. THE NAPEAGUE LETTER
Saturday, March 8, 1997
Editor: Bob Davis rmdavis1@ix.netcom.com
ABATIX ENVIRONMENTAL - (NASDAQ:ABIX)
After the market closed on Thursday, Abatix Environmental (NASDAQ:ABIX)
announced somewhat disappointing financial results for the fourth quarter
and total 1996 year.
To summarize the results, although revenues increased 20% for the total
year, to $33.1 million from $27.6 million in 1995, net income decreased
8% to $755,000 from $813,000 in 1995. Earnings per share on continuing
operations dropped to $.35 from $.36 in the prior year, on a reduced
number of shares outstanding. A complete copy of this press release can
be found on the Internet on Yahoo - "Stocks" and at a number of other
locations.
In the fourth quarter, revenues increased 16%, to $7.9 million from $6.8
million in the same quarter in the prior year. However, net income fell
by $116,000, to $30,779 from $146,793 in the same quarter in 1995.
Earnings per share for the quarter dropped to $.02 from $.07 in the
prior year quarter.
Although the Company's press release cites "a 1% decline in product
margins" as the cause of this earnings decline, my analysis of the
quarter's income statement shows that the $309,000 increase in "Selling,
General & Administrative" expenses had a considerably larger impact.
The press release goes on to state that the Company "made a significant
investment in technology in the fourth quarter, the benefits of which
will be realized in future periods." It is possible that this may have
contributed to the increase in SG&A expense.
The market appeared to see these results in a positive light. ABIX rose
3/16th on Friday, March 7th in relatively heavy trading (37,300 shares)
and closed at its high for the day. |
