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Vice President Finance & CFO
BASi Reports Fiscal 2012 Second Quarter
WEST LAFAYETTE, Indiana -
May 11, 2012 - Bioanalytical Systems, Inc. (NASDAQ: BASI) (BASi) today announced financial results for the second
quarter and first half of fiscal 2012.
"BASi's second quarter results are
not indicative of the performance we expect from the company. We are taking a variety of actions on the revenue and cost sides
of our business that are designed to position the company for future success, and we are confident that our operating results will
improve as a result," said President and CEO Tony Chilton.
"We are committed to our strategy
to build on BASi's more than three decades of contract research experience to expand our business with the growing population of
small biotech and pharmaceutical companies that have become a major force in new drug discovery, while continuing to develop our
historically close relationships with major pharmaceutical clients. Pharmacological services and instrument sales were up in April
and early May compared to their run rates at the end of the second quarter, and our marketing initiatives in support of our clients'
drug discovery efforts, including the recently launched Discovery Center located in our headquarters facility in West Lafayette,
appear to be gaining traction. Demand for toxicology services appears to have bottomed, as we are seeing an increase in requests
for quotes for these services, an encouraging and long overdue sign of nascent recovery from the recession that has affected the
CRO industry so severely these past few years," Chilton said.
Jacqueline Lemke, who was named Vice President
of Finance & CFO in April, said, "We are moving forward as rapidly as possible on the restructuring of our bioanalytical
laboratory operations announced in March. The decommissioning of our laboratory in McMinnville, Oregon will be completed this month,
and the operations consolidated into our West Lafayette facility. We expect to book a $450,000 charge associated with these actions
in the current quarter. We also are evaluating several options to improve the financial performance of our laboratory in Warwickshire,
UK, and expect to announce a final decision and an estimate of associated costs, if any, in the next few weeks. We continue to
expect this laboratory restructuring program to reduce operating costs by more than $2 million annually.
"Separately, over the next three or
four months we are planning to take a variety of steps to reduce operating costs at our West Lafayette and Evansville facilities.
We believe we will realize savings of approximately $2.5 million annually from this effort, on top of the savings we anticipate
from the laboratory restructuring.
the next few months we expect to reduce operating costs by at least $4.5 million annually, bringing costs into proper alignment
with the current pace of our business while enhancing productivity and customer service through improved capacity utilization and
more efficient workflow. Together with the improved outlook for revenue Tony mentioned, we expect these cost reductions to position
BASi to deliver the growth and consistent profitability we are confident the company is capable of delivering."
For the three months
ended March 31, 2012, revenue decreased 17.3% to $6,966,000 compared to $8,423,000 for the second quarter of fiscal 2011. The net
loss for the second quarter of fiscal 2012 was $1,884,000, or $0.27 per share, which included pre-tax restructuring charges of
$64,000. This compares to net income of $483,000, or $0.10 per share, for the second quarter of fiscal 2011.
ended March 31, 2012, revenue decreased 12.3% to $14,482,000 from $16,513,000 for the first six months of fiscal 2011. The net
loss for the first six months of fiscal 2012 was $3,375,000, or $0.48 per share, which included pre-tax restructuring charges of
$64,000. This compares to net income for the first six months of fiscal 2011 of $793,000, or $0.16 per diluted share.
Cash used in operations
was $361,000 for this year's first six months compared to cash provided by operations of $1,785,000 for the first six months of
BASi reported cash and cash equivalents of $853,000, total long-term obligations of $1,051,000, and shareholders' equity of $12,395,000,
or $1.74 per outstanding share. Current liabilities at March 31, 2012 included mortgage debt of $6,170,000 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, working capital was $526,000, total long-term obligations were $6,913,000,
and shareholders' equity was $15,586,000, or $2.25 per outstanding share.
Earnings Conference Call
a conference call at 11:00 a.m. EDT this morning to discuss its results for the quarter. To participate in the call, dial 866.825.3209,
passcode #35250387 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 #71559788 after 2:00 p.m. EDT.
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.
[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 | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Service revenue | $ | 5,279 | $ | 6,446 | $ | 10,890 | $ | 12,589 | ||||||||
| Product revenue | 1,687 | 1,977 | 3,592 | 3,924 | ||||||||||||
| Total revenue | 6,966 | 8,423 | 14,482 | 16,513 | ||||||||||||
| Cost of service revenue | 5,066 | 4,833 | 10,322 | 9,501 | ||||||||||||
| Cost of product revenue | 757 | 793 | 1,535 | 1,499 | ||||||||||||
| Total cost of revenue | 5,823 | 5,626 | 11,857 | 11,000 | ||||||||||||
| Gross profit | 1,143 | 2,797 | 2,625 | 5,513 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 996 | 774 | 1,994 | 1,459 | ||||||||||||
| Research and development | 162 | 111 | 340 | 223 | ||||||||||||
| General and administrative | 1,626 | 1,262 | 3,234 | 2,643 | ||||||||||||
| Total operating expenses | 2,784 | 2,147 | 5,568 | 4,325 | ||||||||||||
| Restructuring charges | 64 | - | 64 | - | ||||||||||||
| Operating income (loss) | (1,705 | ) | 650 | (3,007 | ) | 1,188 | ||||||||||
| Interest expense | (179 | ) | (168 | ) | (368 | ) | (403 | ) | ||||||||
| Other income | - | 1 | - | 8 | ||||||||||||
| Income (loss) before income taxes | (1,884 | ) | 483 | (3,375 | ) | 793 | ||||||||||
| Income taxes | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (1,884 | ) | $ | 483 | $ | (3,375 | ) | $ | 793 | ||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustment | 23 | 29 | 22 | 13 | ||||||||||||
| Comprehensive income (loss) | $ | (1,861 | ) | $ | 512 | $ | (3,353 | ) | $ | 806 | ||||||
| Basic net income (loss) per share | $ | (0.27 | ) | $ | 0.10 | $ | (0.48 | ) | $ | 0.16 | ||||||
| Diluted net income (loss) per share | $ | (0.27 | ) | $ | 0.10 | $ | (0.48 | ) | $ | 0.16 | ||||||
| Weighted common shares outstanding: | ||||||||||||||||
| Basic | 7,034 | 4,915 | 6,989 | 4,915 | ||||||||||||
| Diluted | 7,034 | 5,080 | 6,989 | 5,025 |
BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| Mar. 31, | Sep. 30, | |||||||
| 2012 | 2011 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 853 | $ | 2,963 | ||||
| Accounts receivable | ||||||||
| Trade | 3,333 | 4,073 | ||||||
| Unbilled revenues and other | 1,315 | 1,116 | ||||||
| Inventories | 1,854 | 1,636 | ||||||
| Refundable income taxes | 6 | - | ||||||
| Prepaid expenses | 429 | 585 | ||||||
| Total current assets | 7,790 | 10,373 | ||||||
| Property and equipment, net | 20,329 | 20,399 | ||||||
| Goodwill | 1,383 | 1,383 | ||||||
| Intangible assets, net | 38 | 54 | ||||||
| Debt issue costs | 80 | 75 | ||||||
| Other assets | 581 | 62 | ||||||
| Total assets | $ | 29,678 | $ | 32,346 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,560 | $ | 1,764 | ||||
| Accrued expenses | 2,134 | 1,762 | ||||||
| Customer advances | 3,678 | 3,571 | ||||||
| Income tax accruals | 16 | 56 | ||||||
| Revolving line of credit | 1,100 | 1,346 | ||||||
| Current portion of capital lease obligation | 545 | 613 | ||||||
| Current portion of long-term debt | 6,199 | 735 | ||||||
| Total current liabilities | 16,232 | 9,847 | ||||||
| Capital lease obligation, less current portion | 1,051 | 1,071 | ||||||
| Long-term debt, less current portion | - | 5,842 | ||||||
| Shareholders' equity: | ||||||||
| Preferred shares, authorized 1,000,000 shares, no par value: | ||||||||
| 1,935 Series A shares at 1,000 stated value issued and outstanding at March 31, 2012 and 2,135 at September 30, 2011 | 1,935 | 2,135 | ||||||
| Common shares, no par value: | ||||||||
| Authorized 19,000,000 shares; 7,124,404 issued and outstanding at March 31, 2012 and 6,945,631 at September 30, 2011 | 1,743 | 1,698 | ||||||
| Additional paid-in capital | 19,725 | 19,408 | ||||||
| Accumulated deficit | (11,081 | ) | (7,706 | ) | ||||
| Accumulated other comprehensive income | 73 | 51 | ||||||
| Total shareholders' equity | 12,395 | 15,586 | ||||||
| Total liabilities and shareholders' equity | $ | 29,678 | $ | 32,346 |