WEB NEWS Comments & Business Outlook
Fourth Quarter Fiscal 2013 Results
For the three months ended September 30, 2013, revenue decreased to $5,508,000 compared to $6,540,000 for the fourth quarter of fiscal 2012.
The company reported EPS of $0.03 per diluted share, compared to a loss $0.36 per share for the fourth quarter of fiscal 2012.
"While we still have work to do to achieve all of our goals for BASi, we are proud of what we already have accomplished to restore profitability and set the stage for growth in the years ahead," said President & CEO and CFO Jacqueline Lemke.
"In fiscal 2012 we consolidated our laboratories into our headquarters in West Lafayette, closing facilities in Oregon and the UK to reduce operating costs and strengthen our ability to meet clients' needs by improving laboratory utilization. We also implemented personnel reductions and other cost cutting measures in selling, R&D and general and administrative functions. As a result, while revenue for fiscal 2013 decreased 21.8% compared to fiscal 2012 primarily due to the restructuring, gross margin increased from 24.2% to 32.0%, operating expenses declined by a third, and operating income increased to $830,000 for fiscal 2013 compared to an operating loss of $2,491,000 before restructuring charges for fiscal 2012. In addition, BASi generated $1,519,000 in cash from operations for fiscal 2013 versus cash used in operations of $200,000 for fiscal 2012," Lemke said.
"Just as important, we have created fresh opportunities for growth by establishing collaborative research efforts to validate new applications for our market-changing Culex® NxT automated sampling system, and negotiating preferred provider and other agreements in our laboratory services business that build on BASi's reputation for delivering the quality and timely data that is critical to the drug development process. These initiatives contributed to the increase in new order bookings we have enjoyed in recent months. The increase also reflects our refocused and expanded marketing initiatives based on BASi's established strengths in specialty assay and drug discovery, regulatory excellence, and automated sampling via Culex® NxT. These encouraging developments position BASi for higher revenue in fiscal 2014 even as we continue to improve productivity and maintain control over costs," Lemke said.
Comments & Business Outlook
Third Quarter 2013 Results
For the three months ended June 30, 2013, revenue decreased to $5,600,000 compared to $7,186,000 for the third quarter of fiscal 2012, but increased sequentially compared to $5,156,000 for the second quarter of fiscal 2013.
Net income improved to $0.07 per diluted share for this year’s third quarter compared to a net loss of $0.03 per share for the third quarter of the prior year.
"What is more, each of our critical operating metrics, including revenue, gross margin, operating income and cash flow, improved sequentially in the third quarter compared to this year’s second quarter. Cash increased and debt decreased during the third quarter compared to the second, and cash provided by operations for the third quarter was $855,000," said President & CEO and CFO Jacqueline Lemke.
"We believe these gains are sustainable, as our marketing initiatives focused on our established strengths in specialty assay and drug discovery, regulatory excellence, and our market-changing Culex® NxT automated sampling system gain traction among current and new customers. On the product side, as previously announced, we are collaborating with Pinnacle Technology to create a better way to monitor glucose and with Data Sciences International to add value to our Culex system. On the services side, BASi has built a reputation for delivering the quality and timely data that are a critical part of the drug development process. We believe our recent contract to provide IND-enabling safety and toxicology studies for NanoViricides, Inc. and the preferred provider agreement with G1 Therapeutics we announced earlier this week, provide a solid foundation for generating the long-term growth and profitability we are striving for," Lemke said.
Research
On February 7, 2011 , we initiated a short-term trading position in shares of BASI @ $2.70.
The company posted strong fiscal 2011 first quarter EPS of $0.06 compared to a loss in the comparable 2010 period. Unfortunately, the stock traded down from our initial entry point. Upon closer inspection, BASI has had a problem reporting consistent EPS and revenue growth. Comments in the earnings press release were generally positive, but lacked commentary on future sales and profit outlook. However, the fiscal 2010 year end release did indicate that the company may be able to report consistent 2011 profitability:
Anthony Chilton, Chief Executive Officer, stated, "The past fiscal year was one of significant challenges for us. Though we experienced lower demand for our products and services, significant project delays and pricing concessions for our services in the first half of the current year primarily due to the general economic conditions, we continue to believe in the fundamentals of the CRO market. We experienced a stronger demand in the second half of the current year for our products and services and expect to see slow but continued improvement in the new year. For fiscal 2011, we remain focused on maximizing cash flow as well as on sales execution, operational performance and building strategic partnerships with pharmaceutical and biotechnology companies."
For this reason, we will give this trade a little time to play out, but the fundamentals do not yet warrant giving serious consideration to BASI as a long term trade. Trailing EPS is negative and 2011 forward fully taxed EPS, using the first quarter as a guide, comes out to $0.15 , deeming this stock to be fairly valued.
