DALLAS, March 9, 2000 (PRIMEZONE) -- ABATIX CORP. (Nasdaq:ABIX) today reported revenue of $44,230,000 and net earnings of $461,000 or $.26 per share for 1999. The 18% growth in revenue from 1998 of $37,328,000 is primarily attributable to the acquisition of North State Supply Co. of Phoenix in June 1999 and the January 1999 acquisition of Keliher Hardware Co. The increase in revenue that results from the acquisitions is partially offset by the decline in revenue derived from customers in oil related industries. The 1999 net earnings represents a 60% decline over 1998 net earnings of $1,167,000 or $.60 per share. The decrease in net earnings is due to a 1% decline in margins combined with higher general and administrative costs and increased interest expense. The lower margins are a result of a change in the mix of products being sold primarily as a result of the acquisitions. Larger facilities in several locations to accommodate growth including higher per square foot rental rates and costs associated with our efforts to further improve customer service contributed to the higher general and administrative expenses. In addition to the higher prime rate, the borrowings used to finance the acquisition of North State resulted in higher interest expense.
Additionally, Mr. Daniel Birnley joined the Board of Directors this month to fill the vacancy from the resignation of Mr. Lamont Laue. Mr. Laue resigned from the Board on January 31, 2000 due to personal reasons. Mr. Birnley has over twenty years of experience in the construction tool supply industry and will also serve on the Audit Committee. Previously, Mr. Birnley was owner of North State.
Mr. Terry W. Shaver, President, stated "The decline in net earnings is disappointing. However, we are committed to achieving our long-term revenue and profitability goals through product expansion and diversification of our customer base. We plan to focus on improving our infrastructure, including reducing costs, before pursuing any further acquisitions. Now that we have completed the integration of the two acquisitions, we will devote this year to expanding the acquired product lines in to our other facilities."
Mr. Shaver concluded, "We are in the development stages of a business-to-business e-commerce solution to complement our web site. We should begin testing this solution by the end of the second quarter of 2000 using a limited number of products with a subset of current customers. This e-commerce solution will allow exposure to new markets as well as provide our existing customer base with an alternative avenue to reach us, which should only strengthen our relationship with them."
Except for the historical information contained herein, the matters set forth in this release are forward looking and involve a number of risks and uncertainties. Factors that could cause actual results to differ materially are the following: federal funding of environmental related projects, general economic and commercial real estate conditions in the local markets, changes in interest rates, inability to pass on price increases to customers, unavailability of products and strong competition. Furthermore, increases in oil prices or shortages in oil supply could significantly impact the Company's petroleum based products and its ability to supply those products at a reasonable price. In addition, lack of acceptance of our proposed e-commerce solution could cause actual results to differ materially.
ABATIX CORP. is a full line supplier to the construction tool, industrial safety, hazardous materials, and asbestos abatement industries. The Company currently has distribution centers serving Dallas and Houston, Texas, San Francisco and Los Angeles, California, Phoenix, Arizona, Seattle, Washington and Las Vegas, Nevada. These distribution centers serve customers throughout the Southwest, Midwest, Pacific Coast, Alaska and Hawaii.
ABATIX CORP.
SELECTED FINANCIAL INFORMATION
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ----------------------
1999 1998 1999 1998
------------ ---------- ----------- -----------
Net sales $11,272,208 $9,056,645 $44,229,758 $37,327,629
Cost of sales 8,448,574 6,489,067 32,358,985 26,846,279
------------ ---------- ----------- -----------
Gross profit 2,823,634 2,567,578 11,870,773 10,481,350
Selling, general and
administrative
expenses 2,812,283 2,008,789 10,737,007 8,373,030
------------ ---------- ----------- -----------
Operating profit 11,351 558,789 1,133,766 2,108,320
Other expense, net 124,937 46,898 373,847 220,482
------------ ---------- ----------- -----------
Earnings (Loss)
before income taxes (113,586) 511,891 759,919 1,887,838
Income tax expense
(benefit) (56,423) 194,824 298,461 720,429
------------ ---------- ----------- -----------
Net earnings (loss) $ (57,163) $ 317,067 $ 461,458 $ 1,167,409
============ ========== =========== ===========
Basic earnings
(loss) per share $ (.03) $ .16 $ .26 $ .60
============ ========== =========== ===========
Diluted earnings
(loss) per share $ (.03) $ .16 $ .26 $ .60
============ ========== =========== ===========
Weighted average
shares outstanding:
Basic 1,721,915 1,922,385 1,779,029 1,933,769
============ ========== =========== ===========
Diluted 1,721,915 1,922,385 1,779,029 1,933,769
============ ========== =========== ===========
As of
-----------------------------------
December 31, December 31,
1999 1998
---------------- -----------------
Current assets $ 13,220,493 $ 9,918,389
Total assets $ 15,119,525 $ 10,595,505
Current liabilities $ 9,086,111 $ 4,408,349
Total stockholders' equity $ 6,033,414 $ 6,187,156
CONTACT: Frank Cinatl
(888) ABATIX-X (222-8499)
fcinatl@abatix.com