WEST LAFAYETTE, IN / ACCESSWIRE / August 14, 2017 / Bioanalytical Systems, Inc. (NASDAQ: BASI) ("BASi" or the "Company") today
announced financial results for the third quarter and first nine months of fiscal 2017.
Third Quarter Results
For the three months ended June 30, 2017, revenue amounted to $5,836,000, a 15% increase from $5,053,000 in the third quarter of
fiscal 2016.
Service revenue for the third quarter of fiscal 2017 increased 31% to $4,954,000, compared to $3,773,000 for the same period in
fiscal 2016. Preclinical services revenues improved due to an overall increase in the number of studies in the third quarter
compared to the prior fiscal year period. Other laboratory services revenues were positively impacted by higher pharmaceutical
analysis revenues in the third quarter of fiscal 2017 versus the comparable period in fiscal 2016. Also, archive services revenue
added $216,000 to other laboratory services revenue in the third fiscal quarter of 2017. Bioanalytical analysis revenues declined
due to a lower number of samples received and analyzed in the third quarter of fiscal 2017.
Sales in our Products segment decreased 31% in the third quarter of fiscal 2017 from $1,280,000 to $882,000 when compared to the
same period in the prior fiscal year. The majority of the decrease stems from lower sales of our Culex automated in vivo sampling
systems and our analytical instruments over the same period in the prior fiscal year.
Gross profit increased to $1,931,000, or 33% of revenue, in the third quarter of fiscal 2017, compared to $1,173,000, or 23% of
revenue, during the comparable fiscal 2016 period. The principal cause for the improvement was the increase in Service revenue,
which led to a higher absorption of fixed costs.
Operating expenses for the third quarter of fiscal 2017 amounted to $1,594,000, a 4% increase when compared to $1,538,000
incurred during the third quarter of fiscal 2016. Lower salaries and benefits due to the loss of business development and other
management personnel were offset by higher consulting services costs in the third quarter of fiscal 2017.
Operating income for the third quarter of fiscal 2017 amounted to $337,000 compared to an operating loss of $365,000 for the
third quarter of fiscal 2016. The improvement was primarily due to higher revenue and the improved operating margins.
Net income for the third quarter of fiscal 2017 amounted to $221,000, or $0.03 per diluted share, compared to a net loss of
$433,000, or $0.05 per diluted share for the third quarter of fiscal 2016.
EBITDA for the third quarter of fiscal 2017, amounted to $734,000, compared to a negative EBITDA of $2,000 for the third quarter
of fiscal 2016.
First Nine Months Results
For the nine months ended June 30, 2017, revenue amounted to $18,369,000, a 20% increase from $15,287,000 in the comparable
period of fiscal 2016.
Service revenue increased 28% in the nine months ended June 30, 2017, to $15,180,000 from $11,881,000 in the first nine months
of fiscal 2016. Preclinical services revenues improved due to an overall increase in the number of studies compared to the prior
year period. Other laboratory services revenues were positively impacted by higher discovery and pharmaceutical analysis revenues
in fiscal 2017 versus the comparable period in fiscal 2016. Also, archive services revenue added $453,000 to other laboratory
services revenue in fiscal 2017.
Sales in our Products segment decreased 6% in the nine months ended June 30, 2017, from $3,406,000 to $3,189,000 when compared
to the same period in the prior fiscal year. The majority of the decrease stems from lower sales of our analytical instruments over
the same period in the prior fiscal year.
Gross profit in the nine months ended June 30, 2017, increased to $5,833,000, or 32% of revenue, compared to $3,473,000, or 23%
of revenue, for the same period of the prior fiscal year. The improvement was driven by an increase in revenues which led to a
higher absorption of fixed costs and a favorable change in sales mix.
Operating expenses for the nine months ended June 30, 2017, increased 5% to $4,847,000 from $4,629,000 for the comparable fiscal
2016 period. The principal reason for the increase was higher costs for consulting services, offset, in part, by decreased spending
for outside services generally, as well as lower salaries and benefits due to the loss of business development personnel at the end
of fiscal 2016.
Operating income for the first nine months of fiscal 2017 amounted to $986,000 compared to an operating loss of $1,156,000 for
the first nine months of fiscal 2016. The improvement was primarily due to higher revenue and the improved operating margins
partially offset by increased operating expenses.
Net income amounted to $655,000, or $0.08 per diluted share, for the first nine months of fiscal 2017. Net loss amounted to
$1,193,000, or $0.15 per diluted share, for the first nine months of fiscal 2016. EBITDA was $2,151,000 for the first nine months
of fiscal 2017, compared to a negative EBITDA of $89,000 for the first nine months of fiscal 2016.
Cash Provided by Operating Activities
Cash provided by operating activities was $1,250,000 for the first nine months of fiscal 2017 due in part to the improved
operating income performance and lower working capital levels. The Company had $919,000 in cash and cash equivalents at June 30,
2017.
During the first nine months of fiscal 2017, cash from operations funded capital expenditures for building improvements and
equipment of approximately $205,000.
New Credit Facility
On June 23, 2017, we entered into a new Credit Agreement (the "Credit Agreement") with First Internet Bank of Indiana ("FIB").
The Credit Agreement includes both a term loan and a revolving line of credit and is secured by mortgages on our facilities and
personal property in West Lafayette and Evansville, Indiana. We used the proceeds from the term loan to satisfy our indebtedness
with Huntington Bank and terminated the related interest rate swap. During fiscal 2016 and throughout most of the first nine months
of fiscal 2017, we had operated either in default of, or under forbearance arrangements with respect to, our credit agreements with
Huntington Bank.
The term loan for $4,500,000 bears interest at a fixed rate of 3.99%, with monthly principal and interest payments of
approximately $33,000. The term loan matures in June 2022. The balance on the term loan at June 30, 2017, was $4,500,000. The
revolving line of credit for up to $2,000,000 matures in June 2019 and bears interest at the Prime Rate (as defined in the Credit
Agreement) less 25 basis points (0.25%). The balance on the revolving line of credit at June 30, 2017, was $256,000. We must pay
accrued and unpaid interest on the outstanding balance under the credit line on a monthly basis. The Credit Agreement is subject to
customary affirmative, negative and financial covenants.
Remarks
Jill Blumhoff, BASi's Vice President of Finance and Chief Financial Officer commented, "I am very pleased to say that following
our improved performance during the first half of fiscal 2017, we had a strong third quarter. We continue to experience strong
demand for preclinical services and steady improvement in pharmaceutical analysis revenues. Combined with our archive revenue
initiative, these factors contributed to our significant profitability improvement year over year."
"Finalizing the new credit facility in June was a significant accomplishment, providing liquidity to continue to implement the
initiatives begun earlier this year. Moving forward, we intend to continue to invest in new product development and to attract
additional customers for all of our business units, while maintaining our focus on quality and customer service. I want to thank
our employees, board members and shareholders for their support and continued dedication, which helped us achieve the results thus
far this year. It has been a rewarding team effort," Ms. Blumhoff concluded.
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 EBITDA for the third quarter and first nine months of
fiscal 2017 and 2016, respectively. EBITDA refers to a financial performance measure that excludes certain income statement line
items, such as interest, taxes, depreciation, and amortization. EBITDA may also exclude certain non-cash expenses, such as
stock-based compensation and the income or expense from the change in the warrant liability.
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 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 results and to illustrate the 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 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 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, 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. 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.
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, 2017 2016 2017 2016 Service
revenue $ 4,954 $ 3,773 $ 15,180 $ 11,881 Product revenue 882 1,280 3,189 3,406 Total revenue 5,836 5,053 18,369 15,287 Cost of
service revenue 3,308 3,183 10,604 9,838 Cost of product revenue 597 697 1,932 1,976 Total cost of revenue 3,905 3,880 12,536
11,814 Gross profit 1,931 1,173 5,833 3,473 Operating expenses: Selling 229 405 808 1,072 Research and development 127 103 340 392
General and administrative 1,238 1,030 3,699 3,165 Total operating expenses 1,594 1,538 4,847 4,629 Operating income (loss) 337
(365 ) 986 (1,156 ) Interest expense (112 ) (107 ) (322 ) (243 ) Decrease in fair value of warrant liability - 21 - 189 Other
income 2 1 4 2 Net income (loss) before income taxes 227 (450 ) 668 (1,208 ) Income tax expense (benefit) 6 (17 ) 13 (15 ) Net
income (loss) $ 221 $ (433 ) $ 655 $ (1,193 ) Other comprehensive income (loss): 6 (2 ) 35 (101 ) Comprehensive income (loss) $ 227
$ (435 ) $ 690 $ (1,294 ) Basic net income (loss) per share $ 0.03 $ (0.05 ) $ 0.08 $ (0.15 ) Diluted net income (loss) per share $
0.03 $ (0.05 ) $ 0.08 $ (0.15 ) Weighted common shares outstanding: Basic 8,216 8,108 8,157 8,107 Diluted 8,748 8,108 8,720 8,107
BIOANALYTICAL SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) June 30, 2017 September 30,
2016 Assets (Unaudited) Current assets: Cash and cash equivalents $ 919 $ 386 Accounts receivable Trade, net of allowance of $2,293
at June 30, 2017 and $565 at September 30, 2016 2,059 1,649 Unbilled revenues and other 410 591 Inventories, net 1,064 1,453
Prepaid expenses 597 798 Total current assets 5,049 4,877 Property and equipment, net 15,207 16,136 Lease rent receivable 78 51
Goodwill 38 38 Other assets 23 27 Total assets $ 20,395 $ 21,129 Liabilities and shareholders' equity Current liabilities: Accounts
payable $ 1,656 $ 2,965 Restructuring liability 1,117 1,117 Accrued expenses 1,191 1,089 Customer advances 3,265 3,114 Income taxes
payable 23 13 Revolving line of credit 256 1,358 Fair value of interest rate swap - 35 Current portion of capital lease obligation
127 126 Current portion of long term debt 224 3,656 Total current liabilities 7,859 13,473 Capital lease obligation, less current
portion 101 198 Long-term debt, less current portion, net of debt issuance costs 4,208 - Total liabilities 12,168 13,671
Shareholders' equity: Preferred shares, authorized 1,000,000 shares, no par value: 1,035 Series A shares at $1,000 stated value
issued and outstanding at June 30, 2017 and 1,185 at September 30, 2016 1,035 1,185 Common shares, no par value: Authorized
19,000,000 shares; 8,238,896 issued and outstanding at June 30, 2017 and 8,107,558 at September 30, 2016 2,021 1,989 Additional
paid-in capital 21,437 21,240 Accumulated deficit (16,266 ) (16,921 ) Accumulated other comprehensive income (loss) - (35 ) Total
shareholders' equity 8,227 7,458 Total liabilities and shareholders' equity $ 20,395 $ 21,129 BIOANALYTICAL SYSTEMS, INC.
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS (In thousands) (Unaudited) Three Months Ended Nine Months Ended June 30, June 30, 2017
2016 2017 2016 GAAP Net income (loss) $ 221 $ (433 ) 655 $ (1,193 ) Add back: Interest expense 112 107 322 243 Income taxes 6 (17 )
13 (15 ) Depreciation and amortization 390 357 1,147 1,031 Decrease in fair value of warrant liability - (21 ) - (189 ) Stock
option expense 6 5 13 34 Adjusted EBITDA $ 734 $ (2 ) 2,151 $ (89 ) Adjusted EBITDA - Earnings before interest, taxes,
depreciation, amortization, stock option expenses, impairment charges and the change in the fair value of warrant liability.
Company Contact:
Jill Blumhoff Chief Financial Officer & Vice President of Finance Phone: 765.497.8381 jblumhoff@BASinc.com
SOURCE: Bioanalytical Systems, Inc.
