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Bioanalytical Systems, Inc., Announces First Quarter Fiscal 2021 Financial Results

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Bioanalytical Systems, Inc.
·11 min read
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WEST LAFAYETTE, Ind., Feb. 09, 2021 (GLOBE NEWSWIRE) -- Bioanalytical Systems, Inc. (NASDAQ: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 months ended December 31, 2020 (“Q1 FY 2021”).

Q1 FY 2021 Highlights

  • Revenue grew 38.5% to $17.9 million, from $12.9 million during the fiscal quarter ended December 31, 2019 (“Q1 FY 2020”), driven by $3.5 million of internal growth and $1.5 million of incremental revenue from a full quarter of operations at our Fort Collins, CO, location (legacy Pre-Clinical Research Services, Inc. [“PCRS”]).

  • Gross profit increased 69.0% to $5.9 million, from $3.5 million in Q1 FY 2020, reflecting higher revenue and a 594 basis point expansion in gross margin to 32.86%.

  • Operating income totaled $14,000, compared to an operating loss of $1.0 million in Q1 FY 2020, reflecting higher gross profit on higher revenue and a 203 basis point decrease in operating expenses as a percent of revenue.

  • Net loss was $366,000, or $(0.03) per diluted share, compared to a net loss of $1.4 million, or $(0.13) per diluted share, in Q1 FY 2020.

  • Adjusted EBITDA increased 169.4% to $1.3 million, from $481,000 in Q1 FY 2020.

  • Book-to-bill ratio of 1.16x for services business.

  • Ending backlog of $45.3 million, up 26.9% compared to $35.7 million at the end of Q1 FY 2020 and up from $43.8 million at September 30, 2020.

Robert Leasure, Jr., the Company's President and Chief Executive Officer, commented, “We commenced fiscal 2021 with improved first quarter financial results, including 38.5% revenue growth year over year, expanding margins, positive operating income and $1.3 million of adjusted EBITDA. This quarter demonstrates the operating leverage inherent in our business as we grow revenue and the value of continuing to invest in our people, capacity, infrastructure, systems and services. Our organization’s unification under the Inotiv brand name, along with our client-service oriented culture, continued to drive performance, as reflected in our increasing revenue, quarter-end backlog of $45.3 million and book-to-bill ratio of 1.16x.”

Mr. Leasure concluded, “Our quarter-end backlog, positive first quarter book-to-bill ratio and seeing our team and business mature this quarter gives us additional confidence to continue to invest in our future. We believe that we have significant opportunities ahead of us to expand our services, generate favorable returns on our investments and drive value for shareholders. We also have opportunities to continue to improve and escalate the client experience, while strengthening our winning culture and creating a professional, gratifying work environment.”

Q1 FY 2021 Review

Q1 FY 2021 revenue increased 38.5% to $17.9 million, from $12.9 million in Q1 FY 2020. The majority of the increase in revenue was due to internal growth, augmented by $1.5 million of incremental revenue from PCRS, which the Company acquired in December of 2019.

Service segment revenue for Q1 FY 2021 increased 40.3% to $17.0 million, from $12.1 million in Q1 FY 2020. The increase in service revenue was due to incremental revenue of $1.5 million in Q1 FY 2020 attributable to a full quarter of Fort Collins, CO, (legacy PCRS) related operations, combined with additional revenue as a result of the expansion of our Evansville location and organic growth.

Cost of Service revenue as a percentage of Service revenue decreased to 68.1% in Q1 FY 2021, from 73.4% in Q1 FY 2020. Service gross margin increased to 31.9% in Q1 FY 2021, from 26.6% in Q1 FY 2020, reflecting operating leverage and the greater utilization of recently expanded capacity.

Product segment revenue increased 9.9% to $853,000 in Q1 FY 2021, from $776,000 in Q1 FY 2020, reflecting higher sales of Culex in-vivo sampling systems and analytical instruments, partially offset by a decrease in other instruments.

Cost of Product revenue as a percentage of Product revenue in Q1 FY 2021 decreased to 48.2% from 68.3% in Q1 FY 2020, due to expense reductions implemented in the last half of FY 2020 and improved margins on existing sales. Product gross margin increased to 51.8% in Q1 FY 2021, from 31.7% in Q1 FY 2020.

The book-to-bill ratio for Q1 FY 2021 was 1.16x. 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 at the end of Q1 FY 2021 was $45.3 million, compared to $35.7 million at the end of Q1 FY 2020.

Net loss in Q1 FY 2021 totaled $366,000, or $(0.03) per diluted share, an improvement of $1.1 million compared to a net loss of $1.4 million, or $(0.13) per diluted share in Q1 FY 2020.

Adjusted EBITDA increased 169.4% to $1.3 million in Q1 FY 2021, from $481,000 in Q1 FY 2020.

Cash Provided by Operating Activities and Financial Condition

Cash provided by operating activities was $1.7 million in Q1 FY 2021, compared to $1.5 million in Q1 FY 2020.

As of December 31, 2020, the Company had $1.2 million in cash and cash equivalents and there was a $0 balance on its general line of credit. Borrowings on our $3.0 million capex line of credit increased by $387 to the maximum balance of $3.0 million. In Q1 FY 2021, cash from operations, cash on hand and financing activities funded capital expenditures of $1.5 million for the investment in laboratory equipment to increase capacity and improvements to our Fort Collins facility.

Conference Call

Management will host a conference call on Tuesday, February 9, 2021, at 4:30 pm ET to discuss Q1 FY 2021 financial results.

Interested parties may participate in the call by dialing:

  • (877) 407-9753 (Domestic)

  • (201) 493-6739 (International)

The live conference call webcast also will be accessible in the Investors section of the Company’s website, and directly via the following link:
https://78449.themediaframe.com/dataconf/productusers/bas2/mediaframe/43273/indexl.html.

For those who cannot listen to the live broadcast, an online webcast replay will be available in the Investors section of Inotiv’s web site at: https://www.inotivco.com/investors/investor-information/.

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, 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

Bioanalytical Systems, Inc., doing business 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 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.

Company Contact

Investor Relations

Bioanalytical Systems, Inc., dba Inotiv

The Equity Group Inc.

Beth A. Taylor, Chief Financial Officer

Kalle Ahl, CFA

(765) 497-8381

(212) 836-9614

btaylor@inotivco.com

kahl@equityny.com

Devin Sullivan

(212) 836-9608

dsullivan@equityny.com

Financial Tables Follow:

BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

Three Months Ended
December 31,

2020

2019

(unaudited)

(unaudited)

Service revenue

$

17,032

$

12,142

Product revenue

853

776

Total revenue

17,885

12,918

Cost of service revenue

11,597

8,911

Cost of product revenue

411

530

Total cost of revenue

12,008

9,441

Gross profit

5,877

3,477

Operating expenses:

Selling

625

882

Research and development

196

162

General and administrative

5,042

3,453

Total operating expenses

5,863

4,497

Operating income (loss)

14

(1,020

)

Interest expense

(347

)

(311

)

Other income

2

Net loss before income taxes

(333

)

(1,329

)

Income tax expense

33

97

Net loss

$

(366

)

$

(1,426

)

Basic net loss per share

$

(0.03

)

$

(0.13

)

Diluted net loss per share

$

(0.03

)

$

(0.13

)

Weighted common shares outstanding:

Basic

11,016

10,669

Diluted

11,016

10,669

BIOANALYTICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

December 31,
2020

September 30,
2020

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,155

$

1,406

Accounts receivable

Trade, net of allowance of $561 at December 31, 2020 and
September 30, 2020

8,937

8,681

Unbilled revenues and other

2,448

2,142

Inventories, net

876

700

Prepaid expenses

2,546

2,371

Total current assets

15,962

15,300

Property and equipment, net

29,316

28,729

Operating lease right-of use-assets, net

4,093

4,001

Finance lease right-to use assets, net

4,742

4,778

Goodwill

4,368

4,368

Other intangible assets, net

4,104

4,261

Lease rent receivable

131

75

Other assets

82

81

Total assets

$

62,798

$

61,593

Liabilities and shareholders’ equity

Current liabilities:

Accounts payable

$

3,630

$

3,196

Restructuring liability

178

168

Accrued expenses

1,599

2,688

Customer advances

13,635

11,392

Capex lines of credit

3,000

2,613

Current portion on long-term operating lease

949

866

Current portion of long-term finance lease

4,693

4,728

Current portion of long-term debt

6,877

5,991

Total current liabilities

34,561

31,642

Long-term operating leases, net

3,358

3,344

Long-term finance leases, net

40

44

Long-term debt, less current portion, net of debt issuance costs

17,208

18,826

Deferred tax liabilities

175

141

Total liabilities

55,342

53,997

Shareholders’ equity:

Preferred shares, authorized 1,000,000 shares, no par value:

25 Series A shares at $1,000 stated value issued and outstanding at December 31, 2020 and at September 30, 2020

25

25

Common shares, no par value:

Authorized 19,000,000 shares; 11,117,999 issued and outstanding at
December 31, 2020 and 10,977,675 at September 30, 2020

2,741

2,706

Additional paid-in capital

26,966

26,775

Accumulated deficit

(22,276

)

(21,910

)

Total shareholders’ equity

7,456

7,596

Total liabilities and shareholders’ equity

$

62,798

$

61,593

BIOANALYTICAL SYSTEMS, INC.
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
(In thousands)
(Unaudited)

Three Months Ended

December 31,

2020

2019

GAAP Net income (loss)

$

(366

)

$

(1,426

)

Add back: Interest expense

347

311

Income tax expense

33

97

Depreciation and amortization

1,101

749

Stock option expense

181

97

United Kingdom lease liability reversal benefit

(60

)

Acquisition and integration costs

270

Other non-recurring, third-party costs

443

Adjusted EBITDA

$

1,296

$

481

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.