January 30, 2015
Third-quarter revenue and profit skyrocketed at Abaxis Inc. as the maker of point-of-care blood analyzers continued moving from direct sales to a distributor network.
The Union City, Calif., company, which serves the veterinary and human medicine markets, on Thursday reported revenue of $59.5 million in the third quarter ending Dec. 31, 2014. The figure, a record, was a 46 percent spike over the same period in 2013.
Gross profit jumped by 51 percent, to $29.2 million.
About three-fourths of Abaxis’ business is in the veterinary arena.
President and CEO Clint Severson praised the company’s distributors. Henry Schein Animal Health and Patterson Veterinary Supply began selling Abaxis products in the third quarter.
“Our distribution partners are doing a great job of broadly embedding our leading-edge products and technologies within the medical and veterinary communities,” Severson said.
The company is growing in other ways. Its acquisition of QCR & Trio Diagnostics Ltd., a United Kingdom-based distributor, became official in November 2014. Earlier in the year, the VCA Animal Hospitals chain agreed to stock Abaxis’ VetScan VS2 chemistry analyzers and diagnostic reagent discs.
Most of the financial achievements were homegrown, company spokeswoman Valerie Goodwin-Adams said.
“The success comes from the North American market,” Goodwin-Adams said. “Having Tier 1 distribution has changed our landscape dramatically and increased our sales dramatically.”
An outbreak of Ebola virus, primarily in Africa, boosted sales of Piccolo Xpress, a portable chemistry system designed for on-site patient testing, she added.
For the nine months ending Dec. 31, revenue totaled $160.9 million, up from $129.8 million in the same period of 2013. Net income was $16 million, compared to $10.4 million.
As Abaxis looks to distributors to grow sales and help improve its bottom line, a larger competitor, Idexx Laboratories Inc., has cast aside wholesalers. The Westbrook, Maine, company in late October completed its move to direct ordering in the United States, shedding Henry Schein and Patterson, among others.
Idexx chairman and CEO Jonathan Ayers, in unveiling the strategic change last year, called it “a natural evolution of our business model.”
The company today reported fourth-quarter revenue of $352 million, a dip from $354 million in the same period of 2013. Net income fell from $43.2 million to $25.9 million.
For the year, revenue jumped from $1.38 billion to $1.49 billion. Net income dropped from $187.8 million to $181.9 million.
A stronger U.S. dollar depressed overseas revenue slightly, and the company reported a one-time $25 million reduction in U.S. channel inventory because of the move to direct sales.
Nevertheless, “We are very pleased with the market and financial performance we achieved in the quarter,” Ayers said.
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