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

January 28, 2016
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 January 28, 2016, Abaxis, Inc. announced its financial results for the three and nine months ended December 31, 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.

On January 28, 2016, the Board of Directors of Abaxis, Inc. declared a quarterly cash dividend of $0.11 per common share, to be paid on March 17, 2016 to all shareholders of record as of the close of business on March 3, 2016.

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 January 28, 2016
 
2
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:  January 28, 2016

 
Abaxis, Inc.
     
 
By:
/s/ Ross Taylor
  
   
Ross Taylor
   
Vice President of Finance and Chief Financial Officer
 
3
Abaxis, Inc.

INDEX TO EXHIBITS

Exhibit No.
Description
   
Press release dated January 28, 2016
 
 
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 Third Quarter of Fiscal 2016
Declares Quarterly Cash Dividend
 
Union City, California – January 28, 2016 - 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, 2015.

Third quarter highlights include:
• Total medical and veterinary reagent disc sales of 2.3 million units, up 12% over last year’s comparable quarter.
• International revenues of $11.8 million, up 12% over last year’s comparable quarter.
• Gross profit from continuing operations of $29.6 million, up 3% over last year’s comparable quarter.
• Income from operations of $11.3 million, up 16% over last year’s comparable quarter.
• Diluted EPS from continuing operations of $0.35, up 30% over last year’s comparable quarter.
• Cash, cash equivalents and investments of $155.4 million as of December 31, 2015.
• Abaxis paid dividends of $2.5 million, or $0.11 per share, during the third quarter of fiscal 2016.

“Revenues in the third quarter of fiscal 2016 reflected strong growth in consumable sales,” said Clint Severson, chairman and chief executive officer of Abaxis. “Unit sales of our higher margin medical and veterinary reagent discs increased by 12% over last year’s third quarter. In particular, our medical reagent disc sales were strong, increasing by 23% over last year’s third quarter. These results reflect continued strength in our portfolio of consumable products.”

Mr. Severson continued, “We are targeting continued momentum in the medical market, both domestically and internationally. We believe the medical market represents a significant opportunity for Abaxis in the coming years. We have made consistent progress in building our medical business through our partnership with Abbott Point of Care, Inc. and expect it to become an even larger contributor to our results going forward. Furthermore, during the third quarter of fiscal 2016, we sold 200 Piccolo Xpress instruments to a leading medical device distributor in the People’s Republic of China and we look forward to continuing to provide our Piccolo medical products through our distribution partnership.”

Mr. Severson continued, “We also expanded our growth opportunities in the veterinary market. In the third quarter of fiscal 2016, we entered into a five-year supply agreement with Banfield Pet Hospitals to provide our VetScan hematology analyzers and associated consumables to all of Banfield’s more than 900 pet hospital locations, with installation and training to begin late in our fourth quarter of fiscal 2016. We are excited about the possibilities these new relationships offer. Our solid earnings results reflect continued strength in our operating margins and were also supported by a lower effective tax rate for the third quarter of fiscal 2016 due to the reinstatement of the federal research and development tax credit.”

Mr. Severson concluded, “All in all, we are pleased with the results of the quarter. While the results for last year’s comparable quarter was very strong due to the Ebola crisis and the impact of our new distributor partners in the veterinary market, we remain focused on continuing to grow our business in a cost efficient manner. ”
 
1
Dividend Declared

Abaxis today announced that its Board of Directors declared a quarterly cash dividend of $0.11 per common share, to be paid on March 17, 2016, to all shareholders of record as of the close of business on March 3, 2016.

Results of Continuing Operations

Quarterly Results

For the fiscal quarter ended December 31, 2015, Abaxis reported revenues from continuing operations of $52.9 million, as compared with revenues of $56.1 million for the comparable period last year, a decrease of 6 percent. Revenues from sales of instruments, which include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers, decreased by $7.6 million, or 40 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 $4.2 million, or 12 percent, over the same period last year. Abaxis reported net income from continuing operations of $8.0 million for the fiscal quarter ended December 31, 2015, compared to $6.2 million for the fiscal quarter ended December 31, 2014. Abaxis’ effective tax rate in the fiscal quarter ended December 31, 2015 was 31 percent, compared to 35 percent for the same period last year. Abaxis reported diluted net income per share from continuing operations of $0.35 (calculated based on 22,889,000 shares) for the fiscal quarter ended December 31, 2015, compared to $0.27 per share (calculated based on 22,756,000 shares) for the same period last year.

Nine-Month Results

For the nine-month period ended December 31, 2015, Abaxis reported revenues from continuing operations of $161.9 million, as compared with revenues of $150.6 million for the comparable period last year, an increase of 8 percent. Revenues from instrument sales decreased by $5.0 million, or 14 percent, compared to the same period last year. Revenues from consumables sales increased by $15.3 million, or 14 percent, over the same period last year. Abaxis reported net income from continuing operations of $22.8 million for the nine-month period ended December 31, 2015, compared to $17.0 million for the same period last year. Abaxis’ effective tax rate in the nine-month period ended December 31, 2015 was 34 percent, compared to 36 percent for the same period last year. Abaxis reported diluted net income per share from continuing operations of $1.00 (calculated based on 22,884,000 shares) for the nine-month period ended December 31, 2015, compared to $0.75 per share (calculated based on 22,717,000 shares) for the same period last year.

Other Reported Information

Non-cash compensation expense recognized for share-based awards during the third quarter of fiscal 2016 was $2.4 million, compared to $2.7 million for the same period last year. Abaxis paid $2.5 million in cash dividends to shareholders during the third 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, January 28, 2016. 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 10079319, through February 4, 2016. 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.
 
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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 and tools 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.

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’ goals for continued momentum in the medical market, estimates regarding the medical market size and opportunities, expectations regarding the contributions of its partnership with Abbott Point of Care, Inc. to Abaxis’ results going forward, expectations regarding its distribution partnership in the People’s Republic of China, the possibilities that the Banfield Pet Hospitals relationship may offer, payment of future cash dividends, financial resources and potential for future growth, market acceptance and penetration of product offerings, and future revenues, income 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 Abaxis’ manufacturing operations, including the vulnerability of its manufacturing operations to potential interruptions and delays and its ability to manufacture products free of defects, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results and difficulty in predicting future results, Abaxis’ dependence on Abbott Point of Care, Inc. for its U.S. medical sales, the performance of Abaxis’ independent distributors and Abaxis’ ability to manage their inventory levels effectively, dependence on sole or limited source suppliers, the market acceptance of Abaxis’ products, expansion of Abaxis’ sales and marketing and distribution efforts, dependence on key personnel, the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, 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. 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
 
3
ABAXIS, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)

   
Three Months Ended
December 31,
    
Nine Months Ended
December 31,
  
   
2015
    
2014
    
2015
    
2014
  
Revenues
  
$
52,876
    
$
56,051
    
$
161,941
    
$
150,576
  
Cost of revenues
    
23,274
      
27,268
      
70,985
      
70,014
  
Gross profit
    
29,602
      
28,783
      
90,956
      
80,562
  
Operating expenses:
                                
Research and development
    
4,428
      
3,585
      
13,840
      
11,764
  
Sales and marketing
    
10,395
      
10,742
      
31,766
      
30,193
  
General and administrative
    
3,524
      
4,770
      
11,301
      
11,475
  
Total operating expenses
    
18,347
      
19,097
      
56,907
      
53,432
  
Income from operations
    
11,255
      
9,686
      
34,049
      
27,130
  
Interest and other income (expense), net
    
231
      
(197
)
    
716
      
(595
)
Income from continuing operations before income tax provision
    
11,486
      
9,489
      
34,765
      
26,535
  
Income tax provision
    
3,532
      
3,274
      
11,993
      
9,534
  
Income from continuing operations
    
7,954
      
6,215
      
22,772
      
17,001
  
Discontinued operations
                                
Income (loss) from discontinued operations, net of tax
    
4
      
(330
)
    
(3
)
    
(1,001
)
Net income
  
$
7,958
    
$
5,885
    
$
22,769
    
$
16,000
  
                                 
Net income (loss) per share:
                                
Basic
                                
Continuing operations
  
$
0.35
    
$
0.27
    
$
1.00
    
$
0.75
  
Discontinued operations
    
-
      
(0.01
)
    
-
      
(0.05
)
Basic net income per share
  
$
0.35
    
$
0.26
    
$
1.00
    
$
0.70
  
Diluted
                                
Continuing operations
  
$
0.35
    
$
0.27
    
$
1.00
    
$
0.75
  
Discontinued operations
    
-
      
(0.01
)
    
-
      
(0.05
)
Diluted net income per share
  
$
0.35
    
$
0.26
    
$
1.00
    
$
0.70
  
Shares used in the calculation of net income per share:
                                
Weighted average common shares outstanding - basic
    
22,725
      
22,533
      
22,684
      
22,483
  
Weighted average common shares outstanding - diluted
    
22,889
      
22,756
      
22,884
      
22,717
  
Cash dividends declared per share
  
$
0.11
    
$
0.10
    
$
0.33
    
$
0.30
  
 
4
ABAXIS, INC.
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)

   
December 31,
2015
    
March 31,
2015
  
Current assets:
        
Cash and cash equivalents
  
$
82,402
    
$
107,015
  
Short-term investments
    
50,808
      
26,109
  
Receivables, net
    
33,450
      
29,015
  
Inventories
    
35,178
      
36,179
  
Prepaid expenses and other current assets
    
7,441
      
2,893
  
Net deferred tax assets, current
    
6,439
      
6,575
  
Current assets of discontinued operations
    
49
      
2,075
  
Total current assets
    
215,767
      
209,861
  
Long-term investments
    
22,147
      
24,181
  
Investment in unconsolidated affiliate
    
2,739
      
2,683
  
Property and equipment, net
    
27,514
      
27,316
  
Intangible assets, net
    
1,363
      
1,491
  
Net deferred tax assets, non-current
    
3,180
      
3,413
  
Non-current assets of discontinued operations
    
-
      
12
  
Other assets
    
604
      
107
  
Total assets
  
$
273,314
    
$
269,064
  
                 
Current liabilities:
                
Accounts payable
  
$
7,882
    
$
7,277
  
Accrued payroll and related expenses
    
7,241
      
11,094
  
Accrued taxes
    
269
      
4,829
  
Current liabilities of discontinued operations
    
180
      
5,536
  
Other accrued liabilities
    
8,953
      
9,804
  
Deferred revenue
    
1,537
      
1,322
  
Warranty reserve
    
1,272
      
1,423
  
Total current liabilities
    
27,334
      
41,285
  
Non-current liabilities:
                
Deferred revenue
    
2,516
      
3,219
  
Warranty reserve
    
1,822
      
1,733
  
Net deferred tax liabilities
    
310
      
310
  
Notes payable, less current portion
    
404
      
480
  
Other non-current liabilities
    
769
      
1,843
  
Total non-current liabilities
    
5,821
      
7,585
  
Total liabilities
    
33,155
      
48,870
  
Shareholders' equity:
                
Common stock
    
137,258
      
132,559
  
Retained earnings
    
102,918
      
87,643
  
Accumulated other comprehensive loss
    
(17
)
    
(8
)
Total shareholders' equity
    
240,159
      
220,194
  
Total liabilities and shareholders' equity
  
$
273,314
    
$
269,064
  
 
5
Revenues by Geographic Region and Customer Group
(Unaudited and in thousands)

The following table presents our revenues by source for the three and nine months ended December 31, 2015 and 2014.

   
Three Months Ended
December 31,
    
Nine Months Ended
December 31,
  
Revenues by Geographic Region
  
2015
    
2014
    
2015
    
2014
  
North America
  
$
41,109
    
$
45,576
    
$
128,596
    
$
121,532
  
International
    
11,767
      
10,475
      
33,345
      
29,044
  
Total revenues
  
$
52,876
    
$
56,051
    
$
161,941
    
$
150,576
  
 
   
Three Months Ended
December 31,
    
Nine Months Ended
December 31,
  
Revenues by Customer Group
  
2015
    
2014
    
2015
    
2014
  
Medical Market
  
$
11,002
    
$
11,846
    
$
28,317
    
$
26,707
  
Veterinary Market
    
40,896
      
43,414
      
131,084
      
121,454
  
Other
    
978
      
791
      
2,540
      
2,415
  
Total revenues
  
$
52,876
    
$
56,051
    
$
161,941
    
$
150,576
  
 
 
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