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CST: 22/11/2019 15:35:10   

BASi Continues Revenue Growth in Third Quarter of Fiscal 2019

100 Days ago

WEST LAFAYETTE, Ind., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the “Company”, “We” or “Our”) today announced financial results for the three and nine months ended June 30, 2019.

Robert Leasure, Jr., BASi’s President and Chief Executive Officer commented, “Our financial results for the third quarter met our expectations and we are pleased with our momentum. We saw revenue growth of 16% over the 2nd quarter of 2019 and overall revenue growth of 66.1% over the first nine months of 2018, including growth attributable to both the Seventh Wave acquisition and the Smithers Avanza acquisition.  Even though the third fiscal quarter included over $200,000 in acquisition related cost, net income improved as compared to the second quarter. Our quoting activity and services backlog continue to grow as a result of the acquisitions and investments in sales and marketing. We are beginning to see the results we envisioned from our strategic initiatives and the extraordinary hard work across the company.”

Mr. Leasure continued, “During this recent quarter, we completed the acquisition of Smithers Avanza’s toxicology facility in Gaithersburg, Maryland, our second acquisition within one year. We have taken, and continue to anticipate taking, advantage of immediate capacity and further capitalizing on the assets and broadened scientific expertise acquired via the Smithers Avanza acquisition to reach additional clients. The Evansville new building expansion and facility improvements continue to move forward. We obtained funding to support our acquisitions and expansion, and other improvements to our facilities and equipment, to allow for continued growth and to enhance our scientific capabilities and client experiences. We continue to invest in further integrating our facilities to develop existing facilities and services into “Centers of Excellence” to distinguish our services in the industry, and will continue to evaluate additional opportunities for internal and external growth.” 

“Our team at BASi is very proud of what we have accomplished over the last year and we look forward to the future that we are building together,” Mr. Leasure concluded.

Third Quarter Results

For the quarter, revenue amounted to $10,861,000, a 79.8% increase from $6,039,000 in the third quarter of fiscal 2018. Revenue growth was mainly driven by the incremental sales associated with the Seventh Wave and Smithers Avanza acquisitions, plus increased organic sales in the Services segment.

Net loss for the third quarter of fiscal 2019 amounted to $426,000, or $0.04 per diluted share, compared to a net loss of $75,000, or $0.01 per diluted share for the third quarter of fiscal 2018.

Net income and earnings per share were impacted by, among other factors, the mix of revenues, recruiting and relocation of management and scientific teams and growing the employee base, acquisition related costs, as well as 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 third quarter of fiscal 2019 amounted to $772,000, compared to Adjusted EBITDA for the third quarter of fiscal 2018 of $376,000.

Third Quarter Segment Results

Service revenue for the third quarter of fiscal 2019 increased 99.1% to $9,689,000 compared to $4,866,000 for the same period in fiscal 2018. Nonclinical services revenues increased $4,521,000 in the third quarter of fiscal 2019 due to additional revenues attributable to the Seventh Wave Laboratories acquisition of $2,845,000 and the Smithers Avanza acquisition of $1,421,000 in the third quarter of fiscal 2019, as well as an overall increase in the number and mix of studies compared to the prior year period. Bioanalytical analysis revenues increased by $373,000 in the third 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 decreased to 72.3% during the third quarter of fiscal 2019 from 75.7% in the comparable period in fiscal 2018. The principal cause of this decrease was the increase in the nonclinical service revenues that facilitated a higher absorption of fixed cost in the current quarter. 

Sales in our Products segment remained essentially flat in the third quarter of fiscal 2019 from $1,172,000 to $1,173,000 when compared to the same period in the prior fiscal year. 

Cost of Products revenue as a percentage of Products revenue in the third quarter of fiscal 2019 decreased to 62.1% from 62.3% in the comparable prior-year period mainly due to the mix of products sold.

First Nine Months’ Results

For the first nine months of fiscal 2019, revenue amounted to $28,830,000, a 66.1% increase from $17,360,000 in the first nine months 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 nine months of fiscal 2019 amounted to $1,080,000, or $0.10 per diluted share, compared to net income of $6,000, or $0.00 per diluted share for the first nine months of fiscal 2018.

Net income and earnings per share were impacted by, among other factors, the mix of revenues, recruiting and relocation of management and scientific teams and growing the employee base, acquisition related costs, as well as increased sales and marketing expenses. 

Adjusted EBITDA for the first nine months of fiscal 2019, amounted to $1,945,000, compared to Adjusted EBITDA for the first nine months of fiscal 2018 of $1,345,000.

First Nine Months’ Segment Results

Service revenue for the first nine months of fiscal 2019 increased 77.2% to $25,555,000 compared to $14,421,000 for the same period in fiscal 2018. Nonclinical services revenues increased $9,485,000 in the first nine months of fiscal 2019 due to additional revenues attributable to the Seventh Wave Laboratories and Smithers Avanza acquisitions of $7,736,000 and $1,421,000, respectively, as well as an overall increase in the number of studies compared to the prior year period.  Bioanalytical analysis revenues increased by $1,687,000 in the first nine months of fiscal 2019, mainly due to additional revenues attributable to the Seventh Wave Laboratories acquisition. 

Cost of Service revenue as a percentage of Service revenue decreased to 72.6% during the first nine months of fiscal 2019 from 73.6% in the comparable period in fiscal 2018. The principal cause of this decrease was due to the mix of services provided in the first nine months of fiscal 2019. 

Sales in our Products segment increased 11.4% in the first nine months of fiscal 2019 from $2,939,000 to $3,275,000 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 nine months of fiscal 2019 increased to 66.2% from 61.1% in the comparable prior-year period. This increase is mainly due to higher material costs and the mix of product sales during the first nine months of fiscal 2019.

Cash Provided by Operating Activities

Cash provided by operating activities was $1,567,000 for the first nine months of fiscal 2019 compared to $2,210,000 for the same period in fiscal 2018.

As of June 30, 2019, the Company had $506,000 in cash and cash equivalents, a $572,000 balance on its general line of credit, a $2,012,000 balance on its $4,445,000 construction line of credit, a $499,000 balance on its $1,429,250 equipment line of credit and a $460,000 balance on its capex line of credit. During fiscal 2019, cash from operations, cash on hand and financing activities funded capital expenditures of approximately $4,530,000 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. The consideration for the acquisition consisted of $1,270,646 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.

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 nine month periods ended June 30, 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)



BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited)

  Three Months Ended
June 30,
  Nine Months Ended 
June 30,
    2019     2018       2019     2018  
           
Service revenue $   9,689   $   4,866     $     25,555   $     14,421  
Product revenue   1,172     1,173       3,275     2,939  
  Total revenue   10,861     6,039       28,830     17,360  
           
Cost of service revenue   7,004     3,684       18,552     10,619  
Cost of product revenue   728     730       2,168     1,795  
  Total cost of revenue   7,732     4,414       20,720     12,414  
           
Gross profit   3,129     1,625       8,110     4,946  
Operating expenses:          
  Selling   730     320       2,038     917  
  Research and development   128     142       397     430  
  General and administrative   2,521     1,195       6,332     3,510  
  Total operating expenses   3,379     1,657       8,767     4,857  
           
Operating income (loss)   (250 )   (32 )     (657 )   89  
           
  Interest expense   (178 )   (49 )     (426 )   (149 )
  Other income   2       1       5     5  
Net loss before income taxes   (426 )   (80 )     (1,078 )   (55 )
           
Income taxes (benefit) expense   -     (5 )     2     (61 )
           
Net income (loss) $   (426 ) $     (75 )   $     (1,080 ) $   6   
           
           
Comprehensive income (loss) $   (426 ) $      (75 )   $     (1,080 ) $   6   
           
           
Basic net income (loss) per share $     (0.04 ) $    (0.01 )   $     (0.10 ) $     0.00  
Diluted net income (loss) per share $     (0.04 ) $     (0.01 )   $     (0.10 ) $     0.00  
           
Weighted common shares outstanding:          
  Basic   10,493     8,273       10,343     8,274  
  Diluted   10,493     8,273       10,343     8,652  
                           


BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share amounts) 

  June 30,
2019
  September 30,
2018
  (Unaudited)    
Assets      
Current assets:      
Cash and cash equivalents $   506     $   773  
Accounts receivable      
Trade, net of allowance of $1,783 at June 30, 2019 and $1,948 
at September 30, 2018
  6,261       4,128  
Unbilled revenues and other   1,639       1,012  
Inventories, net   1,119       1,182  
Prepaid expenses   1,293       966  
Total current assets   10,818       8,061  
       
Property and equipment, net   21,056       16,610  
Goodwill   3,617       3,072  
Other intangible assets, net   2,967       3,318  
Lease rent receivable   127       115  
Deferred tax asset   31       62  
Other assets   28       30  
       
Total assets $   38,644     $   31,268  
       
Liabilities and shareholders’ equity      
Current liabilities:      
Accounts payable $   4,488     $   3,192  
Restructuring liability   425       1,117  
Accrued expenses   2,499       1,571  
Customer advances   6,516       4,925  
Revolving line of credit   572       -  
Capex line of credit   460       -  
Current portion of capital lease obligation   18       87  
Current portion of long-term debt   1,050       909  
Total current liabilities    16,028       11,801  
Capital lease obligation, less current portion   23       37  
Long-term debt, less current portion, net of debt issuance costs   12,259       8,546  
Total liabilities   28,310       20,384  
       
       
Shareholders’ equity:      
Preferred shares, authorized 1,000,000 shares, no par  value:      
35 Series A shares at $1,000 stated value issued and
outstanding at June 30, 2019 and at September 30, 2018
  35       35  
Common shares, no par value:      
Authorized 19,000,000 shares; 10,496,669 issued and
outstanding at June 30, 2019 and 10,245,277
at September 30, 2018
  2,586         2,523  
Additional paid‑in capital   25,100         24,557  
Accumulated deficit   (17,387 )      (16,231 )
Total shareholders’ equity    10,334       10,884  
Total liabilities and shareholders’ equity $   38,644     $   31,268  
       


  BIOANALYTICAL SYSTEMS, INC.
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
(In thousands)
(Unaudited)
 
               
  Three Months Ended     Nine Months Ended
  June 30,     June 30,
  2019       2018       2019       2018  
               
GAAP Net income (loss) $   (426 )   $   (75 )   $   (1,080 )   $    6  
               
Add back: Interest expense     178         49          426          149  
Income taxes (benefit) expense      -         (5 )        2          (61 )
Depreciation and amortization     702         374          2,007         1,149  
Stock option expense     72         33          196         102  
Acquisition and integration costs     246         -          394         -  
               
Adjusted EBITDA $   772     $     376     $   1,945     $   1,345  
               
Adjusted EBITDA - Earnings before interest expense, income taxes (benefit) expense, depreciation and amortization, stock option expense and non-recurring acquisition and integration costs.
 


FOR MORE INFORMATION: Company Contact: 
  Jill Blumhoff 
  Chief Financial Officer & Vice President of Finance 
  Phone: 765.497.8381 
  jblumhoff@BASinc.com

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