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BASi Releases Earnings for
First Quarter of Fiscal 2020
WEST LAFAYETTE, IN, February
14, 2020 -- Bioanalytical Systems, Inc. (NASDAQ:BASI) ("BASi", the "Company", "We" or "Our"),
doing business as Inotiv, a leading provider of nonclinical and analytical contract research services, today announced financial
results for the three months ended December 31, 2019.
During the first fiscal quarter of fiscal
2020, BASi saw significant year-over-year growth. In addition, BASi has recently completed several initiatives intended to promote
additional growth in future periods. These initiatives included: (1) Completing further integration, investments and hiring in
the Gaithersburg, Maryland, facility (Gaithersburg operations were purchased from Smithers Avanza in May of 2019), (2) Closing
on the purchase of Pre-Clinical Research Services, Inc.'s ("PCRS") business, and related real property located
in Ft Collins, Colorado, in December of 2019, (3) Completing the construction of the Evansville facility expansion and initiating
hiring to support growth (the Evansville facility expansion is expected to generate attributable revenue by the end of Q-2 2020),
(4) Further investing and hiring to support the development of the Discovery business in the St. Louis facility, (5) Completing
the introduction of a new name (Inotiv), branding and website for the services business, (6) Closing on additional financing to
support our acquisitions and future capital plans and (7) implementing a new accounting software system throughout the company.
Robert Leasure, Jr., BASi's President
and Chief Executive Officer commented, "Our financial results for the first three months of fiscal 2020 were impacted by
growth initiatives and planned third-party non-recurring expenses, along with internal hiring and training. Our new orders remain
strong, as demonstrated by the growth in customer deposits on the balance sheet. We continue to enhance and grow our capacity,
scientific capabilities, client service offerings and our unwavering focus on the client experience."
"We remain confident in
what we have accomplished and our business strategy. We believe many of our recent investments in people, facilities, equipment
and software should allow us to enhance our service offerings and sustain growth into 2020," Mr. Leasure concluded.
First Quarter Results
For the quarter, revenue amounted
to $12,918,000, a 49.7% increase from $8,625,000 in the first quarter of fiscal 2019. Revenue growth was driven by incremental
sales associated with organic growth of the service business, as well as sales attributable to the Smithers Avanza acquisition
and the inclusion of one month of sales attributable to the PCRS acquisition.
Net loss for the first quarter
of fiscal 2020 amounted to $1,426,000, or $0.13 per diluted share, compared to a net loss of $85,000, or $0.01 per diluted share
for the first quarter of fiscal 2019.
Net loss and earnings per share were impacted
by, nonrecurring, one-time costs related to acquisitions and integration, refinancing, costs related to launching our new brand,
recruiting costs for leadership and scientific staff additions and consulting fees related to the adoption of two accounting standards.
Even though the Company experienced overall service sales increases, there was a decrease in bioanalytical sales during the quarter
versus the same quarter last year. Third-party, non-recurring charges of approximately $700,000 were expensed in the first quarter
of fiscal 2020, as were all internal hiring, acquisition, integration, and training related costs. We do not expect a majority
of these costs to continue or materially impact future fiscal quarters.
Additionally, in the first quarter of fiscal
2019, we benefited from the initial reduction in our United Kingdom lease liability for a portion of the reserve for lease related
liabilities that were no longer within the statute of limitations. This benefit of $491 compares to a benefit of only $45 in the
first quarter of fiscal 2020.
Adjusted EBITDA for the first
quarter of fiscal 2020 amounted to $496,000, compared to Adjusted EBITDA for the first quarter of fiscal 2019 of $436,000.
First Quarter Segment Results
Service revenue for the first quarter of
fiscal 2020 increased 57.0% to $12,142,000 compared to $7,735,000 for the same period in fiscal 2019. Nonclinical services revenues
increased $4,665,000 in the first quarter of fiscal 2020. Included in the growth was $2,695,000 and $381,000 of revenue related
to the acquisitions of the Smithers Avanza and PCRS businesses, respectively. Bioanalytical analysis revenues decreased by $432,000,
while other laboratory revenues increased $174,000 in the first quarter of fiscal 2020.
Cost of Service revenue as a percentage
of Service revenue increased slightly to 73.4% during the first quarter of fiscal 2020 from 72.4% in the comparable period in fiscal
2019. The principal cause of this increase was the mix of service revenues favoring nonclinical revenues versus bioanalytical service
Sales in our Products segment decreased
in the first quarter of fiscal 2020 from $890,000 to $776,000 when compared to the same period in the prior fiscal year.
Cost of Products revenue as a percentage
of Products revenue in the first quarter of fiscal 2020 decreased to 68.2% from 68.4% in the comparable prior-year period, mainly
due to the mix of products sold.
Cash Provided by Operating Activities
Cash provided by operating activities was
$1,454,000 for the first quarter of fiscal 2020 compared to $907,000 for the first quarter of fiscal 2019.
As of December 31, 2019, the Company had
$511,000 in cash and cash equivalents, a $725,000 balance on its general line of credit, a $4,247,000 balance on its construction
line of credit, a $1,236,000 balance on its equipment line of credit, a $948,000 balance on its 2019 capex line of credit and a
$435,000 balance on its 2020 capex line of credit. During the first three months of fiscal 2020, cash from operations, cash on
hand and financing activities funded capital expenditures of approximately $2,165,000 for the expansion of our Evansville facility
and related equipment, investment in our Gaithersburg capacity, upgrades in software, as well as laboratory equipment and computer
On December 1, 2019, the Company acquired
from Pre-Clinical Research Services, Inc. ("Seller") substantially all of the assets used by the Seller in connection
with the performance of surgical and medical device in-vivo mammalian CRO services. The Company also purchased a building
and real estate, in Fort Collins used in the Seller's current business and real estate which will be available for future
expansions in Ft. Collins. The consideration for the acquisition consisted of $1,500,000 in cash, subject to certain adjustments,
240,000 of the Company's common shares and an unsecured promissory note in the initial principal amount of $800,000. The
consideration for the related building and real estate amounted to $2,500,000. The Company funded the cash portion of the purchase
price for the acquisition with cash on hand and the net proceeds from the refinancing of its credit arrangements with First Internet
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 three months ended December 31, 2019 and 2018. Adjusted EBITDA as reported herein refers to
a financial performance measure that excludes from net income (loss) income statement line items interest expense and income taxes
(benefit) expense, as well as non-cash charges for depreciation and amortization, stock option (benefit) expense, United Kingdom
lease liability reversal benefit, non-recurring acquisition and integration costs and other non-recurring third party costs.
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 Adjusted 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 our results and
to illustrate our 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., operating as Inotiv
BASi, operating as Inotiv, is a pharmaceutical
development company providing contract research services and monitoring instruments to emerging pharmaceutical companies and the
world's leading drug development companies and medical research organizations. The Company focuses on developing innovative services