BASi sees revs and gross profits fall in Q3 but upbeat about prospects

BASi, preclinical, financial, job, cuts restructuring
Preclinical CRO Bioanalytical Systems (BASi) saw revenue, margins and gross profits fall during its fiscal third quarter but the firm is positive about the impact of recent restructuring efforts.

Revenue for the three months ended June 30 was $7.2m (€5.8m) down 14 per cent on the year-earlier period, while gross profit slipped around $700,000 to $2m. Similarly, gross margins shrank from 32.4 per cent to 28.7 per cent for the period.

BASi attributed the decline in revenues to a smaller contribution from its toxicity testing business and the ‘run off’ of bioanalytical projects that followed its decision to wind up operations at its facility in Kenilworth in the UK.

The firm also said that increased costs associated with other restructuring efforts it began earlier this year​ – which saw it reduce headcount and consolidate US lab operations at its HQ in West Lafayette, Indiana – had played a part in its performance in Q3.

But while the redundancy costs may have hurt, Interim CEO Jacqueline Lemke was confident the changes had positioned the company for growth.

This streamlining has permanently reduced our costs and improved capacity utilisation while allowing us to continue providing the high quality services and instruments our clients expects from BASI​.”

Lemke cited the increase in revenues and the improvement in margins relative to the prior quarter as support for this idea.

With these critical building blocks in place, I believe we can steadily improve the company's operating performance and restore revenue growth, and I am committed to making this happen​."

She added that: “While we expect fourth quarter revenue to be about equal to this year's third quarter, despite the absence of revenue from the UK facility, EBITDAR should increase sequentially in the fourth quarter versus the third as our costs continue to fall. 

We also are evaluating options to refinance the current mortgage debt on our balance sheet prior to its maturity in November​.”


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