Bioanalytical Systems, Inc. (NASDAQ:BASI) today announced
financial results for the fourth quarter and the full fiscal year
ended September 30, 2014.
“BASi’s operating financial performance for fiscal 2014 showed
significant improvement over last year, as revenue increased by
11.4%. Net income before the change in fair value of the warrant
liability and before goodwill impairment increased 29% to $222,000
for fiscal 2014, or $0.03 per diluted share, compared to $172,000,
or $0.02 per diluted share, for fiscal 2013. EBITDA for fiscal 2014
was a solid 9.8% of revenue, not as high as the 12.6% of revenue
reported for 2013, but reflective of targeted investments in
selling, research & development and growth initiatives which
will improve the Company’s ability to deliver profitable
growth.
Net cash provided by operating activities was $1,684,000 for
fiscal 2014, an increase of 5.6% versus net cash provided by
operating activities in the prior fiscal year of $1,594,000. As
previously announced, in May of 2014, the Company established a new
$7,500,000 credit facility substantially reducing borrowing costs
and enhancing the Company’s ability to implement reinvestment and
growth initiatives.” President & Chief Executive Officer,
Jacqueline Lemke, stated.
“The year over year gains clearly demonstrate the benefits of
our intense focus on three key areas: boosting operating
efficiency, driving top-line growth, and generating free cash flow.
The management team is building on BASi’s inherent strengths and
reputation for innovation and regulatory excellence to leverage our
costs and attain greater profits, while driving growth by
delivering enhanced customer value."
Fourth Quarter Results
For the three months ended September 30, 2014, revenues
increased 16.6% to $6,420,000 compared to $5,508,000 in the fourth
quarter of fiscal 2013.
Service revenue for the fourth quarter of fiscal 2014 increased
23.1% to $4,901,000 compared to $3,980,000 for the same period of
the prior fiscal year. This increase was primarily due to an
increase in the volume of Preclinical services studies offset
slightly by lower Bioanalytical services revenue.
Product revenue for the fourth quarter of fiscal 2014 amounted
to $1,519,000 and was comparable to revenue of $1,528,000 for the
fourth quarter of fiscal 2013. Growth in 2014 was hampered in part
by lower sales of certain analytical instruments. This impact was
partially offset by increased sales of Culex®Nxt in vivo sampling
systems.
Gross profit decreased to $1,821,000, or 28.4% of revenue, in
the fourth quarter of fiscal 2014 compared to $1,909,000, or 34.7%
of revenue, during the comparable period last fiscal year,
primarily reflecting the change in the mix of business between
quarters.
Operating expenses for the fourth quarter of fiscal 2014
increased to $2,310,000 compared to $1,811,000 during the fourth
quarter fiscal 2013, primarily due to the recognition of a goodwill
impairment charge of $374,000 described below and planned increases
in business development and general and administrative
expenses.
Operating loss for the fourth quarter of fiscal 2014 amounted to
$(489,000), which includes the goodwill impairment charge of
$374,000. Excluding the impairment charge, the operating loss
amounted to $(115,000) compared to operating income of $98,000 for
the fourth quarter of fiscal 2013 primarily due to the relative mix
of larger, more expensive studies than in prior quarters.
Net loss was $(404,000) for the fourth quarter of fiscal 2014,
or $(0.05) per diluted share, compared to net income of $252,000,
or $0.03 per diluted share, for the fourth quarter of fiscal 2013.
Excluding the change in fair value of the warrant liability and the
goodwill impairment charge in fiscal 2014, net loss was $(207,000)
for the fourth quarter of fiscal 2014, or $(0.02) per diluted
share, compared to a net loss of $(56,000), or $(0.01) per diluted
share, for the fourth quarter of fiscal 2013.
EBITDA for the fourth quarter of fiscal 2014 amounted to
$309,000 compared to EBITDA for the fourth quarter of fiscal 2013
of $547,000.
Full Year Results
For the twelve months ended September 30, 2014, revenues
increased 11.4% to $24,584,000 from $22,068,000 in fiscal 2013.
Service revenue for fiscal 2014 increased 15.8% to $19,097,000
compared to $16,473,000 for fiscal 2013. This increase was
primarily due to an increase in the volume of Preclinical services
studies partially offset by lower Bioanalytical services
revenue.
Product revenue decreased 1.9% for fiscal 2014 to $5,487,000 as
compared to $5,595,000 for fiscal 2013. Results in 2014 were
hampered in part by lower sales of certain analytical instruments.
This impact was partially offset by increased sales of Culex® Nxt,
in vivo sampling systems.
Gross profit for fiscal 2014 increased 12.9% to $7,962,000, or
32.4% of revenue, compared to $7,055,000, or 32.0% of revenue, for
the prior fiscal year. The main reason for the increase was our
ability to leverage the higher revenue earned in fiscal 2014 over
our fixed cost base as well as strict spending controls during the
fiscal year.
Operating income for fiscal 2014 amounted to $334,000 which
includes the goodwill impairment charge of $374,000. Excluding the
impairment charge, operating income amounted to $708,000 compared
to $830,000 for the same period of the prior fiscal year. The
benefit of higher sales for the fiscal year was more than offset by
higher business development, engineering costs and certain one-off
charges.
Net loss for fiscal 2014 was $(1,070,000), or $(0.13) per
diluted share, compared to net income of $773,000, or $0.09 per
diluted share, for fiscal 2013. Excluding the change in fair value
of the warrant liability and the goodwill impairment charge, net
income was $222,000 for fiscal 2014, or $0.03 per diluted share,
compared to net income of $172,000, or $0.02 per diluted share, for
fiscal 2013.
EBITDA for fiscal 2014 was $2,398,000 compared to EBITDA for
fiscal 2013 of $2,785,000.
Cash Provided by Operating Activities
Cash provided by operating activities was $1,726,000 for fiscal
2014, up 8.3% from fiscal 2013. The Company had $981,000 in cash
and cash equivalents at September 30, 2014. During 2014,
proceeds from borrowings net of repayments, cash on hand and cash
provided by operations funded capital expenditures for plant,
machinery and equipment of approximately $490,000.
Goodwill Impairment Charge
The Company performed its annual goodwill impairment test for
all of its reporting units at September 30, 2014. The estimated
fair value of our Vetronics reporting unit, which is part of the
Products Segment, was less than its related book value leading to a
determination that its goodwill balance was impaired. The
impairment results from rates of growth, earnings and cash flow
expectations for future performance that were below the Company’s
previous projections. In late fiscal 2014, the Company began
shifting its market focus and will no longer actively market the
Vetronics product offering. As a service to its existing customers,
we will continue to service the units in the field. Accordingly,
step two of the goodwill impairment test was completed for the
Vetronics reporting unit, which resulted in an impairment charge
totaling $374,000 in the fourth quarter of fiscal 2014. There was
no indication of impairment for the Bioanalytical services and
Preclinical services reporting units as of September 30, 2014.
Earnings Conference Call
BASi has scheduled a conference call at 11:00 a.m. EDT this
morning to discuss its results for the quarter. To participate in
the call, dial 866.366.0711, passcode #28895917 at least five
minutes before the start of the call. A simultaneous webcast may be
accessed from the Investors tab at www.BASInc.com. The webcast will
be available for replay after 2:00 p.m. EDT at this same Internet
address. For a telephone replay, dial 888.286.8010, passcode
#11783865 after 2:00 p.m. EDT.
Non-GAAP to GAAP Reconciliation
This press release contains financial measures that are not
calculated in accordance with generally accepted accounting
principles in the United States (GAAP). The non-GAAP financial
measures are net income and net income per basic and diluted share,
excluding goodwill impairment charges and the income or expense
from the change in the warrant liability, EBITDA and operating
income or loss excluding impairment charges, in each case for the
fourth quarter and fiscal years 2014 and 2013. EBITDA refers to
financial performance measures that exclude certain income
statement line items, such as interest, taxes, depreciation, and
amortization. EBITDA may also exclude certain non-cash or one-time
expenses, such as stock-based compensation, goodwill impairment
charges and the income or expense from the change in the warrant
liability.
The non-GAAP financial information should be considered
supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Management,
however, believes that these non-GAAP financial measures, when used
in conjunction with the results presented in accordance with GAAP,
may provide a more complete understanding of the Company's results
and may facilitate a fuller analysis of the Company's results,
particularly in evaluating performance from one period to
another.
Management has chosen to provide this supplemental information
to investors, analysts, and other interested parties to enable them
to perform additional analyses of results and to illustrate the
results giving effect to the non-GAAP adjustments shown in the
reconciliation. Management strongly encourages investors to review
the Company's consolidated financial statements and publicly filed
reports in their entirety and cautions investors that the non-GAAP
measures used by the Company may differ from similar measures used
by other companies, even when similar terms are used to identify
such measures.
About Bioanalytical Systems, Inc.
BASi is a pharmaceutical development company providing contract
research services and monitoring instruments to the world's leading
drug development companies and medical research organizations. The
Company focuses on developing innovative services and products that
increase efficiency and reduce the cost of taking a new drug to
market. Visit www.BASinc.com for more information about BASi.
This release contains forward-looking
statements that are subject to risks and uncertainties including,
but not limited to, risks and uncertainties related to changes in
the market and demand for our products and services, the
development, marketing and sales of products and services, changes
in technology, industry standards and regulatory standards, and
various market and operating risks detailed in the Company's
filings with the Securities and Exchange Commission. BASi assumes
no obligation to update any forward-looking statement. Actual
results may vary, and could differ materially, from those
anticipated, estimated, projected or expected in these
forward-looking statements for a number of reasons, including,
among others, the risk factors disclosed in the Company's most
recent Annual Report, as filed, with the Securities and Exchange
Commission.
(SEE BELOW FOR CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS)
BIOANALYTICAL SYSTEMS, INC
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share
amounts)
(Unaudited) Three Months Ended
Years Ended September 30, September 30, 2014
2013 2014 2013 Service revenue $
4,901 $ 3,980 $ 19,097 $ 16,473 Product revenue 1,519
1,528 5,487 5,595 Total revenue 6,420 5,508
24,584 22,068 Cost of service revenue 3,868 2,907 13,889
12,416 Cost of product revenue 731 692 2,733
2,597 Total cost of revenue 4,599 3,599 16,622 15,013
Gross profit 1,821 1,909 7,962 7,055 Operating
expenses: Selling 341 387 1,656 1,366 Research and development 177
122 658 454 General and administrative
Impairment Charge
1,418
374
1,302
-
4,940
374
4,405
-
Total operating expenses 2,310 1,811 7,628 6,225
Operating (loss) income (489) 98 334 830 Interest expense
(80) (157) (488) (649) Change in fair value of warrant liability
decrease (increase) 177 308 (918) 601 Other income 3
1 9 7 (Loss) income before income taxes (389)
250 (1,063) 789 Income tax (benefit) expense 15
(2) 7 16 Net (loss) income $ (404) $
252 $ (1,070) $ 773 Other comprehensive income (loss): Fair
value adjustment of interest rate swap 20 -- (21) -- Foreign
currency translation adjustment 61 63 (4)
3 Comprehensive (loss) income $ (323) $ 189 $ (1,095)
$ 776 Basic net (loss) income per share $ (0.05) $ 0.03 $
(0.13) $ 0.10 Diluted net (loss) income per share $ (0.05) $ 0.03 $
(0.13) $ 0.09 Weighted common shares outstanding: Basic
8,074 7,687 7,960 7,664 Diluted 8,074 8,432 7,960 8,371
BIOANALYTICAL SYSTEMS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except share amounts)
(Unaudited)
Sep. 30, Sep. 30,
2014 2013
Assets Current assets:
Cash and cash equivalents $ 981 $ 1,304 Accounts receivable Trade,
net 2,557 3,621 Unbilled revenues and other 878 691 Inventories
1,564 1,379 Prepaid expenses 675 238 Total
current assets 6,655 7,233 Property and equipment, net
15,949 16,913 Goodwill 1,009 1,383 Debt issue costs 122 21 Other
assets 39 47 Total assets $ 23,774 $ 25,597
Liabilities and shareholders’ equity
Current liabilities: Accounts payable $ 2,672 $ 3,584 Accrued
expenses 1,842 1,689 Customer advances 2,990 2,815 Income tax
accruals 20 30 Revolving line of credit 202 1,415 Fair value of
warrant liability 676 612 Current portion of capital lease
obligation 279 268 Current portion of long-term debt 786
613 Total current liabilities 9,467 11,026
Fair value of interest rate swap 21 - Capital lease
obligation, less current portion 298 471 Long-term debt, less
current portion 4,452 4,641 Total liabilities
14,238 16,138 Commitments and contingencies
Shareholders’ equity: Preferred shares, authorized 1,000,000
shares, no par value: 1,185 Series A shares at $1,000 stated value
issued and outstanding at September 30, 2014 and 1,335 at September
30, 2013 1,185 1,335 Common shares, no par value: authorized
19,000,000 shares; 8,075,335 issued and outstanding at September
30, 2014 and 7,703,891 at September 30, 2013 1,980 1,887 Additional
paid-in capital 21,154 19,925 Accumulated deficit (14,790) (13,720)
Accumulated other comprehensive income 7 32
Total shareholders’ equity 9,536 9,459 Total
liabilities and shareholders’ equity $ 23,774 $ 25,597
BIOANALYTICAL SYSTEMS, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands)
(Unaudited)
Years Ended September 30, 2014 2013
Cash flows from
operating activities: Net (loss) income $ (1,070) $ 773 Summary
of non-cash adjustments 2,919 1,298 Changes in operating assets and
liabilities (165) (477) Net cash provided by
operating activities 1,684 1,594
Cash flows from
investing activities: Capital expenditures (490) (8) Other
- 20 Net cash (used in) provided by investing
activities (490) 12
Cash flows from financing
activities: Net cash used in financing activities (1,513)
(1,022) Effect of exhange rate changes on cash and cash
equivalents (4) (1) Net change in cash and cash
equivalents (323) 583 Cash and cash equivalents, beginning of
period 1,304 721
Cash and cash equivalents, end of
period $ 981 $ 1,304
BIOANALYTICAL SYSTEMS, INC.
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME (LOSS) (In
thousands) (Unaudited)
Three Months Ended Years Ended
September 30, September 30, 2014 2013 2014 2013 GAAP
Operating income (loss) $ (489) $
98
$ 334 $ 830 Add back: Goodwill Impairment Charge 374
- 374 - Non-GAAP Operating income
(loss) $ (115) $ 98 $ 708 $ 830
BIOANALYTICAL
SYSTEMS, INC. RECONCILIATION OF GAAP TO NON-GAAP EARNINGS (In
thousands)
(Unaudited)
Three Months Ended Years Ended September 30,
September 30, 2014 2013 2014 2013 GAAP Net income (loss) $
(404) $ 252 $ (1,070) $ 773 Add back: Interest expense 80
157 488 649 Income taxes (benefit) 15 (2) 7 16 Depreciation and
amortization
Goodwill Impairment Charge
402
374
410
-
1,597
374
1,723
-
Change in fair value of warrant liability (177) (308) 918 (601)
Stock option expense 19 38 84 225
EBITDA $ 309 $ 547 $ 2,398 $ 2,785 EBITDA - Earnings
before interest, taxes, depreciation, amortization, stock option
expenses, impairment charges and the change in the fair value of
warrant liability.
Reconciliation of GAAP to NON-GAAP
Basic and Diluted Net Income (Loss) Per Share (In thousands)
(Unaudited)
Three Months Ended Years Ended September 30, September 30,
2014 2013 2014 2013 GAAP Net income (loss) $ (404) $ 252 $
(1,070) $ 773 Adjust for: Change in fair value of warrant
liability Increase (Decrease)
Goodwill Impairment Charge
(177)
374
(308)
-
918
374
(601)
-
Non-GAAP Net income (loss) $ (207) $ (56) $ 222 $ 172
GAAP Basic Net Income (loss) per share
$
(0.05)
$
0.03
$
(0.13)
$
0.10
Adjust for: Change in fair value of warrant liability
- Increase (Decrease)
Goodwill Impairment Charge
(0.02)
0.05
(0.04)
-
0.11
0.05
(0.08)
-
Non-GAAP Basic Net Income (loss) per share $ (0.02) $ (0.01)
$ 0.03 $ 0.02
GAAP Diluted Net Income (loss) per
share
$
(0.05)
$
0.03
$
(0.13)
$
0.09
Adjust for: Change in fair value of warrant liability
- Increase (Decrease)
Goodwill Impairment Charge
(0.02)
0.05
(0.04)
-
0.11
0.05
(0.07)
-
Non-GAAP Diluted Net Income (loss) per share $ (0.02) $
(0.01) $ 0.03 $ 0.02 Weighted average common shares
outstanding Basic 8,074 7,687 7,960
7,664 Diluted 8,074 8,432 7,960 8,371
Bioanalytical Systems, Inc.Jeffrey Potrzebowski,
765-497-8409Chief Financial Officer & Vice President of
Financejpotrzebowski@BASinc.com
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