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Exploring Abaxis’s Financial Performance

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Mar. 1 2018, Updated 8:53 a.m. ET

Financial performance

In fiscal 3Q18, the total revenues generated by Abaxis (ABAX) were $59.6 million compared to $52.7 million in fiscal 3Q17. During this period, the company’s cost of revenue grew at a higher rate, from $23.3 million in fiscal 3Q17 to $27.4 million in fiscal 3Q18.

The gross profit generated by Abaxis was $32.1 million in fiscal 3Q18 compared to $29.4 million in fiscal 3Q17.

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Operating expenses

The research and development expenses incurred by Abaxis in fiscal 3Q18 were $5.1 million compared to $4.7 million in fiscal 3Q17. Its general and administrative expenses grew at a similar pace, from $3.1 million in fiscal 3Q17 to $4.7 million in fiscal 3Q18.

Sales and marketing expenses incurred by Abaxis witnessed a significant increase from $10.6 million in fiscal 3Q17 to $13.6 million in fiscal 3Q18. As a result, the total operating expenses incurred by Abaxis grew ~30% from $18.5 million in fiscal 3Q17 to $23.5 million in fiscal 3Q18.

The company’s operating income decreased from $10.8 million in fiscal 3Q17 to $8.5 million in fiscal 3Q18.

Bottom line

In fiscal 3Q18, Abaxis’s income tax provision rose to $5.2 million from $3.9 million in fiscal 3Q17. This rise contributed to the company’s net income falling from $6.8 million in fiscal 3Q17 to $4.2 million in fiscal 3Q18.

This fall translated into Abaxis’s net income per share falling to $0.18 in fiscal 3Q18 from $0.30 in fiscal 3Q17.

Cash flows

Abaxis generated cash flow from operations of $37.1 million in the first three quarters of fiscal 2018 compared to $22.2 million in the first three quarters of fiscal 2017. This rise was mainly the result of lower inventory levels and an increase in accounts payable during the period.

Cash used by Abaxis in investing activities was $45 million in the first three quarters of fiscal 2018 compared to $13.8 million in the comparable period in fiscal 2017.

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