BASi Releases Earnings for Fourth Quarter of Fiscal 2020
Rhea-AI Summary
Bioanalytical Systems, Inc. (NASDAQ:BASI) reported a 38.6% revenue increase to $60.5 million for FY 2020, driven by organic growth and acquisitions. However, the net loss widened to $(4.7 million), or $(0.43) per diluted share, compared to $(0.8 million) in FY 2019. Q4 FY 2020 revenue rose 6.7%, but gross profit declined due to increased fixed costs. The company’s backlog surged 57.6% to $43.8 million, indicating strong future potential. Despite challenges from COVID-19, management remains optimistic about growth in fiscal 2021, citing a book-to-bill ratio of 1.48x as a positive sign.
Positive
- Revenue increased by 38.6% to $60.5 million for FY 2020.
- Strong backlog of $43.8 million, up 57.6% year-over-year.
- Book-to-bill ratio of 1.48x for Q4 FY 2020.
Negative
- Net loss of $4.7 million for FY 2020, worsening from a loss of $0.8 million in FY 2019.
- Fourth quarter gross profit decreased to $4.6 million from $5.1 million in Q4 FY 2019.
- Operating loss of $1.4 million in Q4 FY 2020 compared to a profit of $0.5 million in Q4 FY 2019.
News Market Reaction – BASI
In the trading session that priced this news, BASI gained 8.56%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
WEST LAFAYETTE, Ind., Dec. 21, 2020 (GLOBE NEWSWIRE) -- Bioanalytical Systems, Inc. (NASDAQ:BASI) (“BASi”, the “Company”, “We”, “Our” or “Inotiv”), doing business as Inotiv, a leading provider of nonclinical and analytical contract research services, today announced financial results for the three and twelve months ended September 30, 2020.
FY 2020 Highlights
- Revenue increased
38.6% to$60.5 million , from$43.6 million for the twelve months ended September 30, 2019 (“FY 2019”), driven by$5.6 million of organic growth and$11.3 million of incremental revenue from the acquisitions in 2019 of Smithers Avanza Toxicology Services and Pre-Clinical Research Services, Inc. (“PCRS”). - Net loss was
$4.7 million , or$(0.43) per diluted share, compared to a net loss of$0.8 million , or$(0.08) per diluted share, in FY 2019. - Adjusted EBITDA equaled approximately
$2.5 million , compared to$2.8 million in FY 2019.
Q4 FY 2020 Highlights
- Revenue grew
6.7% to$15.8 million , from$14.8 million during the fiscal quarter ended September 30, 2019 (“Q4 FY 2019”), driven by$1.6 million of incremental revenue attributable to PCRS operations, which the Company acquired on December 1, 2019. - Gross profit decreased to
$4.6 million , from$5.1 million in Q4 FY 2019, primarily reflecting higher fixed costs from investments in expanded capacity to support future growth. - Operating loss totaled
$1.4 million , compared to operating profit of$0.5 million in Q4 FY 2019, reflecting lower gross profit and higher general and administrative expenses for growth-oriented investments in infrastructure and systems and for the PCRS acquisition. - Net loss was
$1.8 million , or$(0.16) per diluted share, compared to net income of$0.3 million , or$0.03 per diluted share, in Q4 FY 2019. - Adjusted EBITDA equaled approximately
$0.1 million , compared to Adjusted EBITDA of$1.3 million in Q4 FY 2019. - Book-to-bill ratio of 1.48x for services business.
- Ending backlog of
$43.8 million , up57.6% compared to$27.8 million at the end of Q4 FY 2019.
Robert Leasure, Jr., the Company's President and Chief Executive Officer, commented, “As we look back at fiscal 2020, we can see it was the year of the unexpected and our Company faced tremendous challenges related to COVID-19. As a result of the pandemic, we experienced customer delays or pauses of studies, and there were other pandemic-related impacts on our employees, suppliers and clients. As part of the 'essential critical infrastructure' industry, we believe we had a special responsibility to maintain business continuity and a normal work schedule to the greatest extent possible, and accordingly we accepted funds under the Paycheck Protection Program ('PPP') in order to help us safely maintain our operations. I want to thank our team for their efforts during these challenging times.”
Mr. Leasure continued, “As might be expected, the pandemic had a negative impact on our financial results. Despite the challenges, I believe our team stayed focused on making good, long-term decisions to continue our strategy of building our business by adding services, capacity, systems and talent, and enhancing our client services, in order to create a strong foundation for long-term growth. We witnessed an increase in quoting and awarded business as we progressed through the fourth quarter and into October. We were also able to complete a major expansion project at our Evansville location, complete the acquisition and integration of PCRS in Fort Collins, CO, complete the integration of our Smithers Avanza Toxicology Services acquisition in Gaithersburg, MD, continue to make significant investments in technology and services for our laboratories, and introduce our new Inotiv name and branding for our service businesses.”
Mr. Leasure concluded, “Our fourth quarter book-to-bill ratio of 1.48x and quarter-end backlog of
“As we execute on our growth strategy, we intend to continue to update the Company’s governance and other practices. At the 2021 annual meeting of shareholders, we will propose adopting Inotiv, Inc. as our formal corporate name. In September 2020, we presented at an investor conference for the first time under the name Inotiv and we intend to incorporate quarterly earnings calls in fiscal 2021.”
Fiscal 2020 Results
For fiscal 2020, revenue amounted to
For fiscal 2020, our Service revenue increased
Cost of Service revenue as a percentage of Service revenue decreased to
Sales in our Product segment decreased
Cost of Product revenue as a percentage of Product revenue in fiscal 2020 increased to
Net loss for fiscal 2020 amounted to
Net loss and earnings per share were impacted by increased costs associated with the acquisitions of Smithers Avanza Toxicology Services and PCRS, plus increased salaries, wages, benefits and non-cash stock compensation by adding employees to support anticipated future growth and build infrastructure, the introduction of our new name and branding efforts, severance expense related to changes in management, increased depreciation expense, increased corporate expenses associated with professional fees related to the PCRS acquisition, and non-recurring expenses related to recruiting, implementing a new accounting system, adopting two new accounting standards, and other one-time expenses. The one-time, non-recurring expenses for fiscal 2020, were approximately
Adjusted EBITDA for fiscal 2020 amounted to
Fourth Quarter Results
For the quarter, revenue amounted to
Service revenue for the fourth quarter of fiscal 2020 increased
Cost of Service revenue as a percentage of Service revenue increased to
Sales in our Product segment decreased
Cost of Product revenue as a percentage of Product revenue in the quarter ended September 30, 2020, increased to
The book-to-bill ratio for the fourth quarter of 2020 was 1.48x which resulted in a 1.26x ratio for fiscal 2020. We continued to build our infrastructure for growth, which included additional headcount and investments in research and development, technology, and systems. We believe the benefit of the PPP loan has allowed us to continue to retain our employees and safely maintain business operations through recent periods. Our backlog going into 2021 was
Net loss for the fourth quarter of fiscal 2020 amounted to a loss of
Net loss and earnings per share were impacted by reduced gross margin and an increase in general and administrative expenses. The decrease in gross margin was a result of increasing fixed cost and investments into growing internal capacity. Therefore, the fourth quarter reflected developing unutilized capacity. The increase in general and administrative cost was due to additional expenses related to PCRS operations that were not present during the quarter ended September 30, 2019, and additional expenses incurred to further develop our infrastructure and systems. We believe we needed to enhance our systems and processes to support future growth. General and administrative expense includes depreciation and amortization, salaries, wages, benefits and non-cash stock compensation. Increased depreciation and non-recurring expense relating to implementing a new accounting system was approximately
Adjusted EBITDA for the fourth quarter of fiscal 2020 amounted to
Cash Provided by Operating Activities
Cash provided by operating activities was
As of September 30, 2020, the Company had
On December 18, 2020, the Company entered into an amendment to its Amended and Restated Credit Agreement with First Internet Bank to modify the restrictive covenant requirements as related to the cash flow leverage and fixed charge coverage ratios, to extend the term of the Company’s
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 and twelve months ended September 30, 2020 and 2019. 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, such as recruiting costs, consulting fees related to the adoption of two accounting standards, and expenses for rebranding and new website launch.
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 the Company
The Company 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 supporting its clients’ discovery and development objectives for improved decision-making and accelerated goal attainment. The Company’s products focus on increasing efficiency, improving data, and reducing the cost of taking new drugs to market. Visit inotivco.com for more information about the Company.
This release may contain 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 and regulatory standards, the timing of acquisitions and the successful closing, integration and business and financial impact thereof, the impact of the COVID-19 pandemic on the economy, demand for our services and products and our operations, including the measures taken by governmental authorities to address the pandemic, which may precipitate or exacerbate other risks and/or uncertainties and various other market and operating risks, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission.
(SEE BELOW FOR CONSOLIDATED FINANCIAL STATEMENTS)
BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||||
| Service revenue | $ | 14,992 | $ | 13,493 | $ | 57,177 | $ | 39,048 | |||||
| Product revenue | 782 | 1,293 | 3,292 | 4,568 | |||||||||
| Total revenue | 15,774 | 14,786 | 60,469 | 43,616 | |||||||||
| Cost of service revenue | 10,655 | 9,085 | 40,006 | 27,435 | |||||||||
| Cost of product revenue | 496 | 612 | 2,226 | 2,146 | |||||||||
| Total cost of revenue | 11,151 | 9,697 | 42,232 | 29,581 | |||||||||
| Gross profit | 4,623 | 5,089 | 18,237 | 14,035 | |||||||||
| Operating expenses: | |||||||||||||
| Selling | 701 | 876 | 3,373 | 2,914 | |||||||||
| Research and development | 521 | 230 | 950 | 627 | |||||||||
| General and administrative | 4,772 | 3,479 | 16,977 | 10,647 | |||||||||
| Total operating expenses | 5,994 | 4,585 | 21,300 | 14,188 | |||||||||
| Operating loss | (1,371 | ) | 504 | (3,063 | ) | (153 | ) | ||||||
| Interest expense | (405 | ) | (216 | ) | (1,490 | ) | (642 | ) | |||||
| Other income | 2 | 4 | 15 | 9 | |||||||||
| Net loss before income taxes | (1,774 | ) | 292 | (4,538 | ) | (786 | ) | ||||||
| Income tax expense | 18 | 2 | 147 | 4 | |||||||||
| Net loss | $ | (1,792 | ) | $ | 290 | $ | (4,685 | ) | $ | (790 | ) | ||
| Basic net loss per share | $ | (0.16 | ) | $ | 0.03 | $ | (0.43 | ) | $ | (0.08 | ) | ||
| Diluted net loss per share | $ | (0.16 | ) | $ | 0.03 | $ | (0.43 | ) | $ | (0.08 | ) | ||
| Weighted common shares outstanding: | |||||||||||||
| Basic | 10,976 | 10,503 | 10,851 | 10,383 | |||||||||
| Diluted | 10,976 | 10,647 | 10,851 | 10,383 | |||||||||
Note; Certain prior year expenses have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| September 30, 2020 | September 30, 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,406 | $ | 606 | ||||
| Accounts receivable | ||||||||
| Trade, net of allowance of | 8,681 | 7,178 | ||||||
| Unbilled revenues and other | 2,142 | 2,342 | ||||||
| Inventories, net | 700 | 1,095 | ||||||
| Prepaid expenses | 2,371 | 1,200 | ||||||
| Total current assets | 15,300 | 12,421 | ||||||
| Property and equipment, net | 28,729 | 22,828 | ||||||
| Operating lease right-of use-assets, net | 4,001 | — | ||||||
| Finance lease right-to use assets, net | 4,778 | — | ||||||
| Goodwill | 4,368 | 3,617 | ||||||
| Other intangible assets, net | 4,261 | 2,883 | ||||||
| Lease rent receivable | 75 | 130 | ||||||
| Deferred tax asset | — | 31 | ||||||
| Other assets | 81 | 70 | ||||||
| Total assets | $ | 61,593 | $ | 41,980 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,196 | $ | 4,941 | ||||
| Restructuring liability | 168 | 349 | ||||||
| Accrued expenses | 2,688 | 2,656 | ||||||
| Customer advances | 11,392 | 6,726 | ||||||
| Revolving line of credit | — | 1,063 | ||||||
| Capex line of credit | 2,613 | 655 | ||||||
| Current portion on long-term operating lease | 866 | — | ||||||
| Current portion of long-term finance lease | 4,728 | — | ||||||
| Current portion of long-term debt | 5,991 | 1,109 | ||||||
| Total current liabilities | 31,642 | 17,499 | ||||||
| Long-term operating leases, net | 3,344 | — | ||||||
| Long-term finance leases, net | 44 | — | ||||||
| Long-term debt, less current portion, net of debt issuance costs | 18,826 | 13,771 | ||||||
| Deferred tax liabilities | 141 | — | ||||||
| Total liabilities | 53,997 | 31,270 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred shares, authorized 1,000,000 shares, no par value: | ||||||||
| 25 Series A shares at September 30, 2020 and 35 Series A shares at September 30, 2019 issued and outstanding at | 25 | 35 | ||||||
| Common shares, no par value: | ||||||||
| Authorized 19,000,000 shares; 10,977,675 issued and outstanding at September 30, 2020 and 10,510,694 at September 30, 2019 | 2,706 | 2,589 | ||||||
| Additional paid in capital | 26,775 | 25,183 | ||||||
| Accumulated deficit | (21,910 | ) | (17,097 | ) | ||||
| Total shareholders’ equity | 7,596 | 10,710 | ||||||
| Total liabilities and shareholders’ equity | $ | 61,593 | $ | 41,980 | ||||
| BIOANALYTICAL SYSTEMS, INC. | |||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP EARNINGS | |||||||||||||||||
| (In thousands) (Unaudited) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| September 30 | September 30 | ||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| GAAP Net income (loss) | $ | (1,792 | ) | $ | 290 | $ | (4,685 | ) | $ | (790 | ) | ||||||
| Add back: | Interest expense | 405 | 216 | 1,490 | 642 | ||||||||||||
| Income taxes (benefit) expense | 18 | 2 | 147 | 4 | |||||||||||||
| Depreciation and amortization | 1,212 | 636 | 4,074 | 2,673 | |||||||||||||
| Stock option expense | 160 | 82 | 540 | 278 | |||||||||||||
| United Kingdom lease liability reversal benefit | 11 | (78 | ) | (180 | ) | (701 | ) | ||||||||||
| Acquisition and integration costs | — | 174 | 339 | 568 | |||||||||||||
| Other non-recurring, third-party costs | 41 | 8 | 823 | 160 | |||||||||||||
| Adjusted EBITDA | $ | 55 | $ | 1,330 | $ | 2,548 | $ | 2,834 | |||||||||
| Adjusted EBITDA - Earnings before interest expense, income taxes (benefit) expense, depreciation and amortization, stock option expense, United Kingdom lease liability reversal benefit and foreign currency impact on liability, non-recurring acquisition and integration costs and other non-recurring third-party costs. | |||||||||||||||||
FOR MORE INFORMATION:
Company Contact:
Beth A. Taylor
Chief Financial Officer
Phone: 765.497.8381
btaylor@inotivco.com