Abaxis Inc. (ABAX) reported second quarter fiscal 2010 earnings per share of 14 cents, lower than the Zacks Consensus Estimate of 17 cents and the year-ago earnings of 15 cents.
Total revenues for the reported quarter were $30.3 million, logging a growth of 9% year over year. Growth was driven by strong medical and veterinary instrument and reagent disc sales. Medical and veterinary instrument sales grew 26% year over year to 926 units. Medical and veterinary reagent disc sales expanded 2% year over year to 1.5 million units.
In terms of customer group: Medical market revenues increased 5% year over year to $6.3 million. Veterinary market revenues rose 9% year over year to roughly $21.7 million. In terms of products: Instrument sales declined 5% year-over-year due to lower average selling price and a shift in the product mix. Consumable sales grew 12% year over year in the reported quarter.
In terms of geography: North America sales represented about 82% of total sales and increased 11% year over year. International sales expanded 4% year over year.
Gross margin increased 358 basis points (bps) year over year to approximately 59.0%. However, higher operating expenses lowered the company’s operating and net margins. Sales and marketing expenses, as a percentage of sales, increased 160 bps year over year to 25.1%. General and administrative expenses, as a percentage of sales, increased 190 bps to 8.9%. Research and development expenses, as a percentage of sales, increased 110 bps to 8.6%.
Operating margin reduced 90 bps year over year to 16.5%, while net margin slipped 130 bps to 10.6%.
Abaxis ended the quarter with cash, cash equivalents and short-term investments of $68.6 million, declining roughly 2% during the first-half of fiscal 2010. The company has no outstanding debt at the end of the quarter.
Abaxis is a manufacturer of portable medical (human) and veterinary (animal) blood analysis systems. For medical use, the systems are marketed under the name Piccolo and measure metabolic, hepatic (liver), kidney, and renal (blood) function. Other uses include measuring electrolytes and cholesterol. The systems used for veterinary (animal) use are marketed under the name VetScan and used under the following animal profiles: avian/reptilian, large animal, mammalian (liver) and equine (horse). Other uses include a comprehensive diagnostic profile, as well as a thyroxine/ cholesterol test.
Read the full analyst report on “ABAX”
Zacks Investment Research
