CORPORATE PRESENTATION

Transcription

1 CORPORATE PRESENTATION Fourth Quarter Fiscal Year 2016 NASDAQ: ABAX

2 DISCLAIMER This corporate presentation includes statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the Reform Act ), including but not limited to statements related to Abaxis cash position, financial resources and potential for future growth, market acceptance and penetration of new or planned product offerings, and future recurring revenues and results of operations. Abaxis claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms may, believes, projects, expects, anticipates, or words of similar import, and do not reflect historical facts. Specific forward-looking statements contained in this presentation may be affected by risks and uncertainties, including, but not limited to, those related to risks related to the transition of its U.S. medical sales to Abbott, potential excess inventory levels and inventory imbalances at the company s distributors, losses or system failures with respect to Abaxis facilities or manufacturing operations, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results, dependence on sole suppliers, the market acceptance of Abaxis products and services, the continuing development of its products, required United States Food and Drug Administration clearance and other government approvals, risks associated with manufacturing and distributing its products on a commercial scale free of defects, risks related to the introduction of new instruments manufactured by third parties, risks associated with competing in the human diagnostic market, risks related to the protection of Abaxis intellectual property or claims of infringement of intellectual property asserted by third parties and risks related to condition of the United States economy and other risks detailed under Risk Factors in Abaxis annual report on Form 10-K for the fiscal year ended March 31, 2015 and Abaxis other periodic reports filed from time to time with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date the statements were made. Abaxis does not undertake and specifically disclaims any obligation to update any forward-looking statements. 2

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4 ABAXIS BLOOD DIAGNOSTICS Abaxis is a global leader in point-of-care blood diagnostics, serving both Animal Health and Human Health markets. Combining the best in on-site diagnostics, single-use rapid tests. The Piccolo menu features 31 blood chemistry tests. These 31 tests are conveniently configured into 17 completely self contained reagent discs,11 of which are CLIA waived. The VetScan blood chemistry test menu is configured into 10 reagent discs/panels. Second largest global point-of-care veterinary diagnostic company with approximately 33% share of clinics in North America 4

5 PERFORMANCE TO DATE Achieved profitability Expanded manufacturing capacity Expanded test menu CLIA waived status New expanding strategic markets Veterinary National Distribution National Account status with VCA -Antech May 2014 National Account with Banfield Pet Hospital May 2016 Abbott USA Medical Distribution CRO Pharmacy / Retail China 5

6 TOTAL COMPANY SALES Fiscal Year 2016 Revenue $219 Million 2016 Revenues by Product Category 2016 Revenues by Segment 5% 2% 20% Consumables 17% Veterinary Market Instruments Medical Market 75% Other 81% Other Data as of March 31,

7 ABAXIS POINT-OF-CARE MEDICAL DIAGNOSTICS 7

8 ABBOTT DISTRIBUTION AGREEMENT Abbott Distributes Piccolo Products In The Human Health Care Market Business partnership to market, sell and distribute Abaxis Piccolo Xpress and medical reagent discs starting January 2, Territory is limited to the U.S. Exclusive multi-year distribution agreement. Abaxis will keep certain segments including pharmacy and retail store clinics, shopping malls, pharma clinical trials, contract research organizations (CROs), cruise ship lines and one occupational health screening account. Abaxis will continue selling Piccolo products in Europe, Japan, China and the rest of the world. Abaxis will maintain technical support and regulatory services. Partnership with Abbott brings large market coverage and is more cost effective. Leverage i-stat relationship. 8

9 ABAXIS LABORATORY SUITE 9

10 DISTRIBUTION UPDATE MWI, Patterson, and Henry Schein to Distribute Abaxis Animal Health Products National distributors to market, sell and distribute Abaxis Animal Health products throughout the U.S.: MWI started January 2, 2013 Patterson Companies Inc. started October 1, 2014 Henry Schein started October 17, 2014 MWI, Patterson, and Henry Schein are the largest animal health distributors in the U.S. and added approximately 725 additional distributor reps to the field. These tier one distributors are providing Abaxis field representatives with significantly greater access to clinics and providing 100% penetration into the North American veterinary market. Abaxis now has 9 Animal Health Distributors with 900 distributor sales representatives providing 100% coverage of the veterinary market. 10

11 ANTECH PARTNERSHIP Co-marketing agreement entered in May 2014 was modified with the new distributor landscape Antech and Abaxis field personnel work together with distribution personnel to identify competitive accounts Antech and Abaxis provide bundled solutions with reference lab pricing, point-of-care savings, superior products and services to replace competitive offerings neither company could provide on its own Original co-marketing agreement can still be utilized if necessary Abaxis sold its AVRL reference lab business to Antech in March 2015 for $21MM. 11

12 LARGE NATIONAL ACCOUNT WINS VCA, Inc. May 2014 Largest Animal Hospital Chain in the US (based on revenues) VCA purchased VetScan chemistry instruments for the majority of their 600+ animal hospitals Currently 500+ VetScans in use National Account with Banfield Pet Hospital May 2016 Recently initiated installation of Abaxis HM5 hematology instruments in Banfield s 900+ animal hospitals 12

13 WORLDWIDE SALES OF IN-VITRO DIAGNOSTICS All Others 11% Histology/Cytology 2% Microbiology 8% Hematology/ Coagulation 11% Urinalysis Blood 2% Grouping/Typing 1% Clinical Chemistry 32% Immunoassay 33% Total Market = $15.4 Billion 13

14 COMPARED TO COMMERCIAL LABORATORIES Commercial Laboratories See Patient Prepare syringe/collect blood sample Label Tube Wait 20 minutes for blood clot to form Spin Sample for 10 minutes Separate sample from blood cells Label Transport Tube(s) Fill out necessary lab forms and package tubes for pick-up Wait up to 4 days for results While waiting, make best guess and begin temporary Medical treatment plan. Receive numerous phone calls from patient requesting lab results. Technician calls lab to request results. vs. Piccolo xpress 1. Add Sample 2. Insert Disc Receive lab results Review chart and Interpret lab results Call patient for 2 nd consultation to review results and establish medical treatment plan Keep record of lab work for accurate billing Problem with sample/lab Call patient for 2 nd appointment to redraw blood sample Start process over again Keep record of lab work to ensure accurate billing of inadequate sample 3. Read Results 14

15 ABAXIS VS COMPETITORS IDEXX vs. 100 ul of blood 14 test results 12.5 min 15

16 KEY SUCCESS FACTORS & GOALS 10% market share Market coverage Expense management Expanding menu Opening new markets Pharmacy / Retail & CRO China Expanding veterinary product line 16

17 AVAILABLE TESTS Test Total U.S. Test Volume 1995 (millions) Albumin 134 Glucose 359 Alkaline Phosphatase (ALP) 140 Phosphorous 116 ALT 61 Protein, Total 136 Amylase 23 Uric Acid 130 AST 117 Potassium 222 Bilirubin, Total & Direct 157 Carbon Dioxide 183 BUN 220 Sodium 212 Calcium 124 Creatine Kinase(CK) 44 Chloride 204 HDL 38 Cholesterol 206 Triglycerides 74 Creatinine 189 Magnesium 22 LDH 150 Lactate GGT 38 Total Tests Available from Abaxis 3,299 Total Clinical Chemistry Tests (US) 3,443 % of total (US) available from Abaxis 96% 17

18 CMS REIMBURSEMENT PANELS CLIA Waived (Blue) Not Waived (Red) 1. Basic Metabolic tco 2, Cre, Cl -,Ca, Glu, K +, BUN, Na +, egfr* 2. Comprehensive Metabolic Panel ALB, ALP, ALT, AST, T Bili, Ca ++, Cre, Cl -, Glu, K +, Na +, TP, BUN, CO 2 3. Electrolytes tco 2, Cl -, K +, Na + 4. Hepatic Function ALT, AST, ALP, ALB, TP, T Bili, D Bili 5. Lipid Total Chol, HDL, Trig, Chol/HDL*, VLDL*, nhdlc*, LDL* 6. Renal Function ALB, CA, CO 2, Cl -, Cre, Glu, Phos, K +, Na +, BUN, egfr* * calculated value 18

19 ADDITIONAL MEDICAL PANELS CLIA Waived (Blue) 1. Lipid Panel Plus ALT, AST, Chol, GLE, Chol/HDL, HDL, LDL, Trig, VLDL, nhdlc* 2. General Chemistry 13 ALB, ALP, ALT, AST, T Bili, Ca, CRE, GLU, UA, AMY, TP, BUN, GGT, egfr* 3. Liver Panel Plus ALB, ALP, ALT, AMY, AST, GGT, TBIL, TP 4. Kidney Check BUN, CRE, egfr* Not Waived (Red) 5. Basic Metabolic Plus tco2, Cl-, K +, BUN, CRE, Ca, GLU, Na +, Mg, LDH, egfr* 6. Metlyte 8 Cl-, K +, Na-, tco2, BUN, CK, CRE, GLU, egfr* 7. General Chemistry 6 ALT, AST, GGT, BUN, CRE, GLU, egfr* 8. Biochemistry Panel Plus ALB, ALP, ALT, AMY, AST, BUN, Ca, CRE, GGT, GLU, TP, UA, egfr*,crp [ Actual Sample Size Is Just Three Drops ] 9. Metlyte Plus CRP Cl, K, Na, tco2, BUN, CK, CRE, GLU, egfr*, CRP 10. MetLac12 ALB, BUN, Ca, Cl-, CRE, GLU, K +, LAC, Mg, Na-, Phos, tco2 11. AmLyte 13 ALB, ALT, AMY, AST, BUN, Ca, CK, CRE, CRP, egfr*, GLU, K +, Na +, TBIL (For International Use Only. Not for United States Use.) *calculated value 19

20 VETSCAN PROFILES 1. Avian/Reptilian Profile Plus ALB, AST, BA, CA, CK, GLOB, GLU, K+, NA+, PHOS, TP, UA 2. Canine Heartworm Antigen Test Kit including Canine Wellness Profile (1) ALB, ALP, ALT, BUN, CA, CHW, CRE, GLOB, GLU, PHOS, TBIL, TP 3. Comprehensive Diagnostic Profile ALB, ALP, ALT, AMY, BUN, CA, CRE, GLOB, GLU, K+, NA+, PHOS, TBIL, TP 4. Critical Care Plus ALT, BUN, CL-, CRE, GLU, K+, NA+, tco2 5. Equine Profile Plus ALB, AST, BUN, CA, CK, CRE, GGT, GLOB, GLU, K+, NA+, TBIL, tco2, TP 6. Kidney Profile Plus ALB, BUN, CA, CL-, CRE, GLU, K+, NA+, PHOS, tco2 7. Large Animal Profile ALB, ALP, AST, BUN, CA, CK, GGT, GLOB, MG, PHOS, TP 8. Mammalian Liver Profile ALB, ALP, ALT, BA, BUN, CHOL, GGT, TBIL 9. Prep Profile II ALP, ALT, BUN, CRE, GLU, TP 10. Thyroxine (T4) / Cholesterol Profile CHOL, T4 (1) The panel is offered only on our VetScan VS2. 20

21 TEST METHODS & ROTOR CONFIGURATIONS UNDER DEVELOPMENT Will Increase Sales & Market Share Single-Use Rapid tests Anaplasma Cleared Ehrlichia Cleared FeLV Cleared FIV Cleared Phenobarbital on the disc High sensitivity immunoassay performed on the disc Abaxis plans to spend an incremental $5MM on R&D in FY17 (vs. FY16) 21

22 RAPID TEST PREVALENCE MAPS 22

23 0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000 27,000 30,000 33,000 36,000 39, Q Chemistry Hematology Coagulation/Specialty & i-stat 62,355 INSTRUMENTS SHIPPED (RAZOR) (CUMULATIVE UNITS) 23

24 CHEMISTRY INSTRUMENT SALES (UNITS) 1,200 1, Vetscan Piccolo 24

25 CHEMISTRY INSTRUMENT SALES (UNITS) 1,800 1,600 1,400 1,200 1, Piccolo Vetscan 25

26 PICCOLO SALES BY QUARTER (UNITS) Medical Government 26

27 U.S. PICCOLO SALES BY MARKET SEGMENT (CUMULATIVE UNITS) 6,000 5,000 4,000 3,000 2,000 1,000 0 FY FY Mobile Clinics Urgent Care Hospitals GP/FP Oncology Internal Medicine Other Spec 27

28 ROTOR SALES & UTILIZATION GROWTH 2,750,000 2,500,000 2,250,000 2,000,000 1,750,000 1,500,000 1,250,000 1,000, , , ,000 0 Restructured U.S. Vet Distribution

29 ROTOR SALES BY QUARTER 2,750,000 2,500,000 2,250,000 2,000,000 1,750,000 1,500,000 1,250,000 1,000, , , , Vet Human 29

30 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000, QUARTERLY ROTOR UNITS 30

31 HUMAN ROTOR SALES BY QUARTER (UNITS) 950, , , , , , , , , , , , , , , , , ,000 50, Non-Military Military 31

32 MEDICAL MARKET SALES ($ in thousands) $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $7,119 $8,095 CAGR 21% as of March 31, 2016 $10,888 $17,455 $24,796 $24,176 $22,764 $29,146 $30,404 $31,643 $28,134 $35,364 $37,845 $5,000 $0 $3,

33 QUARTERLY SALES $60.0 $55.0 $50.0 $45.0 $40.0 (Millions of $) $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 CAGR 24% as of March 31, Note: Quarterly Sales for quarters in fiscal 2012 to fiscal 2015 include Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year

34 QUARTERLY GROSS MARGINS (%) The Move Note: Quarterly Gross Margins for quarters in fiscal 2012 to fiscal 2015 include Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year

35 ROTOR ASP VS. COST BY QUARTER Price $12.64 $ The move to Union City royalty expense ~ 20 cents per unit & Line B Margin: $9.17 or 72.5% Cost Quarter $

36 ROTOR COST SAVINGS $5.00 $4.50 $4.00 Rotor Cost $3.50 $3.00 $2.50 Goal is $2 Rotor $ Rotor Volume/Quarter [million] 36

37 CORPORATE STRATEGY Animal Health Focus is on expanding market share in North American from 33% of clinics to 50% Human Health Abbott in USA Abaxis Ex-USA except for carve out segments including pharmacy and retail store clinics, pharma clinical trials, CRO s, cruise ship lines International focus on the Animal Health and targeted Human Health markets. Abaxis will increase its international sales & marketing expense by $3MM in FY17 (vs. FY16) to expand infrastructure and facilitate growth. Direct Sales and Marketing in the UK with the acquisition of QCR in November

38 REVENUES, MANUFACTURING EXPENSES & OPERATING INCOME $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 -$5,000 4,435 5,053 6,493 7,249 7,093 7,378 7,554 7,476 7,598 6,783 8,038 8,211 7,416 8,700 8,473 10,176 10,327 11,523 12,280 12,748 13,242 13,635 12,063 13,818 14,273 17,413 17,444 19,798 20,358 21,037 22,018 22, ,066 1,225 1,450 2,290 2,180 1,041 1,583 1,520 3,469 2,811 2,932 3,665 3,120 3,520 4,070 22,931 25,192 25,690 26,738 24,572 27,688 26,964 26,338 29,625 30,262 31,005 33,665 34,953 35,277 35,906 37,540 36,003 40,025 37,850 42,718 42,014 44,258 49,802 49,951 1,197 1,275 1,289 1,429 1,432 1,906 1,769 1,928 1,891 1,964 1,931 1,981 1,798 1,993 1,992 2,133 2,130 2,231 2,264 2,339 2,388 2,551 2,363 2,484 2,561 2,741 2,852 3,063 3,174 3,262 3,440 3,677 3,572 3,776 4,001 4,099 4,020 4,270 3,820 3,956 4,027 4,607 4,316 4,456 4,233 4,840 4,609 5,156 4,851 4,989 4,561 4,483 4,116 4,353 4,756 4,017 4,814 4,767 4,198 5,724 4,986 5,423 4,642 5,949 5,394 5,834 5,295 3,198 5,183 4,637 6,439 5,103 4,793 20,666 7,691 8,986 5,185 5,319 6,057 5,811 43,169 45,851 40,810 42,040 47,477 53,943 59,502 55,873 53,090 55,975 52,876 56,960 Legal Settlement 4,636 5,699 4,623 5,659 5,600 5,373 5,586 5,841 7,439 8,927 9,156 6,928 10,625 12,169 11,255 12,305 6,157 6,498 6,617 6,696 6,860 7,281 7,045 7,166 Manufacturing Revenues Operating Income Note: The Revenues, Manufacturing Expenses and Operating Income for quarters in fiscal 2012 to fiscal 2015 include Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year

39 ANNUAL P & L SUMMARY $225,000 $218,901 ($ in thousands) $210,000 $195,000 $180,000 $165,000 $150,000 $135,000 $120,000 $105,000 $90,000 $75,000 $60,000 $45,000 $30,000 $15,000 $0 -$15,000 $13,451 $12,555 $2,948 $7,294 CAGR 24% as of March 31, 2016 ($618) ($6,549) ($4,650) ($4,162) ($6,743) $52,758 $46,874 $30,631 $34,780 $23,376 $29,773 $68,928 $86,221 $100,551 $105,562 $124,557 $143,676 $155,994 $180,878 $23,741 $20,775$22,649 $17,708$17,795 $114 $1,498 $1,573 $4,720 $7,096 $10,732 $14,375 $48,023 $162, Revenue Loss Oper. Income $24,228 $202,593 $34, $46, Note: The Revenues, Manufacturing Expenses and Operating Income for quarters in fiscal 2012 to fiscal 2015 excludes Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year

40 ANNUAL P & L SUMMARY: INCL. AVRL OPERATIONS DISCONTINUED IN MARCH 2015 ($ in thousands) $225,000 $210,000 $195,000 $180,000 $165,000 $150,000 $135,000 $120,000 $105,000 $90,000 $75,000 $60,000 $45,000 $30,000 $15,000 $0 -$15,000 $2,948 $7,294 $12,555 $13,451 $23,376 ($6,743) ($6,549) ($4,650) ($4,162) ($618) CAGR 24% as of March 31, 2016 $29,773 $30,631 $34,780 $114 $1,498 $1,573 $46,874 $52,758 $68,928 $86,221 $4,720 $7,096 $10,732 $14,375 $100,551 $105,562 $124,557 $143,676 $156,596 $186,025 $17,708 $17,795 $20,775 $22,472 $19,457 $42,136 $171, Revenue Loss Oper. Income AVRL Revenues $20,799 $216,795 $218,901 $32, $46, Note: The Revenues, Manufacturing Expenses and Operating Income for quarters in fiscal 2012 to fiscal 2015 include Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year

41 CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2016 Unaudited and in Thousands Current Assets: Cash & investments $ 129,797 Receivables, net 35,148 Inventories and other current assets 47,253 Total Current Assets 212,198 Long-Term Assets: Long-term investments 22,458 Investment in unconsolidated affiliate 2,705 Property and equipment, net 26,842 Other assets 7,177 TOTAL ASSETS $ 271,380 Total Current Liabilities: $ 29,172 Total Non-current Liabilities: 5,896 TOTAL LIABILITIES 35,068 Shareholders Equity: Common stock 127,016 Retained earnings 109,303 Accumulated other comprehensive loss (7) Total Shareholders Equity 236,312 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 271,

42 INCOME TAXES ($ in thousands) $17,000 $16,000 $15,000 $14,000 $13,000 $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 34% $2,514 35% $4,044 38% $6,076 37% $7,301 37% $7,053 39% $8,382 $9,034 $7,076 $14,930 $7,758 $16,187 $16, Note: Income Taxes for quarters in fiscal 2012 to fiscal 2015 include Abaxis veterinary reference laboratory services (AVRL), which was sold in the fourth quarter of fiscal year Effective Tax Rate (%) Provision for Income Tax ($) 38% 35% 35% 35% 37% 34% 42

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