Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the
“Company”, “We” or “Our”) today announced financial
results for the three and six months ended March 31, 2019.
Robert Leasure, Jr., BASi’s President and Chief
Executive Officer, commented, “Our financial results have been in
line with our expectations for fiscal 2019. This quarter we
were able to recruit and fill open leadership and scientific team
positions that are critical to meeting the future expectations of
our clients, employees and shareholders. We saw organic growth of
8% over the 1st quarter of 2019 and overall growth of 58.7% so far
over the first six months of 2018, including growth attributable to
the Seventh Wave acquisition. We have continued the integration
process of the Seventh Wave acquisition, and on May 1, 2019,
completed the acquisition of Smithers Avanza’s toxicology facility
in Gaithersburg, Maryland. The new building expansion and facility
improvements in our Evansville facility continue to move forward.
We obtained funding to support these initiatives and other
improvements to our facilities and equipment to support future
growth and enhance our scientific capabilities and client
experiences. We are proud of the foundation we continue to
build for the future.”
Mr. Leasure continued, “We continue to see our
quoting activity and services backlog grow as a result of the
acquisitions and investments into sales and marketing. We plan to
further develop our sales, marketing, client services and branding
to drive revenue growth in the current year and beyond. We
will continue to develop existing services into 'Centers of
Excellence' to distinguish our services in the industry and to
evaluate additional opportunities for internal and external
growth.”
“Through all of our efforts, we continue to
emphasize and maintain a positive culture from which we can recruit
and retain our talented team. The dedication of the whole
team to the Company and to our clients will continue to fuel our
success with our initiatives,” Mr. Leasure concluded.
Second Quarter Results
For the quarter, revenue amounted to $9,344,000,
a 60.4% increase from $5,944,000 in the second quarter of fiscal
2018. Revenue growth was mainly driven by the incremental
sales associated with the Seventh Wave acquisition, plus increased
organic sales in both the Services and Products segments.
Net loss for the second quarter of fiscal 2019
amounted to $569,000, or $0.06 per diluted share, compared to net
income of $55,000, or $0.01 per diluted share for the second
quarter of fiscal 2018.
Net income and earnings per share were impacted
by the mix of revenues, recruiting and relocation of the management
team and growing the employee base, and higher sales and marketing
expenses. The higher sales and marketing expenses are driven
by our focus on promoting our combined brand and revenue
growth.
Adjusted EBITDA for the second quarter of fiscal
2019, amounted to $273,000, compared to Adjusted EBITDA for the
second quarter of fiscal 2018 of $524,000.
Second Quarter Segment
Results
Service revenue for the second quarter of fiscal
2019 increased 61.7% to $8,131,000 compared to $5,030,000 for the
same period in fiscal 2018. Nonclinical services revenues increased
$2,486,000 due to an overall increase in the number of studies
compared to the prior year period and additional revenues
attributable to the Seventh Wave Laboratories acquisition of
$1,622,000 in the second quarter of fiscal 2019.
Bioanalytical analysis revenues increased by $638,000 in the second
quarter of fiscal 2019, mainly due to additional revenues
attributable to the Seventh Wave Laboratories acquisition.
Other laboratory services revenues were negatively impacted by
lower archive revenues in the second quarter of fiscal 2019 versus
the comparable period in fiscal 2018.
Cost of Service revenue as a percentage of
Service revenue increased to 73.2% during the second quarter of
fiscal 2019 from 72.8% in the comparable period in fiscal
2018. The principal cause of this increase was due to the mix
of services provided in the current quarter.
Sales in our Products segment increased 32.6% in
the second quarter of fiscal 2019 from $914,000 to $1,213,000 when
compared to the same period in the prior fiscal year. The
majority of the increase stems from higher sales of our Culex
automated in vivo sampling systems and analytical instruments in
the current quarter as compared to the prior year
quarter.
Cost of Products revenue as a percentage of
Products revenue in the second quarter of fiscal 2019 increased to
68.6% from 59.3% in the comparable prior-year period. This
increase is mainly due to higher material costs and the mix of
product sales during the second quarter of fiscal 2019.
First Six Months’ Results
For the first six months of fiscal 2019, revenue
amounted to $17,969,000, a 58.7% increase from $11,321,000 in the
first half of fiscal 2018. Revenue growth was mainly driven
by incremental sales associated with the Seventh Wave acquisition
plus increased sales in both the Services and Products
segments.
Net loss for the first six months of fiscal 2019
amounted to $654,000, or $0.06 per diluted share, compared to net
income of $81,000, or $0.01 per diluted share for the first six
months of fiscal 2018.
Net income and earnings per share were impacted
by recruiting and bringing on new employees, the mix of revenues
and higher sales and marketing expenses. The higher sales and
marketing expenses are driven by our focus on promoting our
combined brand and revenue growth.
Adjusted EBITDA for the first six months of
fiscal 2019, amounted to $1,173,000, compared to Adjusted EBITDA
for the first six months of fiscal 2018 of $969,000.
First Six Months’ Segment
Results
Service revenue for the first six months of
fiscal 2019 increased 66.0% to $15,866,000 compared to $9,555,000
for the same period in fiscal 2018. Nonclinical services revenues
increased $4,963,000 due to an overall increase in the number of
studies compared to the prior year period and additional revenues
attributable to the Seventh Wave Laboratories acquisition of
$3,547,000 in the first six months of fiscal 2019.
Bioanalytical analysis revenues increased by $1,314,000 in the
first six months of fiscal 2019, mainly due to additional revenues
attributable to the Seventh Wave Laboratories acquisition.
Other laboratory services revenues were positively impacted by
higher pharmaceutical analysis revenues in the first six months of
fiscal 2019 versus the comparable period in fiscal 2018.
Cost of Service revenue as a percentage of
Service revenue increased to 72.8% during the first six months of
fiscal 2019 from 72.6% in the comparable period in fiscal
2018. The principal cause of this increase was due to the mix
of services provided in the first six months of fiscal
2019.
Sales in our Products segment increased 19.0% in
the first six months of fiscal 2019 from $1,766,000 to $2,103,000
when compared to the same period in the prior fiscal year.
The majority of the increase stems from higher sales of our Culex
automated in vivo sampling systems and analytical instruments in
the current period as compared to the prior year period.
Cost of Products revenue as a percentage of
Products revenue in the first six months of fiscal 2019 increased
to 68.5% from 60.3% in the comparable prior-year period. This
increase is mainly due to higher material costs and the mix of
product sales during the first six months of fiscal 2019.
Cash Provided by Operating
Activities
Cash provided by operating activities was
$911,000 for the first six months of fiscal 2019 compared to
$842,000 for the same period in fiscal 2018.
As of March 31, 2019, the Company had $520,000
in cash and cash equivalents, a $409,000 balance on its general
line of credit, a $908,000 balance on its $4,445,000 construction
line of credit and a $285,000 balance on its $1,429,250 equipment
line of credit. During fiscal 2019, cash from operations,
cash on hand and financing activities funded capital expenditures
of approximately $2,218,000 for the expansion of our Evansville
facility in addition to laboratory equipment and building
improvements as well as computer equipment and software.
Acquisition
On May 1, 2019, the Company acquired from
Smithers Avanza Toxicology Services LLC (“Seller”), a
consulting-based contract research laboratory located in
Gaithersburg, Maryland, substantially all of the assets used by the
Seller in connection with the performance of in-vivo mammalian
toxicology CRO services for pharmaceuticals (small molecules and
biologics), vaccines, agro and industrial chemicals, under the
terms and conditions of an Asset Purchase Agreement, dated May 1,
2019. The consideration for the Acquisition consisted of
$1,270,646.10 in cash, subject to certain adjustments, 200,000 of
the Company’s common shares and an unsecured promissory note in the
initial principal amount of $810,000. The Company funded the cash
portion of the purchase price for the Acquisition with cash on hand
and the net proceeds from the refinancing of its credit
arrangements with First Internet Bank (“FIB”).
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 Adjusted EBITDA for the three and
six month periods ended March 31, 2019 and 2018. Adjusted EBITDA as
reported herein refers to a financial performance measure that
excludes from net income (loss) income statement line items
interest expense and income taxes (benefit) expense, as well as
non-cash charges for depreciation and amortization, stock option
(benefit) expense and non-recurring acquisition and integration
costs.
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 Adjusted EBITDA, 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
our results and to illustrate our 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 emerging
pharmaceutical companies and the world's leading drug development
companies and medical research organizations. The Company focuses
on developing innovative services supporting its clients’ discovery
and development objectives for improved decision-making and
accelerated goal attainment. BASi products focus on increasing
efficiency, improving data, and reducing the cost of taking new
drugs 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 our financial
condition, 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, the successful closing, integration and financial impact
of acquisitions 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 except as may be required by law. 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)
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BIOANALYTICAL SYSTEMS,
INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSAND COMPREHENSIVE (LOSS)
INCOME(In thousands, except per share
amounts)(Unaudited) |
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Three Months Ended March 31, |
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Six Months Ended March 31, |
|
|
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2019 |
|
|
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2018 |
|
|
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2019 |
|
|
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2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue |
$ |
8,131 |
|
|
$ |
5,030 |
|
|
$ |
15,866 |
|
|
$ |
9,555 |
|
Product revenue |
|
1,213 |
|
|
|
914 |
|
|
|
2,103 |
|
|
|
1,766 |
|
Total revenue |
|
9,344 |
|
|
|
5,944 |
|
|
|
17,969 |
|
|
|
11,321 |
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|
|
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|
|
|
|
|
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|
|
|
|
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Cost of service revenue |
|
5,951 |
|
|
|
3,662 |
|
|
|
11,548 |
|
|
|
6,935 |
|
Cost of product revenue |
|
832 |
|
|
|
542 |
|
|
|
1,441 |
|
|
|
1,065 |
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Total cost of revenue |
|
6,783 |
|
|
|
4,204 |
|
|
|
12,989 |
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|
8,000 |
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|
|
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|
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|
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Gross profit |
|
2,561 |
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|
|
1,740 |
|
|
|
4,980 |
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|
|
3,321 |
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Operating expenses: |
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Selling |
|
655 |
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|
|
303 |
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|
|
1,308 |
|
|
|
597 |
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Research and development |
|
145 |
|
|
|
149 |
|
|
|
269 |
|
|
|
288 |
|
General and administrative |
|
2,210 |
|
|
|
1,178 |
|
|
|
3,811 |
|
|
|
2,315 |
|
Total operating expenses |
|
3,010 |
|
|
|
1,630 |
|
|
|
5,388 |
|
|
|
3,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
(449 |
) |
|
|
110 |
|
|
|
(408 |
) |
|
|
121 |
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Interest expense |
|
(122 |
) |
|
|
(48 |
) |
|
|
(248 |
) |
|
|
(100 |
) |
Other income |
|
3 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
Net (loss) income before
income taxes |
|
(568 |
) |
|
|
66 |
|
|
|
(652 |
) |
|
|
25 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Income taxes (benefit)
expense |
|
1 |
|
|
|
11 |
|
|
|
2 |
|
|
|
(56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(569 |
) |
|
$ |
55 |
|
|
$ |
(654 |
) |
|
$ |
81 |
|
|
|
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Comprehensive (loss)
income |
$ |
(569 |
) |
|
$ |
55 |
|
|
$ |
(654 |
) |
|
$ |
81 |
|
|
|
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|
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Basic net (loss) income per
share |
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
Diluted net (loss) income per
share |
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
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|
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Weighted common shares
outstanding: |
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|
|
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|
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|
|
|
|
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Basic |
|
10,290 |
|
|
|
8,245 |
|
|
|
10,268 |
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|
8,245 |
|
Diluted |
|
10,290 |
|
|
|
8,789 |
|
|
|
10,268 |
|
|
|
8,793 |
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BIOANALYTICAL SYSTEMS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except
share amounts) |
|
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March 31,2019 |
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|
September 30,2018 |
|
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(Unaudited) |
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Assets |
|
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Current assets: |
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Cash and cash equivalents |
$ |
520 |
|
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$ |
773 |
|
Accounts receivable |
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Trade, net of allowance of $1,891 at March 31, 2019 and $1,948 at
September 30, 2018 |
|
4,149 |
|
|
|
4,128 |
|
Unbilled revenues and other |
|
716 |
|
|
|
1,012 |
|
Inventories, net |
|
1,103 |
|
|
|
1,182 |
|
Prepaid expenses |
|
1,194 |
|
|
|
966 |
|
Total current assets |
|
7,682 |
|
|
|
8,061 |
|
|
|
|
|
|
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Property and equipment,
net |
|
17,787 |
|
|
|
16,610 |
|
Goodwill |
|
3,072 |
|
|
|
3,072 |
|
Other intangible assets,
net |
|
3,060 |
|
|
|
3,318 |
|
Lease rent receivable |
|
124 |
|
|
|
115 |
|
Deferred tax asset |
|
31 |
|
|
|
62 |
|
Other assets |
|
27 |
|
|
|
30 |
|
|
|
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Total assets |
$ |
31,783 |
|
|
$ |
31,268 |
|
|
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Liabilities and
shareholders’ equity |
|
|
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Current liabilities: |
|
|
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Accounts payable |
$ |
3,525 |
|
|
$ |
3,192 |
|
Restructuring liability |
|
503 |
|
|
|
1,117 |
|
Accrued expenses |
|
1,230 |
|
|
|
1,571 |
|
Customer advances |
|
5,583 |
|
|
|
4,925 |
|
Revolving line of credit |
|
409 |
|
|
|
- |
|
Current portion of capital lease obligation |
|
20 |
|
|
|
87 |
|
Current portion of long-term debt |
|
930 |
|
|
|
909 |
|
Total current liabilities |
|
12,200 |
|
|
|
11,801 |
|
|
|
|
|
|
|
|
|
Capital lease obligation, less
current portion |
|
28 |
|
|
|
37 |
|
Long-term debt, less current
portion, net of debt issuance costs |
|
9,265 |
|
|
|
8,546 |
|
Total liabilities |
|
21,493 |
|
|
|
20,384 |
|
|
|
|
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Shareholders’ equity: |
|
|
|
|
|
|
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|
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Preferred shares, authorized 1,000,000 shares, no par value: |
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|
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35 Series A shares at $1,000 stated value issued and outstanding at
March 31, 2019 and at September 30, 2018 |
|
35 |
|
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|
35 |
|
Common shares, no par value: |
|
|
|
|
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Authorized 19,000,000 shares; 10,290,531 issued and outstanding at
March 31, 2019 and 10,245,277 at September 30, 2018 |
|
2,534 |
|
|
|
2,523 |
|
Additional paid‑in capital |
|
24,682 |
|
|
|
24,557 |
|
Accumulated deficit |
|
(16,961 |
) |
|
|
(16,231 |
) |
Total shareholders’ equity |
|
10,290 |
|
|
|
10,884 |
|
Total liabilities and shareholders’ equity |
$ |
31,783 |
|
|
$ |
31,268 |
|
|
|
|
|
|
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|
BIOANALYTICAL SYSTEMS, INC. |
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS |
(In thousands) (Unaudited) |
|
|
|
|
|
|
|
|
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|
Three Months Ended |
|
Six Months Ended |
March 31, |
|
March 31, |
2019 |
|
2018 |
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
GAAP Net (loss) income |
$ |
(569 |
) |
|
$ |
55 |
|
$ |
(654 |
) |
|
$ |
81 |
|
|
|
|
|
|
|
|
|
Add back: Interest expense |
|
122 |
|
|
|
48 |
|
|
248 |
|
|
|
100 |
|
Income taxes (benefit) expense |
|
1 |
|
|
|
11 |
|
|
2 |
|
|
|
(56 |
) |
Depreciation and amortization |
|
602 |
|
|
|
375 |
|
|
1,305 |
|
|
|
775 |
|
Stock option expense |
|
99 |
|
|
|
35 |
|
|
124 |
|
|
|
69 |
|
Acquisition and integration costs |
|
18 |
|
|
|
- |
|
|
148 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
273 |
|
|
$ |
524 |
|
$ |
1,173 |
|
|
$ |
969 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA - Earnings before interest expense, income taxes
(benefit) expense, depreciation and amortization, stock option
expense and non-recurring acquisition and integration costs. |
|
Company Contact: Jill Blumhoff Chief Financial
Officer & Vice President of Finance Phone: 765.497.8381
jblumhoff@BASinc.com
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