x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934 for the quarterly period ended March 31, 2008
|
OR
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 for the transition period from ___________ to
_____________.
|
INDIANA
(State
or other jurisdiction of incorporation or
organization)
|
|
35-1345024
(I.R.S.
Employer Identification No.)
|
|
|
|
2701
KENT AVENUE
WEST
LAFAYETTE, INDIANA
(Address
of principal executive offices)
|
|
47906
(Zip
code)
|
|
|
Page
|
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1
|
Condensed
Consolidated Financial Statements (Unaudited):
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2008 and September
30,
2007
|
3
|
|
Condensed
Consolidated Statements of Operations for the Three and Six Months
Ended
March 31, 2008 and 2007
|
4
|
|
Condensed
Consolidated Statements of Cash Flows for the Six Months Ended
March 31,
2008 and 2007
|
5
|
|
Notes
to Condensed Consolidated Financial Statements
|
6
|
|
Item
2
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
|
10
|
Item
4T
|
Controls
and Procedures
|
17
|
PART
II
|
OTHER
INFORMATION
|
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
17
|
Item
6
|
Exhibits
|
18
|
Signatures
|
19
|
March 31,
2008
|
September 30,
2007
|
||||||
Assets
|
(Unaudited)
|
|
|||||
Current
assets:
|
|
||||||
Cash
and cash equivalents
|
$
|
465
|
$
|
2,837
|
|||
Accounts
receivable
|
|||||||
Trade
|
6,020
|
6,674
|
|||||
Unbilled
revenues and other
|
3,377
|
2,565
|
|||||
Inventories
|
2,130
|
1,977
|
|||||
Deferred
income taxes
|
897
|
897
|
|||||
Refundable
income taxes
|
243
|
774
|
|||||
Prepaid
expenses
|
1,058
|
776
|
|||||
Total
current assets
|
14,190
|
16,500
|
|||||
Property
and equipment, net
|
23,636
|
22,927
|
|||||
Goodwill
|
1,855
|
1,855
|
|||||
Intangible
assets, net
|
224
|
304
|
|||||
Debt
issue costs
|
200
|
211
|
|||||
Other
assets
|
242
|
240
|
|||||
Total
assets
|
$
|
40,347
|
$
|
42,037
|
|||
Liabilities
and shareholders’ equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
1,875
|
$
|
1,589
|
|||
Accrued
expenses
|
1,743
|
3,056
|
|||||
Customer
advances
|
4,199
|
4,115
|
|||||
Income
tax accruals
|
240
|
56
|
|||||
Revolving
line of credit
|
1,915
|
—
|
|||||
Current
portion of capital lease obligation
|
670
|
510
|
|||||
Current
portion of long-term debt
|
475
|
4,821
|
|||||
Total
current liabilities
|
11,117
|
14,147
|
|||||
Capital
lease obligation, less current portion
|
1,516
|
1,138
|
|||||
Long-term
debt, less current portion
|
8,964
|
7,861
|
|||||
Deferred
income taxes
|
337
|
337
|
|||||
Shareholders’
equity:
|
|||||||
Preferred
Shares:
|
|||||||
Authorized
1,000 shares; none issued and outstanding
|
—
|
—
|
|||||
Common
shares, no par value:
|
|||||||
Authorized
19,000 shares; issued and outstanding 4,914 at March 31, 2008 and
4,909 at
September 30, 2007
|
1,191
|
1,189
|
|||||
Additional
paid-in capital
|
12,195
|
11,957
|
|||||
Retained
earnings
|
5,224
|
5,560
|
|||||
Accumulated
other comprehensive loss
|
(197
|
)
|
(152
|
)
|
|||
Total
shareholders’ equity
|
18,413
|
18,554
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
40,347
|
$
|
42,037
|
Three Months Ended
March 31,
|
Six Months Ended
March 31,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Service
revenue
|
$
|
9,280
|
$
|
8,726
|
$
|
18,202
|
$
|
17,334
|
|||||
Product
revenue
|
1,751
|
2,585
|
4,281
|
4,861
|
|||||||||
Total
revenue
|
11,031
|
11,311
|
22,483
|
22,195
|
|||||||||
Cost
of service revenue
|
6,931
|
6,968
|
13,844
|
13,585
|
|||||||||
Cost
of product revenue
|
680
|
1,163
|
1,714
|
2,040
|
|||||||||
Total
cost of revenue
|
7,611
|
8,131
|
15,558
|
15,625
|
|||||||||
Gross
profit
|
3,420
|
3,180
|
6,925
|
6,570
|
|||||||||
Operating
expenses:
|
|||||||||||||
Selling
|
874
|
673
|
1,666
|
1,352
|
|||||||||
Research
and development
|
183
|
101
|
371
|
456
|
|||||||||
General
and administrative
|
2,250
|
1,858
|
4,502
|
3,497
|
|||||||||
(Gain)
loss on sale of property and equipment
|
2
|
95
|
(11
|
)
|
83
|
||||||||
Total
operating expenses
|
3,309
|
2,727
|
6,528
|
5,388
|
|||||||||
Operating
income
|
111
|
453
|
397
|
1,182
|
|||||||||
Interest
income
|
2
|
12
|
29
|
24
|
|||||||||
Interest
expense
|
(203
|
)
|
(230
|
)
|
(451
|
)
|
(471
|
)
|
|||||
Other
income
|
1
|
—
|
4
|
3
|
|||||||||
Income
(loss) before income taxes
|
(89
|
)
|
235
|
(21
|
)
|
738
|
|||||||
Income
taxes
|
47
|
111
|
131
|
58
|
|||||||||
Net
income (loss)
|
$
|
(136
|
)
|
$
|
124
|
$
|
(152
|
)
|
$
|
680
|
|||
Net
income (loss) per share:
|
|||||||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
0.03
|
$
|
(0.03
|
)
|
$
|
0.14
|
|||
Diluted
|
$
|
(0.03
|
)
|
$
|
0.03
|
$
|
(0.03
|
)
|
$
|
0.14
|
|||
Weighted
common and common equivalent shares outstanding:
|
|||||||||||||
Basic
|
4,912
|
4,909
|
4,914
|
4,907
|
|||||||||
Diluted
|
4,912
|
4,940
|
4,914
|
4,924
|
Six Months Ended March 31,
|
|||||||
2008
|
2007
|
||||||
Operating
activities:
|
|||||||
Net
income (loss)
|
$
|
(152
|
)
|
$
|
680
|
||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
1,503
|
1,767
|
|||||
Employee
stock compensation expense
|
226
|
93
|
|||||
Bad
debt expense
|
20
|
—
|
|||||
(Gain)
loss on sale of property and equipment
|
(11
|
)
|
83
|
||||
Deferred
income taxes
|
—
|
(120
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(178
|
)
|
(433
|
)
|
|||
Inventories
|
(153
|
)
|
(86
|
)
|
|||
Refundable
income taxes
|
531
|
(51
|
)
|
||||
Assets
held for resale
|
—
|
(653
|
)
|
||||
Prepaid
expenses and other assets
|
(262
|
)
|
(98
|
)
|
|||
Accounts
payable
|
286
|
(73
|
)
|
||||
Accrued
expenses
|
(1,313
|
)
|
(442
|
)
|
|||
Customer
advances
|
84
|
(310
|
)
|
||||
Net
cash provided by operating activities
|
581
|
357
|
|||||
Investing
activities:
|
|||||||
Capital
expenditures, net of disposals
|
(1,323
|
)
|
290
|
||||
Proceeds
from sale of property and equipment
|
2
|
—
|
|||||
Net
cash (used) provided by investing activities
|
(1,321
|
)
|
290
|
||||
Financing
activities:
|
|||||||
Payments
of long-term debt
|
(4,642
|
)
|
(539
|
)
|
|||
Borrowings
on long-term debt
|
1,400
|
—
|
|||||
Payments
on revolving line of credit
|
(3,669
|
)
|
—
|
||||
Borrowings
on revolving line of credit
|
5,584
|
—
|
|||||
Payments
on capital lease obligations
|
(289
|
)
|
(231
|
)
|
|||
Net
proceeds from the exercise of stock options
|
13
|
79
|
|||||
Net
cash used by financing activities
|
(1,603
|
)
|
(691
|
)
|
|||
Effect
of exchange rate changes
|
(29
|
)
|
(188
|
)
|
|||
Net
decrease in cash and cash equivalents
|
(2,372
|
)
|
(232
|
)
|
|||
Cash
and cash equivalents at beginning of year
|
2,837
|
1,647
|
|||||
Cash
and cash equivalents at end of quarter
|
$
|
465
|
$
|
1,415
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Basic
net income/(loss) per share:
|
|||||||||||||
Net
income/(loss) applicable to common shareholders
|
$
|
(136
|
)
|
$
|
124
|
$
|
(152
|
)
|
$
|
680
|
|||
Weighted
average common shares outstanding
|
4,912
|
4,909
|
4,914
|
4,907
|
|||||||||
Basic
net income/(loss) per share
|
$
|
(0.03
|
)
|
$
|
0.03
|
$
|
(0.03
|
)
|
$
|
0.14
|
|||
Diluted
net income/(loss) per share:
|
|||||||||||||
Diluted
net income/(loss) applicable to common shareholders
|
$
|
(136
|
)
|
$
|
124
|
$
|
(152
|
)
|
$
|
680
|
|||
Weighted
average common shares outstanding
|
4,912
|
4,909
|
4,914
|
4,907
|
|||||||||
Dilutive
stock options/shares
|
—
|
31
|
—
|
17
|
|||||||||
Dilutive
weighted average common shares outstanding
|
4,912
|
4,940
|
4,914
|
4,924
|
|||||||||
Diluted
net income/(loss) per share
|
$
|
(0.03
|
)
|
$
|
0.03
|
$
|
(0.03
|
)
|
$
|
0.14
|
March 31,
2008
|
September 30,
2007
|
||||||
Raw
materials
|
$
|
1,568
|
$
|
1,480
|
|||
Work
in progress
|
272
|
273
|
|||||
Finished
goods
|
290
|
224
|
|||||
$
|
2,130
|
$
|
1,977
|
Three Months Ended
March 31,
|
Six Months Ended
March 31,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Revenue:
|
|||||||||||||
Service
|
$
|
9,280
|
$
|
8,726
|
$
|
18,202
|
$
|
17,334
|
|||||
Product
|
1,751
|
2,585
|
4,281
|
4,861
|
|||||||||
$
|
11,031
|
$
|
11,311
|
$
|
22,483
|
$
|
22,195
|
||||||
Operating
Income (Loss):
|
|||||||||||||
Service
|
$
|
8
|
$
|
278
|
$
|
(47
|
)
|
$
|
736
|
||||
Product
|
103
|
175
|
444
|
446
|
|||||||||
$
|
111
|
$
|
453
|
$
|
397
|
$
|
1,182
|
||||||
Total
Assets:
|
|||||||||||||
Service
|
$
|
24,870
|
$
|
24,676
|
$
|
24,870
|
$
|
24,676
|
|||||
Product
|
9,432
|
9,373
|
9,432
|
9,373
|
|||||||||
Corporate
|
6,045
|
7,530
|
6,045
|
7,530
|
|||||||||
$
|
40,347
|
$
|
41,579
|
$
|
40,347
|
$
|
41,579
|
Tax
Jurisdiction
|
Years
|
|||
US
Federal and State
|
2003-2007
|
|||
United
Kingdom
|
2001-2007
|
|
•
|
Risk-free
interest rate.
The risk-free interest rate is based on U.S. Treasury yields in
effect at the time of grant for the expected term of the option.
|
|
||
|
•
|
Expected
volatility.
We
use our historical stock price volatility of our common shares to
compute
our expected volatility.
|
|
||
|
•
|
Expected
term.
The expected term represents the weighted-average period the stock
options
are expected to remain outstanding. The expected term is determined
based
on historical exercise behavior, post-vesting termination patterns,
options outstanding and future expected exercise behavior.
|
|
||
|
•
|
Expected
dividends.
We
assumed that we will pay no
dividends.
|
Three Months Ended
March 31,
|
Six Months Ended
March 31,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Service
revenue
|
84.1
|
%
|
77.1
|
%
|
81.0
|
%
|
78.1
|
%
|
|||||
Product
revenue
|
15.9
|
22.9
|
19.0
|
21.9
|
|||||||||
Total
revenue
|
100.0
|
100.0
|
100.0
|
100.0
|
|||||||||
Cost
of service revenue (a)
|
74.7
|
79.8
|
76.1
|
78.4
|
|||||||||
Cost
of product revenue (a)
|
38.8
|
45.0
|
40.0
|
42.0
|
|||||||||
Total
cost of revenue
|
69.0
|
71.9
|
69.2
|
70.4
|
|||||||||
Gross
profit
|
31.0
|
28.1
|
30.8
|
29.6
|
|||||||||
Total
operating expenses
|
30.0
|
24.1
|
29.0
|
24.3
|
|||||||||
Operating
income
|
1.0
|
4.0
|
1.8
|
5.3
|
|||||||||
Other
expense
|
1.8
|
1.9
|
1.9
|
2.0
|
|||||||||
Income
before income taxes
|
(0.8
|
)
|
2.1
|
(0.1
|
)
|
3.3
|
|||||||
Income
tax provision
|
0.4
|
1.0
|
0.6
|
0.2
|
|||||||||
Net
income (loss)
|
(1.2
|
)
|
1.1
|
(0.7
|
)
|
3.1
|
Votes For
|
Votes
Against
|
Votes
Abstaining
|
||||||||
1)
Proposal for Re-election of all five directors of BASi to serve for
a
one-year term:
|
||||||||||
William
E. Baitinger
|
3,011,432
|
1,730,605
|
172,222
|
|||||||
Larry
S. Boulet
|
4,512,216
|
229,821
|
172,222
|
|||||||
David
W. Crabb
|
2,951,424
|
1,790,613
|
172,222
|
|||||||
Leslie
B. Daniels
|
3,038,239
|
1,703,798
|
172,222
|
|||||||
Richard
M. Shepperd
|
3,725,030
|
1,017,007
|
172,222
|
|||||||
2)
Proposal for the grant of non-qualified stock options to Richard
M.
Shepperd
|
3,072,664
|
429,941
|
22,396
|
|||||||
3)
Proposal for the grant of non-qualified stock options to Michael
R.
Cox
|
1,264,245
|
2,238,182
|
22,574
|
|||||||
4)
Proposal for the grant of non-qualified stock options to Edward M.
Chait
|
1,248,754
|
2,254,350
|
21,897
|
|||||||
5)
Proposal for the adoption of the 2008 Stock Option Plan
|
1,817,588
|
1,686,311
|
21,102
|
Number
|
Description
of Exhibits
|
||
(3)
|
3.1
|
Second
Amended and Restated Articles of Incorporation of Bioanalytical Systems,
Inc. (incorporated by reference to Exhibit 3.1 to Form 10-Q for the
quarter ended December 31, 1997).
|
|
3.2
|
Second
Amended and Restated Bylaws of Bioanalytical Systems, Inc., as
subsequently amended (incorporated by reference to Exhibit 3.2 to
Form
10-Q for the quarter ended March 31, 2007).
|
||
(4)
|
4.1
|
Specimen
Certificate for Common Shares (incorporated by reference to Exhibit
4.1 to
Registration Statement on Form S-1, Registration No. 333-36429).
|
|
(10)
|
10.1
|
Option
Agreement by and among Bioanalytical Systems, Inc. and Richard M.
Shepperd, entered into on May 18, 2007 (incorporated by reference
to
Exhibit 10.2 to Form 10-Q for the fiscal quarter ended June 30, 2007).
|
|
10.2
|
Bioanalytical
Systems, Inc. 2008 Director and Employee Stock Option Plan (incorporated
by reference to Appendix A to the Revised Definitive Proxy Statement
filed
February 5, 2008, SEC File No. 000-23357).
|
||
(31)
|
31.1
|
Certification
of Richard M. Shepperd (filed herewith).
|
|
31.2
|
Certification
of Michael R. Cox (filed herewith).
|
||
(32)
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
|
32.2
|
Certification
of Executive Vice President, Chief Financial Officer pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
BIOANALYTICAL
SYSTEMS, INC.
(Registrant)
|
|
Date: May
15, 2008
|
By: /s/ Richard
M. Shepperd
|
Richard
M. Shepperd
President
and Chief Executive Officer
|
|
Date: May
15, 2008
|
By: /s/ Michael
R. Cox
|
Michael
R. Cox
Vice
President, Finance and Administration, Chief Financial Officer and
Treasurer
|