BASi Returns to Profitability Before Restructuring Charges for The Third Quarter Of Fiscal 2012
WEST LAFAYETTE, Ind.--(BUSINESS WIRE)-- Bioanalytical Systems, Inc. (BASI) today announced financial results for the third quarter and first nine months of fiscal 2012, highlighted by a return to operating profitability before restructuring charges for the third quarter.
"The benefits of the restructuring program we announced just a few months ago are clearly evident in our third quarter financial performance. As anticipated, revenue decreased compared to last year's third quarter but increased sequentially compared to the second quarter. The company delivered earnings before interest taxes depreciation amortization, restructuring and non-cash compensation expenses (EBITDAR) of $716,000 for this year's third quarter, as compared to a negative EBITDAR of $1,021,000 for the 2012 second quarter and a negative EBITDAR of $704,000 for the first quarter of fiscal 2012," said Interim President & CEO and CFO Jacqueline Lemke.
"We completed our downsizing at the end of July, including all planned headcount reductions and the consolidation of our Oregon lab into our West Lafayette facility. We are now in the process of closing our UK lab. This closure will be substantially complete by the end of this month. This streamlining has permanently reduced our costs and improved capacity utilization while allowing us to continue providing the high quality services and instruments our clients expect from BASi. We are on track to deliver at least $4.5 million of annual operating cost reductions once our restructuring is fully implemented.
"The decrease in this year's third quarter revenue compared to the third quarter of fiscal 2011 was primarily due to lower toxicology services revenue, as well as the run-off of bioanalytical projects in the UK that were not replaced due to the closure of this facility. Encouragingly, pharmacological and discovery services and instrument sales for this year's third quarter returned to the higher levels reported in the first quarter. While we expect fourth quarter revenue to be about equal to this year's third quarter, despite the absence of revenue from the UK facility, EBITDAR should increase sequentially in the fourth quarter versus the third as our costs continue to fall. We also are evaluating options to refinance the current mortgage debt on our balance sheet prior to its maturity in November.
"BASi has provided drug development and discovery services to the pharmaceutical industry for more than 35 years. We have a superb and dedicated technical staff, world-class laboratory facilities, and we enjoy an outstanding reputation for the quality of our services and proprietary test instruments. We are in the midst of a fundamental restructuring that has reduced the company's cost structure, instilled fiscal discipline, and aligned our business development and operating goals. With these critical building blocks in place, I believe we can steadily improve the company's operating performance and restore revenue growth, and I am committed to making this happen," Ms. Lemke said.
Third Quarter Results
For the three months ended June 30, 2012, revenue decreased to $7,186,000 compared to $8,478,000 for the third quarter of fiscal 2011, but increased sequentially compared to $6,966,000 for the second quarter of the current fiscal year.
Gross margin for this year's third quarter was 28.7% compared to 32.4% for the third quarter of fiscal 2011, but increased sequentially compared to gross margin of 16.4% for the second quarter of fiscal 2012.
Operating expenses decreased to $1,976,000 for the third quarter of fiscal 2012 compared to $2,264,000 for last year's third quarter, and to $2,784,000 for the second quarter of fiscal 2012.
EBITDAR for this year's third quarter was $716,000, before restructuring charges of $623,000. This compares to EBITDAR for last year's third quarter of $1,061,000, and to a negative EBITDAR for the second quarter of the current fiscal year of $1,021,000. The Company recorded restructuring charges for the three months ended June 30, 2012 of $623,000 and for the three months ended March 31, 2012 of $64,000.
The GAAP net loss for this year's third quarter was $0.10 per share, which included the restructuring costs mentioned above. For the prior years third quarter, accounting for the value of the warrants and preferred stock issued in a public offering in May 2011 resulted in a deemed dividend to preferred stockholders, which was deducted from net earnings to compute GAAP earnings per share. This resulted in a GAAP loss per share of $0.65 for last year's third quarter. For the second quarter of fiscal 2012, GAAP net loss was $0.27 per share.
Nine Month Results
For the nine months ended June 30, 2012, revenue decreased to $21,668,000 from $24,991,000 for the first nine months of fiscal 2011. EBITDAR for the first nine months of fiscal 2012 was a negative $1,009,000, which included pre-tax restructuring charges of $687,000. This compares to EBITDAR for the first nine months of fiscal 2011 of $3,381,000. The Company recorded restructuring charges for the nine months ended June 30, 2012 of $687,000. The GAAP net loss per share for the nine months ended June 30, 2012 was $0.58 per share. After accounting for the preferred dividend, the net loss for last year's first nine months was $0.58 per share.
Balance Sheet Highlights
At June 30, 2012, BASi reported cash and cash equivalents of $409,000, total long-term obligations of $1,062,000, and shareholders' equity of $11,751,000, or $1.66 per outstanding share. Current liabilities at June 30, 2012 included mortgage debt of $6,007,000 that matures in November 2012. The Company intends to refinance this amount in lieu of making balloon payments for the remaining principal balances. At September 30, 2011, cash and cash equivalents were $2,963,000, total long-term obligations were $6,913,000, and shareholders' equity was $15,586,000, or $2.26 per outstanding share.
Subsequent to this Earnings Release and upon opening of the trading window, the directors and corporate officer intend to purchase an aggregate of approximately 100,000 shares directly from BASi at the closing price of the shares on August 16, 2012.
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 866.356.3377, passcode #74116414 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 #82929344 after 2:00 p.m. EDT.
Non-GAAP to GAAP Reconciliation
This press release contains financial measures that are not calculated in accordance with accounting principles generally accepted in the United States (GAAP). The non-GAAP financial measures are EBITDAR. EBITDAR refers to financial performance measures that exclude certain income statement line items, such as interest, taxes, depreciation, amortization, and restructuring charges and/or exclude certain non-cash expenses as permitted by our credit agreements, such as stock-based compensation.
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 Companys results and may facilitate a fuller analysis of the Companys 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 Companys 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.
A reconciliation of reported results to adjusted results is included in this press release, which is also posted on BASis website: www.BASInc.com.
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 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.
|BIOANALYTICAL SYSTEMS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)|
|(In thousands, except per share amounts)|
|Three Months Ended||Nine Months Ended|
|Cost of service revenue||4,270||5,043||14,592||14,544|
|Cost of product revenue||857||690||2,392||2,189|
|Total cost of revenue||5,127||5,733||16,984||16,733|
|Research and development||113||127||453||350|
|General and administrative||1,122||1,321||4,356||3,964|
|Total operating expenses||1,976||2,264||7,544||6,589|
|Operating income (loss)||(540||)||481||(3,547||)||1,669|
|Income (loss) before income taxes||(704||)||418||(4,079||)||1,211|
|Net income (loss)||$||(704||)||$||418||$||(4,079||)||$||1,211|
|Other comprehensive income (loss):|
|Foreign currency translation adjustment||(17||)||(17||)||4||(4||)|
|Comprehensive income (loss)||$||(721||)||$||401||$||(4,075||)||$||1,207|
|Basic net income (loss) per share||$||(0.10||)||$||(0.65||)||$||(0.58||)||$||(0.58||)|
|Diluted net income (loss) per share||$||(0.10||)||$||(0.65||)||$||(0.58||)||$||(0.58||)|
|Weighted common shares outstanding:|
BIOANALYTICAL SYSTEMS, INC.
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(In thousands, except share amounts)|
|June 30,||September 30,|
|Cash and cash equivalents||$||409||$||2,963|
|Unbilled revenues and other||1,077||1,116|
|Refundable income taxes||6||--|
|Total current assets||7,237||10,373|
|Property and equipment, net||20,021||20,399|
|Intangible assets, net||31||54|
|Debt issue costs||53||75|
|Liabilities and Shareholders' Equity|
|Income tax accruals||16||56|
|Revolving line of credit||1,263||1,346|
|Current portion of capital lease obligation||494||613|
|Current portion of long-term debt||6,007||735|
|Total current liabilities||15,968||9,847|
|Capital lease obligation, less current portion||1,062||1,071|
|Long-term debt, less current portion||--||5,842|
|Preferred shares, authorized 1,000,000 shares, no par value:|
|1,685 Series A shares at $1,000 stated value issued and|
|outstanding at June 30, 2012 and 2,135 at September 30, 2011||1,685||2,135|
|Common shares, no par value: Authorized 19,000,000|
|shares; 7,124,404 issued and outstanding at June 30,|
|2012 and 6,945,631 at September 30, 2011||1,781||1,698|
|Additional paid-in capital||20,015||19,408|
|Accumulated other comprehensive income||55||51|
|Total shareholders' equity||11,751||15,586|
|Total liabilities and shareholders' equity||$||28,781||$||32,346|
|BIOANALYTICAL SYSTEMS, INC.|
|RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDAR|
|Three Months Ended||Nine Months Ended|
|June 30,||June 30,|
|GAAP Net income (loss)||$||(704||)||$||418||$||(4,079||)||$||1,211|
|Addback: Interest expense||172||70||540||473|
|Depreciation and amortization||580||526||1,724||1,574|
|Stock option expense||46||48||119||123|
|EBITDAR -- Earnings before interest, taxes, depreciation, amortization, restructuring charges and stock option expenses.|
Bioanalytical Systems, Inc.
Interim President & CEO and CFO
Neil Berkman, 310-477-3118
Source: Bioanalytical Systems, Inc.Copyright Business Wire 2012