x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended March 31, 2009
|
OR
|
|
¨
|
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)
|
|
(765) 463-4527
(Registrant's
telephone number, including area
code)
|
Page
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
||
Item
1
|
Condensed
Consolidated Financial Statements (Unaudited):
|
||
Condensed
Consolidated Balance Sheets as of March 31, 2009 and September 30,
2008
|
3
|
||
Condensed
Consolidated Statements of Operations for the Three and Six Months Ended
March 31, 2009 and 2008
|
4
|
||
Condensed
Consolidated Statements of Cash Flows for the Six Months Ended March 31,
2009 and 2008
|
5
|
||
Notes
to Condensed Consolidated Financial Statements
|
6
|
||
Item
2
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
|
Item
4
|
Controls
and Procedures
|
21
|
|
PART
II
|
OTHER
INFORMATION
|
||
Item
1A
|
Risk
Factors
|
21
|
|
Item
4T
|
Submission
of Matters to a Vote of Security Holders
|
22
|
|
Item
6
|
Exhibits
|
22
|
|
Signatures
|
23
|
March 31,
2009
|
September 30,
2008
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 300 | $ | 335 | ||||
Accounts
receivable
|
||||||||
Trade
|
4,416 | 6,705 | ||||||
Unbilled
revenues and other
|
1,592 | 2,653 | ||||||
Inventories
|
2,028 | 2,184 | ||||||
Deferred
income taxes
|
516 | 516 | ||||||
Refundable
income taxes
|
677 | 1,283 | ||||||
Prepaid
expenses
|
722 | 639 | ||||||
Current
assets of discontinued operations
|
65 | 629 | ||||||
Total
current assets
|
10,316 | 14,944 | ||||||
Property
and equipment, net
|
22,276 | 23,135 | ||||||
Deferred
income taxes
|
651 | — | ||||||
Goodwill
|
1,855 | 1,855 | ||||||
Intangible
assets, net
|
129 | 144 | ||||||
Debt
issue costs
|
153 | 177 | ||||||
Other
assets
|
89 | 92 | ||||||
Total
assets
|
$ | 35,469 | $ | 40,347 | ||||
Liabilities
and shareholders’ equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,952 | $ | 2,209 | ||||
Accrued
expenses
|
1,985 | 2,061 | ||||||
Customer
advances
|
3,405 | 4,032 | ||||||
Income
tax accruals
|
473 | 473 | ||||||
Revolving
line of credit
|
1,678 | 2,023 | ||||||
Current
portion of capital lease obligation
|
737 | 720 | ||||||
Current
portion of long-term debt
|
507 | 491 | ||||||
Current
liabilities of discontinued operations
|
10 | 41 | ||||||
Total
current liabilities
|
10,747 | 12,050 | ||||||
Capital
lease obligation, less current portion
|
1,075 | 1,443 | ||||||
Long-term
debt, less current portion
|
8,455 | 8,715 | ||||||
Fair
value of interest rate swaps
|
131 | — | ||||||
Deferred
income taxes
|
— | 344 | ||||||
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
|
||||||||
March
31, 2009 and September 30, 2008 December,
2007
|
1,191 | 1,191 | ||||||
Additional
paid-in capital
|
12,870 | 12,561 | ||||||
Retained
earnings
|
758 | 4,173 | ||||||
Accumulated
other comprehensive income (loss)
|
242 | (130 | ) | |||||
Total
shareholders’ equity
|
15,061 | 17,795 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 35,469 | $ | 40,347 |
Three Months Ended
March 31,
|
Six Months Ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
revenue
|
$ | 5,322 | $ | 8,550 | $ | 11,310 | $ | 16,584 | ||||||||
Product
revenue
|
1,744 | 1,751 | 3,833 | 4,281 | ||||||||||||
Total
revenue
|
7,066 | 10,301 | 15,143 | 20,865 | ||||||||||||
Cost
of service revenue
|
5,276 | 5,663 | 10,564 | 11,108 | ||||||||||||
Cost
of product revenue
|
918 | 680 | 1,660 | 1,714 | ||||||||||||
Total
cost of revenue
|
6,194 | 6,343 | 12,224 | 12,822 | ||||||||||||
Gross
profit
|
872 | 3,958 | 2,919 | 8,043 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling
|
829 | 875 | 1,835 | 1,666 | ||||||||||||
Research
and development
|
213 | 183 | 418 | 371 | ||||||||||||
General
and administrative
|
2,030 | 1,853 | 4,440 | 3,678 | ||||||||||||
Total
operating expenses
|
3,072 | 2,911 | 6,693 | 5,715 | ||||||||||||
Operating
income (loss)
|
(2,200 | ) | 1,047 | (3,774 | ) | 2,328 | ||||||||||
Interest
expense
|
(249 | ) | (202 | ) | (641 | ) | (450 | ) | ||||||||
Other
income
|
— | 2 | 3 | 33 | ||||||||||||
Income
(loss) from continuing operations before income taxes
|
(2,449 | ) | 847 | (4,412 | ) | 1,911 | ||||||||||
Income
taxes (benefit)
|
(618 | ) | 415 | (997 | ) | 892 | ||||||||||
Net
income (loss) from continuing operations
|
$ | (1,831 | ) | $ | 432 | $ | (3,415 | ) | $ | 1,019 | ||||||
Discontinued
Operations (Note 5)
|
||||||||||||||||
Loss
from discontinued operations before income taxes
|
$ | — | $ | (936 | ) | $ | — | $ | (1,931 | ) | ||||||
Tax
benefit
|
— | 368 | — | 760 | ||||||||||||
Net
loss from discontinued operations
|
$ | — | $ | (568 | ) | $ | — | $ | (1,171 | ) | ||||||
Net
loss
|
$ | (1,831 | ) | $ | (136 | ) | $ | (3,415 | ) | $ | (152 | ) | ||||
Basic
net income (loss) per share:
|
||||||||||||||||
Net
income(loss) per share from continuing operations
|
$ | (0.37 | ) | $ | 0.09 | $ | (0.69 | ) | $ | 0.21 | ||||||
Net
loss per share from discontinued operations
|
— | (0.12 | ) | — | (0.24 | ) | ||||||||||
Basic
net loss per share
|
$ | (0.37 | ) | $ | (0.03 | ) | $ | (0.69 | ) | $ | (0.03 | ) | ||||
Diluted
net income (loss) per share:
|
||||||||||||||||
Net
income (loss) per share from continuing operations
|
$ | (0.37 | ) | $ | 0.09 | $ | (0.69 | ) | $ | 0.20 | ||||||
Net
loss per share from discontinued operations
|
— | (0.12 | ) | — | (0.23 | ) | ||||||||||
Diluted
net loss per share
|
$ | (0.37 | ) | $ | (0.03 | ) | $ | (0.69 | ) | $ | (0.03 | ) | ||||
Weighted
common shares outstanding:
|
||||||||||||||||
Basic
|
4,915 | 4,912 | 4,915 | 4,914 | ||||||||||||
Diluted
|
4,915 | 4,987 | 4,915 | 5,009 |
Six
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
activities:
|
||||||||
Net
loss
|
$ | (3,415 | ) | $ | (152 | ) | ||
Adjustments
to reconcile net loss from continuing operations to net cash provided by
operating activities:
|
||||||||
Net
loss from discontinued operations
|
— | 1,171 | ||||||
Depreciation
and amortization
|
1,340 | 1,427 | ||||||
Employee
stock compensation expense
|
309 | 226 | ||||||
Bad
debt expense
|
53 | 22 | ||||||
Loss
on interest rate swap
|
131 | — | ||||||
Loss
on sale of property and equipment
|
21 | 7 | ||||||
Deferred
income taxes
|
(995 | ) | — | |||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
3,297 | 60 | ||||||
Inventories
|
156 | (153 | ) | |||||
Refundable
income taxes
|
605 | 531 | ||||||
Prepaid
expenses and other assets
|
(81 | ) | (122 | ) | ||||
Accounts
payable
|
(257 | ) | 397 | |||||
Accrued
expenses
|
(76 | ) | (1,282 | ) | ||||
Customer
advances
|
(627 | ) | 135 | |||||
Net
cash provided by continuing operating activities
|
461 | 2,267 | ||||||
Investing
activities:
|
||||||||
Capital
expenditures, net of proceeds from sale of property and
equipment
|
(584 | ) | (1,121 | ) | ||||
Net
cash used by continuing investing activities
|
(584 | ) | (1,121 | ) | ||||
Financing
activities:
|
||||||||
Payments
of long-term debt
|
(244 | ) | (4,642 | ) | ||||
Borrowings
on long-term debt
|
— | 1,400 | ||||||
Payments
on revolving line of credit
|
(8,916 | ) | (3,669 | ) | ||||
Borrowings
on revolving line of credit
|
8,571 | 5,584 | ||||||
Payments
on capital lease obligations
|
(351 | ) | (289 | ) | ||||
Net
proceeds from the exercise of stock options
|
— | 13 | ||||||
Net
cash used by continuing financing activities
|
(940 | ) | (1,603 | ) | ||||
Cash
Flow of Discontinued Operations:
|
||||||||
Cash
provided (used) by operating activities
|
533 | (200 | ) | |||||
Net
cash used by investing activities
|
— | (1,686 | ) | |||||
Net
cash provided (used) by discontinued operations
|
533 | (1,886 | ) | |||||
Effect
of exchange rate changes
|
495 | (29 | ) | |||||
Net
decrease in cash and cash equivalents
|
(35 | ) | (2,372 | ) | ||||
Cash
and cash equivalents at beginning of period
|
335 | 2,837 | ||||||
Cash
and cash equivalents at end of period
|
$ | 300 | $ | 465 |
1.
|
DESCRIPTION
OF THE BUSINESS AND BASIS OF
PRESENTATION
|
2.
|
STOCK-BASED
COMPENSATION
|
Options
(shares)
|
Weighted-
Average Exercise
Price
|
Weighted-
Average Grant
Date Fair
Value
|
||||||||||
Outstanding
- October 1, 2008
|
754 | $ | 6.06 | $ | 3.50 | |||||||
Granted
|
60 | $ | 4.07 | $ | 2.73 | |||||||
Terminated
|
(148 | ) | $ | 5.67 | $ | 3.60 | ||||||
Outstanding
- December 31, 2008
|
666 | $ | 5.97 | $ | 3.40 | |||||||
Terminated
|
(26 | ) | $ | 5.29 | $ | 3.62 | ||||||
Outstanding
- March 31, 2009
|
640
|
$ |
6.00
|
$ |
3.39
|
3.
|
INCOME (LOSS) PER
SHARE
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Basic
net income (loss) per share from continuing operations:
|
||||||||||||||||
Net
income (loss) applicable to common shareholders
|
$ | (1,831 | ) | $ | 432 | $ | (3,415 | ) | $ | 1,019 | ||||||
Weighted
average common shares outstanding
|
4,915 | 4,912 | 4,915 | 4,914 | ||||||||||||
Basic
net income (loss) per share from continuing operations
|
$ | (0.37 | ) | $ | 0.09 | $ | (0.69 | ) | $ | 0.21 | ||||||
Diluted
net income (loss) per share from continuing operations:
|
||||||||||||||||
Diluted
net income (loss) applicable to common shareholders
|
$ | (1,831 | ) | $ | 432 | $ | (3,415 | ) | $ | 1,019 | ||||||
Weighted
average common shares outstanding
|
4,915 | 4,912 | 4,915 | 4,914 | ||||||||||||
Dilutive
stock options/shares
|
— | 75 | — | 95 | ||||||||||||
Diluted
weighted average common shares outstanding
|
4,915 | 4,987 | 4,915 | 5,009 | ||||||||||||
Diluted
net income (loss) per share from continuing operations
|
$ | (0.37 | ) | $ | 0.09 | $ | (0.69 | ) | $ | 0.20 |
4.
|
INVENTORIES
|
March
31,
2009
|
September
30,
2008
|
|||||||
Raw
materials
|
$ | 1,597 | $ | 1,748 | ||||
Work
in progress
|
201 | 202 | ||||||
Finished
goods
|
230 | 234 | ||||||
$ | 2,028 | $ | 2,184 |
5.
|
DISCONTINUED
OPERATIONS
|
(in thousands)
|
Three
Months
ended
March 31,
2008
|
Six Months
ended
March 31,
2008
|
||||||
Net
Sales
|
$ | 730 | $ | 1,617 | ||||
Loss
from operations before tax benefit
|
(936 | ) | (1,931 | ) | ||||
Income
tax benefit
|
368 | 760 | ||||||
Net
loss
|
$ | (568 | ) | $ | (1,171 | ) |
March 31,
2009
|
September 30,
2008
|
|||||||
Receivables,
net of allowance for doubtful accounts
|
$ | 28 | $ | 346 | ||||
Other
current assets
|
37 | 283 | ||||||
Total
assets
|
$ | 65 | $ | 629 | ||||
Accounts
payable, accrued liabilities and equity
|
$ | 65 | $ | 629 |
6.
|
SEGMENT
INFORMATION
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue:
|
||||||||||||||||
Service
|
$ | 5,322 | $ | 8,550 | $ | 11,310 | $ | 16,584 | ||||||||
Product
|
1,744 | 1,751 | 3,833 | 4,281 | ||||||||||||
$ | 7,066 | $ | 10,301 | $ | 15,143 | $ | 20,865 | |||||||||
Operating
income (loss) from continuing operations:
|
||||||||||||||||
Service
|
$ | (1,735 | ) | $ | 930 | $ | (3,050 | ) | $ | 1,884 | ||||||
Product
|
(465 | ) | 117 | (724 | ) | 444 | ||||||||||
$ | (2,200 | ) | $ | 1,047 | $ | (3,774 | ) | $ | 2,328 |
7.
|
INCOME
TAXES
|
Tax
Jurisdiction
|
Years
|
||
US
Federal and State
|
2004-2008
|
|
|
United
Kingdom
|
2001-2008 |
8.
|
DEBT
|
|
•
|
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.
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
revenue
|
75.3 | % | 83.0 | % | 74.7 | % | 79.5 | % | ||||||||
Product
revenue
|
24.7 | 17.0 | 25.3 | 20.5 | ||||||||||||
Total
revenue
|
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||
Cost
of service revenue (a)
|
99.1 | 66.2 | 93.4 | 67.0 | ||||||||||||
Cost
of product revenue (a)
|
52.7 | 38.8 | 43.3 | 40.0 | ||||||||||||
Total
cost of revenue
|
87.7 | 61.6 | 80.7 | 61.4 | ||||||||||||
Gross
profit
|
12.3 | 38.4 | 19.3 | 38.6 | ||||||||||||
Total
operating expenses
|
43.5 | 28.3 | 44.2 | 27.4 | ||||||||||||
Operating
income (loss)
|
(31.2 | ) | 10.1 | (24.9 | ) | 11.2 | ||||||||||
Other
expense
|
3.5 | 1.9 | 4.2 | 2.0 | ||||||||||||
Income
(loss) from continuing operations before income taxes
|
(34.7 | ) | 8.2 | (29.1 | ) | 9.2 | ||||||||||
Income
taxes (benefit)
|
(8.7 | ) | 4.0 | (6.6 | ) | 4.3 | ||||||||||
Net
income (loss) from continuing operations
|
(26.0 | ) % | 4.2 | % | (22.5 | ) % | 4.9 | % |
Votes For
|
Votes
Withheld
|
|||||||
1) Proposal
for Re-election of all five directors of BASi to serve for a one-year
term:
|
||||||||
William
E. Baitinger
|
1,814,657 | 2,891,224 | ||||||
Larry
S. Boulet
|
2,152,129 | 2,553,752 | ||||||
David
W. Crabb
|
1,876,679 | 2,829,202 | ||||||
Leslie
B. Daniels
|
2,036,830 | 2,669,051 | ||||||
Richard
M. Shepperd
|
2,220,364 | 2,485,516 |
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-Q for the quarter ended December 31, 2008).
|
||
(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).
|
|
(10)
|
10.1
|
Waiver
letter, dated February 17, 2009, from Regions Bank (incorporated by
reference to Exhibit 10.7 to Form 10-Q for the quarter ended December 31,
2008).
|
|
10.2
|
Amendment
to Employment Agreement, dated January 12, 2009, by and among
Bioanalytical Systems, Inc. and Richard M. Shepperd (incorporated by
reference to Exhibit 10.1 to Form 8-K filed January 14,
2009).
|
||
10.3
|
Temporary
amendment to covenant under Loan Agreement with Regions Bank,
dated May 18, 2009 (filed herewith).
|
||
(31)
|
31.1
|
Certification
of Richard M. Shepperd (filed herewith).
|
|
31.2
|
Certification
of Michael R. Cox (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:
May 18, 2009
|
By: /s/ Richard M.
Shepperd
|
Richard
M. Shepperd
|
|
President
and Chief Executive Officer
|
|
Date: May
18, 2009
|
By: /s/ Michael R.
Cox
|
Michael
R. Cox
|
|
Vice
President, Finance and Administration,
Chief
Financial Officer and
Treasurer
|