☒
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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California
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77-0213001
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3240 Whipple Road, Union City, California
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94587
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(Address of principal executive offices)
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(Zip code)
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Title of Class
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Name of Each Exchange on Which Registered
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Common Stock, no par value
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NASDAQ Global Select Market
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1.
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3
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Item 1A.
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12
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Item 1B.
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22
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Item 2.
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22
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Item 3.
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22
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Item 4.
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22
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PART II
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Item 5.
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23
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Item 6.
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25
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Item 7.
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26
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Item 7A.
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48
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Item 8.
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50
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Item 9.
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82
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Item 9A.
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82
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Item 9B.
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84
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PART III
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Item 10.
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84
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Item 11.
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84
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Item 12.
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84
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Item 13.
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84
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Item 14.
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84
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PART IV
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Item 15.
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85
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87
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88
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·
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point-of-care diagnostic instruments and consumables used in the medical market; and |
·
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point-of-care diagnostic instruments and consumables used in the veterinary market |
Piccolo Profiles
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Description of the Test Panels
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Basic Metabolic Panel (CLIA waived)
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BUN, CA, CL-, CRE, GLU, K+, NA+, tCO2.
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Basic Metabolic Panel Plus
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BUN, CA, CL-, CRE, GLU, K+, LD, MG, NA+, tCO2.
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BioChemistry Panel Plus (1)
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ALB, ALP, ALT, AMY, AST, BUN, CA, CRE, CRP, GGT, GLU, TP, UA.
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Comprehensive Metabolic Panel (CLIA waived)
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ALB, ALP, ALT, AST, BUN, CA, CL-, CRE, GLU, K+, NA+, TBIL, tCO2, TP.
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Electrolyte Panel (CLIA waived)
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CL-, K+, NA+, tCO2.
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General Chemistry 6 (CLIA waived)
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ALT, AST, BUN, CRE, GGT, GLU.
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General Chemistry 13 (CLIA waived)
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ALB, ALP, ALT, AMY, AST, BUN, CA, CRE, GGT, GLU, TBIL, TP, UA.
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Hepatic Function Panel
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ALB, ALP, ALT, AST, DBIL, TBIL, TP.
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Kidney Check (CLIA waived) (1)
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BUN, CRE.
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Lipid Panel (CLIA waived)
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CHOL, CHOL/HDL RATIO, HDL, LDL, TRIG, VLDL.
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Lipid Panel Plus (CLIA waived)
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ALT, AST, CHOL, CHOL/HDL RATIO, GLU, HDL, LDL, TRIG, VLDL.
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Liver Panel Plus (CLIA waived)
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ALB, ALP, ALT, AMY, AST, GGT, TBIL, TP.
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MetLac 12 Panel (1)
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ALB, BUN, CA, CL-, CRE, GLU, K+, LAC, MG, NA+, PHOS, tCO2.
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MetLyte 8 Panel (CLIA waived)
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BUN, CK, CL-, CRE, GLU, K+, NA+, tCO2.
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MetLyte Plus CRP (1)
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BUN, CK, CL-, CRE, CRP, GLU, K+, NA+, tCO2.
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Renal Function Panel (CLIA waived)
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ALB, BUN, CA, CL-, CRE, GLU, K+, NA+, PHOS, tCO2.
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(1) | The panel is offered only on our Piccolo Xpress. |
·
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Avian/Reptilian Profile Plus is ideal for measuring analytes that represent the most important areas of concern in avian and reptilian patients. |
·
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Canine Wellness Profile including Heartworm is ideal for performing a comprehensive wellness chemistry panel and testing for heartworm antigen simultaneously, running wellness exams on canines greater than 7 months of age, implementing a comprehensive wellness program or streamlining existing wellness programs while increasing profit and cost savings and reducing technician time. The panel is offered only on our VetScan VS2. |
·
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Comprehensive Diagnostic Profile is ideal for providing complete chemistry and electrolyte analysis for pre-anesthetic, general health, ill patient, geriatric and wellness testing. |
·
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Critical Care Profile Plus is ideal for serial testing, rechecks, fluid therapy and monitoring hospitalized patients. |
·
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Equine Profile Plus is ideal for routine equine checkups, wellness testing, ill patient diagnostics and prepurchase examinations for equine hospitals, ambulatory practitioners, critical care units and mixed animal hospitals. |
·
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Kidney Profile Plus is ideal for kidney evaluation and monitoring in cats and dogs of all ages, implementing and streamlining renal function monitoring protocol, reducing technician time, and cost savings. The panel is offered only on our VetScan VS2. |
·
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Large Animal Profile is ideal for herd health assessment and monitoring, prognostic indicator and diagnostic tool for beef and dairy cattle. |
·
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Mammalian Liver Profile is ideal for obtaining baseline liver values, diagnosis and monitoring of hepatic disease and monitoring hepatic function while administering nonsteroidal anti-inflammatory drugs (NSAIDs) or other potentially hepatotoxic medications. |
·
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Prep Profile II is a basic health screen for pre-anesthetic evaluation and testing minimal values for baselines of young, healthy patients or recheck profile for some disease states. |
·
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Thyroxine (T4) / Cholesterol Profile is ideal for routine screening of hypothyroidism in dogs and diagnostic for hyperthyroidism in cats, titrating and monitoring patients on thyroid hormone replacement therapy or patients being treated for hyperthyroid disease. |
·
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The VetScan VSpro Coagulation Test includes the evaluation of both the prothrombin time (PT) and the Activated Partial Thromboplastin Time (aPTT). A combination assay (PT and aPTT) for canine and feline coagulation testing is used with the VSpro specialty analyzer to provide results from a single drop of citrated whole blood in minutes prior to surgery. |
·
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The VetScan VSpro Fibrinogen Test provides quantitative in-vitro determination of fibrinogen levels in equine platelet poor plasma from a citrated stabilized whole blood sample. Fibrinogen is an important parameter that is commonly tested and evaluated as a marker of inflammation in many species, primarily equine and large animals. |
·
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The VetScan Canine Anaplasma Rapid Test is a highly sensitive and specific test for the detection of antibodies to A. phagocytophilum and/or A. platys in canine whole blood, serum, or plasma. |
·
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The VetScan Canine Ehrlichia Rapid Test is a rapid test for the qualitative detection of antibodies to E. canis, E. chaffeensis, and/or E. ewingii in canines. |
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The VetScan Feline FeLV/FIV Rapid Test is a rapid test for the detection of antibodies to Feline Immunodeficiency Virus and Antigen to Feline Leukemia Virus in feline whole blood, serum, or plasma. |
·
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The VetScan Canine Heartworm Rapid Test is a rapid test for the qualitative detection of Dirofilaria immitis in canine or feline whole blood, serum or plasma. |
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The VetScan Canine Lyme Rapid Test is a rapid test for the qualitative detection of antibodies to Borrelia burgdorferi in canine whole blood, serum or plasma. |
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The VetScan Canine Parvovirus Rapid Test is a rapid test for the qualitative detection of canine parvovirus antigen in feces. |
·
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The VetScan Giardia Rapid Test is a rapid test for the qualitative detection of Giardia cyst antigens in canine feces. |
·
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Point-of-Care Blood Chemistry Instruments: Our Piccolo and VetScan systems employ a variety of components designed or specified by us, including a variable speed motor, microprocessors, a liquid crystal display, a printer, a spectrophotometer and other electronic components. These components are manufactured by several third-party suppliers that have been qualified and approved by us and then assembled by our contract manufacturers. The components are assembled at our facility into the finished product and completely tested to ensure that the finished product meets product specifications. Our blood analyzer products use several technologically-advanced components that we currently purchase from a limited number of suppliers, including certain components from our single-source supplier, Hamamatsu Corporation. Our analyzers also use a printer that is primarily made by Advanced Printing Systems. |
·
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Reagent Discs: The molded plastic discs used in the manufacture of the reagent disc are manufactured to our specifications by established injection-molding manufacturers. To achieve the precision required for accurate test results, the discs must be molded to very strict tolerances. To date, we have qualified two injection-molding manufacturers, C. Brewer & Co., a division of Balda AG, and Nypro, Inc., a subsidiary of Jabil Circuit, to make the molded plastic discs that, when loaded with reagents and welded together, form our reagent disc products. We assemble the reagent discs by loading the molded plastic discs with reagents and then ultrasonically welding together the top and bottom pieces. |
·
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Reagent Beads and Reagents: Our reagent discs contain dry reagent chemistry beads and diluents to perform blood analyses. Lateral flow rapid tests contain reagents and diluents necessary to perform blood analyses. We purchase chemicals from third-party suppliers and formulate the raw materials, using proprietary processes, into beads at the proper concentration and consistency to facilitate placement in the reagent disc and provide homogeneous dissolution and mixing when contacted by the diluted sample. We are dependent on the following companies as single source providers of one or more chemicals that we use in the reagent production process: Amano Enzyme USA Co., Ltd., Kikkoman Corporation Biochemical Division, Microgenics Corporation, a division of Thermo Fisher Scientific, Roche Molecular Biochemicals of Roche Diagnostics Corporation, a division of F. Hoffmann-La Roche, Ltd., SA Scientific Co., Sekisui Diagnostics, Sigma Aldrich Inc. and Toyobo Specialties. |
·
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Hematology Instruments and Reagent Kits: Our VetScan hematology instruments are manufactured by Diatron in Hungary and are purchased by us as a completed instrument. In addition, we currently have qualified two suppliers to produce the reagent kits for our hematology instruments: Clinical Diagnostic Solutions, Inc. and Diatron. |
·
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VSpro Specialty Analyzers and Cartridges: Our VetScan VSpro specialty analyzers and cartridges are manufactured by SMB in Denmark and are purchased by us as completed products. Under our amended equipment manufacturing agreement with SMB effective January 2014, we have annual purchase requirements on the VSpro specialty analyzers and related cartridges during each calendar year from 2014 through 2016. |
·
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i-STAT Analyzers and Cartridges: The VetScan i-STAT 1 analyzers and cartridges are manufactured by Abbott and are purchased by us as completed products. We are subject to minimum purchase and minimum sales requirement if we want to maintain as an exclusive distributor of the related products. The initial term of the agreement ended in December 2014. After this initial term, our agreement continues automatically for successive one-year periods unless terminated by either party. |
·
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Rapid Tests: Substantially all of our VetScan Rapid Tests are manufactured by a single source supplier. |
·
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new product or service announcements made by us or our competitors;
|
·
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changes in our pricing structures or the pricing structures of our competitors;
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·
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the sales performance of our independent distributors;
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·
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excess inventory levels and inventory imbalances at our independent distributors;
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·
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our ability to develop, introduce and market new products or services on a timely basis, or at all;
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·
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our manufacturing capacities and our ability to increase the scale of these capacities;
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·
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the mix of sales among our instruments, consumable products and services;
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·
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the amount of our research and development and sales, general and administrative expenses; and
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·
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changes in our strategies.
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· | Blood Chemistry Analyzer Components: Our blood analyzer products use several technologically-advanced components that we currently purchase from a limited number of suppliers, including certain components from our single source supplier, Hamamatsu Corporation. Our analyzers also use a printer that is primarily made by Advanced Printing Systems. The loss of the supply of any of these components could force us to redesign our blood chemistry analyzers. |
· | Reagent Discs: Two injection-molding manufacturers, C. Brewer Co., a division of Balda AG, and Nypro, Inc., a subsidiary of Jabil Circuit, currently make the molded plastic discs that, when loaded with reagents and welded together, form our reagent disc products. We believe that only a few manufacturers are capable of producing these discs to the narrow tolerances that we require. To date, we have only qualified these two manufacturers to manufacture the molded plastic discs. |
· | Reagent Chemicals: We currently depend on the following single source vendors for some of the chemicals that we use to produce the reagents and dry reagent chemistry beads that are either inserted in our reagent discs, lateral flow rapid tests or sold as stand-alone products: Amano Enzyme USA Co., Ltd., Kikkoman Corporation Biochemical Division, Microgenics Corporation, a division of Thermo Fisher Scientific, Roche Molecular Biochemicals of Roche Diagnostics Corporation, a division of F. Hoffmann-La Roche, Ltd., SA Scientific Co., Sekisui Diagnostics, Sigma Aldrich Inc. and Toyobo Specialties. |
· | Hematology Instruments and Reagent Kits: Our VetScan hematology instruments are manufactured by Diatron in Hungary and are purchased by us as a completed instrument. In addition, we currently have qualified two suppliers to produce the reagent kits for our hematology instruments: Clinical Diagnostic Solutions, Inc. and Diatron. |
· | VSpro Specialty Analyzers and Cartridges: Our VetScan VSpro specialty analyzers and cartridges are manufactured by SMB in Denmark and are purchased by us as completed products. |
· | i-STAT Analyzers and Cartridges: Our VetScan i-STAT 1 analyzers and cartridges are manufactured by Abbott and are purchased by us as completed products. |
· | Rapid Tests: Substantially all of our VetScan Rapid Tests are manufactured by a single source supplier. |
· | the sales performance of our independent distributors; |
· | our ability to improve our existing products and develop new and innovative products; |
· | our ability to increase our sales and marketing activities; |
· | our ability to effectively manage our manufacturing activities; and |
· | our ability to effectively compete against current and future competitors. |
·
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we will be able to maintain consistent growth through our independent distributors;
|
·
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the costs associated with sales, marketing and distributing our products will not be excessive; or
|
·
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government regulations or private insurer policies will not adversely affect our ability to be successful.
|
· | fluctuation in our operating results; |
· | announcements of technological innovations or new commercial products by us or our competitors; |
· | changes in governmental regulation in the United States and internationally; |
· | prospects and proposals for health care reform; |
· | governmental or third-party payors’ controls on prices that our customers may pay for our products; |
· | developments or disputes concerning our patents or our other proprietary rights; |
· | product liability claims and public concern as to the safety of our devices or similar devices developed by our competitors; and |
· | general market conditions. |
·
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Approximately 38,856 square feet of leased warehousing space in Union City, California, expiring in fiscal 2017. |
·
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Approximately 32,722 square feet of leased office and warehousing space in Germany. |
·
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Approximately 2,600 square feet of office and warehousing space owned by us in the United Kingdom. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Prices
|
||||||||||||||||
Fiscal 2015
|
Fiscal 2014
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
Quarter ended June 30
|
$
|
45.20
|
$
|
36.77
|
$
|
49.45
|
$
|
40.48
|
||||||||
Quarter ended September 30
|
53.98
|
41.57
|
51.84
|
38.72
|
||||||||||||
Quarter ended December 31
|
60.94
|
46.87
|
42.24
|
32.11
|
||||||||||||
Quarter ended March 31
|
66.89
|
56.10
|
45.48
|
33.62
|
3/31/2010
|
3/31/2011
|
3/31/2012
|
3/31/2013
|
3/31/2014
|
3/31/2015
|
|||||||||||||||||||
Abaxis, Inc.
|
$
|
100.00
|
$
|
106.07
|
$
|
107.13
|
$
|
178.69
|
$
|
146.82
|
$
|
244.03
|
||||||||||||
Russell 2000
|
$
|
100.00
|
$
|
125.79
|
$
|
125.56
|
$
|
146.03
|
$
|
182.39
|
$
|
197.37
|
||||||||||||
NASDAQ Medical Equipment Securities
|
$
|
100.00
|
$
|
107.87
|
$
|
123.57
|
$
|
127.33
|
$
|
146.66
|
$
|
169.39
|
(1) | This section is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of Abaxis under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in any such filing. |
Year Ended March 31,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||
Statements of Income Data:
|
||||||||||||||||||||
Continuing Operations:
|
||||||||||||||||||||
Revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
$
|
155,994
|
$
|
143,676
|
||||||||||
Cost of revenues
|
93,623
|
78,081
|
79,903
|
69,898
|
63,884
|
|||||||||||||||
Gross profit
|
108,970
|
83,950
|
100,975
|
86,096
|
79,792
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Research and development
|
16,327
|
13,647
|
13,577
|
12,246
|
11,973
|
|||||||||||||||
Sales and marketing
|
42,147
|
34,742
|
43,800
|
37,987
|
34,207
|
|||||||||||||||
General and administrative
|
16,192
|
11,333
|
12,825
|
12,122
|
10,963
|
|||||||||||||||
Gain from legal settlement
|
-
|
-
|
(17,250
|
)
|
-
|
-
|
||||||||||||||
Total operating expenses
|
74,666
|
59,722
|
52,952
|
62,355
|
57,143
|
|||||||||||||||
Income from operations
|
34,304
|
24,228
|
48,023
|
23,741
|
22,649
|
|||||||||||||||
Interest and other income (expense), net
|
(1,262
|
)
|
994
|
253
|
610
|
1,099
|
||||||||||||||
Income from continuing operations before income tax provision
|
33,042
|
25,222
|
48,276
|
24,351
|
23,748
|
|||||||||||||||
Income tax provision
|
12,239
|
8,993
|
17,149
|
8,653
|
9,101
|
|||||||||||||||
Income from continuing operations
|
$
|
20,803
|
$
|
16,229
|
$
|
31,127
|
$
|
15,698
|
$
|
14,647
|
||||||||||
Net income per share from continuing operations:
|
||||||||||||||||||||
Basic
|
$
|
0.92
|
$
|
0.73
|
$
|
1.42
|
$
|
0.71
|
$
|
0.65
|
||||||||||
Diluted
|
$
|
0.91
|
$
|
0.72
|
$
|
1.39
|
$
|
0.70
|
$
|
0.64
|
||||||||||
Discontinued Operations:
|
||||||||||||||||||||
Loss from discontinued operations, net of tax
|
$
|
(1,154
|
)
|
$
|
(2,044
|
)
|
$
|
(3,668
|
)
|
$
|
(2,607
|
)
|
$
|
(110
|
)
|
|||||
Gain on sale of discontinued operations, net of tax
|
$
|
7,682
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Net income (loss) per share from discontinued operations:
|
||||||||||||||||||||
Basic
|
$
|
0.29
|
$
|
(0.09
|
)
|
$
|
(0.17
|
)
|
$
|
(0.12
|
)
|
$
|
-
|
|||||||
Diluted
|
$
|
0.29
|
$
|
(0.09
|
)
|
$
|
(0.16
|
)
|
$
|
(0.12
|
)
|
$
|
-
|
|||||||
Consolidated Operations:
|
||||||||||||||||||||
Net income
|
$
|
27,331
|
$
|
14,185
|
$
|
27,459
|
$
|
13,091
|
$
|
14,537
|
||||||||||
Net income per share:
|
||||||||||||||||||||
Basic
|
$
|
1.21
|
$
|
0.64
|
$
|
1.25
|
$
|
0.59
|
$
|
0.65
|
||||||||||
Diluted
|
$
|
1.20
|
$
|
0.63
|
$
|
1.23
|
$
|
0.58
|
$
|
0.64
|
||||||||||
Shares used in the calculation of net income per share:
|
||||||||||||||||||||
Weighted average common shares outstanding - basic
|
22,497
|
22,270
|
21,946
|
22,084
|
22,365
|
|||||||||||||||
Weighted average common shares outstanding - diluted
|
22,787
|
22,575
|
22,381
|
22,462
|
22,858
|
|||||||||||||||
Cash dividends declared per share
|
$
|
0.40
|
$
|
-
|
$
|
1.00
|
$
|
-
|
$
|
-
|
Year Ended March 31,
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Consolidated Balance Sheets Data (1):
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
107,015
|
$
|
73,589
|
$
|
54,910
|
$
|
45,843
|
$
|
43,471
|
||||||||||
Short-term investments
|
26,109
|
29,102
|
23,354
|
21,689
|
25,981
|
|||||||||||||||
Working capital
|
168,576
|
148,553
|
132,944
|
109,966
|
107,542
|
|||||||||||||||
Long-term investments
|
24,181
|
18,491
|
17,000
|
23,442
|
36,237
|
|||||||||||||||
Total assets
|
269,064
|
217,380
|
201,763
|
181,836
|
188,260
|
|||||||||||||||
Non-current liabilities
|
7,585
|
6,205
|
5,550
|
4,620
|
3,090
|
|||||||||||||||
Total shareholders' equity
|
$
|
220,194
|
$
|
193,916
|
$
|
176,194
|
$
|
159,785
|
$
|
168,648
|
(1) | Consolidated balance sheets data reported in the table includes continuing and discontinued operations. |
· | Volume-based Incentives. Volume-based incentives, in the form of rebates, are offered from time to time to distributors and group purchasing organizations upon meeting the sales volume requirements during a qualifying period and are recorded as a reduction to gross revenues during a qualifying period. The pricing rebate program is primarily offered to distributors and group purchasing organizations in the North America veterinary market, upon meeting the sales volume requirements of veterinary products during the qualifying period. Factors used in the rebate calculations include the identification of products sold subject to a rebate during the qualifying period and which rebate percentage applies. Based on these factors and using historical trends, adjusted for current changes, we estimate the amount of the rebate and record the rebate as a deduction to gross revenues when we record the sale of the product. The rebate is recorded as a reserve to offset accounts receivable as settlements are made through offsets to outstanding customer invoices. Settlement of the rebate accruals from the date of sale ranges from one to nine months after sale. Changes in the rebate accrual at the end of each period are based upon distributors and group purchasing organizations meeting the purchase requirements during the quarter. |
· | Distributor Rebate Incentives. During fiscal 2015, we offered a customer sales incentive program, whereby distributors were offered a rebate upon meeting certain requirements. We recognize the rebate obligation as a reduction of revenue at the later of the date on which we sell the product or the date the program is offered. These customer sales incentive programs require management to estimate the rebate amounts to distributors who will qualify for the incentive during the promotional period. We record the estimated liability in other current accrued liabilities on our consolidated balance sheets. Management’s estimates are based on historical experience and the specific terms and conditions of the incentive programs. |
· | End-User Rebates and Discounts. From time to time, cash rebates are offered to end-users who purchase certain products or instruments during a promotional period and are recorded as a reduction to gross revenues. Additionally, we periodically offer sales incentives to end-users, in the form of sales discounts, to purchase consumables for a specified promotional period, typically over five years from the sale of our instrument, and we reimburse resellers for the value of the sales discount provided to the end-user. We estimate the amount of the incentive earned by end-users during a quarter and record a liability to the reseller as a reduction to gross revenues. Factors used in the liability calculation of incentives earned by end-users include the identification of qualified end-users under the sales program during the period and using historical trends. Settlement of the liability to the reseller ranges from one to twelve months from the date an end-user earns the incentive. |
Balance at
Beginning
of Year (1)
|
Provisions (2)
|
Payments
|
Balance at
End
of Year (1)
|
|||||||||||||
Year Ended March 31, 2015
|
$
|
700
|
$
|
10,230
|
$
|
(5,065
|
)
|
$
|
5,865
|
|||||||
Year Ended March 31, 2014
|
$
|
1,043
|
$
|
1,872
|
$
|
(2,215
|
)
|
$
|
700
|
|||||||
Year Ended March 31, 2013
|
$
|
696
|
$
|
2,058
|
$
|
(1,711
|
)
|
$
|
1,043
|
(1) | Balance represent reserves related to volume-based incentives, included as an offset to accounts receivables in the consolidated balance sheets, and accruals for distributor rebate incentives and end-user rebates and discounts, included within current accrued liabilities in the consolidated balance sheets. |
(2) | Provisions are net revenue reductions recorded and includes differences between estimates and actual incentives earned. |
·
|
25% of the shares subject to an award vest in full upon achieving 90% of the consolidated income from operations target described above and continuous service until the third anniversary of the date of grant; |
·
|
25% of the shares subject to an award vest in full upon achieving 90% of the consolidated income from operations target described above and continuous service until the fourth anniversary of the date of grant; |
·
|
25% of the shares subject to an award vest in full upon achieving 100% of the consolidated income from operations target described above and continuous service until the third anniversary of the date of grant; and |
·
|
25% of the shares subject to an award vest in full upon achieving 100% of the consolidated income from operations target described above and continuous service until the fourth anniversary of the date of grant. |
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
Revenues by Product Category
|
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
|||||||||||||||||||||
Instruments (1)
|
$
|
48,649
|
$
|
37,539
|
$
|
46,034
|
$
|
11,110
|
30
|
%
|
$
|
(8,495
|
)
|
(18
|
)%
|
|||||||||||||
Percentage of total revenues
|
24
|
%
|
23
|
%
|
25
|
%
|
||||||||||||||||||||||
Consumables (2)
|
144,446
|
117,533
|
127,481
|
26,913
|
23
|
%
|
(9,948
|
)
|
(8
|
)%
|
||||||||||||||||||
Percentage of total revenues
|
71
|
%
|
73
|
%
|
71
|
%
|
||||||||||||||||||||||
Other products (3)
|
9,348
|
6,809
|
7,213
|
2,539
|
37
|
%
|
(404
|
)
|
(6
|
)%
|
||||||||||||||||||
Percentage of total revenues
|
5
|
%
|
4
|
%
|
4
|
%
|
||||||||||||||||||||||
Product sales, net
|
202,443
|
161,881
|
180,728
|
40,562
|
25
|
%
|
(18,847
|
)
|
(10
|
)%
|
||||||||||||||||||
Percentage of total revenues
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||||||||||||||||||
Development and licensing revenues
|
150
|
150
|
150
|
-
|
-
|
%
|
-
|
-
|
%
|
|||||||||||||||||||
Percentage of total revenues
|
<1%
|
<1%
|
<1%
|
|||||||||||||||||||||||||
Total revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
$
|
40,562
|
25
|
%
|
$
|
(18,847
|
)
|
(10
|
)%
|
(1) | Instruments include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i-STAT analyzers. |
(2) | Consumables include reagent discs, hematology reagent kits, VSpro specialty cartridges, i-STAT cartridges and rapid tests. |
(3) | Other products include products using the Orbos process and extended maintenance agreements. |
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
Revenues by Geographic Region
|
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
|||||||||||||||||||||
North America
|
$
|
163,308
|
$
|
126,768
|
$
|
147,627
|
$
|
36,540
|
29
|
%
|
$
|
(20,859
|
)
|
(14
|
)%
|
|||||||||||||
Percentage of total revenues
|
81
|
%
|
78
|
%
|
82
|
%
|
||||||||||||||||||||||
Europe
|
30,422
|
27,161
|
26,086
|
3,261
|
12
|
%
|
1,075
|
4
|
%
|
|||||||||||||||||||
Percentage of total revenues
|
15
|
%
|
17
|
%
|
14
|
%
|
||||||||||||||||||||||
Asia Pacific and rest of the world
|
8,863
|
8,102
|
7,165
|
761
|
9
|
%
|
937
|
13
|
%
|
|||||||||||||||||||
Percentage of total revenues
|
4
|
%
|
5
|
%
|
4
|
%
|
||||||||||||||||||||||
Total revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
$
|
40,562
|
25
|
%
|
$
|
(18,847
|
)
|
(10
|
)%
|
·
|
Total revenues from our Piccolo chemistry analyzers and medical reagent discs in North America increased by 29%, or $5.4 million, primarily attributable to an increase in the sales volume of Piccolo chemistry analyzers and medical reagent discs sold to Abbott. The increase in the sales volume of medical reagent discs sold was primarily attributable to an expanded installed base of Piccolo chemistry analyzers. |
·
|
Total sales of our VetScan chemistry analyzers and veterinary reagent discs in North America increased by 36%, or $22.4 million, primarily attributable to (a) sales of VetScan chemistry analyzers to VCA’s Animal Hospitals resulting from a product supply agreement that we entered into in May 2014, (b) sales of VetScan chemistry analyzers to Henry Schein Animal Health and Patterson Veterinary Supply, both resulting from distribution agreements that we entered in October 2014 and (c) an increase in the sales volume of veterinary reagent discs due to an expanded installed base. These increases were partially offset by distributor rebate incentives programs offered in connection with sales of VetScan chemistry analyzers during fiscal 2015. |
·
|
Total sales of our VetScan hematology instruments and hematology reagent kits in North America increased by 36%, or $6.1 million, primarily attributable to (a) sales of VetScan hematology instruments as initial stocking orders to Henry Schein Animal Health and Patterson Veterinary Supply during the second half of fiscal 2015 and (b) an increase in the sales volume of hematology reagent kits due to an expanded installed base. These increases were partially offset by (a) lower unit sales of VetScan hematology instruments in the first half of fiscal 2015 to balance the inventory level in the distribution channel, sales of which were in line with in-clinic sales starting in the third quarter of fiscal 2015 and (b) distributor rebate incentives programs offered in connection with sales of VetScan hematology instruments during fiscal 2015. |
·
|
Total sales of our VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests in North America increased by 3%, or $0.7 million, primarily attributable to (a) sales of two new rapid tests, VetScan Feline FeLV/FIV Rapid Test and VetScan Canine Ehrlichia Rapid Test during fiscal 2015 and (b) sales of VetScan rapid tests to Henry Schein Animal Health and Patterson Veterinary Supply during the second half of fiscal 2015. These increases were partially offset by lower unit sales of VetScan i-STAT analyzers in the first half of fiscal 2015 to balance the inventory level in the distribution channel, sales of which were in line with in-clinic sales starting in the third quarter of fiscal 2015. |
·
|
Revenues from other products in North America increased by 32%, or $1.9 million, primarily attributable to deferred revenue recognized ratably over the life of extended maintenance contracts offered to customers in the form of free services in connection with the sale of our instruments. In October 2013, we prospectively changed the standard warranty obligations on certain instruments sold from three to five years, which resulted in a decrease in maintenance contracts offered to customers in the form of free services in connection with the sale of our instruments. |
·
|
Revenues from Piccolo chemistry analyzers and medical reagent discs increased by 16%, or $1.0 million, primarily attributable to an increase in the sales volume of Piccolo chemistry analyzers to various distributors during fiscal 2015. |
·
|
Revenues from VetScan chemistry analyzers and veterinary reagent discs increased by 8%, or $1.4 million, primarily attributable to an increase in the sales volume of veterinary reagent discs due to an expanded installed base, partially offset by (a) lower average selling prices of VetScan chemistry analyzers and (b) the impact of a lower exchange rate between the Euro and U.S. dollar during the second half of fiscal 2015 resulting in a decrease in the dollar value of the Euro sales of veterinary reagent discs compared to the rate effect in fiscal 2014. |
·
|
Revenues from other products increased by 80%, or $0.6 million, primarily due to an increase in other veterinary products sold to customers in the United Kingdom. |
·
|
Revenues from Piccolo chemistry analyzers and medical reagent discs increased by 49%, or $0.5 million, primarily attributable to an increase in the sales volume of Piccolo chemistry analyzers to two distributors and an increase in the sales volume of medical reagent discs to two distributors. |
·
|
Revenues from veterinary instruments decreased by 11%, or $0.3 million, primarily attributable to a decrease in the sales volume of VetScan chemistry analyzers to various distributors. Revenues from veterinary consumables increased by 14%, or $0.6 million, primarily attributable to an increase in the sales volume of veterinary reagent discs to a distributor. |
·
|
Total revenues from our Piccolo chemistry analyzers and medical reagent discs in North America (including sales to the U.S. government) decreased by 14%, or $3.1 million, primarily due to a lower average selling pricing of Piccolo chemistry analyzers and medical reagent discs sold to our distributor, Abbott, partially offset by an increase in the sales volume of medical reagent discs sold to Abbott during the fourth quarter of fiscal 2014. |
·
|
Total revenues from our VetScan chemistry analyzers and veterinary reagent discs in North America decreased by 18%, or $13.2 million, primarily due to a decrease in the unit volume of VetScan chemistry analyzers and veterinary reagent discs sold during the second half of fiscal 2014 in order to balance the inventory level in the distribution channel. |
·
|
Total revenues from our VetScan hematology instruments and hematology reagent kits in North America decreased by 15%, or $3.1 million, primarily due to a decrease in the unit volume of VetScan hematology instruments and hematology reagent kits sold during the second half of fiscal 2014 in order to balance the inventory level in the distribution channel. |
·
|
Total revenues from our VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests in North America decreased by 4%, or $1.0 million, primarily due to a decrease in the unit volume of VetScan VSpro specialty analyzers, VetScan i-STAT analyzers and VetScan rapid tests sold during the second half of fiscal 2014 in order to balance the inventory level in the distribution channel, partially offset by a higher unit volume of VetScan i-STAT analyzers and VetScan rapid tests sold during the first half of fiscal 2014, resulting from our addition of MWI as a nationwide distributor in September 2012. |
·
|
Other product revenues in North America decreased by 7%, or $0.4 million, primarily due to a decrease in unit volume of products sold using our Orbos process, partially offset by a decrease in extended maintenance contracts offered to customers as incentives in the form of free services in connection with the sale of our instruments during fiscal 2014, for which revenue is deferred and recognized ratably over the life of the maintenance contract. |
·
|
Revenues from Piccolo chemistry analyzers and medical reagent discs decreased by 12%, or $0.9 million, primarily due to higher sales of Piccolo chemistry analyzers during fiscal 2013 to an international medical supplies sourcing and support company to support a pharmaceutical clinical trial conducted by a biotechnology company, partially offset by an increase in the unit volume of medical reagent discs sold to various distributors. |
·
|
Total VetScan chemistry analyzers and veterinary reagent disc sales increased by 10%, or $1.6 million. Revenues from veterinary reagent discs increased by 22%, or $2.6 million, primarily attributable to (a) an increase in the unit volume of veterinary reagent discs sold to a distributor and (b) higher average selling prices of veterinary reagent discs. The increase was partially offset by a decrease in revenues from VetScan chemistry analyzers of 27%, or $1.0 million, primarily attributable to (a) a decrease in the unit volume of VetScan chemistry analyzers sold to various distributors and (b) lower average selling prices of VetScan chemistry analyzers. |
·
|
Revenues from VetScan hematology instruments and hematology reagent kits increased by 16%, or $0.2 million, primarily attributable to an increase in the unit volume of VetScan hematology instruments sold to various distributors. |
·
|
Revenues from medical instruments and medical reagent discs increased by 32%, or $0.2 million, primarily attributable to a higher unit volume of medical reagent discs sold to a distributor. |
·
|
Revenues from veterinary instruments increased by 29%, or $0.7 million, primarily attributable to (a) a higher unit volume of VetScan chemistry analyzers and VetScan hematology instruments sold to a distributor and (b) a higher unit volume of VetScan i‑STAT analyzers sold to a distributor. |
Year Ended March 31,
|
Change
|
|||||||||||||||||||||||
2015
|
Percent of
Revenues (1)
|
2014
|
Percent of
Revenues (1)
|
Dollar
Change
|
Percent
Change
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Medical Market
|
$
|
35,364
|
100
|
%
|
$
|
28,134
|
100
|
%
|
$
|
7,230
|
26
|
%
|
||||||||||||
Percentage of total revenues
|
17
|
%
|
17
|
%
|
||||||||||||||||||||
Veterinary Market
|
164,018
|
100
|
%
|
130,859
|
100
|
%
|
33,159
|
25
|
%
|
|||||||||||||||
Percentage of total revenues
|
81
|
%
|
81
|
%
|
||||||||||||||||||||
Other (2)
|
3,211
|
3,038
|
173
|
6
|
%
|
|||||||||||||||||||
Percentage of total revenues
|
2
|
%
|
2
|
%
|
||||||||||||||||||||
Total revenues
|
202,593
|
162,031
|
40,562
|
25
|
%
|
|||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||
Medical Market
|
18,730
|
53
|
%
|
15,623
|
56
|
%
|
3,107
|
20
|
%
|
|||||||||||||||
Veterinary Market
|
74,752
|
46
|
%
|
62,350
|
48
|
%
|
12,402
|
20
|
%
|
|||||||||||||||
Other (2)
|
141
|
108
|
33
|
31
|
%
|
|||||||||||||||||||
Total cost of revenues
|
93,623
|
78,081
|
15,542
|
20
|
%
|
|||||||||||||||||||
Gross profit:
|
||||||||||||||||||||||||
Medical Market
|
16,634
|
47
|
%
|
12,511
|
44
|
%
|
4,123
|
33
|
%
|
|||||||||||||||
Veterinary Market
|
89,266
|
54
|
%
|
68,509
|
52
|
%
|
20,757
|
30
|
%
|
|||||||||||||||
Other (2)
|
3,070
|
2,930
|
140
|
5
|
%
|
|||||||||||||||||||
Gross profit
|
$
|
108,970
|
$
|
83,950
|
$
|
25,020
|
30
|
%
|
(1)
|
The percentage reported is based on revenues by operating segment.
|
(2)
|
Represents unallocated items, not specifically identified to any particular business segment.
|
·
|
Total revenues from Piccolo chemistry analyzers increased by 75%, or $4.6 million, during fiscal 2015 as compared to fiscal 2014, primarily attributable to an increase in the sales volume of Piccolo chemistry analyzers sold in North America to Abbott, sales to various distributors in Europe and sales to two distributors in Asia Pacific and rest of the world. |
·
|
Total revenues from medical reagent discs increased by 12%, or $2.4 million, during fiscal 2015 as compared to fiscal 2014, primarily attributable to an increase in the sales volume of medical reagent discs sold in North America to Abbott as a result of an expanded installed base of Piccolo chemistry analyzers and sales to two distributors in Asia Pacific and rest of the world. |
·
|
Total revenues from veterinary instruments increased by 21%, or $6.5 million, during fiscal 2015 as compared to fiscal 2014, primarily attributable to (a) sales of VetScan chemistry analyzers to VCA’s Animal Hospitals, (b) sales of VetScan chemistry analyzers to two new distributors, Henry Schein Animal Health and Patterson Veterinary Supply and (c) sales of VetScan hematology instruments as initial stocking orders to Henry Schein Animal Health and Patterson Veterinary Supply during the second half of fiscal 2015. These increases were partially offset by (a) distributor rebate incentives programs offered in connection with sales of VetScan chemistry analyzers and VetScan hematology instruments in North America during fiscal 2015, (b) lower average selling prices of VetScan chemistry analyzers sold in Europe, (c) a decrease in the sales volume of VetScan chemistry analyzers to various distributors in Asia Pacific and rest of the world and (d) lower unit sales of VetScan hematology instruments and VetScan i-STAT analyzers in the first half of fiscal 2015 to balance the inventory level in the distribution channel, sales of which were in line with in-clinic sales starting in the third quarter of fiscal 2015. |
·
|
Total revenues from consumables in the veterinary market increased by 25%, or $24.6 million, during fiscal 2015 as compared to fiscal 2014, primarily attributable to (a) an increase in the sales volume of veterinary reagent discs and hematology reagent kits, both due to an expanded installed base in North America, (b) an increase in the sales volume of veterinary reagent discs to a distributor in Asia Pacific and rest of the world, (c) sales of two new rapid tests, VetScan Feline FeLV/FIV Rapid Test and VetScan Canine Ehrlichia Rapid Test during fiscal 2015 and (d) sales of VetScan rapid tests to Henry Schein Animal Health and Patterson Veterinary Supply during the second half of fiscal 2015. These increases were partially offset by the impact of a lower exchange rate between the Euro and U.S. dollar during the second half of fiscal 2015 resulting in a decrease in the dollar value of the Euro sales of veterinary reagent discs compared to the rate effect in fiscal 2014. |
·
|
Total revenues from other products in the veterinary market increased by 95%, or $2.1 million, during fiscal 2015 as compared to fiscal 2014, primarily attributable to (a) deferred revenue recognized ratably over the life of extended maintenance contracts offered to customers in the form of free services in connection with the sale of our instruments and (b) an increase in other veterinary products sold to customers in the United Kingdom. |
Year Ended March 31,
|
Change
|
|||||||||||||||||||||||
2014
|
Percent of
Revenues (1)
|
2013
|
Percent of
Revenues (1)
|
Dollar
Change
|
Percent
Change
|
|||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Medical Market
|
$
|
28,134
|
100
|
%
|
$
|
31,643
|
100
|
%
|
$
|
(3,509
|
)
|
(11
|
)%
|
|||||||||||
Percentage of total revenues
|
17
|
%
|
18
|
%
|
||||||||||||||||||||
Veterinary Market
|
130,859
|
100
|
%
|
145,363
|
100
|
%
|
(14,504
|
)
|
(10
|
)%
|
||||||||||||||
Percentage of total revenues
|
81
|
%
|
80
|
%
|
||||||||||||||||||||
Other (2)
|
3,038
|
3,872
|
(834
|
)
|
(22
|
)%
|
||||||||||||||||||
Percentage of total revenues
|
2
|
%
|
2
|
%
|
||||||||||||||||||||
Total revenues
|
162,031
|
180,878
|
(18,847
|
)
|
(10
|
)%
|
||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||
Medical Market
|
15,623
|
56
|
%
|
15,179
|
48
|
%
|
444
|
3
|
%
|
|||||||||||||||
Veterinary Market
|
62,350
|
48
|
%
|
64,586
|
44
|
%
|
(2,236
|
)
|
(3
|
)%
|
||||||||||||||
Other (2)
|
108
|
138
|
(30
|
)
|
(22
|
)%
|
||||||||||||||||||
Total cost of revenues
|
78,081
|
79,903
|
(1,822
|
)
|
(2
|
)%
|
||||||||||||||||||
Gross profit:
|
||||||||||||||||||||||||
Medical Market
|
12,511
|
44
|
%
|
16,464
|
52
|
%
|
(3,953
|
)
|
(24
|
)%
|
||||||||||||||
Veterinary Market
|
68,509
|
52
|
%
|
80,777
|
56
|
%
|
(12,268
|
)
|
(15
|
)%
|
||||||||||||||
Other (2)
|
2,930
|
3,734
|
(804
|
)
|
(22
|
)%
|
||||||||||||||||||
Gross profit
|
$
|
83,950
|
$
|
100,975
|
$
|
(17,025
|
)
|
(17
|
)%
|
(1)
|
The percentage reported is based on revenues by operating segment.
|
(2)
|
Represents unallocated items, not specifically identified to any particular business segment.
|
·
|
Total revenues from Piccolo chemistry analyzers decreased by 39%, or $3.9 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to (a) a lower average selling pricing of Piccolo chemistry analyzers sold to Abbott and (b) higher sales of Piccolo chemistry analyzers during fiscal 2013 to an international medical supplies sourcing and support company in Europe to support a pharmaceutical clinical trial conducted by a biotechnology company. |
·
|
Total revenues from medical reagent discs increased by 1%, or $0.2 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to (a) an increase in the sales volume of medical reagent discs sold to Abbott during the fourth quarter of fiscal 2014, (b) an increase in the unit volume of medical reagent discs sold to various distributors in Europe and (c) a higher unit volume of medical reagent discs sold to a distributor in Asia Pacific and rest of the world. The increase was partially offset by a lower average selling pricing of medical reagent discs sold to Abbott. |
·
|
Total revenues from other products in the medical market increased by 17%, or $0.2 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to a decrease in extended maintenance contracts offered to customers as incentives in the form of free services in connection with the sale of our Piccolo chemistry analyzers in North America in fiscal 2014, for which revenue is deferred and recognized ratably over the life of the maintenance contract. |
·
|
Total revenues from veterinary instruments decreased by 13%, or $4.6 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to (a) a decrease in the unit volume of VetScan chemistry analyzers, VetScan hematology instruments, VetScan VSpro specialty analyzers and VetScan i-STAT analyzers sold in North America during the second half of fiscal 2014 in order to balance the inventory level in the distribution channel and (b) a decrease in the unit volume of VetScan chemistry analyzers sold to various distributors and lower average selling prices of VetScan chemistry analyzers, both in Europe. These decreases were partially offset by (a) an increase in the unit volume of VetScan hematology instruments sold to various distributors in Europe, (b) an increase in the unit volume of VetScan chemistry analyzers and VetScan hematology instruments sold to a distributor in Asia Pacific and rest of the world, (c) an increase in the unit volume of VetScan i-STAT analyzers sold during the first half of fiscal 2014, resulting from our addition of MWI as a nationwide distributor in September 2012 and (d) an increase in the unit volume of VetScan i-STAT analyzers sold to a distributor in Asia Pacific and rest of the world. |
·
|
Total revenues from consumables in the veterinary market decreased by 9%, or $10.1 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to a decrease in the unit volume of veterinary reagent discs, hematology reagent kits and VetScan rapid tests sold in North America during the second half of fiscal 2014 in order to balance the inventory level in the distribution channel. The decrease was partially offset by (a) a higher unit volume of VetScan rapid tests sold during the first half of fiscal 2014, resulting from our addition of MWI as a nationwide distributor in September 2012, (b) an increase in the unit volume of veterinary reagent discs sold to a distributor in Europe and (c) higher average selling prices of veterinary reagent discs sold in Europe. |
·
|
Total revenues from other products in the veterinary market increased by 9%, or $0.2 million, during fiscal 2014 as compared to fiscal 2013, primarily attributable to a decrease in extended maintenance contracts offered to customers as incentives in the form of free services in connection with the sale of our veterinary instruments in North America during fiscal 2014, for which revenue is deferred and recognized ratably over the life of the maintenance contract. In October 2013, we changed the standard warranty period on certain instruments from three to five years, which resulted in a decrease in maintenance contracts offered to customers in the form of free services during the second half of fiscal 2014. |
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||||||||||
Cost of revenues
|
$
|
93,623
|
$
|
78,081
|
$
|
79,903
|
$
|
15,542
|
20
|
%
|
$
|
(1,822
|
)
|
(2
|
)%
|
|||||||||||||
Percentage of total revenues
|
46
|
%
|
48
|
%
|
44
|
%
|
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||||||||||
Total gross profit
|
$
|
108,970
|
$
|
83,950
|
$
|
100,975
|
$
|
25,020
|
30
|
%
|
$
|
(17,025
|
)
|
(17
|
)%
|
|||||||||||||
Total gross margin
|
54
|
%
|
52
|
%
|
56
|
%
|
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||||||||||
Research and development expenses
|
$
|
16,327
|
$
|
13,647
|
$
|
13,577
|
$
|
2,680
|
20
|
%
|
$
|
70
|
1
|
%
|
||||||||||||||
Percentage of total revenues
|
8
|
%
|
8
|
%
|
8
|
%
|
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||||||||||
Sales and marketing expenses
|
$
|
42,147
|
$
|
34,742
|
$
|
43,800
|
$
|
7,405
|
21
|
%
|
$
|
(9,058
|
)
|
(21
|
)%
|
|||||||||||||
Percentage of total revenues
|
21
|
%
|
21
|
%
|
24
|
%
|
Year Ended March 31,
|
Change 2014 to 2015
|
Change 2013 to 2014
|
||||||||||||||||||||||||||
2015
|
2014
|
2013
|
Dollar
Change
|
Percent
Change
|
Dollar
Change
|
Percent
Change
|
||||||||||||||||||||||
General and administrative expenses
|
$
|
16,192
|
$
|
11,333
|
$
|
12,825
|
$
|
4,859
|
43
|
%
|
$
|
(1,492
|
)
|
(12
|
)%
|
|||||||||||||
Percentage of total revenues
|
8
|
%
|
7
|
%
|
7
|
%
|
Year Ended March 31,
|
Change
|
|||||||||||||||||||
2015
|
2014
|
2013
|
2014-2015
|
2013-2014
|
||||||||||||||||
Interest and other income (expense), net
|
$
|
(1,262
|
)
|
$
|
994
|
$
|
253
|
$
|
(2,256
|
)
|
$
|
741
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income tax provision
|
$
|
12,239
|
$
|
8,993
|
$
|
17,149
|
||||||
Effective tax rate
|
37
|
%
|
36
|
%
|
36
|
%
|
March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash and cash equivalents
|
$
|
107,015
|
$
|
73,589
|
$
|
54,910
|
||||||
Short-term investments
|
26,109
|
29,102
|
23,354
|
|||||||||
Long-term investments
|
24,181
|
18,491
|
17,000
|
|||||||||
Total cash, cash equivalents and investments
|
$
|
157,305
|
$
|
121,182
|
$
|
95,264
|
||||||
Percentage of total assets
|
58
|
%
|
56
|
%
|
47
|
%
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net cash provided by operating activities
|
$
|
36,396
|
$
|
35,572
|
$
|
29,197
|
||||||
Net cash provided by (used in) investing activities
|
10,093
|
(13,358
|
)
|
(1,657
|
)
|
|||||||
Net cash used in financing activities
|
(10,962
|
)
|
(4,045
|
)
|
(18,165
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(2,101
|
)
|
510
|
(308
|
)
|
|||||||
Net increase in cash and cash equivalents
|
$
|
33,426
|
$
|
18,679
|
$
|
9,067
|
·
|
Receivables, net increased by $1.8 million, from $27.3 million at March 31, 2014 to $29.0 million as of March 31, 2015, primarily attributable to higher sales during the fourth quarter of fiscal 2015, partially offset by the timing of sales and collections activity during the fourth quarter of fiscal 2015. |
·
|
Inventories increased by $9.6 million from $26.6 million at March 31, 2014 to $36.2 million as of March 31, 2015, primarily based on our projected sales plan. |
·
|
Prepaid expenses and other current assets increased by $0.5 million, from $2.3 million at March 31, 2014 to $2.9 million as of March 31, 2015, primarily attributable to a federal tax refund resulting from the retroactive extension of the research and development tax credit and bonus depreciation. |
·
|
Current net deferred tax assets increased by $2.1 million, from $4.5 million at March 31, 2014 to $6.6 million as of March 31, 2015, primarily as a result of the timing for the deduction of reserves and accruals. |
·
|
Non-current net deferred tax assets increased by $1.9 million, from $1.6 million at March 31, 2014 to $3.4 million as of March 31, 2015, primarily as a result of the timing for the deduction of share-based compensation, depreciation and amortization. |
·
|
Non-current assets of discontinued operations decreased by $3.4 million from $3.4 million at March 31, 2014 to $12,000 as of March 31, 2015, primarily due to disposal and impairment of long-lived assets of $1.9 million, resulting from the sale of our AVRL business in the fourth quarter of fiscal 2015, and book value of net assets sold of $0.6 million to Antech.
|
·
|
Accounts payable increased by $1.8 million, from $5.5 million at March 31, 2014 to $7.3 million as of March 31, 2015, primarily due to the timing and payment of services and inventory purchases. |
·
|
Accrued payroll and related expenses increased by $6.7 million, from $4.4 million at March 31, 2014 to $11.1 million as of March 31, 2015, primarily attributable to an increase in accrued bonus at March 31, 2015 because qualifiers for bonus payments were met in the fourth quarter of fiscal 2015. |
·
|
Accrued taxes increased by $3.7 million, from $1.1 million at March 31, 2014 to $4.8 million as of March 31, 2015, primarily due to the timing of estimated income tax payments. |
·
|
Current liabilities of discontinued operations increased by $4.7 million from $0.9 million at March 31, 2014 to $5.5 million as of March 31, 2015, primarily due to our cost obligations accrued for employee-related costs, including severance, contract termination and other associated costs as a result of the sale of our AVRL business in the fourth quarter of fiscal 2015. |
·
|
Other accrued liabilities, current, increased by $6.7 million, from $3.1 million at March 31, 2014 to $9.8 million as of March 31, 2015 and other liabilities, non-current, increased by $1.0 million, from $0.8 million at March 31, 2014 to $1.8 million as of March 31, 2015. The net current and non-current other liabilities increased primarily attributable to (a) an increase in liabilities related to customer sales incentive programs and the timing of these obligation payments and (b) installment payment obligations related to the acquisition of QCR and Trio in November 2014. |
·
|
As of March 31, 2015 and March 31, 2014, the current portion of deferred revenue was $1.3 million and $1.2 million, respectively, and the non-current portion of deferred revenue was $3.2 million and $4.0 million, respectively. Net current and non-current deferred revenue decreased by $0.7 million from March 31, 2014 to March 31, 2015, primarily attributable to deferred revenue recognized ratably over the life of extended maintenance contracts offered to customers in the form of free services in connection with the sale of our instruments. In October 2013, we prospectively changed the standard warranty obligations on certain instruments sold from three to five years, which resulted in a decrease in maintenance contracts offered to customers in the form of free services in connection with the sale of our instruments. |
·
|
As of March 31, 2015 and March 31, 2014, the current portion of warranty reserve was $1.4 million and $1.0 million, respectively, and the non-current portion of warranty reserve was $1.7 million and $0.8 million, respectively. Net current and non‑current warranty reserve increased by $1.3 million. The increase in current and non-current warranty reserve from March 31, 2014 to March 31, 2015 was primarily due to an increase in the number of instruments in standard warranty during fiscal 2015. Warranty reserve is primarily based on (a) the number of instruments in standard warranty, estimated product failure rates and estimated repair costs and (b) an estimate of defective reagent discs and replacement costs of reagent discs. In October 2013, we prospectively changed the standard warranty obligations on certain instruments from three to five years. The increase in the standard warranty obligation did not result in a material impact on our warranty reserves or cost of revenues during the period. Management periodically evaluates the sufficiency of the warranty provisions and makes adjustments when necessary. If an unusual performance rate related to warranty claims is noted, an additional warranty accrual may be assessed and recorded when a failure event is probable and the cost can be reasonably estimated. |
Payments Due by Period
|
||||||||||||||||||||
Total
|
2016
|
2017-2018
|
2019-2020
|
After 2020
|
||||||||||||||||
Long-term debt obligations
|
$
|
666
|
$
|
128
|
$
|
241
|
$
|
220
|
$
|
77
|
||||||||||
Operating lease obligations
|
12,059
|
1,984
|
3,774
|
3,642
|
2,659
|
|||||||||||||||
Purchase obligations
|
4,915
|
2,889
|
2,026
|
-
|
-
|
|||||||||||||||
Other long-term liabilities
|
2,213
|
1,111
|
1,102
|
-
|
-
|
|||||||||||||||
Total
|
$
|
19,853
|
$
|
6,112
|
$
|
7,143
|
$
|
3,862
|
$
|
2,736
|
Description
|
Page
|
Report of Independent Registered Public Accounting Firm
|
51 |
Consolidated Balance Sheets at March 31, 2015 and 2014
|
52 |
Consolidated Statements of Income for the Years Ended March 31, 2015, 2014 and 2013
|
53 |
Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2015, 2014 and 2013
|
54 |
Consolidated Statements of Shareholders’ Equity for the Years Ended March 31, 2015, 2014 and 2013
|
55 |
Consolidated Statements of Cash Flows for the Years Ended March 31, 2015, 2014 and 2013
|
56 |
Notes to Consolidated Financial Statements
|
57 |
March 31,
|
||||||||
ASSETS
|
2015
|
2014
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
107,015
|
$
|
73,589
|
||||
Short-term investments
|
26,109
|
29,102
|
||||||
Receivables (net of allowances of $247 in 2015 and $182 in 2014)
|
29,015
|
27,253
|
||||||
Inventories
|
36,179
|
26,583
|
||||||
Prepaid expenses and other current assets
|
2,893
|
2,347
|
||||||
Net deferred tax assets, current
|
6,575
|
4,464
|
||||||
Current assets of discontinued operations
|
2,075
|
2,474
|
||||||
Total current assets
|
209,861
|
165,812
|
||||||
Long-term investments
|
24,181
|
18,491
|
||||||
Investment in unconsolidated affiliate
|
2,683
|
2,646
|
||||||
Property and equipment, net
|
27,316
|
24,191
|
||||||
Intangible assets, net
|
1,491
|
1,200
|
||||||
Net deferred tax assets, non-current
|
3,413
|
1,557
|
||||||
Non-current assets of discontinued operations
|
12
|
3,431
|
||||||
Other assets
|
107
|
52
|
||||||
Total assets
|
$
|
269,064
|
$
|
217,380
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
7,277
|
$
|
5,525
|
||||
Accrued payroll and related expenses
|
11,094
|
4,372
|
||||||
Accrued taxes
|
4,829
|
1,144
|
||||||
Current liabilities of discontinued operations
|
5,536
|
879
|
||||||
Other accrued liabilities
|
9,804
|
3,084
|
||||||
Deferred revenue
|
1,322
|
1,208
|
||||||
Warranty reserve
|
1,423
|
1,047
|
||||||
Total current liabilities
|
41,285
|
17,259
|
||||||
Non-current liabilities:
|
||||||||
Deferred revenue
|
3,219
|
4,035
|
||||||
Warranty reserve
|
1,733
|
821
|
||||||
Net deferred tax liabilities
|
310
|
-
|
||||||
Non-current liabilities of discontinued operations
|
-
|
16
|
||||||
Notes payable, less current portion
|
480
|
581
|
||||||
Other non-current liabilities
|
1,843
|
752
|
||||||
Total non-current liabilities
|
7,585
|
6,205
|
||||||
Total liabilities
|
48,870
|
23,464
|
||||||
Commitments and contingencies (Note 13)
|
||||||||
Shareholders' equity:
|
||||||||
Preferred stock, no par value: 5,000,000 shares authorized; no shares issued and outstanding in 2015 and 2014
|
-
|
-
|
||||||
Common stock, no par value: 35,000,000 shares authorized; 22,539,000 and 22,308,000 shares issued and outstanding in 2015 and 2014, respectively
|
132,559
|
124,603
|
||||||
Retained earnings
|
87,643
|
69,318
|
||||||
Accumulated other comprehensive loss
|
(8
|
)
|
(5
|
)
|
||||
Total shareholders' equity
|
220,194
|
193,916
|
||||||
Total liabilities and shareholders' equity
|
$
|
269,064
|
$
|
217,380
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
||||||
Cost of revenues
|
93,623
|
78,081
|
79,903
|
|||||||||
Gross profit
|
108,970
|
83,950
|
100,975
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
16,327
|
13,647
|
13,577
|
|||||||||
Sales and marketing
|
42,147
|
34,742
|
43,800
|
|||||||||
General and administrative
|
16,192
|
11,333
|
12,825
|
|||||||||
Gain from legal settlement
|
-
|
-
|
(17,250
|
)
|
||||||||
Total operating expenses
|
74,666
|
59,722
|
52,952
|
|||||||||
Income from operations
|
34,304
|
24,228
|
48,023
|
|||||||||
Interest and other income (expense), net
|
(1,262
|
)
|
994
|
253
|
||||||||
Income from continuing operations before income tax provision
|
33,042
|
25,222
|
48,276
|
|||||||||
Income tax provision
|
12,239
|
8,993
|
17,149
|
|||||||||
Income from continuing operations
|
20,803
|
16,229
|
31,127
|
|||||||||
Discontinued operations (Note 3)
|
||||||||||||
Loss from discontinued operations, net of tax
|
(1,154
|
)
|
(2,044
|
)
|
(3,668
|
)
|
||||||
Gain on sale of discontinued operations, net of tax
|
7,682
|
-
|
-
|
|||||||||
Net income
|
$
|
27,331
|
$
|
14,185
|
$
|
27,459
|
||||||
Net income (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$
|
0.92
|
$
|
0.73
|
$
|
1.42
|
||||||
Discontinued operations
|
0.29
|
(0.09
|
)
|
(0.17
|
)
|
|||||||
Basic net income per share
|
$
|
1.21
|
$
|
0.64
|
$
|
1.25
|
||||||
Diluted
|
||||||||||||
Continuing operations
|
$
|
0.91
|
$
|
0.72
|
$
|
1.39
|
||||||
Discontinued operations
|
0.29
|
(0.09
|
)
|
(0.16
|
)
|
|||||||
Diluted net income per share
|
$
|
1.20
|
$
|
0.63
|
$
|
1.23
|
||||||
Shares used in the calculation of net income per share:
|
||||||||||||
Weighted average common shares outstanding - basic
|
22,497
|
22,270
|
21,946
|
|||||||||
Weighted average common shares outstanding - diluted
|
22,787
|
22,575
|
22,381
|
|||||||||
Cash dividends declared per share
|
$
|
0.40
|
$
|
-
|
$
|
1.00
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net income
|
$
|
27,331
|
$
|
14,185
|
$
|
27,459
|
||||||
Other comprehensive income (loss):
|
||||||||||||
Net change in unrealized gain (loss) on investments
|
(5
|
)
|
(79
|
)
|
29
|
|||||||
Tax provision (benefit) on other comprehensive income (loss)
|
(2
|
)
|
(32
|
)
|
12
|
|||||||
Other comprehensive income (loss), net of tax
|
(3
|
)
|
(47
|
)
|
17
|
|||||||
Comprehensive income
|
$
|
27,328
|
$
|
14,138
|
$
|
27,476
|
Common Stock
|
Retained
|
Accumulated
Other
Comprehensive
Income
|
Total
Shareholders'
|
|||||||||||||||||
Shares
|
Amount
|
Earnings
|
(Loss)
|
Equity
|
||||||||||||||||
Balances at March 31, 2012
|
21,699,000
|
$
|
110,063
|
$
|
49,697
|
$
|
25
|
$
|
159,785
|
|||||||||||
Common stock issued under stock option exercises
|
210,000
|
2,800
|
-
|
-
|
2,800
|
|||||||||||||||
Common stock issued in settlement of restricted stock units, net of shares withheld for employee taxes
|
211,000
|
(1,625
|
)
|
-
|
-
|
(1,625
|
)
|
|||||||||||||
Dividends to shareholders
|
-
|
-
|
(22,023
|
)
|
-
|
(22,023
|
)
|
|||||||||||||
Share-based compensation
|
-
|
7,098
|
-
|
-
|
7,098
|
|||||||||||||||
Excess tax benefits from share-based awards and other tax adjustments
|
-
|
2,683
|
-
|
-
|
2,683
|
|||||||||||||||
Net income
|
-
|
-
|
27,459
|
-
|
27,459
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
-
|
-
|
-
|
17
|
17
|
|||||||||||||||
Balances at March 31, 2013
|
22,120,000
|
121,019
|
55,133
|
42
|
176,194
|
|||||||||||||||
Common stock issued under stock option exercises
|
70,000
|
1,455
|
-
|
-
|
1,455
|
|||||||||||||||
Common stock issued in settlement of restricted stock units, net of shares withheld for employee taxes
|
204,000
|
(4,683
|
)
|
-
|
-
|
(4,683
|
)
|
|||||||||||||
Repurchases of common stock, net
|
(86,000
|
)
|
(2,981
|
)
|
-
|
-
|
(2,981
|
)
|
||||||||||||
Share-based compensation
|
-
|
7,629
|
-
|
-
|
7,629
|
|||||||||||||||
Excess tax benefits from share-based awards and other tax adjustments
|
-
|
2,164
|
-
|
-
|
2,164
|
|||||||||||||||
Net income
|
-
|
-
|
14,185
|
-
|
14,185
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
-
|
-
|
-
|
(47
|
)
|
(47
|
)
|
|||||||||||||
Balances at March 31, 2014
|
22,308,000
|
124,603
|
69,318
|
(5
|
)
|
193,916
|
||||||||||||||
Common stock issued under stock option exercises
|
2,000
|
31
|
-
|
-
|
31
|
|||||||||||||||
Common stock issued in settlement of restricted stock units, net of shares withheld for employee taxes
|
203,000
|
(3,026
|
)
|
-
|
-
|
(3,026
|
)
|
|||||||||||||
Warrant exercises
|
26,000
|
78
|
- | - |
78
|
|||||||||||||||
Dividends to shareholders
|
-
|
-
|
(9,006
|
)
|
-
|
(9,006
|
)
|
|||||||||||||
Share-based compensation
|
-
|
9,759
|
-
|
-
|
9,759
|
|||||||||||||||
Compensation expense recognized on accelerated vesting of warrants
|
-
|
168
|
-
|
-
|
168
|
|||||||||||||||
Excess tax benefits from share-based awards and other tax adjustments
|
-
|
946
|
-
|
-
|
946
|
|||||||||||||||
Net income
|
-
|
-
|
27,331
|
-
|
27,331
|
|||||||||||||||
Other comprehensive income (loss), net of tax
|
-
|
-
|
-
|
(3
|
)
|
(3
|
)
|
|||||||||||||
Balances at March 31, 2015
|
22,539,000
|
$
|
132,559
|
$
|
87,643
|
$
|
(8
|
)
|
$
|
220,194
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
27,331
|
$
|
14,185
|
$
|
27,459
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
8,486
|
7,427
|
6,298
|
|||||||||
Investment premium amortization, net
|
635
|
530
|
827
|
|||||||||
Gain on sale of discontinued operations, net of tax
|
(7,682
|
)
|
-
|
-
|
||||||||
Net loss on disposals of property and equipment
|
8
|
20
|
76
|
|||||||||
Foreign exchange (gain) loss
|
1,794
|
(477
|
)
|
401
|
||||||||
Share-based compensation expense
|
9,787
|
7,643
|
7,086
|
|||||||||
Excess tax benefits from share-based awards
|
(961
|
)
|
(2,164
|
)
|
(2,683
|
)
|
||||||
Deferred income taxes
|
(3,954
|
)
|
(785
|
)
|
(1,307
|
)
|
||||||
Equity in net (income) loss of unconsolidated affiliate
|
(37
|
)
|
(33
|
)
|
13
|
|||||||
Changes in assets and liabilities:
|
||||||||||||
Receivables, net
|
(1,306
|
)
|
11,171
|
(9,418
|
)
|
|||||||
Inventories
|
(10,135
|
)
|
(2,491
|
)
|
(8,081
|
)
|
||||||
Prepaid expenses and other current assets
|
787
|
2,962
|
4,269
|
|||||||||
Other assets
|
(55
|
)
|
21
|
(9
|
)
|
|||||||
Accounts payable
|
116
|
(2,018
|
)
|
1,746
|
||||||||
Accrued payroll and related expenses
|
6,776
|
(1,626
|
)
|
(67
|
)
|
|||||||
Accrued taxes
|
(1,294
|
)
|
690
|
610
|
||||||||
Other liabilities
|
5,514
|
(98
|
)
|
935
|
||||||||
Deferred revenue
|
(702
|
)
|
131
|
1,504
|
||||||||
Warranty reserve
|
1,288
|
484
|
(462
|
)
|
||||||||
Net cash provided by operating activities
|
36,396
|
35,572
|
29,197
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of available-for-sale investments
|
-
|
(4,384
|
)
|
-
|
||||||||
Purchases of held-to-maturity investments
|
(36,804
|
)
|
(27,798
|
)
|
(18,337
|
)
|
||||||
Proceeds from maturities and redemptions of available-for-sale investments
|
6,498
|
1,023
|
249
|
|||||||||
Proceeds from maturities and redemptions of held-to-maturity investments
|
26,969
|
23,311
|
22,067
|
|||||||||
Purchases of property and equipment
|
(6,077
|
)
|
(5,554
|
)
|
(5,640
|
)
|
||||||
Proceeds from disposals of property and equipment
|
25
|
44
|
4
|
|||||||||
Acquisitions, net of cash acquired
|
(618
|
)
|
-
|
-
|
||||||||
Proceeds from sale of discontinued operations
|
20,100
|
-
|
-
|
|||||||||
Net cash provided by (used in) investing activities
|
10,093
|
(13,358
|
)
|
(1,657
|
)
|
|||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from the exercise of stock options
|
31
|
1,455
|
2,800
|
|||||||||
Tax withholdings related to net share settlements of restricted stock units
|
(3,026
|
)
|
(4,683
|
)
|
(1,625
|
)
|
||||||
Excess tax benefits from share-based awards
|
961
|
2,164
|
2,683
|
|||||||||
Repurchases of common stock
|
-
|
(2,981
|
)
|
-
|
||||||||
Proceeds from the exercise of warrants
|
78
|
-
|
-
|
|||||||||
Dividends paid
|
(9,006
|
)
|
-
|
(22,023
|
)
|
|||||||
Net cash used in financing activities
|
(10,962
|
)
|
(4,045
|
)
|
(18,165
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
(2,101
|
)
|
510
|
(308
|
)
|
|||||||
Net increase in cash and cash equivalents
|
33,426
|
18,679
|
9,067
|
|||||||||
Cash and cash equivalents at beginning of year
|
73,589
|
54,910
|
45,843
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
107,015
|
$
|
73,589
|
$
|
54,910
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid for income taxes, net of refunds
|
$
|
15,888
|
$
|
4,943
|
$
|
12,330
|
||||||
Supplemental disclosure of non-cash flow information:
|
||||||||||||
Change in unrealized gain (loss) on investments, net of tax
|
$
|
(3
|
)
|
$
|
(47
|
)
|
$
|
17
|
||||
Transfers of equipment between inventory and property and equipment, net
|
$
|
2,295
|
$
|
2,285
|
$
|
904
|
||||||
Net change in capitalized share-based compensation
|
$
|
(29
|
)
|
$
|
(14
|
)
|
$
|
12
|
||||
Common stock withheld for employee taxes in connection with share-based compensation
|
$
|
3,026
|
$
|
4,683
|
$
|
1,625
|
||||||
Repayment of notes payable by credits from municipal agency
|
$
|
101
|
$
|
101
|
$
|
101
|
||||||
Settlement of preexisting business relationship in connection with acquisition
|
$
|
931
|
$
|
-
|
$
|
-
|
||||||
Installment payment obligation accrued related to acquisition
|
$
|
2,336
|
$
|
-
|
$
|
-
|
Asset Classification
|
Estimated Useful Life
|
Machinery and equipment
|
2-15 years
|
Furniture and fixtures
|
3-8 years
|
Computer equipment
|
2-7 years
|
Building
|
25 years
|
Leasehold improvements
|
Shorter of estimated useful life or remaining lease term
|
• | Evidence of an arrangement exists: Persuasive evidence of an arrangement with a customer that reflects the terms and conditions to deliver products or render services must exist in order to recognize revenue. |
• | Upon shipment of the products or rendering of services to the customer: Delivery is considered to occur at the time of shipment of products to a distributor or direct customer, as title and risk of loss have been transferred to the distributor or direct customer on delivery to the common carrier. Rights of return are not provided. For services, delivery was considered to occur as the service was provided. Service revenues were primarily generated from veterinary reference laboratory diagnostic and consulting services for veterinarians. Net service revenues were recognized at the time services were performed. |
• | Fixed or determinable sales price: When the sales price is fixed or determinable that amount is recognized as revenue. |
• | Collection is reasonably assured: Collection is deemed probable if a customer is expected to be able to pay amounts under the arrangement as those amounts become due. Revenue is recognized when collectibility of the resulting receivable is reasonably assured. |
• | Volume-based Incentives. Volume-based incentives, in the form of rebates, are offered from time to time to distributors and group purchasing organizations upon meeting the sales volume requirements during a qualifying period and are recorded as a reduction to gross revenues during a qualifying period. The pricing rebate program is primarily offered to distributors and group purchasing organizations in the North America veterinary market, upon meeting the sales volume requirements of veterinary products during the qualifying period. Factors used in the rebate calculations include the identification of products sold subject to a rebate during the qualifying period and which rebate percentage applies. Based on these factors and using historical trends, adjusted for current changes, we estimate the amount of the rebate and record the rebate as a deduction to gross revenues when we record the sale of the product. The rebate is recorded as a reserve to offset accounts receivable as settlements are made through offsets to outstanding customer invoices. Settlement of the rebate accruals from the date of sale ranges from one to nine months after sale. Changes in the rebate accrual at the end of each period are based upon distributors and group purchasing organizations meeting the purchase requirements during the quarter. |
• | Distributor Rebate Incentives. During fiscal 2015, we offered a customer sales incentive program, whereby distributors were offered a rebate upon meeting certain requirements. We recognize the rebate obligation as a reduction of revenue at the later of the date on which we sell the product or the date the program is offered. These customer sales incentive programs require management to estimate the rebate amounts to distributors who will qualify for the incentive during the promotional period. We record the estimated liability in other current accrued liabilities on our consolidated balance sheet. Management’s estimates are based on historical experience and the specific terms and conditions of the incentive programs. |
• | End-User Rebates and Discounts. From time to time, cash rebates are offered to end-users who purchase certain products or instruments during a promotional period and are recorded as a reduction to gross revenues. Additionally, we periodically offer sales incentives to end-users, in the form of sales discounts, to purchase consumables for a specified promotional period, typically over five years from the sale of our instrument, and we reimburse resellers for the value of the sales discount provided to the end-user. We estimate the amount of the incentive earned by end-users during a quarter and record a liability to the reseller as a reduction to gross revenues. Factors used in the liability calculation of incentives earned by end-users include the identification of qualified end-users under the sales program during the period and using historical trends. Settlement of the liability to the reseller ranges from one to twelve months from the date an end-user earns the incentive. |
Cash
|
$
|
3,196
|
||
Installment payment obligations (1)
|
2,336
|
|||
Settlement of preexisting business relationship at fair value
|
931
|
|||
Total
|
$
|
6,463
|
(1) | The installment payment obligation is denominated in GBP and the amount in the table above is based on the exchange rate at the acquisition date. |
Fair Value
|
||||
Net tangible assets acquired
|
$
|
5,248
|
||
Intangible assets
|
||||
Customer relationships
|
1,535
|
|||
Tradename
|
16
|
|||
Deferred tax liabilities
|
(336
|
)
|
||
Total
|
$
|
6,463
|
Amount
|
||||
Cash proceeds received
|
$
|
20,100
|
||
Less: Book value of net assets sold
|
(618
|
)
|
||
Less: Costs incurred directly attributable to the transaction
|
(5,211
|
)
|
||
Net proceeds from sale of discontinued operations
|
14,271
|
|||
Less: Disposal and impairment of long-lived assets
|
(1,941
|
)
|
||
Gain on sale of discontinued operations
|
12,330
|
|||
Income tax expense
|
4,648
|
|||
Net gain on sale of discontinued operations
|
$
|
7,682
|
Year Ended March 31,
|
||||||||||||
Discontinued operations:
|
2015
|
2014
|
2013
|
|||||||||
Revenues
|
$
|
14,202
|
$
|
9,839
|
$
|
5,147
|
||||||
Cost of revenues
|
12,614
|
10,680
|
7,891
|
|||||||||
Gross profit (loss)
|
1,588
|
(841
|
)
|
(2,744
|
)
|
|||||||
Sales and marketing expense
|
3,442
|
2,588
|
3,143
|
|||||||||
Other income (expense), net
|
-
|
150
|
-
|
|||||||||
Loss before income tax provision
|
(1,854
|
)
|
(3,279
|
)
|
(5,887
|
)
|
||||||
Income tax provision (benefit)
|
(700
|
)
|
(1,235
|
)
|
(2,219
|
)
|
||||||
Net loss of discontinued operations
|
$
|
(1,154
|
)
|
$
|
(2,044
|
)
|
$
|
(3,668
|
)
|
|||
Gain on sale of discontinued operations, net of tax
|
$
|
7,682
|
$
|
-
|
$
|
-
|
March 31,
|
||||||||
2015
|
2014
|
|||||||
Receivables, net
|
$
|
2,075
|
$
|
1,974
|
||||
Inventories
|
-
|
395
|
||||||
Prepaid expenses and other current assets
|
-
|
105
|
||||||
Total current assets of discontinued operations
|
$
|
2,075
|
$
|
2,474
|
||||
Property and equipment, net
|
$
|
-
|
$
|
2,985
|
||||
Other assets
|
12
|
446
|
||||||
Total non-current assets of discontinued operations
|
$
|
12
|
$
|
3,431
|
||||
Accounts payable
|
$
|
449
|
$
|
586
|
||||
Other current liabilities
|
5,087
|
293
|
||||||
Total current liabilities of discontinued operations
|
$
|
5,536
|
$
|
879
|
||||
Other non-current liabilities
|
$
|
-
|
$
|
16
|
||||
Total non-current liabilities of discontinued operations
|
$
|
-
|
$
|
16
|
Available-for-Sale Investments
|
||||||||||||||||
March 31, 2015
|
Amortized
Cost |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
||||||||||||
Corporate bonds
|
$
|
4,346
|
$
|
-
|
$
|
(14
|
)
|
$
|
4,332
|
|||||||
Total available-for-sale investments
|
$
|
4,346
|
$
|
-
|
$
|
(14
|
)
|
$
|
4,332
|
Held-to-Maturity Investments
|
||||||||||||||||
March 31, 2015
|
Amortized
Cost |
Gross
Unrecognized |
Gross
Unrecognized |
Fair
Value |
||||||||||||
Certificates of deposit
|
$
|
6,717
|
$
|
4
|
$
|
(1
|
)
|
$
|
6,720
|
|||||||
Commercial paper
|
13,484
|
1
|
-
|
13,485
|
||||||||||||
Corporate bonds
|
22,773
|
21
|
(71
|
)
|
22,723
|
|||||||||||
Municipal bonds
|
2,984
|
21
|
(1
|
)
|
3,004
|
|||||||||||
Total held-to-maturity investments
|
$
|
45,958
|
$
|
47
|
$
|
(73
|
)
|
$
|
45,932
|
Available-for-Sale Investments
|
||||||||||||||||
March 31, 2014
|
Amortized
Cost |
Gross
Unrealized |
Gross
Unrealized |
Fair
Value |
||||||||||||
Certificates of deposit
|
$
|
498
|
$
|
1
|
$
|
-
|
$
|
499
|
||||||||
Corporate bonds
|
10,392
|
32
|
(42
|
)
|
10,382
|
|||||||||||
Total available-for-sale investments
|
$
|
10,890
|
$
|
33
|
$
|
(42
|
)
|
$
|
10,881
|
Held-to-Maturity Investments
|
||||||||||||||||
March 31, 2014
|
Amortized
Cost |
Gross
Unrecognized |
Gross
Unrecognized |
Fair
Value |
||||||||||||
Certificates of deposit
|
$
|
5,722
|
$
|
-
|
$
|
(8
|
)
|
$
|
5,714
|
|||||||
Commercial paper
|
12,991
|
-
|
(1
|
)
|
12,990
|
|||||||||||
Corporate bonds
|
14,920
|
65
|
(33
|
)
|
14,952
|
|||||||||||
Municipal bonds
|
3,079
|
20
|
(29
|
)
|
3,070
|
|||||||||||
Total held-to-maturity investments
|
$
|
36,712
|
$
|
85
|
$
|
(71
|
)
|
$
|
36,726
|
March 31, 2015
|
March 31, 2015
|
|||||||||||||||
Available-for-Sale Investments
|
Held-to-Maturity Investments
|
|||||||||||||||
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
|||||||||||||
Due in less than one year
|
$
|
-
|
$
|
-
|
$
|
26,109
|
$
|
26,151
|
||||||||
Due in 1 to 4 years
|
4,346
|
4,332
|
19,849
|
19,781
|
||||||||||||
Total investments
|
$
|
4,346
|
$
|
4,332
|
$
|
45,958
|
$
|
45,932
|
March 31, 2014
|
March 31, 2014
|
|||||||||||||||
Available-for-Sale Investments
|
Held-to-Maturity Investments
|
|||||||||||||||
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
|||||||||||||
Due in less than one year
|
$
|
6,509
|
$
|
6,542
|
$
|
22,560
|
$
|
22,571
|
||||||||
Due in 1 to 4 years
|
4,381
|
4,339
|
14,152
|
14,155
|
||||||||||||
Total investments
|
$
|
10,890
|
$
|
10,881
|
$
|
36,712
|
$
|
36,726
|
As of March 31, 2015
|
||||||||||||||||
Quoted Prices
in Active
Markets for
Identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Cash equivalents
|
$
|
3,053
|
$
|
-
|
$
|
-
|
$
|
3,053
|
||||||||
Available-for-sale investments:
|
||||||||||||||||
Corporate bonds
|
-
|
4,332
|
-
|
4,332
|
||||||||||||
Total assets at fair value
|
$
|
3,053
|
$
|
4,332
|
$
|
-
|
$
|
7,385
|
As of March 31, 2014
|
||||||||||||||||
Quoted Prices
in Active
Markets for
Identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Cash equivalents
|
$
|
5,035
|
$
|
-
|
$
|
-
|
$
|
5,035
|
||||||||
Available-for-sale investments:
|
||||||||||||||||
Certificates of deposit
|
-
|
499
|
-
|
499
|
||||||||||||
Corporate bonds
|
-
|
10,382
|
-
|
10,382
|
||||||||||||
Total assets at fair value
|
$
|
5,035
|
$
|
10,881
|
$
|
-
|
$
|
15,916
|
March 31,
|
||||||||
2015
|
2014
|
|||||||
Raw materials
|
$
|
16,436
|
$
|
13,953
|
||||
Work-in-process
|
3,984
|
3,463
|
||||||
Finished goods
|
15,759
|
9,167
|
||||||
Inventories
|
$
|
36,179
|
$
|
26,583
|
March 31,
|
||||||||
2015
|
2014
|
|||||||
Property and equipment at cost:
|
||||||||
Machinery and equipment
|
$
|
36,296
|
$
|
31,502
|
||||
Furniture and fixtures
|
3,162
|
2,216
|
||||||
Computer equipment
|
6,356
|
5,536
|
||||||
Building and leasehold improvements
|
11,096
|
9,875
|
||||||
Construction in progress
|
4,924
|
5,376
|
||||||
61,834
|
54,505
|
|||||||
Accumulated depreciation and amortization
|
(34,518
|
)
|
(30,314
|
)
|
||||
Property and equipment, net
|
$
|
27,316
|
$
|
24,191
|
Balance, March 31, 2015
|
||||||||||||
Cost
|
Accumulated
Amortization |
Net Book
Value |
||||||||||
Customer relationships
|
$
|
1,535
|
$
|
57
|
$ |
1,478
|
||||||
Tradename
|
16
|
3
|
13
|
|||||||||
Total intangible assets
|
$
|
1,551
|
$
|
60
|
$
|
1,491
|
Balance, March 31, 2014
|
||||||||||||
Cost
|
Accumulated
Amortization |
Net Book
Value |
||||||||||
Licenses
|
$
|
5,000
|
$
|
3,800
|
$ |
1,200
|
||||||
Total intangible assets
|
$
|
5,000
|
$
|
3,800
|
$
|
1,200
|
Estimated Future Annual Amortization Expense
|
||||||||||||||||||||||||||||
Fiscal Year Ending March 31,
|
||||||||||||||||||||||||||||
Total
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
||||||||||||||||||||||
Amortization expense
|
$
|
1,491
|
$
|
161
|
$
|
158
|
$
|
154
|
$
|
154
|
$
|
154
|
$
|
710
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Balance at beginning of period
|
$
|
1,868
|
$
|
1,384
|
$
|
1,846
|
||||||
Provision for warranty expense
|
2,647
|
2,068
|
1,228
|
|||||||||
Warranty costs incurred
|
(1,359
|
)
|
(1,584
|
)
|
(1,400
|
)
|
||||||
Adjustment to pre-existing warranties
|
-
|
-
|
(290
|
)
|
||||||||
Balance at end of period
|
3,156
|
1,868
|
1,384
|
|||||||||
Non-current portion of warranty reserve
|
1,733
|
821
|
389
|
|||||||||
Current portion of warranty reserve
|
$
|
1,423
|
$
|
1,047
|
$
|
995
|
March 31,
2015
|
March 31,
2014
|
|||||||
Accrued liabilities for customer sales incentive programs
|
$
|
5,507
|
$
|
601
|
||||
Installment payment obligation accrued related to acquisition
|
1,111
|
-
|
||||||
Other current accrued liabilities
|
3,186
|
2,483
|
||||||
Total other current accrued liabilities
|
$
|
9,804
|
$
|
3,084
|
Payments Due by Period
|
||||||||||||||||||||||||||||
Due in Fiscal
|
||||||||||||||||||||||||||||
Total
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
||||||||||||||||||||||
Operating lease obligations
|
$
|
12,059
|
$
|
1,984
|
$
|
1,944
|
$
|
1,830
|
$
|
1,810
|
$
|
1,832
|
$
|
2,659
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cost of revenues
|
$
|
1,409
|
$
|
1,105
|
$
|
921
|
||||||
Research and development
|
1,574
|
1,138
|
1,150
|
|||||||||
Sales and marketing
|
3,156
|
2,146
|
2,506
|
|||||||||
General and administrative
|
3,648
|
3,254
|
2,509
|
|||||||||
Share-based compensation expense before income taxes
|
9,787
|
7,643
|
7,086
|
|||||||||
Income tax benefit
|
(3,293
|
)
|
(2,605
|
)
|
(2,557
|
)
|
||||||
Total share-based compensation expense after income taxes
|
$
|
6,494
|
$
|
5,038
|
$
|
4,529
|
||||||
Net impact of share-based compensation on:
|
||||||||||||
Basic net income per share
|
$
|
0.29
|
$
|
0.23
|
$
|
0.21
|
||||||
Diluted net income per share
|
$
|
0.28
|
$
|
0.22
|
$
|
0.20
|
Number of
Shares
|
Weighted
Average
Exercise
Price
Per Share
|
|||||||
Outstanding at March 31, 2012
|
||||||||
(282,000 shares exercisable at a weighted average exercise price of $15.21 per share)
|
282,000
|
$ |
15.21
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
(210,000
|
)
|
13.38
|
|||||
Canceled or forfeited
|
-
|
-
|
||||||
Outstanding at March 31, 2013
|
||||||||
(72,000 shares exercisable at a weighted average exercise price of $20.50 per share)
|
72,000
|
20.50
|
||||||
Granted
|
-
|
-
|
||||||
Exercised
|
(70,000
|
)
|
20.74
|
|||||
Canceled or forfeited
|
-
|
-
|
||||||
Outstanding at March 31, 2014
|
||||||||
(2,000 shares exercisable at a weighted average exercise price of $13.24 per share)
|
2,000
|
13.24
|
||||||
Granted
|
-
|
-
|
||||||
Exercised
|
(2,000
|
)
|
13.24
|
|||||
Canceled or forfeited
|
-
|
-
|
||||||
Outstanding at March 31, 2015
|
-
|
$
|
-
|
• | Restricted stock unit awards to employees: Four-year time-based vesting as follows: five percent vesting after the first year; additional ten percent after the second year; additional 15 percent after the third year; and the remaining 70 percent after the fourth year of continuous employment with the Company. |
• | Restricted stock unit awards to non-employee directors: 100 percent vesting after one year of continuous service to the Company. |
• | 25% of the shares subject to an award vest in full upon achieving 90% of the consolidated income from operations target described above and continuous service until the third anniversary of the date of grant; |
• | 25% of the shares subject to an award vest in full upon achieving 90% of the consolidated income from operations target described above and continuous service until the fourth anniversary of the date of grant; |
• | 25% of the shares subject to an award vest in full upon achieving 100% of the consolidated income from operations target described above and continuous service until the third anniversary of the date of grant; and |
• | 25% of the shares subject to an award vest in full upon achieving 100% of the consolidated income from operations target described above and continuous service until the fourth anniversary of the date of grant. |
Time-Based Restricted Stock Units
|
Performance-Based Restricted Stock Units
|
|||||||||||||||
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value(1)
|
Number of
Shares(2)
|
Weighted
Average
Grant Date
Fair Value(1)
|
|||||||||||||
Unvested at March 31, 2012
|
1,120,000
|
$
|
24.06
|
-
|
$
|
-
|
||||||||||
Granted
|
192,000
|
36.30
|
21,000
|
35.62
|
||||||||||||
Vested(3)
|
(257,000
|
)
|
23.40
|
-
|
-
|
|||||||||||
Canceled or forfeited
|
(75,000
|
)
|
26.78
|
-
|
-
|
|||||||||||
Unvested at March 31, 2013
|
980,000
|
$
|
26.42
|
21,000
|
$
|
35.62
|
||||||||||
Granted
|
175,000
|
41.29
|
129,000
|
42.43
|
||||||||||||
Vested(3)
|
(295,000
|
)
|
21.73
|
(21,000
|
)
|
35.62
|
||||||||||
Canceled or forfeited
|
(86,000
|
)
|
31.61
|
(16,000
|
)
|
42.43
|
||||||||||
Unvested at March 31, 2014
|
774,000
|
$
|
30.98
|
113,000
|
$
|
42.43
|
||||||||||
Granted
|
189,000
|
43.85
|
172,000
|
40.82
|
||||||||||||
Vested(3)
|
(272,000
|
)
|
27.24
|
-
|
-
|
|||||||||||
Canceled or forfeited
|
(12,000
|
)
|
30.37
|
(137,000
|
)
|
42.15
|
||||||||||
Unvested at March 31, 2015
|
679,000
|
$
|
36.08
|
148,000
|
$
|
40.82
|
(1) | The weighted average grant date fair value of restricted stock units is based on the number of shares and the closing market price of our common stock on the date of grant. |
(2) | The shares granted during fiscal 2013 and unvested at March 31, 2013 related to FY2013 Performance RSUs do not include the awards approved by the Compensation Committee during the fiscal year 2013 that were deemed not to have been granted in accordance with ASC 718-10-55-95. |
(3) | The number of restricted stock units vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements. |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income from continuing operations
|
$
|
20,803
|
$
|
16,229
|
$
|
31,127
|
||||||
Loss from discontinued operations, net of tax
|
(1,154
|
)
|
(2,044
|
)
|
(3,668
|
)
|
||||||
Gain on sale of discontinued operations, net of tax
|
7,682
|
-
|
-
|
|||||||||
Net income
|
$
|
27,331
|
$
|
14,185
|
$
|
27,459
|
||||||
Weighted average common shares outstanding:
|
||||||||||||
Basic
|
22,497,000
|
22,270,000
|
21,946,000
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
1,000
|
20,000
|
89,000
|
|||||||||
Restricted stock units
|
276,000
|
257,000
|
318,000
|
|||||||||
Warrants
|
13,000
|
28,000
|
28,000
|
|||||||||
Diluted
|
22,787,000
|
22,575,000
|
22,381,000
|
|||||||||
Net income (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$
|
0.92
|
$
|
0.73
|
$
|
1.42
|
||||||
Discontinued operations
|
0.29
|
(0.09
|
)
|
(0.17
|
)
|
|||||||
Basic net income per share
|
$
|
1.21
|
$
|
0.64
|
$
|
1.25
|
||||||
Diluted
|
||||||||||||
Continuing operations
|
$
|
0.91
|
$
|
0.72
|
$
|
1.39
|
||||||
Discontinued operations
|
0.29
|
(0.09
|
)
|
(0.16
|
)
|
|||||||
Diluted net income per share
|
$
|
1.20
|
$
|
0.63
|
$
|
1.23
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Weighted average number of shares underlying antidilutive restricted stock units
|
-
|
5,000
|
2,000
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Continuing operations:
|
||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
12,065
|
$
|
7,947
|
$
|
16,635
|
||||||
State
|
1,657
|
939
|
1,647
|
|||||||||
Foreign
|
64
|
892
|
174
|
|||||||||
Total current income tax provision
|
13,786
|
9,778
|
18,456
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
(1,363
|
)
|
(631
|
)
|
(1,219
|
)
|
||||||
State
|
(158
|
)
|
(154
|
)
|
(88
|
)
|
||||||
Foreign
|
(26
|
)
|
-
|
-
|
||||||||
Total deferred income tax provision (benefit)
|
(1,547
|
)
|
(785
|
)
|
(1,307
|
)
|
||||||
Total income tax provision - continuing operations
|
$
|
12,239
|
$
|
8,993
|
$
|
17,149
|
||||||
Discontinued operations and gain on sale of discontinued operations:
|
||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
5,923
|
$
|
(1,147
|
)
|
$
|
(2,060
|
)
|
||||
State
|
458
|
(88
|
)
|
(159
|
)
|
|||||||
Total current income tax provision (benefit)
|
6,381
|
(1,235
|
)
|
(2,219
|
)
|
|||||||
Deferred:
|
||||||||||||
Federal
|
(2,258
|
)
|
-
|
-
|
||||||||
State
|
(175
|
)
|
-
|
-
|
||||||||
Total deferred income tax (benefit)
|
(2,433
|
)
|
-
|
-
|
||||||||
Total income tax provision (benefit) - discontinued operations and gain on sale of discontinued operations
|
$
|
3,948
|
$
|
(1,235
|
)
|
$
|
(2,219
|
)
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Continuing operations:
|
||||||||||||
United States
|
$
|
33,489
|
$
|
22,598
|
$
|
47,630
|
||||||
Foreign
|
(447
|
)
|
2,624
|
646
|
||||||||
Total - continuing operations
|
$
|
33,042
|
$
|
25,222
|
$
|
48,276
|
||||||
Discontinued operations:
|
||||||||||||
United States
|
$
|
10,475
|
$
|
(3,279
|
)
|
$
|
(5,887
|
)
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Continuing operations:
|
||||||||||||
Income taxes at federal income tax rate
|
$
|
11,565
|
$
|
8,828
|
$
|
16,896
|
||||||
State income taxes, net of federal benefits
|
787
|
475
|
1,282
|
|||||||||
Non-deductible compensation
|
880
|
260
|
56
|
|||||||||
Research and development tax credits
|
(383
|
)
|
(210
|
)
|
(541
|
)
|
||||||
Tax-exempt interest income
|
(6
|
)
|
(20
|
)
|
(32
|
)
|
||||||
Qualified production activities income benefit
|
(866
|
)
|
(490
|
)
|
(525
|
)
|
||||||
Other
|
262
|
150
|
13
|
|||||||||
Total income tax provision from continuing operations
|
$
|
12,239
|
$
|
8,993
|
$
|
17,149
|
March 31,
|
||||||||
2015
|
2014
|
|||||||
Deferred tax assets, current
|
$
|
6,575
|
$
|
4,464
|
||||
Deferred tax assets, non-current
|
3,413
|
1,557
|
||||||
Deferred tax liabilities, non-current
|
(310
|
)
|
-
|
|||||
Total net deferred tax assets
|
$
|
9,678
|
$
|
6,021
|
March 31,
|
||||||||
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Research and development tax credit carryforwards
|
$
|
717
|
$
|
646
|
||||
Capitalized research and development
|
106
|
136
|
||||||
Inventory reserves
|
724
|
622
|
||||||
Deferred revenue from extended maintenance agreements
|
1,687
|
1,940
|
||||||
Warranty reserves
|
1,190
|
704
|
||||||
Accrued payroll and other accrued expenses
|
2,904
|
1,269
|
||||||
Share-based compensation
|
2,932
|
2,129
|
||||||
Alternative minimum tax credits
|
24
|
24
|
||||||
Tax on deferred intercompany profit
|
1,161
|
742
|
||||||
Other
|
494
|
792
|
||||||
Total deferred tax assets
|
11,939
|
9,004
|
||||||
Deferred tax liabilities:
|
||||||||
Depreciation
|
(1,850
|
)
|
(2,876
|
)
|
||||
Other
|
(411
|
)
|
(107
|
)
|
||||
Total deferred tax liabilities
|
(2,261
|
)
|
(2,983
|
)
|
||||
Net deferred tax assets
|
$
|
9,678
|
$
|
6,021
|
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues:
|
||||||||||||
Medical Market
|
$
|
35,364
|
$
|
28,134
|
$
|
31,643
|
||||||
Veterinary Market
|
164,018
|
130,859
|
145,363
|
|||||||||
Other(1)
|
3,211
|
3,038
|
3,872
|
|||||||||
Total revenues
|
202,593
|
162,031
|
180,878
|
|||||||||
Cost of revenues:
|
||||||||||||
Medical Market
|
18,730
|
15,623
|
15,179
|
|||||||||
Veterinary Market
|
74,752
|
62,350
|
64,586
|
|||||||||
Other(1)
|
141
|
108
|
138
|
|||||||||
Total cost of revenues
|
93,623
|
78,081
|
79,903
|
|||||||||
Gross profit:
|
||||||||||||
Medical Market
|
16,634
|
12,511
|
16,464
|
|||||||||
Veterinary Market
|
89,266
|
68,509
|
80,777
|
|||||||||
Other(1)
|
3,070
|
2,930
|
3,734
|
|||||||||
Gross profit
|
$
|
108,970
|
$
|
83,950
|
$
|
100,975
|
(1) | Represents unallocated items, not specifically identified to any particular business segment. |
Year Ended March 31,
|
||||||||||||
Revenues by Product Category
|
2015
|
2014
|
2013
|
|||||||||
Instruments (1)
|
$
|
48,649
|
$
|
37,539
|
$
|
46,034
|
||||||
Consumables (2)
|
144,446
|
117,533
|
127,481
|
|||||||||
Other products (3)
|
9,348
|
6,809
|
7,213
|
|||||||||
Product sales, net
|
202,443
|
161,881
|
180,728
|
|||||||||
Development and licensing revenue
|
150
|
150
|
150
|
|||||||||
Total revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
(1) | Instruments include chemistry analyzers, hematology instruments, VSpro specialty analyzers and i‑STAT analyzers. |
(2) | Consumables include reagent discs, hematology reagent kits, VSpro specialty cartridges, i‑STAT cartridges and rapid tests. |
(3) | Other products include products using the Orbos process and extended maintenance agreements. |
Year Ended March 31,
|
||||||||||||
Revenues by Geographic Region
|
2015
|
2014
|
2013
|
|||||||||
North America
|
$
|
163,308
|
$
|
126,768
|
$
|
147,627
|
||||||
Europe
|
30,422
|
27,161
|
26,086
|
|||||||||
Asia Pacific and rest of the world
|
8,863
|
8,102
|
7,165
|
|||||||||
Total revenues
|
$
|
202,593
|
$
|
162,031
|
$
|
180,878
|
Quarter Ended
|
||||||||||||||||
Fiscal Year Ended March 31, 2015:
|
June 30
|
September 30
|
December 31
|
March 31
|
||||||||||||
Revenues
|
$
|
44,054
|
$
|
50,471
|
$
|
56,051
|
$
|
52,017
|
||||||||
Gross profit
|
23,703
|
28,076
|
28,783
|
28,408
|
||||||||||||
Income from continuing operations, net of tax
|
5,074
|
5,712
|
6,215
|
3,802
|
||||||||||||
Loss from discontinued operations, net of tax
|
(359
|
)
|
(312
|
)
|
(330
|
)
|
(153
|
)
|
||||||||
Gain on sale of discontinued operations, net of tax
|
-
|
-
|
-
|
7,682
|
||||||||||||
Net income
|
$
|
4,715
|
$
|
5,400
|
$
|
5,885
|
$
|
11,331
|
||||||||
Net income (loss) per share:
|
||||||||||||||||
Basic
|
||||||||||||||||
Continuing operations
|
$
|
0.23
|
$
|
0.25
|
$
|
0.27
|
$
|
0.17
|
||||||||
Discontinued operations
|
(0.02
|
)
|
(0.01
|
)
|
(0.01
|
)
|
0.33
|
|||||||||
Basic net income per share
|
$
|
0.21
|
$
|
0.24
|
$
|
0.26
|
$
|
0.50
|
||||||||
Diluted
|
||||||||||||||||
Continuing operations
|
$
|
0.23
|
$
|
0.25
|
$
|
0.27
|
$
|
0.17
|
||||||||
Discontinued operations
|
(0.02
|
)
|
(0.01
|
)
|
(0.01
|
)
|
0.33
|
|||||||||
Diluted net income per share
|
$
|
0.21
|
$
|
0.24
|
$
|
0.26
|
$
|
0.50
|
||||||||
Cash dividends declared per share
|
$
|
0.10
|
$
|
0.10
|
$
|
0.10
|
$
|
0.10
|
Quarter Ended
|
||||||||||||||||
Fiscal Year Ended March 31, 2014:
|
June 30
|
September 30
|
December 31
|
March 31
|
||||||||||||
Revenues
|
$
|
40,956
|
$
|
43,541
|
$
|
38,318
|
$
|
39,216
|
||||||||
Gross profit
|
21,370
|
22,176
|
19,415
|
20,989
|
||||||||||||
Income from continuing operations, net of tax
|
3,932
|
4,482
|
3,681
|
4,134
|
||||||||||||
Loss from discontinued operations, net of tax
|
(703
|
)
|
(486
|
)
|
(459
|
)
|
(396
|
)
|
||||||||
Net income
|
$
|
3,229
|
$
|
3,996
|
$
|
3,222
|
$
|
3,738
|
||||||||
Net income (loss) per share:
|
||||||||||||||||
Basic
|
||||||||||||||||
Continuing operations
|
$
|
0.18
|
$
|
0.20
|
$
|
0.16
|
$
|
0.19
|
||||||||
Discontinued operations
|
(0.03
|
)
|
(0.02
|
)
|
(0.02
|
)
|
(0.02
|
)
|
||||||||
Basic net income per share
|
$
|
0.15
|
$
|
0.18
|
$
|
0.14
|
$
|
0.17
|
||||||||
Diluted
|
||||||||||||||||
Continuing operations
|
$
|
0.17
|
$
|
0.20
|
$
|
0.16
|
$
|
0.19
|
||||||||
Discontinued operations
|
(0.03
|
)
|
(0.02
|
)
|
(0.02
|
)
|
(0.02
|
)
|
||||||||
Diluted net income per share
|
$
|
0.14
|
$
|
0.18
|
$
|
0.14
|
$
|
0.17
|
||||||||
Cash dividends declared per share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
(a) | The following financial statements, schedules and exhibits are filed as part of this report: |
1. | Financial Statements - The Financial Statements required by this item are listed on the Index to Consolidated Financial Statements in Part II, Item 8 of this report, which is incorporated by reference herein. |
2. | Financial Statement Schedules - |
· | Schedule II – Valuation and Qualifying Accounts and Reserves |
· | Other financial statement schedules are not included because they are not required or the information is otherwise shown in the consolidated financial statements or notes thereto. |
3. | Exhibits - The exhibits listed on the accompanying Exhibit Index are filed as part of, or are incorporated by reference into, this report. |
Description
|
Balance at
Beginning of
Year
|
Additions
Charged to
Expenses
|
Deductions
from Reserves
(a)
|
Balance at
End of Year
|
||||||||||||
Total Reserve for Doubtful Accounts and Sales Allowances (b):
|
||||||||||||||||
Year ended March 31, 2015
|
$
|
182,000
|
$
|
(24,000
|
)
|
$
|
89,000
|
$
|
247,000
|
|||||||
Year ended March 31, 2014
|
$
|
319,000
|
$
|
182,000
|
$
|
(319,000
|
)
|
$
|
182,000
|
|||||||
Year ended March 31, 2013
|
$
|
283,000
|
$
|
107,000
|
$
|
(71,000
|
)
|
$
|
319,000
|
(a) | The deductions related to allowances for doubtful accounts represent net balance of accounts receivable which were written off and recovered. |
(b) | The reserve for doubtful accounts and sales allowance is presented on a consolidated basis. |
ABAXIS, INC.
|
||
By:
|
/s/ Clinton H. Severson
|
|
Clinton H. Severson
|
||
Chairman of the Board, President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Clinton H. Severson
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
June 1, 2015
|
||
Clinton H. Severson
|
||||
/s/ Alberto R. Santa Ines
|
Chief Financial Officer and Vice President of Finance
(Principal Financial and Accounting Officer)
|
June 1, 2015
|
||
Alberto R. Santa Ines
|
||||
/s/ Vernon E. Altman
|
Director
|
June 1, 2015
|
||
Vernon E. Altman
|
||||
/s/ Richard J. Bastiani, Ph.D.
|
Director
|
June 1, 2015
|
||
Richard J. Bastiani, Ph.D.
|
||||
/s/ Michael D. Casey
|
Director
|
June 1, 2015
|
||
Michael D. Casey
|
||||
/s/ Henk J. Evenhuis
|
Director
|
June 1, 2015
|
||
Henk J. Evenhuis
|
||||
/s/ Prithipal Singh, Ph.D.
|
Director
|
June 1, 2015
|
||
Prithipal Singh, Ph.D.
|
Exhibit
No.
|
Description of Document
|
3.1
|
Amended and Restated Articles of Incorporation, as amended (filed with the Securities and Exchange Commission on May 30, 2014 as Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and incorporated herein by reference).
|
3.2
|
By-laws, as amended (filed with the Securities and Exchange Commission on May 30, 2014 as Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and incorporated herein by reference).
|
4.1
|
Form of Warrant to Purchase Shares of Common Stock of Abaxis, Inc. issued to the National Institute for Strategic Technology Acquisition and Commercialization (filed with the Securities and Exchange Commission on June 13, 2011 as Exhibit 4.3 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2011 and incorporated herein by reference).
|
4.2
|
Reference is made to Exhibit 3.1and Exhibit 3.2.
|
10.1
|
Lease Agreement with Principal Development Investors, LLC, dated June 21, 2000 (filed with the Securities and Exchange Commission on January 10, 2001 as Exhibit 10.10 to our Registration Statement on Form S-3 and incorporated herein by reference).
|
10.2*
|
Amended and Restated Executive Employment Agreement with Mr. Clinton H. Severson, dated October 27, 2010 (filed with the Securities and Exchange Commission on February 9, 2011 as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2010 and incorporated herein by reference).
|
10.3*
|
2005 Equity Incentive Plan, as amended and restated through November 8, 2012 (filed with the Securities and Exchange Commission on February 11, 2013 as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 and incorporated herein by reference).
|
10.4*
|
Form of Notice of Grant of Restricted Stock Units (time vesting) under the 2005 Equity Incentive Plan (filed with the Securities and Exchange Commission on June 14, 2013 as Exhibit 10.7 to our Annual Report on Form 10-K for the year ended March 31, 2013 and incorporated herein by reference).
|
10.5*
|
Form of Notice of Grant of Restricted Stock Units (performance vesting) under the 2005 Equity Incentive Plan (filed with the Securities and Exchange Commission on June 14, 2013 as Exhibit 10.8 to our Annual Report on Form 10-K for the year ended March 31, 2013 and incorporated herein by reference).
|
10.6*
|
2014 Equity Incentive Plan (filed with the Securities and Exchange Commission on October 22, 2014 as Exhibit 99.2 to our Registration Statement on Form S-8 (File No. 333-199518) and incorporated herein by reference).
|
10.7*
|
Forms of Restricted Stock Unit (time vesting) Grant Notice and Award Agreements under the Abaxis, Inc. 2014 Equity Incentive Plan (filed with the Securities and Exchange Commission on February 9, 2015 as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 and incorporated herein by reference).
|
10.8*
|
Forms of Restricted Stock Unit (performance vesting) Grant Notice and Award Agreements under the Abaxis, Inc. 2014 Equity Incentive Plan (filed with the Securities and Exchange Commission on February 9, 2015 as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 and incorporated herein by reference).
|
10.9*
|
Abaxis, Inc. Executive Change of Control Severance Plan, as amended as of December 23, 2008 (filed with the Securities and Exchange Commission on February 9, 2009 as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 and incorporated herein by reference).
|
10.10*
|
Fiscal 2016 Base Salary and Target Bonus for the Named Executive Officers (filed with the Securities and Exchange Commission on May 4, 2015 as a part of our Current Report on Form 8-K and incorporated herein by reference).
|
10.11*
|
Form of Indemnity Agreement entered into by Abaxis, Inc. with each of its directors and executive officers (filed with the Securities and Exchange Commission on June 13, 2008 as Exhibit 10.22 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 and incorporated herein by reference).
|
10.12*
|
Transition Agreement between Abaxis, Inc. and Alberto Santa Ines, dated May 1, 2015 (filed with the Securities and Exchange Commission on May 4, 2015 as Exhibit 99.1 to our Current Report on Form 8-K and incorporated herein by reference).
|
10.13*
|
Offer Letter Agreement between Abaxis, Inc. and Dean Ross Taylor, dated April 29, 2015 (filed with the Securities and Exchange Commission on May 4, 2015 as Exhibit 99.2 to our Current Report on Form 8-K and incorporated herein by reference).
|
10.14*
|
Transition Agreement between Abaxis, Inc. and Vladimir E. Ostoich, Ph.D., dated August 15, 2014 (filed with the Securities and Exchange Commission on August 21, 2014 as Exhibit 10.1 to our Current Report on Form 8-K and incorporated by reference).
|
10.15*
|
Executive Employment Agreement, dated as of May 1, 2014, with Craig M. Tockman (filed with the Securities and Exchange Commission on August 11, 2014 as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference).
|
10.16
|
First Amendment to Lease Agreement with Principal Development Investors, LLC, dated as of August 28, 2000 (filed with the Securities and Exchange Commission on June 14, 2010 as Exhibit 10.23 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and incorporated herein by reference).
|
10.17
|
Second Amendment to Lease Agreement with Principal Development Investors, LLC, dated as of November 20, 2000 (filed with the Securities and Exchange Commission on June 14, 2010 as Exhibit 10.24 with our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and incorporated herein by reference).
|
10.18
|
Third Amendment to Lease Agreement with Crossroads Technology Partners and Nearon Crossroads, LLC, as successors in interest to Principal Development Investors, LLC, dated as of April 10, 2002 (filed with the Securities and Exchange Commission on June 14, 2010 as Exhibit 10.25 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and incorporated herein by reference).
|
10.19
|
Fourth Amendment to Lease Agreement with Whipple Road Holdings, LLC, SFP Crossroads, LLC and Woodstock Bowers, LLC, dated March 11, 2010 (filed with the Securities and Exchange Commission on June 14, 2010 as Exhibit 10.26 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and incorporated herein by reference).
|
10.20+
|
Distributor Agreement by and between Lextron, Inc. including subsidiaries TW Medical Veterinary Supply and VetPham and Abaxis, Inc., dated April 1, 2010 (filed with the Securities and Exchange Commission on June 14, 2012 as Exhibit 10.17 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2012 and incorporated herein by reference).
|
10.21+
|
Exclusive Agreement, dated October 26, 2012, by and between Abaxis, Inc. and Abbott Point of Care, Inc. (filed with the Securities and Exchange Commission on July 2, 2013 as Exhibit 10.1 to the Amendment to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 and incorporated herein by reference).
|
10.22
|
Non-Exclusive Distributor Agreement, dated as of September 28, 2012, by and between MWI Veterinary Supply, Inc. (“MWI”) and Abaxis, Inc. (filed with the Securities and Exchange Commission on November 27, 2012 as Exhibit 10.27 to MWI’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 and incorporated herein by reference).
|
10.23+
|
Letter Agreement, dated as of September 28, 2012, by and between MWI and Abaxis, Inc. (filed with the Securities and Exchange Commission on November 27, 2012 as Exhibit 10.28 to MWI’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 and incorporated herein by reference).
|
10.24
|
Amendment to Exclusive Agreement between Abaxis, Inc. and Abbott Point of Care Inc., dated September 30, 2013 (filed with the Securities and Exchange Commission on November 12, 2013 as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013).
|
Asset Purchase Agreement, dated as of March 19, 2015, between Antech Diagnostics, Inc. and Abaxis, Inc.
|
|
Subsidiaries of Abaxis, Inc.
|
|
Consent of Burr Pilger Mayer, Inc., Independent Registered Public Accounting Firm
|
|
24.1
|
Power of Attorney. (included on the Signature Page hereto).
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
+
|
Confidential treatment of certain portions of this agreement has been granted by the Securities and Exchange Commission.
|
++
|
Confidential treatment of certain portions of this agreement has been requested from the Securities and Exchange Commission.
|
*
|
Management contract or compensatory plan or arrangement.
|
#
|
This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
|
Page
|
|||
Article I Definitions
|
1
|
||
Article II PURCHASE AND SALE OF ASSETS
|
4
|
||
2.1
|
Purchase and Sale of Assets
|
4
|
|
2.2
|
Purchase Price
|
4
|
|
2.3
|
Holdback
|
5
|
|
2.4
|
Assumed Liabilities
|
5
|
|
2.5
|
Excluded Liabilities
|
5
|
|
2.6
|
Allocation of Purchase Price
|
6
|
|
Article III Closing
|
7
|
||
3.1
|
Closing
|
7
|
|
3.2
|
Closing Deliveries
|
7
|
|
Article IV BUYER’S Representations and Warranties
|
8
|
||
4.1
|
Organization, Standing and Power
|
8
|
|
4.2
|
Authority; Execution and Delivery; and Enforceability
|
8
|
|
4.3
|
No Conflicts; Consents
|
9
|
|
4.4
|
Cash Consideration
|
9
|
|
4.5
|
Actions; Orders
|
9
|
|
4.6
|
No Brokers
|
9
|
|
Article V Representations and Warranties of Seller
|
9
|
||
5.1
|
Organization and Standing
|
9
|
|
5.2
|
Authority; Execution and Delivery; and Enforceability
|
10
|
|
5.3
|
No Conflicts; Consents
|
10
|
|
5.4
|
No Brokers
|
10
|
|
5.5
|
Title to Purchased Assets; Condition and of the Purchased Assets
|
10
|
|
5.6
|
Intentionally Omitted
|
11
|
|
5.7
|
Material Customers
|
11
|
|
5.8
|
Customer Contracts
|
11
|
|
5.9
|
Intellectual Property
|
11
|
|
5.10
|
Employment Matters
|
12
|
|
5.11
|
Employee Benefit Matters
|
13
|
|
5.12
|
Taxes
|
13
|
|
5.13
|
Legal Compliance
|
14
|
|
5.14
|
Legal Proceedings
|
14
|
|
5.15
|
Accuracy of Information Furnished
|
14
|
|
Article VI Pre-Closing Covenants
|
14
|
||
6.1
|
Closing Efforts
|
14
|
|
6.2
|
Operation of Business
|
14
|
|
6.3
|
Consents of Third Parties
|
14
|
|
6.4
|
Notification
|
15
|
|
6.5
|
Access to Information
|
15
|
|
6.6
|
No Shop
|
15
|
|
6.7
|
Employees
|
15
|
|
Article VII Post-Closing Covenants
|
16
|
||
7.1
|
General
|
16
|
|
7.2
|
Confidentiality
|
16
|
7.3
|
Accounts Receivable
|
16
|
|
7.4
|
Employees and Employee Benefits
|
17
|
|
7.5
|
Bulk Sales Laws
|
17
|
|
7.6
|
Liabilities
|
17
|
|
7.7
|
Transfer Taxes
|
18
|
|
7.8
|
Public Announcements
|
18
|
|
7.9
|
Further Assurances
|
18
|
|
Article VIII CONDITIONS TO CLOSING
|
18
|
||
8.1
|
General Conditions
|
18
|
|
8.2
|
Conditions Precedent to Obligation of Buyer
|
18
|
|
8.3
|
Conditions Precedent to Obligation of Seller
|
19
|
|
Article IX INDEMNIFICATION
|
19
|
||
9.1
|
Survival
|
19
|
|
9.2
|
Indemnification By Seller
|
20
|
|
9.3
|
Indemnification By Buyer
|
21
|
|
9.4
|
Certain Limitations
|
21
|
|
9.5
|
Indemnification Procedures
|
21
|
|
9.6
|
Payments
|
25
|
|
9.7
|
Tax Treatment of Indemnification Payments
|
25
|
|
9.8
|
Effect of Investigation
|
25
|
|
9.9
|
Exclusive Remedies
|
25
|
|
Article X Termination
|
25
|
||
10.1
|
Termination
|
25
|
|
10.2
|
Effect of Termination
|
26
|
|
Article XI Miscellaneous
|
27
|
||
11.1
|
Expenses
|
27
|
|
11.2
|
Notices
|
27
|
|
11.3
|
Interpretation
|
27
|
|
11.4
|
Headings
|
28
|
|
11.5
|
Severability
|
28
|
|
11.6
|
Successors and Assigns
|
28
|
|
11.7
|
No Third-party Beneficiaries
|
28
|
|
11.8
|
Amendment and Modification; Waiver
|
28
|
|
11.9
|
Governing Law; Submission to Jurisdiction
|
28
|
|
11.10
|
Specific Performance
|
29
|
|
11.11
|
Counterparts
|
29
|
|
11.12
|
Entire Agreement
|
29
|
If to Seller: | Abaxis, Inc. |
Attn: | Chief Executive Officer |
With a copy to: | Glen Y. Sato |
If to Buyer: | Antech Diagnostics, Inc. |
Attn:
|
Chief Executive Officer
|
With a copy to: | Antech Diagnostics, Inc. |
Attn:
|
Legal Department
|
BUYER:
|
|||
ANTECH DIAGNOSTICS, INC.
|
|||
By:
|
/s/ Josh Drake | ||
Name:
|
Josh Drake | ||
Title:
|
President | ||
SELLER:
|
|||
ABAXIS, INC.
|
|||
By:
|
/s/ Craig Tockman, DVM | ||
Name:
|
Craig Tockman, DVM | ||
Title:
|
Vice President |
Description
|
Book Value
|
|||
Immulite 2000 Analyzer
|
$
|
30,529.21
|
||
RAI Assay Capabilities
|
$
|
11,827.58
|
||
ADVIA 2120i Hemo Analyzer
|
$
|
78,486.99
|
||
ADVIA 2120i Hemo Analyzer
|
$
|
74,189.52
|
||
AVRL Hematology Stainer
|
$
|
9,942.64
|
||
AVRL Tissue TEK PATHOLOGY EQUIP
|
$
|
207,713.76
|
||
Urine Dip Stick Reader
|
$
|
6,881.33
|
||
MICROSCOPES - 2 Standard Microscopes
|
$
|
8,883.32
|
||
MICROSCOPES - 2 Hitschfel Ins BX43 With Camera System, 1 BX46F With Camers System, 1 Hitschfel Scope, 1 Visual Dynamics Microscope And Camera
|
$
|
66,392.70
|
||
Microscope Bx46
|
$
|
11,193.44
|
||
Microscope Bx46
|
$
|
11,193.44
|
||
Microscope Olympus Bx46 & Dp26 Camera
|
$
|
22,934.74
|
||
Ultra Centrifuge & Microscope (2)
|
$
|
41,283.85
|
||
Co2 Incubator/Safety Cabinet
|
$
|
5,692.87
|
||
HP Laser Jet Pro Printer
|
-
|
|||
AVRL Office Furniture
|
$
|
18,132.12
|
||
Path Lab Bench
|
$
|
4,330.85
|
||
LAB EQUIPMENT - Lab Benches In Serology And Chemistry, Ductless Fume Hood
|
$
|
37,148.47
|
||
Water Bath Chemistry/Ref. Centrifuge
|
$
|
6,485.72
|
||
VS2
|
$
|
188.31
|
||
ISTAT 1
|
-
|
|||
VSPro
|
-
|
|||
HM5
|
-
|
Equipment - Roche
|
Laboratory Equipment
|
Equipment - Remel
|
Laboratory Equipment
|
Renal Lease through 8/31/16
|
Facilities Lease
|
Ikon Office Solutions Lease
|
Copier
|
Ikon Office Solutions Lease
|
Copier
|
Kansas BioScience Grant
|
Contract
|
Equipment - Roche
|
Laboratory Equipment
|
Equipment - Remel
|
Laboratory Equipment
|
Renal Lease through 8/31/16
|
Facilities Lease
|
Ikon Office Solutions Lease
|
Copier
|
Ikon Office Solutions Lease
|
Copier
|
Kansas BioScience Grant
|
Contract
|
Account Name
|
Shipping Street 1
|
Shipping City
|
Shipping
State/Province
|
Shipping
Zipcode
|
Phone
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
Cust ID
|
Account Name
|
Shipping Street 1
|
Shipping City
|
Shipping State/Province
|
Shipping
Zipcode
|
Phone
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
First Name
|
Last Name
|
Job Title
|
Date
of Hire
|
Base Salary
|
Bonus Target
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
Name
|
Jurisdiction of Incorporation
|
Abaxis Europe GmbH
|
Germany
|
Abaxis UK (formerly Quality Clinical Reagents Limited)
|
England
|
Trio Diagnostics (Ireland) Ltd
|
England
|
1. | I have reviewed this annual report on Form 10-K of Abaxis, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: June 1, 2015
|
/s/ Clinton H. Severson
|
|
Clinton H. Severson
|
||
President and Chief Executive Officer
|
1. | I have reviewed this annual report on Form 10-K of Abaxis, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: June 1, 2015
|
/s/ Alberto R. Santa Ines
|
|
Alberto R. Santa Ines
|
||
Chief Financial Officer and Vice President of Finance
|
Dated: June 1, 2015
|
||
By:
|
/s/ Clinton H. Severson
|
|
Clinton H. Severson
|
||
President and Chief Executive Officer
|
Dated: June 1, 2015
|
||
By:
|
/s/ Alberto R. Santa Ines
|
|
Alberto R. Santa Ines
|
||
Chief Financial Officer and Vice President of Finance
|
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