Bioanalytical Systems announced financial results for the three months ended December 31, 2018.
“In only six months, we have accomplished much as a Company. We acquired the business of Seventh Wave Laboratories, LLC, commenced the expansion of our facilities in Evansville, Indiana, obtained funding to support these initiatives and enhanced our scientific capabilities and client service offerings. We are excited to report revenue growth during the first quarter of fiscal 2019 as compared to fiscal 2018 and proud of the foundation we continue to build for future growth,” Robert Leasure, Jr., BASi’s President and Chief Executive Officer said. “We are beginning to see our services backlog grow as we promote our combined brand and vision for our future. We will continue to focus on and invest in business development and marketing efforts to drive revenue growth in the current year and beyond. Additionally, we will also continue to invest in our business, equipment and people while delivering excellent data and results for our clients. As we focus on these organic growth initiatives, we will continue to evaluate other options to grow the company.”
First Quarter Results
For the quarter, revenue amounted to $8,625,000, a 60.4% increase from $5,377,000 in the first quarter of fiscal 2018. Revenue growth was mainly driven by the incremental sales associated with the Seventh Wave acquisition plus increased sales in both the Services and Products segments.
Net loss for the first quarter of fiscal 2019 amounted to $85,000, or $0.01 per diluted share, compared to net income of $26,000, or $0.00 per diluted share for the first quarter of fiscal 2018.
Net income and earnings per share were impacted by the mix of revenues and higher sales and marketing expenses. The higher sales and marketing expenses are driven by our focus on promoting our combined brand and revenue growth.
Adjusted EBITDA for the first quarter of fiscal 2019, amounted to $900,000, compared to Adjusted EBITDA for the first quarter of fiscal 2018 of $446,000.
First Quarter Segment Results
Service revenue for the first quarter of fiscal 2019 increased 71% to $7,735,000 compared to $4,525,000 for the same period in fiscal 2018. Nonclinical services revenues increased $2,478,000 due to an overall increase in the number of studies from the prior year and additional revenues attributable to the Seventh Wave Laboratories acquisition of $1,926,000 in the first fiscal quarter of 2019. Bioanalytical analysis revenues increased by $662,000 in the first quarter of fiscal 2019, mainly due to additional revenues attributable to the Seventh Wave Laboratories acquisition. Other laboratory services revenues were positively impacted by higher pharmaceutical analysis revenues in the first quarter of fiscal 2019 versus the comparable period in fiscal 2018.
Cost of Service revenue as a percentage of Service revenue increased to 72.4% during the first quarter of fiscal 2019 from 72.3% in the comparable period in fiscal 2018. The principal cause of this increase was due to the mix of services provided in the current quarter.
Sales in our Products segment increased 4.5% in the first quarter of fiscal 2019 from $852,000 to $890,000 when compared to the same period in the prior fiscal year. The majority of the increase stems from higher sales of our analytical instruments and consumables in the current quarter as compared to the prior year quarter.
Cost of Products revenue as a percentage of Products revenue in the first quarter of fiscal 2019 increased to 68.4% from 61.4% in the comparable prior-year period. This increase is mainly due to higher material costs and the mix of product sales during the first quarter of fiscal 2019.
Cash Provided by Operating Activities
Cash provided by operating activities was $907,000 for the first quarter of fiscal 2019 compared to $760,000 for the same period in fiscal 2018.
As of December 31, 2018, the Company had $723,000 in cash and cash equivalents and $3,500,000 available on its general line of credit. The Company had a zero balance on its $4,445,000 construction line of credit and a zero balance on its $1,429,250 equipment line of credit. During fiscal 2019, cash from operations funded capital expenditures for the expansion of our Evansville facility in addition to laboratory equipment and building improvements as well as computer equipment and software of approximately $684,000.
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 month periods ended December 31, 2018 and 2017. 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 and non-recurring acquisition and integration 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.