x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended September 30,
2010.
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the transition period from ___________ to
_____________.
|
INDIANA
(State
or other jurisdiction of incorporation or organization)
|
35-1345024
(I.R.S.
Employer Identification No.)
|
|
2701
KENT AVENUE
WEST LAFAYETTE, INDIANA
(Address
of principal executive offices)
|
47906
(Zip
code)
|
Page
|
||
PART
I
|
||
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
11
|
Item
1B.
|
Unresolved
Staff Comments
|
17
|
Item
2.
|
Properties
|
17
|
Item
3.
|
Legal
Proceedings
|
17
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
17
|
PART
II
|
||
Item
5.
|
Market
for Registrant's Common Equity and Related Stockholder
Matters
|
18
|
Item
6.
|
Selected
Financial Data
|
19
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
20
|
Item
7A.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
30
|
Item
8.
|
Financial
Statements and Supplementary Data
|
31
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
54
|
Item
9A.
|
Controls
and Procedures
|
54
|
Item
9B.
|
Other
Information
|
55
|
PART
III
|
||
Item
10.
|
Directors
and Executive Officers of the Registrant
|
55
|
Item
11.
|
Executive
Compensation
|
57
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management
|
57
|
Item
13.
|
Certain
Relationships and Related Transactions
|
57
|
Item
14.
|
Principal
Accounting Fees and Services
|
57
|
PART
IV
|
||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
58
|
|
·
|
Product
Characterization, Method Development and Validation:
Analytical methods,
primarily performed in West Lafayette, Indiana, determine potency, purity,
chemical composition, structure and physical properties of a compound.
Methods are validated to ensure that data generated are accurate, precise,
reproducible and reliable and are used consistently throughout the drug
development process and in later product
support.
|
|
·
|
Bioanalytical
Testing:
We analyze specimens
from preclinical and clinical trials to measure drug and metabolite
concentrations in complex biological matrices. Bioanalysis is performed at
our facilities in Indiana, Oregon and the United Kingdom
(“UK”).
|
|
·
|
Stability
Testing:
We test stability of
drug substances and formulated drug products and maintain secure storage
facilities in West Lafayette, Indiana to establish and confirm product
purity, potency and shelf life. We have multiple International Conference
on Harmonization validated controlled-climate GMP (Good Manufacturing
Practices) systems in place, and the testing capability to complete most
stability programs.
|
|
·
|
In
Vivo Pharmacology:
We provide
preclinical in vivo
sampling services
for the continuous monitoring of chemical changes in life, in particular,
how a drug enters, travels through, and is metabolized in living systems.
Most services are performed in customized facilities in Evansville,
Indiana using our robotic Culex® APS (Automated Pharmacology System)
system.
|
|
·
|
Preclinical
and Pathology Services: We provide
pharmacokinetic and safety testing in studies ranging from acute safety
monitoring of drugs and medical devices to chronic, multi-year
oncogenicity studies in our Evansville, Indiana site. Depending on
protocol, multiple tissues may be collected to monitor pathological
changes.
|
|
·
|
In vivo sampling
systems and accessories (including disposables, training and systems
qualification)
|
|
·
|
Physiology
monitoring tools
|
|
·
|
Liquid
chromatography and electrochemistry instruments
platforms
|
|
·
|
Analytical
Products: The analytical products consist of our liquid
chromatographic and electrochemical instruments with associated
accessories. The critical component of these products is the
Epsilon®
electrochemical platform. This incorporates all the
hardware capabilities needed for most electrochemical experiments but can
be modified through software development. The market is
principally academic institutions and industrial research
companies.
|
|
·
|
In vivo
Sampling Products: The in vivo sampling
products consist of the Culex® family of
automated in vivo
sampling and dosing instruments. These are used by
pharmaceutical researchers to dose animals and collect biological samples
(blood, bile, urine, microdialysate, feces or any bio-fluid) from the
animals. Since dosing and sample collections are automated,
animals are not manually handled, reducing stress on the animals and
producing more representative pharmacological data. Behavior
and other physiological parameters can also be monitored
simultaneously. Compared to manual methods, the Culex® products
offer significant reduction in test model use and comparable reduction in
labor. The line also includes miniaturized in vivo sampling
devices sold to drug developers and medical research centers to assist in
the study of a number of medical conditions including stroke,
depression, Alzheimer’s and Parkinson’s diseases, diabetes and
osteoporosis.
|
|
·
|
Vetronics’
Products: The Vetronics’ products consist
of instruments and related software to monitor and diagnose cardiac
function (electro-cardiogram) and measure other vital physiological
parameters primarily in cats and dogs in veterinary
clinics.
|
|
·
|
Covance,
Inc.;
|
|
·
|
Pharmaceutical
Product Development, Inc.;
|
|
·
|
Charles
River Laboratories, Inc.;
|
|
·
|
Parexel;
and
|
|
·
|
MDS
Health Group Ltd.
|
|
·
|
regulatory
compliance record;
|
|
·
|
reputation
for on-time quality performance
|
|
·
|
quality
system;
|
|
·
|
previous
experience;
|
|
·
|
medical
and scientific expertise in specific therapeutic
areas;
|
|
·
|
scientist-to-scientist
relationships;
|
|
·
|
quality
of contract research;
|
|
·
|
financial
viability;
|
|
·
|
database
management;
|
|
·
|
statistical
and regulatory services;
|
|
·
|
ability
to recruit investigators;
|
|
·
|
ability
to integrate information technology with systems to optimize research
efficiency;
|
|
·
|
quality
of facilities;
|
|
·
|
an
international presence with strategically located facilities;
and
|
|
·
|
price.
|
|
·
|
Resources
– organization, personnel, facilities and
equipment
|
|
·
|
Rules
– protocols and written procedures
|
|
·
|
Characterization
– test items and test systems
|
|
·
|
Documentation
– raw data, final report and
archives
|
|
·
|
Quality
assurance unit – formalized internal audit
function
|
Name
|
Age
|
Position
|
||
Anthony
S. Chilton, Ph.D.
|
54
|
President,
Chief Executive Officer
|
||
Michael
R. Cox
|
63
|
Vice
President, Finance; Chief Financial and Administrative Officer;
Treasurer
|
||
Alberto
Hidalgo
|
45
|
Vice
President, Business Development and Marketing
|
||
Craig
S. Bruntlett, Ph.D.
|
61
|
Senior
Vice President, Instruments Division
|
||
Lina
L. Reeves-Kerner
|
59
|
Senior
Vice President, Human
Resources
|
|
•
|
the
liquidity of our common stock;
|
|
•
|
the
market price of our common stock;
|
|
•
|
our
ability to obtain financing for the continuation of our
operations;
|
|
•
|
the
number of institutional and general investors that will
consider investing in our common
stock;
|
|
•
|
the
number of investors in general that will consider investing in our common
stock;
|
|
•
|
the
number of market makers in our common
stock;
|
|
•
|
the
availability of information concerning the trading prices and volume of
our common stock; and
|
|
•
|
the
number of broker-dealers willing to execute trades in shares of our common
stock.
|
•
|
products being tested fail to
satisfy safety requirements;
|
•
|
products have undesired clinical
results;
|
•
|
the client decides to forego a
particular study;
|
•
|
inability to enroll enough
patients in the study;
|
•
|
inability to recruit enough
investigators;
|
•
|
production problems cause
shortages of the drug; and
|
•
|
actions
by regulatory authorities.
|
•
|
inability to develop products
that address our customers’
needs;
|
•
|
competitive products with
superior performance;
|
•
|
patent conflicts or unenforceable
intellectual property
rights;
|
•
|
demand for the particular
product; and
|
•
|
other factors that could make the
product uneconomical.
|
|
·
|
inability
to obtain financing due to our financial condition and recent
performance;
|
|
·
|
difficulties
and expenses in connection with integrating the acquired companies and
achieving the expected benefits;
|
|
·
|
diversion
of management’s attention from current
operations;
|
|
·
|
the
possibility that we may be adversely affected by risk factors facing the
acquired companies;
|
|
·
|
acquisitions
could be dilutive to earnings, or in the event of acquisitions made
through the issuance of our common stock to the shareholders of the
acquired company, dilutive to the percentage of ownership of our existing
stockholders;
|
|
·
|
potential
losses resulting from undiscovered liabilities of acquired companies not
covered by the indemnification we may obtain from the seller;
and
|
|
·
|
loss
of key employees of the acquired
companies.
|
High
|
Low
|
|||||||
Fiscal
Year Ended September 30, 2009
|
||||||||
First
Quarter
|
$ | 5.13 | $ | 1.00 | ||||
Second
Quarter
|
1.82 | 0.60 | ||||||
Third
Quarter
|
1.81 | 0.70 | ||||||
Fourth
Quarter
|
1.15 | 0.60 | ||||||
Fiscal
Year Ended September 30, 2010
|
||||||||
First
Quarter
|
$ | 2.42 | $ | 0.81 | ||||
Second
Quarter
|
1.42 | 0.65 | ||||||
Third
Quarter
|
1.50 | 0.74 | ||||||
Fourth
Quarter
|
1.22 | 0.77 |
Plan Category
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options
|
Weighted Average
Exercise Price per share
of Outstanding Options
|
Number of Securities
Remaining Available for Future
Issuance under the Equity
Compensation Plan
(Excluding Securities Reflected
in First Column)
|
|||||||||
Equity
compensation plans approved by security holders
|
680 | $ | 2.59 | 3 | ||||||||
Equity
compensation plans not approved by security holders (1)
|
25 | $ | 4.58 | — | ||||||||
Total
|
705 | $ | 2.66 | 3 |
Year Ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Service
revenue
|
76.0 | % | 76.0 | % | ||||
Product
revenue
|
24.0 | 24.0 | ||||||
Total
revenue
|
100.0 | % | 100.0 | % | ||||
Cost
of service revenue (a)
|
85.0 | 86.8 | ||||||
Cost
of product revenue (a)
|
41.6 | 42.2 | ||||||
Total
cost of revenue
|
74.5 | 76.1 | ||||||
Gross
profit
|
25.5 | 23.9 | ||||||
Total
operating expenses
|
32.4 | 38.4 | ||||||
Operating
loss
|
(6.9 | ) | (14.5 | ) | ||||
Other
expense
|
(3.6 | ) | (3.3 | ) | ||||
Loss
before income taxes
|
(10.5 | ) | (17.8 | ) | ||||
Income
tax benefit
|
(1.2 | ) | (0.6 | ) | ||||
Net
loss
|
(9.3 | )% | (17.2 | )% |
Fiscal Year Ended
September 30,
|
||||||||||||||||
2010
|
2009
|
Change
|
%
|
|||||||||||||
Bioanalytical
analysis
|
$ | 12,779 | $ | 13,683 | $ | (904 | ) | -6.6 | % | |||||||
Toxicology
|
7,543 | 7,954 | (411 | ) | -5.2 | % | ||||||||||
Other
laboratory services
|
1,542 | 2,521 | (979 | ) | -38.8 | % |
Fiscal Year Ended
September 30,
|
||||||||||||||||
2010
|
2009
|
Change
|
%
|
|||||||||||||
Culex,
in-vivo sampling systems
|
$ | 3,150 | $ | 3,263 | $ | (113 | ) | -3.5 | % | |||||||
Analytical
instruments
|
3,070 | 3,256 | (186 | ) | -5.7 | % |
2011
|
2012
|
2013
|
2014
|
2015
|
After
2015
|
Total
|
||||||||||||||||||||||
Notes
payable
|
$ | 1,855 | $ | 888 | $ | 5,589 | $ | — | $ | — | $ | — | $ | 8,332 | ||||||||||||||
Capital
lease obligations
|
701 | 565 | 159 | — | — | — | 1,425 | |||||||||||||||||||||
Operating
leases
|
435 | 430 | 416 | 413 | 340 | 2,579 | 4,613 | |||||||||||||||||||||
$ | 2,991 | $ | 1,883 | $ | 6,164 | $ | 413 | $ | 340 | $ | 2,579 | $ | 14,370 |
|
•
|
Risk-free interest
rate. The risk-free interest rate is based on U.S. Treasury
yields in effect at the time of grant for the expected term of the
option.
|
|
•
|
Expected volatility. We
use our historical stock price volatility on our common stock for our
expected volatility assumption.
|
|
•
|
Expected term. The
expected term represents the weighted-average period the stock options are
expected to remain outstanding. The expected term is determined based on
historical exercise behavior, post-vesting termination patterns, options
outstanding and future expected exercise
behavior.
|
|
•
|
Expected dividends. We
assumed that we will pay no
dividends.
|
Page
|
|||
Consolidated
Financial Statements of Bioanalytical Systems, Inc.
|
|||
Consolidated
Balance Sheets as of September 30, 2010 and 2009
|
32
|
||
Consolidated
Statements of Operations for the Years Ended September 30, 2010 and
2009
|
33
|
||
Consolidated
Statements of Shareholders’ Equity and Comprehensive Loss for the Years
Ended September 30, 2010 and 2009
|
34
|
||
Consolidated
Statements of Cash Flows for the Years Ended September 30, 2010 and
2009
|
35
|
||
Notes
to Consolidated Financial Statements
|
36
|
||
Report
of Independent Registered Public Accounting Firm
|
53
|
||
Financial
Statement Schedules:
|
|||
Schedules
are not required, are not applicable or the information is shown in the
Notes to the Consolidated Financial Statements.
|
As of September 30,
|
||||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 1,422 | $ | 870 | ||||
Accounts
receivable
|
||||||||
Trade
|
3,670 | 3,996 | ||||||
Unbilled
revenues and other
|
1,298 | 1,684 | ||||||
Inventories
|
1,673 | 1,847 | ||||||
Refundable
income taxes
|
16 | 544 | ||||||
Prepaid
expenses
|
555 | 622 | ||||||
Total
current assets
|
8,634 | 9,563 | ||||||
Property
and equipment, net
|
19,439 | 21,282 | ||||||
Deferred
income taxes
|
— | 12 | ||||||
Goodwill
|
1,383 | 1,383 | ||||||
Intangible
assets, net
|
84 | 114 | ||||||
Debt
issue costs
|
123 | 145 | ||||||
Other
assets
|
80 | 86 | ||||||
Total
assets
|
$ | 29,743 | $ | 32,585 | ||||
Liabilities
and shareholders’ equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,911 | $ | 1,997 | ||||
Accrued
expenses
|
1,848 | 2,113 | ||||||
Customer
advances
|
4,582 | 2,863 | ||||||
Income
tax accruals
|
30 | 473 | ||||||
Revolving
line of credit
|
1,195 | 1,759 | ||||||
Fair
value of interest rate swaps
|
31 | 103 | ||||||
Current
portion of capital lease obligation
|
524 | 650 | ||||||
Current
portion of long-term debt
|
1,855 | 524 | ||||||
Total
current liabilities
|
11,976 | 10,482 | ||||||
Capital
lease obligation, less current portion
|
623 | 792 | ||||||
Long-term
debt, less current portion
|
6,477 | 8,191 | ||||||
Shareholders’
equity:
|
||||||||
Preferred
Shares:
|
||||||||
Authorized
1,000 shares; none issued and outstanding
|
— | — | ||||||
Common
shares, no par value:
|
||||||||
Authorized
19,000 shares; issued and outstanding 4,915 at September 30, 2010 and 2009
December, 2007
|
1,191 | 1,191 | ||||||
Additional
paid-in capital
|
13,357 | 13,131 | ||||||
Accumulated
deficit
|
(3,981 | ) | (1,290 | ) | ||||
Accumulated
other comprehensive income
|
100 | 88 | ||||||
Total
shareholders’ equity
|
10,667 | 13,120 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 29,743 | $ | 32,585 |
For the Years Ended
September 30,
|
||||||||
2010
|
2009
|
|||||||
Service
revenue
|
$ | 21,864 | $ | 24,158 | ||||
Product
revenue
|
6,917 | 7,626 | ||||||
Total
revenue
|
28,781 | 31,784 | ||||||
Cost
of service revenue
|
18,574 | 20,959 | ||||||
Cost
of product revenue
|
2,874 | 3,221 | ||||||
Total
cost of revenue
|
21,448 | 24,180 | ||||||
Gross
profit
|
7,333 | 7,604 | ||||||
Operating
expenses:
|
||||||||
Selling
|
2,665 | 3,296 | ||||||
Research
and development
|
546 | 762 | ||||||
General
and administrative
|
6,119 | 7,674 | ||||||
Impairment
loss
|
— | 472 | ||||||
Total
operating expenses
|
9,330 | 12,204 | ||||||
Operating
loss
|
(1,997 | ) | (4,600 | ) | ||||
Interest
income
|
— | 2 | ||||||
Interest
expense
|
(1,028 | ) | (1,063 | ) | ||||
Other
income
|
1 | 1 | ||||||
Loss
before income tax benefit
|
(3,024 | ) | (5,660 | ) | ||||
Income
tax benefit
|
(333 | ) | (197 | ) | ||||
Net
loss
|
$ | (2,691 | ) | $ | (5,463 | ) | ||
Basic
net loss per share:
|
$ | (0.55 | ) | $ | (1.11 | ) | ||
Diluted
net loss per share:
|
$ | (0.55 | ) | $ | (1.11 | ) | ||
Weighted
common shares outstanding:
|
||||||||
Basic
|
4,915 | 4,915 | ||||||
Diluted
|
4,915 | 4,915 |
Common shares
|
Additional
paid-in-
|
Accumulated
|
Accumulated
other
comprehensive
|
Total
shareholders'
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
deficit
|
Income (loss)
|
equity
|
|||||||||||||||||||
Balance
at October 1, 2008
|
4,915 | $ | 1,191 | $ | 12,561 | $ | 4,173 | $ | (130 | ) | $ | 17,795 | ||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (5,463 | ) | — | (5,463 | ) | ||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||
Foreign
currency translation adjustments
|
— | — | — | — | 218 | 218 | ||||||||||||||||||
Total
comprehensive loss
|
(5,245 | ) | ||||||||||||||||||||||
Stock
compensation
|
— | — | 570 | — | — | 570 | ||||||||||||||||||
Balance
at September 30, 2009
|
4,915 | $ | 1,191 | $ | 13,131 | $ | (1,290 | ) | $ | 88 | $ | 13,120 | ||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (2,691 | ) | — | (2,691 | ) | ||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||
Foreign
currency translation adjustments
|
— | — | — | — | 12 | 12 | ||||||||||||||||||
Total
comprehensive loss
|
(2,679 | ) | ||||||||||||||||||||||
Stock
compensation
|
— | — | 226 | — | — | 226 | ||||||||||||||||||
Balance
at September 30, 2010
|
4,915 | $ | 1,191 | $ | 13,357 | $ | (3,981 | ) | $ | 100 | $ | 10,667 |
Years Ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Operating
activities:
|
||||||||
Net
loss
|
$ | (2,691 | ) | $ | (5,463 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
2,323 | 2,645 | ||||||
Impairment
loss
|
— | 472 | ||||||
Employee
stock compensation expense
|
226 | 570 | ||||||
Provision
for doubtful accounts
|
61 | (2 | ) | |||||
Liability
incurred on settlement of lease
|
216 | — | ||||||
(Gain)
loss on interest rate swaps
|
(72 | ) | 103 | |||||
(Gain)
loss on sale of property and equipment
|
(1 | ) | 37 | |||||
Deferred
income taxes
|
12 | 160 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
650 | 3,680 | ||||||
Inventories
|
174 | 338 | ||||||
Refundable
income taxes
|
529 | 739 | ||||||
Prepaid
expenses and other assets
|
90 | 49 | ||||||
Accounts
payable
|
(86 | ) | (212 | ) | ||||
Accrued
expenses
|
(709 | ) | 52 | |||||
Customer
advances
|
1,719 | (1,169 | ) | |||||
Net
cash provided by operating activities
|
2,441 | 1,999 | ||||||
Investing
activities:
|
||||||||
Capital
expenditures
|
(450 | ) | (834 | ) | ||||
Net
cash used by investing activities
|
(450 | ) | (834 | ) | ||||
Financing
activities:
|
||||||||
Payments
of long-term debt
|
(599 | ) | (491 | ) | ||||
Payments
on revolving line of credit
|
(28,948 | ) | (19,052 | ) | ||||
Borrowings
on revolving line of credit
|
28,384 | 18,788 | ||||||
Proceeds
from sale and leaseback
|
431 | — | ||||||
Payments
on capital lease obligations
|
(726 | ) | (721 | ) | ||||
Net
cash used by financing activities
|
(1,458 | ) | (1,476 | ) | ||||
Cash
flow of discontinued operations:
|
||||||||
Cash
provided by operating activities
|
— | 588 | ||||||
Net
cash provided by discontinued operations
|
— | 588 | ||||||
Effect
of exchange rate changes
|
19 | 258 | ||||||
Net
increase in cash and cash equivalents
|
552 | 535 | ||||||
Cash
and cash equivalents at beginning of year
|
870 | 335 | ||||||
Cash
and cash equivalents at end of year
|
$ | 1,422 | $ | 870 |
|
Principles
of Consolidation
|
|
Revenue
Recognition
|
|
Cash
Equivalents
|
|
Financial
Instruments
|
2010
|
2009
|
|||||||
Opening
balance
|
$ | 110 | $ | 83 | ||||
Charged
to expense, net
|
61 | 39 | ||||||
Accounts
written off
|
(6 | ) | (12 | ) | ||||
Ending
balance
|
$ | 165 | $ | 110 |
|
Inventories
|
|
Property
and Equipment
|
2010
|
2009
|
|||||||
Land and improvements
|
$ | 488 | $ | 490 | ||||
Buildings
and improvements
|
21,296 | 21,298 | ||||||
Machinery
and equipment
|
20,652 | 20,462 | ||||||
Office
furniture and fixtures
|
952 | 972 | ||||||
Construction
in progress
|
109 | 40 | ||||||
43,497 | 43,262 | |||||||
Less:
accumulated depreciation
|
(24,058 | ) | (21,980 | ) | ||||
Net
property and equipment
|
$ | 19,439 | $ | 21,282 |
|
(g)
|
Long-Lived
Assets including Goodwill
|
2010
|
2009
|
|||||||
Opening
balance
|
$ | 1,383 | $ | 1,855 | ||||
UK
impairment charge
|
— | (472 | ) | |||||
Ending
balance
|
$ | 1,383 | $ | 1,383 |
September 30, 2010
|
|||||||||||
Weighted
average life
(years)
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
|||||||||
FDA
compliant facility
|
10
|
$ | 302 | $ | 218 |
September 30, 2009
|
|||||||||||
Weighted
average life
(years)
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
|||||||||
FDA
compliant facility
|
10
|
$ | 302 | $ | 188 |
2011
|
$ | 30 | ||
2012
|
30 | |||
2013
|
24 | |||
2014
|
— | |||
2015
|
— |
|
Advertising
Expense
|
|
Stock-Based
Compensation
|
|
(j)
|
Income
Taxes
|
|
(k)
|
New
Accounting Pronouncements
|
|
(l)
|
Fair
Value
|
|
•
|
Level 1 – Valuations based on
quoted prices for identical assets or liabilities in active markets that
the Company has the ability to
access.
|
|
•
|
Level 2 – Valuations based on
quoted prices in markets that are not active or for which all significant
inputs are observable, either directly or
indirectly.
|
|
•
|
Level 3 – Valuations based on
inputs that are unobservable and significant to the overall fair value
measurement.
|
|
Use
of Estimates
|
|
(n)
|
Research
and Development
|
|
(o)
|
Comprehensive
Loss
|
|
(p)
|
Foreign
Currency
|
Years Ended
September 30,
|
||||||||
2010
|
2009
|
|||||||
Basic
net loss per share:
|
||||||||
Net
loss applicable to common shareholders
|
$ | (2,691 | ) | $ | (5,463 | ) | ||
Weighted
average common shares outstanding
|
4,915 | 4,915 | ||||||
Basic
net loss per share
|
$ | (0.55 | ) | $ | (1.11 | ) | ||
Diluted
net loss per share:
|
||||||||
Diluted
net loss applicable to common shareholders
|
$ | (2,691 | ) | $ | (5,463 | ) | ||
Weighted
average common shares outstanding
|
4,915 | 4,915 | ||||||
Dilutive
stock options/shares
|
— | — | ||||||
Diluted
weighted average common shares outstanding
|
4,915 | 4,915 | ||||||
Diluted
net loss per share
|
$ | (0.55 | ) | $ | (1.11 | ) |
2010
|
2009
|
|||||||
Raw materials
|
$ | 1,534 | $ | 1,732 | ||||
Work
in progress
|
283 | 131 | ||||||
Finished
goods
|
218 | 271 | ||||||
$ | 2,035 | $ | 2,134 | |||||
Obsolescence
reserve
|
(362 | ) | (287 | ) | ||||
$ | 1,673 | $ | 1,847 |
Principal
|
Interest
|
Total
|
||||||||||
2011
|
$ | 524 | $ | 177 | $ | 701 | ||||||
2012
|
476 | 89 | 565 | |||||||||
2013
|
147 | 12 | 159 | |||||||||
2014
|
— | — | — | |||||||||
$ | 1,147 | $ | 278 | $ | 1,425 |
2011
|
$ | 435 | ||
2012
|
430 | |||
2013
|
416 | |||
2014
|
413 | |||
2015
|
340 | |||
After
2015
|
2,579 | |||
$ | 4,613 |
2010
|
2009
|
|||||||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $40. Interest is fixed at 7.1% through June 30, 2010, and
thereafter fixed at 4.1%. Collateralized by underlying property. Due
November, 2012.
|
$ | 3,896 | $ | 4,117 | ||||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $19. The interest rate is 6.1%. Collateralized by
underlying property. Due February, 2011. (a)
|
1,346 | 1,489 | ||||||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $17. Interest is fixed at 7.1% through June 30, 2010, and
thereafter fixed at 4.1%. Collateralized by underlying property. Due
November, 2012.
|
1,809 | 1,897 | ||||||
Note
payable to a bank, payable in monthly principal installments of $9 plus
interest. The interest rate is 6.1%. Collateralized by West Lafayette and
Evansville properties. Due December, 2010. (a)
|
1,095 | 1,212 | ||||||
Note
payable to Algo Holdings, payable in monthly installments of $10. There is
no interest on this note if paid within terms. Due May 1, 2012. See Note
11.
|
185 | — | ||||||
$ | 8,332 | $ | 8,715 | |||||
Less
current portion
|
1,855 | 524 | ||||||
$ | 6,477 | $ | 8,191 |
2011
|
$ | 1,855 | ||
2012
|
888 | |||
2013
|
5,589 | |||
$ | 8,332 |
2010
|
2009
|
|||||||
Long-term deferred tax assets:
|
||||||||
Tax
over book depreciation
|
$ | (709 | ) | $ | (842 | ) | ||
Lower
tax basis on assets of acquired company
|
(448 | ) | (418 | ) | ||||
Domestic
net operating loss carryforward
|
2,396 | 1,440 | ||||||
Stock
compensation expense
|
416 | 363 | ||||||
Foreign
net operating loss
|
1,592 | 1,293 | ||||||
Foreign
tax credit carryover
|
119 | 119 | ||||||
AMT
credit carryover
|
13 | 13 | ||||||
Total
long-term deferred tax assets
|
$ | 3,379 | $ | 1,968 | ||||
Current
deferred tax assets:
|
||||||||
Inventory
pricing
|
$ | 232 | $ | 186 | ||||
Accrued
compensation and vacation
|
283 | 240 | ||||||
Accrued
expenses and other – net
|
35 | — | ||||||
Foreign
net operating loss
|
— | (1 | ) | |||||
Total
current deferred tax assets
|
$ | 550 | $ | 425 | ||||
Valuation
allowance for deferred tax assets
|
(3,929 | ) | (2,381 | ) | ||||
Net
deferred tax assets
|
$ | — | $ | 12 |
2010
|
2009
|
|||||||
Current:
|
||||||||
Federal
|
$ | — | $ | (345 | ) | |||
State
|
(345 | ) | (11 | ) | ||||
Foreign
|
— | (1 | ) | |||||
Total
Current
|
$ | (345 | ) | $ | (357 | ) | ||
Deferred:
|
||||||||
Federal
|
$ | — | $ | 118 | ||||
State
|
— | 41 | ||||||
Foreign
|
12 | 1 | ||||||
Total
deferred
|
$ | 12 | $ | 160 | ||||
$ | (333 | ) | $ | (197 | ) |
2010
|
2009
|
|||||||
Statutory
federal income tax rate
|
(34.0 | )% | (34.0 | )% | ||||
Increases
(decreases):
|
||||||||
Nondeductible
expenses
|
3.2 | 2.6 | ||||||
State
income taxes, net of federal tax benefit
|
— | (5.4 | ) | |||||
Nontaxable
foreign (gains) losses
|
4.6 | 2.5 | ||||||
Uncertain
tax positions
|
(15.6 | ) | — | |||||
Valuation
allowance
|
33.3 | 32.9 | ||||||
Other
|
(2.5 | ) | (2.1 | ) | ||||
(11.0 | )% | (3.5 | )% |
Beginning
of year balance, October 1, 2008
|
$ | 473 | ||
Changes
during the year
|
— | |||
End
of year balance, September 30, 2009
|
$ | 473 | ||
Changes
during the year
|
(443 | ) | ||
End
of year balance, September 30, 2010
|
$ | 30 |
2010
|
2009
|
|||
Risk-free
interest rate
|
2.85%
|
2.89%
|
||
Dividend
yield
|
0.00%
|
0.00%
|
||
Volatility
of the expected market price of the Company's common stock
|
55.00%-96.00%
|
55.00%-77.00%
|
||
Expected
life of the options (years)
|
8.0
|
8.0
|
Options
(shares)
|
Weighted-
Average Exercise
Price
|
Weighted-
Average Grant
Date Fair Value
|
Weighted-Average
Remaining
Contractual Life
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||||||||
Outstanding
- October 1, 2008
|
754 | $ | 6.00 | |||||||||||||||||
Exercised
|
- | $ | - | |||||||||||||||||
Granted
|
60 | $ | 4.07 | $ | 2.73 | |||||||||||||||
Terminated
|
(194 | ) | $ | 6.74 | ||||||||||||||||
Outstanding
- September 30, 2009
|
620 | $ | 5.97 | $ | 3.36 | 7.4 | $ | - | ||||||||||||
Outstanding
- October 1, 2009
|
620 | $ | 5.97 | |||||||||||||||||
Exercised
|
- | $ | - | |||||||||||||||||
Granted
|
432 | $ | 1.06 | $ | 0.89 | |||||||||||||||
Terminated
|
(347 | ) | $ | 6.58 | ||||||||||||||||
Outstanding
- September 30, 2010
|
705 | $ | 2.66 | $ | 1.82 | 8.2 | $ | 9 | ||||||||||||
Exercisable
at September 30, 2010
|
185 | $ | 5.22 | $ | 3.36 | 4.9 | $ | - |
Number of
Shares
|
Weighted-
Average Grant
Date Fair Value
|
|||||||
Non-vested
options at October 1, 2009
|
299 | $ | 3.30 | |||||
Granted
|
432 | $ | 0.89 | |||||
Vested
|
(158 | ) | $ | 3.49 | ||||
Forfeited
|
(53 | ) | $ | 3.02 | ||||
Non-vested
options at September 30, 2010
|
520 | $ | 1.27 |
Range of Exercise Prices
|
Shares
Outstanding
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
Weighted-
Average
Exercise Price
|
Shares
Exercisable
|
Weighted-
Average
Exercise Price
|
|||||||||||||||||
$ | 0.79 - 2.80 | 432 | 9.69 | $ | 1.06 | — | $ | — | ||||||||||||||
$ | 2.81 - 4.59 | 114 | 4.70 | $ | 4.28 | 94 | $ | 4.44 | ||||||||||||||
$ | 4.60 - 8.79 | 159 | 6.70 | $ | 5.85 | 91 | $ | 6.03 |
(a)
|
Operating
Segments
|
Years Ended
September 30,
|
||||||||
2010
|
2009
|
|||||||
Revenue:
|
||||||||
Service
|
$ | 21,864 | $ | 24,158 | ||||
Product
|
6,917 | 7,626 | ||||||
$ | 28,781 | $ | 31,784 | |||||
Operating
loss:
|
||||||||
Service
|
$ | (2,350 | ) | $ | (3,884 | ) | ||
Product
|
353 | (716 | ) | |||||
$ | (1,997 | ) | $ | (4,600 | ) | |||
Corporate
Expenses
|
1,027 | 1,060 | ||||||
Loss
before income taxes
|
$ | (3,024 | ) | $ | (5,660 | ) |
Years Ended
September 30,
|
||||||||
2010
|
2009
|
|||||||
Identifiable
assets:
|
||||||||
Service
|
$ | 17,309 | $ | 19,102 | ||||
Product
|
7,406 | 8,046 | ||||||
Corporate
|
5,028 | 5,437 | ||||||
$ | 29,743 | $ | 32,585 | |||||
Goodwill,
net:
|
||||||||
Service
|
$ | 1,009 | $ | 1,009 | ||||
Product
|
374 | 374 | ||||||
$ | 1,383 | $ | 1,383 | |||||
Intangible
assets, net:
|
||||||||
Service
|
$ | 84 | $ | 114 | ||||
Product
|
— | — | ||||||
$ | 84 | $ | 114 | |||||
Depreciation
and amortization:
|
||||||||
Service
|
$ | 2,108 | $ | 2,377 | ||||
Product
|
215 | 268 | ||||||
$ | 2,323 | $ | 2,645 | |||||
Capital
Expenditures:
|
||||||||
Service
|
$ | 383 | $ | 698 | ||||
Product
|
67 | 136 | ||||||
$ | 450 | $ | 834 |
|
(b)
|
Geographic
Information
|
Years Ended
September 30,
|
||||||||
2010
|
2009
|
|||||||
Sales
to External Customers:
|
||||||||
North
America
|
$ | 25,578 | $ | 28,656 | ||||
Pacific
Rim
|
500 | 661 | ||||||
Europe
|
2,495 | 2,215 | ||||||
Other
|
208 | 252 | ||||||
$ | 28,781 | $ | 31,784 | |||||
Long-lived
Assets:
|
||||||||
North
America
|
$ | 20,650 | $ | 22,472 | ||||
Europe
|
459 | 550 | ||||||
$ | 21,109 | $ | 23,022 |
|
(c)
|
Major
Customers
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
2010
|
||||||||||||||||
Total
Revenue
|
$ | 6,377 | $ | 6,935 | $ | 8,064 | $ | 7,405 | ||||||||
Gross
Profit
|
1,196 | 1,485 | 2,671 | 1,981 | ||||||||||||
Net
income (loss)
|
(1,488 | ) | (1,212 | ) | 288 | (279 | ) | |||||||||
Basic
net income (loss) per share
|
(0.30 | ) | (0.25 | ) | 0.06 | (0.06 | ) | |||||||||
Diluted
net income (loss) per share
|
(0.30 | ) | (0.25 | ) | 0.06 | (0.06 | ) | |||||||||
2009
|
||||||||||||||||
Total
Revenue
|
$ | 8,076 | $ | 7,066 | $ | 8,121 | $ | 8,521 | ||||||||
Gross
Profit
|
2,047 | 872 | 2,135 | 2,550 | ||||||||||||
Net
loss
|
(1,584 | ) | (1,831 | ) | (632 | ) | (1,416 | ) | ||||||||
Basic
net loss per share
|
(0.32 | ) | (0.37 | ) | (0.13 | ) | (0.29 | ) | ||||||||
Diluted
net loss per share
|
(0.32 | ) | (0.37 | ) | (0.13 | ) | (0.29 | ) |
Name
|
Age
|
Position
|
||
John
B. Landis, Ph.D.
|
57
|
Chairman
|
||
Larry
S. Boulet
|
64
|
Director
|
||
David
W. Crabb, M.D.
|
57
|
Director
|
||
Leslie
B. Daniels
|
63
|
Director
|
||
David
L. Omachinski
|
58
|
Director
|
||
A.
Charlene Sullivan, Ph.D.
|
61
|
Director
|
||
Anthony
S. Chilton, Ph.D.
|
|
54
|
|
Director,
President and Chief Executive
Officer
|
|
1.
|
Financial
Statements: See Index to Consolidated Financial Statements under
Item 8 on Page 30 of this report.
|
|
2.
|
Financial
Statement Schedules: Schedules are not required, are not
applicable or the information is shown in the Notes to the Consolidated
Financial Statements.
|
|
3.
|
Exhibits: The
following exhibits are filed as part of, or incorporated by reference
into, this report:
|
Number
|
Description of Exhibits
|
|
(3)
|
3.1
|
Second
Amended and Restated Articles of Incorporation of Bioanalytical Systems,
Inc. (incorporated by reference to Exhibit 3.1 to Form 10-Q for the
quarter ended December 31, 1997).
|
3.2
|
Second
Amended and Restated Bylaws of Bioanalytical Systems, Inc., as
subsequently amended (incorporated by reference to Exhibit 3.2 to Form
10-K for the fiscal year ended September 30, 2009 ).
|
|
(4)
|
4.1
|
Specimen
Certificate for Common Shares (incorporated by reference to Exhibit 4.1 to
Registration Statement on form S-1, Registration No.
333-36429).
|
4.2
|
See
Exhibits 3.1 and 3.2 to this Form 10-K.
|
|
(10)
|
10.1
|
Loan
Agreement between Bioanalytical Systems, Inc. and Regions Bank dated
December 18, 2007 (incorporated by reference to Exhibit 10.7 of Form 10-K
for the fiscal year ended September 30, 2007).
|
10.2
|
Form
of Grant of non-qualified stock options dated April 1, 2004 to Michael R.
Cox (*) (incorporated by reference to Exhibit 10.3 to Form 10-Q for the
fiscal quarter ended March 31, 2004).
|
|
10.3
|
Agreement
for Lease, by and among Bioanalytical Systems, Inc., Bioanalytical Systems
Limited and Pettifer Estates Limited, dated October 11, 2007 (incorporated
by reference to Exhibit 10.1 to Form 8-K filed October 17,
2007).
|
|
10.4
|
Form
of Lease, by and among Bioanalytical Systems, Inc., Bioanalytical Systems
Limited and Pettifer Estates Limited (incorporated by reference to Exhibit
10.2 to Form 8-K filed October 17, 2007).
|
|
10.5
|
Employment
Agreement between Michael R. Cox and Bioanalytical Systems, Inc., dated
November 6, 2007 (incorporated by reference to Exhibit 10.1 to Form 8-K
filed November 13, 2007).
|
|
10.6
|
Employee
Incentive Stock Option Agreement between Michael R. Cox and Bioanalytical
Systems, Inc., dated November 6, 2007 (incorporated by reference to
Exhibit 10.2 to Form 8-K filed November 13,
2007).
|
Number
|
Description of Exhibits
|
|
10.7
|
Bioanalytical
Systems, Inc. 2008 Director and Employee Stock Option Plan (incorporated
by reference to Appendix A to the Revised Definitive Proxy Statement filed
February 5, 2008, SEC File No. 000-23357).
|
|
10.8
|
Form
of Bioanalytical Systems, Inc. 2008 Director and Employee Stock Option
Plan (*) (incorporated by reference to Exhibit 10.31 to Form 10-K for the
fiscal year ended September 30, 2008).
|
|
10.9
|
Employment
Agreement between Anthony S. Chilton and Bioanalytical Systems, Inc.,
dated December 1, 2008 (incorporated by reference to Exhibit 10.1 to Form
8-K filed November 14, 2008).
|
|
10.10
|
Employee
Incentive Stock Option Agreement between Anthony S. Chilton and
Bioanalytical Systems, Inc., dated December 1, 2008 (incorporated by
reference to Exhibit 10.36 to Form 10-K for the fiscal year ended
September 30, 2008).
|
|
10.11
|
Second
amendment to Loan Agreement between Bioanalytical Systems, Inc. and
Regions Bank, dated May 18, 2009 (incorporated by reference to Exhibit
10.3 to Form 10-Q for the fiscal quarter ended March 31,
2009).
|
|
10.12
|
Third
amendment to Loan Agreement between Bioanalytical Systems, Inc. and
Regions Bank, dated January 13, 2010 (incorporated by reference to Exhibit
10.34 to Form 10-K for the fiscal year ended September 30,
2009).
|
|
10.13
|
Loan
and Security Agreement by and between Bioanalytical Systems, Inc., and
Entrepreneur Growth Capital LLC, executed January 13, 2010 (incorporated
by reference to Exhibit 10.35 to Form 10-K for the fiscal year ended
September 30, 2009).
|
|
10.14
|
Agreement
for Lease, by Bioanalytical Systems, Inc. and Forum Financial Services,
dated January 22, 2010 (incorporated by reference to Exhibit 10.5 to Form
10-Q for the fiscal quarter ended December 31, 2009).
|
|
10.15
|
Amendment
to Employment Agreement between Anthony S. Chilton and Bioanalytical
Systems, Inc., dated February 1, 2010 (incorporated by reference to
Exhibit 10.6 to Form 10-Q for the fiscal quarter ended December 31,
2009).
|
|
10.16
|
Employee
Incentive Stock Option Agreement between Anthony S. Chilton and
Bioanalytical Systems, Inc., dated February 1, 2010 (incorporated by
reference to Exhibit 10.7 to Form 10-Q for the fiscal quarter ended
December 31, 2009).
|
|
10.17
|
Amendment
to Employment Agreement between Michael R. Cox and Bioanalytical Systems
Inc., dated April 15, 2010 (incorporated by reference to Exhibit 10.1 to
Form 10-Q for the fiscal quarter ended June 30, 2010).
|
|
10.18
|
Employee
Incentive Stock Option Agreement between Michael R. Cox and Bioanalytical
Systems Inc. dated April 15, 2010 (incorporated by reference to Exhibit
10.2 to Form 10-Q for the fiscal quarter ended June 30,
2010).
|
|
10.19
|
Promissory
Note between Bioanalytical Systems, Inc. and Algorithme Holding Inc. dated
April 30, 2010 (incorporated by reference to Exhibit 10.1 to Form 8-K
filed April 30, 2010).
|
|
10.20
|
Employee
Incentive Stock Option Agreement between Anthony S. Chilton and
Bioanalytical Systems, Inc., dated May 12, 2010 (incorporated by reference
to Exhibit 10.5 to Form 10-Q for the fiscal quarter ended June 30,
2010).
|
Number
|
Description of Exhibits
|
|
10.21
|
Amendment
to Loan Agreement between Bioanalytical Systems, Inc., and Entrepreneur
Growth Capital LLC, dated May 13, 2010 (incorporated by reference to
Exhibit 10.9 to Form 10-Q for the fiscal quarter ended March 31,
2010).
|
|
10.22
|
Employment
Agreement between Alberto F. Hidalgo and Bioanalytical Systems Inc., dated
August 18, 2010 (filed herewith).
|
|
10.23
|
Non-Qualified
Employee Stock Option Agreement between Alberto F. Hidalgo and
Bioanalytical Systems Inc., dated August 18, 2010 (filed
herewith).
|
|
10.24
|
Fourth
Amendment to Loan Agreement between Bioanalytical Systems, Inc. and
Regions Bank, executed November 29, 2010 (incorporated by reference to
Exhibit 10.1 for Form 8-K filed December 2, 2010).
|
|
10.25
|
Amendment
to Loan Agreement between Bioanalytical Systems, Inc., and Entrepreneur
Growth Capital LLC, dated December 23, 2010 (incorporated by reference to
Exhibit 10.1 to Form 8-K filed December 30,
2010).
|
|
10.26
|
Fourth
Amendment to Loan Agreement between Bioanalytical Systems, Inc. and
Regions Bank, as amended on December 29, 2010 (incorporated by reference
to Exhibit 10.1 for Form 8-K filed January 5,
2011).
|
|
(14)
|
14.1
|
Code
of Ethics (incorporated by reference to Exhibit 14 to Form 10-K for the
fiscal year ended September 30, 2006).
|
(21)
|
21.1
|
Subsidiaries
of the Registrant (filed herewith).
|
(23)
|
23.1
|
Consent
of Independent Registered Public Accounting Firm Crowe Horwath LLP (filed
herewith).
|
(31)
|
31.1
|
Certification
of Chief Executive Officer (filed herewith).
|
31.2
|
Certification
of Chief Financial Officer (filed herewith).
|
|
(32)
|
32.1
|
Written
Statement of Chief Executive Officer and Chief Financial Officer Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
(filed herewith)..
|
BIOANALYTICAL
SYSTEMS, INC.
|
|
(Registrant)
|
|
Date: January
12, 2011
|
By: /s/ Anthony
S. Chilton
|
Anthony
S. Chilton
|
|
President
and Chief Executive Officer
|
|
Date: January
12, 2011
|
By: /s/ Michael
R. Cox
|
Michael
R. Cox
|
|
Vice
President, Finance and Administration,
Chief
Financial Officer and
Treasurer
|
Signature
|
Capacity
|
Date
|
||
/s/ Anthony
S. Chilton
|
Director,
President and Chief Executive
|
January
12, 2011
|
||
Anthony
S. Chilton
|
Officer
(Principal Executive Officer)
|
|||
Vice
President, Finance and
|
January
12, 2011
|
|||
Administration,
Chief Financial Officer
|
||||
/s/ Michael
R. Cox
|
and
Treasurer (Principal Financial and
|
|||
Michael
R. Cox
|
Accounting
Officer)
|
|||
/s/ John
B. Landis, Ph.D.
|
Chairman
|
January
12, 2011
|
||
John
B. Landis, Ph.D.
|
||||
/s/ Larry
S. Boulet
|
Director
|
January
12, 2011
|
||
Larry
S. Boulet
|
||||
/s/ David
W. Crabb
|
Director
|
January
12, 2011
|
||
David
W. Crabb
|
||||
/s/ David
L. Omachinski
|
Director
|
January
12, 2011
|
||
David
L. Omachinski
|
||||
/s/ A.
Charlene Sullivan, Ph.D.
|
Director
|
January
12, 2011
|
||
A.
Charlene Sullivan, Ph.D.
|
|
|