Bioanalytical Systems Inc. Reports Operating Results (10-Q)
Bioanalytical Systems Inc. is a contract research organization providing research and development resources to many of the leading pharmaceutical medical device and biotechnology companies in the world. The company offers an efficient variable-cost alternative to its clients\' internal product development compliance and quality control programs. The company provides a broad array of value-added services and products focused on chemical analysis allowing its clients to perform their research and development functions either ``in-house`` or at the company. Bioanalytical Systems Inc. has a market cap of $4.5 million; its shares were traded at around $0.9 with and P/S ratio of 0.1. Highlight of Business Operations:Goodwill and other indefinite lived intangible assets, collectively referred to as "indefinite lived assets,” are tested annually for impairment, and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset\'s fair value. In our third quarter ended June 30, 2009, we recorded a $472 impairment loss equal to the total value of the UK goodwill because of fiscal year 2009 operating losses and lowered expectations for the near future. At June 30, 2009, remaining recorded goodwill was $1,383, and the net balance of other intangible assets was $121.
Our Service revenue decreased 32.6% to $6,113 in the current quarter compared to $9,068 for the comparable prior year period primarily as a result of decreases in bioanalytical analysis and toxicology services. Our bioanalytical analysis revenues decreased $2,016, a 37.5% decrease from the third quarter of fiscal 2008, mainly due to study delays by clients and decreases in new bookings. Our West Lafayette facility experienced the majority of the decline in bioanalytical analysis revenues, or $1,527. Toxicology revenues decreased $954 or 31.9% over the prior year period. Study delays and cancellations contributed to the decline for the toxicology group as well. The pharmaceutical analysis group increased year over year by 15.4%, or $69.
Sales in our Products segment decreased from $2,379 in the third quarter of fiscal 2008 to $2,008 for the same period in fiscal 2009. The 15.6% decrease stems from the decline in sales of our Culex automated in vivo sampling systems of $280 or 22.1%, as well as a decline in sales of our more mature analytical products of $194 or 20.7% from the same period last year.
Our Service revenue decreased 32.1% to $17,423 in the first nine months of fiscal 2009 compared to $25,653 for the prior year period primarily as a result of decreases in bioanalytical analysis and toxicology revenues. Our bioanalytical analysis revenues decreased $4,110, a 28.7% decrease from the same period in fiscal 2008, due to study delays by clients and decreases in new bookings for services. Toxicology revenues decreased $3,207, or 36.7%, over the prior year period. Study delays, cancellations and a decline in new orders contributed to the decline in revenues as our customers react to the global recession. Though our revenues have declined versus prior year, the third fiscal quarter was encouraging with the highest revenues for any fiscal quarter this year.
Sales in our Products segment decreased 12.3% from $6,660 to $5,841 when compared to the same period in the prior year. The majority of the decrease stems from sales of our Culex automated in vivo sampling system, which declined $1,034, or 28.3%.
Other expense for the first nine months of fiscal 2009 increased to $867 from $668 for the same period of the prior year. The primary reasons for the increase are a $110 net non-cash charge on our interest rate swaps due to the decline in short term interest rates and interest on capital leases added in the third quarter of fiscal 2008.
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