Full Press Release Details
| FOR MORE INFORMATION: | Company Contact: | |
| Jill C Blumhoff | ||
| Chief Financial Officer | ||
| Phone: 765.497.8381 | ||
| jblumhoff@BASinc.com |
2016 Full Year and Fourth Quarter Results
WEST LAFAYETTE, IN, December
22, 2016 -- Bioanalytical Systems, Inc. (NASDAQ:BASI) ("BASi" or the "Company") today announced
financial results for the full fiscal year and fourth quarter ended September 30, 2016.
For the twelve months ended September
30, 2016, revenues decreased 9.9% to $20,441,000 from $22,698,000 in fiscal 2015.
Service revenue for fiscal 2016
decreased 10.4% to $15,924,000 compared to $17,768,000 for fiscal 2015. Our Service revenue was negatively impacted by fewer bioequivalence
studies in fiscal 2016 versus fiscal 2015, as well as fewer samples received and analyzed in fiscal 2016. Service revenue was also
negatively impacted by the increase in method development and validation projects, which generate lower revenue but involve more
dedicated resources. These declines were partially offset by an increase in our preclinical services revenue in fiscal 2016, due
to an increase in the number of studies from the prior year.
Product revenue decreased 8.4%
for fiscal 2016 to $4,517,000 as compared to $4,930,000 for fiscal 2015. Results in fiscal 2016 were impacted by lower sales of
analytical and Culex instruments as compared to the prior fiscal year.
Gross profit for fiscal 2016
decreased to $4,425,000, or 21.6% of revenue, compared to $7,489,000, or 33.0% of revenue, for the prior fiscal year. The principal
cause for the decrease was the decline in services revenue which led to lower absorption of the fixed costs in our business.
Operating expenses for fiscal 2016 increased
to $7,465,000 compared to $6,580,000 in fiscal 2015. The increase in operating expenses year-over-year resulted primarily from
a goodwill impairment charge of $971,000 in fiscal 2016 and a mediation settlement which reduced operating expenses by $605,000,
net of legal expenses, in fiscal 2015. This increase was partially offset by $286,000 in additional building rental income in fiscal
2016 compared to one year ago as well as the recognition of a reserve for potential bad debt amounting to $505,000 in fiscal 2015
that did not recur in fiscal 2016.
Net loss for fiscal 2016 amounted
to $3,230,000, or $0.40 per diluted share, compared to net income of $1,089,000, or $0.07 per diluted share, for fiscal 2015.
Adjusted EBITDA for fiscal 2016
was negative $615,000 as compared to a positive Adjusted EBITDA for fiscal 2015 of $2,402,000.
Fourth Quarter Results
For the three months ended September
30, 2016, revenue was $5,154,000 a 3.6% increase from $4,977,000 in the fourth quarter of fiscal 2015.
Service revenue for the fourth
quarter of fiscal 2016 increased 5.3% to $4,043,000 compared to $3,839,000 for the same period in fiscal 2015. This increase was
due primarily to higher Preclinical services revenues as a result of new orders and projects.
Sales in our Product segment
decreased 2.4% in the fourth quarter of fiscal 2016 to $1,111,000 from $1,138,000 in the same period in fiscal 2015. The majority
of the decrease stems from lower instrument sales from our BASi Culex automated in-vivo sampling line versus
the same period in fiscal 2015.
Gross profit decreased to $952,000,
or 18.5% of revenue, in the fourth quarter of fiscal 2016, compared to $1,293,000, or 26.0% of revenue, during the comparable fiscal
2015 period. The principal cause for the decrease was the higher scientific professional services incurred in the fourth quarter
of fiscal 2016 due to the timing of certain studies.
Operating expenses for the fourth
quarter of fiscal 2016 increased to $2,836,000 compared to $2,088,000 during the fourth quarter of fiscal 2015. The principal reason
for the increase was a goodwill impairment charge of $971,000 in the fourth quarter of fiscal 2016. This charge was partially offset
by the recognition of a reserve for potential bad debt amounting to $505,000 in the fourth quarter of fiscal 2015 that did not
recur in fiscal 2016.
Net loss for the fourth quarter
of fiscal 2016 amounted to $2,037,000, or $0.25 per diluted share, compared to a net loss of $721,000, or $0.09 per diluted share,
for the fourth quarter of fiscal 2015.
Adjusted EBITDA was negative
$526,000 for the fourth quarter of fiscal 2016, compared to a negative Adjusted EBITDA of $439,000 for the fourth quarter of fiscal
Sources and Uses of Cash
Cash provided by operating activities
was $1,060,000 for fiscal 2016, a decrease from $2,104,000 in fiscal 2015, due to the operating loss in fiscal 2016, offset in
part by slightly lower working capital levels. The Company had $386,000 in cash and cash equivalents at September 30, 2016.
During fiscal 2016, proceeds from borrowings net of repayments, and cash on hand funded capital expenditures for plant, machinery
and equipment of approximately $1,256,000.
Credit Arrangements Default
During fiscal 2016 we have operated either
in default of, or under forbearance arrangements with respect to, our credit agreements with Huntington Bank. Effective October
31, 2016, we entered into a Fourth Forbearance Agreement and Fifth Amendment to Credit Agreement (the "Fourth Forbearance
Agreement") with Huntington Bank. Pursuant to the Fourth 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 January 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.
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 Company continues to explore initiatives to address solutions to our
credit issues, including but not limited to, the potential disposition of certain of its assets as well as a possible sale and
leaseback of the building in West Lafayette, Indiana. Management has been reviewing details of all current account management,
pricing strategies and marketing programs as well as invoicing and top line growth initiatives around focused strength areas. Management
has been, and continues to be actively engaged in more effectively controlling operating costs in the short term, as they strive
for long term stabilization and growth.
As of May 11, 2016, the remaining
unexercised Class A warrants from our 2011 public offering have expired. The liability was reduced to zero in our third fiscal
quarter of 2016. As a result, there were no additional charges to the Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss) following the third quarter of fiscal 2016.
Jill Blumhoff, BASi's Vice
President of Finance and Chief Financial Officer commented, "Our performance in the fourth quarter reflects the recent trends
we have been experiencing. There is no denying that we have encountered many challenges during the course of this fiscal year.
However, we remain focused on positioning our Company for success by concentrating on rectifying our liquidity position as well
as expanding market share and attracting and retaining superior talent. The management team continues to analyze liquidity alternatives
and the factors that impacted our fiscal 2016 results and how they may impact our outlook for the coming fiscal year, and is working
with the Board to consider what steps we may take to address these issues."
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 full fiscal year and fourth quarter ended September 30, 2016 and 2015, respectively.
Adjusted EBITDA refers to a financial performance measure that excludes certain income statement line items, such as interest,
taxes, depreciation, and amortization. Adjusted 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