UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

July 23, 2015
Date of Report (Date of Earliest Event Reported):

ABAXIS, INC.
(Exact name of registrant as specified in its charter)

California
000-19720
77-0213001
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

3240 Whipple Road
Union City, CA 94587
(Address of principal executive offices, including zip code)

(510) 675-6500
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 


Item 2.02
Results of Operations and Financial Condition.
 
The information in this Item 2.02, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or the Exchange Act, or otherwise subject to the liabilities of that Section.  The information in this Item 2.02 shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On July 23, 2015, Abaxis, Inc. announced its financial results for the first fiscal quarter ended June 30, 2015 and certain other information.  A copy of Abaxis’ press release announcing these financial results and certain financial information is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Item 8.01
Other Events.

Abaxis today announced that its Board of Directors declared a quarterly dividend of $0.11 per common share, to be paid on September 17, 2015, to all shareholders of record as of the close of business on September 3, 2015.  A copy of the Company’s press release announcing the dividend is attached hereto as Exhibit 99.1.

Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is furnished with this report on Form 8-K:

Exhibit No.
Description
   
99.1
Press release dated July 23, 2015
 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 23, 2015
 
   
 
Abaxis, Inc.
     
 
By:
/s/ Alberto R. Santa Ines
   
Alberto R. Santa Ines
   
Vice President, Finance and Chief Financial Officer
 
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Abaxis, Inc.

INDEX TO EXHIBITS

Exhibit No.
Description
   
Press release dated July 23, 2015
 
 
4




Exhibit 99.1
 
 
Contact:
 
Abaxis, Inc.
Lytham Partners, LLC
Clint Severson, Chief Executive Officer
Joe Dorame, Robert Blum and Joe Diaz
510-675-6500
602-889-9700

Abaxis Reports Financial Performance for the First Quarter of Fiscal 2016
Declares Quarterly Cash Dividend

Union City, California – July 23, 2015 - Abaxis, Inc. (NasdaqGS: ABAX), a medical products company manufacturing point-of-care blood analysis systems, today reported financial results for the first fiscal quarter ended June 30, 2015.

First quarter overview:
Revenues from continuing operations of $53.1 million, up 21% over last year’s comparable quarter.
Diluted EPS from continuing operations of $0.31, up 35% over last year’s comparable quarter.
Diluted EPS, including discontinued operations, of $0.31, up 48% over last year’s comparable quarter.

Revenues highlights:
North America revenues from continuing operations of $42.3 million, up 21% over last year’s comparable quarter.
International revenues of $10.8 million, up 18% over last year’s comparable quarter.
Medical market revenues of $8.7 million, up 20% over last year’s comparable quarter.
Veterinary market revenues of $43.6 million, up 21% over last year’s comparable quarter.
Total medical and veterinary instrument revenues of $8.7 million, up 15% over last year’s comparable quarter.
Total medical and veterinary instrument sales of 1,322 units, up 23% over last year’s comparable quarter.
Total medical and veterinary reagent disc revenues of $30.4 million, up 13% over last year’s comparable quarter.
Total medical and veterinary reagent disc sales of 2.4 million units, up 15% over last year’s comparable quarter.

Other financial highlights:
Gross profit from continuing operations of $29.4 million, up 24% over last year’s comparable quarter.
Net income from continuing operations of $7.0 million, up 38% over last year’s comparable quarter.
Cash, cash equivalents and investments of $153.0 million as of June 30, 2015.
Abaxis paid dividends of $2.5 million or $0.11 per share during the first quarter of fiscal 2016.

Clint Severson, chairman and chief executive officer of Abaxis, commented, “We are off to a strong start in fiscal year 2016, as we achieved double-digit growth in our total instrument and consumable revenues within our portfolio of point of care diagnostic products.  Revenues for the quarter increased 21 percent, driven by total veterinary sales and total medical sales increases of 21 percent and 20 percent, respectively.  Domestic and international sales both increased by double-digit percentages versus the first quarter last year.  We are pleased with the on-going progress made by our sales team and our distribution channel partners.  We continue to grow our business on a consistent basis and we are operating in a highly effective and cost efficient manner.”
 
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Mr. Severson continued, “We are particularly pleased with the continued growth in our recurring revenues up 22 percent year over year, primarily due to expanding sales of our consumable products in both the veterinary and medical markets, which resulted in a record of 2.4 million total reagent disc unit sales during the first quarter.  This is a testament to the critically important role that our devices play in accurately diagnosing the conditions of our customers’ patients.  The speed, accuracy and reliability of Abaxis products are second to none and we are proud of our position within in the industry as one of the leaders in the market.  We remain dedicated to developing new innovative diagnostic products and operating the business in a prudent manner, while rewarding our shareholders with a quarterly dividend and maintaining a solid cash position of $153.0 million.”
 
Dividend Declared

Abaxis today announced that its Board of Directors declared a quarterly dividend of $0.11 per common share, to be paid on September 17, 2015, to all shareholders of record as of the close of business on September 3, 2015.

Results of Continuing Operations

Quarterly Results

For the fiscal quarter ended June 30, 2015, Abaxis reported revenues from continuing operations of $53.1 million, as compared with revenues of $44.1 million for the comparable period last year, an increase of 21 percent.  Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers, increased by $1.1 million, or 15 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 $7.5 million, or 22 percent, compared to the same period last year.  Abaxis reported net income from continuing operations of $7.0 million for the fiscal quarter ended June 30, 2015, compared to $5.1 million for the fiscal quarter ended June 30, 2014.  Abaxis’ effective tax rate in the quarter ended June 30, 2015 was 36 percent, compared to 37 percent for the same period last year.  Abaxis reported diluted net income per share from continuing operations of $0.31 (calculated based on 22,879,000 shares) for the three-month period ended June 30, 2015, compared to $0.23 per share (calculated based on 22,637,000 shares) for the same period last year.

Other Reported Information

Non-cash compensation expense recognized for share-based awards during the first quarter of fiscal 2016 was $2.8 million, compared to $2.0 million for the same period last year.  Abaxis paid $2.5 million in cash dividends to shareholders during the first quarter of fiscal 2016.

Conference Call

Abaxis has scheduled a conference call to discuss its financial results at 4:15 p.m. Eastern Time on Thursday, July 23, 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 10069542, through July 30, 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.
 

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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
 
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ABAXIS, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)

   
Three Months Ended
June 30,
 
   
2015
   
2014
 
Revenues
 
$
53,090
   
$
44,054
 
Cost of revenues
   
23,698
     
20,351
 
Gross profit
   
29,392
     
23,703
 
Operating expenses:
               
Research and development
   
4,723
     
3,947
 
Sales and marketing
   
10,586
     
8,832
 
General and administrative
   
3,458
     
2,908
 
Total operating expenses
   
18,767
     
15,687
 
Income from operations
   
10,625
     
8,016
 
Interest and other income (expense), net
   
359
     
47
 
Income from continuing operations before income tax provision
   
10,984
     
8,063
 
Income tax provision
   
3,989
     
2,989
 
Income from continuing operations
   
6,995
     
5,074
 
Discontinued operations
               
Loss from discontinued operations, net of tax
   
-
     
(359
)
Net income
 
$
6,995
   
$
4,715
 
                 
Net income (loss) per share:
               
Basic
               
Continuing operations
 
$
0.31
   
$
0.23
 
Discontinued operations
   
-
     
(0.02
)
Basic net income per share
 
$
0.31
   
$
0.21
 
Diluted
               
Continuing operations
 
$
0.31
   
$
0.23
 
Discontinued operations
   
-
     
(0.02
)
Diluted net income per share
 
$
0.31
   
$
0.21
 
Shares used in the calculation of net income per share:
               
Weighted average common shares outstanding - basic
   
22,624
     
22,408
 
Weighted average common shares outstanding - diluted
   
22,879
     
22,637
 
Cash dividends declared per share
 
$
0.11
   
$
0.10
 

4

ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)

   
June 30,
2015
   
March 31,
2015
 
Current assets:
       
Cash and cash equivalents
 
$
77,878
   
$
107,015
 
Short-term investments
   
51,366
     
26,109
 
Receivables, net
   
29,245
     
29,015
 
Inventories
   
33,984
     
36,179
 
Prepaid expenses and other current assets
   
2,563
     
2,893
 
Net deferred tax assets, current
   
6,577
     
6,575
 
Current assets of discontinued operations
   
597
     
2,075
 
Total current assets
   
202,210
     
209,861
 
Long-term investments
   
23,718
     
24,181
 
Investment in unconsolidated affiliate
   
2,650
     
2,683
 
Property and equipment, net
   
26,760
     
27,316
 
Intangible assets, net
   
1,439
     
1,491
 
Net deferred tax assets, non-current
   
3,738
     
3,413
 
Non-current assets of discontinued operations
   
12
     
12
 
Other assets
   
193
     
107
 
Total assets
 
$
260,720
   
$
269,064
 
                 
Current liabilities:
               
Accounts payable
 
$
5,945
   
$
7,277
 
Accrued payroll and related expenses
   
7,683
     
11,094
 
Accrued taxes
   
3,388
     
4,829
 
Current liabilities of discontinued operations
   
511
     
5,536
 
Other accrued liabilities
   
8,542
     
9,804
 
Deferred revenue
   
1,391
     
1,322
 
Warranty reserve
   
1,322
     
1,423
 
Total current liabilities
   
28,782
     
41,285
 
Non-current liabilities:
               
Deferred revenue
   
2,999
     
3,219
 
Warranty reserve
   
1,547
     
1,733
 
Net deferred tax liabilities
   
310
     
310
 
Notes payable, less current portion
   
455
     
480
 
Other non-current liabilities
   
1,889
     
1,843
 
Total non-current liabilities
   
7,200
     
7,585
 
Total liabilities
   
35,982
     
48,870
 
Shareholders' equity:
               
Common stock
   
132,603
     
132,559
 
Retained earnings
   
92,144
     
87,643
 
Accumulated other comprehensive loss
   
(9
)
   
(8
)
Total shareholders' equity
   
224,738
     
220,194
 
Total liabilities and shareholders' equity
 
$
260,720
   
$
269,064
 

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Revenues by Geographic Region and Customer Group
(Unaudited)
(In thousands)

The following table presents our revenues by source for the three months ended June 30, 2015 and 2014.

   
Three Months Ended
June 30,
 
Revenues by Geographic Region
 
2015
   
2014
 
North America
 
$
42,311
   
$
34,917
 
International
   
10,779
     
9,137
 
Total revenues
 
$
53,090
   
$
44,054
 
                 
   
Three Months Ended
June 30,
 
Revenues by Customer Group
   
2015
     
2014
 
Medical Market
 
$
8,684
   
$
7,245
 
Veterinary Market
   
43,589
     
35,944
 
Other
   
817
     
865
 
Total revenues
 
$
53,090
   
$
44,054
 
 
 
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