WEST LAFAYETTE, Ind.—Bioanalytical Systems, Inc. announcedyesterday the closing of their registered public offering of $5.5 million ofunits, consisting of 6 percent Series A Convertible Preferred Shares andWarrants to purchase common shares. Bioanalytical Systems had originallyoffered $5 million in units, but subsequently expanded the offer as a result ofinvestor demand.
Estimated net proceeds, following the payment of placementagent fees and other offering expenses, were about $4.7 million. At the closingof the offering, Bioanalytical Systems issued 5,506 shares of Series AConvertible Preferred Shares convertible into a total of 2,753,000 commonshares, Class A Warrants to purchase a total of 1,376,500 common shares andClass B Warrants to purchase a total of 1,376,500 common shares.
The Series A Shares, for three years from the date ofissuance, will have a dividend of 6 percent per annum, which is payablequarterly in cash or, pursuant to certain conditions, in common shares, or acombination of cash and common shares. The Series A Shares can be converted atany time by the holder into shares of Bioanalytical Systems common stock at theprice of $2 per share. The Class A Warrants can be exercised immediately aftertheir issuance at $2 per share, and they expire five years after the date ofissuance. The Class B Warrants are also exercisable directly following the dateof issuance at $2 per share, and they expire a year after issuance.
"The offering strengthens ourbalance sheet and positions the Company to continue aggressively pursuing ourgrowth plan," says Anthony Chilton, President and Chief ExecutiveOfficer of Bioanalytical Systems. "We are pleased bywhat we have accomplished so far, and look forward to continued success in theyears ahead."
The proceeds netted from the offering will be used topurchase laboratory equipment and for working capital as well as generalcorporate purposes.
Ladenburg Thalmann & Co. Inc. acted as BioanalyticalSystems' exclusive placement agent for the offering.
Second quarter includes revenue increase for BioanalyticalSystems
In tandem with the closing of its public offering,Bioanalytical Systems posted its earnings and results for the second quarter,reporting revenue of $8.4 million, a 21 percent increase from $6.9 million inthe second quarter of fiscal 2010. Service revenue saw a 23 percent increase to$6.4 million, and products revenue rose 17 percent to $2 million. Net incomefor the quarter was $483,000, which compares to a net loss for the same quarterin fiscal 2010 of $1,212,000. Anthony Chilton, President and Chief ExecutiveOfficer of Bioanalytical Systems, calls the results "compelling evidence thatwe have the right strategy for growth and are implementing our planeffectively."
"The increase in revenue reflects the success of our effortsto build business with existing clients and expand our client base, as weleverage BASi's well-established reputation for providing innovative, highquality services and products that increase efficiency and reduce the cost oftaking a new drug to market," says Chilton.
The first six months of fiscal 2011 saw revenue increase 24percent to $16.5 million, and service revenue rose 25 percent to $12.6 millionwhile products revenue posted a 21 percent increase to $3.9 million. Net incomefor the first six months was $793,000, which compares to a net loss for thesame period in 2010 of $2.7 million.
"Also encouraging is the improvement in gross margin, whichincreased to 33 percent for this year's first half compared to just 20 percentfor the prior year, reflecting the beneficial impact of higher revenue onlaboratory utilization and operating efficiency, as well as the company-widecost control initiatives we introduced a year ago," Chilton adds. "In additionto their contribution to the improvement in gross margin, our cost controlinitiatives drove a 23 percent reduction in general and administrative expensesfor this year's first six months versus the same period last year."
