with the results of the third quarter of fiscal year 2011. Revenues and net income were up 16% and 12%, respectively, compared to last year's third quarter. We experienced strong double-digit growth in all product categories. Total medical market sales were up 57% compared to last year's third quarter. Piccolo units sold into the medical market, excluding sales to the U.S. government, increased 35% with medical reagent discs units sold, growing by 48%. In the veterinary market, total sales grew by 10% compared to the third quarter of fiscal 2010."
Mr. Severson continued, "We were particularly pleased with the progress made during the quarter in selling Piccolo instruments into the internal medicine, urgent care and family practice market segments. We believe that physician acceptance of point-of-care diagnostic testing is increasing as they come to more broadly appreciate the efficacy of treating their patients in a more timely manner, as well as the operational efficiencies rendered to their practices. As we seek to continue to penetrate these markets in the coming years and as these physicians integrate these instruments more fully into their everyday operations, the recurring revenue segment of our business will become an even larger contributor to our bottom line results. We believe this bodes well for Abaxis in the future."
Conference Call
Abaxis has scheduled a conference call to discuss its results at 4:15 p.m. Eastern Time on Thursday, January 27, 2011. 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 447608, through February 1, 2011. 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, markets and sells 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 Financial Measures
To supplement the financial statements presented in accordance with United States generally accepted accounting principles (GAAP), Abaxis uses operating income per share, a non-GAAP financial measure. 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 this non-GAAP financial measure, refer to the table captioned "Operating Income Per Share" included at the end of this release. Abaxis defines 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 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 losses or system failures with respect to Abaxis' facilities or manufacturing operations, fluctuations in quarterly operating results, dependence on sole suppliers, the market acceptance of Abaxis' 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 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, risks related to condition of the United States economy and other risks detailed under "Risk Factors" in Abaxis' Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010 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 Ended Nine Months Ended
December 31, December 31,
------------ ------------
2010 2009 2010 2009
---- ---- ---- ----
Revenues $35,906 $31,005 $106,136 $90,892
Cost of revenues 16,097 12,709 46,793 37,590
Gross profit 19,809 18,296 59,343 53,302
------ ------ ------ ------
Operating expenses:
Research and development 2,947 2,835 9,321 8,002
Sales and marketing 8,208 7,486 25,249 21,428
General and
administrative 2,820 2,552 7,596 7,739
Total operating expenses 13,975 12,873 42,166 37,169
------ ------ ------ ------
Income from operations 5,834 5,423 17,177 16,133
Interest and other
income (expense), net 46 (11) 698 795
--- --- --- ---
Income before income tax
provision 5,880 5,412 17,875 16,928
Income tax provision 2,045 1,982 6,711 6,545
----- ----- ----- -----
Net income $3,835 $3,430 $11,164 $10,383
====== ====== ======= =======
Net income per share:
Basic net income per
share $0.17 $0.16 $0.50 $0.47
===== ===== ===== =====
Diluted net income per
share $0.17 $0.15 $0.49 $0.46
===== ===== ===== =====
Shares used in the
calculation of net
income per share:
Weighted average common
shares outstanding -
basic 22,398 22,035 22,309 22,002
====== ====== ====== ======
Weighted average common
shares outstanding -
diluted 22,872 22,617 22,795 22,549
====== ====== ====== ======
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
December
31, March 31,
2010 2010
---- ----
Current assets:
Cash and cash equivalents $43,556 $27,857
Short-term investments 31,982 32,343
Receivables, net 25,271 23,714
Inventories 19,588 19,067
Prepaid expenses and other
current assets 5,249 1,588
Net deferred tax assets,
current 2,731 3,773
----- -----
Total current assets 128,377 108,342
Long-term investments 29,023 36,319
Property and equipment, net 16,949 15,544
Intangible assets, net 4,169 4,600
Net deferred tax assets,
non-current 2,701 2,935
Other assets 112 76
Total assets $181,331 $167,816
======== ========
Current liabilities:
Accounts payable $7,595 $9,404
Accrued payroll and related
expenses 5,163 5,615
Accrued taxes 250 400
Other accrued liabilities 1,408 1,256
Deferred revenue 955 1,157
Warranty reserve 772 1,183
---
Total current liabilities 16,143 19,015
------ ------
Non-current liabilities:
Deferred rent 375 163
Deferred revenue 1,766 1,359
Warranty reserve 95 160
---
Total non-current
liabilities 2,236 1,682
----- -----
Shareholders' equity:
Common stock 129,719 125,050
Retained earnings 33,233 22,069
------
Total shareholders' equity 162,952 147,119
------- -------
Total liabilities and
shareholders' equity $181,331 $167,816
======== ========
Operating Income Per Share
(In thousands, except per share data)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2010 2009 2010 2009
---- ---- ---- ----
Shares used in the
calculation of
operating income per
share:
Weighted average common
shares outstanding -
basic 22,398 22,035 22,309 22,002
Weighted average common
shares outstanding -
diluted 22,872 22,617 22,795 22,549
Operating income per
share -basic $0.26 $0.25 $0.77 $0.73
===== ===== ===== =====
Operating income per
share -diluted $0.26 $0.24 $0.75 $0.72
===== ===== ===== =====
Revenues by Geographic
Region
(In thousands)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2010 2009 2010 2009
---- ---- ---- ----
North America $30,068 $24,907 $87,385 $73,792
International 5,838 6,098 18,751 17,100
Total revenues $35,906 $31,005 $106,136 $90,892
======= ======= ======== =======
Revenues by Customer
Group
(In thousands)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2010 2009 2010 2009
---- ---- ---- ----
Medical Market $8,126 $5,172 $21,421 $17,280
Veterinary Market 26,283 23,889 79,750 67,396
Other 1,497 1,944 4,965 6,216
Total revenues $35,906 $31,005 $106,136 $90,892
======= ======= ======== =======
SOURCE Abaxis, Inc.
