Abaxis Reports Financial Performance for the Third Quarter of Fiscal 2017, Declares Quarterly Cash Dividend
UNION CITY, Calif., Jan. 26, 2017 /PRNewswire/ -- Abaxis, Inc. (NasdaqGS: ABAX), a global diagnostics company manufacturing point-of-care blood analysis instruments and consumables for the medical and veterinary markets worldwide, today reported financial results for the third fiscal quarter ended December 31, 2016.
Third quarter results include:
- Revenues from continuing operations of $52.8 million, flat compared to last year's comparable quarter and consistent with the company's previously-announced estimate for the quarter.
- Veterinary market revenues of $43.2 million, up 6% over last year's comparable quarter.
- Revenues from sales of consumables, which include reagent discs, hematology reagent kits, VSpro specialty cartridges, i-STAT cartridges and rapid tests, of $40.4 million, up 5% over last year's comparable quarter.
- Revenues attributable to customers in Europe, including sales from our United Kingdom subsidiary, of $8.0 million, up 6% over last year's comparable quarter. Revenues from our United Kingdom subsidiary of $2.4 million, flat, compared to last year's comparable quarter, and up 22% on a constant currency basis compared to last year's comparable quarter.
- Gross margin of 56%, consistent with the company's previously-announced estimate for the quarter.
- Income from continuing operations before income tax provision of $10.8 million, consistent with the company's previously-announced estimate for the quarter.
- Cash, cash equivalents and investments as of December 31, 2016 of $159.7 million.
- Dividends of $3.2 million, or $0.14 per share, paid during the third quarter of fiscal 2017.
Management Discussion
Clint Severson, chairman and chief executive officer of Abaxis, said, "As previously announced, revenues for the quarter were essentially flat at $52.8 million compared to last year's third quarter, and increased 4% for the nine-month period ended December 31, 2016 as compared to last year's comparable period. Results for the quarter were negatively impacted by many factors, including foreign currency exchange rates, which reduced revenues by approximately $0.7 million and the reduction of medical and veterinary orders from distributors including Abbott Point of Care, Inc. and a difficult comparison for the medical business due to a large sale of Piccolo Xpress instruments in the People's Republic of China in the prior year quarter. On the positive side, we are pleased our consumable revenues increased by 5% and accounted for 76% of total revenues in the third quarter as compared to last year's comparable quarter. As a result, veterinary sales increased 6% and medical sales were down 21% for the third quarter of fiscal 2017 compared to last year's comparable quarter."
Despite these challenges, our business model has continued to generate strong cash flow, which has allowed us to continue to invest and work on a number of key initiatives to drive future medical and veterinary sales. Importantly, as part of our product portfolio expansion strategies, we plan to showcase several new products for our animal health business at the upcoming North American Veterinary Conference in early February 2017. Among these will be a new point-of-care urine sediment analyzer that we expect to launch into the veterinary market within twelve months, as well as a new point-of-care urine chemistry analyzer that we expect to launch before mid-year. We view both of these as significant additions to our product portfolio that have the potential to benefit our long-term growth."
Mr. Severson concluded, "I am pleased our strong financial foundation allowed us to reward our shareholders with a quarterly cash dividend of $0.14 per common share during the third quarter. We had $159.7 million in cash, cash equivalents and short- and long-term investments at December 31, 2016. Looking forward, we are highly focused on driving operational efficiencies, investing in key growth initiatives and driving both top and bottom line growth."
Dividend Declared
Abaxis today announced that its Board of Directors declared a quarterly cash dividend of $0.14 per common share, to be paid on March 15, 2017, to all shareholders of record as of the close of business on March 1, 2017.
Results of Operations
Quarterly Results
For the fiscal quarter ended December 31, 2016, Abaxis reported revenues from continuing operations of $52.8 million, as compared with revenues of $52.9 million for the comparable period last year. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers, decreased by $2.3 million, or 19%, 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 $1.9 million, or 5%, over the same period last year. Abaxis reported income from continuing operations of $10.8 million and net income from continuing operations of $6.9 million for the fiscal quarter ended December 31, 2016, compared to $11.3 million and $8.0 million for the fiscal quarter ended December 31, 2015, respectively. Abaxis' effective tax rate in the fiscal quarter ended December 31, 2016 was 36%, compared to 31% for the same period last year. Abaxis reported diluted net income per share of $0.30 (calculated based on 22,789,000 shares) for the fiscal quarter ended December 31, 2016, compared to $0.35 per share (calculated based on 22,889,000 shares) for the same period last year.
Nine-Month Results
For the nine-month period ended December 31, 2016, Abaxis reported revenues from continuing operations of $169.0 million, as compared with revenues of $161.9 million for the comparable period last year, an increase of 4%. Revenues from instrument sales decreased by $2.6 million, or 8%, compared to the same period last year. Revenues from consumables sales, increased by $8.6 million, or 7%, over the same period last year. Abaxis reported income from continuing operations of $33.3 million and net income from continuing operations of $25.2 million (which includes a gain from sale of an equity method investment of $3.8 million after tax) for the nine-month period ended December 31, 2016, compared to $34.0 million and $22.8 million for the nine-month period ended December 31, 2015, respectively. Abaxis' effective tax rate in the nine-month period ended December 31, 2016 was 36%, compared to 34% for the same period last year. Abaxis reported diluted net income per share of $1.11 (calculated based on 22,753,000 shares) for the nine-month period ended December 31, 2016, compared to $1.00 per share (calculated based on 22,884,000 shares) for the same period last year.
Other Reported Information
Non-cash compensation expense recognized for share-based awards during the three-months ended December 31, 2016 and 2015 was $2.4 million and $2.4 million, respectively. Abaxis paid $3.2 million in cash dividends to shareholders during the third quarter of fiscal 2017.
Conference Call
Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, January 26, 2017. Participants can dial (844) 855-9498 or (412) 317-5496 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 10099901, through February 2, 2017. 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.