x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 for the fiscal year ended September 30, 2007.
|
OR
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 for the transition period from ___________ to
_____________.
|
INDIANA
|
35-1345024
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
2701
KENT AVENUE
WEST
LAFAYETTE, INDIANA
|
47906
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
Page
|
||
PART
I
|
|
|
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
12
|
Item
1B.
|
Unresolved
Staff Comments
|
17
|
Item
2.
|
Properties
|
17
|
Item
3.
|
Legal
Proceedings
|
18
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
PART
II
|
|
|
Item
5.
|
Market
for Registrant's Common Equity and Related Stockholder
Matters
|
18
|
Item
6.
|
Selected
Financial Data
|
21
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
22
|
Item
7A.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
30
|
Item
8.
|
Financial
Statements
|
31
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
53
|
Item
9A.
|
Controls
and Procedures
|
54
|
Item
9B.
|
Other
Information
|
54
|
PART
III
|
|
|
Item
10.
|
Directors
and Executive Officers of the Registrant
|
54
|
Item
11.
|
Executive
Compensation
|
55
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management
|
55
|
Item
13.
|
Certain
Relationships and Related Transactions
|
56
|
Item
14.
|
Principal
Accounting Fees and Services
|
56
|
PART
IV
|
|
|
Item
15.
|
Exhibits
and Financial Statement Schedules
|
57
|
· |
Product
Characterization, Method Development and
Validation:
Analytical
methods primarily performed in West Lafayette, Indiana determine
potency,
purity, chemical composition, structure and physical properties of
a
compound. Methods are validated to ensure that data generated are
accurate, precise, reproducible and reliable and are used consistently
throughout the drug development process and in later product
support.
|
· |
Bioanalytical
Testing:
We
analyze specimens from preclinical and clinical trials to measure
drug and
metabolite concentrations in complex biological matrices. Bioanalysis
is
performed at our facilities in Indiana, Oregon and the United Kingdom
(“UK”).
|
· |
Stability
Testing:
We
test stability of drug substances and formulated drug products and
maintain secure storage facilities in West Lafayette, Indiana necessary
to
establish and confirm product purity, potency and shelf life. We
have
multiple International Conference on Harmonization validated controlled
climate GMP (Good Manufacturing Practices) systems in
place.
|
· |
In
Vivo Pharmacology:
We
provide preclinical in
vivo sampling
services for the continuous monitoring of chemical changes in life,
in
particular, how a drug enters, travels through, and is metabolized
in
living systems. Most services are performed in customized facilities
in
Evansville, Indiana and West Lafayette, Indiana using our robotic
Culex®
APS (Automated Pharmacology System)
system.
|
· |
Preclinical
and Pathology Services:
We
provide pharmacokinetic and safety testing in studies ranging from
acute
safety monitoring of drugs and medical devices to chronic, multi-year
oncogenicity studies in our Evansville, Indiana site. Depending on
protocol, multiple tissues may be collected to monitor pathological
changes.
|
· |
Phase
I:
We
perform Phase I human clinical trials in our 110-bed clinic in Baltimore.
These are principally bioavailability, bioequivalence and first-in-human
studies, both for generic drug and innovator pharmaceutical
firms.
|
· |
Robotic
sampling systems and accessories (including disposables, training,
systems
qualification)
|
· |
In
vivo microdialysis
collection systems
|
· |
Physiology
monitoring tools
|
· |
Liquid
chromatography and electrochemistry instruments
platforms
|
· |
The
Culex®
APS
robotic automated pharmacology system is used by pharmaceutical
researchers to monitor drug concentrations and response as a function
of
time. Compared to current manual methods, the Culex® offers greater than
80% reduction in test model use and comparable reduction in labor.
The
Culex® also offers computer-controlled blood sampling protocol, behavioral
monitoring, flexibility to collect other biological samples, exceptional
cost savings, significant reduction in model stress and expeditious
data
delivery.
|
· |
Bioanalytical
separation systems
(liquid chromatography) are used to detect and quantify low concentrations
of substances by tracking complex chemical, physiological and behavioral
effects in biological fluids and tissues from humans and laboratory
animal
models.
|
· |
Specialized
chemical analyzers
monitor trace levels of organic chemicals, such as neurotransmitters,
in
biological samples using core electrochemistry, liquid chromatography
and
enzymology technologies to separate and quantify drugs, xenobiotics,
metabolites and other chemicals in blood, cerebrospinal fluid and
other
biological media.
|
· |
epsilon™
is
a single liquid chromatography and electrochemistry instrument control
platform for the separation systems and chemical analyzers noted
above.
|
· |
A
line of miniaturized in
vivo sampling
devices
sold to drug developers and medical research centers, assist in the
study
of a number of medical conditions including stroke, depression,
Alzheimer's and Parkinson's diseases, diabetes and
osteoporosis.
|
· |
Vetronics
small animal diagnostic electro-cardiogram and vital signs monitors
are
used primarily in veterinary
clinics.
|
· |
Covance, Inc.;
|
· |
Pharmaceutical Product Development,
Inc.;
|
· |
Charles River Laboratories, Inc.;
and
|
· |
MDS Health Group Ltd.
|
· |
regulatory compliance record;
|
· |
quality system;
|
· |
previous experience;
|
· |
medical and scientific expertise in specific therapeutic
areas;
|
· |
scientist-to-scientist
relationships;
|
· |
quality of contract research;
|
· |
financial viability;
|
· |
database management;
|
· |
statistical and regulatory
services;
|
· |
ability to recruit investigators;
|
· |
ability to integrate information technology with systems to optimize
research efficiency;
|
· |
an international presence with strategically located facilities;
and
|
· |
price.
|
· |
Culex®
APS:
Two small vendors have offered simple, semi-automated blood sampling
systems. However, we do not believe that either vendor addresses
the
scientific need as well as Culex®. In addition, we have established strong
relationships with the largest vendors of animal models who now provide
catheterized "Culex® ready" models to our customers on a just-in-time
basis, further increasing convenience and lowering cost to the
customer.
|
· |
Chemical
Analysis:
We compete with several large equipment manufacturers, including
Agilent,
Waters Corporation and Perkin Elmer Corporation. Competitive factors
include market presence, product quality, reliability and price.
We
believe that we compete well in niche markets because of our reputation
and the quality of our products, together with the technical assistance
and service we offer. Many of our competitors are much larger and
have
greater resources, making it difficult for us to capture business
from
clients other than those who need our unique
capabilities.
|
· |
Vetronics/in
vivo sampling
devices:
There are few competitors in this area of our business; however,
a
customer for our Vetronics products has undertaken development of
a
similar product for its own use, which will require that we seek
additional customers for those
products.
|
· |
Resources –
organization, personnel, facilities and
equipment
|
· |
Rules
– protocols and written procedures
|
· |
Characterization
– test items and test systems
|
· |
Documentation
– raw data, final report and
archives
|
· |
Quality
assurance unit – formalized internal audit
function
|
Age
|
Position
|
|
67
|
President
and Chief Executive Officer
|
|
Ronald
E. Shoup, Ph.D.
|
55
|
Chief
Operating Officer, BASi Contract Research Services
|
Michael
R. Cox
|
60
|
Vice
President, Finance; Chief Financial Officer; Treasurer
|
Edward
M. Chait, Ph.D.
|
65
|
Executive
Vice President; Chief Scientific Officer
|
Craig
S. Bruntlett, Ph.D.
|
58
|
Senior
Vice President, Sales Development
|
Lina
L. Reeves-Kerner
|
56
|
Vice
President, Human Resources
|
|
•
|
products
being tested fail to satisfy safety requirements;
|
|
•
|
products
have undesired clinical results;
|
|
•
|
the
client decides to forego a particular study;
|
|
•
|
inability
to enroll enough patients in the study;
|
|
•
|
inability
to recruit enough investigators;
|
|
•
|
production
problems cause shortages of the drug; and
|
|
•
|
actions
by regulatory authorities.
|
|
•
|
Inability
to develop products that address our customers’ needs;
|
|
•
|
competitive
products with superior performance;
|
|
•
|
patent
conflicts or unenforceable intellectual property rights;
|
|
•
|
demand
for the particular product; and
|
|
•
|
other
factors that could make the product uneconomical.
|
· |
difficulties
and expenses in connection with integrating the acquired companies
and
achieving the expected benefits;
|
· |
diversion
of management’s attention from current
operations;
|
· |
the
possibility that we may be adversely affected by risk factors facing
the
acquired companies;
|
· |
acquisitions
could be dilutive to earnings, or in the event of acquisitions made
through the issuance of our common stock to the shareholders of the
acquired company, dilutive to the percentage of ownership of our
existing
stockholders;
|
· |
potential
losses resulting from undiscovered liabilities of acquired companies
not
covered by the indemnification we may obtain from the seller;
and
|
· |
loss
of key employees of the acquired
companies.
|
|
High
|
Low
|
|||||
Fiscal
Year Ended September 30, 2006
|
|||||||
First
Quarter
|
$
|
6.40
|
$
|
4.75
|
|||
Second
Quarter
|
7.21
|
5.68
|
|||||
Third
Quarter
|
7.80
|
5.86
|
|||||
Fourth
Quarter
|
7.64
|
4.75
|
|||||
Fiscal
Year Ended September 30, 2007
|
|||||||
First
Quarter
|
$
|
5.74
|
$
|
4.98
|
|||
Second
Quarter
|
7.36
|
5.25
|
|||||
Third
Quarter
|
7.80
|
6.60
|
|||||
Fourth
Quarter
|
7.82
|
6.54
|
Plan Category
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options
|
Weighted Average
Exercise Price of
Outstanding Options
|
Number of Securities
Remaining Available for Future
Issuance under the Equity
Compensation Plan
(Excluding Securities Reflected
in First Column)
|
|||||||
Equity
compensation plans approved by security holders
|
240
|
|
$
5.08
|
347
|
||||||
|
|
|
||||||||
Equity
compensation plans not approved by security
holders(1)
|
50
|
$
5.14
|
—
|
|||||||
|
|
|||||||||
Options
issuable to officer upon approval by shareholders
(2)
|
275
|
|
$
7.10
|
—
|
||||||
|
||||||||||
Total
|
615
|
|
$
6.00
|
347
|
Year Ended September 30,
|
||||||||||||||||
STATEMENT
OF OPERATIONS DATA:
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
(in
thousands, except per share data)
|
|
|
|
|||||||||||||
Service
revenue
|
$
|
36,051
|
$
|
34,318
|
$
|
32,951
|
$
|
24,928
|
$
|
19,987
|
||||||
Product
revenue
|
9,194
|
8,730
|
9,444
|
12,224
|
9,852
|
|||||||||||
Total
revenue
|
45,245
|
43,048
|
42,395
|
37,152
|
29,839
|
|||||||||||
|
||||||||||||||||
Cost
of service revenue
|
27,544
|
25,691
|
23,589
|
21,348
|
15,625
|
|||||||||||
Cost
of product revenue (1)
|
3,909
|
3,647
|
3,426
|
4,224
|
3,866
|
|||||||||||
Total
cost of revenue (1)
|
31,453
|
29,338
|
27,015
|
25,572
|
19,491
|
|||||||||||
|
||||||||||||||||
Gross
profit
|
13,792
|
13,710
|
15,380
|
11,580
|
10,348
|
|||||||||||
|
||||||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling
|
2,783
|
2,750
|
2,591
|
2,703
|
2,853
|
|||||||||||
Research
and development
|
881
|
1,444
|
1,326
|
1,100
|
1,327
|
|||||||||||
General
and administrative
|
7,738
|
11,939
|
10,167
|
7,505
|
5,067
|
|||||||||||
Impairment
loss
|
|
1,100
|
||||||||||||||
Total
Operating Expenses
|
11,402
|
17,233
|
14,084
|
11,308
|
9,247
|
|||||||||||
Operating
income (loss) (1)
|
2,390
|
(3,523
|
)
|
1,296
|
272
|
1,101
|
||||||||||
Other
(expense), net
|
(891
|
)
|
(1,012
|
)
|
(969
|
)
|
(833
|
)
|
(592
|
)
|
||||||
Income
(loss) before income taxes (1)
|
1,499
|
(4,535
|
)
|
327
|
(561
|
)
|
509
|
|||||||||
Income
tax expense (benefit) (1)
|
573
|
(1,865
|
)
|
407
|
(386
|
)
|
463
|
|||||||||
Net
income (loss) (1)
|
$
|
926
|
$
|
(2,670
|
)
|
$
|
(80
|
)
|
$
|
(175
|
)
|
$
|
46
|
|||
Net
income (loss) per share: (1)
|
||||||||||||||||
Basic
|
$
|
0.19
|
$
|
(0.55
|
)
|
$
|
(0.02
|
)
|
$
|
(0.04
|
)
|
$
|
0.01
|
|||
Diluted
|
$
|
0.19
|
$
|
(0.55
|
)
|
$
|
(0.02
|
)
|
$
|
(0.04
|
)
|
$
|
0.01
|
|||
Weighted
average common shares outstanding
|
||||||||||||||||
Basic
|
4,909
|
4,883
|
4,870
|
4,860
|
4,655
|
|||||||||||
Diluted
|
4,960
|
4,883
|
4,870
|
4,860
|
4,673
|
September 30,
|
||||||||||||||||
BALANCE
SHEET DATA:
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
(in
thousands)
|
|
|
|
|||||||||||||
Working
capital (deficit) (1)
|
$
|
2,353
|
$
|
3,602
|
$
|
4,782
|
$
|
(406
|
)
|
$
|
(234
|
)
|
||||
Property
and equipment, net
|
22,927
|
25,765
|
26,565
|
31,901
|
31,172
|
|||||||||||
Goodwill
and other intangible assets, net
|
2,159
|
2,372
|
3,600
|
3,936
|
3,762
|
|||||||||||
Total
assets (1)
|
42,037
|
42,364
|
47,949
|
46,884
|
45,046
|
|||||||||||
Long-term
debt, less current portion
|
7,861
|
8,186
|
8,579
|
8,893
|
6,949
|
|||||||||||
Subordinated
debt
|
4,477
|
4,477
|
4,829
|
5,188
|
5,188
|
|||||||||||
Shareholders’
equity (1)
|
18,554
|
17,404
|
19,709
|
19,510
|
19,787
|
|
Year Ended September 30,
|
|||||||||
|
2007
|
2006
|
2005
|
|||||||
|
|
|
|
|||||||
Service
revenue
|
79.7
|
%
|
79.7
|
%
|
77.7
|
%
|
||||
Product
revenue
|
20.3
|
20.3
|
22.3
|
|||||||
Total
revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||
|
|
|
|
|||||||
Cost
of service revenue
(a)
|
76.4
|
74.9
|
71.6
|
|||||||
Cost
of product revenue
(a)
|
42.5
|
41.8
|
36.3
|
|||||||
Total
cost of revenue
|
69.5
|
68.2
|
63.7
|
|||||||
|
||||||||||
Gross
profit
|
30.5
|
31.8
|
36.3
|
|||||||
|
||||||||||
Total
operating expenses
|
25.2
|
40.0
|
33.2
|
|||||||
|
||||||||||
Operating
income (loss)
|
5.3
|
(8.2
|
)
|
3.1
|
||||||
|
||||||||||
Other
(expense)
|
(2.0
|
)
|
(2.3
|
)
|
(2.3
|
)
|
||||
|
||||||||||
Income
(loss) before income taxes
|
3.3
|
(10.5
|
)
|
0.8
|
||||||
|
||||||||||
Income
tax expense (benefit)
|
1.3
|
(4.3
|
)
|
1.0
|
||||||
|
|
|
|
|||||||
Net
income (loss)
|
2.0
|
%
|
(6.2
|
)%
|
(0.2
|
)%
|
2008
|
|
2009
|
2010
|
2011
|
2012
|
After 2012
|
Total
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Mortgage
notes payable
|
$
|
344
|
$
|
369
|
$
|
396
|
$
|
426
|
$
|
458
|
$
|
6,212
|
$
|
8,205
|
||||||||
Subordinated
debt*
|
4,477
|
—
|
—
|
—
|
—
|
—
|
4,477
|
|||||||||||||||
Capital
lease obligations
|
510
|
553
|
453
|
132
|
—
|
—
|
1,648
|
|||||||||||||||
Operating
leases
|
1,768
|
1,698
|
1,597
|
1,608
|
1,628
|
2,812
|
11,111
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
$
|
7,099
|
$
|
2,620
|
2,446
|
2,166
|
$
|
2,086
|
$
|
9,024
|
$
|
25,441
|
|
•
|
Risk-free
interest rate.
The risk-free interest rate is based on U.S. Treasury yields in
effect at the time of grant for the expected term of the option.
|
|
•
|
Expected
volatility.
We
use our historical stock price volatility and consider the implied
volatility computed based on the price of short-term options publicly
traded on our common stock for our expected volatility assumption.
|
|
•
|
Expected
term.
The expected term represents the weighted-average period the stock
options
are expected to remain outstanding. The expected term is determined
based
on historical exercise behavior, post-vesting termination patterns,
options outstanding and future expected exercise behavior.
|
|
•
|
Expected
dividends.
We
assumed that we will pay no
dividends.
|
Page
|
||
Consolidated
Financial Statements of Bioanalytical Systems, Inc. and
subsidiaries:
|
||
|
Consolidated
Balance Sheets as of September 30, 2007 and 2006
|
32
|
Consolidated
Statements of Operations for the Years Ended September 30, 2007,
2006 and
2005
|
33
|
|
|
Consolidated
Statements of Shareholders’ Equity and Comprehensive Income
(Loss) for the Years Ended September 30, 2007, 2006 and
2005
|
34
|
Consolidated
Statements of Cash Flows for the Years Ended September 30, 2007,
2006 and
2005
|
35
|
|
Notes
to Consolidated Financial Statements
|
36
|
|
Reports
of Independent Registered Public Accounting Firms
|
||
Financial
Statement Schedules:
|
||
Schedules
are not required, are not applicable or the information is shown
in the
Notes to the Consolidated Financial
Statements.
|
As of September 30,
|
|||||||
|
2007
|
2006
|
|||||
Assets | |||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
2,837
|
$
|
1,647
|
|||
Accounts
receivable:
|
|||||||
Trade, net of allowance for bad debts of $220 in 2007 and $520 in
2006
|
6,674
|
6,492
|
|||||
Unbilled revenues and other
|
2,565
|
1,545
|
|||||
Inventories
(a)
|
1,977
|
1,970
|
|||||
Deferred
income taxes (a)
|
897
|
571
|
|||||
Refundable
income taxes
|
774
|
888
|
|||||
Prepaid
expenses
|
776
|
599
|
|||||
Total
current assets
|
16,500
|
13,712
|
|||||
Property
and equipment, net
|
22,927
|
25,766
|
|||||
Goodwill
|
1,855
|
1,855
|
|||||
Intangible
assets, net
|
304
|
517
|
|||||
Debt
issue costs, net
|
211
|
246
|
|||||
Other
assets
|
240
|
268
|
|||||
Total
assets
|
$
|
42,037
|
$
|
42,364
|
|||
Liabilities
and Shareholders' Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
1,589
|
$
|
1,610
|
|||
Accrued
expenses
|
3,056
|
3,081
|
|||||
Customer
advances
|
4,115
|
4,226
|
|||||
Income taxes payable
|
56
|
—
|
|||||
Current
portion of capital lease obligations
|
510
|
472
|
|||||
Current
portion of long-term debt
|
4,821
|
721
|
|||||
Total
current liabilities
|
14,147
|
10,110
|
|||||
|
|||||||
Capital
lease obligations, less current portion
|
1,138
|
1,648
|
|||||
Long-term
debt, less current portion
|
7,861
|
8,186
|
|||||
Subordinated
notes payable, less current portion
|
—
|
4,477
|
|||||
Deferred
income taxes
|
337
|
539
|
|||||
|
|||||||
Shareholders'
equity:
|
|||||||
Preferred
shares:
|
|||||||
Authorized 1,000 shares; none issued and outstanding
|
—
|
—
|
|||||
Common
shares, no par value:
|
|||||||
Authorized
19,000 shares; issued and outstanding 4,909 shares in 2007 and 4,892
shares in 2006
|
1,189
|
1,182
|
|||||
Additional
paid-in-capital
|
11,957
|
11,677
|
|||||
Retained
earnings (a)
|
5,560
|
4,634
|
|||||
Accumulated
other comprehensive loss
|
(152
|
)
|
(89
|
)
|
|||
Total
shareholders' equity
|
18,554
|
17,404
|
|||||
Total
liabilities and shareholders' equity
|
$
|
42,037
|
$
|
42,364
|
For the Years Ended September 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Service
revenue
|
$
|
36,051
|
$
|
34,318
|
$
|
32,951
|
||||
Product
revenue
|
9,194
|
8,730
|
9,444
|
|||||||
Total
revenue
|
45,245
|
43,048
|
42,395
|
|||||||
|
||||||||||
Cost
of service revenue
|
27,544
|
25,691
|
23,589
|
|||||||
Cost
of product revenue (a)
|
3,909
|
3,647
|
3,426
|
|||||||
Total
cost of revenue (a)
|
31,453
|
29,338
|
27,015
|
|||||||
|
||||||||||
Gross
profit (a)
|
13,792
|
13,710
|
15,380
|
|||||||
|
||||||||||
Operating
expenses:
|
||||||||||
Selling
|
2,783
|
2,750
|
2,591
|
|||||||
Research
and development
|
881
|
1,444
|
1,326
|
|||||||
General
and administrative
|
7,646
|
11,976
|
10,188
|
|||||||
(Gain)
loss on sale of property and equipment
|
92
|
(37
|
)
|
(21
|
)
|
|||||
Impairment
loss
|
—
|
1,100
|
—
|
|||||||
Total
operating expenses
|
11,402
|
17,233
|
14,084
|
|||||||
|
||||||||||
Operating
income (loss) (a)
|
2,390
|
(3,523
|
)
|
1,296
|
||||||
Interest
income
|
87
|
11
|
18
|
|||||||
Interest
expense
|
(981
|
)
|
(1,033
|
)
|
(988
|
)
|
||||
Other
income
|
3
|
10
|
1
|
|||||||
|
||||||||||
Income
(loss) before income taxes (a)
|
1,499
|
(4,535
|
)
|
327
|
||||||
Income
tax provision (benefit) (a)
|
573
|
(1,865
|
)
|
407
|
||||||
Net
income (loss) (a)
|
$
|
926
|
$
|
(2,670
|
)
|
$
|
(
80
|
)
|
||
|
||||||||||
Net
income (loss) per share: (a)
|
||||||||||
Basic
|
$
|
0.19
|
$
|
(0.55
|
)
|
(0.02
|
)
|
|||
Diluted
|
$
|
0.19
|
$
|
(0.55
|
)
|
(0.02
|
)
|
|||
Weighted
average common shares outstanding:
|
||||||||||
Basic
|
4,909
|
4,883
|
4,870
|
|||||||
Diluted
|
4,960
|
4,883
|
4,870
|
Common shares
|
Additional
paid-in- capital
|
Retained
earnings (a)
|
Accumulated
other
comprehensive
loss
|
Total
shareholders'
equity
|
|||||||||||||||
|
Number
|
Amount
|
|||||||||||||||||
Balance
at October 1, 2004
|
4,869
|
$
|
1,177
|
$
|
11,263
|
$
|
7,384
|
$
|
(314
|
)
|
$
|
19,510
|
|||||||
Comprehensive
income (loss):
|
|||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
(80
|
)
|
—
|
(80
|
)
|
|||||||||||
Other
comprehensive
income:
|
|||||||||||||||||||
Foreign
currency translation
adjustments
|
—
|
—
|
—
|
—
|
273
|
273
|
|||||||||||||
Total
comprehensive income
|
193
|
||||||||||||||||||
Exercise
of stock options
|
2
|
1
|
5
|
—
|
—
|
6
|
|||||||||||||
Balance
at September 30, 2005
|
4,871
|
1,178
|
11,268
|
7,304
|
(41
|
)
|
19,709
|
||||||||||||
Comprehensive
loss:
|
|||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
(2,670
|
)
|
—
|
(2,670
|
)
|
|||||||||||
Other
comprehensive
loss:
|
|||||||||||||||||||
Foreign
currency translation
adjustments
|
—
|
—
|
—
|
—
|
(48
|
)
|
(48
|
)
|
|||||||||||
Total
comprehensive loss
|
(2,718
|
)
|
|||||||||||||||||
Stock
compensation
|
—
|
—
|
319
|
—
|
—
|
319
|
|||||||||||||
Exercise
of stock options
|
21
|
4
|
90
|
—
|
—
|
94
|
|||||||||||||
Balance
at September 30, 2006
|
4,892
|
1,182
|
11,677
|
4,634
|
(89
|
)
|
17,404
|
||||||||||||
Comprehensive
income :
|
|||||||||||||||||||
Net
income
|
—
|
—
|
—
|
926
|
—
|
926
|
|||||||||||||
Other
comprehensive
loss:
|
|||||||||||||||||||
Foreign
currency translation
adjustments
|
—
|
—
|
—
|
—
|
(63
|
)
|
(63
|
)
|
|||||||||||
Total
comprehensive income
|
863
|
||||||||||||||||||
Stock
compensation
|
—
|
—
|
208
|
—
|
—
|
208
|
|||||||||||||
Exercise
of stock options
|
17
|
7
|
72
|
—
|
—
|
79
|
|||||||||||||
Balance
at September 30, 2007
|
4,909
|
$
|
1,189
|
$
|
11,957
|
$
|
5,560
|
$
|
(152
|
)
|
$
|
18,554
|
Years Ended September 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Operating
activities:
|
||||||||||
Net
income (loss)
|
$
|
926
|
$
|
(2,670
|
)
|
$
|
(80
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
||||||||||
Depreciation
and amortization
|
3,458
|
3,889
|
3,441
|
|||||||
Asset
impairment loss
|
—
|
1,100
|
—
|
|||||||
Employee
stock compensation expense
|
208
|
319
|
—
|
|||||||
Bad
debt expense (recovery)
|
(132
|
)
|
473
|
—
|
||||||
(Gain)
loss on sale of property and equipment
|
92
|
(37
|
)
|
(21
|
)
|
|||||
Deferred
income taxes (a)
|
(472
|
)
|
(1,375
|
)
|
(609
|
)
|
||||
Changes
in operating assets and liabilities:
|
||||||||||
Accounts
receivable
|
(1,070
|
)
|
4,518
|
(6,590
|
)
|
|||||
Inventories
(a)
|
(7
|
)
|
254
|
(507
|
)
|
|||||
Refundable
and payable income taxes
|
114
|
(919
|
)
|
634
|
||||||
Prepaid
expenses and other assets
|
(32
|
)
|
(180
|
)
|
(84
|
)
|
||||
Accounts
payable
|
(21
|
)
|
(71
|
)
|
(1,081
|
)
|
||||
Accrued
expenses
|
(25
|
)
|
291
|
1,199
|
||||||
Customer
advances
|
(111
|
)
|
(1,748
|
)
|
3,157
|
|||||
Net
cash provided (used) by operating activities
|
2,928
|
3,844
|
(541
|
)
|
||||||
Investing
activities:
|
||||||||||
Capital
expenditures
|
(878
|
)
|
(1,687
|
)
|
(2,301
|
)
|
||||
Proceeds
from sale of property and equipment
|
625
|
271
|
5,887
|
|||||||
Net
cash provided (used) by investing activities
|
(253
|
)
|
(1,416
|
)
|
3,586
|
|||||
Financing
activities:
|
||||||||||
Payments
of long-term debt
|
(702
|
)
|
(723
|
)
|
(756
|
)
|
||||
Borrowings
on line of credit
|
—
|
12,624
|
7,888
|
|||||||
Payments
on line of credit
|
—
|
(13,544
|
)
|
(9,794
|
)
|
|||||
Payments
on capital lease obligations
|
(472
|
)
|
(438
|
)
|
(181
|
)
|
||||
Net
proceeds from the exercise of stock options
|
79
|
94
|
6
|
|||||||
Net
cash used by financing activities
|
(1,095
|
)
|
(1,987
|
)
|
(2,837
|
)
|
||||
Effect
of exchange rate changes
|
(390
|
)
|
(48
|
)
|
273
|
|||||
Net
increase in cash and cash equivalents
|
1,190
|
393
|
481
|
|||||||
Cash
and cash equivalents at beginning of year
|
1,647
|
1,254
|
773
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
2,837
|
$
|
1,647
|
$
|
1,254
|
Principles
of Consolidation
|
Revenue
Recognition
|
Cash
Equivalents
|
Financial
Instruments
|
2007
|
2006
|
2005
|
||||||||||
Opening
balance
|
$
|
520
|
$
|
40
|
$ | 0 | ||||||
Charged
to expense
|
103
|
488
|
40 | |||||||||
Accounts
written off
|
(54
|
)
|
(8
|
)
|
— | |||||||
Recoveries
|
(349
|
)
|
—
|
— | ||||||||
Ending
balance
|
$
|
220
|
$
|
520
|
$ | 40 |
(e)
|
Inventories
|
Property
and Equipment
|
|
2007
|
2006
|
|||||
Land
and improvements
|
$
|
453
|
$
|
450
|
|||
Buildings
and improvements
|
20,745
|
21,584
|
|||||
Machinery
and equipment
|
21,048
|
20,663
|
|||||
Office
furniture and fixtures
|
1,306
|
1,425
|
|||||
Construction
in progress
|
79
|
252
|
|||||
43,631
|
44,374
|
||||||
Less:
accumulated depreciation
|
(20,704
|
)
|
(18,608
|
)
|
|||
Net
property and equipment
|
$
|
22,927
|
$
|
25,766
|
(g)
|
Impairment
of Long-Lived Assets
|
Goodwill and Intangible Assets |
September 30, 2007
|
||||||||||
Weighted
average life
(years)
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
||||||||
FDA
compliant facility
|
10
|
$
|
402
|
$
|
171
|
|||||
Methodologies
|
5
|
180
|
171
|
|||||||
Volunteer
database
|
5
|
326
|
280
|
|||||||
Customer
relationships
|
5
|
359
|
341
|
|||||||
|
$
|
1,267
|
$
|
963
|
||||||
|
September 30, 2006
|
|||||||||
|
Weighted
average life
(years)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
|||||||
FDA
compliant facility
|
10
|
$
|
402
|
$
|
131
|
|||||
Methodologies
|
5
|
180
|
135
|
|||||||
Volunteer
database
|
5
|
326
|
215
|
|||||||
Customer
relationships
|
5
|
359
|
269
|
|||||||
$
|
1,267
|
$
|
750
|
2008
|
$
|
113
|
||
2009
|
40
|
|||
2010
|
40
|
|||
2011
|
40
|
|||
2012
|
40
|
(i)
|
Advertising
Expense
|
Stock-Based
Compensation
|
Net
loss as adjusted (a)
|
$
|
(80
|
)
|
|
Deduct: Total
stock-based employee compensation expense determined under the
fair value
based method for all awards, net of related tax effects
|
(177
|
)
|
||
Pro
forma net loss
|
$
|
(257
|
)
|
|
Loss
per share:
|
||||
Basic
and diluted - as reported
|
$
|
(0.02
|
)
|
|
Basic
and diluted - pro forma
|
$
|
(0.05
|
)
|
(k)
|
Income
Taxes
|
Use
of Estimates
|
Years
Ended September 30,
|
|||||||||||||
2007
|
2006
|
2005
|
|||||||||||
Basic
net income/(loss) per share:
|
|||||||||||||
Net
income/(loss) applicable to common shareholders (a)
|
$
|
926
|
$
|
(2,670
|
)
|
$
|
(80
|
)
|
|||||
Weighted
average common shares outstanding
|
4,909
|
4,883
|
4,870
|
||||||||||
Basic
net income/(loss) per share
|
$
|
0.19
|
$
|
(0.55
|
)
|
$
|
(0.02
|
)
|
|||||
Diluted
net income/(loss) per share:
|
|||||||||||||
Diluted
net income/(loss) applicable to common (a)
|
$
|
926
|
$
|
(2,670
|
)
|
$
|
(80
|
)
|
|||||
Weighted
average common shares outstanding
|
4,909
|
4,883
|
4,870
|
||||||||||
Dilutive
stock options/shares
|
51
|
—
|
—
|
||||||||||
Dilutive
weighted average common shares outstanding
|
4,960
|
4,883
|
4,870
|
||||||||||
Diluted
net income/(loss) per share
|
$
|
0.19
|
$
|
(0.55
|
)
|
$
|
(0.02
|
)
|
2007
|
2006
|
||||||
Raw
materials
|
$
|
1,480
|
$
|
1,335
|
|||
Work
in progress
|
273
|
278
|
|||||
Finished
goods
|
224
|
357
|
|||||
|
$
|
1,977
|
$
|
1,970
|
2006
|
2005
|
||||||||||||
As
Originally
Reported
|
As
Adjusted
for
Accounting
Change
|
As
Originally
Reported
|
As
Adjusted
for
Accounting
Change
|
||||||||||
Consolidated
statements of operations:
|
|||||||||||||
Cost
of product revenue
|
$
|
3,547
|
$
|
3,647
|
$
|
3,462
|
$
|
3,426
|
|||||
Tax
provision (benefit)
|
(1,825
|
)
|
(1,865
|
)
|
392
|
407
|
|||||||
Net
income (loss)
|
(2,610
|
)
|
(2,670
|
)
|
(101
|
)
|
(80
|
)
|
|||||
Basic
net income (loss) per share
|
(0.53
|
)
|
(0.55
|
)
|
(0.02
|
)
|
(0.02
|
)
|
|||||
Diluted
net income (loss) per share
|
(0.53
|
)
|
(0.55
|
)
|
(0.02
|
)
|
(0.02
|
)
|
|||||
Consolidated
balance sheets:
|
|||||||||||||
Inventories
|
1,887
|
1,970
|
2,041
|
2,225
|
|||||||||
Deferred
taxes, current
|
604
|
571
|
381
|
308
|
|||||||||
Retained
earnings
|
4,584
|
4,634
|
7,194
|
7,304
|
|||||||||
Consolidated
statements of cash flows:
|
|
||||||||||||
Deferred
taxes
|
(1,335
|
)
|
(1,375
|
)
|
(623
|
)
|
(609
|
)
|
|||||
Inventory
working capital change
|
154
|
254
|
(472
|
)
|
(507
|
)
|
Principal
|
Interest
|
Total
|
||||||||
2008
|
$
|
510
|
$
|
117
|
$
|
627
|
||||
2009
|
553
|
74
|
627
|
|||||||
2010
|
453
|
30
|
483
|
|||||||
2011
|
132
|
3
|
135
|
|||||||
|
$
|
1,648
|
$
|
224
|
$
|
1,872
|
2008
|
$
|
1,768
|
||
2009
|
1,698
|
|||
2010
|
1,597
|
|||
2011
|
1,608
|
|||
2012
|
1,628
|
|||
After
2012
|
2,812 | |||
$ | 11,111 |
2007
|
2006
|
||||||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $40 until June 1, 2010 when it adjusts under
the terms of
the note. Interest adjusts based on market rates. Collateralized
by
underlying property. Due November, 2012.
|
$
|
4,445
|
$
|
4,610
|
|||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $19. Interest adjusts based on market rates.
Collateralized by underlying property. Due May, 2008.
(1)
|
1,735
|
1,843
|
|||||
Mortgage
note payable to a bank, payable in monthly principal and interest
installments of $17 until June 1, 2010, when it adjusts under
the terms of
the note. Interest adjusts based on market rates. Collateralized
by
underlying property. Due November, 2012.
|
2,025
|
2,094
|
|||||
Convertible
subordinated 6% notes payable due January 1, 2008. Interest payable
in
arrears on the 15th of January and July after June 1, 2005 (4.67%
effective rate).
|
4,000
|
4,000
|
|||||
Subordinated
10% notes payable due October 1, 2007. Holders can require the
Company to
repay 20% of the original outstanding balance each October 1.
Interest
payable upon demand each October 1 through maturity.
|
477
|
837
|
|||||
12,682
|
13,384
|
||||||
Less
current portion
|
4,821
|
721
|
|||||
$
|
7,861
|
$
|
12,663
|
2008
|
$
|
4,821
|
||
2009
|
369
|
|||
2010
|
396
|
|||
2011
|
426
|
|||
2012
|
458
|
|||
Thereafter
|
6,212
|
|||
|
$
|
12,682
|
(a)
|
Subordinated
Debt
|
(b)
|
Revolving
Line of Credit
|
2007
|
2006
|
||||||
|
(a)
|
|
|||||
Long-term deferred tax liabilities: | |||||||
Tax
over book depreciation
|
$
|
495
|
$
|
683
|
|||
Lower
tax basis on assets of acquired company
|
(101
|
)
|
(144
|
) | |||
Stock
options expensed
|
(
57
|
)
|
—
|
||||
Total
long-term deferred tax liabilities
|
$
|
337
|
$
|
539
|
|||
|
|||||||
Current
deferred tax assets:
|
|||||||
Inventory
pricing
|
$
|
176
|
$
|
111
|
|||
Accrued compensation and vacation
|
410
|
230
|
|||||
Accrued
expenses and other - net
|
184
|
74
|
|||||
Foreign
tax credit carryover
|
120
|
120
|
|||||
Deferred
gain on sale/leaseback
|
7
|
36
|
|||||
Foreign
net operating loss
|
326
|
456
|
|||||
Total
current deferred tax assets
|
$
|
1,223
|
$
|
1,027
|
|||
|
|||||||
Valuation
allowance for deferred tax assets
|
(326
|
)
|
(456
|
)
|
|||
Net
deferred tax assets
|
$
|
897
|
$
|
571
|
|||
Net
deferred tax (assets) liabilities
|
$
|
(560
|
) |
$
|
(32
|
)
|
2007
|
2006
|
2005
|
||||||||
|
(a)
|
|
(a)
|
|
||||||
Current: | ||||||||||
Federal
|
$
|
875
|
$
|
(553
|
)
|
$
|
814
|
|||
State
|
224
|
(97
|
)
|
216
|
||||||
Foreign
|
(15
|
)
|
120
|
—
|
||||||
Total
Current
|
$
|
1,084
|
$
|
(530
|
)
|
$
|
1,030
|
|||
Deferred:
|
||||||||||
Federal
|
$
|
(453
|
)
|
$
|
(1,074
|
)
|
$
|
(489
|
)
|
|
State
|
(58
|
)
|
(261
|
)
|
(134
|
)
|
||||
Foreign
|
130 | 45 | — | |||||||
Reduction
of valuation allowance
|
(130 | ) | (45 | ) | — | |||||
Total
deferred
|
$
|
(511
|
)
|
$
|
(1,335
|
)
|
$
|
(623
|
)
|
|
|
$
|
573
|
$
|
(1,865
|
)
|
$
|
407
|
2007
|
2006
|
2005
|
||||||||
Statutory
federal income tax rate
|
34.0
|
%
|
(34.0
|
)%
|
34.0
|
%
|
||||
Increases
(decreases):
|
||||||||||
Nondeductible
expenses
|
7.7
|
0.5
|
6.8
|
|||||||
Tax
benefit of foreign sales
|
(0.7
|
)
|
(1.5
|
)
|
(14.6
|
)
|
||||
State
income taxes, net of federal tax benefit
|
7.3
|
(5.1
|
)
|
18.1
|
||||||
Nontaxable
foreign (gains) losses
|
(9.1
|
)
|
1.1
|
80.2
|
||||||
Other
|
(1.0
|
)
|
(2.1
|
)
|
0.0
|
|||||
|
38.2
|
% |
(41.1
|
)%
|
124.5
|
%
|
2007
|
2006
|
2005
|
|||||||||||||||||
Options
(shares)
|
Weighted-
Average
Exercise Price
|
Options
(shares)
|
Weighted-
Average
Exercise Price
|
Options
(shares)
|
Weighted-
Average
Exercise Price
|
||||||||||||||
Outstanding –
beginning
of year
|
404
|
$
|
4.98
|
480
|
$
|
4.95
|
343
|
$
|
4.66
|
||||||||||
Exercised
|
(17
|
)
|
4.48
|
(21
|
)
|
4.50
|
(2
|
)
|
4.25
|
||||||||||
Granted
|
305
|
6.98
|
—
|
—
|
173
|
5.39
|
|||||||||||||
Terminated
|
(77
|
)
|
4.91
|
(55
|
)
|
4.90
|
(34
|
)
|
4.63
|
||||||||||
Outstanding –
end of year
|
615
|
$
|
6.00
|
404
|
$
|
4.98
|
480
|
$
|
4.95
|
||||||||||
Weighted
grant date fair values
|
$
|
3.57
|
$
|
—
|
$
|
3.38
|
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Non-vested
options, beginning of year
|
278
|
$
|
3
.75
|
||||
Granted
|
305
|
3
.79
|
|||||
Vested
|
(134
|
)
|
3
.38
|
||||
Forfeited
|
(31
|
)
|
3
.47
|
||||
Non-vested
options, end of year
|
418
|
$
|
3
.71
|
Range
of exercise prices
|
Number
of shares
outstanding
at
September 30,
2007
|
Weighted
average
remaining
contractual
life
(years)
|
Weighted
average
exercise
price
|
Number
of
shares
exercisable
at
September
30,
2007
|
Weighted
average
exercise
price
|
||||||||||||
$
|
2.80
- 4.58
|
158
|
5
.61
|
$ |
4
.35
|
119
|
$ |
4
.33
|
|||||||||
$
|
5.00
- 5.74
|
|
155
|
7
.76
|
$ |
5
.42
|
61
|
$ |
5
.54
|
||||||||
$
|
7.10
- 8.00
|
302
|
9
.11
|
$ |
7
.16
|
17
|
$ |
8
.00
|
2007
|
2005
|
||||||
Risk-free
interest rate
|
4.65
|
%
|
3.00
|
%
|
|||
Dividend
yield
|
0.00
|
%
|
0.00
|
%
|
|||
Volatility
of the expected market price of
the Company's common stock
|
44.00
63.00
|
%-
%
|
67.00
|
% | |||
Expected
life of the options (years)
|
7.0
|
7.0
|
Operating
Segments
|
Year
ended September 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Revenue:
|
||||||||||
Service
|
$
|
36,051
|
$
|
34,318
|
$
|
32,951
|
||||
Product
|
9,194
|
8,730
|
9,444
|
|||||||
Total
|
$
|
45,245
|
$
|
43,048
|
$
|
42,395
|
||||
Operating
income (loss):
|
||||||||||
Service
|
$
|
1,720
|
$
|
(3,728
|
) |
$
|
148
|
|||
Product
|
670
|
205
|
1,148
|
|||||||
Total
operating income (loss)
|
2,390
|
(3,523
|
)
|
1,296
|
||||||
Corporate
expenses
|
(891
|
)
|
(1,012
|
)
|
(969
|
)
|
||||
Income
(loss) before income taxes
|
$
|
1,499
|
$
|
(4,535
|
)
|
$
|
327
|
Year
ended September 30,
|
||||||||||
2007
|
|
2006
|
2005
|
|||||||
Identifiable
assets:
|
||||||||||
Service
|
$
|
23,979
|
$
|
24,539
|
$
|
31,739
|
||||
Product
|
9,258
|
9,947
|
10,322
|
|||||||
Corporate
|
8,800
|
7,878
|
5,888
|
|||||||
Total
|
$
|
42,037
|
$
|
42,364
|
$
|
47,949
|
||||
Goodwill,
net:
|
||||||||||
Service
|
$
|
1,481
|
$
|
1,481
|
$
|
1,071
|
||||
Product
|
374
|
374
|
374
|
|||||||
Total
|
$
|
1,855
|
$
|
1,855
|
$
|
1,445
|
||||
Intangible
assets, net:
|
||||||||||
Service
|
$
|
304
|
$
|
517
|
$
|
2,156
|
||||
Product
|
—
|
—
|
—
|
|||||||
Total
|
$
|
304
|
$
|
517
|
$
|
2,156
|
||||
Depreciation
and amortization:
|
||||||||||
Service
|
$
|
3,222
|
$
|
3,414
|
$
|
3,125
|
||||
Product
|
236
|
475
|
316
|
|||||||
Total
|
$
|
3,458
|
$
|
3,889
|
$
|
3,441
|
||||
Capital
expenditures:
|
||||||||||
Service
|
$
|
759
|
$
|
1,518
|
$
|
1,483
|
||||
Product
|
119
|
169
|
818
|
|||||||
Total
|
$
|
878
|
$
|
1,687
|
$
|
2,301
|
Geographic
Information
|
Year
ended September 30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Sales
to external customers:
|
||||||||||
North
America
|
$
|
39,420
|
$
|
37,615
|
$
|
34,046
|
||||
Pacific
Rim
|
700
|
693
|
1,052
|
|||||||
Europe
|
4,562
|
4,299
|
4,899
|
|||||||
Other
|
563
|
441
|
2,398
|
|||||||
Total
|
$
|
45,245
|
$
|
43,048
|
$
|
42,395
|
||||
Long-lived
assets:
|
||||||||||
North
America
|
$
|
24,729
|
$
|
27,676
|
$
|
29,499
|
||||
Europe
|
808
|
976
|
1,204
|
|||||||
Total
|
$
|
25,537
|
$
|
28,652
|
$
|
30,703
|
(c)
|
Major
Customers
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||
2007
|
|||||||||||||
Total
Revenue
|
$
|
10,884
|
$
|
11,311
|
$
|
12,615
|
$
|
10,435
|
|||||
Gross
Profit (a)
|
3,391
|
3,180
|
4,118
|
3,103
|
|||||||||
Net
income (loss) (a)
|
556
|
124
|
449
|
(203
|
)
|
||||||||
Basic
net income (loss) per common share outstanding (a)
|
0.11
|
0.03
|
0.09
|
(0.04
|
)
|
||||||||
Diluted
net income (loss) per common share outstanding (a)
|
0.11
|
0.03
|
0.09
|
(0.04
|
)
|
||||||||
2006
|
|||||||||||||
Total
Revenue
|
$
|
9,844
|
$
|
12,417
|
$
|
10,038
|
$
|
10,749
|
|||||
Gross
Profit (a)
|
3,146
|
4,934
|
2,530
|
3,100
|
|||||||||
Impairment
loss
|
—
|
—
|
1,100
|
—
|
|||||||||
Net
income (loss) (a)
|
(716
|
)
|
538
|
(1,756
|
)
|
(736
|
)
|
||||||
Basic
net income (loss) per common share outstanding (a)
|
(0.15
|
)
|
0.11
|
(0.36
|
)
|
(0.15
|
)
|
||||||
Diluted
net income (loss) per common share outstanding (a)
|
(0.15
|
)
|
0.11
|
(0.36
|
)
|
(0.15
|
)
|
||||||
2005
|
|||||||||||||
Total
Revenue
|
$
|
9,694
|
$
|
9,139
|
$
|
11,304
|
$
|
12,258
|
|||||
Gross
Profit (a)
|
3,627
|
2,426
|
5,026
|
4,301
|
|||||||||
Net
income (loss) (a)
|
404
|
(896
|
)
|
356
|
56
|
||||||||
Basic
net income (loss) per common share outstanding (a)
|
0.08
|
(0.18
|
)
|
0.07
|
0.01
|
||||||||
Diluted
net income (loss) per common share outstanding (a)
|
0.08
|
(0.18
|
)
|
0.07
|
$
|
0.01
|
Name
|
Age
|
Position
|
||
William
E. Baitinger
|
74
|
Director
|
||
54
|
Director
|
|||
Leslie
B. Daniels
|
60
|
Director
|
||
Larry
S. Boulet
|
61
|
Director
|
||
Richard
M. Shepperd
|
67
|
Director,
President and Chief Executive
Officer
|
1.
|
Financial
Statements: See Index to Consolidated Financial Statements under
Item 8 on
Page 31 of this report.
|
2.
|
Financial
Statement Schedules: Schedules are not required, are not applicable
or the
information is shown in the Notes to the Consolidated Financial
Statements.
|
3.
|
Exhibits:
The following exhibits are filed as part of, or incorporated by reference
into, this report:
|
Number
|
Description
of Exhibits
|
(3)
|
3.1
|
Second
Amended and Restated Articles of Incorporation of Bioanalytical Systems,
Inc. (incorporated by reference to Exhibit 3.1 to Form 10-Q for the
quarter ended December 31, 1997).
|
3.2
|
Second
Amended and Restated Bylaws of Bioanalytical Systems, Inc. (incorporated
by reference to Exhibit 3.2 to Form 10-Q for the quarter ended
March 31,
2007).
|
(4)
|
4.1
|
Specimen
Certificate for Common Shares (incorporated by reference to Exhibit
4.1 to
Registration Statement on Form S-1, Registration No. 333-36429).
|
4.2
|
See
Exhibits 3.1 and 3.2 to this Form 10-K.
|
4.3
|
Form
of 6% Subordinated Convertible Note due 2008 (incorporated by reference
to
Form 8-K filed November 21, 2002).
|
4.4
|
Form
of 10% Subordinated Note due 2007 (incorporated by reference to Exhibit
4.3 of Form 10-Q for the quarter ended June 30, 2003).
|
(10)
|
10.1
|
Bioanalytical
Systems, Inc. 1990 Employee Incentive Stock Option Plan (*) (incorporated
by reference to Exhibit 10.4 to Registration Statement on Form S-1,
Registration No. 333-36429).
|
10.2
|
Form
of Bioanalytical Systems, Inc. 1990 Employee Incentive Stock Option
Agreement (*) (incorporated by reference to Exhibit 10.5 to
Registration Statement on Form S-1, Registration No. 333-36429).
|
10.3
|
Bioanalytical
Systems, Inc. 1997 Employee Incentive Stock Option Plan, as amended
January 24, 2004 (*) (incorporated by reference to Appendix A to
definitive Proxy Statement filed January 28, 2003 SEC File No. 000-23357).
|
10.4
|
Form
of Bioanalytical Systems, Inc. 1997 Employee Incentive Stock Option
Agreement (*) (incorporated by reference to Exhibit 10.27 to Registration
Statement on Form S-1, Registration No. 333-36429).
|
10.5
|
1997
Bioanalytical Systems, Inc. Outside Director Stock Option Plan, as
amended
January 24, 2004 (*) (incorporated by reference to Appendix B to
definitive Proxy Statement filed January 28, 2003 SEC File No. 000-23357).
|
10.6
|
Form
of Bioanalytical Systems, Inc. 1997 Outside Director Stock Option
Agreement (*) (incorporated by reference to Exhibit 10.29 to Registration
Statement on Form S-1, Registration No. 333-36429).
|
Number
|
Description
of Exhibits
|
10.7
|
Loan
Agreement between Bioanalytical Systems, Inc. and Regions Bank dated
December 18, 2007 (filed herewith).
|
10.8
|
Amended
and Restated Credit Agreement by and between Bioanalytical Systems,
Inc.,
and National City Bank, executed January 4, 2005 (incorporated by
reference to Exhibit 10.5 of Form 8-K filed January 10, 2005).
|
10.9
|
Amended
and Restated General Security Agreement by and between Bioanalytical
Systems, Inc. and National City Bank executed January 4, 2005
(incorporated by reference to Exhibit 10.7 of Form 8-K filed January
10,
2005).
|
10.10
|
Letter
agreement between Bioanalytical Systems, Inc. and Ronald E. Shoup,
Ph.D.
dated June 19, 2003 (incorporated by reference to Exhibit 10.1 of
Form 8-K filed July 24, 2007).
|
10.11
|
Replacement
Promissory Note by and between Bioanalytical Systems, Inc. and National
City Bank, executed January 4, 2005 (incorporated by reference to
Exhibit
10.6 of Form 8-K filed January 10, 2005).
|
10.12
|
Loan
Agreement between Bioanalytical Systems, Inc. and Union Planters
Bank,
dated October 29, 2002 (incorporated by reference to Exhibit 10.15
of Form
10-K for the fiscal year ended September 30, 2002).
|
10.13
|
Real
Estate Mortgage and Security Agreement between Bioanalytical Systems,
Inc.
and Union Planters Bank, dated October 29, 2002 (incorporated by
reference
to Exhibit 10.16 of Form 10-K for the fiscal year ended September
30,
2002).
|
10.14
|
Real
Estate Mortgage and Security Agreement between Bioanalytical Systems,
Inc.
and Union Planters Bank, dated October 29, 2002 (incorporated by
reference
to Exhibit 10.17 of Form 10-K for the fiscal year ended September
30,
2002).
|
10.15
|
Term
Loan Promissory Note made by Bioanalytical Systems, Inc. in favor
of Union
Planters Bank, dated October 29, 2002 (incorporated by reference
to
Exhibit 10.18 of Form 10-K for the fiscal year ended September 30,
2002).
|
10.16
|
Promissory
Note made by Bioanalytical Systems, Inc. in favor of Union Planters
Bank,
dated October 29, 2002 (incorporated by reference to Exhibit 10.19
of Form
10-K for the fiscal year ended September 30, 2002).
|
10.17
|
Purchase
and Sale Agreement between BASi Maryland, Inc. and 300 W. Fayette,
LLC,
closed January 5, 2005 (incorporated by reference to Exhibit 10.1
of Form
8-K filed January 10, 2005).
|
10.18
|
First
Amendment to the Purchase and Sale Agreement dated September
7, 2004
(incorporated by reference to Exhibit 10.20 to Form 10-K for the
fiscal year ended September 30, 2004).
|
10.19
|
Second
Amendment to the Purchase and Sale Agreement dated on or about
November
11, 2004 (incorporated by reference to Exhibit 10.21 to Form 10-K for
the fiscal year ended September 30, 2004).
|
10.20
|
Office
Lease by and between BASi Maryland, Inc. and 300 W. Fayette Street,
LLC,
dated on or about January 5, 2004 (incorporated by reference
to Exhibit
10.22 to Form 10-K for the fiscal year ended September 30, 2004).
|
Number
|
Description
of Exhibits
|
10.21
|
Employment
Agreement by and between Bioanalytical Systems, Inc. and Edward M.
Chait
dated August 1, 2005 (*) (incorporated by reference to Exhibit 10.1
to
Form 8-K filed August 5, 2005).
|
10.22
|
Form
of Grant of non-qualified stock options dated August 1, 2005 to Edward
M.
Chait (*) (incorporated by reference to Exhibit 10.24 to Form 10-K
for the fiscal year ended September 30, 2005).
|
10.23
|
Form
of Grant of non-qualified stock options dated April 1, 2004 to Michael
R.
Cox (*) (incorporated by reference to Exhibit 10.3 to Form 10-Q for
the fiscal year ended March 31, 2004).
|
10.24
|
Severance
Agreement and Release of All Claims with Michael P. Silvon, dated
July 17,
2006 (*) (incorporated by reference to Exhibit 10.1 to Form 8-K filed
July
31, 2006).
|
10.25
|
Employment
Agreement by and among Bioanalytical Systems, Inc. and Richard M.
Shepperd, entered into on May 18, 2007 (*) (incorporated by reference
to
Exhibit 10.1 to Form 10-Q for the fiscal quarter ended June 30, 2007).
|
10.26
|
Option
Agreement by and among Bioanalytical Systems, Inc. and Richard M.
Shepperd, entered into on May 18, 2007 (*) (incorporated by reference
to
Exhibit 10.2 to Form 10-Q for the fiscal quarter ended June 30,
2007).
|
10.27
|
First
Amendment to Lease by and between 300 W. Fayette Street, LLC and
Bioanalytical Systems, Inc., entered into on May 20, 2007 (incorporated
by
reference to Exhibit 10.3 to Form 10-Q for the fiscal quarter ended
June
30, 2007).
|
|
10.28
|
Lease
Agreement by and between 300 W. Fayette Street, LLC and Bioanalytical
Systems, Inc., entered into on May 20, 2007 (incorporated by reference
to
Exhibit 10.4 to Form 10-Q for the fiscal quarter ended June 30, 2007).
|
10.29
|
Severance
Agreement and Release of All Claims, dated September 28, 2007, between
Candice B. Kissinger and Bioanalytical Systems, Inc. (*) (incorporated
by
reference to Exhibit 10.1 to Form 8-K filed October 4, 2007)
|
10.30
|
Severance
Agreement and Release of All Claims, dated September 28, 2007, between
Peter T. Kissinger, PhD. and Bioanalytical Systems, Inc. (*) (incorporated
by reference to Exhibit 10.2 to Form 8-K filed October 4, 2007)
|
10.31
|
License
Agreement, dated September 28, 2007, between Phlebotics, Inc. and
Bioanalytical Systems, Inc. (incorporated by reference to Exhibit
10.3 to
Form 8-K filed October 4, 2007).
|
|
10.32
|
Agreement
for Lease, by and among Bioanalytical Systems, Inc., Bioanalytical
Systems
Limited and Pettifer Estates Limited, dated October 11, 2007 (incorporated
by reference to Exhibit 10.1 to Form 8-K filed October 17, 2007).
|
10.33
|
Form
of Lease, by and among Bioanalytical Systems, Inc., Bioanalytical
Systems
Limited and Pettifer Estates Limited (incorporated by reference
to Exhibit
10.2 to Form 8-K filed October 17, 2007).
|
|
10.34
|
Employment
Agreement between Michael R. Cox and Bioanalytical Systems, Inc.,
dated
November 6, 2007 (incorporated by reference to Exhibit 10.1 to
Form 8-K
filed November 13, 2007).
|
Number
|
Description
of Exhibits
|
10.35
|
Employee
Incentive Stock Option Agreement between Michael R. Cox and Bioanalytical
Systems, Inc., dated November 6, 2007 (incorporated by reference
to
Exhibit 10.2 to Form 8-K filed November 13, 2007).
|
|
10.36
|
Nonqualified
option letter agreement between Michael R. Cox and Bioanalytical
Systems,
Inc., dated November 6, 2007 (incorporated by reference to Exhibit
10.3 to
Form 8-K filed November 13, 2007).
|
|
10.37
|
Employment
Agreement between Edward M. Chait and Bioanalytical Systems, Inc.,
dated
November 6, 2007 (incorporated by reference to Exhibit 10.4 to Form
8-K
filed November 13, 2007).
|
|
10.38
|
Employee
Incentive Stock Option Agreement between Edward M. Chait and Bioanalytical
Systems, Inc., dated November 6, 2007 (incorporated by reference
to
Exhibit 10.5 to Form 8-K filed November 13, 2007).
|
|
10.39
|
Nonqualified
option letter agreement between Edward M. Chait and Bioanalytical
Systems,
Inc., dated November 6, 2007 (incorporated by reference to Exhibit
10.6 to
Form 8-K filed November 13, 2007).
|
(14)
|
14
|
Code
of Ethics (incorporated
by reference to Exhibit 14 to Form 10-K for the fiscal year ended
September 30, 2006).
|
(18)
|
18
|
Letter
re: Change in Accounting Principles regarding the change in accounting
for
certain inventories (filed herewith).
|
(21)
|
21.1
|
Subsidiaries
of the Registrant (incorporated by reference to Exhibit 21.1 to Form
10-K
for the fiscal year ended September 30, 2005).
|
(23)
|
23.1
|
Consent
of Independent Registered Public Accounting Firm Crowe Chizek and
Company
LLC (filed herewith).
|
23.2
|
Consent
of Independent Registered Public Accounting Firm KPMG LLP (filed
herewith).
|
(31)
|
31.1
|
Certification
of Chief Executive Officer (filed
herewith).
|
31.2
|
Certification
of Chief Financial Officer (filed
herewith).
|
(32)
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
32.2
|
Certification
of Executive Vice President, Chief Financial Officer pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
Date: December
27, 2007
Date: December
27, 2007
|
BIOANALYTICAL
SYSTEMS, INC.
(Registrant)
By: /s/ Richard
M. Shepperd
Richard
M. Shepperd
President
and Chief Executive Officer
By: /s/ Michael
R. Cox
Michael R. Cox Vice
President, Finance and Administration, Chief Financial Officer
and
Treasurer
|
Signature
|
Capacity
|
Date
|
/s/ Richard
M. Shepperd
Richard
M. Shepperd
|
President and Chief Executive Officer
(Principal
Executive Officer)
|
December
27, 2007
|
/s/ Michael
R. Cox
Michael
R. Cox
|
Vice
President, Finance and Administration, Chief Financial Officer
and
Treasurer (Principal Financial and Accounting Officer)
|
December
27, 2007
|
/s/ William
E. Baitinger
William
E. Baitinger
|
Director
|
December
27, 2007
|
/s/
David W. Crabb
David
W. Crabb
|
Director
|
December
27, 2007
|
/s/
Leslie B. Daniels
Leslie
B. Daniels
|
Director
|
December
27, 2007
|
/s/
Larry
S. Boulet
Larry
S. Boulet
|
Director
|
December
27, 2007
|