News Column

Abaxis Reports 3Q Financial Results

February 4, 2014

Abaxis reported financial results for the third fiscal quarter ended Dec. 31, 2013 . In a release on Jan. 30 , the Company said Quarterly Results: For the fiscal quarter ended Dec. 31, 2013 , Abaxis reported revenues of $40.8 million , as compared with revenues of $49.8 million for the comparable period last year, a decrease of 18 percent. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i- STAT analyzers, decreased by $5.8 million , or 42 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, decreased by $4.7 million , or 14 percent, compared to the same period last year. Abaxis reported net income of $3.2 million for the fiscal quarter ended Dec. 31, 2013 , compared to $5.0 million for the quarter ended Dec. 31, 2012 . Abaxis' effective tax rate in the quarter ended Dec. 31, 2013 was 34 percent, compared to 38 percent for the same period last year. Abaxis reported diluted net income per share of $0.14 (calculated based on 22,500,000 shares) for the three-month period ended Dec. 31, 2013 , compared to $0.22 per share (calculated based on 22,341,000 shares) for the same period last year. Nine-Month Results: For the nine-month period ended Dec. 31, 2013 , Abaxis reported revenues of $129.8 million , as compared with revenues of $136.1 million for the comparable period last year, a decrease of 5 percent. Revenues from instrument sales decreased by $5.1 million , or 14 percent, over the same period last year. Revenues from consumables decreased by $4.3 million , or 5 percent, over the same period last year. The company reported net income of $10.4 million for the nine-month period ended Dec. 31, 2013 , compared to $20.8 million (which includes a gain from legal settlement of $17.3 million ) for the nine-month period ended Dec. 31, 2012 . The company's effective tax rate in the nine-month period ended Dec. 31, 2013 , was 35 percent, compared to 38 percent for the same period last year. The company reported diluted net income per share of $0.46 (calculated based on 22,572,000 shares) for the nine- month period ended Dec. 31, 2013 , compared to $0.93 per share (calculated based on 22,316,000 shares) for the same period last year. Other Reported Information: Total sales in the medical market for the third quarter of fiscal 2014 were $7.9 million , a decrease of 13 percent compared to the same period last year. Total sales in the veterinary market for the third quarter of fiscal 2014 were $32.2 million , a decrease of 19 percent, compared to the same period last year. Total medical and veterinary reagent disc sales for the third quarter of fiscal 2014 were $22.4 million , a decrease of 16 percent, compared to the same period last year. Total unit sales of medical and veterinary reagent discs for the third quarter of fiscal 2014 were 1.8 million units, a decrease of 15 percent, compared to the same period last year. Total medical and veterinary instrument sales for the third quarter of fiscal 2014 were $8.2 million , a decrease of 42 percent, compared to the same period last year. Total unit sales of medical and veterinary instruments for the third quarter of fiscal 2014 were 1,249 units, a decrease of 31 percent, compared to the same period last year. Non-cash compensation expense recognized for share-based awards during the third quarter of fiscal 2014 was $1.6 million , compared to $1.8 million for the same period last year. Abaxis' revenues in the North America veterinary market for the third quarter of fiscal 2014 decreased by 25 percent, or $8.4 million , as compared to the third quarter of fiscal 2013. The decrease was primarily due to decreased orders in the third quarter of fiscal 2014 from Abaxis' largest distributors in this market, resulting from excess channel inventory created during the second half of fiscal 2013 and first half of fiscal 2014. Such excess inventory was the result of our distributors not selling Abaxis products to end customers at the same rate as it was purchasing products from us. Clint Severson , chairman and chief executive officer of Abaxis , said, "While the results of the third quarter of fiscal 2014 are not where we would like them to be, we remain confident that our distribution partners will begin to drive revenue growth toward our historical levels, and beyond, as they increasingly integrate our products into their sales process. As is typically the case in establishing new distribution partnerships, initial stocking orders that are placed to build inventories need to be worked through before a normalized flow of ongoing re-orders takes hold. We believe the overall market for our veterinary and medical products has continued to grow, but our strategy of increasing demand for Abaxis products through various measures, including the expansion of our distribution partners, has not led to the increased demand for Abaxis products in the veterinary clinics we anticipated in 2013. As we discussed in our earnings call last quarter, during the six months ended Sept. 30, 2013 , our sales to our veterinary distributors were significantly greater than the pace at which our veterinary distributors have been able to sell Abaxis products through to clinics. We believe that product inventories at our distribution partners are being worked down and we believe we are reaching a point where inventories will need to be replenished in an orderly process. As I have said previously, Abbott Point of Care and MWI Veterinary Supply are leaders in their respective markets and they provide broadly expanded opportunities for Abaxis products to penetrate markets that were previously very difficult for us to enter. We are dedicated to proactively working with our partners to broadly embed our products in their well-developed markets. "We are succeeding in leveraging the Abaxis brand to attract the reference laboratory business of our point-of-care veterinary customers to our AVRL. They are allowing us the opportunity to earn their reference laboratory business because of the accuracy, timeliness and cost effectiveness of the Abaxis point-of-care products that they maintain in their offices. Revenues from AVRL increased 80 percent in the third quarter of fiscal 2014 compared to last fiscal year's third quarter. We are making consistent progress and are excited with the opportunities ahead. In our Europe market, revenues increased by 16 percent, or $976,000 , in the third quarter of fiscal 2014, as compared to last fiscal year's third quarter as we experience strength in both the medical and veterinary markets. Abaxis also continues to operate on a solid financial foundation with cash, cash equivalents and short- and long-term investments exceeding $112 million . We firmly believe that our strategy to partner with industry leaders in the markets in which we compete will increasingly gain traction in delivering the results we expect. With leading-edge products and industry leading distribution partners we are confident that our strategy can position Abaxis as the preferred point-of-care solutions provider." Abaxis develops, manufactures, markets and sells portable blood analysis systems. ((Comments on this story may be sent to newsdesk@closeupmedia.com ))


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Health & Beauty Close - Up


Story Tools