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Abaxis Reports Q3 Fiscal 2009 Results

Abaxis, Inc. (Abaxis) has reported revenues of $27 million for the third quarter of fiscal 2009, up 5%, compared with the revenues of $25 million in the year-ago quarter. It has also reported a net income of $3.4 million, or $0.15 per diluted share, for the third quarter of fiscal 2009, compared with a net income of $3.2 million, or $0.14 per diluted share, in the year-ago quarter.

Quarterly Results: Instrument, reagent disc and hematology reagent revenues increased by an aggregate of $1.0 million, or 4%, for the quarter ended December 31, 2008, over the same period last year. The company’s effective tax rate in the quarter ended December 31, 2008 was 34%, compared to 35% for the same period last year.

Nine Month Results: For the nine-month period ended December 31, 2008, Abaxis reported revenues of $79.2 million, as compared with revenues of $73.8 million for the comparable period last year, an increase of 7%. Instrument, reagent disc and hematology reagent revenues increased by an aggregate of $5.5 million, or 8%, for the nine-month period ended December 31, 2008, over the same period last year. The company reported net income of $9.4 million, compared to $9.2 million for the same period last year. The company’s effective tax rate in the nine months ended December 31, 2008 was 36%, compared to 37% for the same period last year. The company reported diluted net income per share of $0.42 (calculated based on 22,325,000 shares) for the nine months ended December 31, 2008, compared to $0.41 per share (calculated based on 22,208,000 shares) for the same period last year.

Other Reported Financial Information: Reagent disc and hematology reagent revenues for the third quarter of fiscal 2009 were $16.8 million, up 9% over the $15.3 million reported in the same period last year. During the quarter, the company sold a total of 1,300,000 units of medical and veterinary reagent discs, an increase of 7% compared to a total of 1,212,000 units of medical and veterinary reagent discs sold during the same period last year. Medical sales in North America, excluding sales to the U.S. government, during the third quarter of fiscal 2009 were $4.7 million, an increase of 10% over last year’s comparable quarter. Total sales in the medical market for the third quarter of fiscal 2009 were $7.2 million, an increase of 19% over last year’s comparable quarter. Total sales in the veterinary market for the third quarter of fiscal 2009 were $17.9 million, a decrease of 1% over last year’s comparable quarter. Additionally, the company sold $11.3 million of veterinary reagent discs during each of the third quarters of fiscal 2009 and fiscal 2008.

The company ended the quarter with $74.6 million in cash, cash equivalents and short-term investments. As of December 31, 2008, the company had a total of $14.5 million in short-term investments, consisting entirely of certificates of deposits. During the third quarter of fiscal 2009, $28.4 million of the company’s auction rate securities were redeemed at 100% of par value.

Clint Severson, chairman and chief executive officer of Abaxis, commented, “Given the current economic conditions, we are pleased with the continued growth in overall revenues and net income for the quarter. We remain focused on improving operating efficiencies and aggressively managing operating expenses. Gross margins improved to 56% for the quarter, an increase of 300 basis points, compared to last year’s third quarter. Additionally, reagent disc margins improved to 66%, an increase of 290 basis points, compared to last year’s third quarter. The company has a very strong balance sheet with a total of $74.6 million in cash, cash equivalents and short-term investments and no debt; and a solid recurring revenue stream, comprised of reagent discs and hematology reagents, which represents 62% of sales for the third quarter. Abaxis believes that it is well positioned for future growth.”

Severson continued, “The quarter was highlighted by the continued strength in our consumable business. Medical reagent disc unit sales increased 48% compared to the third quarter of fiscal 2008. Medical sales continued to grow during the quarter and accounted for 27% of total sales. Also during the quarter we achieved another significant milestone, as we received CLIA waived status from the United States Food and Drug Administration on two additional medical panels — the Renal Function and MetLyte 8 — bringing the total number of CLIA waived reagent disc panels in our portfolio to 11.”