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

BASi Reports Second Quarter

WEST LAFAYETTE, IN, May

15, 2017 -- Bioanalytical Systems, Inc. (NASDAQ:BASI) ("BASi" or the "Company") today announced

financial results for the second quarter and first six months of fiscal 2017.

Second Quarter Results

For the three months ended March

31, 2017, revenue amounted to $6,359,000, a 19% increase from $5,339,000 in the second quarter of fiscal 2016.

Service revenue for the second

quarter of fiscal 2017 increased 22% to $4,962,000, compared to $4,053,000 for the same period in fiscal 2016. Preclinical services

revenues led the improvement due to an overall increase in the number of studies in the second quarter versus the prior year period.

Other laboratory services revenues were positively impacted by higher discovery and pharmaceutical analysis revenues in the second

quarter of fiscal 2017 versus the comparable period in fiscal 2016. Also, archive services revenue added $229,000 to other laboratory

services revenue in the second fiscal quarter of 2017. Bioanalytical analysis revenues declined due to fewer samples received and

analyzed in the second quarter of fiscal 2017 and an unfavorable mix favoring method development and validation projects during

that time period, which generate lower revenue but involve more dedicated resources.

Sales in our Products segment

increased 9% in the second quarter of fiscal 2017 from $1,286,000 to $1,397,000 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 related consumables

over the same period in the prior fiscal year.

Gross profit increased to $2,043,000,

or 32% of revenue, in the second quarter of fiscal 2017, compared to $1,316,000, or 25% of revenue, during the comparable fiscal

2016 period. The principal causes for the improvement were the increase in revenue, which led to a higher absorption of the fixed

costs in our business, and a more favorable sales mix.

Operating expenses for the second quarter

of fiscal 2017 decreased 6% to $1,488,000 compared to $1,578,000 during the second quarter of fiscal 2016. This decrease is mainly

due to lower salaries and benefits from the loss of business development and other management personnel in the second fiscal quarter

of 2017 compared to the same period in fiscal 2016. These reductions were partially offset by higher consulting services.

Operating income for the second

quarter of fiscal 2017 amounted to $555,000 compared to an operating loss of $262,000 for the second quarter of fiscal 2016. The

improvement was primarily due to higher revenue and the improved operating margins, and to a lesser extent, to decreased operating

Net income for the second quarter

of fiscal 2017 amounted to $417,000, or $0.05 per diluted share, compared to a net loss of $254,000, or $0.03 per diluted share

for the second quarter of fiscal 2016.

EBITDA for the second quarter

of fiscal 2017, amounted to $937,000, compared to EBITDA of $84,000 for the second quarter of fiscal 2016.

For the six months ended March

31, 2017, revenue amounted to $12,533,000 a 22% increase from $10,234,000 in the second quarter of fiscal 2016.

Service revenue increased 26%

in the six months ended March 31, 2017 to $10,226,000 from $8,108,000 in the first six months of fiscal 2016. The increase in preclinical

services led the improvement resulting from an overall increase in the number of studies from 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 $237,000 to other laboratory services revenue in fiscal 2017. Bioanalytical

analysis revenues decreased due to fewer samples received and analyzed in fiscal 2017 in addition to an unfavorable mix favoring

method development and validation projects during this time period, which generate lower revenue but involve more dedicated resources.

Sales in our Products segment

increased 8% in the first six months ended March 31, 2017, from $2,126,000 to $2,307,000 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 related consumables over the same period in the prior fiscal year.

Gross profit in the six months

ended March 31, 2017 increased to $3,902,000, or 31% of revenue, compared to $2,300,000, or 22% of revenue, for the same period

of the prior fiscal year. The improvement was driven by a increase in revenues which led to a higher absorption of fixed costs

and a favorable change in sales mix in the Products segment.

Operating expenses for the six

months ended March 31, 2017 increased 5% to $3,253,000 from $3,091,000 for the comparable fiscal 2016 period. The principal reasons

for the increase were the accrual for the severance for our former Chief Executive Officer, amounting to approximately $200,000,

as well as higher consulting services. These items were offset in part by decreased spending for salaries and benefits, outside

services and employee search costs.

Operating income for the first

six months of fiscal 2017 amounted to $649,000 compared to an operating loss of $791,000 for the first six months of fiscal 2016.

The improvement was primarily due to higher revenue and the improved operating margins partially offset by increased operating

Net income amounted to $434,000,

or $0.05 per diluted share, for the first six months of fiscal 2017. Net loss amounted to $760,000, or $0.09 per diluted share,

for the first six months of fiscal 2016.

EBITDA was $1,417,000 for the

first six months of fiscal 2017, compared to a negative EBITDA of $87,000 for the first six months of fiscal 2016.

Cash Provided by Operating

Cash provided by operating activities

was $561,000 for the first six months of fiscal 2017 due in part to the improved operating income performance during the first

half of the year and lower working capital levels. The Company had $419,000 in cash and cash equivalents at March 31, 2017.

During the first six months of fiscal 2017, cash from operations funded higher working capital levels and capital expenditures

for building improvements and equipment of approximately $152,000. The amount outstanding under the Company's line of credit

was $1,419,000 at March 31, 2017 compared to $1,358,000 at September 30, 2016.

Credit Arrangements Default

During fiscal 2016 and throughout

the first six months of fiscal 2017 we have operated either in default of, or under forbearance arrangements with respect to our

credit agreements with Huntington National Bank ("Huntington Bank"). Effective January 31, 2017, we entered into a

Fifth Forbearance Agreement and Sixth Amendment to Credit Agreement (the "Fifth Forbearance Agreement") with Huntington

Bank. Pursuant to the Fifth Forbearance Agreement, Huntington Bank agreed to forbear from exercising its rights and remedies under

the Company's credit facility and from terminating the Company's related swap agreement with respect to the Company's

non-compliance with applicable financial covenants under the credit agreement and any further non-compliance with such covenants

until July 31, 2017. If we are unable to refinance our indebtedness before the end of the forbearance period, and were Huntington

Bank to demand payment on the outstanding debt under our credit arrangements, we would have insufficient funds to satisfy that

obligation. In such case, in addition to the ability to immediately demand payment of the outstanding debt under our term loan

and revolving loan, Huntington Bank would have the right to exercise its security interest, to take possession of or sell the underlying

collateral, to increase interest accruing on the debt, to refrain from making additional advances under the revolving loan, and

to terminate our interest rate swap. We have classified the entire term loan payable to Huntington Bank and the interest rate swap

agreement with Huntington Bank as current liabilities of the Company.

The Company's Board of

Directors has directed management to seek alternatives that will enable the Company to repay its indebtedness to Huntington Bank

in full upon the expiration of the forbearance period. The following alternatives, among others, are being evaluated: replacement

financing, the potential disposition of certain assets and the possible sale of the West Lafayette building. Management has been

reviewing details of all current account management and marketing programs as well as all invoicing and top-line growth initiatives.

Although the Company continues

to face the near term challenge of replacing its Huntington Bank debt, the operating performance for the three and six months ended

March 31, 2017 is encouraging. The financial results for the three and six months ended March 31, 2017 reflect Management's initiatives

aimed at growing revenue, reducing costs and generating more cash flow. The additional revenues for archive services and the recent

reductions in inventory and accounts payable are examples of these initiatives. For the remainder of fiscal 2017, the entire BASi

team remains committed to the Company's core priorities and is focused on seeking additional opportunities to increase revenue

and profits. For example, we are exploring the use of distributor and reseller arrangements to boost sales in our products business.